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K-Kel, Inc. v. State of Nevada Department of Taxation

Supreme Court of Nevada, En Banc

March 1, 2018

K-KEL, INC., D/B/A SPEARMINT RHINO GENTLEMEN'S CLUB; OLYMPUS GARDEN, INC., D/B/A OLYMPUS GARDEN; SHAC, LLC, D/B/A SAPPHIRE; D. WESTWOOD, INC., D/B/A TREASURES; THE POWER COMPANY, INC., D/B/A CRAZY HORSE TOO GENTLEMEN'S CLUB, Appellants,
v.
THE STATE OF NEVADA DEPARTMENT OF TAXATION; AND NEVADA TAX COMMISSION, Respondents.

         Appeal from a district court order denying consolidated petitions for judicial review in a tax matter. Eighth Judicial District Court, Clark County; Jerry A. Wiese, Judge.

          Greenberg Traurig, LLP, and Mark E. Ferrario, Las Vegas, for Appellant SHAC, LLC, dba Sapphire.

          Lambrose Brown and William H. Brown, Las Vegas, for Appellants D. Westwood, Inc., dba Treasures; K-Kel, Inc., dba Spearmint Rhino Gentlemen's Club; Olympus Garden, Inc., dba Olympus Garden; and The Power Company, Inc., dba Crazy Horse Too Gentlemen's Club.

          Adam Paul Laxalt, Attorney General, Joseph Tartakovsky, Deputy Solicitor General, William J. McKean, Chief Deputy Attorney General, David J. Pope, Senior Deputy Attorney General, and Vivienne Rakowsky, Deputy Attorney General, Carson City, for Respondents.

          OPINION

          PARRAGUIRRE, J.

         In this appeal, we consider whether the district court erred in denying appellants' petitions for judicial review challenging a decision by the Nevada Tax Commission regarding a tax refund request. This court in Deja Vu Showgirls of Las Vegas, LLC v. Nevada Department of Taxation (Deja Vu I) held that "the sole remedy for a taxpayer aggrieved by a final decision from the Commission concerning a tax refund request under NRS Chapter 368A is to file a petition for judicial review pursuant to NRS 233B.130, " 130 Nev. 711, 716, 334 P.3d 387, 390 (2014). We hold here that the district court lacked jurisdiction to consider appellants' petitions for judicial review because they were untimely. Therefore, we vacate the district court's order and remand for further proceedings, FACTUAL AND PROCEDURAL HISTORY

         Appellants are exotic dancing establishments challenging the constitutionality of Nevada's Live Entertainment Tax (NLET).[1] In 2006, appellants filed a de novo action (Case 1) with the district court arguing, in part, that the NLET was a facially unconstitutional tax scheme because it burdened protected free speech.[2] While Case 1 was pending, appellants filed individual tax refund requests with the Nevada Department of Taxation. The Department denied these requests, and appellants administratively appealed. The Nevada Tax Commission affirmed the Department's decision by written order on October 12, 2007.

         In 2008, appellants filed a second de novo action (Case 2) in the district court, challenging the administrative denials of their refund requests. In 2011, the district court dismissed appellants' Case 2 de novo action for lack of subject matter jurisdiction because appellants failed to file a petition for judicial review, as required by Nevada's Administrative Procedure Act (APA).[3] In that same order, the district court granted appellants 30 days to refile the action as a petition for judicial review.

         In compliance with the district court's order, appellants filed a petition for judicial review (Case 3) on September 23, 2011. Thereafter, appellants moved the district court for permission to present additional evidence to the Commission in order to supplement the administrative record. The district court granted the motion and remanded the matter to the Commission to review the additional evidence and determine whether such evidence warranted any change to the Commission's October 12, 2007, decision. The Commission in turn remanded the matter to an administrative law judge (ALJ) to "determine whether the findings of fact, conclusions of law, and final decision issued in 2007 should be amended, reversed, or affirmed." On remand, the ALJ affirmed the Commission's October 12, 2007, final decision. Thereafter, in a decision letter dated February 12, 2014, the Commission affirmed the ALJ's decision affirming the Commission's October 12, 2007, final decision.

         On March 11, 2014, appellants filed a second petition for judicial review (Case 4), challenging the Commission's February 12, 2014, decision. Thereafter, the district court consolidated the Case 3 and Case 4 petitions for judicial review. On June 23, 2016, the district court issued an order affirming the Commission's October 12, 2007, and February 12, 2014, decisions and denying the consolidated petitions for judicial review. This appeal follows.

         DISCUSSION

         In addressing the district court's order denying appellants' consolidated petitions for judicial review, we must first consider the threshold issue of jurisdiction raised by respondents. We conclude that appellants' Case 3 petition for judicial review was not timely filed, and therefore, the district court lacked jurisdiction to consider appellants' Case 3 petition. Consequently, the district court did not have authority to grant appellants an additional 30 days to refile, nor did it have authority to remand the matter to the Commission for consideration of additional evidence. We further conclude the Commission's decision on remand was necessarily void, and therefore the district court lacked authority to consider the merits of appellants' Case 4 petition.

         The district court lacked jurisdiction to consider appellants' petitions for judicial review

         Respondents argue that the district court did not have jurisdiction to consider appellants' Case 3 petition for judicial review, and thus, this entire case should be disposed of on jurisdictional grounds. In response, appellants contend the district court had jurisdiction to consider their Case 3 and Case 4 petitions for judicial review because (1) their Case 2 de novo action was timely filed, and the district court allowed them to refile the action as the Case 3 petition for judicial review to cure any deficiency; and (2) the ...


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