COMCAST OF LITTLE ROCK, INC.

V. NO. CA 11-277

S A R A H M. BRADSHAW, et al. APPELLEES ~ ~~

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ON APPEAL FROM THE PULASKf COUNTY CIRCUIT COURT, SECOND DIVISION

THE HONOMBLE CHRIS PIAZZA, CIRCUIT JUDGE

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Z ? ? - JOINT BRIEF OF APPELLEES

Kevin M. Lemley (ABN 2005034) klemley@psc.state,ar .us Dallas W. Heltz (ABN 2010138) dheltz@psc.state.ar .us Arkansas PubIic Service Commission P.O. Box 400 Little Rock, Arkansas 72203-0400 Phone: (50 1) 682-5878 F a : (501) 682-6043

Attorneys for Sarah M. Bradshaw and Arkansas Public Service Commission

Karla Burnett (ABN 94 130) kburnett@co.pulaski.ar.us Amanda M. Mitchell (ABN 9701 0) amitchell@co.pulaski.ar.us 201 South Broadway, Suite 400 Little Rock, AR 72201 Phone: (501) 340-8285 Fax: (501) 340-8282

Attorneys for Janet Troutman Ward, Debra Buckner, and Pulaski County, Arkansas

Keith Billingsky (ABN 860 16) kbiUingsley@bbpalaw.com Jay Bequette (ABN 87012) jbequette@bbpaIaw.com Bequette and Billingsky, P.A. 425 West Capitol Avenue, Suite 3200 Little Rock, Arkansas 7220 1-3469 Phone: (501) 374-1 107 Fax: (501) 374-5092

Attorneys for Rob McGill and PuIaski County School District

Robert E. Bamburg (ABN 85005) RBamburg@cityofi acksonvi I1e.net 303 N. James Street P.O. Box 591 3 Jacksonville, Arkansas 72078 Phone: (501) 982-6303 Fax: (501) 982-2280

Attorney for Gary FIetcher and City of JacksonviHe, Arkansas

TABLE OF CONTENTS

RESPONSE TO JURISDICTIONAL STATEMENT ........................... i

POINTS ON APPEAL AND PNNCJPAL AUTHORITIES ..................................................... POA 1

TABLE OF AUTHORITIES .:. .................................................... TOA 1

SUPPLEMENTAL ABSTRACT.. .......................................... SuppAb 1

................................................................................. ARGUMENT k g 1

Standard of Review ........................................................................ k g 1

I. AppelIant Cannot Evade the Commission’s Exclusive Jurisdiction to Determine how Cable Television Companies are Assessed ...................................................... k g 4

A. The Commi-ssion has Exclusive Jurisdiction to Determine how AppelIant’s Property Should be Assessed ................................................... k g 4

13. Appellant Cannot Engage in Fonun Shopping to Evade the Commission’s Jurisdiction ................... k g 7

11. The Circuit Court Properly Dismissed AppeIlant’s Claims Under Ark, Code Ann. 5 26-35-901, and Appellant Failed to Substantively Address the Bases for Dismissal in its Initial Brief ......................................... Arg 10

A. Section 901 is a General Statute That Must Yield to the Specific Appellate Procedures in Ark. Code Ann. 5 26-24-123 ...................................Arg 11

B. The Recently Amended Section 901 Prohibits the Type of Claim Appellant Pursues ..................... Arg 13

TOC 1

C. Even if the CZq County Dicta Survived the 1999 Amendment, it Would be Inapplicable to the hstant Case ................................................ . . . k g 15

D. Even if Appellant had a Separate Claim Under Section 901, the Conmiission was not

Party in the County Court Action ........ .._ ............. Arg 16

111. Appellant Cannot EVE& the Commission’s Jurisdiction Through a Claim for Illegal Exaction. ............................... Arg 1 8

A. Arkansas Law Prohibits an Illegal Exaction Claim Based Upon Statutory Exemptions And Flaws in Assessment .......................................Arg 19

B. Even If Appellant had an Illegal Exaction Claim, It was Required to First Develop This Claim . . at the Commission.. ..................................... ..A ...... ..Arg 2 1

C. Appellant Asks the Court for Improper Advisory Opinions on Matters That are not Substantively Before the Court .................................................... . . k g 23

IV. The Circuit Court Correctly Dismissed Appellmt’s Claims on Res Judicata Grounds.. ..................................... Arg 24

V. AppeIlant’s References to Claims not Listed in the Points on Appeal Should be Stricken From Appellant’s Brief ............................................................... Arg 27

Conclusion ................................................................................... Arg 28

CERTIFICATE OF SERVICE ..................................................... Cert 1

TOC 2

APPELLEES RESPONSE TO JURISDICTLONAL STATEMENT

1. Appellees agree whl~ Appellant that this Court has jurisdiction

to hear this appeal, as this appeal involves interpretation or construction of

the Constitution of Arkansas.

2. Additionally, Appellees note this case involves an issue of first

impression regarding Ark. Code Ann. 5 26-35-901 (Rep]. 1999>, which is an

issue of substantial public interest and is a significant issue needing

clarification or development of the law. Appellant’s chims also involve a

substantial question of law concerning the construction or interpretation of

an act of the General Assembly.

3. I express a belief, based upon a reasoned and studied

professional judgment, that the statements made by the appellant in the

appellant’s Jurisdictional Statement to which I have taken exception are

material to understanding correctly the nature of this appeal and its

disposition in the appropriate appeIIate court.

POINTS ON APPEAL AM) PRINCIPAL AUTHORITIES

Standard of Review

Travis Lumber Co. v. Deichman, 2009 Ark. 299.

I. Appellant C m o t Evade the Commission’s Exclusive Jurisdiction to Determine how Cable Television Companies are Assessed.

A. The Commission has Exclusive Jurisdiction to Determine how Appellant’s Property Should be Assessed.

St Louis-Sun Francisco Railway Ca ’v. Ark. Pub. Sew. Cuwlm’n, 227 Ark. 1066,304 S . W.2d 297 (1 957).

J&MMobile Homes, Inc. v. Hampton, 347 Ark. 126,60 S.W.3d 481 (2001).

B. Appellant Cannot Engage in Forum Shopping to Evade the Commission’s Jurisdiction.

McGehee v. MidSouth Gas Co., 235 Ark. 50,357 S.W.2d 282 (1962).

Hempstead County Hunting Club, Inc. v. Southwestern Electric Power Co., 201 1 Ark. 234.

11. The Circuit Court Properly Dismissed Appellant’s Claims Under Ark. Code Am. 5 26-35-901, and Appellant Failed to Substantively Address the Bases for Dismissal in its Initial Brief.

State v. Pugh, 351 Ark. 5 , 11,89 S.W.3d 909,912 (2002).

A. Section 901 is a General Statute That Must Yield to the Specific AppelIate Procedures in Ark. Code Ann. 5 26-24-123.

&ark Gas P@elins C o p v. Ark. Pub. Sew. Comm h, 342 Ark. 59 I 29 S.W.3d 730 (2000).

POA 1

Ballheimer v, Service Finance Cor-p., 292 Ark. 92,95,728 S.W.2d 178, 179 (1 987).

B. The Recently Amended Section 901 Prohibits the Type of Claim Appellant Pursues.

Ark. Code Ann. 6 26-35-901 (Repl. 1999).

Ark. Code Ann. 8 26-28-1 1 I(c).

C . Even if the Clay County Dicta Survived the 1999 Amendment, it Would be Inapplicable to the Instant Case.

McGehee v. MidSouth Gas Co., 235 Ark. 50,357 S.W.2d 282 (1962).

Robinson v. ViZZines, 2009 Ark. 632.

D. Even if Appellant had a Separate Claim Under Section 901, the Commission was not a Party in the County Court Action.

Austin v. Centerpoint Energy Arkla, 365 Ark, 138,226 S.W.3d 814 (2006).

J&MMobile Homes, Inc. v. Humpton, 347 Ark. 126, 60 S.W.3d 481 (2001).

111. Appellant Cannot Evade the Commission’s Jurisdiction Through a Claim for Illegal Exaction.

A. Arkansas Law Prohibits an Illegal Exactiori Claim Based Upon Statutory Exemptions and FIaws in Assessment.

Cook v. State, Dept. of Finance and Admin., 312 Ark. 438,850 S.W.2d 309 (1993).

Robinson v. ViEEines, 2009 Ark. 632.

POA 2

B. Even if Appellant had an Tllegal Exaction Claim, it was Required to First Develop This Claim at the Commission.

AT&T Communications of the Southwest, Inc. v. Ark. Pub. Sew. Comm In, 344 Ark. 188,40 S.W.3d 273 (2001).

Austin v. Centerpoint Energy Arkla, 365 Ark. 138,226 S.W.3d 814 (2006).

C. Appellant Asks the Court for Improper Advisory Opinions on Matters That are not Substantively Before the Court.

Walker v. McCuen, 3 18 Ark. 508,886 S.W.2d 577 (1994).

IV. The Circuit Court Correctly Dismissed Appellant's Claims on Res Judicata Groun&

Mohawk Tire and Rubber Co. v. Brider, 259 Ark. 728,536 S.W.2d 126 (1 976).

Barclay v. Waters, 357 Ark. 386,394, 182 S.W.3d 91,95 (2004).

POA 3

TABLE OF AUTHORITIES

CASES

A r b a s Teacher Retirement System v. Short, 201 1 Ark. 263 ................................................................................ f% I

Ark. Electric Cooperative Cor-. v. Ark. Pub. .................. Sew. Comm h, 307 Ark. 171, 818 S.W.2d 935 (1991) f% 2

A T&T Communications of the Southwest, Inc. v. Ark. Pub. Sew. Comm ZZ, 344 Ark. 188, 40 S.'W,Jd 273 (2~01) ............................................................Arg 21, 27

Austin v. Centerpoint Energy Arkla, 365 Ark. 138, 226 S.W.3d 814 (2006) ....................................... 3, 16, 19, 21, 22, 26

Avaya, Inc. v. Ward, Pulaski County Circuit Court, NO. 60-CV-07-9779 ............................................................... Arg 14, 16

Ballheirner v. Service Fiaance Curp., 292 Ark. 92, 723 S.W.2d 178(1987) ...................................... Arg 11-12

Barclay v. Waters, 357 Ark. 386, 182 S.W.3d 91 (2004) ............ Arg 24

Brandon v. Arkansas Western Gas Co., 76 Ark. App. 201, 61 S.W.3d 193 (2001) ..................................................................Arg 24

Bryant v. Picado, 33 8 Ark. 227, 996 S.W.2d 17 (1999) .................................................................. Arg 27

Centerpoint Energy, Inc. v. Miller County Circuit Court, 370 Ark. 190, 258 S.W.3d 336 (2007) ............... k g 3 4

Chicago, R.I. & P. Ry. Co. v. Perry County, 173 Ark. 761, 293 S.W. 33 (1927) ...............................................Arg 17

Clay- Comfy v. Brown Lumber Co., 90 Ark. 413, 119 S.W. 251 (1909) ............................................Arg IO, 12, 13, 15, 17

TOA I

Commercial Printing Cu., h e . v. Arkansas Power and Light Co., 250 Ark. 46 1, S.W.2d 261 (1971) .................................... A r g 3, 7-9, 12, 15,ZZ-23,25

Cook v. State, Dept ofFinance and Admin., 312 Ark. 438, 850 SW.2d 309 (1993) .........................................Arg 19

Guckett & Brown, P.A. v. Wilson, 3 14 kk. 578, 864 S.W.2d 244 (7993) ................................................................ Arg 26

Cullurn v. Seagull Mid-South, Inc., ........................................... 322 Ark. 190, 907 S.W.2d 741 (1995) A% 3

.................... Ellis v. Ark. State Highwq Comm ’n, 20 10 Ark. 196 k g 5

Falcon Cable Media LP v. Ark. Pub. Sew. Comm., Pulaski County Circuit Court (Third Division), Case No. 60-CV-10-5798 .......................................................... Arg 5 4

First Nat. Bank of Ft. Smith v. Nowis, 1 13 Ark. 138, 167 S.W. 481 11914) ....................................................................Arg 17

General Tel. Cu. of the Suuthwest v. Lowe, ......................................... 263 Ark. 727, 569 S.W.2d 71 (1978) 3 7 7

Humbay v. Williams, 373 Ark. 532, 285 S.W.3d 239 12008) . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . .Arg 20

Hamilton v. Arhnsas Pollxtim Control & Ecology Cumm’n, 333 Ark. 370, 969 S.W.2d 653 (1998) ......................... A r g 25

Hempstead County Hunting Club, Inc. v. Southwestern Electric Power Co., 2011 Ark. 234 ................................Arg 3, 8, 14, 22

J&MMobik Homes, Inc. v. Hampton, 347 Ark. 126, 60 S.W.3d 481 (2001) .............................................................Arg 5 , 17

Leathers v. Medlock, 499 U.S. 439 (1991) ..................................Arg 28

TOA 2

McGehee v. Mid South Gus Cu., 235 Ark. 50,357 S.W.2d 282 (1962) ............. Arg 3, 7,9, 15,22-23,25

Medlock v. Leathers, 3 1 1 Axk. 175, 842 S. W.2d 428 ( I 992) ...... Arg 28

Miller v. Leathers, 3 12 Ark. 522, 851 SiW.2d 421 (1993) ................................................................... 20

Mohawk Tire ami Rubber Co. v. Brider, 239 Ark. 728, 536 S.W.2d 126 (1976) .................................. Arg 24-26

Muldoon v. Martin, 103 Ark. App. 64, 286 S,W.3d 201 (2008) ................................................................ Arg 16

Nwih Hills Memorial Gardens v. Simpsun, 23 8 Ark. 1 84, 38 1 S.W.2d 462 ( 1964) ................................................................ Arg 25

Oklahoma Gas and Electric Co. v. Lun/@ord; 278 Ark. 595, 648 S.W.2d 65 (1983) .......... k g 3 9 7

&ark Gas Pipeline Curp. v. Ark. Pub. Sew. Comrn’n, 342 Ark. 591,29 S.W.3d 730 (2000) ........ Arg 2, 11, 13

Paschal v. Munsey, 168- Ark. 58,268 S.W. 849 (1 925) .............. Arg 17

Pledger v. Featherlite Precast Copp., 308 Ark. 124, 823 S.W.2d 852 (-1992) ................................................................ Arg 20

Ritchie Grocer CQ. v. City of Texarkana, 182 Ark. 137, 30 S.W.2d 213 (1930) ........................................... Arg 17

Robinson v. Villines, 2009 Ark. 632 .......,..............................Arg 16, 20

Southwestern Bell Mobile Systems, hc. v. Ark. Pub. Sew. Comm ’n, 73 Ark. App. 222, 40 S.W.3d 838 (2001) ..........................................................Arg 2, 5, 11

TOA 3

St. Louis-San Francisco Railwq Co. v. Ark. Pub. Sew. Cumm 'n, 227 Ark. 1066, 304 S.W.2d 297 (1957) ............ f%4,5

Stufe v, Pugh, 351 Ark. 5 , 89 S.W.3d 909 (2002) ....................... ..g 10

Taber v. Pledger, 302 Ark. 484, 791 S.W.2d 361 (1990) ................................. ...... Arg 19

Travis Lumber Co. v. Deichmn, 2009 Ark. 299._ ...................._... k g 1

Tryon v. Hobbs, 2011 Ark. 76 ......................................................Arg 18

Terthill v. Ark. Coundy Equalization Bd., ........................................... 303 Ark. 387, 818 S.W.2d 935 (1991) k g 2

Villines v. Harris, 362 Ark. 393, 208 S.W.3d 763 (2005) ................................................................~g 27

Walker v. McCuen, 318 Ark. 508, 886 S.W.2d 577 (1 994) ................................................................ Arg 23

Walton v. Arkansas Counfy, 153 Ark. 285, 239 S.W. 1054 (1922) .................................................................. Arg 17

Western Foods, Inc. v. Weiss, 338 Ark. 140, 992 S.W.2d 100 (1999) .................,,..................,.......................~~ 20

Withrow v. Larkin, 421 U.S. 35 (1975) ......................................~~g 26

STATUTFS

...................................................... Ark. Code Ann. § 23-2-423(c) k g 2

Ark. Code Ann. 9 26-3-302 .,,................................................Arg 11, 13

......................................................... Ark. Code Ann. 5 26-24-101 k g 5

Ark. Code Ann. 9 26-24-103 ................................ Arg 4, 12, 14, 16, 18

TOA 4

Ark . Code Ann . tj 26-24-123 .......................................................p assim

Ark . Code Ann . lj 26-26-1 601, et seq .................... Arg 9, 1 1 , 14: 22-23

Ark . Code Ann . $ 26-26-1610 ....................................................... & 7

Ark . Code Ann . $ 26-26- 1 6 1 2 ..................................................... Arg 18-

26-28-111(c) ............................................. Arg 13-15

Ark . Code Ann . 4 26-35-901 ............................................. Arg 5, 10-18

Ark . Code Ann .

MISCELLANEOUS

Ark . Dist . Ct . R . 9 ........................................................................ Arg 17

Ark . Atty . Gen . No . 2004-354 ..................................................... Arg 11

Ark . SUP . Ct . R . 5-2 ................................-.................................... A r g 14

TOA 5

SUPPLEMENTAL ABSTRACT

[Abstracter's Note: In accordance with Ark. Sup. 0. R. 4-2(bj(l) a d the

inaccuracies and omissions Jiom Appellant's Abstract, Appellees submit the

following Supplemental Abstpact using the record reference @.-,LA frum

proceedings in the Trial Court to correct imccuraeies a d omissions from

Appellant's Abstract upzd assist this Court in a determination of this matter. J

Hearing of November I , 201 0

I f they are allowed to do that, then your appellate Mr. Lemley:

statute, ACA § 26-24-123 has absolutely no meaning. (R 1134, L.18).

Mr. Lemley: We don't have to look very far in this case because the

original Complaint said it was a direct appeal of those Commission Orders of

the '06, '07, and '08 dockets, and those are out now under the Amended

Complaint. But, as stated in the original Complaint, those Orders are part of the

record submitted to the Court, and Comcast is here trying to get the same relief

that it could not get under those two Orders. m1139, LS-13).

Mr. Sayre: The challenge was made in 2006, 2007, 2008, and 2009

administratively, and I have been practicing facts controversy work for a Iang

time in Pulaski County and have never seen such a Byzantine operation.

SuppAbl

Though we asked to be exempted from them, you’ve got to go through the same

procedures that they apply to rate increases, having prepared testimony made

public and done sixty to ninety days ahead of time, and aII of this matter.

m1150, L.7-16).

Mr. Lemley: That entire argument on the merits of the case has been

lost twice by Corncast before the Commission and has been lost a third time by

Charter. Charter’s is now on appeal to the Third Division, Judge Moody, who

has subject matter jurisdiction. @.I 156, L.13-15).

Mr. LemIey: When a docket gets started, you get a Designation

Order telling you exactly what’s going to happen and, if you want to appeal, it

explains the exact steps to take. It’s pretty coherent, because Charter followed it

to a tee and have the proper appeaI under ACA 8 26-24- 123. (R.1157, LS-11).

Hearing of Nuvember 23,201 0

Mr. Sayre: You can’t raise an illegaI exaction question before an

administrative body, for they can’t d e on it. We didn ’f {emphasis added) raise

it in the County Court action (R.1168, L.22-25) filed here, and we raised the

Su p PA b2

claim for refund under ACA Q 26-35-901. (R.11699 L.1-2).

I’m very sorry I didn’t raise this in detail on the fist, but that morning, I’d

culminated a rather turbulent period of time in our challenge to the Amendment

Number Two, Issue Number Two m the ballot with Judge McGowan, and we’d

fmished that and came over here (R.1170, L.20-25) to argue this case. But,

upon reflection and review of the Briefs and especially review of the Transcript,

this isn’t a flaw in the assessment process, one of those cases cited by the PSC

referring to excessive valuation. If that is the question, it’s clear we don’t have a

leg to stand on with regard to jurisdiction. But, this is an extra statutory

authorization, action taken without the proper authority by an administrative

agency. (R1171, L.1-10).

Mr. LemIey: The whole first part of Mr. Sayre’s argument is a11 in

our Brief. I spent a long time telling the Court about it and don’t intend to do it

(R1172, L.23-25) again unless you want me to because we’ve been thxough all

this. But, my understanding of this hearing was to clarify the precedent.

(R.1173, L.1-4).

It wasn’t until today that we got this Motion for Reconsideration, which is

all the same arguments. 1 don’t have anything to tell you that I haven’t already

told you or that we haven’t already written in OUT Briefs. (R1173, L.13-17).

SuppAb3

STANDARD OF REVIEW

The Circuit Court considered matters outside the pleadings when it

granted the motions to dismiss. (Add. 633). This Court treats the dismissal as a

grant of summary judgment. Travis Lumber Co. v. Deichman, 2009 Ark. 299, p.

2 1. This case involves one legal question- whether the Circuit Court had

jurisdiction to review the Commission’s assessment procedures outside the

appellate mechanism provided in Ark. Code Ann. 5 26-24-1 23. There are no

issues of fact in dispute regarding the bases of the Circuit Court’s dismissal.

Appellant makes one general reference to factual issues, but it fails to show any

disputed fact regarding any of the bases of the Circuit Court’s dismissal. See

Appellant Brief, n. 1. Consequently, this Court determines if Appellees are

entitled to judgment as a matter of law. Travis Lumber, 2009 Ark. 299, p. 21.

Additionally, Arkansas law has a clearly stated policy that tax exemption

provisions must be strictly construed against exemption and to doubt is to deny

the exemption. Arkamus Teacher Retirement System v. Short, 20 I 1 Ark. 263,

pp. 5-6. “It is settled that a taxpayer must establish an entitIement to an

exemption beyond a reasonable doubt.’’ Id. at p. 6.

Because Appellant unsuccessfblly attempted to appeal the Cornmission’s

orders, it is important to address what the standard of review would have been

had Appellant properly appealed the Commission’s orders pursuant to Ark.

Code Ann. 6 26-24-123. The Court would have had jurisdiction to review the

Commission’s decision based only upon the record before the Commission.

Southwestern Bell Mibiie Systems, Inc. v. Ark. Pub. Sen. Cumm ’pa, 73 Ark.

App. 222,23 I , 40 S.W.3d 838, 844 (2001). The Circuit Court could not

consider new evidence that was not presented to the Commission. Id. Because

of the separation of powers doctrine; it is not within the province of state courts

to assess property. Ark. Electric Cooperative Curp. v. Ark. Pub. Sew. Comm’n,

307 Ark. 171, 176,818 S.W.2d 935,938 (1991). A court can “reverse property

assessments only in the ‘most exceptional cases,’ and the burden of proof is on

the protestant to show that the assessment is mmifestly excessive or clearly

erroneous or confiscatory.” Id., citing Tuthill v. Ark. County Equalization Bd.,

303 Ark. 387,818 S.W.2d 935 (1991).

Finally, this Court also applies the standard of review for general

Commission orders provided in Ark, Code Ann. 0 23-2-423(~)(3) and (4).

Uzark Gas Pipeline C o y . v. Ark. Pub. Sen. Comm h, 342 Ark. 591,596-97,29

S.W.3d 730,732-33 (2000).

ARGUMENT

Appellant attempts to coIIaterally attack two Commission orders after

Appellant failed to appeal those orders. In every case where a litigant tried to

evade the Commission’s jurisdiction, this Court has held the -trial couri lacked

subject matter jurisdiction. Hempstead County Hunting Club, Ipac. v.

Southwestern Electric Power Co., 201 1 Ark. 234, p. 10; Centerpoint EnerD,

I m . v. Miller County Circuit Court, 370 Ark. 190,202-03, 258 S.W.3d 336, 345

(2007); Austin v. Centerpoint E n e r a Arkla, 365 Ark. 138, 153-54,226 S. W.3d

8 14,824-25 (2006); Culkum ‘v. Seagull Mid-South, Inc., 322 Ark. 190, 194-98,

907 S.W.2d 741,743-45 (1 995); Oklahoma Gas and Ekckic Cu. v. Lanvord,

278 Ark. 595, 59748,648 S.W.2d 65,66 (1983); General Tel. Co. of the

Southesf v. Lowe, 263 Ark. 727,730,569 S.W.2d 71, 73 ( I 978); Cummsrcial

Printing Cu., hc. v. Arkansas Power and Light Co., 250 A-k. 461,466,468-69,

S.W.2d 261,265 (1971); McGehee v. Mid South Gas Co., 235 Ark. 50, 58-59,

357 S.W.2d 282,288 (1962).

Never in the history of Arkansas jurisprudence has a litigant been

permitted to evade the Commission’s jurisdiction. Appellant fails to show any

basis for this Court to create a new exception in this case. This Court should

affirm the Circuit Court’s dismissal of AppeIlant’s claims.

I. Appellant Cannot Evade the Commission’s Exclusive Jurisdiction to Determine how Ca bIe Television Corn panies a r e Assessed.

The Circuit Court’s order adopted all reasons stated in the motions to

dismiss, which included a thorough discussion of the Commission’s exclusive

jurisdiction. (Add. 437,440-41,58648,633). Judge Piazza even stated from

the bench “1 think the core issue is whether the Public Service Commission was

correct in their assessment.” (R. 1176). Appellant has chosen to s k i r t this issue

an appeal. However, an analysis of the Commission’s exclusive jurisdiction is

essential to understanding why Appellant cannot have separate causes of action

to evade the Commission’s jurisdiction.

A. The Commission has Exclusive Jurisdiction to Determine how Appellant’s Property Should be Assessed.

The Commission has exclusive jurisdiction to assess Appellant pursuant

to Ark. Code Ann. 8 26-24-103. It has long been the rule in Arkansas that

courts have no power under the Constitution to assess property; courts can only

review the actions of assessing officers. Sf. Louis-Sm Francisco Railway Co. v.

Ark. Pub. Sew. Comm’n, 227 Ark. 1066, 1069,304 S.W.2d 297,299 (1957).

This rule prevents the Circuit Court fiom obtaining jurisdiction over the

Commission’s assessments unless AppelIant complied with the appeIlate

procedures in Ark. Code Ann. 4 26-24-123. Appellant admits it failed to appeal,

and the cases are legion that failure to timely appeal deprives the courts of

subject matter jurkdiction. E.g., EZZis v. Ark State Highway Cumm 22,201 0 Ark.

196, p. 1, Once Appellant failed to appeal its 2005-2008 assessments, it was

impossible for the Circuit Court to acquire jurisdiction over Appellant’s

assessments. J&MMobile Homes, Inc. v. Nampton, 347 Ark. 126, 13 1, 60

S.W.3d 481,484 (2001).

Even if Appellant timely appealed under Ark. Code Am. 0 26-24- 123, the

Circuit Court could only review the Commission’s decision based upon the

record before the Commission; it could not consider new evidence.

Southwestern Bell, 73 Ark. App. at 23 I , 40 S.W.3d at 844. In reaching that

conclusion, the Southestern Bell court properly interpreted St. Louis-Sun

Francisco Railway Co. and Ark. Code Ann. 0 26-24-10 1 (l)(B)(i)(b).

Appellant’s claims under Ark. Code Ann. 8 26-35-901 and illegal

exaction present one issue- whether Appellant’s intangible property should be

assessed. (R. 1 153, lines 16-21; R. 1 167, lines 6-9). This was the same issue in

Appellant’s 2006-2008 dockets where the Commission held it was appropriate

to assess Appellant’s intangibIe property. (Add. 457-68,48 1-93). This is the

same issue in Appellant’s 2009 docket, which remains pending before the

Commission. (Add. 495-524). This is the same issue in Falcon Cable Media

LP v. Ark. Pub. Sew. Cmnm., Pulaski County Court (Third Division) Case No.

60-CV- 10-5798, which is an appeal by another cable television company

A% 5

pursuant to Ark. Code Ann. 5 26-24-123.’ (Add. 600-621). Any substantive

analysis of this issue in the instant case would usurp both the Commission’s

jurisdiction and the Pulaski County Circuit Court, Third Division’s jurisdiction

in Case No. 60-CV-10-5798.

Appellant cannot evade the appellate procedures in Ark. Code Ann. 5 26-

24-123-by filing a lawsuit. E.g., Centerpoint Enera, 370 Ark. at 202-03,258

S.W.3d at 344-45. This Court held that parties cannot artfully plead claims to

escape the Commission’s jurisdiction, stating “this court must look beneath the

labels and inquire into the txue nature of the complaint.’’ Centerpoint Energy,

370 Ark. at 202-03,258 S. W.3d at 345. Looking beneath the labels, the

Amended Complaint is an attempt to belatedly appeal the Commission’s earlier

orders. This Court need not look far- Appellant’s original complaint directly

attempted to appeal these orders pursuant to Ark. Code Ann. 9 26-24-123.

(Add. 132, 136-37). The Commission has twice held that Appellant’s intangible

property is not exempt from assessment, arid Appellaslt has twice failed to

appeal those orders. As discussed in Section B., infru, that failure to timely

appeal exhausted Appellant’s right to judicial review.

That case is where this Court will substantively address whether the

Commission should assess the intangible property of cable television companies.

B. Appellant Cannot Engage in Forum Shopping to Evade the Commission’s Jurisdiction.

This Court has a long history of prohibiting forum shopping to evade the

Commission’s- jurisdiction See cases cited at p. 3, supra. When the litigant has

a fuI1, adequate and compIete remedy at the Commission, the trial court cannot

have subject matter jurisdiction. Oklahoma Gus, 278 Ark. at 597-98, 648

S.W.2d at 66; General T d Co., 263 Ark. at 730,569 S.W.2d at 73; Cummerciul

Printing, 250 Ark. at 469-70,466 S.W.2d at 265-66; McGehee, 235 Ark. at 56-

59: 357 S.W.2d at 287-88. There is no dispute Appellant could have raised the

same issues before the Commission under Ark. Code Ann. $ 26-26- 16 10(b) that

it brought before the Circuit Court. In fact, Appellant previously raised before

the Commission most ofthe issues that it brought in the Circuit Court.

Consequently, Appellant had a hll, adequate and complete remedy at the

Commission. McGehee, 235 Ark. at 58,357 S.W.2d at 288.

Two of the above cases specifically dealt with failed appeals from

Commission orders. In McGehee, this Court said that McGehee’s failure to

appeil the Commission’s order will not vest jurisdiction in the trial court. 235

Ark. at 58-59,357 S.W.2d at 288. It is impossible for jurisdiction to be

reinstated in the trial court once the litigant fails to appeal the Commission’s

order. Id- In Commercial Printing Co., this Court explained that allowing

judicial review after the statutory appellate deadline would eradicate the statute

providing judicial review. 250 A&. at 466,466 S*W.Zd at 264. “The effect of

such action would result in appellant being given a judicial review several

months subsequent-to the legal time limit provided in Ark. Stat. Ann. 5 73-233.”

Id. Both these decisions make clea that Appellant’s failure to timely appeal the

Commission’s orders now precludes any subsequent judicial review.

Most recently this Court issued its opinion in Hempstead County Hunting

Club, lnc. v. Southwestern Electric Power Co., 201 1 Ark. 234. The Petitioner

filed suit in federal court seeking interpretation of statutes enforced by the

Commission. Id. at p. 1-2. This Court held that judicial relief is Iimited to an

appeal of a Commission order. Id. at p. 10. While that case involved f a k e to

exhaust administrative remedies, the Court expressed a clear policy against

forum shopping to evade the Commission’s jurisdiction. Id. The instant case

has a factual distinction from Hempstead County in that Appellant has already

exhausted its administrative and judicial remedies. Appellant’s forum shopping

is much worse- while the Hempstead County Petitioner asked the district court

to preempt the Commission, Appellant asked the Circuit Court to reverse the

Commission outside of an allowed appeal.

Appellant twice brought its claims to the Commission, twice received

adverse rulings, and twice failed to appeal. Appellant now wants to pretend that

the Commission proceedings never happened. In tbe process, Appellant has

shown a blatant disrespect for the Commission, describing the Commission as a

“Byzantine opedon” that is ‘‘worse than the kangaroo court,” 1 1 50, 1 155).

Appellant also makes disrespectfir1 c o m f i t s abaut Commission employees,

who are officers of the State. (Appellant Brief, p. 15). Appellant’s frustration is

misguided; it is Appellant’s o m failure to appeal that exhausted judicial review

of its claims. McGehee, 235 Ark. at 58-59, 337 S.W.2d at 288; Commercial

Printing Co., 250 Ark. at 466,466 5.W.2d at 264.

AppeIIant cannot escape the fact that the Commission has exclusive,

original jurishction to determine whether a cable television company’s

intangible property should be assessed and whether cable television companies

should be assessed pursuant to the procedures provided in Ark. Code Ann. 8 26-

26-1601, et seq. The Commission has ruled on those issues, and Appellant’s

only right to judicial review was through Ark. Code Ann. 5 26-24-123. That

remedy is now gone solely because of Appellant’s own failure to timely lodge

an appeal. The Circuit Court correctly held that Appellant could not usurp this

jurisdiction through a sui generis lawsuit.

11. The Circuit Court ProperIy Dismissed Appellant’s Claims Under Ark. Code Ann. 8 26-35-901, and Appellant Failed to Substantively Address the Bases for Dismissal in its Initial Brief.

The Circuit Court dismissed AppelIant’s Section 901 claim for aII reasons

stated in the motions to dismiss. (Add. 63-3). Therefore, the Circuit Court

dismissed this claim on four independent, alternative bases: (1) Section 901 is a

general statute that must yield to Ark. Code Ann. 5 26-24-123; (2) the current

Section 901, as amended in 1999, prohibits Appellant’s claims; (3) the dicta in

Clay County v. Brown Lumber Co. would not apply even if it survived the 1999

amendment; and (4) Section 901 only allows an action at county court, not

circuit court. (Add. 4414,445-47, 588-89). Each of these bases were also

presented at oral argument supporting the motions io dismiss. fR. 1 132-36,

1 144-45, 1172-73).

Appellant f d e d to substantively address any of these bases in its brief.

Appellant only made a general statement that the First Amended Complaint

“should not have been dismissed for any reason asserted in either of the

Appellees’ Motions to Dismiss.” (Appellant Brief, p. 8). Because Appellant

failed to substantively address any of the bases far the dismissal of this claim,

this Court should affirm. State v. Pugh, 351 Ark. 5 , 11, 89 S.W.3d 909, 912

(2002). Nonetheless, Appellees will address each basis for dismissal.

A r g 10

A. Section 901 is a General Statute That Must Yield to the Specific Appellate Procedures in Ark Code Ann. 5 26-24-123.

Section 901 is a general provision that does not apply to cornpm-ies the

Commission assesses. For these companies, the General Assembly established a

specific procedure for judicial review. See Ark. Code Ann. 4 26-24-123;

Southwestern Bell, 73 Ark. App. at 23 1,40 S.W.3d at 844. Thls is a specific

procedure that controls over the general procedure provided in Section 90 I. See,

e.g., Ark. Op. Atty. Gen. No. 2004-354,2005 WL 313716 * 4 (Feb. 3, ZOOS)

(opining that Section 901 is a general provision that must yield to a specific

provision).

Arkansas law is well established that “a general statute must yield when

there is a specific statute involving the particular matter.” ’Ozark Gas Peeline,

342 Ark. at 602,29 S.W.3d at 736. Notably in Ozark Gas Pipeline, this Court

held that Ark. Code Ann. 5 26-3-302 (the statute where AppelIant alleges an

exemption), is a general statute that must yield to the specific statutes of Ark.

Code Ann. 5 26-26- 1601, et seq, which specifically direct the Tax Division to

assess intangible property. 342 Ark. at 602-05,29 S.W.3d at 736-37.

This ruIe prevents litigants fiom rendering specific statutes meaningless.

As this Court has stated, “where a special act applies to a particular case, it

excludes the operation of a general act upon the same subject.” Bdlheimer Y.

Arg I 1

Sewice Finance Corp., 292 Ark. 92,95,728 S.W.2d 178, 179 (1987). To hold

otherwise would render the specific provision meaningless so that the specific

provision would never apply. Id.; see also Commercial Printing Cu., 250 Ark.

at 466,466 S.W.2d at 264. When interpreting the predecessor statute to Section

901, this Court held that failure to appeal in the manner provided by statute

“precludes relief by my other proceedings.” Ckq County v. Brown Lumber Co.,

90 Ark. 413,417, 119 S.W. 251,252-53 (1909).

Following this weII established rule, the specific appeIlate procedures set

forth in Ark. Code Ann. 5 26-24-123 must govern over Section 901. Otherwise,

Ark. Code Ann. 5 26-24- 123 becomes meaningless. AppelIant’s behavior

illustrates why Arkansas has long followed this rule. Appellant first attempted

to follow Ark. Code Am. 5 26-24-123 but faiIed to timely appeal. If AppelIant

can now circumvent this statute through Section 901, then Ark. Code Ann. 0 26-

24- 123 has no meaning. AdditionaIIy, the Commission’s exclusive jurisdiction

of assessment pursuant to Ark. Code Ann, $26-24- 103 would have no meaning

if Appellant can use a general provision to manufacture subject matter

jurisdiction in the Circuit Court independent of the record before the

Commission. The Court should avoid t h i s jurisdictional error and apply the long

established rule that Ark. Code Ann. § 26-24-123, a specific provision, must

govern over Section 901, a general provision.

A r g 12

B. Tbe Recently Amended Section 901 Prohibits the Type of Claim AppelIant Pursues.

Section 901 is a long-standing Arkamas statute, see Clay Couknv., 90 Ark.

41 3,119 S,W. 25 1, but it was recently amended in 1999. The current Section

901 limits its application to propew “erroneously assessed, as defined and

described in $ 26-28-1 ll(c).” See Ark. Code h. 5 26-35-901(a)(l). The

current Section 901 is now limited to “actual and obvious errors on the tax

books and related records, with such errors being restricted to extension errors,

erroneous property descriptions, dassifications, or listings.” See Ark. Code

Ann. § 26-28-1 1 l(c). Although the 1999 amendment was extensively argued

below, Appellant failed to acknowledge the 1999 amendment in its initial brief,

Appellant failed to present any “actual and obvious errors” as required by

the current Section 901 In fact, Appellant argued below that Section 901 is not

limited to the four items specifically provided in Ark. Code Ann. 6 26-28-

1 1 1 (c). (R. I 152, lines 1 1-1 7). Appellant only presented legal arguments that

were previously rejected by both this Court and the Commission. Appellant

alleged its intangible property is exempt pursuant to Ark. Code Ann. 5 26-3-302,

but this argument was rejected in &ark Gas Pipeline, 342 Ark. at 602-05,29

Arg 13

S . W.3d at 736-37. Appellant also alleged it is not a utility2 and should be

assessed differently, but the Commission rejected this argument in its final

orders holding that Ark. Code Ann. 55 26-26-1601, et seq, apply to cable

televis-ion-companies. (Add. 457-68,48 1-93,6O7-2 1).

Appellant places mistaken reliance upon Avqa, Inc. v. Ward? Pulaski

County Circuit Court, No. 60-CV-07-9779. Avaya was not appeaIed, and the

circuit court’s order has no precedentid effect. See Ark. Sup. Ct. R. 5-2(c). The

Avaya decision failed to limit Section 901 tu property erroneously assessed, as

defined and described in Ark. Code Ann. 8 26-28-1 1 l(c). This was error

because Section 90 1 must be construed ‘Ljust as it reads, giving the words their

ordinary and usually accepted meaning in common language.” Henapstead

County, 201 1 Ark. 234, p. 5 . Presumptively, the Avaya court’s error would have

been corrected an appeal hadone been taken.

Section 901, as amended in 1999, clearly reads that it is specifically

limited to the four types of erroneous assessment listed in Ark. Code Ann. Q 26-

28- 1 1 l(c). Even if Section 901 could grant a limited form of concurrent

jurisdiction, that jurisdiction would be limited to extension errors, erroneous

._ _ _

The statute granting the Commission exclusive jurisdiction to assess Appellant

is titled “Assessment of utility property.” See Ark. Code Ann. 5 26-24-1 03.

Arg 14

property descriptions, classifications, or listings, as provided in Ark. Code Ann.

6 26-28-1 1 l(c). Appellant never presented the Circuit Court: with any of these

four types of erroneous assessment.

C. EverPif the CZay-rY-cozuz@ Dicta Survived the 1999-Amendment, it WmM be InagpIicaMe to the Lnstant Case.

In dicta at the end of the opinion, the Clay County court considered

limited exceptions to the predecessor statute of Section 901. CZuy County, 90

Ark. at 420, 1 19 S. W. at 253-54. It is crucial to mte the Legislature rejected

these exceptions in 1999 when it enacted the current Section 901. Compare

Clay County, 119 S.W. at 253-54 with Ark. Code Ann. $5 26-35-901(a)(l), 26-

28-1 1 l(c).

Even if the Court read the CZay Counw dicta into ~e 1999 amendment,

none of the exceptions would apply in h e instant case. First, as discussed

above, Appellant’s arguments regarding exemption were previously rejected by

the Commission and this Court. The CZay Corn@ dicta addressed the situation

where property had been established as exempt prior to the assessment.

Conversely, the Commission has held that Appellant’s intangible property is not

exempt, and Appellant’s failure to timely appeal precludes any further judicial

review. McGeJzes, 235 Ark. at 58-59,357 S.W.2d at 288; CuPnrnsrcial Printing

Co., 250 Ark. at 466,466 S.W.2d at 264. Appellant c m o t simultaneously

Arg 15

create the exception it seeks to enforce; the exception must exist prior to

enforcement. Second, Appellant does not allege the tax is invalid; it only

complains of the assessment. A flaw in the assessment, no matter how serious

from Appellant’s point of view, does not make the tax invalid. Robinson v.

Yillines, 2009 Ark. 632, p. 6. Finally, it is impossible for the assessment of

Appellant to be beyond the Commission’s jurisdiction when the Commission

has the exclusive power of original assessment of cable television companies

pursuant to Ark. Code Ann. $26-24-1-03.

I). Even if Appellant had a Separate Claim Undersection 901, the Commission was not a Party in the County Court Action.

Appellees are fm that Appellant cannot initiate an action in any court

against the Cornmission outside an allowed appeal. E.g., Austin, 365 Ark. at

153-54,226 S.W.3d at 824-25 (2006). Appellees are aware of no case, and

Appellant has cited none, where an action was successhlly maintained against

the Commission outside of an allowed appeal. The argument in this section is

an dternative if the Court abandons decades of precedent to create a new device

for suing the Cornmission outside of an allowed appeal.

The only remedy provided by Section 901 is an action at the county court,

not the circuit court. See Ark. Code Ann. 5 26-35-901; Mulduon v. Martin, 103

Ark. App. 64,65,286 S.W.3d 201,202 (ZOOS); see also Avayu, Inc. v. Ward,

Arg 16

Pulaski County Circuit Court No. 60-CV-07-9779 (appeal fiom county court

decision pursuant to Section 901). Every case under the predecessor statute was

an appeal to circuit court &.om a suit filed against the assessor in county.court.

E.g., Ritchie Grocer Co. v. City of Texarhm, 182 Ark. 137,30 S.W.2d 213

(1930); Chicago, R.1. & P. Ry. Co. v. Peny County, 173 Ark. 761,293 S.W. 33

(1927); Paschal v. Munsey, 168 Ark. 58,268 S.W. 849 (1925); Waltm v.

Arkansas CounQ, 153 Ark. 285,239 S.W. 1054 (1922); First Nut. Bunk of Ft.

Smith v. Norris, 113 Ark. 138, 167 S.W. 481 (1914); Clay County, 90 Ark. 413,

119 S.W. 251.

The Commission is the assessing authority over Appellant, but Appellees

the Cornmission and Bradshaw were not parties to the county court action.

(Add. 1 - 32). It is axiomatic that AppeIlant cannot add parties or claims to its

appeal of the county court’s decision. See Ark. Dist. Ct. R. 9. Appellant has no

order to appeal from that invoIved the Commission and Bradshaw as parties. It

was impossible for Appellant to perfect an appeal against Bradshaw and the

Commission pursuant to Ark. Dist. Ct. R. 9 and thus, it was impossible for the

Circuit Cowt to acquire jurisdiction. J&MMobile Homes, 347 Ark. at 13 I, 6Q

S.W.3d at 484.

It is also axiomatic that any claim regarding an assessment can only be

brought against the assessor. Appellees Pulaski County Defendants are bound

h g 17

by law to accept the assessment provided to them by the Commission. See Ark.

Code Ann. 5 26-26-16 12. No county official has the authority to change the

assessment provided by the Commission. Id. Obviously, the remaining tax

proceeds recipient Appellees have nothing to do with the Commission’s

assessments. Appellant cites to no authority that wouId allow a claim regarding

an assessment to be brought against any party other than the assessor. An

argument without convincing citation to authority is not well taken. T ~ o n v.

Hobbs, 201 I Ark. 76, p. 4.

Appellant’s Section 90 1 claims against all Appellees amount to nothing

more than a collateral attack on the Commission’s assessments of Appellant.

Section 901 simply cannot grant subject matter jurisdiction over the

Commission’s assessments to the Circuit Court. To allow this case to proceed

under Section 901 would render Ark. Code Ann. §§ 26-24- 103 and 26-24-1 23

meaningless. Such a result is prohibited by Arkansas law, and Appellant’s

Section 90 1 claims were properly dismissed.

111. Appellant Cannot Evade the Commission’s Jurisdiction Through a CIaim for Illegal Exaction.

Appellant’s illegal exaction claim was specificdy addressed by both

motions to dismiss. (Add. 441-448, 532-34,536-37,586,588-89). At oral

argument supporting their motion to dismiss, counseI for Appellees argued

Arg 18

against Appellant’s illegal exaction claim. (R. 1 137, 1 172-73, 1 176). The

Circuit Court dismissed Appellant’s illegal exaction claim for the reasons stated

in the motions to dismiss. (Add. 633).

This Cowt has already rejected an attempt to evade the Commission’s

jurisdiction through a claim for illegal exaction. Austin, 365 Ark. 138,226

S. W.3d 8 14. The plaintiff in that case labeled a surcharge as a tax to

manufacture an illegal exaction claim. Austin, 365 Ark. at 147,226 S.W.3d at

820. This Cowt rejected that approach and affirmed the dismissal for lack of

jurisdiction. Id. Appellant has taken a similar approach as the unsuccessful

Austin plaintiff, labeling alleged statutory exemptions and assessment flaws as

an illegal exaction.

A. Arkansas Law Prohibits an Illegal Exaction Claim Based Upon Statutory Exemptions and Flaws in Assessment.

Appellant bases its ilIegal exaction claim upon the argument that it was

improperly assessed because its intangible property is exempt pursuant to an

alleged statutory right. This Court has consistently held that an illegal exaction

claim will not lie for such an argument: “[A] suit ‘to determine whether the

taxpayer’s transactions fall within an exemption created by statute’ does not

come within [Ark. Const. Art. 16, 5 131.” Cook v. State, Depf. of Finance and

Adwin., 3 12 Ark. 438,439-40, 850 S.W.2d 309, 3 10 (1993), citing Taber ‘v.

Arg 19

Pledger, 302 Ark. 484,489,791 S.W.2d 361,364 (1990); see also Western

Foods, Inc. Y . Weiss, 338 Ark. 140, 148,992 S.W.2d 100, 103 (1999); Miller v.

Leathers, 312 Ark. 522,523,851 S.W.2d 421,422 (1993); Pledger v.

Featherlife Precast Corp., 308 Ark. 124, 129, 823 S.W.2d 852, 856 (1992). In

eachof these cases, this Court held that an illegal exaction claim will not lie if

the suit is based upon a statutory exemption. Aside from the fact the

Commission has already ruled that Appellant’s intangible property is not exempt

(and Appellant’s judicial remedies are exhausted), this Court’s precedent

prohibits an illegal exaction claim based upon an alleged statutory exemption.

Additionally, this Court repeatedly has held “if the taxes complained of

are not themselves illegal, a suit for illegal exaction will not lie. A flaw in the

assessment or collection procedure, no matter how serious from the taxpayer’s

paint of view, does not make the exaction itself illegal.” Robinson v. Viklirzes,

2009 Ark- 632, p. 6 ; Hambay v. William, 373 Ark. 532,535,285 S.W.3d 239,

241-42 (2008). Appellant’s claims here, just like its claims before the

Commission, are based entirely upon the Commission’s assessment of legal

taxes. There is no basis in Arkansas law for the assessment of legal taxes to be

deemed an illegal exaction.

Appellant ignores this clear precedent. Instead, it opts for random

citations to inapposite cases (Appellant Brief, p. 10- 12), misstates the authorities

Arg 20

relied upon by the Commission below (Id. at n. 3), and misquotes the oral

argument of Commission counsel below. (Id. at n. 5). When discussing the

Section 9Q 1 claim, Commission counsel said “we see lots of words like illegal,

erroneous, unconstitutional, that sort of things. We never once see any of these

four matters that can constitute a chim under 901 .” (R. 1 133). Commission

counsel never stated Appellant had alleged the ad valorem tax in question was

illegal. (R. 1 133, 1 137). The Record contains no allegation of an illegal tax.

The Court will only find allegations of statutory exemptions and improper

assessments, whch cannot amount to m illegal exaction.

B. Even if Appellant had an Illegal Exaction Claim, it was Required to First Develop This Claim at the Cornmission.

Even if Appellant had an illegal exaction claim based upon the

Commission’s assessments, it must first raise this issue before the Commission.

AT&T Cummunicatium of the Southwest, Inc. v. Ark. Pub. Sen. Cumm ’n, 344

Ark. 188, 197,40 S.W.3d 273,279 (2001); Austin, 365 Ark. at 147-50,226

S.W.3d at 820-22. Appellant never raised this issue before the Commission.

The Record does demonstrate that Appellant has a pending docket before the

Commission regarding its 2009 assessment. (Add. 495-524). Appellant would

have to first raise the illegal exaction issue before the Commission. AT&T

Communications, 344 Ark. at 197,40 S.W.3d at 279; see also Austin, 365 Ark.

Arg 21

at 147-50, 226 S.W.3d at 820-22. When Appellant failed to bring the illegal

exaction claim before the Commission for its 2005 - 2008 assessments, it failed

to exhaust its administrative remedies. Austin, 365 Ark. at 147-50, 226 S.W.3d

at 820-22. When Appellant did not appeal under Ark. Code Ann. 5 26-24- 123,

it exhausted its judicia! remedies regarding its 2005 - 2008 assessments.

McGehes, 235 Ark. at 58-59,357 S.W.2d at 288; Commercial Printing Co., 250

Ark. at 466,466 S.W.2d at 264.

Allowing an illegal exaction claim independent of Commission

proceedings would yield the same improper result this Court cautioned against

in Commercial PriBting Co., 250 Ark. at 466,466 S.W.2d at 264. Such a ruIe

would eradicate the review procedures provided in Ark. Code Ann. §§ 26-26-

1601, et seq, and 26-24-123. It would also violate this Court’s ‘‘consistent

holdings that administrative agencies are better equipped than courts- by

specialization, insight through experience, and more flexible procedures- to

determine and ana€yze underlying legal issues affecting their agencies.”

Hempstead County, 201 1 Ark. 234, p. 10.

Appellant never raised the illegal exaction claim before the Commission.

Even if Appellant at one time had a valid illegal exaction cIaim, that cIairn is

now invalid because of Appellant’s inaction that caused exhaustion of any

availabIe judicial remedies.

Arg 22

C. Appellant Asks the Court for Improper Advisory Opinions on Matters That are not Substantively Before the Court,

In this section of its brief, Appellant argues that it cannot be assessed

under Ark, Code Ann. 6 26-26- 1601, et seq. This is the exact same issue that

the Commission ruled against Appellant in the 2006-2008 dockets that

Appellant failed to appeal. Ironically, for all its repetitive tlse of the word

“separate” in its brief, Appellant cannot present the illegal exaction claim

without colIaterally attacking the Commission’s prior orders. As discussed

above, Appellant’s failure to appeal the Commission’s orders precludes any

further judicial review. McGehee, 235 Ark. at 58-59,357 S.W.2d at 288;

Commercial Printing Co., 250 Ark. at 466,466 S.W.2d at 264. Moreover, this

issue was not substantively before the Circuit Court on the motions to dismiss

and was not a basis for the Circuit Court’s dismissal. Any substantive ruling at

this stage of the proceedings would constitute an improper advisory opinion.

Walkr v. McCuen, 318 Ark. 508,516,886 S-W.2d 577,581-82 (1994).

Should the Cowt be interested in the Commission’s analyses for

informational purposes, Appellees direct the Court to the Commission’s detailed

orders in Docket No. 06-097-TD (Add. 457-68) and Docket No. 09- 1 13-TD

(Add. 607-21).

Arg 23

IV. The Circuit Court Correctly Dismissed Appellant’s Claims on Res Judicata GPO unds.

The components of res judicata, claim preclusion and issue preclusion,

are not in dispute and are well stated in Barclay II. Waters, 3 57 Ark. 386,3 94,

182 S.W.3d 91 , 95 (2004). Res judicata bars both claims which were achra€ly

litigated and claims which could have been litigated. Where a case is based on

the same events as the subject matter of a previous lawsuit, res judicata will

apply even if the subsequent lawsuit raises new legal issues and seeks additional

remedies. Id.

There is no dispute that res judicata applies to decisions from

administrative agencies. Mohavk Tire and Rubber C a v. Brider, 259 Ark. 728,

730,536 S.W.2d 126,12% (1976); Brandon v. Ar&nsas Western Gas Co., 76

Ark. App. 201,210, 61 S.W.3d 193,200 (2001). This Cowt has stated that,

when a party fails to appeal an administrative decision, that decision is res

judicata as if the issue had been reviewed by this Court:

Appellants did not appeal to the Supreme Court on the issue of whether a credit should be allowed. Since this issue was submitted to and decided adversely to appellants by the Commission the bar of res judicata is invoked as effectively as if the issue had been presented to this Court.

Mohawk Tire, 259 Ark. at 730,536 S.W.2d at 128. A failure to appeal the

Commission’s prior orders solidifies application of res judicata to the

A r g 24

Commission’s prior orders. Id.; see also McGehse, 235 Ark. at 58-59,357

S.W.2d at 288 (failure to appeal a Commission order exhausts judicial review);

Commercial Printing Co., 250 Ark. at 466,466 S.W.2d at 264 (same).

Appellant ignores Mohawk Tire and instead relies upon the factually

distinguishabk cases North Hills Memorial Gardens v. Simpson, 238 Ark. 184,

381 S.W.2d 462 (1964) and Hamilton v. Arkansas Pollution Control & Ecology

Comm h, 333 Ark. 370, 969 S.W.2d 653 (1998). In North Hills, the reason res

judicuta did not appIy was because the board considered new facts in the second

proceeding. 238 Ark. at 186,381 S.W.2d at 464. In Hamilton, the first

Commission order specifically stated it wouId not bar a subsequent application

by the same party, and the second application was for a different type of

business. 333 Ark. at 375,969 S.W.2d at 656. Other factual differences existed

between the applications, as listed in this Court’s opinion. 333 Ark. at 376,969

S.W.2d at 656-57.

In the instant case, there are no factual differences between Appellant’s

claims before the Circuit Court and Appellant’s claims that were brought, or

could have been brought, before the Commission. (IC. 1153, 1 167). The

Commission held that Appellant’s intangible propem is subject to assessment.

(Add. 457-68,487-93). Appellant repeats this same issue among the same set of

facts under alleged “separate’’ causes of action. Appellant presented no new

Arg 25

facts; it merely sought to relitigate the issue of whether its intangible property is

exempt. Moreover, Appellant failed to appeal the Commission’s orders. Just as

in Mohawk Rubber, res judicata applies just as if this Court affirmed the

Cornmi ssion’s order.

Additionally, issue preclusion does not require mutuality of parties in the

previous litigation; a nonparty to the first action may assert issue preclusion as a

defense in a later actioin. Crockett & Brown, P.A. v. Wilson, 3 14 Ark. 578, 584,

864 S . W.2d 244,247 (1993). Appellees that were not a party to the

Commission proceedings are entitled to dismissal on res judicata grounds with

equal force as the Commission. Appellant appears to have not challenged this

aspect of the Circuit Court’s ruling.

Finally, and again without any supporting authority, Appellant asserts a

“red flag of caution” when the Commission combines investigative and

adjudicative hnctions. Once again, Appellant’s argument has already been

rejected by this Court. Austin, 365 Ark. at 149-50,226 S.W.3d at 822, citing

Withrow v. Larkin, 421 U.S. 35 (1975). Appellant’s assertion is unsupported

and speculative in that it is not substantiated by anything in the Record.

Appellant fails to overcome the presumption of honesty and integrity established

in Withrow,

Arg 26

V. Appellant’s References to Claims not Listed in the Points on Appeal Should be Stricken from Appellant’s Brief.

Appellant has not appealed its other claims that were not listed in the

Points on Appeal. (Appellant Brief, pp. xiii-xiv). However, Appellant did make

two sbay references to its other claims. (Id. at n. 2 and n. 3.) These references

should be stricken from Appellant’s brief.

In an abundance of caution, Appellees will address Appellant’s other

claims that were nat stated in the Points on Appeal. The declaratory judgment

statutes cannot confer subject matter jurisdiction; the Circuit Court needed an

independent basis for jurisdiction before granting a declaratory judgment.

ViZZiws v. Harris, 362 Ark. 393,399,208 S.W.3d 763,767 (2005); Byant v.

Picado, 338 Ark. 227,231,996 S.W.2d 17, 19 (1999). As for alleged

constihrtional v i o l ~ t i ~ n s in Appellant’s assessments, the holding in A T&T

Communications, 344 Ark. at 197,40 S.W.3d at 279, precludes any

constitutional claims. Appellant must first bring these arguments to the

Commission and then appeal pursuant to Ark. Code Ann. 5 26-24-123; it cannot

originate these arguments in the Circuit Court. Moreover, there is no state or

federa1 constitutional provision that prohibits assessment of a cable television

company’s intangible property. Finally, the cable television industry was

soundly defeated on every constitutional issue challenging sales taxes in

Arg 27

Leathers v. Meduck 499 US. 439 (1991) and Medlmk v. Lmthers, 3 1 1 Ark.

175, 842 S. W .2d 428- ( 1 992).

CONCLUSION

For the foregoing m o n s , the Circuit Cwrt did not have subject matter

jurisdictionaver Appelhi’s claims regarding its assessments. The claim

against Appellees were properly dismissed, and the Circuit Court should be

afzmed.

Respectfully submitted,

Kevin M. L e m m 05034)

Dallas W. HeItz(ABN 2010138)

Arkansas Public Service Commission P O Box 400 Little Rock Arkansas 72203-0400

Memley@psc.s&tea.us

dhehgpsc. state. ar. us

Phone: (501) 682-5878 FX (501) 682-6043

kb i lhgs I ey@bbpk aw , corn Jay Bequette (ABN 87012) j.bequetk@bbpalaw. corn Bequette and Billingsky, PA. 425 West Capitol Avenue, Suite 3200 LMe R e k b a s 72201-3469 Phone: (501) 374-1 107

.

F a : (501) 374-5092

Attorneys for Sarah M. Bradshaw a d Adcamas Public Service Commission

Attorneys for Rob McGilI and Putaski county School District

amirche 1 I @c o. p i laski .ar. us 20 I South Broadway7 5uit.e 400 Filfle Rock, ,4R 7220 I Phone: (SOJ 1 340-8285 Far: (50 1 ) 340-8282

-4 1lorneys for Janet Troulman Wardr Dchra Buckner. and Pu laski County. Ark a n 5 as

Phone: 1501’) 982-6303 Fax: {SO 1 j 983-1280

Attorney Cor Gaiy Ftct-fchcr m d C i v of Jac-ksonvil It. Arkansas

CERTIFICATE OF SERVICE

I hereby certify that a copy of the Joint Brief of Appellees has been served on the foIlowing counsel of record for Appellant by forwarding the same by postage prepaid h t class mail on June 24,2011.

Eugene G. Sayre Christopher D. Brockett Hatfield & Sayre 401 West Capitol, Suite 502 Little Rock, Arkansas 72201

c Kevin M. Lemley

Cert 1