Robinson v. IeyoubRobinson v. Ieyoub
Susan Dunham and Daryl Manning, Baton Rouge, for Defendant/Appellant, La. State Bd. of Commerce and Industry.
J. Wendell Clark, Baton Rouge, for Defendant/Appellant, Rollins Environmental Services.
Thomas Milliner, New Orleans, for Intervenor/Appellee, Tulane Environmental Law Clinic, Environmental Action Network, and La. Coalition for Tax Justice.
CARTER, J.
In 1994, the Louisiana Board of Commerce and Industry (the Board) voted to grant an industrial ad valorem tax exemption to Rollins Environmental Services, Inc. (Rollins). Florence T. Robinson, Walter Wright, and
Defendants filed numerous motions and exceptions, including a peremptory exception raising the objection of lack of subject matter jurisdiction. After trial on the merits, the court overruled the exception of lack of subject matter jurisdiction and rendered judgment declaring the Board had exceeded its constitutional authority when it granted the ad valorem tаx exemption to Rollins. Rollins and the Board appealed, urging seven and eight assignments of error, respectively.
DISCUSSION
Subject Matter Jurisdiction
The first assignment of error raised by each defendant is that the trial court erred in overruling the exception of lack of subject matter jurisdiction.
The
However, the right to judicial scrutiny exists when there is a claim of deprivation of a constitutionally protected right, an assertion that an agency exceeded constitutional authority, or an allegation that the action of an administrative agency exceeded its legislative grant of authority. Boeing Company v. Louisiana Department of Economic Development, 657 So.2d at 657.
Plaintiffs allege that the Bоard “exceeded its constitutional authority in authorizing, proposing to authorize, or enter into” the contract for an ad valorem tax exemption because Rollins was “not authorized to receive an industrial tax exemption under the Louisiana Constitution.” Specifically, plaintiffs contended Rollins was not a manufacturing establishment according to the constitutional definition and that the Board exceedеd its authority in granting an ad valorem tax exemption to Rollins. The district court agreed that this allegation was enough to bring the action within its original jurisdiction. We agree.
The allegation that the Board acted in an unconstitutional manner requires that the decision regarding the tax exemption be reexamined. If the courts do not have jurisdiction to review allegations of unconstitutional actions, there is no judicial review or recourse of any nature against an unbridled abuse of power which exceeds constitutional authority. In the case sub judice, the allegation that the Board exceeded its constitutional authority by granting an exemption to Rollins requires this Court to determine if Rollins is a manufacturer. If the Board granted an exemption to an entity that is not a manufacturer, the Board exceeded its constitutional grant of authority. Thus, we find no errоr in the trial court‘s exercise of subject matter jurisdiction and we affirm the trial court‘s denial of appellant‘s peremptory exception raising the objection of lack of subject matter jurisdiction.
Standing
Defendants argue that the plaintiffs did not have standing or a right of action to bring this matter before a court. Our jurisprudence recognizes the right of a taxpayer to enjoin unlawful action by a public body. Under Louisianа law, a taxpayer may resort to judicial authority to restrain
Exception of Res Judicata
On appeal, Rollins has urged the peremptory exception raising the objection of res judicata with respect to the issue of whether Rollins is a manufacturing establishment under the constitutional definition. In support of this argument, Rollins refers, in its exception and the memorandum in support therеof, to three separate lawsuits which were filed between 1990 and 1991 by Rollins. Copies of the petitions in these suits were attached to the exception and memorandum in support as exhibits. Rollins also attached several other exhibits to the exception and memorandum, which it asserts prove that the issue of Rollins’ status as a manufacturing establishment has been fully and finally litigated between the parties herein.
Pursuant to
In the instant case, the evidence upon which Rollins relies as proof of the grounds of its exception is not part of the record. Rather, Rollins has attempted to have this evidence considered by attaching it to the exception and memorandum in support of the exception. We cannot consider the documents attached to those pleadings, and we find that the record before us does not support the grounds alleged by defendants for maintaining the exception. See Sauve Heirs, Inc. v. National Business Consultants, Inc., 522 So.2d 686, 690 (La.App. 1st Cir.), writ denied, 523 So.2d 1341 (La.1988). Thus, Rollins’ exception raising the objection of res judicata is denied.
Constitutional Definition
The trial court found that Rollins did not meet the definition of a manufacturing establishment under
The terms “manufacturing establishment” and “addition” as used herein mean a new plant or establishment or an addition or additions to any existing plant or establishment which engages in the business of working raw materials into wares suitable for use or which gives new shapes, qualities or combinations to matter which already has gone through some artificial process.
The record reflects Rollins owns and operates a hazardous waste incinerator facility in East Baton Rouge Parish. Rollins’ incinerator accepts hazardous material from a variety of sources for proсessing in its facility. Rollins takes this hazardous waste and burns it at its facility. As a result of the incineration process, some of the hazardous material is released into the atmosphere in the form of carbon dioxide and water vapor. The material that remains is called incinerator ash. Incinerator ash is a hazardous substance according to federal and state rules and regulations.
Rollins argues that because its incineration process changes the quality and composition of the hazardous waste it receives, that such a change satisfies the definition of a manufacturing establishment under the constitution. Plaintiffs argue that because the incinerator ash is still a hazardous substance and is not “suitable for use” that Rollins cannot be considered a manufacturer according to the constitution. Accordingly, the issue before this Court is whether the “suitable for use” requirement not only applies to raw materials worked into wares, but whether establishments which change the shape, quality, or combination, must also make the changed matter “suitable for use” to meet the constitutional definition of a manufacturing establishment.
The Louisiana Supreme Court outlined the principles of constitutional interpretation in Succession of Lauga, 624 So.2d 1156, 1165 (La.1993):
In general, the constitution is subject to the same rules of interpretation as other laws and written instruments. When a constitutional provision is clear and unambiguous, and its application does not lead to absurd consequences, it must be applied as written without further interpretation in search of its intent. Every provision must be interpreted in light of the purpose of the provision and the interests it furthers and resolves. When a constitutional provision is identical or very similar to that of a former constitution, it is presumed that the same interpretation will be given to it as was attributed to the former provision. Because the question of how the constitution was understood by the people adopting it, not merely how it was viewed by the drаfters, the debates of a convention, as a general rule, cannot be resorted to for the purpose of varying the otherwise clear and unambiguous meaning of a constitutional provision.
The supreme court also found that in construing a constitutional provision, the courts may consider the object sought to be accomplished by its adoption, and the evils, if any, sought to be prevented or remedied, in light оf the history of the times and the conditions and circumstances under which the provision was framed. Succession of Lauga, 624 So.2d at 1160.
In our review of
As plaintiffs point out, the exact language used to define a manufacturing establishment in the constitution originates from the judicial definition of a manufacturer. This definition can be traced to two cases. The first is City of New Orleans v. LeBlanc, 34 La. Ann. 596 (La.1882), wherein the court defined a manufacturer using the exact language now found in our constitution, but also indicated that the end result of а manufacturer‘s work would yield a product to be placed in the stream of commerce. The court wrote that “manufacturers are the suppliers of the dealers, or consumers.” City of New Orleans v. LeBlanc, 34 La. Ann. at 597-98. The court‘s initial definition of a manufacturer encompassed his role in commerce and trade, which necessitated the production of a good that the dealers and consumers would find useful, thereby creating a demand fоr that product.
Although the record reflects that Rollins did market and profit from its incineration process, we find that it is the actual incineration service that is being sold. At the time of trial, Rollins did not create a product from the incinerator ash that could be sold for use or sold as a component of another product which had a use. There is nо dispute that Rollins’ incineration process produced hazardous waste which was placed in a landfill.
When considering the goals sought to be accomplished by the ad valorem tax exemption, a manufacturer must be required to produce products suitable for use. Any other interpretation would frustrate the reason for the ad valorem tax exemption program. State and local economiеs are boosted when a manufacturer produces products which can be sold for use, thereby increasing revenue for the manufacturer, which translates into taxable profits, taxable income for employees, and sales taxes on the products manufactured. If a manufacturer only changes the shapes, qualities, or composition of something and the product is not suitable for use, this does not stimulate the economy in terms of providing other taxable sources. If the product is not suitable for use, the economy is not affected in a positive manner and alternative tax revenue opportunities do not exist. Therefore, we find the “suitable for use” requirement must apply whether a manufacturer is working raw materials into wares, or taking materials which have already gone through some artificial process and changing its shape, qualities, or composition.
We find the trial court did not err when it found that Rollins did not meet the constitutional definition of a manufacturing establishment. The record reflects that the incinerator ash produced by Rollins is not the product of a process which contemplates its use after incineration, nor does Rollins take any steps to make the incinerator ash marketable, which could be considered as evidence the incinerator ash had some use. Although the incineration process does change the hazardous waste into incinerator ash, because the ash is not “suitable for use,” Rollins cannot be considered a manufacturing establishment according to the constitution.
By granting a facility that did not qualify as a manufacturing establishment an industrial ad valorem tax exemption, the Board clearly exceeded it constitutional authority. The decision of the trial court is affirmed.
Evidentiary Matters
Because our decision in this matter is based only on an examination of the constitutional provision, the purpose of the provision, and the factual testimony of what occurs during Rollins’ incineration process, the issues raised by defendants regarding the relevance of some of the other testimony and evidence introduced in the trial сourt have no bearing on the outcome of this decision. In our review of the record, we do not question, nor do we see where the trial court questioned the testimony of Dale Scherger, the expert chemical engineer who explained the incineration process; thus, we do not address the issues raised by defendants pertaining to the admissibility and relevance of the SIC Code and Ms. Robinson‘s testimony.
Improper Use of Summary Proceedings
Further, defendаnts complain that this matter was an improper use of summary proceedings because the trial on the matter was held only three months after the suit was filed. Defendants assert they were prejudiced by not getting full and complete discovery. We note there is no dispute in the record of the physical process which takes place in Rollins’ incinerator. As previously explained, the outcome of this case is one of constitutional interpretation, and as we and the trial court have both accepted Rollins’ presentation of the incineration process, we
CONCLUSION
Based on the foregoing reasons, we affirm the judgment of the trial court that Rollins is not a manufacturing establishment under the definition found in
AFFIRMED.
SHORTESS, C.J., dissents with reasons.
SHORTESS, C.J., Dissenting.
I respectfully dissent from the majority‘s holding that the trial court had subject matter jurisdiction in this case. In my opinion it did not.
Subject matter jurisdiction is conferred by the
But what is a “civil matter” under
This court addressed the question of appellate jurisdiction of the district court over decisions of the Louisiana Board of Commerce and Industry (the Board) regarding ad valorem tax exemptions in Boeing Company v. Louisiana Department of Economic Development.4 We found the regulation and control of ad valorem tax exemptions, constitutionally delegated to the Board аnd the governor, are traditionally and historically matters handled by the executive branch and thus are not civil matters within the meaning of
Plaintiffs, however, rely on the court‘s statement in Boeing that the right of judicial scrutiny exists when there is a claim of deprivation of a constitutionally-protected right, the assertion that the agency action exceeded constitutional authority, or an allegation that the action of an administrative agency exceeded its legislativе grant of authority.6 Plaintiffs allege in their petition that the Board “exceeded its constitutional authority in authorizing, proposing to authorize, or enter into” the contract for ad valorem tax exemption because Rollins was “not authorized to receive an industrial tax exemption under the Louisiana Constitution .” They contend this allegation is sufficient to bring this action within the district court‘s original jurisdiction. The district court agreеd, citing Boeing.
Despite the artful wording of their petition, plaintiffs’ suit is nothing more than an attempt to have the district court overrule the decision of the Board on whether to grant an ad valorem tax exemption. In Boeing, the court looked at the subject matter of the suit “[i]rrespective of the parties’ classification.”7
I respectfully dissent.