Justia Georgia Supreme Court Opinion Summaries

Plaintiffs Lonnie Hollis and Mason’s World Bar & Grill, LLC, filed a putative class action against the City of LaGrange, alleging that the City imposed excessive mandatory charges for utilities services, which they argued constituted an unauthorized tax under the Georgia Constitution. The plaintiffs claimed that the charges generated profits exceeding the actual cost of providing the services and were used to raise general revenues for the City, effectively making them illegal taxes. They sought a refund of these alleged illegal taxes, a declaration that the charges were illegal, and an injunction to prevent the City from continuing to impose such charges.The trial court granted the City’s motion for judgment on the pleadings, ruling that the Georgia Constitution prohibited the court from regulating the utilities charges. The court concluded that because the Georgia Constitution prevents the General Assembly from regulating or fixing charges of public utilities owned or operated by municipalities, the court similarly lacked the authority to review the plaintiffs’ claims.The Supreme Court of Georgia reviewed the case and concluded that the trial court erred in its interpretation. The Supreme Court held that the constitutional provision in question, which restricts the General Assembly from regulating or fixing municipal utility charges, does not apply to the judicial branch. The plaintiffs’ claims required the court to exercise its judicial authority to determine whether the charges constituted illegal taxes, not to regulate or fix the charges. Therefore, the trial court’s ruling was vacated, and the case was remanded for further proceedings consistent with the Supreme Court’s opinion. The Supreme Court emphasized that the trial court must address the City’s motion for judgment on the pleadings without misinterpreting the constitutional limitations on its authority. View "Hollis v. City of LaGrange" on Justia Law

Appellant A. Thomas Jones challenged the City of Atlanta's imposition of charges through two ordinances, arguing that these charges, levied on the Department of Watershed Management (DWM) customers, are unlawful taxes. The ordinances in question impose a franchise fee on DWM's gross revenue and a payment in lieu of taxes (PILOT) on DWM's real property, with the collected sums deposited into the City's General Fund. Jones contended that these charges exceed the costs they purportedly cover and are instead used to generate general revenue, violating various constitutional and statutory provisions.The trial court initially dismissed Jones's suit on procedural grounds, but the Court of Appeals reversed this decision in part. Upon remand, the City moved for judgment on the pleadings, and Jones filed motions for partial summary judgment. The trial court granted the City's motion and denied Jones's motions, leading to this appeal. Jones argued that the trial court erred in its application of the standard of review and in its conclusions regarding the nature of the charges.The Supreme Court of Georgia reviewed the case and found that the trial court erred in granting the City's motion for judgment on the pleadings. The Supreme Court held that the trial court failed to treat Jones's allegations as true, particularly his claims that he paid the disputed charges, that the revenue generated from these charges grossly exceeded the associated costs, and that these costs were covered by other transfers from DWM to the City's General Fund. Consequently, the Supreme Court vacated the trial court's judgment on the pleadings and remanded the case for further proceedings.However, the Supreme Court affirmed the trial court's denial of Jones's motions for partial summary judgment. The Court concluded that Jones failed to demonstrate the absence of genuine disputes of material fact regarding whether the charges were taxes or fees and whether the revenue generated exceeded the associated costs. The case was remanded for reconsideration of Jones's claims under the proper standard of review. View "Jones v. City of Atlanta" on Justia Law

The Georgia Supreme Court granted certiorari in this case to decide whether revenue generated from the lease of a bona fide coin operated amusement machine (“COAM”) qualified as “gross revenues” exempt from taxation under OCGA § 48-8-3 (43). Funvestment Group, LLC, the lessee of the COAMs at issue and the owner of the location where the COAMs were available for play, argued that revenues generated from the lease of COAMs were considered “gross revenues” exempt from sales and use tax. The Court of Appeals concluded that the subject lease revenues were not “gross revenues” and that the exemption only applied to money inserted into COAMs for play. The Supreme Court concluded the Court of Appeals erred in reaching this conclusion, and thus reversed the Court of Appeals' judgment. View "Funvestment Group, LLC v. Crittenden" on Justia Law

In 2002, Douglas Coe, Jacqueline Coe, and GFLIRB, LLC (collectively the “Coes”) were involved in the sale of a company in which they held a substantial interest. Their accountants, BDO Seidman, LLP (“BDO”), advised them of a proposed tax strategy in which the Coes could invest in distressed debt from a foreign company in order to offset their tax obligations. In connection with the proposed tax strategy, BDO advised the Coes to obtain a legal opinion from an independent law firm, Proskauer Rose LLP (“Proskauer”). The Coes followed BDO’s advice, obtained a legal opinion from Proskauer, and claimed losses on their tax returns as a result. But in 2005, the Internal Revenue Service (“IRS”) initiated an audit, which ultimately led to a settlement in 2012. After settling with the IRS, the Coes filed suit against Proskauer in December 2015, asserting legal malpractice, breach of fiduciary duty, fraud, negligent misrepresentation, and other claims. After limited discovery on whether the statute of limitation barred the Coes’ claims, the trial court concluded that it did and granted summary judgment in favor of Proskauer, and the Court of Appeals affirmed. The Georgia Supreme Court concluded the Court of Appeals erred in determining that the Coes failed, as a matter of law, to exercise reasonable diligence to discover Proskauer’s allegedly fraudulent acts. Judgment was reversed and the matter remanded to the trial court for further proceedings. View "Coe, et al. v. Proskauer Rose, LLP" on Justia Law

In Case No. S21A0899, Lynnette Riley, the former State Revenue Commissioner, appealed the partial grant of summary judgment in favor of petitioner Georgia Association of Club Executives (“GACE”), contending that the trial court erred by permanently enjoining the enforcement of OCGA 15-21-201(1)(B) – one of the definitions of “adult entertainment establishment” – based on the court’s ruling that the provision was unconstitutionally vague. In Case No. S21X0900, GACE cross-appealed, contending the trial court erred in granting partial summary judgment in Riley’s favor on the remaining claims of GACE’s petition, arguing that OCGA 15-21-209, by imposing an annual assessment on adult entertainment establishments, violated constitutional due process and free speech protections. Although these appeals presented challenges to the constitutionality of state statutes, the Georgia Supreme Court did not address the merits of the appellant’s or the cross-appellant’s claims of error. Instead, the Court vacated the trial court’s summary judgment order and subsequent final judgment because the Court determined GACE’s action against Riley was moot when the trial court ruled. "Because Riley was no longer Revenue Commissioner at the time the trial court entered its summary judgment order and subsequent final judgment, an injunction against her in her individual capacity could not give GACE the relief it seeks. ... A court may not address the constitutionality of the tax at issue absent the presence of a proper defendant in the action." View "Riley v. Georgia Assn. of Club Executives., Inc." on Justia Law

This case arose from a taxpayer grievance concerning whether the Fulton County Board of Tax Assessors (the “Board”) had been diligent in determining that the Atlanta Falcons Stadium Company LLC (“StadCo”) had a usufruct interest in the Mercedez-Benz Stadium that was not subject to ad valorem taxation. In 2017, Albert Love and other Fulton County taxpayers (collectively, Appellants) sued the Board, the individual members of the Board, and the Board’s Chief Appraiser, seeking mandamus and other relief. Since then, the suit was dismissed, appealed to the Court of Appeals, remanded, amended to add claims and intervenors, then dismissed again. At issue in this appeal was whether the trial court properly dismissed Appellants’ fourth amended petition, which asserted claims for mandamus, declaratory and injunctive relief, and a refund of taxes paid. Appellants contended the trial court erred in dismissing the petition, allegedly sua sponte, arguing primarily that the trial court had applied an incorrect standard of review. They also contended the trial court erred in declining to find OCGA 10-9-10 unconstitutional. Finding no reversible error, the Georgia Supreme Court affirmed the trial court’s dismissal. View "Love et al. v. Fulton Cty. Bd. of Tax Assessors et al." on Justia Law

After approximately ten years of litigation, the Georgia Supreme Court granted a second petition for certiorari in a 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 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; and (3) AT&T’s claims amounted to a class action barred by the refund statutes. In its first certiorari review, the Georgia Supreme Court reversed that ruling, holding that the regulation, as properly construed, did not require dealers to return the sums collected before applying for a refund. 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. The issue presented in the second petition for certiorari review was whether plaintiffs lacked standing to file the refund claims. The Supreme Court determined AT&T was statutorily granted representational standing to recover wrongfully paid sums on behalf of and for the benefit of its customers. To the extent, therefore, that the Court of Appeals held that AT&T lacked standing to file a claim on behalf of its customers for any taxes for periods before May 5, 2009, the Court of Appeals’ judgment was erroneous and had to be reversed. View "New Cingular Wireless PCS, LLC v. Dept. of Revenue" on Justia Law

In its second appearance before the Georgia Supreme Court, the dispute between appellee Lowndes County Board of Tax Assessors (“the Board”) and eight partnerships which built and operated affordable housing apartment complexes (“Section 42 properties”) in Lowndes County (collectively, “Appellants”), with the help of federal and state Low Income Housing Tax Credits (“LIHTCs” or “Section 42 Tax Credits”), in connection with which they executed Land Use Restrictive Covenants. The dispute this time turned on the valuation of those tax credits when calculating ad valorem real property taxes. The Supreme Court determined the trial court had subject matter jurisdiction to decide this case, and that LIHTCs did not constitute “actual income” for purposes of OCGA 48-5-2 (3) (B) (vii) (II). Moreover, OCGA 48-5-2 (3) (B) (vii) (I) and (II) did not run afoul of the Georgia Constitution’s taxation uniformity provision. Accordingly, the Court reversed the judgment of the trial court. View "Heron Lake II Apartments, LP v. Lowndes County Board of Tax" on Justia Law

In this case’s previous appearance before the Georgia Supreme Court, the primary issue involved taxation of alcoholic beverages at the Hartsfield-Jackson Atlanta International Airport. Clayton County appealed the trial court’s partial grant of summary judgment to the City of College Park on claims the City was not receiving its statutorily mandated share of taxes collected on alcoholic beverages. When the parties could not resolve their dispute, the City filed a complaint naming as defendants the County and two businesses that operated within the Airport, Mack II, Inc. and General Wholesale Company (the “taxpayer defendants”). The complaint sought an interlocutory and permanent injunction against the County (as well as the taxpayer defendants), and a declaratory judgment as to the City’s and County’s division and collection of alcoholic beverage taxes, as well as the taxpayer defendants’ payment of those taxes. The complaint also asserted claims against the County for an accounting, unjust enrichment, attorney fees, and damages. Following a hearing, the trial court denied the County’s motion for judgment on the pleadings, finding that sovereign immunity does not apply to the City’s claims or the taxpayer defendants’ cross-claims for indemnity and contribution. The court granted the City’s motion for partial summary judgment on the declaratory judgment counts, finding that the Alcoholic Beverage Code, OCGA 3-3-1 et seq., permitted the City to impose alcoholic beverage tax only within its municipal limits and the County to impose such a tax only in the unincorporated areas of the County, that neither could impose and collect alcoholic beverage taxes within the other’s taxing jurisdiction, and that the taxpayer defendants had to submit tax monies only to the entity authorized to collect the funds. Ultimately, the Supreme Court vacated this judgment and remanded the case for consideration of the “threshold question of whether sovereign immunity applies at all in suits between political subdivisions of the same sovereign (like the City and the County).” The Supreme Court disagreed sovereign immunity did not apply to multiple issues raised by this case. The case was remanded for reconsideration. View "City of College Park v. Clayton County et al." on Justia Law

Cobb and Gwinnett Counties, Georgia, sued telephone companies for their failure to collect and remit to the Counties a charge imposed on subscribers to offset the cost of 911 services. The telephone companies raised various defenses to the Counties’ suits, including that the 911 charge was a tax that the Counties were not allowed to collect by a lawsuit like this one. The trial court rejected that argument and allowed the cases to proceed, but the Court of Appeals vacated that aspect of the trial court’s ruling and remanded because further development of the record was needed to determine whether the charge was a tax. The Georgia Supreme Court concluded the charge was indeed a tax regardless of more factual development, and the Counties lacked legal authority to collect that tax in this lawsuit. View "BellSouth Telecommunications, LLC v. Cobb County et al." on Justia Law