Opinion
CIVIL ACTION No. 03-2649, SECTION "K" (1).
July 7, 2004
ORDER AND REASONS
Before the Court is plaintiff Lodge Properties, L.L.C.'s Motion for Summary Judgment (Rec. Doc. 6). Rule 12(h)(3) of the Federal Rules of Civil Procedure provides that "[w]henever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." Fed.R.Civ.P. 12(h)(3). Having considered the pleadings, memoranda and relevant law, the Court concludes, for the reasons set forth below, that the Tax Injunction Act, 28 U.S.C. § 1341 ("the TIA"), precludes subject matter jurisdiction over this case.
I. BACKGROUND
This action arises from a dispute over taxes, penalties and interest paid by plaintiff to defendant City of New Orleans. Plaintiff is the owner of property located at 333 St. Charles Avenue in New Orleans. In 1997, plaintiff was assessed ad valorem property taxes for the 1998 tax year. On June 5, 2000, plaintiff remitted payment, including penalties and interest, for its 1998 tax bill. Pursuant to La.Rev.Stat. § 47:2110, this payment was made under protest. Plaintiff then filed a state court action in the Civil District Court for the Parish of Orleans, State of Louisiana, seeking a return of all taxes, interest and penalties paid under protest.
On October 22, 2001, the parties entered into a Consent Judgment, according to which plaintiff's property would be reassessed and a new tax bill for the year 1998 would be issued. A dispute subsequently arose concerning penalties and interest ordered by the Consent Judgment, and plaintiff brought this action in federal district court, alleging that defendant's failure to refund certain penalties and interest amounted to an unconstitutional taking, in violation of the Fifth Amendment of the United States Constitution. The City of New Orleans responds that this case involves a tax dispute, and that, pursuant to La.Rev.Stat. § 47:1998, et seq., state courts provide the sole remedy for the resolution of this dispute. See Rec. Doc. No. 8. Defendant also avers, inter alia, that the Tax Injunction Act, 28 U.S.C. § 1341, precludes this Court from hearing this case, and, consequently, that plaintiff's case should be dismissed for lack of subject matter jurisdiction.
II. LEGAL STANDARD ANALYSIS
The Tax Injunction Act provides that "[t]he 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." 28 U.S.C. § 1341. This Court has previously recognized that the "TIA represents a 'policy of restraint' in federal courts." Kruger v. Garden Dist. Ass'n, 1999 WL 262107, *2 (E.D. La. 1999) ( quoting Folio v. City of Clarksburg, West Virginia, 134 F.3d 1211, 1214 (4th Cir. 1998)) (internal citations omitted). "Federal courts are 'under an equitable duty to refrain from interfering with a State's collection of its revenue' in light of 'the imperative need of a State to administer its own fiscal operations.'" Id. Deciding whether to apply the TIA is not a matter of discretion for the Court. The TIA creates a "non-waivable jurisdictional bar that absolutely precludes federal courts from assessing the validity of state or local taxation schemes. Id. See also Keleher v. New England Tel. Tel. Co., 947 F.2d 547, 549 (2d Cir. 1991); Hardwick v. Cuomo, 891 F.2d 1097, 1103-04 (3rd Cir. 1989).
A two-part analysis is used to determine whether the TIA is applicable. Home Builders Ass'n of Mississippi v. City of Madison, Mississippi, 143 F.3d 1006, 1010 (5th Cir. 1998). First, a court must determine whether the dispute in question involves a tax or a regulatory fee. Id. If the suit involves a fee, then the TIA does not apply, and jurisdiction may be appropriate. Id. Second, even if the dispute involves a "tax" for purposes of the Act, a district court may still exercise jurisdiction if the state does not provide a plain, speedy and efficient remedy. Id., ( citing Cumberland Farms, Inc. v. Tax Assessor, State of Maine, 116 F.3d 943, 945 (1st Cir. 1997); Collins Holding Corp. V. Jasper Cty., South Carolina, 123 F.3d 797, 799 (4th Cir. 1997)).
In the instant case, neither party disputes that the original and revised assessments levied against plaintiff's property for the year 1998 represent a "tax" and not a "fee." It is also clear that the disputed interest and penalties are "inexorably tied to the tax collection itself, which 'sustains the essential flow of revenue to the government,'" Washington v. Linebarger, Goggan, Blair, Pena Sampson, L.L.P., 338 F.3d 442, 444 (5th Cir. 2003), and courts in the Fifth Circuit have been loath to interfere in this flow. Id. (noting that "the plain language of the Tax Injunction Act's jurisdictional limitation is not focused on taxes only, but rather on the broader activities of assessing, levying, and collecting taxes"). See also Dawson v. Childs, 665 F.2d 705, 710 (5th Cir. 1982) (holding that federal district courts are prohibited from deciding disputes involving tax related concepts or functions similar to this ad valorem penalty due to the jurisdictional limitations imposed by the Tax Injunction Act). Based upon these guidelines, the Court finds that the dispute in the instant case involves a tax and not a fee.
Once it has determined that the dispute involves a tax and not a fee, the Court may not exercise jurisdiction if there is available to the plaintiff a "plain, speedy and efficient remedy in the courts of the state." 28 U.S.C. § 1341. "In making this determination, the Court must consider whether the state remedy 'provides the taxpayer with a full hearing and judicial determination at which she may raise any and all constitutional objections to the tax." Kruger v. Garden Dist. Ass'n, 1999 WL 262107, at *2 ( quoting Folio v. City of Clarksburg, West Virginia, 134 F.3d at 1214) (internal citations omitted). In other words, the state court must provide a procedural vehicle that affords taxpayers the opportunity to raise their federal constitutional claims, and a state's remedy is adequate if it provides taxpayers with a "complete judicial determination that is ultimately reviewable in the United States Supreme Court." Id.
Here, plaintiff has already sought, and been provided, remedy in a state court, as evidenced by the Consent Judgment dated October 22, 2001. That a dispute has arisen concerning the meaning of certain provisions of that Consent Judgment does not preclude plaintiff from returning to Civil District Court to have the terms of the judgment enforced. Indeed, the last paragraph of the Consent Judgment orders and decrees that "this court shall retain jurisdiction of this case, and the parties, to enforce the terms of this Consent Judgment." See Rec. Doc. No. 8, Exhibit CNO 2.
Because this case involves a "tax" within the meaning of the Tax Injunction Act, and because there is a "plain, speedy, and efficient remedy" available in state court, the TIA precludes this Court from exercising jurisdiction over this case. Accordingly,
IT IS ORDERED that Lodge Properties, L.L.C.'s Motion for Summary Judgment (Rec. Doc. 6) is DENIED. IT IS FURTHER ORDERED pursuant to Fed.R.Civ.P. 12(h)(3) that judgment shall be entered dismissing this case for lack of subject matter jurisdiction.