Strelecki v. Oklahoma Tax Commission

SUMMERS, Justice,

dissenting to the Order of Clarification but otherwise concurring in denial of rehearing.

The Order of Clarification states that the opinion is binding on the Tax Commission “in other proceedings on refund claims of taxpayers who gave notice of an overpayment and claim a refund of income taxes reported and paid during three years immediately preceding the date of the notice thereof to the OTC.” This language reflects an improper expansion of judicial power.

Our opinion in this case states “Today’s pronouncement addresses only the six claims before us. We express no opinion on the refundability or correctness of other claims.” In Kay Electric Cooperative v. State ex rel. Okla. Tax Commission, 815 P.2d 175 (Okla.1991), we likewise stated that “This Court’s opinion in the present appeal is only binding on the entities which are parties to the actions.” Id., 815 P.2d at 178 . Obviously, a taxpayer who is not before this Court in the present ease is not denied his or her day in court, and remains free to make any legal arguments he or she chooses in other Tax Commission proceedings. Id. Does the same rule apply to the Tax Commission, or is it somehow singled out for different treatment? I maintain the Tax Commission is bound by the opinion, but only to the same extent as any other party.

The exercise of judicial power in a particular case is limited to those parties actually before the court in that proceeding, and this limitation is imposed by the Due Process Clause. Ford v. Ford, 766 P.2d 950, 954 (Okla.1989). The Court today states that certain taxpayers not before us are “similarly situated” to those who are, and that the Tax Commission should pay the claims of these *925 similarly situated taxpayers. The Order of Clarification thus transmutes the proceeding into a type of class action, in that it gives judicial relief to members of a class of taxpayers. See the description of class actions in 12 O.S.1991 § 2022. We have held that a class action to restrain the collection of a tax, or to “roll back” assessed taxes, is improper. Whig Syndicate, Inc. v. Keyes, 836 P.2d 1283, 1287-1288 (Okla.1992). No class has been certified, and no arguments are before this Court that such a class should be, or could be, certified in a proceeding such as this.

The opinion thus grants relief beyond that framed by the parties before us. We have stated that we may raise an issue sua sponte when certain conditions are present. For example, in a public-law controversy on an issue actually raised by a party the Court may supply the theory. First Federal Savings & Loan v. Nath, 839 P.2d 1336 , 1343 n. 35 (Okla.1992). 1 Clearly, this controversy over the extent to which payments from state funds are due these taxpayers based on the U.S. Constitution presents a public-law controversy. 2 But the issue as to whether the scope of the opinion should be enlarged to embrace nonparties so as to provide them relief is raised on a petition for rehearing. Just as this Court in its opinion stated that the Tax Commission was held to its previous arguments, likewise the belated attempt by the taxpayers to expand the reach of judicial process in this ease should be rejected as waived. 3

In Kamen v. Kemper Financial Services, Inc., 500 U.S. 90 , -, 111 S.Ct. 1711 , 114 L.Ed.2d 152 (1991) the Supreme Court stated it could explore theories not advanced by the parties. The Court also explained that when legal theories relevant to a controversy are not examined “truncated law” results. Clearly, a court may decline to examine an untimely claim, and thus an opinion may properly express truncated law. 4 The Court in Kamen explained, however, that an opin *926 ion resting on truncated law should not be used as binding precedent as to theories not examined in the opinion. Id, 500 U.S. at -n. 5, 111 S.Ct. at 1718 n. 5. Likewise, our opinion should not be used as binding precedent as to theories not addressed.

Our opinion here declined to address certain theories because they were not timely preserved by the Tax Commission. The opinion thus embodies truncated law to the extent that any such theories were not adjudicated. If perchance the Tax Commission had a viable argument on a theory not addressed in our opinion (for the reason that we held the Tax Commission bound by its earlier assertions, e.g.), and that theory if properly advanced could result in not paying certain taxpayers a refund in a similar situation, today’s order on rehearing would incorrectly result in a perpetuation of truncated law at the expense of the State treasury. Neither the Tax Commission nor any other parties should be bound in the future as to issues not addressed in tax opinions unless and until an articulated reason for doing so, such as res judicata, has been established by this Court. 5

The Tax Commission is bound by a judgment and must comply with it. Branch Trucking Co. v. State ex rel. Oklahoma Tax Commission, 801 P.2d 686, 690-691 (Okla.1990). However, as we noted in Branch the scope of a judgment, i.e., judicial relief, is determined and limited by the nature of the proceeding before the court. There we explained that the Court did not have the authority to issue a refund because the judicial proceeding was brought to determine the validity of a Commission ordér, as opposed to a protest. Id at 691. Similarly, in this case, we are limited to granting relief to those persons who are parties, i.e., those who are before us in this case. I dissent from the Order of Clarification insofar as it adjudicates the duty of the Tax Commission to pay other taxpayers’ claims not before the Court in this proceeding.

Vice Chief Justice LAVENDER, Justice KAUGER and Justice WATT advise that they join in these views.

. See Kamen v. Kemper Financial Services, Inc., 500 U.S. 90 , 111 S.Ct. 1711 , 114 L.Ed.2d 152 (1991) where the Court explained that when a claim or issue is properly before the Court it is not limited to a particular theory. Id. 500 U.S. at -, 111 S.Ct. at 1718 . But courts are not free to act as advocates and to raise claims that should be raised by the parties. See e.g., Doubleday & Co., Inc. v. Curtis, 763 F.2d 495, 502-502 (2d Cir.1985), cert, denied, 474 U.S. 912 , 106 S.Ct. 282 , 88 L.Ed.2d 247 (1985), (court could not dispose of claim on the basis of waiver defense when defense was not raised by pleading or evidence at trial); State of Nev. Employees Association, Inc. v. Keating, 903 F.2d 1223 , 1225 (9th Cir.1990), cert, denied, 498 U.S. 999 , 111 S.Ct. 558 , 112 L.Ed.2d 565 (1990), (court should not sua sponte raise defense of res judicata without affording the parties an opportunity to brief the issue).

. See State ex rel. Oklahoma Tax Commission v. Emery, 645 P.2d 1048 (Okla.App.1982), (Approved for publication by Supreme Court) where the court explained that the power of taxation is a sovereign power essential to the existence of State government, and Phillips v. Oklahoma Tax Commission, 577 P.2d 1278 (Okla.1978) where we explained that a question on the constitutionality of use tax codified at 68 O.S.Supp.1977 § 1402a was one of great public concern.

. Within the framework of judicial review personal and private rights and claims may be waived, and thus not reviewed, but law involving the power or structure of government as such relates to the claims of the parties actually before the court may not be waived. Commodity Futures Trading Commission v. Schor, 478 U.S. 833, 848-851 , 106 S.Ct. 3245, 3255-3257 , 92 L.Ed.2d 675 (1986), (contrasting personal constitutional rights to U.S. Const. Art. Ill as well as the separation of powers principle); City of Clinton ex rel. Richardson v. Cornell, 191 Okla. 600 , 132 P.2d 340, 343 (1942), (party could not waive the then constitutional requirement under Okla. Const. Art. VII § 25 of holding terms of court at the county seat). Neither the Tax Commission nor the taxpayers may waive or make a stipulation as to the law concerning the power and structure of government and make that stipulation binding upon the Supreme Court. Cf. Hobbs v. German-American Doctors, 14 Okla. 236 , 78 P. 356, 357 (1904), (subject matter jurisdiction, i.e., the structure of government with respect to the scope of judicial power, may not be waived); State ex rel. Oklahoma Tax Commission v. Emery, 645 P.2d 1048 (OkIa.App.1982), (Approved for publication by Supreme Court), (estoppel does not apply to the State acting in its sovereign capacity, as in taxation). A court may require the timely assertion of a claim or deem the claim waived. Kamen v. Kemper Financial Services, Inc., 500 U.S. 90 ,-n. 5, 111 S.Ct. 1711 , 1718 n. 5, 114 L.Ed.2d 152 (1991). See also Bray v. Alexandria Women's Health Clinic, 506 U.S. -, -, 113 S.Ct. 753, 767 , 122 L.Ed.2d 34 (1993), (in explaining that a claim was not in a posture for review the Court found "troubling” the dissenters' "questionable resolution of a legal issue never presented”).

.See authority cited at note 3 supra.

. In a second suit between the same parties matters that could have been put in issue in the first suit, but were not, may not be raised in the second suit, according to the doctrine of res judicata, or claim preclusion. Veiser v. Armstrong, 688 P.2d 796 , 800 n. 9 (Okla.1984). Acc ord, Oklahoma Gas & Electric v. District Court, 784 P.2d 61 , 64 n. 8 (Okla.1989), (failure to plead a compulsory counterclaim bars a subsequent independent suit thereon).