Massachusetts Superior Court Throws Out Tax Case Against Epstein Becker Green Clients

June 1, 2015

On June 1, 2015, Epstein Becker Green ("EBG") obtained the dismissal of a tax case brought by the owner of the Berkshire Mall (“Mall”) in the Massachusetts Superior Court. The Mall sought a declaration that certain taxes assessed by the Baker Hill Road District (“District”), which is located in the Town of Lanesborough, Massachusetts, were unauthorized and excessive. The Mall also claimed that the District’s tax assessments were “ultra vires” (i.e., beyond the District’s powers) and unconstitutional. EBG represented three individual officials of the District in this case.

The District was originally created to acquire and maintain a road that leads to the Berkshire Mall. In addition to assessing a tax to acquire and maintain that road, the District entered into four contracts relating to police, fire, and ambulance services. The District’s tax assessment, which was issued on January 2, 2015, incorporates the costs associated with these service contracts. The District has only three taxpayers.

With regard to the service contracts, EBG argued before the court that the Mall lacked standing to sue about the District’s alleged abuse of power by entering into the service contracts, because, under a state statute, this lawsuit must be started by a petition of not less than 10 taxable inhabitants of the town. The court agreed with EBG’s argument that, not only was this suit brought by less than 10 taxpayers, but the Mall could not qualify as a “taxable inhabitant” under the statute because the Mall is not a “natural person.” Moreover, even if the Mall could qualify as a taxpayer under the statute, there were only three taxpayers in the District—not enough to meet the 10-taxpayer threshold for the petition.

Next, regarding the Mall’s claim that the tax assessments were ultra vires and unconstitutional, the court agreed with EBG’s argument that the court lacked jurisdiction to hear this claim as well, since the Mall was required by law first to seek an abatement from the local board of assessors and, if denied, to appeal to the State Appellate Tax Board. However, the Mall failed to exhaust these administrative remedies before filing this lawsuit.

Member of the Firm Barry A. Guryan and Senior Counsel J. William Cook led the EBG team. The case is Comm 2005-FL10 Berkshire Mall LLC v. Baker Hill Road District, Civ. No. 2014-00355 (Mass. Sup. Ct., Berkshire Cty., 2015).