Oregon Short Line Railroad Co. v. Department of Revenue Oregon
| Decision Date | 23 March 1998 |
| Docket Number | 97-35089,97-35113,Nos. 97-35025,97-35181,97-35088,s. 97-35025 |
| Citation | 139 F.3d 1259 |
| Parties | 98 Cal. Daily Op. Serv. 2023, 98 Daily Journal D.A.R. 2839 OREGON SHORT LINE RAILROAD COMPANY, Union Pacific Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellees, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellants. UNION PACIFIC RAILROAD COMPANY; Oregon Short Line Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellees, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellants. UNION PACIFIC RAILROAD COMPANY; Oregon-Washington Railroad & Navigation Co., Oregon Short Line Railroad Co., Plaintiffs-Appellees, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellants. UNION PACIFIC RAILROAD COMPANY and its lessors; Oregon-Washington Railroad & Navigation Company, and Oregon Short Line Railroad Company, Plaintiffs-Appellees, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellants. OREGON SHORT LINE RAILROAD COMPANY; Union Pacific Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellees, v. DEPARTMENT OF REVENUE OREGON, Defendant-Appellant. OREGON SHORT LINE RAILROAD COMPANY; Union Pacific Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellants, v. DEPARTMENT OF REVENUE OREGON, Defendant-Appellee. OREGON SHORT LINE RAILROAD COMPANY; Union Pacific Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellants, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellees. UNION PACIFIC RAILROAD COMPANY; Oregon Short Line Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellants, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellees. OREGON SHORT LINE RAILROAD COMPANY; Union Pacific Railroad Company; Oregon-Washington Railroad & Navigation Co., Plaintiffs-Appellants, v. DEPARTMENT OF REVENUE OREGON; State of Oregon, Defendants-Appellees. OREGON SHORT LINE RAILROAD COMPANY; Union Pacific Railroad Company; Oregon-Washington R |
| Court | U.S. Court of Appeals — Ninth Circuit |
Richard D. Wasserman, Office of the Attorney General, Salem, Oregon, for appellants.
Eugene A. Ritti, Hawley Troxell Ennis & Hawley LLP, Boise, Idaho, for appellees-cross-appellants.
Appeals from the United States District Court for the District of Oregon; Malcolm F. Marsh, District Judge, Presiding. D.C. Nos. CV-91-00954-MA, CV-93-01013-MA, CV-93-00097-MA, CV-92-00915-MFM, CV-85-02102-MA and CV-92-00915-MA.
Before: FERNANDEZ, RYMER, and TASHIMA, Circuit Judges.
Union Pacific Railroad Company, Oregon Short Line Railroad Company and Oregon-Washington Railroad and Navigation Company (collectively "the Railroads"), 1 brought a number of actions against the Department of Revenue of the State of Oregon and the State of Oregon (collectively "the State") in which the Railroads sought declaratory and injunctive relief under § 306 of the Railroad Revitalization and Regulatory Reform Act (4-R Act). See 49 U.S.C. § 11501. After years of litigation the State moved the district court to dismiss for lack of subject matter jurisdiction. The State argued that in light of the Supreme Court's decision in Seminole Tribe v. Florida, 517 U.S. 44, 71-72, 116 S.Ct. 1114, 1131, 134 L.Ed.2d 252 (1996), it was immune under the Eleventh Amendment to the United States Constitution. The district court denied the motion and entered judgment against the State. The Railroads disputed the district court's ruling that they must pay Oregon's statutory interest rate, rather than the lower federal interest rate, on disputed taxes which had not previously been paid into escrow accounts. Both the State and the Railroads appealed. We affirm.
The Railroads filed a number of actions against the State in which they alleged that the State had discriminated against them by overvaluing their rail transportation property and further discriminated in assessing the taxes on that property by using 100% of the property's true market value, rather than the 88% of true market value which was applied to other commercial and industrial property in Oregon.
The actions were brought pursuant to § 306 of the 4-R Act. See 49 U.S.C. § 11501. 2 These claims were tried before a magistrate judge in September of 1991, and the district court adopted the magistrate judge's findings of fact and conclusions of law and entered a judgment on the claims on September 2, 1992. Another claim regarding the personal property tax had been bifurcated and awaited final resolution at some later time. That claim, therefore, remained open, and the court did not direct the entry of judgment pursuant to Federal Rule of Civil Procedure 54. Meanwhile, litigation related to the Railroads' personal property claim was wending its way through the courts, and was finally disposed of when we issued our decision regarding the interest rate that had to be paid by the Railroads on tax monies which had been kept in escrow accounts rather than actually turned over to the State. See MHC, Inc. v. Oregon Dep't of Revenue, 66 F.3d 1082 (9th Cir.1995). In MHC, we held that the State could not collect 16% interest on the funds that had been deposited in the escrow account, and that it was limited to the lower federal interest rate on money judgments On April 8, 1996, after the MHC ruling came down, the district court held a conference with the parties regarding this litigation. Because the Railroads had paid the 16% statutory interest rate when the escrow accounts were disbursed, the State owed them a refund. The Railroads informed the court that they were dismissing all of the claims still at issue. Both parties also reported an agreement on the procedure to be used in performing interest calculations in compliance with MHC. The district court set a "final paper call" for June 14, 1996.
provided by 28 U.S.C. § 1961. See id, at 1090-91.
However, events were then outstripping this litigation because on March 27, 1996, the Supreme Court had decided Seminole Tribe. Based upon that decision, the State filed its motion to dismiss this action on April 22, 1996, because, it argued, it had Eleventh Amendment immunity from suit under the 4-R Act and the court had "no jurisdiction to hear further proceedings.". 3 The district court denied the motion because, it declared, the State had waived its immunity and Seminole Tribe should not apply retroactively to this case.
The reserved personal property issues, however, still remained unresolved. They were finally decided when the district court ruled that the Railroads were entitled to interest from the State on amounts that they had overpaid, but that the Railroads were not entitled to relief from Oregon's 16% interest rate on taxes that they had not paid or escrowed at all. A final judgment was entered on December 3, 1996, and this appeal followed.
Unless the Eleventh Amendment precludes it, the district court had jurisdiction pursuant to 28 U.S.C. § 1331 and 49 U.S.C. § 11501(c). We have jurisdiction pursuant to 28 U.S.C. § 1291.
"Whether a state is immune from suit under the Eleventh Amendment is a question of law and is reviewed de novo." Micomonaco v. Washington, 45 F.3d 316, 319 (9th Cir.1995). Similarly, we will review the legal issues regarding the appropriate interest rate to apply to unpaid taxes de novo. Cf. MHC, 66 F.3d at 1090-91 ().
In § 11501(b), Congress declared that certain actions "unreasonably burden and discriminate against interstate commerce, and a State, subdivision of a State, or authority acting for a State or subdivision of a State may not do any of them...." It then went on to provide that "[n]otwithstanding section 1341 of title 28 [the Anti-injunction Act] and without regard to the amount in controversy or citizenship of the parties, a district court of the United States has jurisdiction, concurrent with other jurisdiction of courts of the United States and the States, to prevent a violation of subsection (b) of this section." 49 U.S.C. § 11501(c). There is no dispute that Congress truly intended to confer jurisdiction upon the district courts in actions against states for the purpose of precluding the discrimination which Congress had found. Cf. ACF Indus., Inc. v. Department of Revenue, 961 F.2d 813, 816 (9th Cir.1992), rev'd on other grounds, 510 U.S. 332, 114 S.Ct. 843, 127 L.Ed.2d 165 (1994). The major issue before us is whether, in light of Seminole Tribe, Congress could constitutionally do so. If it could, we can go on to decide the subsidiary interest rate issue raised by the Railroads.
The Eleventh Amendment provides that "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." Of course, that means that neither citizens of other states nor a state's own citizens can sue it in federal court. See Idaho v. Coeur The Railroads first challenge the State's claim that the district court had no jurisdiction by pointing to the waiver exception, and then go on to argue that Seminole Tribe should not be applied to this case at all. We must first decide whether these non-constitutional grounds uphold the district court's decision and will only turn to the constitutional challenge, if these grounds fail. See Jean v. Nelson, 472 U.S. 846, 854, 105 S.Ct. 2992, 2997, 86 L.Ed.2d 664 (1985); Meinhold v. United States Dep't of Defense, 34 F.3d 1469, 1474 (9th...
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