Monday, September 28, 2015

Hotel surcharge case heads toward trial

without precedent
By Lyle Moran

A case challenging a 2 percent hotel room surcharge in San Diego is

heading towards a trial later this fall without an expected precedent-setting
ruling from an appeals courts that could have had a major effect on the
litigation.
The nonprofit San Diegans for Open Government has alleged the
surcharge in San Diego is really a tax that should have been approved by
the city's voters, rather than its hoteliers and San Diego City Council.
But this spring, the 4th District Court of Appeal tentatively ruled that similar
assessments levied on hotels by a tourism marketing district in Ontario,
Calif., and passed through to visitors are not taxes, so voters had no right
to vote on them or mount a legal challenge.
If the ruling had been finalized, an attorney for the San Diego Tourism
Marketing District said his client and the city could have made the
argument that they should prevail in the San Diego case based on that
precedent.
Earlier this month, however, the 4th District Court of Appeal dismissed the
appeal the Inland Oversight Committee filed challenging the Ontario hotel
assessments without formally weighing in on the merits of the issues.
The appeal was dismissed in an unpublished opinion because the plaintiff's
counsel, Briggs Law Corporation led by attorney Cory Briggs, did not file
the appeal in time.
"The implication for San Diego is we do not have a precedent to rely on
and the issue is fresh for the trial court," said Michael Colantuono, special
counsel for the San Diego Tourism Marketing District.
But Colantuono, of Colantuono, Highsmith & Whatley, said he was
encouraged by one of the footnotes to the appellate court's opinion that
touched on whether the Inland Oversight Committee had standing to file a
suit challenging the hotel surcharges.
"If we were to reach the merits of IOC's claims on appeal, we conclude that
the cities' demurrers to IOC's complaint and writ petition were properly
sustained, without leave to amend, because neither IOC nor any of its
members have standing to challenge the validity of the assessments levied
in order to fund the (Greater Ontario Tourism Marketing District)," the
appellate court wrote in a footnote.

Colantuono also said that publication of the appellate court's decision was
being sought. If that were to occur, it may make the footnote useful in the
San Diego TMD case, he said.
Briggs, counsel for San Diegans for Open Government, did not respond to
a request for comment.
The San Diego TMD has argued that San Diegans for Open Government
has no standing to challenge the hotel assessments.
A summary judgment/adjudication hearing is scheduled for Oct. 16 before
San Diego Superior Court Judge Joel Wohlfeil.
If summary judgment or adjudication in favor of the defendants is not
granted, the San Diego TMD has moved that the trial be bifurcated.
It has requested that its affirmative defenses, such as San Diegans for
Open Government's alleged lack of standing, be tried prior to a trial on the
merits.
A trial is tentatively scheduled for Nov. 6.
lyle_moran@sdtranscript.com