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Rock Creek Oil Inc. v. Louisiana Dep't of Revenue

United States District Court, W.D. Louisiana, Lake Charles Division

September 13, 2019

ROCK CREEK OIL, INC.
v.
LOUISIANA DEP'T OF REVENUE, ET AL.

          KAY MAGISTRATE JUDGE

          MEMORANDUM RULING

          JAMES D. CAIN, JR. UNITED STATES DISTRICT JUDGE

         Before the court is a Motion to Dismiss for Lack of Jurisdiction [doc. 7] and Motion to Dismiss for Failure to State a Claim [id.] filed by the Louisiana Department of Revenue ("Department") under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), in response to the civil rights complaint filed by Rock Creek Oil, Inc. ("RCO"). RCO opposes the motions. Doc. 11.

         I.

         Background

         RCO, a Texas corporation, owns and operates an oil and gas well in Jefferson Davis Parish, Louisiana. Doc. 1, pp. 4-5. Following an audit covering the time period of May 1, 2016, to August 31, 2018, the Department determined that RCO had failed to file reports on its oil and gas severance for each period he maintained that well, as required by Louisiana Revised Statute § 47:635, or to pay applicable taxes on same. Id. at 2-4; see doc. 7, att. 2, pp. 2-3. On February 15, 2019, he was sent two Notices of Proposed Tax Due from revenue tax auditor specialist Kerya Drummond. Doc. 7, att. 2, pp. 5-8. These notices reflected $6, 721.49 owed in taxes, $559.86 in interest, and $9, 822.19 in penalties for the gas severance, for a total proposed amount of $16, 653.54; and $7, 000 in penalties for the oil severance. Id.

         RCO submitted a waiver of penalty request and the Department waived half of the failure to file penalties, reducing that amount from a total of $14, 000 to $7, 000 for the oil and gas severances. Id. at 9-10. On March 26, 2019, the Department issued two Notices of Assessment, showing that RCO owed $11, 742.44 in tax, interest, and penalties for the gas severance, less payments of $6, 859.30, for a total amount due of $4, 883.14; and $3, 500 for the oil severance. Id. at 11-15. With these assessments RCO was also informed of its right to pay under protest while filing suit in the state district court and/or filing a petition with the Louisiana Board of Tax Appeals. Id.

         RCO instead filed the instant civil rights complaint against the Department, auditor specialist Drummond, and auditor George Gaiennie IV, invoking this court's jurisdiction on the basis of a federal question under 28 U.S.C. § 1331. Doc. 1. Specifically, it alleges that the penalties assessed amount to excessive fines in violation of the Eighth Amendment and that the defendants have committed other constitutional violations relating to the exercise of their authority. It seeks declaratory and injunctive relief, in addition to damages in the amount assessed under the original notice. See Id. at p. 11.

         The Department, which is the only defendant to make an appearance, now moves for dismissal of the claims under Federal Rules of Civil Procedure 12(b)(1) and (6). Doc. 7. Specifically, it asserts that the court lacks subject matter jurisdiction over the suit under the Tax Injunction Act and that RCO otherwise fails to state a claim on which relief can be granted. RCO opposes the motion. Doc, 11.

         II.

         Law & Application

         Generally, the court should consider any jurisdictional attack before addressing the merits of the case. See Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001). "This requirement prevents a court without jurisdiction from prematurely dismissing a case on the merits." Id. Accordingly, the court first addresses jurisdictional grounds for dismissal and then, if necessary, the remaining arguments raised under Rule 12(b)(6).

         A. 12(b)(1) Motion

         1. ...


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