Scott K. Field, Justice.
Reagan National Advertising of Austin, Inc. d/b/a Reagan National Advertising
Reagan owns and operates billboards in the Austin area. The City regulates these billboards and requires them to be registered. Before amending its regulations in 2008-2009, the City assessed a "billboard registration fee" of $220 per billboard every two years (an effective rate of $110 per year). After the amendments, the City collected an assessment of $200 per billboard per year, although the City could not point to anything it had done by way of a study, budget, or survey to determine the costs associated with the City's registration program.
In 2009, Robert Rowan, a City employee, analyzed the $200 billboard assessment. In an email sent to his superiors in November 2009, Rowan concluded that an assessment of $140 would be "a more reasonable fee" and would "close the gap between the revenue and expenditures of running this program." Daniel Cardenas, another City employee, later conducted a study concluding that $242 per year was the proper assessment. After communicating with his superior, Cardenas raised his estimate to $352 per year. In 2012, the City lowered the assessment to $190 per year.
Reagan, under protest, paid the $200 billboard assessment each year from 2009 to 2012 and the $190 assessment each year for 2013 and 2014. In April 2010, Reagan sued the City in federal district court, Judge Lee Yeakel presiding, challenging the constitutionality of the billboard assessment. After Reagan filed suit, the City retained a consulting firm to conduct a study of the billboard assessment. This firm concluded that "the cost of service for administering the billboard registration fee is $190." Meanwhile, Reagan retained its own consultant, who determined that the assessment should be about $43 per year.
On November 30, 2011, following a bench trial, Judge Yeakel issued a final judgment dismissing Reagan's suit without prejudice for lack of jurisdiction. In his findings of fact and conclusions of law, Judge Yeakel concluded that the City's billboard assessment is a "tax" for purposes of the Tax Injunction Act (TIA) and, therefore, the court lacked subject-matter jurisdiction over Reagan's suit. Under the TIA, federal courts lack subject-matter jurisdiction to "enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." See 28 U.S.C. § 1341; Washington v. Linebarger, Goggan, Blair, Pena & Sampson, LLP, 338 F.3d 442, 444 (5th Cir.2003). On December 29, 2011, the City filed a motion for new trial, which Judge Yeakel denied by an order signed on February 6, 2012.
In its final judgment signed on March 31, 2015, the trial court ordered that Reagan take nothing on its claims. The court also issued findings of fact and conclusions of law, in which it found that "[t]he activities performed for the billboard registration program are related to the program" and that "[t]he fee is based on the City's costs for actual activities performed." The trial court also concluded that "Judge Yeakel's ruling based on the [TIA] is not res judicata as to this suit," that "[t]here is a reasonable relationship between the amount of the fee and the City's costs," that "[t]he primary purpose of the fee, in light of the ordinance that authorizes the fee as a whole, is for regulation," and that "[t]he City's fee is reasonable and constitutional." Finally, the court concluded that "Reagan's claims for fees paid in August of 2009 and March of 2010 are time-barred." This appeal followed.
Statute of Limitations
In its third issue on appeal,
Reagan's claims are governed by a two-year statute of limitations. See Tex. Civ. Prac. & Rem.Code § 16.003(a); Lowenberg v. City of Dall., 168 S.W.3d 800, 801 (Tex. 2005) (per curiam). Because Reagan paid its assessments for 2009 and 2010 in March 2010 or before and filed this suit in April 2012, more than two years later, its claims for these years are barred unless the statute of limitations was tolled. Reagan argues that a savings clause tolled the statute of limitations because Reagan filed its federal action within the limitations period and then filed this suit in state court
Tex. Civ. Prac. & Rem.Code § 16.064(a).
In response, the City points out that the federal court signed its judgment dismissing Reagan's claims on November 30, 2011, and Reagan filed this suit on April 25, 2012, more than 60 days later. The City argues that because Reagan did not file this suit within 60 days after the federal court signed its judgment, section 16.064 does not toll the statute of limitations and Reagan's claims are untimely. Whether section 16.064 tolled the statute of limitations is a question of law we review de novo. See Brown v. Fullenweider, 135 S.W.3d 340, 342 (Tex.App.-Texarkana 2004, pet. denied); see also First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631 (Tex.2008) ("The construction of a statute is a question of law we review de novo.").
Section 16.064's first requirement is met because the court in which Reagan originally filed this action dismissed the case for lack of jurisdiction. See Tex. Civ. Prac. & Rem.Code § 16.064(a)(1). Therefore, we must determine whether Reagan filed its state-court action within 60 days of the date when the federal court's judgment "bec[ame] final." See id. § 16.064(a)(2). As the Texas Supreme Court has recognized, whether a judgment is considered "final" depends on the context. See Long v. Castle Tex. Prod. Ltd. P'ship, 426 S.W.3d 73, 78 (Tex.2014) ("We assess a judgment's finality differently, depending upon the context."); Street v. Honorable Second Court of Appeals, 756 S.W.2d 299, 301 (Tex.1988) ("[T]he term `final,' as applied to judgments, has more than one meaning."). We are not aware of any precedent from the Texas Supreme Court or from this Court deciding when a federal district court's judgment becomes final for purposes of section 16.064 when, as here, neither party appeals the judgment. See Vale v. Ryan, 809 S.W.2d 324, 327 (Tex. App.-Austin 1991, no writ) ("We do not address the question of when a disposition becomes final for purposes of section 16.064 where, for example, a district-court dismissal for lack of jurisdiction is later affirmed on appeal.") (italics removed).
We need not decide in this case precisely when a federal district court's judgment becomes final for purposes of section 16.064, because here Reagan unquestionably refiled in state court within the statutory timeframe. The federal court denied the City's motion for new trial on February 6, 2012. See Fed.R.Civ.P. 59(e) ("A motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment."). Reagan then had 30 days in which it could have filed a notice of appeal. See Fed. R.App. P. 4(a)(1)(A) ("In a civil case ... the notice of appeal ... must be filed with the district clerk within 30 days after entry of the judgment or order appealed from."); id. R. 4(a)(4)(A)(v) (providing that if party timely files motion for new trial under Rule 59, "the time to file an appeal runs for all parties from the entry of the order disposing of the last such remaining motion"). In addition, Reagan still could have filed an additional motion for relief from the federal court's judgment under Rule 60(b). See Fed.R.Civ.P. 60(b), (c). We conclude that, for the purposes of section 16.064, the federal court's judgment dismissing Reagan's claims did not become final until at least 30 days from its February 6th order denying the City's motion for new trial.
Accordingly, we sustain Reagan's third issue.
In its first two issues, Reagan contends that the trial court erred in deciding that the federal court's conclusion that the billboard assessment is a tax did not preclude relitigation of the issue and in holding that the assessment is a constitutional regulatory fee.
Federal law governs the preclusive effect of the federal court's judgment in Reagan's subsequent state-court action. See Jeanes v. Henderson, 688 S.W.2d 100, 103 (Tex.1985) ("Even though the original lawsuit involved both federal and state-related claims, the fact that it took place in federal court requires us to follow the federal law of res judicata."); Hayes v. Pin Oak Petroleum, Inc., 798 S.W.2d 668, 671 (Tex.App.-Austin 1990, writ denied) (per curiam) ("Our analysis of this cause is governed by federal substantive law. Where the earlier judgment was rendered in federal court, we must follow the substantive federal law concerning res judicata and collateral estoppel."). Although the parties use the term "res judicata," (i.e., claim preclusion), the substance of their contentions more precisely concerns a question of issue preclusion — whether the federal court's decision that the billboard assessment constitutes a tax has preclusive effect in state court. The doctrine of issue preclusion "precludes relitigation of only those issues actually litigated in the original action, whether or not the second suit is based on the same cause of action." Houston Prof'l Towing Ass'n v. City of Hous., 812 F.3d 443, 447 (5th Cir.2016) (internal quotation marks omitted); see B & B Hardware, Inc. v. Hargis Indus., Inc., ___ U.S. ___, 135 S.Ct. 1293, 1302, 191 L.Ed.2d 222 (2015) ("This Court has long recognized that the determination of a question directly involved in one action is conclusive as to that question in a second suit.") (internal quotation marks omitted); Restatement (Second) of Judgments § 27 (1982) ("When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.").
Issue preclusion applies only if four conditions are met:
State Farm Mut. Auto. Ins. Co. v. LogistiCare Sols., LLC, 751 F.3d 684, 689 (5th Cir.2014) (quoting United States v. Shanbaum, 10 F.3d 305, 311 (5th Cir.1994)). Whether issue preclusion applies is a question of law we review de novo. See Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1050 (9th Cir.2008); Computer Assocs.
We must begin, then, by deciding whether the federal court's determination that the billboard assessment is a tax under the TIA involved an issue of fact or law that is identical to the question of whether the assessment is a tax under article VIII, section 1(f) of the Texas Constitution. In determining whether an assessment is a tax under the TIA, federal courts consider whether the assessment is imposed: (1) by an agency or by the legislature, (2) upon those it regulates or upon the community as a whole, and (3) for the purpose of defraying regulatory costs or for general revenue-raising purposes. See Neinast v. Texas, 217 F.3d 275, 278 (5th Cir.2000) (citing Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1011 (5th Cir.1998)); San Juan Cellular Tel. Co. v. Public Serv. Comm'n of P.R., 967 F.2d 683, 685 (1st Cir.1992). However, federal courts have noted that the third factor, the purpose and use of the assessment, is the "critical factor," especially when the first two factors do not point toward the same conclusion. See Neinast, 217 F.3d at 278 ("The third factor, the ultimate use of the funds, thus becomes our critical question."); Marcus v. Kansas Dep't of Revenue, 170 F.3d 1305, 1311 (10th Cir.1999) ("[T]he critical inquiry focuses on the purpose of the assessment and the ultimate use of the funds."). As the Fourth Circuit has explained:
Collins Holding Corp. v. Jasper Cty., S.C., 123 F.3d 797, 800 (4th Cir.1997) (citations omitted).
Here, in his findings of fact and conclusions of law, Judge Yeakel concluded that the first factor suggested that the billboard assessment is a tax because it was imposed by the City's legislative body and that the second factor suggested that the assessment is a regulatory fee because it was imposed only on billboard owners rather than on the public at large. Turning to the third factor, Judge Yeakel noted that the billboard assessments are deposited into the City's general-revenue fund and that the City has no separate billboard-regulatory fund. He also noted that the parties had presented conflicting evidence at trial concerning whether the assessment was revenue-neutral. Judge Yeakel then made the following findings:
(footnote omitted) (emphasis added). Finally, in a footnote, Judge Yeakel made the following statement:
Judge Yeakel went on to conclude that the billboard assessment is a tax under the TIA and therefore the court lacked subject-matter jurisdiction over Reagan's suit.
We conclude that Judge Yeakel's determination under the third TIA factor that the billboard assessment benefits the entire community rather than only defraying the cost of the City's billboard regulation is identical, for the purposes of issue preclusion, to the question of whether the assessment is a tax under article VIII, section 1(f) of the Texas Constitution. To determine whether an assessment is a tax under article VIII, section 1(f), courts consider whether the primary purpose of the assessment is for regulation or for raising revenue. See Texas Boll Weevil Eradication Found., Inc. v. Lewellen, 952 S.W.2d 454, 461 (Tex.1997) ("`The principle of distinction generally recognized is that when, from a consideration of the statute as a whole, the primary purpose of the fees provided therein is the raising of revenue, then such fees are in fact occupation taxes, and this regardless of the name by which they are designated.'") (quoting H. Rouw Co. v. Texas Citrus Comm'n, 151 Tex. 182, 247 S.W.2d 231, 234 (1952)); City of Hous. v. Harris Cty. Outdoor Advert. Ass'n, 879 S.W.2d 322, 326 (Tex.App.-Houston [14th Dist.] 1994, writ denied) ("To determine whether an exaction authorized by statute or ordinance constitutes an occupation tax or a license fee, the test is whether the primary purpose of the exaction, when the statute or ordinance is considered as a whole, is for regulation or for raising revenue."). In determining the primary purpose of the assessment, "[t]he critical issue is whether the assessment is intended to raise revenue in excess of that reasonably needed for regulation." Lewellen, 952 S.W.2d at 461. "To be reasonable, a license fee cannot be excessive nor more than reasonably necessary to cover the cost of granting the license and of exercising proper police regulation, or it must bear some reasonable relationship to the legitimate object of the licensing ordinance." City of Houston, 879 S.W.2d at 326-27 (emphasis removed). Therefore, Judge Yeakel's decision that the billboard assessment raised revenue in excess of the reasonable cost of registering billboards and benefitted the entire community is identical to a determination that the assessment is a tax under article VIII, section 1(f). Thus, the first condition of issue preclusion is met here.
Under the second issue-preclusion condition, we must determine whether the issue of the assessment's status was fully and vigorously litigated in the federal-court action. We conclude that it was.
Having determined that each of the four issue-preclusion conditions has been satisfied, we conclude that issue preclusion applies and that the federal court's determinations should have precluded relitigation in the trial court of whether the billboard assessment is a tax under article VIII, section 1(f) of the Texas Constitution. We therefore sustain Reagan's first two issues.
Because the City's billboard assessment constitutes a tax on the outdoor advertising business under article VIII, section 1(f), the Texas Constitution provides that it may not exceed half of the tax levied by the State on outdoor advertising. It is undisputed that the State levies no tax on billboards; therefore, the City's billboard assessment violates the Texas Constitution. An unconstitutional tax is void from its inception, so Reagan would ordinarily be entitled to a refund of the entire amount it paid — an amount to which the parties stipulated. See Wichita Cty. v. Robinson, 155 Tex. 1, 276 S.W.2d 509, 515 (1954) (op. on reh'g) (noting "as a general rule a law held unconstitutional is void from the beginning and was never valid and enforceable at any time"); Colden v. Alexander, 141 Tex. 134, 171 S.W.2d 328, 335 (Tex.1943) (noting that statute held to be unconstitutional "is absolutely and utterly void in its entirety" and "can have no effect to accomplish anything"). However, Reagan has specifically prayed for a refund of only $198,450.00, which is less than the full amount of the assessment, and we will therefore render judgment in Reagan's favor for that amount.
Having sustained Reagan's first, second, and third issues,