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Tentative Ruling
Judge Thomas Anderle
Department 3 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION

Rolland Jacks v. City of Santa Barbara

Case No: 1383959
Hearing Date: Tue Jan 09, 2018 9:30

Nature of Proceedings: Hearing Return on Remittitur

Return on Remittitur Hearing

Attorneys

For Plaintiff: David W.T. Brown; Paul E. Heidenreich

For Defendant: Michael G. Colantuono

Email: addresses: huskinsonbrown@att.net; MColantuono@chwlaw.us;

Ruling

1. It is clear that a further hearing is required. The Supreme Court held that the Trial Court litigation did not address whether the charges bear a reasonable relationship to the value of the property interests.

2. The Court needs to have the views of respective counsel as to when that hearing should take place and how long it will take.

3. The Court intends to set a trial date and a mandatory settlement date.

4. The Court has previously designated this case as complex litigation.

Background

On 11/6/17 the Supreme Court filed its Opinion in this case. It was 62 pages long and included a dissent. In summary, the Court said that pursuant to an agreement between Southern California Edison (SCE) and defendant City of Santa Barbara (the City), SCE includes on its electricity bills to customers within the City a separate charge equal to one percent (1%) of SCE’S gross receipts from the sale of electricity within the City, and transfers the revenues to the City. The City contends that this separate charge, together with another charge equal to one percent of SCE’s gross receipts that SCE includes in its electricity rates, is the fee paid by SCE for the privilege of using City property in connection with the delivery of electricity. Plaintiffs contend that the one percent charge that is separately stated on electricity bills is not compensation for the privilege of using City property, but is instead a tax imposed without voter approval, in violation of Proposition 218. (Cal. Const., art. XIII C, § 2, added by Prop. 218.)

The Supreme Court held that the right to use public streets or rights-of-way is a property interest, and Proposition 218 does not limit the authority of government to sell or lease its property and spend the compensation it receives for whatever purposes it chooses. Therefore, charges that constitute compensation for the use of government property are not subject to Proposition 218’s voter approval requirements. To constitute compensation for a property interest, however, the amount of the charge must bear a reasonable relationship to the value of the property interest; to the extent that the charge exceeds any reasonable value of the interest, it is a tax and therefore requires voter approval.

The litigation did not address whether the charges bear a reasonable relationship to the value of the property interests. The Supreme Court affirmed the judgment of the Court of Appeal to the extent that it reversed the Trial Court’s grant of the City’s motion for judgment on the pleadings, but reversed the Court of Appeal’s order that the Trial Court granted summary adjudication to plaintiffs.

Conclusion

It is clear that a further hearing is required. The Court needs to have the views of respective counsel as to when that hearing should take place and how long it will take.

 
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