Rosewell v. Salle National Bank

Decision Date24 March 1981
Docket NumberNo. 79-1157,79-1157
Citation101 S.Ct. 1221,450 U.S. 503,67 L.Ed.2d 464
PartiesEdward J. ROSEWELL, etc., et al., Petitioners, v. LaSALLE NATIONAL BANK, Trustee, etc
CourtU.S. Supreme Court

Under an Illinois statute, real property owners who contest their property taxes are required first to exhaust their available administrative remedy and, if unsuccessful, are then afforded a legal remedy requiring the payment of the taxes under protest and a subsequent state-court challenge. The customary delay from the time of payment until the receipt of refund upon successful protest is two years, and the refund is not accompanied by a payment of interest. The beneficial owner of an apartment building in Cook County, Ill., challenged the tax assessment of her property for a certain tax year, but, after an unsuccessful administrative appeal, refused to pay the taxes and instead brought an action in Federal District Court for injunctive relief against petitioners (the Treasurer and Assessor of Cook County), alleging, inter alia, that by requiring her to pay taxes in excess of the lawful amount, they deprived her of equal protection and due process secured by the Fourteenth Amendment. The District Court dismissed the complaint for want of jurisdiction pursuant to the Tax Injunction Act, which prohibits federal district courts from enjoining the assessment, levy, or collection of state taxes where "a plain, speedy and efficient remedy may be had in the courts of such State." The Court of Appeals reversed, holding that the Tax Injunction Act did not bar federal district court jurisdiction because Illinois' procedure of no-interest refunds after two years was not "a plain, speedy and efficient remedy."

Held : The Illinois refund procedure is "a plain, speedy and efficient remedy" within the meaning of the Tax Injunction Act, thereby barring federal jurisdiction to grant injunctive relief. Pp. 512-528.

(a) The language of the "plain, speedy and efficient remedy" exception appears to require a state-court remedy that meets certain minimal procedural criteria, and the Tax Injunction Act's legislative history supports this procedural interpretation. Here, the Illinois state-court refund procedure provided the taxpayer with a "full hearing and judicial determination" at which she might raise any and all constitutional objections to the taxes, and review was authorized in the higher Illinois courts and ultimately could be obtained in this Court. She did not allege any procedural defect in the Illinois remedy, other than delay, that would preclude preservation and consideration of her federal rights, but rather alleged that Illinois' failure to pay interest on the tax refund made the remedy not "plain, speedy and efficient." Any "federal right" she might have to receive interest could be asserted in the state-court legal proceeding. Pp. 512-515.

(b) With respect to whether the Illinois remedy was "plain," respondent has not alleged that the remedy is uncertain or otherwise unclear. There is no question that under the Illinois procedure, the court will hear and decide any federal claim; paying interest or eliminating delay would not make the remedy any more "plain." Pp. 516-517.

(c) Because the Illinois remedy imposes no unusual hardship on the taxpayer requiring ineffectual activity or an unnecessary expenditure of time or energy, it cannot be said that it is not "efficient." Pp. 517-518.

(d) Assessing the 2-year delay in receiving a refund against the usual time for similar litigation, such delay is not unusual and, under the circumstances of this case, did not fall outside the boundary of a "speedy" remedy. Pp. 518-521.

(e) The Tax Injunction Act's overall purpose to limit drastically federal district court jurisdiction to interfere with so important a local concern as the collection of taxes is consistent with the view that the "plain, speedy and efficient remedy" exception to the Act's prohibition was only designed to require that the state remedy satisfy certain procedural criteria, and that Illinois' refund procedure meets such criteria. It would be unreasonable to construe a statute passed with such a purpose to mean that Congress nevertheless wanted taxpayers from States not paying interest on refunds to have unimpaired access to the federal courts. If Congress had meant to carve out such an expansive exception, some mention of it would be expected and there is none. Pp. 522-524.

(f) Although the Tax Injunction Act had its roots in federal equity practice, nevertheless, where it appears that not every wrinkle of such practice was codified intact, but rather that Congress, among other things, legislated to solve an existing problem by cutting back federal equity jurisdiction, the Act will not be interpreted to incorporate that portion of federal equity practice arguably viewing a no-interest refund remedy as inadequate. Pp. 524-526.

(g) The reasons supporting federal noninterference with state tax administration—such as the dependency of state budgets on the receipt of local tax revenues and the havoc that would be caused if federal injunctive relief against collection of state or local taxes were widely available—are just as compelling today as they were in 1937 when the Tax Injunction Act was passed. Pp. 527-528.

604 F.2d 530, reversed.

Henry A. Hauser, Chicago, Ill., for petitioners.

James L. Fox, Chicago, Ill., for respondent.

Justice BRENNAN delivered the opinion of the Court.

The Tax Injunction Act of 1937 provides that "[t]he 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." 28 U.S.C. § 1341. The question we must decide in this case is whether an Illinois remedy which requires property owners contesting their property taxes to pay under protest and if successful obtain a refund without interest in two years is "a plain, speedy and efficient remedy" within the meaning of the Act.1


LaSalle National Bank is trustee of a land trust for Patricia Cook,2 the beneficial owner of property improved with a 22-unit apartment building in the all-black low-income community of East Chicago Heights, Ill., located in Cook County.3 Respondent alleged that, as of January 1, 1977, her property had a fair market value of $46,000. In accordance with a Cook County ordinance, her property should have been assessed for property tax purposes at 33% of fair market value—$15,180.4 Instead, for the 1977 tax year, the County Assessor assessed the property at $52,150. As a result, respondent's property tax liability was $6,106 instead of $1,775, an overcharge of $4,331.

Respondent also claimed that the County Assessor "knowingly as official policy or governmental custom maintained, adopted or promulgated policy statements, regulations, decisions and systems of assessment which have produced egregious disparities in assessments throughout the County." Plaintiff's Complaint ¶ 11, App. 7. In particular, she cited a study of the Illinois Department of Local Government Affairs showing that, for 1975, property in the same class as respondent's was assessed as low as 3% and as high as 973% of fair market value. She furthermore alleged that such disparities in assessments were "far greater in number and size in older, inner city and county areas, owned, inhabited or used to a larger extent by minorities and poorer people." Ibid. Finally, she contended that the Assessor knew that she had previously challenged the 1974, 1975, and 1976 assessments of her property.5 Respondent first exhausted her administrative remedy by appealing unsuccessfully for a correction of her 1977 assessment before the Cook County Board of Appeals. Ill.Rev.Stat., ch. 120, §§ 594(1), 596, 597, 598, 599 (1977).6 Her only remaining state remedy was to pay the contested tax under protest, and then to file an objection to the Cook County Collector's Application for Judgment before the Circuit Court of Cook County—in effect a reverse suit for refund.7 §§ 675, 716. Although Illinois' statutory refund procedure could theoretically provide a final resolution of the dispute within one year of payment of the tax under protest,8 respondent alleged that the customary delay from the time of payment until the receipt of refund upon successful protest is two years.9 The tax refund is not accompanied by a payment of interest.10 Clarendon Associates v. Korzen, 56 Ill.2d 101, 109, 306 N.E.2d 299, 303 (1973); Lakefront Realty Corp. v. Lorenz, 19 Ill.2d 415, 422-423, 167 N.E.2d 236, 240-241 (1960).

Respondent refused to pay her 1977 property taxes and instead brought this 42 U.S.C. § 1983 action in the United States District Court for the Northern District of Illinois, seeking preliminary and permanent injunctive relief to prevent petitioner Rosewell 11 from publishing an advertisement of notice and the intended date of Application for Judgment, from applying for judgment and order of sale against her property, and from selling it. Respondent contended that, by requiring payment of taxes 31/2 times the lawful amount, petitioners deprived her of equal protection and due process secured by the Fourteenth Amendment of the United States Constitution, and violated state constitutional and statutory rights as well. Respondent further alleged that she had no plain, speedy and efficient remedy in the Illinois courts.

Petitioners moved to dismiss, claiming that actions challenging state tax assessments are not cognizable under 42 U.S.C. § 1983 and 28 U.S.C. § 1343,12 and that Illinois' statutory refund procedure is a plain, speedy, and efficient remedy even though it fails to pay interest. Defendants' Motion to Dismiss, App. 11.

The District Court denied respondent's motion for a preliminary injunction and dismissed the complaint for want of jurisdiction under 28...

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