Sisson v. Triplett, C3-87-632

• Decision Date: 26 August 1988
• Docket Number: No. C3-87-632,C3-87-632
• Citation: 428 N.W.2d 565
• Parties: William Charles SISSON, Appellant, v. Mr. Thomas TRIPLETT, Minnesota Commissioner of Revenue, et al., Respondents.
• Court: Minnesota Supreme Court

Page 565

428 N.W.2d 565 12 A.L.R.5th 980 William Charles SISSON, Appellant,
v.
Mr. Thomas TRIPLETT, Minnesota Commissioner of Revenue, et
al., Respondents. No. C3-87-632. Supreme Court of Minnesota. Aug. 26, 1988.

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Syllabus by the Court

Minn.Stat. ch. 297D (1986) does not violate procedural or substantive due process rights or the right against self-incrimination guaranteed by the fifth and fourteenth amendments of the United States Constitution and article I, section 7 of the Minnesota State Constitution.

Barry V. Voss, Minneapolis, for appellant.

Thomas K. Overton, and Kenneth Kohnstamm, Sp. Assts., St. Paul, for Com'r of Revenue.

John R. Krouss, Lake of the Woods Co. Atty., Baudette, for respondents.

Heard, considered and decided by the court en banc.

WAHL, Justice.

This appeal arises from an action brought by William Charles Sisson, pursuant to 42 U.S.C. Sec. 1983 (1982), challenging the constitutionality of the Minnesota Marijuana and Controlled Substance Taxation Act, Minn.Stat. ch. 297D (1986). The statute imposes a tax on marijuana and controlled substances, Minn.Stat. Sec. 297D.08 (1986), and provides that assessment and collection of the tax be made pursuant to jeopardy procedures, Minn.Stat. Sec. 297D.12 (1986). The trial court found the act constitutional and granted partial summary judgment for the state. We affirm.

By notice dated September 16, 1986, the Minnesota Department of Revenue (Department)

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assessed Sisson $113,600 for taxes and penalties due on controlled substances. On September 17, 1986 the Department levied upon a recreational vehicle, travel trailer and lawn tractor owned by Sisson and located near Baudette, Minnesota. The Department notified Sisson by certified mail that these items would be sold at a public sale on October 17, 1986. On October 16, 1986, Sisson filed an appeal with the Minnesota Tax Court which was still pending when this case was argued. At the same time, in district court, Sisson applied for a temporary restraining order which was granted that same day after he posted a $1,200 bond to cover the costs of cancelling the sale. The restraining order was continued by a temporary injunction dated November 10, 1986.

Sisson moved for partial summary judgment declaring Minn.Stat. ch. 297D (1986) unconstitutional. He alleged that jeopardy assessments made pursuant to chapter 297D authorized the seizure and forfeiture of property without due process of law, and also violated his right against self-incrimination by mandating that an alleged dealer of controlled substances affix to those substances a tax stamp as evidence of payment of the tax. He also argued that the act causes irreparable injury in that it deprives him of his property without due process of law and does not provide an adequate legal remedy by which to challenge the basis of the jeopardy assessment.

Respondents brought a cross-motion for partial summary judgment declaring chapter 297D constitutional and enforceable.

The district court granted summary judgment for respondents holding, first, that since the act provides an opportunity to obtain a judicial hearing after seizure and prior to the sale of seized property, it fully meets the requirements of procedural due process. Regarding Sisson's substantive due process challenge, the court found that the act was not void-for-vagueness. Finally, the court determined that, since no information is required from the taxpayer and any volunteered information is subject to nondisclosure and use-immunity, the act does not violate rights against self-incrimination.

After briefing and oral argument, the court of appeals certified Sisson's appeal to this court for review pursuant to Minn.R.Civ.App.P. 118. Our review focuses on the following issues: ¹ whether chapter 297D denies procedural due process as required by the fourteenth amendment to the United States Constitution and article I, section 7 of the Minnesota State Constitution; whether chapter 297D violates substantive due process; and whether chapter 297D violates an individual's right against self-incrimination as contained in the fifth and fourteenth amendments to the United States Constitution and in article I, section 7 of the Minnesota State Constitution.

I.

Minn.Stat. ch. 297D (1986) imposes a tax upon marijuana and controlled substances. Minn.Stat. Sec. 297D.08. No dealer ² may possess such substances unless the tax has been paid and stamps, issued upon payment, have been permanently affixed to the substances. Minn.Stat. Secs. 297D.04, 297D.11, subd. 1 (1986).

Assessment and collection of this tax are made pursuant to jeopardy procedures. Minn.Stat. Sec. 297D.12 (1986). That is, the commissioner of revenue need not first request voluntary payment from the dealer and then delay taking further action. Rather, the commissioner may assess the tax, demand payment and enforce collection

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immediately. ³ The seized property may be sold during the time an appeal of the assessment may be filed or while the appeal is pending. Minn.Stat. Sec. 297D.12, subd. 1 (1986); Minn.Stat. Sec. 270.70, subd. 4 (1986). However, a person whose property is sold may obtain the proceeds of the sale should the commissioner's assessment be reversed. Minn.Stat. Sec. 270.709, subd. 2(c) (1986). Because the act incorporates Minn.Stat. Sec. 270.70 (1986), certain equitable remedies are also available to the taxpayer. For example, although Sec. 297D.12, subd. 2 provides that injunctions against the assessment or collection of any taxes or penalties are prohibited, a taxpayer can obtain injunctive relief to prevent irreparable injury. Minn.Stat. Sec. 270.70, subd. 7 (1986). The taxpayer can also obtain release of the levied property upon such equitable terms and conditions as the court determines. Id., subd. 12. Finally, a person may obtain relief from an actual or potential seizure and/or sale by posting a surety bond or other security. Id., subd. 6.

The only requirement for issuance of the stamps is payment of the appropriate tax. Affidavit of Don Trimble, Acting Manager of Alcohol, Tobacco and Special Taxes Unit, Minn. Dept. of Revenue, Jan. 9, 1987. It is not required that the stamps be purchased by the dealer himself or that the purchaser appear in person. Id. Although chapter 297D does not provide immunity to a dealer from criminal prosecution, any information which is supplied to the Department of Revenue cannot be disclosed and its use in a criminal proceeding is barred. Minn.Stat. Sec. 297D.13 (1986). ⁴ Any dealer who fails to pay the tax is liable both for the tax and a 100% penalty. Minn.Stat. Sec. 297D.09, subd. 1 (1986).

II.

The first issue to be decided is whether Minn.Stat. ch. 297D (1986) denies procedural due process as required by the fourteenth amendment to the United States Constitution and article I, section 7 of the Minnesota State Constitution. We conclude that it does not. The basic requirements of those due process clauses are notice and an opportunity for a hearing appropriate to the case. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950). The right to notice and the opportunity to...