Opinion ID: 4249806
Heading Depth: 1
Heading Rank: 4

Heading: Nature of Issue Presented.

Text: Before we address the constitutionality of section 477A.7(5), we emphasize the issue presented involves taxes that were not authorized at the time they were exacted by the municipalities, 4 but which could have been authorized by the state. See Iowa Const. art. III, § 38A (“Municipal corporations are granted home rule power and authority . . . except that they shall not have power to levy any tax unless expressly authorized by 4As this case is before the court on interlocutory appeal, there has yet to be a final determination on the validity of the franchise fees assessed and collected by the municipality. For purposes of our review of the city’s motion for partial summary judgment, however, we assume the five percent franchise fee exceeded the cost of regulation and so, as to such excess, was not authorized. 7 the general assembly.” (Emphasis added.)). Therefore, we are not faced with a situation in which the legislature attempted to ratify or cure a tax that it lacked the underlying power to authorize. As we held in Kragnes, the defect in the city’s imposition of a tax on cable television services was simply its lack of legislative authority to do so. See Kragnes, 714 N.W.2d at 641 (declaring similar charge on gas and electric services to be an unauthorized and illegal tax). Consequently, this case involves not the collection of taxes that government for constitutional reasons lacks the power to impose in some or all instances, but instead involves local taxes that the state has the power to authorize. In other words, this case and others like it do not involve battles between taxpayers and municipalities regarding the inherent power of government to tax. Instead, the real conflict in this case is between the city and state government as reflected in legislation regarding the authority of municipalities to impose certain fees. In the end, the fundamental issue presented is whether the state as principal could exercise its power to ratify the unauthorized, but otherwise constitutional, acts of its political subdivisions. We turn now to a review of the principles that control our resolution of this issue. V. General Principles Governing Substantive Due Process Claims. To the extent that legislation is made retroactive, it is not inherently unconstitutional. As this court has noted with respect to retroactive laws in general, “ ‘In the absence of an express constitutional inhibition retrospective laws are not prohibited as such.’ ” State ex rel. Turner v. Limbrecht, 246 N.W.2d 330, 334 (Iowa 1976) (quoting 73 Am. Jur. 2d Statutes § 347, at 485–86), overruled on other grounds by State ex rel. Miller v. Hydro Mag, Ltd., 436 N.W.2d 617, 622 (Iowa 1989); 8 accord 2 Norman J. Singer & J.D. Shambie Singer, Statutes and Statutory Construction § 41:3, at 398 (7th ed. 2009) [hereinafter Singer on Statutory Construction] (“The fact that a statute is retroactive is not sufficient by itself to invalidate it.”). The “express constitutional inhibition” claimed by the plaintiff in this case is the Due Process Clause. The plaintiff asserts the Due Process Clause is violated because the legislature’s ratification of the franchise fee deprives cable subscribers of a vested right to a refund of the illegally imposed fees, and the five-andone-half-year period of retroactivity exceeds that which is constitutionally permitted. 5 These arguments implicate substantive due process. 6 See State ex rel. Miller v. Smokers Warehouse Corp., 737 N.W.2d 107, 111 (Iowa 2007) (concluding defendants asserted substantive due process claim because “they do not discuss any notice or hearing deficiencies”). Generally speaking, “[s]ubstantive due process principles preclude the government ‘from engaging in conduct that “shocks the conscience,” or interferes with rights “implicit in the concept of ordered liberty.” ’ ” Atwood v. Vilsack, 725 N.W.2d 641, 647 (Iowa 2006) (considering state due process claim) (quoting United States v. Salerno, 481 U.S. 739, 746, 107 S. Ct. 2095, 2101, 95 L. Ed. 2d 697, 708 (1987)); see also Blumenthal Inv. Trusts v. City of W. Des Moines, 636 N.W.2d 255, 265 (Iowa 2001) (noting it “is not easy to prove” a substantive due process 5The parties agree the plaintiff’s refund claims are governed by a five-year statute of limitations. See Iowa Code § 614.1(4) (2005). 6The plaintiff relies on both the Federal Constitution and our state constitution. See U.S. Const. amend. V; Iowa Const. art. I, § 9. The plaintiff does not suggest we should employ a different standard under the Iowa Constitution than we use for its federal counterpart. Although we make no distinction in our discussion of the plaintiff’s due process argument between the state and federal constitutional claims, we preserve our exclusive prerogative to determine the constitutionality of an Iowa statute challenged under the Iowa Constitution. Callender v. Skiles, 591 N.W.2d 182, 187 (Iowa 1999). 9 violation because “ ‘substantive due process is reserved for the most egregious governmental abuses against liberty or property rights’ ” (quoting Rivkin v. Dover Twp. Rent Leveling Bd., 671 A.2d 567, 574–75 (N.J. 1996))). A substantive due process analysis begins with an identification of the nature of the right at issue, as that determines the test to be applied. . . . When . . . a fundamental right is not involved, the Due Process Clause “demands no more than a ‘reasonable fit’ between government[al] purpose . . . and the means chosen to advance that purpose.” Smokers Warehouse Corp., 737 N.W.2d at 111 (citation omitted) (quoting Reno v. Flores, 507 U.S. 292, 305, 113 S. Ct. 1439, 1448–49, 123 L. Ed. 2d 1, 18 (1993)). As noted earlier, the plaintiff claims he was deprived of his right to a refund of fees imposed in excess of the city’s authority. The plaintiff’s right to a refund is not a fundamental right, and therefore, there need only be a “reasonable fit” between the legislature’s purpose in ratifying the past imposition of franchise fees and the means chosen to advance that purpose. See Home Builders Ass’n of Greater Des Moines v. City of W. Des Moines, 644 N.W.2d 339, 353 (Iowa 2002) (holding imposition of unauthorized fee did not infringe on a fundamental right, so rationalbasis test applied). Additionally, we must presume the 2007 enactment is constitutional. Smokers Warehouse Corp., 737 N.W.2d at 111. This deferential standard is particularly appropriate when we consider the constitutionality of economic legislation. Fed. Land Bank of Omaha v. Arnold, 426 N.W.2d 153, 156 (Iowa 1988). Moreover, the “strong deference” accorded economic legislation “is no less applicable when that legislation is applied retroactively.” Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 729, 104 S. Ct. 2709, 2717, 81 L. Ed. 2d 601, 10 611 (1984), superseded by statute on other grounds as stated in Orrego v. 833 W. Buena Joint Venture, 943 F.2d 730, 735 n.7 (7th Cir. 1991). It is the plaintiff’s burden to prove the legislature’s act is unconstitutional by negating “ ‘every reasonable basis upon which the [act] may be sustained.’ ” Exira Cmty. Sch. Dist. v. State, 512 N.W.2d 787, 793 (Iowa 1994) (quoting Kent v. Polk County Bd. of Supervisors, 391 N.W.2d 220, 225 (Iowa 1986)).