Court Opinion

ID: 3001310
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:15:15.234178+00
Date Added: 2024-06-11T11:45:44.886895
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 06-3182
CHARLES D. LEVY and REFUND RESEARCH
ASSOCIATES, INC.,
                               Plaintiffs-Appellants,
                        v.

MARIA PAPPAS, individually and as Treasurer
of Cook County, et al.
                                    Defendants-Appellees.
                       ____________
           Appeal from the United States District Court
      for the Northern District of Illinois, Eastern Division.
          No. 04 C 6498—George M. Marovich, Judge.
                         ____________
  ARGUED APRIL 11, 2007—DECIDED DECEMBER 21, 2007
                     ____________

 Before CUDAHY, KANNE, and WOOD, Circuit Judges.
  WOOD, Circuit Judge. Charles Levy and his defunct
company, Refund Research Associates, Inc. (“RRA”) (to
whom we refer collectively as Levy unless the context
requires otherwise), have been locked in battle with the
defendants, several Cook County officials and Cook County
itself, for some time. The basis for Levy’s complaints is
the defendants’ handling of Levy’s efforts, as RRA’s agent,
to obtain real estate tax refunds for Cook County resi-
dents. The defendants contend that most of Levy’s claims
are barred by (among other things) the Tax Injunction Act
2                                                No. 06-3182

(“the Act”), 28 U.S.C. § 1341. The district court agreed
with their position, and so do we.

                              I
  The Tax Injunction Act is a somewhat unusual statute,
in that it does not confer jurisdiction on the district courts,
but instead it deprives them of jurisdiction they would
otherwise have to hear certain challenges to state taxes.
See, e.g., California v. Grace Brethren Church, 457 U.S.
393, 396 (1982). The standard of review that we apply to
the district court’s decision here that the Act precludes
the plaintiffs’ claims, however, is the same as we would
use for any jurisdictional challenge. Our review of the legal
conclusion that these claims fall within the scope of the
Act’s prohibition is de novo. Insofar as the district court
found facts to support its determination, as is sometimes
necessary for jurisdictional decisions, see Arbaugh v. Y&H
Corp., 546 U.S. 500, 514 (2006), we review those findings
of fact for clear error. United Phosphorus, Ltd. v. Angus
Chem. Co., 322 F.3d 942, 946 (7th Cir. 2003) (en banc). We
recite the facts here in the light of these standards.
   Levy was the president and sole shareholder of RRA, an
Illinois corporation that has since been dissolved. RRA
was engaged in the business of assisting taxpayers in
obtaining real estate tax refunds. RRA would examine tax
records to determine which taxpayers were entitled to
real estate tax refunds, but had not yet received their
money. Levy would contact these taxpayers in an effort
to convince them to enter into an agreement with RRA
whereby RRA would agree to file for a refund on behalf of
the taxpayer, and the taxpayer would agree to pay RRA
one-third of the money recovered.
  In February 1999, Levy filed a lawsuit in Illinois state
court against Maria Pappas in her official capacity as
No. 06-3182                                               3

Treasurer of Cook County, alleging a conspiracy through
which Cook County retained millions of dollars in tax
overpayments instead of refunding the amounts to tax-
payers or turning over the money to the state of Illinois.
After he filed that suit, he alleges, Pappas and other Cook
County officials began to retaliate against him personally
and against RRA. Specifically, Levy asserts that the
Cook County officials placed obstacles in RRA’s path to
make it difficult for RRA to collect tax refunds for its
clients, and that they caused a criminal investigation to
be instigated against Levy.
  Before the state court lawsuit was filed, RRA typically
received requested refund checks approximately 35 days
after it filed a refund application. After the lawsuit
began, this period ballooned up to approximately 145 days.
Levy also began having problems getting refund checks
delivered directly to RRA. On one occasion in May 1999,
when Levy arrived to collect a set of refund checks, a
clerk told Levy that the checks could not be released
because the office had lost the forms that authorized the
Treasurer’s office to release the checks to him instead of
to the taxpayers themselves. Levy did not have copies of
the authorization forms, and the Treasurer’s office refused
to release the checks to him based on copies of the con-
tracts between the clients and RRA. It appears that the
Treasurer’s office still has some of these checks, but it is
not clear what happened to the rest.
  On or about May 25, 1999, Peter Karaholios, then
Counsel for the Treasurer, told Levy that RRA did not
have the right to conduct its business and that liens filed
by RRA were invalid. After this point, refund checks were
no longer delivered to RRA. By August 2002, Cook County
Assessor James M. Houlihan arranged that checks issued
to RRA clients would be mailed directly to the client,
rather than to RRA.
4                                              No. 06-3182

  Employees of the Treasurer’s office made it difficult for
Levy to get information. In April 1999, James Crawley
(then Assistant General Counsel and later Counsel for
Treasurer Pappas) informed Levy that incomplete applica-
tions for refunds would not be accepted and that the
Treasurer’s office did not have the personnel to find the
“correct CR number” for Levy’s applications. Because Levy
was being forced to provide complete applications, Levy
submitted a freedom-of-information request to inspect
the CR book, which contains records of all certificates of
error that have been authorized by the County Assessor.
The Treasurer’s office responded that Levy needed to
specify a tax year and to pay a copying charge; Levy
parried with a request to view the files in person. The
Treasurer’s office did nothing. Some time around August
1999, Levy was unable to review microfiche records at the
Treasurer’s office. Employees at the Treasurer’s office
informed Levy that in order to obtain a client’s microfiche
records, he would need a notarized power of attorney
from his client. He had never before been required to
produce such a form.
  In August and September 2001, Levy had difficulty
reviewing other records at the Treasurer’s office. The
Treasurer’s office maintains and keeps CR books and JR
books (which contain information about whether the
authorized refunds have actually been paid). Levy wanted
access to these books both in order to conduct RRA’s
business and to obtain evidence for his state court case.
When he asked to inspect the CR and JR books, however,
he was told he could not. Levy wrote a letter to Martha
Mills, Chief Counsel for the Treasurer, who responded
that Levy would be given access to the books. But as of
the time when he filed his federal action, Levy had not
been given access to the books. Levy alleges that Mills (and
the other employees who failed to provide Levy with
access to the books) acted at Pappas’s direction. Another
No. 06-3182                                              5

FOIA request related to Levy’s state court suit was
stymied, because, Levy believes, Pappas and her employees
in the Treasurer’s office knew that Levy was behind it.
Also, telephone calls by Levy and RRA clients went
unreturned while the Treasurer’s office returned phone
calls placed by refund-seekers not represented by RRA.
  As if these bureaucratic obstacles were not enough, the
County defendants also allegedly retaliated against Levy
with threats of criminal action. Around the same month
when Levy filed his state court case, Karaholios told Levy
that he (Karaholios) had been a prosecutor and that he
was going to put Levy out of business. Levy interpreted
the comment as a threat to institute criminal charges. In
October 2000, Levy was at the Treasurer’s office. In the
presence of Pappas, Crawley, and Deputy Treasurer
William Korukulis, Karaholios told Levy that Levy was
“committing fraud by submitting refund applications
using Refund Research’s FEIN number instead of the
taxpayer’s social security number.” Karaholios added
that Pappas planned to submit the applications to the
State’s Attorney and file a complaint. Pappas picked up
the refund applications Levy had with him, waved them
at Levy and said, “This is fraud. I’m going to take this to
the State’s Attorney.”
  In April 2001, Amy Huang (a supervisor with the
Financial Crimes Investigations Unit of the State’s At-
torney’s office) sent letters to more than 500 clients of
RRA. The letters stated in part:
   Our office is currently conducting a Criminal Grand
   Jury investigation pertaining to a complaint received
   from the Cook County Treasurer’s office. According to
   records provided by the Cook County Treasurer’s
   office, you filed a Certificate of Error Refund Applica-
   tion . . . , and designated Refund Research Associates,
   Inc. as Power-of-Attorney to complete the refund
6                                               No. 06-3182

    application process. In order for this office to complete
    its investigation into said matter, please review the
    attached application and contact [us] if the information
    is incorrect. Our office would like to talk with you
    regarding the refund you have filed through Refund
    Research Associates, Inc.
At least once, a representative of the State’s Attorney’s
office went to the home of an RRA client to ask the client
to verify his signature; the client did so. In May 2001, an
RRA client telephoned the Treasurer’s office and spoke to
an employee, Ilene Psarras. When the client asked about
the status of her refund, Psarras told the client that checks
payable to RRA were not being released because RRA was
being investigated for cheating clients out of their money.
The State’s Attorney never charged RRA or Levy with
unlawful conduct.
   In 2004, Levy and RRA filed the present action in federal
court. The amended complaint named Cook County and
the following officials as defendants: Maria Pappas, the
Treasurer of Cook County; William Korukulis, the Deputy
Treasurer of Cook County; Martha Mills, the Chief Coun-
sel for the Treasurer of Cook County; James Crawley,
Counsel for the Treasurer of Cook County; Peter
Karaholios, prior Counsel for the Treasurer of Cook
County; James M. Houlihan, Assessor of Cook County;
and Richard H. Devine, the State’s Attorney for Cook
County. All of the individual defendants were sued in
both their official and individual capacities. Invoking 42
U.S.C. § 1983, the complaint charges “violations of Plain-
tiffs’ First Amendment rights,” infringements of plain-
tiffs’ due process and equal protection rights, three RICO
claims, a conspiracy claim, a tortious interference claim,
and a conversion claim. The district court granted the
defendants’ motion to dismiss both the original and the
amended complaints.
No. 06-3182                                                    7

                               II
  The district court concluded that most of the plaintiffs’
claims were barred by the Act and comity interests. The
Act reads as follows:
    The 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. As the Supreme Court held in Grace
Brethren, supra, it deprives the district court of jurisdic-
tion to hear certain types of actions in federal courts. 457
U.S. at 396; see also Hibbs v. Winn, 542 U.S. 88, 104, 107
(2004). The Court took the opportunity in Hibbs to
clarify the extent of this restriction. In that case, the
plaintiffs challenged an income tax credit that provided
financial aid to children attending private schools. 542
U.S. at 92-93. In finding federal jurisdiction over the
matter, the Court held that for “a near half century, courts
in the federal system, including [the Supreme] Court
have entertained challenges to tax credits authorized by
state law, without conceiving of § 1341 [the Act] as a
jurisdictional barrier.” Id. at 93. The Court contrasted
those cases with those typically barred by the Act, describ-
ing the latter as cases in which “[a]ll involved plaintiffs . . .
mounted federal litigation to avoid paying state taxes
(or to gain a refund of such taxes). Federal-court relief . . .
would have operated to reduce the flow of state tax reve-
nue.” Id. at 106. Hibbs, therefore, leaves the doors of the
federal court open to a narrow category of state tax
challenges.1

1
  Our concurring colleague is concerned that we have read the
Act too broadly, as barring all claims where unjust treatment
is alleged. Post at 16. As we explain in the body of the text,
                                                 (continued...)
8                                                     No. 06-3182

  Nothing in Hibbs suggested that the Court was overrul-
ing its decision in Fair Assessment in Real Estate Ass’n v.
McNary, 454 U.S. 100 (1981), an earlier opinion that
discussed the related limits that comity doctrines
impose on the adjudication of certain claims in federal
court. Id. at 107 (basing decision on comity and declining
to reach the question of whether the Act would also bar
the suit). Hibbs cited Fair Assessment in a list of cases that
fell “within § 1341’s undisputed compass” (despite the fact
that Fair Assessment itself was based on comity). 542 U.S.
at 106. In Fair Assessment, the plaintiffs brought a § 1983
claim seeking damages based on equal protection and due
process violations for unequal taxation of real property.
454 U.S. at 105-06. The Court commented that the Act
    [has] thus far barred federal courts from granting
    injunctive and declaratory relief in state tax cases
    [but b]ecause we decide today that the principle of
    comity bars federal courts from granting damages
    relief in such cases, we do not decide whether th[e Tax
    Injunction] Act, standing alone, would require such a
    result.
Id. at 107. The Hibbs Court noted without any hint of
disapproval that the Fair Assessment opinion “relied upon
‘principles of comity’ . . . to preclude original federal-court
jurisdiction only when plaintiffs have sought district-court

1
  (...continued)
however, we recognize that the Supreme Court, in Hibbs and
other cases, reads the statute narrowly to bar only claims that
would reduce the flow of state tax revenue. The only other
difference is in the importance we attach to the type of relief
plaintiffs seek, as opposed to the formal labeling of their com-
plaints. Even if the Act did not bar plaintiffs’ retaliation claims,
as we believe it does, those claims are so closely linked to the
state’s collection of its revenues that comity principles would
also require them to be dismissed.
No. 06-3182                                                9

aid in order to arrest or countermand state tax collection.”
542 U.S. at 107 n.9.
   Other circuits have understood Hibbs to be consistent
with Fair Assessment. In May Trucking Co. v. Ore. Dep’t of
Transp., 388 F.3d 1261 (9th Cir. 2004), the Ninth Circuit
held that “the dispositive question in determining
whether the Act’s jurisdictional bar applies is whether
‘federal court relief . . . would have operated to reduce the
flow of state tax revenue.’ ” Id. at 1267 (quoting the Hibbs
passage discussed above). This standard also applies in
the Second and Tenth Circuit cases, which Levy cites,
but which are not particularly helpful to him. See
Luessenhop v. Clinton County, 466 F.3d 259, 268 (2d Cir.
2006); Okla. ex rel. Okla. Tax Comm’n v. Int’l Registration
Plan, Inc., 455 F.3d 1107, 1112 (10th Cir. 2006). In
Luessenhop, the Second Circuit dealt with whether “a
taxpayer’s challenge that the notice of foreclosure pro-
vided by the taxing authority of a state is constitu-
tionally inadequate”; it was not concerned with whether
the tax assessed or the process of taxation was problem-
atic. 46 F.3d at 261. In Oklahoma Tax Commission, the
Tenth Circuit dealt with what was essentially a contract
dispute involving the governmental recipients of revenue,
some of which was tax revenue. Again, this was not a
dispute about the tax or the taxation process. 455 F.3d
at 1112.
  As for comity, Hibbs commented that prior cases in this
area are “not fairly cut loose from their secure, state-
revenue-protective moorings.” Id. at 107. The Court then
quoted Rosewell v. La Salle Nat’l Bank, 450 U.S. 503, 527-
28 (1981), which held that “we may readily appreciate
the difficulties encountered by the county should a sub-
stantial portion of its rightful tax revenue be tied up in
injunction actions.” Hibbs, 542 U.S. at 107. Thus, Hibbs
does not reject the use of comity to bar federal district
court jurisdiction in broad strokes, but it does restrict
10                                               No. 06-3182

comity to cases that could tie up “rightful tax revenue.”
Applying this standard, Hibbs found that comity was not
a reason to refrain from acting, because relief would
have increased the state’s tax revenues and would not have
tied up any state tax revenues as in Fair Assessment.
  In the end, it is not how Levy has described his com-
plaint, but what relief he ultimately seeks, that matters.
We must determine whether his claims are more like
those in Hibbs or those in Fair Assessment. If the relief
sought “would . . . operate[] to reduce the flow of state tax
revenue” or would tie up “rightful tax revenue,” then the
Act bars federal jurisdiction over the claims. All of Levy’s
§ 1983 claims stem from one of two sources, either the
defendants’ treatment of RRA in the real estate tax
refund process or the defendants’ treatment of Levy and
RRA allegedly in retaliation for the state court action. In
substance, most of the alleged retaliatory treatment is
nothing but an allegation of unfairness in aspects of
Cook County’s tax refund process. The only part of the
complaint that does not fit that description is the claim
of a retaliatory criminal investigation against Levy, which
we discuss in a moment.
  The rest of the claims are, as the district court con-
cluded, “essentially a complaint about the loss of tax
refunds” and “about delayed refunds and defendants’
ultimate refusal to issue taxpayer refund checks.” The
complaint repeatedly alleges lost profits as the primary
injury suffered. Levy’s business was obtaining tax re-
funds on behalf of RRA’s clients. To the extent that this
business was harmed by the failure to receive refunds, the
relief sought would “operate[] to reduce the flow of state
tax revenue.” To the extent the plaintiffs’ business was
harmed by delaying refunds or even sending checks
directly to taxpayers, the relief sought for this would tie up
“rightful tax revenue” by freezing some money in the
County’s tax coffers and “arrest[ing] . . . state tax collec-
No. 06-3182                                              11

tion,” putting the County’s system of administering
refunds at the mercy of the federal courts. The relief Levy
is seeking goes to the heart of the County’s ability to
control its tax revenue by managing its real estate tax
refunds. It would have a negative impact on the County’s
ability to rely on its own tax revenue. This is exactly
what the Court was worried about in Fair Assessment.
  When a plaintiff alleges that the state tax collection or
refund process is singling her out for unjust treatment,
then the Act and comity bar the federal action, as in Fair
Assessment. When a plaintiff alleges that the state tax
collection or refund process is giving unfair benefits to
someone else, then according to Hibbs the Act and comity
are not in play. This case falls on the Fair Assessment
side of the line. The district court correctly held that the
Act and comity bar its jurisdiction over the plaintiffs’
claims in Counts I through V, with one exception: the
criminal investigation. Any relief the court could give
there would have no impact on the County’s tax revenues
and thus is not barred by either the Act or comity. With
those threshold questions out of the way, we turn to the
remainder of the arguments relating to this claim.

                            III
                             A
  We begin our assessment of the plaintiffs’ retaliation
allegations with the question of RRA’s standing to bring
a § 1983 claim of retaliation for protected First Amend-
ment activity. Generally speaking, a corporation may sue
under § 1983. Discovery House, Inc. v. Consol. City of
Indianapolis, 319 F.3d 277, 282 (7th Cir. 2003). RRA
argues that it has standing “to assert a § 1983 Class of
One claim.” A “class of one” claim, however, relates to a
§ 1983 action for an equal protection violation, and we
12                                              No. 06-3182

have rejected RRA’s equal protection challenge to Cook
County’s tax refund system.
  RRA points to no case allowing a corporation (or anyone)
to sue under § 1983 for retaliation against protected
activity when that plaintiff engaged in no protected
activity. RRA did not bring the state court case against
the Treasurer’s office; Levy did. Article III imposes pruden-
tial limitations on the class of persons who may invoke
federal jurisdiction, and a litigant normally “must assert
his own legal rights and cannot assert the legal rights of a
third party.” Massey v. Helman, 196 F.3d 727, 739 (7th
Cir. 1999). Although RRA may have state tort claims
against the defendants for their actions, those actions were
not alleged to have been based on any First-Amendment-
protected activity by RRA. We conclude, therefore, that
RRA does not have standing to raise any claim of retalia-
tion in what remains of this case.

                             B
   That leaves Levy’s retaliation claim. The district court
held that he failed to state a claim against most of the
defendants in their individual capacities and against all
of the defendants in their official capacities. It ruled that
his remaining claims against defendants Pappas and
Karaholios in their individual capacities were time-barred.
We begin with a comment on the statute of limitations
and then consider the remaining arguments. The applica-
ble statute of limitations here, which we borrow from
Illinois, is two years. See 735 ILCS § 5/13-202; Ashafa v.
City of Chicago, 146 F.3d 459, 461 (7th Cir. 1998). Levy
alleges that his First Amendment claims were filed within
this time, even though the allegedly retaliatory criminal
investigation against him began more than two years
before he filed his state complaint. It is possible that he
is correct, if this is better seen as an ongoing injury than
No. 06-3182                                              13

as a harm triggered by a one-time event. See Nat’l R.R.
Passenger Corp. v. Morgan, 536 U.S. 101, 115 (2002)
(recognizing that some “ ‘unlawful employment practice[s]’
therefore cannot be said to occur on any particular day,”
but instead occur “over a series of days or perhaps years
and, in direct contrast to discrete acts, a single act of
harassment may not be actionable on its own”); see also
Heard v. Sheahan, 253 F.3d 316, 318-19 (7th Cir. 2001)
(discussing the “doctrine of continuing violation”); compare
Ledbetter v. Goodyear Tire & Rubber Co., 127 S. Ct. 2162,
2165 (2007) (holding that discrimination in pay and
raises arose from discrete acts that triggered the applica-
ble limitations period).
   The district court characterized Levy’s injury as one
that was based on a discrete act and thus accrued at a
particular time. We are not so sure. An ongoing crim-
inal investigation is less like a singular event, such as
being fired from a job or being beaten by a police officer,
than it is like being denied medical treatment, or suffering
from a hostile environment, or being maliciously prose-
cuted over an extended period of time. At this stage of the
litigation, however, we need not make a definitive ruling
on this issue. Even if we assume that Levy has success-
fully alleged a continuing injury and thus is not barred
by the statute of limitations, his retaliation claims must
be dismissed on other grounds.

                             C
  The dispositive question is whether there is any defen-
dant against whom Levy can assert his retaliation claim,
insofar as it is based on the criminal investigation. In
a § 1983 action, liability cannot attach against an individ-
ual defendant unless “the individual defendant caused
or participated in a constitutional deprivation.” Vance v.
Peters, 97 F.3d 987, 991 (7th Cir. 1996). Most of Levy’s
14                                             No. 06-3182

arguments on this point rest on allegations that we have
rejected as barred by the Act. The amended complaint
alleges, however, that “the continuing criminal investiga-
tion by the State’s Attorney’s office [was] with the assis-
tance and involvement from personnel from the Office of
the Cook County Treasurer” and that “Plaintiffs believe
that some, if not all, of the inquiries were the product of
a joint effort from employees in Pappas’s office and the
State’s Attorney’s office as part of the unlawful scheme.”
Once we are past the jurisdictional questions, because
this is an appeal of a motion to dismiss, we take as true
all well-pleaded factual allegations in the complaint and
make all plausible inferences from those allegations in
the plaintiffs’ favor. County of McHenry v. Ins. Co. of the
W., 438 F.3d 813, 817 (7th Cir. 2006).
  In the end, however, only the State’s Attorney has
the power to initiate criminal proceedings, and he has
absolute immunity for these core prosecutorial functions.
Imbler v. Pachtman, 424 U.S. 409, 431 (1976). Even taking
as true all of Levy’s allegations, nothing the other offi-
cials could have done could either force the State’s Attor-
ney to prosecute or compel him to refrain from prosecution.
The complaint does not allege that the officials were
suborning perjury or otherwise obstructing justice. At
most, it appears to claim that Levy was defamed when
the investigators contacted his clients and told them about
the investigation, and when the officials accused him of
fraud. That is not enough to state a claim against them
for any role they may have had in the criminal investiga-
tion.

                             D
  Finally, Levy’s claim against Cook County as an entity
runs into trouble at the outset with service of process. The
district court found that he had failed to comply with
No. 06-3182                                               15

FED. R. CIV. P. 4(m), which sets the time limit for service.
He has not complained about this on appeal, and so we
leave that judgment undisturbed. As for the individual
defendants in their official capacities, Levy claims that his
constitutional injury was caused by a person with final
policymaking authority, which is one allowable way to
allege official liability. McCormick v. City of Chicago, 230
F.3d 319, 324 (7th Cir. 2000). The district court did not
consider this approach.
   The Supreme Court discussed that theory of official
liability in St. Louis v. Praprotnik, 485 U.S. 112, 126-27
(1988). The official sued there was the person with final
policymaking authority with respect to the challenged
action taken against the plaintiff. Id. at 127. Here, Levy
relies on Illinois law to show that Pappas and Houlihan
have final policymaking authority for their respective
offices. But no Illinois law gives the County Treasurer or
Assessor “final policy-making authority” over launching
criminal investigations, which is the only § 1983 claim
Levy has left. Nor is there any allegation that any of the
other defendants apart from State’s Attorney Devine
might have this kind of authority. And, as we just noted,
to the extent that the State’s Attorney is involved, the
Supreme Court has held that “in initiating a prosecution
and in presenting the State’s case, the prosecutor is
immune from a civil suit for damages under § 1983.”
Imbler, 424 U.S. at 431. This immunity is absolute. Thus,
the district court properly dismissed Levy’s claims against
the individual defendants in their official capacity.

                            IV
  We have no need to reach the defendants’ res judicata
argument. The judgment of the district court is AFFIRMED.
16                                              No. 06-3182

  CUDAHY, Circuit Judge, concurring. The big question
here is whether the plaintiffs’ lawsuit is barred by the
Tax Injunction Act (TIA), as last analyzed by the Su-
preme Court in Hibbs v. Winn, 542 U.S. 88 (2004). The
majority reads the TIA and comity as barring claims
where the “plaintiff alleges that the state tax collection or
refund process is singling her out for unjust treatment,”
but not claims where the “plaintiff alleges that the state
tax collection or refund process is giving unfair benefits
to someone else.” (Op. at 11.) How exactly this distinc-
tion might work is unclear and its arguable basis in Hibbs
is elusive.
  Also, in evaluating whether Levy’s claim is barred by
the TIA or principles of comity, the majority relies on
the relief Levy seeks, rather than “how Levy has de-
scribed his complaint.” (Op. at 10.) Since Levy is asking for
lost profits, the majority reasons that payment of lost
profits would “operate[ ] to reduce the flow of state tax
revenue” and therefore is barred by Hibbs. (Op. at 10
(quoting Hibbs, 542 U.S. at 106)). This approach seems
simplistic to me. I do not think it is enough to say that
Levy’s request for lost profits makes this lawsuit suspect
under the TIA. In his state lawsuit and in the original
federal complaint Levy asked for injunctive relief. I think
this is significant and effectively distinguishes the
claims in the first amended complaint, which really
concerned harassment and retaliatory conduct, from
those in the state lawsuit and the original federal com-
plaint, which concerned the legitimacy of the tax refund
process more broadly. I am concerned that the majority
is conceding too much scope to the TIA, especially when
the Supreme Court seems to be reading it fairly narrowly
in Hibbs.
  It is important to distinguish the present case from the
action brought in state court by Levy in 1999. The defen-
dants, and to a lesser extent, the district court, blur the
No. 06-3182                                              17

distinction between the claims and relief requested in the
state lawsuit and the present one. This difference is
significant because, if the 1999 lawsuit had been brought
in federal court, it would clearly have been barred by the
TIA. That case concerned how Cook County issued tax
refunds and as a remedy prescribed the issuance of tax
refund checks. The first amended complaint, which is the
subject of the present appeal, does not, for the most part,
concern the statutory scheme pursuant to which refunds
are issued and its requested relief does not involve the
issuance of refund checks. The present case, or at least the
§ 1983 claims, primarily concerns alleged retaliatory
conduct, both harassment and the launching of a criminal
investigation, by various Cook County officials, most
notably Pappas and Karaholios. This part of the com-
plaint is not barred by the TIA. As the Supreme Court
explained in Hibbs, the TIA bars federal courts from
challenging the assessment of taxes, where assessment
is narrowly defined as “recording the liability of the
taxpayer” and closely tied to the collection of a tax. 542
U.S. at 100-01. The Court concluded that the TIA applies
only to “cases in which state taxpayers seek federal-
court orders enabling them to avoid paying state taxes.” Id.
at 107. These claims raised by Levy in the first amended
complaint do not concern how Cook County issues refunds.
Therefore, the TIA as interpreted by the Supreme Court in
Hibbs does not bar the plaintiffs’ § 1983 claims.
  As for the RICO claims, the plaintiffs allege three
separate violations under RICO, 18 U.S.C. § 1962(a),
§ 1962(c) and § 1962(d). The plaintiffs’ RICO claims
primarily concern the plaintiffs’ argument that Cook
County has failed to issue refunds to taxpayers and has
also fraudulently retained these refunds instead of turn-
ing them over to the State of Illinois pursuant to the
Unclaimed Property Act. This was the crux of the 1999
state action and is clearly barred by the TIA. The district
18                                              No. 06-3182

court was clearly correct in dismissing the RICO claims
for lack of jurisdiction as required by the TIA.
  All of this said, I do think there is a strong statute of
limitations argument for barring the non-criminal investi-
gation retaliation claims, and therefore I would affirm the
district court’s grant of the defendant’s motion to dismiss. I
also agree with the majority’s treatment of the criminal
investigation retaliation claim, namely dismissing it on
absolute immunity grounds.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—12-21-07