Guertin v. City of Eastport
| Decision Date | 08 June 2001 |
| Docket Number | No. 01-CV-23-B-S.,01-CV-23-B-S. |
| Parties | James H. GUERTIN, Plaintiff v. CITY OF EASTPORT, et al., Defendants |
| Court | U.S. District Court — District of Maine |
Sandra Hylander Collier, Ellsworth, ME, for James H Guertin, plaintiffs.
Bruce C. Mallonee, Luke M. Rossignol, Rudman & Winchell, Bangor, ME, Daniel L. Lacasse, Calais, ME, for Eastport, City of, George Finch, defendants.
ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
Presently before the Court is Defendants' Motion to Dismiss (Docket # 6), filed pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6). For the reasons discussed below, the Court GRANTS the Motion.
When deciding whether to dismiss a complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), the Court construes the complaint "liberally, treating all well-pleaded facts as true and indulging all reasonable inferences in favor of the plaintiff." Aversa v. United States, 99 F.3d 1200, 1209-10 (1st Cir. 1996). Also, the Court "may consider whatever evidence has been submitted, such as the depositions and exhibits submitted." Id. at 1210. Because federal courts are courts of limited jurisdiction, the plaintiff has the burden of demonstrating the existence of federal jurisdiction. See, e.g., Viqueira v. First Bank, 140 F.3d 12, 16 (1st Cir.1998).
Plaintiff James H. Guertin resides in the City of Eastport, within Washington County, Maine. Guertin was president of the Quoddy Realty Corporation, which purchased two parcels of land in Eastport in January of 1994. Quoddy paid a sum of $40,000 for the two tracts. The municipality, however, valued this property much differently; for the 1994-1995 tax year, the City of Eastport treated the value of the real estate as $292,597, and assessed property taxes commensurate with this much higher dollar valuation. The City continued to view the value of the two parcels as $292,597 for the 1995-1996 tax year.
Quoddy challenged the assessments by making two applications to the City for tax abatements for the 1994-1995 and 1995-1996 tax years. The applications were supported by a real estate appraisal, suggesting an actual market value of $69,250. Eastport denied the requests for abatement. Quoddy appealed these determinations to the Washington County Commissioners, who denied the appeal. Quoddy then appealed to the Maine Superior Court, which found in the company's favor. The Superior Court ordered the County Commissioners to abate Quoddy's taxes to an amount based on a land value of $69,250 for both tax years. Eastport appealed this ruling to the Maine Supreme Judicial Court. See Quoddy Realty Corp. v. City of Eastport, 704 A.2d 407 (1998).
On January 15, 1998, the Maine Law Court ruled in Quoddy's favor, but held that neither it nor the Superior Court had the authority to order the County Commissioners to accept the $69,250 valuation. Rather, the Maine Law Court held that the courts could only remand to the County authorities, who would have to reconsider the company's applications for abatement. On remand, the County Commissioners ruled in Quoddy's favor on July 6, 2000, and adopted the evaluation of the $69,250 appraisal. The Commissioners abated Quoddy's taxes to match the $69,250 valuation for the 1994-1995 and 1995-1996 tax years.
At some point, Guertin acquired ownership of the real estate from Quoddy. The details of this conveyance, such as the purchase price, have not been presented to the Court, other than the fact that Bangor Savings Bank holds a mortgage and a note on the property.
Even though Quoddy won a tax abatement for the 1994-1995 and 1995-1996 tax years, the City of Eastport continued to value the land at $292,597 for the three subsequent tax years (1996-1997, 1997-1998 and 1998-1999) and treated the land's value as $203,063 for the most recent two tax years (1999-2000 and 2000-2001). Guertin disagrees with the City's valuation of his property during the last five years. In fact, he did not pay the assessed taxes in full during this five year period. Because he has not paid the assessed taxes, the City of Eastport instituted tax liens on the two disputed parcels, and the City began foreclosure proceedings on those liens. To prevent foreclosure, Bangor Savings Bank paid the City tax liens. Guertin did not reimburse Bangor Savings Bank for the tax liens right away, resulting in the Bank accelerating its note and demanding that Guertin immediately pay approximately $26,600 plus daily interest. Guertin paid off the note to the Bank with funds received from selling a fishing vessel.
Through counsel, Guertin has requested that the City abate its tax assessments for tax years 1996-1997 through 2000-2001. The City has refused to do so. Guertin did not appeal this refusal to the Washington County Commissioners. Instead, Guertin filed suit with this Court in February 2001 against both the City of Eastport and George "Bud" Finch, who has been the city manager of Eastport since 1994. Asserting two counts pursuant to 42 U.S.C. § 1983, Guertin asks for money damages and injunctive relief, specifically an order that the City of Eastport adopt the $69,250 appraisal for the past five tax years and cease and desist from foreclosing on the disputed tax liens.1
Count I of Plaintiff's Complaint claims that Defendant City of Eastport, acting under color of state law, has deprived Plaintiff of his constitutional rights to property, and Count II alleges that the City of Eastport and Defendant Finch have conspired to deprive him of his property rights. Based on Count I, Plaintiff seeks injunctive relief and money damages against the City. In Count II, Plaintiff demands damages from the City and Finch.
The Supreme Court repeatedly has ruled that based on the principles of comity, federal courts should not interfere with state tax schemes, so long as the state tax system provides remedies that are "plain, adequate, and complete." Fair Assessment in Real Estate Ass'n v. McNary, 454 U.S. 100, 116, 102 S.Ct. 177, 70 L.Ed.2d 271 (1981); see also Nat'l Private Truck Council v. Okla. Tax Comm'n, 515 U.S. 582, 586, 115 S.Ct. 2351, 132 L.Ed.2d 509 (1995) ( ). Also, Congress passed the Tax Injunction Act of 1937, which states:
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. Federal courts treat the comity doctrine and the Tax Injunction Act as two facets of the same proposition: that plaintiffs cannot receive relief — money damages, declaratory judgment or an injunction — from federal courts regarding state tax issues, unless that plaintiff can demonstrate that the state system is procedurally inadequate. See Nat'l Private Truck, 515 U.S. at 587-88, 115 S.Ct. 2351. Courts must "construe narrowly" this exception. See California v. Grace Brethren Church, 457 U.S. 393, 413, 102 S.Ct. 2498, 73 L.Ed.2d 93 (1982).
Consequently, the comity doctrine's standard of "plain, adequate, and complete" and the Tax Injunction Act's standard of "plain, speedy and efficient" are functionally equivalent. See Fair Assessment, 454 U.S. at 116, 102 S.Ct. 177. Supreme Court precedent demonstrates that to meet these standards, state law must provide a procedure whereby an aggrieved taxpayer is entitled to a "full hearing and judicial determination" at which the taxpayer may raise "any and all constitutional objections to the tax." See Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 514, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981).2
Plaintiff does not argue that he has been, or would be, denied a full hearing and judicial determination. Rather, he argues that Maine's tax abatement system is fatally inefficient, thereby triggering the exception of the Tax Injunction Act.3 The crux of Plaintiff's argument is that it is not efficient for taxpayers to have to file suits for each separate tax year, thereby proceeding through the state system on multiple claims.4 See Nat'l Private Truck, 515 U.S. at 591 n. 6, 115 S.Ct. 2351 (); Rosewell, 450 U.S. at 518 n. 22, 101 S.Ct. 1221 (same). Moreover, Plaintiff argues that he should not have to reapply to challenge tax valuations when the Maine Law Court already has held that a particular assessment was imposed incorrectly against the same parcel of land.
Plaintiff argues that filing more than one lawsuit imposes an inefficient burden on him. Plaintiff relies on Georgia Railroad & Banking Co. v. Redwine, 342 U.S. 299, 72 S.Ct. 321, 96 L.Ed. 335 (1952), in which a large corporation sought to prevent the imposition of state taxes against a multitude of properties dispersed throughout numerous localities. See id. at 303, 72 S.Ct. 321. The Supreme Court found that to challenge the taxes in the state system, it "would require the filing of over three hundred separate claims in fourteen different counties to protect the single federal claim asserted by appellant." See id. at 323, 72 S.Ct. 321. Therefore, the Supreme Court held that such a multiplicity of lawsuits rendered the state's remedy inefficient, thereby permitting federal jurisdiction over the dispute. While the plaintiff in Georgia Railroad would have had to file more than three hundred actions, the present Plaintiff would have to file no more than five separate actions for the 1996-2001 tax years. The Court is not...
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