Petition — Rosewell v. LaSalle Nat. Bank

“Biprome Court, U “ve

6 1980

- ICHAEL RODAK, JR. cLERR

Supreme Court of the United States

OctosErR Term, 1979

No. €9-1157%

EDWARD J. ROSEWELL, etc., et al.,

Petitioners,

VS.

LA SALLE NATIONAL BANK, TRUSTEE, etc.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BERNARD CAREY,

State’s Attorney of Cook County, Illinois,

500 Richard J. Daley Center,

Chicago, }: \nois 60602,

(312) 443-5460,

Attorney for Petitioners.

Pavut P. Breset, JR.,

Deputy State’s Attorney,

Chief, Civil Actions Bureau,

Henry A. Hauser,

Micuaret F.. Baccassu,

Assistant State’s Attorneys,

Of Counsel.

Midwest Law Printing Co., Chicago 60601, Financial 6-3988

TABLE OF CONTENTS

PAGE

OPINIONS BELOW

JURISDICTION

QUESTION PRESENTED

STATUTORY PROVISIONS INVOLVED ................

STATEMENT OF THE CASE

REASONS FOR GRANTING THE WRIT:

I

The Decision Of The Court Of Appeals That

An Available Concurrent State Court §1983 <Ac-

tion Fails To Provide A State Remedy Acceptable

Under 28 U.S.C. §1341 Is In Conflict With This

Court’s Holding In Tully v. Griffin, Inc., 429 US.

68 (1976), And Raises Significant, Disputed And

Fundamental Questions Regarding The Distribu-

tion Of Judicial Power Between State And Federal

Courts

IL.

The Decision Of The Court Of Appeals Is In

Conflict With The Holding Of The Fifth Circuit

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

Upon The Question Whether Failure Of A State

Statutory Refund Scheme To Provide For Pre-

Judgment Interest Renders The State Remedy Not

Plain, Speedy And Efficient Within The Meaning

Of 28 U.S.C. §1341

CONCLUSION

15

18

|

ii

APPENDICES:

A—Opinion of the United States Court of Appeals

for the Seventh Circuit la

B—Memorandum Order of the United States District

Court for the Northern District of Illinois, East-

ern Division 20a

C—Order of the United States Court of Appeals

for the Seventh Circuit Denying Rehearing en

SS ONS EEDA NE EO 22a

TABLE OF AUTHORITIES

Cases:

Advertiser Co. v. Wallace, 446 F.Supp. 677 (N.D. Ala.

ESSE A re 11

Alberty v. Daniel, 25 Tll.App.3d 291, 323 N.E.2d 110

(1st Dist. 1974) ......... 6, 11

Bertelsen & Petersen Engineering Co. v. United States,

I I NE, OED ona ccsnnescosscsnntscenctnaceretwicorevens 16

Bland v. McHann, 463 F.2d 21 (5th Cir. 1972) ...... 15, 16, 18

Board of Commissioners of Jackson County, Kansas v.

United States, 308 U.S. 343 (1939) 16

Bohacs v. Ried, 63 Tll.App.3d 477, 379 N.E.2d 1372 (2nd

I csesnenscnntintenivanh 11

Bull v. United States, 295 U.S. 247 (1935) 2.020202... 8,9

Chamberlain v. Brown, 223 Tenn. 25, 442 S.W.2d 248

Te es cae chaiametibonnnnss 11

Chicago, Burlington and Quincy Railroad v. Frary, 22

lcs sich iemsnsaiepasincditvedspennkmastnenes 7, 8,9

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

2d 299 (1973) 6,17

Coon v. Teasdale, 567 F.2d 820 (8th Cir. 1977) .. ......... 13, 14

Dee-El Garage v. Korzen, 53 [l.2d 1, 289 N.E.2d 431

Tess cneenissntbsnnsevenauiniionsinbetetinatisenenans 17

iii

Department of Employment v. United States, 385 U.S.

355 (1966) 15

Fulton Market Cold Storage Co. v. Cullerton, 582 F.2d

1021 (7th Cir. 1978) 15

Georgia R.R. v. Redwine, 342 U.S. 299 (1952) -............. 17

Goodfriend v. Board of Appeals, 18 Tl. App. 3d 412,

305 N.E.2d 404 (1st Dist. 1973) 6

Green v. Klinkofe, 422 F.Supp. 1021 (N.D. Ind. 1976) .. 11

Houston v. Moore, 18 U.S. (5 Wheat) 1 (1820) .............. 11

Huber Pontiac, Inc. v. Whitler, 585 F.2d 817 (7th Cir.

1978) 13

In the Matter of 28 East Jackson Enterprises, Inc.,

Debtor, 79 B 39051, United States Bankruptcy Court,

Northern District of Illinois, Eastern Division .......... 10

Juidice v. Vail, 430 U.S. 327 14

LaSalle National Bank v. County of Cook, 57 T1l.2d 318,

312 N.E.2d 252 (1974) 5

Long v. District of Columbia, 469 F.2d 927 (D.C. Cir.

1972) 11

Matthews v. Rogers, 284 U.S. 521 (1932) 8,9

McLean v. St. John, 10 Tll.App. 367 (4th Dist. 1882) ...... 11

Miller v. Bauer, 517 F.2d 27 (7th Cir. 1975) .................. 18

Nabisco, Inc. v. Korzen, 68 Tli.2d 451, 369 N.E.2d 829

(1977) 17

People ex rel. Korzen v. Fulton Market Cold Storage,

62 Tll.2d 443, 343 N.E.2d 450 (1976)

Perez v. Ledesma, 401 U.S. 82 (1971) 8

Scripps-Howard Radio v. FCC, 316 U.S. 4 (1942) ........ 12

Stone v. Powell, 428 U.S. 465 14

Terry v. Kolski, 78 Wis.2d 475, 254 N.E.2d 704 (1977) ... 11

28 East Jackson Enterprises v. Rosewell, 63 Tll.App.3d

880, 380 N.E.2d 395 (1st Dist. 1978) ... 10, 14

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

GED, Te Ta DDD CSTE) nines psccscscsecsscsnncacnonoce 10, 14

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

2d 439 (7th Cir. 1975) 6, 10, 14

iv

28 East Jackson Enterprises, Inc. v. Cullerton, 551 F.

2d 1093 (7th Cir. 1977) 10

Tully v. Griffin, Inc., 429 U.S. 68 (1976) passim

United States v. Board of Commissioners of Comanche

County, Oklahoma, 6 F.Supp. 401 (W.D. Okla. 1934) 15

United States v. Board of County Commissioners of

Pawnee County, Oklahoma, 13 F.Supp. 641 (N.D.

Okla. 1936) 15, 16

Walker Process Equipment Inc. v. Food Machinery and

Chemical Corp., 382 U.S. 172 (1965) 4

Statutes:

TS) SESSA CN Ren ce ONC ee Ee 2

28 U.S.C. $1341 passim

28 U.S.C. §1343 ; 3

42 U.S.C. §1983 passim

Til. Rev. Stat. 1977, ch. 120, par. 578 6

Til. Rev. Stat. 1977, ch. 120, par. 579 6

Til. Rev. Stat. 1977, ch. 120, par. 594 6

Til. Rev. Stat. 1977, ch. 120, par. 598 ws

Til. Rev. Stat. 1977, ch. 120, par. 604 6

Ti. Rev. Stat. 1977, ch. 120, par. 675 5, 6,7

Ml. Rev. Stat. 1977, ch. 120, par. 716 5, 6, 7

Federal Rules of Civil Procedure, Rule 62(c) ................ 5

Other Authorities:

Hill, Substance and Procedure in State FELA Ac-

tions—the Converse of the Erie Problem, 17 Ohio St.

L.J. 384 (1956) 13

Neuborne, The Myth of Parity, 90 Harv. L. Rev. 1105

(1977) 14

Note, State Enforcement of Federally Created Rights,

73 Harv. L. Rev. 1551 (1960) 13

In THE

Supreme Court of the United States

Ocroser Term, 1979

No.

EDWARD J. ROSEWELL, etc., et al,

Petitioners,

vs.

LA SALLE NATIONAL BANK, TRUSTEE, etc.,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Petitioners Edward J. Rosewel’, Treasurer of Cook

County, Illinois, and Thomas M. Tully*, former Assessor

of Cook County, Illinois, respectfully pray that a writ of

certiorari issue to review the judgment and opinion of

the United States Court of Appeals for the Seventh Cir-

cuit entered in this proceeding on August 24, 1979.

* Thomas M. Tully held the office of Assessor of Cook Coun-

ty on the date the complaint was filed. He has been succeeded

in office by Thomas C. Hynes, who was duly elected Assessor

of Cook County in November of 1978.

x a

OPINIONS BELOW

The opinion of the Court of Appeals is reported at 604

F.2d 530 (7th Cir. 1979), and appears herein as Appen-

dix A. The memorandum order of the District Court is

not reported, and appears herein as Appendix B.

JURISDICTION

The judgment of the Court of Appeals was entered on

August 24, 1979. A timely petition for rehearing en banc

was denied on October 30, 1979.* That order appears

herein as Appendix C. This petition was filed within 90

days from that date. This Court’s jurisdiction is invoked

under 28 U.S.C. § 1254(1).

QUESTION PRESENTED

Whether the remedies which may be had by a real es-

tate taxpayer in the courts of Illinois, including a state

civil rights action premised on 42 U.S.C. § 1983, or a

statutory refund without interest, are “plain, speedy and

efficient” within the meaning of 28 U.S.C. § 1341 so as

to bar federal injunctive relief from alleged overassess-

ment which is claimed to violate the taxpayer’s civil

rights.

* The order of October 30, 1979 notes that “Judges Pell,

Sprecher, Bauer and Wood voted to grant the suggestion for

rehearing in banc.” The active judges of the Seventh Circuit

thus split 5 to 4 on the en banc suggestion.

inlliee

FEDERAL STATUTES

PROVIDE IN PERTINENT PART

Title 28 U.S.C.

§ 1341. Taxes by States:

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.

§ 1343. Civil rights and elective franchise:

The district courts shall have original jurisdiction

of any civil action authorized by law to be com-

menced by any person:

* * *

(3) To redress the deprivation under color of any

State law, statute, ordinance, regulation, custom or

usage, of any right, privilege or immunity secured

by the Constitution of the United States or by any

Act of Congress providing for equal rights of

citizens or of all persons within the jurisdiction of

the United States;

Title 42 U.S.C.

§ 1988. Civil action for deprivation of rights:

Every person who, under color of any statute, or-

dinance, regulation, custom, or usage, of any State

or Territory, subjects, or causes to be subjected, any

citizen of the United States or other person within

the jurisdiction thereof to the deprivation of any

rights, privileges, or immunities secured by the

Constitution and laws, shall be liable to the party

injured in an action at law, suit in equity, or other

proper proceeding for redress.

—

STATEMENT OF THE CASE

This case presents the question whether two facets of

Illinois’ judicial remedies available to taxpayers who

desire to contest their taxes square with the federal

Anti-Tax Injunction Statute. The taxpayer maintains

that the state statutory legal remedy, which is available

and usually followed in the situation involved herein, is

not “plain, speedy and efficient” because pre-judgment*

interest is not paid on refunds received in the state

court. The taxpayer has also contested the efficiency of a

state court action based on 42 U.S.C. § 1983 to remedy

the alleged overassessment of the property. The Seventh

Circuit agreed with these arguments and he!d that in-

junctive relief was appropriate.

The case is presented on the pleadings only, since the

district court granted the petitioners’ motion to dismiss.

The well pleaded allegations of the complaint thus form

the factual basis for the determination of the issues rais-

ed herein. Walker Process Equipment Inc. v. Food

Machinery and Chemical Corp., 382 U.S. 172, 174-75

(1965).

The taxpayer alleges that it is the titleholder of real

property which was allegedly overassessed by the Cook

County Assessor for tax year 1977; that its property_was

assessed at over three times the amount that property in

its class should have been assessed; and that the taxes

claimed by the Collector are also over three times the

proper amount.

The taxpayer asserted that its only remedy in the

state court was by way of payment under protest of the

* “Pre-judgment interest” as used in this petition means in-

terest upon tax refunds computed from the time of payment

to the time of the entry of the order of refund.

= a

full amount of tax claimed by the Collector, and

thereafter objecting at the Collector’s annual Applica-

tion for Judgment. (Sections 194 and 235 of the Revenue

Act; Ill. Rev. Stat. 1977, ch. 120, sec. 675 and 716). The

taxpayer alleges that the “customary delay in receiving

refunds upon successful prosecution of such a suit is two

years, and that the courts of Illinois do not award in-

terest to taxpayers who successfully follow the aforesaid

statutory remedy at law. The taxpayer sought a

preliminary and permanent injunction preventing the

Collector from taking any action to collect taxes in ex-

cess of the proper amount.

The tax officials filed a motion to dismiss on

November 3, 1978, requesting the District Court to dis-

miss the Complaint on the basis of 28 U.S.C. § 1341,

which provides:

“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.”

On November 30, 1978, the District Court dismissed

the Complaint for want of jurisdiction. The District

Court stated:

1. The availability of equitable and declaratory

relief in the Illinois state courts provides the

plaintiff with a ‘plain, speedy and efficient’

remedy. Tully v. Griffin, 429 U.S. 68 (1976).

2. The non-payment of interest on refunds pur-

suant to Sections 675 and 716 of Chapter 120, II-

linois Revised Statutes, does not render the

remedy in Illinois courts not ‘plain, speedy and

efficient’.

The District Court did, however, grant the taxpayer

an injunction pending appeal pursuant to Rule 62(c) of

the Federal Rules of Civil Procedure.

—§~

The Seventh Circuit unequivocally held that the

remedies available to a taxpayer under Illinois’ statutes

and cases* do not square with the requirement of the

Federal Anti-Tax Injunction Act, 28 U.S.C. § 1341, that

they be plain, speedy .and efficient.

* Illinois provides at least the following remedies to a tax-

payer whose real estate is overassessed:

1. Administrative, pre-assessment—The assessor cannot in-

crease a real estate assessment in a non-quadrennial year

without first giving the taxpayer notice of such roposed in-

crease and the right to be heard thereon. See Ch. 120, par.

578, 579, Ill. Rev. Stat. 1977; roe eye v. Board of Appeals,

18 Ill. App. 3d 412, 305 N.E.2d 404 (ist Dist. 1973).

2. Administrative post-assessment—The assessor has discre-

tion upon application by the taxpayer to offer a certificate of

— iB, _— situations. See Ch. 120, par. 604, Ill. Rev.

3. Administrative-assessment review—Prior to issuance of

the tax bills, the Board of Appeals of Cook County has

statutory power to review assessments and order them cor-

rected. Ch. aah pots 594, 598, Ill. Rev. Stat. 1977; People

ex rel. Korzen v. ton Market Cold Storage, 62 Ill. 2d 443,

343 N.E.2d 450 (1976).

4. Statutory legal remedy—With payment under protest and

exhaustion of administrative remedies, a taxpayer may file an

objection to the collector’s ——— for judgment and sale

of delinquent real estate. The circuit court pe the

power in this proceeding to determine whether the assessment

is correct. See Ch. 120, pars. 675, 716, Ill. Rev. Stat. 1977;

LaSalle National Bank v. County of Cook, 57 Ill. 2d 318, 312

N.E.2d 252 (1974).

5. Injunctive Relief—A taxpayer may obtain injunctive relief

when the legal remedy is unavailable. Clarendon Associates v.

Korzen, 56 Ill. 2d 101, 306 N.E.2d 299 (1979) 28 East Jackson

inter yriees v. Cullerton, 523 F.2d 439 (7th Cir. 1975); cert.

denied, 423 U.S. 1073 (1976). Sepeeeneete) Opeiee upon

Denial of Rehearing, 551 F.2d 1093 (7th Cir. 1976), cert.

denied, 434 U.S. (1977).

6. The remedies available to a taxpayer in Illinois include a

42 U.S.C. § 1983 claim. The Illinois Appellate court for the

District in which the taxpayer’s property is located has stated

that, “. . . the courts of the State of Illinois have concurrent

jurisdiction with the Federal courts to hear claims founded

upon alleged violations of 42 U.S.C. § 1983.” Alberty v. Daniel,

25 Ill. App. 3d 291, 295, 323 N.E.2d 110 (1st Dist. 1974).

chine

In particular the Seventh Circuit has focused upon (1)

the failure of the prepayment remedy of the Illinois

Revenue Act of 1939, Ch. 120, pars. 675, 716 to provide

for the payment of interest upon refunds of successfully

protested taxes, and (2) the question of whether the ad-

mitted availability of Illinois courts for a § 1983 action

bars jurisdiction under 28 U.S.C. § 1341. The Court of

Appeals stated:

Our review of the respective legislative histories

of the Tax Injunction Act and section 1983 leads to

the conclusion that Congress did not intend that the

possibility of bringing a section 1983 action in state

court would bar, pursuant to the Tax Injunction

Act, federal jurisdiction over a section 1983 action

brought in federal court. Further, we have conclud-

ed that there is no legal or equitable remedy

available under Illinois law which is “plain, speedy

and efficient.”

LaSalle, 604 F.2d at 540.

It thus follows from this ruling that any and every II-

linois taxpayer desirous of litigating tax assessments

may choose to bring his case in the District Court for an

injunction against the collection of the tax. This state of

affairs, though seldom arising, nonetheless presents

grave difficulties in the relationship between the state

and federal courts. Both the Supreme Court of Illinois

and this Court have held the use of injunctive power in

the area of state tax collection to be extremely sensitive.

In Chicago, Burlington and Quincy Railroad Co. v.

Frary, 22 Ill. 34 (1859), affirming the denial of a tax in-

junction, the Supreme Court of Illinois observed:

Let us now, by sustaining this bill stretch out the

strong arm of this court and stay the hand of the

collector in every case where any irregularity can

be shown in the assessment of the revenue, and a

flood of injunctions would be spread over the land

~

at once, State and County revenue would cease to be

collected, at least till termination of protracted

litigation, and the wheels of government would stop.

(22 Ill. at 36.)

The concern expressed by the court in Frary has led

to “. . . procedures for mass assessment and collection of

. . . taxes and for administration and adjudication of

taxpayers’ disputes with tax officials (which) are

generally complex and necessarily designed to operate

according to established rules . . . of state procedure.”

Perez v. Ledesma, 401 U.S. 82, 127-128, n. 17, Brennan,

J., concurring (1971).

In the different, though highly relevant, context of the

income tax, this Court stated that, “(T)axes are the life

blood of government, and their prompt and certain

availability an imperious need”. Bull v. United States,

295 U.S. 247, 259 (1935).

This Court has noted the sensitive nature of federal

tax injunctions and has observed that:

The scrupulous regard for the rightful in-

dependence of state governments which should at

all times actuate the federal courts, and a proper

reluctance to interfere by injunction with their

fiscz’ operations require that such relief should be

denied in every case where the asserted federal

right may be preserved without it.

Matthews v. Rogers, 284 U.S. 521, 525-526 (1932); see

also Tully v. Griffin, Inc., 429 U.S. 68, 73 (1976).

The petitioners respectfully submit that the serious

potential impact of the Seventh Circuit’s opinion upon

the collection of real estate taxes in Illinois, standing

alone, warrants review by this Court.

—9—

REASONS FOR GRANTING THE WRIT

I,

THE DECISION OF THE COURT OF APPEALS

THAT AN AVAILABLE CONCURRENT STATE

COURT § 1983 ACTION FAILS TO PROVIDE A STATE

REMEDY ACCEPTABLE UNDER 28 U.S.C. § 1341 IS

IN CONFLICT WITH THIS COURT’S HOLDING IN

TULLY v. GRIFFIN, INC., 429 U.S. 68 (1976), AND RAISES

SIGNIFICANT, DISPUTED AND FUNDAMENTAL

QUESTIONS REGARDING THE DISTRIBUTION OF

JUDICIAL POWER BETWEEN STATE AND

FEDERAL COURTS.

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 federal right might otherwise be lost.

Tully v. Griffin, Inc., 429 U.S. 68, 73 (1976).

The “asserted federal right” which the taxpayer seeks

to vindicate by its complaint in federal court is based

upon the Civil Rights Act, 42 U.S.C. § 1983. The tax-

payer asserts that the assessment was intentionally ex-

cessive, and that its right to equal protection is therefore

violated. Thus, the taxpayer contends, a federal injunc-

tion should issue against petitioners’ attempts to collect

the tax.

On the other hand the tax authorities, your

petitioners, have at stake the following concerns: First,

tax injunctions directly stem the flow of necessary

revenue and thus constitute a direct threat to the fiscal

interests of the state. See Chicago, Burlington and Quin-

cy Railroad Co. v. Frary, 22 Ill. 34, 36 (1859); Matthews

v. Rogers, 284 U.S. 521, 525-526 (1932); cf. Bull v. United

States, 295 U.S. 247, 259 (1935). Secondly, tax injunc-

—10—

tions always transfer the risk of taxpayer insolvency to

the government.*

In order to protect these competing interests this

Court, prior to the adoption of § 1341, and Congress

thereafter, has limited federal jurisdiction in tax cases

to those where “. .. an asserted federal right might

otherwise be lost.” Tully v. Griffin, Inc., 429 U.S. 68, 73

(1976).

Illinois law is clear that civil rights actions filed pursu-

ant to 42 U.S.C. § 1988 may be maintained in Illinois

* A notorious example of this phenomenon exists here in the

Seventh Circuit with regard to a downtown Chicago property

located at 28 East Jackson Street. As described by Mr. Justice

Downing in 28 East Jackson Enterprises v. Rosewell, 63 III.

App. 880 (1st Dist. 1978) 380 N.E.2d 395, a taxpayer

employed:

[a] series of cases in both the State and Federal courts by

which plaintiff has avoided entirely the payment of real

estate taxes on the vss, ye property since 1971. The

history of plaintiff's legal maneuvers is set forth in 28

East Jackson E’ ses, Inc. v. Rosewell (1976), 65 Ill. 2d

420, 358 N.E.2d 1139, in 28 East Jackson Enterprises, Inc.

v. Cullerton (7th Cir. 1975), 523 F.2d 439, and in 28 East

Jackson Enterprises, Inc. v. Cullerton (7th Cir. 1977), 551

F.2d 1093, and will not be repeated here.

It is sufficient here to aay that these maneuvers suggest

a pattern whereby plaintiff has taken advantage of an un-

resolved question of Illinois law, a gray area of Federal-

State relations, and the delays inherent in the judicial

process to a the sale of its tax-delinquent property un-

til after the following year’s taxes have also become delin-

quent, after which a new suit is filed raising the same

precise issues and beginning the process anew.

28 E. Jackson, supra 63 Ill. App. 3d at 881-82.

Having delayed the payment of more than $700,000 in real es-

tate taxes for more than eight years, the taxpayer filed for a

reorganization under Chapter 11 of the nts svetig, od Act in

late 1979. See, In the Matter of 28 East Jackson Enterprises,

Inc., Debtor. 79 B 39051, United States Bankruptcy Court,

Northern District of Illinois, Eastern Division.

courts. Alberty v. Daniel, 25 Ill. App. 3d 291, 295 (1st

Dist. 1974), 323 N.E.2d 110; Bohacs v. Ried, 63 Ill. App.

3d 477, 481-82 (2nd Dist. 1978), 379 N.E.2d 13872. Alber-

ty is settled law in the First Appellate District of II-

linois, and is binding upon the Circuit Court of Cook

County, Illinois, the state forum which would have venue

and jurisdiction of a state § 1983 tay action in this case.

These holdings are in accord with the emerging ma-

jority view on this question. See Advertiser Co. v.

Wallace, 446 F. Supp. 677, 681 (N.D. Ala. 1978); Green

v. Klinkofe, 422 F. Supp. 1021, 1026-27 (N.D. Ind. 1976);

Long v. District of Columbia, 469 F.2d 927, 937 (D.C.

Cir. 1972); Terry v. Kolski, 78 Wis.2d 475, 254 N.E.2d

704 (1977). The only case cited by the Seventh Circuit

which holds to the contrary is Chamberlain v. Brown,

223 Tenn. 25, 442 S.W.2d 248 (1969). However

Chamberlain was specifically discussed, considered, and

rejected in Alberty, supra at 25 Ill. App. 3d at 295.

Furthermore, Alberty and Bohacs find sound support

in the early concurrent remedy cases of Claflin v.

Houseman, 93 U.S. 130 (1876) and Houston v. Moore, 18

U.S. (5 Wheat) 1, 25-27 (1820). Claflin was no stranger

to Illinois courts and, in fact, was cited as authority in

McLean v. St. John, 10 Ill. App. 367, 368 (4th Dist. 1882)

on the issue of concurrent jurisdiction in a bankruptcy

matter.

The petitioners respectfully submit that the availabili-

ty of Illinois courts for § 1983 actions as expressed in

Alberty operates to preserve all federal rights which

could be premised on the civil rights act. Under Tully,

the federal court had a duty to “. . . refrain from in-

terfering with [a state’s] collection of its revenue.” Tully

v. Griffin, supra at 74. [parenthetical insert for clarity]

=

Despite the force and clarity of the Tully holding, and

the full availability of a state civil rights action, the

Seventh Circuit nonetheless dropped the bar of § 1341.

The opinion, in effect, established a speciai rule for

§ 1983 tax actions which operates to preserve federal

jurisdiction even though a clear forum in the state court

exists to adjudicate exactly the same claim advanced in

the federal district court. Thus, the court’s opinion ig-

nores the willingness of Illinois to afford its citizens a

state forum for reviewing § 1983 claims, and describes

the clear application of § 1341 as a “perverse result.” 604

F.2d at 540.

The result is “perverse” only if one indulges in a value

judgment in favor of the federal courts hearing § 1983

tax cases and against state involvement in them.

However, it is the place of Congress to make such value

judgments,* and it did so by passing § 1341 which is a

clearly articulated limitation upon federal jurisdiction of

§ 1983 actions involving state taxes.

The Court of Appeals urges that the tax officials’ posi-

tion is impractical and “. . . undermines judicial ef-

ficiency and legal expertise”. 604 F.2d at 538-39.

Petitioners submit that the obvious influx of § 1983 tax

injunction cases which the panel opinion invites** cannot

much help the efficiency of the district judge, whose

substantial expertise is not generally considered to in-

clude state tax overvaluation claims.

* Mr. Justice Frankfurter cautions as follows: “We must be

wary against interpolating our own notions of policy in the in-

terstices of legislative —— Scripps-Howard Radio v.

FCC, 316 U.S. 4, 11 (1942).

** More than 1100 specific valuation objections are filed

each year in Cook County alone.

Petitioners urge a case which presents a classic

converse-Erie situation. See Hill, Substance and

Procedure in State FELA Actions—the Converse of the

Erie Problem, 17 Ohio St. L.J. 384 (1956); Note, State

Enforcement of Federally Created Rights, 73 Harv. L.

Rev. 1551, 1560-61 (1960). In a diversity case the federal

court decides state claims based upon state law. Under

Alberty the state court decides federal claims based on

federal law. The former situation is impelled by the

statute authorizing federal jurisdiction, the latter by ex-

press congressional limitations thereon, all in accord

with prime considerations of comity and federalism. The

petitioners submit there is nothing impractical in

deciding the case in a manner which preserves the fiscal

integrity of the state.

The petitioners submit that the Court of Appeals’

refusal to accept the clear mandate of Tully stems first

from the court’s distaste for the resulting limitation of

federal jurisdiction in tax cases which the court found to

be “. . . an untenable conclusion: the Tax Injunction Act

would bar federal jurisdiction in all cases involving state

tax operations—without exception.” 604 F.2d at 538.

However the court’s resolution of the issue, while

rhetorically appealing, completely begs the question. As

long as state remedies are “plain, speedy and efficient”

as we contend a state § 1983 action would be*, then

* While the Court of Appeals found that. an Illinois § 1983

remedy was not plain because of uncertainty as to the law

a soaps pag! og se is —— . 604 on at 537-38. Illinois

courts possess the full panoply of injunctive powers necessa

to protect federal constitutional rights. Indeed, the Seventh

Circuit noted in Huber Pontiac, Inc. v. Whitler, 585 F.2d 817

(7th Cir. 1978) that “Illinois courts are not adverse to hearin

constitutional challenges similar to Huber’s complaints wit

Rule 2-4 [due process challenge].” Huber, supra at 821

[parenthetical insert for clarity]. also Coon v. Teasdale,

(Footnote continued on following page)

=

§ 1341 would bar federal jurisdiction, without exception,

even under the existing law of the Circuit. See 28 East

Jackson Enterprises, Inc. v. Cullerton, 523 F.2d 439 (7th

Cir. 1975).

Secondly the Court of Appeals’ decision appears to be

based upon a fundamental distrust of the state court as

an appropriate forum for the vindication of federal con-

stitutional rights in tax cases. 604 F.2d 539-40; compare

Stone v. Powell, 428 U.S. 465, 493-94 n. 35 with Juidice

v. Vail, 480 U.S. 327, 342-346, Brennan, J., dissenting,

and Neuborne, The Myth of Parity, 90 Harv. L. Rev.

1105 (1977). However if the Anti-Tax Injunction Statute

means anything, it must mean that Congress has unam-

biguously decided to commit those federal rights to the

courts of the several states for adjudication.

The foregoing questions are of significant and fun-

damental import to both federal and state courts.

Review by certiorari is most appropriate to resolve these

questions in a manner supportive of the federalism upon

which this nation’s body politic is based.

* continued

567 F.2d 820, 822 (8th Cir. 1977). The only “uncertainty” that

exists in this case, results from the taxpayer’s failure to sub-

mit its federal claims to the state court for determination.

Sea. &B-» 28 East Jackson, Inc. v. Rosewell, 65 Ill. 2d 420, 358

1139 (1976); 28 East Jackson Ine. v.

Rosewell, 63 Ill. App. 3d 880 (1st Dist. 1978), 380 N E.2d 395,

—15—

II.

THE DECISION OF THE COURT OF APPEALS IS IN

CONFLICT WITH THE HOLDING OF THE FIFTH

CIRCUIT IN BLAND vy. McHANN, 463 F.2d 21 (5th CIR.

1972) UPON THE QUESTION WHETHER FAILURE

OF A STATE STATUTORY REFUND SCHEME TO

PROVIDE FOR PRE-JUDGMENT INTEREST

RENDERS THE STATE REMEDY NOT PLAIN,

SPEEDY AND EFFICIENT WITHIN THE MEANING

OF 28 U.S.C. § 1341.

The question whether a state’s tax refund remedy

must include pre-judgment interest is an open one which

this Court did not reach in Department of Employment v.

United States, 385 U.S. 355, 358 (1966). Subsequently

the Fifth Circuit in Bland v. McHann, 463 F.2d 21 (5th

Cir. 1972) held that a Mississippi remedy which “.. .

makes no provision for the recovery of interest on il-

legally assessed taxes. .. .” (463 F.2d at 28 n. 24) none-

theless squares with the requirements of the Anti-Tax

Injunction Act.

The conflict between Bland and LaSalle is clear.

Petitioners submit that the Seventh Circuit has mis-

takenly elevated pre-judgment “interest” on tax refunds

to a right or entitlement.*

However the law is clear that interest is a matter

of statute, not of right as demonstrated by United States

v. Board of Commissioners of Comanche County, Ok-

lahoma, 6 F. Supp. 401 (W.D. Okla. 1934); United

States v. Board of County Commissioners of Pawnee

* Fulton Market Cold Storage Co. v. Cullerton, 582 F.2d 1021

(7th Cir. 1978) treats “interest” as an element of damages

por een ag an_overassessment in violation of a taxpayer’s

civil rights. 582 F.2d at 1080. No authority is advanced to

support that conclusion, nor does the court distinguish

ete the pre-judgment or post-judgment nature of in-

rest.

—1¢—

County, Oklahoma, 13 F. Supp. 641 (N.D. Okla. 1936);

and Bertelsen & Petersen Engineering Co. v. United

States, 60 F.2d 745 (1st Cir. 1932). In the Comanche

County case the court held that a taxpayer who was en-

titled to a refund of local real estate taxes paid, was not

entitled to interest from the local tax collecting authori-

ty. The court stated:

“On the question of interest, the court appreciates

the position of the defendant. Where taxes are paid,

under protest, the collecting authority can only hold

them in trust, and since Comanche County would be

regarded in this case as a trustee, this court knows

of no provision for the payment of interest from

some other fund whose application had been provid-

ed by statute.” (6 F. Supp. at 413.)

And in Bertelsen, the First Circuit in holding that in-

terest on federal income refunds could be awarded only

if a statute so provided, stated:

. Interest against the government is only

allowable as provided by statute, Angarica v.

Bayard, 127 U.S. 251, 260, 8 S. Ct. 1156, 32 L. Ed.

159; Boston Sand & Gravel Co. v. United States, 278

U.S. 41, 49 S. Ct. 52, 73 L. Ed. 170. There is no fix-

ed right to it. It depends on the law at the time

when the claim is allowed by the department, or, if

the claim is litigated, when the case is heard by the

court. Hind v. United States, 41 F.2d 892 (Ct. Cl.).”

(60 F.2d at 748.)

See also this Court’s holding in Board of Commissioners

of Jackson County, Kansas v. United States, 308 U.S. 343

(1939).

However the Seventh Circuit was not persuaded by

Bland, and after discussing several cases cited by the

plaintiff, some of which the opinion concedes to be inap-

posite, (604 F.2d at 534 n. 7) others decided before the

passage of § 1341, held that the “. . . economics of dis-

pute resolution .. .” favor a rule that interest ought to

be paid on Illinois tax refunds in order for the system to

be considered adequate.

The premise for this rule is derived from Georgia R.R.

v. Redwine, 342 U.S. 299 (1952), a case dealing with

attempts to tax a state-chartered railway company. The

opinion overlooks the distinction that in Redwine the

question was whether, in view of the federal contract

clause protection afforded the railroad, a state remedy

which forbade an injunction was adequate under § 1341.

The Supreme Court of the United States held it was not,

and observed that the alternative, filing for refunds in

each county in which the railroad was taxed, did not

present an adequate remedy.

The application of Redwine, and its underlying basis

as perceived by the panel opinion, is inappropriate here

because the plaintiff does not allege that the real estate

tax is levied without authority or upon exempt property.

Illinois has always, unlike Georgia in Redwine, allow-

ed injunctions to issue if a taxpayer can show that his

property is exempt or that the tax, as in Redwine, is un-

authorized by law: See Clarendon Associates v. Korzen,

56 Ill. 2d 101, 306 N.E.2d 299 (1973); Dee-El Garage v.

Korzen, 53 Ill. 2d 1, 289 N.E.2d 431 (1972); Nabisco, Inc.

v. Korzen, 68 Ill. 2d 451, 454, 369 N.E.2d 829 (1977),

appeal dismissed 4385 U.S. 1005 (1978). Of course, it

makes sense to allow the statutory and constitutional

authorization of a tax to be litigated in one proceeding.

However, the taxpayer’s claim herein is premised

upon overassessment, not lack of statutory authority.

Therefore the panel opinion’s reliance upon Redwine is

misplaced.

IG

The petitioners suggest that § 1341 does not require II-

linois to present the “best” remedy, but rather one that

is plain, speedy and efficient. See Miller v. Bauer, 517

F.2d 27, 32 (7th Cir. 1975); Bland v. McHann, supra, at

29. Given the complexities of local real estate tax evalua-

tion cases, the petitioners submit that the present

remedy squared with § 1341.

CONCLUSION

For the foregoing reasons, a writ of certiorari should

issue to review the judgment and opinion of the Seventh

Circuit.

Respectfully submitted,

BERNARD CAREY,

State’s Attorney of Cook County, Illinois,

500 Richard J. Daley Center,

Chicago, Illinois 60602,

(312) 443-5460,

Attorney for Petitioners.

Pavut P. Brmset, JR.,

Deputy State’s Attorney,

Chief, Civil Actions Bureau,

Henry A. Havser,

MicHaet F. Baccasa,

Assistant State’s Attorneys,

Of Counsel.

January 25, 1980

—la—

APPENDIX A

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

No. 78-2594

we NATIONAL BANK, Trustee under Trust No.

Plaintiff-A ppellant,

v.

EDWARD J. ROSEWELL, Treasurer of Cook County, and

THOMAS M. TULLY, Assessor of Cook County,

Defendants-A ppellees.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 78-C-3746—Nicholas J. Bua, Judge.

ARGUED APRIL 25, 1979—DECIDED AUGUST 24, 1979

Before SWYGERT, Circuit Judge, MOORE, Senior Cir-

cuit Judge,* and TONE, Circuit Judge.

SWYGERT, Circuit Judge. This appeal involves the

Federal Tax Injunction Act and its construction with

section 1983 of the Civil Rights Act. Plaintiff-ap-

pellant LaSalle National Bank! brought this civil

* The Honorable Leonard P. Moore, Senior Circuit Judge of

the United States Court of Appeals for the Second Circuit, is

sitting by designation.

1 Although LaSalle National Bank, as trustee under land

trust No. 44891, is the named plaintiff-appellant, Patricia

a. "y sole beneficiary under the trust, is the real party in

interest.

—2a—

oe injunction action under 42 U.S.C. § 1983 against

Edward J. Rosewell, Treasurer of Cook County and

Thomas M. Tully, Assessor of Cook County. The action

sought to enjoin the collection of excessive real estate

taxes for 1977 allegedly imposed in violation of plain-

tiffs due process and equal protection rights under the

Fourteenth Amendment. The sole issue on appeal is

whether federal district court jurisdiction over this ac-

tion is barred by the Tax Injunction Act of 1937. 28

U.S.C. § 1341. We conclude that jurisdiction is not

barred and reverse the judgment of the district court.

I.

Plaintiff is the owner of a twenty-two unit apartment

building in the all black, economically depressed com-

munity of East Chicago Heights in Cook County, Illinois.?

On January 1, 1977 this property had a fair cash value of

$46,000. According to Illinois statute, the property

should have been assessed at 33% of its fair cash value:

approximately $15,000. Nevertheless, the assessor as-

sessed the property at $52,150, more than triple the

correct assessment. As a result plaintiff's tax bill was

$6,106 rather than $1,775. This bill was over three times

the amount plaintiff would have been required to pay if

she had been taxed at the correct rate.

Plaintiff alleges that the assessor knowingly as of-

ficial policy or as governmental custom has maintained

a = of assessment in Cook County which has

produced egregious disparities in the ratio between the

assessed valuation and the fair cash value of real proper-

ty. The complaint further alleges that these over-

assessments are greater in frequency and size in

older communities in which property is owned and in-

habited primarily by members of racial minority groups

and the economically disadvantaged.

2 For purposes of this appeal, the factual allegations of plain-

tiff’s complaint are assumed to be true. See e.g. Walker

Process Mr Inc. v. Food Machinery & Chemical Corp.,

382 U.S. 172, 174-75 (1965); Fed.R.Civ.P. 12(b)\1).

a

In 1977, as well as in each of the preceding three

years (in which — property oe ongeeds 4 was overas-

sessed), plaintiff sought administrative relief from the

Board of. Tax Appeals of Cook County. In each of those

years, the Board referred plaintiff's complaint to the

assessor for recommendation, and in each year the

assessor recommended “no change” in the assessment.

The Board denied plaintiff's petition for administrative

relief each year.

Having been denied administrative relief, plaintiff's

only remedy at law was to pay the full amount of the

tax claimed by the county collector (defendant

Rosewell, Treasurer of Cook County) pursuant to the

assessor’s assessment, and thereafter objecting and su-

ing for refund at the collector’s annual Application for

Judgment in the Cook County Circuit Court. See Ill. Rev.

Stat. 1971, ch. 120, §§ 675, 716. According to plaintiff,

the customary delay in receiving refunds after a

successful prosecution of a tax refund suit is two years.

Further, under Illinois law, no interest may be paid to a

successful claimant who has secured the refund of real

estate taxes paid under protest.

Plaintiff — her legal remedy in 1974, 1975, and

1976 and ultimately received refunds for the three years

in May, 1978. Plaintiff had been required to deposit

payments for illegally exacted taxes in the approximate

amounts of $4,600 for 1974, $3,650 for 1975, and $3,950

for 1976, for three, two and one years, respectively. At

8% interest (the average prime rate for the three-year

persed) laintiff lost approximately $2,000 because of

er inability to use money which ultimately was deemed

to be rightfully hers. Plaintiff contends that ap-

roximately $4,300 of her 1977 tax bill of $6,106 is an il-

egal overcharge and that she would be forced to deposit

the $4,300, with no possibility of receiving interest on a

refund, along with her correct tax payment in order to

seek legal redress.

Plaintiff has not paid her 1977 taxes. Instead, on

September 19, 1978 she filed this action in federal dis-

trict court to enjoin the county collector from listing,

advertising, proceeding to judgment and order of sale,

—4a—

or selling plaintiffs property as payment for any out-

standing tax bill in excess of the amount she is legally

required to pay. On November 3, 1978 defendants mov-

ed to dismiss the complaint on the grounds that it was

barred by the See Act. 28 U.S.C. § 1341. The

district court agr with defendants and dismissed

” complaint on November 30, 1978.° This appeal

ollowed.

II

The Tax Injunction Act mandates that federal district

courts “shall not enjoin, suspend or restrain the assess-

ment, levy or collection of any tax under State law

where a plain, pty | and efficient remedy a fy had

in the court of such State.” 28 U.S.C. § 1341. This com-

mand has been followed consistently. See e.g., Tully v.

Griffin, 429 U.S. 68; Huber Pontiac, Inc. v. itler, No.

77-1975 (7th Cir. Sept. 19, 1978). The converse of this

ah ase however, is equally true. As the legislative

istory of the Act clearly indicates, an action for injunc-

tive relief brought in a federal district court “will not be

withdrawn from the jurisdiction of the . . . court except

where there is a plain, speedy, and efficient remedy at

law or in equity in the courts of the State... .”S. P.

my 1035, 75th Cong., Ist Sess. 2 (1937) (emphasis add-

Defendants contend that there are two legal avenues

available to plaintiff which offer “plain, s y and ef-

ficient” relief within the judicial system of Illinois. First,

3 The district court ruled:

_ 1.. The availability of equitable and declaratory relief

in the Illinois state courts provides the plaintiff with a

pigin, speedy. and efficient” remedy. Tully v. Griffin, 429

2. The non-payment of interest on refunds pursuant to

_ Sections 675 and 716 of Chapter 120, Illinois Revised

Statutes, does not render the remedy in Illinois courts not

“plain, speedy and efficient.”

LaSalle Nat'l Bank v. Rosewell, No. 78-3746 (N.D. Ill. Nov. 30,

1978). The district court, however, did grant plaintiff an in-

junction pending this appeal pursuant to Fed.R.Civ.P. 62(c).

= “a

defendants argue that the delay in oe gent and the

failure to pay interest on refunds made pursuant to

successful suits for tax refunds brought under III. Rev.

Stat. 1977, ch. 120, §§ 675, 716, do not render this

statutory remedy (paying the full amount of the tax bill

and then suing for refund) inadequate.‘ Our disagree-

ment with this position is developed in Part A of this

opinion. Second, defendants suggest that ‘sonar can

redress any alleged grievances concerning her property

tax assessment by filing a civil rights action under 42

‘ Federal equity practice prior to the passage of the Tax In-

junction Act of 1937 refrained from exercising jurisdiction

over actions challenging state tax systems as long as an “ade-

quate” state remedy was available. There was some question

whether enactment of the 1937 Act was meant to alter this

standard. See P. Bator, P. Mishkin, D. Shapiro, & H.

Wechsler, Hart & Wechsler’s, The Federal Courts & the

Federal System, 979 (2d ed. 1973) [hereinafter cited as Hart &

Wechsler.| There is nothing in the legislative history of the

Act to suggest that such a change was contemplated by the

Act’s drafters or sponsors. The legislative history focuses en-

tirely on the problems caused by injunctions issued by district

courts exercising their diversity jurisdiction. See S. Rep. No.

1035, 75th Cong., Ist Sess. (1937); H. Rep. No. 15038, 75th

Cong., lst Sess. (1937); 81 Cong. Rec. 1415-17 (1937). See also

Fulton Market Cold Storage Co. v. Cul 582 F.2d 1071,

1074-75 (7th Cir. 1978) cert. den. 99 S.Ct. 1033 (1979). Garrei

r. Bamford, 5388 F.2d 63, 66-67 (8d Cir.) cert. den. 429 U.S. 977

(1976). And in Great Lakes Co. v. Huffman, 319 U.S.

293 (1943), the Supreme Court described the passage of the

Tax Injunction Act as congressional confirmation of

traditional federal equity practice. Jd. at 298-99. See also, Tul-

ly, supra, 429 U.S. at 73. The Supreme Court has used the

traditional standard and the statutory standard __in-

terchangeably, and so shall we. See Spector Motor Service, Inc.

vy. O'Connor, 340 Us. 602, 605 (1951); Hillsborough v.

Cromwell, 326 U.S. 620, 624, 626 (1946); Spector Motor Ser-

vice, Inc. v. McLaughlin, 323 U.S. 101, 105-1 (1944). See also

Wright, Federal Courts 217 (3d ed. 1976) [hereinafter cited as

Federal Courts].

The substantive interchangeability of the two standards is

important for more than the linguistic flexibility it makes

sible. To the extent that the standards are the same, cases

ecided prior to the enactment of the 1937 Act remain in-

structive in defining the circumstances in which a federal

court may or may not exercise jurisdiction over an injunction

action involving a state tax system.

—§a—

U.S.C. § 1983 in state court. The availability of this

mode of relief, defendants argue, provides a “plain,

speedy and efficient” remedy in the Illinois courts,

thereby barring the equitable jurisdiction of the federal

courts. Our analysis of this proposition and our conclu-

sion that the availability of a section 1983 action in state

court does not bar federal court jurisdic\ion comprise

Part B of this opinion. We conclude that the Tax Injunc-

tion Act does not preclude federal jurisdiction over

plaintiffs action, and thus the district court had and

a A retained jurisdiction over plaintiffs prayer

or relief.

A.

Under Illinois law, the only remedy available to a

Cook County property taxpayer billed pursuant to an

erroneous assessment is to pay the tax in full and then

sue in the Cook County Circuit Court for a refund of the

erroneously collected portion of the tax payment. A tax-

payer who successfully sues and receives a refund is not

entitled, according to Illinois law, to interest on the

funds which erroneously had been collected ‘ the Coun-

ty. Lakefront Realty Corp. v. Lorenz, 19 Ill. 2d 415

(1960). This rule was reiterated by the Illinois Supreme

aye) in Clarendon Assoc. v. Korzen, 56 Ill. 2d 95, 109

[U]nder the poy ng Tencmenag provided by sections

194 and 235 of the Revenue Act of 1939 (Ill. Rev.

Stat. 1971, ch. 120, pars. 675 and 716) the taxpayer

is not entitled to interest on the refund. This court

also held in Lakefront that this fact does not render

the remedy at law inadequate so as to justify equity

in assuming jurisdiction. We see no reason to depart

from that decision.

See also, Neubert v. Foxworthy, No. 79-121, (Ill. App. 4th

Div., April 25, 1979); Vretsky v. Baschen, 47 Ill. App. 3d

169 (1977).5

5 The 8lst Illinois General Assembly last session failed to

enact HB 451 and HB 1317, bills introduced which would

have required payment of interest on tax refunds.

—Ta—

The question we must answer is whether this remedy,

which requires prepayment of the entire tax bill and

refunds erroneously collected monies without interest

(and allegedly with an average delay of two years), is

F scores speedy and efficient.” The Supreme Court in

epartment of Employment v. United States, 385 U.S.

355, 358 (1966) left undecided the question “whether

omission to provide interest on a successful refund

application renders the state remedy here an inadequate

one within the meaning of § 1341.” See also, 28 East

Jackson Enterprises v. Cullerton, 523 F.2d 439, 441 n.4

(7th Cir. 1975) rehearing denied, 424 U.S. 959 (1976).

There is no dispositive precedent on this issue. Our

analysis of prior judicial decisions, however, indicates

that the decisions which have considered the question

most carefully have concluded that the failure to pay

interest on a successful refund application makes the

state remedy inadequate. Further, policy considerations,

the legislative history of the Tax Injunction Act, and

common sense all dictate the conclusion that the Illinois

remedy is inadequate.

The court’s opinion in United States v. Livingston, like

other Bs gro since the passage of section 1341,

observed that,

It is well settled that a right to recover taxes il-

legally collected is not an adequate remedy if it

does not include the right to recover interest at a

reasonable rate for the period during which the tax-

payer’s money is withheld. Even if existence of the

right be merely cast in substantial doubt, the

remedy is not plain or adequate.®

United States v. Livingston, 179 F.Supp. 9, 15 (E.D. S.C.

1959) (three-judge court) (citations omitted) aff’d per

6 Numerous courts have held that uncertainty about the ade-

quacy of a state court remedy is sufficient to lift the § 1341

bar on federal court jurisdiction over equitable actions regard-

ing state tax systems. See e.g. Tully, supra, 429 U.S. at 76;

Hi exte supra, 326 U.S. at 629; 28 East Jackson, supra,

523 F.2d 439; Garrett, supra, 538 F.2d at 70. Thus, even if the

Lakefront rule had not been so definitively and recently ar-

ticulated, uncertainty about the award of interest to a

successful claimant under the Illinois statutory remedy would

be sufficient to render the remedy inadequate.

—Sa—

curiam, 364 U.S. 981 (1960). See also, Mullaney v. Hess,

189 F.2d 417, 420 (9th Cir. 1951); United States v.

Department of Revenue, 191 F.Supp. 7238, 727 (N.D. IIl.),

vacated, 368 U.S. 30 (1961).7 And numerous cases prior

to the passage of the 1937 Act held that the failure to

ay interest on a tax refund constituted an alternative,

but independent basis for concluding that the state

remedy was inadequate. Educational Films Corp. v.

Ward, 282 U.S. 375 (1931); Hopkins v. Southern Cal. Tel.

Co., 275 U.S. 393, 399-400 (1928); Nutt v. Ellerbe, 56

F.2d 1058, 1062 (E.D. S.C. 1932) (three-judge court);

Proctor & Gamble Distrib. Co. v. Sherman, 2 F.2d 165,

166 (S.D. N.Y. 1924). As the Supreme Court concluded

in Educational Films,

The legal remedy .. . falls short of adequacy in at

least two respects. [First] [rJefund, if any, is ex-

= without interest. § 219(d). See Proctor &

Gamble Distributing Co. v. Sherman, 2 _F.(2d) 165;

Southern California Telephone Co. v. Hopkins, 13

F.(2d) 814, 820, aff'd 275 U.S. 393.

Educational Films, supra, 282 U.S. at 386 n.2.

Defendants cite a plethora of cases which they contend

demonstrate that the failure to provide interest on a tax

refund does not render a remedy inadequate. All of

these cases are distinguishable from the problem raised

by this appeal. Several of the cases analyzed the remedy

provided by the state and, as defendants indicate, deter-

mined that it was adequate. See Aluminum Co. of

America v. Department of the Treasury, 522 F.2d 1120

7 None of these cases ruled on the precise issue raised in this

appeal. Livingston held that the failure to pay interest was

“another reason” why § 1341 was inapplicable to the tax-

ae suit in that case. Livingston, supra, 179 F.Supp. at 13.

ullaney, after stating the legal principle, concluded that the

remedy in question was adequate. And Department of Revenue

concluded that the failure to pay interest to a successful claim-

ant on the cost of a bond which had to be put up to pursue a

remedy was ee to the failure to pay interest on a tax

refund, and, therefore, the remedy involving the bond was in-

adequate. Nevertheless, all of these cases lend substantial sup-

port to the conclusion that the failure to pay interest, alone,

renders a remedy inadequate.

—IJa—

(6th Cir. 1975); Group Assisting Sewer Proposal-Ansonia

v. City of Ansonia, 448 F.Supp. 45 (D.Conn. 1978); Aber-

nathy v. Carpenter, 208 F.Supp. 793 (W.D. Mo. 1962),

afd 373 U.S. 241 (1963). But in each of these decisions

the adequacy of the state remedy was based, in part,

either on the availability of interest on refunds,

Aluminum Co., supra, 552 F.2d at 1127-28; Group

Assisting, supra, 448 F.Supp. at 47, or on the fact that

prepayment of the contested tax was not required. Aber-

nathy, supra, 208 F.Supp. at 796-97.8 And in the other

cases upholding the adequacy of a state remedy cited by

defendants, the relationship of nonpayment of interest to

the adequacy of the state remedy apparently never was

raised by the litigants and certainly never was expressly

considered by the courts. Board of County Comm’rs v.

United States, 308 U.S. 343 (1939); Stratton v. St. Lowis

Southwestern Ry., 284 U.S. 5380 (1932); Bland v.

McHann, 463 F.2d 21 (5th Cir. 1972), cert. denied, 410

U.S. 966 (1973); Bertelsen & Petersen E'ng’r Co. v. United

States, 60 F.2d 745 (1st Cir. 1932); United States v.

Board 5! County Comm’rs, 18 F.Supp. 641 (N.D. Okla.

1936); United States v. Board of Comm’rs, 6 F.Supp. 401

(W.D. Okla. 1934).2 Thus none of these cases provides

persuasive support for defendants’ position. |

8 The decisions in Group Assisting and Abernathy also are

based, in the alternative, on the inconsequential amounts of

money involved if interest were not recoverable on a contested

tax ———. We do not decide the question whether a remedy

is inadequate if it fails to provide for interest when the dollar

amount in question is extremely small. We do note, however,

that both the remedies considered in those cases provided for

resolution of the dispute within a period of several weeks and

the interest involved amounted to under $50.00. In the instant

case, delays of two years are alleged and hundreds of dollars

in lost interest are at stake for each year in which a wrongful

assessment is made.

® In Bland the complaining taxpayer did object to the ade-

ay of the Mississippi remedy on the grounds, inter alia,

that Mississippi law made “no provision for the recovery of in-

terest on meg assessed taxes,” 463 F.2d at 28, n.24, but the

court’s opinion did not discuss this specific contention. And in

Stratton which, like the other cases cited by defendants, did

not address the relationship of the nonavailability of interest

to the adequacy of the state remedy, the Court concluded:

(Footnote continued on following page)

—10a—

The legislative history of the Tax Injunction Act

similarly lends little support to defendant’s contention

that the failure to pay interest on tax refunds does not

affect the adequacy of the state remedy. The two pur-

poses of the Act, as described in the legislative history,

were, first, to eliminate discrimination between state

citizens who were required to pursue relief regarding il-

legal tax assessments in the state court and foreign cor-

porations operating in the state which were able to sue

under the diversity jurisdiction of the federal courts

and, second, to prevent these foreign corporations, which

frequently refused to pay their large state taxes and

then initiated dilatory and expensive legal actions in the

federal courts, from paralyzing state fiscal operations. S.

Rep. No. 1035, 75th Cong., Ist Sess. (1937); 81 Cong.

Rec. 1415-17 (1987). See also, Garrett, supra, 538 F.2d at

72; Tramel v. Schrader, 505 F.2d 1310, 1315-16 (5th Cir.

1975). Neither of these purposes conflicts with the rule

—— by federal cases decided prior to 1937 that the

failure to provide for interest makes a tax refund

remedy inadequate. See, supra, p. 8.

Perhaps even more importantly, the express principle

peiecadayg Merges of these congressional goals was that

justice is best served by the speedy judicial resolution of

tax disputes. Foreign corporations had been able to

secure financial benefits for themselves by delaying tax

collection through federal court litigation; state

governments often were forced to accept ungenerous

out-of-court settlements in order to secure sorely needed

tax revenues. The Tax Injunction Act was a response to

the “needs of many States for a more prompt disposition

of tax controversies... .” S. Rep., supra, at 3. And ex-

cerpts from Congressional hearings regarding the John-

son Act of 1934, 28 U.S.C. § 1342, inserted into the Con-

9 continued

There pon a legal remedy for the recovery of the tax, no

case is made for invoking the jurisdiction of equity to en-

join collection of it in the absence of allegations setting u

special circumstances which would render the legal remedy

inadequate.

284 U.S. at 534 (citations omitted) (emphasis added).

a

—lla—

gressional Record in support of the Tax Injunction Act

(often compared during its enactment process to the

Johnson Act), decried the financial hardships imposed

on a litigant drawn into federal court who is often un-

able to pursue his claim to a final judicial resolution. 81

Cong. Rec. 1415, 1417 (1987). The Illinois tax grievance

remedy, which forbids the recovery of interest and

allegedly involves a two year delay prior to refund pay-

ment, gives a financial incentive to one of the parties

(the County) to delay dispute resolution and imposes

severe financial hardships on private parties seeking to

redress their grievances. Although the roles have been

reversed, the available Illinois remedy exacerbates

much the same evils as the Tax Injunction Act was

designed to eliminate. See generally Garrett, supra, 538

F.2d at 72. It is unlikely that the drafters of the 1937

Act would have considered the Illinois statutory remedy

“plain, speedy and efficient.”

This concern with the economics of dispute resolution

was reflected in the Supreme Court’s decision in Georgia

R.R. v. Redwine, 342 U.S. 299 (1952). In Redwine, one of

the state remedies available to the aggrieved taxpayer

required filing over three hundred separate claims in

fourteen different counties in order to achieve full

redress. And so while redress theoretically was possible

in the state courts, the remedy’s diseconomies rendered

it inadequate. Jd. at 303. See also, 28 East Jackson,

supra, 523 F.2d at 441 (state remedy requiring full pay-

ment of tax not “available” when petitioner did not have

and could not borrow sufficient funds to pay the full

tax); Federal Courts, supra, at 217. Under present II-

linois law, as under Georgia law in Redwine, relief is

possible, but it imposes undue costs on taxpayers seek-

ing redress. Under these circumstances, the state

remedy is inadequate.

The most succinct analysis of the inadequacy of a tax

grievance procedure which requires prepayment of the

entire tax and then refuses to pay interest on the

refunds awarded successful litigants was provided by

Learned Hand over fifty years ago:

—12a—

[I]t seems to me plain that it is not an adequate

remedy, after taking away a man’s money as a con-

dition of allowing him to contest his tax, merely to

hand it back, when, no matter how long after, he es-

tablishes that he ought never to have been required

to pay at all. Whatever may have been our archaic

notions about interest, in modern financial com-

munities a dollar to-day is worth more than a dollar

next year, and to ignore the interval as immaterial

is to contradict well-settled beliefs about value. The

present use of my money is itself a thing of value,

and, if I get no compensation for its loss, my

remedy does not altogether right my wrong.

Proctor & Gamble, supra, 2 F.2d at 166. We agree with

- conclusion of the court in United States v. Livingston,

that

[A state] may allow interest upon refunds of taxes

or not as she chooses. If she does not make clear the

existence of the right to recover such interest,

however, she necessarily opens the door to equitable

relief to taxpayers and forecloses a remission of the

parties to the legal remedy provided by her

statutes. |

179 F.Supp. at 15. The failure to pay interest on refunds

to taxpayers who successfully challenge their tax assess-

ment pursuant to the Illinois statutory procedures

renders that remedy inadequate. Thus, the availability

of this remedy in the state courts does not bar federal

jurisdiction over injunction actions brought by aggriev-

ed Cook County taxpayers.

B.

Defendants also contend that plaintiff has a “plain,

— and efficient remedy” in the state courts senoune

can challenge her allegedly eT at

assessment oy om an action pursuant to 42

§ 1983 in an Illinois court.!° We do not agree with Ss il

10 Defendants cite several federal district court decisions

which have held, at least in the alternative, that the availabili-

(Footnote continued on following page)

—

dant’s contention, and we hold that the availability of a

section 1983 action in state court does not bar federal

jurisdiction over a section 1983 action alleging con-

stitutional deprivations arising from an illegal state tax

exaction.

As a predicate to their contention that a section 1983

state court action bars federal jurisdiction in this case,

defendants, citing two recent Illinois appellate cases,

assert that state courts have jurisdiction to hear federal

civil rights actions filed pursuant to 42 U.S.C. § 1983.

See Bohacs v. Reid, 63 Ill. App.38d 477 (1978); Alberty v.

Daniel, 25 Ill. App.3d 291 (1974). While this statement

woe well be true, it is by no means a settled rule of

aw.}

Similarly, plaintiff argues that an Illinois court ad-

judicating her section 1983 claim would be bound by the

10 continued ;

ty of a § 1983 action in state court constitutes an adequate

remedy for an aggrieved pee under § 1341, thereby pre-

cluding federal court jurisdiction over the taxpayer’s com-

plaint. See Advertiser Co. v. Wallace, 446 cae 677 (M.D.

Ala. 1978); Green v. Klinkofe, 422 F.Supp. 1021 (N.D. Ind. 1976);

Horn v. O’Chesky, 378 F.Supp. 1280 (D.N.M. 1974). None of

these cases justifies its holding with any detailed analysis of

the relationship between the two statutes. In addition, Adver-

tiser, which held that a plaintiff seeking damages under

§ 1983 was barred from federal court by the Tax Injunction

Act, is in direct conflict with our decision in F'ulton Market,

supra, 582 F.2d 1071.

1 Most judicial decisions which have concluded that state

courts can entertain § 1983 actions have reached their result

with little analysis, relying on the general principle of con-

current jurisdiction. See ong v. District af Columbia, 469

F.2d 927, 937 (D.C. Cir. 1972); Bohacs, supra, 63 Ill. App.3d 477;

Alberty, supra, 25 Ill. App.38d 291. See generally, Houston v.

Moore, 18 U.S. (5 Wheat.) 1, 25-27 (1820); Hamilton, The

Federalist Papers, No. 82. But courts which more closely have

examined the concerns underlying the adoption of the civil

rights statute have been more hard-pressed to justify state

court jurisdiction over § 1983 actions. Compare Terry v.

Kolski, 254 N.W. 2d 704 (S.Ct. Wis. 1977) (state courts open to

§ 1983 actions) with Terry, id. at 713 et oe. eeennne opin-

ion) and Chamberlain v. Brown, 442 S,W.2d (S.Ct. Tenn.

1969) (no state jurisdiction for § 1983 actions).

—l4a—

rule of Lakefront that a taxpayer who has secured a re-

fund cannot receive interest on that refund. See, supra,

p. 6. Consequently, plaintiff contends that this de-

initive precedent in state law renders a state section

1983 remedy inadequate. Plaintiff's argument assumes

that an Illinois court adjudicating a federal claim under

section 1983 would be free to apply Illinois equity law, a

a that is far from certain.!2 Nevertheless, we

lieve that the doubt whether an Illinois court would

apply federal equity law instead of the Illinois rule

against interest on tax refunds renders a remedy pur-

suant to a possible section 1983 action in the state court

less than plain.

But independent of this uncertainty about the ade-

quacy of the remedy, an exact reading of the Tax In-

junction Act and strict attention to the principles un-

derlying section 1983 compel the conclusion that the

12 In Sullivan v. Little Hunting Park, Inc., 396 U.S. 229

(1969), the Supreme Court held that in a state court action

pursuant to 42 U.S.C. § 1982, questions regesding compen-

satory damages for the deprivation of a federal right are

verned by federal standards under 42 U.S.C. § 1988. The

urt also noted that a federal court can fashion an effective

equitable remedy and that,

That federal remedy for the protection of a federal right

is available in the state court, if that court is empowered

to grant injunctive relief, generally, as is the Virginia

court. Va. Code Ann. § 8-610 (1957 Repl. Vol.).

Id. at 238.

Sullivan does not directly answer the question here:

when state equitable law is at odds with federal law (as we

have concluded it is here with regard to the adequacy of the

Illinois refund remedy), which law would apply in a § 1983

action. While the inference from Sullivan is that federal law

would app! see also Testa v. Katt, 330 U.S. 386 (1947) Ward

v. Boar of ( County Comm'rs (Love County), 253 U.S. 17 (1920);

General Oil Co. v. rhea 209 U.S. 211 (1908), that conclusion

is not settled. See generally, Fulton Market, supra, 582 F.2d at

1080; Hart & Wechsler, supra, at 434-37, 521-24; Comment,

Racial Discrimination and the Tax Injunction Act, 90 Harv.

L. Rev. 616, 623-24 n.49 (1977); Note, State Enforcement of

aera Created Rights, <73 Harv. L. Rev. 155i, 1556-61

—15a—

availability of a state court action under section 1983

does not bar federal jurisdiction. Reading the Tax In-

— Act to bar federal court jurisdiction on the

asis of the possibility of bringing a federal cause of

action under section 1983 in state court leads to an un-

tenable conclusion: the Tax Injunction Act would bar

federal jurisdiction in all cases involving state tax opera-

tions—without exception. Defendants’ position assumes

that state courts generally have concurrent jurisdiction

over federal causes of actions, including section 1983,

and that a state court hearing that federal claim would

apply federal equity law (if the state court were free to

apply state equity law then, in this case, interest would

not be available as part of the remedy and the remedy

would be inadequate). But if both these assumptions

were true, there would be no class of cases that would

escape the bar on federal court jurisdiction contained in

the Tax Injunction Act. Whatever action could be

brought in federal court, given inadequate state

statutory and judicial remedies, also could be brought in

state court under federal law pursuant to the state

court’s concurrent jurisdiction. See generally, Iowa-

DesMoines Nat'l Bank v. Bennett, 284 U.S. 239 (1931);

General Oil, supra, 209 U.S. 211. Federal courts never

would have jurisdiction over actions brought by tax-

payers regarding illegal state tax assessments.

Although Congress possesses the power to legislate

this result, there is no indication that the Tax Injunction

Act was meant to do so.* The language of the Act on its

face contemplates cases which wili escape its jurisdic-

tional proscription, and the explanations of the statute

contained in its legislative history unmistakably cor-

roborate this reading of the Act. See supra p. 4. See also

one the Fifth Circuit stated in Tramel, supra, 505 F.2d at

Encroachments on the federal judiciary’s power to vin-

dicate rights allegedly guaranteed by the Constitution

must be construed narrowly. Cf. Phillips v. United States,

1941, 312 U.S. 246, 251.

—16a—

81 Cong. Rec. 1416 (1937) (remarks of Sen. Bone)."

There is no reason to conclude that defendants’ reading

of the Tax Injunction Act—a reading which would lead

to a result clearly not contemplated by the drafters of

the Act—is correct.

Defendants’ position makes even less sense as a prac-

tical matter. In order to argue that a section 1983 action

brought in an Illinois court constitutes an adequate

remedy, defendants must presume that federal equity

law applies. But then it is difficult to conceive of any

significant state autonomy interest that is served by

barring federal court jurisdiction. Defendants’ position

leads to the scenario of a state court adjudicating a

cause of action and formulating a remedy—and

throughout required to apply federal law. It would be

difficult to say that this is less of an incursion into state

autonomy than an action in federal court. And this

result undermines judicial efficiency and legal expertise.

It is unlikely that when Congress drafted the Tax In-

— Act it intended that all disputes in which state

egal and equitable remedies were inadequate be resolv-

ed in state court under these conditions.

4 There is a suggestion implicit in the legislative history of

the Act that it is only when a state legal or equitable remedy

is available and adequate—not when there is a federal remedy

which can be brought in state court—that the jurisdictional

bar applies. The Act’s sponsor explained that “specific provi-

sion is made that the suit will be taken out of the jurisdiction

of the Federal court only if a plain, speedy, and efficient

remedy may be had at law or in equity in the courts of the

State.” 81 Cong. Rec. 1416 (1937) (remarks of Sen. Bone).

Senator Bone also excerpted a portion of the Judiciary Com-

mittee Report on the Johnson Act and included it in the Con-

reser. Record. He said the excerpt was “applicable to [the

ax Injunction Act] in the same manner that [it was]

applicable to the Johnson Bill. Jd. The excerpt described the

archetype of the disputes meant to be excluded from federal

court and added:

And all the time in this dispute there is no Federal ques-

tion involved. \.‘here is a dispute arising under a State

statute or law of other origin and nothing more.

Id. at 1417. See Garrett, supra, 538 F.2d at 66-67.

—l7a—

Our conclusion that the possibility of bringing a sec-

tion 1983 action in state court does not bar, pursuant to

the Tax Injunction Act, federal jurisdiction over an ac-

tion alleging that state taxes were exacted un-

constitutionally, is corroborated by the principles and

policies underlying 42 U.S.C. § 1983.5 The sponsors,

supporters and even the opponents of the predecessor of

section 1983 likely would be shocked indeed if they were

to learn that the possibility of bringing a section 1983

action in state court had barred a section 1983 plaintiff

from federal court.

The Supreme Court in Mitchum v. Foster, 407 U.S.

225 (1972) observed:

Section 1983 opened the federal courts to private

citizens, offering a uniquely federal remedy against

incursions under the claimed authority of state law

upon rights secured by the Constitution and laws of

the Nation.

Id. at 239 (emphasis added). When Congress passed the

predecessor of section 1983,

[it] clearly conceived that it was altering the

relationship between the States and the Nation with

respect to the protection of federally created rights;

it was concerned that state instrumentalities could

not protect those rights; it realized that state of-

ficers might, in fact, be antipathetic to the vindica-

tion of those rights; and it believed that these

failings extended to the state courts.

Id. at 242.6 The failure of state courts to vindicate

federal rights was one of the primary motivations for

16 This assumes, of course, that there is no adequate legal or

equitable remedy at state law.

1 The oe legislation passed to effectuate the post-

Civil War amendments gave the federal courts primary

responsibility for vindicating the rights expressed in those

amendments:

[The federal courts supplanted] the state courts as the

principal forum for enforcing federal law... .

(Footnote continued on following page)

="

assage of the predecessor of section 1983. Jd. at 240-42.

ee also, Wiecek, The Reconstruction of Federal Judicial

Power, 1863-1875, 13 Am. J. Legal Hist. 333. 338 (1969);

Developments, we rg at 1142-50. The legislative history

of the Act is replete with references to the inability and

unwillingness of state courts to protect federal rights

and, as a result, to the need to insure access to the

federal courts. See Mitchum, supra, 407 U.S. at 241 n.31;

Developments, supra, at 1154-55 nn.112, 114. As the

Supreme Court stated in Monroe v. Pape, 362 U.S. 167,

180 (1961):

It is abundantly clear that one reason the legislation

was passed was to afford a federal right in federal

aa

Defendants ask us to turn section 1983 on its head. If

their argument were accepted, access to federal courts

for the protection of Fourteenth Amendment rights

would be denied because of the availability in state

courts of “a uniquely federal remedy” which Congress

enacted precisely because of the failure of state courts to

protect federal rights. We do not embrace this perverse

result. The legislative history of the statute compels our

conclusion that the availability of a section 1983 action

in state court does not bar federal jurisdiction over a

section 1983 action brought in federal court to vindicate

16 continued

This significant expansion of federal judicial power seems

to reflect both the Republicans’ belief that the judiciary

was the most appropriate institution to effectuate their

“moderate revolution” in civil rights and their increasing

distrust of the willingness of state judges to enforce

vigorously national laws or fulfil! national policies. Rather

than providing for a large-scale displacement of state

lice power by congressional regulation of intrastate af-

airs, the Republicans sought to create in the federal

courts opportunities for litigants . . . to invoke the power

of the national government to safeguard nationally

ores liberties threatened by the action or inaction of

e states.

Developments in the Law—Section 1983 and rederalism, 90

Harv. L. Rev. 1133, 1142, 1150 (1977) (citations omitted).

—19a—

constitutional rights allegedly violated by an illegal state

tax assessment.

Our review of the respective legislative histories of the

Tax Injunction Act and section 1983 leads to the conclu-

sion that Congress did not intend that the possibility of

bringing a section 1983 action in state court would bar,

pursuant to the Tax Injunction Act, federal jurisdiction

over a section 1983 action brought in federal court,

Further, we have concluded that there is no legal or

equitable remedy available unter Illinois law which is

“plain, speedy and efficient.”

_For these reasons, we conclude that federal jurisdic-

tion over plaintiff's suit was proper. The judgment of the

district court is reversed.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit

—20a—

APPENDIX B

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

LaSauLe Nationa Bank, Trustee under

Trust No. 44891,

Plaintiff,

No. 78C 3746 VS.

Epwarp J. RosEwE.., et al.,

Defendants.

Before Nicuotas J. Bua, Judge

United States District Court

ORDER

This matter came on upon plaintiff’s motion for a pre-

liminary injunction and this court having considered the

motion, the brief of plaintiff, the motion of defendants to

dismiss and having heard the arguments of counsel, finds:

1. The availability of equitable and declaratory relief

in the Illinois state courts provides the plaintiff with a

‘‘plain, speedy and efficient’’ remedy. Tully v. Griffin, 429

U.S. 68 (1976).

2. The non-payment of interest on refunds pursuant to

Sections 675 and 716 of Chapter 120, Illinois Revised Stat-

utes, does not render the remedy in Illinois courts not

‘‘plain, speedy and efficient’’.

3. In order to maintain the status quo while plaintiff

appeals from this Order, it is necessary that pursuant to

Rule 62(c), Fed. R. Civ. Pro., an injunction pending ap-

peal enter restraining the defendant Rosewell from pro-

ceeding to judgment and order of sale against the property,

—2la—

Permanent Index No. 32 23 414 054, Volume 16, of the 1977

tax rolls and from selling said property in the matter of

his annual application for judgment, ete., in the Circuit

Court of Cook County.

(a) If such an injunction is not entered, the defendant

will proceed to judgment against the property and the

property will be sold at the annual tax sale unless the

plaintiff redeems the property, with interest and penalties,

thereby rendering it impossible for this or any other court

to afford relief to plaintiff in the event it prevails upon

appeal.

(b) The county will not suffer any damage by this in-

junction, since it will be entitled to full payment, plus in-

terest, if this order is upheld.

(c) The public interest will not be harmed.

(d) There is a substantial likelihood that petitioner may

prevail on appeal.

CONCLUSION

Under the provisions of 28 U.S.C. $1341 denying juris-

diction to this court in restraining the collection of state

taxes when a plain, speedy, and efficient remedy exists in

the state courts, this court has no jurisdiction of the sub-

ject matter of this complaint.

Ir Is THEReForRE Orperep that plaintiff’s motion for a

preliminary injunction is denied and that the complaint is

dismissed for want of jurisdiction.

Ir Is FurtTHER OrDERED that pursuant to Rule 62(c), Fed.

R. Civ. Pro., Edward J. Rosewell, defendant County Col-

lector, is enjoined from proceeding to judgment and order

of sale against Cook County property. Permanent Index

No. 32 23 414 054, Volume 16, and from selling said property

pending the appeal of this order to the United States Court

of Appeals for the Seventh Circuit.

/s/ Nicholas J. Bua

United States District Judge

Dartep: November 30, 1978

—22a—

APPENDIX C

UNITED STATES COURT OF APPEALS

For the Seventh Circuit

Chicago, Illinois 60604

October 30, 1979

Before

Hon. Lutruer M. Swycert, Circuit Judge

Hon. Lreonarp P. Moors, Sr., Circuit Judge*

Hon. Pump W. Tone, Circuit Judge

LaSatie Nationat Bank, Trustee under

Trust No. 44891,

Plaintiff-Appellant,

No. 78-2594 vs.

Epwarp J. Rosewe.i, Treasurer of Cook County, and

THomas M. Tutiy, Assessor of Cook County,

Defendants-A ppellees.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 78-C-3746 — Nicnotas J. Bua, Judge.

all

On consideration of the petition for rehearing and sug-

gestion for rehearing in banc filed in the above entitled

* Honorable Leonard P. Moore, Senior Judge for the U.S. Court

of Appeals for the Second Circuit is sitting by designation.

—23a—

cause by counsel for the defendants-appellees, a vote of the

active members of the Court was requested, and a majority

of the active members of the Court has voted to deny a

rehearing im banc.** All of the judges on the original panel

have voted to deny the petition for rehearing. Accordingly,

Ir Is Orperep that the aforesaid petition for rehearing

be, and the same is hereby, Denizp.

*¢ Judges Pell, Sprecher, Bauer and Wood voted to grant the

suggestion for rehearing in banc.