220 Cal. App. 4th 107
Cal. Ct. App.2013Background
- Los Angeles County had a 1991 utility users tax (UUT) at 5%. Class action (Oronoz/Pitts) challenged its legality; parties negotiated a settlement requiring the County to (among other things) hold a November 4, 2008 election to "validate" and reduce the UUT to 4.5%, pay $10M to a general fund and $65M to a claims fund.
- A short-form settlement (June 30, 2008) and a long-form settlement (signed November 5, 2008, the day after the election) released claims by class members for conduct through November 4, 2008; class counsel emphasized the election as a key non-monetary benefit and sought large fees.
- Measure U (Nov. 4, 2008) was approved by ~62.9% of voters in unincorporated areas, enacting the 2008 UUT at 4.5% and including ballot materials (title, impartial analysis, arguments, redlined ordinance text).
- Separate plaintiffs (Owens and Munoz) filed a post-election class action challenging Measure U on due process, free speech, Proposition 218, and Elections Code grounds. Pitts (a class representative in the earlier case) moved to enforce the settlement, arguing the election wasn’t held "pursuant to applicable law."
- The trial court denied Pitts’s enforcement motion and denied plaintiffs’ challenges to Measure U on the merits, finding Pitts also waived/was judicially estopped. The Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Effect of settlement/release (waiver) | Pitts: settlement didn’t bar post-election challenge because election had to be held "pursuant to applicable law" and judgment wasn’t final at time of election | County: long-form release discharged all claims through Nov 4, 2008; Pitts knew facts and released them | Held: Pitts waived/released these claims by signing long-form settlement; barred from challenge |
| Judicial estoppel | Pitts: may challenge election despite prior advocacy | County: Pitts and counsel previously celebrated the election as a key benefit; inconsistent positions warrant estoppel | Held: Judicial estoppel applies — Pitts successfully advocated the election pre-judgment, then attacked it post-judgment; court did not abuse discretion applying estoppel |
| Due process / deceptive ballot materials | Owens/Munoz/Pitts: ballot materials were misleading or omitted material facts, so election violated due process | County: ballot title, impartial analysis, redlined ordinance and opposition arguments were reasonably fair; voters had full text; very high bar for post-election invalidation | Held: Ballot materials did not "profoundly mislead" voters; due process claim fails |
| Proposition 218 / Elections Code / Free speech / Stanson claim | Plaintiffs: Measure U improperly continued/enacted taxes without complying with Prop 218 or Elections Code; County used ballot materials to improperly influence voters (free speech/campaign expenditure concerns) | County: held an election complying with law; ballot materials were informational, not an unlawful campaign expenditure; Prop 218 inapplicable to tax first imposed long before the window period | Held: Prop 218 and Elections Code claims fail; Stanson/free-speech claim fails because plaintiffs show no public-fund campaigning that crossed line from informational to impermissible campaign activity; 2008 UUT is a general tax |
Key Cases Cited
- Horwath v. City of East Palo Alto, 212 Cal.App.3d 766 (Cal. Ct. App. 1989) (post-election due process challenge requires showing ballot materials so misleading they prevent informed choice)
- Kerr v. County of Orange, 106 Cal.App.4th 914 (Cal. Ct. App. 2003) (acknowledges limited recognition of post-election constitutional challenges to ballot materials)
- Stanson v. Mott, 17 Cal.3d 206 (Cal. 1976) (distinguishes improper public treasury-funded campaign activity from permissible informational activities)
- Vargas v. City of Salinas, 46 Cal.4th 1 (Cal. 2009) (government may express views on measures but cannot expend public funds to mount a campaign)
- Silicon Valley Taxpayers’ Assn., Inc. v. Santa Clara County Open Space Authority, 44 Cal.4th 431 (Cal. 2008) (voter approval cannot substitute where additional substantive constitutional requirements for an assessment are unmet)
- Blix Street Records, Inc. v. Cassidy, 191 Cal.App.4th 39 (Cal. Ct. App. 2010) (judicial estoppel elements and review standards)
- MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc., 36 Cal.4th 412 (Cal. 2005) (doctrine of judicial estoppel preserves integrity of courts and prevents inconsistent positions)