Michael BEHE; Mark F. Brancato; Frank Husted; Joseph J.
Kelly; Robert J. Lorenz; Edward Moran, Jr.;
John C. Thomas; Deborah L. Thomas, h/w
v.
CHESTER COUNTY BOARD OF ASSESSMENT APPEALS; County of Chester.
Michael Behe, Mark F. Brancato, Frank Husted, Joseph J.
Kelly, Robert Lorenz, Edward Moran, Jr., John C.
Thomas and Deborah L. Thomas, h/w, Appellants.
No. 91-1541.
United States Court of Appeals,
Third Circuit.
Submitted Under Third Circuit Rule 12(6)
Dec. 10, 1991.
Decided Dec. 23, 1991.
Michael G. Trachtman, Ethan N. Halberstadt, Powell, Trachtman, Logan & Carrie, King of Prussia, Pa., for appellants.
John S. Halsted, Thomas L. Whiteman, Office of County Sol., West Chester, Pa., for appellees.
Before BECKER, GREENBERG and GARTH, Circuit Judges.
OPINION OF THE COURT
GARTH, Circuit Judge:
On this appeal, we affirm the District Court's order which dismissed for lack of subject matter jurisdiction the action brought by appellant homeowners against the County of Chester Board of Assessment Appeals. Because we conclude that the Tax Injunction Act bars federal jurisdiction over the homeowners claims, we affirm.
I.
The plaintiffs in this case, owners of recently built homes in Chester County, Pa. ("Homeowners "), brought a § 1983 suit in the District Court for the Eastern District of Pennsylvania alleging that Chester County and its Board of Assessment Appeals annually failed to revise property assessments as required by Pennsylvania law. This failure, Homeowners allege, creates two unfair results: first, the assessed values of newer properties--and the resultant property taxes that must be paid on those properties--are much higher than those of older properties. Second, as the property values of the older properties remain artificially deflated, the county is forced to hike everyone's property tax rate in order to collect enough money.
Homeowners claim that this alleged failure to reassess property values on an annual basis violated Homeowners' substantive due process and equal protection rights under the U.S. Constitution and also violated Homeowners' rights under the Pennsylvania Constitution, which requires that all taxes "be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax," and under the Third Class County Assessment Law, which requires annual assessments. Homeowners did not seek monetary relief, but rather a court order requiring Defendants to conduct the property tax assessments according to law.
The district court dismissed the complaint for lack of subject matter jurisdiction. The district court provided three reasons for the dismissal: first, the court held that under the Tax Injunction Act, 28 U.S.C. § 1341, taxpayers may not challenge the validity of a state tax system in federal court if the state could provide a "plain, speedy and efficient" remedy. Second, the district court held that the principle of comity barred the court from asserting jurisdiction. Third, the district court held that even if it did have jurisdiction over some of the claims brought by the Homeowners, it would decline to exercise such jurisdiction.
On appeal, Homeowners argue that there is no "plain, speedy and efficient remedy" for their claims in Pennsylvania state courts, and that therefore (1) their claims are not barred by the Tax Injunction Act; (2) their claims are not barred from federal court by principles of comity; and (3) the abstention doctrines do not apply.
At least four of the Homeowners have filed an almost identical action which is currently pending in the Chester County Court of Common Pleas. That action contests the alleged inequality of assessment of property in the county resulting from the county's failure to reassess annually properties in the county. (Brancato v. County of Chester, No. 91-00563; Thomas v. County of Chester, No. 91-3533).II.
The Tax Injunction Act (the "Act ") provides that:
[t]he district courts shall not enjoin, suspend, or restrain the assessment, levy or collection of any tax where a plain, speedy and efficient remedy may be had in the court of such State.
28 U.S.C. § 1341. The Supreme Court, emphasizing that the Act "has its roots in equity practice, in principles of federalism, and in recognition of the imperative need of a State to administer its own fiscal operations," Tully v. Griffin, Inc.,
The Act divests the District Court of jurisdiction to provide the requested injunctive and declaratory relief requested unless Pennsylvania is found not to provide a "plain, speedy and efficient remedy." The Supreme Court has explained that the "plain, speedy and efficient remedy" exception was designed to require that the state remedy satisfy certain procedural criteria; the State remedy need not be the best or most convenient one. See Rosewell v. LaSalle National Bank,
An examination of (1) relevant causes of action cognizable in Pennsylvania courts and (2) Pennsylvania procedures for appealing tax assessments, reveals that Pennsylvania provides an adequate remedy for Homeowners.
A.
The Pennsylvania Constitution provides that:
[a]ll taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax, and shall be levied and collected under general laws.
Pa. Const. Art. VIII § 1. This so-called "uniformity clause" provides a cause of action in Pennsylvania courts for Pennsylvania taxpayers who claim that their property has been assessed at a higher percentage of fair market value than have other properties in their County. See, e.g., McKnight Shopping Center, Inc. v. Bd. of Property Assessment, Appeal & Review,
We have already concluded that the Pennsylvania Constitution provides as much protection against unequal taxation as the U.S. Constitution. In Garrett v. Bamford,
[W]e fail to perceive any relief which appellants can request through a federal claim bottomed on the Fourteenth Amendment that is not guaranteed them by Pennsylvania's Constitution, statutes, and case law. It is the very essence of the county real estate assessment schema, mandated by the Pennsylvania Constitution, that there be a uniform method of assessing real estate for local tax purposes....
We are therefore persuaded that the precise Equal Protection right of uniformity which appellants wish to assert in the federal courts is guaranteed by the Pennsylvania Constitution. To vindicate the right of uniformity ... is the major function of the Boards of Assessments and the courts in reviewing real estate assessments.
Garrett II,
In addition, nothing prevents Homeowners from suing in state court pursuant to the U.S. Constitution. "The power to tax, in Pennsylvania, is ... limited by the Pennsylvania and United States Constitutions." Commonwealth v. Schellenberger,
Homeowners argue that "there is no indication that those whose property assessments are accurate (i.e., currently assessed) could seek and obtain [in state court] an inaccurate assessment so as to be placed on an equal footing with other, inaccurately valued properties (i.e., those with outdated assessments)." Brief for Plaintiffs at 13. This is incorrect. Pennsylvania Courts have held that taxpayers may demonstrate an unconstitutional lack of uniformity by proving that the actual value of other taxpayers' properties is different from that determined by the assessors. In McKnight Shopping Center, supra, the Pennsylvania Supreme Court held that the trial court had improperly rejected evidence of the actual value and assessments of other shopping centers offered in proof of the alleged overassessment of the shopping center in question. See also Feist v. Luzerne County Bd. of Assessment Appeals,
If Homeowners demonstrate to a Pennsylvania Court (or to the Board of Assessment Appeals) that newer homes in the County are assessed at fair market value whereas older properties are assessed below fair market value, the "uniformity clause" requires that Homeowners' assessments be lowered. The Pennsylvania Supreme Court has held that even a legal requirement that real estate be assessed according to its actual value "is, of course, subordinate to the constitutional requirement of uniformity." Buhl Foundation v. Bd. of Property Assessment, Appeals & Review,
B.
Pennsylvania law allows a dissatisfied taxpayer to file an appeal with the Board of Assessment Appeals. 72 P.S. § 5349(c). Parties must be notified of hearings and the Board may "compel the attendance of witnesses and the furnishing of documents." 72 P.S. § 5349(d).
Homeowners cite several Pennsylvania cases that, in their view, support the proposition that Pennsylvania courts do not provide an adequate forum for constitutional challenges to state taxes. See Brief for Appellants at 10-12. However, the cases cited by Homeowners simply state that a constitutional claim must first be brought to the Board of Assessment. The constitutional claim may then be appealed up through the state court system. As the Supreme Court of Pennsylvania has explained, Constitutional objections to State taxes should be brought first to "the administrative body which has responsibility for applying the statute on a day-by-day basis.... It may well be that all problems will be worked out at that stage, and neither party will be required to resort to the judicial system." Rochester & Pittsburgh Coal Company,
An adverse decision by the Board may be appealed to the Court of Common Pleas for de novo review. 72 P.S. § 5350. The Court of Common Pleas, in reviewing an appeal from the Board, is charged with "mak[ing] such orders and decrees ... [that] seem just and equitable having due regard to the valuation and assessment made of other real estate in such county or city," 72 P.S. 5020-518.1.1 We see no reason why the powers conferred on the Common Pleas court by the statute would not permit the court to enjoin the collection of taxes countywide if it found the system of assessment unconstitutional, the injunction to last until county officials rectified the situation by reassessment. This procedure would also satisfy the Homeowners' alternative (and well pleaded) concern--that the countywide millage is artificially high (placing an additional burden on Homeowners) because of an unconstitutional countywide assessment system. A litigant whose arguments fail in the Court of Common Pleas may appeal within the State court system and, with regard to federal Constitutional arguments, ultimately to the Supreme Court of the United States. See Long v. Kistler,
Homeowners' suit thus properly belongs in the Pennsylvania state courts.2 Because we hold that the Tax Injunction Act prohibited the District Court from exercising jurisdiction, we need not reach the question of whether comity principles and the abstention doctrines would also preclude federal jurisdiction over this case.
III.
We will affirm the Order of the District Court dismissing the complaint for lack of subject matter jurisdiction.
Notes
Section 5020-518.1 of the General County Assessment Law is applicable to property assessment appeals in Third Class Counties. See Truck Terminal Motels of America, Inc., v. Berks County Bd. of Assessment Appeals,
As we have previously noted in text, several of the Homeowners have, in fact, already chosen to pursue that remedy and have appeals pending in the Court of Common Pleas of Chester County. (Brancato, et al v. County of Chester, et al, No. 91-00563; John C. Thomas and Deborah L. Thomas v. County of Chester, et al, No. 91-03533). The Homeowners have raised their federal Constitutional claims in these appeals