Rarely does it give such satisfaction to report the dismissal of an appeal. A group of businesses who had benefited from local protectionism — which had prevented newer businesses from competing with the incumbents — were dismayed when the trial court struck down the protectionist scheme as unconstitutional. Though the incumbents were not parties to the lawsuit, they appealed the ruling anyway.
Held: The non-party incumbent businesses had no legal right to challenge the dismantling of the protectionist laws that had benefited them.
In Robert Taft Jr. v. Vargas (D4d2 Sept. 17, 2021) 2021 WL 4237140 no. E076173 (nonpub. opn.), the voters of the City of Jurupa passed an initiative in 2018 that allowed exemptions from the general prohibition on operating marijuana dispensaries. The exemptions were limited by population, so based on current population only six exemptions would be issued.
The appellants here were among the six incumbent businesses who received the exemptions.
The exemption procedure provided a "priority" track for applicants who had registered as a "commercial cannabis" dispensary with the Secretary of State by September 2016. That is, two years before the exemption procedure was even enacted. All others had to wait 100 days later to submit a "non-priority" application.
And would you believe it? By that time, there were no exemptions left.
The plaintiff, Robert Taft Jr., was one of the disappointed non-priority applicants, and smelled something amiss and so sued the city.
The trial court agreed, and struck down the application procedure as unconstitutional on equal protection grounds. No party appealed.
The incumbents appealed, however. But the incumbents had a standing problem. “[N]otwithstanding an appealable judgment or order, ‘[a]n appeal may be taken only by a party who has standing to appeal.’ ” (Conservatorship of Gregory D. (2013) 214 Cal.App.4th 62, 67; see also Estrada v. RPS, Inc. (2005) 125 Cal.App.4th 976, 985 [“[A] party cannot assert error that injuriously affected only nonappealing coparties”].) This standing requirement “is jurisdictional” and thus “cannot be waived.” (Conservatorship of Gregory D., supra, 214 Cal.App.4th at p. 67.)
Here, the incumbents were not harmed. The trial court merely struck down the exemption procedure. As the court noted: "Other relief sought by the plaintiffs that conceivably could have injuriously affected appellants was denied by the trial court. Thus, the judgment was, in effect, in appellants' favor...."
But the court's ruling did not affect any of the incumbent's exemptions, which remained in force. So the only "harm" the incumbents suffered was that they would no longer enjoy the same level of protectionism that had enjoyed before. Protectionism is not a legally cognizable interest.
"We rarely have cause to apply the principle that a party cannot appeal a favorable ruling. In this case, however, we do."
Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.