American Civil Liberties Union v. Bridges, 02-30493.
| Decision Date | 11 June 2003 |
| Docket Number | No. 02-30493.,02-30493. |
| Citation | 334 F.3d 416 |
| Parties | AMERICAN CIVIL LIBERTIES UNION FOUNDATION OF LOUISIANA, Plaintiff-Appellee, v. Cynthia BRIDGES, Secretary of the Louisiana Department of Revenue Defendant-Appellant. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Edmund Joseph Schmidt, III (argued), Nashville, TN, for Plaintiff-Appellee.
Charles Henry Braud, Jr. (argued), Baton Rouge, LA, for Defendant-Appellant.
Gregory S. Erwin (argued), Law Office of Gregory S. Erwin, Baton Rouge, LA, for Executive Bd. of the Louisiana Baptist Convention, Amicus Curiae.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before DeMOSS and STEWART, Circuit Judges, and LITTLE,1 District Judge.
Plaintiff-Appellee American Civil Liberties Union Foundation of Louisiana (the "ACLU") commenced this action in the United States District Court for the Eastern District of Louisiana against Brett Crawford, predecessor of Defendant-Appellant Cynthia Bridges, as Secretary of the Louisiana Department of Revenue (the "State"), seeking to have several Louisiana tax statutes declared unconstitutional and to enjoin the State's enforcement of these statutes. Following an interlocutory appeal on questions of standing and abstention that was dismissed as improvidently granted, the district court signed a judgment stipulated to by the parties making permanent, and therefore appealable, the court's earlier preliminary injunction and declaratory relief which found that the State's statutes violated the Establishment Clause of the First Amendment. The State appeals, contesting the rulings of the district court on issues implicating the Tax Injunction Act, the ACLU's standing, and abstention as well as comity. Because we find as a threshold matter, that jurisdiction was inappropriate, we make no judgment concerning the issues of standing, abstention comity, or the substantive merits of the constitutional challenge.
In 1998, the Louisiana legislature amended and reenacted LA. REV. STAT. § 47:301(6) and § 33:4574.1(A)(1)(b) and enacted LA. REV. STAT. § 47:301(8)(d) and (e), and (14)(b)(iv), to exclude specified property owned by nonprofit religious organizations from the definition of "hotel" and "places of amusement," to except churches and synagogues from paying sales and use taxes when purchasing bibles, or literature used for religious instruction classes, and to define "person" to exclude the Little Sisters of the Poor relative to particular purchases. The intent of the Legislature was to exempt those establishments from paying state and local sales and use taxes, provided that revenue generated from the exempted property, or publications acquired, be used for religious purposes.
The statutes thus enacted and amended, or enacted anew, currently read, in pertinent part, as follows:
For purposes of the sales and use taxes of all tax authorities in this state, the term "hotel" as defined herein shall not include camp and retreat facilities owned and operated for religious purposes by nonprofit religious organizations, which includes recognized domestic nonprofit corporations organized for religious purposes, provided that the net revenue derived from the organization's property is devoted wholly to religious purposes. For purposes of this Paragraph, the term "hotel" shall include camp and retreat facilities, which sell rooms or other accommodations to transient guests. However, "transient guest" for purposes of this Paragraph shall not include guests who participate in organized religious activities, which take place at such camp or retreat facilities. It is the intention of the legislature to tax the furnishing of rooms to those who merely purchase lodging at such facilities.
(i) For purposes of the payment of the state sales and use tax and the sales and use tax levied by any political subdivision, the term "person" shall not include a church or synagogue that is recognized by the United States Internal Revenue Service as entitled to exemption under Section 501(c)(3) of the United States Internal Revenue Service Code.
(ii) The secretary of the Department of Revenue shall promulgate rules and regulations defining the terms "church" and "synagogue" for purposes of this exclusion. The definitions shall be consistent with the criteria established by the U.S. Internal Revenue Service in identifying organizations that qualify for church status for federal income tax purposes.
(iii) No church or synagogue shall claim exemption or exclusion from the state sales and use tax or the sales and use tax levied by any political subdivision before having obtained a certificate of authorization from the secretary of the Department of Revenue. The secretary shall develop applications for such certificates. The certificates shall be issued without charge to the institutions that qualify.
(iv) The exclusion from the sales and use tax authorized by this Subparagraph shall apply only to purchases of bibles, song books, or literature used for religious instruction classes.
(i) For purposes of the payment of the state sales and use tax and the sales and use tax levied by any political subdivision the term "person" shall not include the Society of the Little Sisters of the Poor.
(ii) The secretary of the Department of Revenue shall promulgate rules and regulations for purposes of this exclusion. The definitions shall be consistent with the criteria established by the U.S. Internal Revenue Service in identifying tax-exempt status for federal income tax purposes.
(iii) No member of the Society of the Little Sisters of the Poor shall claim exemption or exclusion from the state sales and use tax or the sales and use tax levied by any political subdivision before having obtained a certificate of authorization from the secretary of the Department of Revenue. The secretary shall develop applications for such certificates. The certificates shall be issued without charge to the entities which qualify.
LA. REV. STAT. § 47:301(14)(b)(iv)
For purposes of the sales and use taxes of all tax authorities in the state, the term "places of amusement" as used herein shall not include camp and retreat facilities owned and operated for religious purposes by nonprofit religious organizations, which includes recognized domestic nonprofit corporations organized for religious purposes, provided that the net revenue derived from the organization's property is devoted wholly to religious purposes.
LA. REV. STAT. § 33:4574.1(A)(1)(b)
The word "hotel" as used herein shall not include camp and retreat facilities owned and operated for religious purposes by nonprofit religious organizations, which includes recognized domestic nonprofit corporations organized for religious purposes, provided that the net revenue derived from the organization's property is devoted wholly to religious purposes.
In 2000, the ACLU filed this suit seeking to have these statutes declared unconstitutional and to enjoin the State's enforcement of these statutes through preliminary and, eventually, permanent injunctions. The Secretary of the Louisiana Department of Revenue was named defendant, and thereafter his successor was substituted.
The State filed a motion to dismiss under Rule 12(b) of the Federal Rules of Civil Procedure arguing that the Tax Injunction Act prevented the court from hearing the case and the ACLU filed an opposition. Following argument, the district court denied the State's motion and ordered the State to file a memorandum addressing abstention and the sufficiency of state court remedies; after which the ACLU filed a response. Later, the district court ordered the parties to submit memoranda on the issue of standing.
The district court eventually denied both the State's challenge to the ACLU's standing and the State's request that the district court abstain from hearing this case. The district court nevertheless certified both the abstention and standing issues for interlocutory appeal under § 1292(b).
A panel of this Court granted the State's petition for permission to appeal those interlocutory orders. Thereafter, however, the panel dismissed without prejudice the State's interlocutory appeal as improvidently granted.
Then the district court granted the ACLU's motion for preliminary injunction and declaratory relief. The court found that the statutes violated the Establishment Clause of the First Amendment. The parties then entered into a stipulated judgment, which was signed by the district court, granting a permanent injunction against the State, with reservation of the right to appeal by both parties on any and all issues stemming from the court's ruling on the preliminary injunction.
The State now appeals, contesting the rulings of the district court on whether the court was barred by the Tax Injunction Act from exercising jurisdiction, whether the ACLU has standing, and whether the district court should have abstained or whether principles of comity prevent the federal court from deciding the case. Because, we find that the Tax Injunction Act of 1937, 28 U.S.C. § 1341, prevents the federal district court from hearing this challenge to the State's tax scheme, we reverse the district court's denial of the State's Rule 12(b) motion to dismiss and remand the case with instructions for the court to dismiss for lack of jurisdiction. Because the district court lacked jurisdiction, we do not address on appeal any of the other issues.
Whether the district court was prevented from exercising jurisdiction over the case because of the Tax Injunction Act is a question of subject matter jurisdiction subject to de novo review. Home Builders Ass'n of Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1010 (5th Cir.1998) (citation omitted). The Tax Injunction Act states: "The district courts shall not enjoin, suspend...
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