Ward v. State

Decision Date29 January 1996
Docket Number01-93-00301-CR,Nos. 01-93-00294-C,s. 01-93-00294-C
Citation915 S.W.2d 941
PartiesCurtis Ray WARD, Appellant, v. The STATE of Texas, Appellee. (1st Dist.)
CourtTexas Court of Appeals

Robert G. Turner, Houston, for appellant.

Michael R. Little, Steven Green, Anahuac, for appellee.

On Appeal from the 344th District Court Chambers County, Texas; Trial Court Cause Nos. 7837, 7838.



OLIVER-PARROTT, Chief Justice.

Appellant, Curtis Ray Ward, was indicted for aggravated possession of marihuana and for possession of marihuana on which no tax had been paid. In a plea in bar and an application for writ of habeas corpus, appellant asserted that the double jeopardy clause of the United States Constitution barred his prosecution for these offenses. The trial court denied relief. This Court affirmed. The Court of Criminal Appeals refused appellant's petition for discretionary review. However, the United States Supreme Court vacated our judgment and remanded the case back to this Court for further consideration in light of its decision in Department of Revenue v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994). See Ward v. State, 870 S.W.2d 659 (Tex.App.--Houston [1st Dist.] 1994, pet. ref'd), vacated, 513 U.S. 1011, 115 S.Ct. 567, 130 L.Ed.2d 485 (1994). We reverse and render judgment that the writ of habeas corpus be granted.

Factual and Procedural Background

According to his plea in bar, appellant was stopped and searched by Chambers County authorities on February 13, 1992. The officers found 78 pounds of marihuana in a locked tool box, and seized a radar detector and $2,165 in cash.

Appellant was indicted for aggravated possession of marihuana (cause number 7837) and for possession of marihuana on which no tax had been paid (cause number 7838).

On March 16, 1992, John Sharp, Comptroller of Public Accounts, sent appellant a notice of tax due, advising appellant that he owed $109,546.50, as well as a $10,954.65 penalty for failure to pay tax on the marihuana. Appellant made a $250 payment on the amount owed.

The State filed a motion for summary judgment seeking forfeiture of the cash and radar detector seized by the police. Appellant did not contest the motion, and in July 1992, the trial court granted the motion and ordered the $2,165 and the radar detector forfeited to the State of Texas.

On October 28, 1992, appellant filed a plea in bar, and on February 23, 1993, he filed an application for writ of habeas corpus. In both, he asserted that because he "suffered a fine and forfeiture, clearly penal in nature, arising out of the transaction leading to Applicant's criminal prosecution," prosecution for the charged offenses would subject him to double jeopardy. The trial court denied both motions.

Double Jeopardy

The double jeopardy clause of the fifth amendment 1 protects against three distinct abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and multiple punishments for the same offense. United States v. Halper, 490 U.S. 435, 440, 109 S.Ct. 1892, 1897, 104 L.Ed.2d 487 (1989). This case involves the third of these protections.

Tax Assessment

In his first two points of error, appellant asserts that: (1) assessment of a tax under the Texas Controlled Substances Tax 2 "is considered a punishment for Fifth Amendment, Double Jeopardy Clause Purposes"; and (2) the assessment of a tax against him pursuant to the statute and his partial payment of the tax "bars subsequent prosecution for possession of the marihuana that constituted the basis for the imposition of the tax."

I. Kurth Ranch

Appellant relies upon Kurth Ranch to support his argument that the assessment of the tax and his partial payment of the tax bars his prosecution for the offenses for which he was indicted. In Kurth Ranch, the Supreme Court addressed the question "whether a tax on the possession of illegal drugs assessed after the State has imposed a criminal penalty for the same conduct may violate the constitutional prohibition against successive punishments for the same offense." 511 U.S. at ----, 114 S.Ct. at 1941. The Court found that Montana's Dangerous Drug Tax was "too far removed in crucial respects from a standard tax assessment to escape characterization as punishment for the purpose of Double Jeopardy analysis." Id. at ----, 114 S.Ct. at 1948.

The Kurth family had been growing large quantities of marihuana on the family ranch. Id. at ----, 114 S.Ct. at 1942. Six family members were arrested and charged with conspiracy to possess drugs with the intent to sell, or, alternatively, possession of drugs with the intent to sell. Id. Each of the family members entered into a plea agreement and was sentenced by the court. Id.

The State assessed a tax of almost $900,000 on the seized drugs. Id. Although the family challenged the assessment in administrative proceedings, these proceedings were stayed when the Kurths filed bankruptcy. Id. at ----, 114 S.Ct. at 1943. When the State filed a proof of claim for the unpaid tax with the bankruptcy court, the Kurths challenged the constitutionality of the tax. Id. The bankruptcy court found that only $181,000 of the tax was authorized by the state's tax act, but held that this assessment constituted a form of double jeopardy. Id. The Supreme Court agreed.

The Supreme Court noted that although neither a high rate of taxation nor an obvious deterrent purpose automatically marked a tax as a form of punishment, these factors are "consistent with a punitive character." Id. at ----, 114 S.Ct. at 1946. The Montana tax was intended to deter people from possessing marihuana, and the tax itself was more than eight times the drug's market value. Id. The high tax rate and deterrent purpose were not dispositive, but lent support to the characterization of the tax as punitive. Id. at ----, 114 S.Ct. at 1947. It was upon other features that the Court based its determination that the tax was punitive, however.

First, the Court noted that the tax was conditioned upon the commission of a crime, and was exacted only after the taxpayer had been arrested for "the precise conduct that gives rise to the tax in the first place." Id. at ----, 114 S.Ct. at 1947. Next, the Court noted that although the tax purported to be a property tax, it was "levied on goods that the taxpayer neither owns nor possesses when the tax is imposed." Id. at ----, 114 S.Ct. at 1948. The Court concluded, "This tax, imposed on criminals and no others, departs so far from normal revenue laws as to become a form of punishment." Id. The Court then held that the tax was "the functional equivalent of a successive prosecution that placed the Kurths in jeopardy a second time 'for the same offence.' " Id.

II. The Texas Controlled Substance Tax

The Texas statute imposes a tax on the following taxable substances: "a controlled substance, a counterfeit substance, a simulated controlled substance, or marihuana, or a mixture of any materials that contains a controlled substance, counterfeit substance, simulated controlled substance, or marihuana." TEX.TAX CODE ANN § 159.001(7) (Vernon Supp.1996). A dealer 3 commits an offense if he or she possesses a taxable substance on which the tax imposed by the statute has not been paid. TEX.TAX CODE ANN. § 159.201 (Vernon 1992).

Appellant asserts that the Texas tax is, for all practical purposes, identical to the Montana statute, and is therefore punitive in nature. He asserts that the following factors establish the punitive nature of the tax: (1) the amount of the tax assessed is almost the same as the Montana tax; (2) under the statute, the taxing authorities cannot compromise the amount of tax due; and (3) the tax is assessed only on illegal activity. The Fourteenth Court of Appeals has addressed the arguments raised by appellant and has concluded that the statute is a punishment for double jeopardy purposes. Stennett v. State, 905 S.W.2d 612, 615 (Tex.App.--Houston [14th Dist.] 1995, pet. granted).

A. Amount of the tax

In Texas, the rate of tax is "$3.50 for each gram of a taxable substance consisting of or containing marihuana." TEX.TAX CODE ANN. § 159.101(b)(2) (Vernon 1992). Both appellant and the State agree that this amount equals a tax of about $98 an ounce. In Kurth Ranch, the state of Montana taxed the marihuana at $100 an ounce, an amount the Supreme Court construed to be a high tax rate. Kurth Ranch, 511 U.S. at ----, 114 S.Ct. at 1946. The Fourteenth Court found that the Texas tax constituted a high rate of taxation, noting that the rate of $98 per ounce is almost identical to the $100 per ounce rate of the Montana tax. Stennett, 905 S.W.2d at 613. While a high rate of tax is not dispositive, it is, as the Supreme Court noted, "consistent with a punitive character." Kurth Ranch, 511 U.S. at ----, 114 S.Ct. at 1946.

B. Compromising the amount of tax due

Appellant asserts that another aspect of the punitive nature of the Texas tax is "the lack of ability on the part of the taxing authorities to compromise the tax amount due, absent a prosecutorial request." Section 159.206 of the statute provides:

(a) The comptroller may settle or compromise a tax penalty, or interest imposed under this chapter only if:

(1) the prosecutor of a criminal offense under this chapter or of another offense arising out of the same incident or transaction requests in writing that the comptroller settle or compromise and specifies the reason for the request; and

(2) the comptroller determines that the settlement or compromise is in the best interest of the state.

TEX.TAX CODE ANN. § 159.206 (Vernon Supp.1996). Appellant asserts that the "ability to compromise a tax assessment is characteristic of taxes imposed for revenue raising purposes." Appellant also notes that the right of the comptroller to collect a tax...

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