Opinion
NO. 03-17-00597-CV
03-10-2021
Glenn Hegar, Comptroller of Public Accounts of the State of Texas; and Ken Paxton, Attorney General of Texas, Appellants v. Compass Directional Guidance, LLC, Appellee
FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY
NO. D-1-GN-15-003797 , THE HONORABLE JAN SOIFER, JUDGE PRESIDING MEMORANDUM OPINION
In this appeal from an order overruling the Comptroller's plea to the jurisdiction in a taxpayer suit, the Comptroller asks us to determine whether the district court has jurisdiction over Compass Directional Guidance, LLC's claim for declaratory relief regarding the constitutionality of the Comptroller's tax assessment. Because Compass no longer seeks the challenged declaratory relief, we dismiss the appeal as moot.
Compass filed the underlying taxpayer suit in response to the Comptroller's post-audit assessment of more than $2 million in sales taxes, penalties, and interest. In addition to protesting the assessment and seeking related injunctive relief under Chapter 112 of the Tax Code, see Tex. Tax Code §§ 112.051-.52., 112.101-.1011 (authorizing taxpayer protest and injunction actions), Compass asked the district court for declaratory relief, including a declaration that the assessment was unconstitutional. The Comptroller responded with a plea to the jurisdiction, principally arguing that the district court lacked subject-matter jurisdiction over Compass's suit because Compass failed to meet Chapter 112's prepayment prerequisites. See id. §§ 112.051, .101 (prepayment requirements for protest and injunction suits); In re Nestle USA, Inc., 387 S.W.3d 610, 616 (Tex. 2012) (orig. proceeding) (characterizing prepayment requirement as jurisdictional prerequisite to tax challenge). The Comptroller also argued that sovereign immunity barred Compass's constitutional claim for declaratory relief because Chapter 112, which is the exclusive means for challenging a tax assessment, does not waive sovereign immunity for declaratory relief. See Tex. Tax Code § 112.108 (prohibiting declaratory judgment); In re Nestle USA, Inc., 359 S.W.3d 207, 208-09 (Tex. 2012) (orig. proceeding) (noting that trial court generally lacks jurisdiction to hear taxpayer challenge to tax assessment, but that Texas Legislature has waived sovereign immunity for protest, injunction, and refund suits). The district court overruled the Comptroller's plea, and the Comptroller appealed.
Because issues in the cases overlapped, we abated this appeal pending the supreme court's resolution of EBS Solutions, Inc. v. Hegar, 601 S.W.3d 744 (Tex. 2020) (addressing constitutionality and scope of section 112.108), and asked the parties to file supplemental briefs, if needed, to address the effect of EBS on this appeal. On reinstatement, the Comptroller has withdrawn its arguments related to the district court's jurisdiction over Compass's Chapter 112 protest and injunction actions, and therefore we do not address those issues here. See Tex. R. App. P. 47.1 (requiring appellate courts to address every issue raised and necessary to final disposition of appeal); see also Roper v. CitiMortgage, Inc., No. 03-11-00887-CV, 2013 WL 6465637, at *20 (Tex. App.—Austin Nov. 27, 2013, pet. denied) (mem. op.) (noting that we are only required to consider arguments presented on appeal). Instead, the Comptroller challenges only the district court's jurisdiction over Compass's constitutional claim for declaratory relief. However, because Compass has withdrawn that claim for declaratory relief in light of the supreme court's decision in EBS, this Court's disposition of the appeal on the merits would not affect the parties' rights. Accordingly, the Comptroller's appeal is moot. See Zipp v. Wuemling, 218 S.W.3d 71, 73 (Tex. 2007) ("An appeal is moot when a court's action on the merits cannot affect the rights of the parties.").
We dismiss this appeal.
/s/_________
Darlene Byrne, Chief Justice Before Chief Justice Byrne, Justices Baker and Kelly Dismissed as Moot Filed: March 10, 2021