In the first hearing of a group of lawsuits filed regarding the $18 landfill fee being collected on property taxes in six North Central Arkansas counties, 19th Circuit Court Judge Scott Jackson heard arguments on three motions Tuesday, but he also had some questions.The lawsuit is one of six filed in the Ozark Mountain Solid Waste District, which consists of Baxter, Boone, Carroll, Marion, Newton and Searcy counties.
The bulk of the suits are the same, but the plaintiffs are individual residents of each county. Fayetteville lawyers Matt Bishop and Wendy Howerton filed all six suits.
The Harrison Daily Times reports each of the suits alleges the court-ordered $18 fee collected on business and residential property taxes is actually a tax and an illegal exaction. They ask the court to block collection of the fee, which is at present used to pay back investors who bought the bonds used to purchase the now-defunct NABORS landfill.
Motions filed in the case prior to Tuesdays hearing were:
A motion to dismiss the entire suit by the receiver appointed by the court to collect the fee.
A motion by 19th East Judicial Circuit Prosecuting Attorney Tony Rogers to dismiss Carroll County Collector Kay Phillips from the suit.
A plaintiffs motion to strike the receiver from representing the solid waste district.
Judge Jackson first asked Bishop to explain the latter of those motions.
Bishop argued the district has always had its own lawyer and the receiver, Little Rock lawyer Geoffrey Treece, who is ultimately responsible to the bondholders for collecting the fee, has no authority to represent the district. He also has a duty to collect the fee for the district.
Bishop said Treece also has financial responsibility to the Arkansas Department of Environmental Quality and even the taxpayers who are forced to pay the fee or what we believe is a tax.
The district, the bondholders and bond trustee Bank of the Ozarks, now Bank OZK, had lawyers in the suit argue before Pulaski County Circuit Judge Tim Fox in which Treece was appointed receiver.
Bishop said the district was originally opposed to the receiver being appointed in the first place. In addition, the receiver has no authority to levy the $18 fee. He says the district has the authority to do that.
Finally, Bishop argued the bondholders have yet to be named. If their identities are revealed it could mean some of them are property owners in the district who are paying the fee. That means the receiver would actually be working against some bondholders by representing the district.
Jackson asked Bishop what would happen should the motion be granted. He said it would just mean the district would have its own lawyer representing it only.
But Little Rock lawyer Mary-Tipton Thalheimer, representing Treece, said the receiver is assigned to enforce Foxs order, so he should logically be able to represent the districts interest.
Jackson then asked Thalheimer to explain the receivers motion to dismiss the suit.
Thalheimer said the ADEQ, which intervened in the bondholder lawsuit in Pulaski County, and Bank OZK as trustee should all be enjoined as parties in the lawsuit so their interests would be served. The $18 fee will eventually go toward repaying ADEQ for money spent to close the landfill.
She also said the appropriate venue for the lawsuit would be in Pulaski County where the original action was initiated. Otherwise, the plaintiff would be asking Carroll County Circuit Court to overrule Pulaski County Circuit Court.
Bishop disagreed, saying the taxpayers of Carroll County are the ones being harmed, so they should have access to the proceedings.
Bishop said venue is proper here. This is essentially a bank buyout by taxpayers.
He went on to say ADEQ is merely a creditor in the case, not an essential party to the court action.
Deputy Prosecuting Attorney Craig Parker, arguing the motion to dismiss against Phillips, reiterated the arguments Thalheimer made, emphasizing the need to enjoin all the other parties.
Jackson then said he had some questions for the attorneys in the case. He said he would submit them to the lawyers, but he broached them in open court Tuesday.
He wanted to know if the illegal exaction is the same as Judge Foxs order. The attorneys indicated there were very different actions.
Jackson also wanted to know who represented the taxpayers prior to Foxs ruling regarding the fee. Bishop said the taxpayers never had any representation.
The judge also pointed out the six lawsuits could have different outcomes in the six courts. He wants to know what would happen in that case.
Finally, Jackson asked about the judges in all six cases. He said its almost certain all of them are property owners.
Jackson said he pays the $18. He wanted to know if there would be objections to rulings he and the other judges made because they are also taxpayers and basically in the same class as Summers.
The lawyers said they would have no objections to his ruling, but Jackson said that needed to be made part of the record.
He gave the parties 15 days to file answers to the questions, then he would issue his rulings on the motions in a timely manner after that.
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