American Airlines, Inc. v. County of San Mateo

• Decision Date: 08 April 1996
• Docket Number: No. S044279,S044279
• Court: California Supreme Court
• Parties: , 912 P.2d 1198, 96 Cal. Daily Op. Serv. 2409, 96 Daily Journal D.A.R. 4018 AMERICAN AIRLINES, INC., et al., Plaintiffs and Appellants, v. COUNTY OF SAN MATEO, Defendant and Respondent.

Page 251

51 Cal.Rptr.2d 251

12 Cal.4th 1110, 912 P.2d 1198, 96 Cal. Daily Op. Serv. 2409,

96 Daily Journal D.A.R. 4018

AMERICAN AIRLINES, INC., et al., Plaintiffs and Appellants, v. COUNTY OF SAN MATEO, Defendant and Respondent.

No. S044279.

Supreme Court of California.

April 8, 1996.

Crosby, Heafy, Roach & May, Peter W. Davis, Jay R. Martin, John E. Carne, Kathy M. Banke, Oakland, Kimberly S. Stanley, San Diego, Goodwin, Procter & Hoar, John C. Englander, J. Anthony Downs and A. Lauren Carpenter, Boston, MA, for Plaintiffs and Appellants.

Thomas F. Casey III, County Counsel, San Mateo, Mary K. Raftery, Deputy County Counsel, De Witt W. Clinton, County Counsel, Los Angeles, Albert Ramseyer, Deputy County Counsel, Kelvin H. Booty, County Counsel, Alameda, James May, Assistant County Counsel, Richard Karlsson, Deputy County Counsel, L.B. Elam and Robert A. Ryan, Jr., County Counsel, Sacramento, John Seyman and Steve Kaiser, Deputy County Counsel, for Defendant and Respondent.

ARABIAN, Justice. ^*

Here we determine whether California's ad valorem tax system is subject to challenge under former 49 United States Code Appendix section 1513, subdivision (d) (former section 1513(d)), ¹ of the Airport and Airway Improvement Act of 1982. In particular, we consider whether the plaintiff airlines have a private right of action under former section 1513(d), and whether the airlines have stated a claim for relief under either that section or 42 United States Code section 1983. The case involves 10 commercial airlines and 18 counties. The issues are of first impression, and involve solely the interpretation of federal law.

We conclude that the airlines do have a private right of action under former section 1513(d). In considering whether the airlines have stated a claim for relief under that statute, we note that the airlines assert two bases on which they claim former section 1513(d) has been violated. We conclude that they have stated a claim for relief under former section 1513(d) on the first basis by alleging unequal enforcement of California's facially neutral tax laws. We further conclude, however, that the airlines have failed to state a claim for relief under former section 1513(d) on the second basis, that is, by alleging that the assessment ratio for railroad personal property is lower than that for airline personal property. Finally, we conclude that the 42 United States Code section 1983 claim is not properly before us. We therefore reverse the judgment of the Court of Appeal.

I. FACTS AND PROCEDURAL BACKGROUND

Ten commercial airlines ² (Airlines) brought separate actions against eighteen counties ³ (Counties) seeking a partial refund of and declaratory judgment regarding ad valorem personal property taxes. They alleged in each action that the Counties collected the taxes in violation of former section 1513(d) ⁴ of the Airport and Airway Improvement Act of 1982 (AAIA). The actions were coordinated in San Mateo County.

The Counties asserted below that the purpose of their motion for summary judgment was to determine whether the Airlines had stated a cause of action. "A defendant's motion for summary judgment necessarily includes a test of the sufficiency of the complaint. (Centinela Hospital Assn. v. City of Inglewood (1990) 225 Cal.App.3d 1586, 1595 .) When a motion for summary judgment is used to test whether the complaint states a cause of action, the court will apply the rule applicable to demurrers and accept the allegations of the complaint as true. (Miller v. Glass (1955) 44 Cal.2d 359, 360 .)" (Valdez v. City of Los Angeles (1991) 231 Cal.App.3d 1043, 1055, 282 Cal.Rptr. 726.) Because the time for a demurrer had passed by the time the Counties' motion was filed, we treat the motion as a motion for judgment on the pleadings. (People v. $20,000 U.S. Currency (1991) 235 Cal.App.3d 682, 691, 286 Cal.Rptr. 746.)

"Accordingly, for purposes of this opinion, we treat the properly pleaded allegations of [the Airlines'] complaint as true, and also consider those matters subject to judicial notice. (Sullivan v. County of Los Angeles (1974) 12 Cal.3d 710, 714-715, fn. 3 [117 Cal.Rptr. 241, 527 P.2d 865]; Hunt v. County of Shasta (1990) 225 Cal.App.3d 432, 440 ; April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 815 .) 'Moreover, the allegations must be liberally construed with a view to attaining substantial justice among the parties.' (Guild Mortgage Co. v. Heller (1987) 193 Cal.App.3d 1505, 1508 .) 'Our primary task is to determine whether the facts alleged provide the basis for a cause of action against defendants under The Airlines' second amended complaint against Los Angeles County is representative of their refund causes of action. It alleges, in pertinent part:

[912 P.2d 1204] any theory.' (Ibid.)"(Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1232, 44 Cal.Rptr.2d 352, 900 P.2d 601.)

"This action is brought pursuant to the applicable provisions of the California Revenue and Taxation Code and other related provisions of state and federal law to obtain refunds of taxes which were paid by [the Airlines] to [Los Angeles County] ... and which were illegally and erroneously collected from [the Airlines] in violation of [former] 49 App.U.S.C. Section 1513 for the 1985, 1986, 1987, 1988 and 1989 tax years....

"Pursuant to California law and practice, all commercial and industrial property, other than air carrier transportation property, is assessed at amounts substantially below true market value of that property.

"All of [the Airlines'] property used in interstate air transportation in the County of Los Angeles is assessed each year at amounts equal to or in excess of the true market value of said property. [ ⁵] Plaintiffs are taxed based on these assessments, and have paid taxes pursuant to said assessments.

"This disparity in tax treatment causes [the Airlines'] property to be assessed at a value bearing a higher ratio to its true market value than the ratio that the assessed value of other commercial and industrial property in the county has to its true market value in violation of [former] 49 App.U.S.C. Section 1513.

"This discrimination is not less than forty-seven percent (47%) of the ad valorem property taxes paid to this county for the 1985 [through 1989] tax year[s].

"[The Airlines] are therefore entitled to a refund of at least forty-seven percent (47%) of the ad valorem property taxes paid to this county for the 1985 [through 1989] tax year[s].

"This disparity also imposes an unreasonable burden on and discriminates against interstate commerce in violation of Article I, Section 8 of the United States Constitution violating the supremacy clause of the U.S. Constitution, Article VI, and denies plaintiffs due process and equal protection of the law in violation of U.S. Constitution, Amendment XIV, Section 1." ⁶

The Counties filed a motion for summary judgment "on the grounds that there is no triable issue of material fact as to [the Counties] because [the Airlines] have failed to state a cause of action under [former] 49 App.U.S.C. section 1513(d), the Commerce Clause (U.S. Const., Art. I, § 8), the Supremacy Clause (U.S. Const., Art. VI), or the Fourteenth Amendment (U.S. Const., Amend. XIV, § 1)." The Counties also argued that the Airlines lacked a private right of action under former section 1513(d). ⁷

The trial court granted the Counties' motion on the following grounds: "1. Based on the current assessment and taxing systems of airline property in California, the [Airlines] cannot, as a matter of law, state a cause of action under [former] 49 App.U.S.C. Section [1513]. p 2. The [Airlines] must show a prima[ ]facie case of discrimination which they have not, and cannot do factually. p 3. There is no private right of action under [former] 49 App.U.S.C. section [1513(d) ]."

The Court of Appeal affirmed and denied the Airlines' petition for rehearing. We granted the Airlines' petition for review.

II. DISCUSSION

A. Background

1. Former Section 1513(d)

Pursuant to its plenary commerce clause power, Congress has enacted three statutory schemes that prohibit tax discrimination against interstate carriers, the Railroad Revitalization and Regulatory Reform Act of 1976, former 49 United States Code section 11503 ⁸ (4-R Act), the Motor Carrier Act of 1980, former 49 United States Code section 11503a ⁹ (Motor Carrier Act), and the The pertinent parts of the AAIA, the 4-R Act, and the Motor Carrier Act are strikingly similar. The differences between the statutes are highlighted as follows. Former section 1513(d)(1)(A), the portion of former section 1513(d) at issue in this case, provides that a state shall not: "assess air carrier transportation property at a value that has a higher ratio to the true market value of the air carrier transportation property than the ratio that the assessed value of other commercial and industrial property of the same type in the same assessment jurisdiction has to the true market value of the other commercial and industrial property." (Italics added.) Former section 11503(b)(1) of the 4-R Act provides that a state shall not: "assess Given the strong similarity in statutory language and purpose between the three acts, cases interpreting one act are often relied on to interpret a different act. Moreover, because of this similarity, and the express reference in the legislative history of former section 1513(d) to the Motor Carrier Act (see ante, footnote 10) the legislative history of the 4-R and the Motor Carrier Acts is, as the parties agree, appropriately used to interpret former section 1513(d). (Western Air Lines v. Board of Equalization, supra, 480 U.S. at p. 131, 107 S.Ct. at pp. 1042-1043 [relying on legislative history of 4-R Act in interpreting former § 1513(d) ]; Arkansas-Best Freight System, Inc. v. Lynch (4th Cir.1983) 723 F.2d 365, 366, fn. 3 ["the parties' reliance upon ... the legislative history of the 4-R Act [...