Court Opinion

ID: 4318615
Source: CourtListenerOpinion
Date Created: 2018-10-05 15:09:48.092542+00
Date Added: 2024-06-11T14:45:20.978213
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

DELAWAREANS FOR EDUCATIONAL                   )
OPPORTUNITY and NAACP DELAWARE                )
STATE CONFERENCE OF BRANCHES,                 )
                                              )
       Plaintiffs,                            )
                                              )
          v.                                  )       C.A. No. 2018-0029-VCL
                                              )
JOHN CARNEY, Governor of the State of         )
Delaware; SUSAN BUNTING, Secretary of         )
Education of the State of Delaware; KENNETH   )
A. SIMPLER, Treasurer of the State of         )
Delaware; SUSAN DURHAM, Director of           )
Finance of Kent County, Delaware; BRIAN       )
MAXWELL, Chief Financial Officer of New       )
Castle County, Delaware; and GINA             )
JENNINGS, Finance Director for Sussex County, )
                                              )
       Defendants.                            )

                          MEMORANDUM OPINION

                         Date Submitted: August 29, 2018
                          Date Decided: October 5, 2018

Ryan Tack-Hooper, Karen Lantz, ACLU FOUNDATION OF DELAWARE, INC.,
Wilmington, Delaware; Richard H. Morse, Brian S. Eng, COMMUNITY LEGAL AID
SOCIETY, INC; Counsel for Plaintiffs.

Barry M. Willoughby, Kathaleen St. J. McCormick, Lauren E.M. Russell, Elisabeth S.
Bradley, Lauren Dunkle Fortunato, YOUNG CONAWAY STARGATT & TAYLOR,
LLP, Wilmington, Delaware; Counsel for Defendants John Carney, Susan Bunting, and
Kenneth A. Simpler.

William W. Pepper Sr., Gary E. Junge, SCHMITTINGER & RODRIGUEZ, P.A., Dover,
Delaware; Counsel for Defendant Susan Durham.

Herbert W. Mondros, Helene Episcopo, MARGOLIS EDELSTEIN, Wilmington
Delaware; Counsel for Defendant Gina Jennings.
Adam Singer, Mary A. Jacobson, NEW CASTLE COUNTY OFFICE OF LAW, New
Castle, Delaware; Counsel for Defendant David M. Gregor.

LASTER, V.C.
       The plaintiffs contend that Delaware fails to provide children from low-income

families, children with disabilities, and children whose first language is not English

(collectively, “Disadvantaged Students”) with a meaningful opportunity to obtain an

adequate education. They assert that part of the problem is an inequitable system for

funding public schools. They argue that New Castle County, Kent County, and Sussex

County contribute to the problem by failing to collect school-related taxes in a manner that

complies with the statutory scheme created by the Delaware General Assembly.

       Delaware public schools receive funds from local, state, and federal sources. The

local portion contributes approximately one third of the total. The amount of local taxes

that a school district collects depends on two variables: the assessed value and the tax rate.

       By statute, the assessed value must reflect the property’s “true value in money.” The

Delaware Supreme Court has held that this concept equates to the property’s “fair market

value.” This decision refers to this statutory obligation as the “Market Value Requirement.”

       As clear as this mandate sounds, assessments in Delaware remain at values

established thirty to forty years ago. In Count III of their complaint, the plaintiffs assert a

straightforward claim: Collecting taxes based on decades-old values violates the Market

Value Requirement.

       To obtain relief, the plaintiffs sued the officials responsible for collecting property

taxes in New Castle, Kent, and Sussex Counties. No one accuses these individuals of

engaging personally in any financial impropriety. The plaintiffs have sued them as

representatives of their respective offices, which are the vehicles through which the

counties collect property taxes. As their preferred form of relief, the plaintiffs seek an order

                                               1
that would stop the officials from collecting taxes until the counties devise a way to comply

with the Market Value Requirement.

       The county officials have moved to dismiss the complaint. This decision denies their

motion.

                           I.     FACTUAL BACKGROUND

       The facts are drawn from the plaintiffs’ complaint. At this stage of the proceedings,

the plaintiffs’ allegations are assumed to be true, and they receive the benefit of all

reasonable inferences.

A.     Public Schools And Property Taxes

       Delaware public schools receive funding from federal, state, and local sources. In

Fiscal Year 2016, 31% of their funding came from local sources.1

       To generate local revenue, county officials levy taxes on owners of non-exempt real

property located in the school district.2 The amount of local revenue depends on two

variables: the assessed value of the property and the tax rate per dollar of assessed value.

       The Delaware Code provides that “[a]ll property subject to assessment shall be

assessed at its true value in money.”3 The Delaware Supreme Court has held that the

       1
           Compl. ¶ 27.
       2
           See 14 Del. C. §§ 1902–03, 1913–18.
       3
           9 Del. C. § 8306(a).

                                              2
concept of a property’s “true value in money” is “the same as its fair market value.” 4

Elaborating, the high court explained that “fair market value” is “the price which would be

agreed upon by a willing seller and a willing buyer, under ordinary circumstances, neither

party being under any compulsion to buy or sell.”5

B.     Decades-Old Assessed Values

       Even though the Delaware Code mandates that property by assessed at its “true

value in money,” and even though the Delaware Supreme Court has held that this standard

means its “fair market value,”6 property in Delaware remains assessed at values from thirty

to forty years ago.

       In New Castle County, assessments are based upon property values from 1983. In

Kent County, assessments are based on property values from 1987. In Sussex County,

assessments are based on property values from 1974. These are the magic years because

they mark when each county’s last general assessment became effective.

       Property values have changed dramatically since the 1970s and 1980s. The plaintiffs

observe that the statewide inflation-adjusted median sales price of a new home in January

1980 (measured in 2017 dollars) was $126,455. By January 2010, the median value of all

owner-occupied housing in Delaware (not just new homes) was $273,000, a 116% real

       4
        New Castle Cty. Dep’t of Fin. v. Teachers Ins. & Annuity Ass’n, 669 A.2d 100,
102 (Del. 1995).
       5
           Id.
       6
           Id.

                                            3
increase over the 1980 figure. They also observe that the House Price Index for New Castle

County, published by the Federal Housing Finance Agency, increased 340% between 1983

and 2016. Yet the counties continue to use property values from 1987, 1983, and 1974.

       One can reasonably infer that during the intervening decades, property values have

changed at different rates in different parts of the state. Beach property in Sussex County

has appreciated differently than property further inland. Urban property in Wilmington or

Dover has appreciated differently than property in the suburbs or more rural areas. Yet the

counties have locked in the relative valuations that existed in 1987, 1983, and 1974.

C.     Problems For Delaware’s Public Schools

       For Delaware’s public schools, the failure to comply with the Market Value

Requirement creates at least three problems.

       First, the tax base generates less revenue than it otherwise would. In Fiscal Year

2016, the out-of-date assessments generated approximately $640 million in tax revenue.7

At fair market value, the same rates would generate many times that figure. But even if the

counties started complying with the Market Value Requirement tomorrow, tax payers need

not fear that their tax bills would double or triple. The Delaware Code caps the maximum

increase in tax burden from any assessment at 10%.8 That said, a 10% bump is nothing to

       7
           See Compl. ¶ 27.
       8
          14 Del. C. § 1916(b) (“Whenever the qualified voters of a reorganized school
district have approved a specific rate of taxation or specified amount of taxation under §
1903 of this title and a subsequent general reassessment of all real estate in the county
changes the total assessed valuation of the school district, the local board of education of
each such local school district shall calculate a new real estate tax rate which, at its

                                               4
scoff at. Many of us would appreciate a 10% raise. And here, the number is facially large—

$64 million. That amount could provide a lot of services for Disadvantaged Students.

       Second, the current regime allocates money inequitably among districts based on

relative values from three and four decades ago rather than relative values today. Each year,

the Department of Education recommends that the General Assembly authorize an

aggregate state-wide appropriation based on the number of “units of pupils” in each school

district.9 The General Assembly allocates appropriations in three buckets. Division I funds

pay for administrators, teachers, and other personnel.10 Division II funds primarily pay for

textbooks, furniture, and other classroom equipment, but can be used for any lawful

purpose.11 Division III funds are budget equalization funds that are allocated based on a

formula designed to provide matching funds to less wealthy districts.12 The formula is

complex but essentially pegs state funding to a combination of each school district’s “effort

index” and “ability index.”13 The effort index is the ratio by which the district’s tax burden

maximum, would realize no more than 10% increase in actual revenue over the revenue
derived by real estate tax levied in the fiscal year immediately preceding such reassessed
real estate valuation. Any subsequent increase in rate of taxation shall be achieved only by
an election of the qualified voters in such local school district according to the procedures
in § 1903 of this title.”).
       9
           See 14 Del. C. §§ 1702(b), 1703–04.
       10
            14 Del. C. § 1702(c).
       11
            14 Del. C. §§ 1702(d), 1706.
       12
            See 14 Del. C. § 1707.
       13
            14 Del. C. § 1707(b)(3) & (c).

                                              5
exceeds the average tax burden across the state. The ability index is the district’s aggregate

property value. Because those property values remain tied to values from decades ago, they

are no longer an accurate measure of the districts’ relative ability. The equalization effort

becomes arbitrary.

       Third, the current regime forces school districts to ask voters on a regular basis to

raise their own taxes. Because the counties are not complying with the Market Value

Requirement, the value of a school district’s tax base remains flat. But the cost of running

a school district does not remain flat. Each year, inflation erodes the purchasing power of

a school district’s budget, requiring more dollars to achieve the same results. Even if a

school district does not introduce any new initiatives and just maintains the status quo, the

absence of regular and systematic assessments inevitably generates a funding gap.

       The failure to adhere to the Market Value Requirement leaves school districts just

with one option. The Delaware Code empowers the school board for each district to set the

amount of tax per dollar of assessed value that a property owner must pay.14 Using this

authority, the school board can increase the tax rate so that the same assessed value

generates more revenue. But the school board cannot levy the tax unilaterally. The school

board first must “call a special election to be held at the polling place or places designated

by the Department of Elections conducting the election.”15 The outcome of the special

       14
            See 14 Del. C. § 1902.
       15
            14 Del. C. § 1903.

                                              6
election determines whether the tax can be levied.16 Generally speaking, in Delaware, a

school district needs to prevail in a referendum every three to five years.17

       Frequent tax referendums generate negative reactions. Some residents object as a

matter of principle to having their taxes raised. More object if they think their tax dollars

are not being used wisely. Delaware’s complex system for funding public schools is not

easily understood. Confronted with regular requests for tax increases, some residents

naturally infer that school officials are wasting money. Community resentment does not

help the public schools or Disadvantaged Students.

       If counties adhered to the Market Value Requirement, then assessed values would

increase with inflation. Indeed, property appreciation historically has outpaced broad

measures of inflation. School district revenues would rise with property values, and the

same tax rate would generate more money for the school district. Instead of having to seek

voter approval to raise tax rates to cover the same expenses, and school districts could use

referendums when they truly needed more money for new initiatives. Freed of the burden

of conducting regular referendums, school personnel could devote more time to education.

With district residents no longer being asked to raise their own taxes every three to five

years, fewer residents would suspect that the districts were being fiscally irresponsible.

       16
         14 Del. C. § 1911 (“If the majority of the votes cast at the election . . . shall be for
additional tax, the tax shall be levied and collected as provided in this chapter.”).
       17
         See Young v. Red Clay Consol. Sch. Dist., 159 A.3d 713, App. A (Del. Ch. 2017)
(compiling a likely underinclusive list of school referendums in Delaware, since 1980,
drawn from publicly available articles in The News Journal).

                                               7
D.     The Roles of the County Officials

       In each county, officials generate a tax roll that identifies the assessed value of the

property, then collect taxes based on the assessment value. The officials collect school

taxes at the same time and in the same manner as county taxes.18

       In New Castle County, the Office of Finance is responsible for preparing the annual

tax rolls and collecting taxes, including for school districts in the county.19 When the

complaint was filed, Brian Maxwell, the County’s Chief Financial Officer, managed the

office. During the litigation, David M. Gregor took over as Chief Financial Officer.

       In Kent County, the Department of Finance is responsible for preparing the annual

tax rolls and collecting taxes.20 Defendant Susan Durham, the County’s Director of

Finance, currently manages the department.

       In Sussex County, the Department of Finance is responsible for preparing the annual

tax rolls, although the school districts send out their own tax bills based on the County’s

tax roll.21 Defendant Gina Jennings, the County’s Director of Finance, currently manages

the department.

       18
            14 Del. C. § 1917(a).
       19
            9 Del. C. §§ 1371(1) & (3), 1375.
       20
            9 Del. C. §§ 4123(b), 4124(c).
       21
            9 Del. C. §§ 7004(b) & (l), 7004(c)(2) & (j); see 14 Del. C. § 1902; Dkt. 16 at 1.

                                                8
E.     This Litigation

       On January 16, 2018, the plaintiffs filed this litigation. Both plaintiffs are

institutions with a strong interest in Delaware’s educational system and the challenges

faced by Disadvantaged Students.

       Delawareans for Educational Opportunity is a nonprofit association of Delawareans

who are concerned about the state’s failure to provide all children with an adequate

education. They have joined together for the purpose of improving the Delaware education

system so that all children have a meaningful opportunity to obtain an adequate education

regardless of where they live, their economic circumstances, their health, their disability

status, or their first language. The membership of Delawareans for Educational

Opportunity includes the parents of Disadvantaged Children who are enrolled in the public

schools.

       The NAACP Delaware State Conference of Branches (“NAACP-DE”) is a non-

partisan organization affiliated with the National Association for the Advancement of

Colored People. NAACP-DE has seven branches located throughout the state. NAACP-

DE’s mission is to ensure the political, educational, social, and economic equality of rights

of all persons and to eliminate race-based discrimination. NAACP-DE is dedicated to

ensuring that all students in Delaware have an equal opportunity to obtain a high quality

public education. It has worked since 1915 to remove barriers to the participation of

minority students on a fully equal basis, and to ensure that all students receive the services

they need to succeed. The members of NAACP-DE and its branches include parents of

Disadvantaged Children who are enrolled in the public schools.

                                              9
       The plaintiffs’ complaint asserted three claims. In Counts I and II, the plaintiffs

asserted that the State of Delaware is violating Section 1 of Article X of the Delaware State

Constitution, which states that the “General Assembly shall provide for the establishment

and maintenance of a general and efficient system of free public schools[.]” In Count III,

the plaintiffs asserted that the counties are violating the Market Value Requirement.

       The plaintiffs’ complaint named Maxwell, Durham, and Jennings as defendants in

their official capacities. During the course of the case, Gregor replaced Maxwell as a

defendant. To reiterate, no one has accused them personally of engaging in any

wrongdoing. The plaintiffs’ real beef is with the counties’ decades-long policies of not

assessing properties in accordance with the Market Value Requirement. Because the

plaintiffs are really focused on the counties rather than the individuals, this decision does

not refer to the officials by name. It refers to the “County Defendants” and speaks in terms

of positions taken by the counties. For readers not steeped in Delaware county politics, this

also makes it easier to keep track of the players, particularly with the switch between

Maxwell and Gregory.

       The plaintiffs’ complaint also named as defendants Governor John Carney,

Secretary of Education Susan Bunting, and State Treasurer Kenneth Simpler. Once again,

the plaintiffs did not accuse them personally of any wrongdoing. They too were sued in

their official capacities.

       The complaint did not delineate which defendants were sued on which count. As I

read the complaint, the state officials are the relevant defendants for Counts I and II. The

county officials are the relevant defendants for Count III.

                                             10
                            II.       LEGAL ANALYSIS

       This decision addresses Count III of the complaint. The County Defendants contend

that Count III should be dismissed because this court lacks subject matter jurisdiction. They

also argue in one form or another that their financial officers are not proper defendants.

Only Kent County argues that the complaint does not state a claim on which relief can be

granted. None of the arguments are persuasive.22

A.     Rule 12(b)(1): Subject Matter Jurisdiction

       The County Defendants have moved to dismiss this action pursuant to Court of

Chancery Rule 12(b)(1) for lack of subject matter jurisdiction. All argue that the plaintiffs

have an adequate remedy at law in the form of a petition for writ of mandamus from the

Delaware Superior Court. New Castle County and Sussex County argue that the plaintiffs

also have an adequate remedy at law in the form of a declaratory judgment action in

Delaware Superior Court. Sussex County goes further by arguing that the plaintiffs are

seeking an improper advisory opinion.

       “The Delaware Court of Chancery is a court of equity. It has only that limited

jurisdiction that the Court of Chancery in England possessed at the time of the American

       22
         As noted, the complaint did not spell out clearly which defendants were named in
connection with each count, so Kent County and Sussex County addressed Counts I and II
as well. Both counties invoked the separation of powers, and Sussex County mentioned
exhaustion of administrative remedies. Because this decision only addresses Count III, it
does not reach those arguments. Regardless, the County Defendants are not proper
defendants for purposes of Counts I and II, so those issues are moot for purposes of the
County Defendants.

                                             11
Revolution, or such jurisdiction as has been conferred upon it by the Delaware General

Assembly.”23 The Court of Chancery can exercise subject matter jurisdiction only when a

case falls into one of three buckets.24 First, jurisdiction exists if a plaintiff states an

equitable claim.25 Second, jurisdiction exists if a plaintiff requests equitable relief and there

is no adequate remedy at law.26 Third, jurisdiction exists by statute.27 Additionally, the

clean-up doctrine provides that if this court would have equitable jurisdiction over a part

of a controversy, then it can address the remaining portions of the controversy as well.28

         “Equitable jurisdiction must be determined from the face of the complaint as of the

time of filing, with all material factual allegations viewed as true.”29 “In deciding whether

or not equitable jurisdiction exists, the Court must . . . focus upon the allegations of the

complaint in light of what the plaintiff really seeks to gain by bringing his or her claim.”30

         23
              El Paso Natural Gas Co. v. TransAm. Natural Gas Corp., 669 A.2d 36, 39 (Del.
1995).
         24
         See generally Candlewood Timber Gp., LLC v. Pan Am. Energy, LLC, 859 A.2d
989, 997 (Del. 2004).
         25
              See 10 Del. C. § 341.
         26
              See 10 Del. C. §§ 341, 342.
         27
              See, e.g., 8 Del. C. § 111; 6 Del. C. §§ 17-111, 18-111.
         28
        See generally Getty Ref. & Mktg. Co. v. Park Oil, Inc., 385 A.2d 147, 149 (Del.
Ch. 1978).
         29
              Int’l Bus. Mach. Corp. v. Comdisco, Inc., 602 A.2d 74, 78 (Del. Ch. 1991).
         30
              Candlewood, 859 A.2d at 997.

                                                 12
“Chancery jurisdiction is not conferred by the incantation of magic words. . . . If a realistic

evaluation leads to the conclusion that an adequate remedy is available this court . . . will

not accept jurisdiction over the matter.”31 That said,

       the mere fact that a litigant may have a remedy at law does not divest
       Chancery of its jurisdiction. The basic jurisdictional fact upon which equity
       operates is the absence of an [a]dequate remedy in the law courts. The
       question is whether the remedy available at law will afford the plaintiff full,
       fair and complete relief.32

“A remedy at law must be as practical to the ends of justice and to its prompt administration

as the remedy in equity.”33 “The Court of Chancery, therefore, may exercise jurisdiction

over an action in which an injunction is sought to prevent a threatened injury where the

remedy at law, if there should be one, would undoubtedly be less complete and less

effective than in a court of equity.”34

       31
         McMahon v. New Castle Assocs., 532 A.2d 601, 603 (Del. Ch. 1987) (Allen, C);
accord Comdisco, 602 A.2d at 78 (“[A] judge in equity will take a practical view of the
complaint, and will not permit a suit to be brought in Chancery where a complete legal
remedy otherwise exists but where the plaintiff has prayed for some type of traditional
equitable relief as a kind of formulaic ‘open sesame’ to the Court of Chancery.”); Cochran
v. F.H. Smith Co., 174 A.119, 121 (Del. Ch. 1934) (Wolcott, C.) (“It appears sometimes to
be thought that if fraud be present in any situation the open sesame has been found upon
the pronouncing of which the doors of equity are flung wide apart. That is a
misconception.”).
       32
         Hughes Tool Co. v. Fawcett Publ’ns, Inc., 315 A.2d 577, 579 (Del. 1974) (internal
quotation marks and citations omitted).
       33
            El Paso, 669 A.2d at 39.
       34
            Id. at 39–40 (internal quotation marks omitted).

                                              13
              1.     Mandamus

       The County Defendants uniformly interpreted the plaintiffs’ complaint as asking for

an order compelling the counties to conduct a general assessment. That was a clever move,

because it enabled them to argue that this court lacks jurisdiction because the plaintiffs

allegedly have an adequate remedy at law in the form of a petition for mandamus in the

Delaware Superior Court.

       “A writ of mandamus may be issued by the Superior Court to command a lower

court, agency, or public official to perform a duty ‘to which the petitioner has established

a clear legal right.’”35 “For the performance of a duty to be clearly owed to a petitioner, it

must be nondiscretionary or ministerial, meaning that it is ‘prescribed with such precision

and certainty that nothing is left to discretion or judgment.’”36

       A writ of mandamus would not be available in this case. As the County Defendants

elsewhere recognize, the Delaware Code does not require that counties conduct general

assessments on any regular schedule. If the Delaware Code required that a county conduct

a general assessment every year, or on a specific schedule, then a petition for mandamus

might be viable. But the General Assembly did not prescribe a specific schedule for

conducting general assessments. It chose instead to leave the matter to the judgment of the

       35
         Brittingham v. Town of Georgetown, 113 A.3d 519, 524 (Del. 2015) (quoting
Clough v. State, 686 A.2d 158, 159 (Del. 1996)).
       36
        Id. (quoting Guy v. Greenhouse, 687 A.2d 827, 1993 WL 557938, at *1 (Del. Dec.
30, 1993) (TABLE)).

                                             14
leaders of each county with the expectation that they would take the steps necessary to

comply with the Market Value Requirement. A writ of mandamus directing the counties to

conduct general assessments could not issue.

       Rather than seeking an order enforcing a nondiscretionary requirement, the

plaintiffs have made a classic appeal to the powers of equity. They argue that so much time

has passed since the last assessments that the current system no longer complies with the

Market Value Requirement. Based on that situation, they seek equitable relief to remedy

the statutory violation. It is conceivable in the abstract that one form of relief could be an

order requiring a general assessment. Because the statute does not specifically command

when general assessments are to take place, only this court could grant that relief.37 If

requested, however, that relief would need to be sought from defendants with the power to

conduct a general assessment.38

       In this case, however, the plaintiffs are not seeking an order compelling a general

assessment. Notwithstanding the uniform interpretation adopted by the County

Defendants, the complaint does not make that request. What the plaintiffs ask for is an

equitable remedy that will restore compliance with the Market Value Requirement. What

       37
          See Webb v. Diamond State Tel. Co., 237 A.2d 143, 146 (Del. Ch. 1967) (holding
that mandamus was “not an appropriate or adequate remedy” but that plaintiff could be
entitled to an affirmative injunction “if the relevant facts are resolved in his favor”).
       38
         See Young v. Red Clay Consol. Sch. Dist., 2015 WL 5853762, at *8–13 (Del. Ch.
Oct. 2, 2015) (dismissing claim against Board of Elections that sought to compel board to
exercise authority that it did not possess).

                                             15
form that remedy takes will be determined after trial, based on the evidence, taking into

account the equities, and after hearing from all parties. To state the obvious, the court will

only reach that issue if the plaintiffs prevail.

       The plaintiffs have argued that the most fitting remedy would be an injunction

barring the County Defendants from collecting taxes until the counties have complied with

the Market Value Requirement. Relief along these lines would take the form of a

prohibitive injunction. A writ of mandamus cannot provide prohibitive relief.39

       The argument that the plaintiffs should seek a writ of mandamus therefore does not

deprive this court of jurisdiction. The plaintiffs could not obtain a writ of mandamus

because of the lack of a non-discretionary statutory requirement, and the remedies that

could be awarded if the plaintiffs prevail encompass prohibitive relief that a writ of

mandamus cannot provide.

       39
          See State ex rel. Lyons v. McDowell, 57 A.2d 94, 98 (Del. 1947) (“The petition
[for writ of mandamus] seeks to restrain or prevent the respondents from doing something.
Many authorities hold, and we agree with their position, that the remedy by mandamus
should not be used to prevent the commission of an Act.”); Moore v. Stango, 1992 WL
114062, at *4 (Del. Super. May 8, 1992) (“The writ [of mandamus] is not for restraining
or preventing action.”); see also Lynch v. Tunnell, 236 A.2d 369, 373 (Del. 1967) (rejecting
contention that mandamus provided proper remedy where plaintiffs contended that
government agency lacked authority to act as it was doing; holding that Court of Chancery
had jurisdiction based on request for injunctive relief); Williamson v. Taylor, 1998 WL
1180042, at *2 (Del. Ch. June 17, 1998) (distinguishing writ of mandamus from injunction
and holding that latter was proper remedy where plaintiffs sought to bar further contact
between parties); Scarborough v. Mayor & Council of Town of Cheswold, 303 A.2d 701,
704 (Del. Ch. 1973) (finding that injunction rather than mandamus was appropriate remedy
to address violation of zoning ordinance).

                                               16
                2.     The Declaratory Judgment Act

       As an alternative argument against jurisdiction, New Castle County and Sussex

County cite the Declaratory Judgment Act. They argue that the plaintiffs should sue in

Superior Court to obtain a declaratory judgment that the counties are violating the Market

Value Requirement. New Castle County argues that a lawsuit in Superior Court would

provide an adequate remedy, divesting this court of jurisdiction, because the counties

would adhere to the result. Sussex County makes a slightly different argument. After

observing correctly that the Declaratory Judgment Act does not provide an independent

basis for jurisdiction in this court,40 Sussex County concludes that this court lacks

jurisdiction over a declaratory judgment action.

       The County Defendants’ position rests on another misinterpretation of the

complaint. The plaintiffs are not seeking a declaratory judgment that would determine the

meaning of the Market Value Requirement. The Delaware Supreme Court already provided

that declaration over two decades ago when it interpreted the statutory requirement that

property value be assessed at its “true value in money” and stated that this concept was

“the same as its fair market value.”41

       Rather than seeking a declaratory judgment, the plaintiffs have asserted a statutory

violation. They contend that the County Defendants have violated the Market Value

       40
         Diebold Computer Leasing, Inc. v. Commercial Credit Corp., 267 A.2d 586, 591
(Del. 1970).
       41
            Teachers Ins., 669 A.2d at 102.

                                              17
Statute, as construed by the Delaware Supreme Court, by assessing taxes based on

valuations from 1987, 1983, and 1974. They want a remedy for that ongoing violation. One

available remedy for an ongoing violation is an injunction directing the violator to stop

committing the violation.

       Assuming for the sake of argument that I nevertheless viewed the Count III through

the lens of the Declaratory Judgment Act, this court still would have jurisdiction. The

Declaratory Judgment Act did not change this court’s jurisdiction.

       Jurisdiction under the Declaratory Judgment Act is based on the question of
       whether law or equity traditionally would have jurisdiction of the subject
       matter if the controversy should develop to a later stage; of whether the issues
       raised would be presented in a legal or equitable action if coercive relief were
       being sought. Specifically, the Chancery Court has jurisdiction in a
       declaratory judgment action if there is any underlying basis for equity
       jurisdiction measured by traditional standards.42

In this case, equitable jurisdiction exists because of the need for equitable relief.

       As noted, New Castle County argues that equitable relief is unnecessary because the

court can presume that “the County will respect any decision rendered by any competent

court of this State.”43 That is generally true, but in this situation the facts support a

reasonable inference that the counties have been ignoring the Market Value Requirement

for decades, even after the Delaware Supreme Court interpreted the statutory language.

Coercive relief may well be necessary.

       42
            Diebold, 267 A.2d at 591.
       43
         Christiana Town Ctr. LLC v. New Castle Cty., 2003 WL 21314499, at *4 (Del.
Ch. June 6, 2003).

                                              18
       The role of equity is necessary for another reason as well. A declaratory judgment

that required immediate compliance could create a proverbial train wreck. An equitable

decree can be tailored to the facts of the case. It can thus take into account proposals that

the counties may make to solve the statutory problem (assuming the plaintiffs prove their

case) and the time frame for implementation. This court also can adapt its decree to

accommodate changed conditions. 44 Through the exercise of its equitable jurisdiction, this

court will be in a position to consider the facts and circumstances, balance the equities, and

award carefully crafted relief.

              3.     The Advisory Opinion Argument

       Sussex County adds a third argument against jurisdiction, claiming that the plaintiffs

are seeking an advisory opinion on a hypothetical question. Although this argument seems

primarily directed at Counts I and II, which are not at issue in this opinion, the county

explicitly references Count III as well. As to Count III, the argument is not well taken.

       The plaintiffs have alleged the existence of a concrete situation: the decades-long

practice of assessing taxes based on property valuations from 1987, 1983, and 1974. Those

facts are not hypothetical or fluid; they are established and fixed. The plaintiffs allege that

these assessments violate the Market Value Requirement, which is a statutory requirement

       44
         See United States v. Swift & Co., 286 U.S. 106, 114 (1932) (Cardozo, J.) (“A
continuing decree of injunction directed to events to come is subject always to adaptation
as events may shape the need.”); see, e.g., High River Ltd. P’ship v. Forest Labs., Inc.,
2013 WL 492555, at *6–7 (Del. Ch. Feb. 5, 2013) (discussing the court’s power to modify
prospective final judgments under Court of Chancery Rule 60(b)(5)).

                                              19
that has been interpreted by the Delaware Supreme Court. If they prove their case, the

plaintiffs seek an equitable remedy.

       By addressing this situation, the court would not be issuing an advisory opinion.

Determining whether the counties are violating a clear statutory command to assess

property based on its “true value in money” is no different than determining whether a

driver has violated the speed limit. This is a core function of the judicial branch.

B.     The County Officials As Appropriate Defendants

       The County Defendants argue that their officials are not proper defendants to answer

for Count III because, assuming the counties are violating the Market Value Requirement,

the officials by themselves cannot do anything about it. As everyone agrees, the officials

themselves lack the power to raise taxes unilaterally or to order a general assessment. This

argument reprises the County Defendants’ interpretation of the complaint as only seeking

an order compelling the counties to conduct a general assessment. To reiterate, the

plaintiffs have not pinned themselves to that remedy, and they have indicated that the

primary remedy they will seek is a negative injunction to restrain the ability of the county

officials to collect taxes.

       The county officials are the correct defendants (in their official capacities) for

purposes of this type of relief.45 The plaintiffs seek to stop the county governments from

       45
          Cf. Edelman v. Jordan, 415 U.S. 651, 664–65 (1974) (explaining that a plaintiff
may pursue a lawsuit seeking prospective injunctive relief against a government official in
their official capacity); Ex parte Young, 209 U.S. 123, 159–60 (1908) (recognizing lawsuit

                                             20
collecting taxes in a manner that violates statutory law as interpreted by the Delaware

Supreme Court. To achieve that end, the law permits a plaintiff to sue the officials

responsible for carrying out that decision in their official capacity.46 If the plaintiffs prevail,

then the officials can be enjoined, stopping the statutory violation that the plaintiffs have

challenged.

C.     Rule 12(b)(6): Failure To State A Claim On Which Relief Can Be Granted

       According to Kent County, Count III fails to state a claim on which relief can be

granted. When considering such a motion, the court (i) accepts as true all well-pleaded

factual allegations in the complaint, (ii) credits vague allegations if they give the opposing

party notice of the claim, and (iii) draws all reasonable inferences in favor of the plaintiff.47

When applying this standard, “dismissal is inappropriate unless the plaintiff would not be

entitled to recover under any reasonably conceivable set of circumstances susceptible of

proof.”48

seeking prospective injunctive relief against official acting under state statute as proper
vehicle for challenging statue).
       46
          See, e.g., Carper v. Stiftel, 384 A.2d 2 (Del. 1977) (entertaining action for
declaratory judgment and injunctive relief brought by members of the Superior Court
against certain state officials sued in their official capacities).
       47
            Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002).
       48
            Id. (internal quotation marks omitted).

                                                21
       Kent County argues that it has no duty to assess property in accordance with the

Market Value Requirement. That is a bold claim. Taken literally, it means that a century

from now, Kent County could still be basing assessments on property values from 1983.

       Kent County correctly observes that “there is no statute that specifies how

frequently a general assessment of real property must be done.”49 Kent County also

correctly observes that under prior versions of the Delaware Code, the statutory scheme

did mandate periodic general assessments. Before 1869, general assessments were required

every eight years. In 1869, the General Assembly changed the requirement and mandated

general assessment every four years.50 In 1898, the General Assembly passed legislation

stating that “a general assessment of real property [in Kent County] shall stand and be acted

upon for four years and shall be made so as to be returned on the said first Tuesday in

February, A. D. 1899 and every fourth year thereafter.”51 In 1920, the General Assembly

required Kent County to perform a general assessment “so as to be acted upon for the year

1921.”52 In 1933, the General Assembly required that Kent County conduct a general

assessment “for the year 1934” and that “a like general assessment shall be made every

       49
            Dkt. 14 at 5.
       50
            13 Del. Laws ch. 394, § 1 (1869).
       51
            21 Del. Laws ch. 29, § 1 (1898).
       52
            31 Del. Laws ch. 14, § 18 (1920).

                                                22
four years thereafter.”53 In 1943, the General Assembly again addressed general

assessments in Kent County by providing as follows:

       A general assessment of persons and real estate and houses and other
       buildings owned by tenants or occupiers on lands owned by others in Kent
       County shall be made by the Board of Assessment for the year 1934 and a
       like general assessment shall be made every four years thereafter. This
       General Assessment, when so made, shall stand and be acted on for four
       years, unless one of the annual assessments herein provided for shall add to
       said assessment or change or alter certain items of same, in which case the
       revision or alteration shall stand and be acted on in place of the item
       appearing on said General Assessment.54

That provision survived until 1959, when the General Assembly repealed it, leaving only

the general requirement that property be assessed at its “true value in money.” 55

       Kent County infers from this history that it no longer has any obligation to conduct

general assessments. That conclusion does not follow. The statutory change instead

eliminated any requirement that Kent County (or any of the counties) conduct assessments

on a strict, prescribed schedule. The General Assembly retained the Market Value

Requirement. The General Assembly thus entrusted local county officials with the

discretion to determine how often it would be necessary to conduct a general assessment

so as to comply with the Market Value Requirement. In my view, that makes a great deal

of sense. Property values may change faster during some periods than at others. As with

any bright-line rule, a strict temporal schedule might require either too many assessments

       53
            38 Del. Laws ch. 74, § 18 (1933).
       54
            44 Del. Laws ch. 91, § 45 (1943).
       55
            9 Del. C. § 8306(a).

                                                23
or too few. The General Assembly understandably felt that county officials would be in a

position to judge these matters, determine when property values should be updated, and

take steps to ensure that the Market Value Requirement is met.

       Without a schedule for mandated assessments, the Market Value Requirement

becomes the polestar. The counties in Delaware can follow the practices and procedures

that they believe are warranted, as long as they comply the Market Value Requirement.

       In 1977, the Delaware Supreme Court recognized that at some point, assessed values

could become so stale as to be statutorily infirm.56 The plaintiffs contend that “an

unreasonable period of time” has now passed since the last general assessments such that

the current approach is statutorily infirm.57 In 1992, the Delaware Court of Chancery

declined to consider a similar claim that the assessed values in New Castle County had

become stale, but they were then only nine years old.58 The assessed values are now thirty-

one, thirty-five, and forty-four years old.

       It is reasonably conceivable that using assessments from 1987, 1983, and 1974

violates the Market Value Requirement. Determining whether or not that is true will require

an evidentiary record that addresses changes in value since these years. It likely will require

       56
         See Bd. of Assessment Review for New Castle Cty. v. Stewart, 378 A.2d 113, 116
(Del. 1977) (observing that no one had argued that “an unreasonable period of time has
passed since the last general assessment was made in 1970”).
       57
            See Stewart, 378 A.2d at 116.
       58
            Cronin v. Greenhouse, 1992 WL 403111, at *2 (Del. Ch. Dec. 26, 1992).

                                              24
expert testimony to address not only aggregate levels of appreciation countywide, but also

relative levels of appreciation between different school districts. For present purposes, the

allegations of the complaint are sufficient to state a claim.

D.     Standing

       During oral argument, on reply, New Castle County argued for the first time that

the plaintiffs lacked standing to pursue Count III. The parties did not brief this issue, and

the court does not have an adequate basis to address it. Ordinarily, raising a new argument

so tardily would result in waiver, but to the extent the argument would affect this court’s

subject matter jurisdiction, it would not be waivable. Should the County Defendants choose

to renew their arguments on standing, they shall address the issue of waiver.

                               III.       CONCLUSION

       The General Assembly enacted the Market Value Requirement. Count III of the

complaint states a claim that the counties are not complying with the law. This court

possesses jurisdiction over that claim and, if it is proven, can provide an equitable remedy.

The defendants’ motions to dismiss Count III are denied.

                                              25