Wyandotte Chemicals Corp. v. City of Wyandotte

• Decision Date: 21 August 1963
• Docket Number: No. 15027.,15027.
• Citation: 321 F.2d 927
• Parties: WYANDOTTE CHEMICALS CORPORATION, a Michigan corporation, Plaintiff-Appellee, v. CITY OF WYANDOTTE, a municipal corporation of the State of Michigan, Ira J. Kreger, its Treasurer, School District of the City of Wyandotte, a Michigan third-class school district, County of Wayne, a County of the State of Michigan, and Harold E. Stoll, its treasurer, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

321 F.2d 927 (1963)

WYANDOTTE CHEMICALS CORPORATION, a Michigan corporation, Plaintiff-Appellee, v. CITY OF WYANDOTTE, a municipal corporation of the State of Michigan, Ira J. Kreger, its Treasurer, School District of the City of Wyandotte, a Michigan third-class school district, County of Wayne, a County of the State of Michigan, and Harold E. Stoll, its treasurer, Defendants-Appellants.

No. 15027.

United States Court of Appeals Sixth Circuit.

August 21, 1963.

William F. Koney, Asst. Prosecuting Atty., Detroit, Mich., and Albert Louis Gingras, Atty., Wyandotte, Mich. (Samuel H. Olsen, Prosecuting Atty. for County of Wayne, Aloysius J. Suchy, Asst. Prosecuting Atty., for defendants County of Wayne and Harold E. Stoll, Treasurer, Charles A. Swaby, Wyandotte, Mich., for School Dist. of the City of Wyandotte, Ira J. Kreger, Wyandotte, Mich., Treasurer, on brief), for appellants.

Patrick J. Ledwidge, Detroit, Mich., Dickinson, Wright, McKean & Cudlip, Detroit, Mich., of counsel, for appellee.

Before CECIL, Chief Judge, and BOYD and THORNTON, District Judges.

CECIL, Chief Judge.

The plaintiff-appellee, Wyandotte Chemicals Corporation, brought this action in the United States District Court for the Eastern District of Michigan, Southern Division, under the Declaratory Judgment Act.¹ It sought a judgment in the District Court declaring that the value of its personal property was erroneously and improperly assessed for the payment of ad valorem taxes for the year 1960 and for a declaration of such amount of taxes as was proper.

The essence of the complaint is that the City of Wyandotte systematically and intentionally assessed the value of plaintiff's property located in the city upon a basis substantially higher than the basis upon which it assessed other property similarly situated. The plaintiff claims that the taxes computed on this valuation are excessive, unlawful, unfair, inequitable, and improper and deprive the plaintiff of equal protection of the laws and due process of law as guaranteed by the Fourteenth Amendment to the Constitution of the United States. Under the facts as alleged the plaintiff seeks to invoke the jurisdiction of the Court under Section 1331(a), Title 28 U.S.C.

Upon filing the complaint, a district judge of the Eastern District of Michigan ordered $1,432,445.28, the full amount of the city's claim, paid to the City Treasurer. He further ordered the treasurer to hold $119,261.05, the amount claimed by the plaintiff to be excessive, in a separate account until the further order of the court.

The plaintiff named as defendants the City of Wyandotte, a municipal corporation of the State of Michigan, Ira J. Kreger, its Treasurer, School District of the City of Wyandotte, a Michigan third-class school district, County of Wayne, a county of the State of Michigan and Harold E. Stoll, its Treasurer. The plaintiff's taxes were payable to the City of Wyandotte through its treasurer Ira J. Kreger. The School District and Wayne County shared with the City of Wyandotte in the distribution of the taxes collected by the City.

Defendants County of Wayne and Harold E. Stoll through their attorneys moved to dismiss the complaint for lack of jurisdiction in the Federal Court to hear and determine the issues raised in the complaint. The district judge denied the motion on the ground that there was no adequate remedy available to the plaintiff under the Michigan statutes. Upon the certification of the district judge that a controlling question of law was involved, we granted an interlocutory appeal under Section 1292(b), Title 28 U.S.C.

The law of the state of Michigan provides that the assessment of all real and personal property for ad valorem taxes shall be uniform and at cash value. (Art. X, Secs. 3, 7, Mich.Const.; Comp. L.Mich., 1948, Sec. 211.24; MSA, Sec. 7.24.) Cash value is defined as the price which could be obtained for the property at private sale and not at forced or auction sale. (Comp.L.Mich., 1948, Sec. 211.27; MSA, Sec. 7.27.)

The plaintiff has exhausted all of its state administrative remedies.²

The jurisdiction of the Federal Court is restricted by statute. Section 1341, Title 28 U.S.C. (Johnson Act) provides, "The 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." It has been held that this statute applies to an action for declaratory judgment, even though the plaintiff is not seeking to "enjoin, suspend or restrain the assessment, levy, or collection of any tax." Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 299, 63 S.Ct. 1070, 1073, 87 L.Ed. 1407.

We are confronted with the question of whether the statutes of Michigan afford the plaintiff a plain, speedy and efficient remedy for a redress of its grievance. This Court has recently held that the statutes of Michigan afford a taxpayer an adequate and complete remedy for the adjudication of a claim that an assessment against property is illegal and discriminatory. Helmsley v. City of Detroit, 320 F.2d 476, C.A. 6, decided July 25, 1963. This case is controlling on the issue of the adequacy of the state statutes of Michigan to afford relief to a taxpayer. The appellee suggests in its brief that the Michigan statute makes no provision for the payment of interest. This point was covered in the Helmsley case.

The district judge in support of his conclusion that the Michigan statutes afforded an inadequate remedy said: "The plaintiff would attempt to recover a judgment for the full amount, a total approaching one and one-half million, rather than just the disputable amount. The City of Wyandotte would have no funds to pay the entire amount or the disputed amount after a new assessment and could not require the other benefiting units to pay their share of the amount due. In any case, the amount would be raised by a new levy of taxes, of which plaintiff would be required to pay thirty-eight per cent." 199 F.Supp. 582, 584. These "complicated gyrations," as they are referred to by the district judge, are anticipatory of problems which may or may not arise in the state court and should be of no concern to the District Court.

Michigan statutes make adequate provision for the enforcement of judgments against townships, villages or cities. Comp.L.Mich., 1948, Sec. 600.6093; MSA, Sec. 27A.6093 P.A.1961, No. 236. Under this statute judgments have been enforced in the following cases: Morley Brothers v. Carrollton Township Supervisor, 312 Mich. 607, 20 N.W.2d 743; Hammond v. Place, 116 Mich. 628, 74 N.W. 1002; Shippy v. Mason...