92 Cal.App.5th 494
Cal. Ct. App.2023Background
- Plaintiffs (Campana and Evilsizor) challenged EBMUD’s three-tier residential/commercial water rates as violating Prop. 218 (Cal. Const., art. XIII D, § 6(b)) because higher tiers are not shown to be proportional to parcel-specific cost.
- Plaintiffs alleged they paid EBMUD water charges since before July 2018, mailed a Government Claims Act notice July 17, 2019, and sued Jan. 13, 2020 (first complaint) and filed a first amended complaint Jan. 2021.
- EBMUD adopted the challenged rate resolutions in July 2017 (rates for FY 2018–19) and July 2019 (rates for FY 2020–21); the trial court took judicial notice of those resolutions.
- EBMUD demurred, asserting the action was time-barred by the 120-day validation statute (Pub. Util. Code § 14402) because the gravamen was a challenge to the rate-adoption resolutions; the trial court sustained the demurrer without leave to amend.
- The Court of Appeal affirmed: plaintiffs’ refund/declaratory/injunctive claims are essentially attacks on the prior rate resolutions and therefore subject to the accelerated 120-day limitations period; their claims were untimely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint is time‑barred under the 120‑day validation statute (Pub. Util. Code §14402) | Plaintiffs: claim accrues anew each time unconstitutional charges are assessed/collected; timely under Gov. Code §911.2 notice and later suit | EBMUD: claim attacks the validity of the resolutions adopting rates; accrual was on the resolutions’ effective dates (2017, 2019); §14402 applies | Held: §14402 governs; cause accrued at resolution effective dates; claims barred as untimely |
| Whether a refund claim can avoid the validation statute by characterizing it as a purely monetary claim | Plaintiffs: seeking only restitution/refund, not invalidation of the resolutions | EBMUD: refund claim necessarily depends on a finding that the rate resolutions are invalid | Held: Court rejects plaintiff’s recharacterization; relief would invalidate resolutions; validation-limitations apply |
| Whether Prop. 218 §6(d) or City of La Habra supports accrual on each collection (i.e., fresh limitations period) | Plaintiffs: §6(d) and City of La Habra allow challenges within statutory period after any collection | EBMUD: La Habra is inapposite; rate resolutions are subject to validation statutes and different rules | Held: La Habra distinguished; validation statutes control rate/adoption challenges, not monthly collections |
| Whether Government Claims Act filing or other notice tolls or extends the validation statute | Plaintiffs: claim presentation under Gov. Code §911.2 shows timely accrual within one year | EBMUD: claim presentation does not extend the 120‑day validation limitation | Held: Claim presentation did not alter the governing validation statute; limitations bar remains |
Key Cases Cited
- Plantier v. Ramona Mun. Water Dist., 7 Cal.5th 372 (Cal. 2019) (Prop. 218 imposes substantive/procedural limits on property‑related fees)
- City of Palmdale v. Palmdale Water Dist., 198 Cal.App.4th 926 (Cal. Ct. App. 2011) (tiered water rates must correspond to actual cost at each usage level)
- Capistrano Taxpayers Assn., Inc. v. City of San Juan Capistrano, 235 Cal.App.4th 1493 (Cal. Ct. App. 2015) (agencies must calculate actual costs for different usage tiers)
- Regents of Univ. of Cal. v. City & County of San Francisco, 115 Cal.App.4th 1109 (Cal. Ct. App. 2004) (enactment of a rate, not later collection, triggers the accelerated limitations period)
- Utility Cost Management v. East Bay Mun. Utility Dist., 79 Cal.App.4th 1242 (Cal. Ct. App. 2000) (refund claims attacking rate decisions are subject to the short limitations period)
- Hensler v. City of Glendale, 8 Cal.4th 1 (Cal. 1994) (cannot evade limitations by recharacterizing relief as damages)
- Coachella Valley Water Dist. v. Superior Court, 61 Cal.App.5th 755 (Cal. Ct. App. 2021) (refund claims aimed at rate validity are subject to validation statutes)
- Golden Gate Hill Dev. Co. v. County of Alameda, 242 Cal.App.4th 760 (Cal. Ct. App. 2015) (shortened limitations applies where refund claim challenges legality of tax scheme)
- Howard Jarvis Taxpayers Assn. v. City of La Habra, 25 Cal.4th 809 (Cal. 2001) (limited rule allowing challenge within statutory period after collection for certain taxes; distinguishable)
- Daneshmand v. City of San Juan Capistrano, 60 Cal.App.5th 923 (Cal. Ct. App. 2021) (post‑settlement refund program and related claims; not dispositive on accrual for inverse‑validation claims)
- Plata v. City of San Jose, 74 Cal.App.5th 736 (Cal. Ct. App. 2022) (Government Claims Act notice required for §6(b) refund claims; did not decide applicable statute of limitations)