author: THOMAS, Judge.

text:
    IEC ARAB ALABAMA, INC. v. CITY OF ARAB and Alabama Department of Revenue.
    2070174.
    Court of Civil Appeals of Alabama.
    Aug. 22, 2008.

      Blake A. Madison and Justin G. Williams of Tanner & Guin, LLC, Tuscaloosa, for appellant.
    J. Clark Pendergrass and Michael P. Johnson of Lanier Ford Shaver & Payne, P.C., Huntsville; and Jeff McLaughlin and Rodney L. Edmondson of McLaughlin & Edmondson, LLC, Guntersville, for appel-lee City of Arab.
    Troy King, atty. gen., and J. Wade Hope, asst. atty. gen. and asst, counsel, for appellee Department of Revenue.
   THOMAS, Judge.

IEC Arab Alabama, Inc. (“IEC”), is an Alabama corporation that manufactures computer components for other businesses. Before its acquisition by IEC Electronics Corporation in November 1994, IEC was known as Accutek, Inc. Between 1990 and November 1994, Accutek did not file Alabama sales- or use-tax returns; IEC did not file any sales- or use-tax returns between December 1994 and December 1997. Accutek, and then IEC, relied on the version of § 40-23-62(1) that was in effect before the 1997 amendment of that statute (“the preamendment version of § 40-23-62(1)”); the preamendment version of § 40-23-62(1) exempted from the state use tax “[p]roperty, the gross proceeds of sales of which are required to be included in the measure of the tax imposed by the provisions of Article 1 of this chapter [i.e., the sales-tax portion of the tax code].” Because they did not make retail sales, Accu-tek and IEC were not required to collect sales taxes. Ala.Code 1975, § 40-23-2(1) (levying a privilege or license tax against persons that sell tangible personal property at retail). Because the purchases made by Accutek and IEC from Alabama sellers were subject to Alabama sales taxes and because the sellers were required to remit any sales taxes due on those sales, § 40-23-8, Ala.Code 1975, those purchases were exempt from use taxes under the pream-endment version of § 40-23-62(1). According to Accutek and IEC, any purchases they made from out-of-state sellers in situations in which the title to the property passed to Accutek or IEC in Alabama were theoretically subject to the sales tax, see § 40 — 23—1(a)(5), Ala.Code 1975 (defining the term “sale” for purposes of the sales-tax statute), and thus exempt from the use tax under the preamendment version of § 40-23-62(1). See Monroe v. Valhalla Cemetery Co., 749 So.2d 470, 472 (Ala.Civ.App.1999), overruled on other groimds by Patterson v. Gladwin Corp., 835 So.2d 137, 153 (Ala.2002) (explaining that, under the preamendment version of § 40-23-62(1), an administrative law judge and a Montgomery Circuit Court had held that sales of property delivered in Alabama by out-of-state vendors without the required nexus with Alabama to make the vendors subject to the Alabama sales tax were not subject to either the sales or the use tax).

In May 1997, the Alabama legislature amended § 40-23-62(1) to close the loophole in the use-tax law created when the sales tax due on property purchased in Alabama had never actually been paid on the sale of the property. Valhalla Cemetery Co., 749 So.2d at 473. Under the preamendment version of § 40-23-62(1), if the proceeds of the sale of the property were required to be included in a computation of sales taxes, the property was not subject to the use tax; thus, property that was subject to the sales tax but on which the sales tax had not actually been paid was still exempt from the use tax. Id. The amended version of the statute exempts from the use tax property upon which the sales tax has actually been paid. § 40-23-62(1) (exempting from the use tax only “[p]roperty, on which the sales tax imposed by the provisions of Article 1 of this chapter is paid by the consumer to a person licensed under the provisions of Article 1 of this chapter”). This change closed the loophole and assures that property purchased by an Alabama taxpayer does not escape taxation. Valhalla Cemetery Co., 749 So.2d at 473.

In October 1998, the Alabama Department of Revenue (“the Department”) entered three final assessments against IEC for the period between January 1990 and December 1997 for state sales taxes, state use taxes, and City of Arab (“the City”) use taxes. IEC paid the assessments after the Department filed a tax lien against it; IEC then appealed the final assessments to the Department’s Administrative Law Division. The appeal was held in abeyance for several years pending the outcome of other tax appeals and attempts at settlement between the parties. The case was ultimately submitted to an administrative law judge (“ALJ”) on a joint stipulation of facts, on the sole issue whether the Department could apply the amendment to § 40-13-62(1) retroactively to the 1990-1997 tax years.

The ALJ began his analysis with the language of the act that amended § 40-23-62(1), Act No. 97-301, which provides in § 3: “This act shall be retroactively effective for all open tax years upon its passage and approval by the Governor, or upon its otherwise becoming a law.” The ALJ then considered what years were “open tax years.” Under the Alabama Taxpayers’ Bill of Rights, § 40-2A-1 et seq., Ala.Code 1975, the Department, with certain exceptions, generally has the ability to assess taxes within three years from the date that the taxpayer filed a tax return or within three years of the date the taxes were due. § 40~2A-7(b)(2).

“Any preliminary assessment shall be entered within three years from the due date of the return, or three years from the date the return is filed with the department, whichever is later, or if no return is required to be filed, within three years of the due date of the tax, except as follows:
a. A preliminary assessment may be entered at any time if no return is filed as required .... ”

§ 40-2A-7(b)(2). Because Accutek and IEC had not been required to file a return under the preamendment version of § 40-23-62(1), the ALJ held that the Department could enter assessments relating only to the three tax years immediately preceding the preliminary assessments (which were entered in September 1998) or back to August 1995, because August 1995 use taxes would have been due in September 1995. Those three years, said the ALJ, were the “open tax years” to which the amended version of § 40-23-62(1) could be applied retroactively. Thus, the ALJ ordered that the Department refund a portion of the taxes that IEC had paid pursuant to the final assessments. In addition, the ALJ ordered that the Department refund the penalties it had assessed because, the ALJ determined, IEC’s failure to pay the taxes was understandable in light of the language of § 40-23-62(1) as it existed before May 1997.

The Department and the City filed appeals to the Marshall Circuit Court; those appeals were consolidated. The Department, the City, and IEC filed cross-motions for a summary judgment. After considering arguments of counsel, the circuit court entered a summary judgment in favor of the Department and the City, concluding that the Department could apply the amendment to § 40-23-62(1) retroactively to collect taxes from IEC for the tax periods from January 1990 to December 1997. The judgment also reinstated the penalties assessed by the Department. After its postjudgment motion was denied, IEC appealed that judgment to the Alabama Supreme Court, which transferred the appeal to this court because it falls within our original jurisdiction. See Ala. Code 1975, § 12-3-10. The City and the Department make the same arguments on appeal; our references to the Department’s positions and arguments will therefore encompass those made by the City, and we will refer to the City and the Department collectively as “the Department.”

“When an appellate court interprets a statute or considers the constitutionality of a statutory provision, no presumption of correctness attaches to the trial court’s interpretation of the statute. Pilgrim v. Gregory, 594 So.2d 114 (Ala.Civ.App.1991). Where the facts of the case are undisputed and the trial court is called upon to determine a question of law, no presumption of correctness attaches to the trial court’s ruling and this court’s review is de novo. Tierce v. Gilliam, 652 So.2d 254 (Ala.1994).”

Valhalla Cemetery Co., 749 So.2d at 471-72.

We are called on to decide in this case the scope of the retroactivity provision of Act No. 97-301, which amended § 40-23-62(1). As noted above, the act states that it “shall be retroactively effective for all open tax years upon its ... becoming a law.” Act No. 97-301, § 3. The act became effective on May 7, 1997. We must decide the meaning and effect of the phrase “open tax years” in the retroactivity provision.

The retroactivity provision was challenged on constitutional grounds in Valhalla Cemetery Co. The taxpayer, in that case Valhalla Cemetery Company (“Valhalla”), had paid use taxes between April 1994 and March 1997 on items it had purchased from out-of-state vendors who did not have the requisite nexus with Alabama to be subject to Alabama’s sales-tax statutes. Valhalla Cemetery Co., 749 So.2d at 472. After the use-tax “loophole” was publicized as a result of a tax appeal in another case, Valhalla sued the commissioner of the Department, in his official capacity, seeking to have declared illegal the collection of use taxes on items purchased from out-of-state vendors. Id. at 471. Valhalla also sought to have the retroactivity provision of Act No. 97-301 declared unconstitutional. Id. The trial court declared the retro-activity provision unconstitutional, “enjoined the Department from collecting use taxes on goods purchased from out-of-state vendors and delivered into Alabama for the open tax years before the enactment of Act No. 97-301,” and ordered the Department to refund to Valhalla those use taxes it had paid on such purchases between 1994 and 1997. Id. Once the judgment was certified as final pursuant to Rule 54(b), Ala. R. Civ. P., the Department appealed to the Alabama Supreme Court; the appeal was transferred to this court pursuant to Ala.Code 1975, § 12-2-7(6). Id.

This court considered whether the retro-activity provision of Act No. 97-301 was unconstitutional. We began by explaining that the legislature’s intent in enacting the amendatory act was “ ‘to clarify that current law exempts from use tax only that property sold at retail in Alabama on which sales tax was paid.’ ” Id. at 472 (quoting Act No. 97-301, § 2). We then explained the arguments presented in the trial court highlighting the need for the amendatory act:

“In the trial court, Valhalla argued that it purchased products from out-of-state vendors and that those products were delivered into Alabama. Thus, it ai-gued, the sales would be subject to the sales tax because a sale is deemed closed on delivery of the product. See Oxmoor Press, Inc. v. State, 500 So.2d 1098 (Ala.Civ.App.1986). Valhalla argued that the use tax did not apply when the sale was closed in Alabama. This interpretation of § 40-23-62, Ala.Code 1975, before its amendment, would allow a taxpayer to avoid both the use tax and the sales tax where goods were delivered into this state by an out-of-state vendor that was without sufficient contacts with Alabama to make it subject to the sales tax. The enactment of Act No. 97-301 closed off that interpretation of § 40-23-62 by providing that a transaction is exempt from Alabama’s use tax only if sales tax on the transaction has been paid to a licensed vendor. Section 3 of Act No. 97-301 provides that the statute is retroactive for all open tax years, i.e., two to three years. See § 40-2A-7(c)(2), Ala. Code 1975.”

Id. at 472-73. We emphasized that “the retroactivity provision of Act No. 97-301 would prevent taxpayers from seeking a possible refund of use taxes paid on goods purchased from out-of-state vendors and delivered into Alabama.” Id. at 473.

Turning to the issue of the constitutional challenge to the retroactivity provision, we noted that retroactive tax legislation had been historically upheld by the courts. Id. When a court is called on to consider whether retroactive legislation is constitutional, its focus is on whether the retroactivity of the legislation denies due process. Id. at 473-74 (quoting United States v. Carlton, 512 U.S. 26, 30-31, 114 S.Ct. 2018, 129 L.Ed.2d 22 (1994)). In Carlton, “the [United States Supreme] Court set forth the test to determine whether retroactive tax legislation denies due process: first, the legislation must be ‘supported by a legislative purpose furthered by rational means,’ and second, the period of retroactivity must be ‘modest.’ ” Valhalla Cemetery Co., 749 So.2d at 474 (quoting Carlton, 512 U.S. at 31, 114 S.Ct. 2018). Applying those principles, this court determined that “the retroactive provision of Act No. 97-301 is justified by a rational legislative purpose.” Id. at 475. In deciding also “that the period of retro-activity is modest,” id., we noted that “Act No. 97-301 is retroactive for two to three years.” Id. at 474. The two- to three-year period of retroactivity in Valhalla Cemetery Co. was linked to the time limitation for filing a refund petition, which, pursuant to § 40-2A-7(c)(2)a., is either three years from the date a return was filed or within two years of the payment of the tax, whichever occurred later.

The Department contends that the ret-roactivity provision of Act No. 97-301 permits it to assess use taxes due under the amended version of § 40-23-62(1) back to 1990 in the present case. It bases this argument, in part, on the fact that Accutek and IEC never filed use-tax reports with the Department. Thus, the Department contends, all tax years remain open by virtue of § 40-2A-7(b)(2)a., which permits the Department to enter an assessment at any time if “no return is filed as required.” Strangely, the Department conceded before the ALJ that, before the 1997 amendment, Accutek and IEC were not required to file use-tax reports.

IEC argues that neither it nor Accutek was required to file use-tax reports with the Department in the period before the effective date of Act No. 97-301 in May 1997 because, at that time, no use taxes were due on its purchases from out-of-state vendors that were closed in Alabama; those purchases were subject to the Alabama sales tax. § 40 — 23—1(a)(5) and § 40-23-2(1). Thus, it argues, consistent with the ALJ’s decision, that the Department may only enter assessments for the three tax years immediately preceding the preliminary assessments, see § 40-2A-7(b)(2), or, in this case, August 1995, which is three years before the entry of the Department’s September 1998 preliminary assessments. Otherwise, IEC argues, the application of the retroactivity provision raises anew the constitutional issue of whether the provision comports with due process, i.e., whether the period of retroac-tivity is “modest.”

In response, the Department asserts that, based on the retroactivity provision in Act No. 97-301, Accutek and then IEC were required to file use-tax reports on their purchases from out-of-state vendors. Because of that fact, the Department concludes, Accutek’s and IEC’s failure to file those reports permits the Department to assess the taxes due at any time. In addition, according to the Department, the fact that the amendatory act served to “clarify” the existing law, see Act No. 97-301, § 2, renders all prior tax years “open” because the taxpayer was therefore always required to file a report.

Putting aside any constitutional argument that IEC raises at the moment, we will endeavor to determine the meaning and effect of the phrase “open tax years” in the retroactivity provision of Act No. 97-301. We must be guided by the rules of statutory construction.

“It is this Court’s responsibility to give effect to the legislative intent whenever that intent is manifested. State v. Union Tank Car Co., 281 Ala. 246, 248, 201 So.2d 402, 403 (1967). When interpreting a statute, this Court must read the statute as a whole because statutory language depends on context; we will presume that the Legislature knew the meaning of the words it used when it enacted the statute. Ex parte Jackson, 614 So.2d 405, 406-07 (Ala.1993). Additionally, when a term is not defined in a statute, the commonly accepted definition of the term should be applied. Republic Steel Corp. v. Horn, 268 Ala. 279, 281, 105 So.2d 446, 447 (1958). Furthermore, we must give the words in a statute their plain, ordinary, and commonly understood meaning, and where plain language is used we must interpret it to mean exactly what it says. Ex parte Shelby County Health Care Auth, 850 So.2d 332 (Ala.2002).”

Bean Dredging, L.L.C. v. Alabama Dep’t of Revenue, 855 So.2d 513, 517 (Ala.2003). In addition, “ ‘ “ ‘[tjhere is a presumption that every word, sentence, or provision [of a statute] was intended for some useful purpose, has some force and effect, and that some effect is to be given to each, and also that no superfluous words or provisions were used.’ ” ’ ” Surtees v. VFJ Ventures, Inc., 8 So.3d 950, 970 (Ala.Civ.App.2008) (quoting Ex parte Uniroyal Tire Co., 779 So.2d 227, 236 (Ala.2000), quoting in turn other cases).

The retroactivity provision makes the change to § 40-23-62(1) retroactive to “all open tax years upon its ... becoming a law.” Based on that language, the “open tax years” are tied to the date that Act No. 97-301 became a law, i.e., May 7, 1997. The open tax years as of May 7, 1994, depend on the situation of the taxpayer. In general, the open tax years extend to a date three years before the due date of a return or report or from the date of the filing of the return or report, whichever is later. § 40-2A-7(b)(2). In cases in which the taxpayer was not required to file a return or report, the open tax years are the three years immediately preceding the due date of the tax. Id. However, in those cases in which a taxpayer was required to file a return or report but did not or in cases in which a taxpayer filed a false or fraudulent return, the open tax years could conceivably reach back as far as when the taxpayer was required to have filed returns or reports or back to when those fraudulent or false reports or returns were filed, because the Department may enter a preliminary assessment in such circumstances at any time. § 40-2A-7(b)(2)a.

The Department contends that the amendatory act served to clarify what the legislature intended § 40-23-62(1) to mean, and, therefore, it argues that the period of retroactivity reaches back to all tax years in which a taxpayer failed to file a use-tax report under the clarified exemption set out in § 40-23-62(1). See Act No. 97-301, § 2. Because under the Department’s analysis, § 40-23-62(1), as so retroactively amended, would have required Ac-cutek and IEC to have filed reports each month for each year between January 1990 and December 1997, the Department argues that Accutek and IEC failed to file reports as required, and, thus, that the Department had the right to enter an assessment against them at any time under § 40-2A-7(b)(2)a. If we understand the Department’s argument correctly, it believes that Act No. 97-301, because it was a mere “clarification” of the law, would apply retroactively even to the inception of the original language of § 40-23-62(1) in situations in which a taxpayer failed to file a use-tax report on purchases from out-of-state vendors upon which no sales tax was ever paid. Although the fact that the express purpose of Act No. 97-301 was curative and served to clarify the meaning of the use-tax exemption in § 40-23-62(1) could lead to a conclusion that the legislature intended the statute to be applied retroactively, see Riley v. Kennedy, 928 So.2d 1013, 1016-17 (Ala.2005) (citing Horton v. Carter, 253 Ala. 325, 328, 45 So.2d 10, 12 (1950)), that fact does not support the Department’s interpretation. Act No. 97-301 expressly provided for its retroactive effect in § 3. Application of the Department’s interpretation would render the language in § 3 “retroactively effective for all open tax years” meaningless and would, in fact, completely remove the need for the retroactivity provision of § 3. We are to give effect to all the words in the act, and we presume that the legislature intended each word serve a useful purpose; thus, we cannot agree with the Department’s interpretation of the interplay between § 2 and § 3 of Act No. 97-301. Instead, we conclude that to properly permit the clarification of the law the legislature intended, we must give effect to the language used in the retroactivity provision of § 3. Based on our interpretation of § 3, the Department’s conclusion that the retroactivity period is open-ended is incorrect.

We are likewise unconvinced by IEC’s argument that the ALJ’s conclusion that the three-year period should run back from the date of the Department’s preliminary assessments in September 1998 is correct. IEC argues, based in large part on the ALJ’s opinion on rehearing, that the only open tax years were the three years immediately preceding the Department’s preliminary assessments because § 40-2A-7(b)(2) permits the Department to assess taxes only for the three years before the taxes were due in situations in which a return or report was not required to be filed by the taxpayer. This construction, IEC contends, permits both statutes — § 40-23-62(1) and § 40-2A-7(b)(2) — to have their field of operation. However, to apply the provisions of § 40-2A-7(b)(2) to restrict the power of the Department to assess use taxes that became due under the application of the ret-roactivity provision unduly interferes with the clear language and intent of the retro-activity provision, which ties the period of retroactivity to the date the amendment to § 40-23-62(1) became law — May 7, 1997.

To give effect to the language in § 3 of Act No. 97-301 for the purpose of this case, we need only consider that the amendment of § 40-23-62(1) was essentially effective retroactively to May 1994, that is, three years before Act No. 97-301 became law and three years from the due date of the taxes that would have been due under the amended statute as of May 1994. To do so results in a retroactive application of the amended language of § 40-23-62(1) and results in the conclusion that, as of May 1994 and through May 1997, Accutek and then IEC were required to file use-tax reports on purchases from out-of-state vendors upon which no sales tax had been paid. Because they were required, under the retroactive amendment of § 40-23-62(1), to file use-tax reports for those purchases, Accutek’s and IEC’s failure to do so permits the Department to assess taxes for those years because the tax reports were not “filed as required.” § 40-2A-7(b)(2)a. However, the tax years before May 1994 were not reopened by the retroactive application of Act No. 97-301, because, as of the effective date of the amendatory act, those tax years were already closed. That is, the tax years before 1994 were closed because, until the act became effective in May 1997, Accutek was not required to file a use-tax return for those years under the pream-endment wording of § 40-23-62(1), and the three-year period from the due date of any taxes that would have been due under the newly amended language of the statute had it been in effect during those years before 1994 had ended. The retroactivity provision did not serve to reopen those tax years because they were forever closed to the Department at the time the act became effective. Ex parte State Dep’t of Revenue, 667 So.2d 1372, 1374 (Ala.1995) (“[T]he power to extend a limitations period can be exercised only where the bar was not complete before the enactment of the statute extending the period .... ”).

We now turn to a consideration of IEC’s second argument: whether, as applied to IEC in this manner, the retroactivity provision in Act No. 97-301, § 3, is constitutional. The Department argues that we are barred from considering IEC’s constitutional argument for three reasons: (1) because IEC did not cross-appeal from the ALJ’s order; (2) because IEC waived the argument before the trial court at oral argument on the summary-judgment motions; and (3) because IEC did not serve the attorney general as required by Ala. Code 1975, § 6-6-227. We note that IEC had no reason to appeal from the ALJ’s order, as it applied the three-year statute of limitations of § 40-2A-7(b)(l) and prevented, by and large, the retroactive application of Act No. 97-301; it was the reversal of the ALJ’s order by the trial court that triggered IEC’s argument that applying the statute retroactively to cover a seven-year period is unconstitutional as applied to IEC. Because IEC challenges the trial court’s enforcement of the retro-activity provision beyond the period it contends is constitutional and permitted by the wording of Act No. 97-301, § 3, IEC’s challenge to the statute is not a facial challenge but an “as applied” challenge, and service on the attorney general was therefore not required. Ex parte Squires, 960 So.2d 661, 665 (Ala.2006). Because IEC disputed in its postjudgment motion and on appeal the statement in the trial court’s judgment indicating that IEC had waived the constitutional argument it now raises, we will briefly consider that argument here.

As we have explained, we considered the constitutionality of the retroactivity of Act No. 97-301 in 1999 in Valhalla Cemetery Co. We found the retroactive period under Act No. 97-301, § 3, to be two to three years under the facts of that case and concluded that the period was therefore “modest.” Valhalla Cemetery Co., 749 So.2d at 474-75. IEC argues strenuously that permitting the statute to be applied retroactively for “more than 7 years” (or back to 1990) is unconstitutional because doing so is so harsh and oppressive as to violate IEC’s due-process rights. However, in permitting the Department to collect from Accutek and IEC use taxes due from May 1994 forward, we are not applying § 40-23-62(1) retroactively for more than seven years. The retroactive reach of the statute in this particular situation is, as we have said, three years. Id. The failure of Accutek and IEC to properly remit the use taxes that became due under the retroactive amendment to § 40-23-62(1) is what triggered the Department’s ability under § 40-2A-7(2)(b)a. to assess those taxes in 1998. We need not consider IEC’s constitutional argument further.

Finally, we turn to IEC’s argument regarding the 10% failure-to-file penalty, see § 40-2A-ll(a), and the 5% negligence penalty, see § 40-2A-ll(e), assessed against it for its failure to file use-tax reports from January 1990 to December 1997. IEC argues that the ALJ properly waived the penalties for reasonable cause under § 40-2A-ll(h). The ALJ found reasonable cause to waive the penalties, although it is apparent that the trial court did not agree that reasonable cause to waive the penalties existed. The ALJ waived the penalties imposed by the Department for reasonable cause pursuant to § 40-2A-ll(h) because, he said, IEC “was not required to file use tax returns before May 1997” and, he opined, IEC “may not have been aware that use tax returns were due after Act 97-301 was enacted” in May 1997. We agree with the ALJ that IEC’s failure to file use-tax returns under these circumstances supports a conclusion that the penalties assessed by the Department should be waived for reasonable cause under § 40-2A-ll(h).

In conclusion, we have determined that the Department may assess use taxes against Accutek and IEC for the period between May 1994 and December 1997. The penalties assessed for those years may not be collected because they are waived for reasonable cause under § 40-2A-ll(h). Upon remand, the Department is instructed to properly compute the use taxes due under this opinion and to refund, if necessary, any additional amounts IEC has paid pursuant to the original assessments.

REVERSED AND REMANDED WITH INSTRUCTIONS.

THOMPSON, P.J., and PITTMAN, BRYAN, and MOORE, JJ., concur.

      . The three assessments were in the amount of $60,625.80 for state sales taxes, $33,238.27 for state use taxes, and $155,440.89 for City use taxes.

      . The ALJ first ordered that the Department refund a portion of the taxes IEC had paid. The Department and the City sought a rehearing as to that order; in his order on rehearing, the AU explained in detail the reasoning underlying his order.

      . As the ALJ correctly noted, at the time Act No. 97-301 became effective, "the general three year statute was open for periods back to April 1994, because the May 20, 1994, due date of the April 1994 return was within three years of the effective date of the act.”


source: Caselaw Access Project

author: STUART, Justice. MURDOCK, Justice

license: Public Domain

text:
    Ex parte CITY OF ARAB and Alabama Department of Revenue. (In re IEC Arab Alabama, Inc. v. City of Arab and Alabama Department of Revenue).
    1071652.
    Supreme Court of Alabama.
    Oct. 31, 2008.
    J. Clark Pendergrass and Michael P. Johnson of Lanier Ford Shaver & Payne, P.C., Huntsville; and Jeff McLaughlin and Rodney L. Edmondson of McLaughlin & Edmondson, LLC, Guntersville, for petitioner City of Arab.
    Troy King, atty. gen., and J. Wade Hope, asst. atty. gen. and asst, counsel, Alabama Department of Revenue, for petitioners.
    Submitted on petitioner’s brief only.
   STUART, Justice.

The petition for the writ of certiorari is denied.

In denying the petition for the writ of certiorari, this Court does not wish to be understood as approving all the language, reasons, or statements of law in the Court of Civil Appeals’ opinion. Horsley v. Horsley, 291 Ala. 782, 280 So.2d 155 (1973).

WRIT DENIED.

COBB, C.J., and SEE, LYONS, WOODALL, SMITH, BOLIN, and PARKER, JJ., concur.

MURDOCK, J., concurs specially.

MURDOCK, Justice

(concurring specially).

I concur with the decision of this Court to deny the petition in this case. I write separately to explain my disagreement with the rationale employed by the Court of Civil Appeals as to one of the several issues presented to that court.

First, I note my agreement with the conclusion of the Court of Civil Appeals as to the primary issue presented, i.e., the intent of the legislature as to the retroac-tivity of § 40-23-62(1), Ala.Code 1975, as amended by Act No. 97-301, Ala. Acts 1997, which provides in § 3 that it shall be “retroactively effective.” I also agree with the reasoning employed by the Court of Civil Appeals to reach that conclusion. Further, I agree with the result reached by the Court of Civil Appeals, as well as its reasoning, as to the disallowance of the retroactive failure-to-file penalties.

As to the issue of notification of the attorney general, however, I disagree with the notion expressed in the opinion of the Court of Civil Appeals that the constitutional challenge advanced by IEC Arab Alabama, Inc., is an “as applied” challenge and not a “facial” challenge. If we were to decide in this case (in agreement with the position of the Alabama Department of Revenue) that the meaning of the statute was to allow unlimited retroactive assessments (thus allowing a retroactive application for the seven years at issue here), that would be the facial meaning of the statute and it would be this facial meaning that IEC would be challenging as unconstitutional. The fact that the Court of Civil Appeals rejected the Department’s position as to the facial meaning of the statute does not mean that IEC’s challenge would not have been facial in nature; it simply means that that challenge is moot. The result reached is the same, however, and I therefore concur in denying the petition.


author:
BRYAN, Judge.
     THOMAS, Judge,

text:
    ALABAMA DEPARTMENT OF YOUTH SERVICES v. STATE PERSONNEL BOARD and Willie Pollard.
    2070059.
    Court of Civil Appeals of Alabama.
    Oct. 24, 2008.

      T. Dudley Perry, Jr., gen. counsel, and Sancha E. Teele, asst. atty. gen., Department of Youth Services, for appellant.
    Alice Ann Byrne, gen. counsel, State Personnel Board, for appellees.
    Joseph C. Guillot of McPhillips Shinb-aum, LLP, Montgomery, for appellee Willie Pollard.
   BRYAN, Judge.

The Alabama Department of Youth Services (“DYS”) appeals from a judgment of the Montgomery Circuit Court affirming a decision by the State Personnel Board (“the Board”) to reinstate Willie Pollard’s employment with DYS. We reverse and remand.

Pollard was employed by DYS as a security officer. On May 22, 2006, Pollard struck a 19-year-old handcuffed student at a DYS facility. Following two hearings held by DYS regarding the incident, DYS terminated Pollard’s employment on August 29, 2006. In a letter informing Pollard of his dismissal, the executive director of DYS stated that the evidence submitted at the DYS hearings established that Pollard had violated several rules of the Board and several DYS policies. Pollard appealed his dismissal to the Board, pursuant to § 36-26-27(a), Ala.Code 1975. On December 4, 2006, an administrative law judge (“ALJ”) held a hearing on Pollard’s appeal. The ALJ subsequently issued an order recommending that the Board uphold DYS’s termination of Pollard’s employment.

On March 14, 2007, the Board issued a decision reversing DYS’s termination of Pollard’s employment. The decision of the Board states, in pertinent part:

“The [ALJ] found that the totality of the evidence warrants dismissal in this cause and recommended that [Pollard’s] dismissal be sustained. The Board hereby adopts by reference the findings of fact and conclusions of law as found by the [ALJ] as a part of this Order as if fully set forth herein.
“The Board has carefully considered the [ALJ’s] Report in this case, however[,] and found that termination is too severe a punishment. [Pollard] is hereby ordered reinstated in a probationary status for a six month period. At the end of the probationary period, [Pollard] shall not be entitled to a probationary raise. This reinstatement shall be without back pay and [Pollard] is ordered to attend training regarding proper interaction and restraint of juveniles .... ”

DYS appealed the Board’s decision to the circuit court, pursuant to § 41-22-20, Ala.Code 1975, and the circuit court affirmed. DYS timely appealed to this court.

The ALJ’s recommended order presented the following pertinent factual background:

“John Shumway, supervisor/chief of security at Mt. Meigs [Youth Services Facility, where Pollard worked] ..., testified about applicable DYS policies. ...
“Shumway explained [that DYS staff members receive training instructing them] how to control a student without any strikes or blows. Shumway testified the training teaches, among other things, how to use a student’s momentum against himself. Shumway testified, pursuant to ... training and DYS policies, a staff member may not strike a handcuffed student. Shumway affirmed strikes to the facial area and mid-section are prohibited. ...
“When questioned about self-defense, Shumway explained self-defense is permitted up to the point a student is restrained and [self-defense] is not considered prohibited corporal punishment; staff members are taught to use minimum force. Corporal punishment is strictly prohibited and includes striking a student with one’s fist.
“On May 22, 2006, at approximately 6:00/6:30 a.m., Sandy Johnson, a child care worker ..., called ‘security’ and requested assistance at the dining hall of Dorm D & EA (hereinafter ‘the dorm’). Pollard responded to the call, and he, along with Mr. Goode, another security officer ..., entered the dining hall. Johnson gave Goode a report indicating the student had demonstrated inappropriate sexual behavior. Johnson asked Pollard and Goode to escort the student to ‘lock up’ or ‘time-out’ (hereinafter ‘time-out’) located in a different building[,] Phyfer B. The student ... asked to see the report. Goode showed the report to the student. After reading the report, the student became angry and began cussing. The student threw the report at Johnson and lunged toward her. Pollard intervened and prevented the student from harming Johnson. Pollard then stated ‘Let’s put the cuffs on.’ However, Pollard was unable to subdue the student. The student and Pollard engaged in a struggle. The student overpowered Pollard and pinned him down and began choking him. Goode froze and failed to intervene and help Pollard. William Allen, a [DYS] aide, intervened and helped get the student off Pollard. The student was handcuffed with his hands behind his back. Shumway testified that, pursuant to DYS policy, using handcuffs on the student was appropriate. During the incident inside the dorm, which is not the basis of Pollard’s termination, Pollard acted in accordance with DYS policies.
“After the incident inside the dorm, [Arnold] Richardson[, a DYS aide,] calmed the student down by talking to him. The student, Pollard, Goode, and Richardson exited the dorm in order to proceed towards Phyfer B. Phyfer B is approximately 75 yards from the dorm. Upon exiting the dorm it is necessary to make a left turn in order to head towards Phyfer B. The student was uncooperative and attempted to turn right instead of left. Richardson testified Pollard swung at the student four times while the student was handcuffed. Richardson’s testimony indicates Pollard struck the student four times. Richardson stated Pollard swung at the student’s facial area twice with his left hand and then swung at the student twice more after the student bent over. Richardson admitted he could not recall whether Pollard’s fist was open or closed; he also admitted he could not recall where Pollard’s second set of punches struck the student. Richardson separated Pollard and the student. Richardson took the student aside and calmed him down by talking to him. Pollard then escorted the student to Phyfer B. ... Richardson was not concerned Pollard would strike the student again; the student was subdued and ‘ready to listen.’
“Counsel for Pollard ... referred Richardson to a portion of his prior testimony from the June 27, 2006, DYS fact-finding [hearing]. At that hearing, when questioning Richardson about the incident at issue, counsel for Pollard asked: ‘Would you even say he could have been protecting himself against the student coming at him?’ to which Richardson responded ‘Most definite .... ’ Richardson’s answer to that particular question, however, must be considered in light of his entire testimony. Richardson’s overall testimony describing Pollard’s actions does not indicate Pollard acted in self-defense; rather, it indicates Pollard acted improperly. Richardson’s prior testimony regarding the details of Pollard’s swings varies slightly; however, and importantly, Richardson’s testimony regarding the major facts — that Pollard swung at the student four times and struck the student— twice while the student was standing up and twice when the student was bent over — has remained consistent and firm.
“Pollard testified that he did not strike, punch, or kick the student. Pollard testified the student tripped and fell after he exited the dorm. Pollard testified he pulled the student up. Pollard testified the student forced his body towards Pollard, i.e., attempting to ‘headbutt’ him. Pollard testified he turned the student around by ‘pushing’ him and using his hands on the student in order to redirect him in the right direction towards Phyfer B. However, during the hearing, when Pollard first described his ‘pushes’ he (without being requested to do so) demonstrated the gesture with a closed fist [and] then immediately demonstrated the gesture with an open fist and fingers spread, as if to ‘correct’ himself. Pollard also testified he hurt his left hand during the incident inside the dorm. Pollard testified his fingers on this left hand were still crooked and when he wanted to bend his fingers he had to bend them ‘like that’ — demonstrating using his right hand to help make a fist with his left hand. However, several times during the hearing Pollard made a fist with his left hand without any assistance from his right hand.
“Richardson testified Pollard’s actions during the incident at issue were contrary to DYS training and policies. ... Roderick Reese, another security guard, and Harrison[, a DYS aide,] both testified it was a violation of DYS policies to strike a student who was handcuffed.
“In the present case, the evidence was conflicting regarding whether Pollard struck the student in violation of DYS policies during the incident that occurred outside of the dorm on May 22, 2006. The undersigned finds the evidence establishes, more probably than not, Pollard swung at the student four times and struck the student — twice while the student was standing up and twice when the student was bent over.
“The undersigned finds Pollard’s testimony regarding the incident at issue not to be credible. During this portion of his testimony, Pollard fidgeted and his eyes shifted back and forth .... Pollard’s testimony that he did not strike the student but merely attempted to ‘push’ the student in order to redirect him in the right direction towards Phy-fer B was not believable. The only testimony indicating Pollard’s left hand was too injured during the incident inside the dorm to make a fist and strike the student outside the dorm shortly thereafter was his own self-serving (unsubstantiated) testimony; the undersigned does not find that testimony to be believable either.
“The undersigned finds Richardson’s testimony regarding the incident at issue to be credible. As previously stated, Richardson’s testimony regarding the major facts — that Pollard swung at the student four times and struck the student, twice while the student was standing up and twice when the student was bent over — has remained consistent and firm.”

(Footnotes omitted.)

In reviewing an agency’s decision, this court’s standard of review is the same as that of the circuit court. Alabama Dep’t of Envtl. Mgmt. v. Legal Envtl. Assistance Found., Inc., 973 So.2d 369, 375 (Ala.Civ.App.2007). Section 41-22-20(k), Ala.Code 1975, governs our review and the circuit court’s review of an agency’s decision, such as the Board’s decision in this case. In pertinent part, it provides:

“(k) Except where judicial review is by trial de novo, the agency order shall be taken as prima facie just and reasonable and the court shall not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact, except where otherwise authorized by statute. The court may affirm the agency action or remand the case to the agency for taking additional testimony and evidence or for further proceedings. The court may reverse or modify the decision or grant other appropriate relief from the agency action ... if the court finds that the agency action is due to be set aside or modified under standards set forth in appeal or review statutes applicable to that agency or if substantial rights of the petitioner have been prejudiced because the agency action is any one or more of the following:
“(1) In violation of constitutional or statutory provisions;
“(2) In excess of the statutory authority of the agency;
“(3) In violation of any pertinent agency rule;
“(4) Made upon unlawful procedure;
“(5) Affected by other error of law;
“(6) Clearly erroneous in view of the reliable, probative, and substantial evidence of the whole record; or
“(7) Unreasonable, arbitrary, or capricious, or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.”

(Emphasis added.) Our supreme court has stated:

“This Court has further defined the standard of review of an agency ruling in Alabama as follows:
“ ‘ “Judicial review of an agency’s administrative decision is limited to determining whether the decision is supported by substantial evidence, whether the agency’s actions were reasonable, and whether its actions were within its statutory and constitutional powers. Judicial review is also limited by the presumption of correctness which attaches to a decision by an administrative agency.” ’ ”

Ex parte Medical Licensure Comm’n of Alabama, 897 So.2d 1093, 1096-97 (Ala.2004) (quoting Ex parte Alabama Bd. of Nursing, 835 So.2d 1010, 1012 (Ala.2001), quoting in turn Alabama Medicaid Agency v. Peoples, 549 So.2d 504, 506 (Ala.Civ.App.1989)). “This court reviews a circuit court’s judgment without a presumption of correctness because the circuit court is in no better position to review an agency’s decision than this court. Clark v. Fancher, 662 So.2d 258, 261 (Ala.Civ.App.1994).” Alabama State Pers. Bd. v. Garner, 4 So.3d 545, 550-51 (Ala.Civ.App.2008).

On appeal, DYS first argues that the Board, in reinstating Pollard’s employment, violated DYS rules and policies. DYS contends that DYS rules and policies mandate Pollard’s dismissal in this case. DYS first cites Rule 950-1-1-03(3), Ala. Admin. Code (DYS), which provides, in pertinent part:

“(3) The [DYS] director shall have the following powers and duties:
“(b) To exercise supervision over all the officers and employees of the department, and should any such officer or employee fail to perform faithfully any of the duties which are lawfully prescribed for him or if he fails or refuses to observe or conform to any rule, regulation or policy of the [Alabama Youth Services B]oard, to remove him from office, in conformity with the state merit system law.”

DYS also cites Rule 950-l-l-.06(d), Ala. Admin. Code (DYS), which provides that the Alabama Youth Services Board shall have the power “[t]o establish and promulgate reasonable rules, policies, orders and regulations for the carrying out of its duties and responsibilities.” Apparently pursuant to that rule, DYS adopted DYS Policy 9.15, which provides, in pertinent part:

“It is DYS policy that the use of physical force by DYS personnel be limited to instances of self-protection, protection of the student or others who might be endangered by the student[’]s actions, prevention of serious property damage, prevention of escapes and to maintain or regain control, and then only as a last resort, and in accordance with appropriate statutory authority. Physical force is never justified as punishment.”

DYS contends that DYS Policy 9.15 requires that Pollard be discharged for striking the student in this case. However, DYS Policy 9.15, by its plain language, does not mandate dismissal of an employee found to be in violation of that policy. Similarly, we do not read Rule 950-1-1-,03(3)(b) as requiring the director of DYS to dismiss an employee in every instance in which an employee violates a DYS rule, regulation, or policy. To hold otherwise would render meaningless the Board’s administrative review of dismissals for such violations.

Rule 950-l-l-.03(3)(b) grants the director of DYS the power to dismiss an employee “in conformity with the state merit system law.” Of course, the director’s decision to dismiss an employee does not end the matter. Section 36-26-27(a), Ala.Code 1975, a part of the State Merit Act, § 36-26-1 et seq., Ala.Code 1975, permits the Board to review a classified employee’s dismissal and to impose a lesser penalty than dismissal. See State Pers. Bd. v. Hardeman, 893 So.2d 1173, 1177-79 (Ala.Civ.App.2004) (discussing the evolution of § 36-26-27(a) and the caselaw interpreting it). Accordingly, the Board’s decision, made pursuant to § 36-26-27(a), to impose a lesser penalty upon Pollard does not violate Rule 950 — 1—1—.03(3)(b).

Next, DYS argues that the Board acted arbitrarily and capriciously in reinstating Pollard’s employment with DYS. In Ex parte Dunn, 962 So.2d 814, 816-17 (Ala.2007), our supreme court quoted from this court’s discussion of the arbitrary-and-capricious standard in Board of School Commissioners of Mobile County v. Dunn, 962 So.2d 805 (Ala.Civ.App.2006), rev’d on other grounds, 962 So.2d 814:

“The plurality opinion of the Court of Civil Appeals correctly states that the arbitrary-and-capricious standard of review is ‘extremely deferential,’ Dunn, 962 So.2d at 809, and that the reviewing court may not substitute its judgment for that of the [Board]. That opinion also aptly states that where ‘reasonable people could differ as to the wisdom of [the Board’s] decision[,] ... the decision is not arbitrary.’ Dunn, 962 So.2d at 809. Additionally, we find no fault with the following statement in that opinion:
“ ‘If the decision-maker has “ ‘examined the relevant data and articulated a satisfactory explanation for its action, including a “rational connection between the facts found and the choice made,” ’ ” its decision is not arbitrary. See Alabama Dep’t of Human Res. v. Dye, 921 So.2d [421, 426 (Ala.Civ.App.2005) ] (quoting Prometheus Radio Project v. FCC, 373 F.3d [372, 389 (3d Cir.2004) ] (quoting in turn Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962))).’
“Dunn, 962 So.2d at 810.”

“A decision is not arbitrary where there is a reasonable justification for the decision or where the determination is founded upon adequate principles or fixed standards.” Sexton v. Tuscaloosa County Civil Serv. Bd., 426 So.2d 432, 435 (Ala.Civ.App.1983). “ ‘ “ ‘[A] decision is capricious if it is so unreasonable as to “shock the sense of justice and indicate lack of fair and careful consideration.” ”” ” Alabama Dep’t of Human Res. v. Dye, 921 So.2d 421, 427 (Ala.Civ.App.2005) (quoting Westring v. James, 71 Wis.2d 462, 476-77, 238 N.W.2d 695, 702-03 (1976), quoting in turn Scharping v. Johnson, 32 Wis.2d 383, 390, 145 N.W.2d 691, 695 (1966)).

In this case, a determination of whether the Board’s decision is arbitrary or capricious is complicated by a conflict within the Board’s decision and the Board’s failure to explain its reason for reinstating Pollard. As noted, the Board adopted the ALJ’s findings of fact and conclusions of law. The ALJ found that Pollard had struck the student four times while the student was handcuffed, and the ALJ concluded that DYS’s dismissal of Pollard was warranted. However, in contradiction to the ALJ’s recommended order, the Board reversed DYS’s dismissal of Pollard and imposed a lesser punishment on him. In making that decision, the Board did not provide an explanation beyond stating that it had “carefully considered” the ALJ’s recommended order and had found that dismissal was “too severe a punishment.” The Board’s adopted findings of fact and conclusions of law conflict with the Board’s summary conclusion to reinstate Pollard’s employment. It is the responsibility of the Board to weigh the evidence before it and to make its decision accordingly. “In no event is a reviewing court ‘authorized to reweigh the evidence or to substitute its decisions as to the weight and credibility of the evidence for those of the agency.’ ” Alabama Bd. of Nursing v. Williams, 941 So.2d 990, 999 (Ala.Civ.App.2005) (quoting Ex parte Williamson, 907 So.2d 407, 416-17 (Ala.2004)).

Section 41-22-20(k), Ala.Code 1975, provides that the court reviewing an agency action may “remand the case to the agency ... for further proceedings.” Accordingly, we reverse the circuit court’s judgment affirming the Board’s decision, and we remand the case with instructions for that court to remand the case to the Board in order for the Board to reconcile the conflict in its decision. We express no opinion regarding the appropriate manner in which the Board is to reconcile the conflict in its decision.

REVERSED AND REMANDED WITH INSTRUCTIONS.

THOMPSON, P.J., and PITTMAN and MOORE, JJ., concur.

THOMAS, J., concurs in the judgment and dissents from the instructions on remand.

THOMAS, Judge,

concurring in the judgment and dissenting from the instructions on remand.

The evidence in this case makes it clear that the Alabama Department of Youth Services (“DYS”) considers DYS Policy 9.15, limiting the use of physical force on students, to be an integral part of its purpose, function, and reason for being, see § 44-1-1, Ala.Code 1975 (stating that the purpose of the chapter establishing DYS is “to promote and safeguard the social well-being and general welfare of the youth of the state through a comprehensive and coordinated program of public services for the prevention of juvenile delinquency and the rehabilitation of delinquent youth”). DYS believes that the decision of the State Personnel Board (“the Board”) compromises that purpose, especially in light of Willie Pollard’s dismissal from his previous employment as a correctional officer at the Montgomery County Detention Facility based on the charge of using unnecessary force on an inmate.

I agree with the main opinion that the Board’s decision to reverse Pollard’s dismissal and to impose a lesser punishment on bim conflicts with the findings of fact and conclusions of law that the Board adopted. I differ with the main opinion, however, because I would not give the Board another opportunity (it has already had two opportunities) to explain its reasons for mitigating Pollard’s punishment.

Instead, I believe this court should reverse the judgment of the circuit court and remand the cause to that court with instructions to enter a judgment in favor of DYS. Given the conflict between the Board’s decision and the findings of fact and conclusions of law the Board adopted — including the conclusion that “the totality of the evidence warrants termination in this cause” — the Board’s decision is arbitrary and capricious because it did not spell out its reasons for mitigation.

In Ex parte Dunn, 962 So.2d 814, 824 (Ala.2007), a county school board terminated the employment of a high school science teacher and varsity basketball coach because he had condoned physically abusive discipline of the basketball team. The employee contested his discharge and received a hearing. The hearing officer found that, although the employee had, in fact, allowed the physical abuse of the students on the basketball team, his unblemished employment history as a teacher should be considered separately from his gross misconduct as a basketball coach. The hearing officer determined that the employee should not be discharged from his employment as a teacher but, instead, should be suspended without pay for 30 days and barred from coaching for 4 years.

The school board appealed to this court, which reversed the hearing officer’s decision, holding that the inconsistency between the hearing officer’s finding that the employee had engaged in gross misconduct as a basketball coach and the hearing officer’s reinstating the employee to his position as a teacher made the decision arbitrary and capricious. See Board of Sch. Comm’rs of Mobile County v. Dunn, 962 So.2d 805 (Ala.Civ.App.2006) (plurality opinion). The Alabama Supreme Court reversed, holding, in effect, that there was no inconsistency because the hearing officer had “examined all the facts, articulated a satisfactory explanation for his action, and stated a rational connection between the facts and the discipline he imposed.” Ex parte Dunn, 962 So.2d at 824.

The same cannot be said in this case. The Board adopted the findings of fact and conclusions of law of the administrative law judge (“ALJ”) in toto, failed to point out any contrary factual considerations that weighed in its decision to reduce Pollard’s punishment, and offered no explanation for its decision that “termination is too severe a punishment.”

I acknowledge that Act No. 83-673, Ala. Acts 1983, amending § 36-26-27(a), Ala. Code 1975, permitting the Board to impose a punishment less severe than termination of employment does not expressly require the Board to set out the reasons for its decision to reduce an employee’s punishment. In my judgment, however, such a requirement is implicit, especially considering that one basis for challenging the Board’s decision is that the decision is “[u]nreasonable, arbitrary, or capricious, or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.” § 41-22-20(k)(7). In discussing the “arbitrary and capricious” ground for reversal of an agency decision, this court has stated:

«In Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir.2004), the United States Court of Appeals for the Third Circuit, in construing 5 U.S.C. § 706, the judicial-review provision of the federal Administrative Procedure Act, upon which the [Alabama Administrative Procedure Act] is modeled, explained a court’s review of agency action under the ‘arbitrary and capricious’ standard:
“ ‘The scope of review under the “arbitrary and capricious” standard is “narrow, and a court is not to substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983).... Nevertheless, we must ensure that, in reaching its decision, the agency examined the relevant data and articulated a satisfactory explanation for its action, including a “rational connection between the facts found and the choice made.” Id. (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962)). ...
“‘Finally, the traditional [administrative procedure act] standard of review is even more deferential “where the issues involve ‘elusive’ and ‘not easily defined’ areas....” Sinclair [Broad. Group, Inc. v. FCC ], 284 F.3d [148] at 159 [ (D.C.Cir.2002) ]. Yet even when an administrative order involves policy determinations on such elusive goals, a “rationality” standard is appropriate. See [FCC v. Nat’l Citizens Comm, for Broad.], 436 U.S. [775] at 796-97, 98 S.Ct. 2096 [ (1978) ] (finding that the Commission acted rationally in determining that diversification of ownership would enhance the possibility of increasing diverse viewpoints). ... ’
373 F.3d at 389-90.”

Alabama Dep’t of Human Res. v. Dye, 921 So.2d 421, 426 (Ala.Civ.App.2005). See also Alabama Dep’t of Pub. Health v. Perkins, 469 So.2d 651, 652 (Ala.Civ.App.1985) (holding that “a decision cannot be said to be ‘arbitrary’ where there is a reasonable justification for the decision or where the determination is founded upon adequate principles or fixed standards”).

Moreover, for every reported case in which the Board has reduced an employee’s punishment pursuant to the 1983 amendment to § 36-26-27(a), the Board has provided an explanation for its decision to mitigate. See Alabama State Pers. Bd. v. Hardeman, 893 So.2d 1173, 1175 (Ala.Civ.App.2004) (noting that the Board’s order stated that “ ‘[t]he [Personnel] Board has searched the record for mitigation and finds ... that mitigation is appropriate in this ease. [The employee] was called into a supervisor’s office and informed, for the first time, that he was attending his pre-dismissal conference. Though any due process problem was potentially cured by the de novo hearing before the ... Personnel Board’s [ALJ], this lack of advance notice could have placed [the employee] at a disadvantage’ ”); State Dep’t of Conservation & Natural Res. v. State Pers. Bd., 637 So.2d 894, 896 (Ala.Civ.App.1994) (noting that “the Board’s order ... states that, although it adopted the hearing officer’s findings and conclusions, mitigating circumstances exist, such as the lack of progressive discipline and [the employee’s] employment record, to support the imposition of a lesser punishment”); and Alabama Dep’t of Mental Health & Mental Retardation v. Kirby, 579 So.2d 675, 678 (Ala.Civ.App.1991) (noting that the Board’s order stated that the employee’s “termination was mitigated largely by the Board’s finding of ‘no past disciplinary infractions concerning the care of patients’ ”).

The main opinion relies on the second sentence of § 41~22-20(k) as authority for remanding this cause to give the Board an opportunity to provide a post hoc justification for its mitigation decision. That sentence declares that “[tjhe court may ... remand the case to the agency for taking additional testimony and evidence or for further proceedings.” (Emphasis added.) I believe that “the court” refers to the circuit court — not this court. Section 41-22-20 governs judicial review in the circuit couH. See § 41-22-20(b) (stating that “[a]ll proceedings for review may be instituted by filing a notice of appeal.... either in the Circuit Court of Montgomery County or in the circuit court of the county in which the agency maintains its headquarters”); § 41-22-20(c) (stating that “[i]f the circuit court shall fail or refuse to grant supersedeas or stay [of the agency decision], the party seeking such relief may petition the appropriate court to which the appeal or review lies to order a supersedeas or stay of the action or order of the agency from which review is sought”); and § 41-22-20(d) (stating that “[t]he petition for judicial review in the circuit court shall be filed within 30 days after the filing of the notice of appeal or review”). See also § 41-22-21 (governing the “[ajppeal [to the Court of Civil Appeals] of [a] final judgment of [the] circuit court under Section 42-22-20”).

I also believe that the “remand” referenced in the second sentence of § 41-22-20 indicates the procedure outlined in subsection (i) of § 41-22-20, which provides:

“In proceedings for judicial review of agency action in a contested case, except where appeal or judicial review is by a trial de novo, a reviewing court shall not itself hear or accept any further evidence with respect to those issues of fact whose determination was entrusted by law to the agency in that contested case proceeding; provided, however, that evidence may be introduced in the reviewing court as to fraud or misconduct of some person engaged in the administration of the agency or procedural irregularities before the agency not shown in the record and the affecting order, ruling, or award from which review is sought, and proof thereon may be taken in the reviewing court. If, before the date set for hearing a petition for judicial review of agency action in a contested case, it is shown to the satisfaction of the court that additional evidence is material and that there were good reasons for failure to present it in the contested case proceeding before the agency, the court may remand to the agency and order that the additional evidence be taken before the agency upon conditions determined by the court. The agency may modify its findings and decision in the case by reason of the additional evidence and shall file that evidence and any modification, new findings, or decision with the reviewing court and mail copies of the new findings, or decision to all parties.”

Subsection (i) authorizes a circuit court, in certain limited circumstances, to remand a cause to an agency to receive additional evidence or to conduct other proceedings. See Alabama Dep’t of Mental Health & Mental Retardation v. Kirby, 579 So.2d at 678 (noting that, in order to remand for the taking of new evidence, the circuit court must be presented with a remand request before the date set for the circuit court hearing, the “new evidence” must be material, and the requesting party must establish “good reasons” for failure to present it in the contested case proceeding before the agency). Neither subsection (i) nor subsection (k) of § 41-22-20 authorizes this court to remand the cause for the taking of “new evidence” or for “further proceedings.”

Although this court looks to the § 41-22-20(k)(l)-(7) factors to determine whether the circuit court erred in its judgment on review of an agency action, see, e.g., State Dep’t of Pub. Safety v. Sexton, 748 So.2d 200, 215 (Ala.Civ.App.1998), we do not have all the powers that the legislature has given the circuit court on original review of an agency action. See § 41-22-21, Ala.Code 1975 (Commentary) (stating that “it is now made explicitly clear that original review comes in the circuit court and not in the Court of Civil Appeals”).

Because I believe this court has no authority to remand the cause to the circuit court with instructions for that court to remand the cause to the Board to explain the reasons it mitigated Pollard’s punishment, I dissent from the instructions on remand.

      . This case was assigned to Judge Bryan on September 8, 2008.

      . Section 36-26-27(a), Ala.Code 1975, provides, in pertinent part:
      "(a) An appointing authority may dismiss a classified employee whenever he considers the good of the service will be served thereby .... The dismissed employee may, within 10 days after notice [of discharge], appeal from the action of the appointing authority by filing with the board and the appointing authority a written answer to the charges. The board shall, if demand is made in writing by the dismissed employee within 10 days after notice of discharge, order a public hearing and, if the charges are proved unwarranted, order the reinstatement of the employee under such conditions as the board may determine. Upon a majority vote of the board, the board may impose a punishment other than termination including but not limited to a reinstatement with forfeiture of back wages and benefits between the date of termination and the date of the board's order reinstating the employee, or a suspension up to and including 30 days.”

      . In concluding that the judgment should be reversed without instructions for further proceedings, the dissent relies on Ex parte Dunn, supra. In Ex parte Dunn, the hearing officer, like the Board in this case, was the decision maker regarding whether an employee should be dismissed. In that case, the supreme court determined that the hearing officer’s explanation for mitigating the employee's punishment was well-founded. Conversely, in this case, the Board, though stating that mitigation was proper, simply did not articulate an explanation for its actions. Given the unclear nature of the Board's decision, we believe the better course is to remand the case for further proceedings in order to clarify that decision.

      . The record indicates that DYS filed an application for rehearing with the Board, arguing that the Board’s decision to reinstate Pollard was arbitrary and capricious in light of its adoption of the administrative law judge’s findings of fact and conclusions of law. In response to that application, the Board stated: "To clarify the prior ruling of the State Personnel Board: This Board found that even if the allegations were true, the termination was too harsh a punishment and that mitigation was proper.”

      . Act No. 83-673 provides:
      "Upon a majority vote of the board, the board may impose a punishment other than termination including but not limited to a reinstatement with forfeiture of back wages and benefits between the date of termination and the date of the board's order reinstating the employee, or a suspension up to and including 30 days.”


author: THOMPSON, Presiding Judge.

text:
    Ex parte Jeff FRANKS. (In re Heather Franks v. Jeff Franks).
    2070898.
    Court of Civil Appeals of Alabama.
    Oct. 24, 2008.

      William C. Porter, Cullman, for petitioner.
    J. Chad Floyd of Berry, Berry & Little, Cullman, for respondent.
   THOMPSON, Presiding Judge.

On April 15, 2008, Heather Franks (“the mother”) filed a complaint seeking a divorce from Jeff Franks (“the father”). Among other things, the mother sought an award of custody of, and child support for, the parties’ child.

On May 9, 2008, the mother filed a motion in which she sought an award of pendente lite custody of the parties’ child, an award of child support, and the imposition of a temporary restraining order against the father. On May 13, 2008, the trial court entered an order granting the mother’s May 9, 2008, motion. In that order, the trial court awarded the mother pendente lite custody of the parties’ child, ordered the father to pay $850 per month in pendente lite child support, and ordered that the father restrain from “assaulting, contacting in person or by telephone, threatening, harassing, interfering with, coming around, talking to, cursing at, or in any way intimidating the [mother].”

The April 15, 2008, complaint was served upon the father on June 25, 2008. Two days later, on June 27, 2008, the father’s attorney filed a notice of appearance in the action. We note that the certificate of service for the mother’s May 9, 2008, motion states that that motion was seived “upon counsel for all parties,” although at that time the father had not been served with process notifying him of the divorce action and no attorney had filed a notice of appearance on his behalf; the May 9, 2008, motion contained no specific names of the persons upon which it might have been served. The trial court’s May 13, 2008, order contains no notation that it was served on the parties.

On June 30, 2008, the father filed a petition for a writ of mandamus in this court. In his petition for a writ of mandamus, the father argued that the trial court had erred in entering its May 13, 2008, order without providing him notice and an opportunity to be heard. As an initial matter, we must address the timeliness of the filing of the father’s petition for a writ of mandamus. A petition for a writ of mandamus must be filed within “a reasonable time.” Rule 21(a)(3), Ala. R.App. P. The presumptively reasonable time within which to file a petition for a writ of mandamus is the same time allowed for taking an appeal, i.e., 42 days from the date of entry of the judgment or order being challenged. Rule 21(a)(3); Rule 4(a)(1), Ala. R.App. P. (providing that an appeal must be filed within 42 days of the entry of judgment); and Ex parte Fiber Transp., L.L.C., 902 So.2d 98, 99-100 (Ala.Civ.App.2004).

The father filed his petition for a writ of mandamus on June 30, 2008, 48 days after the entry of the May 13, 2008, order; thus, the father’s petition for a writ of mandamus was not filed within the presumptively reasonable time. Rule 21(a)(3) provides that if a party fails to file a petition for a writ of mandamus within the presumptively reasonable time, the petition for a writ of mandamus “shall include a statement of circumstances constituting good cause for the appellate court to consider the petition, notwithstanding that it was filed beyond the presumptively reasonable time.”

The father included in his petition for a writ of mandamus a statement pursuant to Rule 21(a)(3) setting forth the reasons his petition could not have been filed earlier and why this court should accept the petition. As the father points out, he was not served with a copy of the divorce complaint until June 25, 2008, which is 43 days from the entry of the May 13, 2008, order. Thus, the father was not a party to the action until after the expiration of the presumptively reasonable time for challenging the May 13, 2008, order. Further, the father contends that the May 9, 2008, motion was not served on him and that the trial court considered that motion without affording him an opportunity to be heard. Nothing in the materials submitted to this court by the parties indicates that the father received notice of the mother’s May 9, 2008, motion or the trial court’s May 13, 2008, order granting that motion. The mother, in her brief submitted to this court, does not argue that the father received notice of her motion or of the trial court’s May 13, 2008, order. The father filed his petition for a writ of mandamus challenging the May 13, 2008, order five days after he received service of the complaint in the divorce action. We conclude that the father has set forth a statement of facts constituting good cause for this court to consider the petition notwithstanding the fact that it was filed outside the presumptively reasonable time.

“ ‘A writ of mandamus is an extraordinary remedy, and it “will be issued only when there is: 1) a clear legal right in the petitioner to the order sought; 2) an imperative duty upon the respondent to perform, accompanied by a refusal to do so; 3) the lack of another adequate remedy; and 4) properly invoked jurisdiction of the court.” ’ ”

Ex parte Monsanto Co., 862 So.2d 595, 604 (Ala.2003), quoting Ex parte Butts, 775 So.2d 173, 176 (Ala.2000), quoting in turn Ex parte United Serv. Stations, Inc., 628 So.2d 501, 503 (Ala.1993).

In her response to the father’s petition for a writ of mandamus, the mother has argued that the issuance of a writ would be inappropriate because, she contends, the father had available to him another adequate remedy. See Ex parte Monsanto Co., 862 So.2d at 604 (one requirement for the issuance of a writ of mandamus is the lack of another adequate remedy). Specifically, the mother argues that, before he filed a petition for a writ of mandamus in this court, the father was required to seek relief in the trial court by filing a Rule 59, Ala. R. Civ. P., post-judgment motion seeking to alter, amend, or vacate the May 13, 2008, order. We disagree. First, the May 13, 2008, order was a nonfinal, or interlocutory, order, and a Rule 59 motion may be filed only in reference to a final judgment. Rule 54(a), Ala. R. Civ. P. (defining the term “judgment” to include “a decree and any order from which an appeal lies”); Malone v. Gainey, 726 So.2d 725, 725 n. 2 (Ala.Civ.App.1999).

In his petition for a writ of mandamus, the father argues that the trial court violated his due-process rights by failing to afford him notice of the mother’s May 9, 2008, motion and an opportunity to be heard on the issues raised in that motion before the trial court entered its May 13, 2008, order. In support of his arguments, the father relies on Ex parte Williams, 474 So.2d 707, 710 (Ala.1985), in which our supreme court held that “a parent having custody of a minor child cannot be deprived of that custody, even temporarily, without being given adequate notice.” This court has explained the requirement of affording notice to a parent of a threatened deprivation of his or her custody rights as follows:

“Although the state has a compelling interest in determining the best interest and welfare of a child, the interest is not compelling enough to allow the determination to be made without notice to the child’s parents. The purpose of requiring notice is to preserve the fairness of the hearing; and it is of vital importance to the child, as well as the parent, that the hearing be fair. A parent must have notice of the issues the court will decide in order to adduce evidence on those issues before the court, to give the court a basis from which a determination most beneficial to the child can be made. Otherwise, the child, rather than being helped, might even be harmed.”

Thorne v. Thorne, 344 So.2d 165, 170 (Ala.Civ.App.1977).

In Ex parte Williams, supra, our supreme court noted an exception to the rule that a parent must be afforded notice and an opportunity to be heard before that parent can be deprived of custody of his or her child. Pursuant to that exception, a pendente lite grant of custody may be made without notice to the parent if “ ‘the actual health and physical well-being of the child are in danger.’ ” Ex parte Williams, 474 So.2d at 710 (quoting Thorne v. Thorne, 344 So.2d at 171) (emphasis omitted); see also M.S. v. State Dep’t of Human Res., 681 So.2d 633, 634 (Ala.Civ.App.1996) (“In situations where it appears that the actual health and physical well-being of the minor child are in danger, a trial court has the authority to make a temporary ruling concerning custody until a final determination can be made.”).

With regard to the issue of custody of the child, in her May 9, 2008, motion, the mother alleged only that she was “the fit and proper person” to have pendente lite custody of the child. The mother also alleged in that motion that the father had harassed her at her place of employment. The mother made no allegations tending to indicate that the health or well-being of the child was endangered or threatened as a result of the father’s alleged conduct in her workplace. In the absence of allegations indicating that the “actual health and physical well-being of the minor child are in danger,” the trial court was without authority to enter an order removing custody from the father without affording the father notice and an opportunity to be heard. Ex parte Williams, 474 So.2d at 710; Thorne v. Thorne, 344 So.2d at 171.

The mother argues that danger to the child can be “inferred” from the father’s alleged actions at her place of employment. In Ex parte Russell, 911 So.2d 719 (Ala.Civ.App.2005), the father in a custody-modification action alleged, among other things, that the mother had committed acts of domestic violence against him and that their child had witnessed the altercation. The trial court in Ex parte Russell entered an order awarding the father pen-dente lite custody of the child; the mother had not been served with the custody-modification complaint or notice of the hearing on the issue of pendente lite custody. The mother filed a motion to set aside the pendente lite custody order, and the trial court conducted a hearing at which it received only the arguments of counsel. The trial court then entered an order denying the mother’s motion to set aside the pendente lite custody order, and the mother filed a petition for a writ of mandamus; that petition challenging the original pen-dente lite custody order was timely filed. This court, citing Ex parte Williams, supra, granted the mother’s petition and issued a writ of mandamus directing the trial court to conduct an evidentiary hearing on the father’s motion for pendente lite custody. Ex parte Russell, 911 So.2d at 725. In doing so, this court concluded, among other things, that the materials before the court contained no evidence tending to indicate that the child’s health or physical well-being were endangered at the time the original pendente lite custody order was entered, and, therefore, that due process afforded the mother the right to notice and an opportunity to be heard on the issue of pendente lite custody. Ex parte Russell, 911 So.2d at 724.

The allegations in the present case concerning the father’s conduct do not even rise to the level of the allegations in Ex parte Russell, supra. In Ex parte Russell, the father alleged that the parties’ child had witnessed an act of domestic violence committed by the mother. In this case, the mother alleges that the father harassed her at her place of employment; there is no allegation that that purported conduct was witnessed by the parties’ child or that it amounted to conduct that endangered the health or well-being of the child. Accordingly, we reject the mother’s argument that the father’s alleged conduct at her place of employment was a sufficient basis on which to base a conclusion that the father’s actions endangered the health or physical well-being of the child.

In this case, because it does not appear that the health or physical well-being of the child was in danger, the father was entitled to notice and an opportunity to be heard on the issue of pendente lite custody. Ex parte Williams, supra. Accordingly, we conclude that the father is entitled to a writ of mandamus requiring the trial court to vacate that part of its May 13, 2008, order pertaining to the pendente lite custody of the child.

The father also challenges the May 13, 2008, order on the basis that the allegations in the mother’s May 9, 2008, motion were insufficient to support a temporary restraining order. The father relies on Ex parte Hurst, 914 So.2d 840 (Ala.2005), and Ex parte Williams, supra, which is cited in Ex parte Hurst.

“Rule 65(b), Ala. R. Civ. P., provides, in pertinent part:
“ ‘A temporary restraining order may be granted without written or oral notice to the adverse party or that party’s attorney only if (1) it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or that party’s attorney can be heard in opposition, and (2) the applicant’s attorney certifies to the court in writing the efforts, if any, which have been made to give the notice and the reasons supporting the claim that notice should not be required.’
“(Emphasis added.) ‘While the trial court is accorded wide discretion in determining whether or not a [temporary restraining order] should be granted, when such an order is issued without a hearing, a close scrutiny of the existing circumstances under which it is sought should be made by the trial court.’ Ex parte Williams, 474 So.2d 707, 711 (Ala.1985) (emphasis added). ‘Furthermore, this kind of relief cannot be accorded without notice or hearing unless “the verified facts of the complaint [or affidavit] clearly justify the petitioner’s apprehension about the threat of irreparable injury.” ’ Id. (quoting Falk v. Falk, 355 So.2d 722, 725 (Ala.Civ.App.1978) (emphasis added)).”

Ex parte Hurst, 914 So.2d at 842. In Ex paHe Hurst, supra, our supreme court issued a writ of mandamus directing the trial court to vacate a temporary restraining order when there was no evidence regarding why the return of the property in dispute within 72 hours was necessary to prevent “ ‘immediate and irreparable injury, loss, or damage.’ ” Ex parte Hurst, 914 So.2d at 843 (quoting Rule 65(b), Ala. R. Civ. P.).

In his brief submitted to this court, the father points out that the mother signed her May 9, 2008, verified motion on April 9, 2008, and that the date on the certificate of service for that motion is listed as April 17, 2008. In that verified motion, the mother’s allegations giving rise to her request for a temporary restraining order state:

“[O]n or about April 15, 2008, the [father] entered upon the business premises of the [mother] to embarrass, threaten, intimidate and degrade the [mother]. Accordingly, the [mother] humbly requests that this Honorable Court grant her a Temporary Restraining Order enjoining the [father] from threatening, harassing, annoying, telephoning, contacting, and/or otherwise communicating, directly or indirectly, with the [mother] while she is at her place of employment.”

The trial court is vested with discretion in determining whether to grant a temporary restraining order. Ex parte Williams, supra. However, when such an order is entered without the benefit of a hearing, as it was in this case, “a close scrutiny of the existing circumstances under which it is sought should be made by the trial court.” Ex parte Williams, 474 So.2d at 711. A close scrutiny of the allegations in the mother’s verified motion indicate a glaring inconsistency regarding the allegations pertaining to the father’s conduct. Specifically, the mother’s verified motion alleged that the father harassed her at her place of employment on April 15, 2008, six days after she signed the motion on April 9, 2008.

With regard to the issue of child support, in her May 9, 2008, motion, the mother made allegations concerning the amount of the father’s income. However, she submitted no evidence in support of those allegations, and the father was afforded no notice or opportunity to present evidence on that issue. Although the mother alleged that she was in need of assistance in supporting the child, the allegations pertaining to child support in her May 9, 2008, motion do not rise to the level of setting forth a basis for an “ ‘ “apprehension about the threat of irreparable injury” ’ ” justifying an award of child support without first providing notice to the father. Ex parte Hurst, 914 So.2d at 842 (quoting Ex parte Williams, 474 So.2d at 711).

We conclude that the allegations in the mother’s May 9, 2008, motion were insufficient to warrant the entry of the May 13, 2008, order without providing notice and an opportunity to be heard to the father. The father’s petition for a writ of mandamus is granted, and the trial court is ordered to vacate its May 13, 2008, order and to conduct a hearing on the mother’s May 9, 2008, motion.

PETITION GRANTED; WRIT ISSUED.

PITTMAN, BRYAN, THOMAS, and MOORE, JJ., concur.

      . The parties and the trial court refer to the award of custody in this matter as an award of "temporary custody.” The more accurate term for the nature of the custody award at issue in this case is "pendente lite custody.”

      . An earlier attempt at service was returned as undeliverable due to an insufficient address for the father.

      . The certificate of service for the mother's motion is dated April 17, 2008. Accordingly, we cannot construe the fact that the mother signed on April 9, 2008, the motion filed on May 9, 2008, as a clerical error with regard to the date of the signing of the motion.