Glasgow v. Dept. of Rev. , 21 Or. Tax 316 ( 2013 )

316 December 18, 2013 No. 40
IN THE OREGON TAX COURT
REGULAR DIVISION
Erma GLASGOW,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 5183)
Plaintiff (taxpayer) appealed a Magistrate Division decision that denied her
appeal regarding income tax. Defendant Department of Revenue (the depart-
ment) moved to dismiss the appeal on the ground that taxpayer had not stated a
legally cognizable claim in her complaint, and requested a penalty (in addition
to the penalty awarded to it in the Magistrate Division) on the ground that her
appeal was frivolous. Granting the department’s motion, the court ruled that
taxpayer had not identified an adequate statutory or constitutional basis for her
position and alleged facts as would be necessary to bring herself within the legal
doctrine she identified, therefore the appeal was dismissed and an additional
penalty awarded to the department.
Hearing on Defendant’s Motion to Dismiss was held
September 16, 2013, by telephone.
Erma Glasgow, Plaintiff (taxpayer) filed a response and
argued the cause pro se.
Nate Carter, Assistant Attorney General, Department of
Justice, Salem, filed the motion and argued the cause for
Defendant (the department).
Decision for Defendant rendered December 18, 2013.
HENRY C. BREITHAUPT, Judge.
This matter is before the court on the motion of
Defendant Department of Revenue (the department) to
dismiss the complaint of Plaintiff (taxpayer). Following
the filing of a response to the motion to dismiss, taxpayer
requested and was granted an opportunity to submit addi-
tional arguments as to why the motion to dismiss should
not be granted. The court has considered all arguments
made by taxpayer and the materials submitted by the
department.
Cite as 21 OTR 316 (2013) 317
After bringing a complaint in the Magistrate
Division regarding action of the department, taxpayer, in
addition to other arguments regarding the actions of the
department, argued to the magistrate handling the matter
that the Magistrate Division of this court did not have juris-
diction over the dispute but that the United States Supreme
Court had original jurisdiction over the matter. The mag-
istrate handling the matter rejected taxpayer’s arguments
and imposed a sanction under ORS 305.437 of $1,000.
In her complaint in this division, taxpayer asserted
that the decision of the Magistrate Division should be “dis-
missed entirely for acting in excess, or, lack of original juris-
diction when the state is a party, and or, motion for change
of venue be granted.” The department moved to dismiss
the complaint on the grounds that it “fails to state a legally
cognizable claim” in that the only claim of the taxpayer “is
based on a frivolous legal theory,” namely one regarding the
original jurisdiction of the United States Supreme Court.
In connection with the department’s objections to a motion
to stay the requirement that taxpayer pay the tax assessed
prior to proceeding in this division of the court, the taxpayer
submitted a writing in which she asserted:
“I am not challenging an assessment of income taxes in
the regular division of the tax court, I am challenging the
jurisdiction of the magistrates court to render a decision on
case in excess of its jurisdiction.”
Taxpayer also filed a Motion to Show Good Cause in which
she asked for an order requiring the department to show
good cause as to why the Magistrate Division had original
jurisdiction in her case. Taxpayer requested summary judg-
ment if no good cause was shown.
As mentioned above, taxpayer was afforded time to
submit an additional writing to present any other reasons
as to why her complaint should not be dismissed. In the
writing submitted, taxpayer did not seek to amend her com-
plaint. Taxpayer did not purport to expressly broaden her
challenge from the challenge she described as not relating
to an assessment of tax but rather only one relating to the
jurisdiction of the Magistrate Division.
318 Glasgow v. Dept. of Rev.
Nonetheless, in her supplemental writing taxpayer
appears to only have discussed reasons why she should pre-
vail on the merits of a challenge to the actions of the depart-
ment. Those arguments have logical and legal significance
only if the Oregon Tax Court has jurisdiction over the mat-
ter. However, taxpayer has not withdrawn her challenge to
the jurisdiction of the court.
This court, in both of its divisions, has jurisdiction
of the complaints brought by the taxpayer. The statutes
provide for subject matter jurisdiction and there is no ques-
tion that the court has personal jurisdiction over taxpayer.
Indeed, she invoked the jurisdiction of the court in filing her
complaint in the Magistrate Division.
Taxpayer argues, however, that because of the pro-
visions of Article III, section 2 of the Constitution of the
United States, the United States Supreme Court has orig-
inal and exclusive jurisdiction of taxpayer’s action because
the State of Oregon was made a party to the proceeding by
taxpayer.1
The decisions of the Supreme Court itself establish
that taxpayer’s argument is not the law. The second clause,
the one on which taxpayer relies, has been held to only refer
to the cases enumerated in the preceding text; not to any
case in which a state simply happens to be one of the parties.
California v. Southern Pac. Co., 157 US 229, 257, 15 S Ct
591, 39 L Ed 683 (1895); Louisiana v. Texas, 176 US 1, 16, 20
S Ct 251, 44 L Ed 347 (1900).
1
Article III, section 2, of the Constitution of the United States reads, in per-
tinent part:
“The judicial power shall extend to all cases, in law and equity, arising under
this Constitution, the laws of the United States, and treaties made, or which
shall be made, under their authority;—to all cases affecting ambassadors,
other public ministers and consuls;—to all cases of admiralty and maritime
jurisdiction;—to controversies to which the United States shall be a party;—
to controversies between two or more states;—between a state and citizens
of another state;—between citizens of different states;—between citizens of
the same state claiming lands under grants of different states, and between a
state, or the citizens thereof, and foreign states, citizens or subjects.
“In all cases affecting ambassadors, other public ministers and consuls, and
those in which a state shall be party, the Supreme Court shall have original
jurisdiction.”
Cite as 21 OTR 316 (2013) 319
On the merits of the validity of the actions of the
department, even if taxpayer were to be allowed to raise
such challenges when she has said she is not doing so, tax-
payer does no better. In fact, the challenges made have, as
demonstrated in the department’s additional reply, been
found to be frivolous in nature. They will therefore be disre-
garded by this court in making its decision on the motion to
dismiss.
On the motion to dismiss, and considering the com-
plaint filed by taxpayer, taxpayer has not identified an ade-
quate statutory or constitutional basis for her position and
alleged facts as may be necessary to bring herself within
the legal doctrine she identified. See Dept. of Rev. v. Clark,
17 OTR 218, 220 (2003). Her complaint must therefore be
dismissed.
Defendant has requested an award of penalties pur-
suant to ORS 305.437 in addition to the penalty awarded
in the Magistrate Division. The court awards a penalty
of $2000, in addition to the penalty of $1000 previously
awarded by the magistrate. Now, therefore,
IT IS ORDERED that Defendant’s Motion to
Dismiss is granted; and
IT IS FURTHER ORDERED that Plaintiff shall pay
a penalty of $2000 to Defendant pursuant to ORS 305.437,
in addition to the penalty of $1000 previously awarded by
the magistrate.