Rider v. County of San Diego

• Citation: 2 Cal.Rptr.2d 490,1 Cal.4th 1,820 P.2d 1000
• Decision Date: 19 December 1991
• Docket Number: No. S017917,S017917
• Court: United States State Supreme Court (California)
• Parties: , 820 P.2d 1000 Richard J. RIDER et al., Plaintiffs and Respondents, v. COUNTY OF SAN DIEGO et al., Defendants and Appellants.

Page 490

2 Cal.Rptr.2d 490

1 Cal.4th 1, 820 P.2d 1000

Richard J. RIDER et al., Plaintiffs and Respondents, v. COUNTY OF SAN DIEGO et al., Defendants and Appellants.

No. S017917.

Supreme Court of California,

In Bank.

Dec. 19, 1991.

As Modified on Denial of Rehearing

Feb. 13, 1992.

[820 P.2d 1001] [1 Cal.4th 4] Lloyd M. Harmon, Jr., County Counsel, Daniel J. Wallace and Diane Bardsley, Chief Deputy County Counsel, Bruce D. MacLeish and Andrew J. Freeman, Deputy County Counsel, San Diego, McDougal, Love, Eckis, Grindle & O'Connor, Lynn R. McDougal and Tamara A. Smith, El Cajon, for defendants and appellants.

John K. Van de Kamp and Daniel E. Lungren, Attys. Gen., Jack T. Kerry and Edmond B. Mamer, Deputy Attys. Gen., Kelvin H. Booty, Jr., Alameda County Counsel, James F. May, Asst. County Counsel, Susan Minasian, Butte County Counsel, Max E. Robinson, Fresno County Counsel, John E. Slutter, Deputy County Counsel, James P. Lough, Humboldt County Counsel, Thomas M. Fries, Imperial County Counsel, Kevin E. Ready, Deputy County Counsel, Bernard C. Barmann, Kern County Counsel, Stephen D. Schuett, Asst. County Counsel, Cameron L. Reeves, Lake County Counsel, De Witt W. Clinton, Los Angeles County Counsel, David L. Muir, Deputy County Counsel, Jeffrey L. Kuhn, Madera County Counsel, Douglas J. Maloney, Marin County Counsel, Allen A. Haim, Deputy County Counsel, James S. Reed, Mono County Counsel, Ralph R. Kuchler, Monterey County Counsel, Leroy W. Blankenship, Deputy County Counsel, James A. Curtis, Nevada County Counsel, Robert Shulman, Plumas County Counsel, William C. Katzenstein, Riverside Deputy County Counsel, Lee B. Elam, Sacramento County Counsel, Robert A. Ryan, Deputy County Counsel, Alan K. Marks, San Bernardino County Counsel, Michelle D. English, Deputy County Counsel, Steven M. Woodside, Santa Clara County Counsel, Karen Heggie, Deputy County Counsel, Dwight L. Herr, Santa Cruz County Counsel, David R. Frank, Shasta County Counsel, Frank J. DeMarco, Siskioyu County Counsel, James P. Botz, Sonoma County Counsel, Stephen Dietrich, Jr., Tuolumne County Counsel, James L. McBride, Ventura

[820 P.2d 1002] County Counsel, Melodie M. Kleiman, Asst. County Counsel, James P. Jackson, City Atty., Sacramento, Theodore H. Kobey, Jr., Asst. City Atty., Diane B. Balter, Deputy City Atty., Sacramento, Gray, Cary, Ames & Frye, David E. Monahan, Kenneth S. Klein, San Diego, Walter & Pistole, Jeffrey A. Walter, Santa Rosa, Howard, Rice, Nemerovski, Canady, Robertson & Falk, Steven L. Mayer, Remcho, Johansen & Purcell, Charles C. Marson, Robin B. Johansen, San Francisco, Gibson, Dunn & Crutcher, John A. Arguelles, Richard G. Duncan, Jr., Jeffrey T. Thomas, Georgia Vanites Hogan, Newport Beach, Nossaman, Guthner, Knox & Elliott, Alvin S. Kaufer, Winfield D. Wilson, Los Angeles, [1 Cal.4th 5] Parker, Covert & Chidester, Clayton H. Parker, Tustin, O'Melveny & Myers, Holly E. Kendig, Richard M. Jones, Thomas G. Hungar, Orrick, Herrington & Sutcliffe and Paul A. Webber, Los Angeles, as amici curiae on behalf of defendants and appellants

Louis S. Katz, Thomas F. Homann, Carl Fabian, Ellen D. Geis, Stephen J. Perrello, Jr., Gregory Marshall and Lewis A. Wenzell, San Diego, for plaintiffs and respondents.

Trevor A. Grimm, Los Angeles, Ronald A. Zumbrun, Anthony T. Caso and Jonathan M. Coupal, Sacramento, as amici curiae on behalf of plaintiffs and respondents.

INTRODUCTION

LUCAS, Chief Justice.

In this case we consider, among other issues, a question previously left open (see Los Angeles County Transportation Com. v. Richmond (1982) 31 Cal.3d 197, 208, 182 Cal.Rptr. 324, 643 P.2d 941 [hereafter Richmond ] ) regarding the validity of a taxation scheme enacted for the apparent purpose of avoiding the supermajority voter approval requirement imposed by a 1978 initiative measure (Prop. 13) with respect to any "special taxes" sought to be imposed by "cities, counties and special districts" (see Cal. Const., art. XIII A, § 4 [hereafter section 4] ). At issue here is the validity of a sales tax (retail transaction and use tax) imposed on sales occurring in San Diego County (hereafter the County) for the purpose of financing the construction and operation of criminal detention and/or courthouse facilities (hereafter justice facilities) for the County. We conclude the tax is invalid because it was not approved by at least two-thirds of the County's voters, as required by section 4.

In 1987, in express recognition of the County's need for improved courtrooms and jails, the Legislature passed an act (Gov.Code, §§ 26250-26285) creating the San Diego County Regional Justice Facility Financing Agency (hereafter the Agency) and setting forth the Agency's obligations. Under the act, the Agency was charged with adopting a tax ordinance imposing a supplemental sales tax of one-half of 1 percent throughout the County for the purpose of financing the construction of justice facilities. (Id., §§ 26267, 26271-26275.) The act provided for a countywide election held for the purpose of approving the tax ordinance by simple majority vote. (Id., §§ 26271, 26273.) The act also provided that the Agency possesses no tax power other than the foregoing sales tax. (Id., § 26283.)

[1 Cal.4th 6] At an election held in June 1988, the County's voters approved the tax ordinance by a bare (50.8 percent) majority vote. Plaintiffs, being County taxpayers, filed the present suit to challenge the validity of the tax. (See Code Civ.Proc., § 863.) As pertinent here, the complaint asserted the tax violated the supermajority vote requirements of both section 4 and Government Code sections 53720-53730 (added by Prop. 62, discussed below). Prior to trial, the tax went into operation; tax revenues have been collected and accumulated pending final decision.

The trial court found in plaintiffs/taxpayers' favor, concluding the tax constituted a deliberate and unavailing attempt to circumvent section 4 and its requirement of two-thirds voter approval of special taxes imposed by special districts such as the Agency.

The Court of Appeal disagreed and reversed the trial court's judgment declaring

[820 P.2d 1003] the tax invalid. The appellate court acknowledged that the act creating the Agency "gives the Agency no significant governmental discretion ... with respect to how the tax revenues will be spent. In this case, it is distressingly clear that the Agency is nothing more than an empty shell through which the Board of Supervisors of the County of San Diego can exercise its discretion." Nonetheless, deeming itself bound by Richmond, the Court of Appeal reasoned that section 4 is inapplicable to districts such as the Agency which have no power to levy a property tax. The appellate court further concluded that application to the Agency of a similar statutory supermajority voter approval provision in Government Code section 53722 would be improper as an attempted local tax referendum

As will appear, we conclude (1) the Court of Appeal erred in holding the provisions of section 4 were inapplicable to the Agency's tax, (2) the tax was invalid for failure to secure the requisite two-thirds voter approval, and (3) accordingly we need not reach the question of the effect, application, or validity of Government Code section 53722.

DISCUSSION

We have observed that section 4, although written in permissive terms, was intended to circumscribe the taxing power of local government. (See, e.g., Richmond, supra, 31 Cal.3d at p. 201, 182 Cal.Rptr. 324, 643 P.2d 941.) In pertinent part, the section provides that "Cities, Counties and special districts, by a two-thirds vote of the qualified electors of such district, may impose special taxes on such district, except ad valorem taxes on real property or a transaction tax or sales tax on the sale of real property within such City, County or special district."

[1 Cal.4th 7] As we stated in Amador Valley Joint Union High Sch. Dist. v. State Bd. of Equalization (1978) 22 Cal.3d 208, 231, 149 Cal.Rptr. 239, 583 P.2d 1281 (hereafter Amador ), upholding the validity of Proposition 13, "since any tax savings resulting from the operation of sections 1 and 2 [the property tax rate and assessment limitations of the measure] could be withdrawn or depleted by additional or increased state or local levies of other than property taxes, sections 3 [providing that increased state taxes require legislative approval by a two-thirds vote] and 4 combine to place restrictions upon the imposition of such taxes."

In other words, section 4's restriction on local taxes is part of an "interlocking 'package' deemed necessary by the initiative's framers to assure effective real property tax relief." (Amador, supra, 22 Cal.3d at p. 231, 149 Cal.Rptr. 239, 583 P.2d 1281.) Plaintiffs' primary argument is that the Court of Appeal's decision herein undermines Proposition 13 by presenting cities, counties and other governmental entities with a ready means of avoiding its limitation on new taxes.

Richmond, supra, 31 Cal.3d 197, 182 Cal.Rptr. 324, 643 P.2d 941, concerned the validity of a sales tax imposed by the Los Angeles County Transportation Commission (LACTC), an entity created in 1976 prior to the adoption of Proposition 13. The enabling act authorized LACTC to impose the tax once the measure was approved by a majority of the county's voters; LACTC was not empowered to levy a tax on real property. After 54 percent of the voters approved the measure, the question arose whether the supermajority voter approval provision of section 4 was applicable. We concluded it was not applicable.

We focused on the subsidiary issue whether the LACTC was a "special district" within the meaning of section 4. We found that term ambiguous, having been given varying interpretations in prior cases and statutes. Stressing the "fundamentally undemocratic nature" of supermajority vote requirements (31 Cal.3d at p. 205, 182 Cal.Rptr. 324, 643 P.2d 941), we resolved the ambiguity by...