Opposition Brief — Hibbs v. Winn

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a | AUG 22 2733

No. 02-1809

In The

Supreme Court of the Anited States

+

J. ELLIOTT HIBBS, in his official capacity as

Director of the Arizona Department of Revenue,

Petitioner,

v.

KATHLEEN M. WINN, Arizona taxpayer; DIANE

WOLFTHAL, Arizona taxpayer; MAURICE WOLFTHAL,

Arizona taxpayer; LYNN HOFFMAN, Arizona taxpayer,

Respondents.

+

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

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RESPONDENTS’ BRIEF IN OPPOSITION

¢

MARVIN S. COHEN*

ISABEL M. HUMPHREY

SACKS TIERNEY P.A.

4250 N. Drinkwater Blvd.

Scottsdale, AZ 85251-3647

(480) 425-2600

PAUL BENDER

College of Law

ARIZONA STATE UNIVERSITY

Box 877906

Tempe, AZ 85287-7906

(480) 965-2556

* Counsei 2 Record

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTIONS PRESENTED

1. Was the petition for certiorari jurisdictionally out

of time?

2. Is district court jurisdiction in this case barred by

the Tax Injunction Act or principles of federal-state com-

ity?

ii

TABLE OF CONTENTS

Page

ee i

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Table of Asstiner thes ...ccccccvcccccsescescessssennesemmmmmnnnnn iii

PUTIBGICER ..0.000ccccccccccecnssccescnsoossssennemma 1

Db nGSERORG,.0..ccccccccccsccseccssecsiosnnsensensemme 3

Reasons Why The Petition Should Be Denied........... 8

I. The Petition For Certiorari Is Jurisdiction-

Oly UtiRGEe ..<cccccccessccssssenieosnsennenmmnaa 8

II. The Decision Below Was Clearly Correct....... 13

III. There Is No Significant Conflict In The Circuits;

Dae ARGTRED cocccecscccsscssnsesetsmmmenn 19

COR SISEER 20000ccccccccccccsssscsssesssseemmnne 25

Appendix

Order Recalling Court of Appeals’ Mandate........... App. 1

Order Directing Parties to File Supplemental

| App. 2

TABLE OF AUTHORITIES

Page

CASES

ANR Pipeline Co. v. LaFaver, 150 F.3d 1178 (10th

ESSE LI 20

American Civil Liberties Union v. Bridges, No. 02-

30493, 2003 WL 21362357 (5th Cir. 2003).............. 23, 24

Appling County v. Municipal Elec. Auth., 621 F.2d

1301 (Sth Cir. 1960)...............cccccececeesseess oseesescesessesees 15, 20

Calderon v. Thompson, 523 U.S. 538 (1998), revers-

ing 151 F.3d 918 (9th Cir. 1997).................cccccecesssereeenees 12

Colonial Pipeline Co. v. Collins, 921 F.2d 1237 (11th

EE 21, 22

Committee for Public Education v. Nyquist, 413

eR 18, 19, 24

Committee for Public Education v. Nyquist, 350

ee 18

Cortez v. University Mall Shopping Center, 941

CS ES 17

Deal v. Cincinnati Board of Education, 402 US.

CEE ST 9

Department of Banking v. Pink, 317 U.S. 264 (1942)......... 9

Dunn v. Carey, 808 F.2d 555 (7th Cir. 1986) ..................... 20

Fair Assessment in Real Estate Assoc., Inc. v.

McNary, 454 U.S. 100 (1981)................ccccccccceeeees 7, 18, 19

Federal Election Comm'n v. NRA Political Victory

EE 9

Great Lakes Dredge & Dock Co. v. Huffman, 319

ee Ci Gece necerenesccsssszssesscenscevenecscnsseseosesesseseuenee 7, 18

iv

TABLE OF AUTHORITIES -— Continued

Page

Griffin v. Prince Edward County, 377 U.S. 218

TIE nnissnteenepurinnenieraiintenanenpenaetninaamniaiiniasiniasasnseees 18, 24

Hargrave v. McKinney, 413 F.2d 320 (5th Cir. 1969) ........ 15

In re Gillis, 836 F.2d 1001 (6th Cir. 1988)................... 21, 22

In re Jackson County, 834 F.2d 150 (8th Cir. 1987)....15, 21

Jarecki v. G.D. Searle & Co., 367 U.S. 303 (1961) ............ 17

Jefferson County v. Acker, 527 U.S. 423 (1999)................. 14

Lawyer v. Hilton Head Pub. Serv. Dist. No. 1, 220

ee 21

Missouri v. Jenkins, 495 U.S. 33 (1990) ................cccceceeeeees 9

Moton v. Lambert, 508 F. Supp. 367 (N.D. Miss.

TET nnepaneseemnusnenmebnienneaietenaneieninnieniens 15

Mueller v. Allen, 463 U.S. 388 (1983).................... 18, 19, 24

Mueller v. Allen, 676 F.2d 1195 (8th Cir. 1982)................. 19

Mueller v. Allen, 514 F. Supp. 998 (D. Minn. 1981) .......... 18

Rojas v. Fitch, 928 F. Supp. 155 (D.R.I. 1996)................... 15

Schacht v. United States, 398 U.S. 58 (1970)..................... 9

Sipe v. Amerada Hess Corp., 689 F.2d 396 (3rd Cir.

a 20

Teague v. Commissioner of Customs, 394 U.S. 977

TITIE ccsnspeumsmntsnnneeneninunenienneennntimeeees 9

U.S. v. Parker, 30 F.3d 542 (4th Cir. 1994), cert.

BL ee 17

United States Brewers Ass’n v. Perez, 592 F.2d 1212

I Te nmennnnmnnnnieniinemieee! 21, 22

v

TABLE OF AUTHORITIES -— Continued

Page

Wells v. Malloy, 510 F.2d 74 (2nd Cir. 1975).................0000. 20

Zelman v. Simmons-Harris, 526 U.S. 639 (2002) ........... 4,5

RULES

Rule 35 of the Federal Rules of Appellate Procedure....10, 11

Rule 40(aX1) of the Federal Rules of Appellate

ID crnsscenernesneneanniiiinniintetnienpmmsinnnees 1

Rule 41(b) of the Federal Rules of Appellate Proce-

ee 12

eC SE cernseinerennttnncennnaineennentninndpnenmenennias 2

ee 3,8

EE HII Ut cccinnnenrintennsenimemetnneipninmninmeeniel 3,9

ED BNE cxnncictnccenntnecnnniennsenetesesmnens 3, 8, 10, 11

EE 10

I 10

Ninth Circuit Gen. Ord. 5.4(C).............ccccccceeeeeeeeees 10, 11, 12

Ninth Circuit Gem. Ord. 5.4(d) ............cccccccccssecccescrccsesesees 12

ee 10

D.C. Circuit Internal Operating Proc., XITI (B)(2)............ 10

Federal Circuit R. 35 proc. notes..................ccccccceeeeeeeeeeeeees 10

FEDERAL STATUTES

Tax Injunction Act, 28 U.S.C. § 1341.................... 5-7, 13-24

Eee 2, 3, 8, 9, 13

GE © BiB eresssssssszssnesssccsccssssssnssssesemueressresnssescusensnees 15

vi

TABLE OF AUTHORITIES - Continued

Page

STATE STATUTES

Arizona Rev. Stat. Ann. § 43-1089 ...................ccceeeeeeee 3, 4,5

OTHER AUTHORITIES

Fallon, et al., Hart & Wechsler’s The Federal Courts

and The Federal System (4th ed. 1996) ...............00000 8, 16

Moore’s Federal Practice § 513.03[1}[a] (3d ed.)............ 8,15

S.Rep. No. 1035, 75th Cong., Ist Sess. (1937)...............00+ 16

Stern, Gressman, Shapiro & Geller, Supreme Court

ECCT 8,9

Wright, et al., Federal Practice and Procedure (2nd

1 TTT isinisaienniniaieniitesininaaeea i aeniepeniienbineeniiesieraaneppeninemteel 16

1

RESPONDENTS’ BRIEF IN OPPOSITION

Respondents Kathleen M. Winn, et al., respectfully

request that this Court deny the petition for writ of certio-

rari. The court of appeals’ judgment was entered on

October 3, 2002. The petition for writ of certiorari was

filed eight months later, on June 3, 2003. No extension of .

time to petition for certiorari was sought or granted and

no timely petition for rehearing or rehearing en banc was

filed in the court of appeals’. The petition is therefore

jurisdictionally untimely. The decision below is, moreover,

clearly correct and consistent with the overwhelming

majority of lower-court decisions as well as this Court’s

decisions. The recent contrary decision of the Fifth Circuit,

rendered after the decision below in this case, is an anom-

aly that does not create a substantial conflict warranting

this Court’s review.

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JURISDICTION

The United States Court of Appeals for the Ninth

Circuit entered its judgment in this case on October 3,

2002. Pet. App. 11. No petition for rehearing or rehearing

en banc was filed by petitioner within the 14-day period

provided by Rule 40(a)(1) of the Federal Rules of Appellate

Procedure, nor did petitioner make a request for an

’ Petitioner labeled its response to the court of appeals’ November

13 request for supplemental briefing (see below) regarding the appro-

priateness of rehearing en banc as a “Petition for Rehearing and

Rehearing En Banc.” That document, however, was filed on December

27, 2002, long after the expiration of the time to petition for rehearing

had expired. The court of appeals never responded to this December 27

“petition.”

2

extension of time within which to file a rehearing petition.

Petitioner did not move to stay the court of appeals’

mandate while petitioner sought certiorari. The court of

appeals’ mandate was accordingly issued on October 25,

2002, and costs were taxed. No petition for certiorari was

filed during the ninety-day period provided for that pur-

pose by 28 U.S.C. § 2101(c) and this Court’s Rule 13.

On October 28, 2002, the Clerk of the Ninth Circuit

filed the following order: “The mandate issued on October

25, 2002 in the above captioned appeal was in error and is

RECALLED.” Op. App.’ 1, infra. Thereafter, on November

13, 2002, the court of appeals’ panel that had heard and

decided the case directed the parties to file briefs “setting

forth their respective positions on whether this case

should be reheard en banc.” Op. App. 2, infra. Subse-

quently, on March 5, 2003, the court filed an order reciting

that “[a] judge requested a vote on whether to rehear this

matter en banc,” that “the matter failed to receive a

majority of the votes of the nonrecused active judges in

favor of en banc consideration” and that “(t]he request for

rehearing en banc is denied.” Pet. App. 1. Judge Kleinfeld,

joined by Judge O’Scannlain, dissented from the denial of

rehearing en banc. Pet. App. 2-App. 10.

The present petition for writ of certiorari was filed on

June 3, 2003, eight months after the court of appeals’

* “Op. App.” cites are to the Appendix to this Brief in Opposition.

On January 17, 2003, petitioner filed a motion for clarification in the

court of appeals, asking the court to clarify whether its order recalling

the mandate and the court’s subsequent order directing the parties to

file supplemental briefs suspended the finality of the judgment. The

Clerk of Court responded by letter on February 7, 2003, that finality

had been suspended.

3

judgment was entered. Since no timely rehearing petition

was filed in the court of appeals, the petition for certiorari

was not filed within the time limit prescribed by statute

and this Court's rules. 28 U.S.C. §2101(c) and U/S.

Sup.Ct. Rules 13.1, 13.2 and 13.3. The Court consequently

lacks jurisdiction.

¢

STATEMENT

1. The Arizona Tax-Credit Program. — This case

involves an Establishment Clause challenge to an Arizona

statute, Ariz. Rev. Stat. § 43-1089" that, by means of state

income-tax credits, uses state tax revenues to fund reli-

gious primary and secondary school education. Under the

statute, all individual state taxpayers, whether or not they

have children in school, may satisfy part or all of their

annual state income-tax liability by transferring up to

$500‘ of the amount owed to the state each year for income

taxes to a “school tuition organization” (STO), rather than

to the state’s Department of Revenue. The taxpayer

receives a credit against income taxes for the full amount

transferred to the STO. The STO must, in turn, use the

tax revenues transferred to it to provide scholarships for

students attending non-public schools, including religious

schools.

Under the Arizona program, STOs need not take

financial need into account in awarding scholarships.

* The text of § 1089 is set forth in the petition for certiorari at Pet.

App. 37-App. 38.

* The amount for married taxpayers filing jointly is $625. Ariz.

Rev. Stat. § 43-1089(A\(2), Pet. App. 27.

4 ~

Moreover, each STO may (and almost all do) limit the

scholarships they award to students attending schools of a

particular religious denomination and/or to students of a

particular religious faith. Plaintiffs’ complaint alleged, for

example, that in the first full year of § 1089’s operation, at

least 94% of the tax revenues transferred toSTOs went to

religion-specific STOs - i.e., STOs that restrict their

grants to students attending religious schools of a specific

religious denomination. Pet. App. 14.

The Arizona program thus differs significantly from

the Ohio program recently upheld by this Court in Zelman

v. Simmons-Harris, 526 U.S. 639 (2002). Unlike the

program in Zelman, the Arizona program is limited nei-

ther to students with financial need nor to students

attending substandard schools. In Arizona, by contrast,

tax revenues can be and are used to subsidize religious

school tuition for students from affluent families and for

students who are already attending excellent private

schools. Nor (again unlike the situation in Zelman) does

the Arizona program provide support for academic pro-

grams at public as well as private schools; § 1089 permits

tax revenues to be diverted only to non-public schools. See

Ariz. Rev. Stat. Ann. § 43-1089(E)(2), at Pet. App. 38.°

Finally, as noted above, under the Arizona program schol-

arships may be awarded on a religiously discriminatory

basis. STOs need not be open to applications from all

eligible students, but may discriminate on the basis of

religion, and they ordinarily restrict grants to students who

* Arizona does have a program under which a considerably smaller

tax credit ($200) is given for payments supporting only extra-curricular

activities - such as sports teams or class trips -- at public schools.

Respondents do not challenge that program.

~~

5

wish to attend schools of a particular religious denomina-

tion.” Under the Zelman program, by contrast, eligible

students are considered by the state for vouchers without

regard to their religion, without regard to whether the

school they wish to attend is religious or non-religious and,

if the school is religious, without regard to the religious

affiliation of the school.

2. District Court Proceedings. — Respondents chal-

lenged this program under the Establishment Clause by

bringing suit in the United States District Court for the

District of Arizona. They sought declaratory and injunctive

relief prohibiting the state from using § 43-1089 to divert

state income-tax revenues to religious uses. Pet. App. 14.

Petitioner moved to dismiss on the basis of the federal Tax

Injunction Act, 28 U.S.C. § 1341, which provides that

federal district courts shall not “enjoin, suspend or re-

strain” the “assessment, levy or collection of any tax under

state law” when an adequate remedy is available in state

courts. The district court granted this motion on the

ground that respondents’ suit constituted an attempt,

barred by the Tax Injunction Act, to restrain the “assess-

ment” of state income taxes in federal court. Alternatively,

the court held that principles of federal-state comity

prohibited federal district court jurisdiction over any

attack on the constitutionality of a state tax law. Pet. App.

17, 23.

* In the first year of the Arizona program’s operation, more than

46% of the credited funds went to the Catholic Tuition Organization of

the Roman Catholic Diocese of Phoenix, which provides scholarships

only to students attending schools run by the Diocese. Pet. App. 14. An

eligible student may therefore fail to receive a scholarship solely

because of his or her religion or because he or she does not want to

attend a religious school.

6

3. The Decision Below. - A unanimous panei of the

court of appeals reversed and remanded for further con-

sideration of respondents’ claim. With regard to applica-

tion of the Tax Injunction Act, the court of appeals noted

that petitioner’s invocation of that Act was based entirely

on the assertions (1) that plaintiffs’ suit sought to enjoin

the “assessment” of Arizona income taxes and (2) that

“assessment” means “the overall calculus by which the

state determines how much revenue it will receive from

each taxpayer.” Pet. App. 16.

The court of appeals found this reading to be “sup-

ported neither by any precedent interpreting ‘assessment’

in this manner, nor by the meaning of the word [assess-

ment] itself.” Jbid. More fundamentally, the court observed

that, if respondents were to obtain relief from the district

court in this case, “there would be no violation of the

purposes or policy underlying the Tax Injunction Act.” Pet.

App. 18. One of these purposes, as shown by the Act’s

legislative history, was to eliminate the ability of nonresi-

dent taxpayers to use the federal diversity jurisdiction to

litigate state tax cases in federal rather than state court,

so as to avoid state “pay first-litigate later” rules. That

purpose was irrelevant to this case. Jbid. A second princi-

pal purpose was to prevent federal district judges from

disrupting a state’s collection of tax revenues. The invali-

dation of a tax credit, however, unlike the invalidation of a

tax itself, could not adversely affect or in any way under-

mine the state’s ability to raise revenue. Pet. App. 20. The

court therefore found that Arizona’s broad argument that

the Tax Injunction Act bars “any federal litigation regard-

ing the constitutionality of state taxes” was inconsistent

with precedent, the language of the Act, and the expressed

congressional purpose. Pet. App. 21.

7

The court of appeals also rejected the district court’s

use of the principle of federal-state comity to preclude

original federal jurisdiction here. Pet. App. 23-25. The

court recognized that this Court has twice used a comity

principle to bar district court jurisdiction in cases in which

the constitutionality of a state tax law was challenged.

Both of these cases,’ however, were ones “in which the

plaintiffs sought to stop the collection of a tax” thus

violating an expressed purpose of the Tax Injunction Act.

Pet. App. 23. By contrast, the tax provision challenged in

the instant case “is a limited, discrete portion of the

Arizona tax code that, if invalidated, would not substan-

tially affect the administration of taxes ... and would, in

fact, produce substantial additional revenue for the state.”

Pet. App. 26. Arizona had thus identified “no harm that

renders federal court review of this statute any more

intrusive on the state’s sovereignty than the review of any

other state statute that is alleged to be unconstitutional.

Accordingly, comity does not bar plaintiffs’ attempt to

vindicate the important constitutional rights at issue.”

Ibid.

" The cases are Great Lakes Dredge & Dock Co. v. Huffman, 319

U.S. 293 (1943), and Fair Assessment in Real Estate Assoc., Inc. v.

McNary, 454 U.S. 100 (1981).

8

REASONS WHY THE PETITION ¢

SHOULD BE DENIED

I. THE PETITION FOR CERTIORARI IS JURIS-

DICTIONALLY UNTIMELY

The judgment of the court of appeals that petitioner is

asking this Court to review was entered on October 3,

2002. A petition for writ of certiorari seeking review of that

judgment was required to be filed within 90 days after the

date judgment was entered, unless “a petition for rehear-

ing was timely filed in the lower court by any party,” in

which case the time to petition would run “from the date of

the denial of the petition for rehearing.” 28 U.S.C.

§ 2101(c); Sup.Ct. R. 13.1, 13.3. Neither party petitioned

the court of appeals for rehearing or rehearing en banc.

The time to petition for certiorari therefore expired in this

case on January 2, 2003 (January 1, the ninetieth day, was

a holiday). The petition here was not filed, however, until

June 3, 2003, more than five months after the time to

petition had expired.

Failure to comply with the statutory time limit for

filing a certiorari petition in a civil case is a non-waivable

jurisdictional defect. See, e.g., Stern, Gressman, Shapiro &

Geller, Supreme Court Practice 348 (8th ed. 2002) (“The

time limitations prescribed by Congress, as in 28 U.S.C.

§ 2101(c) with respect to all civil cases, make the untimely

filing of a petition a jurisdictional defect.”); Moore’s Fed-

eral Practice, § 513.03[1][a] (3rd ed.) and note (“A petition

is considered jurisdictionally out of time ... if it is filed

after the expiration of a time limitation imposed by Act of

Congress”; “28 U.S.C. § 2101(c) ... makes jurisdictional

the time to file petition for writ of certiorari in civil case.”);

Fallon, et al., Hart & Wechsler’s The Federal Courts and

the Federal System 1684 (4th ed. 1996) (“the statutory

9

limitations for certiorari and appeal, which are set forth in

28 U.S.C. § 2101(c), are regarded as jurisdictional”).

This Court has repeatedly emphasized the non-

waivable and jurisdictional nature of the time limit for

petitioning for certiorari in civil cases. See, e.g., Depart-

ment of Banking v. Pink, 317 U.S. 264, 268 (1942) (stating

that an untimely petition in a civil case “must ... be

denied for want of jurisdiction”); Federal Election Comm’n

v. NRA Political Victory Fund, 513 U.S. 88, 91-97 (1994);

Missouri v. Jenkins, 495 U.S. 33, 49 (1990); Stern, Gressman,

et al., supra, at 348-349 (“This jurisdictional requirement of

timeliness is strictly applied [by this Court] in civil cases. No

exceptions or waivers are recognized; no matter how

extenuating the circumstances, an untimely petition will

not be entertained.”) (citing Deal v. Cincinnati Board of

Education, 402 U.S. 962 (1974) (declining to entertain a

petition when an airline lost the applicant’s papers);

Teague v. Commissioner of Customs, 394 U.S. 977 (1969)

(declining to entertain a petition when a snowstorm caused

a postal delay). See also Schacht v. United States, 398 U.S.

58, 65 (1970) (“In the absence of language providing for

waiver, we have without exception treated the statutory

limitations as jurisdictional.”) (Harlan, J., concurring.)

This Court’s Rule 13.2 accordingly provides that “The

Clerk will not file any petition for a writ of certiorari that

is jurisdictionally out of time” (emphasis added).

Petitioner appears to have mistakenly based the filing

date of his petition on his belief that the petition seeks

review of the action taken by the court of appeals on

March 5, 2003, when the court denied a circuit judge’s sua

sponte request for rehearing en banc. Thus the first

paragraph of the petition states that petitioner “requests

that a writ of certiorari issue to review the judgment and

10

opinion of the United States Court of Appeals for the

Ninth Circuit entered in this case on March 5, 2003”

(emphasis added). That statement is incorrect. The peti-

tion here seeks review, not of the court of appeals’ March

5, 2003, denial of en banc rehearing, but of the judgment

of the court of appeals, which was entered on October 3,

2002, and the time within which a certiorari petition must

be filed runs from the date of that judgment. Sup.Ct. R.

13.3.

It is true that this Court’s rules provide for extending

the time period during which a certiorari petition may be

filed “if a petition for rehearing is timely filed in the lower

court by any party.” Ibid. That provision, however, is

inapplicable here for at least two reasons. First, no rehear-

ing request was filed here by a party, as Rule 13.3 re-

quires. Neither petitioner nor respondents petitioned for

rehearing or rehearing en banc in the court of appeals.

The only en banc request in this case was made, sua

sponte, by a judge of the circuit, presumably one who was

not a member of the unanimous panel. The rules and

procedures of the Fifth, Sixth, Ninth, Eleventh, District of

Columbia and Federal Circuits all expressly provide for or

recognize the possibility of such sua sponte en banc re-

quests,’ and Rule 35(a) of the Federal Rules of Appellate

Procedure appears to authorize them in all events. By

specifying that the time to petition for certiorari is ex-

tended beyond the statutory period of ninety days only

when a timely rehearing petition is filed in the court of

* See 5th Cir. R. 35.6; 6th Cir. R. 35(a) and (c); 9th Cir. Gen. Ord.

5.4(c); 11th Cir. R. Rule 35-5; D.C. Cir. Internal Operating Proc.

XIII(B)\(2); Fed. Cir. R. 35 proc. notes.

11

appeals “by any party,” Rule 13 appears expressly to

prohibit extensions of the time to petition for certiorari

during the pendency of sua sponte en banc requests. Rule

13 thus may reflect the fact that, unlike the situation

where a party requests rehearing, neither FRAP Rule 35

nor the rules of most circuits stipulate the time period

during which a sua sponte en banc request must be made,

nor do they require that the parties be informed of the

pendency of such a request.’ Extending the ninety-day

statutory period for filing a certiorari petition during the

pendency of sua sponte en banc requests would therefore

indefinitely extend the time during which a petition for

certiorari might be filed and also extend the period during

which the court of appeals’ decision would lack finality. In

all events, the jurisdictional nature of the ninety-day

statutory period for seeking certiorari in civil cases and

the completely clear language of Rule 13.3 clearly mean

that only rehearing petitions by a party can extend the

time to petition.

Secondly, even if timely sua sponte rehearing requests

were to be deemed to extend the time for seeking certio-

rari, the sua sponte request in this case appears not to

have been a timely one. The Ninth Circuit’s procedures

specify that a sua sponte en banc request must be made

“within seven days of the expiration of the time for filing a

petition for panel rehearing.” As the rules go on to explain,

“(t]his means the sua sponte call must be made within 21

* A time limit for sua sponte en banc requests seems to be present

only in the Ninth Circuit. Furthermore, only the Ninth Circuit requires

that the parties be informed of a sua sponte call for rehearing en banc.

9th Cir. Gen. Ord. 5.4(cX3).

12

days of the filing of the panel’s decision . . . .” 9th Cir. Gen.

Ord. 5.4(cX3). Although the circuit’s rules further provide

that, by making a “stop clock” request, a judge “may

extend the time in which to make an en banc call for 14

days,” “[oJnly one such delay is permitted.” In addition, a

judge making a “stop clock” call must “direct the Clerk of

Court or any person the Clerk may designate to stay the

mandate and notify the panel. ... Otherwise the mandate

will issue pursuant to F.R.A.P. 41(a) and en banc proce-

dures will terminate.” 9th Cir. Gen. Ord. 5.4d.

The court of appeals’ mandate in this case was issued

on October 25, 2002, one day after the deadline imposed by

Rule 41(b) of the Federal Rules of Appellate Procedure.

The issuance of the mandate strongly indicates that no-

timely “stop clock” call was made since, if such a call was

made, the Clerk would not have issued the mandate. The

Clerk’s order of October 28, 2002, recalling the mandate

does not explain the reasons for the recall, except to state

that the issuance of the mandate was “in error.” Op. App.

1. Although courts of appeals have inherent power to recall

their mandates, that power can be exercised “only in

extraordinary circumstances” involving “grave, unforeseen

contingencies.” Calderon v. Thompson, 523 U.S. 538, 550

(1998), reversing 151 F.3d 918 (9th Cir. 1997). No such

contingencies were present in this case. It is likely, there-

fore, that en banc procedures terminated in the Ninth

Circuit on October 25, 2002. Moreover, even if a timely

“stop clock” call was made and the mandate was properly

recalled, the time in which a timely sua sponte en banc

request could be made would have been extended only

until November 7, 2002. The court’s supplemental briefing

order, however, which the Ninth Circuit requires to be

entered “upon receipt” of a sua sponte en banc request, 9th

"|e

13

Cir. Gen. Ord. 5.4(cX3), was not entered until November

13, 2002, almost a week after the latest possible date on

which a timely sua sponte call could have been made.

These confusing and unexplained delays, in the one

circuit that has adopted time limits and notification

requirements for sua sponte en banc requests, reinforce

the need to respect the clear language and the jurisdic-

tional character of 28 U.S.C. § 2101(c) and Supreme Court

Rule 13. Pursuant to these provisions, the petition for

certiorari in this case was untimely and the Court has no

jurisdiction.

Il. THE DECISION BELOW WAS CLEARLY COR-

RECT

The court of appeals’ decision that the Tax Injunction

Act is not applicable to this case was clearly correct. The

Act does not bar district court jurisdiction over all consti-

tutional challenges to any aspect of state tax legislation,

as petitioner contends, but only over cases in which the

district court is asked to restrain the “assessment, levy or

collection” of state taxes. By seeking to invalidate, not a

tax, but an unconstitutional credit against income taxes

due, plaintiffs’ suit would do none of these things.

Contrary to petitioner’s argument, the removal of the

STO credit from the credits that may be subtracted on a

taxpayer’s return from the balance of taxes owed to Ari-

zona will have no effect whatsoever on Arizona’s ability to

“assess” taxes. Removing the STO credit will not change

Arizona’s definition of gross taxable income. It will not

change the amount or character of the deductions from

gross income that may be made in computing taxable

income. It will not change the tax rates applicable to that

14

taxable income, or the methods for calculating the taxes

that are due. Nor will plaintiff’s suit result in any inter-

ference with Arizona’s ability to “levy” or to “collect” any

tax. To the contrary, if respondents are successful Ari-

zona’s future state income tax revenues will be signifi-

cantly increased by the cancellation of an unconstitutional

credit against income taxes due.

Respondents’ complaint asks the district court (i) to

declare the STO tax-credit provision unconstitutional, (ii)

to enjoin defendant from permitting taxpayers to claim the

credit in the future, and (iii) to order the defendant to

inform STOs that they must return tax revenues in their

possession (i.e., amounts they have not yet awarded as

scholarships) to the state general fund. This relief would

in no way interfere with Arizona’s ability to assess, levy or

collect its income tax. Defendant would simply need to

remove the STO credit from the list of credits that taxpay-

ers may claim on their state income-tax returns in future

years and inform STOs of their obligation to return tax

funds in their possession to the state. The result of the

defendant’s compliance with such an order would be to

increase both state income-tax revenues and the amount

in the state general fund. No delay or other interference

with tax assessment or collection would occur. The Tax

Injunction Act is inapplicable in such a situation.

This Court recently unanimously explained, in an

opinion by Justice Ginsburg, that a suit to collect a state

tax from federal judges, challenged as a violation of the

Constitution’s intergovernmental tax immunity doctrine,

is not barred by the Tax Injunction Act because it does not

seek “to stop ... the collection of taxes.” Jefferson County

v. Acker, 527 U.S. 423, 433, 435 (1999). As the Eighth

Circuit has held, the same is true of a suit seeking a

15

district court order raising state property and income

taxes as part of a desegregation remedy because the Tax

Injunction Act is “inapplicable to efforts to require collec-

tion of additional taxes as opposed to efforts to inhibit the

collection of taxes.” In re Jackson County, 834 F.2d 150

(8th Cir. 1987). Numerous other district and circuit court

cases have reached the same conclusion. See, e.g., Rojas v.

Fitch, 928 F. Supp. 155 (D.R-L. 1996) (suit challenging the

exemption of religious organizations from state unem-

ployment tax is not barred by the Tax Injunction Act);

Moton v. Lambert, 508 F. Supp. 367, 368 (N.D. Miss. 1981)

(Tax Injunction Act is inapplicable to a suit challenging a

state property-tax exemption for racially discriminating

private schools); Appling County v. Municipal Elec. Auth.,

621 F.2d 1301 (5th Cir. 1980) (Tax Injunction Act is inap-

plicable to a suit seeking a declaration that a power plant

is subject to state tax); Hargrave v. McKinney, 413 F.2d

320 (5th Cir. 1969) (suit to “order the collection and

disbursement of certain county tax monies” is not barred

by the Tax Injunction Act). It is only in cases where the

federal remedy threatens actually to interfere with a

state’s ability to obtain tax revenue that the Act’s prohibi-

tion applies. In other cases, Congress has given plaintiffs

the right to choose a federal forum for litigation of their

federal constitutional claims.”

* See, e.g., 42 U.S.C. § 1983.-Scholarly commentary is in complete

agreement with the Ninth Circuit’s reading of the Tax Injunction Act.

See, e.g., Moore's Federal Practice (3d ed.) 57.25(2)[b) (“A suit co collect

tax is not one brought to restrain state action; therefore, it is not within

the Act's description of suits that are barred from adjudication by

federal courts”); Jd., § 121.41[{1) (The Act “seeks to avoid interference by

federal courts that would ‘threaten the flow of general revenue to or the

(Continued on following page)

16

In asking this Court to review the decision below, the

petitioner and amici focus their attention on the meaning

of the word “assessment” in the Act, as did Judge Kleinfeld

in his dissent from the circuit’s decision not to rehear the

case en banc. Although they recognize that dictionaries

contain a number of definitions of the term, they contend

that “assessment” should be defined broadly to encompass

everything having to do with state taxation. Proper statu-

tory construction, however, requires that unclear words in

a statute be construed to accomplish legislative intent.

The Tax Injunction Act was expressly designed by Con-

gress to prevent taxpayers who challenge the validity of

state taxes from using federal courts to obtain injunctive

relief that would withhold tax revenues from states and

their subdivisions so “as to seriously disrupt state and

county finances.” S.Rep. No. 1035, 75th Cong., 1st Sess. 2

(1937). The application of the term “assessment” by the

court of appeals in this case is completely consistent with

that intent.

Significantly, in interpreting the term “assessment,”

neither petitioner nor his amici refer to the intent of

Congress in adopting the Tax Injunction Act. Nor do they

advert to two of the fundamental rules of statutory con-

struction — noscitur a sociis and ejusdem generis. Under

the former doctrine, when general words are used in

association with more specific words, the general words

budgets of state governments.’”); Wright, et al, Federal Practice and

Procedure § 4237 (2nd ed. 2001); Fallon, et al., Hart & Wechsler’s The

Federal Courts and the Federal System (4th ed. 1996) p. 1216 (“Con-

gress was ... concerned that taxpayers, with the aid of a federal

injunction, could withhold large sums, thereby disrupting governmental

finances.”).

2 ee eI ut

— ORS sts wee.

17

take on the restricted meaning analogous to the more

specific words. As the Court said in Jarecki v. G.D. Searle

& Co.: “The maxim noscitur a sociis, that a word is known

by the company it keeps, while not an inescapable rule, is

often wisely applied where a word is capable of many

meanings in order to avoid the giving of unintended

breadth to the Acts of Congress.” 367 U.S. 303, 307 (1961)

(emphasis supplied). Similarly, under the principle of

ejusdem generis, specific terms in a statute govern general

terms. U.S. v. Parker, 30 F.3d 542 (4th Cir. 1994), cert.

denied, 513 U.S. 1029 (1994)." Thus, when the Tax Injunc-

tion Act bars federal suits to enjoin the “assessment, levy

or collection” of any state tax, the term “assessment” is to

be given a meaning that relates to the “levy” and “collec-

tion” of taxes. To interpret “assessment” as encompassing

the entire tax structure of the state, as petitioner and

amici would do, is inconsistent both with the expressed

intent of the Act and with these basic principles of statu-

tory construction.

The court of appeals was also clearly correct in reject-

ing the argument that principles of comity foreclose

district court jurisdiction here. As the decision below

explained, Pet. App. 23, the applicable comity principle,

like the Tax Injunction Act, bars federal jurisdiction only

where the relief sought would constitute actual interfer-

ence with a state’s collection of revenue. Both Supreme

Court cases in which comity has been invoked to bar

federal jurisdiction over challenges to state taxes were

" These two axioms of judicial construction are often considered

together as corollaries. See, e.g., Cortez v. University Mall Shopping

Center, 941 F. Supp. 1096 (D. Utah 1996).

18

thus cases in which plaintiffs “sought to stop the collection

of a tax.” Ibid. See Great Lakes Dredge & Dock Co. v.

Hoffman, 319 U.S. 293 (1943); Fair Assessment in Real

Estate Association v. McNary, 454 U.S. 100 (1981).

Since the first of these cases was decided, this Court

has twice entertained important Establishment Clause

challenges to state tax credits or deductions in cases that

originated in federal district courts. See Committee for

Public Education v. Nyquist, 413 U.S. 756 (1973); Mueller

v. Allen, 463 U.S. 378 (1983). See also Griffin v. Prince

Edward County, 377 U.S. 218 (1964), affirming a federal

district court’s injunction against a county’s allowance of

tax credits for taxpayer contributions to racially segre-

gated private schools. A unanimous Court in Griffin had

“no doubt of the power of the court to give this relief... . It

has long been established that actions against a county

can be maintained in United States courts in order to

vindicate federally guaranteed rights. ... The injunction

against ... giving tax credits ... is appropriate ... ” 377

U.S. at 232-233. No member of the Court mentioned either

the Tax Injunction Act or comity as a jurisdictional barrier

to relief striking down the unconstitutional tax credit.

Nyquist and Mueller are this Court’s two cases most

closely related to the Establishment Clause issues raised

in the present case. Nyquist struck down a New York

income-tax credit for private and religious school ex-

penses; Mueller upheld a Minnesota income-tax deduction

for religious school expenses. Both of these cases were

initiated in federal district courts. See Committee For

Public Education v. Nyquist, 350 F. Supp. 655 (S.D.N.Y.

1972); Mueller v. Allen, 514 F. Supp. 998 (D. Minn. 1981).

Nyquist came directly to this Court from a three-judge

district court; Mueller was reviewed in the court of appeals

< AGED” Big > Rima ae O™

19

before coming here. Mueller v. Allen, 676 F.2d 1195 (8th

Cir. 1982). If petitioner and amici are correct that the Tax

Injunction Act and principles of comity bar federal district

court jurisdiction in this case, jurisdiction would also have

been precluded in Nyquist and Mueller. Yet none of the

many opinions in either of these thoroughly well-litigated

cases suggests the relevance of the Tax Injunction Act or

comity principles. This omission is especially striking with

regard to Mueller, in which the opinion of the Court was

written by then-Justice Rehnquist who, less than two

years earlier, had written the Court’s important opinion in

Fair Assessment in Real Estate Assoc., Inc. v. McNary, 454

U.S. 100 (1981). The McNary opinion fully explored the

history and scope of the Tax Injunction Act and applied

comity principles to preclude district court jurisdiction in a

case threatening direct interference with state tax collec-

tion. If either the Act or principles of comity precluded a

federal district court suit challenging an unconstitutional

tax credit or deduction, there seems little doubt that the

Court would have noticed that serious jurisdictional defect

in Mueller.

Ill. THERE IS NO SIGNIFICANT CONFLICT IN

THE CIRCUITS; THE RECENT DECISION OF

THE FIFTH CIRCUIT IS AN ANOMALY

Like the court below, other federal courts of appeals

have, with the single exception of a Fifth Circuit panel

decision rendered after the decision below in this case,

consistently construed the Tax Injunction Act as applicable

only where the remedy sought would threaten some actual

interference with a state’s ability to collect tax revenue.

The basic distinction between suits that seek to prevent

tax collection, to which the Act applies, and suits seeking

remedies that do not interfere with tax collection, to which

20

the Act does not apply, has been consistently recognized in

the courts of appeals.

Thus in Dunn v. Carey, the Seventh Circuit, in an

opinion by Judge Easterbrook, held that “[t]he Tax Injunc-

tion Act applies only to requests that federal courts inter-

fere with the collection of state taxes.” 808 F.2d 555, 557

(7th Cir. 1986) (emphasis added). The Seventh Circuit

specifically rejected the contention (identical to the argu-

ment that petitioner makes here) that the Act “applies to

any federal litigation touching on the subject of state

taxes.” Judge Easterbrook explained that “neither the

language nor the legislative history of the statute supports

this interpretation. The text of 28 U.S.C. § 1341 does not

suggest that federal courts should tread lightly in issuing

orders that might allow governments to raise additional

taxes.” 808 F.2d at 558.

The Fifth Circuit, prior to its recent panel decision,

had adopted the same reading, concluding that, “under

Fifth Circuit precedents, § 1341 is inapplicable to the

present case because it seeks not to inhibit the collection of

taxes, but to require the collection of additional taxes.”

Appling County, 621 F.2d at 1303-04 (emphasis added).

The Second, Third, Fourth, and Tenth Circuits have all

reached the same conclusion. Wells v. Malloy, 510 F.2d 74

(2nd Cir. 1975) (Friendly, J.) (“In speaking of ‘collection’ [in

the Tax Injunction Act], Congress was referring to meth-

ods similar to assessment and levy, e.g., distress or execu-

tion ... that would produce money or other property

directly [to the State].”); ANR Pipeline Co. v. LaFaver, 150

F.3d 1178, 1191 (10th Cir. 1998) (Tax Injunction Act

applies to claims for “injunctive relief against state or local

taxes”); Sipe v. Amerada Hess Corp., 689 F.2d 396, 403

(3rd Cir. 1982) (“The policy of non-interference with state

™ os el ts LIne

ceptor en

ee ae eee ee ee —— betes net

21

revenue collection served by the Tax Injunction Act applies

fully to attempts to enjoin withholding, which often

comprises an essential administrative mechanism for the

orderly collection of taxes.”); Lawyer v. Hilton Head Pub.

Serv. Dist. No. 1, 220 F.3d 298, 301 (4th Cir. 2000) (Tax

Injunction Act reflects “Congress’s desire to keep federal

courts from unduly interfering with state revenue collec-

tion”) (emphasis added); In re Jackson County, 834 F.2d

150, 151 (8th Cir. 1987), the Tax Injunction Act “has been

held to be inapplicable to efforts to require collection of

additional taxes, as opposed to efforts to inhibit the collec-

tion of taxes” (emphasis added).

Petitioner cites three cases as support for the conten-

tion that a conflict in the circuits exists: United States

Brewers Ass’n v. Perez, 592 F.2d 1212 (1st Cir. 1979); In re

Gillis, 83 F.2d 1001 (6th Cir. 1988); and Colonial Pipeline

Co. v. Collins, 921 F.2d 1237 (11th Cir. 1982). Perez was

decided, not under the Tax Injunction Act, but under a

jurisdictional statute applicable only to the Common-

wealth of Puerto Rico. The case involved a challenge to a

tax increase on beer that exempted local beer producers.

The court observed that the plaintiffs’ request for relief

“could be formed in two ways, either by ordering the state

not to collect the tax increase or by requiring the state to

levy the tax hike on exempt as well as nonexempt parties.”

The court noted that the first (and most probable) form of

relief would directly restrain the collection of tax, while

the second would result in the district court’s creation of a

“broad taxing statute for which the Commonwealth may

have believed there was no need or which was actually

detrimental to its domestic policy.”

The situation in the present case is wholly dissimilar.

The relief respondents seek cannot possibly restrain the

22

collection of state taxes, would not impose any new tax on

any Arizona citizen, and would work no basic change in

Arizona income-tax policy. Similarly, in Colonial Pipeline

Co., the Eleventh Circuit applied the Tax Injunction Act

because the requested relief, if granted, “would require a

massive federal judicial intervention into virtually all

phases of Georgia’s ad valorem tax system.” Nothing

remotely comparable is present here.

In Gillis, the Sixth Circuit did not base its decision on

the Tax Injunction Act. It applied comity principles to

preclude federal jurisdiction in a case that challenged the

entire ad valorem tax system of the state of Kentucky. The

court of appeals observed that, if the plaintiffs prevailed,

there “the district court would be forced to issue a declara-

tory judgment finding that virtually all property owners in

the state of Kentucky had been deprived of their right to

equal protection under the United States Constitution by

the manner in which petitioners administered the state

tax system.” 836 F.2d at 1008. Plaintiff’s requested injunc-

tive relief would have required petitioners “to reassess all

real and personal property owned by coal, oil and gas

interests.” Jd. at 1009. The Gillis court concluded that, in

these circumstances, “the interference by the federal

courts into the state tax system is the same in degree and

kind as a suit seeking to enjoin a state tax.” Id. at 1008

(emphasis added).

Gillis thus explicitly relied on the presence of the

same revenue-destructive factors that this Court has

recognized as the basis for applying comity principles to

preclude district court jurisdiction. These revenue-

destructive factors are obviously not present here. Gillis,

like Perez and Colonial Pipeline, is completely consistent

with the court of appeals’ decision in the present case —

= —

= eee Te

23

federal district court jurisdiction is precluded only where

the relief requested would interfere with the state’s ability

to collect tax revenues.

In a supplemental filing, petitioner has informed the

Court of the June 11, 2003 Fifth Circuit opinion in Ameri-

can Civil Liberties Union v. Bridges, No. 02-30493, 2003

WL 21362357 (5th Cir. 2003). In that case, decided after

the petition for certiorari here was filed, Louisiana had

created exemptions in several state tax statutes for reli-

gious activities. These exemptions were challenged as

violations of the Establishment Clause. The district court,

following established precedent, found that the Tax In-

junction Act did not apply because plaintiff was not seek-

ing to restrain the “assessment, levy or collection” of state

taxes but to eliminate unconstitutional tax exemptions.

The Fifth Circuit reversed, broadly stating that the Tax

Injunction Act prevents a district court from hearing a suit

“seeking to prevent the state from carrying out the current

tax system by having a portion of that tax system declared

unconstitutional.” 2003 WL 21362357 at p. 5.

While the Fifth Circuit saw its decision as inconsis-

tent with the Ninth Circuit’s decision in the present case,

there are at least two important factual differences. First,

the Fifth Circuit in Bridges recognized that the district

court’s decision there could, in practical effect, result in

loss of tax revenue to the state: “[I]t is not necessarily true

that declaring the [Louisiana] exemptions to be unconsti-

tutional will result in the State collecting more taxes... .

In fact even as the ACLU argues, just the opposite could

occur, the State may resolve any putative constitutional

problems created by the challenged statutes by exempting

more entities and therefore collecting less taxes.” Ibid.

24

This potential for loss of state revenue as a result of

federal district court action is not present here.

A second distinction between ACLU v. Bridges and the

present case is the difference between tax exemptions and

tax credits. Exemptions are part of the process of estab-

lishing the amount of the taxpayer’s tax obligation; credits

are a means of satisfying that obligation once it is estab-

lished. It is possible, therefore, to characterize a challenge

to an exemption as a challenge to the process of “assess-

ing” the amount of income tax that is due to the state.

Even under such a broad definition of “assessment,”

however, the application of a credit toward satisfaction of

the tax obligation would not be part of the tax “assess-

ment” process.

While the Fifth Circuit’s language may be inconsistent

with the decision below in this case, its holding thus may

not create a conflict. In all events, one recent opinion of

one circuit that is out of step with the decisions of all other

circuits to have considered the question, as well as with

the opinions and decisions of this Court, does not call for —

review of the decision below in this case. The decision

below is consistent with decisions in every other circuit

and with this Court’s actions in Griffin, Nyquist and

Mueller. It is a clearly correct application of the Tax

Injunction Act and prevailing comity principles.

¢

25

CONCLUSION

The petition for a writ of certiorari should be denied.

AUGUST, 2003

Respectfully submitted,

MARVIN S. COHEN*

ISABEL M. HUMPHREY

SACKS TIERNEY PA.

4250 N. Drinkwater Blvd.

Scottsdale, AZ 85251-3647

(480) 425-2600

PAUL BENDER

College of Law

ARIZONA STATE UNIVERSITY

’ Box 877906

Tempe, AZ 85287-7906

(480) 965-2556

* Counsel of Record

App. 1

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KATHLEEN M WINN, an No. 01-15901

Arizona taxpayer, etal, =| 1). ©. No. CV-00-00287-EHC

Plaintiffs-Appellants, | District of Arizona, Phoenix

v. ORDER

MARK W KILLIAN, inhis_ | (Filed Oct. 28, 2002)

official capacity as Director

of the Arizona Department

of Revenue,

Defendant-Appellee.

The mandate issued on October 25, 2002 in the

above captioned appeal was in error and is RECALLED.

FOR THE COURT:

Cathy A. Catterson

Clerk of Court

/s/ Pinky Argonza

By: Pinky Argonza

Deputy Clerk

App. 2

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

KATHLEEN M WINN, an No. 01-15901

Arizona taxpayer; DIANE :

WOLFTHAL, Arizona D.C. No. CV-00-00287-EHC

taxpayer; MARUICE [sic] ORDER

WOLFTHAL, an Arizona

taxpayer; LYNN HOFFMAN,| “1°? Nev. 18, 2002)

an Arizona taxpayer,

Plaintiffs-Appellants,

v.

MARK W KILLIAN, in his

official capacity as Director

of the Arizona Department

of Revenue,

Defendant-Appellee.

Before: SCHROEDER, Chief Judge, D.W. NELSON and

REINHARDT, Circuit Judges

The parties are directed to file simultaneous briefs

setting forth their respective positions on whether this

case should be reheard en banc. The briefs shall not

exceed fifteen (15) pages and shall be filed within

twenty-one (21) days from the filed date of this order.

Fifty (50) copies should be filed.