Opinion ID: 336580
Heading Depth: 2
Heading Rank: 2

Heading: Federal Equity Practice

Text: 12 Before the passage of the 1937 Act, the Supreme Court had announced that federal courts of equity would not grant relief against state taxes, even when challenged on constitutional grounds, as long as the state provided an adequate remedy. See, e. g., Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed. 447 (1932); Henrietta Mills v. Rutherford County, 281 U.S. 121, 50 S.Ct. 270, 74 L.Ed. 737 (1930). In Matthews, the Court articulated the rationale of this equity principle: 13 The scrupulous regard for the rightful independence of state governments which should at all times actuate the federal courts, and a proper reluctance to interfere by injunction with their fiscal operations, require that such relief should be denied in every case where the asserted federal right may be preserved without it. Whenever the question has been presented, this Court has uniformly held that the mere illegality or unconstitutionality of a state or municipal tax is not in itself a ground for equitable relief in the courts of the United States. If the remedy at law is plain, adequate, and complete, the aggrieved party is left to that remedy in the state courts . . . . 14 284 U.S. at 525-26, 52 S.Ct. at 220. 15 After passage of the 1937 Act, the Court rejected efforts to have federal courts issue declaratory judgments on the validity of state taxes. Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 63 S.Ct. 1070, 87 L.Ed. 1407 (1943). The Court did not decide whether the Act itself precluded suits, 319 U.S. at 299, 63 S.Ct. 1070, but it continued to rely on the principles of the Matthews lines of cases: 16 Interference with state internal economy and administration is inseparable from assaults in the federal courts on the validity of state taxation . . . . 17 319 U.S. at 298, 63 S.Ct. at 1073. 18 In Steffel v. Thompson, 415 U.S. 452, 472, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974), the Court has recently reaffirmed the comity principles of Matthews and Great Lakes. See also Moe v. Confederated Salish and Kootenai Tribes of Flathead Reservation, --- U.S. ----, 96 S.Ct. 1634, 48 L.Ed.2d 96, 44 U.S.L.W. 4535, 4537 (1976); Lynch v. Household Finance Corp., 405 U.S. 538, 542 n. 6, 92 S.Ct. 1113, 31 L.Ed.2d 424 (1972); Perez v. Ledesma, 401 U.S. 82, 126-28 and n. 17, 91 S.Ct. 674, 27 L.Ed.2d 701 (1971) (Brennan, J., concurring). 19 From this review of the legislative history of the 1937 Act and federal equity practice, it appears that, as a general rule, injunctive or declaratory relief against state taxes can be sought in federal court only when the forums provided by the state are inadequate to the task. We turn then to an examination of the remedies provided these plaintiffs under Pennsylvania law.