August 11, 2009
A class action lawsuit (Case #BC419572) was filed today in Los Angeles County Superior Court challenging the enactment on Nov. 8, 2008 of the Utility User Tax ("Measure U"), on unincorporated Los Angeles County individuals and businesses based upon violations of Proposition 13, Proposition 218, the California Elections Code, and the California and United States constitutions.
Patrick Owens and Patricia Munoz, as individuals and on behalf of a Class of similarly situated residents of Los Angeles County, both business and individual vs. the County of Los Angeles alleges that the County is collecting UUTs without ever conducting a lawful vote per the election laws of California and laws and requirements of the federal government.
In January 1991 the Original UUT was imposed by the Los Angeles County Supervisors. The Original UUT was never put in front of the voters, contrary to Propositions 13 and 218, which, as amendments to the California Constitution, mandates that all new taxes and all tax increases must be approved by voters.
The Original UUT was successfully challenged in court (Oronoz v. County of Los Angeles, Case #BC334027). The county reached a settlement that rescinded the Original UUT. In the settlement it also agreed to conduct a lawful election for a new utility user tax to replace the invalid Original UUT.
The County placed "Measure U" on the Nov. 4, 2008 ballot in unincorporated Los Angeles, as agreed upon by the settlement. But both the Original UUT, which was being discontinued, and the new UUT, which was to be the subject of the election, were designated as Title 4 by the County.
"We believe that by enacting and collecting the UUT, the County is engaging in illegal taxation, just as it did with the Original UUT," says Long Beach plaintiff attorney Stephen M. Garcia of The Garcia Law Firm, co-counsel with Manhattan Beach attorney Steven F. Carvel of the Law Offices of Steven F. Carvel.
"The County never told voters that the Original UUT was being discontinued regardless of the outcome of the November election," says Garcia. "In fact, the truth is - which voters were never told - a "no" vote meant that there would be no utility tax in existence."
Election law (section 9105) requires that "a true and impartial statement" of the effect of the tax burdens must be considered. The County published a title, statements, expressions, and a summary of "Measure U" with misleading and false information. It claimed that a "Yes" vote would reduce the taxpayers' tax rate while a "No" vote would leave taxes unchanged. The materials never told voters that the Original UUT was being rescinded and this was a new tax, not a continuation of an existing tax.
The Original UUT was collected by telephone and gas user taxes. Voters also were never told that the new utility user tax created new taxes on forms of communication technologies not previously taxed.
Though only residents and business owners in unincorporated Los Angeles County pay this tax, the monies collected do not come back to them. The monies go into the general fund and is used for whatever the County chooses to use it for, anywhere in Los Angeles County.
This class action lawsuit is open to anyone living in unincorporated Los Angeles County from Nov. 8, 2008 to Aug. 11, 2009. The unincorporated county area is estimated to be 65% of the 4,084 square miles that make up Los Angeles County. These are areas with no mayors or city councils, including Rowland Heights, East Los Angeles, Stephenson Ranch, Altadena, Topanga, and about 100 areas.
For information about the class action suit, contact Stephen M. Garcia at The Garcia Law Firm, (866) 660-0012 or www.lawgarcia.com.
