Ohio Cellular RSA Ltd. Partnership v. Board of Public Works of State of W.Va.

• Decision Date: 18 November 1996
• Docket Number: No. 23294,23294
• Citation: 481 S.E.2d 722,198 W.Va. 416
• Parties: OHIO CELLULAR RSA LIMITED PARTNERSHIP, an Illinois Limited Partnership, Petitioner Below, Appellee v. The BOARD OF PUBLIC WORKS OF THE STATE OF WEST VIRGINIA, Respondent Below, Appellant.
• Court: West Virginia Supreme Court

Page 722

481 S.E.2d 722

198 W.Va. 416

OHIO CELLULAR RSA LIMITED PARTNERSHIP, an Illinois Limited Partnership, Petitioner Below, Appellee v. The BOARD OF PUBLIC WORKS OF THE STATE OF WEST VIRGINIA,

Respondent Below, Appellant.

No. 23294.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 17, 1996.

Decided Nov. 18, 1996.

Syllabus by the Court

1. " 'A circuit court's entry of summary judgment is reviewed de novo.' Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994)." Syl. pt. 1, Jones v. Wesbanco Bank Parkersburg, 194 W.Va. 381, 460 S.E.2d 627 (1995).

2. " ' " 'The primary object in construing a statute is to ascertain and give effect to the intent of the legislature.' Syl. Pt. 1, Smith v. State Workmen's Compensation Com'r., 159 W.Va. 108, 219 S.E.2d 361 (1975)." Syl. Pt. 2, State ex rel. Fetters v. Hott, 173 W.Va. 502, 318 S.E.2d 446 (1984).' Syllabus point 2, Lee v. West Virginia Teachers Retirement Board, 186 W.Va. 441, 413 S.E.2d 96 (1991)." Syl. pt. 2, Francis O. Day Co., Inc. v. Director, D.E.P., 191 W.Va. 134, 443 S.E.2d 602 (1994).

3. " 'In the absence of any specific indication to the contrary, words used in a statute will be given their common, ordinary and accepted meaning.' Syl. Pt. 1, Tug Valley Recovery Center, Inc. v. Mingo County Commission, 164 W.Va. 94, 261 S.E.2d 165 (1979)." Syl. pt. 1, Pennsylvania and West Virginia Supply Corp. v. Rose, 179 W.Va. 317, 368 S.E.2d 101 (1988).

4. " 'In the construction of statutes, where general words follow the enumeration of particular classes of persons or things, the general words, under the rule of construction known as ejusdem generis, will be construed as applicable only to persons or things of the same general nature or class as those enumerated, unless an intention to the contrary is clearly shown.' Point 2, Syllabus, Parkins v. Londeree, Mayor, 146 W.Va. 1051 [, 124 S.E.2d 471 (1962) ]." Syl. pt. 2, The Vector Co., Inc. v. Board of Zoning Appeals of the City of Martinsburg, 155 W.Va. 362, 184 S.E.2d 301 (1971).

5. "Personal property" which is defined in W. Va.Code, 11-5-3 [1961] as "all fixtures attached to land ...; all things of value, moveable and tangible, which are the subjects of ownership; all chattels, real and personal; all notes, bonds, and accounts receivable, stocks and other intangible property[,]" does not include within its definition an FCC license which authorizes a person to provide cellular communication services. Thus, an FCC license authorizing a person to provide cellular communication services is not personal property which is subject to assessment for personal property tax purposes under W. Va.Code, 11-6-7(e) [1986].

Darrell V. McGraw, Jr., Attorney General, Stephen B. Stockton, Barry L. Koerber, Jeffrey G. Blaydes, Assistant Attorneys General, Charleston, for Appellant.

Erica L. Horn, Bruce F. Clark, Jason P. Thomas, Stites & Harbison, Lexington, Kentucky, Craig M. Kay, John R. McGhee, Jr., Crystal S. Stump, Kay, Casto, Chaney, Love & Wise, Charleston, for Appellee.

G. Thomas Battle, Trina L. Leone, Spilman, Thomas & Battle, Charleston, for Amici Curiae, Tri-State Cellular Partnership, Hardy Cellular Telephone Company, USCOC of WV RSA# 2, Inc., USCOC of Cumberland, Inc. and West Virginia Cellular Corp.

McHUGH, Chief Justice:

The appellant, the Board of Public Works, appeals the July 25, 1995 order of the Circuit Court of Logan County which granted summary judgment for the appellee, Ohio Cellular RSA Limited Partnership (hereinafter "Ohio Cellular"), by finding that the Board of Public Works wrongly included the value of Ohio Cellular's Federal Communications Commission license (hereinafter "FCC license") in its property tax assessment. For reasons explained below, we ¹ affirm the July 25, 1995 order of the circuit court.

I

In 1992 Ohio Cellular began providing cellular telephone services in Boone, Lincoln, Logan, Mingo, McDowell and Wyoming Counties, West Virginia. In order to engage in the cellular telephone business, Ohio Cellular was required to possess an FCC license pursuant to 47 U.S.C. § 301 (1994) of the Communications Act of 1934. ² This license authorizes Ohio Cellular to provide cellular communication services over a specified band on the electromagnetic spectrum for ten years subject to renewal. 47 U.S.C. § 307(c) (1994). Ohio Cellular uses but does not own any of the electromagnetic spectrum:

It is the purpose of this chapter, among other things, to maintain the control of the United States over all the channels of radio transmission; and to provide for the use of such channels, but not the ownership thereof, by persons for limited periods of time, under licenses granted by Federal authority, and no such license shall be construed to create any right, beyond the terms, conditions, and periods of the license. No person shall use or operate any apparatus for the transmission of energy or communications or signals by radio ... except under and in accordance with this chapter and with a license in that behalf granted under the provisions of this chapter.

47 U.S.C. § 301 (1994), in relevant part (emphasis added).

Both parties agree that the license is subject to statutory and regulatory restrictions. For instance, the license may not be transferred or sold without FCC approval. 47 U.S.C. § 301 et seq. Furthermore, the license may be revoked by the FCC if the licensee fails to operate in the "public interest, convenience and necessity." 47 U.S.C. § 307 and 47 U.S.C. § 301, et seq. However, the FCC may not revoke a license without providing the licensee due process. Id.

There are only a limited number of licenses. Originally, the FCC awarded some of the licenses to the traditional, wire-based telephone companies, and the other licenses were awarded through a lottery system to businesses who qualified for the licenses. See 47 U.S.C. § 308(b) (1994) (Stating that the FCC may prescribe by regulation the requirements regarding citizenship, character, finances, and technical ability which must be satisfied before a company will qualify to obtain a license). Those who acquired their licenses pursuant to the above two methods did so at a minimal cost.

Currently, however, the FCC does not use the above methods to award the licenses. Instead, the FCC sells these licenses to the highest bidders and keeps the profit pursuant to 47 U.S.C. § 309(j) (1994). These licenses may likewise be sold between private parties. However, any profits realized from such sale do not benefit the FCC. In 1992 Ohio Cellular purchased its FCC license for $15.7 million from a private company which had originally received the license from the FCC.

The case now before this Court arose once Ohio Cellular's property became subject to West Virginia's state property tax. Pursuant to W. Va.Code, 11-6-7 [1986], Ohio Cellular, as a telegraph or telephone company, is subject to assessment for property tax purposes by the Board of Public Works. W. Va.Code, 11-6-7(e) [1986] specifically requires Ohio Cellular to report to the Board of Public Works "its personal property of every kind whatsoever, including money, credits and investments, and the amounts thereof wholly held or used in this state, showing the amount and value thereof in each county[.]" ³ Furthermore, W. Va.Code, 11-6-9 [1986] requires the Tax Commissioner to review the returns filed by public utilities and determine the true and actual values of the utilities.

Pursuant to this statutory scheme, Ohio Cellular filed with the Board of Public Works an annual report pursuant to W. Va.Code, 11-6-7 [1986]. The values set forth in Ohio Cellular's report were the basis for the Tax Commissioner's 1994 property tax valuation. Upon tentatively valuing Ohio Cellular's property, the Tax Commissioner included the value of Ohio Cellular's FCC license in its valuation. The Board of Public Works affirmed this value on December 17, 1993. Ohio Cellular appealed the Board of Public Works' valuation to the Circuit Court of Logan County which held, as previously stated, that Ohio Cellular's FCC license was not taxable property, and, therefore, the value of the FCC license could not be assessed for property tax purposes.

The result of the circuit court's holding was that the Board of Public Works' appraisal of the true and actual value of Ohio Cellular's West Virginia property was reduced from $1,585,618.00 to $477,273.00 for the tax year 1994 which resulted in the assessed value being reduced from $951,400.00 to $286,364.00. ⁴ It is this holding of the circuit court that the Board of Public Works now appeals.

II

At the outset we note that " '[a] circuit court's entry of summary judgment is reviewed de novo.' Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994)." Syl. pt. 1, Jones v. Wesbanco Bank Parkersburg, 194 W.Va. 381, 460 S.E.2d 627 (1995). The issue before this Court is whether an FCC license to provide cellular telephone services is subject to assessment for property tax purposes. The parties did not cite nor could we find any cases from other courts which have directly addressed this issue. Although this issue of first impression is easily stated, it is not so easily resolved. As will be discussed below, an FCC license is difficult to categorize.

The Board of Public Works asserts that the FCC license is intangible personal property which is subject to assessment for property tax purposes. Though the Board of Public Works concedes that Ohio Cellular does not have a property interest in the electromagnetic spectrum, it argues that Ohio Cellular nevertheless owns the "valuable, intangible right to use those airwaves in a for-profit, commercial enterprise." It is this right to use the airwaves, as represented by the possession of an FCC license, which constitutes a property right. Thus, the Board of Public Works concludes that the value of this right to use the airwaves is subject to assessment for property tax purposes.

Conversely, Ohio Cellular...