Circuit-Wise, Inc. v. Commissioner of Revenue Services

• Decision Date: 12 June 1990
• Docket Number: CIRCUIT-WISE,No. 13772,13772
• Citation: 215 Conn. 292,576 A.2d 1259
• Court: Connecticut Supreme Court
• Parties: , 59 USLW 2003 INC. v. COMMISSIONER OF REVENUE SERVICES.

Page 1259

576 A.2d 1259

215 Conn. 292, 59 USLW 2003

CIRCUIT-WISE INC. v. COMMISSIONER OF REVENUE SERVICES.

No. 13772.

Supreme Court of Connecticut.

Argued March 8, 1990.

Decided June 12, 1990.

David P. Atkins, with whom was Bette L. Bono, Bridgeport, for appellant (plaintiff).

Paul M. Scimonelli, Asst. Atty. Gen., with whom, on the brief, was Clarine Nardi Riddle, Atty. Gen., for appellee (defendant).

Before SHEA, CALLAHAN, GLASS, COVELLO and HULL, JJ.

HULL, Associate Justice.

This appeal involves a constitutional challenge to the Hazardous Waste Assessment statute, General Statutes § 22a-132. ¹ Pursuant to this statute, the defendant, the commissioner of revenue services, assessed taxes against the plaintiff, Circuit-Wise, Inc. The plaintiff protested the assessment, which protest the defendant rejected. The plaintiff thereafter sought de novo judicial review of the assessment. ² The case was tried to a state trial referee who rendered judgment for the defendant and dismissed the plaintiff's appeal. From this judgment the plaintiff appealed to the Appellate Court. We subsequently transferred the case to ourselves pursuant to Practice Book § 4023. We affirm the judgment of the trial court.

The trial court's memorandum of decision reveals the following facts. The plaintiff is a manufacturer of printed circuit boards for the automotive and computer industries. By-products generated by the plaintiff's manufacturing activity are classified as "hazardous waste." These by-product wastes are transported off-site and are then either disposed of in a regulated facility or recycled and resold in their reprocessed state. Federal and state statutes and regulations require that generators of hazardous waste, such as the plaintiff, prepare a manifest that lists all hazardous waste substances shipped from their facilities. Pursuant to § 22a-132, the defendant assessed the plaintiff for taxes on the hazardous waste products for which the plaintiff had filed a manifest for the period March, 1983, through December 31, 1984. Upon the defendant's rejection of the plaintiff's protest of the assessment, the plaintiff instituted the present action.

The plaintiff challenged at trial the constitutionality of § 22a-132. The plaintiff first argued that the statute was violative of the equal protection guarantees of the state and federal constitutions, because it taxed some but not all hazardous substances, thereby creating classifications that bear no rational relationship to the statutes's stated purpose. Specifically, the plaintiff claimed that by taxing substances deemed to be "hazardous waste" and not taxing other "hazardous substances," the statute creates an unconstitutionally underinclusive classification. The plaintiff claimed in the alternative that because the statute taxes all hazardous wastes, including the wastes that are recycled and reintroduced into the stream of commerce, the statute operates in an arbitrary and capricious manner and is thereby violative of the due process and equal protection guarantees of the state and federal constitutions.

The court concluded that § 22a-132 was not unconstitutional, either on its face or as applied to the plaintiff. The court's decision was based on the premise that, notwithstanding the express revenue raising provisions of § 22a-132, the purpose of the statute was "clearly for regulation and not for revenue." The court stated that regulation pursuant to the police power "is not subject to the constitutional restrictions applicable to the taxing power." The policy of the state, according to the court, is to control and manage hazardous waste from the time of its generation until the time of its safe disposition. Accordingly, the court stated that "[h]azardous waste is a subject of compelling state interest in the exercise of its police power in duly safeguarding the health, safety and welfare of the people." The court gave no credence to the plaintiff's claim that the classification in § 22a-132 was underinclusive in its coverage, stating that there is "no fundamental right to endanger the public health or safety or to pollute the environment, and that it would be repugnant to reason and justice to maintain that one party is justified in doing so because another party is doing likewise." The court also found that "[a]s regards a generator of hazardous waste there is no reasonable distinction between the hazardous waste that ultimately is disposed of in a regulated land-fill, and the hazardous waste that proceeds to recycling or reclamation. The actual or potential hazard is present in both processes, and the classification is consistent and has a rational relationship to the state and legislative purpose of Chapter 445 of the general statutes in safeguarding the health and safety of the public and safety and welfare of the environment." The court then concluded that the statute created no unreasonable classification so as to deny the plaintiff its constitutional rights. The plaintiff did not move the trial court under Practice Book § 4051 to articulate its memorandum of decision concerning its conclusory statements of constitutional law.

On appeal the plaintiff challenges: (1) the court's conclusion that § 22a-132, in taxing "hazardous wastes" but not other "hazardous substances," does not violate the equal protection guarantees of the federal and state constitutions; (2) the court's failure to address whether the classification established in § 22a-132 has any rational relation to the expressed revenue raising purpose of § 22a-132; and (3) the court's conclusion that § 22a-132, by taxing all hazardous waste entered on a manifest, including that sent for recycling, does not violate the due process and equal protection guarantees of the federal and state constitutions. We consider the first and second claims combined to constitute only one issue and will treat them accordingly.

I

We turn first to the plaintiff's claim that § 22a-132 establishes an unconstitutional classification in violation of the equal protection guarantees of the federal and state constitutions. ³ In support of its claim, the plaintiff refers to the following testimony presented at trial. The plaintiff purchases various raw or virgin chemical materials from suppliers to accomplish the plating and etching operations that are part of its manufacturing process. These chemicals are classified under federal statute and regulations as "hazardous materials" in that they exhibit one or more of the standard characteristics of such materials: corrosivity, toxicity, reactivity and ignitability. New chemical by-products are produced by the plaintiff's manufacturing process. These by-products are classified as "hazardous waste" under the federal Resource Conservation and Recovery Act of 1976. The plaintiff presented testimony at trial indicating that many of the characteristics of "hazardous waste" are identical to "hazardous materials." The plaintiff's expert testified that in their original form, the hazardous materials supplied to the plaintiff were as dangerous or more so than the hazardous waste produced by the plaintiff. This testimony was unrefuted by the defendant.

As the plaintiff correctly points out, pursuant to § 22a-132, a generator of "hazardous waste" incurs a tax when it includes that waste on a manifest, while a producer of hazardous materials, not subject to the manifest requirement, is not assessed such a tax. The plaintiff argues that the history of § 22a-132 and its terms disclose that the purpose of the statute is to provide funds for the emergency spill response fund ⁴ established under General Statutes § 22a-451. ⁵ Section 22a-451, however, is concerned not only with hazardous waste, but with a variety of matters wholly unrelated to such waste. The plaintiff claims, therefore, that the practical effect of § 22a-132 is to assess a generator of hazardous waste for a fund that pays for the clean-up of numerous substances produced and shipped by parties who escape taxation completely. Accordingly, the plaintiff argues that § 22a-132 is violative of equal protection. We are unpersuaded.

We note at the outset that we disagree with the trial court's conclusion that § 22a-132 is primarily a regulatory statute. Regulation of the management and disposal of hazardous waste is controlled by an intricate web of interrelated state and federal laws and regulations. Although enforcement of the waste assessment may have an incidental regulatory fallout, we conclude that § 22a-132 is primarily a tax statute.

In order to analyze the constitutionality of this statute, we must first detail the principles applicable to equal protection analysis. " 'When a statute is challenged on equal protection grounds, whether under the United States constitution or the Connecticut constitution, the reviewing court must first determine the standard by which the challenged statute's constitutional validity will be determined. If, in distinguishing between classes, the statute either intrudes on the exercise of a fundamental right or burdens a suspect class of persons, the court will apply a strict scrutiny standard wherein the state must demonstrate that the challenged statute is necessary to the achievement of a compelling state interest. In re Griffiths, 413 U.S. 717, 721, 93 S.Ct. 2851 [2854], 37 L.Ed.2d 910 (1973); San Antonio Independent School District v. Rodriguez, 411 U.S. 1, 30, 93 S.Ct. 1278 [1295], 36 L.Ed.2d 16, reh. denied, 411 U.S. 959, 93 S.Ct. 1919, 36 L.Ed.2d 418 (1973); Eisenstadt v. Baird, 405 U.S. 438, 447, 92 S.Ct. 1029 [1035], 31 L.Ed.2d 349 (1972); Harper v. Virginia State Board of Elections, 383 U.S. 663, 667, 86 S.Ct. 1079, 1081, 16 L.Ed.2d 169 (1966). If the statute does not touch upon either a fundamental right or a suspect class, its classification need only be rationally related to some legitimate government purpose in order to withstand an equal protection challenge. Trimble...