Case Title: Ada Electric Cars, LLC v. Kemp

Citation: 

Docket Number: 111016

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2012-12-18T00:00:00Z

Document:
ADA ELECTRIC CARS, LLC. v. KEMP2012 OK 110Case Number: 111016Decided: 12/18/2012THE SUPREME COURT OF THE STATE OF OKLAHOMA
NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN 
THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR 
WITHDRAWAL. 

ADA ELECTRIC CARS, LLC., Plaintiff/Appellant,v.THOMAS 
KEMP, JR., JERRY JOHNSON, DAWN CASH, and RICK MILLER, 
Defendants/Appellees.
ON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA 
COUNTYHONORABLE DONALD WORTHINGTONDISTRICT JUDGE
¶0 Appeal of an August 13, 2012, final order denying the 
Plaintiff/Appellant's motion for a new trial and dismissing the 
Plaintiff/Appellant's first amended petition with prejudice. 
Defendants/Appellees successfully argued they were entitled to claim qualified 
immunity from suit. We find the Defendants/Appellees possess qualified immunity 
from suit in the present matter and affirm the judgment of the trial 
court.
JUDGMENT OF THE TRIAL COURT IS AFFIRMED
Daniel G. Webber, Jr. and Grant M. Lucky, Ryan Whaley Coldiron Shandy PLLC., 
Oklahoma City, Oklahoma, for Plaintiff/Appellant.Joe M. Hampton and Amy J. 
Pierce, Corbyn Hampton, PLLC, Oklahoma City, Oklahoma, for 
Defendants/Appellees.
COMBS, J:
¶1 Ada Electric Cars, LLC (Plaintiff/Appellant) filed this lawsuit against 
Thomas Kemp Jr., Jerry Johnson, Dawn Cash, and Rick Miller (collectively, 
Defendants/Appellees), members of the Oklahoma Tax Commission (OTC), in their 
individual capacities, in response to the OTC's denial of a statutory tax credit 
for certain models of Tomberlin low-speed electric vehicles (LSVs) sold by the 
Appellant to its customers. The statutory tax credit was originally enacted in 
the 1990s, and the controlling version in this case was codified at 
68 O.S.Supp 2008, § 
2357.22. It provided for a one-time credit against income tax for investments in 
qualified electric motor vehicle property.1 This is the latest in several cases to come before this 
Court all concerning the LSV tax credit codified at 68 O.S.Supp 2008, § 2357.22.2 The dispositive issue 
presented is whether Appellees are entitled to qualified immunity from suit for 
their determination that LSVs sold by Appellant did not qualify for the tax 
credit provided for in 68 O.S.Supp 2008, § 2357.22. We hold that they 
are.
FACTS AND PROCEDURAL HISTORY
¶2 Appellant brings suit against Appellees in their individual capacities 
pursuant to 42 U.S.C. § 1983, alleging Appellees violated Appellant's 
constitutional rights by infringing upon Appellant's freedom of speech and 
denying Appellant equal protection under the law. 3 More specifically, 
Appellant alleges Appellees violated its rights by: 1) treating Appellant's 
vehicles and customers differently than other similarly situated LSV dealers due 
to the manner in which it applied the tax credit provided for in 
68 O.S.Supp 2008, § 
2357.22; 2) applying a construction of the statute that produced inconsistent, 
arbitrary, discriminatory, and absurd results; and 3) retaliating against 
Appellant for what Appellant claims was its protected speech in advertising the 
applicability of the tax credit to its vehicles.
¶3 Appellees moved to dismiss Appellant's lawsuit on multiple grounds, 
including: 1) Appellant lacked standing; 2) the § 1983 claims failed because 
they were conclusory; 3) Appellant failed to properly assert a First Amendment 
claim or Equal Protection claim; and 4) Appellees are entitled to qualified 
immunity on all claims as a matter of law. Appellant responded to Appellees' 
motion to dismiss, disputing all of the above grounds for dismissal. On June 29, 
2012, the trial court dismissed Appellant's First Amended Petition with 
prejudice, without stating grounds for dismissal. Appellant then filed a motion 
for a new trial, which the trial court denied on August 13, 2012. Appellant 
appealed and filed its petition in error on August 29, 2012. We retained 
jurisdiction.
The applicability of the defense of qualified immunity is 
dispositive. 
¶4 Appellees assert here, as they have previously when sued in their 
individual capacity by other LSV dealers, that they possess qualified immunity 
from suit. Qualified immunity is an affirmative defense which entitles 
government officials, performing discretionary functions, not to stand trial or 
face other burdens of litigation, such as discovery. Rooks v. 
State Through Oklahoma Corp. Comm'n, 1992 OK CIV APP 155, ¶6, 842 P.2d 773, 776; Harlow v. Fitzgerald, 
457 U.S. 800, 102 S. Ct. 2727, 73 L. Ed. 2d 396 (1982). Because qualified immunity is an 
immunity from suit rather than a mere defense to liability, it is effectively 
lost if a case is erroneously permitted to go to trial. In Pearson v. 
Callahan, 555 U.S. 223, 232, 129 S. Ct. 808, 815, 172 L. Ed. 2d 565 (2009), the 
United States Supreme Court held that:
Because qualified immunity is "an immunity from suit rather than a mere 
defense to liability ... it is effectively lost if a case is erroneously 
permitted to go to trial." Mitchell v. Forsyth, 472 U.S. 511, 
526, 105 S. Ct. 2806, 86 L. Ed. 2d 411 (1985) (emphasis deleted). Indeed, we have 
made clear that the "driving force" behind creation of the qualified immunity 
doctrine was a desire to ensure that " 'insubstantial claims' against government 
officials [will] be resolved prior to discovery." Anderson v. Creighton, 
483 U.S. 635, 640, n. 2, 107 S. Ct. 3034, 97 L. Ed. 2d 523 (1987). Accordingly, "we 
repeatedly have stressed the importance of resolving immunity questions at the 
earliest possible stage in litigation." Hunter v. Bryant, 
502 U.S. 224, 227, 112 S. Ct. 534, 116 L. Ed. 2d 589 (1991) (per 
curiam).
The question of whether parties to a suit possess qualified immunity is a 
question of law, and we review it de novo. Barnthouse v. City of Edmond, 
2003 OK 42, ¶20, 73 P.3d 840, 849; Mitchell, 472 U.S.  at 
528; 
Melton v. City of Oklahoma, 879 F.2d 706, 726 (10th Cir. 1989).
¶5 This Court has previously espoused that there exists a presumption of 
immunity in favor of government officials which is not overcome unless it is 
shown the government officials violated clearly established law or 
constitutional rights of which a reasonable official should have known. 
Barnthouse, 2003 OK 42, ¶20, 73 P.3d 840, 849. In Barnthouse, we held:
… an objective test … determine[s] whether the doctrine of qualified immunity 
applies. When government officials are performing discretionary functions, they 
will not be held liable for their conduct unless their actions violate "clearly 
established statutory or constitutional rights of which a reasonable person 
would have known." 
Barnthouse, 2003 OK 42, ¶20, 73 P.3d 840, 849 (quoting Harlow, 
457 
U.S. at 818). Qualified immunity shields federal and state officials from money 
damages unless a plaintiff pleads facts showing: 1) that the official violated a 
statutory or constitutional right; and 2) that the right was "clearly 
established" at the time of the challenged conduct. Ashcroft v. al-Kidd, 
131 S. Ct. 2074, 2080, 179 L. Ed. 2d 1149 (2011); Harlow, 
457 U.S.  at 818-819. 
¶7 This court must examine the law as it was at the time of the officials' 
actions in order to determine whether the law allegedly violated was clearly 
established. Barnthouse, 2003 OK 42, ¶20, 73 P.3d 840, 849; Harlow, 457 U.S.  at 
818. 
The plaintiff, in the underlying action must do more than identify a clearly 
established right in the abstract and allege it was violated: the contours of 
the law must be sufficiently clear that a reasonable official would understand 
what he/she is doing violates the established right. Barthouse, 
2003 OK 42, ¶20, 73 P.3d 840, 849; Anderson 483 U.S.  at 
640. 
At the time of the officials' actions, existing precedent must have placed the 
statutory or constitutional question beyond debate. Reichle v. Howard, 
132 S. Ct. 2088, 2093, 182 L. Ed. 2d 985 (2012); Ashcroft, 131 S. Ct.  at 
2083. Requiring the right allegedly violated to be clearly established protects 
a balance between the need to safeguard constitutional rights and the need for 
government officials to be able to effectively perform their duties by ensuring 
they can anticipate when their actions might violate constitutional rights. 
See Reichle, 132 S. Ct.  at 2093; Anderson, 483 U.S.  at 
646. 
In short:
Qualified immunity gives government officials breathing room to make 
reasonable but mistaken judgments about open legal questions, and when properly 
applied, it protects "all but the plainly incompetent or those who knowingly 
violate the law." 
Ashcroft, 131 S. Ct.  at 2085 (quoting Malley v. Briggs, 
475 U.S. 335, 341, 106 S. Ct. 1092, 1096, 89 L. Ed. 2d 271 (1986).
¶8 The First Amendment generally prohibits government officials from 
subjecting individuals to retaliatory actions for their speech. Hartman v. 
Moore, 547 U.S. 250, 256, 126 S. Ct. 1695, 1701, 164 L. Ed. 2d 441 (2006). 
However, the United States Supreme Court has explained the right allegedly 
violated must be established not as a broad general proposition, but in a 
particularized sense so that the contours of the right are clear to a reasonable 
official. Barthouse, 2003 OK 42, ¶20, 73 P.3d 840, 849; Reichle, 132 S. Ct.  at 
2094. Under this standard, Appellant must demonstrate that when the 
Appellees interpreted the statutory exemption to exclude Appellant's vehicles, 
they violated a clearly established right that Appellant possessed to advertise 
its vehicles qualified for the tax credit. For Appellees' qualified immunity to 
be overcome, it would have to have been clear to a reasonable member of the tax 
commission that disqualifying Appellant's vehicles from the tax credit would 
violate Appellant's constitutional right to advertise that its vehicles 
qualified for the tax credit provided for in 68 O.S.Supp 2008, § 2357.22, and further that 
disqualifying Appellant's vehicles would somehow constitute retaliation against 
Appellant for advertising that its vehicles qualified.
¶9 Appellant has failed to demonstrate Appellees violated its clearly 
established right to freedom of speech in a manner that would enable Appellant 
to defeat Appellees' qualified immunity. Appellant has not demonstrated that 
reasonable government officials in Appellees' position would have thought they 
were impinging upon Appellant's freedom of speech by denying the tax credit to 
Appellant's customers based on Appellees' conflicting interpretation of the 
legislature's exclusionary language. At no point did Appellees take any action 
to affirmatively prevent Appellant from exercising its right to advertise 
freely, nor did they take any direct action against it as an entity at all. 
Appellees merely fulfilled their duty to interpret and apply a statutory 
provision granting a tax credit to certain types of LSVs and not to others. The 
fact that the Commission's interpretation was subsequently found to be in error 
would not invalidate the reasonableness of their earlier position, such as to 
prohibit the defense of qualified immunity: "[o]fficials are not liable for bad 
guesses in grey areas; they are liable for transgressing bright lines." 
Barnthouse, 2003 OK 42, ¶15, 73 P.3d 840, 847 (quoting Maciariello v. 
Sumner, 973 F.3d 295, 298 (4th Cir. 1992)).
¶10 Appellant also alleges that Appellees violated its right to equal 
protection of the laws as provided for in the United States Constitution by 
treating it, its products, and its customers differently under 68 O.S.Supp 2008, § 2357.22 than other dealers and 
customers, without any rational basis for the differential treatment.4 In order to defeat 
Appellees' qualified immunity, Appellant's right to have its vehicles treated 
the same as other LSVs with regard to the tax credit would need to be 
sufficiently clear that by interpreting the tax credit to exclude Appellant's 
vehicles, "every 'reasonable official would [have understood] that what he is 
doing violates that right.' " Reichle, 132 S. Ct.  at 2093 (quoting 
Anderson, 483 U.S. at 640). 
¶11 Title 68 O.S.Supp 2008, § 
2357.22(C) specifically carves out an exception to the tax credit: "The term 
'qualified electric motor vehicle property' shall not apply to vehicles known as 
'golf carts,' 'go-carts' and other motor vehicles which are manufactured 
principally for use off the streets and highways." It is not unreasonable or 
beyond debate for the officials charged with construing and applying 
68 O.S.Supp 2008, § 
2357.22(C) to find that certain types of vehicles fell within the exclusion and 
others did not. Appellant may not agree with the decision making criteria used 
by Appellants in making their determination, and they may believe that the 
determination was made as a result of budgetary pressure, but they have 
demonstrated no precedent indicating that by making a determination which 
vehicles were known as "golf carts," "go-carts" and other motor vehicles which 
are manufactured principally for use off the streets and highways, "it would be 
clear to a reasonable officer that his conduct was unlawful in the situation he 
confronted." Wilkie v. Robbins, 551 U.S. 537, 585, 127 S. Ct. 2588, 
2618 (2007).
CONCLUSION
¶12 The question of whether parties to a suit possess qualified immunity is a 
question of law, and we review it de novo. Barnthouse, 2003 OK 42, ¶20, 73 P.3d 840, 849; Mitchell, 472 U.S.  at 
528; 
Melton, 879 F.2d  at 726. As a matter of law, Appellees are entitled to 
the defense of qualified immunity. Appellees did not violate a clearly 
established constitutional right of Appellant by determining that language in 
68 O.S.Supp 2008, § 
2357.22(c) excluded Appellant's vehicles from the tax credit but did not exclude 
others. Appellees' decision, which resulted in the exclusion of certain types of 
vehicles from benefiting from the tax credit, including lines sold by Appellant, 
was based upon a reasonable interpretation of the statutory provisions. 
¶13 Even though Appellees' reasonable determination was subsequently found to 
be erroneous, it was not the stepping across a bright line that would prevent 
the application of sovereign immunity. See Barnthouse, 2003 OK 42, ¶15, 73 P.3d 840, 847. "Qualified immunity gives government 
officials breathing room to make reasonable but mistaken judgments about open 
legal questions, and when properly applied, it protects all but the plainly 
incompetent or those who knowingly violate the law." Ashcroft, 131 S. Ct. 
at 2085. Inasmuch as this Court has determined the defense of qualified immunity 
applies and is dispositive of the underlying action, the Court need not address 
the remaining issues. 
JUDGMENT OF THE TRIAL COURT IS AFFIRMED
¶14 ALL JUSTICES CONCUR 
FOOTNOTES
1 68 O.S.Supp 2008, § 2357.22 provides in pertinent 
part:
A. For tax years beginning before January 1, 2010, there shall be allowed a 
one-time credit against the income tax imposed by Section 2355 of this title … 
for investments in qualified electric motor vehicle property placed in service 
after December 31, 1995.….
C. As used in this section, "qualified electric motor vehicle property" means 
a motor vehicle originally equipped to be propelled only by electricity to the 
extent of the full purchase price of the vehicle; provided, if a motor vehicle 
is also equipped with an internal combustion engine, then such vehicle shall be 
considered 'qualified electric motor vehicle property' only to the extent of the 
portion of the basis of such motor vehicle which is attributable to the 
propulsion of the vehicle by electricity. The term "qualified electric motor 
vehicle property" shall not apply to vehicles known as "golf carts," "go-carts" 
and other motor vehicles which are manufactured principally for use off the 
streets and highways.
2 In Wilder v. Oklahoma Tax 
Comm'n, 2012 OK CIV APP 
91, --- P.3d ----, purchasers of certain Tomberlin LSVs, sought review of a 
decision by the Oklahoma Tax Commission that the LSVs they purchased did not 
qualify for the tax credit available under 68 O.S. Supp. 2008 §2357.22(c). The Court of Appeals 
reversed the decision of the Oklahoma Tax Commission, holding that because the 
Tomberlin LSVs were originally equipped for propulsion by electricity, 
manufactured principally for legal use on roads, and not manufactured 
principally for use off the streets and highways, they qualified for the tax 
credit. The Oklahoma Tax Commission appealed the decision of the Court of Civil 
Appeals and we denied certiorari on October 1, 2012.
Another case to come before the Court in this matter bears substantial 
similarities to this one. In Kemp et al. v. Hon. 
Roger H. Stuart, etc., District Court of Oklahoma 
County, State of Oklahoma, No. CJ-2011-6323, Petitioners Thomas Kemp, Jr., Jerry 
Johnson, Dawn Cash, and Rick Miller requested this Court assume original 
jurisdiction and issue a writ of prohibition, arguing they possessed qualified 
immunity from suit, after they were sued in their individual capacity by various 
LSV dealers asserting violations of their civil rights under 42 U.S.C. §1983, 
including violations of their First Amendment rights and denial of Equal 
Protection. We assumed original jurisdiction and issued a writ of prohibition on 
October 22, 2012, No. 110,767, dismissing all claims against the members of the 
OTC, finding that Kemp and the other members possessed qualified immunity. 
3 42 U.S.C. §1983 provides: 
Every person who, under color of any statute, ordinance, regulation, custom, 
or usage, of any State or Territory or the District of Columbia, subjects, or 
causes to be subjected, any citizen of the United States or other person within 
the jurisdiction thereof to the deprivation of any rights, privileges, or 
immunities secured by the Constitution and laws, shall be liable to the party 
injured in an action at law, suit in equity, or other proper proceeding for 
redress, except that in any action brought against a judicial officer for an act 
or omission taken in such officer's judicial capacity, injunctive relief shall 
not be granted unless a declaratory decree was violated or declaratory relief 
was unavailable. For the purposes of this section, any Act of Congress 
applicable exclusively to the District of Columbia shall be considered to be a 
statute of the District of Columbia. 
4 U.S. Const. amend. XIV, § 1 provides:
All persons born or naturalized in the United States, and subject to the 
jurisdiction thereof, are citizens of the United States and of the State wherein 
they reside. No State shall make or enforce any law which shall abridge the 
privileges or immunities of citizens of the United States; nor shall any State 
deprive any person of life, liberty, or property, without due process of law; 
nor deny to any person within its jurisdiction the equal protection of the 
laws.