New Cingular Wireless PCS, LLC v. Dep't of Revenue

308 Ga. 729

843 S.E.2d 431

NEW CINGULAR WIRELESS PCS, LLC et al.

v.DEPARTMENT OF REVENUE et al.

S19G0802

Supreme Court of Georgia.

Decided: May 18, 2020

Bryan A. Vroon ; Margaret C. Wilson, for appellants.

Christopher M. Carr, Attorney General, W. Wright Banks, Jr., Deputy Attorney General, Alex F. Sponseller, Senior Assistant Attorney General, John S. Forbes, Assistant Attorney General, for appellees.

Boggs, Justice.

After nearly ten years of litigation, this Court granted a second petition for certiorari in this dispute over the refund of millions of dollars in Georgia sales and use taxes that allegedly violated a federal statute. In 2010, New Cingular Wireless PCS, LLC, and three other AT&T Mobility subsidiaries (collectively, "AT&T") filed refund claims with the Georgia Department of Revenue seeking the return of the sales and use taxes that AT&T had collected from its customers and turned over to the Department. In 2015, the Department denied the claims, and AT&T filed a complaint in DeKalb County Superior Court to compel the refunds.

In 2016, the trial court dismissed the complaint on three grounds: (1) a Georgia regulation required "dealers" like AT&T to return the sums collected from their customers before applying to the Department for a refund of the illegal taxes; (2) AT&T lacked standing to seek refunds of taxes for periods prior to May 5, 2009, the effective date of the General Assembly's amendment to the refund statutes to allow dealers to seek refunds on behalf of their customers, see Ga. L. 2009, p. 816, §§ 3, 4; and (3) AT&T's claims amounted to a class action barred by the refund statutes.

In 2017, the Court of Appeals affirmed the trial court's dismissal order on the first ground. See New Cingular Wireless PCS, LLC v. Ga. Dept. of Revenue , 340 Ga. App. 316, 797 S.E.2d 190 (2017) (‘‘ New Cingular I ’’). We granted certiorari and reversed that ruling, holding that the regulation, as properly construed, did not require dealers to return the sums collected before applying for a refund. See New Cingular Wireless PCS, LLC v. Ga. Dept. of Revenue , 303 Ga. 468, 471-474 (2), 813 S.E.2d 388 (2018) (‘‘ New Cingular II ’’). We also vacated the Court of Appeals’ judgment in part and remanded the case to the Court of Appeals with the direction to consider the second and third grounds for the trial court's dismissal order. See id. at 470 (1), 474 (3), 813 S.E.2d 388.

On remand, the Court of Appeals upheld the trial court's ruling that AT&T lacked standing to seek refunds for periods prior to the effective date of the 2009 amendments to the refund statutes allowing dealers to seek refunds on behalf of their customers. See New Cingular Wireless PCS, LLC v. Ga. Dept. of Revenue , 348 Ga. App. 516, 520 (1), 823 S.E.2d 833 (2019) (" New Cingular III "). See also OCGA §§ 48-2-35, 48-2-35.1 (d).¹ We granted AT&T's petition for certiorari, posing the following question: "Did the Court of Appeals err in holding that the plaintiffs lacked standing to file refund claims for periods prior to May 5, 2009?" For the reasons discussed below, we conclude that the Court of Appeals did err. We therefore reverse in part and we again remand this case to the Court of Appeals.

As amended in 2009, OCGA § 48-2-35 (a) provides in relevant part:

A taxpayer shall be refunded any and all taxes or fees which are determined to have been erroneously or illegally assessed and collected from such taxpayer under the laws of this state, whether paid voluntarily or involuntarily, and shall be refunded interest, except as provided in subsection (b) of this Code section.

Subsection (f) of the same Code section provides: "For purposes of all claims for refund of sales and use taxes erroneously or illegally assessed and collected, the term ‘taxpayer,’ as defined under Code Section 48-2-35.1, shall apply." Subsection (d) of OCGA § 48-2-35.1 provides:

Except as provided for in this subsection, for the purposes of all claims for refund of sales and use taxes erroneously or illegally assessed and collected, the term "taxpayer" as used in Code Section 48-2-35 shall mean a dealer as defined in Code Section 48-8-2 that collected and remitted erroneous or illegal sales and use taxes to the commissioner.²

In New Cingular III , the Court of Appeals correctly stated the general principle that "laws prescribe for the future" and "ordinarily cannot have a retrospective operation." (Citations, punctuation, and footnotes omitted.) 348 Ga. App. at 519 (1), 823 S.E.2d 833. The Court of Appeals also correctly recognized that "legislation which involves mere procedural or evidentiary changes may operate retrospectively; however, legislation which affects substantive rights may only operate prospectively," and that "a substantive law creates rights, duties, and obligations while a procedural law prescribes the methods of enforcing those rights, duties, and obligations." (Citations, punctuation, and footnotes omitted.) Id. at 520 (1), 823 S.E.2d 833. And the Court of Appeals correctly stated that "a statute does not operate retrospectively in its legal sense simply because it relates to antecedent facts." (Citation and punctuation omitted.) Id. at 519 (1), 823 S.E.2d 833.

However, in applying these principles to the facts here, the Court of Appeals reasoned that, because standing is the question of "whether the litigant is entitled to have the court decide the merits of the dispute or of particular issues," standing therefore is "an entitlement, or a substantive right," and that the 2009 amendments to the refund statutes thus created a substantive right and may not be applied retrospectively. (Citations, punctuation, and footnotes omitted; emphasis in original.) New Cingular III, 348 Ga. App. at 520 (1), 823 S.E.2d 833. This ultimate conclusion was erroneous.

Where the Court of Appeals went astray was in declaring that a statute broadening standing always and necessarily creates "a substantive right," so that such a statute "may only operate prospectively." (Citations, punctuation, and footnote omitted.) New Cingular III , 348 Ga. App. at 520 (1), 823 S.E.2d 833. It is true that, in order to maintain an action, a party "must establish standing to sue on the ground asserted, which requires showing an injury in fact that was caused by the breach of a duty owed by the defendants to the plaintiffs and that will be redressed by a favorable decision from the court." Ames v. JP Morgan Chase Bank , 298 Ga. 732, 738 (3) (b), 783 S.E.2d 614 (2016). See also Granite State Outdoor Advertising v. City of Roswell , 283 Ga. 417, 418-419 (1), 658 S.E.2d 587 (2008). But it does not follow that standing to sue is necessarily a substantive right. For example, standing may be granted at common law or by statute for the special purpose of representing others in the assertion of their claims. This is generally termed "representational standing." As the United States Supreme Court has observed,

the entire doctrine of "representational standing," of which the notion of "associational standing" is only one strand, rests on the premise that in certain circumstances, particular relationships (recognized either by common-law tradition or by statute) are sufficient to rebut the background presumption (in the statutory context, about [the legislature's] intent) that litigants may not assert the rights of absent third parties.

(Citations and footnotes omitted.) United Food & Commercial Workers Union Local 751 v. Brown Group , 517 U.S. 544, 557 (III) (C), 116 S.Ct. 1529, 134 L.Ed.2d 758 (1996) (noting common-law concept of the next friend as well as federal statutory provisions for representational standing).

OCGA § 9-11-17 (a) summarizes the instances under which a representative may bring an action in Georgia for the benefit of another:

An executor, an administrator, a guardian, a bailee, a trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may bring an action in his own name without joining with him the party for whose benefit the action is brought; and, when a statute so provides, an action for the use or benefit of another shall be brought in the name of the state.

Perhaps the most familiar instance of representational standing is found in OCGA § 9-11-17 (c) :

Whenever an infant or incompetent person has a representative, such as a general guardian, committee, conservator, or other like fiduciary, the representative may bring or defend an action on behalf of the infant or incompetent person. If an infant or incompetent person does not have a duly appointed representative, he may bring an action by his next friend or by a guardian ad litem.

Other statutory provisions permit certain State agencies and officials to assert legal claims on behalf of individuals. For example, the Department of Human Resources has standing under OCGA § 19-11-12 (d) (4) (B) to petition the superior court for child support modification, even when the State has no direct interest because the child is not receiving public assistance. See Falkenberry v. Taylor , 278 Ga. 842, 843, 607 S.E.2d 567 (2005). Similarly, the Attorney General or a district attorney has standing under OCGA § 53-12-174 to enforce the terms of a charitable trust in the interest of the beneficiaries. See Cronic v. Baker , 284 Ga. 452, 453-454 (1), 667 S.E.2d 363 (2008) (decided under former OCGA § 53-12-115 ). In none of these situations does a statute or common law grant to a representative a right to recover for itself, as opposed to for and on behalf of the real party in interest.³

Similarly here, contrary to the Court of Appeals’ assertion in New Cingular III , the "dealer" acquires no substantive "right" to a refund under OCGA § 48-2-35.1. Subsection (d) of that statute specifically defines as a "taxpayer" "a dealer as defined in Code Section 48-8-2 that collected and remitted erroneous or illegal sales and use taxes to the commissioner." (Emphasis...