McWILLIAMS v. CITY OF LONG BEACH

Respondent’s Petition for Review

Cal.April 30, 2012

5202037 IN THE SUPREME COURT OF THE ~ STATE OF CALIFORNIA JOHN W. MCWILLIAMS SUPREME COURT Plaintiff and Appellant, mye * ApR 3 0 2012 CITY OF LONG BEACH, eeeuenicxOne| oho Defendant and Respondent. nr PETITION FOR REVIEW Of an Unpublished Decision of the Second Appellate District of the Court of Appeal Case No. B200831 Reversing a Judgment of the Superior Court of the State of California for the County of Los Angeles, Case No. BC361469 Honorable AnthonyJ. Mohr, Presiding CITY ATTORNEY’S OFFICE » COLANTUONO & LEVIN, P.C. ROBERT E. SHANNON(43691) MICHAEL G. COLANTUONO(143551) J. CHARLES PARKIN (159162) SANDRAJ. LEVIN (130690) MONTE H. MACHIT (140692) TIANAJ. MURILLO (255259) 333 West Ocean Blvd., 11 Floor 300 S. Grand Ave., Suite 2700 Long Beach, CA 90802-4664 Los Angeles, CA 90071-3137 (562) 570-2200 (213) 542-5700 (562) 436-1579 (fax) (213) 542-5710 (fax) 109243.5 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA JOHN W. MCWILLIAMS Plaintiff and Appellant, v. CITY OF LONG BEACH, Defendant and Respondent. PETITION FOR REVIEW Of an Unpublished Decision of the Second Appellate District of the Court of Appeal Case No. B20083! Reversing a Judgment of the Superior Court of the State of California for the County of Los Angeles, Case No. BC361469 Honorable AnthonyJ. Mohr, Presiding CITY ATTORNEY’S OFFICE COLANTUONO & LEVIN,P.C. ROBERT E. SHANNON(43691) MICHAEL G. COLANTUONO (143551) J. CHARLES PARKIN (159162) SANDRAJ. LEVIN (130690) MONTE H. MACHIT (140692) TIANAJ. MURILLO (255259) 333 West OceanBlvd., 11° Floor 300 S. Grand Ave., Suite 2700 Long Beach, CA 90802-4664 Los Angeles, CA 90071-3137 (562) 570-2200 (213) 542-5700 (562) 436-1579 (fax) (213) 542-5710 (fax) 109243.5 TABLE OF CONTENTS Page QUESTIONS PRESENTED FOR REVIEW...ecsssssssssescsssssssssecsssscessesssssecsesseccssses 1 WHY REVIEW SHOULDBE GRANTED.....secsssssssssessetecsssessecesucsssesssssesssceseces2 I. THESE QUESTIONS REQUIRE PROMPTDECISION. .....cscssecsssesseesse4 A. This is But One of Many Challenges by a Purported Taxpayer CASS... eeceessseessseesseessssssscsnsccsesssccssessscesssesecsssecsasssusessecsrsessecssesessessee4 1. Telephone Tax Litigation... cessssesssssesssessessssseeseesseseseen4 2. Utility Rate Litigation...cecsessesssssssesscsssssusssessssesreaeens7 3. Challenges To Other Fees.........ccscssssssssssssessssscsesstecessesessen8 B. These Cases Urgently Require Guidance From this Court......8 Il. = STATEMENTOF THECASE......ccsssecsssscssssesssesssssesecesuessssesssesesssecsssecenee 10 A. The Trial Court Action. ....c.ccccccssssssssssssssssssssssesesssecssessesssseessscescess 10 B. The Appeall. .....ccccsccessesseseessesssesssecssecssessssessssssssssesesecssueessesssseeren 12 TIL. == LEGAL DISCUSSION.....sssessssssssesssecsssesssessssscssssssssesssecessessssesssnesnssecsees 15 A. GovernmentCode § 905(a) WasIntended to Preserve Local Claiming Requirement....0......cccssssesssecsssssecsesseessscsssecueessesssesscens 15 B. The 1959 and 1963 Claiming Statutes Had Fundamentally Different Objects and Each Uses “Statute” Differently...........15 109243.5 1. The 1959 Legislature and Contemporaneous Courts Understood “Statute” to Include Local Ordinances and Charter Provisions... ssesssessesseessecsecssessstsseessecsarectesees 17 2. The 1959 Legislature Was Not Concerned with Uniform Claiming Procedures for Taxes ....c..ccccccssssssssecssesscsseees 19 3. The 1963 Legislature Did Not Intend to PreemptLocal Claiming Requirements Regarding Tax Refunds.........21 4. The 1963 Legislation Addressed SubstantiveLiability, Not Claiming Procedures...scecessceesesessssesseesscsseseees22 C. Charter Cities Like Long Beach Derive Their Powerto Tax Directly From the State Constitution.oo...ececeseeseeseseeeeees25 D. The Second Sentence of Article XIII, §32 Applies to Local GOVEINMEMUS.......cccccssccccsccscccessccssccccsssccececsscssscccessesaceceesersescessecone27 TV. CONCLUSIONwie. ecccecccsccccecseccsescesessccssssssesccsssaessecsscsecsecscsessusseesseceeee29 CERTIFICATION OF COMPLIANCE.......c.ccccccsssssescssscssssecssessescesecesssessecseceece31 ii 109243.5 TABLE OF AUTHORITIES CASES ABCellular LA, LLC v. City of Los Angeles (2007) 150 Cal.App.4!® 747 v.essssssssssssssscssssssscssssesssssssssssssssssaseneeeeees Allende v. Departmentof the California Highway Patrol (2011) 201 Cal.App.4! 1006 ......scccssssssssssssssecssecsessssssesssesecsssssseen Ardonv. City of Los Angeles (2011) 52 Cal.4! 240 oovccccccccccssccssssessssseecsesssssecsesseveesesssesessessesseveees Ardonv. City of Los Angeles, 94 Cal.Rptr.34 245 (2009) review granted......cecessessessseeeeeess Batt v. City & County of San Francisco (2007) 155 Cal.App.4!? 65 veccccssssssscssssssssssssssseseccssssssssseecessessssseseees California Fed. Sav. & Loan Assoc. v. City of Los Angeles, D4 Cal.34 1 woeseccseseseeeecscsesenesesssscsesesssesesesescsesessssassscsassesscseas California Restaurant Management Systemsv. City of San Diego (2011) 195 Cal.App.4! 1581 sccccsscssssssssssssssssssccssssesesssseeessesereeeess County ofLos Angeles v. Superior Court (Oronoz) (2008) 159 Cal.App.4!® 353 ..ccccsscsssssssssssssssssssssssssssssseeseeessssneeseees Cruise v. City and County of San Francisco (1951) 101 Cal.App.24 558 ..ccccscccssscsssssssssssssseseccssssssssssneseeseeseeeereees Ex parte Braun (1903) 141 Cal. 204oeeccecesssssssesssesesssesesesecsesessesssssssssseseeneees Germ v. City and County of San Francisco (1950) 99 CalApp.24 404.00. cecesseessesessssssesesessssesseseesesesesscenes In re Groundwater Cases (2007) 154 Cal.App.4 O59 vo ecseessssssecensecntenesssseseeaeenessessesseesecssneees iti 109243.5 Page(s) wee errceenececcces6 sesssasensaeseeees8 eenens passim sssseseveseesens 13 eeeteeeenes9, 14 sevesessenenees26 veseeeeaseeses7,8 seseeeeeeeenenee 12 secsneeseeeseees 18 seoeesseaeees26 seseeeeseeeseens 18 seesseseeeessens 16 Johnson v. Bradley (1992) 4 Cal.4! 389ooecssscccsececsecscscsecesecesecessecescsesesseeesesssesseeseseseeeseeees26 Muskopfv. Corning Hospital District (1961) 55 Cab.24 211eeesescseseeeseseseeesseeseceeeecasssesecesseseeessseeeeseeesacs passim Parodi v. City and County of San Francisco (1958) 160 CalApp.24 577... ccscscssssssecsesessssscceseetecstsecaeeeeeessesesceseseseeseees 18 Pasadena Hotel Development Venture v. City ofPasadena (1981) 119 Cal.App.34 412.eeeesecescecseceseseeecssseseeeteseseseseseeteeseas 18, 21, 23 People v. Cruz (1996) 13 Cal.4764...cssesesscsssecseessseeeseseseeeetecsesssacaceneeasseseesesseesersees 17 The Pines v. City of Santa Monica (1981) 29 Cal.34 656.2...esssstecsssssceesecesesecescessesessenscseeecacsceetseseeesseetesesseees25 Weekes v. City of Oakland (1978) 21 Cal.34 386.00. ccseseeesesesecesecseececssesscsesesesesesecsssssssesasseseeaeseseseeeees26 Woosley v. State of California (1992) 3 Cal.4? 758oeeseesesesssesceteeseseeeeseseeeseseaccnecsesesasseseesssesseseseseseatens28 STATUTES 47 U.S.C. §§ 151 et SOQ.oeeececcscsesesesecesescecesecscscsesecscesenteasaeseesssaeseeseatsasersecaees6 Bus. & Prof. Code § 5499.14...cesessecsesseseseseeesaceencnecatesesesseenssseaesseeseeees20 Cal. Govt. Code § 703 .....cccccccsscssssssssssscseccssscscsscsscsecsssecseceessstersaseasenesaees 15, 21, 23 Cal. Govt. Code § 703(a) ....ccccsssessssscsesssssesessesssssesesessessssscssssesssecssscscscasseseasenene21 Cal. Govt. Code § 730 on. eeeesesssssssssssesessesssssessessessessesesesesecsesesesecssassescssessessesseas21 Cal. Govt. Code § 810.occ cccccccsssesssscsesesessssesesssecsecssessssccsssssscssasscsssssassceneees 1, 16 Cal. Govt. Code § 811 o.ocicccccsssssssssseseseseccssssesessssssssssesssscsesssessusassceseseseacenees 14 Cal. Govt. Code § 811.8 oo... cccccssscsssscsssseeseesssssssssssssssssssecsssssssssesesesesceseaseces 15, 16 Cal. Govt. Code § 815 vececccssssssssssesssessssscsesnsssserescsesesessscsnesseessesscsssscasstecaeaees 17 Cal. Govt. Code § 905 on. cecessssssessessssessssscesesesssceessssssessessssscssssssstsnscsscssaees 14, 15 iv 109243.5 Cal. Govt. Code § 905(a) ....c.cecessssesssssssssssssssssrsessesesssacecsesecsesussecsssesscsessaees passim Cal. Govt. Code § 905(b) ......essesssssssssscsesssssssssssssssseacscsessesessesueseessssesessesesscsscevens 15 Cal. Govt. Code § 910 oes ececssssessesssssecsssesessecsssssesscsucsarsessseesanesecanenessees passim Cal. Govt. Code § 935... .esessesssssssesssssesessssssssseusssssusacacaesacsussesssstesssavsscassesassesesece21 Cal. Govt. Code § 53750, subd. (hh)..ccssecssssesssssssssessssssssssessstsstessessessesessssessseasceves 6 Cal. Rev. & Tax Code § 5097 o...ececscsssssssssscssssssssesressssssesasssessssstssecessessessesssasens20 Cal. Rev. & Tax Code § 5140 woceeccccsessssccssessssssssssssescsessesssesasssesassessesesesessseasens20 Stats. 1963, Ch. 1681, p. 3267 .....ceseccsssssssssssessessssssssssssnssessecaesacaressessesassecsesessesese 16 OTHER AUTHORITIES Cal. Const., Art. XI, § 3 eccccccccssccsscscsessssssssssssessessssecscsscsssesacscereeesseceesees 1, 25, 27 Cal. Const., Art. XI, § 3, subd. (a) w.cecccccscssscccecccsssesestssesessesecsecssscaseccsverereeseees25 Cal. Const., Art. XI, § 5.uiccccccccccssscssccsesescsessseaes sesescesseeececessscessnscesecsesseees 1, 27 Cal. Const., Art. XI, § 5, Subd. (a) cocccccccsccscccssssescestescscsessssssesssscssseseeeseeeeeceD5 Cal. Const., Art. XL, § 7 ececcessssssssssssssecsssssssesecsssessesecasacsassesecaessusarsassvascess 1, 25, 27 Cal. Const., Art. XI, § 12 ...ccccccccscssescsssssesssscssecsesssssssssesssvssssessesessesessesececesesecce.27 Cal. Const., Art. XIIL, § 32 w.ecccecescscsccsesecssscssscssssssssscsessssessereeseresesececeseces passim Cal. Const., Art. XTILC, § 2 cccccccscssccssscssssesesssssssssscssssssssssssssssesscesesesesececececececc,6 Cal. Const., Art. XTIEC, § 2, subd. (b).ccccccccsssccssescsesesssseseesssssssecsssceseseseeees 11 Cal. Const., Art. XII D, § 6 cecccccecccsssscssccssescssssecsessessesssssssscereseessesecesececesecccec. 7 2 Cal. Law Revision Com. Rep. (1959) ..cccccsssscssccesescesessesesresssasesees 18, 19, 20 4 Cal. Law Revision Com. Rep. (1963)...csccssssssssssssesecsssesssssesesscseees21, 22, 23 Cal. Rules of Court, Rule 8.500(b)(1)....ccescccsssssssssesesstececsesesssscsessesssssssssssercesees2 Cal. Rules of Court, Rule 8.1105(C) .o.ceccecsssssscsssssssececessssassessessscssesessssssareeseseeess 14 Cal. Rules of Court, Rule 8.1115(b)(1)....cccccccssssssccssssssssesssssessessessessesscsssseenes 13 Long Beach Municipal Code § 3.68.160 .....ccccscsssssssssssssssssssseessessuessecsecesssscens 11 Long Beach Municipal Code § 3.48.060 ......scessesssssesssssssessssessssessecsssesseerecsaseans 11 San Francisco Municipal Code § 6.15-1 vcecccsssessssssssssesssssssessssectecssessecssessessssen9 Vv 109243.5 To the Honorable Chief Justice and Associate Justices of the California Supreme Court: The City of Long Beach respectfully petitions for review of an unpublished Opinion of the Second District Court of Appeal, Division Three, filed March 28, 2012! from which a Petition for Rehearing was denied April 12, 2012. Plaintiff’s Request for Publication was denied April 23, 2012. QUESTIONS PRESENTED FOR REVIEW 1. Government Code § 905(a) excepts “claims under... [a] statute prescribing proceduresfor the refund ... of any tax, assessmentfee or charge” from the scope of the Government Claims Act.2 Did the Legislature use “statute” in this section to excludelocal legislation and to require claims for refundsof local taxes, assessments, fees and charges to be governed by the Government Claims Act? 2. If so, does § 905(a) violate the home rule powerto tax conferred on chartercities by Article XI, §§ 3, 5 and onallcities and counties by Article XI, § 7 of the California Constitution? 3 ' That opinionis attachedto this Petition as required by the Rules of Court andis referencedin this Petition as “Opinion.” * Government Code § 810 et seq. ° All unspecified section references in this brief are to the California Government Code. Unspecified references to articles and sections of -1- 109243.5 3. Does the second sentence of California Constitution, Article XIII, § 32, which requires express legislative authorization for tax refunds, apply to local government? WHY REVIEW SHOULD BE GRANTED This case raises a pressing question expressly reservedin this Court's recent decision in Ardonv. City of Los Angeles (2011) 52 Cal.4th 241, 246 n.2 (hereinafter, “Ardon”) — does the Government Claims Act preempt local claiming requirementsstated in city charters and city and county ordinances? This question controls perhaps $50 million of tax revenues in the present action and hundredsof millions more in other pending disputes. Dozensof local governments are now defending pendingclass actions on thebasis of such claiming requirements. An authoritative decision of the question is necessary to avoid needless effort by manytrial and appellate courts, and needless uncertainty for plaintiffs, defendant local governments and the people those governments serve. Review by this Court is authorized by California Rules of Court, Rule 8.500(b)(1) to secure uniform application of the Government Claims Act and tosettle the importantlegal question set forth above. Despite the plain intention of the Legislature otherwise, the Courtof Appealcreated a void in local tax-refund claiming practice by concluding that § 905, subd. (a)’s definition of “statute” excludeslocal claiming ordinances. This void is one that only § 910 canfill, and, as Ardon recently articles are to the California Constitution. -2- 109243.5 explained, § 910 permits class claims. (Ardon, supra, 52 Cal.4th 241 at 250- 251.) Thus, the decision beloweffectively imposes a class action remedy on cities that no legislative body ever intended. The Legislature that adopted the Government Claims Act in 1959 intended to preserve California’s long- standing practice of deferring to local charters and ordinancesto provide refund claiming proceduresfor local taxes. By imposing an ahistorical readingon thatstatuteto find nonexistentintent, the Court of Appeal madea sea changein the law. A change worthy of this Court’s Review. Additionally, the Court of Appeal assumedlegislative power to impose § 905(a)’s policy determinations at the expense of Long Beach's homerule powerto tax telephone services to fundvital local services. While the Court of Appeal’s decision targeted a single City’s municipal code,the statute at issue applies to all local governmentsin ourState and this case presents an opportunity to clarify the meaning ofthatstatute. Finally, the second sentence of Article XIII, § 32 of the California Constitution states: After paymentofa tax claimed to be illegal, an action may be maintainedto recoverthe tax paid, with interest, in such manner as maybe provided bythe Legislature. Although this Court determined in Ardon thatthe first sentence of this § 32 (forbidding injunctionsagainstthe collection of taxes pendinglitigation) applies by its terms only to theState, it reserved the question whetherthis second sentence applies to local governments. (Ardon, supra, 52 Cal.4* 251- 52.) Given the consequences of imposing the expensive and powerful class-action remedy on local governments which have adoptedcontrary -3- 109243.5 procedures, and given that any attorneys fees to class counsel comeat taxpayer’s expense, the lower courts and local governments needthis Court to determine this issue before further expense is devoted to litigating the question in multiple venues around California. I. THESE QUESTIONS REQUIRE PROMPT DECISION A. This is But One of Many Challenges by a Purported Taxpayer Class. The City of Long Beach is only one of many California municipalities defending a purported class challenge to a local tax refund ordinance. Recent months have seen a wave of such challenges in California trial courts to local telephonetaxes, utility rates and other fees. The examples belowareillustrative. I. Telephone Tax Litigation McWilliams v. City of Long Beach. In the case at bar, Plaintiff / Appellant John McWilliams (“McWilliams” or “Appellant”), on behalf of himself and a purportedclass, sued the City of Long Beach (the “City”) for a refund of phone taxes. Appellant primarily objects to the manner in which the City calculates its Telephone Users Tax (“TUT”), and claimsthat changesin the interpretation of the federal excise tax on telephony (“FET”) (referenced in the City’s tax ordinance) require reduction in the TUT tax base. The City does not concedethatits tax is illegal and maintainsthatits ordinancedoes not permit class claims. 109243.5 Ardon v. City of Los Angeles (2011) 52 Cal.4241. In Ardon, the plaintiff challenged a local telephone tax on behalf of himself and a purported class. Unlike the case at bar, however, Los Angeles asserted no applicable local claiming ordinance whenit arguedin this Court.(Id. at 246 n.2.) Granados v. County of Los Angeles, 2-4 District Court of Appeal Case No. B200812. (MJN at Exh. A.‘) As in Ardon, the plaintiff in Granados challenged a local telephonetax (a tax paid to the County of Los Angeles) on behalf of himself and a purported class. Granados, like Ardon, did not involve a local ordinance barring class relief. The instant case, however, squarely presentsthis issue. City of Chula Vista v. Superior Court, 4 Court of Appeal Case No. D06156.! (See Exhibit A to Letter from Plaintiff / Appellant’s Counsel, Jon Tostrud, to Court of Appeal Requesting Publication of McWilliams, dated April 17, 2012.) The City of Chula Vista demurred to a purported class claim challenging the City’s allegedly improper collection of its TUT on mobile phoneservices. Like the City of Long Beach in the caseat bar, Chula Vista contends that its municipal code precludesthefiling of class claims for tax refunds. The San Diego Superior Court recently overruled Chula Vista’s demurrerto the class action by concluding, in part, that the City’s ordinance wasnot a “statute” within the meaningof § 905, subd.(a). (Id.) Chula Vista hasa Petition for Review and Request for Immediate Stay * MJN refers to the Motion for Judicial Notice filed concurrently herewith. -5- 109243.5 in this same matter, currently pending before this Court. Case No. $201440. (MJN at Exh.B.) Sipple v. Alameda, et al., Los Angeles Superior Court Case No. BC462270. (MJN at Exh. C.) A massive, class-like claim is pending against every California local government which imposes a telephone tax—115 California cities and two counties. Sipple is based on an underlying consolidated action in the Northern District of Illinois in which customers in 46 states, Puerto Rico, and the District of Columbia filed a numberof putative class claims against AT&T Mobility LLC (“AT&T”) in various federal courts alleging, inter alia, that AT&T erroneously applied telephone taxes to internet access services exempt from tax under the federal Internet Tax Freedom Act. 47 U.S.C. §§ 151 et seq. (MJN at Exh. E, p- 3.) All suits were consolidated and transferred to the Northern District of Illinois, where the Court eventually approved settlement between the » The case wasoriginally filed against 134 defendants. Early settlements by those with small stakes have reduced the current defendant count to 117. Proposition 218, California Constitution, Article XUI C, § 2, subs. (b), (d), requires voter approval for any “increase”in a local tax. Government Code § 53750, subd. (h) defines that term to include any change in the “methodology” by which that tax is administered. (AB Cellular LA, LLC v. City of Los Angeles (2007) 150 Cal.App.4* 747.) At the sametime, changesin the telecommunications industry are profound and ongoing. Regulatory inflexibility in the face of a protean regulated industry has produced a bevy of telephonetax disputesin recentyears. -6- 109243.5 plaintiff classes and the carriers —but not taxing jurisdictions, which were not parties there. (MJN at Exhs. C, ¥1; F, pp. 1-3.) Pursuant to the settlement, the Northern District of Illinois authorized AT&T and a settlement subclass to “procur[e] refunds” from California cities and counties, seeking telephone taxes allegedly overpaid. (MJN at Exhs. C, {2; F, pp. 12-13.) Sipple presents an unprecedented, lucrative source of revenue for class action counsel that — like the other class claims here discussed — comesat the expense of taxpayers. Although the California suit is not pled as a class action, the defendant local governments have a pending demurrer seeking dismissal of the suit on the basis,inter alia, that the complaint does not allege compliance with their respective ordinances. (MJN at Exh. D, pp. 23-29.) 2. Utility Rate Litigation Borst et al. v. City of El Paso De Robles, San Luis Obispo Superior Court Case No. CV 09-8117. (MJN at Exh. G.) This is a class action challenge to water rates established by the City of Paso Robles and collected beginning in 2002, alleging the rates violate the requirements of Proposition 218, Article XIII D, § 6. The case was stayed pending this Court's decision in Ardon. Shames v. City of San Diego, San Diego Superior Court Case No. GIC831539 was a class action challenge to the manner in which San Diego calculated sewer service charges. (MJN at Exh. H.) As described in California Restaurant Management Systems v. City of San Diego (2011) 195 Cal.App.4" 1581, the case has since been settled. However, the parties -7- 109243 .5 litigated whether the class-action remedy was permissible in Shames. California Restaurant Management Systems was resolved onthe basis of the GovernmentClaims Act. A local claiming ordinance wasnotasserted. 3. Challenges To Other Fees Hanns v. City of Chico, Butte County Superior Court Case No. 149292. (MJN at Exh. I.) The City of Chico is currently defending a purported class action challenging a fee on those arrested for driving under the influence to recover the City’s emergency response costs. The case is comparable to a challenge to the California Highway Patrol’s enforcement of similar fees recently addressed by the First District. (Allende v. Departmentof the California Highway Patrol (2011) 201 Cal.-App.4* 1006.) B. These Cases Urgently Require Guidance From this Court. In the cases cited above, local governments are defending (or recently defended) class or class-like claims for refundsto local taxes and fees and most are seeking to enforce local claiming requirements. Would- be class representatives argue these ordinances and charter provisions are preempted by the Government Claims Act on the basis reasoning similar to that of the Court of Appeal here. All told, the cases involve hundredsof millions of dollars, more than 100 local governments (Sipple alone involves 117), nearly all Californians, and fundamental questions about the procedures applicable to public finance disputes in our state. Further, that these cases havebeenfiled in various California jurisdictions demonstrates -8- 109243.5 that many trial courts in the State are struggling to deal with important questions unresolved by Ardon. While California cities’ municipal ordinances are not uniform — and while individual cities may havedifferent legislative policies regarding class claims for refundsof taxes or fees — these differences will not reduce the utility of this Court’s review of this case. Generally, local ordinances have addressed the availability of a class action remedy for tax or fee refundsin one of three ways: e by not adopting an ordinance or charter provision to explicitly address the issue (as in Ardon); e by expressly barring class claims(as in Batt v. City & County of San Francisco (2007) 155 Cal.App.4* 65 (class action claim for refund of hotel bed taxes barred by San Francisco Municipal Code § 6.15-1));° or, e as here, where class claims are simply not authorized by claiming rules that speak only to claimants and not to their representatives. Manycities, counties and special districts have claiming ordinances like Long Beach’s. Indeed, class claims only became plainly possible in this context with the recent Ardon decision andit is therefore to be expected that express rejection of class claims would be a relative newcomerto local claiming ordinancedrafting. 6 While Ardon distinguished Batt (52 Cal.4at 250), the 2™4 District here declined to the follow the case. Opinionat11. -9- 109243.5 Accordingly, all local governments require guidance on the important questions reserved by Ardon regardless of the present form of their local claiming requirements. Il. STATEMENT OF THE CASE A. The Trial Court Action. The underlying complaint here asserts Appellant’s objections to the City calculation of its telephone tax and his claim that changes in the interpretation of the federal excise tax on telephony (“FET”) required a reduction in the City’s telephone tax base. Appellant contends that, when the Internal RevenueService (IRS) changed its position with respect to the FET in July 2006 via Notice 2006-50,’ the City was required to changeits interpretation of its local tax (which cites the FET) as well. The City Council acted by ordinance to clarify that its ordinance was intended to reference the FET as the IRS has construed it from 1979 until 2006 and that it did not acquiesce in the IRS’ narrowing of the federal tax with respect to the construction of its own tax. Appellant challenged the City’s collection of its local tax on telephony, claimingthis clarification was a tax “increase” requiring voter approval under Proposition 218, Article XIII C, § 2, subd. ” Notice 2006-50 is found at Exhibit G to the City’s Request for Judicial Notice filed with its Respondent's Brief in the Court of Appeal on April 30, 2008. -10- 109243.5 (b). That issue was not resolved by the trial court, which did not reach the merits. In November2006, Appellant, purporting to act on behalf of a class of taxpayers, sued the City of Long Beach for a refund of phonetaxes. Appellant asserted six causes of action: (1) declaratory and injunctiverelief to prevent collection of the tax; (2) declaratory relief regarding the non- voter approved ordinance clarifying the intent of the tax’s FET reference; (3) money had and received; (4) unjust enrichment; (5) violation of due process, and (6) a writ claim. (CT, 18-21.)§ The complaint did not allege the individual members of the asserted class had filed administrative claims and relied only upon McWilliams’ claim filed. (CT 15 at | 65; CT 40-42.) The City demurred, arguing — amongother things — that the City’s Municipal Code § 3.68.160 and § 3.48.060 plainly did not authorize class claims. (CT 73; see also Exhibit F to Respondent’s Request for Judicial Notice filed with Respondent's Brief on April 30, 2008.) The trial court sustained the City’s demurrer to each of these causes of action. (CT 113.) McWilliams declined to amend his complaint and appealed. (CT 150, 158.) 8 CT refers to the Clerk’s Transcriptof the trial court action. ° The Court of Appeal failed to address § 3.48.060, although the parties each briefed it. The City pointed out this oversight in its Petition for Rehearing, which the Court of Appeal denied without comment. -11- 109243.5 B. The Appeal. Appellantfiled his notice of appeal July 19, 2007. In August 2008 the Court of Appeal stayed the case pending resolution of Ardon v. City of Los Angeles, Court of Appeal Case No. B201035, which involved the same counsel and a nearly identical complaint, but different defendants and a different ordinance.° The Court of Appeal then issued its published opinion in Ardon, questioningits earlier decision in County of Los Angeles v. Superior Court (Oronoz) (2008), 159 Cal.App.4 353"! and this Court granted 10 See Second Appellate District Order, dated August 20, 2008. Indeed, Granados v. County of Los Angeles, Ardon v. City of Los Angeles and this case all involved the sameplaintiffs’ counsel and nearly identical complaints.It can be surmised these defendants were chosen because they together account for 40% of the telecommunications market in California. 11 Justice Joan Dempsey Klein was the swing vote as between Oronoz and Ardon and in her concurring opinion in the latter case stated: “In view of the confusion in this area, it would be helpful for the Supreme Court to grant review in this case in orderto resolve the conflict between the Oronoz decision and the majority opinion herein. Review is further warranted because the question presented, i.e., whether GovernmentCodesection 910 authorizesa class claim for tax refunds, is a major statewide issue with serious implications for the public fisc. Currently, this Division alone hasat least two other appeals involving the sameissue. -12- 109243.5 review. After this Court decided Ardon on July 25, 2011, the Court of Appeal asked the parties to submit supplementalbriefing on the impact of that decision on thecaseatbar. At oral argument, counsel for the City outlined the legislative history of the Government Claims Actas set forth in this Petition below, which had only been partially captured in the supplemental briefing, and noted that the point had been morefully stated in the City and County of San Francisco’s amicus briefs in the Court of Appeal and this Court in Ardon. This point was partly addressed in a few paragraphsat pages 10-11 of the Opinion, a point which Plaintiff relied upon in his request for publication. The City more fully outlined its legislative history argument in its Petition for Rehearing, but the Court of Appeal denied that petition without comment, making no change to the Opinion. On March 28, 2011, the Court of Appeal held in Appellant's favor, reversing Judge Mohr’s order of dismissal of the first four causes of action and affirming his dismissal of the two remaining. Significantly, the Court concluded the City “is not authorized under the Government Claims Act Ardonv. City of Los Angeles, 94 Cal. Rptr. 3d 245, 257-58 (2009) review granted and opinion superseded, 216 P.3d 522 (Cal. 2009) and rev'd, 52 Cal. 4th 241 (2011). Wecite the Court of Appeal’s decision in Ardon, overtaken by this Court's grant of review, pursuant to Rule 8.1115, subd. (b)(1) to provide the proceduralhistory of this dispute and not with respect to the Court's holdings. -13- 109243.5 to establish its own claims procedure for TUT refunds.” (Opinion at p.2.) The Court reasoned that a city ordinance is not a “statute” within the meaning of Government Code § 905(a) and § 811. On that basis, it concluded that city ordinances governing the refund of local taxes do not fall within § 905’s exception to the Government Claims Act, and which therefore preempts local claiming requirements in the context of claims for refundsof taxes, fees, and assessments. (Opinion at pp. 7-12). To the surprise of the parties, the Court of Appeal’s Opinion was unpublished and the Court rejected McWilliams’ April 17% request for publication on April 23rd."2 The Court of Appeal decided important constitutional questions expressly reserved by this Court’s decision in Ardon, and created a conflict in the law by declining to follow Batt and the line of cases of which it is a part (a line of authority this Court distinguished, but did not reject in Ardon). Nevertheless, the Court of Appealdid notstate its reasoning for failing to designate the Opinion for publication. In light of the standards of Rule 8.1105, subd. (c) of the California Rules of Court, Appellant’s request for publication would seem to have been well taken. 12 See Letter from McWilliams’ counsel, Jon Tostrud, to Court of Appeal, dated April 17, 2012. 13 Rule 8.1105, subd. (c), of the California Rules of Court states: “An opinion of a Court of Appeal... should becertified for publication... if the opinion:... [a]jddresses or creates an apparentconflict in the law.” -14- 109243.5 lil. LEGAL DISCUSSION A. Government Code § 905(a) Was Intended to Preserve Local Claiming Requirements. The legislative history of § 905(a)’s exception for tax refund claims and of § 811.8’s definition of “statute” strongly suggests that the former was not intended to employ the latter’s narrow definition of “statute.” Rather, the legislative history shows that § 905 was intended to except from the Government Claims Act all tax claims for which alternative procedures are established — whetherbystate or local law. Moreover, the Legislature’s inclusion of new definitions in the 1963 GovernmentClaims Act was not meantto undothis originallegislative intent. B. The 1959 and 1963 Claiming Statutes Had Fundamentally Different Objects and Each Uses “Statute” Differently. The Court of Appeal concluded in its Opinion that the 1959 Legislature specifically rejected a Law Revision Commission proposalthat used the term “other provisions of law,” in favor of former Government Code § 703, which used the term “statute.” (Opinion, p. 10.)!4 From this, 14 The Legislature did so, but its concern was with the distinction between legislative enactments — whether state or local — and judge-made, common law. That distinction is crucial to construction of § 905, subd. (b) concerning mechanics liens, a body of law initially developed as common law, but later displaced by statute. In the interest of brevity, we do not develop the point now, but did so in oral argument below and will do so -15- 109243.5 the Opinion concludes that the 1959 Legislature used the term “statute” as it is defined in Government Code § 811.8. That definition of “statute” includes only enactments of the California Legislature or of the United States, and excludes local legislation. This reading is specious and anachronistic. Government Code § 811.8, with its narrow definition of the term “statute,” was not adopted until 1963 — four years later — and witha very different object in mind. (Stats. 1963, ch. 1681, p. 3267.) The 1963 amendments to the Government Claims Act did a dangerous thing — they added definitions,after the fact, to a complex statute.! Those amendments were motivated by the need to address Muskopf v. Corning Hospital District (1961) 55 Cal.2d 211, which upended tort law by ending the ancient doctrine of sovereign immunity. Thus, a narrow definition of “statute” was appropriate when legislating that liability against government must be based in statute.” However, there was no intent to upend long-standing claiming rules. in merits briefing if review is granted. * This statute can be found at Exhibit E to the City’s April 11, 2012 Motion for Judicial Notice in the Court of Appeal (“4/11/12 MJN”). ‘6 Aware of that risk, the Legislature provided in § 810 that the Act’s definitions apply “[uJnless the provision or context otherwise requires.” 7 “{T]here is no commonlaw tortliability for public entities in California; such liability is wholly statutory.” (In re Groundwater Cases (2007) 154 -16- 109243.5 To hold otherwise, as does the Opinion here, neglects the basic principle of statutory interpretation that “[t]he wordsof a statute are to be interpreted in the sense in which they would have been understood at the time of the enactment.” (People v. Cruz (1996) 13 Cal.4th 764, 775.) I. The 1959 Legislature and Contemporaneous Courts Understood “Statute” to Include Local Ordinances and Charter Provisions “Statute” was not defined by the Government Claims Law enacted in 1959 to unify disparate prior laws regarding claiming requirements. However, the legislative history shows the Legislature understood the term to embrace claim presentation requirements providedin state statutes as well as local ordinances and charter provisions. Most notably, the 1959 Law Revision Commission report on which the Claims Act was based and which the Court of Appeal has previously acknowledged constitutes Cal.App.4th 659, 688.) This principle is well settled, as commonlaw claims against governmententities were abolished by the Legislature in the 1963 reaction to Muskopf’s abrogation of the medievalrule of broad government immunity. Government Code § 815 states: Except as otherwise provided by statute: (a) A public entity is notliable for an injury, whether such injury arises out of an act or omission of the public entity or a public employee or any other person. (Emphasis added.) -17- 1092435 authoritative legislative history for the Act,'® specifically defines “claims statutes” to includelocal legislation: There seems to be no adequate generic wordfor referring collectively to statutes, city charters and ordinances. Since claims are governed by legal requirementsofall three types, the phrases‘claimsstatutes’ and ‘claims provisions’ are used interchangeably hereinto refer to all forms of legal claim presentation requirementsasa class. (2 Cal. Law Revision Com.Rep.(1959) at p. A-18)!9 Courts of the era also used the term “statute” in the claiming context to include local legislation. Those opinions used “statute” to include locally enacted claiming provisions, and used “statutes” to refer to claim provisions as a general category, regardless whether enacted by the state or a locallegislature. (See Parodi v. City & County of San Francisco (1958) 160 Cal.App.2d 577, 580; Cruise v. City & County of San Francisco (1951) 101 Cal.App.2d 558, 562-563; Germ v. City & County of San Francisco (1950) 99 Cal.App.2d 404, 413-414.) This underscores the Law Revision Commission’s observation that there was, in 1959, “no adequate generic word for referring collectively to statutes, city charters and ordinances” 18 See Pasadena Hotel Development Venture v. City of Pasadena (1981) 119 Cal.App.3d 412, 415 n.3 (citing the 1959 Law Revision Commission Report and noting that the “intent of the commission in regard to” the meaning of subdivisions of the Government Claims Act “may be deemed to be the intent of the Legislature”). 19 4/11/12 MJNat Exhibit A. - 18 - 109243.5 containing claim requirements.(2 Cal. Law Revision Com. Rep. (1959)at p. A-18.)?° Additionally, the Office of Legislative Counsel’s Report on the Government Claims Act as adopted in 1959 stated that tax claims were entirely excluded from the scope of the statute, and not just when other state legislation so provided. (Office of Legislative Counsel’s Report, at p- 1.)?! That Report explained that the legislation regarding presentation of claims againstlocal public entities: Exempts certain claims for money, including claims related to taxes, salaries and wages, workmen’s compensation, unemployment insurance, public assistance, bonds and other such matters. (Id. at p. 1.) 2. The 1959 Legislature Was Not Concerned with Uniform Claiming Procedures for Taxes Unlike its 1963 successor, the 1959 Legislature was concerned with a uniform claiming process, but not as to taxes: Provisions governing claimsfor refund of taxes, assessments, fees, etc. ... are frequently integrated with special procedures governing the assessment, levy and collection of revenue. They are separate and independentfrom the tort and contract claims provisions and do not create problemsof the same 20 4/11/12 MJN at Exhibit A. 21 4/11/12 MJNat Exhibit B. -19- 109243.5 nature and significance as the claims provisions embraced by the report. (2 Cal. Law Revision Com.Rep.(1959), at p. A-17.)?2 Indeed, § 905, subd. (a) is itself evidence that uniformity was not desired for tax refund claims. The Government Claims Act eschewed a one-size-fits-all formula for local tax refund claims, and instead embraces a heterogeneoustax refund claim regime. Too, various other statutes showthe diversity the Legislature finds appropriate for local taxes regulated at the state level. For example, Revenue & Taxation Code §§ 5097 and 5140 outline procedures for refunds of property taxes. Similarly, Business & Professions Code § 5499.14 allows local legislative bodies.to order refunds of assessmentsforillegal advertising displays. The state also regulates counties and schooldistricts, both of which are distinctly local but are creatures of the state in a way that municipal governmentsare not. Yet, as to local taxes enacted and enforced entirely at the local level, state law is silent — not because Government Code § 910 was intended to apply, but because it was understoodthat local legislation controlled claiming procedures by virtue of § 905, subd. (a). 22 4/11/12 MJNat Exhibit A - 20 - 109243.5 3. The 1963 Legislature Did Not Intend to Preempt Local Claiming Requirements Regarding Tax Refunds The Legislature’s intent with regard to former § 703, subd. (a) — the 1959 predecessor to 1963’s (and the present’s) § 905, subd. (a) — was to excludeall tax claims from the “unified claims statute:” With respect to this former subdivision, the Law Revision Commissionhasstated that it excluded from the scopeof the unifiedclaims statute then proposed by the Commissionall ‘claims for tax exemption, cancellation or refund.’ (See 2 Cal. Law Revision Com.Rep.(1959) p. A-117.) (Pasadena Hotel Development Venture v. City of Pasadena (1981) 119 Cal.App.3d 412, 415 fn. 3 (emphasis supplied).)2 When the Commission recommendedre-enacting this provision as the present § 905, subd.(a), it explained “[t]his section is the same in substance as Government Code Section 703.” (See 4 Cal. Law Revision Com. Rep. (1963), Recommendation on Sovereign Immunity, p. 1027.)*4 Likewise, the Commission explained that, with a minor exception not pertinent here, the present § 935 (empowering local governments to enact claiming requirements) was the same as former § 730. (Id. at p. 1040.) Thus, the 1963 enactment of the present version of these sections was not intended to change the meaning *3 The Opinionalso rejects this precedent. Opinionat 11. 24 4/11/12 MJNat Exhibit D. -21- 109243.5 of the 1959 statute as to claiming requirements; it was motivated by substantive liability concerns following Muskopf, as demonstrated below. That unchanged prior law excludedall tax claims for which there were alternative claiming procedures, whether those claiming procedures derived from state or local law. That remains the law to date and review of this case is appropriateto clarify this point. 4. The 1963 Legislation Addressed Substantive Liability, Not Claiming Procedures When the Law Revision Commission recommended, and the Legislature adopted amendments to the Government Claims ‘Act in 1963, these bodies were focused on the substantive laws of public agency liability, not on the unified claims procedure created four years earlier. What prompted this focus was Muskopf v. Corning Hosp. Dist. (1961) 55 Cal.2d 211, an earthquake in the law which abolished sovereign immunity, a doctrine of sufficient antiquity that it had a Latin label: Rex non potest peccare — The King can do no wrong. The Law Revision Commission stated: Since the decision in the Muskopf case, the Commission has devoted substantially all of its time during 1962 to the study of sovereign or governmental immunity. (4 Cal. Law Revision Com. Rep. (1963), Recommendation Relating to Sovereign Immunity, at p. 803, 809.) 25 4/11/12 MJN at Exhibit C. -22- 109243.5 Thus, the Commission recommended, and the Legislature enacted, most of the 1959 provisions — including former section 703 — in substantially their earlier forms, and indicated no intent to change the substance of the 1959 unified claims law. (See Pasadena Hotel, supra, 119 Cal.App.3d at 415 fn.3.) Rather, the Legislature and the Law Revision Commission focused in 1963 on the creation of unified and coherent law defining government immunities and liabilities after Muskopf turned then-existing law onits head. The Commission’s task was formidable; even before Muskopf, governmental immunity andliability in California was hardly clear-cut. As noted by the Commission, the pre-Muskopflegislation on the topic: expresses a variety of conflicting policies. Some statutes create broad immunities for certain entities and others create wide areasof liability. Some apply to many public entities and others apply to but one. In somecases, statutes expressing conflicting policies overlap. Even where statutes impose liability on public entities, they do so ina variety of inconsistent ways. Some entities are liable directly for the negligence of their employees... . Where statutes are not applicable, the courts have determinedliability on the basis of whether the injury was causedin the course of a governmental or proprietary activity... . Even where a public entity is immunefrom liability for a negligent or wrongful act or omission, the public employee whoactedorfailed to actis often personally liable; and many public entities have assumedthecost of insurance protection for their employees againstthis liability. - 23 - 109243.5 (4 Cal. Law Revision Com. Rep. (1963), Recommendation Relating to Sovereign Immunity, pp. 807-808.)?6 Given the scope and complexity of the Commission’s task — to create a comprehensive, unified liabilities statute out of an incoherentlegal landscape (the same incoherence which motivated this Court’s ground- breaking Muskopf decision) — it is hardly surprising that the resulting legislation was explicit about who wasliable, who was immune and under what circumstances, but made no changeto claiming requirements. This historical context explains why the 1963 Legislature distinguished among “enactment,” “statute,” “law” and “regulation” in amending the Government Claims Act. Those. terms are critical to interpreting many of the liability and immunity provisions in the new statute even as they were unnecessary to the codification of claiming rules four yearsearlier. The Opinion neglects this history, declined to review all of it,2” and reached the wrongresult. 26 4/11/12 MJNat Exhibit C. 2” The legislative history was summarized for the Court at oral argument and in the Petition for Rehearing, which it denied without comment. Petition for Rehearing at pp. 5-12. - 24 - 109243.5 C. Charter Cities Like Long Beach Derive Their Power to Tax Directly From the State Constitution. All cities and counties in our state are granted taxing power under Article XI, § 7 of the California Constitution.28 Similarly, Article XI, § 3 allowsa city or county to adopt a charter, “for its own government.” (Cal. Const., Art. XI, § 3, subd. (a).) Charter cities like the City of Long Beach derive their power to tax directly from the State Constitution, not from statutes of the Legislature. (The Pines v. City of Santa Monica (1981) 29 Cal.3d 656, 660.) A charter city has broad authority to “make and enforce all ordinances and regulations in respect to municipal affairs ... .” (Cal. Const., Art. XI, § 5, subd.(a).) Underthis “homerule” authority, the City’s ordinances regulating local tax refunds involve a municipal affair and therefore supersede inconsistentstate laws. Article XI, Section 5(a) of the state Constitution provides: It shall be competentin any city charter to providethat the city governed thereunder may make andenforceall ordinances and regulations in respect to municipalaffairs, subject only to restriction and limitations providedin their several charters and in respect to other matters they shall be subject to general laws. *8 “A county or city may make andenforce within its limits all local, police, sanitary, and other ordinances andregulations notin conflict with general laws.” (Cal. Const., Art. XI, § 7.) -25 - 109243.5 (Johnson v. Bradley (1992) 4 Cal.4th 389, 397-398.) This authority is so sweeping that properly adopted charters supersede all inconsistent state laws regarding municipal affairs. (Id.) Thus, over a hundred years ago,this Court recognized that the home rule provision in the California Constitution explicitly secured to chartercities: the maintenanceof ... charter provisions in municipal matters, and to deprive thelegislature of the power... to interfere in the government and managementof the municipality. (Ex parte Braun (1903) 141 Cal. 204, 209 (rejecting preemption challenge to a charter city’s business license tax).) Our courts have held repeatedly that matters of local taxation are municipal affairs. This Court observed that “the power of taxation is a power appropriate for a municipality to possess” and that such proposition was “too obvious to merit discussion.”(Id. at p. 209.) To boot: [T]he powerto raise revenuefor local purposesis not only appropriate but, indeed, absolutely vital for a municipality. [Citations] Moreover, the powerto tax for local purposes clearly is one of the privileges accorded chartered cities by the homerule provision of the California Constitution. (Weekes v. City of Oakland (1978) 21 Cal.3d 386, 392 (no preemptioin of charter city’s employee license fee measure based on gross receipts earned in charter city).) This Court has repeatedly held that matters of local taxation are municipal affairs and that the State cannot “decree the essentials of municipal tax policy.” (California Fed. Sav. And Loan Assoc. v. City of Los Angeles, 54 Cal.3d 1, 14.) -26- 109243.5 While Article XI, § 12 of the state Constitution also gives the Legislature the powerto establish claiming procedures,” historically, the Legislature has respected chartercities’ home rule powerto tax and he has declined to legislate claiming procedures for local tax refund claims. The Government Claims Actitself evidences the Legislature’s understanding that different taxes require different refund procedures, as well as the Legislature’s determination that the Act was neither sufficient nor intended to address them all (hence § 905, subd. (a)’s exemption of tax refund claims from the Act). Thus, the balance between the constitutional powerof charter cities and other local governments under Article XI, §§ 3, 5 and 7 and the Legislature’s power to establish claiming procedures under §12 of the same Article requiresclarification by this Court. D. The Second Sentence of Article XIII, §32 Applies to Local Governments. In its recent decision in Ardon, this Court deliberately reserved the question whether the second sentence of Article XIN, § 32 of the California Constitution applies to local governments. (Ardon, supra, 54 Cal.4th 241, 290.) There, the Court concluded that Government Code § 910 permits class claims for tax refunds in the absenceof local claiming requirements whether or not the second sentence of Article XIII, § 32 applies to local ** This provision states: “The Legislature may prescribe procedures for presentation, consideration and enforcement of claims against counties, cities, their officers, agents, or employees.” -27- 109243.5 governments. Section 32 reflects a broad public policy requiring that actions for tax refunds be expressly authorized by the Legislature: Nolegal or equitable processshall issue in any proceedingin any court against this State or any officer thereof to prevent or enjoin the collection of any tax. After paymentof a tax claimed to beillegal, an action may be maintained to recover the tax paid, with interest, in such manneras may be provided by the Legislature. (Emphasis added.) This Court has underscored the point by stating unambiguously that Article XIII, § 32 requires express legislative authorization for all tax refund claims, class or otherwise. (Woosley v. State of California (1992) 3 Cal.4t 758, 792 (“article XIII, section 32 of the California Constitution precludes this court from expanding the methods for seeking tax refunds expressly provided by the legislature”) (“silence did not constitute legislative authorization”).) Thus, the requirement of express legislative authorization for tax refund claims derives directly and plainly from our Constitution. The second sentence of Article XIII, § 32, unlike the first, is not limited to the State or its taxes, but addresses tax refund procedures generally. In further contrast to the first sentence, the second contains no limitation whatsoeveron the types of tax refunds subject to legislative authority; reflecting a broad policy requiring legislative authority forall tax claims, it is stated in broad and unqualified terms. Indeed, what reason could there be to find that the State has greater needforstability in its - 28 - 109243.5 finances than local governments?Is prison financing more fundamentalto the peace and welfare of California than the funding of law enforcement to send peopleto prison?Is state funding of education by ourlocal K-12 school systems more fundamental to the common wealth than local funding for those same systems? Applied to the case at bar, the second sentenceof Article XIII, § 32 meansthat the relevant legislature — the Long Beach City Council or the City’s people acting via initiative — must expressly authorize the class claim Appellant would pursue. The City maintains that its own municipal code does not authorize such claims, and this formsthebasis of the underlying dispute. The City, and all local taxing authorities in the State, require the Court’s clarification whether that code may apply. IV. CONCLUSION Ardon addressed an important question in the law governing tax refund procedures — whether, in the absence of a local claiming ordinance, class tax refund claims may be brought under the Government Claims Act. However, Ardon expressly reserved the equally important question thatis of pressing concern to dozensof local governments now in litigation: do local claiming laws apply to such disputes? This question urgently requires this Court’s attention not only becausetens of millions of dollars are at stake here and because hundreds of millions are stake in other pending cases. This question too bears decision now so that these disputes do not multiply, need not be litigated repeatedly, and can be -29- 109243.5 efficiently and promptly resolved for the benefit of plaintiffs, dozens of defendantlocal governments, and the millions of Californians they serve. Ardon reserved these important questions for another day and another case. With respect, the City asserts that that day and that case have come. The City respectfully urges the Court to grant this Petition for Reviewto clarify this procedural confusion so thatthe parties, litigants and trial courts can turn to efficient resolution of the merits of the underlying refund disputes without further procedural confusion. DATED:April 27, 2012 ROBERT E. SHANNON J. CHARLES PARKIN MONTE H. MACHIT LONG BEACH CITY ATTORNEY’S OFFICE 333 West Ocean Blvd., 11Floor Long Beach, CA 90802-4664 (562) 570-2200; (562) 436-1579 (fax) MICHAEL G. COLANTUONO SANDRAJ. LEVIN TIANA J. MURILLO COLANTUONO & LEVIN, PC i Tiana J. Murillo 300 So. Grand Avenue, Ste. 2700 Los Angeles, CA 90071-3134 (213) 542-5700; (213) 542-5710 (fax) ATTORNEYS FOR DEFENDANT/RESPONDENT - 30 - 109243.5 CERTIFICATION OF COMPLIANCE WITH CAL.R. CT. 8.504(d) Pursuant to California Rules of Court, Rule 8.504(d), the foregoing Petition for Review by Defendantthe City of Long Beach contains 6,950 words(including footnotes, but excluding the tables and this Certificate) and is within the 8,400 word limit set by Rule 8.504, subd.(d), California Rules of Court. In preparingthis certificate, I relied on the word count generated by Word version 14, included in Microsoft Office Professional Plus 2010. Executed on April 27, 2012, at Los Angeles, California. COLANTUONO & LEVIN, PC MICHAEL G. COLANTUONO SANDRAJ. LEVIN TIANA J. MURILLO Sona Q. uul)— Tiana J. Mutillo -31 - 109243.5 Attachment Court of Appeal Decision -32- 109243.5 Filed 3/28/12 McWilliamsv. City of Long Beach CA2/3 NOT TO BE PUBLISHEDIN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citingor relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not beencertified for publication or ordered published for purposesof rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATEDISTRICT DIVISION THREE JOHN W. McWILLIAMS, B200831 Plaintiff and Appellant, (Los Angeles County Super. Ct. No. BC361469) V. CITY OF LONG BEACH, Defendant and Respondent APPEAL from an order of the Superior Court ofLos Angeles County, Anthony J. Mohr, Judge. Reversedin part, affirmedin part. Wolf Haldenstein Adler Freeman & Herz, Francis M. Gregorek, Rachele R. Rickert, Tostrud Law Group, Jon A. Tostrud; Chimicles & Tikellis, Timothy N. Mathews; Cuneo Gilbert & Laduca and Sandra W. Cuneofor Plaintiff and Appellant. Colantuono & Levin, Michael G. Colantuono, Sandra J. Levin, Amy C. Sparrow, Tiana J. Murillo; Robert E. Shannon, Belinda R. Mayes, Heather Mahood and Monte H. Machit for Defendant and Respondent. INTRODUCTION This is a class action broughtby plaintiff John W. McWilliams against defendant City of Long Beach (City) challengingthe legality of the City’s telephone users tax (TUT). McWilliams appeals an order of dismissal entered after the trial court sustained the City’s demurrer to his complaint. Wereverse in part and affirm in part. Under the Government ClaimsAct, beforefiling a tax refund action, the plaintiff mustfirst file a claim containing the information required by Government Code section 910.’ The mainissue on appeal is whether McWilliamsis entitled to present a claim on behalf of the entire class, or whether each memberofthe purportedclass is required to file an individual claim priorto filing suit. We hold that under Ardon v. City ofLos Angeles (2011) 52 Cal.4th 241 (Ardon), McWilliamscan file a class claim for a TUT _ refund. The City contends Ardon is inapplicable because McWilliams was required to comply with the City’s claims procedures, which do not permit tax refund claims on behalf of a class. Wereject this argument. The City is not authorized under the GovernmentClaims Actto establish its own claims procedure for TUT refunds and, in any case, the City’s claims procedures do not require McWilliamsor other payers of the TUTto file a claim prior to pursuing a tax refund action. Wenonetheless hold McWilliams’s complaint does notstate sufficient facts to support the fifth cause of action for violation of due process and sixth cause ofaction for a writ of mandate. These causesofaction of action are based on MeWilliams’s assertion that he cannotobtain a clear and certain remedy if the TUTis ultimately found unlawful. McWilliams, however, concedesthat in light ofArdon, these causes of action are moot. Accordingly, we affirm the order of dismissal with respectto the fifth and sixth causes of action in the complaintbut reverse the order with respect to the remaining causes of action. Unless otherwise stated, all future section references are to the Government Code. BACKGROUND 1. Allegations in the Complaint The complaintalleges the following. Pursuant to Long Beach Municipal Code section 3.68, the City imposes a 10 percent TUT on amounts paid for telephone services by personsorentities located within the City. The TUTis paid for by service users (taxpayers) and collected by service providers (telephone companies). If a service user refuses to pay the TUT,the City can impose a 25 percent penalty. McWilliamsis a resident of the City who has paid and continues to pay the TUT. Long Beach Municipal Codesection 3.68.050, subdivision (d) excludes from the TUT amounts paid for telephone services exempt from the tax imposed undersection 4251 oftitle 26 of the Internal Revenue Code (Federal Excise Tax). Under numerous federal court decisions and a 2006 Internal Revenue Service notice, the Federal Excise Tax only applies to long distance service charged by time and distance. Today, however, “most long distance telephoneservice is charged undera postalized fee structure where the amountofthe charge depends only upon the amount of elapsed transmission time and notthe distanceofthe call.” The Federal Excise Tax and thus the TUT cannotbe imposed on such services. The City has nevertheless unlawfully collected and continues to collect to the TUT from McWilliams and other class members on telephoneservice exempt from the Federal Excise Tax. Long Beach Municipal Codesection 3.68.160 sets forth a means of obtaining a refund of TUT improperly collected. This section provides: “A. Whenever the amountof any tax has been overpaid or paid more than once or has been erroneously orillegally collected or received by the City Treasurer-City Tax Collector under this Chapter, it may be refunded as provided by this Section. “B. A service supplier may claim a refund or take as a credit against taxes collected and remitted the amountoverpaid, paid morethan once,or erroneously or illegally collected or received, whenit is established in a manner prescribed by the City Treasurer-City Tax Collector that the service user from whomthe tax has been collected did not owe the tax; provided, however,that neither a refundnor a credit shall be allowed unless the amountof the tax so collected has either been refunded to the service user or credits to charges subsequently payable by the serviceuser to the person required to collect and remit. “C. No refund shall be paid under the provisions ofthis section unless the claimantestablishedhis or her right thereto by written records showing entitlements thereto.”” (Italics added.) This refund provision does not provide a mechanism for an individual service user (i.e., taxpayer) to seek a refund ofillegally collected TUT. Further, under section 799 of the Public Utilities Code, taxpayers cannot require service providers to seek refunds on their behalf. On August 11, 2006, McWilliamssent a letter to the City demanding on his own behalf and on behalfofsimilarly situated taxpayers a refund of the TUT improperly collected and a cessation of impropercollection of the TUT. The City did not respond to this claim. In September 2006, the City purported to amend Long Beach Municipal Code section 3.68. Under the amended code, telephone charges exempt from the Federal Excise Tax are not exempt from the TUT. This amendment was enacted without electoral approval in violation of Article XIIIC ofthe California Constitution, commonly knownas Proposition 218. Basedonthese allegations, the complaint sets forth six causes of action. Thefirst cause of actionis for declaratory and injunctivereliefpreventing further collection of the TUT. The second cause ofaction is for declaratory and injunctiverelief preventing the “unconstitutional” amendment to Long Beach Municipal Code regarding the TUT. Thethird cause of action is for money had and received andthe fourth cause of action is for unjust enrichment. In these causes of action, McWilliams seeks a refund of improperly collected TUT on his own behalf and onbehalf of all membersoftheclass. We quote the complaint regarding the content of Long Beach Codesection 3.68.160. The fifth cause ofaction is for violation of the Due Process Clause of the Fourteenth Amendmentto the United States Constitution. The complaint alleges that because the City “provides neither adequate pre-deprivation nor post-deprivation relief” to taxpayers for unlawfully collected taxes, the City has violated the due process rights of McWilliamsand all class members. Finally, the sixth cause of action is for a writ of mandate. The complaintalleges the City “is obligated, but has failed, to provide adequate pre-deprivation or post- deprivation remediesfor the illegal collection of the [TUT].” Plaintiff seeks a writ of mandate requiring the City to provide an adequate remedy.” 2. Procedural History On November8, 2006, McWilliamsfiled his complaint against the City. The City demurred to the complaint on January 2, 2007. In its memorandum in support of the demurrer, the City argued the complaint failed to state facts sufficient to constitute a cause of action for three reasons. First, the City arguedthat under Woosley v. State ofCalifornia (1992) 3 Cal.4th 758 (Woosley), McWilliams could notassert a pre-lawsuit claim with the City on behalfofthe entire class. Because such a claim is a prerequisite to an action for a tax refund, plaintiff cannot maintain a class action seeking a tax refund as a matter oflaw. The City’s second argument was that McWilliams failed to file a claim with the City as required by the City’s municipal code. Alternatively, the City argued thatif the letter dated August 11, 2006, could be considered a “claim,”it did not substantially comply with the requirements of the Long Beach Municipal Code. Finally, the City argued that equitable relief was unwarranted because McWilliams had an adequate remedy at law, namely a tax refund. 3 Except as stated post, we express no opinion aboutthe merits ofthe first four causes ofaction in the complaint, includingbutnotlimited to the allegation that the TUT is unlawful and the allegation that the City unlawfully amendedits municipal code. On April 13, 2007, the trial court sustained the demurrer with 60 days leave to amend. In its minute order the trial court stated the demurrer was sustained “for the reasonsstated.” The transcript of the hearing on demurrerindicates thetrial court found McWilliamscould not file a pre-lawsuit claim on behalf of the class under Woosley. The court, however, rejected the City’s argumentthat equitable relief was unavailable on the groundthat declaratory relief was available if the TUT was indeed unlawful. On May8, 2007, the trial court held a hearing on an ex parte application filed by McWilliams. At that hearing McWilliams’s counsel stated that McWilliams would not amend his complaint before the expiration of the 60-day period granted by the court. Relying on this representation, the trial court entered a minute order stating the case “is ordered dismissed.” On June 12, 2007, the trial court entered an order of dismissal prepared by the McWilliams’s counsel. McWilliamsfiled a timely appeal of the June 12, 2007, order of dismissal. On August 20, 2008, after the parties filed their briefs in this court, we stayed the appeal pendingthe resolution of the Ardon case in the California Supreme Court. The Ardonopinion was published on July 25, 2011. On August 26, 2011, we lifted the stay and requested additional briefing regarding the affect ofArdon, if any, on the issues in this case. Both parties respondedbyfiling additional briefs, which we haveconsidered. CONTENTIONS McWilliams argues Ardonis dispositive of this appeal and mandates ourreversal of the trial court’s order of dismissal. He also contends the complaintstates facts sufficient to support each ofhis first four causes of action but concedes his fifth and sixth causes of action are moot. The City argues Ardon does not require reversal of the order of dismissal because McWilliams was not required to present a claim pursuantto section 910. Rather, the City contends, plaintiff was required to comply with the City’s claims procedure, which does not permit tax refund claims on behalf ofa class. Additionally, the City argues McWilliamsis barred from obtaining equitable relief because he has an adequate remedy at law. Finally, the City contends McWilliams’ due process and writ of mandate claimsfail because “post-deprivationrelief” is available. DISCUSSION 1. Standard ofReview Wereview the complaint de novo to determine whetherit alleges facts stating a cause of action under any legal theory. (Rakestraw v. California Physicians’ Service (2000) 81 Cal.App.4th 39, 43.) We assumeall of the facts alleged in the complaint are true and makeall reasonable inferences from thosefacts in favorofplaintiff. (Miklosy v. Regents of University ofCalifornia (2008) 44 Cal.4th 876, 883; Kruss v. Booth (2010) 185 Cal.App.4th 699, 714.) “However, the assumption oftruth does not apply to contentions, deductions, or conclusions of law andfact.” (C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1102.) 2. McWilliams Was Required to Present a Claim in the Manner Set Forth in the Government Claims Act, Not in the MannerStatedin the Long Beach Municipal Code Under the Government Claims Act, “no suit for ‘money or damages’ may be brought against a public entity until a written claim has beenpresented to the public entity and the claim either has been acted uponor is deemed to have been rejected. (Gov. Code, §§ 905, 945.4.)(Hart v. County ofAlameda (1999) 76 Cal.App.4th 766, 778.) Section 910 provides that a claim must contain certain information, “including the name and address of the claimant; the address to whichthe claimantdesires notices to be sent; the date, place, and other circumstancesofthe incident that gaverise to the claim; a general description ofthe obligation or loss; the names of the public employees who ‘ The parties agree that McWilliams seeks “money or damages”within the meaning of the Government Claims Act (see City ofLos Angeles v. Superior Court (2008) 168 Cal.App.4th 422, 430) and that McWilliams’s claim was deemedrejected because the City did not respondtoit (see § 912.4, subd.(c)). caused the loss; and the amountofthe loss if that amountis less than $10,000.” (City of Los Angeles v. Superior Court, supra, 168 Cal.App.4th at p. 427.) “Before 1959, taxpayer and other claims against the state, local and municipal governments were governed by myriadstate statutes and local ordinances. Finding this system too complex, the Legislature enacted the Government Claims Act(the Act), whichestablished a standardized procedure for bringing claims against local governmentalentities.” (Ardon, supra, 52 Cal.4th at p. 246.) The Act limited the authority of local entities to adopt their own claims procedures. As a general rule claims for money or damages against local public entities are governed by the proceduresset forth in the Act unless the claim falls within specified exceptions. (§ 905). Ifthe claim falls into one of the specified exceptions, and the claim is not “governed by anyotherstatutes or regulations expresslyrelating thereto,[it] shall be governed by the procedure prescribed in any charter, ordinance or regulation adopted by the local public entity.” (§ 935, subd. (a).) Here, the only ostensible exception to the general rule is stated in section 905, subdivision (a), which permits local claims procedures for “[c]laims under the Revenue and Taxation Code or other statute prescribing proceduresfor the refund, rebate, exemption, cancellation, amendment, modification, or adjustment of any tax, assessment, fee, or charge or any portion thereof, or of any penalties, costs, or charges related thereto.” (Italics added). The City contends Long Beach Municipal Codesection 3.68.160 is a “statute” within the meaning of section 905, subdivision (a). Wereject this argument. The Actitself defines the term “statute” as “an act adopted by the Legislature of this State or by the Congress of the United States, or a statewide initiative act.” (§ 811.8.)° Long Beach Municipal Code section 3.68.160 does notfall within the plain ° Section 811.8 was enacted in 1963, about four years after the enactment of section 703, the predecessor to section 905. (Stats. 1959, ch. 1724, pp. 4133-4134; Stats. 1963, ch. 1681, p. 3267). The City contends that when the Legislature enacted section 811.8 it did not intend to affect section 905, subdivision (a). In construing a statute, however, languageofthis definition. (Volkswagen Pacific, Inc. v. City ofLos Angeles (1972) 7 Cal.3d 48, 61-62 (Volkswagen Pacific) [city charter and ordinancerelating to tax refund were not“statutes” within the meaningof section 905, subdivision (a)]°; County ofLos Angeles v. Superior Court (2008) 159 Cal.App.4th 353, 361 (Oronoz)[section of the county coderelating to claims for money or damages was nota “statute” within the meaning of section 905, subdivision (a)]; see also Societa per Azioni de Navigazione Italia v. City ofLos Angeles (1982) 31 Cal.3d 446, 463 [the term “statute”in section 811.2 does not include local ordinances or regulations].) McWilliams therefore was only required to file a pre-lawsuit claim in compliance with the Act, and was not required to comply with claims procedures of the Long Beach Municipal Code. The City contends our conclusion is contrary to the holding in Pasadena Hotel Development Venture v. City ofPasadena (1981) 119 Cal.App.3d 412 (Pasadena Hotel), which was decided by this court. There, the issue was whether to apply the limitations period specified in Revenue and Taxation Code section 5097, subdivision (a)(2) or the limitations period stated in a city charter provision relating to tax refunds. (Pasadena Hotel, at pp. 413-414.) The court heldthestatute did notrelate to the taxpayer’s claim and that the limitations period of the city charter applied. (/d. at pp. 415-416.) In a footnote, the court stated “[t]he reference [in section 905, subdivision (a)] to ‘the Revenue and Taxation Code orother statute’ is not a limitation upon the type oftax claims excepted from the coverage of the [Torts Claims Act], aside from section 935.” “we presume the Legislature has knowledgeofall prior laws and enacts and amends statutes in light of those laws.” (In re Marriage ofCutler (2000) 79 Cal.App.4th 460, 475.) Further, section 811.8 was enacted pursuant to Senate Bill No. 42 (1963-1964 Reg. Sess.) on the same day former section 703 was renumbered to section 905 pursuantto Senate Bill No. 43 (1963-1964 Reg. Sess.). We thus presume that whenthe Legislature enacted section 811.8, it was aware of section 905, subdivision (a). 6 Arguably the discussion in Volkswagen Pacific on this issue was dicta. (See Volkswagen Pacific, supra, 7 Cal.3dat p. 63 [section 945.6 was the applicablestatute of limitations “whether section 905, subdivision (a), is read to either exclude or include the instant tax refund action... .”].) (Pasadena Hotel, supra, 119 Cal.App.3d at p. 415, fn. 3.) This conclusion was based on the court’s analysis oflegislative history. The Law Revision Commission (the commission) stated the predecessorto section 905, subdivision (a)—formersection 703, subdivision (a)—broadly applied to “all ‘claims for tax exemption, cancellation or refund.’ (See 2 Cal. Law Revision Com. Rep. (1959) p. A-117.)” (Pasadena Hotel, at p. 415, fn. 3.) The court reasoned that because formersection 703, subdivision (a) was “enacted in theform proposed by the commission,the intent of the commission in regard to [its] meaning may be deemedto be theintentofthe Legislature.” (Pasadena Hotel, at p. 415, fn. 3, italics added.) | This analysis of legislative history was incorrect. Former section 703, subdivision (a) was not enacted in the form proposed by the commission. Under the commission’s proposal “the standardized procedures of the Act embodied in section 910 would not have applied to ‘[c]laims under the Revenue and Taxation Codeor other provisions of law prescribing procedures for the refund .. . of any tax... .’ (Recommendation and Study Relating to The Presentation of Claims Against Public Entities (Jan. 1959) 2 Cal. Law Revision Com.Rep. (1959) p. A-12,italic added [proposed former § 703, subd. (a)].) However, the Legislature specifically rejected this proposal and instead enacted former section 703, subdivision (a) (now § 905, subd. (a)), which exempted from section 910 ‘claims under the Revenue and Taxation Codeorother statute prescribing procedures for the refund... of any tax....’ (Stats. 1959, ch. 1724, § 1, pp. 4133-4134,italics added.)” (Ardon, supra, 52 Cal.4th at p. 247.) Wetherefore cannot deem statements by the commission regarding former section 703, subdivision (a) to be the intentofthe Legislature. Accordingly, to the extent Pasadena Hotel impliedly determinedthat a city charter provision relating to tax refunds was a “statute” within the meaningofsection 905, subdivision (a), that determination was incorrect. This conclusion is consistent with our holding in Oronoz andthe statements madeby the California Supreme Court regarding the issue in Volkswagen Pacific. 10 The City also cites Batt v. City and County ofSan Francisco (2007) 155 Cal.App.4th 65 (Batt) to support its position. Batt, however, relied primarily on Pasadena Hotelin its discussion of whether a municipal ordinance was a statute within . the meaning of section 905, subdivision (a). (Batt, at pp. 79, 83.) We thusdecline to follow Batt on this issue. 3. Long Beach Municipal Code Section 3.68.160 Does Not Require Service Users Such as McWilliamsto File a Claimfor a Refund ofTUTas a Prerequisite to Pursuing a Tax RefundAction Underthe plain language of Long Beach Municipal Codesection 3.68.160, a service user such as McWilliams cannot file a claim for a refund of TUT. Instead, such a claim mustbefiled by a service provider. Accordingly, even assuming Long Beach Municipal Code section 3.68.160 were permitted under the Government Claims Act, McWilliams andthe class he purports to representare not barred from pursuing their action against the City as a result oftheir alleged failure to comply with the City’s claims procedures.’ 4. Under Ardon, McWilliams Can File a Section 910 Class Claim In City ofSan Jose v. Superior Court(1974) 12 Cal.3d 447, 457 (City ofSan Jose), in a nuisance and inverse condemnationclass action, the California Supreme Court held that the plaintiff could file a section 910 claim on behalfofthe entire class. 7 Moreover, Long Beach Municipal Codesection 3.68.160 does not state a claim under that provision is a prerequisite to file a lawsuit against the City. Section 935, subdivision (b) provides that if a local claims procedure is permitted for a claim for money or damages, “[t]he procedure so prescribed may include a requirementthat a claim be presented and acted uponas a prerequisite to suit thereon.” (Italics added.) Here, Long Beach Municipal Code section 3.68.160 provides that a service provider “may”file a claim for a refundofillegally collected TUT (L.B. Mun. Code, § 3.68.160(B)) and that a refund “may”be provided under this section (L.B. Mun. Code, § 3.68.160(A)) if certain conditionsare satisfied (L.B. Mun. Code, § 3.68.160(B) & (C)). It also states “[nJo refund shall be paid under the provisions ofthis section unless the claimant has submitted a claim pursuantto this section.” (L.B. Mun. Code, § 3.68.160(D),italics added.) The ordinance does not require a service provider, muchless a service user such as McWilliams,to file a claim beforefiling an action in court for a refund of TUT. 11 In Woosley, the plaintiff asserted a class claim for tax refunds undercertain provisions of the Vehicle Code and Revenue and Taxation Code which did not expressly provide for such claims. The court held the plaintiff could not maintain class claims because article XIII, section 32 of the California Constitution® prevents the judiciary “from expanding the methods for seeking tax refunds expressly provided by the Legislature.” (Woosley, supra, 3 Cal.4th at p. 792.) The court further stated that the holding of City ofSan Jose “should not be extended to include claimsfor tax refunds.” (Woosley, at p. 789.) In Ardon, the issue was whether section 910 “allows taxpayers to file a class action claim against a municipal governmental entity for the refund of local taxes.” (Ardon, supra, 52 Cal.4th at p. 245.) The court held: “[N]leither Woosley, which concerned the interpretation of statutes other than section 910, norarticle XIII, section 32 of the California Constitution, applies to our determination of whether section 910 permits class claims that seek the refund of local taxes. We therefore conclude that the reasoning of City ofSan Jose, which permitted a class claim against a municipal government in the context of an action for nuisance undersection 910, also permits taxpayersto file a class claim seeking the refund of local taxes under the samestatute.” (Ardon,at p. 245.) Under Ardon, McWilliams wasentitled to file a section 910 claim for a TUT refund on behalf ofthe class he purports to represent. Thetrial court’s reliance on ~ Woosley andits decision that McWilliams could notfile such a class claimwas error. The City arguesarticle XIII, section 32 of the California Constitution and the public policy underlying it prohibit McWilliams from seeking a refund ofTUT on behalf of a class because Long Beach has not expressly authorized class claims. Ardon, however, rejected the same argumentasserted by a plaintiff seeking a TUT refund from the City of Los Angeles. (Ardon, supra, 52 Cal.4th at pp. 251-252.) 8 Article XIII, section 32 of the California Constitution provides: “After payment of a tax claimedto be illegal, an action may be maintained to recover the tax paid, with interest, in such manner as may be providedby the Legislature.” 12 5. The Complaint States Sufficient Facts to Support the First Four Causes of Action a. First and Second Causes ofActionfor Declaratory and Injunctive Relief Asstated ante, the first cause of action is for declaratory and injunctiverelief challengingthe legality of the TUT andthe secondcause ofaction is for declaratory and injunctive relief challenging the legality of the City’s amendmentto its municipal code relating to the TUT. The City contends McWilliams cannot maintain these two equitable causes of action because it has an adequate remedyat law, namely a tax refund. In support ofits position, the City cites Flying Dutchman Park, Inc. v. City and County of San Francisco (2001) 93 Cal-App.4th 1129 (Flying Dutchman). Wereject the City’s argument. In Flying Dutchman,theplaintiff failed to pay the disputed tax before filing its lawsuit. The court held that under the “payfirst, litigate later” rule ofarticle XIII, section 32 of the California Constitution, the plaintiff was prohibited from seeking injunctive and declaratory relief. (Flying Dutchman, supra, 93 Cal.App.4th at pp. 1132, 1136.) The present caseis distinguishable from Flying Dutchman because McWilliamsallegedly paid the TUT due beforefiling this action and has allegedly continued to pay the tax during the pendencyofthe suit. Where,as here, the plaintiff pays the challenged tax before the court adjudicates the merits of the plaintiff's claims, the plaintiff may obtain declaratory and injunctiverelief upon entry of judgment. (Ardon, supra, 52 Cal.4th at p. 252 [“article XIII, section 32 does not purport to limit a court’s authority to fashion a remedyifit determinesa taxisillegal, including its authority to issue an injunction against further collection of the challenged tax”].) b. Third and Fourth Causes ofActionfor Money Had and Received and Unjust Enrichment Apart from the City’s argumentsrelating to class claims, which we have rejected, the City does not make any argumentsrelating to the third cause of action for money had and received and fourth cause of action for unjust enrichment. Wethusfind no reason to affirm thetrial court’s order sustaining the City’s demurrer to these causesofaction. 13 6. The Complaint Does Not State Sufficient Facts to Support the Fifth and Sixth Causes ofAction In his supplementalbrief, plaintiff concedes that his fifth cause of action for violation of due process and sixth cause of action for writ ofmandate are moot because they have an adequate “post-deprivation” remedy in light ofArdon, namely a class claim for a tax refund.” Thetrial court therefore correctly sustained the City’s demurrerto these causesofaction. | DISPOSITION The order of dismissal dated June 12, 2007, is reversed with respectto thefirst, second, third and fourth causes of action of the complaint, and affirmed with respect to the fifth and sixth causes of action of the complaint. In the interests ofjustice, both parties shall bear their own costs on appeal. NOT TO BE PUBLISHEDIN THE OFFICIAL REPORTS KITCHING,J. Weconcur: KLEIN,P.J. CROSKEY,J. 9 The fifth and sixth causes of action are based on McKesson Corp.v. Florida Alcohol & Tobacco Div. (1990) 496 U.S. 18. 14 CERTIFICATE OF SERVICE I, Kimberly Nielsen, the undersigned, declare: . 1. That declarant is and was,atall times herein mentioned, a citizen of the United States anda resident of the County of Los Angeles, overthe age of 18 years, and not a part to or interested in the within action; that declarant's business address is 300 South Grand Avenue, Suite 2700, Los Angeles, California 90071. 2. That on April 26, 2012, declarant served the PETITION FOR REVIEWvia U.S. Mail in a sealed envelopefully prepaid and addressed to the parties listed on the attached Service List. 3. Thatthere is regular communication betweentheparties. I declare under penalty of perjury that the foregoing is true and correct. Executed this 26th day of April, 2012, at Los Angeles, California. COLANTUONO& LEVIN,P.C. JMysaule fm Kimberly Nielsen 109243.5 McWilliamsv. City of Long Beach,etal. Case No. B200831 Service List COUNSEL FOR RESPONDENTSIN THIS ACTION AND THE RELATED ACTIONS OF ARDONV. CITY OF LOS ANGELES AND GRANADOSV. COUNTY OF LOS ANGELES: Francis M. Gregorek Rachele M.Rickert WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP 750 B Street, Suite 2770 San Diego, CA 92101 - (619) 239-4599 (619) 234-4599 (fax) Nicholas E. Chimicles Timothy N. Matthews Benjamin F. Johns CHIMICLES & TIKELLIS LLP One Haverford Centre 361 West Lancaster Avenue Haverford, PA 19041 (610) 641-8500 (610) 649-3633 (fax) timothymathews@chimicles.com Jon A. Tostrud 9254 Thrush Way West Hollywood, CA 90069 (310) 276-9179 109243.5 McWilliamsv. City of Long Beach,et al. Case No. B200831 Service List Sandra W. Cuneo CUNEO GILBERT & LADUCA 330 South Barrington Ave., #109 Los Angeles, CA 90049 (424) 832-3450 (424) 832-3452 (fax) COUNSEL FOR RESPONDENTSIN THE RELATED ACTION OF ARDONV. CITY OF LOS ANGELES: CarmenA. Trutanich Noreen S. Vincent Brian I. Cheng OFFICE OF THE CITY ATTORNEY 200 North Main Street, Suite 920 Los Angeles, CA 90012 COUNSEL FOR RESPONDENTSIN THE RELATED ACTION OF GRANADOSV. COUNTY OF LOS ANGELES: Albert Ramseyer Office of the County Counsel 648 Hall of Administration 500 West Temple Street Los Angeles, CA 90012-2713 Erica L. Reilley Jones Day 555 South FlowerStreet, Fiftieth Floor Los Angeles, California 90071-2300 109243.5 McWilliamsv. City of Long Beach,etal. Case No. B200831 Service List COURTESY COPIES TO: Honorable Anthony J. Mohr Superior Court of California County of Los Angeles 600 S. Commonwealth Ave. Los Angeles, CA 90005 Clerk of the Court California Court of Appeal Second Appellate Division 300 S. Spring Street, 2nd Floor Los Angeles, CA 90013 109243.5