§ 105-241.18. Class actions. - North Carolina Statutes

§ 105‑241.18.  Classactions.

(a)        Authority. – Aclass action against the State for the refund of a tax paid may be maintainedonly on the grounds of an alleged unconstitutional statute and only if therequirements of Rule 23 of the North Carolina Rules of Civil Procedure and therequirements of this section are met. For purposes of this section, a classaction commences upon the later of the following:

(1)        The date a complaintis filed in accordance with G.S. 105‑241.17 alleging the existence of aclass pursuant to Rule 23 of the North Carolina Rules of Civil Procedure.

(2)        The date a complaintfiled in accordance with G.S. 105‑241.17 is amended to allege theexistence of a class.

(b)        Class. – To serveas a class representative of a class action brought under this section, ataxpayer must comply with all of the conditions in G.S. 105‑241.17 andthe taxpayer's claims must be typical of the claims of the class members. Ataxpayer who is not a class representative is eligible to become a member of aclass if the taxpayer could have filed a claim for refund under G.S. 105‑241.7as of the date the class action commenced or as of a subsequent date set by thecourt, whether or not the taxpayer actually filed a claim for refund as of thatdate. An eligible class member who is not a class representative and whoindicates a desire to be included in the class in accordance with the procedureapproved by the court under subsection (c) of this section is not required tofollow the procedures in G.S. 105‑241.11 through G.S. 105‑241.17for the administrative and judicial review of a request for refund or aproposed denial of a request for refund.

(c)        Procedure. – Tobecome a member of a class action brought under this section, an eligibletaxpayer must affirmatively indicate a desire to be included in the class inresponse to a notice of the class action. If the court so orders, theDepartment must provide to a class representative a list of names and lastknown addresses of all taxpayers who are readily determinable by the Departmentand who are eligible to become a member of the class. The court must approvethe content of a notice of a class action, the method for distributing thenotice, and the procedure by which an eligible taxpayer affirmatively indicatesa desire to be included in the class. The class representative must advance thecosts of notifying eligible taxpayers of the class action.

(d)        Statute ofLimitations. – The statute of limitations for filing a claim for refund of taxpaid due to an alleged unconstitutional statute is tolled for a taxpayer who iseligible to become a member of a class action. The tolling begins on the datethe class action is commenced. For a taxpayer who does not join the class, thetolling ends when the taxpayer does not affirmatively indicate a desire to beincluded in the class within the time and in accordance with the procedureapproved by the court under subsection (c) of this section. For a taxpayer whojoins the class, the tolling ends when a court enters any of the following in theclass action:

(1)        A final orderdenying certification of the class.

(2)        A final orderdecertifying the class.

(3)        A final orderdismissing the class action without an adjudication on the merits.

(4)        A final judgment onthe merits.

(e)        Effect onNonparticipating Taxpayers. – A taxpayer who does not become a member of aclass may file and prosecute a claim for refund, if the statute of limitationshas not otherwise expired for filing the claim, or may contest a pendingassessment in accordance with the procedures in G.S. 105‑241.11 throughG.S. 105‑241.17. Except as otherwise provided in this subsection, theeffect of an adjudication in a class action on a nonparticipating taxpayer'sclaim for refund or contest of an assessment is governed by the normal rulesrelating to claim preclusion and issue preclusion.

If a final judgment on themerits is entered in a class action in favor of the class, the followingapplies to an eligible taxpayer who did not become a member of the class:

(1)        The taxpayer is notentitled to receive any monetary relief awarded to the class on account oftaxes previously paid by the taxpayer.

(2)        If the taxpayer hasbeen assessed for failure to pay the tax at issue in the class action and thetaxpayer has not paid the assessment, then the assessment is abated.

(3)        The taxpayer isrelieved of any future liability for the tax that is the subject of the classaction.  (2008‑107,s. 28.28(b).)