Court Opinion

ID: 4647984
Source: CourtListenerOpinion
Date Created: 2020-12-30 20:01:52.215251+00
Date Added: 2024-06-11T08:01:10.156592
License: Public Domain

Filed 12/30/20 Michalak v. County of Calaveras CA3
                                           NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

                IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                      THIRD APPELLATE DISTRICT
                                                      (Calaveras)
                                                            ----

 MATTHEW MICHALAK et al.,                                                                      C088001

                    Plaintiffs and Appellants,                                   (Super. Ct. No. 18CV43075)

           v.

 COUNTY OF CALAVERAS et al.,

                    Defendants and Respondents;

 BARBARA SULLIVAN, as Tax Collector, etc.,

                    Real Party in Interest and Respondent.

         Petitioners Matthew Michalak and Mark Flanagan applied to register as authorized
marijuana cultivators in Calaveras County pursuant to a county ordinance. While their
applications were pending, the County of Calaveras Assessor’s Office issued a tax
assessment pursuant to the county’s authority to tax registrants for the privilege to
cultivate marijuana. Petitioners appealed the assessments, arguing they did not cultivate

                                                             1
marijuana on the parcels and were told by the county that their applications to do so were
going to be denied. A county hearing officer upheld the assessment.
       Petitioners filed a petition for writ of mandate and complaint for declaratory relief
in the superior court. Respondents County of Calaveras (County) and Calaveras County
Office of Administrative Hearings (OAH) demurred on the basis that petitioners failed to
pay the tax assessment and request a refund. The trial court agreed and granted
respondents’ demurrer without leave to amend.
       On appeal, petitioners claim the trial court erred in granting respondents’
demurrer. Petitioners assert (1) the requirement that they pay the tax and file a refund
action before seeking judicial relief applies only to state taxes, not local taxes; (2)
respondents must be equitably estopped from invoking the “pay first, litigate later” rule
because it expressly consented to petitioners’ petition for writ of administrative mandate;
(3) their complaint for declaratory relief should have survived demurrer; and (4) federal
law preempts the County’s ordinances regarding marijuana cultivation.
       After initial briefing was complete, we ordered supplemental briefing on several
issues, which we detail when necessary to our discussion below.1

1 We ordered supplemental briefing on January 15, 2020, due on February 14; counsel
Hugo Torbet immediately requested a continuance which we granted to March 23 with
the notation that no further time would be granted. We then granted a second lengthy
continuance (requested on March 16) to June 22, noting again that no further time would
be granted. On June 15, counsel moved for yet another 90-day continuance, to which
respondents filed opposition; we denied the request. Mr. Torbet then submitted his
supplemental brief, which opened with a tirade captioned as an “Objection.” This tirade
includes, as but one example, Mr. Torbet’s opinion that “there is no good reason why the
law libraries are closed, except that in the end, the courts have become complicit in the
relentless march towards the effective repeal of the Bill of Rights, freedom being the
ultimate friction on profit taking. Denial of equal access to the courts is merely part and
parcel of the process in which the actors in our captured government are betraying the
Constitution and the oaths many of them have taken. If this weren’t true, the Courts
would open online research to the public to aid in the guarantee of the right of the people
to equal justice.” An order to brief additional questions as assigned by this court is not an

                                               2
       As we explain, we conclude that because the applicable code section did not
require payment of the disputed tax, and petitioners lack an adequate remedy at law,
petitioners were not required to pay the tax before petitioning for writ of mandate in the
superior court. We agree, however, that the trial court properly sustained the demurrer
regarding petitioners’ complaint for declaratory relief. Because we reverse the superior
court’s sustaining of the County’s demurrer with respect to the petition for writ of
mandate, we do not address petitioners’ remaining claims.
                  FACTUAL AND PROCEDURAL BACKGROUND
       Statutory Scheme
       On May 10, 2016, the Calaveras County Board of Supervisors passed and adopted
an ordinance adding former chapter 17.95 to the Calaveras County Code.2 Section
17.95.165 required anyone currently cultivating or intending to cultivate cannabis to
register with the county planning department. Upon submitting a complete application
for registration, the planning department issued an “Application Pending” document
pending verification. (Id., subd. (C).) Once the planning department determined the
application met the registration criteria, it issued a “Certificate of Registration.” (Ibid.)
       On November 8, 2016, the voters of Calaveras County passed Measure C, which
added chapter 3.56 to the County Code. Section 3.56.030, subdivision (A) provided in
part: “The board of supervisors may impose a tax on the privilege of cultivating,

open invitation to spew vitriol and baseless allegations. Given the stress of the ongoing
COVID-19 pandemic and trusting that Mr. Torbet’s lapse in professionalism is merely a
one-time consequence thereof, we have chosen to disregard his unprofessional screed.
2  Further undesignated statutory references are to the Calaveras County Code. On
January 10, 2018, the board of supervisors repealed the marijuana cultivation ordinance
and enacted the current chapter 17.95, which prohibits to the maximum extent permitted
by state law the cultivation, manufacture, testing, distribution, transportation, and storage
of cannabis. The events relevant to this opinion occurred before the repeal of former
chapter 17.95, and all references to the chapter in this opinion are to the version in place
at the time.

                                               3
manufacturing, processing, donating, selling, delivering or distributing cannabis, or
manufacturing, processing, donating, selling, delivering or distributing medical cannabis
or a medical cannabis by-product by a licensee legally operating within the county . . . .”
Subdivision (B) of that section imposed a tax of “[t]wo dollars per square foot of
registered or permitted canopy area.”
       Section 3.56.130 described the procedure by which aggrieved taxpayers could
challenge assessed taxes. It allowed for the taxpayer to appeal to a county hearing officer
authorized by the board of supervisors. (Id., subd. (C).) Section 3.56.130, subdivision
(C)(5) provided that the hearing officer shall issue quasi-adjudicatory findings within 30
days of the conclusion of the hearing, which “shall be final and binding.”
       Section 3.56.130, subdivision (C)(6) provided: “Any amount determined to be
due shall be due and payable immediately upon the decision of the [hearing officer]. Said
determination shall be the final level of administrative appeal. The finding shall also
notify appellant of further rights to appeal under the Code of Civil Procedure.”
       Section 3.56.150, subdivision (A) stated that a tax payment “may be refunded as
provided in subsection (b) of this section; provided a written claim, stating under penalty
of perjury the specific grounds upon which the claim is founded, is filed with the tax
collector within three years of the date of payment.” Subdivision (B), referenced by
subdivision (A),3 provided: “A person licensed to engage in commercial cannabis
activity may claim a refund or take as credit against taxes collected and remitted any
amount overpaid when it is established, in a manner prescribed by the tax collector, that a
refund is due.”

3 Subdivision (A) refers to “subsection (b),” not “subsection (B),” but in the absence of a
“subsection (b),” we presume the reference to “subsection (b)” is actually to “subsection
(B).”

                                             4
        Factual Background
        The following facts are alleged in petitioners’ petition for writ of administrative
mandate and complaint for declaratory relief. In reviewing an order sustaining a
demurrer, we assume the factual allegations properly pleaded to be true. (Committee for
Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal. 4th 32, 42.)
        Petitioners own two parcels of real estate in Calaveras County. In May and June
2016, petitioners filed applications to register each parcel as a medical cannabis
cultivation facility. In April 2017 the County sent an authorized code compliance officer
to inspect both facilities for compliance with applicable codes. The officer informed
petitioners that their applications would not be approved due to code violations. The
officer also lodged reports with the county planning department documenting code
violations and recommending that the applications be denied. The County never issued
petitioners certificates of registration for the subject properties and “eventually” denied
their applications.4 Petitioners did not cultivate commercial cannabis on their properties.
        In May 2017 the planning department sent a list of properties with pending
applications or certificates of registration to the assessor’s office. Petitioners each
received a tax bill as their applications were pending at the time of the assessment.
Petitioners received a $10,000 tax bill related to each property, which was the first of two
installments. Petitioners informed the County they were not cultivating marijuana on
their properties and invited the County to inspect the properties. The County informed
petitioners that they failed to show that no cultivation occurred, and the tax was based on
their applications; consequently, it would not decrease or withdraw the tax assessment.

4   The petition does not assert when this denial occurred.

                                              5
       Administrative Appeal History
       Petitioners appealed their tax assessments to a neutral hearing officer retained by
the OAH. (§ 3.56.130, subd. (C).) As required by the ordinance, the hearing officer held
a hearing, petitioners offered evidence, and the hearing officer issued a final
administrative order upholding the tax assessment. The order rejected petitioners’
argument that the tax does not apply because they did not cultivate cannabis; the order
concluded section 3.56.030, subdivision (A) provides the tax is for the authorization to
engage in cannabis cultivation, not for the proceeds of cultivation. Next, the hearing
officer rejected petitioners’ argument that the tax can only be applied to a completed
registration, concluding the code permits taxing applications that are pending but have
not yet been approved. Then the order rejected petitioners’ argument that the tax should
not apply because the code compliance officer informed them of code violations; the
order observed the code compliance officer did not have authority to deny petitioners’
applications and could only inform the planning department of violations. The order
noted that petitioners failed to contact the planning department to ascertain the status of
their applications, which would have clarified any ambiguity, or withdraw their
applications, which would have prevented the tax from being assessed.
       The order concluded, “[Petitioners] must pay the fines and penalties. . . . [¶]
[Petitioners] SHALL pay the Calaveras County Tax Collector the sum of $12,100 each
for Mr. Flanagan and Mr. Michalak,” which included $10,000 for the assessment and
$2,100 in penalties. The order notified petitioners of their right to appeal: “You may
challenge this order by filing a writ of mandate pursuant to California Code of Civil
Procedure §§ 1094.5 and 1094.6 in the Calaveras County Superior Court within 90 days
of the service of this order. You may challenge the decision imposing/modifying the
penalty by filing an appeal, pursuant to Government Code § 53069.4(b) within 20 days of
service of this decision.”

                                              6
       Petitioners neither paid the tax nor requested a refund of taxes paid pursuant to
section 3.56.150.
       Procedural History
       In February 2018 petitioners jointly filed a petition for writ of mandate and
complaint for declaratory relief in superior court. The petition for writ of mandate
asserted the hearing officer’s decision was legally erroneous, that the hearing officer
proceeding without, or in excess of, jurisdiction, failed to provide a fair trial, and
prejudicially abused his discretion. The petition further asserted petitioners had
exhausted their administrative remedies, did not have an adequate remedy at law, and the
County consented to review of the decision pursuant to a writ of mandate.
       Petitioners’ complaint for declaratory relief included a request “that the court issue
a declaratory judgment that respondent County of Calaveras and real party in interest
Barbara Sullivan may tax only lawful commercial cannabis cultivation, that commercial
cannabis cultivation is lawful only if a Certificate of Registration has been issued, and
that an applicant or registrant has the right to amend a registration form to include the
true information about the plot size dedicated to commercial cannabis cultivation, which
amended registration form will then serve as the basis for the tax computation.”
       Respondents demurred to the petition and complaint. They argued petitioners
were barred from challenging the tax assessments by the “pay first, litigate later” rule,
and petitioners failed to plead facts sufficient to constitute any cause of action.
       The trial court sustained respondents’ demurrer without leave to amend. The court
disagreed with the County that the petition failed to plead facts constituting a cause of
action, concluding the arguments raised by the County extended beyond the allegations in
the pleading and were premature in the context of a demurrer. However, the court agreed
with the County that petitioners failed to exhaust their administrative remedies by paying
the tax, filing a claim for refund, and if denied, suing for refund of the taxes paid.
Accordingly, the court granted the County’s demurrer on that basis.

                                               7
                                       DISCUSSION
                                               I
                                     Standard of Review
       On appeal from a dismissal entered after an order sustaining a demurrer to a
petition for writ of mandate, we review the order de novo, determining independently
whether the petition states a cause of action as a matter of law. (City of Morgan Hill v.
Bay Area Air Quality Management Dist. (2004) 118 Cal. App. 4th 861, 869.) “We give
the petition a reasonable interpretation, reading it as a whole and viewing its parts in
context. [Citations.] We deem to be true all material facts that were properly pled.
[Citation.] We must also accept as true those facts that may be implied or inferred from
those expressly alleged.” (Ibid.) We also accept as true all recitals of evidentiary facts
contained in exhibits attached to the petition. (Satten v. Webb (2002) 99 Cal. App. 4th
365, 375.) We interpret the petition’s allegations liberally, with a view toward substantial
justice between the parties. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19
Cal. 4th 26, 43, fn. 7.) If the facts alleged by the petitioner state a cause of action under
any possible legal theory, we will order the demurrer overruled. (City of Morgan Hill, at
p. 870.)
                                              II
                              “Pay First, Litigate Later” Rule
       Petitioners contend the “pay first, litigate later” doctrine enshrined in section 32 of
article XIII of the California Constitution does not require them to pay the assessed tax,
request a refund, and sue for a refund.5 We agree the pay first, litigate later rule is
inapplicable here. By its express terms, article XIII, section 32 applies only to actions
against the State or officers thereof, and we decline to apply the pay first rule based

5Further references to article XIII, section 32 are to article XIII, section 32 of the
California Constitution.

                                              8
solely on public policy principles. Further, while the County was not precluded from
including an explicit pay first requirement in its ordinance, provided the requirement
comported with due process, it did not do so, and no statute requires petitioners to pay the
tax before petitioning for a writ of mandate.
       A. Article XIII, Section 32 and Public Policy
       “ ‘A taxpayer ordinarily must pay a tax before commencing a court action to
challenge the collection of the tax. This rule, commonly known as “pay first, litigate
later,” is well established and is based on a public policy reflected in the state
Constitution, several statutes, and numerous court opinions.’ [Citation.] Section 32 [of
art. XIII] provides: ‘No legal or equitable process shall issue in any proceeding in any
court against this State or any officer thereof to prevent or enjoin the collection of any
tax. After payment of a tax claimed to be illegal, an action may be maintained to recover
the tax paid, with interest, in such manner as may be provided by the Legislature.’ This
constitutional provision establishes that ‘the sole legal avenue for resolving tax disputes
is a postpayment refund action. A taxpayer may not go into court and obtain adjudication
of the validity of a tax which is due but not yet paid.’ ” (California Logistics, Inc. v.
State of California (2008) 161 Cal. App. 4th 242, 247.)
       By its express terms, article XIII, section 32 only requires prepayment of taxes
before bringing suits against “this State or any officer thereof,” and therefore the
constitutional provision is not applicable here.6 (See, e.g., Eisley v. Mohan (1948)
31 Cal. 2d 637, 641 [construing former art. XIII, § 15]; Brown v. County of Los Angeles
(1999) 72 Cal. App. 4th 665, 670; Pacific Gas & Electric Co. v. State Bd. of Equalization
(1980) 27 Cal. 3d 277, 281, fn. 6 [art. XIII, § 32 “applies only to actions against the
state”; availability of mandate to review claims against county tax authorities subject to

6 Neither party contends the tax at issue here was assessed by the State or an officer
thereof.

                                                9
statutory test of § 1085]; County of Los Angeles v. Superior Court (2008) 159
Cal. App. 4th 353, 363, fn. 6.].)
       We recognize, however, that article XIII, section 32 is not the genesis of the pay
first, litigate later rule. Rather, the public policy underlying article XIII, section 32 was
established well before its predecessor provision was added to the California Constitution
in 1910: “It is upon taxation that the several States chiefly rely to obtain the means to
carry on their respective governments, and it is of the utmost importance to all of them
that the modes adopted to enforce the taxes levied should be interfered with as little as
possible. Any delay in the proceedings of the officers, upon whom the duty is devolved
of collecting the taxes, may derange the operations of government, and thereby cause
serious detriment to the public.” (Dows v. City of Chicago (1870) 78 U.S. 108, 110.)
While article XIII, section 32 embodies the principle that courts should refrain from
enjoining collection of taxes, the California Supreme Court was enforcing the principle
before the adoption of the predecessor of article XIII, section 32. (Chiatello v. City and
County of San Francisco (2010) 189 Cal. App. 4th 472, 495-496.)
       Accordingly, the County contends the pay first, litigate later rule applies equally to
taxes levied by localities as to those levied by the State. In support, it points to Writers
Guild of America, West, Inc. v. City of Los Angeles (2000) 77 Cal. App. 4th 475 (Writers
Guild), and Flying Dutchman Park, Inc. v. City and County of San Francisco (2001) 93
Cal. App. 4th 1129 (Flying Dutchman). In Writers Guild the Second Appellate District,
Division Two analyzed whether an association of writers was entitled to seek injunctive
and declaratory relief without first paying a tax owed under a local tax ordinance. The
court recognized taxpayers do not have a due process right to prepayment judicial review
of tax liability, and “ ‘[t]the power of a state to provide the remedy of suit to recover
alleged overpayments as the exclusive means of judicial review of tax proceedings has
long been unquestioned.’ ” (Writers Guild, at pp. 480-481.) The appellate court
acknowledged the cases it relied upon all involved California constitutional and statutory

                                              10
prohibitions against granting injunctive relief against the collection of taxes, but it
asserted: “the strong public policy requiring a taxpayer to pay the tax and sue for a
refund is manifest.” (Id. at pp. 481, 483.)
       In Flying Dutchman, supra, 93 Cal. App. 4th 1129, the First Appellate District,
Division Two followed Writers Guild. There, the plaintiff proceeded through the
administrative process established by the relevant municipality to challenge a municipal
parking tax. At the conclusion of that process, the tax became due and payable. Rather
than pay the tax, the plaintiff filed a petition seeking mandamus, injunctive, and
declaratory relief. Disagreeing with the plaintiff’s assertion that the pay first, litigate
later rule applies only to state-imposed taxes, the appellate court concluded that, as a
matter of public policy, the “prepayment requirement for obtaining judicial review
applies equally to local taxes as well as state taxes.” (Id. at p. 1137.)
       While we recognize and agree with the general public policy justification for
maintaining government operations through predictable tax revenue streams and limiting
the ability of taxpayers to impede tax collection, these longstanding public policy
principles are not applicable to the specific situation presented in this case. Critically, in
this case the cannabis cultivation tax was adopted by ballot proposition on November 8,
2016, and the marijuana cultivation scheme was repealed on January 10, 2018, a mere 14
months after the initial adoption of the tax ordinance. Therefore, impeding collection of
the cannabis cultivation tax at issue here will not “derange the operations of government,
and thereby cause serious detriment to the public.” (Dows v. City of Chicago, supra, 78
U.S. at p. 110.) Rather, “[t]here is no need to ‘minimize disruptions’ in the tax collection
procedure because, in this case, there is nothing to disrupt.” (City of Anaheim v. Superior
Court (2009) 179 Cal. App. 4th 825, 832 (City of Anaheim).) We decline to enforce a pay
first rule in this case based solely on article XIII, section 32 or public policy.

                                              11
       B. Statutory “Pay First” Requirement
       Although we have declined to read a pay first requirement into the ordinance for
the reasons stated, a local government is not precluded from including a pay first
requirement in a statute or ordinance, provided the requirement comports with due
process. (City of Anaheim, supra, 179 Cal.App.4th at p. 831.) Due process, in turn,
requires that the statute or ordinance provide an adequate remedy at law to contest the
legality of the tax. (Ibid.) “The ‘adequate remedy at law’ most often takes the form of a
refund procedure provided for in the applicable statute, and courts have consistently
upheld ‘pay first’ requirements in matters involving local taxes where the taxing authority
has specifically provided for a refund procedure.” (Ibid., citing Connolly v. County of
Orange (1992) 1 Cal. 4th 1105, 1113-1114, fn. 10 [procedure for refund of county
property taxes in Rev. & Tax. Code §§ 5096 & 5097]; Batt v. City and County of San
Francisco (2007) 155 Cal. App. 4th 65, 77-78 [refund procedure in San Francisco Bus. &
Tax. Reg. Code, § 6.15-1]; Flying Dutchman, supra, 93 Cal.App.4th at p. 1138 [same];
Writers Guild, supra, 77 Cal.App.4th at pp. 477-478 [L.A. Mun. Code, § 21.07].)
       The County argues that section 3.56 includes a pay first requirement by providing
that the tax becomes immediately “due and payable” upon the decision of the hearing
officer. (§ 3.56.130, subd. (C)(6).) But the ordinance does not specify that the taxpayer
must pay the tax before appealing the hearing officer’s decision. (Compare with S.F.
Bus. & Tax. Regs. Code, § 6.15-4, subd. (a) [“Persons claiming they are aggrieved under
the [Code] must prior to seeking judicial relief: (1) pay the amount of the disputed tax,
penalty, and interest”]; Andal v. City of Stockton (2006) 137 Cal. App. 4th 86, 92 [“The
Ordinance adds in this regard that no suit for money, damages, or a refund may be
brought against the City until a written claim therefor has been presented to the City and
has been acted upon or deemed rejected”]; Merchandising Concept Grp., Inc. v.
California Unemployment Ins. Appeals Bd. (2010) 181 Cal. App. 4th 1274, 1280-1281
[statute required payment of tax and claim for refund before filing suit for refund].)

                                             12
       Indeed, quite the opposite is true: section 3.56.130, subdivision (C)(6) states there
are no additional levels of administrative appeal following the hearing officer’s decision,
and the hearing officer’s decision “shall also notify appellant of further rights to appeal
under the Code of Civil Procedure.” Consistent with the ordinance, the hearing officer
ordered petitioners to pay $12,100 each, before informing petitioners that they “may
challenge this order by filing a writ of mandate pursuant to California Code of Civil
Procedure §§ 1094.5 and 1094.6 in the Calaveras County Superior Court within 90 days
of the service of this order.” Neither the ordinance nor the hearing officer’s order
explicitly required petitioners to pay the tax before petitioning for writ of mandate.
       Additionally, no statute required petitioners to pay the tax before seeking writ
relief. We ordered the parties to brief whether the cannabis cultivation tax could be
properly characterized as a property tax, which would make the tax subject to the pay
first requirement stated in Revenue and Taxation Code section 4807 (“No injunction or
writ of mandate or other legal or equitable process shall issue in any . . . proceeding in
any court against any county . . . to prevent or enjoin the collection of property
taxes . . .”). But the parties agree, as do we, that the cannabis cultivation tax is a privilege
tax, not a property tax. The cannabis cultivation tax was expressly intended to tax the
privilege of cultivating cannabis, distinguishing it from a property tax, and liability to pay
the tax arose upon a prospective cultivator’s decision to exercise the privilege of
cultivating cannabis. (See Ingels v. Riley (1936) 5 Cal. 2d 154, 159 [property tax does not
impose any condition or place any restriction on the use of property taxed; privilege tax
imposed on the right to exercise a privilege]; City of Huntington Beach v. Superior Court
(1978) 78 Cal. App. 3d 333, 341 [privilege tax does not become a property tax simply
because it is proportioned in amount to the value of the property used in connection with
the privilege which is taxed]; § 3.56.030, subd. (H) [subjecting the tax to voter approval
pursuant to Cal. Const., art. XIII C].) Accordingly, the tax was not imposed “merely by
the ownership of property,” as is characteristic of a property tax. (Thomas v. City of East

                                              13
Palo Alto (1997) 53 Cal. App. 4th 1084, 1088.) The tax here is not a property tax subject
to the statutory pay first requirement in Revenue and Taxation Code section 4807.
       We do not dispute that “[t]he power of a state to provide the remedy of suit to
recover alleged overpayments as the exclusive means of judicial review of tax
proceedings has long been unquestioned.” (Modern Barber Coll. v. Cal. Emp. Stab.
Com. (1948) 31 Cal. 2d 720, 726 (Modern Barber).) But here, the County did not invoke
the remedy of a refund suit as the exclusive means of judicial review, and therefore there
is no proper basis upon which to require petitioners to “pay first, litigate later.”
                                              III
Administrative Mandate, Adequate Remedy at Law, and Exhaustion of Judicial Remedies
       A writ of administrative mandamus under Code of Civil Procedure section 1094.5
“will lie only to challenge the validity of a final administrative adjudication vested in an
inferior administrative tribunal as the result of a proceeding when (1) a hearing is
required, (2) evidence is required to be taken, and (3) discretion in the determination of
the facts is vested in an administrative agency. [Citations.]” (Sunrise Retirement Villa v.
Dear (1997) 58 Cal. App. 4th 948, 954-955 (Sunrise).) “The inquiry for the issuance of a
writ of administrative mandamus is whether the agency in question prejudicially abused
its discretion; that is, whether the agency action was arbitrary, capricious, in excess of its
jurisdiction, entirely lacking in evidentiary support, or without reasonable or rational
basis as a matter of law. [Citations.] A prejudicial abuse of discretion is established if
the agency has not proceeded in a manner required by law, if its decision is not supported
by findings, or if its findings are not supported by substantial evidence in the record.”
(Sierra Club v. County of Napa (2004) 121 Cal. App. 4th 1490, 1497.)
       The proceeding before the hearing officer and subsequent decision satisfied the
requirements of a final administrative adjudication. Evidence was taken at the hearing,
which was required by the ordinance, and determination of the facts was vested in the
hearing officer. (§ 3.56.130, subds. (C)(5) [“hearing officer shall issue quasi adjudicatory

                                              14
findings, which shall be final and binding”], (C)(6) [hearing officer’s determination is the
final level of administrative appeal; finding shall notify taxpayer of further rights to
appeal under the Code of Civ. Proc.].)
       A. Adequate Remedy at Law
       “A writ of mandamus . . . only issues when there otherwise is no speedy and
adequate remedy at law. [Citations.]” (County of Sacramento v. Assessment Appeals Bd.
No. 2 (1973) 32 Cal. App. 3d 654, 672 (County of Sacramento).) Generally, paying a tax
under protest and suing for a refund is considered an adequate remedy at law to review
tax assessments on their merits, which obviates the need for a writ of mandamus. (See,
e.g., Little v. Los Angeles County Assessment Appeals Bds. (2007) 155 Cal. App. 4th 915,
923 [judicial review of county assessment appeals board decisions regarding property tax
assessment ordinarily limited to paying tax and suing in superior court for refund, relying
on art. XIII, § 32]; Star-Kist Foods, Inc. v. Quinn (1960) 54 Cal. 2d 507, 512 [mandate
denied where statute authorized paying taxes under protest and suing for refund];
Schoenberg v. County of Los Angeles Assessment Appeals Bd. (2009) 179 Cal. App. 4th
1347, 1355 [mandate not available to taxpayer with statutory authority to file refund
action as a device for judicial review of assessment appeals board’s decision on the
merits, as distinguished from review of its ministerial duties or audits].)
       However, mandamus may lie where the taxpayers challenge an administrative
agency’s failure to fulfill its administrative duties. (See, e.g., Sunrise, supra, 58
Cal.App.4th at p. 955 [mandate lies where administrative agency erroneously fails or
refuses to decide factual issue, but court may not “step into the shoes of the agency and
perform its function for it”]; Flightsafety International Inc. v. Assessment Appeals Bd.
(2003) 105 Cal. App. 4th 620, 628-629 [affirming trial court’s issuance of writ requiring
appeals board to perform its administrative duty]; County of Sacramento, supra, 32
Cal.App.3d at pp. 672-674 [assessment appeals board erroneously ruled it had no
jurisdiction]; Main & Von Karman Associates v. County of Orange (1994) 23

                                              15
Cal. App. 4th 337, 343-344 [assessment appeals board used wrong methodology and
refused to admit competent evidence; trial court directed to issue mandate commanding
board to conduct further proceedings].)
       In Sunrise, supra, 58 Cal. App. 4th 948, a local assessment appeals board refused to
hear an appeal regarding a property tax assessment on jurisdictional grounds. The
plaintiffs petitioned for writ of mandate in the superior court against the assessor and the
appeals board, asserting in part that the assessor abused his discretion in refusing to carry
out his duty to correct an error, and the appeals board abused its discretion in failing to
hear the appeal based on a lack of jurisdiction. (Id. at p. 953.) The trial court did not
issue a writ compelling the appeals board to set aside its order denying the plaintiffs’
application, and the appellate court reversed. The court recognized administrative
mandate is available to compel an agency to hold a hearing where the agency is
empowered to decide the factual issue in the first instance and refuses to do so. (Id. at p.
955.) The court observed, however, trial courts are not permitted to step into the shoes of
the administrative agency and perform its function for it. (Ibid.) Because the appeals
board had refused to exercise its own jurisdiction, the appellate court concluded the trial
court should have issued the writ to compel the appeals board to act. (Ibid.)
       The appellate court disagreed that the plaintiffs’ proper remedy was a suit for
refund. (Sunrise, supra, 58 Cal.App.4th at p. 961.) The court concluded, “remand to the
[appeals board] to hear plaintiffs’ appeal neither aids nor impedes their right to see a
refund of taxes improperly collected. Correction of the base-year value figure does not
automatically entitle the taxpayer to a refund. [Citation.]” (Ibid.) Later the court added:
“The writ . . . will do nothing except order the [appeals board] to perform its duty to hear
the appeal on its merits. The Assessor is not restrained from collecting taxes.” (Ibid.)
       In County of Sacramento, supra, 32 Cal. App. 3d 654, the county brought an action
for writ of administrative mandate after the assessment appeals board cancelled an
assessment, refunded the tax paid, and deleted the taxpayer’s liability from the tax rolls.

                                             16
This court recognized that, typically, “allowing the taxpayer to pay the disputed tax under
protest and to sue for refund, is such an adequate remedy and mandate is denied.” (Id. at
p. 672.) In the “unusual situation” presented in that case, however, the county lacked an
adequate remedy at law because it could not simply pay the tax and request a refund.
This court concluded a writ of mandate should issue from the trial court to order the
assessment appeals board to perform its administrative duty. (Id. at p. 673.)
        As we have discussed, there is no pay first requirement here, and the hearing
officer’s decision is a final decision for purposes of equitable relief under Code of Civil
Procedure section 1094.5. We further conclude that, in the situation presented here, the
refund procedure and suit for refund is not a complete, speedy, and adequate remedy at
law to address petitioners’ allegations that the hearing officer prejudicially abused its
discretion, acted in excess of, or without jurisdiction, and failed to provide petitioners
with a fair trial.
        Initially, it is not clear the refund procedure is a remedy available to petitioners.
The refund procedure provides: “A person licensed to engage in commercial cannabis
activity may claim a refund or take as credit against taxes collected and remitted any
amount overpaid when it is established, in a manner prescribed by the tax collector, that a
refund is due.” (§ 3.56.150, subd. (B); italics added.) Petitioners undoubtedly filed
registration forms for the privilege to cultivate cannabis on their properties.7 But
petitioners’ applications were never approved, and therefore under the plain language of
the ordinance, petitioners never became “licensees.”8 However, the parties do not raise

7 Section 17.95.150, subdivision (A) defines a “Registrant” as “an individual applying on
behalf of him/herself or as the authorized agent of a business entity for a medical
cannabis cultivation site registration in conformance with this Chapter.”
8Section 3.56.020 defines “ ‘Licensee’ or ‘registrant’ ” as “any person who is required to
obtain[ ] a cultivation registration . . . , or any person required to obtain an administrative
use permit . . . , or any person who is otherwise required to obtain a permit, registration,

                                               17
this issue in their briefing, and the issue was not addressed by the hearing officer or the
trial court.
        But even if the administrative refund procedure is not available to petitioners as
registrants, the County observes that petitioners could pay the tax and sue for a refund of
taxes paid under the Government Claims Act (Gov. Code, §§ 910 et. seq.). (See Ardon v.
City of Los Angeles (2011) 52 Cal. 4th 241, 253 [Government Claims Act authorizes class
claims against local governments in the absence of a specific refund procedure set forth
in an applicable governing claims statute]; McWilliams v. City of Long Beach (2013) 56
Cal. 4th 613, 620-621 [local ordinance is not an “applicable governing claims statute” for
purposes of Government Claims Act; taxpayers may sue for refund of unlawful tax under
the Act].) While Ardon and McWilliams construe the Government Claims Act as
authorizing tax refund lawsuits on a class basis where such suits are not provided for by
the applicable local ordinance, we agree petitioners could sue for refund under the Act.
Accordingly, we recognize that petitioners were procedurally able to pay the tax and sue
for a refund.
        While petitioners were able to pay the tax and sue for a refund, we conclude that
procedure is not an adequate remedy at law to address petitioners’ claims regarding
alleged abuses of discretion and fundamental unfairness of the administrative
proceedings. The petition alleges the hearing officer’s order is “rife with legal error,” and
the administrative procedures involved “the flagrant breach of fundamental fairness and
the shocking offense of every requirement of equity by [the County] in its tax assessment

certificate or other entitlement under any permanent successor cannabis ordinance
adopted by the board of supervisors, or any cannabis ordinance initiated and passed by
the voters of Calaveras County and which becomes the exclusive local law governing
commercial cannabis in Calaveras County.” Section 17.95.150, subdivision (R) defines a
“Licensee” as having the same meaning as former Business and Professions Code section
19300.5, subdivision (ab), which defined “licensee” as “a person issued a state license
under this chapter to engage in commercial cannabis activity.” (Stats. 2015, ch. 689,
§ 4.)

                                             18
and appeal procedures.” In the absence of a pay first requirement barring prepayment
equitable relief, we conclude paying the tax, requesting a refund (to the extent the refund
procedure applies to petitioners), and suing for refund of taxes paid is not adequate to
address petitioners’ claims regarding the procedural deficiencies in the administrative
proceedings. We recognize the trial court is not empowered to step into the shoes of the
administrative agency and exercise its discretion in place of that of the agency (Sunrise,
supra, 58 Cal.App.4th at p. 955), but if, as the petition alleges, the hearing officer
prejudicially abused his discretion, mandate is appropriate to compel the hearing officer
to comply with his administrative duties in the first instance.
       B. Exhaustion of Judicial Remedies Doctrine
       Petitioners assert they lack an adequate remedy at law because, had they failed to
timely petition for writ of mandate following the hearing officer’s decision, the decision
would have had preclusive effect in subsequent civil proceedings. They rely on the
exhaustion of judicial remedies doctrine, which provides that “unless a party to a quasi-
judicial proceeding challenges the agency’s adverse findings made in that proceeding, by
means of a mandate action in superior court, those findings are binding in later civil
actions.” (Johnson v. City of Loma Linda (2000) 24 Cal. 4th 61, 69-70 (Johnson).)
       “This requirement of exhaustion of judicial remedies is to be distinguished from
the requirement of exhaustion of administrative remedies. [Citation.] Exhaustion of
administrative remedies is ‘a jurisdictional prerequisite to resort to the courts.’
[Citation.] Exhaustion of judicial remedies, on the other hand, is necessary to avoid
giving binding ‘effect to the administrative agency’s decision, because that decision has
achieved finality due to the aggrieved party’s failure to pursue the exclusive judicial
remedy for reviewing administrative action.’ [Citation.]” (Johnson, supra, 24 Cal.4th at
p. 70.) The doctrine only applies to decisions that are “of a sufficiently judicial character
to support collateral estoppel.” (McDonald v. Antelope Valley Comm. College Dist.
(2008) 45 Cal. 4th 88, 113.) The doctrine of exhaustion of judicial remedies has two

                                              19
justifications: “(1) the interest in according proper respect to an administrative agency’s
quasi-judicial procedures by precluding a party from circumventing the established
process for judicial review of such decisions by means of a petition for administrative
mandate; and (2) ‘providing a uniform practice of judicial, rather than jury, review of
quasi-judicial administrative decisions.’ [Citation.]” (Johnson, at p. 70.)
       The County contends there is no tension between the doctrine of exhaustion of
judicial remedies and the pay first requirement because petitioners could have paid the
tax, requested a refund, and then petitioned for writ of administrative mandate within the
90 days provided by Code of Civil Procedure section 1094.6, subdivision (b). This
argument misses the mark. First, as we have discussed, there is no pay first requirement
here. Second, the County’s argument assumes that equitable relief is appropriate
provided petitioners first pay the tax and then request a refund. But a writ of mandate lies
only where petitioners lack an adequate remedy at law. (See City of Anaheim, supra, 179
Cal.App.4th at p. 831; County of L.A. v. Tax Appeals Bd. No. 2 (1968) 267 Cal. App. 2d
830, 833 [where no express statutory provision has been made for reviewing the orders of
administrative agencies, or other bodies exercising quasi-judicial powers, it is clear that
such review is provided in California by Code of Civ. Proc., § 1094.5]; Security-First
Nat. Bank v. Board of Supervisors (1950) 35 Cal. 2d 323, 327 [writ of mandate not
available because petitioner had adequate remedy at law by action for refund]; Modern
Barber, supra, 31 Cal.2d at p. 724 [were it not for statute expressly prohibiting writ of
mandate to prevent or enjoin collection of taxes and remedy of refund suit expressly been
made exclusive remedy of obtaining judicial review, mandamus might lie in the instant
case].) Accordingly, we disagree with the County’s argument that petitioners have an
adequate remedy at law in the form of paying the tax, requesting a refund, and petitioning
for writ of mandate.
       However, we disagree with petitioners that the preclusive effect resulting from
their hypothetical failure to petition for writ of mandate leaves them without an adequate

                                             20
remedy at law. Petitioners’ argument presumes that, even where mandamus does not lie
because they have an adequate remedy at law, their failure to petition for writ of mandate
will have preclusive effect in subsequent legal proceedings. But where mandamus does
not lie because petitioners have an adequate remedy at law, a petition for writ of mandate
is not “ ‘the exclusive judicial remedy for reviewing administrative action.’ ” (Johnson,
supra, 24 Cal.4th at p. 70.) Indeed, not only is mandamus not the exclusive judicial
remedy in that circumstance, it is not a remedy at all. Petitioners present no authority for
the proposition that failing to pursue an unavailable judicial remedy will result in the
administrative proceeding having preclusive effect in subsequent judicial proceedings.
       Nevertheless, based on our discussion ante, we conclude petitioners lack an
adequate remedy at law, and accordingly we reverse the trial court’s order granting the
County’s demurrer with respect to petitioners’ petition for writ of mandate.9
                                               IV
                                       Declaratory Relief
       Petitioners contend their action for declaratory relief survives demurrer even if
their petition for writ of mandate is properly barred. They assert declaratory relief is
available to challenge an agency’s interpretation of the statutes it enforces even where an
action to enjoin the collection of the tax is barred.
       Code of Civil Procedure section 1060 provides: “Any person . . . who desires a
declaration of his or her rights or duties with respect to another . . . may, in cases of
actual controversy relating to the legal rights and duties of the respective parties, bring an
original action . . . in the superior court . . . .” (Italics added.) “ ‘Thus, declaratory relief

9 Because we agree with petitioners’ argument that they were not required to pay the tax
before petitioning for writ of mandate, we do not address their arguments the County
must be equitably estopped from arguing for the application of the pay first, litigate later
doctrine, and the county’s ordinance is preempted by federal law.

                                               21
is appropriate only where there is an actual controversy, not simply an abstract or
academic dispute.’ [Citations.]” (Connerly v. Schwarzenegger (2007) 146 Cal. App. 4th
739, 746.)
       Declaratory relief operates prospectively to declare future rights, and while “ ‘it is
no objection that past wrongs are also to be redressed,’ ” there is no basis for declaratory
relief where only past wrongs are involved. (Baldwin v. Marina City Properties, Inc.
(1978) 79 Cal. App. 3d 393, 407.) “The purpose of a judicial declaration of rights in
advance of an actual tortious incident is to enable the parties to shape their conduct so as
to avoid a breach. ‘[Declaratory] procedure . . . serves to set controversies at rest before
they lead to repudiation of obligations, invasion of rights or commission of wrongs; in
short, the remedy is to be used in the interests of preventive justice, to declare rights
rather than execute them.’ [Citations.]” (Babb v. Superior Court (1971) 3 Cal. 3d 841,
848.) Accordingly, “[i]t is settled that an action for declaratory relief is not appropriate to
review an administrative decision.” (State of California v. Superior Court (1974) 12
Cal. 3d 237, 249.) “A declaratory relief action is an appropriate method for obtaining a
declaration that a statute or regulation is facially unconstitutional,” but administrative
mandamus is “the proper and sole remedy” where a local agency’s application of the law
is at issue. (Tejon Real Estate, LLC v. City of Los Angeles (2014) 223 Cal. App. 4th 149,
154, 155.)
       Petitioners rely on Pacific Motor Transit Co. v. State Bd. of Equalization (1972)
28 Cal. App. 3d 230 for the proposition that declaratory relief is available to challenge a
taxing agency’s interpretation of the statutes it enforces, but that case is inapposite.
Pacific Motor involved a declaratory relief action by trucking firms against the State
challenging the validity of an administrative rule and its application to them. But the
issue there was whether the taxpayers could seek judicial determination as to the validity
of a regulation as specifically authorized by statute (former Gov. Code, § 11440 [“Any
interested person may obtain a judicial declaration as to the validity of any regulation by

                                              22
bringing an action for declaratory relief in the superior court in accordance with the
provisions of the Code of Civil Procedure . . .”]), where another statute proscribed
judicial interference in the tax collection process (Rev. & Tax. Code, § 10276 [“No
injunction of writ of mandate or other legal or equitable process shall issue in any suit,
action, or proceeding in any court against this State or against any officer of the State to
prevent or enjoin the collection under this part of any license tax or other amounts sought
to be collected by the board”]). (Pacific Motor, at p. 236.) The court concluded the
statutes were not in conflict; the trucking firms could seek judicial determination as to the
validity of the questioned regulation provided the relief did not “ ‘prevent or enjoin’ or
otherwise hamper present or future tax assessment or collection effort against the plaintiff
or anyone.” (Ibid.)
       Unlike Pacific Motor, here no statute authorizes petitioners to seek declaratory
relief. Instead, declaratory relief is not available to address the past wrongs asserted by
petitioners. To the extent petitioners’ complaint for declaratory relief seeks review of the
hearing officer’s decision, such review is not appropriate. Moreover, as we will explain,
because the cannabis cultivation ordinance was repealed, there is no reason for the trial
court to rule on the validity of the ordinance prospectively.
       We ordered the parties to brief whether the repeal of the ordinance regulating
cultivation of commercial cannabis rendered petitioners’ claim for declaratory relief
moot. Petitioners assert their declaratory relief action is not moot because the repeal of
the cultivation ordinance was not retroactive and chapter 3.56 was not repealed, meaning
they were not relieved of their tax liabilities. However, as we have discussed, declaratory
relief is not appropriate to address past wrongs.
       We conclude petitioners’ complaint for declaratory relief, to the extent it sought a
determination of the prospective rights and obligations of the parties, was rendered moot
by the repeal of the marijuana cultivation ordinance. A claim for declaratory relief
“ ‘becomes moot when some event has occurred which “deprive[s] the controversy of its

                                             23
life.” [Citation.] The policy behind a mootness dismissal is that “courts decide
justiciable controversies and will normally not render advisory opinions.” ’ [Citations.]
The voluntary cessation of alleged wrongful conduct destroys justiciability of a
controversy and renders an action moot unless there is a reasonable expectation the
allegedly wrongful conduct will be repeated.” (Center for Local Government
Accountability v. City of San Diego (2016) 247 Cal. App. 4th 1146, 1157.) “The pivotal
question in determining if a case is moot is therefore whether the court can grant the
plaintiff any effectual relief. [Citations.]” (Wilson & Wilson v. City Council of Redwood
City (2011) 191 Cal. App. 4th 1559, 1574.)
       We recognize that the taxing ordinance--section 3.56--was not repealed, but the
repeal of section 17.95 demonstrated irrefutably that enforcement of section 3.56 will not
resume. (Covenant Media, Cal. v. City, Huntington Park (C.D. Cal. 2005) 377 F. Supp. 2d
828, 834.) Accordingly, any determination of the prospective rights and obligations of
the parties with respect to the interpretation of section 3.56 will only have the effect of
acting as judicial review of the administrative decision.
       The cases relied upon by petitioners are inapposite. In Sagaser v. McCarthy
(1986) 176 Cal. App. 3d 288 at page 298, the plaintiffs brought a California
Environmental Quality Act (CEQA) challenge to the construction of a prison that the
court dismissed as moot following the Legislature’s passage of a bill, applying
retroactively, that exempted the proposed prison from CEQA compliance. Petitioners do
not explain how Sagaser affects our conclusion here.
       Petitioners also rely on Sanks v. Georgia (1971) 401 U.S. 144 for the proposition
that an appeal is not moot if a repealed law could be applied. In Sanks, the high court
declined to adjudicate the issues presented in the case, but did not do so on the basis that
the case was moot. (Id. at pp. 150-151.) The court recognized that the appellants could
conceivably be subjected to the requirements of the former statutes on remand. (Id. at p.
151.) But as we have discussed, here petitioners seek declaratory relief in practical effect

                                              24
to review the hearing officer’s decision, which is inappropriate. To the extent that
petitioners seek a prospective determination of the rights and obligations of the parties,
petitioners present no evidence suggesting that the County is continuing to assess taxes
based on its interpretation of the cannabis cultivation tax ordinance.
                                      DISPOSITION
       The judgment of dismissal with respect to petitioners’ petition for writ of mandate
is reversed. In all other respects, the judgment is affirmed. The parties are ordered to pay
their own costs. (Cal. Rules of Court, rule 8.278(a) & (b).)

                                                        /s/
                                                  Duarte, J.

We concur:

     /s/
Murray, Acting P. J.

     /s/
Krause, J.

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