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Gallagher v. State6/24/2005
2005 Opinion No. 83
District court's judgment and order dismissing plaintiff's case, affirmed.
This is an appeal from a judgment denying the claims of Idaho resident Ralph Gallagher, who purchases and smokes cigarettes. He alleges the 2003 legislative enactment of the one percent sales and use tax (House Bill 400aaS) and the increase of the cigarette tax (House Bill 264aaS, aaS) are unconstitutional. The district court found that Gallagher lacked standing to challenge the cigarette tax and that the sales tax legislation was constitutionally enacted. We agree with the district court's determination and therefore affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Gallagher sued for declaratory judgment and injunctive relief requesting the district court to find the one percent sales and use tax (House Bill 400aaS) and the increase to the cigarette tax (House Bill 264aaS, aaS) unconstitutional. Gallagher sued the State, the Governor, the Idaho State Legislature, the Idaho State Tax Commission, the Idaho State Treasurer, the Idaho State Auditor, and the Idaho State Controller (hereinafter collective referred to as the State). Gallagher argued that both tax measures had been enacted in violation of Article III, § 14 of the Idaho Constitution because the constitutional provision requires all bills for raising revenue originate in the House of Representatives. Gallagher asserts that both bills originated in the Senate. Gallagher's complaint asked for class certification of all Idaho's residents or citizens who have either 1) paid the one percent sales and use tax or 2) purchased cigarettes and paid the additional $.29 per pack.
Within a month of filing the complaint, Gallagher filed a motion for summary judgment and a motion for class certification. Shortly thereafter, the State filed a motion to dismiss, challenging both Gallagher's standing to bring the action and the merits of the substantive allegations. Gallagher then motioned the district court to amend his complaint to add Howard Davis and Howard's Tackle Shoppe as plaintiffs.
The State did not object to the class certification for those residents or citizens who paid the one percent sales and use tax. The State did, however, object to the certification of the class relating to the cigarette tax because there was no class representative with standing to represent a class of persons upon whom the legal incidence of the cigarette tax fell.
On March 22, 2004, the district court granted the State's motion to dismiss. The district court held that Gallagher lacked standing to challenge the cigarette tax because he failed to establish any peculiar injury as a result of the challenged legislation and because he was not subject to the legal incidence of the cigarette tax. The district court further held that even if Gallagher had standing, both tax measures were constitutional because, although substantially amended by the Senate, the revenue bills were introduced in the House. The district court deemed it unnecessary to discuss Gallagher's motion to add additional parties or his motion for class certification. Gallagher appealed.
Shortly after the decision, the State motioned the district court for attorney fees. On June 24, 2004, the district court issued its memorandum decision and order awarding the State $6,263 in attorney fees pursuant to I.C. §§ 12-117 and/or 12-121, and I.R.C.P. 11 against Gallagher and his counsel. The award for attorney fees by the district court has not been reduced to a judgment.
STANDARD OF REVIEW
This case comes to the Court on review of an order granting the State's motion to dismiss pursuant to Rule 12(b)(6), for f
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