# Appendix — Alltel Communications, LLC v. City of Springfield, Missouri (No. 08-548)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2008

## Text

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APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE EIGHTH CIRCUIT
FILED JULY 3, 3008

UNITED STATES COURT OF APPEALS
FOR THE EIGHTH CIRCUIT

No. 07-2884
City of Jefferson City, Missouri,
Plaintiff,
City of Springfield, Missouri,
Plaintiff/Appellee,
v.
Cingular Wireless LLC; Southwestern Bell Wireless, LLC,
Debendéetel/dgndlants,
SBC Communications, Inc., Southwestern Bell

Telephone, LP; Nextel West Corp.;
Alltel Communications, Ine.,

Defendants.

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Appendix A
No. 07-2885
City of Jefferson City, Missouri,
Plaintiff,

City of Springfield, Missouri,

Plaintiff/Appellee,
v.
Cingular Wireless LLC; SBC Communications, Inc;
Southwestern Bell Wireless, LLC; Southwestern
Bell Telephone, LP; Nextel West Corp.,
Defendants,
Alltel Communications, Inc.,

Defendant/Appellant.

Submitted: March 12, 2008
Filed: July 3, 2008

Before WOLLMAN, HANSEN, and MELLOY, Circuit
Judges.

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Appendix A
WOLLMAN, Circuit Judge.

The issue before us is whether providing cell phone
services! in the City of Springfield (“Springfield”)*
makes a company subject to a local tax ordinance on
businesses who engage in “supplying telephones, and
telecommunications and telephonic service, and
telecommunications services, within the city.”* Springfield
Code § 70-452 (2000). The district court* granted
Springfield’s request for declaratory judgment and held
that the defendants, Alltel Communications, Inc. (“Alltel’’),
Cingular Wireless LLC, and Southwestern Bell Wireless,
LLC (Cingular and Southwestern Bell hereinafter referred
to as “Cingular”), provide telephonic services within
Springfield and are therefore subject to the tax. The
district court dismissed Springfield’s tax collection claim
under Missouri's exclusive tax remedy doctrine because

1. The defendants in this case describe their services as
wireless, telecommunications, or “Commercial Mobile Radio
Services.” We will refer to the services generally as “cell phone
services,” as that is how the services are marketed to the public
and generally recognized.

2. The City of Jefferson’s claims were dismissed by
stipulation.

3. It is undisputed that the defendants engage in providing
services within Springfield. Whether these services are
telephones and telephonic services is the issue in this case. The
quantity of services provided “within the city,” and the resulting
amount of taxes owed is an issue of fact not before us today.

4. The Honorable Nanette K. Laughrey, United States
District Judge for the Western District of Missouri.

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Appendix A

Springfield must follow its own tax assessment and
collection procedures before bringing suit to collect the
tax. Because we conclude that Springfield’s request for a
declaratory judgment on the issue of liability was properly
before the district court and that a cell phone is a telephone
and cell phone services are telephonic services for purposes
of Springfield’s tax ordinance, we affirm.

I. Background

Springfield has a long-standing ordinance that
imposes a 6% tax on the gross receipts of any business
that supplies telephone and telephonic service within
Springfield. This ordinance was modified in 2000 as part
of a recodification that changed section numbers,
clarified existing language, and made the code
electronically searchable. The 2000 recodification of the
tax ordinance added “telecommunications” and
“telecommunications services” to the existing language
in the ordinance. Springfield Code § 70-452.

In 2004, Springfield sent a demand letter to cell
phone companies that did business within Springfield
requesting payment of the tax for the past five years
and indicating that if no action was taken, Springfield
would pursue legal remedies.’ The defendants did not
comply, and Springfield brought this suit in federal
district court to collect the past-due taxes.

5. The letter stated that the five-year time frame was
chosen because of the relevant statute of limitations.

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Appendix A

Springfield’s complaint sought collection of the tax
owed. Springfield filed a motion for summary judgment
on the issue of whether the defendants were liable to pay
the tax, which the district court and the parties treated as
a request for a declaratory judgment on the issue of liability.
The defendants argued that they provide “Commercial
Mobile Radio Service” (“CMRS”), and therefore the tax
does not apply to them. The defendants also challenged
the validity of the ordinance. On June 9, 2005, the district
court held that the term “telephone” in the tax ordinance
encompasses CMRS and that the defendants offer these
services within Springfield and are therefore subject to
the tax. City of Jefferson v. Cinguiar Wireless, LLC,
No. 04-4099, 2005 WL 1384062 (WD. Mo. June 9, 2005)
(City of Jefferson I) (order granting plaintiffs’ motion for
partial summary judgment). The district court did not
reach the issue of whether the 2000 modification of the
ordinance violated the Hancock Amendment to the
Missouri Constitution because it concluded that the issue
in the case involved the language in the ordinance that
existed before 2000. The district court did not rule on the
amount of tax owed.

On August 21, 2006, Alltel filed a motion to dismiss for
lack of subject matter jurisdiction or, in the alternative,
that the district court abstain from deciding the case.
On October 17, 2006, the district court denied the motion
to dismiss on the legal issue of liability, but dismissed
Springfield’s claim for tax collection without prejudice,
concluding that because Springfield had an exclusive
administrative remedy for tax assessment and collection,
it was required to follow that procedure. City of Jefferson

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Appendix A

v. Cingular Wireless, LLC, No. 04-4099, 2006 WL 2987678
(W.D.Mo. Oct.17, 2006) (City of Jefferson IT) (order
dismissing Springfield’s tax collection claim without
prejudice). On Alltel’s motion for reconsideration, the
district court declined to vacate its June 9, 2005, order
and held that the defendants were liable to pay the tax.
City of Jefferson v. Cingular Wireless, LLC, No. 04-

| 4099, 2006 WL 3937243 (W.D.Mo. Dec.20, 2006) (City of

; Jefferson III) (order declining to vacate or amend City
of Jefferson I and City of Jefferson II).

Alltel then argued that it had not been given a fair
opportunity to litigate the propriety of the request for
declaratory judgment. The district court vacated City
of Jefferson I and City of Jefferson II and allowed
Springfield to amend its complaint to add a claim for
declaratory judgment on the issue of liability.* Count I
of the second amended complaint requested past-due
taxes from the defendants. Count III sought a
declaratory judgment that the tax ordinance applies to

6. During a teleconference on January 29, 2007, the district
court discussed with the parties the prospect of allowing
Springfield the opportunity to amend its complaint to add a
claim for declaratory judgment. The district court noted that it
was allowing the amendment for Alltel’s benefit because Alltel
argued that it was unfair that it did not have a chance to raise
its abstention argument in a timely fashion. In the July 3, 2007,
order, the district court further noted that it believed
Springfield’s claim for declaratory judgment, while not
originally pleaded, was properly before the court, even before
the second amended complaint, pursuant to Rule 15 of the
Federal Rules of Civil Procedure. City of Jefferson IV, 2007 WL
1965572, at *2 n. 4.

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Appendix A

the defendants. Alltel filed a motion to dismiss the
second amended complaint. On July 3, 2007, the district
court dismissed Count I without prejudice as to all
defendants and denied the motion to dismiss Count ITI.
City of Jefferson v. Cingular Wireless, LLC, No. 04-
4099, 2007 WL 1965572 (W.D.Mo. July 3, 2007) (City of
Jefferson IV) (order nunc pro tunc dismissing without
prejudice Springfield’s tax collection claim).

Also on July 3, 2007, the district court entered
another order, which held that the tax is enforceable
against the defendants because it applies to cell phone
services provided within Springfield. City of Jefferson
v. Cingular Wireless, LLC, No. 04-04099, 2007 WL
1965572 (W.D.Mo. July 3, 2007) (City of Jefferson V)
(order nunc pro tunc granting Springfield’s motion for
summary judgment). Accordingly, the district court
granted Springfield’s motion for summary judgment on
the issue of liability. The district court noted that the
amount of tax owed is a fact-intensive inquiry that must
be resolved through Springfield’s administrative
process, and it thus dismissed Springfield’s request for
monetary damages.

II. Jurisdiction, Exhaustion, and Abstention

Alltel asserts that the district court lacked subject
matter jurisdiction under Missouri’s exclusive tax
remedy doctrine and exhaustion doctrine, that the
constitutional justiciability requirements of ripeness and
standing were not met, that Springfield failed to state a
claim, and that even if the district court had jurisdiction,
it should have abstained.

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Appendix A

Our resolution of this case requires us to interpret
Missouri law.

We review ihe district court’s interpretation of
state law de novo. We are bound by the decisions
of the Supreme Court of Missouri in
interpreting Missouri law. Because the Supreme
Court of Missouri has not yet addressed this
precise issue, we must determine what that
court would probably hold if it were called upon
to decide the issue. In making this determination
a federal court may consider relevant state
precedents, analogous decisions, considered
dicta, scholarly works, and any other reliable
data tending convincingly to show how the
highest court in the state would decide the issue.

Missouri v. City of Glasgow, 152 F:3d 802, 805-06 (8th
Cir.1998) (internal citations and quotation omitted).
We review de novo questions of federal subject matter
jurisdiction and the district court’s disposition of a motion
to dismiss. Canady v. Allstate Ins. Co., 282 F.3d 1005, 1012
(8th Cir.2002) (discussing subject matter jurisdiction);
Breedlove v. Earthgrains Baking Cos., Inc., 140 F:3d 797,
798-99 (8th Cir.1998) (on a motion to dismiss, “(a] district
court must accept the allegations contained in the
complaint as true, and all reasonable inferences from the
complaint must be drawn in favor of the nonmoving party”
(internal citation omitted)). We review the district court’s
decision regarding whether to abstain for abuse of
discretion. Aaron v. Target Corp., 357 F.3d 768, 774 (8th
Cir.2004) (“the underlying legal determinations receive
plenary review”).

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Appendix A
A. Subject Matter Jurisdiction

It is undisputed that the parties are diverse and that
more than $75,000 is in controversy. Furthermore, we
note that Cingular believes that the district court
properly exercised its jurisdiction in this case. Alltel’s
argument that the district court did not have subject
matter jurisdiction rests on the assertion that a Missouri
state court would not have jurisdiction to hear this case
under the Missouri exclusive tax remedy doctrine and
the doctrine of administrative exhaustion, with the
result that, pursuant to Erie R. Co. v. Tompkins, 304
U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), federal
subject matter jurisdiction is lacking. Even if we
assume, without deciding, that the exclusive tax remedy
doctrine is jurisdictional,’ we conclude that neither
doctrine would prevent a Missouri state court from
exercising its jurisdiction in this case and therefore
subject matter jurisdiction is not lacking.

1. Missouri’s Exclusive Tax Remedy Doctrine

The Missouri exclusive tax remedy doctrine
requires a taxing authority to follow its tax assessment
and collection procedures before a tax collection claim
can be brought in court. City of St. Louis v. United Rys.
Co. of St. Louis, 263 Mo. 387, 174 S.W. 78, 93 (1914) (en
banc) (“if a remedy is specified for the collection of a

7. The district court dismissed Springfield’s tax collection
claim for failure to state a claim, not for lack of subject matter
jurisdiction. City of Jefferson IT, No. 04-4099, 2006 WL 2987678
(W.D.Mo. Oct. 17, 2006).

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Appendix A

tax, it will be held to be exclusive, where no other is
provided”); Missouri ex rel. Hayes v. Snyder, 1389 Mo.
549, 41 S.W. 216, 217 (1897). The Missouri exclusive tax
remedy doctrine does not apply, however, to the question
in this case because the district court was presented
with the legal question of whether the tax applies to the
defendants, not the factual question of how much
Springfield can collect from the defendants, assuming
that they are subject to the tax. See M.L. Cross,
Annotation, Tax Questions as Proper Subject of Action
for Declaratory Judgment, 11 A.L.R.2d 359 (Supp.2005)
(outlining cases from other jurisdictions, including New
York, which have similar exclusive tax remedy doctrines
but allow declaratory judgments for the pure legal issue
of the validity or application of a tax). Although
Springfield has an administrative remedy for tax
assessment and collection, the ordinance does not
provide a specific or exclusive remedy for a challenge to
the validity or application of the ordinance.® The cases
cited by Alltel address only tax collection claims in which
the state or local governmental entity is seeking a money
judgment. See Missouri ex rel. Hayes, 41 S.W. at 217
(“if the statutes of this state make special provisions
for the collection of taxes against real estate, and do
not apparently .ontemplate that any others will be
necessary, the niode of collection prescribed by statute
is exclusive”); Missouri ex rel. George v. Dix, 159
Mo.App. 573, 141 S.W. 445, 446 (1911) (“The point at

8. See City of Jefferson IV, 2007 WL 1965572, *3-*4
(discussing the tax assessment and collection procedures and
concluding that such administrative procedures are sufficient
for Springfield’s tax collection claim).

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Appendix A

issue is whether the remedy provided in the ordinance
is exclusive or merely cumulative. If exclusive, an action
for a money judgment for the delinquent tax will not lie,
but if cumulative the present suit was properly brought,
and, as the facts are undisputed, the judgment should
have been for the city.”); see also Missouri ex rel. Steed
v. Nolte, 345 Mo. 1103, 138 S.W.2d 1016 (1940) (en banc)
(identifying the procedure for fourth-class cities to
collect delinquent taxes); Kansas City v. Field, 285 Mo.
253, 226 S.W. 27 (1920) (outlining cases); City of
Carondelet, to Use of Reuter v. Picot, 38 Mo. 125, 1866
WL 4243, at *3 (1866) (cannot bring action to compel
_ the payment of taxes unless the tax statute authorizes
the action). Alltel has not pointed to any cases in which
the exclusive tax remedy doctrine was used to dismiss a
claim involving the legal issue of whether a tax was valid
or whether it applied to a particular taxpayer.

Alltel’s assertion that a Missouri court would have
to dismiss Springfield’s claim for declaratory judgment
is unfounded because the doctrine does not apply to
Springfield’s claim. Because there is no established
precedent indicating that Springfield’s claim for
declaratory judgment may not be heard until after the
administrative procedures for tax assessment and
collection have been completed, we conclude that the
doctrine would not require a Missouri court to dismiss
Springfield’s claim for declaratory judgment. This
conclusion is supported by several cases in which
Missouri courts have considered the legal issue of the
validity or the applicability of a tax ordinance without
requiring the exhaustion of administrative assessment

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Appendix A

and collection procedures. See Council House Redev.
Corp. v. Hill, 920 S.W.2d 890 (Mo.1996) (en banc) (trial
court erroneously dismissed taxpayer’s claim for
declaratory judgment; administrative exhaustion not
required when the issue was only whether the taxpayer
was exempt from taxation, not the valuation of the tax
assessment); Nicolai v. City of St. Louis, 762 S.W.2d
423 (Mo.1988) (en banc) (taxpayer sought declaratory
judgment that St. Louis did not have authority to tax
his premises as a cat kennel]; circuit court dismissed for
failure to state a claim and failure to exhaust
administrative remedies, but the Missouri Supreme
Court reversed and issued declaratory judgment even
though neither St. Louis nor the taxpayer had pursued
administrative collection or appellate procedures);
B & D Inv. Co., Inc. v. Schneider, 646 S.W.2d 759
(Mo.1983) (en banc) (“It is a firmly established principle
that when an administrative remedy is adequate,
ordinarily that remedy is exclusive. ... However, the
availability of an administrative remedy does not bar
other remedies under all circumstances. For instance,
when a taxpayer does not question the valuation of his
property, but asserts it is not subject to the tax, he need
not appear before the Board of Equalization but may
enjoin the enforcement of the tax.”); Washington Univ.
v. Baumann, 341 Mo. 708, 108 S.W.2d 403 (1937) (en
banc) (allowing taxpayer an injunction against the sale
of property for the collection of taxes even though
administrative remedies were not exhausted because
the taxpayer was contractually immune from taxation,
one judicial proceeding on the issue of exemption could
avoid a multitude of litigations, and the taxpayer would

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Appendix A

suffer irreparable injury without the injunction); United
Rys. Co. of St. Louis, 263 Mo. 387, 174 S.W. 78 (giving
res judicata effect to prior federal court case that held
the railroad was subject to a city tax); Holland Furnace
Co. v. City of Chaffee, 279 S.W.2d 63 (Mo.Ct.App.1955)
(considering claim for declaratory judgment regarding
the validity of a tax ordinance).
ide

Alltel asserts that any case in which a taxpayer
requested a declaratory judgment that it was not
subject to a tax ordinance is inapposite because, in the
case before us, Springfield is the entity seeking a
declaratory judgment and is thereby attempting to
avoid its own administrative procedures. We disagree.
If, under the exclusive tax remedy doctrine, Missouri
courts will address the pure legal issue of whether a tax
applies in a particular situation before the parties
complete the administrative tax assessment and
collection procedures, it should not matter which party
is seeking the declaratory judgment. Furthermore, we
note that completing the administrative procedures in
this case would be time-consuming, expensive, and
ultimately unnecessary if the ordinance is held to not
apply to the defendants. Additionally, the pure legal
issue involved in this case is more suited for judicial
determination than for administrative determination.
See State Tax Comm’n v. Admin. Hearing Comm’n, 641
S.W.2d 69, 75 (Mo.1982) (en banc) (“Agency adjudicative
power extends only to the ascertainment of facts and
the application of existing law thereto in order to resolve
issues within the given area of agency expertise. The
declaratory judgment is a judicial remedy. . . . The

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Appendix A

declaration of the validity or invalidity of statutes and
administrative rules thus is purely a judicial function.”
(internal citations omitted)); see also Springfield,
Mo., Code §§ 70-131 through 70-157 (administrative
hearings do not have formality requirements such as
the rules of evidence). Accordingly, we conclude that the
district court properly decided that the Missouri
exclusive tax remedy doctrine did not require it to
dismiss Springfield’s claim for declaratory judgment on
the issue of liability.

2. Administrative Exhaustion Doctrine

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Alltel’s remaining arguments regarding subject
matter jurisdiction, justiciability,’ failure to state a claim,
and abstention all vest on the contention that Springfield
failed to exhaust its administrative remedies. See
Premium Standard Farms, Inc. v. Lincoln Twp. of
Putnam County, 946 S.W.2d 234, 237 (Mo.1997) (en banc)
(exhaustion of administrative remedies generally
required before a court has jurisdiction unless the

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9. We note that, although justiciability requirements
cannot be waived by the parties, Alltel’s Answer to Springfield’s
i} Complaint and First Amended Complaint conceded that it
| believed a justiciable controversy existed. Even without this
7 concession, we conclude that Springfield’s claim for declaratory
judgment raises a case or controversy and meets the
constitutional justiciability requirements. See Arsenal Credit
| Union v. Giles, 715 S.W.2d 918, 921 (Mo.1986) (en banc)
‘ (concluding that a case or controversy existed regarding a claim
for declaratory judgment on the constitutionality of a tax
exemption and therefore the claim was properly before the
a court).

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Appendix A

administrative remedy is not adequate or the controlling
issue in the case is a pure legal issue). As the district
court found, and as discussed above, Springfield’s tax
assessment and collection procedures do not provide an
adequate remedy for determining whether the tax
applies to the defendants. Although Alltel vigorously
asserts that the administrative remedy for tax
assessment and collection should be used to determine
liability, the district court noted in City of Jefferson III
that Alltel has refused to pay the tax and refused to file
the information needed for Springfield to make a tax
assessment.” See 2006 WL 3937243, at *2. Although
Alltel’s refusal to cooperate may not make the tax
collection remedy impossible, it does highlight the
inadequacy of those procedures, which would require a
lengthy and expensive calculation of the tax owed before
a legal determination is made whether the defendants
are liable for the tax. Thus, we conclude that
Springfield’s administrative procedures for tax
assessment and collection are not adequate to determine
the issue of liability and do not represent an exclusive
remedy on that issue.

Furthermore, in the absence of any tax collection
claim, no factual disputes remained, nor was the district
court required to make any classifications or value

10. Springfield’s Second Amended Complaint, filed on
February 7, 2007, states that Alltel has made a recent payment
of taxes without waiving its position in this litigatien but further
notes that the defendants have refused to pay their full tax
liability despite opportunities to do so under protest.

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Appendix A

determinations.'' Instead, Springfield’s request for a
declaratory judgment presented the court with an issue
of statutory interpretation. Such questions present pure
legal issues and therefore satisfy an exception to the
general exhaustion of remedies rule. Premium Std.
Farms, 946 S.W.2d at 237-38 (permitting court to resolve
a purely legal issue of whether a township had authority
to impose certain regulations, even though the plaintiff
had not sought a variance and therefore had not
exhausted administrative remedies); City of Bridgeton
v. City of St. Louis, 18 S.W.3d 107, 112 (Mo.Ct.App.2000)
(question of whether zoning ordinance applied was
question of law and therefore administrative remedies
did not need to be exhausted before the court could
determine immunity). Accordingly, we conclude that
Springfield’s claim for declaratory judgment satisfies
at least one of the exceptions to the exhaustion doctrine.
Thus, the district court had subject matter jurisdiction,
the justiciability requirements are met, and the district
court did not err in denying Alltel’s motion to dismiss
for failure to state a claim.

11. Alltel repeatedly argues that the issue before the
district court was not a pure legal issue and that it was at least
a mixed question of fact and law. This argument ignores the
fact that the district court dismissed Springfield’s tax collection
claim. Without the collection claim, there are no facts to
determine. The sole issue before the court is whether the
defendants’ business activity falls within the statutory language
of providing telephones and telephonic services.

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Appendix A
3. Tax Injunction Act

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Alltel raises the application of the Tax Injunction
Act, 28 U.S.C. § 1341, which presents a question of
subject matter irisdiction. See Burris v. City of Little
Rock, 941 F2c 4.7, 721 (8th Cir.1991) (raising issue of
Tax Injunction Act sua sponte). Section 1341 states that
“(t]he district courts shall not enjoin, suspend or restrain
the assessment, levy or collection of any tax under State
law where a plain, speedy and efficient remedy may be
had in the courts of such State.” In addition to
prohibiting injunctive relief, § 1341 also bars declaratory
judgment actions. Burris, 941 F.2d at 720 (citing
California v. Grace Brethren Church, 457 U.S. 393, 411,
102 S.Ct. 2498, 73 L.Ed.2d 93 (1982)). The objective of §
1341 is:

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(1) to eliminate disparities between taxpayers
who could seek injunctive relief in federal
court—usually out-of-state corporations
asserting diversity jurisdiction—and
taxpayers with recourse only to state courts,
which generally required taxpayers to pay
first and litigate later; and (2) to stop
taxpayers, with the aid of a federal injunction,
from withholding large sums, thereby
disrupting state government finances.

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Hibbs v. Winn, 542 U.S. 88, 104, 124 S.Ct. 2276, 159
L.Ed.2d 172 (2004) (citing the Senate Report). When
Congress enacted § 1341, “Congress trained its attention
on taxpayers who sought to avoid paying their tax bill

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Appendix A

by pursuing a challenge route other than the one 4
specified by the taxing authority. Nowhere does the
legislative history announce a sweeping congressional
direction to prevent federal-court interference with all
aspects of state tax administration.” Jd. at 104-05, 105 :
n. 7, 124 S.Ct. 2276 (internal quotation omitted) (“The .
TIA does not prohibit interference with ‘the operation
of, or compliance with,’ state tax laws; rather, § 1341 :
proscribes interference only with those aspects of state
tax regimes that are needed to produce revenue—i.e.,
assessment, levy, and collection.”). Accordingly, there is

a crucial distinction between a plaintiff who seeks a
declaratory judgment that a specific tax is
unconstitutional or invalid and a plaintiff who seeks a
declaratory judgment that a particular taxpayer is
engaged in an activity that makes the taxpayer subject

to a state or local tax. See id. at 104, 124 S.Ct. 2276
(allowing party to challenge in federal court the
constitutionality of a state tax credit given to a third-

party); Jefferson County v. Acker, 527 U.S. 423, 433-35,

119 S.Ct. 2069, 144 L.Ed.2d 408 (1999) (allowing federal
jurisdiction over a claim brought in state court to collect

state taxes and removed by defendants to federal court

wherein the defendants argued that application of the

tax violated federal law; the Court noted that in enacting

§ 1341, “the state laws to which Congress referred

surely do not preclude the States from enforcing their

taxes in court”).

Alltel’s citation to Orange County v. Expedia, Inc.,
is neither controlling nor persuasive. See 440 F.'Supp.2d
1341 (M.D.Fla.2006). In Expedia, a district court

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Appendix A

dismissed a claim by a county sccwing a declaratory
judgment that it had the “power, privilege and right to
audit the Defendants regarding the [tax], and to assess
and collect [the tax] due from the Defendants.” Jd. at
1343. The court acknowledged that the Supreme Court
has sanctioned federal jurisdiction over claims by local
governments seeking tax collectior. Jd. at 1343 (citing
Acker, 527 U.S. at 433-34, 119 S.Ct. 2069). Nevertheless,
without analyzing the text of § 1341, its purpose, or its
legislative history, the court held that declaratory
judgments sought by local governments are always
barred by § 1341. Expedia, 440 F.Supp.2d at 1344. We
conclude that neither the text of § 1341 nor the relevant
Supreme Court holdings compel such a result.
Springfield’s claim in this case is distinguishable from
that asserted in Expedia because Springfield is not
seeking a determination of its “right” or “power” to tax
telephones and telephonic services. Rather, the issue is
one of statutory interpretation affecting the application
of the tax, with the specific question being whether the
defendants provide telephones and telephonic services
and not whether the tax is valid.

We find more persuasive the reasoning in Mayor &
City Council of Balt. v. Vonage Am. Inc., in which a
district court was faced with a situation similar to the
one before us today. See 544 FSupp.2d 458 (D.Md.2008).
In Vonage, the City of Baltimore brought suit against a
provider of “Voice over Internet Protocol,” seeking a
declaratory judgment that a local tax on
telecommunications applied to the provider. /d. at 461.
The provider filed a counterclaim seeking a declaratory

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Appendix A

judgment that it was not subject to the tax. Jd. The
district court analyzed § 1341 and concluded that the
provider’s declaratory judgment was barred, but
adopted the argument that Baltimore’s claim for
declaratory judgment was not barred by § 1341 because
it was not a claim by a taxpayer seeking to prevent tax
collection proceedings. Jd. at 465-66 (citing Acker, 527
U.S. 423, 119 S.Ct. 2069, 144 L.Ed.2d 408). For the same
reason, we conclude that § 1341 does not bar
Springfield’s claim in this case.

B. Abstention

With regard to its abstention claim, Alltel cites
Brillhart v. Excess Ins. Co. of Am., for the proposition
that even if a district court has jurisdiction to enter a
declaratory judgment, it is not required to exercise that
jurisdiction. See 316 U.S. 491, 494, 62 S.Ct. 1173, 86 L.Ed.
1620 (1942). Brillhart does not suggest, however, that
the “istrict court in this case was required to abstain.
Sze id. at 494-°5, 62 S.Ct. 1173 (motion to dismiss based
upon a pending state proceeding). With regard to Alltel’s
citation to a state court case filed in the Circuit Court in
St. Louis County on August 28, 2006, No. 01 CC-4454,
Alltel has not indicated where in the record it made the
district court aware of this case. Accordingly, we accept
the district court’s finding that there are no parallel state
court cases and rest on the district court’s conclusion,
after conducting a thorough analysis of the six factors
that should be considered, that it need not abstain. See
City of Jefferson IV, 2007 WL 1965572, at *10 (discussing
Scottsdale Ins. Co. v. Detco Indus., Inc., 426 F.3d 994,
998-99 (8th Cir.2005)).

2la

Appendix A

Alltel also argues that the district court should have
abstained under Burford v. Sun Oil Co. because timely
and adequate state review was available and the case
involves difficult questions of state law and public policy.
See 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943).
Again, Alltel’s argument comes down to the assertion
that Springfield did not exhaust its administrative
remedies. As discussed above, we agree with the district
court that because there is no adequate administrative
remedy for the legal issue presented in this case,
exhaustion is not required. Additionally, the district
court noted that early in the litigation it had inquired of
the parties why the case was in federal court and heard
no argument that it should abstain from hearing the
case. City of Jefferson IV, 2007 WL 1965572, at *8; see
Evanston Ins. Co. v. Johns, 530 F.3d 710, 713-14, 2008
WL 2493008, at *2 (8th Cir.2008). In fact, Alltel did not
raise the issue of abstention until much time and effort
had been invested by all parties and the district court
had ruled against it. City of Jefferson III, 2006 WL
3937243, at *3. Accordingly, we conclude that the case
was properly before the district court and the district
court did not abuse its discretion by declining to abstain.

Ill. Springfield’s Tax Ordinance

Alltel and Cingular argue that the district court
erred in granting Springfield’s motion for summary
judgment because cell phone services are not telephonic
services. Alltel contends that the district court erred
by not strictly construing Springfield’s authority to tax
“telephone companies” and by not strictly construing

22a

Appendix A

the terms “telephones” and “telephonic services” in the
tax ordinance itself. Cingular asserts that it provides
telecommunications services, not telephonic services,
and that the district court erred by ignoring the 2000
modification of the tax ordinance and applying the
language of the pre-2000 version. Defendants further
argue that they are not subject to the tax on
“telecommunications services” because Springfield’s
Charter grants it the authority to tax “telephone
companies,” not “telecommunications companies,” and
the 2000 recodification of the tax ordinance violated the
Hancock Amendment. In the alternative, the defendants
argue that the tax ordinance is ambiguous and therefore
must be construed in favor of the defendants.

We review de novo a district court’s grant of
summary judgment. Med. Liab. Mut. Ins. Co. v. Alan
Curtis LLC, 519 F.3d 466, 471 (8th Cir.2008). In so doing,
we view the record in the light most favorable to the
nonmoving party and affirm if there are no genuine
issues of material fact and the moving party is entitled
to judgment as a matter of law. Jd. We review de novo
the district court’s determinations of law. Jd.

A. The Plain Language of Springfield’s Tax
Ordinance

Section 70-452 of the Springfield Code states that
“[e]very person engaged in the business of supplying
telephones, and telecommunications and telephonic
service, and telecommunications services, within the city
shall pay as a license tax a sum equal to six (6) percent

23a

Appendix A

of the gross receipts from such business.” The
ordinance does not define the terms “telephones,”
“telecommunications,” “telephonic services,” or
“telecommunications services.” To ascertain the
meaning of a city ordinance, we utilize the same rules of
construction applied to statutes. Neske v. City of St.
Louis, 218 S.W.3d 417, 424 (Mo.2007) (en banc). “The
primary rule of statutory interpretation is to give effect
to legislative intent as reflected in the plain language of
the statute.” Missouri ex rel. Young v. Wood, No. SC
88840, 2008 WL 2346199, at *1 (Mo.2008) (en banc). The
standard for determining whether a statute’s terms are
plain and clear is whether the terms are plain and clear
to a person of ordinary intelligence. Wolff Shoe Co. v.
Dir. of Revenue, 762 S.W.2d 29, 31 (Mo.1988) (en banc).
“When the statute’s language is unambiguous, a court
must give effect to the legislature’s chosen language.”
Missouri ex rel. Young, 2008 WL 2346199, at *1. In the
absence of statutory definitions, we turn to the ordinary
meaning of the statutory terms as derived from a
dictionary and consider the context of the statute in
which the language appears. Missouri ex rel. Burns v.
Whittington, 219 S.W.3d 224, 225 (Mo.2007) (en banc).
In so doing, we presume that the legislature did not
intend the statute to create an absurd result. Weeks v.
Missouri, 140 S.W.3d 39, 47 (Mo.2004) (en banc).

The Springfield Code does not explicitly define the
term “telephone.” The use of the term throughout the
Code, however, provides some insight into its intended
meaning. See Crum v. Vincent, 493 F.3d 988, 996 (8th
Cir.2007) (Missouri law requires courts to read statutes

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Appendix A

in pari materia by harmonizing sections covering the
same subject matter). Several sections list the
information that must be provided to apply for a
franchise or license. See, e.g., Springfield, Mo., Code
§§ 70-323(a), 70-594(b), 100-5.1. Among the information
required is the applicant’s “telephone number.”
Certainly the request for a telephone number in this
context is not limited to the individual’s land-line
telephone, for a cell phone number would satisfy the
purpose of these sections and it is unlikely an application
would be denied on the basis that the applicant had a
cell phone bué not a land-line telephone. Additionally,
section 78-62 describes the criminal offense of
“Harassment by telephone.” Surely this section is not
limited to callers who harass others via a land-line
telephone. See also Springfield, Mo., Code § 120-152(f)(1)
(to report a potential problem regarding a discharge,
“it is the responsibility of the industrial user to
immediately telephone and notify the POTW of the
incident”).

It is also true that some provisions in the Springfield
Code refer to telephones and their accompanying wires
or cables. For instance, section 98-46(b) specifies the
proper placement of “underground telephone cables,
junction boxes and appurtenances thereto.” See also
Springfield, Mo., Code §§ 70-481, 70-482. It does not
necessarily follow, however, that because some
telephones have wires or cables, certain aspects of which
are regulated by Springfield, those devices that do not
have wires or cables are not telephones.

25a

Appendix A

The word “telephonic” appears in only two Articles
of the Code. Once in Article XI, which contains the tax
ordinance at issue in this case, and secondly in Article V
related to underground facility safety and damage
prevention. Neither use suggests that the definition of
the term is limited to land-line telephones.

Because the Springfield Code does not explicitly
define the terms “telephone” or “telephonic services,”
we also look to the dictionary definition of these
statutory terms to determine their ordinary meanings.
See Schumacher v. Cargill Meat Solutions Corp., 515
F.3d 867, 871 (8th Cir.2008) (looking to Merriam-
Webster’s Collegiate Dictionary for the ordinary
meaning of a statutory term). The district court
analyzed definitions from older dictionaries to determine
the meaning of the word “telephone” during the time
when the original tax ordinance was in effect. See City
of Jefferson V, No. 04-04099, 2007 WL 1965572 (W.D.Mo.
July 3, 2007). The district court looked to the 1969 and
1982 editions of the American Heritage Dictionary, which
both define a “telephone” as “[a]n instrument that
directly modulates carrier waves with voice or other
acoustic source signals to be transmitted to remote
locations and that directly reconverts received waves
into audible signals; especially such an instrument
connected to others by wire.” The 1966 Webster’s Third
New International Dictionary defines “telephone” as “an
instrument for reproducing sounds esp. articulate
speech at a distance.” The district court also looked at
the 2000 edition of the American Heritage Dictionary,
which defines “telephone” as “[aJ]n instrument that

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26a

Appendix A

converts voice and other sound signals into a form that
can be transmitted to remote locations and that receives
and reconverts waves into sound signals.” Although the
district court noted that these definitions provide
examples of telephones that use wires, the examples are
not exhaustive and do not preclude the conclusion that
a device that meets the definition of telephone but which
does not have wires is nonetheless a telephone.
Accordingly, we also believe the following definition of
“telephone” is especially helpful: “any of various devices
(as a sound-signaling device or a speaking tube)
resembling or suggesting the telephone.” Webster’s
Third New International Dictionary 2350 (1981).

The 1999 edition of Merriam-Webster’s Collegiate
Dictionary defines “telephonic” as “of, relating to, or
conveyed by a telephone.” Webster’s Collegiate
Dictionary 1211 (10th ed.1999). The definition of
“telephonic” in other dictionaries is substantially the
same. Webster’s Third New International Dictionary,
for instance, defines “telephonic” as “conveying sound
to a distance,” or “of or relating to the telephone,” or
“carried or conveyed by telephone.” Webster’s Third
New International Dictionary 2350 (1981).

Applying Missouri’s rules of statutory construction,
we conclude that the plain language of the tax ordinance
makes it clear that the ordinance was intended to cover
all telephonic services, regardless of the type of
technology used to provide the services. Cell phones are
commonly described as telephones and are used to
accomplish the same function and purpose as a land-

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Appendix A

line telephone.'* Both devices convert voice and other
sound signals into a form that can be transmitted to
remote locations, both devices receive and reconvert
waves into sound signals, and a cell phone resembles a
telephone.

Admittedly, cell phones have newer and more
advanced features than the telephones commonly used
when the tax ordinance was first enacted. Nevertheless,
nothing about the term “telephonic” in the tax
ordinance is limited to the technology generally used to
operate telephones in 1944. In fact, cases dating back
to pre-1944 which discuss telephones and telephone
systems describe them in terms of their purpose and
not with regard to the type of technology used to operate
them. See Gilpin v. Savage, 60 Misc. 605, 112 N.Y.S.
802, 805 (N.Y.Sup.1908), rev’d on other grounds, 201 N.Y.
167, 94 N.E. 656 (1911) (“The telephone is simply an
instrument by which two persons may talk directly to
each other.”); see also Missouri ex rel. Baltimore &
Ohio Tele. Co. v. Bell Tele. Co., 23 F. 539, 541
(C.C.E.D.Mo.1885) (“A telephonic system is simply a
system for the transmission of intelligence and news.”).
As the district court noted, there have been many
advances in telephone technology over the past sixty
years, and with each technological advancement we

12. The Oxford English Dictionary defines a cell phone as
a type of telephone. Oxford English Dictionary Additions Series
OED Online (1993), available at http:// dictionary. oed. com
(defining “cellphone” as “[a] hand-held or mobile radio-
telephone providing access to a cellular radio network; a cellular
telephone”).

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Appendix A

continue to refer to the product and services as
telephonic. See City of Jefferson V, No. 04-04099, 2007
WL 1965572 (W.D.Mo. July 3, 2007). Springfield is not
required to update its Code for the purpose of
recognizing the advent of each new form of technology
used to provide telephonic services. Accordingly, we
conclude that the language of the tax ordinance is
unambiguous and that the tax ordinance applies to cell
phone services.

B. Extrinsic Evidence

Even if we believed the tax ordinance was
ambiguous, however, we would conclude that extrinsic
evidence supports the conclusion that Springfield
intended the original language of the ordinance to cover
services such as cell phone services, that the ordinary
meaning of the term “telephone” includes cell phones,
and that cell phone services are telephonic services.

The defendants describe their products as
telephones and their services as telephonic services. See
City of St. Louis v. Miss. River Fuel Corp., 57 FSupp.
549, 554 (E.D.Mo.1944) (terminology related to a
particular industry should be given the meaning
attributed to it by the industry). Cingular’s website
states that “(t]he world of wireless can be confusing.
That’s why we’ve provided this extensive glossary of
terms to help you better understand the technologies
behind wireless communications.” The website’s
glossary defines “telephony” as “[oJriginally meaning
voice (analog) communication by telephone (land line),

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Appendix A

this term has come to encompass virtually
all telecommunications, because virtually all
telecommunications can be done over or while connected
to a telephone line.” “Cellular” is defined as “[a] wireless
telephone network that connects radio frequencies from
a mobile phone to a system of multiple cell sites, each
consisting of an antenna and a base station, to a mobile
telephone switching office, and ultimately to the public
wireline telephone system.” CMRS is defined as “[a]n
FCC designation for any carrier or licensee whose
wireless network is connected to the public switched
telephone network and/or is operated for profit.”
Telecommunications is defined as “(c]ommunicating by
telephone, telegraph or radio technology.” These
definitions do not indicate that telephonic services and
telecommunications services are mutually exclusive. On
the contrary, they support the conclusion that a cell
phone, despite the fact that it is using a different
technology than land-line telephones to accomplish the
same purpose, is inherently telephonic in nature and
should be subject to the same taxes as traditional land-
line telephones regardless of what new terminology the
defendants wish to use to describe their products and
services in the course of this litigation. See Rhodes v.
City of Hartford, 201 Conn. 89, 513 A.2d 124, 126 (1986)
(“[o]ne should not be able to avoid a tax on shoes by
calling shoes slippers” (alteration in original) (internal
quotation omitted)).

Although there is no case law specifically addressing
Springfield’s tax ordinance, the Missouri courts have
recently discussed issues related to the question before

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Appendix A

us today. In City of Sunset Hills v. Sw. Bell Mobile Sys.,
Inc., the Mizsouri Court of Appeals concluded that
Southwestern Bell, a provider of cellular communication
services, is a telephone company for purposes of the
Sunset Hills’ Charter authorizing it to tax telephone
companies. 14 S.W3d 54, 58-59 (Mo.Ct.App.1999)
(Southwestern Bell described its cell prone business as
“telecommunications antennae business”). Thereafter, in
City of Springfield v. Sprint Spectrum, L.P, the Missouri
Supreme Court characterized the holding in City of Sunset
Hills as stating that it is “absurd to deny that companies
providing ‘wireless communications services’ were a part
of the class of ‘telephone companies’ subject to a telephone
business license fee.” 203 S.W.3d 177, 187 n. 13 (Mo.2006)
(en banc). Additionally, in other cases, Missouri courts have
discussed cell phone companies and the services they
provide in terms of telephones and telephonic services.
See, e.g., Missouri v. Purl, 236 S.W.3d 680, 682
(Mo.Ct.App.2007) (describing a call on a “cellular phone”
as a “telephone call”); Auto-Owners Ins. Co. v. Ennulat,
231 S.W.3d 297, 300 (Mo.Ct.App.2007) (discussing a “cellular
telephone tower”); Whitney v. Alltel Commce’ns, Inc., 173
S.W.3d 300, 304, 312 (Mo.Ct.App.2005) (describing a
customer of Alltel’s as a “wireless telephone customer” and
citing Powertel, Inc. v. Bexley, 743 So.2d 570, 572
(Fla.Dist.Ct.App.1999), wherein a person purchased a
“cellular telephone service plan” allowing them to make
“telephone calls” within the local service area). These cases
lead us to the conclusion that if presented with the question
before us, the Missouri Supreme Court would conclude
that a cell phone is a telephone and that cell phone services
are telephonic services.

3la

Appendix A

Cases from other jurisdictions also support the
conclusion that the ordinary definition of “telephone”
includes cell phones and that a cell phone company is a
telephone company. See Sw. Bell Mobile Sys., Inc. v. Ark.
Pub. Serv. Comm’n, 73 Ark.App. 222, 40 S.W.3d 838, 842
(2001) (concluding that CMRS providers are telephone
companies because they “use their assets to provide a
service whereby persons who are at some distance from
each other may communicate by voice in real time”);
Galloway v. Alltel Comme’ns, Inc., No. C99-2097, 2001
WL 34149071, at *1 (N.D.Iowa 2001) (“Alltel is a
communications-related corporation which includes the
sale of wireless telephone service and equipment.”);
Cent. Ky. Cellular Tel. Co. v. Commonwealth of Ky., 897
S.W.2d 601, 603 (Ky.Ct.App.1995) (“The fact that the
{cellular telephone companies] operate with technology
that did not exist when the statute was adopted does
not mean that they are not to be included for the
purposes of [the statute]. . . . This fact does not
mean that telephone companies become something
else simply because they use improved communication
techniques.”); Nebraska v. Robinson, 272 Neb. 582, 724
N.W.2d 35, 62 (2006) (describing Alltel’s record keeping
process for “wireless telephones”); Airtouch Comm’ns,
Inc. v. Dep't of Revenue, State of Wyo., 76 P3d 342, 349
(Wyo.2003) (concluding that cellular companies are
telephone companies because, “[t]o most reasonable
people, Petitioners’ business is indistinguishable from
that of a telephone company. In fact, in today’s society,
many people use telephone services and cellular services
interchangeably” (internal quotation omitted)).

32a

Appendix A

The cases cited by the defendants in which cell phone
companies have been found to be something other than
telephone companies are distinguishable. For example,
Alltel’s citation to an order from the Administrative Law
Court in South Carolina for the proposition that Alltel is
not a “telephone company” is not instructive. See Alltel
Comme’ns, Inc. v. S.C. Dep't of Revenue, Nos. 07-ALJ-17-
0299-CC through 07-ALJ-17-0304-CC (Apr. 22, 2008) (order
granting Petitioners’ motion for summary judgment). In
that case, the parties stipulated that “[t]lelephones and
telephone companies transmit intelligence over a vast
network of wires located in public rights of way and in
easements over private property.” Jd. at 10, 1 50. The
parties also stipulated that Alltel did not have any facilities
located in public rights of way. Jd. at 10, 151. As a result,
the court’s conclusion that Alltel did not meet the definition
of a telephone company does not compel a similar
conclusion in the present case because that definition is of
no binding effect here. The citation to a Missouri
Administrative Hearing Commission decision from 1982 is
also unhelpful. See Mobile Radio Commce’ns, Inc. v. Dir.
of Revenue, No. RS-79-0199, 1982 WL 12037
(Mo.Admin.Hrg.Com. Dec. 16, 1982). In Mobile Radio
Comme'ns, the administrative commission relied on a Texas
Supreme Court case in which mobile radio communications
were not subject to a local ordinance because the ordinance
referred to transmission of voice communication “by lines
and wires.” Jd. Because our analysis of whether the
defendants are subject to the Springfield tax ordinance
does not include stipulated definitions for telephone
company or telephonic services, the cases cited by the
defendants are inapposite.

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Appendix A

Likewise, Cingular’s citation to a Massachusetts
case does not further its position. See Bell Atl. Mobile
of Mass. Corp., Ltd. v. Comm’r of Revenue, 451 Mass.
280, 884 N.E.2d 978 (2008). The case is interesting,
however, because Bell Atlantic Mobile took the position
that it provided telephone services and was therefore a
telephone company for purposes of receiving a property
tax exemption. See id. at 984; Bell Atl. Mobile Corp.,
Ltd. v. Comm’r of Revenue, No. C269569, 2007 WL
597941, at *14 (Mass.App.Tax.Bd.2007) (Bell Atlantic
defined “telephone service” as “two-way, party-to-party
voice communication and data transmission”). The court
reached its conclusion that Bell Atlantic Mobile was not
a telephone company after considering the fact that it
owned virtually none of the property eligible for the
property tax exemption. Bell Atl. Mobile, 884 N.E.2d
at 983-84. The court quickly dismissed one of its prior
cases addressing the issue of whether a company that
provided land-line telephone services, cable television,
and Internet services, qualified as a telephone company
for purposes of the property tax exemption. See 884
N.E.2d at 984 (discussing RCN-BecoCom, LLC v.
Comm ’r of Revenue, 443 Mass. 198, 820 N.E.2d 208
(2005)). Interestingly, in RCN-BecoCom, the court
included dial-up Internet connections in the calculation
of the financial receipts the company received from
telephone service. 820 N.E.2d at 215, 216 n. 4. In so
doing, the court reasoned that dial-up Internet service
is analogous to the transmission of information by
facsimile, which is a telephone service. /d. The court
also noted that Digital Subscriber Line (DSL) Internet
access was a telephone service, thus providing further

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Appendix A

support for our conclusion that the definition of
telephones and telephonic services is indeed broad and
is not limited to any particular type of technology.

We acknowledge that tax ordinances are to be
strictly construed and that if there is any doubt about
the applicability of the tax, it must be resolved in favor
of the taxpayer. See Morton v. Brenner, 842 S.W.2d 538,
542 (Mo.1992) (en banc); Armack’s Estate v. Missouri,
561 S.W.2d 109, 111 (Mo.1978) (en banc). Nevertheless,
even if we apply the strictest of definitions to
“telephones” and “telephonic services,” we conclude
that the extrinsic evidence leaves no doubt that the
phrase “telephonic services” covers cell phone services.

Alltel contends that the appropriate standard is not
whether “telephonic services” is broad enough to cover
CMRS but whether reasonable minds can differ on the
question of whether CMRS constitutes telephonic
services. Springfield’s authority to tax “telephones” and
“telephonic services” is not at issue, however, and we
conclude that the application of the tax to the defendants
is clear. The fact that Alltel can present an argument
that the ordinance is susceptible to more than one
interpretation does not mean that the ordinance is
ambiguous. See J.B. Vending Co., Inc. v. Dir. of Revenue,
54 S.W.3d 183, 188 (Mo.2001) (en banc) (“the mere fact
that the litigants disagree over the meaning of ‘public’
does not render the statute ambiguous”). That courts
in other jurisdictions, applying different statutory terms
and definitions to different facts, have at times concluded
that a particular business is not a telephone company

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Appendix A

does not alter our conclusion, for we find the Missouri
Court of Appeals’ 1999 holding that a cell phone
provider could be taxed as a telephone company to be
more compelling. See City of Sunset Hills, 14 S.W.3d at
58-59. Because we must assume that the Springfield City
Council was aware of this case law when it modified the
tax ordinance in 2000, we conclude that if the Council
had intended that cell phone services be excluded from
the tax on telephonic services, it would have made that
intention clear in 2000. See Hudson v. Dir. of Revenue,
State of Mo., 216 S.W.3d 216, 222-23 (Mo.Ct.App.2007)
(“The legislature is presumed to know the existing case
law when it enacts a statute.” (internal quotation
omitted)). Thus, even if we assume that the tax
ordinance is ambiguous and look to extrinsic evidence
interpreting it, we conclude that the legislative intent
to tax “telephonic services” makes the ordinance
applicable to cell phone services.

C. The2000 Recodification of the Springfield Code

The defendants argue that the 2000 modification of
the tax ordinance must be given some effect. Cingular
contends that it provides “telecommunications” services
and that the definitions of telephonic services and
telecommunications services are mutually exclusive.
Furthermore, both defendants argue that they are not
subject to the tax under the telecommunications
language in the ordinance because Springfield’s Charter
authorized it to tax only telephone companies, and not
telecommunications companies, and the 2000
modification of the ordinance violated the Hancock
Amendment.

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Appendix A

When the legislature amends a statute, we presume
its intent was to change the existing law or to accomplish
some legislative purpose. Hagan v. Dir. of Revenue, 968
S.W.2d 704, 706 (Mo.1998) (en banc); Missouri v.
Rousseau, 34 8.W.3d 254, 261 (Mo.Ct.App.2000). The
legislative purpose of a statutory amendment can be to
clarify the law rather than change the existing law.
Andresen v. Bd. of Regents of Mo. W. State Coll., 58
S.W.3d 581, 589 (Mo.Ct.App.2001) (concluding that the
amendment clarified the legislature’s original intent to
exclude academic institutions from the State Personnel
Law); Flipps Nine, Inc. v. Mo. Prop. and Cas. Ins. Guar.
Ass’n, 941 S.W.2d 564, 568 (Mo.Ct.App.1997) (concluding
that the amendment to the statute was intended to
clarify and particularize existing law); Carter v.
Pottenger, 888 S.W.2d 710, 714 (Mo.Ct.App.1994)
(concluding that the amendment indicated legislative
intent that “personal representative” under the earlier
version of the statute did not mean “a representative of
a probate estate appointed under the time constraints”
of another statute). We consider the legislative act in
its entirety and harmonize all of its provisions if possible.
Hagan, 968 S.W.2d at 706. If the legislature amends only
part of a statute, we presume that the unamended and
unchanged parts of the statute are intended ‘o remain
operative and effective. Citizens Bank and Trust Co. v.
Dir. of Revenue, State of Mo., 639 S.W.2d 833, 835
(Mo.1982).

The Code contains several references to
“telecommunications” and “telecommunications services.”
Section 100-2.48 defines “telecommunications” as “the

37a

Appendix A

transmission, between or among points specified by the
user, of information of the user’s choosing (e.g. data,
video, and voice), without change in the form or content
of the information sent and received regardless of the
technology used.” See also The Telecommunications Act
of 1996, 47 U.S.C. § 153(43) (using substantially the same
definition).

The 1999 edition of Merriam-Webster’s Collegiate
Dictionary defines “telecommunication” as
“communication at a distance (as by telephone).”
Merriam-Webster’s Collegiate Dictionary 1211 (10th
ed.1999). “Telecommunication” has also been defined as
“communication at a distance (as by cable, radio,
telegraph, telephone, or television).” Webster’s Third
New International Dictionary 2349 (1981).

Given these definitions, we conclude that cell phone
services could be considered both telephonic services
and telecommunications services. Cell phones are
telephonic, as discussed above. Cell phones may also be
telecommunications devices under the definition in the
Springfield Code and the ordinary definition of the term
because they transmit information. including vuice,
data, and in the case of some newer cell phones, video.
Thus, the terms used in the tax ordinance are not
necessarily mutually exclusive and there is no merit to
the argument that cell phones are telecommunications
devices and therefore cannot be taxed as telephonic
devices.

38a

Appendix A

This brings us to Cingular’s argument that the 2000
modification must have had some purpose, to which we
must give effect. See Schoemehi v. Treasurer of Mo.,
217 S.W.3d 900, 902 (Mo.2007) (en banc) (noting that an
entire clause of a statute should not be considered excess
verbiage). We conclude that the legislative intent of the
2000 recodification that added the terms
“telecommunications” and “telecommunications
services” was to clarify the scope of the tax ordinance,
making it clear that cell phone services are telephonic
services subject to the tax, and not to expand the scope
of the ordinance. See Missouri ex rel. Thomas v. Kelly,
631 S.W.2d 685, 688 (Mo.Ct.App.1982) (when a new act
supersedes an old law for the purpose of repealing
conflicting or inconsistent provisions, any variation in
the terminology in the new law is not as meaningful for
the purpose of showing legislative intent to change the
effect of the statute).

The record indicates that Springfield’s recodification
of § 70-452 in 2000 was not intended to be a substantive
change to the scope of the ordinance. The modification
occurred as part of a complete update of the Springfield
Cede, the purpose of which was to create an
electronically searchable version thereof, eliminate
inconsistencies or unclear provisions of the Code, and
to identify ordinances of questionable enforceability,
expired language, duplications and conflicts with state
or federal law. The modification process was conducted
by a private company and was specifically intended to
create “non-substantive” changes in the Code unless
needed to be internally consistent or consistent with

39a

Appendix A

state or federal law. Mary Mannix, Springfield’s
Assistant Director of Finance and Comptroller, testified
in her deposition that “We viewed [the recodification]
as a modernization of the language.” She testified
further that “Anything that was a substantial change
to what the ordinances that existed at the time that this
was codified would have been covered by a separate city
council ordinance at that time.” Nancy Yendes, a
Springfield city attorney, testified that the tax ordinance
was not brought before the Council separately and that
no one working for Springfield was aware of the updated
language in the tax ordinance until after the Council
approved the recodification of the entire Code. In sum,
this evidence reveals that the modification of the tax
ordinance was not intended to be, and was not viewed
as, a substantive change to the scope of the ordinance.

The record also indicates that prior to the 2000
modification, Springfield interpreted the tax ordinance
as applying to cell phone services. The original
ordinance, enacted in 1944, included the phrase
“telephonic services,” a phrase that, despite Cingular’s
argument to the contrary, is broader than the term
“telephone.” As indicated by the definitions of these
terms analyzed above, “telephonic” means something
that is related to a telephone, which necessarily includes
items or services that are not the physical telephone
itself. The record also indicates that Springfield
interpreted the tax ordinance to apply to cell phones
before 2000. Yendes testified that she believed the term
“telephonic” is broader than “telecommunications,” and
that the new language in the tax ordinance was only

40a

Appendix A

included to update the ordinance with the new phraseology
and clarify the scope of the ordinance.'* Yendes also
testified that she had discussions with cell phone
companies, including Alltel, in the mid-to-late 90s regarding
their need to comply with the tax ordinance. The fact that
Springfield did not send the cell phone companies a demand
letter prior to 2004 does not establish that Springfield
believed that the ordinance did not apply to the defendants
and, in any event, does not relieve the defendants of their
obligation to pay the tax. See Med. House, Inc. v. Dir. of
Revenue, 799 S.W.2d 80, 82-83 (Mo.1990) (en banc). Thus,
we conclude that the original scope of the ordinance
included cell phones, and that the legislative purpose of
the 2000 modification was to clarify this interpretation and
not to expand the scope of the ordinance.

The defendants argue that because Springfield
referred to them as telecommunications companies in the
original pleadings, it cannot succeed in taxing them under
the original language of the ordinance. Springfield’s
pleadings do not, however, change the scope of the question
before us. Springfield has always asserted its authority to
tax the defendants as telephone companies. Furthermore,
Count III of the Complaint seeks a declaratory judgment
that “the Springfield Ordinance, which includes the terms
‘telephone’ and ‘telephonic’ applies to the Wireless
Defendants’ services;” and that “the Wireless Defendants

13. Yendes testified that one way in which the 2000
modification clarified the ordinance was to draw peoples’ attention
to the ordinance regardless of whether they searched the
Springfield Code for provisions related to telephones, telephonic
services, telecommunications, or telecommunications services.

4la

Appendix A

[are] liable to pay taxes under the Ordinance.”
Springfield’s motion for summary judgment clearly argued
that CMRS is subject to taxes applicable to telephones
and telephonic services. Additionally, the record indicates
that the district court and the parties treated the
declaratory judgment as an issue of whether the
defendants provide telephones and telephonic services.

The defendants also argue that Springfield’s attempt
to tax them exceeds the scope of Springfield’s Charter.
Section 18.1(3) of Springfield’s Charter authorizes it to tax
telephone companies. A company that provides telephones
and telephonic services is a telephone company. Thus, a
tax on the defendant’s cell phone services, which are
telephonic services, is authorized by the Charter. We need
not reach the question whether the City’s Charter grants
it the authority to tax telecommunications companies, but
we note that Springfield has the authority to tax a business
and occupation that, although not specifically listed as
subject to a license tax, “clearly comes within the definition
and meaning of the enumerated subjects or is in fact a
genus of one of the named occupations.” See City of St.
Charles v. St. Charles Gas Co., 353 Mo. 996, 185 S.W.2d
797, 798 (1945). Whether a telecommunications company
clearly comes within the definition of, or is a genus of, a
telephone company is a question we leave for another day.

The defendants’ final argument is that the 2000
recodification of the tax ordinance violated the Hancock
Amendment to the Missouri Constitution, with the result
that they cannot be taxed under the language added in

42a
Appendix A

2000 or under the original language of the ordinance.
See Mo. Const. art. X, § 22(a). Because we are not applying
the language of the ordinance that was added in 2000 to
the facts of this case, we do not need to reach the question
whether the 2000 recodification violated the Hancock
Amendment.” Even if the language added in 2000 was
unconstitutional, a question we do not decide, we see no
reason why the original language of the ordinance cannot
be severed. See Mo. Ann. Stai. § 1.140 (allowing
unconstitutional language to be severed from a statute
unless “the valid provisions of the statute are so essentially
and inseparably connected with, and so dependent upon,
the void provision that it cannot be presumed the legislature
would have enacted the valid provisions without the void
one; or unless the court finds that the valid provisions,
standing alone, are incomplete and are incapable of being
executed in accordance with the legislative intent”). The
2000 modification merely added language to the ordinance
and did not affect the validity of the original decades-old
language.'® See Mo. Ass'n of Club Executives v. Missouri,
208 S.W.3d 885, 888-89 (Mo.2006) (en banc) (challenged
provisions could be severed); Weinschenk v. Missorw', 203

14. We do note, however, that the Hancock Amendment
provides for a reduction in the levy of a tax if the tax base is
broadened without voter approval; it does not result in the
abolition of the tax altogether. Mo. Const. art. X, § 22(a).

15. The language enacted in 1944 was “telephones and
telephonic services.” In 1968, the Code was updated and the “s”
on “telephones” was omitted. It is unclear whether this change
was intentional, but in any event, the parties have not argued
that this change affects the issue before us today.

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43a

Appendix A

S.W.3d 201, 219-21 (Mo.2006) (en banc) (provisiuizs were
not severable). Therefore, even if the language added to
the ordinance in 2000 was unconstitutional, because the
defendants provide telephones and telephonic services
within Springfield, they are subject to the tax ordinance.

The judgment is affirmed.

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~o ue sere Pa we OR PS ROP te eR ee ae wold HOF ae

44a

APPENDIX B — ORDER NUNC PRO TUNC OF THE
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI, CENTRAL
DIVISION GRANTING SUMMARY JUDGMENT
DATED JULY 3, 2007

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION

Case No. 04-4099-CV-C-NKL
CITY OF JEFFERSON, et ai.,
Plaintiffs,
v.

CINGULAR WIRELESS, LLC, et al.,
Defendants.
ORDER NUNC PRO TUNC
This case raises the question of whether the

Plaintiff, City of Springfield (“Springfield”), can collect
gross receipt taxes from the Wireless Defendants’ for

1. Alltel Communications, Inc. (“Alltel”); Cingular
Wireless LLC and Southwestern Beil Wireless LLC
(collectively, “Cingular”); and Nextel West Corporation
(“Nextel”) are referred to as the Wireless Defendants.
Defendants SBC Communications, Inc., and Southwestern Bell
Telephone, LP, are not the subject of Springfield’s current
Motion for Summary Judgment.

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= > mee ayvey Mee ad 6 es a Pe pe ee wat. ‘ a ee a eee 1 ee ws eee ee eee *

45a

Appendix B

the cell phone component of their businesses. The Court
concludes that Springfield’s gross receipt tax ordinance
is enforceable and that it applies to cell phone services
just as it applies to land line telephone services.
Accordingly, the Court will grant Springfield’s Motion
for Summary Judgment [Doc. 451] against the Wireless
Defendants and enter final judgment on Springfield’s
claims against the Wireless Defendants pursuant to Fed.
R. Civ. P. 54. It will stay Springfield’s remaining claims
against the SBC Defendants until further notice.

I. Background?

Springfield is a constitutional charter city. Its
charter, which was adopted in 1953, sets forth a specific
list of business categories that are subject to taxation.
That list includes “telephone companies.” Springfield
City Charter, art. XVIII § 18.1(3) (Def. Ex. 15, p. 116).

Pursuant to its charter, Springfield enacted a gross
receipts ordinance which imposes a tax on telephone
services. Springfield’s ordinance, as originally enacted
in 1968, provided as follows:

Every person engaged in the business of
supplying telephone and telephonic service
within the City shall pay as a license tax a sum
equal to 6% of the gross receipts from such
busines::.

2. For a more complete discussion of the background of
this case, see the Court’s Order granting in part Alltel and
Nextel’s Motion to Dismiss [Doc. 476].

Py Pat Be har a RE RT Ft Ee Dy, Cah Pe ee lie AES oy Peo a chs beh ph Pte PR Gol) el” 6 ne

46a

Appendix B

Springfield Code § 20-22 (January 2, 1968) (Def. Ex. 32).
In 2000, the ordinance was amended to provide as
follows:

Every person engaged in the business of
supplying telephones, and telecommunications
and telephonic service, and telecommunications
services, within the city shall pay as a license
tax a sum equal to six (6) percent of the gross
receipts from such business.

Springfield Code § 70-452 (2000) (recodified June 2,
2003) (Def. Ex. 5).

The Wireless Defendants are telecommunication
companies which provide a variety of services, including
cell phone services. For the purposes of this case,
however, the Defendants prefer to use the term
“Commercial Mobile Radio Service” (“CMRS”) to
describe the cell phone services which they sell. Because
the Court finds that “Commercial Mobile Radio
Services” are cell phones, the Court will generally refer
to these devices as cell phones, mobile phones or cellular
telephones.

The only remaining claim in Springfield’s lawsuit
against the Wireless Defendants is Springfield’s request
for a declaratory judgment that:

(1) The terms “telephone and telephonic
services,” which are contained in
Springfield’s gross receipts tax

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47a

Appendix B

ordinance, apply to the Wireless
Defendants; and

(2) Each Wireless Defendant is liable to pay
taxes under the ordinance.

II. Discussion

A. Do the Wireless Defendants Supply Telephone
or Telephonic Services in Springfield?

Despite the voluminous briefing in this case, the
primary issue to be resolved is relatively simple. Are
the Wireless Defendants in the business of providing
telephone services in Springfield? The Defendants claim
that they or their affiliates* for whom they are responsible
only provide CMRS in Springfield and, therefore, they
are not liable to pay Springfield’s gross receipts tax.

As it did in its Jume 9, 2005 Order, the Court
concludes that the phrase “telephone and telephonic
services” as used in Springfield’s gross receipts tax
ordinance is unambiguous and thus there is no need to
resort to extrinsic evidence to interpret its meaning.
See State ex rel. Maryland Heights Fire Protection
Dist. v. Campbell, 736 S.W2d 383, 387 (Mo. 1987) (en

3. Cingular admits that although it does not provide mobile
telephone service in Springfield itself, its affiliates do. Counsel
for Cingular has further represented to the Court that it has
waived any argument that it is not the proper party in interest
and intends to be bound by the outcome of the suit on behalf of
its affiliates who do provide cell phone service in Springfield.

48a

Appendix B

banc) (“It is a basic rule of statutory construction that
words should be given their plain and ordinary meaning
whenever possible. Courts look elsewhere for
interpretation only when the meaning is ambiguous or
would lead to an illogical result defeating the purpose
of the legislature.”) (citations omitted); State ex rel. Bell
v. Phillips Petroleum Co., 160 S.W.2d 764, 769 (Mo. 1942)
(“If [the statute] is clear and unambiguous, it must be
construed in accordance with its manifest intent and we
may not search for a meaning beyond the statute itself.”).
See Cook v. Newman, 142 S.W.3d 880, 887 (Mo. Ct. App.
2004) (en banc) (“Only when a statute’s langwage is
ambiguous or uncertain or if its plain meaning would
lead to an illogical result will extrinsic matters, such as
the statute’s history, surrounding circumstances and
objectives to be accomplished through the statute, be
considered.”) (citing Riordan v. Clark, 67 S.W.3d 610,
613 (Mo. Ct. App. 2001)).

When, as in this case, the legislative body has not
defined a term or phrase at issue, the Court is required
to give the words their usual and ordinary meaning.
State v. Harris, 156 S.W.3d 817, 822 (Mo. Ct. App. 2005).
In interpreting a statute enacted a number of years ago,
it is appropriate to consider how words and phrases were
defined around the time of the statute’s enaction. See
United States v. Lachman, 387 F-3d 42, 51 n.11 (ist Cir.
2004) (citing Lamar v. United States, 241 U.S. 103, 113
(1916)). Accordingly, the Court has consulted a number
of older dictionary definitions of the word “telephone.”
Most of the dictionaries define “telephone” quite
broadly. For instance, the 1969 American Heritage

49a

Appendix B

Dictionary states that a “telephone” is “[a]n instrument
that directly modulates carrier waves with voice or other
acoustic source signals to be transmitted to remote
locations and that directly reconverts received waves
into audible signals; especially, such an instrument
connected to others by wire.” The general definition
does not require that the instrument be connected to
others by wire, but gives wired services as one example,
suggesting that other technologies are included. The
American Heritage Dictionary retained the same
definition in its 1982 publication. Similarly, the 1966
Webster’s Third New International Dictionary—the
very dictionary that the Defendants in oral argument
on Springfield’s original motion stated is “the dictionary
of choice . . . for the Missouri Supreme Court” (Tr. at
34)—defines the word as “an instrument for reproducing
sounds esp. articulate speech at a distance.”* Taken
together, these definitions reveal that being connected
to a wire is not an essential characteristic of a telephone,
even if it is a common one. CMRS—which converts an
acoustic source into a signal for transmission to remote
locations—falls squarely within these definitions.

Even today, dictionaries continue to define telephone
in substantially the same way it was done at the time
the charters and the ordinances were enacted. For
example, the Fourth Edition of the American Heritage

4. The Defendants correctly pointed out during an earlier
oral argument that the dictionary provides two examples of
telephones, both of which include wires. However, the
dictionary’s explanatory notes indicate that such examples are
not meant to be exhaustive. Jd., explanatory note 12.2.2.

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Wr « ‘ -

50a

Appendix B

Dictionary, published in 2000, defines “telephone” as
“{ajln instrument that converts voice and other sound
signals into a form that can be transmitted to remote
locations and that receives and reconverts waves into
sound signals.” (Fourth Edition, 200C). The Court has
also consulted what is perhaps the best indicator of
common usage available: Google.com.® A Google search
of over eight billion web pages yields over 2,170,000
results for the phrase “wireless telephone,” 1,950,000
results for “cordless telephone,” 1,200,000 results for
“cellular telephone,” and 1,340,000 for “mobile
telephone.” These results confirm that, even in today’s
age of innovation, a “telephone” need not be connected
to wires. People understand that if you put it up to your
ear and you speak into a microphone and someone some
distance away is able to hear you, you are using a
telephone.

In sum, the word “telephone,” as it is commonly
used, means essentially the same thing as it meant when
Springfield’s ordinances were adopted. Indeed, usage
of the word has not changed much since 1908, when a
New York court stated that “[t]he telephone is simply
an instrument by which two persons may talk directly
to each other.” Gilpin v. Savage, 112 N.Y.S. 802, 805
(N.Y. Sup. 1908), rev’d on other grounds, 94 N.E. 656
(N.Y. 1911).

5. Google is a comprehensive online index of over eight billion
web pages. Google’s index, which is updated constantly, includes
pages created by individuals, organizations, businesses, and
governmental entities. It is, therefore, particularly well-suited to
discerning common usage of nearly any term.

Sla

Appendix B

Furthermore, the court’s conclusion is consistent
with other courts which have considered the same or
analogous issues. See City of Sunset Hills v.
Southwestern Bell Mobile Systems, Inc., 14 S.W.3d 54,
59 (Mo. Ct. App. 1999); Airtouch Communications, Inc.
v. Dep't of Revenue, State of Wyoming, 76 P3d 342, 349-
51 (Wyo. 2003); Southwestern Bell Mobile Systems, Inc.
v. Arkansas Public Service Commission, 40 S.W.3d 838,
843 (Ark. Ct. App. 2001); City of Lebanon Junction v.
Celico Partnership, 80 S.W.3d 761 (Ky. Ct. App. 2001);
Campanelli v. AT&T Wireless Services, Inc., 706 N.E.2d
1267 (Ohio 1999); Central Kentucky Cellular Telephone
Co. v. Commonwealth of Kentucky, Revenue Cabinet,
897 S.W.2d 601, 603 (Ky. Ct. App. 1995).

In contrast to these other rulings, the Wireless
Defendants cite the Court to Bell Atlantic Mobile Corp.
v. Comm ’r of Revenue & Bds. of Assessors of 220 Cities
& Towns, 2007 WL 597941 (Mass. Appellate Tax Bd..,
Feb. 27, 2007). In that case, the Appellate Tax Board in
Massachusetts ruled that a CMRS provider was not a
“telephone company” based on its determinations that
“wireless and wired, land-line communications are
separate technologies, each with a distinct history and
development.” Jd. at *10. However, the precise issue in
that case was “whether Bell Atlantic Mobile is a
‘telephone company’ whose ‘machinery, poles, wires and
underground conduits, wires and pipes’ must be
centrally valued” for purposes of a particular tax
exemption that Bell Atlantic was claim. Bell Atlantic
essentially argued

52a

Appendix B

that it is a telephone company because it
provides telephone service, which it defines as
two-way, party-to-party voice communication
and data transmission. Because, in its view, it
uses equipment similar to wired telephone
companies to provide a service that crosses
municipal boundaries, Bell Atlantic Mobile
maintains that it is a telephone company for
purposes of [the exemption].

Id. at *14. However, the valuation scheme under the tax
code in that case pertained specifically to the
instrumentation used by the company, e.g.,
underground conduits, wires, and pipes, none of which
described the equipment relied on by Bell Atlantic to
provide its services. A tax ordinance, like any other
ordinance, has to be read as a whole to determine the
intent of its drafters, so it is not surprising that the
Massachusetts Appellate Tax Board did not characterize
Bell Atlantic as a telephone company when the
exemption included specific qualifiers that Bell Atlantic
did not fit. Given Bell Atlantic’s own insistence that it
was a “telephone company,” and the limiting language
here that is not present in Springfield’s ordinance, the
Massachusetts Tax Court’s interpretation of the word
“telephone” does little to advance the Wireless
Defendants’ arguments that they do not provide
teiephone services.

Of the cases that have concluded that cell phone
providers were in the telephone business for purposes
of municipal tax ordinances, City of Sunset Hills is

53a

Appendix B

particularly important given this Court's obligation to
follow the law of the State of Missouri. The Missouri
court clearly believed, as does this Court, that a
Commercial Mobile Radio Service is a telephone:

The services Southwestern Bell provided
clearly fell within the definition or genus of a
telephone company. First, in its brief,
Southwestern Pell labeled its business
“wireless communications services” which it
described as “transmitting radio signals
between [its] antennae located at fixed sites
throughout its service area and the mobile
units—commonly called cell phones, car
phones, or mobile phones—used by its
customers.” Southwestern Bell’s own
characterization of its services as transmitting
signals to “phones” placed its services within
a class of telephone companies enumerated
in the statute.

14 S.W.3d 54, 59 (Mo. Ct. App. 1999); see also City of
Springfield v. Sprint Spectrum, L.P., 203 S.W.3d 177,
187 (Mo. 2006) (noting that the Missouri Court of
Appeals “found it absurd to deny that companies
providing ‘wireless communications services’ were a
part of the class of ‘telephone companies’ subject to a
telephone business license fee” in City of Sunset Hills).

This is not to say that telephone technology has not
progressed since Springfield’s ordinances were adopted.
_ To the contrary, many significant advancements have

54a

Appendix B

occurred. ‘lhe rotary dialing system has given way to
tone dialing. Satellite technology enables customers to
place calls to other continents, while cordless technology
enables them to do so from their backyards. Twisted
copper telephone wires are being replaced with fiber
optics. Each of these new technologies could be
described in technical terms that may sound quite unlike
our current understanding of telephone services. But
that does not change the fact that these technologies,
just like “Commercial Mobile Radio Services,” are
created by “telephone” companies to provide what we
all think of as “telephonic services.”

If the Wireless Defendants’ approach were adopted,
then each time a new technology were incorporated into
an existing service or product, the ordinances and
charters of each city would have to be changed or no
taxes could be collected. At some point on the spectrum,
innovation might be so extreme as to alter the very
function of the disputed product or service. The mobile
telephone, however, is the functional equivalent of land
line based telephones, which have existed for more than
a hundred years. Thus, the Court again concludes that
the term “telephone” and “telephone services” in
Springfield’s charter and ordinance is generic enough
to encompass the Wireless Defendants’ “Commercial
Mobile Radio Services.”

Since the Court’s initial determination in its June
9, 2005 Order, the Wireless Defendants have attempted
to recast the issue by arguing that “the question
presented, is not whether the phrase ‘telephonic service’

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55a

Appendix B

is ‘broad enough and flexible enough to include’ CMRS,
but whether there is ‘any doubt’ that ‘telephonic service’
applies to CMRS: if there is, the Court must hold that
CMRS is not covered by the Ordinance.” Alltel’s
Suggestions in Opposition at 1 [Doc. # 468]. In support
of this new standard, the Wireless Defendants cite
numerous Missouri cases and treatises on the power of
municipalities to levy taxes. See, e.g., City of Raytown
v. Kemp, 349 S.W.2d 363, 366 (Mo. 1961) (en banc) (“[T]n
case of doubt the power to tax is denied.”); Kansas City
v. Frogge, 176 S.W.2d 498, 501 (Mo. 1943) (“a:’ doubts
will be resolved against its exercise, and in favor of the
taxpayer” (quotation marks and citation omitted)); City
of St. Charles v. St. Charles Gas Co., 185 S.W.2d 797,
798 (Mo. 1945) (“If there is a doubt as to the delegation
and existence of the [taxing] power the doubt must be
resolved against the city ... .”); see also 16 McQuillin,
The Law Of Municipal Corporations § 44.05, at 29-30
(3d ed., rev. vol. 2003) (“{I]f there is a doubt as to the
existence of the power, such doubt will be resolved
against the municipality and in favor of the taxpayer.”).
However, as Springfield notes in its Reply, the cases cited
by the Wireless defendants speak to the authority of a
city to tax, an issue which is not in dispute in this motion.
The instant case concerns the interpretation of
Springfield’s ordinance and whether it may be applied
to the Wireless Defendants’ CMRS technology, not
whether Springfield has the power to levy a gross
receipts tax in the first place. Moreover, it is clear that
this tax applies to telephone services and CMRS are
telephone services, as demonstrated by the many cases
which have so found.

56a

Appendix B

In a final attempt to render the otherwise
unambiguous language of the ordinance susceptible to
other meanings, the Wireless Defendants offer the Court
extrinsic evidence including the deposition testimony
of Springfield’s managers, Springfield’s history of non-
enforcement of the tax ordinance on some cellular phone
providers, and expert reports on the ambiguity of the
word “telephone” in tax statutes. But such extrinsic
evidence would only be relevant to the ordinance’s
construction if the word “telephone” or “telephonic
services” were ambiguous. As the Court has already
explained, “telephone and telephonic services” is
unambiguous and the Court may not look to extrinsic
evidence to create an ambiguity where none exists. See
State ex rel. Maryland Heights Fire Protection Dist. v.
Campbell, 736 S.W.2d 383, 387 (Mo. bane 1987) (when
confronted with an ordinance that is plain and
unambiguous, courts do not look to legislative history
as a guide to its meaning); State ex rel. Bell v. Phillips
Petroleum Co., 160 S.W.2d 764, 769 (Mo. 1942) (if the
statute is “clear and unambiguous,” the court may not
“search for meaning beyond the statute itself.”). It would
certainly create mischief if a word like telephone is found
to be so ambiguous that discovery would be proper of
every city manager or city council person who had
passed or administered an ordinance that contains such
a generic term.

57a

Appendix B
B. Springfield’s Other Arguments

Alltel raises the following additional arguments in
opposition to summary judgment by reference to earlier
briefing: (1) the Ordinance exceeds the City’s charter
authority; (2) the Ordinance violates the Hancock
Amendment; (3) the Order was passed in violation of
the City’s own laws and Missouri’s general tax laws; and
(4) the Order is unconstitutionally vague. However,
although Alltel refers the Court generally to Documents
Nos. 108, 145, 146, 202, 208, 454, 455, 456, 459, and 460
in support of these four arguments, it does so without
specific reference to page numbers or even which
arguments are found in which pleadings. The Court
briefly addresses each issue fairly raised by Alltel and
incorporates by reference its Order of June 9, 2005, to
the extent it addressed those issues in greater detail.

1. The City’s Charter Authority

Alltel has argued in its previous pleadings that
Springfield’s Gross Receipts Ordinance exceeds the
scope of its charter authority. Specifically, the Wireless
Defendants argue that Article 18, Section 18.1 of the
city charter only authorizes Springfield to impose a
license tax upon “telephone” companies, and makes no
mention CMRS or “telecommunications” companies. As
the Court has already ruled that the Wireless
Defendants provide telephone service and are therefore
telephone companies, Springfield is well within the
authority granted by its charter to impose a gross
receipts tax on them.

58a

Appendix B

2. The Hancock Amendment

The Wireless Defendants also contend that the 2000
amendment to Springfield’s gross receipts tax ordinance
adding the words “telecommunications” and
“telecommunications services” violates the Hancock
Amendment to the Missouri Constitution. As the Court
has explained, the cell phone service provided by the
Wireless Defendants falls within the unambiguous
definition of “telephone and telephonic service,” both
of which were included in the gross receipts tax
ordinance long before passage of the Hancock
Amendment. As Springfield has limited its Count for
Declaratory Relief to the applicability of the “telephone
and telephonic services” clauses of the gross receipts
tax, the Hancock Amendment defense is inapplicable
and fails as a matter of law.

3. Compliance with State and City Tax Laws

The Wireless Defendants argue that Springfield
failed to comply with various Missouri tax collection
statutes, including Mo. Rev. Stat. §§ 136.076, 136.365,
32.053, and 143.903. However, these statutes do not
apply to constitutional charter cities. Chapter 136, as
its title indicates, applies to “Collection of State Taxes.”
Chapter 32 applies to the “State Department of
Revenue.” And Chapter 143 applies to State “Income
Tax.” None of these statutes contains language
suggesting that it applies to constitutional charter cities
such as Springfield; nor have the Defendants cited a
case in which any of these statutes were applied to

ay

59a

Appendix B

constitutional charter cities. Instead, they directed the
Court to City of Manchester v. Southwestern Bell
Telephone, No. 04-CV-1308, slip op. (E.D. Mo. Apr. 28,
2004), which held that third and fourth class cities are
required to collect taxes in the same manner as the State
of Missouri. However, Missouri Revised Statute §§
94.150 and 94.310 (1998), which only apply to third and
fourth class cities, specifically provide that those cities
are required to follow state tax collection procedures.

In contrast, Springfield, as a charter city, is
governed by § 94.310, for purposes of tax collection. In
that section, unlike §§ 94.150 and 94.130, there is no
requirement that a charter city must collect taxes in
the same way as the State. Given the rule of statutory
construction, inclusio unius est exclusio alterius, the
only reasonable interpretation of Missouri State law is
that charter cities are not required to follow state tax
collection procedures.

The Wireless Defendants also argue that Springfield
did not follow its own ordinances when adding the
telecommunications language to the gross receipts tax
ordinance in 2000. Even assuming Springfield failed to
comply with its own ordinances for passing new
legislation in 2000, the Court’s ruling today implicates
only the “telephone” language of the tax ordinance,
which has been in place for decades. Thus, any
noncompliance with city ordinances in amending the tax
code in 2000 to include telecommunications is irrelevant
to the declaratory relief Springfield seeks in the pending
motion.

ees

60a

Appendix B
4. Vagueness

The Wireless Defendants conflate vagueness and
ambiguity in several of their briefs, each time arguing
for a construction of Springfield’s tax ordinance that
excludes cell phone service. The Court has already
concluded that the ordinance, specifically the terms
telephone and telephonic service, are not ambiguous.
As for vagueness, “[a] statute is presumed to be
constitutional and will nct be invalidated unless it
‘clearly and undoubtedly’ violates some constitutional
provision and ‘palpably affronts fundamental law
embodied in the constitution.’” Bd. of Educ. of St. Louis
v. State, 47 S.W.3d 366, 368-369 (Mo. 2001) (quoting
Linton v. Missouri Veterinary Medical Bd., 988 S.W.2d
513, 515 (Mo. 1999)). The burden to prove a statute
unconstitutional is upon the party bringing the
challenge, and the standard for determining whether a
statute is void for vagueness is whether the terms or
words used are of “common usage and are
understandable by persons of ordinary intelligence.” Jd.
(quoting State v. Mahurin, 799 S.W.2d 840, 842 (Mo. banc
1990)). As the Court has held above, “People understand
that if you put it up to your ear and you speak into a
microphone and someone some distance away is able to
hear you, you are using a telephone.” Supra at 6. The
Wireless Defendants have not met their burden to
establish that the word “telephone” when applied to cell
phone service is so vague as to violate the Constitution.

6la

Appendix B
C. Liability for Gross Receipts Tax

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Springfield’s Gross Receipts Tax Ordinance
provides, “Every person engaged in the business of
supplying telephones, and telecommunications and
telephonic service, and telecommunications services,
within the city shall pay as a license tax a sum equal to
six (6) percent of the gross receipts from such business.”
Springfield Code § 70-452 (2000) (recodified June 2,
2003). As the Court just explained, the words
“telephone” and “telephonic services” unambiguously
include the Wireless Defendants’ CMRS technology.
None of the Defendants have challenged, in their
Suggestions in Opposition to Springfield’s current
Motion for Summary Judgment, Springfield’s assertion
that some calls made by customers of the Wireless
Defendants occurred “within the city” of Springfield.
Further, all the Wireless Defendants admit that
Springfield has demanded payment for the gross
receipts tax for such calls but that Defendants have not
paid. The Court therefore concludes that the Wireless
Defendants are liable for some amount of gross receipts
taxes and Springfield is entitled to judgment as a matter
of law on its claim for declaratory relief.®

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6. There is clearly a factual dispute about the amount of |
gross receipts taxes which are due but there is no factual dispute
about the Wireless Defendants’ legal obligation to pay the gross
receipts tax.

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62a ,
Appendix B

D. Monetary damages :

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In its Count for declaratory relief in its Amended
Complaint, Springfield asks for “all further relief as the
Court may deem proper and just pursuant to 28 U.S.C.
§ 2202, including monetary damages for unpaid taxes,
and penalties and interest.” Am. Compl. 9 84.
Contemporaneous with this Order, however, the Court
has dismissed Springfield’s tax collection claim because
of Missouri’s exclusive tax remedy doctrine. Awarding
damages to effectuate its declaratory judgment action
where Springfield’s claim for tax collection has been
dismissed for failure to state a claim would be an
impermissible end run around the strictures of the
exclusive tax remedy doctrine. In addition, the Court
has insufficient evidence to determine the amount of
taxes owed by each of these Defendants. That is a fact-
intensive inquiry which must be taken up through
Springfield’s administrative process.

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Therefore, to the extent Springfield is asking the
Court to declare the amount of taxes due for each
Wireless Defendant, its request for summary judgment ;
is denied, and any such claim is dismissed for the same ;
reasons discussed in this Court’s contemporaneous
Order [Doc. 476].

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63a

Appendix B
E. Final Judgment

With this Order, the Court has disposed of all of
Springfield’s claims against the Wireless Defendants and
all of the Wireless Defendants’ counterclaims against
Springfield. Although there are claims remaining
between Springfield and the SBC Defendants
precluding a final judgment as to them, the Court
finds that it is appropriate to direct an entry of final
judgment as to all claims by Springfield against Alltel
Communications, Inc.; Cingular Wireless LLC;
Southwestern Bell Wireless LLC; and Nextel West
Corporation, and all counterclaims by those Wireless
Defendants against Springfield.

Pursuant to Fed. R. Civ. P. 54, the Court finds there
is no just reason to delay appellate review of
Springfield’s claims as to Alltel Communications, Inc.;
Cingular Wireless LLC and Southwestern Bell Wireless
LLC; and Nextel West Corporation, and final judgment
is entered as to those Defendants. The Court stays
Springfield’s claims against the SBC Defendants until
further ordered.

64a

Appendix B

III. Conclusion
Accordingly, it is hereby

ORDERED that Plaintiff City of Springfield’s
Motion for Summary Judgment [Doc. # 451] is
GRANTED. It is further

ORDERED that any request by Springfield for
monetary damages in Count III of its Second Amended
Complaint is DISMISSED for failure to state a claim
for the same reasons that the Court dismissed Count I
of Springfield’s Complaint. It is further

ORDERED that Springfield’s claims against Alltel
Communications, Inc.; Cingular Wireless LLC;
Southwestern Bell Wireless LLC; and Nextel West
Corporation, and their counter claims against
Springfield, are final pursuant to Rule 54b. It is further

ORDERED that all other proceedings in this case
are STAYED until further order of the Court.

s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge

Dated: July 3, 2007
Jefferson City, Missouri

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65a

APPENDIX C — ORDER NUNC PRO TUNC OF THE
UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF MISSOURI, CENTRAL
DIVISION DENYING MOTIONS TO DISMISS
DATED JULY 3, 2007

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION

Case No. 04-4099-CV-C-NKL

CITY OF JEFFERSON, et al.,
Plaintiffs,
v.

CINGULAR WIRELESS, LLC, et al.,

Defendants.
ORDER NUNC PRO TUNC

The City of Springfield (“Springfield”) levies a gross
receipts tax on all “telecommunications and telephonic
services” supplied “within the city” of Springfield.
See Springfield Municipal Ordinance § 70-452. Because
the Defendants, Alltel Communications, Inc., Nextel
West Corporation, Southwestern Bell Wireless LLC, and
Cingular Wireless LLC (“Defendants”), take the
position that commercial mobile radio services
(“CMRS”) are not “telecommunications and telephonic

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a

66a

Appendix C

services,” they do not pay gross receipts tax on cell
phone’ services that they provide in Springfield.

In April 2004, Springfield’s counsel sent a demand
letter to these Defendants requesting payment of five
years’ worth of gross receipts taxes. The letter stated
that if payment was not received by April 29, 2004,
Springfield would proceed with all legal remedies. When
the Defendants did not comply, Springfield filed the
present lawsuit on May 12, 2004, to collect the taxes
due.

Soon after filing suit, Springfield moved for partial
summary judgment to determine whether Southwestern
Bell Wireless, LLC, Nextel West Corp., Alltel
Communications, Inc., and Cingular Wireless LLC were
liable to pay Springfield’s gross receipts tax. On June
9, 2005, the Court found that cell phones are
“telecommunications and telephonic services,” within
the meaning of Springfield’s gross receipts ordinance.
It also held that the uncontroverted facts show that
Southwestern Bell Wireless, LLC, Nextel West Corp.,
Alltel Communications, Inc., and Cingular Wireless
LLC, furnish some telephone services within the City
of Springfield and obtain revenue as a result. Based on
these findings, the Court held that each Defendant owed
Springfield some amount of gross receipts tax for the

1. Commercial mobile radios are commonly referred to as
cell phones, both by lay people and the telecommunications
industry. That is the term the Court will use in the remainder of
the Order, unless referring to the Defendants’ use of the term,
CMRS.

67a

Appendix C

relevant time period. The Court reserved judgment on
the amount of taxes due or how that amount would be
determined because those issues were not raised by
Springfield’s Motion for Partial Summary Judgment.

The Court entered its June 9, 2005 Order after
considering all arguments raised by the parties,
including the Defendants’ arguments in support of their
counterclaims and defenses. The Court specifically
rejected the Defendants’ argument that Springfield’s
taxing ordinance did not comply with the Hancock
Amendment and violated the Mobile Telecommunications
Sourcing Act. It rvled that Springfield’s gross receipts
tax is not a disguised sales tax even though it is levied
in part on sales made to Defendants’ customers. It
found that Springfield was not required to comply with
the Missouri tax collection statutes. Finally, it concluded
that Missouri law would permit Springfield to determine
whether the Defendants were liable to pay a
gross receipts tax in a court proceeding prior to
commencement of an administrative collection process.

After the Court entered its Order on June 9, 2005,
the Missouri General Assembly passed HB 209 which
required Springfield to dismiss its lawsuit against the
Defendants. Springfield sought a ruling in state court
to determine the constitutionality of HB 209. At the
request of the Defendants, the Court stayed this
litigation pending the outcome of Springfield’s
constitutional challenge. After the Missouri Supreme

68a

Appendix C

court struck down HB 209 as unconstitutional,’ the stay
was lifted.

After the stay was lifted, Alltel moved to dismiss this
case for lack of subject matter jurisdiction. Alternatively,
Alltel asked the Court to abstain. In its order of October
17, 2006, the Court denied Alltel’s motion to dismiss for
lack of subject matter jurisdiction, but concluded that
Springfield’s ordinance did not authorize Springfield’s
tax collection claim because of Missouri’s exclusive tax
remedy doctrine.* The Court, therefore, dismissed
Springfield’s claim for tax collection, but did not vacate
its earlier order finding that the Defendant’s were liable
to pay Springfield’s gross receipts tax. The parties had
fully litigated that issue, thereby effectively amending
the pleadings.‘ In addition, the Court concluded that

2. See City of Springfield v. Sprint Spectrum, L.P, 203
S.W.3d 177 (Mo.2006).

3. The “exclusive tax remedy doctrine” merely provides
that both a taxing authority and taxpayer must use the remedies
provided by statute to collect or dispute taxes if there is an
adequate remedy provided See discussion infra.

4. While Springfield’s original Complaint did not
separately request a declaratory judgment on the issue of
liability, the record shows that this issue was raised by
Springfield in its Motion for Partial Summary Judgment and
joined by the Defendants in their Opposition to Springfield’s
Motion for Partial Summary Judgment and by their own
counterclaims. Therefore, pursuant to Federal Rule of Civil
Procedure 15, the Court treated Springfield’s Motion for Partial
Summary Judgment as a request for a declaration of law on

(Cont'd)

69a

Appendix C

Missouri’s exclusive tax remedy doctrine would not be
violated by a declaratory judgment that addressed only
the question of whether the Defendants were subject
to Springfield’s gross receipts tax ordinance.

Alltel then complained that it had not had a fair
opportunity to litigate the propriety of a declaratory
judgment in this case. In response, the Court vacated
its order of June 9, 2005,° and permitted Springfield to
amend its Complaint to add a separate claim for
declaratory judgment. Alltel and Nextel have now filed
Motions to Dismiss Springfield’s Amended Complaint
[Doc. 457 and Doc. 452 respectively].

In Count I of Springfield’s Second Amended
Complaint, Springfield seeks to collect past due gross
receipts taxes from the Defendants. In Count II, it seeks
a declaratory judgment that Springfield’s gross receipts
tax ordinance applies to the cell phone services which
Defendants provide within the city limits of Springfield
and that all Defendants are liable to pay taxes under
the ordinance. Only Alltel and Nextel have filed motions
to dismiss these claims. The other Defendants have

(Cont'd)

Defendants’ liability under Springfield’s gross receipts tax.
Rule 15(b) states that “[w]Jhen issues not raised by the pleadings
are tried by express or implied consent of the parties, they shal!
be treated in all respects as if they had been raised in the
pleadings.”

5. It also hereby vacates its Order of October 17, 2006. That
Order and the June 9, 2005 Order are the only two substantive
orders that the Court has previously entered in this case.

* i i i et Bee ee

70a

Appendix C

previously declined an invitation by the Court to dismiss
Springfield’s tax collection claim based on Missouri's
exclusive tax remedy doctrine.®

For the following reasons, the Court dismisses
without prejudice Springfield’s claim for tax collection
(Count I) but denies Alltel and Nextel’s Motion to
Dismiss Springfield’s claim for declaratory judgment
(Count II).

I. Count I—Tax Collection Claim

Alltel and Nextel argue that the Court has no
subject matter jurisdiction over Springfield’s claim for
tax collection because of Missouri’s exclusive tax remedy
doctrine, which was first articulated in State ez rel.
Hayes v. Snyder, 139 Mo. 549, 552 (Mo.1897). In that
case, Jackson County Collector Hayes sued the previous
owners of a parcel of real estate to collect a personal
judgment against them for taxes assessed against the
property while they had owned it. The Missouri Supreme
Court held that the state’s exclusive remedy was to
impose a lien on the property for which back taxes were
due. /d. at 554-55. In reaching this conclusion, the state
supreme court reasoned that:

6. The posture of this case is quite unusual in that it is a
local taxing authority that seeks to invoke the subject matter
jurisdiction of the federal court to collect its taxes and to resolve
the meaning of its tax ordinance. This may explain why only
two of the Defendants have filed motions to dismiss. It is
unusual for a taxpayer to have a federal forum to contest the
validity of a tax imposed by a municipality.

T7la

Appendix C

[a] tax is not a debt in the ordinary sense of that

term, as it is not founded upon contract, and as
| a general thing a debt cannot be created in any
: other way. Tax proceedings ar«. in invitum. The

tax is an impost levied by authority of the
, government for the support of the state, and
. has none of the characteristics of a contract, the
; essence of which is an agreement expressed or

implied. Therefore, if the statutes of this state
| make special provisions for the collection of
taxes against real estate, and do not apparently
: contemplate that any others will be necessary,
the mode of collection prescribed by statute is
exclusive.... [W]here the statute undertakes to
provide remedies, and those given do not
embrace an action at law, a common-law action
) for the recovery of the tax as a debt will not lie.
This is the generally accepted doctrine, though
there are exceptions to this general rule; for
|

et le oe) a did titel

instance, where right to bring suit is expressly
given by statute, or where the implication of an
intent to give a remedy by suit may be so strong
as to be conclusive, as where the statute provides
for a tax, but is silent as to the method of
collection.

Id. at 553-54 (internal quotations omitted).

In Kansas City v. Field, the Missouri Supreme
Court again held that “a statutory remedy for the
collection of a tax or a special assessment, whether it be
by distress or by action, is an exclusive remedy.” 285

72a

Appendix C

Mo. 253, 274 (Mo.1920). Accord City of St. Louis v.
United Rys. Co., 174 S.W. 78 (Mo.1914) (where an
ordinance provides a metliod for enforcing a tax, it will
be held to be exclusive); State ex rel. Steed v. Nolte, 138
S.W.2d 1016 (Mo.1940) (en banc) (holding that for tax
collection purposes, the city must use the collection
procedures set forth in applicable law) Although these
Missouri cases are old, Springfield has offered no
authority to suggest that Missouri no longer recognizes
the exclusive tax remedy doctrine articulated in Hayes.

Springfield’s ordinances give it a specific mechanism
for collecting past due gross receipts taxes. They provide
that:

Every person required to pay the license tax
levied by this article shall cause to be filed with
the director of finance on January 15, April
15, July 15 and October 15 of each year a true
statement, under oath, of the gross receipts
of such business for the three calendar
months preceding the filing of such statement.
The director of finance and his authorized
agents may investigate the correctness and
accuracy of such quarterly statements, and for
that purpose shall have access at all
reasonable times to the books, documents,
papers and records of the licensee.

Id. § 70-454. If a person refuses to pay any tax, the
Director may estimate the delinquent taxes and make
an assessment based on that estimate. Jd. § 70-154.

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73a

Appendix C

After the Director notifies the taxpayer of the assessment
plus penalties including interest, the taxp»yyer has ten
days to request a hearing to contest the assessment.
Id. § 70-152.

In the event a hearing is requested, “(t]he director,
employee of the city, or hearing officer appointed by the
city manager shall hear the case and make a determination
in accordance with the provisions of RSMo ch. 536.” Jd. at
§ 70-155. “Such hearing need not be conducted according
to the rules of evidence.” /d. The director is empowered
to subpoena witnesses or to issue subpoenas duces tecum
for any book, paper, record or memorandum. /d. “The
decision of the hearing officer . . . shall be in writing and
shall be subject to appeal under RSMo ch. 536.” Jd. § 70-
156. If the delinquent taxpayer fails to pay the assessment
after the decision becomes final,

the license of such person shall be revoked
without further hearing five days after the
director mails such person a notice that the
license has been revoked, unless the person
pays the city the delinquent assessment,
including penalties and interest to date, which
money shall be held for possible refund by the
director while the decision is on appeal.
Revocation of such license pursuant to the
provisions of this section is not appealable, and
such license may only be reinstated by the
person paying to the director the money due on
the assessment, including all penalties and
interest to date.

Id. § 70-157.

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74a

Appendix C

Reading together all portions of Springfield’s
Municipal Code chapter 70, the Court concludes that
the Code provides a remedial scheme for the collection
of delinquent gross receipts tax. Enforcing the ordinance
is the responsibility of the City’s Director of Finance.
All licensees must file quarterly gross receipts reports
with the City, which the Director is authorized to
investigate and verify. If the licensee refuses to do so,
the director may issue subpoenas and demand to inspect
records under penalty of revocation of the license. If
the Director determines that a licensee had failed to
pay its tax obligation, she “shall notify such person of
this determination, which determination shall be an
assessment of the license fee or tax which is due and
owing, plus all penalties including interest.” /d. § 70-
152. That assessment becomes final ten days after it is
delivered to the licensee unless the licensee requests a
hearing. If a hearing is requested, the Director or a
hearing officer “shall hear the case and make a
determination in accordance with the provisions of
RSMo ch. 536.” Jd. at § 70-155. That determination
becomes final after 30 days and may be appealed under
Mo.Rev.Stat. ch 536. However, if the licensee fails to pay
after the final determination, its license “shall be
revoked without further hearing . . . unless [and until]
the person pays the city the delinquent assessment.”
Id. § 70-157.

Springfield’s code provides a metaod for assessing
gross receipts tax and the administrative process

75a

Appendix C

appears to be adequate for purposes of tax assessment.’
While Alltel has refused to file the reports needed to make
an assessment, Springfield has the power to make an
estimate based on the information available to it. The
record shows that Alltel has reported gross receipts
revenue collected from customers having a “principal place
of use” within the city. While this may not include all
revenue subject to gross receipts tax, Springfield has the
power to estimate the actual tax due. If Alltel contests the
tax, Springfield can subpoena all of Alltel’s records.
Pending appeal, Springfield can force Alltel to pay the
taxes “in escrow” or require Alltel to stop doing business

in Springfield.

Springfield has failer to show that it cannot use this
administrative process to assess the taxes which it claims
are owed by the Defendants. Its tax collection claim must
therefore be dismissed. However, contrary to the
intimation of Nextel and Alltel, the Court has never found
that it lacks subject matter jurisdiction to hear
Springfield’s claim for tax collection. There is diversity
jurisdiction to address Springfield’s claim, and Missouri’s
exclusive tax remedy doctrine cannot divest a federal court
of its jurisdiction. Therefore, the Court’s dismissal of
Springfield’s tax collection claim is not because subject
matter jurisdiction is lacking. Instead, the dismissal is
because Missouri law does not recognize Springfield’s claim
for tax collection prior to assessment. See State ex rel.
Hayes v. Snyder, 139 Mo. 549, 552 (Mo.1897).

7. While Springfield’s ordinance is adequate to assess taxes
against the Defendants, it is not adequate to resolve the
applicability of these taxes to the Defendants when the dispute
is one of statutory interpretation. See discussion infra.

76a

Appendix C

While dismissals under Rule 12(b)(6) are generally
with prejudice, the Court is uncertain how a dismissal
would be used in subsequent litigation between these
parties. Given the contorted procedural history of this
dispute, the Court makes this dismissal without
prejudice.

II. Count IIl—Declaratory Relief

In Count II, Springfield asks the Court to declare
that Defendants’ cell phone services provided within the
city limits of Springfield are subject to Springfield’s
gross receipts tax ordinance and, therefore, all
Defendants are liable for past due taxes. As with Count
I, Alltel and Nextel seek to dismiss this claim for lack of
subject matter jurisdiction. Their primary argument is
that Missouri’s exclusive tax remedy doctrine applies
to Springfield’s declaratory judgment claim and
Missouri’s exclusive tax remedy doctrine is
jurisdictional. Alltel and Nextel also argue that
Springfield has not exhausted its administrative
remedies and therefore cannot obtain even a declaration
that its tax laws apply to the Defendants. They state
these arguments in many different ways, but all turn on
the question of whether Missouri law would permit
Springfield to obtain a judicial declaration interpreting
its tax ordinance before requiring Springfield to begin
its administrative process to assess taxes.

77a

Appendix C
A. Missouri Law

The Court finds that Missouri law permits
Springfield to seek a judicial determination that its
ordinance applies to a specific taxpayer before
Springfield begins its administrative assessment
process. As a practical matter, the administrative process
created by Springfield is not adequate when a question
of statutory interpretation is at the heart of the dispute
between the City and its taxpayers. It does not serve
the interest of either a taxpayer or the taxing authority
to go through an expensive administrative process to
resolve the amount of taxes owed, if no taxes can be
collected because the statute does not apply to the
taxpayer and, therefore, no taxes are due.

Even if a Springfield administrator can enter an
order that the taxes are due,® legal review of that ruling
could not occur until the administrative process is
completed. By that time, both parties have expended
significant resources resolving the amount of taxes due,
only to learn on judicial review that the ordinance did
not cover the services for which the taxes were sought.

Other jurisdictions which recognize similar exclusive
tax remedy doctrines have permitted court actions
under these limited circumstances. When there is a
question of statutory interpretation, these jurisdictions
will permit court action to determine the applicability

8. The parties dispute whether Springfield’s Finance
Director has such authority under Missouri law.

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78a

Appendix C

of the tax to a business operating within the jurisdiction.
See M.L. Cross, Annotation, Tax Questions as Proper
Subject of Action for Declaratory Judgment, 11
A.L.R.2d 359 (Supp.2005).

While the Court has been unable to locate a Missouri
case directly on point, in other contexts Missouri courts
have permitted legal issues to be resolved in court even
when administrative remedies were not exhausted. The
practical considerations discussed in those cases, e.g.,
Premium Standard Farms, Inc. v. Lincoln Township
of Putnam County, 946 S.W.2d 234 (Mo.1997), are
equally applicable when there is a dispute about whether
a tax is owed. Furthermore, the Missouri Supreme Court
in Nicolai v. City of St. Louis, 762 S.W.2d 423 (Mo. banc
1989), tacitly approved the use of a declaratory judgment
to test the authority of a local taxing authority to collect
a tax even when administrative procedures had not been
exhausted.

This case is a good example of when significant
factual disputes may be avoided if the threshold issue
of applicability is resolved first. The initial dispute
betwen the parties is whether Springfield’s gross
receipts tax ordinance applies to companies that provide
cell phone service, as opposed to land line services.
Defendants claim that they do not provide telephone
services within the meaning of Springfield’s ordinance,
but the unrefuted evidence is that they do provide
“Commercial Mobile Radio” services in the city limits
of Springfield. If the Defendants are correct in their
interpretation of the City’s ordinances, then no taxes

79a

Appendix C

are owed to Springfield and all parties can avoid the
cost of an expensive administrative assessment action.

For these reasons, the Court concludes that Missouri
law permits a taxing authority to obtain a judicial
interpretation of its tax ordinance to determine whether
a taxpayer is subject to it. Likewise, a Missouri court
would not require administra

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385015_0338%3A2. Public record. Not legal advice.