The opinion
Filed 12/15/25
CERTIFIED FOR PARTIAL PUBLICATION */
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
HOWARD JARVIS TAXPAYERS B334071
ASSOCIATION, et al.,
(Los Angeles County
Plaintiffs and Appellants, Super. Ct. Nos.
v. 22STCV39662,
23STCV00352)
CITY OF LOS ANGELES, et al.
Defendants and Respondents.
APPEAL from an order of the Superior Court of Los
Angeles County, Barbara M. Scheper, Judge. Affirmed.
Howard Jarvis Taxpayers Foundation, Jonathan M.
Coupal, Timothy A. Bittle, Laura E. Dougherty, and Amy C.
Sparrow for Plaintiffs and Appellants Howard Jarvis Taxpayers
Association and Apartment Association of Greater Los Angeles.
Law Offices of Keith M. Fromm, Keith M. Fromm for
Plaintiff and Appellant Jonathan Benabou, as Trustee on Behalf
of the Mani Benabou Family Trust.
Pursuant to California Rules of Court, rules 8.1100 and
*
8.1110, this opinion is certified for publication with the exception
of part II of the Discussion.
Bell, McAndrews & Hiltachk, Thomas W. Hiltachk, Brian
T. Hildreth, Katherine C. Jenkins, and Logan W. Bambino for
California Association of Realtors as Amicus Curiae on behalf of
Appellant Howard Jarvis Taxpayers Association.
Burke, Williams, & Sorensen, Kevin D. Siegel, J. Leah
Castella, and Eileen L. Ollivier for Defendant and Respondent
City of Los Angeles.
Collins + Collins, Brian K. Stewart and Nicholas R. Colletti
for Defendants and Respondents County of Los Angeles and
County of Los Angeles Recorder’s Office.
Irell & Manella, Morgan Chu, Michael Ermer, Charlotte J.
Wen, Connor He-Schaefer, Nick Wagner, Woongki Park, and
Taylor A. Hatridge; Public Counsel, Gregory Bonett, Faizah
Malik, and Jonathan Jager for Defendants and Respondents
Southern California Association of Non-Profit Housing, Inc.,
Korean Immigrant Workers Advocates of Southern California
dba Koreatown Immigrant Workers Alliance, and Service
Employees International Union Local 2015.
2
Under the California Constitution, the people retain the
power to enact special real property transaction taxes by local
initiative. (Cal. Const., art. II, §§ 1, 11; art. IV, § 1.) The main
issue in this case is whether the people revoked this power when
they adopted section 450(a) of the Los Angeles City Charter
(section 450(a).) We hold that the people did not do so.
In the November 2022 General Municipal Election, voters
in the City of Los Angeles approved “Initiative Ordinance ULA”
(Measure ULA). Measure ULA authorizes an additional tax on
the sale or transfer of real property exceeding $5 million. The
revenue from the special transaction tax 1 is allocated to various
housing and homelessness-related programs administered by the
Los Angeles Housing Department.
Plaintiffs and appellants Howard Jarvis Taxpayers
Association and Apartment Association of Greater Los Angeles
(collectively, Howard Jarvis), and Jonathan Benabou, Trustee of
the Mani Benabou Family Trust (Benabou) appeal from the trial
court’s order dismissing their complaints alleging that Measure
ULA is invalid.
Howard Jarvis principally contends that Measure ULA is
invalid because it conflicts with section 450(a). Section 450(a)
provides, in part, that “[a]ny proposed ordinance which the
Council itself might adopt may be submitted to the
Council . . . requesting that the ordinance be adopted by the
Council or be submitted to a vote of the electors of the City.”
(Italics added.) It is undisputed that charter cities may impose
general transaction taxes, but under article XIII A, section 4 of
1 A special tax is a tax imposed for a specific purpose. (City
and County of San Francisco v. Farrell (1982) 32 Cal.3d 47, 58;
Cal. Const., art. XIII C, § 1, subdivision (d).)
3
the state Constitution (section 4), they are prohibited from
imposing real property special transaction taxes such as Measure
ULA.2 (See Fielder v. City of Los Angeles (1993) 14 Cal.App.4th
137, 142 (Fielder).) Relying on the italicized language in section
450(a), Howard Jarvis argues that because the City Council could
not itself have enacted Measure ULA, voters cannot enact
Measure ULA either.
In the published portion of this opinion, we conclude the
passage of Measure ULA pursuant to a majority vote of the City’s
electorate was a valid exercise of the people’s initiative power.
While section 4 restricts a local government’s ability to impose a
special transaction tax, it does not limit the ability of voters to do
so via initiative. (City and County of San Francisco v. All Persons
Interested in the Matter of Proposition C (2020) 51 Cal.App.5th
703, 721 (Proposition C).) Howard Jarvis attempts to circumvent
section 4’s limited scope by arguing that section 450(a) revokes
the people’s reserved initiative power with respect to special
transaction taxes. We reject this argument. When read in
context and through the lens of well-established principles
interpreting the people’s power of initiative, section 450(a) does
not invalidate Measure ULA.
In the unpublished portion of this opinion, we address
Benabou’s challenges to Measure ULA on constitutional grounds,
including that it violates the Fourteenth Amendment’s Equal
Protection Clause and the First Amendment, and various other
2 Section 4 provides: “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.”
4
grounds including alleged misrepresentations in the ballot
materials, preemption, and purported factual issues that
preclude judgment on the pleadings. We conclude that none of
Benabou’s contentions has merit.
BACKGROUND
Measure ULA was proposed on May 2, 2022, through the
voter initiative procedure in Los Angeles. It was placed on the
ballot at the General Municipal Election on November 8, 2022,
where it passed with 57.77% of the vote.
On December 21, 2022, Howard Jarvis filed a reverse
validation action against the City of Los Angeles (the City)
pursuant to the validation statutes (see Gov, Code, § 50077.5;
Code Civ. Proc., §§ 860-870.5) challenging Measure ULA under
the Los Angeles City Charter and section 4. Benabou filed a
separate reverse validation action against the City, the County of
Los Angeles, and the County of Los Angeles Recorder’s Office,
challenging Measure ULA under 16 additional causes of action.
The court consolidated the two cases.
The City answered both complaints, defending the validity
of Measure ULA. Southern California of Association of Non-
Profit Housing, Inc., Korean Immigrant Workers Advocates of
Southern California dba Koreatown Immigrant Workers Alliance,
and Service Employees International Union Local 2015, on behalf
of All Persons Interested in the Matter of Measure ULA, also
answered the complaints.
The parties filed cross-motions for judgment on the
pleadings. After a hearing on the motions, the trial court granted
judgment on the pleadings in favor of defendants, and entered an
order of dismissal. Howard Jarvis and Benabou appeal from the
dismissal order.
5
DISCUSSION
I. Neither Section 450(a) Nor Section 4 Revoke the
People’s Initiative Power with Respect to Special
Real Property Transaction Taxes
The people’s initiative power is both statewide and local.
(Cal. Const., art. II, §§ 8, 11.) Charter cities such as Los Angeles
regulate their own initiative procedures. (San Diego Public
Library Foundation v. Fuentes (2025) 111 Cal.App.5th 711, 722,
citing Cal. Const., art. XI, §§ 2, 3, & 5, subd. (a).)
The California Constitution speaks of the initiative power
not as a right granted to the people, but as a power “the people
reserve to themselves.” (Cal. Const., art. IV, § 1; see Dwyer v.
City Council of Berkely (1927) 200 Cal. 505, 513 [“the legislative
power of a municipality resides in the people thereof” and is
“conferred” upon representatives].) Our Supreme Court has
described the initiative power 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 (Livermore).)
To preserve this precious right retained by the people, the
courts liberally construe constitutional and charter provisions in
favor of the initiative power. (California Cannabis Coalition v.
City of Upland (2017) 3 Cal.5th 924, 934 (Upland); Livermore,
supra, 18 Cal.3d at p. 591; DeVita v. County of Napa (1995) 9
Cal.4th 763, 776 (DeVita).) This means we are obligated to
“resolve doubts about the scope of the initiative power in its favor
whenever possible” and “narrowly construe provisions that would
burden or limit the exercise of that power[.]” (Upland, at p. 936;
accord Rossi v. Brown (1995) 9 Cal.4th 688, 695 (Rossi).) There is
a presumption that the initiative power is not constrained.
6
(Upland, at p. 947; Kennedy Wholesale, Inc. v. State Bd. of
Equalization (1991) 53 Cal.3d 245, 249 (Kennedy Wholesale).)
Moreover, “ ‘the law shuns repeals by implication.’ ”
(Kennedy Wholesale, supra, 53 Cal.3d at p. 249.) Absent a “clear,
unambiguous indication” that a provision was intended to
constrain the people’s initiative power, “we will not construe a
provision as imposing such a limitation.” (Upland, supra, 3
Cal.5th at p. 931, citing Kennedy Wholesale, at p. 252.) Howard
Jarvis refers to this latter principle as the “clear statement” rule,
and we shall do the same.
Because the initiative powers reserved by the people in the
state Constitution are legislative powers (Cal. Const., art. IV, §
1), courts historically “have restricted the exercise of local
initiative powers by drawing a distinction between legislative and
administrative acts,” confining the local initiative process to “the
legislative orbit.” (Pettye v. City and County of San Francisco
(2004) 118 Cal.App.4th 233, 240 (Pettye).) In the context of
determining whether a local initiative is a matter of statewide
concern, this approach has been criticized by our Supreme Court
as “awkward and confusing” and an “unnecessary fiction.”
(Committee of Seven Thousand v. Superior Court (1988) 45 Cal.3d
491, 511.)
Although a city charter may not restrict the power of
initiative, it may provide for initiative power that is broader than
the initiative power reserved in the Constitution. (Rossi, supra, 9
Cal.4th at pp. 696, 704; see also Newport Beach Fire and Police
Protective League v. City Council of the City of Newport Beach
(1961) 189 Cal.App.2d 17, 21–22 [a city charter may not limit the
initiative power, “although it may increase that power”].) “ ‘[A]s
between the provisions of the Constitution and the provisions of a
7
city charter, those which reserve the greater or more extensive
[initiative or] referendum power in the people will govern.’ ”
(Pettye, supra, 118 Cal.App.4th at 240, quoting Hunt v. Mayor &
Council of Riverside (1948) 31 Cal.2d 619.)
Turning to the present matter, Howard Jarvis initially took
the position that section 4, which prohibits charter cities from
imposing real property special transaction taxes, also bars voter
initiatives regarding such taxes. At oral argument, however,
Howard Jarvis conceded that section 4 does not apply to voter
initiatives. Howard Jarvis argues that section 4 nevertheless
implicitly operates through section 450(a) to limit the people’s
initiative power. Applying the principles described above, we
reject that argument.
Nothing in the text of section 450(a) overcomes the
presumption that the people’s local initiative power is
unconstrained with respect to special transaction taxes. Section
450(a) provides: “Any proposed ordinance which the Council itself
might adopt may be submitted to the Council by a petition filed
with the City Clerk, requesting that the ordinance be adopted by
the Council or be submitted to a vote of the electors of the City.”
This language does not clearly and unambiguously revoke the
people’s initiative power on any municipal topic, including special
transaction taxes. Indeed, section 450(a) does not refer to a
transaction tax or section 4 or any limitation on the people’s
initiative power. If we were to adopt Howard Jarvis’s
interpretation of section 450(a), we would effectively be holding
the initiative power was repealed by implication. This we cannot
do.
Nor does Howard Jarvis point to anything in the legislative
history of section 450(a) that evidences an intent to limit the
8
scope of the initiative power over taxation. The language “which
the Council itself might adopt” was added to the Charter in 1911,
decades before the adoption of section 4 in 1978. In 1925, the
Charter was amended to expand the initiative power to include
“[a]ny proposed ordinance, legislative, administrative or
executive, which the Council itself might adopt.” In 1985, the
Charter was amended again to remove the phrase “legislative,
administrative, or executive[.]” All we can glean from this
history is that the electorate initially sought to make clear that
municipal voters, like the City Council, may legislate on
municipal subjects (i.e., cannot legislate on subjects preempted by
the state). In 1925, however, the electorate sought to broaden the
initiative power to administrative and executive matters but
later limited it again to legislative matters. This history
certainly does not evidence an unambiguous intent to constrain
the electorate’s expressly reserved power of initiative over
subcategories of legislation (i.e., special transaction taxes).
In Upland, supra, 3 Cal.5th at p. 931, our Supreme Court
examined whether an amendment to our Constitution, section
XIII C, section 2, subdivision (b), limited the voters’ power to
raise taxes by statutory initiative and concluded it did not. The
court held that unless there was an unambiguous indication that
section XIII C was intended to constrain the people’s initiative
power, such a limitation could not be inferred. (Upland, at p.
931.) Howard Jarvis argues that this clear statement rule
discussed in Upland is limited to “procedural” rather than
“substantive” provisions. We do not construe Upland so
narrowly. Nowhere in Upland does our Supreme Court limit the
scope of its holding to minimizing “procedural” barriers.
9
It is true that Upland recognized that “ ‘statutory and
constitutional limits on the power of local government apply
equally to local initiatives.’ ” (Upland, supra, 3 Cal.5th at p. 942.)
As an example, Upland stated that when a local government
lacks authority in an area due to state preemption, the local
electorate also lacks that authority. (Ibid.) And Upland noted
that these limitations do not apply to procedural requirements
such as “notice and hearing requirements” or “two-thirds vote
requirements.” (Ibid.) But after reviewing case law on the limits
of local initiative power, the court made clear its holding and the
cases it reviewed rested on broader principles and the
“presumption in favor of the initiative power.” (Upland, supra, 3
Cal.5th at p. 943, citing DeVita, supra, 9 Cal.4th at pp. 785—
786.)
As the DeVita court observed, the general rule that
“statutory procedural requirements imposed on the local
legislative body” do not “apply to the electorate nor are taken as
evidence that the initiative . . . is barred” is merely “a corollary to
the basic presumption in favor of the electorate’s power of
initiative.” (DeVita, supra, 9 Cal.4th at p. 786.) That “basic
presumption” applies against a finding that section 450(a)
revoked the people’s local initiative power. Howard Jarvis has
not rebutted the presumption here.
Howard Jarvis alternatively argues there is a “co-
extensive” rule that categorically and without exception limits
local initiative power within the metes and bounds of the power
of the local government in the same geographic area. Under this
rule, Howard Jarvis contends, “even absent charter section
450(a), Measure ULA is void because the City Council cannot
‘legislate in an area’ of special [transaction] taxes and therefore
10
neither can the people.” Howard Jarvis’s argument rests on the
premise that section 4 bars both local governments and local
electorates from enacting special transaction taxes. But as
Howard Jarvis now concedes, this premise is wrong because
section 4 does not apply to voter initiatives.
This case presents an issue not directly addressed by prior
cases. Section 4 has two clauses. The first clause provides that
cities, counties, and special districts may impose “special taxes”
only after obtaining approval “by two-thirds vote of qualified
electors.” The second clause provides that local government
entities cannot impose ad valorem taxes on real property or a
special “transaction tax or sales tax on the sale of real property
within” their territory. Several cases have held that section 4’s
two-thirds requirement for imposing special taxes does not apply
to voter initiatives. (See e.g., Proposition C, supra, 51
Cal.App.5th at p. 721; City and County of San Francisco v. All
Persons Interested In the Matter of Proposition G (2021) 66
Cal.App.5th 1058, 1070; Howard Jarvis Taxpayers Association v.
City and County of San Francisco (2021) 60 Cal.App.5th 227,
235.) But the parties have not cited and we have not found any
cases that specifically address whether section 4’s provision
prohibiting special transaction taxes applies to voter initiatives.
The reasoning of the cases addressing section 4’s first
clause applies here. Under its plain text, section 4 applies only to
“Cities, Counties and special districts.” Section 4 states nothing
about limiting the people’s reserved initiative power to enact
special transaction taxes. We conclude that section 4 did not
impliedly revoke the local initiative power with respect to special
real property transaction taxes.
11
Kennedy Wholesale is instructive. There, the issue was
whether a proposition that increased the tax on tobacco products
violated Article XIII A, section 3 of the California Constitution
(section 3). Under section 3, “any changes in State taxes enacted
for the purpose of increasing revenues . . . must be imposed
by . . . the Legislature.” (Italics added.) After acknowledging that
section 3’s plain meaning ostensibly granted the Legislature
exclusive power to raise taxes, the court stated that section 3 “is
ambiguous when read in the context of the whole Constitution.”
(Kennedy Wholesale, supra, 53 Cal.3d at p. 249.)
The court then analyzed whether section 3 impliedly
revoked the people’s initiative power to raise taxes. First, it
noted that section 3 “does not even mention the initiative power,
let alone purport to restrict it.” (Kennedy Wholesale, supra, 53
Cal.3d at p. 249.) Next, the court noted that there is a
presumption against an implied repeal of the people’s initiative
power, one of the most precious rights of the people of California.
(Ibid.) Both points equally support our conclusion that section 4
did not impliedly revoke the people’s local initiative power with
respect to transaction taxes.
The Kennedy Wholesale court also reviewed the legislative
history of section 3, which was enacted as part of Proposition 13.
(Kennedy Wholesale, supra, 53 Cal.3d at p. 249.) The court
explained nothing in Proposition 13’s official ballot supported the
inference that the voters intended to “limit their own power to
raise taxes in the future by statutory initiative.” (Id at p. 250.)
“To the contrary,” the court continued, “the arguments in favor of
Proposition 13 adopt a populist theme that cannot easily be
reconciled with plaintiff’s interpretation of the measure.
Proponents of Proposition 13 described the measure as directed
12
against ‘spendthrift politicians’ and as ‘[r]estor[ing] government
of, for and by the people.’ [Citation.] If, as the proponents’
argument suggests, a preference for direct democracy over the
legislative process played a role in motivating the passage of
Proposition 13, the conclusion that the voters intended to limit
their own power would be difficult to justify.” (Ibid.)
The same is true here. Like section 3, section 4 was
enacted pursuant to Proposition 13. (Alliance San Diego v. City
of San Diego (2023) 94 Cal.App.5th 419, 430.) The legislative
history of Proposition 13 is “inconsistent with the claim that
voters intended Proposition 13 to limit their own power to raise
taxes by initiative.” (Proposition C, supra, 51 Cal.App.5th at p.
716 [“None of the evidence Kennedy Wholesale cites is specific to
section 3, as distinct from section 4, of article XIII A”].) Because
the voters did not generally intend for Proposition 13 to limit
their own power to raise taxes by initiative, we will not read
section 4—which applies to cities, counties, and special
districts—as implicitly applying to the electorate’s power of
initiative.
We acknowledge that a local electorate’s right to initiative
is “generally co-extensive with the legislative power of the local
governing body.” (DeVita, supra, 9 Cal.4th at p. 775.) For
example, a local initiative “could not be used in areas in which
the local legislative body’s discretion was largely preempted by
statutory mandate.” (Id. at p. 776.) This case, however,
illustrates an exception to the general rule. As explained, we
agree with Howard Jarvis that local government entities are
precluded from imposing special real property transaction taxes,
but the people are not so precluded by section 4. Howard Jarvis
cannot circumvent this dichotomy through section 450(a) because
13
that section did not implicitly repeal the people’s right to impose
special real property transaction taxes by initiative.
II. None of Benabou’s Arguments Demonstrate Measure
ULA is Invalid 3
A. Measure ULA Does Not Violate Equal
Protection
Benabou argues that Measure ULA impinges on the
“fundamental right” to dispose of property and that it fails strict
scrutiny because “[c]learly an infinite number of alternative
3 We note that the following discussion of Benabou’s
arguments is limited to those raised on appeal in his opening
brief and supported by reasoned argument and citations to legal
authority. (See Benach v. County of Los Angeles (2007) 149
Cal.App.4th 836, 852, fn. omitted [“When an appellant fails to
raise a point, or asserts it but fails to support it with reasoned
argument and citations to authority, we treat the point as
[forfeited].”].) We decline Benabou’s improper requests to “read,
in their entirety, the briefs and supporting materials filed by
[Benabou] in the lower court, as they comprise very important
components of the appellate record in this case” and to
“independently read the whole of the [complaint] to assess
whether it states valid causes or could be amended to do so,
whether discussed in this brief or not.” (See Soukup v. Law
Offices of Herbet Hafif (2006) 39 Cal.4th 260, 294 fn. 20 [It is well
settled that, on appeal, incorporation by reference of documents
filed in the trial court is not permitted]; see also Jones v. Superior
Court (1994) 26 Cal.App.4th 92, 99 [“Issues do not have a life of
their own: if they are not raised or supported by argument or
citation to authority, we consider the issues [forfeited].”].) We
also deny Benabou’s “Request to Deem Facts and Arguments
Admitted, and Request to Grant Proposed Amendments.”
14
means of raising money to remediate homelessness exist.” We
disagree. As discussed below, the rational basis test applies.
Applying that standard, Measure ULA passes constitutional
muster.
In equal protection challenges, “[c]lassifications that
disadvantage a ‘suspect class’ or impinge upon the exercise of a
‘fundamental right’ are subject to strict scrutiny; this requires the
state to demonstrate that its classification ‘has been precisely
tailored to serve a compelling government interest.’ ” (Jensen v.
Franchise Tax Bd. (2009) 178 Cal.App.4th 426, 434 (Jensen).)
Neither condition is met here.
Although not entirely clear, it appears that Benabou is
arguing that wealth is a suspect class. Wealthy individuals do
not, however, form a “suspect class.” (See Jensen, supra, 178
Cal.App.4th at pp. 434—435.) Benabou provides no authority to
the contrary.
Nor does Measure ULA impinge upon a fundamental right.
Fundamental rights are those that are “ ‘ “explicitly or implicitly
secured by the Constitution.” ’ ” (Jensen, supra, 178 Cal.App.4th
at p. 434, fn. 3.) Benabou provides no authority for his assertion
that the right to dispose of one’s property is a fundamental right.
Assuming this is a fundamental right, “not every limitation or
incidental burden on a fundamental right is subject to the strict
scrutiny standard.” (Fair Political Practices Comm’n v. Superior
Court (1979) 25 Cal.3d 33, 47 (Fair Political Practices).) “It is
only when there exists a real and appreciable impact on, or a
significant interference with the exercise of the fundamental
right that the strict scrutiny doctrine will be applied.” (Ibid.)
Benabou has not shown that Measure ULA imposes a
significant interference with property rights. Benabou claims
15
that ULA’s tax rates of 4% or 5.5% of the gross proceeds of the
sale “may very well make it impossible for a property owner to
even sell their property.” But he provides no support for this
speculative statement. (See Doe v. Roman Catholic Archbishop of
Los Angeles (2016) 247 Cal.App4th 953, 960 [“We must accept as
true all ‘well-pleaded facts’ in the complaint, but need not accept
allegations containing . . . ‘unsupported speculation’ ”].) Benabou
has not pointed us to—and we are unaware of—any cases holding
that a real property transaction tax triggers strict scrutiny
review.4 To the contrary, courts have consistently applied the
rational basis standard to equal protection challenges to tax
legislation. (See e.g., Kahn v. Shevin (1974) 416 U.S. 351, 355
[rational basis standard applied to equal protection challenge to
property tax exemption for widows, but not for widowers]; see
also Jensen, supra, 178 Cal.App.4th at pp. 431, 437—440 [finding
a rational basis for a tax on people earning over $1,000,000 to
expand mental health services “for all Californians,” even though
the taxpayers had no “need or use for” the tax-funded mental
health services and “most” of the beneficiaries fell within the tax
exemption]; Ashford Hospitality Advisors LLC v. City & County of
San Francisco (2021) 61 Cal.App.5th 498, 504 (Ashford)
[upholding, under rational basis, a property “transfer tax
4 Benabou’s reliance on People v. Beach (1983) 147
Cal.App.3d 612 (Beach) and People v. Leon (2010) 181
Cal.App.4th 943 (Leon) is unavailing. The issue in those cases
was whether probation conditions that impaired individuals’
rights to associate with others, to travel, and to own property
were valid. (Beach, supra, at pp. 621—622; Leon, supra, at p.
951.) Neither case involved an equal protection challenge to
legislation; thus, they have no bearing on the standard of review
here.
16
ordinance [that] sorts taxpayers into different classifications
based on the gross value of the property sold and taxes them at
differing rates according to their classification”].) There is no
basis for holding that a heightened degree of scrutiny is
appropriate here.
Under the rational basis standard, a law “ ‘ “must be
upheld against equal protection challenge if there is any
reasonably conceivable state of facts that could provide a rational
basis for the classification.” ’ ” (City & County of San Francisco v.
Flying Dutchman Park (2004) 122 Cal.App.4th 74, 83.) Where
there are plausible reasons for the classification, “our inquiry is
at an end.” (Ibid.) Only a legislative classification that is “purely
arbitrary and capricious and based upon no reasonable or
substantial difference between classes” is unconstitutional.
(Ibid.)
Benabou bears a “very heavy burden” of proving Measure
ULA’s classifications are so arbitrary that it violates equal
protection. (Borikas v. Alameda Unified School District (2013)
214 Cal.App.4th 135, 149.) He has failed to meet that burden.
Relying on Stewart Dry Goods Co. v. Lewis (1935) 294 U.S.
550 (Stewart Dry Goods), Benabou contends that “any tax” based
on gross amounts is inherently arbitrary. This argument was
soundly rejected by the court in Ashford.
The Ashford court upheld the tax before it as
distinguishable from the tax in Stewart Dry Goods. In Stewart
Dry Goods, the court invalidated a graduated gross receipts tax
imposed on the retail sale of merchandise under which the rate of
tax increased as the total gross receipts of all sales increased.
The statute taxed similar transactions differently depending on
the amount of receipts obtained from previous transactions.
17
(Stewart Dry Goods, supra, 294 U.S. at pp. 553—554.) The tax at
issue in Ashford, similar to Measure ULA, applied tiered tax
rates based on the value of the real property, with increased rates
for higher-value properties. (Ashford, supra, 61 Cal.App.5th at
pp. 501—502.) The Ashford court rejected an equal protection
challenge to the tax ordinance, and distinguished it from the
gross receipts tax in Stewart Dry Goods. The Ashford court
explained: “Stewart Dry Goods merely holds that classifying
taxpayers, for the purpose of imposing a sales tax, based on gross
sales of items other than the item being sold is arbitrary and
irrational if the justification is the taxpayer’s purported ability to
pay.” (Ashford, at p. 506.) The Ashford tax was constitutional
because “[g]ross value [was] not used solely as a proxy for profit,”
and “the classifications [were] supported by practical
considerations, including the amount of work required to process
the transfer of higher valued property and the city’s interest in
fairly allocating the costs of servicing higher valued properties.”
(Id. at p. 505.)
So too here. As the trial court observed, “[t]he
classifications in Measure ULA are substantially the same as
those in Ashford and are rationally supported for the same
reasons.”
Benabou’s final arguments regarding Measure ULA’s
supposed arbitrariness—i.e., that a person who sells property for
one dollar under the $5 million threshold will not pay the tax,
and the tax applies to persons who sell properties for gross
proceeds over $5 million even if they sell the property at a loss—
are unpersuasive. Equal protection “ ‘does not require . . . exact
equality of taxation. It only requires that the law imposing it
shall operate on all alike, under the same circumstances.’ ”
18
(Ashford, supra, 61 Cal.App.5th at p. 507, quoting Magoun v.
Illinois Trust & Savings Bank (1898) 170 U.S. 283 [explaining
that, for example, equal protection is not violated just because an
inheritance of $10,000 is taxed at 3% and an inheritance of
$10,001 is taxed at 4%].) Moreover, that Measure ULA’s tax is
imposed on all members of the stated class, irrespective of other
factors (such as whether the property is sold at a loss), does not
render it unequal. In fact, it is just the opposite: Measure ULA’s
identical treatment of all members of each class demonstrates
equal protection.
B. Measure ULA Does Not Violate the First
Amendment
Benabou next contends Measure ULA violates
constitutional free speech protections “because it imposes an
unreasonable burden . . . on some property owners’ rights to
express themselves” through the written instruments used to
record the transfer of real property subject to taxation.
“We must first consider whether [Measure ULA] implicates
the First Amendment at all.” (Midway Venture LLC v. County of
San Diego (2021) 60 Cal.App.5th 58, 84 (Midway Venture).)
Benabou bears this initial burden. (Ibid.) “[R]estrictions on
protected expression are distinct from restrictions on economic
activity or, more generally, on nonexpressive conduct.” (Sorrell v.
IMS Health Inc. (2011) 564 U.S. 552, 567.) “[T]he First
Amendment does not prevent restrictions directed at commerce
or conduct from imposing incidental burdens on speech.” (Ibid.)
While “[i]t is possible to find some kernel of expression in almost
every activity a person undertakes, . . . such a kernel is not
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sufficient to bring the activity within the protection of the First
Amendment.” (City of Dallas v. Stanglin (1989) 490 U.S. 19, 25.)
Benabou has not met his burden to demonstrate the First
Amendment applies here. Measure ULA regulates economic
activity, not speech. “It does not, on its face, limit what someone
can or cannot communicate. Nor does it restrict when, where, or
how someone can speak.” (American Society of Journalists and
Authors, Inc. v. Bonta (9th Cir. 2021) 15 F.4th 954, 961.) It
instead imposes a tax on the sale of real property exceeding
certain thresholds. That the amount of consideration paid for the
property is recorded in a deed does not turn Measure ULA’s tax
into a regulation on expressive speech. Rather, as Benabou
concedes, the tax imposed by Measure ULA is “based on ‘gross
proceeds’ ” of the sale of real property, rather than on the content
of any recorded instrument related to that sale. Nothing in
Measure ULA requires or forbids the inclusion of certain content
in any deed, instrument, or writing.
Because Measure ULA regulates only the economic conduct
of conveying real property rather than speech, it does not
implicate the First Amendment. (See e.g. Ohralik v. Ohio State
Bar Ass’n (1978) 436 U.S. 447 [citing numerous examples of
communications that are regulated without offending the First
Amendment].)
C. Alleged Misrepresentations in the Ballot
Materials Do Not Invalidate Measure ULA
For the first time on appeal, Benabou asserts that “the
ULA ballot materials contained material misrepresentations,”
which constitutes a “substantial ground for invalidation.”
Benabou seeks leave to amend to include this new claim in an
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amended complaint. But leave to amend should not be granted
where—as here—amendment would be futile. (See e.g. Vaillette
v. Fireman’s Fund Ins. Co. (1993) 18 Cal.App.4th 680, 685.)
This belatedly asserted claim is untimely under the
validation statutes. The statute of limitations for challenging the
legality of Measure ULA lapsed more than two years ago. (See
Code Civ. Proc., § 863 [reverse validation complaint must be filed
within 60 days of the act to be challenged].) Allowing a new
challenge to Measure ULA years after the statute of limitations
have lapsed, which could have easily been alleged at the time of
the original complaint, would defeat the purpose of the validation
statutes. (See Millbrae Sch. Dist. v. Superior Court (1989) 209
Cal.App.3d 1494, 1497; Friedland v. City of Long Beach (1998) 62
Cal.App.4th 835, 843.) We therefore decline to remand the
matter to allow Benabou’s proposed amendment. (See e.g.
Royalty Carpet Mills, Inc. v. City of Irvine (2005) 125 Cal.App.4th
1110, 1124 [denial of leave to amend complaint is appropriate
where “amendment would be futile because the amended
[complaint] would be barred by the statute of limitations”].) 5
5 We note the proposed amendment would be futile for the
additional reason that it lacks merit. Benabou takes issue with
the revenue projections in the ballot measure’s financial impact
statement but those projections were clearly identified as
estimates that “will fluctuate.” The other purportedly misleading
statements Benabou identifies—calling Measure ULA a “mansion
tax” and stating it would “affect only ‘millionaires and
billionaires’ ” were included in the section of the ballot materials
providing arguments for and against the proposed measure.
Those pages stated that the “[a]rguments printed on this page
are the opinions of the authors and are not checked for accuracy
by any City agency.”
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D. State Law Does Not Preempt Measure ULA
Benabou contends Measure ULA is preempted by the
Documentary Transfer Tax Act (Rev. & Tax. Code, § 11901 et
seq.) (the DTT Act). Again, we disagree.
The DTT Act authorizes local jurisdictions to adopt
ordinances taxing the transfer of real property at specified rates.
(CIM Urban REIT 211 Main St. (SF), LP v. City and County of
San Francisco (2022) 75 Cal.App.5th 939, 949 (CIM).) However,
article XI, section 5, subdivision (a) of the state Constitution
gives “charter cities ‘home rule’ power to legislate their own
municipal affairs.” (CIM, at p. 949.)
Under the home rule doctrine, “ ‘[c]harter cities are
specifically authorized by our state Constitution to govern
themselves, free of state legislative intrusion, as to those matters
deemed municipal affairs.’ ” (CIM, supra, 75 Cal.App.5th at pp.
949–950 .) “Generally, local tax ordinances are deemed to
address municipal affairs.” (Id. at p. 950.) Voters adopted
Measure ULA by relying on its charter city “home rule” power,
rather than the DTT Act, as its authority for the transaction tax.
Only when “a local measure is in actual conflict with a
state law, and the subject of the state law is a matter of statewide
concern and the state statute is not overbroad, the conflicting
local law must cede to the state law.” (CIM, supra, 75
Cal.App.5th at p. 950; see also Fielder, supra, 14 Cal.App.4th at
p. 143 [“ ‘In the event of a true conflict between a state statute
reasonably tailored to the resolution of a subject of statewide
concern and a charter city tax measure, the latter ceases to be a
“municipal affair” to the extent of the conflict and must yield.’ ”].)
Benabou lists several purported conflicts between the DDT
Act and Measure ULA. But even if a conflict existed, Measure
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ULA overrides conflicting state law under the home rule doctrine
because “imposition of a local transfer tax is a municipal affair
that does not implicate significant state interests.” (CIM, supra,
75 Cal.App.5th at 956; see also California Fed. Savings & Loan
Assn. v. City of Los Angeles (1991) 54 Cal.3d 1, 13 [levying taxes
is a municipal affair under the home rule doctrine].) Indeed,
“section 2 of the [DTT Act], which was not codified . . . recognizes
that . . . charter cities have authority under the home rule
doctrine to impose transfer taxes that do not conform to [the DTT
Act].” 6 (CIM, at p. 957.) Accordingly, because the “subject of
property taxes is not one of statewide concern, it is a municipal
affair which lies ‘“beyond the reach of legislative enactment”’ in
the case of charter cities.” (Fielder, supra, 14 Cal.App.4th at p.
146.) 7
E. There Are No Material Factual Issues That
Preclude Judgment on the Pleadings
On appeal, Benabou identifies two issues that he claims
cannot be resolved as a matter of law and that necessitate
evidentiary findings: (1) his allegation that Measure ULA was
motivated by class animus; and (2) his allegations that Measure
ULA violates the Equal Protection Clause. We disagree.
6 “It is well established that . . . an uncodified section of
legislation may be used to ascertain legislative intent.” (CIM,
supra, 75 Cal.App.5th at p. 959.)
7 Benabou does not challenge the application of the home
rule doctrine on appeal, and has thus forfeited this issue.
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As to the issue of animus, Benabou alleged generally in his
complaint that defendants were “motivated by improper animus,
comprising ‘class warfare’ against . . . ‘millionaires and
billionaires.’ ” The allegations of animus were included under the
complaint’s eleventh “cause of action” in which Benabou sought a
writ of mandate directing defendants to, among other things,
“cease and desist in the collection and enforcement of the ULA
tax” and “restore to [p]laintiffs any and all moneys that have
been unlawfully and/or improperly collected as ULA taxes.”
Animus is not an element of any of Benabou’s causes of
action, let alone his request for a writ of mandate. A material
fact that would prelude judgment on the pleadings, however,
“must relate to some claim or defense in issue under the
pleadings, and it must also be essential to the judgment in some
way.” (Riverside County Community Facilities Dist. No. 87-1 v.
Bainbridge 17 (1999) 77 Cal.App.4th 644, 653.) Whether the Los
Angeles electorate engaged in “class warfare” has no bearing on
any of Benabou’s claims.
We likewise reject Benabou’s contention that his Equal
Protection claim presents factual questions precluding judgment
on the pleadings. As discussed above, Benabou’s Equal
Protection claim is subject to rational basis review. “Whether a
statute or regulation is rational is, as a general rule, a legal
question for the courts to resolve, not a factual question requiring
an evidentiary hearing. In conducting a rational-basis equal
protection analysis, ‘ “a legislative choice is not subject to
courtroom factfinding and may be based on rational speculation
unsupported by evidence or empirical data.” ’ ” (In re Jenkins
(2010) 50 Cal.4th 1167, 1181, original italics.)
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F. Trial Court Did Not Abuse its Discretion by
Denying Leave to Amend
Leave to amend may be granted on appeal if there is a
reasonable possibility that the complaint’s defects can be cured
by amendment. (Zelig v. County. of Los Angeles (2002) 27 Cal.4th
1112, 1126.) “ ‘The burden of proving such reasonable possibility
is squarely on the plaintiff.’ ” (Ibid.)
Benabou falls woefully short of carrying his burden.
Instead, he simply attempts to shift his burden to this court by
claiming we should “grant leave to amend, sua sponte, regardless
of whether such claims were discussed in this [b]rief.” We decline
to do so. (See e.g. Durell v. Sharp Healthcare (2010) 183
Cal.App.4th 1350, 1371—1372 [rejecting appellant’s argument
that if the appellate court deems any claim inadequately pled, it
should grant him to leave to amend, explaining “ ‘[t]he reviewing
court is not required to make an independent, unassisted study
in search of error or grounds to support the judgment.’ ”].)
Because Benabou has failed to identify any allegations he could
add that might support a viable cause of action, we deny his
request for leave to amend his complaint.
G. Benabou’s Request for Judicial Notice of Post-
Judgment and Post-Election Publications
Benabou requests that we take judicial notice of certain
post-judgment and post-election publications whose authors
contend Measure ULA has not been effective and has had
unintended consequences. Contrary to Benabou’s assertions,
however, these documents are irrelevant to the issues on appeal.
Benabou claims that these documents show that Measure ULA
has reduced housing production and created fiscal drains that
25
undermine the stated legislative purpose of the initiative. But
under rational basis review, we look only at whether there are
plausible reasons for the classifications in the law, not whether
the stated legislative purpose was ultimately achieved. (City &
County of San Francisco v. Flying Dutchman Park (2004) 122
Cal.App.4th 74, 83.) The documents also do not demonstrate that
the ballot materials were misleading at the time of the election.
We therefore decline to take judicial notice of the post-judgment
and post-election documents. (See Hayward Area Planning Assn.
v. City of Hayward (2005) 128 Cal.App.4th 176, 182 [“Only
relevant material is a proper subject of judicial notice”].)
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DISPOSITION
The order of dismissal is affirmed. Respondents are
awarded their costs on appeal.
CERTIFIED FOR PARTIAL PUBLICATION
TAMZARIAN, J.
We concur:
MORI, Acting P.J.
VAN ROOYEN, J. *
* Judge of the San Luis Obispo Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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