Jobs & Hous. Coal. v. City of Oakland

• Decision Date: 30 December 2021
• Docket Number: A158977
• Citation: 288 Cal.Rptr.3d 616,73 Cal.App.5th 505
• Parties: JOBS & HOUSING COALITION et al., Plaintiffs and Respondents, v. CITY OF OAKLAND, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

73 Cal.App.5th 505

288 Cal.Rptr.3d 616

JOBS & HOUSING COALITION et al., Plaintiffs and Respondents,

v.CITY OF OAKLAND, Defendant and Appellant.

A158977

Court of Appeal, First District, Division 1, California.

Filed December 30, 2021

Certified for Partial Publication.^*

Barbara J. Parker, City Attorney, Maria Bee, Assistant City Attorney, Jennifer Logue, Supervising City Attorney; Hanson Bridgett LLP, Adam W. Hofmann and David C. Casarrubias, San Francisco, for Defendant and Appellant.

Olson Remcho, LLP, James C. Harrison, Sacramento, Karen Getman, Oakland, and Omar El-Qoulaq for Jorge Lerma and George Holland, Sr. as Amicus Curiae on behalf of Defendant and Appellant.

Nielsen Merksamer Parrinello Gross & Leoni LLP, James R. Parrinello, San Rafael, and Christopher E. Skinnell, Sacramento, for Plaintiffs and Respondents.

Eversheds Sutherland (US) LLP, Timothy A. Gustafson, Eric J. Coffill and Alexandra Louderback, Sacramento, for Council on State Taxation as Amicus Curiae on behalf of Plaintiffs and Respondent.

Humes, P.J.

A group of Oakland citizens placed a proposed special parcel tax on the November 2018 ballot (Measure AA), and officials with appellant City of Oakland (City) prepared ballot materials, which included statements that the measure needed two-thirds of the vote to pass. After Measure AA received 62.47 percent of the vote, the Oakland City Council determined that only a majority of the vote was actually needed for passage, and it declared the measure enacted. A coalition of stakeholders brought this postelection, reverse-validation action against the City, seeking to invalidate the enactment. The trial court ruled in favor of the coalition on its motion for judgment on the pleadings, finding that Measure AA failed because it needed, but had not secured, two-thirds of the vote. The court also found that the enactment of the measure based on less than a two-thirds vote of the electorate would amount to a "fraud on the voters" because the ballot materials had stated a two-thirds vote was needed.

We reverse. In the nonpublished portion of our opinion, we join our colleagues in Divisions Four and Five of this court, and in the Court of Appeal for the Fifth Appellate District, in holding that a citizen initiative imposing a special parcel tax, such as Measure AA, is enacted when it receives a majority of the vote. In the published portion of our opinion, we further hold that Measure AA cannot be invalidated on the basis of the ballot materials’ voting-threshold statements because the statements did not concern the measure's substantive features, were not alleged to be intentionally misleading, and cannot override the law governing the applicable voting threshold.

I. FACTUAL AND PROCEDURAL BACKGROUND

We recount the facts as they were alleged in the complaint.¹ A group of Oakland citizens submitted a petition to place an initiative on the November 2018 ballot to approve a parcel tax to fund programs for early childhood education and college readiness. The initiative appeared on the ballot as Measure AA, seeking to add "The Children's Initiative of 2018" to the City's charter.

The official ballot materials prepared by the City Attorney's Office stated the measure was for a "special parcel tax" and that a two-thirds vote was necessary for it to pass. The City Auditor's analysis likewise stated the measure would go into effect "if adopted by two-thirds of voters."

A majority of Oakland voters, 62.47 percent, voted in favor of Measure AA in the November 2018 general election. Although the measure fell short of two-thirds approval, the Oakland City Council declared that the measure had nonetheless passed ( Elec. Code, § 15400 ). The council's resolution declaring the passage of Measure AA suggested that uncertainty had arisen whether a majority or two-thirds vote was necessary. The resolution listed five other measures that had passed, and after each of their "yes" vote totals, the resolution stated, "(Passed)." By contrast, following the "yes" vote totals for Measure AA, the resolution stated, "(Passed/Fail)," with the word "Fail" having been struck out.

Respondent Jobs and Housing Coalition is a nonprofit business advocacy group. It along with others who would be subject to the tax filed this reverse-validation action ( Code Civ. Proc., § 863 ) against the City to invalidate Measure AA as an illegal special tax because it had not received two-thirds of the vote supposedly required by Propositions 13 and 218. According to the complaint, the City Council's action appeared to be an "attempt[ ] to exploit speculation surrounding" a 2017 Supreme Court decision, California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 222 Cal.Rptr.3d 210, 401 P.3d 49 ( California Cannabis ). Respondents also alleged that by declaring after the election that the measure passed by majority vote when the ballot materials had stated a two-thirds vote was needed, the City engaged in a "post hoc bait-and-switch" that "create[d] a patent and fundamental unfairness that amount[ed] to a violation of due process." Finally, respondents alleged that the City and supporters of Measure AA were estopped from claiming after the election that less than a two-thirds voting threshold governed its enactment.

Respondents also named as defendants "ALL PERSONS INTERESTED in the matter of Measure AA." ( Code Civ. Proc., § 863.) After no interested party responded to the complaint following service by publication, the trial court entered a default judgment and ordered that interested-person defendants were barred from contesting the claims in the validation complaint.

Both sides (the City and respondents) filed motions for judgment on the pleadings. The trial court first granted respondents’ motion. It concluded that Propositions 13 and 218 mandated a two-thirds vote to pass Measure AA. It further concluded that the City was barred from enforcing the measure because voters had been told that passage required a two-thirds vote, and allowing the measure to go into effect with fewer votes would amount to "a fraud on the voters" under Hass v. City Council (1956) 139 Cal.App.2d 73, 76, 293 P.2d 61.

The trial court then denied the City's motion for the same reasons it granted respondents’ motion. In its order, it also concluded that respondents had adequately alleged a cause of action for equitable estoppel because, had they known before the election that the City would take the position after the election that Measure AA needed only a majority of votes to pass, they could have exercised a preelection remedy to challenge the ballot materials’ voting-threshold statements.

The City appealed from the subsequent judgment declaring Measure AA invalid and permanently enjoining the City from enforcing it. The Council on State Taxation filed an amicus brief in support of respondents, and two official proponents of Measure AA filed an amicus brief in support of the City.

II. DISCUSSION

We review de novo the trial court's order granting respondents’ motion for judgment on the pleadings and denying the City's motion for judgment on the pleadings. ( Gerawan Farming, Inc. v. Lyons , supra , 24 Cal.4th at p. 515, 101 Cal.Rptr.2d 470, 12 P.3d 720 ; Estate of Dayan (2016) 5 Cal.App.5th 29, 38–39, 209 Cal.Rptr.3d 712.)

A. As a Citizen Initiative, Measure AA Needed a Simple Majority Vote

to Pass.^**

B. Enacting Measure AA on a Majority Vote Despite Different Statements in Ballot Materials Did Not Violate Due Process or Amount to a Fraud on Voters.

Having agreed with the City that Measure AA needed only a majority of the vote to pass, we turn to consider respondents’ alternative argument that, in light of the ballot materials’ statements that the measure needed two-thirds of the vote to pass, the City Council's resolution declaring that the measure passed with only a majority vote was an "about face [that] violate[d] due process." (Capitalization modified.) While we acknowledge the critical importance of true and impartial ballot materials, we cannot conclude there was a due process violation under the circumstances surrounding Measure AA. The ballot materials’ statements were not alleged to be intentionally misleading and were made when the governing law was uncertain. The statements cannot supplant the constitutional standards governing an election's voting threshold. If they could, government officials who prepare ballot materials would yield too much power to control the outcome of elections. A measure needing a majority vote cannot be invalidated after receiving such a vote simply because its ballot materials incorrectly identify a higher voting threshold, just as a measure needing a supermajority vote cannot be enacted by a majority vote simply because its ballot materials incorrectly identify the lower voting threshold.⁴

Respondents’ arguments can be viewed in two ways. By maintaining that the City Council was obligated to enforce the ballot materials’ two-thirds voting-threshold statements even if those statements were wrong, the arguments suggest a postelection challenge to the accuracy of the ballot materials. And by maintaining that the City Council was bound by the ballot materials’ voting-threshold statements regardless of their accuracy, the arguments suggest a direct challenge to the council's postelection conduct. Either way, we are unpersuaded.

1. Measure AA Cannot Be Invalidated Under Due Process Principles on the Basis that the Ballot Materials Were Inaccurate.

As we have said, voters are entitled to be given a true and impartial summary of initiative measures, one that is "not argumentative or likely to create prejudice for or against the measure." ( Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 243, 149 Cal.Rptr. 239, 583 P.2d 1281 ; see Elec. Code, §§ 9280 [City Attorney must "prepare an impartial analysis of the measure showing the effect of the measure on the existing law and the operation of the measure"...