Supreme Court No. _______________

IN THE SUPREME COURT

OF THE STATE OF CALIFORNIA

______________________________________________________

GEORGE W. LUKE,

Petitioner and Appellant,

vs.

SONOMA COUNTY, AND ITS BOARD OF SUPERVISORS, AND ITS

AUDITOR-CONTROLLER-TREASURER-TAX COLLECTOR, AND

ITS DIRECTOR OF HUMAN RESOURCES, AND ITS COUNTY

COUNSEL, AND ITS COUNTY ADMINISTRATOR; AND THE

SONOMA COUNTY EMPLOYEES RETIREMENT ASSOCIATION

AND ITS CEO/RETIREMENT ADMINISTRATOR; AND THE

SONOMA COUNTY LAW ENFORCEMENT ASSOCIATION; AND

THE SERVICE EMPLOYEES’ INTERNATIONAL UNION; AND THE

SONOMA COUNTY DEPUTY SHERIFFS’ ASSOCIATION,

Defendants and Respondents.

___________________________________________________

After a Decision By the Court of Appeal,

First Appellate District, Division Five, Case No. A155286

_______________________________________________________

PETITION FOR REVIEW

______________________________________________________

Jeffrey A. Robinson (SBN 132262)

Email: jar@rrlawyers.com

Charles R. Patterson (SBN 310656)

Email: cpatterson@rrlawyers.com

ROBINSON & ROBINSON, LLP

2301 Dupont Drive, Suite 530

Irvine, CA 92612

(949) 752-7007

(949) 752-7023 (fax)

Attorneys for Petitioner and Appellant

GEORGE W. LUKE

Supreme Court of CaliforniaJorge E. Navarrete, Clerk and Executive Officer of the Court

Electronically RECEIVED on 1/17/2020 on 5:00:29 PM

Supreme Court of CaliforniaJorge E. Navarrete, Clerk and Executive Officer of the Court

Electronically FILED on 1/17/2020 by Celia Wong, Deputy Clerk

2

TABLE OF CONTENTS

TABLE OF CONTENTS..………………………………………………….... 2

TABLE OF AUTHORITIES..……………………………….………………. 4

I. ISSUES FOR REVIEW….……………………………..………….….... 7

II. WHY REVIEW SHOULD BE GRANTED..….…………………….….. 7

III. STATEMENT OF THE CASE..…....…………………….………….... .12

A. Local Governments Are Statutorily And Constitutionally

Prohibited From Adopting And Implementing Public Pension

Increases That Do Not Meet Specific Requirements…...…......12

1. Government Code Section 7507 ……………….……...13

2. Government Code 23006 ……………………...….….. 14

3. Contitutional No-Gift Rule …………………………... 15

B. Luke Brought This Statutory Taxpayer Lawsuit To Enforce

Sonoma County's Compliance With The Laws Governing

Adoption And Payment Of Pension Increases…….………..... 15

C. The First District Court Of Appeal Deviated From This Court's

Holding In Howard Jarvis Taxpayers' Assn v. City of La Habra,

Allowing Sonoma County To Continue Violating Government

Code Sections 7507 And 23006 In Perpetuity, And Creating

Vested Rights In Unauthorized Pension Benefits……………. 17

1. Continuous Accrual………………….……………….. 18

2. Publication and Other Pending Cases………………... 21

3

IV. REVIEW IS NECESSARY TO RESOLVE IMPORTANT

STATEWIDE ISSUES AFFECTING PENSION BENEFITS

AND UNLAWFUL EXPENDITURE OF PUBLIC FUNDS……..… 21

A. The Supreme Court Should Resolve The Conflicts

Between The First Appellate District And Four Other

Appellate Districts About Whether Vested Rights In

Unauthorized Pension Benefits Can Accrue By The Mere

Passage of Time……………………………………………..... 22

B. The Supreme Court Should Resolve The Confusion

Among The Courts of Appeal About The Scope Of The

Continuous Accrual Doctrine Applicable In Taxpayer Lawsuits

To Stop Ongoing Government Misfeasance, As Articulated By

The Supreme Court In Howard Jarvis and Aryeh……………..26

C. The Supreme Court Should Resolve The Conflict

Among The Courts Of Appeal As To Whether Continuous

Accrual Applies In Suits To Stop Unauthorized Pension

Payments (As The Sixth District Held in Blaser and Baxter)

Or Does Not So Apply (As The First District Held)…..…..…. 29

V. CONCLUSION........................................................................................... 32

CERTIFICATE OF COMPLIANCE…..……………………………………. 34

ATTACHMENTS

Opinion of Court of Appeal, Luke v. Sonoma County, et al,

First Appellate District, Division Five, Case No. A155286

(filed December 12, 2019) ................................................................................35

Attachment 1

Ca. Gov. Code section 7507, text as adopted and

in effect1977 through 2008 …………………………………………………...49

Attachment 2

Cited excerpts of Oral Argument in Luke v. Sonoma County,

Case No. A155286.............................................................................................51

PROOF OF SERVICE…………………….…………………………………..56

4

TABLE OF AUTHORITIES

Cases Abbott v. City of Los Angeles (1958) 50 Cal. 2d 438………………….. 19, 27, 30

Alameda County Deputy Sheriff’s Assn v. County Employees’ Retirement

Assn (2019) 19 Cal.App.5th 61………………………………………… 11

Aryeh v. Canon Business Solutions (2013)

55 Cal.4th 1185…………………………………………………… passim

Baxter v. California State Teachers' Retirement System (2017)

18 Cal.App.5th 340, 349, 379,380-281, reh'g denied (Jan. 9, 2018),

review denied (Feb. 21, 2018).……………………… 8, 11, 22, 24, 30-32

Blaser v. State Teachers’ Retirement System (2019)

37 Cal.App.5th 349…………………….............. 8, 11, 22, 24, 28, 30-32

Cal Fire Local 2881 v. California Public Employees’ Retirement System

(2019) 6 Cal.5th 965…………………………………………................ 11

City of Pasadena v. Estrin (1931) 212 Cal. 231, 235-36……………………... 23

Crumpler v. Board of Administration Employees’ Retirement System (1973)

32 Cal.App.3d 567……………………………………………… 8, 23, 24

Dillon v. Board of Pension Commissioners (1941)

18 Cal.2d 427………………………………………..……................... 30

Dryden v. Board of Pension Commrs. (1936) 6 Cal.2d 575.…………. 19, 27, 30

Flethez v. San Bernardino County Employees Retirement Ass’n (2017)

2 Cal.5th 630…………………………………………………………… 11

Freemont Indem Co. v. Freemont General Corp. (2007)

148 Cal.App.4th 97, 113-15……………………………………………. 18

Howard Jarvis Taxpayers Ass’n v. City of La Habra (2001)

25 Cal.4th 809, 812-814, 818-825.…............................................... passim

In Re Ricardo P. (2019) 7 Cal.5th 1113……………………………………………… 28

5

Lamb v. Board of County Peace Officers Retirement Commission of

Los Angeles County (1938) 29 Cal.App.2d 248, 250…………………. 15

Los Angeles Dredging Co. v. Long Beach (1930) 210 Cal. 348, 353………..... 24

Medina v. Board of Retirement (2003)

112 Cal.App.4th 864, 871-72………………………………......... 8, 22, 24

Miller v. McKinnon (1942) 20 Cal.2d 83….…………………………… 8, 23, 24

Modoc County v. Spencer & Raker (1894) 103 Cal. 498……………………… 23

Orange County Foundation v. Irvine Co. (1983) 139 Cal.App.3d 195……….. 15

Pacific Gas & Elec. Co. v. City of Union City (N.D. Cal.2002)

220 F. Supp.2d 1070, 1079, 1080…………………………………………….. 28

Page v. Mira Costa Community College Dist. (2009)

180 Cal.App.4th 471, 496……………………………………………….15

Riverside Portland Cement Co. v. City of Los Angeles (1918)

178 Cal. 609, 609–610…………………………………………………. 23

San Diego City Firefighters, Local 145 v. Bd. Of Admin. Of San Diego

City Emp. Ret. Sys. (2012) 206 Cal.App.4th 594, 606………….…… 8, 22

San Diego Gas & Electric Co. v. City of Carlsbad (1998)

64 Cal.App.4th 785, 792–793………………………………………….. 23

Shalabi v. City of Fontana (2019) 35 Cal.App.5th 639………………………… 12

Sherwin–Williams Co. v. City of Los Angeles (1993)

4 Cal.4th 893, 897–898………………………………………………… 23

Utility Cost Management v. Indian Wells Valley Water District (2001)

26 Cal.4th 1185, 1195………………………………………………….. 29

Voters for Responsible Retirement v. Board of Supervisors (1994)

8 Cal.4th 765, 785……………………………………………………… 14

Walsh v. Board of Administration (1992) 4 Cal.App.4th 682, 696-97……… 8, 23

6

Wilmot v. Contra Costa County Employees’ Retirement Assn. (2018)

29 Cal.App.5th 846…………………………………………………….. 11

Constitutional Authority California Constitution, Article XI, § 7………………………….……….... 9, 23

California Constitution, Article XVI, § 6 ………………………………..... 9, 15

Statutes & Rules

California Rules of Court, rule 8.504(b)(3)…………………………………... 21

Code of Civil Procedure § 338 …………………………….…………….. 18, 19

Government Code § 7507 ……………………………………………….. passim

Government Code § 23006 …….……………………..…………………. passim

Government Code § 23026 ….…….……...……………… 13, 14, 16, 17, 20, 32

Government Code § 31515 ….…….……...……………… 13, 14, 16, 17, 20, 32

Government Code § 31515.5 ..…….……...……………… 13, 14, 16, 17, 20, 32

Government Code § 31516 ….…….……...……………… 13, 14, 16, 17, 20, 32

Secondary Sources

California Bill Analysis, Senate Committee, 2007-2008 Regular Session,

Senate Bill 1123, 4/14/2008, at p. 1 (Westlaw 2018 Online)…………. 14

B. Witkin, 9 Summary of California Law, Taxation § 17

(11th Ed. 2017 Westlaw Online)………………………………………. 15

7

I. ISSUES FOR REVIEW

Does the government’s ongoing expenditure of public funds to

implement an illegal public pension increase—actions that are void under the

Constitution’s Supremacy Clause—become lawful by the mere passage of

time, thereby creating a vested right in a pension benefit that was never

lawfully authorized and allowing the government to continue to violate state

law in perpetuity, as the lower court held; or should the public retain the right

to compel government’s compliance with state public expenditure laws by

application of the well-recognized statute of limitations principle of

continuous accrual, as the Supreme Court has previously held in similar

cases? (See Howard Jarvis Taxpayers’ Association v. City of La Habra

(2001) 25 Cal.4th 812 and Aryeh v. Canon Business Solutions (2013) 55

Cal.4th 1185.)

II. WHY REVIEW SHOULD BE GRANTED

This case raises important statewide issues involving pension reform

and the proper application of statutes of limitation in lawsuits to compel local

governmental compliance with state law.

In recent published and unpublished cases the courts have grappled

with the issue of whether pension agencies and public taxpayers have the

right to enjoin payment of unauthorized pension benefits, and to recover past

payments of unauthorized benefits, after the statute of limitations as

measured from the date of the initial unauthorized payment has lapsed but

when the unauthorized payments are continuing. Some courts have held,

properly, that the doctrine of continuous accrual allows such actions. Based

on the Supreme Court’s seminal holdings in Howard Jarvis Taxpayers’

Association v. City of La Habra (2001) 25 Cal.4th 812 [“Howard Jarvis”]

and Aryeh v. Canon Business Solutions (2013) 55 Cal.4th 1185 [“Aryeh”] the

Sixth District has held that continuous accrual allows such actions. (See

8

Blaser v. State Teachers’ Retirement System (2019) 37 Cal.App.5th 349

[“Blaser”]; and Baxter v. California State Teachers' Retirement System

(2017) 18 Cal.App.5th 340, 349, 379,380-281, reh'g denied (Jan. 9, 2018),

review denied (Feb. 21, 2018) [“Baxter”]). However, the lower court

disregarded Blaser and Baxter, and reached the opposite result. This creates

a direct conflict between the First District and Sixth District.

The lower court’s refusal to allow the application of continuous

accrual has the effect of creating a vested right to an illegally granted pension

benefit. This has never been the law, and should not be the law. At least

four other appellate districts (the Second, Third, Fourth, and Sixth) have held

that no vested rights accrue in pension benefits that were adopted in violation

of local or state law. (See, e.g., San Diego City Firefighters, Local 145 v. Bd.

Of Admin. Of San Diego City Emp. Ret. Sys. (2012) 206 Cal.App.4th 594,

606-10 & note 10; Medina v. Board of Retirement (2003) 112 Cal.App.4th

864, 871-72; Walsh v. Board of Administration (1992) 4 Cal.App. 4th 682,

696-97; Crumpler v. Board of Administration Employees’ Retirement System

(1973) 32 Cal.App.3d 567.) Our constitutional Supremacy Clause precludes

local jurisdictions (such as counties and municipalities) from ignoring state

laws. (E.g., Miller v. McKinnon (1942) 20 Cal.2d 83, 87) Prior to the lower

court’s decision, it was accepted law that no vested rights accrue in

unlawfully granted pension benefits. Now the courts are split.

This Court should immediately resolve the confusion among the lower

courts and hold that the doctrine of continuous accrual applies to lawsuits

challenging payment of unauthorized pension benefits. Otherwise the public

will lose an important tool to curb unfunded, unauthorized pension increases.

This case arises out of a local government’s violation of Government

Code section 7507, which was enacted to protect against local agencies’

unsupported adoption of pension increases. The Supreme Court has never

before interpreted Section 7507, nor addressed the respective rights and

9

obligations of public agencies, public employees, and public taxpayers when

local pension-adopting bodies violate this statute and refuse to come into

compliance.

Government Code section 7507 provides that a local legislative body

shall not adopt a pension increase without first taking certain steps, including

the engagement of a qualified actuary to provide a statement of the financial

impact on future pension costs and the disclosure of the cost impact

projections to the public. (Gov. Code section 7507.) Compliance with

Section 7507 is critical because of the problem of unfunded pension

liabilities plaguing all levels of state and local government.

The County of Sonoma failed to comply with Section 7507 and related

laws when it adopted pension increases beginning in 2002-2003. It mislead

the public about the source of funding for the increased costs, stating that

pubic employees would pay for the costs. When these violations came to

light, a taxpayer of the County, Appellant George W. Luke, filed a petition

for a writ of mandate to stop enforcement of the illegally adopted pension

increases and to recover taxpayer funds spent in violation of law. Luke

alleged that each ongoing payment of an unauthorized pension benefit is void

and ultra vires under the Constitutional Supremacy Clause (Ca. Const. Art.

XI, section 7); that each such ongoing payment violates Government Code

section 23006, which prohibits expenditure of funds for any unauthorized

contract or payment; and that the payments also violate the Constitution’s

No-Gift Rule (Cal. Const., Art. XVI, § 6). Because of the continuing

obligation to pay only lawfully adopted pension benefits, Luke argued, each

payment triggered a separate period of limitations under the continuous

accrual doctrine. Rejecting this position, the superior court sustained without

leave to amend the Respondents’ demurrers based on statute of limitations,

and the First District Court of Appeal affirmed in a published opinion.

In two recent opinions, the Supreme Court has previously held that

10

the doctrine of continuous accrual allows an injured party, including a public

taxpayer, to stop ongoing violations, even though the statute of limitations—

as measured from the initial violation—has lapsed. (Howard Jarvis, supra

25 Cal.4th at 812 and Aryeh, supra, 55 Cal.4th at 1185.)

In Howard Jarvis, the city violated a measure that required voter

approval of a tax, rendering it unlawfully adopted. The California Supreme

Court reversed the lower courts which had refused to apply the doctrine of

continuous accrual. (Howard Jarvis, supra, 25 Cal.5th at 809, 825.) The

Supreme Court specifically disagreed with the lower court’s reasoning that

the adoption of the unlawful tax was the only event that could give rise to a

violation of the statute of limitations. (Id. at 819) The Supreme Court held:

“[E]ven if the Ordinance's original enactment was an event giving rise to a

cause of action, it was not the only such event.” (Id. at 818-819; emphasis

original and added). Because the tax ordinance was unauthorized and void,

each time the tax was collected a new violation occurred, and the statute of

limitations accrued anew. In language directly contrary to the holding of the

First District, the Supreme Court stated:

The statute of limitations “is not a trump card that somehow

requires courts to countenance ultra vires or illegal”

practices…. Cities and counties must eventually obey the state

laws governing their taxing authority and cannot continue

indefinitely to collect unauthorized taxes.”

(Id. at 824-25)

The rationale for this holding was emphasized in Aryeh. If continuous

accrual were not applied, “inequities would arise,” since “parties engaged in

long-standing misfeasance would thereby obtain immunity in perpetuity

from suit even for recent and ongoing misfeasance.” (Aryeh, supra, 55

Cal.4th at 1198.)

The First District chose to disregard the Supreme Court’s clear

11

holdings in Howard Jarvis and Aryeh. The lower court twisted Howard

Jarvis to conclude that the County of Sonoma only had a “one-time” legal

obligation not to adopt pension benefits in violation of Section 7507; but had

no “continuing duty” not to pay unlawfully adopted benefits. (Opinion, p. 9.)

Nothing in Howard Jarvis or Aryeh supports this absurd result. The opinion

directly conflicts with the holdings of the Sixth District in Blaser and Baxter,

which allowed the application of continuous accrual to lawsuits to stop

unauthorized pension benefit payments, even though the statute of

limitations as measured from the original unauthorized payment had lapsed.

The opinion transforms illegally granted pension benefits into vested rights.

It conflicts with decades of rulings by four other appellate districts that vested

rights do not accrue in unauthorized or illegally granted benefits. No other

appellate court has interpreted Howard Jarvis and Aryeh so narrowly.

Review is necessary to settle these wide-reaching issues of state law.

Every local agency adopting a pension increase must comply with

Section 7507. In recent years it has come to light that many agencies have

not, which likely contributed to the hundreds of millions of dollars or more

in unfunded pension liabilities vexing all levels of government in California.

Other cases have been raised or are pending that raise this issue. This Court

should give guidance to the public taxpayers and local governments about

their rights and respective obligations when Section 7507 has been violated.

Recently, the Supreme Court has granted review to develop and

clarify the law to determine the scope of vested pension rights.1 Here the

1 Pending cases include Alameda County Deputy Sheriff’s Assn v. County

Employees’ Retirement Assn., review granted March 28, 2018, S247095

(whether reduction of pension benefits impairs vested rights); Wilmot v.

Contra Cost County Employees’ Retirement Assn., review granted February

13, 2019, S252988 (same). Recent cases: Cal Fire Local 2881 v. California

Public Employees’ Retirement System (2019) 6 Cal.5th 965 (certain

retirement benefits were not subject to vesting protections); Flethez v. San

12

Supreme Court should similarly grant review because the court of appeal has

adopted a new vesting rule of even more sweeping effect; rights are to

become vested even when unlawfully obtained solely through the passage of

time. The Supreme Court has also granted review in cases involving statutes

of limitation affecting claims against the government.2 This case is

compelling because it arises at the intersection of both of these areas—

pension vesting and the statute of limitations. It requires balancing of the

competing issues arising out of public employees’ interest in retirement

benefits, the Legislature’s statutory pension reforms, and the taxpayers’

interest in funding only validly granted pension benefits. This case presents

an important opportunity to advance the Supreme Court’s jurisprudence on

significant statutory and constitutional issues affecting these interests.

III. STATEMENT OF THE CASE

The Legislature has enacted multiple statutes to protect the public

from unexpected, unfunded pension costs and unauthorized expenditures of

public funds. The proper interpretation and enforcement of these laws affects

hundreds of millions of dollars and public pensions at all levels throughout

the state.

A. Local Governments Are Statutorily And Constitutionally

Prohibited From Adopting And Implementing Public

Pension Increases That Do Not Meet Specific

Requirements

Under the Supremacy Clause, the State Legislature may impose limits

on spending by local government via statute. One such limit on pension

Bernardino County Employees Retirement Ass’n (2017) 2 Cal.5th 630 (right

to prejudgment interest on retroactive payment of retirement benefits). The

results of these cases do not directly affect the issues in this Petition. 2 Pending Case: Shalabi v. City of Fontana, review granted August 14, 2019,

S256665 (method of calculation of statute of limitation applicable to claim

against government for wrongful death).

13

spending is found in Government Code section 7507, which set requirements

that must be met before public pensions are increased. Another limit on

spending is found in Government Code section 23006, which makes it

unlawful for counties to make payments under a contract or other

commitment that was entered without compliance with state law. The

Constitution’s No-Gift Rule prohibits local government agencies from

spending money without legal authority. Together, these provisions make it

clear that each ongoing pension increase payment made by the County of

Sonoma is unlawful because the County cannot identify any lawful authority

for making it.

1. Government Code Section 7507

Government Code section 7507 prohibits the Legislature and local

legislative bodies from increasing pension benefits without taking certain

mandatory steps to identify the future costs of the increased benefits, and the

effect those costs will have on pension funding. Section 7507 provides that

“before authorizing” any “increases in public retirement plan benefits,”

pension-adopting government bodies “shall secure the services of an enrolled

[or qualified] actuary” to obtain “a statement of the actuarial impact” of the

proposed public pension benefit increases “upon future annual costs” (Gov.

Code section 7507; emphasis added.3) Such governmental bodies must make

the future annual costs public before voting on the proposed pension

increases. (Id.) In addition to Section 7507, the Legislature has adopted a

series of other statutes requiring government bodies to comply with these

obligations prior to adopting any public pension increases. (See Gov. Code

3 The statutory language is quoted from the text as adopted in 1977 and in

effect through 2008. (See Attachment 2.) The text has since been amended

and strengthened several times, and the prohibition against adoption of

pension increases without complying remains in effect. (All versions of

Section 7507 from enactment to the present are included in Appellant’s

Opening Brief [“AOB”], pp. 59-67.)

14

sections 31515, 31515.5, 31516, and 23026; together with Section 7507 the

“Pension Cost Protection Statutes.”)

Government Code section 7507 has been called “the major ‘sunshine’

provision in California pension law.” (California Bill Analysis, Senate

Committee, 2007-2008 Regular Session, Senate Bill 1123, 4/14/2008, at p. 1

(Westlaw 2018 Online)) It was adopted in 1977 to prevent the “end running”

of local governments by employee groups pressuring public agencies into

adopting pension increases “without the taxpayers ever knowing the real

cost.” (Appellant’s Appendix [“AA”] 94) The California Supreme Court

cited Section 7507’s important requirements when concluding that a county’s

ordinance adopting certain retirement benefits was not subject to the

referendum process. (Voters for Responsible Retirement v. Board of

Supervisors (1994) 8 Cal. 4th 765, 785.) However, the Supreme Court has

never been called upon to determine the rights of the public, taxpayers, and

public employees when a county purports to implement a pension benefit

increase in violation of Section 7507.

2. Government Code 23006

The Legislature enacted Government Code section 23006, which

prohibits counties from spending public funds when there is no valid

authorization.

“Any contract, authorization, allowance, payment, or

liability to pay, made or attempted to be made in violation of

law, is void and shall not be the foundation or basis of a claim

against the treasury of any county.”

(Gov. Code § 23006; emphasis added.)

On its face Section 23006 declares that any purported ”contract,

allowance, payment, or liability to pay”—i.e., any possible legal

commitment the County made to its unions for pension increases—“is void”

if made “in violation of” Government Code section 7507 and “shall not be

15

the foundation or basis of a claim” against the treasury of the County. Each

disbursement of County money to pay an unauthorized pension increase

violates Section 23006. Section 23006 is an important statewide protection

against unlawful expenditure of public funds. The California Supreme Court

has not been called upon to construe its effect on unlawfully adopted pension

benefit increases, nor whether the violation of this statute will support the

application of continuous accrual.

3. Constitutional No-Gift Rule

The California Constitution prohibits gifts of public funds. (Cal.

Const., Art. XVI, § 6; “No-Gift Rule”) The No-Gift Rule “prohibits the state

and its subdivisions from … making gifts of public money or property to an

individual or a corporation….” (B. Witkin, 9 Summary of California Law,

Taxation § 17 (11th Ed. 2019 Online Westlaw; emphasis added.) In multiple

different contexts, courts have held that governmental payments made

contrary to statutory authorization are unconstitutional gifts. (See, e.g., Page

v. Mira Costa Community College Dist. (2009) 180 Cal.App.4th 471, 496;

Orange County Foundation v. Irvine Co. (1983) 139 Cal.App.3d 195

(1983).) Payment of pension benefits without statutory authorization has

been held to be an unlawful gift of public funds. (See Lamb v. Board of

County Peace Officers Retirement Commission of Los Angeles County

(1938) 29 Cal.App.2d 248, 250 (grant of retroactive pension benefits was an

unconstitutional gift because nothing obligated payment of the benefits).)

The California Supreme Court has not yet ruled on whether payment of

public pension benefits adopted in violation of the Pension Cost Protection

Statutes and Section 23006 violates the Constitutional No-Gift Rule.

B. Luke Brought This Statutory Taxpayer Lawsuit To

Enforce Sonoma County’s Compliance With The Laws

Governing Adoption And Payment Of Pension Increases

In 2002-2003, Sonoma County (through its Board of Supervisors)

16

purported to adopt a series of substantial increases in pension benefits. (AA

11 at preamble and ¶1; 997 at ¶1)4 Acting under the influence of conflicted

advisors, the Board of Supervisors failed to comply with Section 7507 and

the other Pension Cost Protection Statutes. (AA 35-45) It did not engage a

qualified actuary to perform an actuarial study. (AA 35-36) The Board of

Supervisors did not disclose its failure to obtain the requisite study. Instead

it disseminated false and misleading information to the public (AA 32 at

¶28), including statements that the employees, not the public, would pay for

the cost of increased benefits. (Id.; AA 114-117.)

The County’s pension increases did not require employees to pay for

the costs. (AA 31-33) According to the County, unfunded pension costs

increased by 840% (AA 88), and the ultimate cost to county taxpayers is

likely to exceed hundreds of millions to a billion dollars. (AA 33 at ¶28) The

diversion of public funds to pay these unfunded liabilities has undermined

the County’s ability to provide basic services and left it saddled with an

“unsustainable” financial structure. (AA 14 at ¶¶ 5; 15, 88, 89, 92.)

In 2012 the Sonoma County Grand Jury questioned whether the

County had complied with the Pension Cost Protection Statutes. (AA 1074)

In response, the County continued misrepresenting its actions to the public,

presenting reports by its conflicted county counsel (who had managed the

pension increases (AA 33-34, 1009-10), and a law firm that was hired by the

Board of Supervisors (AA 479), but without any participation by neutral

taxpayers. Their lawyers’ reports claimed that the County had substantially

complied with the Pension Cost Protection Statutes. (AA 453, 481-82) The

County did not admit wrongdoing. (Id.) R¶espondents’ lawyers’ reports

4 The judgment on review is from a dismissal at the demurrer stage. The

facts discussed in this Petition (those alleged in Luke’s pleadings) are

accepted as true. (Aryeh, supra, 55 Cal.4th at 1185, 1191.)

17

provided inaccurate factual information designed to mislead the public into

believing that the County had hired an actuary and conducted the necessary

studies before adopting the pension increases.5 This misled the public and

prevented it from bringing legal action against the County.

Luke eventually looked into the matter and became convinced that the

County had misrepresented the truth regarding its noncompliance with the

Pension Cost Protection Statutes. (AA 1391 at ¶1; 1418 at lines 22-24). In

2017 Luke filed a petition for writ of mandate pursuant to Code of Civil

Procedure 526a and 1085. (AA 10) Luke alleged that the Board of

Supervisors had not engaged an actuary or obtained an actuarial study

required by Section 7507. (AA 12) He alleged that the pension increases

violated Section 7507 and the other Pension Cost Protection Laws; violated

Section 23006; and were ultra vires and void under the California

Constitution. He sought orders enjoining any further implementation of the

pension increases and recovering funds unlawfully spent to fund the

unauthorized pension increases. The Sonoma County Superior Court

sustained Respondents’ demurrers to Luke’s petition and amended petition

for writ of mandate, finding the case barred by the statute of limitations.

C. The First District Court Of Appeal Deviated From This

Court’s Holding In Howard Jarvis Taxpayers’ Assn. v. City

of La Habra, Allowing Sonoma County To Continue

Violating Government Code Sections 7507 And 23006 In

Perpetuity, And Creating Vested Rights In Unauthorized

Pension Benefits

5 These facts are referenced in summary fashion at e.g., AA 1008 at ¶26

(public at all times was deceived); 1012 at ¶33; 1015 at ¶38; (County

obstructed public efforts to ascertain the facts); 1009 at ¶30:23-24; 33:18-19;

1012:22-24; 1023:14-15; AA 25 ¶22 (provided misleading and incomplete

information); 1028:12-14; 1037:8-9; the significance and nature of these

facts are discussed in detail in Appellant’s Reply Brief at pp. 29-34).

18

Ordinarily a three-year statute of limitations applies to taxpayer

lawsuits. (Code of Civil Procedure 338(a).) In both the trial court and court

of appeal, Luke asserted that two different principles rendered his petition

for writ of mandate timely: the doctrine of continuous accrual and estoppel.

(AOB, pp. 4-5, 39, 46.) Luke seeks review primarily on the issue of

continuous accrual, but the estoppel issue was also decided incorrectly and

Luke seeks to preserve this issue in conjunction with review of the

continuous accrual doctrine.6

1. Continuous Accrual

On the issue of continuous accrual, Luke asserted in his petition that

the pension increases were adopted in violation of law; had never been

brought into compliance with Section 7507; and continued to be paid in

violation of the law. The laws violated include the Pension Cost Protection

Laws, Government Code section 23006, and the Constitution’s No-Gift Rule.

6 On the issue of estoppel, Luke alleged that, in the unique facts of this case,

governmental misconduct—including the dissemination of misleading facts

intended to divert the public from bringing a timely challenge to the pension

cost increases—constitutes an estoppel to assert the statute of limitations.

(AOB, pp. 46-54; Reply Br., pp. 28-43). Because the judgment was

sustained at the demurrer stage, Luke was never permitted to develop a

record to support his allegations. Luke pointed out to the court of appeal, in

detail, that the one-sided, incomplete collection of records submitted by

Respondents (over Luke’s objections) in a request for judicial notice

demonstrated estoppel (AOB, pp.46-49; Reply Br. pp. 29-44); and that

Respondents’ disputed interpretation of these records was inconsistent with

the rule against deciding disputed issues of fact based on incomplete

judicially noticed records at the demurrer stage. (E.g., Freemont Indem Co.

v. Freemont General Corp. (2007) 148 Cal.App.4th 97, 113-15

[“Freemont”]) Rather than correcting the lower court’s mistake, the court of

appeal sidestepped the entire issue and ruled, without any reference to or

analysis of any record, that the violations “would have been apparent” from

unspecified public records. (Opinion, p.10.). Because the ruling is not

supported by any references to any record it is purely speculative, in addition

to violating Freemont, supra.

19

The authority relied upon by Luke included Howard Jarvis and Aryeh. In

those cases the Supreme Court held that, under the doctrine of continuous

accrual, the courts retain the power to stop ongoing illegal payments, since

each wrongful act triggers the statute of limitations anew. (See Howard

Jarvis, supra, 25 Cal.4th at 815; Aryeh, supra, 55 Cal.4th at 1197.)

The fact pattern in Howard Jarvis is almost identical to Luke’s case.

As discussed above, taxpayer plaintiffs, like Luke, challenged the legality of

a local government’s action—in that case a city’s adoption of a tax without

obtaining voter approval. The Supreme Court first observed that under

Section 338(a), a cause of action accrues upon the occurrence of the last

element essential to the cause of action. (Howard Jarvis, supra, 25 Cal.4th at

815) According the Supreme Court’s analysis, while one cause of action

accrued when the city wrongfully approved a tax increase without having

obtained voter consent, subsequent causes of action accrued each time the

city collected unlawful taxes. (Id. at 820.) The city could have obtained the

necessary voter approval before collecting the taxes but did not. (Id. at 819.)

So when the taxpayers filed a lawsuit to stop future collection, that action

was timely. (Id. at 820-25.)

In reaching this conclusion, the Supreme Court relied heavily on its

prior holdings interpreting and enforcing continuous accrual in the context

of public pension administration. (Id. at p. 821, citing, inter alia, Abbott v.

City of Los Angeles (1958) 50 Cal.2d 438.) In Aryeh, the Supreme Court also

cited a pension administration case in support of its admonition that the

doctrine of continuous accrual is intended to prevent parties in “long-

standing misfeasance” from “obtain[ing] immunity in perpetuity from suit

even for recent and ongoing misfeasance.” (Aryeh, supra, 55 Cal.4th at 1198-

1199, citing Dryden v. Board of Pension Commrs. (1936) 6 Cal.2d 575.)

Pursuant to the Supreme Court’s holding in Howard Jarvis, the court

of appeal should have reversed the superior court. It did not. According to

20

the court of appeal’s analysis, the County had no “ongoing” obligation not to

pay unauthorized benefits, because Section 7507 only prohibited adoption of

an unlawful pension increase. (Opinion p. 9.) Since there was no specific

statutory language in Section 7507 prohibiting payment of unauthorized

pension increases, the court of appeal construed Section 7507 as only

imposing a “one-time” obligation that could not be violated by subsequent

payments of unauthorized benefits. (Opinion, pp. 6-9.) Among the many

glaring problems with this superficial analysis is the court of appeal’s failure

to recognize that Section 23006 and the Constitutional No-Gift Rule also

impose a separate obligation not to pay unauthorized pension increases,

beyond the language of Section 7507. In Aryeh the Supreme Court stated

that the court must not look to the label of the claim but to the “nature of the

obligation breached.” (Aryeh, supra, p.1200.) In Aryeh, the Supreme Court

held that “the nature of the duty owed [in that case, not to impose unfair

monthly charges] … was a continuing one, susceptible to monthly breaches.”

(Id.) In just the same way, the County’s continuing obligation was to not pay

ongoing unlawful, unauthorized benefits.

By construing Section 7507 as only prohibiting the adoption of

unlawful benefits, but not the subsequent payment of such unauthorized

benefits, the court of appeal ripped the guts out of Howard Jarvis’ holding.

Under the court of appeal’s ruling, the County has no obligation to bring its

unlawfully adopted pension increases into compliance with Section 7507,

Section 23006, and the No-Gift Rule. The lower court thus would allow the

County to continue collecting from public taxpayers the hundreds of millions

of dollars necessary to pay for unfunded pension increases adopted in direct

violation of the Pension Cost Protection Statutes. This contravenes the

Supreme Court’s admonition that a government handling taxpayers’ money

should not be permitted to violate the law “with immunity in perpetuity.”

21

(See Aryeh, supra, 55 Cal.4th at 1198.)7

2. Publication And Other Pending Cases

The tentative decision released by the Court of Appeal prior to oral

argument was not marked for publication. At oral argument, Respondents

asked the Court of Appeal to publish the decision because of the other cases

that have been raised, or are pending, in which taxpayers asserted continuous

accrual in challenges to pension increases.8 Luke is aware of at least two

such cases.9 The Court of Appeal granted Respondents’ request to publish

as to Part I of the Opinion, which limits the application of continuous accrual.

(Opinion, p. 1 at n.*)

IV. REVIEW IS NECESSARY TO RESOLVE IMPORTANT

STATEWIDE ISSUES AFFECTING PENSION BENEFITS

AND UNLAWFUL EXPENDITURE OF PUBLIC FUNDS

The California Supreme Court should hear this case to resolve the

issue of whether void, unconstitutional actions by a local government

become enforceable by the mere passage of time; to resolve conflicts among

the courts of appeal about whether public employees can acquire vested

rights in unlawfully granted pension increases; to prevent the lower courts

from misinterpreting and eviscerating this Court’s seminal opinions on the

doctrine of continuous accrual in Howard Jarvis and Aryeh; and to give

guidance to the lower courts in resolving pending cases arising out of the

unfunded pension liability crisis facing the state.

7 Since the court of appeal considered the facts and issues raised in the

parties’ briefs, there were no grounds for rehearing and none was sought.

(Cal. Rules of Court, rule 8.504(b)(3).) 8 See excerpts of Oral Argument transcript on this point, at Attachment 2;

Transcript pp. 18:8-28 & 28:4-15. 9Brown v. City of San Rafael, et al., First Dist. Ct. of App. No. A156261,

(app. pending; Super. Ct. Marin County Case No. CV1702258); Brown v.

Southern Marin Fire Department, Super. Ct. Marin County Case No.

CV1603276 (AA498).

22

A. The Supreme Court Should Resolve The Conflicts Between

The First Appellate District And Four Other Appellate

Districts About Whether Vested Rights In Unauthorized

Pension Benefits Can Accrue By The Mere Passage of Time

Historically, the courts of appeal have consistently held that public

employees do not have vested rights in pension benefits that are granted

unlawfully or without due authorization. In other words, the public or the

pension agency may stop the unlawful payments over the objections of the

pension recipient. The no-vesting rule has been applied by the Second,

Third, Fourth, and Sixth Appellate Districts in a wide variety of contexts.

San Diego City Firefighters, Local 145 v. Bd. Of Admin. Of

San Diego City Emp. Ret. Sys. (2012) 206 Cal.App.4th 594,

606-10 & note 10. The Fourth District held that city pension

benefits adopted by resolution, not an ordinance as required by

the city charter, were void and unenforceable. The

constitutional contract clause does not vest pension rights

based on contracts that are illegal, invalid, or unenforceable.

Blaser, supra, 37 Cal.App.5th at 373; see also Baxter, supra,

18 Cal.App.5th at 349, 379, 380-82. The Sixth District held

there is no vested right to unauthorized pension payments.

Continuous accrual allowed a lawsuit to stop such benefits.

Medina v. Board of Retirement (2003) 112 Cal.App.4th 864,

871-72 [“Medina”]. The Second District held that a pension

beneficiary acquired no vested rights under an unauthorized

classification despite 17 years of pension contributions. “[T]he

contract clause does not protect expectation that are based upon

contracts that are invalid, illegal or unenforceable.” (Id. at 871-

72.)

23

Walsh v. Board of Administration (1992) 4 Cal.App. 4th 682,

696-97. The Third District held that a beneficiary has no

vested right to pension benefits based upon an invalid or illegal

contract.

Crumpler v. Board of Administration Employees’ Retirement

System (1973) 32 Cal.App.3d 567, 586 [“Crumpler”]. The

Fourth District held that no vested rights accrued in pension

benefits under an erroneous classification despite 20 years of

contributions paid by the employee.

These results are consistent with, and required by, the Supremacy

Clause of the California Constitution. (Ca. Const. Art. XI, section 7.) Local

legislative action which “conflicts with state law … is preempted by such

law and is void.” San Diego Gas & Electric Co. v. City of Carlsbad (1998)

64 Cal.App.4th 785, 792–793 (emphasis added); Sherwin–Williams Co. v.

City of Los Angeles (1993) 4 Cal.4th 893, 897–898. Accordingly, the

Supreme Court and courts of appeal for more than a century have held that

when counties purport to enter contracts that lack constitutional authority or

statutory authority, such contracts are ultra vires and void. (Riverside

Portland Cement Co. v. City of Los Angeles (1918) 178 Cal. 609, 609–610

(requiring injunction against enforcement of a void contract that had been

issued under unconstitutional statute); Modoc County v. Spencer & Raker

(1894) 103 Cal. 498 (action of county board of supervisors purporting to

enter into a contract without statutory authority was “void,” and “created no

legal claim against the county”); City of Pasadena v. Estrin (1931) 212 Cal.

231, 235-36 (purported city contract void when not authorized by city’s

charter; not saved by estoppel or ratification).

Taxpayers have standing to sue in such cases. In Miller v. McKinnon

(1942) 20 Cal.2d 83, a county taxpayer sued to recover money illegally

expended by the county under a void contract. A “contract made without

24

compliance with the statute is void.” (Miller v. McKinnon (1942) 20 Cal.2d

83, 87.) “[C]ontracts wholly beyond the powers of a municipality are void.

They cannot be ratified; no estoppel to deny their validity can be invoked

against the municipality; and ordinarily no recovery in quasi contract can be

had for work performed under them.” (Miller, supra 20 Cal.2d at 99, citing

Los Angeles Dredging Co. v. Long Beach (1930) 210 Cal. 348, 353.)

By refusing to allow the public to enjoin the ongoing enforcement of

the unlawfully adopted pension increase, the First District Court of Appeal

took a void governmental act—the County’s adoption of a pension increase

in direct contravention of Section 7507—and converted it into a valid act.

The First District’s opinion is contrary to the principles enforced in the

Second, Third, Fourth, and Sixth Districts. The First District distinguished

these cases by stating that “they do not involve statute of limitations defenses

and are therefore inapposite.” (Opinion p. 8.) But the First District cited no

cases stating that the result would be different if a statute of limitations

defense had been asserted. For instance Medina involved the reversal of a

pension classification benefit after 17 years; Crumpler, after 20 years; and

Blaser and Baxter both involved statutes of limitation defenses asserted

against actions to recover “years-long” overpayments. (Medina, supra, 113

Cal.App.4th at 866-68; Crumpler, supra, 32 Cal.App3d at 571-72; Blaser,

supra, 37 Cal.App.5th at 353-354.) In Baxter, 7 years elapsed between

accrual of the claims and filing the action. (Baxter, supra, 18 Cal.App.5th at

364, 368, 378-82.)

The inconsistencies between the ruling of the First District and the

Second, Third, Fourth and Sixth Districts are obvious, fundamental and far-

reaching. Under the accepted rule as applied by all other appellate districts,

if the County (as it should have) had at any time stopped paying the illegally

adopted pension benefits, the public employees could not have complained,

because they have no vested rights in unlawfully adopted benefits. Now,

25

however, based on the lower court’s ruling, the public taxpayer cannot do

what the pension agency could do; the lower court denied the taxpayer the

same rights accorded to the pension agencies to stop paying unlawful,

unvested benefits.

In sum, the First District Court of Appeal created a zombie pension

benefit. If the pension increases issued in violation of Section 7507 had been

challenged in court within three years, the courts would have recognized

them as dead, void, and unenforceable. Once three years have passed,

according the holding of the First District, the enactments are now alive and

viable—and cannot be killed off by the courts even though they were void

originally under the Supremacy Clause.

The ruling of the First District creates a conflict with every other court

that has considered the issue of whether vested rights benefits can accrue in

unauthorized benefits. The settled rule established in the Second, Third,

Fourth, and Sixth Districts has been upended. The confusion caused by this

split should be resolved by the Supreme Court immediately.

Does a constitutionally void pension benefit (or any void

governmental action, for that matter) become valid and enforceable merely

by the passage of time? Does the Constitutional Supremacy Clause allow

local governments to flout state statutes in perpetuity when, for whatever

reason, no challenge is or can be mounted within the first three years of the

void action? Must a local government spending taxpayer funds “eventually”

come into compliance with the governing law, as suggested in Howard

Jarvis? (Howard Jarvis, supra, 25 Cal.4th at 825); or does that rule only apply

when the government is raising taxes, not spending them, as the First District

suggests?

Because these issues affect hundreds of millions of dollars in

unfunded pension benefits in Sonoma County alone, the Supreme Court

should clarify the law in this area. Moreover, other cases are pending that

26

raise these issues. (See supra note 9.) To support their request for publication,

Respondents argued below that the resolution of Luke’s claims should have

precedential application to other cases. This is a matter of paramount

constitutional importance requiring the guidance of the Supreme Court

without delay.

B. The Supreme Court Should Resolve The Confusion Among

The Courts of Appeal About The Scope Of The Continuous

Accrual Doctrine Applicable In Taxpayer Lawsuits To

Stop Ongoing Government Misfeasance, As Articulated By

The Supreme Court In Howard Jarvis and Aryeh

The First District’s narrow interpretation of Howard Jarvis would

eviscerate the doctrine of continuous accrual in taxpayer challenges to

government actions, even though “suits against public entities” are a primary

context in which the doctrine was developed. (See Aryeh, supra, 55 Cal.5th

at 1200.) Its ruling is bad law and bad policy.

The First District cited this Court’s broad rationale for applying the

doctrine of continuous accrual. (See Opinion at 3-4, quoting Aryeh, supra,

55 Cal.4th at 1192, and p. 7 quoting Howard Jarvis, supra 25 Cal.4th at 825.)

But then it ignored that rationale by adopting a narrow interpretation of this

Court’s decisions. (Opinion, pp. 6-9).

The court of appeal expressed the crux of the issue as follows: “[I]f

an authority is void for failing to comply with a state law, [is] a new

limitations period … triggered each and every time money is collected and

disbursed pursuant to that authority[?]” (Opinion, p. 7.) Answering this

question in the negative, the court of appeal missed the obvious: the

Legislature has enacted a separate statute prohibiting ongoing payments

under a void enactment: Government Code section 23006. Even if Section

23006 did not apply, the Constitution’s No-Gift Rule applies. Finally, even

if these independent laws did not apply (and they do), the ongoing nature of

27

the government’s duty should be inherent in the nature of the original

authorization itself. By prohibiting the enactment of something, the

Legislature implicitly prohibits its ongoing implementation.

In Howard Jarvis, the city violated a measure that required voter

approval of a tax, rendering it unlawfully adopted. Plaintiff’s action to

challenge the approval was untimely. But plaintiff argued that subsequent

collection of the unlawful tax was a second wrong, and its challenge to this

ongoing misfeasance was timely under the doctrine of continuous accrual.

The California Supreme Court agreed because the statute of limitations

should not be “a trump card that somehow requires courts to countenance

ultra vires or illegal” practices. (Howard Jarvis,25 Cal.4th at 824.) “Cities

and counties must eventually obey the state laws governing their taxing

authority and cannot continue indefinitely to collect unauthorized taxes.”

(Id. at 825.)

The court of appeal acknowledged this “broader language” applying

“continuous accrual,” but looked for a way around it. According to the court

of appeal, this part of Howard Jarvis’ holding “is limited to challenges to tax

measures,” and, in particular, only such tax statutes as specifically authorize

a “refund action” to recover taxes collected unlawfully. (Opinion, p. 7.) The

court of appeal noted that the tax measure construed in Howard Jarvis

included a separate mechanism for tax refunds, which it interpreted as “a

separate and ongoing obligation not to collect a tax enacted without voter

approval.” (Opinion, p. 6.) But Howard Jarvis never said that such a statute

was a prerequisite to the application of continuous accrual in challenges to

unlawful government action. Indeed, the Supreme Court has never found

such a statute to be required for continuous accrual in any of its prior pension

administration cases spanning decades—cases on which the Supreme Court

relied in Howard Jarvis and Aryeh. (See Abbott v. City of Los Angeles (1958)

50 Cal.2d 438, 462-63; Dryden v. Board of Pension Commrs. (1936) 6 Cal.2d

28

575.) The only authority cited by the court of appeal to require such a statute

as a prerequisite to application of continuous accrual was In Re Ricardo P.

(2019) 7 Cal.5th 1113. (Opinion, p. 6.) That was an unrelated criminal case

involving searches of electronic devices, and not the ability of the taxpayer

to compel local governments to comply with the law. In Re Ricardo P. has

no application in this proceeding.

This is a total misreading of the purpose and intent of Howard Jarvis.

Blaser cited at least thirteen different statutory contexts in which continuous

accrual has been applied but made no mention of any prerequisite for a

special statutory collection mechanism. (See Blaser, supra, 37 Cal.App.5th at

365-366.) The Northern District of California had no problem concluding

that Howard Jarvis authorizes continuous accrual in state constitutional

claims challenging municipal “street damage restoration” fees. (Pacific Gas

& Elec. Co. v. City of Union City (N.D. Cal. 2002), 220 F. Supp.2d 1070,

1079, 1080.) The Pacific Gas court stated that the “reasoning [of Howard

Jarvis] applies here.” (Id. at 1080.)

“As [the Supreme Court] notes [in Howard Jarvis] ‘Cities and

counties must eventually obey the state laws governing their

taxing authority and cannot continue indefinitely to collect

unauthorized taxes.’”

(Id.) The Pacific Gas court did not find that the nature of the tax collection

statutes interpreted in Howard Jarvis was a distinguishing factor that must

be present. (Id.)

The lower court’s opinion raises important issues of constitutional and

statutory construction that have not been addressed by the Supreme Court.

When considering the proper application of continuous accrual, should the

illegal nature of each subsequent collection and payment of public funds to

implement a void governmental act be inferred or must it be expressed as the

First District concluded? Can the ongoing illegal nature of the act be found

29

in other statutes that specifically apply (such as Section 23006); or the

Constitution itself (No-Gift Rule; Supremacy Clause)? Is it proper to assume

that the Legislature would not want the traditional doctrine of continuous

accrual applied to stop ongoing payments under a void statute, when the

Legislature could have capped the period of review of a pension enactment

by adoption of a specific statute of limitation like it has done in other settings,

as the Supreme Court has recognized? (See, e.g., Utility Cost Management v.

Indian Wells Valley Water District (2001) 26 Cal.4th 1185, 1195). Did the

Supreme Court mean what it said in Howard Jarvis and Aryeh about avoiding

inequities that follow when a government is permitted to violate the law with

impunity? Or, to the contrary, should Howard Jarvis and Aryeh be construed

to require the Legislature to adopt specific statutes to recover the unlawfully

collected funds, before the ongoing illegal nature of the public funding of

void enactments can be recognized, as the First District held?

The Supreme Court’s immediate resolution of these conflicts is

necessary. The First District’s creation of a vested right in void pension

increases, and its holding that public taxpayers must be forced to pay

hundreds of millions of dollars to fund unlawfully vested benefits, are prime

examples of the “inequities” that have arisen due to the First District’s

holding. (Aryeh, supra, 55 Cal.4th at 1200.) Review by the Supreme Court is

necessary to explain whether the County should be permitted to ignore the

Pension Cost Protection Statues with impunity and “in perpetuity” for as long

as the illegally granted pension benefits are funded and paid.

C. The Supreme Court Should Resolve The Conflict Among

The Courts Of Appeal As To Whether Continuous Accrual

Applies In Suits To Stop Unauthorized Pension Payments

(As The Sixth District Held In Blaser and Baxter) Or Does

Not So Apply (As The First District Held)

30

The published holding of the First District is fundamentally at odds

with the holding of the Sixth District in Blaser and Baxter. The First District

held that continuous accrual is not available to a taxpayer seeking to

challenge a void pension benefit, while Blaser and Baxter both emphatically

authorized the application of continuous accrual to stop payment of

unauthorized benefits. (Blaser, supra, 37 Cal.App.5th at 365-375; Baxter,

supra, 18 Cal.App.5th at 378-82.) Resolution of these inconsistent holdings

is an important matter requiring clarification by the Supreme Court.

The California Supreme Court has a long history applying the doctrine

of continuous accrual in pension cases. (See, e.g., Abbott v. City of Los

Angeles (1958) 50 Cal.2d 438, 462-63; Dillon v. Board of Pension

Commissioners (1941) 18 Cal.2d 427, 430; Dryden v. Board of Pension

Commrs. (1936) 6 Cal.2d 575.) The Sixth District cited and relied upon these

cases, together with Howard Jarvis and Aryeh among others, to require the

superior court to apply continuous accrual in lawsuits brought by a pension

agency to stop ongoing payment of unauthorized benefits. (Blaser, supra, 37

Cal.App.5th at 365-75; Baxter, supra, 18 Cal.App.5th at 378-82.) Even

though the unauthorized benefits (overpayments miscalculated by the

pension agency without any authority) had commenced outside the statutory

limitations period, under the principle of continuous accrual each subsequent

payment of an unauthorized benefit was a violation and the ongoing

overpayments (and those within the three year period before lawsuits were

filed) could be stopped and recovered. (See Blaser, supra, 37 Cal.App.5th at

364-76; Baxter, supra, 18 Cal.App.5th at 378-82.) The holdings of Blaser and

Baxter would have allowed Luke’s case to proceed, had his case arisen in the

Sixth District. We thus have a situation in which the taxpayers located in the

Sixth District can use continuous accrual to stop unauthorized payment of

pension benefits, but taxpayers located in the First District cannot. This

conflict should be resolved immediately.

31

Trying to distinguish the Supreme Court’s prior pension

administration cases, the First District appeared to suggest that the employee

has the right to invoke continuous accrual to compel valid payments, but the

public (e.g., the pension agency or the taxpayer) has no corresponding right

to stop invalid payments.10 The court of appeal stated: “That a pensioner has

a continuing right to a pension does not mean that Section 7507 imposes a

continuing obligation on the county.” (Opinion, p. 7.) This suggestion is

contrary to the published holdings in Blaser and Baxter, in which the Sixth

District explicitly rejected claims that only pension holders can assert

continuous accrual in pension benefit cases. (See Blaser, supra, 37

Cal.App.5th at 373; Baxter, supra, 18 Cal.App.5th at 380.) The Supreme Court

should end the confusion and use this case to confirm that the analysis of

Blaser and Baxter is correct. The taxpayer should not be more restricted in

applying continuous accrual to stop unauthorized payments than the public

employee is when compelling authorized payments. The neutral application

of continuous accrual should not depend on which party—the pubic taxpayer

or the public employee—is attempting to enforce the law.

The First District also attempted to distinguish Blaser and Baxter on

the grounds that the “continuing obligation” of the pension agency in those

cases was “to pay correctly calculated benefits—an obligation that occurred

with every pension payment made.” (Opinion, p. 8.) In so doing, the First

District made a distinction between “miscalculated” benefits in Blaser and

Baxter and “void” benefits in Luke’s case. Respectfully, that attempted

distinction only emphasizes that the First District reached a holding

incompatible with Blaser and Baxter. The reason the “miscalculation” (i.e.,

the overpayment) was a violation of law in Blaser and Baxter is that the

10 Respondents advocated for that position in their briefs to the court of

appeal. (See County Br., p. 35; Luke Reply Br., p.21.)

32

overpayment was not authorized by the pension plan. The First District

could just as easily have stated the “continuing obligation” of the pension

agency was “to pay authorized benefits—an obligation that occurred with

every pension payment made.” (Opinion, p. 8.) In just the same way,

Sonoma County has an ongoing obligation to pay only “authorized” pension

benefits. A pension increase that was not adopted in accordance with Section

7507 is void and unauthorized. If Howard Jarvis and Aryeh are to have any

meaning in the context of taxpayer lawsuits, the government should be

presumed to be under a “continuing obligation” to obey the law. To hold

otherwise would allow local government to violate the Supremacy Clause.

The Supreme Court should determine whether the lower court’s analysis is

correct, or if Blaser and Baxter and the weight of the other authorities

construing Howard Jarvis and Aryeh should govern.

V. CONCLUSION

This case raises important statewide issues involving the rights of

taxpayers to challenge pension increases adopted in violation of Government

Code sections 7507, 23006, and the Constitutional No-Gift Rule; whether

pension enactments that are void under the Constitutional Supremacy Clause

ripen into vested rights by the mere passage of time; and whether the holdings

of Howard Jarvis and Aryeh authorize application of continuous accrual in

taxpayer actions to enforce compliance with the Pension Cost Protection

Statutes. The published opinion of the First District contradicts those of the

Sixth District in Blaser and Baxter; contradicts decades of cases holding that

public employees do not acquire vested rights in unlawfully issued pension

benefits; and contradicts the approach taken in other cases that have

33

construed Howard Jarvis and Aryeh. The Supreme Court’s review of this

case is necessary to clarify and explain the law on all of these critical issues.

Dated: January 17, 2020 ROBINSON & ROBINSON, LLP

By: . /s/ Jeffrey A. Robinson .

Jeffrey A. Robinson

Attorneys for Petitioner and Appellant

George W. Luke

34

CERTIFICATE OF COMPLIANCE

Pursuant to Rule of Court 8.204(c), I certify that this Appellant’s

Reply Brief contains 8,055 words. In making this certification, I have

relied on the word count of the computer used to prepare the brief.

Dated: January 17, 2020 ROBINSON & ROBINSON, LLP

By: . /s/ Jeffrey A. Robinson .

Jeffrey A. Robinson

Attorneys for Petitioner and Appellant George W. Luke

Opinion of Court of Appeal, Luke v. Sonoma County, et al.

35

Filed 12/12/19CERTIFIED FOR PARTIAL PUBLICATION*

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

GEORGE W. LUKE,Plaintiff and Appellant,

v.SONOMA COUNTY, et al.,

Defendants and Respondents.

A155286

(Sonoma County Super. Ct. No. SCV261187)

Plaintiff George W. Luke, a Sonoma County resident and taxpayer, appeals from

the trial court’s orders sustaining the demurrers of Sonoma County (the County) and

certain County officials, the Sonoma County Employees’ Retirement Association, and the

Sonoma County Law Enforcement Association (collectively, Respondents). Plaintiff

argues the trial court erred in finding his claims challenging the payment of increased

public employee pension benefits barred by the statute of limitations. We affirm.

BACKGROUND1

In 2002 or 2003, the County authorized increased pension benefits for County

employees, pursuant to a settlement of employee lawsuits alleging past miscalculation of

retirement benefits. In doing so, the County failed to comply with state laws requiring

local legislative bodies to obtain an actuarial statement of the future annual costs of

proposed pension increases, and to make the future annual costs public at a public * Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of part II.1 “On appeal from the sustaining of a demurrer, we accept as true the well-pleaded facts in the operative complaint . . . .” (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1189, fn. 1 (Aryeh).)

136

meeting, before authorizing the pension increases. (See Gov. Code, §§ 7507, 23026,

31515.5, 31516.)2 In 2017, Plaintiff filed the underlying petition for writ of mandate,

alleging these violations and seeking a writ enjoining payment of the increased pension

benefits.

The trial court sustained Respondents’ demurrers to Plaintiff’s original and first

amended petitions, finding the claim barred by the statute of limitations. In sustaining the

demurrers to the first amended petition, the trial court denied leave to amend. Judgment

issued in favor of Respondents.

DISCUSSION3

“This appeal follows the sustaining of a demurrer. The application of the statute

of limitations on undisputed facts is a purely legal question [citation]; accordingly, we

review the lower courts’ rulings de novo. We must take the allegations of the operative

complaint as true and consider whether the facts alleged establish [Plaintiff’s] claim is

barred as a matter of law.” (Aryeh, supra, 55 Cal.4th at p. 1191.)

“An affirmative defense, the statute of limitations exists to promote the diligent

assertion of claims, ensure defendants the opportunity to collect evidence while still

fresh, and provide repose and protection from dilatory suits once excess time has passed.

[Citations.] The duration of the limitations period marks the legislatively selected point

at which, for a given claim, these considerations surmount the otherwise compelling

interest in adjudicating on their merits valid claims. [Citations.] [¶] The limitations

period, the period in which a plaintiff must bring suit or be barred, runs from the moment

a claim accrues. [Citations.] Traditionally at common law, a ‘cause of action accrues

“when [it] is complete with all of its elements”—those elements being wrongdoing, harm,

and causation.’ [Citation.] This is the ‘last element’ accrual rule: ordinarily, the statute

2 All undesignated section references are to the Government Code.3 The Sonoma County Employees’ Retirement Association and the Sonoma County Law Enforcement Association join in the arguments submitted on behalf of the County and its officials.

237

of limitations runs from ‘the occurrence of the last element essential to the cause of

action.’ ” (Aryeh, supra, 55 Cal.4th at p. 1191.)

“To align the actual application of the limitations defense more closely with the

policy goals animating it, the courts and the Legislature have over time developed a

handful of equitable exceptions to and modifications of the usual rules governing

limitations periods. These doctrines may alter the rules governing either the initial

accrual of a claim, the subsequent running of the limitations period, or both.” (Aryeh,

supra, 55 Cal.4th at p. 1192.) “[The defendant] bears the initial burden of proving [the

plaintiff’s] claims are barred by [the applicable] limitations period. [Citation.]

Thereafter, the burden shifts to [the plaintiff] to demonstrate his claims survive based on

one or more nonstatutory exceptions to the basic limitations period. [Citation.] That

burden may be imposed even at the pleading stage.” (Id. at p. 1197.)

All parties agree the applicable statute of limitations is set forth in Code of Civil

Procedure section 338, subdivision (a), which provides a three-year limitations period for

“[a]n action upon a liability created by statute, other than a penalty or forfeiture.”

Because Plaintiff’s lawsuit was filed well over three years after the County approved the

challenged pension increases, Respondents have met their burden to prove Plaintiff’s

claims are barred by this limitations period. The parties dispute whether Plaintiff has met

his burden to demonstrate that his claim survives based on an exception to the limitations

period.

I. Continuous Accrual

“[U]nder the theory of continuous accrual, a series of wrongs or injuries may be

viewed as each triggering its own limitations period, such that a suit for relief may be

partially time-barred as to older events but timely as to those within the applicable

limitations period.” (Aryeh, supra, 55 Cal.4th at p. 1192.) “The theory is a response to

the inequities that would arise if the expiration of the limitations period following a first

breach of duty or instance of misconduct were treated as sufficient to bar suit for any

subsequent breach or misconduct; parties engaged in long-standing misfeasance would

thereby obtain immunity in perpetuity from suit even for recent and ongoing misfeasance.

338

In addition, where misfeasance is ongoing, a defendant’s claim to repose, the principal

justification underlying the limitations defense, is vitiated.” (Id. at p. 1198.) “Generally

speaking, continuous accrual applies whenever there is a continuing or recurring

obligation: ‘When an obligation or liability arises on a recurring basis, a cause of action

accrues each time a wrongful act occurs, triggering a new limitations period.’ ” (Id. at

p. 1199.) “[T]he theory of continuous accrual supports recovery only for damages arising

from those breaches falling within the limitations period.” (Ibid.)

The obligation allegedly violated is the one imposed by former section 7507, as

effective in 2002 and 2003: “The Legislature and local legislative bodies shall secure the

services of an enrolled actuary to provide a statement of the actuarial impact upon future

annual costs before authorizing increases in public retirement plan benefits. An ‘enrolled

actuary’ means an actuary enrolled under subtitle C of Title III of the federal Employee

Retirement Income Security Act of 1974 and ‘future annual costs’ shall include, but not

be limited to, annual dollar increases or the total dollar increases involved when

available. [¶] The future annual costs as determined by the actuary shall be made public

at a public meeting at least two weeks prior to the adoption of any increases in public

retirement plan benefits.” (Former § 7507, added by Stats. 1977, ch. 941, § 1; amended

by Stats. 1980, ch. 481, § 3, fn. omitted.)4 As Respondents argue, the statute on its face

does not impose a continuing or recurring obligation. Instead, the obligation is imposed

before pension increases are authorized.

Plaintiff argues the County’s failure to comply with former section 7507 renders

the authorized pension increases void and therefore each pension payment made pursuant

to this void authority is a new wrong triggering its own limitations period. Plaintiff relies

on Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809 (Howard

Jarvis), which involved “an action against a city for allegedly imposing and collecting a

general tax on its residents without the voter approval mandated by Proposition 62 (Gov.

Code, §§ 53720–53730) . . . .” (Howard Jarvis, at p. 812.) “Government Code section 4 The other statutes cited in Plaintiff’s petition effectively restate these requirements (§§ 23026, 31515.5, 31516) or set forth a statement of legislative intent (§ 31515).

439

53723 provides: ‘No local government . . . may impose any general tax unless and until

such general tax is submitted to the electorate of the local government . . . and approved

by a majority vote of the voters voting in an election on the issue.’ ” (Howard Jarvis, at

p. 814.) As here, it was “undisputed . . . that this action is one ‘upon a liability created by

statute,’ to which a three-year limitation period applies. (Code Civ. Proc., § 338, subd.

(a).)” (Id. at p. 815.) The city argued the cause of action accrued when the tax ordinance

was enacted without the requisite electorate vote and, because that enactment took place

more than three years before the plaintiffs’ action, the claim was time-barred. (Id. at

p. 819.) In response, the plaintiffs argued “they are seeking redress for two types of

injury: the violation of their right to vote on new taxes, and the City’s continued

collection of the tax without valid legal authority.” (Ibid.) As to the latter, the plaintiffs

alleged: “ ‘By continuing to impose the general tax at issue in this case,’ . . . ‘defendant

City is failing to perform the legal duties required of it by Proposition 62.’ ” (Ibid.)

The Supreme Court agreed with the plaintiffs and held each collection of the tax

triggered a new limitations period, pursuant to the continuous accrual theory. (Howard

Jarvis, supra, 25 Cal.4th at p. 812.) In its analysis, the court relied on the statutory

language enacted by Proposition 62 to conclude that the statute imposed an ongoing

obligation. “Proposition 62 prohibited the imposition of a general tax ‘unless and until

such general tax is submitted to the electorate.’ (Gov. Code, § 53723.) That command is

allegedly violated each time the City collects its utility tax through the service providers.”

(Howard Jarvis, at p. 823.) The court expressly rejected the city’s contention that

Proposition 62’s prohibition of the “imposition” of a tax without voter approval is limited

to the time of enactment: “Government Code section 53727, subdivision (b), which

governs taxes imposed prior to the measure’s passage, provides that no such tax ‘shall

continue to be imposed’ without a vote within two years of the measure’s effective date,

and that a taxing jurisdiction that fails to obtain a majority vote ‘shall cease to impose

such tax on and after November 15, 1988.’ Clearly, in this provision, ‘imposition’ is not

limited to the time of initial enactment, and nothing in Proposition 62 suggests that it was

used in a more restricted sense in Government Code section 53723, the prohibitory

540

provision at issue here. Government Code section 53728, moreover, provides a remedy

against a city’s continued collection of a tax that has not been approved by the voters,

requiring the responsible county official to withhold property tax transfers in a dollar

amount equal to the illegal collections. Clearly the intent of Proposition 62’s enactors

was not merely to preclude enactment of a tax ordinance without voter approval, but to

preclude continued imposition or collection of such a tax as well.” (Howard Jarvis, at

pp. 823–824.)

Howard Jarvis also noted that a tax refund action would have been timely as to the

collection of any tax within the relevant limitations period for such an action. (Howard

Jarvis, supra, 25 Cal.4th at p. 820 & fn. 3.) In a tax refund action, the plaintiff “is not

limited to seeking a refund, but may challenge the validity of the taxing agency’s policy

or continuing conduct by a claim for declaratory relief.” (Id. at p. 822.) The court

reasoned, “Plaintiffs’ causes of action for a declaration of the currently collected tax’s

invalidity and for a writ of mandate to prevent future collection of the tax are no more

barred by the statute of limitations than would be an action for refund of taxes paid.” (Id.

at p. 821.)

We find Howard Jarvis distinguishable. In Howard Jarvis, the allegedly violated

statute imposed an obligation at the time of a tax ordinance’s enactment, but it also

imposed a separate and ongoing obligation not to collect a tax enacted without voter

approval. The court discerned the legislative intent to impose this ongoing obligation

from the statutory language—in particular, the language in section 53727 providing that

no tax imposed prior to Proposition 62’s enactment “ ‘shall continue to be imposed’ ”

without voter approval—construing section 53723’s prohibition on the “impos[ition]” of

a tax without voter approval to mean both the tax’s initial enactment and its subsequent

collection. (Howard Jarvis, supra, 25 Cal.4th at pp. 823–824; see also Aryeh, supra, 55

Cal.4th at p. 1200 [“To determine whether the continuous accrual doctrine applies here,

we look . . . to the nature of the obligation allegedly breached.”].) In contrast, the plain

language of former section 7507 imposes only a one-time obligation: to obtain and make

641

public a statement of the future costs of proposed pension increases “before authorizing”

them.

Plaintiff does not appear to argue that former section 7507 itself imposes a

continuing obligation, but instead suggests Howard Jarvis stands for the proposition that,

if an authority is void for failing to comply with a state law, a new limitations period to

challenge the original failure is triggered every time money is collected or disbursed

pursuant to that authority. Plaintiff construes the case too broadly. As discussed above,

significant portions of the court’s analysis rely on statutory language imposing a

continuing obligation, not present here. We acknowledge that the opinion includes

broader language suggesting the limitations period for a challenge to the validity of a tax

measure based on a violation of any statute can be brought within three years after any

collection of the tax. (Howard Jarvis, supra, 25 Cal.4th at p. 825 [“Cities and counties

must eventually obey the state laws governing their taxing authority and cannot continue

indefinitely to collect unauthorized taxes.”]; ibid. [“[W]here 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.”].) But the actual analysis hinges on the nature of the obligation imposed by

Proposition 62 itself. (See In re Ricardo P. (2019) 7 Cal.5th 1113, 1126 [“It is true that

our opinion in [a prior case] contains some expansive language . . . . But our reasoning

reflected the specific circumstances presented by the [facts of the case].”].) Moreover,

even this broader language is limited to challenges to tax measures. The court’s

reasoning relied in part on factors unique to such measures, to wit, the availability of a

refund action within a certain limitations period after the collection of a tax, and the

ability to challenge the validity of the underlying tax measure in such an action. (Howard

Jarvis, at pp. 820–822.) Plaintiff cites no comparable statute authorizing actions to

challenge pension payments (or other county expenditures) and setting forth separate

limitations periods for such actions.

742

The pension cases relied on by Plaintiff do not alter this analysis. The cases

discussed by Plaintiff finding certain pension benefits invalid do not involve statute of

limitations defenses and are therefore inapposite. (E.g., San Diego City Firefighters,

Local 145 v. Board of Administration, etc. (2012) 206 Cal.App.4th 594; Medina v. Board

of Retirement (2003) 112 Cal.App.4th 864.) Cases involving actions brought by

pensioners rely on the proposition that “ ‘[t]he right to receive periodic payments under a

pension is a continuing one [citation], and any time limitation upon the right to sue for

each instalment necessarily commences to run from the time when that instalment

actually falls due.’ ” (Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, 462; see also

Dryden v. Board of Pension Commrs. (1936) 6 Cal.2d 575, 580–581.) That a pensioner

has a continuing right to a pension does not mean that Section 7507 imposes a continuing

obligation on the County.

In Baxter v. State Teachers’ Retirement System (2017) 18 Cal.App.5th 340

(Baxter), the California State Teachers’ Retirement System (CalSTRS) discovered a

years-long error in the monthly benefit calculation of certain retired teachers resulting in

overpayments. (Id. at p. 347.) The teachers argued the applicable statute of limitations

barred CalSTRS from bringing an action to recoup past overpayments and reduce future

benefits. (Ibid.) The Court of Appeal held that, although CalSTRS’ action was untimely,

the continuous accrual doctrine applied. (Id. at p. 382.) The court relied on the

continuing nature of the underlying obligation: “The right of each of the Teachers to

receive monthly payments, and the obligation of CalSTRS to disburse them, are

continuing ones that accrue when such payments become due.” (Id. at p. 380; accord,

Blaser v. State Teachers’ Retirement System (2019) 37 Cal.App.5th 349, 367–368.)

Contrary to Plaintiff’s suggestion, the court’s reasoning does not apply equally here. The

continuing obligation of CalSTRS was to pay correctly calculated benefits—an obligation

that recurred with every pension payment made. In contrast, the County’s obligation at

issue here was to procure and make public an actuarial statement before authorizing

pension increases. Although Plaintiff argues the alleged violation of this obligation

843

rendered the pension increases void, the underlying obligation itself does not recur each

time pension benefits are paid.5

In sum, former section 7507 imposes a duty on government entities to secure and

make public an actuarial statement before approving pension increases. This duty is

imposed at the time of approval and is not “a continuing one, susceptible to recurring

breaches . . . .” (Aryeh, supra, 55 Cal.4th at p. 1200; see also Howard Jarvis, supra, 25

Cal.4th at pp. 823–824.) Unlike the statutory language at issue in Howard Jarvis, there is

no basis to construe former section 7507 as imposing an additional and separate duty to

not pay increased pension benefits pursuant to a pension increase authorized without

compliance with its requirements regarding actuarial statements. To find such a

requirement outside of former section 7507—by finding every allegedly void government

action subject to ongoing challenge pursuant to the continuous accrual theory—would

ignore the direction that, “[t]o determine whether the continuous accrual doctrine applies

here, we look . . . to the nature of the obligation allegedly breached.” (Aryeh, at p. 1200.)

Accordingly, we find the continuous accrual doctrine does not trigger a new limitations

period every time retirement benefits are paid pursuant to the increased pension benefits

approved in 2002 and 2003.

II. Delayed Discovery/Estoppel

Plaintiff alternatively argues that his action is timely under the delayed discovery

and estoppel doctrines. “[T]he discovery rule, where applicable, ‘postpones accrual of a

cause of action until the plaintiff discovers, or has reason to discover, the cause of

action.’ ” (Aryeh, supra, 55 Cal.4th at p. 1192.) “A plaintiff relying on the discovery

5 Plaintiff’s reliance on a constitutional provision prohibiting gifts of public funds (Cal. Const., art. XVI, § 6) and on a statute barring county payments on a void contract (§ 23006), is unavailing. Plaintiff contends that because these provisions impose ongoing obligations, it was unnecessary for the Legislature to impose an ongoing obligation in former section 7507. We decline to construe these provisions as effectively extending the continuous accrual doctrine to any alleged violation of a one-time statutory obligation that results in an expenditure of public funds. To do so would contravene the direction in Howard Jarvis and Aryeh that the continuous accrual doctrine looks to the underlying obligation allegedly violated—here, the obligation imposed by former section 7507.

944

rule must plead ‘ “(1) the time and manner of discovery and (2) the inability to have

made earlier discovery despite reasonable diligence.” ’ [Citation.] Plaintiffs have an

obligation to plead facts demonstrating reasonable diligence.” (WA Southwest 2, LLC v.

First American Title Ins. Co. (2015) 240 Cal.App.4th 148, 157.) “A party may be

equitably estopped to assert the statute of limitations when his or her conduct induced

another not to file a lawsuit within the applicable limitations period.” (Walker v. City of

San Clemente (2015) 239 Cal.App.4th 1350, 1370.)

All of the statutes allegedly violated required the County to provide specified

notice at a public meeting of the board of supervisors. (Former section 7507 [“[L]ocal

legislative bodies shall secure the services of an enrolled actuary to provide a statement

of the actuarial impact upon future annual costs before authorizing increases in public

retirement plan benefits. . . . [¶] The future annual costs as determined by the actuary

shall be made public at a public meeting at least two weeks prior to the adoption of any

increases in public retirement plan benefits.” (italics added)]; see also §§ 23026 [“[T]he

board of supervisors shall make public, at a regularly scheduled meeting of the board, all

salary and benefit increases that affect either or both represented employees and

nonrepresented employees. . . . Notice shall occur prior to the adoption of the salary or

benefit increase, and shall include an explanation of the financial impact that the

proposed benefit change or salary increase will have on the funding status of the county

employees’ retirement system.” (italics added)], 31515.5 [same], 31516 [“The board of

supervisors, in compliance with Section 7507, shall secure the services of an enrolled

actuary to provide a statement of the actuarial impact upon future annual costs before

authorizing increases in benefits. . . . [¶] The future annual costs as determined by the

actuary shall be made public at a public meeting at least two weeks prior to the adoption

of any increases in benefits.” (italics added)].) Any violation would therefore be apparent

from the public records of the County Board of Supervisors’ meetings from 2002 and

2003. (See International Longshoremen’s and Warehousemen's Union v. Los Angeles

Export Terminal, Inc. (1999) 69 Cal.App.4th 287, 293 [“The Brown Act (§ 54950 et

seq.), adopted in 1953, is intended to ensure the public’s right to attend the meetings of

1045

public agencies. [Citation.] To achieve this aim, the Act requires, inter alia, that an

agenda be posted at least 72 hours before a regular meeting and forbids action on any

item not on that agenda.”].)

Plaintiff fails to allege (or argue) facts demonstrating why, under such

circumstances, he was unable to discover the alleged violation within the limitations

period. He has thus failed to meet his burden under the discovery rule. Moreover, “a

discovery rule is not appropriate, where as here, a public agency’s violation of a statute is

a matter of public record and the violation is being asserted by a plaintiff which has no

direct beneficial interest in the outcome of the litigation.” (Hogar Dulce Hogar v.

Community Development Commission (2003) 110 Cal.App.4th 1288, 1297.)

Plaintiff argues the public records “were superseded by the subsequent

misrepresentations of Respondents,” but the only cited misrepresentations were made in

response to a 2012 grand jury report on the issue. This conduct took place well outside of

the limitations period and therefore does not estop Respondents from invoking the statute

of limitations. (Walker v. City of San Clemente, supra, 239 Cal.App.4th at p. 1370

[defendant’s conduct “several years after the limitations period already had expired” was

insufficient to warrant estoppel].)

Accordingly, we conclude that neither delayed discovery nor estoppel applies to

toll the statute of limitations.6

DISPOSITION

The judgment is affirmed. Respondents shall recover their costs.

6 Because of our conclusion, we need not resolve several issues raised by the parties: whether the 2012 grand jury report was sufficient to put Plaintiff on inquiry notice of the alleged violation; whether any County officials were fiduciaries and/or had a conflict of interest with respect to the County’s response to the grand jury report; whether Plaintiff failed to preserve certain claims; and whether the dismissal in favor of the Sonoma County Law Enforcement Association can be affirmed on alternative grounds. In addition, because our resolution of the issue relies solely on undisputed facts, we need not address the parties’ dispute about judicial notice or Plaintiff’s contention that the trial court relied on its own personal knowledge in resolving the issue.

1146

SIMONS, J.

We concur.

JONES, P.J.

BURNS, J.

(A155286)

1247

Superior Court of Sonoma County, No. SCV261187, Hon. Rene Chouteau, Judge.

Robinson & Robinson, Jeffrey A. Robinson and Charles R. Patterson for Plaintiff and Appellant.

Colantuono, Highsmith & Whatley, Michael G. Colantuono, Jon R. di Cristina and Conor W. Harkins for Defendants and Respondents County of Sonoma, Sonoma County Board of Supervisors, Erick Roeser, Christina Cramer, Bruce Goldstein, and Sheryl Bratton.

Nossaman, Ashley K. Dunning and Jennifer L. Meeker for Defendant and Respondent Sonoma County Employees’ Retirement Association and Julie Wyne.

Mastagni Holstedt, David P. Mastagni and Kenneth E. Bacon for Defendant and Respondent Sonoma County Law Enforcement Association.

1348

Attachment 1: Government Code Section 7507, text as adopted and in effect 1977-2008

49

West’s Annotated California Codes

Government Code (Refs & Annos)

Title 1. General

Division 7. Miscellaneous

Chapter 21. Public Pension and Retirement Plans (Refs & Annos)

This section has been updated. Click here for the updated version.

West’s Ann.Cal.Gov.Code § 7507

§ 7507. Actuarial impact upon future annual costs prior toauthorizing increases in benefits; use of enrolled actuary

Effective: [See Text Amendments] to December 31, 2008

The Legislature and local legislative bodies shall secure the services of an

enrolled actuary to provide a statement of the actuarial impact upon future

annual costs before authorizing increases in public retirement plan benefits.

An “enrolled actuary” means an actuary enrolled under subtitle C of Title

III of the federal Employee Retirement Income Security Act of 19741 and

“future annual costs” shall include, but not be limited to, annual dollar

increases or the total dollar increases involved when available.

The future annual costs as determined by the actuary shall be made public

at a public meeting at least two weeks prior to the adoption of any increases

in public retirement plan benefits.

50

Attachment 2: Cited Excerpts of Oral Argument in Luke v. Sonoma County, et al.

51

52

·1· · · · · · · MR. ROBINSON:· Thank you.

·2· · · · · · · MR. COLANTUONO:· Good morning, Michael

·3· ·Colantuono, appearing on behalf of the County.

·4· · · · · · · · · ·To start with just assignments

·5· ·question, how could your tentative be made better, I

·6· ·don't have a lot of suggestions.· I think it is a

·7· ·thoughtful and wise wending of a cluttered path.

·8· · · · · · · · · ·I do encourage you to publish your

·9· ·opinion, however.· It's not clear, from your tentative,

10· ·whether you intend to.· The reason for that is that

11· ·there are two grand jury reports out there, one in

12· ·Sonoma County, one in Marin County, studying this same

13· ·problem, that have fomented a bunch of cases, at least

14· ·one of which is pending in this court, in addition to

15· ·this case.

16· · · · · · · JUSTICE SIMONS:· Well, what about 23006? I

17· ·now realize that actually, there were two paragraphs in

18· ·the opening brief, as well as a sentence or two in the

19· ·reply.· What -- what -- what's the weakness in that

20· ·argument raised by the appellant?

21· · · · · · · MR. COLANTUONO:· The tentative does address

22· ·the suggestion that a void government action is

23· ·perpetually open to litigation, and 23006 is just one

24· ·more expression of that idea, so I think you have

25· ·covered it, without citing it, but it is not true that

53

·1· ·these payments, and the retirement board, as

·2· ·fiduciaries, is paying these benefits.· That's their

·3· ·obligation, and they were doing so, as required by law.

·4· · · · · · · · · ·So we respectfully request, Your

·5· ·Honors, as well -- we do agree with the County's

·6· ·attorney on the publication point.· We think it's very

·7· ·important that this case be published, to put an end to

·8· ·some of this litigation that is occurring against

·9· ·retirement boards, trying to find different ways to

10· ·unwind benefits that were properly granted, albeit

11· ·perhaps, in retrospect, different parties who'd like to

12· ·unwind them are saying that public notice wasn't

13· ·provided.· That is -- that is not an appropriate means

14· ·by which to unwind retirement benefits that are being

15· ·paid to the retirees of Sonoma County.

16· · · · · · · · · ·I'm happy to respond to any questions.

17· · · · · · · JUSTICE SIMONS:· We have none.

18· · · · · · · MS. DUNNING:· Thank you.

19· · · · · · · JUSTICE SIMONS:· Thank you.

20· · · · · · · · · ·And, Counsel, you have two minutes.

21· · · · · · · MR. BACON:· I won't even need that much,

22· ·Your Honors.· I'll just -- very briefly, my -- Ken

23· ·Bacon.· I represent the Sonoma County Law Enforcement

24· ·Association.

25· · · · · · · · · ·I agree with the comments that

54

·1· · · · · · · I, RENAE E. LOPEZ, a Certified Shorthand

·2· ·Reporter of the State of California, do hereby certify:

·3· · · · · · · That a record of the audio proceedings was

·4· ·made by me using machine shorthand, which was

·5· ·thereafter transcribed under my direction; that the

·6· ·foregoing transcript is a true record of the audio

·7· ·transcription.

·8· · · · · · · I further certify that I am neither

·9· ·financially interested in the action nor a relative or

10· ·employee of any attorney or any party to this action.

11· · · · · · · IN WITNESS WHEREOF, I have this date

12· ·subscribed my name.

13

14· ·Dated: January 13, 2020

15· · · · · · · · · · · ·________________________________· · · · · · · · · · · · ·Renae E. Lopez16· · · · · · · · · · · · CSR No. 12142

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55

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF ORANGE

I am employed in the county of Orange, State of California. I am over

the age of 18 and not a party to the within action; my business address is

2301 Dupont Drive, Suite 530, Irvine, California 92612.

On 1/17/2020, I served the documents described as PETITION FOR

REVIEW on interested parties in this action, as follows:

Kenneth E. Bacon, Esq.

David P. Mastagni, Esq.

Mastagni Holstedt, A.P.C.

Civil Litigation Department

1912 I Street

Sacramento, CA 95811

PH: 916-446-4692 / FX: 916-447-4614

(Electronically Served Via EFS)

Ashley K. Dunning, Esq.

Nossaman LLP

50 California Street, 34th Floor

San Francisco, CA 94111

PH: 415-398-3600 / FX: 415-398-2438

E: adunning@nossaman.com

(Electronically Served Via EFS)

Michael G. Colantuono, Esq.

Jon R. di Cristina

Colantuono, Highsmith & Whatley, PC

420 Sierra College Drive, Suite 140

Grass Valley, CA 95945-5091

PH: 530-432-7357 / FX: 530-432-7356

E: jdicristina@chwlaw.us

(Electronically Served Via EFS)

California Court of Appeal

First Appellate District, Division 5

350 McAllister Street

San Francisco, CA 94102

PH: 415-865-7300

(Electronically Served Via EFS)

(Attorneys for Respondent

Sonoma County Law

Enforcement Association)

(Attorneys for Respondents

Sonoma County

Employees’ Retirement

Association (SCERA))

(Attorneys for Sonoma

County Respondents)

(California Appellate

Court)

56

Hon. René A. Chouteau

c/o Clerk of Court

Sonoma County Superior Court

3055 Cleveland Avenue

Santa Rosa, California 95403

Civil and Family Law Courthouse

(Served Via Golden State Overnight)

(Trial Judge)

Supreme Court, State of California

350 McAllister Street

San Francisco, CA 94102

(Electronically Served Via EFS and

Golden State Overnight)

(California Supreme

Court)

[ ] (BY MAIL)[C.C.P. § 1013(a)(1)Person Depositing In Mail] I

deposited an envelope, containing the listed documents, addressed to the

persons listed above as “Sent via U.S. Mail” in the mail at Irvine, California.

The envelope was mailed with postage thereon fully prepaid.

[X] I caused the above documents to be submitted to the Court for filing

and electronic service on the persons listed above as served “Electronically

Served Via EFS” through the EFS [electronic filing system operated by

TrueFiling] in accordance with (Cal. Rule of Court, rule 8.78(a)) and by

Golden State Overnight where indicated.

Executed on January 17, 2020, at Irvine, California

I declare under penalty of perjury that I am employed in the office of

a member of the bar of this Court at whose direction the service was made

and that the foregoing is true and correct.

Charles Patterson /s/ Charles Patterson

(Type or print name) (Signature)

57