An employee of the City of Chicago mistakenly addressed a notice to Beth-El All Nations Church at 1534
East
63rd Street, instead of Beth-El’s true address, 1534
West
63rd Street. The notice was pretty important: it advised the Church of its right to redeem title to the 63rd Street property after the parcel was sold for delinquent taxes. Despite the misaddressed notice, the City acquired a tax deed to the 63rd Street property in 1998. Finally, after Beth-El’s failed attempts to challenge the tax deed through state postjudgment proceedings, the City sought to oust Beth-El from the property in 2006. On the very day in March 2006 when the City came to take the property, Beth-El turned to federal court and filed a complaint claiming violations of the Fourth Amendment. It also sought a temporary restraining order, which the district court granted after an ex parte hearing. The Church then amended its complaint to state a procedural due-process claim and moved for a preliminary injunction. The City opposed the injunction, claiming that the district court lacked subject-matter jurisdiction over the suit under the
Rooker-Feldman
doctrine; according to the City, the Church had already litigated the property dispute in state court.
See D.C. Court of Appeals v. Feldman,
Beth-El, an African-American church in the Chicago neighborhood of Englewood, took title to the 63rd Street property in 1976. Beth-El rehabilitated the property and began operating there in 1984. The Church was not, however, deemed to be tax-exempt during the period from 1986 to 1995, and so real estate taxes, totaling over $100,000, were assessed by Cook County against the property. Because of the delinquent taxes, the property was sold at a “scavenger sale,” a sale authorized by Illinois law for properties that have been tax delinquent for more than two years, if annual forfeiture sales have not satisfied the delinquency.
See
35 ill. oomp. stat. 200/21-145, 200/21-260 (2000);
see also People v. Meyers,
Cook County did not own the property yet, though. The certificate of purchase gave it the right to, among other things, assign the certificate of purchase “to any party, including taxing districts.” See 35 III. Comp. Stat. 200/21-90. The City of Chicago happens to be a “taxing district,” so Cook County assigned the certificate of purchase to it as part of the City’s “Tax Reactivation Program,” which, as its name suggests, attempts to reintroduce chronically tax-delinquent property to the tax rolls.
With the certificate in hand, the City’s next step was to obtain a tax deed by filing a petition in the circuit court, which the City did in January 1998. But before a tax deed issues, the owner whose taxes are delinquent is entitled to notice of the right to redeem the property by paying the full amount of taxes and penalties.
See
35 III. Comp. Stat. 200/21 — 260(f);
Meyers,
There were two other notices that the Tax Code requires, one under § 22-5, and one under § 22-15. See 35 Ill. Comp. Stat. 200/22-5, 200/22-15. The former requires the purchaser, within four months and 15 days following a tax sale, to deliver to the county clerk a notice of the tax sale addressed to the party in whose name taxes were last assessed. See 35 Ill. Comp. Stat. 200/22-5. Section 22-15 requires a purchaser to publish notice of the tax sale in the newspaper. The City complied with the former section by delivering to the county clerk a notice that, this time, was properly address to Beth-El at 1534 W. 63rd Street. The City also published notice of the sale and redemption period— with the correct address on West 63rd Street — in the Chicago Daily Law Bulletin.
After the City filed its petition for a tax deed, and the redemption period expired, the City filed an “Application for an Order Directing the County Clerk to Issue a Tax Deed.” The application recites that the required notices — under §§ 22-5, 22-10, and 22-15 — had been served, and the City’s counsel represented orally to the circuit court that all required notices had been served. Based on these representations, on July 7, 1998, the circuit court ordered the county clerk to issue the City a tax deed (the “tax-deed judgment”). The county clerk issued the City’s tax deed that day, and the City recorded it seven months later.
The next thing we know for sure is that five years after taking title to the property the City filed an application in the Circuit Court of Cook County seeking actual possession of the property. Nine days later Beth-El, through counsel, moved to vacate the tax-deed judgment by filing a petition under § 2-1401 of the Illinois Code of Civil Procedure, 735 III. Comp. Stat. 5/2-1401. The petition alleged, among other things, that the City fraudulently concealed the 1998 proceedings by sending the § 22-10 notice of the right of redemption to Beth-
The City moved to dismiss Beth-El’s petition under § 2-619.1, 735 III. Comp. Stat. 5/2-619.1, arguing that the petition was filed outside § 2-1401’s two-year statute of limitations. See § 2-1401(c). Moreover, argued the City, what Beth-El alleged did not amount to fraudulent concealment. At the outset of the hearing on the cross-motions, Beth-El’s counsel stated that he would like to “reserve, if possible” an argument that taxes should never have been assessed against the Church because it was tax exempt. He then stated: “I’m not asking this Court to hold this case up because that can be brought at any time. That would make it absolutely void because there would be no jurisdiction.” But then, puzzlingly, counsel focused on his argument that the tax deed was void because the tax sale had been fraudulently concealed. (Counsel undoubtedly meant that he wanted to “preserve” the issue of tax exemption, rather than reserve it — but he never actually made the argument in order to preserve it.)
The circuit court ultimately held that the City’s mistake in addressing the § 22-10 notice did not amount to fraudulent concealment of the tax sale. Thus, the court continued, Beth-El provided nothing to circumvent the two-year statute of limitations for actions under § 2-1401, and the motion to dismiss had to be granted. The court denied a petition for rehearing. The Appellate Court of Illinois affirmed,
City of Chi. v. Beth-El All Nations Church of God in Christ,
No. 1-04-0364 (Ill.App.Ct. Mar. 31, 2005) (unpublished order), and the Supreme Court of Illinois denied leave to appeal,
City of Chi. v. Beth-El All Nations Church of God in Christ,
Once the mandate issued, the City renewed its application for possession of the property, which was pending during the § 2-1401 proceedings. The circuit court held a hearing on the application in early January 2006, at which Beth-El agreed to an order granting possession to the City, provided that the order be stayed until February 28, 2006. On March 1, 2006, when a City employee came to put new locks on the property pursuant to the agreement transferring possession, he was asked by Bishop Jackson (by telephone) if the Church could have just one more day. After discussing the matter with counsel for the City, the employee agreed and left.
Bishop Jackson spoke with the employee by phone because at that very moment he was filing this lawsuit, and a motion for a temporary restraining order, in the federal district court. The 57-page pro se complaint named various parties, including the City, the mayor, and the state-court judge who issued the tax deed and decided the § 2-1401 petition (they were the same). The Church claimed violations of the Fourth Amendment for “unreasonable search and seizure” of the Church’s property. The district court held a hearing, but the City attorneys did not learn of the suit in time to appear, so based on Bishop
On that date, both parties appeared with counsel. The Church’s counsel stated that the Church would file an amended complaint raising claims under 42 U.S.C. § 1983 for violations of the First Amendment and the Due Process Clause of the United States Constitution, as well as under the Religious Land Use and Institutionalized Persons Act, 42 U.S.C. §§ 2000cc to 2000cc-5 (“RLUIPA”), and the Illinois Religious Freedom Restoration Act, 775 III. Comp. Stat. 35/15 (“IRFRA”). The City again argued that the district court lacked subject-matter jurisdiction to entertain the lawsuit, but the district court put jurisdictional considerations to one side and told the City to “present your side why preliminary injunction factors shouldn’t apply.” The City then shoehorned its jurisdictional argument into the likelihood-of-success-on-the-merits prong for issuing injunctions, arguing that under
Rooker-Feldman
lower federal district courts lack subject-matter jurisdiction to overturn state-court judgments. The Church, relying on cases like
Taylor v. Fed. Nat’l Mortgage Assoc.,
The Church’s sole witness at the hearing was Bishop Jackson, who testified that Beth-El had never paid property taxes while it occupied the property. Bishop Jackson explained that Beth-El had never received a tax bill, and he believed he was the person who would have received one. Bishop Jackson further testified that he did not discover that the property had been sold until, at the earliest, late in 2001.
Mark Davis, an attorney who handled the acquisition of the tax deed, was the principal witness on the City’s behalf. According to Davis, the City sent the Church several letters in the years following the tax sale encouraging it to obtain a tax exemption for the property. For example, in a letter dated September 20, 1999, an attorney representing the City, Marguerite Quinn, advised Bishop Jackson that the City had taken title to the property in a tax proceeding. Quinn encouraged the Bishop to consult an attorney. Receiving no response, Quinn wrote again to Bishop Jackson three months later, encouraging him to obtain legal representation and advising him that if the City received no response it may be forced to evict Beth-El. In February 2000 Quinn received a letter from Bishop James Baker, Presiding Regional Bishop of the Church of God in Christ United (which, according to Bishop Jackson, is Beth-El’s “canopy international organization”), advising the City of a partial exemption for the Church’s property (which, ironically, Bishop Baker identifies by that nasty address: 1638
East
63rd Street). Bishop Baker attached an exemption certificate from the Illinois Department of Revenue dated July 1, 1999, which provides that the Church’s parcel is tax exempt, except for a resale shop on the first floor and meeting rooms on the second floor. The certificate was procured by Beth-El having filed an application for the exemption on March 26, 1998, just two
On the last day of testimony, after the City presented its witnesses, Bishop Jackson took the stand again as a rebuttal witness. He denied seeing any of the letters the City produced. He testified that, despite his signature appearing on the application, he did not know who applied for the partial exemption granted by the Illinois Department of Revenue or what Bishop Baker had written to Quinn. He also testified for the first time about his interactions with a man named Charles Bowen, a mayoral assistant who acts as a liaison to community churches. According to Bishop Jackson, he believed the City would return the title even after it was acquired because Bowen assured him that it would be done.
The district court concluded that it had subject-matter jurisdiction because the misaddressed notice deprived Beth-El of a reasonable opportunity to have its claims heard in state court. Therefore, continued the court, neither Rooker-Feldman nor the Tax Injunction Act barred this suit in federal court. The court then ruled that “the likelihood of success on the merits factor favors the Church,” but the court did not identify under what theory the Church was likely to prevail or why. The court also reasoned that the two-year statute of limitations for claims under 42 U.S.C. § 1983 did not apply in light of Bowen’s representations to the Church that the City would return the deed. Finally, the court concluded that the balance of harms and public interest favored Beth-El. “In this country,” the court concluded, “even a church is entitled to its day in court. That did not happen in this case.” The court then entered a preliminary injunction enjoining the defendants and then-agents from “exercising any ownership or property rights, including any eviction attempts, over the property located at 1534 W. 63rd Street [Ah, the address was correct!] Chicago, Illinois.”
On appeal, the City renews its arguments that the Tax Injunction Act and
Rooker-Feldman
deprived the district court of jurisdiction over this case. Because federal courts must determine that they have jurisdiction before proceeding to the merits,
see Lance v. Coffman,
- U.S. -,
The City begins by arguing that
Rooker-Feldman
applies because Beth-El seeks directly to overturn a state-court judgment. Beth-El’s response is that the
In this case, the Church has sought all along to retain possession and regain title to the property. Beth-El has never identified any injury separate from the tax deed judgment; it has not alleged, for example, that the City’s very act of misaddressing the notice violated a state or federal statute,
cf. Long,
In deciding whether Beth-El lacked a reasonable opportunity to present its claims in state court, we focus on difficulties caused not by opposing parties, but by state-court rules or procedures.
See Taylor,
But the Church has simply never made the argument; instead, this is the very argument that postjudgment counsel “reserved” because he recognized he could raise it at any time. When we asked at oral argument why this issue was not explored earlier, the Church’s counsel informed us that an argument about tax exemption would have been fruitless because Beth-El did not own the property after 1998 and could not obtain a tax exemption for it. The Church followed up with a post-argument letter, citing the Illinois Department of Revenue’s website for the proposition that, to qualify for a property-tax exemption, an organization must own the property and use it exclusively for religious purposes. For its part, the City contends that the test for tax exemption is “use, not ownership.”
Illinois courts look to the Illinois constitution and the Illinois Property Tax Code to determine if a parcel is tax exempt.
See Swank v. Dep’t of Rev.,
At least one virtually identical claim has been successful in an Illinois court.
See New Holy Temple Missionary Baptist v. Discount Inn, Inc.,
Because Beth-El, like New' Holy Temple, could have argued in the § 2-1401 proceeding that the property sold was tax exempt, the state-court system was not closed to the Church as it may have been to the plaintiff in
Long,
a case we cited earlier. The Church has simply never pursued its right to a retroactive tax exemption. Whether it may do so now will be governed by Illinois’ law on successive petitions under § 2-1401. The point here is that federal court is not the place for Beth-El to obtain the relief it seeks.
See Manley v. City of Chi.,
Notes
. Decided two days after we heard oral argument in this case.