Barnett v. Pan. City Wholesale, Inc.
| Decision Date | 05 June 2020 |
| Docket Number | 1190321 |
| Citation | 312 So.3d 754 |
| Parties | Vernon BARNETT, in his official capacity as Commissioner of the Alabama Department of Revenue v. PANAMA CITY WHOLESALE, INC. |
| Court | Alabama Supreme Court |
David E. Avery III and Keith Maddox, asst. counsel, Alabama Department of Revenue, Legal Division, Montgomery, for appellant.
Joseph A. Fawal of Fawal & Spina, Birmingham; and J.D. Lloyd, Birmingham, for appellee.
Vernon Barnett, as Commissioner of the Alabama Department of Revenue ("the Department"), appeals from a summary judgment entered in favor of Panama City Wholesale, Inc. ("PCW"). We reverse.
The State of Alabama imposes a license or privilege tax on tobacco products stored or received for distribution within the State ("the tobacco tax"). See § 40-25-1 et seq., Ala. Code 1975. Under § 40-25-8 ("the confiscation statute"), the Department may confiscate certain tobacco products on which the tobacco tax has not been paid.
PCW was a wholesale tobacco-products distributor located in Panama City, Florida, and owned by Ehad Ahmed. One of PCW's customers, Yafa Wholesale, LLC ("Yafa"), was an Alabama tobacco distributor owned by Sayeneddin Thiab ("Thiab").
In March 2018, agents of the Department began conducting surveillance of Thiab's residence, Yafa's business location, and storage units at Extra Space Storage ("Extra Space") in Vestavia Hills. One of the units had been leased in 2010 by Sami Berriri, a driver for Yafa. The agents observed Thiab's son, Saed Sayeneddin Thiab ("Saed"), making multiple trips to PCW's warehouse in Florida, where he loaded tobacco products into delivery vehicles owned by Yafa. After Saed returned to Alabama, Thiab, Saed, and other individuals unloaded the products into the storage units. The agents also observed Thiab and Saed retrieving tobacco products from the units and delivering them to more than 80 convenience stores across Alabama.
On October 10, 2018, Hurricane Michael destroyed the roof on PCW's warehouse. Over the next few days, Thiab's daughter, Ghadir Sayeneddin Thiab ("Ghadir"), and Saed leased three additional units from Extra Space. On October 19, the agents observed two of Thiab's vehicles and a rented moving truck traveling to Pensacola, Florida. The vehicles were loaded with tobacco products at Southeastern Freight Company and were observed at Yafa's business location that night. The next day, agents observed one of Thiab's vehicles being unloaded at two of the recently rented storage units. The day after that, agents observed one of Thiab's delivery vehicles being loaded with tobacco products from the other recently rented unit.
On October 23, 2018, the Department confiscated 1,431,819 cigars from four storage units leased by persons connected to Yafa and Thiab. It is undisputed that the tobacco tax had not been paid on the cigars. Ahmed filed an action in the Montgomery Circuit Court against Barnett, as Commissioner of the Department, seeking a judgment declaring that the cigars were Ahmed's and that they were not subject to confiscation. The case was transferred to the Jefferson Circuit Court, PCW was substituted for Ahmed, and the parties were realigned to make the Commissioner of the Department the plaintiff and PCW the defendant in a civil forfeiture action. On PCW's motion, the circuit court entered a summary judgment in PCW's favor, ruling that the Commissioner failed to present substantial evidence that the cigars were in the possession of a retailer or semijobber, as the court believed was required by the confiscation statute. The Commissioner appeals.
This is the first time this Court has interpreted the confiscation statute in its current form. The confiscation statute permits the Department to confiscate certain untaxed tobacco products, as follows:
In its summary judgment, the circuit court ruled that the Commissioner "failed to present substantial evidence that the tobacco products that [the Department] seized from [PCW] [were] in the possession of a retailer or semi-jobber as defined by [the confiscation statute]." The court apparently interpreted the statute as allowing the Department to confiscate only products that are in the possession of a retailer or semijobber.
" ‘When a court construes a statute, "[w]ords used in [the] statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says." ’ " Ex parte Rodgers, 141 So. 3d 1038, 1041 (Ala. 2013) (quoting Ex parte Berryhill, 801 So. 2d 7, 10 (Ala. 2001) ). Further, "we must examine the statute as a whole and, if possible, give effect to each [provision]." Ex parte Exxon Mobil Corp., 926 So. 2d 303, 309 (Ala. 2005). " ‘ "There is a presumption that every word, sentence, or provision [of a statute] ... has some force and effect and ... that no superfluous words or provisions were used." ’ " Richardson v. Stanford Props., LLC, 897 So. 2d 1052, 1058 (Ala. 2004) (quoting Sheffield v. State, 708 So. 2d 899, 909 (Ala. Crim. App. 1997) ).
As an initial matter, the confiscation statute, by its own terms, applies only to "products taxable under this article." § 40-25-8. Taxable products under Article 1 of Chapter 25 of Title 40 are tobacco products that are in Alabama "for the purpose of distribution ... within the State." § 40-25-2(a).
Within the structure of the confiscation statute, our first analytical point of reference is the general language of the third sentence: "Any untaxed ... cigars ... or other products taxable under this article found at any location within the State of Alabama ... are declared to be contraband goods, and those goods may be seized by the Department ...." This language generally allows the Department to confiscate any untaxed tobacco product found at any location within the State. The third sentence also contains a "primary-location" exception to this general authorization: the Department may not confiscate tobacco products that are found at "the primary location of the permitted wholesaler or jobber, registered semijobber, registered retailer or tobacco products manufacturer who stores tobacco products at a bonded warehouse in this state for resale." (Emphasis added.)1
To give effect to each provision of the statute, its first and second sentences must then be read as exceptions to the primary-location exception. The first sentence provides:
"Any ... cigars ... or other products taxable under this article found at any point within the State of Alabama, which ... cigars ... shall have been within the State of Alabama for a period of two hours, or longer, in possession of any retailer or semijobber not having [paid the tobacco tax on them] are declared to be contraband goods and may be seized by the Department ...."
(Emphasis added.) This two-hour "exception to the exception" allows the Department to confiscate any untaxed tobacco products that have been in Alabama, in the possession of a retailer or semijobber, for two hours or longer. Under this provision, retailers and semijobbers who store tobacco products at their primary locations must still pay the tobacco tax within two hours of their possession of the products in Alabama.
Similarly, the second sentence of the statute provides: "Any of the [tobacco products], when offered for sale, either at wholesale or retail without the [tobacco tax having been paid on them] shall be subject to confiscation ...." (Emphasis added.) This sale "exception to the exception" allows the Department to confiscate any untaxed tobacco products that are offered for sale, at either wholesale or retail. Under this provision, dealers who store tobacco products at their primary locations must still pay the tobacco tax before the products are offered for sale. Our interpretation of how each of these provisions in the statute relates to the others is summarized in the diagram attached as an appendix.
PCW argues that the circuit court's interpretation of the confiscation statute -- as applying only to products in the possession of a retailer or semijobber -- was correct. But the problem with that interpretation is that it fails to give effect to each provision of the statute. By limiting the Department's confiscation power to tobacco products in the possession of retailers and semijobbers, that interpretation would...
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... ... LP Gas Co. v ... Suburban Gas, Inc. , 729 So.2d 270, 276 (Ala. 1998) ... Fidelity to this ... that no superfluous words or provisions were used." ... Barnett v. Panama City Wholesale, Inc. , 312 So.3d ... 754, 757 (Ala. 2020) ... ...