Dan Nelson, Automotive, Inc. v. Viken

2005 SD 109 INC., NELSON, AUTOMOTIVE,

DAN Isuzu, Da Nelson Dan South

d/b/a Corporation Dakota

kota South CNAC, Corporation,

Acceptance d/b/a Corporation, Plain

a South Appellants,

tiffs VIKEN, capac

Gary individual R. his

ity capacity and in his official as Sec Revenue, Ap

retary Defendant

pellee.

No. 23363. Dakota.

Supreme Court South Briefs 2005. March

Considered

Decided Nov. Parsons, Jr., A.

Ronald A. Russell Jank- Johnson, Miner, Heidepriem, low of Mar- Janklow, LLP, Falls, low and Sioux South Dakota, Attorneys plaintiffs appel- lants. Hageman,

Donald W. South De- partment Regulation, of Revenue and Pierre, Dakota, Attorneys South for defen- appellee. dant and ZINTER, Justice. Dan Nelson Automotive Inc.

(Nelson) and Acceptance the South Dakota (CNAC) purchase price, an action for I.1 The brought computation Corporation tax, Secretary against the is defined as “total consideration declaratory relief Regula- money whether received in Department of Revenue otherwise.” 32-5B-4(l) added). official capacities. (emphasis in his individual and Nel- tion court to inter- requested the circuit son contends when vehicles are re- Nelson resold, impose repossessed statutes that an excise turned or and then pret certain required pay of automobiles and to de- should not be all of tax on the sale under parties’ respective rights purchase price clare the excise tax on the initial The circuit court dis- because Nelson never received the full those statutes. procedural grounds. price from purchase missed the action on the first installment (1) buyer.2 ultimately The circuit court concluded that Nelson Nelson seeks declara- tory ruling may not exhausted all of its administrative that the excise tax not be had (2) remedies; lawfully imposed portion the State had not been on that of the (3) joined indispensable party; price actually an and initial that Nelson does not as joined, defaulting buyer.3 if had been it could receive from the initial even the State declaratory relief. We not be sued for brought Nelson this action under [¶ 4.] reverse and remand. 21-24, SDCL Ch. South Dakota’s version History Facts and Procedural Declaratory Judgment of the Uniform Act. did not seek a refund of taxes Nelson (collectively Nelson and CNAC Rather, previously paid. only Nelson Nelson) to as are South referred sought prospective declaratory relief “con- vehicles, Nelson sells motor corporations. cerning the construction of tax [these] fi- on installment contracts. CNAC some parties’] corresponding and [the statutes installment sales. The nances Nelson’s obligations pursuant rights and impose three-percent statutes at issue Ch. 32-5B.” tax on these vehicle sales. This excise involves the tax on motor vehicles

dispute The circuit court dismissed repossessed that are or returned before procedural grounds action on without con- buyer paid has the initial installment ruling That struing the statutes. raises of the vehicle. price full contract following appeal: issues on (1) administrative remedies imposed tax is on the Whether The excise before pur- must have been exhausted price” of motor vehicles “purchase court could entertain this for use on the streets the circuit acquired chased or un- interpret a tax statute 32-5B- highways and this State. SDCL (2004) to determine 2. We have not been asked 32-5B-1 1.SDCL imposed this tax is whether the incidence of registra- other In addition to all license seller, buyer express we no upon the highways, tion fees for the use of opinion on that issue. person pay shall an excise tax at the rate of any percent purchase price three on the 3. Nelson contends if: vehicle, by § as defined 32-3-1 or motor portion on that taxes assessed [are] 32-5B-21, purchased acquired for use price contract purchase an installment [of] highways of this státe on the streets and actually vehicle retailer never that motor default, registered receives, to be under the whether due to return lieu subject laws of this state. This tax shall be in to double or the retailer by chapters price and 10- tax levied 10-45 triple taxation on the full contract vehicle, having only despite of such vehicles. Failure to ever sales the same actually fraction of the pay a Class “received” a small the full amount of excise price for each sale. contract 1 misdemeanor. dispute, primary Declaratory Judg- the initial the doctrine the Uniform der Act; jurisdiction “determines whether the court ment agency make the initial de- or the should (2) joined as an the State Whether omitted). (citation termination.” party; and indispensable Thus, the first doctrine considers when a (3) the Uniform Whether may appropriately an admin- review immuni- sovereign Act or Judgment made, istrative decision that has been ty precluded entity, while the second considers which against the State. court, agency or a should administrative dispute. hear the initial Decision case, In this there was no [¶ 8.] This Court “reviews the review, administrative decision to and both or denial of a motion to grant trial court’s Department and the circuit court had by determining plead whether the dismiss jurisdiction interpret to the excise tax stat judgment as a matter of er was entitled to Therefore, ques utes. this case involves a Black, v. 520 N.W.2d Springer law.” jurisdiction. question primary tion of The (S.D.1994). Billings also See Estate of jurisdiction had this case is who to hear Congregation Jehovah v. Deadwood Department first. Must the have inter 138,140 (S.D.1993);

Witnesses, 506 N.W.2d preted the excise tax statutes and deter (S.D. P.A.M., 505 N.W.2d In re rights parties mined the of the before the 1993). Questions of law are reviewed de circuit court was authorized to do so? We Kauker, 479 N.W.2d novo. Rusch that no conclude the answer is because the (S.D.1991) (citing Depart Permann v. Department juris did not have exclusive Div., Labor, Unemployment Ins. ment of (S.D.1987)). statutes, interpret 113,117 diction ab 411 N.W.2d refund, request

sent a for a tax the admin istrative remedies were not mandated. Exhaustion Administrative Remedies begin analysis [¶ 9.] We exhaustion doc Two well-established [¶ 7.] by noting that South Dakota’s implicated when the issue of trines are Judgment “permits Act courts to [circuit is raised. The administrative exhaustion' legal make declaration of rights a] or rela primarily concerned with first “doctrine injury tions before an actual Boe occurs.” judicial timing of the review of admin Accountancy, ver v. South Dakota Bd. of Egert, action.” Mordhorst v. istrative (S.D.1995). And, as it (1974) S.D. N.W.2d jurisdic question primary relates to the added). Because administrative (emphasis tion, specifically provides SDCL 15-6-57 occurred, simply action has this doctrine adequate that existence of another “[t]he may courts determines when review remedy preclude agency’s decision. Howev administrative ap relief cases where it is er, distinguished must “be this doctrine propriate.” as we stated primary jurisdiction.” from the doctrine dispute, request earlier tax for declar “[a] jurisdiction questions Primary arise atory interpret taxation [to statutes] agency when both an administrative allowed even when another ade authority to hear an initial dis have 531-32, quate remedy Agar exists.” School Dist. pute. Id. at 223 N.W.2d at 504. (S.D.1995) McGee, authority When both entities have to hear 7).4 adequate court even when “another reme- (Agar exists, dy” 1-26-30 SDCL does vest however, con- Department, The [¶ 10.] jurisdiction Department primary with provisions specific two tends interpret these statutes. require Act ad- Procedures Administrative allowing declar- before ministrative review Department argues The Depart- The in circuit court. atory relief jurisdiction primary has under the first sentence of first relies on ment provision second the Administrative 1-26-30, appeal an administrative Procedures Act that authorizes administra- “A person That statute statute. agencies declaratory rulings. tive to issue all administrative rem- has exhausted who provides part: SDCL 1-26-15 relevant any agency within edies available by a final decision aggrieved party who is agency provide by Each shall rule judicial in a case is entitled contested filing prompt disposition peti- SDCL 1-26- chapter.” under this review declaratory rulings tions for as to the any statutory applicability provision agree, that had administra- We agen- or of or order of the rule by Department, action been taken tive cy.... Rulings disposing petitions required would have 1-26-30 SDCL agency have the same status as deci- in circuit court be- appeal administrative or orders in contested cases.... sions pursued. action could be fore a statute, Department Pursuant to this presupposes this statute authorizing declaratory adopted has rules already has oc- some administrative action Therefore, of tax rulings applicability on the statutes. curred or been exhausted. only the exhaustion doc- statute addresses provides: ARSD 64:01:01:08 judicial timing of re- involving trine may apply An for a declarato- individual action, which is not of administrative view ry ruling by filing petition directed here is one of here. The issue issue secretary generally the which states jurisdiction; ie. whether primary existing factual under which situation jurisdiction to agency or the had must question petition arises. The And, with re- oñginal consider redress. except that by petitioner, be verified issue, specifi- spect to that SDCL 1-26-30 personal knowl- matters not within jurisdiction by cally primary disclaims on infor- edge petitioner fur- agency. That statute administrative petition The shall mation or belief. does not limit ther “This section or claim identify persons all who have scope judicial of or review utilization any which would be affected interest review, re- under other means of available declaratory ruling. When declarato- relief, dress, by law.” provided when have ry sought persons relief is all who 21-24 and 15-6-57 Id. Because SDCL Ch. which would be or claim interest and re- authorize other means of review shall be in circuit affected the declaration through declaratory relief dress I, levy Sully property tax to the Agar its the needed Agar School District closed school, Legisla- high and the South Dakota taxpayers, the County Id. Several Auditor. required school ture enacted a statute that District, Agar and the Board of Edu- School high reorganize without a school to districts tax the additional cation filed suit to declare adjust district or its taxation. 527 its school declaratory action was void. Id. at 284. The Agar subsequently at 283. decided to N.W.2d permitted. Id. at 289. budget re-open high with its school sent vides that the existence of other remedies parties.5 made preclude declaratory does not cir- Thus, correctly points out Department cuit court.”6 because the De- ruling is avail- process that its partment’s declaratory process is not ex- declaratory relief. able to obtain clusive, mandated, required, the mere Department fur Although the existence of this alternative administrative alter argues that this administrative remedy ther preclude similar relief first, utilized we have should be native circuit court. mandated or party that if “a is not stated court, however, The circuit administratively and a proceed statutory concluded that a alternative rem- judicial is avail separate avenue of review edy, tax procedure refund found able,” of administrative remedies is the use 10-59, SDCL Ch. was mandated and exclu- v. Lemmon Fed. required. Jansen sive, thereby precluding declaratory relief ¶ Union, 10, 562 1997 SD Credit in circuit court. Both the circuit court and (citations omitted) (em 122, 124 Department upon relied 10-59- added). This rule is accord with

phasis 10-59-20,8 177 and specifically pro- which recognize prohibi other courts that “the judicial taxpayer’s request hibit review of a declaratory relief to against awarding tion taxpayer for a tax until the follows refund statutory have alternative parties who statutory procedures. certain Although only applicable administrative remedies is recognized the circuit court that Nelson alternative means of redress where the refund, prerequisite did not seek the Maryland- to be exclusive.” was intended granting the court concluded that declara- Capital Planning Nat’l Park Comm’n v. tory practical relief “would have the effect Arena, Md. Washington Nat’l establishing of (1978) (citations omitted). rejecting right or a to [a] 1216, 1223 A.2d refund.” the circuit court con- However, in this case there is [¶ 14.] bypass cluded that Nelson could not nothing suggest Department’s that the statutory remedy. declaratory process was intended to be the exclusive, mandated, disagree means of We with the circuit Furthermore, “pro- “practical analysis. 15-6-57 court’s effect” relief. Nelson provides: provides: 5. ARSD 64:01:01:09 further 7. SDCL 10-59-17 hearing petition declaratory A on a rul- tax, taxpayer seeking recovery penalty, A ing may upon days be held ten written imposed by chapters or interest out set hearing parties. The must be notice to all § procedure in 10-59-1 shall follow the es- public; testimony must be recorded chapter. tablished in this No court has magnetic tape by equivalent other taxes, jurisdiction aof suit to recover such request any person, At the testi- means. mony given penalty, taxpayer hearing or interest unless the at such a must be tran- transcription expense The must be seeking recovery complies scribed. of tax with requesting person a tran- borne each provisions chapter. of this script. may provi- Parties make their own reporters present court at the sions to have 8. SDCL 10-59-20 hearing. may Briefs be filed interested may delay No court restrain or the collec- parties secretary may direct. as the tax, payment penalty, tion and of a or inter- (explaining 6. But note 9 that when cf. infra provided chapter. taxpayer est for in this A doctrine, involving the the first exhaustion pay shall taxes when due and seek timing judicial an administrative review of recovery provided chapter. as in this issue, appeal action is at an administrative relief). judicial statute limits the utilization charge in of the tax as the officer is install request a refund did not at all any type position payment to enforce its nor did it seek ment sale Rather, Nelson pending. relief. times while the action is While contemporaneous interpretation only sought prospective restraining a it true that no order would action, these cir tax statutes. Under during pendency the excise of the lie cumstances, relating to declaratory relief legislature follow that the in- long permitted. has been taxation matters remedy tended this to be the exclusive Baker, 76 S.D. See Arneson taxpayer which a has- and that the de- (1956) declaratory (allowing N.W.2d claratory judgment ap- statute is not to how much tax was to determine judgment ply- they were not by taxpayers because owed (quoting Id. at 77 N.W.2d at 327 previously paid). seeking a refund taxes Roach, 61, 65-66, Berlowitz v. 252 Wis. actions are explained that such

This Court (1947)). Therefore, 256, 258 be- N.W.2d tax is collection of the permitted because payment remedy tax and refund cause the by the mainte “delayed or hindered 10-59 mandated or SDCL Ch. is not Id. at action. nance of’ sought, this exclusive when no refund is N.W.2d remedy the cir- statutory does not divest fact, was, paid tax here involved The jurisdiction to inter- primary cuit court of ap- plaintiffs, with the by the rights of pret the statute and declare the disposition provision for ultimate proved parties. according to the disputed portion of the trial court. Collection suggests The Department way delayed in no of the tax was contrary conclusion that we should reach of this ac- by the maintenance hindered Agar School under our later decision tion, only seeks a declaration.... ¶15, which McGee, 1997 SD Dist. II). II, (Agar Agar ultimately concluded This Court Id. taxpayers could not this Court held and refund analogous payment declaratory relief. seek taxpayer’s exclusive was not scheme as it therefore, clearly distinguishable II Agar remedy, and refund; i.e. “a request for a tax in circuit court: involved was available recovery of taxes for the taxpayer [action] refund protest If alternative tax and [the (cita ¶ 14, at 322 561 N.W.2d paid.” Id. remedy, is the exclusive scheme] omitted). circuit court Because “[t]he tion thirteen and four- means that between adjusted levy illegal tax was held the pay must taxpayers teen thousand tax,” collected id. a refund of the ordered deter- separate actions to bring tax and ¶ tax refund those 561 N.W.2d within the officer acted mine whether taxpayer re the “exclusive statutes were of the enforcing payment law in ¶ 17, Id. 561 N.W.2d covery remedies.”9 declaratory judgment Seeking a tax. payment at 323. delay not the collection or does ¶ did, however, prior at 323. "Our recognize excep- SD Agar II taxpayer has taken 'stand for the holdings when administrative action on actions tion question remedy by the exhaustion involves place a proposition that where there is Agar timing judicial followed, review. II noted remedy rather appeal, that must be " ac- been administrative that when there has equity law.’ in or at common than actions refund, a request for tion and there is no Thus, omitted). (citation remedy when a Id. (from ac- "appeal the administrative statutes" following administra- by appeal available II, tion) remedy. Agar are an exclusive (reaffirming “declaratory case the tax refund stat- actions to this remedy taxpayer illegality per

utes are not the exclusive of a tax are determine seeking is not a tax re- because Nelson missible” and the tax refund statutes do Thus, Agar II does not control. fund. declaratory not preclude “seeking judg a I, Rather, governed by Agar tax”). this case ment on legality right, since at least which reaffirmed The circuit court and the De- declaratory judgment to use a action partment finally relied on the “restriction applicability of taxes: determine availability declaratory on the of a judg- rejects the trial court’s rea This Court applica- ment action with reference to its dismissing the action for declar sons for bility to administrative matters” that was atory request declaratory A relief. for recognized Rocky Mountain Oil & Gas even when may be allowed anoth Wyoming, Ass’n v. 645 P.2d adequate remedy gener er exists. As a 1982). (Wyo Rocky Mountain observed matter, al the Uniform that some executive branch administrative Judgments Act “No action or subject judi- generally activities are not proceeding open objection shall be cial review in the first instance: ground declaratory judgment that a Where the action in a pre- would result prayed or decree is for.” SDCL 21-24- judging of issues that should be decided specifically, 1. More SDCL 15-6-57 by in the first instance administrative pertinent part: “The states existence because, body, it should not lie. This is adequate remedy of another otherwise, if it all decisions preclude declaratory re agencies bypassed, several could be appropriate.” lief in cases where it is the district court administering would be Further, Baker, in Arneson v. 76 S.D. the activities of the executive branch of (1956), 77 N.W.2d 325 this Court government.... Accordingly, where payment protest ruled that under the relief desired is the nature of a remedy provided statute is not an judicial substitution of for that decision remedy, exclusive and that agency pertaining on issues to the appropriate alleging relief is in cases subject administration of the matter for illegality a tax. Under the rationale created, agency which the the action Ameson, an action for should not be entertained. tax relief is consistent with refund [the (internal omitted). citations agree We request statutes] because declara that courts initially should involved tory relief does not hinder collection type of decision making concerning Ameson, 77 efforts. See N.W.2d at 327. Furthermore, administration executive functions programs. Rocky Mountain meaningful pay action is a alternative to noted that statutes, inapplicable the restriction is in protest ment under because it determining constitutionality actions the permits joinder many “the in interest interpretation otherwise, upon of statutes which ad- plaintiffs might who however much ministrative action will be taken: aggrieved, individually be unable questions.” to secure review of such If, however, such desired relief concerns I, Agar validity the and agency 527 N.W.2d 287. See also Boe construction of ver, 747; Sys., regulations, 526 Dakota Inc. v. or if it N.W.2d concerns the consti- ¶ Viken, 27, 10, 23, 694 tutionality interpretation 2005 SD N.W.2d of a statute action, declaratory judg- tive an action for ment is not available. is, suit” is lawsuit that

upon nominally “[a] which the administrative action be, based, against the action be one or individual state or is should more em no more ployees This is than that but ... the real party entertained. has as in the obviously plainly provided government.” and interest state or local (8th 2004). language Declaratory the Uniform Law Dictionary Black’s ed Judgments Thus, Act. it against is well-settled that suits “in officers state their official capaci Thus, Id. at even under 1168-69. ty, reality against [are] [suits] State Department Rocky analysis, the Mountain Pennington County itself.” v. State rel. ex jurisdiction not because primary did have ¶31, 13, Sys., Judicial 2002 SD interpretation of a this involved Unified 127, statute, 131. See Parks v. clearly matter authorized 27, 823; Cooper, Act. SD 676 N.W.2d Reis Declaratory Judgment Miller, SD.75, 78; with [¶20.] accordance Johnson, (S.D. Dorian v. 297 N.W.2d 175 Jansen, Ameson, I, Agar Sys., 1980); Michigan Dep’t Will v. State 15-6-57, SDCL we conclude the doc- Police, 2304, 109 S.Ct. U.S. did primary jurisdiction pre- trine not (1989); 105 L.Ed.2d Coastal prospective interpre- clude this action for a Utils., Plains Inc. v. New Hanover Coun tation of tax statutes. the excise ty, N.C.App. 601 S.E.2d Indispensable Party an Was (2004); State, n. 1 217 Tenn. Cox v. Had Not Been Joined That (1965). 399 S.W.2d Because the [¶ The circuit also dis 21.] party State was real in interest in this it missed because concluded the State suit, joined was capacity official the State party an that had not indispensable was party. as a joined. Although been this suit was filed Secretary in his against capaci official May be

ty, apparently the court concluded that the State Sued for party. was to make the State a Declaratory insufficient Relief analyzing question, circuit court concluded that [¶ 24.] The agree was we that the State to be joined, if the even State could be could joined as indispensable party. SDCL sued not be because provides 21-24-7 that “[w]hen (a) “person” not a within the State was sought persons relief is all shall made meaning Declaratory Judgment Act or claim parties who have interest (b) immune from State was suit. declaration, by the which would be effected disagree conclusions. We with both prejudice no declaration shall (a) Is the Person State a Within rights parties persons pro Meaning ceeding.” clearly Because the State had Judgment Act prejudicially af an interest that would decision, fected an adverse the State provides 21-24-3 an indispensable party. ... part: “Any person relevant whose status, legal are rights, or other relations against the suit statute, by ... have affected a deter Secretary in Department his official any question joined mined of construction va as a capacity party the State defen statute, ... lidity arising ... joined as under party dant. The status, because, definition, rights, and obtain declaration of “official-capacity 248 (em- legal persons meaning relations thereunder.” within the of

or other the Uniform added). Declaratory Judgment Act.11 These deci- phasis “person” The word is de- rely sions often that provi- the rule “municipal,. public include a fined to Act, sions of including the definition of any of character whatso- corporation other “person,” the word are to be construed and 21-24-2. ever.” SDCL 21-24-14; liberally. administered determining whether this State ex rel. Smrha v. General Am. Life State, initially definition includes the we Co., 520, 555, Ins. 132 Neb. 272 557- N.W. note that the State is considered to be a (1937) (stating 58 that because the act is to “person” “public corporation” many or a be liberally, construed “the state is em- provisions of Dakota law.10 It South is braced expression ‘any per- under many jurisdic- significant ”). that other Herseth, Kneip son’ See also v. 87 S.D. 642, (1974) that specifically 647, 93, tions have concluded 214 (stating 96 governmental state and other entities are purpose “[t]o effectuate the of this remedi- 814, (1970) (governing public (stating 10. See SDCL con- Ch. 5-18 N.E.2d 817-18 that "the competitive tracts awarded on bids and defin- requires persons statute that all affected state”); ing public corporation to include “the joined. exception county No for the state or a (governing parental liability SDCL 25-5-15 is mentioned. While the state is not included stating public for willful acts and that a cor- 'person in the definition of ... neither is poration “State includes the of South Dako- county.’ Yet have courts held counties ame ta”); (governing foreign SDCL Ch. 37-28 compulsory joinder nable to defining public corporation trade zones and though actions ... and the state has state”); to include "this SDCL Ch. 43-41B compelled join any previous not been to (governing property defining unclaimed me, yet case known to reason dictates that person government”); as a “state other they compelled appropriate in an case to (governing gas SDCL Ch. 49-34A and electric satisfy statutory persons dictate that all regulation defining person utilities in- having present”); affected interests be Pike v. federal, "any clude state and local Ltd., 55, 60, Allen Int’l 287 Or. 597 P.2d 804 governments”). 3, 55, 804, n. 287 Or. 597 P.2d 807 n. 3 (1979) (noting "that courts in other states Adams, Hoiengs County 11. See 245 Neb. of construing Declaratory Judg the Uniform 877, 889, 223, (1994) (con 516 N.W.2d 'person' ments Act have held the word cluding “person” the word “is broad states, agencies, include state and state subdi enough any to include the state or subdivision visions); Anderson, Actions thereof”); State, 889, Meyerkorth v. 173 Neb. 349, (2d 1951)).” Judgments, § 585, ed (1962) (stating 115 N.W.2d "[djeclaratory judgment proceedings have fre Although one court concluded that the word quently employed ques been to determine "person” did political not include a state or validity tions as to the construction or general subdivision based on rules of statuto- involving statutes” in a case construction, ry Bayshore Sanitary see Dist. v. judgment brought against the state of Nebras County, San Cal.App.2d Mateo (State’s ka as well as the Commissioner of (1941), reasoning P.2d 752 was reversed County Superintendent); Education and the Supreme the California Court. It conclud- Bank, City Lincoln v. First Nat’l 146 Neb. ed impairment sovereign that where "no 221, 224, (1945) (con result, powers underlying would the reason cluding "person” that the term as "used in this rule of construction ceases to exist and enough act is broad Legislature may properly be held to have to include the state or subdivision there apply governmen- intended that the statute of”); State ex rel. Smrha v. General Am. Life though general tal Co., bodies even it used statuto- Ins. 132 Neb. 272 N.W. ry language only.” Hoyt (1937) v. Board Civil (stating "person” that the word in the state); City Angeles, Serv. Declaratory Judgment Comm’rs Los Act includes the State, (1942) Dep’t St. Paul Fire Mar. Cal.2d Ins. Co. 132 P.2d Res., 26, 29-30, (citation omitted). Nat. 25 Ohio Mise.

249 (b) Is the State Immune Suit legislation, the al from Declaratory interpret liberality”); to with courts are Relief McRae, 351, 356 Anderson v. 495 S.W.2d The common-law doc (explaining “[t]he (Tex.Civ.App.1973) expressed of sovereign immunity14 trine is liberally and should construed Act is to be III, in Article Section 27 of the South technicalities”). hedged about not Sovereign Dakota Constitution.15 immuni the as a Finally, inclusion of state the ty “prevents acts governing the with subject to the Act is consistent person state, entities, agencies, public its other history allowing of long Dakota’s South in employees and their from attack judgment actions the against v.Wulf the without state’s consent.” that the we hold State Senst, state.12 105, ¶20, 135, 2003 669 N.W.2d SD meaning State, within of SDCL “person” a the 120, Casazza (citing 142 2000 SD ¶ result, 21-24-2, Declaratory 872, 875). a 11, and as the 616 N.W.2d sov the preclude immunity Act not all Judgment ereign prohibit does ac brought against a tions state officials or joinder party as defendant.13 state’s 1,¶ Parks, 27, contrary acknowledge at We 676 N.W.2d 13. dictum in SD 12.See Pennington stating: (declaratory against County the Secre Department tary of the 'South Dakota of 21-24-2, Under SDCL the State does not Game, pub to determine the Fish and Parks person of meet definition a because Boever, lakes); right lic’s to use certain inland state, person, part- is a a South Dakota not ¶¶ 34, 4-6, (de at 311 561 N.W.2d 1997 SD nership, joint company, unincorporat- stock against claratory judgment the South association, society municipal, pub- ed or a of Accountancy and the Chairman Board of corporation lic or other of character. allowing a statute to determine if Board person, a Since State is not State is promulgate regulating the rules the Board party a and the trial court did proper not accounting was an unconstitutional field of jurisdiction not have to enter 1,¶ Reis, 75, delegation powers); of SD county. relief in favor of (declaratory judgment 550 N.W.2d Pennington County rel. v. State ex Unified capaci against their official state officials in 16, ¶31, Sys., SD 641 N.W.2d Judicial challenge constitutionality of a stat ties to 127, 132. fishing, trap hunting, allowed ute that However, considering long South Dakota's easements); ping South Dakota certain actions, history permitting such the sub- By and Physician's Group Health v. State Penning- authority not in stantial discussed 511, Health, Dep’t 447 N.W.2d Through County, liberal con- ton (S.D.1989) brought (declaratory Act, we conclude that struction of scope against the state determine meaning "person” within 186, Kundert, statute); Wyatt contrary extent dictum is the Act. To the 1985) (S.D. (declaratory judgment 189-90 Pennington County, it expressed is over- Secretary brought against State and ruled. Attorney the constitu General to determine Dorian, statute); tionality waste of nuclear immunity Sovereign "was well established 14. 175, (S.D.1980) (declara 297 N.W.2d 176-77 English the Crown could [where] law tory against Director of Bureau relief own consent in its courts.” be sued without Secretary of Health Vital Statistics City Dep’t, 2001 SD Rapid Police Cromwell v. capacities whether to determine their official 20, ¶ (quoting 23-24 632 N.W.2d unlawfully amended the Bureau acted when it Maine, U.S. S.Ct. Alden v. issuing a new certificate rather than birth (1999)). 144 L.Ed.2d one). Legislature direct law "The shall against the state has suits agency's and in what courts challenge an rules. what manner approved been III, against const brought the state.” SD art Protec Min. Co. v. Board Envtl. Homestake tion, (S.D.1980). § 27. 561-62 250 demand, Hogan, Wilson v. authorized to

agencies. (citing Id. 473 collect and receive (S.D.1991)). Some N.W.2d 492 actions respondents occupation from an tax mea state may brought against officers and by sured gross receipts the of ‘motor carri Oil & agencies. Eagle Refining Co. White 362, ers’” under a Texas statute. Id. at Gunderson, 608, 616, 48 205 N.W. S.D. 190 In S.W.2d at 710. rejecting the sover 614, 27, (1925); Sys., 2005 617 Dakota SD defense, eign immunity the Texas court ¶ 9, at 28. Those actions in explained that did compel clude to state official to suits “impose liability upon not the or perform purely that are min official duties compel performance of its contracts” discretionary power. isterial and involve no nor was it an “for of recovery action In officials those cases “state be re money from that paid the State” would be by prohibited appropriate strained or ac 365-66, out treasury. of the State Id. at procedure, tion or court having 190 S.W.2d at 712. The court further jurisdiction, unlawful performing from acts explained that action was not one to officials, as such without consent of the control a “acting state official that was Co., Eagle Refining state.” Oil & White within scope authority lawfully con 616, 48 S.D. at 205 N.W. 617. Such ferred upon him.” Id. at 190 S.W.2d permitted “[s]overeign actions are because Rather, at 712. only the action sought to immunity against suits bar state declaring “obtain[] that re acting statutory officials in excess their spondents not motor [were] carriers as authority to an pursuant unconstitution by statute, defined the tax peti and that ¶27, Sys., al statute.” Dakota SD tioners, endeavoring compel respon (quoting Egan, at 28 Miller v. N.W.2d tax, dents pay acting [were] ... 301, 316, 828 A.2d Conn. legal authority.” without (2003)). Id. The court “a declaratory judg ultimately ment concluded that when attacking constitutionality state offi seeking of a perform statute or relief from an cials that inval acts are in excess id of authority by act or an abuse an their statutory authority, they not are officer ... not agent prohibited by is “acts of within the State” the rule of im sovereign principles governing immunity.” munity. Thus, Id. as Supreme Court (quoting Dep’t Northwall Reve of Wisconsin noted: nue, 1, 7, 263 Neb. N.W.2d It generally by courts, held both (2002)). federal, state and that where the action Although Systems in by officer, taken or threatened challenge volved a constitutional to tax alleged to violation of the com- statutes, seeking interpretation actions plainant’s rights, either because of a permitted tax statutes are also within this misapplication misconstruction sovereign immunity exception. In Cobb v. statute, officer of a or on account of the Harrington, 144 Tex. S.W.2d 709 alleged statute, unconstitutionality of the (1945), the Supreme Texas Court consid action is not fact against one ered a remarkably dispute. similar state purposes sovereign [for immuni- case, company a Texas brought a ty] but against is rather the individual declaratory judgment action against power because of his lack and authori- Texas State Comptroller to declare ty to do thing complained of. “whether or respondents legally are Roach, liable pay and petitioners legally are Berlowitz v. 252 Wis. omitted).16 (citation (1947) county to ering attempt impose obligation treasury, the an state the Notwithstanding exception, this [¶29.] of holding Pennington County is limited to and the State court concluded the circuit county seeking monetary suits relief from immune from suit the State is argues that treasury. Certainly, the state Pen County, Pennington under our decision sovereign im nington County dictum on case, In 31, 127. that 2002 SD munity may to suggest not be extended (a county) sued a of State subdivision rather novel notion that are states ¶ county sought 15. a Id. The the State. immune from for generally suits declarato it to that was not declaration ry contrary, previously relief. On the as in a court space the State with provide discussed, declaratory judgment “a action but, required, that the house if it was so attacking constitutionality of a statute county for obligated pay to State was seeking from an invalid act an or relief or ¶ space. Id. 3. This Court dismissed that authority by agent of an or is abuse officer suit, concluding that cannot “[c]ounties prohibited principles governing ... not ¶ 15. sue their creators.” Id. ¶ 9, immunity.” 694 sovereign correctly points State out The [¶30.] (citations omitted). at 28 To extent rendering that this Court that decision Pennington County may interpreted immunity sovereign and stated discussed otherwise, limit its reach. we sued for State cannot be “[t]he ¶ case, only In language sought that Nelson relief.” Id. 16. interpretation of the in the of the an excise statutes must be considered context counties, they to its of apply prospective that as creatures as sales holding Court’s State, a sought their creator. automobiles. Nelson neither not sue Furthermore, monetary of recently nor a refund taxes we have noted treasury. from County distinguishable paid be that would be the state Pennington Furthermore, to attempt the action did county attempting was to obtain cause the action a ruling obligate impose upon the State control or affirmative a to acting county allegedly official that was pay money for the State’s state legal authority. of Sys., scope of 2005 within his use the Courthouse. ¶ Rather, 27, only sought a 8, this action declara 694 N.W.2d at 27-28. Consid SD 399, 804, 405, Angeles, 132 parte Dep't Cal.2d P.2d See Ex Human 21 of 2128979, Res.,—So.2d—,—, (1942) (stating sovereign of “no invasion 2004 WL 807 involved_The present action de (concluding ty is (Ala.Civ.App.2004) *4 that sover claratory was instituted obtain eign immunity protect a state offi "does not interpretation Angeles compel the of the Los Charter employee cer or in 'a suit to liability enjoin impose upon kind performance legal duty, a of of a suit to law, Heintz, city”); Conn. a Doe v. the enforcement an unconstitutional 1318, "[sjover- (1987) (stating that performance a A.2d compel of ministerial suit act, against brought eign immunity does not suits state or bar a suit under ” " Rather, statutory brought acting of their Judgments officials in excess '[a]ctions Act.’ authority pursuant unconstitutional Declaratory Judgments ... to an under Act 207, statute”); Conway, A.D.2d seeking of a statute and how Bunis construction 435, 208, (quoting & given Dun applied situation' are N.Y.S.2d should be York, 198, City 'against New N.Y. species are not Bradstreet v. of actions that State,’ 732) (concluding [sovereign immunity]”) purposes 11 N.E.2d is allowable (citing Corp., So.2d v. Gladwin Patterson Graham, 142) question involved (quoting 287 Ala. "where constitutional Aland v. (1971)); meaning a statute is in Hoyt legality 250 So.2d City question”). Serv. Los Board Civil Comm'rs of applicability tion the ex concerning the sole means of relief for all the reasons cise tax to motor vehicles that were re stated herein. turned or before repossessed installment addition, we should overrule completed. ques sale contracts were That Pennington County simply rather than only required tion the circuit court to de because, my “limit its reach” Ias stated in Secretary termine whether of the De therein, dissent it was “inconsistent and

partment Regulation of Revenue and wrong” jurisdiction. ... on the issue acting legal authority imposing without at 134. tax. Because such are not actions precluded by sovereign immunity, Nelson’s action not judgment

barred.

[¶ 32.] Reversed and remanded. GILBERTSON, Justice,

[¶ 33.] Chief MEIERHENRY, and KONENKAMP and 2005 SD 111 Justices, concur. Dakota, STATE South Plaintiff SABERS, Justice, concurs Appellee, specially. SABERS, (concurring Justice specially). LEWIS, John Stevenson Defendant I agree with the holding Appellant.

case: Nelson’s No. 23480. against the South Dakota was Supreme Court of South Dakota. by sovereign immunity barred Nelson was to a entitled declaration con- Considered Briefs on Oct. 2005. cerning the applicability of the excise tax to motor repos- vehicles returned or Decided Nov.

sessed before installment sale contracts

were completed.

This holding completely pow- within the

er courts to provide declaratory relief as

provided in the South Dakota

Legislature in 21-24-1.17 I challenge implication

paragraphs Department’s 13 and that a

declaratory process could be intended exclusive, mandated, or as the

17. SDCL claratory judgment 21-24-1 prayed decree for. The declaration respective ju- Courts of record within either affirmative their effect; power negative risdictions shall have to declare form and and such status, rights, legal and other relations declaration shall have force and effect whether or not further relief is or could be a final decree. proceeding claimed. No action or shall be added). (emphasis open objection ground on the a de-

Case Details

Case Name: Dan Nelson, Automotive, Inc. v. Viken

Court Name: South Dakota Supreme Court

Date Published: Nov 2, 2005

Citation: 706 N.W.2d 239

Docket Number: 23363

Court Abbreviation: S.D.