322 U.S. 47 (1944), 235, Great Northern Life Insurance Co. v. Read

Docket NºNo. 235
Citation322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121
Party NameGreat Northern Life Insurance Co. v. Read
Case DateApril 24, 1944
CourtUnited States Supreme Court

Page 47

322 U.S. 47 (1944)

64 S.Ct. 873, 88 L.Ed. 1121

Great Northern Life Insurance Co.

v.

Read

No. 235

United States Supreme Court

April 24, 1944

Argued January 31, 1944

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE TENTH CIRCUIT

Syllabus

1. On review by certiorari of a judgment of the Circuit Court of Appeals, the respondent may urge in support of the judgment a contention which was sustained by the District Court. P. 49.

2. A foreign insurance company brought suit in the federal district court of Oklahoma against the Insurance Commissioner of Oklahoma, to recover payments made to him pursuant to a state statute which levied a tax of four percent on premiums received by foreign insurance companies in the State. Section 12665, Oklahoma Statutes of 1931, prescribed a judicial procedure for recovery of money wrongfully collected as taxes.

Held:

(1) The suit was a suit against the State, and not maintainable without its consent. Eleventh Amendment; Smith v. Reeves, 178 U.S. 436. P. 53.

(2) The State had consented to its being sued only in its own courts, and the suit was therefore not maintainable in the federal court. P. 55.

3. A State may limit to its own courts suits against it to recover taxes, and its intent in respect of such suits to submit to the jurisdiction of courts other than those of its own creation must clearly appear. P. 54.

4. Smyth v. Ames, 169 U.S. 466; Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, and Gunter v. Atlantic Coast Line, 200 U.S. 273, distinguished. P. 55.

136 F.2d 44 vacated.

Certiorari, 320 U.S. 726, to review the affirmance of a judgment dismissing on the merits a suit to recover sums alleged to have been illegally exacted as taxes.

Page 48

REED, J., lead opinion

MR. JUSTICE REED, delivered the opinion of the Court.

This writ brings here for review the action of petitioner, a foreign insurance company, to recover taxes paid to respondent, the Insurance Commissioner of Oklahoma, which were levied by § 10478, Oklahoma Statutes 1931, as amended by Chapter 1(a), Title 36, Session Laws of Oklahoma 1941. This was an annual four percent tax on premiums received by foreign insurance companies in Oklahoma, and it, together with certain specified fees, was in lieu of all other taxes and fees in Oklahoma. Petitioner paid the tax under protest and, alleging diversity of citizenship, 28 U.S.C. § 41, brought suit against the Insurance Commissioner in the District Court of the United States. The procedure for [64 S.Ct. 874] recovery is laid down by § 12665, Oklahoma Statutes 1931.1

Page 49

The percentage of premiums due was increased from two to four percent by the amendment of 1941, effective April 25th of that year. The District Court refused recovery. The Circuit Court of Appeals affirmed. Great Northern Life Insurance Co. v. Read, 136 F.2d 44. Certiorari was granted on petitioner's assertion of error in requiring it to pay a tax allegedly discriminatory under the Fourteenth Amendment as compared with the taxation of domestic insurance companies, and also unconstitutional as levied after the company's admission to the state and on premiums collected during the business year for which a license was already in force. A conflict in principle was suggested with Hanover Fire Insurance Company v. Harding, 272 U.S. 494. We granted certiorari, 320 U.S. 726, and asked discussion of the right of petitioner to maintain its suit in a Federal court. As we conclude that this suit could not be maintained in the Federal court, we do not reach the merits of the issue as to the validity of the tax.

The right of petitioner to maintain this suit in a Federal court depends, first, upon whether the action is against an individual or against the Oklahoma. Secondly, if the action is determined to be against the state, the question arises as to whether or not the state has consented to suit against itself in the Federal court.

Respondent challenged the right of petitioner to seek relief in the District Court by the defense in its answer that the complaint fails to state a claim upon which relief can be granted. R.C.P. 12(b) and (e).2 This challenge,

Page 50

on the ground that the state had not consented to be sued, was sustained by the District Court. The contention is available here to sustain the judgment on appeal. LeTulle v. Scofield, 308 U.S. 415.

In Smith v. Reeves, 178 U.S. 436, an action was instituted in the Federal trial court by railroad receivers against the defendant "as treasurer of the state of California" to recover taxes assessed against the paid by the railroad. The proceeding was brought under § 3669 of the California Political Code, as amended by California Statutes, 1891, p. 442, which authorized a suit against the State Treasurer for the recovery [64 S.Ct. 875] of taxes which were illegally exacted. The defendant could demand trial of the action in the Superior Court of the County of Sacramento, California. If the final judgment was against the Treasurer, the Comptroller of the state was directed to draw his warrant on state funds for its satisfaction.

As the suit was against a state official as such, through proceedings which were authorized by statute, to compel him to carry out with the state's funds the state's agreement to reimburse moneys illegally exacted under color of the tax power, this Court held, p. 439, it was a suit against the state. The state would be required to pay.3 The case therefore is plainly distinguishable from those to recover personally from a tax collector money wrongfully exacted by him under color of state law, Atchison, T. & S.F. R. Co. v. O'Connor, 223 U.S. 280; cf. Matthews v. Rodgers, 284 U.S. 521, 528; to recover under general law possession of specific property likewise wrongfully obtained or held, Tindal v. Wesley, 167 U.S. 204, 221; Virginia Coupon

Page 51

Cases, 114 U.S. 269, 285; United States v. Lee, 106 U.S. 196; to perform a plain ministerial duty, Board of Liquidation v. McComb, 92 U.S. 531, 541; Rolston v. Missouri Fund Comm'rs, 120 U.S. 390, 411, or to enjoin an affirmative act to the injury of plaintiff, Sterling v. Constantin, 287 U.S. 378, 393; Tomlinson v. Branch, 15 Wall. 460; Davis v. Gray, 16 Wall. 203, 220; In re Tyler, 149 U.S. 164, 190. Only in Smith v. Reeves was the action authorized by statute against the officer in his official capacity. In the other instances, relief was sought under general law from wrongful acts of officials. In such cases, the immunity of the sovereign does not extend to wrongful individual action, and the citizen is allowed a remedy against the wrongdoer personally.

This ruling that a state could not be controlled by courts in the performance of its political duties through suits against its officials has been consistently followed. Chandler v. Dix, 194 U.S. 590; Fitts v. McGhee, 172 U.S. 516, 529; Murray v. Wilson Distilling Co., 213 U.S. 151, 167; Lankford v. Platte Iron Works, 235 U.S. 461, 468 et seq.; Ex parte New York, No. 1, 256 U.S. 490, 500; Worcester County Co. v. Riley, 302 U.S. 292, 296, 299. Efforts to force, through suits against officials, performance of promises by a state collide directly with the necessity that a sovereign must be free from judicial compulsion in the carrying out of its policies within the limits of the Constitution. Principality of Monaco v. Mississippi, 292 U.S. 313, 320; Louisiana v. Junel, 107 U.S. 711, 720. A state's freedom from litigation was established as a constitutional right through the Eleventh Amendment. The inherent nature of sovereignty prevents actions against a state by its own citizens without its consent. Hans v. Louisiana, 134 U.S. 1, 10, 16.

Oklahoma provides for recovery of unlawful exactions paid to its collectors under protest. § 12665 Oklahoma Statutes 1931. Note 1, supra. In our view of this case, it

Page 52

is unnecessary for us to pass upon whether this method of protecting taxpayers was intended to be exclusive of all other remedies, including actions against an individual who happened to be a tax collector, or whether, if it were so intended, it would surmount all constitutional objections. Compare Burrill v. Locomobile Co., 258 U.S. 34, and Anniston Mfg. Co. v. Davis, 301 U.S. 337, 341, 343. See also Antrim Lumber Co. v. Sneed, 175 Okl. 47, 49-51, 52 P.2d 1040, 1043-1045.

A suit against a state official under § 12665 to recover taxes is held to be a suit against the state by Oklahoma, and the remedy exclusive of other state remedies. Antrim Lumber Co. v. Sneed, supra, 175 Okl. at 51, 52 P.2d at 1045. This interpretation of an Oklahoma statute by the Supreme Court of the state accords with our view, as set out above, of the meaning of a suit against a state. Petitioner brought this action against the collector, the Insurance Commissioner, in strict accord with the requirements of § 12665. It alleged that there was no appeal provided by Oklahoma laws from defendant's action in collecting and gave notice of protest and suit to defendant at the time of payment in the language of the Section. By so doing, petitioner was relieved of the necessity of establishing that the payment was not voluntary,4 and obtained the advantage of a statutory lien lis pendens on the tax payment.

By § 12665, Oklahoma creates a judicial procedure for the prompt recovery by the citizen of money wrongfully collected as taxes. It is the sovereign's method of tax administration. Oklahoma designates the official to be sued, orders him to hold the tax, empowers its courts to

Page 53

do complete justice by determining the amount properly due and directs its collector to pay back any excess received to the taxpayer. The state provides this procedure in lieu of the common law right to claim reimbursement from the collector. The issue of coercion and duress was eliminated at the pretrial conference without objection by the petitioner. The section makes sure the taxpayer's recovery of...

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358 practice notes
  • 58 F.R.D. 42 (S.D.N.Y. 1972), 72 Civ. 1699, Johnson v. Rockefeller
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • December 18, 1972
    ...if this were not so, the state would be immune from suit by virtue of the Eleventh Amendment. Great Northern Life Insurance Co. v. Read, 322 U.S. 47, 51, 64 S.Ct. 873, 88 L.Ed. 1121 (1944); Duhne v. New Jersey, 251 U.S. 311, 313, 40 S.Ct. 154, 64 L.Ed. 280 (1920); Fitts v. McGhee, 172 U.S. ......
  • 590 F.Supp. 1509 (S.D.N.Y. 1984), 81 Civ. 3000, Sierra Club v. United States Army Corps of Engineers
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • June 27, 1984
    ...immunity of a state also applies to bar a suit against a state by citizens of the same state. Great Northern Life Insurance Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121 (1944); Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). However, it has been held that this doc......
  • 22 So.2d 13 (Ala. 1945), 3 Div. 430, Glass v. Prudential Ins. Co. of America
    • United States
    • Alabama Supreme Court of Alabama
    • April 26, 1945
    ...hold him after he had been required to repay the sum.' Counsel for complainant lays some stress upon Great Northern Insurance Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121, where the court had under review an Oklahoma statute and expressed the opinion that it was a suit against the ......
  • 160 N.W.2d 815 (Iowa 1968), 53015, Megee v. Barnes
    • United States
    • Iowa Supreme Court of Iowa
    • September 5, 1968
    ...remedy is legislative and not judicial.' (page 784 of 236 Iowa, page 21 of 20 N.W.2d) See also Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 51, 64 S.Ct. 87o, 88 L.Ed. 1121, 1125; Perry v. United States, 294 U.S. 330, 352, 354, 55 S.Ct. 432, 79 L.Ed. 912, 918, 919 (Hughes, C.J.); Foley......
  • Request a trial to view additional results
348 cases
  • 58 F.R.D. 42 (S.D.N.Y. 1972), 72 Civ. 1699, Johnson v. Rockefeller
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • December 18, 1972
    ...if this were not so, the state would be immune from suit by virtue of the Eleventh Amendment. Great Northern Life Insurance Co. v. Read, 322 U.S. 47, 51, 64 S.Ct. 873, 88 L.Ed. 1121 (1944); Duhne v. New Jersey, 251 U.S. 311, 313, 40 S.Ct. 154, 64 L.Ed. 280 (1920); Fitts v. McGhee, 172 U.S. ......
  • 590 F.Supp. 1509 (S.D.N.Y. 1984), 81 Civ. 3000, Sierra Club v. United States Army Corps of Engineers
    • United States
    • Federal Cases United States District Courts 2nd Circuit Southern District of New York
    • June 27, 1984
    ...immunity of a state also applies to bar a suit against a state by citizens of the same state. Great Northern Life Insurance Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121 (1944); Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). However, it has been held that this doc......
  • 22 So.2d 13 (Ala. 1945), 3 Div. 430, Glass v. Prudential Ins. Co. of America
    • United States
    • Alabama Supreme Court of Alabama
    • April 26, 1945
    ...hold him after he had been required to repay the sum.' Counsel for complainant lays some stress upon Great Northern Insurance Co. v. Read, 322 U.S. 47, 64 S.Ct. 873, 88 L.Ed. 1121, where the court had under review an Oklahoma statute and expressed the opinion that it was a suit against the ......
  • 160 N.W.2d 815 (Iowa 1968), 53015, Megee v. Barnes
    • United States
    • Iowa Supreme Court of Iowa
    • September 5, 1968
    ...remedy is legislative and not judicial.' (page 784 of 236 Iowa, page 21 of 20 N.W.2d) See also Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 51, 64 S.Ct. 87o, 88 L.Ed. 1121, 1125; Perry v. United States, 294 U.S. 330, 352, 354, 55 S.Ct. 432, 79 L.Ed. 912, 918, 919 (Hughes, C.J.); Foley......
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10 books & journal articles
  • The Alden Trilogy: praise and protest.
    • United States
    • Harvard Journal of Law & Public Policy Vol. 23 Nbr. 2, March 2000
    • March 22, 2000
    ...under its state constitution."). (125.) Alden, 119 S. Ct. at 2265. (126.) Id. at 2264 (quoting Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 53 (127.) Id. (128.) Id. (quoting Ex parte Ayers, 123 U.S. 443, 505 (1887)). (129.) See id. at 2264-65 (In an era of "scarce resources ......
  • Its hour come round at last? State sovereign immunity and the great state debt crisis of the early twenty-first century.
    • United States
    • Harvard Journal of Law & Public Policy Vol. 35 Nbr. 2, March - March 2012
    • March 22, 2012
    ...State) overruled on other grounds by Lapides v. Bd. of Regents of Univ. of Ga., 535 U.S. 613 (2002); Great Northern Life Ins. Co. v. Read, 322 U.S. 47 (1944) (holding that a suit against the state insurance commissioner to recover taxes wrongfully collected was barred as a suit against the ......
  • Mandatory rules.
    • United States
    • Stanford Law Review Vol. 61 Nbr. 1, October 2008
    • October 1, 2008
    ...States, on their own initiative, have enacted statutes consenting to a wide variety of suits."); Great N. Life Ins. Co. v. Read, 322 U.S. 47, 53 (1944) (proclaiming that immunity is "mitigated by a sense of justice which has continually expanded by consent the suability of the sov......
  • Sovereign immunity, due process, and the Alden trilogy.
    • United States
    • Yale Law Journal Vol. 109 Nbr. 8, June 2000
    • June 1, 2000
    ...courts. See infra notes 136-139 and accompanying text. (64.) See Alden, 119 S. Ct. at 2262 (citing Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 51 (1944); In re Ayers, 123 U.S. 443, 506 (1887); Board of Liquidation v. McComb, 92 U.S. 531, 541 (1876); Briscoe v. Bank of Ky., 36 U.S. (1......
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