Court Opinion

ID: 9596745
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:52:41.517776+00
Date Added: 2024-06-11T18:01:36.001300
License: Public Domain

Annabelle Clinton Imber, Justice, concurring. I agree with the majority’s conclusions but write separately because this case presents us with the opportunity to clarify to what extent the notice provisions of Rule 23(c) serve as a rule of procedure in an illegal-exaction lawsuit. Rule 23(c) provides in pertinent part: (c) Notice. In any class action in which monetary relief is sought, including actions for damages and restitution, the court shall direct to the members of the class the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort. The notice shall: (1) describe the action and the members’ rights in it; (2) advise each member that the court will exclude the member from the class if the member so requests by a specified date; (3) advise each member that the judgment, whether favorable or not, will include all members who do not request exclusion; and (4) state that any member who does not request exclusion may, if the member desires, participate in the litigation, either in person or through counsel. Ark. R. Civ. P. 23(c) (2002). (1) Notice Shall Describe the Action and the Members’ Rights in It The first requirement of notice applies in an illegal-exaction lawsuit because all class members should be notified of the nature of the action and their rights in it. This does not change simply because the class arises by virtue of Article 16, section 13 of the Arkansas Constitution. (2) Notice Shall Advise Each Member That the Court Will Exclude the Member from the Class If the Member So Requests by a Specified Date The second requirement does not directly apply to an illegal-exaction lawsuit. The majority correctly concludes that taxpayers cannot opt out of an illegal-exaction suit. However, this court recognizes the common-law voluntary-payment rule, i.e. “[w]hen one pays money on demand that is not legally enforceable, the payment is deemed voluntary. Absent fraud, duress, mistake of fact, coercion, or extortion, voluntary payments cannot be recovered.” Douglas v. Adams Trucking Co., Inc., 345 Ark. 203, 212, 46 S.W.3d 512, 518 (2001). We have consistently applied the voluntary-payment rule to cases of illegal exaction: The reasoning underlying the common-law [voluntary-payment] rule is that governmental entities budget annually and ordinarily spend revenues within each tax year. When the government is on notice that it may be required to refund those taxes, it can make allowance for a possible refund. See Mertz v. Pappas, 320 Ark. 368, 896 S.W.2d 593 (1995) (citing Hercules, Inc. v. Pledger, 319 Ark. 702, 894 S.W.2d at 578 (1995)). However, if the governmental entity allowed refunds for taxes voluntarily paid in previous years, current and future funds might be required to make the refund and governmental operations would be jeopardized. Id. Oxford v. Perry, 340 Ark. 577, 582, 13 S.W.3d 567, 570 (2000). In the instant case, or in any case of an illegal-exaction lawsuit, a taxpayer can declare that he or she has paid the taxes in question voluntarily and waives any right to a refund. Because the taxing unit is not required to refund taxes voluntarily paid, the refund that would have been due to the taxpayer would not be included in the common fund in the event that the plaintiffs prevail in the action. Therefore, while it would be incorrect to tell a taxpayer that he or she can opt out of an illegal-exaction lawsuit, it would be proper to inform a taxpayer of the right to waive a refund. (3) Notice Shall Advise Each Member That the Judgment, Whether Favorable or Not, Will Include All Members Who Do Not Request Exclusion The third requirement of notice applies to an illegal-exaction lawsuit, although the reference to all members “who do not request exclusion” is irrelevant. As has already been mentioned in connection with Rule 23(c)(2), there is no right to opt out of an illegal-exaction suit. Thus, the notice required by Rule 23(c)(2) must advise each member that the judgment will include all members of the class, none of whom may opt out. In other words, all class members have the right to know that the action will be binding on them. This is even more important in an iEegal-exaction case because, as the majority points out, the class members would be foreclosed by the doctrine of res judicata from filing individual suits later to assert their rights for the same aEeged iEegal exaction. (4) Notice Shall State That Any Member Who Does Not Request Exclusion May, If the Member Desires, Participate in the Litigation, Either in Person or Through Counsel The fourth notice requirement also applies to an iEegal-exaction lawsuit because the class members need to be informed of the right to intervene and participate in the litigation if they conclude their rights are not being adequately protected by the named class representatives or class counsel. Once again, the reference to any member “who does not request exclusion” is irrelevant in the context of an iEegal-exaction case. Glaze, J., joins in this opinion.