The Supreme Court/The Supreme Court.iso/pc/ascii/1994/94_688/94_688.zo

Text File | 1995-06-19 | 15.0 KB | 299 lines

NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D.C. 20543, of any typographical or other formal errors, in order that
corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
--------
No. 94-688
--------
NATIONAL PRIVATE TRUCK COUNCIL, INC.,
et al., PETITIONERS v. OKLAHOMA
TAX COMMISSION et al.
on writ of certiorari to the supreme court
of oklahoma
[June 19, 1995]

  Justice Thomas delivered the opinion of the Court.
  In the Oklahoma state courts, petitioners successfully
challenged certain Oklahoma taxes as violating the
-dormant- commerce clause.  Although the Oklahoma
Supreme Court ordered respondents to award refunds
pursuant to state law, it also held that petitioners were
not entitled to declaratory or injunctive relief under 42
U. S. C. 1983 and, accordingly, that they could not
obtain attorney's fees under 42 U. S. C. 1988(b) (1988
ed., Supp. V).  Petitioners argue that this holding
violates the Supremacy Clause, U. S. Const., Art. VI, cl.
2.  We affirm.

                            I
  In 1983, Oklahoma imposed third-structure taxes
against motor carriers with vehicles registered in any of
25 States.  It did so in order to retaliate against those
States that had imposed discriminatory taxes against
trucks registered in Oklahoma.  In December 1984,
petitioners filed a class action in an Oklahoma trial
court, arguing that the taxes violated the dormant
commerce clause and the Privileges and Immunities
Clause of Art. IV, 2, cl. 1.  Pursuant to state law and
1983, petitioners sought declaratory and injunctive
relief as well as refunds of taxes paid.  In addition, they
sought attorney's fees under both state law and 1988.
  The trial court upheld the constitutionality of the
taxes, but the Oklahoma Supreme Court reversed and
held that the taxes were invalid under our dormant
commerce clause jurisprudence.  Private Truck Council
v. Oklahoma Tax Comm'n, 806 P. 2d 598 (1990).  The
court awarded refunds under state law, but declined to
award relief under 1983 and declined to award attor-
ney's fees under 1988.  In so ruling, it relied on
Consolidated Freightways Corp. v. Kassel, 730 F. 2d
1139 (CA8), cert. denied, 469 U. S. 834 (1984), which
held that 1983 may not be used to secure remedies for
dormant commerce clause violations.
  After the Oklahoma Supreme Court's decision, we held
that one of the -rights, privileges or immunities-
protected by 1983 was the right to be free from state
action that violates the dormant commerce clause.  See
Dennis v. Higgins, 498 U. S. 439 (1991).  Accordingly,
we granted the taxpayers' petition for certiorari, vacated
the judgment, and remanded the case for further
consideration in light of Dennis.  501 U. S. 1247 (1991).
  On remand, the Oklahoma Supreme Court once again
held that petitioners were not entitled to relief under
1983.  879 P. 2d 137 (1994).  The court noted that
because adequate remedies existed under state law, the
Tax Injunction Act, 28 U. S. C. 1341, would have
precluded petitioners from seeking an injunction in
federal court.  879 P. 2d, at 140-141.  Although the Tax
Injunction Act does not apply in state courts, the
Oklahoma Supreme Court relied upon the principle of
-intrastate uniformity- to conclude that a state court
need not grant injunctive or declaratory relief under
1983 when such remedies would not be available in
federal court.  Id., at 141 (quoting Felder v. Casey, 487
U. S. 131, 153 (1988)).  We granted certiorari to resolve
a conflict among the state courts as to whether, in tax
cases, state courts must provide relief under 1983 when
adequate remedies exist under state law.

                           II
  We have long recognized that principles of federalism
and comity generally counsel that courts should adopt a
hands-off approach with respect to state tax administra-
tion.  Immediately prior to the enactment of 1983, the
Court articulated the reasons behind the reluctance to
interfere:
-It is upon taxation that the several States chiefly
rely to obtain the means to carry on their respective
governments, and it is of the utmost importance to
all of them that the modes adopted to enforce the
taxes levied should be interfered with as little as
possible.-  Dows v. City of Chicago, 11 Wall. 108,
110 (1871).
Since the passage of 1983, Congress and this Court
repeatedly have shown an aversion to federal interfer-
ence with state tax administration.  The passage of the
Tax Injunction Act in 1937 is one manifestation of this
aversion.  See 28 U. S. C. 1341 (1988 ed.) (prohibiting
federal courts from enjoining the collection of any state
tax -where a plain, speedy and efficient remedy may be
had in the courts of such State-).  We subsequently
relied upon the Act's spirit to extend the prohibition
from injunctions to declaratory judgments regarding the
constitutionality of state taxes.  See Great Lakes Dredge
& Dock Co. v. Huffman, 319 U. S. 293 (1943).  Later,
we held that the Tax Injunction Act itself precluded
district courts from awarding such declaratory judg-
ments.  See California v. Grace Brethren Church, 457
U. S. 393, 407-411 (1982).
  The reluctance to interfere with state tax collection
continued in McKesson Corp. v. Division of Alcoholic
Beverages and Tobacco, Fla. Dept. of Business Regula-
tion, 496 U. S. 18 (1990), in which we confirmed that
the States are afforded great flexibility in satisfying
the requirements of due process in the field of taxation.
As long as state law provides a -`clear and certain
remedy,'- id., at 51 (quoting Atchison, T. & S. F. R. Co.
v. O'Connor, 223 U. S. 280, 285 (1912)), the States may
determine whether to provide predeprivation process
(e.g., an injunction) or instead to afford post-deprivation
relief (e.g., a refund), 496 U. S., at 36-37.  See also
Harper v. Virginia Dept. of Taxation, 509 U. S. ___, ___
(1993) (slip op., at 12-13).  Of particular relevance to
this case, Fair Assessment in Real Estate Assn., Inc. v.
McNary, 454 U. S. 100, 116 (1981), held that because of
principles of comity and federalism, Congress never
authorized federal courts to entertain damages actions
under 1983 against state taxes when state law fur-
nishes an adequate legal remedy.
  Seeking to overcome the longstanding federal reluc-
tance to interfere with state taxation, petitioners invoke
the Supremacy Clause and the straightforward proposi-
tion that it requires state courts to enforce federal law,
here 1983 and 1988.  When they have jurisdiction,
state courts have been compelled to provide federal
remedies, notwithstanding the existence of less intrusive
state-law remedies.  See, e.g., Monroe v. Pape, 365 U. S.
167, 183 (1961).  Accordingly, petitioners argue that we
should require the Oklahoma Supreme Court to award
equitable and declaratory relief under 1983 and
attorney's fees under 1988.
  For purposes of this case, we will assume without
deciding that state courts generally must hear 1983
suits.  But this does not necessarily mean that, having
found a violation of federal law, state courts must award
declaratory and injunctive relief under 1983 in tax
cases.  Though federal courts are obliged to hear 1983
claims, it is clear that they may not award damages or
declaratory or injunctive relief in state tax cases when
an adequate state remedy exists.  See Fair Assessment,
supra, at 116; Great Lakes Dredge & Dock Co. v.
Huffman, supra, at 293; Matthews v. Rodgers, 284 U. S.
521, 525 (1932); 28 U. S. C. 1341 (1988 ed.).
  As we explain more fully below, the background
presumption that federal law generally will not interfere
with administration of state taxes leads us to conclude
that Congress did not authorize injunctive or declaratory
relief under 1983 in state tax cases when there is an
adequate remedy at law.

                           III
  Petitioners correctly point out that the Tax Injunction
Act does not prohibit state courts from entertaining
1983 suits that seek to enjoin the collection of state
taxes.  Nor can a desire for -intrastate uniformity-
permit state courts to refuse to award relief merely
because a federal court could not grant such relief.  As
petitioners note, it was not until 1875 that Congress
provided any kind of general federal-question jurisdiction
to the lower federal courts.  See Palmore v. United
States, 411 U. S. 389, 401 (1973).  -Until that time, the
state courts provided the only forum for vindicating
many important federal claims.-  Ibid.  Because of the
Supremacy Clause, state courts could not have refused
to hear cases arising under federal law merely to ensure
-uniformity- between state and federal courts located
within a particular state.
  In determining whether Congress has authorized state
courts to issue injunctive and declaratory relief in state
tax cases, we must interpret 1983 in light of the strong
background principle against federal interference with
state taxation.  Given this principle, we hold that 1983
does not call for either federal or state courts to award
injunctive and declaratory relief in state tax cases when
an adequate legal remedy exists.  Petitioners do not
dispute that Oklahoma has offered an adequate remedy
in the form of refunds.  Under these circumstances, the
Oklahoma courts' denial of relief under 1983 was
consistent with the long line of precedent underscoring
the federal reluctance to interfere with state taxation.
  Our cases since Dows have uniformly concluded that
federal courts cannot enjoin the collection of state taxes
when a remedy at law is available.  See, e.g., Matthews
v. Rodgers, supra, at 525 (a -scrupulous regard for the
rightful independence of state governments . . . and a
proper reluctance to interfere by injunction with their
fiscal operations, require that [injunctive] relief should
be denied in every case where the asserted federal right
may be preserved without it-); Singer Sewing Machine
Co. of New Jersey v. Benedict, 229 U. S. 481, 485 (1913);
Boise Artesian Hot & Cold Water Co. v. Boise City, 213
U. S. 276, 282 (1909).  Until Fair Assessment, one could
have construed these cases as concerning only the
equitable powers of the federal courts.  See 454 U. S.,
at 108-111.  In Fair Assessment, however, the principle
of non-interference with state taxation led us to construe
1983 narrowly.  We held that 1983 does not permit
federal courts to award damages in state tax cases when
state law provides an adequate remedy.  See id., at 116.
Although there was much discussion of the limitations
on equity power, that discussion was useful only insofar
as it provided a background against which 1983 must
be interpreted.  Indeed, because Fair Assessment
considered whether damages were available under 1983,
the principle of equitable restraint that we discussed
could have no direct application in that case.
  In concluding that Congress did not authorize damage
actions in state tax cases brought in federal court, we
found no evidence that Congress intended 1983 to
overturn the principle of federalism invoked in Dows and
subsequently followed by the courts.  Construing 1983,
we held that the case was -controlled by principles
articulated even before enactment of 1983 and followed
in later decisions.-  Id., at 115-116.
  Just as Fair Assessment relied upon a background
principle in interpreting 1983 to preclude damage
actions in tax cases brought in federal court, so we rely
on the same principle in interpreting 1983 to provide
no basis for courts to award injunctive relief when an
adequate legal remedy exists.  Our interpretation is sup-
ported not only by the background principle of federal
non-interference discussed in Fair Assessment, but also
by the principles of equitable restraint discussed at
length in that case.  See id., at 107-109.  Whether a
suit is brought in federal or state court, Congress simply
did not authorize the disruption of state tax administra-
tion in this way.
  To be sure, the Tax Injunction Act reflects the con-
gressional concern with federal court interference with
state taxation, see 28 U. S. C. 1341 (1988 ed.), and
there is no similar statute divesting state courts of the
authority to enter an injunction under federal law when
an adequate legal remedy exists.  But this silence is
irrelevant here, because we do not understand 1983 to
call for courts (whether federal or state) to enjoin the
collection of state taxes when an adequate remedy is
available under state law.  Given the strong background
presumption against interference with state taxation,
the Tax Injunction Act may be best understood as but a
partial codification of the federal reluctance to interfere
with state taxation.  See Fair Assessment, 454 U. S., at
110 (-[T]he principle of comity which predated the Act
[1341] was not restricted by its passage-).  After all, an
injunction issued by a state court pursuant to 1983 is
just as disruptive as one entered by a federal court.
  The availability of an adequate legal remedy renders
a declaratory judgment unwarranted as well.  In Great
Lakes, we observed that -considerations which have led
federal courts of equity to refuse to enjoin the collection
of state taxes . . . require a like restraint in the use of
the declaratory judgment procedure.-  319 U. S., at 299.
The declaratory judgment procedure -may in every
practical sense operate to suspend collection of the state
taxes until the litigation is ended,- ibid., and thus must
be treated as being no less potentially disruptive than
an injunction.  See also Grace Brethren Church, 457
U. S., at 408 (-there is little practical difference between
injunctive and declaratory relief-).  Cf. Samuels v.
Mackell, 401 U. S. 66 (1971) (holding that prohibition
against enjoining pending state criminal proceedings
applies to granting of declaratory relief).  Declaratory
relief in state tax cases might throw tax administration
-into disarray, and taxpayers might escape the ordinary
procedural requirements imposed by state law.-  Perez
v. Ledesma, 401 U. S. 82, 128, n. 17 (1971) (Brennan,
J., concurring in part and dissenting in part).  We
simply do not read 1983 to provide for injunctive or
declaratory relief against a state tax, either in federal
or state court, when an adequate legal remedy exists.
  Of course, nothing we say prevents a State from em-
powering its own courts to issue injunctions and declar-
atory judgments even when a legal remedy exists.
Absent a valid federal prohibition, state courts are free
to issue injunctions and declaratory judgments under
state law.  When a litigant seeks declaratory or injunc-
tive relief against a state tax pursuant to 1983, how-
ever, state courts, like their federal counterparts, must
refrain from granting federal relief under 1983 when
there is an adequate legal remedy.
  Because petitioners had an adequate legal remedy, the
Oklahoma courts could not have awarded either declara-
tory or injunctive relief against the state taxes under
1983.  It follows that when no relief can be awarded
pursuant to 1983, no attorney's fees can be awarded
under 1988.  Accordingly, the judgment of the Okla-
homa Supreme Court is
                                              Affirmed.