Opposition — 28 East Jackson Enterprises, Inc. v. P. J. Cullerton, Individually and as Cook County Assessor, and Bernard J. Korzen, Individually and as Treasurer and Ex-Officio Collector of Cook County

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No. 76-1823

3n the

Supreme Court of the United States

Octoser Term, 1976

28 EAST JACKSON ENTERPRISES, INC.,

Petitioner,

vs.

P. J. CULLERTON, Individually, and as County Asses-

sor, and BERNARD J. KORZEN, Individually, and as

Treasurer and Ex-Officio County Collector of Cook County,

Respondents.

On Petition For A Writ of Certiorari To The

Court Of Appeals For The Seventh Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

Bernarp Carey,

State’s Attorney of Cook County, Illinois

500 Richard J. Daley Center

Chicago, Illinois, 60602

312-443-5473

Pau. P. Bresex, JR.,

Deputy State’s Attorney

Chief, Civil Actions Bureau

Avan L. FuLKerson,

Assistant State’s Attorney

Of Counsel

The Scheffer Press, Inc—(312) 263-6850

TABLE OF CONTENTS

SEE SEEN | scscavcesserssentcnsenssaniesecteilidmnestibssiansecensieenens

IIIT — sepentinnsinscsectisoveinnsviacinmnismsasienisieiintnhereenseenn

QUESTIONS PRESENTED... ...ccssccsseseseeecmsseesesees

EY SPOT | vecciunscssesnumnnnisnemecsrseneeneneeete

STATEMENT OF THE CASE ...0.......cccccssssssssssssesesssees

ARGUMENT:

The Petitioner Had No Right To Exclude Its Federal

Claims From State Court Adjudication. ..................0..

Il.

The Taxpayer’s Remaining Argument Was Considered

By This Court Upon The Taxpayer’s First Petition

ge , § S

CrraTIons.

Bland v. McHann, 463 F. 2d 21 (5th Cir. 1972), cert.

iy Ge I I UTD cecinctecsctescntntsnciscccetinnnntecsensie

Clarendon Associates v. Korzen, 56 Il. 2d 101, 306 N.E.

i ccteneenelientilinabaeninonin

England v. Louisiana State Board of Medical Exam-

I IID sc cctirensscnctiniedeneminteennniniguibiineanaions

Euclid Corporation v. Tully, 22 Tll. App. 3d 105, 355

SES

Exchange National Bank vy. Cullerton, 17 Tl. App. 3d

392, 308 N.E. 284 (Ist Dist. 1974) 0... .ccccescseeeeeeerees

Great Lakes Dredge & Dock Company v. Hoffman, 319

BE EE MERI cseustecierssnnssiscesinenenamnecsemnsincesnatestenesbtemtseinnes

PAGE

Hoyne Savings and Loan Association v. Hare, 60 Il.

2d 84, 322 N.E. 2d S33 (1DT4) ...2.....0.ccecccceccsosessseseseseees §

LaSalle National Bank v. County of Cook, 57 Til. 2d

348, S33 WE BE TB (IBGE cence 9

Lopin v. Cullerton, 46 Ill. App. 3d 378, 361 N.E. 2d 6

ee EE re 9

Lynch V. Household Finance Corporation, 405 U.S. 538

(TITER) onccececsesseecsocessnccsenessussiiennensiniasinnniiinanninnnnnnan 5

Mathews v. Rogers, 284 U.S. 521 (1932) .........:cccccececees 5

Perez v. Ledesma, 101 U.S. 82 (1971) .......ccccesccseeseeseeeee 5

People ex. rel. County Collector v. American Refrigera-

tor Transit Company, 33 Ill. 2d 501, 505, 211 N.E.

AIT OE 9

People ex rel. Skidmore v. Anderson, 56 Ill. 2d 334,

SOU WEED. BB SBR (IBGE) cnccenssstictuiinin 9

Sioux City Bridge Co. v. Dakota County, 260 U.S. 441

(TD ncecenecssnsisssavsssieovennnessncinsissiadiiadstiasalineiiiianaannaann 8,9

Township of Hillsborough v. Cromwell, 326 U.S. 620

CRED ccccocesesecsocsnessssessnensnansasignsenseennssnmmniianiinnaininananannnnnn 8,9

Tully v. Griffin, ........ ye , 97 8. Ct. 219, 50 L.

BOE, Bb Te CEO cccesccescecssnineniccrasemessentiainaaiiaamaaia 6

28 East Jackson Enterprises, Inc. v. Rosewell, 65 Mi.

2d 420, 358 N.E. 2d 1139 (1976) ................cccccscssssssees 6

28 East Jackson Enterprises, Inc. v. Rosewell, 523 F.

2d 439 (7th Cir. 1975), cert. denied 423 U.S. 1073

(1976), supplemental opinion on denial of rehearing,

ae fF OR, Ee RR Le 6,7

TB UDA. GEBG CODODD wciseccccamstidancacneeneee 5

Ill. Rev. Stat. 1973, ch. 120, §§675 amd 716 .....ccccccsssse 9

In THE

SUPREME COURT OF THE UNITED STATES

Ocroser Term, 1976

No. 76-1823

28 EAST JACKSON ENTERPRISES, INC.,

Petitioner,

vs.

P. J. CULLERTON, Individually, and as County Asses-

sor, and BERNARD J. KORZEN, Individually, and as

Treasurer and Ex-Officio County Collector of Cook County,

Respondents.

On Petition For A Writ of Certiorari To The

Court Of Appeals For The Seventh Circuit

BRIEF FOR RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinion of the district court is unreported. The

opinion of the Court of Appeals for the Seventh Cireuit

and the opinion of Mr. Justice Swygert, dissenting in part

are reported at 523 F. 2d 439 (7th Cir. 1975), cert. dented,

423 U.S. 1073 (1976). The Supplemental Opinion of the

Court of Appeals for the Seventh Circuit is reported at

551 F. 2d 1093 (7th Cir. 1977).

JURISDICTION

The jurisdictional requisites are adequately set forth in

the Petition.

QUESTION PRESENTED

The sole question presented by this Petition is whether

an Illinois taxpayer has an absolute right to litigate any

case involving state taxation in federal district court.

STATUTES INVOLVED

The pertinent provisions of the Johnson Act, 28 U.S.C.

§1341, and the Civil Rights Act, 42 U.S.C. $1983 are set

out in the Petition at pp. 3-4.

STATEMENT OF THE CASE

The petitioner is an Illinois corporation owning prop-

erty subject to the real estate tax law of Illinois. Re-

spondents are local tax officials charged with the assess-

ment and collection of real estate taxes pursuant to Illinois

law.’ The subject matter of this case deals with local real

estate taxes assessed against the petitioner for the year

1972, which taxes were payable in 1973.

In late 1973, the petitioner brought a civil rights action

under 42 U.S.C. $1983 to enjoin the respondents from ap-

plying for the sale of petitioner’s property for delinquent

1972 taxes. The petitioner asserted that 28 U.S.C. §§1343

(3) and 1331 supported Federal jurisdiction in the case.

The petitioner’s theory for relief was that its real es-

tate assessment was “constructively fraudulent.” Illinois

‘Thomas M. Tully, the present Assessor of Cook Coun-

ty, is the successor in office to Respondent P. J. Cullerton.

dward J. Rosewell, the present Treasurer and Ex-Officio

County Collector of Cook County is the successor in office

to Respondent Bernard J. Korzen.

courts have defined that term to include assessments of

property at a level disproportionately higher than other

similar property and have, upon proper proof, given re-

lief therefor. People ex rel. County Collector v. American

Refrigerator Transit Company, 33 Ill. 2d 501, 505, 211 N.E.

2d 694, 697 (1965). However, the district court ruled that

petitioner’s right to relief in the Illinois courts was not

“plain, speedy and efficient” within the contemplation of

28 U.S.C. §1341.

The court of appeals, after a thorough review of Illinois

law apposite to the case, reversed the district court. 523

F. 2d 439 (7th Cir. 1975). The taxpayer then petitioned

this Court for a Writ of Certiorari, and on January 19,

1976 said Petition was denied. 423 U.S. 1073 (1976). There-

after, the court of appeals stayed its mandate pending

final adjudication of certain state court actions commenced

by the taxpayer which involved taxes levied on the same

property for the tax years 1972, 1973? and 1974.'

After the Illinois Supreme Court affirmed the dismissal

of the taxpayer’s state court action, 28 East Jackson En-

terprises, Inc. v. Rosewell, 65 Ill. 2d 420, 358 N.E. 2d 1139

(1976), the taxpayer filed a Second Petition for Rehear-

ing with the court of appeals. The taxpayer maintained

that the Rosewell decision evidenced an unwillingness on

the part of the Illinois Courts to grant eqcitable relief to

taxpayers in its alleged circumstances, i.e. taxpayers with

*The suit seeking injunctive relief as to the 1972 and

1973 real estate taxes was dismissed on January 26, 1977.

28 East Jackson Enterprises, Inc. v. Rosewell. No. 75 CH

6436 (Circuit Court of Cook County, 1977).

* Dismissal of the suit peeing, Inounetive relief as to the

1974 taxes was affirmed by the [llinois Supreme Court. 28

East Jackson Ent ises, Inc. v. Rosewell, 65 Ill. 2d 420,

358 N.E. 2d 1139 (1976).

allegedly insufficient funds to satisfy their real estate tax

liability. The court of appeals did not interpret the Rose-

well decision as barring Illinois taxpayers from obtaining

equitable relief in state courts. Rather, the court of ap-

peals in its supplemental opinion noted:

Indeed, it does not appear that Mr. Justice Shaefer’s

opinion addresses the issue of what relief is available

in such cases. Rather, as the court saw it:

The fundamental question .. .

concerns the authority of Illinois courts to enter

judgments which concededly lack finality because

the issues that may be determinative have been de-

liberately excluded from judicial consideration.

And in response to this, Mr. Justice Schaefer wrote:

As this case has been shaped, the role of the Illinois

judicial system closely resembles that of a master

in chancery for the Federal district court. Any

judgment that an Illinois court might render would

not definitively adjudicate the rights of anyone. The

Illinois Constitution does not vest this authority in

its judges.

Plaintiff must certainly bear primary responsibility

for the Illinois court’s refusal to address the point

here of interest, t.e. whether a “plain, speedy and

efficient remedy in a case of wrongful tax assessment

is available in the courts of that state for a taxpayer

in plaintiff’s alleged circumstances. For throughout

the state court litigation, plaintiff sought to exclude

from consideration the merits of its federal claim.

[551 F. 2d at 1095.]

Based upon its interpretation of the Rosewell decision,

the court of appeals denied the taxpayer’s Second Peti-

tion for Rehearing. It is that determination which the tax-

payer seeks to have this court review by certiorari.

EEE

THE PETITIONER HAD NO RIGHT TO EXCLUDE

ITS FEDERAL CLAIMS FROM STATE COURT ADJU-

DICATION.

It is obvious from the taxpayer’s Petition for a Writ of

Certiorari that it believes it has an absolute right to liti-

gate any case involving state taxation in a federal district

court. Such a theory, however, fails to square with the

Johnson Act, 28 U.S.C. $1341 (1948). That act bars fed-

eral district court injunctions in actions challenging state

and local taxes where there is a plain, speedy and efficient

remedy available to the taxpayer in the state courts.

Matthews v. Rogers, 284 U.S. 521 (1932); and Great Lakes

Dredge & Dock Company v. Hoffman, 319 U.S. 293 (1943).

The rationale underlying the Congressionally mandated

federal non-interference in this important area of state

sovereignity was concisely stated by Mr. Justice Brennan

in his concurring opinion in Perez v. Ledesma, 401 U.S. 82

(1971), and later cited by this Court with approval in

Lynch v. Household Finance Corporation, 405 U.S. 538 at

542, fn.6 (1972). In his concurring opinion in Perez, Mr.

Justice Brennan stated:

The special reasons justifying the policy of federal

non-interference with state tax collection are obvious.

The procedures for mass assessment and collection of

state taxes and for administration and adjudication

of taxpayers’ disputes with tax officials are generally

complex and necessarily designed to operate accord-

ing to established rules. State tax agencies are orga-

nized to discharge their responsibilities in accordance

with the state procedures. If federal declaratory re-

lief were available to test state tax assessments, state

tax administration might be thrown into disarray,

and taxpayers might escape the ordinary procedural

requirements imposed by state law. During the pen-

dency of the federal suit the collection of revenue

under the challenged law might be obstructed, with

consequent damage to the State’s budget, and per-

haps a shift to the State of the risk of taxpayer in-

solvency. [401 U.S. at 127-128, fn. 17.]

This court has recently reaffirmed this principle in Tully

v.. Griffin, Inc., ........ + ea , 97 St. Ct. 219, 50 L.Ed. 227

(1976). Holding that New York State courts provided

New York taxpayers with a plain, speedy and efficient

remedy for challenging a state tax on federal constitu-

tional grounds, this Court stated:

A federal district court is under an equitable duty

to refrain from interfering with a State’s collection

of its revenue except in cases where an asserted fed-

eral right might otherwise be lost... . [Citations

omitted.] This policy of restraint has long been re-

flected and confirmed in the congressional command

of 28 U.S.C. §1341 that no injunction may issue

against the collection of a state tax where the state

law provides a “plain, speedy and efficient remedy.”

lool US. at ........ , 97 S.Ct. at 222, 50 L.Ed. 2d at

Accordingly, it is clear that when the petitioner excluded

its federal claims from state court adjudication it pre-

cluded the state courts from reaching the merits of the

claims presented by the taxpayer in its complaints. See:

28 East Jackson Enterprises, Inc. v. Rosewell, 65 Ill. 2d

420, 358 N.E. 2d 1139 (1976); and 28 East Jackson Enter-

ises, Inc. v. Cullerton, 551 F. 2d at i094 (7th Cir. 1977).

k Cnty. 1977). In addition, by framing its state court

actions as it did, the taxpayer not only violated the stay

order entered by the Seventh Circuit Court of Appeals on

waiios

April 5, 1976,‘ but also foreclosed that court from reach-

ing any determination other than that the Illinois remedy

was plain, speedy and efficient.’

To justify its “reservation of rights” theory the tax-

payer attempts to rely on this Court’s decision in England

v. Loutsiana State Board of Medical Exammers, 375 US.

411 (1964). We suggest that the court of appeals correctly

interpreted the holding of England when it declared:

Critical to any reliance on England is the proper

invocation of federal jurisdiction. The mere raising

of a federal claim is not enough. For primary federal

jurisdiction exists only to the extent Congress has

provided, and it is by no means incumbent upon con-

gress to provide a federal forum for the vindication

of every federal right. [Citations omitted.] In 28

U.S.C. $1341, Congress decreed that in matters affect-

ing state tax assessments or collections, no federal

court shall have jurisdiction so long as a plain,

speedy and efficient remedy is available in state court.

This denial of jurisdiction is complete and applies re-

gardless of whether the tax complaint filed invokes a

federal claim alone or in conjunction with state claims.

[Citations omitted.] The only concern is whether there

is an adequate state court remedy for the federal

claims. [551 F. 2d at 1096 (Emphasis Supplied). ]

It is apparent that the manner in which the taxpayer

framed its state court actions precluded the Illinois courts

from adjudicating its federal claims. Since the taxpayer

failed to afford the Illinois courts a full opportunity to

*The stay order entered by the court of appeals was

based upon its “. . . understanding that in the plaintiff's

[petitioner’s] state court case it was making the same

claims as in its federal case. . . .” 28 East Jackson Enter-

prises, Inc. v. Cullerton, 551 F. 2d at 1094 (7th Cir. 1977).

‘id. at 1096.

determine its right to relief, the court of appeals properly

determined that there was no evidence which would lead

the court to conclude that its previous decision, that the

Illinois remedy was plain, speedy and efficient, was in

error.

II.

THE TAXPAYER’S REMAINING ARGUMENT WAS

CONSIDERED BY THIS COURT UPON TAX-

PAYER’S FIRST PETITION FOR A OF CER-

TIORARI.

In its first Petition for a Writ of Certiorari filed with

this Court, No. 75-755, the taxpayer maintained that the

court of appeal’s decision in this case was contrary to the

mandate of Township of Hillsborough v. Cromwell, 326

U.S. 620 (1976). The taxpayer once again raises that ar-

gument as a reason for this Court to issue a Writ of

Certiorari to the Court of Appeals for the Seventh Cir-

evit. It is clear that the taxpayer again does not challenge

the substantive manner in which Illinois courts remedy

excessive assessments. Rather, the petitioner continues to

assert that in Illinois there is no injunctive remedy to

correct a “constructively fraudulent” assessment such as

that which the taxpayer alleges was placed upon its prop-

erty. In the alternative, the taxpayer contends that the

extent to which the injunctive remedy is available is un-

certain.

For the above reason Hillsborough is distinguishable.

In Hillsborough the laws of New Jersey failed to provide

a substantive remedy meeting the requirements mandated

by this Court in Sioux City Bridge Co. v. Dakota County,

260 U.S. 441 (1923). The New Jersey courts had held thai

a taxpayer who was over-assessed must seek to raise the

valuation of all property which was under-assessed. That

is not the case in Illinois. The relief contemplated by both

Sioux City and Hillsborough is clearly authorized. See:

People ex rel. Skidmore v. Anderson, 56 Ill. 2d 334, 307

N.E. 2d 391 (1974); and People ex rel. County Collector

v. American Refrigerator Transit Company, 33 Il). 2d 501,

211 N.E. 2d 194 (1965).°

The issue thus raised is whether Illinois courts will af-

ford a taxpayer injunctive relief where that taxpayer is

unable to pursue the remedy at law. The respondents con-

tend, as they did when responding to the taxpayer’s first

Petition, that the answer to the above question is in the

affirmative. See: Clarendon Associates v. Korzen, 56 Ill.

2d 101, 306 N.E. 2d 299 (1973); LaSalle National Bank v.

County of Cook, 57 Ill. 2d 318, 312 N.E. 2d 252 (1973);

Hoyne Savings and Loam Association v. Hare, 60 Ill. 2d

84, 322 N.E. 2d 833 (1974); Eachange National Bank v.

Cullerton, 17 Ill. App. 3d 392, 308 N.E. 2d 284 (1st Dist.

1974); Euclid Corporation v. Tully, 42 Ill. App. 3d 105,

355 N.E. 2d 659 (1st Dist. 1976); and Lopin v. Cullerton,

46 Ill. App. 3d 378, 361 N.E. 2d 6 (1st Dist. 1977).

Accordingly, we submit that the court of appeals cor-

rectly determined that Illinois law clearly offered the peti-

tioner a plain, speedy and efficient state court remedy.

The mere fact that a civil rights action in the federal

courts might be a better remedy should not authorize

federal intervention into this highly important area of

state sovereignty. Bland v. McHamn, 463 F. 2d 21, 29 (5th

Cir. 1972), cert. denied, 410 U.S. 966 (1973).

* The policy of Illinois law is to require taxpayers claim-

ing excessive valuation to follow the statutory legal rem-

edy set out at Ill. Rev. Stat. 1973, ch. 120, §§675 and 716.

That remedy requires payment under protest. Since the

petitioner had insufficient funds to pay under protest, the

court of appeals properly ruled that the legal remedy was

unavailable to petitioner.

—=- 19

CONCLUSION

For the foregoing reasons the respondents respectfully

pray that the petition for a Writ of Certiorari be denied.

Respectfully submitted,