Petition — Kleiboemer v. District of Columbia
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Office - Supreme Court, U.S.
BR _ oo Ps FILED
that DEC 5 1983
No.
ALEXANDER L, STEVAS,
= — — 9
IN THE
Supreme Court of the United States
OCTOBER TERM, 1983
AXEL-FELIX KLEIBOEMER, et al.,
Petitioners,
Vv.
THE DISTRICT OF COLUMBIA,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
DISTRICT OF COLUMBIA COURT OF APPEALS
BRADLEY G. MCDONALD
JOHN F. KARL, JR.
McDONALD & KARL
1919 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 338-7800
PHILIP L. KELLOGG
JAMES L. LYONS
KELLOGG, WILLIAMS & LYONS
1919 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 785-8292
Attorneys for Petitioners
Fees al
WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001
te
QUESTIONS PRESENTED
1. Whether members of a prevailing duly certified
class action were denied due process by the refusal of the
trial court to order refunds of $1.8 million of illegally
collected tax money to 2,711 class members?
2. Whether the American Pipe doctrine requires that
the period for filing administrative claims for tax re-
funds established by District of Columbia law be tolled
where the trial court upheld the tax and bound all mem-
bers of the class to that judgment and where the tax is
later held to be ultra vires?
(i)
TABLE OF CONTENTS
OPINIONS AND ORDERS BELOW ......0000. eee.
I al eadethin-edidendekschicsatnenineceseaneneneiinnts
CONSTITUTIONAL PROVISIONS INVOLVED ........
STATEMENT OF THE CASE ..............:c.:ccsscssssssssssesceess
A. Procedural Background ......................cc.sss0ss00000
B. Court of Appeals Decisions ................................
C. Post-Appeal Proceedings ...................c...cccceeeeeeee
I snesocettiananennctine
E. Federal Questions Properly Raised ...................
REASONS FOR GRANTING PETITION ....................
I.
II.
ITl.
This Court Should Grant Review Because the
Due Process Clause Is Violated by the District of
Columbia’s Refusal to Refund All of the Ultra
Vires, Unlawfully Collected Tax Money ..............
This Court Should Grant Review Because Ap-
plication of the District of Columbia Refund
Statute so as to Deny Benefits of the Class Action
Judgment Is a Denial of Due Process ................
This Court Should Grant Review Because the
Holding of the Court of Appeals Is Inconsistent
With the American Pipe Doctrine of Equitable
Tolling of Statutes of Limitation Articulated in
Crown, Cork & Seal Co., Inc. v. Parker ..............
dca detsisoasenenebteeienmneneditnbanceesnecensetntion
APPENDIX
A. Opinion of the District of Columbia Court of
Appeals, March 22, 1988 25000002... ..eeeeeeeee
(iii)
11
16
la
iv
TABLE OF CONTENTS—Continued
. Supplemental Opinion of the District of Colum-
bia Court of Appeals, September 7, 1983 ..........
. Order of the Superior Court of the District of
Columbia, Tax Division, October 17, 1977 ........
. Order of the Superior Court of the District of
Columbia, Tax Division, October 27, 1977 ........
. Order of the Superior Court of the District of
Columbia, Tax Division, March 28, 1979 ..........
. Order of tne Superior Court of the District of
Columbia, Tax Division, April 5, 1979 ..............
. Letter from the Department of Finance and
Revenue, Government of the District of Colum-
TE NS. Seat or Be SEL eo oe er oe
. Class Claim for Refund of District of Columbia
Unincorporated Business Tax, December 11,
TN. cn soces escosicieiteschdetaipnieseacbaeeatde haan enki
Vv
TABLE OF CASES
Albemarle Paper Co. Vv. Moody, 422 U.S. 405
ES eae ts NENA ST Sema Bes. eee ee
American Pipe & Construction Co. v. Utah, 414
a ees
Anderson Vv. Celebrezze, 460 U.S. ——, 108 S.Ct.
I na iialinialed
Apartment & Office Building Ass’n v. Washington,
DOB Bee Be CAG, Bi. TTD acccncsiciccntetcscesnccncee
Bishop V. District of Columbia, 401 A.2d 955 (D.C.
I IIE siecle sichcocnidsaltiacahatiderndsimiahinenpiacsonstnediolen
Bishop V. District of Columbia, 411 A.2d 997 (D.C.
App.), cert. denied, 446 U.S. 966 (1980) ..........
Board of County Comrs. v. Seber, 130 F.2d 663
(10th Cir. 1942), affd. 318 U.S. 705 (1943) .......
Board of Regents Vv. Roth, 408 U.S. 564 (1972).......
Carpenter Vv. Shaw, 280 U.S. 363 (1980) ........ Sian
Crown, Cork & Seal Co., Inc. v. Parker, 462 U.S.
~~ 5» B B. __- yeti sagUay. cin eee
District of Columbia v. Green, 310 A.2d 848 (D.C.
PII, MIU nictitececinticsuhitis Deanna ath eadilisthoaiiahansipihensabhans
District of Columbia v. Keyes, 362 A.2d 729 (D.C.
App. 1976), cert. denied, 430 U.S. 968 (1977)...
Frick v. Commonwealth of Pennsylvania, 268 U.S.
A ID eisai acipescepinetcecninkcnpieatielichoninsti hci chanalaniiahiuaikiaesd
Hansberry Vv. Lee, 311 U.S. 87 (1940) ..00000
Hewitt v. Helms, 459 U.S. ——, 108 S.Ct. 846
IY cha inck cic tichncuciadch cosdnaliethmocanamiebiectnen settled
Landon v. Plasencia, 459 U.S. ——, 108 S.Ct. 324
EIR EINES SE SACRO cls wicca Po ea Po
Laskey Vv. International Union (UAW), 638 F.2d
+ RR er ed ed
Lee V. Osceola & Little River, 268 U.S. 648 (1925)..
Lehr v. Robertson, 463 U.S. ——, 108 S.Ct. 2985
CINE -cikitinschacsth ss tenodthcieis deisecaiiiocicciienataioidadaasbcvaitic hese
Mennonite Board of Missions v. Adams, 462 U.S.
—, 108 S.Ct. 2706 (1988) 20... eeeeee
Mullane v. Central Hanover Bank & Trust Co., 889
U.S. 806 (1950)
Page
9, 10
16-19
vi
TABLE OF CASES—Continued
Page
Pernell v. Southall Realty, 416 U.S. 363 (1974).... 16
Research Corp. Vv. Asgrow Steel Co., 425 F.2d 1059
I cag A acti india Silane 12
United Airlines, Inc. v. McDonald, 482 U.S. 385
a RTE SDE eh ee A SL ESR ee Oe 17
Ward v. Board of County Comrs., 258 U.S. 17
I cclceiiatataistetantincosenscita lace Acathienaiesdeddevinanbsadaiainene 9, 10
Whalen v. United States, 445 U.S. 684 (1980) ......... 16
Zipes V. Trans World Airlines, Inc., 455 U.S. 385
Se ah Ont ee ee 17
CONSTITUTIONAL PROVISIONS
Fifth Amendment of the United States Constitu-
I electssticaccacs aseneaeit alee dactidibabinadintaaibenchanmsenisiinianed passim
STATUTES AND RULES
Rule 23 of the Rules of Civil Procedure of the
Superior Court of the District of Columbia ........ passim
Section 1-147(a) (5) of the District of Columbia
I NE i nieeeinsiede 2-3
Section 47-1586j of the District of Columbia Code
INP IIIGED . cicsiiisinataeaieninisascinissonipsdiiassbiteltnichinscinisibdenstetsigsbasisc passim
OTHER AUTHORITIES
Restatement of Judgment, §§ 45(c), 68(i) (1942).. 15
IN THE
Supreme Court of the United States
OCTOBER TERM, 1983
No.
AXEL-FELIX KLEIBOEMER, et al.,
Petitioners,
Vo
THE DISTRICT OF COLUMBIA,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
DISTRICT OF COLUMBIA COURT OF APPEALS
Petitioner Axel-Felix Kleiboemer respectfully petitions
for a writ of certiorari on behalf of the class to review
the judgment of the District of Columbia Court of Ap-
peals, entered on September 7, 1983, upholding the deci-
sion of the trial court denying the refund of $1.8 million
of taxes illegally collected by the District of Columbia
Government from 2,711 prevailing class members.
OPINIONS AND ORDERS BELOW
The opinion of the District of Columbia Court of Ap-
peals holding the tax in question illegal is reported at 401
A.2d 955. The en hance opinion affirming the decision of
the division is reported at 411 A.2d 997. The opinion of
the District of Columbia Court of Appeals ruling that
the respondent is not required to refund all of the tax
illegally collected is reported at 458 A.2d 731 and ap-
2
pears in the Appendix (“App.”) at la-12a. The supple-
mental opinion of the court of appeals denying petition-
ers’ request for rehearing appears at App. 13a-21a.
JURISDICTION
The opinion of the District of Columbia Court of Ap-
peals in this case was issued on March 22, 1983. The
supplemental opinion denying petitioners’ petition for re-
hearing was issued on September 7, 1983. The jurisdic-
tion of this Court is invoked under 28 U.S.C. Section
1257(3).
CONSTITUTIONAL PROVISIONS INVOLVED
United States Constitution, Amendment V:
No person shall . . . be deprived of life, liberty, or
property, without due process of law.
STATEMENT OF THE CASE
A. Procedural Background
On October 21, 1975, Section 47-1574 of the District of
Columbia Code (Supp. V 1978) became effective. Under
the terms of this law the District of Columbia imposed
an unincorporated business tax on unincorporated profes-
sionals and personal service businesses (“professional
tax” or “commuter tax”). Pursuant to Section 47-1589e
of the District of Columbia Code, respondent has the
power to fine and imprison individuals who willfully re-
fuse to pay this tax.
On March 25, 1976, petitioner Axel-Felix Kleiboemer
filed his 1975 District of Columbia Unincorporated Busi-
ness Tax return and paid the required tax. With his
payment, petitioner Kleiboemer filed a claim for refund,
contending that the tax was imposed on the “personal
income” of nonresidents in violation of Section 602 (a)
(5) of the Home Rule Act, Section 1-147(a) (5) of the
3
District of Columbia Code (Supp. II, 1975). On March
26, 1976, the District of Columbia Department of Fi-
nance and Revenue denied his claim for refund.
On April 5, 1976, Kleiboemer filed a class petition
seeking the refund of “‘all amounts paid by all taxpayers
who are members of the petitioner’s class pursuant to the
challenged tax ....” By motion filed April 30, 1976,
Kleiboemer moved the Superior Court for a class deter-
mination pursuant to Civil Rule 23(b) (1), as made ap-
plicable to proceedings in the Tax Division by Tax Rule
3.
The trial court entered an order dated October 17,
1977,’ granting petitioner Kleiboemer’s motion for class
determination:
FURTHER ORDERED that the class shall consist
of all nonresidents who are subject to the tax in
question by virtue of engaging in unincorporated
personal service businesses in the District of Colum-
bia and who have paid the tax.
Order of October 17, 1977, at 2. (App. at 28a).
The trial judge stated in detail the rationale for certi-
fying the case as a class action under Rule 23(b) (1)
(A):?
1 The order was entered on October 18, 1977. We refer to this
order as the October 17, 1977, order to distinguish it from the Or-
der and Opinion signed, dated and entered October 18, 1977, dis-
missing the petitions for refunds on the merits.
2 Super. Ct. Civ. Rule 23(b) (1) (A) is identical to federal Rule
23. This rule provides:
(b) CLASS ACTIONS MAINTAINABLE. An action may be
maintained as a class action if the prerequisites of subdivision
(a) are satisfied, and in addition:
(1) the prosecution of separate actions by or against
individual members of the class would create a risk of (A)
inconsistent or varying adjudications with respect to in-
dividual members of the class which would establish in-
compatible standards of conduct for the party opposing the
4
After reviewing Super. Ct. Civ. R. 23 and the
applicable cases, this Court is satisfied that peti-
tioners can maintain this action as a class action
under Rule 23(b) (1) (A) and arguably under Rule
23(b)(1)(B). The Court relies only on Rule 23(b)
(1)(A). ef. McDonnell Douglas Corp. v. United
States District Court for the Central District ‘of
California, 528 F.2d 1088 (9th Cir. 1975); Landau
v. Chase Manhattan Bank, N.A., 367 F. Supp. 1992
(S.D.N.Y. 1978); Goldman v. First National Bank
of Chicago, 56 F.R.D. 587 (N.D. Ill. 1972). Here as
distinguished from the above cases, the failure to
maintain a class action would impose incompatible
standards of conduct on the District of Columbia.
This is not a simple action for a money judgment
but rather a case which calls into question a tax
statute of the District. It is therefore possible that a
contrary opinion could impose upon the District in-
compatible standards of conduct; collecting the tax
from some and not from others. Moreover, this
Court cannot overlook the impact on the fiscal af-
fairs of the District of Columbia in the event of in-
consistent decisions. For these reasons the Court
concludes the case is properly brought under Rule
23(b) (1) (A),
(App. at 23a). In a separate order entered on October
18, 1977, the trial judge ruled that the tax was lawful
and dismissed the petitions for refunds with prejudice.
Each class member was bound by the trial court’s order
upholding the tax.
Thereafter, on October 27, 1977, the trial judge
modified his order of October 18, 1977, by hold-
ing that the tax impermissibly discriminated against
calendar-year taxpayers in favor of fiscal-year taxpayers
and that the calendar-year taxpayers were entitled to
a refund of al) taxes paid by them prior to December 1,
1975. (App. at 24a-25a). The trial court stated that
“lalny members of the clase who were fiscal year tax-
payers and had perfected their claim for refund as pro-
5
vided by law, would now be entitled to a refund or credit
consistent with the above [opinion]... .” Memorandum
Order of October 27, 1977, at 8. In a separate judgment
order, also entered on October 27, 1977, the trial court
ruled as follows:
ORDERED that the class consists of those non-
resident taxpayers who have paid the unincorpo-
rated business franchise tax pursuant to D.C. Code
1973, See. 47-1574b (Supp. IV, 1977) except for
Richard A. Bishop (See Tax Docket No. 2862), and
it is further
ORDERED that the members of the class shall be
entitled to refund of taxes, consistent with the Opin-
ion and Order as modified by the Memorandum Or-
der, provided they have complied with or comply
with D.C. Code 1978, Sec. 47-1586j.*
*Cf.: D.C. v. Keyes, 362 A.2d 729 (D.C. App. 1976).
(App. at 24a-25a).
The first paragraph of the October 27, 1977, judgment
order recited anew and did not change the class defini-
tion contained in the October 17, 1977, certification or-
der. Thus, as of October 27, 1977, the class remained
“those nonresident taxpayers who have paid the [tax]
except for Richard A. Bishop.”
Petitioner Kleiboemer appealed the October 18, 1977,
order ruling the tax valid. Respondent appealed the Oc-
tober 27, 1977, order granting an 1l-month refund of
the tax. The District did not appeal the separate order
of October 17, 1977, granting class certification and de-
fining the class as those nonresidents who had paid the
tax.’
* At no time during the briefing and oral argument before the
District of Columbia Court of Appeals did the District challenge the
class action certification or the October 17, 1977, definition of the
class. The court of appeals in its April 20, 1/79, opinion expressly
recognized the class as consisting of “all nonresident professionals
6
In December 1978, the District of Columbia mailed a
notice to those taxpayers who were continuing to pay the
illegal tax, advising them of respondent’s view that they
were required to file claims for refund for 1975 by April
15, 1979, in the event the tax might be held illegal by
a subsequent decision of the court of appeals. The Dis-
trict had a list of taxpayers that included the names and
addresses of those individuals who did not receive the
December 1978 notice; however, respondent chose not to
notify these individuals by mail. As a result, a large
number of taxpayers never received actual notice by
mail of the purported requirement that they file a claim
for refund. However, the trial court held that constitu-
tionally adequate notice had been given to class members
regarding the administrative claim requirement. (App.
at 26a-28a). Petitioners filed a notice of appeal from this
decision,
B. Court of Appeals Decisions
On April 20, 1979, the District of Columbia Court of
Appeals unanimously held the tax on nonresident profes-
sionals and other nonresident owners of personal service
businesses to be ultra vires as “an invalid exercise of the
city council’s legislative authority under the Home Rule
Act.” Bishop vy. District of Columbia, 401 A.2d 955, 961
(D.C. App. 1979). Sitting en banc, the court of appeals
affirmed the earlier opinion holding the tax invalid.
411 A.2d 997 (D.C.App.) (en banc), cert. denied, 446
U.S. 966 (1980). The en bane opinion observed that
“Congress expressly and specifically withheld the District
of Columbia Council’s authority to impose a tax on the
income of nonresidents.” Jd, 411 A.2d at 999. The trial
court’s judgment of October 18, 1977, denying petition-
ers’ claims for refund of the tax paid was reversed.
subject to the tax and who had paid the tax, except for appellant
Bishop.” Bishop Vv. District of Columbia, 401 A.2d at 956 n.5.
A
7
C. Post-Appeal Proceedings
On October 22, 1980, the trial court entered a compre-
hensive judgment order which provided that the “District
of Columbia is directed to refund the... . tax paid by or
on behalf of petitioner Axel-Felix Kleiboemer, all mem-
bers of the class...” The October 22 order repeated
the definition of the class created by the October 17, 1977
order, that is, “all nonresident professionals . . . who
have paid the tax... .” The District of Columbia re-
served the right to argue that class members, in addition
to being members of the class, were required to file indi-
vidual claims for refunds within three years from the
time the tax was paid to obtain the return of the money
they paid pursuant to the wltra vires tax.*
On September 24, 1981, the trial court ruled that “the
timely filing of individual claims [for refund under
D.C. Code Section 47-1586j] by affected taxpayers is a
prerequisite to refunds in this suit.” This ruling denied
refunds to 2,711 class members and allowed the District
of Columbia to retain $1.8 million of tax money that
had been illegally collected from unincorporated profes-
sionals residing outside of the District of Columbia.
(App. at 29a-30a).
D. Second Appeal
The court of appeals upheld the decision of the trial
court that technical compliance with Section 47-1586j
was a prerequisite for obtaining a refund for the ultra
vires tax. (App. at la-10a, 18a-19a). The court held
that the exhaustion of remedies doctrine and the imposi-
tion of a requirement of filing individual administrative
* By the time the mandate had returned to the tria! court, the
three-year period for filing administrative claims for refunds es-
tablished by Section 47-1586j of the District of Columbia Code had
expired. This section provides in pertinent part that:
No... refund shall be allowed after three years from the time
the tax was paid unless before the expiration of such period a
claim therefor is filed by the taxpayer.
8
claims for refund were legitimate state interests justify-
ing the District’s refusal to refund all of the illegally
collected tax. (App. at 5a-7a). Although the court had
previously declared the tax unlawful, the court con-
cluded that denial of the refunds to class members who
did not file apparently futile claims for refunds did not
violate due process “because the trial court decision was
appealed and subject to reversal.” (App. at 20a). The
eoirt of appeals also concluded that the doctrine of
equitable tolling was not available to the class. (App.
at 8a-10a, 18a-19a).
E. Federal Questions Properly Raised
The federal questions raised in this petition were spe-
cifically decided by the District of Columbia Court of
Appeals. Petitioners argued that the Due Process Clause
of the Fifth Amendment of the Constitution required the
refund of all of the illegally collected tax money to all
class members, irrespective of whether they had filed
claims for refund during the period in which the tax had
been upheld by a decision of the trial court. The court
of appeals rejected petitioners’ argument that it would
be extremely harsh and fundamentally unfair “to deny
refunds to some class members.” (App. at 7a n.6, 20a).
The Court also turned down petitioners’ claim that:
[Mjembers of the class, having been bound by the
trial court judgment adverse to them until this court
reversed it (after the statutory period for claims
expired), would be denied due process if they were
denied the benefits of this court’s final judgment
holding the tax illegal.
(App. at 20a.)
The court of appeals also rejected petitioners’ alterna-
tive argument that timely filing of the class action claim
for refund tolled the statute of limitations for filing re-
funds under this Court’s doctrine of equitable tolling as
articulated in American Pipe and its progeny.
9
I. This Court should grant review because the Due Proc-
ess Clause is violated by the District of Columbia’s
refusal to refund all of the ultra vires, unlawfully
collected tax money.
The imposition of the professional tax in this case is a
per se violation of petitioners’ right to due process:
{T]he exaction by a state of a tax which it is with-
out power to impose is a taking of property without
due process of law in violation of the Fourteenth
Amendment.
Frick v. Commonwealth of Pennsylvania, 268 U.S. 473,
488-489 (1925). Where there is “no power to impose a
tax, its exaction is a taking of property without due
process of law... .” Lee v. Osceola & Little River, 268
U.S. 643, 646 (1925).
Long ago this Cet made clear that a taxing author-
ity is obligated : .efund all money where payment of
an illegal tax was made under compulsion. Ward v.
Board of County Comrs., 253 U.S. 17 (1920). In reach-
ing this conclusion, the Court relied on the well-settled
rule that money obtained through unlawful means may
be recovered, since reaching the contrary result of al-
lowing the taxing authority to retain the funds would
be nothing short of saying that it could take or appro-
priate property of the taxpayer arbitrarily and without
due process of law. /d. at 24.
In Carpenter v. Shaw, 280 U.S. 363 (1930), this Court
required Oklahoma to refund a tax on Indian property
that had been declared exempt from taxation by an Act
of Congress; the Court did so despite the state’s argu-
ment that petitioners were barred from obtaining re-
funds because they failed to comply with a precondition
imposed by state statute requiring initial timely payment
of the tax.
10
This Court stated: “{A] denial by a state court of a
recovery of taxes exacted in violation of the laws or
Constitution of the United States by compulsion is itself
in contradiction of the Fourteenth Amendment.” Jd. at
369. Under Carpenter v. Shaw, a state court may not
deny a tax refund in a lawsuit where class members
failed to comply with similar state-imposed administra-
tive requirements for obtaining refunds of an illegally
imposed tax on income | apes: exempt by an Act of
Congress. 280 U.S. at 369.
Several years after Shaw, this Court affirmed a court
of appeals decision upholding the right of the taxpayer
to recover payments of certain taxes levied contrary to
an express Act of Congress in face of an argument iden-
tical to that advanced by respondent—that is, a tax-
payer who does not pursue the exclusive statutory reme-
dies provided by the state may not recover the taxes
paid. Board of County Comrs. v. Seber, 318 U.S. 705,
719 (1943). The court of appeals held that the right to
recover taxes that are illegal and void because they are
beyond the jurisdiction of the taxing authority cannot be
made to depend upon any state procedural requirements,
since the effect of upholding the state’s requirement of
compliance with its procedural requirements would deny
a vested right or immunity granted by a law of the
United States. 130 F.2d 663, 671 (10th Cir. 1942).
Just as the Indian lands that were the subject of liti-
gation in Ward, Shaw, and Seber were specifically ex-
empted from taxation by an Act of Congress, so also
were the incomes of nonresident professionals exempted
by Congress from the commuter tax levied by respond-
ent. Petitioners have been denied their due process
rights just as were the prevailing petitioners in Ward,
Shaw, and Seber. Accordingly, the judgment of the court
of appeals should be reversed.
11
II. This Court should grant review because application of
the District of Columbia refund statute so as to deny
benefits of the class action judgment is a denial of due
process.
The court of appeals decision that due process is not
violated by denying class members the benefit of the
judgment declaring the commuter tax to be ultra vires is
in conflict with four due process cases decided by this
Court last term.
The requirements imposed by the Due Process Clause
are “flexible and variable” depending on the particular
factual situation. Hewitt v. Helms, 459 U.S. , 103
S.Ct. 846, 850 (1983). When the Due Process Clause is
“invoked in a novel context,” a court must “begin the
inquiry with a determination of the precise nature of
the private interest that is threatened by the state.”
Lehr v. Robertson, 463 U.S. ——, 103 S.Ct. 2985, 2990
(1983).
{T]he courts must consider the interest at stake for
the individual, the risk of an erroneous depriva-
tion of that interest through the procedures used as
well as the probable value of additional or different
safeguards, and the interest of the government in
the procedures under scrutiny.
Landon v. Plasencia, 459 U.S. ——, 108 S.Ct. 324, 330
(1983).
In passing judgment, the Court must not only de-
termine the legitimacy and strength of each of these
interests, it must also consider the extent to which
those interests make it necessary to burden the plain-
tiff’s rights.
Anderson v. Celebrezze, 460 U.S. ——, 103 S.Ct. 1564,
1570 (1983). This Court must determine whether the
procedures used meet the essential test of fairness under
the Due Process Clause. Landon v. Plasencia, 459 U.S.
at ——, 103 S.Ct. at 30. Under this due process analysis,
the decision of the court of appeals should be reversed.
12
By virtue of the court of appeals decision, respondent
may retain approximately $1.8 million of the tax money
that was collected pursuant to an illegal tax. (App. at
29a-30a). Petitioners have two separate property inter-
ests that have been abridged by this decision. The first
of these is petitioners’ interest in the millions of dollars
of taxes collected pursuant to the now invalidated tax
law and the deprivation of the use of these funds since
they were collected. Board of Regents v. Roth, 408 U.S.
564, 572 (1972). Petitioners have a second property in-
terest which arises from the trial court’s decision certi-
fying the class and the ultimately favorable class action
judgment of October 22, 1980.
Under Rule 23, members of a class who are not present
as parties to the litigation are bound by a judgment
where they are adequately represented by an individual
who meets the requirements of Rule 23. Hansberry v.
Lee, 311 U.S. 37, 42-43 ‘1940). Petitioner was found to
be an “adequate” class representative and the rights of
class members were fully litigated before the trial court.
Class members were bound by the judgment and thus
barred from filing other lawsuits in the District of Co-
lumbia or in other jurisdictions by the doctrine of res
judicata. Id. See also Laskey v. International Union
(UAW), 638 F.2d 954, 956 (6th Cir. 1981); Research
Corp. Vv. Asgrow Steel Co., 425 F.2d 1059 (7th Cir.
1970). ”
Petitioners’ due process property interests must be
considered in light of the legitimacy and strength of the
interests asserted by respondent in denying these claims
for refunds. The court of appeals justified refusal to re-
fund the illegal tax by noting that “the financial inter-
ests of the District and the public interest would not “be
served by allowing taxpayers in such a case to bypass
statutory procedures for refund.” (App. at 7a). The
court reasoned that since respondent could not know the
full extent of its liability for refunds and could not plan
its burden accordingly, respondent had a strong interest
13
in requiring the filing of an administrative claim for
refund. (App. at 7a). This reasoning is erroneous.
Respondent was placed on notice with the filing of
the class action lawsuit for refunds filed only a short
time after the tax was passed and before the first tax
returns were due. The lawsuit apprised respondent of
the extent of its liability because the lawsuit attacked
the power of respondent to levy the tax. Thus, respond-
ent knew the amount of money that the professional tax
had brought into its treasury and the amount of money
that would have to be refunded if the tax were declared
illegal.
Respondent also advances the argument that its inter-
est in the strict construction of tax refund statutes jus-
tifies retention of these funds. Allowing a refund of the
illegal tax would have little or no precedential effect on
future decisions of the District of Columbia courts which
are asked to interpret tax laws that are not ultra vires.
Moreover, respondent’s interest in retaining the $1.8 mil-
lion at issue is of dubious legitimacy, because these funds
were collected illegally on the basis of a tax that is ultra
vires.
Respondent further asserts an interest in the exhaus-
tion of remedies doctrine (requiring that taxpayers
file an administrative claim! which justifies retention of
the illegally collected tax money. Whatever abstract in-
terest a state may have in the exhaustion doctrine in the
normal course, such an interest is at best minimal where
the tax is ultra vires. Respondent’s interest in imposing
an exhaustion requirement is particularly weak because
of the numerous exceptions to this doctrine under Dis-
trict of Columbia law. Exhaustion of administrative
remedies is not a jurisdictional absolute; for example,
taxpayers have been allowed in the past to bypass the
administrative process to proceed with an action in court
where, as here, the taxpayers had no meaningful abil-
14
ity to obtain relief at the administrative level. District
of Columbia v. Green, 310 A.2d 848, 856 (D.C.App.
1973). Accord, District of Columbia v. Keyes, 362 A.2d
729, 737 (D.C.App. 1976), cert. denied, 430 U.S. 968
(1977). Apartment & Office Building Ass’n. v. Washing-
ton, 343 A.2d 323, 331-332 (D.C.App. 1975). Thus, re-
spondent’s interest in requiring the exhaustion of ad-
ministrative remedies does not justify the retention of
the illegally collected tax money.
Moreover, whatever interest respondent might have in
requiring the exhaustion of administrative remedies and
in strict construction of its tax statutes is mooted by the
class claim for refund. On December 11, 1978, petitioner
Kleiboemer filed an administrative claim for refund on
behalf of all individuals in the plaintiff class. (App. at
3la-32a). The filing of a class claim for refund by the
court-appointed class representative was particularly ap-
propriate in these circumstances; class members were
bound by the October 1977 judgment holding the tax law-
ful and any subsequent suit would have been barred by
the doctrine of res judicata. Hansberry v. Lee, supra,
311 U.S. at 42-43. The class claim substantially com-
plied with every requirer nt imposed by Section 47-1586j
of the District of Columbia Code.® Under these circum-
stances, respondent’s interest in the exhaustion of rem-
edies doctrine and strict construction of its tax statutes
is fully satisfied.
5 The class claim was made in writing under oath and was filed
with the appropriate officials on behalf of the class as described
and defined in the trial court’s order of October 17, 1977. The class
claim set forth the specific ground on which the claim for refund
was grounded, i.e., that the tax violated the Home Rule Act and was
therefore ultra vires. (App. at 3la-32a).
On December 26, 1978, the District of Columbia Department of
Finance and Revenue denied the class claim. On January 3, 1979,
the trial judge ruled that the class claim did not constitute sufficient
compliance with Section 47-1586j of the District of Columbia Code.
On January 19, 1979, petitioners filed a notice of appeal from the
order rejecting the class claim for refund.
15
The denial of due process is particularly egregious in
these circumstances because many individuals who did
not file claims for refunds never received the notice sent
in December 1978 to certain taxpayers. (See App. at 28a,
80a). The Deceniber 1978 notice informed taxpayers
that respondent intended to bar their claims if they did
not file claims for refunds. Respondent actually had a:
list of the names and addresses of taxpayers who paid
the tax, were class members, and who did not receive
actual notice by mail that they might be required to file
claims for refunds.
The absence of actual notice runs contrary to the basic
tenet of due process that requires “at a minimum...
that deprivation of life, liberty or property by adjudica-
tion be preceded by notice... .” Mullane v. Central Han-
over Bank & Trust Co., 389 U.S. 306, 313 (1950).
Notice by mail or other means as certain to ensure
actual notice is the minimum constitutional precon-
dition to a proceeding which will adversely affect
liberty or property interests of any party, whether
lettered or well versed in commercial practice, if its
name and address are reasonably ascertainable.
Mennonite Board of Missions v. Adams, 462 U.S. ——,
103 S.Ct. 2706, 2712 (1983). Respondent could have pro-
vided actual notice.®
Due process and fundamental fairness require that
because all class members were bound by the trial court’s
judgment, respondent must be bound by the reversal of
that judgment. Parties to litigation are bound with respect
to every matter that is litigated. Restatement of Judg-
ments, §§ 45(c), 68(i) (1942). In sum, failure to bind
respondent denies petitioners their right to due process.
Accordingly, the decision of the court of appeals should
be reversed.
® Respondent rejected as untimely the claims for refunds of
$1,494,248 filed by 1,160 taxpayers for the tax years 1975 and
1976. (App. at 30a).
16
III. This Court should grant review because the holding
of the court of appeals is inconsistent with the Ameri-
can Pipe doctrine of equitable tolling of statutes of
limitation articulated in Crown, Cork & Seal Co., Inc.
v. Parker.
If respondent may, consistent with due process, re-
quire individual claims for refunds under Section 47-
1586j of the District of Columbia Code, the doctrine of
equitable tolling of statutes of limitations is applicable
to these facts.’ The decision holding that Section 47-1586j
mandates individual claims for refund by all class mem-
bers would deprive class members of the benefit of class
membership simply because these individuals did not file
an apparently futile administrative claim for refund.
Such a ruling in effect decertifies the class after final
judgment and excludes class members from the benefit of
the decision that the tax was ultra vires.
To protect the policies behind the class action proce-
dure, this Court held:
[T]he commencement of a class action suspends the
applicable statute of limitations as to all asserted
members of the class who would have been parties
had the suit been permitted to continue as a class
action.
7 Petitioners believe their claim to equitable tolling of the statute
of limitations raises an issue of great significance that is a matter
of general nationwide application. Even if the court of appeals de-
cision is a matter of “state” law, this Court is “not prevented from
reviewing decisions of the District of Columbia Court of Appeals in
the same jurisdictional sense that [the Court] is barred from re-
viewing a state court’s interpretation of a state statute.” Whalen
v. United States, 445 U.S. 684, 687-688 (1980) (citations omitted).
Deference to the court of appeals’ construction of local federal! leg-
islation is inappropriate in “exceptional situations where egregious
error has been committed.” Pernell v. Southhall Realty, 416 U.S.
863, 369 (1974) (citations omitted).
The class action rule of the trial court—which is identical to
Fed.R.Civ. Pro. 23—was made applicable to the Tax Division of the
Superior Court by Public Law 98-407.
17
American Pipe & Construction Co. vy. Utah, 414 U.S. 5388,
554 (1974), cited in Crown, Cork & Seal Co., Ince. V.
Parker, 462 U.S. ——, 108 S.Ct. 2882, 2395 (1983).
“The filing of a class action tolls the statute of limita-
tion as to all asserted members of the class.” 103 S.Ct.
at 2395 (citation omitted). Thus, the statute of limita-
tions with respect to the claims of the class should be ex-
tended from the time the class action was filed until the
time of decertification of the class.
In further explaining the doctrine of equitable tolling
articulated in American Pipe, this Court has rejected
arguments similar to those made by respondent regard-
ing the adequacy of notice. United Airlines, Inc. v. Me-
Donald, 432 U.S. 385 (1977). In McDonald, the Court
-upheld the adequacy of the notice to the defendant pro-
vided by the class action complaint, noting that “[t]he
lawsuit had been commenced by the timely filing of a
complaint for classwide relief, providing [the defend-
ant] with ‘the essential information necessary to deter-
mine both the subject matter and size of the prospective
litigation.’” Id. at 392-93, quoting American Pipe, 414
U.S. at 555.
The doctrine of equitable tolling has also been applied
in class actions to toll time requirements for filing ad-
ministrative claims. For example, once a member of a
class files a complaint with the Equal Employment Op-
portunity Commission in a Title VII case, the adminis-
trative requirement of filing a claim under 42 U.S.C.
§ 2000e-5(d) is tolled as to all members of the class if
the class is ultimately certified and as to all purported
class members if the class is not certified, or is subse-
quently decertified. See Zipes v. Trans World Airlines,
Inc., 455 U.S. 385 (1982). Albemarle Paper Co. V.
Moody, 422 U.S. 405, 414 n.8 (1975).
The application of the equitable tolling doctrine of
American Pipe and its progeny to this case is particu-
larly appropriate.
18
To hoid to the contrary would frustrate the prin-
cipal function of a class suit, because then the sole
means by which members of the class could assure
their participation in the judgment if notice of the
class suit did not reach them until after the running
of the limitation period would be to file earlier in-
dividual motions to join or intervene as parties—
precisely the multiplicity of activity which Rule 23
was designed to avoid in those cases where a class
action is found ‘superior to other available methods
for the fair and efficient adjudication of the con-
troversy.’ Rule 23(b) (3).
We think no different a standard should apply to
those members of the class who did not rely upon
the commencement of the class action ‘or who were
even unaware that such a suit existed) .... It fol-
lows that even as to asserted class members who
were unaware of the proceedings brought in their
interest or who demonstrably did not rely on the
institution of those proceedings, the later running
of the applicable statute of limitations does not bar
participation in the class action and in its ultimate
judgment.
American Pipe, 414 U.S. at 551-52 (footnote omitted).
When, as here, the time period for filing administra-
tive claims has expired five days prior to the court of
appeals’ decision invalidating the tax, failure to toll the
three-year period would “frustrate the principal function
of a class suit... .” Jd. at 551. Moreover, the sole pur-
pose for the three-year period in the statute is, like the
purpose of the limitation statute tolled in American Pipe,
to require action to be taken within a certain time,
namely, to notify respondent within three years from
the payment of a tax that the taxpayer seeks a refund
and the grounds therefor. Petitioner Kleiboemer did
this, both for himself and for members of the class,
within months after the first payment of estimated tax
had been due, and before the first tax returns were due.
19
Thus, the imposition of the three-year period here would
not promote the purpose of the statute.
Just as the Court squarely rejected the argument that
American Pipe doctrine should be limited to extending
the statute of limitations to intervenors or that exhaus-
tion of remedies is required in class actions under Title
VII, so also should this Court recognize the application
of the doctrine of equitable tolling on these facts.
In the absence of equitable tolling, those taxpayers who
paid the professional tax would be unable to obtain the
return of the funds that had been illegally taken from
them. Failure to require the return of all of the illegally
collected tax would reward the District of Columbia for
its ultra vires action.
In sum, if individual claims for refund under Section
47-1586j of the District of Columbia Code are consistent
with due process, fundamental fairness requires equita-
ble tolling of the statutes of limitations for filing admin-
istrative «laims for refunds of the ultra vires tax from
the filing of the class action petition for refund on April
6, 1976, to the date of this Court’s ruling.
20
CONCLUSION
The petition for a writ of certiorari should be granted
and the decision of the District of Columbia Court of
Appeals should be reversed because respondent’s refusal
to refund all of the money collected under the ultra vires
tax denies class members due process. Alternatively, if
the Court does not conclude that denial of refunds of the
illegal tax to all class members automatically violates
the Due Process Clause of the Constitution, the Court
should grant a writ of certiorari to rule that the doc-
trine of equitable tolling applies to these facts.
Respectfully submitted,
BRADLEY G. MCDONALD
JOHN F. KARL, JR.
MCDONALD & KARL
1919 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 338-7800
PHILIP L. KELLOGG
JAMES L. LYONS
KELLOGG, WILLIAMS & LYONS
1919 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
(202) 785-8292
Attorneys for Petitioners
~
APPENDICES
la
APPENDIX A
DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 79-123, 79-547, and 81-1232
AXEL-FELIX KLEIBOEMER, RICHARD A. BISHOP, et al.,
. Appellants,
DISTRICT OF COLUMBIA,
Appellee.
Appeal from the Superior Court of the
District of Columbia
Civil Division
(Hon. John D. Fauntleroy, Trial Judge)
(Argued November 3, 1982 Decided March 22, 1983)
Bradley G. McDonald, with whom Philip L. Kellogg,
James L. Lyons, John M. Bixler, and Ronald D. Aucutt
were on the briefs, for appellants.
Richard L. Aguglia, Assistant Corporation Counsel, with
whom Judith W. Rogers, Corporation Counsel, Charles L.
Reischel, Deputy Corporation Counsel, and James E.
Lemert, Assistant Corporation Counsel, were on the brief,
for appellee.
Before KERN, PkYOR and BELSON, Associate Judges.
KERN, Associate Judge: This appeal is the residuum
of the convoluted litigation which ultimately resulted in
a decision by this court en bane (one judge dissenting)
that the City Council had impermissibly imposed a tax
on nonresident unincorporated professionals and personal
service businesses. Bishop v. District of Columbia, 411
A.2d 997 (en banc), cert. denied, 446 U.S. 966 (1980).
Questions of statutory interpretation are presented in
this appeal: the meaning and applicability to the instant
2a
case of D.C. Code § 47-1586j(a) (1973), requiring a tax-
payer to file an administrative claim of overpayment of
ax within a fixed period of time, and D.C. Code § 47-
2413(c) (1973), providing for the payment of interest
on overpayments of taxes.
I
The events pertinent to this appeal occurred as follows.
In March 1976, appellant Kleiboemer paid the now inval-
idated tax and promptly filed an individual administrative
claim for refund, which the District denied. Thereupon,
he filed a class action petition for refund in the Tax
Division of the Superior Court seeking a refund of “all
amounts paid by all taxpayers who are members of the
petitioner’s class.” (Record at 16.) In October 1977, the
trial court granted appellant’s motion for class action de-
termination, pursuant to Super. Ct. Civ. R. 23(b)(1) (A)!
and ordered that
the class shall consist of all nonresidents who are
subject to the tax in question . .. and who have
paid the tax.
(Record at 47.) The trial court during October 1977 en-
tered two further orders holding the tax unlawful but
declaring that appellant Kleiboemer and members of the
class who were fiscal year taxpayers were entitled to a
refund for all taxes paid prior to December 1, 1975, “pro-
vided they have complied with or comply with... § 47-
1586j.” (Record at 82.)
It is agreed by the parties that if § 47-1586j is ap-
plicable to all nonresident taxpayers who paid the tax in
1 The rule provides in pertinent part:
An action may be maintained as a class action if .. . the prose-
cution of separate actions by ... individual members of the
class would create a risk of . . . inconsistent or varying adjudi-
cations with respect to individual members of the class which
would establish incompatible standards of conduct for the
party opposing the class... .
3a
1975, their claims for refund must have been filed by
April 15, 1979. In December 1978, appellant Kleiboemer
filed with the District, on behalf of the class, a claim for
refund, which the District denied. Soon thereafter, the
trial court ruled that the class claim for refund filed by
appellant Kleiboemer did not comply with the provisions
of § 47-1586j, but concluded that “individual notice to the
members of the class of the statutory requirement to file
a claim for refund is appropriate.” (Record at 110.) No-
tice of the filing requirement was then included in the
District’s mailing of 1978 tax return forms. However,
some erstwhile members of the class did not actually re-
ceive the mailing, because they no longer operated unin-
corporated businesses in the District and hence were no
longer obligated to file a return. Accordingly, the court
in March 1979 directed the District to issue a press re-
lease to publicize the need by those who had paid the
tax for 1975 to file a refund claim by April 15, 1979. On
April 5, 1979, the court held that sufficient notice had
been given to the class members regarding the adminis-
trative claim requirement. (Record at 138.) On April
15, the filing deadline for the 1975 tax year expired.
After the tax was held invalid, first by a division of
this court, then by the full court en banc, the parties
entered into a consent judgment, pursuant to which the
class members were again notified, by a mailing, of the
requirement that they file an administrative claim. At
the time of that second mailing, however, the filing dead-
line for taxable years 1975 and 1976 had already expired.
On September 24, 1981, the trial court ruled as follows
on the issues which had been left unresolved by the earlier
consent judgment: (1) that “the timely filing of individ-
ual claims [for refund] at the administrative level by
affected taxpayers is a prerequisite to refunds in this
suit”; and (2) that interest should be computed “from
the date such individual claims are timely filed until
the date of the making of the refund.” (Record at 176.)
4a
It is from these September 24 rulings that the present
appeal is taken.
II
As to the requirement of an individual claim for re-
fund, § 47-1586j(a) provides in pertinent part as follows:
No... refund shall be allowed after three years
from the time the tax was paid unless before the
expiration of such period a claim therefor is filed
by the taxpayer....
It is agreed that a number of nonresidents who paid the
tax for the years 1975 and/or 1976 did not file a claim
for refund of such tax payments within three years. Ap-
pellants, however, urge that the whole purpose of a class
action pursuant to Rule 23(b) (1) (A)—to eliminate the
possibility of inconsistent adjudications if each member
of the class were to sue individually—is frustrated by
requiring that each taxpayer who is a member of the
class must have filed an administrative refund claim in
order to obtain a refund after the tax has been judicially
determined to be unlawful. However, in District of Co-
lumbia v. Keyes, 362 A.2d 729 (D.C. 1976), cert. denied,
430 U.S. 968 (1977), we held that a class action? for
2It is not significant that Keyes did not involve a certified class
action. The rules of the Tax Division at that time did not include
class certification procedures; however, the court in Keyes recog-
nized that new class action rules had been adopted and specifically
stated that “this decision may be considered to have precedential
effect in future class action tax refund cases.” Jd. at 732 n.5, 736.
Further, as pointed out in the District’s brief, at the time Congress
directed the Superior Court to adopt class action rules for tax cases,
the federal courts consistently held that the filing of an adminis-
trative claim was a prerequisite to recover refunds. See, e.g.,
Heisler v. United States, 463 F.2d 375 (9th Cir. 1972) (per curiam),
cert. denied, 410 U.S. 927 (1978) (class action); McConnell v.
United States, 295 F. Supp. 605 (E.D. Tenn. 1969) (class action).
There is no reason to believe that Congress intended a different
rule for the District of Columbia. See District of Columbia Real
Property Tax Revision Act of 1974, Pub. L. No. 93-407, § 428, 88
Stat. 1036, 1057 (1974).
5a
refund of taxes paid was incorrectly entertained by the
trial court because the taxpayers seeking refund had not
first filed an administrative claim for refund.
Appellants contend (Brief at 18) that the trial court’s
ruling “would undercut the policy of Rule 23... to al-
low class representatives to vindicate the rights of those
who lack the knowledge or resources to pursue a remedy
individually and to obtain justice in the courts.” How-
ever, as we pointed out in Keyes, the Congress enacted
specific legislation in § 47-1586j requiring an individual
to file a refund claim and we may not ignore such a legis-
lative mandate.* This is particularly true since, as we
explained in Keyes, supra, 362 A.2d at 732, the remedy is
purely statutory: “[rJecovery of taxes illegally or erro-
neously assessed and voluntarily paid ... is a matter
within the purview of the legislative branch.” We fur-
ther noted, “Tax statutes are necessarily formalistic and
often technical. It is essential that we adhere to their
technicalities, even if at times a seeming hardship results
to the taxpayer.” 7d. at 737. This is so particularly be-
cause the statutory prerequisite of a claim for refund is
jurisdictional, as we also noted in Keyes. Id. at 733.‘
3 We note that the trial court did require the District to notify
taxpayers by public announcement of the need to file their refund
claims within a certain time period, and that the trial court later
held that the taxpayers had had reasonable and sufficient notice.
Under these circumstances, the members of the class must be
deemed to have the knowledge to take the steps required by statute.
4 Accordingly, we cannot agree either with appellants’ argument
that, even if an administrative claim must be filed, the claim for
refund filed by appellant Kleiboemer on behalf of the entire class
satisfies the requirements of § 47-1586j. The statute plainly states
that the claim must be filed “by the taxpayer.” Moreover, the trial
court specifically ruled on January 3, 1979, that Kleiboemer’s claim
for refund on behalf of the class did not comply with § 47-1586j or
with the order of October 27, 1977 requiring compliance with § 47-
1586j. Appellants did not appeal from the January 3 order. Dellums
v. Powell, 184 U.S. App. D.C. 324, 566 F.2d 216 (1977), cert.
denied, 438 U.S. 916 (1978), cited in appellants’ reply brief, is
6a
Appellants also maintain that in this case Keyes does
not require the filing of individual claims for refund by
members of the class because the filing requirement—
essentially an application of the doctrine of exhaustion of
remedies—need not be met when resort to the adminis-
trative process would be futile. However, we specifically
rejected that argument in Keyes. There we acknowledged
that, in District of Columbia v. Green, 310 A.2d 848, 856
(D.C. 1973), we had permitted taxpayers who had by-
passed the administrative process to proceed with an ac-
tion in court in part because those taxpayers had “ ‘no
meaningful ability to challenge [the] assessment at all’”
at the administrative level. Jd. at 734 n.11. However, in
Keyes we emphasized that the futility of the administra-
tive appeal was only one of the several “extraordinary
circumstances” on which we had based the Green deci-
sion; that “only injunctive relief was sought’; and that
“it would be a rare instance when taxpayers would not
bypass [the administrative procedure] at great peril.”
Id.5
distinguishable: it involved a broad statute expressly permitting
notice of a claim against the District to be given by the claimant’s
agent. Id. at 336-37; 566 F.2d at 228-29. Moreover, the cc urt in
Dellums found that notice by agent would not conflict with the
purposes of that claim requirement; whereas, in this case, the pur-
poses of the limitation period discussed infra, at 8-9, would not be
served by a departure from the express terms of the statute or by
a holding that “substantial compliance” satisfies the statute.
* Appellants also cite to Thorn v. Jefferson County, —— Ala.
, 875 So. 2d 780 (Ala. 1979), where the Supreme Court of
Alabama held that the administrative remedy need not be ex-
hausted when a class action is brought challenging a tax as illegal
and void. However, the court in Thorn relied upon Graves v. Mc-
Donough, 264 Ala. 407, 88 So. 2d 371 (1956), where the adminis-
trative remedy provided by statute gave aggrieved taxpayers only
twenty days in which to object to the tax, as compared with the
three-year period for filing claims under § 47-1586j.
Ta
Instead, we explained in Keyes that the extraordinary
equitable considerations were not present which had led
us in Green to permit a limited exception to an essential
requirement of the purely statutory refund procedure.
Nor are they present in the instant case. It was not
until October 17, 1977, that the tax in question in this
case was initially held unlawful—a year and one half
after it first came due for the 1975 tax year. An appeal
was taken promptly from that ruling. Thus it is not un-
reasonable to conclude that aggrieved taxpayers had
ample opportunity prior to the ruling of October 17,
1977, to pursue their statutory remedy with some hope
that they might be successful. Even following the trial
court decision upholding the tax, the possibility of rever-
sal endured until the appeals process was completed.’*
During the period of litigation, extensive efforts were
exerted, by mail and by publication, to inform taxpayers
of the need to file a claim; and the trial court expressly
held such notice to be sufficient. Tie trial court’s orders
of October 27, 1977 and January 3, 1979 made it clear to
appellants that individual claims for refund were a nec-
essary precondition to collecting refunds, yet appellants
did not appeal from those orders. In fact, appellants
conceded the necessity of claims for refund soon after
the October 27 order issued. (Record at 84-85.)
In addition, although without question the District
had “notice” of the class action challenging the legality
of the tax, absent the expected filing of claims at the ad-
ministrative level, the District could not know the full
extent of its liability for refunds and could not plan its
budget accordingly. As we noted in Keyes, supra, 362
A.2d at 736-37, the financial interests of the District and
the public interest would not be served by allowing tax-
payers in such a case to bypass the statutory procedures
for refund.
* Accordingly, we do not find persuasive appellants’ argument
that a requirement of strict compliance with the statute is funda-
mentally unfair.
Finally, appellants cite to American Pipe & Construc-
tion Co. v. Utah, 414 U.S. 5388 (1974), and urge (Brief
at 35) that even were we to conclude § 47-1586j required
individual taxpayers for 1975 and 1976 to file refund
claims, nevertheless the three-year limitation period for
filing the administrative claims should be deemed tolled
from the time the class action was filed in April 1976
until this court’s ruling on appea! as to the applicability
of § 47-1586j to the instan. case. Appellants also cite two
decisions in class action discrimination cases, see, ¢.9.,
Barrett v. United States Civil Service Commission, 439
F. Supp. 216 (D.D.C. 1977), in which the equitable toll-
ing doctrine for class actions has been held to toll the
limitations period for administrative complaints. How-
ever, in determining in any given instance whether a
statute of limitations should be tolled, we must examine
the legislative purposes behind the limitation provision
to determine whether they are effectuated by the tolling.
Timoni v. United States, 185 U.S. App. D.C. 407, 412,
419 F.2d 294, 299 (1969), citing Burnett v. New York
Central R.R. Co., 8380 U.S. 424, 426 (1965).
The policy considerations which favor a tolling of the
limitation periods in discrimination suits brought under
remedial statutes are not present in the context of a chal-
lenge to a tax statute. As we have said, supra at 6, tax
statutes are to be strictly construed. In addition, one
of the important purposes served by the three-year filing
deadline for tax refund claims is a practical one—to pro-
tect the District against financial instability by setting
a date certain by which the District may know the pre-
cise extent of its liability for refunds. See supra, at 8;
District of Columbia v. Keyes, supra, 362 A.2d at 736-37.
Moreover, implicit in the Supreme Court’s opinion in
United Airlines, Inc. v. McDonald, 482 U.S. 385 (1977),
was the view that tolling is proper with respect to a par-
ticular cause only for so long as the class action con-
tinues to protect that cause. Once a final ruling adverse
9a
to the class is entered and becomes appealable, tolling is
no longer proper.’
Here, the trial court in October 1977 ruled that those
taxpayers who paid the tax for 1975 were entitled to re-
funds “provided they have complied with or comply
with ... §$ 47-1586j.” In January 1979, the trial court
ruled that appellant Kleiboemer’s claim for refund filed
on behalf of the class did not comply with § 47-1586).
Thus, the issue of the applicability of § 47-1586j to the
members of the class was raised early on and was sus-
ceptible to appeal by appellants.* Under these circum-
stances we cannot agree that compliance with the statute
TIn United Airlines, the Supreme Court held that, where class
certification had been denied early in a case but was not appealable
until final judgment, and where the named parties had declined to
appeal from that order, post-judgment intervention hy putative class
members was permissible for purposes of appealing the denial of
class certification. 432 U.S. at 394-96. In so holding, the Court
noted that, once the order became final and appealable, it was “‘criti-
cal” that the appeal was taken promptly: “In short, as soon as it
became clear ... that the interests of the unnamed class members
would no longer be protected .. . [respondent] promptly moved to
intervene to protect those interests.” Jd. at 394.
®To be appealable, an order must be final. D.C. Code §11-
721(a) (1981). However, final orders for purposes of the statute
are not limited to final judgments which terminate the action.
Frost v. Peoples Drug Store, Inc., 327 A.2d 810, 812 (D.C. 1974).
The test of finality is whether the orders requiring individual com-
pliance with § 47-1586j disposed entirely of that issue; or whether
they were “open, unfinished, or inconclusive,” or were “but steps
towards final judgment.” See Crown Oil and Wax Company of
Delaware v. Safeco Insurance Co. of America, 429 A.2d 1376, 1879
(D.C. 1981); Trilon Plaza Co. v. Allstate Leasing Corp., 399 A.2d
34, 87 (D.C. 1979), quoting Cohen v. Beneficial Industrial Loan
Corp., 3837 U.S. 541, 546 (1949). Applying these principles to the
two orders here, we conclude that they were final and appealable
with respect to the applicability of § 47-1586j to the instant case.
We do not view the October 27 order as having reconstituted the
class for purposes of challenging the legality of the tax.
~
10a
was tolled solely by reason of the fact that appellants
pursued their challenge to the validity of the tax.
Accordingly, we find no error in the trial court’s Sep-
tember 1981 ruling that the timely filing of individual
claims for refund at the administrative level was a pre-
requisite to recovery of refunds following this court’s
decision that the tax was unlawful.
III
We turn next to the second statute in question, § 47-
2413 (c), which provides in pertinent part as follows:
(I]f it is determined by the . . . Superior Court that
there has been an overpayment of any tax... in-
terest shall be allowed and paid on the overpayment
... from the date the overpayment was paid until
the date of refund, but with respect to that part of
any overpayment which was not assessed and paid
as a deficiency or as additional tax interest shall be
allowed and paid only from the date of filing a claim
for refund or a petition to the Superior Court....
(Emphasis added.) The trial court here concluded that
under the statute interest on the District’s refund of
taxes paid by the nonresidents (and determined to have
been unlawfully imposed) was to be computed only from
the date each such taxpayer filed his claim for refund
rather than from the date such taxpayer paid the tax
which this court invalidated. Appellants concede (Brief
at 43) that most of the taxpayers who paid the tax did
not pay as the result of an assessment of deficiency by
the District. Accordingly, we are constrained by the ex-
press language of the statute set forth above to uphold
the trial court’s ruling that interest on the taxpayer’s
payment of the tax, not assessed as a deficiency or as
additional tax, must run from the date the taxpayer filed
a petition or claim for refund, rather than from the
date the taxpayer overpaid the tax.
lla
However, appellants (Brief at 43) point to the fact
that they filed in the trial court pleadings challenging
the validity of the tax at issue “prior to Anvil 15, 1976,
the earliest date on which any of the taxes involved were
deemed to have been paid.” They argue from this fact
that the District was “apprised” at this early date of its
potential liability to the taxpayers for the return—with
interest—of the tax paid, should it be declared to have
been illegally imposed. Therefore, appellants urge, they
met the purpose of the statute, as reflected by its his-
tory,® viz., to alert the District to its potential liability;
and that by reason of the petitions filed interest should
be paid from the date of overpayment or the due date of
the return, whichever is later.'’
The House and Senate committee reports do not, in our
view, suggest that § 47-2413(c) should be given any
construction other than its plain meaning. They refer to
the District’s being apprised of the fact that “an” over-
payment has been claimed, thus suggesting that individ-
ual claims or petitions were intended. Further, the
language of the committee reports does not indicate that
® See H.R. REP. No. 1977, 82d Cong., 2d Sess. 4 (1952); S. Rep.
No. 1471, 82d Cong., 2d Sess. 4 (1952).
10 Appellants also point to the fact that the statute refers to the
filing of either a claim or a petition to the Superior Court, and that
the words “by the taxpayer,” included in § 47-1586j, are conspicu-
ously absent from § 47-2418(c). (Reply Brief at 8.) It is there-
fore arguable that the class action petition filed by appellant Klei-
boemer triggered the allowance of interest for the entire class.
However, we must construe the statute as a whole, in context, ac-
cording to common understanding of its terms. Although § 47-
2413(c) does not expressly require that a petition or claim be filed
“by the taxpayer,” it refers only to “an” overpayment or “the”
overpayment, and references in every other subsection of § 47-2413
are to “the taxpayer.” Moreover, there is no indication whatsoever
in the legislative history of § 47-2418 that Congress had anything
other than the filing of a claim or petition by the individual tax-
payer in mind when it enacted § 47-2413.
12a
mere notice that the taxing statute has been challenged
will be sufficient to comply with § 47-2413(c). Indi-
vidual claims are needed, as we have discussed, supra at
8-9, so that the District will know the exact amount of
refunds actually claimed and can plan accordingly. Since
we are interpreting and applying a statute which is clear
on its face, and since appellants have not persuaded us
that the language of the statute admits of more than its
natural meaning, we are obliged to apply § 47-2413(c)
as written. Caminetti v. United States, 242 U.S. 470,
485 (1917); 2A Sutherland, Statutes And Statutory
Construction § 46.01 (1973).
Therefore, we also affirm the trial court’s ruling that
interest on the amounts refunded to the taxpayers in
the instant case who did not pay the tax because of an
assessment of deficiency runs from the respective dates
they filed their claims for refund, rather than from the
dates they paid the tax.
Accordingly, there being no error in either of the
challenged rulings, the judgment of the trial court is
affirmed.
So ordered,
13a
DISTRICT OF COLUMBIA COURT OF APPEALS
Nos. 79-128, 79-547, and 81-1232
AXEL-FELIX KLEIBOEMER, RICHARD A, BISHOP, et al.,
Appellants,
Ve
DISTRICT OF COLUMBIA,
Appellee.
Appeal from the Superior Court of the
District of Columbia
(Hon. John D. Fauntleroy, Trial Judge)
(Argued November 3, 1982 Decided September 7, 1983)
Bradley G. McDonald, with whom Philip L. Kellogg,
James L. Lyons, John M. Bixler, and Ronald D. Aucutt
were on the briefs, for appellants.
Richard L. Aguglia, Assistant Corporation Counsel,
with whom Judith W. Rogers, Corporation Counsel,
Charles L. Reischel, Deputy Corporation Counsel, and
James E. Lemert, Assistant Corporation Counsel, were
on the brief, for appellee.
Before KERN, PRYOR and BELSON, Associate Judges.
SUPPLEMENTAL OPINION UPON APPELLANTS’
PETITION FOR REHEARING
The division in its opinion issued on March 22, 1983
characterized, prophetically as it turns out, this case as
“the residuum of .. . convoluted litigation.” Kleiboemer
v. District of Columbia, 458 A.2d 731, 732 (D.C. 1983).
Appellants in their petition for rehearing point out two
misstatements which crept into the opinion through cleri-
cal error, viz., two references to the trial court’s October
ld4a
17, 1977 order as holding the tax at issue “unlawful”
when in fact the court held the tax lawful. Appellants
also point to an error in the statement of facts under-
girding this court’s conclusion that the trial court’s judg-
ment should be affirmed. Appellants, hereafter denomi-
nated petitioners, urge that such errors materially influ-
enced the outcome of the appeal and require reconsidera-
tion by the division of its holding, as well as suggest that
certain of their arguments were not fully considered.
First, dealing with the clerical errors to be corrected,
the word “unlawful” appearing in the middle of the first
full paragraph in Part I of the division opinion, 458 A.2d
at 732, describing the trial court’s order, should have
read “lawful”; and the word “unlawful” appearing on
the ninth line of the last paragraph on 458 A.2d at 734
also should have read “lawful.”
Next, we turn to the petitioner’s assertion of factual
error with respect to the orders entered by the trial court
in the instant case.
I,
There were three orders of the trial court relating to
the requirement for individual administrative claims as
a prerequisite to taxpayers’ collecting refunds. On Octo-
ber 27, 1977, in ordering refunds for certain fiscal year
taxpayers, the court stated that those taxpayers were
entitled to refunds “provided they have complied with or
comply with D.C. Code 1978, § 47-1586j.” The taxpayers
did not appeal from that order. On January 3, 1979, the
trial court ruled that Kleiboemer’s claim for refund on
behalf of the class did not comply with § 47-1586j or with
the order of October 27, 1977. A timely appeal was
taken from the January 3 order on January 19 (No. 78-
123) and again on May 7, 1979 (No. 79-547). On Sep-
1The appeal taken on January 19 was an appeal only from
the January 3 order. The second appeal was taken following
the trial court’s decision of the case-in-chief and was consolidated
with the first appeal.
<2
l5da
tember 24, 1981, the trial court ruled that timely indi-
vidual administrative claims were a prerequisite for re-
funds, and that interest was to be computed from the
date of the individual claims. A timely appeal was taken
from that order (No. 81-1232) and was consolidated with
the earlier appeals from the January 3 order.
The division stated in its opinion that an appeal was
taken only from the September 24, 1981 rulings and that
neither the October 27, 1977 order nor the January 3,
1979 order was appealed; in fact, the January 3 order
was appealed.
The division concluded, 458 A.2d at 734 n.4, that the
class claim for refund filed by Kleiboemer does not satisfy
§ 47-1586j because (a) the plain language of the statute
requires individual claims, (b) petitioners “did not ap-
peal from the January 3 order,” and (c) Dellums v.
Powell, 184 U.S. App. D.C. 324, 566 F.2d 216 (1977),
cert. denied, 438 U.S. 916 (1978), cited in petitioners’
brief on appeal, is distinguishable. Petitioners contend
that, because the court viewed this issue as waived by
failure to appeal, it was never considered on the merits,
and the California cases cited in their brief were never
considered.
However, the essential reason for the division holding
was that the plain language of the governing statute re-
quired it. The additional two reasons referred to above
were more in the nature of persuasive discussion. More-
over, the two principal California cases which petitioners
contend the division should have discussed in the opinion
are not precisely on point. San Jose v. Superior Court of
Santa Clara County, 12 Cal. 8d 447, 525 P.2d 701 (1974);
Lattin v. Franchise Tax Board, 75 Cal. App. 3d 377, 142
Cal. Rptr. 180 (1977). The San Jose case concerned a
statutory claim requirement as a prerequisite to the main-
tenance of a class action for damages, not as a prerequi-
site to collecting a tax refund. The statute at issue in
that case (apparently a general claims statute), unlike
16a
the District of Columbia tax statute at issue here, ex-
pressly permitted a claim to be filed “by the claimant or
by a person acting on his behalf.” San Jose, supra at 12
Cal. 3d at 455, 525 P.2d at 706 (emphasis added). The
Lattin case was very closely analogous to District of
Columbia v. Keyes, 362 A.2d 729 (D.C. 1976), cert.
denied, 430 U.S. 968 (1977), in that it concerned the
requirement of an administrative claim for refund as a
prerequisite to maintaining a class action challenging the
validity of the tax, in contradistinction to an ancillary
suit seeking recovery once the tax has been held invalid.
Lattin relied almost entirely upon the San Jose case in
holding that the administrative claim requirement would
be satisfied for purposes of class action certification by
a claim filed on behalf of the class.2 As with the San
Jose case, the context was thus different from that of
the instant case, where the class action suit has already
been decided and the issue is instead whether individual
claims are required for recovery.
Further, although petitioners contend that the perti-
nent tax statute involved in Lattin was virtually identi-
cal to § 47-1586j, they cited only the portion of the Cali-
fornia tax code which, like part of § 47-1586j, requires
the claim to be in writing and to state the specific
grounds for the claim. Petitioners did not mention that
portion of the California tax code which, like § 47-1586},
requires a claim for refund to be filed “by the taxpayer.” °
2? Although the court in Lattin referred to the suit as seeking
refunds for the class, the court stated that “ ‘the sole issue pre-
sented on this appeal is whether or not a class should be certified
and represented by Appellants Lattin.’” 75 Cal. App. 3d at 379,
142 Cal. Rptr. at 132. The plaintiffs in that case sovght to have
the applicable California tax statute declared unconstitutional.
3 Petitioners cited (Brief at 32) CaL. Rev. & Tax Cope § 19055
(West 1970). The pertinent section of the California code, Cal.
Rev. & Tax Code § 19053 (West Supp. 1970-82), does, like the
D.C. Code, require a claim to be timely filed “by the taxpayer.”
However, as discussed above, Lattin dealt with the necessity of a
17a
Moreover, the policy considerations underlying both those
California cases was governmental immunity, not ex-
haustion of administrative remedies. Those opinions held
that substantial compliance with the claims statutes by
the filing of a class claim was sufficient, but, as we have
explained, for different purposes than in the instant case.
Finally, even if we viewed those cases as persuasive, this
court certainly need not follow them.
In reciting the factors in this case which weigh against
permitting an exception, pursuant to District of Columbia
v. Green, 310 A.2d 848, 856 (D.C. 1973), to the require-
ment that an administrative claim be filed, as a prerequi-
site to suit, the division states, 458 A.2d at 735, in part
incorrectly, that petitioners did not appeal from the Octo-
ber 27 and January 3 orders which made it clear that
individual claims were required. Petitioners do not spe-
cifically address how this particular error here may have
affected the rationale. However, deletion of the erroneous
statement of fact from the opinion affects the list of
equitable factors in this section only minimally. We are
still left with the following:
The tax was not initially held lawful until a year
and one-half after it came due and that decision was
promptly appealed, so that taxpayers might have
pursued their administrative remedies with some
hope of success.*
claim’s having been filed and rejected as a precondition to main-
taining a lawsuit to recover upon payment of a tax which is void,
presumably pursuant to Cal. Rev. & Tax Code § 19082 (West 1970)
(creating the right of action after claim denied if tax void). Lattin
did not concern the claim as a precondition actually to collecting
a refund if the class suit were successful, as here; and the court
in Lattin did not construe the California code provision which is
the companion to that portion of § 47-1586j at issue in this case.
4 The argument is made that once the trial court upheld the tax,
most taxpayers would not likely have filed a claim at all, consider-
ing it pointless. It was not until 5 days after the expiration dof
the statutory period for filing claims for the 1975 tax year that a
18a
Extensive notice of the claim requirement was
given in the media, in business and professional pub-
lications, by mail, and in seminars.
The trial court expressly held this notice to be
sufficient.
No appeal was taken from the October 27 order
first giving petitioners notice that individual claims
were required (and petitioners appeared to under-
stand that the October 27 order did require indi-
vidual claims).
At 458 A.2d at 735-36, in the discussion of equitable
tolling, we explain that tolling is no longer proper once
a final ruling adverse to the class is entered and be-
comes appealable (and is not appealed). We then reason,
458 A.2d at 736 n.8, that the October 27, 1977, and Jan-
uary 3, 1979, orders were final and appealable with re-
spect to the applicability of § 47-1586j and that tolling is
not proper (since they were not appealed). Petitioners
maintain that the division’s decision on equitable tolling
was materially and adversely influenced by the incorrect
assumption that the January 3 order was not appealed
when it was, in fact, promptly appealed.
Since the October 27 ruling was in the context of an
order directing refunds for only a limited group of these
taxpayers (1975 fiscal-year basis taxpayers), it might
not be viewed, standing alone, as resolving the issue suffi-
ciently for all affected taxpayers as to make clear that
the class action would no longer protect their interests in
this respect if the order were not appealed. See Klei-
boemer, supra, 458 A.2d at 735-36 n.7. Also, consider-
ing how the October 27 order was worded (“provided
that” the taxpayers comply with the claim requirement),
and considering that this part of the order apparently
division of this court held the tax unlawful. However, this argu-
ment must be viewed in light of the considerable publicity sur-
rounding this litigation and the claim requirement.
19a
was not a major controversy, if at all, at the time (since
the focus was on the validity of the tax), we recognize
that the decision as to whether it was a final, appealable
order was a close one. Further, petitioners contend that
the October 27 order left open the question whether a
class claim for refund satisfied § 47-1586).
However, we still conclude that the October 27, 1977,
order constituted a final order which should have been
appealed if petitioners were to avail themselves of equi-
table tolling. Accordingly, since the filing deadline for
the 1975 tax year did not expire until a year and one-
half later, on April 15, 1979, equitable tolling is not ap-
propriate. The order certainly settled the question finally
for the taxpayers who were to get refunds at that time,
and it put the petitioners on clear notice that compliance
with § 47-1586j was required. The trial court cited
Keyes in its October 27 order, and in so doing, it further
signaled that individual compliance was contemplated,
because Keyes emphasized strict construction of tax re-
fund statutes. The fact that petitioners vigorously pur-
sued various avenues for notifying individual taxpayers
of the requirement (even though they urged the suf-
ficiency of a class claim) indicates that they understood
the October 27 order, literally read, to require individual
claims.
II.
Finally, we turn to several additional assertions of
error raised in the petition for rehearing:
At 458 A.2d at 735, the division states that “appellants
conceded the necessity of claims for refund soon after
the October 27 order issued.” We cite to petitioners’ mo-
tion for an order compelling the District to include notice
to taxpayers of the filing requirement in the December
1978 tax mailings. Petitioners argue that they took such
action only out of an abundance of caution, to protect
their clients’ interests. However, in that motion peti-
tioners referred to the October 27 order and described the
20a
administrative “claims” (not singular, as if they believed
a single class claim might suffice) as being “necessary.”
Since only the petitioners themselves can say how they
construed the October 27 order at that time, perhaps to
say that they “conceded” the issue was to use too strong
a word. However, their actions in pursuing individual
notice, and their language in this motion, are a fair indi-
cation that they understood individual notice to be re-
quired and therefore should have appealed the October
27 order. The District cites to the transcript of October
7, 1978, at 39, where counsel for petitioner described the
October 27 ruling as specifically requiring the “members
of the class” (not the class as an entity) to comply with
§ 47-1586j, as support for this reading as to how the
October 27 ruling was understood by petitioners.
Petitioners contend as well that the division opinion
failed to address their argument that members of the
class, having been bound by the trial court judgment ad-
verse to them until this court reversed it (after the statu-
tory period for claims expired), would be denied due
process if they were denied the benefits of this court’s
final judgment holding the tax illegal. This argument
was made in less than 3 pages of a 49-page brief. No
cases were cited in direct support of the argument, and it
was essentially urged that it would be extremely harsh
and fundamentally unfair to reach the result the divi-
sion did reach. This argument was addressed in the
division opinion, 458 A.2d at 735 n.6, in which we state
that, because the trial court decision was appealed and
subject to reversal, this contention was unpersuasive.
We remain of that view.
Petitioners also make several arguments in which they
urge that the division erred in concluding that interest
on the amounts refunded to most taxpayers runs from
the dates they filed individual claims for refund, rather
than from the dates they paid the tax. We have thor-
oughly considered each of petitioners’ arguments on the
2la
interest issue and find them insubstantial.° The division
opinion rests upon a straightforward reading of D.C.
Code § 47-2413(c) (1973).
In sum, therefore, each of petitioners’ assertions of
error is either unfounded or had no substantial impact
upon the division’s holdings. Accordingly, the petition for
rehearing is denied.
So ordered.
5 Petitioners maintain that the division opinion disregards the
differences between subsection (c) and other subsections of
§ 47-2413. However, it is precisely because the other subsections
of § 47-2413 pertain to subject matter affecting only individual
taxpayers that we concluded subsection (c) also must concern
only individual taxpayers. Petitioners also argued at length that
the fiscal concerns of the District are entirely different with re-
spect to interest than in the context of the main claim for a refund.
However, this argument overlooks the fact that a greater sum of
money is at stake for the District on the interest issue than on
the question of recovery on the main claims. Brief for Appellee at
App. 1. With respect to petitioners’ contentions concerning the use
of legislative history in the division opinion, we note that the
language of § 47-2413(c), in the context of the entire section, has
a plain and natura! meaning. Petitioners’ position, viz., that the
petition filed in April 1976 in this case fulfilled the statutory re-
quirement, is arguable only because of the omissi-a of specific
reference to the individual taxpayer.
22a
APPENDIX C
SUPERIOR COURT OF THE
DISTRICT OF COLUMBIA
TAX DIVISION
Docket No. 2379
AXEL-FELIX H. KLEIBOEMER,
Petitioner,
Vv.
DISTRICT OF COLUMBIA,
Respondent.
ORDER GRANTING PETITIONER’S
MOTION FOR CLASS DETERMINATION
Upon consideration of petitioner’s Motion for Class
Determination, respondent’s response thereto and good
cause appearing therefore, the Court finds as follows:
1. The class is so numerous that joinder of all mem-
bers is impracticable.
2. There are questions of law and fact common to the
class.
3. The claims of the representative party are typical
of the claims of the class.
4. The representative party will fairly and adequately
protect the interests of the class.
5. The within suit is maintainable as a class action
pursuant to the provisions of Rules 23(b)(1)(A) and
23(b) (1) (B) of the Superior Court Civil Rules.
WHEREFORE, IT IS HEREBY ORDERED by the
Court this 17th day of October, 1977, that the within
cause of action may and shall be maintained as a class
action; and it is
23a
FURTHER ORDERED that the class shall consist of
all non-residents who are subject to the tax in question
by virtue of engaging in unincorporated personal service
businesses in the District of Columbia and who have paid
the tax.*
/s/ John Garrett Penn
JOHN GARRETT PENN
Judge
* After reviewing Super. Ct. Civ. R. 23 and the applicable cases,
this Court is satisfied that petitioners can maintain this action as
a class action under Rule 23(b)(1)(A) and arguably under Rule
23(b)(1)(B). The Court relies only on Rule 28(b)(1) (A). cf.
McDonnell Douglas Corp. vy. United States District Court for the
Central District of California, 523 F.2d 1083 (9th Cir. 1975);
Landau v. Chase Manhattan Bank, N.A., 367 F. Supp. 1992 (SD
NY 1973); Goldman vy. First National Bank of Chicago, 56 FRD
587 (ND Ill. 1972). Here as distinguished from the above cases,
the failure to maintain a class action would impose incompatible
standards of conduct on the District of Columbia. This is not a
simple action for a money judgment but rather a case which calls
into question a tax statute of the District. It is therefore possible
that a contrary opinion could impose upon the District incom-
patible standards of conduct; collecting the tax from some and not
from others. Moreover, this Court cannot overlook the impact on
the fiscal affairs of the District of Columbia in the event of incon-
sistent decisions. For these reasons the Court concludes the case
is properly brought under Rule 23(b) (1) (A).
As to petitioner Bishop, he has requested that he not be included
as a member of this class. While to allow him to opt out of a
23(b) (1) action is unusual, the problems of opting out are not
involved here since Bishop has actually joined with Kleiboemer ard
both cases have been presented on joint records and joint argu-
ments.
24a
APPENDIX D
SUPERIOR COURT OF THE
DISTRICT OF COLUMBIA
TAX DIVISION
Docket No. 2379
AXEL-FELIX KLEIBOEMER,
Petitioner,
Vv.
DISTRICT OF COLUMBIA,
Respondent.
[Filed Oct. 27, 1977]
ORDER
Pursuant to the Opinion and Order entered in this case
on October 18, 1977, as modified by the Memorandum
Order, entered on October 27, 1977, it is hereby
ORDERED that the class consists of those non-resident
taxpayers who have paid the unincorporated business
franchise tax pursuant to D.C. Code 1973 Sec. 47-1574b
(Supp. IV 1977), except for Richard A. Bishop (see Tax
Docket No. 2362), and it is further
ORDERED that the petitioner, Axel-Felix Kleiboemer,
is hereby granted a refund for the franchise tax he paid
for the period January 1, 1975 through November 30,
1975, together with interest as provided by law, and it
is further
ORDERED that the members of the class shall be
entitled to refund of taxes, consistent with the Opinion
and Order as modified by the Memorandum Order, pro-
25a
vided they have complied with or comply with D.C. Code
1973, Sec. 47-1586j.*
/s/ John Garrett Penn
JOHN GARRETT PENN
Judge
Dated: October 27, 1977
*Cf: D.C. v. Keyes, 362 A.2nd 729 (D.C. App. 1976).
26a
APPENDIX E
SUPERIOR COURT OF THE
DISTRICT OF COLUMBIA
TAX DIVISION
Docket No. 2379
AXEL-FELIX KLEIBOEMER,
Petitioner,
Vv.
DISTRICT OF COLUMBIA,
Respondent.
[Filed Mar. 23, 1979]
ORDER
Upon consideration of the report regarding the feasi-
bility of identifying class members who were not pre-
viously mailed a notice pursuant to this Court’s order
of December 20, 1978, and of the supplemental plead-
ings of the parties and argument of counsel, it is hereby
ORDERED, that respondent District of Columbia shall,
not later than March 22, 1979, issue a press release to
the various District of Columbia media in its normal
manner,* notifying members of the class who were not
previously mailed a notice pursuant to this Court’s order
of December 20, 1978, of their right to file claims for
refunds respecting 1975 and subsequent tax years.
*In the normal course of business, the District’s press releases
are dispatched to the Washington Post, Washington Star, Asso-
ciated Press, UPI, 6 local weeklies (e.g., the Afro-American), the
four major television stations and approximately 12 local radio
stations by any one or all of the following three methods: a record-
ing line, mailings and/or by actual delivery of the press release
to the press room in the District Building.
27a
Such press release shall consist of an announcement
indicating its general purpose, that is, to notify those
class members who were not reached by the District’s
December, 1978 mailing of their right to file claims for
refunds respecting 1975 and subsequent tax years. A
copy of the notice mailed in December, 1978 shall be
appended to the announcement; and it is further
ORDERED, that if the notice information in the press
release described above is disseminated in any reasonable
manner by one of the two major local newspapers (the
Washington Post or the Washington Star), no further
notice to the affected class members shall be required.
If the press release described above is not disseminated
by either of the two major local newspapers (the Wash-
ington Post or the Washington Star), in any reasonable
manner, but by various other news media as described
in this Order, whether further notice to affected class
members shall be reauired is at the discretion of the
Court.
/s/ John Garrett Penn
JOHN GARRETT PENN
Judge
3/21/79.
28a
APPENDIX F
SUPERIOR COURT OF THE
DISTRICT OF COLUMBIA
Tax Division
Docket No. 2379
AXEL-FELIX KLEIBOEMER,
. Petitioner,
DISTRICT OF COLUMBIA,
Respondent.
{Filed Apr. 6, 1979]
ORDER
Upon consideration of this Court’s order of March 21,
1979 (filed March 23, 197%), and it appearing to the
Court that the District of Columbia issued a press release
to the various District of Columbia media notifying mem-
bers of the class who were not previously mailed a notice
pursuant to this Court’s order of December 20, 1978, of
their right to file claims for refunds respecting 1975 and
subsequent tax years; and it further appearing that the
notice information in the press release was broadcast over
three local radio stations (WHUR, WOOK, WGMS), and
published in the Washington Informer on March 29, 1979,
and in the Washington Post on April 5, 1979, it is hereby
ORDERED, that the notice information of the District
of Columbia’s press release was disseminated in a reason-
able manner within the meaning of this Court’s order of
March 21, 1979; that no further notice to the affected
class members shall be required pursuant to this Court’s
order of March 21, 1979; and that counsel for the class
members have fulfilled their obligations to the class as
regards informing the class of the necessity to file claims
for refunds.
/s/ Jonn Garrett Penn
Judge
April 5, 1979
29a
APPENDIX G
GOVERNMENT OF THE DISTRICT OF COLUMBIA
DEPARTMENT OF FINANCE AND REVENUE
Associate Director for
Audit, Compliance &
Investigation Administration
June 25, 1982
MEMORANDUM
Richard L. Aguglia
Assistant Corporation Counsel
TO:
FROM:
SUBIECT: Professional Tax Refund
J. Walter Lund
Associate Director
[SEAL]
Per your request of June 17, 1982, information concern-
ing professional tax refunds as of June 24, 1982 is as
follows:
I. Amount of claims and refunds paid, by year:
TAX YEAR
1975
1976
1977
1978
1979
1980
1981
NUMBER OF CLAIMS
1035
1290
DOLLARS
$ 4,044,823.57
5,488,567.29
6,333,133.34
7,8380,758.81
6,029,550.39
1,002,587.44
17,705.82
$30,247,126.66
30a
II. Number of taxpayers (claims who failed to file, by year:
TAX YEAR NUMBER OF CLAIMS DOLLARS
¢ (*Estimated)
1975 99 $ 25,245.00
1976 506 68,101.00
1977 429 113,146.00
1978 407 92,895.00
1979 110 13,728.00
1980 -0- -0-
1551 ¢ asi5
III. Number of taxpayers (claims who filed too late, by year:
TAX YEAR NUMBER OF CLAIMS DOLLARS**
1975 444 $ 459,784.00
1976 mG 1,034,459.00
1160 $1,494,243.00
* Based on known businesses. Estimate based on judgment of
income to be attributed to D.C. residents. These figures do
not include potential] claims from other firms or individuals.
** Includes interest computed to June 1, 1982.
If you have any questions on this material, please call
me.
JWL/rap
ec: Carolyn L. Smith
3la
APPENDIX H
CLAIM FOR REFUND OF DISTRICT OF COLUMBIA
UNINCORPORATED BUSINESS TAX
To: GOVERNMENT OF THE DISTRICT OF COLUMBIA
Department of Finance and Revenue
Tax Audit and Liability Division
300 Indiana Avenue, N.W.
Washington, D.C. 20001
1. Introduction. By petition filed in the Tax Division
of the Superior Court of the District of Columbia April 5,
1976, petitioner Axel-Felix H. Kleiboemer, appealed the
denial of his claim for refund of amounts paid pursuant
to the District of Columbia Unincorporated Business Tax,
47 D.C. Code § 1574, et seg., on behalf of himself and all
members of the class of similarly situated taxpayers. By
order entered October 17, 1977, Judge John Garrett Penn
directed that the case would be maintained as a class
action. By subsequent order entered October 27, 1977,
Judge Penn directed that all members of the class were
entitled to refund of amounts paid pursuant to the tax
for the period January 1 through November 30, 1975,
provided the members of the class complied with the
provisions of 47 D.C. Code 1586).
2. Identification of Taxpayers. This claim for refund is
made on behalf of all non-residents who are subject to the
District of Columbia Unincorporated Business Tax by
virtue of owning and engaging in the conduct of unin-
corporated personal service businesses in the District of
Columbia and who have paid the tax, except for Richard
A. Bishop (see Tax Docket No. 2362). See orders of
Judge Penn dated October 17, 1977, October 18, 1977, and
October 27, 1977, attached.
8. Amounts to Be Refunded. All amounts paid by the
class of taxpayers identified above pursuant to the D.C.
82a
Unincorporated Business Tax, 47 D.C. Code 1574, et seq.,
from January 1, 1975, to and including the date of filing
of this claim for refund, and appropriate interest.
4, Kind of Tax. The D.C. Unincorporated Business Tax,
47 D.C. Code 1574, et seq.
5. Grounds for Claim for Refund.
A. As to all amounts paid for the period January
1, 1975, through November 30, 1975: the tax is
illegal because it unconstitutionally discrimi-
nates between calendar year and certain fiscal
year taxpayers, as per Memorandum Order of
Judge Penn dated October 27, 1977.
B. As to all amounts paid for the periods from
January 1, 1975, through the date of filing of
this claim for refund:
(1) The tax is prohibited by 1 D.C. Code
147(a) (5), (1973 ed., Supp. V, 1978) ;
(2) The tax denies these taxpayers due proc-
ess and. equal protection of the laws as
guaranteed by the United States Consti-
tution; and
(3) The tax was enacted without “adequate
public notification” as required by 1 D.C.
Code 144(c) (1978 ed., Supp. V, 1978).
/8/
Co-Counsel for Petitioner Kleiboe-
mer and the class designated by or-
ders of Judge Penn dated October
17, 1977, and October 27, 1977,
Kleiboemer v. District of Columbia,
Tax Docket No. 2379.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.