Riverton Produce Co. v. State

• Decision Date: 04 April 1994
• Docket Number: No. 92SA493,92SA493
• Citation: 871 P.2d 1213
• Parties: RIVERTON PRODUCE CO. and Cox Grain Company, Plaintiffs-Appellees/Cross-Appellants, v. STATE of Colorado; The Department of Revenue for the State of Colorado; John J. Tipton, in his official capacity as Executive Director of the Department of Revenue; Dee Hartman, in his official capacity as Director, Motor Vehicle Division, Department of Revenue; Larry D. Huls, in his official capacity as Assistant Director, Motor Vehicle Division, Department of Revenue; Jean Gouin, in her official capacity as Program Administrator, Motor Vehicle Division, Department of Revenue; Jaki Berry, in her official capacity as Administrative Officer, Motor Carrier Services, Motor Vehicle Division, Department of Revenue; and Mark S. Eckert, in his official capacity as County Clerk, Mesa County, State of Colorado, Defendants-Appellants/Cross-Appellees.
• Court: Colorado Supreme Court

Page 1213

871 P.2d 1213

RIVERTON PRODUCE CO. and Cox Grain Company Plaintiffs-Appellees/Cross-Appellants, v. STATE of Colorado; The Department of Revenue for the State of Colorado; John J. Tipton, in his official capacity as Executive Director of the Department of Revenue; Dee Hartman, in his official capacity as Director, Motor Vehicle Division, Department of Revenue; Larry D. Huls, in his official capacity as Assistant Director, Motor Vehicle Division, Department of Revenue; Jean Gouin, in her official capacity as Program Administrator, Motor Vehicle Division, Department of Revenue; Jaki Berry, in her official capacity as Administrative Officer, Motor Carrier Services, Motor Vehicle Division, Department of Revenue and Mark S. Eckert, in his official capacity as County Clerk, Mesa County, State of Colorado Defendants-Appellants/Cross-Appellees.

No. 92SA493.

Supreme Court of Colorado En Banc.

April 4, 1994.

As Modified on Denial of Rehearing

May 2, 1994.

King & Isaacson, P.C., Scott E. Isaacson, Salt Lake City, UT, Snow Hutchison & Neider, Richard Hutchison, Murray, UT, for plaintiffs-appellees/cross-appellants.

Gale A. Norton, Atty. Gen., Raymond T. Slaughter, Chief Deputy Atty. Gen., Timothy M. Tymkovich, Sol. Gen., Maurice G. Knaizer, Deputy Atty. Gen., Larry A. Williams, First Asst. Atty. Gen., Mark W. Gerganoff, Asst. Atty. Gen., General Legal Services Section, Denver, for defendants-appellants/cross-appellees State of Colorado, the Dept. of Revenue of State of Colo., John J. Tipton, Dee Hartman, Larry D. Huls, Jean Gouin and Jaki Berry.

Alan N. Hassler, Asst. County Atty., Grand Junction, for defendant-appellant/cross-appellee Mark S. Eckert.

Justice MULLARKEY delivered the Opinion of the Court.

The State of Colorado, its Department of Revenue, and various state officials appeal the trial court's ruling declaring sections 42-3-123(13)(b) and (b.3) and section 42-3-105, 17 C.R.S. (1991), pertaining to the registration and taxation of interstate and intrastate motor vehicle carriers in Colorado, facially unconstitutional under the Commerce Clause of the federal constitution. ¹ The State also appeals the trial court's finding that the Department of Revenue violated the Commerce Clause when it applied the revised registration fee schedule in sections 42-3-123(13)(b) and (b.3) to plaintiffs Riverton Produce Co. (Riverton) and Cox Grain Company (Cox) for the 1990 calendar year. Plaintiffs cross-appeal the trial court's ruling denying their claims for attorney fees pursuant to 42 U.S.C. sections 1983 and 1988 (1988). For the reasons stated below, we affirm in part, reverse in part and remand the case to the trial court for further proceedings consistent with this opinion.

I

The following facts as found in the record are relevant to our disposition of this appeal.

Senate Bill 159

Historically, Colorado was one of a majority of states which maintained a three-tiered system for registering and taxing motor vehicle carriers. That system consisted of a special fuel tax, a nominal registration fee, and a gross ton-mile tax. ² By 1989, however, most jurisdictions had abandoned the three-tiered system in favor of a simpler program which eliminated the gross ton-mile tax and increased the registration fee. Critics of the gross ton-mile tax system pointed to its high administrative costs and its vulnerability to fairly basic tax evasion techniques. In response to these concerns, the General Assembly considered possible revenue-neutral alternatives to the gross ton-mile system. Senate Bill 159 was the product of those efforts.

Senate Bill 159 eliminated the gross ton-mile tax and increased the registration fee from a flat $22.50 per vehicle to a range of fees calculated according to the weight of the vehicle and its annual mileage in Colorado. Compare § 42-3-123(13)(c), 17 C.R.S. (1984) with §§ 42-3-123(13)(b) & (b.3), 17 C.R.S. (1993). For trucks over 16,000 pounds gross vehicle weight ³ operating solely within Colorado, the new fees range from $180 to $1,800 per year. § 42-3-123(13)(b). For comparable trucks "used in interstate commerce," the fees range from $1,050 to $1,800. § 42-3-123(13)(b.3). Plaintiffs contend that these two statutory provisions effectively create a low-mileage discount for intrastate trucks operating fewer than 30,000 miles per year in Colorado which is not available to interstate trucks. ⁴ Those intrastate trucks operating over 30,000 miles per year in Colorado, however, are subject to the same registration fee schedule as interstate trucks.

The Distinction Between Apportioned and "Full Plate" Registration

The record reveals that during the six-month interval between the date Senate Bill 159 was signed into law (June 1, 1989) and the date it was to become effective (January 1, 1990), it became apparent to the Department of Revenue that the process of phasing in the new registration system and phasing out the prior one would be impossible to complete by January 1, 1990. ⁵ The problem facing the Department of Revenue was the fact that under the gross ton-mile system in effect in 1989, intra state trucks registered for twelve-month periods on a staggered or rolling basis, whereas inter state trucks were required to register by the end of December each year (with a one-month grace period) for the next calendar year.

This difference in billing procedures was compelled by the fact that Colorado, along with a majority of states and Canada, participates in an apportioned registration scheme known as the "International Registration Plan" or "IRP." Because interstate carriers must register in each jurisdiction in which they operate, the IRP permits them to register their vehicles annually in one "base" jurisdiction and to obtain credentials to operate in numerous other IRP jurisdictions. An interstate carrier who registers through the IRP pays a full annual registration fee to its base jurisdiction, which in turn transmits a percentage of that registration fee to the various IRP jurisdictions in which the carrier operates, apportioned according to the mileage driven during the preceding year in each jurisdiction. ⁶ IRP-based vehicle registrations expire on December 31 of each year, and IRP carriers have until January 31 of the ensuing year to renew their registrations. See Regulation 3-101.1(II)(B)(b), 1 C.C.R. 204-9 (1979).

For the intra state truck owner, however, the procedure is similar to that used when registering an automobile in Colorado. The intrastate carrier must apply to the local county clerk's office for a license to operate its trucks for a one-year period commencing upon receipt of the license. Thus, the renewal process for intrastate carriers occurs on a rolling basis throughout the calendar year. This license procedure is also known as a "full-plate" registration, as distinct from the apportioned registration procedure used by the IRP.

Backbilling the Intrastate Carriers

According to the affidavit of defendant-appellant Jaki Berry (Berry) of the Department of Revenue, the computer used by the various counties to generate registration fee bills for intrastate carriers was only programmed to calculate amounts due the State of Colorado during the month in which the registration plates for each vehicle expired. Therefore, the State's computer was incapable of generating a bill for intrastate trucks reflecting the new fees in effect as of January 1, 1990, because the vehicle information for such carriers was not available as of December 1989. ⁷

In response to this situation, Berry and defendant-appellant Larry D. Huls (Huls), Assistant Director of the Department of Revenue's Division of Motor Vehicles, decided that the most appropriate procedure by which to implement Senate Bill 159's new fee schedule would be, first, to charge all interstate trucks the new fees when they registered in late 1989 for the 1990 calendar year. ⁸ Next, Berry and Huls determined that as a temporary measure, the Department should continue to charge the lower 1989 fees to those intrastate carriers whose old licenses expired in December (the "December expires"), ⁹ until such time as the information was available with which to backbill those carriers for the difference between the 1989 and 1990 rates. As the State concedes on appeal, this strategy created a short-term, one-time ¹⁰ "disparity" in the statute's application between interstate and intrastate carriers. At oral argument before this court, the State indicated, however, that this "disparity" was eliminated when it backbilled all but two of the intrastate carriers with "December expires" for the difference between the 1989 and 1990 registration fees.

Although Cox complied with the Department of Revenue's implementation policy and paid the higher fees in Senate Bill 159 for the 1990 registration cycle, it did so under protest. Cox paid $35,545.11 to the IRP office in Denver in January 1990 to register its interstate vehicles for that calendar year. Cox claims that it would only have paid $2,200 had the State correctly permitted it to register its trucks under the 1989 fee schedule applicable to intrastate carriers who registered prior to January 1, 1990.

Riverton, however, followed a different strategy. It chose to register its vehicles with the Mesa County Clerk's Office prior to January 1, 1990 in an attempt to avoid the higher fees of Senate Bill 159 for the 1990 registration year. ¹¹ The idea was to avoid the apportioned IRP fee for Riverton's mileage in Colorado by registering some of its vehicles as intra state carriers in the county in which those vehicles were based. The vehicles Riverton chose to register with Mesa County were those trucks and trailers which it had leased to City Market, Inc. (City Market), a Colorado-based corporation which used the Riverton vehicles in interstate commerce. Thus, Riverton registered some of its interstate vehicles under the IRP in Utah while simultaneously registering its City Market...