Silva v. Humboldt County CA1/1

Filed 3/11/21 Silva v. Humboldt County CA1/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

KAREN SILVA et al.,
Plaintiffs and
Respondents, A160161, A160264

v. (Humboldt County
HUMBOLDT COUNTY, Super. Ct. No. CV-180425)
Defendant and
Appellant.

Humboldt County (County) voters approved a measure to tax
commercial cultivators of marijuana, and the County’s Board of Supervisors
(Board of Supervisors or Board) later amended it. A group of challengers,
including respondent Karen Silva, sued appellant County to overturn the
amendments, and the trial court agreed that the amendments had
impermissibly broadened the scope of the tax. On appeal, the County argues
that the trial court was procedurally barred from considering the challenge
and erred on the merits. We disagree and affirm.
I.
FACTUAL AND PROCEDURAL
BACKGROUND
The Board of Supervisors placed on the November 2016 ballot
Measure S, a proposed tax on commercial cultivators of marijuana. The
measure passed, and the Commercial Marijuana Cultivation Tax became
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operative on January 1, 2017. (Humboldt Co. Finance, Revenue and
Taxation Code, § 719-15, hereafter Finance Code.)
Measure S allows the Board of Supervisors to amend the law or
approve enforcement regulations promulgated by the County’s administrative
officer so long as the action “does not result in an increase in the amount of
the tax or broaden the scope of the tax.” (Finance Code, § 719-9.) The Board
of Supervisors amended Measure S on June 6, 2017, and again on April 3,
2018, and these amendments are the subject of this litigation.
Respondent Silva owns property in Humboldt County. No one
cultivated cannabis on the property in 2017. The County nonetheless sent
her an invoice of $40,000 in commercial cannabis cultivation taxes under
Measure S for the year 2017–2018. Silva paid the invoice. The County sent
an invoice of $54,025 for the year 2018–2019, and Silva again paid the
invoice.
In May 2018, three unincorporated associations filed a combined
petition for writ of mandate and a complaint for injunctive and declaratory
relief.1 Silva was added as a petitioner/plaintiff in a first amended
petition/complaint. The parties later stipulated that Silva had standing to
assert the claims alleged against the County.
The parties ultimately asked the trial court to resolve five issues
relating to the amendments, three of which are at issue in this appeal.
The first of these issues was whether the amendments impermissibly
broadened the scope of the tax by extending its reach from cultivators to
property owners. As originally adopted, Measure S provided that “each

1The original petitioners/plaintiffs were HUMMAP, the Humboldt
Cannabis Taxpayers’ Association, and the Humboldt Voters’ Association. All
three associations later stipulated to dismissal from the action without
prejudice.
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person engaged in legally authorized commercial marijuana cultivation
within the unincorporated area of Humboldt County shall pay an annual tax
of $1 per square foot of outdoor cultivation area, $2 per square foot of mixed-
light cultivation area or $3 per square foot of indoor cultivation area.” (Italics
added.) The amendments provided that “each property owner whose property
is subject to a commercial marijuana cultivation permit shall pay an annual
tax of $1 per square foot of outdoor cultivation area, $2 per square foot of
mixed-light cultivation area or $3 per square foot of indoor cultivation area
regardless of whether or not marijuana is actually grown on such property.”
(Italics added.)
The second issue was whether the amendments impermissibly
broadened the scope of the tax by expanding the taxable property from areas
actually “cultivated” to all areas “permitted” for cultivation. As passed by
voters, Measure S defined “cultivation area” as “the sum of the permitted
area(s) of marijuana cultivation as measured around the perimeter of each
discrete area of marijuana cultivation on a single premises, as defined herein.
Area of marijuana cultivation is the physical space where marijuana is grown
and includes, without limitation, garden beds or plots, the exterior
dimensions of hoop houses or green houses, and the total area of each of the
pots and bags containing marijuana plants on the premises.” The
amendments changed the definition of “cultivation area” to mean “the
cultivation area stated on the commercial marijuana cultivation permit
issued by the Humboldt County Planning and Building Department.”
The third issue was whether the amendments expanded the scope of
the tax by changing the time when the taxes start to accrue. Under
Measure S, taxes were to “begin to accrue on the date on which a person
becomes engaged in legally authorized commercial marijuana cultivation in
accordance with the applicable provisions of this Code and all other

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applicable state and federal laws and regulations.” The amendments
removed this sentence and replaced it with one stating, “For purposes of this
Chapter, taxes shall be owed for each and every year in which a commercial
marijuana cultivation permit is issued by the Humboldt County Planning
and Building Department.”
Following briefing and a hearing, the trial court ruled in Silva’s favor
on all three issues.2 Thus, it found that the amendments impermissibly
increased the scope of the tax by expanding its application from those
engaged in cultivation to all property owners subject to a cultivation permit,
by expanding the taxable areas from those under cultivation to the entire
area covered by the permit, and by expanding its application to people who
have obtained a permit but may not have started to cultivate marijuana
under that permit.
The trial court issued a peremptory writ of mandate and concluded that
the other causes of action were moot, and the County appealed from both the
writ and the judgment. The appeals were assigned two different appeal
numbers, and this court consolidated the appeals on the County’s request.
After the County appealed, the Board of Supervisors in October 2020
again amended Measure S to change the definition of who is subject to the
tax (October 2020 amendments). As a result of these further amendments,

2 The court ruled in favor of the County on two other issues. Measure S
provided that the tax would be collected “biennially in the same manner as
other taxes fixed and collected by the County of Humboldt” (italics added),
and the measure was amended to provide that the tax shall be collected “in
the same or similar manner as other taxes fixed and collected by the County
of Humboldt.” The court concluded that removing the confusing word
“biennially” was akin to correcting a scrivener’s error and did not
impermissibly alter the timing of the collection of the tax. The trial court
further concluded that the amendments did not impermissibly expand the
scope of the tax by taxing those who were not complying with federal law.
Because Silva did not file a cross-appeal, these issues are not before us.
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the tax now applies to “each person issued a commercial marijuana
cultivation permit.”
II.
DISCUSSION
A. The Trial Court Was Not Procedurally Barred From Considering the
Challenge to the Board’s Amendments.

For the first time on appeal, the County raises several procedural
arguments, none of which persuade us.
1. The Doctrine of Exhaustion of Administrative Remedies Does
Not Apply.

The County first contends that this action is barred because Silva failed
to exhaust her administrative remedies, a question we review de novo.
(Plantier v. Ramona Municipal Water Dist. (2019) 7 Cal.5th 372, 380
(Plantier).) Even assuming the County did not forfeit the issue by failing to
raise it below and by stipulating to Silva’s standing, we conclude the
contention lacks merit.
Parties must exhaust any available administrative remedies before
resorting to the courts. (Plantier, supra, 7 Cal.5th at pp. 382−383.) This
exhaustion requirement applies “ ‘where a claim is cognizable in the first
instance by an administrative agency alone’ ” and “ ‘judicial interference is
withheld until the administrative process has run its course.’ ” (Farmers Ins.
Exchange v. Superior Court (1992) 2 Cal.4th 377, 390, quoting United
States Western Pacific Railroad Co. (1956) 352 U.S. 59, 63.) “ ‘Under this
rule, an administrative remedy is exhausted only upon “termination of all
available, nonduplicative administrative review procedures.” ’ ” (Plantier, at
p. 382.) “The doctrine favors administrative autonomy by allowing an agency
to reach a final decision without interference from the courts.” (Id. at p. 383.)
The requirement that administrative remedies be exhausted is jurisdictional
in California and not a matter of judicial discretion. (Hill RHF Housing
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Partners, L.P. v. City of Los Angeles (2020) 51 Cal.App.5th 621, 631, review
granted Sept. 16, 2020, S263734 (Hill RHF).)
The County first contends that “[b]efore suing, one opposing a tax must
present her objections at the public hearing called for that purpose — this is
named ‘issue exhaustion.’ ” (E.g., Hill RHF, supra, 51 Cal.App.5th at
pp. 632–634.) In Hill RHF, for example, property owners challenged the
establishment of multiple business improvement districts created to levy
assessments on real property in those districts. (Id. at pp. 626–627.) The
establishment of such districts is governed by “a comprehensive procedure
cities must follow.” (Id. at p. 627, citing Sts. & Hy. Code, § 36600 et seq.; Cal.
Const., art. XIII D.) The procedure “include[d] opportunities for property
owners in proposed assessment districts to state their objections to proposed
assessments, and a requirement that those objections be considered before
levying an assessment.” (Hill RHF, supra, 51 Cal.App.5th at p. 627.) The
petitioners were served with written notice of the hearings where they could
“create a record of the reasons for their objection.” (Hill RHF, supra,
51 Cal.App.5th at pp. 627, 629; Cal. Const., art. XIII D, § 4, subd. (c).)
Because the petitioners had not availed themselves of the legally proscribed
“comprehensive protest and hearing process,” the court concluded that they
had not exhausted their administrative remedies. (Hill RHF, at p. 632.)
Here, by contrast, the County identifies no such legal process where
Silva was required to create a record of her objections to the County’s
amendments to Measure S. The County argues that challengers “were
required to present their objections — identifying the issues they would
litigate — during at least one of the Supervisors’ hearings on” their
amendments. But Plantier makes clear that parties are not required to
exhaust an “inadequate” remedy, and a remedy is inadequate “unless it
‘establishes clearly defined machinery for the submission, evaluation and

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resolution of complaints by aggrieved parties.’ ” (Plantier, supra, 7 Cal.5th at
p. 384.) It may be true, as the County claims, that the Board of Supervisors
“could have addressed the Challengers’ objections before it proposed
Measure S.” The challengers, however, oppose the amendments to the
measure. And while the Board of Supervisors may have held hearings on the
proposed amendments, there is no indication that at these hearings the
Board was required to evaluate or resolve complaints by aggrieved parties.
The County further contends that the challengers failed to exhaust
remedies under the refund procedures of the Revenue and Taxation Code.
True enough, “[a] taxpayer ordinarily must pay a tax before commencing a
court action to challenge the collection of the tax,” a rule “commonly known
as ‘pay first, litigate later.’ ” (County of Los Angeles v. Southern Cal. Edison
Co. (2003) 112 Cal.App.4th 1108, 1116.) But Silva did pay the tax she
challenges. And while it is certainly true that a taxpayer is required to seek
a refund from a county assessment appeals board when seeking an
assessment reduction or rebate (Williams & Fickett v. County of Fresno
(2017) 2 Cal.5th 1258, 1264–1265), here Silva challenged the underlying legal
basis for assessing a tax against her, not the amount of the assessment.
The County’s exhaustion argument fails.
2. The County Waived Other Procedural Arguments by
Stipulating in the Trial Court that Silva Had Standing.

The County waived its remaining procedural arguments by stipulating
in the trial court that Silva had standing and asking for the trial court to rule
on issues. “The doctrine of waiver ordinarily prevents a party from arguing
for the first time on appeal questions that were not presented to the trial
court. [Citations.] The doctrine of invited error prevents a party from
asserting an alleged error as grounds for reversal when the party through its
own conduct induced the commission of the error. [Citations.] Related to

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these doctrines is the doctrine of theory of trial: ‘Where the parties try the
case on the assumption that a cause of action is stated, that certain issues
are raised by the pleadings, that a particular issue is controlling, or that
other steps affecting the course of the trial are correct, neither party can
change this theory for purposes of review on appeal.’ ” (County of Los
Angeles v. Southern Cal. Edison Co., supra, 112 Cal.App.4th at p. 1118
[where a county asked trial court to evaluate documentary-transfer tax, it
forfeited argument that “pay first, litigate later” rule applied to taxpayer’s
challenge].)
The County waived its argument that two issues—whether the
amendments enacted by the Board of Supervisors changed (1) the definition
of “cultivation area” and (2) the time when taxes accrue—are not ripe for
review. This argument was waived when the County stipulated that the trial
court should decide those issues.
B. The County’s Amendments Impermissibly Expanded the Scope of
Measure S.

The County contends that the Board’s amendments did not
impermissibly alter Measure S but instead merely clarified some of the
measure’s ambiguous terms. We disagree.
1. Applicable Law.
Legislation “enacted by voter initiative may be changed only with the
approval of the electorate unless the initiative measure itself permits
amendment or repeal without voter approval.” (People v. Cooper (2002)
27 Cal.4th 38, 44.) “An amendment is a legislative act designed to change an
existing initiative statute by adding or taking from it some particular
provision.” (Ibid.) “[I]n deciding whether a particular legislative act amends
an initiative statute, courts ‘need to ask whether it prohibits what the
initiative authorizes, or authorizes what the initiative prohibits.’ [Citations.]

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The resolution of this question requires a determination of what the
electorate contemplated when it passed the initiative, which in turn is a
matter of statutory interpretation.” (People v. Lopez (2020) 51 Cal.App.5th
589, 597.)
“ ‘When we interpret an initiative, we apply the same principles
governing statutory construction. We first consider the initiative’s language
giving the words their ordinary meaning and construing this language in the
context of the statute and initiative as a whole. If the language is not
ambiguous, we presume the voters intended the meaning apparent from that
language, and we may not add to the statute or rewrite it to conform to some
assumed intent not apparent from that language. If the language is
ambiguous, courts may consider ballot summaries and arguments in
determining the voters’ intent and understanding of a ballot measure.’ ”
(People v. Lopez, supra, 51 Cal.App.5th at p. 597.) Although the County
contends that Measure S was not technically an initiative, the parties
apparently do not disagree this is how the court should analyze the
amendments to Measure S.
The County contends that this court should defer to its construction of
its own legislation, but it relies on inapposite authority that does not involve
amending measures approved by voters. (San Francisco Fire Fighters
Local 798 v. City and County of San Francisco (2006) 38 Cal.4th 653, 667
[deference to rules adopted by civil service commission]; California Hotel &
Motel Assn. v. Industrial Welfare Com. (1979) 25 Cal.3d 200, 204, 211–213
[deference to Industrial Welfare Commission order fixing hours, wages, and
conditions of employment].)
2. The County Expanded Who Is Taxed.
As we have said, the trial court first concluded that the Board of
Supervisors impermissibly broadened the scope of Measure S by taxing

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“property owner[s] whose property is subject to a commercial marijuana
cultivation permit,” instead of taxing only those “person[s] engaged in
commercial marijuana cultivation,” as Measure S originally provided. After
the County appealed, the Board of Supervisors enacted the October 2020
amendments so that the tax now applies to “person[s] issued a commercial
marijuana cultivation permit.”
The County argues that the October 2020 amendments rendered moot
the “dispute regarding taxing property owners as such.” True, “repeal or
modification of a statute under attack, or subsequent legislation correcting a
challenged deficiency, can render a case moot.” (Association of Irritated
Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, 1222.)
But “[t]he appeal may not be moot if the amendment includes, continues, or
reenacts a material part of the enactment which was considered by the lower
court.” (Alternatives for California Women, Inc. v. County of Contra Costa
(1983) 145 Cal.App.3d 436, 445.)
Although the October 2020 amendments establish that property owners
are not subject to the tax simply by nature of their status as owners, the
amendments still broaden the scope of Measure S as passed by the voters.
The version passed by the voters made the tax applicable only to “person[s]
engaged in commercial marijuana cultivation,” whereas the current version
makes the tax applicable to “person[s] issued a commercial marijuana
cultivation permit,” whether or not they are engaged in actual cultivation, an
issue we address below (§ II.B.4.).
We agree with the trial court that “[t]he voters approved a measure
whereby an individual involved in cultivation is the person responsible for
the tax. While it may often be true that the property owner and cultivator
are the same individual, such is not always the case.” We construe the
County’s mootness argument as an abandonment of its argument that the

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Board was authorized to broaden the tax by applying it to all property
owners.
3. The County Expanded What Is Taxed.
Although the October 2020 amendments clarified that only permit
holders are subject to the tax, the Board of Supervisors did not alter the prior
amendments’ change in the taxable area from the “permitted area(s) of
marijuana cultivation as measured around the perimeter of each discrete
area of marijuana cultivation” to “the cultivation area stated on the
commercial marijuana cultivation permit.”
On appeal, the County contends that the change in the taxable
cultivation area was permissible because the original version of the measure
was ambiguous. We disagree. The original Measure S passed by the voters
defined “cultivation area” as “the sum of the permitted area(s) of marijuana
cultivation as measured around the perimeter of each discrete area of
marijuana cultivation on a single premises, as defined herein. Area of
marijuana cultivation is the physical space where marijuana is grown and
includes, without limitation, garden beds or plots, the exterior dimensions of
hoop houses or green houses, and the total area of each of the pots and bags
containing marijuana plants on the premises.” The County claims it is
unclear whether this meant “the area in which growing is permitted, whether
or not cultivated” or “the area that is both permitted and cultivated.” We
discern no such ambiguity. The original definition explained in some detail
how to measure the area (or areas) where actual cultivation was taking place.
As the trial court stated, the definition “cannot be the full permitted area in
and of itself, because the very language of the Measure passed by voters
limits it to the sum of the areas around the perimeter of the physical spaces
where marijuana is actually being cultivated.” The County’s amended
definition of “cultivation area” to mean “the cultivation area stated on the

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commercial marijuana cultivation permit issued by the Humboldt County
Planning and Building Department” changes the scope of what is taxed.
The County argues that it was necessary to amend Measure S to
“clarify” that the tax applies to “the cultivation area stated on the commercial
marijuana cultivation permit . . . regardless of whether or not marijuana is
actually grown on such property” to “allow[] efficient administration of the
tax and [to] prevent[] fraud by cultivators who underreport the area of their
grows.” The County further claims that “[s]uch fraud would be difficult to
prevent in a sprawling, rural and forested county like Humboldt.” But
regardless of whether they promote administrative and enforcement
efficiencies, the amendments impermissibly “broaden the scope of the tax”
and are therefore barred because they were not approved by the electorate.
Because we find no ambiguity in the measure’s original wording, we
need not consider the County’s arguments that extrinsic evidence supports its
arguments.
4. The County Changed When the Tax Accrues.
We likewise find no ambiguity in the measure’s language governing the
time that the marijuana tax begins to accrue. Measure S as passed provided
that “taxes shall begin to accrue on the date on which a person becomes
engaged in legally authorized commercial marijuana cultivation in
accordance with the applicable provisions of this Code and all other
applicable state and federal laws and regulations.” The County argues that
this language was ambiguous because the tax “could accrue when a permit is
obtained or when a cultivator begins to grow,” but we disagree. True enough,
the measure referred to cultivation “in accordance with the applicable
provisions of this Code,” which arguably encompasses securing the necessary
permit before starting to cultivate. But this does not mean, as the County

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argues, that Measure S can be reasonably interpreted to say that the tax
accrues as soon as someone secures a permit.
We also disagree with the County that the definition of “[c]ommercial
marijuana cultivation” supports its reading of Measure S. Again, “marijuana
cultivation” is defined as “any activity involving the planting, growing,
harvesting, drying, curing, grading or trimming of marijuana or cannabis,
including nurseries, that is intended to be transported, processed,
manufactured, distributed, dispensed, delivered or sold in accordance with
the applicable provisions of this Code and all other applicable state and
federal laws and regulations.” The County argues that the phrase “any
activity involving” is “easily read to include obtaining the permit that [the]
Code requires.” Not so. The definition focuses on the process of actually
cultivating marijuana, not seeking a permit to do so.
As the trial court observed, “A person obtaining a permit is reserving
the right to cultivate and abide by certain rules and regulations; it does not
obligate them to actually engage in cultivation. . . . The tax was supposed to
begin accruing when cultivation starts, rather than when a permit is issued.”
We agree with the trial court that “[t]he tax was supposed to begin accruing
when cultivation starts, rather than when a permit is issued,” and the
County thus was not permitted to amend the measure so that taxes would be
owed for each and every year someone has a permit, regardless of whether
they are cultivating marijuana.
III.
DISPOSITION
The judgment is affirmed. Respondents shall recover the costs of
appeal.

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 _________________________
Humes, P.J.

WE CONCUR:

_________________________
Margulies, J.

_________________________
Banke, J.

Silva v. Humboldt County A160161/A160264

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