United States v. American Friends Service Committee 8212 1791

• Decision Date: 29 October 1974
• Docket Number: No. 73,73
• Parties: UNITED STATES v. AMERICAN FRIENDS SERVICE COMMITTEE et al. —1791
• Court: U.S. Supreme Court

42 L.Ed.2d 7

95 S.Ct. 13

419 U.S. 7

UNITED STATES

v AMERICAN FRIENDS SERVICE COMMITTEE et al.

No. 73—1791.

Oct. 29, 1974.

PER CURIAM.

Appellee American Friends Service Committee (employer) is a religious corporation, whose principal operation is philanthropic work and many of whose employees are conscientious objectors to war, performing alternative civilian service. Appellees Lorraine Cleveland and Leonard Cadwallader (employees) are present or past employees of the employer.

Because of their religious beliefs, the employees in 1969 requested their employer to cease withholding 51.6% ¹ of the portion of their wages required to be withheld under § 3402 of the Internal Revenue Code.² Although they conceded that these amounts were legally due to the Government, they wished to bear witness to their beliefs by reporting the amounts as taxes owed on their annual income tax returns but refusing to pay such amounts. They would thus compel the Government to levy in order to collect the taxes.

In response to the employees' request, the employer ceased withholding from the employees' salaries 51.6% of that amount required to be withhold under § 3402, although it continued to pay the full amount required to be withheld under that provision to the Government. It then brought a suit for refund of the amount it had paid to the Government but not actually withheld from salaries. The appellee employees joined the employer's action, seeking on their own behalf an injunction barring the United States' enforcement of § 3402 against the employer with regard to 51.6% of the required withholding. They argued that, even though they were liable for these amounts, § 3402 as applied to this portion of their wages was unconstitutional as a deprivation of their right to free exercise of religion under the First Amendment since it did not allow them to bear witness to their beliefs by refusing to voluntarily pay a portion of their taxes.

The District Court ordered a refund of amounts tendered by the employer but not withheld by it, since the Government had also levied on the employees for these taxes and hence had received a double payment of the amount due. The Government does not contest this portion of the District Court's judgment.³

The District Court also enjoined the United States from enforcing § 3402 against the employer with respect to 51.6% of the required withholding from the employees' salaries, holding that § 3402 as applied to this amount constituted an unconstitutional abridgment of the right to free exercise of religion. The United States appeals this portion of the judgment.⁴ The District Court's opinion and order were entered before this Court handed down its opinions in Bob Jones University v. Simon, 416 U.S. 725, 94 S.Ct. 2038, 40 L.Ed.2d 496 (1974), and Commissioner v. 'Americans United' Inc., 416 U.S. 752, 94 S.Ct. 2053, 40 L.Ed.2d 518 (1974).

The Anti-Injunction Act, 26 U.S.C. § 7421(a), provides that no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.⁵ In Bob Jones, supra, we rejected an appeal to create judicial exceptions to § 7421(a) other than that carved out in Enochs v. Williams Packing & Navigation Co., Inc., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1962). We noted that Williams Packing was the 'capstone' of judicial construction of the Act and spelled an end to cyclical departures from the Act's plain meaning. Bob Jones University v. Simon, supra, 416 U.S. at 742, 94 S.Ct. at 2048. In 'Americans United' Inc., supra, we stated that a pre-enforcement injunction against the assessment or collection of taxes could be granted only if it were clear that the Government could in no circumstances ultimately prevail on the merits, and that equity jurisdiction existed. 'Unless both conditions are met, a suit for preventive injunctive relief must be dismissed.' Commissioner v. 'Americans United' Inc., 416 U.S., at 758, 94 S.Ct., at 2057.

The employees concede, and the District Court found, that § 3402 withholding is a method of collection of taxes within the meaning of § 7421(a).⁶ They further concede, as they must, that they are not within the Williams Packing exception; far from the Government's defense in a refund suit being meritless, the employees concede that the Government would undoubtedly prevail in such a refund action.

They contend, however, that since the District Court enjoined only one method of collection, and the Government is still free to assess and levy their taxes when due, the Act does not apply. But this contention ignores the plain wording of the Act which proscribes any 'suit for the purpose of restraining the assessment or collection of any tax.' The District Court's injunction against the collection of the tax by withholding enjoins the collection of the tax, and is therefore contrary to the express language of the Anti-Injunction Act.

The employees also argue that the Anti-Injunction Act is inapplicable because they have no alternative legal remedy available. They contend that a refund suit would be an inadequate remedy, in view of the concession on their part that the taxes are due, since they would surely lose such an action. But this ignores the fact that inadequacy of available remedies goes only to the existence of irreparable injury, an essential prerequisite for traditional equity jurisdiction, but only one of the two parts of the Williams Packing test. Commissioner v. 'Americans United' Inc., supra, 416 U.S. at 761, 94 S.Ct. at 2059; Bob Jones University v. Simon, supra, 416 U.S. at 745, 94 S.Ct. at 2050. Here as in 'Americans United', supra, the employees will have a 'full opportunity to litigate' their tax liability in a refund suit. Id., 416 U.S. at 762, 94 S.Ct. at 2059. Even though the remitting of the employees to a refund action may frustrate their chosen method of bearing witness to their religious convictions, a chosen method which they insist is constitutionally protected, the bar of the Anti-Injunction Act is not removed:

'(D)ecisions of this Court make it unmistakably clear that the constitutional nature of a taxpayer's claim, as distinct from its probability of success, is of no consequence under the Anti-Injunction Act.' Id., at p. 759, 94 S.Ct. at p. 2058.

See also Lockerty v. Phillips, 319 U.S. 182, 187, 63 S.Ct. 1019, 1022, 87 L.Ed. 1339 (1943).

In Bob Jones we left open the question of whether injunctive relief as to future collection would be proper as a form of ancillary relief in a refund suit where the taxpayer prevailed on the merits, in order to avoid the necessity of continuous subsequent 'backward-looking refund suits.' 416 U.S., at 748 n. 22, 94 S.Ct., at 2051 n. 22. That situation is not presented here since the employees have never brought a refund action, much less prevailed on the merits of such an action. Their joinder in the employer's successful refund action, based on the receipt of double payment by the Government, would afford no basis for injunctive relief based on their constitutional claim. The injunctive relief granted by the District Court in this case is plainly at odds with the dual objectives of the Act: efficient and expeditious collection of taxes with 'a minimum of preenforcement judicial interference,' and protection of the collector from litigation pending a refund suit. Bob Jones, supra, 416 U.S. at 748, 94 S.Ct. at 2046.⁷

The judgment of the District Court is reversed insofar as it enjoins the collection of taxes by the Government and the withholding of wages by the meployer.

Reversed in part.

Mr. Justice DOUGLAS, dissenting.

The sole question on the merits is whether the provision of the Internal Revenue Code, 26 U.S.C. § 3402, which requires employers to deduct and withhold from wages federal income taxes, is constitutional as applied to employees, who on religious grounds object to the withholding taxes on their salaries which represent that portion of the federal budget allocated to military expenditures.¹ They invoke the Free Exercise Clause of the First Amendment, as they are Quakers who are opposed to participation in war in any form and who claim that this method of collection directly forecloses their ability freely to express that opposition, i.e., to bear witness to their religious scruples.

There is no evidence that questions the sincerity of the employees' religious beliefs. Nor is there any issue raised as to whether that religious belief would give the employees a defense against ultimate payment of the tax. The District Court held that the withholding was unconstitutional as to the employees, 368 F.Supp. 1176, a conclusion with which I agree.

The withholding process² forecloses the employees from bearing witness against the use of these monthly deductions for military purposes. Under the opinion of this Court, they are deprived of bearing witness to their opposition to war—these withheld portions of their salaries pay the entire tax and they therefore have 'no alternative legal remedy,' a circumstance which distinguishes both Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292, and Bob Jones University v. Simon, 416 U.S. 725, 94 S.Ct. 2038, 40 L.Ed.2d 496.

Quakers with true religious scruples against participating in war may no more be barred from protesting the payment of taxes to support was than they can be forcibly inducted into the Armed Forces and required to carry a gun, and yet be denied all opportunity to state their religious views against participation. See United States v. Seeger, 380 U.S. 163, 85 S.Ct. 850, 13 L.Ed.2d 733. The Court misses the entire point of the present controversy. The employees are barred from protesting these monthly deductions under the Court's opinion. In Enochs v. Williams Packing & Navigation Co., supra, and Bob Jones University v. Simon, supra, taxpayers sought to...