# Petition for a Writ of Certiorari — Lehigh Valley RR Co. v. Martin, State Tax Comr. of New Jersey, et al. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA43086415_0422%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for a Writ of Certiorari - **Published:** January 1, 1940 - **Citation:** 313 U.S. 568 ## Text Court, Us THE MAR 26 194] Supreme Court ea tt Y States: 0900 No. 63 = fap 1940. LenicH VauiEy Ramroap Company, (Plaintiff-Appellee in the Court Below), Petitioner, v. J. H. THAYER MARTIN, State Tax Commissioner of the State of New Jersey, e¢ al., (Defendants-Appellants in the Court Below), Respondents. (And 17 Other Cases as Listed on Inside Cover.) PETITION AND BRIEF IN SUPPORT OF PETITION FOR WRITS OF CERTIORARI. Maximmian M. Stauiman, Counsel for Petitioners, 810 Broad Street, Newark, N. J. Maurice Bower Savt, RicHarp W. Barrett, JacoB ARONSON, Herpert A. TayY.Lor, Doveias Swirt, Of Counsel. Arthur W. Cross, Inc., Law Printers, 71-73 Clinton St., Newark, N. J., U. S. A. POLIS OPS FPS I TTS SFE EPR AIT (Cases continued from Front Cover) Years (1934) (1935) (1936) C. C. A. numbers D. L. d W. R. R. Co. vs. Martin, et als. 7349 7357 7365 Erie R. R. Co. vs. Martin, et als............. 7350 7358 7366 Lehigh Valley R. R. Co. vs. Martin, et als, 7351 7359 7367 N.J.@N.Y.R.R. Co. vs. Martin, et als. 7352 7360 7368 New York Central R. R. Co. vs. Martin, et als. 7353 7361 7369 N. Y. & Long Branch R. R. Co. vs. Mar- tin, et als 7354 7362 7370 INDEX. Peririon ror Writ or CERTIORARI Summary Statement or Marrer INVOLvEb.................. THe Questions PresENTED Reasons RELIED ON FOR THE ALLOWANCE OF THE Waits PRAYER CERTIFICATION Brier 1n Support or Peririon ror Waits or Czrtt- ORARI Opinions of the Courts Below Jurisdiction Statement of the Case Specification of Errors to be Urged Summary of Argument ARGUMENT: I. A tax valuation of railroad property made with entire disregard of the earnings of the prop- erty and resulting in grossly excessive values violates the due process clause of the 14th Amendment to the Constitution of the United States . II. The Judgment of the Court of Appeals is in conflict with applicable Decisions of this Court and of another Circuit Court of Appeals PAGE nonnowk f, we eH o Oo 6 6& © 10 10 21 ii III. The instant cases are sharply distinguishable from the case of Nashville, etc. R. Co. v. Browning, 302 U.S. 362 IV. Section 265 of the Judicial Code (USCA 379) does not apply to these cases V. The suits are not against the State of New Jersey within the purview of the Eleventh Amendment VI. The ir es are not res judicata Conclusion PAGE 31 — iii TABLE oF Caszs. PAGE Bailey v. Megan, 102 Fed. 2nd, 651 6, 21, 22 Central Railroad Company, etc. v. Martin, 114 N. J. L. 69 .... 4, 9, 10, 31 Central R. R. v. State Board of Assessors, 49 N. J. is Bccasiines 28 Cleveland, C. C. & St. L. Ry. Co. v. Backus, 154 U. 8. 439 13, 15 Continental Iil. Nat. Bank, etc. v. Chicago, I. R. & P. Ry. Co., 294 U. S. 648, 671 12, 23 Cromwell v. County of Sac, 94 U.S. 351, 352................ 33 Ex parte Young, 209 U. S. 123, 130 29 Franklin County v. Nashville, etc., Ry. Co., 12 Lea (Tenn.) 521 14 Great Northern Ry. Co. v. Weeks, 297 U. 8. 135, 4, 6, 13, 16, 18, 19, 20, 21, 22, 31 In re Walker Grain Co., 294 Fed. 951 25 Iowa-Des Mowmes Bank v. Bennett, 284 U. 8. 239, 245-47 29 Looney v. Crane, 245 U. 8. 178 29 Mississippi, etc. Com. v. Ill. Cent. Ry. Co., 203 U. 8. 335 27 Nashville, etc, Ry. Co. v. Browning, 319 U. 8. 362, 4,5, 11, 18, 19, 20, 21, 23, 24, 25 Pacific T. d T. Co., 2 Fed. (2nd) 151 26 Pittsburgh, etc. Ry. Co. v. Backus, 154 U. S. 421,430 14 Prentis v. Atlantic Coast Line, 211 U.S. 210................ 27 Rawley v. Chicago, etc. R. Co., 293 U. 8. 102.............. 5 31 Reagan v. Farmers Loan & T. Co., 154 U. S. 362, 399.. 28, 29, 30 Smyth v. Ames, 169 U. S. 566, 547 15 Southern Ry. Co. v. Kentucky, 274 U.S. 76, 81............ 15 iv PAGE Southern Ry Co. v. Greensboro, etc. Co.,202U.8.543 27 State Board, etc. v. Central R. Co., etc., 48 N. J. L. 146, 376 5 : 11,13 State of Illimois v. Illinois Central Railroad, 27 Til. 64, 68 13 United N. J. R. R. Co. v. State Board, 101 N. J. L. 30 33 Wells Fargo & Co. v. Taylor, 254 U. S. 175, 182.......... 25 West v. Chesapeake & P. Tel. Co., 295 U. S. 662, 672 12 Western Union T. Co. v. Myatt, 98 Fed. 335................ 27 Worcester Trust Co. v. Riley, 302 U. S. 292................ 29, 30 SraturEs. Judicial Code, Section 240, as last amended by Act of June 7, 1934, 48 Stat. at L. 926, 28 U. S. C. See. 347 9 Section 265 (USCA See. 379)....... 10, 25 Constitution of New Jersey, Article IV, Sec. VI, Par. 12 (1 N. J. Comp. Stat. LXXXYVI).....000..... 10 General Tax Act, P. L. 1919, pp. 847, 859 (N. J. Rev. St. 1937, Sec. 54:4-1) 11 Railroad Tax Act, P. L. 1884, p. 142, 1888, p. 269 (N. J. Rev. St. 1937, Sec. 54:22-1) 11 N. J. Rev. St. 1937, Sec. 54:28... 26 IN THE Supreme Court of the Gnited States No. ...., Octoper Term, 1940. Lexie Vauuey Rarroap Company, (Plaintiff-Appellee in the Court Below), Petitioner, Vv. J. H. Tsayer Martin, State Tax Commissioner of the State of New Jersey, et al., (Defendants-Appellants in the Court Below), | Respondents. (And 17 Other Cases as Listed on Inside Cover.) PETITION FOR WRITS OF CERTIORARI. To the Honorable, the Chief Justice and Associate Justices of the Supreme Court of the United States: Your petitioners respectfully pray that writs of certi- iii orari may issue to review decrees of the United States Cir- rf cuit Court of Appeals for the Third Circuit in the cases listed on the cover. The decrees were filed November 27, 1940 (rehearing deuied January 24, 1941), and reversed ai judgments of the United States District Court for the Dis- trict of New Jersey which had held certain tax assessments for the years 1934, 1935, and 1936 to be arbitrary, unlawful, excessive, and unconstitutional, and had enjoined defend- 2 ants (State Tax Commissioner, Treasurer, and Attorney General, of New Jersey) from enforcing collection of more than seventy per cent of the taxes levied thereon, without prejudice to any right to revalue and tax the property according to law. As the cases were argued together and disposed of by one opinion of the court below, only one peti- tion is filed. Summary Statement of the Matters Involved. For each of the tax years 1934, 1935 and 1936, the rail- road properties in New Jersey operated by the several petitioners were assessed at valuations which the peti- tioners claimed to be arbitrary and grossly excessive. The State Tax Commissioner valued the railroad lands of petitioners, located in the State of New Jersey, on the basis of the value of non-railroad contiguous lands and all railroad improvements (grading, fill, rails, ties, bridges, signals, structures, etc., etc.) on the basis of estimated original costs less physical depreciation. No consideration whatsoever was accorded other elements of value, such as earnings. Having exhausted their administrative remedies without avail, the petitioners filed suits in the United States District Court, alleging that the valuations, on which the taxes were computed, were arbitrarily and improperly made and grossly excessive, thus depriving petitioners of their property in violation of the Fourteenth Amendment (a) Since these proceedings were instituted the following com- panies have been placed in the hands of trustees under section 77 of the bankruptcy act: Erie Railroad Company, and New Jersey & New York Railroad Company; also New York, Susquehanna & Western Railroad Company, and Central Railroad Company of New Jersey (parties to the proceedings below, but not to this present petition). 3 and constituting an undue burden on interstate commerce. The petitioners prayed for injunctions against the threat- ened enforcement of such percentage of taxes predicated on these valuations as was found to be excessive and illegal. Evidence introduced by the petitioners, including testi- mony of fact and expert witnesses and complete statistical and other data in the form of exhibits, showed the true value of the properties to be one-third to one-half of the assessments for the years in question (R. I,* 37, 50 et seq.). The defendants did not produce any evidence (other than the assessments themselves) purporting to show the value of the several properties or purporting to support the assessed valuations. The District Court filed findings of fact (R. I, 83); and conclusions of law (R. I, 89), in connection with its opinion (R. I, 13), holding that the assessment valuations were arbitrarily made in disregard of the earnings of the respec- tive railroad properties; and that they ‘‘are arbitrary, capricious, basically unsound, and so grossly excessive as to amount to constructive fraud’’, and constitute a denial of due process of law (R. I, 91). The District Court also held that the plaintiffs (petitioners) were entitled to injune- tions with respect to 30% of the taxes levied, pending cor- rection of the assessments on a lawful basis. There were also involved certain special defenses inter- posed by defendants, upon which the District Court ruled (R. I, 89) that (a) the actions instituted by plaintiffs were not brought to restrain proceedings in a state court within the mean- ing of section 265 of the Judicial Code (28 USCA 379) ; *The transcript is contained in four volumes, and in each instance where reference is made to the Record the volume is indicated by Roman numeral. 4 (b) the actions are not against the State of New Jersey within the purview of the Eleventh Amendment to the Constitution ; (c) the issues were not res adjudicata by reason of a judgment of the state court in an action involving assess- ments for an earlier year. The Circuit Court of Appeals, Third Circuit, reversed the judgments of the District Court and remanded with instructions to dismiss the complaints on the ground that the case of Nashville, etc. Ry. Co. v. Browning, 319 U. S. 362, had in effect overruled the earlier decision in Great Northern Ry. Co. v. Weeks, 297 U. S. 135, and thereby closed the doors of the Federal Courts to any grievance founded on arbitrary and excessive tax assessments. The Circuit Court of Appeals on the collateral issues mentioned above further held that these suits were barred by Section 265 of the Judicial Code because their purpose was to restrain proceedings in a state court; that the suits were in effect against the State of New Jersey and therefore pro- hibited by the Eleventh Amendment; and that the issues were res adjudicata because the New Jersey Supreme Court in Central Railroad Company etc. vs. Martin, 114 N. J. L. 69 (a case involving alleged excessive assessments for 1933), had adjudicated similar issues relating to the valuations for that year adversely to the petitioners. The Questions Presented Are: 1. Does the valuation of railroad property without regard to its earning power, resulting in excessive assess- ments, constitute arbitrary valuation and a denial of due process of law? 5 2. When state officials have valued and taxed railroad property in an alleged arbitrary manner at excessive amounts and serve notice on the owner of intention to obtain an order from a judge to sell such property for such taxes, prior to a judicial inquest as to their validity, are such contemplated or threatened steps within the mean- ing of Section 265 of the Judicial Code, providing that injunction shall not issue to stay proceedings in a state court? 3. Is a suit against administrative officers to prevent the sale of railroad property for taxes based on alleged arbitrary and excessive valuations a suit against a state and so prohibited by the Eleventh Amendment to the Constitution? 4. Where a state court has held that a complainant has failed to prove allegations of excessive assessments of rail- road property for a particular year, does such judgment sustain a plea of res judicata in subsequent actions insti- tuted in a Federal Court by the same parties with respect to assessments in different amounts for later years? Reasons for Granting the Writ. 1. These cases present important open questions of law, and the issues are of such a grave and serious charac- ter as to justify the consideration and judgment of this court. 2. The Circuit Court of Appeals has erred in constru- ing the opinion of this Court in Nashville, etc. Ry. Co. v. Browning, 310 U. 8S. 362, as having in effect overruled the : et 6 earlier opinion of this Court in Great Northern Ry. Co. v. Weeks, 297 U. S. 135. 3. The Circuit Court of Appeals for the Third Circuit has ruled in conflict with the decision of this Court in Great Northern Ry. Co. v. Weeks, 297 U. 8. 135, and in conflict with the decision of the Circuit Court of Appeals for the Eighth Circuit in the case of Bailey v. Megan, 102 Fed. (2d) 651, in holding that the excessive valuation of railroad property for taxation resulting from a total disregard of earnings as a valuation factor does not constitute a denial of due process of law under the Fourteenth Amendment. 4. The Circuit Court of Appeals has ruled in conflict with applicable decisions of this Court in holding that these suits (a) seek to enjoin proceedings in a state court; (b) are suits against the State of New Jersey; and (c) present issues which have been ee fully adjudi- cated against the petitioner. . Prayer. Wherefore, your petitioners respectfully pray that this Court issue writs of certiorari, directed to the Circuit Court of Appeals for the Third Circuit, requiring that Court to certify and to send to this Court for its review and determination, on a day certain to be named therein, a full and complete transcript of the records in the cases on its docket which are entitled as set forth above and numbered 7349-7354 inclusive, 7357-7362 inclusive, and 7365-7370 inclusive, October Term, 1940, re- spectively; that upon such review and determination, the opinion and decrees of the said Court of Appeals filed in | the above entitled cases may be reversed by this Honorable Court. 7 LenicH Vauuey Rartroap Company DetawarE, LACKAWANNA AND WESTERN RariRoaD ComPany Err Rarroap ComPpANy New Jersey & New York Rarroap Company New York Centrau Ramroap Company New York & Lone B a/ ‘ Counsel. 8 Certification. I hereby certify that I am a member of the Bar of the Supreme Court of the United States; that I am Counsel for the petitioners in the above entitled cause; that the foregoing petition has been prepared in accordance with the request of the petitioners; that the allegations in said petition are true to the best of my knowledge and belief ; that said petition is not made for the purpose of delay or prolongation of litigation and is, in my opinion, well founded in law and in fact, and should be granted. Maximiian M. Stratum --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA43086415_0422%3A1. Public record. Not legal advice.