Ruling Leaves Local Public Agencies Open to Legal Actions Asserting Wasteful Government Spending by Non Property Owners

Cherrity Weatherford, who was a resident of the City of San Rafael in Marin County, rented (but did not own) property in the City. Although Weatherford’s vehicle was not impounded, she nonetheless took issue with the City’s and County’s enforcement practices of impounding vehicles. Weatherford believed that the City’s enforcement practices to impound vehicles violated state law and procedural due process requirements, and she sued the City for wasteful or illegal expenditures under Code of Civil Procedure section 526a in Weatherford v. City of San Rafael et al.

Last month, the Supreme Court held that Section 526a, which authorizes taxpayer lawsuits for wasteful or illegal expenditures by a government agency, does not require such taxpayers to pay property taxes. The Court’s ruling broadens the class of eligible plaintiffs who can sue a local entity under section 526a to include resident taxpayers who do not own property in the agency’s jurisdiction.

Section 526a allows a taxpayer to bring a lawsuit to stop governmental entities from the illegal or wasteful expenditure of public funds, even if the taxpayer does not have a direct or substantial interest in the outcome. In order to have standing to bring a section 526a suit against the government, the suit must be maintained by “a citizen resident therein, or by a corporation, who is assessed for and is liable to pay… or has paid, a tax therein.”

As a result of Weatherford, cities and counties may be exposed to increased section 526a challenges not only by property owners, but also any resident who pays other taxes assessed by the city or county. Until further clarification is provided by courts or legislation, it may be safest to assume that such challenges may come from residents paying sales and gasoline taxes, utility users taxes, property-related fees or charges, and other taxes, fees or charges levied by a city or county.

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