Court Opinion

ID: 9643990
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:46:07.350557+00
Date Added: 2024-06-11T18:11:07.239819
License: Public Domain

HICKENLOOPER, District Judge
(dissenting) . I am unable to concur in the holding of the majority of the court to the effect that these actions may be maintained against the tax commission of Ohio to enjoin the certification by the tax commission to the several county auditors, for tax purposes, of valuations placed upon the property of the complainants having a situs for taxation in Ohio.
It is of course now firmly established, and may be conceded, that, where intentional and systematic discrimination in valuation of property for tax purposes exists, “complainants may have the remedy by injunction in equity to prevent the taxation of their property at any higher rate than that imposed upon the property of those in whose favor the discrimination exists.” Mr. Chief Justice Taft in Chicago G. W. Ry. Co. v. Kendall, 266 U. S. 94, 98, 45 S. Ct. 55, 57 (69 L. Ed. 183). It may also be conceded that, notwithstanding the affirmative duty placed on the tax commission of Ohio to so equalize valuations that all property within the state may be valued at “its true value in money,” the tax commission must be charged with notice of systematic and intentional undervaluation in the whole or large parts of the state, and that such commission was thereby vested with power to equalize the valuation of complainants’ property to conform to the insufficient valuation of the property of others.' In the event of the commission’s failure so to do, an unconstitutional burden of unequal taxation is cast upon the complainants, creating the right to relief in equity. Cummings v. National Bank, 101 U. S. 153, 25 L. Ed. 903; Greene v. Louisville & Interurban R. R. Co., 244 U. S. 499, 516, 37 S. Ct. 673, 61 L. Ed. 1280, Ann. Cas. 1917E, 88; Taylor v. L. & N. R. R. Co., 88 F. 350, 365 (C. C. A. 6).
Lastly, it may be conceded that the present cases have reached their justiciable stage in the sense that the complainants have exhaust- • ed all remedies given by statute before administrative tribunals. Whether the right of appeal to the court of common pleas be considered as administrative in its nature, so as to bring the present actions within the doctrine of Prentis v. Atlantic Coast Line R. Co., 211 U. S. 210, 29 S. Ct. 67, 53 L. Ed. 150, Singer Sewing Machine Co. v. Benedict, 229 U. S. 481, 33 S. Ct. 942, 57 L. Ed. 1288, Mellon Co. v. McCafferty, 239 U. S. 134, 36 S. Ct. 94, 60 L. Ed. 181, and Keokuk & Hamilton Bridge Co. v. Salm, 258 U. S. 122, 125, 42 S. Ct. 207, 66 L. Ed. 496, or constitutes provision for additional judicial remedy, is immaterial, and a decision of the question is unnecessary if, upon other grounds and for other reasons and in another distinct sense, the present actions have not reached their justiciable stage. Where a complainant has not exhausted- the remedies provided before administrative tribunals, and the ease is therefore said not to have reached its justiciable stage, relief is denied on the ground of lack of general equity jurisdiction because of the presumption of adequate remedy at law, viz., the appeal to the administrative tribunal. This question should not be confused with that which I believe is here presented.
Even conceding or concurring in the view . expressed by the majority of the court, that in an appeal from the decision of the tax commission to the court of common pleas the court would have power only to determine the “true value in money” of the appellants’ property and that no adequate remedy would therefore exist before statutory tribunals in a case of discriminatory undervaluation of the property of others, and that the case had thus reached its justiciable stage in this sense (City Railway Co. v. Beard, 283 F. 313, 322, D. C. So. Dist. of Ohio), I am constrained to the opinion that the general equity jurisdiction of the court is defeated at this stage of the administrative proceedings, for the reason that the assumption of such jurisdiction would amount to the direct control by the judicial branch of the government of the exercise of purely discretionary powers by the administrative branch. In this sense the case has not -reached its justiciable stage.
“It has been repeatedly adjudged that the courts have no general supervising power over the proceedings and action of the various administrative departments of government.” Mr. Justice Brewer in Keim v. United States, 177 U. S. 290, 292, 20 S. Ct. 574, 575 (44 L. Ed. 774). The very essence and sum total of the present complaints is that the tax commission has failed to exercise its power of equalization in the valuation of complainants’ property and that discriminatory valuation thereby results. The sole and manifest purpose of *363the present actions is to procure judicial review and supervision of the proceedings before the tax commission, and, by enjoining the certification of the valuations of the commission, to control and direct the administrative discretion and the method in which an administrative board shall perform its duties. This has uniformly been held to be beyond the power of courts of equity in all matters involving the exercise of discretionary powers, as this case does to the highest degree. Thus in Riverside Oil Co. v. Hitchcock, 190 U. S. 316, 324, 23 S. Ct. 698, 701 (47 L. Ed. 1074), the court says:
“Neither an injunction nor mandamus will lie against an officer of the Land Department to control him in discharging an official duty which inquires the exercise of his judgment and discretion [citing numerous eases]. 1 * * Whether he decided right or wrong, is not the question. Having jurisdiction to decide at all, he had necessarily jurisdiction, and it was his duty to decide as he thought the law was, and the courts have no power whatever under those circumstances to review his determination by mandamus or injunction. The court has no general supervisory power over the officers of the Land Department, by whieh to control their decisions upon questions within their jurisdiction. If this writ were granted we would require the Secretary of the Interior to repudiate and, disaffirm a decision whieh he regarded it his duty to make in the exercise of the judgment which is reposed in him by law, and we should require him to come to a determination upon the issues involved directly opposite to that whieh he had reached, and whieh the law conferred upon him the jurisdiction to make.”
The language of the court in the case of Gaines v. Thompson, 7 Wall. 347, 352 (19 L. Ed. 62), as early as 1868, would also seem peculiarly applicable to the present issues:
“ * * * An officer to whom public duties are confided by law is not subject to the control of the courts in the exercise of the judgment and discretion whieh the law reposes in him as a part of his official functions. Certain powers and duties are confided to those officers, and to them alone, and however the courts may, in ascertaining the rights of parties in suits properly before them, pass upon the legality of their acts, after the matter has once passed beyond their control, there exists no power in the courts, by any of its processes, to act upon the officer so as to interfere with the exercise of that judgment while the matter is properly before him for action. The reason for this is that the law reposes this discretion in him for that occasion, and not in the courts. The doetrine, therefore, is as applicable to the writ of injunction as it is to the writ of mandamus. In the one case the officer is required to abandon his right to exercise his personal judgment, and to substitute that of the court, by performing the act as it commands. In the other he is forbidden to do the act which hiS judgment and discretion tell him should be done. There can be no difference in the principle which forbids interference with the duties of these officers, whether it be by writ of mandamus or injunction.” (Italics ours.)
Other applications of the same principle will be found in Bates & Guild Co. v. Payne, 194 U. S. 106, 24 S. Ct. 595, 48 L. Ed. 894; U. S. v. Fisher, 223 U. S. 683, 691, 692, 32 S. Ct. 356, 56 L. Ed. 610; State of Louisiana v. McAdoo, 234 U. S. 627, 633, 634, 34 S. Ct. 938, 58 L. Ed. 1506; Southern Mining Co. v. Lowe, 105 Ga. 352, 356, 31 S. E. 191; and U. S. Wood Preserving Co. v. Sundmaker, 186 F. 678 (C. C. A. 6). In the last ease cited the Court of Appeals of this circuit refused an injunction against the letting of a contract on the ground that the duties of sueh executive involved the exercise of judgment and discretion; and in U. S. v. Fisher the court said:
“So, at the outset we are confronted with the question, not whether the decision of the Secretary was right or wrong, but whether a decision of that officer, made in the discharge of a duty imposed by law and involving the exercise of judgment and discretion may be reviewed by mandamus and he be compelled to retract it, and to give effect to another not his own and not having his approval. The question is not new, but has been often considered by this court and uniformly answered in the negative.”
The eases in whieh the United States Supreme Court and other federal courts have applied this doetrine are literally legion, as may be seen by referring to Rose’s Notes upon the case of Gaines v. Thompson, supra, or the even earlier case of Decatur v. Paulding, 14 Pet. 497, 10 L. Ed. 559, 609. Is there anything which differentiates the present situation from the situations covered by the forceful and plainly unambiguous language of the Supreme Court above quoted? Presumably the tax commission has exercised to some degree at least its powers of equalization. A prima facie case has been made that in so-exercising its judgment and discretion the commission has erred and has been guilty of discrimination. This constitutes the only *364fault which complainants find with the action of the commission. If the remedy sought by the complainants had been mandamus instead of injunction, to compel the tax commission to accept the views of the court as to the error and wrong thus committed and to substitute the personal judgment of the court for its decision upon questions within its jurisdiction (those of equalization), would any court grant such relief? The matters have clearly not yet passed beyond the control of the tax commission, and, in the language of Gaines v. Thompson, it would seem manifest that, “however the courts may, in ascertaining the rights of parties in suits properly [brought] before them, pass upon the legality of their acts, after the matter has once passed beyond their control, there exists no power in the courts, by any of its processes, to act upon the officer so as to interfere with the exercise of that judgment while the matter is properly before him for action.” And this would seem to adopt as the criterion, whether the matter has or has not passed beyond the control of the administrative body, and would likewise seem to dispose of the argument that if, having passed beyond administrative control, an injunction would issue thereon, no valid reason exists why such injunction may not issue at an antecedent stage of administrative proceedings.
It is suggested, argumentatively, that the act of certification is purely ministerial, that the several county auditors would have no choiee but to place the valuation certified upon the tax duplicate, and to levy tax thereon, and that, if the collection of this discriminatory tax could be enjoined, courts of equity have power to enjoin the inevitable cause of such unconstitutional tax. The premises here submitted may support a conclusion of the equivalency of result, but they in no sense answer the objection that by its action the court is here deliberately intruding upon matters still pendmg- before an administrative body and in fact controlling the action of such administrative body, equalizing valuations by reducing those of the complainants to 70 and 75 per cent., and thus usurping the sole jurisdiction of the commission. The faet that a remedy may exist after certification does not in the least degree operate to create a remedy before certification. This is emphasized by the fact that until certification no irrevocable step has been taken by the commission. The matter is still subject to the commission’s discretion. The remedy at law still exists, although there is, as from the first, the danger that' the commission will act unconstitutionally. But, even if such danger probably impends, under the allegations of the present bills, and the relief sought be considered as purely preventative, it is clear that such relief must be sought in and by controlling the judgment of an administrative board.
It is ateo suggested argumentatively that, Unless relief be granted in the present actions, the complainants will be driven to the necessity of bringing a multiplicity of suits against a large number of county auditors and treasurers or of bringing a single suit against a far larger number of defendants than here. The mere faet that the complainants’ remedy must be asserted against a larger number of defendants (who may be sued separately by plaintiff, resulting in a multiplicity of actions, but who may also be joined in a single action under familiar principles of a bill of peace), would not seem to create jurisdiction as against different defendants, where such jurisdiction did not otherwise exist because of the nature of the relief sought. The existence of a multiplicity of causes of action may be ground for joining all the numerous county auditors and treasurers in one action to enjoin the collection of the tax, because of the existence of privity between them arising from the single source of valuation, but the mere faet that, unless equity jurisdiction is sustained in an action against the members of the tax commission to enjoin certification, the plaintiff will be driven to sue a larger number of wholly different defendants, to secure relief essentially different in its nature though not in its result, either in a single action or in a multiplicity of actions, cannot confer jurisdiction over a subject-matter with which, and as against defendants with whom, courts of equity have consistently refused to interfere. Such doctrine would seem to have been announced in Sanford v. Poe, 69 P. 546, 60 L. R. A. 641 (C. C. A. 6, 1895), but the matter was clearly not there considered in detail, and the doctrine would as clearly seem unsupported in theory under the Supreme Court decisions here quoted.
I am also familiar with the fact that the actions in the eases of Greene v. Louisville & Interurban R. R. Co., supra, and Chicago G. W. Ry. Co. v. Kendall, supra, were brought to enjoin the assessment for taxation of the property of the complainants by the executive council of the state, and that right to relief in equity by injunction was asserted upon the ground that, if the executive council certified their assessments and distributed them through all the counties through which the railways ran, it would entail on the compa*365nies a multiplicity of suits to vindicate their constitutional rights. The action being against the state boards, it was there considered as within the provisions of section 266 of the Judicial Code, but the main question of discriminatory valuation as ground for injunction alone was discussed. Those opinions do not suggest that the attention of the court was directed either to the point of usurpation of and interference with the powers of an administrative board or the point whether the case was properly within the provisions of section 266. In neither case is either of these questions discussed or alluded to in the opinion, and I am constrained to the belief that neither case can be considered as authority upon either question.
It remains but to consider the decision and controlling effect of the opinion of Mr. Chief Justice Taft, then Circuit Judge, in the case of Western Union Telegraph Co. v. Poe (C. C.) 61 F. 449. This opinion would seem to be controlling only in the sense that it rejects as untenable the contention that the action was premature if brought before the tax was levied; i. e., if brought against the valuers and not against the collecting officers. Not only does the attention of the court not seem to have been directed to the question of interference with the performance of duties by administrative boards, but it is also to be noted that at that time (1894) no material difference in procedure arose from instituting action against the one or the other of the possible defendants. At the present time, under section 266 of the Judicial Code, the action must be presented to and determined by the statutory court of three judges if properly brought against the tax commission, while it is to be determined and decided by a single district judge if properly brought only against the county auditors and county treasurers. Connecting Gas Co. v. Imes, 11 F.(2d) 191; Connor v. Board of Commissioners, 12 F.(2d) 789 (both three-judge cases of this district). Under the procedure as it existed at the time of Judge Taft’s decision, the balance of convenience and of equities would strongly impel a trial judge to disregard as hypertechnical a contention that a cause fully presented, argued, and submitted had been prematurely brought because.instituted as against one officer rather than another. This is doubly so when, as pointed out, the only possible result of sustaining the contention would be to require the refiling and resubmission of the whole matter by the same parties, to the same court, in another later action. I cannot believe that the. decision in Western Union Telegraph Co. v. Poe was meant to or does sustain the doctrine that administrative boards may be controlled by injunction in the performance of their duties.
It is also interesting to note that, while it has been broadly held that injunction cannot be used to restrain public officers from performing any official act required of them by constitutional statute (Mendenhall et al. v. Denham et al., 35 Fla. 250, 17 So. 561; and cf. Willeford et al. v. State ex rel., 43 Ark. 62; Dickey v. Reed, 78 Ill. 261; Southern Oregon Co. v. Quine, 70 Or. 63-68, 139 P. 332; and Staples v. State [Tex. Civ. App.] 244 S. W. 1064-1071 [semble]), these cases are primarily based upon the threefold division of our state governments and the right of each to act within its own province, free from interference by the others, assuming the statute under which it acts is constitutional and not attacked. These cases are equally strong authority for the rule that it is only the ultimate result (the collection of the unconstitutional tax) and not the antecedent links in the chain of proceedings which may be enjoined.
Lastly, it is quite apparent that there could be no valid tender to the recipients of taxes, the county treasurers, prior to the certification of valuations and the ascertainment of the various tax rates. The mere allegation that the complainants stand ready to pay such taxes as are just and equitable will not supply the necessary averment of “payment or tender of the amount of taxes confessedly due, or at least [an] offer to pay such amount as the court may find to be justly and equitably due.” Keokuk & Hamilton Bridge Co. v. Salm, supra, at page 126 (42 S. Ct. 208). The court is not a taxing body nor an apportioning body, nor can taxes be computed upon valuations in gross. The tax rate differs in all the various counties in which complainants have property, and the court will not undertake to direct the manner in which the apportionment shall be made and such proffered taxes paid. This difficulty it is said may be avoided by enjoining the tax commission from certifying in excess of 70 and 75 per cent., respectively, of the valuations. Prospectively this may he an avoidance, but it is not an answer to the indisputable fact that at the time the bills were filed no tax had been levied and there could be no offer to pay the amount confessedly due. Including a prayer for temporary injunction should not and does not affect the nature of the ultimate relief sought, and, the temporary injunction having issued, it is clear that no final settlement of *366taxes in “such, amount as the court may find to be justly and equitably due” can be made until the court has first ascertained the percentage of true value at which property in general is taxed in the state, equalized the valuation of complainants’ property downward to this same percentage of true value, and then supervised, at least to the extent of procuring, apportionment of this decreased valuation among the several counties and certification to each. This demonstrates both that there can be no present tender of taxes confessedly due nor offer to pay the amount which the court may find due unless and until the court shall itself have equalized valuations and supervised apportionment and certification, and that in the latter event the court would be exercising highly discretionary powers vested exclusively in the commission.
It is true that, in an action to enjoin the collection of the tax, the court enters into an inquiry of the percentage of true value generally applied to other property for taxation purposes and enjoins the collection of all in excess of that percentage of the tax, but the matter has then left the tax commission, the court is not controlling-the action of the commission as to a matter still before it, the inquiry of the court is purely incidental, and the action is no longer within the provisions of section 266. These latter considerations appear to me to be controlling.
I therefore feel that at the present stage of the proceedings the court is without power to grant the relief sought, whatever its powers might subsequently be to accomplish the same result; that, though certification itself may be a purely ministerial act, such certification causes no irreparable injury and does not constitute the substance of the complaint; that the true substance of the complaint is the failure of the commission to fully and correctly equalize valuations for taxation; that by the indirect course of enjoining certification the court is assuming jurisdiction to act in a purely administrative matter which is still pending before the commission; that it is idle to say that we are not usurping the discretionary powers of the commission when, before the end of the litigation, we must exercise or supervise all of these discretionary powers, especially that of equalization; that this is contrary to all principles of equity jurisdiction while the matter is still pending before the administrative body; and that the tender which constitutes the condition precedent to complainants’ right of action has'not 'and cannot be made. If the tax commission were dismissed and the several county auditors and treasurers joined as defendants, and the cause proceeded with as against the new defendants, the action would no longer be considered as within section 266 of the Judicial Code, as. a three-judge ease.