The California Court of Appeal has ruled that a lawsuit challenging new water rates set by the City and County of San Francisco was improperly filed. The court's decision, made on July 24, 2026, affects residents who sought to contest the legality of the water rates, which were adopted in May 2023. The ruling emphasizes the importance of following specific legal procedures when challenging government actions.
The case, known as Toy v. City and County of San Francisco (docket number A173560), centered on a class action lawsuit filed by three plaintiffs: Jennifer Toy, Michele Dickstein, and Rose Aquilina. They claimed that the new water rates violated Proposition 218, a California law that restricts local governments from imposing fees that exceed the cost of providing services. The plaintiffs sought a refund for the increased rates, along with other forms of relief.
The dispute arose after the City adopted Resolution No. 23-103 on May 23, 2023, which set new water rates to take effect on July 1, 2023. The plaintiffs filed their lawsuit on October 3, 2023, more than 120 days after the resolution was adopted. The City argued that the plaintiffs failed to comply with validation statutes that require challenges to such government actions to be filed within a specific timeframe.
The trial court ruled in favor of the City, stating that the validation statutes were mandatory and jurisdictional. The court held that the plaintiffs' failure to comply with these statutes was fatal to their claims. The plaintiffs appealed, arguing that the City had waived the validation law by participating in the litigation for over a year without raising the issue earlier.
The Court of Appeal affirmed the trial court's ruling, stating, "We hold that the validation law was mandatory and jurisdictional, and that plaintiffs’ failure to comply with that law was fatal to their claim." The judges emphasized that when validation statutes apply, they supersede other mechanisms that private parties might use to challenge government actions.
The court explained that under California law, validation actions are designed to provide a clear and conclusive determination of the validity of government actions. The plaintiffs' claims were not timely filed according to the requirements set forth in the validation statutes, which require that any judicial action challenging water rates be commenced within 120 days of the effective date of the rates.
This ruling has significant implications for residents and local governments throughout California. It reinforces the necessity for individuals and groups to adhere strictly to legal procedures when contesting government decisions. Failure to comply with these procedures could result in the dismissal of their claims, as seen in this case.
The court's decision also highlights the importance of the validation statutes, which are intended to provide certainty and finality regarding government actions. The ruling serves as a reminder that individuals seeking to challenge such actions must be diligent in their legal processes.
Looking ahead, the plaintiffs in this case may consider their options for further legal action, including the possibility of appealing to the California Supreme Court. However, details about any potential appeal were not available in the court filing. The outcome of this case may also influence similar disputes in the future, as it sets a precedent for how validation statutes are applied in California.