Court Opinion

ID: 70373
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:01:18+00
Date Added: 2024-06-11T14:59:00.901936
License: Public Domain

[ PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT

                        ________________________

                               No. 94-6400
                       ________________________
                      D. C. Docket Nos. CV93-M-69-S
                              CV93-M-196-S

JEFFERSON COUNTY, a political subdivision of
the State of Alabama,

                                                                     Plaintiff-Appellant,

     versus

WILLIAM M. ACKER, JR.,

                                                                    Defendant-Appellee.

                    ---------------------------------------------

JEFFERSON COUNTY, a political subdivision of
the State of Alabama,

                                                                     Plaintiff-Appellant,

     versus

U. W. CLEMON,

                                                                    Defendant-Appellee.

                        ________________________
                      Appeal from the United States District Court
                         for the Northern District of Alabama
                            _________________________

                           (March 27, 1998)
Before HATCHETT, Chief Judge, TJOFLAT, ANDERSON, EDMONDSON, COX,
BIRCH, DUBINA, BLACK, CARNES and BARKETT, Circuit Judges,* and
HENDERSON and KRAVITCH**, Senior Circuit Judges.

       *
        Judges Frank M. Hull and Stanley Marcus became members of the court after this case was
argued and taken under submission. They elected not to participate in this decision.
       **
         Senior U. S. Circuit Judges Henderson and Kravitch elected to participate in this decision
pursuant to 28 U.S.C. § 46(c).
COX, Circuit Judge:

       The issue presented by this case is whether Jefferson County, Alabama may

require Article III judges to pay a tax for the privilege of engaging in their occupation

within the county. In our earlier en banc opinion1 we affirmed the district court’s

grant of summary judgment for the defendants, holding that the tax violates the

Supremacy Clause of the Constitution. The Supreme Court vacated our judgment and

remanded the case for reconsideration in light of its recent decision in Arkansas v.

Farm Credit Services, ___ U.S. ___, 117 S. Ct. 1776 (1997), directing us to consider

the effect of the Tax Injunction Act, 28 U.S.C. § 1341, on federal jurisdiction in this

case. Upon reconsideration we hold that the district court had jurisdiction and

reinstate our en banc opinion on the merits.

                                    I. BACKGROUND2

       Jefferson County Ordinance No. 1120 imposes a tax on persons not otherwise

required to pay a license or privilege tax to the State of Alabama or Jefferson County.

It states in pertinent part:

       It shall be unlawful for any person to engage in or follow any vocation,
       [etc.], within the County . . . without paying license fees to the County
       for the privilege of engaging in or following such vocation, [etc.], which
       license fees shall be measured by one-half percent (1/2%) of the gross
       receipts of each such person.

       1
        Jefferson County v. Acker, 92 F.3d 1561 (11th Cir. 1996) (en banc).
       2
       As our consideration of the jurisdictional issue primarily concerns issues of law, we have
summarized the facts briefly here; a more complete account appears in our earlier en banc opinion.
See Acker, 92 F.3d at 1563-66.
Jefferson County, Ala., Ordinance No. 1120, § 2 (Sept. 29, 1987). Defendants

William M. Acker, Jr. and U.W. Clemon are United States District Judges for the

Northern District of Alabama who maintain their principal offices in Birmingham, the

Jefferson County seat. They refused to pay the privilege tax, contending that the tax

as applied to federal judges violates the United States Constitution. Jefferson County

subsequently sued them in state court to recover delinquent privilege taxes under the

ordinance. The defendants removed the cases to federal court pursuant to 28 U.S.C.

§ 1442(a)(3); Jefferson County moved to remand, but the motion was denied. The

cases subsequently were consolidated.

      The district court granted summary judgment for the defendants, holding that

the legal incidence of the tax fell not upon the judges but upon the federal judicial

function itself, thus constituting a direct tax on the United States in violation of the

intergovernmental tax immunity doctrine. See Jefferson County v. Acker, 850

F. Supp. 1536, 1545-46 (N.D. Ala. 1994) (subsequent history omitted). The district

court also held that as applied to federal judges the ordinance violated the

Compensation Clause of Article III. See id. at 1547-58. Jefferson County appealed,

and a panel of this court reversed. See Jefferson County v. Acker, 61 F.3d 848 (11th

Cir. 1995) (subsequent history omitted).

      On rehearing en banc, this court affirmed the district court’s ruling with respect

to the intergovernmental tax immunity doctrine, stating that any holding with respect

                                           2
to the Compensation Clause was unnecessary. See Jefferson County v. Acker, 92 F.3d

1561, 1576 (11th Cir. 1996) (subsequent history omitted). With respect to the

immunity issue, we concluded that although the privilege tax is measured by the

income of the taxed individual, the taxable event is the performance of federal judicial

duties in Jefferson County. See id. at 1572. As such, the privilege tax represents a fee

that a federal judge must pay to lawfully perform his or her duties, and therefore a

direct tax on the United States. See id. We further determined that Congress did not

consent to such taxation; as the states may not levy a direct tax on the United States

without Congress’ consent, we held that the tax is unconstitutional as applied to the

judges. See id. at 1573-76.

      Jefferson County then filed in the Supreme Court a petition for a writ of

certiorari. The Solicitor General submitted an amicus brief on behalf of Jefferson

County, in which it argued that the Tax Injunction Act (“TIA”), 28 U.S.C. § 1341,

barred federal jurisdiction over the case. In a brief memorandum opinion, the

Supreme Court vacated our en banc judgment and remanded the case for

consideration of the TIA’s effect on federal jurisdiction in light of the recent decision

in Arkansas v. Farm Credit Services, ___ U.S. ___, 117 S. Ct. 1776 (1997). Jefferson

County raised the jurisdictional issue in the district court in its unsuccessful motion

to remand, but on appeal did not. Therefore, this is the first time that the issue has

                                           3
been raised in this court. We review jurisdictional rulings and other questions of law

de novo. See, e.g., McKusick v. City of Melbourne, 96 F.3d 478, 482 (11th Cir. 1996).

                                       II. DISCUSSION

       A.      Does the Federal Officer Removal Statute Apply?

       The defendants removed this case to federal court under 28 U.S.C. § 1442(a)(3),

the section of the federal officer removal statute applicable to federal court officers.

Jefferson County contends that this case does not fall within the ambit of the statute,

and that removal of the case to federal court was therefore improper.3 As no other

circumstances exist that would support federal court jurisdiction, improper removal

would mandate dismissal. Thus, our first inquiry is to determine whether § 1442

applies.

       Unlike the general removal statute (28 U.S.C. § 1441), § 1442 is a jurisdictional

grant that empowers federal courts to hear cases involving federal officers where

jurisdiction otherwise would not exist. See Loftin v. Rush, 767 F.2d 800, 804 (11th

Cir. 1985). It reads in pertinent part:

       (a) A civil action or criminal prosecution commenced in a State court
       against any of the following persons may be removed by them to the

       3
          In its brief Jefferson County characterizes this issue as determining whether § 1442
“restores” any federal jurisdiction otherwise denied by the TIA. See Supplemental En Banc Brief
for Appellant at 17. However, as Article III courts have no jurisdiction except by statutory grant,
see, e.g., Baggett v. First Nat’l Bank, 117 F.3d 1342, 1345 (11th Cir. 1997), the proper inquiry for
us is to determine first whether § 1442 provided the district court with any jurisdiction for the TIA
to deny.

                                                 4
      district court of the United States for the district and division embracing
      the place wherein it is pending:

             ....

             (3) Any officer of the courts of the United States, for any Act
             under color of office or in the performance of his duties;

28 U.S.C.A. § 1442(a)(3) (1994 & Supp. 1997). The judges are “officer[s] of the

courts of the United States,” but removal of an action under this section requires the

satisfaction of two additional requirements: (1) the defendant must establish a “causal

connection between what the officer has done under asserted official authority” and

the action against him, Maryland v. Soper, 270 U.S. 9, 33, 46 S. Ct. 185, 190 (1926);

and (2) the defendant must advance a “colorable defense arising out of [his] duty to

enforce federal law,” Mesa v. California, 489 U.S. 121, 133, 109 S. Ct. 959, 966-67

(1989); accord Magnin v. Teledyne Continental Motors, 91 F.3d 1424, 1427-28 (11th

Cir. 1996). Thus, under the statute federal officers facing state law claims against

them arising out of their duties may remove their cases to federal court if they advance

a colorable federal defense. See Arizona v. Manypenny, 451 U.S. 232, 241-42, 101

S. Ct. 1657, 1664 (1981). Jefferson County argues that the judges have not satisfied

either requirement.

      We agree with the district court that the plain language of § 1442 is sufficiently

broad to encompass this case. The Jefferson County ordinance at issue makes it

“unlawful for any person to engage in . . . any . . . occupation . . . without paying

                                           5
license fees to the County.” Jefferson County, Ala., Ordinance No. 1120, § 2 (Sept.

29, 1987). Under official authority, Judges Acker and Clemon have “engaged in the

occupation” of being United States District Judges “without paying license fees to the

County,” and as a result the county has sued them. There is a direct causal connection

between the judges’ acts under official authority and the action against them.

      As for the second requirement, Jefferson County in effect urges us to reconsider

our decision on the merits, contending that the judges do not have immunity from the

tax and therefore have not advanced a “colorable” defense for their refusal to pay.

However, § 1442 does not require the resolution of, or even a detailed inquiry into,

the merits of the federal defense advanced. One of the primary purposes of § 1442 is

to allow officials to have the validity of their federal defenses determined in federal

court. See Willingham v. Morgan, 395 U.S. 402, 89 S. Ct. 1813 (1969). For removal

to be proper under § 1442, “[the federal defense alleged] need only be plausible; its

ultimate validity is not to be determined at the time of removal.” Magnin, 91 F.3d at

1427. At the time of removal the judges’ immunity defense was at least “plausible,”

a conclusion supported by both the district court’s grant of summary judgment for the

judges and this court’s subsequent affirmance. We hold that the federal officer

removal statute is sufficiently broad to permit removal of this case.

      B.     Does the Tax Injunction Act Preclude Federal Jurisdiction?

                                          6
      The next issue to be resolved is the effect, if any, of the Tax Injunction Act

(TIA) on federal jurisdiction in this case. Before the passage of the TIA, equity

practice directed federal courts to abstain in cases involving state taxation out of

concern for undue federal interference with the States’ internal economies. See, e.g.,

Matthews v. Rodgers, 284 U.S. 521, 525, 52 S. Ct. 217, 219 (1932). The TIA

represents a congressional recognition and sanction of this prior practice. See, e.g.,

Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463, 470, 96 S. Ct. 1634,

1640 (1976). It states:

      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 (1994). Congress’ purpose in enacting the TIA was “to deny

jurisdiction to United States district courts to . . . restrain the assessment, levy, or

collection” of state taxes. H.R. REP. NO. 75-1503 (1937) (House Judiciary Committee

report recommending passage of TIA). As such, the TIA is not a guide to abstention,

but a “jurisdictional rule,” Farm Credit Servs., ___ U.S. at ___, 117 S. Ct. at 1779

(1997), stripping federal courts of the power to grant relief, see United Gas Pipe Line

Co. v. Whitman, 595 F.2d 323, 326 (5th Cir. 1979) (“[T]he history of section 1341,

from its precursor federal equity practice to its most current judicial construction,

evidences that it is meant to be a broad jurisdictional impediment to federal court

interference with the administration of state tax systems.”).

                                           7
8
               1.      Does the Language of the TIA Cover This Case?

       The TIA only applies to situations involving a “tax under State law” and in

which the state does not provide a “plain, speedy and efficient remedy.” 28 U.S.C.

§ 1341 (1994). Neither party contends that the tax at issue is not a “tax under state

law” within the meaning of the TIA, so we will assume arguendo that it is, an

assumption consistent with the law in this circuit.4 As for the existence of a “plain,

speedy and efficient remedy” in the Alabama courts, Jefferson County argues that the

Alabama Declaratory Judgment Act, ALA. CODE § 6-6-220 (1997), and the judges’

ability to assert their constitutional objections to the tax as affirmative defenses in

their answer in a state court suit provide the necessary remedies. See Supplemental

En Banc Brief for Appellant at 15-16. The defendants do not contest the issue,5 but

in any event we agree with Jefferson County’s argument on this point. See Richards

v. Jefferson County, 789 F. Supp. 369, 371 (N.D. Ala.) (finding Alabama’s remedies

       4
         Under our case law, the ordinance would seem to levy a “tax” rather than a regulatory “fee.”
See Miami Herald Publishing Co. v. City of Hallandale, 734 F.2d 666, 672 (holding that effect of
similar “license fee” regulation was to raise general revenue, thus rendering it a “tax” for purposes
of the TIA), clarified, 742 F.2d 590 (11th Cir. 1984). While no court has explicitly held that local
taxes constitute taxes “under State law,” numerous decisions have applied the TIA to bar federal
jurisdiction in cases involving local taxes. See, e.g., Rosewell v. LaSalle Nat’l Bank, 450 U.S. 503,
101 S. Ct. 1221 (1981); North Georgia Elec. Membership Corp. v. City of Calhoun, 989 F.2d 429
(11th Cir. 1993), aff’d, 989 F.2d 429 (11th Cir. 1993); United States v. Broward County, 901 F.2d
1005 (11th Cir. 1990); Williams v. City of Dothan, 818 F.2d 755, modified, 828 F.2d 13 (11th Cir.
1987).
       5
        Most of the defendants’ substantive arguments are contained in the brief filed by United
States District Judges Hancock, Propst, Nelson and Blackburn as amici curiae, which the defendants
adopt in its entirety. See Supplemental En Banc Brief for Appellees at 8.

                                                 9
adequate for TIA purposes in suit concerning same ordinance), aff’d, 938 F.2d 237

(11th Cir. 1992). We hold that the case at bar falls within the scope of the TIA.

              2.     Does the TIA Bar Federal Jurisdiction?

       Our holding that the TIA applies does not necessarily foreclose federal

jurisdiction, as there are two exceptions to the literal proscriptions of the statute: First,

as the TIA is a legislative enactment, Congress is of course free to create exceptions

to the act in other legislation. Federal courts have found both express and implied

congressional intent to create exceptions to the TIA in other jurisdictional statutes.

See City and County of San Francisco v. Assessment Appeals Bd., 122 F.3d 1274,

1276 (9th Cir. 1997); Carrollton-Farmers Branch Indep. Sch. Dist. v. Johnson &

Cravens, 13911, Inc., 858 F.2d 1010, 1015 (5th Cir. 1988), vacated on other grounds,

889 F.2d 571 (5th Cir. 1989); Southern Ry. Co. v. State Bd. of Equalization, 715 F.2d

522, 529-30 (11th Cir. 1983). Second, the statute “does not constrain the power of

federal courts if the United States sues to protect itself or its instrumentalities from

state taxation,” Farm Credit Servs., ___ U.S. at ___, 117 S. Ct. at 1778, even if the

case falls within the literal language of the statute. This judicially created “federal

instrumentality” exception is based on the understanding that the sovereign is not

bound by its own legislative restrictions unless it expressly intends to bind itself. See

id. at ___, 117 S. Ct. at 1781. Thus, both exceptions involve a determination of

                                             10
congressional intent to allow federal jurisdiction notwithstanding the TIA’s

proscriptions. We examine them in turn.

                       a.     Does § 1442 Override the TIA?

       The defendants contend that § 1442, without more and in all cases, overrides

the TIA, giving them an absolute right to remove to federal court. We reject this

contention. As a statute that strips federal jurisdiction, the TIA assumes a pre-existing

statutory grant; without such a grant, there would be no jurisdiction for the TIA to

strip away. The Supreme Court has spoken directly on this point:

       Since presumably all actions properly within the jurisdiction of the
       United States district courts are authorized by one or another of the
       statutes conferring jurisdiction upon those courts, the mere fact that a
       jurisdictional statute . . . speaks in general terms of “all” enumerated civil
       actions does not itself signify that [an entity is] exempted from the
       provisions of [the TIA].

Moe v. Confederated Salish & Kootenai Tribes, 425 U.S. 463, 472, 96 S. Ct. 1634,

1641 (1976);6 see also Bank of New England Old Colony v. Clark, 986 F.2d 600, 603,

604 (1st Cir. 1993) (“For the FDIC to prove that the [FIRREA] removal statute trumps

the [TIA], it must show that Congress clearly and manifestly intended the statute to

be an exception . . . . The mere fact that [the removal statute] states that the FDIC may

remove ‘all’ actions does not in itself demonstrate the clear and manifest intent of

       6
        Although it relied on the principle of comity underlying the TIA rather than the act itself,
the Court came up with the same result with respect to tax refund actions under 42 U.S.C. § 1983.
See Fair Assessment in Real Estate Assoc. v. McNary, 454 U.S. 100, 116, 102 S. Ct. 177, 186
(1981).

                                                11
Congress to trump the [TIA]. . . . Such language, rather, is consistent with a general

grant of jurisdiction which did not take into account the provisions of the Act.”

(citations omitted)); Ashton v. Cory, 780 F.2d 816, 822 (9th Cir. 1986) (ERISA § 502

(28 U.S.C. § 1132(e)(1)) is not exception to TIA, because “[i]n the absence of . . .

express congressional action, we cannot infer that Congress intended impliedly to take

the drastic step of carving out an exception to the Tax Injunction Act”). In light of the

reasoning of the Supreme Court and of other federal courts, we reject the defendants’

argument and hold that § 1442 standing alone is not a universal exception to the TIA.

                    b.     Do the Defendants Come Within The “Federal
                           Instrumentality” Exception to the TIA?
      We have found no direct evidence of congressional intent to allow the

defendants to bypass the TIA in the language of the statutes at issue. However, in

Department of Employment v. United States, 385 U.S. 355, 358, 87 S. Ct. 464, 467

(1966), the Supreme Court set forth a judicial exception to the TIA based on implied

congressional intent, holding that “[the TIA] does not act as a restriction upon suits

by the United States to protect itself and its instrumentalities from unconstitutional

state exactions.” The Court’s holding was based on the understanding that the

government is not bound by its own legislative restrictions unless it expressly intends

to bind itself. See Farm Credit Servs., ___ U.S. at ___, 117 S. Ct. at 1781; see

also Dollar Sav. Bank v. United States, 86 U.S. (19 Wall.) 227, 239 (1873). In other

words, the Court assumed that in enacting the TIA Congress did not intend to prevent

                                           12
the United States from asserting its own tax immunity in federal court. Thus the

judicial exception, also known as the “federal instrumentality exception,” allows the

federal government to contest state taxation of its instrumentalities in federal court

notwithstanding the restrictions of the TIA. See, e.g., United States v. Broward

County, 901 F.2d 1005, 1008 (11th Cir. 1990); Dawson v. Childs, 665 F.2d 705, 710

(5th Cir. Unit A Oct. 1980); United States v. Lewisburg Sch. Dist., 539 F.2d 301, 310

(3d Cir. 1976).

                           1.    Arkansas v. Farm Credit Services

      Read literally, however, the exception articulated in Department of Employment

only applies to “suits by the United States to protect itself and its instrumentalities”

from state taxation. 355 U.S. at 358, 87 S. Ct. at 467 (emphasis added). The few

circuit court cases addressing the issue are split on whether federal instrumentalities

may contest state taxes in federal court without the government as a co-party.

Compare, e.g., FDIC v. City of New Iberia, 921 F.2d 610, 613 (5th Cir. 1991) (FDIC

is federal instrumentality that may contest state tax in federal court without United

States as co-plaintiff) with, e.g., Housing Auth. of Seattle v. State of Washington,

Dep’t of Revenue, 629 F.2d 1307, 1311 (9th Cir. 1980) (joinder with the United States

as co-plaintiff necessary for instrumentality to avoid TIA). This was the issue the

Supreme Court set out to address in Farm Credit Services.

                                          13
      Farm Credit Services concerned Production Credit Associations (PCAs),

federally chartered corporations whose organic statute explicitly designates them as

“instrumentalities” of the United States. See 12 U.S.C. §§ 2071(b)(7), 2077 (1994).

PCAs are exempt by federal statute from state taxes on their “notes, debentures, and

other obligations.” See 12 U.S.C. § 2077 (1994). In Farm Credit Services, four PCAs

sued the state of Arkansas in federal district court, claiming immunity not only from

the taxes explicitly designated in § 2077, but from Arkansas sales and income taxes

as well. The government did not participate in the suit, and the Solicitor General

submitted an amicus brief opposing jurisdiction. Thus, the case turned on whether the

PCAs could utilize the Department of Employment exception without the joinder of

the government as a co-party. The Supreme Court held that the TIA barred the PCAs

from contesting the tax in federal court unless the United States participated on their

behalf. Farm Credit Servs., ___ U.S. at ____, 117 S. Ct. at 1780.

      The Court has directed us to consider the jurisdictional issue in this case in light

of Farm Credit Services. While the Farm Credit Services Court held that PCAs could

not sue in federal court without the United States as co-party, it did not extend that

holding to other instrumentalities; the result in Farm Credit Services seems to hold

open the “federal instrumentality” exception for entities litigating on their own.

Jefferson County’s brief characterizes Farm Credit Services as holding that “federal

courts [have] no jurisdiction over a dispute involving the collection of a state tax from

                                           14
a federal instrumentality unless the United States [is] a co-party.” Supplemental En

Banc Brief for Appellant at 16. This is a clear misreading of the opinion, which states

only that “instrumentality status does not in and of itself entitle an entity to the same

exemption the United States has under the Tax Injunction Act.” Farm Credit Servs.,

___ U.S. at ___, 117 S. Ct. at 1782; see also City and County of San Francisco v.

Assessment Appeals Bd., 122 F.3d 1274, 1277 (9th Cir. 1997) (interpreting Farm

Credit Services as allowing some instrumentalities to bypass the TIA without the

United States’ participation). In fact, the Farm Credit Services Court reviewed

different approaches used by the circuits and noted that a rule barring all federal

instrumentalities from federal court unless the United States participates is the “most

restrictive approach” of those used. Farm Credit Servs., ___ U.S. at ___, 117 S. Ct.

at 1781.

      With respect to the PCAs, the Court held that “[u]nder any of the

tests . . . described, PCA’s would not be exempt from [the TIA].” Id. at ___, 117

S. Ct. at 1782. The factor that seems to have weighed most heavily in the Court’s

decision is the PCAs’ quasi-private status:

                The PCA’s’ business is making commercial loans, and all their
      stock is owned by private entities. Their interests are not coterminous
      with those of the Government any more than most commercial interests.
      Despite their formal . . . designation as instrumentalities of the United
      States, . . . PCA’s do not have or exercise power analogous to that
      of . . . any of the departments or regulatory agencies of the United States.

                                           15
Id. Article III judges are completely dissimilar from PCAs. Farm Credit Services

therefore informs our analysis, but does not answer the question before us with regard

to Judges Acker and Clemon. However, the opinion cites with seeming approval two

cases which are helpful to our inquiry: Moe v. Confederated Salish & Kootenai

Tribes,7 see id. at ___, 117 S. Ct. at 1781 (“Moe is instructive here.”), and Federal

Reserve Bank v. Commissioner of Corps. and Taxation,8 see id. at ___, 117 S. Ct. at

1782. We now examine those cases.

                              2.       Moe v. Confederated Salish & Kootenai Tribes

      In Moe, the Court affirmed a district court ruling that extended the United

States’ Department of Employment exception to Native American tribes suing in

federal court. The district court allowed the tribes to bypass the TIA under the

exception and enjoin the collection of state taxes from cigarette sales. It based this

ruling on two alternative grounds: (1) that the United States’ significant interest in the

tribes qualified them for the exception, and a symbolic joinder of the United States

would serve no purpose; and (2) that a separate jurisdictional statute, 28 U.S.C.

§ 1362,9 which gives Native Americans special access to federal court, embodied a

      7
       425 U.S. 463, 96 S. Ct. 1634 (1976).
      8
       499 F.2d 60 (1st Cir. 1974).
      9
       The statute reads:
               The district courts shall have original jurisdiction of all civil actions, brought
      by any Indian tribe or band with a governing body duly recognized by the Secretary
      of the Interior, wherein the matter in controversy arises under the Constitution, laws,
      or treaties of the United States.

                                                  16
congressional purpose to allow the tribes to sue in federal court as if they were the

United States. See Confederated Salish & Kootenai Tribes v. Moe, 392 F. Supp. 1297,

1303-04 (D. Mont. 1974).

       The Supreme Court affirmed the ruling, but found each of the district court’s

grounds insufficient standing alone to justify allowing the tribes to bypass the TIA.

The Court first stated that although the tribes’ asserted interests coincided with those

of the federal government, perhaps qualifying them for federal “instrumentality”

status, this congruence of interests was insufficient by itself to exempt the tribes from

the TIA. See Moe, 425 U.S. at 471-72, 96 S. Ct. at 1640-41. Likewise, the Court

refused to interpret § 1362 as a blanket exception to the TIA. See id. at 472, 96 S. Ct.

at 1641. (“[T]he mere fact that a jurisdictional statute such as § 1362 speaks in general

terms of ‘all’ enumerated civil actions does not itself signify that Indian tribes are

exempted from the provisions of [the TIA].”).

       Instead, the Court affirmed the district court on a hybrid of the two grounds.

The Court assumed that the United States could have sued on behalf of the tribes by

itself or as co-plaintiff, because of the congruence of the tribes’ interests and those of

the government. The Court also found that § 1362 evidenced a congressional intent

to allow Native American tribes, in some circumstances, to participate in federal court

28 U.S.C. § 1362 (1994).

                                           17
as if they were the United States suing as the tribes’ trustee. The Court held that under

the circumstances of the case the tribes could use § 1362 to stand in the place of the

United States and enjoy the benefit of the Department of Employment exception. See

id. at 474-75, 96 S. Ct. 1641-42.

                           3.     Federal Reserve Bank v. Commissioner of Corps. &
                                  Taxation
      Federal Reserve Bank involved a declaratory judgment action brought in

federal court by the Federal Reserve Bank of Boston, which sought to avoid

Massachusetts sales tax on materials used to construct its new building. The First

Circuit’s decision allowed the bank to contest the tax in federal court without the

United States as co-plaintiff. The court began by accepting the bank’s status as a

federal instrumentality, framing the case in terms of what it deemed the proper issue:

      [T]he present case does not turn on whether federal reserve banks are
      instrumentalities. Plainly they are. The question is whether there is any
      reason to treat [the bank] differently from instrumentalities [not eligible
      for an exemption from the TIA] like savings and loan associations. . . .
      Is [the bank] privileged, like the United States itself, to maintain this
      proceeding?

Federal Reserve Bank, 499 F.2d at 62. The First Circuit noted that in answering the

question of whether an entity could use the instrumentality exception without the

participation of the government, “we must accept the absence of any bright line to

facilitate analysis; each instrumentality must be examined in light of its governmental

role and the wishes of Congress as expressed in relevant legislation.” Id. at 64.

                                           18
       The court decided that the bank was a federal instrumentality eligible for the

Department of Employment exception, citing several factors in favor of its conclusion.

First, the court noted that the bank performed significant governmental functions,

serving primarily as a “fiscal arm[] of the federal government,” and thus a state tax

affecting the bank would “call[] directly into question the sovereign interest of the

United States.” Id. at 62, 63. Second, the bank had the benefit of a special

jurisdictional statute giving it access to the federal courts; the court stated that “[s]uch

a clearly expressed strong federal interest in litigating all reserve bank business in the

federal courts further tips the scale away from the general hostility to interfering with

[state taxation].” Id. at 63. Third, the bank occupied a special place in the

governmental structure “outside the executive chain of command,” id., which

militated against forcing the bank to acquire the Attorney General’s approval before

going to court. Thus, the court concluded, the bank could “proceed in a federal forum

under the same exception . . . available to the United States were it a named plaintiff.”

Id. at 64.

                     4.     Are the Judges Eligible for the Exception?

       We conclude that the defendants’ situation more closely resembles that of the

Native American tribes in Moe and the bank in Federal Reserve Bank than the PCAs

in Farm Credit Services. The Farm Credit Services Court was concerned that PCAs

are basically commercial lenders, whose interests “are not coterminous with those of

                                            19
the Government any more than most commercial interests.” Farm Credit Servs., ___

U.S. at ___, 117 S. Ct. at 1782. In contrast, the Federal Reserve Bank court concluded

that

       [w]hile savings and loan associations may . . . be analogized to private
       corporations, federal reserve banks, . . . are plainly and predominantly
       fiscal arms of the federal government.             Their interests seem
       indistinguishable from those of the sovereign . . . .

Federal Reserve Bank, 499 F.2d at 62. Likewise, the Moe Court assumed that the

Native American tribes at issue in that case had interests closely aligned with those

of the United States, at least as far as taxation was concerned. See Moe, 425 U.S. at

471, 473-74, 96 U.S. at 1640, 1641.

       As one of the three branches of the federal government, the federal judiciary’s

interests are congruent with, if not identical to, those of the United States. We held

in our prior en banc opinion that “[w]hen performing federal judicial duties, a federal

judge performs the functions of government itself, and cannot realistically be viewed

as a separate entity from the federal court.” Acker, 92 F.3d at 1572 (internal quotation

and citation omitted). In interpreting the statute regarding the duties of the Attorney

General, the Supreme Court rejected the argument that cases “in which the United

States is interested” are solely those cases in which the interests of the executive

branch are at stake. United States v. Providence Journal Co., 485 U.S. 693, 701, 108

S. Ct. 1507 (1988). The Court stated: “It seems to be elementary . . . that the three

branches are but co-ordinate parts of one government. . . . [W]e shall not assume that

                                          20
[Congress] intended . . . to exclude the judicial branch when it referred to the ‘interest

of the United States.’” Id. (internal quotation and citation omitted).

       Another factor present in this case as well as in Moe and Federal Reserve Bank,

but notably absent from Farm Credit Services, is the existence of a special

jurisdictional statute.10 Both Moe and Federal Reserve Bank concluded that special

jurisdictional statutes, without more, were insufficient to override the TIA, but were

evidence of congressional intent that the entities in question be allowed to stand in the

place of the United States in federal court. While we have refused to read § 1442 as

a blanket exemption to the TIA, we likewise find in the statute a congressional intent

that federal officers’ access to the federal courts “[will] be at least in some respects as

broad as that of the United States.” Moe, 425 U.S. at 473, 96 S. Ct. at 1641. As

Congress recently noted, “[section 1442] fulfills Congress’ intent that questions

concerning the exercise of Federal authority, the scope of Federal immunity and

Federal-State conflicts be adjudicated in Federal court.” S. REP. NO. 104-366 at 31

(1996), reprinted in 1996 U.S.C.C.A.N. 4202, 4210. The United States can only act

       10
          In interpreting Farm Credit Services, the Ninth Circuit has concluded that such a statute
is a prerequisite for an entity wishing to utilize the federal instrumentality exception without the
United States as a co-party. See City & County of San Francisco v. Assessment Appeals Bd., 122
F.3d 1274, 1277 (9th Cir. 1997) (“A federal instrumentality does not have to join the United States
as a party, however, when a ‘second federal statute grant[ing] sweeping federal court jurisdiction’
exists.”) (quoting Farm Credit Servs., ___ U.S. at ___, 117 S. Ct. at 1781). Other federal court
decisions predating Farm Credit Services have held similarly. See MRT Exploration Co. v.
McNamara, 731 F.2d 260, 265 (5th Cir. 1984); North Georgia Elec. Membership Corp. v. Calhoun,
820 F. Supp. 1403, 1407-08 (N.D. Ga. 1992), aff’d, 989 F.2d 429 (11th Cir. 1993); National
Carriers’ Conf. Comm. v. Heffernan, 440 F. Supp. 1280, 1283 (D. Conn. 1977).

                                                21
through its agents and officers; when those officers remove a case to federal court

under § 1442 they are, in effect, appearing in court for the United States. The case

before us directly implicates the congressional concerns addressed by § 1442, and

“[s]uch a clearly expressed strong federal interest in litigating [such cases] in the

federal courts further tips the scale away from the general hostility to interfering with

a state taxing scheme.” Federal Reserve Bank, 499 F.2d at 63.

      Finally, important structural concerns militate against us requiring the

defendants to acquire the support of the United States in this case. Much like the

federal reserve banks, the federal judiciary operates “outside of the executive chain

of command,” Id. There are good reasons not to insist that the federal judiciary

acquire the support of the Attorney General in order to assert Supremacy Clause

immunity, not the least of which is the ever-present possibility of conflict between the

executive and judicial branches. The federal instrumentality exception represents a

judicial finding of Congress’ implied intent in enacting the TIA; refusing to apply the

exception in this case would be equivalent to a finding that Congress intended to put

the judicial branch at the mercy of the executive.

      Like the Native American tribes in Moe and the bank in Federal Reserve Bank,

the defendants in this case have interests closely aligned with those of the United

States, enjoy the benefits of a jurisdictional statute giving them special access to the

federal courts, and occupy a place in the structure of our government that justifies

                                           22
allowing them to assert their tax immunity in federal court without first going hat-in-

hand to the Attorney General. Having examined this case “in light of [the judges’]

governmental role and the wishes of Congress as expressed in relevant legislation,”

Federal Reserve Bank, 499 F.2d at 64, we hold that Judges Acker and Clemon are

eligible for the Department of Employment exception, and therefore, that the district

court had jurisdiction to hear the case.

                                 III. CONCLUSION

      We have reconsidered our decision in light of Farm Credit Services, and hold

that under the facts of this case the defendants are eligible for the federal

instrumentality exception. Therefore, the TIA does not operate to bar federal

jurisdiction, and removal of the case was proper. Accordingly, we REINSTATE our

en banc opinion on the merits and AFFIRM the district court’s ruling.

      AFFIRMED; EN BANC OPINION REINSTATED.

ANDERSON, Circuit Judge, dissenting, in which HENDERSON, Senior Circuit

Judge, joins::

      Respectfully, I dissent for the reasons set out in my dissent, and Judge Birch’s

dissent, to the initial en banc decision. Jefferson County v. Acker, 92 F.3d 1561,

1576-81 (11th Cir. 1996).

                                           23
BIRCH, Circuit Judge, dissenting, in which HENDERSON, Senior Circuit

Judge, joins:

         I respectfully dissent for the same reasons set out in the initial en

banc decision. Jefferson County v. Acker, 92 F.3d 1561, 1577-81 (11th

Cir. 1996). Because I continue to view the tax at issue as nothing more

than an income tax on the earnings of citizens who are also federal judges,

I cannot agree that the federal instrumentality exception to the Tax

Injunction Act applies. Accordingly, I believe the district court is without

jurisdiction to hear this case.

CARNES, Circuit Judge, dissenting, in which HENDERSON, Senior Circuit Judge,

joins:

         The Supreme Court vacated our prior decision and remanded this case to us “for

further consideration in light of Arkansas v. Farm Credit Services of Central

Arkansas, 117 S. Ct. 1776 (1997),” a decision which applied the Tax Injunction Act,

28 U.S.C. § 1341. When the Supreme Court vacates and remands one of our decisions,

the entire case comes back to us and we are free to bring a fresh perspective (and

                                           24
hopefully fresh wisdom) to issues we have already addressed. See Moore v. Zant

, 885 F.2d 1497, 1502 - 03 (11th Cir. 1989) (en banc). Instead of reinstating our prior

decision affirming the district court, we should seize this opportunity to correct our

earlier decision.

      When this case was last before us, I joined the majority opinion which held

that insofar as Jefferson County’s occupational tax applies to federal judges it amounts

to a tax on federal instrumentalities and violates the intergovernmental tax immunity

doctrine. Since then I have been convinced that I was wrong to join that holding. I

would like to think that I have become smarter and more learned in the law since our

prior decision was issued, but there is no compelling evidence to support such a

conclusion as to any member of this Court. My change of view is attributable instead

to reading the amicus brief filed by the United States after this case left our Court and

while it was before the Supreme Court on a petition for writ of certiorari. Reading

that brief (which was incorporated as an appendix into the latest brief Jefferson

County filed in this Court) and reflecting upon it, as well as re-reading some of the

authorities cited has convinced me that I was wrong before.

      Having finally seen the light, I join Judges Anderson, Birch, and Henderson in

concluding that the occupational tax at issue in this case is a tax upon the “pay or

compensation” of those to whom it applies, including federal judges. As such it falls

within the consent to taxation Congress has given in the Public Salary Act, 4 U.S.C.

                                           25
§ 111, and therefore does not violate the intergovernmental tax immunity doctrine.

Application of the tax to federal judges is not unconstitutional.

      As for the Farm Credit Services issue, I do not believe that the federal

instrumentality exception to the Tax Injunction Act applies in this case. Accordingly,

I would hold that the district court lacked jurisdiction,     and I would vacate its

judgment and remand with directions to dismiss the case for lack of jurisdiction.

Assuming to the contrary that the Tax Injunction Act does not bar this action, I would

reverse and remand the district court’s judgment on the merits.

                                          26