OPINION

ALAN E. HIGHERS, P.J., W.S., delivered the opinion of the Court, in which DAVID R. FARMER, J., and J. STEVEN STAFFORD, J., joined.

Plaintiffs were assessed, and paid taxes under the Drug Tax, which was later declared unconstitutional. Plaintiffs sought refunds individually, and on behalf of all others similarly situated. The trial court certified the class, and the Department filed this interlocutory appeal challenging certification. Because the Taxpayer Remedies Statute, which must be strictly construed as a derogation of sovereign immunity, does not contemplate the maintenance of a class action, we reverse the trial court's grant of class certification.

I. FACTS & PROCEDURAL HISTORY

The Tennessee Department of Revenue (the "Department") issued notices of assessment against Daniel C. Wicker, II, and Joseph D. Williams (the "Plaintiffs") on September 14, 2007, pursuant to Tennessee Code Annotated section 67-4-2801, et seq. (the "Drug Tax"), which, effective January 1, 2005, taxed "unauthorized substances and illicit alcoholic beverages." Both Mr. Wicker's alleged liability of $18,649.58 and Mr. Williams' alleged liability of $1,765.13 were collected in full.

Both Mr. Williams and Mr. Wicker filed claims for a refund of the assessed tax, which were received by the Department on December 21, 2007 and March 3 or 4, 2008, respectively. At that time, the Department took no action regarding the Plaintiffs' claims. On December 19, 2008, Plaintiffs filed a Petition, individually, and on behalf of all others similarly situated, seeking refunds of taxes paid as well as other costs and fees.

On July 24, 2009, the Tennessee Supreme Court declared the Drug Tax unconstitutional, as it exceeded the General Assembly's taxing powers under the Tennessee Constitution. Waters v. Farr, 291 S.W.3d 873, 908-13 (Tenn.2009). Acknowledging the Waters decision, the Department attempted to issue refund checks to Mr. Williams and Mr. Wicker, representing the amounts paid plus interest. Moreover, the Department requested that Plaintiffs consent to the entry of an Agreed Final Order dismissing their claims. Although it is unclear whether Plaintiffs cashed the checks, they clearly objected to the dismissal of their claims, and on August 28, 2009, they filed a "Motion to Certify Class." Over the Department's objection, an "Order Certifying Class" was entered on November 5, 2009, which defined the class as "all taxpayers who paid all or part of their assessed tax under the Drug Tax since its effective date of January 1, 2005, who have not been fully refunded their paid assessment with interest, and who have not otherwise reached a formal, final settlement of their refund under the tax." The order required the Department to turn over to Plaintiffs, under seal, certain information pertaining to the purported class members by November 16, 2009, and it further required Plaintiffs to contact class members by December 1, 2009.

The Department filed an application for permission to appeal to this Court on November 10, 2009 pursuant to Tennessee Code Annotated section 27-1-1251 and Tennessee Rule of Appellate Procedure 9. It subsequently sought a stay of the November 16 deadline in the trial court. This Court entered an Order on November 16, 2009 granting a stay of the information disclosure deadline pending resolution of the Department's application. On November 24, 2009, we permitted the Department to file an interlocutory appeal, and we extended the stay pending resolution of such appeal.

II. ISSUE PRESENTED

Appellant presents the following issue for review, summarized as follows:

For the following reasons, we reverse the chancery court's grant of class certification.

III. STANDARD OF REVIEW

"[T]he determination of whether an action should proceed as a class action is a matter which is left to the sound discretion of the trial judge." Meighan v. U.S. Sprint Commc'ns Co., 924 S.W.2d 632, 637 (Tenn.1996). The trial court's decision "`will only be modified if it was inconsistent with the substantial weight of the evidence or resulted from the trial court's misinterpretation of controlling legal principles.'" Walker v. Sunrise Pontiac-GMC Truck, Inc., 249 S.W.3d 301, 308 (Tenn. 2008) (quoting Freeman v. Blue Ridge Paper Prod., Inc., 229 S.W.3d 694, 703 (Tenn. Ct.App.2007)).

Gov't Employees Ins. Co. v. Bloodworth, No. M2003-02986-COA-R10-CV, 2007 WL 1966022, at *5-6 (Tenn.Ct.App. June 29, 2007) (internal citations omitted).

IV. DISCUSSION

In this interlocutory appeal, the Department seeks review of the chancery court's grant of class certification pursuant to Tennessee Rule of Civil Procedure 23. The Department alleges two principal bases for its assertion that class certification is inappropriate: 1) Tennessee Code Annotated section 67-1-1801, et seq., the "Taxpayer Remedies for Disputed Taxes" (hereinafter the "Taxpayer Remedies Statute") requires taxpayers to bring individual suits; and 2) Plaintiffs have failed to satisfy the prerequisites of Tennessee Rule of Civil Procedure 23.

A. Sovereign Immunity

At the outset, we address the applicability of sovereign immunity in this case. "Suits may be brought against the state in such manner and in such courts as the Legislature may by law direct." Tenn. Const. art. I, § 17. "In construing Art. I, § 17 [our Supreme] Court has held that statutes which permit suits against the state under the authority of this provision are in derogation of the state's inherent exemption from suit and must be strictly construed." Beare Co. v. Olsen, 711 S.W.2d 603, 605 (Tenn.1986) (citing State ex rel. Allen v. Cook, 106 S.W.2d 858 (Tenn.1937)). Jurisdiction under such statutes may not be enlarged by implication. Id. (citing Hill v. Beeler, 286 S.W.2d 868 (Tenn.1956)). "And suits for tax refunds are actually against the State and can be maintained only in the manner and upon the conditions consented to by the State." Id. (citing Griffith Motors, Inc. v. King, 641 S.W.2d 200 (Tenn.1982); Lyons v. Lay, 179 Tenn. 388, 166 S.W.2d 778 (1942)).

B. Taxpayer Remedies Statute

The Taxpayer Remedies Statute expressly provides that "[t]he procedure established by this part is the sole and exclusive jurisdiction for determining liability for all taxes collected or administered by the commissioner of revenue," with certain exceptions irrelevant to this case. Tenn. Code Ann. § 67-1-1804. This is true of refund claims based upon constitutional grounds. Tenn.Code Ann. § 67-1-1802(a)(1) ("The commissioner . . . is empowered and directed to refund to taxpayers all taxes collected or administered by the commissioner that are, on the date of payment, paid in error paid against any statute, rule, regulation or clause of the constitution of this state or of the United States.") (emphasis added). Moreover, the statute provides that "[t]o the extent that the provisions of this section conflict with any other provision of law, the provisions of this section shall control and supersede all such laws." Tenn.Code Ann. § 67-1-1807(c). Therefore, we must consider whether the Taxpayer Remedies Statute authorizes a class action.

The parties disagree as to the remedies available to taxpayers under the Taxpayer Remedies Statute. Both parties acknowledge the availability of the refund claim and the assessment challenge:

Tenn.Code Ann. § 67-1-1801.

A refund claim must be filed "within three (3) years from December 31 of the year in which the payment was made[,]" and it "must set forth each ground upon which a refund is claimed, the amount of such refund, the tax period, the tax type, and information reasonably sufficient to apprise the commissioner of the general basis for the claim." Tenn.Code Ann. § 67-1-1802(a)(1). Refund claims must be resolved within six months following receipt of the claim, and if denied, a chancery court suit may be filed within one year from the date the refund claim was filed with the commissioner. Id. at § 67-1-1802(b), (c). The second statutory remedy, the assessment challenge, must be filed "within ninety (90) days from the mailing of the notice of assessment." Id. at § 67-1-1801(b)(1).

Plaintiffs contend that the statute provides a third method—67-1-1801(i) for seeking a tax refund:

The trial court, in its Order Certifying Class, agreed:

Thus, according to Plaintiffs and the trial court, this third method allows a taxpayer, by rendering payment and filing suit, to forgo the requirement of filing either a refund claim or assessment challenge.

However, the Department contends that 67-1-1802(i) does not provide an alternate method for seeking a refund, but that it merely "concerns the collection or payment of amounts relating to assessments already subject to an assessment challenge suit." According to the Department, 67-1-1802(i) obviates the need for a taxpayer, who has filed a valid assessment challenge and later pays money towards that assessment either voluntarily to halt interest accrual or because of a Department levy, to go through the refund claim procedures, as section (i) converts the assessment challenge into a refund claim to the extent of any amounts so paid.

We concur with the Department's statutory reading. First, it seems clear that if the legislature had intended to set forth a third method, it would have included this method in section (a)(1), which expressly lays out "the taxpayer's remedies[.]" Moreover, section (i) states that "[t]o the extent of any amount collected by or paid to the commissioner with respect to an assessment, or any portion of the assessment. . . the suit shall proceed as a timely suit for refund of taxes paid." Tenn.Code Ann. § 67-1-1801(i). Thus, it appears that section (i) contemplates an existing assessment challenge rather than the initiation of a suit. The interpretation that section (i) concerns existing assessment challenges is consistent with the language of section 67-1-1803(b), which addresses the calculation of interest. Section 67-1-1803(b) states that when a suit proceeds as a timely filed suit for refund pursuant to section 67-1-1801(i), and it is later determined that the taxes were wrongfully paid, a refund is owed of the amount paid, plus interest, to be calculated "on the date of payment in the case of any tax collected after suit was filed under § 67-1-1801." Id. at § 67-1-1803(b) (emphasis added). This language simply does not comport with the interpretation of both Plaintiffs and the trial court, that section (i) authorizes a refund where a taxpayer merely renders payment and then files suit. Finally, we reject the interpretation of Plaintiffs and the trial court, as it would render superfluous the requirements of sections 67-1-1801, and 1802 regarding refund claims.

We have found two methods available for challenging tax liability; however, we must consider only whether a class action is available in a refund claim pursuant to section 67-1-1801, as Plaintiffs seek a refund of taxes paid, rather than to challenge an assessment.

In this interlocutory appeal, the Department contends that the Taxpayer Remedies Statute requires each taxpayer to bring suit on his or her own behalf to recover his or her own payments and to vindicate his or her own rights. The trial court, in allowing class certification, made the following conclusions of law:

On appeal, the Department cites the statutory language, itself, as evidence of class preclusion:

Tenn.Code Ann. § 67-1-1801 (emphasis added). However, at oral argument before this Court, the Department conceded that the use of the singular form of a noun does not necessarily preclude a class action under all statutes.4 Beyond the legislature's use of "the taxpayer," the Department contends that a class action is incompatible with the procedures laid out in the Taxpayer Remedies Statute. As we stated above, a taxpayer bringing a refund claim must, "within three (3) years from December 31 of the year in which the payment was made," file a claim setting "forth each ground upon which a refund is claimed, the amount of such refund, the tax period, the tax type, and information reasonably sufficient to apprise the commissioner of the general basis for the claim." Id. at § 67-1-1802(a)(1). According to the Department, a class action simply fails to comply with these requirements.

Citing a refund claim's requirement that it include "information reasonably sufficient to apprise the commissioner of the general basis for the claim," Plaintiffs argue that the purpose of the Taxpayer Remedies Statute is simply to put the Department on notice of the tax liability challenged. Thus, they contend, because "the Commissioner knew—better than anybody —at the time of the refund claims in this cause that the taxing statute had already been declared unconstitutional, knew the number of taxpayers assessed thereunder, and knew the amounts in question[,]" it was unnecessary for each taxpayer to comply with the statutory requirements. The trial court agreed, stating that "the claims timely filed by both class representatives on their own behalf and all others similarly situated, challenging the Drug Tax on constitutional grounds, served as sufficient notice to the State's tax collectors and other public officials as to what portion of the collected revenues were subject to challenge." It also stated that "[t]o suggest that each taxpayer must file an individual claim so that the Department could appreciate the threat posed to the Tennessee treasury ignores reality, and only sets up unnecessary obstacles for those seeking the rightful return of their property[.]" Further, the trial court implied that compliance with the statute's administrative filing requirements was unnecessary because the Department failed to take action on refunds filed until the Waters decision was announced, and thus, individual filing was a "futile gesture[ ]."5

As we stated above, because this is a suit against the state, it "may be maintained only in the manner and upon the conditions consented to by the State."6 Beare Co., 711 S.W.2d at 605 (citations omitted). Accordingly, we cannot hold that the Department's receipt of notice dispensed with the statute's filing requirements. Based on the statute's individualized requirements that "the taxpayer against whom the assessment is made" file a refund claim "within three (3) years from December 31 of the year in which the payment was made[,]" "set[ting] forth each ground upon which a refund is claimed, the amount of such refund, the tax period, [and] the tax type," Tenn.Code Ann. §§ 67-1-1801, -1802, we find that the Taxpayer Remedies Statute regarding refund claims simply does not contemplate maintenance of a generalized class action. Because the trial court's certification of the class disregards the explicit procedures for challenging tax liabilities established by the legislature, we reverse such certification.

In certifying the class, the trial court gave "important consideration[ ]" to its belief that denying certification would result in the "absolute absence of any remedy for the 2005 taxpayers."7 Under the Taxpayer Remedies Statute, refund claims regarding payments made in 2005 must have been filed by December 31, 2008— before the Drug Tax was declared unconstitutional in July 2009. However, the trial court's belief in the absence of a remedy simply ignores the fact that each 2005 taxpayer had at least three years to file a refund claim. Nothing prevented these taxpayers from filing a claim prior to the Supreme Court's Waters decision. In fact, by September 2007, the eastern section of this Court had declared the Drug Tax unconstitutional, and Steven Waters, the 2005 taxpayer in the ultimately definitive Waters Supreme Court decision, availed himself of the statutorily available remedies within the appropriate time frame.8 "To satisfy the requirements of the Due Process Clause ... the State must provide taxpayers with, not only a fair opportunity to challenge the accuracy and legal validity of their tax obligation, but also a `clear and certain remedy,' for any erroneous or unlawful tax collection to ensure that the opportunity to contest the tax is a meaningful one." McKesson Corp. v. Div. of Alcoholic Beverages and Tobacco, Dep't of Bus. Regulation of Florida, 496 U.S. 18, 38, 110 S.Ct. 2238, 110 L.Ed.2d 17 (1990) (internal citations omitted). The Taxpayer Remedies Statute provided Drug Tax taxpayers with both—a generous three year period in which to challenge liability, and a court-ordered refund of wrongfully—collected taxes.

Having determined that the Taxpayer Remedies Statute forecloses class certification, we need not consider whether the requirements of Tennessee Rule of Civil Procedure 23 have been satisfied.

V. CONCLUSION

For the aforementioned reasons, we reverse the chancery court's grant of class certification. Costs of this appeal are taxed to Appellees, Daniel C. Wicker, II, and Joseph D. Williams, for which execution may issue if necessary.