Opinion ID: 2604259
Heading Depth: 1
Heading Rank: 1

Heading: concerns about tax court methodology

Text: Both parties complain that the Tax Court ambiguously, arbitrarily, and incorrectly compromised the parties' opinions of value. UP's complaint is representative: The nature of the Tax Court's decision makes it difficult to    identify the errors with which Union Pacific is concerned in this appeal. The Tax Court did not wholly accept any valuation approach, did not set forth its own valuation model, and did not indicate how much weight it gave to any particular approach. The Department joins in criticizing what it characterizes as the Tax Court's failure to explain its value conclusions and [the Tax Court's decision] to arbitrarily compromise the parties' opinions of values. We reject the parties' claims that legal error has been committed in this regard. It could be argued that, because our review is de novo, we need not address those contentions. However, we think it appropriate to note that the degree of detail furnished by the Tax Court in its decision must be viewed with due regard for the task that the Tax Court faced. We already have indicated the enormous length of these proceedings and the record that they produced. [3] A detailed analysis of that record would run to hundreds of pages, as the length of the parties' trial briefs demonstrates. [4] The Tax Court issued a 41-page opinionno small effort in resolving the parties' dispute, particularly in the light of that court's significant burden of other cases. It is a good practice for the Tax Court (or any trial court) to explain itself as fully as circumstances will permit. See PP & L v. Dept. of Rev., 308 Or. 49, 59-60, 775 P.2d 303 (1989) (both reviewing court and the parties would be assisted in certain circumstances if the Tax Court would more fully explain its conclusions); United Telephone Co. v. Dept. of Rev., 307 Or. 428, 441-42, 770 P.2d 43 (1989) (reviewing court left to speculate as to precise analysis used by Tax Court). But the fact that the Tax Court could have provided many more pages of explanation of its view does not establish that the Tax Court committed legal error. The court explained, in its opinion, what it identified as the analytical weaknesses of the parties' positions. That was very useful to us. Had the court chosen to go on from there and identify its own methodology and assumptions, its work would have been even more useful. The Department also argues that, from the structure of the Tax Court's opinion, it appears that the court did not, at all times and with respect to all issues before it, require that UP show by a preponderance of the evidence that UP's arguments were correct. ORS 305.427 provides: In all proceedings before the tax court and upon appeal therefrom, a preponderance of the evidence shall suffice to sustain the burden of proof. The burden of proof shall fall upon the party seeking affirmative relief and the burden of going forward with the evidence shall shift as in other civil litigation. See also PP & L v. Dept. of Rev., supra, 308 Or. at 54-55, 775 P.2d 303 (discussing role of burden of proof). There is room from some of the language of the Tax Court's opinion to make the argument that the Department makes, but, when the entire opinion is read in context, we believe that it is clear that the Tax Court understood and applied the appropriate rules on burden of proof to the controversy before it. With respect to the case as it is presented in this court, we note only that, as to the claims that UP makes that would require a modification of the decision of the Tax Court, UP has the burden of proof by a preponderance of the evidence. We have required UP to meet that burden throughout our review of its evidence. As to the matters concerning which the Department asks this court to change the decision of the Tax Court or as to which it cross-assigns error, it is the Department that shoulders the burden of proof. See PP & L v. Dept. of Rev., supra, 308 Or. at 54-55, 775 P.2d 303 (discussing burden of proof). The Department makes one final methodological argument. It asserts that the Tax Court erred in ignoring the legal requirement that the court find a going-concern value for UP's unit of property. We find no such error, and, in any event, the decision that we make on de novo review includes a going concern value for UP. We turn next to UP's evidentiary concern with respect to its annual strategic plans.