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Class Action Lawsuit Filed For Illegal Tax Collection

The claims focus on the Motor Vehicle Excise Tax (MVET)

Class Action Lawsuit Filed For Illegal Tax Collection

$240 Million Class Action Lawsuit Filed
Against Sound Transit For Illegal Tax Collection

by Glen Morgan

(We The Governed) – On June 5, a $240 million class action lawsuit was filed in Pierce County Superior Court against Sound Transit and the State of Washington for violating the Washington State Constitution (Art 2, Sec 37) by illegally collecting excessive car tab taxes (MVET).  The case is called Black, et al v. CENTRAL PUGET SOUND REGIONAL TRANSIT AUTHORITY, and STATE OF WASHINGTON (Case #18-2-08733-9).  Plaintiffs residing in Snohomish County, King County, and Pierce County are listed in the lawsuit (Lawsuit linked here)

The claims are very simple, and in essence, they focus on the Motor Vehicle Excise Tax (MVET) and how much was authorized by the Washington State Legislature when they passed ESSB 5987 in 2015.  According to the lawsuit, when the legislature passed 5987, they never authorized the increased MVET, which is currently being collected at 1.1%.  The highest legal authorization by the legislature had been at 0.3%, which means approximately $240 million dollars have been illegally collected by Sound Transit by unauthorized tax collections, which is not allowed and is a violation of the Washington State Constitution (Art2, Sec 37) which reads:

Article II Section 37 REVISION OR AMENDMENT. No act shall ever be revised or amended by mere reference to its title, but the act revised or the section amended shall be set forth at full length.

The reason Article II, Section 37 was included in the State Constitution was to prevent the legislature from passing laws which are not clearly specific on what they do, or in this case, how much they tax.  It should be noted that one of the lawyers involved in representing the plaintiffs in this case , David DeWolf an attorney from Spokane, had testified against this aspect of the illegal taxation by Sound Transit.  His testimony fell on deaf ears in the Democratic Caucus.  Dewolf was also a candidate for the Washington State Supreme Court in 2016.

Class Action Lawsuit Filed
A Washington State Senate hearing last year determined that Sound Transit was dishonest in their promotion of the ST3 Mega Tax (Photo Credit: King5 News)

It is also worth noting that a very similar argument was used successfully to overturn one of Tim Eyman’s early successful state wide initiatives.  That was Initiative -747, which reduced property tax increases to no more than 1% per year.  It passed overwhelmingly (58% statewide) in 2001, but was overturned by Washington Supreme Court in 2007 using the argument that it violated Article 2, Section 37, very similar to the class action filed yesterday against Sound Transit.  At the time the State Supreme Court stated “”The text of I-747 did not accurately set forth the act revised or the section amended and misled voters.”  The attorney who brought the lawsuit against Eyman’s initiative at the time said: “The Court today confirmed that the Constitution protects voters from being misled. If the measure had been truthful, it never would have gained majority voter approval.” That is exactly what happened with ST3.

Critics of Sound Transit and the many dishonest and corrupt actions that political entity has committed are not surprised that Sound Transit would use unethical and illegal tactics to get more cash.  However, this lawsuit might go part way towards addressing one of the many problems with how Sound Transit extracts cash from Puget Sound residents.  When viewed as part of the $54 billion cash grab, $240 million may seem like pocket change, but restoring this ill-gotten cash to the people who earned it in the first place is certainly a good start towards confronting the many questionable actions of Sound Transit in recent times.

As one of the plaintiff’s attorney Joel Ard said on the Todd Herman radio show yesterday, “the essential thing here is that our state constitution has some great things in it to protect citizens.  If you are going to amend a statute, you have to say what you are changing… that wasn’t done in the legislation that enabled the Sound Transit Bond statute”  (ESSB 5987) “As a result of that failure, the enabling legislation that supports the MVET is unconstitutional.”

While most of us know that this was intentional on the part of Sound Transit and their supporters,  it doesn’t really matter when it comes to the legal failings of Sound Transit for the plaintiffs in this lawsuit to prevail.  The artificially inflated car tab taxes are just unconstitutional.  It is likely that a variety of legal maneuvers are soon to come in this case, and it won’t be resolved overnight.  Sound Transit has hired, at one point or another, nearly all the major law firms in the Seattle area, so they are likely to have an impressive legal defense, and we’ll see if they can convince the Supreme Court to reverse its past decisions on this issue.

Background articles:

Black v CPSRTA Class Action Lawsuit – Case #18-2-08733-9
How is ST3 like an STD?
Seattle Times – November 8, 2007 – “Eyman initiative ruled unconstitutional”
Seattle Curbed – July 13, 2017 – “Tim Eyman’s latest $30 car tab attempt could cost Sound Transit $7 to 8 billion”
Seattle Weekly – July 12, 2017 – “With Initiative Push, Eyman Takes on Car Tab Fees – and Sound Transit”
Seattle Times – August 24, 2017 – “Sound Transit’s Lynnwood extension running $500M over budget”
The Stranger – August 24, 2017 – “Light Rail to Lynnwood is behind schedule and over budget”
Q13 – Fox – August 25, 2017 – “Sound Transit:  Lynnwood light rail is $500 million over budget”

 

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