Cooper v. City of Charleston

• Decision Date: 01 December 2005
• Docket Number: No. 32612.,32612.
• Citation: 624 S.E.2d 716
• Parties: Thornton COOPER, Plaintiff Below, Appellant, v. CITY OF CHARLESTON, Defendant Below, Appellee.
• Court: West Virginia Supreme Court

624 S.E.2d 716

Thornton COOPER, Plaintiff Below, Appellant, v. CITY OF CHARLESTON, Defendant Below, Appellee.

No. 32612.

Supreme Court of Appeals of West Virginia.

Submitted: November 1, 2005.

Filed: December 1, 2005.

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Syllabus by the Court

1. "`Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.' Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995)." Syllabus Point 1, State v. Paynter, 206 W.Va. 521, 526 S.E.2d 43 (1999).

2. "The character of a tax is determined not by its label but by analyzing its operation and effect." Syllabus Point 2, City of Fairmont v. Pitrolo Pontiac-Cadillac, 172 W.Va. 505, 308 S.E.2d 527 (1983).

3. "`"Municipalities have no inherent power with regard to the exercise of the functions of their government. Such power depends solely upon grants of power by Acts of Legislature, and the Legislature may at any time modify, change or withdraw any power so granted by general law in conformance with the provisions of the Constitution, Article VI, Section 39(a)." Point 2, Syllabus, State ex rel. Alexander v. The County Court of Kanawha County, et al., 147 W.Va. 693[, 130 S.E.2d 200 (1963)].' Syl. pt. 1, State ex rel. Plymale v. City of Huntington, 147 W.Va. 728, 131 S.E.2d 160 (1963)." Syllabus Point 3, Huntington v. Bacon, 196 W.Va. 457, 473 S.E.2d 743 (1996).

4. "`Courts will not ordinarily decide a moot question.' Pt. 1, syllabus, Tynes v. Shore, 117 W.Va. 355 [(1936)]." Syllabus Point 1, State ex rel. Hedrick v. Board of Comm'rs of County of Ohio, 146 W.Va. 79, 118 S.E.2d 73 (1961).

5. "`Moot questions or abstract propositions, the decision of which would avail nothing in the determination of controverted rights of persons or property are not properly cognizable by a court.' Syllabus Point 1, State ex rel. Lilly v. Carter, 63 W.Va. 684, 60 S.E. 873 (1908)." Syllabus Point 1, State ex rel. Durkin v. Neely, 166 W.Va. 553, 276 S.E.2d 311 (1981).

Thornton Cooper, Esq., South Charleston, for Pro Se.

Karen Tracy McElhinny, Esq., Shuman, McCuskey & Slicer, PLLC, Charles O. Lorensen, Esq., George & Lorensen, PLLC, Charleston, for Appellee.

Dennis R. Vaughan, Jr., Esq., Vaughan Law Firm, Charles O. Lorensen, Esq., George & Lorensen, PLLC, Charleston, for Amicus Curiae West Virginia Municipal League, Inc.

The Opinion of the Court was delivered PER CURIAM.

Justice BENJAMIN concurs and reserves the right to file a concurring opinion.

Justice STARCHER concurs and reserves the right to file a concurring opinion.

PER CURIAM.

This case is before this Court upon appeal of a final order of the Circuit Court of Kanawha County entered on June 28, 2004. In that order, the circuit court upheld an ordinance adopted by the City of Charleston, the appellee and defendant below, which authorized and established a city "user fee" on each individual who works within the corporate limits of the City of Charleston. In this appeal, Thornton Cooper, the appellant and plaintiff below, contends that the ordinance was not enacted in accordance with West Virginia Code § 8-13-13 (1971). The appellant also asserts that the ordinance improperly imposes an unconstitutional tax in violation of the West Virginia Constitution; was not a reasonable fee as prescribed by the West Virginia Code; and violated numerous other statutory, substantive, and procedural requirements. After reviewing the facts of the case, the issues presented, and the relevant statutory and case law, this Court affirms the decision of the circuit court insofar as it determines that the "user fee" is a fee and not a tax and concludes that the City of Charleston had the authority to enact such a fee. We do, however, reverse the circuit court order to the extent that it upheld the City's failure to properly follow the notice and publication requirements of W.Va.Code § 8-13-13, and direct the circuit court to order the City of Charleston to hold an election wherein City voters shall have the opportunity to ratify or strike down the City's user fee ordinance.

I. FACTS

On September 15, 2003, the Charleston City Council passed an ordinance imposing a $1.00 per calendar week "City Service Fee" (hereinafter "user fee" or "fee") on each individual who works within the corporate limits of the City of Charleston (hereinafter "the City"). The ordinance provides that all revenues generated by the fee "are hereby dedicated to and shall be exclusively utilized for police protection and street maintenance and public works related thereto, and any costs related to the imposition and processing of this fee." Char.Code § 6-214, now recodified at § 2-745. The City enacted the ordinance under W.Va.Code § 8-13-13.

As of January 1, 2004, employers within the corporate limits of the City of Charleston were required to withhold and remit the fee. City officials estimate that this fee will generate $2.5 million per year, while it costs the City a total of $19 million per year to provide police protection and street maintenance.¹

This ordinance was first introduced during a City Council meeting on August 18, 2003, as Bill 7002. Notices containing the full text of the proposed ordinance were published in a local newspaper on August 28, 2003, and September 4, 2003. These notices provided that the proposed ordinance would be discussed at a Council meeting on September 2, 2003. The proposal was not discussed on September 2, 2003. Instead, it was discussed and adopted during a September 15, 2003, Council meeting. During that September 15, 2003, meeting, Bill 7002 was discussed, changes were made, and substitute Bill 7002 was adopted.

In early 2004, the West Virginia State Auditor and appellant Cooper filed separate lawsuits challenging the validity of the fee and seeking declaratory and injunctive relief. The lawsuits were consolidated and an evidentiary record was stipulated. The appellant, who resides and votes in the City of South Charleston, works for a State agency located in Charleston and is therefore required to pay the $1.00 per week fee. Due to his employment, the appellant spends an average of twenty-five percent of his time in Charleston, but does not own or lease property there.

Soon after the lawsuits were consolidated, the City Council introduced Bill 7070. The substance of Bill 7070 was the same as Bill 7002 which passed in 2003, except Bill 7070 made the fee retroactively effective on January 1, 2004. Notices were published on May 21, 2004, and May 28, 2004, and the fee ordinance was re-passed and re-enacted on June 7, 2004. Both notices included a provision that if thirty percent of the qualified voters of the City opposed the ordinance by signing and filing a petition by June 14, 2004, then the ordinance would not become effective until ratified by an election.

On June 28, 2004, the circuit court entered an order upholding almost all aspects of the ordinance. The court found that: allegations pertaining to improper passage of the 2003 ordinance are now moot in light of the re-publication and re-passage of the ordinance; the City has authority under W.Va.Code § 8-13-13 to impose this fee upon users of the municipal services of police protection and street maintenance; and this is a fee, not a tax, because it is a charge for services rendered. The circuit court did, however, find that portions of the ordinance and supporting regulations which could cause the State to become liable for the debts of its employees to be unconstitutional, but did not invalidate the remainder of the ordinance.

This Court refused the appellant's motions for stay pending appeal and this appeal followed. At present, the City of Charleston continues to collect and spend the user fee money. The State Auditor did not appeal the circuit court's decision.²

II. STANDARD OF REVIEW

The appellant contends that the circuit court erred in upholding the user fee adopted by the City of Charleston. In Syllabus Point 1 of State v. Paynter, 206 W.Va. 521, 526 S.E.2d 43 (1999), we held, "`Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.' Syllabus Point 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995)." We have further indicated that a circuit court's final order and ultimate disposition are reviewed under the abuse of discretion standard. State ex rel. Hechler v. Christian Action Network, 201 W.Va. 71, 491 S.E.2d 618 (1997).

III. DISCUSSION

A. City of Charleston Service Fee is a User Fee.

As noted above, appellant Cooper argues that the City of Charleston has enacted a tax in violation of the West Virginia Constitution. The appellant states that the City's ordinance is void because it imposes an unlawful municipal capitation tax, because it imposes an unlawful municipal income tax, and because it violates the statutory cap on the municipal business and occupation (B & O) tax.

The appellant states that between 1933 and 1971, a State capitation tax was imposed, while between 1937 and 1971, a municipal capitation tax was imposed in West Virginia. However, in 1970, State legislators decided to abolish all capitation taxes (also known as "head taxes" and "poll taxes") in West Virginia. Then, on November 3, 1970, the voters of West Virginia, by a vote of 253,638 to 117,660, overwhelmingly ratified a constitutional amendment that repealed Article X § 2, of the West Virginia Constitution which provided for the capitation tax. The appellant believes that the City's user fee is a capitation tax and thus unconstitutional. The City, however, maintains that the user fee it enacted is a fee and not a tax.

We have addressed the issue of what separates a permissible "fee" from an impermissible "tax" on several occasions and have found fees similar to the one at issue in ...