Calvin-Humphrey v. District of Columbia, 8306.

• Citation: 340 A.2d 795
• Decision Date: 23 June 1975
• Docket Number: No. 8306.,8306.
• Parties: CALVIN-HUMPHREY et al., Appellees Petitioners, v. DISTRICT OF COLUMBIA, a Municipal Corporation, et al., Appellees-Respondents, In Re Motion of Clarzell Green et al., Appellants-Proposed Intervenors.
• Court: Court of Appeals of Columbia District

Page 795

340 A.2d 795

CALVIN-HUMPHREY et al., Appellees Petitioners, v. DISTRICT OF COLUMBIA, a Municipal Corporation, et al., Appellees-Respondents, In Re Motion of Clarzell Green et al., Appellants-Proposed Intervenors.

No. 8306.

District of Columbia Court of Appeals.

Argued September 11, 1974.

Decided June 23, 1975.

Gilbert Hahn, Jr., Washington D. C. with whom John R. Hailman, Washington D. C. was on the brief, for appellants.

Kenneth A. Pels, Asst. Corp. Counsel, for appellee District of Columbia. C. Francis Murphy, Corp. Counsel, Louis P. Robbins, Principal Asst. Corp. Counsel, Henry E. Wixon, and Richard L. Aguglia, Asst. Corp. Counsels, Washington D. C. were on the brief, for appellee District of Columbia.

Harold Gordon, Washington D. C., with whom William T. Hannan, Washington D. C. was on the brief, for appellee Calvin-Humphrey Corp.

Walter H. Fleischer and Herbert Adelman, Washington D. C. entered an appearance for appellee River Park Mutual Homes, Inc.

Before KERN and GALLAGHER, Associate Judges, and PAIR, Associate Judge, Retired.

KERN, Associate Judge:

The District of Columbia in imposing a tax upon realty within the city has followed for a number of years the practice of assessing commercial property at a different (and greater) percentage of market value than other real property.¹ Calvin-Humphrey Corporation (hereafter Calvin-Humphrey) and several other corporations brought suit on behalf of all city commercial property owners against the District and several of its officials seeking (1) a declaratory judgment that the practice of assessing commercial property at a higher percentage of market value than residential properties violates D.C.Code 1973, § 47-713² and the Fifth Amendment; (2) an injunction against the city's use in 1974 of this dual level of assessment or application to commercial properties of any level of assessment other than that used for residential properties until the city first complied with the D.C. Administrative Procedure Act in setting a different level of assessment for all properties; and (3) recovery of a refund for excessive taxes paid in past years.³

Shortly after the suit was instituted the District and Calvin-Humphrey entered into a stipulation in which the District admitted that Calvin-Humphrey's suit was properly maintained as a taxpayer's suit in equity in the nature of a class action and agreed to take all steps necessary formally to set a single level of assessment for all properties in fiscal year 1975 and succeeding years.⁴ The city has not denied that it did in fact use dual levels of assessment, and has taken the position in this litigation that such a practice violates both Section 47-713 and Fifth Amendment principles of equal protection of the laws.

Clarzell Green on behalf of himself and others (hereafter Green) sought by motion in the trial court to intervene as of right under Super.Ct.Civ.R. 24(a) (2) on the side of the District.⁵ Green seeks to represent two classes of taxpayers: all owners of single family property in the District, and all District taxpayers except those represented by Calvin-Humphrey. Both of the original parties to the litigation pending in the trial court, viz., Calvin-Humphrey and the District of Columbia, opposed Green's motion for intervention.

Green's principal contention in support of his effort to intervene is that the District has by its actions to date in the pending litigation failed to make any substantive defense to Calvin-Humphrey's suit. Specifically, Green argues, the Corporation Counsel has issued an opinion that the law requires a uniform level of assessment for purposes of the realty tax and the District has proceeded to promulgate a new rule setting a uniform level of assessment at 55% of market or cash value of realty. While Green acknowledges that the District is indeed defending Calvin-Humphrey's claim for a refund of past taxes paid by commercial real property owners, Green charges this defense rests solely on "technical grounds". Green asserts in support of his intervention that if Calvin-Humphrey is successful in its suit for a refund the taxes of one or both of the classes of taxpayers Green represents will inevitably be raised, or that municipal services rendered will inexorably be curtailed.⁶ Green, if permitted to intervene, intends to urge the substantive ground that the dual assessment system employed by the District for so many years is valid.⁷

The trial court denied Green's motion to intervene. It found that the single-family residential property owners had no litigable interest in the case since any harm to this class occurring from the outcome of the litigation between Calvin-Humphrey and the District was merely speculative, there being many other sources of revenue to which the District could turn to recoup the revenue lost by equalization of taxes or required to be refunded. As to the class of all taxpayers other than the commercial interests, the court found that no allegations to support representation of this class were contained in the pleadings,⁸ and held that this class was adequately represented by the District.⁹

Super.Ct.Civ.R. 24(a)(2),¹⁰ which has not since its amendment in 1966 been construed by this court, requires that one who seeks to intervene as of right must establish:

(1) That he has an interest in the transaction which is the subject matter of the suit, and

(2) that the disposition of the suit may as a practical matter impair his ability to protect that interest.

Intervention must be allowed if those two criteria are satisfied, unless

(3) his interest is adequately represented by existing parties.

In construing Rule 24 we are inclined to follow the United States Circuit Court for this jurisdiction¹¹ in eschewing any attempt precisely to define the nature of the "interest" required for intervention.¹² We do not think it profitable to our analysis of the problems posed by the Rule to search for any exact formula to limit the range of circumstances in which it could be applicable.¹³ Rather we adopt the more flexible and practical approach described by the Circuit Court as follows:

We know of no concise yet comprehensive definition of what constitutes a litigable "interest" for purposes of standing and intervention under Rule 24(a). . . . We think a more instructive approach is to let our construction be guided by the policies behind the "interest" requirement. We know from the recent amendments to the civil rules that in the intervention area the "interest" test is primarily a practical guide to disposing of lawsuits by involving as many apparently concerned persons as is compatible with efficiency and due process. . . . [Nuesse v. Camp, 128 U.S. App.D.C. 172, 178, 385 F.2d 694, 700 (1967).]

Properly applied, the Rule should promote judicial economy by facilitating the resolution of related issues in a single lawsuit, while preventing litigation from becoming unmanageably complex. See Smuck v. Hobson, 132 U.S.App.D.C. 372, 376, 408 F. 2d 175, 179 (1969).

In the instant case, we are persuaded that Green should have been allowed to intervene on behalf of the class of all D.C. taxpayers other than those represented by Calvin-Humphrey.¹⁴ There can be no doubt but that the instant litigation "concerns" the class that Green represents: it has an economic interest of some magnitude in the outcome of the suit, since we perceive a distinct and substantial possibility that it will incur higher taxes or suffer a diminution of municipal services if Calvin-Humphrey prevails in its quest for a tax refund. There exists in addition a logical nexus between Green's interest as a taxpayer and the position he wishes to assert: that the use of the dual levels of assessment is lawful and constitutional, so that refunds are not due. The abandonment of the prior assessment practice has caused a shift in relative tax burden from the commercial property owners to other taxpayers as a whole. This tax advantage will be irretrievably lost if Calvin-Humphrey succeeds in the present action.¹⁵ See Atlantic Refining Co. v. Standard Oil Co., 113 U.S.App.D.C. 20, 304 F.2d 387 (1962).

Courts have historically greeted with trepidation the prospect of suits brought by taxpayers to vindicate their interests as such. The argument against taxpayer suits, pressed by appellants here, is that governmental action which affects all members of the community at large does not sufficiently affect any individual to give him standing to assert the rights of the whole. It must be noted, however, that taxpayers have always had the right, in the proper case, to initiate suit against the city government to prevent illegal use of municipal funds. Roberts v. Bradfield, 12 App.D.C. 453 (1898), aff'd, 175 U.S. 291, 20 S.Ct. 121, 44 L.Ed. 168 (1899). See Massachusetts v. Mellon, 262 U.S. 447, 486, 43 S.Ct. 597, 67 L.Ed. 1078 (1923). The issue before this court, however, is not one of taxpayer standing to initiate lawsuits. The instant lawsuit was commenced by Calvin-Humphrey and the basic issue raised by it. The only question before us is whether the present lawsuit should be broadened to include the Green taxpayers, giving them an opportunity to be heard on an issue already put in litigation. Smuck v. Hobson, supra, 132 U.S.App.D.C. at 376, 408 F.2d at 179. Calvin-Humphrey having attacked the legality of the use of dual levels of assessment, and the District having refused to join issue on the question, we believe that the position sought to be asserted by the Green taxpayers should be heard, and that it can be heard most efficiently and effectively in the context of this litigation.¹⁶

Undoubtedly, taxpayer intervention in suits in which the government is a party should not lightly be granted.¹⁷ In this case, however, we believe that intervention is appropriate. The subject on which intervention is sought bears a logical relationship to the proposed intervenors' status as taxpayers and is presented in...