SUPERIOR COURT OF CALIFORNIA
COUNTY OF SANTA CLARA

RAYMOND AND MICHELLE PLATA, individually and on behalf of other members of a class of similarly situated residents and taxpayers,

Plaintiffs,

vs.

CITY OF SAN JOSE, a California municipal corporation, and DOES 1 THROUGH 100,

Defendants.
Case No. 2017-1-CV-311789

TENTATIVE RULING RE: MOTION TO STRIKE AND/OR DEMURRER

The above-entitled action comes on for hearing before the Honorable Thomas E. Kuhnle on November 2, 2018, at 9:00 a.m. in Department 5. The Court now issues its tentative ruling as follows:

I. INTRODUCTION

Plaintiffs Raymond and Michelle Plata (collectively, “Plaintiffs”) bring this class action against defendant City of San Jose (“Defendant” or the “City”), which owns and operates the San Jose Municipal Water System (“Muni Water”). (Complaint for Refund and Injunctive Relief (“Complaint”), ¶¶ 1, 6.) Muni Water is the exclusive water utility for approximately 10 percent of the population of San Jose. (Id. at ¶ 7.) Plaintiffs allege the City has used and transferred Muni Water funds for purposes other than those for which the funds were collected, in violation of Proposition 218. (Id. at ¶¶ 10, 12.)

The Complaint, filed on June 13, 2017, sets forth a single cause of action for Violation of Article XIII D of the California Constitution. Defendant now moves to strike the prayer for relief for general and special damages, and demurs to the first cause of action “to the extent it alleges that the City violated Proposition 218 with its tiered water rates in effect in fiscal year 2016-2017.” (Notice of and Motion to Strike; Notice of and Demurrer to Complaint, p. 1:23-28.)

II. DEFENDANT’S REQUEST FOR JUDICIAL NOTICE

Defendant requests the Court take judicial notice of the following:

(1) The complaint in Raymond and Michelle Plata v. City of San Jose, Santa Clara County Superior Court No. 17CV311789, and the government claim attached to it;

(2) The Order Re: Defendant City of San Jose’s Motion in Limine Regarding Plaintiffs’ Request for Damages, dated September 11, 2017, in Raymond and Michelle Plata v. City of San Jose, Santa Clara County Superior Court No. 2014-1-CV-258879 (consolidated with case no. 2016-1-CV-294032);

(3) The text of Proposition 218, which is now Article XIII D of the California State Constitution;

(4) Excerpts from the November 5, 1996, California Ballot Pamphlet prepared by the California Secretary of State, which includes the text of Proposition 218 and ballot materials that were presented to voters on Proposition 218; and

(5) The Court’s Statement of Decision and Judgment in Raymond and Michelle Plata v. City of San Jose, Santa Clara County Superior Court No. 2014-1-CV-258879 (consolidated with case no. 2016-1-CV-294032).

The Court can take judicial notice of Article XIII as the constitutional law of California. (Evid. Code, § 452, subd. (a).) The Court can take judicial notice of the ballot pamphlet as an official government document. (Evid. Code, § 452, subd. (c); Vargas v. City of Salinas (2009) 46 Cal.4th 1, 22, fn. 10.) The other documents are subject to judicial notice as court records. (Evid. Code, § 452, subd. (d).) Accordingly, the request for judicial notice is GRANTED.

III. DISCUSSION

Defendant’s motion is, in effect, two motions in one. Defendant moves to strike paragraph 3 of the prayer for relief in which Plaintiffs seek general and special damages and also demurs to the Complaint based on an argument that Plaintiffs’ government claim does not fairly reflect the theory that Plaintiffs will be pursuing in this litigation.

A. Demurrer

The Court will first address the demurrer. Defendant argues Plaintiffs’ government claim does not reflect a theory Plaintiffs will pursue in this litigation – that Defendant’s tiered rates in effect in fiscal year 2016-2017 purportedly violated Proposition 218. Defendant states it is “aware that tiered rates represent a potential issue only because Plaintiffs’ counsel announced it in court at the most recent Case Management Conference and Plaintiffs raised tiered rates at the eleventh hour in the companion cases tried in the fall of 2017.” (Defendant City of San Jose’s Memorandum of Points and Authorities in Support of Motion to Strike and/or Demurrer, p. 1:9-12.) This statement demonstrates one problem with Defendant’s demurrer – Defendant is not challenging the Complaint based on any specific allegations in the Complaint.

Further, Defendant does not argue the entire cause of action for Violation of Article XIII D of the California Constitution is deficient; Defendant only makes arguments regarding tiered rates. A demurrer cannot be sustained to part of a cause of action. (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047.)

Lastly, Defendant requests the Court preclude Plaintiffs from asserting Defendant violated Proposition 218 by virtue of the tiered rates in place in fiscal year 2016-2017 because that theory and facts supporting it are not reflected in the claim. This is not, however, the purpose of a demurrer and is beyond the scope of the Court’s authority on a demurrer.

For all of these reasons, Defendant’s demurrer is OVERRULED.

B. Motion to Strike

With regard to Defendant’s motion to strike, Defendant argues Plaintiffs’ prayers for general and special damages should be struck because damages are not available as a matter of law for purported violations of Proposition 218. With regard to the recovery of damages for a constitutional violation, the California Supreme Court has stated:

As we shall explain, we conclude it is appropriate to employ the following framework for determining the existence of a damages action to remedy an asserted constitutional violation. First, we shall inquire whether there is evidence from which we may find or infer, within the constitutional provision at issue, an affirmative intent either to authorize or to withhold a damages action to remedy a violation. In undertaking this inquiry we shall consider the language and history of the constitutional provision at issue, including whether it contains guidelines, mechanisms, or procedures implying a monetary remedy, as well as any pertinent common law history. If we find any such intent, we shall give it effect.

Second, if no affirmative intent either to authorize or to withhold a damages remedy is found, we shall undertake the “constitutional tort” analysis adopted by [Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics (1971) 403 U.S. 388, 389 [91 S.Ct. 1999, 2001, 29 L.Ed.2d 619] and its progeny. Among the relevant factors in this analysis are whether an adequate remedy exists, the extent to which a constitutional tort action would change established tort law, and the nature and significance of the constitutional provision. If we find that these factors militate against recognizing the constitutional tort, our inquiry ends. If, however, we find that these factors favor recognizing a constitutional tort, we also shall consider the existence of any special factors counseling hesitation in recognizing a damages action, including deference to legislative judgment, avoidance of adverse policy consequences, considerations of government fiscal policy, practical issues of proof, and the competence of courts to assess particular types of damages.

(Katzberg v. Regents of University of California (2002) 29 Cal.4th 300, 317.)

Under the first step of the Katzberg test, the Court must inquire whether there is evidence demonstrating an affirmative intent to authorize a damages action to remedy a violation of Article XIII D. Article XIII D concerns assessments and property-related fees. There are two sections of Article XIII D referencing lawsuits. The first states:
In any legal action contesting the validity of any assessment, the burden shall be on the agency to demonstrate that the property or properties in question receive a special benefit over and above the benefits conferred on the public at large and that the amount of any contested assessment is proportional to, and no greater than, the benefits conferred on the property or properties in question.

(Cal. Const., art. XIII D, § 4, subd, (f).)

The second section states: “In any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance with this article.” (Cal. Const., art. XIII D, § 6, subd. (b)(5).) Neither of these sections mentions damages; they only provide that the validity of a fee or charge can be contested in a legal action. Further, nothing in the ballot materials for Proposition 218 states damages can be obtained in a lawsuit. (See Request for Judicial Notice in Support of Motion to Strike and/or Demurrer to Plaintiffs’ Complaint, Ex. D.)
Plaintiffs argue that Proposition 218 specifically contemplates a legal action to contest the legality of a fee imposed on property owners and, absent the ability to obtain damages, parties would be unable to bring meaningful legal actions to challenge unconstitutional uses of fees and charges. This argument is unpersuasive. Plaintiffs seek both injunctive relief and refunds and it is not apparent why these remedies would not provide meaningful relief even in the absence of damages.

In sum, the Court finds the first step of the Katzberg test does not establish a right to damages because there is no evidence of any intent to authorize damages as a remedy for a violation of Proposition 218 in the language of Proposition 218 and no such intent can be implied from any “guidelines, mechanisms, or procedures” in Proposition 218 or Article XIII D. Consequently, the Court must “consider whether a constitutional tort action for damages to remedy the asserted constitutional violation should be recognized.” (Katzberg v. Regents of University of California, supra, 29 Cal.4th at p. 324.)

The Court must “first consider the adequacy of existing remedies.” (Katzberg v. Regents of University of California, supra, 29 Cal.4th at p. 325.) In addition to damages, Plaintiffs are seeking injunctive relief as well as refunds. Injunctive relief has been found to be a meaningful alternative remedy. (MHC Financing Ltd. Partnership Two v. City of Santee (2010) 182 Cal.App.4th 1169, 1187; Degrassi v. Cook (2002) 29 Cal.4th 333, 342.) Plaintiffs contend there is no adequate remedy for the past financial harm to plaintiffs. However, Plaintiffs seek refunds of the amounts they allegedly overpaid. If those amounts are refunded, Plaintiffs will be made whole. Consequently, there is no need for damages in addition to the existing remedies.

Next, the Court must “consider the extent to which a constitutional tort action would change established tort law.” (Katzberg v. Regents of University of California, supra, 29 Cal.4th at p. 327.) Plaintiffs simply assert Defendant has failed to show how permitting monetary damages would change established tort law. Permitting an action for damages where none has previously existed or been authorized, however, would change established tort law.

Lastly, the Court considers “the nature of the provision and the significance of the purpose that it seeks to effectuate.” (Katzberg v. Regents of University of California, supra, 29 Cal.4th at p. 328.) As noted in Katzberg, however, this factor is not one upon which great significance is placed and the availability of meaningful alternative remedies leads to the conclusion that a constitutional tort should not be recognized. (Ibid.)

In sum, there is no evidence from which to infer an intent to afford a right to seek damages to remedy a violation of Article XIII D and there is no basis upon which to recognize a constitutional tort action for such damages. Accordingly, Defendant’s motion to strike is GRANTED WITHOUT LEAVE TO AMEND.

The Court will prepare the final order if this tentative ruling is not contested.