Nevada-California Power Co. v. Hamilton

• Decision Date: 19 June 1916
• Docket Number: A-32.,A-31
• Parties: NEVADA-CALIFORNIA POWER CO. v. HAMILTON, County Treasurer, et al. SAME v. FRANKLIN, County Treasurer, et al.
• Court: U.S. District Court — District of Nevada

235 F. 317

NEVADA-CALIFORNIA POWER CO. v. HAMILTON, County Treasurer, et al.

SAME v. FRANKLIN, County Treasurer, et al.

Nos. A-31, A-32.

United States District Court, D. Nevada.

June 19, 1916

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

John R Dixon, of Los Angeles, Cal., and Newman Jones, of Riverside, Cal., for plaintiffs.

George B. Thatcher, Atty. Gen., of Nevada, J. A. Sanders, Dist. Atty., of Tonopah, Nev., and M. A. Diskin, Dist. Atty., of Goldfield, Nev., for defendants.

FARRINGTON District Judge.

June 24, 1914, the Nevada Tax Commission established the full cash value of plaintiff's property within this state at $1,492,815. Sixty per cent. of this was taken for the purposes of taxation, making the assessed value $895,689. As between the interested counties, this amount was apportioned $328,689 to Nye and $565,000 to Esmeralda. Mr. Shaughnessy, chairman of the Tax Commission, testifies that:

'In finding the said $1,492,815 as the full cash valuation of complainant's property, and $895,689 for assessment purposes, the Commission took into account its nonphysical values, as well as the purely physical elements. The sum taken therefore was believed to cover the overhead costs incurred in the construction of the property, and also the franchise element contemplated by section 5 of the Tax Commission Law, in making up the collective unit valuation of the Power Company's property.' In October, 1914, the Power Company appeared before the Commission, complaining that this valuation was excessive, and would operate as an unlawful, unjustifiable, and unconstitutional discrimination, whereby it would be deprived of the equal protection of the laws of the state of Nevada. Instead of reducing the valuation, the Commission raised it to $3,700,713, 60 per cent. of which, or $2,221,417, was fixed as the value for purposes of taxation. The effect of this change was to increase the Nevada tax of complainant from $21,850.29 to $53,517.82. The Power Company then brought the present suits, one against Joseph Hamilton, in his capacity as treasurer and ex officio tax receiver of the county of Esmeralda, and Michael A. Diskin, in his capacity as district attorney of the said county of Esmeralda, and Cylde P. Johnson, in his capacity as auditor of the said county of Esmeralda, and the other against Nathaniel K. Franklin, in his capacity as treasurer and ex officio tax receiver of the county of Nye, and John A. Saunders, in his capacity as district attorney of the said county of Nye, and William M. Grimes, in his capacity as auditor of the said county of Nye. In each the prayer was that it be adjudged that the full cash value of plaintiff's property in Nevada at any time during the year 1914 was and is the sum of $1,220,843; that the valuation fixed for that year by the Nevada Tax Commission was and is unjust and inequitable, and in so far as it exceeds 60 per cent. of said $1,220,843 it is wholly void, and of no force or effect; that complainant be granted writs of injunction, both temporary and permanent, restraining the enforcement of the valuations or orders of the Nevada Tax Commission as against plaintiff, or from commencing or prosecuting any action or actions at law for the enforcement of said valuations and orders, or for the collection of any tax claimed thereunder; and that the treasurer of Nye county be directed to accept and receive $6,321.25, and the treasurer of Esmeralda county $11,382.60, or such other sums as the court may adjudge, in full payment of all taxes levied or assessed against plaintiff within said counties for the year 1914.

Both suits are now before the court on complainant's application for orders of injunction pendente lite. Both applications have been heard together, and will be disposed of in this opinion.

1. Complainant is a corporation organized and existing under the laws of the state of Wyoming; all the defendants are residents and citizens of Nevada. The amount in controversy in each case exceeds $3,000. The cases, therefore, are within the jurisdiction of this court, unless they are in reality suits against the state, and therefore within the inhibition of the constitutional amendment, which declares the judicial power of the United States shall not extend to suits against a state. It would be an unfortunate construction of that amendment which would prohibit application to federal courts to protect rights guaranteed by the federal Constitution itself, when illegally invaded by state or county officials. These are not suits against the state, but against individuals, threatening wrong under color of authority from the state.

It is alleged and admitted that, unless restrained, defendants will levy on complainant's property, advertise it as delinquent, take each step prescribed by statute for the enforcement of taxes exceeding $300, and thus compel payment of the taxes here complained of. If the assessment be illegal, excessive, and fraudulent, defendants' acts thereunder and in connection therewith, if purely ministerial, will constitute a trespass. If the suits were against an official, as representative of the state, not specially charged with the execution of the injurious acts, or threatening to perpetrate them, then the state would be the real party in interest and the real defendant. In that event, both suits could be dismissed, because, as we know, the state cannot, without its consent, be brought into court at the suit of a private individual. On the other hand, when a state or county official has committed, or is threatening to commit, an illegal or unconstitutional act under color of authority from the state, he is shielded by none of the state's immunity from suit; he becomes himself an actor; he incurs the liability of, and may be proceeded against as, the principal tortfeasor.

In Hopkins v. Clemson Agricultural College, 221 U.S. 636, 642, 31 Sup.Ct. 654, 656, 55 L.Ed. 890, 894, 35 L.R.A. (N.S.) 243, 249, the rule and its reasons are thus clearly stated:

'Immunity from suit is a high attribute of sovereignty-- a prerogative of the state itself-- which cannot be availed of by public agents when sued for their own torts. The eleventh amendment was not intended to afford them freedom from liability in any case where, under color of their office, they have injured one of the state's citizens. To grant them such immunity would be to create a privileged class, free from liability for wrongs inflicted or injuries threatened. Public agents must be liable to the law, unless they are to be put above the law. For how 'can these principles of individual liberty and right be maintained if, when violated, the judicial tribunals are forbidden to visit penalties upon individual offenders * * * whenever they interpose the shield of the state? * * * The whole frame and scheme of the political institutions of this country, state and federal, protest' against extending to any agent the sovereign's exemption from legal process. Poindexter v. Greenhow, 114 U.S. 270, 291 (5 Sup.Ct. 903, 29 L.Ed. 185). The many claims of immunity from suit have therefore been uniformly denied, where the action was brought for injuries done or threatened by public officers. If they were indeed agents, acting for the state, they-- though not exempt from suit-- could successfully defend by exhibiting the valid power of attorney or lawful authority under which they acted. Cunningham v. Macon & B.R. co., 109 U.S. 446, 452 (3 Sup.Ct. 292, 609, 27 L.Ed. 992). But if it appeared that they proceeded under an unconstitutional statute, their justification failed, and their claim of immunity disappeared on the production of the void statute. Besides neither a state nor an individual can confer upon an agent authority to commit a tort, so as to excuse the perpetrator. In such cases the law of agency has no application-- the wrongdoer is treated as a principal, and individually liable for the damages inflicted, and subject to injunction against the commission of acts causing irreparable injury.'

The distinction between suits against officers as representatives of the state, and suits against officers threatening in the name of the state to do illegal and unconstitutional acts, is recognized in the authorities cited by defendants. For instance, in Ex parte Ayers, 123 U.S. 443, 444, 8 Sup.Ct. 164 (31 L.Ed. 216) it is said: 'The court does not intend to impinge upon the principle which justifies suits against individual defendants who, under color of the authority of unconstitutional state legislation, are guilty of personal trespasses and wrongs; nor to forbid suits against officers in their official capacity either to arrest or direct their official action by injunction or mandamus, where such suits are authorized by law, and the act to be done or omitted is purely ministerial, in the performance or omission of which the plaintiff has a legal interest.'

In Fitts v. McGhee, 172 U.S. 516, 529, 530, 19 Sup.Ct. 269, 274 (43 L.Ed. 535) the court says:

'Upon examination it will be found that the defendants in each of those cases were officers of the state, specially charged with the execution of a state enactment alleged to be unconstitutional, but under the authority of which, it was averred, they were committing or were about to commit some specific wrong or trespass to the injury of the plaintiff's rights. There is a wide difference between a suit against individuals, holding official positions under a state, to prevent them, under the sanction of an unconstitutional statute, from committing by some positive act a wrong or trespass, and a suit against officers of a state merely to test the constitutionality of a state statute, in the enforcement of which those officers will act only by formal judicial

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