Miami Herald Pub. Co. v. City of Hallandale
| Decision Date | 18 June 1984 |
| Docket Number | No. 82-5834,82-5834 |
| Citation | 734 F.2d 666 |
| Parties | 10 Media L. Rep. 2049 The MIAMI HERALD PUBLISHING CO., et al., Plaintiffs-Appellees, Cross- Appellants, v. CITY OF HALLANDALE, et al., Defendants-Appellants, Cross-Appellees. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Legal Dept., City of Hallandale, Richard Kane, James Schoenbrod, Hallandale, Fla., for City of Hallandale.
Thomson, Zeder, Bohrer, Werth, Adorno & Razook, Sanford L. Bohrer, Miami, Fla., for plaintiffs-appellees, cross-appellants.
Appeals from the United States District Court for the Southern District of Florida.
Before ANDERSON and CLARK, Circuit Judges, and DUMBAULD *, District Judge.
The defendant City of Hallandale appeals to this court from an order of summary judgment entered by the district court in the Southern District of Florida, in favor of the plaintiff Miami Herald.
The dispute between the parties revolves around Chapter 16 of the Hallandale city code, as amended by ordinances 78-3, 79-17 and 79-19, which imposes an occupational license tax upon certain enumerated businesses. The Chapter 16 license tax specifically applies to the operation of vending machines, which necessarily includes newspaper vending machines, or newsracks. The ordinance provides in relevant part:
Sec. 16-1. Required prior to conduct of business, occupation or profession.
It shall be unlawful for any person, firm or corporation to engage in, conduct or manage the businesses, occupations or professions hereinafter mentioned in the city, unless a license shall have first been procured from the city clerk, which license shall be issued to each person, firm or corporation on receipt of the amount of tax hereinafter provided for, and shall be signed by the city clerk....
Sec. 16-4. Issuance; records to be kept.
All licenses shall be made out and issued by the city clerk on payment of the required license tax....
Sec. 16-4.1. Conduct of business to comply with all ordinances and regulations.
No license shall be issued or renewed to conduct any business which does not comply with all applicable provisions of the city Code and all regulations thereof including the Building Code, Fire Code and sanitary regulations.
Upon determining that probable cause exists to find that a business fails to comply with such ordinances or regulations, the city clerk shall give notice to the applicant of such noncompliance and refer the matter to the city commission, which shall conduct a hearing upon the issuance of such license. After hearing all evidence presented, if the city commission shall find that such business does not comply with applicable ordinances or regulations, it shall deny issuance of the license until such time as the applicant demonstrates compliance therewith....
Sec. 16-10. Schedule of license taxes.
A license tax shall be collected from every person, firm or corporation engaged in, conducting or managing any of the businesses, occupations or professions hereinafter specifically enumerated, which tax is hereby fixed at the respective amounts set opposite each business, occupation or profession hereunder....
Ordinance No. 79-17. VENDING MACHINES, distributing merchandise and services
Operator $75.00
One cent vending, each machine 1.00
Five cent vending, each machine 5.00
Ten cent vending, each machine 7.50
Over ten cents 10.00
The City of Hallandale notified the newspaper of the city's intention to apply the ordinance to Miami Herald newsracks, whereupon the newspaper brought an action in the district court under 42 U.S.C. Sec. 1983 to enjoin enforcement of the ordinance on first amendment grounds. The district court held in favor of the Miami Herald on a motion for summary judgment, for the following reasons: 1) licensing newspaper distribution is an all but per se violation of the first amendment; 2) the licensing system imposed an unlawful prior restraint and revenue tax on the exercise of a first amendment right; 3) the time, place, and manner restrictions imposed upon newspaper distribution were not narrowly drawn; and 4) the ordinance failed to comply with first amendment procedural due process requirements.
Hallandale's primary claim on appeal is that the Tax Injunction Act operates to deny the district court jurisdiction to rule on the constitutionality of the city's occupational licensing tax. 28 U.S.C. Sec. 1341. That Act provides 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.
Id. The city's position is that its ordinance constitutes a "tax under state law," which the district court is barred from enjoining; the newspaper, on the other hand, argues that the ordinance does not impose a tax but rather creates a regulatory licensing system, and consequently that the statute does not apply. 1
The Tax Injunction Act was enacted in 1937. It is generally agreed that the Act "was part of a broad congressional response to the increased exposure of state officials to suits for injunctive relief after Ex Parte Young (209 U.S. 123 [28 S.Ct. 441, 52 L.Ed. 714] (1908))." Note, "The Tax Injunction Act and Suits for Monetary Relief," 46 U.Chi.L.Rev. 736, 739 (1979); see also Hargrave v. McKinney, 413 F.2d 320, 325 (5th Cir.1969); 17 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 4236 at 407-08 (1983). The Act, however, went beyond merely responding to Young; it embodied and furthered a general federal policy of noninterference with state taxing procedures. 46 U.Chi.L.Rev. at 741-42; A Bonding Co. v. Sunnuck, 629 F.2d 1127, 1133 (5th Cir.1980); United Gas Pipe Line Co. v. Whitman, 595 F.2d 323, 326 (5th Cir.1979). In light of the Act's overarching purpose to impede federal court interference with state tax systems, "Section 1341 has been construed to be much broader than its words initially suggest." A Bonding Co. v. Sunnuck, 629 F.2d 1127, 1133 (5th Cir.1980). "Tax under state law" has been interpreted to remove from federal jurisdiction, review of state laws that are intended to raise revenue for general municipal purposes, provided that the plaintiff has an adequate remedy in state court. Schneider Transport, Inc. v. Cattanach, 657 F.2d 128, 132 (7th Cir.1981); Robinson Protective, etc. v. City of Philadelphia, 581 F.2d 371, 376 (3d Cir.1978). It has been held, however, that to the extent the statute challenged is regulatory rather than revenue raising in purpose, the measure does not constitute a tax, and the district court retains jurisdiction. Mobil Oil Corp. v. Tully, 639 F.2d 912, 917-18 (2d Cir.1981).
The question thus becomes whether the purpose of the Hallandale ordinance at issue here is to raise revenue for the city or to regulate licensees. In support of its position that the measure is revenue raising, the City of Hallandale directs our attention to Ch. 205, Fla.Stat., which the city insists is the state legislation enabling Hallandale to enact the ordinance at issue here:
205.042 Levy; municipalities--... The governing body of an incorporated municipality may levy, by appropriate resolution or ordinance, an occupational license tax for the privilege of engaging in or managing any business, profession, or occupation within its jurisdiction.
205.022 Definitions--... (1) "Local occupational license" means the method by which a local governing authority grants the privilege of engaging in or managing any business, profession, or occupation within its jurisdiction. It shall not mean any fees or licenses paid to any board, commission, or officer for permits, registration, examination or inspection. Unless otherwise provided by law, these are deemed to be regulatory and in addition to, and not in lieu of, any local occupational license imposed under the provision of this chapter.
To the extent that Chapter 16 of the Hallandale city code tracks Chapter 205, and does no more than impose an occupational license tax on vending machines, it would appear that the measure is revenue raising, not regulatory:
Chapter 205, F.S., preempts the area of local occupational license taxes, specifically excluding local regulatory fees ... The main judicial delineation between a "regulatory fee" and a "license tax" appears to be the regulatory fee requirement that some standards for regulation and control of the registrant, subsequent to payment of the fee, be provided. If the applicant is merely required to pay a fee and payment acquires the right to carry on an occupation, without any further conditions, the pecuniary extraction is generally considered a license tax. Tamiami Trail Tours, Inc. v. City of Orlando, 120 So.2d 170 (Fla.1960). The judiciary has also required the regulatory fee to be reasonably commensurate with the actual expense of issuing the regulatory license and the cost of regulation.
Op.Att'y Gen. 074-21, January 17, 1974.
With one exception, the contested provisions concern themselves exclusively with establishing a system whereby the owners of vending machines are to pay a set fee as a precondition to engaging in business within the city limits, and to that extent merely impose a revenue raising occupational license tax--a tax under state law. 2 The exception is Sec. 16-4.1. That section has nothing to do with the payment of fees or the raising of revenues, but rather requires as a prerequisite to obtaining a license to do business that applicants "comply with all applicable provisions of the city code and all regulations thereof including the Building Code, Fire Code and sanitary regulations." This latter portion of the ordinance is regulatory in nature, and as such does not fall within the definition of an occupational license tax authorized by Chapter 205. 3
Hallandale's occupational licensing tax system is thus a hybrid: the license fee provisions are, as the...
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