thank you and mr osmond morning there's an old miller lite commercial with the beginning with the former mets player mark thrown very short and marvelous marv and he goes i don't know why i'm in this commercial and i keep looking at this case and i don't know why we're in this case i mean this just seems like a state law matter if it's reach should be resolved in the state law basis state authorities have weighed in states courts could weigh you and why are you before us judge i think it's a very apt question of the cases involving the online travel companies and municipal oxen occupancy taxes there's probably thirty of them all over the country i'm presently preparing for trial july nineteenth before the honorable judge moore in the southern district of florida on behalf of the county of mine row this is the only case that i'm aware of where the standing argument that was advanced by the township adopted verbatim which makes these defendants libel to my clients personally for these taxes they are personally liable under the statute to pay these taxes to my client they have an absolute statutory obligation to collect them from the customer at the time of the booking of the rental reconciled enabling act of the dichotomy between the three and one excuse me or how do about is the first class cities provision i think that that clearly illustrates why my client on behalf of the other municipality in the state or allowed to bring this action it's very interesting when you drill down into the first class statute there are two first class cities in the state of new jersey new york and jersey city that statute was passed in i believe one nine hundred eighty one and what it says is that the first class cities can collect either hire of the real property taxes or the municipal occupancy tax and it gave those first class cities the right judge to impose a much higher occupancy tax i think it's seven percent so what the first question is have is they can either get real estate taxes or the higher municipal occupancy tax and what it says in the statute it limits it's a limitation judge not a not something greater as judge lynn heiress interpret it because what it says it ok first class city you can do that you can get that higher occupancy tax but the only way you can collect it from that the tax scofflaw is a foreclosure proceeding and that's a lesser right then the common law right or the statutory right that my client has to sue these guys personally i don't have to foreclose the first class cities have to foreclose is that's a limitation when you look in the first class city statute this is the legislature said i'm going to give you the higher rate and you can get the most money but you could only for collect the debt and there's two sources those powers and respectively judge one heiress he he misinterpreted the want and i'll read it running it's forty calling forty eight desh one it's it's clear it's unequivocal it says was incorrect forty eight a dash two is the police power this is the general power in this a palette to enforce its ordinances and judge when i was thinking this morning about really that the essence of what i want to impress upon your honour's this morning and it is perhaps not the fairness principles you were talking about before but it really does get down to fairness and practical realities and common sense because although we're sitting here in this wonderful courtman the third circuit we've got to look at the common sense application of what  pass a tax statute but as we said our brief you can just send a nasty letter to these guys say you know you're delinquent please pay your taxes that's a legislative to come up with this language there it's vague they chose to include enforce vanderbilt and esteemed judge from the new jersey supreme court's history if that's good law judge my client has the power to collect that debt and this isn't too far from hey you remember what aig says is that frank aig was stealing from jersey city right there was no statute and they said he owes us this money it's unjust enrichment he took it from us that's we have unjust enrichment very different this is where where their head was or taking money that they're entitled to get back this is a case where the statute says for certain cities the director is makes the collection the director has determined that it isn't operable for this particular type of situation and therefore is not going to go after people and if they don't pay for it over to the attorney general why should you in effect you're asking us to overrule the director now now and that goes to the the letter that the defendant cited judge there is no way in my judgment respected that and ex parte letter that misstates the facts to a tax specialist in the department can have the force of law and override the legislature let me tell you what we do know is that the director hasn't come forward and you will do this my client has to be a party to any proceeding to collect these taxes but it seems a somewhat odd result that i'm owed the money it's a personal debt from the o t c to my client but i have no power other than to be a party in a pr book by someone else who will never get any of this money remember it's the state sales tax and the state i can see tax that the director the state keeps nothing this is if you look at the legislative history here this all goes to general municipal purpose actually let's pick up on that because maybe it's not preventable standing maybe it's actually capacity is sue under rule seventeen if you have to have according to right miller capacity is conceived  personal right to litigate and if under state law if you're being told that you don't have that personal right to litigate the personal right that right is the right of the director what gives you the capacity to say that we should overrule that determination i don't think it's an over ruling i mean i go contrary to the use of the director's never going to do anything because it doesn't really have any skin in the game he doesn't but  now what what then says that a federal court should say no they do have a right to collect  they were in force that assess that and then of course that i guess and when the statute just really talks about assessing it and the director said i don't think this is the kind of transaction this kind of method is is  purely in this instance a pastor we made that point he all he does it's collected the minister because it's one tax return ok the municipality has the authority under forty called forty eight s one end i would submit state law in the new jersey but i thought about this had we had we played it and made the director a nominal defendant with the result have been different we have to be the party to any lawsuit about these taxes if i had named or or sort of in a derivative capacity and that's the final point i want to make making the judge on my presentation is we didn't brief it but they made an argument under the will once that i'm asserting directors rights i'm really not i look at a model this morning if it's a question of third party standing maybe that's where you're going i think we have third party standing here legislature present the same dichotomy in that in the language not exactly but they made the argument that the county didn't have standing judge moore said no the county it's the counties money they obviously have standing to bring it will twenty three actually happened we're going to trial july nineteenth in that may please the court i'm jeffrey ross and i represent some of the up police in this case and i'll be arguing on behalf of all the athletes who can ask you questions you're going to the box and we all understand the issues we're kind of standing really talking about here this constitutional standing legislature tells us who has the right to bring this action and that clearly is an answer that it's the director of taxation that has to be standing under a statute then i mean that we do have cases like that where you know certain statutes give standing while i think it's the prevent standing concept and it's who has the legal right legal interest to bring this claim was which is what credentials danny talks about and then you look at what the legislative the enabling acts scheme has done in this case and the answer is very clear that the person who has the right to enforce collect and administer which i think is an important concept in this case the tax and what i mean by a minister is the director has the right and the where the city needs to be joined is in the situation where the person who is responsible for collecting the tax which we contest in this case is not us but the actual hotels would then join the city of when hearst in an action to collect that amount from the consumer that's why that provision deals with i think an action by the director to collect the tax from if it's if the director thought it was the online travel companies we think it should be the hotels but if there was a hotel that failed to pay the tax and the director was going to sue one of those hotels to collect the tax i don't think the statutory scheme requires the city of winners be joined in that that's just so we a consumer action which is not at issue in this case so your base your argument is as is that of the district court that there is a lack of prudential standing that's correct doesn't ring right because the judge said that lynn hearst was seeking to assert a third party's legal interest but this case involves the collection of allegedly unpaid occupancy taxes due to letters that's correct winners will be you know how it's not really suing for certainly a third parties right other than it's got a class action here but it's got its involved it stands to win or lose based on its argument that it is entitle to assess and have someone collect taxes that are not being currently collected well i think we have to look at who the legislature gave that ability to in the legal interest to bring that claim that answer is clearly the director of taxation and i haven't analyzed the standing issue or is that a capacity by you raise that i actually hadn't thought about that before you raised the during the city's presentation but i think that would be both i think the capacity to sue the answer that the legislature has clearly answered is the person proper party to bring this claim is the director of taxation and i want to go back to the administration of but i but the point is so so what is your argument standing that the liver says taxes are due to it lynn hurst and the judge says no they're really bringing up third party claims of the claims of third parties if they chose to make that my suv that means the director right the director is the person who the legislature gave the authority to bring in action to enforce when hurst's was ordinance while that maybe the monies would eventually be passed on to whimpers the legal right to bring that claim is clearly the director of taxation if you gave when hearst the right to sue which is what they're trying to claim here the in here right it would render meaningless the provisions in the ordinance that give the specific duty and responsibility to the director to administer collect and enforce the tax and as your authors have already pointed out when you look at the economy between those that the enabling act for the first class cities versus the second class it is it's very clear that they gave that right to the specifically to the cities and the  cities of the first class let me say this question here if you look at forty forty one it provides that new jersey municipalities with the power to enforce ordinance t manage regulate and control the finances and property of eunice ality does the tax that lyndhurst attempted to impose under the enabling act constitute finances or property could it fall within the ambit of the well i think there's two responses that first is the way that this report analyzes i do think this deals with more of the police powers and the ability for lyndhurst to manage its finances once it receives those finances and this is not dealing with the ability to actually impose a tax and enforce a tax and actually determine what the tax should be on which is what the director is been given the authority to do and secondly i think you have to read this ordinance in conjunction with the enabling act for cities of the second class and that enabling act is very clear as to what powerful given to him her first they gave one power to the city of one person that power was simply to an act  a hotel occupancy then it's pacifically gave this powers to administer kalac and in force if necessary the tax to the director of taxation that's the clear statutory scheme here that we have and i think you have to read  i don't think so i think the answer is the party who can resolve that question is clearly the director and if you look at the enabling act the enabling act gives the director of the authority all the powers that are due to the director under the state  sales and use tax that's incorporated into the enabling act with cities of second class and then the sales and use tax give the general powers of the director this is fifty four thirty to be dash twenty four section four and that says to prescribe methods for determining the amount of receipt amusement charges were read and this is the important part for determining which of them are taxable and what you're not taxable and then we also cite the a case which is a new jersey new jersey tax court case which we think is very important on this interpret in the same provision and the cow case as follows i conclude that the division of taxation has exclusive jurisdiction in the first instance to determine whether a transaction is taxable or not taxable and a term of the price in which that tax is calculated and term the correct amount of the tax and that is what we're her says trying to do by way of this l is to insert itself in what the legislature has given the exclusive jurisdiction to the director to make that determination and as we said in our papers the director we think has already made no terminations on that we that  online travel services are not subject to the state to and like to address i think the incentive issue first of all i think the incentive issue is somewhat irrelevant if there's a clear staff to or scheme which is what we have here but secondly i think the director of taxation has just as much an incentive if not more of an incentive to try to go after the online travel companies if there really is being a shorting of taxing which we disagree with as as winners points out there is have every incentive to try to go after us to try to collect that's that tax on a state wide basis as well as on behalf of the municipalities that it was then given the authority to  i think it's very clear here that we have a very clear statutory scheme as to who has the right the legal right to bring this action and that's the director and that is the administration collection and enforcement if necessary of that if you're correct just you're saying that sounds like a passerby i'm sorry if you are correct just you're saying that the question is who has the legal right that sounds like rule seventeen yeah and you know your honor on a c i haven't analyzed that in detail but i think you're right but i think it's also would deal with prudential standing because they are trying to certain legal right of the director who the state legislature clearly gave that and it almost sounds as if what you're asking us to do is to have a variation of production standing that would say that we as a matter of prudence are not going to find standing in situations where there are disputes in effect between state and local governments i think it's a little bit different in that it's when the state legislature is clearly side who has the right to do something i don't think courts step in and second guess that decision when it's very clear as to who has that right and i think this state legislative scheme in this case is very clear on that as to who should have been in the should be second guessed as to whether or not there should be even a dispute in this case i think there should be just because it's very clear as to who has that right and that's good i mean are you aware of any other cases that are out there in new jersey that a state court might be deciding this issue i'm not aware of any other cases in new jersey and i think just to address the issues of there are about probably the majority of them are in federal court there are few in the state court cases in which one of the are going to raise in this case is the exhaustion administrative remedies a lot of like the anaheim case the court in california said that the that the let these municipalities need to exhaust their ministry of remedies so they went through an administrative process and then there was an appeal if you will to the state courts after those administrative processes in that instance you have a couple of seconds to go what is your position as to the letter clearly the director's call as i talked about is to determine what is taxable i think what it is informative not dispositive of this issue but it's really informative the director has considered this issue has looked at this issue and has made a determination as to what it thinks that is if when her really disagrees with the position the director has taken its position is not to sue in federal court to try to overcome that decision it's to lobby the director to try to get the directors say listen you're relying on this we think this is wrong we think it was actually correct but if they do think it was wrong in any respect that their their remedy is really with the director and their whole fairness argument about how this is unfair we can't sue for our own taxes i think that too is an argument that should be to the legislature not a court if they really don't think that they should they should have the ability to sue to collect their own taxes a minister their own taxes and hire a staff to be able to do all these things if they really want  make sure that this is this is clear in my presentation the liability of these defendants for the unpaid taxes has never been adjudicated that's the substantive issue and the heart of the factual liability question we never got to in the district court and that's what we will be getting to when monro county and it's very simple they charge a customer to a meeting with the ok so we've never you do not need to resolve it but the monies that would be derived from the additional revenue are not the states they have no percentage of it is my client's money and if you go to the in a belly act and the ordinance there personal level to lyndhurst in the other minute for these monies respectfully just an heiress inverted the do not have to be explicitly granted immunity pouty it's inherent in new jersey constitution to sue and collect debts the legislature had to say that and i i'm i'm not think i'm getting it at least my view of the first class statute which is first class it's a limitation they didn't limit lyndhurst and say you can't sue to collect this debt also the argument that we're going to interfere with the administration here it's not really the way it works it's one tax return the director makes it he makes no also give us some support somewhere for the notion that tax and property are synonymous that i think that the money the money the money that they  i get that right that can be argued from any number of sources but hacks and probably i might my view of the tax is it's a tax on the transaction it do it it it's results in a monetary obligation from them to me that's a monetary debt involving the finances the price of the municipality so that's why i think perspective forty eight forty eight ish one does apply in the legislative history here so if these monies go right for general purposes there's no restrictions on what i can do with this money it's my money that they owe when hirst so that's why i do think forty colin forty eight s when does does apply in clearly it's not a police power that's too so i think the i don't think i know you want to look at what is it forty two is we're judged on ours when two we need to go there i think that you're right as you don't need to go there where i think i sense we're parting company in order to your benefit that's correct and that's the ultimate dispute that's what these cases ultimately get to some you know i will go one way or the other so i again i appreciate judge the opportunity to brief the a ship are going to thank you thank you t counsel the briefing again if you're going to submit anything should be submitted simultaneously by no later than four pm on friday june eighteenth i think both of you for very well presented arguments to take the ma