Carter v. Dept. of Transportation

No. 95-172
IN THE SUPREME COURT OF THE STATE OF MONTANA
1995
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark,
The Honorable Dorothy McCarter, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Michael B. Austin, Hardin, Montana
For Respondent:
Joseph P. Mazurek, Attorney General, Sarah Bond,
Assistant Attorney General, Helena, Montana; Nick A.
Rotering, Montana Department of Transportation,
Helena, Montana
Submitted on Briefs: July 28, 1995
Decided: November 13, 1995
Filed:
Justice William E. Hunt, Sr., delivered the Opinion of the Court.
Plaintiff and appellant, Candy Carter appeals a decision and
order from the First Judicial District Court, Lewis and Clark
County, granting the defendant, the Montana Department of
Transportation, summary judgment based on the appellant's lack of
standing.
We affirm.
The sole issue on appeal is whether the District Court
properly granted the Montana Department of Transportation summary
judgment.
FACTS
The appellant, Ms. Carter, is an enrolled member of the
Chippewa-Cree Tribe of the Rocky Boy reservation. She and her
partner own and operate the "Pastime," a retail gas and convenience
store located outside of Box Elder. Carter possesses a business
license issued by the Chippewa-Cree. She is not licensed by the
State of Montana as a gasoline distributor, nor is she an Indian
Trader licensed by the Bureau of Indian Affairs. Carter receives
her gas from the Montana Refining Company (MRC). MRC is a resident
motor fuel distributor out of Great Falls.
The record is unclear as to when Ms. Carter first contested
the motor fuel tax, but the State does have a letter of protest
from July 1991. At that time, Carter applied for a tax refund for
all gasoline sold at her gas station in the years 1988 through
1990. The request was denied by the Montana Department of
2
Transportation (MDT), so Carter then filed an appeal with the State
Tax Appeal Board. She did not complete this appeal procedure.
On October 6, 1992, appellant filed an action against the MDT
seeking declaratory and injunctive relief to have the court declare
the State was without jurisdiction to require either the
distributor or her to pay the motor fuel tax. Appellant also
requested a refund of the taxes paid between 1988 and 1992.
In her complaint, Carter alleged the State's motor fuel tax
was unconstitutional as applied to sales to Indian retailers
(Tribal members) inside the boundaries of the Rocky Boy reservation
because such sales are preempted by federal law. The District
Court granted defendant's motion for summary judgment.
DISCUSSION
Our standard of review on a grant of summary judgment is
identical to that of a trial court. Minnie v. City of Roundup
(1993), 257 Mont. 429, 431, 849 P.2d 212, 214. Summary judgment is
proper only when no genuine issue of material fact exists and the
moving party is entitled to judgment as a matter of law. Rule
56(c), M.R.Civ.P. Courts use summary judgment to encourage judicial
economy through the elimination of unnecessary trial, delay and
expense. Engebretson v. Putnam (1977), 174 Mont. 409, 571 P.2d 368.
The District Court granted summary judgment in favor of the
defendant for lack of the requisite standing to bring such a
challenge. Initially, we acknowledge that a taxpayer who is
directly and adversely affected by an assessment or levy of taxes
3
has the necessary standing to challenge such a tax. state ex 7x1.
Conrad v. Managhan (1971), 157 Mont. 335, 338, 485 P.2d 948, 950.
Outside these special circumstances, the standing requirement
for a party challenging the validity of statutes is firmly
established. We have held that standing is the "threshold of every
case, especially those where a statutory or constitutional
violation is claimed to have occurred. . . .'I Olson v. Department
of Revenue, 223 Mont. 464, 469, 726 P.2d 1162, 1166. The injury
alleged must be personal to the plaintiff, as distinguished from an
injury suffered by the community in general. Warth v. Seldin
(1975), 422 U.S. 490, 502, 95 S.Ct.2197, 45 L. Ed. 343.
In this case, Carter contends she was personally affected by
the tax because the tax affects her distributor, who then imposes
the tax on her, which she in turn imposes on her customers. The
District Court concluded Carter was not personally aggrieved by the
gasoline tax. The court found whether Carter was personally harmed
by the gasoline tax statutes depended on where the "legal
incidence" of the tax fell. The concept of legal incidence differs
from the question of where the economic burden falls. United
States v. Delaware (3rd Cir. 1992), 958 F.2d 555, 561.
Shortly before this case was submitted on briefs, the United
States Supreme Court decided a case discussing "legal incidence."
The Court considered the taxing authority of the State of Oklahoma
over the Chickasaw Nation, specifically whether the state could
impose a motor fuel excise tax upon fuel sold by Chickasaw Nation
retail stores on Tribal trust land. Oklahoma Tax Commission v.
4
Chickasaw Nation (1995), ~ U.S. , 115 S. Ct. 2214, 132
L. Ed. 2d 400. In that case the Court held, ' [tlhe initial and
frequently dispositive question in Indian tax cases . . . is who
bears the legal incidence of a tax." Chickasaw, 115 S.Ct at 2220.
As part of its analysis the Court looked at the language of
the Oklahoma statute. The relevant statute in that case did not
expressly identify who was to bear the legal incidence of the tax,
whether it was the distributor, the retailer, or consumers; nor did
the statute contain a "pass through" provision. A "pass through"
provision would require distributors and retailers to pass on the
cost of the tax to the consumer. Chickasaw, 115 S.Ct at 2221. The
Oklahoma statutes were found to have ensured that the distributer
was not burdened with the tax; distributors acted merely as
"transmittal agents I' for taxes imposed on the retailer. Chickasaw,
115 S. Ct. at 2222. The incidence of the tax rested with the
retailer. Accordingly, since the retailer was Tribal, the tax
infringed upon the right of Tribal self government. See, e.g. Bryan
v. Itasca County (1976), 426 U.S. 373, 96 S. Ct. 2102, 48 L. Ed. 2d
710.
Montana differs from Oklahoma in this respect. In Montana the
relevant statute concerning the gasoline tax reads as follows:
15-70-204. (Temporary) Gasoline license tax - rate. (1)
Every distributor shall pay to the department of
transportation a license tax for the privilege of
engaging in and carrying on business in this state in an
amount equal to:
. .
lb) for each gallon of all other gasoline
distributed by the distributor within the state. .
5
(i) 24 cents per gallon beginning July 1, 1993; and
(ii) 27 cents per gallon beginning July 1, 1994.
The statute clearly states the tax is to be paid by the
distributor. The distributor is defined in the statutes as:
(6) "Distributor" means:
(a) any person who engages in the business in
this state of producing, refining,
manufacturing, or compounding gasoline for
sale, use, or distribution;
(b) any person who imports gasoline for sale,
use, or distribution;
(c) any person who engages in the wholesale
distribution of gasoline in this state and
chooses to become licensed to assume the
Montana state gasoline tax liability;
Cd) any exporter as defined in subsection
(8) ;
(e) any dealer licensed as of January 1,
1969, except a dealer at an established
airport;
(f) any person in Montana who blends alcohol
with gasoline.
Therefore, anyone who distributes gas and licenses themselves as a
distributor is subject to the tax. In this case the retailer is
not burdened with the tax because Carter is not a distributor.
Since the dispositive language in Montana's statute clearly places
the burden on the distributor, the legal incidence of the tax does
not fall on Carter. Since Carter is unable to show she has been
personally affected by this tax, she lacks the necessary standing
to pursue this claim. Therefore summary judgment was appropriate.
We affirm the District Court's granting of summary judgment
based on the appellant's lack of standing.
Affirmed.
We Concur:
7
I
Justice James C. Nelson specially concurs.
I concur with the result of our decision but not in our
analysis. In determining whether Carter was personally injured by
the gasoline tax, we analyze where the legal incidence of the tax
falls. Although the United States Supreme Court noted in Chickasaw
that often the dispositive question in Indian tax cases is who
bears the legal incidence of the tax, the legal incidence analysis
goes to the merits of the taxation issue. Chickasaw did not
involve a standing issue, and thus, properly resolved the taxation
issue presented there on the basis of a legal incidence analysis.
In the instant case, we need not and should not reach the merits,
but need only affirm the District Court's grant of summary judgment
based on Carter's lack of standing. Therefore, we should limit our
analysis to standing and should not implicitly reach the merits of
Carter's claims by addressing the legal incidence of the tax.
The sole issue on review is whether the District Court
properly granted summary judgment to the Montana Department of
Transportation. The District Court granted summary judgment
because it found that Carter did not have standing to challenge the
validity of Montana's gasoline license tax as applied to Indian
retailers inside the boundaries of the Rocky Boy Reservation.
Standing is a justiciability doctrine designed to control
access to the judicial system by determining who is entitled to
have a case adjudicated. See Olson v. Department of Revenue
(1986), 223 Mont. 464, 469-70, 726 P.2d 1162, 1166. Originating in
Article VII, section 4 of the Montana Constitution, the standing
8
doctrine limits judicial power to "cases at law and equity." This
Court has interpreted "cases at law and equity" to embody the same
limitations as the Article III "case or controversy" provision in
the United States Constitution. Olson, 726 P.2d at 1166; Stewart
v. Bd. of Cty. Comm'rs of Big Horn Cty. (1977), 175 Mont. 197, 201,
573 P.2d 184, 186.
The fundamental aspect of standing is that it focuses on the
party seeking to get a complaint before a court and not on the
issues the party wishes to have adjudicated. Flast v. Cohen
(1968), 392 U.S. 83, 99, 88 S. Ct. 1942, 1952 , 20 L. Ed. 2d 947, 961.
Courts approach standing in two ways. The first approach focuses
on the constitutional provisions of standing and the second
approach focuses on the prudential restrictions that courts use to
preserve judicial credibility and to deny standing. Olson, 726
P.2d at 1166; Valley Forge Christian College v. Americans United
for Separation of Church and State (1982), 454 U.S. 464, 475, 102
S. Ct. 752, 760, 70 L. Ed. 2d 700, 711.
At a minimum, the constitutional provisions require that a
plaintiff be personally injured or be threatened with immediate
injury by the alleged constitutional or statutory violation.
m, 726 P.2d at 1166-67; Chovanak v. Matthews (1948), 120 Mont.
520, 526-27, 188 P.2d 582, 585. Thus, at the threshold of every
case, especially those where a statutory or constitutional
violation is alleged to have occurred, is the requirement that the
plaintiff allege "such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens
9
the presentation of issues." Northern Border Pipeline Co. v. State
(1989), 237 Mont. 117, 129, 772 P.2d 829, 836; Olson, 726 P.2d at
1166 (quoting Baker v. Carr (1962), 369 U.S. 186, 204, 82 S. Ct.
691, 703, 7 L. Ed. 2d 663, 678). This personal stake requirement is
dispositive. If a party seeking review is not among the injured,
that party is not entitled to judicial review. Olson, 726 P.2d at
1166-67 (citing Sierra Club v. Morton (1972), 405 U.S. 727, 734-35,
92 S. Ct. 1361, 1366, 31 L. Ed. 2d 636, 643); but see Grossman v.
State, Dept. of Natural Resources (1984), 209 Mont. 427, 438-39,
682 P.2d 1319, 1325 (holding that in special circumstances,
presenting issues of an urgent nature, this Court will accept
original jurisdiction and drape the taxpayer with standing).
For example, in Olson, the appellants challenged the
constitutional validity of certain statutes that require county
residence to obtain benefits such as obtaining a fishing or hunting
license or running for county office. The appellants were citizens
of Montana but did not live within any county boundaries. w,
726 P.2d at 1166. We held that the appellants did not allege that
the statutes injured them personally or threatened them with
immediate injury. Therefore, they did not meet the threshold
requirement of a personal stake in the outcome of the controversy.
Similarly, Carter challenges the constitutional validity of a
statute imposing a gasoline license tax. See 5 15-70-204, MCA.
That statute requires every distributor to pay a license tax for
the privilege of engaging in and carrying on business within
Montana. Importantly, the tax does not apply to a retailer. As a
10
retailer, Carter was not among the injured and thus cannot allege
a personal injury. Because she has not alleged the requisite
personal stake in the outcome of the controversy, she is not a
proper party before the court.
Where the legal incidence of the tax falls is immaterial for
purposes of resolving the standing issue in this case, and our
decision to affirm should not be grounded in analysis that is more
appropriately directed to the merits of the taxation issues raised
by Carter's complaint. Accordingly, I specially concur o ly in the
P
result of our opinion.
Justice Terry N. Trieweiler concurs in the foregoing special
concurrence.
Justice
11