Petitioners have filed a Motion for preliminary injunction pending original tax appeal. The respondent has filed a motion to dismiss alleging that the Court is without jurisdiction; that the petitioners have not followed statutory procedures; that the petitioners have filed this action prematurely; and that the petitioners have failed to state a claim. Respondent has also filed a motion to disqualify counsel. Hearing on all motions was held on August 3, 1987, and the Court took each motion under advisement.
IC 33-3-5-11 sets forth procedures to be followed with respect to the filing of an original tax appeal and to requesting an injunction.[Footnote 1]
IC 33-3-5-11(b) sets forth the procedure a taxpayer must follow to request an injunction pending an original tax appeal. In this case the petitioners have filed a petition and have summarized the issues which they will raise in the original tax appeal and have summarized the equitable considerations for which the Court should order collection of the tax enjoined.
It is only jurisdiction to enter the injunction which is here under consideration.
Inasmuch as IC 33-3-5-11(b)(1) says "will raise" it is not necessary that the original tax appeal be filed or be ripe for filing at the time the injunction is requested. It is not necessary to determine here how much, if any, time may elapse after an injunction is granted before the original tax appeal must be filed, or be ripe for filing. Such determination is left for the future.
The Court does not need to consider or decide whether a final determination has been made or whether the Court otherwise has jurisdiction to hear the matter in dispute on the merits.[Footnote 2]
The Court finds that the petitioners have complied with the statutory requirements in requesting an injunction and that the Court has jurisdiction to issue an injunction if it finds that the petitioners have carried their burden of proof: that the issues raised are substantial; that the petitioners have a reasonable opportunity to prevail in the original tax appeal; and that the equitable considerations favoring the injunction outweigh the state's interests in collecting the tax pendente lite.
The other issues raised by respondent in its motion go to whether a final determination has been made, whether the case is otherwise ripe for an original tax appeal, or whether the injunction should in fact be granted.
The motion to dismiss is overruled and denied.
MOTION TO DISQUALIFY ATTORNEY
Respondent seeks to disqualify Robert Digges, Jr. as an attorney in this cause. Respondent argues that by executing an affidavit as to certain matters, Mr. Digges became a witness and is therefore disqualified from continuing as an attorney in this case. The Court having taken said motion under advisement finds that the facts to which Mr. Digges has sworn are not in dispute. Rule 3.7 of the Ind. Rules of Professional Conduct provides inter alia that an attorney shall not act as advocate when also a witness except where the testimony relates to an uncontested issue. The official comment to the Rule states that "if the testimony will be uncontested, the ambiguities in the dual role are purely theoretical." Furthermore, it appears that Rule 3.7 limits the restriction to those cases where the attorney is a necessary witness.[Footnote 3]
Respondent has not shown that attorney Digges is a necessary witness and it is apparent that the facts stated in the affidavit are uncontested.
Accordingly, the Motion to Disqualify Attorney is denied. Counsel however are admonished to review and heed the provisions of Rule 3.7.
In connection with this motion, petitioners have filed requests for admissions and requested that the time within which respondent should answer be shortened.
The Court being advised denies said motion to shorten time. Petitioners are granted leave to renew said motion if they deem such to be necessary at a later date.
The petition brought by petitioners seeks to enjoin the respondent from collecting the Supplemental Highway User Fee (SHUF) imposed by IC 6-6-8-1 et seq. SHUF is a flat tax of $50 for each motor vehicle meeting the statutory specifications operating in the State of Indiana. SHUF applies equally to all such vehicles whether engaged in interstate commerce or intrastate commerce. SHUF is due April 1st of each year and generates annual revenues of approximately $27 million. Respondent anticipates that $2 to $3 million will be collected from August 3, 1987 to March 31, 1988. SHUF is a "listed tax." IC 6-6-8-6(c). Other facts will be stated below.
The issue petitioners aver will be raised in the original tax appeal is whether the SHUF is in violation of the commerce clause, U.S. CONST. art. I, § 8, cl. 3.[Footnote 4] Since this issue affects both the validity of an act of the Indiana General Assembly and whether $27 million dollars of revenue may be assessed and collected, the Court finds that the issues to be raised are substantial.
While the arguments both for and against the constitutionality of the SHUF are not without merit, the Supreme Court of the United States has addressed the matter of a flat tax, similar to SHUF in the case of American Trucking Associations, Inc. v. Scheiner, U.S. , 107 S. Ct. 2829 (1987). While the parties have not briefed particularly the application of the Scheiner case to the SHUF, a reading of Scheiner strongly suggests to the Court and the Court finds that petitioners have a reasonable opportunity to prevail in the original tax appeal.
A much closer question is presented as to the equitable considerations involved in enjoining collection of the tax and the state's interest in collecting the tax pendente lite. The question narrows itself to the likelihood of a refund if petitioners are successful as ...