Petition — City of Fairmont v. Pitrolo Pontiac-Cadillac Co.

Supreme Court brief1984

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No.

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1983

City of Fairmont, a municipal corporation,

Petitioner,

vs.

PITROLO PONTIAC-CADILLAC COMPANY,

a corporation,

and ACME LAND COMPANY, a corporation,

Respondents.

PETITION FOR WRIT OF CERTIORARI

FROM THE SUPREME COURT OF WEST VIRGINIA

GEORGE R. HIGINBOTHAM

HIGINBOTHAM & HIGINBOTHAM

P.O. Box 567

Fairmont, West Virginia 26555

(304) 366-2900

QUESTIONS PRESENTED

Did the Supreme Court of Appeals of the State of West

Virginia err in declaring a ruling retroactive that a

and thus deny the constitutional rights of

had paid for the service by permitting those

who had not paid for the service to escape liability.

Whether the difference in treatment of a city’s citizens by

Fourteenth Amendment to the United States Constitution.

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89 3 1

TABLE OF CONTENTS

CONSTITUTIONAL AND STATUTORY PROVISIONS

TABLE OF AUTHORITIES

Cases: Page

Allied Structural Steel Co. v. Spannaus, 438 U.S. 23 (1978) 16

Barnes v. District of Columbia, 91 U.S. 540 (1876) ........ 11

Beverly v. Scotland Urban Enterprises, 402 U.S. 955 (1971) . 20

Boddie v. Connecticut, 401 U.S. 391 (1971)............... 20

Bouie v. City of Columbia, 378 U.S. 347 (1964)............ 17

Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 U.S. 673

. 17,18, 19

Calder v. Bull, 3 U.S. 386 (1970) 17

Chambers v. B&O Railroad, 207 U.S. 142 (1907) .......... 20

Chevron Oil v. Huson, 404 U.S. 97 (197i) 16

Chicot County Drainage District v. Baxter State Bank, 308

SANS «ss GW Rando es Leheas aces dopeawdacabe 15

Cipriano v. City of Houma, 395 U.S. 701 (1969) .......... 16

City of Charleston v. Board of Education, 209 2d 55 (W.Va.

„ (eee ee, 8. 9. 13

Dartmouth College v. Woodward, 4 Wheat 518 (18199 11

Dobbert v. Florida, 432 U.S. 282 (1977 ũ 77) 17

Douglass v. County of Pike, 101 U.S. 677 (1879 16

Duling Brothers v. City of Huntington, 120 W.Va. 85, 196

e cus oeebautnes athe 12,13

Ellison v. City of Parkersburg, 284 S.E. 2d 903 (W.Va.

Arne 12

Federal Power Commission v. New England Power Co., 415

eee... re ee 13

ae City of Shinnston, 113 W.Va. 434, 168 S.E. 479

* Vv

Frederick v. Schwartz, 402 U.S. 937 (1971) ........... 20

Gelpcke v. Dubuque, 68 U.S. 175 (1860) 16

Georgia v. Pennsylvania R. R., 342 U.S. 431 (1945) ........ 11

Georgia v. Tennessee Copper Company, 206 U.S. 230 (1945) 11

Great Northern R. Co. v. Sunburst Oil & Refining Co., 287

Dr coeur riot ote 18

Gulf, Colorado & Sante Fe Railway v. Ellis, 165 U.S. 150

UEK kk Ral AER EET 19

Hann v. Clinton, 131 V. 2d 978 (10th Cir. 1942). 10

Hanover Shoe, Inc. v. United Machinery Corporation, 392

1 IEE RT NYSE ATS a 16

Hare v. City of Wheeling, 298 S. E. 2d 820 (W.Va. 1982). 8,9

Huffman v. Boerson, 406 U.S. 387 (1972) )) 20

Illinois v. City of Milwaukee, 406 U.S. 91 (1972) .......... 11

James v. United States, 366 U.S. 218 (961) 17

Lemon v. Kurtzman, 411 U.S. 192 (1973) ............. 15

Levin v. B&O Railroad Co. 179 Md. 125, 17A. 2 101 (1941) .17

Lindsey v. Washington, 301 U.S. 397 (198) 17

Linkletter v. Walker, 381 U. S. 618 (1965) ............... 14

McCoy v. City of Sistersville, 120 W.Va. 471, 199 8. E. 260

PP 8.9

Meltzer v. LeCraw, 402 U. S. 684 (197i) 20

Missouri v. Illinois, 180 U.S. 208 (1901) ................. 1 ‘

Mullaney v. Wilbur, 421 U.S. 684 (1975). 17 “4

Mutual Life Ins. Co. v. Bryant, 296 Ky. 815, 177 S. w. 2d 588, ae

Annot., 153 K. L. R. 422 (194) 7) 19 4

NAACP v. Button, 391 U.S. 415 (1960) 11

National Cable Television Association v. United States, 415

b ues Coe 13

Ohio v. Wyandotte Chemicals Corporation, 401 U.S. 493

UU . 11

Ortwein v. Schwab, 410 U.S. 684 (7% 20

Packet v. Keokuk, 95 U.S. 84 (1877) ................005. 13

Pierce v. Society of Sisters, 268 U.S. 510 (1925) 11

Ross v. Oregon, 227 U.S. 150 (191). 17

Shoemaker v. Cincinnati, 68 Ohio St. 603, 68 N. E. 1 (1903) . 10

Sierra Club v. Norton, 405 U.S. 727 U)). 11

South Carolina v. Katzenback, 383 U.S. 301 (966) 11

Succession of Lambert, 210 La. 636, 28 So. 2d 1 (1946)... . .19

Truax v. Corrigan, 257 U.S. 312 (1921) .................. 20

United States Trust Company v. New Jersey, 431 U.S. 1

b TIE 9 ea 16

United States v. Kras, 409 U.S. 484 (970 20

Versluis v. Haskell, 154 F. 2d 935 (10th Cir. 198). 19

Washington v. GMC, 406 U.S. 109 (1972) 11

World Fire & Marine Inc. Co. v. iach 423, 130 S.W.

„„ „„ cowagey Ghkmey clean

Statutes:

West Virginia Code § 8-13-13 (1976)

West Virginia Code § 8-4-20 ( !)

West Virginia Code § f. 18.8 (% %ꝙ nr

nen 2 ah 5S 2 1

3 mn >" pve es agi N po 7

ie Other Authorities: Page

2 Annotation, 10 AL. R. 3d 1371. „ 12

a Cooley, The Law of Taxation (4th Ed.). 13

Corwin, The Constitution and What It Means Today

SE RE ee „ „ 80 °

J. Hall, General Principles of Criminal Lew (2 Ed. 1960) .

Hochman, The Supreme Court and the eee of

Retroactive Legislation, 73 Harv. L. Rev. 692, 693

. PE ee ciel ee ban 16,17

7 Note, Prospective Overruling and Retroactive Application

2 in the Federal Courts, 71 Yale L. J.907 (1962). 16

. 71 Am. Jur. ad. State and Local Taxation §§1-21 (1974). 13

No.

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1983

City of Fairmont, a municipal corporation,

Petitioner,

vs.

PITROLO PONTIAC-CADILLAC COMPANY,

a corporation,

and ACME LAND COMPANY, a corporation,

Respondents.

PETITION FOR WRIT OF CERTIORARI

FROM THE SUPREME COURT OF WEST VIRGINIA

OPINIONS BELOW

The opinion of the West Virginia Supreme Court of

Appeals will be reported at W. Va. 5

——— (1983). The opinion of the lower court was not

JURISDICTION

The opinion of the West Virginia Supreme Court of

Appeals was entered on July 13, 1983. The Order denying

was entered on October 14, 1983. (Appendix infra,

p. A.) The jurisdiction of this Court is invoked under 28

U.S. C. § 1257

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED

1. The Fourteenth Amendment to the United States

Constitution which provides:

All persons born or naturalized in the United States,

and subject to the jurisdiction thereof, are citizens of

the United States and of the State where they reside.

No State shall make or enforce any law which shall

abridge the privileges or immunities of citizens of the

United States; nor shall any State deprive any person

of life, liberty, or property, without due process of law;

nor deny to any person within its jurisdiction the equal

protection of the laws.

2. The State Constitution, although nothing herein turns on

its terms, was Section 1 of Article 10 which provides in

pertinent part:

FF „ eT TET a ee? ee er eee

by their owners or bona fide tenants one dollar; and

upon all other property situated outside of

municipalities, one dollar and fifty cents; and upon all

other property situated within municipalities, two

3. The statute involved, although nothing herein turns on its

terms, was West Virginia Code § 8-13-13 which provides in

pertinent part:

Notwithstanding any charter provisions to the con-

trary, every municipality which furnishes any essential

or special municipal service, including, but not limited

to, police and fire protection, parking facilities on the

streets or otherwise, parks and recreational facilities,

street cleaning, street lighting, street maintenance and

improvement, sewerage and sewage disposal, and the

collection and disposal of garbage, refuse, waste, ashes,

trash and any other similar matter, shall have plenary

5 being of the residents of the City demands the contin- J

uance, maintenance and improvement of the essential a

service. of fire protection within the City, and as the

public revenues of the City are not sufficient for the

purpose of providing adequate fire protection within

the City, it therefore appears necessary under the pro-

visions of West Virginia Code § 8-13-13, that in order to

provide for the continuance, maintenance and improve-

ment of the esential and special service of fire protec-

tion within the City, it is necessary that there be

imposed upon the users of such special service such

rates, fees and rentals as are required to pay the cost of

the special service of fire protection;

Section 2: Levied: There is imposed and assessed upon

the respective owners of all residential, commercial,

industrial or other buildings of every kind and nature

regardless of the type or types of construction,

situated within the City, the amount of fifty-five cents

($.55) per one hundred dollars ($100.00) of the value of

such residential, commercial, industrial or other

buildings, the value being that as fixed for tax pur-

poses by the Assessor of the County, or by the Board of

Public Works of the State, and where no value has

been fixed then the value shall be determined and fixed

by the Finance Director. In order to determine such

value when no value has been fixed for tax purposes as

aforesaid, the Finance Director may make or cause to

be made such reports, investigations and surveys as

may be requisite.

There is hereby imposed and assessed upon the

respective owners of all tangible personal property,

goods and chattels located within the City, the amount

of fifty-five cents (8.55) per one hundred dollars

($100.00) of the value of such personal property, as

aforesaid, the value being that as fixed for tax pur-

poses by the Assessor of the County, or by the Board of

Public Works of the State, and where no such value has

been fixed then the value shall be determined and fixed

by the Finance Director. In order to determine such

value when no value has been fixed for tax purposes as

aforesaid, the Finance Director may make or cause to

be made such reports, investigations and surveys as

may be requisite.

Section 3: Collections: The rate and fees levied and

assessed by this article shall be collected from each

such user in two semiannual installments; the first of

such installments being due and payable on October 1

of each year and a like installment being due and

payable on April 1 of each year. Such rates, fees and

rentals imposed, levied and assessed pursuant to this

article shall be collected in the same manner as

Municipal taxes are collected under the statutes of the

State by the Sheriff of the County, provided that the

City shall reimburse and pay such Sheriff for the costs

of such collections so make; provided further, however,

that such rates, fees and rentals as are levied and

imposed against property otherwise exempt from taxa-

tion, or otherwise not collected by the Sheriff, shall be

collected by the City Treasurer.

Section 4: Collection Year: The rates, fees and rentals

imposed, levied and assessed by this article shall be

collected semiannually as set forth in the preceding

section, the collection year running from July 1 of one

year to June 30 of the following year.

Section 5: Delinquent Payments; Discounts: The rates

and fees assessed pursuant to the provisions of this

article shall be a debt due the City and may be

collected by proceedings instituted in courts of

appropriate jurisdiction, or in such manner as provided

by West Virginia Code § 8-13-15. A penalty of ten per-

cent (10%) of the rate or fee shall be added for any

default for a period of thirty days or less in payment of

such rate or fee, and for each succeeding thirty days

elapsing thereafter before payment there shall be an

additional penalty of one and one-half percent (1.5%).

Provided that a discount of two and one-half percent

(2.5%) shall be allowed on the first semiannual install-

g (3

a esi

ment payment due October 1 if paid thirty days prior

to such date each year, and a like discount of two and

one-half percent (2.5%) shall be allowed on the second

semiannual installment payment due April 1 if paid

thirty days prior to such date each year.

Section 6: Use of Funds: (a) The funds, moneys and

except as provided in subsection (b) hereof.

(b) A sum not to ce d five percent (5%) of all fees,

rates and rentals collected annually shall be used by

the Water Commission for the installation or 2

maintenance, repair and replacement of fire lines and

hydrants situated within the corporate limits of the

City. 4

Section 7: Rates levied in addition to other taxes:

service of fire protection within the City.

Section 8: Refusal to pay: No person shall refuse to

pay the rates, fees or rentals provided for by this article,

of aid or abet another person to avoid the payment of

such fees or rentals imposed by this article.

Section 9: Rules and Regulations: Council shall

proper and appropriate regulations as it may deem

proper or necessary for th: enforcement of this article.

Section 10: Definitions: (a) “Fire protection” as used in

this article, means the benefit to property from the sta-

tioning of fire services apparatus, the employment,

training and stationing of fire fighting personnel, and

the continuous availability of such essential service as

provided by the City.

(b) “User” includes any person owning buildings or

other structures or improvements situated on real

estate within the City and also includes the owners of

any tangible personal property, goods and chattels in

the City.

Section 11: Penalty: Whoever violates any provisions

STATEMENT OF THE CASE

A. BACKGROUND: In 1932, the voters of West Virginia

ratified a tax limitation amendment to the state constitu-

tion. The result was to reduce tax revenue to all governmenial

bodies. See Finlayson v. City of Shinnston, 113 W.Va. 434,

441, 168 S.E. 479, 482 (1933) (Hatcher, J., concurring.)

In 1933, the legislature of the State authorized

municipalities to furnish essential or special municipal serv-

ices, including fire protection, and to impose upon the users

of such services, reasonable fees and charges. See West

Virginia Code § 8-4-20 (1921). The 1933 statute is substantially

the same as West Virginia Code § 8-13-13 (1976) which is in

effect today.

In 1938, the Supreme Court of Appeals of West Virginia

upheld the imposition of fire fees under the 1933 statute,

but, in dicta, raised the issue of whether a fee based upon

the assessed value of property would be in violation of the

limitation amendment. McCoy v. City of Sistersville, 120

W.Va. 471, 478, 199 S.E. 260, 263 (1938). Any question raised

in McCoy as to the tax limitation had seemed to be resolved

by City of Charleston v. Board of Education, 209 S.E. 2d 55

(W.Va. 1974), and by statute.

In 1939, a statute, Code § 8-15-3, authorized value-based

fees for extra-territorial fire service. The law was well settled

in West Virginia, a value-based fee was permissible.

But, in the fall of last year, contrary to state precedent, a

police protection fee was struck down as constituting an ad

valorem tax in violation of the Tax Limitation Amendment

because it was imposed only on property owners and was

based on the value of property, Hare v. City of Wheeling,

298 S. E. 2d 820 (W.Va. 1982). 8

B. PROCEEDINGS BELOW: While Hare was being

decided, there were fire fee collection cases pending before

local courts. It appeared that Hare had implicitly overruled

the line of authority on fire fees and a trial court held the

eae PF N 5 un

City of Fairmont's fire fee scheme unconstitutional. The

Fairmont fee, like the fee in McCoy and City of Charleston,

was based on property valuation.

The trial court then certified two issues to the West

Virginia Supreme Court of Appeals. The first was whether

the Hare decision controlled the constitutional challenge to

Fairmont’s fire fee. The second was, assuming the charge

was invalid, whether the ruling would be prospective or

retrospective in its application. The learned trial judge had

held it prospective only, which would permit the municipality

to pursue those who had defaulted in e the fire

protection service charge. (See Appendix at p. .

The appellate court ruled that the fee was unconstitu-

tional since a charge which is ad valorem in character is by

definition a tax. And, as a tax, it violated the limitation

amendment. Thus, the State Supreme Court effectively

overruled City of Charleston v. Board of Education and its

progeny.

Further, and at issue here, the court declared the ruling

retrospective in nature, thus those who had defaulted in

payment were able to escape liability for the service

rendered. But for those who had paid for the service

rendered, the Court ruled that a voluntary payment of a tax

which is later declared nstitutional cannot be

recovered. (Appendix at p. )

By a petition for rehearing the City raised the constitu-

tional questions presented by the Supreme Court of

Appeals’ decision concerning retrospective application of

its ruling. The appellate court denied the motion without

opinion.

ARGUMENT

A MUNICIPAL CORPORATION HAS STANDING TO

REPRESENT THE INTERESTS OF ITS CITIZENS.

The fire protection service charge is unlike typical

municipal fees for garbage removal, water and sewer utility

services. The service necessarily involves the expenditure

of large sums of money for maintenance of equipment and

stationing of fire fighting personnel for the benefit of those

whose buildings require more fire protection than the

general public. It is this availability of fire protection that is

valuable to building owners. (See City Ordinance, Section

10.) Therefore, the costs incurred by the city to maintain the

availability of that fire-fighting capacity is a service already

rendered for which the City may charge a fee. See West

Virginia Code § 8-13-13.

The State Supreme Court's decision has set up two

classes of citizens in the City of Fairmont. Both classes have

received the benefit of having had available to them a trained

and equipped fire department, but only one class of citizen

will have been required to pay for the service as a result of

the court’s overruling decision.

When the service was rendered, the law of the State of

West Virginia was that the municipal service charge was a

fee not a tax. It did not become a “tax,” and invalid, until the

State Supreme Court repudiated its prior rule and made it

retroactive. The City was not only deprived of its right to

recover the delinquency but the paying citizen then bore all

the financial burden of paying for the service rendered.'

A municipality has a duty to ensure equal treatment of its

Cl. Shoemaker v. Cincinnati, 68 Ohio St. 603, 68 N. E. 1 (1908) (Street

improvement assessments under prior decisions upheld because of vested

rights of others previously acquired.)

citizens, even by the decision of a state court of last resort.

Pursuit of the public good’ in behalf of its citizens gives a

municipality standing’ in this matter.

II.

IN DETERMINING THAT THE LEVY WAS A TAX NOT

A FEE THE APPELLATE COURT ANNOUNCED NEW

PRINCIPLES OF LAW.

The propriety of imposing the costs of fire protection had

been sanctioned both judicially and legislatively. These

sanctions had been acted upon by municipal officials in

adopting the ordinance. They had been acted upon by the

purchase of fire-fighting equipment and the training and

stationing of firemen. And, most significantly, the sanction

Municipal corporations or municipalities are public, as distinguished

from private, corporations and are treated for political purposes and

endowed with political powers to be exercised for the public good in the

administration of local civil government.” Rhyne, The Law of Local

Government Operations, § 1.3; Dartmouth College v. Woodward, 4 Wheat

518, 699 (1819.)

*A municipal corporation is generally regarded by the courts as a

subordinate branch of the government of a state. Barnes v. District of

Columbia, 91 U.S. 540 (1876), McQuillin, Municipal Corporations § 2.08,

at 142 (1971). A state stands in parens patriae in behalf of its citizens and

may pursue its citizens best interests. See Missouri v. Illinois, 180 U.S.

208 (1901; Georgia v. Tennessee Copper Company, 206 U.S. 230 (1945) see

also Ohio v. Wyandotte Chemicals Corporation, 401 U.S. 498 (1971),

Wi v. GMC, 406 U.S. 109 (1972), Illinois v. City of Milwaukee, 406

Katsenbech, 388 U..!

had been acted upon by a majority of the city’s citizens who

voluntarily paid the fire service fee. The most recent deci-

sion of the State Supreme Court repudiates its earlier con-

struction of the law, and announced new principles to the

detriment of citizens relying upon an ordinance considered

valid at that time. It has been recognized that a governmental

body, as a representative of the interests of society in

general, may have relied upon a subsequently overruled

precedent, and that under such circumstances an overruling

decision may properly be denied retroactive effect in order

to protect the interests of society. Annot., 10 A.L.R. 3d.

supra, at 1387.

The legislative authority relied upon was West Virginia

Code § 8-15-3 (1976). That Code section directs municipali-

ties furnishing fire protection to property outside the

municipal limits to fix the charges therefore by reference to

the assessed value of similar property within the city limits.

The State Supreme Court implicitly held unconstitutional

West Virginia Code § 8-15-3 in the instant case, which until

the court’s decision, was a factor unon which a municipality

and its citizen could rely.

In McCoy v. Sisterville, supra, the State Supreme Court,

despite the dicta questioning a property based fee, found

that owners of buildings were fairly considered to be the

users of fire protection service, and therefore were the proper

parties to pay the fee based on valuation. 120 W.Va. at 478,

199 S.E. at 263. This was quoted with approval recently in

Ellison v. City of Parkersburg, 284 S.E. 2d 903, 905 (W.Va.

Huntington, 120 W.Va. 85, 90, 196 S.E. 552, 554-555 (1938). In

Duling, the court said:

A local assessment is to pay the expenses by an

improvement designed to benefit the property of the

payor. Taxation, in its usual application is to pay the

expenses of a government designed to benefit the

payor as a member of organized society. From the one

payment, the benefit to the payor is special; from the

other, general. Consequently, while an assessment for

a local improvement is an exercise of the taxing

powers, the assessment is generally not considered

taxative, within constructional and statutory restrictions

of that power. Id.

Further, in McCoy the court stated that given the

historical background of the act providing for special serv-

ices, a liberal interpretation was required and a “departure

from the general rule applied to construction of tax laws.”

120 W.Va. at 480, 199 S.E. at 264.

Thus municipalities and their citizens had not only relied

upon the legislative precedent of Code § 8-15-3, but early

judicial precedent. More recently, in 1974, a fire fee based

upon property valuation was upheld in City of Charleston v.

Board of Education, supra. City v. Charleston was based on

the holding in Duling. 209 S.E. 2d at 57. In overruling all of

To be sure, the correctness of the State Court's decision

is not at issue here. What is at issue is the retroactive

application of the decision in the of stare decisis. (See

dissent, Neely J., Appendix at p. 68.) The defenestration of

such precedent denies the citizens of Fairmont procedural

due process of law.

III.

MODERN DECISIONS RECOGNIZE A DOCTRINE OF

NON-RETROACTIVITY WHEN ANNOUNCING NEW

PRINCIPLES OF LAW.

In early decisions, courts established a policy in favor of

treating all overruling decisions as operating retrospectively

as well as prospectively. Under this traditional view the

courts merely discovered and announced existing law which

they had no hand in cveating. In essence, the act of overrul-

ing was a confession that the earlier rule should have not

been applied at all. Annot., 10 A.L.R. 3d 1371, 1378-1382.

Modern decisions take a more pragmatic view. These

decisions recognize the power of a court to (1) adopt the new

rule prospectively so as not even apply to the parties; (2)

limit retroactive effect to the parties only; (3) limit retroac-

tive effect to govern all cases pending when the overruled

case was decided; or (4) apply the new rule generally, even

to cases where “final” judgments were entered prior to the

overruling case. Annot., 10 A. L. R. 3d, supra, at 1378-1379.

Mr. Justice Clark discussed the foundations for applying

overruling decisions in a prospective or retroactive manner

in Linkletter v. Walker, 381 U.S. 618 (1965). There he noted

that Blackstone stated the view that the duty of courts was

not to “pronounce a new law, but to maintain and expound

the old one.” 381 U.S. at 622-23. While on the other hand,

- » 2.

1 ates 8 1 N ein ae at ey J Ae

generic statutory or common-law terms that are but empty

crevices of the law.” 381 U.S. at 624. In filling in the cracks,

or changing the shape of the law, courts may immediately

change the established relationships of everyone who falls

within the scope of the law.

Austin's point was echoed by Mr. Chief Justice Hughes in

Chicot County Drainage District v. Baxter State Bank, 308

U.S. 371 (1940):

[The actual existence of the law prior to the deter-

mination of unconstitutionality is an operative fact and

may have consequences which cannot justly be ig-

nored. The past cannot always be erased by a new

judicial declaration. 381 U.S. at 625.

Mr. Chief Justice Burger agreed in Lemon v. Kurtzman,

411 U.S. 192 (1973):

That statutory or even judge made rules of law are —

hard facts on which people must rely in making deci-

sions and in shaping their conduct. This fact of legal life

underpins our modern decisions recognizing a doctrine

of non-retroactivity. 411 U.S. at 199.

As the dissent of Mr. Justice Neely emphasizes below,

nothing has changed since the McCoy decision upheld value

based fees. The state constitution has not changed, nor has

the statute changed. This is a preeminent case where the

doctrine of stare decisis should apply. (Appendix, infra at p.

46 509 The City submits that its citizens should be able to rely

upon both the past judicial sanction of such a fee system as

well the legislative sanction. These are hard facts which

shaped the conduct of a municipality and its citizens for

many years.

. 1 * ae pep a Aa

r Oey ia te ee a Oe

IV.

RESPECTING THE DOCTRINE OF RETROACTIVITY

OF OVERRULING DECISIONS MAY DENY DUE

PROCESS OF LAW.

In civil matters, but not in a constitutional context, this

Court has acknowledged that the traditional doctrine of

retroactivity may deny justice without any compensating

gain beyond preserving the fiction that courts “find” the

law.

A series of municipal bond cases came before the court in

the last half of the nineteenth century. In those cases the

court applied state court rulings as prospective only.

Beginning with Gelpcke v. Dubuque, 68 U.S. 175 (1863), and

later in Douglass v. County of Pike, 101 U.S. 677 (1879), state

high courts had reversed themselves and found legislation

authorizing the issuance of bonds impermissible. This Court

found that judicial construction of a statute was tantamount

to amendment of the statute. 101 U.S. at 687. The Court

stressed the reliance which parties had placed on the only

legal guidelines available when the bonds were issued.

Note, Prospective Overruling and Retroactive Application

in the Federal Courts, 71 Yale L.J., 907, 919 (1962). See also

Cipriano v. City of Houma, 395 U.S. 701, 706 (1969); Chevron

Oil v. Huson, 404 U.S. 97 (1971); Hanover Shoe, Inc. v.

United Machinery Corporation, 392 U.S. 481 (1968).

The application of new rules of Jaw, both judge-made and

statutory, have risen to constitutional proportions from

time to time.

For example, while legislative enactments are usually

limited to prospective application, legislation which is

retroactive may be unconstitutional because it violates the

contract clause of the Constitution. See United States Trust

Company v. New Jersey, 431 U.S. 1 (1977); Allied Structural

Steel Co. v. Spannaus, 438 U.S. 23 (1978); Hochman, The

Supreme Court and the Constitutionality of Retroactive

Legislation, 73 Harv. L. Rev. 692, 693 (1960).

Retroactive legislation may also be unconstitutional

under the due process provisions of the Fifth or Fourteenth

Amendments. See Hochman, supra, note 36, at 693. And,

relating to the retroactivity of criminal statutes, the ex post

facto provisions of the Constitution prohibit the federal

government and states from imposing punishment for con-

duct before the law was enacted. E.g. Calder v. Bull, 3 U.S.

386 (1798); Lindsey v. Washington, 301 U.S. 397 (1937);

Dobbert v. Florida, 432 U.S. 282 (1977).

With regard to judicial decisions, the traditional view,

that it was the duty of the courts to expound upon the law

and not to announce new law, has also taken on constitu-

tional proportions. For example, if the law has always been

what the most recent judicial decision declares it to be, it is

possible that a person's actions could later be judged by

retroactive application of a judicial decision. While this may

not violate ex post facto prohibitions, Ross v. Oregon, 227

U.S. 150, 161 (1913), it does offend due process of law. Bouie

v. City of Columbia, 378 U.S. 347 (1964).

Bouie taught that the construction of a statute by a state

court of last resort which expanded the definition of a crime

was a violation of due process just as if it were an ex post

facto law. 378 U.S. at 353-354. See also James v. United

States, 366 U.S. 213, 224, (1961); Mullaney v. Wilbur, 421

U.S. 684, 690 (1975).

The West Virginia Supreme Court in its decision has

expanded the definition of a tax to include what has tradi-

tionally been recognized as a fee for municipal services. In

doing so, it has effectively made invalid that which was

valid in the doing, ee ee

due process considered by the Bouie court.

In civil cases in the 1930's, this Court was specifically asked

to pass upon the constitutionality of prospective overruling

of a judicial precedent, and, in a separate case, to decide

the constitutionality of retrospective overruling of a line of

decisions.

In Brinkerhoff-Faris Trust & Savings Co. v. Hill, 281 US.

673 (1930), the plaintiff sought to enjoin the treasurer of the

county from collecting certain taxes. The plaintiff had relied

upon what was believed to be well settled law in that state.

281 US. at 677, n. 2. The state court of last resort, however,

overruled the precedent and applied it retrospectively. The

net effect was to preclude the taxpayer from defending

itself from the alleged illegal tax. This was found to be a

deprivation of property without due process of law. Id. at

679.

In Great Northern Railway v. Sunburst Oil and Refinery

Company, 287 U.S. 358 (1932), a Montana statute gave a

railway commission the authority to fix rates. In a state

supreme court decision, the commission had been authorized

to fix reparation to carriers or shippers for excesses or defi-

ciencies in payments when the rate schedule was modified

by the railway commission. Sunburst sued Great Northern

to recover excess payments. The state high court overruled

its prior decision and applied it prospectively, thus allowing

Sunburst to recover. Great Northern was granted cer-

tiorari to consider the claim that it was then denied due

process of law. While the issue directly confronted only

involved prospective overruling of state precedent, Mr.

Justice Cardozo, for the Court, went on to declare that

Montana could choose to apply its decision either prospec-

tively or retroactively under the Constitution. 287 U.S. at

365-367.

Mr. Justice Cardezo acknowledged Brinkerhoff-Faris in

Sunburst and stated that litigants have frequently argued

that it is uneonstitutional to declare “invalid what was valid

in the doing.” Id. at 394. Thus the Court will “review, not

the wisdom of their (state courts) philosophies, but the

legality of their acts.” 286 U.S. at 365.

Sunburst did not overrule — Brinkerhoff-Faris, but

recognized that due process will protect against arbitrary

action of the courts. Thus, as applied in some cases, retroac-

tive overruling of prior precedent may deny due process of

law.* This Court still recognizes the Brinkerhoff-Faris rule:

“a decision overruling a prior authority may at times deny a

litigant due process if applied retroactively.” Lemon, supra,

411 US. at 211 (Dissent of Douglas, J., Brennan, J. and

Stewart, J.) The City submits that the act of the state court

denies due process of law in this instance.

DUE PROCESS IS A PROTECTION AGAINST

ARBITRARINESS AND INSURES EQUAL TREAT-

MENT WITHIN A COURT SYSTEM.

It has been said that the rationale underlying the principle

against ex post facto laws has been the revulsion against

the unlimited use of power by public officials. J. Hall,

General Principles of Criminal Law, 65 (2 Ed. 1960). Pro-

cedural due process also performs a similar function against

the arbitrary use of power. Corwin, The Constitution And

What It Means Today, 483 (1978) And it is submitted, that

procedural due process is a protection against arbitrary and |

unequal treatment by the courts. “The federal guaranty of :

due process extends to state action through its judicial as

well as its legislative, executive or administrative branch of

government.” Brinkerhoff-Faris, supra, 281 U.S. at 680. :

The importance of equal treatment before the courts has 4

long been recognized by this Court. Under equal protection . 5

standards in Gulſ. Colorado & Santa Fe Railway v. Ellis, 165

U.S. 150 (1897), this Court found an attorney's fee an-impedi-

ment to equal access to the court system. Similarly, in

154 F. 2d 985 (10th Cir. 1946); World Fire & Marine Ins. Co. v. Tapp, 279

Ky. 423, 180 S. W. 2d 848 (1999); Mutual Life Ins. Co. v. Bryant, 296 Ky.

815, 177 S. w. 2d 588, Annot., 158 A.L.R: 422 (1943); Succession of

Lambert, 210 La. 636, 28 So. 2d 1 (1946); Levin v. B&O Railroad Co. 179

Md. 125, 17 A. 2d 101 (1941.)

*Cf. Hann v. Clinton, 131 F. 2d 978 (10th Cir. 1942); Versiuis v. Haskell, 4

* 1

= 1 *. 2 «tm

rs . o> ve

et eS To 4 8 * sie nn

rr he eee 1 ic

41,

Chambers v. Baltimore & Ohio Railway, 207 U.S. 142 (1907),

the Court stated in a case where access to the court was

denied in wrongful death actions:

The right to sue and defend in courts is the alter-

native of force. In an organized society it is the right

conservative of all other rights, and lies at the founda-

tion of orderly government. It is one of the highest and

most essential privileges of citizenship . . . . 207 U.S.

at 148.

Later in Truax v. Corrigan, 257 U.S. 312 (1921), this Court

found the construction and application of a state statute by

Arizona's highest court that prevented a business from

obtaining injunctive relief from strike activities to be a

denial of due process of law and equal access to the court.

257 U.S. at 340.

Access to the courts by guaranteeing equal treatment,

grounded in the due process clauses of the Fourteenth and

Fifth Amendments, was the subject of considerable discus-

sion in this Court in the early 1970's. See Boddie v. Connec-

ticut, 401 U.S. 391 (1971); Ortwein v. Schwab, 410 U.S. 654

(1973); U.S. v. Kras, 409 U.S. 434 (1973); Huffman v. Boerson,

406 U.S. 337 (1972); Frederick v. Schwartz, 402 U.S. 937

(1971); Meltzer v. LeCraw, 402 U.S. 654 (1971); Beverly v.

Scotland Urban Enterprises, 402 U.S. 955 (1971).

The City submits, that if equal access to the dispute

resolving process of our form of government is considered

so fundamental as to be protective of all other rights, then it

can be expected that a decision by the courts will treat all

citizens to be affected by it equally. To do anything less is to

deny due process of law.

CONCLUSION

Review by this Court is necessary to correct a situation,

which, if left as it is, not only will severely impair the

system of funding municipal fire departments in the State

of West Virginia, but undermines a municipalities’ efforts to

treat each citizen equally. It is a matter of substantial public

importance and concern, and it is respectfully submitted

that the petition for a writ of certiorari should be granted.

HIGINBOTHAM & HIGINBOTHAM

GEORGE R. HIGINBOTHAM

P. O. Box 567

Fairmont, West Virginia 26555

CERTIFICATE OF SERVICE

I do hereby certify that a copy of the foregoing has been

served upon Robert Amos, Esq., Security Bank Building,

Fairmont, West Virginia 26554, this 11th day of January,

1984, via United States mail, postage prepaid.

Aichi

GEORGE R. HIGINBOTHAM

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1983

CITY OF FAIRMONT, a municipal corporation,

Petitioner,

PITROLO PONTIAC-CADILLAC COMPANY,

a corporation, and ACME LAND COMPANY, a corpora

Respondents.

FROM THE SUPREME COURT OF WEST VIRGINIA

Chief Justice McGraw concurs and reserves the right to

file a concurring opinion.

Justice Neely dissents and reserves the right to file a

dissenting opinion.

NO. CC935

CITY OF FAIRMONT, ETC.

PITROLO PONTIAC- CADILLAC CO., ET AL.

Marion County

Rulings on Certified

Questions Affirmed

Miller, Justice

1. “Where certain ordinances of the City of Wheeling

impose upon owners of property a police service charge based

upon the value of property, as determined from the land

books and personal property books of the Ohio County

Assessor, such ordinances impose, in fact, an ad valorem tax

upon property, and where, without regard to the police

service charge, property within the City of Wheeling is taxed

to the maximum amount permitted under W.Va. Const., art.

X. § 1, known as the Tax Limitation Amendment,’ and

W.Va. Code, 11-8-6d [1949], such ordinances violate that con-

stitutional provision.” Syllabus, Hare v. City of Wheeling,

W.Va. 298 S.E. 2d 820 (1982.)

2. The character of a tax is determined not by its label but

analyzing its operation and effect.

3. The essential characteristic of an ad valorem tax, as its

name suggests, is that the tax is levied according to the

value of the property. Also, assessment on a regular basis is

a common characteristic.

4. No matter how fairly apportioned an ad valorem

property tax may be, if its amount exceeds the constitu-

tional levy limits prescribed by Section 1 of Article X of the

Constitution of West Virginia, it is void.

—

5. Once an ad valorem tax is found to exist under a

municipal ordinance and the municipality is already at the

maximum ad valorem rates prescribed by law, such addi-

tional ad valorem tax violates Section 1 of Article X of the

Constitution of West Virginia.

6. Generally, when a statute or ordinance is declared

unconstitutional, it is inoperative, as if it had never been

passed.

7. Ordinarily, in the absence of any statutory right per-

mitting recovery, a voluntary payment of a tax made under

a statute which is later declared unconstitutional cannot be

recovered.

Miller, Justice:

The issues in this certified case arose when the City of

Fairmont filed suit against Pitrolo Pontiac-Cadillac and

Acme Land Company to collect delinquent fire service fees.

The defendants sought to defeat the collection by claiming

that the City fire service charge was an ad valorem tax and

violated the provisions of Section 1 of Article X of the Con-

stitution of West Virginia. While this case was pending in

the circuit court, we issued our opinion in Hare v. City of

Wheeling, W.Va. 298 S.E. 2d 820 (1982),

where we said in its single Syllabus:

Where certain ordinances of the City of Wheeling

impose upon owners of property a police service

charge based upon the value of property, as determined

from the land books and personal property books of the 0

Ohio County Assessor, such ordinances impose, in fact, |

an ad valorem tax upon property, and where, without

regard to the police service charge, property within

the City of Wheeling is taxed to the maximum amount

permitted under W. Va. Const., art. X. § 1, known as the

‘Tax Limitation Amendment,’ and W.Va. Code, 11-8-6d

[1949], such ordinances violate that constitutional

provision.

The circuit court held that the ordinance was unconstitu-

tional under Hare. It also concluded that the ruling in Hare

was applicable as against the City’s argument that Hare

should not be made applicable to delinquent taxes accruing

prior to the date of the Hare opinion. We agree with the

circuit eourt's decision on both issues.

There is no argument that the maximum levy provisions

of Section 1 of Article X relate to ad valorem taxes on real

and personal property.' Hare, supra; Appalachian Power

Company v. The County Court of Mercer County, 146 W.Va.

118, 118 S.E. 2d 531 (1961); Bee v. City of Huntington, 114

W. Va. 40, 171 S.E. 539 (1933); Finlayson v. City of Shinnston,

113 W.Va. 434, 168 S.E. 479 (1933.)

We are asked to distinguish the Hare case by characterizing

the tax in this case as a service fee rather than a property

tax. The City argues that Hare did not recognize the distine-

tion between a service fee and a property tax. Because

W.Va. Code, 813-13, authorizes imposition of fees for

municipal services, the City claims that its fire service

charge should be sustained as a fee and not as a property

tax. Furthermore, the City suggests that there are

differences between a fee and a property tax. First, a fee

is usually imposed for some specific purpose, and in the

present case it is for fire protection. Second, a property tax

ordinarily creates a lien and is not enforceable against the

taxpayer personally; whereas, a fee does not create a lien

and may be enforced personally.

This issue of property tax versus service fee was raised

in Hare, although not as extensively argued, and we stated:

The maximum tax limitations contained in Section 1 of Article X is:

de aggregate of taxes assessed in any one year upon

property . . shall not exceed fifty cents on each one

“The issue before this Court, therefore, is whether the

police service charge promulgated by the City of Wheeling

was a fee not precluded by the Tax Limitation Amendment,

or whether the police service charge was, in fact, an ad

valorem tax upon property enacted in violation of the Tax

Limitation Amendment.” W.Va. at 298 S.E.

2d at 825. We then proceeded to tite Dawson v. Kentucky

Distilleries & Warehouse Co., 255 U.S. 288, 65 L.Ed. 638, 41

8. Ct. 272 (1921), and Hukle v. City of Huntington, 134

W.Va. 249, 58 S.E. 2d 780 (1950), to the effect that the

character of a tax is determined not by its label but by

analyzing its operation and effect, and concluded:

It is without question that the police service charge

in this action is, in fact, an ad valorem tax upon property.

The ordinances were imposed upon the owners of prop-

erty within the City of Wheeling, and the amount to be

collected was directly related to the assessed value of

that property. Pursuant to Ordinance No. 7278, the

value of property for purposes of the ordinances was to

be determined from the land books and personal prop-

erty books of the Ohio County Assessor. W.Va.

at 298 S.E. 2d at 826.

When we turn to the pertinent provisions of the City of

Fairmont Ordinance No. 524, we believe that the tax is an ad

valorem tax and not a service fee. Section 2 of the ordinance

imposes and assesses on all residential, commercial,

industrial, or other buildings within the city, the amount of

fifty-five cents per one hundred dollars of the value of such

buildings.’ This section also prescribes the same rate of

tax for all tangible personal property, goods, and chattels.

The value according to the ordinance is “that as fixed for

tax purposes by the Assessor of the County, or by the Board

of Public Works of the State.“

Under Section 3 of the ordinance the tax is collected in

*The complete text of Section 2 is:

LEVIED: There is hereby imposed and assessed upon the respec-

tive owner of all residential, commercial, industrial or other

buildings of every kind and nature regardless of the type or types of

construction, situate within the City, the amount of fifty-five cents

($.55) per one hundred dollars of the value of such residential, com-

mercial, industrial or other buildings, the value being that as fixed

for tax purposes by the Assessor of the County, or by the Board of

Public Works of the State, and where no value has been fixed then

the value shall be determined and fixed by the Finance Director. In

order to determine such value when no value has been fixed for tax

purposes as aforesaid, the Finance Director may make or cause to

be made such reports, investigations and surveys as may be

requisite.

There is hereby imposed and assessed upon the respective

owners of all tangible personal property, goods and chattels located

within the City, the amount of fifty-five cents ($.55) per one hundred

dollars of the value of such personal property, as aforesaid, the

value being that as fixed for tax purposes by the Assessor of the

County, or by the Board of Public Works of the State, and where no

such value has been fixed by the Finance Director. In order for tax

purposes as aforesaid, the Finance Director may make or cause to

be made such reports, investigations and surveys as may be

requisite.

The language in this section is essentially the same as contained in the

original Ordinance No. 221, except that as to the amount of the tax which

has been increased by amendments from an original twenty cents per one

hundred dollars of value to the fifty-five cents per one hundred dollar

value.

“Under the state property tax provisions, county assessors set the

value of all real and personal property. W.Va. Code, 11-3-1. See generally

Killen v. Logan County Commission. W. Va. 295 S. E. 2d 689

(1982). The property of public service corporations is valued by the Board

of Public Works. W.Va. Code, 11-68-11.

1 ‘

2 7 : 9 n ＋ * at di";

The We tee ee, ee ee fe Bo ee RE Be a a Wee ane ee OO ere ee

two semiannual installments.’ The first is due and payable

on October 1 and the second on April 1 of each year.* This

section further states that the tax “shall be collected in the

same manner as municipal taxes are collected under the

statutes of the State by the Sheriff of the County.“

The distinction between an ad valorem tax and other

taxes has been discussed in a number of cases. In re City of

Enid, 195 Okla. 365, 158 P.2d 348 (1945), contains a lengthy

review of various authorities which have considered the

question and the court concluded:

In the early case of Society for Savings v. Coite, 73

U.S. 594, 6 Wall. 594, 18 L.Ed. 897, it was pointed out

that whenever a property tax was imposed by law, pro-

vision was made that the value of the property be

ascertained by appraisement and that the tax be

assessed upon the appraised value of the property. The

essential difference between an ad valorem tax and any

The complete text of Section 3 is:

COLLECTIONS: The rate and fees levied and assessed by this

Ordinance shall be collected from each user in two semiannual

installments; the first of such installments being due and payable on

October 1 of each year and a like installment being due and payable

on April 1 of each year. Such rates, fees and rentals imposed, levied

and assessed pursuant to this Ordinance shall be collected in the

same manner as municipal taxes of the City are collected under the

statutes of the State by the Sheriff of the County, provided that the

City shall reimburse and pay such Sheriff for the costs of such col-

lections so made; provided further, however, that such rates, fees

and rentals as are levied and imposed against property otherwise

exempt from taxation, or otherwise not collected by said Sheriff,

shall be collected by the City Treasurer.

Under the State property tax statutes, real and personal property

taxes are payable semiannually by October 1 and April 1 or they become

delinquent. W.Va. Code, 11A-1-13.

"Under the provisions of W.Va. Code, 11A-1-4, sheriffs of each county

are authorized to collect State imposed real and personal property taxes

rs * 5 must remit the municipalities’ shares under W. Va. Code,

11A-1-1

form of privilege tax is that the ad valorem property

tax is based upon the value of the property, tangible or

intangible. Pacific Gas & Electric Co. v. Roberts, 168

Cal. 420, 143 P. 700. See, also, Commonwealth v. Colum-

bia Gas & Electric Corporation, 336 Pa. 209, 8 A.2d 404,

131 A.L.R. 927. Other authorities to the same tenor and

effect as those hereinabove cited are collected in the

annotations: 89 A.L.R. 1432, 110 A.L.R. 1485,

117 A.L.R. 847, 128 A. L. R. 894, 103 A. L. R. 98. See also,

26 R.C.L., sec. 19, p. 35; 33 C.J.S., Excise, p. 110. 195

Okla. at 369, 158 P.2d at 352.

In Callaway v. City of Overland Park, 211 Kan. 646, 651, 508

P. 2d 902, 907 (1973), the court made this distinction:

The term ‘excise tax’ has come to mean and include

practically any tax which is not an ad valorem tax. An

ad valorem tax is a tax imposed on the basis of the

value of the article or thing taxed. An excise tax is a

tax imposed on the performance of an act, the engaging

in an occupation or the enjoyment of a privilege. (See

15A Words and Phrases, p. 150.) (Emphasis added.)

The Maryland Supreme Court used this general definition

of a property tax in Weaver v. Prince George’s County, 281

Md. 349, 357-58, 379 A.2d 399, 403-04 (1977):

The consensus of opinion appears to be that a prop- |

erty tax is a charge on the owner of property by reason .

of his ownership alone without regard to any use that

might be made of it, Bromley v. McCaughn, 280 U.S. |

124, 136, 50 S.Ct. 46, 74 L.Ed. 226 (1929); Dawson v. g

Kentucky Distilleries Co., 255 U.S. 288, 294, 41 S.Ct.

272, 65 L.Ed. 638 (1921); Flint v. Stone Tracy Co., 220

US. 107, 152, 31 S.Ct. 342, 55 L.Ed. 389 (1911); Herman

v. M. & C. C. of Baltimore. 189 Md. at 197,55 A. Ad 491; . . .

Finally, the property tax and the excise tax may be

differentiated by the methods used to impose them and

to fix their amount. Thus, it has been held that where a

5 -

+ ;

tax is levied directly by the Legislature without assess-

ment and is measured by the extent to which a

privilege is exercised by a taxpayer without regard to

the nature or value of his assets, it is an excise. Where,

however, the tax is computed upon a valuation of the

property and is assessed by assessors, and where the

failure to pay the tax results in a lien against the prop-

erty, it is a property tax, even though a privilege

might be included in the valuation. Montgomery County,

Maryland v. Maryland Soft Drink Association, Inc., 281

Md. 116, 127-28, 377 A.2d 486 (1977); Walker v. Bedford,

93 Colo. 400, 26 P.2d 1051, 1053 (1933); City of De Land

v. Florida Public Service Co., 119 Fla. 804, 161 So. 735,

738 (1935.) See Society for Savings v. Coite, 73 U.S. (6

Wall) 594, 610, 18 L.Ed. 897 (1868.)

See also, Solvang Municipal Improvement District v.

Board of Supervisors of Santa Barbara County, 112 Cal.

App. 3d 545, 169 Cal. Rptr. 391 (1980); Gulf Fertilizer Co. v.

Walden, 163 So.2d 269 (Fla. 1964); Continental Illinois

National Bank and Trust Company of Chicago v. Lagel, 78

III. 2d 387, 36 Ill. Dec. 650, 401 N.E.2d 491 (1979); Thomas v.

City of Elizabethtown, 403 S.W.2d 269 (Ky. 1966); Joslin v.

Regan, 63 A.D.2d 466, 406 N.Y.S.2d 988 (1978), affd, 48

N.Y.2d 746, 422 N.Y.S.2d 662, 397 N.E.2d 1329 (1979); 71

AmJur 2d State and Local Taxation § 20 (1973).

Analyzing the ordinance, it is apparent that it closely

resembles the general State ad valorem property tax for

real and personal property. The City utilizes the

assessments made by the county assessor and the State

Board of Public Works for the general property tax to

determine the value of the property subject to the City's

tax. The tax payments are required to be made semiannually

and the due dates are the same as the State property tax.

The sheriff is empowered to collect the City tax, the same as

the State tax. The rate of tax is fifty-five cents for each one

hundred dollars of value which is based on the traditional ad

valorem property tax concept, the value of the property.

The only difference is that under the State act a lien is

imposed on real property for the taxes assessed. W.Va

Code, 11A-1-2. A State statute* provides as does the

ordinance® that delinquent taxes are debts that may be

sued upon.

We do not view the absence of a provision for a lien right

in the ordinance to be controlling in identifying whether the

ordinance is a property tax. Nor do we believe that a critical

distinction can be made over the fact that only buildings are

assessed under the ordinance rather than the entire fee.

The essential characteristic of an ad valorem tax, as its

name suggests, is that the tax is levied according to the

value of the property. Also, assessment on a regular basis is

a common characteristic. How or who determines the value

of the property is not a critical element in analyzing

whether the tax is an ad valorem tax.

W. Va. Code, 11A-2-2, provides:

Taxes are hereby declared to be debts owing by the taxpayer, for

which he shall be personally liable. After delinquency, the sheriff

may enforce this liability by appropriate action in any court of com-

petent jurisdiction. No such action shall be brought after five years

from the time the action accrued.

*Section 13 of the ordinance states:

PENALTIES, DISCOUNT: The rates and fees assessed pursuant

one-half percent (2½ %%) shall be allowed on the second semi-

annual installment payment due October Ist if paid thirty (30) days

prior to the said date each year.

The City argues that property owners having buildings

are the logical class of users of fire protection and,

therefore, the charge being based on the value of their

building is an eminently fair way of apportioning it for fire

service. We have no quarrel with this abstract proposition.

If we were dealing with an apportionment issue, the argu-

ment would make good sense. The issue here, however, is

not one of apportionment.““ This case involves the ques-

tion of whether our constitutional limitation on maximum

rates for ad valorem property taxes has been exceeded. As

in the Hare case, it is admitted that the City is already at

the maximum levy rate authorized by W.Va. Code, 11-8-6d,

which is the statute allocating to municipalities their

maximum share of the levy rates established in Section 1 of

Article X of our Constitution.“ Consequently, we are

“This was the issue in City of Moundsville v. Steele, 152 W.Va. 465,

164 S.E. 2d 430 (1968), where we upheld under W.Va. Code, 8-13-13, a paving

fee based on a lineal front foot assessment against the claim that it

violated the uniformity provisions of Section 9 of Article X of the Con-

stitution of West Virginia. Such an assessment not being based on value

would not violate Section 1 of Article X.

"In Hare v. City of Wheeling, _.__. W.Va. at 298 S.E. 2d at

824, we said:

In response to the Tax Limitation Amendment [Section 1 of

Article XJ the West Virginia Legislature enacted W.Va. Code,

Code, 11-8-4 [1933], municipalities consti one such unit.

erty is classified for levy purposes by W. Va. 11-8-5 [1961], and

the aggregate of taxes imposed upon the different property

classifications by the taxing units is established by W.Va. Code,

11-86 [1939]. The specific levies permitted to be imposed by each

;

compelled to conclude that no matter how fairly apportioned

an ad valorem property tax may be, if its amount exceeds

the constitutional levy limits prescribed by Section 1 of

Article X of the Constitution of West Virginia, it is

void.

An argument is also made that the Hare decision, involv-

ing as it did a police service fee, can be distinguished from

the fire service charge in the present case by following

McCoy v. City of Sistersville, 120 W.Va. 471, 199 S.E. 260

(1938). In note 7 of Hare, we discussed McCoy and several

related cases and began by stating: “Prior decisions of this

Court have not directly addressed the validity of a

municipal ordinance, promulgated pursuant to W.Va. Code,

8-13-13 [1971], in terms of whether such ordinance

constituted an ad valorem tax upon property in excess of

the limitations established by the Tax Limitation

Amendment.” W.Va. at 298 S.E.2d at 825.

The primary issue in McCoy involved the constitutionality

of certain municipal fees including a fire service charge

under Section 9 of Article X of our Constitution which

requires that municipal statutes shall be uniform.“ Most

of the ordinance was declared unconstitutional. The fire service

charge was held constitutional because the court found it to

be uniform since “the owners of the building and chattels

“Although not an issue here, we recognize that Section 1 of Article

X provides for 50% excess levies and that other constitutional provisions

also have an impact on the maximum levy rates. W.Va. Const. art. X, §§ 7,

8 & 10.

may be fairly said to be users of the services provided for

their protection.” 120 W.Va. at 478, 199 S.E. at 263. The

court’s discussion of the impact of Section 1 of Article X was

at best ambiguous: “If the assessed value were used, and

the fee assessed, a serious question would have been raised

as to a violation of the limitation amendment.” 120 W.Va. at

478, 199 S.E. at 263.

The argument that McCoy can be read to sanction an ad

no question that buildings affixed to the land are a part of

the realty and, therefore, can be taxed as real property. Mr.

Klean Car Wash, Inc. v. Ritchie, . W. Va. 244

8. E. 2d 553 (1978); State Raad Commission v. Curry, 155

W. Va. 894, 187 S. E. 2d 632 (1974); see also Whited v.

that if the owners of property are required to pay the

government a sum based upon the value of the property,

this is an ad valorem tax. Once an ad valorem tax is found to

exist under a municipal ordinance and the municipality is

already at the maximum ad valorem rates prescribed by

law, such additional ad valorem tax violates Section 1 of

Article X of our Constitution.

Finally, the City argues that we should hold that Hare is

prospective only thus enabling the City to collect delinquent

fire service fees that have accrued before the date of the

Hare decision. This we decline to do since the circuit court

in the present case found the City’s ordinance to be uncon-

stitutional under Hare — a finding that we have confirmed.

We have utilized principles of retroactivity in certain cases

when we have created new principles of law which have

marked a clear departure from our prior law. E.g., LaRue v.

LaRue, W.Va. S.E. 2d (No.

15578, 5/25/83); Sitzes v. Anchor Motor Freight, Inc.,

W.Va. 289 S.E. 2d 679 (1982); Bond v. City of Hunt-

ington, W.Va. 276 S. E. 2d 539 (1981); Ables v.

Mooney, W.Va. 264 S.E. 2d 424 (1979);

Bradley v. Appalachian Power Company, W.Va.

256 S.E. 2d 879 (1979). These new legal principles

have resulted in the main from this Court's traditional

power to create and modify common law principles. We

have pointed out that this is a power traditionally exercised

by other appellate courts. See Morningstar v. Black and

Decker Manufacturing Company, Inc. W.Va.

253 S.E. 2d 666 (1979).

However, where a statute or an ordinance is declared

unconstitutional, a different rule applies. It is generally held

that when a statute or ordinance is declared unconstitu-

tional, it is inoperative, as if it had never been passed. E.g.,

Shirley v. Getty Oil Company, 367 So.2d 1388 (Ala. 1979);

Kozlowski v. Kozlowski, 80 N.J. 378, 403 A.2d 902 (1979);

Stanton v. Lloyd Hammond Produce Farms, 400 Mich. 135,

253 N. W. 2d 114 (1977); Sadler v. Connolly, 175 Mont. 484,

575 P. 2d 51 (1978); 16 Am. Jur. 2d Constitutional Law § 256

(1979). In Morton v. Godfrey L. Cabot, Inc., 134 W.Va. 55, 63

S.E. 2d 861 (1949), we recognized this rule in Syllabus Point

2, which was based on Norton v. Shelby County, 118 U.S.

425, 30 L.Ed. 178, 6 S.Ct. 1121 (1886). In Morton v. Godfrey

L. Cabot, Inc., supra, we also re gnized the qualification to

this absolute rule as set out in Chicot County Drainage

District v. Baxter State Bank, 308 U.S. 371, 374, 84 L.Ed.

329, 332-33, 60 S.Ct. 317, 318 (1940), where the United States

Supreme Court stated: “It is quite clear, however, that such

broad statements as to the effect of the determination of

unconstitutionality must be taken with qualifications. The

actual existence of a statute, prior to such a determination,

is an operative fact and may have consequences which cannot

justly be ignored.”

In the present case, we conclude that the City may not

proceed to collect delinquent fire service taxes because its

ordinance has been found to be unconstitutional.'*

Although we have concluded that the City may not pur-

sue delinquent fire service taxeg accruing before the date of

Hare, this does not mean that the City is liable to the tax-

payers for taxes paid pursuant to the ordinance which has

been found to be unconstitutional. The general rule is that,

ordinarily, in the absence of any statutory right permitting

recovery, 2 voluntary payment of a tax made under a

statute which is later declared unconstitutional cannot be

‘In Blankenship v. Minton Chevrolet, Inc., W.Va. 266

S.E. 2d 902 (1979), we dealt with a somewhat related problem, the

recovered. E.g., Little v. Bowers, 134 U.S. 547, 33 L.Ed.

1016, 10 S.Ct. 620 (1890); Berry v. Daigle, 322 A. 2d 320 (Me.

1974); State v. Silas, 92 N.M. 434, 589 P. 2d 674 (1979); Coca-

Cola Company v. Coble, 33 N.C. App. 124, 234 S. E. 2d 477

(1977), cert., granted, 293 N. C. 159, 236 S8. E. 2d 708, aff'd, 293

N.C. 565, 238 S.E. 2d 780; Stroop v. Rutherford County, 567

S.W. 2d 573 (Tenn. 1978); National Biscuit Co. v. State, 134

Tex. 293, 135 S.W. 2d 687 (1940); 72 Am. Jur. 2d State and

Local Taxation § 1087 (1974).

We, therefore, affirm the circuit court’s rulings on the

certified questions to the effect that the ordinance is

unconstitutional and that the City may not seek to collect its

delinquent fire service charges.

Rulings on Certified Questions Affirmed.

NO. CC935 CITY OF FAIRMONT, ETC., V. PITROLO

PONTIAC-CADILLAC CO., ET AL.

McGraw, Chief Justice, concurring:

The controversy in the present case superficially con-

cerns whether the charge levied by the City of Fairmont for

fire protection is a fee or a property tax. In reality,

however, the larger question is whether the court should

label such charges “fees” in order to avoid the constitutional

restrictions placed by the people on the imposition of pro-

perty taxes.

Any analysis of the relationship between state or local

government and its citizenry in West Virginia must begin

with art. II, § 2 of the West Virginia Constitution, which

provides, “The powers of government reside in all the

citizens of the State, and can be rightfully exercised only in

accordance with their will and appointment.” In State ex

rel. Skinner v. Dostert, 278 S.E. 2d 624, 629 (W.Va. 1981), the

court discussed the important historical shift in the theory

of government which was precipitated by the great

sovereign, whose will legitimizes authority, as the people.”

In exercising that sovereign authority, the people of

Although there existed a strong belief that essential

i services should still be provided, the will of

and fire protection; waste disposal — solid and liquid; and

streets. The mandate of the people was that these essential

services should be provided first, with other types of

nonessential services being provided only if surplus

revenues were available. This required that priorities be

established to ensure that essential services be provided at |

the lowest possible cost to the taxpayer.

Government, however, failed to rise to the occasion and

sought to avoid its constitutional responsibilities. The

strategy which evolved was to utilize tax dollars properly |

meant for the provision of essential services to fund |

nonessential services. Commenting upon this expansion in

local government, one leading authority has noted,

The rapid development of community service and

the steady expansion of municipal functions has |

rendered the equitable raising and distribution of 99

funds for publie purposes of prime importance. The

financial problem is among the most serious. As

the activities of the city grow the cost of municipal

service rapidly advances. Many things essential to

urban life, which were formerly in private hands, are

now being gradually socialized, and as a result are

becoming customary municipal functions. City expendi- 4

tures expand far beyond the increase of the community

in wealth and population . . Continuously increas-

ing pressure for more and better community service

and the increase of city officers and servants and

bureaucratic complications entailed by it, have involved

great and increasingly greater expenditures. Hence

fresh sources of revenue must be found.

—_

E. McQUILLEN, THE LAW OF MUNICIPAL

CORPORATIONS § 39.02 at 3-4 (1970).

After diverting tax revenues into these new areas of

governmental endeavor, government began charging its

citizenry “fees” for the provision of traditional essential

services. By attempting to call a spade a shovel, political

leaders, pressed by the demands of diverse constituency

groups within local governmental entities, have sought to

avoid the will of the people that the growth of government

be limited. Ironically, it was many of these same political

leaders who helped spur passage of the Property Tax

Limitation [Amendment] of 1982, W.Va. Const. art. X, § 1b,

which further constrained the ability of local governments

in West Virginia to raise revenue. To wiggle off the sharp

hook which they have fashioned for themselves, these

political leaders now turn to the court and ask it to label a

“tax” a “fee.”

Engaging in this type of subterfuge and sophistry is

nothing new to West Virginia where avoiding limitations on

revenue-raising ability is concerned. In Bee v. City of

Huntington, 114 W.Va. 40, 171 S.E. 539 (1933), local govern-

mental leaders argued that the Tax Limitation Amendment

of 1932 only limited the level of taxes levied to current

expenses and did not prevent the levying of taxes necessary

to meet existing indebtedness even if it meant that total

taxes levied would be in excess of the constitutional max-

imum. Judge Kenna, in a concurring opinion, identified the

practical problem facing the Court:

On the one hand, it is urged that we are faced by the

possibility of a breakdown of local government in a

large number of the taxing units throughout the state

through lack of money realized from taxation to pro-

vide for their essential functions, and, on the other

hand, that the sovereign will of the people, expressed

by them in the very instrument to which these taxing

units owe their existence, will be thwarted in a matter

* 4

114 W.Va. at 50, 171 S.E. at 544.

The majority in Bee correctly identified the Court's duty

in addressing this problematic issue as “the humble one of

construing the constitution by the language it contains.” 114

W. Va. at 46-47, 171 S.E. at 542, quoting, People v. Draper, 15

N.Y. 532, 546 (1857). The court noted the spuriousness of the

argument advanced by the local governments involved: “It

is argued . . that the limitation should be ignored in levy-

ing taxes necessary for orderly government, which would

mean that a limitation of levies for the operation of govern-

ment cannot be effected even by constitutional proclama-

tion. This position is without legal basis.” 114 W.Va. at

47, 171 S.E. at 543.

The court in Bee quoted language used by the Supreme

Court of North Carolina in French v. Board of Commis-

sioners, 74 N.C. 692, 696-97 (1876), which when faced with a