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December 14, 2004.

ROBERT L. SCHULZ, et al., Plaintiffs,

The opinion of the court was delivered by: LAWRENCE KAHN, District Judge


In the present case, Plaintiffs, real property owners in Washington and Warren Counties (collectively "Plaintiffs" or "Property Owners"), move the Court for a preliminary injunction that would require Defendants to (1) remove Plaintiffs' names from the roll of delinquent taxpayers; (2) prohibit the assessment of financial penalties and interest on Plaintiffs' real property; (3) prohibit the initiation of foreclosure proceedings on Plaintiffs' real property; and (4) further prohibit Defendants from taking any other retaliatory action against Plaintiffs.

Defendants, the New York counties of Washington and Warren, as well as several public officials from those counties (collectively "Counties"), contend that this Court lacks subject matter jurisdiction over the instant action, pursuant to the Tax Injunction Act, 28 U.S.C. § 1341. The Counties further claim that even if subject matter jurisdiction is proper, the preliminary injunction must be denied because there is no irreparable harm to the Property Owners and no likelihood of success on the merits. I. BACKGROUND

  The Plaintiffs contend that the State Legislature passed enabling legislation which allows the real property in the Counties to be taxed in order to pay the principal of and interest on the debt obligations of a public corporation. Plaintiffs' Mem. (Dkt. No. 3) at 1. Specifically, the enabling legislation, adopted as Chapter 682 of the Laws of 1985 (hereinafter "Chapter 682"), allowed Warren and Washington Counties to create a public corporation, the Washington and Warren Counties Industrial Development Agency ("IDA"), which was to finance a solid waste resource recovery facility by issuing bonds on which the IDA was solely obligated. See Schulz v. N.Y. State Leg., 5 A.D.3d 885, 886-87 (N.Y.App. Div. 2004). Plaintiffs contend that Chapter 682 was passed without a home rule resolution, a procedure mandated by the New York Constitution.

  By way of background, the "home rule" provision of the New York Constitution has been explained by the New York Court of Appeals as follows:
Article IX, § 2 of the State Constitution grants the Legislature authority to enact a "general law" relating to the property, affairs or government of local governments (NY Const, art IX, § 2[b][2]). A general law is defined as a "law which in terms and in effect applies alike to all counties . . ." (NY Const, art IX, § 3[d][1]). In contrast, a "special law" is defined as a "law which in terms and effect applies to one or more, but not to all, counties . . ." (NY Const, art IX, § 3[d][4]). Article IX further provides that a special law relating to the property, affairs or government of any local government may not be enacted without a "home rule message" from the locality or the localities affected by the law (NY Const, art IX, § 2[b][2]). A home rule message is a "request of two-thirds of the total membership of [the local] legislative body or [a] request of its chief executive officer concurred in by a majority of such membership" id.
Patrolmen's Benevolent Assoc. of the City of New York v. City of New York, 767 N.E.2d 116, 120 (N.Y. 2001).
  The Property Owners contend that Chapter 682, which dictated the IDA's financing of the waste facility, was a special act applying only to select New York counties, but because it was not passed with a home rule resolution, it is unconstitutional. The Property Owners claim that a home rule resolution was avoided because of the conduct of the Chairman of the Washington County Board of Supervisors. The Chairman, in a letter he wrote directly to Governor Cuomo, explained that he had received the full approval and support of the Board of Supervisors for Chapter 682's financing arrangement and requested that the Governor sign it into law. Chapter 682 was enacted. At the preliminary injunction hearing, however, Washington County conceded that contrary to the Chairman's letter, a home rule resolution relating to this legislation was never passed.*fn2

  To voice their objection to what they perceived as the unconstitutional enactment of Chapter 682, the Property Owners petitioned the Counties for a "Redress of Grievances," as provided for in the First Amendment. It appears as though those Petitions for Redress of Grievances were in the form of letters written by Plaintiff Schulz in February 2003, in addition to public statements he made around that time before the Board of Supervisors of Washington County. See Exhibits H, I (Dkt. No. 1). Having received no response to their Petition for Redress of Grievances, the Property Owners decided to place their real property taxes into a trust account until their concerns relating to the unconstitutionality of Chapter 682 was resolved, rather than paying their taxes directly to the Counties as they came due.

  For failing to pay their taxes, the Property Owners have had their names added to a list of delinquent real property taxpayers in Warren and Washington Counties. According to the affidavit of Shelly Van Nostrand, a Legal Assistant in the Warren County Attorney's Office, Plaintiff Schulz is the only one who appears to be a delinquent taxpayer in Warren County. Van Nostrand Aff. (Dkt No. 10). According to the affidavit of Washington County Treasurer, Phyllis Cooper, all of the Plaintiff Property Owners are delinquent in taxes on their respective properties owned in Washington County. Cooper Aff. (Dkt. No. 8) at ¶ 2. On September 8, 2004, the Property Owners received notice from Washington County that their names would be added to the public list of delinquent taxpayers on November 1, 2004 if they did not remit the taxes due. Id. at ¶ 3. When payment was not received, their names were added to that list on or about November 15, 2004. Id at ¶ 4. Washington County has further informed the Court that if the taxes remain unpaid, on or about June 27, 2005, notice concerning the petitions of foreclosure will be sent to the taxpayers, and as of October 1, 2005, additional penalties will be assessed, and the County will file those petitions of foreclosure.

  The Property Owners bring the present action in federal court because they claim that the actions that the Counties have taken against them for their failure to pay their property taxes are retaliation for them voicing their opinions that Chapter 682 was passed in violation of the New York State Constitution. This retaliation, they claim, violates their First and Fourteenth Amendment rights.

  The Counties respond that the actions which they have taken are not in retaliation for the Property Owners' voicing their opposition in the Petitions for Redress of Grievances, but rather that these actions were taken in accordance with the mandates of New York's Real Property Tax Law. Specifically, New York Real Property Tax Law § 1122 requires Counties to place delinquent real property taxpayers on a publicly published list.


  (a) Subject Matter Jurisdiction

  Plaintiffs contend that jurisdiction is proper because there is a federal question based on the First Amendment retaliation claim. Defendants assert, however, that this Court lacks subject matter jurisdiction pursuant to the Tax Injunction Act, 28 U.S.C. § 1341, which reads:
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.
See Smith v. N.Y. State Dep't. of Taxation and Fin., 79 Fed. Appx. 497 (2d Cir. 2003) (holding that the opportunity to bring suit pursuant to § 1983 in state court, as well as New York's declaratory judgment actions, provide plain, speedy and efficient remedies that require dismissal under § 1341) (unpublished); see also Schulz v. Washington County Board of Supervisors, 1998 U.S. Dist. LEXIS 22299 (N.D.N.Y. 1998) (raising issue of jurisdiction under Tax Injunction Act sua sponte to hold that action is dismissed) (Scullin, J).

  It is clear that federal courts retain subject matter jurisdiction in those cases involving state tax schemes where state remedies are inadequate. See Kraebel v. N.Y.C. Dept. of Hous. Pres. and Dev., 959 F.2d 395, 400 (2d Cir. 1992). Remedies are inadequate where they are not "plain, speedy and efficient," as explained in § 1341, or if they are incomplete. Id. (citing to Fair Assessment in re Al Estate Ass'n v. McNary, 454 U.S. 100, 116 (1981)).

  The Counties explain that the relief the Property Owners seek is to suspend and restrain the Counties' assessment of taxes. By its terms, § 1341 deprives this Court of subject matter jurisdiction over such an action. Moreover, the Property Owners, specifically Plaintiff Schulz, have brought several actions in state court regarding the constitutionality of Chapter 682, all of which have been dismissed by the courts. There ...

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