By Cori M. Badgley
In Ardon v. City of Los Angeles (2011) 52 Cal.4th 241, the California Supreme Court held that class actions for tax refunds against a local governmental entity are permissible under section 910 of the Government Code (i.e., Government Claims Act) in the absence of a specific statutory tax refund procedure.
The Government Claims Act provides procedures for filing a claim against a governmental entity. Although the Government Claims Act (Gov. Code § 900 et seq.) exempts any “claims under the Revenue and Taxation Code or other statute prescribing procedures for the refund of any tax,” the City of Los Angeles’ telephone user tax at issue in this case was not governed by any statutory refund procedures. Therefore, the proper procedure for challenging the user tax was the Government Claims Act.
In this case, the plaintiffs wanted to file their claim as a class action, but upon filing, it was rejected by the City Attorney for lack of legal standing on the grounds that a claim could not be filed as a class action under Government Code section 910. Plaintiffs challenged the City Attorney’s decision, and eventually, the Supreme Court took review to determine the narrow legal question of whether a class action is permitted under the procedures of the Government Claims Act. The court found that unlike the procedures for State imposed vehicle license fees and use taxes addressed in Woosley v. State of California (1992) 3 Cal.4th 758, the Government Claims Act did not restrict the bringing of claims to individuals, but instead, “claimant” could be a class of claimants. Therefore, the court held that a class action was permissible.
Cori M. Badgley is an attorney at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.