In the

United States Court of Appeals

For the Seventh Circuit

No. 08-1497

SCOTT AIR FORCE BASE PROPERTIES, LLC,

a limited liability company,

Plaintiff-Appellant,

v.

COUNTY OF ST. CLAIR, ILLINOIS,

a body corporate and politic,

Defendant-Appellee.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 07-cv-00773—J. Phil Gilbert, Judge.

ARGUED SEPTEMBER 26, 2008—DECIDED NOVEMBER 14, 2008

Before RIPPLE, MANION, and SYKES, Circuit Judges.

MANION, Circuit Judge. Scott Air Force Base Properties,

LLC (“the Company”), brought this action against the

County of St. Clair, Illinois (“the County”) seeking a

declaratory judgment that its leasehold interest in two

parcels of land located on the Scott Air Force Base is not

subject to the property tax which the County assessed. The
2 No. 08-1497

district court held that the Tax Injunction Act (“TIA” or

“the Act”), 28 U.S.C. § 1341, divested it of subject matter

jurisdiction and dismissed the case. The Company

has appealed. We affirm.

I. Background

The Military Housing Privatization Initiative (“MHPI”),

enacted in 1996 as part of the National Defense Authorization Act, Pub. L. No. 104-106, § 2801, 110 Stat. 186, 544-51

(codified as amended at 10 U.S.C. §§ 2871-2885), is intended to attract private investment and expertise to

build housing for members of the military and their

families. Developers submit competitive bids and the

federal government leases land to the successful bidder

to construct housing developments. This process provides necessary housing on military bases with no

capital cost to the government and at the same time

supplies the developer with reliable tenants with a

housing allowance to pay the rent.

The Company saw this as an attractive opportunity and

entered into a lease agreement with the United States

through the Secretary of the Air Force, agreeing to construct, operate, and maintain rental housing units for

military personnel on land located on the Scott Air Force

Base for a term of fifty years. The government also executed to the Company a quit claim deed to improvements on the land and entered into a restrictive

covenant and use agreement with the Company.

While this appeared to be an attractive investment

opportunity for the Company, the County of St. Clair,
No. 08-1497 3

An ad valorem tax is “[a] tax imposed proportionally on the 1

value of something (esp. real property), rather than on its

quantity or some other measure.” BLACK’S LAW DICTIONARY 1469

(7th ed. 1999).

Illinois (where Scott Air Force Base is located) also saw

this as an attractive opportunity to obtain some tax revenue. The County added the Company’s leasehold

interest in two parcels of the leased land to the County’s

tax assessment rolls and assessed an ad valorem tax in 1

the amount of $15,681,300.00 on the Company’s interest

in each parcel for the 2007 tax year. In response, the

Company filed a complaint for declaratory judgment in

the United States District Court for the Southern District

of Illinois, asserting that the assessment was contrary to

various provisions of the United States Constitution,

federal statutory law, and Illinois law, and invoking the

district court’s subject matter jurisdiction under 28

U.S.C. § 1331. The Company sought a declaratory judgment that its leasehold interest was not subject to the

County’s assessment and that all transactions entered

into under the MHPI were exempt from state taxation.

The County moved to dismiss for lack of subject matter

jurisdiction under Federal Rule of Civil Procedure 12(b)(1),

contending that the TIA removed the district court’s

jurisdiction to grant the declaratory relief the Company

had requested. In response to the County’s motion, the

Company argued that the Act’s jurisdictional bar did not

apply because the declaratory judgment sought by the

Company concerned a claim of preemption under federal law.
4 No. 08-1497

The County also claimed that inasmuch as the Company 2

had not yet applied for an exemption from Illinois state tax, no

actual controversy existed because the Company had not shown

it had suffered or would suffer an actual or imminent injury-infact. The Company countered that it had suffered an injury-infact and that an actual controversy between the parties arose

when the County added the leasehold interest in the two

parcels to its assessment rolls and assessed the parcels for

the 2007 tax year.

The district court did not address these arguments. However,

as an alternative to its primary holding on the effect of the

TIA, the court did hold that no actual controversy would exist

were it to interpret the MHPI apart from the tax assessment

because the Company would have no injury-in-fact and the

requested interpretation would be an advisory opinion. In so

holding, the district court apparently was responding to the

Company’s argument that it was not seeking to enjoin, suspend,

or restrain the County’s assessment, levy, and collection of the

ad valorem tax but rather was seeking a declaration that the

MHPI preempts the County’s authority to determine whether

it could assess, levy, or collect the tax. The court also concluded that the Company lacked standing to seek a declaratory

judgment that the MHPI forbids the assessment of state

taxation because such a determination would not necessarily

redress the Company’s injury.

(continued...)

The district court granted the County’s motion to

dismiss. The court concluded that because a plain, speedy,

and efficient remedy was available to the Company in

the Illinois courts to challenge the County’s tax assessment, the TIA divested it of jurisdiction to render

the declaratory relief which the Company sought. The 2
No. 08-1497 5

(...continued) 2

Because we ultimately conclude that the TIA divested the

district court of jurisdiction to hear the case, we need not

address any of these issues. 

Company appeals.

II. Discussion

Our review of the district court’s dismissal of the case

for want of subject matter jurisdiction is de novo, and

we accept all facts stated in the complaint as true and

draw all reasonable inferences in the Company’s favor.

Newell Operating Co. v. Int’l Union of United Auto., Aerospace,

& Agric. Implement Workers of Am., 532 F.3d 583, 587

(7th Cir. 2008).

The Company asserts that the district court erred by

not addressing two threshold questions before reaching

the TIA: 1) whether the subject parcels were under the

exclusive legislative jurisdiction of the United States

pursuant to Article I, Section 8, Clause 17 of the Constitution, and 2) if so, whether Congress authorized

state taxation of the land through the MHPI or the lease

agreement the parties entered in accordance with the

statute.

In support of its position, the Company cites Humble

Pipe Line Co. v. Waggonner, 376 U.S. 369 (1964), and Atlantic

Marine Corps Communities, LLC v. Onslow County, North

Carolina, 497 F. Supp. 2d 743 (E.D.N.C. 2007). Humble

Pipe Line was an appeal from the Supreme Court of Louisi-
6 No. 08-1497

ana where the Supreme Court of the United States considered “whether the United States has such exclusive

jurisdiction over a . . . tract of land . . . on which the

Barksdale Air Force Base is located that Louisiana is

without jurisdiction to levy an ad valorem tax on

privately owned property situated on the tract.” 376

U.S. at 370. However, the Court did not mention

the TIA—nor should it have—because the case was litigated in the Louisiana state courts and never appeared

in a district court of the United States. While Humble

Pipe Line may or may not be of some utility to the

Company on the merits of its claims, it has no bearing

on the question of the district court’s jurisdiction in light

of the TIA.

In Atlantic Marine Corps, a company had entered into

a fifty-year ground lease of certain housing units located

on several Marine Corps installations pursuant to the

MHPI. 497 F. Supp. 2d at 748. The company sought a

declaratory judgment that these properties were under

the exclusive jurisdiction of the federal government

and thus not subject to ad valorem taxation by two counties. Id. at 745-46. The district court found that the properties were not subject to state taxation because they

were under the exclusive jurisdiction of the United

States which the government had not surrendered in

the MHPI. Id. at 758. Although Atlantic Marine Corps is

facially analogous to the instant matter, the Company’s

reliance upon it is misplaced.

First, the TIA was not mentioned in the Atlantic Marine

Corps opinion; therefore, the case does not directly
No. 08-1497 7

And, as we discuss below, the application of the TIA turns on 3

the nature and effect of the relief sought when a plaintiff alleges

that a state tax is unlawful—not the source of law under which

the tax is challenged.

support the Company’s argument that threshold

questions must be reached before the Act comes into

play. Second, to the extent that Atlantic Marine Corps

may be read to suggest that the TIA has no operative

effect until constitutional or other federal issues pertaining to the merits of a case are addressed, we reject

that view. Were district courts to declare that properties

assessed with state taxes are not subject to such taxes

due to the operation of the Constitution or other

federal law before reaching the jurisdictional question of

the TIA, the Act would be rendered nugatory. Such

declarations on the merits of cases would effectively

“restrain or suspend” state taxation procedures and

thereby diminish or encumber rightful state tax revenue—which, as we discuss below, is exactly what the

TIA proscribes. Rather, because it potentially divests

the district courts of subject matter jurisdiction, the TIA

is itself a predicate consideration in the jurisdictional

determination. “The requirement that jurisdiction be 3

established as a threshold matter ‘spring[s] from the

nature and limits of the judicial power of the United States’

and is ‘inflexible and without exception.’ ” Steel Co. v.

Citizens for a Better Env’t, 523 U.S. 83, 94-95 (1998) (quoting

Mansfield, C. & L.M. Ry. Co. v. Swan, 111 U.S. 379, 382

(1884)). Indeed, “[i]t is axiomatic that a federal court

must assure itself that it possesses jurisdiction over the
8 No. 08-1497

subject matter of an action before it can proceed to take

any action respecting the merits of the action.” Cook v.

Winfrey, 141 F.3d 322, 325 (7th Cir. 1998). For these

reasons, we find the Company’s “threshold questions”

argument unpersuasive.

We now consider the TIA, which provides that “[t]he

district courts shall not enjoin, suspend or restrain the

assessment, levy or collection of any tax under State

law where a plain, speedy and efficient remedy may be

had in the courts of such State.” 28 U.S.C. § 1341. The TIA

divests the district courts of subject matter jurisdiction

in “cases in which state taxpayers seek federal-court

orders enabling them to avoid paying state taxes.” Hibbs v.

Winn, 542 U.S. 88, 107 (2004). Put another way, if the

relief sought would diminish or encumber state tax

revenue, then the Act bars federal jurisdiction over

claims seeking such relief. Levy v. Pappas, 510 F.3d 755, 762

(7th Cir. 2007). The TIA strips the district courts of the

power to hear suits seeking not only injunctive but also

declaratory relief from state taxes. California v. Grace

Brethren Church, 457 U.S. 393, 411 (1982); RTC Commercial

Assets Trust 1995-NP3-1 v. Phoenix Bond & Indem. Co., 169

F.3d 448, 453 (7th Cir. 1999). In addition, the Act applies

to any state tax, including municipal and local taxes.

Hager v. City of W. Peoria, 84 F.3d 865, 868 n.1 (7th

Cir. 1996). Moreover, the TIA’s ambit is not confined by

the law under which a state tax is challenged, for even federal constitutional claims do not render the Act inapplicable. Schneider Transp., Inc. v. Cattanach, 657 F.2d 128,
No. 08-1497 9

A few exceptions to the TIA’s general rule do exist. The 4

Supreme Court has held that the Act does not bar federal

jurisdiction when the United States sues to protect itself or one

of its instrumentalities from an unlawful state tax. Dep’t of

Employment v. United States, 385 U.S. 355, 358 (1966). It is

apparently still an open question whether an instrumentality of

the United States with power analogous to that of a government

department or regulatory agency may sue in its own right and

evade the Act’s jurisdictional bar without the joinder of the

United States in the action. See Arkansas v. Farm Credit Servs. of

Cent. Arkansas, 520 U.S. 821, 831 (1997). Because the United

States is not a co-plaintiff in this case and inasmuch as the

Company has not claimed that it is an instrumentality of the

federal government, we need not consider these exceptions

to the TIA.

A remedy is not “plain” if uncertainty regarding its nature 5

exists. Rosewell, 450 U.S. at 516-17 (quoting Tully v. Griffin, 429

U.S. 68, 76 (1976)). A remedy is not “efficient” if it “imposes . . .

unusual hardship . . . [or requires] ineffectual activity or an

unnecessary expenditure of time or energy.” Id. at 518. The

Supreme Court has held a state court refund process that takes

(continued...)

131 (7th Cir. 1981).4

Of course, as its plain language indicates, the TIA’s

jurisdictional bar is conditioned upon the availability of a

“plain, speedy and efficient remedy” in state court. Grace

Brethren Church, 457 U.S. at 411. The “plain, speedy and

efficient remedy” requirement is construed narrowly.

Id. at 413. Accordingly, the Supreme Court has held

that this provision mandates only that “a state-court

remedy meet[ ] certain minimal procedural criteria.”5
10 No. 08-1497

(...continued) 5

two years to pursue satisfies the speedy remedy requirement.

Id. at 520.

Rosewell v. LaSalle Nat’l Bank, 450 U.S. 503, 512 (1981).

However, the remedy must “provide[ ] the taxpayer with

a ‘full hearing and judicial determination’ at which she

may raise any and all constitutional objections to the

tax.” Id. at 514 (quoting LaSalle Nat’l Bank v. County of Cook,

312 N.E.2d 252, 255-56 (Ill. 1974)); accord Hay v. Indiana

State Bd. of Tax Comm’rs, 312 F.3d 876, 880 (7th Cir. 2002).

A plaintiff who seeks to surmount the jurisdictional bar

of the TIA bears the burden of demonstrating the insufficiency of the remedy available in the state court system.

Amos v. Glynn County Bd. of Tax Assessors, 347 F.3d 1249,

1256 (11th Cir. 2003); Chase Manhattan Bank, N.A. v. City

& County of San Francisco, 121 F.3d 557, 559-60 (9th Cir.

1997); see Franchise Tax Bd. of California v. Alcan Aluminum

Ltd., 493 U.S. 331, 340-41 (1990); RTC Commercial Assets

Trust, 169 F.3d at 453-54.

To determine whether the TIA applies, we first need to

examine the kind of relief that the Company sought in

its complaint. See Levy, 510 F.3d at 761-62. In its prayer

for relief, the Company asked the district court to

“declare [that] the leasehold interest of the Plaintiff is

not subject to state taxation” and to “declare [that] all

transactions entered into under the [MHPI] are exempt

from state taxation[.]” Granting such declaratory relief

would doubtless “suspend or restrain the assessment,

levy or collection” of the County’s ad valorem tax and
No. 08-1497 11

Under the Illinois Property Tax Code, a taxpayer who has 6

been assessed on property which he believes to be tax-exempt

can apply for an exemption with a local board of review. 35 ILCS

200/16-70. The taxpayer is afforded an opportunity to be

heard before the board. Id. After the board of review conducts

a hearing and forwards a statement of facts to the Department

of Revenue, the Department decides whether the property is

subject to taxation and informs the board of its decision. Id. The

taxpayer can then seek review of the decision at a hearing

before the Department. Id. at 8-35. After the hearing, the

Department will render a decision and the taxpayer (if still

aggrieved) can petition the Director of the Department of

Revenue for a rehearing. Id. Once a final administrative deci-

(continued...)

would reduce the flow of state tax revenue or tie up

rightful tax revenue. Id. at 762. Therefore, because the

Company was, at bottom, a “state taxpayer[ ] seek[ing] [a]

federal-court order[ ] enabling [it] to avoid paying

state taxes,” the Act divested the district court of subject

matter jurisdiction unless a plain, speedy, and efficient

remedy was unavailable in the Illinois court system.

Hibbs, 542 U.S. at 107.

We turn then to the type of remedy available to the

Company under Illinois law. The Company does not

claim that the Illinois remedy is not plain or speedy.

However, the Company does contend that the Illinois

remedy is not efficient because it must concurrently

pursue two separate administrative avenues in challenging the County’s assessment—the exemption application and the valuation protest. In support of its 6 7,8
12 No. 08-1497

(...continued) 6

sion is issued, the taxpayer may seek review in the circuit court

for the county in which the property is situated. Id. at 8-40. With

exceptions not relevant here, the circuit court has original

jurisdiction of all justiciable matters. ILL. CONST. art. 6, § 9. An

appeal from the circuit court may be taken to the Illinois

appellate courts. 35 ILCS 200/8-40; 705 ILCS 25/8.1, 8.2.

The Illinois Property Tax Code also permits a taxpayer to file 7

a written complaint challenging the assessed valuation of

property with the local board of review. 35 ILCS 200/16-55. After

the tax is paid under protest, an appeal of the board’s decision

can be taken directly to the circuit court in which the property

is located by filing a tax objection complaint. Id. at 23-5; 23-10;

23-15; 16-160. The circuit court will then hear all of the taxpayer’s objections to the assessment in question. Id. at 23-15.

An appeal from the circuit court may be taken to the Illinois

appellate courts. 705 ILCS 25/8.1, 8.2.

The Company also claims that because under Illinois law a 8

lien securing payment of the taxes became enforceable when

the assessments were made, a cloud now rests upon the title

to the land which is only removable by multiple proceedings.

However, the Company does not indicate what type of proceedings (if indeed they are different from the valuation and

exemption ones) would be required to remove such a cloud on

title and cites no law in support of such contention. Inasmuch

as the Company did not advance this argument in the

district court and has failed to sufficiently develop it on

appeal, it is waived. Hojnacki v. Klein-Acosta, 285 F.3d 544,

549 (7th Cir. 2002).

position, the Company cites Georgia R.R. & Banking Co. v.

Redwine, 342 U.S. 299 (1952), for the proposition that a
No. 08-1497 13

state court remedy is inefficient when it would require

a multiplicity of suits. However, the Company’s reliance

on this case is misplaced. In Redwine, the Supreme Court

held that a remedy which would have required the taxpayer to file over 300 claims in fourteen counties in

order to assert its lone constitutional claim was not efficient. 342 U.S. at 303. The Court also found inefficient

a suit-for-refund remedy that allowed the taxpayer

to challenge the actions of only one of four taxing authorities. Id. at 301, 303. By contrast, the matter before us

potentially implicates only two separate proceedings—a

far cry from the onerousness and inefficiency inherent

in pursuing 300 claims in Redwine. In addition, unlike

the remedy in Redwine, the Illinois remedy allows the

Company to challenge the actions of every taxing

authority (in this case, only the County) which has

made an assessment. More importantly, unlike the taxpayer in Redwine, the Company has not shown that it

would have to litigate the same claims in the valuation proceeding as in the exemption one.

While it may be true that a remedy that would allow

the Company to assert its exemption and valuation challenges to the County’s tax assessment in one proceeding would be a relatively more efficient course, the

TIA is not so exacting that it requires a state remedy to

be the best one conceivable. Miller v. Bauer, 517 F.2d 27,

32 (7th Cir. 1975); cf. Rosewell, 450 U.S. at 520 (explaining

that “[n]owhere in the Tax Injunction Act did Congress

suggest that the remedy must be the speediest”). Because

the Company has not shown that the Illinois remedy

“imposes . . . unusual hardship . . . [or requires] ineffectual
14 No. 08-1497

See supra notes 6-7. 9

activity or an unnecessary expenditure of time or energy[,]” we cannot say that it is not efficient. Rosewell,

450 U.S. at 518.

In addition, we conclude—as did the district court—that

the Company would receive a full hearing and judicial

determination of its constitutional claims in the Illinois

system as set forth in the Illinois Property Tax Code.9

Rosewell, 450 U.S. at 514. Indeed, Illinois case law clearly

indicates that Illinois taxpayers are able to litigate

their constitutional and other federal-law challenges to

state tax matters in the Illinois administrative and judicial

system. See, e.g., McLean v. Dep’t of Revenue, 704 N.E.2d

352, 356, 359 (Ill. 1998); Rockford Life Ins. Co. v. Dep’t of

Revenue, 492 N.E.2d 1278, 1279-83 (Ill. 1986); LaSalle Nat’l

Bank v. County of Cook, 312 N.E.2d 252, 255-56 (Ill. 1974);

Ford Motor Co. v. Korzen, 196 N.E.2d 656, 661 (Ill. 1964);

Price Flavoring Extract Co. v. Lindheimer, 14 N.E.2d 476, 477-

78 (Ill. 1938); Home Interiors & Gifts, Inc. v. Dep’t of

Revenue, 741 N.E.2d 998, 1001-03 (Ill. App. Ct. 2001);

Montgomery Ward Life Ins. Co. v. Dep’t of Local Gov’t

Affairs, 411 N.E.2d 973, 976, 980 (Ill. App. Ct. 1980).

The Company lastly contends that even if the TIA is

implicated, “[w]here, as here, a case presents ‘facially

conclusive claims of federal preemption,’ a federal court

need not abstain and may decide the preemption question.” In support of its position, the Company cites New

Orleans Pub. Serv., Inc. v. Council of the City of New

Orleans, 491 U.S. 350 (1989), United States v. Commonwealth
No. 08-1497 15

of Kentucky, 252 F.3d 816 (6th Cir. 2001), and Bunning v.

Commonwealth, 42 F.3d 1008 (6th Cir. 1994). These cases

are inapposite because all address abstention or preemption doctrines and none involve the TIA. Moreover,

when the Act applies, a district court is without

subject matter jurisdiction and thus can make no

further judicial determination. Put another way,

“ ‘[w]ithout jurisdiction the court cannot proceed at all

in any cause. Jurisdiction is power to declare the law,

and when it ceases to exist, the only function

remaining to the court is that of announcing the fact

and dismissing the cause.’ ” Steel Co., 523 U.S. at 94 (quoting Ex parte McCardle, 74 U.S. (7 Wall.) 506, 514 (1868)).

This is precisely what the district court did, and

we approve of that decision.

III. Conclusion

Because a plain, speedy, and efficient remedy was

available to the Company in the Illinois courts, the TIA

divested the district court of subject matter jurisdiction

over the Company’s complaint. Accordingly, the

district court’s dismissal of the action for want of jurisdiction is hereby AFFIRMED.

11-14-08