In a ruling that certainly disappoints, Judge Steven Denton has dismissed the lawsuit of Mel Shapiro challenging the 2% hotel tax that supports the San Diego Tourism Management District (TMD). The suit was dismissed on the technical grounds that Mr. Shapiro lacked standing to file the suit because he was not an affected hotel owner.
From the U-T:
Shapiro, the judge concluded, “does not contend he falls into such a category of persons affected by the assessment/tax. Therefore, (he) does not have a direct interest for the purposes of a validation action.”
That legal argument, if it is sustained in a final ruling, could lead to dismissal of the other two suits.
“Under this ruling, only the hotels would be able to challenge the assessment because they pay the money,” said [City Attorney Jan] Goldsmith. “It would set a strong precedent for the other two suits.”
I agree that only those with standing should be able to sue, even when I am sympathetic to the desired outcome of the plaintiff. However, the City Attorney’s comments imply that a San Diego resident who stayed in a local hotel and was forced to pay the tax would lack standing. This seems to violate common sense. As I posted previously, the tax is collected under the color of authority of the city government, the city clerk certified the hotelier’s election result. If so, why can’t a private citizen who had to pay the tax, challenge the ruling?
Hopefully, an affected hotel that was not in favor of the TMD tax will challenge the it. The TMD tax needs to get in front of the California Supreme Court. The consequences of the murky legal character of the tax can only hurt the city, if they are not resolved. To be clear, I remain opposed based on arguments presented previously. I sincerely hope for a lawsuit that will bring clarity to the matter, because there is still risk from a lawsuit that is ruled to have standing.