*1 1413 Lacey dismissing discretion in damages on behalf of Mrs. Mr. Rishell’s to recover action injuries despite the lack of her hus- for her under Rule 19. parties. as The third band and children judgment We REVERSE the of the dis- against dis- factor therefore also counsels trict court REMAND pro- for further missal. ceedings. fourth factor turn then to the
We whether the fact that Mr. Rishell
and assess
may adequate remedy in state court have an dis
requires dismissal of this action. The weight, gave dispositive
trict court this factor
observing have viewed this that some courts important one of
consideration as the most so,
the four. Most courts have done howev
er, only when an alternative forum is not availability of an alternative
available. “The significance primarily negative
forum is of an alterna
under Rule 19. The absence weigh heavily, if not conclu
tive forum would
sively against dismissal while the existence of BURLINGTON NORTHERN RAILROAD
significant
another forum would not have as
COMPANY, Plaintiff-Appellee,
impact
in favor of dismissal.” Pasco Int’l
(London)
Stenograph Corp.,
Ltd. v.
637 F.2d
v.
(7th Cir.1980).
496,
Hence,
501 n. 9
courts
“
Mary HUDDLESTON,
capacity
in her
as
availability
‘do not
of an alterna
view
Property Tax
Administrator
State
alone,
remedy, standing
tive
as a sufficient
Colorado,
Property
and Division of
deciding
reason for
that the action should not
Department
among
Taxation of the
proceed
parties
before the
Local
”
(quoting Bio-Analytical
court.’
Id. at
Colorado,
Affairs of the
Defen-
Servs.,
Inc.,
Edgewater Hosp.,
Inc. v.
dants-Appellants.
450,
(7th Cir.1977),
denied,
F.2d
cert.
(1978)).
820,
84,
No. 95-1316.
U.S.
99 S.Ct.
party, properly the other or entities, judicial system or the must also be 670,
present.” Local United Rubber Work Union, v. ers International United Rubber Workers, Cir.1987), 822 F.2d denied, cert. 108 S.Ct. (1988). Pasco, Accord 637 F.2d “[Jjudicial economy at 501. and convenience provide grounds
do not in themselves Accep dismissal.” Boone General Motors (5th Cir.1982). Corp.,
tance agree with courts. The district
We these given dispositive
court should not have
weight availability of an alternative Rishell, plaintiff,
forum. Mr. as has an inter- recognized by
est federal in the forum of law choice, outweighed
his which is not here parties, defen- interests absent
dants, judicial system. Accordingly, or the court
we conclude the district abused its *2 personal property includ-
value computer Id. 39-3-118. ing software. law, however, exempt does not Colorado intangible personal taxation the value of property public utilities. Id. owned purposes, For 39-22-611. public utility as law defines a Colorado company, company, airline electric “railroad telephone company, company, rural electric company, gas company, company, telegraph gas pipeline company, carrier domestic water ..., slurry company pipeline company, coal private company.” Id. pipeline, or car line 39-4-101(3). Section 306 of the Railroad Regulatory Act Revitalization and Reform (4 Act) proscribes certain forms of 1976 —R unreasonably bur- state taxation deemed engaged in interstate com- den rail carriers presented is whether the merce. The issue Property Tax Adminis- Defendant Colorado exempt the value of the trator’s refusal to Burlington Railroad’s Plaintiff Northern computer software from taxation constitutes of the 4-R tax discrimination under unique procedural posture Act. Under the it of this we hold that does. We there- uphold judgment per- fore the district court’s manently enjoining Defendant from assess- against ing an ad valorem tax the value of computer Plaintiff’s software.
I. §§ 39-J-101 & 106 Under Colo.Rev.Stat. annually Plain- assesses transportation property rail for ad valo- Williams, tiff’s Larry A First Attor- Assistant (Gale General, ney A purposes. State Services Section Defendant bases the as- rem Norton, General, Attorney him with on the of Plaintiffs rail sessment the value brief), Denver, Colorado, Defendants-Ap- transportation property located within the pellants. apportions of Colorado. Defendant among assessed value of the BALDOCK, LOGAN, and Before various counties. The counties there- State’s BRISCOE, Judges. Circuit levy and after a tax collect taxes from BALDOCK, Judge. Circuit Plaintiff. taxing power to its under Colo. Pursuant requested exemp- Plaintiff Const, X, legislature art. has the Colorado tion the value of its based procedures per- enacted for the taxation of software. Defendant denied Plaintiff’s re- sonal within the State. Colo.Rev. quest. Plaintiff then instituted this action (1994). §§ 39-1-101 to 39-2-131 Colo- Stat. seeking declaratory generally exempts from taxation the district court rado law 306(l)(d) injunctive disputed $184,- 4-R the amount of relief under tax totaled Act.1 deposited 767.89. Plaintiff that amount in 306(l)(d) registry the district court’s prohibits pending a state from resolu-
Section
levying “another
tax that discriminates
tion of the case.
engaged
a rail carrier”
in interstate
*3
According
complaint,
to the
the
commerce.
allegations
Aside from the
“imposition
property
a
tax
on the value of
complaint,
party
at no time did either
seek to
software,
intangible computer
[Plaintiffs]
any
introduce
factual
tending
evidence
to
computer
where the
software of other com-
negate
establish or
alleged
the
discriminato
taxpayers
mercial and industrial
in Colorado
ry effect of
the State of Colorado’s
taxed,
discriminatory
is not
results in
treat-
property
exemption. By
tax
failing
in
to sub
ment of a common carrier
rail
violation
306(l)(d).”
alleged
of Section
Plaintiff
the mit an
or
pleading denying
answer
other
computer
of its
located in the
value
software
allegations
factual
complaint,
Plaintiffs
$8,000,000,
State of Colorado was at least
Defendant
allegations,
admitted those
thus
property
which entitled Plaintiff to a
tax
placing no further
upon
burden
Plaintiff to
$2,250,000.
deduction of at least
Defendant
8(d)
prove
factually.
its case
Fed.R.Civ.P.
dispute
allegations,
did not
Plaintiffs factual
(“Averments in pleading
a
to
respon
which a
and
never submitted
answer to the com-
pleading
sive
required
... are admitted
Rather,
plaint.
Defendant filed a motion to
when not
in
responsive
denied
plead
disputed
dismiss which
as a matter of
ing.”).
certainly
Defendant
would have been
law Plaintiffs conclusion that the failure to
exempt
entitled to
computer
the value of Plaintiffs
soft-
file an answer
the district
property
from the
ware
assessment con-
dismiss,
court’s denial of the motion to
Fed.
stituted tax discrimination in violation of the
12(a)(4)(A),
R.Civ.P.
but chose not to.
In
Defendant,
According
§
4—R Act.
306 stead,
parties’ requested
the court
to
any
would not afford Plaintiff relief under
set
decide the case as a matter of law on the
in Department
facts because
Revenue
they presented.
record
The court entered an
Industries, Inc.,
Oregon v. ACF
“permanently”
order
enjoining Defendant
S.Ct.
assessing
from
a tax based on the value of
Supreme Court held that the 4r-R Act did not
computer
Plaintiffs
software.2 The court
Thereafter,
exemptions.
to tax
Plain-
reasoned that because Defendant excluded
preliminary injunction
tiff filed a motion for a
only public utilities as an “isolated and tar
seeking
enjoin
collecting
to
Defendant from
disputed
parties agreed
tax.
geted group”
The
that
general
the State’s
ex-
306(1),
argues
prove
1. Section
codified at
U.S.C.
The dissent
that Plaintiff failed to
11503(b),
course,
states:
its case. Of
if
Defendant
denied the
(1)
following
unreasonably
The
acts
burden
allegations
complaint
required
factual
and
commerce,
against
and discriminate
and a
acting
interstate
prove
grant
Plaintiff to
that the failure to
Plaintiff
State,
State,
authority
subdivision
aof
or
property
discriminatory
had a
may
for a State or subdivision of a State
306(l)(d),
might
effect in violation of
we
then
any
not do
of them:
have a different situation. But the Defendant
(a)
transportation property
assess rail
at a
basket,”
"put
eggs
arguing only
all its
in one
that
higher
value that has a
ratio to the true
332, property
exemp-
under
U.S. at
transportation prop-
market value of the rail
subject
challenge
tions were not
to
erty than the ratio that the assessed value of
306(l)(d). Thus,
“what sort of
the rail-
property
other commercial and industrial
present
road must
and what rebuttals or defenses
jurisdiction
the same assessment
has to the
taxing authority
questions
are available to the
true market value
other commercial
day.” Burlington
for another
Northern Railroad
property.
and industrial
(b)
(7th
levy
City Superior,
or collect a tax on an assessment
Co. v.
Cir.1991).
932 F.2d
(a)
may
event,
not be made under clause
even if Defendant had
this subsection.
required
proof,
Plaintiff to meet its burden of
(c) levy
property
collect
or
an ad valorem
proven
most
can be said is Plaintiff has not
transportation property
tax on rail
at a tax
presumably
its case as a matter of law. Plaintiff
applicable
rate that exceeds the tax rate
to
permitted
engage
discovery,
would
be
to
still
commercial and industrial
in the
and,
existed,
genuine dispute
if a
of material fact
jurisdiction.
same assessment
trial,
given
proceed
opportunity
to
(d) impose another tax that discriminates
prove its case as a matter of fact.
[engaged
a rail carrier ...
in inter-
commerce].
state
tax that discrimi
the tax De
tax constituted “another
intangible property,
emption on
carrier,”
upon the value of Plaintiffs
imposed
against a rail
in violation of
fendant
nates
discriminatory in
vio
306(l)(d),
software
exempted
because the state
cer
306(l)(d).
appealed.
lation of
tain classes of commercial and industrial
jurisdiction
28 U.S.C.
arises under
Our
property, but taxed railroad cars
full. Id.
turning
questions of law
§ 1291. We review
S.Ct. at 847.
interpretation
application
may grant
held that “a State
Nation
statute de novo. Dikeman v.
federal
applicable
exemptions
from a
ad
Educators,
Inc.,
al
subjecting
tax without
valorem
Cir.1996).
affirm.3
We
of railroad
taxation
Act,
provision of the 4-R
under the relevant
*4
II.
306(l)(d)....”
335, 114
§
Id. at
S.Ct. at 846.
1994,
exempted
Prior to
Defendant
the
whole,
Interpreting the 4-R Act
aas
the
computer software from
of Plaintiffs
value
may
concluded that railroads
not chal
Court
tax assessment because
Plaintiffs
lenge property
exemptions
tax
to a
306(l)(d)
§
of the 4-R
Defendant believed
applicable
ad valorem
tax under
January
exemption.
Act
the
In
mandated
342-44,
1994, however,
§
Id. at
114
at 849-50.
Supreme
Court decided
306.
S.Ct.
Oregon
Department
That,
claims,
Revenue
v. ACF
should be the end of
of
Industries, Inc.,
332,
843,
510 U.S.
114 S.Ct.
inquiry,
necessarily,
our
and
Plaintiffs chal
(1994).
ACF,
language ACF
ACF,
exemption
Unlike the tax
at issue in
targeted group,”
an “isolated and
denied to
intangible property
Colorado’s
306(l)(d),
reject
we
Defen
might violate
applies to all commercial and industrial tax-
exemp
“property
no
dant’s assertion that
ACF,
payers
“public
other than
utilities.”
effect,
tion,”
nature or
is
regardless of its
taxpayers in
comparison
most
class were
§ 306. Other
subject
subject
disputed
large portion
tax. A
wise,
simply
circumvent
states could
property exempted
agricultural,
application,”
by enacting
“general
a tax of
not fall
the 4-R
which does
within
Act’s
“exempting” from the tax all but
and then
prop-
definition of commercial and industrial
which,
taxpayers,
as the
class of
certain
erty.
imposes
But in this
Colorado
ACF,
“exemp
really not an
noted in
Court
only upon
intangible property a narrow
all,
singling out of certain
at
but a
tion”
group
taxpayers, consisting
of interstate
discriminatory
treatment.
taxpayers
for
interests, Congress and the
interests. Such
“
at 851
S.Ct.
U.S.
noted,
‘easy prey
have
are
(“‘term
every
“exemption” does not mean
they
and local tax assessors’ in that
*5
”)
levy5 (quoting
from the reach of a
exclusion
nonresident,
‘nonvoting,
targets
lo-
often
for
Hellerstein,
and
&
State
J. Hellerstein W.
taxation,’
easily
cal
who cannot
remove them-
(5th
1988)).
ed.
We
Local Taxation 973
locality.”
selves from the
Western Air
and construe the validi
therefore
ACF
Lines,
Equalization,
Inc. v. Board
480
of
ty
intangible property tax ex
of Colorado’s
123, 131,
1038, 1043,
107
94
U.S.
S.Ct.
emption.
(1987) (quoting S.Rep.
L.Ed.2d 112
No. 91-
(1969)).
630, p.
Accordingly
3
we hold that
entirety,
§
in
the
Construing
306
its
Court
Colorado’s
tax
proper comparison
in
inferred that the
ACF
singles
part
out Plaintiff as
of
“isolated
analyzing
a tax discrimi
class in
whether
discriminatory
targeted group” for
and
in
of
against a railroad
violation
nates
306(l)(d)
§
in
of
of
4-
treatment
violation
the
306(l)(d),
§
and indus
is “other commercial
Act,
by
interpreted
R
as
ACF,
336-38,
at
taxpayers”.
trial
U.S.
enjoined
permanently
in
Defendant is
ACF.
Atchison,
846-49;
Tope
at
see also
114 S.Ct.
assessing
an ad valorem
Railway
v.
ka and
Fe
Co.
State
Santa
of
computer software.
value of Plaintiffs
Cir.1996)
Arizona,
438, 441-42
comparison class under
(holding
proper
that
AFFIRMED.
306(l)(d)
§
and indus
is “other commercial
City
taxpayers.”);
Southern
trial
Kansas
BRISCOE,
dissenting:
Judge,
Circuit
McNamara,
F.2d
Railway
v.
Co.
(5th Cir.1987) (same).
Department
In
respectfully
4-R Act de
I
dissent.
of
Industries, 510
property”
Oregon
as Revenue
v. ACF
and industrial
fines “commercial
of
proper
“property,
transportation
than
U.S.
S.Ct.
other
a nar
Supreme Court described
ty
primarily
agricultural
for
and land used
might
under which railroads
growing,
to a
row set of facts
purposes or timber
devoted
use_”
exemptions
successfully
state
or industrial
49 U.S.C.
commercial
(codi
306(l)(d)
(l)(a)
11503(a)(4).
§
4r-R Act
pursuant
and
of the
§
Both subsections
11503(b)(4)).
(l)(e)
Specifically,
§
comparison
of
fied at 49 U.S.C.
§of 306 establish a
class
to arise
that if a case were
property,” and we
the Court noted
“commercial and industrial
or as
why Congress
“in
the railroads —either alone
which
can think of no sound reason
targeted group—
part
in
of some isolated and
same class to be used
did not intend the
subject to an
only
commercial entities
analyzing
claims under sub
are
discrimination
tax[,]
say
(l)(d).
340, 114
...
could
one
ad valorem
section
See
prop
singled out railroad
(interplay between subsections
S.Ct. at 848
(l)(a)
discriminatory
Id. at
(l)(c),
erty
treatment.”
4-R Act’s definition
and the
at 851.
property”
and industrial
S.Ct.
of “commercial
challenging
opinion Burling
of
in
In
the State
Colorado’s as-
cites
Seventh Circuit
City
Superior,
of
taxes
its
ton Northern R. Co. v.
sessment
of
(7th Cir.1991)
software, plaintiff claims the facts of this case
(Superior).
F.2d 1185
In Su
precisely those described in ACF. Al- perior,
of
enacted a stat
State Wisconsin
majority agrees
plaintiff, I
though the
with
empowering municipalities
levy
ute
an oc
satisfy
plaintiff has failed to
its
conclude
cupational
operators
tax on the owners and
proof
of
under the 4-R Act.
burden
of “iron ore concentrates docks.” 932 F.2d
Notably,
only
at 1186.
there were
three such
In tax discrimination suits filed under the
state,
city
Superior,
docks
all
of
Act,
proof
gov
...
“[t]he
4-R
burden
operated by Burlington
all
Northern.
11501(e).
by
State law.” 49
erned
U.S.C.
Act,
challenge brought
a
the <4-R
provides
In this
Colorado law
“the
that,
in light
Seventh Circuit concluded
civil action shall be
burden
306(l)(d),
taxing
the states are “confined to
of the
preponderance
evidence.” Colo.Rev.
larger
taxpayer
railroads as members of
13-25-127(1) (1995);
Stat.
see
groups
of commercial or industrial
Sullivan,
—owners
Gerner
768 P.2d
703-04
income,
property, recipients
gross
recipi
(en banc)
(Colo.1989)
(discussing the burden
income,
ents
net
whatever.” Id. at 1188.
13-25-127(1)).
proof requirements
challenged
Because the
tax affected
rail
Thus, plaintiff
proving, by
has the burden of
roads, the Seventh Circuit concluded it was
evidence,
preponderance
a
of the
that the tax
(l)(d).
dicta,
in violation of subsection
306(l)(d)
at issue violated
4-
scheme
briefly
implications
court also
discussed the
specifically, plaintiff
R Act. More
must dem
a
part
tax levied
railroads
of a
as
onstrate, by
evidence,
preponderance
larger group:
challenged
“single[s]
tax scheme
railroads,
part
out”
“either
question
alone or as
Another difficult
that we need
*6
targeted group.”
today
judicial
isolated and
not
inquiry
some
decide
is how the
at
imposed
S.Ct. at 851.
should be
if
structured
the tax is
activity
on an
in which railroads are not
scheme,
challenged
Under
the ex-
sole,
principal,
but are the
actors.
emption
intangible personal property
for
Suppose a tax
per
of 5 cents
ton handled
taxpayers
afforded to Colorado
by all
in
docks
the State of Wisconsin is
utilities,
public
not
does
to
see Colo.
levied,
percent
and railroads handle 85
of
Rev.Stat.
39-22-611
which are de-
cargo
by
all the
handled
in
docks Wiscon
fined under Colorado law to include
enti-
Leuenberger,
sin. Trailer Train
Co.
ty doing
company,
business “as a railroad
[(8th
supra,
F.2d [415]
at 418
Cir.
company,
company,
airline
electric
rural elec-
1988)],holds,
view,
sensibly in our
company, telephone company, telegraph
tric
inclusion
some nonrail activities in a
of
company, gas company, gas pipeline carrier
by
class
activities dominated
railroads
of
company,
company selling
domestic water
does not
immunize a tax from
except nonprofit
retail
domestic water com-
proof
under section 806. But what sort of
panies, pipeline company,
slurry pipe-
coal
present
the railroad must
and what rebut
line,
private
company.”
or
car line
Colo.Rev.
tals or
are
taxing
defenses
available to the
4-101(3) (1995).
Stat.
Since railroads
39—
authority
questions
day.
for another
singled
by
are not
out alone
the tax scheme
added.)
in
group
(Emphasis
but are included
defined as
Id. at 1188.
utilities,”
“public
plaintiff must demonstrate
In a
post-ACF challenge
more recent
group
target-
this
of entities is
“isolated
brought by
group
of
(including
railroads
ed” as described
Court in
plaintiff) against another Wisconsin tax
ACF.
scheme,
again
the Seventh Circuit
touched
Although
specifically
upon
type
might
ACF does not
indi-
neces
be
type
proof plaintiff
sary
cate what
present
must
to demonstrate discrimination under
306(l)(d).
showing,
Burlington
to make this
other circuits have
Northern R.
v.Co.
Revenue,
developed helpful guideposts.
referring
Dept.
In
Wisconsin
tion
tively, my opinion, broadens the narrow
exception open by left majority opinion,
ACF. Under the a rail- arguably prevail can now
road 306(l)(d) by demonstrating simply that a
challenged group tax scheme affects a entities, part.
public of which railroads are a reasons,
For these I would reverse
decision the district court and remand for
entry judgment in favor of defendant.4 COMPANY, corporation, and,
V-1 OIL Richards, Plaintiffs/Appellants,
William
Roger MEANS, Defendant-Appellee.
No. 95-8057. Appeals,
United States Court
Tenth Circuit.
Aug. *8 majority opinion, requested In footnote 2 of the it is and instead the district court to rule suggested required that "even if complaint on its as a matter law. Because the proof, Plaintiff to meet its burden of the most provided by plaintiff facts were insufficient to proven that can be said is Plaintiff has not its satisfy plaintiff's proof, burden of the matter law," case as a matter of and should he therefore defendant, must be resolved in favor of engage discovery prove allowed to its case plaintiff should not be allowed a "second bite at wholly disagree. as a matter of fact. I Plaintiff apple.” willingly forego discovery chose to in this case ion at 1414. notes of the total percentage at the look determining a motion to com- targeted group defendant filed dismiss the falling on the applica- plaint specifically general one of but never filed answer the tax was whether denying allegations in com- the factual Id. at 58 n. 2. tion.” plaint. According majority, “[b]y to the Here, type one of evi- plaintiff presented plead- failing to submit an answer or other support of its district court dence to the denying allegations ing the factual of Plain- concerning claim of discrimination —affidavits complaint, tiffs Defendant admitted those alleged savings if plaintiff’s the amount of allegations, placing thus no further burden subject to was not its software factually.” prove Plaintiff to its case my opinion, assessment. property tax at 1415. This conclusion is untenable. Id. satisfy wholly insufficient to evidence is this 12(a)(4), filing Fed. R. P. Under Civ. proof. Specifically, this plaintiff’s burden of period alters the a motion dismiss time allow us to determine does not evidence filing complaint. an answer the class of railroads “dominate” whether particular, an need not be filed until answer “public utilities” under the deemed entities days the district court “denies the ten after scheme, they or are a challenged tax whether postpones disposi- dismiss] motion or its [to does it indicate part of that class. Nor small on tion until the trial the merits.” Fed. the total tax railroads’ share of whether the 12(a)(4)(A). Here, R.Civ.P. district dominant, personal intangible court denied defendant’s motion dismiss they percentage pay a small or whether granted plaintiff’s at the same time it mo- Further, wheth- it does not indicate the tax. Thus, injunction. preliminary tion for “public utilities” under er the class completely case was resolved before the be considered an “isolated” scheme could 12(a)(4)(A) ten-day period time general compared to the class group when triggered and defendant was under no obli- taxpayers Colo- commercial and industrial gation plaintiff’s to file an answer to com- Finally, not indicate whether rado. it does plaint. “public up is made the class of utilities”