Templo v. State of Cal.

Filed 5/17/18; Certified for Publication 6/18/18 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
GERALDINE TEMPLO et al.,
Plaintiffs and Appellants,
A151094
v.
STATE OF CALIFORNIA, (San Mateo County
Super. Ct. No. 16-CIV-00691)
Defendant and Respondent.
Appellants Geraldine and Mark Templo (the Templos) brought an action for
declaratory relief against respondent State of California (State), claiming that a statute
requiring litigants to pay a nonrefundable fee in order to secure a jury trial is
unconstitutional. The trial court granted the State’s motion for judgment on the pleadings
on the ground that the State is not a proper defendant to the cause of action. The
Templos appeal, and contend the State is the proper defendant. We reject the contention
and affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
On July 29, 2016, the Templos filed a complaint for personal injury and property
damage against James Shi Ming Lu (Lu) for damages resulting from a car accident. The
first two causes of action, which relate to the car accident and name Lu as the only
defendant, are not at issue in this appeal.
In their third cause of action, the Templos named the State as the sole defendant
and sought a declaratory judgment that California Code of Civil Procedure, section 631,
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which requires litigants to pay a $150 nonrefundable jury fee, is unconstitutional. The
Templos alleged that the fee constitutes an improper “tax” because it was “not enacted by
a two-thirds vote of the California Legislature [as required by] . . . Article XIII A Section
3 of the California Constitution.” They further alleged the fee “does not provide
plaintiffs with any benefit or service and is not even applied to the actual jury fees
incurred during the course of a trial. In addition, the [fee] does not reasonably reflect the
cost incurred, if any, by the State . . . to provide jury services to the plaintiffs.” The
Templos also sought a refund of the fee and an award of attorney fees.
The State filed a motion for judgment on the pleadings, asserting the complaint
failed to state a valid cause of action against the State because it is the Judicial Council—
and not the State—that administers and manages the nonrefundable jury fees. The State
argued the Templos were barred from seeking relief from the State for the additional
reason that they had not complied with the California Government Claims Act (the Act),
which “sets forth mandatory filing requirements for claimants seeking to sue the
State . . . , a public entity, or a public employee for monetary damages.”
The Templos opposed the motion, arguing the Act does not apply, or that they
should be excused from complying with the Act because it would have been futile for
them to do so. The Templos also offered to amend their complaint to “omit” their
“request for a refund” if that would allow them to proceed without complying with the
requirements of the Act.
The trial court granted the motion. It ruled that while the Act does not apply, the
State is not a proper defendant to the cause of action. The court stated, “Plaintiffs’
reliance on Article 13, Section 3 of the California Constitution is unpersuasive because
that provision merely sets forth the burden that must be met for showing that the jury fee
is not a tax. It does not designate which public entity is the proper defendant for meeting
that burden. [Citation.] [¶] For lack of any factual showing that [the State] could
potentially be a proper defendant, leave to amend as to [the State] is not granted.” “To
the extent Plaintiff desires to name [a] public entity defendant other than the
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State . . . , Plaintiff has 20 days from service of the notice of entry or order, to file a
First Amended Complaint.
The Templos filed a first amended complaint on January 3, 2017. 1 The trial court
entered judgment in favor of the State, and notice of entry of judgment was served on the
Templos on February 2, 2017. Thereafter, the Templos filed a motion for a new trial,
stating, “Until the [S]tate shows that it was not involved in the collection of the $150.00
non refundable charge, a cause of action has been stated.” The trial court denied the
motion.
DISCUSSION
The Templos contend the trial court erred in granting the State’s motion for
judgment on the pleadings because the State is the proper defendant to their cause of
action for declaratory relief. We disagree.
A defendant may move for judgment on the pleadings on the ground that the
complaint does not state facts sufficient to state a cause of action against that defendant.
(Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); People ex rel. Harris v. Pac Anchor
Transportation, Inc. (2014) 59 Cal. 4th 772, 777.) A motion for judgment on the
pleadings “is equivalent to a demurrer and is governed by the same de novo standard of
review.” (Kapsimallis v. Allstate Ins. Co. (2002) 104 Cal. App. 4th 667, 672.) Leave to
amend “is properly denied if the facts and nature of plaintiffs’ claims are clear and under
the substantive law, no liability exists.” (Beck v. County of San Mateo (1984)
154 Cal. App. 3d 374, 379.)
Code of Civil Procedure, section 631, subdivision (b), provides in part: “At least
one party demanding a jury on each side of a civil case shall pay a nonrefundable fee of
one hundred fifty dollars ($150), unless the fee has been paid by another party on the
1
Trial court records, of which we take judicial notice (Evid. Code, § 452), show
that in their first amended complaint, the Templos named the Judicial Council and
John Chiang, Treasurer, as defendants to the third cause of action. The Templos later
filed a request to dismiss the Judicial Council as a defendant, with prejudice, and the
trial court granted the request.
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same side of the case.” “The fee shall offset the costs to the state of providing juries in
civil cases.” The fee is paid to the superior court, which “shall transmit the [fee] to the
State Treasury for deposit in the Trial Court Trust Fund . . . .” (Code Civ. Proc., § 631,
subd. (h); see also Gov. Code, § 68085.1, subds. (a)−(e) [directing superior courts to
deposit the fee into a bank account established by the Administrative Office of the Courts
(AOC), 2 out of which the AOC will make distributions to various programs and the Trial
Court Trust Fund].) The Trial Court Trust Fund is used “to fund trial court operations,”
(Gov. Code, § 68085, subd. (a)(1)), which includes costs for jury services (Gov. Code,
§ 77003, subd. (a)(8); Cal. Rules of Court, rule 10.810(d)).
On November 2, 2010, California voters approved Proposition 26, which
expanded the definition of taxes to include certain fees and charges, and requires a two-
thirds vote of the Legislature to approve laws increasing taxes. (Schmeer v. County of
Los Angeles (2013) 213 Cal. App. 4th 1310, 1322.) Proposition 26 also shifted to the state
or local government the burden of demonstrating that any charge, levy, or assessment is
not a tax. (Ibid.) Proposition 26 amended Section 3 of Article XIII A of the California
Constitution. (Ibid.)
The Templos rely on Proposition 26 in arguing that the $150 jury fee constitutes a
“tax” and should therefore have been—but was not—approved by a two-thirds vote by
the Legislature. They argue the State is the proper party to defend the action. There is a
“general and long-established rule,” however, “that in actions for declaratory and
injunctive relief challenging the constitutionality of state statutes, state officers with
statewide administrative functions under the challenged statute are the proper parties
defendant.” (Serrano v. Priest (1976) 18 Cal. 3d 728, 752 (Serrano).)
2
The AOC previously acted as the staff agency of the Judicial Council, and was
restructured and reorganized into three divisions of the Judicial Council. (See Cal. Rules
of Court, rule 10.81(b) [references to the AOC are deemed to refer to the Judicial
Council, the Administrative Director of the Courts, or the Judicial Council staff as
appropriate].)
4
In Serrano, supra, 18 Cal. 3d 728, 752, the Supreme Court affirmed the trial
court’s refusal to join the Governor and Legislature as parties in a lawsuit that challenged
public school financing laws and named as defendants various school superintendents
and state and county officers. (Ibid.) The Court explained that it is the level of interest in
the final outcome that determines the proper defendant, and that in cases challenging the
constitutionality of a statute, the interest of the Legislature or Governor “is not of the
immediacy and directness requisite to party status.” (Ibid.) Rather, state and local
agencies with “direct institutional interest” are the proper defendants. (Ibid.)
Similarly, in State of California v. Superior Court (Veta) (1974) 12 Cal. 3d 237,
the Supreme Court affirmed the dismissal of the State in an action contesting the denial
of a permit sought under the California Coastal Zone Conservation Act of 1972, and
challenging the act’s constitutionality. The plaintiffs had named as defendants the
California Coastal Commission—the agency responsible for administering the Act—as
well as two Commission employees and the State. The court held that the demurrers filed
by the State and two individual employees should have been sustained because “no relief
is available” against them regarding the Commission’s denial of the permit, nor did the
petition contain allegations “establishing any right to declaratory relief against the state
(as distinguished from the Commission acting as its agent).” (Id. at p. 255.) In other
words, the Commission was the entity with the direct institutional interest in defending
the constitutionality of the act.
The Judicial Council is the state entity established by the California Constitution
to manage the judicial branch (Fay v. District Court of Appeal (1927) 200 Cal. 522, 527),
including the judiciary’s budget (Cal. Rules of Court, rule 10.1(a)(1);
Gov. Code, § 68502.5; Cal. Rules of Court, App. D [governance policies for Judicial
Council]). The Judicial Council bears the responsibility for administering and controlling
funds allocated to the judicial branch, including the Trial Court Trust Fund.
(Gov. Code, § 68085, subd. (a)(2)(A) [“the Judicial Council may authorize the direct
payment or reimbursement or both of actual costs from the Trial Court Trust Fund . . . to
fund the costs of operating one or more trial courts”]; Gov. Code, § 68502.5, subd. (c)(1)
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[the “Judicial Council shall retain the ultimate responsibility to adopt a budget and
allocate funding for the trial courts”]; Gov. Code, § 77206, subd. (a) [“the Judicial
Council may regulate the budget and fiscal management of the trial courts”].)
The “Legislature shall make an annual appropriation to the Judicial Council for the
general operation of the trial courts based on the request of the Judicial Council” and
thereafter the “Judicial Council shall allocate the funding from the Trial Court Trust Fund
to the trial courts in a manner that best ensures the ability of the courts to carry out their
functions.” (Gov. Code, § 77202, subds. (a)−(b).) The Judicial Council establishes the
policies and procedures governing practices and procedures for budgeting in the trial
courts, and may delegate the adoption of those policies and procedures to the
Administrative Director of the Courts (formerly the AOC). (Gov. Code, § 77202,
subd. (c)(1).)
The Judicial Council is also the agency that is required to provide for “the
representation, defense, and indemnification” of any actions affecting the courts, and
shall manage any proceedings, actions or claims that affect the trial courts. (Gov. Code,
§ 811.9, subds. (a)−(b).) It is responsible for “paying legal costs resulting from lawsuits
or claims involving the state, the Judicial Council” or its employees arising out of “the
actions or conduct of a trial court” or its employees, or “the actions or conduct of the
Judicial Council.” (Gov. Code, § 77204, subd. (a).)
Accordingly, in the instant case, it is the Judicial Council, and not the State as a
whole, that has the “direct institutional interest” necessary to defend the action. (See
Serrano, supra, 18 Cal.3d at p. 752.) The Judicial Council is the agency that has the
immediate interest in upholding the constitutionality of section 631, subdivision (b), of
the Code of Civil Procedure.
The Templos do not dispute that it is the Judicial Council that administers and
controls the jury fees, but argues the State is nevertheless a proper party because
Article XIII A, Section 3, of the California Constitution provides that “The State bears the
burden of proving by a preponderance of the evidence that a levy, charge, or other
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exaction is not a tax . . . .” (Italics added.) They argue that because this section places
the burden of proof on the “State,” the State must be the proper defendant. We disagree.
As noted, Proposition 26 shifted to the state or local government the burden of
demonstrating that any charge, levy, or assessment is not a tax. (Schmeer v. County of
Los Angeles, supra, 213 Cal.App.4th at p. 1322.) This shift in the burden of proof “was
largely a response to Sinclar Paint [Sinclair Paint Co. v. State Board of Equalization
(1997) 15 Cal. 4th 866, 878],” in which the Supreme Court held that a plaintiff who
challenges a fee bears the burden of making a prima facie showing that the fee is invalid.
(Schmeer v. County of Los Angeles, supra, 213 Cal.App.4th at p. 1322.) The language in
Article XIII A, Section 3, therefore merely directs that the government—and not the
individual plaintiff—has the burden of proof. It does not designate which public entity is
the proper defendant for meeting that burden, nor is it reasonable to require the State to
defend all Proposition 26 cases. (See People ex rel. Lockyer v. Superior Court (2004)
122 Cal. App. 4th 1060, 1078 [only the particular state agency or officer collecting the fee
under the contested statute, and not the State, possesses the evidence necessary to meet
the burden of proof].)
In fact, post-Proposition 26 cases challenging the constitutionality of state fees
have been brought against the specific agencies charged with administering the pertinent
statutes and fees, and the agency defendants have presented evidence and defended
against the claims. 3 (See e.g., California Farm Bureau Federation v. State Water
Resources Control Board (2011) 51 Cal. 4th 421 [declaratory relief action challenging
new annual fees imposed by statute on holders of water rights permits and licenses as an
improper tax]; Southern California Edison Co. v. Public Utilities Com. (2014)
227 Cal. App. 4th 172, 200 [declaratory relief action challenging a statutory charge as an
improper tax]; California Chamber of Commerce v. State Air Resources Bd. (2017)
10 Cal.App.5th 604, 633 [challenging a charge imposed by the Board as an improper
3
The Templos do not cite any cases in which the State, rather than a specific state
agency, was properly named as the defendant in a Proposition 26 action.
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tax].) We conclude the trial court properly granted the State’s motion for judgment on
the pleadings.
We further conclude the trial court did not err in denying leave to amend as to the
State. As noted, leave to amend “is properly denied if the facts and nature of plaintiff’s
claims are clear and, under the substantive law, no liability exists.” (Beck v. County of
San Mateo, supra, 154 Cal.App.3d at p. 379.) The plaintiff bears the burden of
establishing amendment would not be futile. (Baughman v. State of California (1995)
38 Cal. App. 4th 182, 187.)
Here, the Templos have made no showing of how they would be able to amend
their complaint to state a valid cause of action against the State. They simply reiterate
their Proposition 26 argument, stating, “It can be alleged that due process required that
the law mandating the payment of the non refundable fee be enacted in accordance with
the constitutional due process requirements of a two-thirds majority vote of the state
legislature.” They also state they might be able to amend the complaint to add a new
claim that the statute “denies equal protection” because it “unreasonably discriminates
against litigants opting for a jury trial in that a similar non refundable fee is not charged
to litigants who request a court trial.” This statement, made without any reasoned
argument or citation to authority, is insufficient to show the complaint can be amended to
state a valid cause of action against the State. (See Badie v. Bank of America (1998)
67 Cal. App. 4th 779, 784–785 [an appellant must support his or her point with reasoned
argument and citations to authority].)
DISPOSITION
The judgment is affirmed. The State of California shall recover its costs on
appeal.
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_________________________
McGuiness, Acting P.J. *
We concur:
_________________________
Pollak, J.
_________________________
Siggins, J.
A151094
*
Retired Presiding Justice of the Court of Appeal, First Appellate District,
Division Three, assigned by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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Filed 6/18/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
GERALDINE TEMPLO et al., A151094
Plaintiffs and Appellants,
(San Mateo County
v. Super. Ct. No. 16-CIV-00691)
STATE OF CALIFORNIA,
ORDER CERTIFYING OPINION
Defendant and Respondent. FOR PUBLICATION
[NO CHANGE IN JUDGMENT]
THE COURT:
The opinion in the above-entitled matter filed on May 17, 2018, was not certified
for publication in the Official Reports. For good cause it now appears that the opinion
should be published in the Official Reports and it is so ordered.
There is no change in the judgment.
Dated: ____6/18/18___ _____Pollak, J. ___Acting P.J.
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Geraldine Templo et al. v State of California
(A151094)
Trial Court: San Mateo County
Trial Judges: Hon. Jonathan E. Karesh
Attorneys: Becker & Becker, Geoffrey Becker for Plaintiffs and Appellants.
Xavier Becerra, Attorney General, Diana Shaw, Senior Assistant
Attorney General, Anne Michelle Burr, Supervising Deputy
Attorney General, Heather B. Hoesterey, Deputy Attorney General
for Defendant and Respondent.
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