In Tesoro Refining & Mktg. Co. LLC v. City of Carson, the California Supreme Court held that the Government Claims Act (GCA) preempts local governments from requiring taxpayers to comply with local administrative review procedures before filing a tax refund claim. Tesoro operates a refinery in the City of Carson, California, which, in 2017, adopted an Oil Industry Business License Tax on the gross receipts of businesses operating oil refineries within the City. The Ordinance established its own administrative refund process, requiring taxpayers to file a written refund request with the City’s finance director and, if denied, to appeal to the city manager before going to court. After a City audit, Tesoro paid the assessed deficiency under protest and filed a refund claim directly with the City clerk using the GCA’s standard form. The City denied the claim, and when Tesoro brought suit, the City argued the lawsuit was barred because Tesoro had not first followed the City’s own refund appeal process. Both lower courts sided with the City. Tesoro maintained that the GCA’s statewide claims process preempts any local government from layering on its own separate procedures. The City countered that its refund process was not a “claim” under the GCA but a separate administrative step that the GCA did not displace.
The court’s decision turned on field preemption – the principle that when the state legislature has so thoroughly regulated an area, local governments cannot add their own rules in addition. Writing for a unanimous court, the Chief Justice explained that before the GCA’s enactment, California had at least 174 different claims procedures scattered across state and local laws. These were inconsistent, hard to find, and frequently caused taxpayers with valid claims to lose their rights on technicalities. The state legislature enacted the GCA specifically to replace that patchwork with a single, uniform process for bringing money or damages claims against local government entities. Because the GCA so thoroughly covers the field, local governments are preempted from imposing additional procedures. Rejecting the City’s argument that its refund process was merely a prerequisite rather than a claim, the court reasoned that a tax refund request is itself a claim for money under the GCA. By forcing taxpayers to navigate both the City’s procedure and the state’s GCA process, the court held that the City’s ordinance “creates precisely the type of procedural trap the GCA was intended to eliminate.”
Tesoro Refining & Mktg. Co. LLC v. City of Carson, No. S289952 (Cal. Aug. 10, 2026).