Finding that California’s Government Claims Act was enacted with the intention “to occupy the entire field concerning presentation requirements for money and damages claims against local government entities,” the Supreme Court in Tesoro Refining & Marketing Company v. City of Carson yesterday struck down as preempted a city’s mandatory administrative review procedures for persons seeking a refund of the city’s oil industry business license tax.
The court’s unanimous opinion by Chief Justice Guerrero holds that the city’s required procedures “impose presentation requirements on persons seeking a tax refund beyond those established by the GCA” and thus are preempted because they “encroach upon the field occupied.” Requests for tax refunds are “plainly” “ ‘claims for money or damages’ ” under the GCA, a term the opinion says “encompasses any prelawsuit demand asserting a right to monetary compensation for an alleged unlawful act or omission.”
The opinion is somewhat limited when it comes to tax refund requests, however. The court said, “Our decision does not impact refund procedures for property taxes, sales and use taxes, and other ‘local’ taxes that are prescribed by the Revenue and Taxation Code or other state statute.”
The court reversed the Second District, Division Four, Court of Appeal unpublished opinion. The appellate court had declined to follow what it referred to as “a footnote buried in dicta” in the Supreme Court’s Volkswagen Pacific, Inc. v. City of Los Angeles (1972) 7 Cal.3d 48 decision and it disagreed with the Second District, Division Two, opinion in Sipple v. City of Hayward (2014) 225 Cal.App.4th 349, in which the Supreme Court denied review. Yesterday’s opinion says “[o]ur contrary holding in Volkswagen Pacific forecloses the City’s position” and it speaks favorably of Sipple.
