Comcast Corp. v. Dep't of Revenue

• Decision Date: 29 March 2018
• Docket Number: TC 4909
• Parties: COMCAST CORPORATION, Plaintiff, v. DEPARTMENT OF REVENUE, State of Oregon, Defendant.
• Court: Oregon Tax Court

COMCAST CORPORATION, Plaintiff, v. DEPARTMENT OF REVENUE, State of Oregon, Defendant.

TC 4909

OREGON TAX COURT REGULAR DIVISION Property Tax

March 29, 2018

ORDER DENYING PLAINTIFF'S REQUEST FOR ATTORNEY FEES

I. INTRODUCTION

This matter is before the court on a request for attorney fees filed by Plaintiff Comcast Corporation (taxpayer). Defendant Department of Revenue (the department) objects.

II. FACTS AND PROCEDURAL HISTORY

The underlying case concerns the propriety of certain actions of the department with respect to the central assessment of taxpayer beginning with the tax year 2009-10. That litigation began in 2009 with taxpayer filing a complaint claiming (1) taxpayer is not subject to central assessment, (2) the department violated the federal Internet Tax Freedom Act, (3) the department violated the uniformity and equalization clauses of the Oregon Constitution, (4) the department violated the equal protection clause of the United States constitution, and (5) the department violated Measure 50 and the statutes implementing Measure 50 by determining a maximum assessed value (MAV) that was too high.¹ (Ptf's Complaint at 3-12.)

In this order, claims 2 through 4 are collectively referred to as the discrimination claims. Claim 5 is referred to as the MAV claim.

The litigation in this case has been substantial. For a complete history, please see, in chronological order, Comcast Corp. v. Dept. of Rev., 20 OTR 319 (2011) (determining taxpayer is not subject to central assessment); Comcast Corp. v. Dept. of Rev., 356 Or 282, 337 P3d 768 (2014) (reversing and remanding); Comcast Corp. II v. Dept. of Rev., 22 OTR 64 (2015) (Order on Scope of Remand); Comcast Corp. II v. Dept. of Rev., 22 OTR 233 (2016) (Order on New Property Exception to Measure 50), Comcast Corp. II v. Dept. of Rev., 22 OTR ___, WL 6055041 (Nov 30, 2017) (determining discrimination claims and final MAV calculation).

The attorney fees request before the court is based on arguments of the department as to the scope of remand after the court's first decision was reversed and remanded by the Oregon Supreme Court. To give context to dispute regarding the scope of remand (referred to as the remand dispute), the court provides a brief procedural history leading up to that dispute.

After a trial, the court decided that some services provided by taxpayer qualify as communication services as defined in ORS 308.505(3).² Comcast Corp., 20 OTR at 333-35. That decision would have subjected the property used to provide such services to central assessment. ORS 308.515(1)(h). However, the court also decided that the primary use of that property was to provide cable television, which the court decided was not a communication service. Comcast Corp., 20 OTR at 335-36. Therefore, the court decided that taxpayer's property was not statutorily subject to central assessment, which resolved taxpayer's first claim for relief in its favor. Id. at 337. The court accordingly stated that it was "unnecessary to, andthe court does not, address the other challenges made by Comcast to the actions of the department." Id.

The court subsequently entered a judgment to that effect. Both parties appealed from that judgment for various reasons. The Supreme Court reversed, and held that taxpayer was statutorily subject to central assessment. Comcast Corp., 356 Or at 332-33. That ruling made it unnecessary for the Supreme Court to consider this court's decision of the primary use of the taxpayer's property. Id. at 334.

The Supreme Court could have concluded its opinion there, having resolved all issues decided by the court. However, the department asked the Supreme Court to rule on the MAV claim, arguing it was purely a question of law. See id. The Supreme Court declined, stating that the MAV claim "was moot under the Tax Court's resolution of the case, but is not moot under ours." Id. The Supreme Court further stated:

"Regardless of whether the department is correct in characterizing the issue as purely one of law, we decline the department's invitation. The issue entails an intricate question of tax law, one that involves assessment procedures and practices that the Tax Court deals with frequently. The statutes that provide for tax cases to be resolved first by the Tax Court, before coming to this court on appeal, implicitly recognize the value to this court of the Tax Court's resolution of tax disputes in the first instance. The MAV issue that the parties dispute is one that is appropriately resolved first by the Tax Court.

"The decision of the Tax Court is reversed, and the case is remanded to that court for further proceedings."

Id. at 334-35.

On remand, the department argued that the only issue remaining for the court to decide was the MAV of the property. The department argued that, by omitting any mention of taxpayer's discrimination claims, the Supreme Court did not remand anything other than the MAV claim to this court.

/ / / The court rejected the department's argument, and determined that all of taxpayer's claims--except taxpayer's claim that it is not statutorily subject to central assessment, which was determined with finality by the Supreme Court--were remanded back to the court.³ Comcast Corp. II, 22 OTR at 67.

At the hearing on the scope of remand, the court expressed profound concern regarding the due process implications of the arguments made by the department and invited taxpayer to file a request for attorney fees. Taxpayer filed this request after that invitation. The department objected on several grounds, including that attorney fees can only be awarded to a party that prevails on the merits of the case, not a procedural matter within that case. Taxpayer did not file a response to those objections, even though responses are contemplated by Tax Court Rule (TCR) 68 C(2)(c).

The case has now concluded, with the court having found in favor of taxpayer on the MAV claim, which was not the subject of the remand dispute, and the court having not found in favor of taxpayer on the discrimination claims, which were the subject of the remand dispute. 22 OTR ___, WL 6055041 (Nov 30, 2017); see also 22 OTR 233 (detailing principles for decidingMAV claim). After the conclusion of this case, the court held a case management conference. During that conference, counsel for both parties indicated that they had no further briefing to offer to the court. Taxpayer has not requested attorney fees on any other basis than the remand dispute. With that background, the court now turns to taxpayer's request.

III. ISSUE

The issue is whether taxpayer is entitled to attorney fees it incurred for litigating the remand dispute.

IV. ANALYSIS

Generally, the court may not award attorney fees unless it is authorized to do so by statute. See Dept. of Rev. v. Rakocy, 15 OTR 389, 390 (2001), citing Mattiza v. Foster, 311 Or 1, 4, 803 P2d 723 (1990) (describing the "American rule" of generally not awarding attorney fees to the prevailing party). There are at least two statutes and two court rules that provide for an award of attorney fees in the Oregon Tax Court. See ORS 20.105, 305.490; TCR 17, 46.⁴ Taxpayer made its request for attorney fees under ORS 305.490(4)(a). That statute provides:

"If, in any proceeding before the tax court judge involving ad valorem property taxation, exemptions, special assessments or omitted property, the court finds in favor of the taxpayer, the court may allow the taxpayer, in addition to costs and disbursements, the following:

"(A) Reasonable attorney fees for the proceeding under this subsection and for the prior proceeding in the matter, if any, before the magistrate; and

"(B) Reasonable expenses as determined by the court. Expenses include fees of experts incurred by the individual taxpayer in preparing for and conducting the proceeding before the tax court judge and the prior proceeding in the matter, if any, before the magistrate."

If the court determines that it is authorized by ORS 305.490(4)(a) to award attorney fees, it then considers the factors listed in ORS 20.075 to determine the extent of the award. Preble v. Dept. of Rev., 331 Or 599, 602, 19 P3d 335 (2001).

A. Whether the Court is Authorized to Award Attorney Fees Under ORS 305.490(4)(a).

The court must first determine whether it is authorized to award attorney fees. The court is authorized to award attorney fees to a taxpayer if it finds in favor of that taxpayer in a "proceeding." ORS 305.490(4)(a). Here, the court found in favor of taxpayer on the remand dispute by determining that taxpayer's discrimination claims were still before the court. The court did not, however, find in favor of taxpayer on the merits of those discrimination claims. The court did find in favor of taxpayer on the merits of the MAV claim.

The primary question is whether the remand dispute is a "proceeding" for purposes of ORS 305.490(4)(a). If it is not, then the next question is whether taxpayer can recover fees incurred for litigating the remand dispute on the basis of the court finding in favor of taxpayer on the MAV claim.

The answer to these questions requires the court to ascertain the meaning of the term "proceeding." That term is not defined by statute. Therefore, the court must analyze the text, context, and legislative history to ascertain its meaning for purposes of ORS 305.490(4)(a). See State v. Gaines, 346 Or 160, 206 P3d 1042 (2009).

1. Text

The court looks first to the text of the statute. ORS 305.490(4)(a) provides:

"If, in any proceeding before the tax court judge involving ad valorem property taxation, exemptions, special assessments or omitted property, the court finds in favor of the taxpayer, the court may allow the taxpayer, in addition to costs and disbursements, [attorney fees and reasonable expenses.]"

/ / / Reviewing only the text of the statue, the court sees at least three alternative meanings of the term "proceeding." First, it could mean a small portion of an overall case. Under that interpretation, the court...