40 F.4th 417
6th Cir.2022Background
- In February 2017 Detroit mailed >260,000 property tax assessment notices on Feb 14 that printed assessor-protest deadlines (ordinance deadline Feb 15; notice said assessors review ended Feb 18) and warned that protest during the assessors period was required to preserve appeal rights to the Board of Review and Michigan Tax Tribunal.
- On the same day the City Council announced it was extending the Board of Assessors review period and (by subsequent action) waived the prerequisite appearance before the Board of Assessors so some taxpayers could appeal directly to the Board of Review; Detroit did not send individualized mailings informing homeowners of these changes.
- Four named Detroit homeowners filed a putative class action under 42 U.S.C. § 1983 (due process) and related state-law claims, alleging the late mailings and lack of individualized notice deprived them of the ability to pursue statutorily required appeals.
- The district court dismissed for lack of subject-matter jurisdiction under the Tax Injunction Act (TIA), concluding a "plain, speedy and efficient" state remedy existed; it declined supplemental jurisdiction over state claims.
- The Sixth Circuit majority reversed, holding the state remedy was uncertain because inadequate notice and inconsistent Michigan precedent made it speculative whether state tribunals would provide full protection of federal rights; the case was remanded. Judge Boggs dissented, arguing the City’s extension/waiver and the existing administrative-to-state-court pathway provided a plain, speedy and efficient remedy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the TIA bars federal jurisdiction because a "plain, speedy and efficient" state remedy exists | State remedy is not "plain" — uncertain because late notices and uncommunicated extension/waiver prevented timely statutory protests and access to Tax Tribunal | State remedy is "plain" — City extended deadlines and waived prerequisites; administrative process and state-court review were available | Reversed dismissal: state remedy uncertain; TIA does not bar federal jurisdiction |
| Whether the Michigan Tax Tribunal would have jurisdiction despite failure to timely protest to Board(s) | Appellants could not meet statutory prerequisites because notices misled them; thus Tribunal jurisdiction is speculative | Tax Tribunal can and would hear due-process claims; petitioners could follow the administrative path to state review | Sixth Circuit: speculative and inconsistent state precedent; cannot assume Tribunal would hear these claims |
| Adequacy of notice and effect of City’s extension/waiver | Extension/waiver was inadequately communicated (no individualized mailings); many homeowners lacked notice, making state remedy uncertain | City’s public announcement and press coverage, plus thousands who utilized the process, show the remedy worked | Court: extension/waiver insufficiently communicated; uncertainty as to whether individual taxpayers received notice |
| Whether district court should exercise supplemental jurisdiction over state claims | Plaintiffs seek supplemental adjudication if federal claim proceeds | Defendants had argued (below) dismissal was proper; if federal claim reinstated, district court may choose whether to retain state claims | Court remanded and directed the district court to reconsider supplemental jurisdiction on remand |
Key Cases Cited
- Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503 (explaining the TIA's "plain, speedy and efficient" exception and that uncertainty of state remedy permits federal jurisdiction)
- Tully v. Griffin, Inc., 429 U.S. 68 (background on TIA purpose and limits on federal interference with state tax administration)
- Fair Assessment in Real Estate Ass'n, Inc. v. McNary, 454 U.S. 100 (comity bars federal suits challenging validity of state tax systems)
- Hillsborough Township v. Cromwell, 326 U.S. 620 (uncertainty about availability of state protection lifts TIA bar)
- Franchise Tax Bd. of Cal. v. Alcan Aluminum, Ltd., 493 U.S. 331 (state remedy is not uncertain where state precedent demonstrates availability of relief)
- Chippewa Trading Co. v. Cox, 365 F.3d 538 (6th Cir.) (discussing notice adequacy and when state remedies are procedurally sufficient)
- Hedgepeth v. Tennessee, 215 F.3d 608 (6th Cir.) (state must provide minimal procedural protections to satisfy TIA)
- Colonial Pipeline Co. v. Morgan, 474 F.3d 211 (6th Cir.) (defining state remedy as including full hearing and ultimate review to U.S. Supreme Court)