Speer v. City of New London

Decision Date30 April 2021
Docket NumberCivil Action No. 3:20-cv-1928
CourtUnited States District Courts. 2nd Circuit. United States District Court (Connecticut)
PartiesSHERI SPEER, Plaintiff, v. CITY OF NEW LONDON Defendant.

SHERI SPEER, Plaintiff,

Civil Action No. 3:20-cv-1928


APRIL 30, 2021


HAIGHT, Senior District Judge:

In this action, removed pursuant to 28 U.S.C. § 1441 from Connecticut Superior Court, Plaintiff Sheri Speer ("Speer"), proceeding pro se, seeks a temporary restraining order or preliminary injunctive relief against Defendant City of New London (the "City" or "New London") pursuant to Rule 65 of the Federal Rules of Civil Procedure.1 See generally Doc. 9 ("Pl.'s Mot.").

Speer seeks to prevent New London from conducting involuntary tax auction sales of two properties she owns in the City pursuant to Conn. Gen. Stat. § 12-157, arguing that were such sales to take place under the State of Connecticut's COVID-19 rules—which have been implemented through various executive orders of Governor Ned Lamont—they would cause a taking under the Fifth Amendment to the federal Constitution. See id.; see also generally Doc. 1-1 at 3-10 ("Compl.").

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In opposition to Speer's motion, New London argues that a temporary restraining order or preliminary injunctive relief should not issue on the grounds that Speer's motion is either moot or not ripe, and that Speer has not shown, inter alia, that she lacks an adequate remedy at law or that she is likely to prevail on the merits. See generally Doc. 18 ("Def.'s Opp.").

The Court held oral argument on February 2, 2021 to consider the issues raised by the Parties. See generally Doc. 21 ("Hr'g Tr."). The Court subsequently directed the Parties to submit additional briefing addressing, inter alia, whether this Court lacks jurisdiction over this action under the Tax Injunction Act, 28 U.S.C. § 1341, or should decline to hear it under the related doctrine of comity. See Doc. 22.

For the reasons set forth below, the Court concludes that it lacks subject matter jurisdiction over this action, in light of the Complaint's prayers for declaratory and injunctive relief. Accordingly, the Court DENIES WITHOUT PREJUDICE Speer's pending motion for temporary injunction in this Court, DENIES AS MOOT Speer's motion to waive bond (Doc. 8), and REMANDS this case to the Connecticut Superior Court for the Judicial District of New London for any and all further proceedings.

I. Background

a. Connecticut's Non-Judicial Tax Sale Procedure

At the outset, it is useful to review Connecticut's statutory scheme permitting municipalities to sell taxpayers' properties involuntarily to collect delinquent taxes owed. Those statutes underlie the instant dispute.

Section 12-155 of the Connecticut General Statutes provides that if any person fails to pay any local tax due, a municipality's collector may make a demand, either in person or in writing, for payment of the tax owed, and may subsequently "enforce by levy and sale any lien

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or warrant upon real estate for any unpaid tax or levy upon and sell such interest of such person in any real estate as exists at the date of the levy for such tax." Conn. Gen. Stat. §§ 12-155(a), 12-155(b)(2). Once a municipal collector levies a warrant on a taxpayer's property, the collector must provide notice of the warrant and planned sale of the property in the manner prescribed by statute, including such details as "the name of the taxpayer, a legal description of the real property . . . the amount of the tax or taxes due, including any interest and charges . . . as of the last day of the month immediately preceding the notice, a statement that additional taxes, interest, fees . . . accruing after the last day of the month immediately preceding the notice are owed in addition . . . and the date, time and place of sale." Conn. Gen. Stat. § 12-157(a). This notice must be posted publicly, recorded by the municipal clerk as part of the land records of the municipality, and sent by certified mail to the taxpayer and any mortgagee or lienholder whose interest will be affected by the sale. Id. This posting, filing, and mailing must take place not more than twelve weeks and not less than nine weeks before the planned sale. Id. Further notice of the warrant and sale must be published in a newspaper circulating in the municipality at specified times. Id. Notices similar to the newspaper notices also must be delivered to the taxpayer and other interest holders. Id.

After notices have been posted, published, and sent in the manner prescribed by statute, and at the time set forth by those notices (or at the time to which the sale has been adjourned),2 the collector "(1) may sell at public auction to the highest bidder all of said real property, to pay the taxes with the interest, fees and other charges allowed by law . . . or (2) may sell all of said real property to his municipality if there has been no bidder or the amount bid is insufficient to

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pay the amount due." Conn. Gen. Stat. § 12-157(c). Under ordinary circumstances, the conduct of the auction largely is left to the discretion of the collector organizing it:

The tax collector may publish or announce any rules for the orderly conduct of the auction and the making of payment by successful bidders which are not inconsistent with the requirements of law. The tax collector or the municipality may retain the services of auctioneers, clerks and other persons to assist the tax collector in the conduct of the sale and the cost of such persons paid for their services shall be added to the taxes due from the delinquent taxpayer. If more than one property is sold, the tax collector shall apportion all shared costs equally among all the properties.

Conn. Gen. Stat. § 12-157(d). If the sale realizes an amount in excess of the amount of the delinquent taxes, as well as any interest, penalties, fees, and costs, that excess amount is held in an interest-bearing escrow account by the municipality. Conn. Gen. Stat. § 12-157(i)(1).

Following the tax auction sale, the collector must execute a deed to the purchaser of the taxpayer's property or to the municipality conducting the sale, and must file the deed with the municipality's clerk, who is to leave the deed unrecorded for a period of six months from the date of the sale. Conn. Gen. Stat. § 12-157(e). During this six month period, the taxpayer or any mortgagee or lienholder whose interest is affected by the sale enjoys a right to redeem the property upon payment to the collector of "the amount of taxes, interest and charges which were due and owing at the time of the sale together with interest on the total purchase price paid by the purchaser at the rate of eighteen per cent per annum from the date of such sale plus any taxes and debts owed to the municipality that were not recovered by the sale and any additional charges under [Conn. Gen. Stat. § 12-140]." Conn. Gen. Stat. § 12-157(f). As relevant here, if the property is not timely redeemed, and there is an amount held in escrow after the auction sale, the amount held in escrow may be used to pay any remaining delinquent taxes, interest, penalties, fees and costs due on the auctioned property or any other property of the taxpayer, including

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personal property and motor vehicles. Conn. Gen. Stat. § 12-157(i)(1)(B). Once those amounts are paid, the collector must pay any remaining amount held in escrow to the clerk of the court for the state judicial district in which the property is located; the delinquent taxpayer, or any mortgagee or lienholder whose interest is affected by the sale, then may apply to the court for the return of this money. Id.; Conn. Gen. Stat. § 12-157(i)(2).

While a tax auction sale is conducted in the first instance under the auspices of a municipal collector alone, the process is not entirely immune from judicial scrutiny. See Jacobson v. A1Z7, LLC (In re Jacobson), 523 B.R. 13, 21 (Bankr. D. Conn. 2014). Flaws in the tax auction process may provide a basis for actions for declaratory relief, injunctive relief, as well as for damages. See Conn. Gen. Stat. §§ 12-159a(a), 12-159a(c); see also Assocs. Fin. Servs. of Am., Inc. v. Sorensen, 700 A.2d 107, 111 (Conn. App. Ct. 1997) ("Even if the tax collector were to misuse his authority and subvert the fairness of the tax sale, this would not render General Statutes § 12-157 violative of procedural due process. Rather, the plaintiffs' remedy would be a common law action, such as an action for a declaratory judgment and injunction." (quoting Pace Motor Lines, Inc. v. Biagiarelli, No. 318117S, 1996 WL 383398, at *14 (Conn. Super. Ct. June 24, 1996))).

b. Governor Lamont's Executive Orders Concerning COVID-19

Since March 2020, the COVID-19 pandemic has caused death and serious illness across this country, including many victims in the State of Connecticut.3 To protect the public health and slow the progress of this disease through the community, Connecticut Governor Ned Lamont has promulgated multiple executive orders altering the conduct of business, government, and daily life in the state pursuant to his powers under Conn. Gen. Stat. § 19a-131a and § 28-9

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See Casey v. Lamont, ___ A.3d ___, 2021 WL 1181937, at *2 (Conn. 2021); Auracle Homes, LLC v. Lamont, 478 F. Supp. 3d 199, 208 (D. Conn. 2020).4

Several of Governor Lamont's orders have included provisions affecting the non-judicial tax auction sale process that is central to this case.5

On April 1, 2020, Executive Order 7S suspended all non-judicial tax sales in the state until thirty days after the end of the public health and civil preparedness emergencies that had been declared by the Governor, including sales that had been noticed prior to March 10, 2020. Exec. Order 7S § 11.6 Tax sales remained suspended throughout the spring and summer of 2020.

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On September 16, 2020, the Governor issued Executive Order 9C, allowing municipalities to resume tax sales for all properties where notices of levy had been filed prior to April 1, 2020, as well as to institute new tax...

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