2013-0221, Northern New England Telephone Operations, LLC d/b/a FairPoint Communications-NNE v. City of Concord

striking the tax levied against FairPoint. We vacate and remand. City’s taxation of FairPoint ’ s use and occupation of public property, and Communications - NNE (FairPoint), in its equal protection challenge to the petitioner, Northern New England Telephone Operations, LLC d/b/a FairPoint the Superior Court (McNamara, J.) granting summary judgment in favor of the HICKS, J. The respondent, the City of Concord (City), appeals rulings by

for the respondent. Danielle L. Pacik, deputy city solicitor, on the brief, and Mr. Kennedy orally), City Solicitor's Office, of Concord (James W. Kennedy, city solicitor, and

M. Wyatt on the brief, and Mr. Will orally), for the petitioner. Devine, Millimet & Branch, PA, of Manchester (Daniel E. Will and Joshua

No. 2013 - 221 Merrimack

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh. us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E - mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concor d, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

regarding the 1999 tax year waived. therefore consider only the p. 2 2000 through 2010 tax years, and deem FairPoint’s arguments At oral argument, FairPoint conceded that the City did not tax it for the 1999 tax year. We 1

protection of the laws under the State and Federal Constitutions,” and that The court concluded that “the City violated FairPoint’s right to the equal (Quoting Verizon New England v. City of Rochester, 156 N.H. 6 p. 2 24, 631 (2007).)

imposing [a] tax upon” FairPoint. could therefore not have had a “rat ional reason for selectively law or its lack of diligence in investigating the facts. Concord deciding not to tax entities based on its misunderstanding of the that the City of Concord had a rational governmental interest in using Concord’s right - of - way. There can be no serious argument facts that other entities, such as PSNH and others [,] . . . were the law with respect to Comcast, and a misunderstanding of the exercise of judgment; rather, it was due to a misunderstanding of Concord’s decision not to tax others similarl y situated was not an

that the City had selectively taxed FairPoint, the court reasoned: element of FairPoint’s equal protection claim. Next, having implicitly found trial court ruled, as an initial matter, that “intentionality” was not a required judgment. In granting FairPoint’s motion, and denying the City’s motion, the p. 2 2000 through 2010 tax years. The parties filed cross - motions for summary constitutionality of the City’s right - of - way tax assessments against it for the Fair P oint brought an action challenging, in relevant part, the

the relevant tax years because it was not aware of their usage. users of its rights - of - way for their use and occupation of public property during and occupied the rights - of - way. Similarly, the City did not tax ce rtain oth er Service of New Hampshire (PSNH) because it was unaware that PSNH h ad used the tax. P rior to p. 2 2008, the City did not impose the same tax upon Public (B TLA) that, notwithstanding the franchise ag reement, Comcast was subject to in response to a ruling by the New Hampshire Board of Tax and Land Appeals franchise agreement. The City began imposing the tax upon Comcast in 2010 w hich utilizes the City’s rights - of - way to provide cable services pursuant to a Prior to 2010, the City did not impose a right - of - way tax upon Comcast,

p. 2 2002, 200 p. 3 3, 2006, 2011). right - of - way tax). See RSA 72:6 (1991); RSA 72:23, I (Supp. 2000) (amended 1 estate tax upon FairPoi nt for its use and occupation of this public property (the rights - of - way. For the 2000 through 2010 tax years, the City imposed a real maintains poles, wires, cables, and other equipment within the City’s public order to provide telecommunications services throughout the City, FairPoint The trial court found, or the record supports, the following facts. In 3

See Granite State Mgmt. & Res. v. City of Concord, 165 N.H. 277, 294 (201 p. 3 3). judgment, we deem that argument waived because th e City failed to raise it in its notice of appeal. To the extent the City also argues that the court erred in denying its motion for summary 2

to discriminate . . . to establish an equal protection vi olation.” point to any New Hampshire authority on analogous facts that requires intent protection claim based upon selective taxation, and that “[the City] cannot argues that discriminatory intent is not a required element for an equal violates the State Constitution’s guarantee of equal protec tion.” It further way tax against all entities that use and occupy the public rights - of - way III), “[i]t is now beyond dispute that a municipality’s failure to assess a right - of decision in Verizon New England v. City of Rochester, 156 N.H. 624 (Rochester way . . . in the same manner as FairPoint.” It contends that, following our FairPoint, but not other entities that used and occupied [the City’s] rights - of very equal protection violation adjudicated in prior cases by selectively taxing Specifically, it argues that, for the relevant tax years, “[the City] committed the FairPoint argues that we “should affirm each of the trial court’s rulings.”

must be ordered to pay its assessed taxes owed to the City.” “FairPoint’s equal protection claim is without merit,” the City argues, “FairPoint scheme to tax FairPoint and not others similarly situated.” Because that [it] engaged in [an] arbitrary or otherwise intentional and deliberate difference in treatment resulted from errors of judgment, which “do not show some entities that occupied the right - of - way” while taxing FairPoint, any such for the relevant tax years. It contends that, “[t] o the extent that [it] failed to tax the right - of - way tax upon FairPo int, nor “single[d] FairPoint out for taxation,” against FairPoint. Specifically, it argues that it neither “selectively impose[d]” 2 judgment in favor of FairPoint, and in striking the right - of - way tax levied On appeal, the City argues that the trial court erred in granting summary

omitted). Anderson v. Motorsports Holdings, 155 N.H. 491, 494 (2007) (quotation

facts de novo. decision. We review the trial court’s application of the law to the judgment as a matter of law, we will affirm the trial court’s genuine issue of material fact, and if the moving party is entitled to moving party. If our review of the evidence does not reveal any properly drawn from them, in the light most favorable to the non consi der the affidavits and other evidence, and all inferences When reviewing a trial court’s grant of summary judgment, we

City’s subsequent motion to reconsider, and this appeal followed. “the appropriate remedy is to strike [the] illegal tax.” The court denied the p. 4 4

justification and . . . to negative every conceivable basis which might support burden to prove that the selectio n is arbitrary or without some reasonable historically lax,” Anderson, 155 N.H. at p. 4 499. In addition, FairPoint “has the Wakefield, 247 U.S. 350, 353 (1918), or “that the enforcement was merely more” than “mere errors of judgment by officials,” Sunday Lake Iron Co. v. on its claim of selective tax treatment, FairPoint must demonstrate “something Anderson, 155 N.H. at 499 (emphasis added). Accordingly, in order to succeed enforcement [of the tax] was a conscious, intentional discrimination,” To show “selective taxation,” id., FairPoint “must show that the selective

rationally related to a legitimate state interest. See i d. FairPoint constituted selective taxation and, if so, whether the selection is (quotation omitt ed). Under this test, we ask whether the City’s taxation of protection is being violated, we must apply the rational basis test.” Id. brackets omitted). “[T]o determine whether [FairPoint’s] right to equal on others of the same class.” Rochester III, 156 N.H. at 630 (quotation and selects it out for discriminatory treatment by subjecting it to tax es not imposed “The equal protection clause protects an entity from state action which

alternative means of establishing equal protection violation). 151 N.H. at 325 - 26 (noting selective enforcement and classification as forth in Rochester III. See Rochester III, 156 N.H. at 630 - 31; see also Hofland, FairPoint’s claim of “selective tax treatment” under the rational basis test set different manner.” Id. at 326 (quotation omitted). A ccordin gly, we analyze classifications and, therefore, treated similarly situated individuals in a any event, FairPoint has not shown that the tax “impermissibly established what it calls the City’s “selective tax treatment,” not the tax scheme itself. In omitted). Although it employs the term “classification,” FairPoint challenges different manner.” State v. Hofland, 151 N.H. 322, 325, 326 (200 p. 4 4) (quotations classifications and, therefore, treat[ing] similarly situated individuals in a protection challenge to the tax scheme itself for “impermissibly establish[ing] analyzed in Rochester III, is one of “selective enforcement,” and not an equal We conclude that FairPoint’s equal protection claim, like the one

de novo. Rochester III, 156 N.H. at 6 30. applica tion of a tax raise questions of law, we review the trial court’s decision 12 p. 4 4 N.H. 226, 231 - 33 (1983). Because constitutional challenges to the Constitution and rely upon federal law only to aid our analysis. State v. Ball, We first address FairPoint’s equal protection claim under the State

through deliberate ignorance.” right of way users, such as PSNH and [other] [a]ttachees, deliberately or meaning [the City] intended not to tax Comcast”; and (3) “fail[ing] to tax other “deliberately cho[osing] not to assess a right of way tax against Comcast, against FairPoint” by: (1) taxing only FairPoint for the 2000 tax year; (2) In the alternative, it argues that the City “intentionally discriminated p. 5 5

similarly situated homeowners were assessed a real estate tax, but one hypothetical at oral arg ument, by insisting that, if ninety - nine out of 100 every other similarly situated, taxed entity. FairPoint’s counsel defended this rational basis — and thus forms the basis for an equal protection claim — for erroneous failure to tax even one entity constitutes selective taxation without a arbitrary (i.e., without rational basis). To follow FairPoint’s reasoning, an and that such selection, because i t was based merely upon an error, is failure to tax one or more entities necessarily results in selective enforcement, required element of its equal protection claim. It contends that an erroneous FairPoint argues, to the contrary, that discriminatory intent is not a

added); see also Sunday Lake Iron Co., 247 U.S. at 3 p. 5 53. conscious, intentional discrimination.” Anderson, 155 N.H. at 499 (emphasis 353. “Instead, [FairPoint] must show that the selective enforcement was a will not support a claim of discrimination.” Sunday Lake Iron Co., 247 U.S. at historically lax.” Id. “It is also clear that mere errors of judgment by officials treatment, FairPoint “must show more than that the enforcement was merely that the City’s enforcement of the right - of - way tax constitutes selective tax concede that it singled out FairPoint for taxation. Because FairPoint alleges Anderson, 155 N.H. at 499. H ere, unlike in Rochester III, the City does not id. at 630 (quotation omitted), the selection itself must be intentional. See rule that an entity has been “select[ed] . . . out for discriminatory treatment,” (Emphasis a dded.) This argument overlooks the fact that, in order for us to rights - of - way violates the State Constitution’s guarantee of equal protection.” assess a right - of - way tax against all entities that use and occupy the public FairPoint argues that, following Rochester III, “a municipality’s failure to

N.H. at 631. discriminatory and violat [ed] our Equal Protection Clause.” Rochester III, 1 p. 5 56 concluded that Rochester’s “selective application” of the tax “[was] no rational reason for selectively imposing this tax upon Verizon,” we b ecause “[Rochester] offer [ed], the record reveal[ed], and we [could] conceive of, conscious, intentional discrimination,” Anderson, 155 N.H. at 499). Next, its terms, implied a con scious decision to treat Verizon differently (i.e., “a Verizon out” for taxation, id. at 629 (quotation omitted) — an allegation that, by — necessarily followed from Rochester’s failure to contest that it had “singled Rochester “[was] selectively applying RSA 72:23, I, against Verizon,” id. at 631 state interest,” id. at 630. Our initial determination in Rochester III — that 627, constituted “selective taxation . . . [not] rationally related to a legitimate “taxation of only Verizon for its use and occupancy of public property,” id. at this appeal. In Rochester III, we analyzed whether the City of Rochester’s basis test, as articulated in Rochester III — a case that it insists “control[s]” As an initial matter, we note that FairPoint m isconstrues our rational

Rochester III, 1 p. 5 5 p. 6 6 N.H. at 631 (quotations, citation, and br ackets omitted). the selection, whether or not the basis has a foundation in the record.” 6

violation. not address the parties’ arguments reg arding the appropriate remedy for an equal protection the court’s explicit finding that there was no rational basis for the selection. In addition, we need Because we hold that its implicit finding of selective taxation was in error, we need not address entities based on its misunderstanding of the law or its lack of diligence in investigat ing the facts.” argument that the City of Concord had a rational governmental interest in deciding not to tax the second step of the rational basis test. The court concluded that “[t]here can be no serious After implicitly finding that the City had selectively taxed FairPoint, the trial court proceeded to 3

DALIANIS, C. J., and CONBOY, LYNN, and BASSETT, JJ., c oncurred.

Federal Constitution as we do under the State Constitution. III, 15 p. 6 6 N.H. at 630 - 31. Accordingly, we reach the same result under the . . . .” (emphasis added) (quotations, citation, and ellips i s omitted)); Rochester intentional systematic undervaluation by state officials of comparable property the same class. We have no doubt that petitioners have suffered from such discriminatory treatment by subjecting him to taxes not imposed on others of clause protects the individual from state action which selects him out for Coal v. Webster County, 488 U.S. 336, 345 - 46 (1989) (“The equal protection the State Constitution under these circumstances. See Allegheny Pittsburgh The Federal Constitution offers FairPoint no greater protection than does

opinion. upon FairPoint, and remand for further proceedings consistent with this judgment in favor of FairPoint and (2) striking the right - of - way tax imposed III, 15 p. 6 6 N.H. at 631, we vacate the trial court’s rulings (1) granting summary ruling that the City selectively imposed the tax upon FairPoint, c f. Rochester 3 T hus, because the trial court applied an erroneous legal standard in

State v. Pepin, 159 N.H. 310, 313 (2009). Accordingly, we leave the issue to the trial court to address on remand. See FairPoint, and we decline to consider the issue in the first instance. not explicitly address whether the City intentionally discriminated against that FairPoint need not demonstrate discriminatory intent, the trial court did intentionally discriminated against FairPoint.” B ecause it ruled, erroneously, “the undisputed facts before the trial court demonstrated that [the City] demonstrate discriminatory intent to succeed on its equal protection claim, In the alternat ive, FairPoint argues that, even if it were required to

(“To accept the [respondent’s] argument would lead to absurd results.”). protection rights of taxpayers. Cf. Appeal of Hardy, 154 N.H. 805, 814 (2007) such errors in taxation, without intentional selection, violate the equal homeowners would have a valid equal protection claim. We do n ot a gree that homeowner was not taxed due to an error, each of the ninety - nine taxed