Court Opinion

ID: 3178623
Source: CourtListenerOpinion
Date Created: 2016-02-18 21:06:57.754698+00
Date Added: 2024-06-11T07:38:54.967988
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            FEB 18 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ROGER HUANG, General Partner,                 No. 14-55400
on behalf of HYW LIMITED
PARTNERSHIP,                                  D.C. No. 2:13-cv-07698-MMM-AJW

              Plaintiff - Appellant,
                                              MEMORANDUM*
 v.

CITY OF LOS ANGELES,
a municipal corporation,

              Defendant - Appellee.

                   Appeal from the United States District Court
                      for the Central District of California
                  Margaret M. Morrow, District Judge, Presiding

                      Argued and Submitted February 8, 2016
                               Pasadena, California

Before: FARRIS, CLIFTON, and BEA, Circuit Judges.

      Roger Huang appeals the district court’s dismissal for lack of subject matter

jurisdiction of his suit challenging the City of Los Angeles’s conduct in assessing

taxes against his business. We review de novo a district court’s dismissal for lack

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
of subject matter jurisdiction. N. Cty. Cmty. All., Inc. v. Salazar, 573 F.3d 738, 741

(9th Cir. 2009).

      The Tax Injunction Act (TIA), 28 U.S.C. § 1341, bars taxpayers from

challenging the validity of a state tax in federal court where an adequate remedy is

available in state court. Huang does not dispute that such a “plain, speedy and

efficient remedy” is available in the California courts. 28 U.S.C. § 1341. The key

factors to consider in deciding whether a municipal fee is a “tax” for purposes of

the TIA are (1) the entity that imposes the charge; (2) the parties upon whom the

charge is imposed; and (3) the purpose of imposing the charge. Bidart Bros v. Cal.

Apple Comm’n, 73 F.3d 925, 931–32 (9th Cir. 1996). Applying Bidart, the

business taxes assessed by the City of Los Angeles, as well as the penalties added

thereto for delinquent payment, are “taxes” under the TIA. The district court

therefore lacked subject matter jurisdiction over Huang’s claim challenging the

assessment of the taxes and penalties.

      The Supreme Court’s decisions in National Federation of Independent

Business (N.F.I.B.) v. Sebelius, 132 S. Ct. 2566 (2012), and Direct Marketing

Association v. Brohl, 135 S. Ct. 1124 (2015), do not change this analysis. The

Court’s analysis in N.F.I.B. is not “clearly irreconcilable” with existing Ninth

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Circuit precedent. Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en banc).

Nor is the reasoning of Direct Marketing applicable to the facts of this case.

      The district court did, however, abuse its discretion in dismissing Huang’s

claim with prejudice. A dismissal for lack of subject matter jurisdiction, because it

does not go to the merits of the case, is without prejudice. See Oaks of Woodlake

Phase III, Ltd. v. Hall, Bayoutree Assocs., Ltd. (In re Hall, Bayoutree Assocs.,

Ltd.), 939 F.2d 802, 804 (9th Cir. 1991); see also Fed. R. Civ. P. 41(b). Huang’s

claim therefore should have been dismissed without prejudice. We consequently

vacate the district court’s order of dismissal with prejudice and remand with

instructions to enter a dismissal of the complaint without prejudice for lack of

subject matter jurisdiction.

      Costs are awarded to Defendant-Appellee City of Los Angeles.

      VACATED AND REMANDED.

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