Opinion
2013 CA 1819
11-03-2014
MCLANE SOUTHERN, INC. v. CYNTHIA BRIDGES, SECRETARY OF THE DEPARTMENT OF REVENUE, STATE OF LOUISIANA
Robert S. Angelico George Denegre, Jr. Dena L. Olivier Liskow & Lewis, APLC New Orleans, LA Attorneys for Plaintiff-Appellee McLane Southern, Inc. Antonio Charles Ferachi Brandea P. Averett Florence Bonaccorso-Saenz Jason M. DeCuir Kimberly Doley Baton Rouge, LA Attorneys for Defendant-Appellant Cynthia Bridges, Secretary of the Department of Revenue, State of Louisiana William M. Backstrom, Jr. Kimberly L. Robinson Jones Walker, L.L.P. Baton Rouge, LA Attorneys for Amicus Curiae Louisiana Association of Wholesalers, Inc.
NOT DESIGNATED FOR PUBLICATION On Appeal from the 19th Judicial District Court Parish of East Baton Rouge, Louisiana
Docket No. 581,705, Division "D"
Honorable Janice Clark, Judge Presiding
Robert S. Angelico
George Denegre, Jr.
Dena L. Olivier
Liskow & Lewis, APLC
New Orleans, LA
Attorneys for
Plaintiff-Appellee
McLane Southern, Inc.
Antonio Charles Ferachi
Brandea P. Averett
Florence Bonaccorso-Saenz
Jason M. DeCuir
Kimberly Doley
Baton Rouge, LA
Attorneys for
Defendant-Appellant
Cynthia Bridges, Secretary of the
Department of Revenue,
State of Louisiana
William M. Backstrom, Jr.
Kimberly L. Robinson
Jones Walker, L.L.P.
Baton Rouge, LA
Attorneys for
Amicus Curiae
Louisiana Association of
Wholesalers, Inc.
BEFORE: PARRO, GUIDRY, AND DRAKE, JJ.
PARRO, J.
The Secretary of the Louisiana Department of Revenue (LDR) appeals a portion of a judgment in favor of McLane Southern, Inc. (McLane), which judgment granted McLane's motion for summary judgment and denied LDR's motion for summary judgment. Upon review of the record, we find the procedural posture of this case precludes this court from addressing LDR's specifications of error. Thus, we dismiss this appeal.
The suit filed by McLane named as the defendant the then-Secretary of LDR, Cynthia Bridges, in her official capacity. For convenience, we will generally refer to the defendant as LDR.
BACKGROUND
McLane is a Mississippi wholesale tobacco dealer that does business in Louisiana. On June 1, 2009, a new Mississippi law went into effect that decreased the discount on tobacco taxes that Mississippi wholesale tobacco dealers could obtain on cigarette tax stamps, lowering it from 6% to 4.65%. That new Mississippi law also affected McLane's Louisiana operations. LDR notified McLane that, beginning June 1, 2009, the Louisiana cigarette tax stamp discount it could receive would drop from 6% to 4.65%.
In response, on August 17, 2009, McLane notified LDR that it was paying $823,824 as part of its monthly purchase of cigarette tax stamps, of which $11,664 was being paid under protest. McLane explained in that notice that it was paying under protest in accordance with LSA-R.S. 47:1576, and that it planned to sue LDR's Secretary to recover the payment. McLane did bring suit on August 21, 2009, and that suit then led to the present appeal.
McLane designated the pleading as a "petition for refund of tobacco tax for cigarettes paid under protest," seeking recovery of the $11,664 that it paid under protest, as well as interest from the date of payment. McLane subsequently amended its petition. The suit, as amended, alleged that the Louisiana law that allowed out-of-state wholesale tobacco dealers a discount on their cigarette tax stamps, LSA-R.S. 47:843(B), was unconstitutional because it violated the Commerce Clause of the federal constitution and other provisions of the federal and state constitutions. Specifically, McLane alleged that LSA-R.S. 47:843(B) violated the Commerce Clause because it allowed Mississippi wholesale dealers operating in Louisiana only a 4.65% tax discount, while another portion of that statute, LSA-R.S. 47:843(C)(3), allowed Louisiana in-state dealers a 6% tax discount. McLane alleged that the $11,664 monthly payment it paid in protest in August 2009 represented the difference between a 6% discount and a 4.65% discount.
On September 15, 2009, McLane and LDR made an agreement that the courts' disposition of the issue of McLane's payment under protest of the cigarette tax stamps for August 2009 would likewise apply to McLane's subsequent monthly tax payments made under protest. Following discovery, the parties filed cross-motions for summary judgment, contending no genuine issues of material fact existed and the legal issue was whether it was constitutional for LSA-R.S. 47:843(B) to provide a smaller cigarette tax stamp discount for Mississippi wholesale dealers operating in Louisiana than the discount Louisiana law provided for Louisiana dealers.
The Louisiana Attorney General was served with the trial court pleadings in this case; however, he elected to defer to LDR the defense of the constitutionality of the statute at issue.
After hearings on the cross-motions, the trial court signed a judgment on August 12, 2013, that decreed the following: McLane's motion for summary judgment was granted; the provisions of LSA-R.S. 47:843(B) were unconstitutional because they violated the Commerce Clause of Article I, Section 8, of the United States Constitution; McLane was entitled to a refund from LDR for all the purchases of the cigarette tax stamps paid under protest since August 2009, plus interest; and LDR's cross-motion for summary judgment was denied.
Subsequently, LDR suspensively appealed a portion of that judgment to this court, asserting six assignments of error:
1. The district court erred as it had no statutory authority to award McLane (an out-of-state tobacco dealer) a 6% discount on its purchase of cigarette tax stamps upon finding that the discount provision of La. R.S. 47:843(B) for out-of-state tobacco dealers is unconstitutional.
2. The district court erred as it had no authority to award McLane (an out-of-state tobacco dealer) a 6% discount on its purchase of cigarette tax stamps as La. R.S. 47:843(C)(3) cannot be severed from the unconstitutional provision of La. R.S. 47:843(B) and is unenforceable.
3. The district court erred as it had no statutory authority under La. R.S. 47:843(B) to award McLane (an out-of-state tobacco dealer) a 6% discount on its purchase of cigarette tax stamps when La. R.S. 47:843(B) clearly and unambiguously does not provide for such.
4. The district court erred by ignoring the Legislature's clear intention not to provide a discount to out-of-state tobacco dealers pursuant to La. R.S. 47:843(B) in the same manner as it did to in-state tobacco dealers pursuant to La. R.S. 47:843(C)(3).
5. The district court erred by usurping the Louisiana Legislature by re-writing La. R.S. 47:843(B) to allow a 6% discount to out-of-state tobacco dealers when La. R.S. 47:843(B), a tax exemption, does not expressly or clearly confer such a discount.
6. The district court erred by allowing the continuance of a discount scheme on the purchase of cigarette tax stamps that is no longer valid and enforceable for both out-of-state and in-state tobacco dealers.
APPLICABLE LAW
Jurisdiction
In Boudreaux v. State, Dep't of Transp. & Dev., 01-1329 (La. 2/26/02), 815 So. 2d 7, 12-13, the supreme court explained the nature of jurisdiction:
Jurisdiction is the legal power and authority of a court to hear and determine an action or proceeding involving the legal relations of the parties, and to grant the relief to which they are entitled. Jurisdiction over the subject matter is the legal power and authority of a court to hear and determine a particular class of actions or proceedings, based upon the object of the demand, the amount in dispute, or the value of the right asserted. The jurisdiction of a court over the subject matter of an action or proceeding cannot be conferred by consent of the parties or waived; a judgment rendered by a court which has no jurisdiction over the subject matter of the action or proceeding is void. The issue of subject matter jurisdiction addresses the court's authority to adjudicate the cause before it; the issue may be considered at any time, even by the court on its own motion, at any stage of an action. Moreover, it is the duty of a court to examine subject matter jurisdiction sua sponte, even when the issue is not raised by the litigants, (citations omitted).
The Louisiana Constitution, in Article V, Section 10(A), sets forth the jurisdiction of the courts of appeal, in pertinent part, as follows: "[e]xcept as otherwise provided by this constitution, a court of appeal has appellate jurisdiction of . . . all civil matters . . . ." Louisiana Code of Civil Procedure article 2083(A) authorizes appeals of final judgments in civil matters.
Tobacco Tax on Cigarettes
Louisiana's Revised Statutes provide for the taxation of tobacco in Title 47, Subtitle II, Chapter 8. Part of the tobacco tax system created by those statutes provides for cigarette tax stamps "to enforce the collection of" tobacco taxes on cigarettes. LSA-R.S. 47:843(A)(1). In addition, tobacco wholesalers may earn a discount on those cigarette tax stamps by the timely payment of taxes and the timely filing of reports. See LSA-R.S. 47:843(C)(6). The discount for an in-state wholesaler is 6%. LSA-R.S. 47:843(C)(3). For an out-of-state wholesaler, the discount cannot be greater than the discount it receives in its home state, and the discount cannot exceed 6%. LSA-R.S. 47:843(B). It is this latter statute, LSA-R.S. 47:843(B), that is at the center of the case before us. The parties agree that, as of June 1, 2009, Mississippi decreased its discount to home state wholesalers from 6% to 4.65%. They likewise agree that, starting in June 2009, the change in Mississippi law caused Louisiana's discount to Mississippi wholesalers operating here to drop from 6% to 4.65% under Louisiana law.
ANALYSIS
Jurisdiction
Although the parties do not contest this court's subject matter jurisdiction, in this appeal we will examine jurisdiction on our own motion. See Boudreaux, 815 So.2d at 13. The trial court's judgment signed August 12, 2013, decided all the claims presented in McLane's petition, and states that it is a final, appealable judgment under LSA-C.C.P. art. 1841. Code of Civil Procedure article 2083(A) authorizes appeals of final judgments in civil matters. As the subject of this appeal is from a final judgment in a civil matter, it is appealable. Importantly, this appeal only asks for a review of part of the final judgment. The party bringing the appeal, LDR, states in its brief that it has excluded from its appeal that part of the trial court judgment that decreed LSA-R.S. 47:843(B) unconstitutional because it violates the federal constitution's Commerce Clause. Instead, LDR's brief notes that "[t]he Department's issues on appeal involve statutory interpretation." Thus, while Louisiana Constitution article V, section 5(D), provides that a case shall be appealable to the supreme court from the trial court, if a law has been declared unconstitutional, this appeal does not do so. Further, Louisiana Constitution article V, section 10(A), states that "[e]xcept as otherwise provided by this constitution, a court of appeal has appellate jurisdiction of . . . all civil matters . . . ." As this appeal does not include consideration of a law that has been declared to be unconstitutional, and presents no other issue that the Louisiana constitution excludes from this court's review, we find that it does fall within this court's direct appellate jurisdiction.
Assignments of Error
While LDR's brief sets forth six assignments of error, those six assignments are all variations on the same theme. Distilled, they have one contention at their core: after the trial court judgment decreed the provisions of LSA-R.S. 47:843(B) to be unconstitutional, no statutory authority exists for the portion of the judgment directing that LDR reimburse McLane for the taxes it paid under protest. However, McLane's brief to this court asserts that LDR failed to raise this contention at the trial court, instead pitching its entire case on the argument that LSA-R.S. 47:843(B) met constitutional muster. Our own review of the record fails to find that LDR raised the statutory arguments in the trial court that it now raises here, and LDR has not pointed us to any part of the record reflecting that it did raise that argument in the court below.
Our jurisprudence generally precludes this court from considering a contention raised for the first time on appeal. Johnson v. Montoya, 13-1951 (La. App. 1st Cir. 5/2/14), 145 So. 3d 418, 422; Hoover v. Hoover, 10-1245 (La. App. 1st Or. 3/17/11), 62 So.3d 765, 770. The supreme court follows an analogous practice. Council of City of New Orleans v. Washington, 09-1067 (La. 5/29/09), 9 So.3d 854, 856; Johnson v. State, 02-2382 (La. 5/20/03), 851 So.2d 918, 921; Seaura v. Frank, 93-1271, 93-1401 (La. 1/14/94), 630 So.2d 714, 725. Similarly, Rule 1-3 of the Uniform Rules of Louisiana Courts of Appeal articulates the same principle this way: "[t]he Courts of Appeal will review only issues which were submitted to the trial court and which are contained in specifications or assignments of error, unless the interest of justice clearly requires otherwise." We see nothing in the present appeal to trigger the rule's exception for situations in which "the interest of justice clearly requires otherwise."
LDR takes the position that because McLane's petition at the trial court prayed for reimbursement of its taxes paid under protest, and because the trial court granted that relief, then that action "places the entitlement to a refund issue for review before this Court." We find that argument unpersuasive. McLane's seeking redress for taxes paid under protest did not do away with the jurisprudential rule against a party's raising an issue for the first time on appeal.
At the trial court, in the memorandum supporting LDR's cross motion for summary judgment, the issue LDR raised was that McLane was not entitled to reimbursement because LSA-R.S. 47:843(B) did meet constitutional muster. LDR now argues for the first time on appeal a new defense: McLane is not entitled to reimbursement because of the absence of statutory authority for reimbursement. It is an issue that our review of the record finds was neither presented by LDR to the trial court, nor ruled upon by the trial court. Thus, LDR's assignments of error in its brief to this court seek to introduce a completely new issue to this case.
LDR contends that "[e]ven McLane's own authority recognizes that as long as an issue was raised and decided by the district court, review of such issue and all arguments related thereto are proper for consideration on appeal." This argument rests on an incorrect premise. LDR did not raise, and the district court did not consider, the issue LDR now raises in this court. LDR raised one defense in its cross motion for summary judgment at the trial court: LSA-R.S. 47:843(B) did meet constitutional muster. Having met with a lack of success at the trial court with that defense, LDR has now shifted to a new defense at this court: statutory authority does not exist to reimburse McLane's taxes paid under protest.
Simply put, LDR has chosen to switch to what it now sees as a better horse to ride in this court. On this point, McLane directs our attention to the supreme court's decision in Johnson v. State, 851 So.2d 918. Johnson teaches that such switching of horses does not advance the rider's position. There, the supreme court reviewed a slip and fall claim by a visitor to a state hospital, who was injured after tripping on a stairway. The visitor won a judgment against the State at the trial court, the court of appeal affirmed, and the supreme court granted the State's request that it review the case. In its ruling, the supreme court noted that the defense the State had urged in the trial court and court of appeal was that the stairs in question did not pose an unreasonable risk of harm. Johnson, 851 So.2d at 920-21. The decision also noted that, at the supreme court, the State had now abandoned its unreasonable risk of harm defense, and switched to a different defense: lack of notice of the condition of the stairway. Id. The supreme court dismissed the case, explaining that "[b]ecause we find the State failed to adequately preserve the issue of notice, this court cannot address the issue now raised by the defendant for the first time." Id. at 921.
In unusual circumstances, it may be appropriate for an issue not raised at the trial court to be raised for the first time on appeal. For example, in Seaura v. Frank, 630 So.2d at 725-26, the supreme court did allow argument of a new issue on appeal, but the case involved something not present here: a law amended after the trial court's decision. There, the supreme court noted that a pertinent law had been amended after the trial court's decision, that the retroactive application of the amended law was permissible, and that the applicability of that newly amended law could be argued for the first time on appeal. Id. However, that scenario is not present here.
Separately, LDR also directs our attention to Code of Civil Procedure article 2164, which authorizes an appellate court to "render any judgment which is just, legal, and proper upon the record on appeal." In the same vein, LDR also points to the case of Merrill v. Greyhound Lines. Inc., 10-2827 (La. 4/29/11), 60 So.3d 600. There, the supreme court noted that an appellate court does have the authority to consider an issue raised for the first time on appeal, and cited to Rule 1-3 of the Uniform Rules of Louisiana Courts of Appeal and to LSA-C.C.P. art. 2164. Merrill v. Greyhound Lines, Inc., 60 So.3d at 601-02. In Merrill, a workers' compensation claimant had her claim denied, then sought review of that decision from the court of appeal, and did so without the benefit of an attorney. As Merrill was a workers' compensation case, that meant the statutory playing field there favored the claimant. See, e.g., Pinkins v. Cardinal Wholesale SupdIy , Inc., 619 So.2d 52, 55 (La. 1993) (stating that the "workers' compensation act is remedial in nature" and that act is "liberally construed in favor of the injured employee"). As the present appeal is neither a workers' compensation case, nor one in which a party is appearing without the benefit of legal counsel, Merrill is readily distinguishable from the case before us. In sum, while we recognize that LSA-C.C.P. art. 2164 provides authority for this court to take up an issue raised here for the first time under special circumstances, we do not find such circumstances present here.
Accordingly, we do not consider LDR's assignments of error.
CONCLUSION
For the foregoing reasons, we dismiss this appeal that sought review of a portion of the judgment of the trial court that Cynthia Bridges, Secretary of the Louisiana Department of Revenue, appealed to this court, namely: McLane was entitled to a refund from LDR for all the purchases of the cigarette tax stamps paid under protest since August 2009, plus interest. Costs of this appeal, in the amount of $1,126.00, are assessed against the Secretary of the Louisiana Department of Revenue.
APPEAL DISMISSED.