No. 12754
I N T E SUPREME C U T O THE STATE O M N A A
H OR F F OTN
1974
PETER KIEWIT SONS ' CO. ,a
Corporation,
P l a i n t i f f and A p p e l l a n t ,
DEPARTMENT O REVENUE and t h e T X APPEAL
F A
BOARD O T E STATE O M N A A J. M R E
F H F O T N , OLY
COOPER, Chairman, HELEN PETERSON and R Y J.
A
WAYRYNEN, a s members t h e r e o f ,
Defendants and Respondents.
Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t ,
Honorable P e t e r G. Meloy, Judge p r e s i d i n g .
Counsel of Record :
For Appellant :
G a r l i n g t o n , Lohn and Robinson, Missoula , Montana
Lawrence F. Daly argued and Sherman V. Lohn appeared,
Missoula, Montana.
For Respondents :
Terence B. Cosgrove argued, Helena, Montana
Poore, McKenzie & Roth, B u t t e , Montana
Robert A. Poore argued, B u t t e , Montana
Submitted: September 11, 1974
Decided: fEB 2 1 1975
Filed : e&B 2 11975
! & . J u s t i c e Wesley C a s t l e s d e l i v e r e d t h e Opinion o f t h e C o u r t .
T h i s i s a n a p p e a l by p l a i n t i f f from a summary judgment
f o r defendant granted a f t e r a hearing.
On J a n u a r y 1 0 , 1973, t h i s C o u r t d e c i d e d c a u s e No. 12199,
P e t e r K i e w i t S o n s ' Co. v . S t a t e Board o f E q u a l i z a t i o n , e t a l . ,
1 6 1 Mont. 1 4 0 , 505 P.2d 1 0 2 , where w e u p h e l d t h e v a l i d i t y of
C h a p t e r 35, T i t l e 8 4 , R.C.M. 1 9 4 7 , a s amended.
On J u l y 1 8 , 1973, p l a i n t i f f - a p p e l l a n t , h e r e i n a f t e r re-
f e r r e d t o a s K i e w i t , f i l e d a c o m p l a i n t i n L e w i s and C l a r k County
d i s t r i c t c o u r t , i d e n t i c a l t o t h e c o m p l a i n t i n c a u s e No. 12199,
d i f f e r i n g o n l y i n amounts o f t a x e s p a i d a t d i f f e r e n t t i m e s . Kiewit
s o u g h t a r e c o v e r y of t a x e s p a i d and a d e c l a r a t i o n o f u n c o n s t i t u -
t i o n a l i t y of Chap. 35, T i t l e 8 4 , R.C.M. 1 9 4 7 , a s amended.
Defendants-respondents, hereinafter referred t o a s the
Department o f Revenue, moved t o d i s m i s s t h e c o m p l a i n t on t h e
g r o u n d s o f - a d j u d i c a t a , i n t h a t t h e o r i g i n a l K i e w i t c a s e con-
res
trolled. The motion t o d i s m i s s was l a t e r g r a d u a t e d u n d e r Rule
1 2 ( b ) , M.R.Civ.P., t o a motion f o r summary judgment.
K i e w i t ' s p o s i t i o n i s t h a t t h i s Court d e c l a r e d t h e law t o
be v a l i d o n l y i f e n f o r c e d i n a c e r t a i n manner. Then, K i e w i t
r e a s o n s , s i x months l a t e r , i n J u l y o f 1973, i t c o u l d d e m o n s t r a t e
t h a t t h e l a w was i n v a l i d b e c a u s e t h e manner o f e n f o r c e m e n t d i d
n o t f o l l o w g u i d e l i n e s l a i d o u t by t h i s C o u r t . ~ i e w i t ngages i n
e
a r a t h e r t o r t u o u s reasoning: The d e c i s i o n o f t h i s C o u r t i n up-
h o l d i n g t h e v a l i d i t y of t h e p u b l i c c o n t r a c t o r s t g r o s s r e c e i p t s
t a x was c o n d i t i o n a l . These c o n d i t i o n s w e r e , a c c o r d i n g t o ~ i e w i t ,
(1) t h a t p u b l i c c o n t r a c t o r s r w e r e exempt from competency r e q u i r e -
m e n t s of t h e A c t , and ( 2 ) t h a t t h e l a w c o u l d n o t r e s u l t i n r e v e n u e
being r a i s e d .
Then K i e w i t a r g u e s : (1) The Department of Revenue c u r r e n t -
l y e n f o r c e s t h e e n t i r e l a w a g a i n s t p u b l i c and p r i v a t e c o n t r a c t o r s
a l i k e and ( 2 ) t h e s t a t e c o l l e c t s money i n e x c e s s of c r e d i t s and
r e f u n d s and t h u s i n s t e a d o f b e i n g a r e v e n u e e n f o r c i n g measure,
i t i s a c t u a l l y a r e v e n u e r a i s i n g measure.
- 2 -
A s t o K i e w i t ' s f i r s t c o n t e n t i o n , i f t h e r e be a problem
i t i s s t r i c t l y an a d m i n i s t r a t i v e one and d o e s n o t , i n o u r view,
a p p r o a c h a c o n s t i t u t i o n a l problem. Kiewit c h a r g e s t h e r e h a s been
i n t e r f e r e n c e w i t h f e d e r a l highway a d m i n i s t r a t i o n procurement
activities. T h i s may be s o , b u t we a r e u n a b l e t o see where a
f e d e r a l - s t a t e c o n f l i c t a t t h e a d m i n i s t r a t i v e l e v e l makes a s t a t e
law u n c o n s t i t u t i o n a l .
A s t o K i e w i t ' s second p o i n t , i t may be t h a t K i e w i t would
be e n t i t l e d t o a r e f u n d o r some o t h e r a d m i n i s t r a t i v e remedy, b u t
i t i s o b v i o u s t h a t Kiewit s e e k s b u t one thing--a d e c l a r a t i o n of
unconstitutionality. Judge Meloy found t h e o r i g i n a l K i e w i t
d e c i s i o n res a d j u d i c a t a on t h e i s s u e of c o n s t i t u t i o n a l i t y and we
affirm.
K i e w i t i n s i s t s t h a t t h e o n l y b a s i s f o r t h i s C o u r t ' s con-
c l u s i o n t h a t t h e Act was n o t d i s c r i m i n a t o r y a s t o p u b l i c c o n t r a c -
t o r s was t h a t i f t h e Act were p r o p e r l y e n f o r c e d , it would r e s u l t
i n a "washout"; t h a t i s , r e f u n d s of p e r s o n a l p r o p e r t y t a x e s and
c o n t r a c t o r s ' income t a x e s would o f f s e t t h e 1% r o s s r e c e i p t s t a x .
g
K i e w i t r e a d s o u r o p i n i o n much t o o n a r r o w l y . W held t h e r e t h a t
e
a r e a s o n a b l e c l a s s i f i c a t i o n f o r t a x p u r p o s e s l a y between p r i v a t e
and p u b l i c c o n t r a c t o r s .
The o r i g i n a l K i e w i t c a s e i n v o l v e d p r o c e e d s from a n Army
Corps of E n g i n e e r s c o n t r a c t d a t e d October 9 , 1970. A t t h a t time,
a s p o i n t e d o u t i n t h e o r i g i n a l Kiewit o p i n i o n , p r o v i s i o n # 5 8 ( f )
p r o h i b i t e d t h e c o n t r a c t o r from t a k i n g a d v a n t a g e of c r e d i t s a v a i l -
a b l e under t h e p r o v i s i o n s of s e c t i o n 84-3514, R.C.M. 1947. Be-
c a u s e of t h a t p r o v i s i o n and because of i g n o r a n c e and i n d i f f e r e n c e ,
many c o n t r a c t o r s were n o t a p p l y i n g f o r c r e d i t s t h e y were e n t i t l e d
to. The Army Corps of E n g i n e e r s c o n t r a c t d a t e d May 2 8 , 1971,
had a s i m i l a r p r o v i s i o n , #66, which p r o h i b i t e d c o n t r a c t o r s from
t a k i n g advantage of c r e d i t s . However, on December 1 5 , 1971,
t h e Corps n o t i f i e d K i e w i t t o o b t a i n a l l r e f u n d s and c r e d i t s
a v a i l a b l e under t h e Montana law and t o i g n o r e g e n e r a l pro-
v i s i o n #66. So, now, K i e w i t i s s e e k i n g a l l c r e d i t s and r e f u n d s .
The i n s t a n t c a s e c o n c e r n s g r o s s r e c e i p t t a x e s p a i d o v e r and
above any c r e d i t s and r e f u n d s .
Kiewit c i t e s S t a t e ex r e l . Schultz-Lindsay Construction
Company v . S t a t e Board of E q u a l i z a t i o n , 145 Mont. 380, 403 P.2d
635, f o r t h e p r o p o s i t i o n t h a t a g r o s s r e c e i p t t a x on n o n r e s i d e n t
c o n t r a c t o r s i s a r b i t r a r y and u n r e a s o n a b l e . In the original
Kiewit c a s e w e d i s c u s s e d S c h u l t z - L i n d s a y and d i s t i n g u i s h e d it
and w e w i l l n o t r e p e a t t h e d i s c u s s i o n h e r e .
I n Garrett F r e i g h t l i n e s , I n c . v . Montana R a i l r o a d and
P u b l i c S e r v i c e Cornmln, 1 6 1 Mont. 482, 491, 507 P.2d 1 0 4 0 , de-
c i d e d March 1 5 , 1973, j u s t two months a f t e r t h e o r i g i n a l Kiewit
c a s e , t h i s Court i n a 3 t o 2 d e c i s i o n held a s t a t u t e , a s s e s s i n g
.575 of 1 p e r c e n t of g r o s s o p e r a t i n g r e v e n u e on l i c e n s e d p u b l i c
c a r r i e r s while e ~ e m p t i n g ~ d i r e c t l y
competing p r i v a t e c a r r i e r s
and exempt c a r r i e r s , t o be u n c o n s t i t u t i o n a l l y a r b i t r a r y and d i s -
criminatory. There t h e C o u r t s a i d :
" A l l t h i s g o e s t o show t h e v a s t d i f f e r e n c e i n f a c t
s i t u a t i o n h e r e from t h a t i n P e t e r K i e w i t S o n s ' Co.
v . S t a t e Board of E q u a l i z a t i o n , 1 6 1 Mont. 1 4 0 ,
505 P.2d 102. I n t h a t c a s e a c o m p l a i n t was r a i s e d
a s t o t h e p u b l i c c o n t r a c t o r s 1 l i c e n s e a c t b e i n g un-
c o n s t i t u t i o n a l because t h e levy w a s n o t uniform
and was d i s c r i m i n a t o r y . W t h e r e h e l d t h a t s i n c e
e
i t a p p e a r e d t h a t a l l p u b l i c c o n t r a c t o r s had t o pay
t h e t a x , t h a t a l l members of t h e c l a s s were t r e a t e d
a l i k e . Under t h e f a c t s t h e r e we a l s o h e l d t h a t a
d i s t i n c t i o n between p u b l i c and p r i v a t e c o n t r a c t o r s
was n o t a r b i t r a r y and c a p r i c i o u s ; i t b e i n g c l e a r
from t h e r e c o r d t h a t t h e p u b l i c c o n t r a c t o r s ' li-
cense a c t w a s intended t o o p e r a t e a s a revenue
e n f o r c i n g measure a s p o i n t e d o u t i n t h e o p i n i o n and
a l i k e s i t u a t i o n d i d not appear a s t o p r i v a t e
contractors."
I n G a r r e t t t h e u n f a i r n e s s of t h e t a x a s between competing
b u s i n e s s e s was shown. I n t h e i n s t a n t c a s e t h e r e i s no u n f a i r n e s s
a s between competing c o n t r a c t o r s . A l l p u b l i c c o n t r a c t o r s are
treated alike.
We have discussed the position of Kiewit on the merits.
The original Kiewit decision is res adjudicata since the parties,
issues, and facts are all the same in their relevant particulars.
The trial court concluded that the only factual differences
were inconsequential against the impact of the doctrines of res
adjudicata, collateral estoppel or stare decisis. We agree.
We affirm the judgment of the district court.
We concur:
,
Justices /