Opinion ID: 167840
Heading Depth: 2
Heading Rank: 1

Heading: Jurisdiction Under the TIA

Text: 15 As a threshold matter, this court must determine whether the TIA bars federal court jurisdiction over this dispute. The TIA provides that the [federal] 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 Supreme Court has characterized the TIA as a broad jurisdictional barrier. Arkansas v. Farm Credit Servs. of Cent. Ark., 520 U.S. 821, 825, 117 S.Ct. 1776, 138 L.Ed.2d 34 (1997) (quotation omitted). It is a vehicle to limit drastically federal district court jurisdiction to interfere with so important a local concern as the collection of taxes. Id. at 826, 117 S.Ct. 1776 (quotations omitted). Although neither Oklahoma nor IRP raised the issue, this court was concerned the TIA may preclude federal court jurisdiction over Oklahoma's claim. Because federal appellate courts must satisfy themselves of their own jurisdiction even when parties do not contest it, Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986), we requested supplemental briefing from Oklahoma and IRP on the reach of the TIA's jurisdictional bar. After reviewing the parties' arguments, we hold Oklahoma's claim is not barred by the TIA because the relief requested would not impair Illinois' and the Joint Jurisdictions' assessment, levy, or collection of state tax revenue. 16 The TIA may apply to a lawsuit when the relief granted by a federal court will operate[ ] to reduce the flow of state tax revenue. Hibbs v. Winn, 542 U.S. 88, 106, 124 S.Ct. 2276, 159 L.Ed.2d 172 (2004). In this action, Oklahoma seeks to enjoin decisions rendered by the DRC in its November 2003 and April 2004 meetings. These decisions require Oklahoma to compensate Illinois and the Joint Jurisdictions for monies Oklahoma collected as a base jurisdiction, but failed to distribute properly. If successful, Oklahoma concedes its suit will reduce the flow of revenue to Illinois and the Joint Jurisdictions. To determine whether the TIA applies, however, this court must decide whether the relief sought by Oklahoma would reduce the flow of state tax revenue for purposes of the TIA. 17 Under the Plan, vehicle-registration revenue reaches member jurisdictions in a two-stage process. In the first stage, a base jurisdiction collects assessments from vehicle registrants. These assessments may constitute state tax revenue, and therefore a dispute involving this stage of the process may be subject to the TIA. 5 Once a base jurisdiction has collected assessments from vehicle registrants, however, the tax collection process is over. See Int'l Registration Plan, art. I, § 109 (noting a registrant's responsibility to pay individual member jurisdictions ends once that registrant has paid a fee to the base jurisdiction). In the second stage of the process, a base jurisdiction merely apportions and distributes the assessments it has collected to other member states and provinces according to the Plan. See Int'l Registration Plan, art. III, § 300. The second stage involves administration of the Plan, not collection, assessment, or levy of state tax revenue. Therefore, disputes concerning only the second stage of the process, such as the instant case, do not affect state tax revenue and cannot be subject to the TIA.