Southern Pacific Company v. DeWitt
| Decision Date | 02 July 1968 |
| Docket Number | No. CIV. 6669 Phx.,CIV. 6669 Phx. |
| Citation | 288 F. Supp. 570 |
| Parties | SOUTHERN PACIFIC COMPANY, a corporation; the Atchison, Topeka and Santa Fe Railway Company, a corporation; Pacific Fruit Express Company, a corporation, Plaintiffs, v. L. Waldo DEWITT, John M. Hazelett and Robert A. Kennedy, Individually and as members of and constituting the State Tax Commission of the State of Arizona, et al., Defendants. |
| Court | U.S. District Court — District of Arizona |
Robert L. Pierce, San Francisco, Cal., Joseph S. Jenckes, Jr., of Evans, Kitchel & Jenckes, Phoenix, Ariz., for Southern Pacific Co. and Pacific Fruit Express Co.
C. George Niebank, Chicago, Ill., Philip E. von Ammon of Fennemore, Craig, von Ammon, McClennen & Udall, Phoenix, Ariz., for Atchison, Topeka and Santa Fe Railway Co.
Darrell F. Smith, Atty. Gen., James D. Winter and Stanley Z. Goodfarb, Phoenix, Ariz., Robert K. Corbin, County Atty., Maricopa County, Ariz., by Jane Greer and Olgerd W. Kalyna, special counsel, for defendants.
Before JERTBERG, Circuit Judge, and MUECKE and COPPLE, District Judges.
This action was brought by Southern Pacific Company; The Atchison, Topeka and Santa Fe Railway Company; and Pacific Fruit Express Company against the members of the Arizona State Tax Commission, the boards of supervisors, the assessors, and the treasurers of various counties,1 individually and in their official capacities. The state treasurer was not named as a defendant.
The plaintiffs seek to have Chapter 6, House Bill 1, Law of Arizona 1967, Third Special Session,2 and particularly ch. 6, § 3 thereof (A.R.S. § 42-227), declared invalid and unconstitutional to the extent it requires assessment of plaintiffs' properties at a different ratio of full cash value than that applied to the property of other carriers and utilities placed in "Class Two" and other carriers and other commercial and industrial enterprises placed in "Class Three" by this legislation. House Bill 1 also established new classifications of property for taxation (A.R.S. § 42-136) as set forth in Appendix "A".
The plaintiffs also seek to restrain and enjoin the assessing of their property, the fixing of the tax rates for the year 1968, and the collecting of the property taxes for the year 1968. At the same time plaintiffs filed their complaint, they also filed a Motion for Preliminary Injunction and request that a three-judge District Court be impaneled as provided by 28 U.S.C.A. § 2284. A three-judge court was so impaneled, and its impaneling as such is not and has not been at issue.
The defendants, however, have filed a Motion To Dismiss For Lack Of Jurisdiction on the basis of 28 U.S.C.A. § 13413 and the Eleventh Amendment to the United States Constitution.4
Although plaintiffs recognize that as a general rule, 28 U.S.C.A. § 1341 would bar this Court's jurisdiction5 plaintiffs allege that "a plain, speedy, and efficient remedy" may not be had in the State's courts. Paragraph XIV of the plaintiffs' complaint (pp. 12-15) sets forth their reasons for believing that they have no plain, speedy, and efficient remedy in the state courts of Arizona. These reasons were elaborated on by plaintiffs' brief, filed May 23, 1968, in opposition to defendants' motion to dismiss and by the oral argument heard by this Court on May 27, 1968.
Specifically, the plaintiffs allege that in the state courts:
1. There is no plain remedy because:
2. There is no speedy remedy because it would take many years to fully litigate the action to a final judgment in the state courts due to the courts' backlog of cases (pp. 10-11 of plaintiffs' brief in opposition to motion to dismiss).
3. There is no efficient remedy because the Arizona statutes make no provision for payment of judgments rendered against the State or any of its political subdivisions (pp. 11-17 of plaintiffs' brief in opposition to motion to dismiss).
Plaintiffs further alleged that the Eleventh Amendment to the United States Constitution did not prohibit this Court's taking jurisdiction, basing their contention essentially on Griffin v. County School Board of Prince Edward County (1964) 377 U.S. 213, 84 S.Ct. 1226, 12 L.Ed.2d 256.
A three-judge District Court having been properly convened pursuant to 28 U.S.C.A. §§ 2281 and 2284, briefs having been filed, and oral argument having been had on the defendants' Motion To Dismiss For Lack Of Jurisdiction, it is the unanimous decision of this Court that the defendants' motion to dismiss this action shall be granted.
It is the opinion of this Court that under the laws of the State of Arizona, a plain, speedy, and efficient remedy may be had by the plaintiffs in the courts of such state. This Court, therefore, is prohibited by the terms of 28 U.S.C.A. § 1341 from assuming jurisdiction. We need not consider the Eleventh Amendment question since our view of 28 U.S.C.A. § 1341 disposes of the matter.
In order to facilitate the full understanding of the case before this Court, some preliminary statements and observations must be made. The legislation under attack by the plaintiffs was enacted as a result of several decisions6 by the courts of Arizona.
An Arizona statute in effect at the time of the McCluskey, Southern Pacific, and Bade decisions (see footnote 6 for citations) provided:
A.R.S. § 42-227. (This statute was amended in 1967)
This statute (A.R.S. § 42-227) was completely disregarded by the county assessors. For many years the assessors assessed similar property at varying percentages of their full cash value, but always less than the full cash value. In each of the three cases cited above, the plaintiffs sought to enjoin the discriminatory assessment practice of the county assessors, and in each case the plaintiffs were successful.
Initially these three cases, together with a fourth case, Drachman v. Jay (1966) 4 Ariz.App. 70, 417 P.2d 704, deserve analysis insofar as they pertain to the adequacy or inadequacy of the remedy at law available to the plaintiff tax-payers in each of these cases, as contrasted with the equitable remedy provided by an injunction.
In McCluskey v. Sparks (1955) 80 Ariz. 15, 291 P.2d 791, it was alleged that the assessor systematically and intentionally undervalued the plaintiffs' property at a percentage less than full cash value, which percentage was nevertheless greatly in excess of the percentage of full cash value used for other like properties. The complaint stated that the assessed values of plaintiffs' properties were increased from 300 to 1600 percent over previous assessments, whereas the values of like or similar properties in the county were not increased. 80 Ariz. at 17, 291 P.2d at 792.
The plaintiffs had appeared before the county board of equalization seeking to have the values equalized, but the board approved the increases, saying the values were equitable in relation to the cash values of the properties. 80 Ariz. at 18, 291 P.2d at 793.
The county, in opposing the injunction sought in the McCluskey case, claimed the plaintiffs had an adequate remedy at law under the provisions of section 73-419, A.C.A.1939, which allowed an appeal to the superior court from the action of the county board of equalization when a taxpayer was dissatisfied with the amount of his assessment. The lower court agreed with the county and dismissed the case.
The Supreme Court, however, disagreed with the lower court and declared that § 73-419 must be considered in conjunction with section 73-110, A.C.A. 1939. The court in McCluskey pointed out that section 73-110, A.C.A.1939, provided that in appealing the board's determination to the superior court the plaintiff in such legal action may prove only the full cash value of the property in question. The trial court was limited by section 73-110 to finding the full cash value and rendering judgment for the payment of the tax on that basis, whether it be more or less than the value fixed by the taxing officials. 80 Ariz. at 19, 291 P.2d at 793.
The Arizona Supreme Court, in thus reversing the lower court, found the valuation applied to the plaintiffs' property to be unconstitutional and held that:
"Deliberate and systematic under-valuation of plaintiffs' property at a figure greatly in excess of the under-valuation of other like properties amounts to a violation of the Arizona Constitution, Article 9, Section 1, which requires that all taxes `shall be uniform upon the same class of property within the territorial limits of the authority levying the tax * * *' and offends the equal protection clause of the Fourteenth Amendment to the Constitution of the United States." McCluskey v. Sparks (1955) 80 Ariz. at 19, 291 P.2d at 793.
In reaching its decision, the McCluskey court reasoned:
"It is plain that when the issue to be tried is discrimination calling for proof of systematic and intentional disproportionate undervaluation, the appeal remedy prescribed by sections 73-419 and 73-110, supra, is no remedy at all for the reason that the issues concerning such a discrimination could not be tried and decided under the appeal remedy."...
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