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1 Cris K. O’Neall (SBN 126160)
Rowena Santos (SBN 210185)
2 GREENBERG TRAURIG, LLP
18565 Jamboree Road, Suite 500 10/22/2020
3 Irvine, California 92612
Telephone: (949) 732-6500
4 Facsimile: (949) 732-6501
oneallc@gtlaw.com
5 santosro@gtlaw.com
6 Attorneys for Plaintiffs,
TSI SEMICONDUCTORS CORPORATION, and
7 TSI SEMICONDUCTORS AMERICA LLC
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(f/k/a TELEFUNKEN SEMICONDUCTORS AMERICA LLC)
8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
FOR THE COUNTY OF PLACER
10
11 TSI SEMICONDUCTORS CORPORATION, and Case No. S-CV-0042318
TSI SEMICONDUCTORS AMERICA LLC (f/k/a
12 TELEFUNKEN SEMICONDUCTORS
AMERICA LLC), SECOND AMENDED VERIFIED
13 COMPLAINT FOR REFUND OF
Plaintiffs, PROPERTY TAXES PAID
14
vs. [Rev. & Tax. Code § 5140]
15
COUNTY OF PLACER; and DOES 1 through 10
16 inclusive,
17 Defendants.
18
19 Plaintiffs, TSI SEMICONDUCTORS CORPORATION, and TSI SEMICONDUCTORS
20 AMERICA LLC f/k/a TELEFUNKEN SEMICONDUCTORS (“Plaintiffs” herein) allege as follows:
21 PARTIES
22 1. Plaintiff TSI SEMICONDUCTORS CORPORATION (hereafter “TSI Corp.”) is a
23 Delaware corporation in good standing, authorized to do and doing business in the State of California,
24 with its principal place of business in Placer County, California. TSI Corp. is the successor in interest to
25 TSI Semiconductors LLC, which was formerly known as TELEFUNKEN Semiconductors International
26 LLC. TSI Corp. is also the parent of Plaintiff TSI SEMICONDUCTORS AMERICA LLC, which is its
27 wholly owned subsidiary.
28 2. Plaintiff TSI SEMICONDUCTORS AMERICA LLC (hereafter “TSI, LLC”), is, and at all
1
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 times pertinent hereto was, a Delaware limited liability company in good standing, authorized to do and
2 doing business in the State of California, with its principal place of business in Placer County, California.
3 TSI, LLC was formerly known as TELEFUNKEN SEMICONDUCTORS OF AMERICA, LLC, which
4 changed its name to TSI SEMICONDUCTORS AMERICA LLC on or about December 11, 2013.
5 TELEFUNKEN SEMICONDUCTORS OF AMERICA, LLC was formerly known as RENESAS
6 ROSEVILLE SEMICONDUCTOR LLC, which changed its name to TELEFUNKEN
7 SEMICONDUCTORS OF AMERICA, LLC on or about April 1, 2011. TSI, LLC is the successor in
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8 interest to TELEFUNKEN SEMICONDUCTORS OF AMERICA, LLC. As used herein, the term
9 “Plaintiffs” means and refers to TSI Corp. and TSI, LLC and their respective predecessors in interest.
10 3. Defendant County of Placer (“County”) is now, and at all times relevant hereto was, a
11 political subdivision of the State of California. The County exercises its powers through its Board of
12 Supervisors, or through agents and officers acting under the authority of the Board of Supervisors. The
13 County, through its elected and/or appointed officials illegally assessed, levied and collected the property
14 taxes paid by Plaintiffs which are the subject of this action. Specifically, the Placer County Assessor
15 (“Assessor”) is responsible for assessing Plaintiffs’ property at fair market value each year.
16 4. The true names and capacities, whether individual, corporate, associate, or otherwise, of the
17 defendants named herein as Does 1 through 10, inclusive, are presently unknown to Plaintiffs, who
18 therefore sues such defendants by their fictitious names. Plaintiffs will amend this Complaint to insert the
19 true names and capacities of such defendants if and when they become known. Plaintiffs are informed and
20 believe, and on that ground, allege that at all times pertinent hereto, Doe Defendants 1 through 10 were
21 legally responsible to Plaintiffs for the claims made in this Complaint.
22 PROPERTY DESCRIPTION
23 5. This action concerns the property tax assessment of personal property and fixtures located
24 at 7501 Foothills Boulevard, Roseville, California, which is assessed with reference to Assessment
25 Number 800-037-919-000 as pertinent to this action (the “Subject Property”). Plaintiffs acquired the
26 Subject Property (i.e., personal property and fixtures), together with the underlying real property and
27 related side agreements, from Renesas Electronics Corporation (“Renesas”) for a total transaction value of
28 $53,000,000 pursuant to a Purchase Agreement dated March 30, 2011. Collectively, the real property and
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SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 the Subject Property (personal property and fixtures) was used, or historically had been used, to (a)
2 manufacture 200 mm semiconductor wafers, and (b) service the manufacturing equipment. The
3 $53,000,000 purchase price also included a wafer supply agreement with the seller, Renasas. Plaintiffs and
4 Renasas allocated $53,000,000 to fixed assets totaling $48,742,864 by asset class, and of this amount
5 $23,000,000 was allocated to real property and $25,742,864 allocated to personal property and fixtures.1
6 Only the assessed value of the Subject Property (personal property and fixtures) is at issue in this
7 proceeding. The value of the underlying real property was addressed by a separate assessment appeal
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8 proceeding and is not addressed in this action.
9 THE ASSESSMENTS
10 6. This action challenges the assessed value of the Subject Property for four tax years, 2012-
11 2013, 2013-2014, 2014-2015 and 2015-2016. Taxes for each year are required to be assessed at their “fair
12 market value” as of the January 1, lien date for each year. By way of example taxes for the 2012-2013 tax
13 year are required to be based upon the fair market value as of January 1, 2012.
14 7. The original assessment for each tax year at issue, of just the Subject Property was
15 determined by applying the California State Board of Equalization’s (“SBE”) recommended valuation
16 factors to the Plaintiffs’ reported acquisition costs (i.e., reported installed cost of equipment, less an annual
17 allowance for depreciation). The original assessments for each respective tax year and lien date were:
18
Original Assessed Value
19 Lien Date (Personal Property & Fixtures)
20 January 1, 2012 $29,559,700
21 January 1, 2013 $28,018,790
22 January 1, 2014 $44,288,160
23 January 1, 2015 $44,626,160
24
25 8. The Assessor conducts regular audits of the Subject Property every four years. The result of
26
1
27 The purchase price was allocated using Generally Accepted Accounting Principles (“GAAP”); however
certain adjustments are required for property tax including the removal of non-taxable software, re-
28 designating certain fixtures as personal property, and adding the value of expensed spares and supplies.
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SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 such audits may lead to tax refunds for over-assessments or escape assessments where the Assessor
2 determines property is underassessed. As is pertinent to this case, the Assessor audited Plaintiffs’ Subject
3 Property for the tax years at issue and rejected Plaintiffs’ reported acquisition costs. The Assessor instead
4 adopted the historic acquisition cost of the predecessor company, Renesas, and applied the SBE
5 recommended valuation factors to such historic costs, resulting in escape assessments for each of the tax
6 years at issue. The net assessed value increases reflected in the escape assessments for each year (hereafter
7 the “Audit Escapes”) were:
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8
Lien Date Audit Escapes
9
January 1, 2012 $91,234,874
10
January 1, 2013 $76,207,182
11
January 1, 2014 $63,611,038
12
January 1, 2015 $56,959,329
13
14 THE ASSESSMENT APPEAL APPLICATIONS
15 9. Plaintiffs timely filed Applications for Changed Assessment which the Clerk of the Placer
16 County Assessment Appeals Board (the “AAB” or “Board”) designated as Application Nos. R2016-0006,
17 R2016-0007; R2016-0008, and R2016-0009 (the “Applications”). In connection with the hearing on the
18 Applications, Plaintiffs sought a reduction of the January 1, 2012 assessment to $37,932,5022, which was
19 based upon the Plaintiffs’ purchase price allocation of the Subject Property, and sought corresponding
20 reductions based on that purchase price allocation for the 2013 to 2015 assessment years. In the event the
21 AAB declined to make that reduction based upon the purchase price allocation, Plaintiffs sought a
22 reduction to the following values, which Plaintiffs contended reflected the fair market value of the Subject
23 Property, after accounting for corrections for doubly assessed property, the erroneous inclusion of the
24 value of supplies in the assessed value, and functional and economic obsolescence:
25
26
27
2
$37,932,502 reflects the adjustment from GAAP basis to property tax reporting basis and removes non-
28 taxable software and includes clean-rooms and expensed spares and supplies.
4
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 Lien Date Plaintiff’s Opinion of Value
2 January 1, 2012 $42,600,341
3 January 1, 2013 $36,233,303
4 January 1, 2014 $35,050,713
5 January 1, 2015 $32,188,316
6
7 CLAIM FOR REFUND AND PAYMENT OF TAXES
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8 10. Plaintiffs properly and timely designated the Applications as Claims for Refund. Plaintiffs
9 duly and timely paid all taxes for which refund is sought by this action, except as to the remaining unpaid
10 portion escaped taxes which are subject to a statutorily permitted and County-approved payment plan,
11 with respect to which Plaintiffs have duly and timely paid all taxes as and when due in accordance with
12 the terms of the payment plan.
13 ASSESSMENT APPEALS BOARD PROCEEDINGS AND BOARD ERRORS
14 11. The Applications came on regularly for hearing before the Board on December 5 and 6,
15 2017. The hearing on the Applications was conducted before Board members Mike DeFerrari, Chairman
16 of the Board, and Patti Beard and Ben Herb Members of the Board. The Board issued its Decision on June
17 29, 2018. This action is timely filed within six months of the issuance of the Board’s Decision.
18 12. In connection with the hearing on the Applications, the Assessor had the Burden of Proof
19 pursuant to Revenue and Taxation Code section 167.
20 13. There were several main reasons for the disparity in the parties’ opinions of value, all of
21 which in some respect relate to the age, capacity and utility of the Subject Property. It is undisputed that
22 the Subject Property is a special purpose property that is constructed and operated as a semiconductor
23 wafer manufacturing facility. The manufacture of semiconductor wafers requires a substantial amount of
24 task-specific equipment. The subject manufacturing facility was built in 1984 beginning with the K- Line
25 to manufacture 5” (125 mm) wafers; the M-Line was completed in 1992 to manufacture 6” (150 mm)
26 wafers; M-Line was converted in 2008 to manufacture 8” (200 mm) wafers; and by 2010 the entire 6”
27 (150 mm) wafer operation was terminated, as was most of the K-Line operation. The entire plant is
28 interconnected with fixtures dating back to 1984 with additions and modifications throughout the years. It
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SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 is also undisputed that 200 mm wafer manufacturing was the predominate technology until approximately
2 2010, when 300 mm wafer manufacturing consumed more market share than 200 mm wafer
3 manufacturing, and the peak for 200 mm wafer manufacturing was declining, reflecting a global shift to
4 300 mm wafer manufacturing. As to plant capacity, the Director of Engineering for TSI testified that the
5 subject plant was operating at 55-60 percent of capacity with active capacity of approximately 6,500
6 wafers per month in 2016 and that the capacity and utilization was slightly less in 2012 through 2015. His
7 testimony was undisputed. He also testified that the plant is in various stages of disrepair with many
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8 systems in need of repair and overhaul; the current facilities are not sized to expand to full capacity; the
9 existing clean rooms are not suitable for manufacturing advanced technology nodes; and the site would
10 require significant upgrades and repairs to bring it up to full manufacturing capability, which testimony
11 was also undisputed. Finally the CEO of TSI Corp. testified that the subject property had positive
12 operating income of $5,772,000 for calendar year end (CYE) 2012; negative operating income of
13 $36,041,000 for CYE 2013; negative operating income of $33,492,000 for CYE 2014; negative operating
14 income of $13,288,000 for CYE 2015; and negative operating income of $3,689,000 for CYE 2016, and
15 he also testified that the change in profitability from a positive $5,772,000 in CYE 2012 to a negative
16 $36,041,000 for CYE 2013 was related to the expiration of the initial Wafer Supply Agreement with
17 Renesas (Seller), which was Plaintiffs’ primary customer. This testimony was also uncontradicted. The
18 foregoing factors negatively impact the property’s value in the marketplace.
19 Purchase Price Allocation Issue.
20 14. At the AAB hearing, Plaintiffs contended that the AAB should establish the assessed value
21 of the Subject Property with reference to its purchase price. Plaintiffs acquired the Subject Property
22 (personal property and fixtures), together with the underlying real property and related side agreements,
23 from Renesas Electronics Corporation for a total transaction value of $53,000,000, through a Purchase
24 Agreement dated March 30, 2011. Of this amount, the allocated purchase price for the Subject Property
25 adjusted from GAAP to property tax was $37,932,502 as of January 1, 2012.
26 15. Plaintiffs’ evidence that the Purchase Agreement dated March 30, 2011 was an open-
27 market, arm’s length transaction was undisputed by contrary evidence. The Assessor did not introduce any
28 evidence to establish that the subject sale was not an open market transaction and that other market
6
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 participants would have paid a different price for the Subject Property. The Assessor instead argued that
2 evidence demonstrating that the March 30, 2011 transaction was not an open market transaction either
3 does not exist or cannot be verified and that the Board’s ruling in a prior real property assessment appeal
4 proceeding (re: Application for Changed Assessment No. S2014-0022) extends to this case.
5 16. The allocated purchase price for the Subject Property determined in an arm’s length
6 transaction by two knowledgeable market participants is the best evidence of the value of the property
7 acquired. The Board erroneously rejected the allocated purchase price as being indicative of the taxable
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8 value of the Subject Property.
9 Obsolescence within the Cost Approach Valuation Methodology.
10 17. At the AAB hearing, Plaintiffs presented a full reproduction cost value analysis. Plaintiffs
11 valuation consultant first determined the depreciated reproduction cost of the Subject Property for each
12 year, and then made an adjustment to remove property that the Assessor double-assessed and another
13 adjustment to reflect supplies actually on hand. The sum of those numbers reflected reproduction cost, less
14 physical depreciation, but before deduction of additional functional and/or external (also called economic)
15 obsolescence.
16 18. Property Tax Rule 6, which is a mandatory regulation that must be followed by assessors
17 and assessment appeals boards, mandates that full depreciation, including external and functional
18 obsolescence, be deducted in a legally sufficient cost approach valuation:
19 (e) Reproduction or replacement cost shall be reduced by the amount that
such cost is estimated to exceed the current value of the reproducible
20 property by reason of physical deterioration, misplacement, over- or
underimprovement, and other forms of depreciation or obsolescence. The
21 percentage that the remainder represents of the reproduction or replacement
cost is the property’s percent good.
22
* * * * *
23
(f) When the allowance made pursuant to paragraph (e) exceeds the amount
24 included in the depreciation tables used by the assessor, the reasons therefor
shall be noted in the appraisal record for the property and the amount thereof
25 shall be ascertainable from the record.
26 In compliance comply with Rule 6, Plaintiffs deducted all forms of depreciation, i.e., physical
27 depreciation, functional obsolescence, and economic obsolescence (also called external obsolescence).
28 Plaintiffs’ cost approach valuation followed the State Board of Equalization’s Guidelines for
7
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 Substantiating Additional Obsolescence for Personal Property and Fixtures (“Guidelines”). Within the
2 cost approach, some depreciation is accounted for by State Board of Equalization depreciation schedules
3 or valuation factors. However, some depreciation, such as functional obsolescence and external
4 obsolescence is often not captured by those schedules or factors. As to functional obsolescence, the
5 Guidelines provide:
6
When the capacity or efficiency of a property to perform the function for
7 which it was intended declines, functional obsolescence is present. Two
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common methods of estimating functional obsolescence in equipment, if
8 present, include analysis of excess capital costs and analysis of excess
operating costs. If the property’s replacement cost is less than its
9 reproduction cost, excess capital costs may be estimated by calculating
the difference between reproduction cost and replacement cost.
10 (Emphasis added.)
11 Utilizing this method, Plaintiffs quantified functional obsolescence at 54%, and deducted that amount
12 from the reproduction cost of the subject property. This is permitted under Property Tax Rule 6(f), quoted
13 above.
14 19. As to External obsolescence, the Guidelines provide:
15 External obsolescence is typically incurable because it is not within the
control of the property owner, but it is not always permanent. External
16 obsolescence can either diminish or increase in the future .... In the
breakdown method, calculation of external obsolescence is typically the last
17 step in the determination of market value. The measurement of external
obsolescence is removed from the replacement cost new less physical
18 deterioration and functional obsolescence ....
19 An inutility penalty may be used to measure external obsolescence. One
factor that may cause external obsolescence is a reduced demand for the
20 product…
21 The following is one method for calculating an inutility penalty.
22 Inutility percent = [ 1 - (Capacity B / Capacity A)ˣ] x 100
23 Capacity A = rated design or capacity
24 Capacity B = actual production
25 x = exponent or scale factor
26 * * *
27 The most common scale factors are between 0.6 and 0. 7 .... [However,
s]caling factors should be selected for the property in question.
28
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SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 Additionally, inutility must be evaluated in the context of whether the
obsolescence has already been recognized through market forces typically in
2 place for a recent sale. For example, recently purchased equipment is
presumed to be acquired at market value, reflecting the expected
3 capacity (rate or design capacity) and usage (actual production) at the
time of acquisition; any additional inutility adjustment should be viewed in
4 this context. (Emphasis added.)
5 Utilizing this method, Plaintiffs quantified additional economic obsolescence at 43% which is a measure
6 of overall reduced demand for the Subject Property.
7 20. In contrast, the Assessor erred by not separately quantifying and deducting functional or
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8 economic obsolescence. The Assessor simply contended that it was not necessary to comply with this
9 mandatory step, because all such depreciation was supposedly included in the State Board of Equalization
10 depreciation schedules.
11 21. The Board recognized that the Subject Property suffered from additional depreciation. The
12 Board’s findings provide:
13 However, we find that an additional allowance under the depreciation tables
is warranted in this case based upon the fact that the facilities and fixtures
14 were overbuilt and are superadequate to serve the semiconductor equipment
(Finding #5). We further find that an additional element of economic
15 obsolescence should be applied to the semiconductor equipment due to the
fact that the 200 mm wafer produced at the site has been losing market share
16 to the newer 300 mm wafer technology and that this additional obsolescence
was not adequately considered in the State Board of Equalization depreciation
17 tables (Finding #5).
18 (Board Decision, p. 7:4-10.) Instead, the Board made an arbitrary 10% reduction that did not follow the
19 State Board of Equalization Guidelines, did not follow any approved appraisal methodology, and did not
20 have any justifiable or explained basis. The Board’s decision provides:
21 The Board finds that the Assessor met her burden by demonstrating that the
property was properly valued using methods approved by the BOE (Finding
22 #2); however the Board also finds that further adjustments are appropriate as
discussed above to compensate for the superadequacy of the fixtures and
23 additional economic obsolescence of the semiconductor equipment (Finding
#5).
24
The Board finds that an additional 10% reduction in the semiconductor
25 equipment and the fixtures is necessary to properly address additional
economic obsolescence and superadequacy applicable to the Subject
26 Property but not covered in the BOE tables (Finding #5).
27
28 (Board Decision, p. 10: 14-20). The Board’s 10% reduction was arbitrary, insufficient to account for all
9
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 economic and/or functional obsolescence or superadequacy in the Subject Property, and contrary to law,
2 i.e., Property Tax Rule 6.
3 Burden of Proof
4 22. The Assessor failed to carry her burden of proof in this case because the Assessor did not
5 establish that: (1) the original assessment was incorrect, (2) that Plaintiffs’ purchase price of the facility
6 for $53,000,000 did not establish the fair market value of all property acquired in that transaction, and (3)
7 did not establish a methodologically correct cost approach valuation value indicator because of the
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8 Assessor’s failure to deduct both functional and external obsolescence. The Board erred by determining
9 that the Assessor carried her burden of proof.
10 ERRONEOUS IMPOSITION OF REVENUE AND TAXATION CODE
11 SECTION 531.4 INTEREST
12 23. Upon the Board’s approval of the escape assessments, the County erroneously and/or
13 illegally imposed interest pursuant to Revenue and Taxation Code section 531.4 (“Section 531.4 Interest”)
14 on the Subject Property without the necessary factual findings required from the Board.
15 24. Section 531.4 Interest is not automatically imposed upon the Board’s approval of an escape
16 assessment increasing the assessed value of property. (HGST, Inc. v. Cty. of Santa Clara (2020) 45
17 Cal.App.5th 934, 950.) Rather, in order to impose Section 531.4 Interest the Board was required to make
18 specific findings as to the portions of the Subject Property that Plaintiffs did not accurately report to the
19 Assessor, if any, and to what extent the escape assessments were caused by Plaintiffs’ failure, if any, to
20 report the Subject Property accurately to the Assessor under Section 531.4. (Rev. & Tax. Code § 531.4;
21 HGST, Inc., supra, 45 Cal.App.5th at pp. 950-952.)
22 25. The Board’s decision failed to make the necessary factual findings to determine whether—
23 or how much—Section 531.4 Interest should be imposed and assessed. Specifically, the Board made no
24 findings on what portion of the Subject Property was or was not reported accurately, or to what extent the
25 escape assessments were caused by Plaintiffs’ failure, if any, to report the Subject Property accurately
26 under Section 531.4.
27 26. The Administrative Record shows and the Board’s decision impliedly supports the
28 conclusion that Plaintiffs accurately reported the Subject Property and that no Section 531.4 Interest
10
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 should have been charged. Plaintiffs accurately reported the Subject Property for the four tax years, 2012-
2 2013, 2013-2014, 2014-2015 and 2015-2016, in the property renditions and supporting documentation that
3 Plaintiffs submitted to the Assessor.3 Plaintiffs also reported accurately the valuation of the Subject
4 Property when they submitted to the Assessor information regarding the sale of the Subject Property,
5 which is a recognized approach to valuation.4
6 27. The Administrative Record and the Board’s Findings show that the primary dispute
7 between Plaintiffs and the Assessor relates to whether and how much superadequacy and economic
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8 obsolescence should be deducted from the reported and agreed cost for the Subject Property, which is a
9 complex issue in the application of the Cost Approach. The Board acknowledged this was the primary
10 issue in its decision: “[t]his is a unique, special purpose facility that requires a careful examination of
11 numerous factors to arrive at a market value for the Subject Property.”5
12 28. The Board further stated:
13 This rather complex case requires this Board to determine the value of
semiconductor manufacturing equipment and fixtures used to service the
14 equipment as well as other personal property when the technology is changing
on a daily basis. Real property values that can be tested against other
15 comparable sales allow us to confidently arrive at estimated values for real
property. Unfortunately, valuing personal property largely void of an active
16 market-place with buyers and sellers based upon depreciation of assets is
more imprecise, particularly when the property involves equipment used to
17 produce a rapidly evolving product… . Property Tax Rule 6(f) and Assessors’
Handbook 581 instruct us to be cognizant of unique facts and situations that
18 might affect the fair market value of the property and require additional
adjustments from the standard tables. 6
19
20 29. The primary source of the escape assessments in this matter was a bona-fide dispute as to
21 the amount of superadequacy and economic obsolescence to be deducted in the valuation of the Subject
22 Property, which is a complex valuation or appraisal issue. It cannot be said that Plaintiffs failed to
23
24
3
Assessor’s Board presentation at page 038 (AR-0088); Plaintiffs’ Business Property Statements (Form
25 571-Ls) and other documents supplied to the Assessor for the Tax Years (AR-0382 to AR-0401
[2012/2013]; AR-0418 to AR-0424 [2013/2014]; AR-0441 to AR-0484 [2014/2015]; AR-0502 to AR-
26
0556 [2015/2016]; AR-0663 to AR-0666).
4
27 Assessor’s Board presentation at page 039 (AR-0089); Board Decision at 4:7-10 (AR-1801).
5
Board Decision, p. 8:12-13 (AR-1806).
28 6
Board Decision, p. 4:8-14, 8:10-12 (AR-1802, AR-1806).
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SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 accurately and fully report the Subject Property to the Assessor.7 Nor can it be said that a failure to report
2 accurately was the cause of the escape assessments. In sum, it was the dispute over the complex issue of
3 superadequacy and economic obsolescence, and not Plaintiffs’ reporting of the Subject Property (accurate
4 or otherwise), that was the primary cause of the escape assessments.
5 30. The County erroneously and/or illegally imposed Section 531.4 Interest, which Plaintiffs
6 paid, without the requisite factual findings from the Board.
7 FIRST CAUSE OF ACTION
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8 FOR RECOVERY OF TAXES, INCLUDING SECTION 531.4 INTEREST, PAID AFTER DENIAL OF
9 CLAIMS FOR REFUND [REV. & TAX. CODE,§ 5140]
10 31. Plaintiffs incorporate each of the preceding paragraphs as though fully set forth herein.
11 32. The property taxes, including Section 531.4 Interest, for which Plaintiffs claim a refund are
12 based on assessments and taxes that were erroneously and/or illegally assessed, levied and/or collected by
13 the County. They are therefore subject to refund pursuant to Revenue and Taxation Code section 5096(b)-
14 (c).
15 33. The assessed values adopted by the Board were derived in a manner that violated
16 controlling law, were arbitrary, erroneous, and were without any rational basis for the reasons alleged
17 above. The Board erred and/or abused its discretion because the taxable values determined by the Board
18 contradict the administrative record, are unsupported by the administrative record, are excessive, arbitrary,
19 illegal, void, in excess of discretion and/or violate the standards prescribed by law.
20 34. Moreover, the Section 531.4 Interest imposed upon the Board’s approval of the escape
21 assessments, and thereafter paid by Plaintiffs, were erroneously and/or illegally imposed and collected by
22 the County for the reasons alleged above, and Plaintiffs must be refunded amounts paid pursuant to such
23 invalid and unlawful imposition of Section 531.4 Interest, according to proof, plus interest as provided by
24 law.
25 7
Pages 040 and 043-2 (AR-0090, AR-0095) of the Assessor’s Board presentation noted, and Plaintiffs
26 agreed, that clean rooms, underground tanks, and a few other items were originally reported to the
Assessor as real property, and the Assessor’s audit re-classified those items as personal property and
27 fixtures. (Board Hearing Transcript, Dec. 6, 2017, 356:1-14 [AR-1419]; Board Hearing Exh. 10,
Audit/Appeal Valuation Analysis as of Jan. 1, 2012 [AR-0756]; Applicant’s Closing Brief, 11:2-4 and
28 12:5-7 [AR-1662, AR-1663].)
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SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 35. Plaintiffs have exhausted all available and applicable administrative remedies by filing
2 Applications for Changed Assessment and Claims for Refund in a timely manner and participating in the
3 administrative appeal process.
4 36. Plaintiffs timely filed this Complaint pursuant to Revenue and Taxation Code section 5140.
5 37. The Board’s Findings are so deficient that a remand is required to secure reasonable
6 compliance with the elements of findings required by law, to reduce the assessed value accordingly, and to
7 deny the County’s erroneous and/or illegal imposition of Section 531.4 Interest. The County’s, the
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8 Assessor’s and the Board’s actions were arbitrary and capricious. The Board’s decision denying the
9 Applications was arbitrary and capricious for the reasons described earlier in this complaint, and its
10 Findings and conclusions are deficient. As a consequence, Plaintiffs are entitled to an award of reasonable
11 attorney’s fees under Government Code section 800 and Revenue and Taxation Code section 1611.6.
12 38. The Assessor had an obligation to file a declaratory relief action under Revenue and
13 Taxation Code section 538 concerning her manner and mode of assessment and her cognitive decision to
14 disregard applicable statutes, case law, and property tax rules in connection with the assessment of the
15 Subject Property. The Assessor’s failure to do so entitles Plaintiffs to an award of attorney’s fees under
16 Revenue and Taxation Code section 5152.
17 39. Plaintiffs are entitled to an award of its attorney’s fees and costs as provided by law.
18 PRAYER
19 WHEREFORE, Plaintiffs pray:
20 1. That Plaintiffs receive judgment against the County of Placer;
21 2. That the Court find the Board acted arbitrarily and erred as a matter of law;
22 3. That the Court remand the matter to the Board to determine the value of the Subject
23 Property and provide the Board with specific instructions concerning the legally correct manner for
24 valuing the Subject Property using proper and legal valuation methods;
25 4. That the Court remand the matter to the Board with instruction that the Board is to make
26 factual findings required under Section 531.4, to determine whether Section 531.4 Interest on the escape
27 assessments, if any, is or is not appropriate;
28 5. That the Court retain jurisdiction of this matter to ensure compliance with such
13
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 instructions;
2 6. That the Court enter a monetary judgment for refund in favor of Plaintiffs in an amount
3 according to proof;
4 7. For interest on refunds resulting from the corrected roll values and/or the denial of Section
5 531.4 Interest as provided by law;
6 8. For attorney’s fees and costs allowable by law; and
7 9. For such other and further relief as the Court deems just and proper.
Placer Superior Court Accepted through eDelivery submitted 10-22-2020 at 04:35:06 PM
8
DATED: October 22, 2020 GREENBERG TRAURIG, LLP
9
10
By:
11 Cris K. O’Neall
Rowena Santos
12
Attorneys for Plaintiffs
13 TSI SEMICONDUCTORS CORPORATION, and
TSI SEMICONDUCTORS AMERICA LLC
14 (f/k/a TELEFUNKEN SEMICONDUCTORS
AMERICA LLC)
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14
SECOND AMENDED VERIFIED COMPLAINT FOR REFUND OF PROPERTY TAXES PAID
1 VERIFICATION
2 STATE OF CALIFORNIA, COUNTY OF PLACER
3 I have read the foregoing SECOND AMEND ED VERIFIED COMPLA INT FOR REFUND OF
PROPER TY TAXES PAID and know its contents.
4
0 I am a party to this action. The matters stated in the foregoing document are true of my own
I
5 knowledge except as to those matters which are stated on information and belief, and as to those matters
believe them to be true.
6
lRl I, Bruce Gray, am the CEO ofTSI Semiconductors Corporation, on behalf of which I am
7 I am informed and believe and on that ground allege that the
Placer Superior Court Accepted through eDelivery submitted 10-22-2020 at 04:35:06 PM
authorized to make this verification. lRl
8 matters stated in the foregoing document are true.
9 □ I am one of the attorneys for _ _ _ _, a party to this action. Such party is absent from the
county where such attorneys have their offices, and I make this verification for and on behalf of that party
10 for that reason. I am informed and believe and on that ground allege that the matters stated in the
foregoing document are true.
11