Opponents file federal court suit on taxes

Monday, July 14, 2003 | 5:36 a.m.

CARSON CITY -- U.S. District Judge Philip Pro Monday issued a temporary restraining order stopping the Nevada Legislature from taking action on a $788 million tax package until the court decides if a two-thirds vote is required for final approval.

This new twist in the battle over taxes will put on hold any legislative vote until at least Wednesday when all of the federal district judges in Nevada meet in a teleconference hearing between Las Vegas and Reno to consider issuing an injunction to require a two-thirds vote for approval of any new or increased taxes.

The suit was filed early Monday in the federal court in Reno by opponents of the tax bill that was approved Sunday by the Assembly by a 26-16 vote. It was two votes shy of the 28, or two-thirds majority, required called for in the state constitution.

But the Nevada Supreme Court ruled last week that in this case a majority vote could pass the tax plan because it was necessary to comply with the constitution to fund public education.

The federal court suit was referred by U.S. District Judge Howard McKibben to Pro, the chief judge, who issued the order.

State Solicitor General Jeff Parker, who was assigned to handle the defense, said he has to file a response by Tuesday. And there will be deputy attorneys general both in Las Vegas and Reno for the hearing.

He said he was confident about the state's position. He said this is the Nevada Supreme Court interpreting Nevada law, not the federal courts whose jurisdiction over federal law.

The restraining order by Pro was served on the state Senate, shortly after a body decided not to agree with the Assembly version of Senate Bill 6. But before the Senate could convene to accept the committee report, the court order was served.

Brenda Erdoes, the chief lawyer for the Legislature, advised the senators not to take further action until the federal court issues a decision.

But Senate Majority Leader Bill Raggio, R-Reno, said this court order does not restrain the Legislature from trying to reach agreement. He said lawmakers will continue to meet in an attempt to develop a tax plan that could gain a two-thirds vote.

Greg Bortolin, a spokesman for Gov. Kenny Guinn, said the governor "hopes that this can be resolved quickly."

Meanwhile the Independent American Party said it will file suit Tuesday seeking to invalidate the majority vote on SB6 by the Assembly. Joel Hansen, a Las Vegas lawyer representing the party, said it will allege many of the same things as in the suit on Monday.

But he said he will name the Nevada Supreme Court has a defendant. He called their ruling "off the wall." And his suit will have an additional 250 plaintiffs and the Nevada Committee for Full Statehood.

The action Monday was brought on behalf of 24 Republican state legislators, the Nevada Manufacturers Association, the Retail Association of Nevada, Nevadans for Tax Restraint, Nevada Concerned Citizens and 23 individuals, some of them members of the Independent American Party.

Attorney General Brian Sandoval said his office "would vigorously defend against the suit. He said, "It raises some novel issues which we want to evaluate."

The suit, Sandoval said, is not an appeal from the ruling of the Nevada Supreme Court. He said the plaintiffs allege their civil rights are being violated.

Nevada's constitution requires a two-thirds vote on any new or increased tax. The constitution also requires that the Legislature must fund the public schools.

The tax plan in the Assembly includes the funding for the schools. The Nevada Supreme Court ruled last week that the educational requirement takes precedence and that the Legislature can pass a tax plan by a simple majority in order to get the money to the public schools.

The suit said passage of this bill that contains a gross receipts tax with only a majority would "amount to a taking of property without due process of law" on a certain segment of business. They said this would be in violation of the 14th Amendment of the U.S. Constitution.

The civil action said the vote in the Assembly Sunday without the two-thirds majority "essentially eviscerated the votes cast" by those who voted for the tax restraint amendment. It said the constitutional rights of legislators who oppose the tax have been violated because it dilutes their votes.

Defendants are the Legislature, its officers, Gov. Kenny Guinn, Lt. Gov. Lorraine Hunt, Secretary of State Dean Heller and state Taxation director Charles Chinnock.

The suit was filed by Reno lawyer Jeffrey Dickerson and John C. Eastman, professor of law at the Chapman Law School in Orange, Calif. Eastman is a specialist in constitutional law and legal history and was a former law clerk for U.S. Supreme Court Justice Clarence Thomas.

It asks for "nominal damages of $1" from each defendant; a declaratory judgment that the Assembly vote on Senate Bill 6 was void and for a temporary restraining order and permanent injunctions to stop the Legislature from going forward with only a majority vote on the tax bills.

Assembly Minority Leader Lynn Hettrick, R-Gardnerville, raise the issue Sunday night after approval of the tax bill. He said the decision by the Nevada Supreme Court did not invalidate the two-thirds vote.

But Assembly Speaker Richard Perkins, D-Henderson, said the legislative counsel held that the majority vote was valid. Hettrick asked for a roll-call vote on his motion to overturn the approval. But Perkins gaveled the session to an end.

Legislators who signed on were Republican Sens. Mark Amodei of Carson City, Barbara Cegavske, Warren Hardy, Dennis Nolan and Ann O'Connell all of Las Vegas; Mike McGinness of Fallon, Dean Rhoads of Tuscarora, Sandra Tiffany of Henderson and Maurice Washington of Sparks.

Raggio, the Senate majority leader, did not join in the suit.

Republican Assembly members who signed on were Walter Andonov, Bob Beers, David Brown, Chad Christensen, Garn Mabey and Valerie Weber, all of Clark County; Sharron Angle and Don Gustavson, both of Washoe County; John Carpenter of Elko, Peter Goicoechea of Eureka, Thomas Grady of Yerington, Hettrick, Ronald Knecht of Carson City, John Marvel of Battle Mountain and Roderick Sherer of Pahrump.

The suit said "serious questions" have been raised about the constitutionality of the actions of the Assembly and injunctions should be issued while the case is processed.

Judge Pro also granted the petition of the opponents that he waive the posting of a bond in the suit.