Traders Sports, Inc. v. City of San Leandro

I.

Introduction

Traders Sports, Inc., and several individuals 1 (collectively, Traders) brought this action against the City of San Leandro (San Leandro) challenging a 3 percent gross receipts tax imposed by the voters of San Leandro on businesses, such as Traders, that sell concealable firearms and ammunition for concealable firearms. Traders principally alleged that the method for submitting the tax to the voters for their approval violated the procedure set out by Government Code section 53724, subdivision (b) (hereafter section 53724), which is part of Proposition 62, a statutory initiative adopted by the voters of California in 1986. Section 53724 prohibits an ordinance proposing such a tax from being put before the voters unless it has been “approved by a two-thirds vote of all members of the legislative body of the local government or district.” Despite section 53724, the San Leandro City Council (City Council) approved placing the tax on the ballot by a simple majority, rather than a two-thirds vote of its members.

This appeal challenges the sustaining of San Leandro’s demurrer to Traders’ complaint without leave to amend. In conducting our review, this *41…