Silicon Valley Taxpayers Association, Inc., et al. v. County of Santa Clara, et al.

Plaintiffs allege Measure A is an invalid tax because Revenue and Taxation Code section 7292.4 is an unconstitutional “local” or “special” statute as applied to the County, in violation of article IV, section 16 of the California Constitution. (FAC at ¶ 2.) The “sales tax” rate in the County otherwise exceed the limits of local transactions and use taxes set by Revenue and Taxation Code sections 7251.1, 7285.3, and 7285.92. (Ibid.)

Plaintiffs also allege Measure A is an invalid tax because the County Board of Supervisors (“County Board”) did not consolidate the Measure A election with a regularly scheduled general election for members of the County Board, in violation of article XIII C, section 2, subdivision (b) of the California Constitution. (FAC at ¶ 3.)

Therefore, Plaintiffs allege Measure should be invalidated and/or declared void. (FAC at ¶ 4.)

On April 27, 2026, Plaintiffs filed the operative FAC against Defendants alleging causes of action for:

(1) To Invalidate Tax; (2) Declaratory and Injunctive Relief; (3) Declaratory and Injunctive Relief; (4) To Invalidate Tax; (5) Declaratory and Injunctive Relief; and (6) Declaratory and Injunctive Relief.

On May 14, 2026, the County filed the motion presently before the court, a demurrer to the FAC. Plaintiffs filed written oppositions. The County filed reply papers. Both sides filed requests for judicial notice.

A case management conference is also scheduled for June 26, 2026.

Demurrer to the FAC

The County argues each cause of action in the FAC is subject to demurrer for failure to state a valid claim. (Code Civ. Proc., § 430.10, subd. (e).)

County’s Request for Judicial Notice

“Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter.” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.)

The County requests judicial notice of certain court records in a different action and legislative facts before the County. (See Request for Judicial Notice [“RJN”] at Exs. A-G.) For purposes of this demurrer, the court relies only on Exhibit D, which Plaintiffs objected to in their opposition. The objection lacks merit given that the portion of Exhibit D referenced by the court is also mentioned in the FAC and thus relied upon by Plaintiffs. Exhibit D is a proper subject of judicial notice under Evidence Code section 452, subdivisions (b) and (c).

The court declines to take judicial notice of the remaining exhibits as they are not relevant to resolving issues raised by the demurrer for reasons explained below. (See Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6 [a court need not take judicial notice of a matter unless it “is necessary, helpful, or relevant”].)

Accordingly, the request for judicial notice is GRANTED as to Exhibit D. The request for judicial notice is DENIED as to Exhibits A-C, E-G.

Plaintiffs’ Request for Judicial Notice

Plaintiffs’ request for judicial notice of Statutes of 2023, Chapter 391 (SB 335) is DENIED as it is not relevant to resolving issues raised by the demurrer for reasons articulated below.

Reverse Validation Actions Generally

“Code of Civil Procedure sections 860 through 870 provide for validation actions. Validation actions ‘ “provide an expedited process by which certain public agency actions may be determined valid and not subject to attack.” [Citations.] The validation statutes apply to a matter when “any other law” authorizes their application, and the statutes provide for a 60-day period during which an action may be brought to “determine the validity of such matter.” [Citations.]’ [Citation.]” (Wolstoncroft v. County of Yolo (2021) 68 Cal.App.5th 327, 337 (Wolstoncroft).)

“When a public agency does not bring a validation action and an interested person challenges the validity of the governmental act, the lawsuit is called a reverse validation action. [Citations.]” (Wolstoncroft, supra, 68 Cal.App.5th at p. 337.) To this end, Code of Civil Procedure section 863 states:

“If no proceedings have been brought by the public agency pursuant to this chapter, any interested person may bring an action within the time and in the court specified by Section 860 to determine the validity of such matter. The public agency shall be a defendant and shall be served with the summons and complaint in the action in the manner provided by law for the service of a summons in a civil action. In any such action the summons shall be in the form prescribed in Section 861.1 except that in addition to being directed to ‘all persons interested in the matter of [specifying the matter],’ it shall also be directed to the public agency.

If the interested person bringing such action fails to complete the publication and such other notice as may be prescribed by the court in accordance with Section 861 and to file proof thereof in the action within 60 days from the filing of his complaint, the action shall be forthwith dismissed on the motion of the public agency unless good cause for such failure is shown by the interested person.” (Code Civ. Proc., § 863.)

Failure to State a Cause of Action

Law

“ ‘The absence of any allegation essential to a cause of action renders it vulnerable to a general demurrer. A ruling on a general demurrer is thus a method of deciding the merits of the cause of action on assumed facts without a trial.’ [Citation.] ‘Conversely, a general demurrer will be overruled if the complaint contains allegations of every fact essential to the statement of a cause of action, regardless of mistaken theory or imperfections of form that make it subject to special demurrer.’ [Citation.]” (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 291-292 (Morris).)

“A complaint, with certain exceptions, need only contain a ‘statement of the facts constituting the cause of action, in ordinary and concise language’ [citation] and will be upheld ‘ “so long

as [it] gives notice of the issues sufficient to enable preparation of a defense.” ’ [Citation.] ‘[T]o withstand a demurrer, a complaint must allege ultimate facts, not evidentiary facts or conclusions of law.’ [Citation.]” (Morris, supra, 78 Cal.App.5th at p. 292.)

First Cause of Action: To Invalidate Tax

As to the first cause of action, Plaintiffs allege:

• SB 335 (2023) is unconstitutional under the California Constitution, article IV, section 16, as it applies to November 2025 County Measure A because three general statutes, Revenue & Tax Code sections 7251.1, 7285.3, and 7285.92 are applicable. • There is not a rational relationship between the purpose of the enactment of SB 335 and the singling out of the County from the statewide local transactions and use tax cap in Sections 7251.1, 7285.3, and/or 7285.92. • The Legislature articulated no natural, intrinsic, or constitutional distinction in the text of SB 335 or in the legislative history of SB 335 concerning the County that justifies its disparate treatment. • In SB 335, the Legislature failed to provide any finding, explanation, or other evidence of a rational relationship between “unique fiscal pressures” and the singling out of the County from the transactions and use tax limit in Sections 7251.1 and 7285.3. • The Legislature failed to make a finding of statewide interest in SB 335. • The County’s purported “unique fiscal pressures” are not a “state fiscal issue.” • In SB 335, the Legislature failed to provide any finding or explanation as to how any “fiscal pressures” being experienced in the County are “unique” to the County. • SB 335 is unconstitutional under California Constitution, article IV, section 16, because it contains no time limitation or sunset clause for the duration of any tax imposed pursuant to SB 335. (FAC at ¶¶ 42, 50, 59, 60, 64, 65, 67, 70, 72, 73.)

“[W]hile a legislative classification is improper if it is not founded upon some natural, constitutional or intrinsic distinction which reasonably justifies a difference in treatment, a classification which has a substantial relation to a legitimate object to be accomplished is valid. If any state of facts can reasonably be conceived which would sustain a statutory classification, there is a presumption that this state of facts exists and the burden of demonstrating arbitrariness rests upon the party who assails the classification.” (Board of Education v. Watson (1966) 63 Cal.2d 829, 833.)

“It is well settled that [California Constitution,] article IV, section 16 does not prohibit the Legislature from enacting statutes that are applicable solely to a particular county or local entity. [Citations.] ... In determining whether ‘a general statute can be made applicable,’ the issue is not whether the Legislature could conceivably enact a similar statute affecting every locality. [Citation.] Rather, it is whether ‘there is a rational relationship between the purpose of the enactment ... and the singling out of [a single] ... county affected by the statute.’ [Citations.] The Legislature’s determination that this rational relationship exists is entitled to

great weight and will not be reversed unless the determination is arbitrary and without any conceivable factual or legal basis.” (White v. State of California (2001) 88 Cal.App.4th 298, 305 (White).)

The crux of Plaintiffs’ allegations are essentially that: (1) there is no rational relationship between the purpose of the enactment of SB 335 and the singling out of the County from statewide local transactions and use tax cap in Revenue & Tax Code sections 7251.1, 7285.3, and/or 7285.92; (2) the Legislature could not enact SB 335 because it was not founded on a natural, intrinsic, or constitutional distinction; and (3) the County’s purported “unique fiscal pressures” are not a “state fiscal issue.” But, in Alameda County Taxpayers’ Association v. County of Alameda (2025) 108 Cal.App.5th 524 (Alameda), a recent decision from the First Appellate District, the appellate court affirmed the sustaining of a demurrer by the trial court finding that unique fiscal pressures could justify the bills at issue in that case. The Court of Appeal stating in relevant part:

“In both bills, the Legislature found ‘unique fiscal pressures’ in the specified localities warranted the exemptions from the state sales tax cap. Authorizing additional taxes for certain localities is rationally related to the purpose of alleviating unique fiscal pressures in those localities. That the Legislature did not identify the fiscal pressures, as the Association complains, is of no moment: the relevant analysis is whether ‘any state of facts can reasonably be conceived which would sustain a statutory classification.’ [Citation.] The Association also argues the fact that the bills identify more than one locality means the localities cannot be unique. The Legislature could reasonably determine that certain localities face fiscal pressures not faced by the state’s remaining localities.” (Alameda, supra, 108 Cal.App.5th at p. 538.)

Similarly, Section 3 of SB 335 provides:

“The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique fiscal pressures being experienced in the Counties of Santa Clara and Ventura in providing essential programs.” (FAC at ¶ 26.)

Like the Alameda Court, this court also finds the Legislature has identified a reasonable and rational basis for the need to enact legislation directed to the County. (Alameda, supra, 108 Cal.App.5th at p. 538.) Furthermore, the Legislature has the authority to determine the best method for resolving state fiscal issues, and it is not for the court to second-guess its determination. (White, supra, 88 Cal.App.4th at p. 307.)

In opposition, Plaintiffs contend Alameda was wrongly decided and urge the court to rely on White v. Church (1986) 185 Cal.App.3d 627 (Church), an earlier decision from the First Appellate District. In support, Plaintiffs direct the court to the following excerpt from Church which provides “[f]or 137 years the California Constitution has provided that a local or special statute is invalid in any case if a general statute can be made applicable.” (Church, supra, 185 Cal.App.3d at p. 630.) But, the court does not find Church to be compelling or inconsistent with Alameda. Nor is the court persuaded by the other authorities cited in the opposition or Plaintiffs’ attempt to distinguish Alameda from the instant case. Instead, this court concludes

that Alameda is instructive and remains good law in California to dispose of the first cause of action on demurrer.

As the demurrer is sustainable on this ground, Plaintiffs, in opposition, request further leave to amend. While it is not clear if Plaintiffs will be able to amend to state a cause of action, the court will afford them an opportunity to file an amended pleading. (See City of Stockton v. Super. Ct. (2007) 42 Cal.4th 730, 747 [if the plaintiff has not had an opportunity to amend the pleading in response to a motion challenging the sufficiency of the allegations, leave to amend is liberally allowed as a matter of fairness, unless the pleading shows on its face that it is incapable of amendment].)

Consequently, the demurrer to the first cause of action is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for failure to state a valid claim.

Second Cause of Action: Declaratory and Injunctive Relief

In the second cause of action, Plaintiffs allege an actual controversy has arisen concerning the constitutionality of Revenue and Taxation Code section 7292.4 as applied to the County and Measure A on the November 4, 2025 ballot. (FAC at ¶ 80.) Plaintiffs allege that section 7292.4 is an unconstitutional “special” or “local” statute in violation of the California Constitution, article IV, section 16. (Ibid.)

Here, the County’s arguments on demurrer to the second cause of action are the same as those raised to the first cause of action. Thus, the demurrer to the second cause of action is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for reasons articulated in the court’s ruling on the demurrer to the first cause of action.

Third Cause of Action: Declaratory and Injunctive Relief

In the third cause of action, Plaintiffs allege an actual controversy has arisen concerning the compliance of County 2025 Measure A with Revenue and Taxation Code sections 7251.1, 7285.3, and 7285.92. (FAC at ¶ 86.)

Here, the County’s arguments on demurrer to the third cause of action are the same as those raised to the first cause of action. Therefore, the demurrer to the third cause of action is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for reasons articulated in the court’s ruling on the demurrer to the first cause of action.

Fourth Cause of Action: To Invalidate Tax

In the fourth cause of action, Plaintiffs allege Measure A’s placement on the November 4, 2025 ballot was unconstitutional in violation of Article XIII C (Proposition 218).

The California Constitution, article XIII C, section 2(b) states:

No local government may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be

consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body. (FAC at ¶ 92, emphasis added.)

Here, Plaintiffs allege the County Board’s placement of Measure A on the November 2025 special election ballot violated the mandatory constitutional requirement to consolidate the Measure A general tax election with a regularly scheduled general election for members of the County Board. (FAC at ¶ 97.) As stated above, an exception applies where an emergency is declared by a unanimous vote of the governing body. According to the FAC, at a special meeting on August 7, 2025, the County Board adopted a “Resolution of the Board of Supervisors of the County of Santa Clara Declaring an Emergency Under Proposition 218 and Authorizing a Special Election” that included the following:

BE IT RESOLVED that the Board of Supervisors of the County of Santa Clara hereby finds facts constituting an emergency under section 2 of Article XIIC of the California Constitution, including but not limited to the facts reflected in the recitals above and those findings recited in Section 1 of the Urgency Ordinance Implementing a Five-Year General Retail Transactions (Sales) and Use Tax in Santa Clara County at The Rate of Five-Eighths of One Cent, considered concurrently with this Resolution, as well as the legislative file and materials presented by County Administration at the August 7, 2025 meeting of the Board of Supervisors to consider adoption of this resolution. (Id. at ¶ 94; County’s RJN at Ex. D.)

Plaintiffs allege the County’s Board declaration of “emergency” by resolution at the August 7, 2025 special meeting is not a legally sufficient “case of emergency” under California Constitution, article XIII C, section 2(b). (FAC at ¶ 98.)

A plaintiff is required to carry the burden of proof regarding the invalidity of an ordinance where it is an essential element of its claim for relief. (Sonoma County Organization etc. Employees v. County of Sonoma (1991) 1 Cal.App.4th 267, 275 (Sonoma County).) “This reflects the long-standing rule that ‘[i]n passing on the validity of an ordinance ... it will be presumed that it is valid. He who would claim that it is invalid must assume the burden of showing its invalidity.’ [Citation.] That burden includes surmounting all possible intendments, presumptions, and reasonable doubts indulged in favor of the Ordinance’s validity. [Citations.]” (Ibid.)

Also, “[i]n the absence of evidence to the contrary it will be assumed that a municipal legislative body in enacting an emergency ordinance acted on sufficient inquiry as to whether an emergency existed. Its declaration is prima facie evidence of the fact. Where the facts constituting the emergency or urgency are recited in the ordinance and are such that they may reasonably be held to constitute an emergency, the courts will not interfere, and they will not undertake to determine the truth of the recited facts.’ [Citation.]” (Northgate P’ship v. City of Sacramento (1984) 155 Cal.App.3d 65, 69 (Northgate).)

The County points out on demurrer that neither Article XIII C nor the Proposition 218 Omnibus Implementation Act, as codified at Government Code section 53750 et seq., define the term “emergency.” Without such guidance, the parties here present competing definitions for “emergency” in support of their respective positions. On the one hand, the County, relying on Sonoma County, defines an emergency as either: (1) “an unforeseen situation calling for

immediate action”; or (2) “an imminent and substantial threat to public health or safety.” (Sonoma County, supra, 1 Cal.App.4th at pp. 276-277.) These definitions are persuasive given that the Court of Appeal in Sonoma County also addressed a statute which omitted a definition for “emergency.” (Id. at p. 276 [“Just what shall constitute an emergency is left unexplained by the MMBA.”].) By contrast, Plaintiffs, in opposition and the FAC, direct the court to a number of statutes with varying definitions of an emergency. Plaintiffs contend the definition outlined under Public Contract Code section 1102 is instructive (see FAC at ¶ 105) as it provides:

“ ‘Emergency,’ as used in this code, means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services.” (Pub. Contract Code, § 1102.)

But, regardless of the definition, the declaration itself is prima evidence of the fact that an emergency exists. (Northgate, supra, 155 Cal.App.3d at p. 69.) Northgate however suggests that an opposing party can submit evidence negating the existence of an emergency. This action is currently at the pleading stage so the court is not yet in a position to evaluate such evidence as the demurrer considers only well-pleaded allegations of the complaint and judicially noticed materials. (See Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078 [“a demurrer accepts as true all well-pleaded facts and those facts of which the court can take judicial notice”].)

Nor does Sonoma County (addressing petition for writ of mandate) or Northgate (considering a motion for summary judgment), relied upon heavily by the County, articulate the appropriate level of pleaded facts necessary to negate the existence of an emergency. At a minimum, Plaintiffs should allege facts that in some fashion demonstrate that the alleged emergency offered in support of Measure A does not constitute either: (1) “an unforeseen situation calling for immediate action”; or (2) “an imminent and substantial threat to public health or safety.”

Such facts do not exist in the operative pleading but Plaintiffs will be given an opportunity for leave to amend as they have requested in opposition.

Accordingly, the demurrer to the fourth cause of action is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for failure to state a valid claim.

Fifth Cause of Action: Declaratory and Injunctive Relief

In the fifth cause of action, Plaintiffs allege an actual controversy has arisen regarding whether Measure A, which would impose a general tax, was properly placed on the November 4, 2025 special election ballot. (FAC at ¶ 122.)

Here, the County’s arguments on demurrer to the fifth cause of action are the same as those raised to the fourth cause of action. Therefore, the demurrer to the fifth cause of action is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for reasons articulated in the court’s ruling on the demurrer to the fourth cause of action.

Sixth Cause of Action: Declaratory and Injunctive Relief

In the sixth cause of action, Plaintiffs allege an actual controversy has arisen regarding whether County Ordinance No. NS-7.23, An Urgency Ordinance Implementing A Five-Year General

Retail Transactions (Sales) and Use Tax In Santa Clara County At The Rate Of Five-Eighths Of One Cent, is a proper “urgency” ordinance. (FAC at ¶ 126.)

The sixth cause of action fails on the ground that it is untimely as it challenges the validity of the ordinance and was filed after the 60-day deadline to bring such actions. (See Rev. & Tax Code, § 7270.5; see also Friedland v. City of Long Beach (1998) 62 Cal.App.4th 835, 846-847 [“We hold that as to matters which have been or which could have been adjudicated in a validation action, such matters –including constitutional challenges – must be raised within the statutory limitations period in section 860 et seq. or they are waived.”].)

The sixth cause of action fails to state a valid claim for relief under the California Constitution, Elections Code section 9141 and the California Court of Appeal decision in Lindelli v. Town of San Anselmo (2003) 111 Cal.App.4th 1099. And, like the fourth and fifth causes of action, Plaintiffs do not allege facts negating the existence of an urgency in the Measure A Ordinance. While it is not clear how Plaintiffs will be able to amend to state a cause of action, the court will afford them an opportunity to do so as they have requested in opposition.

Consequently, the demurrer to the sixth cause of action is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for failure to state a valid claim.

Disposition

The demurrer to the first, second, third, fourth, fifth, and sixth causes of action in the FAC is SUSTAINED WITH 15 DAYS LEAVE TO AMEND for failure to state a valid claim.

The court will prepare the Order.

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