Smith v. Travis County Educ. Dist., Civ. No. A-92-CA-75

CourtUnited States District Courts. 5th Circuit. Western District of Texas
Citation791 F. Supp. 1170
Decision Date01 May 1992
PartiesColeman H. SMITH, et al. v. TRAVIS COUNTY EDUCATION DISTRICT, et al. CONNELL ESTATES, et al. v. TRAVIS COUNTY EDUCATION DISTRICT, et al.
Docket NumberCiv. No. A-92-CA-75,A-92-CA-81.

791 F. Supp. 1170

Coleman H. SMITH, et al.
v.
TRAVIS COUNTY EDUCATION DISTRICT, et al.
CONNELL ESTATES, et al.
v.
TRAVIS COUNTY EDUCATION DISTRICT, et al.

Civ. Nos. A-92-CA-75, A-92-CA-81.

United States District Court, W.D. Texas, Austin Division.

May 1, 1992.


791 F. Supp. 1171
COPYRIGHT MATERIAL OMITTED
791 F. Supp. 1172
COPYRIGHT MATERIAL OMITTED
791 F. Supp. 1173
James H. Keahey, Austin, Tex., for Coleman H. Smith, and all other taxpayers in Texas similarly situated

Mark L. Perlmutter, law offices of Mark L. Perlmutter, Frank Powell, Powell & Associates, Austin, Tex., for The Connell Estates, Nations Bank, N.A., Giles W. Dalby, Elizabeth Dalby Elliott, Rebecca Dalby

791 F. Supp. 1174
Whitmire, Alan B. Connell, Jr., Lee D. Vendig, Sara S. Jackson, Mary S. Forbes, Paul G. Spining, Jr., Colleen Spining, Sara Jane Spining Caswell, Richard Lawrence Spining, Jr., Shannon Ann Spining, James D. Howell, Heidi Dole Howell, Mathew Andre Howell, Giles C. McCrary, Louise McCrary, Mary McCrary Brewer, Craig Wallace, CPR Energy, Hattie Bess Park, Alan B. Connell, George W. Spining, Ruth N. Spining, Paul G. Spining, III, Robert C. Park, Harry M. Park, Jr., Stephenville Bank and Trust, Mary Park Lilly, John Lott, Ryla T. Lott, John F. Lott, Jr., Patricia Lott Kirkpatrick, 4JK, Inc., LLB, Inc., Pollard & Lott, Inc., M. Frank Powell, Lee D. Vendig, Michael H. Shelby, Jeanne F. Shelby, Jeanne F. Shelby Agency, Patrick B. Shelby, New Waskom Gas Gathering, Inc., Robert B. Payne, Jr., and all consol. plaintiffs

William H. Bingham, McGinnis, Lochridge & Kilgore, Austin, Tex., for Travis County Educ. Dist., et al.

Toni Hunter, Atty. General's Office, Austin, Tex., for Dan Morales.

James R. Raup, McGinnis, Lochridge & Kilgore, Austin, Tex., for County Educ. Dist. No. 11.

William M. Buechler, Henslee, Ryan & Groce, Austin, Tex., for County Educ. Dist. No. 24, Coleman County Educ. Dist., Collin County Educ. Dist., County Educ. Dist. No. 26, County Educ. Dist. No. 31.

John Pierce Griffin, Nichols, Jackson, Kirk & Dillard, Austin, Tex., for Dallas County Educ. Dist.

Earl Luna, Dallas, Tex., for Denton County Educ. Dist.

D. Kirk Swinney, Roy L. Armstrong, McCreary, Veselka, Bragg & Allen, Austin, Tex., for Runnells County Educ. Dist.

John Crumpton Hardy, III, Hardy & Atherton, Tyler, Tex., for Smith County Educ. Dist.

ORDER

NOWLIN, District Judge.

The basic issue before this Court is whether a federal court can and should enjoin the collection of taxes under a tax system that violates the state's own constitution, where the state's own highest court, although holding the tax system unconstitutional, further declared that the declaration of unconstitutionality under the state constitution cannot be used as a defense by taxpayers to avoid payment or to seek refunds of taxes due and that will be due in the future under the unconstitutional system.

I. The Background of This Issue

In its most recent opinion relating to the school finance system, the Texas Supreme Court provides a detailed discussion of the controversy and the litigation that has occurred and continues to occur with respect to public education in the State of Texas. See Carrollton-Farmers Branch Indep. Sch. Dist. v. Edgewood Indep. Sch. Dist., 826 S.W.2d 489, 494-99 (Tex.1992) ("Edgewood III"). Twice before Edgewood III, The Texas Supreme Court had addressed the State's school finance system. See generally: Edgewood Independent School District v. Kirby, 777 S.W.2d 391 (Tex. 1989) ("Edgewood I"); and 804 S.W.2d 491 (Tex.1991) ("Edgewood II"). The Edgewood III decision pertains directly to the present cause of action.

In Edgewood III, the main issue before the Texas Supreme Court was whether the current school finance system, as created by Senate Bill 351, was constitutional under the State Constitution. Edgewood III, at 493. Numerous school districts and individual citizens challenged the state constitutionality of this system. Id. The State of Texas and other school districts and citizens argued that the most recent enactment by the State legislature was constitutional under the State constitution. Id. Most, and practically all, of the taxpayers in this suit were not before the Texas Supreme Court in Edgewood III, but the effect of the Edgewood III decision was upon all of the property taxpayers in the state. The Texas Supreme Court held that this legislative enactment violated two separate provisions of the State constitution. Id. at 493. The Texas Supreme Court summarized

791 F. Supp. 1175
the school finance system created by Senate Bill 351
... Senate Bill 351 retains the same historical reliance upon local ad valorem taxes to fund most of the state cost of education. To ameliorate disparities among school districts due to local property wealth, Senate Bill 351 creates 188 county education districts. Most of these CEDs consist of school districts in a single county, although some of them include school districts in more than one county. CEDs have only tax functions; they perform no educational duties.... CEDs do not even determine their own tax rate. The rate is effectively prescribed by statute.... The CEDs sole function is to levy, collect, and distribute property taxes as directed by the Legislature.
There is an overall "revenue limit" for local school districts, defined as an amount equal to 110 percent of the state and local funds guaranteed ... per student to each school district taxing at a specified rate.... This limit does not appear to be uniform, comprehensive or absolute.... It is not a single amount which applies equally to all school districts, nor does it encompass all local revenues, nor does it absolutely bar transgression. Each district evidently has its own revenue limit, annually estimated by and certified to that district by the commissioner of education.
Finally, the commissioner of education determines the State's share of the costs of ... by subtracting what the district is due from the CED funds and what the district has collected from state available school funds. The commissioner then grants and approves a warrant for the difference. If state appropriations prove insufficient, however, the commissioner will reduce each district's allocation.
Thus, since Edgewood I, some aspects of the public school system have been changed, but others have not.... The State has moved from encouraging school districts to contribute local tax revenue, to conditioning state funds on such contribution, to mandating a specified contribution.... It has accomplished this, however, by requiring the taxpayers in one school district, without a vote of approval, to fund the schools in other districts over which they have no control. These changes present the constitutional issues now before us.

Edgewood III, at 498-99 (citations and footnotes omitted).1

791 F. Supp. 1176

II. The Parties and Issues of this Case

Various taxpayers affected by this tax system created by Senate Bill 351 seek injunctive and declaratory relief regarding the taxes due for the 1992 year. These taxpayers also seek declaratory relief regarding the taxes due and paid for the 1991 year. This court has previously certified this action as a class action with respect to the plaintiffs and the defendants. As a practical matter, the plaintiffs face a state remedy that is unavailing and a dilemma that procedurally is so tangled as to make Gordian's Knot look like a simple square knot. As Alexander's sword remedied Alexander's own dilemma, the United States Constitution provides the plaintiffs with a remedy.2 Because of the complexities and seriousness of the issues involved in this case, a detailed discussion of the legal principles is warranted.

A. Jurisdictional Issues

The defendant County Education Districts and the defendant-intervenors Texas Education Agency and the Attorney General of the State of Texas raise numerous jurisdictional arguments that this Court either lacks jurisdiction to hear these causes of action or should abstain from hearing these causes of action. This Court will address all of the issues raised by the defendants.

If the Court finds that this action is not barred by 28 U.S.C. § 1341, then this Court has jurisdiction to hear this cause of action under the general federal jurisdiction statute and under the more specific civil rights jurisdiction statute. 28 U.S.C. Section 1331 states:

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

28 U.S.C. § 1331. More specifically, 28 U.S.C. Section 1343 states in pertinent part that:

(a) The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person:
... (3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States; ....

28 U.S.C. § 1343. Under the jurisdiction conferred by 28 U.S.C. § 1343(a)(3), there is no distinction between personal liberties and property rights. Lynch v. Household Finance Corporation, 405 U.S. 538, 542-543, 92 S.Ct. 1113, 1117, 31 L.Ed.2d 424 (1972).

The Fifth Amendment to the Constitution of the United States guarantees in pertinent part that:

... nor shall any person ... be deprived of life, liberty, or property, without due process of law; ...

U.S. Const. Amend. 5. The Fourteenth Amendment of the United States Constitution states in pertinent part:

Section 1.... No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

U.S. Const...

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2 practice notes
  • City of Houston v. Harris County Outdoor Advertising Ass'n, No. A14-92-01123-CV
    • United States
    • Court of Appeals of Texas
    • June 16, 1994
    ...of taxes, including one that violates state law or provisions of the state Constitution. See Smith v. Travis County Educ. Dist., 791 F.Supp. 1170, 1178 n. 5 (W.D.Tex.), vacated on other grounds, 968 F.2d 453 (5th Cir.1992). [emphasis in original] Despite the fact that appellees were require......
  • Smith v. Travis County Educ. Dist., No. 92-8244
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • August 3, 1992
    ...that the public interest in the education of children outweighed the injury to the taxpayers resulting from the due process violation. 791 F.Supp. 1170, The taxpayers argue that the district court erred in refusing to award injunctive relief. On cross-appeal, the defendants contend that the......
2 cases
  • City of Houston v. Harris County Outdoor Advertising Ass'n, No. A14-92-01123-CV
    • United States
    • Court of Appeals of Texas
    • June 16, 1994
    ...of taxes, including one that violates state law or provisions of the state Constitution. See Smith v. Travis County Educ. Dist., 791 F.Supp. 1170, 1178 n. 5 (W.D.Tex.), vacated on other grounds, 968 F.2d 453 (5th Cir.1992). [emphasis in original] Despite the fact that appellees were require......
  • Smith v. Travis County Educ. Dist., No. 92-8244
    • United States
    • United States Courts of Appeals. United States Court of Appeals (5th Circuit)
    • August 3, 1992
    ...that the public interest in the education of children outweighed the injury to the taxpayers resulting from the due process violation. 791 F.Supp. 1170, The taxpayers argue that the district court erred in refusing to award injunctive relief. On cross-appeal, the defendants contend that the......

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