Bland v. McHann
| Decision Date | 01 September 1972 |
| Docket Number | No. 30429.,30429. |
| Citation | 463 F.2d 21 |
| Parties | Percy BLAND et al., Plaintiffs-Appellants, v. Robert McHANN et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Frank R. Parker, Lawyers' Comm. for Civil Rights Under Law, George P. Taylor, Jackson, Miss., for plaintiffs-appellants.
Roger Landrum, W. Scott Welch, Jackson, Miss., for defendants-appellees; Butler, Snow, O'Mara, Stevens & Cannada, Jackson, Miss., of counsel.
Before GEWIN, AINSWORTH and ALDISERT,* Circuit Judges.
Rehearing and Rehearing En Banc Denied September 1, 1972.
In the summer and fall of 1966 Negroes in Edwards, Mississippi engaged in peaceful protests against local merchants and municipal officials because of alleged racial discrimination. In October and November of 1966 the Mayor of Edwards and the Board of Aldermen met to approve the municipal land assessment; the assessment rolls were approved in mid-November. Town records show that the assessed values of 237 lots owned by Negroes in 1966 were increased on the assessment roll, while 39 lots owned by Negroes were not increased. In contrast, the assessed values of 34 lots owned by white people were increased, while 166 lots were not increased. The assessed value of one lot owned by a white person was decreased, apparently because of the removal of a building.1
The complaint in this case was filed by Negro property owners (taxpayers) in Edwards charging that the 1966 increases in property tax assessments of Negroes were solely the result of racial discrimination and were in retaliation for the prior demonstrations.2 The action was brought pursuant to 42 U.S.C. § 1983 and 28 U.S.C. §§ 1331, 1343 against the municipal officials of Edwards.3 The case was tried without a jury.
During the course of the trial a statistician-urban sociologist testified on behalf of the taxpayers that the difference in percentages of the black increases and white increases could not be due to change. He stated that the probability was less than 1 time in 100,000 that such a difference would occur by chance or by a random system of assessment increases.
The district court denied all relief. The court wholly rejected the statistical evidence and found that no evidence of discrimination had been presented. The court further found that the property owners had a "perfectly expeditious and valid remedy in the state court," (emphasis added) and that none of the plaintiffs had made any effort to avail themselves of that remedy. Although we agree with the district court that the taxpayers cannot prevail in this action, we do so for reasons in part different from those given by the district court. We therefore affirm in part and in part vacate the judgment of the district court.
In its findings of fact and conclusions of law the district court stated, "The plaintiffs are not entitled to any injunctive relief against this municipality on their assessment of ad valorem taxes for any of the years in suit." The footnote to that statement is to 28 U.S.C. § 1341:
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.
The remainder of the court's opinion appears to deal largely with the merits of the case, although in the final paragraph of the opinion the court concluded that taxpayers had an adequate state remedy. Thus, while the court based its decision in part on § 1341, it also reached the merits and concluded that taxpayers had simply not proved their case. Although it was not inappropriate for the district court to conduct a full and complete hearing, we do not think the court should have reached the merits of the case.4
We are convinced that both longstanding judicial policy and congressional restriction of federal jurisdiction in cases involving state tax administration make it the duty of federal courts to withhold relief when a state legislature has provided an adequate scheme whereby a taxpayer may maintain a suit to challenge a state tax. The taxpayer may assert his federal rights in the state courts and secure a review by the Supreme Court.
It is well established that § 1341 is an explicit congressional limitation on the jurisdiction of the federal courts in cases which would enjoin, suspend or restrain state tax levy, assessment or collection.5 Taxpayers seek to circumvent § 1341 by arguing that relief under § 1983 is supplemental and is not limited to any requirement of exhaustion of state remedies. We do not disagree with the general rule that exhaustion is not required in § 1983 cases; however, in this case § 1983 collides full force with a specific congressional limitation on federal jurisdiction. In such circumstances we are convinced that § 1341 must prevail.
The Second Circuit has squarely confronted and resolved this clash. In American Commuters Ass'n v. Levitt,6 the court totally rejected the claim that § 1983 somehow provided an exception to the clear limitations of § 1341:
Considering the special attention courts have always shown to tax matters even when constitutional rights are involved ..., plus the unequivocal congressional statement set forth in § 1341, we conclude that when there are adequate state remedies available, § 1341 means what it so plainly says and that federal jurisdiction is still precluded by it.7
It is difficult to gain complete insight into the problem from other prior decisions because of the prevailing idea that § 1983 and 28 U.S.C. § 1343, its jurisdictional counterpart, applied only to actions involving personal rather than property rights. Because of this distinction, courts generally have held § 1983 inapplicable to state tax actions, but then have proceeded to conclude that § 1341 constituted a bar to the action.8
The personal versus property rights argument has now been laid to rest. In Lynch v. Household Finance Corp.,9 decided this term, the Supreme Court held that § 1983 applies to deprivations of both personal and property rights.
This Court has never adopted the distinction between personal liberties and proprietary rights as a guide to the contours of § 1343(3) jurisdiction. Today we expressly reject that distinction.10
In reaching that conclusion the Court clarified the proper relationship between § 1983 and § 1341. In footnote 6 to the preceding quotation the Court, noting that various cases had been cited by the respondents in support of the "personal rights distinction," stated:
All of these cases involved constitutional challenges to the collection of state taxes. Congress has treated judicial interference with the enforcement of state tax laws as a subject governed by unique considerations and has restricted federal jurisdiction accordingly....11
Thereafter the Court quoted § 1341 and went on to say:
We have repeatedly barred anticipatory federal adjudication of the validity of state tax laws. Dows v. City of Chicago, 11 Wall. 108, 20 L.Ed. 65; Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed. 447; Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293 63 S.Ct. 1070, 87 L.Ed. 1407; see also Perez v. Ledesma, 401 U.S. 82, 126-127, n. 17 91 S.Ct. 674, 27 L.Ed.2d 697-698, 701 (opinion of Brennan, J.). The decisions cited by respondents may, therefore, be seen as consistent with congressional restriction of federal jurisdiction in this special class of cases, and with longstanding judicial policy.12
We are in full accord with the Second Circuit's result in Levitt and any doubts we might have had have been completely eradicated by the Supreme Court's explicit elimination in Lynch of the personal versus property rights distinction.
Taxpayers argue alternatively that even if § 1341 is applicable to their requests for anticipatory relief it does not preclude their action for a refund. Such a contention has been accepted by several district courts,13 and focusing solely on the language of the statute the argument is compelling; but there is more.
We begin by noting that this court has already held § 1341 applicable to bar relief under a complaint which sought a refund as well as anticipatory relief. Kiker v. Hefner.14 The Seventh Circuit did likewise in Gray v. Morgan.15 However, in neither of those cases was any explanation given for the inclusion of an action for a refund within the prohibition of § 1341. Thus, while Kiker would appear to effectively preclude taxpayer's action, we give further consideration to the question because we think that even apart from the statute, sound judicial policy precludes consideration of the action by this court.
Prior to the passage of § 1341 the Supreme Court had announced a policy of judicial restraint in matters of state tax administration. In First National Bank v. Board of County Commissioners,16 the Court was faced with an action to recover the amount of certain state taxes. Taxpayer alleged the shares of its bank and other banks in the same county had been assessed upon a valuation grossly in excess of the value of shares in other banks in other counties of the state. The district court dismissed the action after sustaining a demurrer to the complaint. Reversal of that judgment was sought in the Supreme Court on the ground that "the taxes were assessed and collected in contravention of the due process and equal protection clauses of the Fourteenth Amendment...." After discussing the adequacy of the state remedy the Court affirmed the judgment of the district court holding that it was precluded from reaching the merits of the complaint because taxpayers had not availed themselves of an adequate state remedy. This case alone would seem to effectively preclude the action here for a refund if the state remedy is adequate.
In a later case, decided prior to the enactment of § 1341, the Court refused to enjoin the collection of state taxes, even though...
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