Introduction - Procedural History

I. Introduction

Plaintiffs, The Board of Education of Montgomery County, Alabama (the "Board") and the members of the Board brought this action seeking validation of the Board's Special Tax School Warrants, Series A (the "Warrants")(1) and a privilege tax ("Tax")(2).

The "Board" asserts its authority to issue the Warrants under Alabama law, and that the Montgomery County Commission (the "County Commission") legally passed a resolution authorizing a so called "occupational tax" (privilege tax) to raise revenues in support of the payment of the "Warrants." Accordingly, this Court entered an order setting forth deadlines for intervention, answering the complaint and for a final hearing.

A. Procedural History

This proceeding was initiated by the "Board" filing a complaint on August 19, 2002 in the Circuit Court of Montgomery County against the Taxpayers and Citizens of Montgomery County ("Taxpayers") to validate an "occupational tax" to be levied upon resident and non-resident individuals who work in Montgomery County. A hearing was held on August 19,2002, at which time procedures were established for interested parties to intervene and for notice to be given according to the statute commonly referred to as the "Bond Validation Procedure", Section 11-81-220, et seq.. Code of Alabama (1975).

The circuit clerk published notice in the Montgomery Advertiser once a week for three consecutive weeks beginning on August 22nd and ending on September 5th 2002.

On September 11, 2002, the "Board" filed a Motion to Dismiss or Alternatively a Motion to Strike Class Action Allegations asserted by the "Taxpayers."

On September 12, 2002, Notice of Desire to Be Heard was filed by Elebash Agricola, Matthew Givens, Bob McKee and Cynthia Wright as Taxpayers.

On September 13, 2002: 1) The court received Notice that the Montgomery Area Chamber of Commerce, the Montgomery Education Foundation, and the Montgomery Interdenominational Ministerial Alliance desired to be heard and/or to file Amicus Briefs in support of the complaint filed by the "Board", 2) Several Petitions to intervene were filed, 3) Interveners and Taxpayers filed a Motion for Temporary Restraining Order, 4) Elmore County filed a Motion to Intervene and a Complaint of Intervention, 5) Several Taxpayers of Montgomery County filed an Answer, Counterclaim and Cross- claim, 6) The Alabama State Employees' Association filed Motion to Intervene and one on behalf of J. Ray Warren, along with an Answer and a Counterclaim.

On September 13, 2002, the court granted the Board of Education's Motion to Amend the Complaint to add the Montgomery County, Alabama Commission as a defendant. The Court granted all Motions to Intervene except those on behalf of Elmore County and the Alabama State Employees' Association. The court granted the request of all entities wishing to file friend of the court briefs.

On September 18, 2002, the court denied the Taxpayers' Motion to Dismiss for lack of personal jurisdiction due to insufficient service process; the court found that the statute's scheme for service of process through publication in a newspaper of general circulation meets constitutional requirements. In addition, the court denied Elmore County's Motion to Intervene since it was not subject to the "Tax".

The District Attorney for Montgomery County, Alabama ("District Attorney") filed an Answer and a Motion for Summary Judgment as well as a Memorandum of Law in support of her Motion for Summary Judgment. The Board filed an Answer to all Counterclaims and Cross- claims and a Supplemental Motion to Dismiss, or. Alternatively, Motion to Strike Class Action Allegations. Taxpayers Bayles, Minor and Barksdale filed a Motion for Summary Judgment as well as a second Amended Answer, Counterclaim and Cross-Claim.

On October 11, 2002, a Motion for Class Certification was filed on behalf of the taxpayers. The court denied this motion for class certification on the grounds that the proceedings were in the nature of a class action therefore a Rule 23 Class Action was not necessary.

On October 28, 2002, an evidentiary hearing was held wherein the court took testimony and received evidence. The parties were allowed to file post- hearing briefs and to prepare proposed orders with Findings of Fact and Conclusions of Law.


(1)See Plaintiff's Exhibit 6A

(2)See Plaintiff's Exhibit 2