Istrouma Foods, LLC v. Iberville Parish Sales & Use Tax Department ( 2019 )

STATE OF LOUISIANA
COURT OF APPEAL
FIRST CIRCUIT
2019 CA 0867
ISTROUMA FOODS, LLC
VERSUS
IBERVILLE PARISH SALES & USE TAX DEPARTMENT
Judgment Rendered: DEC 2 7 ? n1
On Appeal from the 18th Judicial District Court
In and for the Parish of Iberville
State of Louisiana
Trial Court No. 78, 796
Honorable Alvin Batiste, Jr., Judge Presiding
Danielle L. Borel Attorney for Plaintiff/Appellee,
Baton Rouge, Louisiana Istrouma Foods, LLC
Phil Breaux Attorney for Defendant/ Appellant,
St. Gabriel, Louisiana Iberville Parish Sales & Use Tax
Department
BEFORE: HIGGINBOTHAM, PENZATO, AND LANIER, JJ.
PENZATO, J.
Defendant, Iberville Parish Sales & Use Tax Department, through David
Hall, Director (" Iberville"), appeals a judgment granting the petition for mandamus
filed by Istrouma Foods, LLC d/ b/ a Istrouma Biere' Republique (" Istrouma").
Istrouma has answered the appeal, seeking a reversal of the portion of the
judgment denying its request for declaratory judgment. For the following reasons,
we affirm in part, vacate in part, and remand to the trial court for further
proceedings.
FACTS AND PROCEDURAL HISTORY
The Farm at Bayou Paul is a multi -use development in Iberville Parish with
proposed residential and commercial uses. The development has received
preliminary approval by the Parish. There is currently a barn located on the
property that is leased by Istrouma. Istrouma plans to operate a brewery in the
barn and sell beer on the premises. In connection therewith, Istrouma sought and
obtained federal tax registration. Thereafter, on January 8, 2019, Istrouma
submitted Iberville Parish' s sales and use tax registration application to Iberville.
On January 10, 2019, Istrouma was notified that its application for the registration
of its business was rejected because Iberville Parish Ordinance 2- 5 prohibits, inter
alia, the sale or distribution of beer in residential areas of the Parish.' Istrouma
1 Iberville Parish Ordinance 2- 5 provides as follows:
See. 2- 5. - Sale or distribution in residential areas.
a) The sale or distribution of beer, wine, liquor, or any beverage of high or low
alcoholic content is strictly prohibited in residential areas of the Parish of
Iberville.
b) " Residential area" as used herein shall be defined as any area in Iberville Parish
where two (2) or more single- or multi -family dwellings exist within two hundred
200) feet of each other; but exclusive of commercial areas fronting on any state
highway within the Parish of Iberville. There is also excluded from this definition
a commercial grocery business which holds a parish occupational license as a
grocery store, supermarket or convenience store having at least three hundred fifty
350) square feet of usable space with adequate parking and stocking a minimum
of at least one hundred ( 100) grocery or food -related items.
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then filed a petition for mandamus and declaratory judgment. Istrouma asserted
that it met all requirements of the sales and use tax registration application and was
therefore entitled to a writ of mandamus ordering Iberville to issue the sales and
use tax registration. Istrouma further alleged that its proposed brewery is not in a
residential area and sought a declaratory judgment declaring that the proposed
brewery did not violate Iberville Parish Ordinance 2- 5, or in the alternative that the
ordinance was unenforceable.
The matter came for hearing on April 9, 2019, on Istrouma' s request for a
writ of mandamus.
The matter was taken under advisement, and on May 1, 2019,
the trial court signed a judgment granting Istrouma' s petition for mandamus and
ordering Iberville to approve and issue the sales and use tax registration submitted
by Istrouma. The judgment also denied Istrouma' s petition for declaratory
judgment. Iberville filed the pending appeal, contending that the trial court erred:
1) in holding that Iberville had no discretion with respect to issuing an
occupational license; ( 2) in ordering Iberville to grant a license to Istrouma to sell
beer in violation of a Parish ordinance; and ( 3) in granting a mandamus when
Istrouma failed to take a timely appeal of the license denial. Istrouma answered
the appeal, asserting that the judgment should be reversed only to the extent that it
denied Istrouma' s request for declaratory judgment, as the issue was not properly
before the trial court.
c) This section shall not be applicable to those permittees presently holding permits
on licensed premises for the sale and distribution of either low or high alcoholic
content beverages in residential areas defined herein, at the time of its adoption;
provided, however, this section shall be applicable to such permittees if the
premises occupied in the residential area is abandoned and/ or closed for thirty
30) days or if the owner or owners of said business fail to timely apply for a
parish permit for the sale and distribution of high and low alcoholic content
beverages.
d) Any person who violates this section shall, in addition to any civil remedies which
may be imposed, be fined not more than one hundred dollars ($ 100. 00) and/ or
imprisoned in the parish jail for not more than thirty (3 0) days, or both.
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LAW AND DISCUSSION
Mandamus is a writ compelling a public officer to perform a ministerial duty
required by law. La. C. C. P. arts. 3861 and 3863. Mandamus is an extraordinary
remedy, which must be used sparingly by the court, and only to compel action that
is clearly provided for by law. Poole v. Louisiana Board of Electrolysis
Examiners, 2006- 0810 ( La. App. 1 Cir. 5/ 16/ 07), 964 So. 2d 960, 963. Mandamus
lies only to compel the performance of purely ministerial duties. City ofHammond
v. Parish of Tangipahoa, 2007- 0574 ( La. App. 1 Cir. 3/ 26/ 08), 985 So. 2d 171,
181. Our jurisprudence is clear that such a writ may not issue to compel
performance of an act which contains any element of discretion, however slight.
Id. Although the granting of a writ of mandamus, as a general rule, is considered
improper when the act sought to be commanded contains any element of
discretion, it has been allowed in certain cases to correct an arbitrary and
capricious abuse of discretion by public boards or officials, such as the arbitrary
refusal by an administrative body to grant a license. Poole, 964 So. 2d at 963.
Louisiana Revised Statutes 47: 341( A) authorizes any municipality or parish
to impose a license tax on any person conducting any business ( defined by La. R.S.
47: 342( 1) as "
any business, trade, profession, occupation, vocation, or calling")
within the territorial jurisdiction of the municipality. Iberville Parish is granted
authority to impose a license tax by Iberville Parish Code of Ordinances, Chapter
14, Licenses and Miscellaneous Business Regulations. Section 14- 1 provides:
There is hereby levied an annual license tax upon all persons,
associations of persons, business or firms and corporations pursuing
any trade, profession, vocation or business pursued, conducted, or
carried on, or operated within the limits of the Parish of Iberville,
State of Louisiana, including persons engaged in or operating as
itinerant vendors or peddlers, which may be subject to such license tax
under the Constitution and laws of the State of Louisiana, now in
force, and to regulate the business of manufacturing, processing,
distributing, serving, selling or offering for sale, prepared foods,
beverages, liquors, milk or milk products for human consumption.
El
With regard to the application for a license, Section 14- 14 of the Iberville
Parish Code of Ordinances provides as follows:
Sec. 14- 14. - Application.
a)
Every person subject to a license tax levied by this article, shall
apply to the council for a license before the same becomes
delinquent, as provided in this article. The application shall
state all facts necessary to determine the amount of taxes due
under this article. All applicants doing business during the
previous year shall attach to his application a true copy of his
monthly reports for payment of state sales taxes to the state
revenue collector.
b) If the parish council is not satisfied with the facts set forth in
the application, or for any reason desires to audit the books and
records of the taxpayer, said council, or any of his authorized
employees, may audit and inspect all records of the taxpayer
that would have any bearing upon the amount of taxes due
under this article.
c)
Where an individual is an applicant for a license required by
this article, the application must be signed by him; where a
partnership or an association of persons, by a member of the
firm; and where a corporation, by the proper officer thereof.
d) Any intentional false statement as to any material facts in the
application for a license under this article shall constitute a
misdemeanor, and any person convicted therefor, shall be fined
not more than one hundred dollars ($ 100. 00), or imprisoned for
not more than thirty (3 0) days, or both.
The only restriction for the issuance of a food and beverage license contained in
Chapter 14 of the Iberville Parish Code of Ordinances is found in Section 14- 5,
which requires Iberville to demand of any firm engaged in manufacturing, serving,
selling or offering liquor for sale " a written permit to be issued by the Iberville
Parish Health Unit to do business as required by the Louisiana State Sanitary Code,
before issuing them a parish occupational license to do business in this parish;
provided, however, if this permit is not issued or denied by the said Iberville Parish
Health Unit within fifteen ( 15) days, the sales and use tax department shall issue
license without the said permit."'
2 The record does not reflect that Iberville enforced this requirement, and further, the denial of
Istrouma' s application was not based upon this provision.
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At the hearing in this matter, Eric Wiggins, chief financial officer of
Istrouma, testified that Istrouma applied to Iberville for a sales and use tax and
occupational license. Mr. Wiggins testified that Istrouma did not apply for an
Iberville Parish beer or liquor permit because it manufactures beer, which is
regulated by the state.
David Hall, the sales tax director for Iberville, testified that he personally
received Istrouma' s application. Mr. Hall acknowledged that Istrouma was not
applying for an alcoholic beverage permit but an occupational license. Mr. Hall
testified that the issuance of an occupational license is governed by La. R. S.
47: 341- 360 and Chapter 14 of the Iberville Parish Code of Ordinances. With
regard to the sales and use tax, Iberville considers the activity of the business to
determine if it is conducting taxable transactions or making retail sales to
determine whether the business needs to be registered for sales and use tax.
According to Mr. Hall, he was familiar with the area in which Istrouma seeks to
sell beer and knew that it was a residential area. Mr. Hall testified that Istrouma' s
application was denied because it is illegal to sell beer in a residential area in
Iberville Parish, and Iberville does not grant occupational licenses for illegal
activities.
In denying Istrouma' s application, Iberville relied upon Section 2- 5 of the
Iberville Parish Code of Ordinances, which is found in Chapter 2, entitled
Alcoholic Beverages." Chapter 2 of the Iberville Parish Code of Ordinances also
provides for the issuance of parish permits for the sale and distribution of high and
low alcoholic content beverages. The issuance of such permits is prohibited for
premises within certain proximity to churches, schools, libraries, and playgrounds.
See Section 2- 18 regarding permits for the sale of low alcoholic content beverages,
which provides that no license " shall be issued to any person, firm or corporation
when the business for which said license has been applied is located within three
0
hundred ( 300) feet of a school or church, the nearest point of the property line to
the nearest point of the respective premises to be licensed. The distance shall be
measured as a person walks using the sidewalk, street or path commonly used";
and Section 2- 40 regarding permits for the sale of high alcoholic content
beverages, which provides that no license " shall be issued to any person, firm or
corporation where the business for which said license has been applied is located
within five hundred ( 500) feet of any church, synagogue, library, school or
playground. The measurement of this distance shall be made from the nearest
point of the property line of the church, synagogue, library, playground or school
to the nearest point of the property line of the premises to be licensed."
Significantly, Section 2- 5 regarding the sale or distribution of beer, wine, liquor, or
any beverage of high or low alcoholic content in residential areas does not contain
a prohibition for the issuance of a license on this basis. Moreover, as stated by
Istrouma and acknowledged by Mr. Hall, Istrouma was not applying for an
alcoholic beverage permit pursuant to Chapter 2 of the Iberville Parish Code of
Ordinances. None of these restrictions or prohibitions are contained in Chapter 14
of the Iberville Parish Code of Ordinances, the Chapter governing the issuance of
occupational licenses.
In its reasons for judgment, the trial court noted that Title 47 of the
Louisiana Revised Statutes and Chapter 14 of the Iberville Parish Code of
Ordinances only require the collection of fees and taxes, and neither authorize
Iberville to deny an application for the issuance of a sales and use tax registration
or an occupational license. The trial court further found that Section 2- 5, as well as
the state statutes governing alcohol beverage permits cited by Iberville, are not
applicable to the issuance of the sales and use tax registration sought in this case.
For these reasons, the trial court found that Iberville had no valid legal reason to
deny Istrouma a sales and use tax registration.
it
In Bayou Landing, Ltd. v. City of Kenner, 335 So. 2d 531 ( La. App. 4 Cir.
1976), which was relied upon by the trial court in its reasons for judgment, the
plaintiff filed a mandamus proceeding to compel the city to issue an occupational
license for a retail bookstore. The plaintiff argued that the occupational license tax
ordinance was a revenue measure that did not provide for the exercise of discretion
in issuing the license. The defendant contended that it was not required to issue a
license to a person whose business violated state and municipal criminal laws and
that plaintiff' s business violated the state criminal obscenity law and the municipal
obscenity ordinance. In essence, the defendant contended that it could not be
compelled to license an unlawful business. Id. at 532. The Louisiana Fourth
Circuit found that the ordinance at issue was primarily a revenue measure, and
contained no provision whatsoever for the investigation, supervision, control or
regulation of the business, no requirement of a background investigation of the
application, no provision for a delay within which to conduct an investigation, and
most importantly, no provision for the denial of a license as a result of an
investigation. Id. at 533. The court further stated that "[ a] n official may decline
issuance of a permit only for a reason specifically authorized by law or by the
applicable statute." Id. With regard to the defendant' s contention that the business
would violate the municipal obscenity ordinance, the court stated:
T] hat ordinance itself presumably contains the standards for judging
violations and the penalties for punishing violations. Perhaps the
obscenity ordinance even authorizes revocation of the occupational
license as a penalty for violation. But there is no basis for
withholding the initial issuance of an occupational license because the
obscenity statute Might [ sic] be violated after the license is issued. If
a determination is made in the future that plaintiff' s business
operation, once commenced, violates the obscenity ordinance, the
proper punishment can be imposed by the proper authority in a proper
proceeding. Id.In Poole, 964 So. 2d at 966, this court recognized that when the powers to
grant a license are specifically set forth by statute, and an applicant meets all of the
n.
statutory requirements, the issuance of the license is a purely ministerial, non -
discretionary act, which may be enforced through mandamus.
Based upon our review of the relevant statutory provisions, we agree with
the trial court. Because the relevant provisions do not authorize Iberville to decline
issuance of a sales and use tax registration or an occupational license, and Istrouma
meets all of the statutory requirements as provided by the ordinances, the issuance
of the sales and use tax registration is a purely ministerial, non -discretionary act,
which was properly enforced through mandamus. See Bayou Landing, 335 So. 2d
at 533; Poole, 964 So. 2d at 966.
Thus, we find Iberville' s first and second assignments of error, contending
that it was vested with discretion to deny the sales and use tax registration
submitted by Istrouma based upon Section 2- 5 of the Iberville Parish Code of
Ordinances, to be without merit. In its third assignment of error, Iberville contends
that Istrouma' s appeal is governed by La. R.S. 26: 106, which provides that an
appeal must be filed within ten calendar days of the date of the judgment denying
an alcoholic beverage permit. However, this statute is inapplicable because, as
discussed above, Istrouma did not apply for an alcoholic beverage permit but an
occupational license. Accordingly, Iberville' s third assignment of error is without
merit.
ANSWER TO APPEAL
In its answer to appeal, Istrouma contends that it was procedurally improper
for the trial court to deny its request for declaratory judgment because the issue
was not properly before the trial court. Iberville does not contest this assertion.
A review of the record indicates that the only matter set before the trial court
for hearing was Istrouma' s petition for mandamus. The trial court denied
Istrouma' s declaratory judgment without sufficient notice beforehand to the parties
that this matter would be under consideration at the hearing for the writ of
W
mandamus.
See Zachary Mitigation Area, LLC v. Tangipahoa Par. Council, 2016-
1675 ( La. App. 1 Cir. 9/ 21/ 17), 231 So. 3d 687, 692. Thus, we find the trial court
erred in denying Istrouma' s petition for declaratory judgment, and this portion of
the May 1, 2019 judgment is vacated.
CONCLUSION
For the above and foregoing reasons, the trial court' s judgment granting the
petition for mandamus filed by Istrouma Foods, LLC d/ b/ a Istrouma Biere'
Republique, and ordering Iberville Parish Sales & Use Tax Department, through
David Hall, Director, to approve and issue the Sales and Use Tax Registration
submitted by Istrouma Foods, LLC d/ b/ a Istrouma Biere' Republique, is affirmed.
The trial court' s denial of the petition for declaratory judgment filed by Istrouma
Foods, LLC d/b/ a Istrouma Biere' Republique is vacated, and this matter is
remanded to the trial court for further proceedings. Costs of this appeal in the
amount of $ 1, 483. 81 are assessed against Iberville Parish Sales & Use Tax
Department, through David Hall, Director.
JUDGMENT AFFIRMED IN PART; VACATED IN PART, AND
REMANDED.
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