LONG ISLAND LIGHTING v. TOWN OF BROOKHAVEN, NY

• Decision Date: 25 January 1989
• Docket Number: No. CV 88-2376.,CV 88-2376.
• Citation: 703 F. Supp. 241
• Parties: LONG ISLAND LIGHTING COMPANY, Plaintiff, v. TOWN OF BROOKHAVEN, NEW YORK, Arthur Malaussena, as Assessor for the Town of Brookhaven, New York, Harry Ostermann, as the Chairman and Donna Johnson, Audrey Stanzalie, Raymond Farmer, Jr. and Robert Reilly, as Members of the Board of Assessment Review for the Town of Brookhaven, Henrietta Acampora, as Supervisor of the Town of Brookhaven, F. Daniel Maloney as Receiver of Taxes for the Town of Brookhaven, County of Suffolk, Sondra Bachety, as the Presiding Officer of the Suffolk County Legislature, Elisabeth Taibbi, as the Clerk of the Suffolk County Legislature, and Shoreham-Wading River Central School District, Defendants.
• Court: U.S. District Court — Eastern District of New York

703 F. Supp. 241

LONG ISLAND LIGHTING COMPANY, Plaintiff, v. TOWN OF BROOKHAVEN, NEW YORK, Arthur Malaussena, as Assessor for the Town of Brookhaven, New York, Harry Ostermann, as the Chairman and Donna Johnson, Audrey Stanzalie, Raymond Farmer, Jr. and Robert Reilly, as Members of the Board of Assessment Review for the Town of Brookhaven, Henrietta Acampora, as Supervisor of the Town of Brookhaven, F. Daniel Maloney as Receiver of Taxes for the Town of Brookhaven, County of Suffolk, Sondra Bachety, as the Presiding Officer of the Suffolk County Legislature, Elisabeth Taibbi, as the Clerk of the Suffolk County Legislature, and Shoreham-Wading River Central School District, Defendants.

No. CV 88-2376.

United States District Court, E.D. New York.

January 25, 1989.

Shea & Gould by John B. Grant, New York City, for plaintiff.

E. Thomas Boyle, Suffolk County Atty. by Robert H. Cabble, Hauppauge, N.Y., for Suffolk County defendants.

Murphy & Bartol, by Patrick M. Murphy, Jr., Mineola, N.Y., for Town of Brookhaven defendants.

Lewis & Greer, Poughkeepsie, N.Y., for defendant Shoreham-Wading River Central School District.

MEMORANDUM AND ORDER

WEXLER, District Judge.

Plaintiff the Long Island Lighting Company ("LILCO") commenced this civil rights action to enjoin the establishment, certification or collection of certain taxes assessed against LILCO's Shoreham Nuclear Power Station. According to LILCO, the challenged tax assessment procedures violate New York law because they are based on unlawful de facto classifications. These classifications are argued to violate LILCO's constitutional rights.

On November 29, 1988 this Court held oral argument on LILCO's motion for a preliminary injunction and on defendants' motion to dismiss the complaint. As indicated in the transcript of that proceeding, the Court held that even assuming the presence of irreparable harm, LILCO had failed to show: (1) a likelihood of success on the merits; (2) the existence of sufficiently serious questions going to the merits to make them a fair ground for litigation or (3) that the balance of hardships tipped in LILCO's favor. Accordingly, LILCO's motion for a preliminary injunction was denied. See Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979).

Presently before the Court are defendants' motions to dismiss. In support of their various motions defendants argue: (1) that the Tax Injunction Act, 28 U.S.C. § 1341, deprives this Court of subject matter jurisdiction; (2) that this Court should abstain from exercising jurisdiction over this case; (3) that certain individual defendants are entitled to absolute legislative immunity; (4) that plaintiff's claims are barred by the statute of limitations and (5) that the failure to allege the existence of an unconstitutional custom or policy of the County of Suffolk renders the complaint defective as against that defendant. For reasons set forth more fully below, the Court holds that LILCO's claims are barred by the Tax Injunction Act. Accordingly, the complaint is dismissed and it is unnecessary to rule on defendants' remaining contentions.

I. The Tax Injunction Act and Principles of Comity

The Tax Injunction Act, 28 U.S.C. § 1341, prohibits district courts from enjoining, suspending or restraining 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 statute recognizes the need of the states to administer their own fiscal operations and is "first and foremost a vehicle to limit drastically federal district court jurisdiction to interfere with so important a local concern as the collection of taxes." Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 522, 101 S.Ct. 1221, 1233, 67 L.Ed.2d 464 (1981).

As the statutory language indicates, the bar to the exercise of federal jurisdiction stands only if the state at issue provides a "plain, speedy and efficient remedy" to an aggrieved taxpayer. The Supreme Court has had occasion to construe the meaning of the phrase "plain, speedy and efficient remedy" and has adopted a narrow interpretation.

In Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981) the Court held that a state court remedy satisfies the statute if the remedy meets "certain minimal procedural criteria." Rosewell, 450 U.S. at 512, 101 S.Ct. at 1228 (emphasis in original). A state's remedy is procedurally "plain" if the refund procedure is "clear" and "certain." Id. at 517, 101 S.Ct. at 1231. A remedy is procedurally "efficient" if it "imposes no unusual hardship on the taxpayer requiring ineffectual activity or an unnecessary expenditure of time or energy." Id. at 518, 101 S.Ct. at 1231. The Court has recognized that the term "speedy" is a relative concept and, in light of the reality of court congestion, the Rosewell Court found that a two-year delay in obtaining a refund without interest was a "speedy" remedy within the meaning of the statute. Rosewell, 450 U.S. at 518-21, 101 S.Ct. at 1231-33.

In Tully v. Griffin, 429 U.S. 68, 97 S.Ct. 219, 50 L.Ed.2d 227 (1976) the Supreme Court considered whether New York state provides a plain, speedy and efficient remedy to amount of state taxpayer seeking to challenge a sales tax assessment. As an initial matter, the Court held that the mere fact that the non-resident taxpayer had to travel to New York to assert his rights did not render New York's remedy inadequate. Tully, 429 U.S. at 73, 97 S.Ct. at 222. In response to the taxpayer's claim that no procedural vehicle existed for determining whether the tax assessed is constitutional, the Court noted that the taxpayer was free, under New York law, to commence a declaratory judgment action to determine the constitutionality of the tax and that injunctive relief was available in the context of such an action. Id. at 75, 97 S.Ct. at 223. Having thus found that New York provided a plain, speedy and efficient remedy to the taxpayer, the Court reversed the lower court's refusal to dismiss the complaint and held that the taxpayer's claims were barred by the Tax Injunction Act. Id. at 76-77, 97 S.Ct. at 224.

Similar principles were at issue in 423 South Salina Street v. City of Syracuse, 566 F.Supp. 484 (N.D.N.Y.), aff'd, 724 F.2d 26 (2d Cir.1983). There, a taxpayer commenced a civil rights action seeking to prove that certain assessments made to its property were unconstitutional. As a threshold matter, the court noted that the broad remedial purpose of the Civil Rights Act does not necessarily preclude application of principles barring a federal court from deciding challenges to a state's system of taxation. 423 South Salina Street, 566 F.Supp. at 490. Relying on the Supreme Court's decision in Fair Assessment in Real Estate Ass'n, Inc. v. McNary, 454 U.S. 100, 102 S.Ct. 177, 70 L.Ed.2d 271 (1981), the court noted that principles of comity preclude the exercise of federal jurisdiction over a tax assessment challenge if there is a "plain, adequate and complete" remedy provided by the State. 423 South Salina Street, 566 F.Supp. at 489. Since the "plain, adequate and complete" language referred to in Fair Assessment is given the same construction as the "plain, speedy and efficient" language referred to in the Tax Injunction Act cases, see 423 South Salina Street, 566 F.Supp. at 490 n. 6, the Court analyzed the claim from the point of view of cases decided under the Tax Injunction Act. Id. at 491.

Reviewing the procedures for challenging an assessment under New York law, the 423 South Salina Street court noted the availability of the procedure pursuant to Article 7 of New York's Real Property Tax Law ("RPTL"). Although the court held the RPTL procedure to be inadequate, the court nevertheless held that New York provides a plain, adequate and complete remedy to an aggrieved taxpayer. Central to this determination was the Court's citation to the availability of: (1) pursuing a civil rights action in the state courts; (2) commencing a declaratory judgment action and (3) seeking expedited review of official action pursuant to Article 78 of New York's Civil Practice Laws and Rules. Id. at 492. Having thus found that New York's remedies meet the minimal procedural criteria outlined in Rosewell, the Court dismissed plaintiff's complaint. On appeal, the Court of Appeals for the Second Circuit stated that it agreed "fully with the district court's treatment of plaintiff's Section 1983 claims" and, in particular, with that court's analysis of "the adequacy of plaintiff's remedies under New York Law." 423 South Salina Street v. City of Syracuse, 724 F.2d 26, 27 (2d Cir.1983).

II. The Present Motion

In the present case LILCO has taken advantage of several remedies available under New York law. Having failed in its attempts to achieve satisfaction, it commenced this federal action. Specifically, LILCO commenced and is currently engaged in litigating a proceeding pursuant to Article 7 of the RPTL ("the Article 7 Proceeding"). In addition, LILCO has been a party to Abrams v. LILCO, 117 A.D.2d 764, 499 N.Y.S.2d 97 (2d Dep't), appeal dismissed, 68 N.Y.2d 752, 506 N.Y.S.2d 1034, 497 N.E.2d 708, motion for leave to appeal denied, 69 N.Y.2d 601, 511 N.Y. S.2d 1027, 503 N.E.2d 695 (1986) (the "Abrams Litigation"). In the Abrams Litigation, the Attorney General of the State of New York commenced an action against LILCO seeking to sequester LILCO's property due to LILCO's non-payment of taxes. In the context of that action LILCO was unsuccessful in its attempt to pursue a counterclaim against the State of New York.

Referring to the "thicket of procedural rules and decisions" and "seemingly endless delay" that has characterized the Article 7 Proceeding, LILCO argues that the procedure under Article 7 is inadequate under the standards set forth by the Supreme Court. Although defendants do not concede the per se inadequacy of the Article 7 Proceeding,...