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A holding that Alabama’s largest county has been collecting an occupational tax repealed by the state legislature ten years ago constitutes another example of the Supreme Court of Alabama’s interpretation of that state’s separation-of-powers doctrine. In Jefferson County Commission v. Edwards,1 Alabama’s high court reached back a full decade to invalidate a trial court’s never-appealed ruling that a repealer of the tax was, itself, unconstitutional. The court held that whether the repealer had been passed with sufficient votes in the state legislature was a non-justiciable, political question and an impermissible exercise of legislative power. Because the trial court had no jurisdiction to review the repealer act on those grounds, its invalidation of the repealer was void, and therefore the repealer was effective in removing the county’s authority to impose the tax.

An Exquisitely Complex Sequence

The unanimous opinion,2 authored by Associate Justice Champ Lyons, is grounded on what he terms an “exquisitely complex sequence of legislative enactments and related litigation.”3 The story begins in 1967, when the Alabama Legislature first created authority for Jefferson County to levy an occupational tax, but only on persons who were not required to purchase state or local business licenses. In 1999, a Jefferson County judge hearing a taxpayer class action4 held the 1967 law to be violative of the federal Equal Protection Clause because of the exemptions for business license holders. The judge enjoined further collection of the tax unless the county began collecting it from everyone employed in the county, which the county promptly did.

Immediately thereafter, still in 1999, formerly-exempt taxpayers filed a class action5 arguing that because the legislative authorization for the tax excluded business-license holders, the county had no authority to include them. While that action was pending, the Alabama Legislature passed 99-406, which gave the county authority to levy a tax without exemptions for license holders, but did not repeal the 1967 authorization. Instead, it allowed the county to proceed under 99-406 if it wished, but made the decision to do so irrevocable. It also passed 1999-669 which expressly repealed the original 1967 act.

In early 2000, the Triantos trial court held the county had no legislative authority under the 1967 act to collect the tax from license holders, and also decided that the new grant of taxing authority (99-406) violated Alabama’s constitution on the basis of deficiencies in legal notices when the act was proposed.

In March of 2000, a third, separate action in the Jefferson County Circuit Court6 produced a ruling that 99669 (repealer of the 1967 act) was itself unconstitutional based on a fi nding that the repealer had not passed with enough votes to satisfy the applicable supermajority requirement.7 The Circuit Court interpreted the Alabama Constitution to require a vote of two-thirds of those present and constituting a quorum, rather than simply two-thirds of those actually voting as legislative rules allowed.

In April of 2000, the Alabama Legislature (via 2000-215) repealed again the 1967 law and repealed 99-406 (the alternative taxing authority held unconstitutional in Triantos), replacing them both with a new tax applicable only to counties with populations over 500,000 (this affected only Jefferson County at the time), and with no exemptions for business-license holders.

Still in 2000, however, the Jefferson County Circuit Court in a fourth case8 held 2000-215 unconstitutional because, as a local law, it could not contravene general laws, several of which prohibited imposition of county license/privilege taxes on people who paid such taxes to the state.

In 2001, the appeals from the Richards, Triantos and Izzi cases were decided by the Supreme Court of Alabama.9 In the consolidated appeal of Richards and Triantos, the court (1) overruled the holding in Richards and found the 1967 act free of constitutional infirmity on the Equal Protection issue; and (2) affirmed the holding in Triantos regarding the lack of legislative authority for the county to expand the tax to include business-license holders. In Izzi, the court affirmed the striking down of 2000-215 (the “replacement” tax) on grounds of deficient public notice.

So by 2001, once again only the 1967 act remained standing; or so it seemed. Jefferson County continued to collect the tax from those who held no exemption from it.

In 2005, however, the court decided Birmingham-Jefferson Civic Center Auth. v. City of Birmingham,10 and held, sua sponte, that Alabama’s judicial branch of government has no jurisdiction to interpret the Alabama Legislature’s rules and procedures insofar as the issue is whether, by application of those rules, a bill has garnered sufficient votes for passage. The court deemed such issues non-justiciable, political questions based on the Alabama Constitution’s grant of power to the Legislature to create its own procedural rules via the general separation-of-powers section.11

The Edwards class filed suit in 2007, arguing primarily that under the holding of Birmingham-Jefferson Civic Center Auth., the never-appealed trial court decision that invalidated the 1999 repealer of the 1967 tax (99-669) was a void judgment, issued by a court without subject-matter jurisdiction. Accordingly, they claimed, the 1967 tax had been validly repealed in 1999. On January 12, 2009, the trial court granted summary judgment to the plaintiffs.

Separation Of Powers And Strict Constitutional Construction

On Jefferson County’s appeal from the summary judgment, the Supreme Court of Alabama addressed six issues: (1) subject-matter jurisdiction of courts to review legislative procedures; (2) whether a court usurps legislative powers if it looks beyond the plain meaning of a statute; (3) whether constitutional interpretations should ever be “prospective;” (4) whether the judgment in Richards (which challenged the 1967 act on Equal Protection grounds) precluded litigation of the 1999 repealer’s validity; (5) whether repeal of the tax violated the federal and state Contract Clauses (by impairing bond obligations); and (6) whether 99-406 (held unconstitutional for notice defects in Triantos) was in pari materia with 99-669 (the repealer) such that the unconstitutionality of 99-406 infected and invalidated 99-669 as well.

The court dispensed quickly with the res judicata argument, holding in essence that the Richards class was challenging the validity of the 1967 act, while the Edwards class sought a determination that the 1999 repealer was valid. Thus, the Richards judgment did not bar the Edwards claim.12

The Contract Clause and “pari materia” arguments failed on procedural grounds, the former because the county raised the argument for the first time on appeal, the latter because it failed to support the argument with citation to authority in its principal brief.

On the primary issue—whether the court could second-guess the Legislature on voting procedures—the court carefully distinguished between decisions regarding validity of the procedures themselves and decisions concerning whether the procedures had actually been followed. In discussing its prior holding on this point (in the Birmingham-Jefferson Civic Center Auth. case), the court noted that in the earlier case, “the Court did not have facts before it indicating that a majority was not attained under any rule or procedure utilized by the legislature.”13 Without deciding a case not before it, the court gave strong indications that it would not consider itself to be without jurisdiction if asked to review whether the Legislature had followed its own procedures; i.e., if confronted with a situation in which simple math showed that, even under the Legislature’s practice of measuring a majority based on votes cast, no majority was obtained.14

Regarding the first scenario, however, the court was clear in holding that when the Jefferson County Circuit Court purported to interpret the supermajority requirement applicable to the 1999 repealer to require “yea” votes from two-thirds of those present and constituting a quorum as opposed to two-thirds of those actually voting, it had impermissibly transgressed the boundary between judicial and legislative functions such that its judgment was void for lack of subject-matter jurisdiction.15

On the statutory construction issue, the court adopted a similarly strict view of separation-of-powers. The county argued that the 1999 repealer should be interpreted to mean something other than what it said16 because the Legislature passed the act only to coerce Jefferson County into adopting a tax ordinance under its alternative legislative authority (99-406) and thus had no intent to actually deprive the county of taxing authority. The court rejected this, explaining that if a court looks beyond the plain meaning of legislative language in any situation other than one in which there is “no rational way to interpret the words as stated” it would be usurping the legislative function in violation of the separation-of-powers doctrine.17

And finally, on the issue of whether the court’s 2005 holding regarding the inability of courts to second-guess legislative voting rules should be deemed “prospective,” the Alabama Court turned to Justice Scalia for inspiration, adopting his reasoning in his concurrence in American Trucking Ass’ns, Inc. v. Smith;18 i.e., that because the Constitution does not change, and because the Constitution does not therefore conform to judicial decisions but rather judicial decisions should conform to the Constitution, “prospective only” application of constitutional interpretations “does not make sense.”19 On the basis of the above, the court ruled that the 1999 act of the legislature validly repealed the 1967 grant of authority to Jefferson County to impose an occupational tax.

* E. Berton Spence is an attorney in private practice in Birmingham, Alabama, primarily representing businesses in commercial and product-liability matters.

 

Endnotes

1  ____ So. 2d ____, Docket no. 1080496 (available on Westlaw ® at 2009 WL 2596483) (Ala. Aug. 25, 2009), reh’g denied, ____ So. 2d ____, Docket no. 1080496 (Ala. Sept. 18, 2009).

2  All six participating justices concurred.  Three others recused.  All three are or were residents of Jefferson County, and one of the three (Justice Woodall) decided two other cases that affected the Edwards outcome while he was a trial court judge in Jefferson County.

3  Edwards, 2009 WL 2596483 at *1.

4  Styled in the Circuit Court of Jeff erson County as Richards v. Jefferson County, this action was later appealed sub nom. Jefferson County v. Richards, 805 So. 2d 690 (Ala. 2001).

5  Triantos v. Jefferson County, consolidated on appeal into Jefferson County v. Richards, supra n.4.

6  Jefferson County Employees Association v. Jefferson County.

7  Because 99-669 was passed in a special legislative session called by the Governor for another purpose, it was subject to a two-thirds supermajority requirement under the Alabama Constitution.  See Edwards, 2009 WL 2596483 at *3.

8  Richards v. Izzi.

9  Richards and Triantos were consolidated as Jefferson County v. Richards, supra n.4; Izzi was styled Richards v. Izzi, 819 So. 2d 25 (Ala. 2001).

10  912 So. 2d 204 (Ala. 2005).

11  Ala. Const. art. I, § 43 states in pertinent part that “the judicial shall never exercise the legislative and executive powers, or either of them; to the end that it may be a government of laws and not of men.”

12  Edwards, 2009 WL 2596483 at *7.

13  Id. at *9.

14  Id. at *10.

15  Id. at *10-11.

16  99-669 stated, “Act 406 of the 1967 Regular Sessions (Acts 1967, p. 1031), relating to a license or privilege tax upon person engaging in certain business’ in Jefferson County, is repealed.”

17  Edwards, 2009 WL 2596483 at *12.

18  496 U.S. 167 (1990)

19 Edwards, 2009 WL 2596483 at *12 (quoting American Trucking, 496 U.S. at 201 (Scalia, J., concurring)).

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