NATIONAL PRIVATE TRUCK COUNCIL, INC. v. OKLAHOMA TAX COMMISSION
Legal provision: Reconstruction Civil Rights Acts (42 USC 1983)
Argument of Richard A. Allen
Chief Justice Rehnquist: We'll hear argument next in Number 94-688, The National Private Truck Council, Inc., v. The Oklahoma Tax Commission.
Mr. Allen: Mr. Chief Justice, and may it please the Court:
The issue in this case is whether State courts may refuse to enforce remedies under two Federal statutes, sections 1983 and 1988 of title 42, in cases challenging State taxes when State courts and State procedures provide an adequate remedy for the underlying claim.
The Oklahoma supreme court in this case held that State courts may refuse to enforce remedies under sections 1983 and 1988 in such cases.
It based that conclusion entirely on what it termed principles of comity in federalism, which it perceived to be embodied in the Federal Tax Injunction Act, which prohibits Federal courts from enjoining State taxes in cases where a plain, speedy, and efficient remedy may be had in the courts of such State.
The main consequence of that ruling in this case is to deny petitioners a right to recover their attorney's fees that they would otherwise have under section 1988.
Unknown Speaker: Mr. Allen, there are other consequences upholding that the State courts have to entertain section 1983 action in State court, and I'd like you to address in the course of your argument how you think this would play out, if you're right, that they have to entertain a 1983 action.
What if the State has administrative claims procedures in any case involving ultimately declaration or injunction of State taxes that you have to make this administrative claim first?
Mr. Allen: Justice O'Connor, there may be... there may well be other consequences to the conclusion that section 1983 applies.
None of those questions are presented in this case or really properly--
Unknown Speaker: I know.
I'm asking you, though, what you think about a State's administrative claims procedure, if you're right.
Mr. Allen: --If a State has a procedure requiring exhaustion of administrative remedies in a tax case, which, by the way, Oklahoma does not, but if it did, this Court's previous decisions would indicate that in the 1983 action those exhaustion of administrative remedy requirements are... ordinarily cannot be enforced in the Federal procedure.
Unknown Speaker: Well, in the tax area that can be very troublesome, and there... something else occurs to me.
We have said in McKesson and like cases that a State does not have to have a predeprivation remedy for tax relief if there is a clear and certain and prompt postdeprivation remedy.
Now, to allow the 1983 action would mean in every instance, I guess, a plea deprivation determination.
Mr. Allen: Not necessarily, Justice O'Connor.
I don't see any reason why, in a section 1983 action... I don't see why it would be implied in a 1983 action that you necessarily had a predeprivation remedy.
Unknown Speaker: Well, you're coming in claiming the right to declaratory and/or injunctive relief... State, you can't get these taxes.
Now, that is in the nature, I think, of a predeprivation remedy.
Mr. Allen: Well, let me simply repeat that that's not an issue in this case.
I think that the probable outcome, if that was... if the issue was squarely presented, the logic would probably be that a person who filed a 1983 action challenging a State tax in State court before he paid the tax, and if the State court made a final adjudication that the State tax was unconstitutional, I do believe that section 1983 would entitle the taxpayer in that circumstance to injunctive or declaratory relief which would in effect preclude the State from--
Unknown Speaker: And that's... you know, that's precisely what this Court has been careful to say the States don't have to do, that they can at least require people to pay their taxes and litigate later and follow certain claims procedures in doing so--
Mr. Allen: --Well--
Unknown Speaker: --and I think you have a strong argument, but it does seem to me that if you're right, and if no adjustments are appropriate here, that it would have a rather dramatic effect on established law in this area.
Mr. Allen: --Well, you raise a very pertinent question, but I think we have to be very careful here, because the point you just made was that the Court has been careful to preserve the right of States to... or at least the constitutional right of States, putting apart the requirements of any Federal statute, the constitutional rights of States to require people to pay their taxes before they litigate the ultimate question.
But what I am saying is that in my view, under section 1983, if you filed an action and there was a litigation that finally determined that the tax was unconstitutional... in other words, you had done your litigation, then it seems to me--
Unknown Speaker: Well, you file 1983, you get a preliminary injunction.
Mr. Allen: --Well, there's--
Unknown Speaker: That's the way it works, and there you are.
There the State is, can't collect the tax.
Mr. Allen: --There's a very important distinction, I think, for these purposes, between a preliminary injunction and a permanent injunction.
The point I was making earlier was that when you have filed your action and it's come to a final judgment in the trial court, and the final judgment is that the State is... that the tax is unconstitutional, I believe that under 1983 you would be entitled to a permanent injunction against the collection of the tax.
Unknown Speaker: What if a State had a requirement just like the Federal Government does now that there simply shall not be injunctions issued enjoining the collection of a tax.
Mr. Allen: I think in those cases, Mr. Chief Justice, the State scheme has to yield to the Federal remedy, and I think--
Unknown Speaker: So the Federal remedy requires the States to do something that Congress has said the Federal Government can't be required to do.
Mr. Allen: --I think that's correct, Your Honor, but let me return to--
Unknown Speaker: Then what sense does that make in terms of the Tax Injunction Act?
You said the concern is you don't want the Federal courts to be telling the States.
Isn't it so much worse to be telling the States, but you've got to do it.
You've got to be the one to say you can't have your own constitutional--
Mr. Allen: --Well, I think that's right, Justice Ginsburg.
Let me give you an example.
I think that the Federal scheme under section 1983 gives taxpayers, State taxpayers a right to equitable relief when a State tax is unconstitutional.
A good example would be, in my view, a poll tax, which this Court has held to be... to violate the Equal Protection Clause.
If a State had a poll tax that required poor people to pay $20 before they could vote, if a State also had a statute that said, but you've got to pay your tax before you can litigate the validity of it, I submit to you that the taxpayer in that situation would have a right, under section 1983, to an injunction enjoining the enforcement of that poll tax, because--
Unknown Speaker: --Against whom?
Who would you sue here?
If you sue the State, you can't sue the State under 1983, can you?
Mr. Allen: --No.
In my example against the official--
Unknown Speaker: Who are you suing here?
Who are you suing here in this case, the official?
Mr. Allen: --The official.
Unknown Speaker: Can you sue the official in his official capacity under 1983?
Mr. Allen: Yes, you can, Justice Scalia.
Unknown Speaker: Have we said that?
Mr. Allen: Yes, you have.
Unknown Speaker: For an injunction--
Mr. Allen: For an injunction--
Unknown Speaker: --and declaratory relief.
Mr. Allen: --For injunctive and declaratory relief.
Unknown Speaker: Not for damages.
Mr. Allen: That's exactly right.
So in my example of the poll tax, you would sue the election official who was seeking to make the individual pay the tax, and you would get an injunction prohibiting him from enforcing that poll tax.
Unknown Speaker: Where have we said--
Mr. Allen: That seems to me the logical and appropriate result.
Unknown Speaker: --Where have we said that you may sue him under 1983 for an injunction?
Mr. Allen: In the Will v. Michigan State Police, footnote 10, is where you have distinguished... you reaffirmed the well-established distinction--
Unknown Speaker: That's an old Eleventh Amendment rule, yes.
I have no doubt under the Eleventh Amendment injunctive actions against officials in their official capacity are not deemed to be against the State, but that doesn't mean that section 1983, the word 1983 has to be read the same way, does it?
Mr. Allen: --Well, Will was a section 1983 case, and in that case, in footnote 10--
Unknown Speaker: Footnote 10 in Will is the only authority you have?
Mr. Allen: --Footnote 10 in Will I think clearly established that under section 1983... and really reaffirmed the distinction between prospective and damage relief, that under section 1983 one may obtain injunctive and declaratory relief against State official--
Unknown Speaker: Well, let me ask you this.
Injunctive and declaratory relief are, by their nature, equitable?
Mr. Allen: --That's true.
Unknown Speaker: And I assume, then, that it is possible that the notion that States can provide adequate postdeprivation remedies at law could be a principle that would enable the State court to say, we will deny equitable relief, because there's a plain, speedy remedy at law here, no equitable relief.
How would that work?
Mr. Allen: Well, I'm not sure I understand the question, if--
Unknown Speaker: Well, if the remedy sought in the State court is essentially an equitable one, would it not be open to the State court to deny an injunction or declaratory relief on the grounds that we have in this State a plain, a speedy, an adequate remedy at law?
Mr. Allen: --I don't believe so, Your Honor, not under section 1983.
To return to my poll tax example, I don't think in that example the State court could say, the man can sue and get a refund of his poll tax after he litigates the validity of--
Unknown Speaker: Well, because that's obviously not a plain, adequate remedy if you can't vote without paying the tax.
I mean, that wouldn't satisfy the Tax Injunction Act requirement, would it, to sue afterward?
You have to come up with the money first and then that's what prevents people from voting?
I mean, nobody's ever suggested the Tax Injunction Act would prevent a suit to enjoin the payment of a poll tax.
Mr. Allen: --Well, I don't know why one would not.
Unknown Speaker: Because it's not... the State doesn't provide an adequate remedy when it says you can't vote, which is what would be the effect of that.
Mr. Allen: Well, I really don't... that may be true, but I really don't see the distinction between that and any other constitutional tax.
You can't operate your trucks in the State of Oklahoma without paying this tax.
You've got to pay the tax and litigate later.
Unknown Speaker: Yes, but those, there's nothing at stake except the interest in not having to pay the amount of money.
Nothing like the right to vote is implicated in any of these other cases.
Mr. Allen: Well, the right to engage in interstate commerce in the State of Oklahoma.
Unknown Speaker: You mean you don't... you can't afford to engage and pay the tax on the assumption--
Mr. Allen: Well, you might decide... if you're Mr. Griffiths here, you might decide instead of operating in Oklahoma, I'm going to operate in Arkansas, where I don't have to pay this tax.
It's a burden.
It's a very significant burden.
Unknown Speaker: --But it's a burden, in any case, it's a burden that can economically be redressed.
After the election is over, you can't go back and vote again.
I mean, there's no economic equivalence there, whereas in the trucking case there is.
Mr. Allen: --Well, the question was, I believe the question was it is open to a State court who has determined that a tax is unconstitutional, is it open to that State court to say, you've still got to pay it and then go for your refund later, and I submit that under the scheme of section 1983 that's simply not open to the State court.
Unknown Speaker: Well, except that I suppose that isn't what the court would do.
The court wouldn't go through a prepayment adjudication.
The court would simply say, we don't enjoin.
If you want to challenge this tax, you've got to pay it, and we'll adjudicate it then.
Mr. Allen: Well, that's why--
Unknown Speaker: It wouldn't say you're going to win your case before it's heard it.
Mr. Allen: --That's why I think it's important to understand and draw a careful distinction between a request for preliminary injunctive relief and a request for final injunctive relief.
Now, if we're talking about a request for preliminary injunctive relief, then I submit that whether you're filing under section 1983 or any other statute, the courts can and properly do impose upon the claimant a very high showing.
He has to show irreparable injury, he has to show a strong likelihood of success on the merits, and all the rest of it, and I have no dispute with the proposition that when you're requesting preliminary relief before there's been an adjudication of the merits the courts can properly deny it if you haven't met those high standards, and in fact in this very case, we sought preliminary injunctive relief, and the trial judge--
Unknown Speaker: Yes, but that doesn't go... it seems to me... I agree with you, but that doesn't go to the point of the hypothetical.
The point of the hypothetical is, if you have an adequate remedy of law after the fact, you, the petitioner for the relief, are not entitled to a prepayment adjudication.
Mr. Allen: --Well, you're not entitled to... you may not be entitled to preliminary relief, and I wouldn't dispute that.
As I was about to say, in this case the trial judge denied our request for preliminary relief even though he said you're probably going to win on the merits, and we didn't dispute that.
But the proposition that we're facing is, what... putting aside the question for preliminary relief, there's been a full adjudication and the trial judge says, hey, I'm persuaded that this tax is unconstitutional, and that--
Unknown Speaker: Sure, but if you win in this case, is the implication that the judge would have had to do something different at the preliminary stage?
Mr. Allen: --No.
Unknown Speaker: And so you--
Mr. Allen: My answer is no.
Unknown Speaker: --You agree that if, in fact, there is a postdeprivation remedy, even if the court is required to entertain at least some claim for relief under 1983, it would not have to provide a predeprivation remedy?
Mr. Allen: It would not have to provide a preliminary injunctive... injunction.
Unknown Speaker: Well, it wouldn't have to provide a remedy to your petitioner before your petitioner paid the tax.
Do you agree?
Mr. Allen: I agree with part of that question, but let me try to explain my answer.
I agree that he wouldn't be entitled to preliminary injunctive relief, but if we're at the stage where there's been a full adjudication and the Court has decided this tax is unconstitutional, obviously unconstitutional, as the supreme court of Oklahoma said here, then I submit that the petitioner would be entitled to injunctive relief--
Unknown Speaker: But then he doesn't need it, because the Court said the tax is unconstitutional.
Mr. Allen: --He may not need it, and therefore we're really arguing about something that has no significant impact on the States, but I submit to you that if the tax collector nevertheless threatened a levy on his property, that he would be entitled under--
Unknown Speaker: But how could he... how could--
Mr. Allen: --section 1983 to injunctive relief.
Unknown Speaker: --Mr. Allen, you just said the State court has said this tax is unconstitutional, and once the State court said that, how can any State tax collector go out and levy on the property?
Mr. Allen: Most of them won't, but sometimes they will.
The point is that injunctive relief is, in those situations where the tax collector would threaten to levy on the property, injunctive relief is not only appropriate--
Unknown Speaker: Well--
Mr. Allen: --but I submit required by section 198--
Unknown Speaker: --yes, but Mr. Allen, the reality is the State court is going to want to say we're not going to litigate this to finality because there is a plain, speedy, adequate remedy at law.
You pay your taxes, and then you litigate it, and you're not going to decide the merits of this case in the present posture.
Now, that's what a State court would like to say--
Mr. Allen: --I--
Unknown Speaker: --and it seems to me that faced with the notion that we have recognized an equitable defense, if you will, to injunctive or equitable relief, that that might be perfectly proper.
Mr. Allen: --Well, I have to only respectfully submit that in some circumstances I don't think it would be.
Let's take a case where the State enacts a tax... what is it now, April, and they're going to impose a million-dollar tax on me next January 1 that is... applies only to black people, let's say, and I go into Federal court... I go into State court and say, enjoin that tax, because it's clearly unconstitutional.
Unknown Speaker: I would think you would have no standing in that case.
Mr. Allen: Putting aside the standing question... a tax only on... I don't know--
Unknown Speaker: Gray hair.
Mr. Allen: --Gray-haired white men, right.
I think I could go into State court and say, enjoin that tax, and I don't think the State court could, under our scheme of 1983, say, sorry, you've got to pay the tax and litigate later.
Unknown Speaker: In this case, if all you were entitled to under some of the earlier suppositions was a future injunction, are your attorney's fees just limited to that?
Mr. Allen: I'm sorry, I'm not--
Unknown Speaker: Well, if there were adequate remedies under State law, and all you're saying is that you... your argument earlier was, at least you're entitled to a future injunction.
Mr. Allen: --Yes.
Unknown Speaker: Are your attorney's fees limited to just the value of obtaining the future injunction?
Mr. Allen: Well, I don't know how you would value attorney's fees--
Unknown Speaker: Neither do I.
That's why I asked the question.
Mr. Allen: --unless it's by the value of the... I think you're entitled... if you're entitled to any relief under section 1983 you're entitled to your reasonable attorney's fees.
Unknown Speaker: Once the State--
--But just for the reasonable attorney's fees for the future injunction, because you have your other relief under the other cause of action?
Mr. Allen: Well, I don't know.
That's a good... I frankly don't know.
I mean, it--
Unknown Speaker: Back up and explain to me how you would ever get injunctive relief once you've had complete adequate remedy at law.
You've gotten the refund back with whatever interest is due.
What injunction would you then get?
Mr. Allen: --Well, in this case, for example, and typically in many of these cases, you get a final judgment on the merits, and the judgment reads, tax commission shall refund, and furthermore we permanently enjoin the tax commission from enjoining the tax.
It's all done at the same time.
The judgments in these cases typically include--
Unknown Speaker: We're talking about the judgment of a State court--
Mr. Allen: --Yes.
Unknown Speaker: --in a case like this.
Mr. Allen: Yes.
Unknown Speaker: And if it makes the injunction, it would make it under what law?
Mr. Allen: Well, normally they don't specify.
They just say, the final judgment for the plaintiffs, and here... it is ordered as follows, and then--
Unknown Speaker: Is that... I didn't realize that was the case.
I assumed that the State would assume the good faith of its tax commission and would just say refund and not say, and we enjoin the tax commission.
Mr. Allen: --Sometimes they do and sometimes they don't.
In fact, the fact of the matter is, I think as some of the justices have pointed out, once there's been a final determination of unconstitutionality, whether or not a formal injunction is entered or not is largely pro forma, and in many... but in many cases the courts do issue injunctions, and in some cases they say we don't need to issue an injunction here.
Unknown Speaker: Well, the place where it makes a difference I think is between... is what has to happen between the time you first challenge the tax and the time there's an ultimate adjudication.
Are you entitled to at least ask for and perhaps get a preliminary injunction, or can the State say, we just don't issue injunctions in this kind of case, you've got to pay first, and then we'll adjudicate your claim?
Mr. Allen: I think they can impose the normal requirements that are imposed on persons seeking preliminary injunctions.
Unknown Speaker: Well, can they impose a special rule on anybody who seeks to enjoin the collection of a tax?
Mr. Allen: No, I don't believe they can.
I think under section 198... I think under the Federal scheme, if it's a federally unconstitutional tax, then... and there's been a... I don't think they can--
Unknown Speaker: Well, nobody knows when you start out whether it's a federally unconstitutional tax or not.
That's something that's... you're ultimately entitled to a determination of somewhere in the State court system, but what is the interim status quo?
Mr. Allen: --Well, if you seek a preliminary injunction, the court looks at whether there's irreparable injury and the degree of the likelihood of success and all the rest of those--
Unknown Speaker: And adequate legal remedies, and the point of the Chief Justice's question, I thought, at least to me, was why are you entitled to an injunction under normal, equitable principles, and why cannot we elaborate those equitable principles as a matter of Federal law in tax injunction suits under 1983?
Mr. Allen: --Well, I think under normal, equitable principles, when you get to the point where there's been a final determination of unconstitutionality, under--
Unknown Speaker: Well, now, but the Chief Justice's question pertained to a preliminary injunction.
Mr. Allen: --Under a preliminary... under a preliminary injunction, at the preliminary injunction stage, I don't think the... in my view, I don't think that States can say, as a blanket matter, when you're challenging a State tax as unconstitutional, as a blanket matter we're not going to issue preliminary injunctions.
I think that they can impose on litigants the normal standards of preliminary injunctions, but I don't think they can erect a special standard that would apply to people challenging unconstitutional State taxes, and I would also point out that preliminary injunctions, although you have to meet a high burden, are not unknown in this area.
We've cited in our reply brief an instance a few years ago involving an Arkansas truck tax where Justice Blackmun issued, in effect, a form of preliminary injunctive relief when he required the State to put the taxes in an escrow fund.
That is a form of preliminary injunctive relief.
Unknown Speaker: But all of this turns, I take it, on there being no exhaustion requirement, which in essence this would be.
Is that the basis for your argument?
Mr. Allen: When you say no exhaustion requirement, I'm not sure what you mean.
Unknown Speaker: Well, as an adequate... I suppose you can look at an adequate remedy of law as being a base that has to be touched, and if there is an adequate remedy of law, you wouldn't be entitled to any injunctive relief unless that remedy for some peculiar reason is denied to you, and I took it that what you were arguing was, there's no exhaustion requirement in 1983.
If you impose the adequacy of the legal remedy criterion you in effect are imposing an exhaustion requirement, and that is inconsistent with the 1983 cases.
Maybe I misunderstood you.
Mr. Allen: Well, I think--
Unknown Speaker: If that is not your argument, then I guess I don't understand what your argument is based on.
Mr. Allen: --Well, I think the question of whether or not States can require you to exhaust some administrative remedy is a somewhat different question here than the one we've been addressing, which is, what can States do when you seek a preliminary injunction in court, so maybe I'm not understanding your question correctly.
I think that also with respect to State requirements that you exhaust some administration remedy that you go through the tax commission when you have a claim of unconstitutional taxes, I think that under the scheme of section 1983, those would probably also not be able to be imposed, but--
Unknown Speaker: May I ask you a more basic question for a moment?
Do you think a State could say, we have State procedures that vindicate both State and Federal constitutional rights, and they include exhaustion and lots of other things.
We are simply not going to entertain any 1983 actions.
There's nothing in the Federal statute that requires that remedy to be enforced in any court except a Federal court.
Could a State--
Mr. Allen: --I don't think... no.
I think clearly States could not do that.
Unknown Speaker: --Why?
What's your authority for that?
Mr. Allen: Well, there are lots of cases that say that... Howlett v. Rose, for example, that says that States cannot refuse to enforce section 19--
Unknown Speaker: They cannot interpose a sovereign immunity defense in a Federal case if they were not imposed in the State case.
Mr. Allen: --That's right.
Unknown Speaker: They didn't hold they must entertain 1983 cases ab initio.
Mr. Allen: Well, that gets back to a very basic question of what the obligations of State courts are, and we submit that--
Unknown Speaker: There may be an obligation to enforce the substantive Federal constitutional right, but that's quite different from saying they must enforce the procedural remedy that Congress has provided for Federal courts in 1983.
Mr. Allen: --Well, 1983 is what Congress has applied not only for Federal courts but also for State courts, and it's well-established that--
Unknown Speaker: But wasn't--
--the whole purpose of that legislation to give you a cause of action in Federal court, because the State courts, the concern was at that time, would not enforce your Federal rights?
Mr. Allen: --No, Justice Ginsburg.
It's well settled that 1983 is enforceable in State courts as well as Federal courts.
Unknown Speaker: But that wasn't the history of 1983.
Wasn't the very reason it was created was that the State courts were not trusted to handle these civil rights cases, and so a Federal remedy was created?
Mr. Allen: Well, that may be true, but the Court has nevertheless held that State courts are--
Unknown Speaker: State courts are--
Mr. Allen: --that it's as much law in the States as it is in the Federal court.
Unknown Speaker: --They may entertain 1983 cases.
We've never held they must.
Mr. Allen: No, but you have held in many, many cases that Federal... that State courts have an obligation, a fundamental obligation to enforce an implied Federal law, that... you said in Howlett v. Rose for example--
Unknown Speaker: Federal substantive law.
Mr. Allen: --Federal substantive law, but section 1988 is certainly Federal substantive law.
Unknown Speaker: It's part of the 1983 remedy.
Mr. Allen: --Yes, it's part of the Federal... it's an important part, I might add, but it's also... it is also substantive law.
It imposes an obligation on States in these kinds of cases.
Unknown Speaker: Mr. Allen, I'm still struggling with some doubt as to whether you should be able to bring a 1983 action against an officer for injunction anyway.
I've gone back and checked on Will, and it's the clearest dictum in Will.
We have no holding on point on whether you can bring a 1983 action against a State officer in his official capacity for injunctive relief.
Mr. Allen: Well, certainly Will indicates that that's the case, and I think Will--
Unknown Speaker: It more than indicates.
It says it flat out.
Mr. Allen: --Yes.
Unknown Speaker: But it's dictum in the case, and the only reason it says it is because that's what we've held with respect to Eleventh Amendment law, but this is a statute, it's not the Eleventh Amendment, and it's certainly open to us to interpret the statute simply not to allow a 1983 suit against an officer acting in his official capacity.
Mr. Allen: Well, that would undo... it seems to me that would undo an awful lot of section 1983 jurisprudence.
Unknown Speaker: That's what I wanted to ask you.
What harm would be done?
What catastrophes would befall?
Mr. Allen: There are lots of instances outside the tax area where injunctive relief against a State officer acting in violation of the Constitution is essential.
Unknown Speaker: And would not be available otherwise than under 1983?
Mr. Allen: Well, I don't know whether it would be available otherwise, but in--
Unknown Speaker: You've certainly held otherwise here.
Mr. Allen: --But in cases... I'm not sure whether it would or would not be available, but let's take a case where a State official is enforcing some blatantly racially discriminatory policy, and you want him to stop.
It seems to me under section 1983 you can get an injunction, and under section 1988 you're entitled to--
Unknown Speaker: Personally, certainly you could, but you're seeking an injunction against him in his official capacity.
Mr. Allen: --Yes, even if he was acting in good faith and believed with some reason that what he was doing was constitutional, I think you can get an injunction against him under section 1988, and I think you can get attorney's fees under section 1988.
Unknown Speaker: Do you ask in the prayer for relief against the officer as a named officer?
Mr. Allen: Yes.
Unknown Speaker: Well, in your complaint on page 26 you ask for injunction against the Oklahoma Tax Commission.
It's at page 26 of the joint appendix.
Just as a matter of pleading, aren't you supposed to name the officer--
Mr. Allen: Well--
Unknown Speaker: --to come within the Ex Parte Young--
Mr. Allen: --We did name the officers in the complaint and in the... in the style of the complaint--
Unknown Speaker: --Not in the prayer for relief.
Mr. Allen: --and in the... and in the body of the complaint we named them all.
Just to finish answering your question, I notice that we did not in that particular prayer for relief in that paragraph specify the officers, but certainly throughout this case, and as the Oklahoma supreme court held, we have made clear that we were suing the individuals here in their official capacity for injunctive relief.
Unknown Speaker: Thank you, Mr. Allen.
Mr. Johnston, we'll hear from you.
Argument of Stanley P. Johnston
Mr. Johnston: Mr. Chief Justice, and may it please the Court:
I think a very important question that is before the Court that has to be answered is, did Congress intend to impose on State courts the obligation to apply Federal remedies under 1983 or 1988 or otherwise in State tax challenges when a plain, speedy, and efficient remedy is available and may be had under State law?
I submit that Congress had no such intention and did not accomplish that with 1983.
The nature of this case is more than just an injunction.
The lawsuit was brought under the State statute that provided that anyone who wishes to challenge the constitutionality of a tax statute or the... or its violation under a Federal statute must give notice after it has been assessed or proposed to be assessed, must give notice, pay the tax under protest, and then may file a lawsuit in district court, the State's trial court, for its recovery.
Now, the statute, of course, does not provide for injunction.
Oklahoma does not, as do some States, have any specific statute prohibiting enjoining a State tax, although Oklahoma case law has on several occasions prohibited it.
Declaratory relief has been allowed under Oklahoma case law against a tax if the tax is not yet due.
Once the tax is due and proposed to be assessed, however, the Oklahoma statutes provide basically two remedies.
One is the administrative hearing remedy, which also can be used at the taxpayer's option to challenge a proposed assessment on any grounds, including grounds of constitu... State or constitutional questions or violation of Federal law.
In addition to that remedy... by the way, in the administrative hearing procedure the hearing was held before the tax commission as an agency, and its order is directly the appealable to the Oklahoma supreme court.
As an alternative, and this is what was used in this case, Oklahoma law provides that instead of filing an administrative protest, that the taxpayer can pay the taxes under protest, file suit in district court for the recovery.
That is what has happened in this case.
Unknown Speaker: So here the taxpayer did comply with Oklahoma procedures, or at least in that respect.
Mr. Johnston: --That is true, and for the access to the courts under this, and this is title 68, section 226 of the Oklahoma statutes, under the action 226 which this was brought, there is no need, other than giving notice of intent and paying the taxes under protest within 30 days, that is the only exhaustion requirement that is necessary, that the Oklahoma courts have declared necessary.
Unknown Speaker: This taxpayer complied with all of that?
Mr. Johnston: Yes, they did.
Yes, Your Honor.
Unknown Speaker: So your claim is limited to just saying, but no 1983 action will lie at all?
Mr. Johnston: --The decision below, and it is our position in support of that decision, that where there is a plain, adequate remedy available under State law, and we submit that there is such a remedy under section 226, that although this Court has obviously said that State courts may entertain 1983 actions, we believe it is consistent with Congress' policy that the State courts need not exercise the jurisdiction, or to entertain a 1983 action to accomplish the exact same thing that they can accomplish under State law where in fact they can accomplish more.
For instance, the State law under which this case arose provides for refunds.
They could not get refunds under 1983--
Unknown Speaker: Yes, but--
Mr. Johnston: --Even if we--
Unknown Speaker: --But of course, if the petitioners are right, they get attorney's fees, and I guess attorney's fees would not be available under State law.
Mr. Johnston: --That is correct.
That's the only thing that they can't get under State law that they might get under 1983 and its attendant section, 1988, because State law does not provide for attorney's fees.
Unknown Speaker: But you're looking at it from the point of view, as everyone is, of tax law, but forgetting tax law for the moment, isn't it normal that the 1983 remedy is treated as, if State law gives a plaintiff all the remedies that 1983 gives them but attorney's fees, still they recover attorney's fees under 1983?
Isn't that the normal rule, because you could have two causes of action get you to the same result, but Congress wanted to give these civil rights plaintiffs attorney's fees.
And then the question becomes, well, why should you make an exception here?
Mr. Johnston: I certainly can't... as I... I will accept that because my expertise, if any there is with 1983, certainly doesn't go much beyond the tax area, but I accept that as a basic statement, but I believe that the difference is, and why not in this case, is because when Congress enacted 1983 and then they were aware, for instance, that in the tax area it was common that the only right that anyone had to challenge a State tax was in the nature of an action in, was to pay it and sue to recover it.
More importantly, when the attorney's fee provision was enacted, Congress had already, in 1937, I believe, had already provided that... their restrictions against the Federal courts from interfering in State tax matters.
Unknown Speaker: Well, that, it seemed to me, which is a very strong argument, would argue for an exception to the no exhaustion principle.
You see, that's... the no exhaustion principle is read into 1983-88 via this Court's decision in Patsy v. Regents, and there were strong policy reasons for doing that, and reading that, and you have very strong policy reasons as to not to interfere.
But don't... I mean, maybe the... I'm not suggesting this is a conclusion.
The policy reasons might read out the no exhaustion, and if they read out the no exhaustion, then the main policy objection to applying it is gone but for attorney's fees, and yet we have a basic congressional decision that you get your attorney's fees when something violates the Civil Rights Act as well as violating State law.
That's what I'd appreciate a reaction to.
Mr. Johnston: I think that the... probably the answer to that is, if we take that approach, and you say well, we will... we could extend 1983, it's application to State tax matters, but we'll change our interpretation so that there's no... that you can have an exhaustion remedy.
However, if you do that, I think that you're then going back and disregarding what the purpose of 1983 was, and whether or not it was ever intended to apply in such cases in the first place.
Unknown Speaker: Well, is there some reason it wasn't intended to apply in... for violations of the Commerce Clause, whereas it was intended to apply for violations of the Fourteenth Amendment?
In other words, the thing that's worrying me about this entire case is the... not this area, but what the impact is on some other area, and whether it's possible to create an exception here, and why would you?
Mr. Johnston: If I understand the concern, I don't think that what we're talking about is creating an exception here, but recognizing that it never did apply in the first place.
Because I believe that Congress, when it enacted the Tax Injunction Act clearly expressed an attitude and a policy of Federal noninterference and nonintrusion in the State tax area with one requirement, of course, that there be a plain, speedy, and adequate remedy available.
Unknown Speaker: But that assumed... that assumed that 1983 would apply.
Mr. Johnston: It could well assume that, but I--
Unknown Speaker: Well, didn't it... I mean, wouldn't it have been pointless if it had not assumed that?
Mr. Johnston: --I think not, Your Honor, because in the times when the Tax Injunction Act was enacted, as I understand historically you had usually the situation where interstate businesses or taxpayers were challenging State tax laws, not on the basis of 1983, but usually seeking injunctions pending the litigation and often causing the States, because of their ability and the taxpayer's ability to either have to give up the case or to accept something less than what was owed, or else have their entire collecting mechanism, at least to that extent, disrupted during the litigation, and Congress perceived that as an evil, and I don't recall that 1983 remedies were involved in that, but they, in proceeding--
Unknown Speaker: I guess what's... I guess what I'm... what perplexes me is 1983 was not required to authorize the Federal courts to give those remedies.
Why was 1983 required to give the Federal courts authority to provide remedies in Fourteenth Amendment cases?
Mr. Johnston: --Well, as I understand the historical basis of 1983, it was perceived that either there were no State law remedies, or they may have been on the books, but they were not being enforced, so that a Federal forum and a Federal remedy were provided.
Of course, 1983 in its application had expanded far beyond the civil rights scope.
Unknown Speaker: Because of the way it's written.
Mr. Johnston: Because of the way it's written and the continuing situations that come before the courts, but I submit that it was never intended... and although it is very, very broadly worded, it is so broadly worded as to cover probably situations that I can't conceive of today, but I do not believe that considering the history and the knowledge, presumed knowledge of Congress when both 1983, the Ku Klux Act, was passed and also when the... years later when 1988 was added to it, I do not believe Congress ever supposed or intended, nor do I believe the wording goes or requires this Court to apply those remedies, the Federal remedies in State tax actions.
Unknown Speaker: Mr. Johnston, if you're right, then wasn't the end of the road in the Dennis case wrong?
That is, there was... when that case was remanded there was an award of counsel fees under 1988, is that correct?
Mr. Johnston: I believe that to be true, Your Honor.
I am... I will... if I am incorrect I will apologize, but I do not believe that this argument was made or even considered, even on remand.
I think it just was taken as--
Unknown Speaker: But consider... let's assume you're right about that, that it wasn't even considered.
If one considers it, how must one rule, and accepting your argument, can, in that Dennis case there be, at the end of the line, counsel fees under 1988?
Mr. Johnston: --If I understand the question, I believe, if they had considered the question that is present in this case--
Unknown Speaker: Yes.
Mr. Johnston: --that the State would have been justified in accepting, as the court below did, yes, we are now told, and we understand that the Commerce Clause will provide a basis for 1983 actions.
However, the State law provides a full remedy, and therefore we are justified under principles of federalism and comity, considering the policy of Congress, in not entertaining that, because I don't believe... this Court's decision in Dennis didn't consider it.
If it had been considered, I think we would have a different situation.
It's a fact they did award attorney's fees, but I think they stopped with the Court's decision in Dennis and did not consider the next question, which is the question that we have here today.
If petitioners are right, following up on an earlier question, I believe that, well, why shouldn't we do it?
What harm would it do?
Why don't we require States to give the Federal remedies?
Well, where do you stop?
Do you have to start creating specific exceptions, or grants, or so forth, because, for instance, although under an action in... under Oklahoma statute 226, the suit for recovery, exhaustion of the administrative remedies are not required, I believe other States do have those requirements, that before you can go to court, you have to have... follow certain administrative processes.
Generally speaking, under 1983 those are not... had not been required by the court.
Statutes of limitations, for instance.
Generally, the statute of limitations under 1983 has been held to be the general tort statute under the State.
However, States typically have much, much shorter statutes of limitations notice requirements, notice of claim requirements for tax challenges.
Now, all of these requirements that the States typically have, have of course been approved by the court, and have been observed to be constitutional and allowable and also very necessary to the State's interest in protecting, controlling, and administering the public fisc.
If the petitioners are right, then it's not just a matter of a preliminary injunction.
If the petitioners' position is accepted, then all the possible remedies under 1983.
Now, what's involved in this case between these parties, of course, is attorney's fees, but the implications of this case and the questions go much farther than that.
And I would submit that allowing... not only allowing.
We've already allowed States to entertain them, which they may do if they want, but requiring them to enforce Federal remedies in situations where Congress has said those same Federal remedies we withhold in Federal court I think is truly anomalous indeed.
Unknown Speaker: May I ask you a question about, sort of the way the case developed?
The complaint, as I read it, doesn't say what provisions they're relying on until they get to Count 3 and they say they're relying on 1983.
The Oklahoma supreme court in its opinion said, we allowed a refund to plaintiff based upon the refund procedures in 68 O.S. 1981 section 226.1, and so forth.
I don't understand that the plaintiffs relied on those refund procedures in their pleadings.
Did they, or am I mistaken?
Mr. Johnston: Yes, Your Honor.
As a matter of fact, in reading from the joint appendix at page 20, which is a part of the petition, the plaintiff's petition or complaint in this case--
Unknown Speaker: Right.
Mr. Johnston: --Where they cite jurisdiction, they cite that this Court has jurisdiction of this cation under 68 O.S. 1981 section 226, and title 12, 1651.
1651 of title 12--
Unknown Speaker: Oh, I see.
Mr. Johnston: --is the Declaratory Judgments Act, and so they specifically invoked the court's jurisdiction to entertain this action under 226.
Unknown Speaker: And you're in effect saying that they pleaded in the alternative a State remedy and a Federal remedy, and it was within the power of the State court to say we'll grant the State relief and we just won't grant the other relief.
Mr. Johnston: Actually, I have a little bit sharper position than that.
I think they didn't plead in the alternative, they just appended a 1983 statement in order to claim attorney's fees because they weren't allowed under State law--
Unknown Speaker: Well, it's their... their Count 3, when they... I mean, you're right about the jurisdictional provision, but when they get around to asking for relief they seem to rely... I thought they had relied, and I misread it, I see, on the Federal statute only.
But supposing they had just pleaded the Federal statute, say the court of general jurisdiction... we're not going to ask you to apply your refund procedures, but we're going to ask you as a matter of Federal law for precisely the same relief that we could get under State law, but we want it under the Federal statute.
Mr. Johnston: --I believe that they would have a... I think they would have a problem.
Unknown Speaker: And they just never cited the refund procedures.
Mr. Johnston: Because I don't think that basically would be available under 1983.
First, if they were not concerned about refunds, they're either going to be in a position of simply suing to declare the statute unconstitutional.
Unknown Speaker: No, no, I'm saying they say the relief we want is, we're going to pay the taxes now, so you won't have the normal... we think that's a fair requirement.
We're going to... and we're going to pay the taxes.
We merely want a refund, and after we get a refund, an injunction against future imposition of taxes, which we think we're entitled to as a matter of Federal law, and it doesn't interfere with any State policy except your unwillingness to pay attorney's fees.
Mr. Johnston: Well, I would submit that it's not that... what they're asking for in your scenario would not be provided for under Federal law, because they would be in a position of saying we want a refund under Federal law, but you're suing the State for the refund.
That is an action against the State, notwithstanding the--
Unknown Speaker: But we're doing it in State court.
We're doing it in State court.
Mr. Johnston: --We're doing it in State court, but if the only basis--
Unknown Speaker: There's no Eleventh Amendment problem.
Mr. Johnston: --for a refund is 1983, it doesn't authorize one, at least according to the cases, because that in effect is a suit for refund against the State under 1983, and the State is a person.
I don't think that 1983 actions, there is no Federal remedy or Federal cause of action under 1983 for a refund of State taxes.
Unknown Speaker: Well, why not?
The language of 1983 is pretty broad about any, you know... I can't quote it to you, but it's pretty broad, and if there's been a collection of taxes in violation of constitutional rights, why... I don't understand.
Mr. Johnston: Because the language of the statute itself says that it has to be an action against a person, and the refund action is against the State.
Unknown Speaker: You're asking us to reject the footnote that Justice Scalia was addressing himself to a little earlier.
Is that part of your case?
No, only for damages, you're saying.
Mr. Johnston: Yes.
Unknown Speaker: --went to injunctive relief.
Mr. Johnston: Yes.
Unknown Speaker: Oh, I see.
Mr. Johnston: And so I was talking about if they say, we want a refund under Federal law, it's not there, because 1983 doesn't provide it because an action for refunds is against the State.
Unknown Speaker: Yes, but... but so what?
I mean, why isn't it an action--
Mr. Johnston: Because an action against the State for damages, for refunds, is not... has not been permitted under 1983.
Unknown Speaker: --And that was the holding of Will.
But not under--
Mr. Johnston: I believe so.
Unknown Speaker: --Not under... but that was an Eleventh Amendment case, wasn't it?
Mr. Johnston: I am not aware--
Unknown Speaker: Wasn't that an Eleventh Amendment--
Mr. Johnston: --for any purpose that... and, of course, I don't think petitioner--
Unknown Speaker: --Your position is that our footnote in Will was not confined or controlled by the Eleventh Amendment.
It was just an interpretation of the meaning of 1983.
Mr. Johnston: --I read it as simply for what it says, is that persons... and I read it for being... for purposes of 1983.
Unknown Speaker: And a State is not a person.
Mr. Johnston: A State is not a person, and therefore I believe an action for damages in the nature of refunds I do not believe would be permissible under 1983, so my answer, I think, to your question is that they would not be successful if they just disregarded State law, because their only right to a refund is provided by State law.
Unknown Speaker: But they would have succeeded in one of their objectives, which was to get the State law declared unconstitutional.
Mr. Johnston: They would have.
Unknown Speaker: All right, so under normal 1983 law they would be a prevailing party entitled to attorney's fees, and the only way I guess you can avoid it is if the State has a right not to put 1983 in State court in tax matters.
I can't think of any other way to avoid it, and then the only way--
--Well, they're not entitled to attorney's fees anyway, are they?
I mean, as I read 1988 it says the court in its discretion may allow the prevailing... why don't you just argue that it would be an abuse of discretion for Federal courts in cases like this to allow the attorney's fees... for State courts?
Mr. Johnston: Well, for one reason I don't believe that we need to take that position.
I don't think we are required under Federal law to argue that after the trial is completely over.
I think we can argue the question of whether or not we have to apply any... or grant any Federal remedies.
We can argue that in the first instance, and that is our position, that where you have complete remedies under State law that we need not entertain a 1983 action to a part of the same--
Unknown Speaker: Right, and is that just in tax cases, or is that also in a case where there is State laws of assault and battery and all kinds of other laws, and the person under the Fourteenth Amendment makes exactly the same claim for attorney's fees, and does this rule apply there, too?
Mr. Johnston: --I'm suggesting it is only in State tax--
Unknown Speaker: And the reason it's only... the only way, I guess... I'm not arguing with you as much as I'm trying to think it through, to tell you the truth.
But the only basis you have for saying that is because of the Tax Injunction Act, and now the Tax Injunction Act, you'd have to look into the policies underlying that.
And then once I get to the policies underlying it, that's why I came back to the idea which is only experimental about the possibility that that act justifies doing away with the exhaustion requirement, but that's the structure of the argument.
There isn't some other problem that's caused, or some other reason.
Mr. Johnston: --That is the structure of the argument, and the argument is that both 19... 1983 and its attendant 1988 and section 1341, the Tax Injunction, of course they are both expressions of policy.
Every act of Congress is, and at the same time, we had a Congress wanting to make sure that there were substantive remedies available and usable for persons whose rights, substantive rights under the Constitution and Federal laws had been violated.
They wanted to make sure that those people had a remedy, and of course when it initially was passed, even if the remedy was on the books, often it wasn't enforced till they provided a Federal forum and a Federal remedy.
They certainly provided a Federal remedy now even if it's enforced in the State court.
But at the same time, that danger did not then, and certainly does not now exist in the area, the realm of State taxes, and that same Congress who expressed the policy under 1983 has also expressed a policy under 1341 that the Federal Government, including Federal remedies, should stay out of State tax matters basically only so long as there is an adequate remedy, to the contrary of what 1983 started out to be.
Unknown Speaker: But that seems to undermine, at least in part, the Dennis case, because isn't... if you're right about the bottom line in Dennis being no counsel fees, wasn't that kind of a Pyrrhic victory?
Mr. Johnston: I suggest that the only question that was really presented in Dennis is whether or not the Commerce Clause granted rights and privileges which would be... a violation of which would be protected, or a remedy given under 1983, and I can envision, possibly, violations by State actors of the Commerce Clause in areas that have nothing to do with taxation.
Unknown Speaker: But that case itself happened to be a tax case.
Mr. Johnston: That case itself is certainly a tax case.
It was one that... Oklahoma and Nebraska were two of the seven States that were all sued on the same day by the same people for the same thing.
This is part of it, Dennis and this case.
But I suggest that Dennis, when it came back on remand to the State courts, I understand that attorney's fees were awarded.
I am not aware that the question of whether or not they needed to be for reasons, not whether the Commerce Clause provides a basis for 1983, but whether or not State remedies are adequate and therefore the State may not even entertain 1983 in the first place I don't believe were ever argued or considered in Dennis.
So in that respect, if I am right and it had been considered, then I think your answer would... could be yes, it would have been a Pyrrhic victory.
It didn't happen, and so I can't tell exactly, but I do believe that the danger to the States and their ability to plan and administer their taxes is quite substantial, and could be substantial if the Court were to open up 1983 to the point that it says Congress intended that you must apply any remedies that might be available under 1983 even though you otherwise have adequate remedies.
It could cause, I believe, a great disruption in State administration of their own tax affairs.
I do not believe that was the policy or intent of Congress, and I believe they showed that policy when they prohibited the very same thing, prohibited the Federal courts from doing the same thing.
So I would suggest that if we accept the petitioner's argument, it is to accept the concept that Congress intended to prohibit the Federal courts from interfering or supplying Federal remedies in State tax matters, and then at the same time, without ever saying so, they intended to mandate that State courts apply those Federal remedies.
I do not believe that was the intent of Congress, and I believe that the decision below should be affirmed.
Chief Justice Rehnquist: Thank you, Mr. Johnston.
The case is submitted.
Unknown Speaker: The honorable court is now adjurned until tomorrow at ten o'clock.
Argument of Speaker
Mr. Speaker: The opinion of the court in number 94-688, National Private Truck Council v. the Oklahoma Tax Commission will be announced by Justice Thomas.
Argument of Justice Thomas
Mr. Thomas: This case comes to us on a writ of certiorari to the Oklahoma Supreme Court.
In order to retaliate against states that impose what it considers discriminatory taxes on trucks registered in Oklahoma.
The state of Oklahoma similarly imposed taxes on trucks that conducted business in that state but were registered in the offending states.
Pursuant to state law and 42 U.S.C. 1983 petitioners filed a class action in the state of Oklahoma courts challenging the taxes as unconstitutional.
Petitioners sought refunds declaratory and injunctive relief as well as attorney’s fees under section 1988.
After a series of decisions in the Oklahoma courts and the remand from this court, the Oklahoma Supreme Court held that the taxes were unconstitutional and ordered Oklahoma to award refunds pursuant to state law relying upon the principle of interstate uniformity.
The court did not grant injunctive or declaratory relief under 1983.
The court reasoned that petitioner should not secure relief in state court that could not be awarded in Federal Court because it granted no relief under section 1983 the court did not award attorney’s fees under section 1988.
In an opinion filed with the clerk today we affirm the long standing federal reluctance to interfere with state taxation leads us to conclude that in state tax cases congress did not authorize courts to issue declaratory or injunctive relief when an adequate remedy exists at law.
Our cases have made clear that injunctive and declaratory relief have the potential to disrupt the administration of state taxes.
Before the passage of section 1983 this potential for disruption led to the establishment of a principle of noninterference with state taxation when there is an adequate remedy at law.
As our subsequent cases indicate section 1983 did not disturb this principle.
Construing § 1983 in light of this principle we conclude that congress has not authorized courts to award equitable or declaratory relief when an adequate remedy at law exist.
Justice Kennedy has filed a concurring opinion.