May v. Supreme Court of State of Colorado

• Decision Date: 05 April 1974
• Docket Number: Civ. A. No. C-5528.
• Citation: 374 F. Supp. 1210
• Parties: Thomas H. MAY and David C. Vigil, for themselves and on behalf of all others similarly situated, Plaintiffs, v. The SUPREME COURT OF the STATE OF COLORADO et al., Defendants.
• Court: U.S. District Court — District of Colorado

374 F. Supp. 1210

Thomas H. MAY and David C. Vigil, for themselves and on behalf of all others similarly situated, Plaintiffs, v. The SUPREME COURT OF the STATE OF COLORADO et al., Defendants.

Civ. A. No. C-5528.

United States District Court, D. Colorado.

April 5, 1974.

David C. Vigil, Denver, Colo., for plaintiffs.

John P. Moore, Atty. Gen., John E. Bush, Deputy Atty. Gen., Irvin M. Kent, and Bernard S. Kamine, Asst. Attys. Gen., Denver, Colo., for defendants.

Carl W. Gellenthien, Pueblo, Colo., on behalf of the Colo. Bar Ass'n. as amicus curiae.

OPINION AND ORDER

CHILSON, District Judge.

This action was initiated by the two Plaintiffs who are attorneys admitted to practice law in the State of Colorado, seeking to enjoin the enforcement of a portion of Rule 227 adopted by the Supreme Court of Colorado on October 25, 1973.

This Rule, in pertinent parts, provides:

"(1) Every attorney admitted to practice in Colorado (including judges, those admitted on a provisional or temporary basis and those admitted as judge advocate) shall pay an annual fee of $20.00; provided that the fee of any attorney whose first admission to practice is within the preceding five years shall be $5.00. The annual fee shall be collected by the Clerk of the Supreme Court of Colorado, who shall send and receive, or cause to be sent and received the notices and statements provided for hereafter. The fee shall be used only to defray the costs of disciplinary administration and enforcement, the costs incurred with respect to unauthorized practice matters, and the expenses incurred in the administration of this rule. On or before August 1 of each year, the Chief Justice shall prepare, certify and file with the Clerk a written report of the receipts and disbursements under this rule during the preceding fiscal year ending on June 30th. These reports shall be public documents.

(2) Any attorney who fails to timely pay the fee required under (1) above shall be summarily suspended, provided a notice of delinquency has been issued by the clerk and mailed to the attorney by certified mail addressed to the attorney's last known business address at least 30 days prior to such suspension, unless an excuse has been granted on grounds of financial hardship.

(3) Any attorney suspended under the provisions of (2) above shall be reinstated without further order upon payment of all arrearages to the date of the request for reinstatement."

A complete copy of the Rule is attached to this opinion as an appendix.

The Plaintiffs freely admit that the Colorado Supreme Court has the inherent power to discipline attorneys and regulate unauthorized practice of law, but contend that the Supreme Court is without authority to impose a fee upon the attorneys for such purposes and to suspend them from the practice of law for failure to pay the fee.

They assert that only the State Legislature has the power to impose such a fee to obtain funds to carry out the purposes of the rule; that the imposition of the fee and the suspension provisions of the rule violate their rights to due process and equal protection of the laws guaranteed by the Fourteenth Amendment to the federal constitution and seek to enjoin the enforcement of those portions of the rule.

The matter presently before the Court is the Defendants' motion to dismiss the complaint for lack of subject matter jurisdiction and failure of the complaint to state a claim upon which relief can be granted.

The complaint alleges jurisdiction of this Court pursuant to Title 28 U.S.C. § 1331, which confers jurisdiction in civil actions involving federal questions wherein the amount in controversy exceeds $10,000.

Briefs have been filed in support of and in opposition to the motion to dismiss and the Court has heard oral argument by counsel and is duly advised.

Amount in Controversy

Unless the amount in controversy exceeds the sum of $10,000, this Court is without jurisdiction of the subject matter of this action.

The parties did not discuss this question in their briefs, but during the course of the oral argument, the Court inquired of Plaintiffs' counsel the basis for this allegation. Plaintiffs' counsel, in response, stated that the allegation of the amount in controversy was based on the fact that if the Plaintiffs did not pay the $20.00 annual fee, they would be suspended from the practice of law and that the damages arising from such suspension would be in excess of $10,000.

Although the Defendants did not question the amount in controversy, when it appears that the jurisdictional amount may not be involved it becomes the duty of the Court to raise the question sua sponte. Subject matter jurisdiction cannot be waived or conferred by the consent, estoppel or laches of the parties. United States v. Corrick, 298 U.S. 435, 56 S.Ct. 829, 80 L.Ed. 1263 (1936); F and S Construction Company v. Jensen, 337 F.2d 160 (10th Cir. 1964); Roberson v. Harris, 393 F. 2d 123 (8th Cir. 1968).

Examination of the case law reveals the great weight of authority to be that in suits to enjoin enforcement of taxes and license fees, the amount in controversy is the amount of the tax or fee imposed and not the damage or loss which will be incurred by failure to pay the fee.

In Healy v. Ratta, 292 U.S. 263, 54 S. Ct. 700, 78 L.Ed. 1248 (1934), the plaintiff sought to enjoin the enforcement of a statewide license tax on salesmen on the ground that it was a denial of equal protection of the laws in violation of the federal constitution. The Court held that the test of the amount in controversy is the total amount of the tax involved and not the value of the right to conduct the business.

Henneford v. Northern Pacific Railway Company, 303 U.S. 17, 58 S.Ct. 415, 82 L.Ed. 619 (1938), was a suit by Northern Pacific to restrain the enforcement of a tax imposed by the State of Washington. The validity of the tax was assailed under the commerce and due process clauses of the federal constitution. Plaintiff alleged that its business would be damaged to the extent of more than $100,000 as a consequence of its failure to pay the tax. The Court held the amount in controversy was the amount of the tax and not the damages resulting from the failure to pay the tax, and ordered the action dismissed for lack of the jurisdictional amount.

See also Vicksburg S. and P. Railroad Co. v. Nattin, 58 F.2d 979 (5th Cir. 1932), where the attack on the tax was that it violated equal protection rights under the Fourteenth Amendment; Salander v. City of Tacoma, 208 F. 427, (D.C.1913), in which the tax was alleged to be in violation of the plaintiff's rights under the Fourteenth Amendment and that the tax deprived the plaintiff of due process and equal protection of the law; Southern Fruit Co., Inc. v. Porter, 21 F.Supp. 1011 (W.D.S.C.1937), in which plaintiff sought to enjoin a license tax on trucks as being in violation of his rights to equal protection of the laws as guaranteed by the Fourteenth Amendment. In each of these cases it was held that the amount of the tax is the measure of the amount in controversy for jurisdictional purposes.

The Court concludes that the action should be dismissed for lack of subject matter jurisdiction.

Assuming jurisdiction, does the complaint state a federal question claim upon which relief can be granted?

Although the court's finding of lack of subject matter jurisdiction is dispositive of the motion to dismiss, the Court elects to consider also whether or not the complaint states a claim or claims upon which relief can be granted.

The complaint alleges that the fee and suspension provisions of the rule are void and unenforceable on any one of four grounds, each of which, if separately stated and numbered, would constitute a separate claim. These claims are:

1. That the rule violates Chapter 12 of the 1963 C.R.S. 12-1-1 and 12-1-18 which provides that an attorney may be stricken from the roll of attorneys only for malconduct in his office (Complaint, Para. 10).

2. There is no provision of the constitution or statutes of the State of Colorado which permit the Colorado Supreme Court to impose such a license tax (Complaint, Para. 12).

3. That the imposition and collection of the "tax" by the Colorado Supreme Court is a usurpation of legislative power and in violation of the doctrine of separation of powers set forth in the Colorado Constitution, and that such violation constitutes an invasion of the Plaintiffs' due process and equal protection rights under the Fourteenth Amendment to the federal constitution (Complaint, Para. 13).

4. That the difference in treatment accorded lawyers who pay the fee and those who do not constitutes invidious discrimination against those who do not pay the fee and is in violation of due process and equal protection rights under the Fourteenth Amendment to the federal constitution (Complaint, Para. 14).

The first and second claims are state claims and do not raise a federal question. The third and fourth claims are claims based on a federal question. If either or both of the federal question claims state a claim upon which relief can be granted, this Court may or may not exercise pendent jurisdiction of the state claims, a question we do not now decide.

If neither of the federal question claims state a claim upon which relief can be granted, this Court will have no jurisdiction to determine the two state claims. Emmons v. Smitt, 149 F.2d 869 at 872 (6th Cir. 1945). We, therefore, turn our attention to the federal question claims.

Third Claim

From Paragraph 13 of the complaint, and from Plaintiffs' brief, it appears that Plaintiffs assert that the $20.00 fee imposed by Rule 227 is a "tax"; that Article III of the Colorado Constitution provides for separation of powers among the legislative, judicial and executive branches of the state government; that Article V, Sections 31, 32 and 35 of the Colorado Constitution delegates to the Legislature the power to raise revenue and...