Petition for Writ of Certiorari — Berks County v. Murtagh

| Supremes Court, U.8,

| '

No. P l ” a7 D

GH11 87 wan 25

tas QEBICE OF THE CLERK

Supreme Court of the United States

o~—

October Term, 1995

COUNTY OF BERKS AND THE BERKS COUNTY BOARD

OF ASSESSMENT APPEALS,

Petitioners,

VS.

MERRY J. MURTAGH, et ai.,

Respondents.

Petition for Writ of Certiorari to the Commonwealth

Court of Pennsylvania

PETITION FOR WRIT OF CERTIORARI

JOSEPH C. MOSSOP DANIEL B. HUYETT

CERULLO DATTE Counsel of Record

& WALLBILLICH, P.C. E. THOMAS HENEFER

Special Counsel to Petitioner STEVENS & LEE

the Berks County Board of Special Counsel to Petitioner

Assessment Appeals the County of Berks

Second Street and 111 North Sixth Street

Laurel Boulevard P.O. Box 67°

Pottsville, Pennsylvania 17901 Reading, Pennsylvania 19603

(717) 622-0767 (610) 478-2000

(800) 3 APPEAL « (800) 5 APPEAL » (800) BRIEF 21

I. QUESTIONS PRESENTED

Whether, by ignoring this Court’s decision in

National Private Truck Council, Inc. v. Oklahoma

Tax Commission, 115 S. Ct. 2351 (1995), and its

specific admonition that a prior decision by the

Pennsylvania Supreme Court in this case requiring

State courts to hear challenges to local taxes under

42 U.S.C. §1983 was incorrect, the Pennsylvania

Supreme Court’s decision to permit a taxpayer

class action to proceed under §1983 for money

damages so eviscerates the long-standing federal

policy against interference with local taxation that

review and reversal by this Court are necessary.

Whether the Court should grant the writ to

establish a uniform national policy for

determining municipal liability under 42 U.S.C.

§1983 pursuant to Monell v. New York City

Department of Social Services, 436 U.S. 658

(1978), and its progeny in light of the

Pennsylvania courts’ decision that state legislative

delegation of “final policymaking authority” for

municipalities to county boards of assessment

shields the municipalities from §1983 liability for

their improper collection of local taxes.

(i)

Il. PARTIES TO THE PROCEEDING AND

CORPORATE DISCLOSURE

The Petitioners are the County of Berks,

Pennsylvania and the Berks County Board of Assessment

Appeals, defendants in the proceedings before the trial

court, appellees in the proceedings before the

Pennsylvania Commonwealth Court and petitioners in the

proceedings before the Pennsylvania Supreme Court.

Petitioners have no parent companies or non-wholly

owned subsidiaries requiring disclosure under Rule 29.6.

The following respondents were Plaintiffs

in the proceedings before the trial court, appellees in the

proceedings before the Pennsylvania Commonwealth

Court and petitioners in the proceedings before the

Pennsylvania Supreme Court: Merry J. Murtagh;

Spencer Lee Cherashore, Frederick Murtagh; Mary S.

Murtagh; Anthony Gigliotti; George Chovanes; Margaret

Chovanes; Michael Chovanes;-LRM Ziegenfuss, a

Pennsylvania partnership; and Concetta C. Good.

The following respondents were additional

defendants in the proceedings before the trial court,

appellants in the proceedings before the Pennsylvania

Commonwealth Court and respondents in the proceedings

before the Pennsylvania Supreme Court: Boyertown

Area School District; Daniel Boone Schoo! District;

Exeter Township School District; Fleetwood School

District; Governor Mifflin School District; Kutztown

School District; Muhlenberg School District; City of

(ii)

Reading School District; Schuylkill Valley School

District; Wilson School District; Wyomissing Area

School District; Hamburg School District; Twin Valley

School District; Greenwich Township; Marion Township;

Brecknock Township; Centre Township; Maxatawny

Township; Caernarvon Township; Borough of Kutztown;

Borough of St. Lawrence; Borough of West Lawn;

Borough of Hamburg; Borough of Laureldale; Oley

Valley School District; Borough of Centerport, Upper

Bern Township; Borough of Bechtelsville; Borough of

Kenhorst; Leesport Borough; Colebrookdale Township;

Cumru Township; Muhlenberg Township; Upper Bern

Township; Conrad Weiser School District; Borough of

Wyomissing Hills; Borough of Birdsboro; Borough of

West Reading, Township of Heidelberg, Township of

Lower Heidelberg, Township of Oley, Township of

Tilden, Township of Upper Tulpehocken; and Township

of Douglass.

(ili)

lil. TABLE OF CONTENTS

Page

l, QUESTIONS PRESENTED ..... cs cvcsce (i)

Il. PARTIES TO THE PROCEEDING AND

CORPORATE DISCLOSURE ........... (ii)

il. TABLE OF CONTENTS ......cccc000. (iv)

IV. TABLE OF CITED AUTHORITIES ....... (vi)

V. JURISDICTIONAL STATEMENT ........ l

VI. CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED ............. l

Vil. STATEMENT OF THE CASE.......... 2

VIII. REASONS FOR ISSUANCE OF

pis es 7

A. The Avalanche of Litigation

Following Webster and Murtagh |

and the Erosion of the Federal

Policy of Non-interference With

i ee eo a ee ee eo es 7

B. The Court Should Resolve The

Conflict Over the Viability of

(iv)

§1983 Claims Challenging Local

EG or a lh ee ee + 6 88 Oe 12

G. The Municipal Defendants May Be

Liable Under §1983 Because Of

The Board’s Final Policymaking

ee na ne eee ee 17

D. The Court Has Jurisdiction to Hear

This Appeal. .....--2-+-e2e08: 23

ee: + fi tl rere re eee 29

VII. APPENDICES

A.

Opinion of the Pennsylvania

Commonwealth Court, Pellegrini, J., dated

January 9, 1992

Opinion of the Pennsylvania Supreme

Court, Flaherty, J., dated November a

1993

Opinion of the Commonwealth Court,

Kelley, J., dated May 26, 1995

Order of the Pennsylvania Supreme Court,

dated November 22, 1995 denying

petitions for allowance of appeal

Constitutional Provisions and Statutes

(v)

IV. TABLE OF CITED AUTHORITIES

Cases Page

Alderman v. County of Cumberland, No. 857-1994,

Court of Common Pleas of Cumberland County .... 8

Alexander v. Mastercraft, 455 Pa. 579,

ciy@ ® &> 5: (Pere oer eree 24

Allegheny Pittsburgh Coal Co. v. County

Commission of Webster County, 488 U.S. 336

GRPED 8 ects tcdsabheseeevesee eee 3, 7-9, 27

Averback v. Board of Assessors, 176 A.D.2d

1151, 375 N.Y¥.5.28 964 (1991) 2... 00 0c. ... 9

Balazik v. County of Dauphin, 44 F.3d 209

oo o> SP. ee ee ee g 9

Behe v. Chester County Board of Assessment

Appeals, 952 F.2d 66 (3d. Cir. 1991) ..... 8 10, 16

Brennan v. County of Wayne, No. 323-1994,

Court of Common Pleas of Wayne County ....... 8

Calcagni v. Board of Assessments Appeals

of Lehigh County, 55 Pa. Commw. Ct. 39,

3 B&F tee = ee 27

(vi)

iforni rethren Church,

457 U.S. 393 (1982) ....--- eee eee renee

hasalow Vv rd of rs. 202 A.D.2d

499. 609 N.Y.S.2d 27 (1994)... 2. ee eee eee

itizen hern Nat’! Bank v.

Bougas, 434 U.S. 35 Se

City of St. Louis v. Praprotnik, 485

U.S. 112 (1988) .. wee eee cece: 18, 19, 22,

Cohen v. California, 403 U.S. 15 en ou~eee «s

Cox Broadcasting Corp. v. Cohn, 420 U.S. 469

(1975)25,

Crane v. Texas, 766 F.2d 193 (Sth Cir. 1985),

cert. denied, 474 U.S. 1020 DS iwwes «a <%

Fair Assessment in Real Estate Assn... Inc.

v. McNary, 454 U.S. 100 . | ee 12-14,

General Motors Corp. v. City of Linden,

279 N.J. Super. 449, 653 A.2d 568 (1995) .......

Gotthilf v. Sills, 375 U.S. 79 (1963).....-----

Great Lakes Dredge & Dock Co. v. Huffman,

319 U.S. 293 (1943) ....-- 22 eee ee eees 12,

(vii)

24

16

13

reenwich y , __ Pa. Commw. Ct.

___, 659 A.2d 1083 (1995) .... 4, 10, 11, 17, 22, 24

v nt School District,

GPs Wie POD CHPED bd ebeeiesnserscts 19, 22

Kerr v. Waddell, __ Ariz. _, 899 P.2d 162 (1994) 9

Mercantile Nat'l Bank v. Langdeau, 371 U.S.

os bs os awe 2a 25, 26, 28

Midlouisiana Rail C + Lesions T

ission, 588 So.2d 1163 (1991) .......... 4

Mitchell v. Forsyth, 472 U.S. 511 (1985) ...... 26

Monell vy. New York City Department of

Social Services, 436 U.S. 658 (1978) ... (i), 4, 6, 17

Monroe v. Pape, 365 U.S. 167 (1961) ........ 13

Murtagh v. County of Berks, et al.,

535 Pa. 50, 634 A.2d 179 (1993),

cert. denied, 114 S. Ct. 1397 (1994) . 3, 5, 7, 9-15, 17,

27, 28

Nashvill ' Vv

Browning, 310 U.S. 362 (1940) ............ 27

(viii)

National Priv ncil

Inc. v. Oklahoma Tax Commission,

Inc., 115 S. Ct. 2351 (1995) .. mm. 4.9.4.5. 34, ts,

14-17, 27, 28

Nordlinger v. Hahn, 505 U.S. 1 (1992) ......-- 9, 27

Parker v. Williams, 862 F.2d 1471 (11th Cir. 1989) 22

Pembaur v. City of Cincinnati, 475 U.S. 469

ee er rar are a ee 17-19, 21, 22

Pockrus v. Bella Vista Village Property

Owners Assoc., 316 Ark. 468, 872 S.W.2d

SE bnost ote e ese enw as aan enes y

Two. of West Milford v. Van Decker, 235

N.J. Super. 1, 561 A.2d 607 (1989) .......---- s)

Westinghouse v. Delaware County Board of

Assessment Appeals, 72 Pa. Commw. Ct. 199,

456 A.2d G94 (1983) 2... ec cece eer er cees 10

Westminster Mgt. Corp. v. Louisiana Tax

Commission, 593 So.2d 923 (La. Sa Y

Williams v. Butler, 863 F.2d 1398 (8th Cir.

1988), cert. denied, 492 U.S. 906 (1989) ....... 22

Wilson v. Schnettler, 365 U.S. 382 (1961) ...... 12

(ix)

Wisconsin v. Board of Review, 191 Wis. 363.

528 N.W.2d 424 (1995) .............22000-% 4

Statutes

ee - a5n) s y se ad: 0 Goa 20

Be Whee EET ass 4S SSS 1, 23, 25, 26, 28

Oe ee PE as 6 oes ko Se ce ne ween 10

Pe ae x kod a es ee ee 20

a eS “6a eo es eke keke ee 19-21

(x)

V. JURISDICTIONAL STATEMENT

The Court has jurisdiction pursuant to 28

U.S.C. §1257(a) over the Pennsylvania Commonwealth

Court’s May 26, 1995 decision dismissing all claims

against the additional defendants and the Pennsylvania

Supreme Court’s November 22, 1995 order denying

Petitioners’ request for discretionary review of the

Commonwealth Court’s decision and for reconsideration

of the Pennsylvania Supreme Court’s decision in this

action in light of this Court’s intervening decision in

National Private Truck Council, Inc. v. Oklahoma Tax

Commission, 115 S. Ct. 2351 (1995).

VI. CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

The following constitutional provisions and

statutes are involved in this petition and are set forth in

the appendix pursuant to Rule 14.1(f): United States

Constitution, Amendment XIV, §1; 42 U.S.C. §1983; 28

U.S.C. §1257(a); 28 U.S.C. §1341; Pennsylvania

Constitution, Article VIII, §1.

Vil. STATEMENT OF THE CASE

This case involves the worst type of

prohibited federal interference with local taxation. Here

a Class of Berks County, Pennsylvania taxpayers seeks to

utilize 42 U.S.C. §1983 in state court in a manner that

runs afoul of this Court’s recent decision in National

Private Truck Council, Inc. v. Oklahoma Tax

Commission, 115 S. Ct. 2351 (1995), and the Court’s

earlier decisions on the long-standing principle of federal

non-interference with local-taxes. Pennsylvania’s

Supreme Court has permitted the taxpayers to proceed

with their improper §1983 claims under its earlier

decision in this case which was subsequently, and

expressly, rejected in National Private Truck Council.

The taxpayers claim that the Berks County

Board of Assessment Appeals ("Board") followed

unconstitutional real estate assessment practices causing

certain taxpayers to pay more than their fair share of

local taxes to their townships, boroughs and school

districts ("Municipal Defendants") and to Berks County

("County"). Plaintiffs filed this case in Pennsylvania

state court as a class action under 42 U.S.C. §1983 to

recover excess taxes they allegedly paid the Municipal

Defendants and the County.

The complaint alleges, under the aegis of

42 U.S.C. §1983, that the Berks County property tax

assessment system violated the Taxpayers’ Equal

Protection rights by assessing properties only when they

were sold. Asa result, so the Taxpayers claim, recent

purchasers of property had higher assessments (and

therefore higher local taxes) than owners of comparable

properties who had held their properties for substantial

periods of time. Relying on Allegheny Pittsburgh Coal

Co. v. County Commission of Webster County,

488 U.S. 336 (1989), the Taxpayers claim they were

denied equal protection because they were required to

pay "excess" taxes. The Taxpayers sued the Board,

County and Municipal Defendants under §1983 for a

"recovery of overpaid taxes" collected by the County and

Municipal Defendants.

The Pennsylvania Supreme Court first

considered the viability of the Taxpayers’ §1983 claims

in 1993. Murtagh v. County of Berks, et al., 535 Pa.

50, 634 A.2d 179 (1993), cert. denied, 114 S. Ct. 1397

(1994) ("Murtagh I") [Appendix, Exhibit B]. After the

trial court denied their preliminary objections and

certified its interlocutory order for appeal, the Municipal

‘Defendants argued on appeal that the Taxpayers could

not challenge local taxes under §1983 because

Pennsylvania’s statutory remedies adequately protected

the Taxpayers’ constitutional rights. The Municipal

Defendants also argued they were not proper defendants

to the Taxpayers’ §1983 claims because they did not

control the Board.

Although the Pennsylvania Commonwealth

Court held the Taxpayers did not have viable §1983

claims, the Pennsylvania Supreme Court, in Murtagh I,

reversed, holding that state courts must entertain §1983

claims challenging the assessment and collection of local

taxes. [Appendix, Exhibit B at 44A]. On remand, the

Commonwealth Court, in a 4 to 3 decision, held that the

Municipal Defendants were not proper defendants and

ordered their dismissal from the case because, according

to the majority, the Board did not have "final

policymaking authority" for the Municipal Defendants as

required for §1983 municipal liability under Monell v.

New_York City Department of Social Services, 436 U.S.

658 (1978), and its progeny. Greenwich Twp. v.

Murtagh, _— Pa. Commw. Ct. ___, 659 A.2d 1083

(1995) ("Murtagh II") [Appendix, Exhibit C].

The dissent in Murtagh II argued that the

majority misapplied this Court’s Gecisions on municipal

liability under §1983. [Appendix, Exhibit C at 83A-

84A]. The dissent concluded that the Municipal

Defendants were proper defendants because

Pennsylvania’s General Assembly had delegated "final

policymaking authority” to the Board to make

assessments on the Municipal Defendants’ behalf.

[Appendix, Exhibit C at 83A-84A].

Less than a month after the

Commonwealth Court’s decision in Murtagh II, this

Court decided National Private Truck Council, Inc. v.

Oklahoma Tax Commission, 115 S. Ct. 2351 (1995).

Citing a long-standing “aversion to federal interference”

with local taxes, 115 S. Ct. at 2354, this Court held that

§1983 creates no claim for equitable or declaratory relief

(in a state or federal court) in cases involving local taxes

where state law provides an adequate remedy for the

deprivation of taxpayers’ constitutional rights. Id. at

2355. Significantly, this Court expressly rejected the

Pennsylvania Supreme Court’s decision and analysis in

Murtagh I. 115 S. Ct. at 2354 n.3.

The Taxpayers and the County’ thereafter

filed separate petitions asking the Pennsylvania Supreme

Court to review both the Commonwealth Court’s

decision and its decision in Murtagh | in light of National

Private Truck Council. The Pennsylvania Supreme

Court refused to hear the appeals, leaving the Taxpayers

and the County to litigate the Taxpayers’ §1983 claims

under Murtagh I, despite this Court’s decision in

National Private Truck Council rejecting the Murtagh I

analysis.

The Pennsylvania Supreme Court’s refusal

to reconsider Murtagh I creates a conflict with National

Private Truck Council in this case and others like it

currently pending in Pennsylvania. See, infra at 10 n. 2.

While Murtagh I holds that Pennsylvania courts must

entertain §1983 claims involving local taxes, National

Private Truck Council holds that state courts “must

For ease of reference, both the County and the

Board are hereafter referred to as the “County,” unless

otherwise noted.

refrain" from providing remedies under §1983 if, as in

Pennsylvania, state law adequately allows taxpayers to

assert constitutional challenges to local taxes.

The County now asks this Court to resolve

the conflict between this Court and the Pennsylvania

Supreme Court over the viability of the Taxpayers’

§1983 claims. Resolution of this issue may result in the

dismissal of this action.

The County also seeks review of the

Commonwealth Court’s decision that the Municipal

Defendants are not proper defendants to the Taxpayers’

§1983 claims. The County asks the Court to resolve a

conflict between the Commonwealth Court’s decision and

decisions of this Court and several federal Courts of

Appeals over the scope of §1983 municipal liability

under Monell v. New York City Department of Social

Services, 436 U.S. 658 (1978), and its progeny.

VIII. REASONS FOR ISSUANCE OF

THE WRIT

This case presents important issues in the

enforcement of taxpayer rights under the Equal

Protection Clause and the relationship between federal

law and local taxation. Pennsylvania’s appellate courts

have created erroneously rules of law in this case that

conflict with decisions of this Court on both the

availability of a cause of action under §1983 to challenge

the constitutionality of local taxes and on the scope of

municipal liability under §1983. The Court should

resolve these conflicts now to avoid future inconsistent

results as taxpayers continue to assert Equal Protection

Clause claims under Webster.

A. The Avalanche of Litigation Following

Webster and Murtagh I and the Erosion

of the Federal Policy of Non-interference

With Local Taxes.

Webster began an avalanche of litigation

claiming unequal and therefore unconstitutional tax

assessments. The improper application of Webster, as

demonstrated in Murtagh I, in turn has caused an erosion

of the long-standing federal policy of non-interference in

local taxation. Thus, one reason to grant the writ is to

stop the erosion of the important federai policies

articulated in National Private Truck Council.

In Webster, this Court declared

unconstitutional a West Virginia county’s practice of

assessing properties for local taxes only upon their sale.

488 U.S. at 344. The Webster court concluded that,

under the facts of that case, the county’s assessment

practices violated the Equal Protection Clause because

recently sold properties received higher assessments than

comparable properties that had not been sold recently.

Id. at 343-45. Significantly, Webster was not a §1983

case. Instead, the plaintiffs in Webster asserted

constitutional claims through the available state law

remedies. Webster does not authorize the use of §1983

to challenge local taxes.

In Webster’s wake, taxpayers in

Pennsylvania began filing class action suits in various

counties to challenge the assessment and collection of

local taxes under the Equal Protection Clause and the

"uniformity" requirements of the Pennsylvania

Constitution, Article VIII, § 1. In addition to the action

in Berks County, similar suits were filed against at least

four other counties in Pennsylvania.” Similar actions

Balazik v. County of Dauphin, 44 F.3d 209 (3d Cir.

1995); Behe v. Chester County Board of Assessment

Appeals, 952 F.2d 66 (3d. Cir. 1991); Alderman v. County

of Cumberland, No. 857-1994, Court of Common Pleas of

Cumberland County; Brennan v. County of Wayne,

No. 323-1994, Court of Common Pleas of Wayne County.

involving local taxes have been filed in other states as

well.”

Unlike Webster, Murtagh I authorizes the

use of a federal remedy (§1983) to challenge local taxes

regardless of the adequacy of state law remedies.

Murtagh I has been construed as making "it easier for

taxpayers to bypass existing statutory procedures and

bring an action directly in state.court" under §1983.

Balazik v. County of Dauphin, 44 F.3d 209, 218 (3d

Cir. 1995). Murtagh | has been cited with approval by

courts in other states as-precedent for allowing taxpayers

to pursue §1983 claims instead of remedies under state

law. General Motors Corp. v. City of Linden, 279 N.J.

Super. 449, 653 A.2d 568 (1995); Kerr v. Waddell,

Ariz. _, 899 P.2d 162 (1994).

’ Similar suits include: Nordlinger v. Hahn,

505 U.S. 1 (1992); Wisconsin v. Board of Review,

191 Wis. 363, 528 N.W.2d 424 (1995); Pockrus v. Bella

Vista Village Property Owners Assoc., 316 Ark. 468,

872 S.W.2d 416 (1994); Chasalow v. Board of Assessors,

202 A.D. 2d 499, 609 N.Y.S. 2d 27 (1994); Westminster

Mot. Corp. v. Louisiana Tax Commission, 593 So.2d 923

(La. 1992); Averback v. Board of Assessors, 176 A.D.2d

1151, 575 N.Y.S.2d 964 (1991); Midlouisiana Rail

Corp. v. Louisiana Tax Commission, 588 So.2d 1163

(1991): Twp. of West Milford v. Van Decker, 235 N.J.

Super. 1, 561 A.2d 607 (1989).

This case involves the worst type of

federal interference with local taxation. Under

Murtagh |, taxpayers may use a federal cause of action

($1983) to avoid Pennsylvania's carefully crafted

Statutory remedies, which include review by the Board

and de novo review by the courts. Although these

Statutory remedies have been consistently found adequate

for protecting taxpayers’ rights to challenge the

constitutionality of local taxes, Behe v. Chester County

Board of Assessment Appeais, 952 F.2d 66, 68-70 (3d

Cir. 1991) (collecting cases at 68-69), under Murtagh I,

taxpayers may bypass these state remedies in favor of a

federal claim in state court under §1983. Thus,

Murtagh I has effectively replaced Pennsylvania’s

Statutory scheme for local tax administration, including

the use of administrative procedures for dispute

resolution, with a federal remedy.

Murtagh Il, in finding that the Municipal

Defendants are not proper defendants, also interferes

with Pennsylvania's statutory scheme for local tax

administration by its erroneous interpretation of §1983.

Pennsylvania law provides a detailed scheme for

administering tax refunds necessitated by improper

assessments. Specifically, under Pennsylvania's General

County Assessment Law ("GCAL"), all taxing authorities

who collected excess taxes as a result of an improper

assessment are required to refund their share of the

excess taxes. 72 P.S. §5020-518.1; Westinghouse v.

Delaware County Board of Assessment Appeals, 72 Pa.

Commw. Ct. 199, 456 A.2d 694 (1983). Thus,

10

Pennsylvania law allows taxpayers to recover from a

municipality the excess taxes paid to that municipality

because of an improper assessment. It does not insulate

townships, boroughs and school districts from liability

for tax refunds simply because the Board is a “county”

board. Nor does it render the County liable to refund

taxes collected by other taxing authorities.

Murtagh II, however, undermines

Pennsylvania's statutory scheme through its erroneous

decision that the Municipal Defendants cannot be liable

for tax refunds under §1983 because the Board lacks

authority to act on their behalf. Under Murtagh Il,

either (a) the Taxpayers cannot recover all of the alleged

excess taxes, or (b) the County, if liable, must refund

taxes collected and spent by other governmental

authorities. Thus, the Murtagh II federal remedy

($1983) radically alters Pennsylvania's statutory scheme

for local tax administration.

In light of Murtagh I and II, there is little

left of Pennsylvania’s statutory scheme for local tax

administration. Instead, state law remedies are replaced

by federal remedies under §1983, and the long-standing

policy of federal non-interference with local taxation

championed in National Private Truck Council is

thoroughly eviscerated. This case therefore presents

significant federal questions requiring review and

resolution by this Court.

B. The Court Should Resolve The Conflict

Over the Viability of §1983 Claims

Challenging Local Taxes.

The Court has, of course, not hesitated to

grant certiorari to resolve conflicts between its decisions

and decisions of other courts. E.g., Wilson v.

Schnettler, 365 U.S. 382 (1961). The conflict between

Murtagh I and National Private Truck Council could not

be more profound. Indeed, in National Private Truck

Council, this Court specifically referred to Murtagh I as

representing the wrong approach to §1983. 115 S. Ct. at

2354 n.3. Most important, this Court rejected the

Murtagh I court’s erroneous conclusion that Fair

Assessment in Real Estate Assn., Inc. v. McNary,

454 U.S. 100 (1981), had no applicability to §1983

claims in state court.

In McNary, the Court examined the

long-standing federal policy of non-interference in local

taxes reflected in the Tax Injunction Act,

28 U.S.C. §1341, which prohibits federal courts from

entering injunctions or declaratory judgments in matters

involving local taxes. E.g., California Grace Brethren

Church, 457 U.S. 393 (1982); Great Lakes Dredge &

Dock Co. v. Huffman, 319 U.S. 293 (1943). The

McNary court expanded the Tax Injunction Act’s

prohibitions on equitable and declaratory relief to §1983

claims for money damages because such claims present

as much opportunity for federal interference with local

taxation as claims for equitable or declaratory relief.

12

Petitioners will not recover damages

under §1983 unless a district court

first determines that respondents’

administration of the County tax

system violated petitioners’

constitutional rights. In effect, the

district court must first enter a

declaratory judgment like that barred

in Great Lakes. We are convinced

that such a determination would be

fully as intrusive as the equitable

actions that are barred by principles

of comity. Moreover, _ the

intrusiveness of such §1983 actions

would be exacerbated by the

nonexhaustion doctrine of Monroe v.

Pape, 365 U.S. 167, 81 S. Ct. 473,

5 L.Ed. 2d 492 (1961). Taxpayers

such as petitioners would be able to

invoke federal judgments without

first permitting the State to rectify

any alleged impropriety.

454 U.S. at 113-14.

The issue in Murtagh I was whether state

courts are required to hear §1983 cases challenging the

constitutionality of local taxes. [Appendix, Exhibit B at

30A]. The Murtagh I court held that McNary and the

Tax Injunction Act were inapplicable to §1983 claims in

state court. [Appendix, Exhibit B at 33A]. Perceiving

13

‘

ae ———E en

no danger of federal interference from a federal claim

proceeding in state court, and claiming a lack of

"direction from the United States Supreme Court,” the

Murtagh I court held that state courts must entertain

§1983 challenges to local taxes. [Appendix, Exhibit B at

33A-34A, 42A, 44A].

In National Private Truck Council, the

Court considered whether taxpayers may use §1983 in

state court proceedings to obtain equitable or declaratory

relief where state law provides adequate remedies. This

Court’s rejection of Murtagh I was thorough and

complete. Indeed, the Court rejected each of the

arguments the Pennsylvania Supreme court used to

support its decision in Murtagh I].

First, in contrast to the Murtagh I court’s

rejection of McNary, this Court held that McNary had

“particular relevance” to the issue because of the

McNary Court’s conclusion that "Congress never

authorized federal courts to entertain damages actions

under §1983 against state taxes" when state law provided

adequate remedies. 115 S. Ct. at 2354-55. Second, the

Court rejected the notion (embraced in Murtagh 1) that

§1983 claims must proceed in state court because the Tax

Injunction Act applies only to federal courts. Id. at 2356

(the Tax Injunction Act is merely "a partial codification

of the federal reluctance to interfere... .").

Third, the Court noted that the federal

policy of noninterference is implicated by §1983 claims

14

5

3

in state courts because the intrusion of federal law into

local taxation exists regardless of whether the federal

remedies are awarded by a federal or state court.

115 S. Ct. at 2356. Thus, this Court rejected the

Murtagh | court’s decision that a §1983 action in state

court presents no danger of federal interference.

National Private Truck Council framed tie

issue in straightforward terms: Does §1983 provide a

claim for equitable or declaratory relief from local taxes

where state law provides adequate remedies? The Court

held that where state law remedies are adequate, there is

no claim (in state or federal court) under §1983 for

equitable or declaratory relief from local taxes.

[T]he background presumption that

federal law generally will not

interfere with administration of state

taxes leads us to conclude that

Congress did not authorize injunctive

or declaratory relief under §1983 in

state tax cases when there is an

adequate remedy at law.

115 S. Ct. at 2355 (emphasis added). While state courts

may enjoin local taxes under state law, they "must

refrain from granting federal relief under §1983" when

there is an adequate remedy under state law. 115 S. <2.

at 2357.

15

McNary and National Private Truck

Council leave no room for the type of claims asserted in

this case. Under McNary, the prohibition against

equitable and declaratory relief applies to §1983 claims

for money damages involving local taxes. Section 1983

claims for money damages run afoul of the principle of

federal non-interference with local taxation because such

Claims are as intrusive as claims for equitable or

declaratory relief. 454 U.S. at 113-14.

National Private Truck Council in turn

Clarified that the principle of federal non-interference

with local taxation applies not only to federal court cases

but also to state court proceedings under §1983. 115

S. Ct. at 2354-55. Accordingly, under McNary and

National Private Truck Council, there is no cause of

action under §1983 -- in state or federal court -- to

challenge local taxes if state law adequately protects

taxpayers’ constitutional rights.

Pennsylvania’s statutory remedies,

including review by the Board and de novo review by the

courts, long have been found adequate for redressing

constitutional violations from local taxes. E.g., Behe v.

Chester County Board of Assessment Appeals, 952 F.2d

66, 68-70 (3d Cir. 1991). Accordingly, because

Pennsylvania law provides adequate remedies, taxpayers

have no cause of action under §1983, but instead must

pursue their constitutional claims through the available

state law remedies.

16

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This case highlights the effects of ignoring

the long-standing policy of federal non-interference in

state and local taxation. As a result of Murtagh | and Ii,

Pennsylvania’s statutory scheme for local tax

administration, together with its adequate protection of

constitutional rights, is replaced largely by federal

remedies under §1983. Moreover, the allocation of

responsibility for tax refunds is altered dramatically. In

short, state law is subverted merely because the

Taxpayers chose to assert federal rather than state

claims.

By refusing to reconsider its position in

light of National Private Truck Council, the Pennsylvania

Supreme Court has left the County (and the other

government defendants in the similar Pennsylvania cases)

to litigate §1983 claims pursued under Murtagh I.

Because such suits conflict with National Private Truck

Council and will lead to improper federal interference in

local taxation, the Court should issue a writ of certiorari

~ to resolve this conflict.

C. The Municipal Defendants May Be

Liable Under $1983 Because Of The

Board’s Final Policymaking Authority.

Because the Municipal Defendants were

dismissed by the Commonwealth Court, a central issue in

this case is whether the Board has "final policymaking

authority” for the Municipal Defendants such that the

Board’s conduct is the Municipal Defendants’ conduct

17

- the purposes of real estate tax assessments. —

v. City of Cincinnati, 475 U.S. 469, 483 (1986); Monell

v. New York City Department of Social Services, 436

U.S. 658, 694 (1978). According to the Commonwealth

Court, municipalities may not be liable if final

policymaking authority, previously held by the

municipalities, is delegated by the state to a “county”

official or board. [Appendix, Exhibit C at 76A-77A].

The Commonwealth Court’s decision

conflicts with this Court’s seminal decisions on municipal

liability and decisions by the federal courts of appeals on

delegation of "final policymaking authority” through

legislative enactment. For this separate reason, the

Court should grant certiorari to establish a uniform

national policy on when states may delegate final

policymaking authority for municipalities for purposes of

§1983 liability.

Municipal liability for the acts of those

who have final policymaking authority is a basic tenet of

§1983, and was developed to prevent municipalities (like

the Municipal Defendants here) from avoiding liability

for constitutional violations by dispersing municipal

responsibilities among numerous officials. City of St.

Louis v. Praprotnik, 485 U.S. 112, 126-27 (1988).

Where an official has "final policymaking authority” for

a municipality, his or her conduct is the municipality’s

conduct for §1983 purposes. Pembaur, 475 U.S. at 483.

18

Under §1983, the Municipal Defendants’

potential liability is not limited to liability for their

"own" actions, but extends to the actions of those who

act with "final policymaking authority" for the Municipal

Defendants. Id. Nor can the Municipal Defendants be

: shielded from liability because the Board, which has final

; policymaking authority for the Municipal Defendants, is

; designated as a "county" board under state law.

Praprotnik, 485 U.S. at 126-27.

Whether a particular official or

: governmental body has final policymaking authority for a

municipality is determined by examining state law. Jett

; v. Dallas Independent School District, 491 U.S. 701, 737

; (1989). In Pembaur, the Court explained that

"{ajuthority to make municipal policy may be granted

directly by legislative enactment or may be delegated by

an official who possesses such authority... ." 475

U.S. at 483. Similarly in Praprotnik, the court explained

that state law may allocate policymaking authority in “a

rich variety of ways" and “will always direct a court to

some official or body that has the responsibility for

making law or setting policy in any given area of a local

government’s business.” 485 U.S. at 126-27.

auth Dae

PRRTORI NE a tors Ree ree

In this case, the Pennsylvania General

Assembly delegated final policymaking authority to the

Board to make assessments on behalf of the Municipal

Defendants. 72 P.S. §5344(a). The Board’s conduct,

for §1983 purposes, therefore, constitutes the conduct of

the Municipal Defendants and makes them liable under

=

s

$

Be

4

3

3

19

§1983 for the Board’s assessment policies. Pembaur,

475 U.S. at 483.

A cursory review of Pennsylvania law on

local real estate taxation shows why the Board has final

policymaking authority to set assessments on behalf of

the Municipal Defendants. The Municipal Defendants

are all taxing authorities who generate the greatest part

of their revenues by collecting real estate taxes. They

tax by applying a millage rate -- which they alone

determine -- to the assessments of real property in their

taxing districts. E.g., 24 P.S. § 6-672. These

assessments and the millage rates are the two factors the

Municipal Defendants use to impose and collect real

estate taxes.

Municipalities performed their own

assessments before the Board was created. The Board

was created to simplify and centralize assessment

procedures by creating one entity to act for all taxing

authorities (including the Municipal Defendants) and by

g:ving taxpayers one uniform assessment for all local

taxes.* 72 P.S. §5344(a).

\ The notes to 72 P.S. §5342 provide that the Act

is intended to have certain effects including,

"[A]bolishing existing boards, identifying the powers and

duties of such board; regulating the assessment of

persons, property and occupations for county, borough,

town, township, school and poor district purposes . . .

20

q

3

q

3

|

;

3

4

4

Thus, the Board has the duty:

[T]o make and have supervision of

the making of annual assessments of

persons, property and occupations

now or hereafter made subject to

assessment for taxation for county,

borough, town, township, school,

poor and institution district

72 P.S. §5344(a) (emphasis added). As the trial court

recognized, the General Assembly took assessment power

from the Municipal Defendants and gave it to the Board -

- a clear delegation of the Municipal Defendants’

authority to the Board.

The Commonwealth Court recognized the

delegation of final policymaking authority when it held

that "the General Assembly, by legislative enactment, has

granted directly to the Board and the County the

authority to make municipal policy with respect to the

supervision and method of real property assessments

levied by” the Municipal Defendants. [Appendix,

Exhibit C at 10]. However, the court failed to recognize

[and] abolishing the office of ward, borough and

township assessors, so far as the making of assessments

and valuations for taxation is concerned... ."

(emphasis added).

21

that this delegation of final policymaking authority

through "legislative enactment” is the basis for the

Municipal Defendants’ liability under §1983 for the

Board’s assessment policies. Pembaur, 475 U.S. at 483.

Under the Commonwealth Court’s

decision, municipal liability under §1983 cannot be

premised on final policymaking authority unless the

authority is delegated by the municipal defendant or its

officials. A delegation by the state, according to the

Commonwealth Court, will not suffice. Murtagh II

therefore conflicts with this Court’s decisions in Jett, 491

U.S. at 737, Praprotnik, 485 U.S. at 126-27 and

Pembaur, 475 U.S. at 483, which recognize that, for

purposes of §1983, state law (from which all municipal

authority flows) may delegate "final policymaking

authority” for municipalities.

Murtagh II conflicts also with decisions by

at least three federal courts of appeals on the ability of

states to delegate final policymaking authority for

municipalities. E.g., Williams v. Butler, 863 F.2d 1398,

1403 (8th Cir. 1988), cert. denied, 492 U.S. 906 (1989)

(a state statute may delegate final policymaking authority

for municipalities to municipal judges); Parker v.

Williams, 862 F.2d 1471, 1479 (11th Cir. 1989) (under

state law, officials may exercise final policymaking

authority for different governmental entities); Crane v.

Texas, 766 F.2d 193 (Sth Cir. 1985), cert. denied, 474

U.S. 1020 (1985) (state law may delegate final

22

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;

4

4

z

a i Sa a lai

COON we a

policymaking authority for county functions to state

officials).

Contrary to the holdings of Jett, Praprotnik

and Pembaur, the Commonwealth Court erroneously

focused on how final policymaking authority was

delegated instead of whether it was delegated.

Praprotnik, 485 U.S. at 126-127. Its decision allows

state law to shield municipalities from liability for

constitutional violations by delegating authority to act on

behalf of one municipality to an official of another

governmental entity. This result defeats the purpose

underlying this Court’s decisions for the law on final

policymaking authority in §1983 cases, which is to

prevent municipalities from avoiding liability for

constitutional violations by dispersing responsibility for

municipal functions among numerous officials.

Praprotnik, 485 U.S. at 124-27. The Commonwealth

Court’s failure to grasp this basic principle of municipal

liability under §1983 -- and the resulting conflict between

it, this Court and the Court of Appeals -- should be

reviewed by this Court.

D. The Court Has Jurisdiction to Hear This

Appeal.

Respondents may claim the Court lacks

jurisdiction to hear this appeal because of the procedural

posture of the case. The County therefore demonstrates

below that jurisdiction under 28 U.S.C. §1257 over both

issues presented is proper.

23

The Commonwealth Court's decision to

dismiss the Municipal Defendants from this case is a

final judgment under §1257. While finality is

determined by federal law, Gotthilf v. Sills, 375 U.S. 79

(1963), the Court has treated interlocutory decisions by

State courts as final decisions where, as in this case, they

have been certified by the state courts for interlocutory

appeal. For example, in Citizens & Southern Nat'l Bank

v. Bougas, 434 U.S. 35 (1977), the Court granted

certiorari to review a judgment by the Georgia Court of

Appeals affirming a trial court’s denial of a motion to

dismiss. Although the trial court’s decision was

interlocutory, the Court of Appeals certified the decision

for interlocutory appeal. Id. at 37. The Court granted

certiorari after Georgia’s Supreme Court denied

discretionary review. 434 U.S. at 37 n. 3.

Like Citizens & Southern Nat’! Bank, the

Court has jurisdiction because the trial court’s order has

been certified for interlocutory appeal. 434 U.S. at 37.

The finality of the Commonwealth Court's decision in

Murtagh II, however, is more apparent than the order in

Citizens & Southern Nat’! Bank. There the Court of

Appeals affirmed the denial of a motion to dismiss. By

contrast, Murtagh II dismisses the Municipal Defendants

from the case by reversing the trial court’s denial of their

preliminary objections. Thus, Murtagh Il, unlike

Citizens & Scuthern Nat'l Bank, is considered final

under state law. E.g., Alexander v. Mastercraft,

455 Pa. 579, 317 A.2d 278 (1974) (dismissal of claims

24

against additional defendants on preliminary objections is

a final order).

Nor is there any lack of finality because

the Pennsylvania Supreme Court did not exercise

discretionary review. Instead, because the Pennsylvania

Supreme Court refused to exercise discretionary review,

the Commonwealth Court’s decision is a judgment

“rendered by the highest court of a State in which a

decision could be had" under §1257. E.g., Cohen v.

California, 403 U.S. 15 (1971) (Court has jurisdiction

over decision by intermediate state appellate court after

state supreme court refuses to exercise discretionary

authority to review).

The Court also has jurisdiction to resolve

the conflict between the Court and the Pennsylvania

Supreme Court over the viability of the Taxpayers’

$1983 claims under the Court’s “pragmatic approach” to

the “final judgment rule.” Cox Broadcasting Corp. v.

Cohn, 420 U.S. 469, 486 (1975). In Cox, the Court

recognized that “at least four categories” of decisions are

considered final under §1257 even though additional

proceedings are required in the state courts. Id. at 477.

One of these categories, applicable here, involves cases

where (a) the federal issue has been decided by the state

courts, (b) the federal issue might evade review because

the petitioner may prevail on nonfederal grounds,

(c) reversal on the <ederal issue would preclude further

litigation, and (d) “a refusal immediately to review the

25

state-court decision might seriously erode federal

policy ...." 420 U.S. at 482-83.

Langdeau, 371 U.S. 555 (1963), the Court considered

whether federal law dictated venue for an action in state

In one example, Mercantile Nat’l Bank v.

court against two national banks. Id. at 556-57. In

holding that a final judgment existed under 28 U.S.C.

§1257 even though the Supreme Court of Texas had

adjudicated only the question of proper venue, this Court

explained:

Langdeau, 371 U.S. at 558. This principal was noted

more recently in Mitchell v. Forsyth, 472 U.S. 511, 525

This is a separate and independent

matter, anterior to the merits and not

enmeshed in the factual and legal

issues comprising the plaintiff's

cause of action. Moreover, we

believe that it serves the policy

underlying the requirement of

finality in 28U.S.C. §1257 to

determine now in which state court

appellants may be tried rather than to

subject them, and appellee, to long

and complex litigation which may be

all for naught if consideration of the

preliminary question of venue is

postponed until the conclusion of the

proceedings.

26

n.8 (1985) ("state-court decisions rejecting a party’s

federal law claim that he is not subject to suit before a

particular tribunal are ’final’ for purposes of our

certiorari jurisdiction under 28 U.S.C. §1257.").

This case satisfies the standards for finality

set forth in Cox. First, the Pennsylvania Supreme Court

has decided incorrectly the federal issue (the viability of

the Taxpayers’ §1983 claims) in Murtagh | and has

refused to reconsider its decision in light of National

Private Truck Council.

Second, the federal issue might evade

review because the County can prevail on nonfederal

grounds. Specifically, the County will prevail if the

Taxpayers are unable to establish a lack of uniformity in

violation of Pennsylvania law. Cf. Nordlinger v. Hahn,

505 U.S. 1, 14-16 (1992) (construing Webster and

concluding that Equal Protection claim turns on whether

state law perinits alleged discrimination in tax

assessments); Nashville C. & St. L.R. Co. v. Browning,

310 U.S. 362, 369 (1940) ("If the state supreme court

had construed the requirement of uniformity in the

Tennessee Constitution so as to permit recognition of

these diversities, no appeal could successfully be made to

the Fourteenth Amendment."). Among other things, the

Taxpayers likely will be unable to satisfy their heavy

burden of proving a lack of uniformity and establishing

damages if a lack of uniformity exists. E.g., Calcagni v.

Board of Assessments Appeals of Lehigh County, 55 Pa.

27

Commw. Ct. 39, 423 A.2d 24 (1980) (examining

standards for establishing a lack of uniformity).

Third, reversal on the federal issue would

preclude further litigation because the Taxpayers have

asserted only federal claims under $1983. Therefore, a

decision by this Court that the Taxpayers have no §1983

Claims terminates the litigation.

Fourth, if the Court refuses to hear this

case, the strong federal policies outlined in National

Private Truck Council will have been nullified. Cox,

420 U.S. at 482-83. This is because taxpayers -- in this

case and others pending in Pennsylvania -- will rely on

Murtagh I to challenge the constitutionality of local taxes

under §1983 even though this Court rejected such a

Claim in National Private Truck Council.

Finally, the issue here is more compelling

than the issue presented in Langdeau. There the federal

issue went solely to venue. By contrast, the issue in this

case is whether the Taxpayers have any valid claim

under §1983. As in Langdeau, this issue is separate and

independent from the merits of the Taxpayers’ claim and

its resolution may avoid long and complex class action

litigation that will be expensive and disruptive for the

County. As in Langdeau, the policies underlying §1257

require prompt consideration of this preliminary federal

issue. Accordingly, jurisdiction is proper.

28

IX. CONCLUSION

For the reasons set forth above, the

County of Berks and the Berks County Board of

Assessment Appeals respectfully submit that the decisions

below by Pennsylvania’s appellate courts are in conflict

with this Court on important federal issues requiring

review by this Court. The County of Berks and the

29

Berks County Board of Assessment Appeals respectfully

request the Court to grant their petition for writ of

certiorari.

STEVENS & LEE

Daniel B. Huyett

E. Thomas Henefer

111 North Sixth Street

P.O. Box 679

Reading, Pennsylvania 19603

(215) 478-2000

Special Counsel to

the County of Berks

CERULLO DATTE &

WALLBILLICH, P.C.

Joseph C. Mossop

Second Street and Laurel

Boulevard

A Pottsville, Pennsylvania 17901

Special Counsel to the Berks

County Board of Assessment

Appeals

EXHIBIT A

IN THE COMMONWEALTH COURT OF

PENNSYLVANIA

GREENWICH TOWNSHIP,

et al.,

Appellants

v. : No. 625 C.D. 1991

MERRY J. MURTAGH, et al.,

Appellees

BOROUGH OF WYOMISSING

HILLS, BOROUGH OF

BIRDSBORO, BOROUGH OF

WEST READING, et al.,

Appellants

v. : No. 771 C.D. 1991

: Argued:

MERRY J. MURTAGH, : September 11, 1991

SPENCER LEE :

CHERASHORE, FREDERICK

MURTAGH, et al.,

Appellees

BEFORE: HONORABLE DAVID W. CRAIG, President

Judge

HONORABLE JOSEPH T. DOYLE, Judge

HONORABLE JAMES GARDNER COLINS,

Judge

HONORABLE MADALINE PALLADINO,

Judge

HONORABLE BERNARD L. McGINLEY,

Judge

HONORABLE DORIS A. SMITH, Judge

HONORABLE DAN PELLEGRIN! Judge

OPINION BY JUDGE PELLEGRINI

Filed January 9, 1992

Greenwich Township, et al. and Borough

of Wyomissing Hills, et al. (Local Governments) appeal

an order of the Court of Common Pleas of Berks

County, finding that the trial court has subject matter

jurisdiction to a class action Section 1983 amended

complaint of Merry J. Murtagh, et al. (Taxpayers),

challenging the constitutionality of the manner in which

property is assessed for real estate tax purposes.

Taxpayers, representing a class of recent

purchasers of real property in Berks County, filed a

complaint against the County of Berks (County) and the

Berks County Board of Assessment Appeals (Board),

alleging that they had adopted a so-called "Welcome

Stranger” policy. Taxpayers alleged that under that

policy, recently purchased properties were re-assessed at

fair market value, resulting in significantly higher tax

assessments than those on other comparable longer-held

neighboring properties which were not re-assessed under

2-A

the practice. Taxpayers alleged that the County and the

Board's practice violated their equal protection rights

under the Fourteenth Amendment,' and, because the re-

assessments were done under color of state law, there

was a violation of 42 U.S.C. §1983.

The County and the Board filed a number

of preliminary objections to Taxpayers’ complaint, only

one of which the trial court sustained finding that

Taxpayers had failed to sue the local governments who

levied taxes which were indispensable parties. As a

result, Taxpayers filed an amended complaint joining all

taxing authorities in the County, nearly 100 cities,

boroughs, townships and schoo! districts. Many of the

newly joined local government defendants again filed

preliminary objections to the amended complaint based

upon lack of subject matter jurisdiction. The trial court:

dismissed both sets of preliminary objections, but

certified the issue for appeal pursuant to Pa. R.A.P.

' Taxpayers rely principally on Allegheny Pittsburgh

| Company v missioner of Webster

County, 488 U.S. 336 (1989), where the Supreme

Court overturned a West Virginia Supreme Court

decision, and held that this type of "Welcome

Stranger" policy violated the Equal Protection

Clause of the Fourteenth Amendment to the United

States Constitution.

3-A

§1311(b).? Subsequently, this court granted separate

petitions for permission to appeal an interlocutory order

filed by Local Governments and consolidated the appeals.

Local Governments contend, as they did

before the trial court, that municipalities and school

districts are not proper parties to the action, because they

do not have the power or authority to set policy

concerning property assessments. Moreover, they now

contend that the trial court does not have subject matter

jurisdiction over a Section 1983 action challenging a

county’s tax assessment procedure because a Section

1983 action challenging a state tax scheme and seeking

monetary damages is not maintainable in a state court

where taxpayers have a plain, adequate and complete

State remedy. Pointing out that an identical Section 1983

action challenging the County’s "Welcome Strangers"

policy was dismissed by a federal district court in

Sunderland Properties, Inc. v. County of Berks, 750 F.

. Under Pa. R.A.P. 1311(b), a party may file a

* petition for permission to appeal! to this Court when

the trial court’s interlocutory order contains the

Statement prescribed in 42 Pa. C.S. §702(b). The

trial court’s Order satisfied this requirement by

Stating that "[t]his Order is deemed to involve a

controlling question of law as to which there is a

substantial ground for difference of opinion. An

immediate appeal from the Order may materially

advance the ultimate determination of this matter."

4-A

Supp. 704 (E.D. Pa. 1990) based upon comity and the

Tax Injunction Act of 1937, 28 U.S.C. §1341,> Local

Governments argue that similarly, a state court should

not entertain a Section 1983 action, enabling Taxpayers

to circumvent the statutory scheme set forth in the

General County Assessment Law (GCAL)* and the

Third Class County Assessment Law (TCCAL).'

Taxpayers do not disagree that federal

courts have routinely refrained from interfering with the

administration of state taxes, including the district court

in Sunderland Properties, under the principles set forth in

’ The Tax Injunction Act of 1937 provides that:

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.

28 U.S.C. §1341. (Emphasis added.)

: Act of May 22, 1933, P.L. 853, as amended, 72

P.S. §§5020-101-5020-602.

: Act of June 26, 1931, P.L. 1379, as amended, 72

P.S. §§5342-5350j.2. This act does not have an

official name but is commonly referred to as the

Third Class County Assessment Law.

5-A

Fair Assessment In Real Estate v. McNardy, 454 U.S.

100 (1981). In Fair Assessment, the Supreme Court

found that while the Tax Injunction Act only bars

injunctive action, the principle of comity* bars actions

: The Supreme Court in Fair Assessment cited their

decision in Younger v. Harris, 401 U.S. 37, 44-45

(1985), where they explained:

[That] the notion of ‘comity,’. . .is,

a proper respect for state functions,

a recognition of the fact that the

entire country is made up of a Union

of separate state governments, and a

continuance of the belief that the

National Government will fare best if

the States and their institutions are

left free to perform their separate

functions in separate ways. . .[T]he

concept [represents] a system in

which there is Sensitivity to the

legitimate interests of both State and

National Governments, and in which

the National Government, anxious

though it mzy be to vindicate and

protect federal rights and federal

interests, always endeavors to do so

in ways that will not unduly interfere

with the legitimate activities of the

States. It should never be forgotten

that this slogan, "Our Federalism.’

6-A

for monetary damages as well. Id. at 180. By enacting

the Tax Injunction Act, the Supreme Court stated that

Congress recognized that the autonomy and fiscal

stability of states survive best when their tax systems are

not subject to scrutiny in federal courts. Id. at 102-103.

The court reasoned that allowing actions for monetary

damages would be just as intrusive and disruptive to the

States’ revenue collection system as the actions for

injunctive relief specifically barred under the Tax

Injunction Act. Id. at 114-115. It then went on to state

that “[s]uch taxpayers must seek protection of their

federal rights by state remedies, provided, of course, that

those remedies are plain mplete

[footnote omitted]’ and may ultimately seek review of

born in the early struggling days of

our Union of States, occupies a

highly important place in our

Nation’s history and its future.

Fair Assessment, 454 U.S. at 112.

The omitted footnote stated that the court discerned

no significant difference between remedies which

are “plain, adequate, and complete,” as the phrase

is used to articulate the doctrine of equitable

constraint under comity, and those that are “plain,

speedy and efficient,” within the meaning of the

Tax Injunction Act. Fair Assessment, 454 U.S. at

116 n.8.

the state decisions in this court." Id. at 116.*

(Emphasis added.)

Taxpayers counter, however, that the

defense of comity and the prohibitions contained in the

Tax Injunction Act are not defenses that are applicable in

State courts. Because comity is a doctrine based upon

“the need for federal court restraint", "the fundamental

principle of comity between federal courts and state

courts” and the “respect that should be accorded state tax

laws", as well as the “question of state law. . . like

other state regulatory issues are heard in state court,” Id.

at 103, 108, 109, none of those concerns expressed in

Fair Assessment and its progeny are applicable when a

cause of action is brought in the state forum. They

contend that state courts present no danger of federal

court interference or misunderstanding, and the

abstention based upon comity simply then is inapplicable.

Moreover, Taxpayers contend inat the Tax Injunction Act

only applies by its very terms to preclude federal courts,

not state courts, from enjoining state tax schemes.

Justice Brennan, speaking for three other concurring

justices, would have found that the taxpayer must

exhaust the available administrative remedies prior

to bringing a Section 1983 suit, Stating that “the

requirement of exhaustion of state administrative

remedies was certainly a mandatory precondition to

suit and, in a sense, a "jurisdictional pre-requisite.’"

Fair Assessment, 454 U.S. at 137.

Since Maine v. Thiboutot, 448 U.S. 1

(1980), it has been settled that state courts have

concurrent jurisdiction with federal courts to hear Section

1983 claims. Uncertainty, however, existed as to

whether state courts were required to hear such claims or

whether they could decline to do so when they perceived

~ that to allow such a suit would be contrary to state law

or interest. Overturning a Florida Court of Appeal’s

decision declining to exercise section 1983 jurisdiction,

the Supreme Court in Howlett v. Rose, 110 S.Ct. 2430

(1990), in holding that there was no discretion by a state

court to entertain such claims, the reverse of comity,

discussed the method and enforcement of federal law in

State courts.

The Court in Howlett explained that the

“federal law is enforceable in state courts.....because the

Constitution and laws passed pursuant to it are as much

laws in the states as laws passed by the state legislature."

Id, at 2438. Expressing that state courts may not, except

in rare circumstances, deny a federal right when the

parties and controversy are properly before the state

court, the Supreme Court found that the overriding

federal interest requires that, "A state may not, by statute

or common law, create a cause of action under Section

1983 . . . ", nor may a state lessen the availability of a

Section 1983 action. Id, at 2439, 2442. The Supreme

Court held that in actions brought in state courts seeking

to enforce federal law, "the rights of, and the defenses

to, a federal cause of action are defined by federal law."

Id. at 2442.

The Supreme Court foreclosed the State

courts from expanding or limiting the availability of a

federal cause of action because Section 1983 advances

federal, and not state rights and interests. By doing so,

the Supreme Court, in effect, enunciated a principle that

while state courts are required to entertain federal causes

of actions, they should be guided by federal law to

determine how federal rights are to be enforced,°

thereby attempting to assure that the outcome of federal

Causes of actions would be the Same, regardless if

decided in a state or federal forum.

Other states have used this principle to

determine whether a Section 1983 challenge to state

administration of taxes can be maintained in state courts.

In Backus v. Chilivis, 236 Ga. 500, 224 S.E.2d 370

(1976), the Georgia Supreme Court held that a Section

1983 claim is not available under the principles set forth

. Quoting from Wilson v. Garcia, 471 U.S. 261, 269

(1985), the Supreme Court in Howlett Stated:

Congress surely did not intend to

assign to state courts and legislatures

a conclusive role in the formative

function of defining and

characterizing the essential elements

of a federal cause of action.

Howlett, 110 S.Ct. at 2444.

under the Tax Injunction Act, stating that "[t]he

overriding interests of the state in an efficient,

expeditious and non-disruptive resolution of ad valorem

[property] tax disputes would be severely impaired, if not

destroyed, by allowance of such suits." Id. at Soe

S.E.2d at 374. Echoing this reasoning, and applying Fair

Assessment, the Supreme Court of Missouri, in

Stufflebaum v. Pantethiere, 691 S.W.2d 271, 272 (Mo.

en banc 1985), stated that "if Section 1983 could be

invoked [in real estate tax cases], ’the obstruction to the

collection of taxes would be so frequent as to be

intolerable.’" (Citation omitted. )

Noting the absence of any language in Fair

Assessment, indicating that state courts are required to

entertain Section 1983 challenges to state taxation, the

Supreme Court of North Dakota in Linderkamp v.

Bismark School District No. 1, 397 N.W.2d 76, 79-80

(N.D. 1986), found that the Tax Injunction Act

recognizes "that state taxation embraces uniquely local

concerns, and that the greatest possible deference

(should) be paid to state remedial schemes." Id. at 79.

It then went on to state that "deference to state remedial

schemes leads to the conclusion that a state court §1983

action . . . is no less of a burden upon the state remedial

scheme than would be a Section 1983 action in federal

court." Id. See also Spencer v. South Carolina Tax

Commission, 281 S.C. 492, 316 S.E.2d 386 (1984),

aff'd mem., 471 U.S. 82 (1985); Johnson v. Gaston

County, 71 N.C. App. 707, 323 S.E.2d 381, appeal

denied, 313 N.C. 508, 329 S.E.2d 392 (1985); Zizka v.

Water Pollution Control Authority, 195 Conn. 682, 490

A.2d 509 (1985); Davis v. City of Eckhorn, 132 Wisc.

2d 394, 393 N.W.2d 95 (1986); Nutbrown v. Munn, 311

Or. 328, 811 P.2d 131 (1990); Hogan v. Musolf, 471

N.W.2d 216 (Wisc. 1991); L.L. Bean, Inc. v, Bracey,

S.W.2d __, 1991 WL 195305 (Tenn. No. 01501-

9010-CH -00087, ‘filed September 9, 1991)."°

10

Only two state courts have decided that a Section

1983 action can be maintained without requiring an

exhaustion of state remedies. The Supreme Court

of Mississippi in Burrell v. Mississippi State Tax

Commission, 536 So.2d 848, 864 (Miss. 1988),

held that their state courts must hear taxpayers’

actions brought pursuant to Section 1983, because

they have concurrent jurisdiction with the federal

courts, and the Supremacy Clause of the United

States Constitution requires that state courts enforce

the valid enactments of Congress, of which Section

1983 is one. Howeyer, the court never considered

the exhaustion of remedies argument advanced by

the concurrence in Fair Assessment, but simply

looked at the principle of comity espoused by the

majority, finding that it did not apply to state

courts. Id.

The Superior Court of New Jersey in Bung’s Bar &

Grille, Inc. v, Florence Township, 206 N.J. Super.

432, , 902 A.2d 1198, 1215-1216 (1985), held

that their courts must entertain these actions, since

New Jersey law demands that all issues of a

12-A

We join the consensus of other state courts

that a Section 1983 challenge to state tax administration

is not maintainable if state remedies afford the taxpayer

an opportunity for full and adequate relief. Both

Congress, by enacting the Anti-Tax Injunction Act, and

the Supreme Court, by its holding in Fair Assessment,

prohibiting or declining to exercise jurisdiction, have

decided that federal interests are not advanced by

allowing federal causes of action to intrude upon a

carefully formulated state system designed to rectify state

tax disputes. Since federal courts decline to exercise

jurisdiction because federal intrusion in state tax schemes

is unwarranted, state courts should also not interfere,

because its enforcement of Section 1983 is no less

intrusive or disruptive than if enforced by a federal

court."

controversy be included at the same time in a

lawsuit and the available administrative remedy did

not allow for civil rights claims. However, this

decision is not at odds with those of the majority of

other states, since the decision actually turned on

the fact that this joinder requirement deprived

plaintiffs of a “plain, speedy and efficient remedy.”

Id. at, 502. A.2d at 1215.

Taxpayers also rely on the recent U.S. Supreme

Court opinion in Dennis v. Higgins, 59 U.S.L.W.

4117 (1991). Dennis held that a taxpayer’s claim

brought in a Nebraska state court that a state tax

discriminates against non-residents in violation of

13-A

Because a Pennsylvania court has not

addressed this issue, we must now determine whether the

established administrative remedy provides Taxpayers

with a "plain, adequate, and complete" remedy. The

existing administrative procedures applicable to a

taxpayer’s appeal of a property assessment in Berks

County can be found in the General County Assessment

Law and the Third Class County Assessment Law.

the Commerce Clause is actionable under Section

1983. Taxpayers point to the language in the

dissenting opinion which states: "[t]oday’s decision

raises far more questions about the proper conduct

of challenges to the validity of state taxation than it

answers.” Id. at 4124. (Kennedy, J. dissenting.)

The dissenting opinion, alluding to the Tax

Injunction Act, and the court’s opinion in Fair

Assessment and the state supreme court cases of

Backus and Spencer, stated that the questions

regarding jurisdiction of the state courts over tax

actions "now become of paramount importance, as

we risk the destruction of state fiscal integrity in a

manner which may _ require congressional

correction.” Id. Because the majority in Dennis

never discusses whether the state court had subject

matter jurisdiction or whether there was a full and

complete remedy at state law, apparently because

those issues were not raised and because of the

unique procedural history of that case, it has no

impact on our decision.

14-A

The Third Class County Assessment Law

creates a three member Board of Assessment Appeals

(Board) in each county which must cause annual

assessment of property within its jurisdiction. Sections 1

and 3 of the TCCAL; 72 P.S. §§5342, 5344. Property

owners subject to these assessments must be duly

notified. Section 8(b) of the TCCAL; 72 P.S. §5349(b).

A property owner who is aggrieved by any assessment,

whether or not the assessment has been changed from the

previous year, has a right to appeal to the Board for

relief. Section 8(c) of the TCCAL; 72 P.S. §5349(c).

When such an appeal has been filed, the Board must

notify each person and each taxing district which has an

interest and has the power to compel the attendance of

witnesses and the furnishing of documents. Section 8(d)

of the TCCAL; 72 P.S. §5349(d).

Section 9 of the Third Class County

Assessment Law further provides that the aggrieved

property owner may appeal the final decision of the

Board to the county court of common pleas. 72 P.S.

§5350. The court of common pleas will proceed de

novo. Appeal of U.S Steel Corporation, 436 Pa. 435,

260 A.2d 779 (1970); Valley Forge Golf Club, Inc. v.

Board of Assessment and Revision of Taxes of

Montgomery County, 3 Pa. Commonwealth Ct. 644, 285

A.2d 213 (1971).

The General County Assessment Law also

applies to Berks County, where it is not inconsistent with

the Third Class County Assessment Act. Art. I, §105 of

15-A

the GCAL; 72 P.S. §5020-105: Truck Terminal Motels

f

Appeals, 127 Pa. Commonwealth Ct. 408, 561 A.2d

1305 (1989) petition allowance of appeal denied, 525 Pa.

625, 581 A.2d 576 (1990). The General County

Assessment Law provides that the Board in each county

shall hear property owners’ appeals of tax assessments.

Art. V, §511 of the GCAL; 72 P.S. §5020-511. The

decision of the Board can then be appealed to a court of

common pleas for a de novo proceeding, with further

appeals to the Superior and Supreme Courts. Art. V,

§§518.1, 518.2, and 519 of the GCAL; 72 P.S. §§5020-

518.1-2, 5020-519.

The federal courts in Pennsylvania have

already addressed the issue ui whether the General and

Third Class County Assessment Laws provide a taxpayer

a plain, adequate, and complete remedy."* In Garrett v.

Bamford, 582 F.2d 810 (3rd Cir. 1978), the United

States Court of Appeals for the Third Circuit held that

the district court properly abstained from entertaining a

Section 1983 class action challenging alleged

The Pennsylvania courts are not bound by the

decisions of the federal courts, except those of the

United States Supreme Court. See Department of

Envir Vv :

133 Pa. Commonwealth Ct. 577, 578 A.2d 563

(1990); Ci iv - Vi , 334 Pa.

Superior Ct. 1, 482 A.2d 1049 (1984).

16-A

discriminatory property tax assessments brought by

property owners in Berks County. The Third Circuit

held that the class action was precluded in federal court

under the Tax Injunction Act, since the Third Class

County Assessment Law, affording administrative appeal

with judicial review to a class, provided them with a

plain, speedy and efficient remedy. Id. at 819.

The Third Circuit in Garrett went on to

state that the property owner’s allegation that the

assessments were not uniform and violated the Equal

Protection Clause of the Fourteenth Amendment to the

United States Constitution could be asserted under

Article VIII, §1 of the Pennsylvania Constitution” and

addressed by the Board and by the court of common

pleas at the de novo proceeding. The court, citing Buhl

Foundation v. Board of Property Assessment, 407 Pa.

567, 570, 180 A.2d 900, 902 (1962), stated that it is the

Board’s and the Court of Common Pleas’ duty to

” This Article of the Pennsylvania Constitution

provides that:

All taxes shall be uniform, upon the

same class of subjects, within the

territorial limits of the authority

levying the tax, and shall be levied

and collected under general laws.

Pa. Const. art. VII, §1.

17-A

determine the value of the property, and between the

standard of actual value and the standard of uniformity,

uniformity must prevail. Garrett, 582 F.2d at 816.

Therefore, the court reasoned, an action pursuant to

Section 1983 would not afford the taxpayer any more

relief than he would receive under Pennsylvania law. Id.

at 817.

Moreover, as previously mentioned in a

recent case involving the exact same allegations

concerning the so-called "Welcome Stranger” policy in

Berks County, the United States District Court for the

Eastern District of Pennsylvania ruled that the principle

of comity relied on by the majority in Fair Assessment

barred the taxpayer’s action in federal court. Sunderland

Properties, Inc. v. County of Berks, 750 F.Supp. 704,

710. The court in Sunderland further stated that the

principle of comity would bar the action only if the

plaintiff was provided a "plain, adequate and complete”

remedy under state law. Id. at 707.

In determining whether the plaintiff’s

remedy was plain, adequate and complete, the

Sunderland court stated that:

A plaintiff's state remedy is plain,

speedy and efficient if it provides the

taxpayer with a full hearing and

Judicial determination at which the

taxpayer may raise federal

nstitutional objections. Rosewell

18-A

ee eg eee

v. LaSalle National Bank, 450 U.S.

503, 514 (1981)... .The state

remedy that will suffice need only be

adequate, and need not be

coextensive with the remedies in

federal court. In other words, the

State remedy that will meet the

requirement of plain, speedy and

efficient need not be the best or most

convenient one.

Id. at 707. (Citations omitted.) (Emphasis added.)

The District Court found the remedy to be

plain, adequate and complete, since the General County

Assessment Law, specifically 42 P.S. §5020-5 18.1, gave

the court of common pleas broad powers to grant

appropriate relief, which would include the consideration

of constitutional issues. Id. at 708-710. The court found

nothing in the procedures provided under the General and

Third Class County Assessment Laws which would

prevent plaintiffs from raising their constitutional issues.

Id. at 708.

The consideration of constitutional issues

by the Board and the Court of Common Pleas in tax

assessment Cases is also well recognized by the

Pennsylvania courts. See Borough of Greentree v. Board

of Property Assessments, 459 Pa. 262, 328 A.2d 819

(1974); McKnight Shopping Center, Inc. v. Board of

Property Assessment, 417 Pa. 234, 209 A.2d 389

19-A

(1965); ion Vv

of Clinton, 80 Pa. Commonwealth Ct. 10, 470 A.2d

1113 (1984); Concerned Taxpayers of Beaver County v.

Vv , 75 Pa.

Commonwealth Ct. 443, 462 A.2d 347 (1983).

Since Taxpayers may raise their

constitutional contentions through an exhaustion of the

existing administrative procedures, we also hold that the

General and Third Class County Assessment Laws

provide Taxpayers with a plain, adequate and complete

remedy. The statutory procedures provide a full hearing

before the Board, followed by a de novo judicial

determination of the Board’s decision by the court of

common pleas. Taxpayers may properly raise their

constitutional issues before the Board and before the trial

court on appeal. Taxpayers present action circumvents

the established administrative procedures for reviewing a

tax assessment and should be dismissed."

Accordingly, we will reverse the order of

the trial court and remand with instructions to dismiss the

entire action for lack of subject matter jurisdiction.

DAN PELLEGRINI, JUDGE

" Due to our resolution of this case on this issue, we

need not address Local Governments’ contentions

contained in their appeal at 625 C.D. 1991.

20-A

IN THE COMMONWEALTH COURT OF

PENNSYLVANIA

GREENWICH TOWNSHIP.

et al.,

Appellants

v. : No. 625 C.D. 1991

MERRY J. MURTAGH, et al.,

Appellees

BOROUGH OF WYOMISSING

HILLS, BOROUGH OF

BIRDSBORO, BOROUGH OF

WEST READING, et al.,

Appellants

Vv. : No. 771 C.D. 199]

MERRY J. MURTAGH,

SPENCER LEE

CHERASHORE, FREDERICK

MURTAGH, et al.,

Appellees

ORDER

AND NOW, this 9th day of January,

1992, the order of the Berks County Court of Common

Pleas dated January 23, 1991, is reversed and remanded

with instructions to dismiss the entire action for lack of

subject matter jurisdiction.

Jurisdiction relinquished.

DAN PELLEGRINI, JUDGE

22-A

- eats

IN THE COMMONWEALTH COURT OF

PENNSYLVANIA

GREENWICH TOWNSHIP,

et al.,

Appellants

v. : No. 625 C.D. 1991

MERRY J. MURTAGH, et al.,

Appellees

BOROUGH OF WYOMISSING

HILLS, BOROUGH OF

BIRDSBORO, BOROUGH OF

WEST READING, et al.,

Appellants

v. : No. 771 C.D. 1991

: Argued:

MERRY J. MURTAGH, : September 11, 1991

SPENCER LEE

CHERASHORE, FREDERICK

MURTAGH, et al.,

Appellees

BEFORE: HONORABLE DAVID W. CRAIG, President

Judge

HONORABLE JOSEPH T. DOYLE, Judge

23-A

HONORABLE JAMES GARDNER COLINS,

Judge 7

HONORABLE MADALINE PALLADINO,

Judge

HONORABLE BERNARD L. McGINLEY,

Judge

HONORABLE DORIS A. SMITH, Judge

HONORABLE DAN PELLEGRINI, Judge

OPINION BY JUDGE PELLEGRINI

Filed January 9, 1992

I disagree that the taxpayers present action

should be dismissed for failure to exhaust administrative

procedures. Since taxpayers claim Section 1983

violations as a result of the County and Board’s practice,

they need not exhaust administrative remedies to pursue

their claims. See Felder v. Casey, 487 U.S. 131 (1988)

(exhaustion of administrative remedy not required where

Section 1983 claim brought in state, as well as federal,

forum). Also, see Patsy vy. Florida Board of Regents,

457 U.S. 496 (1982), and this Court’s holding in City of

Lancaster v. f Lancaster, _ Pa.

Commonwealth Ct. = A.2d_____—s (No. 2171 C.D.

1990, filed November 15, 1991). Thus, the Court of

Common Pleas of Berks County properly determined that

it had subject matter jurisdiction in this case.

DORIS A. SMITH, JUDGE

ee tee ee

ii ai

OR TERME ENTRAR, ANNIE. RE ert

mo

-

=

oo

ma

i

25-A

Se REIN om SINTRA TURES EN PORN

[J-55-93]

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

MERRY J. MURTAGH, : No. 34 M.D. Appeal

SPENCER LEE : Docket 1992

CHERASHORE, ;

FREDERICK : Appeal from the Order of

MURTAGH, et al., : the Commonwealth Court

Appellants : dated January 9, 1992,

: Nos. 625 C.D. 1991 and

v. : 771 C.D. 1991, reversing

: the Amended Order of the

COUNTY OF BERKS, : Court of Common Pleas

et al., : of Berks County dated

Appellees : March 7, 1991, at

: No. 5182-89 AD

: 144 Pa. Cmwith. 624, 601

: A.2d 1352 (1992)

: ARGUED: March 8, 1993

PIN T RT

MR. JUSTICE FLAHERTY

DECIDED: NOVEMBER 10, 1993

Merry J. Murtagh and other taxpayers

appeal an order of Commonwealth Court reversing an

» te

26-A

Pn oS dein eile “tee ea |

order of the Court of Common Pleas of Berks County

and remanding with instructions to dismiss the action for

lack of subject matter jurisdiction. The trial court had

concluded that it had subject matter jurisdiction over a

class action brought by the taxpayers against the County

of Berks and other local government units under 42

U.S.C. § 1983' challenging the constitutionality of the

manner in which property is assessed for real estate tax

purposes.

The taxpayers, representing a class of

recent purchasers of real estate in Berks County, filed an

amended complaint, after exhausting state administrative

; 42 U.S.C. §1983 (1988) creates a remedy for

violations of federal rights committed by persons

acting under color of siate law. Section 1983

provides as follows:

Every person who, under color of

any statute, ordinance, regulation,

custom, or usage, of any State. . .,

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.

27-A

remedies, against the local governments.* They asserted

that the local governments had adopted a discriminatory

“Welcome Stranger” policy. This policy results in the

reassessment of recently purchased realty based on the

purchase price while making no modifications in the

assessment of comparable property not recently sold.’

a

The taxpayers originally sued the County of Berks,

the Berks County Board for the Assessment and

Revision of Taxes and the Berks County Board of

Assessment Appeals. The county and the board

filed a number of preliminary objections to

taxpayers’ complaint. The trial court sustained only

one of the objections finding that taxpayers had

failed to sue the taxing authorities which were

indispensable parties. As a result, taxpayers filed

an amended complaint joining all taxing authorities

in the county, nearly 100 cities, boroughs,

townships, and school districts, herein referred to as

the local governments.

The Constitution and statutes of the Commonwealth

embody a system of taxation that requires property

to be taxed at a uniform rate according to its

estimated actual market value. See Pa. Const. art.

VIII, §1; 72 Pa.C.S. §5020-101 et seg. and §5342

et seq.

The Commonwealth Court recently invalidated a

county tax assessment scheme where it found that

the county violated the uniformity requirement of

28-A

The taxpayers alleged that this practice violated their

equal protection rights under the Fourteenth Amendment

and, because the reassessments were done under color of

state law, constituted a violation of 42 U.S.C. § 1983.‘

the state Constitution and equalization requirement

of the statute governing assessments by third-class

counties. See City of Lancaster v. County of

Lancaster, 143 Pa. Cmwlth. 476, 599 A.2¢ 289

(1991).

The substance of the taxpayers’ complaint is that

the "Welcome Stranger” policy of Berks County

causes de facto discrimination and violates the

Equal Protection Clause of the Fourteenth

: Amendment to the United States Constitution.

Taxpayers cite, as authority for their claim,

Allegheny Pittsburgh Coal Co. v. County

Cominissioner of Webster County, 488 U.S. 336,

109 S.Ct. 633, 102 L.Ed.2d 688 (1989). There,

the Supreme Court held that the de facto

discrimination engendered by a "Welcome Stranger"

policy in a “current value” taxation system violated

said Equal Protection Clause. See also Nordlinger

¥ ee US... 992 S.Ct. 2306, 100

L.Ed.2d 1 (1992).

Given the procedural posture of this case, it is

| inappropriate to comment on the merits of the

7 taxpayers’ case.

29-A

The local government defendants filed

preliminary objections to the amended complaint based

on, among other things, a lack of subiect matter

jurisdiction. The trial court dismissed both sets of

preliminary objections, and certified the issue for appeal

pursuant to Pa. R.A.P. 1311(b). Commonwealth Court

granted separate petitions for permission to appeal the

order, consolidated the appeals, and reversed.

The question presented is whether state

courts must entertain section 1983 class actions

challenging the constitutionality of a county’s tax

assessment procedure where plaintiffs have not exhausted

state administrative and judicial remedies. The local

governments contend that the trial court does not have

subject matter jurisdiction over such a section 1983

action, arguing that state courts should follow the

direction of the federal courts and refrain from

entertaining such suits where there are plain, adequate

and complete state administrative and judicial remedies.°

The local governments further argue that some state

courts have refrained from entertaining such suits.

See, ¢.g., Backus v. Chilivis, 236 Ga. 500, 224

S.E.2d 370 (1976). Since these cases pre-date

important Supreme Court cases discussed infra, we

do not find them probative of the issue presented.

Courts that do require their courts to hear section

1983 actions before exhaustion of state statutory

30-A

Federal courts have routinely refrained

from interfering with the administration of state taxes due

to the Tax Injunction Act, 28 U.S.C. § 1341, and

NN a re

remedies include Mississippi and New Jersey.

Burrell v, Mississippi State Tax Commission, 536

So.2d 848 (Miss. 1988) and Bung’s Bar & Grille.

Inc, v. Florence Township, 206 N.J. Super. 432,

502 A.2d 1198 (1985). In Burrell, the court held

that state courts must hear taxpayers’ actions

brought pursuant to Section 1983, because they

have concurrent jurisdiction with the federal courts,

because the Supremacy Clause of the United States

Constitution requires that state courts enforce the

valid enactments of Congress, of which section

1983 is one, and because the principle of comity did

not apply to state courts. In Bung’s Bar, the

Superior Court held that the state courts must

entertain section 1983 actions, since New Jersey

law demands that all issues of a controversy be

included at the same time in a lawsuit and the

available administrative remedy did not allow for

civil rights claims. Neither court addressed the

exhaustion of remedies argument.

See also Nutbrown v. Munn, 311 Ore. 328, 811

P.2d 131 (1990); Hogan v. Musolf, 471 N.W.2d

216 (Wisc. 1991),1 and L.LO. Bean, Inc. v.

Bracey, 817 S.W.2d 292 (Tenn. 1991). In these

cases, section 1983 actions were entertained by state

courts.

31-A

principles of comity. In Fair Assessment In Real Estate

v. McNary, 454 U.S. 100, 102 S.Ct. 177, 70 L.Ed.2d

271 (1981), the Supreme Court of the United States ruled

that actions for injunctive relief and monetary damages

from a state property assessment procedure are barred in

the federal courts by the principle of comity. That court

said that comity concerns motivated congress to pass the

Tax Injunction Act which prohibits a district court from

enjoining, suspending or restraining 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.° 454 U.S. at 103, 102 S.Ct. at 179, 70

L.Ed.2d at 275. By enacting that statute, congress

recognized that the autonomy and fiscal stability of states

survive best when their tax systems are not subject to

scrutiny in federal courts. 454 U.S. at 102-03, 102 S.Ct.

at 179, 70 L.Ed.2d at 275. The Supreme Court of the

United States also ruled that a similar action for

monetary damages is likewise barred as long as the state

provides for plain, adequate and complete remedies,

° The Tax Injunction Act of 1937, 28 U.S.C. §1341,

provides that:

The district courts shail 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.

32-A

, ¥ \ os welts” g Js a

si ali sR SRR A Ping ec chnlBeSen dN tSNO Lil BANE EEC C PRIS ILS BALIN EIR

Pa aS nell lS shaded ida Paw

eS ast Ren

because such actions are just as intrusive to the states’

revenue collection systems as the actions for injunctive

relief specifically barred under the Tax Injunction Act.

454 U.S. at 114-15, 102 S.Ct. at 185, 70 L.Ed.2d at

282. The court then stated that such taxpayers are to

seek protection of their federal rights by state remedies

provided that those remedies are plain, adequate, and

complete and may ultimately seek review of the state

decisions in the Supreme Court of the United States.

454 U.S. at 116, 102 S.Ct. at 186, 70 L.Ed.2d at 283.’

State courts are not bound by Fair

Assessment and its progeny. The Tax-Injunction Act

applies by its very terms to preclude federal courts, not

State courts, from enjoining state tax schemes.

Therefore, there is no danger of federal court

interference or misunderstanding. Likewise, abstention

based on comity has no application when a section 1983

The Court discerned no significant difference

between remedies which are "plain, adequate, and

complete" as the phrase is used to articulate the

doctrine of equitable constraint under comity, and

those that are "plain, speedy and efficient," within

the meaning of the Tax Injunction Act. Fair

Assessment, 454 U.S. at 116 n.8, 102 S.Ct. at 186

n.8, 70 L.Ed.2d at 283 n.8.

33-A

cause of action is brought in state courts because there is

no risk of federal court interference.*

The local governments nonetheless argue

that the state courts should abstain from hearing section

1983 claims until the taxpayers have exhausted state

administrative and judicial remedies. They appear to

argue that section 1983 plaintiffs in state court should be

no better off than section 1983 plaintiffs in federal court.

Therefore, they should be required to exhaust the

administrative and judicial remedies set forth in the Third

Class County Assessment Law (TCCAL)’ and in the

On the other hand, the federal courts have followed

Fair Assessment in cases similar to the Taxpayers’

case. ¢.g., Sunderland Properties, Inc. v. County

of Berks, 750 F. Supp. 704 (E.D. Pa.

There, a challenge to the county’s "Welcome

Strangers” policy was dismissed by the court based

upon comity and the Tax Injunction Act of 1937, 28

U.S.C. §1341.

Act of June 26, 1931, P.L. 1379, as amended, 72

P.S. §§5342-5350. This act does not have an

official name but is commonly referred to as the

Third Class County Assessment Law.

The Third Class County Assessment Law creates a

three-member board of assessment appeals (board)

in each county. Aggrieved taxpayers appeal to the

board and then to the county common pleas court.

General County Assessment Law (GCAL)."” Under

The board must cause annual assessment of

property within its jurisdiction. Section | and 3 of

the TCCAL; 72 P.S. §§5342, 5344. Property

owners subject to these assessments must be duly

notified. Section 8(b) of the TCCAL:; 72 P.C.

§5349(b). A property owner who is aggrieved by

any assessment, whether or not the assessment has

been changed from the previous year, has a right to

appeal to the board for relief. Section 8(c) of the

TCCAL; 72 P.S. §5349(c). When such an appeal

has been filed, the board must notify each person

and each taxing district which has an interest and

has the power to compel the attendance of witnesses

and the furnishing of documents. Section 8(d) of

the TCCAL; 72 P.S. §5349(d).

Section 9 of the Third Class County Assessment

Law further provides that the aggrieved property

owner may appeal the final decision of the board to

the county court of common pleas. 72 P.S. §5350.

The court of common pleas will proceed de novo.

Appeal of U.S. Steel Corp., 436 Pa. 435, 260 A.2d

779 (1970).

Act of May 22, 1933, P.L. 853 as amended, 72

P.S. §§5020-601, 5020-602.

The General County Assessment Law applies to

Berks County, where it is not inconsistent with the

35-A

both schemes, a property owner who is aggrieved by any

property tax assessment has a right to appeal to a board

of assessment appeals, and then to the court of common

pleas which is to proceed de novo. In light of the

resolution of this case, we need not and do not decide

here whether the state statutory remedies are plain,

adequate and complete in the context of a section 1983

class action."

11

Third Class County Assessment Act. Art. I, §105

of the GCAL; 72 P.S. §5020-105. Truck Terminal

Motels of America, Inc. v. Berks County Board of

Assessment Appeals, 127 Pa. Cmwith. 408, 561

A.2d 1305 (1989), petition for allowance of appeal

denied, 525 Pa. 652, 581 A.2d 576 (1990). It has

a procedural remedy similar to that of the Third

Class County Assessment Act. The General County

Assessment Law provides that the board in each

county shall hear property owners’ appeals of tax

assessments. Art. V, §511 of the GCAL; 72 P.S.

§5020-511. The decision of the board can then be

appealed to a court of common pleas for a de novo

proceeding, with further appeals to the Superior and

Supreme Courts. Art. V, 518.1, 518.2, and 519 of

the GCAL; 72 P.S. §§5020-518.1-2, 5020-519.

Taxpayers contend that the state remedies are not

plain, adequate and complete because they are

precluded from seeking an award of attorneys’ fees

via the fee shifting policy embodied in §§1983 and

1988. We need not address this issue in light of the

36-A

The Supreme Court of the United States

has consistently affirmed the duty of state courts to

entertain section 1983 actions, except where a valid

excuse exists, regardless of whether plaintiffs have

exhausted state administrative and judicial remedies.

Municipalities may be sued under section 1983 when a

he fates hangin’ ve oe Yee aa Bohai Py .

resolution of this case.

id Aen d Hee TONG

It is noted that the federal courts in Pennsylvania

have consistently ruled that both of these laws

provide a taxpayer a plain, adequate, and complete

remedy. See ¢.g., Garrett v. Bamford, 582 F.2d

810 (3d Cir. 1978). The Garrett court held that the

district court properly abstained from entertaining a

section 1983 class action challenging alleged

discriminatory property tax assessments brought by

property owners in Berks County. The court held

that the class action was precluded in federal court

under the Tax Injunction Act, since the Third Class

County Assessment Law, affording administrative

appeal with judicial review to a class, provided

them with a plain, speedy and efficient remedy. Id.

at 819.

Garrett predated significant Supreme Court rulings

in section 1983 litigation and did not address the

attorneys’ fees issue. Therefore, it would have

little probative value to this case were we to address

the issue of whether the state remedies are plain,

adequate and complete.

municipal policy, ordinance, regulation or custom inflicts

constitutional injury. Monell v. New York City

Department of Social Services, 436 U.S. 658, 98 S.Ct.

2018, 56 L.Ed.2d 611 (1978). Since 1980, the Supreme

Court of the United States has made clear that state

courts have concurrent jurisdiction with federal courts to

hear section 1983 claims. Maine v. Thibout, 448 U.S.

1, 100 S.Ct. 2502, 65 L.Ed.2d 555 (1980). When state

courts entertain federal causes of action, the rights of,

and the defenses to, a federal cause of action are defined

by federal law so that the outcome of federal causes of

action would be the same, regardless if decided in a state

or federal forum. Howlett v. Rose, 496 U.S. 356, 375,

110 S.Ct. 2430, 2442, 110 L.Ed.2d 332, 353 (1990)."

Also, in the absence of a valid excuse, state courts have

no discretion to decline to accept jurisdiction when the

parties and controversy are properly before the state

a The Court in Howlett reaffirmed that federal law is

enforceable in state courts because the Constitution

and laws passed pursuant to it are as much laws in

the states as laws passed by the state legislature.

496 U.S. at 367, 110 S.Ct. at 2438, 110 L.Ed.2d

at 347. The Court held that a state-law sovereign

immunity defense is not available to a school board

in a section 1983 action brought in a state court that

otherwise has jurisdiction when such a defense

would not be available if the action were brought in

a federal forum. 496 U.S. at 361-83, 110 S.Ct. at

2434-47, 110 L.Ed.2d at 343-58.

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court. 496 U.S. at 369, 110 S.Ct. at 2439, 110 L.Ed.2d

at 348.

A valid excuse may exist when a state

court refuses jurisdiction because it has no competent

court to hear the case or because of a neutral state rule

of judiciat administration, unless that rule is preempted

by federal law. Felder v. Casey, 487 U.S. 131, 108

S.Ct. 2302, 101 L.Ed.2d 123 (1988). The requirement

that a state court of competent jurisdiction treat federal

law as the law of the land does not necessarily include

within it a requirement that the state create a court

competent to hear the case in which the federal claim is

presented. Howlett, 496 U.S., 372, 110 S.Ct. at 2441,

110 L.Ed.2d at 350-351. Neutral rules of judicial

administration have included those authorizing dismissal

of both federal and state claims where neither the

plaintiff nor the defendant was a resident of the forum

state, Douglas v. New York, N.H. & H.R. Co., 279

U.S. 377, 49 S.Ct. 355, 73 L.Ed.2d 747 (1929), where

the cause of action arose outside of the court’s territorial

jurisdiction, Herb v. Pitcairn, 324 U.S. 117, 65 S.Ct.

459, 89 L.Ed. 789 (1945), or where the doctrine of

forum non conveniens appropriately applied. Missouri

ex rel, Southern R. Co. v. Mayfield, 340 U.S. 1, 71

S.Ct. 1, 95 L.Ed.2d 3 (1950).

Neutral state rules of judicial

administration appear to be preempted in section 1983

cases, however, in situations where the plaintiff and

defendant are residents of the forum state and the cause

39-A

of action arises in the forum state. The Supreme Court

of the United States has ruled that section 1983 plaintiffs

are not required to exhaust state administrative remedies

before instituting section 1983 suits in federal courts or

state courts. See Patsy v. Board of Regents of Florida,

457 U.S. 496, 102 S.Ct. 2557, 73 L.Ed.2d 172 (1982)

and Felder v, Casey, supra, respectively. In Felder,

nine months after being allegedly beaten by Milwaukee

police officers who arrested Felder on a disorderly

conduct charge that was later dropped, Felder filed a

State court action against the city and certain of the

officers under section 1983. He alleged that the beating

and arrest were racially motivated and violated his rights

under the Fourth and Fourteenth Amendments to the

United States Constitution. The officers moved to

dismiss the suit because of Felder’s failure to comply

with Wisconsin’s notice-of-claim statute. The statute

provided, in part, that: before suit may be brought in

state court against a state or local governmental entity or

officer, the plaintiff, within 120 days of the alleged

injury, must notify the defendant of the circumstances

and amount of the claim and the plaintiff's intent to hold

the named defendant liable; the defendant then had 120

days to grant or disallow the requested relief; and the ~

plaintiff must bring suit within six months of receiving

notice of disallowance. 487 U.S. at 134-37, 108 S.Ct. at

2305-06, 101 L.Ed.2d at 135-37.

The Felder Court held that when a section

1983 action is brought in the state court, Wisconsin’s

notice-of-claim statute conflicted in both its purpose and

effect with section 1983’s remedial objectives and was

preempted pursuant to the Supremacy Clause. The court

explained that while states retain the authority to

prescribe the rules and procedures governing suits in

their courts, that authority does not permit states to place

conditions on the vindication of a federal right. Rather,

congress meant to provide individuals immediate access

to the federal courts and did not contemplate that those

who sought to vindicate their federal rights in state courts

could be required to seek redress in the first instance

from the state officials whose hostility to those rights

precipitated their injuries. 487 U.S. at 147-53, 108 S.Ct.

at 2311-14, 101 L.Ed.2d at 143-47.

The Felder court found no merit to the

claim that the exhaustion requirement imposed by the

State statute is essentially de minimis because the

statutory settlement period entailed none of the additional

expense or undue delay typically associated with

administrative remedies, the statutory scheme did not

eliminate a claimant’s right to seek full compensation

through suit or the statutory scheme was designed to sift

Out specious claims. That court emphasized that section

1983 actions “belong in court” and exist independent of

any other legal or administrative relief that may be

available as a matter of federal or state law except where

congress has expressly imposed an exhaustion

41-A

requirement.'? The court said that any scheme designed

ts sift out "specious claims" from the stream of

complaints that can inundate local governments in the

absence of sovereign immunity is "manifestly

inconsistent" with the central objective of the civil rights

statutes. 487 U.S. at 148-50, 108 S.Ct. at 2312-13, 101

L.Ed.2d at 144-45.

We now address the critical question of

whether the common pleas courts of this Commonwealth

must entertain section 1983 cases without requiring the

exhaustion of state administrative and judicial remedies.

We do not have direction from the United States

Supreme Court on this issue; rather, we have competing

lines of cases and are asked to resolve the apparent

conflict.

One may argue that, according to U.S.

Supreme Court precedent, the taxpayers should be no

- Congress did establish an exhaustion requirement

for a specific class of section 1983 actions, those

brought by adult prisoners challenging the

conditions of their confinement, in the Civil Rights

of Institutionalized Persons Act of 1980, 94 Stat.

353, 42 U.S.C. §1997e. In Felder, the Court stated

that congress, in enacting this statute, expressly

recognized that it was working a change in the law.

487 U.S. at 149, 108 S.Ct. at 2312, 101 L.Ed.2d

at 144.

42-A

better off in state court than they are in federal court

with regard to a section 1983 case challenging the

constitutionality of a property tax assessment procedure.

According to Fair Assessment and its progeny, plaintiffs

must exhaust state administrative and judicial remedies in

a property tax assessment case before bringing a section

1983 action in federal court. Therefore, the argument

continues, the taxpayers must also exhaust state

administrative and judicial remedies before bringing a

section 1983 action challenging the constitutionality of a

property tax assessment procedure in state court.

One may also argue that, according to

U.S. Supreme Court precedent, this court cannot require

exhaustion of state statutory remedics. If an exhaustion

requirement were imposed on the taxpayers, then, like

Felder, the state has a procedure that places conditions

on the vindication of a federal right in state court. This

is so even though the state’s statutory scheme does not

eliminate a claimant’s right to seek full compensation

through suit. Further, we are mindful that the taxpayers’

case has another aspect that was not present in Felder,

which is that exhaustion of state administrative and

judicial remedies in the taxpayers’ case may entail the

additional expense and delay typically associated with

State statutory remedies without according the taxpayers

the relief sought. See, Borough of Greentree v. Board of

43-A

Property Assessment, Appeals and Review of Allegheny

County, 459 Pa. 268, 328 A.2d 819 (1974).

Here, the record reflects that the taxpayers

have exhausted state administrative procedures and,

without pursuing their state judicial remedies, seek to

maintain a section 1983 class action. In this case, Felder

and Howlett command the Court of Common Pleas of

Berks County to exercise jurisdiction over a section 1983

action without requiring the complete exhaustion of state

Statutory remedies. While exhaustion of state statutory

remedies is required in federal courts, exhaustion is not

required in the courts of this state insofar as the action is

a Class action challenging the constitutionality of a

system of property tax assessment. This is so because

the principle of comity that causes a federal court to

” In Greentree, this Court ruled that courts of

common pleas have equitable jurisdiction to hear

cases charging that the Assessment Act provision

permitting triennial assessments violated the

uniformity clause of the State Constitution and the

equal protection clause of the Federal Constitution,

where the statutory appeal procedure appearing in

the Assessment act would be of little, if any, utility

in determining constitutionality of the provision and

where any benefit derived from filing individual

appeals with the county board of property

assessment would be far outweighed by the

inconvenience, delay and expense involved.

refrain from exercising jurisdiction over section 1983 tax

assessment cases has no relevence to a class action

challenging, in state court, the constitutionality of a

system of property tax assessment.

This creates the anomalous situation that

plaintiffs have quicker access to state courts with respect

to these types of section 1983 class actions than to the

federal courts. This result does not appear to conflict

with any U.S. Supreme Court decision because the

vindication of a federal right is not shackled by state

rules of judicial administration. This resolution also does

not appear to conflict with precedent of this Court. See

Borough of Greentree, supra. Further, this resolution

will not, as local governments contend, disrupt state and

local tax administration because, as the taxpayers argue,

constitutional challenges such as the taxpayers’ class-

action challenge probably will, in the long run,

significantly reduce the inconvenience, inefficiency,

delay and expense involved in countless individual

lawsuits over the same issue in many different

administrative and judicial forums."

15

The local governments, on page 27 of their brief,

State that because taxpayers do not press the issue

on appeal, it is “undisputed that they can secure

consideration of the constitutional objections before

the board of assessment appeals and through de

novo review in the court of common pleas.” The

local governments, however, argue the point no

\

45-A

On the other hand, if we were to refuse

access to the courts before exhaustion of statutory

remedies with respect to this type of class action, such

refusal would conflict directly with U.S. Supreme Court

directives. Therefore, we hold that where plaintiffs are a

Class of the taxpayers challenging the constitutionality of

the system by which property tax assessments are made,

they can maintain their section 1983 suit in common

pleas court without first exhausting their statutory

remedies.’

The Court of Common Pleas of Berks

County properly determined that it had subject matter

jurisdiction in this case and this matter is remanded to

Commonwealth Court with direction to address the local

governments’ contentions contained in their appeal at 625

C.D. 1991.

further, perhaps in recognition that the likelihood

that the issue would be fully addressed, on the

administrative side, by the very people who depend

on the continued existence of the present scheme of

things is quite small indeed.

2 We wait for another day to address the issue of

whether an individual plaintiff, as opposed to a

class of plaintiffs, can maintain a section 1983

action in common pleas court without exhausting

State statutory remedies where the challenge is to an

individual assessment and not a challenge to the

entire system of property tax assessment.

Order of the Commonwealth Court

reversed, and case remanded.

Mr. Justice Larsen did not participate in

the decision of this case.

Mr. Justice Montemuro files a concurring

opinion.

Mr. Justice Cappy files a dissenting

opinion.

JUDGMENT ENTERED:

CHIEF CLERK

47-A

[J-55-93]

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

MERRY J. MURTAGH, : No. 34 M.D. Appeal

SPENCER LEE : Docket 1992

CHERASHORE,

FREDERICK : Appeal from the Order of

MURTAGH, et al., : the Commonwealth Court

Appellants : dated January 9, 1992,

: Nos. 625 C.D. 1991 and

v. : 771 C.D. 1991, reversing

: the Amended Order of the

COUNTY OF BERKS, : Court of Common Pleas

et al., : of Berks County dated

Appellees : March 7, 1991, at

: No. 5182-89 AD

: 144 Pa. Cmwith. 624, 601

: A.2d 1352 (1992)

- ARGUED: March 8, 1993

CONCURRING OPINION

MR. JUSTICE MONTEMURO

DECIDED: NOVEMBER 10, 1993

By implication, the majority acknowledges

that our courts have an obligation to entertain a 1983

48-A

challenge to a state tax despite the existence of a

statutory remedy. Because I believe that our courts have

always had such an obligation, I join the Opinion of the

Court.

[J-55-93}

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

MERRY J. MURTAGH, : No. 34 M.D. Appeal

SPENCER LEE : Docket 1992

CHERASHORE,

FREDERICK : Appeal from the Order of

MURTAGH, et al., : the Commonwealth Court

Appellants : dated January 9, 1992,

: Nos. 625 C.D. 1991 and

v. : 771 C.D. 1991, reversing

: the Amended Order of the

COUNTY OF BERKS, : Court of Common Pleas

et al., : of Berks County dated

Appellees : March 7, 1991, at

: No. 5182-89 AD

: 144 Pa. Cmwith. 624, 601

: A.2d 1352 (1992)

: ARGUED: March 8, 1993

DI NG OPINION

MR. JUSTICE CAPPY

DECIDED: NOVEMBER 10, 1993

I respectfully dissent from the majority’s

holding that the Appellant class of taxpayers, who seek

50-A

to challenge the constitutionality of the property tax

assessment system, may maintain their action under 42

U.S.C. §1983 in common pleas court without first

exhausting their state statutory remedies. Although I do

not disagree with the majority’s background summary of

the relevant law, I differ with the majority’s resolution of

the “apparent conflict” in the United States Supreme

Court’s "competing lines of cases.” (Majority opinion at

12.)

First, it must be remembered that section

1983 creates a federal cause of action. The Supreme

Court in Fair Assessment In Real Estate Association v.

McNary, 454 U.S. 100, 102 S. Ct. 177, 70 L.Ed. 2d

271 (1981), specifically held that this federal action

requires exhaustion of state administrative and judicial

remedies due to the sensitive nature of state tax issues.

It makes no sense to undercut the Court’s interpretation

of federal law. Further, I believe that interests of

comity’ dictate that state courts defer to the federal

framework carefully established by the United States

Supreme Court, just as the federal court in Fair

It is important to remember that comity works both

ways. Judicial comity is "[tJhe principle in

accordance with which the courts of one state or

jurisdiction will give effect to the laws and judicial

decisions of another, not as a matter of obligation,

but out of deference and respect.” BLACK’S LAW

DICTIONARY 267 (6th ed. 1990).

Assessment deferred to the state courts in fashioning a

rule that would not disrupt a carefully fashioned state tax

scheme. The majority’s approach creates the anomalous

result of encouraging federal claimants to flock to state

courts to pursue section 1983 actions, when the precise

purpose of the federal rule is to ensure that state courts

may deal with the matter under state law first.

Moreover, the majority’s approach

virtually eliminates any opportunity for the state courts to

examine the state tax scheme under the laws or

Constitution of the Commonwealth. The precise concern

for the sensitive nature of state tax schemes, which

motivated the United States Supreme Court in Fair

Assessment, should a fortiori motivate state courts to

examine those schemes under state law first. The

majority’s approach obliterates this opportunity and,

again, produces the incongruous result of creating a

stronger, virtually exclusive federal forum for section

1983 claims in state court rather-than in federal court

where the action should take priority.

The Supreme Court’s decision in Felder

V. Casey, 487 U.S. 131, 108 S. Ct. 2302, 101 L. Ed.

2d 123 (1988), in no way compels the majority’s result.

It must be remembered that for the state courts to require

exhaustion of state remedies as a prerequisite to a section

1983 action would only be to impose upon plaintiffs in

state court the same requirement that would be imposed

upon them in federal court. Felder simply prohibits the

application of a state rule where the rule conflicts with

52-A

the remedial objectives of section 1983 and its

enforcement will "frequently and predictably produce

different outcomes in § 1983 litigation based solely on

whether the claim is asserted in state or federal court."

487 U.S. at 138. Ironically, the majority’s refusal to

impose an exhaustion requirement creates just such a

situation where different outcomes will be reached in

section 1983 litigation "based solely on whether the claim

is asserted in state or federal court."

I believe that, in the circumstances of this

case, the Court should defer to the framework established

by the federal courts. Therefore, I must respectfully

dissent.

53-A

EXHIBIT C

54-A

IN THE COMMONWEALTH COURT OF

PENNSYLVANIA

GREENWICH TOWNSHIP,

MARION TOWNSHIP,

BRECKNOCK TOWNSHIP, and

CENTRE TOWNSHIP, joined by

CAERNARVON TOWNSHIP,

BOROUGH OF KUTZTOWN,

BOROUGH OF ST. LAW-

RENCE, BOROUGH OF HAM-

BURG, BOROUGH OF

LAURELDALE, BOROUGH OF

WEST LAWN, SPRING TOWN-

SHIP, ROBESON TOWNSHIP,

OLEY VALLEY SCHOOL DIS-

TRICT, UPPER BERN TOWN-

SHIP, BOROUGH OF BECH-

TELSVILLE, BOROUGH OF

KENHORST, LEESPORT BOR-

‘ OUGH, COLEBROOKDALE

TOWNSHIP, CUMRU TOWN-

SHIP, MUHLENBERG TOWN-

SHIP, CONRAD WEISER :

SCHOOL DISTRICT, BOROUGH :

OF CENTERPORT, BOYER-

TOWN AREA SCHOOL DIS-__:

TRICT, DANIEL BOONE AREA :

SCHOOL DISTRICT, EXETER

TOWNSHIP SCHOOL DIS-

TRICT, FLEETWOOD AREA

55-A

SCHOOL DISTRICT, GOVER-

NOR MIFFLIN SCHOOL DIS-

TRICT, KUTZTOWN AREA

SCHOOL DISTRICT, MUHLEN- :

BERG SCHOOL DISTRICT,

CITY OF READING SCHOOL

DISTRICT, SCHUYLKILL

VALLEY SCHOOL DISTRICT,

WILSON SCHOOL DISTRICT,

WYOMISSING AREA SCHOOL

DISTRICT, HAMBURG

SCHOOL DISTRICT and TWIN

VALLEY SCHOOL DISTRICT,

Appellants

Vv.

MERRY J. MURTAGH,

SPENCER LEE CHERASHORE,

FREDERICK MURTAGH,

MARY S. MURTAGH and

ANTHONY GIGLIOTTI and

GEORGE CHOVANES,

MARGARET CHOVANES,

MICHAEL CHOVANES and

LRM ZIEGENFUSS, a

Pennsylvania Partnership, and

: No. 625 C.D. 1991

CONCETTA C. GOOD, on behalf :

of themselves and all owners of

real property situated in BERKS

COUNTY who purchased their

56-A

property since January 1, 1980,

and COUNTY OF BERKS,

COMMONWEALTH OF

PENNSYLVANIA, BERKS

COUNTY BOARD OF ASSESS-

MENT APPEALS, BOROUGH _— :

OF TOPTON, LOWER ALSACE :

TOWNSHIP, CITY OF

READING, BOROUGH OF ;

BALLY, BOROUGH OF BOYER- :

TOWN, BOROUGH OF FLEET- :

WOOD, BOROUGH OF LEN-

HARTSVILLE, BOROUGH OF _ :

LYONS, BOROUGH OF MOHD.- :

TON, BOROUGH OF MT.

PENN, BOROUGH OF ROBE-

SONIA, BOROUGH OF SHIL-

LINGTON, BOROUGH OF

SHOEMAKERSVILLE, BOR-

OUGH OF SINKING SPRING, — :

BOROUGH OF STRAUSSTOWN, :

BOROUGH OF TEMPLE, BOR- :

OUGH OF TOPTON, BOROUGH :

OF WERNERSVILLE, BOR-

OUGH OF WOMELSDORF,

BOROUGH OF WYOMISSING, _:

ALBANY TOWNSHIP, ALSACE :

TOWN SHIP, AMITY TOWN- ~ :

SHIP, BERN TOWNSHIP,

BETHEL TOWNSHIP, DIS-

TRICT TOWNSHIP, EARL

57-A

TOWNSHIP, EXETER TOWN-

SHIP, HEREFORD TOWNSHIP,

JEFFERSON TOWNSHIP,

LONGSWAMP TOWNSHIP,

LOWER ALSACE TOWNSHIP,

MAIDENCREEK TOWNSHIP,

MAXATAWNY TOWNSHIP,

NORTH HEIDELBERG TOWN-

SHIP, ONTELAUNEE TOWN-

SHIP, PENN TOWNSHIP,

PERRY TOWNSHIP, PIKE

TOWNSHIP, RICHMOND

TOWNSHIP, ROCKLAND :

TOWNSHIP, RUSCOMBMANOR :

TOWNSHIP, SOUTH HEIDEL-

BERG TOWNSHIP, UNION

TOWNSHIP, UPPER TULPE-

HOCKEN TOWNSHIP, WASH-

INGTON TOWNSHIP, WIND-

SOR TOWNSHIP, ANTIETAM

SCHOOL DISTRICT, BRANDY-

WINE HEIGHTS AREA

SCHOOL DISTRICT, TULPE-

HOCKEN AREA SCHOOL DIS-

TRICT, UPPER PERKIOMEN

VALLEY SCHOOL DISTRICT,

BOROUGH OF WYOMISSING

HILLS, BOROUGH OF BIRDS-

BORO, BOROUGH OF WEST

READING, TOWNSHIP OF

HEIDELBERG, TOWNSHIP OF

58-A

LOWER HEIDELBERG, TOWN.- :

SHIP OF OLEY, TOWNSHIP OF :

TILDEN, TOWNSHIP OF

UPPER TULPEHOCKEN,

TOWNSHIP OF DOUGLASS,

Appellants

Vv.

MERRY J. MURTAGH,

SPENCER LEE CHERASHORE,

FREDERICK MURTAGH,

MARY S. MURTAGH and

ANTHONY GIGLIOTTI and

GEORGE CHOVANES,

MARGARET CHOVANES,

MICHAEL CHOVANES and

LRM ZIEGENFUSS, a

Pennsylvania Partnership, and

CONCETTA C. GOOD, on

behalf of themselves and all

: No. 771 C.D. 1991

owners of real property situated in :

BERKS COUNTY who purchased :

their property since January 1,

1980, and COUNTY OF BERKS,

COMMONWEALTH OF

PENNSYLVANIA, BERKS

COUNTY BOARD OF

APPEALS, GREENWICH

TOWNSHIP, MARION TOWN-

SHIP, BRECKNOCK TOWN-

59-A

SHIP and CENTRE TOWNSHIP,

joined by CAERNARVON

TOWNSHIP, BOROUGH OF

KUTZTOWN, BOROUGH OF

ST. LAWRENCE, BOROUGH

OF HAMBURG, BOROUGH OF

LAURELDALE, BOROUGH OF

WEST LAWN, SPRING TOWN-

SHIP, ROBESON TOWNSHIP,

OLEY VALLEY SCHOOL DIS-

TRICT, UPPER BERN TOWN-

SHIP, BOROUGH OF

BECHTELSVILLE, BOROUGH

OF KENHORST, LEESPORT

BOROUGH,

COLEBROOKDALE TOWN-

SHIP, CUMRU TOWNSHIP,

MUHLENBERG TOWNSHIP,

CONRAD WEISER SCHOOL

DISTRICT, BOROUGH OF

CENTERPORT, BOYERTOWN

AREA SCHOOL DISTRICT,

DANIEL BOONE AREA

SCHOOL DISTRICT, EXETER

TOWNSHIP SCHOOL DIS-

TRICT, FLEETWOOD AREA

SCHOOL DISTRICT,

GOVERNOR MIFFLIN

SCHOOL DISTRICT,

KUTZTOWN AREA SCHOOL

DISTRICT, MUHLENBERG

SCHOOL DISTRICT, CITY OF

READING SCHOOL DISTRICT,

SCHUYLKILL VALLEY

SCHOOL DISTRICT, WILSON

SCHOOL DISTRICT,

WYOMISSING AREA SCHOOL

DISTRICT, HAMBURG

SCHOOL DISTRICT and TWIN

VALLEY SCHOOL DISTRICT,

BOROUGH OF TOPTON,

LOWER ALSACE TOWNSHIP,

CITY OF READING, BOR-

OUGH OF BALLY, BOROUGH

OF BOYERTOWN, BOROUGH

OF FLEETWOOD, BOROUGH

OF LENHARTSVILLE, BOR-

OUGH OF LYONS, BOROUGH

OF MOHNTON, BOROUGH OF

MT. PENN, BOROUGH OF

ROBESONIA, BOROUGH OF

SHILLINGTON, BOROUGH OF

SHOEMAKERSVILLE, BOR-

OUGH OF SINKING SPRING,

BOROUGH OF

STRAUSSTOWN, BOROUGH

OF TEMPLE, BOROUGH OF

TOPTON, BOROUGH OF

WERNERSVILLE, BOROUGH - :

OF WOMELSDORF, BOROUGH :

OF WYOMISSING, ALBANY :

TOWNSHIP, ALSACE TOWN-

SHIP, AMITY TOWNSHIP,

BERN TOWNSHIP, BETHEL

TOWNSHIP, DISTRICT TOWN-

SHIP, EARL TOWNSHIP,

EXETER TOWNSHIP,

HEREFORD TOWNSHIP,

JEFFERSON TOWNSHIP,

LONGSWAMP TOWNSHIP,

LOWER ALSACE TOWNSHIP,

MAIDENCREEK TOWNSHIP,

MAXATAWNY TOWNSHIP,

NORTH HEIDELBERG TOWN-

SHIP, ONTELAUNEE TOWN-

SHIP, PENN TOWNSHIP,

PERRY TOWNSHIP, PIKE

TOWNSHIP, RICHMOND

TOWNSHIP, ROCKLAND

TOWNSHIP,

RUSCOMBMANOR TOWN-

SHIP, SOUTH HEIDELBERG

' TOWNSHIP, UNION TOWN-

SHIP UPPER TULPEHOCKEN

TOWNSHIP, WASHINGTON

TOWNSHIP, WINDSOR TOWN- :

SHIP, ANTIETAM SCHOOL

DISTRICT, BRANDYWINE

HEIGHTS AREA SCHOOL DIS-

TRICT, TULPEHOCKEN AREA

SCHOOL DISTRICT, UPPER

PERKIOMEN VALLEY : ARGUED

SCHOOL DISTRICT : December 7, 1994

BEFORE: HONORABLE JAMES GARDNER COLINS,

President Judge

HONORABLE BERNARD L. McGINLEY,

Judge

HONORABLE DORIS A. SMITH, Judge

HONORABLE DAN PELLEGRINI, Judge

HONORABLE ROCHELLE S. FRIEDMAN,

Judge

HONORABLE JAMES R. KELLEY, Judge

H( NORABLE SANDRA SCHULTZ

NEWMAN, Judge

OPINION BY JUDGE KELLEY FILED: May 26, 1995

Greenwich Township et al. and Borough

of Wyomissing Hills et al. (Local Governments) appeal

an order of the Court of Common Pleas of Berks County

(trial court) finding that Merry J. Murtagh et al.

(Taxpayers) have stated a cause of action against the

Local Governments for their taxing policies which

allegedly violate the Taxpayers’ civil rights under

42 U.S.C. §1983.'

' This appeal is before this court on remand from our

Supreme Court. This court initially entered a

decision in this case on January 9, 1992, wherein

we determined that the trial court lacked subject

matter jurisdiction over Taxpayers’ section 1983

claims because the General and Third Class County

I. FACTUAL AND PROCEDURAL HISTORY

The factual and procedural history as

substantially set forth in our decision in wi is

as follows. Taxpayers, representing a class of recent

purchasers of real property in Berks County, a third

Class County, filed a complaint against the County of

Assessment Laws provided Taxpayers with a plain,

adequate and complete remedy. Accordingly, we

reversed the trial court’s order and remanded with

instructions to dismiss the entire action for lack of

subject matter jurisdiction. See Greenwich

Township v. Murtagh, 144 Pa. Commonwealth Ct.

624, 601 A.2d 1352 (1992) (hereinafter referred to

as Greenwich ]).

Taxpayers appealed our decision to the

Supreme Court which reversed our holding

that Taxpayers could maintain a section

1983 suit without first exhausting statutory

remedies. Accordingly, our Supreme Court

reversed and remanded this matter to this

court with directions to address the Local

Governments’ contentions contained in the

present appeal regarding the issue of

whether the Local Governments are proper

parties to the section 1983 action. See

Murtagh v. County of Berks, 535 Pa. 50,

634 A.2d 179 (1993), cert. denied,

U.S. __, 114. S.Ct. 1397 (1994).

Berks (County) and the Berks County Board of

Assessment Appeals (Board), alleging that they had

adopted a so-called "Welcome Stranger" policy.

Taxpayers alleged that under that policy, recently

purchased properties were re-assessed at fair market

value, resulting in significantly higher tax assessments

than those on other comparable longer-held neighboring

properties which were not re-assessed under the practice.

Taxpayers alleged that the County and the Board’s

practice violated their equal protection rights under the

Fourteenth Amendment’ and, because the re-assessments

were done under color of state law, there was a violation

of 42 U.S.C. § 1983.

The County and the Board filed a number

of preliminary objections to Taxpayers’ complaint, only

one of which the trial court sustained finding that

Taxpayers had failed to sue the local governments who

levied taxes which were indispensable parties. As a

result, Taxpayers filed an amended complaint joining all

taxing authorities in the County, nearly 100 boroughs,

Taxpayers rely principally on Allegheny Pittsbur

Coal_ Co, v. County Commission _of Webster

County, 488 U.S. 336 (1989), where the Supreme

Court overturned a West Virginia supreme court

decision, and held that this type of "Welcome

Stranger” policy violated the Equal Protection

Clause of the Fourteenth Amendment to the United

States Constitution.

65-A

townships and school districts.* Many of the newly

joined local government defendants again filed

preliminary objections to the amended complaint. The

only preliminary objections at issue herein are demurrers

to the amended complaint averring that the amended

complaint failed to state a cause of action against the

Local Governments for their taxing policies which

allegedly violated section 1983.

The trial court dismissed the Local

Governments’ preliminary objections in the nature of a

demurrer and held that the amended complaint stated a

cause of action against the Local Governments under

section 1983. The trial court rejected the Local

Governments’ contention that they are not proper parties

to the section 1983 action because they were not involved

in determining the assessments, which were done solely

by the Board. The trial court determined that Local

Governments should be party defendants because they

were the recipients of the alleged improper taxes, and did

in fact levy the taxes. Thereafter, the trial court certified

. The amended complaint also joined the City of

Reading as a party defendant; however, counsel

stated during oral argument before this court

regarding this appeal that the City of Reading has

been dismissed as a defendant to this action.

the issue for appeal pursuant to Pa.R.A.P. 1311(b).*

Subsequently, this court granted separate petitions for

permission to appeal an interlocutory order filed by the

Local Governments and consolidated the appeals.

Ii. DISCUSSION

Now that our Supreme Court has decided

that Taxpayers may maintain a section 1983 suit without

first exhausting statutory remedies, the issue presented

for review to this court, on remand, is whether the trial

court erred in dismissing the Local Governments’

preliminary objections in the nature of a demurrer where

the Local Governments do not have the power or

authority to set property assessments.*

7 Under Pa.R.A.P. 1311(b), a party may file a

petition for permission to appeal to this Court when

the trial court’s interlocutory order contains the

statement prescribed in 42 Pa. C.S. § 702(b). The

trial court’s order satisfied this requirement by

Stating that "[t]his order is deemed to involve a

controlling question of law as to which there is a

substantial ground for difference of opinion. An

immediate appeal from the order may materially

advance the ultimate determination of this matter."

: We note that when reviewing preliminary objections

in the nature of a demurrer, we accept as true all

well-pleaded material facts in the complaint as well

as all reasonable inferences that may be drawn from

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that:

Section 1983 provides, in pertinent part,

Every person who,

under color of any statute,

ordinance, regulation,

custom, or usage, of any

State or Territory or the

District of Columbia,

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.

those facts. ;

161 Pa. Commonwealth Ct. 69, 636 A.2d 240

(1993). Preliminary objections should be sustained

and a complaint dismissed only in cases that are

clear and free from doubt that the law will not

permit recovery by the plaintiff. Id. The test is

whether, from all the facts pled, the pleader will be

able to prove facts legally sufficient to establish his

or her right to relief. Id.

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42 U.S.C. § 1983.

Under section 1983, local governments are

considered “persons” who may be directly liable when a

policy statement, ordinance, regulation, or decision

officially adopted and promulgated by a local government

or municipality causes an employee, acting under the

color of law, to violate another’s constitutional rights.

Monell v. D F Social Servi F City of New

York, 436 U.S. 658 (1978). A local government may

also be held liable when a “custom” of the governing

body causes a constitutional deprivation even though such

a custom has not received formal approval through the

body’s official decision making channels. Id.

A local government cannot be held liable

under section 1983 on a respondeat superior theory. Id.

Instead, it is when the execution of a local government's

policy, whether made by its lawmakers or by those

whose edicts or acts may fairly be said to represent

’ official policy, inflicts the injury that the local

government as an entity is responsible under section

1983. Id.

Since Monell was decided, the United

States Supreme Court has developed further the contours

of municipal liability under section 1983. In Pembaur v.

City of Cincinnati, 475 U.S. 469, 482 (1986), the

Supreme Court in addressing when a municipality is

responsible for its actions, opined that not every decision

by an officer of a local government automatically

69-A

(iia i

subjects the municipality to section 1983 liability. The

Pembaur court stated that:

Municipal liability attaches

only where the

decision-maker possesses

final authority to establish

municipal policy with respect

to the action ordered. The

fact that a_ particular

official -- even a

policymaking official -- has

discretion in the exercise of

particular functions does not,

without more, give rise to

municipal liability based on

an exercise of that

discretion . . . . The official

must also be responsible for

establishing final government

policy respecting such

activity before the

municipality can be held

liable. Authority to make

municipal policy may be

granted directly by a

legislative enactment or may

be delegated by an official

who possesses such authority,

and of course, whether an

official had _ final

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policymaking authority is a

question of state law.. ..

We hold that municipal

liability under § 1983

attaches where -- and only

where -- a deliberate choice

to follow a course of action is

made from among various

alternatives by the official or

officials responsible for

establishing final policy with

respect to the subject matter

in question.

Id. at 481-83 (citations and footnotes omitted).

The Supreme Court in City of St. Louis v.

Praprotnik, 485 U.S. 112 (1988), reiterated that the

identification of policymaking officials is a question of

state law. The Praprotnik court pointed out that:

The States have extremely

wide latitude in determining

the form that local

government takes, and local

preferences have led to a

profusion of distinct forms.

Among the many kinds of

municipal corporations,

political subdivisions, and

special districts of all sorts,

one may expect to find a rich

variety of ways in which the

power of government is

distributed among a host of

different officials and official

bodies.... [W]e can be

confident that state law

(which may include valid

local ordinances and

regulations) will always

direct a court to some official

or body that has the

responsibility for making law

or setting policy in any given

area of a local government’s

business.

Id. at 124-25 (citations and footnotes omitted).

In the present case, the Local

Governments contend that since they cannot be liable

under a theory of respondeat superior, to maintain their

cause of action, Taxpayers must aver and prove culpable

conduct on the part of the Local Governments.

Specifically, that the Local Governments had some

power and authority over the property tax assessment

process which allegedly injured Taxpayers. Local

Governments argue that they have no power or authority

to adopt, implement or execute ordinances, regulations,

customs or policies pertaining to the assessment of real

property as this power and authority is exclusively

72-A

statutorily vested in the Board. Further, the Local

Governments contend that they could not delegate an

authority which they do not possess.°

In response, the Board and the County

argue that the trial court properly denied the Local

Governments’ demurrers for three reasons. First, if the

Local Governments are dismissed from this case, the

Board and the County might be required to pay money to

Taxpayers representing taxes the Local Governments

collected. According to the Board and the County, this

result would be unfair and contrary to Pennsylvania law,

which requires the Local Governments to refund excess

taxes they collect even if the overpayment was caused

solely by an improper assessment.

Second, the Local Governments are liable

under section 1983 for constitutional violations by

¥ The Pennsylvania School Boards Association,

Pennsylvania State Association of Boroughs, and the

Pennsylvania State Association of Township

Supervisors have filed an amici curiae brief in

support of Local Governments’ position in this

appeal.

The County Commissioners

Association of Pennsylvania has filed a brief

of amicus curiae supporting the position of

the County and the Board.

officials who have final policymaking authority to act on

their behalf. The Board and the County contend that the

General Assembly has the power to delegate authority for

section 1983 purposes, without any action or consent by

the Local Governments. Third, the amended complaint

states a section 1983 claim based on the Local

Government’s own conduct, as well as the Board’s

conduct.

—-Pursuant to the General County

Assessment Law (GCAL)’ and the Third Class County

Assessment Law (TCCAL),® a board of assessment

appeals, appointed by the county commissioners of third

class counties, is vested with the statutory authority to

make and have supervision of the making of annual

assessments of property made subject to assessment for

taxation for county, borough, town, townships, school,

poor and institution district purposes. Section 3 of

TCCAL, 72 P.S. § 5344. In addition, the board of

assessment appeals is vested with the statutory authority

to make and have supervision of the listing and valuation

of property excluded or exempted from taxation. Id.

’ Act of May 22, 1933, P.L. 853, as amended,

72 P.S. §§ 5020-101 - 5020-602.

. Act of June 26, 1931, P.L. 1379, as amended,

72 P.S. §§ 5342-5350j.2. This act does not have

an official name but is commonly referred to as the

Third Class County Assessment Law.

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Under this scheme, the board of assessment appeals

appoints assessors to make the annual valuation of all

property subject to assessment for taxation. See

section 4 through 6 of TCCAL, 72 P.S. §§ 5345-5347.

The assessment of properties by the board

of assessment appeals must be equal and uniform. See

section 7 of TCCAL, 72 P.S. § 5348(d); see City of

Lancaster v. Lancaster County, 143 Pa. Commonwealth

Ct. 476, 599 A.2d 289 (1991), petition for allowance of

appeal denied, 530 Pa. 634, 606 A.2d 903 (1992). The

board of assessment appeals is required to maintain an

assessment roll and must annually notify the property

owners of the value of the assessment pertaining to their

property and any person or taxing district aggrieved by,

any assessment may appeal to the board for relief. See

section 8 of TCCAL, 72 P.S. § 5349.

After any appeals have been completed, a

copy of the final annual assessment roll must be provided

to the chief clerk of the county commissioners and to

each taxing district. Id. If a mathematical or clerical

error is made with regard to an assessment, the board of

assessment appeals must inform the appropriate taxing

district. See section 8.4 of TCCAL, added by Act of

October 9, 1986, P.L. 1418, 72 P.S. § 5349.4.

Thereafter, the taxing district must refund to the taxpayer

any overpayment made as a result of the error. Id.

Reassessment, with or without application by the owner,

as a decision of judgment based on the method of

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assessment by the board of assessment appeals, shall not

constitute an error under section 8.4.°

Recognizing the guiding principles set

forth by the United States Supreme Court and the

statutory scheme adopted by the Pennsylvania General

Assembly, this court believes that the Local Governments

are not proper parties to Taxpayers’ section 1983 action.

It is clear from the statutory scheme that the Board and

the County are the governmental bodies with final

policymaking authority with regard to the supervision

and method of assessments of real property in the

County.

The County and the Board argue that the

Local Governments possess the final policymaking

authority with regard to property assessments based on

the notion that the General Assembly has delegated that

authority to the Board and the County on behalf of the

Local Governments. We disagree. Clearly, the

' provisions of the GCAL and TCCAL reveal that the

General Assembly, by legislative enactment, has granted

directly to the Board and the County the authority to

make municipal policy with respect to the supervision

and method of real property assessments levied by the

Local Governments.

This section applies to all errors on assessments

discovered on or after January 1, 1981. 72 P.S.

§ 5349.4.

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While the Local Governments do have a

choice as to whether to levy their taxes based on county

assessments, they elect to do so without also being the

official governmental body responsible for establishing

the supervision or method of assessment. Under the

TCCAL, each local government entity, as a taxing

district, is provided with the value of the assessments by

the board. Although the value of that assessment may be

challenged and appealed to the board by the Local

Governments as taxing districts, it is the Board and not

the Local Governments, which has the final

determination, subject to further court appeal, as to the

value of any assessment of real property. Therefore,

the trial court’s determination that the Local

Governments can be held liable under section 1983

because they accepted the Board’s actions without

question and made no effort to require the Board to

change its policy is incorrect.

By virtue of the fact that the Board and the

County are responsible for making and setting the policy

as to the manner and method of assessments to be

utilized, only the Board’s and the County’s decisions in

this area of governmental business can provide a basis

for municipal liability. Plainly stated, the decisions of

the Board and the County to act unlawfully are not the

decisions of the Locai Governments when it comes to the

supervision or method of assessing real property in the

County.

Further, we reject the Board’s and the

County’s argument that the trial court’s order should be

affirmed because they may have to pay money to

Taxpayers representing taxes the Local Governments

collected which the Local Governments are obligated to

repay under the TCCAL. The TCCAL provides that a

taxing district must repay taxes incurred as a result of a

mathematical or clerical error with regard to an

assessment. Section 8.4 of TCCAL. Therefore, we do

not read this provision of the TCCAL as requiring that

the Local Governments remain parties to this federal

section 1983 action for this reason.

This provision of the TCCAL aptly

provides an avenue of relief to a taxpayer that has been

overcharged due to a clerical or mathematical error.

This provision does not provide that a taxing authority

must pay damages arising out of litigation based on an

overpayment of taxes resulting from illegal assessments

made by the Board. Moreover, this provision of the

TCCAL provides that reassessment "as a decision of

judgment based on the method of assessment by the

board, shall not constitute an error under this section."

Id. This language indicates to this court that any

grievance a person or taxing district may have with

regard to the assessment of property in the County based

on grounds other than a mathematical or clerical error

must be resolved through other means.

A review of the amended complaint filed

by Taxpayers reveals that the averments are insufficient

78-A

to hold the Local Governments liable in this section 1983

action. Taxpayers allege that the Local Governments are

liable due to the fact that the Local Governments receive

and levy the tax assessments. Since we have determined

that the Local Governments are not the final

policymakers with respect to the supervision, manner or

method of the assessments upon which the Local

Governments levy their taxes, the allegations of

Taxpayers’ amended complaint are insufficient to state a

Cause of action against the Local Governments under

section 1983.

Accordingly, the order of the trial court is

reversed and this matter is remanded to the trial court

with instructions to dismiss, with prejudice, Taxpayers

amended complaint with respect to the Local

Governments.

JAMES R. KELLEY, Judge

Judge Friedman dissents.

79-A

ORDER

NOW, this 26th day of May, 1995, the

order of the Court of Common Pleas of Berks County,

dated January 23, 1991, as amended by order dated

March 6, 1991, is reversed and this matter is remanded

with instructions to dismiss, with prejudice, appellees’

amended complaint with respect to Greenwich Township

et al. and Borough of Wyomissing Hills et al., appeliants

herein.

Jurisdiction relinquished.

80-A

DISSENTING OPINION BY JUDGE NEWMAN

FILED: May 26, 1995

Because I agree with the trial court that

the General Assembly has delegated to the Berks County

Board of Assessment (Board) the final policymaking

authority to make assessments for Greenwich Township

et al. and Borough of Wyomissing Hills et al. (Local

Governments), I respectfully dissent.

In Monell v. Department of Social

Services of City of New York 436 U.S. 658, 694 (1978)

the Supreme Court stated, "[I]t is when execution of a

government’s policy or custom, whether made by its

lawmakers or by those whose edicts or acts may fairly be

said to represent the official policy, inflicts the injury

that the government as an entity is responsible under

§1983."

As the majority correctly notes, the

Supreme Court in Pembaur V. City of Cincinnati,

475 U.S. 469, 481 (1986) refined the definition of

"policy or custom" by holding that "[mJunicipal liability

attaches only where the decisionmaker possesses final

authority with respect to the action ordered." The court

further stated that "[aJuthority to make municipal policy

may be granted directly by legislative enactment or may

be delegated by an official who possesses such authority,

and of course, whether an official had final policymaking

authority is a question of state law." Id. at 483.

81-A

Turning to the statute involved in this

case, Section 5344(a) of the Third Class County

Assessment Law (Law), 72 P.S. §5344(a) states:

It shall be the duty of [the

board of assessment appeals],

in each county to which this

act applies, to make and have

supervision of the making of

annual assessments. of

persons, property § and

occupations now or hereafter

made subject to assessment

for taxation of county,

school, poor and institution

district purposes, and to

make and have supervision of

listing and valuation of

property excluded or

exempted from taxation. The

making of triennial

assessments as provided by

existing law is _ hereby

abolished.

72 P.S. §5344(a) (emphasis added).

The trial court correctly determined that

the legislature, through Section 5344(a) of the Law, has

given the Board final policymaking authority to make

82-A

assessments on behalf of local governments. This is a

logical conclusion, because the statute has the effect of

preventing local governments from performing their own

assessments. If local governments wish to impose a tax,

they must do so based upon the Board’s assessment. As

the Supreme Court noted in Pembaur, final policymaking

authority can be granted to a governmental body through

legislative enactment.

The majority recognizes that in St. Louis

v. Praprotnik, 485 U.S. 112, 124 (1988) the Supreme

Court noted that states have great latitude in determining

the forms that local government take. Consequently,

"one may expect to find a rich variety of ways in which

the power of government is distributed among a host of

different officials and official bodies." Id. at 124 - 125.

In the instant matter, the state, acting through the

legislature, has created a system whereby the authority to

make tax assessments for local governments rests with

the Board. This is consistent with Praprotnik, which

’ stands for the proposition that the states have wide

latitude in delegating policymaking authority for local

governments.

Because final policymaking authority for

making tax assessments on behalf of Local Governments

is vested in the Board by statute, the conduct of the

Board is identical to the conduct of local governments for

purposes of a lawsuit brought under 42 U.S.C. $1983.

Such an interpretation is consistent with Pembaur, where

the Supreme Court held that municipal liability attaches

83-A

where the decisionmaker has final authority to establish

policy. Therefore, the Local Governments are properly

named as defendants in the instant civil rights action.

For these reasons, I respectfully dissent.

SANDRA SCHULTZ NEWMAN,

JUDGE

Judge Smith joins this dissent.

Judge Friedman joins in the conclusion of this dissenting

opinion.

84-A

IN THE COMMONWEALTH COURT OF

PENNSYLVANIA

GREENWICH TOWNSHIP et al., :

Appellants

v. : No. 625 C.D. 1991

MERRY J. MURTAGH et al.

BOROUGH OF WYOMISSING

HILLS et al.

Appellants

v. : No. 771 C.D. 1991

MERRY J. MURTAGH et al.

AMENDED ORDER

NOW, this 27th day of June 1995, upon

consideration of appellees’ application for clarification

and/or correction of the court’s opinion dated May 26,

1995, and responses thereto, it is ORDERED that

footnote 3 on page 3 is deleted.

JAMES R. KELLEY, Judge

EXHIBIT D

86-A

IN THE SUPREME COURT OF PENNSYLVANIA

MIDDLE DISTRICT

MERRY J. MURTAGH, ET AL.

v.

COUNTY OF BERKS, ET AL.

PETITION OF: COUNTY OF

BERKS AND THE BERKS

COUNTY BOARD OF ASSESS-

MENT APPEALS AND MERRY

MURTAGH

ORDER

PER CURIAM:

: No. 319 Middle

: District

: Allocatur Docket

: 1995

: Petition for

: Allowance of

: Appeal from

: Commonwealth

: Court

AND NOW, this 22nd day of November,

1995, the Petition for Allowance of Appeal is hereby

dismissed.

Mr. Justice Montemuro participates by

designation as a senior judge as provided by Rule of

Judicial Administration 701(f).

87-A

EXHIBIT E

88-A

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

Section 1257(a) of Title 28, United States

Code, provides:

Final judgments or decrees rendered

by the highest court of a State in

which a decision could be had, may

be reviewed by the Supreme Court

by writ of certiorari where the

validity of a treaty or statute of the

United States is drawn in question or

where the validity of a statute of any

State is drawn in question on the

ground of its being repugnant to the

Constitution, treaties, or laws of the

United States, or where any title,

right, privilege, or immunity is

specially set up or claimed under the

Constitution or the treaties or statues

of, or any commission held or

authority exercised under, the United

States.

28 U.S.C. §1257(a).

Section 1 of the Fourteenth Amendment to

the United States Constitution provides:

All persons born or naturalized in

the United States, and subject to the

jurisdiction thereof, are citizens of

the United States and of the State

wherein they reside. No State shall

make or enforce any law which shall

abridge the privileges or immunities

of citizens of the United States; nor

shall any State deprive any person of

life, liberty, or property, without due

process of law; nor deny to any

person within its jurisdiction the

equal protection of the laws.

U.S. Const. Amend. XIV, § 1.

Section 1983 of Title 42, United States

Code, provides:

Every person who, under color of

any statute, ordinance, regulation,

custom, or usage, of any State or

Territory or the District of

Columbia, 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

proceedings for redress. For the

purposes of this section, any Act of

Congress applicable exclusively to

the District of Columbia shall be

considered to be a statute of the

District of Columbia.

42 U.S.C. § 1983.

Section 1341 of Title 28, United States

Code (the Tax Injunction Act), 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.

28 U.S.C. § 1341.

Article VII, Section 1 of the Pennsylvania

Constitution provides:

All taxes shall be uniform, upon the

same class of subjects, within the

territorial limits of the authority

levying the tax, and shall be levied

and collected under general laws.

Pennsylvania Cons. Article VIII, § 1.