McWilliams v. City of Long Beach

Filed 4/25/13

IN THE SUPREME COURT OF CALIFORNIA

JOHN W. McWILLIAMS, )

)

Plaintiff and Appellant, )

) S202037

v. )

) Ct.App. 2/3 B200831

CITY OF LONG BEACH, )

) Los Angeles County

Defendant and Respondent. ) Super. Ct. No. BC361469

____________________________________)

Code of Civil Procedure section 313 provides that the “general procedure”

for the presentation of claims for money or damages against a local government

entity is prescribed by the Government Claims Act (Gov. Code, § 810 et seq.). In

Ardon v. City of Los Angeles (2011) 52 Cal.4th 241, 251 (Ardon), we held that the

Government Claims Act permits a class action claim by taxpayers against a local

government entity for the refund of an unlawful tax “in the absence of a specific

tax refund procedure set forth in an applicable governing claims statute.” In the

case now before us, the defendant local government entity asserts that its

municipal code contains an “applicable governing claims statute” barring class

action claims for a tax refund. We find that a local ordinance is not a “statute”

within the meaning of the Government Claims Act and therefore affirm the Court

of Appeal.

BACKGROUND

The current dispute arises out of a class action lawsuit filed in November

2006 by plaintiff John W. McWilliams, a resident of defendant City of Long

1

Beach (the City), filed on behalf of himself and similarly situated individuals

challenging the City‟s telephone users tax (TUT) and seeking refund of the taxes

paid. McWilliams asserts that Long Beach Municipal Code section 3.68.50,

subdivision (d) exempted from the TUT all amounts that “are exempt from or not

subject to” the federal excise tax on telephone service and that the City has for

some time mischaracterized the charges subject to the federal excise tax.

The particulars of the mischaracterization are not at issue in this

proceeding. It is enough for our purposes to relate that the Internal Revenue

Service, following several adverse court decisions, announced in 2006 that it

would cease collecting the federal excise tax on long distance and bundled

services and allow federal taxpayers to obtain a refund by checking a box on their

federal tax returns. In August 2006, McWilliams served a demand on the City and

its officers to refund the money he asserted that the City had improperly collected

on certain telephone services “during the prior two years.” The City did not

respond. Instead, in September 2006, the City Council amended its TUT

ordinance to remove any reference to the federal excise tax—but did so without

seeking the approval of the voters under article XIII C of the California

Constitution, commonly known as Proposition 218. The complaint alleges that the

City unlawfully collected and continues to collect the TUT “on services that have

been conclusively determined to be non-taxable under the Federal Excise Tax.”1

The class action complaint asserted six causes of action: (1) declaratory

and injunctive relief challenging the collection of the TUT; (2) declaratory and

1 In November 2008, after the complaint was filed, voters in Long Beach

approved Measure G, which allowed the City to apply its tax to all charges for

intrastate, interstate, and international telephone communication services.

McWilliams does not challenge in this proceeding the collection of the TUT as

authorized by Measure G.

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injunctive relief challenging the City Council‟s amendment to the TUT ordinance;

(3) money had and received; (4) unjust enrichment; (5) a violation of due process

because of the City‟s failure to provide either a pre-deprivation or post-deprivation

remedy; and (6) a writ of mandate requiring the City to provide a pre-deprivation

or post-deprivation remedy. The City demurred to the complaint, arguing (among

other things) that Long Beach Municipal Code sections 3.48.060 and 3.68.160

disallow class claims for a refund. The trial court ruled that class claims for a

refund were barred under Woosley v. State of California (1992) 3 Cal.4th 758, and

sustained the demurrer with leave to amend. When McWilliams stated he would

not be amending his complaint, the trial court entered an order dismissing the case.

The Court of Appeal stayed the appeal for three years pending this court‟s

resolution of Ardon. In Ardon, we explained that Woosley v. State of California,

supra, 3 Cal.4th 758, had not erected a categorical bar to class claims for a tax

refund: “All that Woosley demands is that a court first examine the claims statutes

at issue in a claim for a taxpayer refund to determine whether the Legislature

contemplated a class claim under the applicable California code.” (Ardon, supra,

52 Cal.4th at p. 251.) Woosley did not analyze the applicability of Government

Code section 910.2 Ardon, on the other hand, did address the applicability of

section 910 and held that class claims for tax refunds against a local governmental

entity are permissible under section 910 “in the absence of a specific tax refund

procedure set forth in an applicable governing claims statute.” (Ardon, supra, 52

Cal.4th at p. 253.)

After lifting the stay, the Court of Appeal held that “[t]he City is not

authorized under the Government Claims Act to establish its own claims

2 Further statutory references are to the Government Code unless otherwise

noted.

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procedure for TUT refunds” and that “McWilliams can file a class claim for a

TUT refund” under Ardon, supra, 52 Cal.4th 241. Accordingly, the Court of

Appeal reversed the trial court‟s order with respect to the first, second, third, and

fourth causes of action.

We granted the City‟s petition for review to decide (1) whether the

exception to the Government Claims Act for “[c]laims under . . . [a] statute

prescribing procedures for the refund . . . of any tax” in section 905, subdivision

(a), excludes local charter provisions and ordinances prescribing procedures for a

tax refund; (2) if so, whether the application of the Government Claims Act to

local tax refund claims violates the home rule taxing power of charter cities; and

(3) whether article XIII, section 32 of the California Constitution requires that a

tax refund proceeding be expressly authorized by the legislative body of the local

government entity.

DISCUSSION

The Government Claims Act (Act) “established a standardized procedure

for bringing claims against local governmental entities.” (Ardon, supra, 52

Cal.4th at p. 246; see Stats. 1959, ch. 1724, § 1, p. 4133, enacting former § 700 et

seq.; now § 900 et seq.) The purpose of the Act “is to provide the public entity

sufficient information to enable it to adequately investigate claims and to settle

them, if appropriate, without the expense of litigation.” (City of San Jose v.

Superior Court (1974) 12 Cal.3d 447, 455.) On August 11, 2006, prior to filing

this class action, McWilliams served a demand on the City in the form of a letter

on behalf of himself and all similarly situated taxpayers seeking a refund of the

TUT. The question in this appeal is whether McWilliams was entitled to present

this claim on behalf of the entire class or, instead, whether each member of the

putative class must present an individual claim prior to filing suit.

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According to the Act, “all claims for money or damages against local

public entities” are to be presented “in accordance with Chapter 1 (commencing

with Section 900) and Chapter 2 (commencing with Section 910),” except as

provided in section 905. (§ 905.) One of the exceptions in section 905 is for

“[c]laims under the Revenue and Taxation Code or other statute prescribing

procedures for the refund . . . of any tax . . . or any portion thereof . . . .” (§ 905,

subd. (a).) When a claim is excepted from the Act by section 905 and is “not

governed by any other statutes or regulations expressly relating thereto,” the claim

“shall be governed by the procedure prescribed in any charter, ordinance or

regulation adopted by the local public entity.” (§ 935, subd. (a).)

We discussed the operation of these provisions in Ardon. The claim in

Ardon, like the claim here, involved a class action lawsuit for refund of a TUT, but

(unlike the City here) the defendant City of Los Angeles did not identify any

municipal ordinance that prescribed procedures for a refund of the tax. (Ardon,

supra, 52 Cal.4th at p. 246, fn. 2.) Ardon held that claims for tax refunds against a

local governmental entity, including class claims, are permitted by section 910 “in

the absence of a specific tax refund procedure set forth in an applicable governing

claims statute.” (Ardon, supra, 52 Cal.4th at p. 253.) Because Ardon‟s particular

claim “did not involve any applicable municipal code or statute governing claims

for refunds” (id. at p. 251), we did not decide whether a local charter provision or

municipal ordinance could qualify as a “statute prescribing procedures for the

refund . . . of any tax” within the meaning of section 905, subdivision (a). (See

Ardon, supra, 52 Cal.4th at p. 246, fn. 2.)

In this case, the City contends that class actions seeking refunds of its local

taxes are excepted from the Act by Long Beach Municipal Code sections

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3.48.0603 and 3.68.160,4 which assertedly bar class actions for refunds. Whether

the claim here is excepted from the Act thus depends on whether it is a “[c]laim[]

under . . . [a] statute prescribing procedures for the refund . . . of any tax . . . .”

(§ 905, subd. (a), italics added.) The City argues that an ordinance qualifies as a

3 Long Beach Municipal Code section 3.48.060 provides:

“The refund may be made to the person who paid the money under any of

the following conditions:

“A. If the amount paid is one thousand dollars ($1,000.00) or less and if

the department head to which the money was paid authorizes the refund in

accordance with prior written authorization of and subject to conditions imposed

by the city manager;

“B. If the amount paid is ten thousand dollars ($10,000.00) or less and if

the department head to which the money was paid, with the approval of the city

attorney, authorizes the refund; provided, however, that refunds of one thousand

dollars ($1,000.00) or less made in accordance with the provisions of Subsection

A. of this section shall not require the approval of the city attorney;

“C. If the amount paid is more than ten thousand dollars ($10,000.00) and

the department head to which the money was paid, with the approval of the city

attorney and the city council, authorizes the refund.”

4 Long Beach Municipal Code section 3.68.160 provides:

“A. Whenever the amount of any tax has been overpaid or paid more than

once or has been erroneously or illegally collected or received by the city clerk or

city treasurer-city tax collector under this chapter, it may be refunded as provided

in this section.

“B. A service supplier may claim a refund or take as credit against taxes

collected and remitted the amount overpaid, paid more than once, or erroneously

or illegally collected or received, when it is established in a manner prescribed by

the city treasurer-city tax collector that the service user from whom the tax has

been collected did not owe the tax; provided, however, that neither a refund nor a

credit shall be allowed unless the amount of the tax so collected has either been

refunded to the service user or credited to charges subsequently payable by the

service user to the person required to collect and remit.

“C. No refund shall be paid under the provisions of this section unless the

claimant established his or her right thereto by written records showing

entitlement thereto.

“D. No refund shall be paid under the provisions of this section unless the

claimant has submitted a claim pursuant to this section.”

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“statute” within the meaning of section 905, subdivision (a). McWilliams, on the

other hand, contends that the word “statute” in this provision is limited to laws

enacted by the Legislature, Congress, or the People.

The Legislature has provided definitions of many of the terms in the Act,

including “statute.” These definitions govern the construction of the Act “[u]nless

the provision or context otherwise requires.” (§ 810.) We therefore turn to section

811.8, which defines a “statute” as “an act adopted by the Legislature of this State

or by the Congress of the United States, or a statewide initiative act.” This

definition, as the City concedes, excludes local charters and ordinances. (Cf.

Societa per Azioni de Navigazione Italia v. City of Los Angeles (1982) 31 Cal.3d

446, 463 [provision of the Act limiting immunity of a public entity to that

“provided by statute” (§ 815) “does not include local ordinances or regulations”].)

The City, though, contends that the “context otherwise requires” a more expansive

definition of the term “statute” as used in section 905, subdivision (a)—one that

would encompass local legislation. We disagree.

When the Legislature intended a broader scope than the statutory definition

of “statute” in section 905, it used broader language. Subdivision (b) of section

905, for example, excepts from the Act “[c]laims in connection with which the

filing of a notice of lien, statement of claim, or stop notice is required under any

law relating to liens of mechanics, laborers, or materialmen,” and subdivision (e)

excepts “claims for any form of public assistance under the Welfare and

Institutions Code or other provisions of law relating to public assistance

programs.” (Italics added.) Had the Legislature similarly intended to except a

broader range of claims in subdivision (a), one assumes it would have used one of

these formulations. (Cf. Zalkind v. Ceradyne, Inc. (2011) 194 Cal.App.4th 1010,

1035 [“When the Legislature intends the word „complaint‟ to include „cross-

complaint,‟ it says so.”].)

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Moreover, other parts of the Act reveal that the Legislature understood the

terms “statute,” ordinance,” and “charter” to mean different things. For example,

section 935, subdivision (a) provides that claims against a local entity for money

or damages “which are excepted by Section 905 . . . and which are not governed

by any other statutes or regulations expressly relating thereto, shall be governed by

the procedure prescribed in any charter, ordinance, or regulation adopted by the

local public entity.” Having used these terms for their distinct meanings in one

part of Act, it is unlikely the Legislature intended “statute” to encompass all three

meanings in section 905, subdivision (a).

Furthermore, interpreting the word “statute” in accordance with the

statutory definition does not render the term meaningless or inoperative in section

905, nor does it lead to absurd consequences. A number of “other statutes,”

outside the Revenue and Taxation Code, prescribe the procedures for the refund of

a local “tax, assessment, fee, or charge.” (Gov. Code, § 905, subd. (a); see, e.g.,

Bus. & Prof. Code, § 5499.14; Elec. Code, § 13307, subd. (c); Gov. Code,

§§ 66001, subds. (d), (e), 66020; Health & Saf. Code, § 5472; Mil. & Vet. Code,

§ 890.3, subd. (b)(2).) It is therefore reasonable to interpret the exemption for

“[c]laims under the Revenue and Taxation Code or other statute prescribing

procedures for the refund . . . of any tax, assessment, fee, or charge” (Gov. Code, §

905, subd. (a)) to encompass only those claims that arise under the Revenue and

Taxation Code or any other statute providing for a refund. Accordingly, neither

“the provision or context otherwise requires” a broader definition of the word

“statute.” (See Gov. Code, § 810.)

The existence of these other statutes distinguishes the word “statute” in

section 905, subdivision (a) from the word “regulation” in section 935, subdivision

(a). That section provides that claims for money or damages against a local public

entity that are excepted by section 905, and that are not governed expressly by any

8

other statutes or regulations, “shall be governed by the procedure prescribed in any

charter, ordinance or regulation adopted by the local public entity” (§ 935, subd.

(a), italics added)—even though the Act‟s definition of “regulation” encompasses

only regulations promulgated by a state or federal agency. (§ 811.6.) In that

circumstance, where the word “regulation” would otherwise be inoperative (but

see Johnson v. San Diego Unified School Dist. (1990) 217 Cal.App.3d 692, 699

[“Although a school district constitutes a „state agency‟ . . . it is a „local public

entity‟ under the claim-filing requirements of the Act . . . .”]), the context may

require a definition other than the statutory definition. (Hassan v. Mercy

American River Hospital (2003) 31 Cal.4th 709, 715-716.) But that is not the

situation with the word “statute” in section 905, subdivision (a).

The case law on which the City relies is similarly distinguishable. In those

cases, the Court of Appeal determined that the statutory definition of a given term

“is superseded when it obviously conflicts with the Legislature‟s subsequent use of

the term in a different statute.” (Diamond View Limited v. Herz (1986) 180

Cal.App.3d 612, 618, italics added; see also Boy Scouts of America National

Foundation v. Superior Court (2012) 206 Cal.App.4th 428, 446 [holding that the

word “person” in Code Civ. Proc., § 340.1, subd. (a)(1) should not be interpreted

to include a corporate entity notwithstanding Code Civ. Proc., § 17, subd. (a);

because subdivision (a)(2) and (a)(3) refer to liability “against any person or

entity,” reliance on the statutory definition “would require us to insert the word

„entity‟ in section 340.1, subdivision (a)(1)” or “ignore the word „entity‟ in

subdivision (a)(2) and (3)”]; Watershed Enforcers v. Department of Water

Resources (2010) 185 Cal.App.4th 969, 980 [in determining whether the

Department was a “person” within the meaning of Fish & G. Code, § 2080

notwithstanding Fish & G. Code, § 67, the court relied on the fact that other parts

of the state Endangered Species Act “emphasize[d]” the Act‟s application to

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public agencies, including a provision exempting public agencies from Fish & G.

Code, § 2080 in certain circumstances; “It is illogical to expressly exempt an

entity from a prohibition that did not apply to it in the first place”]; American

Liberty Bail Bonds, Inc. v. Garamendi (2006) 141 Cal.App.4th 1044, 1054

[provision allowing the Insurance Commissioner to suspend the license of a

“subject person” from employment or participating in the conduct of the business

necessarily applied only to natural persons notwithstanding Ins. Code, § 19;

“otherwise the subdivision does not make sense”].) Interpreting “statute” in

Government Code section 905, subdivision (a) in accordance with the statutory

definition, by contrast, does not present an equivalent conundrum.

The absence of ambiguity in the statutory language dispenses with the need

to review the legislative history. (People v. Albillar (2010) 51 Cal.4th 47, 56.)

We note, however, that the legislative history does not support the City‟s

contention that the Legislature intended to preserve plenary control by local

governments over the procedures for local tax refunds. (See Volkswagen Pacific,

Inc. v. City of Los Angeles (1972) 7 Cal.3d 48, 62 [“ „statute‟ does not refer to

ordinance . . . unless the context of section 905, subdivision (a), „otherwise

requires.‟ There is nothing in the legislative history to suggest that „statute‟ within

section 905, subdivision (a), is to have a special meaning unique to that

section.”].)

“As originally proposed, the standardized procedures of the Act embodied

in Government Code section 910 would not have applied to „[c]laims under the

Revenue and Taxation Code or other provisions of law prescribing procedures for

the refund . . . of any tax . . . .‟ ” (Ardon, supra, 52 Cal.4th at p. 247, quoting

Recommendation and Study relating to The Presentation of Claims Against Public

Entities (Jan. 1959) 2 Cal. Law Revision Com. Rep. (1959) p. A-12 (1959 Study).)

The Law Revision Commission reasoned that for tax refund claims, as with claims

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required by the mechanics‟ and materialmen‟s lien laws and claims for aid under

public assistance programs, “the basic objectives of early investigation to prevent

litigation and discourage false claims which support a uniform procedure for tort

and inverse condemnation claims are not applicable; and orderly administration of

the substantive policies governing the enumerated types of claims strongly

suggests that claims procedure should be closely and directly integrated into such

substantive policies. Obvious and compelling reasons appear for gearing tax

refund claims to assessment, levy and collection dates and procedures;

establishing special modes for protecting mechanics and material suppliers on

public projects; [and] providing an uncomplicated routine procedure for

processing the tremendous volume of salary, pension, workmen‟s compensation

and public assistance claims . . . .” (1959 Study, supra, 2 Cal. Law Revision Com.

Rep., at p. A-117.)

Had the Legislature actually enacted the version proposed by the Law

Revision Commission, we could conclude that charters and ordinances concerning

refunds of local taxes clearly fall within the category of “ „[c]laims under the

Revenue and Taxation Code or other provisions of law prescribing procedures for

the refund . . . of any tax . . . .‟ ” (Ardon, supra, 52 Cal.4th at p. 247.) But as we

recently observed in Ardon, supra, 52 Cal.4th at page 247, “the Legislature

specifically rejected this proposal and instead enacted former section 703,

subdivision (a) (now § 905, subd. (a)), which exempted from section 910 „[c]laims

under the Revenue and Taxation Code or other statute prescribing procedures for

the refund . . . of any tax . . . .‟ (Stats. 1959, ch. 1724, § 1, pp. 4133-4134, italics

added.)” The significance of the Legislature‟s rejection of the commission‟s

proposed language concerning tax refund claims is accentuated by the fact the

Legislature, in other subdivisions of former section 703, enacted verbatim the

commission‟s language concerning claims relating to mechanics‟ liens as well as

11

the commission‟s language concerning claims relating to public assistance.

(Compare 1959 Study, supra, 2 Cal. Law Revision Com. Rep. at p. A-12 with

Stats. 1959, ch. 1724, § 1, p. 4134.) That the Legislature retained the

commission‟s language concerning “any provision of law” or “other provisions of

law” in those two subdivisions (Stats. 1959, ch. 1724, § 1, p. 4134) but deleted

equivalent language in the subdivision concerning local tax refunds is probative of

the Legislature‟s intent with respect to claims involving refund of local taxes.

(See California Assn. of Psychology Providers v. Rank (1990) 51 Cal.3d 1, 17 [“

„[t]he rejection by the Legislature of a specific provision contained in an act as

originally introduced is most persuasive to the conclusion that the act should not

be construed to include the omitted provision‟ ”].)

The City asserts that the change in language between the Commission‟s

recommendation and the actual statutory text is of no concern in that, at the time

former section 703 was enacted, contemporary understanding of the word

“statute” encompassed local charters and ordinances. (See People v. Cruz (1996)

13 Cal.4th 764, 775 [“The words of a statute are to be interpreted in the sense in

which they would have been understood at the time of the enactment”].) As proof

of this contemporary understanding, the City relies on an observation by Professor

Van Alstyne in the accompanying Study Relating to the Presentation of Claims

Against Public Entities: “There seems to be no adequate generic word for

referring collectively to statutes, city charters and ordinances. Since claims are

governed by legal requirements of all three types, the phrases „claims statutes‟ and

„claims provisions‟ are used interchangeably herein to refer to all forms of legal

claim presentation requirements as a class.” (1959 Study, supra, 2 Cal. Law

Revision Com. at p. A-18.) But even if we assume that this represented the

common understanding of the phrases “claims statutes” and “claims provisions” in

1959, those phrases appear nowhere in the Law Revision Commission‟s

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recommended statutory text, nor do they appear in the Act as enacted in 1959 or in

its current form. Moreover, Professor Van Alstyne‟s contention that no generic

word existed to encompass statutes, city charters, and ordinances is belied by the

Legislature‟s use of the word “enactment” in various statutory provisions in

existence at that time. (See, e.g., Civ. Code, § 1630; Gov. Code, § 22000; cf. Gov.

Code, § 810.6 [“ „Enactment‟ means a constitutional provision, statute, charter

provision, ordinance or regulation”].) As we observed in Volkswagen Pacific, Inc.

v. City of Los Angeles, supra, 7 Cal.3d at page 62, “It would appear that if the

Legislature intended to except all tax refund actions, rather than just those arising

under state law, it would have used „enactment‟ rather than „statute.‟ ” We

therefore do not find Professor Van Alstyne‟s specification of the meaning of

“claims statute” persuasive as to the meaning of “statute” in Government Code

former section 703 or in present section 905.

For the same reasons, we are not persuaded by the City‟s reliance on a

smattering of cases from the 1950‟s, all from a single panel of Division One of the

First Appellate District, that used “claims statute” or “claim statute” to encompass

San Francisco claiming ordinances. (See Parodi v. City & County of San

Francisco (1958) 160 Cal.App.2d 577, 580; Cruise v. City & County of San

Francisco (1951) 101 Cal.App.2d 558, 562; Germ v. City & County of San

Francisco (1950) 99 Cal.App.2d 404, 414.)

When considered in light of the legislative history, the case law is not

supportive of the City‟s construction of section 905, subdivision (a), either. The

City relies on Pasadena Hotel Development Venture v. City of Pasadena (1981)

119 Cal.App.3d 412 (Pasadena Hotel), which declared that section 905,

subdivision (a) excepted all claims for the refund of a local tax, and on Batt v. City

and County of San Francisco (2007) 155 Cal.App.4th 65 (Batt), which relied on

Pasadena Hotel. But Pasadena Hotel was based explicitly on an erroneous

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premise. The Court of Appeal there asserted that the reference in section 905,

subdivision (a) to claims for a tax refund under “ „the Revenue and Taxation Code

or other statute‟ is not a limitation upon the type of tax claims excepted from the

coverage” of the Act, in that “the Law Revision Commission ha[d] stated that it

excluded from the scope of the unified claims statute then proposed by the

Commission all „claims for tax exemption, cancellation or refund‟ ” and this

subdivision was “enacted in the form proposed by the commission,” such that “the

intent of the commission in regard to [its] meaning may be deemed to be the intent

of the Legislature.” (Pasadena Hotel, supra, 119 Cal.App.3d at p. 415, fn. 3.)

The Pasadena Hotel Court was mistaken. As demonstrated above, the Legislature

did not codify the language proposed by the commission with respect to claims for

tax refunds; rather, the Legislature narrowed its scope by substituting “other

statute” for “other provisions of law.” Moreover, not only did the Pasadena Hotel

court ignore the Legislature‟s modification, it never mentioned the presumptively

applicable definition of “statute” set forth in section 811.8.

Batt, in a rather brief analysis, rejected the taxpayer‟s argument that

Pasadena Hotel was wrongly decided and dismissed as “dictum” our observation

in Volkswagen Pacific, Inc. v. City of Los Angeles, supra, 7 Cal.3d at page 62, that

“ „[i]t would appear that if the Legislature intended to except tax refund actions,

rather than just those arising under state law, it would have used “enactment”

rather than “statute.” ‟ ” (Batt, supra, 155 Cal.App.4th at p. 83 & fn. 10.)

However, Batt, too, failed to acknowledge the Legislature‟s modification of the

Law Revision Commission‟s proposed language concerning tax refunds as well as

the definition of “statute” set forth in section 811.8. Batt did cite two cases that

enforced local ordinances governing tax refund actions, Flying Dutchman Park,

Inc. v. City and County of San Francisco (2001) 93 Cal.App.4th 1129 and Howard

Jarvis Taxpayers Ass’n v. City of Los Angeles (2000) 79 Cal.App.4th 242, but

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neither case ever considered the argument that the Act applied. Indeed, neither

one even cited sections 811.8, 905, or 910. “ „It is axiomatic that cases are not

authority for propositions not considered.‟ ” (In re Marriage of Cornejo (1996) 13

Cal.4th 381, 388.)

By contrast, County of Los Angeles v. Superior Court (Oronoz) (2008) 159

Cal.App.4th 353 considered the definition of “statute” set forth in section 811.8 as

well as the views expressed on that issue in Volkswagen Pacific, Inc. v. City of Los

Angeles, supra, 7 Cal.3d 48, and concluded that a county ordinance “is not a

„statute‟ within the meaning of Government Code section 905, subdivision (a) and

therefore does not invoke section 905, subdivision (a).” (Oronoz, supra, 159

Cal.App.4th at p. 361.) For the reasons stated above, we agree with Oronoz. Our

review of the text and legislative history confirms that the applicable definition of

“statute” in section 905, subdivision (a) is that set forth in section 811.8, which

excludes local charter provisions and ordinances. We therefore disapprove

Pasadena Hotel Development Venture v. City of Pasadena, supra, 119 Cal.App.3d

412, and Batt v. City and County of San Francisco, supra, 155 Cal.App.4th 65, to

the extent they are inconsistent with this conclusion.

The City briefly presents two constitutional arguments in support of local

control over tax refunds notwithstanding the scope of section 905, subdivision (a),

but neither has merit.

According to the City, charter cities have constitutional authority to “make

and enforce all ordinances and regulations in respect to municipal affairs” (Cal.

Const., art. XI, § 5, subd. (a)), even against inconsistent state laws. The power to

levy local taxes in support of local expenditures, of course, is a “municipal affair.”

(California Fed. Savings & Loan Assn. v. City of Los Angeles (1991) 54 Cal.3d 1,

13.) Yet, as the City acknowledges, the California Constitution also provides that

“[t]he Legislature may prescribe procedure for presentation, consideration, and

15

enforcement of claims against counties, cities, their officers, agents, or

employees.” (Cal. Const., art. XI, § 12.) Section 910 is one such provision, but

the Legislature has set forth other procedures to govern even those local tax refund

actions excepted from section 910, including claims relating to the refund of

property taxes (Rev. & Tax. Code, §§ 5097, 5140), sales taxes (Rev. & Tax Code,

§§ 6932, 6933), and other assessments (e.g., Bus. & Prof. Code, § 5499.14). (See

also Volkswagen Pacific, Inc. v. City of Los Angeles, supra, 7 Cal.3d at p. 62 & fn.

7.) The City urges us, almost in passing, to declare a conflict between these two

constitutional provisions and to favor the home rule power, because “[t]o rule

otherwise is to eviscerate the taxing power our Constitution confers on charter

cities.” But the City‟s proposal ignores our duty to harmonize constitutional

provisions where possible. (City and County of San Francisco v. County of San

Mateo (1995) 10 Cal.4th 554, 563.) A review of the history of these constitutional

provisions reveals that no conflict exists.

The predecessor version of article XI, section 12 of the California

Constitution stated that “[n]o provision of this article shall limit the power of the

Legislature to prescribe procedures governing the presentation, consideration and

enforcement of claims against chartered counties, chartered cities and counties,

and chartered cities or against officers, agents and employees thereof.” (Cal.

Const., art. XI, former § 10, as adopted Nov. 8, 1960, italics added.) The home

rule power, then as now, was set forth in the same article. (Cal. Const., art. XI,

§ 5; see art. XI, former §§ 6, 8, 8 1/2, 9.) Thus, under the predecessor provision, it

was understood that the home rule power did not limit the power of the Legislature

to prescribe procedures governing claims against chartered local governments,

such as the City. In 1970, the provision was amended to its current form, but the

deletion of the reference to chartered cities, chartered counties, and chartered cities

and counties was not intended to change the scope of the Legislature‟s power with

16

respect to chartered entities. Rather, the intent was to clarify the Legislature‟s

power over “all counties and cities in contrast to existing constitutional provisions

which apply only to charter counties and cities.” (Minutes, Cal. Const. Revision

Com. Meeting of Sept. 14-15, 1967, p. 10; see also Assem. Com. on Const.

Amend., Analysis of Art. XI (Feb. 21, 1968) p. 8 [Section 12 “is intended to

replace existing Section 10 [citation omitted], without any change in meaning”].)

In short, the home rule protections in the Constitution do not limit the

Legislature‟s authority to prescribe procedures governing claims against chartered

local government entities.

The City argues next that the second sentence of article XIII, section 325 of

the California Constitution “means that the relevant Legislature—the Long Beach

City Council or the City‟s people acting via initiative—must expressly authorize

the class claim if [McWilliams] is to pursue it.” The City‟s argument is

inconsistent with what we said in Ardon: “[E]ven assuming article XIII, section

32 is equally applicable to tax actions against local governments, we have already

determined that section 910 provides the necessary legislative authorization for

class claims of taxpayer refunds against local government entities.” (Ardon,

supra, 52 Cal.4th at p. 252.) Indeed, Ardon went on to conclude that “neither the

explicit language nor the policy underlying article XIII, section 32” barred a class

refund action, notwithstanding the absence of a local charter provision or

ordinance authorizing class refund actions. (Ardon, supra, 52 Cal.4th at p. 252.)

5 Article XIII, section 32 provides: “No legal or equitable process shall issue

in any proceeding in any court against this State or any officer thereof to prevent

or enjoin the collection of any tax. After payment of a tax claimed to be illegal, an

action may be maintained to recover the tax paid, with interest, in such manner as

may be provided by the Legislature.”

17

Finally, we do not believe that the 10 states6 identified by the City that have

barred or limited class actions for tax refunds compel us to create a similar rule

here. As Ardon makes clear, California has not adopted such a bar—and

McWilliams has identified six other states7 that, like California, allow class action

tax refund claims in various circumstances. In any event, the issue here is not

whether class actions for tax refunds should be permitted, but which level of

government—the state or the local public entity—should define the procedures

governing an action for refund of a local tax. We hold that except as to “[c]laims

under the Revenue and Taxation Code or other statute prescribing procedures for

the refund . . . of any tax,” the Legislature has determined that the Government

Claims Act applies. (§ 905.)

6 Georgia (Ga. Code Ann., § 48-2-35(c)(5)), Missouri (State ex rel. Lohman

v. Brown (Mo.Ct.App. 1997) 936 S.W.2d 607, 610), Nebraska (Boersma v. Karnes

(Neb. 1988) 417 N.W.2d 341, 344), Pennsylvania (Dunn v. Board of Property

Assessment (Pa.Commw.Ct. 2005) 877 A.2d 504, 512), South Dakota (Pourier v.

S.D. Dept. of Rev. & Reg. (S.D. 2010) 778 N.W.2d 602, 605-606), and Tennessee

(Wicker v. Commissioner (Tenn.Ct.App. 2010) 342 S.W.3d 35, 42-43) do not

allow class actions for tax refunds.

Illinois (Jones v. Department of Revenue (Ill.App.Ct. 1978) 377 N.E.2d

202, 204), Indiana (Ziegler v. Ind. Dept. of State Revenue (Ind.Tax Ct. 2003) 797

N.E.2d 881, 885-889), New York (Neama v. Town of Babylon (N.Y.App.Div.

2005) 796 N.Y.S.2d 644, 646) and Washington (Lacey Nursing Center v. Dept. of

Revenue (Wn. 1995) 905 P.2d 338, 343) require a prior protest or claim by each

individual in the class or some other individualized identification of the tax paid

and reasons why it should be reduced or abated.

7 Arizona (Ariz. Dept. of Revenue v. Dougherty (Ariz. 2001) 29 P.3d 862,

864-865), Colorado (Buckley Powder Co. v. State (Colo.Ct.App. 2002) 70 P.3d

547, 554-555), Kentucky (City of Somerset v. Bell (Ky.Ct.App. 2005) 156 S.W.3d

321, 326-327), Massachusetts (see American Trucking v. Secretary of Admin.

(Mass. 1993) 613 N.E.2d 95, 105), New Jersey (American Trucking Ass’n v. Kline

(1986) 8 N.J. Tax 181, 187-189), and North Carolina (Bailey v. State (N.C. 1998)

500 S.E.2d 54, 73-76) allow class tax refund actions.

18

DISPOSITION

The judgment of the Court of Appeal is affirmed.

BAXTER, J.

WE CONCUR:

CANTIL-SAKAUYE, C.J.

KENNARD, J.

WERDEGAR, J.

CHIN, J.

CORRIGAN, J.

LIU, J.

19

See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion McWilliams v. City of Long Beach

__________________________________________________________________________________

Unpublished Opinion XXX NP opn. filed 3/28/12, 2d Dist., Div. 3

Original Appeal

Original Proceeding

Review Granted

Rehearing Granted

__________________________________________________________________________________

Opinion No. S202037

Date Filed: April 25, 2013

__________________________________________________________________________________

Court: Superior

County: Los Angeles

Judge: Anthony J. Mohr

__________________________________________________________________________________

Counsel:

Wolf Haldenstein Adler Freeman & Herz, Francis M. Gregorek, Rachele R. Rickert, Marisa C. Livesay;

Chimicles & Tikellis, Nicholas E. Chimicles, Timothy N. Mathews; Tostrud Law Group, Jon Tostrud;

Cuneo Gilbert & Laduca and Sandra W. Cuneo for Plaintiff and Appellant.

Lieff, Cabraser, Heimann & Bernstein, Joy A. Kruse; Lockridge Grindal Nauen, Kate Baxter-Kauf,

Elizabeth R. Odette; and Edward M. Teyssier for Consumer Action, National Association of Shareholder

and Consumer Attorneys and Tax Foundation as Amici Curiae on behalf of Plaintiff and Appellant.

Robert E. Shannon, City Attorney, J. Charles Parkin, Assistant City Attorney, Monte H. Machit, Principal

Deputy City Attorney; Colantuono & Levin, Michael G. Colantuono, Sandra J. Levin,Tiana J. Murillo and

Jon R. Di Christina for Defendant and Respondent.

Dennis J. Herrera, City Attorney (San Francisco), Julie Van Nostern, Chief Tax Attorney, and Peter J.

Keith, Deputy City Attorney, for League of California Cities and California State Association of Counties

as Amici Curiae on behalf of Defendant and Respondent.

Counsel who argued in Supreme Court (not intended for publication with opinion):

Francis M. Gregorek

Wolf Haldenstein Adler Freeman & Herz

750 B Street, Suite 2770

San Diego, CA 92101

(619) 239-4599

Michael G. Colantuono

Colantuono & Levin

300 S. Grand Ave., Suite 2700

Los Angeles, CA 90071-3137

(213) 542-5700