Although they cannot be false and misleading, ballot arguments need not be relevant, the Fourth District Court of Appeal has ruled. The panel issued its opinion in a lawsuit challenging the title of, and ballot arguments for, a City of Huntington Beach measure on the March ballot that would impose a tax on a power plant.
The unanimous three-judge panel reinstated a number of the city's ballot arguments that a trial court had struck down. However, the appellate panel removed a few of city's arguments as false and misleading, and the court slightly modified the title of the measure.
"In the political arena, after all, one person's relevant argument is another person's nonsense. Only when there is no relationship to the measure does the trial court have the authority to strike it," Justice David Sills wrote.
Huntington Beach has had a 5% tax on utilities — including natural gas, electricity and cable television — since 1970. The ballot measure would extend the tax to AES Corporation's wholesale purchase of natural gas to fire an electricity generating plant. The city proposed the tax, which would raise about $2 million a year for a proposed "infrastructure fund," shortly after the California Energy Commission allowed AES to restart two units of the plant despite local objections.
AES President Ed Blackford challenged the title of the ballot measure, the ballot argument and the city's rebuttal. In December, Orange County Superior Court Judge Derek Hunt ruled in favor of Blackford. One week later, Hunt backed away from some of his initial decision. Both the city and Blackford appealed.
The Fourth District refused to strike anything as irrelevant. However the court replaced the word "exemption" in the measure's title with "exclusion," so the title became, "Amendment of Utility Tax by Removing Electric Power Plant Exclusion." The court ruled that the word "exemption" connoted "unfair influence and special treatment," which amounted to advocacy in what should be a neutral title.
The court also struck all or portions of five ballot arguments submitted by the city because the court held that they were false or misleading. For example, the city's argument said the measure would only require the power plant to pay the same tax that all residents pay. The court ruled, "It [AES] gets hit with Huntington Beach's 5% utility sales tax on its utility bills the same as everybody else does. What it doesn't pay is a tax that only it could pay. So to say that AES is the only business that does not pay ‘this tax' is to mislead."
The court also removed as false a sentence claiming AES refused to sign a contract for sale of electricity solely in California.
Huntington Beach City Council v. Superior Court of Orange County; Ed Blackford v. Superior Court of Orange County, No. G030075, 02 C.D.O.S. 205, 2002 DJDAR 261. Filed January 8, 2002.
For Huntington Beach: Gail Hutton, City Attorney, (714) 536-5555.
For Blackford: Donald R. Brown, Manatt Phelps & Phillips, (310) 312-4318.