Attorney General v. Nevada Tax Comm'n

• Decision Date: 24 April 2008
• Docket Number: No. 48292.,48292.
• Citation: 181 P.3d 675
• Parties: George J. CHANOS, Attorney General of the State of Nevada, Appellant, v. NEVADA TAX COMMISSION, an Agency of the State of Nevada; and Southern California Edison, Respondents.
• Court: Nevada Supreme Court

181 P.3d 675

George J. CHANOS, Attorney General of the State of Nevada, Appellant, v. NEVADA TAX COMMISSION, an Agency of the State of Nevada; and Southern California Edison, Respondents.

No. 48292.

Supreme Court of Nevada.

April 24, 2008.

Catherine Cortez Masto, Attorney General, and Keith D. Marcher and Neil A. Rombardo, Senior Deputy Attorneys General, Carson City, for Appellant.

Norman J. Azevedo, Carson City, for Respondent Southern California Edison.

McDonald Carano Wilson LLP and Thomas R.C. Wilson II, Ryan L. Bellows, and James C. Giudici, Reno, for Respondent Nevada Tax Commission.

Burton Bartlett & Glogovac and Laura A. Clark, Scott A. Glogovac, and Tiffany A. Rose, Reno, for Amicus Curiae Nevada Press Association.

Snell & Wilmer, LLP, and Samuel P. McMullen and Shane J. Young, Las Vegas, for Amici Curiae Nevada Taxpayers Association, the Greater Las Vegas Chamber of Commerce, the Retail Association of Nevada, the Nevada Manufacturers Association, the Nevada Franchised Auto Dealers Association, and the Nevada Motor Transport Association.

BEFORE THE COURT EN BANC.

OPINION

By the Court, HARDESTY, J.:

Nevada's Open Meeting Law, NRS 241.020, provides that all meetings of public bodies must be open to the public unless a statutory exception clearly and unambiguously exempts a particular proceeding. Respondents claim that the version of NRS 360.247 in effect at the time of the events in issue¹ created a complete exception to the Open Meeting Law and granted respondent Nevada Tax Commission the discretion to close an entire taxpayer appeal. We conclude that respondents' overbroad interpretation of the statutory exception would eviscerate the Open Meeting Law's mandate that public bodies deliberate and vote in public meetings.

This matter arises from the Tax Commission's decision, following a series of hearings that it closed to the public, to grant respondent Southern California Edison a refund of use taxes it paid from 1998 to 2000. Thereafter, believing that the Tax Commission violated the Open Meeting Law by deliberating and voting on Edison's appeal in closed sessions, appellant, the Attorney General filed a complaint in district court under NRS 241.037 to void the Tax Commission's refunds to Edison. The district court ultimately dismissed the complaint.

We consider on appeal the extent to which the Tax Commission could close its proceedings to the public under the exception to the Open Meeting Law set forth in former NRS 360.247. Because we strictly construe exceptions to the Open Meeting Law in favor of openness, we conclude that the exception in NRS 360.247 permitted the Tax Commission to close only the portion of its sessions at which it received confidential evidence and questioned the parties and heard argument concerning the confidential information. Therefore, the Tax Commission violated the Open Meeting Law to the extent that it received nonconfidential evidence, deliberated, and voted on Edison's tax appeal in closed sessions. Accordingly, because actions taken in violation of the Open Meeting Law are void,² we reverse the district court's judgment.

FACTS

Edison filed with the Department of Taxation several claims for refunds of use taxes it paid between March 1998 and December 2000. Specifically, Edison argued that the Department's interpretation of NRS 372.270,³ which exempts mine proceeds from use tax, was unconstitutional. The Department denied Edison's claims in December 2002 and May 2003, and Edison appealed to the Tax Commission. The Tax Commission consolidated all of the claims into one case and assigned the appeal to a hearing officer. The hearing officer upheld the Department's denial of Edison's refund. Edison then appealed the hearing officer's decision to the Tax Commission.

The Tax Commission conducted four sessions on Edison's appeal, from November 2004 to May 2005. A deputy attorney general was present at each one. When Edison requested that the Tax Commission close every session under NRS 360.247, the Tax Commission granted each request without any explanation on the record. During each closed hearing, the Tax Commission received evidence, heard argument, questioned the parties, deliberated, and voted in ways that affected the appeal. During a closed hearing on May 9, 2005, the Tax Commission deliberated and conducted the final vote to grant Edison's requested tax refunds.

Although the deputy attorneys general in attendance at the Tax Commission's proceedings did not object while the Tax Commission was taking action or deliberating, the record reveals that the Tax Commission received advice that it should deliberate and take action on Edison's appeal in open session. In particular, at Edison's November 2004 hearing, when Edison moved for a closed hearing under NRS 360.247, the deputy attorney general in attendance advised the Tax Commission that there was no need to close the hearing. She further informed the Tax Commission that a formal opinion regarding the propriety of closing its sessions was forthcoming. The Tax Commission declined to follow the deputy attorney general's advice and, following its long-standing practice, closed the hearing. In April 2005, the deputy attorney general assigned to the Tax Commission prepared a memorandum for the Tax Commission regarding its obligations under the Open Meeting Law and attached an Attorney General's 1979 letter, which advised that the Tax Commission should close its sessions for the submission of information made confidential by former NRS 372.750 but open them for deliberations and voting.⁴ In the April 2005 memorandum, the deputy attorney general clarified that both deliberation and voting on a taxpayer appeal must occur in open session. The Tax Commission again declined to follow the Attorney General's advice and continued to close all of the Edison hearings — deliberating and voting in closed session.

In June 2005, the Attorney General filed suit in district court under NRS 241.037, seeking to void the Tax Commission's decision, alleging that the Tax Commission had violated Nevada's Open Meeting Law by deliberating and voting on Edison's appeal in closed session. The district court found that the Legislature had created an exception to the Open Meeting Law for all taxpayer appeal hearings before the Tax Commission and entered judgment dismissing the Attorney General's complaint. The court also determined that, because a deputy attorney general was present at each of Edison's hearings and failed to object to the Tax Commission taking action and deliberating in closed session, notions of estoppel prevented the Attorney General from enforcing the Open Meeting Law against the Tax Commission regarding Edison's appeal. The Attorney General now appeals.

DISCUSSION

On appeal, the Attorney General argues that the Open Meeting Law required the Tax Commission to deliberate and vote on Edison's appeal of its use tax refund claim in an open session. The Tax Commission and Edison respond that the version of NRS 360.247 in effect at the time of the events at issue provided a specific statutory exception to the Open Meeting Law when a taxpayer requested a closed hearing on a tax appeal. In this appeal, we address the breadth of the exception to the Open Meeting Law created by former NRS 360.247. Statutory interpretation, such as determining the scope of the exception to the Open Meeting Law created by NRS 360.247, is a question of law subject to de novo review.⁵

We conclude that the version of NRS 360.247 applicable at the time of Edison's tax appeal created a limited exception to the Open Meeting Law under which the Tax Commission could close, at a taxpayer's request, only the portion of the Tax Commission's session at which it received confidential evidence, and questioned witnesses, and heard argument concerning confidential information. The exception did not permit the Tax Commission to hold all portions of the taxpayer appeal hearings in closed sessions. Under the Open Meeting Law, the Tax Commission was required to receive nonconfidential evidence, deliberate, and vote in open session.

The Attorney General cannot be estopped from enforcing the Open Meeting Law

As a threshold matter, the Tax Commission and Edison argue that the Attorney General should be estopped from enforcing the Open Meeting Law in this case. Specifically, the Tax Commission and Edison argue that because the Tax Commission had closed hearings for deliberating and voting on taxpayer appeals since at least 1997⁶ without objection from deputy attorneys general in attendance at the closed hearings, the Attorney General is estopped from arguing that the Tax Commission violated Nevada's Open Meeting Law when it deliberated and voted on Edison's appeal in closed sessions.

We have explained that "[e]quitable estoppel operates to prevent a party from asserting legal rights that, in equity and good conscience, [the party] should not be allowed to assert because of [his] conduct."⁷ To establish that an opposing party should be equitably estopped, the proponent must prove that:

"(1) the party to be estopped must be apprised of the true facts; (2) he must intend that his conduct shall be acted upon or must so act that the party asserting estoppel has the right to believe it was so intended; (3) the party asserting the estoppel must be ignorant of the true state of facts; [and] (4) he must have relied to his detriment on the conduct of the party to be estopped."⁸

Estoppel does not apply in this case for two reasons: the Tax Commission and Edison failed to prove that they were ignorant of the true state of the facts, and a government body may not be estopped from performing its governmental function.⁹

The Tax Commission submitted nearly 30 years of hearing transcripts illustrating that, during that period, it deliberated and voted in closed sessions without objection from the deputy attorneys general in attendance. Here, given that the deputy ...