On July 25, 2011, the California Supreme Court in Ardon v. City of Los Angeles unanimously ruled that taxpayers could sue a municipality using the class action device for refunds of local taxes that had been illegally collected.
The decision reversed a Court of Appeal decision that found only individuals could sue for relief and not aggregate their claims together. As the Court held:
“In this case, we must decide whether Government Code section 910 (section 910) allows taxpayers to file a class action claim against a municipal governmental entity for the refund of local taxes. In City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 455 (City of San Jose), we held that section 910 permits a litigant to bring a class claim against a local government. We later held in Woosley v. State of California (1992) 3 Cal.4th 758, 792 (Woosley), however, that class claims to recover tax refunds are not permitted in certain situations because article XIII, section 32 of the California Constitution prevents the judiciary “from expanding the methods for seeking tax refunds expressly provided by the Legislature.” As we explain, neither Woosley, which concerned the interpretation of statutes other than section 910, nor article XIII, section 32 of the California Constitution, applies to our determination of whether section 910 permits class claims that seek the refund of local taxes. We therefore conclude that the reasoning of City of San Jose, which permitted a class claim against a municipal government in the context of an action for nuisance under section 910, also permits taxpayers to file a class claim seeking the refund of local taxes under the same statute.”
UCAN, represented by Alan Mansfield, filed an amicus brief in support of the appellants.
To view a copy of the decision, please click here: