Coalition v. City of Upland

Taking account of this legal context, along with the relevant provision's text and other indicia of purpose, we conclude that the requirement in article XIII C, section 2, subdivision (b)-mandating that general taxes be submitted to the voters at a regularly scheduled general election-applies only to local governments and not to the electorate's initiative power without evidence that such was the intended purpose of the requirement. The City cites no such evidence, because there is none here.

Indeed, as we observed in Kennedy Wholesale , 53 Cal.3d at page 252, 279 Cal.Rptr. 325 , 806 P.2d 1360 , when an initiative's intended purpose includes imposing requirements on voters, evidence of such a purpose is clear. In article XIII C, section 2, subdivision (d), for example, the enactors adopted a requirement providing that, before a local government can impose, extend, or increase any special tax, voters must approve the tax by a two-thirds vote. That constitutes a higher vote requirement than would otherwise apply. (§ 9217 [providing for a majority vote].) That the voters explicitly imposed a procedural two-thirds vote requirement on themselves in article XIII C, section 2, subdivision (d) is evidence that they did not implicitly impose a procedural timing requirement in subdivision (b). (See

Without an unambiguous indication that a provision's purpose was to constrain the initiative power, we will not construe it to impose such

In playing down the importance of giving full effect to these provisions, the concurring and dissenting opinion turns our case law on its head-by essentially demanding evidence that the electors intended to exempt the initiative power from article XIII C, section 2 as a precondition for preserving that power in unencumbered form. (E.g., conc. & dis. opn., post , 222 Cal.Rptr.3d at 231-231, 235, 401 P.3d at 66-67, 70.) To impose this requirement would be a stark departure from our precedent, and one impossible to square with our decisions on the power of initiative. (E.g., DeVita , supra , 9 Cal.4th at pp. 785-786, 38 Cal.Rptr.2d 699 , 889 P.2d 1019 [refusing to infer limits]; Rossi , supra , 9 Cal.4th at p. 696, 38 Cal.Rptr.2d 363 , 889 P.2d 557 [emphasizing breadth of initiative power and looking for express evidence of intent to limit].) Our analysis in those decisions consistently begins with the presumption that the initiative power is not constrained, then searches for clear evidence suggesting that electors could reasonably be understood to have imposed restrictions upon their constitutional power. (E.g., Kennedy Wholesale , supra , 53 Cal.3d at p. 253, 279 Cal.Rptr. 325 , 806 P.2d 1360 [concluding the plaintiff failed to identify evidence of intent to limit initiative power]; DeVita , at pp. 785-786, 38 Cal.Rptr.2d 699 , 889 P.2d 1019 ; Rossi , at pp. 695-696, 38 Cal.Rptr.2d 363 , 889 P.2d 557 .)

What the City maintains is that our interpretation, whatever its merits otherwise, would create a kind of loophole in article XIII C, section 2. A hypothetical city council, it suggests, could conceivably collude with a public employee union to place a levy on the ballot as a means of raising revenue for a goal supported by both. To repay the union for campaign support, or simply because the union and council agree on the policy, the council accepts the union's contract proposal-which will be funded by increasing a utility tax. Under our interpretation, the City reasons, the city council could meet with the union, and the union could mobilize city employees to collect signatures on an initiative proposing the tax increase. Once enough signatures are collected-15 percent under section 9214 or 10 percent under section 9215-the city council could simply adopt the ordinance without submitting the tax increase to the voters. ( §§ 9214, subd. (a), 9215, subd. (a).) Thus, the city council could effectively skirt article XIII C, section 2's command that "[n]o local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote." ( Ibid. ) These facts are not presented here, and we decline to take up what would happen should they arise.

We Concur:

Cantil-Sakauye, C.J.

Werdegar, J.

Chin, J.

Corrigan, J.

CONCURRING AND DISSENTING OPINION BY KRUGER, J.

Kruger, J.

Having gathered the necessary number of signatures, proponents of a local voter initiative requested that the city council of the City of Upland order a special election to present the

These concepts are not remotely novel, and they point to a simple answer here. It is, as a matter of fact, much the same answer as the one this court gave more than a century ago, when it was asked to consider whether a constitutional provision granting legislative authority to " '[a]ny county, city, town, or township' " included the exercise of the initiative power by the

As I see it, there is nothing improbable about the conclusion that when article XIII C says "[n]o local government may impose" taxes without satisfying certain voter approval requirements, it means that all local government taxes must satisfy these requirements. (Art. XIII C, § 2(b).) The power to tax is a power of government. (See

Although the majority insists that its interpretation reflects the better reading of the constitutional text, it implicitly acknowledges otherwise when it invokes a new clear statement rule to guide its interpretation: "Unless a provision explicitly constrains the initiative power or otherwise provides a similarly clear indication that its purpose includes constraining the voters' initiative power, we will not construe provisions as imposing such limitations." (Maj. opn., ante , 222 Cal.Rptr.3d at 230, 401 P.3d at 65-66.) In other words, according to the majority, it is not enough that article XIII C imposes generally applicable voter approval requirements for the enactment of local taxes; the law must contain a "clear statement or equivalent evidence" that the requirements are meant to apply to local taxes enacted by voter initiative. (Maj. opn., ante , at 222 Cal.Rptr 228 , 401 P.3d at 64.)

What we have said of other such clear statement rules is equally true here: It is not clear "by what authority" the majority proposes to "dictate to legislative drafters the forms in which laws must be written to express the legislative intent." ( In re Pedro T. (1994) 8 Cal.4th 1041 , 1048-1049, 36 Cal.Rptr.2d 74 , 884 P.2d 1022 .) The majority attempts to draw support for its clear statement rule from the general background principle that the initiative right must be " 'jealously guard[ed],' " and that doubts accordingly must generally be resolved in favor of the exercise of the right. (

Here, by contrast, no similar considerations are present. Article XIII C, section 2(b) does not "squelch voters' initiative rights," as the majority claims. (Maj. opn., ante , 222 Cal.Rptr.3d at 221, 401 P.3d at 58.) It does not constrain the voters' ability to propose ordinances by initiative petition, and it expressly envisions a specific avenue for voter participation-approval at a general election. Section 2 (b) does not " 'place an insurmountable obstacle in the path of the initiative process and effectively give legislative bodies the only authority to enact this sort of ... ordinance.' " ( DeVita , supra , 9 Cal.4th at p. 786, 38 Cal.Rptr.2d 699 , 889 P.2d 1019 .)

Nor does Kennedy Wholesale, Inc. v. State Bd. of Equalization (1991) 53 Cal.3d 245 , 279 Cal.Rptr. 325 , 806 P.2d 1360 support the majority's heightened standard. In Kennedy Wholesale , the plaintiff argued that

When the right of initiative was grafted onto the Constitution, the Legislature also enacted statutory procedures for city and county voters to exercise the right. (

Just how that power relates to taxation was the subject of our holding in Rossi , supra , 9 Cal.4th 688 , 38 Cal.Rptr.2d 363 , 889 P.2d 557 , which concerned a city ordinance added by voter initiative. When the statewide initiative power was originally adopted, we observed, "taxation was not only a permitted subject for the initiative, but

What's more, the principle of ejusdem generis suggests that when "specific words follow general words in a statute or vice versa," the general words ordinarily are best construed in a manner that underscores their similarity to the specific words. ( International Federation of Professional & Technical Engineers, Local 21, AFL-CIO v. Superior Court (2007) 42 Cal.4th 319 , 342, 64 Cal.Rptr.3d 693 , 165 P.3d 488 .) Interpreting "city" to include the electorate would give that term a much broader meaning than the adjoining specific term, "local or regional governmental entity." (Art. XIII C, § 1, subd. (b).) Thus, our interpretation of local government is consistent with the ordinary understanding of the term, the text of related provisions, and the ejusdem generis principle. By contrast, the interpretation of the City and the concurring and dissenting opinion would require us to insert words-such as "electorate," "voters," or "people"-into section 1, subdivision (b) and section 2, subdivision (b) of article XIII C. (See Code Civ. Proc., § 1858 ["In the construction of a statute or instrument, the office of the Judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted ..."].)

Our interpretation is also consistent with article XIII D of the state Constitution, which, like article XIII C, was added by Proposition 218. ( Greene , supra , 49 Cal.4th at p. 285, 109 Cal.Rptr.3d 620 , 231 P.3d 350 .) Article XIII D addresses the imposition of assessments and property-related fees by local agencies, and section 4 of that article contains a variety of procedural requirements that must be fulfilled before an "agency" may adopt an assessment ( Cal. Const., art. XIII D, § 4 [e.g., notice and hearing requirements].) Article XIII D defines agency as "any local government as defined in subdivision (b) of Section 1 of [article XIII C ]." ( Id. , § 2, subd. (a).) Under the City's interpretation then, "agency"

III.

Multiple provisions of the state Constitution explicitly constrain the power of local governments to raise taxes. But we will

I concur in the judgment and in part II.D. of the majority opinion. I respectfully dissent from the rest.

A.

Proposition 218, which added articles XIII C and XIII D to the California Constitution, is one of a series of voter initiatives imposing certain limitations on state and local governments' taxing authority. (See Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248 , 258-260, 219 Cal.Rptr.3d 859 , 397 P.3d 210 ( Jacks ).) Since the first of these initiatives was passed

C.

The majority attempts to derive support for its voter initiative exemption from various extratextual considerations, but its efforts are unavailing. The majority begins by observing that Proposition 218's ballot materials do not say, in terms, that the voter approval requirements in article XIII C, section 2 were designed to apply to voter initiatives, and at various points indicate that Proposition 218 was concerned with "politicians" raising taxes. (Maj. opn., ante , 222 Cal.Rptr.3d at 222-224, 401 P.3d at 59-61.) These references are not surprising, given that most local tax increases have, indeed, been initiated by elected officials, and few political campaigns are hampered by inveighing against "politicians." But the ballot materials make clear that the overarching purpose of Proposition 218 was more generally to "constrain local governments' ability to impose fees, assessments, and taxes." (Ballot Pamp., Gen. Elec. (Nov. 5, 1996) analysis of Prop. 218 by Legis. Analyst, p. 73.) And the arguments in favor of Proposition

The cases on which the majority relies do not support the heightened standard it applies here. In most of those cases, this court declined to extend procedural requirements obviously aimed at the conduct of a city council or other governing body because the requirements were incompatible with the

The question before us is whether article XIII C also restricts the ability of voters to impose taxes via initiative. The Court of Appeal here concluded that article XIII C does not constrain voters' constitutional power to propose and

A.

The people's initiative power is contained in article II, sections 8 and 11. The former section provides, "The initiative is the power of the electors to propose statutes and amendments to the Constitution and to adopt or reject them." ( Art. II, § 8, subd. (a).) The latter contains the local power, providing that "[i]nitiative and referendum powers may be exercised by the electors of each city or county under procedures that the Legislature shall provide." ( Id. , § 11, subd. (a).) In Associated Home Builders , supra , 18 Cal.3d 582 , 135 Cal.Rptr. 41 , 557 P.2d 473 , we briefly described the history and longstanding judicial interpretation of the initiative power.

The state Constitution was amended to include the initiative power in 1911. The Constitution "speak[s] of the initiative and referendum, not as a right granted the people, but as a power reserved by them." ( Associated Home Builders , supra , 18 Cal.3d at p. 591, 135 Cal.Rptr. 41 , 557 P.2d 473 .) Since then, courts have consistently declared it their duty to " 'jealously guard' " and liberally construe the right so that it " 'be not improperly annulled.' " ( Ibid . ; see, e.g., Perry v. Brown (2011) 52 Cal.4th 1116 , 1140, 134 Cal.Rptr.3d 499 , 265 P.3d 1002 .) Moreover, when weighing the tradeoffs associated with the initiative power, we have acknowledged the obligation to resolve doubts in favor of the exercise of the right whenever possible. (

Third, even if it were conceivably possible to treat the term "local government" in article XIII C as an unusually oblique reference to the voters who comprise the relevant electorate, the difficulty in accepting

The alternative is to treat the term "local government" as encompassing the entire coterie of individuals constituting the electorate-thus burdening voters' power to propose and adopt initiatives concerning taxation. ( Rossi , supra , 9 Cal.4th at p. 702, 38 Cal.Rptr.2d 363 , 889 P.2d 557 .) If this quite significant consequence were consistent with the most reasonable understanding of Proposition 218's purpose despite the absence of text in articles XIII C or D bolstering this view, one would assume there would be some mention of such a goal elsewhere in Proposition 218 or its ballot materials. ( Whitman v. American Trucking Assns., Inc. (2001) 531 U.S. 457 , 468, 121 S.Ct. 903 , 149 L.Ed.2d 1 [enactors do not "hide elephants in mouseholes"]; see Kennedy Wholesale , supra , 53 Cal.3d at p. 250, 279 Cal.Rptr. 325 , 806 P.2d 1360 .) The City and the concurring and dissenting opinion cite no such evidence. Nor can we find any. To the contrary: The crux of the concern repeatedly reflected in the ballot materials

The City also argues that article XIII C, section 2, subdivision (b) constrains voter initiatives because "statutory and constitutional limits on the power of local government apply equally to local initiatives." The City primarily relies on Legislature v. Deukmejian (1983) 34 Cal.3d 658 , 194 Cal.Rptr. 781 , 669 P.2d 17 , but that case offers the City no support. It involved a statutory initiative that proposed to adjust state legislative and congressional district boundaries after the Legislature had already engaged in decennial redistricting. ( Id . at p. 663, 194 Cal.Rptr. 781 , 669 P.2d 17 .) Noting that the state Constitution prohibited the Legislature from redistricting more than once per decade ( id. at p. 668, 194 Cal.Rptr. 781 , 669 P.2d 17 ), we concluded that the initiative was impermissible ( id. at p. 663, 194 Cal.Rptr. 781 , 669 P.2d 17 ). We explained that "the power of the people through the statutory initiative is coextensive with the power of the Legislature." ( Id. at p. 675, 194 Cal.Rptr. 781 , 669 P.2d 17 .) Yet, as we later indicated, Legislature v. Deukmejian simply stands for the proposition that "neither the Legislature nor the voters may enact a law of a nature that exceeds a limitation on the state's lawmaking power." ( Kennedy Wholesale , supra , 53 Cal.3d at p. 252, 279 Cal.Rptr. 325 , 806 P.2d 1360 ; DeVita , supra , 9 Cal.4th at p. 776, 38 Cal.Rptr.2d 699 , 889 P.2d 1019 [discussing local initiatives].) By contrast, procedural requirements imposed on the Legislature or local governments are presumed not to

The City offers a final reason for applying article XIII C, section 2, subdivision (b) to the electorate here. It contends that the term "impose" in that provision includes the collection of taxes by a local government, so subdivision (b) precludes the City from collecting a general tax imposed via initiative unless and until the tax is approved by the voters at a regularly scheduled election. Not so. The Court of Appeal in this case concluded that the ordinary meaning of "impose" is "to establish," not to collect (e.g., Ponderosa Homes, Inc. v. City of San Ramon (1994) 23 Cal.App.4th 1761 , 1770, 29 Cal.Rptr.2d 26 , citing Webster's 3d New Internat. Dict. (1970) p. 1136), and because it found no reason to depart from this understanding of the term, it construed the meaning of "impose" in article XIII C, section 2, subdivision (b) as consistent with this understanding. We agree. Indeed, in

The sequence of the City's actions with respect to the initiative causes us to make a final observation. Upon receiving a petition signed by not less than 15 percent of the city's voters, section 9214 obliges a city to (1) adopt the ordinance without alteration; (2) immediately order a special election; or (3) order an agency report and, once the report is presented to the city council, adopt the ordinance or order a special election. These deadlines are mandatory ( Tuolumne Jobs , supra , 59 Cal.4th at p. 1038, 175 Cal.Rptr.3d 601 , 330 P.3d 912 ), and the City erred when it ignored them. Its unilateral determination that the proposed initiative constituted a general tax and was therefore governed by article

The bulk of the majority opinion, however, addresses the separate question whether article XIII C, which imposes certain requirements for voter approval of local government taxes, applies at all to taxes enacted by initiative. The majority says no: In the majority's view, when article XIII C speaks of taxes imposed by local government,

So too here, when article XIII C speaks of taxes imposed by "local government"-a term it defines to include "city"-the reference is naturally read to include local taxes enacted by voter initiative, just as it includes taxes enacted by vote of the city council or of any other legislative or governmental body. And that reading makes perfect sense in the context of Proposition 218-an initiative passed for the stated purposes of " 'limiting local government revenue and enhancing taxpayer consent' " ( Jacks , supra , 3 Cal.5th at p. 267, 219 Cal.Rptr.3d 859 , 397 P.3d 210 )-and particularly in the context of article XIII C (entitled "Voter Approval for Local Tax Levies"), a provision we have previously described as applicable to "all local taxes" ( Jacks , at p. 256, 219 Cal.Rptr.3d 859 , 397 P.3d 210 ). After all, a local tax law passed by initiative is still a local tax law, just like any law passed by elected officials-a law of the local government, to be enforced by local government, for the purpose of raising revenue for local government.

B.

The majority's primary response is that the term "local government" is an "unusually oblique" way of referring to voters, if that is what article XIII C was meant to do. (Maj. opn., ante , 222 Cal.Rptr.3d at 221, 401 P.3d at 58.) The majority also points to article XIII C's definition of " '[l]ocal government,' " which includes the catchall phrase "any other local or regional governmental entity" ( art. XIII C, § 1, subd. (b)), and to the definition of the term " '[a]gency' " in article XIII D, which was also added by Proposition 218 and which incorporates article XIII C's definition of local government (maj. opn., ante , 222 Cal.Rptr.3d at 221-223, 401 P.3d at 58-60, citing art. XIII D, § 2, subd. (a)). According to the majority, it is "improbable" that Proposition 218 voters would have chosen the words "local government," "local or regional governmental entity," and "agency" to refer to the voters acting by initiative. (Maj. opn., ante , 222 Cal.Rptr.3d at 222

But equally to the point, Proposition 218's enactors did not leave us guessing about what they meant by the term "local government": The term is defined, and the definition includes, as relevant here, "city." ( Ibid. ) It is true, as the majority emphasizes, that the voters are not the city itself. But neither is the city council. (See Pfahler , supra , 150 Cal. at p. 81, 88 P. 270 ["The common council or other local legislative body and other charter officers do not constitute the 'city,' but are merely agents or officers of the city."]; id. at pp. 85-86, 88 P. 270 [rejecting "the erroneous assumption ... that the city council is the 'city' "].) Both bodies are, however, empowered to exercise the legislative authority of the city, and the products of their efforts equally become the city's law. If a tax enacted by the city council is a tax imposed by the city, so too is a tax enacted by the voters on the city's behalf.

As should by now be clear, this understanding of article XIII C does not require us to conclude, as the majority suggests, that the term "local government" is simply a synonym for "voters," or vice versa. We likely would not, for example, read a provision requiring local government to submit a "local coastal program for Coastal Commission approval" as calling for citizen drafting sessions in local polling places. (Maj. opn., ante , 222 Cal.Rptr.3d at 220, fn. 11, 401 P.3d at 57-58 fn. 11.) But what this example illustrates is a point about the allocation of power and responsibility within local government, not any fundamental incompatibility in terms. We do not read the coastal program provision in this manner, not because we believe the voter initiative process is categorically outside the bounds of local government, but because we understand that the voter initiative process is not the sum total of local government; many local government functions (including, typically, the drafting of local coastal programs) are discharged by other means.

The case before us, by contrast, concerns the government's power to establish taxes-a power that is shared by the people and their elected representatives. (See Rossi v. Brown (1995) 9 Cal.4th 688 , 699-705, 38 Cal.Rptr.2d 363 , 889 P.2d 557 ( Rossi ); maj. opn., ante , 222 Cal.Rptr.3d at 219, 401 P.3d at 56.) The question is whether a tax law of a local government-here, the City of Upland-is a tax imposed by the local government, even though it happens to have been enacted by vote of the electorate rather than of the city council. (Art. XIII C, § 2(b).) To answer that question in the affirmative in no way implies that the terms "local government," "local or regional governmental entity," and "agency" are interchangeable with "voters." (See maj. opn., ante ,

As the majority acknowledges, despite the broad statements in the ballot materials concerning the right to vote on taxes, article XIII C does more than simply secure the right to vote on taxes (a right voters generally have, with or without article XIII C, when a tax is proposed by initiative petition). Article XIII C secures the right to vote in a particular manner, and defines the applicable margin of victory. In particular, article XIII C, section

The critical language we are construing here, moreover, appears in essentially identical form in article XIII C, section 2(d), which requires that special taxes be approved by a two-thirds vote of the electorate. That provision, in language that closely parallels that of section 2(b), provides that "[n]o local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote." ( Art. XIII C, § 2(d).) If a local tax enacted by voter initiative is not a tax "impose[d]" by "local government," as the majority insists, then from here on out, special taxes can be enacted by a simple majority of the electorate, as long as proponents can muster the necessary quantum

Although I agree with the majority that plaintiffs were entitled to have their proposed ordinance submitted to the voters at a special election, I cannot agree that approval at a special election would have sufficed if, in fact, the challenged licensing and inspection fee was a general tax. Article XIII C is a constitutional restriction on the taxation power of local government, and, by its terms, it applies to the imposition of all local government taxes. Whether a local government tax has been enacted by voter initiative or by vote of the city council is not article XIII C's concern. Accordingly, while I concur in the majority's judgment, I do not join most of its reasoning.

I Concur:

Liu, J.