Ozark Mountain Solid Waste District and Searcy County Tax Collector v. JMS Enterprises, Inc., 012121 ARSC, CV-20-425

Docket Nº:CV-20-425
Opinion Judge:KAREN R. BAKER, ASSOCIATE JUSTICE
Party Name:OZARK MOUNTAIN SOLID WASTE DISTRICT AND SEARCY COUNTY TAX COLLECTOR, JOEY PRUITT APPELLANT v. JMS ENTERPRISES, INC., ON BEHALF OF ITSELF AND ALL OTHER TAXPAYERS SIMILARLY SITUATED APPELLEE SLESLIE RUTLEDGE, ARKANSAS ATTORNEY GENERAL INTERVENOR/APPELLANT
Attorney:Leslie Rutledge, Att'y Gen., by: Jerry D. Garner, Ass't Att'y Gen., for intervenor/appellant. Bishop Law Firm, by: Matt Bishop, for appellee.
Case Date:January 21, 2021
Court:Supreme Court of Arkansas

2021 Ark. 4

OZARK MOUNTAIN SOLID WASTE DISTRICT AND SEARCY COUNTY TAX COLLECTOR, JOEY PRUITT APPELLANT

SLESLIE RUTLEDGE, ARKANSAS ATTORNEY GENERAL INTERVENOR/APPELLANT

v.

JMS ENTERPRISES, INC., ON BEHALF OF ITSELF AND ALL OTHER TAXPAYERS SIMILARLY SITUATED APPELLEE

No. CV-20-425

Supreme Court of Arkansas

January 21, 2021

APPEAL FROM THE SEARCY COUNTY CIRCUIT COURT [NO. 65CV-18-43] HONORABLE SUSAN K. WEAVER, JUDGE

Leslie Rutledge, Att'y Gen., by: Jerry D. Garner, Ass't Att'y Gen., for intervenor/appellant.

Bishop Law Firm, by: Matt Bishop, for appellee.

KAREN R. BAKER, ASSOCIATE JUSTICE

This appeal stems from an illegal-exaction case challenging whether a court-ordered $18 annual service fee charged to customers by appellant, Ozark Mountain Solid Waste District ("Ozark Mountain"), to repay Ozark Mountain's creditors is permitted by our state statutes and constitution. Ozark Mountain is a regional solid-waste district created pursuant to Arkansas Code Annotated §§ 8-6-701 et seq. and is composed of the geographical areas encompassed by Baxter, Boone, Carroll, Marion, Newton, and Searcy Counties. Appellee, JMS Enterprises, Inc. ("JMS"), is a property owner in Searcy County. In June 2018, JMS received a 2017 tax statement from the Searcy County Tax Collector that included the $18 service charge. Intervenor/Appellant, Leslie Rutledge, Attorney General of the State of Arkansas (Attorney General), intervened in this action to defend the constitutionality of section 45 of Act 274, which appropriates funds for the Arkansas Department of Environmental Quality ("ADEQ").

Relevant to this appeal is the history of litigation regarding Ozark Mountain. In 2005, Ozark Mountain purchased an existing landfill known as the "Nabors Landfill" and related equipment and assets. The purchase was funded with a $12.34 million bond issue. In 2012, Ozark Mountain defaulted on its payment, closed the Nabors Landfill, and also failed to comply with environmental laws and financial assurances. On February 12, 2013, ADEQ filed suit against Ozark Mountain and was granted summary judgment whereby ADEQ was authorized to take possession of certain accounts to address the environmental issues at Nabors Landfill.

On December 2, 2014, Bank of the Ozarks, as trustee for the bondholders, filed suit against Ozark Mountain in Pulaski County Circuit Court, Case No. 60CV-14-4479, and sought appointment of a receiver. On May 15, 2015, the Pulaski County Circuit Court appointed Geoffrey Treece as the Receiver (Receiver) for Ozark Mountain. On November 15, 2016, the Receiver filed the "Receiver's Report and Recommendations and Motion for Approval and Implementation of Recommendations" stating that based on a thirty-year period, ADEQ's closing and remediation efforts of Ozark Mountain exceeded $16 million. Further, the Receiver took the position that Ozark Mountain lacked the necessary financial resources to operate in the ordinary course of business, address its closure obligations, and service the debt to the Trustee and ADEQ. Based on this and on Arkansas Code Annotated § 8-6-714, the Receiver recommended that Ozark Mountain be ordered to levy an annual service fee of $18 to property owners beginning in 2017 and continuing for the life of the repayment. The Receiver estimated that the $18 service fee would generate approximately $1, 241, 676 annually. The recommendation further stated that the first $1 million of service fees would be "earmarked for and paid to the Trustee and ADEQ to satisfy their debt[.]" The next $100, 000 in service fees would go to Ozark Mountain for its needs, and service fees collected over and above $1.1 million, if any, would be earmarked for and paid to ADEQ in further satisfaction of its claim. On April 21, 2017, the Pulaski County Circuit Court approved the Receiver's report and ordered the Receiver to levy an annual service fee of $18 "to be assessed against each residence and business parcel located within the Ozark Mountain. The Service Fee shall commence in 2018 and continue until such time as the claims of the Trustee and ADEQ have been paid in full."

On June 5, 2018, JMS received a 2017 tax statement from the Searcy County Tax Collector that included the $18...

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