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Federal Challenge to Measure ULA Dismissed: Los Angeles Superior Court Now the Only Arena For ULA Legal Challenge

Judge Redirects Controversial Dispute, Leaving Fate of ULA in the Hands of Local Courts

By Dolores Quintana

On September 5th, a federal judge dismissed the legal challenge to Measure ULA, redirecting the contentious transfer tax debate to the confines of the Los Angeles Superior Court, the sole remaining legal arena to determine the tax’s destiny, as reported by The Real Deal.

In the case of Newcastle Courtyards LLC v City of Los Angeles, Judge John Kronstadt ruled that federal court was not the appropriate venue for deliberating a Los Angeles tax matter, which the Newcastle case appeared to be addressing. Kronstadt underscored the limited jurisdiction of federal courts, stating, “Federal courts are courts of limited jurisdiction. Accordingly, when a federal court finds that it lacks subject matter jurisdiction, it must dismiss the complaint in its entirety.”

Newcastle Courtyards’ attorney, Keith Fromm, expressed intentions to appeal the decision. Fromm contends that Measure ULA infringes upon the U.S. Constitution’s equal protection clause. His second argument is that since he believes that Measure ULA has damaged the real estate market in Los Angeles, it does not serve the interests of the residents of Los Angeles. 

Judge Kronstadt has rejected Newcastle Courtyards’ assertion that Measure ULA had exceeded its bounds by classifying it as a tax. The plaintiff contended that ULA was, in essence, a charge on a specific group of individuals. The judge concurred with the City of Los Angeles’ position, asserting that Measure ULA was a citizen-sponsored initiative endorsed by the city’s voters, functioning within a legislative capacity when exercising their initiative power.

Newcastle Courtyards remains actively involved in a separate legal challenge to Measure ULA within the L.A. Superior Court. In April, their case merged with the Howard Jarvis Taxpayers Association and Apartment Association of Greater Los Angeles. The upcoming milestone, in this case, is a case management conference scheduled for October 24th.

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