Opinion · Supreme Court of Oklahoma

Strelecki v. Oklahoma Tax Commission

Strelecki v. Okla. Tax Comm’n, 872 P.2d 910 (Okla. 1994)

Type
Opinion
Court
Supreme Court of Oklahoma
Jurisdiction
Oklahoma
Date
1994-03-23
Topic
litigation

OPALA, Justice.- The issue urged upon us on review is whether the new rule of federal law announced in Davis v. Michigan Dept, of Trea*911sury1 applies retroactively to require refunds — on Taxpayers’ timely claims for a correct amount — of state income tax overpay-ments on Taxpayers’ federal retirement income excludable under Davis? We answer in the affirmative. The U.S. Supreme Court’s recent jurisprudence in Harper v.

Citator

Strelecki v. Oklahoma Tax Commission has been questioned or limited by later authorities: relies on overruled authority: 103 L. Ed. 2d 334 (overruled by Edwards v. Vannoy). Read them before relying on it. 81 later decisions cite it.

Authority status
caution
Cited by
81 opinions
STRELECKI v. OKLAHOMA TAX COM'N,1993 OK 122
872 P.2d 910
JOSEPH L. STRELECKI, JUNE C. LANKFORD, LEETA LANKFORD, JAMES O. WORRELL,
NEAL W. HARRIS AND ELIZABETH B. HARRIS, APPELLANTS, v. OKLAHOMA TAX
COMMISSION, APPELLEE.
No. 77615.
Supreme Court of Oklahoma.
September 28, 1993.
Order Clarifying Opinion on Limited, Grant of Rehearing March 22, 1994;
As Corrected March 23, 1994.
On Appeal from the Oklahoma Tax Commission.

Retired federal employees appeal from the Oklahoma Tax Commission's order denying their claims for refund of state income tax paid under a state taxing scheme similar to that declared invalid by the U.S. Supreme Court inDavis v. MichiganDept. of Treasury.

THE TAX COMMISSION'S ORDER IS VACATED AND THE CAUSE REMANDED WITH DIRECTIONS
Kevin "D" Watley, Norman, and Michael J. Kator, Kator, Scott Heller, Washington, DC, for appellants.

E. Joe Lankford, Norman, for appellants June C. Lankford and Leeta Lankford.

David Hudson, Gen. Counsel, Stanley Johnston, First Asst. Gen. Counsel, Robert B. Struble, Asst. Gen. Counsel, Oklahoma Tax Com'n, Oklahoma City, for appellee.
OPALA, Justice.
[1] The issue urged upon us on review is whether thenew ruleof federal law announced inDavis v. Michigan Dept. ofTreasury1Page 911applies retroactively to require refunds — on Taxpayers'timelyclaims for acorrectamount — of state income tax overpayments on Taxpayers' federal retirement income excludable underDavis?We answer in the affirmative. The U.S. Supreme Court's recent jurisprudence inHarper v. Virginia Dept.of Taxation2— which applies the retroactivity analysis ofJames B. Beam Distilling Co. v. Georgia3—mandatesretroactive applicationof the nondiscrimination principle announced inDavis State law affords these Taxpayers the remedythey seek.
I
[2]THE ANATOMY OF LITIGATION
[3] The appellants [Taxpayers] are retired federal employees who received income from the United States during the years of 1985 through 1988 either as retired civil service employees or retired military personnel. During this period Taxpayers paid state taxes under Oklahoma income tax laws whose provisions subjected a portion of their civil service or military retirement income to state income tax while exempting from like taxation the retirement income of former state employees.4On March 28, 1989, the U.S. Supreme Court held inDavisa similar taxing scheme invalid.5FollowingDavis,Taxpayers timely filed amended returns, claiming refund ofvoluntary overpayments ofincome taxfor four years, 1985 through 1988, both inclusive —a period which represents the time immediately preceding theDavis opinion.6Responding toDavis,the OklahomaPage 912Legislature provided by its 1989 amendment identical tax treatment for both state and federal retirement income.7The General Counsel of the Oklahoma Tax Commission [Commission] opined thatDavismust be given purely prospective application.On the basis of this advice the Commission's Income Tax Divisiondenied Taxpayers' refund claims.8

[4] Taxpayerstimelyprotested and demanded a hearing before the Commission.9The Income Tax Division stipulated that (a) the claims weretimelyand the amounts claimed for refundingcorrectand (b)the final determination of the legal issuespresented by these claims would govern all similarly situatedtaxpayers who have timely sought a refund.10An administrative law judge found that the pre-1989 Oklahoma tax scheme was not in any significant way different from the taxation regime condemned inDavis.By applying the guidelines ofChevron Oil Co. v. Huson,11the judge concluded thatDavismust be givenpurely prospective application. TheCommission adopted this recommendation and denied theclaims.12Taxpayers appeal.13The dispositive issue pressed on appeal is whether wemust apply Davis retroactively.This question, answered mid-appeal by the U.S. Supreme Court inHarper,14will be discussed in Part III.Harper mandatesthat the Davis' teachings be extended to these Taxpayers.
II
[5]THEDAVIS v. MICHIGAN DEPT. OF TREASURY15PRINCIPLE OFNONDISCRIMINATION
[6] The Court inDavisreviewed a Michigan statute that exempted from state taxation all benefits paid by the state to its retired employees but taxed like benefits received from other employers, including the federal government. After paying state income taxes on his federal retirement benefits for several years, Paul Davis, a retired federal government employee and Michigan resident, challengedPage 913the state tax law as infirm. He argued that the disparate treatment of state and federal retirement benefits discriminated against federal retirees in violation of a U.S. statute,4 U.S.C. § 111.16The Michigan court upheld the state law. The U.S. Supreme Court struck it as invalid, holding the state tax statute violative both of § 111 and of the constitutional doctrine of intergovernmental tax immunity embodied in the Supremacy Clause of the U.S. Constitution.17After acknowledging the state's concession that a refund would be appropriate in the face of an adverse ruling, the Court stated that Davis would be due a refund. Its pronouncement neither discussed nor reserved for a later decision thetemporal pointofDavis'effectiveness.18
III
[7]THE RETROACTIVITY ANALYSIS OFHARPER V. VIRGINIA DEPT. OFTAXATION19
[8] The Virginia tax scheme, like that of Michigan and Oklahoma, exempted from state income taxation the retirement benefits of state and local government employees while levying an income tax on federal retirement benefits. Responding to theDaviscommand, Virginia repealed its preferential tax regime for state and local government employees. Petitioners, federal civil service and military retirees, sought a refund of taxes assessed by Virginia before the revision of its statutory scheme to meet theDaviscriteria. The Virginia Supreme Court denied relief to the petitioners,20concluding thatDavisshould not be applied retroactively in the light ofChevron21andAmerican Trucking Assns, Inc. v. Smith.22On certiorari, the U.S. Supreme Court ordered the Virginia Supreme Court to re-examine the petitioners' claim in keeping with its then recent pronouncement inBeam.23Beamrequires that a new federal rule have a retroactive application to claims arising from facts predating its decisional promulgation.24The Virginia court reaffirmed its own previous decision,25holding thatBeamdid not foreclose the continued use of the three-partChevron26testPage 914becauseDavis did not expressly decidewhether its rule applied retroactively.

[9] The U.S. Supreme Court granted certiorari a second time, reversing the Virginia judgment and giving retroactive effect to the nondiscrimination principle ofDavis.27The Court followed the retroactivity analysis inBeam: a new rule offederal law announced by the U.S. Supreme Court and applied tothe parties before it in a civil action must be given fullretroactive effect in all cases still open on direct review andas to all events that are not time-barred (capable of beinglitigated), regardless of whether they predate or postdate theannouncement of the rule(the so-called "pipeline rule").28This rule "extend[ed]Griffith'sban against `selective application of new rules'" to criminal cases.29
[10]The General Rule of Retroactivity—Its Birth, Erosion andRevival
[11] The Court notes inHarperthat both the common law and its own jurisprudence have long recognized a general rule of retroactivity for its constitutional decisions.30This principle was eroded inLinkletter v. Walker31where the Court developed a three-part test under which it could confine a new rule ofcriminal lawto prospective application.32In the civil context,Chevronsimilarly permitted the withholding of retroactive effect to a new principle of law.33Linkletterwas overruled inGriffith v. Kentucky34where the Court eliminated all limits on retroactivity of a new criminal-law rule.Griffith'steachings rest on (1) "basic norms of constitutional adjudication" — i.e., a selective application of new rules violates the principle of treating similarly situated parties the same — and (2) "the nature of judicial review," which strips the Court of the legislative prerogative to make rules of law retroactive or prospective as it sees fit.35

[12]Griffithdicta — that "civil retroactivity . . . continues to be governed by the standard announced inChevron"36— left the issue unsettled for civil cases. The Court confronted inSmith37the meaning of itsGriffithdicta.Smithwas a plurality opinion in which the Court considered whether to confine the application of a civil-law rule announced in an earlier case to events which predate that decision.38While inSmiththe Court wasPage 915split, its later opinion inBeamadopted a principle requiring retroactive application of a newcivil-law (noncriminal) rule that was applied to the parties inthe case in which it was announced.

[13]Beam's Implied Retroactivity Analysis39

[14]Harper, which governs us here, gave controlling effect toBeam's retroactivity jurisprudence.The issue inBeamwas whether the new constitutional rule announced inBacchusImports, Ltd. v. Dias40should apply retroactively.Bacchushad held a Hawaiian statute violative of the Commerce Clause.41The offending state enactment imposed a higher excise tax on imported alcoholic products than on those produced within the state.Bacchusapplied the new rule to the parties before it,but was silentas to the opinion's backward or forward reach. FollowingBacchus,the James B. Beam Distilling Company sought a refund of taxes imposed on alcoholic beverages by a Georgia statute similar to that condemned inBacchus.The state court struck the Georgia law, but after using aChevronanalysis, refused to giveBacchusthe sought-for retroactive effect.42On certiorari, the U.S. Supreme Court'spluralityreversed the Georgia judgment, declaring that the state court had erred in refusing to give retroactivity to a previously announced federal-law rule which had been applied to the litigants in the prior case.43Beam, whose retroactivity teaching garneredsix votes,holds thatretroactivity is the general rule ofconstitutional jurisprudence.44In the aftermath ofBeamand untilHarperwas pronounced, state courts were divided on whether retroactivity may be implied when the U.S. Supreme Court's decision has not squarely addressed the issue.45Page 916

[15]Harperconcludes that when the "Court does not `reserve the question whether its holding should be applied to the parties before it,' . . . an opinion announcing a rule of federal law `is properly understood to have followed the normal rule ofretroactive application'and must be `read to hold. . . thatits rule should apply retroactively to the litigants then beforethe Court.'"46Moreover, "the legal imperative `to apply a rule of federal law retroactively after the case announcing the rule has already done so' must `prevai[l] over any claim based on aChevron Oilanalysis.'"47Page 917
IV

[16]OKLAHOMA'S PRE-1989 TAX SCHEME

[17] Our task here is to examine the pre-1989 statutory tax scheme in contest below.48The Commission,quaadministrative agency, is powerless to strike down a statute for constitutional repugnancy. Within the framework of Oklahoma's tripartite distribution of government powers, the authority to invalidate a constitutionally infirm enactment resides solely in the judicial department.49Every statute is hencepresumedconstitutionally valid until a court of competent jurisdiction has declared otherwise. The Income Tax Division stipulated below, and the Commission found, that no significant legal distinction exists between Oklahoma's income tax scheme in effect for the tax years 1985 through 1988 and the condemned Michigan tax-law regime invalidated inDavis. The plain teachings of Davis and Harpercommand us today to hold the pre-1989 income tax frameworkinvalid insofar as it discriminated against federal retirees'income and, in conformity to the strictures of Harper, giveretroactive effect to Davis.
V

[18]THE TAXPAYERS' REFUND REMEDY

A.
[19]Refund Claims For Pre-Davis and Post-Davis Overpayments
[20] The Commission asserts thattwo kinds of taxpayer claimsare involved in this case and the law applicable to each is different. Thefirstcategory is taxpayerWorrell's refundclaim for a post-Davis overpayment made under protestof additional taxes proposed to be assessed on his 1988 return. Because Worrell availed himself of the statutory protest procedure to his protestDavisis acknowledged to apply retroactively.50This muchonlythe Commission is willing to concede in its post-Harperadvocacy. For theothercategory of claims — i.e.,refund claims for pre-Davis voluntaryoverpayment of taxes without protest— the Commission argues that a refund is neither required by federal due process strictures nor available under Oklahoma law. In essence, the Commission's post-Harperposition is that all pre-Davisoverpayments arenonrefundableunless made under protest. For the reasons stated in Part V(D) and (E), we reject this argument as contrary toHarper51and to the notions of due processin Art. 2, § 7, Okla. Const.52Page 918
B.
[21]The Commission May Not Be Relieved Of Its Pre-HarperProcedural Posture
[22] AfterHarperdeclaredDavisretroactive, Taxpayers sought "summary reversal" of the Commission's denial of their refund claims. This court directed the parties to show cause why in disposing of this case we should not hold the Commission bound by the unequivocal terms of its pre-Harperstipulations below.53

[23] The Commission responded that its stipulations were merely "for pre-hearing housekeeping purposes". According to the Commission, a refund of taxes is neither mandated by the teachings ofHarpernor required by state law when the tax wasvoluntarilypaidwithout protest under a statute later declared unconstitutional. Taxpayers characterize the Commission's post-Harperargument as "new-found" and a "last gasp effort at the eleventh hour".

[24] Our review of the record indicates that the Commission's pre-Harperand post-Harperpositionson two critical issuesare vastly different and materially inconsistent. First, the Income Tax Division asserted in its prehearing "position memorandum" filed below that the issue is whetherDavisis to "apply retroactively torequire the Oklahoma Tax Commission torefund or exclude taxespaid on federal retirement income for [the tax] years 1984, 1985, 1986, 1987 and 1988."54Its post-hearing brief similarly states that the"taxpayers will beentitled to a refund or abatement of the taxes in question, if,and only if, the decision in Davis is to have retroactiveeffect."55The Commission's pre-Harper answer brief onappeal unequivocally articulates the same proposition.56

[25] The second inconsistency is found in materials attached to the Income Tax Division's pre-hearing brief filed below in support of its objection to taxpayer Worrell's quest for suspension of Commission proceedings until the termination of his district court action for refund. These materials included a motion to dismiss and a brief the Commission had filed in Worrell's district court case.57In its district court brief the Commission had argued that the Uniform Tax ProcedurePage 919Code58provides the exclusive "remedies and procedures for taxpayers to challenge allegedly illegal or unconstitutional taxes, and for the recovery or refund of such taxes already paid."59The brief informed the district court thatthree statutory remediesare available. When the Commission proposes to assess additional or delinquent taxes against a taxpayer and the taxpayer complains that the tax isillegal,the taxpayer can either (1) protest the assessment and receive a full hearing60(2) or pay the tax under protest and give notice of his intent to file suit in the district court.61But where"a taxpayer has voluntarilyreported and paid his taxes without protest, and the tax issubsequently found to be illegal or unconstitutional, thetaxpayer has a different remedy. The taxpayer must file a claimfor refund with the Tax Commission, and he is precluded fromresorting to the courts until a final Commission order is enteredon his claim."62In support of this last remedy the Commission's brief cited and relied upon two Oklahoma decisions.63and the provisions of 68 O.S. 1981 § 2373[68-2373].64This statement materially differs from the assertions in theCommission's post-Harper supplemental appellate brief.In the latter document counsel represents that Oklahoma's statutory scheme providesonly twostatutory remedies for a refund of taxes paid under an unconstitutional taxing scheme. Implicit in this post-Harperargument is the notion that state law leaves the Commission without authority to refundvoluntaryoverpayments (tax paid without protest) of income tax.

[26] A party on appeal cannot take a position inconsistent with that maintained before a trial tribunal.65While this court may decide a public-law case on dispositive issues,66it will not relieve a party of a solemn commitment to a position argued both below and on appeal unless it is so contrary to the applicable law that it would amount to anultra viresact.67We hence hold that the Commission is boundin this case(1) by the Income Tax Division's pre-Harperposition, below and on appeal, that Taxpayers are entitled to a refund of overpaymentif Davisis retroactive,and (2) by its procedural posture below that the statutory scheme does allow TaxpayersPage 920to seek atimely refundof taxes voluntarily paid under a clearly unconstitutional statute. The Commission now attempts to relitigate the remedial correctness of the refund claims on inconsistent theories. It has lulledtheseTaxpayers into a false sense of security by inducing their belief that the voluntary overpayments claimed to be due would be refunded ifHarpergave retroactive effect toDavis. The Commission will not be heard— at this late hour — to deny liability upon achangedinterpretation of the state's remedial regime for refunds. The government stands before us on the footing of anordinary appellee.It will not receive a more favorable treatment than that afforded other appellate litigants in a similar situation.

[27] Even if we assumed that legislative silence on refundability of voluntary income tax overpayments operates as a bar to the Commission's consideration of such claims (and hence points to its lack of authority to maintain the pre-Harperposition), the refund bar the Commission urges against claims of pre-Davisvoluntary overpayment would be constitutionally infirm.
C.

[28]The Commission's Construction Would Nullify or RenderMeaningless an Overplaying Taxpayer's Statutory Opportunity toAmend an Income Tax Return

[29] Assuming for argument's sake the Commission is correct that a person voluntarily overpaying income tax may not seek a refund, its position would be inconsistent with a taxpayer's § 2375 statutory opportunity to amendupwardordownwardan incorrect income tax return.68Under the Commission's construction of the remedial regime for refundability, a downward amendment would be but a vain exercise because only an upward amendment could become effective. Amended returns, if they were to show overpayment, would be for naught, but the government could collect if any amendment were to reflect underpayment. This interpretation would give § 2373 an absurd meaning. A taxpayercouldamend a return, but unless the self-assessed tax due had been underpaid, he could never benefit from the corrected return. It would be indeed absurd for us to hold that, though a taxpayer mayamend a return, he/she can never recaptureany overpayment, no matter how timely the refund was sought.

[30] It is a well-settled principle of statutory construction that, where possible, courts will not allow statutes to have absurd or discriminatory consequences. Construction that would lead to an absurdity or to discriminatory treatment will be avoided if this can be done without violating legislative intent.69In order to give § 2373 its intended effect, we must adopt the meaning that would uphold its constitutionality.70In this resolve we are also supported by the law's command that tax statutes be strictly construed against the state.71Any doubt as to their possible meaning must be resolved in favor of the taxpayer.72Page 921
D.

[31]The Statutory Construction of Oklahoma's Remedial Regime ForTax Refunds, which the Commission Urges For Our Adoption,Would Make The Regime Vulnerable To a Due Process Attack

[32] The Commission's post-Harperbriefs arguefor the first timeon appealthat Taxpayersdid not invoke the several remediesthat were available.The uninvoked remedies, which we are told meet theHarperfederal due process requirements, are (a) two statutory remedies (not three as asserted in the district court)73which may be pursued when the Commission proposes to assess an illegal or unconstitutional tax, (b) in cases where no assessment has been proposed, no Commission order issued, and no taxes are due, a declaratory action would lie to challenge the constitutionality of a tax to which a taxpayer is subject,74and (c) a prerogative writ could be sought to enjoin the collection of taxes determined to be unconstitutional.75

[33] The Commissionassertsthatnothingin the applicable income tax refund statute, § 2373,76provides guidance to identifying the specific grounds on which a refund may be due.In the face of legislative silence, the Commission concludesthat it is not unreasonable to assume the state has not providedfor any relief beyond that necessarily imposed by federal dueprocess.By drawing an analogy to the general statute, 68 O.S. 1981 § 227[68-227], which provides for refunding of taxes"erroneouslypaid through error of fact, or computation, or misinterpretationof law,"77the Commission concludes that there is noauthority for refunding voluntary income tax overpayments madebefore Davis.

[34] We cannot accede to the Commission's § 2373 analysis — that under our system of self-assessment for income tax liability, taxpayers who voluntarily overpay on the assumption that no exemption applies do so at their own peril. In our view, § 2373does not barrefund to taxpayers who voluntarily overpaidunder presumptively valid statutesand then timely made refund claimsaftera judicial pronouncement of the statute's infirmity. To hold otherwise would violate the anti-discrimination component of our state constitution's due process clause.78The construction pressed upon us wouldmake a pre-Davis voluntary overpayment perpetually irremediable.Where there are two possible interpretations of a statute, only one of which would render the enactment unconstitutional, the court should follow that which upholds the validity of legislative law.79The fundamental law's command would indeed be violated if we were to construe § 2373's silence as erecting an insuperable bar to refundability ofvoluntaryoverpayments. We hence adopt today that construction which ensures the refund regime's constitutionality.
E.
[35]The Due Process Teachings of Harper
[36] InHarperthe Court observes that the constitutional sufficiency of any refund remedyPage 922initially turns on whether state law provides an adequate form of "`predeprivation process,' for example, by authorizing taxpayers to bring suit to enjoin imposition of a tax prior to its payment, or by allowing taxpayers to withhold payment and then interpose their objections as defenses in a tax enforcement proceeding."80

[37] What the High Court doubtless meant by its quoted language is that the taxpayer must be afforded an adequate opportunity to secure relief from the burden imposed by a constitutionally infirm tax statute. Were we to accept the Commission's argument, consideration would be foreclosed to all refund claims based on overpayment caused by a yet undeclaredconstitutional infirmityin the state tax structure. The urged-for construction clearly would make our law vulnerable to a due process attack. Taxpayers would be subjected to anincontestable loss of property contraryto the Court-declared state obligation. "[T]he Due Process Clauseof the Fourteenth Amendment obligates the State to providemeaningful backward-looking relief to rectify anyunconstitutional deprivation. . . . In providing such relief, aState may either award full refunds to those burdened by anunlawful tax or issue some other order that `create[s] inhindsight a nondiscriminatory scheme.'"81(Emphasis ours.)
[38]SUMMARY
[39] BecauseHarpermandates thatDavisbe applied retroactively, Taxpayers are entitled to the refund they seek. The Income Tax Division stipulated below to thecorrectness andtimelinessof the refund claims here in contest and retained this position until its post-Harperchange of mind. For the reasons stated in the opinion, the Commissionmustbe held bound by its earlier position. We hence remandthis causeto the agency whence it came with directions to allow Taxpayers' timely refund claims together with such interest,82if any, that is their due under the applicable state law.83Today'spronouncement addresses only the rights of the six Taxpayersbefore us. We express no opinion on the timeliness or correctnessof any other claims for refund.

[40] THE TAX COMMISSION'S ORDER IS VACATED AND THE CAUSE REMANDED WITH DIRECTIONS.

[41] LAVENDER, V.C.J., and SIMMS, HARGRAVE, ALMA WILSON, SUMMERS and WATT, JJ., concur;

[42] HODGES, C.J., concurs in result.

[43] KAUGER, J., concurs specially.
[44] KAUGER, Justice, concurring in result:
[45] I agree with the Court's adoption of retroactivity as the general rule for jurisprudential application based onHarper v.Virginia Dep't of Taxation,509 U.S. ___, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993).1However, IPage 923write separately to emphasize that this practical, predictable and equitable approach could have been adopted six years ago whenHarry R. Carlile Trust v.Cotton Petroleum Corp.,732 P.2d 438, 450 (Okla. 1987),cert.denied,483 U.S. 1007, 1021, 107 S.Ct. 3232, 3265, 97 L.Ed.2d 738, 764 (1987) was promulgated. Because the only viable issue addressed concerns retroactive application of a Supreme Court decision, today's opinion would have been unnecessary had the issue been resolved in favor of retroactivity inCottonPetroleum.InCotton Petroleum,I dissented to the majority's adoption of a completely prospective application of the opinion. I was joined by my colleague, Justice Summers, in my concern that consistency and predictability be accorded our rulings. Today's adoption of the general rule of retroactive application will accomplish that goal.

[46] Just as there was no justification in 1987, to withhold the benefits of a new rule from the prevailing party or those similarly situated litigants who properly preserve the issue on appeal, there is none in 1993. Application of the pipeline doctrine to only those cases considered direct appeals creates an unnecessary distinction without a difference.2Parties, whether on direct appeal or in a collateral proceeding, seek to enforce individual rights. Litigants should not be treated disparately. When litigants begin in the same starting blocks, have vision enough to foresee the change, timely assert and protest their rights, and establish their legal position in the appellate pipeline, all should be entitled to share in the fruits of victory of a favorable judicial decision.
[47]CORRECTED ORDER OF CLARIFICATION
HODGES, Chief Justice.
[48] Appellee's petition for rehearing is granted for the limited purpose of clarifying the applicability of our opinion herein published at 64 O.B.J. 2885 (10/2/93). In all other respects, rehearing is denied. Appellee's motion for oral argument is denied.

[49] The OTC asks us to clarify whether our opinion determines the rights and remedies of the parties to this appealorof all taxpayers who, on or before April 15, 1989, filed claims for refund of income taxes voluntarily paid on their civil service or military income for the 1985 and/or subsequent tax years. The OTC stipulated, as recited in Part I of our opinion, that the final determination of the legal issues presented by these claims would govern all similarly situated taxpayers who have timely sought a refund and represented to this Court that the OTC had administratively consolidated the cases of more than 30,000 taxpayers, apparently through a procedure similar to the agreement to abide in 68 O.S. 1991 § 226[68-226](d).

[50] In the last paragraph of Part V, D. of our opinion, we concluded that "§ 2373does not barrefund to taxpayers who voluntarily overpaidunder presumptively valid statutesand then timely made refund claimsaftera judicial pronouncement of the statute's infirmity. To hold otherwise would violate the anti-discrimination component of our state constitution's due process clause." Stated another way, for purposes of clarification, § 2373 of Title 68 of the Oklahoma Statutes permits an income taxpayer to give notice of an overpayment and claim a refund of any portion of income taxes voluntarily reported and paid during the three years immediately preceding the date of notice to the Oklahoma Tax Commission of the overpayment and refund claim.

[51] The legal conclusion as to § 2373 in Part V, D. of our opinion is binding on the appellee in other proceedings on refund claims ofPage 924taxpayers who gave notice of an overpayment and claim for refund of income taxes reported and paid during the three years immediately preceding the date of the notice thereof to the OTC.Kay Electric Cooperative v. State ex rel. Oklahoma TaxCommission,815 P.2d 175(Okla. 1991). That is, the refund provisions of § 2373 provide aremedyfor the six taxpayers who are parties hereto and to any other taxpayer who reported and paid income taxes on federal civil service and military retirement income for the 1985 tax year and gave notice of the overpayment and claim for refund before the expiration of three years from the report date for the 1985 tax year or three years from April 15, 1986; for the 1986 tax year if the notice of claim was submitted on or before April 15, 1990; and for the 1987 tax year if the notice of claim was submitted on or before April 15, 1991.

[52] As stated in the Summary to our opinion, thetimeliness andmathematical correctnessof the overpayments and refunds claimed by the six taxpayers who are parties hereto were agreed to by stipulation. Our opinion determines that the six taxpayer/parties have arightto the refund of the stipulated amounts of overpayments. The timeliness and mathematical correctness of the overpayments and refunds claimed by similarly situated taxpayers who are not parties hereto have not been determined by the OTC and are not before us. Neither our opinion nor this order determines therightof any taxpayer other than the six taxpayer/parties to a refund. Because we have determined that the refundremedyprovided in § 2373 is available to all similarly situated taxpayers, the OTC is directed to proceed to process the refund claims submitted by similarly situated taxpayers and determine the timeliness of the notices of claim and mathematical correctness of the claimed overpayments.

[53] In light of our clarified conclusion that the Legislature has provided a refund mechanism to all taxpayers timely submitting claims under § 2373 of Title 68, it is unnecessary to determine the adequacy of other taxpayer remedies under the Due Process Clause of the Fourteenth Amendment.

[54] DONE BY ORDER OF THE COURT IN CONFERENCE this 17th day of March, 1994.

[55] HODGES, C.J., and SIMMS, HARGRAVE, OPALA and WILSON, JJ., concur.

[56] LAVENDER, V.C.J., and KAUGER, SUMMERS and WATT, JJ., concur in part and dissent in part.
[57] SUMMERS, Justice, dissenting to the Order of Clarification but otherwise concurring in denial of rehearing.
[58] The Order of Clarification states that the opinion is binding on the Tax Commission "in other proceedings on refund claims of taxpayers who gave notice of an overpayment and claim a refund of income taxes reported and paid during three years immediately preceding the date of the notice thereof to the OTC." This language reflects an improper expansion of judicial power.

[59] Our opinion in this case states"Today's pronouncementaddresses only the six claims before us. We express no opinion onthe refundability or correctness of other claims."InKayElectric Cooperative v. State ex rel. Okla. Tax Commission,815 P.2d 175(Okla. 1991), we likewise stated that "This Court's opinion in the present appeal is only binding on the entities which are parties to the actions."Id.,815 P.2d at 178. Obviously, a taxpayer who is not before this Court in the present case is not denied his or her day in court, and remains free to make any legal arguments he or she chooses in other Tax Commission proceedings.Id.Does the same rule apply to the Tax Commission, or is it somehow singled out for different treatment? I maintain the Tax Commission is bound by the opinion, but only to the same extent as any other party.

[60] The exercise of judicial power in a particular case is limited to those parties actually before the court in that proceeding, and this limitation is imposed by the Due Process Clause.Fordv. Ford,766 P.2d 950, 954 (Okla. 1989). The Court today states that certain taxpayers not before us are "similarly situated" to those who are, and that the Tax Commission should pay the claims of thesePage 925similarly situated taxpayers. The Order of Clarification thus transmutes the proceeding into a type of class action, in that it gives judicial relief to members of a class of taxpayers. See the description of class actions in 12 O.S. 1991 § 2022[12-2022]. We have held that a class action to restrain the collection of a tax, or to "roll back" assessed taxes, is improper.WhigSyndicate, Inc. v. Keyes,836 P.2d 1283, 1287-1288 (Okla. 1992). No class has been certified, and no arguments are before this Court that such a class should be, or could be, certified in a proceeding such as this.

[61] The opinion thus grants relief beyond that framed by the parties before us. We have stated that we may raise an issuesuaspontewhen certain conditions are present. For example, in a public-law controversy on an issue actually raised by a party the Court may supply the theory.First Federal Savings Loan v.Nath,839 P.2d 1336, 1343 n. 35 (Okla. 1992).1Clearly, this controversy over the extent to which payments from state funds are due these taxpayers based on the U.S. Constitution presents a public-law controversy.2But the issue as to whether the scope of the opinion should be enlarged to embrace nonparties so as to provide them relief is raised on a petition for rehearing. Just as this Court in its opinion stated that the Tax Commission was held to its previous arguments, likewise the belated attempt by the taxpayers to expand the reach of judicial process in this case should be rejected as waived.3

[62] InKamen v. Kemper Financial Services, Inc.,500 U.S. 90, ___, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991) the Supreme Court stated it could explore theories not advanced by the parties. The Court also explained that when legal theories relevant to a controversy are not examined "truncated law" results. Clearly, a court may decline to examine an untimely claim, and thus an opinion may properly express truncated law.4The Court inKamenexplained, however, that an opinionPage 926resting on truncated law should not be used as binding precedent as to theories not examined in the opinion.Id.,500 U.S. at ___ n. 5, 111 S.Ct. at 1718 n. 5. Likewise, our opinion should not be used as binding precedent as to theories not addressed.

[63] Our opinion here declined to address certain theories because they were not timely preserved by the Tax Commission. The opinion thus embodies truncated law to the extent that any such theories were not adjudicated. If perchance the Tax Commission had a viable argument on a theory not addressed in our opinion (for the reason that we held the Tax Commission bound by its earlier assertions, e.g.), and that theory if properly advanced could result in not paying certain taxpayers a refund in a similar situation, today's order on rehearing would incorrectly result in a perpetuation of truncated law at the expense of the State treasury. Neither the Tax Commission nor any other parties should be bound in the future as to issues not addressed in tax opinions unless and until an articulated reason for doing so, such asresjudicata,has been established by this Court.5

[64] The Tax Commission is bound by a judgment and must comply with it.Branch Trucking Co. v. State ex rel. Oklahoma TaxCommission,801 P.2d 686, 690-691 (Okla. 1990). However, as we noted inBranchthe scope of a judgment, i.e., judicial relief, is determined and limited by the nature of the proceeding before the court. There we explained that the Court did not have the authority to issue a refund because the judicial proceeding was brought to determine the validity of a Commission order, as opposed to a protest.Id.at 691. Similarly, in this case, we are limited to granting relief to those persons who are parties, i.e., those who are before us in this case. I dissent from the Order of Clarification insofar as it adjudicates the duty of the Tax Commission to pay other taxpayers' claims not before the Court in this proceeding.

[65] Vice Chief Justice LAVENDER, Justice KAUGER and Justice WATT advise that they join in these views.
  1. 489 U.S. 803, 109 S.Ct. 1500, 103 L.Ed.2d 891 (1989). For a discussion of theDavisrule, see Part II,infra. ↩
  2. 509 U.S. ___, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993) (Thomas, J., delivered the opinion of the Court, in which Blackmun, Stevens, Scalia and Souter, JJ., joined, and in Parts I and III of which White and Kennedy, JJ., joined. Scalia, J., filed a concurring opinion. Kennedy, J., filed an opinion concurring in part, and concurring in the judgment, in which White, J., joined. O'Connor, J., filed a dissenting opinion, in which Rehnquist, C.J., joined.). ↩
  3. 501 U.S. ___, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991). ↩
  4. The terms of 74 O.S. 1981 § 923[74-923] of the "Public Employees Retirement System Act" provided in part:

    ". . . Any annuity, benefits, fund, property, or rights created by or accruing to any person under the provisions of this actare hereby made and declaredexempt from any taxof the State of Oklahoma or any political subdivision or taxing body thereof, . . ." (Emphasis added.)

    The legislature eliminated the quoted provisions of § 923 in 1989 (Okla.Sess.L. 1989, Ch. 249, § 44, eff. Jan. 1, 1989).

    In contrast, 68 O.S.Supp. 1982 § 2358[68-2358](C)(9) of the Oklahoma Income Tax Act provided:

    "For all tax years beginning after December 31, 1981, taxable income and adjusted gross income shall be adjusted to arrive at Oklahoma taxable income and Oklahoma adjusted gross income as required by this section.

    * * * * * *

    C. The Oklahoma adjusted gross income of any individual taxpayers shall be further adjusted as follows to arrive at Oklahoma taxable income.

    * * * * * *

    (9)Retirement benefits not to exceed Four ThousandDollars ($4,000.00), which are received by anindividual from the civil service of the UnitedStates, shall be exempt from taxable income." (Emphasis added.)

    The quoted provisions of 68 O.S.Supp. 1982 § 2358[68-2358](C)(9) were amended in 1989 (Okla.Sess.L. 1989, Ch. 249, § 39, eff. Jan. 1, 1989). The pertinent terms of 68 O.S.Supp. 1989 § 2358[68-2358](D)(9) are:

    "9. Retirement benefits not to exceed Five Thousand Five Hundred Dollars ($5,500.00), which are received by an individual from the civil service of the United States, any component of the Armed Forces of the United States, the Oklahoma Public Employees Retirement System. . . shall be exempt from taxable income."

    The quoted language was not changed by the 1990, 1991 or 1992 amendments. ↩
  5. The Income Tax Division stipulated that, prior to its amendment in 1989, the Oklahoma income tax scheme was not legally different in any significant manner from Michigan's tax regime which the Court declared invalid inDavis, supra,note 1.SeeRecord pages 6, 494. ↩
  6. Only refunds for the years 1985 through 1988 were sought. Taxes had been assessed for the years 1985-1987 whenDaviswas handed down on March 28, 1989. Claims for refund of taxes paid for the years before 1985 were conceded to be time barred under the applicable statute of limitations.See68 O.S. 1981 § 2373[68-2373],infranote 64.

    The administrative law judge found that Taxpayers submitted the following income tax refund claims:

    1) Mr. Strelecki's claim is for the period of January 1, 1985 through December 31, 1985 in the total amount of $1,534.00. This represents the amount of Oklahoma income tax paid on his military retirement income received in 1985.

    2) Mr. and Mrs. Lankford's claims are for the periods of January 1, 1985 through December 31, 1985; January 1, 1986 through December 31, 1986; January 1, 1987 through December 31, 1987; and January 1, 1988 through December 31, 1988. The total amount sought was $8,491.00. This represents the amount of Oklahoma income tax paid on the civil service retirement income received by them during these years.

    3) Mr. Worrell's claims are for the periods of January 1, 1985 through December 31, 1985; January 1, 1986 through December 31, 1986; January 1, 1987 through December 31, 1987; January 1, 1988 through December 31, 1988. During this four-year period, he paid a total of $7,229.00 in taxes on his civil service retirement income. Mr. Worrell had filed a refund claim forvoluntaryoverpayments on his returns for the years 1985 through 1987;he alsopaid under protest the assessment of his 1988 taxes.

    4) Mr. and Mrs. Harris' claim is for the period of January 1, 1985 through December 31, 1985 in the total amount of $977.00. This represents the amount of Oklahoma income tax paid on the military retirement income received by them during 1985. ↩
  7. See68 O.S.Supp. 1989 § 2358[68-2358](D)(9),supranote 4. ↩
  8. Record at 496. ↩
  9. The pertinent terms of 68 O.S. 1981 § 207[68-207] are:

    "(a). . . the Tax Commission shall have the power to . . . conduct hearings. . . .

    * * * * * *

    (c) Any person desiring a hearing before the Tax Commission shall file an application for such hearing * * *" ↩
  10. Record at 6, 11. ↩
  11. 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971). ↩
  12. SeeRecord at 529 (Oklahoma Tax Commission Order No. 91-04-25-007). ↩
  13. Appeals from the Oklahoma Tax Commission are governed by 68 O.S. 1981 § 225[68-225]; its pertinent terms are:

    "(a) Any taxpayer aggrieved by any order, ruling, or finding of the Tax Commission directly affecting such taxpayer may appeal therefrom directly to the Supreme Court of Oklahoma. * * *"

    The quoted portions were not substantively changed by the 1989 and 1991 amendments. ↩
  14. Supranote 2. ↩
  15. Davis, supranote 1. ↩
  16. Davis, supranote 1, 489 U.S. at 806-807, 109 S.Ct. at 1503. The terms of4 U.S.C. § 111are:

    "The United States consents to the taxation of pay or compensation for personal service as an officer or employee of the United States. . . by a duly constituted taxing authority having jurisdiction, if the taxation does not discriminate against the officer or employee because of the source of the pay or compensation." ↩
  17. Davis, supranote 1, 489 U.S. at 817, 109 S.Ct. at 1507.Seethe Supremacy Clause, Art. 6, cl. 2, U.S. Const. ↩
  18. Davis, supranote 1, 489 U.S. at 817, 109 S.Ct. at 1508-09. For a recent decision that followed the teachings ofDavis,seeBarker v. Kansas,503 U.S. ___, 112 S.Ct. at 1619, 118 L.Ed.2d 243 (1992).Barkerholds that a state violates intergovernmental tax immunity and4 U.S.C. § 111when it taxes the benefits received from the United States by military retirees but does not tax the benefits received by retired state and local government employees. ↩
  19. Harper, supranote 2. ↩
  20. 241 Va. 232,401 S.E.2d 868(1991) [Harper I]. ↩
  21. Chevron, supranote 11. ↩
  22. 496 U.S. 167, 110 S.Ct. 2323, 110 L.Ed.2d 148 (1990) (a plurality opinion).Seediscussion in note 38,infra. ↩
  23. Beam, supranote 3. ↩
  24. Harper v. Virginia Dept. of Taxation,501 U.S. ___, 111 S.Ct. 2883, 115 L.Ed.2d 1049 (1991). ↩
  25. 242 Va. 322,410 S.E.2d 629(1991) [Harper II]. ↩
  26. InChevron, supranote 11, the Court isolated three factors for ascertainingwhen retroactivity of a newpronouncement could be restricted:(1) at the threshold, the decision must establish a new principle of law, whether by overruling clear past precedent on which litigants may have relied, or on an issue of first impression whose decision is not clearly foreshadowed; (2) the court must weigh the merits and demerits of applying the rule retroactively by considering the rule's prior history, its purposes and effect, and whether retroactivity will further or retard its operation; (3) the court must consider the inequity flowing from retroactive application, including unfairness and hardship to the parties.Id.,404 U.S. at 106-107, 92 S.Ct. at 355.

    This court has adopted and applied theChevrontest.SeePrivate Truck Council v. Tax Com'n, Okla.,806 P.2d 598, 608-610 (1991);First of McAlester Corp. v. Okla. Tax Com'n, Okla.,709 P.2d 1026, 1034-1036 (1985);Griggs v. State ex rel. Okla. Dept.of Transp., Okla.,702 P.2d 1017, 1020-1021 (1985). ↩
  27. 504 U.S. ___, 112, S.Ct. 1934, 118 L.Ed.2d 541 (1992), limiting the issues on certiorari, 504 U.S. ___, 112 S.Ct. 2298, 119 L.Ed.2d 222 (1992). ↩
  28. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2517. For a discussion of the so-called "pipeline doctrine," seeinfranotes 44 and 47. ↩
  29. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2517 (quoting fromGriffith v. Kentucky,479 U.S. 314, 323, 107 S.Ct. 708, 713, 93 L.Ed.2d 649 (1987). ↩
  30. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2516 (citingRobinson v. Neil,409 U.S. 505, 507, 93 S.Ct. 876, 877, 35 L.Ed.2d 29 (1973), andKuhn v. Fairmont Coal Co.,215 U.S. 349, 372, 30 S.Ct. 140, 148, 54 L.Ed.2d 228 (1910) (Holmes, J., dissenting). ↩
  31. 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965). ↩
  32. Linkletter, supranote 31, teaches that a decision to confine a new rule to prospective application may be rested on the purpose of the new rule, the reliance placed upon the previous view of the law, and the effect on the administration of justice of a retrospective application of the new rule.Id.,381 U.S. at 636, 85 S.Ct. at 1741. ↩
  33. Chevron, supranote 11;seediscussion of the three-part test,supranote 26. ↩
  34. Supranote 29. ↩
  35. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2516 (quoting fromGriffith, supranote 29, 479 U.S. at 323, 107 S.Ct. at 713;see also Teague v. Lane,489 U.S. 288, 317, 109 S.Ct. 1060, 1079, 103 L.Ed.2d 334 (1989) (White, J., concurring in part and concurring in judgment). ↩
  36. Griffith, supranote 29, 479 U.S. at 321, n. 8, 107 S.Ct. at 712 n. 8. ↩
  37. Smith, supranote 22. ↩
  38. TheSmithplurality opinion used theChevrontest to consider whether to confine the application ofAmerican TruckingAssns. v. Scheiner,483 U.S. 266, 107 S.Ct. 2829, 97 L.Ed.2d 226 (1987), to taxation of highway use prior to June 23, 1987, the date the Court decidedScheiner,Opinion of O'Connor, J., joined by Rehnquist, C.J., and White and Kennedy, JJ. Four other justices rejected the plurality's anomalous approach to retroactivity (Stevens, J., dissenting, joined by Brennan, Marshall, and Blackmun, JJ.). Justice Scalia concurred in the judgment, although he "share[d]" the dissent's "perception that prospective decisionmaking is incompatible with the judicial role."Smith, supranote 22, 496 U.S. at 200, 110 S.Ct. at 2343. ↩
  39. Beam, supranote 3. ↩
  40. 468 U.S. 263, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984). ↩
  41. Bacchus, supranote 40, 468 U.S. at 273, 104 S.Ct. at 3056. The terms of the Commerce Clause, Art. 1, § 8, cl. 3, U.S. Const., are: "Congress shall have the power to regulate commerce with foreign Nations, and among the several States, and with the Indian Tribes." ↩
  42. Beam, supranote 3, 501 U.S. at ___, 111 S.Ct. at 2442. ↩
  43. Beam, supranote 3, 501 U.S. at ___, 111 S.Ct. at 2446. ↩
  44. Beam, supranote 3, 501 U.S. at ___, 111 S.Ct. at 2445.Beamwas doubtless aimed at assuaging criticism leveled at the Court by academic lawyers for its pre-Beambrand of prospectivity that was causing a serious disparate impact on similarly situated individuals.SeeDeLong, Confusion In Federal Courts: Application Of TheChevronTest In Retroactive-Prospective Decisions, 1985 Univ. of Ill.L.Rev. 117, 125-132; Beytagh, Ten Years of Non-Retroactivity: A Critique And A Proposal, 61 Vir.L.Rev. 1557, 1596, 1602, 1612-13, 1616 (1975); Fairchild, Limitation of New Judge-Made Law to Prospective Effect Only: "Prospective Overruling" or "Sunbursting", 51 Mar.L.Rev. 254, 267 (1967-1968); Keeton, Creative Continuity In the Law Of Torts, 75 Har.L.Rev. 463, 491 (1962); Currier, Time And Change In Judge-Made Law: Prospective Overruling, 51 Vir.L.Rev. 201, 247-248 (1965); C. AUERBACH, L. GARRISON., W. HURST S. MERMIN. THE LEGAL PROCESS 174 (1961). Some of these commentators charged that the nonretroactivity approach has produced gross inequality of treatment for similarly situated persons then in the "pipeline" by excluding them from the benefits of a new rule of constitutional law. The"pipeline doctrine"refers to thoseinterests presently in litigation(i.e., the case before the court and cases pending before the trial tribunals or in the appellate litigation process)or capable of being litigatedwhen the new rule is announced. For reference to the pipeline doctrine seeMichigan v. Payne,412 U.S. 47, 60, 93 S.Ct. 1966, 1973, 36 L.Ed.2d 736 (1973) (Douglas, J., dissenting); Hawkins, Florida Constitutional Law: A Ten-Year Retrospective On The State Bill of Rights, 14 Nova L.Rev. 693, 750 (1990); Fallon, New Law, Non-Retroactivity, and Constitutional Remedies, 104 Har.L.Rev. 1731, 1815 (1991). For Oklahoma jurisprudence applying a new rule of law to cases in thepipelineseeAmoco Production v. Corp.Com'n of Okla.,Okla.App.,751 P.2d 203, 208 (1986);Schepp v.Hess, Okla.,770 P.2d 34, 39 (1989);Dow Jones Co. v. State exrel. Tax Com'n, Okla.,787 P.2d 843, 847 (1990).Beam is theultimate refinement of the pipeline doctrine aimed at securingequality for all claims pending or those capable of beinglitigated when the new rule is announced. ↩
  45. For state and federal decisions that have appliedBeam'simplied retroactivity analysis in concluding that retroactive sweep should be given to a new rule of federal law in every case in which the Court's opinion was silent on its backward or forward reach, seeCambridge State Bank v. James,480 N.W.2d 647(Minn. 1992);Fonger v. Department of Treasury,193 Mich. App. 71,483 N.W.2d 920(1992), leave to appeal denied,440 Mich. 888, 487 N.W.2d 472 (1992);Sizemore v. Rinehart(an unpublished opinion by the Alabama Court of Civil Appeals,611 So.2d 1064(1992);Murray v. Anthony J. Bertucci ConstructionCo., Inc.,958 F.2d 127(5th Cir. 1992), cert. denied, ___ U.S. ___, 113, S.Ct. 190, 121 L.Ed.2d 134 (1992);Sterling v. Block,953 F.2d 198(5th Cir. 1992).

    For state court cases that depart fromBeam'simplied retroactivity analysis, seeSwanson v. State,329 N.C. 576,407 S.E.2d 791aff'd on rehearing,330 N.C. 390,410 S.E.2d 490(1991);Harper II, supranote 25;Bass v. State,302 S.C. 250,395 S.E.2d 171(1990) [Bass I], cert. granted and judgment vacated, 501 U.S. ___, 111 S.Ct. 2881, 115 L.Ed.2d 1047 (1991), reaff'd on remand,307 S.C. 113,414 S.E.2d 110(1992) [BassII]. ↩
  46. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2518 (quoting fromBeam, supranote 3, 501 U.S. at ___, 111 S.Ct. at 2445) (emphasis added). ↩
  47. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2518 (quoting fromBeam, supranote 3, 501 U.S. at ___, 111 S.Ct. at 2446.The pipeline doctrine, supranote 44,is not appropriate forapplication to cases where the new rule is announced on review ofa collateral attack upon an earlier judgment.Oklahoma's retrospectivity jurisprudence makes a distinction between "direct review" (direct appeal or direct attack) on the one hand and "collateral review" (collateral attack) on the other.See HarryR. Carlile Trust v. Cotton Petroleum, Okla.,732 P.2d 438, 447-448 nn. 46, 49 (1987), which gives purely prospective sweep to a new constitutional rule declared in acollateral attackupon a Corporation Commission spacing order. Among the reasonsCotton Petroleumadvances for not applying the pipeline doctrine to collateral challenges are (1) society's interest infinalityof decisions, (2) the need to conserve judicial time and expense, and (3) evidence and records in old cases may deteriorate, fade away, or vanish.Id.at 447 n. 46, 448 (citing support in federal jurisprudence).Seein this connection, Mishkin,The Supreme Court 1964 Term Foreword: TheHigh Court, The Great Writ, And The Due Process Of Time And Law,79 Har.L.Rev. 56, 77-79 (1965); Corr,Retroactivity: A Study InSupreme Court Doctrine "As Applied",61 N.C.L.Rev. 745, 750-752 (1983);but cf.Schwartz,Retroactivity, Reliability, and DueProcess: A Reply to Professor Mishkin,33 U.Chi. L.Rev. 719, 730-734 (1966);Cotton Petroleum, supraat 449-450 (Kauger, J., dissenting in part). Thepipeline doctrinewas fashioned for a new rule's application in adirect appeal.This is evident from the writings of those who supported the pipeline inHarperandBeam.I.HARPER:TheHarperretroactivity rule applies "in all cases still open on direct review."Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2517. Justice Scalia's concurring opinion notes that inTeague, supranote 35, the plurality "openly rejected settled precedent controlling the scope of retroactivity on collateral review." In his view "abandonment of [the Court's] prior collateral-review retroactivity rule was fully in accord with the doctrine ofstare decisis." (Harper,supranote 2, 509 U.S. at ___, 113 S.Ct. at 2520 (Scalia, J., concurring)). II.BEAM:A six-justice majority concludes inBeamthat litigants in the pipeline mayon direct reviewreceive the benefit of a new constitutional rule of civil law. (a) Justice Souter stresses that "retroactivity in civil casesmust be limited by the need for finality. . . ." He opines that "[p]ublic policy dictates that there be an end tolitigation;that those who have contested an issue shall be bound by the result of that contest, and thatmatters once triedshall be considered forever settled as between the parties.'"Beam, supranote 3, 501 U.S. at ___, 111 S.Ct. at 2446-2447 (citations omitted) (emphasis added). (b) Justice Blackmun states that "failure to apply a newly declared constitutional rule to cases pending on direct reviewviolates basic norms ofconstitutional adjudication." Id.,501 U.S. at ___, 111 S.Ct. at 2449 (Blackmun, J., concurring in judgment). (c) Justice White comments that the new rule "is to be applied to other litigants whose cases werenot finalat the time of theBacchusdecision."Id.,501 U.S. at ___, 111 S.Ct. at 2448 (White, J., concurring in judgment) (emphasis added).Application of thepipeline doctrine is appropriate in the instant case because theTaxpayers seek the benefit of a new rule on direct review of theTax Commission's denial of their refund claims.

    InTeague, supranote 35, 489 U.S. at 311, 109 S.Ct. at 1074, Justice O'Connor, writing for a plurality, states:

    "[I]t has long been established that a final civil judgment entered under a given rule of law may withstand subsequent judicial change in that rule. InChicot County Drainage Districtv. Baxter State Bank,308 U.S. 371, 60 S.Ct. 317, 84 L.Ed. 329 (1940), the Court held that a judgment based on a jurisdictional statute later found to be unconstitutional could haveresjudicataeffect. The Court based its decisions in large part on finality concerns. The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration . . . Questions of . . . prior determinations deemed to have finality and acted upon accordingly . . . demand examination.'Id.,308 U.S. at 374, 60 S.Ct. at 318-319.Accord, Rooker v.Fidelity Trust Co.,263 U.S. 413, 415, 44 S.Ct. 149, 150, 68 L.Ed. 362 (1923) (`Unless and until . . . reversed or modified' on appeal, an erroneous constitutional decision is `an effective and conclusive adjudication');Thompson v. Tolmie,2 Pet. 157, 169, 7 L.Ed. 381 (1829) (errors or mistakes of court with competent jurisdiction`cannot be corrected or examined whenbrought up collaterally')." (Emphasis added.) ↩
  48. For the pre-1989 statutory scheme see 74 O.S. 1981 § 923[74-923] and 68 O.S.Supp. 1982 § 2358[68-2358](C)(9),supranote 4. ↩
  49. Dow Jones, supranote 44 at 845; State ex rel. York v. Turpen, Okla.,681 P.2d 763, 767 (1984).

    Art. 7, § 1, Okla. Const., confers on administrative agencies only that quantum of "judicial power" which is necessary to support their exercise of adjudicative authority in individual proceedings brought before them. The power assigned to boards and commissions is not coextensive with that which is vested in the courts.Dow Jones, supranote 44 at 845. ↩
  50. In his post-Davis1988 return Worrell claimed an exemption from state taxes on his federal retirement income. When the exemption was denied. Worrell filed a protest with the Commission and paid the proposed amount. He hadvoluntarily paidwithout proteststate taxes on his civil service retirement income in his 1985, 1986 and 1987 returns and seeks a refund of his pre-Davisvoluntary overpayments. ↩
  51. Harper, supranote 2.Seediscussion of due process in Part V(E),infra. ↩
  52. The terms of Art. 2, § 7, Okla. Const., are:

    "No person shall be deprived of life, liberty, or property, without due process of law." ↩
  53. The Income Tax Division's stipulations before theCommission are:

    "[T]he Division is prepared to stipulate for the record that the refund claims that are at issue in these proceedings are currently for the years 1981 through 1988, although I understand that counsel for Mr. and Mrs. Lankford will have an announcement as to some of those years." [Record 5]

    "We're also prepared to stipulate that only the Plaintiffs involved in these proceedings for the years in question were recipients of the retirement income benefits from the United States Government either as civil service or as military retirees." [Record 5]

    "We further stipulate that the claims for the years in question subject, to, we expect an announcement as to the years 1981 through 1984 [the Lankfords withdrew their claims for the years 1981-1984, [Record 7-8], we'd stipulate that those claims were timely filed. We further stipulate that the claims were denied by the Income Tax Division and that the denials were all timely protested." [Record 5-6] "I stand corrected. Further, the amounts claim[ed] as reflected, I believe, in the Court's file, we stipulate as to the dollar amount if the Taxpayers are entitled to a refund in this case, the subject that's at issue, but the amounts claimed, we stipulate as being correct with the exception of Mr. Worrell and the exception is only as to what may appear in the Court's file because it has been changed since the original filing. We have . . . come to an agreement. . . . Mr. Worrell's claim for when he filed is $790.00, for 1986 is $1869.00, for 1987 is $2165.00 and for 1988 is $2405.00 for a total of $7229.00. There is no contention between the Division and Taxpayers as to the correctness of the amounts if refunds are to be made." [Record 6] ↩
  54. Record at 392 (emphasis added). ↩
  55. Record at 479 (emphasis added). ↩
  56. The Commission's answer brief on appeal states that thequestion presented is whether Davis "is to be appliedretroactively, so as to require refund or abatement of taxes paidor assessed for the tax years 1985 through 1988, or prospectivelyonly from the date of that decision." Answer briefat 3. ↩
  57. Admissions against a party's interest made in a brief may be used tosupplementthe appellate record.Hulsey v.Mid-America Preferred Ins. Co.,Okla.,777 P.2d 932, 937 n. 17 (1989);Kwikset/Emhart v. Mayberry,Okla.,800 P.2d 239, 240 n. 1 (1990);Reeves v. Agee,Okla.,769 P.2d 745, 754 (1989);Womack v. City of Oklahoma City,Okla.,726 P.2d 1178, 1181 n. 8 (1986). ↩
  58. 68 O.S. 1981 §§ 201[68-201] et seq. ↩
  59. Record at 411 (Commission's brief in support of its motion to dismiss the district court case). ↩
  60. 68 O.S. 1981 §§ 207[68-207], 221. ↩
  61. 68 O.S.Supp. 1989 § 226[68-226]. ↩
  62. Record at 412 (emphasis added). ↩
  63. Sowders v. Oklahoma Tax Commission,Okla.,527 P.2d 852(1974);Sun Oil Co. v. Oklahoma Tax Commission,Okla.,620 P.2d 896(1981). ↩
  64. The terms of 68 O.S. 1981 § 2373[68-2373] provided:

    "If, upon any revision or adjustment . . . any refund is found to be due any taxpayer, it shall be paid . . . out of the "Income Tax Adjustment Fund", created by Section 2352 of this title, . . . .

    Except as provided in Section 2375(G) of this title, the amount of the refund shall not exceed the portion of the tax paid during the three (3) years immediately preceding the filing of the claim, or, if no claim was filed, then during the three (3) years immediately preceding the allowance of the refund; . . . ."

    The quoted language was not substantially changed by the 1985 and 1991 amendments. ↩
  65. Neither party on appeal will be allowed to change the theory of the case from that on which it was presented to the trial court.Agricultural Insurance Company v. Kouba,Okla.,294 P.2d 583, 586 (1956). Parties are bound in the appellate court by the theories on which a case was tried below.ChryslerCorporation v. Walter E. Allen, Inc.,Okla.,375 P.2d 878, 883 (1962);Griswold v. Public Service Co. of Oklahoma,205 Okla. 412,238 P.2d 322, 326 (1951). ↩
  66. In a public-law controversy, this court isgenerallyfree to change the theory presented by the parties below and followed by the trial court. In theMatter of McNeely,Okla.,734 P.2d 1294, 1296 (1987);Burdick v. Independent SchoolDist.,Okla.,702 P.2d 48, 54 (1985);Davis v. Davis,Okla.,708 P.2d 1102, 1104 n. 2 (1985);McCracken v. City of Lawton,Okla.,648 P.2d 18, 21 (1982);Application of Goodwin,Okla.,597 P.2d 762, 764 (1979). ↩
  67. The words"Ultra vires"mean "beyond the power".Statev. Benevolent Investment Relief Ass'n,107 Okla. 228,232 P. 35, 38 (1925). "An act is said to be ultra vires when it is not within the scope of the powers . . . to perform it under any circumstances or for any purpose."Field v. City of Shawnee,7 Okla. 73,54 P. 318, 319 (1898). Anultra viresact is one which is beyond the powers conferred by law.BLACK'S LAWDICTIONARYat 1365 (5th Ed. 1979), citingCharles v. Town ofJeanerette, Inc.,234 So.2d 794, 798 (La. App. 1970). ↩
  68. The terms of 68 O.S. 1981 § 2375[68-2375](G) provided in pertinent part:

    "* * * If the amount of the net income for any year of the taxpayer under this law, and as returned to the United States Treasury Department, is changed or corrected by the Internal Revenue Service, such taxpayer, within one (1) year after final determination of the corrected net income, shall file anamended return reporting the corrected netincome,or notify the Tax Commission by letter that the information is available, and theTax Commissionshall make assessment or refundbased thereon. . . ." (Emphasis added.)

    The quoted italicized language was not substantively changed by the 1986, 1989 and 1992 amendments. ↩
  69. The legislature will not be presumed to have intended avain or absurdresult.Ledbetter v. Alcoholic Bev. LawsEnforcement,Okla.,764 P.2d 172, 179 (1988);LeFlore v.Reflections of Tulsa, Inc.,Okla.,708 P.2d 1068, 1075 (1985);Johnson v. Johnson,Okla.,674 P.2d 539, 542 (1983);Farris v.Cannon,Okla.,649 P.2d 529, 531 n. 4 (1982);Texas Cty.Irrigation v. Cities Serv. Oil Co.,Okla.,570 P.2d 49, 51 (1977). ↩
  70. For discussion of state and federal constitutional issues, see Part V(D) and (E). ↩
  71. Neumann v. Tax Com'n,Okla.,596 P.2d 530, 532 (1979);Wilson v. State ex rel. Okla. Tax Com'n,Okla.,594 P.2d 1210, 1212 (1979). ↩
  72. C.H. Leavell Company v. Oklahoma Tax Commission,Okla.,450 P.2d 211, 215 (1968). ↩
  73. SeePart V(B),supra. ↩
  74. Oklahoma Tax Commission v. Smith,Okla.,610 P.2d 794(1980). ↩
  75. Phillips v. Oklahoma Tax Com'n.Okla.,577 P.2d 1278(1978). ↩
  76. For the pertinent terms of 68 O.S. 1981 § 2373[68-2373], seesupranote 64. ↩
  77. Emphasis added. ↩
  78. For the terms of Art. 2, § 7, Okla. Const., seesupranote 52. Our due process clause, which has a definitional sweep co-extensive with its federal counterpart, contains ananti-discriminationcomponent.Ross v. Peters,Okla.,846 P.2d 1107, 1114 n. 29 (1993);Messenger v. Messenger,Okla.,827 P.2d 865, 872 (1992);Fair Sch. Finance Coun. of Okla. v. State,Okla.,746 P.2d 1135, 1148 n. 48 (1987);Matter of Rich,Okla.,604 P.2d 1248, 1250-1251 (1979);McKeever Drilling Co. v.Egbert,170 Okla. 259,40 P.2d 32, 35 (1935).See Fuentes v.Shevin,407 U.S. 67, 80, 92 S.Ct. 1983, 1994, 32 L.Ed.2d 556 (1972). citingBaldwin v. Hale,68 U.S. 223, 17 L.Ed. 531 (1864) andArmstrong v. Manzo,380 U.S. 545, 552, 85 S.Ct. 1187, 1191, 14 L.Ed.2d 62 (1965). ↩
  79. State v. Okla. State Bd. for Property,Okla.,731 P.2d 394, 398-99 (1987) (the reviewing court is bound to accept an interpretation that avoids constitutional doubt);see also,Gilbert Cent. Corp. v. State,Okla.,716 P.2d 654, 658 (1986);Ricks Exploration v. Okla. Water Resources Bd.,Okla.,695 P.2d 498, 504 (1985);Oklahoma State Election Bd. v. Coats,Okla.,610 P.2d 776, 780 (1980);Neumann, supranote 71 at 532. ↩
  80. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2519 (quoting fromMcKesson Corp. v. Division of Alcoholic BeveragesTobacco,496 U.S. 18, 36-37, 110 S.Ct. 2238, 2250-2251, 110 L.Ed.2d 17 (1990)). ↩
  81. Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2520 (quoting fromMcKesson, supranote 80, 496 U.S. at 31 and 40, 110 S.Ct. at 2247 and 2252).

    Aneffectiveandevenhandedmechanism for the state's return "in hindsight" of unconstitutionally exacted revenue is mandated by federal due process.Harper, supranote 2, 509 U.S. at ___, 113 S.Ct. at 2520. Its command will gounheedediftimelyrefund claims for voluntary pre-Davisoverpayment are rejected out-of-hand as excludable by our statutory framework of available remedies. ↩
  82. Taxpayers sought interest on refunds. Because the Commission decided no refunds were due, it did not reach the interest claim. ↩
  83. See supranote 64 for pertinent terms of 68 O.S. 1981 § 2373[68-2373]. We do not, and need not, today reach for discussion Taxpayers' remedy for refund of tax paid more than three yearsbeforerefund request. ↩
  84. In announcing the rule inHarper v. Virginia Dep't ofTaxation,509 U.S. ___, 113 S.Ct. 2510, 125 L.Ed.2d 74 (1993), the Supreme Court provided the parameters for a state court's retroactive application of a rule. The opinion provides in pertinent part:

    "The constitutional sufficiency of any remedy thus turns (at least initially on whether Virginia law `provide[s] a[n] [adequate] form of `predeprivation process,' for example, by authorizing taxpayers to bring suit to enjoin imposition of a tax prior to its payment, or by allowing taxpayers to withhold payment and then interpose their objections as defenses in a tax enforcement proceeding.' . . . Because this issue has not been properly presented, we leave to Virginia courts this question of state law and the performance of other tasks pertaining to the crafting of any appropriate remedy. Virginia `is free to choose which form of relief it will provide, so long as that relief satisfies the minimum federal requirements we have outlined.' . . . State law may provide relief beyond the demands of federal due process . . . but under no circumstances may it confine petitioners to a lesser remedy . . ." (Citations omitted.) ↩
  85. Because the judgment under review was void ab initio, it was unnecessary to address this issue inHarry R. Carlile Trustv. Cotton Petroleum Corp.,732 P.2d 438, 450 (Okla. 1987),cert. denied,483 U.S. 1007, 1021, 107 S.Ct. 3232, 3265, 97 L.Ed.2d 738, 764 (1987). ↩
  86. SeeKamen v. Kemper Financial Services, Inc.,500 U.S. 90, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991) where the Court explained that when a claim or issue is properly before the Court it is not limited to a particular theory.Id.500 U.S. at ___, 111 S.Ct. at 1718. But courts are not free to act as advocates and to raise claims that should be raised by the parties.Seee.g., Doubleday Co., Inc. v. Curtis,763 F.2d 495, 502-502 (2d Cir. 1985),cert. denied,474 U.S. 912, 106 S.Ct. 282, 88 L.Ed.2d 247 (1985), (court could not dispose of claim on the basis of waiver defense when defense was not raised by pleading or evidence at trial);State of Nev. Employees Association, Inc.v. Keating,903 F.2d 1223, 1225 (9th Cir. 1990),cert. denied,498 U.S. 999, 111 S.Ct. 558, 112 L.Ed.2d 565 (1990), (court should notsua sponteraise defense ofres judicatawithout affording the parties an opportunity to brief the issue). ↩
  87. SeeState ex rel. Oklahoma Tax Commission v. Emery,645 P.2d 1048(Okla. App. 1982), (Approved for publication by Supreme Court) where the court explained that the power of taxation is a sovereign power essential to the existence of State government, andPhillips v. Oklahoma Tax Commission,577 P.2d 1278(Okla. 1978) where we explained that a question on the constitutionality of use tax codified at 68 O.S.Supp. 1977 § 1402a[68-1402a] was one of great public concern. ↩
  88. Within the framework of judicial review personal and private rights and claims may be waived, and thus not reviewed, but law involving the power or structure of government as such relates to the claims of the parties actually before the court may not be waived.Commodity Futures Trading Commission v.Schor,478 U.S. 833, 848-851, 106 S.Ct. 3245, 3255-3257, 92 L.Ed.2d 675 (1986), (contrasting personal constitutional rights to U.S. Const. Art. III as well as the separation of powers principle);City of Clinton ex rel. Richardson v. Cornell,191 Okla. 600,132 P.2d 340, 343 (1942), (party could not waive the then constitutional requirement under Okla. Const. Art. VII § 25 of holding terms of court at the county seat). Neither the Tax Commission nor the taxpayers may waive or make a stipulation as to the law concerning the power and structure of government and make that stipulation binding upon the Supreme Court.Cf. Hobbsv. German-American Doctors,14 Okla. 236,78 P. 356, 357 (1904), (subject matter jurisdiction, i.e., the structure of government with respect to the scope of judicial power, may not be waived);State ex rel. Oklahoma Tax Commission v. Emery,645 P.2d 1048(Okla. App. 1982), (Approved for publication by Supreme Court), (estoppel does not apply to the State acting in its sovereign capacity, as in taxation). A court may require the timely assertion of a claim or deem the claim waived.Kamen v. KemperFinancial Services, Inc.,500 U.S. 90, ___, n. 5, 111 S.Ct. 1711, 1718 n. 5, 114 L.Ed.2d 152 (1991).See also Bray v.Alexandria Women's Health Clinic,506 U.S. ___, ___, 113 S.Ct. 753, 767, 122 L.Ed.2d 34 (1993), (in explaining that a claim was not in a posture for review the Court found "troubling" the dissenters' "questionable resolution of a legal issue never presented"). ↩
  89. See authority cited at note 3supra. ↩
  90. In a second suit between the same parties matters that could have been put in issue in the first suit, but were not, may not be raised in the second suit, according to the doctrine ofres judicata,or claim preclusion.Veiser v. Armstrong,688 P.2d 796, 800 n. 9 (Okla. 1984).Accord, Oklahoma Gas Electricv. District Court,784 P.2d 61, 64 n. 8 (Okla. 1989), (failure to plead a compulsory counterclaim bars a subsequent independent suit thereon). ↩