IN THE SUPREME COURT OF MISSISSIPPI

Transcription

1 IN THE SUPREME COURT OF MISSISSIPPI JUSTIN BANKSTON, D/B/A BANKSTON FENCE AND BANKSTON FENCE, INC. APPELLANT VS. NO.2011-CA MISSISSIPPI DEPARTMENT OF REVENUE APPELLEE ON APPEAL FROM THE CHANCERY COURT OF HINDS COUNTY, MISSISSIPPI FIRST JUDICIAL DISTRICT OPENING BRIEF OF THE APPELLANT (ORAL ARGUMENT REQUESTED) SUBMITTED BY: HARRIS H. BARNES, III (MS BAR #... BRANDON C. DIXON, (MS BAR #... BARNES LAW FIRM, P.A. 5 River Bend Place, Suite A Flowood, Mississippi Telephone: (601) Facsimile: (601) ATTORNEYS FOR APPELLANT

2 IN THE SUPREME COURT OF MISSISSIPPI JUSTIN BANKSTON, D/B/A BANKSTON FENCE AND BANKSTON FENCE, INC. APPELLANT VS. NO.2011-CA MISSISSIPPI DEPARTMENT OF REVENUE APPELLEE ON APPEAL FROM THE CHANCERY COURT OF HINDS COUNTY, MISSISSIPPI FIRST JUDICIAL DISTRICT CERTIFICATE OF INTERESTED PARTIES The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made so that the judges of this Court may evaluate possible disqualification or recusal. I. Hon. William H. Singletary, Chancellor, P.O. Box 686, Jackson, Mississippi Justin Bankton, Appellant, 1180 Bluebird Lane, Terry, Mississippi Brandon C. Dixon, Bames, Law Firm, P.A., Attorney for the Appellant, 5 River Bend Place, Suite A, Flowood, MS Harris H. Bames, III, Barnes Law Firm, P.A., Attorney for the Appellant, 5 River Bend Place, Suite A, Flowood, MS Stephanie Jones, Esq. former counsel for the Appellee, Mississippi Department of Revenue, P.O. Box 22828, Jackson, MS

3 6. Heather Deaton, Esq., Mississippi Department of Revenue, Attorney for the Appellee, P.O. Box 22828, Jackson, MS Gary W. Stringer, Esq., Mississippi Department of Revenue, Attorney for the Appellee, P.O. Box 22828, Jackson, MS James G. McGee, former counsel for Appellant, 125 S. Congress Street, Capital Towers, Suite 1240, Jackson, Mississippi SO CERTIFIED, this the 12th day of December,

4 TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS... 1 TABLE OF CONTENTS... 2 TABLE OF AUTHORITIES....4 STATEMENT OF THE ISSUE... 6 STATEMENT OF THE CASE SUMMARY OF THE ARGUMENT ARGUMENT I. STANDARD OF REVIEW II. THE CHANCELLOR ERRED IN HOLDING THAT THE COURT LACKED JURISDICTION TO GRANT INJUNCTIVE RELIEF UNDER MISS. CODE ANN A. The Complaint alleges an inadequate remedy at law B. An adequate remedy at law does not, in fact, exist C. The allegations if proved warrant the conclusion that the taxes are being collected "without authority oflaw." III. THE CHANCELLOR ERRED IN HOLDING THAT DISMISSAL WAS PROPER BECAUSE BANKSTON FAILED TO POST SECURITY AS REQUIRED BY MISS. CODE ANN CONCLUSION CERTIFICATE OF SERVICE

5 TABLE OF AUTHORITIES Statutes Miss. Code Ann Miss. Code Ann Miss. Code Ann Passim Miss. Code Ann Passim Miss. Code Ann Miss. Code Ann (2)... 9 Miss. Code Ann (1) Miss. Code Ann (4)... 9,19 Miss. Code Ann (3)... 9, 10, 20 Miss. Code Ann ,19 Miss. Code Ann Miss. Code Ann Miss. Code Ann (Repealed 2005) Miss. Code Ann (4) (Rev. 2009)... 8,10,15, 19,20 Miss. Code Ann (Rev. 2009) Cases Black v. City o/tupelo, 853 So.2d 1221 (Miss. 2003) Burnette v. Hartford Underwriters Ins. Co., 770 So. 2d 948 (Miss. 2000) Coulson v. Harris, 43 Miss. 728 (1871)

6 First Mississippi Nat. Bank v. KLH Industries, Inc., 457 So. 2d 1333 (Miss. 1984) Fondren v. State Tax Commission, 350 So. 2d 1329 (Miss. 1977) Lerner v. Fleet Bank, NA., 318 F.3d 113 (2d. Cir. 2003) Lewis v. Mass Appraisal Services, Inc., 396 So. 2d 35 (Miss. 1981) Marx v. Truck Renting and Leasing Ass'n Inc., 520 So. 2d 1333 (Miss. 1987)... Passim Sanford v. Board of Sup 'rs, Covington County, 421 So. 2d 488 (Miss. 1982) State Tax Commission v. Fondren, 387 So. 2d 712 (Miss.1980) Stone v. Kerr, 194 Miss. 646, 10 So. 2d 845 (1942)... Passim Walton v. Walton, 52 So. 3d468, 470 (~8) (Miss. 2011) Rules Miss. R. Civ. P. 12(b)(1)... 11, 12, 13, 15, 16 Miss. R. Civ. P. 12(b)(6)... 13,16 Miss. R. Civ. P. 65(c)....12,21,22 Secondary Sources Jeffery Jackson, Mississippi Civil Procedure 1: 1 (West 2009). '"

7 STATEMENT OF THE ISSUES The primary issue in this case is whether the chancery court erred in holding that it lacked subject matter jurisdiction under Miss. Code Ann to enjoin the Mississippi Department of Revenue from collecting contractor's tax assessed against Mr. Bankston for the periods of January 1,2005 through December 31, 2007, because he was wrongfully deprived of his right to an administrative hearing before the Mississippi State Tax Commission, as provided by Miss. Code Ann (4) (Rev. 2009). If the Court determines that the Chancellor erred in deciding the first issue, the Court must also consider whether the Chancellor also erred in determining that dismissal was required because Mr. Bankston because he failed to post adequate security as required by Miss. Code Ann

8 STATEMENT OF THE CASE A. PROCEEDINGS AND DISPOSITION IN THE COURT BELOW This case concerns the subject matter jurisdiction of the chancery court to enjoin the collection of an unlawful assessment of tax. Following an assessment of additional contractor's tax periods of January 1,2005 through December 31, 2007, (R. at 13,126:10-12.), Mr. Bankston appealed to the Mississippi State Tax Commission Board of Review. (R. at 16, 18.) On August 26, 2009, the Board of Review issued an order affirm the assessment. (R. at 21.) On September 28, 2009, Mr. Bankston petitioned the full MSTC for review of the order of the Board of Review. (R. at ) The MSTC determined that Mr. Bankston's appeal was not timely filed. The MSTC later granted a hearing, but solely on the issue of the timeliness of the petition. (R. at 20.) Thereafter, the MSTC issued an order dismissing Mr. Bankston's appeal. (R. at 21.) With nowhere else to turn, Mr. Bankston petitioned the Chancery Court for the First Judicial District of Hinds County for an injunction to prevent the Department of Revenue from collecting the tax because he was wrongfully deprived of his right to a hearing before the MSTC. (R. at 1-11.) The DOR moved to dismiss for lack of subject matter jurisdiction under Miss. R. Civ. P. 12(b)(1). (R. at ) A hearing was held on December 8, 2010, following which the Chancellor took the matter under advisement. (R. at ) On April 26, 2011, the Chancellor issued an order granting the DOR's motion to dismiss. (R. at ) Notice of appeal was filed on May 25,2011. (R. at ) B. STATEMENT OF THE RELEVANT FACTS Justin Bankston is the sole shareholder of Bankston Fence, Inc., a Mississippi Corporation. Prior to incorporating in 2008, Mr. Bankston operated his business as a soleproprietor under the name Bankston Fence. 7

9 On June 25, 2008, the MSTC issued an Assessment of Sales Tax against Mr. Bankston, d/b/a Bankston Fence, for taxes penalties and interest in the amount of $250, for the audit period ofjanuary 1, 2005, through December 31, (R. at 13, 126:10-12.) Mr. Bankston did not receive notice of the assessment, however, until October 20, 2008, when it was hand delivered to him by an MSTC agent. (R. at 126:13-15.) On November 6,2008, Mr. Bankston's former counsel, James McGee, wrote the Chairman of the Board of Review, Mr. Gerald Yates, demanding that Mr. Bankston be granted a hearing before the Board of Review due the late receipt of the assessment. (R. at , 127:1-3.). On November 7,2008, Mr. Yates sent Mr. McGee a letter denying the request for a hearing before the Board of Review on the grounds that Mr. Bankston's petition was not timely filed. (R. at 18, 127:3-6.) Six days later, however, Mr. Yates reversed his decision and granted Mr. Bankston's request for a hearing before the Board of Review. (R. at 20, 127:6-8.) Following a hearing held on April 7, 2009, the Board of Review issued an order reducing the assessment from $250, to $197,125.00, and affirm the assessment as reduced. The order was dated August 26,2009. (R. at 21,127:8-9.) The statute in effect at that time provided that "[ ajny taxpayer aggrieved by an order of the board of review affirming a tax assessment... and who wishes to contest the order shall, within thirty (30) days from the date of the order of the board of review being contested, file an appeal to the commission." Miss. Code Ann (4) (Rev. 2009). Although (4) prescribes the time period for filing an appeal from the board of review, the statute is silent on such basic questions as whether the first day of the period is included or excluded or what happens if the due date falls on a Saturday, Sunday, legal holiday, or any other day the MSTC is not open for business. The Mississippi Administrative Procedures Law ("MAPL"), Miss. Code Ann et seq., fills in this gap. 8

10 The MAPL was enacted in 2005 "to provide a minimum procedural code for the operation of all state agencies when they take action affecting the rights and duties of the public." Id. at (2). The MAPL broadly applies to "all agencies and proceedings not exempted under [Title 25, chapter 43 of the Mississippi Code]." Id. at (1). Section (4) specifically states, however, that "to the extent that the provisions of any other law conflict or are inconsistent with the provisions of this chapter, the provisions of such other law shall govern and control." To identify such conflicts, included the following provision: Every agency as defined in this chapter shall, no later than October 1, 2003, file with the Secretary of the Senate and the Clerk of the House a report which outlines any conflicts between this act and any other laws affecting the agency. This report shall include proposed legislation to bring the other laws into conformity with the requirements of this act. The Secretary of State shall, no later than December 1, 2003, file with the Secretary of the Senate and the Clerk of the House a list of sections which the Secretary of State believes conflict with this act. The Secretary of the Senate and the Clerk of the House shall maintain a list of agencies which have complied with this section. Miss. Code Ann The MSTC is not exempt from the provisions of Title 25, chapter 43. Further, the MSTC did not report any conflicts between MAPL and the laws affecting the agency, as required by Miss. Code Ann Thus, the MAPL presumably applied for purposes of determining the due date for Mr. Bankston to file an appeal with MSTC. Miss. Code Ann provides: (3)(a) In computing any period of time prescribed or allowed by this Article I, by order of an agency, or by any applicable statute or agency rule, the day of the act, event or default from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included, unless it is a Saturday, a Sunday or a legal holiday, as defined by statute, or any other day when the agency's office is in fact closed, whether with or without legal authority, in which event the period runs until the end of the next day which is not a Saturday, a Sunday, a legal holiday or any other day when the agency's office is closed. When the period of time prescribed or allowed is less than seven (7) days, intermediate Saturdays, Sundays and legal holidays shall be excluded in the 9

11 computation. In the event any legal holiday falls on a Sunday, the next following day shall be a legal holiday. (b) Whenever a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice, order, pleading, motion or other paper upon him and the notice or paper is served upon him by mail; three (3) days shall be added to the prescribed period On September 28, 2009, Mr. Bankston filed his appeal. (R. at 22-34, 127:10-13.) If Miss. Code Ann (4) is read in conjunction with Miss. Code Ann (3), Mr. Bankston's appeal was timely filed. Neverthless, the MSTC took the position that the MPAL was not applicable to the proceedings in question and, therefore, Mr. Bankston's appeal was not timely filed. On October 1, 2009, the MSTC notified Mr. Bankston that his appeal was denied. (R. at 127: ) After multiple exchanges of correspondence, the MSTC granted a hearing on the issue of whether Mr. Bankston's appeal was timely filed. (R. at 57, 127:13-14.) This hearing was held on December 2, On February 4,2010, the MSTC issued a new audit assessment for the same periods, in the same amount as the assessment that was the subject of the timeliness hearing before the MSTC. (R. at 67, 127:16.) On February 22, 2010, Mr. McGee requested a hearing before the Board of Review pursuant to the new assessment. (R. at 66, 127:17.) Mr. McGee was later informed, however, that the assessment was issued in error and the request for hearing before the Board of Review pursuant to the new assessment was denied. (R. at 127:19-20.) On June 1, 2010, the MSTC issued an order from the timeliness hearing denying Mr. Bankston's appeal as untimely filed. (R. at 79-80, 127:22.) Again, Mr. McGee inquired as to the request for a hearing before the Board of Review pursuant to the assessment issued on February 4, (R. at 81, 127:23-128:1.) On June 21, 2010, Gary Stringer, Attorney for the MSTC, issued a written response citing the MSTC's previous denial of Mr. Bankston's request. Mr. Stringer contended 10

12 that the February 4, 2010, assessment was not a new assessment, but the same reduced assessment that previously been issued. CR. at 128:1-6.) Having nowhere else to go, Mr. Bankston instituted the instant action, seeking to obtain, among other relief, l an injunction to prevent the Department of Revenue from collecting the tax because he was wrongfully deprived of his right to a hearing before the MSTC. CR. at I-II.) DOR responded with a motion to dismiss for lack of subject matter jurisdiction under Miss. R. Civ. P. 12Cb)(l). CR. at ) A hearing was held on December 8, 2010, CR. at ) and on April 26, 2011, the Chancellor entered an order dismissing Mr. Bankston's appeal CR. at ) The Chancellor concluded that injunctive relief was not proper under Miss. Code Ann because Mr. Bankston had an adequate legal remedy, namely the appeal procedure set forth in Miss. Code Ann Further, the court concluded that the allegations in the Petition did not warrant the conclusion that the taxes were collected without authority of law. Despite his repeated assertions in the Petition to the effect that he was not challenging the amount of the assessment, but seeking to enforce his right to an administrative hearing before the MSTC, the chancellor held that "Bankston does not seek to restrain the collection of taxes levied or attempted to be collected without authority oflaw." Finally, the court concluded that, "[e]ven if [it] were to fmd Bankston's pursuit to be legitimately filed under , the petition for relief would still be denied for failure to post security or bond under Miss. Code Ann " Accordingly, the Court granted to DOR's motion to dismiss. 1 In addition to injunctive relief, the Petition requested mandamus relief and an appeal from the Order of the MSTC dismissing his administrative appeal. The Chancery Court denied both grounds for relief and Mr. Bankston will not continue to pursue them in this appeal. Accordingly, we will not discuss them further here. 11

13 SUMMARY OF THE ARGUMENT Miss. Code Ann confers subject matter jurisdiction on the chancery courts to hear suits "to restrain the collection of any taxes levied or attempted to be collected without authority of law" if three requirements are met. Those requirements were met here. First, the Petition sufficiently alleges that no adequate remedy at law exists. Second, no adequate remedy at law does, in fact, exist. Although the Chancellor concluded otherwise, the Chancellor's conclusion is contrary to this Court's decisions in Fondren v. State Tax Commission, 350 So.2d 1329 (Miss. 1977), and Marx v. Truck Renting and Leasing Ass'n Inc. ("TRLA"), 520 So.2d 1333 (Miss. 1987), which the Chancellor did not even cite in his order dismissing the Petition. Third, the allegations in the Petition, if true, warrant the conclusion that the taxes are being collected without authority of law because the MSTC blatantly ignored the MAPL. The Chancellor further erred in holding that dismiss was proper even if the requirements of Miss. Code Ann were met, because Mr. Bankston failed to post security as required by Miss. Code Ann We submit that was superseded by Miss. R. Civ. P. 65, but even ifit weren't it's settled law that bond is not required if the plaintiff is not seeking interlocutory injunctive relief. ARGUMENT I. STANDARD OF REVIEW At the outset, there is an issue as to the proper standard of review. The DOR moved to dismiss under Miss. R. Civ. P. 12(b)(I) for lack of subject matter jurisdiction, citing Bankston's failure to comply with the requirements of Miss. Code Ann and as grounds for dismissal, among others. To the extent the DOR's motion relates to the requirements of , the motion is properly characterized and reviewed as a motion to 12

14 dismiss for lack of subject matter jurisdiction under Miss. R. Civ. P. 12(b)(I). But to the extent the basis for the dismissal was Bankston's failure to post security, as required by Miss. Code Ann , we believe the DOR's motion was more properly characterized as a motion to dismiss for failure to state a claim for relief under Miss. R. Civ. P. 12(b)(6). A motion to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction is similar to a motion to dismiss for failure to state a claim upon which relief can be granted under Rule l2(b)(6) in many ways. Both motions are subject to the same de novo standard of review on appeal. And in deciding both types of motions, the Court must accept all factual allegations in the complaint as true, and draw inferences from those allegations in the light most favorable to the plaintiff. Compare TRLA, 520 So.2d at 1339 ("To determine if we have before us a case within chancery court jurisdiction, as defined by we turn to the well pleaded allegations of the complaint which, for jurisdictional purposes, are taken as true. "); with Black v. City o/tupelo, 853 So.2d 1221, (~ 4) (Miss. 2003) ("When considering a motion to dismiss, the allegations in the complaint must be taken as true, and the motion should not be granted unless it appears beyond doubt the plaintiff will not be able to prove any set of facts in support of his claim. "). Notwithstanding their similarities, the two motions differ significantly in purpose and effect. A motion to dismiss under Rille 12(b)(l) for lack of subject matter jurisdiction tests the court's authority to proceed with the case. TRLA, 520 So.2d at 1338 ("Subject matter jurisdiction... the authority of a court to hear a given case at all-turns on the type of case at issue.") (citation omitted). By contrast, a motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleading. Walton v. Walton, 52 So. 3d 468, 470 (~ 8) (Miss. 2011). On a motion to dismiss under Rule 12(b )(1), the party invoking the Court's jurisdiction bears the burden of proof to demonstrate that subject matter jurisdiction exists, whereas the movant bears 13

15 the burden of proof on a motion to dismiss under Rule 12(b)( 6). Lerner v. Fleet Bank, N.A., 318 FJd 113, 128 (2d. Cir. 2003). Most importantly, subject matter jurisdiction may be questioned or challenged by any party, even the court, see e.g. Sanford v. Board of Sup'rs, Covington County, 421 So. 2d 488 (Miss. 1982), at any time, even on appeal, see. e.g. Burnette v. Hartford Underwriters Ins. Co., 770 So. 2d 948 (Miss. 2000). Because labeling a statutory requirement as jurisdiction carries such significant implications, we urge the Court to clarify the distinction between jurisdictional requirements, on the one hand, and procedural and substantive requirements, on the other hand. Whether subject matter jurisdiction exists is solely a function of the law that confers it and is not dependent on the facts of any particular case. Subject matter jurisdiction of our several courts pre-exists the said-to-beactionable conduct and the pleadings of the parties. Something stirs the plaintiff to act who invokes the theretofore already mature, sufficient and extant subject matter jurisdictional authority of the court. That court's subject matter jurisdiction remains solely a function of the law that conferred it, and that court's subject matter jurisdiction over that type of case remains a jurisdiction in common with all other courts of similar genre. Jeffery Jackson, Mississippi Civil Procedure 1:1 (West 2009); see also Duvall, 80 So. 2d at 755 ("The question of jurisdiction, in the sense we are here considering, that is, whether the court had the power to enter upon the inquiry at all, had necessarily preceded the inquiry into the facts."). Although the law may prescribe time limitations, notice requirements, or other requisites of pleading and practice that may ultimately provide a complete defense to the underlying cause of action or preclude the court from granting relief, the court carmot even consider those requirements unless and until it determines that it has authority to hear cases of that type or class in the first place. "Jurisdictionally cases are generally classified by the nature of the primary right asserted or the remedy sought." TRLA, 520 So. 2d at Here, Bankston seeks to enjoin the collection 14

16 of the taxes assessed against him because he was wrongfully deprived of his right to an administrative appeal before the MSTC, as provided by Mississippi Code Annotated (4) (Rev. 2009). Generally, the chancery courts are prohibited from enjoining the assessment, appraisal or col1ection of taxes, Lewis v. Mass Appraisal Services, Inc., 396 So.2d 35 (Miss. 1981); Coulson v. Harris, 43 Miss. 728 (1871); however, this Court has recognized that injunctive relief is available in cases of equity jurisdiction or when specially authorized by statute. Marx v. Truck Renting and Leasing Ass'n Inc., 520 So.2d 1333, 1338 (Miss. 1987); State Tax Commission v. Fondren, 387 So.2d 712, (Miss. 1980); Stone v. Kerr, 194 Miss. 646, 10 So.2d 845, 847 (1942). The statutory authority that Mr. Bankston relies on here is Mississippi Code Annotated , which states: The chancery court shal1 have jurisdiction of suits by one or more taxpayers in any county, city, town, or village, to restrain the collection of any taxes levied or attempted to be collected without authority oflaw. The requirements of that section are clearly jurisdictional, because they go to the existence of the court's authority to grant injunctive relief. Accordingly, the failure to meet those requirements is the proper subject of a motion to dismiss under Ru1e 12(b)(I). By contrast, the requirements of Miss. Code Ann go to the exercise of the I court's jurisdiction. This is clear from the language of that section, which states as fol1ows: An i~unction shal1 not be granted to stay the collection of state, county, city, town or village taxes unless upon condition that, before its issuance, the party obtaining it shall give security to the state in such sum as the court deems proper for the payment of damages, costs, and reasonable attorney's fees as may be incurred or suffered by the state, in case the injunction shall be dissolved. Miss. Code Ann When applies, it precludes the court from granting injunctive unless certain conditions are met. Section presupposes that the court has the authority to grant such relief in the first place. Although the failure to post security as required 15

17 by that section may prevent the court from exercising the authority conferred by to issue injunctive relief, it does not deprive the court of that authority. Thus, the failure to comply with the requirements of may be the proper subject of a motion to dismiss for failure to state a claim for which relief can be granted under Rule 12(b)( 6), but not a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1). We turn now to the merits of this appeal. II. THE CHANCELLOR ERRED IN HOLDING THAT THE COURT LACKED JURISDICTION TO GRANT INJUNCTIVE RELIEF UNDER MISS. CODE ANN The requirements of Miss. Code Ann are well established. In order to invoke the jurisdiction conferred by , three requirements must be met: (1) the taxpayer must allege an inadequate remedy at law in its complaint, (2) no adequate remedy at law must, in fact, exist, and (3) the taxpayer's allegations of fact, if proved, must "warrant a conclusion that the challenged taxes are being levied or collected 'without authority of law.,,, TRLA, 520 So. 2d at 1338 (citing Fondren v. State Tax Commission, 350 So.2d 1329, (Miss. 1977)). All three requirements were met here. A. The Complaint alleges an inadequate remedy at law. In TRLA, the Court held that pleading requirement is met if the complaint includes sufficient allegations notifying both the court and opposing party that the case falls within the language of So. 2d at That requirement is clearly met here by the allegations in paragraph 5 of the Petition, which specifically cites Miss. Code Ann as a basis of jurisdiction. The real issues here relate to the second and third requirements, namely whether an adequate legal remedy did in fact exist, and whether the allegation of the Petition, if proved, warrant the conclusion that the taxes are being levied or collected without authority of law. 16

18 B. An adequate remedy at law does not, in fact, exist. Although nothing in the plain language of Miss. Code Ann indicates that the lack of an adequate remedy at law is a requirement of injunctive relief under , the Court has held that "[t]he statute itself is nothing more than a codification of the traditional requirement of equity jurisdiction with the legislatively added requirement that the taxes must be collected without authority oflaw." TRLA, 520 So. 2d at Here, the Chancellor held that injunctive relief was not appropriate because the appeal procedure in Miss. Code Ann provided an adequate remedy at law. The same argument was made and rejected in TRLA. In that case, the taxpayer challenged the constitutionality of Mississippi Code Annotated , which imposed a six percent tax on the gross income of companies renting or leasing transportation equipment located outside the state through rental agreements entered into outside the state. TRLA, 520 So. 2d at The complaint alleged that the statute violated the Commerce Clause of the United States Constitution and the Due Process Clauses of the United States Constitution and the Mississippi Constitution of Id. There, as here, the MSTC claimed that the plaintiffs were required to pay the tax and then seek a refund as their exclusive remedy pursuant to Miss. Code Ann (Repealed 2005), which was the predecessor of Miss. Code Ann The Court held that the refund procedure under Mississippi Code Annotated (Repealed 2005), did not provide an adequate remedy at law for the violations alleged in the complaint because the plaintiffs were not seeking a new calculation of their taxes or challenging the amount of the taxes, but seeking to prevent "a continuing trespass, injury, or other wrong." TRLA, 520 So. 2d at In support of this distinction the Court cited its decisions in Stone and Fondren. In Stone, the taxpayer contended that he should have been taxed at one percent (1 %), while the MSTC contended that he was properly taxed at two percent (2%). 17 The Court

19 concluded that injunctive relief was not proper because the taxpayer had an adequate remedy at law. Stone, 10 So. 2d at 848. In doing so, the Court noted that the taxpayer was only seeking "a correction of the amount ofthe tax so assessed." Id. The Court noted that "the amount of taxes in controversy" was clear beyond dispute, and that the collection of the tax could not be enjoined for "mere irregularity or errors of computation." Id In Fondren, the taxpayer brought suit in the chancery court to enjoin the MSTC from approving each county's recapitulation of its assessment rolls, on which the property tax is based, until such time as the Tax Commission should comply with its duty to equalize assessments among counties as provided by Miss. Code Ann through and 112 of the Constitution of Although Miss. Code Ann provided that any person "aggrieved by an order of the state tax commission assessing property for the purpose of ad valorem taxation may... appeal with supersedeas as to the amount of taxes in controversy" to the appropriate circuit court," the Court found that the statutory remedy did not constitute an adequate remedy at law. The Court noted that "[t]he gravamen of Fondren's complaint is not that the State has made a mere error in computing his taxes," rather "[h]e alleges 'a continuing trespass or injury,' in that the State Tax Commission has failed for many years to carry out its duty of equalizing assessments, which is a prerequisite to the collection of taxes at all." Although the gravamen of Bankston's Petition is that he was wrongfully deprived of his statutory right to an administrative hearing before the MSTC, the Chancellor concluded that Bankston had an adequate remedy at law because an administrative appeal of the MSTC order would require the Court to consider the entire record below to determine whether the decision was arbitrary, capricious, unsupported by substantial evidence, beyond the authority of the MSTC or violative of some constitutional or statutory right. The Chancellor, however, did not consider the Court's decisions in Fondren and TRLA. 18 (R. at ) In both cases, the

20 violations alleged by the taxpayers could have been addressed following an assessment and appeal. That fact alone, however, did not preclude the Court in either case from determining that a refund suit was not an adequate legal remedy, since the wrong sought to be redressed was not a mere error in the computation of tax, but "a continuing trespass, injury, or other wrong." The same reasoning applies here because Mr. Bankston is seeking to enforce his right to an administrative hearing, not to correct an error in the computation of the tax assessed against him. C. The allegations if proved warrant the conclusion that the taxes are being collected "without authority oflaw." In TRLA, the Court held that the third requirement is satisfied if the allegations in the Complaint state a claim which, if proved, would entitle the taxpayer to relief. 520 So. 2d at In doing so, the made clear that "[t]his inquiry does not require a determination as to whether the allegations are in fact true, rather, it simply requires that this Court determine whether the allegations state a claim which, if proved, would entitle the taxpayer to relief." Here, Bankston alleges that he was wrongfully deprived of his right to administrative review because the MSTC refused to consider the MAPL in determining whether his administrative appeal was timely filed with the thirty (30) day period prescribed by Miss. Code Ann (4). As previously noted, the MAPL broadly applies to "all agencies and proceedings not exempted under [Title 25, chapter 43 of the Mississippi Code]," id. at (1), including the MSTC. While Miss. Code Ann (4) expressly provides that the MAPL does not apply to the extent that it conflicts or is inconsistent with the provisions of other laws, the MSTC did not identify any conflicts between the statutes affecting the agency and the MAPL, as required by Miss. Code Ann Just as the Constitutional and statutory provisions at issue in Fondren, imposed a statutory duty on the MSTC to equalize assessments, 387 So. 2d at , the MAPL imposed 19

21 a statutory duty on the MSTC to provide taxpayers with certain minimum procedural protections in proceeding before the agency. Those protections include rules of construction that apply in determining whether statutorily prescribed deadlines are met. Miss. Code Ann (3)(b) clearly provides that "[w]henever a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice, order, pleading, motion or other paper upon him and the notice or paper is served upon him by mail; three (3) days shall be added to the prescribed period." (Emphasis added). The Board of Review issued its order on August 26, Bankston's order was received by the MSTC on September 28,2009. If Miss. Code Ann (3) is read in conjunction with Miss. Code Ann (4), Bankston's Petition was clearly filed within the thirty (30) day period prescribed by the statute. The allegations in the Petition thus warrant the conclusion that the taxes assessed against Bankston would be collected without authority of law, because Bankston was not afford his statutory right to an administrative hearing on the merits of the assessment even though he complied with the statutory requirements for perfecting his appeal. III. THE CHANCELLOR ERRED IN HOLDING THAT DISMISSAL WAS PROPER BECAUSE BANKSTON FAILED TO POST SECURITY AS REQUIRED BY MISS. CODE ANN Mississippi Code Annotated provides that "[a]n injunction shall not be granted to stay the collection of state... taxes unless upon condition that, before its issuance, the party obtaining it shall give security to the state in such sum as the court deems proper for the payment of damages, costs, and reasonable attorney's fees as may be incurred or suffered by the state, in case the injunction shall be dissolved." Section has been inoperable since 1982, when it was superseded by Rule 65( c) of the Mississippi Rules of Civil Procedure. Cf First Mississippi Nat. Bank v. KLH Industries, Inc., 457 So. 2d 1333 (Miss. 1984) (holding that statutory procedural provisions apply only to 20

22 extent they do not conflict with rules). Nevertheless, the Comment to Rule 65 makes clear that "[Rule] 65( c) continues to traditional practice of requiring security in injunction proceedings, and vests in the sound discretion of the court the determination of the amount of security that will be required." Miss. R. Civ. P. 65 cmt. (citing Miss. Code Ann to , and (1972)). The Comment also makes clear, however, that "[Rule] 65 has no effect on or application to final, or permanent, injunctive relief." Although Mr. Bankston's petition requests injunctive relief, Mr. Bankston did not seek a temporary restraining order or preliminary injunction in this proceeding, Mississippi Code Annotated and Rule 65(c) of the Mississippi Rules of Civil Procedure do not apply, so no security is required. Accordingly, the chancellor erred in determining that failure to post security was grounds for dismissal of Mr. Bankston's Petition. CONCLUSION Miss. Code Ann confers subject matter jurisdiction on the chancery courts to hear suits "to restrain the collection of any taxes levied or attempted to be collected without authority of law" if three requirements are met. Those requirements were met here. First, the Petition sufficiently alleges that no adequate remedy at law exists. Second, no adequate remedy at law does, in fact, exist. Although the Chancellor concluded otherwise, the Chancellor's conclusion is contrary to this Court's decisions in Fondren v. State Tax Commission, 350 So.2d 1329 (Miss. 1977), and Marx v. Truck Renting and Leasing Ass'n Inc. ("TRLA"), 520 So.2d 1333 (Miss. 1987), which the Chancellor did not even cite in his order dismissing the Petition. Third, the allegations in the Petition, if true, warrant the conclusion that the taxes are being collected without authority of law because the MSTC blatantly ignored the MAPL. The Chancellor further erred in holding that dismiss was proper even if the requirements of Miss. Code Ann were met, because Mr. Bankston failed to post security as 21

23 required by Miss. Code Ann We submit that was superseded by Miss. R. Civ. P. 65, but even if it weren't it's settled law that bond is not required if the plaintiff is not seeking interlocutory injunctive relief. CERTIFICATE OF SERVICE I, Brandon C. Dixon, do hereby certify that I have this date mailed through the United States Postal Service, postage prepaid, a true and correct copy of the above and foregoing BRIEF OF THE APPELLANT to the following: Gary Stinger, Esq. Mississippi Department of Revenue P.O. Box 1033 Jackson, Mississippi James Powell, Esq. Mississippi Department of Revenue P.O. Box 1033 Jackson, Mississippi This the 12th day of December,