Stephen M. HAY, Wawasee Airport, Incorporated, Suzanne Bishop, and Michael Umbaugh, Plaintiffs-Appellants, v. INDIANA STATE BOARD OF TAX COMMISSIONERS, Jon Laramore, Chairman of the Indiana State Board of Tax Commissioners, Gordon E. McIntyre, member of the Indiana State Board of Tax Commissioners, and Lisa Acobert, member of the Indiana State Board of Tax Commissioners, Defendants-Appellees.
No. 02-1199
United States Court of Appeals, Seventh Circuit.
Argued Sept. 25, 2002. Decided Dec. 6, 2002.
312 F.3d 876
The state law negligence claim presents different issues. Respondeat superior liability exists in Indiana tort law. It “creates liability for a principal where it would otherwise not exist.” Interim Healthcare of Fort Wayne, Inc. v. Moyer, 746 N.E.2d 429, 431 (Ind.App.2001). Given the availability of respondeat superior liability, we are not convinced that, as a matter of law, there can be no finding of negligence in this case. Under Indiana law, to show negligence Perkins must show a duty to conform one‘s conduct to a standard of care arising from the relationship with Perkins, a failure to conform one‘s conduct to the standard of care required, and an injury caused by the failure. Trout v. Buie, 653 N.E.2d 1002 (Ind.App.1995). This is far less than Perkins must show to establish deliberate indifference under
Randy Spitaels, Kindig & Sloat, Nappanee, IN, David L. Pippen (argued), Indianapolis, IN, for Plaintiffs-Appellants.
David A. Arthur (argued), Office of the Atty. Gen., Indianapolis, IN, for Defendants-Appellees.
Before BAUER, ROVNER, and WILLIAMS, Circuit Judges.
Plaintiffs-Appellants, Stephen M. Hay, Wawasee Airport, Inc., Suzanne Bishop and Michael Umbaugh (“landowners“) object to the manner in which their real properties have been assessed for Indiana State property tax purposes. Consequently, they filed a complaint against the Indiana State Board of Tax Commissioners, Jon Laramore, as Chairman of the State Board, and Gordon McIntyre and Lisa Acobert, members of the State Board (collectively “State Board“).1
The complaint alleges that the method used to assess the landowners’ real property violates their due process rights under the
I.
Indiana‘s real property tax assessment methods have been plagued with problems and subject to extensive state court litigation. See, e.g., State Bd. of Tax Comm‘rs v. Town of St. John, 702 N.E.2d 1034 (Ind.1998). As a result of this litigation, the State Board issued new assessment regulations which became effective May 23, 2001. The plaintiffs in this case are all taxpayers in Indiana who contend that the State Board violated their constitutional rights under the
Reviewing the district court‘s dismissal for lack of subject matter jurisdiction de novo (see CCC Info. Servs., Inc. v. American Salvage Pool Assoc., 230 F.3d 342, 345-46 (7th Cir.2000)), we find that the Tax Injunction Act does indeed bar the landowners from pursuing a claim in federal court.
II.
Unlike the state courts of Indiana, the federal district courts are courts of limited jurisdiction. Before entertaining any claim, a federal district court must assure itself that it has jurisdiction to hear the matter presented to it. The Tax Injunction Act is one particular statute that limits the jurisdiction of federal district courts. It 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.
The landowners urged the district court to read their complaint liberally and accept as true the well-pleaded allegations of the complaint. In particular, they contend that the court should accept the allegation that the landowners have no plain, speedy or effective remedy in the state courts. The landowners assert that unless the de
Jurisdiction is the “power to declare law,” and without it the federal courts cannot proceed. Ruhrgas v. Marathon Oil Co., 526 U.S. 574, 577, 583 (1999). Accordingly, not only may the federal courts police subject matter jurisdiction sua sponte, they must. Id.; United States v. Smith, 992 F.2d 98, 99 (7th Cir.1993). The landowners cite portions of Commodity Trend Serv., Inc. v. Commodity Futures Trading Comm‘n, 149 F.3d 679 (7th Cir.1998), which allude to the fact that a court may look beyond the allegations of a complaint “once a defendant proffers evidence that calls the court‘s jurisdiction into question.” Id. at 685. The landowners would like us to conclude that the contrapositive of this proposition is also true—that the court cannot look beyond the allegations of the complaint when the defendant has not proffered evidence that calls the court‘s jurisdiction into question. This is not what Commodity Trend or its progeny say, however. See Commodity Trend Serv., Inc., 149 F.3d at 685 (“On a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1), the court is not bound to accept the truth of the allegations in the complaint. Rather, the plaintiff has the obligation to establish jurisdiction by competent proof, and the court may properly look to evidence beyond the pleadings in this inquiry.“). See also Bastien v. AT & T Wireless Servs., Inc., 205 F.3d 983, 990 (7th Cir.2000) (same). Given the court‘s responsibility to police jurisdiction sua sponte, Wright and Miller assert that it is “not appropriate” for a court to evaluate a Rule 12(b)(1) motion by accepting all allegations as true. 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1350, at 149 (2d ed. Supp. 2002). “Accordingly, upon a challenge to the court‘s jurisdiction by a party, the court should conduct a careful inquiry and make a conclusive determination whether it has subject matter jurisdiction or not....” Id.2 We conclude that the district court had not only the right, but the duty to look beyond the allegations of the complaint to determine that it had jurisdiction to hear the landowners’ claim.
Having concluded that the federal courts properly may look beyond the factual allegations of the complaint, we now do so to determine whether in fact the
Although the landowners claim that the remedy provided by Indiana is not adequate, the Supreme Court has set forth minimal procedural requirements for adequacy, demanding only a “full hearing and judicial determination at which [a taxpayer] may raise any and all constitutional objections to the tax.” Rosewell, 450 U.S. at 512-15. The district court must look at the totality of all of the remedies available to a taxpayer to determine whether or not taxpayers have the opportunity to raise constitutional challenges. Colonial Pipeline Co. v. Collins, 921 F.2d 1237, 1245 (11th Cir.1991).
Under Indiana law, a taxpayer can seek review of a property tax assessment by the County Property Tax Assessment Board of Appeals (
Viewing these statutory mechanisms in light of the requirements of Rosewell, we conclude that Indiana provides a plain, speedy and efficient remedy for those who wish to contest their real property tax assessment. Indeed, we have come to the same conclusion twice before based on an examination of now-repealed, but substantially similar state court review mechanisms. See Miller v. Bauer, 517 F.2d 27 (7th Cir.1975); Sacks Bros. Loan Co. v. Cunningham, 578 F.2d 172 (7th Cir.1978). In Miller, the Court noted that a taxpayer could appeal the assessment to the County Board of Review, then to the State Board, a county circuit court, to the Indiana Supreme Court, and finally to the United States Supreme Court. Id. at 32. Similarly, in Sacks, the court noted that review
Despite the availability of these remedies, the taxpayers complain that the remedy is insufficient because the Indiana Tax Court will no longer accept facial constitutional challenges to the former State Board regulations. The Indiana Supreme Court has already declared that the cost schedules at issue violate the Property Taxation Clause of the Indiana Constitution because they lack ascertainable standards. Town of St. John, 702 N.E.2d at 1043. The Indiana Tax Court has decided not to accept further facial challenges to these provisions in order to prevent taxpayers from going into court, stating that the former system is facially unconstitutional due to a lack of ascertainable standards (as the court has already found) and thereby obtaining an assured reversal of the taxpayer‘s property assessment. Dana Corp. v. State Bd. of Tax Comm‘rs, 694 N.E.2d 1244, 1247 (Ind. Tax Ct.1998). This rule makes sense. Without it, every taxpayer could file a facial challenge in the Indiana Tax Court, obtain a declaration that the former assessment system was unconstitutional, and walk away with a reversal of the challenged tax assessment. The refusal to hear facial challenges, however, does not bar taxpayers from launching constitutional challenges to their property assessments. The tax courts in Indiana have heard and will continue to hear “as applied” challenges to property tax assessments made under the old system. Id. at 1247; see also Bishop v. State Bd. of Tax Comm‘rs, 743 N.E.2d 810, 813 (Ind. Tax Ct.2001). As long as a taxpayer can present specific evidence that an assessment is unconstitutional as applied to her, she can obtain a reversal of her property tax assessment. Id. at 1247. There is no evidence in the record that any of the plaintiffs have been prohibited from bringing an “as applied” challenge in the state court system, and thus the state court remedies are not inadequate in this manner.
Nor do we find the state court remedies deficient because the Indiana Tax Court will apply the new regulations prospectively only. See Lawyer v. Hilton Head Pub. Serv. Dist. No. 1, 220 F.3d 298, 305 (4th Cir.2000) (finding, in a similar scenario, that the decision to allow only prospective relief does not make the remedy inadequate). Such an allegation is really a complaint about a substantive defect in the state court‘s remedy, and Rosewell requires only that states maintain procedurally adequate remedies. Rosewell, 450 U.S. at 512. Moreover, the fact that Indiana has put a new constitutional system into place as of May 2001 after finding defects in its previous assessment procedure further establishes that Indiana is capable of administering its own tax system without interference from the federal courts. Finally, taxpayers can continue to pursue “as applied” challenges to any assessment made under the old system. For these reasons we conclude that the State of Indiana provides a plain, speedy and efficient remedy for taxpayers who quarrel with the assessment they have received. The federal courts, therefore, have no jurisdiction to consider the landowners’ claims.
As a final matter, the landowners argue in their reply brief that the district
III.
For the reasons stated above, we affirm the district court‘s grant of the motion to dismiss for lack of subject matter jurisdiction.
AFFIRMED.
No. 01-4226.
United States Court of Appeals, Seventh Circuit.
Argued Sept. 27, 2002. Decided Dec. 6, 2002.