Opinion ID: 2633444
Heading Depth: 2
Heading Rank: 1

Heading: The class action in tax cases.

Text: ¶ 8 The court of appeals was correct in relying on the Arena decision for the principle that class actions may be pursued against government entities in Arizona. See Arena, 163 Ariz. at 426, 788 P.2d at 1177. In Arena, a case in which class representatives sought refund of excessive building permit fees paid to Pima County, we stated that [w]e will not read the absence of express [statutory] authorization as a preclusion against class claims, ultimately holding that A.R.S. § 12-821, the statute governing claims against government entities, does not bar class actions against public entities. Therefore, a claim against a public entity may be presented as a class claim. Id. at 426, 788 P.2d at 1177. Despite the fact that Arena concerned refunds under the general governmental claim statute rather than under the statute governing tax claims, its rationale is applicable by analogy in the tax scenario; neither the tax statutes nor the claim statute in effect at the time of Arena addressed the subject of class actions. [4] Moreover, ADOR is as much a public entity as is Pima County, which was the principal defendant in Arena. In either scenario, class actions provide benefits to both claiming and defending parties and serve as a practical tool for resolving multiple claims on a consistent basis at the least cost and with the least disruption to an overloaded judicial system. Id. at 425, 788 P.2d at 1176. The lack of any express preclusion in the tax code, coupled with the fact that ADOR is a public entity, lends firm support to the argument that Ladewig's lawsuit was properly certified as a class action under Arena. So also does the fact that both the claim statute and the tax refund statute require that the claimant exhaust administrative remedies. ¶ 9 ADOR is quick to point out that no Arizona law or regulation expressly authorizes class actions in tax court; however, it fails to recognize the counterpoint made in Arenabecause nothing in Rule 23 expressly precludes use of the class action device in tax cases, it is presumptively available in such cases. Furthermore, as noted by the court of appeals, the Arizona legislature has implicitly endorsed the application of Rule 23 in tax court proceedings. See A.R.S. § 12-166 ([P]roceedings in the tax court shall be governed by the rules of civil procedure in the superior court.). We presume the legislature was aware of the class action rule when it enacted A.R.S. § 12-166. See State v. Garza Rodriguez, 164 Ariz. 107, 111, 791 P.2d 633, 637 (1990); Daou v. Harris, 139 Ariz. 353, 357, 678 P.2d 934, 938 (1984). In the absence of ambiguous statutory language or manifest legislative intent to the contrary, courts should look to the plain meaning of the words as enacted. See Mail Boxes Etc., U.S.A. v. Indust. Comm'n, 181 Ariz. 119, 121, 888 P.2d 777, 779 (1995) (unambiguous language is normally conclusive, absent a clearly expressed contrary legislative intent.). ADOR has not pointed to any textual ambiguity in A.R.S. § 12-166, nor has it cited any contrary legislative history. Moreover, it has failed to offer any convincing argument that Rule 23 should not be applied in our tax courts. [5] As a matter of policy, we see no reason to set up unnecessary obstacles for those seeking to require the state to refund taxes collected in violation of the constitution. Further, insofar as recognition of class actions is a procedural rather than substantive matter, the formulation and application of Rule 23 is left to us by our constitution. See Ariz. Const. art. VI, § 5(5); see also State v. Jackson, 184 Ariz. 296, 298, 908 P.2d 1081, 1083 (App.1995) (supreme court has exclusive power to promulgate procedural rules). Thus, we agree with the court of appeals on this issue and hold that Arizona law permits class action lawsuits in tax court. [6]