HomeMy WebLinkAbout1. City' of Renton's Opposition to Tracfone's Motion to Preclude Certain Exhibits1
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 1
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON RE:
TracFone Wireless, Inc.
Administrative Appeal
RESPONDENT CITY OF RENTON’S OPPOSITION TO TRACFONE’S MOTION TO PRECLUDE THE INTRODUCTION OF CERTAIN EXHIBITS AT THE HEARING
I. INTRODUCTION
The City of Renton (“the City”) opposes TracFone Wireless Inc.’s (“TracFone”) Motion to
Preclude Certain Exhibits at the Hearing (“Motion”)1, which exhibits the City intends to offer for the
Hearing Examiner’s consideration in the event summary judgment is not granted and an adjudicative
hearing on the merits proceeds as scheduled during the week of April 12, 2021. TracFone’s Motion is
senseless and baseless, as it disregards the opportunity both sides had to conduct discovery and learn
new information in support of their respective positions and incorrectly relies on legal authority that
applies to a subsequent judicial review phase, not the current adjudicatory phase, rather than relying on
the applicable provisions of the Renton Municipal Code (“RMC”) and other supporting legal authorities
1 The exhibits that TracFone moves to exclude are the following: (1) documents produced by TracFone pursuant to a
Renton Administrative Order issued June 19, 2019 (and revised July 29, 2019); (2) Renton Tax Rule 242; (3) TracFone
Terms and Conditions; (4) TracFone marketing materials; and (5) TracFone Wireless Basic Phone Card. See
TracFone’s Motion, on file herein, at pp. 1-3.
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 2
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
pertaining to adjudicative appeal proceedings before the Hearing Examiner. For the reasons set forth
herein, the City requests that the Hearing Examiner deny TracFone’s Motion.
II. STATEMENT OF FACTS
TracFone’s Motion disregards certain key facts, such as the timing of the City’s Administrative
Order, which originally issued on June 19, 2019 and was revised on July 29, 2019. The City’s First
Revised Administrative Order ordered TracFone to provide certain specified documents for review, and
it preceded the City’s Final Determination regarding the City’s February 14, 2019 assessment, issued
on October 17, 2019, by several months. This timing is important, as it demonstrates that the City did
consider the agreements that TracFone produced prior to issuing its Final Determination.2 It is factually
relevant that all of the exhibits TracFone seeks to have excluded at hearing, except Renton Tax Rule
242, are TracFone materials (agreements, terms and conditions, marketing materials, and basic phone
card), and all but the agreements are available in the public domain via the internet, including TracFone’s
website, and at various local retailers. TracFone has known since the City filed its Preliminary Witness
and Exhibit List that the City may offer these exhibits, among others, as evidence at the administrative
appeal hearing in the event a dispositive motion is not granted.
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2 TracFone’s Motion blatantly mischaracterizes the deposition testimony of the City of Renton’s Tax & License
Program Manager Nate Malone, arguing that he “only looked at one agreement, that is, TracFone’s retail distribution
agreement with Rent-A-Center.” See TracFone’s Motion at 2:10-12 & n.2. The actual deposition transcript quoted in
the Motion instead quotes Mr. Malone as testifying: “I looked mostly in-depth at the Rent-A-Center agreement. It
had the most content. The remaining retailer agreements were more boilerplate agreements from the look of it. . . .
I looked at the remainder” Id. at n.2 (emphasis added). TracFone’s Motion also misconstrues Mr. Malone’s
testimony by asserting “none of the agreements impacted the assessment.” Id. at 2:11. Rather, Mr. Malone testified
that “I don’t think that there was anything of content [in the agreements] that would have impacted this assessment,”
meaning the assessment should stand based on his review of the agreements. Id. at n.2.
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 3
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
III. ISSUE PRESENTED
Should the Hearing Examiner deny TracFone’s Motion and refuse to grant the relief requested
therein where TracFone’s Motion to Preclude the Introduction of Certain Exhibits at the Hearing is not
grounded in applicable legal authority for adjudicative proceedings? Yes
IV. ARGUMENT AND LEGAL AUTHORITY
A. The Applicable Renton Municipal Code Allows the Opportunity to Introduce
Evidence, and the City’s Introduction of Evidence Is Not Limited to the Audit File.
The record in this proceeding is not limited to the audit file, and TracFone provides no applicable
legal authority to support its argument that other evidence outside the audit file or obtained post-audit
cannot be introduced at the hearing. TracFone wholly disregards the fact that administrative hearings
proceed under significantly relaxed rules of evidence. See, e.g., RCW 34.05.452(2) (rules of evidence
are “guidelines” under Administrative Procedure Act). Indeed, by their own provisions, the rules of
evidence apply only to court proceedings. ER 101, 1101. Consistent with these legal authorities, RMC
5-26-18(B)(4), governing administrative appeals of assessments of taxes, interest, and/or penalties to
the Hearing Examiner, is explicit that:
The hearing examiner shall schedule a hearing date, notify the taxpayer and the
Administrator of such hearing date and shall then conduct an appeal hearing in
accordance with this chapter and procedures developed by the hearing examiner, at
which time the appellant taxpayer and the Administrator shall have the
opportunity to be heard and to introduce evidence relevant to the subject of
the appeal.
RMC 5-26-18(B)(4) (emphasis added). Significantly, the applicable RMC nowhere restricts the
evidence to the audit file only or only the evidence on which the City’s Final Determination was based,
and such a restriction defies common sense and negates the very purposes for which discovery is allowed
to proceed in this case and other cases.
Moreover, RMC 4-8-100 sets out the rules for hearings on any subject to be held before the
Hearing Examiner. RMC 4-8-100(G)(3)(c)(ii) provides that the Hearing Examiner has the power “[t]o
rule upon offers of proof and receive evidence.” RMC 4-8-100(G)(3)(f)(ii) further provides that:
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 4
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
ii. Evidence: Technical rules of evidence will not be applied. The key
requirements for evidence will be relevance and reliability. Relevant and
reliable evidence will be admitted if it possesses probative value commonly
accepted by reasonable persons in the conduct of their affairs. The Hearing
Examiner may take judicial notice of facts generally known or capable of accurate
and ready determination by resort to sources whose accuracy cannot reasonably be
questioned. Personal attacks shall not be tolerated, unless it is demonstrated that
there is no other manner in which relevant evidence can be presented.
RMC 4-8-100(G)(3)(f)(ii) (emphasis added). The RMC provisions align with the Administrative
Procedures Act (“APA”) governing administrative hearings, chapter 34.05 RCW, which provides in
pertinent part as follows:
(4) Findings of fact shall be based exclusively on the evidence of record in
the adjudicative proceeding and on matters officially noticed in that proceeding.
Findings shall be based on the kind of evidence on which reasonably prudent
persons are accustomed to rely in the conduct of their affairs. Findings may be
based on such evidence even if it would be inadmissible in a civil trial. However,
the presiding officer shall not base a finding exclusively on such inadmissible
evidence unless the presiding officer determines that doing so would not unduly
abridge the parties' opportunities to confront witnesses and rebut evidence. The
basis for this determination shall appear in the order.
RCW 34.05.461(4) (emphasis added). These legal authorities support the City’s position that
TracFone’s Motion should be denied based on the lack of any express limitation that the City’s evidence
must be confined to the audit file only; TracFone creates from whole cloth a limitation that simply fails
to exist in the applicable RMCs, which instead eschew technical rules of evidence, and related laws.
Further, TracFone’s Motion, if granted, would deprive the City of procedural due process, and prejudice
the City’s ability to fully and fairly present its defense of its October 17, 2019 Final Determination
regarding the February 14, 2019 Assessment.
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 5
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
B. TracFone’s Motion Relies on Inapplicable Legal Authority that Pertains to Review
Proceedings rather than Adjudicative Proceedings.
TracFone’s Motion should be denied, as it is not based on relevant, applicable legal authority
and instead relies on legal authority that applies to review proceedings following an adjudicative
proceeding, such as here. The case at bar is the equivalent of a trial court level, adjudicative proceeding,
and it is here – at this adjudicative stage – that the record is created. If an appeal is pursued by either or
both parties, then a review proceeding will follow. In support of its Motion, TracFone relies on Towle
v. Dep’t of Fish & Wildlife, 94 Wn. App. 196, 205, 971 P.2d 591 (1999), as well as a more recent case
that cites to Towle, that is, Nevler v. State Employment Security Dep’t, 2 Wash.App.2d 1008 (2018), and
RCW 34.05.464(5). None of these authorities is applicable in the present, adjudicative context.
In Towle, Division Two of the Court of Appeals held that the Deputy Director of the Washington
State Department of Fish and Wildlife violated the Administrative Procedures Act when she went
outside the record established by the Administrative Law Judge (“ALJ”) and reversed the ALJ’s finding
of extenuating circumstances to issue a so-called “Class A” Dungeness crab-coastal fishery license. See
Towle, 971 P.2d 591 at 595 (“Moreover, there are no reported cases that discuss a reviewing officer’s
ability to examine new evidence in reviewing an ALJ’s initial order under RCW 34.05.464.”
(Emphasis added.)). The Towle court further noted that “this reviewing scheme mirrors the manner in
which an appellate court reviews and is confined to a trial court record.” Id. at 595, n.10. The context of
the Towle case is clearly distinguishable from the instant case, which is akin to an ALJ or trial court
proceeding, where the record is being created, and not properly characterized as a review proceeding.
In Nevler, appellant was fired from his restaurant job for sitting down at a table with a customer,
in violation of a policy against fraternization with customers. See Nevler, 2 Wash. App.2d at *1. Only
in his petition for review of the ALJ’s decision upholding the Employment Security Department’s
(“ESD”) denial of unemployment benefits for misconduct did Nevler offer new exculpatory evidence
for consideration. Id. at *5. Citing the Towle case, the Nevler court held that the new evidence came too
late on review by the ESD Commissioner. Id. Both the Towle and Nevler cases apply the proposition
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 6
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
that TracFone relies upon in distinguishable contexts from the instant case, which is an adjudicative
proceeding, not a review proceeding.
Finally, TracFone cites to a provision of the APA, specifically RCW 34.05.464(5), regarding
review of initial orders, in support of its Motion, which provides: “[t]he reviewing officer shall
personally consider the whole record or such portions of it as may be cited by the parties.” (Emphasis
added.) Again, TracFone’s reliance on this inapplicable statutory provision is misplaced here, as the
instant case is not a review proceeding. The APA does not govern this proceeding at all, but the more
analogous APA provision is the APA’s definition of “agency record,” set forth in RCW 34.05.476,
which provides in subsection (1): “An agency shall maintain an official record of each adjudicative
proceeding under this chapter.” (Emphasis added.) An official record will be created here, provided the
instant case proceeds to a hearing the week of April 12, 2021. Further, subsection (2) provides that the
agency record shall include numerous items, including in subsection (2)(d), “Evidence received or
considered.” In sum, the legal authorities on which TracFone relies in support of its Motion are
inapplicable because they apply in a review proceeding context, not in the context of an adjudicative
proceeding, such as here.
V. CONCLUSION
The applicable RMC expressly allows the offering of evidence and does not restrict such
evidence to only that which is relied on during the audit or contained in the audit file, and it is further
contemplated that new evidence relevant to the tax challenge may be revealed during the discovery
phase of the case and introduced at the adjudicative hearing where the record is created. TracFone’s
Motion is based on the false premise that the taxing jurisdiction can offer no new information after the
audit is completed to bolster and defend its position in an adjudicative proceeding challenging its
assessment. Further, the legal authority that TracFone relies on in support of its Motion does not apply
to an adjudicative proceeding, as here, and instead only applies to a subsequent review proceeding and
is therefore inapplicable. Finally, if TracFone takes issue with any of the items identified by the City’s
Preliminary Exhibit List as potential exhibits, then the burden is on TracFone, as the appellant taxpayer,
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 7
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
to produce, for example, the terms and conditions for its end users during the audit period and to show
how that version materially differs from the version of the terms and conditions to be offered by the
City. Based on the foregoing, the City requests that the Hearing Examiner deny TracFone’s Motion to
Preclude the Introduction of Certain Exhibits at the Hearing.
DATED this 12th day of February 2021.
OGDEN MURPHY WALLACE, PLLC
By /s/Kari L. Sand
Kari L. Sand, WSBA #27355
Julia Norwood, WSBA #52876
Attorneys for Respondent City of Renton
ksand@omwlaw.com
901 Fifth Avenue, Suite 3500
Seattle, WA 98164-2008
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RESPONDENT CITY OF RENTON’S OPPOSITION TO
TRACFONE’S MOTION TO PRECLUDE CERTAIN EXHIBITS AT
THE HEARING - 8
OGDEN MURPHY WALLACE, P.L.L.C.
901 Fifth Avenue, Suite 3500
Seattle, Washington 98164-2008
Tel: 206.447.7000/Fax: 206.447.0215
CERTIFICATE OF SERVICE
I, Kenya Owens, an employee of Ogden Murphy Wallace, PLLC, certify that on the date below,
I filed and served the Respondent City of Renton’s Opposition of Tracfone’s Motion to Preclude Certain
Exhibits at the Hearing via email on the following parties:
TracFone Wireless, Inc.
Scott Edwards
Lane Powell, PC
1420 5th Avenue, Suite 4200
Seattle, WA 98101
EdwardsS@LanePowell.com
Grant S. Degginger
Lane Powell, PC
1420 5th Avenue, Suite 4200
Seattle, WA 98101
DeggingerG@LanePowell.com
I declare under penalty of perjury under the laws of the State of Washington that the foregoing
is true and correct.
Executed at Seattle, Washington this 12th day of February, 2021.
/s/Kenya Owens
Kenya Owens
Legal Assistant