Opposition Brief — James B. Beam Distilling Co. v. Georgia

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No. 93-1140 ra wal

In The fr |

1394

Supreme Court of the United States

October Term, 1993 LK

rs ——a

JAMES B. BEAM DISTILLING CO.,

Petitioner,

STATE OF GEORGIA; ZELL MILLER, individually and

as Governor of the State of Georgia; MARCUS E.

COLLINS, individually and as Georgia State Revenue

Commissioner; and CLAUDE L. VICKERS, individually

and as Director of the Fiscal Division of the

Department of Administrative Services,

Respondents.

—- ¢

On Petition For Writ Of Certiorari

To The Supreme Court Of Georgia

——__—_-—-¢

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

Davip A. RUNNION

Senior Assistant Attorney General

(Counsel of Record

for Respondents)

MiIcHAEL J. Bowers

Attorney General

Daniel. M. Formsy

Senior Assistant Attorney General

Attorneys for Respondents

Georgia Department of Law

132 State Judicial Building

40 Capitol Square, S.W.

Atlanta, Georgia 30334-1300

(404) 656-3340

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964

OR CALL COLLECT (402) 342-2831

4 pe

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Oe ain

FT Ay

_—

QUESTIONS PRESENTED

1. Whether a state procedural bar of lack of standing, or

state reliance interests and equitable considerations pre-

clude the refund of a liquor tax which had been ruled

constitutional prior to payment, but which was later

ruled invalid by the retroactive application of a new rule

of federal law, where the tax was not challenged at, the

time of payment, the tax was collected in full by the

claiming manufacturer from its ultimately liable whole-

salers, and where the state expended the tax in good faith

reliance for 45 years upon its validity?

2. Whether due process requires a state to refund a

liquor tax validly imposed and voluntarily remitted, after

a newly announced rule of constitutional law invalidating

the tax is held to apply retroactively, where the state

provided multiple predeprivation remedies by which the

tax could have been challenged prior to payment and

which were not pursued?

TABLE OF CONTENTS

Page

CRIBS ES. PROCEED cnc ceeaccecstesccrpuaswens i

EAE CF ALT Ie NE + tk ca vcdsecveeecseseaaes iv

CPD NE okie osccecencscteveaxeesteehaees 2

oi 3 ag) te Pre wary p re pee eg

STATUTES AND OTHER PROVISIONS INVOLVED... 3

STATEMENT OF Trim GAGE. oc cvsievtncecnaeseaaes 4

Response To Petitioner’s Statement Of The Case.... 9

REASONS FOR DENYING THE WRIT............. 13

I. THE DECISION BELOW WAS BASED UPON AN

ADEQUATE AND INDEPENDENT STATE

COUT PEIONE? siccaccccecnedesdenucecéaeus Wekebern 13

Il. THE DECISION BELOW WAS CORRECTLY

SPO MENGE 6 0s 05 .e0 000 0000840000000 Oe 16

A. UNDER THIS COURT'S MANDATE FOR

REMAND AND OTHER DECISIONS, THE

STATE PROCEDURAL BAR, RELIANCE

INTERESTS AND EQUITABLE CONSIDER-

ATIONS PRECLUDE A REFUND TO PETI-

THEMES TEU BEER GPUs cecccsccieceveeess 16

B. DUE PROCESS IS SATISFIED BY MULTIPLE

PREDEPRIVATION REMEDIES WHICH

PETITIONER FAILED TO AVAIL ITSELF OF

PRIOR TO PAYMENT OF THE TAX ....... 19

1. Georgia Provides Adequate Predepriva-

Pee rr ee 21

TABLE OF CONTENTS - Continued

There Is No Merit To The

Argument .

“eee eee eeeneneneeneneeenenenenenenenennee

Page

“Duress”

C. THERE IS NO MERIT TO PETITIONER’S

GPRBEED. PAMAAEIMEEIN EDs cc ccccccanceoeurers 28

LCE Chee eesebeviverveccedertsovcecees 29

APPENDICES

Appendix 1 - O.C.G.A. § 3-2-13 .......... ccc eenves. 1-1

Appendix 2 - O.*C.G.A. § 32-14 0... cceceeececeee. 2-1

Appendix 3 - O.C.G.A. § 3-2-35 ........ cece eeeeees 3-1

Appendix 4 - O.C.G.A. § 3-4-152 ©0000... cece ee, 4-]

Appendix 5 - O.C.G.A. § 9-4-10 «0.0.0... 6 eee eee ee Be]

Appendix 6 - O.C.G.A. § 9-11-15(a), (b), & (c)...... 6-1

Appendix 7 —- O.C.G.A. § 48-3-1 «2.6.0... cece eee 7-1

Appendix 8 - O.C.G.A. § 50-13-10 .............0005. 8-1

Appendix 9 - O.C.G.A. § 50-13-13 ...........2.0005. 9-1

Appendix 10 - O.C.G.A. § 50-13-19 ............... 10-1

Appendix 11 - O.C.G.A. § 50-13-20 ............... 11-1

Appendix 12 — Ga. Revenue Rule 560-1-1-.10...... 12-1

Appendix 13 —- Ga. Revenue Rule 560-1-1-.11...... 13-1

Appendix 14 - Ga. Revenue Rule 560-1-1-.12...... 14-1

Appendix 15 —- Ga. Revenue Rule 560-1-1-.13...... 15-1

Appendix 16 — Ga. Revenue Rule 560-1-1-.14...... 16-1

Appendix 17 — Ga. Revenue Rules Chp. 560-2-9... 17-1

TABLE OF AUTHORITIES

Page

CASES

Adams v. Smith, 415 F. Supp. 787 (N.D. Ga. 1976),

aff'd, 568 F.2d 1232 (11th Cir. 1978) ............... 22

Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970)...... 13

American Trucking Ass'ns, Inc. v. Smith, 496 U.S.

Se ae Pei wia edhe oe aad besa ntaa beret ere? Pe

Atchison, Topeka & Sante Fe Ry. v. Lennen, 732 F.2d

Pe a. DE wh COddacedenceetee ceecase ts ks 15

Atchison, Topeka & Sante Fe Ry. v. O'Connor, 223

U.S. 280 (1912) ..... ) OipiMdededade dees 27

Atlanta Americana Motor Hotel Corp. v. Undercofler,

222 Ga. 295, 149 S.E.2d 691 (1966)................ 14

Bacchus Imports, Ltd. v. Dias, 468 U.S. 263

SN teens wnduw ns rors . SS |

Blackmon v. Alexander, 233 Ga. 832, 213 S.E.2d 842

GURU SD vaccncvcstiulesveserkvababeestececseevesecs ae

Blackmon v. Georgia Independent Oilmen’s Ass'n, 129

Ga. App. 171, 198 S.E.2d 896 (1973)............ eo

Blackmon v. Golia, 231 Ga. 381, 202 S.E.2d 186

CROP OR wkd dah 6c bebsdU0eetenst ceducecéeceetixeuseet 21

Blackmon v. Premium Oil Stations, Inc., 129 Ga.

PD. WEG. TOO. eee Ge Cee oo vce eccbececcces 14

Blackston v. Georgia Dep't of Natural Resources, 255

Gall, By Se Wied OPW GUPUED 6-6 04h. cecddsccccccecces 7

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

a Oe GOED Secccdunencsdecccerevniesnsausani 27-28

Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)...5, 16, 17

Cipriano v. City of Houma, 395 U.S. 701 (1969)....... 18

TABLE OF AUTHORITIES ~- Continued

Page

City Council of Augusta v. Mangelly, 243 Ga. 358,

Eg eer 21

City of Atlanta v. Spence, 242 Ga. 194, 249 S.E.2d

PW ON iho Fee edd ooh eines elec ic cive rs cca: 22

City of Lithonia v. DeKalb County Bd. of Educ., 231

Ga. 150, 200 S.E.2d 698 (1973) .................... 21

Clein v. Kaplan, 201 Ga. 396, 40 S.E.2d 133 (1946).... 22

Cohen v. Beneficial Industrial Loan Corp., 337 US.

acd a TEE EY pp eat tia gn de 27

Davis v. Michigan Dep't of Treasury, 489 U.S. 803

Ra eer shane re hi enKs pss ithe ickeletaclwcn: 1]

Dekalb County v. Allstate Beer, Inc., 229 Ga. 483, 192

EE SS Orne dow ula ook sc cdwakca ven 22

Department of Public Safety v. Foreman, 130 Ga.

App. 71, 202 S.E.2d 196 (1973).................... 24

Edelman v. California, 344 U.S. 357 (1953)............ 16

Eimco BSP Services Co. v. Chilivis, 241 Ga. 263, 244

OS key aia Ie ee ne 14

Flint River Mills v. Henry, 234 Ga. 385, 216 S.E.2d

Ie Seta iade bn) aes Subs ooo edncdedece cooc: 24

Flowers v. Georgia Real Estate Comm'n, 141 Ga. App.

BGS, 232 S.EB.2d SOG (1977) «2... cc cccccccccccces. 24

Ford Motor Co. v. Coleman, 402 F. Supp. 475 (D.

D.C. 1975), aff'd, 425 U.S. 927 (1976).............. 26

TABLE OF AUTHORITIES — Continued

Georgia Real Estate Comm'n v. Horne, 141 Ga. App.

226, 233 S.E.20 16 (1977) cccsecccccvcccccccees

Gravely v. Bacon, 263 Ga. 203, 429 S.E.2d 663 (1993) ....

Harper v. Virginia Dep't of Taxation, 509 U.S. __

113 S.Ct. Zoi@ (iseaee «ssn eeeenes 11, 14, 16, 17,

Harris v. Entertainment Systems, Inc., 259 Ga. 701,

386 S.E.2d 140 (1989) ....... cece cece eee eeeees

Hawes v. Bigbie, 123 Ga. App. 122, 179 S.E.2d 660

(1970) .. «0052005 0e eae wees

Henry v. Mississippi, 379 U.S. 443 (1965)...... 14,

Herb v. Pitcairn, 324 U.S. 117 (1945).............

Heublein, Inc. v. State, 256 Ga. 578, 351 S.E.2d 190

(1987), appeal dismissed, 483 U.S. 1013

(1987) . «sess eecugne cee 4, 21,

James B. Beam Distilling Co. v. Georgia, 259 Ga. 363,

382 S.E.2d 95 (1989) (“Beam (Ga. 1)”), rev'd and

remanded, 501 U.S. __, 111 S.Ct. 2439 (1991). . 2

James B. Beam Distilling Co. v. Georgia, 501 U.S.

__, 111 S.Ct. 2439 (1991) (“Beam (U.S.)”).....

James B. Beam Distilling Co. v. Georgia, 263 Ga. 609,

437 S.E.2d 782 (1993) (“Beam (Ga. II)”)........

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

Lit v. United States, 18 F. Supp. 435 (E.D. Pa. 1937) ....

McDonough Construction Co. v. McLendon Electric

Co., 242 Ga. 510, 250 S.E.2d 424 (1978)........

McGoldrick v. Compagnie Generale Transatlantique,

309 U.S. 430 (1940)... sccsesccvevcccccsccserss

McKesson Corp. v. Florida Alcoholic Beverages &

Tebacco Div., 496 U.S. 18 (1990) ... 6... 6c eee.

, 4, 19

passim

vii

TABLE OF AUTHORITIES - Continued

Page

McMillen v. Anderson, 95 U.S. 37 (1877) ............. 27

Michigan v. Long, 463 U.S. 1032 (1983)............... 14

Newsome v. Brown, 252 Ga. 421, 314 S.E.2d 225

DCE eER seh hes soecetadubassdceudsecesee se bac 23

Noble Joint City-County Bd. of Tax Assessors of

Fulton County, 672 F.2d 872 (11th Cir. 1982)....... 22

Owens v. Okure, 488 U.S. 235 (1989).................. y

Ownbey v. Morgan, 256 U.S. 94 (1921) ............... 27

Parrish v. Employees’ Retirement System, 260 Ga.

613, 398 S.E.2d 353 (1990), cert. denied, 111 S.Ct.

DCs SGae dd secudadedccen se ebdueccecneoce 21

Reich v. Collins, 262 Ga. 625, 422 S.E.2d 846 (1992)

(“Reich I”), vacated and remanded, 61 U.S.L.W.

BOOP GD By BOUOP ccccccccccccccccocs 11, 12, 27, 29

Reich v. Collins, 263 Ga. 602, 437 S.E.2d 320 (1993)

Tie Pevitiveccdaaveupevvevesneese .- 11, 12, 29

Reisman v. Caplin, 375 U.S. 440 (1964)............... 26

Richmond County Property Owner's Ass'n v.

Augusta-Richmond County Coliseum Authority,

233 Ga. 94, 210 S.E.2d 172 (1974)...... PTTTTTTy |

Robbins v. City of Rome, 230 Ga. 901, 199 S.E.2d 802

AN er errr ooo ee ‘v0 ona

Rogers v. DeKalb County Bd. of Tax Assessors, 247

Ga. 726, 279 S.E.2d 223 (1981)............ sickene' Oe

Vill

TABLE OF AUTHORITIES — Continued

Page

Scott v. State, 187 Ga. 702, 2 S.E.2d 65 (1939),

overruled on other grounds, Blackston v. Georgia

Dep't of Natural Resources, 255 Ga. 15, 334 S.E.2d

679 (1985)...... Téouseeees ORAS

Sharp & Dohme, Inc. v. United States, 144 F.2d 456

ee ee aves een eee

State Board of Equalization of California v. Young's

Market Co., 299 U.S. 59 (1936)............ Sy.

State v. Private Truck Council of America, Inc., 258

Ga. 531, 371 S.E.2d 378 (1988) ............. iaksae

[Travel Industries of Kansas, Inc. v. United States, 425

a ee Ce , Cn ss. weds one ehiebee een ees 15

lInited States v. Childs, 266 U.S. 304 (1924)........... 26

United States v. Estate of Donnelly, 397 U.S. 286

(PPP rerrrr rr: TTTTUTTILUTT Terr Te 5, 17-18

United States v. Jefferson Electric Mfg. Co., 291 U.S.

386 (1934)...... eek de das eunedseaswkeniess 14-15

Wages v. Michelin Tire Corp., 233 Ga. 712, 214

S.E.2d 349 (1975), aff'd, 423 U.S. 276 (1976) . 21

Ward v. Board of County Comm'rs, 253 U.S. 17

tee PIUTTTTIToTT rrr Ty Tree seoee ae

STATUTES

i Oh od ceccesecdedees ante cbanddstsenaae

nn aR ME er to Nes AES 8,9

TABLE OF AUTHORITIES Continued

Page

F.S.A. § 72.011.. : es | ee ens 28

F.S.A. Chapter 564 ey Trier

F.S.A. Chapter 565. Pree Fit LIM ee iéuececeuuee

O.C.G.A. Title 3 ae re . 25

O.C.G.A. § 3-2-3 ; jVesnetusuen Les ae

O.C.G.A. § 3-2-1] pase eecescenns My aay ae

O.C G.A. § 3-2-12 eaeet TUITTIT ee TS

i aso a6 60 dsb odes ob 66 ese es lee. 3, 10

A. & ; 3, 10

GA 25

CL 35 .3, 26

3-2-36 25

Se 25

O.C.G.A. § 3-4-60 (pre-1985 version) .......... 4,7

O.C.G.A. § 3-4-61 (1993 Supp.; version not appli-

cable to the instant case) ..... < 6

O.C.G.A. § 3-4-61(a)(2) (pre-1992 version, which is

applicable to the instant case)......... 6, 9, 21, B

O.C.G.A. § 3-4-152......... : Serger ee

O.C.G.A. § 9-3-33......... | 9

O.C.G.A. § 9-4-1.... EPP S% 22

O.C.G.A. § 9-4-2........ 22

O.C.G.A. § 9-4-3........... | 22

TABLE OF AUTHORITIES - Continued

Page

BEG AERA ccc cd eye see 3, 22

O.C.G.A. § 9-11-15(a), (b) & (C) ee. e eee eee eees ee

eT a oe OE SPPTTTE PTET T Teer Teer ree ce passim

eee rear oaeueedveraseecee 26

a a OL , c coc'dc vec secenceseesanccscues 24

ee * PPTULTT ORT ETP eee CU eee 27

Es clcnatevaesaneseeecusoue ees 3, 24, 27

ee nc. ove yc wibaaveuneeeie 3, 24

a eos Shc venus dcdenecdeeeveneiees 24

a IO 5 ba aos dns vxaescvesaberaneeneae 23

ae ee ere Fevkees 3, 23, 24

ae Oe I a ba 5 cba Vb Rete c nels dees sceaees 3, 24

eB i eee reer errr rrr errr 3, 24

MIscELLANEOUS

U.S. Const., Twenty-first Amendment ................ 7

Se Ga EE Uh ca dvueNehunnceeseausntceecsus 9

Ga. Revenue Rule 560-2-3-.09 ...........0e0eceee eee 25

Ga. Revenue Rules 560-1-1-.10 through 560-1-1-.14 ..3, 24

Ga. Revenue Rules Chp. 560-2-9 .................. 3, 26

No. 93-1140

In The

Supreme Court of the United States

October Term, 1993

JAMES B. BEAM DISTILLING CO.,

Petitioner,

STATE OF GEORGIA; ZELL MILLER, individually and

as Governor of the State of Georgia; MARCUS E.

COLLINS, individually and as Georgia State Revenue

Commissioner; and CLAUDE L. VICKERS, individually

and as Director of the Fiscal Division of the

Department of Administrative Services,

Respondents. }

On Petition For Writ Of Certiorari

To The Supreme Court Of Georgia

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

The Petition for Writ of Certiorari to the Supreme

Court of Georgia should be denied, because on remand

the Georgia courts properly followed the mandate of this

' There was dispute below over whether, after substituting

Georgia’s current Governor, Zell Miller, Petitioner/ Plaintiff

could reinject Georgia’s former Governor, Joe Frank Harris, into

the case. In its final orders, the trial court excluded the former

governor from the style. See Appendices B & C to the petition.

Respondents thus use the trial court’s style of the case.

Court and properly applied this Court’s other decisions.

The claim for refund of Petitioner James B. Beam Distill-

ing Co. (“Beam”) is barred by Petitioner’s lack of stand-

ing under Georgia’s refund statute and is precluded by

the State’s good faith reliance for 45 years upon the

constitutionality of its liquor tax under the decisions of

this Court, and due to the inequities of a refund in this

case. Further, since Georgia provides ample predepriva-

tion remedies which Petitioner did not pursue, due pro-

cess is satisfied. Thus, Respondents (also referred to

collectively herein as “the State”) respectfully submit that

the petition should be denied.

OPINIONS BELOW

The Georgia Supreme Court’s opinion (sometimes

referred to as “Beam (Ga. II)”) is reported at 263 Ga. 609,

437 S.E.2d 782 (1993) (Appendix A to petition).2 The

unreported decisions of the Superior Court of Fulton

County on remand are set out in Appendices B and C.

Opinions from the first phase of this case are James B.

Beam Distilling Co. v. Georgia, 501 U.S. __ , 111 S. Ct. 2439

(1991) (Appendix D) (sometimes referred to as “Beam

(U.S.)”); James B. Beam Distilling Co. v. Georgia, 259 Ga.

363, 382 S.E.2d 95 (1989) (Appendix E) (sometimes

referred to as “Beam (Ga. 1)”); and the initial, unreported

decision of the Superior Court of Fulton County (Appen-

dix F).

2 Lettered Appendices (e.g., A, B, etc.) are attached to the

Petition for Writ of Certiorari. Numbered Appendices (e.g., 1, 2,

etc.) are attached to this Brief in Opposition.

JURISDICTION

Although Petitioner predicates jurisdiction upon 28

U.S.C. § 1257, review is precluded by an adequate and

independent state ground for the decision below. The

cause of action involved is a suit for refund under

O.C.G.A. § 48-2-35 (Appendix MM), a refund provision in

Georgia’s Public Revenue Code. The Court’s mandate for

remand in this case expressly authorized consideration of

any applicable procedural bars. The facts developed on

remand and the prior, settled law of the State of Georgia

establish that Beam lacks standing to obtain a refund

under § 48-2-35 of taxes which were rebated to Beam by

the ultimately liable wholesalers.

STATUTES AND OTHER PROVISIONS INVOLVED

In addition to the constitutional provisions and the

Georgia statutes appended to the petition, the following

Georgia statutes and rules are also involved and are

appended to this Brief in Opposition: O.C.G.A. §§ 3-2-13

(Appendix 1), 3-2-14 (Appendix 2), 3-2-35(d) & (e)

(Appendix 3), 3-4-152 (Appendix 4), 9-4-10 (Appendix 5),

9-11-15(a), (b) & (c) (Appendix 6), 48-3-1 (Appendix 7),

50-13-10 (Appendix 8), 50-13-13 (Appendix 9), 50-13-19

(Appendix 10), 50-13-20 (Appendix 11); Georgia Revenue

Rules 560-1-1-.10 (Appendix 12), 560-1-1-.11 (Appendix

13), 560-1-1-.12 (Appendix 14), 560-1-1-.13 (Appendix 15),

560-1-1-.14 (Appendix 16), and Chp. 560-2-9 (Appendix

17).

STATEMENT OF THE CASE

Petitioner brought this state court action for a refund

under O.C.G.A. § 48-2-35 (Appendix MM), for liquor

taxes paid in 1982-84 under Georgia’s liquor tax statute

which had been enacted in 1938. See O.C.G.A. § 3-4-60

(pre-1985 version) (Appendix EE). Beam challenged the

tax under Bacchus Imports, Ltd. v. Dias, 468 U.S. 263

(1984).* The trial court held that the 1938 tax unconstitu-

tionally discriminated in favor of distilled spirits manu-

factured from Georgia-grown products, but applied its

ruling prospectively, and the Georgia Supreme Court

affirmed. Beam (Ga. 1), 259 Ga. 363, 382 S.E.2d 95 (1989).

This Court reversed the prospectivity ruling and

remanded on all remedial issues. Beam (U.S.), 111 S.Ct.

2439 (1991). The Court expressly preserved the State’s

right to raise procedural bars, reliance interests, and equi-

table considerations on remand:

The grounds for our decision today are narrow.

They are confined entirely to an issue of choice

of law: when the Court has applied a rule of law

to the litigants in one case it must do so with

respect to all others not barred by procedural

requirements or res judicata. We do not speculate

as to the bounds or propriety of pure prospec-

tivity.

* Georgia’s 1938 tax statute was amended in 1985 after this

Court found a similar Hawaii statute to be violative of the

Commerce Clause in Bacchus. A Commerce Clause challenge to

the 1985 Georgia statute was rejected in Heublein, Inc. v. State,

256 Ga. 578, 351 S.E.2d 190 (1987), appeal dismissed, 483 U.S. 1013

(1987).

Nor do we speculate about the remedy that may

be appropriate in this case; remedial issues were

neither considered below nor argued to this

Court, save for an effort by petitioner to buttress

its claim by reference to our decision last Term

in McKesson. As we have observed repeatedly,

federal “issues of remedy . . . may well be

intertwined with, or their consideration obvi-

ated by, issues of state law.” Bacchus,.

Nothing we say here deprives respondent [State

of Georgia] of [its} Opportunity to raise pro-

cedural bars to recovery under state law or demon-

strate reliance interests entitled to consideration

in determining the nature of the remedy that

must be provided, a matter with which

McKesson did not deal. See Estate of Donnelly,

397 U.S., at 296... ; cf. Lemon, 411 U.S., at

Os os

The judgment is reversed, and the case is

remanded for further proceedings.

111 S.Ct. at 2448 (emphasis added).4

The Georgia Supreme Court, in turn, remanded the

case to the trial court “for further proceedings consistent

with the decision of the United States Supreme Court.”

* The role of procedural bars, reliance interests, and equita-

ble considerations in the remedial context of a case like this

were also mentioned elsewhere in the various opinions written

in Beam (U.S.), e.g., 111 S.Ct. at 2443 (Souter, J.) (noting that even

full retroactivity is limited by res judicata and procedural bar-

riers such as statutes of limitations); 111 S.Ct. at 2446-47 (Souter,

J.) (retroactivity in civil cases is limited “by state procedural

requirements”); 111 S.Ct. at 2450 (Blackmun, J., concurring)

(rule of retroactivity adopted today “is not the remedial equity

that the dissent seems to [discuss]”); 111 S.Ct. 2451-56 (O’Con-

nor, J., dissenting) (discussing equitable considerations and the

case of Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)).

Appendix B, p. B4. The parties engaged in discovery, and

Beam amended its complaint and the State amended its

answer.> R. (S93A1217) 1132, 1149, 9, 76. The additional

evidence presented on remand established the following

facts.

During 1982-84, Georgia’s liquor tax was adminis-

tered through the sale of stamps by the Revenue Depart-

ment.® While either a wholesaler or a manufacturer could

purchase or affix the stamps prior to the product being

shipped to a retailer by the wholesaler, the wholesaler

was ultimately liable for the tax and would reimburse the

manufacturer for the tax when the manufacturer had

purchased the stamps first. See R. (S93A1217) 118-19.”

Beam manufactures distilled spirits outside Georgia

and sells them to its wholesalers in Georgia under Geor-

gia’s three-tier system.* During 1982-84, when Beam pur-

chased liquor stamps the rate for its products was $1.00

5 The defenses raised in the State’s original Answer and

Amended Answer were properly before the court both under

this Court’s mandate and under Georgia law. See O.C.G.A.

§ 9-11-15(a), (b) & (c) (Appendix 6); McDonough Construction Co.

v. McLendon Electric Co., 242 Ga. 510, 515, 250 S.E.2d 424, 429

(1978).

the tax is now collected exclusively from the wholesalers

through a reporting system. O.C.G.A. § 3-4-61 (1993 Supp.).

7 O.C.G.A. § 3-4-61(a)(2) (pre-1992 version, which is appli-

cable in the instant case) (Appendix FF) provided: “Before ship-

ment or delivery to any retailer, every manufacturer or

wholesaler shall affix or cause to be affixed to each bottle or

container of distilled spirits a stamp indicating the payment of

the proper amount of tax”.

5 The three tiers are manufacturer, wholesaler and retailer.

The tiers must remain distinct, and only wholesalers can ship to

per liter.’ Beam seeks a refund of the full $1.00 per liter,!°

even though all claimed amounts were collected by Beam

from its ultimately liable Georgia wholesalers, separately

from the price of the distilled spirits. R. (S93A1217) 120,

130-241, 279-80; T. 9. All pending refund claims awaiting

resolution of the instant case for pre-1985 taxes equal

$31,700,000, and with claimed interest the total is

$60,000,000. R. (S93A1217) 123.

The taxes in question were paid to the State without

challenge to their validity and without actual threat of

collection, criminal prosecution, or other sanction. R.

(S93A1217) 120-22. The State expended these taxes for

public works, programs and services, without reserve or

contingency and in good faith reliance upon their val-

idity. R. (S93A1217) 259. In particular, the State relied

upon the upholding of the tax against a Commerce

Clause challenge in Scott v. State, 187 Ga. 702, 2 S.E.2d 65

(1939),"! as well as upon the Twenty-first Amendment to

the United States Constitution and decisions of this Court

such as State Bd. of Equalization of California v. Young's

retailers. Manufacturers are granted exclusive sales territories

for their products, through their designation of exclusive

wholesale distributors. See O.C.G.A. § 3-4-152 (Appendix 4).

° The tax rate for distilled spirits manufactured from Geor-

gia-grown products during the same period was $.50 per liter.

O.C.G.A. § 3-4-60 (pre-1985 version) (Appendix EE).

‘0 However, as noted in McKesson Corp. v. Florida Alcoholic

Beverages & Tobacco Div., 496 U.S. 18, 49 n. 33 (1990), the federal

constitution does not contemplate a refund of more than the

discriminatory portion of such a tax.

"! Overruled on other grounds in Blackston v. Georgia Dep't

of Natural Resources, 255 Ga. 15, 334 S.E. 2d 679 (1985).

Market Co., 299 U.S. 59 (1936). R. (S93A1217) 250. Geor-

gia’s liquor industry also considered the tax constitu-

tional until Bacchus. Id.

The facts adduced on remand established that Geor-

gia and its public programs and citizens would suffer if

the State were now required to refund these taxes, R.

(S93A1217) 261-63, 266, 273-74, and that when Beam pur-

chased liquor stamps in 1982-84 it did not avail itself of

any of the multiple predeprivation remedies that were

available to challenge Georgia’s liquor laws, R.

(S93A1217) 122, 252-53.

On cross-motions for summary judgment, the trial

court entered judgment for the State on several distinct

grounds, including the procedural bar under § 48-2-35

(Appendix MM) that a party who remits a tax to the State

does not have standing to recover the tax if the party has

been reimbursed for the tax by its purchaser; based upon

State reliance interests and equitable considerations; and

due to the existence of predeprivation remedies which

were found to satisfy due process. Trial court order,

Appendix B, pp. B8-B12.'2 On appeal, the Georgia

Supreme Court affirmed on the ground of Beam’s lack of

standing to obtain a refund under § 48-2-35, and due to

the existence of multiple state predeprivation remedies

12 After final decision by the trial court on remand, Beam

advanced a claim under 42 U.S.C. § 1983 and directly under the

United States Constitution for a refund; and the trial court

rejected those claims, which were essentially based upon the

same due process argument previously made by Beam. R.

(S93A1218) 6; App. C.

ee Se eee ee

which were found to satisfy due process. Beam (Ga. II),

Appendix A.13

Response To Petitioner’s Statement Of The Case

Petitioner’s Statement of the Case is argumentative

and contains misstatements.14

Beam mischaracterizes Georgia’s alcohol system dur-

ing 1982-84. As the Georgia Supreme Court confirmed in

its decision below, liability for the distilled spirits tax was

ultimately imposed upon the wholesaler, whatever the

arrangement settled upon by the manufacturer and

wholesaler for actually purchasing and affixing the tax

stamps before the wholesaler’s shipment to the retailer.

See Beam (Ga. Il), Appendix A, pp. A3-A4; O.C.G.A.

§ 3-4-61(a)(2) (Appendix FF).!5 Often, manufacturers pur-

chased and affixed stamps prior to shipment to the Geor-

gia wholesaler, but in such cases the manufacturer was, in

very real effect, the State’s collection agent in collecting

the tax from the ultimately liable wholesaler. Once the

'* The court did not reach Beam’s 42 U.S.C. § 1983 related

claims, which the State argued were barred by the statute of

limitations and for other reasons. R. (S93A1218) Appellees’

Brief. See, e.g., Owens v. Okure, 488 U.S. 235, 236 (1989); O.C.G.A.

§ 9-3-33 (two year general personal injury statute of limitations).

'4 The negative remarks at Pp. 4-5 of the petition regarding

the courts and the other parties below are not only incorrect, but

particularly inappropriate. See generally U.S. Sup. Ct. Rule 24.6

(“A brief must be... free from... scandalous matter”). The

Georgia courts and Respondents have at all times followed this

Court’s mandate and guidelines for remand.

1S See also O.C.G.A. § 3-2-11(2) (App. U) (further indicating

the liability of the wholesaler and of the importer).

manufacturer so collected the tax, the wholesaler became

the real party in interest for this claim for refund. The

price of the alcohol product to the wholesaler did not

change, and the wholesaler did not pay the tax to Beam to

acquire the goods, but to satisfy its own tax liability.

Beam is also incorrect in asserting that Respondents

and “everyone involved in the case” agreed that § 48-2-35

“was the remedy available to the Petitioner.”'® During the

first phase of this case, what everyone focused upon was

obtaining a resolution on the merits of the constitutional

challenge, and, as this Court noted in Beam (U.S.), 111

S.Ct. at 2448, “remedial issues were neither considered

below nor argued to this Court.” It was only after a ruling

of retroactivity for the federal rule of law that remedial

issues became relevant, and Beam is incorrect in implying

that Respondents admitted that the refund remedy con-

tended for by Beam would ever be proper in this case.

In fact, during oral argument before this Court,

6 Petition, p. 4. Quite to the contrary, the State argued

below that the more specific credit/refund provisions in the

Alcoholic Beverages Code, O.C.G.A. §§ 3-2-13 (App. 1) and

3-2-14 (App. 2), were either the governing remedial provisions

or, at the very least, must be read in conjunction with the gen-

eral refund statute contained in the Public Revenue Code,

O.C.G.A. § 48-2-35. R. (S93A1217) 329. That argument was not

reached by the courts below. E.g., trial court order, App. B, p.

B12 n. 4.

Respondents expressly pointed out that there had not yet

been a decision on that issue.!7

Petitioner mischaracterizes the decisions of the Geor-

gia courts and ignores the “standing” decisions under

§ 48-2-35 which were extant long before Bacchus. For

example, in Reich,'* a federal retiree sought a refund of

'? Transcript of Cral Argument (October 30, 1990), pp.

24-25:

“Q. Do we assume that Georgia would provide a

refund here if we agree with the petitioner on the

retroactivity of Bacchus?

“Ms. Baker [Counsel for the State]: I don’t think that

we would agree that -

“Q. Or has that been decided?

“Ms. Baker: That issue has not been addressed by

any court so far in the State of Georgia. And that

issue, I think, would be open to be decided on a

remand of this case, not inconsistent with the princi-

ples announced in the McKesson case. m

Ms. Baker went on to point out, inter alia, the availability of

injunctive relief in Georgia for challenges to unconstitutional

tax statutes and to comment that reliance interests and equitable

considerations were important to a resolution of the refund

issue. Id. at 26-27, 29-30.

'8 The Reich cases involved Georgia income taxation of fed-

eral retirees in light of Davis v. Michigan Dep't of Treasury, 489

U.S. 803 (1989) and, more recently, in light of Harper v. Virginia

Dep't of Taxation, 509 U.S. __, 113 S.Ct. 2510 (1993). In Reich v.

Collins, 262 Ga. 625, 422 S.E.2d 846 (1992) (“Reich I”), vacated and

remanded, 61 U.S.L.W. 3867 (June 28, 1993), the court held Geor-

gia’s tax unconstitutional under Davis and retroactively so

under Beam (U.S.), but concluded that no refund was due as a

matter of state law. In Reich v. Collins, 263 Ga. 602, 437 S.E.2d 320

(1993) (“Reich II”), the court ruled that the taxpayer's waiver of

adequate predeprivation remedies under Georgia law negated a

due process argument for a refund.

Georgia income taxes under § 48-2-35, raising in Reich II

due process arguments roughly similar to Petitioner's

due process arguments in the instant case. Since Reich II

is pending before this Court on petition for writ of

certiorari, Petitioner in the instant case appears to be

making a thinly veiled attempt to support the Reich peti-

tion and to give the impression that that case and the

instant one are inextricably interdependent. Even a cur-

sory reading of the decision below in the instant case

shows that the two cases have important differences and

that the Reich decisions are essentially irrelevant to the

instant case. In Beam (Ga. I) the Georgia Supreme Court

assumed arguendo that Beam’s cause of action under

§ 48-2-35 could lie, as Beam vigorously asserted, but

ruled, under clearly established Georgia law pertaining to

that Code section and on the undisputed facts of this

case, that Beam lacked standing to obtain a refund of

taxes which it had collected from its ultimately liable

wholesalers. Petitioner's usage of the Reich decisions in

its petition appears designed to confuse the Georgia law

and the ruling in Beam (Ga. II), in order to set up Peti-

tioner’s later, incorrect argument that Georgia provides

no “clear” remedy.

Petitioner's final description, at pp. 8-10 of the peti-

tion, of the decision below is convoluted, with Petitioner

at one point quoting its own inaccurate paraphrase of the

court’s holding. There is no ambiguity in the decision

below: the court concluded that under established state

law applicable to refund actions under § 48-2-35, Beam

lacked standing to obtain a refund of taxes which it

collected, as taxes, from its dually and ultimately liable

wholesalers, and that Beam’s failure to avail itself of

adequate predeprivation remedies prior to payment of

the taxes vitiated Beam’s due process argument.'%

Petitioner's (mistaken) reliance upon matters outside

the record is inappropriate. See, e.g., Adickes v. S.H. Kress

& Co., 398 U.S. 144, 157-58 n.16 (1970). The Georgia casual

sales tax litigation referred to at page 11 of the petition is

also irrelevant to the legal issues presented by the peti-

tion,2°

—_— *

REASONS FOR DENYING THE WRIT

I. THE DECISION BELOW WAS BASED UPON AN

ADEQUATE AND INDEPENDENT STATE

GROUND.

“It is, of course? a familiar principle that this Court

will decline to review state court judgments which rest on

'9 The decision below in Beam (Ga. I) was unanimous as to

Beam’s lack of standing, and two justices dissented on the due

process issue. App. A.

20 The sales tax case of Tedder v. Collins, Cobb Superior

Court, State of Georgia, Civil Action No. 93-1-5530-28 (1993)

was a declaratory judgment action to challenge the promulga-

tion of an administrative regulation concerning Georgia’s taxa-

tion of “casual sales”. That case is merely another example of

how Georgia’s predeprivation remedies, including declaratory

judgment and injunctive relief, provide a clear, prompt, and

adequate procedure to challenge the validity of a tax and to seek

an escrow account or other appropriate equitable relief. Since

the facts and the legal issues in that case are different from the

instant case, to the extent Beam may attempt to imply an equal

protection problem, it is both non-existent and not present as an

issue in the instant case.

independent and adequate state grounds, even where

those judgments also decide federal questions.” Henry v.

Mississippi, 379 U.S. 443, 446 (1965). See also Michigan v.

Long, 463 U.S. 1032, 1038 n.4 (1983).

The instant case was remanded by this Court for a

consideration of remedial issues, including state pro-

cedural bars. Beam (U.S.), 111 S.Ct. at 2448. See also id. at

2442 (“the remedial inquiry is one governed by state

law”). Cf. Harper v. Virginia Dep't of Taxation, 509 U.S. __,

113 S.Ct. 2510, 2520 (1993) (leaving to state courts the

remedial questions of state law).

The state ground in the decision below is clear from

the face of the opinion, i.e., that Beam lacks standing

under O.C.G.A. § 48-2-35 to obtain a refund of taxes

which its wholesalers paid to Beam to satisfy their own

tax liability. The ruling not only has fair and substantial

support under Georgia law, but the exclusive and well-

established line of authority on point under § 48-2-35

makes the standing requirement clear. See Eimco BSP Ser-

vices Co. v. Chilivis, 241 Ga. 263, 268, 244 S.E.2d 829 (1978);

Blackmon v. Georgia Independent Oilmen’s Ass’n, 129 Ga.

App. 171, 174, 198 S.E.2d 896, 900 (1973); Blackmon ov.

Premium Oil Stations, Inc., 129 Ga. App. 169, 170, 198

S.E.2d 900, 902 (1973). See also Atlanta Americana Motor

Hotel Corp. v. Undercofler, 222 Ga. 295, 149 S.E.2d 691

(1966).2! While the prior Georgia cases involved sales

21 This Georgia rule is similar to the standing rule under

federal tax refund statutes, upon which § 48-2-35 was modeled.

See Hawes v. Bigbie, 123 Ga. App. 122, 123, 179 S.E.2d 660, 661-62

(1970) and decisions under federal refund statutes, e.g., United

States v. Jefferson Electric Mfg. Co., 291 U.S. 386, 400, 402-03 (1934)

taxes (imposing dual liability upon sellers and purchasers

of tangible personal property), they establish a clear rule

under § 48-2-35 and which is readily seen to apply to the

liquor taxes collected by Beam from its wholesalers in the

instant case. See Beam (Ga.II), Appendix A, pp. A3-A4.

That the standing bar may be deemed procedural in

the instant case does not preclude its adequacy, see Henry

v. Mississippi, 379 U.S. at 447, because the procedural bar

serves legitimate state interests, including protection of

the public fisc against claims which would result, in

effect, in unjust enrichment. The standing requirement

does not preclude a recovery by a seller for taxes

absorbed by the seller, but only for taxes reimbursed to

(“We cannot assent to the view that a court may give a judgment

awarding the taxpayer a refund without inquiring whether he

has borne the burden of the tax or has reimbursed himself by

collecting it from the purchaser,” since suits for refund proceed

on equitable principles); Travel Industries of Kansas, Inc. v. United

States, 425 F.2d 1297, 1300 (10th Cir. 1970) (stating that tax-

payer's argument that statutory tax refund suits do not involve

equitable considerations “has no authoritative support of which

we are aware,” and refusing a refund which would bea windfall

to plaintiff); Sharp & Dohme, Inc. v. United States, 144 F.2d 456,

458-59 (3d Cir. 1944) (common law rule is that plaintiff who

collected the taxes from another and did not bear the burden of

the taxes lacks standing to maintain an action for refund); Lit v.

United States, 18 F. Supp. 435, 439 (E.D. Pa. 1937) (refund action

is governed by equitable principles). See also Atchison, Topeka &

Sante Fe Ry. v. Lennen, 732 F.2d 1495, 1506-07 (10th Cir. 1984)

(denying on equitable grounds a refund under state law where

the taxes were paid without protest and the government had

already expended the revenues).

the seller by his ultimately liable purchaser, thus prevent-

ing a double recovery of the taxes qua taxes.??

Il. THE DECISION BELOW WAS CORRECTLY

DECIDED.

A. UNDER THIS COURT’S MANDATE FOR

REMAND AND OTHER DECISIONS, THE

STATE PROCEDURAL BAR, RELIANCE

INTERESTS AND EQUITABLE CONSIDER-

ATIONS PRECLUDE A REFUND TO PETI-

TIONER IN THIS CASE.

In Beam (U.S.), 111 S.Ct. 2439, and Harper, 113 S.Ct.

2510, the Court shifted from the equitable balancing

approach embodied in Chevron Oil Co. v. Huson, 404 U.S.

97 (1971) to a general rule of retroactivity for decisions

which make new announcements of federal law. In light

of the departure from Chevron Oil's approach to determin-

ing the applicable rule of law for controversies arising on

facts predating the law-changing decision, state reliance

interests, equitable considerations, and procedural bars

are now appropriately, and importantly, relevant to ques-

tions of remedy and actual relief. This approach was

22 By analogy to the waiver doctrine, see Henry v. Missis-

sippt, 379 U.S. at 448 n.3, it is also relevant in this context that

Beam waived its opportunities to contest the tax prior to pay-

ment. Indeed, this Court has held that there is an adequate state

ground where plaintiff chose the wrong remedy under local law.

Edelman v. California, 344 U.S. 357, 361-62 (1953) (state provided

another, proper remedy to test the constitutionality of a statute).

See also Herb v. Pitcairn, 324 U.S. 117, 125-26 (1945) (if the

same judgment would be rendered by the state court after a

correction of its views of federal law, this Court’s review would

be an advisory opinion).

established and mandated for the instant case by the

Court’s decision of June 20, 1991. See Beam (U.S.), 111

S.Ct. at 2448 (individual equ .ies, procedural require-

ments and procedural bars, as well as reliance interests,

may properly be considered in resolving remedial issues

on remand).

While this issue has not been squarely decided for

the general case and was apparently reserved in Harper,

decisions of the Court other than Beam (U.S.) strongly

indicate that state procedural bars, reliance interests, and

equitable considerations must be taken into account in

determining whether any actual relief in the form of a

refund of taxes held retroactively unconstitutional is to be

afforded a particular claimant.23

*3 See Harper, 113 S.Ct. 2510, 2516 n.9, 2522 n.1, 2525-26,

2536-38 (wherein four justices expressly stated that equitable

considerations are relevant to the remedial inquiry and a fifth

indicated that procedural defaults may occur in this context);

American Trucking Ass‘ns, Inc. v. Smith, 496 U.S. 167, 219-20, 223

(1990) (wherein the plurality of four justices applied the equita-

ble balancing test of Chevron Oil and the four dissenting justices

considered Chevron Oil and the cases upon which it was based to

be remedy cases in which consideration of reliance interests

could be appropriate); Lemon v. Kurtzman. 411 US. 192, 198-99

203, 207-09 (1973) (deciding state remedial issues on the basis of

equitable reliance interests of the state as to the validity of the

s‘tte statute during the period before it had been declared

urs.onstitutional, and noting that state officials and those with

whem they deal are entitled to rely on a presumptively valid

State statute); United States v. Estate of Donnelly, 397 U.S. 286,

296-97 (1969) (Harlan, J., concurring, indicating that reliance

interests and other equitable considerations should be taken

into account in the determination of what “relief” is appropriate

in any given case and Stating: “There are, of course, circum-

stances when a change in the law will jeopardize an edifice

Application of these three factors in the remedial

context of the instant case is a sound and appropriate

rule. A refund to Petitioner is not warranted where the

claimant lacks standing (as discussed in the preceding

section of this Brief) and where the State’s reliance inter-

ests and equitable considerations are superior.*4

The instant case involves Georgia’s pre-Bacchus tax

statute, the validity of which had been relied upon by the

State, and by the alcohol industry doing business in Geor-

gia, since its upholding in 1939. R.(S93A1217) 250. Not

only was the statute presumptively valid, it had been

expressly upheld under the Commerce Clause, based

upon this Court’s Young's Market line of decisions. Scott v.

State, 187 Ga. 702, 2 S.E.2d 65 (1939). Neither Beam nor

anyone else challenged the validity of the tax prior to

making the tax payments in question. R.(S93A1217) 122.

Beam has fully recouped the taxes involved in its refund

which was reasonably constructed on the foundation of prevail-

ing legal doctrine. Thus, it may be that the law of remedies

would pe nit recision, for exammie, but not an award of dam-

ages to a party who finds him»«if ebie to avoid a once-valid

contract under new notions «| public policy”); Cipriano v. City of

Houma, 395 U.S. 701, 706 (1969).

24 The trial court based its denial of a refund upon the

State’s reliance interests and equitable considerations, in addi-

tion to other grounds. Appendix B, p. B9. The Georgia Supreme

Court did not address reliance interests and equitable consid-

erations in reaching its conclusion that no refund was due, even

though such matters were argued to that court. R.(S93A1217)

Appellees’ Brief. However, “a respondent or appellee may sup-

port the judgment in his favor upon grounds different from

those upon which the court below rested its decision.”

McGoldrick v. Compagnie Generale Transatlantique, 309 U.S. 430,

434 (1940).

claim. R.(S93A1217) 120. Thus, a refund wivisid provide a

double recovery of these amounts to Beam. to the detri-

ment of other taxpayers. R.(S93A1217) 262-63. Indeed,

each court whi : has considered the State’s reliance inter-

ests and equitable considerations, for any purpose in the

instant matter, has easily concluded that such factors

weigh out in favor of the State in this case. See, e.g., Beam

(U.S.), 111 S.Ct. at 2455-56 (O’Connor, J., dissenting);

Beam (Ga. 1), 259 4a. 363, 382 S.E.2d 95 (1989): Beam (trial

court II), Appendix B, p. B9.

B. DUE PROCESS IS SATISFIED BY MULTIPLE

PREDEPRIVATION REMEDIES WHICH PETI-

TIONER FAILED TO AVAIL ITSELF OF PRIOR

TO PAYMENT OF THE TAX.

This Court has made it clear in both Harper, 113 S.Ct.

2510 and McKesson Corp. v. Florida Alcoholic Beverages &

Tobacco Div., 496 U.S. 18 (1990) that due process is satis-

fied in a case like the instant one when the state provides

adequate predeprivation remedies:

If Virginia “offers a meaningful opportunity for

taxpayers +2 withhold contested tax assessments

and to c'iallenge their validity in a pre-

deprivation hearing,” the “availability of a pre-

depriveti+n hearing constitutes a procedural

safegues .. . sufficient by itself to satisfy the

Due Pr 2ss Clause.”

Harper, 113 S.Ct. at 2519 (quoting McKesson, 496 U.S. at 38

n.21). The Court further stated that “if no such pre-

deprivation remedy exists,” due Process obligates the

state “to provide meaningful backward-looking relief to

rectify any unconstitutional deprivation.” Id. (emphasis

added). The Court also reaffirmed in Harper that:

The constitutional sufficiency of any remedy

thus turns (at least initially) on whether Virginia

law “provide[s] a[n] [adequate] form of ‘pre-

deprivation process,’ for example, by authorizing

taxpayers to bring suit to enjoin imposition of a tax

prior to its payment, or by allowing taxpayers to

withhold payment and then interpose their objections

as defenses in a tax enforcement proceeding.”

Harper, 113 S.Ct. at 2520 (again quoting McKesson, 496

U.S. at 36-37) (emphasis added).

At all relevant times, taxpayers in Georgia have been

authorized to bring suit to enjoin imposition of an

allegedly unconstitutional tax prior to its payment, and

Georgia has also provided other remedies allowing an

alcohol taxpayer like Petitioner to withhold payment and

interpose their objections as defenses in a tax enforce-

ment proceeding. Petitioner acknowledges, as it must,

that as long as Georgia provides at least one clear pre-

deprivation remedy, due process is satisfied. Petition, p.

16. There is no merit to Petitioner’s efforts to obfuscate

Georgia’s remedies, nor to its “duress” argument. In

essence, Petitioner’s duress argument rests upon its erro-

neous assertions regarding the nature of Georgia’s alco-

holic beverages regulatory system. However, that

detailed system and Georgia’s liberal set of pre-

deprivation procedures amply protect the due process

rights of alcohol licensees and taxpayers.?°

25 As discussed in the Statement of the Case, Beam attempts

to negate the dual liability feature of the liquor tax, and to give

1. Georgia Provides Adequate Predeprivation

Remedies.

Suit to enjoin tax. The availability of a suit for

injunctive relief to challenge the constitutionality of an

alcohol tax, or other tax provision or alcohol regulation,

has long been recognized in Georgia. See, e.g., Heublein,

Inc. v. State, 256 Ga. 578, 351 S.E.2d 190 (1987), appeal

dismissed, 483 U.S. 1013 (1987) (suit for declaratory and

injunctive relief challenging the constitutionality under

the Commerce Clause of Georgia’s 1985 distilled spirits

taxes); Blackmon v. Golia, 231 Ga. 381, 202 S.E.2d 186

(1973) (suit for injunctive relief entertained to challenge

constitutionality of alcohol tax statute, and tax struck

down as unconstitutional); Parrish v. Employees’ Retirement

System, 260 Ga. 613, 398 S.E.2d 353 (1990), cert. denied, 111

S.Ct. 2016 (1991); State v. Private Truck Council of America,

Inc., 258 Ga. 531, 371 S.E.2d 378 (1988); City Council of

Augusta v. Mangelly, 243 Ga. 358, 254 S.E.2d 315 (1979);

Rogers v. DeKalb County Bd. of Tax Assessors, 247 Ga. 726,

279 S.E.2d 223 (1981); Wages v. Michelin Tire Corp., 233 Ga.

712, 214 S.E.2d 349 (1975), aff'd, 423 U.S. 276 (1976);

Richmond County Property Owner's Ass'n v. Augusta-Rich-

mond County Coliseum Authority, 233 Ga. 94, 210 S.E.2d

172 (1974); City of Lithonia v. DeKalb County Bd. of Educ.,

231 Ga. 150, 200 S.E.2d 698 (1973); Robbins v. City of Rome,

the impression that only Beam could purchase tax stamps and

that it could not do business in Georgia otherwise. The Georgia

Supreme Court expressly rejected that argument in light of

O.C.G.A. § 3-4-61(a)(2) (App. FF). Beam (Ga. II), App. A, pp. A3-

A4.

230 Ga. 901, 199 S.E.2d 802 (1973); DeKalb County v. All-

state Beer, Inc., 229 Ga. 483, 192 S.E.2d 342 (1972). See also

Noble v. Joint City-County Bd. of Tax Assessors of Fulton

County, 672 F.2d 872, 875 (11th Cir. 1982); Adams v. Smith,

415 F. Supp. 787 (N.D. Ga. 1976), aff'd, 568 F.2d 1232 (11th

Cir. 1978); City of Atlanta v. Spence, 242 Ga. 194, 249 S.E.2d

554 (1978); Blackmon v. Alexander, 233 Ga. 832, 213 S.E.2d

842 (1975).

Thus, even if every one of Beam’s disputed character-

izations of Georgia’s alcohol system were correct, the

Georgia courts have consistently entertained suits in

equity to enjoin and to rule upon the constitutionality of

a Georgia tax.

Suit for declaratory judgment. Georgia law also pro-

vides for declaratory judgment suits to challenge the

constitutionality of alcoholic beverages statutes or other

statutes, including issuance of injunctions as a part of

such action. See O.C.G.A. §§ 9-4-1 (Appendix GG), 9-4-2

(Appendix HH), 9-4-3(b) (Appendix II), 9-4-10 (Appendix

5); Heublein, Inc. v. State, 256 Ga. 578, 351 S.E.2d 190

(1987); Gravely v. Bacon, 263 Ga. 203, 429 S.E.2d 663 (1993);

Clein v. Kaplan, 201 Ga. 396, 40 S.E.2d 133 (1946).

Petitioner’s reliance upon the cases cited in footnote

17, on page 29 of the petition, and others which are

discussed in the text of the petition is misplaced. Those

cases mainly concern the generai rule that courts of

equity have some discretion and that an adequate remedy

at law may preclude a suit in equity, or they address

special circumstances in which a declaratory judgment

acetic itaicainaienacea inane inal

action may be inappropriate. However, as is clearly indi-

cated by the cases cited in the preceding three para-

graphs, the Georgia courts do indeed entertain suits in

equity to resolve constitutional challenges to taxes. Peti-

tioner’s declaratory judgment and other cases are distin-

guishable, as involving other situations, such as where a

party has begun an appeal remedy which will provide

judicial review and then seeks to abandon that remedy

for a declaratory judgment action. See, e.g., Newsome v.

Brown, 252 Ga. 421, 314 S.E.2d 225 (1984). Any overly

broad dicta in those cases is not controlling in the situa-

tion of an allegedly unconstitutional tax, and the Georgia

Supreme Court properly rejected Beam’s arguments

below, which were based upon essentially the same

authorities cited to this Court by Beam.

Tax Enforcement Proceedings. Georgia also provides

multiple procedures in which an alcohol taxpayer may

interpose his objections to the tax prior to payment, as

defenses in a tax enforcement proceeding. A remedy

which is commonly employed by alcohol taxpayers is to

appeal from a deficiency assessment issued by the Geor-

gia Revenue Department prior to paying a disputed tax.

Section 3-2-11(2) (Appendix U) of the Georgia Code

expressly provides for appeals by wholesalers or manu-

facturer/importers under Georgia’s Administrative Pro-

cedure Act (“APA”). The APA contains both a general

appeal remedy and an additional remedy for appealing

from any decision, action or inaction of the Revenue

Department involving taxes. O.C.G.A. §§ 50-13-13

(Appendix 9), 50-13-12 (Appendix TT). The APA provides

for a full administrative hearing, followed by judicial

review to resolve constitutional and legal issues.

O.C.G.A. §§ 50-13-13 (Appendix 9), 50-13-19 (Appendix

10), 50-13-20 (Appendix 11). Under this remedy, a consti-

tutional challenge must be raised at the administrative

level, but is decided by the superior court and thereafter

by the appellate courts. See, e.g., O.C.G.A. § 50-13-19(h)

(Appendix 10); Flint River Muiils v. Henry, 234 Ga. 385,

386-87, 216 S.E.2d 895, 896-97 (1975); Flowers v. Georgia

Real Estate Comm'n, 141 Ga. App. 105, 232 S.E.2d 586

(1977); Department of Public Safety v. Foreman, 130 Ga.

App. 71, 202 S.E.2d 196 (1973). See also Georgia Real Estate

Comm'n v. Horne, 141 Ga. App. 226, 233 S.E.2d 16 (1977).

Other pre-enforcement procedures are also provided

by Georgia, including O.C.G.A. §§ 48-2-54 (Appendix PP)

(state suit to collect taxes, in which taxpayer may raise

objections to the tax), 48-3-1 (Appendix 7) (affidavit of

illegality action by taxpayer in superior court to challenge

tax which state attempts to collect by levy), and 50-13-10

(Appendix 8) and 50-13-11 (Appendix SS) (procedure for

administrative declaratory rulings followed by superior

court and appellate court review). See Ga. Revenue Rules

560-1-1-.10, et seq. (Appendices 11-15).

2. There Is No Merit To The “Duress” Argu-

ment.

With no actual threat of sanctions against it in this

case, Petitioner mainly argues that the alleged risk of

criminal prosecution, seizure of its alcoholic beverages as

contraband, or the suspension or cancellation of its liquor

license constituted duress or potential sanctions which

should be deemed to negate the adequacy of Georgia’s

EE a Te

predeprivation remedies. There is no merit to this conten-

tion.

Petitioner’s assertions are based upon extreme and

erroneous characterizations of Georgia’s Alcoholic Bever-

ages Code. For example, the contraband statute provides

that, “[e]xcept as otherwise specifically provided for by

law,” non-tax-paid alcohol is contraband. O.C.G.A.

§ 3-2-33 (Appendix W). Similarly, the criminal provisions

only apply to violations of “this title [i.e. the Alcoholic

Beverages Code, O.C.G.A Title 3].” See, e¢.g., O.C.G.A.

§§ 3-2-36 (Appendix Y), 3-3-27 (Appendix CC). Beam,

however, seeks to ignore O.C.G.A. § 3-4-61(a)(2) (Appen-

dix FF) altogether, because it only required tax stamps to

be affixed by the time the liquor left the Georgia whole-

saler’s warehouse for the Georgia retailer. Beam (Ga. II),

Appendix A, pp. A3-A4. What the law allowed, the Reve-

nue Department could not prosecute or otherwise pun-

ish.26

26 Beam’s argument based upon Ga. Revenue Rule

560-2-3-.09 ignores the full statutory scheme, and was properly

rejected by the Georgia Supreme Court below. Under O.C.G.A.

§ 3-4-61(a)(2) (App. FF), the Revenue Department could not,

and did not, consider the delivery by a manufacturer of distilled

spirits to its licensed, designated wholesaler without tax stamps

affixed to be a crime, nor to be contraband which could be

seized, nor to be a ground for suspending or cancelling the

manufacturer’s or wholesaler’s liquor license. R.(S93A1217)

120-21. Indeed, no such criminal prosecution, seizure, or action

against a manufacturer or the manufacturer’s liquor license has

ever been brought. See id.

Further, even assuming arguendo that there could be merit

to Beam’s arguments, Georgia offers further due process

protections by providing a hearing procedure for alcoholic

beverages detained as suspected contraband and before

In addition, the mere accruai of interest upon unpaid

taxes,?” if they are ultimately found to be constitutional

and due, does not invalidate a predeprivation remedy,

and McKesson and the other decisions of this Court

should not be so read. See generally United States v. Childs,

266 U.S. 304, 307 (1924) (“interest [is merely] a means of

compensation” to protect against the loss of the time-

value of money). Similar considerations should apply

regarding Georgia’s 10% civil penalty for failure to pay

alcohol taxes.28 See generally Reisman v. Caplin, 375 U.S.

440, 446-47 (1964) (IRS contempt penalties); Ford Motor

Co. v. Coleman, 402 F. Supp. 475, 484 (D. D.C. 1975), aff'd,

425 U.S. 927 (1976) (civil penalties on auto manufacturers;

“the Constitution is offended [only] when the penalty

system .. . create[s] a virtual roadblock to judicial

review”). Indeed, Georgia’s nonpayment penalty is waiv-

able when a taxpayer has a good faith, reasonable basis

for his refusal to pay, see O.C.G.A. § 3-2-12 (Appendix V),

disposition, O.C.G.A. § 3-2-35(d)&(e) (App. 3), and also

provides for a hearing from an alcohol license citation prior to

any actual suspension or denial of the license, O.C.G.A.

§ 3-2-3(1) (App. T); Ga. Revenue Rules Chp. 560-2-9 (App. 17).

Finally, even if Beam could have faced criminal exposure, a

court of equity would have intervened to prevent injury to an

alcohol licensee who was seeking a decision on an allegedly

unconstitutional statute. See Harris v. Entertainment Systems,

Inc., 259 Ga. 701, 386 S.E.2d 140 (1989).

27 See O.C.G.A. § 3-2-11(5) (App. U) (providing for interest

at the rate of 1 percent per month on unpaid alcohol taxes).

28 See O.C.G.A- §§ 3-2-11(3) (App. U), 48-2-44(a) (App. OO)

(penalty for willful failure to pay). The fraud penalty 1s irrele-

vant to a case of this type. See O.C.G.A. § 3-2-11(4) (App. U).

which a good faith constitutional challenge to the validity

of the alcohol tax would be.2%

Petitioner’s reliance upon Atchison, Topeka & Sante Fe

Ry. v. O'Connor, 223 U.S. 280 (1912) is also misplaced.

That case involved a state remedial system which the

Court assumed provided no suit in equity and no appeal

procedures, as Georgia does provide, and a tax statute

which automatically forfeited the company’s right to do

business in the state if the company failed to pay the tax.

223 U.S. at 285. In addition, in that case the taxpayer put

the state on notice, at the time of payment, of its dispute

over the validity of the tax. 223 U.S. at 287. The instant

Georgia situation involves none of those factors.

Similarly, Brinkerhoff-Faris Trust & Savings Co. v. Hill,

281 U.S. 673 (1930) is inapposite. That case involved a

situation where there was no procedural remedy avail-

able at any time under state law for the plaintiff. 281 U.S.

at 678-79. While Petitioner tries to use that case to sup-

port an argument that Reich I, 262 Ga. 625, 422 S.E.2d 846,

deprived Beam of due process by ruling § 48-2-35 inappli-

cable to the federal retiree therein, Beam ignores the fact

that the Georgia courts in the instant case assumed

arguendo (as Beam had asserted) that § 48-2-35 could be

available to Beam. See also Brinkerhoff, 281 U.S. at 681 n.8

29 In addition, the requirement of a surety bond to pursue a

remedy such as that provided by O.C.G.A. §§ 48-3-1 (App. 7) or

48-2-59 (App. RR) also does not violate due process. See Ownbey

v. Morgan, 256 U.S. 94, 108-12 (1921); McMillen v. Anderson, 95

U.S. 37, 42 (1877). See generally Cohen v. Beneficial Industrial Loan

Corp., 337 U.S. 541, 551-52 (1949).

({even] a change in state court decisions generally does

not offend constitutional guarantees).

Also inapplicable is Ward v. Board of County Comm'rs,

253 U.S. 17 (1920), which involved actual governmental

threats to collect a tax by seizing and selling realty and

where the county failed to respect a federal exemption.

On those facts, the Court concluded that the state court’s

finding that the taxes were paid voluntarily was without

any fair or substantial support. Ward also recognized that

state procedural bars in force when the claim was filed

may be applied in a suit to recover taxes. 253 U.S. at 25.

C. THERE IS NO MERIT TO PETITIONER’S

OTHER ARGUMENTS.

Petitioner’s heavy reliance upon McKesson overlooks

the fact that the instant case involves a 1938, pre-Bacchus

statute which everyone considered to be constitutional,

while McKesson involved a post-Bacchus statute which

made only cosmetic changes to the prior statute and thus

violated clearly established law. McKesson, 496 U.S. at

46.

Beam’s other arguments are equally without merit.

For example, Beam erroneously asserts that certain Geor-

gia cases which generally involved § 48-2-35, e.g., peti-

tion, p. 24, impliedly precluded Beam from pursuing

~*~ Beam also misunderstands the Florida remedial situation

which this Court interpreted in McKesson to be inadequate. See,

e.g., FS.A. § 72.011 (authorizing appeals from assessments of

various taxes, but omitting alcohol taxes [imposed under chap-

ters 564 and 565)}).

——_e aaa

other, distinct statutory and judicial remedies. Beam’s

additional efforts to inject the Reich case into the instant

one, for example by asserting at p. 30 of the petition that

Reich imposed a protest requirement upon Beam in the

instant matter, are baseless. Alsc in citing the Heublein

trial court decision (App. P) denying temporary injunc-

tive relief, Beam neglects to point out that the manufac-

turer did not appeal that decision, but merely pursued its

claim for a declaratory judgment on the constitutional

issue, which it obtained.

CONCLUSION

For all of the foregoing reasons, Respondents respect-

fully submit that the Petition for Writ of Certiorari to the

Supreme Court of Georgia should be denied.

Respectfully submitted,

Davip A. RUNNION

Senior Assistant Attorney General

(Counsel of Record

for Respondents)

MicHaet J. Bowers

Attorney General

Danie. M. Formsy

Senior Assistant Attorney General

Attorneys for Respondents

Georgia Department of Law

132 State Judicial Building

40 Capitol Square, S.W.

Atlanta, Georgia 30334-1300

(404) 656-3340

No. 93-1140

a a

In The

Supreme Court of the United States

October Term, 1993

JAMES B. BEAM DISTILLING CO.,

Petitioner,

STATE OF GEORGIA; ZELL MILLER, individually and

as Governor of the State 6f Georgia; MARCUS E

COLLINS, individually and as Georgia State Revenue

Commissioner; and CLAUDE L. VICKERS, individually

and as Director of the Fiscal Division of the

Department of Administrative Services,

Respondents

On Petition For Writ Of Certiorari

To The Supreme Court Of Georgia

——________— @ --—_—__

APPENDIX TO BRIEF IN OPPOSITION

TO PETITION FOR WRIT OF CERTIORARI

o—_—______—_

TABLE OF CONTENTS OF THE APPENDIX

Page

pa yt ae ed ee ee ere 1-1

oe Ee Cae ee ei 2-1

Appendix 3 - O.C.GA. § 3-2-35 ©. o.oo boli cccccc. 3-1

Pes © =~ COELGA.. © Eee 6 ci es vec iie testes 4-]

Append 5 - OCA. § 9-46-10 .. on. ec ciedisvees. 5-1

Appendix 6 - O.C.G.A. § 9-11-15(a), (b), & (c)...... 6-1

a FS Ga len Do occ es sv ecsensccssees 7-1

Appendix 8 — O.C.G.A. § 50-13-10.......... aes

Appendix 9 - O.C.G.A. § 50-13-13 .................. 9-]

Appendix 10 - O.C.G.A. § 50-13-19............... 10-1

Appendix 11 - O.C.G.A. § 50-13-20............... 11-1

Appendix 12 —- Ga. Revenue Rule 560-1-1-.10...... 12-1]

Appendix 13 - Ga. Revenue Rule 560-1-1-.11...... 13-1

Appendix 14 —- Ga. Revenue Rule 560-1-1-.12...... 14-1

Appendix 15 — Ga. Revenue Rule 560-1-1-.13...... 15-1

Appendix 16 —- Ga. Revenue Rule 560-1-1-.14...... 16-1

Appendix 17 — Ga. Revenue Rules Chp. 560-2-9... 17-1

}-1

APPPENDIX 1

O.C.G.A. § 3-2-13. Issuance of refunds or credits for

taxes paid or stamps purchased.

(a) The commissioner may issue refunds or credits

for taxes paid by or due from a wholesaler or, in the case

of taxes on distilled spirits, may issue refunds or credits

for stamps purchased by a manufacturer, distiller, or

wholesaler when it can be shown to the commissioner ’s

satisfaction that any of the following events have

occurred

(1) Alcoholic beverages have been

received by the wholesaler through an error in

shipment and the alcoholic beverages are

returned to the shipper prior to any sale by the

wholesaler in this state;

(2) Alcoholix beverages ordered by the

wholesaler have been destroved in transit prior

to entry into the wholesaler’s warehouse or stor

age area;

(3) Alcoholic beverages which are unfit for

consumption upon receipt have been received

by the wholesaler and the alcoholic beverages

are returned to the shipper or destroyed prior to

any sale by the wholesaler in this state

(4) Alcoholic bev erages have been

destroyed while in the possession of a whole-

saler within the state by an act of God, such as

tire, flood, lightning, wind, or other natura!

calamity; or

(5) Wines have been sold bv the whole

saler for delivery and consumption outside the

state, provided the sale and delivery shall in al!

ey.

respects comply with the requirements of Code

Section 3-6-26.1.

(b) Any manufacturer, distiller, or wholesaler

receiving, a refund or credit for stamps purchased, in

every case where the cost of the stamps has been charged

or paid by the wholesaler, shall refund or credit to the

wholesaler an amount equal to the credit or refund

allowed by the commissioner

2-1

APPENDIX 2

O.C.G.A. § 3-2-14. Limitations on refunds.

If, in the opinion of the commissioner, any refund

application filed by an applicant for refund of taxes paid

pursuant to this title contains a false statement or if the

applicant is indebted to the state, the commissioner shall

decline to approve the refund payment until the appli-

cant has complied with the laws of this state. Payment of

the refund shall be made, subject to this title, if the

commissioner finds that the applicant is justly entitled to

the refund. Nothing contained in this Code section shall

be construed so as to allow for a refund of any license fee

lawfully due or paid under this title.

3-1

APPENDIX 3

O.C.G.A. § 3-2-35. Seizure of contraband by commis-

sioner and agents; proceedings

upon seizure; hearing on entitle-

ment to seized items; appeals; dis-

position of items upon which taxes

have been paid.

(a) The commissioner and his agents shall seize and

take possession of any contraband found in the posses-

sion of any person in violation of this title.

(b) Upon seizure, the commissioner or his agent

shall give a receipt to the person from whom the contra-

band property was seized, if known, identifying the

property seized and indicating from whom seized and

the place of seizure.

(1) Filed in the office of the commissioner

and shall be a public record open to public

inspection; and

(2) Posted at the courthouse of the county

in which the contraband was seized.

(d) Any person desiring to make claim to the con-

traband property shall file a claim with the commissioner

at his office in Atlanta within ten days from the day of

seizure. The commissioner, within 30 days of receipt of

any such claim, shall afford the claimant a hearing in

which to show his entitlement to the seized items. The

burden of proof at such hearing shall be upon the claim-

ant to establish his claim to the items seized and to show

compliance with or justification for noncompliance with

this Code section. The commissioner shall enter a written

3-2

order granting or denying the claim within 30 days from

the date of the hearing.

(e) An appeal from the commissioner’s order may

be taken to the Superior Court of Fulton County by filing

with the commissioner, within 15 days from the date of

the decision, a notice of appeal to the Superior Court of

Fulton County. The appeal shall be based upon the record

made before the commissioner; and the commissioner,

upon the filing of a notice of appeal, shall transmit the

record and appropriate documents to the superior court

within 30 days from the date of the filing of notice of

appeal. The superior court shall review the record for

errors of law, violation of constitutional or statutory pro-

visions, violation of the statutory authority of the agency,

lawfulness of the procedure, lack of any evidence to

support the decision, and arbitrariness and abuse of dis-

cretion. However, the court shall not substitute its judg-

ment for that of the hearing officer as to the weight of

evidence on questions of fact.

(f) All alcoholic beverages upon which the taxes

have been paid to either this state or any other state shall

be disposed of as follows:

(1) In the case of malt beverage, the seized

goods shall be destroyed by the commissioner

or his authorized agent;

(2) In the case of wine, the seized goods

shall be sold by the commissioner at public sale,

except that, where seized wine is determined by

the commissioner to be unfit for human con-

sumption, it shall be destroyed;

(3) In the case of distilled spirits, the

seized goods shall be sold by the commissioner

3-3

at public sale, except that, where seized distilled

spirits are determined by the commissioner to

be unfit for human consumption, the distilled

spirits shall be destroyed.

(z) This Code section shall not apply to unlawfully

manufactured alcoholic beverages.

4-1

APPENDIX 4

O.C.G.A. § 3-4-152. Submission of labels; designation

of sales territories and exclusive

wholesale distributors; approval

by commissioner.

(a) Every manufacturer or shipper shipping dis-

tilled spirits for the first time into the state shall:

(1) Submit to the commissioner one label

for each brand of distilled spirits to be shipped

for the first time by the manufacturer or shipper

into this state;

(2) Designate in the application for regis-

tration the sales territories for each of its brands

sold in this state; and

(3) Name one licensed wholesaler in each

territory who shall be the exclusive distributor

of the brand within the territory.

(b) Designations of wholesalers and wholesalers’

territories as provided in this Code section shall be ini-

tially approved by the commissioner and shall not be

changed or initially disapproved except for cause. The

commissioner shall determine cause after a hearing under

regulations promulgated by the commissioner for such

purposes.

5-1

APPENDIX 5

O.C.G.A. § 9-4-10. Equity jurisdiction not impaired.

Nothing in this chapter is intended to impair the

equity jurisdiction of the superior courts of the state.

6-1

APPENDIX 6

O.C.G.A. § 9-11-15(a), (b) & (c). Amended and supple-

mental pleadings.

(a) Amendments. A party may amend his pleading as

a matter of course and without leave of court at any time

before the entry of a pretrial order. Thereafter the party

may amend his pleading only by leave of court or by

written consent of the adverse party. Leave shall be freely

given when justice so requires. A party may plead or

move in response to an amended pleading and, when

required by an order of the court, shall plead within 15

days after service of the amended pleading, unless the

court otherwise orders.

(b) Amendments to conform to the evidence. When

issues not raised by the pleadings are tried by express or

implied consent of the parties, they shall be treated in all

respects as if they had been raised in the pleadings. Such

amendment of the pleadings as may be necessary to

cause them to conform to the evidence and to raise these

issues may be made upon motion of any party at any

time, even after judgment; but failure so to amend does

not affect the result of the trial of these issues. If evidence

is objected to at the trial on the ground that it is not

within the issues made by the pleadings, the court may

allow the pleadings to be amended and shall do so freely

when the presentation of the merits of the action will be

subserved thereby and the objecting party fails to satisfy

the court that the admission of the evidence would preju-

dice him in maintaining his action or defense upon the

merits. The court may grant a continuance to enable the

objecting party to meet the evidence.

6-2

or defense asserted in the amended pleading arises out of

the conduct, transaction, or occurrence set forth or

attempted to be set forth in the original pleading, the

amendment relates back to the date of the original plead-

ing. An amendment changing the party against whom a

claim is asserted relates back to the date of the original

pleadings if the foregoing provisions are satisfied, and if

within the period provided by law for commencing the

action against him the party to be brought in by amend-

ment (1) has received such notice of the institution of the

action that he will not be prejudiced in maintaining his

defense on the merits, and (2) knew or should have

known that, but for a mistake concerning the identity of

the proper party, the action would have been brought

against him.

7-1

APPENDIX 7

O.C.G.A. § 48-3-1. Execution for collection of money

due the state; affidavit of illegality.

The commissioner may issue an execution for the

collection of any tax, fee, license, penalty, interest, or

collection costs due the state. The execution shall be

directed to all and singular sheriffs of this state or to the

commissioner or his authorized representatives and shall

command them to levy upon the goods, chattels, lands,

and tenements of the taxpayer. Each sheriff shall execute

the execution as in cases of writs of execution from the

superior courts. Whenever any writ of execution has been

issued by the commissioner, the taxpayer, in order to

obtain a determination of whether the tax is legally due,

may tender to the levying officer his affidavit of illegality

to the execution and, upon his payment of the tax if

required as a condition precedent by the law levying the

tax or upon his giving a good and solvent bond in such

an amount to cover the total of any adverse judgment

plus costs where the law does not require the payment of

the tax as a condition precedent, the levying officer shall

return the affidavit of illegality, except as otherwise pro-

vided by law, to the superior court of the county of the

taxpayer's residence. The affidavit of illegality’ shall be

summarily heard and determined by the court.

8-1]

APPENDIX 8

O.C.G.A. § 50-13-10. Declaratory judgment on validity

of rules; venue for actions.

(a) The validity of any rule may be determined in

an action for declaratory judgment when it is alleged that

the rule of its threatened application interferes with or

impairs the legal rights of the petitioner. A declaratory

judgment may be rendered whether or not the petitioner

has first requested the agency to pass upon the validity of

the regulation in question.

(b) The agency shall be made a party to the action

and a copy of the petition shall be served on the Attorney

General. The action shall be brought in the Superior

Court of Fulton County or in the superior court of the

county of residence of the petitioner. When the petitioner

is a corporation, the action may be brought in the Supe-

rior Court of Fulton County or in the superior court of

the county where the petitioner maintains its principal

place of doing business in this state. All actions for

declaratory judgment, however, with respect to any rule

of the Public Service Commission must be brought in the

Superior Court of Fulton County.

in this Code section shall be in accordance with Chapter 4

of Title 9, the “Declaratory Judgment Act.”

OO Soe.

9-1

APPENDIX 9

O.C.G.A. § 50-13-13. Opportunity for hearing in con-

) tested cases; notice; counsel; sub-

poenas; record; revenue cases.

(a) In addition to any other requirements imposed

by common law, constitution, statutes, or regulations:

(1) In any contested case, all parties shall

be afforded an Opportunity for hearing after

reasonable notice served personally or by mail;

(2) The notice shall include:

(A) A statement of the time, place, and

nature of the hearing;

(B) A statement of the legal authority

and jurisdiction under which the hearing is

to be held;

tion of the statutes and rules involved;

(D) A short and plain statement of the

matters asserted. If the agency or other

party is unable to state the matters in detail

at the time, the notice may be limited to a

statement of the issues involved. Thereafter,

upon application, a more definite and

detailed statement shall be furnished; and

(E) A statement as to the right of any

party to subpoena witnesses and documen-

tary evidence through the agency;

(3) Opportunity shall be afforded all par-

ties to be represented by legal counsel and to

respond and present evidence on all issues

involved;

9-2

(4) Unless precluded by law, informal dis-

position may be made of any contested case by

stipulation, agreed settlement, consent order, or

default;

(5) Unless specifically precluded by stat-

ute, in addition to the agency, any contested

case may be held before any agency representa-

tive who has been selected and appointed by the

agency for such purpose. Before appointing a

hearing representative, the agency shall deter-

mine that the person under consideration is

qualified by reason of training, experience, and

competence;

(6) The agency, the hearing officer, or any

representative of the agency authorized to hold

a hearing shall have authority to do the follow-

ing: administer oaths and affirmations; sign and

issue subpoenas; rule upon offers of proof; regu-

late the course of the hearing, set the time and

place for continued hearings, and fix the time

for filing briefs; dispose of motions to dismiss

for lack of agency jurisdiction over the subject

matter or parties or for any other ground; dis-

pose of motions to amend or to intervene; pro-

vide for the taking of testimony by deposition or

interrogatory; and reprimand or exclude from

the hearing any person for any indecorous or

improper conduct committed in the presence of

the agency or the hearing officer;

(7) Subpoenas shall be issued without dis-

crimination between public and private parties.

When a subpoena is disobeyed, any party may

apply to the superior court of the county where

the contested case is being heard for an order

requiring obedience. Failure to comply with

such order shall be cause for punishment as for

asic ii

9-3

contempt of court. The costs of securing the

attendance of witnesses, including fees and

mileage, shall be commuted and assessed in the

same manner as prescribed by law in civil cases

in the superior court;

(8) A record shall be kept in each con-

tested case and shall include:

(A) All pic idings, motions, and inter-

mediate rulings;

(B) A summary of the oral testimony

plus all other evidence received or consid-

ered except that oral proceedings or any

part thereof shall be transcribed or recorded

upon request of any party. Upon written

request therefor, a transcript of the oral pro-

ceeding or any part thereof shall be fur-

nished to any party of the proceeding. The

agency shall set a uniform fee for such ser-

vice;

noticed;

(D) Questions and offers of proof and

rulings thereon;

(E) Proposed findings and exceptions;

(F) Any decision (including any ini-

tial, recommended, or tentative decision),

opinion, or report by the officer presiding at

the hearing; and

(G) All staff memoranda or data sub-

mitted to the hearing officer or members of

the agency in connection with their consid-

eration of the case; and

9-4

(9) Findings of fact shall be based exclu-

sively on the evidence and on matters officially

noticed.

(b) Except in cases in which a hearing has been

demanded under Code Section 50-13-12, subsection (a) of

this Code section and the other provisions of this chapter

concerning contested cases shall not apply to any case

arising in the administration of the revenue laws, which

case is subject to a subsequent de novo trial of the law

and the facts in the superior court.

10-1

APPENDIX 10

O.C.G.A. § 50-13-19. Judicial review of contested cases.

(a) Any person who has exhausted al! administra-

tive remedies available within the agency and who is

aggrieved by a final decision in a contested case is enti-

tled to judicial review under this chapter. This Code

section does not limit utilization of or the scope of judi-

cial review available under other means of review,

redress, relief, or trial de novo provided by law. A prelim-

inary, procedural, or intermediate agency action or ruling

is immediately reviewable if review of the final agency

decision would not provide an adequate remedy.

(b) Proceedings for review are instituted by filing a

petition within 30 days after the service of the final

decision of the agency or, if a rehearing is requested,

within 30 days after the decision thereon. The petition

may be filed in the Superior Court of Fulton County or in

the superior court of the county of residence of the peti-

tioner. When the petitioner is a corporation, the action

may be brought in the Superior Court of Fulton County

or in the superior court of the county where the petitioner

maintains its principal place of doing business in this

State. All proceedings for review, however, with respect

to orders, rules, regulations, or other decisions or direc-

tives of the Public Service Commission must be brought

in the Superior Court of Fulton County. Copies of the

petition shall be served upon the agency and all parties of

record. The petition shall state the nature of the peti-

tioner’s interest, the fact showing that the petitioner is

aggrieved by the decision, and the ground as specified in

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subsection (h) of this Code section upon which the peti-

tioner contends that the decision should be reversed or

modified. The petition may be amended by leave of court.

agency rule with respect to motions for rehearing or

reconsideration after a final agency decision or order, the

filing of such a motion shall not be a prerequisite to the

filing of any action for judicial review or relief; provided,

however, that no objection to any order or decision of any

agency shall be considered by the court upon petition for

review unless such objection has been urged before the

agency.

(d) The filing of the petition does not itself stay

enforcement of the agency decision. Except as otherwise

provided in this subsection, the agency may grant, or the

reviewing court may order, a stay upon appropriate

terms for good cause shown. In contested cases involving

a license to practice medicine or a license to practice

dentistry in this state, a reviewing court may order a stay

or an agency may grant a stay only if the court or agency

makes a finding that the public health, safety, and welfare

will not be harmed by the issuance of the stay.

(e) Within 30 days after the service of the petition or

within further time allowed by the court, the agency shall

transmit to the reviewing court the original or a certified

copy of the entire record of the proceeding under review.

By stipulation of all parties to the review proceedings, the

record may be shortened. A party unreasonably refusing

to stipulate to limit the record may be taxed by the court

for the additional costs. The court may require or permit

subsequent corrections or additions to the record.

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(f) If, before the date set for hearing, application is

made to the court for leave to present additional evidence

and it is shown to the satisfaction of the court that the

additional evidence is material and there were good rea-

sons for failure to present it in the proceedings before the

agency, the court may order that the additional evidence

be taken before the agency upon conditions determined

by the court. The agency may modify its findings and

decision by reason of the additional evidence and shall

file that evidence and any modifications, new findings, or

decisions with the reviewing court.

(g) The review shall be conducted by the court

without a jury and shall be confined to the record. In

cases of alleged irregularities in procedure before the

agency, not shown in the record, proof thereon may be

taken in the court. The court, upon request, shall hear

oral argument and receive written briefs.

(h) The court shall not substitute its judgment for

that of the agency as to the weight of the evidence on

questions of fact. The court may affirm the decision of the

agency or remand the case for further proceedings. The

court may reverse or modify the decision if substantial

rights of the appellant have been prejudiced because the

administrative findings, inferences, conclusions, or deci-

sions are:

(1) In violation of constitutional or statu-

tory provisions;

(2) In excess of the statutory authority of

the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

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(5) Clearly erroneous in view of the reli-

able, probative, and substantial evidence on the

whole record; or

(6) Arbitrary or capricious or charac-

terized by abuse of discretion or clearly unwar-

ranted exercise of discretion.

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APPENDIX 11

O.C.G.A. § 50-13-20. Review of final judgment.

An aggrieved party may obtain a review of any final

judgment of the superior court under this chapter by the

Court of Appeals or the Supreme Court, as provided by

law. In contested cases involving a license to practice

medicine or a license to practice dentistry in this state,

the filing of an application for appeal or a notice of

appeal shall not by itself stay enforcement of the agency

decision. In such cases, the superior court which consid-

ered the petition for judicial review or the Court of

Appeals or the Supreme Court may order a stay only if

such court makes a finding that the public health, safety,

and welfare will not be harmed by the issuance of the

Stay.

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APPENDIX 12

Ga. Revenue Rule 550-1-1-.10. Procedure for Declaratory

Rulings.

Any person wishing to file a petition for a declara-

tory ruling as to the applicability of a statute or rule or

order pursuant to Section 12 of the Administrative Pro-

cedure Act shall submit three copies of the petition, in

writing, to the Department of Revenue, State Office

Building, Atlanta, Georgia, stating all of the facts, includ-

ing the names of those parties involved in the fact situa-

tion, the amount of tax involved and a presentation of the

legal issue sought to be resolved. The Department will

not issue a declaratory ruling on a hypothetical fact situa-

tion and any ruling requested must affect a specific fact

situation and specific parties.

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APPENDIX 13

Ga. Revenue Rule 560-1-1-.11. Taxpayers Demand for

Hearing.

(1) Any taxpayer desiring a hearing in any con-

tested case may demand such a hearing by petitioning

the Commissioner for such a hearing.

(2) The petition must be in writing and marked or

labeled on the front thereof “DEMAND FOR HEARING”.

The taxpayer must file an original and two copies of the

petition in person or by mail addressed to the State

Revenue Commissioner, State Office Building, Atlanta,

Georgia.

(3) The petition must state:

(a) the names of all parties involved;

(b) the act or failure to act complained of;

(d) the amount of the tax involved;

(e) in what respect such taxpayer is

aggrieved;

(f) the grounds to be relied upon as a basis

for the relief demanded;

(g) the relief requested.

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APPENDIX 14

Ga. Revenue Rule 560-1-1-.12. Informal Conference.

Informal conferences may be had with the Commis-

sioner or Unit Director or other employee at the discre-

tion of the Department. An informal conference is not a

hearing as defined in the Administrative Practice Act and

will not prejudice the rights of any taxpayer or the

Department.

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APPENDIX 15

Ga. Revenue Rule 560-1-1-.13. Hearings in Contested

Cases.

Upon receipt of a “DEMAND FOR HEARING” (See

Rule 560-1-1-.11) The [sic] Commissioner will refer the

matter in writing to the hearing officer or representative

of the agency who will hold the hearing demanded. The

date and place of the hearing will be set by such hearing

officer or agency representative who will notify all par-

ties involved.

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APPENDIX 16

Ga. Revenue Rule 560-1-1-.14. Rules of Practice.

Contested cases which are not subject to a subse-

quent trial of the law and facts de novo in Superior Court

shall be conducted in accordance with the requirements

of the Georgia Administrative Practice Act. Generally

cases instituted by the Department of Revenue are subject

to subsequent de novo trial.

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APPENDIX 17

GA. REVENUE RULES CHP. 560-2-9.

ALCOHOLIC BEVERAGE LICENSE HEARINGS

560-2-9-.01 Applicability of These Rules.

The rules in this Chapter shall apply to and govern

only those administrative hearings regarding alcoholic

beverage licenses as follows:

(a) Any hearing to be held as a result of any citation

against any holder of an alcoholic beverage license issued

under the provisions of the Georgia Alcoholic Beverage

Code for the alleged violation of any law, rule or regula-

tion concerning the manufacture, sale, use, Possession or

disposition of alcoholic beverages in this State.

(b) Any hearing requested or afforded as the result

of the denial of any application, or the refusal to issue or

renew any alcoholic beverage license issued under the

provisions of the Georgia Alcoholic Beverage Code.

trative hearings arising out of the Alcoholic Beverage

Code which are governed by and conducted under the

Provisions of the Georgia Administrative Procedure Act.

560-2-9-.02 Persons Authorized To Hold Hearings;

Authority of Hearing Officer.

Administrative hearings referenced in these rules

will be held by a Hearing Officer appointed by the Com-

missioner to hear such cases. When any person other than

the Commissioner acts as Hearing Officer in such mat-

ters, the Hearing Officer’s actions, decisions and orders

shall be deemed to be on behalf of the Commissioner and

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effective as though taken by the Commissioner, subject to

the appeals procedures as hereinafter provided. The

Hearing Officer shall be empowered to exercise the same

degree of authority and to do the same acts as hearing

officers empowered under the Georgia Administrative

Procedure Act, O.C.G.A. § 50-13-13.

560-2-9-.03 Nature of the Proceeding; Hearing Pro-

cedure; Burden of Proof.

The hearings held under these Rules shall be only as

formal as is necessary to preserve order and be compati-

ble with the principles of justice. Where the Department

is the charging party, a representative shall first present

the Department's case and the licensee or applicant will

then have the opportunity to present his case, to rebut the

allegations made against him and present whatever

defenses he has. All parties shall have the right to be

represented by legal counsel and to subpoena witnesses

and documentary evidence through the agency. The par-

ties shall have the right to respond and present evidence

on all issues involved and to cross examine all witnesses.

The standard of proof on all issues in the hearing shall be

a preponderance of the evidence and a determination will

be made on the basis of the competent evidence pre-

sented at the hearing. Except in such matters wherein the

burden of proof is upon a specific party as provided by

law, such burden of proof shall be upon the charging or

petitioning party.

560-2-9-.04 Evidence; Official Notice.

The rules of evidence in hearings covered by this

Chapter shall substantially be as follows:

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(a) Irrelevant, immaterial, or unduly repetitious evi-

dence shall be excluded. The rules of evidence as applied

in the trial of civil non-jury cases in the superior courts

shall be followed as far as practicable. When necessary to

ascertain facts not reasonably susceptible of proof under

such rules, evidence not admissible thereunder may be

admitted, except where precluded by statute, if it is of a

type commonly relied upon by reasonably prudent men

in the conduct of their affairs;

(6b) Documentary evidence may be received in the

form of copies or excerpts if the original is not readily

available. Upon request, parties shall be given an oppor-

tunity to compare the copy with the Original or have it

established as documentary evidence according to the

rules of evidence applicable to the superior courts of this

state;

shall be required for a full and true disclosure of the facts;

(d) Official notice may be taken of judicially recog-

nizable facts and generally recognized technical facts or

records within the agency's specialized knowledge. The

parties shall be notified of any material so noticed and

shall be afforded the opportunity to contest such mate-

rial.

560-2-9-.05 Executive Orders.

As soon as possible after the close of a hearing, the

Hearing Officer shall issue an Executive Order in the case

and forward same to the Enforcement Section of the

Alcohol and Tobacco Tax Unit for service and execution.

The Order shall contain the determination of the Hearing

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Officer and any penalties to be imposed as a result of the

proceeding. Unless the execution of the Order is stayed

by the Commissioner or Hearing Officer, the execution of

the Order is to be effective on the date specified in the

Order or upon service of the Order if no other effective

date is so specified.

560-2-9-.06 Intra-Agency Appeal Procedure; Post

Hearing Motions.

The tollowing two-step appeal procedure shall be the

exclusive administrative remedy for appealing decisions

entered pursuant to these regulations.

(a) Request for Reconsideration: A licensee or appli-

cant who is aggrieved by the Executive Order entered by

the Hearing Officer, may appeal by filing a Request for

Reconsideration with the Hearing Officer who heard the

case no later than 10 days after service. The Hearing

Officer shall review the request and thereafter either

deny the request or modify the initial Executive Order by

an Order on Reconsideration.

(b) Motion for Review: Provided a timely Request for

Reconsideration was filed with the initial Hearing Officer,

a licensee or applicant shall have 10 days from the date of

receipt of the Hearing Officer’s Order on Reconsideration

(or denial of request), to file with the State Revenue

Commissioner, a written Motion for Review. Such motion

shall set forth a concise statement of the basis upon which

the appeal is made together with supporting argument

setting forth any enumeration of erroneous conclusions of

law or determination and any claim that the Executive

Order contains an exercise of discretion or policy which is

of such importance that the Commissioner should, in his

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discretion, review. No evidence outside the record shall

be considered. After due consideration and as soon as

practicable, the Commissioner or his designee shall either

§rant or deny the Motion for Review. If the Motion is

denied, the Hearing Officer’s Executive Order shall auto-

matically become the Final Decision of the Agency. If the

Motion is granted, the Commissioner will either remand

the case to the Hearing Officer for additional proceedings

or issue a Final Order either modifying or upholding the

Executive Order. Except in the case of an Order remand-

ing the case, either the Commissioner’s Final Order, or

the Commissioner’s denial of a Motion for Review

entered pursuant to this Procedure shall constitute final

agency action and shall not be further appealable within

the Revenue Department.

of a Request for Reconsideration or Motion for Review

does not automatically, of itself, Stay the execution and

enforcement of any Order of the Hearing Officer or Com-

missioner. However, a request to stay the execution and

enforcement of any Order may be made with the Request

for Reconsideration or Motion for Review and the Hear-

ing Officer or Commissioner may grant such request to

stay upon appropriate terms for good cause shown.

(d) Waiver of Administrative Appeal: The failure of

any party to follow the intra-agency appeal procedure as

outlined in this Rule shall constitute a waiver of agency

appeal rights and the Hearing Officer’s Executive Order

Shall automatically become the Final Order of the Com-

missioner 10 days after service of the initial Order.

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560-2-9-.07 Continuances and Postponements.

Matters set for hearing may be continued or post-

poned within the sound discretion of the Hearing Officer

upon timely motion by either party or by the Hearing

Officer on his own motion.

560-2-9-.08 Subpoena Forms; Service.

Either party may obtain subpoena forms from the

Hearing Officer by making a timely request for same. The

service, proof of service and enforcement of subpoenas

shall be as provided by law and shall be the respon-

sibility of the party requesting the subpoena.

560-2-9-.09 Transcripts of Hearing.

Any party may request that the hearing be conducted

before a court reporter. The request shall be in writing

and include an agreement by the requesting party that he

shall pay the costs incurred by the request or that he shall

procure at his own cost and on his own initiative, the

court reporting services for the hearing. Regardless of

who makes the arrangements or requests the transcript be

made, the original transcript of the proceedings shall be

submitted to the Hearing Officer prior to the close of the

hearing record if such transcript is to be made part of the

record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.