Opinion ID: 2631829
Heading Depth: 2
Heading Rank: 2

Heading: tax commission ruling

Text: ¶ 21 The next issue is whether the Tax Commission erred in ruling Nebeker's action was barred by res judicata. The standard of review is statutory: When reviewing formal adjudicative proceedings commenced before the commission, the Court of Appeals or Supreme Court shall: (a) grant the commission deference concerning its written findings of fact, applying a substantial evidence standard on review; and (b) grant the commission no deference concerning its conclusions of law, applying a correction of error standard, unless there is an explicit grant of discretion contained in a statute at issue before the appellate court. Utah Code Ann. § 59-1-610 (2000). ¶ 22 We outlined the law relating to res judicata in Macris & Associates., Inc. v. Neways, Inc. as follows: The doctrine of res judicata embraces two distinct branches: claim preclusion and issue preclusion.... Claim preclusion involves the same parties or their privies and also the same cause of action, and this precludes the relitigation of all issues that could have been litigated as well as those that were, in fact, litigated in the prior action. ... Issue preclusion, on the other hand, arises from a different cause of action and prevents parties or their privies from relitigating facts and issues in the second suit that were fully litigated in the first suit. ... Therefore, while both branches of res judicata serve[] the important policy of preventing previously litigated issues from being relitigated, different rules govern each branch. 2000 UT 93, ¶ 19, 16 P.3d 1214 (citations omitted). In this case, the Tax Commission's dismissal relied on the theory of claim preclusion. ¶ 23 Although initially developed with respect to the judgments of courts, the same basic policies, including the need for finality in administrative decisions, support application of the doctrine of [claim preclusion] to administrative agency determinations. Salt Lake Citizens Congress v. Mountain States Tel. & Tel. Co., 846 P.2d 1245, 1251 (Utah 1992) (citing 4 Kenneth C. Davis, Administrative Law Treatise § 21:9, at 78 (2d ed.1983) and Jeffries v. Glacier State Tel. Co., 604 P.2d 4, 8-9 (Alaska 1979)). While claim preclusion applies to proceedings before administrative agencies, such as the Tax Commission, application of that principle presupposes the agency has the jurisdiction to resolve the issue. Claim preclusion is premised on the principle that a controversy should be adjudicated only once. Id. at 1251. Yet, if the agency lacks jurisdiction, it cannot adjudicate the issue at all. In this case, for instance, even if Nebeker had presented the constitutional issue in the original proceeding, the Tax Commission could not have resolved that question as it lacks the authority to determine constitutional questions. See Johnson, 621 P.2d at 1237. However, as noted earlier, the Tax Commission could have resolved the dispute on other grounds, nullifying the need to address the constitutional claims at all. Yet, it remains that the constitutionality of IFTA could not have been litigated on the merits in the first proceeding before the Tax Commission. Therefore, the Tax Commission erred in ruling Nebeker's action was barred by res judicata. ¶ 24 Nevertheless, the constitutional challenge was the sole claim brought before the Tax Commission in this second proceeding. Because the issue was not within the Tax Commission's jurisdiction, the Tax Commission should have dismissed the action for lack of jurisdiction. See Blaine Hudson Printing v. State Tax Comm'n, 870 P.2d 291, 292 (Utah Ct.App.1994) (Without subject matter jurisdiction, the ... agency lacks the power to do anything beyond dismissing the proceeding.). Accordingly, we affirm the Tax Commission's dismissal of the action although not on the grounds on which the Tax Commission relied. [5]