Calistoga Case: Not Just Anyone Can Sue A City!

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It is a fundamental concept in litigation that the party seeking relief must have some real, beneficial interest in the outcome of the case.  A plaintiff cannot sue a city or other public entity simply because he or she does not like a certain policy or practice; the plaintiff must have standing to bring the lawsuit, which may either be conferred by law or because the plaintiff has suffered some sort direct or indirect harm. A February 3 published decision by the 1st District Court of Appeal clarifies this concept further, finding that neither a plaintiff’s status as a payer of sales tax in a given area—nor as a state citizen seeking redress for past government misconduct—meet the requirements for bringing such an action.

In Reynolds v. City of Calistoga, Grant Reynolds brought suit challenging the operation of a City of Calistoga reservoir and the City’s allocation of funds raised by Napa County sales tax to a different project.  Reynolds does not live in Calistoga. The City challenged Reynolds’ standing to bring the suit. The trial court found that Reynolds lacked standing to challenge the City’s expenditure of tax revenues.

Reynolds argued that he had standing as a payer of sales tax in Napa County. Code of Civil Procedure section 526a does confer standing on those who pay taxes in a town, city or county, regardless of whether one lives within the city. But, as the 1st District confirmed, while taxpayer standing is broadly defined and designed to provide a remedy against the improper expenditure of government funds, sales tax is actually imposed on the retailer and not on the consumer. Payment of sales tax in a city simply does not confer standing on an individual to challenge the expenditure of funds by that city. Reynolds also claimed that he had standing as a state citizen seeking redress for government misconduct, but the 1st District’s opinion recognizes that this “public interest” exception to the principle of standing does not apply to suits seeking redress for past misconduct.

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