Stennett v. State

MANSFIELD, Judge,

dissenting on Appellant’s Petition for Discretionary Review.

Appellant was indicted for the felony offense of possession of greater than five, but less than fifty, pounds of marihuana. Tex. Health and Safety Code § 481.121(b)-4. Subsequently, the Texas Comptroller of Public Accounts sent appellant a statement for taxes due, in the amount of $49,070.00, under applicable provisions of Chapter 159 of the Texas Tax Code, The Texas Controlled Substances Tax Act.1 The statement informed appellant the taxes were overdue, a late penalty had been assessed, and failure to pay the taxes then due might result in additional taxes and penalties being imposed. Appellant was also informed he was entitled to a hearing should he wish to contest the validity of the assessment against him.

Appellant did not request a hearing. He did, however, mail the Comptroller a cheek *919for $100, on which he wrote the word “tax.” It appears the Comptroller cashed the cheek, though the record does not conclusively demonstrate whether it was so cashed.

Appellant then filed an application for writ of habeas corpus in the 248th District Court, claiming the Double Jeopardy Clause of the Fifth Amendment to the United States Constitution barred the subsequent prosecution for marihuana possession due to his having paid tax on that marihuana under Texas Tax Code § 159.101. The trial court denied relief.

The Fourteenth Court of Appeals rejected appellant’s argument that assessment of the tax constituted punishment for possession of marihuana, thereby barring the prosecution of appellant subsequently for possession of the same marihuana that is the subject of the tax assessment. Stennett v. State, 905 S.W.2d 612 (Tex.App.—Houston [14th Dist.] 1993) (pet. refused). The United States Supreme Court summarily granted appellant’s petition for certiorari, vacated the judgment of the court of appeals, and remanded the cause to the court of appeals for further proceedings in light of Department of Revenue of Montana v. Kurth Ranch, 511 U.S. 767, 114 S.Ct. 1937, 128 L.Ed.2d 767 (1994). Stennett v. Texas, 513 U.S. 922, 115 S.Ct. 307, 130 L.Ed.2d 271 (1994).

On remand, the Fourteenth Court of Appeals reversed its prior judgment. Relying on Kurth Ranch, the court of appeals held that the prosecution of appellant for possession of marihuana was jeopardy-barred by the Fifth Amendment because appellant had already been punished by the imposition and partial collection of the tax on that same marihuana. Stennett v. State, 905 S.W.2d 612 (Tex.App.—Houston [14th Dist.] 1995). We granted the State’s petition for discretionary review to consider the following ground for review:

Whether the court of appeals erred in determining the Texas Controlled Substances [Tax] Act constitutes punishment for double jeopardy purposes in light of Department of Revenue of Montana v. Kurth Ranch because the Texas tax does not contain the two “unusual features” that were found controlling in Kurth Ranch.

The court of appeals considered five factors in determining that the Texas Controlled Substances Tax was punitive:

1. the tax is conditioned on commission of a crime;
2. the statute allows a tax assessment after the substance that is taxed is confiscated;
3. the rate of tax exceeds the value of the taxed substance making it similar in that respect to the Montana Tax (and a key factor in the Supreme Court’s finding the Montana tax was punishment);
4. The assessment of the tax on noncon-trolled substances that are misrepresented as controlled substances; and
5. The coordination between the Comptroller’s office and the prosecutor under Section 159.206 which, among other things, permits the Comptroller to compromise or settle taxes, interests and penalties otherwise due only with the written consent of the prosecutor.

Stennett, 905 S.W.2d at 613-614.

The State, in its brief, noted two differences between the Texas Controlled Substances Tax and the Montana tax. First, the Montana tax is imposed only on individuals arrested for possession or sale of controlled substances while the Texas tax is imposed on all individuals who illegally possess controlled substances. Second, the Montana tax is imposed only after the controlled substance is seized; the Texas tax is due and payable when the controlled substance comes into the individual’s possession.

The double jeopardy clause provides: “[N]or shall any person be subject for the same offence to be twice put in jeopardy of life or limb.” U.S. Const., Amendment V. The clause serves the function of preventing both “successive punishments and ... successive prosecutions.” United States v. Dixon, 509 U.S. 688, 696, 113 S.Ct. 2849, 2855, *920125 L.Ed.2d 556 (1993), citing North Carolina v. Pearce, 395 U.S. 711, 89 S.Ct. 2072, 23 L.Ed.2d 656 (1969). The protection against multiple punishments prohibits the State from “punishing twice, or attempting a second time to punish criminally for the same offense.” Witte v. United States, — U.S. -, -, 115 S.Ct. 2199, 2204, 132 L.Ed.2d 351, citing Helvering v. Mitchell, 303 U.S. 391, 399, 58 S.Ct. 630, 633, 82 L.Ed. 917 (1938).

In United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989) the Supreme Court addressed whether a civil sanction may be, in some instances, considered “punishment,” thereby implicating the Fifth Amendment’s Double Jeopardy Clause and barring a subsequent criminal prosecution of the person for the same offense or offenses for which he has been civilly sanctioned. In Halper, Halper was convicted of filing 65 Medicare false claims, and was sentenced to two years’ imprisonment and a fine of $5000. The evidence showed the total loss resulting from the false claims to the government was $585. The cost of prosecuting Halper was approximately $16,000.

The government subsequently brought a civil action under the False Claims Act, 31 U.S.C. 3729-3731, under which Halper was subject to a penalty of $2000 for each false claim, for a total of $130,000. The district court concluded, in light of Halper’s previous criminal punishment, an additional civil penalty this large would violate the Double Jeopardy Clause’s prohibition on multiple criminal punishments for the same offense.

The Supreme Court unanimously held that the “government may not criminally prosecute a defendant, impose a criminal penalty upon him, and then bring a separate civil action based on the same conduct and receive a judgment that is not rationally related to the goal of making the government whole.” Halper, at 451, 109 S.Ct. At 1903.

The Court acknowledged that a civil sanction following a criminal conviction that compensates the government for its costs of prosecution and actual damages is remedial in nature and is not punishment.

“We therefore hold that under the Double Jeopardy Clause a defendant who has already been punished in a criminal prosecution may not be subjected to an additional civil sanction to the extent that the second sanction may not be characterized as remedial, but only as a deterrent or retribution.... Where a defendant previously has sustained a criminal penalty and the civil penalty sought in the subsequent proceeding bears no rational relation to the goal of compensating the government for its loss, but rather appears to qualify as ‘punishment’ in the plain meaning of the word, then the defendant is entitled to an accounting of the government’s damages and costs to determine if the penalty sought in fact constitutes a second punishment. We must leave to the trial court the discretion to determine on the basis of such an accounting the size of the civil sanction the government may receive without crossing the line between remedy and punishment.”

Halper, at 448-49, 109 S.Ct. At 1902.

Consistent with Halper, it is clear that where the State subsequently files a civil sanction action against an individual against whom it has already obtained a criminal conviction, it must demonstrate to the trial court that the amount of the sanction it seeks is “remedial,” i.e., the amount is rationally related to the costs of prosecution and damages it sustained as a result of the individual’s criminal conduct. Any sanction in excess of such an amount is punishment and is barred by the Double Jeopardy Clause.

In Kurth Ranch, supra, the Supreme Court held that a state tax imposed on marihuana was invalid under the Double Jeopardy Clause where the individual had already been convicted of possession of marihuana on which the tax was imposed. The Court initially found that merely calling a civil sanction a “tax” did not make it so, for purposes of double jeopardy analysis. The Court then considered whether the tax was so punitive as to rise to the level of a civil sanction qualifying as a “punishment” subject to the Double Jeopardy Clause.

*921Initially, the high rate of the tax — several times the value of the marihuana, imposed under the statute — -was recognized by the Court as evidence of its punitive nature, though the Court emphasized that the rate of tax, standing alone, does not necessarily render it punitive. Kurth Ranch, at 781, 114 S.Ct. at 1947. Of more significance was that the tax is conditioned on commission of a crime — illegal possession of a controlled substance. Indeed, the Montana tax is imposed only after the taxpayer is arrested for the precise conduct that gives rise to the tax liability in the first place — illegal possession of marihuana. “Taxes imposed upon illegal activities are fundamentally different from taxes with a pure revenue-raising purpose that are imposed despite their adverse activity on the taxed activity.” Kurth Ranch, at 782, 114 S.Ct. At 1947.

The Court further noted the tax is imposed on goods no longer possessed by the taxpayer: the tax is levied following confiscation of the controlled substances by the government.

“This tax, imposed on criminals and no others, departs so far from normal revenue laws as to become a form of punishment. Taken as a whole, this drug tax is a concoction of anomalies, too-far removed in crucial respects from a standard tax assessment to escape characterization as punishment for the purpose of Double Jeopardy analysis.” Kurth Ranch, at 788, 114 S.Ct. at 1948.

The Texas Controlled Substances Tax is nearly identical to the Montana tax at issue to the extent that the rate of tax — $98 per ounce of marihuana versus $100 per ounce of marihuana under the Montana statutes — significantly exceeds the value of the substance taxed. The State, in its brief, does not provide evidence of any other tax imposed by the State of Texas whose rate is even remotely similar to the Controlled Substances Tax. The intent behind the Texas Controlled Substances Tax is to punish drug dealers, not to produce revenue, as clearly demonstrated by its legislative history. Majority Opinion at 916. Legislative intent is significant in determining whether a tax or other sanction amounts to punishment for purposes of the Double Jeopardy Clause. Halper, 490 U.S. at 442-444, 109 S.Ct. at 1898-1900, Kurth Ranch, at 780, n. 18, 114 S.Ct. at 1946, n. 18. It is evident the Texas Controlled Substances Tax Act is intended to punish drug dealers and any revenue-producing aspect is merely incidental.2

The State, in its brief, notes that the Texas Controlled Substances Tax is imposed on anyone defined as a “dealer” under section 159.001(3), whereas the Montana controlled substances tax is imposed only on individuals arrested for illegal possession/sale of controlled substances and from whom controlled substances have been seized. These differences are not significant, especially when Section 159.001(3) defines “dealer” as “a person who in violation of the law of this State imports into this State or manufactures, produces, acquires, or possesses in this State_” Thus, like its Montana counterpart, the Texas Controlled Substances Tax applies only to individuals who illegally are in possession of controlled substances, i.e., it applies only to criminals.3

I agree with the majority that, given the strong similarities between the Montana tax and the Texas tax, the court of appeals’ finding that the Texas tax is a punishment for double jeopardy purposes is correct. However, the record below does not indicate whether the State, other than sending a no*922tice of tax due to appellant, has made any effort to collect the tax allegedly owed by appellant.

Accordingly, I would vacate the judgment of the court of appeals and would remand the cause to that court to resolve the following two issues:

(1) Is the mere sending of a notice of tax due under the Texas Controlled Substances Tax Act “punishment” so as to implicate double jeopardy and thus bar appellant’s prosecution for possession of marihuana?

(2) Was appellant, by sending a cheek marked “tax” to the Office of the Comptroller for $100, equal to much less than 1% of the tax due, “punished,” and his pending prosecution for possession of marihuana thus barred by the Double Jeopardy Clause?

I respectfully dissent.

. Texas Tax Code § 159.101 provides:

(a) a tax is imposed on the possession, purchase acquisition, importation, manufacture, or production by a dealer of a taxable substance on which a tax has not previously been paid under this chapter.
(b) the rate of the tax is:
(2) $3.50 for each gram of a taxable substance consisting of or containing marihuana.
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(g) If a determination made under this chapter becomes final without payment of the amount of the determination being made, the comptroller shall add to the amount a penalty of 10% of the amount of the tax and interest.

. We note again that, under Texas Tax Code § 159.206, written consent of the prosecutor is required before the Comptroller’s office my compromise or settle any controlled substances tax due under the Texas Controlled Substances Tax Act, further evidence the Act is primarily intended to punish drug dealers, not raise revenue.

. The Illinois Supreme Court recently held that a tax imposed under the Cannabis and Controlled Substances Act on appellee following his criminal prosecution for possession of the same controlled substances that were the subject of the tax violated the Double Jeopardy Clause. Wilson v. Department of Revenue, 169 Ill.2d 306, 214 Ill.Dec. 849, 662 N.E.2d 415 (1996). The provisions of the Illinois Cannabis and Controlled Substances Act are similar to those of its Texas counterpart.