State Bd. of Equalization v. Superior Court

• Decision Date: 03 November 1992
• Docket Number: No. C008289,C008289
• Citation: 10 Cal.App.4th 1177,13 Cal.Rptr.2d 342
• Court: California Court of Appeals Court of Appeals
• Parties: STATE BOARD OF EQUALIZATION, et al., Petitioners, v. SUPERIOR COURT of Sacramento County, Respondent; ASSOCIATED SALES TAX CONSULTANTS, INC., Real Party in Interest.

Page 342

13 Cal.Rptr.2d 342

10 Cal.App.4th 1177

STATE BOARD OF EQUALIZATION, et al., Petitioners, v. SUPERIOR COURT of Sacramento County, Respondent ASSOCIATED SALES TAX CONSULTANTS, INC., Real Party in Interest.

No. C008289.

Court of Appeal, Third District, California.

Nov. 3, 1992.

Certified for Partial Publication

Review Denied Jan. 28, 1993.

John K. Van de Kamp and Daniel E. Lungren, Attys. Gen., Robert F. Tyler, Lawrence Kenneth Keethe, Deputy Attys. Gen., for petitioners.

No appearance for respondent.

McDonough, Holland & Allen, Mark A. Wasser, Sacramento for real party in interest.

BLEASE, Acting Presiding Justice.

This case concerns secret law. It arises on a writ of review of a judgment, issued under the California Public Records Act (Gov.Code, § 6250 et seq.) ¹ , which directs the State Board of Equalization (Board) to disclose to Associated Sales Tax Consultants (Associated) documents (from which confidential taxpayer information has been excised) which show the Board's practice in interpreting and applying Sales and Use Tax Regulations 1660 and 1667 (Cal.Code Regs., tit. 18, §§ 1660, 1667).

The Board concedes the documents are public records but would withhold them on the ground the public interest in their disclosure is outweighed by the burden of excising confidential taxpayer information. In the published portion of this opinion ² we will conclude that the taxpayer information is segregable from the documents sought and that the public interest in disclosure far outweighs the burden and cost of excision, which will largely be borne by Associated. We also will conclude that the Board must prepare a list of the documents at Associated's expense to permit it to narrow its request by eliminating unwanted records.

We will affirm the judgment.

FACTS

Associated is engaged in the business of advising taxpayers on the construction and application of the California sales and use tax law. It provides tax planning services, represents taxpayers in audits and other matters before the Board and counsels them about the tax consequences of particular transactions. Much of its business involves the application of sales and use tax regulations to its clients' cases.

Associated requested the Board to provide it with copies of documents relating to the Board's interpretation and application of Sales and Use Tax Regulations 1660 and 1667 ³, including Tax Counsel opinions, published opinions, internal memoranda and correspondence, preliminary hearing officer reports on audit protests, replies to taxpayer inquiries, and audit staff training materials. It asserts that the material is used by Board staff in administering and enforcing these regulations and is therefore pertinent to the services it provides its clients.

The Board denied the request on the ground the documents contain confidential taxpayer information under Revenue and Taxation Code section 7056 that would have to be excised before disclosure. ⁴ Associated agreed to excision and to pay the necessary fees for doing so and the costs of copying the records. Nonetheless the Board asserted that "[t]he burden of producing these documents far exceeds the benefits of disclosure." The Board also claimed the request lacks sufficient specificity.

Associated petitioned the superior court for declaratory relief and for an order compelling the Board to disclose the documents. The Board answered, admitting the documents are public records within the meaning of the Public Records Act (see § 6252, subd. (d)) but denying impropriety in not disclosing them. At the hearing on the petition the Board produced three boxes of documents comprising the requested records. The court declined to examine them (see § 6259, subd. (a)) ⁵, choosing to hear argument why the Board found it too onerous to go through the boxes, an "identifiable quantity" and "within the realm of reason", as the court found, and excise confidential taxpayer information, provided that Associated paid the cost of so doing. The Board claimed the task would involve careful reading and editing of the records and would consume about a month and one-half of a staff counsel's time that otherwise could be devoted to other Board business. ⁶

The court responded that the California Public Records Act necessarily contemplates that staff time will be used to process record requests and that, in any event, the Board could contract with outside counsel to perform the task of identifying and excising the confidential portions of the records. The Board claimed that in some instances the business activities described are so unique to a particular company or location (e.g., video rentals to motels, or crane hauling in "x" town, or the company doing "y" in Oakland) that the information would indirectly disclose the taxpayer's identity to an informed or inquisitive reader and therefore have to be excised to preserve confidentiality. What would be left, the Board maintained, would be abstract statements of the law, divorced from the salient facts. The court disagreed.

Finally, the Board argued that, assuming the request to be appropriate, there are 96 other sales and use tax regulations, and, "as day follows night," this request will be followed by seriatim requests for documents relating to the remaining regulations, requests which on the whole will be overly burdensome to the Board and therefore unreasonable. The court responded that the propriety of requests not yet made was not before the court.

The court granted Associated's petition. It weighed the relative public interests and found that, in light of the circumscribed nature of the request and Associated's willingness to pay reasonable costs for its processing, the public interest in disclosure outweighed any burden to the Board. At Associated's behest, the court further ordered the Board to prepare a list of the requested documents, for which Associated would deposit $1,000 toward its cost. The purpose of the list was to permit Associated to refine its request to exclude unwanted documents.

The Board seeks review of this judgment.

DISCUSSION

I Scope of Review

Preliminarily we digress to discuss the scope of appellate review. The Board filed a timely notice of appeal from the judgment. Associated moved to dismiss the appeal on the ground that review may be had only by writ of review, as provided by section 6259, subdivision (c), and that the test of such review is whether the trial court acted in excess of its jurisdiction. ⁷ We granted the motion and dismissed the appeal.

The Board petitioned for a writ of review and we granted the writ to hear the case on its merits. In considering the scope of appellate review we sought briefing on the validity of the provision of section 6259, subdivision (c), which precludes review by appeal of an order granting or denying the disclosure of public records. The resolution of that issue was foreshortened by the decision of the California Supreme Court in Times Mirror Co. v. Superior Court (1991) 53 Cal.3d 1325, 283 Cal.Rptr. 893, 813 P.2d 240.

In Times Mirror the court declined to consider the validity of section 6259, subdivision (c), decided it could hear the matter upon a writ of review and construed subdivision (c) to permit review of trial court orders "on their merits." ⁸ That construction equates the scope of review by writ of review, as therein provided, with the scope of review on appeal. Accordingly, we will consider the merits of the trial court's order as if this case were on appeal.

II The Public Interest in Disclosure

The superior court ordered the Board to provide to Associated "copies of all records maintained by the Principal Auditor's Office regarding the history and current interpretation of Sales and Use Tax Regulations 1660 and 1667, including copies of all Tax Counsel's letter opinions concerning said regulation issued through the date of [the] request." The request specified that such records should include "all documents relating to Regulations 1660 and 1667 upon which the Board's audit staff would rely or be able to rely, in the process of interpreting and applying these regulations including ... all Tax Counsel's opinions ...; internal memorandum ...; the decisions ... that constitute the preliminary hearing officer's reports on audit protests ...; replies to taxpayer inquiries ... and training materials or other matter intended for the guidance of the audit staff."

The Board concedes that these records are public records. Indeed, it must. The Public Records Act was enacted against a "background of legislative impatience with secrecy in government...." (53 Ops.Cal.Atty.Gen. 136, 143 (1970); San Gabriel Tribune v. Superior Court (1983) 143 Cal.App.3d 762, 772, 192 Cal.Rptr. 415.) It so provides. ( § 6250; see also § 54950.)

The Board asserts the records requested are of no precedential effect within the agency. Whether or not the Board is legally bound by its working law is not controlling. The records sought will disclose the Board's practices in applying its regulations to the cases coming before it and therefore its working law. This is a matter of interest to the public and to the persons who come before the Board regardless of the precedential effect of the records.

There is a manifest public interest in the avoidance of secret law and a correlative interest in the disclosure of an agency's working law. (See NLRB v. Sears, Roebuck & Co. (1975) 421 U.S. 132, 153, 95 S.Ct. 1504, 1517, 44 L.Ed.2d 29, 49; Citizens for a Better Environment v. Department of Food & Agriculture (1985) 171 Cal.App.3d 704, 714, fn. 7, 217 Cal.Rptr. 504.) The revelation of an agency's working law promotes its accountability to the public and the consistent, predictable and nonarbitrary application and enforcement of the law. (See CBS, Inc. v. Block (1986) 42 Cal.3d 646, 651, 230 Cal.Rptr. 362, 725 P.2d 470.) This working law is found in the application of an agency's regulations to cases coming...