Northeast Federal Credit Union v. Neves, Civ. No. 87-275-D.
| Decision Date | 15 July 1987 |
| Docket Number | Civ. No. 87-275-D. |
| Citation | 664 F. Supp. 640 |
| Parties | NORTHEAST FEDERAL CREDIT UNION v. Anthony J. NEVES; James N. Black; Lester D. House, Jr.; Kevin J. Kelley; Frank R. Lowell, Jr.; Allen R. Hill; James G. Mendros; Clarence Papineau; Lionel A. Gravel; Gayle A. Reed; Antonio D. Bastianelli; Ernest R. Pouliot; Linda Pouliot; Richard A. Lavallee; Burns H. Bolstridge; Paul A. Brown; Richard W. Boisvert; Joseph M. Fransoso; Christopher O. Sheahan; David J. Levasseur; Roger W. Labranche; Thomas E. Gough; Cathy Burgess; Roland R. Eldridge, Jr.; Tab M. Burgess; Dennis R. Boulard; Peter A. Paige; Douglas W. French; Raymond J. Brien; Shirley Brien; Alan R. Cosseboom; William T. Callahan, Jr.; Richard J. Viel; Electra Viel; Richard L. Bonenfant; Gary P. Fieldsend; Merton E. Twombly. |
| Court | U.S. District Court — District of New Hampshire |
C. Russell Shillaber, Rochester, N.H., for plaintiff.
Crombie J.D. Garrett, Deputy Atty. Gen., Portland, Me., for defendants.
The unusual circumstances of this litigation concern the invocation by a federally-chartered credit union of the equitable relief provided by the federal interpleader statute. 28 U.S.C. § 1335.1 The relief here sought is by medium of injunction against levy of state taxes on the accounts of certain of the Credit Union's customers. 28 U.S.C. § 2361.2
Plaintiff Northeast Federal Credit Union ("NEFCU") is chartered under the provisions of the Federal Credit Union Act, 12 U.S.C. § 1751, et seq. Its principal place of business is located in Portsmouth, New Hampshire, but it has branches in Manchester, Concord, and Dover in that state. Also, and specifically relevant to this litigation, it maintains a branch at the United States Naval Shipyard, which is located in Kittery, Maine.
imposes income taxes on nonresidents.3 The additional defendants named in the complaint herein are New Hampshire residents who at relevant times were employed at the Shipyard and who are also members of NEFCU.
On June 12, 1987, pursuant to the applicable collection provisions of the Maine income tax statute, 36 Maine Revised Statutes Annotated ("M.R.S.A.") § 176 (Supp. 1986), defendant Neves mailed notice of levy on accounts of 53 New Hampshire resident Shipyard employees who he believed to also be members of NEFCU.4 On receipt of the notice of levy, NEFCU initially ascertained that 34 of the allegedly delinquent taxpayers therein named held current accounts with it. It therefore prepared and forwarded to defendant Neves checks totaling $24,402.16. Upon further reflection, however, it stopped payment on said checks.
The State of Maine followed by filing in a state court an action against NEFCU seeking to enforce the provisions of 36 M.R.S.A. § 176 (Supp.1986), supra note 4, including its penalty.5 In turn, NEFCU brought the instant action in this court.6
The parties concede that the requisite jurisdiction exists pursuant to 28 U.S.C. § 1335.7 Plaintiff's position, unaccompanied by citation, is that as its principal place of business is located in Portsmouth, New Hampshire, the Maine courts lack jurisdiction over it for purposes of enforcing any tax delinquency and must therefore reduce their claims to judgment in Maine and then seek to enforce such judgment in a New Hampshire court. Defendant Neves disagrees with this argument and contends that this Court is barred from proceeding further because of the provisions of the anti-tax injunction statute, 28 U.S.C. § 1341. For reasons mentioned by counsel for neither party, the Court finds and rules that NEFCU is entitled by means of relevant provisions of the Federal Credit Union Act to the relief which it here seeks.
The anti-tax injunction statute, 28 U.S.C. § 1341, 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.
Motivated by recognition of the imperative need of a state to administer its own fiscal operations, Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 522, 101 S.Ct. 1221, 1233-34, 67 L.Ed.2d 464 (1981), 28 U.S.C. § 1341 bars actions in federal courts where the state provides adequate judicial remedies, even though such remedies are not as liberal as the remedies that would be afforded a claimant in a federal court. Chasan v. Village Dist. of Eastman, 572 F.Supp. 578, 584 (D.N.H.1983), aff'd without opinion, 745 F.2d 43 (1984); McCann v. Silva, 455 F.Supp. 540, 543 (D.N.H.1978). If the statute were here applicable, review of the remedies afforded with reference to tax claims pursuant to 36 M.R.S.A. demonstrate that such remedies would comply with the statutory requirements.
However, federally chartered credit unions are unique federal institutions who have been granted exemption from state taxes. First Fed. Sav. & Loan Assoc. v. Massachusetts Tax Comm'n, 437 U.S. 255, 260, 98 S.Ct. 2333, 2336-37, 57 L.Ed.2d 187 (1978); Branch Bank & Trust Co. v. Nat'l Credit Union Admin. Bd., 786 F.2d 621 (4th Cir.1986), cert. denied, ___ U.S. ___, 107 S.Ct. 948, 93 L.Ed.2d 997 (1987). They are, in fact, federal instrumentalities upon which taxes of the type here at issue may not be imposed. United States v. State of Maine, 524 F.Supp. 1056, 1058-59 (D.Me. 1981); United States v. State of Michigan, 635 F.Supp. 944, 946-47 (D.Mich.1985). Accordingly, the provisions of 28 U.S.C. § 1341 are not applicable to NEFCU. Department of Employment v. United States, 385 U.S. 355, 357-58, 87 S.Ct. 464, 466, 17 L.Ed.2d 414 (1966). Nor is joinder of the United States as a co-plaintiff required to establish this immunity. Federal Reserve Bank of Boston v. Commissioner of Corporations and Taxation, 499 F.2d 60, 62 (1st Cir.1974).
Specifically relevant to the instant litigation is the following section of the Federal Credit Union Act:
The Federal credit unions organized hereunder, their property, their franchises, capital, reserves, surpluses, and other funds, and their income shall be exempt from all taxation now or hereafter imposed by the United States or by any State, Territorial, or local taxing authority; except that any real property and any tangible personal property of such Federal credit unions shall be subject to Federal, State, Territorial, and local taxation to the same extent as other similar property is taxed. Nothing herein contained shall prevent holdings in any Federal credit union organized hereunder from being included in the valuation of the personal property of the owners or holders thereof in assessing taxes imposed by authority of the State or political subdivision thereof in which the Federal credit union is located; but the duty or burden of collecting or enforcing the payment of such a tax shall not be imposed upon any such Federal credit union and the tax shall not exceed the rate of taxes imposed upon holdings in domestic credit unions.
12 U.S.C. § 1768 (emphasis added).
There is no ambiguity in the above-emphasized language of 12 U.S.C. § 1768. Its mandate is clear. A state may include the holdings of any federal credit union in evaluating the personal property of the owners thereof for tax assessment purposes, but it may not impose upon the credit union any duty of collecting or enforcing payment of such taxes. Baker v. Lindley, 5 Ohio St.3d 195, 449 N.E.2d 1301, 1303 (1983). As was the case with respect to the federal reserve bank at issue in the case of Federal Reserve Bank of Boston v. Commissioner of Corporations and Taxation, 520 F.2d 221 (1st Cir.1976), an applicable federal statute here grants NEFCU exemption from any attempts at levy or collection of this tax by the Maine taxing authorities.
For the reasons hereinabove detailed, it is accordingly herewith ORDERED:
1. The defendant Anthony J. Neves, his agents, servants, or employees, and any state taxing authorities of the State of Maine acting in cooperation or concert with him are herewith enjoined, restrained, and otherwise ordered to cease and desist any attempts at imposition of a levy seeking to collect or enforce payment of...
To continue reading
Request your trial
-
Northeast Federal Credit Union v. Neves
...that 12 U.S.C. Sec. 1768 protected the deposits in question from Maine's attempts to garnish them. Northeast Federal Credit Union v. Neves, 664 F.Supp. 640, 642-43 (D.N.H.1987) (NEFCU I ). The district judge reasoned that the state, in the idiom of section 1768, was endeavoring to impose a ......