Osceola v. Florida Dept. of Revenue

• Decision Date: 06 February 1990
• Docket Number: No. 89-5234,89-5234
• Citation: 893 F.2d 1231
• Parties: Judybill OSCEOLA, et al enrolled member of the Seminole Indian Tribe of Florida and all others similarly situated, Plaintiff-Appellant, v. FLORIDA DEPARTMENT OF REVENUE, Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1231

893 F.2d 1231

Judybill OSCEOLA, et al enrolled member of the Seminole Indian Tribe of Florida and all others similarly situated, Plaintiff-Appellant, v. FLORIDA DEPARTMENT OF REVENUE, Defendant-Appellee.

No. 89-5234.

United States Court of Appeals Eleventh Circuit.

Feb. 6, 1990.

Barbara L. Wolf, P.A., Ft. Lauderdale, Fla., for plaintiff-appellant.

Joseph C. Mellichamp, III, Asst. Atty. Gen., Tax Section, Eric J. Taylor, Tallahassee, Fla., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before HATCHETT and COX, Circuit Judges, and HENDERSON, Senior Circuit Judge.

HATCHETT, Circuit Judge.

In this appeal, an individual Seminole Indian, who is not a tribe representative or official, asserts that the district court erred in ruling that 28 U.S.C. Sec. 1362, which provides federal question jurisdiction for Indian tribes, does not also serve as an exception to the bar of the Tax Injunction Act (28 U.S.C. Sec. 1341). We affirm.

FACTS

Judybill Osceola brought this action as an alleged class representative of all Florida Seminole Indians ("appellants"). Osceola filed this lawsuit in her individual capacity and not as an official of a recognized tribal government. She alleged that the state of Florida unconstitutionally collected sales tax and franchise tax on the purchase of vehicles, motor homes, goods and materials, telephone services, electrical services, propane gas service, and similar items purchased off the reservations but delivered or taken to Osceola's residence on the reservation. Osceola sought declaratory relief, injunctive relief, and damages in the form of a refund of tax payments erroneously assessed by the state of Florida ("state") from 1956 to the present.

PROCEDURAL HISTORY

Osceola sought recovery under 28 U.S.C. Sec. 1331, 28 U.S.C. Sec. 1343, 42 U.S.C. Sec. 1983, and the commerce clause. The state moved to dismiss the complaint alleging that the Tax Injunction Act (28 U.S.C. Sec. 1341) and the eleventh amendment to the United States Constitution barred such an action. The district court granted the state's motion to dismiss and denied Osceola's motion for class certification because the issue was moot. 705 F.Supp. 1552. The district court held that Osceola, an individual, could not invoke jurisdiction under the provisions of 28 U.S.C. Sec. 1341. The district court also held that Osceola did not establish jurisdiction under any of the other independent statutory grounds. Alternatively, the district court held that the eleventh amendment barred the lawsuit.

CONTENTIONS

Osceola contends that the Tax Injunction Act is not a bar to this lawsuit, and thus the district court erred when it dismissed the case for lack of jurisdiction. She also contends that the district court has subject matter jurisdiction under 28 U.S.C. Sec. 1331, 28 U.S.C. Sec. 1343(3), 42 U.S.C. Sec. 1983, the Commerce clause of the United States Constitution, and binding case law.

The state contends that the Tax Injunction Act bars the district court from hearing a lawsuit brought by an individual Indian challenging the constitutionality of a state's sales tax.

ISSUE

The issue is whether the Tax Injunction Act bars individual Indians from bringing a lawsuit in federal court challenging the constitutionality of a state's sales tax. ¹

DISCUSSION

Section 1341 of Title 28 of the United States Code ("Tax Injunction Act" or "the 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." The Act does not confer jurisdiction, but instead limits jurisdiction which might otherwise exist. May v. Supreme Court of Colorado, 508 F.2d 136 (10th Cir.1974), cert. denied, 422 U.S. 1008, 95 S.Ct. 2631, 45 L.Ed.2d 671 (1975). The Tax Injunction Act was intended to prevent taxpayers from using federal courts to Unless this case fits within a recognized exception, the Tax Injunction Act clearly bars federal courts from maintaining jurisdiction under the circumstances present in this case.

raise questions of state or federal law relating to the validity of particular taxes. Wells v. Malloy, 510 F.2d 74 (2d Cir.1975). After passage of the Act, a taxpayer must follow required state procedure and is generally deprived of access to federal courts to obtain determination of federal issues. Geo. F. Alger Co. v. Peck, 347 U.S. 984, 74 S.Ct. 853, 98 L.Ed. 1120 (1954). While the Act on its face bars injunctive relief, it has been judicially expanded to include suits for declaratory relief. California v. Grace Brethren Church, 457 U.S. 393, 102 S.Ct. 2498, 73 L.Ed.2d 93 (1982); Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 63 S.Ct. 1070, 87 L.Ed. 1407 (1943). The Act has also been applied to actions for damages, including suits for the refund of tax assessments made by a state. Rosewell v. LaSalle Nat. Bank, 450 U.S. 503, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981); Fair Assessment in Real Estate Ass'n. Inc. v. McNalry, 454 U.S. 100, 102 S.Ct. 177, 70 L.Ed.2d 271 (1981); Bland v. McHann, 463 F.2d 21 (5th Cir.1972), cert. denied, 410 U.S. 966, 93 S.Ct. 1438, 35 L.Ed.2d 700 (1973); The Assiniboine & Sioux Tribes v. Montana, 568 F.Supp. 269 (D.Mont.1983).

The state correctly argues that Florida provides a "plain, speedy, and efficient remedy." The Florida constitution grants to the state's circuit courts jurisdiction to hear challenges to any state tax. Fla. Const. art. V, Sec. 20(c)(3). Florida courts are also given power to issue declaratory and injunctive relief in tax cases. See Fla.Stat.Ann. Sec. 72.011 (West Supp.1988) and Sec. 86.011 (West 1987). Furthermore, a Florida taxpayer has the statutory right to seek a tax refund from the state. Fla.Stat.Ann. Sec. 215.26 (West 1971). The Florida Supreme Court has held that this statute (Sec. 215.26) authorizes the refund of taxes paid under an unconstitutional law. State ex rel. Hardaway Contracting Co. v. Lee, 155 Fla. 724, 21 So.2d 211 (1945). Moreover, this circuit has held that the Florida tax remedies are "plain, adequate, and complete." See Winicki v. Mallard, 783 F.2d 1567, 1570 (11th Cir.), cert. denied, 479 U.S. 815, 107 S.Ct. 70, 93 L.Ed.2d 27 (1986).

Recognizing the applicability of the Tax Injunction Act, Osceola's principal argument is that federal jurisdiction can be invoked under what has become known as "the instrumentality exception." Department of Employment v. United States, 385 U.S. 355, 87 S.Ct. 464, 17 L.Ed.2d 414 (1966). This exception provides that the jurisdictional barrier of 28 U.S.C. Sec. 1341 is "inapplicable to suits brought by the United States 'to protect itself and its instrumentalities from unconstitutional state exactions.' " Moe v. Confederated Salish & Kooteani Tribes, 425 U.S. 463, 470, 96 S.Ct. 1634, 1640, 48 L.Ed.2d 96 (1976) (citations omitted). The federal instrumentalities doctrine establishes "that Sec. 1341 does not act as a restriction upon suits by the United States to protect itself or its instrumentalities from unconstitutional state action." Dept. of Employment v. United States, 385 U.S. at 358, 87 S.Ct. at 467. Thus, under the instrumentalities exception, a plaintiff is not required to follow state procedures and remedies before invoking the jurisdiction of the federal courts.

Indian lands have long been regarded as an instrumentality of the United States; thus, the United States can enjoin state taxation of Indian lands. See Moses v. Kinnear, 490 F.2d 21 (9th Cir.1973). The federal instrumentality doctrine has also been used to defeat the jurisdictional bar of section 1341 in cases where a party, other than the United States, files a lawsuit challenging the constitutionality of a state's taxing scheme.

Osceola argues that the federal instrumentality exception, as modified by the co-plaintiff's doctrine, applies to suits brought by individual Indians. See Mescalero Apache Tribe v. Jones, 411 U.S. 145, 93 S.Ct. 1267, 36 L.Ed.2d 114 (1973); see also Moses, 490 F.2d 21 (9th Cir.1973) (instrumentality doctrine applies where suit could have been brought by the United States While the exceptions to section 1341 have been expressed most often in terms of the federal instrumentality doctrine, we do not view the exceptions as limited to cases where this doctrine is clearly applicable. It seems clear [that section 1341] does not bar federal court jurisdiction in cases where immunity from state taxation is asserted on the basis of federal law with respect to persons or entities in which the United States has a real and significant interest.

and is in fact brought by parties who could properly be co-plaintiffs with the United States). Osceola also argues that Confederated Salish & Kooteani Tribes v. Moe, 392 F.Supp. 1297 (D.Mont.1975) aff'd, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976), allows her access to federal courts. Moe involved a consolidated appeal by an Indian tribe and also by class representatives of individual tribe members. A special three-judge district court panel accepted jurisdiction based on the federal instrumentality doctrine. The district court concluded:

Moe, 392 F.Supp. at 1303. The Supreme Court affirmed the district court, holding that, notwithstanding the provisions of 28 U.S.C. Sec. 1341 prohibiting a federal district court from enjoining the assessment of any state tax where an adequate remedy may be had in state courts, the district court had jurisdiction under 28 U.S.C. Sec. 1362. Moe v. Confederated Salish & Kooteani Tribes, 425 U.S. 463, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976). Relying on the district court's reasoning and the Supreme Court's affirmance, Osceola argues that 28 U.S.C. Sec. 1341 is not a bar to suits brought by individual Indians where the United States has a real and significant interest.

Osceola's reliance on Moe is misplaced. Although the Moe Court affirmed the district...