# Appendix — Walter Fleisher Co. v. County of Los Angeles > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1177%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1980 - **Citation:** 446 U.S. 917 ## Text APPENDIX IN THE SUPREME COURT OF THE UNITED STATES October Term, 1979 No. 79-700 WALTER FLEISHER CO., INC., Petitioner, VS. COUNTY OF LOS ANGELES and CITY OF LOS ANGELES, Respondents. On Writ of Certiorari to the Court of Appeal of th: State of California, Second Appellate District PETITION FOR CERTIORARI FILED OCTOBER 31, 1979 CERTIORARI GRANTED APRIL 28, 1980 Item APPENDIX LIST OF CONTENTS First Amendea Complaint for Recovery of Ad Valorem Property Taxes (filed by Plaintiff June 13, 1977, in Los Angeles Superior Court Answer to First Amended Complaint (filed by Defendants on or about July 15, 1977, Los Angeles Superior Court Notice of Motion for Summary Judgment; Declarations in Support of Motion; Memorandum of Points and Authorities in Support of Motion (filed by Plain- tiff November 14, 1977, in Los Angeles Superior Court Stipulation of Facts for Motion for Summary Judgment (filed by Defendants on or about December 22, 1977, in the Los Angeles Superior Court Page A-6 Points and Authorities in Opposi- tion to Motion for Summary Judgment; Declaration in Opposi- tion to Motion for Summary Judgment (filed by Defendants on or about December 23, 1977, in the Los Angeles Superior Court A-35 Declaration of Joseph \W. Grant (filed by Defendant on or about December 23, 1977, in Los Angeles Superior Court) A-60 Minute Order (filed by the court February 9, 1978, in Los Angeles Superior Court) A-62 Summary Judgment (filed by the court March 7, 1978, in Los Angeles Superior Court A-63 Opinion of the Court of Appeal of the State of California, Second Appellate District, Division Four, filed July 25, 1979, has been omitted in printing this Appendix. It appears on pages B-1 through B-7 of the Appendix to the printed Petition for Writ of Certiorari, RELEVANCE POCKET BN PRE, IN ‘THE PROCRKEDING BELOW (tC hinersebegticadl Pict) Phevnny Pornbes - Piret Arnended © crnpleint fron Berrryeony of Ad Jalonern Prepon ky ‘loves CT racy Nrvprede u i idee} “wipenion © oevpeeky bine 13, 1977 # Anger ter Binst Areesnibest t nrapeicint (yj rg / righe Jess bibes} wiperi¢on © eneby fhily 15, 3977 H SSerbiees eo Mieerobicony Peer rirnmnaey Pndgerment, freer larotions in .y peor yi Mievticom: Memaonancdiurt oF Prints one Authorities ir r i bee) C b ed : f . . ’ 7 piper rif Siraticm tj as rr see or a f 4 Angeles wiperion © mint) >. oa cr P P Vs i e 4. rie rine gh Cet Artin, For f ! . , - , - se ” - MTA Jf 4 mgrie ser , —————— Craig v. County of Los Angeles, 51 Cal. App. 3d 909, 124 Cal. Rptr. 621 (1975)). The plaintiff argues that the section was meant to give im- porters an even broader exemption than that provided them under Low v. Austin, 80 U.S. (13 Wall.) 29, 20 L. Ed. 517 (1871), (recently overruled by the U. S. Supreme Court in Michelin Tire Corp. v. Wages, 423 U.S. 276, 46 L.Ed. 2d 495, 96 S.Ct. 535 (1976)). The breadth of the plaintiff's interpretation can be seen by the fact that all repackaged goods would not even appear to receive the immunity under Low v, Austin, supra, while they would under plaintiff's version of Section 225. Most of the goods of plaintiff would be taxable pursuant to Craig v. County of Los Angeles, supra. 2. The plaintiff next contends that the Free Port'' interpretation is supported by various administrative documents. (Plaintiff's Motion p. 15.) " 3. The plaintiff argues that the Legis- lature has the power to exempt, and that any doubt that that power exists should be resolved in favor of its existence. (Plaintiff's Motion pp. 19, et seq.) 4, The plaintiff also contends that the Legislature may exempt businesses generally and also may exempt business which import while not exempting businesses dealing in U.S. goods, (Plaintiff's Motion p. 18.) A-36 a Dy The plaintiff next relien on the pending opinion in Athantie Hiehfield Co.v, County of Tos Angeles, ON Cal, App. dd Gadvanee) 105 (L977) tor the propodnttion that the Depiatuture' ss determiunatron that come property choud be exeaapl mist be ve cepted by the court. (C?'bainatitfi's Motion ps. 19.) , ‘The plaintiff next cites Cased support bop the tele that lepinhative aeth are presumed commtitutional Ci hammtilf's Motton ps. bo) eo ‘The pelaimtill states that theme asa penerab oube that ail taxing stataterd: cae tobe commbrued to haveor of the taxpayer, ‘They rely for thin proposition on cored whieh state that on exerip thom cheat be taterpreted Commimitenthy wath the lepinhative doitent derpite the pomeral rate that “toterbent poecitanap exemption Pron taxation are " rdriethy canitrued., oo. . CU bivaretadt ts: Metron pr. OL) i, Phi pebaieitil th ree xt melress on Lanprigree of the otatute whtelh maken ca exception an the eNetapelpen, The eX ception denen protection te proooubo chestined for qaantbac ture, Ihe Cex ception tor thre exemption! slates Chat repoachipunp, ete., doeennot conmititate oa daanubheetaring process. The phitmtith combendes that the Toepisdature showed ats bnfenmt fo eketipt pooods, not otherwise tiimiunme on exennpet bey thiaet Lanpeigee. Cie barmtitt'ss Notion p. ", et rier. ) , Tlie prtcnnotatt piay acisert that the words Yor cade’ tu Sveetiom 22 preci Chiat poor Larcupelat inte the purrscdietion for both teoaticsbapiaent ond nade ‘are: ¢ Nemipet, ar i Dib ENDANTS CONTENTIONS 1. Doesectechagites Comber that Ceonesbapanent mean bo teonafer from ome conveyance or bine to another. Citandard College Dietionary, copyriyhe POOU therecaourt, Trace A World, Ines, New York) Phe defemdante alae Conmtend that plaintiff's broad Interpretation ta contrary to bepiobative pitent, ss well the pluin mec of the atatute, oo Phe dhefendinte corprie Chat exeriptrones are tobe an narrowly comoteued as pormible withun thier Decpetrshative: gritenit, ’ Fe Phie chefemediante: farther Conmtenad thiat prhattilt ss citppport froma the Latygiagee of the statute hoon not conmmrder the tatu: of the Law when the phatute wank emaeteds \, Detendante assert that the very ad ninttrative velease upon whreb plartitll relies actttitly take the defendants! positron, . Defeordante abse contend that the Cadi foriie Lepiobatire thas previotialy omected exetipe fiom whtel: poo further Chan the comstitutronal thtatiitier already preanted by U.S. Steoreme Court optrren, co that (hte statate ss nat prong beyond the commerce ehause is mot unprecedented, i, Defendants: Comtend: Chat the constitu fhomal dittieulttes tavelwed an the plamtitt's broad Interpretation supply abundant reasons for avorbelitap it, TV. Finally, defendants contend that the words "for sale" refer to the purpose for which the goods were originally manufactured and do not add to the exemption. I THE PLAIN MEANING The word ''transshipment"' is, of course, key to Section 225. The plaintiff contends that "transshipment" includes storage, sale, sorting, distributing, and the like. There is no support for this definition in any dictionary or case re- searched by defendants including, Funk & Wagnalls Standard College Dictionary, supra Webster's New World Dictionary (1968) the World Publishing Company) "to transfer from one ship, train, etc. to another." Ballentine's Law Dictionary (1969) Lawyer's Cooperative-Bancroft Whitney) "Moving cargo from one vessel to another. " Words & Phrases, Vol. 42, p. 482 "Where bill of lading allowing transshipment at certain intermediate port was stamped with clause indicating that forwarding beyond such port was to be in connection with named company, A-39 terms 'transshipment' and 'forwarding' held interchangeable, and clauses con- taining such terms, not being inconsistent must be construed together, ' Note: forwarding means "'To undertake under the terms of the con- tract with the shipper for through transportation to a point beyond the carrier's own line" (Ballentine's Law Dictionary, supra), It should be noted that even the unabridged version of Webster's New Workd Dictionary (1971 G & C Merriam Co.) contains no other definition than that stated above. The plaintiff has postulated some other definition, It is rst clear what it wishes this court to decide, because they have not actually set forth the meaning they give to the word. They do make clear, however, that they want the word transshipment to include storage await- ing sale and delivery, the sale itself, sorting by type, and distribution, The authorities cited thus far make it clear that the commonly accepted definition of "trans- shipment" is that advocated by the defendants, It is the policy of the courts to avoid giving statutory phraseology a strained or forced interpretation (Union Tool Co, v. Farmers' & M. National Bank, 192 Cal. 40, 218 P, 424 (1923)). A-40 a ‘Thus, the plaintiff must show that the legis- lative intent clearly shows that the plaintiff's situation was meant to be covered (Memorial Hills Association v. Sequoia Inv. Corp., 157 Cal. App. 2d 119, 123, 320 P.2d 567 (1958)). ‘That is the burden placed upon the plaintiff. I] THE LEGISLATIVE INTENT is The bill, The Legislature, although not describing its purpose in the enacting law's preamble, did describe the effect it wished the statute to have on the face of the bill. In Stats. 1975, c. 1126, the Legislature stated: "SEC. 4. No appropriation is made by this act, nor is any obligation created thereby under Section 2229 of the Revenue and ‘Taxation Code, for the reimbursement of any local agency for any revenue lost by it as a result of the exemption of property from taxation by this act because the net loss of reve- nue to any local agency is not significant. " (emphasis added. ) It should be noted that Section 2229 requires the Legislature to reimburse local government A-41 a for the exemptions that body creates in their tax lease. ‘That section is part of the system where- by a ceiling is placed on local tax rates. The plaintiff's broad interpretation would put the Legislature in the position of having ex- empted property from the county's tax base while not providing reimbursement as it is requirea by statute todo. The Legislature said it did not need to provide that reimbursement because there would be little or no money loss, The plaintiff's interpretation flies in the face of a direct statement by the |.cgislature that the exemption would have virtually no impact. a Section 22293, One other aspect of Section 2229 1s worth commenting on, That statute also requires that no exemption will be for more than five years and that no exemption will exempt more than 75% of the value of the property exempted. This statute does not comply with those restrictions. The only explanation (unless the plaintiff is urging legislative oversight) is that the de minimus character of the bili (as described by the Legis- lature itself) does not require comphance with Section 2229. Section 225 was not meant to be the overwhelming boon to importers which the plaintiff postulates. 3. Why pass a ''de minimus" bill? The logical question is: why could the legis- lature have stated that the act would have little effect and yet still enact it? The answer rests on the distinction between an exemption (statutory) and an immunity (consti- tutional). The U. S. Supreme Court, and others, provide the basic immunites from state and local taxes under the U. S. Constitution. The State Legislature provides exemptions, As the plaintiff points out in its memorandum accompanying its motion, the import-export clause immunity was in flux actually from 1959) (Youngs- town Sheet & Tube Co. v. Bowers, 358 U.S, 534, 3 L.Ed. 2d 490, 79 S. Ct. 383) until 1976) (Michelin v. Wages, supra). The California Legislature has often attempted to ''freeze'' a statutory interpretation by enacting that interpretation into law. On at least one other occasion it did the same thing with regard to a constitutional immunity from tax. Revenue and Taxation Code Section 30102 exempts from the cigarette tax, goods which are in bond under the control us U. S. Customs. This exemption was actually unnecessary in light of the opinion in National Distillers Co. v. City and County of San Francisco, 141 Cal, App. 2d 651, 297, P. 2d 61 (1966). Section 30102 was enacted in 1959, Of course, ten years later, bond immunity from state taxes was restricted to include only goods which were not destined for LU. S. markets (American Smelting Co. v. County of Contra Costa, 271 Cal. App. A-43 2d 437, 77 Cal. Rptr. 570 (1969)). But in 1959, the section was at least apparently covered by the immunity. The result of the legislation was to hold the status quo. (Of course, without the immunity, the statute may face equal protection or commerce clause problems, but Section 30102 has neither been tested in, nor interpreted by the courts. ) In the same vein is the exempting from the Alcoholic Beverage Tax Law all liquor in continu~ ous transit through the state (Revenue and Taxation Code Section 32051). This exemption obviously conforms with the immunity described in Minnesota v. Blasius, 290 U. S. 1, 78 L. "Sd. 131, 54 5S, Ct. 34 (1933) and Baron v. M[linois, 227 U. S. 501, 07 L. #d 615, 33 S. Ct. 299 (1913). Those cases hold that when goods have come to rest in the taxing jurisdiction for the purposes of their owner, they are taxable. Clearly the commerce clause immunity is as broad and possible even broader than the statute. Immunities can fluctuate leaving the exemp- tion "out ona limb.'' The exemption must, then, meet all the requirements of any state action which may deny equal protection or may regulate com- merce. But if the Legislature wishes to try to hold on to the immunity in this way, and if the exemption passes constitutional muster on its own, then the exemption will serve the legislative purpose. Section 225 is sucha statute. Poth the import-export and commerce clauses had been A-44 interpreted to allow more state taxation than previously thought (see VW Pacific v. City of Los Angeles, supra, and cases cited in Complete Auto Transit v. Brady, __—SsU. S. ___, 51 L. Ed. 2d 326, 97S. Ct. 1076 (1977)). The Legislature did not specifically say tnat the exemption was already "covered" by an im- munity, but the plain meaning of the terms it used, and its refusal to limit the statute as required by Section 2229 provide abundant support for that conclusion. 4, The plaintiff's interpretation of the legislative intent. The plaintiff has pointed to that portion of the bill which excepts goods bound for a manufact- uring process from the exemption. Actually, deleting goods in the process of manufacturing is an attempt to see that goods which were taxable when the statute was passed would not be exempted. Thus, the exception further supports the legislative finding that the bill would not exempt any goods which were then taxable. From 1959, the import-export ciause had been interpreted so that it would not provide an immunity for goods which were the ''current operational needs" of a manufacturer (see Youngstown Sheet & Tube Co, v. Bowers, supra). So deleting goods "in'' manufacture actually con- forms the exemption to the then-existing import- export immunity. A-45 Plaintiff further states that Section 225 excludes from the exception the process of label- ling, repackaging, etc. It maintains that this exception shows the legislative intent to exempt goods held in the taxing jurisdiction for more than transshipment. The plaintiff's reliance on this language is misplaced. The import-export clause had been inter- preted to include as "current operational needs" all goods under the control of a manufacturer (Virtue Bros. v. County of Los Angeles, 239 Cal, App. 2d 220, 48 Cal. Rptr. 505 (1966)). Even out-of-state manufacturers would be taxable under Youngstown if the goods were stored in this state as their current operational needs. But if the extent of that out-of-state ''man- ufacturing'' is repackaging or relabeling (i.e., not really manufacturing), the goods would not be current operational needs and the import-export immunity would still protect them (see Ralston Purina v. County of Los Angeles, 56 Cal. App. 3rd 547, 128 Cal. Rptr. 556 (1976) where the Appellate Court at p. 553 described pre-Michelin law as holding that labeling and casing are not manufacture), Section 225 accomplishes these ends by, first, excluding the current operational needs of out-of-state manufacturers from the exemption, and, second, by restricting manufacturing to something more than repackaging, etc. Thus, goods being transshipped will not be exempt if they are current operational needs under A-46 Youngstown and following cases, Once again, the Legislature has manefested its intention to conform this legislation to the existing constitutional immunities. III THE ADMINISTRATIVE CONSTRUCTION Plaintiff relies on administrative construc- tion by the legislative counsel and by the State Buard of Equalization to support its contention that goods sorted, stored, and sold are exempted by Section 225. The def@dants believe that the interpretations cited are erroneous in that they ignore the obvious impact of Youngstown and the Legislature's attempt to not exempt goods destined for manufacture out of state, because those goods would not be exempt uner the pre-Michelin inter- pretation of the import-export clause. But in this case it simply does not matter whether this court accepts the administrative interpretation or the County's. Using the admin- istrative interpretation still leads to the taxability of these goods, 1, Legislative Counsel's opinion (Exhibit A to Plaintiff's motions), On page 3 of that opinion the Legislative Counsel explains why that office determined that Section 225 exempts goods imported for trans- shipment plus repackaging. A-47 "It is our understanding that such matters as 'breaking in bulk, labeling, packaging, relabeling or repackaging' are not norm- ally procedures carried out by shipping companies, but are more usually tasks carried out by the owner of the property or by his agent. Thus, in our opinion, breaks in the continuity of the shipment of imports or exports covered by Section 225 for any of the specified purposes its exemption. '' (Emphasis added. ) The Legislative Counsel restricts the breaks in the continuity of the shipment" to those covered by Section 225, That supports the County's interpretation. But, storage, sale, back-up inventory, sorting, etc., are not among the purposes allowed. Thus, the Legislative Counsel would exempt goods passing through the state whose shipment was interrupted for the purpose of repackaging, . etc. But there is no support for the plaintiff's contention that the statute exempts goods whose shipment was interrupted for anything else. Theoretically, even repackaging plus some other purpose would not save the goods from taxa- tion because the other purpose is not set forth in the statute, and exemption must not be expanded beyond a reasonable reading (Atlantic R. R. Co. v. Phillips, 332 U. S. 168, 91 L. Ed. 1981, 67 S. Ct. 1587 (1947); Cypress Lawn Cemetery Assn. A-48 wv. San Francisco, 211 Cal, 387, 390, 295 P. 813 (1931); Weber v. Santa Barbara, 15 Cal. 2d 82, 88 98 P,. 2d 492 (1940); Cedars of Lebanon Hospital v. Los Angeles, 35 Cal, 2d 729, 734, 221 P.2d 31 (1950)). These cases go even further: the exemp- tion must not be expanded beyond the narrowest reasonable reading. The Legislative Counsel had indicated the purposes which it feels may cause a break in shipment and still provide an exemption under Section 225. There is no support for saying that there are others. 2. Board of Equalization letter. The State Board of Equalization sent a letter to the Assessor upon which plaintiff also relies (Exhibit B of plaintiff's motion). The State Board letter says: "Additionally, because of . . . section 225... goods brought into this state from outside the United States for transshipment out of this state... tor sale. . . are exempt from tax even if they are within the control of a California consignee provided that his reason for having them is for the pur- pose of breaking in bulk, labeling, relabeling, packaging, or repackaging the property prior to transshipment." Once again, there is absolutely no support for including any other purpose in the exemption, A-49 IV THE PLAINTIFF'S INTERPRETATION AND THE STATE AND FEDERAL CONSTITU TIONS Statutes must, if at all possible, be inter- preted so as to be constitutional (Shealor v. Lodi, 23 Cal, 2c 647, 653, 145 P. 2d 574 (1944); Palermo v. Stockton Theatres, 23 Cal. 2d 53, 60, 195 P.2d 1 (1948)). Interestingly enough, the plaintiff's inter- pretation would distinguish between foreign goods and U. S. goods, (Even under the pre-Michelin law, according to plaintiff, owners of foreign goods would be favored over those owning U.S. goods, as well as over foreign goods bound for California market). The same services would be provided the plaintiff's goods as are provided others, yet the owner of foreign goods would be entitled to not pay for them, while his domestic competitior would. There would appear to be no reason for this distinction. The warehousing and shipping industries service both Japanese and Hawaiian goods (as well as those shipped from other states, see Sea-Land Services Inc. v. County of Alameda, 12 Cal. 3d 772, 117 Cal. Rptr. 448; 529 P. 2d 56 (1974) for a description of some of this interstate sea traffic). 1, Equal protection and uniformity of taxation. Assuming that the Legislature simply neg- lected to add the plaintiff's interpretation to the statute and that it intended to exempt goods whose shipments were "interrupted" for the purposes of sorting, storage, sale, back-up inventory, and the like, the statute would be a prime candidate for a declaration of unconstitutionality because it would pase the existence of preferential treatment on the geographic location of its origin. WHYY v. Glassboro, 343 U. S. 117, 21 L. Ex, 2d 242, 89 S, Ct. 286 (1968) epecifically re- jects this sort of exemption on the grounds of equal protection. In Bethlehem Steel Corp, v. Depart- ment of Water and Power, 276 Cal. App. 2d 221, 30 Cal, Rptr. 300 (1969) statute favoring U. 5S. products over foreign ones was stricken on the same grounds. Yet the plaintiff insists thata statute be interpreted so as to give foreign goods preference over domestic ones. The plaintiff's interpreation is also contrary to the California Constitution. Article XIII, Sec- tion 1, in providing for the taxation of property within the state requires uniform and even-handed taxation (Watchtower Bible « Tract Soc. v. Los Angeies County, 30 Cal. 2d 426, 182 P. 2d 178 (1947) cert. den, 332 U. S. 811, 92 L. Ed. 389, 68S. Ct. 112). 2. The commerce clause. It is undisputed that the regulation of foreign commerce is a power of the Federal Government and not the states (Bethlehem Steel Corp. v. Department of Water and Power, supra; United States v. Belmont, 201 U.S, 324, 330; 81 L.Ed. 1134, 1139; 57 S.Ct. 758 (1937); and United States v. Curtiss-Wright Export Corp., 299 U. S. 304, 315-316, 81 L. Ed. 255, 260-261, 57S. Ct. 216 (1936)). The plaintiff's interpretation suggests that the Legislature is using its power to tax and exempt in order to encourage foreign goods while dis- couraging domestic ones, In fact, such encour- agement and discouragement constitute a regulation of foreign commerce. As such, it is contrary to the commerce clause which vests all power to regulate foreign commerce in the Federal Government. The absurdity of the interpretation becomes even Clearer when one remembers that one of the purposes of congressionally mandated tariffs is to protect American Industry (see Preamble to the Tariff Act of 1930; 19 U. S. C. Section 1202, et seq.). A review of this section makes it clear that the variation in duties paid is not related to local taxation but to the nature of the goods and the country from which they come. Plaintiff's interpretation of Section 225 would cancel or reduce the impact of many of the tariffs thereby directly countering the impact Congress intended. A-52 Thus, the commerce clause, and the exclu- sive Federal jurisdiction over foreign commerce supply even more reasons to reject plaintiff's interpretation. 3. Administrative interpretation and constitutional provisions, One of the primary reasons for the county's interpreting the statute in the way it does is be- cause allowing any exemption beyond the commerce clause, even for repackaging, would create the same constitutional problems. But the adminis- trative interpretations at least rely on specific language of the statute and do carry it beyond its terms. The administrative interpretation holds the constitutional problems to the minimum although not disposing of them altogether. V THE WORDS "'FOR SALE" IN SEC- TION 225 DO NOT REFER TO THE GOODS' STATUS WHILE IN STORAGE The plaintiff may assert that the words ''for sale'’ eman that the goods must be for sale to qualify for the exemption. This logic is clearly unreasonable since it would call for the exemption of goods held by their owners for the purpose of sale, but not for other more transportation-related purposes as were involved in All American v. County of Los Angeles, decided earlier by this court, A-53 The placement of the commas in Section 225 is also contrary to such an interpretation. The suggestion, if made, would more accurately be reflected by the following: " Personal property, manufactured or produced. ... for... Instead the comma after the word property is omitted, so that all the qualifiers that follow the words ''manufactured or produced" actually apply to them. The true sense of the section is that the goods must be ''manufactured or produced . . . for sale" rather than further manufacture or use by their owners, thus again showing a consistent legislative intent to go no further than the commerce clause, One other possibility exists that the words "for sale'' qualify the words ''transshipment out of this state'’ immediately before them. The placement of the commas make this a less tenable interpretation than the one suggested by these defendants. But even this interpretation would require transshipment for the purpose of sale rather than for use by the owner. The definition of the word transshipment is still not affected by this qualifier. Thus, the suggestion that the words "for sale'' must modify the words "personal property”’ is totally unsupported. VI CONCLUSION The plaintiff's interpretation is not supported by the language of the statute, by the legislative statement of the statute's scope, by administrative interpretation, or by the Federal or State const constitutions, Adding language by implication is not only unnecessary, it flies in the face of the general rule in this state (and throughout the country) that the plaintiff must show that they clearly fall within the exemption. (Cypress Lawn Cemetery Assn. v. San Francisco, supra; Atlantic R. R. Co. v. Phillips, supra. ) That showing has not been made, DATED: Respectfully submitted, JOHN H. LARSON, County Counsel By ss JAMES DEXTER CLARK Deputy County Counsel Attorneys for Defendants A-55 DECLARATION OF JAMES DEXTER CLARK I, JAMES DEXTER CLARK, declare: That Iam the Deputy County Counsel assigned to this matter. That I have reviewed recent legislation to determine what amounts of losses to counties are being reimbursed pursuant to Revenue and Taxa- tion Code Sections 2201, et seq., which provide a maximum ceiling on local tax rates and extend reimbursement for the localities' loss of funds as a result of exemptions. The chapters I re- viewed are attached. The show that the legisla- ture specifically authorized amounts of reimburse- ments ranging from $3, 750.00 to $180, 000. 00. That my files reveal that well over 30 suits have been filed by importers contesting the same issue as is involved in this case. Cases are presently being served against the County on this issue at the rate of one per week. 1! conserva- tively estimate that those actions involve over $1, 000, 000.00 of actual taxes which the importers claim they are exempt from peying as a result of Revenue and Taxation Code Section 225. Ihave knowledge of the fact ‘hat many importers have not filed suit and that many more suites of the same type are expected. The above-facts are within my own personal knowledge. If called upon to testify thereto, I could competently do so. A-56 I declare under penalty of perjury that the foregoing is true and correct. Executed this 22nd day of December, 1977, at Los Angeles, California, ss JAMES DEXTER CLARK (Exhibits Omitted) DECLARATION OF ARTHUR LEW I, ARTHUR LEW, declare: That Iam an Appraiser II with the County of Los Angeles and am presently assigned legal and legislative research matters. I[holda B. S. Degree in Marketing Management Ressearch which included studies in distribution methods. lIalso hold a Juris Doctor degree and am admitted to the California Bar. That I have researched the are of distribu- tion pattersns of goods, and I have found that there is a flow of traffic of substantial proportions by which goods arrive in California from other states for distribution throughout the United States or throughout various regions of the United States. Thus, there is a flow of traffic which corresponds with that described in Revenue and Taxation Code Section 225 which involves United States goods. That I have also reveiwed the case Sea-Land Services Inc. v. County of Alameda, 12 Cal, 3d 772, and found described therein a substantial . amount of sea-borne traffic from the east coast to California via the Panama Canal, The above cacts are within my own personal knowledge. If called upon to testify thereto, I could competently do so, I declare under penalty of perjury that the foregoing is true and correct, Executed this 22 day of December, 1977, Los Angeles, California. ss ARTHUR LEW (Declaration of Mailing Omitted) CAPTION OMITTED DECLARATION OF JOSEPH W. GRANT SUPERIOR COURT OF THE STATE OF CALIFORNIA, FOR THE COUNTY OF LOS ANGELES I, JOSEPH W. GRANT, declare: That Iam a Senior Appraiser for the County of Los Angeles with seven years of practical experience in appraising property similar to that :nvolved in this action. Ia am certified as an appraiser by the State of California. I have, during the last seven years, appraised and supervised appraisals of many firms similar to Walter Fleischer Co., Inc. Ihave reviewed the information submitted by Walter Fleischer Co, All firms with the varied inventory which the plain- tiff has informed us it has, sort their inventory by type. Based upon the information supplied by the plaintiff for the 1976-77 year, I believe it does sort its goods by type once unloaded from transport for storage. I have reviewed the financial information supplied by plaintiff for the 1976-77 year. The amount of inventory in stock on the lien date and the cost of goods sold for the entire year (extra- polated fromthe first 8 months) indicate a turnover rate of 3.4 per year. In other words the average stock will be in the plaintiff's inventory for over 3-1/2 months. The above-facts are within my own personal knowledge. If called upon to testify thereto, I could competently do so, A-60 I declare under penalty of perjury that the foregoing is true and correct. Executed this 23rd day of December 1977 at Los Angeles, California. ss JOSEPH W. GRANT (Declaration of Mailing Omitted) \-61 CAPTION OMITTED Ruling on submitted matter SUPERIOR COURT OF THE STATE OF CALIFORNIA FCR THE COUNTY OF LOS ANGELES WALTER FLEISHER CO., INC., v. COUNTY OF LOS ANGELES, etal., No. 195366 The matter, submitted December 27, 1977, is now ruled on as follows: Counsel need no re- minder that this Court rendered summary judg- ment for the plaintiff in All American Distributing Co v County of Los Angeles, # C182 173, in which the facts are somewhat similar although not identi- cal to those in the present case. The principal distinction is the shipment out of California of all of All-American's California-stored goods, while in Fleisher only 74. 2% of its shipments were out of state. Thus, pursuant to secs, 225 and 225. 1(1) Rev. & Tax Code, Fleisher seeks an exemption of 74, 2% of its $213, 468.95 inventory. Despite the fact that ''foolish consistency is the hobgoblin of small minds, ''* this Court is still of th of the view that All-American was decided correctly and that there is no essential distinction in Fleisher which requires a different result. Summary judgment is rendered for plaintiff; its counsel shall prepare and serve an appropriate judgment. ‘possibly anonymous; at least unacknowledged. A copy of this minute order is sent to counsel this date. A-62 CAPTION OMITTED NO, C 195 366 SUMMARY JUDGMENT SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES WALTER FLEISHER CO., INC., v. COUNTY OF LOS ANGELES, etal., No. 195366 This cause having come on regularly for hearing in Department 85 of the above entitled court, the Honorable George M. Dell, Judge Presiding, on December 27, 1977, pursuant to duly noticed Motion for Summary Judgment filed by the plaintiff; Gerald T. Manpearl and Thomas C. Corcovelos for Baker, Ancel and Redmond, appearing for plaintiff Walter Fleisher Co., Inc.; and James Dexter Clark, Deputy County Counsel, for the defendants County of Los Angeles and City of Los Angeles; and the Court having considered the plead- ings, the documents presented and filed with respect to the motions, and having heard and considered the contentions of counsel; anc the Court having heretofore granted the said motion of plaintiff on the statutory ground that there is no defense to the action, and that no triable issue of fact is presented: IT IS ORDERED that the Answer of the defendants County of Los Angeles and City of Los Angeles be and it is stricken. IT IS FURTHER ORDERED, ADJUDGED AND DECREED that plaintiff Walter Fleisher Co., Inc., have judgment against the defendants County of Los Angeles and City of Los -\ngeles in the sum of $3,595.99 as principal, and $265. 41 as interest, for a total of $3, 861. 4C. A-63 TI IS FURTHER ORDERED, ADJUDGED AND DECREED that plaintiff Walter Fleisher Co., Inc, have judgment against the defendants County of Los Angeles and City of Los Angeles for costs in the sum of $ Dated this 7thday of March _, 1978. GEORGE M. DELL Judge of the Los Angeles Superior Court (Declaration of Mailing Omitted) A-64 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1177%3A1. Public record. Not legal advice.