# Appendix — Hill v. Kemp (No. 07-297)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 2007

## Text

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APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE TENTH CIRCUIT
FILED MARCH 6, 2007

UNITED STATES COURT OF APPEALS
TENTH CIRCUIT

No. 05-5160

HAROLD E. HILL; MARGARET R. MCCRIGHT;
WILLIAM F McCRIGHT; JOHN J. McQUEEN; RITA J.
MOSKOWITZ; BARBARA SANTEE; OKLAHOMA
RELIGIOUS COALITION FOR REPRODUCTIVE
CHOICE EDUCATION FUND, INC.,

Plaintiffs-Appellants,
v.

THOMAS E. KEMP, Chairman, Oklahoma Tax Commission;
JERRY JOHNSON, Vice Chairman, Oklahoma Tax
Commission; CONNIE IRBY, Secretary-Member, Oklahoma
Tax Commission; SCOTT MEACHAM, Treasurer,
Oklahoma State Treasury; HOWARD H. HENDRICK,
Director, Oklahoma Department of Human Services; BRAD
HENRY, Governor of the State of Oklahoma; W.A. DREW
EDMONDSON, Attorney General of the State of Oklahoma,

Defendants-Appellees.

Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 04-CV-28-CVE-PJC)

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Before TYMKOVICH, EBEL, and GORSUCH, Circuit
Judges.

GORSUCH, Circuit Judge.

Certain individuals who license and operate their cars
in the State of Oklahoma (the “Motorists”), together with
the Oklahoma Religious Coalition for Reproductive Choice
Education Fund, Inc. (“ORC”), argue that Oklahoma’s
Statutory scheme for specialty motor vehicle license plates
is unconstitutional under the First and Fourteenth
Amendments. In claims one through four of their amended
complaint, the Motorists contend that Oklahoma’s laws
unlawfully discriminate against their views by permitting
drivers to obtain license plates bearing the messages
“Adoption Creates Families” and “Choose Life” under terms
and conditions more favorable than those available to those
who wish to have license plates bearing messages of support
for abortion rights. In claims five and six, ORC argues that
Oklahoma uses proceeds from its specialty license plate
program to fund groups involved in adoption-related
activities but impermissibly refuses to fund ORC’s own
adoption-related efforts solely because of its separate and
distinct advocacy in favor of abortion rights.

In response to defendants’ Rule 12(b) motion to dismiss,
the district court dismissed this case on jurisdictional grounds
without reaching its merits. Specifically, the district court
held that the Tax Injunction Act (“TIA”), 28 U.S.C. § 1341,
passed by Congress to address federal court interference with
State revenue raising efforts, precluded it from hearing claims
one through four; with respect to claims five and six, the

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court concluded that the Eleventh Amendment’s guarantee
of state immunity from suit in federal court prevented it from
exercising review. While we agree with the district court that
Congress, through the TIA, has deprived the federal courts
of jurisdiction over claims one through four, we hold that
the Eleventh Amendment does not preclude consideration
of claims five and six on their merits. We thus remand this
matter for further proceedings on those counts.

I
A

The Oklahoma Tax Commission (“Tax Commission’’)
is charged with enforcing the State’s Vehicle License and
Registration Act (“the Registration Act”). Consistent with
similar laws across the country, the Registration Act requires
that every motor vehicle owner purchase a license plate and
display it on his or her car. But, as is also increasingly typical
today, the law provides a process by which motorists can
pay an additional amount to the Tax Commission to obtain
specialty license plates conveying messages ranging from
“Veterans of Foreign Wars” to “Round and Square Dancing.”
See 47 Okla. Stat. §§ 1135.2, 1135.3, 1135.5, 1135.6.

Pertinent for our purposes, the Oklahoma Legislature in
2002 and 2004 specifically authorized specialty plates
bearing the phrases “Adoption Creates Families” and
“Choose Life.” 47 Okla. Stat. §§ 1135.5(B)(22) and (23);
2002 Okla. Sess. Laws, ch. 179 § 1 (“Choose Life” plates);
2004 Okla. Sess. Laws, ch. 504 § 14 (“Adoption Creates

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Families” plates).' These two plates were among
approximately 110 specialty plates the Legislature
specifically authorized for immediate issuance, albeit with
the further instruction that, if fewer than 100 of any kind of
plate was issued before a date certain, the Tax Commission
could stop issuing that particular plate. 47 Okla. Stat.
§ 1135.5(A).

The “Adoption Creates Families” and “Choose Life”
plates both cost $35 in addition to normal licensing charges.
47 Okla. Stat. § 1135.5(C). For the “Adoption Creates
Families” plate, $8 of the $35 charge goes to the Tax
Commission Reimbursement Fund for the administration of
the Registration Act, 47 Okla. Stat. §§ 1135.5(C)(2); $25
goes to “a revolving fund established in the State Treasury
for and to be used by the Department of Human Services
[(‘DHS’) } for the implementation of the Investing in Stronger
Oklahoma Families Act specifically for created families,’”

1. Special license plates demonstrating support for adoption
originally issued in 2001 with the phrase “Respect Life-Support
Adoption.” 2001 Okla. Sess. Laws, ch. 434 § 12. In 2004, the
legislature recodified a portion of the special license plate program,
and the adoption-support plates now bear the “Adoption Creates
Families” phrase. 2004 Okla. Sess. Laws, ch. 504 §§ 14(B)(22), 22.

2. The Investing in Stronger Oklahoma Families Act was passed
in order to “provide assistance to guardians of children, adoptive
parents and other ‘created families’, to assist such guardians, adoptive
parents and families to assume permanent custody of children in
need of safe and permanent homes, and to enhance family
preservation and the stability of these homes.” 10 Okla. Stat.
§ 22.2(B). This law authorizes DHS to provide, inter alia, case
management services, child care and after school care, transportation,
and counseling for adoptive families. /d. § 22.2(H).

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Appendix A

id. § 1135.5(B)(22); and the remaining $2 is apportioned
among school districts, municipalities, and various other state
funds, id. § 1135.5(C)(3).’

For the “Choose Life” plate, $8 is directed to the Tax
Commission Reimbursement Fund to cover administrative
costs associated with the Registration Act, 47 Okla. Stat.
§§ 1135.5(C)(2); $20 goes to “a revolving fund [created in
the State Treasury] for the Department of Human Services
to be designated the Choose Life Assistance Program,”
id. § 1104.6(B); and the remaining $7 is apportioned among
school districts, municipalities, and various other state funds,
see id. § 1135.5(C)(3); supra at note 3. Monies in the Choose
Life Assistance Program are disbursed by the State to non-
profit organizations that “counsel[ ] pregnant women who
are committed to placing their children for adoption.”
Id. § 1104.6(C)(3). By statute, however, organizations are
ineligible to receive funds if they are “involved or associated
with any abortion activities, including counseling for or
referrals to abortion clinics, providing medical abortion-
related procedures, or pro-abortion advertising.”
Id. § 1104.6(C)(4); see also id. § 1104.6(D) ( “Funds may
not be distributed to any organization that is involved or

3. The specific apportionment of these monies changes from
year to year, but for illustrative purposes the money is directed
roughly as follows: 36% to school districts according to a funding
formula; 45% to the State’s general revenue fund; 0.3% to the State
Transportation Fund; 11% to the counties according to various
funding formulas; about 3% to cities and towns; 1% to the Oklahoma
Law Enforcement Retirement Fund; and 0.03% to the Wildlife
Conservation Fund. 47 Okla. Stat. § 1104.

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Appendix A

associated with abortion activities, including counseling for
or referral to abortion clinics, providing medical abortion-
related procedures, or pro-abortion advertising.”).

While many license piates cost $35 and direct a portion
of the funds to specific state programs associated with the
message on the specialty plate, others cost less and do not
direct money to specific initiatives. Thus, for example, a
license plate expressing support for the Air Force Academy
costs $15, $8 of which is directed to the Tax Commission to
cover costs and the remainder of which is directed to school
districts, municipalities, and other general state purposes.
See 47 Okla. Stat. §§ 1135.3(B)(34), 1135.3(C); supra at note
3. Certain other license plates issued in recognition of past
military service, current public service, and the like, are
provided at $8 and funds derived from the sale of these plates
are directed exclusively to the Tax Commission to cover
administration costs. /d. §§ 1135.2(B)(1), (8) & 1135.2(C).

After plaintiffs initiated this lawsuit, the Oklahoma
Legislature decided in 2005 to expand the number of specialty
plates beyond the 110 or so it had already enumerated.
Effective January 1, 2006, the legislature authorized the Tax
Commission to design and issue specialty plates
demonstrating support for any organization, group, or cause
so long as the message does not advertise or endorse a
product, brand or service, does not promote prejudice, and
is not contrary to state civil rights laws. See 47 Okla. Stat.
§ 1135.7. It is undisputed by the parties that the Motorists
and ORC can use this new procedure to obtain license plates
displaying their preferred messages, including ones voicing
support for abortion rights. However, specialty plates issued

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Appendix A

under this new law may be issued only after the Tax
Commission has received 500 prepaid applications for the
particular specialty plate at issue. Jd. § 1135.7(B)(4).

As with the plates previously authorized by the
legislature, specialty plates issued under this new regime may
also be designated by their sponsors to provide financial
assistance to a state-sponsored initiative or program. Plates
designed to provide such assistance cost $35, of which $8
goes to the Tax Commission Reimbursement Fund to defray
the cost of the plates, $7 is apportioned among school
districts, municipalities, and various state funds, see id.
§ 1135.7(D)(3); supra at note 3; and $20 is directed to “a
State agency ... responsible for expending the funds
[according to the] specific public purpose” identified with
the specialty plate at issue. /d. § 1135.7(E). Motorists and
ORC do not dispute that they can design plates to provide
funding for initiatives they support, including abortion rights.
As with the preexisting statutory regime, specialty plates
authorized under Oklahoma’s new statute that are not
associated with a particular state fund or initiative cost $15,
of which $8 goes to the Tax Commission Reimbursement
Fund and $7 is.apportioned among school districts,
municipalities, and various state funds. /d. § 1135.7(C).

B

ORC is a non-profit organization that provides free
services tO pregnant women; these services include,
inter alia, counseling about “all reproductive options”
(including adoption and abortion), maintaining a “Roe” fund
to help cover costs of abortion for indigent women, and

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Appendix A

sending its members to “stand as a non-confrontational and
peaceful presence outside health facilities providing abortion
services.” (Am.Compl.7¥ 24, 26.) Motorists are Oklahoma
residents identifying themselves as individuals who support
“a woman’s freedom to choose among all available
reproductive options both before and after conception.”
(Id. J 16.) In claims one through four of the amended
complaint, the Motorist plaintiffs allege that Oklahoma’s
specialty license plates statutory scheme unconstitutionally
discriminates against those who wish to show their support
for “a woman’s freedom to choose among all available
reproductive options both before and after conception.” (/d.)
More specifically, they allege that those seeking a special
license plate expressing support for abortion rights are not
treated equally to those who apply for the “Choose Life” or
“Adoption Creates Families” license plates. In claims five
and six, ORC challenges the funding restrictions associated
with the Choose Life Assistance Program, arguing that the
State’s refusal to provide funds under this particular program
to groups that express support for and engage in advocacy
about abortion amounts to an “unconstitutional condition,”
requiring it to forego its protected First Amendment speech
activities in order to qualify for governmental benefits.

As remedy, the Motorists seek injunctive relief and a
declaratory judgment that Oklahoma’s entire special license
plate regime is unconstitutional,* while ORC seeks

4. Alternatively, Motorists seek relief affecting only the
issuance of “Choose Life” and “Adoption Creates Families” plates.
(Am.Compl.{q 164-65.) They do not challenge the “Physically
Disabled” and “Hearing Impaired” license plates, 47 Okla. Stat.

(Cont'd)

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Appendix A

declaratory and injunctive relief preventing the State from
enforcing provisions that condition a group’s entitlement to
receive funds under the Choose Life Assistance Program on
a determination that the group is not “involved or associated
with any abortion activities, including counseling for or
referrals to abortion clinics, providing medical abortion-
related procedures, or pro-abortion advertising.” 47 Okla.
Stat. § 1104.6(C)(4); see also § 1104.6(D).

Plaintiffs filed their suit on January 14, 2004, against
various State officials-the Governor, State Attorney General,
Treasurer, Director of the Department of Health and Human
Services, and certain members of the Oklahoma Tax
Commission. Without responding to the merits of plaintiffs’
claims, defendants collectively moved to dismiss the case as
a matter of law under Federal Rule of Civil Procedure 12(b).°

(Cont'd) |

§ 1135.1(B)(3) and (5), or plates on which motor vehicle owners are
allowed to pick and choose their own numbers, letters or symbols,
sometimes known as “personalized” or “vanity” plates, id. § 1135.4.

5. Courts in at least two other circuits have reached the merits
of similar claims, though their conclusions differ in significant
respects. Compare ACLU of Tenn. v. Bredesen, 441 F.3d 370 (6th
Cir.2005) (holding that Tennessee’s specialty licensing scheme,
which included a “Choose Life” plate but not a “Pro-Choice” plate,
did not violate plaintiff's First Amendment rights), with Planned
Parenthood of S.C., Inc. v. Rose, 361 F.3d 786 (4th Cir.2004) (holding
that South Carolina specialty licensing scheme authorizing a “Choose
Life” plate without a pro-choice alternative did violate plaintiff's
First Amendment rights). See also Choose Life Ill., Inc. v. White,
No. 04 C 4316, 2007 WL 178455 (N.D.IIl. January 19, 2007)
(following Fourth Circuit precedent and holding unconstitutional
Illinois’s refusal to issue “Choose Life” license plates).

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Appendix A

In its ruling on that motion, the district court dismissed claims
one through four on the ground that, through the TIA,
Congress denied federal courts the power to hear lawsuits
that seek to enjoin the levy or collection of state taxes, and
that the collection of assessments associated with the
specialty license plate program qualify as taxes under state
law. The district court also dismissed claims five and six on
the basis that the Eleventh Amendment immunizes
defendants from suit in federal court. Finally, the district court
held that the Governor and state Treasurer were so
tangentially related to the issues in dispute that, whatever
else the Eleventh Amendment may require, it commands their
individual dismissal under Ex parte Young, 209 U.S. 123,
157, 28 S.Ct. 441, 52 L.Ed. 714 (1908) (requiring a plaintiff
seeking an exception to Eleventh Amendment immunity to
show, inter alia, that the state official defendants have “some
connection with the enforcement of the act” in question).°

I
A

Before assessing Motorists’s appeal with respect to
claims one through four, we must address defendants’
assertion that this portion of the appeal is moot. Seneca-
Cayuga Tribe of Okla. v. Nat'l Indian Gaming Comm'n, 327
F.3d 1019, 1028 (10th Cir.2003) (“[B]Jecause questions of
mootness go to our jurisdiction, we are required to address
this issue at the outset.”). Plaintiffs filed their initial

6. The district court’s dismissal of these individuals is not
challenged in thi: appeal.

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Appendix A

complaint when Oklahoma had a finite list of approximately
110 specialty plates, including the “Choose Life” plate, but
no analog expressing support for abortion rights. Oklahoma’s
2005 law changed all that, of course, permitting virtually
any group to receive specialty plates voicing support for its
cause. Defendants assert (and plaintiffs do not dispute) that
Motorists are now free to apply for and receive a specialty
plate demonstrating their support for abortion rights and even
providing financial support to abortion-related programs.
These changed circumstances, defendants argue, moot
plaintiffs’ complaint with respect to the licensing aspect of
this case.

A legislature is, of course, free to amend its own laws at
any time and thereby moot ongoing litigation. Shawnee Tribe
v. United States, 423 F.3d 1204, 1216-17 (10th Cir.2005).
Indeed, it is undoubtedly a commendable thing when the
people’s representatives are able, through the legislative
process, to defuse potentially needless constitutional
litigation. But, if after passage of the new legislation, a
plaintiff still “retain[s] a legally cognizable interest in the
outcome, the case is not moot,” and we are not free to shirk
the responsibility of deciding the remaining controversy
before us. Seneca-Cayuga Tribe, 327 F.3d at 1028 (internal
quotation marks and citation omitted); see also City of Erie
v. Pap’s A.M., 529 U.S. 277, 287, 120 S.Ct. 1382, 146 L.Ed.2d
265 (2000).

This is just such a situation. While the Oklahoma
Legislature has taken a significant step in allowing groups
of all viewpoints to obtain specialty plates, a non-trivial and
arguably discriminatory burden remains on those associated

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with plaintiffs’ point of view. Under Oklahoma’s regime,
those plates specifically authorized by name by the
legislature-including the Choose Life and Adoption Creates
Families (among a great many others)-were issued
immediately, subject only to the caveat that the Tax
Commission could discontinue any plate if fewer than 100
were issued before a prescribed date. 47 Okla. Stat.
§ 1135.5(A). By contrast, under the 2005 “all comers”
statutory rubric, plates expressing support for other causes-
including abortion rights-can be issued only if and when the
Tax Commission receives 500 prepaid applications within
180 days after the particular plate is authorized. 47 Okla.
Stat. § 1135.7(B)(4). Simply put, there remains a difference
between how Oklahoma treats those who wish to obtain a
Choose Life or Adoption Creates Families plate, on the one
hand, and those who wish to obtain a license plate expressing
support for abortion rights, on the other. The latter group
has to come up with 500 prepaid applications within a
specified time frame, while the former group is presumptively
grandfathered in. The difference may not be insurmountable
or even particularly onerous, but neither does it diminish the
fact that a difference arguably preferring one competing
viewpoint over another remains embedded in Oklahoma law.
Accordingly, we are unabie to say definitively that claims
one through four are moot.

B

This leaves us confronting directly the question whether,
as the district court held and defendants maintain, the TIA
precludes our jurisdiction with respect to these claims. In
the TIA, Congress succinctly and sweepingly directed that

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federal 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. Defendants and
the district court argue that the money paid to Oklahoma
under the specialty licensing regime falls within the ambit
of the statutory phrase “any tax under State law,” while
plaintiffs contended before the trial court and in briefing
before us that the money collected is not a tax but a regulatory
fee incident to the State’s police powers rather than its taxing
authority.

Our starting point is, as it must be, with the plain terms
of the law Congress enacted. At the time the TIA was adopted,
one contemporaneous dictionary defined the term “tax” as
“{ajn enforced, usually proportional, contribution, esp. of
money, levied on persons, income, land, commodities, etc.,
for the support of government and for the public needs;

sometimes, a charge, as for a thing.” 3 The New Century .

Dictionary of the English Language 1949 (1927). Another
dictionary defined “tax” as “[a] charge, esp. a pecuniary
burden imposed by authority; specif., a charge or burden,
usually pecuniary, laid upon persons or property for public
purposes; a forced contribution of wealth to meet the public
needs of a government.” Webster's New International
Dictionary of the English Language 2587 (2d ed.1934).
Under either definition, Oklahoma’s regime involves taxes.
Oklahoma here enforces a contribution of money levied on
the distribution of a commodity that it asserts the exclusive
power, by virtue of its sovereignty, to issue; likewise, it
plainly imposes a charge for a thing. And through its statutory

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regime, the Oklahoma Legislature generates and distributes
funds for a wide variety of public purposes.

Perhaps even more pointedly, Judge Cooley’ long ago
confronted the question how to distinguish between taxes
and fees and even how to categorize assessments that appear
to have characteristics of both. “Suppose a charge is imposed
partly for revenue and partly for regulation,” he asked, “Is it
a tax or an exercise of the police power?” 1 Thomas M.
Cooley, The Law of Taxation 98 (4th ed.1924) (hereinafter
“Cooley”). Cooley answered: “cases of this nature are to be
regarded as cases of taxation. If revenue is the primary
purpose, the imposition is a tax. Only those cases where
regulation is the primary purpose can be specially referred
to the police power.” Jd. at 99 (internal citations omitted);
see also id. at 109-10 (noting that even fees-such as for
recording and filing certificates of incorporation, for
inspections, or for docketing legal filings-can be taxes
“if the object is to provide general revenue rather than to
compensate the officers [who perform the service at issue],
and the amount of the fee has no relation to the value of the
services. ... In other words, a charge fixed by statute for the
service to be performed by an officer, where the charge has
no relation to the value of the services performed and where
the amount collected eventually finds its way into the treasury

7. The Supreme Court has continually cited to Cooley’s taxation
treatise, referring to him as a “text writer{ | of high authority.”
Parsons v. District of Columbia, 170 U.S. 45, 55, 18 S.Ct. $521, 42
L.Ed. 943 (1898); see also, e.g., Rosewell v. LaSalle Nat'l Bank,
450 U.S. 503, 523-24, 101 S.Ct. 1221, 67 L.Ed.2d 464 (1981) (citing
Cooley on Taxation in interpreting TIA’s “plain, speedy and efficient
remedy” exception).

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of the branch of the government whose officer or officers
collect the charge, is not a fee but a tax.”).

We have no qualms finding in this case that the primary
purpose of the special license plate scheme is revenue rather
than regulation and thus that it qualifies as a tax under Judge
Cooley’s formulation. Under Oklahoma’s scheme, only $8
of each plate sold goes to the administration of the
Registration Act; the remaining funds are collected to be
disbursed for a variety of public purposes identified by the
Legislature. To be sure, for $35 plates much of the remaining
money goes to specific state funds and policy objectives
associated with the license plate in question (e.g., $20 in the
case of the Choose Life plates and $25 in the case of the
Adoption Creates Families plates). But the entire community
benefits from this scheme as these funds are variously spread
among a wide array of State initiatives-ranging from adoption
and urban forestry programs to education, grants for
organizations that provide dog or cat spaying and neutering
services, and the Oklahoma National Guard, to name just a
few. And, of course, a portion of the funds for both the $35
and $15 plates (those demonstrating support for or
membership in an organization or cause but not providing
financial support, such as the Benevolent Protective Order
of Elks or the Parrothead Club, 47 Okla. Stat. §§ 1135.3(16)
and (25)) is distributed widely to a variety of municipalities,
school districts, and the like, that have no relationship
whatsoever to the message on the license plate at issue.

Current definitions of “tax” lead us in the same direction.
Black’s Law Dictionary defines “tax” as a “monetary charge
imposed by the government on persons, entities, transactions

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or property to yield public revenue. Most broadly, the term
embraces all governmental impositions on the person,
property, privileges, occupations, and enjoyments of the
people, and includes duties, imposts, and excises.” Black’s
Law Dictionary 1496 (8th ed.2004). Oklahoma’s special
license plate regime surely involves monetary charges
imposed by the government on a transaction to yield public
revenue. The Oxford English Dictionary adds that “ ‘[tjax’
is the most inclusive term for these contributions [to the
support of government].... In the U.S., ‘tax’ is more
generally applied in ordinary language to every federal, state,
or local exaction of this kind.” 17 Oxford English Dictionary
677 (2d ed. 1989).

This plain language understanding of the phrase “any
tax under State law” comports with our precedent. In Marcus
v. Kansas, Department of Revenue, 170 F.3d 1305, 1312 (10th
Cir.1999), we held that “[t]he critical inquiry focuses on the
purpose of the assessment and the ultimate use of funds.”
Id. at 1311. Faced in Marcus (as we are here) with an
argument that the assessment at issue amounted to a
regulatory “fee” incident to the State’s police power rather
than a “tax under State law,” we identified several identifying
characteristics of state taxes:

8. See also Erwin Chemerinsky, Federal Jurisdiction 734 (4th
ed. 2003) (“Courts have broadly interpreted the [TIA] as preventing
federal courts from interfering with virtually all forms of state and
local taxes.”); id. at 735 (“[L]ower courts generally have followed a
commonsense approach, finding, for example, that registration fees
... have the primary purpose of raising revenue and thus should be
classified as taxes.”).

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[T]he classic tax sustains the essential flow of
revenue to the government, while the classic fee
is linked to some regulatory scheme. The classic
tax is imposed by a state or municipal legislature,
while the classic fee is imposed by an agency upon
those it regulates. The classic tax is designed to
provide a benefit for the entire community, while
the classic fee is designed to help defray an
agency’s regulatory expenses.

Marcus, 170 F.3d at 1311 (quoting Home Builders Ass’n of
Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1011
(5th Cir. 1998)). So we might say that a “classic tax” includes
an income tax, imposed by the legislature to defray general
State expenses (even though a portion may go to defray the
administration of the income tax collection system), while a
“classic fee” might be an entry charge imposed by a state
park authority to regulate park usage and support only the
upkeep of the park.

Applying the considerations set forth in Marcus, we
cannot help but conclude that they weigh in favor of holding
the specialty license plate assessments to be taxes. First, there
is no question that the genesis of the special license plate
assessment scheme was the Oklahoma Legislature, not some
regulatory body; indeed, the amount of each assessment is
expressly prescribed by statute. Second, critical under Marcus
(as it was to Judge Cooley), the specialty plate licensing
regime seeks not merely to cover its administrative costs but
to raise revenue for a wide array of public purposes. See supra
at 1244-45. Finally, as the district court pointed out, the funds
collected on top of the $8 reimbursement paid to the Tax

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Appendix A

Commission do not purport to “regulate” anyone by
incentivizing or disincentivizing certain forms of conduct
(like, say, controlling the overuse of state parks).

Plaintiffs respond by asking us to look to the facts of
Marcus rather more than to the rule of law it applied. There,
we held that Kansas assessments imposed on drivers for a
decal entitling them to use parking spaces reserved for the
physically disabled constituted a “fee” rather than a “tax
under State law” for purposes of the TIA. We do not disagree
that parking passes and specialty plates sound alike. But the
statutory regimes before us could not be more different.
Kansas chose to charge very little for handicap parking passes
($5.25) and explicitly mandated that the fees imposed by the
Department of Revenue for the placards “shall not exceed
the actual cost of issuance.” Kan. Stat. § 8-1,125(c) (1999).
Thus, we emphasized in Marcus that the Kansas assessment
“is expressly tied to the administrative costs of a specific
regulatory scheme and, therefore, its essential character is
regulatory.” Marcus, 170 F.3d at 1312. Here, by contrast,
the Oklahoma Legislature has created a statutory scheme
whereby the vast bulk of speciality license plates cost their
purchasers approximately two and four times the amount
necessary to defray the costs of issuing the plates and excess
funds are applied to a variety of public purposes. While
Oklahoma and Kansas faced a similar issue in their vehicle
registration regimes, they chose to address that issue in
radically different ways, ways the plain language of the TIA
and our precedent in Marcus bind us to find dispositive.

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C

Even were we to look beyond the plain language and
our controlling precedent in interpreting “taxes under State
law,” we find other indicia pointing us in the direction of
recognizing the Oklahoma assessments as taxes.

In recognition of the breadth of the plain meaning of the
term Congress employed, the Supreme Court has expressly
instructed that the TIA is to be read as a “ ‘broad jurisdictional
barrier’ ” and is “first and foremost a vehicle ‘to limit
dramatically federal district court jurisdiction.’ ” Arkansas
v. Farm Credit Servs. of Centr. Ark., 520 U.S. 821, 825, 826,
117 S.Ct. 1776, 138 L.Ed.2d 34 (1997) (quoting Moe v.
Confederated Salish and Kootenai of Flathead Reservation,
425 U.S. 463, 470, 96 S.Ct. 1634, 48 L.Ed.2d 96 (1976),
and California v. Grace Brethren Church, 457 U.S. 393, 408-
09, 102 S.Ct. 2498, 73 L.Ed.2d 93 (1982)). Thus, the Supreme
Court has gone so far as to hold that the *1247 TIA deprived
it of jurisdiction even in cases where the defendant State
argued in favor of federal court review. See Grace Brethren
Church, 457 U.S. at 417 n. 38, 102 S.Ct. 2498. Given the
Court’s direction, it would be especially incongruous for us
to defy the plain meaning of the term “tax” and our precedent
in Marcus to assert federal jurisdiction here.

The Supreme Court has also explained that the TIA
serves an important role in the smooth operation of our
federal system. “The federal balance is well served,” the
Court has written, “when the several States define and
elaborate their own laws through their own courts and
administrative processes and without undue interference from

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Appendix A

the Federal Judiciary. The States’ interest in the integrity of
their own processes is of particular moment respecting
questions of state taxation. In our constitutional system, . . .
[t]he power to tax is basic to the power of the State to exist
{and the] .. . [e]nactment of the Tax Injunction Act of 1937
reflects a congressional concern to confine federal court
intervention in state government.” Farm Credit Servs. of
Cent. Ark., 520 U.S. at 826, 117 S.Ct. 1776 (internal citation
and quotation marks omitted). To enjoin Oklahoma’s entire
specialty plate regime (plaintiffs’ preferred remedy) or even
to enjoin a portion of it (plaintiffs’ alternative remedy), would
deny Oklahoma the use of significant funds: the law
generated approximately $605,000 from the purchase of
33,000 special license plates issued between August 1, 2002,
and July 31, 2003, alone. (Am.Compl.{ 126.) Doing so would
further operate to deny these funds to and thus disrupt a
variety of state initiatives, ranging from education to
environmental to adoption programs, which no party disputes
serve legitimate and important state interests. Simply put,
the relief sought here would implicate exactly the sort of
federalism problems the TIA was designed to ameliorate.

The fact that the term “tax” is modified by the phrase
“under State law” also counsels in favor of holding the TIA
applicable. Of course, we have held that how a state labels
an assessment does not resolve the question whether or not
it is a tax (a question Oklahoma has not asked us to revisit).
Marcus, 170 F.3d at 1311. But that does not mean that the
phrase “under State law” is surplusage either; to the contrary,
Congress is presumed to have added these words for some
purpose. TRW Inc. v. Andrews, 534 U.S. 19, 31, 122 S.Ct.
441, 151 L.Ed.2d 339 (2001) (“It is a cardinal principle of

2la

Appendix A

statutory construction that a statute ought, upon the whole,
to be so construed that, if it can be prevented, no clause,
sentence, or word shall be superfluous, void, or
insignificant.” (internal quotation marks omitted)). And, in
fact, it has long been understood that taxes under State law
can include many assessments that may not be taxes for
purposes of federallaw.

Specifically, while the Constitution gave Congress the
“Power to lay and collect Taxes,” U.S. Const. art. I, § 8, this
power is limited in several ways. It has been debated, for
example, whether the power to tax afforded by Article I can
be delegated by Congress to administrative agencies. See,
e.g., National Cable Television Ass’n, Inc. v. United States,
415 US. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974). Also,
taxes must be “uniform” under Section 8 of Article I and,
thus, have to apply “ ‘with the same force and effect in every
place where the subject of it is found.’ ” Fernandez v. Wiener,
326 U.S. 340, 359, 66 S.Ct. 178, 90 L.Ed. 116 (1945) (quoting
Head Money Cases (Edye v. Robertson), 112 U.S. 580, 594,
5 S.Ct. 247, 28 L.Ed. 798 (1884)). Further, Article I, § 9
forbids Congress from leveling direct or capitation taxes
except in proportion to the census or enumeration
commanded by the Constitution.” Aware and perhaps because
of these limits, the Supreme Court has come to deem certain
assessments as incidents of congressional authority arising
from sources other than the (limited) taxing power discussed
in Article I. Thus, for example, in National Cable Television

9. The Sixteenth Amendment, of course, allows for the
imposition of taxes on income (though not other items) without regard
to apportionment among the States or to any census or enumeration.

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Appendix A

Association, the Court faced a statute that allowed the Federal
Communications Commission to prescribe, inter alia, a “fee,
charge, or price, if any,” in order to make the agency work
self-sustaining. 415 U.S. at 337, 94 S.Ct. 1146 (quoting 31
U.S.C. § 483a). Mindful of the canon of constitutional
avoidance and anxious to “avoid constitutional problems”
that it perceived might exist if the statute were read to be an
(arguably impermissible) delegation of Congress’s taxing
power to an administration agency, the Court held that the
“fee” was not a “tax” for Article I purposes because it sought
only to cover the costs of an associated administrative
regulation rather than aid in revenue raising. /d. at 340-41,
94 S.Ct. 1146. Similarly, in the Head Money Cases, the Court
faced an assessment authorized by Congress on vessels
bringing passengers from foreign ports. 112 U.S. at 594-95,
5 S.Ct. 247. The plaintiffs argued, among other things, that
the law ran afoul of the constitutional requirement that all
taxes be applied “uniformly” because it was directed only to
persons entering the country by ship, as opposed to by land
or by rail. Jd. at 594, 5 S.Ct. 247. To avoid such potential
constitutional difficulties, the Court held that the charge did
not arise from the taxing power of Article I, § 8 but instead
was a “mere incident” of Congress’s separate constitutional
power to regulate commerce-what the Court described as
“that brancii of foreign commerce which is involved in
immigration.” /d. at 595, 5 S.Ct. 247; see also U.S. Const.
art. I, § 8, cl. 3.

While the Supreme Court has limited what qualifies as
an incident of the taxing power for constitutional purposes,
it has recognized that its rulings do not necessarily resolve
(or even implicate) the question what is a tax for other

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Appendix A

purposes, such as “under State law.” As the Court put it in
the Head Money Cases, sums demanded by the government
may not be authorized pursuant to the “taxing power” of the
Constitution but may still be properly deemed taxes in “a
loose and more extended sense than was used in the
[CJonstitution.” Jd. at 596, 5 S.Ct. 247.

Indeed, in our system of government, States have powers
reserved to them that extend well beyond the powers of the
national government. See U.S. Const. amend. X. These
powers include an independent and plenary taxing authority
“in the most absolute and unqualified sense.” The Federalist
No. 32, at 199 (Alexander Hamilton) (Carl Van Doren ed.,
1979). As exemplified by the dictionary definitions, the
plenary authority to tax under state law has historically
included a very wide array of extractions of property from
private persons by a sovereign for its use that may or may
not be incidents of the rather more narrow taxing authority
granted in Article I.'°

10. It bears mention that our holding is in harmony with that of
the Fifth Circuit. In addressing a challenge under the TIA to a
specialty license plate scheme in Louisiana, the Fifth Circuit held
that the scheme involved “taxes under State law” because the funds
collected from the program did not purport to “ ‘regulate’ ” anything
and “[{a}] dominant feature of the program, evidenced in over half of
the provisions authorizing specialty license plates, is to raise
revenue.” Henderson v. Stalder, 407 F.3d 351, 358 (Sth Cir.2005)
(Jones, J.). Given that Congress’s purpose in passing the TIA was to
“prevent federal courts from interfering with challenges to state and
local revenue-raising measures,” the Fifth Circuit was “unwilling to
mischaracterize the Louisiana legislature’s appropriations measures
as ‘fees’ in order to achieve federal jurisdiction.” /d. at 358-59.

“sé

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Appendix A
D

Seeking to avoid the conclusion that the TIA bars their
claims, Motorists advance two additional arguments that
require close attention.

1. Motorists contest the application of the TIA on the
ground that they are not seeking to challenge an assessment
imposed on them, but rather assessments imposed on and
paid by other persons or entities. This, they argue, is an
essential and dispositive distinction under the Supreme
Court’s teaching in Hibbs v. Winn, 542 U.S. 88, 124 S.Ct.
2276, 159 L.Ed.2d 172 (2004). We are constrained to
disagree. Nothing in the language of the TIA indicates that
our jurisdiction to hear challenges to state taxes can be turned
like a spigot, off when brought by taxpayers challenging their
own liabilities and on when brought by third parties
challenging the liabilities of others. Rather, Congress plainly
directed us that we “shall not enjoin . . . any tax under State
law,” without qualification-and nothing in Hibbs commands
a result contrary to the Congress’s express direction.

To be sure, the Supreme Court in Hibbs faced a plaintiff
who sought to chalienge the validity of tax credits provided
to third parties. And in addressing the defendant’s assertion
that the TIA barred the plaintiff's claim, the Court did point
out that TIA cases typically involve challenges brought by
State taxpayers seeking to avoid their own state tax liabilities.
Id. at 107-08, 124 S.Ct. 2276. But the Court did so not to
criticize extant lower court decisions holding that the TIA

25a

Appendix A

bars challenges brought by third parties to State law taxes.'!
Instead, the Court simply sought to underscore how unusual
the case before it was compared with most TIA suits. Indeed,
the Court proceeded to hold that the essential problem with
defendant’s assertion that the TIA barred the suit before it
lay in the fact that the plaintiff there simply did not seek to
enjoin the levy or collection of any tax under State law, as is
typically the case, but instead sought to challenge the
provision of a tax credit aimed at limiting or constraining
State tax revenues. Hibbs, 542 U.S. at 95, 124 S.Ct. 2276.
Simply put, the Court held that giving away a tax credit is a
very different thing than assessing, levying or collecting a
tax.

The Court explained that the “moorings” of the TIA rest
on a “state-revenue-protective” rationale. /d. at 106, 124 S.Ct.
2276. See also id. at 105, 124 S.Ct. 2276 (emphasizing the
protection of “the collection of revenue” as key impulse in
the Court’s jurisprudence); id. at 106, 124 S.Ct. 2276 (noting
that prior decision enforcing the TIA was appropriate because
“(f]ederal-court relief. .. would have operated to reduce the
flow of state tax revenue”). It then proceeded to hold that a
challenge brought to a tax credit does not implicate this core
concern precisely because the entry of the relief sought by
the plaintiffs-the elimination of a tax credit-is not an attack
on a State measure aimed at raising revenue. See id. at 108-

11. See, e.g., Valero Terrestrial Corp. v. Caffrey, 205 F.3d 130,
132 (4th Cir.2000) (TIA barred challenge by landfill owners and
waste transportation companies to a tax imposed on persons disposing
of solid waste at landfills; no distinction made between transport
company upon whom the tax was imposed and landfill owners merely
required to collect tax).

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Appendix A

09, 124 S.Ct. 2276. While the TIA embodies an articulated
concern about protecting State revenue raising efforts, it
simply does not reflect any such concern “about federal
courts’ flogging state and local governments to collect
additional taxes.” Jd. at 109, 124 S.Ct. 2276 (quoting Dunn
v. Carey, 808 F.2d 555, 558 (7th Cir.1986)). Our case, of
course, does not involve the somewhat unusual circumstance
confronted by Hibbs of citizens seeking to eliminate tax
credits and “flog” the State to collect more tax revenues, but
instead falls in the traditional heartland of TIA cases-an effort
expressly aimed at preventing the State from exercising its
sovereign power to collect certain revenues.”

Plaintiffs respond that enjoining Oklahoma from
collecting revenues from the Choose Life, Adoption Creates
Families, and other specialty license plates specifically
authorized by statute might not reduce state revenues. After
all, they say, motorists would remain free to apply for
specialty plates under the legislature’s 2005 “all comers” law
allowing any group with 500 prepaid applications to obtain
a plate of their liking. Plaintiffs’ submission here, however,
is curiously in tension with their response to defendants’
mootness argument. There, plaintiffs contended that the
legislature’s new rule requiring 500 prepaid applications for
new specialty plates is considerably more onerous than the
legislature’s preexisting scheme immediately approving
certain plates for issuance. Here, by contrast, plaintiffs seem
to suggest that an injunction against the old legislative regime
would result in no net revenue loss for the State because a

12. As with our reading of the TIA, our understanding of Hibbs
accords with the views expressed by the Fifth Circuit in its decision
in Henderson. See 407 F.3d at 359.

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Appendix A

one-for-one substitution would take place-with motorists
simply migrating from the old to the new licensing regime.

In any event, there is simply nothing in the TIA or Hibbs
suggesting that federal courts can entertain challenges to state
taxes on the basis of predictive judgments that doing so will
not harm state coffers; rather our jurisdiction is precluded
by the plain language of the TIA in all cases seeking to enjoin
the levy or collection of taxes under State law. Were the case
otherwise, judges might be free to become second rate,
supply-side economists, hazarding guesses that enjoining this
or that revenue raising measure would help rather than hurt
overall tax collections. But we are not authorized by Congress
to be in the business of forecasting the likely fiscal effects
of variations on state tax policy; nor do we think ourselves
well equipped to do so.

2. Picking up on an idea recently advanced by the Sixth
Circuit, plaintiffs seek in their reply brief, and in a notice
pursuant to Federal Rule of Appellate Procedure 28(j), to
supplement their “fee rather than tax” and Hibbs-based
arguments with a new, alternative contention. Now they seek
to argue that Oklahoma’s assessment is not a tax (or a fee)
because it is a mere contractual exchange of money for a
commodity. (See Appellant’s Reply Br. at 16-19; Appellant’s
Supp. Auth. (filed April 10, 2006).)"°

13. See, e.g., Appellant's Reply Br. at 16 (“Motorists’ opening
appellate brief explains at length why the amounts paid to purchase
special plates are fees (not taxes) and are thus not implicated by the
TIA. However, even if Motorists are wrong and the amounts are not
fees, it does not follow that the amounts necessarily must be taxes.”).

28a

Appendix A

It is our general rule, however, that arguments and issues
presented at such a late stage are waived. See Bowdry v.
United Airlines, Inc., 58 F.3d 1483, 1490 (10th Cir. 1995)
(citing, inter alia, Headrick v. Rockwell Int'l Corp., 24 F.3d
1272, 1278-79 (10th Cir. 1994) (White, J.)); accord Herbert
v. Nat’l Academy of Sciences, 974 F.2d 192, 197
(D.C.Cir. 1992) (declining to decide new argument that statute
did not take away jurisdiction from the court, explaining that
“(while courts always must decline to decide cases over
which they have no power, the converse of that rule does not
hold: Article III tribunals are not absclutely bound to render
judgment on every argument over which they obtain
jurisdiction”). As we have explained, the reasons for our rule
are two-fold: “First, to allow an appellant to raise new
arguments at this juncture would be manifestly unfair to the
appellee who, under our rules, has no opportunity for a
written response... . Secondly, it would also be unfair to
the court itself, which, without the benefit of a response from
appellee to an appellant’s late-blooming argument, would
run the risk of an improvident or ill-advised opinion, given
our dependence as an Article III court on the adversarial
process for sharpening the issues for decision.” Headrick,
24 F.3d at 1278 (internal quotation marks omitted).

Of course, our rule against entertaining new arguments
in reply in no way precludes us from supplementing the
contentions of counsel through our own efforts. /d. But
neither does it compel us to undertake such self-directed
research or pursue late and undeveloped arguments, and we
exercise caution in doing so, especially in complex cases
where (as here) highly competent counsel have represented
the parties throughout all stages of the proceedings. Our

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Appendix A

system of justice, after all, is not a self-directed inquisitorial
one; to avoid error, we are dependent on the full development
of issues through the adversarial process and the initial testing
of ideas in trial courts where advocates have an opportunity
to present more than thin briefs and fifteen minute oral
arguments. For these reasons, we need not and do not issue
any holding on plaintiffs’ contractual exchange argument and
leave a final decision on this score for another day.

Just how complex and difficult the new argument
plaintiffs ask us to address, and thus the reason for our
particular reluctance to decide it with finality, is worth
pausing to underscore. Plaintiffs borrow their new
submission from ACLU of Tennessee v. Bredesen, 441 F.3d
370, 373 (6th Cir.2006), cert. denied __ U.S. __, 126 S.Ct.
2972, 165 L.Ed.2d 954 (2006), a recent decision in which
our sister court rejected the notion that a governmental
assessment must either be a tax or a fee-the very dichotomy
plaintiffs have urged courts to adopt throughout the
proceedings in this circuit. (Appellant’s Opening Br. at 23-
28.) Rather, the Sixth Circuit held that Tennessee’s statutory
regime for specialty license plates “creates contractual debts
to pay but imposes no tax. Instead of using its sovereign
power to coerce sales, Tennessee induces willing purchases
as would any ordinary market participant.” /d. at 374."

14. The Sixth Circuit itself relied in substantial part on a recent
dissent from denial of rehearing en banc in the Fifth Circuit.
Henderson v. Stalder, 434 F.3d 352, 353 (Sth Cir.2005) (Davis, J.,
dissenting from denial of rehearing en banc ). And though the Sixth
Circuit overcame the TIA hurdle in its case, the end result there was
no different than it is here-the Sixth Circuit still dismissed plaintiffs’
claims on a motion to dismiss, albeit one directed to the merits of
the constitutional claims. Bredesen, 441 F.3d at 375-80.

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Appendix A

While we do not for a moment doubt that the State can
obtain funds through means other than “taxes” and “fees,”
whether plaintiffs’ assertion that Oklahoma’s issuance of
specialty plates amounts to nothing more than an ordinary
market sales contract is far from clear. The Bredesen court
relied on two particular factors in holding that the license
plate charge was not a tax: (1) a motorist voluntarily pays
the charge, and (2) the State acts as “an ordinary market
participant.” 441 F.3d at 374. The court noted that these two
factors “apply a fortiori to ordinary purchases, like the
purchase of government bonds, or the purchase of a souvenir
at a state park gift store. Such purchase payments can hardly
be termed ‘taxes’ as opposed to ordinary payments on
voluntary contracts.” Id.

But, starting with the latter consideration, we are unaware
of anything approaching an “ordinary market” for specialty
license plates, at least in Oklahoma. Quite unlike the (some
might say over-) active market for souvenir snow globes sold
in state park gift shops, the State brooks no competitors in

15. It seems to us that Bredesen is absolutely right insofar as it
recognized that the tax-fee dichotomy arose in a different context to
answer a different questicom than that posed by the TIA. 441 F.3d at
374. But the dichctomy arese originally not from any circuit court
opinion (as Bredese~ suggests); instead, it seems to have originated
in the Supreme Cowri’s decision in National Cable Television
Association, 415 U.S. 336, 94$.Ct. 1146, 39 L.Ed.2d 370. That case,
of course, had nothing to do with the scope of the term “tax under
State law” in the TIA, but was, as we have discussed, one in which
the Supreme Court strained to place the FCC’s authority to impose
certain assessments outside the constitutional taxing power of Article
1, § 8 in order to avoid what it perceived to be a potentially netthesome
non-delegation problem. See supra at 1247-48.

3la

Appendix A

the supply of specialty license plates. As sovereign, it
exercises exclusive (monopoly) power to issue those items.
See generally 47 Okla. Stat. § 1113; See also Cooley, supra,
at 72 (taxation is “the exercise of the sovereign power to
raise a revenue”). Citizens cannot purchase specialty plates
from some other source, affix them to the rear of their cars,
and motor down the highway-at least without the substantial
risk of incurring something substantially worse than either a
tax or a fee.'® From the pleadings before us, moreover, it
appears that the marginal cost of specialty plates does not
exceed $8 (Am.Compl.J 65),'’ and we know that in the
competitive market for bumper stickers one can find virtually
any message ready to be affixed to the back of a car for
substantially less money still.'* The fact that Oklahoma is
able, under these circumstances, to charge up to $35 for a

16. See 47 Okla. Stat. § 1151(A)(2) (making criminal the
alteration of a license plate); id. § 1151(A)(5) (criminalizing the
operation of a vehicle without a proper license plate or with a plate
for which all taxes have not been paid).

17. “In a perfectly competitive market, retail prices drop
instantly to the marginal cost of the most efficient company.” Verizon
Comms., Inc. v. FCC, 535 U.S. 467, 505, 122 S.Ct. 1646, 152 L.Ed.2d
701 (2002) (citing N. Gregory Mankiw, Principles of Economics 283-
288, 312-313 (1998)).

18. For example, http:// www. stickergiant. com (last visited
March 2, 2007) offers thousands of different bumper stickers, most
for under $3. Stickers with slogans supporting abortion rights, such
as “Pro Child Pro Choice” or “Keep Your Laws Off My Body” can
be purchased for $2.99. Stickers demonstrating the opposite view,
such as “It Is Not a Choice, It Is a Child,” can be purchased for the
same price.

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Appendix A

specialty plate bearing a simple message calls into question
whether ordinary market conditions really prevail in the sale
and purchase of specialty license plates.

We are also uncertain whether the fact that the transaction
to purchase specialty plates (as opposed to ordinary plates)
may be “voluntary” dictates that the accompanying
supracompetitive charge is not a tax. On the one hand, the
prevailing definition of tax in existence at the time that the
Tax Injunction Act was enacted contemplated that taxes are
involuntary in nature. See supra at 1244-46. And, in this case,
the extra charge is for a discretionary product that the state
is offering, and it is purely up to the consumer to decide
whether to buy it. The extra words on the specialty plate are
not necessary to exercise the privilege regulated by the state-
i.e., driving. The basic $15 charge covers the privilege of
driving, and the incremental cost may simply be a commercial
price paid by a willing motorist to purchase a license plate
with a slogan that is pleasing to the motorist.

On the other hand, private citizens routinely incur
different levels of compulsory taxation based on the voluntary
choices they make. Thus, for example, in addition to the
normal taxes one pays when purchasing a new car, a higher
“luxury” tax may be incurred by those buyers who choose a
particularly expensive vehicle. See, e.g., 26 U.S.C. § 4001(a)
(1991). Those who incur this luxury tax do so “voluntarily”
in the same sense that those who purchase specialty license
plates bearing some preferred message do so “voluntarily.”
That is, just as the Cadillac owner who chooses a fancier car
foresees that he or she will also have to pay an additional
(compulsory) assessment to the state, a motor vehicle owner

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Appendix A

who chooses to display a specialty plate in Oklahoma knows
that he or she must pay the sovereign an additional
(compulsory) sum for that privilege. The fact that the
transaction in either case is voluntarily undertaken with full
foresight of the inevitable (and most certainly not bargained
for or voluntarily chosen) assessment makes the assessment
involved no less a tax. Indeed, though our car-oriented culture
may make it sometimes seem otherwise, the very decision to
purchase and drive a car is itself a voluntary one (no one is
forced to have a car, after all) and it, too, forseeably involves
the payment of a sales tax and a tax for even a basic license
plate. So it is that a very great many taxes we are every day
compelled to pay are a result of our voluntary decisions (the
decision to work harder this year and perhaps risk a higher
income tax bracket, the decision to purchase a home rather
than rent and thus incur real estate taxes, etc.). As the Fifth
Circuit put the point in the process of rejecting the very
analysis advanced by the plaintiffs before us in their reply
brief: “Any party who pays special assessments to the
government does so ‘voluntarily’ in order to engage in
particular activity, whether that activity is homebuilding,
engaging in a regulated industry or obtaining permission to
park in handicapped spots.” Henderson, 407 F.3d at 358. One
thus simply cannot meaningfully distinguish taxes from
“ordinary market transactions” on the basis of a taxpayer’s
intent. Accord id. (holding that it is “not the taxpayer’s
motivation” that distinguishes taxes from other transactions).

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Appendix A
E

Having concluded that the Oklahoma specialty license
plate assessments qualify as “taxes under State law,” our
analysis under the TIA remains still unfinished. Before
declining federal jurisdiction, the statute requires us to decide
whether Oklahoma affords a “plain, speedy and efficient”
remedy in its courts for those seeking to challenge its taxes.
28 U.S.C. § 1341. “[I]f the state provides adequate procedural
due process to allow a taxpayer to raise any constitutional
objections, then the state has done all that is required under
the Tax Injunction Act, and as a consequence, the federal
courts are foreclosed from hearing such a tax challenge.”
ANR Pipeline Co. v. Lafaver, 150 F.3d 1178, 1192 (10th
Cir.1998) (citing California v. Grace Brethren Church, 457
U.S. 393, 412-13, 102 S.Ct. 2498, 73 L.Ed.2d 93 (1982)). If
State courts fail to afford such due process, however, the doors
to federal court remain open to ensure an adequate forum
for the dispute.

We have heard no convincing reason to suppose that
Oklahoma fails to provide its citizens sufficient process for
challenging its tax laws; very much to the contrary. In addition
to affording a general right to protest taxes before the Tax
Commission, see generally 68 Okla. Stat. §§ 201, et seq.,
Oklahoma has specifically created “a right of action .. . to
afford a remedy to a taxpayer aggrieved by the provisions of
this article or of any other state tax law.” 68 Okla. Stat.
§ 226(a) (emphasis added). The provision creates “a legal
remedy and a right of action” in any case where a party claims,
inter alia, that “the collection thereof [is] violative of any
Congressional Act or provision of the Federal Constitution.”

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Appendix A

Id. § 226(c).'® Motorists provide no reason why they cannot
avail themselves of these provisions, nor do they respond to
the defendants’ argument that this provision ensures them a
speedy, efficient, and fair hearing.

Oklahoma law also specifically provides that parties may
apply for and receive injunctive and declaratory relief as
against unlawful taxes, exactly the sort of relief Motorists
seek here. See 12 Okla. Stat. § 1397 (“An injunction may be
granted to enjoin the enforcement of a void judgment, the
illegal levy of any tax, charge or assessment, or the collection
of any illegal tax, charge or assessment, or any proceeding
to enforce the same; and any number of persons whose
property is affected by a tax or assessment so levied may
unite in the petition filed to obtain such injunction.”)
(emphasis added); see also id. §§ 1651-57. In their brief,
Motorists purport to quote Section 1397 as allowing an
injunction only with respect to “the collection [from them]
of any illegal tax, charge or assessment.” (Appellant’s
Opening Br. at 29.) With their addition of the bracketed
language, Motorists argue that Section 1397 applies only to
taxpayers challenging the collection of taxes levied against
them and not to third party challenges such as the one they
seek to pursue. But the statute simply does not contain the
language the Motorists complain about (and themselves add),
and we have been offered no reason to suppose that Oklahoma
courts will interline the plain words of the statute in this
fashion.

19. That this provision also purports to allow such actions in
federal court as well as state court, see 68 Okla. Stat. § 226(c), does
not affect our jurisdictional analysis, as the Oklahoma Legislature
obviously cannot usurp Congress’s prerogative in expanding or
contracting the scope of a federal court's jurisdiction.

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Appendix A
Il

In claims five and six, ORC challenges not the collection
of any tax but the manner in which money is distributed from
the Choose Life Assistance Program. ORC argues in these
remaining claims that the State impermissibly denies it the
Opportunity to receive monies from the Choose Life
Assistance Program based solely on its viewpoint, in
violation of the First and Fourteenth Amendments. More
specifically, the Choose Life Assistance Program directs
monies to groups that counsel “pregnant women who are
committed to placing their children for adoption.” 47 Okla.
Stat. § 1104.6(C)(3). ORC indicates that it would like to offer
such counseling services to women and has applied for
funding to do so, but that its applications have been denied
due to a Statutory restriction preventing the disbursement of
program funds to organizations that are also “associated with
any abortion activities.” Jd. § 1104.6(C)(4); see also

20. We identified a potential ripeness concern with counts five
and six. The operative complaint states merely that “ORC would
like to apply for funding pursuant to 47 Okla. Stat. § 1104.6,” not
that ORC had ever so applied. (Am. Compl. | 27 (emphasis added).)
Had ORC not given DHS the opportunity to consider an application
for disbursement under the Choose Life Assistance Program, we
would have had serious concerns about whether we were being called
upon to determine a case based upon an event which may not happen
at all. What if ORC did apply and DHS, if against all the odds, granted
the application? At oral argument, however, both parties informed
us the ORC has applied for funding from the Choose Life Program
Fund ir fiscal years 2006 and 2007, and that DHS has denied its
applications for the very reason that forms the basis of claims five
and six-that is, because ORC is associated with abortion activities.

(Cont'd)

37a

Appendix A

id. § 1104.6(D). ORC contends that this restriction amounts
to an “unconstitutional condition” on the exercise of its First
Amendment rights. Defendants respond, and the district court
held, that the Eleventh Amendment immunizes them from
such a claim.?!

A
The Eleventh Amendment provides that

[t]he Judicial power of the United States shall not
be construed to extend to any suit in law or equity,
commenced or prosecuted against one of the
United States by Citizens of another State, or by
Citizens or Subjects of any Foreign State.

U.S. Const. amend. XI. By its plain terms, nothing in the
Amendment would appear to bar ORC’s claims as they

(Cont'd)

The parties thereafter supplemented the record before us with copies
of ORC’s applications and DHS’s denials. We are thus satisfied that
ORC’s claims are indeed properly before us.

21. Certain of the defendants argue in a footnote that claims
five and six are also barred by the TIA because the relief sought
with respect to those claims also implicates the State’s tax collection
power. (Tax Commission Defendants’ Resp. Br. at 44 n. 12.) We
will not consider an argument raised in such a perfunctory manner.
See United States v. Hardman, 297 F.3d 1116, 1131 (10th Cir.2002);
accord Hardeman vy. City of Albuquerque, 377 F.3d 1106, 1122 (10th
Cir.2004) (issue raised only in footnote before trial court deemed
waived).

38a

Appendix A

involve purely an intrastate matter-ORC claims to be a non-
profit organization located in Oklahoma (Am.Compl.
qf 20-21), and it seeks to sue only its own sovereign state.
But the plain terms of the Amendment have been much
embroidered. The Supreme Court in Hans v. Louisiana, 134
U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890), long ago instructed
inferior federal courts that the Amendment should be read to
preclude even suits by a citizen against its own sovereign

se 665

state; “ ‘inherent in the nature of sovereignty,’ ” Hans held,
*“ ‘is the right not to be amenable to the suit of an individual
without its consent.’ ” /d. at 13, 10 S.Ct. 504 (quoting The
Federalist No. 81, at 547 (Alexander Hamilton) (Carl Van
Doren ed.1979)). Though the Court has sometimes criticized
Hans and more than once considered overruling it,” Hans

remains the law.

The Supreme Court has, however, issued a series of
rulings limiting Hans’s reach. Perhaps the most significant,
and the one most relevant for our purposes, is Ex parte Young,
209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). In Ex parte
Young, the Court held that the Eleventh Amendment generally
will not operate to bar suits so long as they (i) seek only

22. See, e.g., Pennsylvania v. Union Gas Co., 491 U.S. 1, 31-
35, 109 S.Ct. 2273, 105 L.Ed.2d 1 (1989) (Scalia, J., concurring and
dissenting); Welch v. Tex. Dep’t of Highways & Public Transp., 483
U.S. 468, 495-96, 107 S.Ct. 2941, 97 L.Ed.2d 389 (1987) (Scalia,
J., concurring); id., at 519-21, 107 S.Ct. 2941 (Brennan, J.,
dissenting); Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 298-
302, 105 S.Ct. 3142, 87 L.Ed.2d 171 (1985) (Brennan, J., dissenting).
See also Carlos Manuel Vazquez, What is Eleventh Amendment
Immunity?, 106 Yale L.J. 1683, 1694 n. 42 (1997) (collecting
scholarly criticism of Hans).

39a

Appendix A

declaratory and injunctive relief rather than monetary
damages for alleged violations of federal law, and (ii) are
aimed against state officers acting in their official capacities,
rather than against the State itself. Young’s effort to alleviate
the effect of Hans, however, itself contains some logical
curiosities of its own. Young proceeds on the admitted fiction
that a suit seeking an injunction against a state employee
seeking to do his or her job is (somehow) different in
substance than a suit against the state itself. Pennhurst State
Sch. & Hosp. v. Halderman, 465 U.S. 89, 105, 104 S.Ct.
900, 79 L.Ed.2d 67 (1984) (noting the “fiction of Young”’).”’
It also proceeds on the related assumption that the state
employee is somehow engaging in something other than state
action for purposes of the Eleventh Amendment yet is
engaging in sufficient state action for purposes of the
Fourteenth Amendment to provide us with jurisdiction; after
all, we can enforce aconstitutional right only as against state,
not private, action. See id.; Virginia v. Rives, 100 U.S. 313,
318, 25 L.Ed. 667 (1879). Young further commands us to
afford federal jurisdiction to federal claims even when a
competent state forum stands ready and able to adjudicate
those claims; indeed, the presence or absence of a state forum
simply does not enter into the Young equation.”

23. See also Kenneth C. Davis, Suing the Government by
Falsely Pretending to Sue an Officer, 29 U. Chi. L.Rev. 435 (1962)
(“You may get relief against the sovereign if, but only if, you falsely
pretend that you are not asking for relief against the sovereign. The
judges often will falsely pretend that they are not giving you relief
against the sovereign, even though you know and they know, and
they know that you know, that the relief is against the sovereign.’’).

24 But see Young, 209 USS. at 176, 28 S.Ct. 441 (Harlan.J.,
(Cont'd)

40a

Appendix A

Adding to the rococo quality of Eleventh Amendment
jurisprudence, the Supreme Court has in recent years added
a new gloss on Young’s gloss on Hans’s gloss on the Eleventh
Amendment. First, in 1996, the Court held that Young suits
are not available where Congress “has prescribed a detailed
remedial scheme for the enforcement against a State of a
statutorily created right.” Seminole Tribe of Fla. v. Florida,
517 U.S. 44, 74, 116 S.Ct. 1114, 134 L.Ed.2d 252 (1996).
That is, “federal courts are not free to imply the wide-ranging,
judge-made remedial doctrine of Ex parte Young when
Congress has seen fit to craft a significantly narrower
statutory remedy.” ANR Pipeline Co. v. Lafaver, 150 F.3d
1178, 1189 (10th Cir.1998). A year later, the Court instructed
that Young may not be rotely applied; instead, lower courts
“must ensure that the doctrine of sovereign immunity remains
meaningful, while also giving recognition to the need to
prevent violations of federal law.” Coeur d’Alene, 521 U.S.
at 269, 117 S.Ct. 2028. The Court added that

[t]o interpret Young to permit a federal-court
action to proceed in every case where prospective

(Cont'd)

dissenting) (criticizing majority for failing to recognize that “[wle
must assume-a decent respect for the states requires us to assume-
that the state courts will enforce every right secured by the
Constitution”); Jdaho v. Coeur d'Alene Tribe of Idaho, 521 U.S. 261,
270-74, 117 S.Ct. 2028, 138 L.Ed.2d 438 (Kennedy, J.) (arguing that
Young has special significance where no state forum available); id.
at 276, 117 S.Ct. 2028 (“It would be error coupled with irony were
we to bypass the Eleventh Amendment, which enacts a scheme
solicitous to the States, on the sole rationale that state courts are
inadequate to enforce and interpret federal rights in every case.”).

4la

Appendix A

declaratory and injunctive relief is sought against
an officer, named in his official capacity, would
be to adhere to an einpty formalism and to
undermine the principle ... that the Eleventh
Amendment represents a real limitation on a
federal court’s federal-question jurisdiction.

Id. at 270, 117 S.Ct. 2028. As the Court put it, the “real
interests served by the Eleventh Amendment are not to be
sacrificed to elementary mechanics of captions and
pleadings.” /d.; see also Alden vy. Maine, 527 U.S. 706, 756-
57, 119 S.Ct. 2240, 144 L.Ed.2d 636 (1999).

In the suit before us, defendants do not dispute that
claims five and six meet the Ex parte Young formalisms-that
is, those claims seek prospective relief, no damages, and are
directed (at least nominally) against state officials rather than
the State of Oklahoma itself. Instead, defendants urge us to
dismiss this suit on the basis of the new gloss added to Young
by Coeur d’Alene. But this only raises the questions: What
exactly did Coeur d’Alene do to the state of the Supreme
Court’s Ex parte Young jurisprudence?” And what does
Coeur d’Alene mean for this case?

25. As one critic has put it, “The most unsettled aspect of the
newly developing law [regarding the Eleventh Amendment] is the
effect of Coeur d'Alene Tribe.” John H. Clough, Federalism: The
Imprecise Calculus of Dual Sovereignty, 35 J. Marshall L.Rev. |, 4
(2001); see also Laurence H. Tribe, American Constitutional Law
566 (3d ed. 2000) (“The meaning of ... Coeur d’Alene for Ex parte
Young is a matter of great debate among commentators.”) (collecting
articles); Carlos Manuel Vazquez, Night and Day: Coeur d'Alene,

(Cont'd)

42a

Appendix A

Coeur d’Alene involved multiple and fractured opinions.
Justice Kennedy wrote the lead opinion but commanded a
majority with respect only to certain sections. When it came
to the key question how lower courts should change their
analyses under Ex parte Young, Justice Kennedy wrote for
just himself and Chief Justice Rehnquist to suggest a “case-
by-case approach” in which lower courts should “reflect a
sensitivity” to a “broad” range of questions ranging from the
nature and significance of the federal rights at stake, the state
interests implicated by the lawsuit, and the availability of a
state forum. 521 U.S. at 280, 117 S.Ct. 2028. Federalism
and comity interests, Justice Kennedy wrote, should receive
consideration in every case. /d. at 278-280, 117 S.Ct. 2028.
Turning to the specific matter before him, in which the Coeur
d’ Alene Tribe of Idaho sought a declaratory judgment action
to establish its entitlement to exclusive use and occupancy
of submerged lands under Lake Coeur d’Alene, Justice
Kennedy wrote that the lawsuit sought to “divest the State
of its sovereign control over submerged lands, land with a
unique status in the law and infused with a public trust the
State itself is bound to respect.” /d. at 283, 117 S.Ct. 2028.
After balancing the competing federal and state interests at
stake, and acknowledging the ready availability of a state
forum to hear the dispute, Justice Kennedy concluded that
“{t]he dignity and status of its statehood allow[ed] Idaho to
rely on its Eleventh Amendment immunity and to insist upon

(Cont'd)

Breard, and the Unraveling of the Prospective-Retrospective
Distinction in Eleventh Amendment Doctrine, 87 Geo. L.J. 1, 42
(1998) (“Exactly what the Court held [in Coeur d’Alene], and thus
how radically it changed [Eleventh Amendment] doctrine, is a matter
of some dispute.”) (hereinafter “VAzquez”).

43a

Appendix A

responding to these claims in its own courts.” /d. at 287-88,
117 S.Ct. 2028.

Justice O’Connor wrote separately for herself and
Justices Scalia and Thomas to express disagreement with this
“reformulation” of Ex parte Young. See 521 U.S. at 296, 117
S.Ct. 2028. Justice O’ Connor worried that Justice Kennedy’s
approach would replace “a straightforward inquiry” under
Ex parte Young with a “vague balancing test that purports to
account for a ‘broad’ range of unspecified factors.” /d. And,
as with the balancing of federal and state interests, Justice
O’Connor appeared to reject the notion that the availability
(or unavailability) of a state forum should play any role in
our Eleventh Amendment analysis under Young. Id. at 292,
117 S.Ct. 2028; see also supra at note 24. Yet, Justice
O’Connor joined Justice Kennedy in holding that the
plaintiff’s suit should be dismissed despite its seeming
compliance with Ex parte Young’s formalisms. Her precise
reason for doing so, however, is not free from dispute.*®
It appears that Justice O’Connor modified Ex parte Young
Slightly by expanding what constitutes impermissible
retrospective relief. Though the Tribe’s claim was formally
pled as an action for declaratory and injunctive relief, Justice
O’Connor noted that its request for a declaration that the
State did not own the submerged lands at issue was really, in

26. See Vazquez, supra note 25; Eric B. Wolff, Coeur d’ Alene
and Existential Categories for Sovereign Immunity Cases, 86 Cal.
L.Rev. 879, 916 (1998) (discussing Antonin Scalia, Sovereign
Immunity and Nonstatutory Review of Federal Administrative Action:
Some Conclusions from the Public-Lands Ceses, 68 Mich. L.Rev.
867 (1969), and Louis L. Jaffe, Suits Against Government and
Officers: Sovereign Immunity, 77 Harv. L.Rev. 1 (1963)).

44a

Appendix A

substance, tantamount to a request to transfer title over huge
tracts of lands, a form of relief much akin to a (significant)
retroactive monetary judgment and not at all like a run of
the mill Ex parte Young suit seeking to bar the future
implementation of regulations issued by a state regulatory
body. Jd. at 291, 117 S.Ct. 2028.” Thus, Justice O’Connor
seemed to suggest that we must assess whether a claim seeks
relief effectively equivalent to a retrospective judgment
regardless of how it is formally pled or denominated.

B

As the narrower approach commanding the fifth vote,
we have previously acknowledged that Justice O’Connor’s
opinion provides the controlling guidance for lower courts
and sought to apply that approach, as best we understood it,
in ANR Pipeline, 150 F.3d at 1190. There, we wrote that “[i}n
light of Coeur d’Alene Tribe, federal courts must examine
whether the relief being sought against a state official
‘implicates special sovereignty interests.’ If so, we must then
determine whether that requested relief is the ‘functional
equivalent’ to a form of legal relief against the state that
would otherwise be barred by the Eleventh Amendment,”
such as a retrospective money judgment. /d.

After our decision in ANR Pipeline, however, the
Supreme Court in Verizon Maryland v. Public Service
Commission of Maryland, 535 U.S. 635, 122 S.Ct. 1753, 152

27. Ex parte Young, like many suits in which the doctrine it set
forth has been applied, involved a suit against state officers secking
to enjoin enforcement of a utility commission order that allegedly
violated federal law. 209 U.S. at 129, 28 S.Ct. 441.

45a

Appendix A

L.Ed.2d 871 (2002), had occasion to return to this area. There,
the Supreme Court reviewed a Fourth Circuit decision
articulating an approach to sovereign immunity that closely
tracked our approach in ANR Pipeline:

[T]o determine whether Ex parte Young authorizes
this suit against State officials, we must evaluate
the federal interests served by permitting a federal
suit against individual members of the Maryland
Public Service Commission, taking into account
the remedial scheme for enforcement of federal
law that Congress has established in the
Telecommunications Act of 1996. Then, with
those federal interests understood, we must
determine whether the federal suit would unduly
sacrifice the important value of Maryland’s
sovereign immunity.

Bell Atlantic Md. v. MCI Worldcom Inc., 240 F.3d 279, 295
(4th Cir.2001), rev’d by Verizon Md., 535 U.S. at 648, 122
S.Ct. 1753.

The Supreme Court reversed. In doing so, a clear
majority of the Supreme Court followed Justice O’Connor’s
approach in Coeur d’Alene and instructed lower courts
definitively that “[i]n determining whether the doctrine of
Ex parte Young avoids an Ele» -~th Amendment bar to suit,
a court need only conduct a ‘straightforward inquiry into
whether [the] complaint alleges an ongoing violation of
federal law and seeks relief properly characterized as
prospective.’ ” Verizon Md., 535 U.S. at 645, 122 S.Ct. 1753
(quoting Coeur d’Alene, 521 U.S. at 296, 117 S.Ct. 2028

46a

Appendix A

(O’Connor, J., concurring)). Emphasizing the importance of
the adverb “properly” and that formal pleading titles do not
necessarily control, the Court explained that, in the case
before it, “no past liability of the State, or of any of its
commissioners, is at issue. [The lawsuit] does not impose
upon the State a monetary loss resulting from a past breach
of a legal duty on the part of the defendant state officials...
Insofar as the exposure of the State is concerned, the prayer
for declaratory relief adds nothing to the prayer for
injunction.” /d. at 646, 122 S.Ct. 1753 (internal citations and
quotation marks omitted).

The Supreme Court’s formulation of Coeur d’Alene in
Verizon Maryland is thus somewhat different from what we
had understood it to be in ANR Pipeline. In rejecting the
Fourth Circuit’s analysis, the Supreme Court in Verizon
Maryland clarified that the courts of appeals need not (and
should not) linger over the question whether “special” or
other sorts of sovereign interests are at stake before analyzing
the nature of the relief sought. Thus, to the extent that our
decision in ANR Pipeline read Coeur d’Alene as requiring
“federal courts [to] examine whether the relief sought against
a state official ‘implicates special sovereignty interests,’ ”
150 F.3d at 1190, we recognize today that Verizon Maryland
abrogated this step. Instead, the Supreme Court has instructed
that we are to proceed immediately in every case to the
“straightforward [or so one might hope] inquiry” whether
the relief requested is “properly” characterized as prospective
or is indeed the functional equivalent of impermissible
retrospective relief. Verizon Md., 535 U.S. at 645, 122 S.Ct.
1753; see also Republic of Paraguay v. Al. n, 134 F.3d 622,
628-29 (4th Cir.1998) (reading Coeur d’Alene as requiring

47a

Appendix A

lower courts to analyze whether relief sought is the
“ ‘functional equivalent’ ” of retrospective relief
“notwithstanding [the fact that the] claimed violation was
continuing and the relief sought was only prospective in
nature’’).

Following the Supreme Court’s most recent and
definitive guidance in Verizon Maryland, the sole question
for us becomes whether the relief sought by ORC is
prospective, not just in how it is captioned but also in its
substance. The State appears to wish the law were otherwise,
pursuing arguments that track to a significant degree the sort
of case-specific analysis of the state interests at stake that
the Fourth Circuit pursued in Verizon Maryland. But we are
bound by the law as it is, not as one might wish it to be. And
Verizon Maryland has done much to make clear(er) the law
that binds us.

With the dismissal of claims one through four, the only
remaining relief sought by ORC relates to the statutory
provisions prohibiting disbursement to organizations which
engage in abortion-related activities, that is 47 Okla. Stat.
§ 1104.6(C)(4) and (D). Specifically, ORC seeks (i) a
declaration that prohibiting the distribution of monies from
the Choose Life Assistance Program based on abortion-
related speech is unconstitutional; (ii) an injunction to stop
the Defendants from enforcing 47 Okla. Stat. § 1104.6(C)(4)
and (D), which prohibit distribution to such organizations;
and (iii) severance of those subsections from the rest of the
statute. (Am.Compl.{ 166.) By its terms, ORC’s complaint
does not seek a money judgment for any past alleged
infractions of federal law. Neither does it seek to impose

48a

Appendix A

any constraints on the State’s ability to decide which specialty
license plates to allow or disallow. Nor does it seek to dictate
which programs the State may choose (or not choose) to fund
with revenues from its specialty license plate scheme.
Nothing in ORC’s suit calls to mind the sort of literal land
grab effort made by the plaintiffs in Coeur d’Alene with its
consequent significant implications on the state fisc.7®
Viewing the facts in the light most favorable to ORC, we are
unable to conclude that, were ORC to prevail, Oklahoma’s
specialty license plate program would be any less financially
lucrative for the State, or that the State would be inhibited in
any of its funding options, including its decision to collect
and spend revenues in aid of adoption activities through the
Choose Life Assistance Program. Instead, akin to Ex parte
Young and Verizon Maryland, ORC’s injunction claim seeks
to preclude only the future enforcement of one aspect of a
complex regulatory scheme, and its claim for declaratory
relief adds nothing of substance to this request. See Verizon
Md., 535 U.S. at 645, 122 S.Ct. 1753 (“We have approved
injunction suits against state regulatory commissioners
{under Young ].... Indeed, Ex parte Young itself was a suit
against state officials . . . to enjoin enforcement of a railroad

28. Lower courts that have found Coeur d'Alene applicable
have involved just such circumstances. See, e.g., Western Mohegan
Tribe & Nation v. Orange County, 395 F.3d 18 (2d Cir.2004)
(claiming that the State of New York was wrongfully in possession
of 10 counties); Ysleta Del Sur Pueblo v. Laney, 199 F.3d 281 (Sth
Cir.2000) (seeking to eject state officers from piece of real property);
MacDonald v. Vill. of Northport, Mich., 164 F.3d 964 (6th Cir. 1999)
(seeking declaration that right-of-way that provided access to
navigable waterway was the lawful property of plaintiffs).

49a

Appendix A

commission’s order requiring a reduction in rates.”).”? That
is, ORC’s complaint seeks only to prohibit the State in the
future from denying Choose Life Assistance Program funds
to organizations like ORC because they also advocate
abortion. According to ORC, Oklahoma imposes a so-called
“unconstitutional condition” insofar as the State allegedly
provides no way for ORC to receive such funding to support
its adoption counseling services and still exercise its First
Amendment right to speak out about abortion, even using
entirely private funds in entirely distinct programs. To
participate in the State’s Choose Life Assistance Program,
ORC contends it effectively must give up its constitutionally
protected right to advocate for abortion even on its own
proverbial time and using its own (non-governmental)
funds. *°

29. This stands in contrast to the situation we faced in ANR
Pipeline. Had we allowed the suit to go forward in ANR Pipeline, a
federal court would have been in the position of effectively rewriting
a not insignificant portion of Kansas’s property tax code. ANR
Pipeline, 150 F.3d at 1194.

30. As the Supreme Court explained in Rust v. Sullivan, the
problem of unconstitutional conditions arise in cases where “the
Government has placed a condition on the recipient of the subsidy
rather than on the particular program or service, thus effectively
prohibiting the recipient from engaging in the [constitutionally]
protected conduct outside the scope of the [government-]funded
program.” 500 U.S. 173, 197, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991)
(emphasis in original). Thus, in one early application of the doctrine,
the Court struck down a California law which required persons to
swear an oath that they did not advocate for the overthrow of the
government of the United States or the State of California in order

(Cont'd)

50a

Appendix A

Of course, had ORC’s complaint gone further—seeking,
for example, to require the State to fund its abortion-related
programs—we would have faced a very different and
considerably more difficult question under Coeur d’Alene
and Verizon Maryland.*' But in this case, even if ORC were
to prevail and obtain the relief sought in its amended
complaint, the State would remain free to promote adoption
and ensure that none of its monies go to abortion-related
activities or any other activities of which it disapproves.”
Indeed, ORC agreed at oral argument that the Supreme
Court’s ruling in Rust v. Sullivan, 500 U.S. 173, 111 S.Ct.
1759, 114 L.Ed.2d 233 (1991), allows the State to make a

(Cont'd)

to receive a tax exemption. Speiser v. Randall, 357 U.S. 513, 516,
78 S.Ct. 1332, 2 L.Ed.2d 1460 (1958). In doing so, the Court held
that “[t]o deny an exemption to claimants who engage in certain
forms of speech is in effect to penalize them for such speech,” which
“necessarily will have the effect of coercing the claimants to refrain
from the proscribed speech.” /d. at 518, 519, 78 S.Ct. 1332. The
Court added that “when the constitutional right to speak is sought to
be deterred by a State’s general taxing program due process demands
that the speech be unencumbered until the State comes forward with
sufficient proof to justify its inhibition.” /d. at 528-29, 78 S.Ct. 1332.

31. See, e.g., Barton v. Summers, 293 F.3d 944, 951 (6th
Cir.2002) (holding that an attempt to force the State to make a
particular allocation of Medicaid funds despite congressional
authorization allowing the State considerable discretion amounted

to an effort to obtain money damages impermissible under Coeur
d'Alene ).

32. Given the 2005 amendments, however, it now appears that
Oklahoma law might permit a license plate expressing support for-
and even funding-abortion-related activities. See supra at 1241.

Sla

Appendix A

choice to support adoption rather than abortion-related
programs.** ORC further acknowledged that it would be
entirely permissible for Oklahoma, consistent with the regime
approved by the Supreme Court in Rust, to require private
organizations (like ORC) that support both adoption and
abortion to create a structurally separate affiliate that does
not engage in abortion activities to receive and account for
governmental funds in order to ensure that public monies
are in no way intermingled with privately raised funds used
for the group’s separate abortion-related activities. Cf. Harris
v. Owens, 264 F.3d 1282, 1293 (10th Cir.2001) (holding that
suit to obtain share of funds from tobacco settlement would
not impermissibly intrude on state’s interest in shaping law-
enforcement remedies where “[t]he state and the tobacco
companies have already determined how much money will
be paid to the state; Harris merely seeks his portion (if any)
of these funds”).**

33. See Rust, 500 U.S. at 198-99, 111 S.Ct. 1759 (upholding
government’s right to issue regulations which required recipients of
grants to engage in abortion-related activity separately from activity
receiving federal funding); see alsa Regan v. Taxation With
Representation of Wash., 461 U.S. 540, 545, 103 S.Ct. 1997, 76
L.Ed.2d 129 (1983) (holding that Congress could exercise its
spending power to prohibit tax-exempt organizations from lobbying
because organizations were free to create separate affiliates which
could receive private funds to support lobbying efforts); accord
United States v. Am. Library Ass'n, Inc., 539 U.S. 194, 123 S.Ct.
2297, 156 L.Ed.2d 221 (2003) (declining to decide unconstitutional
conditions argument but reiterating Rust's teaching that government
may insist that public funds be spent for purposes for which they
were authorized).

34. In Rust, the governmental regulations at issue did “not force
the ... grantee to give up abortion-related speech; they merely
(Cont'd)

52a

Appendix A

Given all this, we are unable to conclude, as defendants
would have us, that the relief ORC seeks represents an
impermissible form of relief under our received Eleventh
Amendment jurisprudence. Of course, at this stage we are
confronted only with a motion to dismiss and thus have taken
plaintiff’s pleadings as true for purposes of our analysis,
drawing all inferences in ORC’s favor. We offer no comment
on whether the ORC will ultimately be able to prove that
Oklahoma’s statutory scheme is constitutionally infirm.
See Verizon Md., 535 U.S. at 646, 122 S.Ct. 1753 (“[T]he
inquiry into whether suit lies under Ex parte Young does not
include an analysis of the merits of the claim.”). And, as
with any other legal defense or immunity, should the facts
developed in discovery take the case in a direction different
from that suggested by the complaint, the trial court remains
free to revisit the applicability of the Eleventh Amendment,
whether at summary judgment or thereafter. That is,
defendants remain free, as discovery progresses, to try to
establish facts suggesting that granting ORC the relief it
requests would operate to reduce the amount of funds flowing
to the state Treasury or otherwise constitute something
functionally equivalent to a retrospective judgment.
Likewise, we offer no comment on whether any other forms
of relief ORC may ultimately seek to add to this suit might

(Cont’d)

require(d] that grantee to keep such activities separate and distinct
from its [government-funded family planning activities]” such that
“the ... grantee [could] continue to perform abortions, provide
abortion-related services, and engage in abortion advocacy; [the
grantee was] simply required to conduct those activities through
programs that are separate and independent from the project that
receives [government] funds.” 500 U.S. at 196, 111 S.Ct. 1759.

53a

Appendix A

or might not be problematic under the Eleventh Amendment.
For our current purposes, we need only conclude, as we do,
that litigation may proceed on the basis of plaintiffs’ amended
complaint. *°

IV

For the reasons explored above, we hold that Oklahoma’s
specialty license plate charges are “taxes under State law”
for the purposes of the TIA and thus affirm the district court’s
dismissal of claims one through four. We also hold that the
prospective relief sought in this case falls within the scope
of Ex parte Young and is not barred by the Eleventh
Amendment; we therefore reverse the district court’s
dismissal of claims five and six and remand those claims for
further proceedings consistent with this opinion. So ordered.

35. On November 12, 2004, the district court entered a
Temporary Re’ ‘,aining Order prohibiting the State from disbursing
any monies from the Choose Life Assistance Fund until July 1, 2005.
On July 6, 2005, the parties entered into an Agreed Order pursuant
to which the State promised to retain ORC’s pro rata share of the
funds available for distribution from the Choose Life Assistance Fund
until the case has been decided on the merits. We need not decide-
and express no views on—whether any disbursement of these funds
would be the functional equivalent to an impermissible retroactive
money judgment because no party to this appeal challenged the
Agreed Order. All that is now before us is a motion to dismiss the
complaint based on the allegations contained therein.

54a

APPENDIX B — OPINION AND ORDER OF THE
UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA
DATED AUGUST 16, 2005

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF OKLAHOMA

Case No. 04-CV-0028-CVE-PJC
HAROLD E. HILL, et al.,
Plaintiffs,
v.
THOMAS E. KEMP, et al.,
Defendants.
OPINION AND ORDER

Now before the Court are the motions to dismiss
(Dkt. ## 46, 47, 50, and 51) filed by defendants Howard H.
Hendrick, in his official capacity as Director of the Oklahoma
Department of Human Services; Thomas E. Kemp, Jerry
Johnson, and Connie Irby, in their official capacities as
Chairman, Vice-Chairman, and Secretary-Member of the
Oklahoma Tax Commission; Brad Henry, in his official
capacity as Governor of the State of Oklahoma; W. Drew
Edmondson, in his official capacity as Attorney General of
the State of Oklahoma; and Scott Meacham, in his official

55a

Appendix B

capacity as Treasurer of and for the State of Oklahoma,' as to
all claims brought against them by plaintiffs in this case.
Plaintiffs Harold E. Hill, Margaret R. and William F. McCright,
John J. McQueen, Rita J. Moskowitz, and Barbara Santee
(collectively, “Motorist Plaintiffs”), and Oklahoma Religious
Coalition for Reproductive Choice Education Fund, Inc.
(“ORC”) challenge the constitutionality of certain Oklahoma
‘Statutes relating to the issuance of specialty license plates and
seek declaratory and injunctive relief under 42 U.S.C. § 1983
for violations of the First and Fourteenth Amendments to the
United States Constitution. Specifically, the Motorist Plaintiffs
complain that certain statutes authorizing the issuance of
specialty license plates, including those displaying the phrases
“Choose Life” or “Adoption Creates Families,” infringe their
exercise of free speech and the protections accorded by the Due
Process and Equal Protection Clauses of the Constitution. ORC
further challenges the statutory eligibility requirements for
programs desiring to receive funds under the Choose Life
Assistance Program which is funded through the specialty plates
program.

I.

Through Okla Stat. tit. 47, §§ 1135.1-1135.6, the
Oklahoma legislature has created a process by which the
Oklahoma Tax Commission (“OTC”) may issue Oklahoma

1. Robert Butkin held the office of Treasurer at the time the
lawsuit was filed and thus was named in the original Complaint (Dkt.
#1) and First Amended Complaint (Dkt. #45). The office of Treasurer
of and for the State of Oklahoma is now held by Scott Meacham.
Because defendant Butkin was sued in his official capacity, Scott
Meacham is automatically substituted as party defendant pursuant
to Fed. R. Civ. P. 25(d)(1). The caption shall be amended accordingly.

56a

Appendix B

motorists, for an additional payment, any of nearly 100
specialty license plates, including the two at issue here. New
specialty license plates — not already authorized by the
legislature — may be created ultimately only by legislative
amendment.

Of the additional $35 amount paid for the Choose
Life plates, eight dollars is deposited into the OTC
Reimbursement Fund, $20 is deposited into the Choose Life
Assistance Program Revolving Fund (“Choose Life Fund”),
and the remaining seven dollars is apportioned among the
various school districts, the state’s General Revenue Fund,
the State Transportation Fund, the counties, cities, and
incorporated towns of the State of Oklahoma, and the Law
Enforcement Retirement Fund pursuant to Okla. Stat. tit. 47,
§ 1104. Okla. Stat. tit. 47, § 1135.5(C). The legislature has
also established the eligibility criteria for receiving monies
from the Choose Life Fund. Okla Stat. tit. 47, § 1104.6. Of
the additional $35 amount paid by Oklahoma motorists for
the Adoption Creates Families plate, eight dollars is deposited
into the OTC Reimbursement Fund, $25 is deposited into a
revolving fund to be used by the Department of Human
Services “for the implementation of the Investing in Stronger
Oklahoma Families Act specifically for created families,”
Okla Stat. tit. 47, § 1135.5(B)(22), and the remaining two
dollars is apportioned pursuant to Okla. Stat. tit. 47, § 1104.
Okla. Stat. tit. 47, § 1135.5(C).

Motorist Plaintiffs allege that they each own automobiles
validly registered in the State of Oklahoma, and each seeks
a specialty license plate expressing support for choice in
family planning. Each went to a local tag agency within the

57a

Appendix B

Northern District of Oklahoma and specifically asked to
purchase a special license plate expressing support for choice
in family planning, but were notified that no such plate exists
in Oklahoma. Motorist Plaintiffs assert that over two years
ago, the Oklahoma Reproductive Health Coalition, of which
plaintiffs Santee and ORC were members, sought passage
of an amendment which would have authorized the issuance
of such a plate. They further assert that the bill containing
this amendment was referred to the Senate Finance
Committee on February 4, 2003, but failed to be passed
during the first or second regular session after its
introduction, and therefore officially died on May 28, 2004.

ORC, which is located in Tulsa, Oklahoma, is a statewide
coalition of religious organizations. Its mission is to support
a woman’s freedom of reproductive choice regardless of her
income, culture, race, class, or ethnic origin. It provides
various services to women, including both adoption and
abortion counseling. Its abortion counseling activities
disqualify it for receipt of funds from the Choose Life Fund
under Okla. Stat. tit. 47, $§ 1104.6(C)(4) and (D). It alleges
that it has applied for such funds but been disqualified on
this ground.

Plaintiffs seek a declaration that the statutory scheme
underlying the specialty license plates at issue in this case is
unconstitutional, and an injunction against any further
implementation or enforcement of the entire specialty license
plate program. In the alternative, Motorist Plaintiffs seek a
declaration that the practice of allowing a specialty plate
expressing one view but not another is unconstitutional, and
an injunction against the continued enforcement of the

58a

Appendix B

legislation implementing the Choose Life and Adoptions
Create Families plates specifically. ORC seeks a declaration
that conditioning the receipt of government funds on
abstention from certain speech is unconstitutional, and an
injunction against the enforcement of Okla. Stat. tit. 47,
§§ 1104.6(C)(4) and (D).

Defendants seek to have the claims against them
dismissed on the grounds, inter alia, that the Tax Injunction
Act, 28 U.S.C. § 1341 (“TIA”), deprives the federal courts
of jurisdiction over these claims and that they have immunity
from suit under the Eleventh Amendment.’

Il.

The Court must first address any challenge to its
jurisdiction. Defendants Kemp, Johnson, and Irby contend
that the TIA bars the suit in its entirety. The TIA prohibits
federal courts 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.”* 28 U.S.C. § 1341. Plaintiffs in

2. Defendants have also raised questions of venue, standing,
and ripeness, but because the Court lacks jurisdiction, it does not
reach those issues. ORC does not challenge any funding restrictions
associated with the Adoption Creates Families plate.

3. The TIA would not serve to deprive federal courts of
jurisdiction if Hibbs v. Winn, 542 U.S. 2288 (2004), can be read to
encompass a suit such as this, where the requested relief would
diminish the flow of state revenues. In Hibbs, plaintiffs were
attacking a tax credit so that the impact of their winning the suit

(Cont'd)

59a

Appendix B

this case have asked the Court to enjoin the collection of
certain assessments prescribed by state law related to
specialty license plates, as well as to enjoin the enforcement
of certain laws disbursing the funds so collected. Although
the TIA is not a bar to jurisdiction over the claims related to
disbursement, it may be a bar to jurisdiction over any
challenge to the collection of the assessments. Accordingly
the Court must first determine whether the extra amounts
charged for specialty plates constitute taxes, for the purposes
of the statute, or whether they are merely regulatory fees.

A.

Whether a state assessment is a tax or a regulatory fee,
for the purposes of the TIA, is a question of federal law.
Marcus v. Kansas, Department of Revenue, 170 F.3d 1305,
i311 (10th Cir. 1999). The label given by a state is not
dispositive of the issue of whether an assessment or other
charge is a tax for the purposes of the Act. /d. “The critical
inquiry focuses on the purpose of the assessment and the
ultimate use of the funds.” Jd. The Tenth Circuit has adopted

(Cont'd)

would have been to return money to the state treasury rather than to
take it away. The Court found the TIA did not bar federal court
jurisdiction. Id. The Hibbs exception to the TIA applies only where
(1) a third party (not a tax payer) files suit, and (2) the suit’s successes
will enrich, not deplete, the government entity’s coffers. /d. at 2288-
90; see also Henderson v. Stalder, 407 F.3d 351, 359 (Sth Cir. 2005).
Therefore, although Motorist Plaintiffs’ claims meet the first prong
for this exception, an injunction against the license plate program’s
operation would reduce state revenues and thus fails to meet the
second prong.

60a

Appendix B

the distinction between taxes and fees laid out by the Fifth
Circuit:

The classic tax sustains the essential flow of
revenue to the government, while the classic fee
is linked to some regulatory scheme. The classic
tax is imposed by a state or municipal legislature,
while the classic fee is imposed by an agency upon
those it regulates. The classic tax is designed to
provide a benefit for the entire community, while
the classic fee is designed to raise money to help
defray an agency’s regulatory expenses.

Marcus, 170 F.3d at 1311 (quoting Home Builders Ass’n of
Miss., Inc. v. City of Madison, Miss., 143 F.3d 1006, 1011
(Sth Cir. 1998)); see also Henderson, 407 F.3d at 356. The
Fourth Circuit has further clarified that “[a] tax is generally
a revenue-raising measure, imposed by a legislative body,
that allocates revenue ‘to a general fund, and [is] spent for
the benefit of the entire community,’ [while a] user fee . . . is
a ‘payment[ ] given in return for a government provided
benefit’ and is tied in some fashion.to the payor’s use of the
service.” Marcus, 170 F.3d at 1311 (quoting Folio v. City of
Clarksburg, W. Va., 134 F.3d 1211, 1217 (4th Cir. 1998));
see also Neinast v. Texas, 217 F.3d 275, 278 (Sth Cir. 2000)
(characterizing fees as charges imposed “(1) by an agency,
not the legislature; (2) upon those it regulates, not the
community as a whole; and (3) for the purpose of defraying
regulatory costs, not simply for general revenue-raising

purposes’’).

6ia

Appendix B

Here, first, although the fees for Oklahoma specialty
plates are collected by the OTC, they are set directly by the
legislature. Second, although the extra assessments for
specialty license plates are paid only by a subset of license
plate purchasers as would support the argument that the
charges are imposed “only upon those [the scheme] regulates”
and therefore constitute fees, all but eight dollars of each
$35 assessment is used to benefit the community as a whole.
That $27 of each $35 assessment is completely unrelated to
the administration of motor vehicle licensing and registration
law underscores the revenue raising purpose of the statutory
scheme. The argument that revenue from the specialty plate
assessments does not serve the general community welfare
because it is earmarked for specially eligible recipient
organizations is unpersuasive because the appropriate focus
is not upon where the funds are eventually deposited, but
upon the purpose of the assessment and upon the eventual
use to which the funds are put. The Oklahoma legislature
designated that the specialty license plate assessments (above
the $8 handling charge) be used for a wide range of purposes,
including education, wildlife conservation, and state, city,
and county road and highway maintenance, as well as, in the
case of these two particular plates, adoption support. None
of these purposes is regulatory as to the purchasers of
specialty plates, and although plaintiffs’ view of the public
benefit served by these expenditures might differ from that
of the Oklahoma legislature, it does not transform the extra
assessments into fees.

Plaintiffs cite Marcus for the proposition that “special
license plate fees did not constitute a tax for the purposes of
the Tax Injunction Act.” Plaintiffs’ Response (Dkt. # 56) at

62a

Appendix B

14. However, although the Tenth Circuit in Marcus ultimately
found the extra assessment for disabled parking placards to
be a regulatory fee rather than a tax, the purpose and ultimate
use of that assessment is easily distinguished from the
purpose and use of the extra assessments in this matter. The
Kansas statutory scheme under consideration in Marcus
expressly provided that the assessment be used primarily to
cover the administration costs of the motor vehicle
registration laws. /d. at 1311. Here, of the additional $35
assessment at issue in the case of the Choose Life plate, only
$8 is being used to pay expenses incidental to administering
motor vehicle laws. The majority ($20) is a legislatively
designated amount, contributed to a legislatively established
fund created to assist organizations that provide services to
pregnant women committed to placing their children for
adoption. Okla. Stat. tit. 47, §§ 1135.5(B)(23) and 1135.5(C).
The legislature even established the eligibility criteria for
receiving monies from the Choose Life Fund. Okla Stat. tit
47, § 1104.6. The remainder goes into legislatively
established general funds, clearly unrelated to the
administration of motor vehicle registration laws.

Similarly, the majority of the additional amount paid by
Oklahoma motorists for the Adoption Creates Families plate
is required, by statute, to be deposited into a revolving fund
to be used by the Department of Human Services “for the
implementation of the Investing in Stronger Oklahoma
Families Act specifically for created families.” Okla Stat.
tit. 47, § 1136.81.

Even though eight dollars of each $35 extra assessment
is apportioned to the OTC for the administration of motor

63a

Appendix B

vehicle registration laws, and is therefore regulatory in nature,
the vast majority of each assessment goes either to a specially-
legislated fund unrelated to motor vehicle registration or is
distributed among legislatively established general funds
unrelated to motor vehicle laws. Accordingly, the Court finds
that the amounts collected for the specialty plates in this case
are taxes rather than regulatory fees.

B.

Because the Court has found the assessments at issue to
constitute taxes rather than regulatory fees, it must now turn
to the question of whether a “plain, speedy and efficient
remedy may be had” in Oklahoma courts. 28 U.S.C. § 1341.
“The Supreme Court has specifically held that the words
‘plain, speedy and efficient remedy’ are to be given a purely
procedural interpretation. A state remedy is adequate if it
meets ‘certain minimal procedural criteria,’ which include
an opportunity to raise the desired legal objections with the
eventual possibility of Supreme Court review of that claim.”
Brooks v. Nance, 801 F.2d 1237, 1240 (10th Cir. 1986) (citing
Carrier Corp. v. Perez, 677 F.2d 162, 165-66 (1st Cir. 1982)
(quoting Roswell v. LaSalle National Bank, 450 U.S. 503,
514 (1981) (upholding state court refund procedure because
it “provides the taxpayer with a ‘full hearing and judicial
determination’ at which she may raise any and all
constitutional objections to the tax’’)).

The Tenth Circuit has held that, for purposes of section
1341, Oklahoma provides an adequate remedy to challenge
the lawfulness of its taxing policies and practices. Brooks,
801 F.2d at 1240 (citing Cities Service Gas Co. v. Oklahoma

64a

Appendix B

Tax Commission, 656 F.2d 584, 587-88 (10th Cir. 1981), and
Bunte Candies, Inc. v. Cartwright, 508 F. Supp. 229, 236
(W.D. Okla.1981)). Taxpayers may apply for a hearing before
the OTC to challenge any incorrect assessment of taxes. Okla.
Stat. tit. 68, § 207(c). Decisions of the OTC may be appealed
directly to the Supreme Court of Oklahoma. Okla. Stat. tit
68, § 225(A). Alternatively, a taxpayer may pay the disputed
tax and institute an action in any state court having
jurisdiction over the parties and the subject matter. Okla.
Stat. tit. 68, § 226. Taxpayers also have the option of applying
for injunctive and declaratory relief in the Oklahoma state
courts. Okla. Stat. tit. 12, §§ 1397, 1651-1657. Moreover,
federal civil rights claims may be brought in the state court
system. See, e.g., Willbourn v. City of Tulsa, 721 P.2d 803,
805 (Okla. 1986) (section 1983 available in state court even
though state remedy time-barred). For these reasons, the
Court finds that Motorist Plaintiffs have a plain, speedy, and
efficient remedy in the state courts similar to that sought here.

Because the assessments at issue are taxes, and a plain,
speedy, and efficient remedy may be had in Oklahoma courts
for any rights violation caused by the imposition of such
taxes, the TIA bars this Court’s jurisdiction over any claims
related to the portion of the statutory scheme that authorizes
the issuance of the specialty plates. This jurisdictional bar
applies with respect to all plaintiffs. For these reasons, the
first, second, third, and fourth claims for relief of plaintiffs’
First Amended Complaint (Dkt. # 45) must be dismissed.
Because the fifth and sixth claims for relief involve the
disbursement of funds rather than the collection of funds,
the Court finds that the TIA does not bar the Court’s
jurisdiction as to them.

65a

Appendix B
Il.

As to the remaining claims, defendants also argue that
they have immunity from suit under the Eleventh
Amendment. The Eleventh Amendment provides:

The Judicial power of the United States shall not
be construed to extend to any suit in law or equity,
commenced or prosecuted against one of the
United States by Citizens of another State, or by
Citizens or subjects of any Foreign State.

The United States Supreme Court has interpreted the
Eleventh Amendment to apply to federal question suits
against a state brought by its own citizens. Idaho v. Coeur
d’Alene Tribe, 521 U.S. 261, 267-68 (1997). There are
exceptions to Eleventh Amendment immunity, but plaintiffs
rely instead on the doctrine set forth in Ex parte Young, 209
U.S. 123 (1908). “Although citizens may not generally sue
states in federal court under the Eleventh Amendment, the
Ex parte Young doctrine has carved out an alternative,
permitting citizens to seek prospective equitable relief for
violations of federal law committed by state officials in their
official capacities.” Lewis v. New Mexico Dep’t of Health,
261 F.3d 970, 975 (10th Cir. 2001) (citing Ex parte Young,
209 U.S. at 159-60).

The Tenth Circuit has outlined a four-part test for
application of the Ex parte Young exception: (1) the plaintiff
is suing state officials, with an enforcement connection to
the challenged statute, rather than the state itself; (2) the
plaintiff has alleged a non-frivolous violation of federal law;

66a

Appendix B

(3) the plaintiff seeks prospective equitable relief, rather than
retroactive monetary relief from the state treasury; and
(4) the suit does not implicate “special sovereignty interests.”
Harris v. Owens, 264 F.3d 1282, 1290-94 (10th Cir. 2001);
Elephant Butte Irrigation Dist. of N. M. v. Dep’t of the
Interior, 160 F.3d 602, 609 (10th Cir. 1999). In this case,
plaintiffs have alleged a non-frivolous violation of their
constitutional right to free speech under the First and
Fourteenth Amendments. The Tenth Circuit has clarified that
a court assessing this factor “need only determine whether
Plaintiffs state a non-frivolous, substantial claim for relief
against state officials that does not merely allege a violation
of federal law ‘solely for the purpose of obtaining
jurisdiction,’” and that the inquiry does not go to the merits
of plaintiffs’ claim. Elephant Butte, 160 F.3d at 610 (quoting
Larson v. Domestic & Foreign Commerce Corp., 337 U.S.
682, 690 n.10 (1949)); see also Harris, 264 F.3d at 1289.
Also, plaintiffs seek prospective equitable relief: specifically,
injunctive relief prohibiting defendants from enforcing
certain Oklahoma statutes that they assert unconstitutionally
restrict their speech. Thus, there remain two issues:
(1) whether the state officials named as defendants have a
sufficient enforcement connection with the challenged
statutes to invoke the Ex parte Young exception; and
(2) whether any “special sovereignty interest” is implicated
by ORC’s claims.

A.

Defendants Hendrick, Kemp, Johnson, and Irby do not
dispute a sufficient enforcement connection to the statute
for the purposes of the Ex parte Young exception. The Court

67a

Appendix B

agrees that there is a sufficient connection with respect to
these defendants. Defendants Meacham and Henry each argue
that they are entitled to Eleventh Amendment immunity
because they lack sufficient enforcement connection to the
challenged statutes.* “The fact that the state officer, by
virtue of his office, has some connection with the
enforcement of the act, is the important and material fact,
and whether it arises out of the general law, or is specially
created by the act itself, is not material so long as it exists.”
Ex parte Young, 209 U.S. at 157.

Defendant Henry, as Governor of Oklahoma, is required
by the Oklahoma Constitution to “cause the laws of the State
to be faithfully executed.” Okla. Const. art. 6, § 8. The
connection is “not tangential,” and is sufficient to divest him
of Eleventh Amendment immunity. Reproductive Services v.
Keating, 35 F. Supp. 2d 1332, 1334 (N.D. Okla. 1998) (citing
Allied Artists Pictures Corp. v. Rhodes, 473 F. Supp. 560,
568-69 (S.D. Ohio 1979), aff'd, 679 F.2d 656 (6th Cir.
1982)); see also Harris, 264 F.3d at 1290 (Colorado Governor
not entitled to Eleventh Amendment immunity in connection
with enforcement of Colorado’s Medicaid law). Accordingly,
the Court finds that defendant Henry is not entitled to
Eleventh Amendment immunity on this ground.

4. Plaintiffs do not oppose defendants’ motion to dismiss
W.A. “Drew” Edmondson (Attorney General for the State of
Oklahoma) as a party defendant in this case on the ground of Eleventh
Amendment immunity. See Plaintiffs’ Response (Dkt. # 56), at 2
n.2. Accordingly, ORC’s claims against defendant Edmondson are
dismissed on this ground.

68a

Appendix B

Defendant Meacham has a direct connection to the
Choose Life Fund statute in that the state treasury is required,
by the statute, to create the fund, and to maintain it as a
continuing fund. Okla. Stat. § 1104.6(B). However, as
Treasurer, he has no direct enforcement connection with the
challenged portions of that statute, sections 1104.6(C)(4) and
(D). In fact, if he were to be enjoined from enforcing his
portion of the statute, plaintiff ORC would be unable to claim
the relief it seeks, because there would be no fund from which
it could receive money, even if it were eligible. For this
reason, the Court finds that defendant Meacham is entitled
to Eleventh Amendment immunity on this ground as to
ORC’s claims based on Okla Stat. tit. 47, §§ 1104.6(C)(4)
and 1104.6(D).

Accordingly, the Court finds that, although defendants
Henry, Hendrick, Kemp, Johnson, and Irby have sufficient
enforcement connection to the remaining challenged statutes,
ORC’s claims should be dismissed as to defendant
Meacham, on the ground of Eleventh Amendment immunity
because he lacks a sufficient enforcement connection.

B.

“Because of the important interests of federalism and
State sovereignty implicated by the Ex parte Young doctrine,
the rule has its limits.” ANR Pipeline Company v. LaFaver,
150 F.3d 1178, 1188 (10th Cir.1998). The Ex parte Young
doctrine will not apply where the requested relief could be
said “impermissibly [to] intrude upon the state’s dignity and
Status as a sovereign government.” Harris, 264 F.3d at 1293.
“Forms of prohibited relief have included money paid from

69a

Appendix B

the public treasury, Edelman v. Jordan, 415 U.S. 651, 663
(1974), and a quiet title action, Coeur d'Alene Tribe, 521 U.S.
at 281-82.” Nelson v. Geringer, 295 F.3d 1082, 1098 (10th Cir.
2002). It is uncontroverted that the taxing power is a core
sovereignty interest. See ANR Pipeline, 150 F.3d at 1193
(“Congress has made it clear in no uncertain terms that a state
has a special and fundamental interest in its tax collection
system.”). Similarly, “an attempt to force the allocation of state
funds implicates core sovereign interests.” Barton v. Summers,
293 F.3d 944, 951 (6th Cir. 2002) (dealing with the allocation
of tobacco settlement proceeds).

The Tenth Circuit has recognized an exception to the rule
that a state’s spending power is one of its core sovereign interests
in the case of welfare programs at least partially funded by the
federal government. See Joseph A. ex rel. Corrine Wolfe v.
Ingram, 275 F.3d 1253, 1260-61 (10th Cir. 2002) (“a state's
interest in administering a welfare program at least partially
‘funded by the federal government is not such a core sovereign
interest as to preclude the application of Ex parte Young.)
(quoting J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1287 (10th
Cir. 1999)). Further, although the Tenth Circuit, in addressing
essentially the same facts as the Sixth Circuit in Barton,
concluded that the Eleventh Amendment did not bar smokers’
suit against the State of Colorado for disposition of tobacco
settlement funds, it emphasized that the funds at issue had not
yet been received by the state and that plaintiffs sought
prospective relief in the form of an injunction preventing deposit
of the funds into the state treasury on the grounds that the
smokers had a legal right to a portion thereof. Harris, 264 F.3d
at 1291-92. There is no federal funding or competing property
right that would so serve to compromise the state’s sovereign
spending power in this case.

70a

Appendix B

Plaintiffs argue that the State’s spending power is not
implicated here because ORC seeks only to strike the
eligibility criteria in section 1104.6 which it perceives to
impose unconstitutional limitations on the receipt of
government funds. Plaintiffs’ Response (Dkt. # 56) at 15.
However, “the Supreme Court's ‘unconstitutional conditions’
jurisprudence has said that the state may exercise its power
to spend in order to discourage protected activity.”
R.J. Reynolds Tobacco Co. v. Bonta, 272 F. Supp. 2d 1085,
1109 (E.D. Cal. 2003) (citing Maher v. Roe, 432 U.S. 464
(1977) (holding that the government “may make a value
judgment favoring childbirth over abortion, and...
implement that judgment by the allocation of public funds’’),
and Rust v. Sullivan, 500 U.S. 173, 192-93 (1991) (sustaining
a prohibition on abortion-related advice by recipients of
federal funds designated for family-planning counseling)).
“A refusal to fund

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_1412%3A2. Public record. Not legal advice.