Court Opinion

ID: 9568653
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:06:12.80249+00
Date Added: 2024-06-11T10:54:00.363553
License: Public Domain

HARTZ, Chief Judge (dissenting). (41) I express no view on the substantive law set forth in the majority’s opinion. I think it inappropriate to address those issues because this Court has no jurisdiction to hear the appeal. As explained below, the right to appeal from decisions of a hearing officer for the Taxation and Revenue Department is limited to final orders that resolve how much, if any, tax is owed by the taxpayer. No final order has been entered by the hearing officer in this case. (42) The matter before the hearing officer was Taxpayer’s administrative protest to the Department’s estimated provisional assessment of income tax, penalty, and interest for several tax years. The parties and the hearing officer agreed to bifurcate the hearing. First, the hearing officer would determine whether the 1992 settlement agreement was enforceable. If it was not enforceable, the hearing officer would then conduct a second proceeding to calculate the amount owed. Although the hearing officer ruled that the settlement agreement was unenforceable, the second proceeding has not been conducted. (43) Had the proceeding before the hearing officer been a judicial proceeding in district court, Taxpayer would have had no right to appeal prior to a ruling on the amount owed. Under what is known as the final-order rule, for a district court decision to be appealable as of right, it must be a final order or decision, meaning that it disposes fully of the case pending before the district court. See NMSA 1978, § 39-3-2 (Repl. Pamp.1991); Kelly Inn No. 102 v. Kapnison, 113 N.M. 231, 236, 824 P.2d 1033, 1038 (1992). (44) There are sound reasons to grant the right to appeal only to final orders and decisions. The final-order rule promotes overall efficiency in the judicial system. It prevents delay caused by piecemeal appeals and avoids appellate review of issues that may be mooted by later events. This case is an object lesson. A little less than a year after the hearing officer ruled that the settlement agreement was invalid, this Court rules that he was correct. Even if there is no motion for rehearing or petition for a writ of certiorari, the interruption in the proceedings before the hearing officer will be well over a year. What can be expected after the matter is returned to the hearing officer? The hearing officer may issue ah opinion that is appealed by either Taxpayer or the Department. In that event, the parties will have experienced the delay and added expense of piecemeal appeals. Or the hearing officer’s final decision may be sufficiently tolerable to both parties that there is no appeal. Indeed, the result may be so satisfactory to Taxpayer that it would not want to appeal even if it could still pursue its settlement-agreement argument on appeal. In that event, this appeal was unnecessary. (45) To be sure, occasionally the judicial process is expedited by an appeal from a non-final order. For example, if this Court had ruled in favor of Taxpayer with respect to the settlement agreement, the case would be resolved and both the parties and the hearing officer would be spared the need to litigate the amount owed. But experience, such as our experience in this case, demonstrates that the advantages of the final-order rule far outweigh its disadvantages. See Baca v. Atchison, Topeka & Santa Fe Ry. Corp., 121 N.M. 734, 918 P.2d 13 (Ct.App.), cert. quashed, 121 N.M. 783, 918 P.2d 369 (1996). (And the disadvantages could be reduced substantially if the legislature were to enact a statute granting the appellate court discretion to hear interlocutory appeals from administrative tribunals when the tribunal and the court believe that appellate resolution of the interlocutory order will expedite the litigation. See NMSA 1978, § 39-3-4 (Repl.Pamp.1991) (governing interlocutory appeals from lower courts); Rule 12-203 NMRA 1997 (same); cf. Sanchez v. Bradbury & Stamm Constr., 109 N.M. 47, 781 P.2d 319 (Ct.App.1989) (no statutory authority for interlocutory appeals in workers’ compensation cases).) (46) Regardless of the merits of the final-order rule, however, perhaps the New Mexico legislature has not imposed the rule on appeals from the Department to this Court. In a memorandum filed while this appeal was pending on our summary calendar, see Rule 12-210(D) NMRA 1997 (rule describing summary calendar), Taxpayer pointed out that the applicable statute makes no mention of finality. NMSA 1978, § 7-l-25(A) (Repl. Pamp.1995), states: If the protestant or secretary is dissatisfied with the decision and order of the hearing officer, the party may appeal to the court of appeals for further relief, but only to the same extent and upon the same theory as was asserted in the hearing before the hearing officer---- All such appeals to the court of appeals shall be taken within thirty days of the date of mailing or delivery of the written decision and order of the hearing officer to the protestant, and, if not so taken, the decision and order are conclusive. (47) Nevertheless, I would hold that finality is required. Federal law is instructive. Before Congress enacted the Administrative Procedure Act (APA) fifty years ago, the self-imposed policy of the courts was to limit judicial review to final orders. See Carter/Mondale Presidential Comm. v. Federal Election Comm’n, 711 F.2d 279, 285 n. 9 (D.C.Cir.1983) (quoting Final Report of the Attorney General’s Committee on Administrative Procedure, Administrative Procedure in Government Agencies, S. Doc. No. 8, 77th Cong., 1st Sess. 85 (1941)). The United States Supreme Court continues to adopt that approach. In Bell v. New Jersey, 461 U.S. 773, 103 S.Ct. 2187, 76 L.Ed.2d 312 (1983), the appeal was pursuant to either 20 U.S.C. Section 2851 or 20 U.S.C. Section 1234d. The unanimous Court wrote: The first provision permits judicial review in the courts of appeals of the Secretary’s final action with respect to audits, and the second permits judicial review in the courts of appeals of actions of the Board. Although only [Section 2851] explicitly requires “final” action, we think that a final order is necessary under either section. The strong presumption is that judicial review will be available only when agency action becomes final, and there is nothing in [Section 1234d] to overcome that presumption. Id. at 777-78, 103 S.Ct. at 2190-91 (emphasis added) (citations omitted); see generally 16 Charles Alan Wright, Arthur R. Miller and Edward H. Cooper, Federal Practice and Procedure § 3942 (1996). (48) Taxpayer’s memorandum points to more recent language by the Supreme Court that could be interpreted as saying that finality is required only when the governing statute expressly so provides. In Lujan v. National Wildlife Federation, 497 U.S. 871, 882, 110 S.Ct. 3177, 3185, 111 L.Ed.2d 695 (1990), the majority said: When, as here, review is sought not pursuant to specific authorization in the substantive statute, but only under the general review provisions of the APA, the “agency action” in question must be “final agency action.” See 5 U.S.C. § 704 (“Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.”). One might infer that the APA does not impose the final-order rule on appeals from “[a]gency action made reviewable by statute.” 5 U.S.C. § 704. But Lujan had no occasion to address whether to continue to recognize a “strong presumption” of finality. It would be remarkable if the above-quoted single sentence in Lujan were intended to overturn the longstanding doctrine unanimously followed in Bell just seven years earlier. On the contrary, I would expect the Supreme Court to agree with the scholarly and thoughtful opinion of Judge Wald in Carter/Mondale Presidential Committee, which noted that “courts commonly impose a finality requirement where statutes simply provide for judicial review of agency actions” and that “[n]othing in the legislative history of the APA suggests that a statute that simply states /.. that any agency action is reviewable, has displaced the finality test.” 711 F.2d at 285 n. 9. The opinion concluded that Congress “assumed that ‘[a]gency action made reviewable by statute’ would be final action.” Id. at 284 n. 9 (quoting the APA, 5 U.S.C. § 704.) (49) Of course, federal law can only be persuasive. New Mexico may follow a different course. The majority’s opinion, relying on In re Application of Angel Fire Corp., 96 N.M. 651, 634 P.2d 202 (1981), believes that to be the case. In Angel Fire our Supreme Court held that an appeal from the state engineer to the district court had not been timely. The state engineer had issued an order on September 22,1980 and then filed a modified order on October 28 after one of the parties had petitioned for modification on October 1. The party challenging the state engineer did not accomplish all the steps necessary for perfecting an appeal until October 30. The Court ruled that the challenger was too late to appeal the September 22 order. Its complete explanation was as follows: The statutory requirements are clear. “[A]ny decision, act or refusal to act of the state engineer” may be appealed. § 72-7-1. Thus, there is no requirement of finality. In the posture of the present case, [the challenger] is therefore required to appeal separately from the September 22 order and the October 28 modification order if it contests each. Id. at 652-53, 634 P.2d at 203-04. Nevertheless, in the absence of any citation to authority by Angel Fire or any discussion in the opinion of why New Mexico would reject the traditional strong presumption in favor of the final-order rule, I am reluctant to read more into Angel Fire than is required by the precise holding of the ease. (50) Supporting this view is a more recent statement from the New Mexico Supreme Court. In New Mexico Industrial Energy Consumers v. New Mexico Public Service Comm’n, 111 N.M. 622, 629, 808 P.2d 592, 599 (1991), the Court wrote: “ ‘[A]n appellate court will not review the proceedings of an administrative agency until the agency has taken final action.’ Harris v. Revenue Div. of Taxation & Rev. Dep’t, 105 N.M. 721, 722, 737 P.2d 80, 81 (CtApp.1987).”1 The citation to Harris is particularly significant because in Harris this Court was interpreting the predecessor to the statute at issue on this appeal. The predecessor statute also contained no explicit finality requirement. The principal difference between that statute and the present one is that the predecessor statute provided for appeal from the decision rendered by the director of the Department, whereas the present statute provides for appeal from the decision rendered by the hearing officer.2  (51) Moreover, even in the absence of a presumption in favor of a finality requirement, the language of the statutes governing this case suggests such a requirement. The proceeding before the hearing officer was pursuant to NMSA 1978, Section 7-1-24 (Repl.Pamp.1995), which governs taxpayer protests to assessments by the Department. The statute requires the hearing officer to issue a written decision after the hearing. Section 7-l-24(H). “The written decision shall embody an order granting or denying the relief requested or granting such part thereof as seems appropriate.” Id. The statute governing appeals, § 7-l-25(A), then states: “If the protestant or secretary is dissatisfied with the decision and order of the hearing officer, the party may appeal to the court of appeals for further relief.” The statute refers to the decision and order, rather than a decision or order. The natural inference is that Section 7-l-25(A) is referring to the single, ultimate decision and order arising out of the proceedings before the hearing officer — that is, the written decision and order that grants or denies in whole or in part the relief requested, see § 7-l-24(H). The ruling appealed here did not dispose of the matter and thus did not constitute “the decision and order of the hearing officer.” (52)For the foregoing reasons, I respectfully dissent from the majority’s holding that we have jurisdiction to hear Taxpayer’s appeal.  . The predecessor statute, NMSA 1978, Section 7-l-25(A) (Repl.Pamp.1983), stated: A. If the protestant or claimant is dissatisfied with the action and order of the director after a hearing, he may appeal to the court of appeals for further relief, but only to the same extent and upon the same theory as was asserted in the hearing before the director____ All such appeals ... shall be taken within thirty days of the date of mailing or delivery of the written decision and order of the director to the protestant or claimant.