Jefferson County Com'n v. Edwards

• Decision Date: 14 May 2010
• Docket Number: 1090437 and 1090517.
• Citation: 49 So.3d 685
• Parties: JEFFERSON COUNTY COMMISSION et al. v. Jessica EDWARDS et al. Jefferson County Commission et al. v. Jessica Edwards et al.
• Court: Alabama Supreme Court

49 So.3d 685

JEFFERSON COUNTY COMMISSION et al.
v.
Jessica EDWARDS et al.
Jefferson County Commission et al.
v.
Jessica Edwards et al.

1090437 and 1090517.

Supreme Court of Alabama.

May 14, 2010.

49 So.3d 687

Joseph B. Mays, Jr., Matthew H. Lembke, and John C. Neiman, Jr., of Bradley Arant Boult Cummings LLP, Birmingham; and Jeffrey M. Sewell, county atty., Birmingham, for appellants.

Samuel M. Hill of Hill Turner, LLC, Birmingham; James H. McFerrin of McFerrin Law Office, Birmingham; and E. Allen Dodd, Jr., of Scruggs, Dodd & Dodd, Fort Payne, for appellees.

LYONS, Justice.

The Jefferson County Commission, Bettye Fine Collins, Travis Hulsey, and J.T. Smallwood (hereinafter referred to collectively as "the County") ¹ appeal from orders entered by the Jefferson Circuit Court on December 23, 2009, and January 15, 2010. This Court expedited the proceedings and heard oral arguments from the parties on April 7, 2010. As to the December 23 order, we affirm in part, reverse in part, and remand; as to the January 15 order, we reverse and remand.

I. Factual Background

In 1967, the Alabama Legislature enacted Act No. 406, Ala. Acts 1967 ("the 1967 Act"), authorizing Jefferson County to impose business-license and occupational taxes upon any person engaging in a business for which he or she was not then required to pay a license or privilege tax to either the State or Jefferson County. In 1987, Jefferson County enacted Ordinance No. 1120, which, for the first time, imposed the occupational tax authorized by the 1967 Act. There followed a complex sequence of legislative enactments and related litigation that is discussed in detail in an opinion issued in an earlier appeal in this proceeding. See Jefferson County Commission v. Edwards, 32 So.3d 572 (Ala.2009) (" Jefferson County I ").

This proceeding is a class action filed in 2007 by Jessica Edwards against the County on behalf of a class composed of

49 So.3d 688

taxpayers (hereinafter "the taxpayers"). The taxpayers alleged that the occupational tax levied by Jefferson County was unlawful because the 1967 Act, which authorized the tax, had been repealed by Act No. 99-669, Ala. Acts 1999. The trial court on January 12, 2009, relying on an unrelated opinion of this Court holding that after-the-fact determinations of whether there had been sufficient votes in the legislature to pass a bill violated the doctrine of separation of powers, ² concluded that the judgment in Jefferson County Employees' Association v. Jefferson County, No. CV-00-0297, declaring Act No. 99-669 invalid for insufficient votes, was void for want of subject-matter jurisdiction. The trial court then relied on unambiguous language in Act No. 99-669 repealing the 1967 Act to hold that the collection of the occupational tax pursuant to the authority granted in the 1967 Act was illegal. After the 2009 regular legislative session adjourned without the enactment of a statute providing for the continuance of the collection of the tax, the trial court entered an injunction that required that the tax payments received by Jefferson County under Ordinance No. 1120 be placed in escrow. In Jefferson County I, this Court upheld the trial court's judgment declaring that Act No. 99-669 had repealed the 1967 Act.

During a specially called legislative session in 2009, while the appeal in Jefferson County I was pending and before oral argument in that case, the legislature enacted Act No. 2009-811, Ala. Acts 2009, which was effective August 14, 2009. Section 7 of Act No. 2009-811 authorized Jefferson County to resume collecting occupational taxes as of the effective date of that act and, relevant to this appeal, approved and ratified Jefferson County's collection of taxes subsequent to the effective date of Act No. 99-669; § 9 repealed Act No. 99-669; and § 10 included a savings clause permitting the severance of any portion of Act No. 2009-811 found to be unconstitutional while saving the remaining portions not having any constitutional infirmity. We expressly stated in our opinion in Jefferson County I that the effect of Act No. 2009-811 was not then before us.

After our affirmance of the trial court's judgment in Jefferson County I, the taxpayers, in light of the retroactivity provisions in Act No. 2009-811, filed a motion to release the tax proceeds that had been placed in the escrow fund to a court-appointed settlement administrator for the calculation of refunds due. The County filed a motion to dissolve the injunction, to vacate the escrow order, and to release the escrowed taxes to Jefferson County. The taxpayers then filed a motion to enforce the January 12, 2009, order; the County filed a motion to clarify the escrow period. On December 23, 2009, the trial court entered an order denying the County's motion to dissolve the injunction, holding that Act No. 2009-811 violates § 95 of the Alabama Constitution of 1901 prohibiting the enactment of legislation taking away a cause of action after a suit based on that cause of action has been filed. The trial court's order also required the County to transfer the moneys in the escrow fund, together with the interest accrued, to a special master charged with administering refunds of the taxes Jefferson County had

49 So.3d 689

collected between January 12, 2009, and August 14, 2009. The County appealed from the order of December 23, 2009 (case no. 1090437).

On January 15, 2010, the trial court entered an order purporting to certify the December 23, 2009, order as final pursuant to Rule 54(b), Ala. R. Civ. P.³ The trial court also ordered the County to pay postjudgment interest accruing during the pendency of this appeal. The County appealed from the order of January 15, 2010 (case no. 1090517).

II. Analysis

A. Applicability of the Doctrine of Estoppel or Waiver

We are met at the threshold by the taxpayers' contention that in several instances former counsel for the County admitted that § 95 rendered the retroactive feature of Act No. 2009-811 void. The taxpayers contend that, in light of former counsel's admission, judicial estoppel prevents the County from taking a contrary position in this proceeding. In the alternative, the taxpayers argue that the County has waived the position it takes in this appeal. We conclude that neither the doctrine of judicial estoppel nor the doctrine of waiver applies.

In Ex parte First Alabama Bank, 883 So.2d 1236, 1244 (Ala.2003), quoting New Hampshire v. Maine, 532 U.S. 742, 750-51, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001), this Court recognized an essential element of judicial estoppel-the party attacked for asserting an inconsistent position must have been successful in the prior proceeding so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first court or the second court was misled. No such circumstance exists here. Nor can the County be held to have waived its position for failing to assert the mootness of this proceeding based on Act No. 2009-811 in its application for rehearing in Jefferson County I. As previously noted, the issue of the effect of Act No. 2009-811 was not before us in Jefferson County I, and any argument on rehearing asserting the applicability of Act No. 2009-811 would have violated our rule prohibiting new matters from being argued for the first time on rehearing and would not have been considered. See Chism v. Jefferson County, 954 So.2d 1058, 1106 (Ala.2006).

B. Challenge to the Constitutionality of Act No. 2009-811

The second sentence of § 95 of the Alabama Constitution of 1901 provides:

"After suit has been commenced on any cause of action, the legislature shall have no power to take away such cause of action, or destroy any existing defense to such suit."

Section 7 of Act No. 2009-811 provides:

"All actions of the governing body in continuously levying, collecting and enforcing the levy of the county occupational and license taxes pursuant to [the 1967 Act] since the time of the initial levies thereof, particularly from and after the effective date of Act 99-669; 1999 Second Special Session (Acts 1999, p. 168) are hereby ratified, validated, and confirmed. This act is therefore intended to be retroactive and curative to November 29, 1999; and all the exemptions originally provided in [the 1967 Act] shall remain in effect, except for the exemption for any person required to pay a privilege or license tax to the state or the county by

49 So.3d 690

Article 1, Chapter 20, Title 51 of the Code of Alabama 1940, which shall expire January 1, 2010, and the rate of tax shall be the rate at which the tax was levied on the effective date of this act until January 1, 2010, at which time the maximum shall be the rate specified in Section 6. On and after January 1, 2010, the county governing body shall have no authority to levy an occupational tax under [the 1967 Act]."

(Emphasis added.) Section 9 of Act No 2009-811 expressly repeals Act No. 99-669, the act the trial court and this Court determined to have eliminated Jefferson County's authority to impose the occupational tax. Section 10 of Act No. 2009-811 provides:

"If any provision of this action shall be held by any court of competent jurisdiction to be invalid, such invalidity shall not affect any other provisions of this act and the act shall be given full force and effect as completely as if the invalid provision had not been included."

We examine the constitutionality of Act No. 2009-811 with the presumption that it is constitutional. See 1568 Montgomery Highway, Inc. v. City of Hoover, 45 So.3d 319, 328-29 (Ala.2010):

" ' "Our review of constitutional challenges to legislative enactments is de novo." Richards v. Izzi, 819 So.2d 25, 29 n. 3 (Ala.2001). Additionally, acts of the legislature are presumed constitutional. State v. Alabama Mun. Ins. Corp., 730 So.2d 107, 110 (Ala.1998). See also Dobbs v. Shelby County Econ. & Indus. Dev. Auth., 749 So.2d 425, 428 (Ala.1999) ("In reviewing the constitutionality of a

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