By Joby Jerrells
Last year, Chief Justice Loretta Rush established the Ad Hoc Tax Court Task Force to “examine the caseload, resources, staffing, performance and operations of the Indiana Tax Court.” The TCTF has concluded its charge and made several findings and salient recommendations. Gov. Mike Pence also signed legislation last year directing a study. The report is available on the General Assembly’s website. The TCTF found that “[t]he fundamental purposes remain valid: (1) decisions by a single court with expertise; (2) body of consistent, uniform, binding tax law; (3) and elimination of forum shopping and inconsistency of judgments.” In other words, the Tax Court continues to meet the legislative intent expressed more than 30 years ago.
Two of the findings relate to the concept of justice itself — thoughtful and fair opinions, and fairness/impartiality of the tribunal. The TCTF found that the Tax Court satisfies both criteria, but noted that some parties may disagree. Every sitting judge knows that she or he will disappoint, or sometimes even anger, at least 50 percent of the parties who appear before them. Justice is not about making parties happy or appeasing practitioners’ egos, but rather making sound legal decisions based on the facts and law relevant to the case at hand and doing so in a timely manner.
Timeliness is undoubtedly the focus of the TCTF’s report. Taking too long to reach a decision could result in an unconstitutional depravation of due process. Issues become stale, witnesses become unavailable, memories fade, and the list goes on. Similarly, giving short shrift to legal and factual issues may lead to a quick decision, but at what cost? What then of thoughtful and fair opinions? Balancing the celerity factor is a challenge for every court, not just the Tax Court.
The TCTF’s recommendations relate primarily to case management and administrative oversight and satisfy the chief justice’s charge as well as the purpose of the legislation. The recommendations will prove helpful, and the Tax Court has already made some changes, including electronic filing. The recommendations are clear, achievable and should be implemented as soon as practicable. Structural changes, however, lie outside the scope of the TCTF and rest directly with the Legislature. For example, the Tax Court lacks a magistrate. In federal court, magistrate judges handle a variety of case management issues. Federal magistrates are invaluable in pressing parties to reach settlements and resolving discovery disputes well in advance of substantive hearings and trials. In some fora, magistrates can hear cases with the consent of the parties. A Tax Court magistrate would bring the same skillset to the table and significantly improve the day-to-day operations of the Tax Court.
Even more dramatic, the Legislature could create two additional Tax Court judges, with one from each appellate district, for a total of three judges statewide. Each judge would hear tax cases. Rehearing petitions could be heard en banc, which would silence any criticism about a single judge and result in a broader consensus and more collegiality on tax matters. The Supreme Court could still review tax cases on a discretionary basis, albeit such review would be even less likely than under the current system. When and if the Tax Court judges had excess capacity,they could sit on cases in the Court of Appeals by designation of the chief justice based on the very caseload management statistics recommended by the TCTF.
Though naysayers may decry the costs of adding a magistrate, two additional judges, or both, it would be a small cost to avoid justice delayed and, therefore, justice denied. Moreover, Pence and Gov. Mitch Daniels before him have made great strides to improve and market Indiana’s pro-business climate. A stable tax environment also includes the judicial process. The increased costs of additional judicial resources would be minimal compared to the savings to businesses in drawn-out proceedings in the Tax Court.
In sum, as the TCTF found, the Tax Court fulfills its purpose and issues thoughtful and fair opinions in an impartial manner. Timeliness, however, continues to be a challenge — and a risky one at that — under both the state and federal constitutions. While the case management modifications suggested by the TCTF would improve the celerity measure, more can and should be done. The Legislature should recognize the success of its Tax Court experiment from 30 years ago by considering structural changes to the Tax Court itself, such as adding a magistrate and two additional judges.•
Joby Jerrells is a 2003 graduate of the Indiana University Robert H. McKinney School of Law. He was a finalist considered in 2010 for appointment to the Tax Court and has authored hundreds of appellate briefs resulting in over 80 published cases and nearly 25 oral arguments in the Indiana Supreme Court, Court of Appeals, and Tax Court. The opinions expressed are those of the author.