Jordan v. Department of Motor Vehicles

• Decision Date: 01 October 1999
• Docket Number: No. C028340.,C028340.
• Citation: 75 Cal.App.4th 449,89 Cal.Rptr.2d 333
• Court: California Court of Appeals Court of Appeals
• Parties: Anna JORDAN et al., Plaintiffs and Respondents, v. DEPARTMENT OF MOTOR VEHICLES et al., Defendants and Appellants.

89 Cal.Rptr.2d 333

75 Cal.App.4th 449

Anna JORDAN et al., Plaintiffs and Respondents, v. DEPARTMENT OF MOTOR VEHICLES et al., Defendants and Appellants.

No. C028340.

Court of Appeal, Third District.

October 1, 1999.

Milberg, Weiss, Bershad, Hynes & Lerach, Leonard B. Simon, Alan M. Mansfield, William S. Dato, San Diego; Weiss & Yourman, Joseph H. Weiss, Joseph D. Cohen, New York, N.Y.; Sullivan, Hill, Lewin, Rez, Engel & Labazzo, Michael A. Labazzo, San Diego; Blumenthal Ostroff & Markham, Norman Blumenthal and David R. Markham, San Diego, for Plaintiffs and Respondents.

Daniel E. Lungren and Bill Lockyer, Attorneys General, Lawrence K. Keethe and Michael J. Cornez, Deputy Attorneys General, for Defendants and Appellants.

MORRISON, J.

Plaintiffs, four individuals, brought suit for a refund of the $300 motor vehicle smog impact fee (Rev. & Tax.Code, §§ 6261-6263) each had paid for registering a car last registered outside California, even though the car passed California's smog check test. They also sought a declaration that the motor vehicle smog impact fee was unconstitutional. Defendants, State of California, Department of Motor Vehicles (DMV) and the State Board of Equalization (SBE), appeal from the judgment in favor of plaintiffs. At issue in this case is whether the motor vehicle smog impact fee is unconstitutional under the commerce clause of the United States Constitution (U.S. Const., art. I, § 8, cl. 3) or under article XIX of the California Constitution, and if so, what the proper remedy is in this case.

Defendants contend the motor vehicle smog impact fee does not violate the commerce clause of the United States Constitution because Congress has created two classes of vehicles so there is no discrimination in treating one class differently. They contend the motor vehicle smog impact fee does not violate article XIX of the California Constitution, requiring taxes and fees on motor vehicles be used for enumerated transportation purposes, because the fee was imposed pursuant to the Sales and Use Tax Law (Rev. & Tax. Code, § 6001 et seq.) and therefore excepted from the constitutional restriction. Defendants contend the trial court exceeded its jurisdiction in ordering defendants to file refunds on behalf of those who paid the fee, in addition to ordering refunds to the plaintiffs. Finally, they raise two contentions concerning the proper party defendants and the admissibility of evidence considered by the trial court.

We find the motor vehicle smog impact fee is unconstitutional under the commerce clause and violates article XIX of the California Constitution. We find, however, the trial court exceeded its jurisdiction in ordering defendants to file refunds on behalf of payors who are not parties to this suit.

FACTUAL AND PROCEDURAL BACKGROUND

A brief summary of the federal and state regulatory schemes for emissions from motor vehicles is helpful to understanding the mechanics of the motor vehicle smog impact fee. California first began to regulate the emission of pollutants from motor vehicles in 1960. (Stats.1961, First Ex.Sess ch. 23, §§ 1-6, pp. 346-352.) A few years later, Congress amended the Clean Air Act to regulate emission standards for new motor vehicles. (42 U.S.C. § 7521 et seq.)

Under federal law, states are prohibited from regulating emission standards for new motor vehicles. (42 U.S.C. § 7543, subd. (a).) There is an exception as a waiver may be granted. The statute currently permits a waiver for a state that has adopted standards that "will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards." (42 U.S.C. § 7543, subd. (b)(1).) California was the only state given a waiver. (Ford Motor Company v. Environmental Protection Agency (D.C.Cir. 1979) 196 App.D.C. 386, 606 F.2d 1293, 1296.) California has obtained a waiver, known as "the California waiver," each year. Congress amended the Clean Air Act to permit other states to adopt the California standards, but such states could not adopt a third set of standards. (42 U.S.C. § 7507.)

The result of this regulatory scheme is that new motor vehicles are either California-certified or federally-certified. California-certified new motor vehicles have a vehicle emission control label identifying them as such. (Rev. & Tax.Code, § 6262, subd. (c)(3).) Generally, only California-certified vehicles may be sold or registered in California as new motor vehicles. (Health & Saf.Code, § 43151.) All motor vehicles registered in California, whether California-certified or federally-certified, must pass a smog check test every two years. (Health & Saf.Code, § 44011.)

In 1990, the California Legislature passed the motor vehicle smog impact fee. (Stats.1990, ch. 453, § 1, pp.1955-1956.) There is a $300 fee to register a motor vehicle (with certain specified exceptions, such as pre-1975 model years) in California if the vehicle was last registered outside the state, unless the vehicle is California-certified. (Rev. & Tax.Code, § 6262, subd. (a).)

In enacting the motor vehicle smog impact fee, the Legislature found and declared, as amended later that year, as follows: "(a) Motor vehicles certified to meet California air quality standards (California-certified vehicles) are generally significantly more costly than otherwise equivalent vehicles sold elsewhere.

"(b) Motor vehicles generally are a major cause of poor air quality. However, California-certified vehicles have a less deleterious impact on air quality than other vehicles because California-certified vehicles are designed and manufactured to meet California's motor vehicle emission standards which are the most stringent emission standards in the nation and are, therefore, less polluting. Poor air quality imposes substantial costs on health services and environmental and other General Fund programs.

"(c) Drivers of California-certified vehicles, in addition to higher vehicle acquisition costs, pay an added penalty because California-certified vehicles generally achieve lower fuel economy, resulting in a higher motor vehicle fuel tax burden.

"(d) In order to ensure equity between owners of California-certified vehicles and other vehicles, provide funding for environmental programs, and to promote good health and safety standards for the residents of this state, it is appropriate to enact a motor vehicle smog impact fee on non-California certified vehicles." (Rev. & Tax.Code, § 6261.)

Plaintiffs are four individuals who moved to California and registered their federally-certified motor vehicles. The vehicles passed the smog check test, but each plaintiff was required to pay the $300 motor vehicle smog impact fee, in addition to the usual license and registration fees. Plaintiffs sought refunds and their claims were denied. After attempts to bring a validation action challenging the motor vehicle smog impact fee and a class action to impose a constructive trust, plaintiffs filed a consolidated second amended complaint seeking refunds of the fees paid and a declaration that the motor vehicle smog impact fee was unconstitutional under the commerce clause and the equal protection clause of the United States Constitution, and under article XIX and the equal protection clause of the California Constitution.¹ Plaintiffs also sought attorney fees.²

Plaintiffs moved for summary judgment. They contended the motor vehicle smog impact fee was facially discriminatory because it was imposed on vehicles last registered out-of-state; it did not advance a legitimate local purpose because there was no factual support for the Legislature's finding that California-certified vehicles were less deleterious to the environment than federally-certified vehicles; and there were less burdensome alternatives, such as imposing fees on all vehicles or tiered fees based on the actual emissions produced by the vehicle. Plaintiffs argued the fee violated article XIX of the California Constitution because it is not used for the transportation purposes enumerated in the constitution and it is not a sales or use tax that is exempt from the constitutional restriction.

Plaintiffs asserted it was undisputed that they paid the fee and their requests for a refund were denied; the motor vehicle smog impact fee was passed as part of budget negotiations; the legislative history made reference to the Florida vehicle impact fee that was later struck down as unconstitutional;³ the constitutional problems with the fees were raised by legislative counsel and the SBE's analysis of the bill; emissions standards for used vehicles do not differentiate between California-certified vehicles and federally-certified vehicles; there was no evidence that federally-certified vehicles place more of a burden on the environment than California-certified vehicles; and the proceeds of the fee, less administrative costs, are deposited in the State's general fund.

Defendants opposed the motion. They posed the question as whether the motor vehicle smog impact fee was within California's power, as granted by Congress, to discriminate against interstate commerce as to federally-certified vehicles. They contended there was no evidence to support plaintiffs' assertion that the legislative finding that federally-certified vehicles were more deleterious to the environment were insupportable and inaccurate.

Defendants argued California-certified vehicles were different, pointing to the substantial in-use compliance program under California law for California-certified vehicles. California tests used vehicles to ensure the emission system meets durability standards, and has the right to force manufacturers to recall and repair vehicles if the used vehicles fail the durability test. Defendants urged that article XIX was inapplicable because the motor vehicle smog impact fee was imposed pursuant to the Sales and Use Tax Law.

Defendants also moved for summary judgment in their favor. They again asserted...