EEL-OXNARD LLC vs CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION

2026CUJR065578: EEL-OXNARD LLC vs CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION 07/23/2026 in Department 21 Motion to Transfer Venue

Tentative Rulings. Parties and counsel appearing for oral argument should address the tentative decision. Parties may submit on the tentative decision by email, with a copy to all other parties in the matter, to courtroom21@ventura.courts.ca.gov before 8:00 a.m. on the day set for the hearing, with a subject line that includes “SUBMISSION ON TENTATIVE”, Case Number, Title and Party. If fewer than all parties submit on the tentative, the hearing will proceed, and the tentative ruling is subject to change. The clerk cannot advise if you should still appear or not. The decision of whether to appear for a hearing is to be made by the parties and their counsel. (Dept. 21 Rules & Procedures, p. 4, § II.I.)

The following is a statement of the Court’s tentative ruling. The Court may adopt, modify or reject the tentative ruling after hearing. The tentative ruling has no legal effect unless and until adopted by the Court.

Motion: California Department of Tax and Fee Administration’s Motion to Transfer Venue to Sacramento Superior Court (Opposed)

Tentative Ruling:

Defendant California Department of Tax and Fee Administration’s (“CDTFA”) Motion to Transfer Venue to Sacramento County is DENIED.

Plaintiff’s Request for Judicial Notice is GRANTED as to the existence and contents of the May 16, 2024 reply brief filed in HNHPC, Inc. v. California Department of Tax and Fee Administration, Orange County Superior Court Case No. 30-2023-01369643-CU-WM-WJC. The Court does not take judicial notice of the truth of factual assertions contained therein or treat the legal arguments therein as binding. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-1567.)

Plaintiff counsel to give notice within two (2) court days.

Motion to Transfer Venue

CDTFA contends this action is, in substance, a cannabis tax refund action subject to the mandatory venue provision of Rev. & Tax. Code § 55243. Plaintiff contends it is not seeking a refund in this action, but rather declaratory relief concerning CDTFA’s authority to impose the 50% penalty under Rev. & Tax. Code § 34013(f) and the validity of Regulation 3700(k)(1) and related policies.

2026CUJR065578: EEL-OXNARD LLC vs CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION

Venue is determined from the complaint as it existed when the motion was made, and the nature of an action is determined by its substance rather than merely the labels attached to the causes of action or prayer for relief. (Brown v. Superior Court (1984) 37 Cal.3d 477, 482; Standard Brands of California v. Bryce (1934) 1 Cal.2d 718, 721.)

Nevertheless, CDTFA has not established that the present action is an action “upon a claim for refund” governed by Rev. & Tax. Code § 55243. The Fee Collection Procedures Law provides a statutory mechanism for recovery of erroneously or illegally assessed or collected amounts, including penalties. (Rev. & Tax. Code §§ 55221, 55242-55244.) Rev. & Tax. Code § 55243, however, addresses an action brought following action on a refund claim and “for the recovery” of the amount disallowed. Here, Plaintiff does not seek recovery of the $18,135 penalty in this action. The Complaint expressly disclaims such relief and instead seeks declarations concerning the proper interpretation of Rev. & Tax. Code § 34013(f) and the validity of CDTFA’s regulation and policies.

The procedural chronology also does not fit the statutory refund-action framework asserted by CDTFA. Plaintiff alleges that it paid the assessment on April 13, 2026 and filed this action on April 29, 2026. Nothing before the Court indicates that CDTFA had acted upon Plaintiff’s refund claim before this action was filed, and the six-month period contemplated by Rev. & Tax. Code § 55244 had not elapsed.

The Court recognizes that Plaintiff’s declaratory claims concern the same 50% penalty that is the subject of its separate administrative refund claim, and that a favorable declaration could bear upon Plaintiff’s ability to obtain a refund through that process. This gives the action some characteristics of an indirect challenge to the assessment. However, Plaintiff has already paid the assessment in full; no outstanding assessment remains; the action does not seek to restrain collection; and Plaintiff does not request an order directing repayment of the penalty.

The authorities addressing California’s “pay-first” rule do not compel a different result. Declaratory or other relief may not be used to circumvent statutory tax procedures where its practical effect is to prevent collection, cancel an outstanding tax obligation, or obtain the functional equivalent of a refund. (California Dept. of Tax & Fee Administration v. Superior Court (Kintner) (2020) 48 Cal.App.5th 922, 931-935; Morgan v. Ygrene Energy Fund, Inc. (2025) 18 Cal.5th 1061, 1074-1075, 1087-1088.) Here, however, the disputed assessment has been paid and the relief requested does not itself direct repayment or cancel an outstanding liability. Gov’t Code § 11350(a), moreover, expressly authorizes an interested person to seek a judicial declaration concerning the validity of an administrative regulation.

Thus, while the existence of the separate refund claim is relevant, it does not, without more, convert this action into one “for the recovery” of a disallowed refund within the meaning of Rev. & Tax. Code § 55243. The Court distinguishes between adjudicating the legality of CDTFA’s statutory interpretation and regulation, which is the relief sought here, and adjudicating Plaintiff’s entitlement to repayment of the specific penalty, which remains subject to the statutory refund process.

2026CUJR065578: EEL-OXNARD LLC vs CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION

Because CDTFA has not established that Rev. & Tax. Code § 55243 governs this action, it has not established its asserted basis for mandatory transfer to Sacramento County under CCP §§ 396b and 398. Whether Ventura County is otherwise a proper venue under the generally applicable venue statutes has not been sufficiently presented as an independent ground for transfer in the motion.

Accordingly, the Motion to Transfer Venue is DENIED.

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