Seibert v. Clark

• Decision Date: 05 February 1993
• Docket Number: No. 90-518-M,90-518-M
• Citation: Seibert v. Clark, 619 A.2d 1108 (R.I. 1993)
• Parties: James E. SEIBERT d.b.a. Seibert Farms v. R. Gary CLARK, Tax Administrator. P.
• Court: Rhode Island Supreme Court

Page 1108

619 A.2d 1108

James E. SEIBERT d.b.a. Seibert Farms v. R. Gary CLARK, Tax Administrator.

No. 90-518-M.P.

Supreme Court of Rhode Island.

Feb. 5, 1993.

John Williams, Jeffrey King, Lori Caron Silveira, Robert Fine, Licht & Semonoff, Providence, for plaintiff.

Bernard Lemos, Marcia McGair Ippolito, Div. of Taxation, for defendant.

OPINION

SHEA, Justice.

This matter comes before the Supreme Court on the plaintiff's petition for the issuance of a writ of certiorari to review the dismissal of a law suit in the Sixth Division of the District Court of Rhode Island. The plaintiff, James Seibert d.b.a. Seibert Farms (Seibert), brought suit against R. Gary Clark, Rhode Island Tax Administrator (tax administrator), challenging the constitutionality of the decal-fee requirement under the Fuel Use Reporting Law. For the reasons set forth below we deny plaintiff's petition.

The parties stipulated to and submitted an agreed statement of facts for the District Court to consider. We summarize the relevant facts from that stipulation and rely on other facts in the record in our analysis.

Seibert was an unincorporated motor carrier with his principal place of business in Story City, Iowa, during the calendar years 1985 and 1986. The defendant tax administrator administers and enforces the Fuel Use Reporting Law imposed upon motor carriers pursuant to G.L.1956 (1982 Reenactment) chapter 36.1 of title 31. At issue is the constitutionality of the decal-fee requirement for nonresident motor carriers under the Fuel Use Reporting Law as it existed between 1982 and 1987. ¹ Seibert was a "motor carrier" within Rhode Island as statutorily defined in the Fuel Use Reporting Law because he operated or caused to be operated a single "covered motor vehicle." ² The Fuel Use Reporting Law imposes certain requirements upon motor carriers who wish to travel on Rhode Island's highways. All motor carriers operating within Rhode Island are required to obtain a motor-carrier fuel license (motor-carrier license) from the tax administrator. Section 31-36.1-3, as amended by P.L.1987, ch. 118, art. 18, § 1. Pursuant to § 31-36.1-6, all motor carriers operating within Rhode Island are also required to file a surety bond with the tax administrator as a precondition to obtaining their motor-carrier licenses. In addition all motor carriers operating within Rhode Island are annually required to obtain identification devices, that is, fuel decals, which are affixed to each motor vehicle they operate in Rhode Island so as to demonstrate compliance with the licensing and bonding requirements of the Fuel Use Reporting Law. The annual fee for each fuel decal is $10. Section 31-36.1-3.

On April 25, 1985, Seibert applied to the Rhode Island Division of Taxation (tax division) for a motor-carrier license and one 1985 fuel decal. The tax division issued Seibert motor-carrier license number 159419. Seibert filed a cash bond and paid the tax division a total sum of $30.40 on April 30, 1985. Of this $30.40 payment, $10 was attributable to his 1985 fuel-decal fee. Similarly, on October 10, 1985, Seibert made an application for one 1986 fuel decal and paid the tax division $10 on October 15, 1985.

Seibert, through his attorneys, directed a letter to the tax administrator on January 24, 1986, seeking declaratory relief, injunctive relief, and a $20 refund for the decal fees that he paid in 1985 and 1986. He also made a claim for refund "on behalf of all similarly situated motor carriers with respect to fuel decal fees paid by them." The tax administrator responded to Seibert's demands in a letter denying Seibert's individual-refund claims and treating Seibert's letter as a request for an administrative hearing. The tax administrator expressly declined to address the refund claims Seibert made on behalf of other motor carriers because there are no provisions for class-action administrative proceedings.

An administrative hearing convened at the tax division, pursuant to G.L.1956 (1988 Reenactment) chapter 35 of title 44. Both parties appeared through counsel. The adjudicative hearing officer recommended that plaintiff's refund claims be denied. The tax administrator adopted and incorporated this recommendation in his final decision and order. Notice of the tax administrator's denial was forwarded to plaintiff and his attorney. Seibert then sought a de novo judicial review in the District Court.

I

As a preliminary issue we address defendant tax administrator's argument that plaintiff's claims are moot. The tax administrator relies on the amendment to § 31-36.1-3 in 1987, which removed the controversial language exempting vehicles registered in Rhode Island from paying the decal fee to suggest that there is no longer a controversy. The result of this amendment of the statute is that all motor carriers, whether nonresident or resident, are now required to pay the decal fee.

Contrary to defendant's argument, the amendment does not render this case moot. A case is moot if it raised a justiciable controversy at the time the complaint was filed, but events occurring after the filing have deprived the litigant of an ongoing stake in the controversy. See DeFunis v. Odegaard, 416 U.S. 312, 94 S.Ct. 1704, 40 L.Ed.2d 164 (1974). To support his position, defendant cites our decision in the related case Owner-Operators Independent Drivers Association of America v. State, 541 A.2d 69, 71 (R.I.1988), where we stated: "the plaintiffs challenge the constitutionality of § 31-36.1-3 * * *. [T]he language in the statute excepting vehicles registered in Rhode Island has been excised, thus rendering the underlying claim moot." However, the underlying claim in Owner-Operators was a claim for injunctive relief. The only issue mooted by the amended statute in the present case was the prospective relief that plaintiff had initially demanded. A live justiciable controversy remains in Seibert's claim for a refund. Where injunctive relief is moot, a claim for damages can keep the controversy breathing. See Firefighters Local Union No. 1784 v. Stotts, 467 U.S. 561, 104 S.Ct. 2576, 81 L.Ed.2d 483 (1984); University of Texas v. Camenisch, 451 U.S. 390, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981); Powell v. McCormack, 395 U.S. 486, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969); Bowen v. Hackett, 361 F.Supp. 854 (D.R.I.1973).

II

The District Court properly dismissed the class-action aspect of this case. In reaching this conclusion, the judge relied on the fact that Seibert was acting as an individual. There is no indication that a class ever existed. Seibert was the only taxpayer who challenged the tax and sought a refund. No other taxpayer sought a refund at any time.

The purpose of class actions has been to avoid a multiplicity of suits and to promote judicial economy. "Class actions have been awarded judicial recognition in this jurisdiction where the interested parties to a suit are numerous." Johnston Businessmen's Association v. aaRussillo, 108 R.I. 257, 259, 274 A.2d 433, 435 (1971). What distinguishes the present case from a case in which there is a need for a class action is that Seibert is the only aggrieved party seeking relief. We do not face the risk of a multiplicity of suits in this case because no other individuals have come forward at any time seeking relief during the existence of the decal-fee-requirement exemption or after it was repealed. The record indicates that the only other claims for refunds have come from truckers who ordered too many decals by mistake. Those truckers were given a reasonable and adequate mechanism by the tax administrator to obtain such refunds within a sixty-day period.

Both parties made arguments regarding the jurisdiction of the District Court even to hear class actions. In addition they raised the issue of the need for each individual plaintiff to exhaust the administrative remedies available before proceeding as a class in District Court if jurisdiction were to be found. The tax administrator correctly points out that we specifically set forth the required statutory procedure for administrative and judicial review of fuel decal refund claims in Owner-Operators, when we said:

"The appropriate route for challenging the actions of an administrative authority, in this case that of the tax administrator, is delineated in chapter 36 of title 42, the Administrative Procedures Act. * * * A plaintiff is required to commence a proceeding against the tax administrator for tax refunds, including any additional relief requested. The tax administrator is then required to review the complaint and render a decision. This is the sequence of action mandated by statute." 541 A.2d at 72.

Statutes prescribing the time and the procedure to be followed by a litigant attempting to secure appellate review are to be strictly construed. Potter v. Chettle, 574 A.2d 1232, 1234 (R.I.1990).

Following a review under these statutory procedures by the tax administrator, an aggrieved plaintiff is entitled to a de novo review of the tax administrator's findings in the District Court pursuant to G.L.1956 (1985 Reenactment) § 8-8-24. There is no specific provision in the administrative procedures outlined that allows a class action. Instead each taxpayer is required to pursue his remedy individually with the tax administrator. In this case, where only Seibert has exhausted his administrative remedies, proceeding as a class to the District Court was not an option.

We caution, however, that our conclusion is based on the facts of this case alone, and that we are not prohibiting a class action in the District Court in all cases where taxpayers are seeking relief. This case turns on the simple fact that there is no class seeking relief, only Seibert. The absence of a specific rule permitting class actions in District Court does not prohibit them in all cases. By way of comparison, the adoption of Rule 23 of the Superior Court Rules of Civil Procedure in 1966 did not create the...