Hamer v. Anderson

• Decision Date: 27 September 1984
• Docket Number: No. 79 C 3627.,79 C 3627.
• Citation: 594 F. Supp. 561
• Parties: Paul E. HAMER and June T. Hamer in their own behalf and as class representatives, Plaintiffs, v. Jack L. ANDERSON, County Treasurer and ex-officio County Collector of Lake County, Illinois, in his own behalf and as representative of all Illinois' County Treasurers and County Collectors, and Lake County, Illinois, in its own behalf and as representatives of all Illinois Counties, Defendants.
• Court: U.S. District Court — Northern District of Illinois

594 F. Supp. 561

Paul E. HAMER and June T. Hamer in their own behalf and as class representatives, Plaintiffs, v. Jack L. ANDERSON, County Treasurer and ex-officio County Collector of Lake County, Illinois, in his own behalf and as representative of all Illinois' County Treasurers and County Collectors, and Lake County, Illinois, in its own behalf and as representatives of all Illinois Counties, Defendants.

No. 79 C 3627.

United States District Court, N.D. Illinois, E.D.

September 27, 1984.

Jack Uretsky, Chicago, Ill., for plaintiffs.

James Bakk, Asst. State's Atty., Waukegan, Ill., for defendants.

MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Plaintiffs Paul E. and June T. Hamer ("the Hamers") sued Jack L. Anderson, the Treasurer of Lake County, Illinois, and Lake County ("defendants") pursuant to 42 U.S.C. § 1983. Hamer claims that defendants withheld wrongfully collected real property taxes without the payment of interest. Presently before the Court are the Hamers' motion for partial summary judgment and defendants' cross-motion for summary judgment.¹ For reasons set forth below, the Hamers' motion is denied, and defendants' motion is granted.

Facts

The Hamers own a home in Lake County, Illinois, and have paid property taxes upon it under protest since 1961. They have followed Illinois statutory procedures complaining of their tax assessments by first appealing their tax assessments for each year to the Lake County Board of Review. The Hamers subsequently paid their taxes in full and filed tax objections pursuant to Ill.Rev.Stat. ch. 120, §§ 675, 716. The Circuit Court of Lake County dismissed objections for tax years 1960, 1962 and 1965 and held a trial concerning the remaining years in 1978. The Hamers were awarded $5,042.06 as a refund for taxes paid during the years in question. They were not, however, awarded interest on this sum.²

According to the Hamers, requiring them to pay illegal or improper real property taxes, refunding the taxes only after several years and refusing to pay interest on such refunds deprives them of property without due process of law, in violation of 42 U.S.C. § 1983. They seek declaratory and injunctive relief, as well as an accounting.

In considering motions for summary judgment, we emphasize that the party moving for summary judgment has the burden of clearly establishing the non-existence of any genuine issue of fact that is material to a judgment in his or her favor. Cedillo v. International Association of Bridge & Structural Iron Workers, Local Union No. 1, 603 F.2d 7, 10 (7th Cir.1979); any doubts as to the existence of material issues of fact must be resolved against the moving party. Moutoux v. Gulling Auto Electric, Inc., 295 F.2d 573, 576 (7th Cir. 1961). The non-moving party is entitled to all reasonable inferences that can be made in its favor from the evidence presented, United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). Cross-motions for summary judgment must be considered on an individual and separate basis, and both motions must be denied if there exists a genuine issue of material fact. 10A C. Wright & A. Miller, Federal Practice and Procedure § 2720 (2d ed. 1983).

Subject Matter Jurisdiction

As an initial matter, defendants assert that this Court lacks subject matter jurisdiction over the instant matter, under both the Tax Injunction Act, 28 U.S.C. § 1341, as well as principles of federalism and comity. These two grounds, while somewhat similar, are separate bases for dismissal of a complaint, and we must consider each. See Werch v. City of Berlin, 673 F.2d 192, 194 (7th Cir.1982).

28 U.S.C. § 1341

The Tax Injunction Act provides that 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. This statute bars a taxpayer from contesting the validity of a state tax in a section 1983 injunction action if there is a "plain, speedy and efficient" state remedy available. Rosewell v. LaSalle National Bank, 450 U.S. 503, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981). In Rosewell, the Court held that an Illinois remedy which required property owners contesting their property taxes to pay under protest and if successful obtain a refund without interest in two years was "a plain, speedy and efficient remedy" within the meaning of the Tax Injunction Act. Id. at 528, 101 S.Ct. at 1237.

"Plain, speedy and efficient" has been interpreted to require a state court remedy that meets certain minimal procedural criteria, id. at 512, 101 S.Ct. at 1229; Schneider Transport, Inc. v. Cattanach, 657 F.2d 128, 133 (7th Cir.1981), cert. denied, 455 U.S. 909, 102 S.Ct. 1257, 71 L.Ed.2d 448 (1982). Thus, the failure to pay interest on tax refunds did not render the Illinois remedy inefficient. As the Court observed

respondent's argument — that Illinois' failure to pay interest on the tax refund makes the remedy not "plain, speedy and efficient" — appears to address a more substantive concern. Whether she has any "federal right" to receive interest — a right she has not asserted and on which we express no view — it would appear that she could assert this right in the state-court proceeding.

Id. 450 U.S. at 515, 101 S.Ct. at 1230.

The Supreme Court in Rosewell went on to consider whether the Illinois state court procedures were "speedy." Respondent had alleged that the customary delay from the time of payment until the receipt of refund was two years, but the Court held that the two-year delay did not fall outside the boundary of a "speedy" remedy.

Other courts have discussed the additional aspects of § 1341. In Alcan Aluminium v. Department of Revenue of the State of Oregon, 724 F.2d 1294 (7th Cir. 1984), the Seventh Circuit recently held that § 1341 does not apply where there is uncertainty as to the adequacy of a state remedy. In Alcan, the Court emphasized that appellant, a corporation, might not have had a remedy in the state courts. See also Hillsborough v. Cromwell, 326 U.S. 620, 66 S.Ct. 445, 90 L.Ed. 358 (1946) (federal jurisdiction would lie because it was speculative whether New Jersey courts followed a rule of federal constitutional law and because judicial review of the State Board of Tax Appeals was discretionary).

However, the existence of unfavorable state court precedent on a federal question alone will not render the Tax Injunction Act inapplicable. Carrier Corp. v. Perez, 677 F.2d 162, 166 (1st Cir.1982). As the Court observed in Huber Pontiac v. Whitler, 585 F.2d 817 (7th Cir.1978), even if a taxpayer were faced with dispositive state court precedent which would render its state court challenge futile, he or she could ultimately obtain review from the United States Supreme Court. Thus, mere futility of state court proceedings will not override the jurisdictional bar of § 1341. Id. at 821.

In the instant case, the Hamers have pled that Illinois does not provide a "plain, speedy and efficient" remedy for the non-payment of interest on tax refunds. They add that Illinois courts do not recognize a federal right to interest upon tax refunds, and that seeking relief in the Illinois courts would be futile. Moreover, the Illinois remedies are not "speedy" according to the Hamers, since their 1978 judgment "was 17 years in the making." Defendants assert that the Hamer's futility argument cannot overcome the Tax Injunction Act. They also claim that the Hamers have not sufficiently pled that Illinois state court procedures are not "speedy," since the average time of disposition for the Hamers' tax objection cases for the past five years is less than two years.

We need not decide whether Illinois recognizes a federal right to interest. As the Supreme Court observed in Rosewell, such a right could be asserted in state court proceedings. 450 U.S. at 515, 101 S.Ct. at 1230. The Illinois state court refund procedure, moreover, provides the Hamers with a full hearing and judicial determination at which they could raise any constitutional objections to the tax. And since appeal to higher Illinois courts is authorized, Ill.Rev.Stat. ch. 120, § 675, as well as review by the Supreme Court, 28 U.S.C. § 1257, the instant case is distinguishable from Hillsborough, where appeal to higher state courts was discretionary.

It is indeed true that under Illinois law, taxpayers are not entitled to receive interest on tax refunds. First National Bank & Trust Co. v. Rosewell, 93 Ill.2d 388, 67 Ill.Dec. 87, 91, 444 N.E.2d 126, 130 (1982), cert. denied, ___ U.S. ___, 104 S.Ct. 50, 78 L.Ed.2d 70 (1983); Clarendon Associates v. Korzen, 56 Ill.2d 101, 109, 306 N.E.2d 299, 303 (1973). Cf. Shell Oil Co. v. Department of Revenue, 95 Ill.2d 541, 70 Ill.Dec. 191, 449 N.E.2d 65 (1983) (interest income earned on erroneously assessed taxes paid by court order and held in trust by State Treasurer awarded to the taxpayers). While Illinois courts might also refuse to recognize a federal right to interest, review of any such state court decisions by the United States Supreme Court would remain open. The Hamers could thus raise their federal claims, and their futility argument is therefore meritless. Huber Pontiac, Inc. v. Whitler, 585 F.2d 817, 821 (7th Cir.1978).

The Hamers also claim that the Illinois state court procedures denied them a "speedy" remedy, since it took as long as seventeen years for them to receive a refund. Defendants challenge the factual basis of the Hamers' jurisdictional allegations, asserting that within the past five years, the average time of disposition for the Hamers' tax objection cases is less than two years. When a party raises a factual issue concerning a court's subject matter jurisdiction, the court may look beyond the complaint's jurisdictional allegations and view any evidence submitted on this issue. Grafon Corp. v. Hausermann, 602 F.2d 781, 783 (7th Cir....