Matthew Alvarez
Direct Dial: (415) 732-4502
E-mail: [email protected]
May 8, 2024
Ru t an & Tu ck er , L LP | 15 0 Po st S tre et , Su it e 405 Sa n Fran c is c o, CA 941 08 | 415 -7 32 -7 700 | Fax 415- 73 2- 770 1 Or ang e C ounty | P al o Alto | San Fr anc i s co | Sc otts da le | www.r uta n. c om 3132/-
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Douglas T. Sloan, Esq.
City Attorney
City of Santa Monica
1685 Main Street, Third Floor
Santa Monica, CA 90401
Re: Settlement Offer re Anticipated Litigation; Further Response to Initiative Signature Requirement Controversy Demanded
** DEADLINE TO RESPOND: WEDNESDAY, MAY 15 at 5:00 P.M. ** Dear Mr. Sloan:
Please be advised that this letter constitutes formal notice of anticipated litigation against the City of Santa Monica. For the reasons explained below, we hereby demand a response from the City by 5:00 p.m. on Wednesday, May 15, 2024.
If no response is received and the City chooses to persist in its wrongful reading of the law for reasons we have previously explained (see attached letter), a petition for writ of mandate and compliant for injunctive relief will be filed on the morning of May 16, 2024. The litigation will be subject to a highly accelerated hearing schedule per Elections Code section 13314, and the City will still be required to verify the signatures within 30 working days from the initiative submission date (May 6, 2024) pursuant to Elections Code section 9211. Be further advised that we will be seeking attorney’s fees pursuant to California’s private attorney general statute as a consequence of enforcing important public rights.
* * *
As you are aware, my office represents Pamela O’Connor, an elector who lives in the City of Santa Monica. Ms. O’Connor wishes to place a citizen’s initiative on the November 2024 ballot to amend the City’s municipal code regarding the repeal of certain property transfer tax provisions found in S.M.M.C. section 6.96. To that end, Ms. O’Connor has gathered over 4,000 signatures supporting the placement of the initiative on the ballot, satisfying her legal obligations per Article XIII.C, Sec. 3 of the California Constitution.
The City has wrongly decided, however, that Ms. O’Connor must meet a higher signature threshold, arguing—incredibly—that the municipal code provisions that Ms. O’Connor seeks to Douglas T. Sloan, Esq.
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repeal via initiative do not involve a “tax” because S.M.M.C. section 6.96 is a creature of initiative, and therefore other regulations apply instead.
For the reasons we explained to you in our May 4, 2024 letter, the City’s position is entirely bereft of legal merit. (See attached letter from City.) Its arguments ignore controlling law and the plain text of the California Constitution. Furthermore, as cited in our letter to you, the City has repeatedly, publicly, and even statutorily, conceded that S.M.M.C. section 6.96 involves a tax. (See attached Measure GS ballot question drafted by your office.) We were distressed to learn that the City persists in its refusal to accept that Ms. O’Connor has secured a sufficient number of signatures, and thus has refused to forward the signatures to the County’s Registrar of Voters for verification. It is apparent that the City is doubling-down on its intent to deprive Ms. O’Connor—and the four thousand other Santa Monica voters who join her— of the right to have the initiative placed on the November 2024 ballot.
Accordingly, please understand this letter as constituting formal notice of anticipated litigation against the City by Ms. O’Connor and an offer to settle such litigation. We once again demand that the City reverse course and honor its constitutional duties by forwarding the signatures gathered by Ms. O’Connor to the County’s Registrar of Voters, as they are of sufficient quantity per California’s constitutional requirements.
If we do not hear from the City by 5:00 p.m. on Wednesday, May 15, 2024 that the City will forward the signatures to the County Registrar of Voters for signature verification, we will file suit against the City on the morning of Thursday, May 16, 2024.
If the City chooses to continue violating the law by (1) refusing to recognize that she has gathered a sufficient number of signatures pursuant to clear constitutional law; and (2) refusing to immediately forward those signatures to the County’s Registrar of Voters for processing and validation, then Ms. O’Connor is prepared to file a petition for writ of mandate and complaint for injunctive relief in Los Angeles Superior Court on the morning of May 16, 2024. This is her statutory right per Elections Code section 13314, which provides that “[a]n elector may seek a writ of mandate alleging that an error or omission has occurred, or is about to occur, . . . or that any neglect of duty has occurred, or is about to occur,” regarding the administration of an election.
Further, we will be moving on an ex parte basis to ask that the court advance the hearing schedule on the writ and complaint, resulting in a highly compressed briefing schedule and hearing date. Such actions “shall have priority over all other civil matters” in a court of law. (Id., subd. (a)(3).) It is reasonable to expect that the lawsuit will begin and conclude within one month’s time.
Lastly, we need not remind the City of the significant financial exposure it risks by not following the plain text of the law. If successful (and we expect to be for the reasons explained in Douglas T. Sloan, Esq.
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our May 4 letter to you; attached), we will move for recovery of all of Ms. O’Connor’s attorneys’ fees and related litigation costs and expenses pursuant to California’s private attorney general statute, codified at Code of Civil Procedure 1021.5. This code provision is patently applicable here, wherein Ms. O’Connor will be vindicating important public rights and will therefore be entitled to full financial recovery as a consequence of her efforts to do so. * * *
We anticipate the City’s timely formal response to this letter—and its compliance with the law. The initiative will appear on the November 2024 ballot, either through the City’s voluntary compliance or compulsion by a court of law. For all involved, the former is preferrable. But Ms.
O’Connor is nonetheless prepared to litigate the matter aggressively and successfully.
Sincerely,
RUTAN & TUCKER, LLP
Matthew Alvarez
MA:jp
cc: Nikima Newsome, Interim City Clerk
David White, City Manager
Phil Brock, Mayor
Lana Negrete, Mayor Pro Tem
Gleam Davis, Councilmember
Christine Parra, Councilmember
Jesse Zwick, Councilmember
Caroline Torosis, Councilmember
Oscar de la Torre, Councilmember
Matthew Alvarez
Direct Dial: (415) 732-4502
E-mail: [email protected]
May 4, 2024
Ru t an & Tu ck er , L LP | 15 0 Po st S tre et , Su it e 405 Sa n Fran c is c o, CA 941 08 | 415 -7 32 -7 700 | Fax 415- 73 2- 770 1 Or ang e C ounty | P al o Alto | San Fr anc i s co | Sc otts da le | www.r uta n. c om 3132/099999-0084
20549889.2 a05/04/24
VIA E-MAIL
Katie Doerr, Esq.
Deputy City Attorney, Advisory Unit
City of Santa Monica
1685 Main Street, 3rd Floor
Santa Monica, California 90401
Re: Response to the City of Santa Monica’s “Signature Threshold” Letter May 2, 2024 Dear Ms. Doerr:
We are in receipt of your letter dated May 2, 2024 entitled “Signature Threshold” and we are aghast at its lack of legal foundation and the City’s wanton disregard for its own citizens’ right to the initiative. That the City would so badly misinterpret the law – in order to disenfranchise thousands of its own citizens – is downright offensive. For the reasons stated below, the City’s arguments fail entirely, and we demand that it reverse course immediately. If it does not, we will be forced to avail ourselves of all legal remedies, including a lawsuit against the City, where the City will assuredly lose and be required to pay our legal fees.
The City’s position fails for at least four reasons. First, it relies on a legal distinction among taxes, fees, charges, and assessments that is no longer good law. (City Ltr., at p. 1; Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248, 260 [219 Cal.Rptr.3d 859, 867].).) Second, the City’s preposterous interpretation results in a complete invalidation of Art. III.C. Sec 3 in all circumstance, which is an absurd result that offends all manners of statutory construction. Third, the City ignores the plain, reasonable interpretation of Art. III.C, Sec 3, and in doing so, violates the constitutional rights of its own citizens. Finally, the City cannot legitimately feign ignorance as to how many times it called Measure GS a “tax” in published documents and at public hearings, making its current claim that Measure GS is not a tax all the more preposterous.
1. The City’s Contention that Measure GS is not a “tax” is Plainly Wrong.
The City’s primary argument relies on a confusing and irrelevant distinction with respect to whether Measure GS is a “tax.” (See City Ltr., at p. 1 [citing Wilde v. City of Dunsmuir (2020) 9 Cal.5th 1105, 1116 [266 Cal.Rptr.3d 688, 695] [without quoting the source, red-flagged authorities, e.g., Sinclair].) The key provisions of Proposition 218, cited by the City but otherwise ignored, provide as follows in full:
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[T]he initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.
(Cal. Const., Art. XIII.C, section 3 [added Nov. 5, 1996, Prop. 218 initiative measure] [emphasis added].)
In response to the plain language of the above-quoted constitutional provision, the City suggests “[c]ourts have long recognized that the term ‘tax’ has no fixed meaning.” (City Ltr., at p. 1.) But, the City fails to acknowledge that the law has changed. As the Jacks Court explains well, infra:
Most recently, in 2010, after the charge at issue in this case was adopted, state voters approved Proposition 26. That measure amended the Constitution to provide that for purposes of article XIII C, which addresses voter approval of local taxes, “ ‘tax’ means any levy, charge, or exaction of any kind imposed by a local government” [ . . . ].
The local government bears the burden of establishing the exceptions. (3 Cal.5th at p. 260 [internal citations and listed exceptions omitted].) It is against this backdrop that the City suggests it can violate the constitutional provisions with abandon and “impose a signature requirement higher than that applicable to statewide statutory initiatives.” (See City Ltr., at p. 1 [relying on mutable definition of “tax” that evidently depends entirely on the idiosyncratic context]; Jacks, supra, 3 Cal.5th at p. 260; Cal. Const., Art. XIII.C, section 3.) Essentially, the City contends it is immune from ever invoking Art. XII.C, Sec. 3, but unfortunately the cited authority is no longer good law and thus provides no such protection. (See Jacks, supra, 3 Cal.5th at p. 260.)
The remaining authority cited by the City is similarly inapposite. (See City’s Ltr., at p. 2 [citing authorities broadly construing the initiative power, which is not supportive of the City’s position that it can act to prohibit or limit the initiative power being exercised by the voters in this situation]; City & Cty. of San Francisco v. All Persons Interested in Matter of Prop. C (2020) 51 Cal.App.5th 703, 708–709 [265 Cal.Rptr.3d 437, 439] [finding the provisions “coexisting with, not displacing, the people's power to enact initiatives by majority vote.”]; and Cal. Cannabis Coal. v. City of Upland (2017) 3 Cal.5th 924, 931 [222 Cal.Rptr.3d 210, 215] [“we agree with the Court of Appeal that article XIII C does not limit voters’ ‘power to raise taxes by statutory initiative.’”].) Katie Doerr
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Case law more than supports the proposition that Measure GS is a tax, assessment, fee, or charge. In any case, Art. XIII.C, Sec. 3 applies and the lower signature threshold must be observed by the City.
2. The City’s Interpretation Renders Art. III.C, Sec. 3 Inapplicable in any Circumstance.
Since 1978, all local taxes must be approved by the voters and cannot be unilaterally adopted by the local legislature.1 (Cal. Const. Art. IIIC, Sec 2 [all local general and special taxes must be approved by voters; Cal. Govt. Code section 53722 [“No local government. . . may impose a special tax unless and until such special tax is submitted to the electorate and approved by a twothirds vote of the voters. . ..”; Howard Jarvis Taxpayers Assn. v. City of La Habra, 25 Cal. 4th 809, 818 [explaining that voter approval is a precondition to the imposition and collection of a special or general tax].) Art. III.C, Sec. 3 deals with “signature requirements” for qualifying initiatives; that is, it only applies to citizen-initiatives and of course is not applicable to initiatives placed on the ballot via the legislature because the legislature does not need to collect signatures to do so.
The City’s stated position is that the electorate is not a “local government” and therefore cannot impose a tax to which its repeal would be subject to Art. III.C, Sec. 3’s signature requirements.
The City states that the lowered signature threshold is a “procedural requirement applicable to a reduction or repeal of a tax imposed by the local government, not by the electorate through initiative,” willfully or ignorantly ignoring the crucial fact that all local taxes must be approved (i.e., “imposed”) by the electorate through initiative. There is no such thing as a tax imposed by a local government under the City’s specious definition of local government.
Because every local tax must be approved – or using the City’s parlance, “imposed” – by voters and because every citizen-initiative requires the collection of signatures, the City’s logic lands on the absurd conclusion that Art. III.C., Sec 3’s signature requirements could never be triggered under any circumstance. Laws cannot be interpreted to have no meaning or result in absurd outcomes, and yet the City does exactly that. (People v. Martinsen, 193 Cal. App. 3d 843, 848 [explaining certain basic rules of statutory construction, including construing laws so as to give a reasonable and common-sense construction consistent with the apparent purpose of the law, and to avoid a result that leads to “mischief or absurdity.”].) That the City would attempt to interpret a Constitutional right out of existence entirely is indefensible. For this reason alone, the City must reverse its decision.2
1 This is in fact the reason that Measure GS was sent to the voters for approval; but for this requirement, the Santa Monica City Council could have adopted Measure GS outright without the need for voter approval.
2 We also note that the City’s reliance on California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924 is badly misplaced; the City of Upland case ultimately dealt with the vote requirement for voter approved taxes; i.e., that special tax initiatives placed on the ballot via citizen-initiatives require only a 50+1 approval threshold while special tax initiatives placed on Katie Doerr
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3. The City’s Position Ignores the Plain Language of Art. III.C, Sec 3.
Rules of statutory construction require a natural, “plain language” read of the provision, giving significance to every word, with an aim to a harmonious reading of the language in its relevant context. (See Chesney v. Byram (1940) 15 Cal.2d 460 [101 P.2d 1106].) The City fails to harmonize Art. III.C, Sec 3 in any reasonable manner. The City fails to meaningfully grapple with the fact that it seeks to impose a heightened signature requirement directly contrary to the constitutional provision at issue and that the City cannot “prohibit or otherwise limit [the initiative power] in matters of reducing or repealing any local tax, assessment, fee or charge.” By requiring a heighted signature requirement, the City’s ill-conceived interpretation of the law plainly violates its constitutional mandate not to limit the citizen’s initiative power; a heighted signature requirement is a clear limitation on the citizens’’ right to the initiative.
Further, Art. XIII.C, Sec. 3 states that the lower signature requirement applies not just to “taxes,” but also to “assessments, fees, and charges.” The City cannot possibly contend that Measure GS is neither a tax, an assessment, a fee, or a charge. If it is none of these things, then what is it? Again, the burden to establish that it is not one of these things is on the City and it a burden the City cannot meet. The City’s interpretation ignores the provisions that do not suit its ends and purposefully misinterprets the portions that contradict its goal to stop this initiative by imposing heightened requirements on the initiative’s qualification for the ballot.
4. The City Has Always Considered Measure GS to be a “Tax.” The City’s sudden and abrupt contention that Measure GS is not a tax is patently absurd because the City has always viewed it as a tax. First, the City’s own municipal code labels it a tax. (See S.M.M.C. section 6.96 [“REAL PROPERTY TRANSFER TAX”]; S.M.M.C section 6.96.10 [“This Chapter shall be known as the “Real Property Transfer Tax Ordinance of the City of Santa Monica.”]; S.M.M.C section 6.96 et seq. [using the word “tax” well over 200 times].) Second, the ballot question for Measure GS – written by your office – says it is a tax. (“…and amending Chapter 6.96 to provide a third tier transfer tax rate of…”; emphasis added]. Third, the City’s 30- day report for Measure GS – written by City staff – refers to Measure GS as a tax. Fourth, the resolution to place Measure GS on the ballot – again, written by your office – refers to Measure GS as a tax four times.
For the City to now turn around and say that Measure GS is not a tax is beyond belief. And for a City to do so all because it wishes to invalidate the will of thousands of its citizens who want to vote on this initiative is deeply offensive to any semblance of a functioning democracy. the ballot via legislatures requires a 2/3rds majority vote by the electorate, and had nothing to do with the entirely distinct issue of signature requirements for qualifying citizen-initiatives for the ballot. Such signature requirements can only apply in citizen-initiatives because a citizen-initiative is the only type of initiative that requires signatures in order to qualify for the ballot.
Katie Doerr
May 4, 2024
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5. Conclusion.
For the reasons stated above, the City must immediately reverse its decision. As the courts have recently reiterated, it is the electorate’s decision and only the electorate’s decision to limit the right to restrict, repeal, or affect local taxes by the power of initiative. Because the electorate has not done so, the City cannot unilaterally do so. Allowing for that would turn the whole process on its head – as the City is attempting to do right now. (See Cal. Cannabis Coal., supra, 3 Cal.5th at p. 931.) Without any legal or factual support, the City cannot continue to deprive the citizens of Santa Monica their right to the initiative. We will be submitting over 4,000 valid signatures – signed by the citizens whose rights you are sworn to protect – on Monday, May 8, and we expect the City to fulfil its obligation to send the signatures to Los Angeles County Registrar of Voters for verification. Any other conclusion is a dereliction of the City’s duty and an indefensible affront to the rule of law.
Sincerely,
RUTAN & TUCKER, LLP
Matthew C. Alvarez
MA:st
cc: Douglas T. Sloan, City Attorney
Nikima Newsome, Interim City Clerk
Office of the City Attorney
City Hall
1685 Main Street, Room 310
Santa Monica, California 90401
tel: 310 458-8336 ● fax: 310 395-6727
May 2, 2024
VIA E-MAIL
Matthew Alvarez, Esq.
[email protected]
Re: Signature Threshold
Dear Mr. Alvarez:
You have asked for the City’s view on the proper signature requirement for “An Initiative Measure to Amend Santa Monica Municipal Code Chapter 6.96 to Partially Exempt Multifamily Developments from Par of the Third Tier Transfer Tax” (the “Current Initiative”). The Current Initiative proposes a partial repeal of Measure GS, enacted by voter initiative in 2022. You have stated you believe the proper signature threshold is governed by Art. XIII.C, Sec. 3, of the California Constitution:
Notwithstanding any other provision of this Constitution, including, but not limited to, Sections 8 and 9 of Article II, the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.
Courts have long recognized that the term “tax” has no fixed meaning, and may be construed narrowly or broadly depending on its particular context and the purpose for which the definition is to be used. (Wilde v. City of Dunsmuir(2020) 9 Cal.5th 1105, 1117- 1118.) Section 1(e) of Article XIII.C provides in pertinent part that, “[a]s used in this article, ‘tax’ means any levy, charge, or exaction of any kind imposed by a local government . . . .” (emphasis added). Section 1(b) of Article XIII.C provides that “local government” means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity. The term “local government” does not include the voting electorate, and there is no evidence that Proposition 218 was intended to “rescue voters from measures they might, through a majority vote, impose on May 2, 2024
themselves.” (California Cannabis Coalition v. City of Upland (2017) 3 Cal.5th 924, 938- 940.)
While California Cannabis’s ruling dealt with the timing of a general tax election under Art.
XIII.C., Sec. 2(b), courts have extended the interpretation of “local government” to other provisions of Art. XIII.C, where the two provisions “are found in the same article and section of the state Constitution,” “were both added by Proposition 218,” “employ parallel language and incorporate the exact same definition of local government set forth in Article XIII C, section 1.” (City and County of San Francisco v. All Persons Interested in Matter of Prop. C (2020) 51 Cal.App.5th 703, 723.)
The ordinary meaning of “impose” is “to establish,” not “to collect.” (California Cannabis, 3 Cal.5th at 944.) Here, the portion of Measure GS sought to be partially repealed was imposed by the electorate via initiative, not by the local government. Thus, pursuant to the plain language of Art. XIII.C and the authority of California Cannabis, Measure GS is not a “tax” for purpose of Art. XIII.C.
Procedural requirements imposed on state and local governments do not apply to initiatives unless there is unambiguous evidence they were so intended. (Id. at 942.) The signature threshold of Art. XIII.C, Sec. 3, is a procedural requirement applicable to a reduction or repeal of a tax imposed by the local government, not by the electorate through initiative. Absent express authority the signature threshold of Art. XIII.C, Sec. 3 should apply to taxes imposed via voter initiative, the appropriate signature threshold for the Current Initiative is that found in Elections Code 9215.
If you are aware of legal authority to the contrary, we would be pleased to consider it.
Sincerely,
Katie Doerr
Deputy City Attorney
Cc: Douglas T. Sloan, City Attorney
Nikima Newsome, Interim City Clerk