In Chevron USA, Inc. v Department of Revenue, No. 13111D, (La. Bd. Tax App. July 29, 2025), the Louisiana Board of Tax Appeals (the “Board”) held that the participation of Chevron USA, Inc. (the “Taxpayer”) in multiple status conferences was sufficient to avoid abandonment under La. C.C.P. art. 561 (“Art. 561”). The Board adopted an equitable stance in interpreting Art. 561 and rejected the Louisiana Department of Revenue’s (the “Department”) argument that participation in status conferences does not qualify as a “sufficient step” under Art. 561 to preclude abandonment. While the Board’s ruling is favorable to taxpayers, it underscores the importance of tracking abandonment dates and considering appropriate action to avoid having to contest a dismissal before the Board.

The matter originated from a petition for redetermination of a corporate income and franchise tax assessment that the Taxpayer filed on January 28, 2022. The Department filed an answer on March 15, 2022. During the course of the litigation, the Board held a total of nine status conferences from April 20, 2022 through April 24, 2025 at which Taxpayer and the Department regularly appeared and during which the Board’s administrator concluded that the matter was progressing towards final resolution. The tenth status conference was scheduled for October 22, 2025. However, less than a week after the ninth status conference, the Department filed an ex parte Motion for an Order of Dismissal Without Prejudice For Abandonment. The Order of Dismissal was signed by the Board. The Taxpayer timely challenged the Order of Dismissal.

Louisiana Code of Civil Procedure Art. 561 provides that an action is abandoned when the parties fail to take any step in prosecuting or defending a case in a trial court for a period of three years. Abandonment arises as a matter of law, without the need for a formal order. However, any party may file an ex parte motion for the trial court to enter a formal order of dismissal due to abandonment. Art. 561 also provides that any formal discovery shall be deemed to be a step in the prosecution or defense of an action.

In this case, the Department argued that neither party took any steps in prosecuting the case since the Department filed its answer to the Taxpayer’s petition in March 2022, and that pursuant to Art. 561, the case had abandoned by operation of law. The Department contended that the Board on its own initiative requested the status conferences and that actions by the Board are not considered “steps” in the prosecution or defense of an action for purposes of abandonment under La. C.C.P. art. 561 because such actions by the Board are not “actions by a party.” Thus, according to the Department, the parties themselves had taken no further steps in the case to avoid abandonment.

In response, the Taxpayer filed an Opposing Motion to Set Aside Dismissal and For Attorney’s Fees, arguing that it had participated in each of the status conferences, evidencing that it was actively prosecuting the case. The Taxpayer also argued that the Department was wrong in applying Art. 561 because the Board had not formally adopted the rule in its administrative proceedings and there appeared to be no reported administrative decisions indicating the Board had ever applied Art. 561.

The Board agreed with the Taxpayer and granted its Motion to Set Aside Dismissal. According to the Board, the Taxpayer had evidenced an intent to prosecute the case by continuously appearing for status conferences, including the one held six days before the Department filed its ex parte Motion to Dismiss. In so holding, the Board explained that Art. 561 should be liberally construed in favor of maintaining the petition and any “reasonable doubt” should be resolved in favor of allowing prosecution of the claim. In its written reasons, the Board cited several cases where a requirement of strict technical compliance was rejected because the parties clearly demonstrated an intent to prosecute the case by, for instance, filing written requests for a status conference, or filing motions with the “the ultimate purpose of the conference was to hasten the matter to judgment.” See Cummings v. W. Feliciana Par. Sch. Ed., 2016-0734, p. 6 (La. App. 1 Cir. 2/17/17); and Thibaut Oil Co., Inc. v. Holly, 06-0313, p. 5 (La. App. 1 Cir. 2/14/07) (quoted by the Board in discussing the intent and substance of a party’s actions). The Board also raised policy considerations in exercising its discretion in this matter, namely expressing concern towards pro se litigants that have relied on the Board’s stance on Art. 561 and who would suffer if the Board took a different approach. The Board also distinguished the only two cases where an ex parte Motion to Dismiss had been granted, specifically noting a case where a taxpayer “virtually disappeared” for eight years after filing their petition. See Howard Bros. Disc. Stores v. Secretary, B.T.A. Docket No. 2464 (La. Bd. Tax App. 4/24/92). Interestingly, the Board addressed its adoption of Art. 561 in a footnote by stating that the Department’s counsel did not dispute that the Board routinely adheres to the Louisiana Code of Civil Procedure and has discretion to dismiss a matter by applying Art. 561.

The Board also cited the Constitutional obligation of the legislature to provide a complete and adequate remedy and recovery of illegal taxes paid by taxpayers and in doing so has provided that the Board shall hear and decide at a minimum expense to taxpayers, questions of law and fact arising from tax disputes and controversies. Hence, the Board is to preside over case reviews, status conferences, scheduling orders, and other matters. In overseeing status conferences, the Board determines whether a matter is progressing towards resolution and will set the matter for hearing if it determines that progress is not being made. The Board also explained that most status conferences are scheduled to allow parties sufficient time to perfect settlements.

Implications

The Department’s attempt to dismiss the Chevron matter for abandonment is unusual. And the Board’s ruling provides helpful guidance on the longstanding question of whether a taxpayer’s continuous participation in status conferences evidences a clear intent in prosecuting and advancing its case, sufficient to avoid a finding of abandonment under Art. 561. However, it remains to be seen whether the Department will appeal the Board’s decision.

This is an important ruling because the Board’s position on abandonment and its interpretation of Art. 561 protects taxpayer’s rights and avoids unnecessary dismissal of cases due to procedural technicalities. If the Board had adopted the Department’s interpretation of Art. 561, the rule could become a pitfall for taxpayers, leading to frequent and unexpected abandonment of cases. As noted by the Board, ruling otherwise would have significant adverse results on pro se litigants and other litigants who have relied on the Board’s actions in setting status conferences that effectively continue the progression of their cases.

Although the Board’s ruling treats participation in a status conference as a sufficient step towards prosecuting a case for purposes of Art. 561, a taxpayer with pending litigation before the Board should consider adopting practices and procedures for calendaring and tracking potential abandonment deadlines. In addition, rather than relying on the Board’s decision in Chevron, a taxpayer with pending litigation before the Board should consider taking more formal steps to reset the abandonment clock, such as issuing discovery and filing it in the docket, to avoid any potential for abandonment under Art. 561.

For additional information, please contact: Jaye Calhoun at (504) 293-5936, Willie Kolarik at (225) 382-3441, Divya Jeswant at (504) 293-5766, or Melania Smith at (713) 844-3068.