Title: Franchise Tax Board v. The Superior Court of the City and County of San Francisco

State: california

Issuer: California Supreme Court

Document:

1 
 
 
Filed 6/6/11 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
FRANCHISE TAX BOARD, 
) 
 
 
) 
 
Petitioner, 
) 
 
 
) 
S176943 
 
v. 
) 
 
 
) 
Ct.App. 1/5 A122723 
THE SUPERIOR COURT OF THE CITY ) 
AND COUNTY OF SAN FRANCISCO, 
) 
 
) 
San Francisco City and County 
 
Respondent; 
) 
Super. Ct. No. CGC-06-454297 
 
 
) 
TOM GONZALES, as Personal 
) 
 
Representative, etc., 
) 
 
Real Party in Interest 
) 
 
 
and Respondent. 
) 
 
____________________________________) 
 
Does a taxpayer have the right to a jury trial in an action for a refund of 
state income taxes?  The Court of Appeal said yes, reasoning that the gist of such 
an action is legal and therefore a jury trial is guaranteed by the state Constitution.  
We reverse. 
 
 The facts are undisputed, and may briefly be stated.  Real party in interest 
Tom Gonzales, as personal representative of his son‟s estate, filed a complaint in 
2006 seeking a refund of state personal income taxes for the years 2000 and 2001.  
Gonzales alleged that the estate had paid over $15 million as part of a tax amnesty 
program, reserving the right to seek a refund.  He demanded a jury trial.  The trial 
court denied a motion by defendant Franchise Tax Board to strike the jury 
demand.  On the Board‟s application for writ relief, the Court of Appeal issued an 
 
2 
 
order to show cause.  After thorough consideration of the parties‟ arguments, the 
court declined to disturb the trial court‟s ruling as to the refund action, deciding as 
a matter of first impression that there is a state constitutional right to a jury trial in 
an action for a refund of state income taxes.1  We granted the Board‟s petition for 
review. 
 
DISCUSSION 
 
The statutes governing suits for income tax refunds from the state are silent 
on the right to a jury trial.  (Rev. & Tax. Code, § 19381 et seq.)2  Gonzales relies 
on article I, section 16 of the California Constitution, which declares that “[t]rial 
by jury is an inviolate right and shall be secured to all . . . .”  It is settled that the 
state constitutional right to a jury trial “is the right as it existed at common law in 
1850, when the Constitution was first adopted, „and what that right is, is a purely 
historical question, a fact which is to be ascertained like any other social, political 
or legal fact.‟  [Citations.]”  (C & K Engineering Contractors v. Amber Steel Co. 
(1978) 23 Cal.3d 1, 8; see also Corder v. Corder (2007) 41 Cal.4th 644, 656, fn. 7; 
                                              
1  
The court granted the petition insofar as the trial court permitted a jury trial 
on the Board‟s cross-complaint seeking to recover a penalty from the estate.  
Gonzales does not challenge that ruling. 
2  
Revenue and Taxation Code section 19382 provides:  “Except as provided 
in Section 19385, after payment of the tax and denial by the Franchise Tax Board 
of a claim for refund, any taxpayer claiming that the tax computed and assessed is 
void in whole or in part may bring an action, upon the grounds set forth in that 
claim for refund, against the Franchise Tax Board for the recovery of the whole or 
any part of the amount paid.” 
 
Gonzales filed his complaint under Revenue and Taxation Code section 
19385, which provides that if the Board fails to mail a notice of action on a refund 
claim within six months, a taxpayer may consider the claim disallowed and sue for 
a refund. 
 
3 
 
Crouchman v. Superior Court (1988) 45 Cal.3d 1167, 1173-1174; People v. One 
1941 Chevrolet Coupe (1951) 37 Cal.2d 283, 286-287.) 
 
“As a general proposition, „[T]he jury trial is a matter of right in a civil 
action at law, but not in equity.‟  [Citations.]”  (C & K Engineering Contractors v. 
Amber Steel Co., supra, 23 Cal.3d at p. 8.)  “[I]f the action is essentially one in 
equity and the relief sought „depends upon the application of equitable doctrines,‟ 
the parties are not entitled to a jury trial.”  (Id. at p. 9.)  And “if a proceeding 
otherwise identifiable in some sense as a „civil action at law‟ did not entail a right 
to jury trial under the common law of 1850, then the modern California 
counterpart of that proceeding will not entail a constitutional right to trial by jury.  
[Citations.]”   (Crouchman v. Superior Court, supra, 45 Cal.3d at p. 1174.)3    
 
 We have explained that if the action deals with “ „ordinary common-law 
rights cognizable in courts of law, it is to that extent an action at law.  In 
determining whether the action was one triable by a jury at common law, the court 
is not bound by the form of the action but rather by the nature of the rights 
involved and the facts of the particular case — the gist of the action.  A jury trial 
must be granted where the gist of the action is legal, where the action is in reality 
cognizable at law.  [¶]  . . . The constitutional right of trial by jury is not to be 
narrowly construed.  It is not limited strictly to those cases in which it existed 
                                              
3  
Code of Civil Procedure section 592 states:  “In actions for the recovery of 
specific, real, or personal property, with or without damages, or for money 
claimed as due upon contract, or as damages for breach of contract, or for injuries, 
an issue of fact must be tried by a jury . . . .”  This statutory jury trial provision, 
like our state constitutional guarantee, “is historically based and does not expand 
the jury trial right beyond its common law scope.  [Citations.]  Accordingly, 
section 592 provides no independent basis for a right to a jury . . . .”  (Corder v. 
Corder, supra, 41 Cal.4th at p. 656.) 
 
4 
 
before the adoption of the Constitution but is extended to cases of like nature as 
may afterwards arise.  It embraces cases of the same class thereafter arising.‟ ”  
(People v. One 1941 Chevrolet Coupe, supra, 37 Cal.2d at pp. 299-300, fn. 
omitted.) 
 
Here, the Court of Appeal reasoned that the “gist” of a claim for a tax 
refund is legal.  The plaintiff seeks monetary relief, and the proceeding is “in the 
nature of an action in assumpsit” (Northrop Aircraft v. Cal. Emp. etc. Com. (1948) 
32 Cal.2d 872, 879), a common law form of action at law (Jogani v. Superior 
Court (2008) 165 Cal.App.4th 901, 906-907).  The court was persuaded by the 
rationale of United States v. State of N. M. (10th Cir. 1981) 642 F.2d 397 (New 
Mexico), where the Tenth Circuit Court of Appeals observed that jury trials were 
available at common law in actions against tax collectors to recover illegally 
exacted taxes.  Accordingly, the New Mexico court concluded that “the right of a 
taxpayer to a jury trial in refund cases is rooted in the common law and was 
preserved by the Seventh Amendment.”  (Id. at p. 401; see also Department of 
Revenue v. Printing House (Fla. 1994) 644 So.2d 498, 500 [following New Mexico 
and recognizing state constitutional right to jury trial in statutory tax refund 
actions].) 
 
The Court of Appeal‟s reasoning is not without support.  A tax refund 
action is legal rather than equitable in character.  And in England and early 
America, common law actions for refunds were brought against officers who 
 
5 
 
collected taxes and duties, though in some cases recovery was limited to amounts 
assessed without jurisdiction and did not extend to overcharges.4 
 
However, it is a general proposition, not an absolute rule, that the right to a 
jury trial attaches when the “gist” of the action is legal.  (C & K Engineering 
Contractors v. Amber Steel Co., supra, 23 Cal.3d at p. 8.)  The “gist” test does not 
apply in administrative proceedings.  (McHugh v. Santa Monica Rent Control Bd. 
(1989) 49 Cal.3d 348, 379-380.)  We have also held that the legal nature of small 
claims actions does not bring with it the right to a jury trial.  (Crouchman v. 
Superior Court, supra, 45 Cal.3d at p. 1175.)  And in Sonleitner v. Superior Court 
(1958) 158 Cal.App.2d 258, the court ruled that a jury trial was not available in a 
tax collection proceeding, even though the proceeding was statutorily designated 
“an action at law.”  Observing that the statutory proceeding was not equivalent to 
a common law debt collection action (id. at p. 261), the Sonleitner court noted that 
“the test is whether the gist of the action is legal in a common law context” (id. at 
p. 262, italics added).  We look to whether a claim arising under a modern statute 
is “of like nature” or “of the same class” as a common law right of action.  (People 
v. One 1941 Chevrolet Coupe, supra, 37 Cal.2d at p. 300.) 
                                              
4  
See, e.g., Whitbread v. Brooksbank (K.B. 1774) 98 Eng. Rep. 970, 972 (no 
action for overpayment); Camplin v. Bullman (Exch. 1761) 145 Eng. Rep. 755, 
756; Stevenson v. Mortimer (K.B. 1778) 98 Eng. Rep. 1372, 1373 (refund of 
overpayment permitted); Elliott v. Swartwout (1836) 35 U.S. 137, 156-158; 
Hearsey v. Pruyn (N.Y. Sup.Ct. 1810) 7 Johns. 179, 182; Torrey v. Millbury 
(1838) 38 Mass. 64, 70; Kirst, Administrative Penalties and the Civil Jury:  The 
Supreme Court’s Assault on the Seventh Amendment (1978) 126 U.Pa. L.Rev. 
1281, 1313 et seq.; Plumb, Tax Refund Suits Against Collectors of Internal 
Revenue (1947) 60 Harv. L.Rev. 685, footnote 2 (Plumb). 
 
6 
 
 
Notwithstanding the Tenth Circuit‟s opinion in New Mexico, supra, 642 
F.2d at pages 400-401, statutory actions for tax refunds from the government have 
generally not been placed in the same class as the common law right of action 
against individual tax collectors.  Most courts have viewed actions for a refund 
from the government as new and distinct proceedings, subject to such conditions 
as the legislative branch sees fit to impose.  At common law, sovereign immunity 
barred actions against the government, by way of jury trial or otherwise.  (People 
v. Superior Court (Pierpont) (1947) 29 Cal.2d 754, 756; Galloway v. United States 
(1943) 319 U.S. 372, 388; 5 Witkin, Summary of Cal. Law (10th ed. 2005) Torts, 
§§ 203, 210, pp. 343-344, 354-355.)  The right to a jury trial provided by the 
Seventh Amendment to the United States Constitution does not apply in statutory 
actions against the federal government.  (Lehman v. Nakshian (1981) 453 U.S. 
156, 160-161.) 5  That rule applies in tax refund actions.  (Wickwire v. Reinecke 
(1927) 275 U.S. 101, 105 (Wickwire). 6   Several states have followed the federal 
                                              
5  
 “In suits at common law, where the value in controversy shall exceed 
twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a 
jury shall be otherwise reexamined in any court of the United States, than 
according to the rules of the common law.”  (U.S. Const., 7th Amend.)  “Like the 
state constitutional provision, the Seventh Amendment merely „preserves‟ the 
common law right to jury trial and does not create a new or broader right.”  
(McHugh v. Santa Monica Rent Control Bd. (1989) 49 Cal.3d 348, 381, fn. 54; see 
Monterey v. Del Monte Dunes at Monterey, Ltd. (1999) 526 U.S. 687, 708-709; 
Granfinanciera, S. A. v. Nordberg (1989) 492 U.S. 33, 42; DiPirro v. Bondo Corp. 
(2007) 153 Cal.App.4th 150, 180 [citing federal cases]; but see Jehl v. Southern 
Pac. Co. (1967) 66 Cal.2d 821, 827.) 
6  
The New Mexico opinion did not acknowledge the contrary rule stated in 
Wickwire, supra, 275 U.S. at page 105, to the effect that the right to a jury trial in 
a tax refund case “is not to be found in the Seventh Amendment.”  The Court of 
Appeal below suggested this statement in Wickwire was dictum.  However, the 
Wickwire rule is settled law, and consistent with the general rule that the Seventh 
 
(footnote continued on next page) 
 
 
7 
 
example and refused to recognize a state constitutional right to a jury trial in tax 
refund cases.  (Coeur D’Alene Lakeshore v. Kootenai County (Idaho 1983) 661 
P.2d 756, 762; C. W. Matthews Contracting Co. v. S. C. Tax Comn. (S.C. 1976) 
230 S.E.2d 223, 226; Dexter Horton Bldg. Co. v. King County (Wn. 1941) 116 
P.2d 507, 511; see also Jernigan v. Jackson (Tenn. 1986) 704 S.W.2d 308, 309 
[rejecting claim of right to jury trial without reference to federal law].) 
 
Before we examine California‟s experience with common law and statutory 
refund actions, we briefly review the development of federal procedure in this 
area, which shows that the common law right of action was effectively superseded 
by statute well before California‟s statehood.  The United States Supreme Court 
first recognized the right to seek refunds from tax collectors in 1836, when it ruled 
that collectors of customs duties were personally liable for illegal assessments 
even if they had transferred the money to the treasury.  (Elliott v. Swartwout, 
                                                                                                                                      
 
(footnote continued from previous page) 
 
Amendment has no application in suits against the federal government.  (See 
Phillips v. Commissioner (1931) 283 U.S. 589, 599, fn. 9; Lehman v. Nakshian, 
supra, 453 U.S. at pp. 160-161; 20A Federal Procedure L.Ed. (2009) § 48:1395, p. 
426; 8 Moore‟s Federal Practice (3d ed. 2007) § 38.40[2][a] & [f].)  While a jury 
trial is currently available as a matter of statute in a federal district court action for 
a tax refund (28 U.S.C. §§ 1346(a)(1) & 2402), there is no right to a jury trial in 
tax refund actions in the Court of Claims (Malajalian v. United States (1st Cir. 
1974) 504 F.2d 842, 844, fn. 1), or in tax contests in district court, even when the 
taxpayer is required to deposit the contested amount with the Internal Revenue 
Service (Thomas v. U. S. (E.D.Mo. 1988) 695 F.Supp. 1021, 1022-1023). 
 
The Tenth Circuit‟s view that the Seventh Amendment applies in tax refund 
cases must be deemed overly broad; it arose in an unusual case where the federal 
government brought a nonstatutory action against a state to recover a tax payment 
that had been passed along by a federal contractor.  (New Mexico, supra, 642 F.2d 
at pp. 398-399.) 
 
 
 
8 
 
supra, 35 U.S. 137, 159.)  However, the claim permitted in Elliott “had, as a 
strictly common law action, a short and unhappy life.”  (Plumb, supra, 60 Harv. 
L.Rev. at p. 688.)  Collectors asserted the right to withhold disputed payments, 
which “led to great abuses, and to much loss to the public.”  (Cary v. Curtis (1845) 
44 U.S. 236, 243.)  Three years after the Elliott decision, Congress enacted 
legislation requiring customs duties paid under protest to be transferred to the 
treasury, and authorizing the Secretary of the Treasury to make refunds.  (Act of 
Mar. 3, 1839, § 2, 5 Stat. 339, 348); see Plumb, supra, 60 Harv. L.Rev. at p. 689.)  
The Supreme Court decided that this statutory remedy had replaced the common 
law right of action against collectors, and also that the new administrative remedy 
was not subject to judicial review.  (Cary v. Curtis, supra, 44 U.S. at pp. 243-244.) 
 
Congress again responded with legislation, explaining that the 1839 statute 
had not been intended to impair the right of action against a collector of customs, 
including the right to a trial by jury.  (Act of Feb. 26, 1845, 5 Stat. 727.)  No 
similar legislation covered internal revenue collectors, who were also required to 
turn tax payments over to the treasury regardless of protest by the taxpayer.  In 
1866, however, the Supreme Court held that a right of action against internal 
revenue collectors had been recognized by implication in a number of statutes.  
(City of Philadelphia v. The Collector (1866) 72 U.S. 720, 731-732; see Plumb, 
supra, 60 Harv. L.Rev. at p. 689.)  “The action against the collector, therefore, was 
no longer a common law but a new statutory action, subject to such restrictions as 
Congress might provide.”  (Plumb, at pp. 690-691.) 
 
Accordingly, in 1927 the Wickwire court had ample support for its 
conclusion that “[i]t is within the undoubted power  of Congress to provide any 
reasonable system for the collection of taxes and the recovery of them when 
illegal, without a jury trial.”  (Wickwire, supra, 275 U.S. at pp. 105-106, citing 
 
9 
 
Murray’s Lessee v. Hoboken Land and Improvement Co. (1856) 59 U.S. 272, 283-
284 [while customs collectors and the government “are exempt from suit, for 
anything done by the former in obedience to legal process, still, congress may 
provide by law, that both, or either, shall, in a particular class of cases, and under 
such restrictions as they may think proper to impose, come into a court of law or 
equity and abide by its determination”]; Nichols v. United States (1869) 74 U.S. 
122, 127 [allowing actions for refunds of customs duties “was an act of 
beneficence on the part of the government . . . so it could have made [the Secretary 
of the Treasury] the final arbiter in all disputes concerning the same”]; and 
Cheatham v. United States (1876) 92 U.S. 85, 89 [in tax refund actions “the 
government has the right to prescribe the conditions on which it will subject itself 
to the judgment of the courts”].) 
 
This court has also taken the view that a statutory action against the state 
for a tax refund is a departure from the common law right of action against tax 
collectors, and a remedy subject to restriction by the Legislature.  The first 
California statute authorizing refund actions was enacted in 1893.  Former 
Political Code section 3819 required a written protest, and provided that “when so 
paid under protest, the payment shall in no case be regarded as a voluntary 
payment, and [the taxpayer] may at any time within six months after such payment 
bring an action against the county, in the Superior Court, to recover back the tax 
. . . .”  (Stats. 1893, ch. 20, § 1, p. 32.)7  The reason for the Legislature‟s 
                                              
7  
The statute required the state to indemnify counties for refunds of taxes that 
had been paid into the state treasury.  (Former Political Code § 3819, Stats. 1893, 
ch. 20, § 1, p. 32.)  In the same year, the Legislature enacted the first statute 
allowing suits against the state, which was limited to contract and negligence 
claims.  (Stats. 1893, ch. 45, p. 57.)  Tax refund actions against the state were not 
 
(footnote continued on next page) 
 
 
10 
 
specification that a payment under protest would not be regarded as voluntary was 
that California courts followed a stringent common law rule forbidding actions for 
tax refunds unless the payment was compelled.  This rule, which has no 
counterpart in the refund statutes, is the primary reason why California courts have 
not regarded statutory refund actions as extensions of the common law. 
 
The relationship between the common law rule and the statutory right to 
seek a refund was examined in Southern Service Co., Ltd. v. Los Angeles (1940) 
15 Cal.2d 1 (Southern Service).  There, a county sought dismissal of a refund 
action that was pending on appeal.  The county relied on a newly enacted statute 
that barred statutory refund claims under certain circumstances and specified:  
“ „For the purposes of this section, the mere payment of a tax under protest shall 
not be deemed to constitute . . . an involuntary payment.‟ ”  (Id. at p. 6.)  The 
Southern Service court observed that the effect of the statute “was to cut off the 
remedy to the plaintiff and to terminate the action herein unless the plaintiff had a 
vested property interest in or a contractual right to recover the claimed excessive 
portion of the taxes so paid.”  (Id. at p. 7.) 
 
The court continued:  “It is the settled law of this state that illegal taxes 
voluntarily paid may not be recovered by the taxpayer in the absence of a statute 
permitting a refund thereof; and in the absence of such statute only illegal taxes 
paid under duress, coercion or compulsion are considered to have been 
                                                                                                                                      
 
(footnote continued from previous page) 
 
authorized until a later date.  (See Stats. 1929, ch. 13, § 30, p. 31.)  For our 
purposes of comparing the nature of the common law and statutory actions for tax 
refunds, the distinction between actions against counties and those against the state 
is inconsequential. 
 
11 
 
involuntarily paid and therefore recoverable.  (Brumagim v. Tillinghast [(1861)] 
18 Cal. 265, 269, 271; Grimes v. County of Merced [(1928)] 96 Cal.App. 76, 81-
83; Maxwell v. San Luis Obispo County [(1886)] 71 Cal. 466.[8]  See, also, Brandt 
v. Riley [(1934)] 139 Cal.App. 250, and cases hereinafter cited.)”  (Southern 
Service, supra, 15 Cal.2d at p. 7, italics added.) 
 
“The plaintiff concedes that the common law as to what constitutes an 
involuntary payment is the rule for the guidance of this court in determining 
whether the payment of the tax herein was voluntary  or involuntary.  The 
presence or absence of a written protest does not appear to be the distinguishing 
feature.  That is, if the taxes were paid involuntarily, namely, „by means which 
amount to duress or coercion, they may be reclaimed . . . without proof that they 
were paid under protest.‟  (Brandt v. Riley, supra, [139 Cal.App.] at page 253 
. . . .)  On the other hand it has also been held that the filing of a protest with a 
payment of illegal taxes otherwise voluntarily made does not deprive the payment 
of its voluntary character.  (Brumagim v. Tillinghast, supra, [18 Cal.] at page 275; 
                                              
8  
It is not clear why the county, as opposed to the tax collector, was named as 
defendant in the Maxwell case, which predated the statutes permitting direct 
refund actions against counties.  In another early case against a county, relief was 
sought under former Political Code section 3804, which provided that county 
boards of supervisors “may” refund taxes that were erroneously assessed.  
(Younger v. Board of Supervisors (1885) 68 Cal. 241, 242-243.)  The court held 
that the board‟s denial of the plaintiff‟s claim was not subject to judicial review.  
(Id. at p. 243.)  Beginning in 1893, however, the statutory term “may” was 
construed to mean “must,” allowing taxpayers to pursue a judicial remedy.  (Hayes 
v. County of Los Angeles (1893) 99 Cal. 74, 78-80; Stewart Etc. Co. v. County of 
Alameda (1904) 142 Cal. 660, 661-664.)  The courts distinguished this statutory 
avenue of relief from the common law right of action for a tax refund, with its bar 
against recovery of “voluntary” payments.  (Stewart, at pp. 662-663; see Southern 
Service, supra, 15 Cal.2d at pp. 9-10.) 
 
12 
 
Bucknall v. Story [(1873)] 46 Cal. 589; Bank of Woodland v. Webber ([1877)] 52 
Cal. 73; Merrill v. Austin [(1879)] 53 Cal. 379; Dear v. Varnum [(1889)] 80 Cal. 
86, 89; Justice v. Robinson [(1904)] 142 Cal. 199; Warren v. City and County of 
San Francisco [(1907)] 150 Cal. 167; see, also, Meek v. McClure [(1875)] 49 Cal. 
623.)”  (Southern Service, supra, 15 Cal.2d at pp. 7-8.) 
 
The court reviewed a number of cases demonstrating that California 
common law precluded refunds of tax payments unless they were made under 
compulsion, strictly defined in Brumagim v. Tillinghast as “some actual or 
threatened exercise of power possessed, or supposed to be possessed, by the party 
exacting or receiving the payment over the person or property of the party making 
the payment, from which the latter has no other means of immediate relief than by 
advancing the money.”  (Brumagim v. Tillinghast, supra, 18 Cal. at p. 272; see 
Southern Service, supra, 15 Cal.2d at pp. 8-10.)  It then emphasized that the 
statutes permitting refund actions were a sharp break from the common law rule:  
“The case of Hellman v. City of Los Angeles [(1905)] 147 Cal. 653, recognized 
that the foregoing was the general common-law rule which, however, has been 
abrogated by the adoption of sections 3804 and 3819 of the Political Code so as to 
permit recovery although the payments were voluntary in all those cases coming 
within the provisions of the code sections.  Section 3819 of the Political Code, 
allowing an action to recover a refund of certain taxes paid under protest, was 
involved in the Hellman case.  In that case the court stated that the statute in 
derogation of the common-law rule was „befitting to this more enlightened age.‟ ”  
(Southern Service, supra, 15 Cal.2d at p. 10, quoting Hellman v. City of Los 
Angeles, supra, 147 Cal. at p. 655.) 
 
13 
 
 
The Southern Service court concluded:  “The foregoing discussion and 
review leads to the conclusion that the plaintiff possessed no right or remedy 
pursuant to section 3804 of the Political Code which existed apart from the statute 
itself and which the legislature could not cut off by repeal.  The general 
relationship of sovereign and taxpayer is not founded on nor does it create any 
contractual rights.  (Perry v. Washburn [(1862)] 20 Cal. 318, 350; Spurrier v. 
Neumiller [(1918)] 37 Cal.App. 683.)  A right to a credit or refund of taxes is 
purely statutory.  (Spurrier v. Neumiller, supra; Bell v. County of Los Angeles 
[(1928)] 90 Cal.App. 602, citing  Brooks v. County of Tulare [(1897)] 117 Cal. 
465.)”  (Southern Service, supra, 15 Cal.2d at p. 11.)9 
 
The discussion in Southern Service undermines the Court of Appeal‟s 
conclusion that a statutory refund action occupies the “same class” as the common 
law right of action against a tax collector.  (People v. One 1941 Chevrolet Coupe, 
supra, 37 Cal.2d at p. 300.)  Under our modern refund statutes, whether a tax 
payment was voluntary or involuntary is irrelevant.  A taxpayer may seek a refund 
even without protesting the payment.  This is a far cry from the common law right 
of action reviewed in Southern Service, which extended only to payments 
extracted under compulsion.10  The Court of Appeal reasoned that Gonzales‟s 
                                              
9  
The court noted, however, that the Legislature‟s repeal did not affect “the 
common-law right to a refund of taxes involuntarily paid.”  (Southern Service, 
supra, 15 Cal.2d at p. 12.) 
10  
Of course, in a sense all tax payments are “compelled” by law.  But the bar 
for demonstrating compulsion as an element of the common law refund action was 
extraordinarily high.  Even a threat by the collector to sell the taxpayer‟s property 
was insufficient, if the conveyance would not result in a cloud on the title.  “The 
payment of a tax to prevent a threatened sale of real estate is not compulsory, 
unless the conveyance by the officer will have the effect to deprive the owner of 
 
(footnote continued on next page) 
 
 
14 
 
notice to the state that he intended to seek a refund would have made his payment 
of additional taxes under the amnesty program “involuntary” for purposes of the 
common law.  This view is inconsistent with California law.11  It is also beside the 
point, because an involuntary payment is not required under the refund statutes 
authorizing Gonzales‟s claim.  The absence of this element clearly distinguishes 
the statutory proceeding from the common law action.  Indeed, even the early tax 
refund statutes, which required a payment under protest, were such a significant 
relaxation of the earlier rule that they were deemed an abrogation of the common 
law, not a continuation of it.  (Southern Service, supra, 15 Cal.2d at p. 10; 
Hellman v. City of Los Angeles, supra, 147 Cal. at p. 655.) 
 
Statutory tax refund actions have been compared for some purposes to the 
common law writ of assumpsit, which was rooted in contract or quasi-contract.  
(Northrop Aircraft v. Cal. Emp. etc. Com., supra, 32 Cal.2d at pp. 879-880 [noting 
that refund action is akin to assumpsit but declining to apply common law 
remedial principles]; Jogani v. Superior Court, supra, 165 Cal.App.4th at pp. 905-
907 [discussing contractual character of assumpsit]; see also City of Philadelphia 
                                                                                                                                      
 
(footnote continued from previous page) 
 
some defense to the tax, or throw upon him the burden of showing its illegality.  If 
the officer‟s want of authority will appear upon the face of the deed, or if the 
illegality of the proceedings will necessarily appear in any attempt by the 
purchaser to disturb the owner in the possession of the land, a payment to prevent 
such sale is not made under duress.”  (Phelan v. San Francisco (1898) 120 Cal. 1, 
5, discussing the common law liability of tax collectors.) 
11  
Southern Service makes it clear that a protest “does not deprive the 
payment of its voluntary character.”  (Southern Service, supra, 15 Cal.2d at p. 8.)  
A more lenient rule appears in federal cases, where a payment under protest was 
considered involuntary.  (City of Philadelphia v. The Collector, supra, 72 U.S. 
720, 731-732; Elliott v. Swartwout, supra, 35 U.S. at p. 153.)  
 
15 
 
v. The Collector, supra, 72 U.S. 720, 731 [appropriate remedy to recover taxes 
erroneously or illegally assessed is “an action of assumpsit for money had and 
received”].)  The Southern Service court, however, held that the statutory cause of 
action for a tax refund is a purely legislative creation, with no foundation in 
contract.  (Southern Service, supra, 15 Cal.2d at p. 11.)  This settled proposition 
supports the conclusion that the statutory right of action occupies a different class 
from the common law form of action in which a jury trial was available.  (See 
People v. Union Oil Co. (1957) 48 Cal.2d 476, 481; Kuykendall v. State Bd. of 
Equalization (1994) 22 Cal.App.4th 1194, 1214, fn. 27.) 
 
We long ago recognized the distinct character of tax proceedings in the 
context of tax collection:  “The state through its legislature can avail itself of the 
judicial power as the means by which it will collect the tax, and in such 
proceedings it may prescribe such procedure as may best avail for that purpose, 
irrespective of the mode of procedure provided for the determination of 
controversies between individuals . . . .  Although the tax is an obligation from the 
citizen to the state, it is not of the same character of obligation as exists between 
citizens, and for the purposes of its collection the state is not limited to the same 
mode or to the same procedure which it prescribes for individuals in the collection 
of obligations between themselves.”  (People v. Central Pacific R. R. Co. (1895) 
105 Cal. 576, 589; accord, Sonleitner v. Superior Court, supra, 158 Cal.App.2d at 
pp. 261-262; see also Hagar v. Board of Supervisors of Yolo County (1874) 47 
Cal. 222, 234 [“the right of trial by jury, has no application to proceedings for the 
collection of taxes”].) 
 
The same general principles apply to the tax refund statutes.  The statutory 
cause of action is fundamentally different in character from the old private right of 
action against tax collectors.  This is not an instance where the Legislature 
 
16 
 
authorized “ „the type of action which was cognizable in a common-law court 
. . . at the time of the adoption of the Constitution of California.‟ ”  (People v. One 
1941 Chevrolet Coupe, supra, 37 Cal.2d at p. 300.)  Although “ „[t]he 
constitutional right of trial by jury is not to be narrowly construed‟ ” (ibid.), the 
distinctions between the common law and statutory rights of action for a tax 
refund are broad.12  Moreover, California‟s Constitution took effect at a time when 
the federal right to seek a tax refund had evolved into a statutory one, subject to 
congressional restriction in its particulars, including the right to a jury trial.  We 
conclude that article I, section 16 of the California Constitution does not require a 
jury trial in a statutory action for a state income tax refund. 
                                              
12  
The Court of Appeal relied on a concurring opinion in Blanton v. 
Womancare, Inc. (1985) 38 Cal.3d 396, 411, for the proposition that in cases of 
doubt, a litigant‟s right to trial by jury must be preserved.  We have followed this 
approach in cases, like Blanton, that involve waiver of the right to a jury trial.  
(See Grafton Partners v. Superior Court (2005) 36 Cal.4th 944, 956.)  However, 
when the issue is whether the right to a jury exists at all in a particular kind of 
action, we are guided by a different body of case law, mindful that the right is not 
to be narrowly construed. 
 
17 
 
 
DISPOSITION 
 
We reverse the Court of Appeal‟s judgment.  
 
 
 
 
 
 
 
 
 
 
CORRIGAN, J. 
WE CONCUR: 
 
CANTIL-SAKAUYE, C. J. 
KENNARD, J. 
BAXTER, J. 
WERDEGAR, J. 
CHIN, J. 
YEGAN, J.  
 
 
 
 
 
 
 
 
                                              
  
Associate Justice, Court of Appeal, Second Appellate District, Division 
Six, assigned by the Chief Justice pursuant to article VI, section 6 of the California 
Constitution.   
 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Franchise Tax Board v. Superior Court 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 177 Cal.App.4th 36 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S176943 
Date Filed: June 6, 2011 
__________________________________________________________________________________ 
 
Court: Superior 
County: San Francisco 
Judge: John Kennedy Stewart 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Edmund G. Brown, Jr., and Kamala G. Harris, Attorneys General, David S. Chaney, Chief Assistant 
Attorney General, Gordon Burns, Deputy State Solicitor General, Paul D. Gifford, Assistant Attorney 
General, William L. Carter and Jeffrey A. Rich, Deputy Attorneys General, for Petitioner. 
 
No appearance for Respondent. 
 
Martin A. Schainbaum and Bryant W. H. Smith for Real Party in Interest and Respondent. 
 
 
 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Jeffrey A. Rich 
Deputy Attorney General 
1300 I Street, Suite 1300 
Sacramento, CA  94244-2550 
(916) 324-5154 
 
Martin A. Schainbaum 
351 California Street, Suite 800 
San Francisco, CA  94104-2406 
(415) 777-1040