Motion to Dismiss — Salt River Project Agricultural Improvement & Power District v. Department of Property Valuation

, Supreme Court, U. S,

“EILED _

APR11 1977; mm

[MICHAEL RODAK, JR, CLERK

IN THE oes

f . ’ Page

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1976 yoaras 2

STATEMENT OF FACTS 3

Means INTRODUCTION .

SALT RIVER PROJECT AGRICULTURAL A. THE an = i — 5

IMPROVEMENT & POWER DISTRICT, - TE cs

IS ATTEMPTING TO APPEAL FROM

A JUDGMENT WHICH IS NOTA

Appellant,

vs.

DEPARTMENT OF PROPERTY VALUATION OF

THE STATE OF ARIZONA,

Appellee.

MOTION TO DISMISS AND BRIEF

IN SUPPORT OF MOTION

BRUCE E. BABBITT

Attorney General

JAMES D. WINTER

Assistant Attorney General

338 State Capitol

Phoenix, Arizona 85007

Attorneys for Appellee

FINAL JUDGMENT OF THE ARIZONA

COURTS.

B. APPELLANT HAS NOT ARGUED NOR

HAVE THE ARIZONA COURTS

DECIDED THE PRECISE QUESTION

PRESENTED BY APPELLANT.

C. THIS COURT IS WITHOUT

JURISDICTION SINCE THE

QUESTION PRESENTED BY

APPELLANT DOES NOT CONSTITUTE

A CASE OR CONTROVERSY.

D. APPELLANT'S APPEAL IS BASED ON

AN ERRONEOUS INTERPRETATION

OF ARIZONA LAW.

E. APPELLANT'S ARGUMENT DOES NOT

PRESENT A SUBSTANTIAL FEDERAL

QUESTION.

CONCLUSION

ll

15

18

19

22

TABLE OF AUTHORITIES

Cases: Page

Allbaugh v. U.S., 16

184 F.2d 109,

cert den'd

340 U.S. 905 (8th Cir.1950)

Construction Laborers v.

Curry 11

371 U.S. 542 (1963)

Cox Broadcasting v. Cohn 8,11

420 U.S. 469 (1975)

Harper v. Virginia Board 20

of Elections

383 U.S. 663 (1966)

Haseltine v. Central Bank 8

of Springfield

183 U.S. 130 (1901)

McGoldrick v. Compagnie

Generale Transatlantique 12

309 U.S. 430 (1940)

Mercantile National Bank

v. Langdean 1l

371 U.S. 555 (1963)

Miami Herald Publishing

Co. v. Tornillo ll

418 U.S. 241 (1974)

San Antonio Ind. School

Dist. v. Rodriguez 21

411 U.S. 1 (1973)

-iii-

Cases: Page

Union Pacific R.R..v.

Dodge County

98 U.S. 541 (1879) 22

Village Voice, Inc. v. Rinaldi, 1l

423 U.S. 883 (1975)

cert. den'd

Winn's Heirs v. Jackson

12 Wheat. 135 (1827) 7

Statutes:

Arizona Revised Statutes:

§ 42-123 (B) 3

§ 42-151 3,19

§ 42-152 (B) 15

§ 42-204 4,14,15,

17,19,20

§ 45-2202 (A) 3

United States Code:

Title 28, Section 1257(2) Led

United States Constitution:

Article III, Section 2 2,15

First Amendment 10

Fourteenth Amendment ll

United States Supreme Court Rules:

Rule 16 1

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1976

No. 76-1279

SALT RIVER PROJECT AGRICULTURAL

IMPROVEMENT & POWER DISTRICT,

Appellant,

vs.

DEPARTMENT OF PROPERTY VALUATION OF

THE STATE OF ARIZONA,

Appellee.

MOTION TO DISMISS AND BRIEF

IN SUPPORT OF MOTION

The Appellees move the Court to

dismiss the appeal under Supreme Court

Rule 16 on the grounds: (1) that this

appeal does not meet the requirements

of Title 28, United States Code, Section

1257(2) as alleged by Appellants; (2)

that the federal question presented was

not previously raised; (3) that the

question presented does not present a

justiciable "case or controversy"

under the United States Constitution,

Article III, Section 2; (4) that the

question is based on an erroneous

interpretation of State law; and (5)

that the appeal does not present a sub-

stantial federal question.

PREFACE

The following references will be

used where no confusion would exist:

the Board of Property Tax Appeals as

the Board; the Salt River Project

Agricultural Improvement and Power

District, as the Project or Appellant;

and the Department of Property Valuation

as the Department.

STATEMENT OF FACTS

The Project is a quasi-governmental

body. It pays voluntary contributions

in lieu of property taxes based on

actual tax rates and the valuation of

its property. A.R.S. § 45-2202(A).

The Project is entitlec to contest

contributions in the same manner as

taxes may be contested under A.R.S.,

Title 42, which contains the general

provisions relating to taxation. Here-

after, contributions shall be referred

to as taxes to avoid confusion.

The Project appealed to the Board

from the valuation placed on its pro-

perties for purposes of property

taxation. The Board decreased the

valuation. Pursuant to A.R.S.

§§ 42-123(B) and 42-151, the Department

appealed from the lower assessment to

the Superior Court.

Upon a motion for summary judgment,

the Superior Court entered judgment for

the Project on the grounds: (1) there

was no competent evidence to rebut the

presumption of validity of the Board's

decision and (2) the procedure barring

the Project from raising constitutional

defenses was unconstitutional. The

Department appealed. The Court of

Appeals reversed on both grounds and

remanded for trial. The court held

that limiting the issue to valuation

was not a denial of due process where

alternative remedies are available.

Upon a petition for review the

Supreme Court issued an opinion

correcting dictum of the Court of

Appeals to indicate that all issues

could be raised in the alternative

proceeding under A.R.S. § 42-204.

ee, me ee

5

INTRODUCTION

Appellant's appeal to this Court

is improper on three procedural grounds:

(1) the appeal does not present a justi-

ciable controversy (Appellant is not

harmed); (2) the issue was not previously

raised in the Arizona Courts as such and

(3) the decision of the Arizona Supreme

Court reversing the summary judgment of

the Superior Court and remanding for a

new trial is not a final judgment within

the meaning of 28 U.S.C.A. § 1257(2).

In addition, Appellant's arguments

are based on an incorrect statement of

Arizona law. Even so, Appellant's

arguments lack merit.

A. THIS COURT IS WITHOUT JURIS-

DICTION SINCE APPELLANT IS

ATTEMPTING TO APPEAL FROM A

JUDGMENT WHICH IS NOT A FINAL

JUDGMENT OF THE ARIZONA COURTS.

Appellant relies on Title 28,

United States Code, Section 1257 (2)

as the basis for jurisdiction in this

court. That section states in perti-

nent part:

Final judgments or decrees

rendered by the highest court

of a State in which a decision

could be had, may be reviewed

by the Supreme Court, as

follows:

(2) By appeal, where is

drawn in question the

validity of a statute of

any state on the grounds of

its being repugnant to the

Constitution, treaties or

laws of the United States,

and the decision is in favor

of its validity.

Shee, a "final judgment" is jurisdic-

tional to an appeal to this Court.

In the instant case, the Superior

Court (trial court) granted a motion for

summary judgment on the grounds that

(1) there was no fact dispute as to

value of Appellant's property and (2)

the procedure for contesting tax

assessments was unconstitutional.

The Arizona Court of Appeals reversed

on both contentions and remanded the

case “for further proceedings consis-

tent with this opinion". The Arizona

Supreme Court took jurisdiction to

correct a misstatement by the Court

of Appeals, then "remanded for further

consideration as directed by the Court

of Appeals". In the absence of this

appeal or other procedural steps, the

case would be set for trial. The sole

issues would be classification or

valuation of Appellant's property.

A number of cases in this court

have held that generally a cause

remanded for trial of the issues was

not a “final judgment" of the State

Courts, thus not subject to juris-

diction of this Court. Winn's Heirs

v. Jackson, 12 Wheat. 135 (1827);

Haseltine v. Central Bank of

Springfield, 183 U.S. 130 (1901). In

Cox Broadcasting v. Cohn, 420 U.S.

469 (1975) a complete analysis of the

exceptions to this rule was discussed.

The first three exceptions are of no

application in this case. The first

exception is that the outcome at trial

is preordained; the second, the Federal

question is a totally separate issue;

and third, Appellant would later be

legally precluded from testing the

Federal issue. None of these excep-

tions apply. The fourth exception

could arguably be apvlied here; it

was stated as:

Lastly, there are those

Situations where the

federal issue has been

finally decided in the

state courts with further

proceedings pending in

which the party seeking

review here might prevail

on the merits on non-

federal grounds, thus.

rendering unnecessary

review of the federal

issue by this Court, and

where reversal of the

state court on the federal

issue would be preclusive

of any further litigation

on the relevant cause of

action rather than merely

controlling the nature and

character of, or deter-

mining the admissibility

of evidence in, the state

proceedings still to come.

In these circumstances, if

a refusal immediately to

review the state court

decision might seriously

erode federal policy, the

Court has entertained and

decided the federal issue,

which itself has been

finally determined by the

state courts for purposes

of the state litigation.

420 U.S. at 482-483.

The important factors for invoking

this exception are (1) a decision

of this Court would preclude further

litigation, (2) the State Court

decision has doubtful merit and (3)

an important federal policy would be

10

Seriously eroded. 420 U.S. at 486.

First, it is possible that a

decision adverse to the State could

preclude further litigation. How-

ever, a variety of other results

from such a decision are possible.

For example, the Court could remand

to the Arizona Supreme Court for

reconsideration of the State decision

in light of the decision on the Con-

stitutional issue.

Second, the decision of the

Arizona appellate courts is correct.

As will be elaborated below, the

Appellant's argument is without

merit. See Section E.

Third, there is no federal

policy of the magnitude set forth

in prior decisions in this category.

Those cases involved issues of

chilling effects on First Amendment

ll

rights, see Cox Broadcasting v. Cohn,

supra; Miami Herald Publishing Co. v.

Tornillo, 418 U.S. 241 (1974); Village

Voice, Inc. v. Rinaldi, 423 U.S. 883

(1975); cert. denied, J. Douglas

dissenting, or a federal statutory

policy. See Construction Laborers

v. Curry, 371 U.S. 542 (1963);

Mercantile National Bank v. Langdean,

371 U.S. 555 (1963).

We urge the Court to dismiss this

appeal on jurisdictional grounds.

B. APPELLANT HAS NOT ARGUED NOR

HAVE THE ARIZONA COURTS

DECIDED THE PRFCISE QUESTION

PRESENTED BY APPELLANT.

Appellant states the issue as

whether conditioning the appellant's

conceded Fourteenth Amendment right

to present its case (that the State

Department of Property Valuation has

discriminated against it in valuing

12

its property) on the payment of a tax

that the highest State authority to

consider the matter (the Board of

Property Tax Appeals) has held is not

due and owing, violates the appellant's

constitutional rights of due process

and equal protection. This issue is

different from the issue raised in

the Arizona Courts. An issue raised

for the first time on appeal to this

Court will not be considered by this

Court. See McGoldrick v. Campagnie

Generale Transatlantique, 309 U.S. 430-

(1940).

In its brief to the Arizona Court

of Appeals, the Project argued that

"limiting the issue upon which one can

be heard is denial of due process of

law". In its arguments in support of

a motion for rehearing before the

Arizona Court of Appeals the Project

13

argued that "any appelJate remedy

which does not contain the factor of

equalization [unconstitutional dis-

crimination] as an integral part of

its mechanism is fatally defective”.

While the issue is not clearly stated

in the lower courts, we believe it is

fairly construed as whether the bar

to raising constitutional defenses in

an appeal of property tax valuation

is a denial of due process. A

sub-issue is whether an alternative

remedy cures the defect.

These issues are materially

different from the issue presented to

this Court. The issue here is a

second level sub-issue, i.e., whether

the requirement of payment of taxes

asa condition precedent to raising

the issue results in an alternative

remedy that is constitutionally

14

inadequate. If the issue presented

here was not apparent until after the

decision of the Court of Appeals,

Appellant could have raised it ona

motion for rehearing before either

the Court of Appeals or the Supreme

Court.

We interpret Appellant's Juris-

dictional Statement to state that it

could now pay some amount of tax in

addition to the amounts found due

by the Board, then contest those

amounts as unconstitutional under

A.R.S. § 42-204. This is not an

accurate statement of Arizona law.

Appellant's most efficient remedy

on the constitutional issue was a

direct appeal to the courts, but the

Appellant elected to appeal to the

Board of Tax Appeals which only has

a limited jurisdiction. Having made

15

that election, the Appellant cannot

raise the discrimination issue in

this valuation action. If it has

paid its taxes under protest it can

bring an action under A.R.S. § 42-204.

The discrimination issue can then be

litigated under A.R.S. § 42-204.

Ce THIS COURT IS WITHOUT

JURISDICTION SINCE THE

QUESTION PRESENTED BY

APPELLANT DOES NOT

CONSTITUTE A "CASE OR

CONTROVERSY".

This case does not in its present

state constitute a “case or contro-

versy" under United States Constitu-

tion, Article III, Section 2.

Appellant indicates it is satisfied

with the decision of the Board of

Property Tax Appeals. The Board's

decision is presumptively correct

on appeal to Superior Court. A.R.S.

§ 42-152(B). The fact is that

16

Appellant is not required to pay or

being threatened with payment of any

amount with which it disagrees.

In Allbaugh v. U.S., 184 F.2d

109, 115, cert. den. 340 U.S. 905

(8th Cir. 1950), the United States

brought an action as sovereign trus-

tee for allotted Indian land for

recovery of delinquent rentals from

the lands. The rentals included

taxes on the land. The lessee

alleged that the taxes were uncon-

stitutional. The taxes were not a

lien on the property nor was payment

demanded of the Indians. The Court

stated that the issue was not ripe

for testing since no injury was

incurred. Similarly, Appellant has

suffered no injury on account of

discriminatory assessment nor is

injury threatened.

17

We find it difficult to determine

what issue Appellant intends to raise

in any event.

As suggested above, if the Project

has paid taxes under protest, it can

commence an action under Section 204

alleging unconstitutional discrimina-

tion immediately. However, Appellant

states it is satisfied with the result

of the Board. Since the Board's

determination was a fact-finding of

the full cash value of Appellant's

property, a contrary fact-finding by

the Superior Court would not raise

any of the usual questions of uncon-

stitutional discrimination. Therefore

Appellant has either met the juris-

dictional requirements for an action

under Section 204, i.e., timely

payment of taxes under protest, and

could commence an action immediately

18

or it is foreclosed.

D. APPELLANT'S APPEAL IS BASED

ON AN ERRONEOUS INTERPRE-

TATION OF ARIZONA LAW.

Appellant bases its argument on

the premise that it might now pay

some amount under protest in addition

to the amount found due under the

Board's ruling; then, sue for a

refund alleging unconstitutional

discrimination. Clearly, this pro-

cedure is not authorized under Arizona

law. !

The decision of the Court of

Appeals infers that Appellant has

made an election of remedies. It

cannot now raise the constitutional

issue since it chose to make an

administrative appeal rather than a

direct appeal to the Superior Court.

Since the remedies are cumulative,

the Appellant can, after payment of

19

taxes under protest, bring an action

under A.R.S. § 42-204 raising the

constitutional issue.

E. APPELLANT'S ARGUMENT DOES NOT

PRESENT A SUBSTANTIAL FEDERAL

QUESTION.

Finally, Appellant's clain,

aside from all other objections, has

no merit.

Appellant misconstrues the

decision of the Arizona Courts. The

courts held that the Project could

have raised its constitutional

objections had it elected to proceed

by a "direct appeal" under A.R.S.

§ 42-151; then, after payment of

taxes under protest, it could have

sued for refund under § 42-204 rais-

ing the constitutional issue. In

the alternative, the Project could

have simply paid the taxes under

protest and raised both issues in a

20

refund proceeding under A.R.S.

§ 42-204. It has always clearly

been the law that the first procedure

was available. The Supreme Court in

its decision in this matter indicated

the latter procedure was available.

The Arizona Court of Appeals

dealt with the issues raised by

Appellant at pages B-12 through B-13

and B-17 through B-18. Jurisdictional

=

Statement. We will not repeat that

analysis.

Finally, Appellant suggests this

case is analogous to the constitu-

tionality of a poll tax. Appellant

cites Harper v. Virginia Board of

Elections, 383 U.S. 663 (1966) for

the proposition that there is a right

to vote in state elections guaranteed

by the United States Constitution.

In fact the case is decided on Equal

21

Protection grounds. The court

expressly avoided the other issue.

Appellant then cites San Antonio Ind.

School Dist. v. Rodriguez, 411 U.S. l

(1973) for the proposition that a

right guaranteed by the Constitution

not be conditioned on payment of a

tax. We find no suggestion of that

proposition in Rodriguez, supra.

Finally, Appellant ignores the

fundamental function of taxes in

government. Taxes are necessary

for the operation of government.

Without the ability to operate on

internal debt, local governments

must be able to fairly predict tax

collections. Consequently, a value

set as of a given date must be used

for purposes of tax collections in

the same year, since the value is

used to determine the tax rate.

22

Conditioning a suit for refund on

payment of the tax is necessary for

the stability of local government

and there is no constitutional

impediment to such a requirement.

Cf. Union Pacific R.R. v. Dodge County,

98 U.S. 541 (1879).

CONCLUSION

On the basis of the points and

authorities discussed herein, the

appeal should be dismissed.

Respectfully submitted,

BRUCE E. BABBITT

Attorney General

s/ James D. Winter

67% D. WINTER

Assistant Attorney General

Attorneys for Appellee

CERTIFICATE OF SERVICE

I hereby certify that on this gt

day of April, 1977, three copies of the

MOTION TO DISMISS AND BRIEF IN SUPPORT OF MOTION

were mailed postage prepaid to

Clarence J. Duncan Rex E. Lee

Jennings Strouss & Salmon 2840 Iroquois Drive

lll West Monroe Provo, Utah 84601

Phoenix, Arizona 85003

Attorneys for Appellant.

I further certify that all parties

required to be served have been served.

BRUCE E. BABBITT

Attorney General

/s/ James D. Winter

JAMES D. WINTER

Subscribed and sworn to before me

this Sz day of April, 1977.

/s/Leone Hohman

Notary Public

My Commission expires:

March 19, 1980