United States District Court, S.D. New York
August 5, 2005.
COMMUNITY HOUSING MANAGEMENT CORP., INC., CARRINGTON ARMS HOUSING DEVELOPMENT FUND COMPANY, INC. LINCOLN TOWERS HOUSING DEVELOPMENT, FUND CORPORATION, HUGUENOT HOUSING ASSOCIATES, LLC WASHINGTON HOUSE HOUSING DEVELOPMENT FUND CORPORATION, MAPLE CENTER LIMITED PROFIT HOUSING DEVELOPMENT FUND COMPANY, INC., JEAN ANDERSON, and ROBERT RICE, Plaintiffs,
CITY OF NEW ROCHELLE, NEW YORK and THE CITY COUNCIL OF THE CITY OF NEW ROCHELLE, NEW YORK, Defendants.
The opinion of the court was delivered by: COLLEEN McMAHON, District Judge
DECISION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
Plaintiffs Community Housing Management Corp., Inc. ("CHMC"),
Carrington Arms Housing Development Fund Company, Inc.
("Carrington Arms"), Lincoln Towers Housing Development Fund
Corporation ("Lincoln Towers"), Huguenot Housing Associates, LLC
("Huguenot House"), Washington House Housing Development Fund
("Washington House"), Maple Center Limited Profit Housing
Company, Inc. ("Maple Center"), Maple Terrace Housing Development
Fund Company, Inc. (Maple Terrace"), Jean Anderson, and Robert
Rice (collectively, "plaintiffs") own, operate, and occupy
low-income and senior occupied apartment buildings in New
Rochelle, New York. Collectively, they brought an action to set
aside, as applied to them, a "user fee" imposed by the City of New Rochelle
(the "City") for costs allegedly associated with refuse
collection and disposal ("refuse fee"). Plaintiffs sought to
avoid the compulsory refuse fee on the basis that they do not use
the City's sanitation service, but rather wish to continue the
private sanitation contracts as they have for the last twelve
Plaintiffs brought this action against defendants City and the
City Council of the City of New Rochelle (the "City Council")
pursuant to 42 U.S.C. §§ 1983 and 1988 claiming a deprivation of
their rights under the Due Process and Equal Protection Clauses
of the Fourteenth Amendment, the Commerce Clause, Art. I, Sec. 8,
the Fair Housing Act, 42 U.S.C. § 3601, et seq., and multiple
state causes of action.
Plaintiff moved for summary judgment pursuant to Fed.R. Civ.
P. 56, and defendants moved to dismiss for lack of subject matter
jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1), or in the
alternative, for summary judgment. For the reasons set forth
below, I grant the defendants' motion to dismiss for lack of
subject matter jurisdiction and dismiss without prejudice both
parties' motions for summary judgment as moot.
The facts alleged as per the Complaint, are as follows:
CHMC is a New York Corporation responsible for the operation of
low and moderate income housing properties including Carrington
Arms, Lincoln Towers, Huguenot House, Washington House, Maple
Center, and Maple Terrace, each of which are apartment buildings
(multi-family dwellings) in New Rochelle. Cplt. ¶¶ 4; 15-26.
These plaintiffs are in the business of operating low-income,
moderate-income, and senior housing developments in the City.
Cplt. ¶ 110. Plaintiffs receive federal funding for the operation
of their developments and are in turn limited in the amount of rent they can charge defendants. Cplt. ¶
Jean Anderson and Robert Rice are both New Rochelle residents
who are tenants in one or more of these apartment buildings and
who pay rent to the owners for the housing, services, and
facilities. Cplt. ¶¶ 29, 31.
Like any apartment building, the residents of these buildings
including Anderson and Rice generate solid waste, refuse, and
trash, which the property operators need to have removed from the
premises. Cplt. ¶¶ 27-29. The City of New Rochelle provides solid
waste, refuse, and trash collection services, including
recyclables to some, but not all, property owners in the City.
Cplt. ¶ 32.
Prior to January 1, 2004, the City levied taxes against all
non-exempt property owners within the City to finance the cost of
trash collection services. Cplt. ¶ 38. With the exception of
Hugeunot House, all plaintiffs were tax-exempt property owners or
were tax-exempt property owners but remitted payments to the City
pursuant to a Payments-In-Lieu-Of-Tax-Agreement ("PILOT"). Cplt.
¶ 39. Hugeunot House paid taxes to the City like any ordinary
property owner part of which was presumably used to fund the
cost of the trash collection services provided to New Rochelle
residents. Cplt. ¶ 40.
At all relevant times, prior to January 1, 2004, defendants did
not provide trash collection services to plaintiffs at their
respective premises. Cplt. ¶ 41. Plaintiffs claim that defendants
could not provide adequate trash collection services. Cplt. ¶ 42.
Because defendants could not provide plaintiffs with adequate
trash removal services, the owners and operators of Carrington
Arms, Lincoln Towers, Huguenot House, Washington House, Maple
Center, and Maple Terrace, entered into written contracts with a
private carter for the removal of solid waste, refuse, and trash generated by the
operations' residential tenants, and others at plaintiffs'
respective properties. Cplt. ¶ 44. Pursuant to these contracts,
plaintiffs must remit a monetary sum to the private carter on
a monthly basis for the trash collection services. Cplt. ¶ 45.
On or about November 18, 2003, the City resolved that it would
hold a public hearing on December 9, 2003, on a proposed Local
Law to "establish residential refuse fees and providing for the
lien and collection thereof." Cplt. ¶ 48. And on or about
December 29, 2003, the City Council enacted Local Law 13,
entitled "Local Law Intro No . . . adopting a new subsection
163-20.C to Article IV of Chapter 163, Garbage, Rubbish and
Refuse of the City Code to establish residential refuse fees and
providing for the lien and collection thereof" (hereinafter
"Local Law 13"). Cplt. ¶ 49.
Pursuant to Local Law 13, the City Council established
"Residential Refuse Fees to defray the cost of collection,
transportation, and disposal of solid waste and recyclables from
improved real properties containing dwelling units in the City."
Cplt. ¶ 50. The law became effective on January 1, 2004. Cplt. ¶
53. Plaintiffs allege that Local Law 13 was actually adopted as a
pretext to defray the City's increased pension and retirement
costs. Cplt. ¶ 50.
Defendants enacted Local Law 13 and Section 133-1
(collectively, the "refuse fee") as a means of establishing a
locally controlled revenue source because the State of New York
limited defendants' ability to raise property taxes to no more
than the increase in the Consumer Price Index. Cplt. ¶ 63.
According to at least one City official, defendants would
reconsider the refuse fee if the State provided more general
funding to New Rochelle. Cplt. ¶ 64. The refuse fee for each improved property is determined on a
yearly basis by multiplying the number of dwelling units on each
tax assessment lot (as shown in the most current tax assessment
roll and records of the City Assessor) by the Per Unit
Residential Refuse Fee set forth in Chapter 133 of the City Code.
Cplt. ¶ 51. The refuse fee is imposed on plaintiffs regardless of
whether or not they actually use defendants' refuse collection
services. Cplt. ¶ 65.
Local Law 13 and Section 133-1 provide that the collection and
enforcement of the residential refuse fee shall be collected and
enforced in the same manner and at the same time as City of New
Rochelle real property taxes. Cplt. ¶ 62. Pursuant to Local Law
13, "If a Residential Refuse Fee including accrued interest
thereon is not fully paid on or before November 30 of the
calendar year for which originally billed, the unpaid amount
shall, pursuant to the procedures set forth in the Section 120-cc
of the General Municipal Law, become a lien as of January 1 of
the next succeeding year and shall accrue additional interest, be
collected, and be enforced in the same manner and at the same
time as provided by law for City taxes due in such next
succeeding year." Cplt. ¶ 52.
On or about December 29, 2003, the City Council enacted an
ordinance to amend Section 133-1, Enumeration of Fees, of the
Code of the City of New Rochelle ("City Code"). Cplt. ¶ 54.
Section 133-1 set up a schedule of fees and a yearly fee of $165
was established per dwelling unit and a $75 fee was established
dwelling units that had Senior Citizen Tax Exemptions and
dwelling units in buildings which limit occupancy to senior
citizens with incomes below 50% of the median income in
Westchester County. Cplt. ¶¶ 54-57.
Plaintiffs claim that the fees set forth in this section bear
no rational relationship to the actual costs of solid waste,
trash and refuse collection services provided by the City. Cplt.
¶¶ 58, 79. Plaintiffs allege that the refuse fee is a tax labeled as a
fee, and that the residential refuse fee is being exacted for
municipal revenue purposes. Cplt. ¶¶ 80, 81.
Plaintiffs claim that defendants still cannot provide the same
refuse and waste removal services as are being provided by the
private carter, and plaintiffs have not requested that the City
provide such services to them. Cplt. ¶¶ 42, 68-69.
Rule 12(b)(1) of the Federal Rules of Civil Procedure provides
for the dismissal of a claim when the federal court "lacks
jurisdiction over the subject matter." Fed.R.Civ.P. 12(b)(1).
In considering a Rule 12(b)(1) motion to dismiss for lack of
subject matter jurisdiction, a court must assume as true factual
allegations in the complaint. Shipping Fin. Serv. Corp. v.
Drakos, 140 F.3d 129, 131 (2d Cir. 1998) (citing Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974)), but refrain from "drawing
from the pleadings inferences favorable to the party asserting
[jurisdiction]." Id. (citing Norton v. Larney, 266 U.S. 511,
515, 45 S.Ct. 145, 69 L. Ed. 413 (1925)).
However, the Court "need not accept as true contested
jurisdictional allegations." Shenandoah v. Halbritter,
275 F. Supp. 2d 279, 284 (N.D.N.Y. 2003) (citations omitted). Courts
evaluating Rule 12(b)(1) motions "may resolve the disputed
jurisdictional fact issues by reference to evidence outside the
pleadings, such as affidavits." Zappia Middle East Constr. Co.
v. Emirate of Abu Dhabi, 215 F.3d 247, 253 (2d Cir. 20000; see
also Makarova v. United States, 201 F.3d 110, 113 (2d Cir.
2000) ("In resolving a motion to dismiss for lack of subject
matter jurisdiction under Rule 12(b)(1), a district court . . .
may refer to evidence outside the pleadings." (citations omitted)); Transatlantic Marine Claims Agency, Inc.
v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997) (in
assessing a motion to dismiss for lack of subject matter
jurisdiction, Court is not limited to the allegations of the
On a motion to dismiss pursuant to Rule 12(b)(1), the party
asserting that the court has subject matter jurisdiction the
plaintiff bears the burden of proving the court's jurisdiction.
FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990);
Overton v. New York State Div. of Milit, & Naval Affairs,
373 F.3d 83, 93 (2d Cir. 2004). If at any time it comes to the
court's attention, by the parties or otherwise, that subject
matter jurisdiction is lacking, the action must be dismissed.
Defendants moved to dismiss the complaint which alleges
discriminatory enactment and administration of the Refuse User
Fee in the City of New Rochelle pursuant to Fed.R.Civ.P.
12(b)(1). Defendants assert that this court lacks subject matter
jurisdiction to hear this matter because of the Tax Injunction
Act, 28 U.S.C. § 1341 (hereinafter "the Act"). The Act prohibits
federal district courts from "enjoin[ing], suspend[ing] or
restrain[ing]" the collection of any tax under state law whenever
"a plain, speedy and efficient remedy may be had in the courts of
such State." 28 U.S.C. § 1341 (1988). Defendants claim that this
jurisdictional bar requires that the Complaint be dismissed.
The language of the Tax Injunction Act specifically sets forth
two elements which must be satisfied before federal jurisdiction
is revoked. First, the fee must be determined to be a "tax,"
since the bar established by the Act applies only to "taxes," and
does not bar jurisdiction over cases involving "regulatory fees."
See Kraebel v. New York City Dep't of Housing Preservation and Development, 959 F.2d 395, 400 (2d Cir. 1992).
Second, there must be "a plain, speedy and efficient remedy" in
the state courts. See id. Plaintiffs do not argue that the
remedy available to them in the state court fails this standard.
See Plaintiffs' Memorandum of Law in Opposition to Defendant's
Notion to Dismiss for Lack of Subject Matter Jurisdiction, or, in
the Alternative, for Summary Judgment, dated Dec. 20, 2004, ("Pl.
Mem.") at 1-7. Accordingly, that issue is not in dispute and need
not be decided. See, e.g., Gasparo v. City of New York,
16 F. Supp. 2d 198, 217-18 (E.D.N.Y. 1998). There is also no real
dispute that the refuse fee is really a tax in fact, plaintiff
pleads that it is a tax disguised as a fee. See Cplt. ¶ 80.
Based on the facts as set forth in the Complaint and for the
reasons stated below, I find that the refuse fee constitutes a
tax within the meaning of the the Act.
Plaintiffs do argue, however, that because they have paid the
user fee, this litigation does not seek to "enjoin, suspend, or
restrain" the collection of such a "tax." See id. at 5-7. For
the reasons stated below, I find that this action seeks to enjoin
the collection of a municipal tax.
1. The Refuse Fee a "Tax" Under the Act
For purposes of the Tax Injunction Act, it is this court that
decides whether the state or local law is a tax, guided by
"federal law . . . rather than . . . state tax labels." Robinson
Protective Alarm Co. v. City of Philadelphia, 581 F.2d 371, 374
(3d Cir. 1978); see also Folio v. City of Clarksburg,
134 F.3d 1211, 1217 (4th Cir. 1998); Collins Holding Corp. v. Jasper
County, S.C., 123 F.3d 797, 800 n. 3 (4th Cir. 1997) ("[w]hether
the body imposing the assessment labels it as a tax or a fee is
not dispositive because the label is not always consistent with
the true character of the assessment"). Thus, we look to federal
law which "make[s] a general distinction between broader-based
taxes that sustain the essential flow of revenue to state (or local) government and fees that are connected to some
regulatory scheme." Collins, 123 F.3d at 800.
A tax is generally a revenue-raising measure, imposed by a
legislative body, that allocates revenue "to a general fund, and
[is] spent for the benefit of the entire community." Id.
(quoting San Juan Cellular Tel. Co. v. Public Serv. Comm'n,
967 F.2d 683, 685 (1st Cir. 1992)). A user fee, by contrast, is a
"payment? given in return for a government provided benefit" and
is tied in some fashion to the payor's use of the service.
United States v. City of Huntington, 999 F.2d 71, 74 (4th Cir.
Courts, including the Second Circuit, have broadly defined of
the word "tax" under the Act to include any state or local
revenue collection device. See, e.g., Keleher v. New England
Telephone & Telegraph Co., 947 F.2d 547, 549-50 (2d Cir. 1991),
abrogated on other grounds by, Jefferson County v. Ackers,
527 U.S. 423, 119 S.Ct. 2069, 144 L. Ed. 2d 408 (1999) (citing
Robinson, 581 F.2d at 374-76; see also Tramel v. Schrader,
505 F.2d 1310 (5th Cir. 1975); Alnoa G. Corp. v. City of
Houston, 563 F.2d 769 (5th Cir. 1977), cert. denied,
435 U.S. 970 (1978); Schneider Transport, Inc. v. Cattanach,
657 F.2d 128 (7th Cir. 1981), cert. denied, 455 U.S. 909 (1982).
Furthermore, the reach of the Act has not been limited to
challenges to revenue procedures labeled as "taxes." See, e.g.,
Robinson, supra, 581 F.2d 371 (finding challenge to a user
fee delineated as a rental fee barred by the Act); Tramel,
supra, 505 F.2d 1310 (holding that a special street improvement
assessment, designed to raise revenue for a specific municipal
action, was a tax within the meaning of the Act); Schneider,
supra, 657 F.2d 128 (finding that truck registration fees, designed as a revenue-raising measure to
support highway needs, were taxes within the meaning of the Act).
The Court in Robinson reasoned that the application of the
Act "should be determined as a matter of federal law by reference
to congressional policies underlying [the Act], rather than by
adoption of state tax labels developed in entirely different
legal contexts." Robinson, 581 F.2d at 374. The Court focused
on the function of the fee at issue, rather than on its label.
Id. (finding that where the fee was intended as a revenue
raising measure, similar to a tax, a federal court action
challenging that fee could not be maintained).
To determine whether a measure that raises revenue is a tax for
purposes of the Act, rather than merely a "regulatory fee,"
courts "have tended . . . to emphasize the revenue's ultimate
use, asking whether it provides a general benefit to the public,
of a sort often financed by a general tax, or whether it provides
more narrow benefits to regulated companies or defrays the
agency's costs of regulation." Travelers Ins. Co. v. Cuomo,
14 F.3d 708, 713 (2d Cir. 1993) (quoting San Juan Cellular,
supra, 967 F.2d at 685), rev'd on other grounds sub nom.,
New York State Conference of Blue Cross & Blue Shield Plans v.
Travelers Ins. Co., 514 U.S. 645, 653, 115 S. Ct. 1671,
131 L.Ed. 2d 695 (1995). Using this analytical framework, the Second
Circuit concluded that a New York statute imposing surcharges on
hospital rates for certain payors was a "tax" for the purposes of
the Act, because "notwithstanding the primary [regulatory]
purposes ascribed to the surcharges by the State, both
[surcharges] raise revenue which is ultimately paid into the
State's general fund." Id.; see also Gasparo, supra,
16 F. Supp. 2d 198, 217-18 (using the analysis in Travelers and
finding that an occupancy charge which flowed into the city's
general revenue fund to be a tax within the meaning of the Act). The Second Circuit acknowledged in Travelers that, "there is
no bright line between assessments [or fees] that are taxes and
those that are not." Id. at 713.
[Courts] have sketched a spectrum with a paradigmatic
tax at one end and a paradigmatic fee at the other.
The classic "tax" is imposed by a legislature upon
many, or all, citizens. It raises money, contributed
to a general fund, and spent for the benefit of the
entire community. The classic "regulatory fee" is
imposed by an agency upon those subject to its
regulation. It may serve regulatory purposes directly
by, for example, deliberately discouraging particular
conduct by making it more expensive. Or, it may serve
such purposes indirectly by, for example, raising
money placed in a special fund to help defray the
agency's regulation related expenses.
Gasparo, supra, 16 F. Supp. 2d at 218) (quoting Collins,
supra, 123 F.3d at 799 (citation omitted)).
The refuse user fee at issue in this case possesses several
characteristics that move it towards the "tax" end of the
spectrum. First, the fee was enacted and is administered by the
City Council and the City of New Rochelle rather than by some
specific agency, such as the Department of Sanitation (Cplt. ¶¶
49, 50, 51). Second, the refuse user fee is collected and
enforced in the same manner and at the same time as City of New
Rochelle real property taxes (Cplt. ¶ 62). Third, the fee is
levied upon all owners of improved properties in the City, not
just on those property owners who use the refuse collection
services provided by the City (Cplt. ¶ 65). See generally,
Gasparo, 16 F. Supp. 2d at 218 (citing San Juan Cellular,
supra, 967 F.2d 683 (finding that "periodic fee" assessed on
private company was not a "tax" because, inter alia, it was
not imposed on general public)); Miami Herald Publishing Co.
v. City of Hallandale, 734 F.2d 666 (11th Cir. 1984) (finding
that occupational license fee on all vending machines, including newsracks, was tax for purposes of Tax Injunction
Act)); see also Folio, supra, 134 F.3d at 1217-18 and
United States v. City of Huntington, 999 F.2d 71, 73-74 (4th
Cir. 1993) (both concluding that municipal fire service
protection fees constituted a tax within the meaning of the Tax
Injunction Act because liability for the fee was based upon a
resident's property owner status instead of his use of the city
Most significantly, as the Fourth Circuit stated in Collins,
and as the Second Circuit's analysis in Travelers indicates,
"the heart of the inquiry centers on function, requiring an
analysis of the purpose and ultimate use of the [fee]."
Collins, 123 F.3d at 800; Travelers, 14 F.3d at 713; see
also Gasparo, 16 F. Supp. 2d at 218. Both the alleged purpose
and use of the refuse user fee by the City also lead to the
conclusion that the user fee is a "tax" within the meaning of the
Act. Plaintiffs allege that the purpose of the fee was to
establish a locally controlled revenue source because the State
of New York limited defendants' ability to raise property taxes
to no more than the increase in the Consumer Price Index. Cplt. ¶
63. They further allege that the monies collected through the
refuse user fee are used to defray the City's increased pension
and retirement costs. Cplt. ¶ 50.
Indeed, plaintiffs specifically allege that the refuse user fee
is a tax labeled as a fee. Cplt. ¶ 80. Plaintiffs allege that the
refuse user fee is a tax because: (1) it is being exacted for
municipal revenue services (Cplt. ¶ 81.); (2) it imposes a
municipal charge without regard to whether plaintiffs are
benefitted by the City's solid waste, refuse, and trash
collection services (Cplt. ¶ 82.); (3) it imposes a municipal
charge irrespective of whether plaintiffs actually utilize the
City's solid waste, refuse, and trash collection services (Cplt.
¶ 83.); and (4) it imposes a municipal charge without regard to whether a rationale
underpinning exists between the charge imposed, the service
provided, and the benefit received (Cplt. ¶ 84).
Although not binding on this court, the Northern District of
Illinois considered a similar fact pattern where plaintiffs
acting pro se alleged that the defendant City violated their
equal protection rights under the Fourteenth Amendment by
enforcing local ordinances that required the Wilsons to pay the
City for garbage collection. Wilson v. City of Harvey, No. 03 C
11, 2003 WL 21418037, at *1 (N.D.Ill. Jun. 18, 2003). Plaintiffs
preferred to dump their own garbage and be excused from paying
monthly service fee assessed by the City for garbage collection.
The plaintiffs in Wilson alleged that the city charged them
$480 a year for garbage collection, but they failed to allege the
ultimate destination or purpose of this monthly payment. Id. at
*1, *3. The Court held that, in the absence of such an
allegation, it believed that it was reasonable to find that the
funds are intended to pay for the cost of the service. Id. at
*3. Accordingly, the court concluded for purposes of the motion
that the revenue raised by the City for garbage collection was
not a tax and that the Tax Injunction Act did not apply. Id.
In this case however, plaintiffs allege that Local Law 13 was
actually adopted as a pretext to defray the City's increased
pension and retirement costs. Cplt. ¶ 50. Plaintiffs claim that
the fees set forth in this section bear no rational relationship
to the actual costs of solid waste, trash and refuse collection
services provided by the City (Cplt. ¶¶ 58, 79), and that the
residential refuse fee is being exacted for municipal revenue
purposes. Cplt. ¶ 81. Thus, applying the analysis in Wilson to
these facts, the refuse fee imposed by the City would constitute
a tax for purposes of the Act. In Diginet, Inc. v. Western Union ATS, Inc., 958 F.2d 1388
(7th Cir. 1992), the Seventh Circuit stated:
If the fee is a reasonable estimate of the cost
imposed by the person required to pay the fee, then
it is a user fee and is within the municipality's
regulatory power. If it is calculated not just to
recover a cost imposed on the municipality or its
residents but to generate revenues that the
municipality can use to offset unrelated costs or
confer unrelated benefits, it is a tax, whatever its
Id. at 1399 (finding franchise fee levied by municipality on
user of fiber optic cable to be a tax).
Here, plaintiffs allege that the refuse fee is imposed on
plaintiffs regardless of whether or not they actually use
defendants' refuse collection services. Cplt. ¶ 65. Furthermore,
plaintiffs claim that the fees set forth in this section bear no
rational relationship to the actual costs of solid waste, trash
and refuse collection services provided by the City (Cplt. ¶¶ 58,
79), the refuse fee is not being used to defray these costs
(Cplt. ¶ 50), and the refuse fee is being used for municipal
revenue purposes, to wit: increased pension and retirement costs.
Cplt. ¶ 50, 81.
Although the Second Circuit has opined on this issue only a few
times, to the extent that similar types of fees and charges have
been considered, the Court of Appeals has repeatedly found them
to be "taxes" for the purposes of the Act. See, e.g.,
Travelers, supra, 14 F.3d at 713; Keleher, supra,
947 F.2d at 549 (finding city-assessed public utility "franchise fee"
to be a "tax" since revenues derived thereby were treated as part
of city's general revenue); Gasparo, supra,
16 F. Supp. 2d at 218 (finding an occupancy charge applied to all newsstand owners
is a tax within the meaning of the Act); VJG Realty Corp. v.
City of New York, No. 89 Civ. 1648, 1990 WL 80036, at *3
(S.D.N.Y. 1990) (finding that both charges arising from clean-ups
performed by the Health Department in and around plaintiffs'
properties and liens for overdue water and sewage charges to be taxes under the meaning of the Act);
American Trucking Assoc., Inc. v. Conway, 514 F. Supp. 1341
(D.Vt. 1981) (permit fees on interstate vehicles registered
out-of-state were a "tax" where fees exceeded administrative
costs of registration program, were earmarked for general fund,
and intent of legislature was to raise revenue).
These finding are consistent with federal case law throughout
the country. See, e.g., Folio, supra, 134 F.3d 1213-14
(finding that an ordinance that imposed fees upon property owners
and occupiers within the City for fire protection services and an
injunction against the future collection of the fee was a tax
subject to the Tax Injunction Act because the ordinance raised
revenue for the public benefit and was not "in the nature of a
privilege fee"); Indiana Waste Systems, Inc. v. County of
Porter, 787 F. Supp. 859 (N.D.Ind. 1992) (special assessment by
municipality is "tax," as is property tax, gross receipts tax,
city license tax, and state permit fees); Butler v. State of
Maine Supreme Judicial Court, 767 F. Supp. 17 (D.Me. 1991)
(finding jury fee promulgated by Maine Supreme Court and imposed
on out-of-state litigants to be a tax); Adams v. Board of
Supervisors of Henry County Va., 569 F. Supp. 20 (D.Va. 1983)
(license fee on fortune tellers was tax).
Taking into consideration the broad construction that courts
both in the Second Circuit and in other Circuits have
consistently employed in this area, and based on the facts as
alleged by the plaintiff, I conclude that the refuse fee is a tax
for the purposes of the Tax Injunction Act.
2. Plaintiff Is Seeking to "Enjoin, Suspend, or Restrain" the
Collection of a State Tax
Having found the refuse fee to constitute a tax under the Act,
and since there is no dispute as to the availability of a "plain,
speedy and efficient" remedy at state law that plaintiffs can
seek in state court, I now address plaintiffs' argument that this
is not the type of action which is barred by the Act from being litigated in federal court. As
discussed, the Act prohibits federal district courts from
"enjoin[ing], suspend[ing] or restrain[ing]" the collection of
any tax under state law whenever "a plain, speedy and efficient
remedy may be had in the courts of such State." 28 U.S.C. § 1341.
The Act "prohibits a federal district court, in most
circumstances, from issuing an injunction enjoining the
collection of state taxes. . . . [T]he Act also prohibits a
district court from issuing a declaratory judgment holding state
tax laws to be unconstitutional." California v. Grace Brethren
Church, 457 U.S. 393, 408, 102 S. Ct. 2498, 73 L. Ed. 2d 93
(1982). The Act similarly prohibits federal courts from issuing
declaratory judgments as to the constitutionality of a state tax,
and from entertaining damages actions under 42 U.S.C. § 1983.
National Private Truck Council Inc. v. Oklahoma Tax Comm'n,
515 U.S. 582, 589-92, 115 S. Ct. 2351, 132 L. Ed. 2d 509 (1995);
Fair Assessment in Real Estate Ass'n v. McNary, 454 U.S. 100,
102, 102 S. Ct. 177, 70 L. Ed. 2d 271 (1981) (holding that while
the Act speaks only to injunction actions, it has been held that
the effect of the Act extends to damage actions through the
principles of comity); VJG Realty Corp. v. City of New York,
No. 89 Civ. 1648, 1990 WL 80036, at *2 (S.D.N.Y. 1990).
The Act is undergirded by a policy of restraint in the federal
courts, which, save for limited exceptions, are "under an
equitable duty to refrain from interfering with a State's
collection of its revenue" in light of "the imperative need of a
State to administer its own fiscal operations." Tully v.
Griffin, Inc., 429 U.S. 68, 73, 97 S. Ct. 219, 222,
50 L. Ed. 2d 227 (1976). Essentially, "the Act . . . [is] first and foremost a
vehicle to limit drastically federal district court jurisdiction to interfere with so important a local concern as
the collection of taxes." Rosewell v. LaSalle Nat'l Bank,
450 U.S. 503, 522, 101 S. Ct. 1221, 1234, 67 L. Ed. 2d 464 (1981).
Plaintiffs cite Hibbs v. Winn, 542 U.S. 88, 124 S. Ct. 2276,
159 L. Ed. 2d 172 (2004), which affirmed a Ninth Circuit decision
holding that a federal action challenging the granting of a state
tax credit is not prohibited by the Act. 124 S. Ct. at 2283. The
Supreme Court so held because the litigation did not threaten to
adversely affect the state's ability to raise revenue. Id. at
2283, 2292. Plaintiffs also rely on Jefferson County, supra,
527 U.S. 423, which was an action by the state to enforce payment
of a tax. Here too, the Supreme Court found that this type of
action does not seek to restrain state action and therefore is
not barred by the Act. Id. at 435-36.
The present case is distinguishable from both Hibbs and
Jefferson County. Here, the plaintiff seeks to have this court
"vacat[e], annul?, strik[e], set? aside, and declar? void,
Local Law No. 13 and Section 133-1" (Cplt. at "Wherefore" clauses
(a)-(i)), grant declaratory relief to that effect (id. at (j)),
and to "enjoin? Defendants . . . from enforcing Local Law 12 and
Section 133-1 as against Plaintiffs" all of which would restrain
the City from collecting such refuse user fees from plaintiffs in
the future (id. at (k)).
Although plaintiffs state in their brief that they have thus
far made timely payment of the refuse fee (see Pl. Mem.,
supra, at 6), this action clearly seeks declaratory and
injunctive relief to enjoin and restrain the City from charging
the refuse user fee to plaintiffs in the future. Such actions are
plainly barred from federal jurisdiction by the Tax Injunction
Act and must be pursued in state court.
For these reasons, I grant defendants' motion to dismiss the
Complaint. This constitutes the decision and order of the Court.
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