Burlington Northern Railroad v. Board of Supervisors of Adair County

*73HARRIS, Justice.

A railroad prevailed in a federal court challenge to Iowa’s scheme for taxing personal property and thereafter brought this mandamus action to compel refunds from defendant counties. The trial court denied relief upon finding the railroad had failed to exhaust its administrative remedies. Because we think the railroad is entitled to the refunds, we reverse and remand.

Plaintiff, Burlington Northern, is a railroad subject to the jurisdiction of the interstate commerce commission. Defendants are boards of supervisors in thirty-one Iowa counties in which Burlington Northern has operated.

Iowa law provides that railroad property, unlike other property, is not assessed locally for taxation. Under Iowa Code chapter 434, the department of revenue assesses and values the property of each rail carrier. The department then certifies the valuations to the board of supervisors of each county. Each county auditor is certified a percentage of a rail carrier’s total statewide valuation, based upon the number of rail miles for the carrier in that county. The auditor then computes the tax levy for the following year and forwards it to the county treasurer, who then collects the tax.

This dispute is rooted in legislation adopted in 1973 which gave preferential treatment to personal property. See 1973 Iowa Acts ch. 255. One form of preference was the “rolling back” of the assessed value of all personal property to 1973 levels. Iowa Code § 427A.11 (1985). A second preference was to grant credits against the assessed value of personal property. Iowa Code §§ 427A.2, .9. Under the statutory scheme all property traditionally considered personal property which is owned by a railroad is nevertheless taxed as real property. Iowa Code § 427A.l(l)(h).

Burlington Northern filed suit in the United States district court against the director of the Iowa department of revenue, claiming the tax scheme violated section 306(l)(d) of the railroad revitalization and regulatory reform act of 1976, 49 U.S.C. section 11503 (“4-R” act). The 4-R act prohibits states from taxing property of railroads differently from the manner in which it taxes other commercial and industrial property. The federal district court held the director was withholding the benefits of chapter 427A from Burlington Northern in violation of the 4-R act. Burlington N.R.R. v. Bair, 584 F.Supp. 1229 (S.D.Iowa 1984). Thus, that portion of Burlington Northern’s property which is commonly characterized as personal property is to be given the benefits of chapter 427A. This ruling was affirmed on appeal. Burlington N.R.R. v. Bair, 766 F.2d 1222 (8th Cir.1985).

After prevailing in federal court Burlington Northern filed a written request with each board of supervisors in the thirty-one counties in which it operates, seeking a refund for that portion of its 1979, 1980 and first half of 1981 taxes which the federal court determined had been illegally exacted. The various boards of these counties refused to order the refunds. This suit in mandamus followed.

The trial court dismissed the petition for lack of subject matter jurisdiction and entered judgment for the defendants.

I. The parties claim support for their conflicting positions in two unrelated statutory provisions. In seeking to sustain the trial court’s view the counties point to provisions for an administrative appeal by taxpayers who are dissatisfied with their assessment. Iowa Code section 421.1 establishes' the state tax review board within the department of revenue to consider taxpayers’ appeals from their assessments under the administrative procedure Act (Iowa Code ch. 17A). Under Iowa Code section 441.37(2) aggrieved taxpayers can bring such an appeal.

It is clear under the scheme that an aggrieved taxpayer must protest the assessment through the administrative process, including appeal, before bringing the complaint to court. Farmers Grain Dealers Ass’n v. Woodward, 334 N.W.2d 295, 300 (Iowa 1983). The trial court based its dismissal of the present case on this principle.

*74The railroad points to a special refund statute. Iowa Code section 445.60 provides:

The board of supervisors shall direct the treasurer to refund to the taxpayer any tax or portion thereof found to have been erroneously or illegally exacted or paid, with all interest and costs actually paid thereon.

Cases interpreting this provision hold it creates a direct right. Mandamus will lie to compel a refund due under it and a pursual of administrative relief is not a condition precedent for such an action. Crown Concrete Co. v. Conkling, 247 Iowa 609, 617, 75 N.W.2d 351, 356 (1956); Morrison-Knudsen Co. v. State Tax Comm’n, 242 Iowa 33, 45-46, 44 N.W.2d 449, 456 (1950).

Contrary to the counties’ contention we think our Crown Concrete and Morrison-Knudsen holdings are still the law. These holdings were not vitiated by the 1975 adoption of the administrative procedure Act. The right to a tax refund under section 445.60 is a direct one that arises when a tax has been “found to have been erroneously or illegally exacted.”

It is difficult to imagine facts more squarely within the parameters of the section. The finding of entitlement was entered by a federal court and affirmed on appeal. The finding was that the taxes in question were exacted in contravention of a federal statute. They were therefore illegal. The federal court was specific in determining, not only that taxes had been illegally exacted from Burlington, but also how much:

We hold that section 306(l)(d) prohibits the Director from excluding fifty percent of Burlington’s Iowa property from the benefits of taxation as personal property.

Burlington N.R.R. Co., 766 F.2d at 1224-25.

It is now suggested that boards may be faced with other questions appropriate for administrative action. The spector is raised of unspecified time bars or the need to reevaluate the property on a basis comparable to other taxpayers for the years in question. We think it is wholly inappropriate to accord the administrative agency the power of review over the clear federal court adjudication. All that remains are mathematical computations, which, though they are perhaps complex, scarcely qualify as demanding technical expertise of an administrative agency.

The railroad is entitled to recover for the taxes which have been adjudged illegally exacted. We should not alter or compromise that adjudication by committing the winner of the lawsuit to work again through the administrative process. The trial court erred in concluding this action is barred by the failure to exhaust administrative remedies.

II. Because of its holding the trial court did not consider three other grounds urged in defense of the mandamus action. The counties put forth three such arguments: (1) the federal court’s ruling should be prospective only; (2) Burlington Northern failed to establish that the director’s action was arbitrary and capricious; and (3) Burlington Northern is estopped from bringing this action. A ruling should not be disturbed on appeal if it was proper on another ground which was urged in trial court. Buchhop v. General Growth Properties, 235 N.W.2d 301, 305 (Iowa 1975). We find no merit in any of the three alternative claims.

In contending the federal court’s holding should be prospective only the counties argue that the government has an interest in allocating its resources and must know when it acts on an expenditure that the necessary funds are available and not subject to loss through tax refund. G. Heileman Brewing Co. v. City of La Crosse, 105 Wis.2d 152, 162, 312 N.W.2d 875, 880 (1981). We rejected this contention in Commercial Nat’l Bank v. Board of Supervisors, 168 Iowa 501, 504, 150 N.W. 704, 705 (1915). After holding a statutory scheme had resulted in illegal exaction of taxes from a national bank, we said “nor is there anything in the argument that the decision declaring the taxing statute invalid should not operate retroactively.”

*75We do not think the suit should have been dismissed because the railroad did not establish that the department of revenue’s action was arbitrary and capricious. The counties contend the railroad had such a burden. The flaw in this argument is that the railroad is not challenging the director’s judgment in assessing the property’s valuation. Rather, Burlington Northern contends that Iowa’s tax scheme resulted in the illegal exaction of taxes and that the counties refused to order refunds under section 445.60. The railroad did not allege, nor does it have the burden of proving, that the director abused his discretion in the assessments of Burlington Northern’s property.

The counties last argument is that the railroad is barred from the refund under principles of collateral estoppel. In this contention the counties seize on the federal court’s refusal to directly order the refunds now sought. The contention does not square with the basis for the reversal. The federal court determined it lacked jurisdiction to order the refund. Burlington N.R.R., 584 F.Supp. at 1232. Where a judgment is dismissed for lack of jurisdiction it ordinarily does not bar another action on the same claim.1 Restatement (Second) of Judgments § 20 (1982). The federal court’s dismissal of the refund request does not bar the railroad from pursuing the same request in state court.

We conclude that the judgment of the trial court must be reversed and the case remanded for issuance of a writ directing payment of the refund.

REVERSED AND REMANDED.

All Justices concur except CARTER, SCHULTZ, and NEUMAN, JJ., who dissent and ANDREASEN, J., who takes no part.

. Such a dismissal is preclusive as to the jurisdictional issue in the same forum. Bascom v. Jos. Schlitz Brewing Co., 395 N.W.2d 879, 882 (Iowa 1986). This exception does not preclude parties from thereafter seeking relief in the proper forum.