Thursday, October 05, 2006

Tax Assessment Class Action Lawsuit

Judge Hamilton Enters Final Judgment Against the D.C. Government on Flawed Assessments for Tax Year 2002

Senior Judge Eugene Hamilton today filed his Final Judgment and Order in the class action suit brought by Peter S. Craig and 50 other petitioners in Superior Court Finance Dockets 8112-02 and 8141-02, contesting the lawfulness and Constitutionality of across-the-board increases in residential assessments for tax year 2002 in one-third of city known as Triennial Group 1. The suit was initiated on September 30, 2002, but because of what the judge has described as foot-dragging by the District lawyers, was not decided on its merits until September 26, 2005.

In his order of September 26, 2005, Judge Hamilton concluded that, as a matter of law, the assessments by the Office of Tax and Revenue in tax year 2002 were arbitrary, capricious, an abuse of discretion and otherwise not in conformity with the Constitution of the United States or the laws of the District of Columbia, and were, therefore, void. His final judgment directs the city to refund any increases in property taxes in tax 2002 resulting from increased assessments over the prior year plus annual interest of 6%. All taxpayers in Triennial Group 1 who suffered increases in assessments and who paid all taxes, interest and penalties for tax year 2002 will receive refunds under his order.

Triennial Group 1 encompasses the neighborhoods which the Office of Tax and Revenue describes as Anacostia, Barry Farms, Brentwood, Central, Cleveland Park, Columbia Heights, Congress Heights, Crestwood, Eckington, Forest Hills, Fort DuPont Park, Garfield, Hillcrest, Kalorama, LeDroit Park, Marshall Heights, Massachusetts Avenue Heights, Mount Pleasant, Observatory Circle, Randle Heights, Trinidad and Woodley.

The District government estimates that the total refunds will reach $15 million. Payment of these refunds will be stayed, however, while the District of Columbia appeals the rulings of Judge Hamilton to the D. C. Court of Appeals.

By a separate order, also issued at the same time, Judge Hamilton has directed the Office of Tax and Revenue to notify all members of the class entitled to refunds by mailed notices and by a notice published in the Metro Section of the Washington Post.

On January 13, 2006, Senior Judge Eugene N. Hamilton of the Tax Division of the D.C. Superior Court issued his final judgment in the class action suit contesting the constitutionality and lawfulness of across-the-board increases
in residential real property assessments in the one-third of the city defined as Triennial Group 1 by the Office of Tax & Revenue. Judge Hamilton held that these across-the-board increases were in violation of the Due Process and
Equal Protection clauses of the U.S. Constitution and were also in violation of D.C. law. He ruled that the city should refund to taxpayers the resulting increases in taxes, estimated by OTR to be $15 million. The case is captioned as Peter S. Craig, et al., v. District of Columbia, et al., Tax Docket No. 8112-02.

On February 3rd the District government filed a notice of appeal to the D.C. Court of Appeals, but did not file its brief until August 2nd. The brief for the taxpayers was filed on September 22nd. An amicus brief supporting the taxpayers position was filed by the D.C. Federation of Citizens Associations on September 29th. The Districts reply brief is due on October 13th. It is
hoped that the case can be argued before a three-judge review panel by December.

A second case, contesting tax year 2003 assessments in triennial groups 1 and 2 on the same grounds is also pending. That case has been stayed pending final decision regarding tax year 2002 assessments.

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