Opinion ID: 2716735
Heading Depth: 2
Heading Rank: 2

Heading: the counties have standing to seek declaratory relief

Text: ¶16 Even though we find that the Counties do not have statutory authority to prosecute violations of the DSTA, that does not necessarily mean that they do not have standing to bring this case. Although the OTC has primary responsibility for administration and enforcement of the DSTA, it does not have ultimate authority to determine when documentary taxes are due. This Court is the final arbiter of disputed tax matters. Okla. Const. art. VII, § 4; 68 O.S.2011 § 225 (taxpayer aggrieved by any order of the Tax Commission may appeal to Supreme Court), and § 3027(final orders from the Court of Tax Review may be appealed to the Supreme Court); Turner v. Oklahoma Tax Com'n, 1993 OK 77, 858 P.2d 433 (Legislature has made the Supreme Court the final arbiter of the meaning of tax statutes). Further, this Court has previously recognized the standing of parties to invoke this Court's jurisdiction and determine disputed tax matters even in the absence of statutory authority to do so. Oklahoma Tax Comm'n v. Smith , 1980 OK 74, 610 P.2d 794 (potential taxpayer could sue for declaratory relief where statutory remedy to sue for refund of tax paid was not available to challenge constitutionality of taxing statute before tax was due); Independent School District No. 9 v. Glass , 1982 OK 2, 639 P.2d 1233 (abrogated in part by constitutional amendment) (school district could seek injunction preventing payment of tax refund and challenge exemption claimed by a taxpayer). Finally, this Court has long-recognized the availability of its equitable powers to protect the public treasury from unlawful dissipation or management by those officially charged with the care and custody of public funds. Fent v. Contingency Review Bd. , 2007 OK 27, ¶ 8, 163 P.3d 512, 519 (citing Kellogg v. School Dist. No. 10 of Comanche County , 1903 OK 81, 74 P. 110). The question, therefore, is whether the Counties have demonstrated their standing to invoke the jurisdiction of Oklahoma courts in this case. ¶17 'Standing' is the right to commence litigation, to take the initial step that frames legal issues for ultimate adjudication by a court or jury. State ex rel. Bd. of Regents v. McCloskey Bros., Inc. , 2009 OK 90, ¶ 18, 227 P.3d 133, 144. The doctrine of standing identifies those disputes that are appropriately resolved through the judicial process. Fent , 2007 OK 27, ¶ 7, n.20, 163 P.3d at 519 (citing Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S. Ct. 2130, 2136 (1992)). Standing requires proof of: (1) a legally protected interest which must have been injured in fact- i.e., suffered an injury which is actual, concrete and not conjectural in nature, (2) a causal nexus between the injury and the complained-of conduct, and (3) a likelihood, as opposed to mere speculation, that the injury is capable of being redressed by a favorable court decision. Fent , 2007 OK 27, ¶ 7, 163 P.3d at 519 (citing Cities Serv. Co. v. Gulf Oil Corp. , 1999 OK 16, ¶ 3, 976 P.2d 545, 547, and Toxic Waste Impact Group, Inc. v. Leavitt , 1994 OK 148, ¶ 8, 890 P.2d 906, 910). The appropriate inquiry on a standing question is whether the plaintiff has in fact suffered injury to a legally protected interest as contemplated by statutory or constitutional provisions. Leavitt , 1994 OK 148, ¶ 9, 890 P.2d at 911. Standing is an aspect of justiciability, and focuses on the party seeking to get [a] complaint before the court and not on the issues tendered for determination. In standing problems the inquiry posed is whether the party invoking the court's jurisdiction has a legally cognizable interest in the outcome of the tendered controversy. Application of State ex rel. Dep't of Transp. , 1982 OK 36, ¶ 6, 646 P.2d 605, 609. ¶18 This Court dealt with a similar issue in Independent School District No. 9 v. Glass, 1982 OK 2, 639 P.2d 1233. Glass involved a suit by a school district challenging a refund payable as the result of a tax exemption claimed by a taxpayer. The taxpayer's property was located in the school district and granting the exemption would directly reduce the revenue received by the district. Cf ., Indep. Sch. Dist. No. 5 of Tulsa County v. Spry , 2012 OK 98, 292 P.3d 19 (school districts lacked standing to challenge voucher program where funds at issue were part of legislative appropriation rather than taxes paid by school district taxpayers). The board of tax-roll corrections granted the taxpayer's request and the school district sued to enjoin payment of the refund. As in this case, the taxing statute in Glass did not authorize enforcement by the school district. That remedy was available only to the taxpayer or the county assessor. See 68 O.S. Supp. 1974 § 2479. Nonetheless, this Court held that injunctive relief was available because the statutory remedy was not. We agree with the District that it has standing to seek injunctive relief. The District has an interest in the subject matter, the capacity to sue, and the power to protect and prevent the wrongful disposition of revenues. Glass , ¶ 11, 639 P.2d at 1238. ¶19 Even though the school district in Glass was ultimately unsuccessful in preventing the tax refund, as relevant to the standing issue in this case, Glass is indistinguishable. The Counties have the capacity to sue. The statutory remedy for direct enforcement of the DSTA is not available to the Counties. However, the relief sought by the Counties is not limited to collection of the allegedly unpaid documentary taxes. The Counties also seek an [a]djudication by the Court that documentary stamp taxes are due pursuant to 68 O.S. § 3201 [and] . . . that exemptions from the purchase of documentary stamps made by the defendants pursuant to 68 O.S. § 3201 were [not] lawful. When statutory relief is inadequate, equitable relief may be available. See Oklahoma Tax Comm'n v. Smith , 1980 OK 74, 610 P.2d 794. The non-monetary relief sought by the Counties in this case is authorized by Oklahoma's declaratory judgment law, Title 12 O.S.2011 §§ 1651 to 1657. A determination of rights, status, or other legal relations may be obtained by means of a pleading seeking that relief alone or as incident to or part of a petition, counterclaim, or other pleading seeking other relief . . . . 12 O.S.2011 § 1652. ¶20 The proof required for the Counties' to establish their right to pursue declaratory relief is set out in Gordon v. Followell , 1964 OK 74, ¶ 8, 391 P.2d 242, 245: The requisite precedent facts or conditions which the courts generally hold must exist in order that declaratory relief may be obtained may be summarized as follows: (1) there must exist a justiciable controversy; that is to say, a controversy in which a claim of right is asserted against one who has an interest in contesting it; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy, that is to say, a legally protectible interest; and (4) the issue involved in the controversy must be ripe for judicial determination. Here, the Counties are entitled to $0.2275 of each $0.75 in documentary stamps sold. The exemptions claimed with respect to the conveyances at issue in this case deprive the Counties of the documentary tax related to the transactions involved in this appeal. And, a determination that the Defendants are claiming the exemptions in violation of the DSTA is likely to result in the Counties' receipt of the taxes for which they filed this case. A violation of a state statute is an injury to the State and its citizens. A continuing violation is an irreparable injury for which injunctive relief is available. Glass , ¶ 10, 639 P.2d at 1237. We agree with the Counties; they have a legally cognizable interest in the outcome of this litigation and have established their standing to pursue declaratory relief. If standing exists, the case must proceed on the merits. Id. 5