People Ex Rel. Franchise Tax Board v. Superior Court

I reluctantly concur in the majority’s holding that binding precedent prevents Safeco’s challenge to the subpoena in a special proceeding brought pursuant to Revenue and Taxation Code *556 sections 11187-11188 and that Safeco’s assertion that the subpoena seeks information in violation of its policyholder’s right of privacy is without merit. However, my agreement with the majority ends with these limited points. Entities in Safeco’s position must have the right to litigate the retroactive application of rulings they have obtained from the Franchise Tax Board (FTB).

Safeco has a cognizable property right in its investment annuity contracts which the majority view ignores. If the majority view is left standing, Safeco (and others similarly situated) will be deprived of the due process right to litigate such issues in future proceedings. In taking such position, the majority misreads and misinterprets the holdings of several key federal and state appellate decisions. I do not join in the majority opinion because it contains language which, in my view, offends notions of fairness and justice.

Since this petition addresses a substantial question of first impression which will have a…

The People of the State of California, acting through the Franchise Tax Board (FTB) have filed a petition for a writ of mandate to compel respondent superior court to vacate its order denying the petition of the FTB for an order to compel compliance with its subpoena duces tecum and to make a new and different order compelling such compliance. We grant the petition.

The Issues Presented

The issues presented in this proceeding are whether an administrative subpoena duces tecum issued by the FTB requiring an insurance company to identify policyholders under its deferred annuity plan and to disclose the *533 amounts of interest and other income credited to the custodian accounts of those policyholders (1) was regularly issued, (2) whether it violates the right to privacy guaranteed by article I, section 1, of the California Constitution, (3) whether it violates the California Right to Financial Privacy Act, and (4) whether the FTB can be estopped to change its position retroactively as to the taxability of certain income, in a special proceeding under Government Code section 11188 to compel compliance with that administrative subpoena.

Statement of the Case

On February…

Parker, Milliken, Clark, O'Hara & Samuelian, Richard L. Carico, Richard D. Robins, Claire D. Johnson and Leslie W. Mullins for Real Party in Interest.

OPINION

DANIELSON, J.

The People of the State of California, acting through the Franchise Tax Board (FTB) have filed a petition for a writ of mandate to compel respondent superior court to vacate its order denying the petition of the FTB for an order to compel compliance with its subpoena duces tecum and to make a new and different order compelling such compliance. We grant the petition.

The issues presented in this proceeding are whether an administrative subpoena duces tecum issued by the FTB requiring an insurance company to identify policyholders under its deferred annuity plan and to disclose the amounts of interest and other income credited to the custodian accounts of those policyholders (1) was regularly issued, (2) whether it violates the right to privacy guaranteed by article I, section 1, of the California Constitution, (3) whether it violates the California Right to Financial Privacy Act, and (4) whether the FTB can be estopped to change its position retroactively as to the taxability of certain income, in a special…