that afternoon your honors may have please the court my name is john egan i represent the plaintiffs are used as in this case i'm going to try to reserve two minutes for  the tax injunction act applies to this case and it should have been remanded in its entirety to the state court the tax injunction act is jurisdictional it removes anything that would otherwise be federal jurisdiction and and requires that the decision be made by the state court there was some discussion in the briefings down below as to whether or not the federal claims were severed from the stay claims the parties are in agreement that they are not severable so if the tax injunction act applies the case has to be remanded to state court for decision in the first instance could you explain  marketing has i think three potential applications to this case first it didn't address comedy colorado did not argue comity so even if the tax injunction act does not apply we have argued comity and so  talk about just two things one is the lower court based its finding that the tax injunction act did not apply on a finding that in joining the collection of these taxes state taxes would not result in a change in in revenue to the state court to the state or the state of oregon no it's not the net receipts at the end of the year may or may or may not be affected but as she as judges justice ginsburg pointed out in her concurrence which was she said she understood this to be the case and judge justice thomas didn't i didn't argue with it well no wait a minute  would it would will because they wouldn't here's why because these people are all minimum wage employees the amount of tax that they owe over the course of the year does not exceed the amount that's that's for the part of the tips that ups that apply and there's lots of instances where they want no tax at all if the tips are less than twenty dollars in a month they're not supposed to be have withholding taken from that or if their tips aren't revenues sure and i understand that previous ninth circuit authority have focused on whether the states revenue is affected and that's one of the things that i want to talk about direct marketing shift the focus from whether or not a state's revenue is ultimately affected to whether or not the plane to visit tempting to block the collection of taxes you know the state has a process by which it collects and then refunds and so you can't look at what the zero is at the end of the year or a year and a half under direct marketing you have to instead look at what is the specific act that the plaintiffs are intending to enjoin and here there's no question that the assessment collection that weren't at issue in direct marketing because it wasn't a collector that was the plaintiff here there's no question that the plaintiffs are attempting to enjoin the assessment and collection of this tax from their paychecks and you know that the colorado had applying the correct definition to restraint and suit cannot be understood to restrain the assessment levy or collection of taxes the state tax if it merely inhibits those activities why is this more than inhibiting because where the plaintiffs have asked for an injunction against starbucks collecting this tax well they're going to have to collect some tax ri tips you're saying they don't withhold at all they shouldn't they shouldn't withhold anything and so because they don't mean how they how do the or how does oregon ultimately decide how much taxes applied to the boy income stream if there's no withhold not have to rely on the employees to report at the end of the year exactly yes that's the process that they would go through and because none of these plaintiffs would owe any taxes on those tips they've already paid more than enough taxes through the withholding on their wages to cover all of the taxes that would come out of their taps they wouldn't go any additional taxes at the end of the year they report their additional tests on their return at the end of the year and they'd still get a refund so what oregon focuses on with these wage in our laws is making sure that employees get their full wages on payday because they're so near the minimum wage that any amount that you drop them below that endangers them in terms of repairs eating and then being able to have their homes so those are things about the tax injunction act and how it's affected or not affected by d m a i also want to point out with the underlying violation that we're looking at with or again unreported tips which is what we're dealing with here have never been subject to withholding in oregon oregon does not allow estimated estimating tips at all you can only collect taxes yes  of assessment and collection let there is no issue of a levy in this case but assessment in collection so if if if for some reason that's so on a technical basis not found to apply comity can still apply it's why it's broader than the tax injunction act and based on general principles of federalism and letting state courts be the ones to decide in the first instance the application of state tax law but that's a credential word there's no complete preemption because there's no cause of action provided in terms of conflict preemption there's still no preemption because it's not impossible to comply with both the state it is a code so you can only estimate the amount of tips that an employee will report and starbucks specifically instructs all of its employees not to report any they're not doing what the code allows them to do and that's what distinguishes this from things like bright right versus bechtel where the court said look we're going to skip past the tax injunction act because there's just no even colorable basis for this going forward are suing a california employer for following california tax regulations and that is not a cause of action so we're dismissing you that's not what we have in this case in this case there's no question that starbucks is not follow the administrative rules required to estimate tips they just put out a guess they're not allowed to put out a guess they can estimate how much the employees will report it's like if you have a piece of bread and competent butter on one corner you're allowed to spread that peanut butter over this over the surface of the bread so that it's even you know report tips once a month starbucks is allowed to estimate those tips over the course of the two or more paychecks that happened during that month you know the employees never report anything starbucks just made up a number  proved a trial so what is the claim for a refund when we pled the statutory causes of action we were trying to incorporate all you know we said this incorporates all of the above and one of the above things was a wrongful deduction for the workers benefit fund which we had limited evidence for and could not make class wide allegations based upon so the and as we've made clear at several stages during to the district court the only thing the plaintiffs are asking to recover money for damages for is unpaid lunches and the workers benefit funded auctions they're not asking for any of these tax amounts back they've already received those in the regular course in the in the normal refund process but oregon health  for defendant apple e starbucks corporation as to dura stiction the district court correctly rejected plaintiff contention that either the tax injunction act or comity strips federal court jurisdiction over this case not only did this court in bright deny such a challenge but this court's functional approach under the cia requires at least some net reduction in state tax revenue as their own appeal brief to make clear plaintiffs do not challenge their ultimate tax liability to the contrary plainest say that they've already received refunds of any amounts that were allegedly improperly withheld nor his former employees did they have standing to seek any sort of prospect of relief so this suit poses no threat to state tax revenue either past or future and in any of that this is a highly unusual case in which to be seeking tax injunction act relief or comedy relief this is not a suit in which the state here is acting as a defendant trying to protect enforcement of its laws and which you almost always see when the tax injunction act or comity arises instead we have a suit by a private plaintiff bringing a private lawsuit purportedly to seek compliance with oregon tax law not to challenge it we're just outside of the ballpark of when tax injunction act and comity applies and we're aware of no case in which it's been applied in circumstances like these they don't cite any such case so so we think federal court jurisdiction as both the magistrate judge and the district court concluded was completely proper in this case now as to the dismissal there's no matter how hard plaintiff tried to rewrite their complaint or to plead around the internal revenue code provisions federal law bars their suit attacking starbucks tax withholding practices as this court explained in both brennan and then bright federal laws designed to protect an employer from suit in connection with its role as a withholding agent and thus any challenge to starbucks withholding practices must be brought against the government if at all the whole idea is to immunize four three in the analog oregon law provision two thirty four zero three all of the point of those is to cut off suit against employers when they're functioning in tax withholding practices if you want to challenge the tax withholding practice you you do it through your ministry to function of a refund action and then if you lose there you can file suit against the united states it would be exceedingly odd to be litigating the propriety of federal tax withholding practices with the federal government on the sidelines and that only that's the whole reason why the internal revenue code mechanism is set up the way it is if you're going to challenge their role as a withholding agent for the federal government the federal government should be involved in there trying to to circumvent that and this court has continuously cut that off and bright in brown and other circuits have done the same thing in the cases we cite the briere a case which we submitted the twenty a j letter on and win the case and the third circuit there is no authority they have no authority where a suit honor and that's that's why the tax injunction act doesn't apply here they're not challenging the validity of state law they're not challenging the administration of state law just like the just district point pointed out not only are they not even challenging state law the validity of state law they're not even challenging any net effect on the ultimate state revenue either the income is taxable or it's not and they've already said in their appeal brief this is on page fifty one we've already gotten back all the money that was improperly withheld as refunds so there's simply this isn't in the ballpark of the tax injunction act and also so we agree with that submission if anything but it was a harder case because it wasn't as crystal  clear as in this case but this case is crystal clear there just isn't any room to be applying the tax injection as i said this would be an exceedingly odd case in which to expand the scope of the tax injunction act when when you when the state is nowhere present here the state is not asserting any of these interests and the suit is purportedly designed to compel compliance with oregon tax law not to challenge it with your honor the this still would be in federal court because the basis for federal jurisdiction is essentially diversity jurisdiction katha so they would still be in federal court but any such amendment would be futile even if you stripped out the federal withholding portion which they say is non several but even if you strip that out and simply view this is the state law cause of action challenging withholding under oregon law oregon has the the an analog provision to the three and if you look at the text of that provision and it's quoted the district court also relies on that provision with respect to the oregon piece of it done excerpts of record page thirty nine if you looked at the text of that provision not only does it get to the same ideas internal revenue code section thirty four or three but is actually worded even more broadly it uses the word that any suit in respect of taxes that are withheld and then it says whether it's in compliance or intended compliance shall not be brought against the employer so if anything their claims under oregon law are even harder than under federal law now there isn't as much case law under oregon law we've checked  cited sixteen times but never with respect to this particular language only with respect to other parts of the provision but other states have essentially as you might expect their own analogues to section thirty four zero three  and in those other states they almost without exception are interpreted to be coextensive with the federal provision so if it's barred under the federal provision it would be futile to have remand then certainly it was not an abuse of discretion for the district court to dismiss this with prejudice rather than leave to amend they have never sought leave to amanda at any point in this suit and so certainly even if it were a close call and we don't think it is it was not an abuse of discretion to do so a few points to address first all of these statutory bases for defeating liability are affirmative defenses and they cannot a they cannot yield federal question jurisdiction and b they should not have been addressed without even having been pled let alone proven on behalf of the starbucks the oregon analogue to the federal law requires that they show that the money was deducted from wages which is excluded from the definition of wages under oregon law that have been paid over to the government which they have neither pled nor proven and that it be in compliance or intended compliance which they also have not platter proven and i don't think that they can prove that this was an intent in compliance with the oregon tax law because of several facts that are case yet but the behind the scenes of this is going to come into play in discovery when they're trying to prove that this was in intended compliance with the tax law and we can prove that it wasn't so the other thing i want to point out is the far case it was  decided in the context of a levy instead of in an employer's specific withholding under the income tax but that did say that the the you cannot escape liability if you proceed far beyond the at the protection of  statute you know in that case it was levied wages and the person in the employer instead levied workers compensation benefits the code says workers compensation benefits can't be levied and so the court allowed the plaintiff to proceed despite the the parallel in immunity statutory provision under the levy section of the courts as if you can sue because they did something that's not allowed by the statute there aren't any cases saying that with regard to you know withholding from wages but there are many cases saying you can't do it either for specifically things that are with that are completely without the administrative rubric of that the district court did not address comity at all didn't even address the argument there is standing in oregon even though not article three standing for these particular plaintiffs to address prospective relief on behalf of people that have similar injuries to theirs and the tax in believe that there's no jurisdiction in this case anybody if you disagree then yes we will see really to amend we filed a parallel suit alleging federal cause of action in the event that federal jurisdiction is found you this court does find jurisdiction then we've got a separate case pending that will move to a man to include these claims in a just the state not just the state claims correct yeah ok thank you thank you counsel thank you for your arguments the case is submitted