454 U.S. 100 (1981), 80-427, Fair Assessment in Real Estate Assn. v. McNary

Docket Nº:No. 80-427
Citation:454 U.S. 100, 102 S.Ct. 177, 70 L.Ed.2d 271
Party Name:Fair Assessment in Real Estate Assn. v. McNary
Case Date:December 01, 1981
Court:United States Supreme Court

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454 U.S. 100 (1981)

102 S.Ct. 177, 70 L.Ed.2d 271

Fair Assessment in Real Estate Assn.



No. 80-427

United States Supreme Court

Dec. 1, 1981

Argued October 5, 1981




Held: The principle of comity bars taxpayers' damages actions brought in federal courts under 42 U.S.C. § 1983 to redress the allegedly unconstitutional administration of a state tax system. Because the principle of comity bars federal courts from granting damages relief in such cases, it is not necessary to decide whether the Tax Injunction Act, standing alone, would bar such actions. Pp. 107-117.

(a) Prior to enactment in 1937 of the Tax Injunction Act -- which prohibits district courts from enjoining, suspending, or restraining the assessment, levy, or collection of any state tax where a plain, speedy, and efficient remedy may be had in state courts -- this Court's decisions in cases seeking federal court equitable relief against state taxation (handed down both before and after the enactment in 1871 of 42 U.S.C. § 1983's predecessor) recognized that the doctrine of equitable restraint when remedies at law are adequate was particularly applicable in suits challenging the constitutionality of state tax laws because of the delicate balance between the federal authority and state governments, and the concomitant respect that should be accorded state tax laws in federal court. Pp. 107-109.

(b) The legislative history of the Tax Injunction Act does not suggest that Congress intended that federal court deference in state tax matters be limited to the actions enumerated in the Act. Thus, the principle of comity which predated the Act was not restricted by its passage. Pp. 109-110.

(c) The post-Act vitality of the comity principle is demonstrated by this Court's 1943 decision in Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, that federal courts may not render declaratory judgments as to the constitutionality of state tax laws. Although the Act was raised as a possible bar to the suit (as it has been raised in this case), it was found to be unnecessary to determine whether the Act could be construed to prohibit declaratory relief. The decision was based instead on principles of federalism and the necessity of federal court respect for state taxing schemes, thus demonstrating not only the post-Act vitality of the comity principle, but also its applicability to actions seeking a remedy other than injunctive relief. Pp. 110-111.

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(d) Damages actions under § 1983 would be no less disruptive of state tax systems than actions to enjoin the collection of taxes. Recovery of damages under § 1983 would first require a determination of the unconstitutionality of the state tax scheme that would be fully as intrusive as the equitable actions that are barred by comity principles. Moreover, the intrusiveness of such § 1983 actions would be exacerbated by the doctrine of Monroe v. Pape, 365 U.S. 167, authorizing immediate resort to a federal court under § 1983 without first exhausting state remedies -- whenever state actions allegedly infringe constitutional rights. In addition to the intrusiveness of the judgment, the very maintenance of the suit itself would intrude on the enforcement of the state scheme. Pp. 113-115.

622 F.2d 415, affirmed.

REHNQUIST, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, BLACKMUN, and POWELL, JJ., joined. BRENNAN, J., filed an opinion concurring in the judgment, in which MARSHALL, STEVENS, and O'CONNOR, JJ., joined, post, p. 117.

REHNQUIST, J., lead opinion

JUSTICE REHNQUIST delivered the opinion of the Court.

In this action, we are required to reconcile two somewhat intermittent and conflicting [102 S.Ct. 179] lines of authority as to whether a damages action may be brought under 42 U.S.C. § 1983 to redress the allegedly unconstitutional administration of a state tax system. The United States District Court for the Eastern District of Missouri held that such suits were barred by both 28 U.S.C. § 1341 (Tax Injunction Act) and the principle

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of comity, and the Court of Appeals for the Eighth Circuit affirmed by an equally divided court sitting en banc.1 We granted certiorari to resolve a conflict among the Courts of Appeals,2 450 U.S. 1039, and we now affirm. Before setting forth the facts, we think that a description of the past and at times divergent decisions of this Court may shed light upon the proper disposition of this case.


This Court, even before the enactment of § 1983, recognized the important and sensitive nature of state tax systems and the need for federal court restraint when deciding cases that affect such systems. As Justice Field wrote for the Court shortly before the enactment of § 1983:

It is upon taxation that the several States chiefly rely to obtain the means to carry on their respective governments, and it is of the utmost importance to all of them that the modes adopted to enforce the taxes levied should be interfered with as little as possible. Any delay in the proceedings of the officers, upon whom the duty is devolved of collecting the taxes, may derange the operations of government, and thereby cause serious detriment to the public.

Dows v. Chicago, 11 Wall. 108, 110 (1871).

After this Court conclusively decided that federal courts may enjoin state officers from enforcing an unconstitutional state law, Ex parte Young, 209 U.S. 123 (1908), Congress also recognized that the autonomy and fiscal stability of the

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States survive best when state tax systems are not subject to scrutiny in federal courts. Thus, in 1937, Congress provided:

The district courts shall not 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.

28 U.S.C. § 1341 (hereinafter § 1341 or Act). This legislation, and the decisions of this Court which preceded it, reflect the fundamental principle of comity between federal courts and state governments that is essential to "Our Federalism," particularly in the area of state taxation. See, e.g., Matthews v. Rodgers, 284 U.S. 521 (1932); Singer Sewing Machine Co. v. Benedict, 229 U.S. 481 (1913); Boise Artesian Water Co. v. Boise City, 213 U.S. 276 (1909). Even after enactment of § 1341, it was upon this comity that we relied in holding that federal courts, in exercising the discretion that attends requests for equitable relief, may not even render declaratory judgments as to the constitutionality of state tax laws. Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293 (1943).

Contrasted with this statute and line of cases are our holdings with respect to 42 U.S.C. § 1983. In 1871, shortly after Justice Field wrote of the vital and vulnerable nature of state tax systems, Congress enacted § 1983 with its familiar language:

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation [102 S.Ct. 180] of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.

Obviously, § 1983 cut a broad swath. By its terms, it gave a federal cause of action to prisoners, taxpayers, or anyone else

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who was able to prove that his constitutional or federal rights had been denied by any State. In addition, the statute made no mention of any requirement that state remedies be exhausted before resort to the federal courts could be had under 28 U.S.C. § 1343.3 The combined effect of this newly created federal cause of action and the absence of an express exhaustion requirement was not immediately realized. It was not until our decision in Monroe v. Pape, 365 U.S. 167 (1961), that § 1983 was held to authorize immediate resort to a federal court whenever state actions allegedly infringed constitutional rights:

Although the legislation was enacted because of the conditions that existed in the South at that time, it is cast in general language, and is as applicable to Illinois as it is to the States whose names were mentioned over and again in the debates. It is no answer that the State has a law which, if enforced, would give relief. The federal remedy is supplementary to the state remedy, and the latter need not be first sought and refused before the federal one is invoked.

365 U.S. at 183.

The immediacy of federal relief under § 1983 was reemphasized in McNeese v. Board of Education, 373 U.S. 668 (1963), where the Court stated:

It is immaterial whether [the state official's] conduct is legal or illegal as a matter of state law. Such claims are entitled to be adjudicated in the federal courts.

Id. at 674 (citation and footnote omitted). And in the unargued per curiam opinion of Wilwording v.

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Swenson, 404 U.S. 249 (1971), the Court concluded that

[p]etitioners were . . . entitled to have their actions treated as claims for relief under the Civil Rights Acts, not subject . . . to exhaustion requirements.

Id. at 251. See also Damico v. California, 389 U.S. 416 (1967); Houghton v. Shafer, 392 U.S. 639, 640 (1968); Steffel v. Thompson, 415 U.S. 452,472-473 (1974).

Thus, we have two divergent lines of authority respecting access to federal courts for adjudication of the constitutionality of state laws. Both cannot govern this case. On one hand, § 1341, with its antecedent basis in the comity principle of Matthews v. Rodgers, supra, and Boise Artesian Water Co. v. Boise City, supra, bars at least federal injunctive challenges to state tax laws. Added to this authority is our decision in Great Lakes Dredge & Dock Co. v. Huffman,...

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