Verizon New England Inc. v. Neena S. Savage, in her capacity as Tax Administrator for the State of Rhode Island.
No. 2020-40-M.P. (A.A. 18-187)
Supreme Court of Rhode Island
February 9, 2022
NOTICE: This opinion is subject to formal revision before publication in the Rhode Island Reporter. Readers are requested to notify the Opinion Analyst, Supreme Court of Rhode Island, 250 Benefit Street, Providence, Rhode Island 02903, at Telephone (401) 222-3258 or Email: opinionanalyst@courts.ri.gov, of any typographical or other formal errors in order that corrections may be made before the opinion is published.
Present: Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ.
Justice Goldberg, for the Court. This case came before the Supreme Court on November 4, 2021, pursuant to a writ of certiorari issued upon petition by the City of Pawtucket (Pawtucket) and the City of Cranston (Cranston) (collectively movants).1 The movants seek review of a
Facts and Travel
This controversy arose from Verizon’s challenge to a 2018 final decision of the tax administrator that upheld an assessment of Verizon’s tangible personal property (TPP) tax and denied Verizon’s request for a lower assessment and a partial refund for TPP taxes paid from 2010 through 2014. On December 21, 2018, Verizon filed an administrative appeal in the District Court in accordance with
Initially, on February 27, 2019, the District Court heard and denied motions filed by the tax administrator to dismiss this case for failure to join indispensable parties and, alternatively, to join indispensable parties—the state’s thirty-nine cities and towns and the Department of Revenue Division of Municipal Finance.
In October 2019, Providence moved to intervene as of right, followed by Pawtucket and Cranston. In its memorandum in support of its motion, Providence claimed an interest in the TPP tax and contended that, under
Significantly, in their motions to intervene, movants merely adopted Providence’s memorandum of law and the arguments therein and presented no additional contentions separate from those offered by Providence.
On January 14, 2020, the District Court held a hearing on the motions to intervene. The trial judge granted Providence’s motion and denied movants’ motions. The trial judge carefully reviewed the four requisites necessary for intervention4—namely
The trial judge determined that all three cities satisfied the second and third requirements, but further found that Providence adequately represented the interests of both Pawtucket and Cranston. Specifically, with respect to the second requirement, the trial judge found that, because the three cities are direct beneficiaries of the TPP tax, and thus have an economic interest that is intertwined with the tax revenue at issue and any future distributions, they have an interest relating to the property or transaction in dispute—namely, Verizon’s request for a lower tax assessment. With respect to the third requisite, the trial judge found that the cities had no other avenue to protect their interests in the event of an adverse ruling. Finally, while acknowledging that the fourth requirement generally involved a minimal threshold, the trial judge found that the cities’ interests were not adequately represented by the state agency and that intervention was appropriate. Apparently concerned with an influx of motions to intervene from multiple municipalities in the state, and because movants had simply relied upon Providence’s memorandum and arguments in support of their own motions to intervene, the trial judge found that the interests of Pawtucket and Cranston would be adequately represented by Providence, which was allowed to intervene as of right. An order entered in the District Court on January 16, 2020, memorializing the trial judge’s decision.
The movants filed a petition for writ of certiorari pursuant to
On remand, the trial judge again determined that movants’ interests were adequately represented by Providence, and he denied their motions to intervene. The trial judge concluded that the ultimate issue in the case was the “statutory interpretation of accumulated depreciation” and that, except
Standard of Review
“Our review of a case on certiorari is limited to an examination of the record to determine if an error of law has been committed.” State v. Poulin, 66 A.3d 419, 423 (R.I. 2013) (quoting State v. Greenberg, 951 A.2d 481, 489 (R.I. 2008)). “In addition to examining the record for judicial error, ‘we inspect the record to discern if there is any legally competent evidence to support the findings of the hearing justice below.‘” Id. (quoting Brown v. State, 841 A.2d 1116, 1121 (R.I. 2004)). “We shall not disturb the findings of the trial justice unless it is established that he or she misconceived or overlooked relevant and material evidence or was otherwise clearly wrong.” WMS Gaming, Inc. v. Sullivan, 6 A.3d 1104, 1111 (R.I. 2010) (quoting New England Telephone and Telegraph Co. v. Clark, 624 A.2d 298, 300 (R.I. 1993)).
Additionally, “[t]his Court reviews a trial justice’s [decision on] a motion to intervene for abuse of discretion, reversing only if the justice failed to apply the standards set forth in Rule 24(a)(2), or otherwise committed clear error.” Town of Coventry v. Baird Properties, LLC, 13 A.3d 614, 619 (R.I. 2011).
Discussion
Rule 24(a)(2) of the District Court Civil Rules provides for intervention as of right when “[u]pon timely application * * * the representation of the applicant’s interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action[.]”7 The relevant language of that rule and Rule 24 of the Superior Court Rules of Civil Procedure were identical prior to a 1995 amendment to the Superior Court rule for intervention as of right, which was enacted in order to align with its federal counterpart.8 See Reporter’s Notes to Dist. Ct. Civ. R. 24; Super. R. Civ. P. 24(a). Notably, in Marteg Corporation v. Zoning Board of Review of City of Warwick, 425 A.2d 1240 (R.I. 1981), which was decided prior to the amendment, this Court analyzed one’s right to
To establish a right to intervene, movants were required:
“(1) to file timely application for intervention, (2) to show an interest in the subject matter of that action in that the disposition of the action without intervention would as a practical matter impair or impede their ability to protect that interest, and (3) to establish that their interest was not adequately represented by the existing parties.” Marteg Corporation, 425 A.2d at 1242.
On review, movants do not challenge the trial judge’s findings with respect to the first two components10 of this rule; rather, they contend that the trial judge erred in finding that Providence would adequately represent their interests because, they contend, he focused too narrowly on the parties’ positions—specifically, that each city is aligned with and supports the tax administrator’s statutory interpretation of accumulated depreciation under
Additionally, movants assert that, because the burden of showing inadequate representation is minimal, they need only demonstrate “some tangible basis” that their interests “may” be at risk.
Verizon, on the other hand, contends that precedent requires movants to “show [an] adverse legal position with Providence * * * to make a compelling showing of inadequate representation.” (Citing Stuart v. Huff, 706 F.3d 345 (4th Cir. 2013); Bush v. Viterna, 740 F.2d 350 (5th Cir. 1984); and Retirement Board of Employees’ Retirement System of City of Providence v. Corrente, 174 A.3d 1221 (R.I. 2017).) Because movants cannot make a compelling showing, Verizon argues, the trial judge “acted within [his] discretion in denying the [m]otions.” Verizon also asserts that movants have not demonstrated a direct interest relating to the property or transaction
This Court has recognized that “Rhode Island precedent [concerning whether representation is adequate] is sparse“; as such, we “may properly look to the federal courts for guidance.” Corrente, 174 A.3d at 1230 (quoting Tonetti Enterprises, LLC v. Mendon Road Leasing Corp., 943 A.2d 1063, 1073 (R.I. 2008)). Typically, the proponent of intervention need only establish “‘some tangible basis to support a claim of purported inadequacy’ of representation by the current [parties,]” Baird Properties, LLC, 13 A.3d at 620 (quoting Credit Union Central Falls v. Groff, 871 A.2d 364, 368 (R.I. 2005)), and such burden is “considered minimal[.]” Id. (citing Trbovich v. United Mine Workers of America, 404 U.S. 528, 538 n.10 (1972)). When the burden is considered minimal, “the requirement of the rule is satisfied if the applicant shows that representation of his interest ‘may be’ inadequate.” Id. (brackets omitted) (quoting Trbovich, 404 U.S. at 538 n.10).
However, a compelling showing may be necessary when the intervenor’s “interest is identical to that of one of the present parties, or if there is a party charged by law with representing the [proposed intervenor’s] interest[.]” 7C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1909, 394-95 (3d ed. 2007). Significantly, a presumption of adequate representation arises when either “the goals of the applicants are the same as those of the plaintiff or defendant,” or “the government in defending the validity of the statute is presumed to be representing adequately the interests of all citizens who support the statute.” Daggett v. Commission on Governmental Ethics and Election Practices, 172 F.3d 104, 111 (1st Cir. 1999); see Corrente, 174 A.3d at 1230. “To overcome that presumption, [one seeking to intervene] ordinarily must demonstrate adversity of interest, collusion, or nonfeasance.” United Nuclear Corporation v. Cannon, 696 F.2d 141, 144 (1st Cir. 1982) (quoting Moosehead Sanitary District v. S.G. Phillips Corporation, 610 F.2d 49, 54 (1st Cir. 1979)); see Town of Coventry v. Hickory Ridge Campground, Inc., 111 R.I. 716, 722-23, 306 A.2d 824, 828 (1973) (determining that when the Superior Court established that the town solicitor inadequately represented the interests of the town’s citizens by failing to appear in court and prematurely entering into a consent decree, intervention was warranted).
However, factors such as adversity of interest, collusion, or nonfeasance are not exclusive. See, e.g., Daggett, 172 F.3d at 111. An intervenor may support a claim of inadequacy of representation by demonstrating that there is “an actual conflict of interests[,]” id. at 112, or that “its interests are sufficiently different in kind or degree from those of the named party.” B. Fernandez & Hnos., Inc. v. Kellogg USA, Inc., 440 F.3d 541, 546 (1st Cir. 2006); see Corrente, 174 A.3d at 1230 (concluding that the intervenors rebutted the presumption by demonstrating that “a vast gulf” existed between the positions of the intervenors—the city and its mayor—and the government agency, the retirement board); see also Groff, 871 A.2d at 368 (holding that the intervenor established an interest different in kind from the current parties because she not only claimed an interest in the funds, she claimed an interest that was superior to that of the other parties).
This Court has determined that, where a party is presumed to represent the intervenor’s interest or position, the one seeking intervention must simply provide “an adequate explanation as to why
In the case at bar, the merits of the underlying controversy concern a question of law. Because movants and Providence have presented identical goals—that the state’s interpretation of accumulated depreciation and assessment of Verizon’s TPP tax should be upheld—there is a presumption of adequate representation in this case. See United Nuclear Corporation, 696 F.2d at 144 (determining that a presumption of adequate representation existed where the movants’ interests were no different in kind from and the litigation goal, of upholding the constitutionality of the statute, was aligned with a party to the action); see also Corrente, 174 A.3d at 1230 (although a presumption of adequate representation applied where a government entity was a party, presumption was overcome by adverse positions between the current parties and the intervenors). The movants do not hold positions that are adverse to that of Providence.
The record discloses that the trial judge initially considered movants’ burden of establishing inadequacy of representation to be minimal, but on remand, he required movants to make a compelling showing of inadequate representation. However, the proper standard lies in the middle. In this case, to overcome the presumption, it was incumbent upon movants to provide a tangible basis for intervention, Baird Properties, LLC, 13 A.3d at 620, and an adequate explanation as to why their interests were not “adequately represent[ed]” by Providence. Corrente, 174 A.3d at 1230 (“This is a fact-intensive determination that ‘must be determined in keeping with a commonsense view of the overall litigation.‘“) (quoting Maine, 262 F.3d at 19). They failed to do so.
On remand in the District Court, movants expressed serious concern about the specter of a settlement or judgment that would require a refund to Verizon; movants implied that a refund would result in a clawback of previous payments. Specifically, they speculated that, because the three cities each have their “own unique set of fiscal and budgetary challenges, concerns, and priorities[,]” in the event the state and Verizon negotiate a settlement, “Providence will push for a settlement or order that is structured in a way that best fits Providence’s fiscal and budgetary priorities” rather than those of movants. The movants also argued that any refund to Verizon would cause havoc to those cities’ distinct “fiscal and budgetary challenges, concerns, and priorities[,]” namely because how such a refund would be accomplished is unknown. It matters not whether these contentions are analyzed by the District Court utilizing the higher burden of a compelling showing of inadequate representation as employed—incorrectly, we note—or using the less burdensome standard of a tangible basis for intervention and an adequate explanation as to why that interest would not be adequately represented by Providence. The conclusion is the same; because movants failed to demonstrate that a cognizable distinction in their interests exists on the merits from those of Providence, there is no tangible basis for intervention. We reject the contention that
Because the level of adequacy of representation “may vary with the strength of the interests[,]” Maine, 262 F.3d at 20, a clear understanding of movants’ interests is important. On the merits, Verizon claims that the tax administrator deviated from the statutorily required method of calculating accumulated depreciation by failing to consider all factors that impact the value of Verizon’s TPP. This misapplication, according to Verizon, led to an overstated assessment of its taxable TPP and excessive tax payments to the state for the calendar years from 2009 through 2014. Verizon claims that, as a result, it is entitled to a partial refund.
Although the ultimate interpretation of accumulated depreciation may determine if Verizon is entitled to a refund or credit, how that refund or credit is managed or administered is not before the trial judge. See
Specifically, it is the tax administrator and the director of administration who are vested with the authority to manage refunds and credits.12 See
As discussed infra, movants argue that their interests are “separate and distinct from the interests of Providence” in that every municipality “has its own unique set of fiscal and budgetary challenges, concerns, and priorities“; according to movants, these interests “come into play in spending TPP [t]ax revenue[], [which] would be affected differently by” a decrease in that revenue. The movants compare their interests in the TPP tax to the intervenors’ interests in their real property in Hickory Ridge Campground, where there was “special injury of economic loss through property devaluation” to the intervenor-landowners
We are of the opinion that movants’ interests in ancillary effects, specifically on the expenditure of tax revenue, is indirect and contingent upon both the interpretation of the statute and its effects, if any. See Hines Road, LLC v. Hall, 113 A.3d 924, 930 (R.I. 2015) (determining that intervenor’s interest was contingent upon an agreement between the parties); see also Tonetti Enterprises, LLC, 943 A.2d at 1073 (“An intervenor’s interest must bear a ‘sufficiently close relationship to the dispute between the original litigants’ and the ‘interest must be direct, not contingent.‘“) (quoting Conservation Law Foundation of New England, Inc. v. Mosbacher, 966 F.2d 39, 42 (1st Cir. 1992)). The proffer of a generalized grievance—common to all municipalities—that movants’ fiscal and budgetary concerns are uniquely different from those of Providence, without an adequate explanation as to how those concerns are different in kind or adverse to Providence, is conclusory and insufficient to overcome the underlying presumption. See Corrente, 174 A.3d at 1230 (determining that the presumption was overcome by a showing of adverse positions); see also Groff, 871 A.2d at 368 (determining that intervenor’s interest was different in kind in that she claimed priority over other claimants to the limited funds in a client account); West Warwick School Committee v. Souliere, 626 A.2d 1280, 1284 (R.I. 1993) (determining that the motion to intervene was properly denied where “the taxpayers failed to show any actual or concrete wrong beyond a general grievance common to all taxpayers“). This is not a case where various parties are claiming a competing interest in a limited fund.14 See Groff, 871 A.2d at 368. Rather, Providence’s interest in the continuation of TPP tax revenue, in the greatest amount possible, is clearly aligned with that of movants. Although movants’ interests in the amount of TPP taxes as compared to Providence may vary, that distinction is governed by statute and has no bearing on this lawsuit. Thus, their interests are sufficiently similar, not competing, and, we conclude, will be adequately represented by Providence’s identical litigation goals.
The movants also argue that a settlement between the state and Verizon could result in an order for a refund from movants and cause havoc to their budgets and resident services. This argument is without merit. We are hard-pressed to envision
Furthermore, movants now submit that they “may wish to pursue challenges” to Verizon’s depreciation calculation method that the other parties do not raise. Despite their failure to raise this new trial strategy on remand, these concerns are similarly speculative and fail to overcome the presumption of adequate representation. See Daggett, 172 F.3d at 112 (“[T]he use of different arguments as a matter of litigation judgment is not inadequate representation per se.“). To the extent that movants wish to present challenges to Verizon’s interpretation of accumulated depreciation, they may do so in an amicus brief. See id. (noting that, because statutory intent is not typically proved through trial evidence, and proposed intervenors did not demonstrate otherwise, its arguments were appropriate for an amicus brief and not intervention).
Within the parameters of the issue in this case, the trial judge found that the movants’ interests and positions were no different from those of Providence. The movants failed to demonstrate a cognizable difference in their interests as compared to Providence’s interest or to provide an adequate explanation as to how Providence’s representation of their interests is lacking. Because Pawtucket and Cranston failed to overcome the presumption of adequate representation, we are of the opinion that the trial judge did not err or abuse his discretion in concluding that the movants failed to demonstrate that their interests were not adequately represented by Providence.
Conclusion
For the reasons set forth in this opinion, we affirm the order of the District Court. The record in this case may be remanded to the District Court with our decision endorsed thereon.
STATE OF RHODE ISLAND
SUPREME COURT – CLERK’S OFFICE
Licht Judicial Complex
250 Benefit Street
Providence, RI 02903
OPINION COVER SHEET
| Title of Case | Verizon New England Inc. v. Neena S. Savage, in her capacity as Tax Administrator for the State of Rhode Island. |
| Case Number | No. 2020-40-M.P. (A.A. 18-187) |
| Date Opinion Filed | February 9, 2022 |
| Justices | Suttell, C.J., Goldberg, Robinson, Lynch Prata, and Long, JJ. |
| Written By | Associate Justice Maureen McKenna Goldberg |
| Source of Appeal | Sixth Division District Court |
| Judicial Officer from Lower Court | Associate Judge Christopher K. Smith |
| Attorney(s) on Appeal |
For Plaintiff: Thomas P. Quinn, Esq. Matthew R. Joyce, Esq. William A. Hazel, Esq., Pro Hac Vice For Defendant: Robert K. Taylor, Esq. Frank J. Milos, Jr., Esq. |
SU-CMS-02A (revised June 2020)
Notes
“Upon timely application anyone shall be permitted to intervene in an action:
“* * *
“When the applicant claims an interest relating to the property or transaction which is the subject of the action and the applicant is so situated that the disposition of the action may as a practical matter impair or impede the applicant’s ability to protect that interest, unless the applicant’s interest is adequately represented by existing parties.”
Super. R. Civ. P. 24(a)(2) .
With respect to the TPP tax at issue, “[i]f the tax administrator determines that the corporation has paid a tax in excess of the amount lawfully due, he or she shall allow a refund or permit a credit.”“Whenever an erroneous payment or any payment in excess of the correct amount of any tax, excise, fee, penalty, interest, or other charge is made to the tax administrator, the general treasurer shall, after certification by the tax administrator with the approval of the director of administration, refund the erroneous payment or overpayment, or the tax administrator may credit the erroneous payment or overpayment against any tax then or thereafter due, as the circumstances may warrant.”