PETER KIEWIT SONS v DEPT OF REVE
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No. 12754 I N T E SUPREME C U T O THE STATE O M N A A H OR F F OTN 1974 PETER KIEWIT SONS ' CO. Corporation, ,a P l a i n t i f f and A p p e l l a n t , DEPARTMENT O REVENUE and t h e T X APPEAL F A BOARD O T E STATE O M N A A J. M R E F H F O T N , OLY COOPER, Chairman, HELEN PETERSON and R Y J. A WAYRYNEN, a s members t h e r e o f , Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , Honorable P e t e r G. Meloy, Judge p r e s i d i n g . Counsel of Record : For Appellant : G a r l i n g t o n , Lohn and Robinson, Missoula , Montana Lawrence F. Daly argued and Sherman V. Lohn appeared, Missoula, Montana. For Respondents : Terence B. Cosgrove argued, Helena, Montana Poore, McKenzie & Roth, B u t t e , Montana Robert A. Poore argued, B u t t e , Montana Submitted: Decided: Filed : e&B 2 11975 September 11, 1974 fEB 2 1 1975 ! & . J u s t i c e Wesley C a s t l e s d e l i v e r e d t h e Opinion o f t h e C o u r t . T h i s i s a n a p p e a l by p l a i n t i f f from a summary judgment f o r defendant granted a f t e r a hearing. On J a n u a r y 1 0 , 1973, t h i s C o u r t d e c i d e d c a u s e No. 12199, P e t e r K i e w i t S o n s ' Co. v . S t a t e Board o f E q u a l i z a t i o n , e t a l . , 1 6 1 Mont. 1 4 0 , 505 P.2d 1 0 2 , where w e u p h e l d t h e v a l i d i t y of C h a p t e r 35, T i t l e 8 4 , R.C.M. 1 9 4 7 , a s amended. On J u l y 1 8 , 1973, p l a i n t i f f - a p p e l l a n t , h e r e i n a f t e r re- f e r r e d t o a s K i e w i t , f i l e d a c o m p l a i n t i n L e w i s and C l a r k County d i s t r i c t c o u r t , i d e n t i c a l t o t h e c o m p l a i n t i n c a u s e No. 12199, d i f f e r i n g o n l y i n amounts o f t a x e s p a i d a t d i f f e r e n t t i m e s . Kiewit s o u g h t a r e c o v e r y of t a x e s p a i d and a d e c l a r a t i o n o f u n c o n s t i t u t i o n a l i t y of Chap. 35, T i t l e 8 4 , R.C.M. Defendants-respondents, 1 9 4 7 , a s amended. hereinafter referred t o a s the Department o f Revenue, moved t o d i s m i s s t h e c o m p l a i n t on t h e res g r o u n d s o f - a d j u d i c a t a , i n t h a t t h e o r i g i n a l K i e w i t c a s e con- trolled. The motion t o d i s m i s s was l a t e r g r a d u a t e d u n d e r Rule 1 2 ( b ) , M.R.Civ.P., t o a motion f o r summary judgment. K i e w i t ' s p o s i t i o n i s t h a t t h i s Court d e c l a r e d t h e law t o be v a l i d o n l y i f e n f o r c e d i n a c e r t a i n manner. Then, K i e w i t r e a s o n s , s i x months l a t e r , i n J u l y o f 1973, i t c o u l d d e m o n s t r a t e t h a t t h e l a w was i n v a l i d b e c a u s e t h e manner o f e n f o r c e m e n t d i d n o t f o l l o w g u i d e l i n e s l a i d o u t by t h i s C o u r t . a r a t h e r t o r t u o u s reasoning: ~ i e w i t ngages i n e The d e c i s i o n o f t h i s C o u r t i n up- h o l d i n g t h e v a l i d i t y of t h e p u b l i c c o n t r a c t o r s t g r o s s r e c e i p t s t a x was c o n d i t i o n a l . These c o n d i t i o n s w e r e , a c c o r d i n g t o ~ i e w i t , (1) t h a t p u b l i c c o n t r a c t o r s r w e r e exempt from competency r e q u i r e - m e n t s of t h e A c t , and ( 2 ) t h a t t h e l a w c o u l d n o t r e s u l t i n r e v e n u e being r a i s e d . Then K i e w i t a r g u e s : (1) The Department of Revenue c u r r e n t - l y e n f o r c e s t h e e n t i r e l a w a g a i n s t p u b l i c and p r i v a t e c o n t r a c t o r s a l i k e and ( 2 ) t h e s t a t e c o l l e c t s money i n e x c e s s of c r e d i t s and r e f u n d s and t h u s i n s t e a d o f b e i n g a r e v e n u e e n f o r c i n g measure, i t i s a c t u a l l y a r e v e n u e r a i s i n g measure. - 2 - A s t o K i e w i t ' s f i r s t c o n t e n t i o n , i f t h e r e be a problem i t i s s t r i c t l y an a d m i n i s t r a t i v e one and d o e s n o t , i n o u r view, a p p r o a c h a c o n s t i t u t i o n a l problem. Kiewit c h a r g e s t h e r e h a s been i n t e r f e r e n c e w i t h f e d e r a l highway a d m i n i s t r a t i o n procurement activities. T h i s may be s o , b u t we a r e u n a b l e t o see where a f e d e r a l - s t a t e c o n f l i c t a t t h e a d m i n i s t r a t i v e l e v e l makes a s t a t e law u n c o n s t i t u t i o n a l . A s t o K i e w i t ' s second p o i n t , i t may be t h a t K i e w i t would be e n t i t l e d t o a r e f u n d o r some o t h e r a d m i n i s t r a t i v e remedy, b u t i t i s o b v i o u s t h a t Kiewit s e e k s b u t one thing--a unconstitutionality. d e c l a r a t i o n of Judge Meloy found t h e o r i g i n a l K i e w i t d e c i s i o n res a d j u d i c a t a on t h e i s s u e of c o n s t i t u t i o n a l i t y and we affirm. K i e w i t i n s i s t s t h a t t h e o n l y b a s i s f o r t h i s C o u r t ' s con- c l u s i o n t h a t t h e Act was n o t d i s c r i m i n a t o r y a s t o p u b l i c c o n t r a c t o r s was t h a t i f t h e Act were p r o p e r l y e n f o r c e d , it would r e s u l t i n a "washout"; t h a t i s , r e f u n d s of p e r s o n a l p r o p e r t y t a x e s and g c o n t r a c t o r s ' income t a x e s would o f f s e t t h e 1% r o s s r e c e i p t s t a x . K i e w i t r e a d s o u r o p i n i o n much t o o n a r r o w l y . W held t h e r e t h a t e a r e a s o n a b l e c l a s s i f i c a t i o n f o r t a x p u r p o s e s l a y between p r i v a t e and p u b l i c c o n t r a c t o r s . The o r i g i n a l K i e w i t c a s e i n v o l v e d p r o c e e d s from a n Army Corps of E n g i n e e r s c o n t r a c t d a t e d October 9 , 1970. A t t h a t time, a s p o i n t e d o u t i n t h e o r i g i n a l Kiewit o p i n i o n , p r o v i s i o n # 5 8 ( f ) p r o h i b i t e d t h e c o n t r a c t o r from t a k i n g a d v a n t a g e of c r e d i t s a v a i l a b l e under t h e p r o v i s i o n s of s e c t i o n 84-3514, R.C.M. 1947. Be- c a u s e of t h a t p r o v i s i o n and because of i g n o r a n c e and i n d i f f e r e n c e , many c o n t r a c t o r s were n o t a p p l y i n g f o r c r e d i t s t h e y were e n t i t l e d to. The Army Corps of E n g i n e e r s c o n t r a c t d a t e d May 2 8 , 1971, had a s i m i l a r p r o v i s i o n , #66, which p r o h i b i t e d c o n t r a c t o r s from t a k i n g advantage of c r e d i t s . However, on December 1 5 , 1971, t h e Corps n o t i f i e d K i e w i t t o o b t a i n a l l r e f u n d s and c r e d i t s a v a i l a b l e under t h e Montana law and t o i g n o r e g e n e r a l prov i s i o n #66. So, now, K i e w i t i s s e e k i n g a l l c r e d i t s and r e f u n d s . The i n s t a n t c a s e c o n c e r n s g r o s s r e c e i p t t a x e s p a i d o v e r and above any c r e d i t s and r e f u n d s . Kiewit c i t e s S t a t e ex r e l . Schultz-Lindsay Construction Company v . S t a t e Board of E q u a l i z a t i o n , 145 Mont. 380, 403 P.2d 635, f o r t h e p r o p o s i t i o n t h a t a g r o s s r e c e i p t t a x on n o n r e s i d e n t c o n t r a c t o r s i s a r b i t r a r y and u n r e a s o n a b l e . In the original Kiewit c a s e w e d i s c u s s e d S c h u l t z - L i n d s a y and d i s t i n g u i s h e d it and w e w i l l n o t r e p e a t t h e d i s c u s s i o n h e r e . I n Garrett F r e i g h t l i n e s , I n c . v . Montana R a i l r o a d and P u b l i c S e r v i c e Cornmln, 1 6 1 Mont. 482, 491, 507 P.2d 1 0 4 0 , dec i d e d March 1 5 , 1973, j u s t two months a f t e r t h e o r i g i n a l Kiewit c a s e , t h i s Court i n a 3 t o 2 d e c i s i o n held a s t a t u t e , a s s e s s i n g .575 of 1 p e r c e n t of g r o s s o p e r a t i n g r e v e n u e on l i c e n s e d p u b l i c c a r r i e r s while e ~ e m p t i n g ~ d i r e c t l y competing p r i v a t e c a r r i e r s and exempt c a r r i e r s , t o be u n c o n s t i t u t i o n a l l y a r b i t r a r y and d i s criminatory. There t h e C o u r t s a i d : " A l l t h i s g o e s t o show t h e v a s t d i f f e r e n c e i n f a c t s i t u a t i o n h e r e from t h a t i n P e t e r K i e w i t S o n s ' Co. v . S t a t e Board of E q u a l i z a t i o n , 1 6 1 Mont. 1 4 0 , 505 P.2d 102. I n t h a t c a s e a c o m p l a i n t was r a i s e d a s t o t h e p u b l i c c o n t r a c t o r s 1 l i c e n s e a c t b e i n g unc o n s t i t u t i o n a l because t h e levy w a s n o t uniform and was d i s c r i m i n a t o r y . W t h e r e h e l d t h a t s i n c e e i t a p p e a r e d t h a t a l l p u b l i c c o n t r a c t o r s had t o pay t h e t a x , t h a t a l l members of t h e c l a s s were t r e a t e d a l i k e . Under t h e f a c t s t h e r e we a l s o h e l d t h a t a d i s t i n c t i o n between p u b l i c and p r i v a t e c o n t r a c t o r s was n o t a r b i t r a r y and c a p r i c i o u s ; i t b e i n g c l e a r from t h e r e c o r d t h a t t h e p u b l i c c o n t r a c t o r s ' license a c t w a s intended t o o p e r a t e a s a revenue e n f o r c i n g measure a s p o i n t e d o u t i n t h e o p i n i o n and a l i k e s i t u a t i o n d i d not appear a s t o p r i v a t e contractors." I n G a r r e t t t h e u n f a i r n e s s of t h e t a x a s between competing b u s i n e s s e s was shown. I n t h e i n s t a n t c a s e t h e r e i s no u n f a i r n e s s a s between competing c o n t r a c t o r s . A l l p u b l i c c o n t r a c t o r s are treated alike. We have discussed the position of Kiewit on the merits. The original Kiewit decision is res adjudicata since the parties, issues, and facts are all the same in their relevant particulars. The trial court concluded that the only factual differences were inconsequential against the impact of the doctrines of res adjudicata, collateral estoppel or stare decisis. We agree. We affirm the judgment of the district court. We concur: , Justices /
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