Cases & Deals

Los Angeles County prevails in taxpayer class action challenging County's utility user tax

Clients Los Angeles County

Jones Day successfully defended Los Angeles County against a potential $200 million loss in two related taxpayer class actions—Oronoz v. County of Los Angeles and Owens v. County of Los Angeles. Both actions challenged the validity of the November 4, 2008 election on Measure U, where voters overwhelmingly approved the County’s continued imposition of the utility user tax (UUT) in the unincorporated areas of Los Angeles. The Oronoz plaintiffs claimed the election breached a provision of an earlier settlement that required the County to hold an election to validate the UUT “pursuant to applicable law"; the Owens plaintiffs sought refund of all UUT taxes paid by residents of the unincorporated areas since the date of the election. Both actions sought to overturn the election on Measure U due to alleged violations of the California Elections Code and due process. Specifically, the plaintiffs argued the Measure U ballot materials misled the voters because the County’s “impartial analysis” did not disclose that the UUT was an illegal tax that would be discontinued if not approved.

On April 25, 2012, the County prevailed. The Court rejected every one of the plaintiffs' arguments, finding the County's ballot materials for Measure U were not misleading and comported with all "applicable law," and finding the Oronoz plaintiffs were barred from claiming the election breached the settlement at this late stage. These critical rulings led to judgment in favor of the County on all claims in Owens; the Oronoz action continues on for resolution of certain unrelated administrative aspects of the settlement agreement.

Joe Oronoz and Larry Pitts, as individuals and on behalf of all other similarly situated "PERSONS' or Unincorporated Los Angeles County v. The County of Los Angeles, Case Nos. BC334027 [consolidated with BC334145] (Super. Ct. Los Angeles Cty., Cal.)

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