Coalition v. City of Upland

• Citation: 222 Cal.Rptr.3d 210,3 Cal.5th 924,401 P.3d 49
• Decision Date: 28 August 2017
• Docket Number: S234148
• Court: United States State Supreme Court (California)
• Parties: CALIFORNIA CANNABIS COALITION et al., Plaintiffs and Appellants, v. CITY OF UPLAND et al., Defendants and Respondents.

3 Cal.5th 924

401 P.3d 49

222 Cal.Rptr.3d 210

CALIFORNIA CANNABIS COALITION et al., Plaintiffs and Appellants,

v.CITY OF UPLAND et al., Defendants and Respondents.

S234148

Supreme Court of California

Filed August 28, 2017

As Modified on Denial of Rehearing November 1, 2017

Roger Jon Diamond for Plaintiffs and Appellants.

Munger, Tolles & Olson, Ronald L. Olson, Fred A. Rowley, Jr., Mark R. Yohalem, Los Angeles, and David J. Feder for Chargers Football Company as Amicus Curiae on behalf of Plaintiffs and Appellants.

Howard Jarvis Taxpayers Foundation, Jonathan M. Coupal, Sacramento, Trevor A. Grimm, Los Angeles, Timothy A. Bittle, Sacramento, Brittany A. Sitzer; Jones & Mayer, James R. Touchstone and Krista MacNevin Jee, Fullerton, for Defendants and Respondents.

Nick Bulaich as Amicus Curiae on behalf of Defendants and Respondents.

Dakessian Law, Mardiros H. Dakessian and Ruben Sislyan for California Taxpayers Association as Amicus Curiae on behalf of Defendants and Respondents.

William A. Adams, San Diego, Rick A. Waltman and Robert T. Bryson II, Los Angeles, for Public Interest Advocacy Clinic as Amicus Curiae on behalf of Defendants and Respondents.

Jack Cohen as Amicus Curiae on behalf of Defendants and Respondents.

Daniel S. Hentschke, Oceanside; Remcho, Johansen & Purcell, Robin B. Johansen, Sacramento; Colantuono, Highsmith & Whatley, Michael G. Colantuono and Ryan Thomas Dunn, Pasadena, for League of California Cities as Amicus Curiae on behalf of Defendants and Respondents.

Meriem L. Hubbard and Harold E. Johnson, Sacramento, for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and Respondents.

Nikki E. Dobay, Fredrick J. Nicely and Karl A. Frieden for Council on State Taxation as Amicus Curiae on behalf of Defendants and Respondents.

Cuéllar, J.

Here we consider the interplay of two constitutional provisions. First, sections 8 and 11 of article II of the state Constitution contain the people's initiative power, which we have described as " ‘one of the most precious rights of our democratic process.’ " ( Associated Home Builders etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 591, 135 Cal.Rptr. 41, 557 P.2d 473 ( Associated Home Builders ); Cal. Const., art. II (article II), §§ 8 [statewide power], 11 [local power].) Second, article XIII C—added by one of several successful initiative constitutional amendments concerning taxation—limits the ability of "local governments ... to impose, extend, or increase any general tax." (Cal. Const., art. XIII C (article XIII C), added by initiative, Gen. Elec. (Nov. 5, 1996), commonly known as Prop. 218; Greene v. Marin County Flood Control & Water Conservation Dist. (2010) 49 Cal.4th 277, 284-285, 109 Cal.Rptr.3d 620, 231 P.3d 350 ( Greene ) [summarizing the purpose of Prop. 218].)

The question before us is whether article XIII C also restricts the ability of voters to impose taxes via initiative. The Court of Appeal here concluded that article XIII C does not constrain voters' constitutional power to propose and adopt initiatives, and that under article II, section 11 and Elections Code section 9214,¹ the initiative at issue should be submitted to the voters at a special election, not at a general election, as article XIII C would require. In light of the text and other indicia of the purpose associated with the relevant constitutional and statutory provisions, we agree with the Court of Appeal that article XIII C does not limit voters' "power to raise taxes by statutory initiative." ( Kennedy Wholesale, Inc. v. State Bd. of Equalization (1991) 53 Cal.3d 245, 251, 279 Cal.Rptr. 325, 806 P.2d 1360 [reaching the same conclusion with regard to article XIII A of the state Constitution] ( Kennedy Wholesale ).) A contrary conclusion would require an unreasonably broad construction of the term "local government" at the expense of the people's constitutional right to direct democracy, undermining our longstanding and consistent view that courts should protect and liberally construe it. (E.g., Associated Home Builders , supra , 18 Cal.3d at p. 591, 135 Cal.Rptr. 41, 557 P.2d 473.) As Ulysses once tied himself to the mast so he could resist the Sirens' tempting song (Homer, The Odyssey, Book XII), voters too can conceivably make the clear and important choice to bind themselves by making it more difficult to enact initiatives in the future. The electorate made no such clear choice to tie itself to the mast here. Without a direct reference in the text of a provision—or a similarly clear, unambiguous indication that it was within the ambit of a provision's purpose to constrain the people's initiative power—we will not construe a provision as imposing such a limitation. (See Kennedy Wholesale , at p. 252, 279 Cal.Rptr. 325, 806 P.2d 1360.) We therefore affirm the Court of Appeal's judgment.

I.

The California Cannabis Coalition is a nonprofit corporation that drafted the medical marijuana initiative at issue here in 2014.² The initiative proposed to repeal an existing City of Upland (City) ordinance banning medical marijuana dispensaries; to adopt regulations permitting and establishing standards for the operation of up to three dispensaries within the City; and to require that each dispensary pay the City an "annual Licensing and Inspection fee" in the amount of $75,000.

In September 2014, initiative proponents Nicole De La Rosa and James Velez³ filed a notice of their intent to circulate the initiative petition (§ 9202), and the city attorney prepared a ballot title and summary (§ 9203). The petition plaintiffs circulated included a request that the initiative be considered by voters at a special election. At least 15 percent of the City's registered voters signed the petition, meeting the statutory threshold for triggering consideration of the initiative ( § 9214 ), and the City accepted a certificate of sufficiency from the San Bernardino County Registrar of Voters on February 9, 2015. At that point, section 9214 obliged the City to either (1) adopt the initiative without alteration; (2) immediately order a special election; or (3) order an agency report and, once the report was presented, adopt the initiative or order a special election. ( Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1033, 175 Cal.Rptr.3d 601, 330 P.3d 912 ( Tuolumne Jobs ); see §§ 1405 [time for special election], 9212 [referral to city agency for report].) The City elected to order an agency report.⁴

Various city departments thereafter prepared a joint agency report. Among other things, the report concluded that the $75,000 "fee" for the initiative would exceed the costs incurred from issuing a license to and conducting annual inspections of the dispensaries. The report estimated actual costs to be slightly more than $15,000 and found the excess amount of the fee to constitute a general tax. As such, the report determined that the initiative could not be voted on during a special election as required by section 9214, but rather, under article XIII C, section 2, had to be submitted to the voters at the next general election.⁵ On March 9, 2015, the city council received the agency report and adopted a resolution consistent with the report's conclusions. The city council also provided notice and direction for submitting the initiative to the voters on November 8, 2016, the next general election.

Plaintiffs then filed a petition for writ of mandate in superior court. They alleged that the City violated section 9214 by failing to submit the initiative to the voters at a special election.⁶ They also argued that article XIII C, section 2 did not apply because the $75,000 charge proposed by the initiative was not a tax, nor was it imposed by local government. The court denied the writ petition, determining that the charge constituted a tax and had to be placed on the next general election ballot. The court, however, did not specifically address whether article XIII C, section 2 applies to taxes imposed by voter initiative.

Plaintiffs appealed, and the Court of Appeal reversed. The court held that article XIII C, section 2 only governs levies that are imposed by local government and, therefore, it does not apply to the voter initiative at issue here.⁷ Moreover, the court noted that the people's initiative power must be protected and construed liberally, with doubts resolved in favor of its exercise whenever possible. (E.g., Rossi v. Brown (1995) 9 Cal.4th 688, 695, 38 Cal.Rptr.2d 363, 889 P.2d 557 ( Rossi ); Associated Home Builders , supra , 18 Cal.3d at p. 591, 135 Cal.Rptr. 41, 557 P.2d 473.) The court determined that neither the text nor the history of article XIII C contains any evidence that the enactors' intended purpose included constraining future voters' ability to raise taxes via statutory initiative. The court accordingly directed the superior court to issue a writ of mandate compelling the City to place the initiative on a special ballot in accordance with section 9214.

We granted the City's petition for review on June 29, 2016. On November 8, 2016, the initiative at issue was submitted to the voters and defeated, with 64.38 percent voting no.⁸ While the case is thus technically moot, it nonetheless presents important questions of continuing public interest that may evade review. ( Peterson v. City of San Diego (1983) 34 Cal.3d 225, 227, 193 Cal.Rptr. 533, 666 P.2d 975.) We therefore exercise our discretion to retain the matter and address the issues.⁹ ( People v. Carbajal (1995) 10 Cal.4th 1114, 1120, fn. 5, 43 Cal.Rptr.2d 681, 899 P.2d 67.)

II.

We apply similar principles when construing constitutional provisions and statutes, including those enacted through voter initiative. ( Silicon Valley Taxpayers' Assn., Inc. v. Santa Clara County Open Space Authority (2008) 44 Cal.4th 431, 444, 79 Cal.Rptr.3d 312, 187 P.3d 37.) Our primary concern is giving effect to the intended purpose of the provisions at issue. ( Id . at p. 448, 79 Cal.Rptr.3d 312, 187 P.3d 37 [e...