Delaware, Lackawanna and Western R. Co. v. Kingsley, Civ. A. No. 88-60
| Decision Date | 16 November 1960 |
| Docket Number | 108-60,Civ. A. No. 88-60,128-60,231-60.,106-60 |
| Citation | 189 F. Supp. 39 |
| Parties | DELAWARE, LACKAWANNA AND WESTERN RAILROAD COMPANY, Plaintiff, v. William KINGSLEY, individually and as Deputy Director, Division of Taxation, Department of the Treasury, State of New Jersey, the Cities of Hoboken, Jersey City and Newark, New Jersey, and the Township of Secaucus, New Jersey, Defendants. LEHIGH VALLEY RAILROAD COMPANY, a corporation of Pennsylvania, Plaintiff, v. William KINGSLEY, individually and as Deputy Director, Division of Taxation, Department of the Treasury, State of New Jersey, Jersey City, a municipal corporation of New Jersey, City of Newark, a municipal corporation of New Jersey, and City of Perth Amboy, a municipal corporation of New Jersey, Defendants. ERIE RAILROAD COMPANY, a corporation of New York, Plaintiff, v. William KINGSLEY, individually and as Deputy Director, Division of Taxation, Department of the Treasury, State of New Jersey, Jersey City, a municipal corporation of New Jersey, City of Hoboken, a municipal corporation of New Jersey, Township of Weehawken, a municipal corporation of New Jersey and Town of Secaucus, a municipal corporation of New Jersey, Defendants. CENTRAL RAILROAD COMPANY OF NEW JERSEY, a corporation of the State of New Jersey, Plaintiff, v. William KINGSLEY, individually and as Deputy Director, Division of Taxation, Department of the Treasury, State of New Jersey, and Jersey City, New Jersey, Defendants. NEW YORK CENTRAL RAILROAD COMPANY, Plaintiff, v. William KINGSLEY, Individually and as Deputy Director, Division of Taxation, Department of the Treasury, State of New Jersey, Township of Weehawken, Town of West New York, and Township of North Bergen, New Jersey, Defendants. |
| Court | U.S. District Court — District of New Jersey |
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David D. Furman, New Jersey State Atty. Gen., Theodore Botter, Union City, N. J., for State of New Jersey.
Augustus Nasmith, Hoboken, N. J., for plaintiff Delaware, L. & W. R. Co.
Lamb, Langan & Blake, by Raymond Lamb, Jersey City, N. J., for plaintiffs Lehigh Valley R. Co. and Erie R. Co.
Joseph C. Glavin, Jersey City, N. J., for plaintiff Central R. Co. of New Jersey.
O'Mara, Schumann, Davis & Lynch, by Joseph Davis, Jersey City, N. J., for plaintiff New York Cent. R. Co.
Herbert H. Fine, Newark, N. J., for defendant City of Hoboken, N. J.
Leo Rosenblum, Jersey City, N. J., for defendants Jersey City, N. J., and Secaucus Tp., N. J.
Vincent P. Torppey, by Jacob M. Goldberg, Newark, N. J., for defendant City of Newark, N. J.
Robert Wilentz, Perth Amboy, N. J., for defendant City of Perth Amboy, N. J.
Leon S. Milmed, Newark, N. J., for defendant Township of Weehawken, N. J.
Samuel L. Hirschberg, West New York, N. J., for defendant Town of West New York, N. J.
Nicholas S. Schloeder, Union City, N. J., for defendant Township of North Bergen, N. J.
These are five separate actions by railroad companies, owning Class II railroad property (N.J.R.S. 54:29A-17, N.J. S.A.) in certain municipalities in New Jersey, against those municipalities and against the Deputy Director of the Division of Taxation of the Department of the Treasury of the State of New Jersey. Each complaint charges violation of plaintiff's rights under the due process and equal protection clauses of the Fourteenth Amendment to the United States Constitution, by the assessment of plaintiffs' Class II real estate in the defendant taxing districts (1) at true value, (2) at a percentage of true value in excess of the average ratio of assessed to true value applied in assessing other real estate in the same municipality, and (3) at a percentage of true value in excess "of the objective statistical common or general ratio" of assessed to true value of non-railroad property determinable as of October 1, 1959. The assessments complained of are also alleged to constitute unlawful interference with and an undue burden upon interstate commerce, in contravention of the commerce clause of Article I, § 8, cl. 3 of the same Constitution.
Asserted jurisdiction in this Court is predicated upon §§ 1331, 1332 and 2201 of Title 28 — the involvement of a federal question and minimum requisite amount, diversity of citizenship (in all but one of the actions) and the appropriateness of a declaratory judgment remedy.
Defendant municipalities deny the charged discrimination. They plead (1) adequacy of State administrative and judicial remedy; (2) failure to state a claim upon which relief can be granted; (3) estoppel by judgment in Central Railroad Co. of New Jersey v. Neeld, etc., 1958, 26 N.J. 188, 139 A.2d 119; and (4) res judicata in Central Railroad Co. of New Jersey v. Neeld, etc., 1958, 26 N. J. 172, 139 A.2d 110, certiorari denied 357 U.S. 928, 78 S.Ct. 1373, 2 L.Ed.2d 1371.
Defendant Deputy Director, also denying discrimination, pleads (1) no violation of federal right; (2) res judicata; (3) lack of jurisdiction; (4) failure to state a claim upon which relief can be granted; (5) improper joinder of Kingsley as Deputy Director; (6) non-joinder of the State of New Jersey as an indispensable party; (7) sovereign immunity; (8) absence of justiciable controversy; (9) absence of federal question; (10) lack of diversity of citizenship; (11) adequacy of remedy under State law; and (12) lack of authority in this Court to enjoin assessment of tax under State law by reason of the provisions of 28 U.S.C. § 1341.
The alleged federal questions raised by the plaintiffs are disclosed in their contentions that the actions arise under the commerce clause, Article I, section 8, clause 3, of, and under the due process and equal protection clauses in section 1 of the Fourteenth Amendment to the Constitution of the United States. They seek declaratory judgments pursuant to 28 U.S.C. § 2201. It is alleged and conceded that the jurisdictional minimum prescribed by section 1331 is involved.
The allegations of each complaint may be generally summarized as follows: Plaintiff is an interstate carrier by rail, owning parcels of real estate which it uses for railroad purposes and which are located in the defendant municipalities in the State of New Jersey.1 Those properties are classified by the New Jersey Railroad Tax Law of 1948, N.J.S.A. 54:-29A-1 et seq., as Class II railroad property, N.J.S.A. 54:29A-17. The latter section requires that all real property owned or used by a railroad company for railroad purposes in New Jersey shall be assessed for tax purposes annually by the Director of the Division of Taxation of the Department of the Treasury of the State. He is required to determine, on November first of each year, the true value of Class II railroad property as of the preceding January first, and to deliver a detailed statement of his valuation of the property to the taxpayer not later than December 10 of that year; he is also required to certify the value of Class II railroad properties, no later than December 15 of that year, to the assessors of the taxing districts in which such property is situated. All tax receipts upon such property is required to be paid to the municipality in which the property is located.
The complaint also quotes paragraph 1 of section I of Article VIII of the Constitution of New Jersey, 1947.2
The law provides, and the complaint recites, a succession of four procedures for the review of the tax assessments of Class II railroad property in the State, as follows:
(1) A railroad taxpayer, claiming that error has been made in its Class II property valuations, may petition the Director for review thereof on or before the second Monday of January following the completion of the valuations. The Director is required to hold a hearing upon the petition and to make his determination thereon before March 15 following the filing thereof. On the latter date he is required to certify the value of the Class II property situate in each taxing district, with such corrections or changes as he shall have made, to the County Board of Taxation of the County in which the property is located, N.J.S.A. 54:29A-18. The County Board of Taxation is required to certify to the Director the general tax rate adopted for the taxing district in which the Class II railroad property is located,3 and, by applying such rate to the valuations which he has determined, the Director thereupon assesses the annual tax upon the Class II railroad property.
(2) A further opportunity for review of a tax assessment of Class II railroad property is afforded by way of written complaint of the taxpayer to the State Board of Tax Appeals of New Jersey. Such a complaint must be filed on or before the third Monday of May following the making of the assessment. N.J.S.A. 54:29A-31. A hearing upon the complaint is provided, and, if it "appear upon such hearing that any such assessment * * * is illegal, excessive, insufficient or that there has been illegal discrimination in the assessment," the Board is required to correct, adjust and equalize the assessment. N.J.S.A. 54:29A-33. The Board must conclude its hearing on or before the first day of November following the filing of the complaint, and must certify its final determination to the State Tax Commissioner between the 5th and the 10th days of the same month. N.J.S.A. 54:29A-34.
(3) Yet another opportunity for review is afforded by the provision that the final determination of the Division of Tax Appeals may be contested by the taxpayer in a proceeding in lieu of a prerogative writ in the Superior Court of the State, N.J.S.A. 54:29A-36. If that Court in such a proceeding shall find that the final determination of the Division of Tax Appeals respecting the assessment "is illegal, excessive, insufficient or that there has been illegal discrimination in the assessment," the Court is required to "correct, adjust and equalize such assessment * * * or refer same back to the director of the division, who shall correct, adjust and...
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