Barringer v. Griffes

• Decision Date: 18 May 1992
• Docket Number: No. 839,D,839
• Citation: 964 F.2d 1278
• Parties: Greg R. BARRINGER; Judith M. Barringer, Plaintiffs-Appellants, v. Michael D. GRIFFES, Defendant-Appellee. ocket 91-7902.
• Court: U.S. Court of Appeals — Second Circuit

Page 1278

964 F.2d 1278

Greg R. BARRINGER; Judith M. Barringer, Plaintiffs-Appellants, v. Michael D. GRIFFES, Defendant-Appellee.

No. 839, Docket 91-7902.

United States Court of Appeals Second Circuit.

Argued Jan. 22, 1992.

Decided May 18, 1992.

Norman Charles Williams, Burlington, Vt. (Gravel & Shea, Jerome F. O'Neill, O'Neill and Crawford, of counsel) for plaintiffs-appellants.

William Griffin, Chief Asst. Atty. Gen., Montpelier, Vt. (Jeffrey L. Amestoy, Atty. Gen., Atty. General's Office, State of Vermont, of counsel) for defendant-appellee.

Before: NEWMAN and KEARSE, Circuit Judges, and CEDARBAUM, District Judge. ^*

CEDARBAUM, District Judge:

This appeal presents the question whether the courts of Vermont afford automobile owners who challenge the constitutionality of the state's motor vehicle use tax a "plain, speedy and efficient" remedy within the meaning of the Tax Injunction Act, 28 U.S.C. § 1341 (1988).

THE FACTS

In 1988, Greg and Judith Barringer, who were residents of Connecticut, purchased a Mazda automobile and paid the 7.5 percent Connecticut sales tax. In 1990, they moved to Vermont where they were required to pay a tax of four percent of the value of their automobile upon first registering it in the state. See Vt.Stat.Ann. tit. 32, § 8903(b) (1981 & Supp.1989).

The Barringers refused to pay the tax and filed this action in federal court, alleging that imposition of the Vermont motor vehicle use tax violates their rights under 42 U.S.C. § 1983 (1988) and the Commerce Clause of the United States Constitution because it does not grant all motor vehicle registrants a credit for sales tax previously paid in another state. ¹ Concluding that Vermont's administrative tax refund procedure, Vt.Stat.Ann. tit. 32, § 8914 (1981), provides a plain, speedy and efficient remedy, and that therefore, the Tax Injunction Act, 28 U.S.C. § 1341, precludes the Barringers from litigating these claims in federal court, the district court dismissed the complaint. For the reasons discussed below, we disagree.

DISCUSSION

The Tax Injunction Act prohibits federal courts from "enjoin[ing], suspend[ing] or restrain[ing] 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. The Act prohibits declaratory as well as injunctive relief. California v. Grace Brethren Church, 457 U.S. 393, 408-11, 102 S.Ct. 2498, 2507-08, 73 L.Ed.2d 93 (1982). To come within the statutory ban, the remedy available in the state courts must provide the taxpayer with a " 'full hearing and judicial determination' at which [the taxpayer] may raise any and all constitutional objections to the tax." Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 515 n. 19, 101 S.Ct. 1221, 1232 n. 19, 67 L.Ed.2d 464 (1981).

The district court held that the courts of Vermont offer a plain, speedy and efficient state remedy because the Vermont motor vehicle tax refund statute, Vt.Stat.Ann. tit. 32, § 8914, "provides a judicially-reviewable administrative procedure to recover taxes wrongfully exacted by the state, including taxes subsequently found to have been levied in violation of the Constitution." Opinion and Order at 2 (citing Williams v. State, 156 Vt. 42, 589 A.2d 840 (1990), reh'g denied, 156 Vt. 42, 589 A.2d 840, cert. denied, --- U.S. ----, 112 S.Ct. 81, 116 L.Ed.2d 54 and cert. denied, --- U.S. ----, 112 S.Ct. 590, 116 L.Ed.2d 614 (1991)). Section 8914 provides that "[a]ny overpayment of [a motor vehicle] tax as determined by the commissioner shall be refunded."

Both appellee and the district court rely upon Williams to establish that the Commissioner can and will hear the Barringers' constitutional challenge to the tax. Prior to the Vermont Supreme Court's decision in Williams, Vermont law prohibited the Commissioner from deciding the constitutionality of a state tax. See Westover v. Village of Barton Elec. Dep't, 149 Vt. 356, 359, 543 A.2d 698, 700 (1988). Thus, when the taxpayers in Williams applied to the Commissioner for a refund of the same motor vehicle use tax challenged by the Barringers on the ground that it violated the United States Constitution, the Department of Motor Vehicles denied the application because it felt constrained to assume the constitutionality of the state tax statute. Williams, 589 A.2d at 842.

A state court remedy is not "plain" within the meaning of the Tax Injunction Act if there is such uncertainty concerning the state remedy "as to make it speculative ... whether the State affords full protection to the federal rights." Hillsborough v. Cromwell, 326 U.S. 620, 625, 66 S.Ct. 445, 449, 90 L.Ed. 358 (1946). Therefore, the central question before us is whether the Vermont Supreme Court's decision in Williams provides sufficient certainty that the Commissioner, despite his previous refusal, can and will decide a constitutional challenge to the motor vehicle use tax and that his decision will be subject to review in the courts of Vermont.

The Williams case presents a protracted saga of unsuccessful efforts by Vermont taxpayers to raise constitutional challenges to the motor vehicle use tax. Like the Barringers, Norman Williams purchased a car and paid sales tax in another state before moving to Vermont in 1981. ² Williams filed suit in federal court under 42 U.S.C. § 1983 to enjoin enforcement of the Vermont use tax. The suit was dismissed under the Tax Injunction Act and Williams dutifully sought relief from the Department of Motor Vehicles.

He paid the motor vehicle use tax and requested that the state grant him a refund under section 8914. The Commissioner denied the refund because, as stated in Westover, 149 Vt. at 359, 543 A.2d at 700, the Vermont Constitution's separation of powers requires that "the power to decide constitutional issues [be] vested in the courts." Williams proceeded to state superior court where he filed an action under 42 U.S.C. § 1983. He alleged that because the use tax did not apply to individuals who were Vermont residents at the time that they purchased their cars in another state, it violated the Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment. The superior court held that the statute was constitutional and granted the state's motion to dismiss.

Williams appealed to the Vermont Supreme Court, which affirmed on the basis of its opinion in Leverson v. Conway, 144 Vt. 523, 481 A.2d 1029 (1984). In Leverson, the Vermont Supreme Court had rejected both a commerce clause challenge and an equal protection clause challenge to the use tax by new residents of Vermont.

Williams then appealed to the United States Supreme Court, which reversed and remanded the case to the Vermont Supreme Court. The United States Supreme Court held that when the Vermont statute was "viewed on its face, [Williams had] stated a claim of unconstitutional discrimination." 472 U.S. 14, 28, 105 S.Ct. 2465, 86 L.Ed.2d 11 (1985). The Court confined its decision to the equal protection claim and declined to consider the commerce clause challenge, noting that "[w]e again put to one side the question whether a State must in all circumstances credit sales or use taxes paid to another State against its own use tax." Id.

On remand, the Vermont Supreme Court sent the case back to the superior court. For the first time, the state raised the defense of sovereign immunity, and the superior court held that a suit for refund of the use tax was barred by sovereign immunity. The court also held that Williams was not entitled to declaratory relief because the equal protection issue was moot in light of a 1986 regulation adopted by the Department of Motor Vehicles in response to the United States Supreme Court's 1985 decision. ³

Williams appealed to the Vermont Supreme Court, which affirmed the dismissal of the complaint but vacated the superior court's ruling on declaratory relief. Williams v. State, 156 Vt. 42, 589 A.2d 840 (1990), reh'g denied, 156 Vt. 42, 589 A.2d 840, cert. denied, --- U.S. ----, 112 S.Ct. 81, 116 L.Ed.2d 54, and cert. denied, --- U.S. ----, 112 S.Ct. 590, 116 L.Ed.2d 614 (1991). The Vermont Supreme Court held that the state's assertion of sovereign immunity did not violate taxpayers' due process rights because section 8914 provides an administrative procedure to decide their claims. Id. 589 A.2d at 847. The court also held that since the taxpayers wanted a refund of the tax and the superior court lacked jurisdiction to award a refund without a waiver of sovereign immunity, a declaratory judgment would be merely advisory and the courts of Vermont are not empowered to render advisory opinions for the sole purpose of aiding the resolution of a dispute that belongs in another tribunal. Id. at 850. The court noted that, in any event, there was no justiciable controversy because the taxpayers were unlikely again to move to another state, purchase a car, and move back to Vermont. Id. at 851.

The Commissioner argues that the Vermont Supreme Court's opinion in the Williams case confirmed his jurisdiction pursuant to section 8914 to hear the Barringers' constitutional claim. (Brief of Appellee at 3.) But, the following statement in Williams casts serious doubt on that position:

Prior to the United States Supreme Court's decision [in Williams ], the remedy provided by § 8914 was not available to Williams and Levine to the extent they challenged the facial validity of § 8903, because the Commissioner of Motor Vehicles is not authorized to rule upon the constitutionality of the statutes he is bound to administer. [citation omitted] Nevertheless, after the Supreme Court's ruling that the use tax statute is facially unconstitutional, a complaint to the Commissioner under § 8914 would not have been futile. The Commissioner at that point would not have been required to address the constitutionality of the statute, for that question had been decided.

Williams, 589 A.2d at 847 (emphasis in...