Housatonic R.R. Co. Inc. v. Comm'r of Revenue Serv..

• Decision Date: 28 June 2011
• Docket Number: No. 18685.,18685.
• Citation: 301 Conn. 268,21 A.3d 759
• Court: Connecticut Supreme Court
• Parties: HOUSATONIC RAILROAD COMPANY, INC.v.COMMISSIONER OF REVENUE SERVICES.

301 Conn. 268

21 A.3d 759

HOUSATONIC RAILROAD COMPANY, INC.

v.COMMISSIONER OF REVENUE SERVICES.

No. 18685.

Supreme Court of Connecticut.

Argued Feb. 10, 2011.Decided June 28, 2011.

OPINION TEXT STARTS HEREWest CodenotesRecognized as UnconstitutionalC.G.S.A. § 12–599(b) Edward J. Rodriguez, with whom was Matthew R. Whitney, for the appellant (plaintiff).Rupal Shah Palanki, assistant attorney general, with whom, on the brief, was Richard Blumenthal, former attorney general, for the appellee (defendant).ROGERS, C.J., and NORCOTT, PALMER, ZARELLA, McLACHLAN, EVELEIGH and VERTEFEUILLE, Js.ZARELLA, J.

This appeal requires us to determine whether the doctrine of sovereign immunity bars an action brought against the state by a rail carrier seeking a refund of amounts paid to a petroleum product distributor to cover the cost of an allegedly discriminatory petroleum fuel products gross earnings tax (petroleum tax) imposed on and paid by the distributor. The plaintiff, Housatonic Railroad Company, Inc., appeals ¹ from the judgment of the trial court, which granted the motion of the defendant, the commissioner of revenue services (commissioner), to dismiss the plaintiff's appeal seeking a refund for amounts paid to a fuel distributor to cover the petroleum tax imposed on the distributor pursuant to General Statutes § 12–587(b)(1). On appeal, the plaintiff claims that the trial court incorrectly concluded that the state was immune from suit because the plaintiff could not establish an exception to sovereign immunity under any of three separate statutory provisions: (1) the federal Railroad Revitalization and Regulatory Reform Act of 1976 (4–R act), Pub.L. No. 94–210, 90 Stat. 31, which, among other things, prohibits states from taxing rail carriers in a discriminatory manner; see 49 U.S.C. § 11501(b) (2006); (2) General Statutes § 12–597, which permits “[a]ny taxpayer” aggrieved by an order or decision of the commissioner with respect to the imposition of the petroleum tax to appeal to the Superior Court; and (3) General Statutes § 12–33, which permits any aggrieved town or company to appeal to the Superior Court from an action of the commissioner. Because we conclude that none of the statutory provisions on which the plaintiff relies permits a rail carrier to bring an action against the state for a refund of taxes paid by a petroleum distributor, we affirm the judgment of the trial court.

The trial court's memorandum of decision summarizes the plaintiff's factual allegations as follows: “In its complaint, the plaintiff alleges that [it] is a specially chartered Connecticut railroad corporation operating a railroad exclusively as a common carrier of freight by rail within [this state] and Massachusetts under the authority of the [federal] Surface Transportation Board and its predecessor agency, the [federal] Interstate Commerce Commission. ²

“During the period from July 1, 2003, through June 30, 2007, [the plaintiff] purchased diesel fuel in Connecticut from Sack Distributors Corporation and its predecessor, Stephen H. Sack, [doing business as] Sack Distributors, in [the city of] Hartford.... ³ The diesel fuel purchased from the distributor was used exclusively by [the plaintiff] in its locomotives as part of its interstate freight rail business. The distributor remitted the [petroleum tax], in the amount of $100,176.91, to the commissioner.” The distributor separately billed the plaintiff for the amount of the tax that it paid to the department of revenue services (department), and the plaintiff paid that amount directly to the distributor. Although the plaintiff did not pay the amount of the fuel purchase attributed to the petroleum tax directly to the department, the plaintiff submitted requests to the department for a refund of the money paid for the petroleum tax by the distributor to the department. The plaintiff based its request for a refund on its claim that the petroleum tax discriminated against it because gross earnings from fuel sold for use in vessels traveling in interstate commerce (water carriers) are exempt from the tax, whereas gross earnings from fuel sold to rail carriers are not exempt, in violation of the 4–R act. The commissioner denied the plaintiff's request for a refund on the ground that only the distributor, and not the plaintiff, could request a refund because the distributor, rather than the plaintiff, had paid the tax in question. The plaintiff subsequently appealed from the commissioner's decision to the Superior Court, seeking a refund of the tax. The commissioner filed a motion to dismiss the appeal, claiming that the doctrine of sovereign immunity barred the plaintiff's action because the plaintiff had not established statutory authority to bring the appeal, and, therefore, the court did not have subject matter jurisdiction over the plaintiff's claim.

The plaintiff responded that it could bring its claim under any of three separate statutory provisions that were sufficient to establish an exception to sovereign immunity: (1) the antidiscrimination provisions of the 4–R act; see 49 U.S.C. § 11501(2006); (2) § 12–597, which permits “[a]ny taxpayer” aggrieved by a decision of the commissioner regarding the imposition of the petroleum tax to appeal from that decision to the Superior Court; and (3) § 12–33, which permits any town or company aggrieved by an action of the commissioner to appeal from that action to the Superior Court. Following a hearing, the trial court granted the commissioner's motion to dismiss. The court first concluded that the plaintiff could not appeal under § 12–33 because § 12–597, which applies expressly to appeals relating to the imposition of the petroleum tax, was the controlling statute for purposes of such appeals. The court next concluded that the plaintiff could not appeal under § 12–597 because the plaintiff was not a “taxpayer” within the meaning of that statute insofar as it was not liable for the tax and did not pay the tax to the department. The court instead concluded that only fuel distributors are taxpayers for purposes of § 12–597 and that, because the plaintiff was not a fuel distributor, it could not establish that the state had waived its immunity with respect to the plaintiff's claim under that provision. Finally, the court concluded that the plaintiff could not assert its claim against the state under the 4–R act because that act prohibited only discriminatory ad valorem taxes on property and did not apply to taxes on gross earnings of fuel distributors. Having concluded that none of the statutes on which the plaintiff relied permitted it to bring its claim, the court concluded that the doctrine of sovereign immunity barred the plaintiff's appeal. The court granted the commissioner's motion to dismiss the plaintiff's appeal and rendered judgment in the commissioner's favor. This appeal followed.

On appeal to this court, the plaintiff claims that, because the state has consented to such claims, the trial court incorrectly concluded that the plaintiff's claim for a refund was barred by the doctrine of sovereign immunity. In support of this argument, the plaintiff renews the argument that it made in the trial court, namely, that its claim is maintainable on three separate and independent grounds. The plaintiff first contends that the claim is permitted by the 4–R act, which abrogates a state's sovereign immunity from claims brought by rail carriers seeking relief from discriminatory taxes. The plaintiff next contends that §§ 12–33 and 12–597 each provide statutory authority for the plaintiff to bring its claim for a refund against the state. The commissioner argues that none of the provisions on which the plaintiff relies entitles it to bring its claim against the state and, therefore, that the trial court properly granted the commissioner's motion to dismiss on the basis of sovereign immunity. We agree with the commissioner.

We begin with the standard of review of a trial court's decision to grant a motion to dismiss and the applicable principles governing the doctrine of sovereign immunity. “A motion to dismiss ... properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court.... [T]he doctrine of sovereign immunity implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss.” (Citation omitted; internal quotation marks omitted.) C.R. Klewin Northeast, LLC v. State, 299 Conn. 167, 174–75, 9 A.3d 326 (2010).

“Sovereign immunity relates to a court's subject matter jurisdiction over a case ... and therefore presents a question of law over which we exercise de novo review.... The principle that the state cannot be sued without its consent, or sovereign immunity, is well established under our case law.... It has deep roots in this state and our legal system in general, finding its origin in ancient common law.... Exceptions to this doctrine are few and narrowly construed under our jurisprudence.” (Internal quotation marks omitted.) DaimlerChrysler Corp. v. Law, 284 Conn. 701, 711, 937 A.2d 675 (2007). To “ ‘overcome the presumption of sovereign immunity’ ”; id.; a plaintiff seeking to bring a claim against the state must establish that an exception to the doctrine applies. See id., at 711–12, 937 A.2d 675.

I

The plaintiff first asserts that it may bring its claim for a refund under the 4–R act and argues that the trial court incorrectly concluded that the 4–R act prohibits only discriminatory property taxes and not petroleum taxes. In support of its claim, the plaintiff argues that, in addition to prohibiting discriminatory property taxes, 49 U.S.C. § 11501(b)(4) expressly prohibits states from “impos[ing] another tax that discriminates against a rail carrier” and that this includes discriminatory petroleum taxes. The plaintiff further argues that the state cannot assert a sovereign immunity...