Appeal from an order and judgment of the United States District Court for the Northern District of New York, McCurn, J., dismissing the appellant's complaint for lack of subject matter jurisdiction under the Tax Injunction Act, 28 U.S.C. § 1341 (1976). The jurisdictional provisions of the Emergency Petroleum Allocation Act, 15 U.S.C. §§ 751-760h (1976), incorporating § 211 of the Economic Stabilization Act of 1970, 12 U.S.C. § 1904 (note) (1976), vest exclusive appellate jurisdiction in the Temporary Emergency Court of Appeals.
Lumbard, Mansfield and Meskill, Circuit Judges. Concurring opinion by Circuit Judge Mansfield.
Plaintiff-appellant Scallop Corporation (Scallop) commenced this suit seeking a declaration that N.Y. Tax Law § 182 (McKinney Supp. 1981 & Supp. June 1982), which imposed a two percent tax on gross receipts of oil companies operating within New York, is preempted by the Emergency Petroleum Allocation Act (EPAA), 15 U.S.C. §§ 751-760h (1976), and thus void under the Supremacy Clause of the United States Constitution art. VI, cl. 2. After concluding that the Tax Injunction Act, 28 U.S.C. § 1341 (1976), deprived federal courts of subject matter jurisdiction to hear Scallop's complaint, the district court granted defendant New York State's Fed. R. Civ. P. 12(b)(1) motion and dismissed the suit. We need not comment on the merits of the district court's decision for we believe that the EPAA vests the Temporary Emergency Court of Appeals (TECA) with exclusive jurisdiction to hear this appeal. Accordingly, the appeal is dismissed for lack of jurisdiction.
On June 18, 1980, the New York Legislature imposed a two percent tax on the gross receipts of oil companies engaged in commercial pursuits within New York.*fn1 N.Y. Tax Law § 182 (McKinney Supp. 1981 & Supp. June 1982). Scallop is a Delaware corporation engaged in the business of selling residual and distillate fuel oil to public utilities, large industrial users and resellers in New York and along the east coast.*fn2 In April of 1981, the New York State Department of Taxation and Finance issued to Scallop a "Statement of Audit Adjustment and Notice of Deficiency" in the amount of $7,480,988, plus interest and penalties,*fn3 for the "willful" failure to pay the gross receipts tax for the 1980 tax year.
Scallop responded by petitioning the New York State Tax Commission for a redetermination of the alleged deficiency and by commencing an action in the United States District Court for the Northern District of New York, seeking a declaration that the gross receipts tax, N.Y. Tax Law § 182 (McKinney Supp. 1981 & Supp. June 1982), was a state price control, conflicting with and preempted by the EPAA, 15 U.S.C. §§ 751-760h (1976), and therefore void under the Supremacy Clause of the United States Constitution art. VI, cl. 2. On September 21, 1981, Scallop moved pursuant to Fed. R. Civ. P. 56 for summary judgment on the ground that no material issues of fact existed and that as a matter of law the Act should be declared unconstitutional. On the same day, the state moved pursuant to Fed. R. Civ. P. 12(b)(1) to dismiss the complaint for lack of subject matter jurisdiction. The state contended that as Scallop had raised its preemption claim "by way of defense" to the New York State Tax Commission's efforts to collect the overdue gross receipts tax, Scallop had a "plain, speedy and efficient remedy" in the state courts. Therefore, the Tax Injunction Act, 28 U.S.C. § 1341 (1976), deprived the federal courts of the subject matter jurisdiction to hear the suit.*fn4 Scallop answered by asserting that section 5(a)(1) of the EPAA, 15 U.S.C. § 754(a)(1) (1976),*fn5 incorporating section 211(a) of the Economic Stabilization Act of 1970 (ESA), 12 U.S.C. § 1904 (note) (1976),*fn6 vests the federal courts with the exclusive original jurisdiction to hear the EPAA preemption claim. Therefore, according to Scallop, as the state courts lack jurisdiction to provide a remedy, federal jurisdiction cannot be removed by the Tax Injunction Act, 28 U.S.C. § 1341 (1976).
Nevertheless, the district court granted the state's motion to dismiss, holding that the Tax Injunction Act barred Scallop's suit and denied Scallop's motion for summary judgment as moot. Scallop Corp. v. Tully, 546 F. Supp. 745, 752-53 (N.D.N.Y. 1982). Scallop filed timely notices of appeal to both this Court and TECA. On November 12, 1982, TECA granted the state's application to stay that appeal "pending disposition of the appeal concurrently filed in this action before the U.S. Court of Appeals for the 2nd Circuit." Scallop Corp. v. Tully, No. 2-39 (Temp. Emer. Ct. App. Nov. 12, 1982) (unpublished order).
The threshold issue, which we believe to be dispositive, is whether TECA has the exclusive appellate jurisdiction to consider this appeal. In Coastal States Marketing, Inc. v. New England Petroleum Corp., 604 F.2d 179 (2d Cir. 1979), we wrestled with the question of "the appropriate allocation of appellate jurisdiction between a court of appeals and the TECA." Id. at 181. Writing for a unanimous panel, Judge Newman looked first to section 5(a)(1) of the EPAA, 15 U.S.C. § 754(a)(1) (1976), incorporating section 211(b)(2) of the ESA, 12 U.S.C. § 1904 (note) (1976), which provides TECA with the "exclusive jurisdiction of all appeals from the district courts of the United States in cases and controversies arising under this title [EPAA]." We construed this language as limiting TECA's exclusive jurisdiction to those cases involving "adjudications by a district court of an 'ESA [or EPAA] issue.'" 604 F.2d at 187. Accord Francis Oil and Gas, Inc. v. Exxon Corp., 687 F.2d 484, 487 (Temp. Emer. Ct. App.), cert. denied, 459 U.S. 1010, 103 S. Ct. 365, 74 L. Ed. 2d 400, 51 U.S.L.W. 3363 (1982); United States v. Wyatt, 680 F.2d 1080, 1083-85 & n.6 (5th Cir. 1982). We subsequently defined an EPAA issue as one involving the "'construction, applicability and effect' of the EPAA." Mobil Oil Corp. v. Tully, 639 F.2d 912, 915 (2d Cir.), cert. denied, 452 U.S. 967, 101 S. Ct. 3123, 69 L. Ed. 2d 981 (1981), quoting Mountain Fuel Supply Co. v. Johnson, 586 F.2d 1375, 1382 (10th Cir. 1978), cert. denied, 441 U.S. 952, 60 L. Ed. 2d 1058, 99 S. Ct. 2182 (1979); see also United States v. Wyatt, 680 F.2d at 1083. Therefore, the controlling question here is whether Judge McCurn, in dismissing Scallop's complaint, adjudicated an EPAA issue.
We believe that even cursory reflection upon Judge McCurn's decision reveals that he expressly construed the jurisdictional provisions of the EPAA in dismissing Scallop's complaint. In its argument before the district court, Scallop asserted that its EPAA preemption claim satisfied the first clause of section 211(a) of the ESA, 12 U.S.C. § 1904 (note) (1976), which provides: "The district courts of the United States shall have exclusive original jurisdiction of cases or controversies arising under this title [ESA and EPAA]. . . ." 15 U.S.C. § 754(a)(1) (1976). Scallop contended that this language bars any New York state court from exercising jurisdiction over the preemption claim and therefore precludes the applicability of the Tax Injunction Act, 28 U.S.C. § 1341 (1976).
In rejecting Scallop's argument, the district court found that the EPAA preemption claim fits within the second clause of section 211(a) which provides: "nothing in this subsection . . . affects the power of any court of competent jurisdiction to consider, hear, and determine any issue by way of defense. . . ." 12 U.S.C. § 1904 (note) (1976) (emphasis added); Scallop Corp. v. Tully, 546 F. Supp. 745, 750-51 (N.D.N.Y. 1982). The court concluded that Scallop raised its preemption claim "by way of defense" to the New York State Tax Commission's efforts to collect the overdue gross receipts tax. As Scallop had a "plain, speedy and efficient" remedy in the New York state courts, the Tax Injunction Act deprived the federal courts of the subject matter jurisdiction to consider the claim. The court explained:
It is noteworthy that in enacting § 211(a), Congress accepted the fact that not all ESA (or EPAA) issues would be heard by federal courts in the first instance and "elected to leave such cases in the state court with federal appellate review limited to the Supreme Court." . . . This Congressional decision is codified in subsection 211(a) . . . . Given this Congressional approval of a continued role for the state courts where the EPAA issue appears "by way of defense," this Court is reluctant to adopt a construction of § 211 that would conflict with the independent Congressional judgment in the Tax Injunction Act "to transfer jurisdiction over a class of substantive federal claims from the federal district courts to the state courts . . . ." Rosewell v. LaSalle National Bank, 450 U.S. 503, 515 n.19, 101 S. Ct. 1221, 1230 n.19, 67 L. Ed. 2d 464 (1981).
Id. at 750 (citations omitted) (emphasis added).
Moreover, in dismissing Scallop's complaint, Judge McCurn expressly stated, "Scallop's defensive declaratory judgment action is not within the exclusive original jurisdiction of the federal district courts under § 211(a)." Id. at 751. In so stating, the district court clearly considered and adjudicated an EPAA issue -- the scope of the EPAA's original jurisdictional provisions. According to the straightforward test laid down in Coastal States, this EPAA issue adjudication necessarily ...