* * CIVIL ACTION 2015CV * Plaintiffs seek equitable relief concerning the alleged misallocation of revenues

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1 IN THE SUPERIOR COURT OF FULTON COUN1Y STATE OF GEORGIA Fulton County Superior Court EFILEDRM Date: 12/31/ :33:30 AM Cathelene Robinson, Clerk GEORGIA MOTOR TRUCKING ASSOCIATION et al., Plaintiffs CIVIL ACTION 2015CV vs. JUDGE McBURNEY GEORGIA DEPARTMENT OF REVENUE and LYNETTE T. RILEY, in her official capacity as State Revenue Commissioner, Defendants ORDER GRANTING LEAVE TO INTERVENE Plaintiffs seek equitable relief concerning the alleged misallocation of revenues generated from certain taxes levied on the retail sale of motor fuel in Georgia. Defendants have filed a motion to dismiss, which is under advisement following a hearing on 22 December At that hearing, counsel for the Georgia Municipal Association, Inc., (GMA) was heard on GMA's motion to intervene in this action. Plaintiffs oppose intervention; Defendants do not. For the reasons set forth below, the Court GRANTS GMA's motion. Plaintiffs contend that 11 VI of IX of Article III of the Georgia Constitution requires that all revenues earned from taxes on motor fuel -- whether from the State motor fuel tax (O.C.G.A ) or from local sales and use taxes (O.C.G.A et seq.) -- be spent on maintaining and improving the State's roads and bridges. That is not the present state of affairs. Revenues from local sales and use taxes levied on retail motor fuel sales are collected by the State but ultimately remitted to the local jurisdictions (less a 1% processing fee), where they are put to a variety of uses -- to include, but not exclusively limited to, the maintenance and improvement of roads and bridges. If Plaintiffs are granted the relief they seek, one of three outcomes would ultimately ensue: (1) the counties and Page 10f6

2 municipalities would be required to spend the funds generated by their sales and use taxes only on road and bridge maintenance and improvement, (2) the counties and municipalities would be required to return the funds to the State so that they could be dedicated to the State Department of Transportation (for road and bridge maintenance and improvement), or (3) the State would need to contribute to the Department of Transportation an amount equal to the total amount collected by the counties and municipalities from their sales and use taxes on motor fuel that is not spent on road and bridge maintenance and improvement. And. if the Court is not prepared to grant such relief, Plaintiffs are asking at a minimum that the Court place all revenues generated by the local sales and use taxes in an escrow account so that they can be more easily redirected after a higher court determines their proper home and purpose. Defendants oppose any such relief. It is into this fray that GMA seeks to wade. Its motion to intervene presents two questions: first, does it have standing to intervene, and second, if so, should it be allowed to intervene? The Court answers both questions in the affirmative. Standing. The Court finds that GMA has associational standing in this matter. An association such as GMA has standing to take legal action -- here, to intervene -- on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization's purpose; and (3) [sic] neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit. Aldridge v. Georgia Hosp. & Travel Ass'n, 251 Ga. 234, 236 (1983), quoting Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343 (1976). GMA satisfies the Aldridge test. First, given that most forms of relief sought by Plaintiffs Page 2 of6

3 would eliminate (or restrict the use of) millions of dollars of tax revenues destined for GMA's many members, it is clear that GMA's members could seek to intervene on their own right. As for the second prong, GMA has proffered that its purpose is "improving municipal government" in our State. (GMA's motion at 1). Protecting a significant source of revenue for its members is consistent with (and germane to) GMA's purpose of improved municipal operations. Finally, GMA's proposed involvement in the instant litigation, in opposition to Plaintiffs' requests for prospective equitable relief, would not require the participation of any of GMA's individual members. Indeed, it would allow these concerned parties -- Georgia's many municipalities -- to be heard once and with a single voice, thereby "promot[ing] judicial economy [and] avoiding repetitive and costly separate actions." Aldridge, 251 Ga. at 236. Associational standing is particularly appropriate to recognize when the suit at issue demands -- as this one does -- some form of prospective relief that would impact an entire class of potential litigants. See Saw nee Elec. Membership Corp. v. Georgia Dep't of Revenue, 279 Ga. 22, (2005). Plainly the entire class of municipalities that collect sales taxes on retail motor fuel sales and spend those revenues on something other than road and bridge maintenance and improvement would be impacted by any grant of relief to Plaintiffs. GMA has standing to seek to intervene. Intervention. O.C.G.A establishes the parameters for intervention in a civil action. Intervention is either "of right" or permissive. Under the former, the Court must allow the party seeking to intervene to join the litigation. O.C.G.A (a). Under the latter, the Court may allow intervention if the party seeking to participate in Page 3 of6

4 the suit meets certain criteria.' GMA meets those criteria. The first is that the motion to intervene be timely filed. Here, it was: barely a month after Plaintiffs filed their complaint and nearly a month before Plaintiffs amended it. See Kroger v. Taylor, 320 Ga. App. 298, 298 (2013) ("[W]hether a motion to intervene is timely is a decision entrusted to the sound discretion of the trial court"). Second, GMA must demonstrate that its claim or defense "and the main action have a question of law or fact in common." O.C.G.A (b)(2). Plaintiffs' action and GMA's competing interests overlap entirely and conflict directly: Plaintiffs are seeking to have a statutory scheme that empowers municipalities to collect millions of dollars in taxes on the retail sale of motor fuel -- and subsequently to spend those dollars as they see fit -- declared unconstitutional. Finally, a court addressing a request to intervene pursuant to O.C.G.A (b) must consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties [cit.] and other relevant circumstances such as the degree to which the intervenor would be affected by the outcome in the underlying case. Branch v. Maxwell, 203 Ga. App. 553, 554 (1992) (quotations omitted). The Court has here considered such factors, and finds that they favor permitting GMA to intervene. As mentioned above, Defendants do not object. And while Plaintiffs do object, the Court finds their concerns misplaced. First, the addition of GMA to the litigation will not needlessly expand the case. If GMA's arguments and positions overlap with the present Defendants, then there is no extra work for Plaintiffs. Where they differ, Plaintiffs are 1 GMA's motion is not particularly clear as to which form of intervention it is pursuing, claiming at one point that it is "entitled to be heard" -- suggesting a claim of right -- yet acknowledging elsewhere that the Court has discretion in the matter. However, because the Court finds that GMA should be permitted to intervene, irrespective of any statutory or other right, the question is moot. Page 4 of6

5 merely being required to address now, in a single forum, what they would have to face in the future. There is no evidence that allowing GMA to intervene would delay the proceedings, given the prompt filing of the motion. Second, as discussed above, the intervenor (or, more accurately, the members it represents) would be greatly affected by an outcome favorable to Plaintiffs -- arguably more seriously so than the present Defendants. This factor, too, militates in favor of granting intervention. Plaintiffs offer an additional basis for denying GMA's motion: that GMA, its members, and their interests are already adequately represented by the Attorney General, who speaks for the present Defendants. Plaintiffs rely on the Supreme Court's conclusion in DeKalb Cty. v. Post Properties, Inc., 245 Ga. 214, 219 (1980) that where the interest of the intervenor is identical to that of a governmental body or officer who is a named party, it will be assumed that the intervenor's interests are adequately represented, absent a concrete showing of circumstances in the particular case that make the representation inadequate. (citation, quotations, and footnote omitted). Two problems arise with this argument. First, the quoted portion of Post Properties involved a petition to intervene as a matter of right and a review of pertinent case law demonstrates that this inadequate representation requirement indeed applies only to interventions pursued as claims of right. Id. at ; see also Buckler v. DeKalb Cty., 290 Ga. App. 190, (2008); State Farm Mut. Auto. Ins. Co. v. Five Transp. Co., 246 Ga. 447, 453 (1980); Lynn v. Wagstaff Motor Co., 126 Ga. App. 516, 517 (1972). Second, even if the Court were to apply this requirement to GMA's request for permissive intervention, GMA would satisfy it, as its members' interests are not identical to that of the governmental body and officer named in the suit. First, GMA's members oppose any limitation on their ability to spend local tax revenues as they see fit whereas the State's Department of PageSof6

6 Revenue properly takes no position on how local authorities spend their own tax revenues. Second, at least two forms of relief Plaintiffs seek affect GMA and the State very differently: (1) a temporary impoundment of local sales tax revenues would have no direct effect on State operations but could cripple any number of local programs and initiatives and (2) a solution that requires the State to contribute to the Department of Transportation an amount equal to what local governments collect from retail motor fuel sales taxes but do not in turn spend on road and bridge maintenance and improvement would do the reverse. Thus, no matter how ably present counsel may represent the current Defendants, said counsel cannot adequately champion the potentially divergent interests of GMA and its members. For the foregoing reasons, GMA's motion to intervene as a Defendant is GRANTED. The Clerk shall add GMA as a party Defendant. GMA shall have five business days from the entry of this Order to file a post-hearing brief of no more than ten pages, addressing the question of dismissal. Plaintiffs and Defendants Department of Revenue and Commissioner Riley shall have five business days after GMA's filing of any post-hearing brief to file responses (also to number no more than ten pages). SO ORDERED this 30th of December Page 6 of6