Judge Stephen I. Goorvitch, Case Number: 23STCP01283, Date: 2024-05-08 Tentative Ruling

Judge: Stephen I. Goorvitch, Case: 23STCP01283, Date: 2024-05-08 Tentative Ruling

Petitioner Key Disposal & Recycling, Inc. (“Petitioner”) had a waste hauling license from the City of Commerce (“Respondent” or the “City”). On February 20, 2018, the City adopted Resolution 18-21, which authorized the staff to discontinue issuing recycling hauler licenses, establish a single license for haulers of refuse and recycling services, and require all haulers to pay a license fee of 11 percent of gross annual revenue. On March 7, 2018, the City notified Petitioner that it could continue serving its existing customers until no later than April 1, 2023, in accordance with the new licensing model. On October 2, 2018, the City adopted Resolution 18-133, which increased the hauler fee from 11 percent to 15 percent of gross annual revenue. The City enacted Ordinance 695 implementing these resolutions.

Over four years later, on April 20, 2023, Petitioner filed a petition for writ of mandate and complaint asserting the following causes of action: (1) Declaratory relief, (2) Violation of the Unruh Civil Rights Act, (3) Violation of Title 42, United States Code, section 1983, (4) Tortious interference with business relations, and (5) Writ of mandate under Code of Civil Procedure section 1085. The court (Beckloff, J.) stayed the second, third, and fourth causes of action and set trial on the first and fifth causes of action.

Petitioner argues that the resolutions and related ordinance were invalid because: (1) the City was required to publish or post them as required by the Government Code because they imposed taxes; and (2) The City was required to put the tax on the ballot for voter approval under the California Constitutional, Article XIII C. The City argues that the petition for writ of mandate is procedurally defective because Petitioner has failed to name indispensable parties; the claim is untimely; and Petitioner lacks standing. The City also opposes the petition on the merits, arguing: (1) The City was not required to publish the resolutions, and the ordinance complied with the requirements of the Government Code; and (2) The resolution and ordinance do not impose “taxes.” Following a hearing, the court denies the petition for writ of mandate and the claim for declaratory relief for the following reasons: (1) Petitioner lacks standing; (2) The petition is untimely; and (3) The hauler license fee is exempt from Article XIII C. The court lifts the stay on the remaining causes of action and transfers the case to Department One for assignment to an independent calendar court for resolution of the second, third, and fourth causes of action.

In response to State-mandated Commercial Recycling Program regulations and a compliance order issued by the California Department of Resources and Recycling (“CalRecycle”), City began transitioning to a semi-exclusive franchise agreement model for commercial refuse and recycling services in early 2018. (Nila Decl. ¶ 5.) In efforts to comply with the CalRecycle Compliance Order, the City adopted Resolution 18-21 and Ordinance 695. (Nila Decl. ¶ 6; RJN Exh. A-C.)

Resolution 18-21 was adopted on February 20, 2018, and authorized City staff to:

· transfer an existing and valid refuse and/or recycling hauler license to the parent company who acquired the licensed hauler for operating solely under the parent company name. (RJN Exh. A.)

Also on February 20, 2018, the City Council adopted Ordinance 695, which repealed, revised, and replaced Chapter 6.06 (Garbage and Refuse) of Title 6 (Health and Sanitation) of the Municipal Code. (RJN Exh. B.) As relevant to this writ petition, Ordinance 695 provides for the payment of licensed hauler fees payable to the City on a quarterly basis that “are a percentage of” the contractor’s gross receipts for residential and commercial refuse and/or recycling material arising out of the performance of services. (RJN Exh. B; Sec. 6.06.070.) Ordinance 695 did not set or specify the percentage to be paid for hauler fees. (Ibid.) The hauling fee of 11 percent has been in effect since 2010. (See Nila Decl., ¶ 9 & Exh. D.)

On or around June 5, 2018, the City issued a Request for Proposals to solicit proposals from existing licensed refuse haulers for both refuse and recycling services. (Nila Decl. ¶ 7.) Twelve bids were received, including one from Petitioner, “each of which was analyzed and scored in the areas of quality and completeness of proposal, corporate capability, reference evaluation, recycling program evaluation, information management, and additional qualifications.” (Ibid.) “Six companies were originally determined to be the most responsive to the City’s needs and scope of services required and achieved a score of 80 or higher. The number of authorized haulers was ultimately increased to eight and currently consists of seven. Petitioner was not among the most responsive bidders.” (Ibid.)

Resolution 18-133 was adopted on October 2, 2018, and approved the execution of Semi-Exclusive Agreements for Commercial Refuse and Recycling Services with eight companies–not including Petitioner–and adjusted the City’s hauler fee from 11% to 15%. Resolution 18-133 indicated that City staff recommended the fee percentage increase because “the hauler fee has not been increased since 2010.” (RJN Exh. C.)

On March 7, 2018, City issued a notice to Petitioner stating, in part: “City … has determined that it is in the public interest to discontinue providing solid waste collection services under its current license-based system, and is transitioning to a semi-exclusive franchise agreement model…. Accordingly, pursuant Public Resources Code Section 49520 you are hereby notified that semi-exclusive franchise waste handling services are to be authorized in the City, and that all solid waste hauling services provided by you within the City … shall be terminated no later than April 1, 2023.” (Nila Decl. Exh. B.) Petitioner operated a waste-hauling business in City until March 7, 2023. (Pet. ¶ 1; Ans. ¶ 1; see also Nila Decl. ¶¶ 5-10; RJN Exh. B, D, E.)

On April 20, 2023, Petitioner filed its petition for writ of mandate and complaint for declaratory relief and other causes of action. On July 28, 2023, at the trial setting conference, the court stayed all causes of action except the fifth cause of action for writ of mandate and the first cause of action as it relates to declaratory relief. On December 18, 2023, Petitioner filed its opening brief in support of the petition (“OB”). On January 24, 2024, Respondent filed its opposition. On February 8, 2024, Petitioner filed its reply.

The petition for writ of mandate is brought pursuant to Code of Civil Procedure section 1085. There are two essential requirements to the issuance of an ordinary writ of mandate under Code of Civil Procedure section 1085: (1) a clear, present, and ministerial duty on the part of the respondent, and (2) a clear, present, and beneficial right on the part of the petitioner to the performance of that duty. (California Ass’n for Health Services at Home v. Department of Health Services (2007) 148 Cal.App.4th 696, 704.) “Generally, mandamus is available to compel a public agency’s performance or to correct an agency’s abuse of discretion when the action being compelled or corrected is ministerial.” (AIDS Healthcare Foundation v. Los Angeles County Dept. of Public Health (2011) 197 Cal.App.4th 693, 700.)

An agency is presumed to have regularly performed its official duties. (Evid. Code § 664.) Generally, the petitioner “bears the burden of proof in a mandate proceeding brought under Code of Civil Procedure section 1085.” (California Correctional Peace Officers Assn. v. State Personnel Bd. (1995) 10 Cal.4th 1133, 1154.) A reviewing court “will not act as counsel for either party to an appeal and will not assume the task of initiating and prosecuting a search of the record for any purpose of discovering errors not pointed out in the briefs.” (Fox v. Erickson (1950) 99 Cal.App.2d 740, 742.)

On questions of law arising in mandate proceedings, the court exercises independent judgment. (Christensen v. Lightbourne (2017) 15 Cal.App.5th 1239, 1251.) “Interpretation of a statute or regulation is question of law subject to independent review.” (Ibid., citations omitted.)

Petitioner requests judicial notice of six exhibits, which Respondent does not oppose. Therefore, Petitioner’s request for judicial notice is granted. Petitioner does not object to any of Respondent’s exhibits, so the court shall consider these exhibits.

The gravamen of Petitioner’s claim is that the city imposed a “tax” without complying with the publication/posting requirements of Government Code section 36933, and without obtaining the approval of the electorate as required by California Constitution Article XIII C. In the opening brief, Petitioner challenges the City’s increase of the hauler license fee from 11 percent to 15 percent, arguing that this was “arbitrary” and “more than necessary to cover the reasonable cost of the City’s activity.” (OB 10.) Therefore, the court considers the petition with respect to the decision to increase the license fee to 15 percent.

Petitioner does not develop an argument that the existing 11 percent hauler license fee was an improper tax or that City failed to comply with the Government Code when it first imposed the fee in or before 2010, thereby waiving any challenge. (Nelson v. Avondale HOA (2009) 172 Cal.App.4th 857, 862-863 [“When an appellant fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived”].) Indeed, Petitioner cannot challenge the City’s decision to assess the 11 percent license fee in this action. The City has imposed the fee on waste haulers since at least 2010, and Petitioner never challenged that fee. (See Nila Decl., ¶ 9 and Exh. D.) To the contrary, Petitioner paid the 11 percent fee without protest from March 2018, when it learned its right to provide waste hauling services would terminate, until March-April 2023, when Petitioner stopped operating its waste hauling business in City. (See Complaint ¶ 1; Answer ¶ 1; Nila ¶¶ 5-10 and Exh. B, E; OB 1:9-10.) Petitioner also does not identify the City resolution or ordinance in which the 11 percent fee was originally imposed or include any discussion of the alleged defects in enacting that fee.

Based upon the foregoing, the court finds that Petitioner challenges only the City’s decision to increase the hauler license fee from 11 percent to 15 percent. To the extent Petitioner seeks to challenge the initial imposition of the fee, Petitioner waives the issue for the reasons stated.[1]

Petitioner lacks standing to challenge Resolution 18-133, which adjusted the City’s hauler license fee from 11 percent to 15 percent because Petitioner was never obligated to pay the increased fee and therefore suffered no economic harm. To have standing to seek a writ of mandate, a party must be “beneficially interested.” (Code Civ. Proc. § 1086.) “A petitioner is beneficially interested if he or she has some special interest to be served or some particular right to be preserved or protected over and above the interest held in common with the public at large.” (Rialto Citizens for Responsible Growth v. City of Rialto (2012) 208 Cal. App. 4th 899, 913; accord Carsten v. Psychology Examining Com. (1980) 27 Cal.3d 793, 796-97.) “This standard … is equivalent to the federal ‘injury in fact’ test, which requires a party to prove by a preponderance of the evidence that it has suffered an invasion of a legally protected interest that is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.” (Associated Builders and Contractors, Inc. v. San Francisco (1999) 21 Cal.4th 352, 361-362, citations and internal quotations omitted.)

Here, in March 2018, City notified Petitioner that its “semi-exclusive franchise waste handling services are to be authorized in the City, and that all solid waste hauling services provided by you within the City … shall be terminated no later than April 1, 2023.” (Nila Decl. Exh. B.) Petitioner was permitted to operate its waste hauling business and continue to pay the then-existing franchise fee of 11 percent for five years pursuant to Public Resources Code 49520. (Id. ¶ 11.) During this period, Petitioner paid the 11 percent fee and never protested that it was as “tax.” (Ibid.) It is undisputed that Petitioner never paid the new franchise fee of 15 percent. (See Petition, OB, and Reply generally.) Accordingly, Petitioner has not shown that it suffered, or continues to suffer, any injury from the increase in the franchise fee from 11 percent to 15 percent.

In reply, Petitioner argues it has standing because “a successful resolution of this action will benefit Petitioner because the scheme that wrongfully terminated Petitioner’s hauler license would be invalidated.” (Reply 3.) This argument is circular and unpersuasive. Petitioner challenges the new waste hauler scheme on the grounds that the increase in the franchise fee from 11 percent to 15 percent in Resolution 18-133 constitutes a tax that required approval by the voters. However, Petitioner does not otherwise challenge the City’s transition to a semi-exclusive franchise agreement model. Any economic injury allegedly suffered by Petitioner is the result of its failure to qualify as one of the most responsive bidders in connection with the RFP issued by the City for the semi-exclusive franchise agreement model, not because of the increase in the franchise fee.

Based on the foregoing, Petitioner lacks standing to prosecute its writ claims. Therefore, the writ is denied on this basis.

In the alternative, the court finds that Petitioner’s challenge to Resolution 18-133, which increased the hauler’s license fee from 11 percent to 15 percent, is untimely. Petitioner seeks to enforce the “publication/posting” requirements of Government Code sections 36933 and 36936.1. (OB 4-6.) Petitioner also seeks to enforce the City’s obligations under Propositions 218 and 26 and California Constitution, Article XIII C, section 2, to submit an alleged franchise tax to a public vote. (See Pet. ¶¶ 19-21; OB 6-11.) “The statute of limitations applicable to a writ of mandamus under Code of Civil Procedure section 1085 depends upon the nature of the obligation sought to be enforced.” (Ragan v. City of Hawthorne (1989) 212 Cal.App.3d 1361, 1367.) Petitioner seeks to enforce obligations created by statute. (See Peles v. La Bounty (1979) 90 Cal.App.3d 431, 435.) Accordingly, a three-year statute of limitations applies. (Code Civ. Proc. § 338(a).)

“[T]he statute of limitations in a mandamus proceeding ‘begins to run when the [petitioner’s] right first accrues.’” (Monroe v. Trustees of the California State Colleges (1971) 6 Cal.3d 399, 405.) Resolution 18-133 approved the execution of Semi-Exclusive Agreements for Commercial Refuse and Recycling Services with eight companies—not including Petitioner— and adjusted the City’s hauler license fee from 11 percent to 15 percent. (RJN Exh. C.) Accordingly, Petitioner suffered appreciable injury and its cause of action accrued no later than October 2, 2018, when Resolution 18-133 was adopted. Petitioner filed this action on April 20, 2023, over four years later. Accordingly, Petitioner’s claims are time-barred by the three-year statute of limitations in section 338(a).[2]

Petitioner argues that “the City’s failure to comply with the constitution restarts the statute of limitations upon each tax collection,” citing Howard Jarvis Taxpayers Ass’n v. City of La Habra (2001) 25 Cal.4th 809. (Reply 3.) In relevant part, Howard Jarvis states:

[W]e hold only that, where the three-year limitations period for actions on a liability created by statute (Code Civ. Proc., § 338, subd. (a)) applies, and no other statute or constitutional rule provides differently, the validity of a tax measure may be challenged within the statutory period after any collection of the tax, regardless of whether more than three years have passed since the tax measure was adopted…. [O]ur holding relates only to injuries occurring in the statutory three-year period before suit is brought and applies only to plaintiffs injured by tax collections within the three-year period.

(Id. at 825.) As discussed, Petitioner never paid the additional tax, so Petitioner would not benefit from this holding.

Based on the foregoing, Petitioner’s petition for writ of mandate is untimely. Therefore, the writ is denied on this basis. The court need not address Respondent’s remaining procedural argument, that Petitioner failed to join necessary and indispensable parties.

Petitioner argues that the City did not comply with the publication/posting requirement of Government Code section 36933. That statute states, in relevant part:

Within 15 days after its passage, the city clerk shall cause each ordinance to be published at least once, with the names of those city council members voting for and against the ordinance, in a newspaper of general circulation published and circulated in the city, or if there is none, he or she shall cause it to be posted in at least three public places in the city or published in a newspaper of general circulation printed and published in the county and circulated in the city. In cities incorporated less than one year, the city council may determine whether ordinances are to be published or posted. Ordinances shall not be published in a newspaper if the charge exceeds the customary rate charged by the newspaper for publication of private legal notices, but these ordinances shall be posted in the manner and at the time required by this section. . . . Except as provided in Section 36937, an ordinance shall not take effect or be valid unless it is published or posted in substantially the manner and at the time required by this section.

(Gov. Code § 36933(a), (b).) However, this applies only “[w]here the tax rate or the amount of revenue required to be raised by taxation is fixed by resolution . . . .” (Gov. Code § 36936.1.) Although Resolution 18-21 authorized the staff to “require all haulers to pay a hauler license fee,” the resolution did not specify the amount of the license fee or establish any amount of revenue required to be raised by the license fee. (RJN Exh. A.) Accordingly, Respondent was not required to comply with the publication/posting requirements of section 36933 for Resolution 18-21.

Ordinance 695 repealed, revised, and replaced Chapter 6.06 (Garbage and Refuse) of Title 6 (Health and Sanitation) of the Municipal Code in 2018. (RJN Exh. B.) However, Ordinance 695 did not set or specify the percentage to be paid for hauler fees. (Ibid.) As discussed, this fee was established in or before 2010. Accordingly, Ordinance 695 was not subject to the publication/posting requirement of Government Code section 36933. Regardless, Petitioner does not develop any argument that Respondent failed to comply with these requirements with respect to Ordinance 695. Petitioner merely argues that “City failed to publish or post Resolutions 18-21 and 18-133.” (OB 6.) In any event, Respondent submits evidence that it published Ordinance 695 in accordance with section 36933. (See Oppo. 11 and Shumway Decl. ¶¶ 4-5.) Petitioner does not respond to this evidence in reply. (Reply 5; Sehulster Tunnel, supra, 111 Cal.App.4th at 1345, fn. 16.) Therefore, Petitioner has failed to satisfy its burden of demonstrating that the City violated Government Code section 36933 with respect to Ordinance 695.

Finally, the hauler license fee is not a “tax,” so the City was not required to comply with the publication/posting requirements of Government Code section 36933 or place the issue on the ballot. The California Constitution, Article XIII C, generally provides that no local government “may impose, extend, or increase” any general or special tax unless and until the tax is submitted to and approved by the electorate. (Cal. Const., Art. XIII C, Sec. 2(b)-(d). Article XIII C, Section 1 defines the term “tax” as “any levy, charge, or exaction” imposed by a local government. (Cal. Const., Art. XIII C, Sec. 1(e).)

This general definition of “tax” is qualified by seven exemptions, including, as relevant to this writ petition, the following:

(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.

(4) A charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.

“The local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor's burdens on, or benefits received from, the governmental activity.” (Cal. Const., Art. XIII C, Sec. 1(e).) Respondent acknowledges that Resolution 18-133 increased the hauler license fee from 11 percent to 15 percent, but argues the fee is exempt under section 1(e)(4) and section 1(e)(1) of Article XIII C.

a. Section 1(e)(4) – This section exempts “[a] charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.” In Zolly v. City of Oakland (2022) 13 Cal.5th 780, the California Supreme Court discussed this exemption at length in the context of a demurrer filed by the City of Oakland to a complaint filed by city taxpayers challenging franchise fees that two private waste haulers agreed to pay for the right to “transact business, provide services, use the public street and/or other public places, and to operate a public utility” for waste collection services. (Id. at 784.) The Court held that Oakland had not shown, on demurrer, that the fees were exempt under section 1(e)(4). In relevant part, the Court reasoned:

Oakland has not demonstrated as a matter of law that the payors paid the challenged fees in exchange for a specific use of government property that they would not have enjoyed had they not paid the fee. The text of Exemption 4 supports such a fact-specific requirement by focusing on the actual benefit exchanged between the payor and local government. Exemption 4 does not use the term “franchise fees”; instead, it exempts “[a] charge imposed for entrance to or use of local government property.” By describing the qualitative rationale for the charge instead of using any formal labels, this language indicates that the voters intended to exempt only those fees that adhered to the rationale underlying that exemption—i.e., fees paid as consideration for a specific use of government property.

So understood, Exemption 4’s “imposed for” language applies naturally to traditional types of entrance and user fees for local government property. For fees such as a park entrance fee, there is little question that payment is a necessary condition for “entrance to or use of” the property. (Art. XIII C, C, § 1, subd. (e)(4).) In other words, entrance to or use of a public park, bridge, or other government property is limited unless the entrance or user fee is paid. Specific kinds of franchise fees may also meet this requirement. In Jacks, for example, the utility had obtained a right to “construct and use equipment along, over, and under” public roadways to facilitate the distribution of electricity. (Jacks, supra, 3 Cal.5th at p. 254, 219 Cal.Rptr.3d 859, 397 P.3d 210.) By paying the franchise fee, the utility there had gained a specific “use of local government property” beyond what was otherwise available to the public (i.e., an easement to install equipment)….

Here, Oakland has yet to demonstrate that the waste management providers gained any “use of local government property” in exchange for their payment of the challenged fees. (Art. XIII C, § 1, subd. (e)(4).) Although the ordinances refer to the service providers’ ability to “use the public street and/or other public places,” Oakland has not established that this “use” means anything more than the generally available prerogative to drive on public roads and rights-of-way.… Counsel for Oakland suggested during oral argument that the waste haulers may have attained the special ability to drive heavy vehicles and to place waste receptacles on Oakland’s streets, but these statements by counsel are not evidence and do not amount to an admission or stipulation of fact…. Because there is a factual question as to whether the challenged fees were paid as consideration for a special “use of local government property” within the meaning of article XIII C, the applicability of Exemption 4’s first clause cannot be resolved in Oakland's favor on demurrer.

By contrast, in the instant case, Respondent relies on the declaration of Gina Nila, the City’s Deputy Director of Public Works Operations, which makes clear that the hauler license fees entitles the haulers to “specific use of government property that they would not have enjoyed had they not paid the fee.” In relevant part, Nila declares:

The Semi-Exclusive Agreements for Commercial Refuse and Recycling Services granted to the successful bidders received the privilege to use the City’s public streets which are unique and not available to the general public. These privileges to use the public streets include, but are not limited to, the following types of uses: (1) refuse pickups which requires slow moving trucks which are not a normal and usual use of the streets; (2) slow moving, and frequent stops are allowed to … trucks which are not allowed to other traffic on the streets; (3) the operations of the trash trucks impedes normal flow of traffic which is a privilege granted by the franchise, not allowed by other users of the streets; and (4) the heavy loads of the trucks causes additional wear and tear on the streets not associated with general traffic. The Commercial Municipal Code [section 6.11.080] further provides, in relevant part, that no person ‘shall collect, carry, convey or transport refuse on or through any street, alley or public place in the city’ except for City employees or an employee of an authorized contractor/licensee of the City.

(Nila Decl. ¶ 8 and Exh. C.) Nila’s declaration is corroborated, in part, by the October 2, 2018, City Council staff report, which outlines the process by which City solicited proposals from existing licensed refuse haulers for both refuse and recycling services. (Id. ¶ 9, Exh. D.)

Petitioner has not refuted this evidence in any way. With the opening brief, Petitioner submits a declaration of its attorney, Thomas Nitti, who attended the City’ public meetings in 2018 that discussed Resolution 18-21, Ordinance 695, and Resolution 18-133. Nitti declares:

There was no public discussion or analysis at the meetings or in any of the public reports regarding the raising of the waste hauler tax from 11% to 15% in Resolution 18-133. From my observations of the public record, the raise from 11% to 15% tax was arbitrary, and there was no evidence that the imposed tax was no more than necessary to cover the reasonable costs of the governmental activity.

(Nitti Decl. ¶ 4.) Nitti’s declaration does not provide any response to the evidence that Resolution 18-133 increased the licensee fee as part of bidding process that awarded Semi-Exclusive Agreements for Commercial Refuse and Recycling Services in exchange for the right to collect, carry, and transport refuse and recycling materials on City streets.

In reply, Petitioner also did not rebut City’s evidence. Rather, Petitioner argues that, in Zolly, “the Supreme Court correctly interpreted Exemption 4 to apply to admission fees to the traditional meaning of government property, i.e. city parks.” (Reply 8.) The Court’s decision was not so limited. Rather, in ruling on a demurrer, the Court held that Oakland had not shown, as a matter of law, that the “waste management providers gained any ‘use of local government property’ in exchange for their payment of the challenged fees.” The Court also indicated that there was a “factual question as to whether the challenged fees were paid as consideration for a special ‘use of local government property’ within the meaning of article XIII C.” (Zolly, supra, 13 Cal.5th at 794-796.) The Court did not rule out the possibility that, depending on the facts, waste hauling licensee fees could be exempt under section 1(e)(4) if they were paid as consideration for a privilege that the general public would not receive, e.g., the right to drive slower than otherwise permissible; the right to make frequent stops not otherwise allowed; the right to impede the normal flow of traffic; the right to operate heavier vehicles; and the right to conduct business activities not permissible to the general public.

Petitioner also argues that “City has not made any showing that the waste providers use the roadways in an entirely different capacity than all other drivers, such as the permanent use of the street for utility equipment such as the permanent installation of telephone and electricity poles.” (Reply 8.) However, as noted, Respondent submits evidence that the Semi-Exclusive Agreements for Commercial Refuse and Recycling Services grant unique privileges to the waste haulers to operate slow-moving, heavy, and frequently stopping vehicles on City streets and that such privileges are not available to other persons or entities that operate vehicles in the City. (Nila Decl. ¶ 8.) Moreover, the hauler license fee permits the haulers to collect refuse, which is prohibited by members of the general public. Specifically, Municipal Code section 6.11.080 states that “No person shall collect, carry, convey or transport refuse on or through any street, alley or public place in the city, except: (1) A person who is an employee of the city; [and] (2) An employee of an authorized contractor/licensee of the city.” (Id. Exh. C.) Petitioner does not respond to this evidence, which supports Respondent’s position that the license fees at issue were imposed by City in exchange for special privileges not available to members of the general public.

b. Section 1(e)(1) – This section exempts “[a] charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.” As discussed, the hauler license fees convey a benefit or privilege to the haulers that is not provided to members of the general public.

Petitioner argues that the increase from 11 percent to 15 percent was “arbitrary” and “more than necessary to cover the reasonable cost of the City’s activity.” (OB 10.) In Jacks v. City of Santa Barbara (2017) 3 Cal.5th 248, the Supreme Court considered whether a surcharge on electricity bills collected by the utility and remitted to the city was an invalid tax imposed without voter approval. The Court held that “to constitute a valid franchise fee under Proposition 218, the amount of the franchise fee must bear a reasonable relationship to the value of the property interests transferred.” (Id., at 270.) Jacks was based on a surcharge imposed prior to the adoption of Proposition 26 in 2010, which added the seven exemptions to Article XIII C. In that respect, Jacks is not directly on point. Nonetheless, neither Petitioner nor Respondent has cited a published appellate decision interpreting exemption 1(e)(1) and that is directly applicable. In that context, Jacks provides the following guidance relevant to this case:

We recognize that determining the value of a franchise may present difficulties. Unlike the cost of providing a government improvement or program, which may be calculated based on the expense of the personnel and materials used to perform the service or regulation, the value of property may vary greatly, depending on market forces and negotiations. Where a utility has an incentive to negotiate a lower fee, the negotiated fee may reflect the value of the franchise rights, just as the negotiated rent paid by the lessor of a publicly owned building reflects its market value, despite the fact that a different lessor might have negotiated a different rental rate. In the absence of bona fide negotiations, however, or in addition to such negotiations, an agency may look to other indicia of value to establish a reasonable value of franchise rights.

In sum, a franchise fee must be based on the value of the franchise conveyed in order to come within the rationale for its imposition without approval of the voters. Its value may be based on bona fide negotiations concerning the property's value, as well as other indicia of worth.

Here, in the recitals to Resolution 18-133, Respondent explained that “since the hauler fee has not been increased since 2010, staff also recommends adjusting the hauler license fee from 11% to 15% of gross receipts for all licensed haulers operating in the City.” (RJN Exh. C.) In her declaration, Nila states, on information and belief, that “an increase to 15% was determined to be appropriate based on a survey of the average hauler fees being charged by other cities.” (Nila Decl. ¶ 9.) She also declares, on information and belief, that “the 15% fee represents the fair market value of the rights and privileges enjoyed by the new franchisees.” (Ibid.) As support, Nila authenticates the October 2, 2018, City Council staff report, which states in pertinent part: “Also, since the hauler license fee of 11% on gross receipts has not been increased since 2010 and the average fees among cities ranges from 15% to 20%, staff also recommends increasing the fee to 15% applicable to all licensed haulers…. FISCAL IMPACT: The increase in hauler fees from 11% to 15% of gross receipts is expected to generate $250,000 - $275,000 in additional revenue annually.” (Id. Exh. D.) Petitioner does not refute this evidence, which suggests that the 15 percent hauler license fee constitutes a fair value for the license.

Based upon the foregoing, the court finds that the City’s hauler license fee is exempt from Article XIII C pursuant to section 1(e)(4) and section 1(e)(1). Accordingly, Respondent was not required to comply with the publication/posting requirements of Government Code section 36933 with respect to Resolution 18-133.

Petitioner’s first cause of action is for declaratory relief, and the claim is duplicative of its petition for writ of mandate under Code of Civil Procedure section 1085. A declaratory relief action is inappropriate when a plaintiff has an adequate remedy on other causes of action at trial. (See Hood v. Superior Court (1995) 33 Cal.App.4th 319, 324; California Ins. Guarantee Assn. v. Superior Court (1991) 231 Cal.App.3d 1617, 1624.)

The declaratory relief statute should not be used for the purpose of anticipating and determining an issue which can be determined in the main action. The object of the statute is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.

(General of America Ins. Co. v. Lilly (1968) 258 Cal.App.2d 465, 470.) The Court has discretion to decline to issue a declaratory judgment under these circumstances. (See AICCO, Inc. v. Insurance Company of North America (2001) 90 Cal.App.4th 579, 590.) In the alternative, the court rules in favor of Respondent, and against Petitioner, for the reasons stated.

1. The court denies the petition for writ of mandate because: (1) Petitioner lacks standing; (2) The claim is untimely, (3) The publication/posting requirements do not apply to Resolution 18-21; (4) Petitioner does not demonstrate any violation regarding Ordinance 695; and (5) Respondent demonstrates that the increase in the hauler license fee is exempt from Article XIII C.

2. The court declines to issue a declaratory judgment on the first cause of action. In the alternative, the court issues a declaratory judgment in favor of Respondent, and against Petitioner, for the reasons stated.

4. Because these causes of action are unrelated to the petition for writ of mandate under Code of Civil Procedure section 1085, the court transfers this case to Department One for reassignment to an independent calendar court.

5. Pursuant to the “one judgment rule,” Respondent shall lodge a judgment at the conclusion of the case.

6. Respondent’s counsel shall provide notice and file proof of service with the court.

[1] Regardless, even if this petition encompasses a challenge to the original hauler license fee of 11 percent, the court would deny the writ. As will be discussed, the claim would be untimely and Resolution 18-21 was not subject to the publication/posting requirement under Government Code section 36933.

[2] Petitioner’s claim would be untimely even if the four-year “catchall” limitations period applies. (Code Civ. Proc. § 343.)