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Johnson v. King County

United States District Court, W.D. Washington, Tacoma

May 21, 2019

PAM JOHNSON, Plaintiff,
v.
KING COUNTY, Defendant.

          ORDER DENYING PLAINTIFF'S MOTION TO AMEND

          RONALD B. LEIGHTON UNITED STATES DISTRICT JUDGE.

         THIS MATTER is before the Court on Plaintiff Pam Johnson's Motion to Amend her complaint. Dkt. #14.

         I. BACKGROUND

         Washington's “levy lid” statute limits the rate at which a taxing district may increase the regular annual property tax levy amount. RCW 84.55.[1] The limit factor is 101 percent of the prior year's rate. RCW 84.55.050(2). A taxing district (like King County) may submit to voters a proposition that will “lift” the levy lid. RCW 84.55.050(1). The dollar amount of a levy lid may not be used as the base amount for computing “subsequent levies, ” unless the proposition's ballot title “expressly” states that it will be so used. RCW 84.55.050(1), (4)(c).

         Washington also provides a streamlined procedure for anyone to challenge any ballot title if he claims it is not accurate. See RCW 29A.36.090. Any challenge must be filed with the county's auditor within ten days of the date the ballot title is filed. Id.

         In 2012, the King County Council passed Ordinance No. 17304, a “levy lid lift” to collect additional property taxes for nine years, beginning in 2013. The Ordinance stated that “the [new] 2013 levy amount would become the base upon which levy increases would be computed for each of the eight succeeding years.”

         Proposition 1 placed Ordinance No. 17304 before the voters. Its ballot title explained that “increases in the following eight years would be subject to the limitations in chapter 84.55 RCW, all as provided in Ordinance No. 17304.” Unlike the Ordinance itself, Prop. 1's ballot title did not expressly state that the 2013 levy rate would be used to calculate levy amounts for nine years.

         Voters approved Prop. 1 and thus authorized King County to impose an additional property tax levy at a rate above the 101% limit for nine years. King County applied that rate to its overall rate, and multiplied the new combined rate by the total value of taxable property to produce 2014's total permissible levy rate. After nine years, the levy lid will revert to what it would have been, had voters not “lifted the lid” in 2012.

         In 2016, End the Prison Industrial Complex (“EPIC”) sued King County. It claimed Prop. 1 effectively authorized an increased property tax rate in 2013, but that King County's collection of increased property taxes in subsequent years was illegal, because Prop. 1's ballot title did not expressly state that it would do so.

         EPIC argued that the ballot title implied that the property tax rate increase was for only one year. It sought to enjoin King County from collecting property taxes at the increased rate in subsequent years. The Pierce County Superior Court held that the ballot title language sufficiently authorized King County to levy property taxes in future years based on the increased base tax rate in the first year. End Prison Indus. Complex v. King County, 2016 WL 5940467, at *1 (Wash.Super.2016).

         The Washington Court of Appeals reversed. It held that Prop 1's ballot title language was insufficient under RCW 85.55.050, and Prop. 1's passage did not authorize the County to use 2013's levy as a base for subsequent years: “Because EPIC sought to enforce the terms of the ballot title as written and approved by voters, EPIC's claim is not a challenge to the ballot's title that must be brought pre-election.” End Prison Indus. Complex v. King Cty., 200 Wn.App. 616, 633-34, 402 P.3d 918, 927 (2017) (“EPIC I”). The Court of Appeals reversed and remanded to the Superior Court for further proceedings.

         Armed with EPIC I, Plaintiff Johnson sued King County in Pierce County Superior Court in 2017, on behalf of herself and all persons who paid King County property taxes since 2014, seeking a refund of taxes she claimed King County had illegally collected. Like EPIC, Johnson[2]claimed King County's property tax collections were illegal under RCW 84.55.010 and .050 because Prop. 1's ballot title was insufficient. Therefore, she argues, Prop. 1's passage did not authorize King County to use the dollar amount of the 2013 collections as the base upon which to calculate the levy limits in future years. She claimed that EPIC I collaterally estopped King County from re-litigating that issue.

         Johnson also argued that the state's failure to provide a remedy for all taxpayers to obtain relief or a refund from an illegal or erroneous tax was a violation of due process, though she did not sue the state (or assert that any state statute was unconstitutional). See Plaintiff's Complaint at Dkt. #1, Ex. A at 4-14, 30.

         King County removed the case here based on Johnson's due process claim. The parties stipulated to a stay while the Washington Supreme Court reviewed EPIC I, because Johnson's claims necessarily and explicitly relied on it. Indeed, Johnson ...


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