Sarah Gross, individually and on behalf of all others similarly situated v. State of Louisiana, through the Louisiana Department of Revenue, Kimberly L. Robinson, Secretary, Louisiana Department of Revenue

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

2023 CA 0142

SARAH GROSS, INDIVIDUALLY AND ON BEHALF OF THE CLASS

VERSUS

STATE OF LOUISIANA THROUGH THE LOUISIANA DEPARTMENT
OF REVENUE, AND KIMBERLY L. ROBINSON, SECRETARY,
LOUISIANA DEPARTMENT OF REVENUE

Judgment Rendered. SEP 15 2023

19th Judicial District Court
In and for the Parish of East Baton Rouge
State of Louisiana
Case No. C65I320

The Honorable Wilson E. Fields, Judge Presiding

Lawrence J. Centola, III Counsel for Plaintiffs/Appellees

Jason Z. Landry Sarah Gross ( Putative Class Plaintiffs)
New Orleans, Louisiana
and

G. Brice Jones
Slidell, Louisiana

Christopher K. Jones Counsel for Defendant/ Appellant
Sydnee D. Menou Louisiana Department of Revenue &
Baton Rouge, Louisiana Kevin Richard, as Successor to Kimberly
Robinson, as Secretary for the
Louisiana Department of Revenue

BEFORE: GUIDRY, C. J., CHUTZ, AND LANIER, JJ.
LANIER, J.

The Louisiana Department of Revenue, Kevin Richard, as successor to

Kimberly Robertson, Secretary, Louisiana Department of Revenue (" the

Department"), seek review of the district court' s judgment certifying a class action,

represented by plaintiff, Sarah Gross, despite the absence of subject matter

jurisdiction over the claims and Ms. Gross' failure to establish that the criteria of

La. Code Civ. P. art. 591 have been met. Because we find the district court was

without subject matter jurisdiction, we vacate the judgment and dismiss the appeal.

FACTS AND PROCEDURAL HISTORY

In March 2015, Ms. Gross contracted with a solar panel company to

purchase and install a solar energy system (" System") at a price of $25, 000. 00.

According to Ms. Gross, she was incentivized by the solar energy systems tax

credit (" solar tax credit") afforded in La. R.S. 47: 6030, which was in effect at the

time she installed her System. At the time Ms. Gross installed her System, La.

R.S. 47: 6030( B)( 1) allowed a solar tax credit for the purchase of a System equal to

fifty percent of the first $ 25, 000. 00 of the cost of a System provided the System

was purchased and installed between January 1, 2008, and January 1, 2018.

In the 2015 Regular Session, the Legislature amended La. R.S. 47: 6030,

placing caps on the total recoverable amount of solar tax credits available to all

qualified taxpayers to be awarded as follows: ( 1) a maximum of $10 million for

solar tax credits claimed on tax returns filed on or after July 1, 2015, and before

July 1, 2016; ( 2) a maximum of $ 10 million for solar tax credits claimed on tax

returns filed on or after July 1, 2016, and before July 1, 2017; and ( 3) a maximum

of $ 5 million for solar tax credits claimed on tax returns filed on or after July 1,

2017. See La. R.S. 47: 6030, as amended by 2015 La. Acts, No. 131, § 1 (" Act

131 "). Act 131 further provided that the grant of credits was to be done on a first-

come, first-served basis,

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 In early 2016, Ms. Gross submitted her 2015 tax return seeking a solar tax

credit for the System. On July 1, 2016, the Department announced that for the

fiscal year 2015- 2016, it had exceeded the $ 10 million cap on solar tax credits by

14 million. On July 18, 2016, the Department notified Ms. Gross that prior to the

receipt of her application, the cap limits were met for both the 2015- 2016 and

2016- 2017 fiscal years. Ms. Gross was further notified that her solar tax credit was

being reviewed for the 2017- 2018 fiscal year, which had a cap of $5 million. On

August 25, 2016, Ms. Gross was notified that her claim had priority status for the

2017- 2018 fiscal year and that her 2015 tax return would be processed without the

application of the solar tax credit. Further, the Department informed Ms. Gross

that the 2017- 2018 fiscal year credit would be applied to her account and that any

resulting refund would be issued between August 15, 2017, and September 30,

2017.

On September 12, 2016, Ms. Gross, individually and as a representative of

the proposed class, filed a class action petition in the 19th Judicial District Court

naming the Department as a defendant. Ms. Gross alleged that under the version

of La. R.S. 47: 6030 applicable at the time her System was purchased and installed,

she obtained a vested right to a solar tax credit up to $ 12, 500. 00. Ms. Gross

alleged that the amended statute, which was made effective on June 19, 2015, was

a substantive law modifying and destroying Ms. Gross' vested right to a solar tax

credit for the System she purchased and installed. Alleging that this legislative

action was unconstitutional and in violation of her due process rights under the

state and federal constitutions, Ms. Gross sought a declaration that the retroactive

application of the statute, as amended by Act 131, was unconstitutional. Ms. Gross

sought recovery of the full amount of the solar tax credit of $ 12, 500. 00, plus

interest, consequential damages due to the delay and/ or denial of the solar tax

credit, and attorney fees and costs.

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 Ms. Gross, on behalf of the purported class, also made the following

allegations: ( 1) there were over 1, 500 affected taxpayers who purchased and

installed Systems prior to the effective date of the amendment to La. R. S. 47: 6030;

2) there were common issues of law and fact; ( 3) the claims of Ms. Gross were

typical of the claims of the purported class; ( 4) she would fairly and adequately

represent the class; and ( 5) that a class action procedure was the superior method

for the fair and efficient adjudication of the claims asserted.

On the same day Ms. Gross filed the petition, she also filed a motion for

class certification and propounded discovery. In her motion for class certification,

Ms. Gross defined the proposed class as follows:

All persons who purchased and installed a solar electric system at a
Louisiana residence in compliance with all of the requirements set
forth in La. R.S. 47: 6030 prior to June 19, 2015 ( the " Purchase"), the
effective date of the Louisiana Legislature' s passage of Act 131. during
the 2015 Regular Session amending La. R.S. 47: 6030, who thereby
obtained a vested right to a solar energy system tax credit as a result
of said Purchase and who: ( a) filed a tax return, otherwise complied
with the tax credit application requirements set forth in La. R.S.
47: 6030, and had any portion of their Purchase -related tax credit( s)
withheld or denied; or ( b) who timely file[ d] a tax return after the
fling of this petition and otherwise complied with the tax credit
application requirements set forth in La. R. S. 47: 6030, and who have
any portion of their Purchase -related tax credit(s) withheld or denied.

The Department opposed the motion for class certification and separately

filed multiple exceptions challenging Ms. Gross' petition on the basis of

prematurity, vagueness, no right of action, no cause of action, and lack of subject

matter jurisdiction. Following hearings on the exceptions, the district court denied

the exceptions raising the objections of vagueness, no right of action, and no cause

of action. The exceptions raising the objections of prematurity and lack of subject

matter jurisdiction were granted as to Ms. Gross' claim for payment of the solar tax

credit but denied as to her remaining claims. Thereafter, on April 25, 2017, the

district court granted Ms. Gross' motion for class certification.

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 The district court's April 25, 2017 judgment was subsequently vacated based

on this court's ruling in Ulrich v. Robinson, 2017- 1119 ( La. App. 1 Cir. l 1/ 1/ 18),

265 So. 3d 108, 115- 116 (" Ulrich I"). Gross v. State Through Louisiana

Department of Revenue, 2017- 0572 ( La. App. 1 Cir. 2/ 28119), 273 So. 3d 350,

356 (" Gross I"). Specifically at issue in Ulrich I was class certification of those

individuals who were denied the solar tax credit pursuant to La. R.S. 47: 6030. On

appeal, this court determined that while putative class members appealed their

respective claims to the Board of Tax Appeals (" BTA") within the appropriate time

period, the record was devoid as to whether the other purported class members

appealed to the BTA, making it unclear if each purported class member had

standing in the action. Ulrich I, 265 So.3d at 115. Thus, we reversed the district

court' s certification of the class and remanded for further proceedings. Ulrich I,

265 So. 3d at 116. Similarly, in Gross I, this court remanded the matter for a

determination of whether certification of a more restricted class may be

appropriate, noting that Ms. Gross could not represent the individuals whose

claims were denied and who did not seek review with the BTA. Gross I, 273

So. 3d at 356- 357.

Subsequently, following our remand in Ulrich I, that matter continued in the

district court on the matters of the constitutionality of Act 131, as well as the

Department's exceptions raising the objections of no right of action and mootness.

The district court granted the taxpayers' petition for declaratory judgment and

declared Act 131 unconstitutional because it retroactively deprived the taxpayers

of a vested property right. The court implicitly found the taxpayers had standing to

bring the constitutional claim and a justiciable controversy existed because the

constitutional issue was not moot. The Department sought a direct appeal to the

Louisiana Supreme Court. Ulrich v. Robinson, 2018- 0534 ( La. 3126119), 282

So. 3d 180, 184- 185 (" Ulrich II").

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 The Louisiana Supreme Court reversed, holding that the district court erred

in overruling the Department's exception raising the objection of mootness that was

filed based on a statutory amendment that cured the alleged constitutional issue

and rendered the instant controversy moot. Specifically, in 2017, the Louisiana

Legislature enacted 2017 La. Acts, No. 413, § 1, which provided additional funding

for solar tax credits (" Act 413"). The court held Act 413 remediated the alleged

unconstitutional aspect of Act 131, i.e., the taxpayers' claim that imposition of the

aggregate cap eliminated their right to receive solar tax credits by providing for full

repayment of the solar tax credits, albeit over a three- or four-year period. The

court found that there was no doubt that Act 413 corrected or cured the condition

of which the taxpayers complained, the deprivation of the solar tax credits by

virtue of the cap imposed in Act 131, because Act 413 mandated payment of the

full amount of the credit" to " any taxpayer whose claim for a credit was denied." L

Ulrich II, 282 So. 3d at 187- 188.

Following the supreme court's ruling in Ulrich II, the Department in the

instant case sought dismissal of Ms. Gross' petition by filing a motion for summary

judgment on the basis of mootness, The district court denied the motion, and this

court denied the Department' s application for supervisory review.' Thereafter, the

Department again unsuccessfully challenged the subject matter jurisdiction of the

court,

In January 2022, Ms. Gross filed an amended class action petition seeking

consequential damages suffered due to the " deferred or delayed payment" caused

by Act 131 including statutory interest, costs, and attorney fees, as well as a

See La. R.S. 47: 6030, as amended by Act 413.

2 After requesting briefing on the writ, this court denied the writ in a 2- 1 vote. Judge McDonald
dissented, noting " Due to the passage of [Act 413] [ Ms. Gross'] demand for payment of her tax
credit under the Louisiana Solar Energy Systems Tax Credit is now moot, and she is not
otherwise entitled to receive consequential damages." Gross v. State through Louisiana
Department of Revenue, 2019- 1536 ( La. App. 1 Cir. 716120) 2020 WL 3638783 ( unpublished
writ action), writ denied, 2020- 00965 ( La. 11/ 4/ 20), 303 So. 3d 642.

0
declaratory judgment as to the unconstitutionality of Act 131 and the retroactive

application of La. R.S. 47: 6030 as amended by Act 131. Thereafter, the matter

proceeded to hearing on December 5, 2022, on Ms. Gross' amended motion for

class certification, at which time the Department again challenged the district

court's subject matter jurisdiction, noting that as amended in 2019, 2020, and 2021,

La. R. S. 47: 1407 vests subject matter jurisdiction exclusively with the BTA over

any constitutional challenge of a tax statute. After considering the evidence

introduced by the parties and hearing the argument of counsel, the district court

granted the motion to certify, designating Ms. Gross as the class representative and

certifying the following defined class:

All Louisiana taxpayers who purchased and installed a solar electric
system at a Louisiana residence in compliance with all of the
requirements set forth in La. R. S. 47: 6030 prior to June 19, 2015 ( the
Purchase"), the effective date of the Louisiana Legislature' s passage

of Act 131 during the 2015 Regular Session amending La. R.S.
47: 6030, who had the payment of any portion of their Purchase -
related tax credit( s) withheld, delayed or deferred. Excluded from this
Class are all Louisiana taxpayers whose solar electric system tax
credit was denied and filed an appeal of that denial before the [ BTA],
and also those whose solar electric system tax credit was denied and
did not file an appeal of that denial before the [ BTA].

The district court signed a judgment on December 19, 2022, in accordance

with its findings. It is from this judgment that the Department has appealed,

arguing that the district court was divested of subject matter jurisdiction by

operation of La. R.S. 47: 1407, as amended, and that Ms. Gross failed to satisfy her

burden of proof on the essential elements of both La. Code Civ. P. art. 591( A) and

B) regarding class certification.'

SUBJECT MATTER JURISDICTION

Subject matter jurisdiction is a threshold issue insofar as a judgment

rendered by a court that has no jurisdiction over the subject matter of the action or

Because we find the district court lacked subject matter jurisdiction to consider Ms. Gross'
claims herein, we do not reach the merits of the issues concerning the class certification.

7
proceeding is void. See La. Code Civ. P. art. 3; Citizens Against Multi -Chem v.

Louisiana Dept. of Environmental Quality, 2013- 1416 ( La. App. I Cir. 5122114),

145 So. 3d 471, 474, writ denied, 2014- 1464 ( La. 10110114), 151 So. 3d 586.

Jurisdiction over the subject matter is the legal power and authority of a court to

hear and determine a particular class of actions or proceedings based upon the

object of the demand, the amount in dispute, or the value of the right asserted. La.

Code Civ. P. art. 2. Subject matter jurisdiction cannot be waived or conferred by

consent of the parties, and the lack thereof can be recognized by the court at any

time, with or without formal exception.' See La. Code Civ. P. arts. 3, 927( A)( 8)

and ( B). 1 IberiaBank v. Live Oak Circle Development, L.L.C'., 2012- 1636 ( La.

App. 1 Cir. 5113113), 118 So. 3d 27, 30.

The district courts have exclusive original jurisdiction over most matters,

and concurrent original jurisdiction with trial courts of limited jurisdiction. See

La. Const. art. V, § 16. Article VII, § 1 of the Louisiana Constitution vests the

power of taxation in the legislature, and article VII, §3( A) mandates the legislature

to " provide a complete and adequate remedy for the prompt recovery of an illegal

tax paid by a taxpayer." To fulfill its latter obligation, the legislature has provided

three remedies: ( 1) the Claims Against the State procedure, La. R. S. 47: 1481, et

seq.; ( 2) the Payment Under Protest procedure, La. R.S. 47: 1576, et seq.; and ( 3)

a We find no merit to Ms. Gross' argument that the Department's appeal should be limited to
whether her claim was properly certified as a class action by the district court. Appellate courts
have the duty to examine subject matter jurisdiction sua sponte, even when the parties do not
raise the issue. Board of Ethics in Matter of Savoie, 2017- 0077 ( La. App. 1 Cir. 817117), 224

So. 3d 1246, 1248- 1249. Moreover, as previously noted, at the hearing on the amended motion to
certify the class before the district court below, the Department did in fact raise the issue of the
amendments to La. R.S. 47: 1407 as they related to subject matter jurisdiction.
5 With the passage of 2023 La. Acts, No. 5, §§ 1 and 3 (" the Act"), the legislature has deleted the
objection of lack of subject matter jurisdiction from the objections raised through a declinatory
exception and added it to the list of peremptory exceptions found in La. Code Civ. P. art. 927.
See La. Code Civ. P. art. 925, Official Revision Comments 2023. The Act further amended
and reenacted Article 927 to provide as follows: " Once the objection of the lack of subject
matter jurisdiction is raised by the parties or noticed by the court on its own motion, the court
shall address the objection before ruling on any other matter." See La. Code Civ. P. art. 927( B).

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the Overpayment Refund procedure, La. R.S. 47: 1621, et seq. The legislature

created the BTA to act as an appeal board to hear and decide disputes between a

taxpayer and the collector of revenue. La. R. S. 47: 1401. . Moreover, pursuant to

La. Const. art. V, § 35, the BTA' s jurisdiction may be extended " by a law enacted

by a two-thirds vote of the elected members of each house of the legislature, to

matters concerning the constitutionality of taxes, fees, or other matters related to its

jurisdiction which jurisdiction may be concurrent with the district courts

concerning such matters."

Pursuant to La. R.S. 47: 1407, as amended, the jurisdiction of the BTA is

outlined as follows:

1) All matters
relating to appeals for the redetermination of

assessments, the determination of overpayments, payment under

protest petitions, or other matters within its jurisdiction, as provided in
R.S. 47: 1431 through 1438 or other applicable law.

2) All matters relating to the waiver of penalties, as provided in R.S.
47: 1451.

3)( a) All matters related to state or local taxes or fees.
b) All other jurisdiction otherwise provided by law, including
jurisdiction concerning ad valorem taxes pursuant to Subtitle III of
this Title, rules to cease business, ordinary collection suits, summary
tax proceedings, rules to seek uniformity of interpretation of common
sales and use tax law or local sales and use tax law, as provided in
R.S. 47: 337. 101( A)(2), and petitions concerning the validity of a
collector' s rules, regulations, or private letter rulings, as provided in
R.S. 47: 337. 102.

4) All matters relating to claims against the state, as provided in R.S.
47: 1481 through 1486.

5) Incidental demands authorized by law in any action pending
before the board in the same manner as in a district court pursuant to
Code of Civil Procedure Article 1031.

6) All matters relating to appeals of administrative hearings,

assessments, and refund denials by the Louisiana Sales and Use Tax
Commission for Remote Sellers.

7) A petition for declaratory judgment or other action relating to any
state or local tax or fee, concerning taxing districts and related

M
 proceeds, or relating to contracts related to tax matters; and including
disputes related to the constitutionality of a law or ordinance or
validity of a regulation concerning any related matter or concerning
any state or local tax or fee.

La. R.S. 47: 1407 ( as amended by Acts 2019, No. 365, § 1, eff. Nov. 18, 2019; Acts

2020, No. 278, § 1, eff. July 1, 2020; Acts 2021, No. 343, § 1, eff. Jan. 1, 2022).

Thus, as provided by the statute, the BTA is granted jurisdiction over "[ a] ll matters

related to state or local taxes or fees" and " petition[ s] for declaratory judgment or

other action[ s] relating to any state or local tax or fee ... or relating to contracts

related to tax matters; and including disputes related to the constitutionality of a

law ... concerning any related matter or concerning any state or local tax or fee."

As previously indicated, Ms. Gross' initial petition was filed on September

12, 2016, along with a motion for class certification, concerning her claims for

consequential damages caused by the delayed payment of a solar tax credit. Ms.

Gross sought a declaratory judgment that the retroactive application of La. R.S.

47: 6030, as amended by Act 131, is unconstitutional and sought recovery of the

full amount of her tax credit of $12, 500. 00, plus interest, consequential damages

due to the delay and/or denial of the credit, and attorney' s fees and costs. At that

time, La. R. S. 47: 1407 provided that the jurisdiction of the BTA extended to the

following:

1) All matters relating to appeals for the redetermination of

assessments, or for the determination of overpayments, or payment

under protest petitions, as provided in R.S. 47: 1431 through 1438.

2) All matters relating to the waiver of penalties, as provided in R.S.
47: 1451.

3) All matters related to other jurisdiction otherwise provided by law,
including rules to seek uniformity of interpretation of common sales
and use tax law or local sales and use tax law, as provided in R.S.
47: 337. 101( A)( 2).

4) All matters relating to claims against the state, as provided in R.S.
47: 1481 through 47: 1486.

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 5) Incidental demands authorized by law in any action pending
before the board in the same manner as in a district court pursuant to
Code of Civil Procedure Article 1031.

Thus, in 2016, Ms. Gross' claims in her class action petition did not fall within the

jurisdiction of the BTA but rather within the jurisdiction of the district court.

However, La. R.S. 47: 1407 was amended in 2019 to vest subject matter

jurisdiction with the BTA over "[ a] 11 matters related to state or local taxes or fees"

and " petition[ s] for declaratory judgment or other action[ s] relating to any state or

local tax or fee ... or relating to contracts related to tax matters; and including

disputes related to the constitutionality of a law ... concerning any related matter

or concerning any state or local tax or fee."

Because this court has previously stated that laws determining jurisdiction

are procedural, we find the amendments to La. R.S. 47: 1407 are procedural in

nature and must be afforded retroactive application. See Ransome v. Ransome,

99- 1291 ( La. App. 1 Cir. 1/ 21/ 00), 791 So. 2d 120, 122 n. 2. Additionally,

jurisdictional provisions apply from the date of their promulgation, to all lawsuits,

even those that bear upon facts of a prior date and to pending lawsuits. Id.;

American Waste and Pollution Control Company v. State, Department of

Environmental Quality, 597 So. 2d 1125, 1128- 1129 ( La. App. 1 Cir.), writs

denied, 604 So. 2d 1309, 1318 ( 1992). The amended statute herein vests exclusive

subject matter jurisdiction for matters such as those brought by Ms. Gross in her

class action petition with the BTA. Thus, in December 2022, when Ms. Gross'

amended motion for class certification was considered by the district court, the

district court was without subject matter jurisdiction to consider Ms. Gross' claims.

As such, its judgment must be vacated.
 CONCLUSION

For the reasons set forth herein, the December 19, 2022 judgment of the

district court is vacated. Because the district court lacked subject matter

jurisdiction, this court also lacks subject matter jurisdiction to consider the merits

of the appeal. See Metro Riverboat Associates, Inc. v. Louisiana Gaming

Control Bd., 2001- 0185 ( La. 10/ 16/ 01), 797 So. 2d 656, 663. Accordingly, this

appeal is dismissed. All costs associated with this appeal are assessed against

Sarah Gross, individually and on behalf of the class.

JUDGMENT VACATED; APPEAL DISMISSED.

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