Petition for Writ of Certiorari — Nivens v. Gilchrist
Supreme Court brief2003
Ask Donna
What actually matters in this document.
Text
Supreme Court,U.S. =
FILED 1
021477 apr 4 2003
NQ@PPOIRE OF THE CLERK
IN THE
Supreme Court of the Wnited States
KENNETH SCOTT NIVENS,
GLEN LANCE MANERS,
TERRI LYNN STORK,
Petitioners,
v.
PETER S. GILCHRIST, I,
Respondent.
On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES CourRT OF APPEALS
FOR THE FouRTH CIRCUIT
mneniiel
mtn —
PETITION FOR A WRIT OF CERTIORARI
AARON E. MICHEL
Attorney for Petitioners
3736 Surry Ridge Court
Charlotte, NC 28210-6921
(704) 451-8351
179986 g
COUNSEL PRESS
(800) 274-3321 * (800) 359-6859
i
QUESTION PRESENTED
In 1997 North Carolina’s highest couit rejected a claim
‘that an excise tax on the possession of unauthorized
substances by drug dealers is a criminal penalty subject to
procedural safeguards and democratic constraints guaranteed
by the U.S. Constitution. In 1998, the Fourth Circuit
respectfully disagreed and held that the drug tax is a criminal
penalty that triggers these constitutional rights. In 2000, the
Fourth Circuit held that habeas relief was not available
because North Carolina’s view of the drug tax was reasonable,
albeit incorrect. The question presented is whether a colorable
double jeopardy claim is an extraordinary circumstance
justifying federal court intervention pursuant to the Civil
Rights Act of 1864 in a state prosecution to the extent
necessary to determine the merits of the federal double
jeopardy claim where the state’s highest court has already
taken the position that the drug tax is not a criminal penalty
and the claimants facing trial have paid the drug tax?
il
TABLE OF CONTENTS
Chapataons FYGMMMROE 3.0 i566 sc kk deca cew ees ioe
Tee WE CA 8 oo 5 eo each eee ee
TODIG OF COG AURORE 65 iv i oe ceicseixe ces
FOE OT AMINE kg soo sia S005 pears eee
Cpt TN oo a6 50a een ce eee
Statermedt OT FUVIOG ok 5k kos Saosin a eaee
Constitutional and Statutory Provisions Involved . .
srabonnllt OF Git COE oo ict tina cues eeentes
Reasons for Granting the Petition ..............
A. The Fourth Circuit’s Decision Conflicts with
Decisions of Other Circuits. .............
B. The Court of Appeal’s Decision Is Incorrect.
C. The Court of Appeal’s Decision May Cause
Serious Adverse Consequences. ..........
eo i retrae Re a rs
Page
10
11
iil
TABLE OF CITED AUTHORITIES
Cases:
Associated General Contractos of Ohio, Inc. Vv.
Drabik, 214 F.3d 730 (6th Cir. y. | | rie
Bongiorno v. Lalomia, 851 F. Supp. 606 (D.N.J.),
aff'd without opinion, 39 F.3d 1168 (3d Cir. 1994)
eer ete hk eR ee TESS ES RT
ee eee ene bees oot EF ETERS SS ES
Canatella v. State of California, 304 F.3d 843 (9th
EE ska cana tankers creeeneer ee *
City of Los Angeles v. Lyons, 461 U.S. 95 (1983) ..
Drayton v. Hayes, 589 F.2d 117 (2d Cir. 1979) .---
Dubinka v. Judges of Superior Court, 23 F.3d 218
SMC ye ayes -< rs crete sheers ht
Duty Fee Shop v. Administracion De Terrenos De
Puerto Rico, 889 F.2d 1181 (1st Cir. 1989) ....
Ex parte Lange, 85 U.S. 163 (1873) ..--+-+ eee:
Gilliam v. Foster, 75 F.3d 881 (4th Cir. 1996) ...-
Hansel v. Town Court of Springfield, N.Y., 56 F.3d
Oe Oe WOOD «reser rte tte
Page
nN
tN
iv
Cited Authorities
Page
Helvering v. Mitchell, 303 U.S. 391 (1938) ....... 9
Hudson v. United States, 522 U.S. 93 (1997) ..... 8,9
Leonard v. Hammond, 804 F.2d 838 (4th Cir. 1986)
Pee eee eT eT er ry Ee eee Fame 2
Lynn v. West, 134 F.3d 582 (4th Cir. 1998) ....... 3, 4,9
Martin Marietta Corp. v. Md. Comm’n on Human
Rel., 38 F.3d 1392 (4th Cir. 1994) ............ 2
Mastin v. Fellerhoff, 526 F. Supp. 969 (S.D. Ohio
PEE ext iN ees Cesta caer 7
McKinstry v. Genesee County Circuit, 669 F. Supp.
Ot Cea, MO RTE 5A LS h Oh as akrese 7
Middlesex County Ethics Comm. v. Garden State Bar
MSS R457 UG. SEW COORD ook veo wediews ows 10
Milligan v. State, 135 N.C. App. 781 (1999), review
denied, 351 N.C. 358, cert. denied, 531 U.S. 819
CEOED daN wkd ce uwrererery cee che eee 3
Prairie Band of Potawatomi Indians v. Pierce, 253
mee ROO CO Ca Be + ocd Sa hee ence ee 7
Riley v. Simmons, 45 F.3d 764 (3d Cir. 1995) ..... 7
Vv
Cited Authorities
Page
Schlager v. Phillips, 166 F.3d 439 (2d Cir. 1999) .. 7
State v. Adams, 132 N.C. App. 819, review denied,
350 N.C. 836, cert. denied, 528 U.S. 1022 (1999)
Oe ae pee oe ee eas ee Cone ee? 3
State v. Ballenger, 123 N.C. App. 179 (1996), aff'd
per curiam, 345 N.C. 626, cert. denied, 522 U.S.
S17 CID). 55 ins concen seer ee en 3
State v. Creason, 123 N.C. App. 495 (1996), aff'd
per curiam, 346 N.C. 165 (1997) ...--- eee eee 3
State v. Crenshaw, 144.N.C. App. 574 (2001) . v0 3
State v. Joseph, 92 N.C. App. 203 (1988) ........ 10
State v. Manning, 139 N.C. App. 454 (2000) ..... 3
State v. Morgan, 118 N.C. App. 461 (1995) .....- 3
State v. Shoff, 118 N.C. App. 724 (1995) . 205s ees 10
State v. Wambach, 136 N.C. App. 842, review denied,
353 N.C. 273, aff'd, 353 N.C. 449 (2000) ..... 3
State v. Woods, 136 N.C. App. 386, review denied,
351 N.C. 370 (2000) *.....-- 2 seer rere rae 3
Tolbert v. City of Memphis, 568 F. Supp. 1285 (W.D.
NE) SOU Ss a a ae 7
vi
Cited Authorities
Page
United States v. Anderson, 215 F.3d 1321, 2000 WL
ee FO ee ere ere 4
United States v. Halper, 490 U.S. 435 (1989) ..... 9
United States v. Hudson, 522 U.S. 93 (1997) ..... 4,9
United States v. Johnson, 37 Fed. Appx. 599, 2002
WL 384134 (4th Cir. 2002) ................. 3
Vick v. Williams, 233 F.3d 213 (4th Cir. 2000) .... 3,4
W.P. v. Poritz, 931 F. Supp. 1187 (D.N.J. 1996) ... 7
Younger v. Harris, 401 U.S. 37 (1971) ... 1, 4, 5, 6, 7, 8, 10
Statutes:
AALS. § TR UEOD ss SR ato ee es 10
iA ii. ESO os icine kb oe nae eee 10
Se Ries | SEOMEE i eek aes On se ee eee ]
QSL. 1608.2 11
vil
TABLE OFAPPENDICES
Page
Appendix A — Opinion Of The United States Court
Of Appeals For The Fourth Circuit Dated
And Filed February 11, 2003 ...--+-+++++++7: la
Appendix B — Order Of The United States District
Court For The Western District Of North Carolina,
Charlotte Division Dated And Filed February 4,
I dg aaah NARs VERON TED SIRE ER IE 25a
Appendix C — Order Of The United States Court
Of Appeals For The Fourth Circuit Denying
Petition For Rehearing Dated And Filed March
Tie Oe Le a acaba 35a
Appendix D — Constitutional Provisions And
Statutes Involved ......---+-eercrerrtttt 37a
l
Nivens, Maners, and Stork respectfully petition for a writ
of certiorari to review the judgment of the United States Court
of Appeals for the Fourth Circuit in this case.
OPINIONS BELOW
The opinion of the court of appeals (App., infra, 1a-24a)
is reported at 319 F.3d 151 (4th Cir. 2003). The opinion of
the district court (App., infra, 25a-34a) is unreported.
STATEMENT OF JURISDICTION
The judgment of the court of appeals was entered on
February 11, 2003. A petition for rehearing was denied on
March 11, 2003 (App., infra, 35a-36a). The jurisdiction of
this Court is invoked under 28 U.S.C. § 1254(a).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
The pertinent constitutional and statutory provisions are
set forth in the appendix. App., infra, 37a-49a.
STATEMENT OF THE CASE
1. The Younger abstention doctrine allows the federal
court to abstain from intervening in a state proceeding, except
under extraordinary circumstances. Younger v. Harris, 401
U.S. 37 (1971). The federal court takes into consideration
equity, comity, and federalism in determining whether
abstention is advisable. City of Los Angeles v. Lyons, 461
U.S. 95, 112 (1983).
2
Under federal circuit law, the court’s decision to abstain
is reviewed for abuse of discretion. Martin Marietta Corp.
v. Md. Comm’n on Human Rel., 38 F.3d 1392, 1396 (4th Cir.
1994). Under federal circuit law, abstention is appropriate
where the availability of a remedy in the state proceeding
depends on the state’s highest court reversing itself. Leonard
v. Hammond, 804 F.2d 838, 840-41 (4th Cir. 1986). See also
Duty Fee Shop v. Administracion De Terrenos De Puerto
Rico, 889 F.2d 1181, 1183 (1st Cir. 1989); Dubinka v. Judges
of Superior Court, 23 F.3d 218, 224 (9th Cir. 1994); Hansel
v. Town Court of Springfield, N.Y., 56 F.3d 391, 394 (2d Cir.
1995).
In Gilliam v. Foster, 75 F.3d 881 (4th Cir. 1996)
(en banc), the court of appeals held that a state defendant’s
double jeopardy claim “is an extraordinary circumstance
warranting federal court equitable intervention” in the state
criminal proceeding. /d. at 904. The state trial court had
declared a mistrial and had begun retrial when the federal
appellate court ordered a stay to consider whether the second
trial violated the federal double jeopardy right. The federal
court of appeals stated that a colorable double jeopardy
claim was a “preeminent example of one of the very few
extraordinary circumstances justifying federal court
intervention in a pending state criminal proceedings.” Jbid.
2. On July 8, 2000, Nivens, Maners, and Stork were
arrested and ecstasy pills seized. The North Carolina
Department of Revenue assessed drug taxes on the ecstasy
possessed by Nivens, Maners, and Stork and obtained a
judgment against them. The tax lien was promptly satisfied.
The State then indicted Nivens, Maners, and Stork for various
offenses related to the possession of the ecstasy that was
taxed.
3
Nivens, Maners, and Stork filed a federal lawsuit under
the Civil Rights Act of 1864 seeking to enforce their federal
constitutional right against double jeopardy by means ofa
preliminary and permanent injunction prohibiting the state
prosecutor from prosecuting them and all similarly situated
individuals. They alleged in their complaint that extraordinary
circumstances existed in that there is a conflict between
federal and state law as to the North Carolina drug tax.
Under North Carolina law, the North Carolina drug tax
is not a criminal penalty. See State v. Crenshaw, 144 N.C.
App. 574 (2001); State v. Manning, 139 N.C. App. 454
(2000); State v. Wambach, 136 N.C. App. 842, review denied,
353 N.C. 273, aff'd, 353 N.C. 449 (2000); State v. Woods,
136 N.C. App. 386, review denied, 351 N.C. 370 (2000);
Milligan v. State, 135 N.C. App. 781 (1999), review denied,
351 N.C. 358, cert. denied, 531 U.S. 819 (2000); State v.
Adams, 132 N.C. App. 819, review denied, 350 N.C. 836,
cert. denied, 528 U.S. 1022 (1999); State v. Creason, 123
N.C. App. 495 (1996), aff'd per curiam, 346 N.C. 165 (1997);
State v. Ballenger, 123 N.C. App. 179 (1996), aff'd per
curiam, 345 N.C. 626, cert. denied, 522 U.S. 817 (1997);
State v. Morgan, 118 N.C. App. 461 (1995). Changes to the
drug statute are not analyzed in state court because of binding
precedent from the state’s highest court holding that the |
original drug tax was not a criminal penalty. See, e.g., State
v. Crenshaw, supra.
Under federal law, the North Carolina drug tax is a
criminal penalty. See Vick v. Williams, 233 F.3d 213, 219 n.4
(4th Cir. 2000) (1996 drug tax assessment) (“the continuing
validity of our decision in Lynn v. West is not called into
question by our decision today.”); United States v. Johnson,
37 Fed. Appx. 599, 2002 WL 384134 (4th Cir. 2002)
4
(unpublished) (1997 drug tax assessment); United States v.
Anderson, 215 F.3d 1321, 2000 WL 620308 (4th Cir. 2000)
(table) (1996 conviction); Lynn v. West, 134 F.3d 582 (4th
Cir. 1998). Lynn v. West rejected the conclusions of the state’s
highest court based upon an analysis of the drug tax under
this Court’s precedent in United States v. Hudson and
concluded that “although nominally labeled an ‘excise tax,’
the Drug Tax is enforced only against those arrested for drug
crimes, and — unlike routine license and excise taxes —
payment of the tax confers no legal privilege to possess or
sell.” Lynn, supra, at 592 n.10. The amended tax rate and
other adjustments to the tax statute do not alter the essential
character of the drug tax.
The Fourth Circuit does not afford state defendants a
federal habeas remedy with regard to the drug tax issue once
state remedies have been exhausted because the state view
of the drug tax is reasonable. Vick v. Williams, 233 F.3d 213
(4th Cir. 2000).
In the instant case, the district court granted the
respondent’s motion to dismiss under the Younger abstention
doctrine. The district court reasoned that the plaintiffs’ double
jeopardy claim did not involve extraordinary circumstances
because the plaintiffs had not yet suffered a criminal trial,
double jeopardy had not yet attached because a jury had not
yet been sworn, and the tax assessment was not a prosecution.
3. The court of appeals affirmed. The court of appeals
declined to reach the double jeopardy claim. The court of
appeals also declined to resolve the issue of whether
abstention is appropriate after Nivens, Maners, and Stork
exhaust their state remedies.
5
The court of appeals held that a colorable double
jeopardy claim is not an extraordinary circumstance
exception to the Younger abstention doctrine and that the
likelihood of success of the claim is the appropriate focus of
the inquiry. The court of appeals applied a balancing test
similar to that used to determine whether to grant a temporary
stay and preliminary injunction pending resolution of the
merits of a case. The court of appeals stated that there was a
substantial likelihood that the petitioners’ prosecution was
not a violation of double jeopardy because of a 1995
amendment that reduced the tax rate and because the tax
assessment was part of the pending proceeding and thus not
a prior proceeding implicating double jeopardy and did not
involve a prior trial.
The court of appeals stated that the petitioner’s reliance
on Gilliam v. Foster for the proposition that a colorable
double jeopardy claim is an extraordinary circumstance was
misplaced. The court emphasized that in Gilliam there was a
state trial followed by an attempt at a second state trial. The
court explained that the likelihood of success standard it
applied in Gilliam to decide whether a temporary stay was
appropriate was the approach prescribed in Younger in
determining whether to abstain.
6
REASONS FOR GRANTING THE PETITION
The court of appeals held in this case that the district
court has discretion to abstain from asserting jurisdiction
granted under the Civil Rights Act of 1864 for persons who
have raised a colorable sanctions-variety double jeopardy
claim that will be summarily rejected in the state criminal
proceeding due to binding precedent from the state’s highest
court. That holding conflicts with decisions in other circuits.
The Fourth Circuit’s decision is also incorrect. The Younger
abstention doctrine is a legal standard for evaluating equity,
comity, and federalism that is subject to de novo review rather
than a matter of discretion. Contrary to the court of appeal’s
view, the doctrine cannot serve to bind federal courts to state
precedents nor eliminate a federal statutory remedy for
colorable claims of sanction-variety double jeopardy claims.
Forcing a trial upon the previously sanctioned petitioners,
state court, jurors, witnesses, and prosecutor, before
addressing the merits of the double jeopardy claim, would
be inefficient. Forcing the previously sanctioned petitioners
to take their case through the state system, ultimately petition
the state’s highest court and then this Court, and have no
federal habeas remedy because the state’s interpretation of
the federal double jeopardy right is reasonable albeit in error
denies the petitioners their rights that Congress sought to
protect under the Civil Rights Act and that federalism was
designed to safeguard. Review by this Court is therefore
warranted.
7
A. The Fourth Circuit’s Decision Conflicts with
Decisions of Other Circuits.
The Fourth Circuit takes an expansive view of the
Younger abstention doctrine that is in conflict with other
circuits in two ways. First, it is deferential to the district
court, reviewing the decision whether to abstain for abuse of
discretion. Second, it binds the federal court to state court
precedent and eliminates a federal statutory remedy for the
sanction-variety of double jeopardy claim, by requiring the
claimant to take the claim through the state system and
ultimately petition the state’s highest court to exercise
discretionary review and reverse itself and this Court for
discretionary review.
Other circuits apply a de novo standard of review.
See Canatella v. State of California, 304 F.3d 843, 850
(9th Cir. 2001); Prairie Band of Potawatomi Indians v.
Pierce, 253 F.3d 1234, 1242 (10th Cir. 2001); Associated
General Contractos of Ohio, Inc. v. Drabik, 214 F.3d 730,
739 (6th Cir. 2000); Schlager v. Phillips, 166 F.3d 439, 441
(2d Cir. 1999); Brooks v. New Hampshire, 80 F.3d 633, 637
(1st Cir. 1996). See also Riley v. Simmons, 45 F.3d 764, 770
(3d Cir. 1995) (district court’s analysis is subject to de novo
review).
In other circuits, abstention is not appropriate where
binding state precedent makes submitting the federal rights
to a state forum futile. WP. v. Poritz, 931 F. Supp. 1187,
1197 (D.N.J. 1996); Bongiorno v. Lalomia, 851 F. Supp. 606,
613 (D.N.J.), aff'd without opinion, 39 F.3d 1168 (3d Cir.
1994); Tolbert v. City of Memphis, 568 F. Supp. 1285, 1289-
90 (W.D. Tenn. 1983); Mastin v. Fellerhoff, 526 F. Supp.
969, 971 (S.D. Ohio 1981); McKinstry v. Genesee County
Circuit, 669 F. Supp. 801, 805-06 (E.D. Mich. 1987).
8
B. The Court of Appeal’s Decision Is Incorrect.
The court of appeal’s decision conflicts with this
Court’s most recent sanctions-variety double jeopardy case.
In Hudson v. United States, 522 U.S. 93, 95 (1997), an
“administratively imposed” sanction followed by indictment
“for essentially the same conduct” raised a colorable double
jeopardy claim that was determined before trial on the
indicted charges. An “administratively imposed” sanction
followed by indictment “for essentially the same conduct”
raises a colorable double jeopardy claim that should be
determined before trial on the indicted charges. Hudson v.
United States, supra, at 95 (interlocutory appeal before trial).
Under Hudson, jeopardy attached when the sanction was
imposed, thereby giving rise to the question of whether the
sanction was a criminal penalty that shielded the defendant
from the subsequent prosecution. See also Ex parte Lange,
85 U.S. 163, 176, 178-79 (1873) (payment of the fine
precluded imposition of prison term). The lack of any trial
concerning the sanction was irrelevant. _
Once the state’s highest court has staked out its position
on the issue, “there is no further bar to the assumption of
federal jurisdiction, for the deference owed to the state
judicial system demanded by the principles of comity and
federalism has been paid.” Drayton v. Hayes, 589 F.2d 117,
120 (2d Cir. 1979). This Court in Younger v. Harris was not
faced with a prior decision by the state’s highest court and
did not look to the likelihood of success on the merits of the
federal constitutional claim in determining whether to abstain
from considering the merits of the claim. 401 U.S. 37 (1971).
The inquiry, instead, is into the status of the issue under state
law so as to accord the state the opportunity to interpret its
own statute under the federal law at issue. In the instant case,
9
that inquiry shows that the state has been afford the
opportunity to interpret its drug tax and has staked out its
position on the federal double jeopardy claim. The interests
of comity and federalism have been satisfied.
The court of appeal’s conclusions as to the amended drug
tax rest primarily on the tax rate and secondarily on the belief
that the amended drug tax is neither conditioned on a criminal
- offense nor evidence of guilt in a subsequent prosecution.
The tax rate was a significant factor under United States v.
Halper, 490 U.S. 435 (1989), but Halper was abrogated by
this Court in United States v. Hudson, 522 U.S. 93, 95 (1997).
The court of appeals does not explain how the possession
that triggers the drug tax is not also a criminal offense, thereby
conditioning the tax on a criminal offense. The court of
appeals did not analyze either of the two secondary
amendments under the Kennedy/Ward factors applied in Lynn
to the drug tax. There is no case law to support the proposition
that excluding from evidence a prior conviction or sanction
permits a second conviction for the same offense.
The court of appeals disregarded this Court’s reasons in
Hudson v. United States for overruling the “sanctions actually
imposed” method used in Halper, namely, that requiring the
defendant to “proceed through a trial to judgment” on a civil
sanction to find out what the actual sanction is “flies in the
face of the notion that the Double Jeopardy Clause forbids
the government from even ‘attempting a second time to
punish criminally.’ ” Hudson v. United States, 522 U.S. 93,
101-102 (1997) (quoting Helvering v. Mitchell, 303 U.S. 391,
399 (1938).
10
C. The Court of Appeal’s Decision May Cause Serious
Adverse Consequences.
The court of appeal’s decision has the potential to create
serious adverse consequences. The court has taken the ,
Younger abstention doctrine in an unexpected direction that
grafts a likelihood of success standard to the doctrine and
creates a category of federal constitutional rights — the
sanction-variety of double jeopardy claims — for which no
federal statutory remedy is available.
The court of appeal’s decision disregards this Court’s
reasons in affirming abstention in Middlesex County Ethics
Comm. v. Garden State Bar Ass’n, 457 U.S. 423 (1982).
In Middlesex the plaintiff was required to exhaust the state’s
remedies because the state had adopted a rule allowing
interlocutory appeal of federal constitutional claims to the
state’s highest court. No such rules are in place in North
Carolina for the federal double jeopardy claim raised
by Nivens, Maners, and Stork. The State of North Carolina
does not provide for interlocutory appeal of pre-trial
motions raising double jeopardy claims. N.C.G.S. § 15A-
1444(a) (defendant can appeal after final judgment is
entered); N.C.G.S. § 7A-27(b) (defendant can appeal after
final judgment entered); State v. Shoff, 118 N.C. App. 724
(1995); State v. Joseph, 92 N.C. App. 203 (1988).
The consequence of the court’s decision will be to
increase the amount of disruption to the state proceeding.
Nivens, Maners, and Stork will file their pretrial motion
in state court and the state court will summarily reject it.
The court acknowledges that state courts have summarily
rejected double jeopardy claims in post-amendment cases in
the past, which they obviously would since under state law
1]
the drug tax never was a penalty. The state court and
prosecutor will be ready to proceed to trial at that time, but
Nivens, Maners, and Stork will re-file their § 1983 claim in
federal court raising their federal double jeopardy claim once
again. Thus, the court of appeals requires the parties to
duplicate the process that has interrupted the state criminal
proceeding and the parties’ lives. This duplicative effort is
costly and disruptive of the lives and functions of the parties
and serves no purpose. Whatever benefits, if any, from this
process would be far outweighed by the costs, including
disruption of a state criminal proceeding.
CONCLUSION
The petition for a writ of certiorari should be granted.
Respectfully submitted,
AarON E. MICHEL
Attorney for Petitioners
3736 Surry Ridge Court
Charlotte, NC 28210-6921
(704) 451-8351
APPENDIX
la
APPENDIX A — OPINION OF THE UNITED STATES
COURT OF APPEALS FOR THE FOURTH CIRCUIT
DATED AND FILED FEBRUARY 11, 2003
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 02-1176
KENNETH SCOTT NIVENS,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
GLEN LANCE MANERS,
Individually and as representatives of a class .
Pursuant to Rule 23, Fed. R. Civ. P.;
TERRI LYNN STORK,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
Plaintiffs-Appellants
V.
PETER S. GILCHRIST, II,
In his official capacity as District Attorney
For the 26" Prosecutorial District
For the State of North Carolina,
And as representative of a class
Pursuant to Rule 23, Fed. R. Civ. P.,
Defendant- Appellee
[Filed February 11, 2003]
2a
Appendix A
Before: WILLIAMS, MOTZ, and KING, Circuit Judges.
WILLIAMS, Circuit Judge:
Appellants Kenneth Scott Nivens, Glen Lance Maners,
and Terri Lynn Stork brought an action in the United States
District Court for the Western District of North Carolina,
pursuant to 42 U.S.C.A. § 1983 (West Supp. 2002) and the
Federal Declaratory Judgment Act, 28 U.S.C.A. §§ 2201 and
2202 (West 1994), to enjoin the pending state criminal drug
prosecutions against them, alleging that their payment of the
North Carolina’s drug tax was a criminal, not civil, penalty,
and thus any criminal punishment imposed in their pending
criminal trial will violate the Double Jeopardy Clause of the
Fifth Amendment, made applicable to the states through
the Due Process Clause of the Fourteenth Amendment.
The district court abstained from exercising jurisdiction and
intervening in the state proceedings based on Younger v.
Harris, 401 U.S. 37 (1971), which reaffirmed the principle
that a federal court “should not act to restrain a [state]
criminal prosecution, when the moving party has an adequate
remedy at law and will not suffer irreparable injury if denied
equitable relief.” Jd. at 43-44. The district court concluded
that Appellants had not exhausted their state remedies and
that they would not suffer irreparable damage if the state
action was not enjoined because Appellants had yet to be
subjected to a criminal prosecution. For the reasons that
follow, we affirm the district court’s decision to abstain.
The underlying facts in this case are not in dispute.
On July 8, 2000, Appellants were arrested for various
violations of the North Carolina Unauthorized Substances
3a
Appendix A
Act relating to the sale of 1024 ecstasy pills. Shortly
thereafter, North Carolina assessed taxes for possession of
the drugs, including penalties and interest, totaling
$8,677.13,' pursuant to North Carolina’s Unauthorized
Substances Tax Act, N.C. Gen. Stat. §§ 105-113.105, et seq.
(2000). Within a month or so, Appellants paid the taxes in
full and without contest. Subsequently, North Carolina
indicted Appellants for possession, sale, delivery, and
transportation of, and conspiracy to sell and deliver, an
unauthorized substance and scheduled a criminal trial for
the November 5, 2001 term of the Superior Court of North
Carolina.? On October 29, 2001, Appellants filed a motion
for a temporary restraining order and a preliminary injunction
in the district court to stay their trial. North Carolina
voluntarily stayed Appellants’ prosecution until January 2002
to allow Appellants adequate time to raise their contentions
before the district court, and we issued a stay of the district
court’s order pending the outcome of this appeal. Because
we now affirm the district court’s decision to abstain from
exercising jurisdiction, we lift our stay.
1. Appellants Nivens, Maners, and Stork were jointly assessed,
respectively, $6,259.67, for the possession of 700 and the sale and
possession of 184 pills, and Maners was additionally assessed $1,336.33
for the sale of 184 of these ectasy pills Stork was additionally assessed
$1,081.13 for the sale of another 140 ecstasy pills.
2. We refer to the Unauthorized Substances Tax Act, N.C. Gen.
Stat. §§ 105-113.105, et seg. (2000), as North Carolina’s “drug tax”
throughout the opinion.
3. Appellants named Peter S. Gilchrist, III, the District Attorney
for the Twenty-Sixth Prosecutorial District of North Carolina, as
Respondent in his petition. For ease of reference we refer to Gilchrist as
“North Carolina” throughout the opinion.
4a
Appendix A
Il.
A.
The sole issue on appeal is whether the district court
properly abstained from exercising jurisdiction under
Younger, thus declining to reach Appellants’ Fifth )
Amendment claims under the Double Jeopardy Clause.‘ :
We review the district court’s decision to abstain under
Younger for abuse of discretion. Martin Marietta Corp. v.
Md. Comm'n on Human Rel., 38 F.3d 1392, 1396 (4" Cir.
1994); see also Freeman v. Case Corp., 118 F.3d 1011, 1014
(4" Cir. 1997) (noting that an error of law constitutes an abuse
of discretion).
Based upon principles of federalism, the Supreme Cort
in Younger articulated the policy of comity underlying the
federal courts’ obligation to refrain from adjudicating the
merits of federal constitutional claims in an underlying state
4. The Fifth Amendment’s Double Jeopardy Clause states, “nor
shall any person be subject for the same offence to be twice put in
jeopardy of life or limb.” U.S. Const. Amend. V. The Supreme Court
has recognized that the Double Jeopardy Clause protects individuals
from being criminally prosecuted more than once for the same
offense. See Monge v. California, 524 U.S. 721, 727-28 (1998).
Protection from subsequent of “successive” criminal prosecutions
extends to any party who has already been the subject of a criminal
prosecution for the same offense, regardless of the result of the first
criminal prosecution. Jd. at 729. The Court has also concluded that
the Double Jeopardy Clause protects individuals from the imposition
of “multiple criminal punishments for the same offense,” but “only
when such occurs in successive proceedings.” Hudson v. United
States, 522 U.S. 93, 99 (1997).
Sa
Appendix A
criminal action: adjudicating such claims needlessly injects
federal courts into ongoing state criminal prosecutions,
undermines the state’s ability to enforce its laws, and does
not show “‘a proper respect for state functions.” Younger, 401
U.S. at 44. The Court also recognized that federal courts
acting as courts of equity in this context “should not act to
restrain a criminal prosecution, when the moving party has
an adequate remedy at law and will not suffer irreparable
injury if denied equitable relief.” Jd. at 43-44. Later, in
Middlesex County Ethics Comm. v. Garden State Bar Ass Nn,
457 U.S. 423 (1982), the Court held that a federal court
should abstain from interfering in a state proceeding,
even though it has jurisdiction to reach the merits, if there is
(1) an ongoing state judicial proceeding, instituted prior to
any substantial progress in the federal proceeding; that
(2) implicates important, substantial, or vital state interests;
and (3) provides an adequate opportunity for the plaintiff to
raise the federal constitutional claim advanced in the federal
lawsuit. Jd. at 432; Martin Marietta Corp., 38 F.3d at 1396
(stating the same considerations).
All three of the circumstances identified in the Middlesex
inquiry are present here. First, Appellants instituted this
lawsuit in an effort to stop, and eventually dismiss, North
Carolina’s pending criminal proceedings against them.
Second, North Carolina has a very important, substantial,
and vital interest in preventing violations of its criminal laws.
See Younger, 401 U.S. at 43-44; see also Cooper v. Oklahoma,
517 U.S. 348, 367 (1996) (noting that “the State’s interest in
the efficient operation of its criminal justice system” is an
“important state interest[]”). Third, as is discussed below,
infra at 12-17, Appellants have an adequate opportunity in
6a
Appendix A
the state prosecution to raise the double jeopardy claim
advanced in the federal lawsuit, although they assert that it
would be futile. The district court, accordingly, did not abuse
its discretion in abstaining from hearing Appellants’ case,
unless the case falls under an exception to the general
principle requiring abstention.
B.
The Supreme Court has recognized that in “extraordinary
circumstances,” federal courts have discretion to disregard
the “strong federal policy against federal court interference
with pending state judicial proceedings.” Middlesex County
Ethics Comm., 457 U.S. at 431, 102 S. Ct. 2515. In Younger,
the Supreme Court explained the exception to this “strong
federal policy”:
*{W]hen absolutely necessary for protection of
constitutional rights, courts of the United States
have power to enjoin state officers from instituting
criminal actions. But this may not be done, except
under extraordinary circumstances, where the
danger of irreparable loss is both great and
immediate. Ordinarily, there should be no
interference with such officers; primarily, they are
charged with the duty of prosecuting offenders
against the laws of the state, and must decide when
and how this is to be done. The accused should
first set up and rely on his defense in the state
courts, even though this involves a challenge of
the validity of some statute, unless it plainly
Ta
Appendix A
appears that this course would not afford
adequate protection.”
Younger, 401 U.S. at 44, 91 S. Ct. 746 (emphasis added)
(quoting Fenner v. Boykin, 271 U.S. 240, 243-44, 46 S. Ct.
492, 70 L. Ed. 927 (1926)); see also Kugle: v. Helfant, 421
U.S. 117, 123-24, 95 S. Ct. 1524, 44 L. Ed. 2d 15 (1975)
(holding that federal equitable intervention in a state trial
may be warranted upon a showing of “bad faith or harassment
by state officials,” “where the state law to be applied in the
criminal proceeding is flagrantly and patently violative of
express constitutional prohibitions,” or where “other
extraordinary circumstances” exist that present the necessary
threat of irreparable injury). Thus, a federal court must abstain
from interfering with an ongoing state proceeding where
a litigant has “an ‘opportunity to raise and have timely
decided by a competent state tribunal the federal issues
involved’ and ... no bad faith, harassment, or other
exceptional circumstances dictate to the contrary.” Middlesex,
457 US. at 437, 102 S. Ct. 2515 (quoting Gibson v. Berryhill,
411 U.S. 564, 577, 93 S. Ct. 1689, 36 L. Ed. 2d 488 (1973)).
Appellants do not claim that their prosecution was
undertaken with the intent to harass or because of any bad
faith. Nor do they claim that they have exhausted their
avenues for relief in the state court proceeding. See Huffman
v. Pursue Ltd., 420 U.S. 592, 608-10 & N. 21, 95 S. Ct. 1200,
43 L. Ed. 2d 482 (1975) (requiring, for a federal court to
assert jurisdiction over federal issues under 42 U.S.C.A. §
1983 in a pending state action, exhaustion of state appellate
remedies “unless [the claimant] can bring himself within one
of the exceptions specified in Younger’). Accordingly, for a
8a
Appendix A
federal court to disregard the mandates of Younger,
Appellants must show extraordinary circumstances
demonstrating that they do not have an adequate remedy at
law and the danger of irreparable injury if they are denied
equitable relief is both great and immediate. Younger, 401
U.S. at 44, 91 S. Ct. 746. As is discussed below, we conclude
that Appellants cannot establish either.
..
Appellants first contend that Younger is inapplicable
because, they assert, it “plainly appears” that the courts of
North Carolina will “not afford” them “adequate protection.”
Younger, 401 U.S. at 44, 91 S. Ct. 746. They concede that
they have pretrial avenues in which they can raise their double
jeopardy claims in state court, but they argue that because
the North Carolina Supreme Court has already decided that
North Carolina’s pre-1995 amendment drug tax° is not a
criminal penalty, see State v. Ballenger, 123 N.C. App. 179,
472 S.E.2d 572 (1996), aff’d, 481 S.E.2d 84 (N.C. 1997)
(per curiam), any contrary argument in a North Carolina state
court would be futile. Further, Appellants note that this court
has determined that North Carolina’s pre 1995 amendment
5. Because the General Assembly of North Carolina has
amended the drug tax law several times since the courts in State v.
Ballenger, 345 N.C. 626, 481 S.E.2d 84 (1997), and Lynn v. West,
134 F.3d 582 (4" Cir. 1998), considered it, see infra at 156-157,
we refer to the drug tax law in force at the time of Ballenger and
Lynn as the “pre-1995 amendment drug tax” and the drug tax law
after the amendments as the “post- amendments drug tax.”
;
EE ———<—
9a
Appendix A
drug tax is a criminal penalty. See Lynn v. West, 134 F.3d
582, 593-94 (4" Cir. 1998). The disagreement between the
North Carolina courts and this court, Appellants assert,
demonstrates that North Carolina will violate their federal
constitutional rights and, thus, will not afford them adequate
protection. As discussed below, we conclude that because
neither the Fourth Circuit nor the North Carolina Supreme
Court has ever analyzed the post-amendments drug tax under
which Appellants were assessed their taxes to determine if it
is acriminal punishment, Appellants cannot demonstrate that
the North Carolina courts will plainly not afford them
adequate protection.
The decisions in Ballenger and Lynn were based on an
analysis of Department of Revenue of Montana v. Kurth
Ranch, 511 U.S. 767, 783, 114 S. Ct. 1937, 128 L. Ed. 2d
767 (1994). In Kurth Ranch the United States Supreme Court
determined that Montana’s tax on illegal drugs was so
fundamentally punitive that it was actually a criminal
punishment such that an assessment of the drug tax, after a
criminal penalty had already been imposed, violated the
Double Jeopardy Clause by imposing an unconstitutional
second punishment. /d. at 783, 114 S. Ct. 1937. Montana
characterized its law as civil, but the Court determined that
it was actually a “second punishment” for double jeopardy
purposes by looking at four features: “(1) the high tax rate,
(2) the deterrent purpose of the tax, (3) the fact that the tax
was conditioned on the commission of a crime, and (4) the
fact that the tax was levied on ‘possession of goods that no
longer exist and that the taxpayer never lawfully possessed.’ ”
10a
Appendix A
Lynn, 134 F.3d at 589 (quoting Kurth Ranch, 511 U‘S. at
780-84, 114 S. Ct. 1937).°
In Ballenger, 481 S.E.2d at 84, the North Carolina
Supreme Court affirmed, without comment, an appellate
court decision holding that North Carolina’s pre 1995
- amendment drug tax did not have “such fundamentally
punitive characteristics as to render it violative of the
prohibition against multiple punishments [under] the Double
Jeopardy Clause,” Ballenger, 472 S.E.2d at 575. The North
Carolina appellate court reviewed the pre-1995 amendment
drug tax and concluded that it was not as punitive as
Montana’s drug tax in Kurth Ranch and not a criminal penalty
because:
the North Carolina tax becomes payable within
forty-eight hours after the taxpayer comes into
possession of the substance [and] is not a tax on
confiscated goods, as was the case with the
Montana tax, which became due only upon the
taxpayer’s arrest for possession of the substance.
To the contrary, the dealer is not required .. . to
disclose his or her identity . . . and any information
obtained ... is confidential and cannot be used
in a criminal prosecution. ...
Id. at 575.
6. Department of Revenue of Montana v. Kurth Ranch, 511 U.S.
767, 1148S. Ct. 1937, 128 L. Ed. 2d 767 (1994), did not involve the
issue of Younger abstention because the underlying dispute occurred
in a federal bankruptcy proceeding and went to the Supreme Court
on direct review from the Ninth Circuit Court of Appeals, id. at 773-
75, 1148S. Ct. 1937.
lla
Appendix A
After the Ballenger decision, we construed the same pre-
1995 amendment drug tax and concluded that it was a
criminal penalty because:
the [d]rug [t]ax contains no features that allow us
to distinguish Kurth Ranch. The rate of taxation
is even steeper than the tax in Kurth Ranch. Unlike
the application of a normal income tax on illegal
activity, the [d]rug [t]ax is enforced only against
criminals.... [T]he [d]rug [t]ax does not
contemplate lawful dealings in the product that is
the subject of the tax. The [d]rug [t]ax singles out
a class of persons who have engaged in criminal
activity and subjects the class to a rate of taxation
far beyond that faced by any legitimate taxpayer.
Lynn, 134 F.3d at 592.’
In 1995, 1997, and again in 1998, before North Carolina
assessed the drug tax on Appellants, the General Assembly
of North Carolina, partially in response to the Supreme
Court’s decision in Kurth Ranch and our decision in Lynn,
dramatically altered its drug tax. For example, in 1995, the
General Assembly (1) made the drug tax payable upon receipt
7. Although we did address in Lynn whether North Carolina’s
pre-1995 amendment drug tax was a criminal punishment under Kurth
Ranch, as applied to the individuals in that case, we did not address
Younger abstention or double jeopardy because Lynn involved a
federal drug prosecution and a challenge to a subsequent assessment
of the state drug tax. Lynn, 134, F.3d 582, 583-88 (1998) (determining
that North Carolina’s pre 1995 amendment drug tax was a criminal
penalty that could not be imposed without constitutional safeguards
that attach to criminal proceedings).
12a
Appendix A
of drugs rather than upon a criminal violation; (2) lowered
the tax on various drugs; (3) repealed the section that made
the violation of the drug tax a Class I felony; and (4) lowered _
the interest and penalty applicable when a dealer fails to pay
the tax within 45 days of receiving the drugs from 100% to
50%. See N.C. Gen. Stat. §§ 105- 113.106, -113.107, -
113.110, 113.110(A) (1994), amended by An Act to Revise
the Controlled Substance Excise Tax, Ch. 340, H.B. No. 123
(1995). In 1997, the General Assembly included previously
unaccounted for substances, such as mash and other illicit
beverages. See N.C. Gen. Stat. §§ 105-113.106, - 113.107
(1996), amended by An Act to Levy an Excise Tax on Illicit
Spirituous Liquor, an Excise Tax on Mash, and an Excise
Tax on Illicit Mixed Beverages, N.C. Sess. Laws 1997-292
(1997). In 1998, the General Assembly (1) lowered the rate
at which it taxed cocaine from $200 per gram to $50 per
gram; (2) lowered the rate at which it taxed drugs based on
dosage units from $400 per 10 dosage units to $200 per 10
dosage units; and (3) completely abolished the special penalty
and interest section and replaced it with the general interest
and penalty provisions applicable to all taxes paid in North
Carolina, effectively reducing the penalty for late payment
from 50% to 10-40%. See N.C. Stat. §§ 105-113.107, -
113.110A (1997), amended by An Act to Amend the Excise
Tax on Controlled Substances, N.C. Sess. Laws 1998- 218
(1998). As part of the 1998 amendments, the General
Assembly expressly stated:
Whereas, the intent of the General Assembly in
enacting this tax continues to be to raise revenue
through a civil tax on this highly profitable activity
... [and] not to create a criminal penalty ...
13a
Appendix A
Whereas, upon. . . challenge in the federal courts,
the controlled substance tax was found in 1998 to
be acriminal penalty . . . Whereas, it is, therefore,
the inteni of the North Carolina General Assembly
to modify the tax in accordance with [Lynn ], so
that the tax may continue to be assessed in a
manner consistent with the law as interpreted
[in Lynn ].
An Act to Amend the Excise Tax on Controlled
Substances, N.C. Sess. Laws 1998-218 (1998).
Neither North Carolina’s Ballenger decision nor
our decision in Lynn addressed North Carolina’s amended
drug tax, which is at issue in this case, because both cases
involved tax assessments before 1995.° In fact, no court’ has
8. Although our decision in Lynn cites to the 1996 version of
North Carolina’s drug tax, we clearly interpreted North Carolina’s
pre-1995 amendment drug tax. See, e.g., Lynn, 154 F.3d at 590
(discussing the 100% penalty applicable to late payments of the drug
tax). As stated in the text, the General Assembly of North Carolina
modified the penalty provision for latc payment in 1995 from a 100%
to a 50% penalty and in 1998 reduced the penalty to 10-40%.
See supra at 156-157.
9. Lower courts in North Carolina have decided cases where
local authorities had assessed the post-amendments drug tax.
The courts in these cases, however, have not discussed the 1995,
1997, or 1998 amendments and have not addressed whether the post-
amendments drug tax contains the punitive characieristics necessary
render it a criminal penalty under Kurth Ranch. Rather, the courts
relied on North Carolina’s Supreme Court ruling in Ballenger and
(‘ont’d)
14a
Appendix A
considered whether North Carolina’s post- amendments drug
tax provides the “the clearest proof” of punitive purpose or
effect necessary to override the General Assembly’s intent
to create a civil law and transform it irito a criminal penalty.
Hudson v. United States, 522 U.S. 93, 99-100, 118 S. Ct.
488, 139 L. Ed. 2d 450 (1997) (holding that “only the clearest
proof will suffice to override legislative intent and transform
what has been denominated a civil remedy into a criminal
penalty”) (internal citations omitted).'° Based on the wide-
(Cont'd)
summarily held, without comment, that the drug tax is not a criminal
penalty. See, e.g., State v. Crenshaw, 144 N.C. App. 574, 551 S.E.2d
147, 151 (2001) (stating that Lynn “is not binding on our State courts”
and overruling a double jeopardy objection on that basis). Regardless,
even if North Carolina’s pre 1995 amendment drug tax and post-
amendments drug tax were substantially the same, the North Carolina
Supreme Court is not bound by its prior decision and can overturn it.
See Leonard v. Hammond. 804 F.2d 838, 840-41 (4th Cir. 1986).
10. Under Hudson, to determine whether a sanction is a civil
or criminal penalty, a court must (1) “ask whether the legislature
‘in establishing the penalizing mechanism, indicated either expressly
or impliedly a preference for one label or the other,’ ” Hudson, 522
U.S. at 99, 118 S. Ct. at 493 (quoting United States v. Ward, 448
U.S. 242, 248, 100 S. Ct. 2636, 65 L. Ed. 2d 742 (1980)), and then,
if the sanction was intended to be civil in nature, (2) “ ‘inquir[e]
further whether the statutory scheme was so punitive either in purpose
or effect’ as to ‘transfor[m] what was clearly intended as a civil
remedy into a criminal penalty,’ ” id. (quoting Ward, 448 U.S. at
248-49, 100 S. Ct. 2636, and Rex Trailer Co. v. United States, 350
U.S. 148, 154, 76 S. Ct. 219, 100 L.Ed. 149 (1956)). This second
inquiry is guided by the factors discussed in Kennedy v. Mendoza-
Martinez, 372 U.S. 144, 168-69, 83 S. Ct. 554, 9 L. Ed. 2d 644 (1963),
(Cont'd)
|
}
j
i
lSa
Appendix A
ranging amendments to the drug tax and the fact that
Appellants make no claim that the amendments were
insubstantial, we decline to hold that North Carolina’s post-
amendments drug tax is sufficiently similar to the pre 1995
amendment drug tax such that we should treat them the
same.'! Simply put, an assertion that the North Carolina
(Cont'd)
and “ ‘considered in relation to the statute on its face,” ” Hudson,
522 US. at 99, 118 S. Ct. at 493 (quoting Kennedy, 372 U.S. at 169,
83 S. Ct. 554). The Court noted, “important [ly]... , [that] only ‘the
clearest proof’ will suffice to override legislative intent and transform
what has been denominated a civil remedy into a criminal penalty.”
Id. (quoting Ward, 448 U.S. at 249, 100 S. Ct. 2636). Although
Hudson, 522 U.S. at 101-02, 118 S. Ct. 488, expressly overruled the
method of analysis in United States v. Halper, 490 U.S. 435, 109
S. Ct. 1892, 104 L. Ed. 2d 487 (1989), on which Kurth Ranch relied,
we recognized in Lynn that Hudson’s “ ‘clearest proof’ ” requirement
“does not appear to make the challenger’s burden any tougher than
it already was.” See Lynn, 134 F.3d at 592 n.10 (quoting Hudson,
522 U.S. at 99, 118 S. Ct. at 493).
11. For example, under North Carolina’s pre-1995 amendment
drug tax, the plaintiff in Lynn was assessed $389,000 for possession
of 970 grams of cocaine. See Lynn, 134 F.3d at 584 (calculating a
$200 per gram tax plus a 100% penalty plus $1,125 interest). Under
North Carolina’s post-amendments drug tax, the same 970 grams of
cocaine would only be assessed approximately $67,920 ($50 per gram
plus a 40% penalty), which would be approximately one-sixth of the
——assessed amount. Likewise, in the instant case, Appellants would
have been assessed approximately $48,400 for their 1208 ecstasy
pills under North Carolina’s pre-1995 amendment drug tax
($200 per 10 dosage units plus a 100% penalty) while they were in
fact only assessed $8,667.13 under the post-amendments drug tax
(Cont'd)
16a
Appendix A
courts will likely decide a constitutional issue in a way
contrary to what Appellants believe the Constitution
mandates is not a sufficient basis to avoid application of
Younger abstention. See Leonard v. Hammond, 804 F.2d 838,
840-41 (4th Cir. 1986) (noting that futility was not
demonstrated by a North Carolina Supreme Court ruling
because the North Carolina Supreme Court could modify or
reverse a prior holding). Because our decision in Lynn and
the North Carolina cases Appellants cite are not controlling
for their situation, Appellants cannot demonstrate the type
of futility that must be established to justify federal court
intervention in an ongoing state proceeding. '”
y
Appellants argue in the alternative that Younger
abstention is inappropriate under the reasoning of Gilliam v.
Foster, 75 F.3d 881, 903 (4th Cir. 1996) (en banc) (Gilliam
(Cont'd)
($50 per 10 dosage units plus a 40% penalty), which is approximately
one-sixth of what would have been assessed under the pre-1995
amendment drug tax. Moreover, the post-amendments drug tax is
not conditioned on a criminal offense, and payment of the tax cannot
be used to criminally prosecute the taxpayer.
12. We have acknowledged, albeit in the habeas corpus context,
that North Carolina’s decisions holding that the pre-amendment drug
tax was distinguishable from the tax in Kurth Ranch are not
objectively unreasonable. See Vick v. Williams, 233 F.3d 213, 220-
22 (4th Cir. 2000) (holding in a habeas challenge under § 2254 that
North Carolina’s decisions upholding the pre-amendment drug tax
as non-criminal were not an objectively unreasonable interpretation
of federal law).
17a
Appendix A
III). Specifically, they contend that Gilliam III stands for the
proposition that the mere allegation of “‘a colorable claim”
of a double jeopardy violation is sufficient to establish
exceptional circumstances warranting federal court
intervention without any separate showing. Gilliam III, 75
F.3d at 904. Finding Appellants’ reliance on Gilliam III
misplaced, we reject their overly expansive interpretation of
that case.
In Gilliam ITI, petitioners argued that because a state trial
judge granted a mistrial over their objection and in the
absence of manifest necessity during their first trial,
subjecting them to a second criminal prosecution would
violate their rights under the Double Jeopardy Clause.
We did not hold that an allegation of a double jeopardy
violation automatically precludes Younger abstention. Rather,
after detailing the well-settled double jeopardy jurisprudence
protecting individuals against successive prosecutions for the
same offense, we concluded that petitioners’ allegations
established a substantial likelihood of an irreparable double
jeopardy violation. /d. at 893-95. We expressly based our
decision not to abstain under Younger on the fact that a
“portion of the constitutional protection [the Double Jeopardy
Clause] affords would be irreparably lost if Petitioners were
forced to endure the second trial before seeking to vindicate
their constitutional rights at the federal level.” Jd. at 904
(emphasis added); see also Abney v. United States, 431
U.S. 651, 660, 97 S. Ct. 2034, 52 L. Ed. 2d 651 (1977)
(concluding that the protection from multiple trials for the
same offense afforded by the Double Jeopardy Clause “would
be significantly undermined if appellate review were
postponed until after conviction and sentence”).
18a
Appendix A
In contrast, Appellants have presented a much less
compelling argument that absent federal court intervention,
they will suffer an immediate and irreparable constitutional
deprivation. See e.g., Younger, 401 U.S. at 44, 91 S. Ct. 746.
Unlike the defendants in Gilliam III, Appellants yet
have access to pretrial avenues in their current criminal
prosecutions whereby they may raise their constitutional
contentions before any double jeopardy injury could inure.
See supra at 153; see also N.C. Gen. Stat. § 15A- 952(a)
(2001) (“Any defense, objection, or request which is capable
of being determined without the trial of the general issue
may be raised before trial by motion.”); Gilliam III, 75 F.3d
at 889 (noting that the defendants had filed a motion to
dismiss on double jeopardy grounds in the state courts prior
to their second trial and appealed the denial of that motion
to the South Carolina Supreme Court before invoking federal
jurisdiction); cf. Gerstein v. Pugh, 420 U.S. 103, 107-08 n.9,
95 S. Ct. 854, 43 L. Ed. 2d 54 (1975) (finding state forum
inadequate because there was no preliminary hearing at which
plaintiffs could present constitutional claims as to pretrial
conditions). Because jeopardy does not attach during pretrial
procedures and motions, Crist v. Bretz, 437 U.S. 28, 50, 98
S. Ct. 2156, 57 L. Ed. 2d 24 (1978) (“[I]t has never been
held that jeopardy attaches as of the making or deciding of
pretrial motions.”), and Appellants have state procedures
whereby they may foreclose a violation of their double
jeopardy rights, any double jeopardy harm at this stage of
Appellants’ litigation is neither immediate nor irreparable.
Appellants must raise their contentions in their current
prosecution and appeal any undesirable decision before a
19a
Appendix A
federal district court asserts jurisdiction.'? See Justices of
Boston Mun. Court v. Lydon, 466 U.S. 294, 302, 104 S. Ct.
1805, 80 L. Ed. 2d 311 (1984) (noting that the defendant
had filed a pretrial motion to dismiss and appealed it to the
Massachusetts Supreme Court before invoking federal
jurisdiction); Willhauck v. Flanagan, 448 U.S. 1323, 1325-
26, 101 S. Ct. 10, 65 L. Ed. 2d 1147 (1980) (Brennan, Circuit
Justice) (denying consideration of a writ of certiorari for a
claim based on double jeopardy due to a lack of “irreparable
harm” because “once jeopardy [attaches for the first time],
[a defendant] should . .. make his claim before the [state]
trial judge [in his second trial], at which time the courts can
give due consideration to his claim”). Because Appellants
have not made a showing of an immediate and irreparable
constitutional injury absent federal court intervention,
Gilliam III does not permit us to disregard Younger.
We also note that Appellants have not shown a “great”
or “substantial” likelihood that they will suffer any
13. Because Appellants have pretrial avenues to raise their
double jeopardy claim before the North Carolina courts, we need
not resolve the issue of whether a federal district court should exercise
its jurisdiction over Appellants’ claim once they have exhausted North
Carolina’s pre-trial procedures. See Younger v. Harris, 401 U.S.
37, 46, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971) (“[{I]n view of the
fundamental policy against federal interference with state criminal
prosecutions, even irreparable injury is insufficient unless it 1s both
great and immediate. ... Certain types of injury, in particular, the
cost, anxiety, and inconvenience of having to defend against a single
criminal prosecution, could not by themselves be considered
‘irreparable’ in the special legal sense of that term. Instead, the threat
to the plaintiff’s federally protected rights must be one that cannot
be eliminated by his defense to a single criminal prosecution.”).
20a
Appendix A
constitutional deprivation. See, e.g., Younger, 401 U.S. at
45 (holding that “danger of irreparable loss [must be] great
and immediate”); see also City of Los Angeles v. Lyons, 461
U.S. 95, 111-12 (1983) (holding that a “substantial and
immediate irreparable injury” is a precondition to invoking
the exceptional circumstances exception to Younger
abstention). For Appellants to establish that their prosecution
violates double jeopardy by exposing them to multiple
criminal punishments, they must prove: (1) that the payment
of the drug tax was a criminal penalty; (2) that took place in
a separate proceeding; (3) for the same offense for which
they are now being prosecuted. See Hudson, 522 U.S. at 98,
118 S. Ct. 488 (setting forth test for double jeopardy violation
based upon multiple punishments). As is set forth below, there
are numerous, significant impediments to Appellants’ ability
to make this showing.
Initially, it is arguable whether the current version of
North Carolina’s drug tax constitutes criminal punishment
within the meaning of Hudson. See Hudson, 522 U.S. at 98,
1188. Ct. 488 (concluding that administrative sanctions were
not sufficiently punitive and, therefore, were not criminal
penalties for purposes of double jeopardy); see also Kansas
v. Hendricks, 521 U.S. 346, 361, 117 S. Ct. 2072, 138 L. Ed.
2d 501 (1997) (discussing role of statutory construction in
determining whether penalty is civil or criminal under
Hudson); see generally Lisa Melenyzer, Double Jeopardy
Protections from Civil Sanctions after Hudson v. United
States, 89 J. Crim. L. & Crim. 1007, 1009-1011, 1016-23
(1999) (explaining the evolution, criticisms, and limits of
the multiple punishment doctrine). Appellants contend
that the drug tax is a criminal penalty on the basis of Lynn.
2la
Appendix A
We cannot agree that Lynn is controlling. As is discussed at
length above, see supra at 156-158, since Lynn was decided,
North Carolina has significantly amended its drug tax laws.
These amendments have yet to be analyzed to determine
whether those portions of the drug tax that were discussed
in Lynn have been altered such that the drug tax no longer
implicates any federal constitutional concern. See N.C. Gen.
Stat. §§ 105-113.107(a), (2a), -113,110A, - 236.
Assuming arguendo that the current drug tax is a criminal
penalty, it is not clear that the payment of the drug tax took
place in a prior “proceeding” within the meaning of Hudson.
See Hudson, 522 U.S. at 99, 118 S. Ct. 488 (concluding that
the Double Jeopardy Clause protects individuals from the
imposition of “multiple criminal punishments” for the same
offense, but “only when such occurs in successive
proceedings.”). When Appellants received their drug tax
assessment, they simply paid the tax; they apparently did
not participate in a hearing or an appearance of any type.
Under Hudson, if there has been no prior “proceeding,”
Appellants’ current prosecution cannot be successive and,
thus, the Double Jeopardy Clause would not be implicated.
Similarly, to the extent that the assessment of the drug
tax is part of the current prosecution, and not a separate
proceeding, there likely is no double jeopardy restriction on
imposing both types of punishment, irrespective of whether
the drug tax is deemed a “criminal” punishment. Missouri v.
Hunter, 459 U.S. 359, 368-69, 103 S. Ct. 673, 74 L. Ed. 2d
535 (1983) (“Where . . . a legislature specifically authorized
cumulative punishment under two statutes, regardless of
whether those two statutes proscribe the ‘same’ conduct...
22a
Appendix A
the prosecutor may seek and the trial court or jury may
impose cumulative punishment under such statutes in a single
trial.”); Albernaz v. United States, 450 U.S. 333, 344, 101
S. Ct. 1137, 67 L. Ed. 2d 275 (1981) (“[T]he question of
what punishments are constitutionally permissible is no
different from the question of what punishment the
Legislative Branch intended to be imposed. Where Congress
intended, as it did here, to impose multiple punishments,
imposition of such sentences does not violate the
Constitution.”); United States v. Studifin, 240 F.3d 415, 418
(4th Cir. 2001) (“Where the issue is solely that of multiple
punishment, as opposed to multiple prosecutions, the Double
Jeopardy Clause does no more than prevent the sentencing
court from prescribing greater punishment than the legislature
intended.”); United States v. Terry, 86 F.3d 353, 355 (4th
Cir. 1996) (“If [the Legislature] clearly authorizes multiple
punishments for the same act or transaction, the Double
Jeopardy Clause is not offended when the multiple
punishments are imposed after a single trial.”); Cummings v.
Evans, 161 F.3d 610, 614 (10th Cir. 1998) (holding that the
double jeopardy inquiry is limited to determining “whether
[the] state legislature intended to prescribe cumulative
punishments for a single criminal incident, [and] we are
bound by a State court’s determination of the legislature’s
intent”). Thus, if the General Assembly of North Carolina
contemplated and in fact intended that drug dealers
be criminally punished for any drug offenses and assessed
a tax for any unauthorized substances in their possession,
see N.C. Gen. Stat. § 105- 113.105 (2000) (“Nothing in
this Article may in any manner provide immunity from
criminal prosecution for a person who possesses an illegal
substance.’’), there is no double jeopardy bar on North
23a
Appendix A
Carolina prosecuting, and a court imposing, both a criminal
punishment and a drug tax assessment in a single
proceeding.'* In sum, we are not persuaded that there is a
substantial likelihood that Appellants’ prosecution is violative
of double jeopardy principles.
None of this is to say that Appellants ultimately will not
prevail on their double jeopardy claim. It is only to say that
where the alleged double jeopardy violation is far from clear,
immediate, or irreparable, the important Younger policy of
allowing the State to pursue its prosecution free from federal
court intervention outweighs the Appellants’ interest in
having the double jeopardy issue resolved in a federal forum.
Commonwealth of Va. v. Kelly, 29 F.3d 145, 147-48
(4th Cir. 1994) (“There being little, if any, likelihood that
Kelly can succeed on the merits of his federal double jeopardy
claim, and the public interests weighing heavily in favor of
the Commonwealth’s ability to pursue its criminal
proceedings free of federal court intervention, the district
court erred in staying Kelly’s. . . trial. . . .” (internal citations
omitted)); Stevens, 675 F.2d at 949 (holding that “the Younger
policy is the weightier when the defendant is not being asked
to undergo a second trial”). Thus, in balancing the important
policies underlying Younger, we conclude that Appellants
have not established the existence of a substantial and
14. The Due Process Clause also assures that what punishment
is imposed has prior legislative approval. See Pacific Mut. Life Ins.
Co. v. Haslip, 499 U.S. 1, 28-29, 111 S. Ct. 1032, 113 L. Ed. 2d 1
(1991) (Scalia, J., concurring in judgment) (discussing the breadth
of the Due Process Clause and how it is a guarantee of the process
provided by the law of the land); Crist v. Bretz, 437 U.S. 28, 51, 98
S. Ct. 2156, 57 L. Ed. 2d 24 (1978) (holding that the Due Process
Clause protects against prosecutorial abuse).
24a
Appendix A
immediate danger of irreparable constitutional loss
warranting federal court intervention.
Il.
In conclusion, the issue before us is not whether
Appellants will suffer unconstitutional multiple punishments;
rather, it is whether a federal court should intervene into a
state court proceeding to decide the federal constitutional
issues for the state court. The essence of Younger is comity
— state courts are equally entitled to, and capable of,
interpreting constitutional law:
[S]ince both federal and state courts have a
duty to enforce the Constitution, there is no
constitutional basis, in the absence of some
demonstrable infirmity in the state judicial process
itself, for preferring federal courts to state courts
as adjudicators of federal constitutional claims.
1 Laurence H. Tribe, American Constitutional Law, § 3-
28 at 570 (3d ed. 2000). “Minimal respect for the state
processes, of course, precludes any presumption that the state
courts will not safeguard federal constitutional rights.”
Middlesex, 457 U.S. at 431, 102 S. Ct. 2515. Because
Appellants failed to establish any of the exceptions to
Younger, we conclude that the district court did not abuse its
discretion in abstaining from adjudicating Appellants’ double
jeopardy claim.
AFFIRMED.
25a
APPENDIX B — ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE WESTERN DISTRICT
OF NORTH CAROLINA, CHARLOTTE DIVISION
DATED AND FILED FEBRUARY 4, 2002
UNITED STATES DISTRICT COURT WESTERN
DISTRICT OF NORTH CAROLINA
Charlotte Division
No. 3:01CV582-MU
KENNETH SCOTT NIVENS,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
GLEN LANCE MANERS,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
TERRI LYNN STORK,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
Plaintiffs-Appellants
V.
PETER S. GILCHRIST, ITI,
In his official capacity as District Attorney
For the 26" Prosecutorial District
For the State of North Carolina,
- And as representative of a class
Pursuant to Rule 23, Fed. R. Civ. P.,
Defendant-Appellee
(Filed: February 4, 2002]
26a
Appendix B
ORDER
Since the beginning of this country’s history Congress
has, subject to few exceptions, man Vesteda desire to
permit state courts to try cases free from interference
from federal courts.'
THIS MATTER is before the Court upon Plaintiffs’
motion for a temporary restraining order and preliminary
injunction (“Motion”), filed October 29", 2001; Defendant’s
Response, filed November 14", 2001; Plaintiffs’ Reply as to
Preliminary Injunction, filed November 26", 2001;
Defendant’s Motion to Dismiss, filed November 14", 2001;
Plaintiff Response to Motion to Dismiss, filed November
26", 2001; and Defendant’s Reply to Plaintiffs’ Response to
Motion to Dismiss, filed December 4", 2001.7
Plaintiffs have requested this Court to enjoin Mr.
Gilchrist from prosecuting the Plaintiffs, who were
defendants in trials scheduled for the November 5", 2001,
term of the Superior Court for Mecklenburg County.’
1. Younger v. Harris, 401 U.S. 37, 43 (1971).
2. By stipulation of the parties, the motion for a temporary
restraining and preliminary injunction order was stayed informally
when Gilchrist and his office agreed not to try the Plaintiffs before
January 2002. (Def.’s Mot. Dig, at 3.) Because the Court finds it
currently lacks authority to intervene in this State matter, the motion
for a temporary restraining order and preliminary injunction is hereby
DENIED for failure to establish jurisdiction.
3. The requested injunction apparently would apply to
Mecklenburg County Superior Court case numbers 0OCRS3 1384
through 31387; 0OOCRS28893 through 28895, 28913, 28916, 28917,
28919, 28920; and O1CRS1 16688, and 116689.
1S LPP IE LSI LE GREG NEA LGN OEE LANE LEI LE LONI TN FL NAY EEE INI OG IE GEMINI EMM TIN UT
27a
Appendix B
Plaintiffs were arrested on July 8°’. 2000, and charged with
violating the North Carolina Controlled Substance Act for
allegedly selling ecstasy to undercover agents on different
occasions during the summer of 2000. Pursuant to the North
Carolina Controlled Substance Tax Act, North Carolina
General Statute section 105-2D “drug tax,” Plaintiffs were
assessed with tax, penalty, and interest, which they paid in
full. Having paid this tax, the Plaintiffs were indicted in
Superior Court on charges related to the same alleged drug
violations and, in the trials described in footnote two, face
criminal sentencing if found guilty.
Maintaining that the tax is 2 criminal, and not civil,
penalty, Plaintiffs filed for an injunction based on the premise
that if the tax is a criminal penalty, collecting the tax and
then instituting a subsequent injunction places the Plaintiffs
in double jeopardy. As interpreted by Plaintiffs, North
Carolina state law maintains that the drug tax Is a civil
penalty, while the Fourth Circuit views the tax as criminal.
Thus, Plaintiffs’ argument runs, there is a conflict in state
and federal law, which if resolved by this Court so as to agree
that the tax is a criminal penalty, could indicate that the
Superior Court proceeding posed a double jeopardy risk. This
action, specifically, is brought pursuant to 42 U.S.C. § 1983,
the Federal Declaratory Judgment Act, 28 U.S.C. §§ 2201
and 2202, and the Fifth and Fourteenth Amendments to the
United States Constitution. Because this Court must abstain
from exercising jurisdiction, however, it will not answer
cuestions related to the characterization of the drug tax at
this time.
28a
Appendix B
Plaintiffs move the Court to interfere with a state court
proceeding, so federalist principles require the Court to first
determine whether it may overcome the doctrine of Younger .
v. Harris, 401 U.S. 37 (1971), which generally precludes
federal courts from enjoining pending state proceedings.
This threshold jurisdictional problem is central to the Motion
to Dismiss, and the Court will focus the analysis on that
Motion and the responsive pleadings. A federal court cannot
raise Younger sua sponte, however Defendants pled it in their
Motion to Dismiss.
Defendants correctly argue that Younger requires this
Court to abstain from exercising jurisdiction. In rationalizing
the holding that, absent limited exceptions, federal courts
do not intervene in state proceedings, Justice Black wrote
that restraining federal intervention was integral to protecting
the states’ right to breathing space; phrased differently:
[to] avoid a duplication of legal proceedings and
legal sanctions where a single suit would be
adequate to protect the rights asserted. This
underlying reason for restraining courts of equity
from interfering with criminal prosecutions is
reinforced by an even more vital consideration,
the notion of ‘comity,’ that is, a proper respect
for state functions, a recognition of the fact that
the entire country is made up of a Union of
separate state governments, and a continuance of
the belief that the National Government will fare
best if the States and their institutions are left free
to perform their separate functions in their
separate ways. This, perhaps for lack of a better
29a
Appendix B
and clearer way to describe it, is referred to by
many as ‘Our Federalism,’ and one familiar with
the profound debates that ushered our Federal
Constitution into existence is bound to respect
those who remain loyal to the ideals and dreams
of ‘Our Federalism.’ ... [T]he concept
[represents] a system in which there is sensitivity
to the legitimate interests of both State and
National Governments, and in which the National
Government, anxious though it may be to
vindicate and protect federal rights and federal
interests, always endeavors to do so in ways that
will not unduly interfere with the legitimate
activities of States. It should never be forgotten
that this slogan, ‘Our Federalism,’ born in the early
struggling days of our United States, occupies a
highly important place in our Nation’s history and
its future. 401 U.S. at 44-5.
For these reasons, Younger only allows four exceptions
to the doctrine of nonintervention. See 401 U.S. at 43.
Of these, only the last pertains to the instant matter: “a judicial
exception to the longstanding policy . . . has been made where
a person about to be prosecuted in a state court can show
that he will, if the proceeding in the state court is not enjoined,
suffer irreparable damages.” /d. The situation at bar does not
subject the Plaintiffs to irreparable damages because they
are entitled to take advantage of North Carolina’s own
appellate process, and ultimately of the United States
Supreme Court if that tribunal grants certiorari.
30a
Appendix B
Yet Plaintiffs urge that the double jeopardy risk poses
the kind of extreme situation where an exception is proper.
For this contention, Plaintiffs stand heavily but unsteadily —
upon Gilliam v. Foster, 75 F.3d 881 (4" Cir. 1996). (Pl.’s
Resp. Mot. Dis. at 14). Gilliam does indeed state that district
courts can intervene when there is a double jeopardy problem.
Specifically, the logical progression is that the federal court
does not intervene, generally, absent “the most narrow and
extraordinary circumstances.” /d. at 903. Intervention is
usually proper only when the movant shows “bad faith,
harassment, or any other unusual circumstance that would
call for equitable relief.” Id. (quoting and supplying emphasis
to Younger, 401 U.S. at 54). In Gilliam, as in the instant case,
there is clearly no bad faith or harassment. The jurisprudential
advancement made in Gilliam is the holding, having reached
this point in the analysis, that “the irreparable deprivation of
th{e] Fifth Amendment Double Jeopardy right is an
extraordinary circumstance warranting federal court equitable
intervention in Petitioner’s state criminal proceeding.” Jd.
at 904 (and noting in footnote 27 that “Obviously, Petitioners
already had been required to defend themselves in one
criminal proceeding, and it was their second criminal trial
from which they sought federal . . . relief.”). And it is with
this holding — with the recognition that “proceeding” and
“trial” are, in this limited sense, interchangeable and
necessary for double jeopardy intervention — that Gilliam’
factual situation and Plaintiffs’ part ways.
Gilliam turns on the black-letter law that jeopardy
attaches when the jury is empaneled and sworn. See 75 F.3d
893. In the instant matter, jeopardy has not attached because
there has not been a prosecution, no jury has been sworn.
:
¢
i
¢
KETONE
. is ape nat sana ao
Sacha aera sibtind. Wh abdatinn 7. eed A elapakducies
BT LE WHIP G2 acter
See are tes) eee ees os
Oe Cee
f
3la
Appendix B
Rather, a tax was demanded of Plaintiffs, who paid it without
resort to an adversarial contest. Jeopardy not having attached
even once, there is of course no possibility for it to attach a
second time. This matter is, therefore, not an instance of
double jeopardy, rendering unripe the question of whether
federal courts can intervene in state proceedings to prevent
double jeopardy (although the Court recognizes that it could
intervene in a situation meeting Gilliam s requirements). This
is clearly the point that the Fourth Circuit makes when it
states in its reasoning for Gilliam that “when the record
demonstrates that a second criminal trial will constitute a
violation of the defendant’s double jeopardy rights, federal
court intervention is appropriate.” Jd. at 905 (emphasis
supplied). Indeed, after specific inquiry into what the Fifth
Amendment means by “double jeopardy,” throughout the
passages of the opinion where Younger is discussed, Judge
Wilkins deems that double jeopardy arises from a second
trial, and uses the phrase “second trial” repeatedly. In fact
defining double jeopardy as connected to a second trial is a
major holding of that case. Gilliam 's outcome is absolutely
contingent on the fact that, in that case, a second trial was
underway. The mere payment of a tax does not constitute a
prosecution, but rather a penalty, so based on this quotation
from Gilliam the Superior Court trial set for later this month
— a first prosecution — appears to be the kind of situation in
which the Fourth Circuit would not endorse intervention. If
the Plaintiff wants to argue that the drug tax somehow
constitutes a prosecution, it should argue the North Carolina
legal issue before a North Carolina court.
32a
Appendix B
A sister court discussed this distinction half a decade
ago. In Murphy v. Virginia, 896 F. Supp. 577, 580 (E.D. Va.
1995), Judge Ellis wrote:
Younger rests on two separate yet mutually
supportive pillars. The first is the traditional
equitable principle that “courts of equity should
not act, and particularly should not act to restrain
a criminal prosecution, when the moving party has
an adequate remedy at law and will not suffer
irreparable injury if denied equitable relief.” The
second and primary rationale underlying the
doctrine is comity, the prudential constraints of
federalism. (quoting Younger, 401 U.S. at 43-44).
Plaintiffs here have an adequate remedy at law. And, since
(although they have paid a tax) they have not yet been
prosecuted, they are not at risk at least for the kind of
irreparable injury described in Gilliam that would arise if
there happened to be a double jeopardy issue, a “special
circumstance.” /d. at 581 (citation omitted).
That special circumstance can only happen when a
defendant has incurred time, expense, and anxiety through a
first trial but has not been vindicated. Before resorting to the
federal courts he must see that the state has no remedy for
him — that he has hit the impenetrable stone wall where the
sidewalk ends and state jurisprudence is finally exhausted,
and where state courts have said all they are entitled to say:
In the context of certain double jeopardy
claims, the reasoning is similarly clear: once a
33a
Appendix B
criminal defendant has fruitlessly pursued all state
i remedies available to him, “there is no further bar
to the assumption of federal jurisdiction, for the
deference owed to the state judicial system
demanded by principles of comity and federalism
has been paid.” /d. at 582 (quoting Drayton v.
; Hayes, 589 F.2d 117, 120 (2d Cir. 1979).
When a criminal defendant pays a drug tax without trial or
contest, and is subsequently prosecuted, the wall he must
reach before he can litigate here is still far down the sidewalk.
Such is Plaintiffs’ situation.
This observation is similar to the crux of the thinking
expressed in Murphy, where the court found that subjection
to multiple punishments was not the same as exposure to
multiple prosecutions. Jd. at 582 (noting the “distinction in
the double jeopardy context between cases involving the
threat of multiple prosecutions and those involving the thread
[sic] of multiple punishments.”). Thus, “[i]f an accused is
facing multiple convictions (and, therefore, multiple
punishments) in violation of the Double Jeopardy Clause,
he may appeal those convictions to obtain full relief. If, by
contrast, he faces multiple prosecutions, neither the second _
(or third, or fourth) trial itself nor an appeal therefrom can
provide him with a remedy; the trial itself is the punishment.”
In the instant matter, Plaintiffs have not yet been put through
the inconvenience, or “punishment” as Judge Ellis aptly
described it — of a second trial. They have merely paid taxes,
a form of punishment which they doubtless could have
contested at the time they were levied, or subsequently.
If they find the taxes problematic, they can take it up in North
SNES ERO SR SOREL RINNE, is > A ORIG IS ONAL! TERE LM MSS IRONY CER ROMS LEP I EM: ‘
fer tahoe
MA 5: NS SERENE TOES
34a
Appendix B
Carolina’s judicial system. For even if those taxes are
criminal in nature — and this Court will not reach the analysis
of whether they are or are not — they are a criminal penalty,
not a prosecution.
Younger is clear that this Court must not intervene
“unless it plainly appears that [a] course would not afford
adequate state protection.” 401 U.S. at 45. For the reasons
given, Plaintiffs have not yet taken the actions necessary to
demonstrate to this Court that North Carolina has not
protected their rights. If Plaintiffs still harbor concerns about
the integrity of their Constitutional rights after reaching the
wall where state recourse 1s exhausted, they may of course
file again.
IT IS THEREFORE ORDERED that Plaintiffs’ action is
dismissed without prejudice because this Court lacks subject
matter jurisdiction under Federal Rules of Civil Procedure
12(b)(1). IT IS FURTHER ORDERED that any remaining
outstanding motions are hereby DENIED as moot.
35a
APPENDIX C — ORDER OF THE UNITED STATES
COURT OF APPEALS FOR THE FOURTH CIRCUIT
DENYING PETITION FOR REHEARING
DATED AND FILED MARCH 11, 2003
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 02-1176
KENNETH SCOTT NIVENS,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
GLEN LANCE MANERS,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
TERRI LYNN STORK,
Individually and as representatives of a class
Pursuant to Rule 23, Fed. R. Civ. P.;
ee ee TO Po ee ee ee
Plaintiffs-Appellants
V.
PETER S. GILCHRIST, III,
In his official capacity as District Attorney
For the 26" Prosecutorial District
For the State of North Carolina,
And as representative of a class
Pursuant to Rule 23, Fed. R. Civ. P.,
Defendant-Appellee
(Filed: March 11, 2003]
36a
Appendix C
On Petition for Rehearing and Rehearing En Banc
The appellants’ petition for rehearing and rehearing en
banc was submitted to this Court. As no member of this Court
or the panel requested a poll on the petition for rehearing en
banc, and
As the panel considered the petition for rehearing and is
of the opinion that it should be denied,
IT IS ORDERED that the petition for rehearing and
rehearing en banc is denied.
37a
APPENDIX D — CONSTITUTIONAL PROVISIONS
AND STATUTES INVOLVED
1. U.S. Const., amend. V:
... nor shall any person be subject for the same
offence to be twice put in jeopardy of life or limb.
2. 42 U.S.C. § 1983:
Every person who, under color of any statute,
ordinance, regulation, custom, or usage, of any
State or Territory or the District of Columbia,
subjects, or causes to be subjected, any citizen of
the United States or other person within the
jurisdiction thereof to the deprivation of any
rights, privileges, or immunities secured by the
Constitution and laws, shall be liable to the party
injured in an action at law, suit in equity, or other
proper proceeding for redress, except that in any
action brought against a judicial officer for an act
Or omission taken in such officer’s judicial
capacity, injunctive relief shall not be granted
unless a declaratory decree was violated or
declaratory relief was unavailable. For the
purposes of this section, any Act of Congress
applicable exclusively to the District of Columbia
shall be considered to be a statute of the District
of Columbia.
38a
Appendix D
3. N.C.G.S. § 105-113.105. Purpose
The purpose of this Article is to levy an excise
tax to generate revenue for State and local law
‘enforcement agencies and for the General Fund.
Nothing in this Article may in any manner provide
immunity from criminal prosecution for a person
who possesses an illegal substance.
4. N.C.G.S. § 105-113.107. Excise tax on unauthorized
substances
(a) Controlled Substances.—An excise tax is
levied on controlled substances possessed, either
actually or constructively, by dealers at the
following rates:
(1) At the rate of forty cents (40¢) for each
gram, or fraction thereof, of harvested
marijuana stems and stalks that have been
separated from and are not mixed with any
other parts of the marijuana plant.
(1a) At the rate of three dollars and fifty
cents ($3.50) for each gram, or fraction
thereof, of marijuana, other than separated
stems and stalks taxed under subdivision
(1) of this section.
(1b) At the rate of fifty dollars ($50.00)
for each gram, or fraction thereof, of
cocaine.
39a
Appendix D
(2) At the rate of two hundred dollars
($200.00) for each gram, or fraction
thereof, of any other controlled substance
that is sold by weight.
(2a) At the rate of fifty dollars ($50.00)
for each 10 dosage units, or fraction
thereof, of any low-street-value drug that
is not sold by weight.
(3) At the rate of two hundred dollars
($200.00) for each 10 dosage units, or
fraction thereof, of any other controlled
substance that is not sold by weight.
(al) Weight.—A quantity of marijuana or
other controlled substance is measured by
the weight of the substance whether pure or
impure or dilute, or by dosage units when
the substance is not sold by weight, in the
dealer’s possession. A quantity of a
controlled substance is dilute if it consists
of a detectable quantity of pure controlled
substance and any excipients or fillers.
(b) Illicit Spirituous Liquor.—An excise tax
is levied on illicit spirituous liquor possessed
by a dealer at the following rates:
(1) At the rate of thirty-one dollars and
seventy cents ($31.70) for each gallon,
or fraction thereof, of illicit spirituous
liquor sold by the drink.
40a
Appendix D
(2) At the rate of twelve dollars and
eighty cents ($12.80) for each gallon, or
fraction thereof, of illicit spirituous
liquor not sold by the drink.
(c) Mash.—An excise tax is levied on mash
possessed by a dealer at the rate of one dollar and
twenty-eight cents ($1.28) for each gallon or
fraction thereof.
(d) Illicit Mixed Beverages.—A tax is levied on
illicit mixed beverages sold by a dealer at the rate
of twenty dollars ($20.00) on each four liters and
a proportional sum on lesser quantities.
5. N.C.G.S. § 105-113.107A. Exemptions
(a) Authorized Possession.—The tax levied in
this Article does not apply to a substance in the
possession of a dealer who is authorized by law
to possess the substance. This exemption applies
only during the time the dealer’s possession of
the substance is authorized by law.
(b) Certain Marijuana Parts.—The tax levied in
this Article does not apply to the following
marijuana:
(1) Harvested mature marijuana stalks
when separated from and not mixed with
any other parts of the marijuana plant.
4la
Appendix D
(2) Fiber or any other product of
marijuana stalks described in subdivision
(1) of this subsection, except resin
extracted from the stalks.
(3) Marijuana seeds that have been
sterilized and are incapable of germination.
(4) Roots of the marijuana plant.
6. N.C.G.S. § 105-113.108. Reports; revenue stamps
(a) Revenue Stamps. — The Secretary shall issue
stamps to affix to unauthorized substances to
indicate payment of the tax required by this
Article. Dealers shall report the taxes payable
under this Article at the time and on the form
prescribed by the Secretary. Dealers are not
required to give their name, address, social
security number, or other identifying information
on the form. Upon- payment of the tax, the
Secretary shall issue stamps in an amount equal
to the amount of the tax paid. Taxes may be paid
and stamps may be issued either by mail or in
person.
(b) Reports. — Every local !aw enforcement
agoncy and every State law enforcement agency
must report to the Department within 48 hours
after seizing an unauthorized substance, or making
an arrest of an individual in possession of an
unauthorized substance, listed in this subsection
42a
Appendix D
upon which a stamp has not been affixed. The
report must be in the form prescribed by the
Secretary and it must include the time and place
of the arrest or seizure, the amount, location, and
kind of substance, the identification of an
individual in possession of the substance and that
individual’s social security number, and any other
information prescribed by the Secretary. The
report must be made when the arrest or seizure
involves any of the following unauthorized
substances upon which a stamp has not been
affixed as required by this Article:
(1) More than 42.5 grams of marijuana.
(2) Seven or more grams of any other
controlled substance that is sold by weight.
(3) Ten or more dosage units of any other
controlled substance that is not sold by
weight.
(4) Any illicit mixed beverage.
(5) Any illicit spirituous liquor.
(6) Mash.
43a
Appendix D
7. N.C.G.S. § 105-113.109. When tax payable
The tax imposed by this Article is payable by any
dealer who actually or constructively possesses
an unauthorized substance in this State upon
which the tax has not been paid, as evidenced by
a stamp. The tax is payable within 48 hours after
the dealer acquires actual or constructive
possession of a non-tax- paid unauthorized
substance, exclusive of Saturdays, Sundays, and
legal holidays of this State, in which case the tax
is payable on the next working day. Upon payment
of the tax, the dealer shall permanently affix the
appropriate stamps to the unauthorized substance.
Once the tax due on an unauthorized substance
has been paid, no additional tax is due under this
Article even though the unauthorized substance
may be handled by other dealers.
8. § 105-113.111. Assessments
Notwithstanding any other provision of law, an
assessment against a dealer who possesses an
unauthorized substance to which a stamp has not
been affixed as required by this Article shall be
made as provided in this section. The Secretary
shall assess a tax, applicable penalties, and interest
based on personal knowledge or information
available to the Secretary. The Secretary shall
notify the dealer in writing of the amount of the
tax, penalty, and interest due, and demand its
immediate payment. The notice and demand shall
44a
Appendix D
be either mailed to the dealer at the dealer’s last
known address or served on the dealer in person. If
the dealer does not pay the tax, penalty, and interest
immediately upon receipt of the notice and demand,
the Secretary shall collect the tax, penalty,
and interest pursuant to the procedure set forth in
GS. 105-241.1(g) for jeopardy assessments or the
procedure set forth in GS. 105-242, including
causing execution to be issued immediately against
the personal property of the dealer, unless the dealer
files with the Secretary a bond in the amount of the
asserted liability for the tax, penalty, and interest.
The Secretary shall use all means available to collect
the tax, penalty, and interest from any property in
which the dealer has a legal, equitable, or beneficial
interest. The dealer may seek review of the
assessment as provided in Article 9 of this Chapter.
9. N.C.G.S. § 105-241. Where and how taxes payable; tax
period; liens
(d) Lien.—This subsection applies except when
another Article of this Chapter contains contrary
provisions with respect to a lien for a tax levied in
that Article. The lien of a tax attaches to all real and
personal property of a taxpayer on the date a tax
owed by the taxpayer becomes due. The lien
continues until the tax and any interest, penalty, and
costs associated with the tax are paid. A tax lien is
not extinguished by the sale of the taxpayer’s
property. ...
45a
Appendix D
10. 1998 North Carolina Laws S.L. 1998-218 (S.B. 1554)
Additions are indicated by <<+ Text +>>; deletions by
<<- Text ->>. Changes in tables are made but not highlighted.
S.L. 1998-218
S.B. No. 1554
EXCISE TAX AMENDMENT—CONTROLLED
SUBSTANCES
AN ACT TO AMEND THE EXCISE TAX ON
CONTROLLED SUBSTANCES.
Whereas, North Carolina enacted the Controlled
Substances Tax Act in 1989 for the purpose of levying an
excise tax to generate revenue for State and local law
enforcement agencies and the General Fund and to collect
taxes from persons engaged in a highly profitable activity
that had escaped taxation; and
Whereas, the intent of the General Assembly in enacting
this tax continues to be to raise revenue through a civil tax
on this highly profitable activity; and
Whereas, the intent of the General Assembly in enacting
this tax is not to create a criminal penalty, other than for
nonpayment of the tax, above and beyond the criminal
sanctions in the criminal code; and
46a
Appendix D
Whereas, upon constitutional challenge on double
jeopardy grounds by a defendant who had been assessed for
the tax and also convicted of criminal drug charges, the North
Carolina Court of Appeals held that the tax “was not
predicated upon whether the taxpayer in possession of the
controlled substance has been arrested or charged with
criminal conduct, nor is it assessed on property that
necessarily has been confiscated or destroyed”; and
Whereas, the court further held that the statute “is a
legitimate and remedial effort to recover revenue from those
persons who would otherwise escape taxation when engaging
in the highly profitable, but illicit and sometimes deadly
activity of possessing, delivering, selling, or manufacturing
large quantities of controlled drugs” and that the statute “does
not have such fundamentally punitive characteristics as to
render it violative of the prohibition against multiple
punishments for the same offense contained in the Double
Jeopardy Clause’; and
Whereas, that decision was affirmed on appeal to the
North Carolina Supreme Court and not disturbed by the
United States Supreme Court; and
Whereas, upon further challenge in the federal courts,
the controlled substance tax was found in 1998 to be a
criminal penalty, and the United States Supreme Court let
the federal ruling stand; and
Whereas, according to law enforcement officials, the
current market price of cocaine is approximately $100.00
per gram and hence the excise tax rate proposed by this act
47a
Appendix D
is proportionately less than the tax imposed by the taxing
authorities in many states upon cigarettes; and
Whereas, it is, therefore, the intent of the North Carolina
General Assembly to modify the tax in accordance with the
recent federal court ruling, so that the tax may continue to
be assessed in a manner consistent with the law as interpreted
by the federal courts; Now, therefore,
The General Assembly of North Carolina enacts:
Section 1. GS. 105-113.107(a) reads as rewritten:
<< NC ST § 105-113.107 >>
(a) Controlled Substances. — An excise tax is levied
on controlled substances possessed, either actually or
constructively, by dealers at the following rates:
(1) At the rate of forty cents (40 cents) for each gram,
or fraction thereof, of harvested marijuana stems and stalks
that have been separated from and are not mixed with any
other parts of the marijuana plant.
(1a) At the rate of three dollars and fifty cents ($3.50)
for each gram, or fraction thereof, of marijuana, other than
separated stems and stalks taxed under subdivision (1) of
this section.
<<+(1b) At the rate of fifty dollars ($50.00) for each
gram, or fraction thereof, of cocaine.+>>
48a__
Appendix D
(2) At the rate of two hundred dollars ($200.00) for each
gram, or fraction thereof, of any other controlled substance
that is sold by weight.
(2a) At the rate of fifty dollars ($50.00) for each 10
dosage units, or fraction thereof, of any low-street-value drug
that is not sold by weight.
(3) At the rate of <<-four hundred dollars ($400.00)->>
<<+two hundred dollars ($200.00)+>> for each 10 dosage
units, or fraction thereof, of any other controlled substance
that is not sold by weight. |
<<+(al) Weight. —+>> A quantity of marijuana or other
controlled substance is measured by the weight of the
substance whether pure or impure or dilute, or by dosage
units when the substance is not sold by weight, in the dealer’s
possession. A quantity of a controlled substance is dilute if
it consists of a detectable quantity of pure controlled
substance and any excipients or fillers.
Section 2. G.S. 105-113.110A reads as rewritten:
<< NC ST § 105-113.110A >>
§ 105-113.110A. <<-Interest and penalty.->>
<<+Administration.+>>
<<-The tax due under this Article shall bear interest at
the rate established pursuant to G.S. 105-241.1(1) from the
date due until paid. In addition, a dealer who neglects, fails,
or refuses to pay the tax due under this Article is liable for a
49a
Appendix D
penalty equal to fifty percent (50%) of the tax.->> <<+Article
9 of this Chapter applies to this Article.+>>
Section 3. This act is effective when it becomes law.
In the General Assembly read three times and ratified
this the 26th day of October, 1998.
Approved 1:58 p.m. this 31st day of October, 1998.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.