# Petition for Writ of Certiorari — Patel v. City of Gilroy

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2002
- **Citation:** 537 U.S. 1072

## Text

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No OPR@E GF THE CLERK

In the
Supreme Court of the Anited States

VINOD PATEL,
Petitioner,

Vv.

City oF GILROY,
Respondent.

On PETITION For Writ Or CERTIORARI
To THe CALirorniA Court Ov APPEAL
For Tue SixtH APPELLATE DISTRICT

PETITION FOR WRIT OF CERTIORARI

FRANK A. WEISER
Counsel of Record

3460 WILSHIRE BLVD.
SulTE 903

Los ANGELES, CA 90010
(213) 384-6964

Counsel for Petitioner

BECKER GALLAGHER LEGAL PUBLISHING, INC.,
CINCINNATI, OHIO 800-890-5001

QUESTION PRESENTED FOR REVIEW

Whether a Municipal Transient Occupancy Tax
Ordinance That Prescribes Criminal Penalties for Violation of
Any of its Provisions but Lacks a Scienter Requirement Is
Facially Void under the Due Process Clause of the Fourteenth
Amendment of the United States Constitution?

LIST OF PARTIES TO THE PROCEEDINGS

The parties to the proceeding are Petitioner Vinod
Patel (“Petitioner”) and Respondent City of Gilroy
(“Respondent” or “City”).

ll

TABLE OF CONTENTS

QUESTION PRESENTED FOR REVIEW ......... i

LIST OF PARTIES TO THE PROCEEDINGS ...... li

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Co a a 1
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STATUTES AND CONSTITUTIONAL
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PER Geees GP EEE CASE 2 teens 2
A ee ar orn a Sin hawk ew 2
REASONS FOR GRANTING THE WRIT ......... 6

A. THE ORDINANCE LACKS A
SCIENTER REQUIREMENT
AND THEREFORE FAILS
TO PROVIDE FAIR AND
ADEQUATE NOTICE OF
THE TYPE OF CONDUCT
PROHIBITED AND
ENCOURAGES ARBITRARY
AND DISCRIMINATORY
LAW ENFORCEMENT ........... 6

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APPENDIX
Appendix A
Supreme Court of California Order -
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Appendix B
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Appendix C

Superior Court of California Judgment -
Seer ens eee eee ee re eee ee 15a

iV

TABLE OF AUTHORITIES
Cases:

Boyce Motor Lines v. United States,

Pan Ga Bet CR i 9 8 00 860s tee 7
Britt v. City of Pomona,

223 Cal.App.3d 265 (1990) ............ 9, 10
City of San Bernardino Motel Association v.

City of San Bernardino,

~ te WS Fe eee 9

Colautti v. Franklin,
Se Ue 2 Ce be es ee een ee 6

Giaccio v. Pennsylvania,
Dae Sh Se Ie 0 8's ada eee eee 12

Grayned v. City of Rockford,
Opn Um. Serre 4 6654 25a ee eee 7

Hoffman Estates v. Flipside, Hoffman Estates, Inc.,
Co Uae. SP PE «0 has ine eee eee 7,9

Kolender v. Lawson,
GOs Ua. Bee Ce se hci ee eee 8, 11

Papachristou v. Jacksonville,
OP MR Es re re a 7

Smith v. Goguen,
S55 UE. FeO TPO es besa eee 8

United States v. Bishop,

or BR es eer eer ere 8
United States v. Petrillo,
Fae Ue RERPTD bv ck heehee eee 13
United States v. Ragen,
Fee Us SED CREE bh 66 6 eee 6 oe ee eS 7
United States v. United States Gypsum Co..,
Ge Gab. She CPD 8 eee eb eeees 7 |
Statutes:
yr BR Some Br |) errr ge er ee 1

vi

OPINIONS BELOW

The Judgment by the Superior Court of the State of
California for the County of Santa Clara was entered on June
20, 2000 (the “Superior Court Order”) (App. C). The
published Opinion by the Court of Appeal of the State of
California for the Sixth Appellate District affirming the
Judgment by the Superior Court was entered on March 8,
2002 (the “Opinion”) (App. B) . The Opinion is reported at
97 Cal. App.4th 483 (2002). The Order of the California
Supreme Court sitting en banc denying the Petition for
Review was entered on June 12, 2002 (the “California
Supreme Court Order”) (App. A) .

JURISDICTION

The California Supreme Court Order was entered on
June 12, 2002. This Court extended the time to file this
Petition for Writ of Certiorari to and including October 9,
2002 (Application No. 02A189) . The jurisdiction of this
Court is invoked pursuant to 28 U.S.C. § 1254(1) .

STATUTES AND CONSTITUTIONAL
PROVISIONS INVOLVED

The pertinent provisions of the Fourteenth Amendment
of the United States Constitution is set forth below:

The Fourteenth Amendment to the United States
Constitution, Section 1 states in pertinent part:

“No State shall make or enforce any law which
shall abridge the privileges or immunities of
citizens of the United States; nor shall any
State deprive any person of life, liberty or

l

property, without due process of law; nor deny
to ant person within its jurisdiction the equal
protection of the laws.”

STATEMENT OF THE CASE
A. FACTS

Petitioner Vinod Patel, owner of the Pacheco Pass
Motel in the City of Gilroy, petitions for review the entry of
the judgment upholding tax assessments imposed on the motel
by the the Respondent City of Gilroy.

This petition presents a facial challenge to a criminal
transient occupancy tax ordinance. Petitioner contends that the
City of Gilroy Transient Occupanct Tax ordinance ' that
created and defined the tax is unconstitutionally vague under
the Fourteenth Amendment of the United States Constitution.

The ordinance requires the proprietor of each “hotel”?

' City of Gilroy Municipal Code § 25A.
2 The term “Hotel” is defined as:

“Hotel” means any structure, or any portion of any
structure which is occupied or intended or designed for occupancy
by transients for dwelling, lodging or sleeping purposes, and
includes any hotel, inn, tourist home or house, motel, studio hotel,
bachelor hotel, lodging house, rooming house, apartment house,
dormitory, public or private club, mobile home or house trailer at
a fixed location, or other similar structure or portion thereof.”
(Former City of Gilroy Municipal Code § 25A. I. Ordinance No.
928, § 1 (1971) .)

“Hotel” now includes a recreational vehicle park. (City of

2

ee

in the City of Gilroy to collect, along with the rent, a 9
percent tax from each “transient” * for the privilege of
“occupancy” ‘in the hotel.

The ordinance provides for “exemptions” ° from the tax.

Gilroy Municipal Code § 25A.I. Ordinance No. 97-9, § I (October
20, 1997).)

3 The term “Transient” is defined as:

“.. any person who exercises occupancy or is entitled to
occupancy by reason of concession, permit, right of access, license
or other agreement, for a period of thirty (30) consecutive calendar
days or less, counting portions of calendar days as full days. Any
such person so occupying space in a hotel shall be deemed to be a
transient until the period of thirty (30) days has expired, unless
there is an agreement in writing between the operator and the
occupant providing for a longer period of occupancy. In
determining whether a person is a transient, uninterrupted periods
of time extending both prior and subsequent to the effective date of
the ordinance may be considered.” (City of Gilroy Municipal Code
§ 25A.I1.)

* The term “Occupancy” is defined as:

“the use or possession, or the right to the use or possession
of any room or rooms or portions thereof, in any hotel for
dwelling, lodging or sleeping purposes.” (City of Gilroy Municipal
Code § 25A.!.)

* The “Exemptions” section states:
“No tax shall be imposed upon:

(a) Any person as to whom, or any occupancy as to which, it is
beyond the power of the city to impose the tax herein provided;

3

CE

The ordinance also prescribes criminal penalties for
violation of any of its provisions.° This provision does not
contain a scienter requirement.

In June 1998, following an audit, the City notified
petitioner that he owed $26,292.33 in delinquent taxes,
interest and penalties under the ordinance.

After a hearing in August 1998, the administrative
services director (“Director”) found that petitioner owed the
City $10,965.36, attributable to exemptions improperly
claimed for the three-year audit period ending December 1,
1996, plus interest. The Director noted that the motel kept
“very erratic” records, and that there were no written
agreements for stays of more than 30 days, which would have
allowed an exemption from the tax. However, the Director
also noted that many of the hotel patrons had in fact stayed
longer than 30 days, as reflected in the room rental cards. The
Director further found that petitioner had collected some tax,
which he had included in the room rate without itemizing it on

(b) Any officer or employee of a foreign government who is
exempt by reason of express provision of federal law or
international treaty.

No exempiion shall be granted except upon a claim thereof made
at the time rent is collected and under penalty of perjury upon a
form prescribed by the director of finance.” (City of Gilroy
Municipal Code § 25A.1.)

° The ordinance states regarding criminal penalties that:

“Violations; misdemeanor.

Any person violating any of the provisions of this
chapter shall be guilty of an infraction.”

(City of Gilroy Municipal Code § 25A.13.)

4

the rental cards. Consequently, the Director allowed an
exemption from the tax for all of the patrons who appeared to
have stayed more than 30 consecutive days.

The Director declined to impose penalties, finding no
intent to under report taxes.

Petitioner filed a timely appeal to the Gilroy City
Council, which conducted a hearing and upheld the Director’s
findings. In January 1999, petitioner filed a petition for a writ
of mandate and complaint for declaratory and injunctive relief
in the Santa Clara Superior Court. The petitioner alleged that
the assessment violated his right to due process and equal
protection, and that the ordinance was facially void for
vagueness under the Due Process Clause of the Fourteenth
Amendment of the United States Constitution.

In August 1999, the City filed its own complaint to
recover the amounts found due by the Director and the city
council, along with the interest that had continued to accrue.
Pursuant to a stipulation by the parties, the court ordered that
the outcome of the proceedings against the City would control
the outcome of the City’s collection lawsuit against the
petitioner. As part of the stipulation the parties acknowledged
that if the City prevailed, it would be entitled to recover the
amount found due by the Director, plus accrued interest. On
June 20, 2000, the superior court entered judgment in favor
of the City, finding the ordinance to be “valid and
constitutional.” (App. C).

Petitioner filed a timely appeal to the California Court
of Appeal for the Sixth Appellate District. On March 8, 2002,
the court of appeal, in a published opinion held that the
ordinance was not unconstitutionally vague under the Due
Process Clause of the Fourteenth Amendment of the United

5

States Constitution, since it gave fair notice of its collection
and reporting requirements and provided reasonably adequate
standards to guide enforcement. (App. B) .

The court of appeal held that while the definitions of
“hotel” and “occupancy” contained the words “dwelling” and
“lodging”, implying either a temporary or permanent
Situation, and that the “exemptions” section was “hardly a
model of clarity in exempting whoever is ‘beyond the power
of the city to impose the tax,’” (App. B, pp. 13a-13b), but
that the tax clearly applied solely to those who occupied a
hotel for a period of 30 consecutive calendar days or less who
had not entered into written agreements for longer stays.
Thus, as the court of appeal reasoned, it was clear what the
ordinance as a whole prohibited, and the ordinance was valid
in the vast majority of its intended applications.

Petitioner filed a timély Petition for Review oi the
court of appeal opinion to the California Supreme Court.

On June 12, 2002, the California Supreme Court
sitting en banc denied the Petition for Review. (App. A) .

REASONS FOR GRANTING THE WRIT

A. The Ordinance Violates Due Process in That it
Fails to Provide Fair and Adequate Notice of
the Type of Conduct Prohibited and
Encourages Arbitrary and Discriminatory Law
Enforcement.

The Court has long’ recognized that the
constitutionality of a vague statutory standard in a criminal
statute is closely related to whether that standard incorporates
a scienter requirement. Colautti v. Franklin, 439 U.S. 379,

6

eat |

395, 99 S.Ct. 675, 685, 58 L.Ed.2d 596 (1979) ; United
States v. United States Gypsum Co., 438 U.S. 422, 434-446,
98 S.Ct. 2864, 2873, 57 L.Ed.2d 854 (1978) ; Papachristou
v. Jacksonville, 405 U.S. 156, 163, 92 S.Ct. 839, 843, 31
L.Ed.2d 110 (1972) ; Boyce Motor Lines v. United States , 342
U.S. 337, 342, 72 S.Ct. 329, 331, 96 L.Ed. 367 (1952) .

This is not an ordinance ‘that “simply regulates
business behavior and contains a scienter requirement, “ see
Hoffman Estates v. Flipside Hoffman Estates, Inc., 455 U.S.
489, 499, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982) , this is a
criminal tax ordinance that contains no scienter requirement.

The absence of a scienter requirement in the section
directing criminal penalties for any violation of its provisions
renders the ordinance little more than “a trap for those act in
good faith.” United States v. Ragen, 314 U.S. 513, 524, 62
S.Ct. 374, 379, 86 L.Ed. 383 (1942) ; Grayned v. City of
Rockford, 408 U.S. 104, 108-109, 92 S.Ct. 2294, 2298, 33
L.Ed.2d 222 (1972) (enunciating the standards of fair notice
and fair enforcement for evaluating vagueness and stating that
“[vJague laws may trap the innocent by not providing fair
warning”).

The Court has stated that “the degree that the
Constitution tolerates - as well as the importance of fair notice
and fair encforcement - depends in part on the nature of the
enactment.” Hoffman Estates, 455 U.S. at 498, 102 S.Ct. at
1193.

By way of example, the Court in Hoffman Estates
further explained that the Court has traditionally expressed
greater tolerance of enactments with civil rather than criminal
penalties because the consequences of imprecision are
qualitatively less severe, and that a scienter requirement may

7

mitigate a law’s vagueness, especially with respect to the
adequacy of notice. Jd., 455 U.S. at 498-499, 102 S.Ct. at
1193.

Because of the complexity of the nature of this
municipal tax law, a person should not be exposed to criminal
penalties for a bona fide misunderstanding as to liability for
the tax, as to his duty to make a return, or as to the adequacy
of the records of the records he maintains, merely by his
failure to measure up to the prescribed standard of conduct.

A legislature’s failure to establish a_ scienter
requirement not only fails to provide fair warning, but
impermissibly delegates basic policy matters to law
enforcement, judges and juries for resolution on an ad hoc and
subjective basis, with the attendant dangers of arbitrary and
discriminatory applications as to who has criminally violated
the ordinance’s requirements.

The Court has repeatedly emphasized that where a
legislature fails to establish minimal guidelines to govern law
enforcement, a criminal statute may permit “ ‘a standardless
sweep [that] allows policeman, prosecutors, and juries to
pursue their personal predilections.’” Kolender v. Lawson,
461 U.S. 352, 356, 103 S.Ct. 1855, 1858, 75 L.Ed.2d 903
(1983) (quoting Smith v. Goguen, 415 U.S. 566, 574, 94 |
S.Ct. 1242, 1247-1248, 39 L.Ed.2d 605 (1974)). |

For example, in the area of federal income taxation,
because of the complexity of the nature of the tax laws,
Congress has required “willfulness” as an element of certain
federal criminal tax offenses, and the Court has traditionally
construed this term as connoting “a voluntary, intentional
violation of a known legal duty.” United States v. Bishop, 412
U.S. 346, 360, 93 S.Ct. 2008, 2017, 36 L.Ed.2d 941 (1973).

8

|

While it is certainly true that “ [i]n evaluating a facial
challenge to a state law, a federal court must, of course
consider any limiting construction that a state court or
enforcement agency has proffered,” Hoffman Estates, 455
U.S. at 494, n. 5, 102 S.Ct. at 1191, n. 5, the limiting
construction by the court of appeal opinion does not cure the
foundational defect of a lack of a scienter or mens tea
requirement.

The perils of strict criminal liability are particularly
acute here because the terms “dwelling” or “lodging” by
definition imply permanent residency, ’ and are used in the
central definitions of “transient”, “hotel” and “occupancy”.

Even more confusing is the fact that the definitional
structure is patently circular. “Hotel” is not defined simply as
a structure which furnishes occupancy intended for dwelling
or lodging; it is defined as a structure which furnishes
occupancy for dwelling or lodging to a “transient” But
“transient” is not simply defined as a person who obtains
occupancy for 30-days or less; it is defined as a person who
obtains occupancy in a “hotel” The definitions of “hotel” and
“transient” are rendered hopelessly confusing since the
common term “occupancy” is defined as a person who obtains
possession for “dwelling” or “lodging” purposes.

. Two previous published state appellate opinions

invalidated other municipal transient occupancy tax ordinances on
federal due process grounds and emphasized that the definition of
a “transient” occupancy tax by use of the terms “dwelling” or
“lodging” is inherently ambiguous and confusing. See Britt v. City
of Pomona, 223 Cal. App.3d 265 (1990) ; City of San Bernardino
Hotel/Motel Association v. City of San Bernardino, 59 Cal. App.
4th 237 (1997).

The court of appeal’s attempt to limit the construction
of the ordinance does solve the inherent circularity of the
definitional structure.

The court of appeal also held that “the hotel guest is
invariably deemed to be a transient until the first 30 days have
passed, even if he or she appears to be ‘dwelling’ in the hotel
for that period.” (App. B, pg. 12a) .

This statement is nonsensical. Even granting the court
of appeal’s limiting construction, the term to “appear to be
dwelling” in a genuine transient occupancy situation is a
contradictory statement.®

8’ By way of illustration, a previous California appellate

court explained in invalidating another transient occupancy tax on
federal due process grounds that the use of the te1m “dwelling” in
the definition of a transient occupancy tax is inherently ambiguous:

“The 1987 ordinance sends mixed signals. Section
9126 of that ordinance states that ‘transients’ have
to pay the tax; but in its definitions of ‘hotel’ and
occupancy’, the ordinance includes the word
‘dwelling’ .The plain definition of to ‘dwell’ means
‘to be or continue in some state or condition.’ A
“dwelling” is ‘a building or construction used for
residence.” To ‘reside’ is ‘to settle oneself or a
thing in a place’ be stationed: remain, stay.’ A
‘resident’ is ‘one who dwells in a place for a
period of some duration.’ (Webster’s New
Internat. Dict. (3rd ed. 1981) pp. 706, 1931).
Thus, the text of the ordinance appears to address
both transients and persons in residence.” Britt,
223 Cal. App.3d at 278-279 (1990) .

10

—KK—————-—

Moreover, the court of appeal’s attempt to further
limit the reach of the ordinance by holding that a written
agreement providing for a longer occupancy will remove the
rental arrangement from the transient occupancy tax remains
ambiguous as long as there exist no minimal guidelines in
defining the term “written agreement”.

The “exemptions” section of the ordinance further
exacerbates the problem of vagueness and circularity since it
is unclear who is exempt from the tax, as this section does not
set forth adequate guidelines or definitions as to which class
of “persons” or “occupancy” it is “beyond the City to impose
the tax.”

The court of appeal recognized that the “exemption”
section was “hardly a model of clarity in exempting whoever
is ‘beyond the power of the city to impose the tax,’” (App. B,
pg. 13a) and further stated that the fact that a term is
somewhat imprecise does not itself offend due process. (App.
B, pg. 13a). However, it did not offer a limiting construction
of this portion of the ordinance other than stating by way of
example that:

“Here the Director expressed no confusion in
determining that appellant had not entered any
written agreements with patrons who had
stayed in the motel for a period shorter than 31
days; nor did he appear to have any difficulty
construing the ordinance to require the
collection of tax from those guests.” (App. B,

pg. 14a) .

Not only does this statement essentially misapprehend
the void-for-vagueness doctrine which focuses on actual notice
to the petitioner, not the Director, see Kolender , 461 U.S. at

11

357-358, 103 S.Ct. at 1858, it also illustrates that inherent
ambiguity that remains in the ordinance even given its
previous limiting construction since there is simply no
standard to be found in this section as to how it is be applied,
let alone applied in the manner construed by the court of
appeal.

This grant of unchanneled, standardless discretion
“does not even begin to meet th[e] constitutional requirement
[of due process] .” Giaccio v. Pennsylvania, 382 U.S. 399,
403, 86 S.Ct. 518, 521, 15 L.Ed.2d 447 (1966).

In Giaccio, Justice Black, eloquently stated for the
Court that:

“Certainly one of the basic purposes of the
Due Process Clause has always been to protect
a person against having the Government
impose burdens upon him except in accordance
with the valid laws of the land. Implicit in this
constitutional safeguard is the premise that the
law must be one that carries an understandable
meaning with legal standards that courts must
enforce.” Jd., 382 U.S. at 403, 86 S.Ct. at
521.

This ordinance as written does not even begin to meet
the constitutional requirement of due process. It is impossible
to apply the ordinance’s requirements with reasonable
certainty in advance. Moreover, the circular definitions of
“transient”, “hotel” and “occupancy” deprive these terms of
any meaningful content. By imposing criminal penalties for
failure to comply with its provisions without a scienter
requirement it cannot meet the exacting standards of due
process.

12

eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee—eEewOonr

The ordinance viewed as a whole, fails to provide
adequate notice and encourages arbitrary and discriminatory
enforcement.

Although due process does not require “impossible
standards” of clarity, see United States v. Petrillo, 332 U.S.
1, 7-8, 67 S.Ct. 1538, 91 L.Ed. 1877 (1947), this is not a
case where further precision in the ordinance’s language is
either impossible or impractical.

CONCLUSION
For all the foregoing reasons, petitioner respectfully
requests that the Petition for Writ of Certiorari be granted and

that the City of Gilroy’s Transient Occupancy Tax Ordinance
be declared and determined to be unconstitutional and void.

Respectfully submitted,

LAW OFFICES OF FRANK A. WEISER

13

APPENDIX A

IN THE SUPREME COURT OF CALIFORNIA
En Banc

[Filed June 12, 2002]

No. S106060

CITY OF GILROY
Plaintiff and Respondent,
v.

LEAVESLEY OCEAN-INN
INVESTORS et al.,
Defendants and Appellants.

i i i a a a

Court of Appeal, Sixth Appellate District
No. H021889

ORDER
Petition for review denied.

GEORGE
Chief Justice

la

APPENDIX B

COURT OF APPEAL OF CALIFORNIA
SIXTH APPELLATE DISTRICT

[Filed March 8, 2002]
[Reported at 97 Cal. App. 4th 483]
No. H021888

VINOD PATEL,
Plaintiff and Appellant,

V.

- CITY OF GILROY,
Defendant and Respondent.

i i a a a a

Superior Court of Santa Clara County
Super. Ct. No. CV779614
Leslie Nichols, Judge

JUDGES:
Elia, J. WE CONCUR Premo, Acting P.J. Mihara, J.

OPINION
Vinod Patel, owner of the Pacheco Pass Motel in
Gilroy, appeals from a judgment upholding the tax

assessments imposed on the motel by the City of Gilroy
(City). Appellant contends that the ordinance that created and

2a

cee

Sixth Appellate District Opinion - 3/8/02
Reported at 97 Cal. App. 4th 483

defined the tax is unconstitutionally vague. We disagree and
affirm the judgment.

Background

In June 1998, following an audit, the City notified
appellant that he owed $26,292.33 in delinquent taxes,
interest and penalties, under the city’s Transient Occupancy
Tax ordinance, Gilroy City Code section 25A. 1, et. seq.' The
ordinance requires the proprietor of each “hotel” to collect,
along with the rent, a 9 percent tax from each “transient” for
the privilege of “occupancy” in the hotel.” ( § 25A.2.)

After a hearing in August 1998, the Administrative
Services Director (Director) found that appellant owed the

' All further unspecified section references are to the

Gilroy City Code.

* Section 25A.2 specifically states: “For the privilege of
occupancy in any hotel, each transient is subject to and shall pay a
tax in the amount of nine per cent (9%) of the rent charged by the
operator. Said tax constitutes a debt owed by the transient to the
city which is extinguished only by payment to the operator or to the
city. The transient shall pay the tax to the operator of the hotel at
the time the rent is paid. If the rent is paid in installments, a
proportionate share of the tax shall be paid with each installment.
The unpaid tax shall be due upon the transient’s ceasing to occupy
space in the hotel. If for any reason the tax due is not paid to the
operator of the hotel, the director of finance may require such tax
[to] be paid directly to the director of finance.”

3a

Sixth Appellate District Opinion - 3/8/02
Reported at 97 Cal. App. 4th 483

City $10,965.36, attributable to exemptions improperly
claimed for the three-year audit period ending December 1,
1996, plus interest. The Director noted that the motel kept
“very erratic” records, and that there were no written
agreements for stays of more than 30 days, which would have
allowed an exemption from the tax. However, the Director
also noted that many of the hotel patrons had in fact stayed
longer than 30 days, as reflected in the room rental cards.
The Director further found that appellant had collected some
tax, which he had included in the room rate without itemizing
it on the rental cards. Consequently, the Director allowed an
exemption from the tax for all of the patrons who appeared to
have stayed more than 30 consecutive days. The Director
declined to impose penalties, finding no intent to underreport
taxes. |

Appellant filed a timely appeal to the Gilroy City
Council, which conducted a hearing and upheld the Director’s
findings. In January 1999, appellant, together with the owners
of the Leavesley Inn,’ filed a petition for a writ of mandate
and complaint for declaratory injunctive relief. The petitioners
alleged that the assessment violated their rights to due process
and equal protection, and that the Transient Occupancy Tax
ordinance was facially void for vagueness.

In August 1999 the City filed its own complaint to
recover the amounts found due by the Director and the City

> This appeal is being considered with City of Gilroy v.

Vinod Patel (dba Oaks Motel), HO21900, and City of Gilroy v.
Leavesley Ocean-Inn Investors, HO21889.

4a

Sixth Appellate District Opinion - 3/8/02
Reported at 97 Cal. App. 4th 483

Council, along with the interest that had continued to accrue.’
Pursuant to a stipulation by the parties, the court ordered that
the outcome of the proceedings against the City would control
the outcome of the City’s collection lawsuit against appellant.
As part of the stipulation the parties acknowledged that if the
City prevailed, it would be entitled to recover the amount
found due by the Director, plus accrued interest. On June 20,
2000, the court entered judgment in favor of the City, finding
the Transient Occupancy Tax ordinance to be “valid and
constitutional.”

Discussion

An enactment may be declared unconstitutionally
vague under the due process clauses of the United States
Constitution and the California Constitution (U.S. Const.,
Amends V, XIV; Cal. Const., art. I, -§ 7) “if it fails to
provide people of ordinary intelligence a reasonable
opportunity to understand what conduct it prohibits [or] if it
authorizes or even encourages arbitrary and discriminatory
enforcement.” ( Hill v. Colorado (2000) 530 U.S. 703, 732,
147 L. Ed. 2d 597, 120 S. Ct. 2480; Chicago v. Morales
(1999) 527 U.S. 41, 56, 144 L. Ed. 2d 67, 119 S. Ct. 1849;
People v. Castenada (2000) 23 Cal.4th 743, 751.) A tax law
in particular “ ‘must prescribe a standard sufficiently definite
to be understandable to the average person who desires to
comply with it. [Citation.]’ “ ( State Bd. of Equalization v.
Wirick (2001) 93 Cal.App.4th 411, 420.) We therefore must

* The complaint is not in the clerk’s transcript on appeal,
but is referred to by the court in its subsequent order.

Sa

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consider whether chapter 25A of the Gilroy City Code (the
Transient Occupancy Tax ordinance) gives fair notice of the
tax collection and reporting requirements and provides
reasonably adequate standards to guide enforcement. ( /d. at
p. 419, quoting Fisher v. City of Berkeley (1984) 37 Cal.3d
644, 702, 209 Cal. Rptr. 682, 693 P.2d 261; City of San

_ Bernardino Hotel/Motel Assn. v. City of San Bernardino
(1997) 59 Cal.App.4th 237, 245.)

su paSEIENOT CSG EEeETeaernmeT

The primary focus of the parties’ dispute is the
definition of the terms used in section 25A.1 -- specifically,
“hotel,” “occupancy,” and “transient.” From 1994 to 1996,
the period for which appellant was audited, “hotel” was
defined as “any structure, or any portion of any structure,
which is occupied or intended or designed for occupancy by
transients for dwelling, lodging or sleeping purposes, and
includes any hotel, inn, tourist home or house, motel, studio
hotel, bachelor hotel, lodging house, rooming house,
apartment house, dormitory, public or private club, mobile
home or house trailer at a fixed location, or other similar
structure or portion thereof.” (Former § 25A.1; Ord. No.
928, 1971, § 1.)° The term “occupancy” refers to “the use or
possession, or the right to the use or possession of any room
Or rooms or portions thereof, in any hotel for dwelling,
lodging or sleeping purposes.” ( § 25A.1.) And a “transient”
is “any person who exercises occupancy or is entitled to
occupancy by reason of concession, permit, right of access,
license or other agreement for a period of thirty (30)

> “Hotel” now includes a recreational vehicle park. ( §
25A.1, Ord. No. 97-9, § I, Oct. 20, 1997.)

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consecutive calendar days or less, counting portions of
calendar days as full days. Any such person so occupying
space in a hotel shall be deemed to be a transient until the
period of thirty (30) days has expired unless there is an
agreement in writing between the operator and the occupant
providing for a longer period of occupancy. In determining
whether a person is a transient, uninterrupted periods of time
extending both prior and subsequent to the effective date of
this chapter may be considered.” ( § 25A.1.)

Appellant contends that these terms are “hopelessly
confusing” because they are defined in a circular way and fail
to distinguish temporary living arrangements from permanent
ones. The definitions of “hotel” and “occupancy,” for
example, are flawed because they contain the words
“dwelling” and “lodging,” which imply either a temporary or
a permanent situation. The 30-day restriction in the definition
of “transient” is inadequate to clarify the reach of the tax,
appellant adds, because it suggests that a tenant of an
apartment on a month-to-month arrangement must pay the tax
for the first 30 days, a situation not intended by the
lawmakers. “It is only on day 31, when the renter pays the
second month’s rent, that the owner may safely assume no tax
is due. But the Ordinance chose to use the words ‘hotel’ and
‘transient’, which apparently was intended to exclude this
hypothetical.”

Appellant’s argument is self-defeating, as it expressly
invokes a “hypothetical” scenario appellant himself does not
face. Whether a month-to-month apartment rental would
create confusion in the lessor and lessee is not the problem
presented here. Rather, here the only issue was whether

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appellant failed to collect tax for those guests who stayed in
his motel for 30 or fewer days without a written agreement
for a longer stay. Appellant “cannot prevail by simply
suggesting hypothetical situations in which constitutional
problems may arise.” ( People v. Sipe (1995) 36 Cal.App.4th
468, 481, italics added.) “Speculation about possible
vagueness in hypothetical situations not before the Court will
not support a facial attack on a statute when it is surely valid
‘in the vast majority of its intended applications.’ “(Hill v.
Colorado, supra, 530 U.S. at p. 733; see also Tobe v. City of
Santa Ana (1995) 9 Cal.4th 1069, 1109, 892 P.2d 1145
[unless law sweeps in substantial amount of constitutionally
protected conduct, facially vague law must be invalid in all
respects and applications]; Evangelatos v. Superior Court
(1988) 44 Cal.3d 1188, 1201, 246 Cal. Rptr. 629, 753 P.2d
585 [in facial vagueness challenge party must demonstrate
vagueness in “all of its applications,” not just some instances
of unceriainty or ambiguity]; cf. American Academy of
Pediatrics v. Lungren (1997) 16 Cal.4th 307, 347-348, 940
P.2d 797.)

Appellant maintains, however, that we must exercise
Stricter scrutiny of the ordinance because it prescribes
criminal penalties for violations.° ( Kolender v. Lawson
(1983) 461 U.S. 352, 358, fn. 8, 75 L. Ed. 2d 903, 103 S.

° In addition to prescribing monetary penalties for

noncompliance, the ordinance originally declared any violation of
the ordinance a misdemeanor punishable by a $500 fine or
imprisonment, or both. The current version of the ordinance
declares such a violation to be an infraction.

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Ct. 1855 [where a statute imposes criminal penalties, the
standard of certainty is higher].) Penal enactments are given
greater scrutiny when their enforcement threatens the exercise
of constitutional rights, such as freedom of expression or
freedom of movement. ( Chicago v. Morales, supra, 527
U.S. at p. 55; Tobe v. City of Santa Ana, supra, 9 Cal.4th at
p. 1095.) But where no such constitutional rights are at stake,
it is the facts of the case and not hypothetical situations that
determine the viability of a vagueness challenge. (Chapman
v. United States (1991) 500 U.S. 453, 467, 114 L. Ed. 2d
524, 111 S. Ct. 1919; People v. Sipe, supra, 36 Cal.App.4th
at p. 481.) Thus, if the conduct with which appellant is
charged falls clearly within the bounds of the ordinance,
appellant may not be heard to complain. (Tobe v. City of
Santa Ana, supra, 9 Cal.4th at p. 1095.)

Even considering appellant’s challenge as properly
presented, we do not find the ordinance unconstitutionally
vague. Appellant acknowledges that the Transient Occupancy
Tax ordinance is presumed to be valid and must be upheld
unless its unconstitutionality “’clearly, positively and
unmistakably appears.’” ( Hale v. Morgan (1978) 22 Cal.3d
388, 404, 149 Cal. Rptr. 375, 584 P.2d 512; Tobe v. City of
Santa Ana, supra, 9 Cal.4th at p. 1102; Voters for
Responsible Retirement v. Board of Supervisors (1994) 8
Cal.4th 765, 780, 884 P.2d 645.) Furthermore, even when
criminal penalties apply, a statute or ordinance will be upheld
against a vagueness challenge “ ‘ “if any reasonable and
practical construction can be given its language.” ‘ “ (State
Bd. of Equalization v. Wirick, supra, 93 Cal.App.4th at p.
420; People v. Townsend (1998) 62 Cal.App.4th 1390, 1400-
1401; People ex rel. Gallo v. Acuna (1997) 14 Cal.4th 1090,

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1117, 929 P.2d 596.) We are bound to give the ordinance
before us “a liberal, practical common-sense construction . .
. in accordance with the natural and ordinary meaning of its
words.” (Amador Valley Joint Union High Sch. Dist. v. State
Bd. of Equalization (1978) 22 Cal.3d 208, 245, 149 Cal.
Rptr. 239, 583 P.2d 1281.)

In this case, appellant argues, the ordinance “is so
vague that a hotel/motel operator cannot determine how to
avoid the tax and properly comply with its requirements and
that the respondent cannot avoid arbitrary enforcement.”
Specifically, as noted above, the ordinance uses circular
definitions of “hotel” and “transient” and fails to distinguish
between a person living from day to day or week to week in
a motel and a person living in an apartment on a month-to-
month tenancy. In addition, the provision for an “agreement
in writing” is not defined, thereby adding to the “definitional
confusion between ‘transient’ and ‘permanent’ occupancy.”
The “Exemptions” provision, section 25A.3, “further
exacerbates the problem of vagueness and circularity”
because it “does not set forth adequate guidelines or
definitions as to which class of ‘persons’ or ‘occupancy’ it is
‘beyond the City [sic] to impose the tax.’ “’

7 Section 25A.3, “Exemptions,” precludes imposition of
the tax on “any person as to whom, or any occupancy as to which,
it is beyond the power of the city to impose the tax herein
provided.” ( § 25A.3(a).) Also exempted are officers and
employees of foreign governments if they are made exempt by an
“express provision of federal law or international treaty.”

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Appellant relies principally on City of San Bernardino
Hotel/Motel Assn. v. City of San Bernardino, supra, 59
Cal.App.4th 237, where the Fourth District, Division Two,
found a hotel tax ordinance deficient because it inadequately
defined “hotel,” “occupancy,” and “transient.” He also cites
Britt v. City of Pomona (1990) 223 Cal. App. 3d 265, 272
Cal. Rptr. 724, where the Second District, Division Three,
invalidated an ordinance on vagueness grounds based on the
“circular” definitions of “hotel” and “transient” which failed
to distinguish temporary occupants from long-term residents
in identifying who was subject to the tax.

The ordinance before us does not present the same
interpretative difficulties as those examined in San Bernardino
and Britt. In-Britt, the City of Pomona used the term
“dwelling” in the definition of “hotel,” thus making it appear
that permanent residents also had to pay the tax. Significantly,
however, the definitions of the terms “hotel,” “occupancy,”
and “transient” did not confine the tax to those occupying a
hotel for any specific period.* Thus, it was readily susceptible
of an interpretation that a person “dwelling” in the hotel on
a long-term basis was subject to the tax. (223 Cal. App. 3d
at p. 279.) The use of the term “transient” added circularity,
not clarity, because a transient was defined as one who
occupied a “hotel,” while a “hotel” was a structure designed
for occupancy by transients. In San Bernardino the central

8 The contested ordinances were the result of amendments
that had eliminated the city’s previous limitation of the occupancy
period. Before the. 1987 and 1988 amendments the ordinance had
defined “transient” as a person who occupied a lodging for a period
of 30 days or less. (Britt, supra, 223 Cal. App. 3d at p. 270.)

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problem was not just that the ordinance used the term
“dwelling” in the definition of “occupancy.” Rather, the
ordinance was confusing because it described a transient as a
person who occupied a hotel for a period of 90 days or less
and one who occupied the hotel for more than 90 days
without a written agreement for “permanent” occupancy.
Both “agreement in writing” and “permanent occupancy”
were vague, as it was not clear to the court what kind of
writing could qualify as a written agreement and “permanent”
meant “any definite period of time,” except for the first 90
days in certain kinds of facilities. (59 Cal.App.4th at pp.
249-250.) The court also acknowledged the hotel/motel
association’s argument that the definitions of “hotel” and
“transient” were “needlessly contradictory” because the
former included occupancy for no more than 30 days,’ while
the latter included occupancy for 90 days or (in some
circumstances) more. (59 Cal.App.4th at p. 249.)

The Gilroy ordinance does not suffer from these
infirmities. It is true that the definitions of “hotel” and
“occupancy” refer to “dwelling” as well as “lodging or
sleeping” purposes, but the tax applies solely to those who
occupy a hotel “for a period of thirty (30) consecutive
calendar days or less.” There is no confusing 90-day period
as in San Bernardino; the hotel guest is invariably deemed to
be a transient until the first 30 days have passed, even if he or

° The association’s complaint referred to a definition of

“hotel” that appeared to encompass mobile homes and house
trailers in mobile-home parks occupied for 30 or fewer days. (San
Bernardino, supra, 59 Cal.App.4th at p. 246.)

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she appears to be “dwelling” in the hotel for that period."°
That the provision may require tax on a tenant’s rent for the
first 30 days does not make it impermissibly vague.
Furthermore, a written agreement providing for a longer
occupancy will remove the rental arrangement from the reach
of the ordinance. This exemption provision is not as
ambiguous as that of the San Bernardino ordinance, which
inadequately defined “permanent” as well as “agreement in
writing” in the context of the convoluted definition of
“transient.” (59 Cal.App.4th at p. 249.)

The “Exemptions” provision, section 25A.3, is hardly
a model of clarity in exempting whoever is “beyond the
power of the city to impose the tax.” Nevertheless, “the fact
that a term is somewhat imprecise does not itself offend due
process. Rather, so long as the language sufficiently warns of
the proscribed conduct when measured by common
understanding and experience, the statute is not
unconstitutionally vague.” (People v. Ellison (1998) 68
Cal.App.4th 203, 207-208; see also People v. Hazelton
(1996) 14 Cal.4th 101, 109, 926 P.2d 423 [mere fact that
statute requires interpretation does not make it

10 Although appellant suggests the City could not have

intended to require the tax for the first 30 days of a longer stay, the
language of this section appears to state otherwise: any person
occupying space in a hotel “shall be deemed to be a transient until
the period of thirty (30) days has expired unless there is an
agreement in writing between the operator and the occupant
providing for a longer period of occupancy.” Thus, the tax need not
be collected for the first 30 days only if there is a written agreement
providing for a stay of longer than 30 days.

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unconstitutionally vague].) “Because we are ‘condemned to
the use of words, we can never expect mathematical certainty
from our language.’ “ ( Hill v. Colorado, supra, 530 U.S. at
p. 733.) “Many, probably most, statutes are ambiguous in
some respects and instances invariably arise under which the
application of statutory language may be unclear. So long as
a statute does not threaten to infringe on the exercise of First
Amendment or other constitutional rights, however, such
ambiguities, even if numerous, do not justify the invalidation
of a statute on its face.” (Evangelatos v. Superior Court,
supra, 44 Cal.3d at p. 1201.)

Here the Director expressed no confusion in
determining that appellant had not entered into any written
agreements with patrons who had stayed in the motel for a
period shorter than 31 days; nor did he appear to have any
difficulty construing the ordinance to require the collection of
tax from those guests. We do not believe that the exemption
provision alone makes it impossible for a hotel operator to
comply with his or her duty to collect the transient occupancy
tax or that it promotes arbitrary enforcement of the law.

In summary, appellant has not demonstrated the facial
invalidity of the ordinance on constitutional vagueness
grounds. Because “ ‘it is clear what the ordinance as a whole
prohibits,’ “ and because the ordinance is “surely valid ‘in the
vast majority of its intended applications,’ “ his facial
vagueness claim must be rejected. (Hill v. Colorado, supra,
530 U.S. at p. 733.) The superior court properly upheld the
tax assessments against appellant.

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Disposition
The judgment is affirmed.

Premo, Acting P.J., and Mihara, J., concurred.

lSa

APPENDIX C

SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

[Filed June 20, 2000]

No. CV 779614

VINOD PATEL dba OAKS MOTEL and _)
PACHECO PASS MOTEL; JOSEPH A. __)
FILICE, General Partner of LEAVESLEY )
OCEAN INN-INVESTORS, a Limited
Partnership dba LEAVESLEY INN,

Petitioners/Plaintiffs,
Vv.
CITY OF GILROY,

Respondent/Defendant.

mee ee ee eee ee”

JUDGMENT

This cause came on regularly for trial on May 18,
2000, in Department 6 of the above-entitled Court, the
Honorable Leslie C. Nichols presiding. Petitioners appeared
by their attorney, Frank A. Weiser, and Respondent appeared
by its attorney, Jolie Houston. Evidence, both oral and
documentary, having been presented by both parties, the

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Superior Court of California Judgment - 6/20/00

cause having been argued and submitted for decision, and the
Court having caused to be made and filed herein its Notice of
Decision.

Pursuant to the Court Orders and consistent with the
Stipulations entered into by Petitioners and Respondent City,
the issues for the Writ of Mandate and Complaint for
Declaratory Relief and Injunctive Relief were limited to the
following issues:

(a) Whether the tax assessment was
illegal because the City’s
Transient Occupancy Tax
Ordinance is “void for
vagueness” under the Fifth and
Fourteenth Amendments of the
United States Constitution.
Petitioners base this challenge
on City of San Bernardino
Hotel/Motel Association v. The
City of San Bernardino (1997)
59 Cal. App. 4th 237.

(b) Whether the tax assessment was

illegal because of the City’s

Transient Occupancy Tax

Ordinance both on its face and

| as applied to Petitioners
violated the due _ process
| requirement that government
| must provide a fair and
meaningful predeprivation

and/or postdeprivation remedy

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Superior Court of California Judgment - 6/20/00

(c)

The court having answered each of the questions posed
by the foregoing issues in the negative, it is now appropriate

from any disputed taxation.
This challenge will be based on
McKesson Corp. v. Florida
Alcohol & Tobacco Division
(1990) 496 U.S. 18 and
subsequent United States
Supreme Court authority
following McKesson.

Whether the tax assessment was
illegal because the City’s
Transient Occupancy
Ordinance both on its face and
applied to Petitioners, violated
their rights under the Fourth
Amendment of the United
States Constitution by the fact
that the ordinance provides the
owner/operator of the motel
must keep records for a
specified time, and the City has
the power to inspect records
without a subpoena or an
administrative warrant. This
challenge is based on Pinney v.
Phillips (1991) 230 Cal. App.
3d 1570 and United States
Supreme Court relied upon by
Pinney entitled New York v.
Burger (1987) 482 U.S. 691

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Superior Court of California Judgment - 6/20/00

that judgment be entered in favor of the City of Gilroy as
follows:

IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED THAT PETITIONERS RECOVER NOTHING
BY THIS SUIT AND THAT JUDGMENT BE ENTERED IN
FAVOR OF RESPONDENT CITY OF GILROY AS
FOLLOWS:

(1) That Petitioners’ two causes of
action against the City for Writ
of Mandate be denied in their
entirety and that the Writ of
Mandate vacating the City’s tax
assessments against Petitioners
not be issued and said tax
assessments against Petitioners
not be set aside;

(2) That Petitioners’ cause of
action against the City for
Declaratory Relief and
Injunctive Relief be denied in
its entirety and that the
Respondent City’s Transient
Occupancy Tax Ordinance is
hereby declared to be a valid
and constitutional ordinance;

(3) That Petitioners recover
nothing by this suit;

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Superior Court of California Judgment - 6/20/00

(4) | That Respondent City shall be
entitled to recover costs of suit
herein incurred.

Dated: June 16, 2000 /s/
_ Judge of the Superior Court

20a

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386015_0550%3A1. Public record. Not legal advice.