AMERICAN AIRLINES INC v. 17

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Court of Appeal, First District, Division 1, California.

AMERICAN AIRLINES, INC. et al., Plaintiffs and Appellants, v. SAN MATEO COUNTY, Defendant and Respondent. [And 17 other cases.] 1

No. A059478.

Decided: November 30, 1994

Peter W. Davis, Jay R. Martin, John E. Carne, Kathy M. Banke, Kimberly S. Stanley, Crosby, Heafey, Roach & May, A Professional Corporation, Oakland, for appellants/plaintiffs. Thomas F. Casey, III, County Counsel, Mary K. Raftery, Deputy County Counsel, Redwood City, DeWitt W. Clinton, County Counsel, Albert Ramseyer, Deputy County Counsel, Los Angeles, Kelvin H. Booty, County Counsel, James May, Asst. County Counsel, Oakland, L.B. Elam, County Counsel, John Seyman and Steve Kaiser, Deputy County Counsels, Sacramento, for respondents/defendants.

Plaintiffs, a group of 10 commercial airlines (the Airlines), appeal from the trial court's judgment in favor of defendants, a group of 18 California counties (the Counties).2  The Airlines seek a partial refund of ad valorem property taxes, alleging that the Counties collected the taxes in violation of the Airport and Airway Improvement Act of 1982, the pertinent portions of which were formerly codified at 49 United States Code Appendix section 1513(d) (section 1513(d) or the AAIA).3  (See post, fn. 5.)   The trial court granted summary judgment in favor of the Counties, ruling that the Airlines lack a private right of action under the AAIA and that the Airlines cannot, as a matter of law, state a cause of action under the statute.   Although we disagree with the trial court's conclusion that the Airlines lack a private right of action, we hold that the Airlines have not stated a cause of action.   Accordingly, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

This coordinated action began with the filing of 18 separate refund actions in each of the counties named as a defendant.   The trial court subsequently granted the Airlines' petitions to coordinate the 18 actions in San Mateo County Superior Court.   The Airlines' second amended complaint against Los Angeles County is representative of their refund causes of action.   It alleges, in pertinent part, as follows:

“This action is brought pursuant to the applicable provisions of the California Revenue and Taxation Code and other related provisions of state and federal law to obtain refunds of taxes which were paid by [the Airlines] to [Los Angeles County] and which were illegally and erroneously collected from [the Airlines] in violation of 49 U.S.C. Section 1513 for the 1985, 1986, 1987, 1988 and 1989 tax years.

“Pursuant to California law and practice, all commercial and industrial property, other than air carrier transportation property, is assessed at amounts substantially below true market value of that property.

“All of [the Airlines'] property used in interstate air transportation in the County of Los Angeles is assessed each year at amounts equal to or in excess of the true market value of said property.[4 ]  Plaintiffs are taxed based on these assessments, and have paid taxes pursuant to said assessments.

“This disparity in tax treatment causes [the Airlines'] property to be assessed at a value bearing a higher ratio to its true market value than the ratio that the assessed value of other commercial and industrial property in the county has to its true market value in violation of 49 U.S.C. Section 1513.[5 ]

“This discrimination is not less than forty-seven percent (47%) of the ad valorem property taxes paid to this county for the 1985 [through 1989] tax year[s].

“[The Airlines] are therefore entitled to a refund of at least forty-seven percent (47%) of the ad valorem property taxes paid to this county for the 1985 [through 1989] tax year[s].”

On May 8, 1992, the Counties filed a motion for summary judgment on the Airlines' second amended complaints.   The Counties' notice of motion states that the motion was being made “on the grounds that there is no triable issue of material fact as to [the Counties] because [the Airlines] have failed to state a cause of action under 49 U.S.C. section 1513(d).”   The Counties argued that “[t]he appropriate analysis is to examine whether the existing structure of property tax laws discriminate against air carriers.   If the structure is neutral, [which the Counties asserted that it was,] then the air carriers must be presumed to be fairly treated.”   The Counties also argued that the Airlines lack a private right of action under the AAIA.6

On September 2, 1992, the trial court granted the Counties' motion for summary judgment on the following grounds:  “1. Based on the current assessment and taxing systems of airline property in California, the [Airlines] cannot, as a matter of law, state a cause of action under 49 U.S.C. Section [1513].  [¶] 2. The [Airlines] must show a primafacie [sic] case of discrimination which they have not, and cannot do factually.  [¶] 3. There is no private right of action under 49 U.S.C. Section 1513(d).”   The trial court then entered judgment in favor of the Counties.   The Airlines have filed a timely notice of appeal.

II. DISCUSSION

A. The Airlines Can Assert Their Rights Under The AAIA Via State Tax Refund Causes of Action.

 The Airlines contend that they enjoy a private right of action “directly under” the AAIA and, hence, that the trial court's ruling that they lack a private right of action is erroneous.   The Counties, on the other hand, assert that although the Airlines have no private right of action directly under the AAIA, they can assert their rights under the AAIA via state tax refund causes of action.7  Our review of the AAIA and its legislative history convinces us that the Counties' interpretation of the statute is correct.

The anti-discrimination provisions of the AAIA were patterned on similar provisions in the Railroad Revitalization and Regulatory Reform Act of 1976, codified at 49 United States Code section 11503 (the 4–R Act), and in the Motor Carrier Act of 1980, codified at 49 United States Code section 11503a (the Motor Carrier Act).  (Western Air Lines v. Board of Equalization (1987) 480 U.S. 123, 131, 107 S.Ct. 1038, 1042, 94 L.Ed.2d 112.)   The legislative history of the AAIA is sparse, stating only that “[t]his section provides that States may not tax at a level which unreasonably burdens or discriminates against interstate commerce.   The provision makes current law which prohibits the assessment, levying or collecting of taxes on motor carrier property in a manner different from that of other commercial and industrial property, applicable to air carriers.”  (Sen.Rep. No. 97–494, 2d Sess., p. 37 (1982), reprinted in 1982 U.S.Code Cong. & Admin.News, at pp. 781, 1188;  H.R.Rep. No. 97–760, 2d Sess., p. 722 (1982), reprinted in 1982 U.S.Code Cong. & Admin.News, at p. 1484.)

Although the AAIA is generally patterned on the 4–R Act and the Motor Carrier Act, there are some significant differences in the statutes, which bear on the issues at hand.   The Airlines acknowledge that when Congress passed the AAIA, it declined to create an exception to the Tax Injunction Act, 28 United States Code section 1341,8 as it had previously done in both the 4–R Act and the Motor Carrier Act.9  In light of Congress' failure to create an exception to the Tax Injunction Act, the policies underlying the Act remain in place.   The United States Supreme Court has described these policies as follows:  “If federal injunctive relief were available, [¶] ‘state tax administration might be thrown into disarray, and taxpayers might escape the ordinary procedural requirements imposed by state law.   During the pendency of the federal suit the collection of revenue under the challenged law might be obstructed, with consequent damage to the State's budget, and perhaps a shift to the State of the risk of taxpayer insolvency.   Moreover, federal constitutional issues are likely to turn on questions of state tax law, which, like issues of state regulatory law, are more properly heard in the state courts.’  [Citation.]”  (Rosewell v. LaSalle National Bank (1981) 450 U.S. 503, 527, 101 S.Ct. 1221, 1236, 67 L.Ed.2d 464, emphasis added.)   The phrase “plain, speedy and efficient remedy” in the Tax Injunction Act (see ante, fn. 8) “refer[s] to the obvious precept that plaintiffs seeking protection of federal rights in federal courts should be remitted to their state remedies if their federal rights will not thereby be lost.”  (Fair Assessment in Real Estate Assn. v. McNary (1981) 454 U.S. 100, 116, fn. 8, 102 S.Ct. 177, 186, fn. 8, 70 L.Ed.2d 271, emphasis added.)

 The policies underlying the Tax Injunction Act dictate that if the Airlines have a “plain, speedy and efficient remedy” under California law, they must assert their rights under the AAIA via this state remedy.   The Airlines concede that they “have a remedy for violations of § 1513(d) under California Rev. and Tax Code §§ 5096 and 5140, which provide that taxpayers may obtain refunds of taxes that were ‘erroneously or illegally collected’ or ‘illegally assessed or levied.’ ”  (See generally 2 Ehrman & Flavin, Taxing Cal. Property (3d ed. 1989) Judicial Review of Assessments, ch. 30, § 30:02, pp. 8–12.)   The Airlines do not dispute that California's tax refund procedure is a “plain, speedy and efficient remedy.”   (See Kelly v. Springett (9th Cir.1975) 527 F.2d 1090, 1094;  Mandel v. Hutchinson (9th Cir.1974) 494 F.2d 364, 366–367.)

 Having concluded that the Airlines must assert their rights under the AAIA via state tax refund causes of action, the only remaining issue is whether the Airlines have adequately pleaded such causes of action.10  (See Saldana v. Globe–Weis Systems Co. (1991) 233 Cal.App.3d 1505, 1513, 285 Cal.Rptr. 385 [in reviewing the propriety of a summary judgment, we look to the issues as framed by the pleadings];  Zuckerman v. Pacific Savings Bank (1986) 187 Cal.App.3d 1394, 1400, 232 Cal.Rptr. 458 [same].)   The Airlines' second amended complaints clearly plead state tax refund causes of action, alleging “[t]his action is brought pursuant to the applicable provisions of the California Revenue and Taxation Code and other related provisions of state and federal law to obtain refunds of taxes which were paid by [the Airlines] to [the Counties] and which were illegally and erroneously collected from [the Airlines] in violation of 49 U.S.C. Section 1513 for the 1985, 1986, 1987, 1988 and 1989 tax years.”  (See, e.g., ante, p. 170, emphasis added.)   Therefore, we hold that the trial court erred when it granted summary judgment on the ground that the Airlines lack a private right of action under the AAIA.   The Airlines properly asserted their rights under the AAIA via state tax refund causes of action.11

B. The Airlines Have Not Stated A Cause Of Action For Assessment Ratio Discrimination.

The Airlines admit that they are challenging only their personal property assessments and that under California law airline personal property is taxed in the same manner as other locally assessed taxable personal property—that is, at 100 percent of its fair market value.  (See Rev. & Tax.Code, §§ 401, 5391;  see also 1 Ehrman & Flavin, Taxing Cal. Property (3d ed. 1989) Assessment Ratios and Tax Rates, ch. 9, § 9:06, pp. 6–7.) 12  Despite the facial neutrality of California's taxation system for locally assessed personal property, the Airlines advance two arguments why they nevertheless have a viable discrimination cause of action:  (1) “[T]he comparison ratio—that is, the ratio of the assessed value of all other commercial and industrial property to its market value—must include the 15 percent of taxable business personal property that ․ is underassessed or goes unassessed entirely.”  (2) Railroad personal property, which as a result of relief granted under the 4–R Act is taxed at below its market value, “must be included in the assessment ratio comparison here.” 13  We address each of these arguments in turn.

1. The Trial Court Properly Excluded Escaped Personal Property From The Comparison Class.

 Relying primarily on case law under the 4–R Act and the Motor Carrier Act, the Airlines argue that “by showing that 15 percent of taxable commercial and industrial personal property is underassessed or unassessed altogether, resulting in an assessment ratio for such property of no more than 85 percent, the airlines made an ample showing of assessment ratio discrimination.” 14  This argument presupposes that the Airlines are “entitled to conduct a sales assessment ratio study or other objective analysis and to show that irrespective of statutory assurances, there is a disparity in the assessment ratios for [their] property and other taxable commercial and industrial property.” 15  In support of their assertion that they have a right to conduct sales assessment ratio studies, the Airlines point to “Congress' express approval of the ‘sales-assessment ratio study’ method in the 4R Act [and the Motor Carrier Act] to determine the existence and extent of assessment ratio discrimination,” noting “it is widely recognized that a sales-assessment ratio study sweeps in property that is underassessed or may have escaped assessment altogether.”

Again, the Airlines fail to appreciate a key difference in the plain language of the 4–R Act and the Motor Carrier Act, on the one hand, and the AAIA, on the other hand.   While Congress approved the use of sales assessment ratio studies in subsection (c) of the 4–R Act and the Motor Carrier Act (see 49 U.S.C. §§ 11503(c), 11503a(c), ante, fn. 9), this subsection was omitted from the AAIA.   This omission is significant.

It was on the basis of subsection (c) of the 4–R Act, 49 United States Code section 11503(c), that the United States Supreme Court concluded that it was necessary to look behind the facial neutrality of a state taxing system under the 4–R Act.   In Burlington No. R. Co. v. Okla. Tax Comm'n (1987) 481 U.S. 454, 461–462, 107 S.Ct. 1855, 1859–1860, 95 L.Ed.2d 404, the Supreme Court rejected a state's contention that “the first occurrence of the phrase ‘true market value’ in § 11503(b)(1) [the corresponding 4–R Act provision to section 1513(d)(1)(A) (see ante, fn. 5) ] should be read as ‘state determined market value.’ ”   The court noted that “[t]he obstacle to this position is the language of § 11503(c), which states that ‘[t]he burden of proof in determining assessed value and true market value is governed by State law.’   It would be inconsistent to allocate the burden of proof as to an issue which could not be litigated in federal court in the first place.”   (Burlington, supra, 481 U.S. at p. 462, 107 S.Ct. at p. 1860.)

Likewise, subsection (c) of the 4–R Act, 49 United States Code section 11503(c), was one of the bases on which the United States Supreme Court concluded that the 4–R Act did not prohibit states from granting exemptions from generally applicable ad valorem property taxes.   The Supreme Court noted, “[i]n drafting § 11503, Congress prohibited discriminatory tax rates and assessment ratios in no uncertain terms, see 49 U.S.C. §§ 11503(b)(1)–(3), and set forth precise standards for judicial scrutiny of challenged rate and assessment practices.   See §§ 11503(c)(1)–(2).   By contrast, the statute does not speak with any degree of particularity to the question of tax exemptions.   Subsection (b)(4), which prohibits the States from ‘impos[ing] another tax that discriminates against a rail carrier,’ is, at best, vague on the point.   Congress did not state whether exemptions are a form of forbidden discrimination against rail carriers, and further did not provide a standard for courts to distinguish valid from invalid exemption schemes.”  (Dept. of Revenue of Or. v. ACF Industries, supra, 510 U.S. at p. ––––, 114 S.Ct. at p. 850.)

Unlike the 4–R Act and the Motor Carrier Act, the AAIA contains no “general statement that assessed value and true market value are subjects for judicial inquiry, ․” (Burlington No. R. Co. v. Okla. Tax Comm'n, supra, 481 U.S. at p. 462, 107 S.Ct. at p. 1860.)   In even the most efficient state property tax systems, it is beyond peradventure that some property will escape taxation.   Congress recognized this inevitability in the 4–R Act and the Motor Carrier Act when it provided that federal courts could intervene “only if the ratio of assessed value to true market value of rail [or motor carrier] transportation property exceeds by at least 5 percent, the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction.”  (49 U.S.C. §§ 11503(c), 11503a(c), ante, fn. 9.)   We are confident that had Congress intended courts to consider escaped property in assessment ratio cases under the AAIA it “would have spoken with clarity and precision” and would have provided “precise standards for judicial scrutiny of challenged rate and assessment practices” (Dept. of Revenue of Or. v. ACF Industries, supra, 510 U.S. at p. ––––, 114 S.Ct. at p. 850), as it did in both the 4–R Act and Motor Carrier Act.

The Airlines' would have us insert the missing subsection into the AAIA.   This we cannot do.  (See Burlington No. R. Co. v. Okla. Tax Comm'n, supra, 481 U.S. at p. 463, 107 S.Ct. at p. 1861 [“Adoption of [the Airlines'] view would require amendment rather than construction of the statute, and it must be rejected here.”];   see also Dept. of Revenue of Or. v. ACF Industries, supra, 510 U.S. at pp. –––– – ––––, 114 S.Ct. at pp. 850–851 [“When determining the breadth of a federal statute that impinges upon or pre-empts the States' traditional powers, we are hesitant to extend the statute beyond its evident scope.  [Citations.]  We will interpret a statute to pre-empt the traditional state powers only if that result is ‘the clear and manifest purpose of Congress.’  [Citation.]”].) 16  Accordingly, we uphold the trial court's determination that the comparison class under the AAIA does not include escaped personal property.17

2. The Trial Court Properly Excluded Railroad Property From The Comparison Class.

 The Airlines argue that the comparison class for assessment ratio purposes must include railroad property, which they contend is valued at below its market value as a result of litigation under the 4–R Act.   Once again, the Airlines fail to appreciate a key difference in the plain language of the 4–R Act and the Motor Carrier Act, on the one hand, and the AAIA, on the other hand.   In both the 4–R Act and the Motor Carrier Act, Congress defined the comparison class for assessment ratio purposes as “other commercial and industrial property in the same assessment jurisdiction.”  (49 U.S.C. §§ 11503(b)(1), 11503a(b)(1).)   In the AAIA, however, Congress limited the comparison class to “other commercial and industrial property of the same type in the same assessment jurisdiction․”  (See ante, fn. 5, emphasis added.)

Under California law, taxable personal property, including the Airlines' personal property that is the subject of this tax refund action, is locally assessed by county assessors at 100 percent of its fair market value.   (See ante, pp. 173–174 and fn. 12.)   Railroad property, by contrast, is centrally assessed by the State Board of Equalization on a unitary basis.  (Cal. Const., art. XIII, § 19;  Rev. & Tax.Code, § 721 et seq.)   “[U]nit taxation is properly characterized not as the taxation of real property or personal property or even a combination of both, but rather as the taxation of property as a going concern․  [W]hat the Board assesses is the value of the public utility property as a going concern;  it considers the earnings of the property as a whole, and does not consider, less still assess, the value of any single real or personal asset.”  (ITT World Communications, Inc. v. City and County of San Francisco (1985) 37 Cal.3d 859, 864–865, 210 Cal.Rptr. 226, 693 P.2d 811, emphasis in original.)   Since unitarily assessed railroad property is not property “of the same type” as locally assessed personal property, it is not part of the comparison class under the plain language of the AAIA.18

III. DISPOSITION

The judgment is affirmed, with costs to the Counties.

APPENDIX

The 17 other cases in this coordinated action are:

American Airlines, Alaska Airlines, Inc., Northwest Airlines, Inc., U.S. Air, Inc., United Parcel Service, Federal Express, Delta Air Lines, Inc., Trans World Airlines, Inc., and United Airlines v. Alameda County (No. 654762–0);

Northwest Airlines, Inc., U.S. Air, Inc., United Airlines, and Delta Air Lines, Inc. v. Fresno County (No. 405128–0);

American Airlines v. Kern County (No. 207720);

Alaska Airlines, Inc., Continental Airlines, Inc., U.S. Air, Inc., United Airlines, American Airlines, Federal Express, Delta Air Lines, Inc., and Trans World Airlines, Inc. v. Los Angeles County (No. C–734348);

United Airlines v. Monterey County (No. M–21275);

Northwest Airlines, Inc., U.S. Air, Inc., American Airlines, and Federal Express v. Orange County (No. 599871);

American Airlines, Alaska Airlines, Inc., United Airlines, Delta Air Lines, Inc., and Trans World Airlines, Inc. v. Riverside County (No. 200416);

U.S. Air, Inc., United Airlines, American Airlines, Federal Express, and Delta Air Lines, Inc. v. Sacramento County (No. 509854);

Alaska Airlines, Inc., Continental Airlines, Inc., Northwest Airlines, Inc., U.S. Air, Inc., United Airlines, American Airlines, Federal Express, United Parcel Service, Trans World Airlines, Inc., and Delta Air Lines, Inc. v. San Bernardino County (No. 251227);

American Airlines, Continental Airlines, Inc., Northwest Airlines, Inc., U.S. Air, Inc., United Airlines, Federal Express, Delta Air Lines, Inc., and Trans World Airlines, Inc. v. San Diego County (No. 615217);

U.S. Air, Inc. v. San Joaquin County (No. 218484);

American Airlines and United Airlines v. Santa Barbara County (No. 178173);

American Airlines, Alaska Airlines, Inc., United Airlines, Delta Air Lines, Inc., Trans World Airlines, U.S. Air, Inc., and Continental Airlines v. Santa Clara County (No. 688727);

American Airlines, Inc. v. El Dorado County (No. 56660);

U.S. Air, Inc. v. Humboldt County (No. 90DR0291);

U.S. Air, Inc. v. Contra Costa County (No. C90–04852);  and

Federal Express v. Solano County (No. 110042).

FOOTNOTES

2.   The Airlines are Alaska Airlines, Inc., American Airlines, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., Federal Express Corp., Northwest Airlines, Inc., Trans World Airlines, Inc., United Airlines, Inc., United Parcel Service, and USAir, Inc.   The Counties are Alameda, Contra Costa, El Dorado, Fresno, Humboldt, Kern, Los Angeles, Monterey, Orange, Riverside, Sacramento, San Bernardino, San Diego, San Joaquin, San Mateo, Santa Barbara, Santa Clara, and Solano Counties.

3.   Section 1513(d) was recently recodified in substantially the same form at 49 United States Code section 40116(d).   Since the parties' briefs and the trial court's orders refer to section 1513(d)—the version of the statute in effect during the tax years at issue—we will continue to refer to that version of the statute.

4.   Although the second amended complaint alleges that the Airlines' property was “assessed each year at amounts equal to or in excess of the true market value of said property” (emphasis added), the Airlines conceded for the purposes of the subsequent summary judgment motion that their property was not assessed at more than 100 percent of its fair market value.

5.   Section 1513(d) provides, in pertinent part, as follows:“(1) The following acts unreasonably burden and discriminate against interstate commerce and a State, subdivision of a State, or authority acting for a State or subdivision of a State may not do any of them:“(A) assess air carrier transportation property at a value that has a higher ratio to the true market value of the air carrier transportation property than the ratio that the assessed value of other commercial and industrial property of the same type in the same assessment jurisdiction has to the true market value of the other commercial and industrial property;  [or]“(B) levy or collect a tax on an assessment that may not be made under subparagraph (A) of this paragraph ․“(3) This subsection shall not apply to any in lieu tax which is wholly utilized for airport and aeronautical purposes.”

6.   In addition, the Counties moved for summary adjudication of certain causes of action on the grounds that the Airlines failed to exhaust their state administrative remedies prior to filing their refund actions.   The trial court denied this motion on September 2, 1992.

7.   At first blush, the distinction between the Airlines' position and the Counties' position appears to be a distinction without substance.   On closer examination, though, the distinction may bear on the question of whether the Airlines were required to exhaust their state administrative remedies before filing suit.  (See ante, fn. 6.)   If, as the Airlines contend, they enjoy a federal private right of action directly under the AAIA, then the Airlines have a plausible, though not necessarily meritorious, argument that they were not required to exhaust their state administrative remedies before filing suit.  (Compare Burlington Northern v. Blackfeet Tribe (9th Cir.1991) 924 F.2d 899, 901, fn. 2 [suggesting that exhaustion is not required] to Middlemist v. Secretary of U.S. Dept. of Interior (D.Mont.1993) 824 F.Supp. 940, 944, affd. 19 F.3d 1318 (9th Cir.1994) [questioning the validity of Burlington Northern on the exhaustion issue].)   If, as the Counties assert, the Airlines must assert their federal anti-discrimination rights via state tax refund causes of action, then exhaustion of state administrative remedies is required unless an exception to the exhaustion requirement is established.  (See Bank of America v. Mundo (1951) 37 Cal.2d 1, 3–5, 229 P.2d 345;  Security–First Nat. Bk. v. County of L.A. (1950) 35 Cal.2d 319, 321, 217 P.2d 946;  see also C.H.B. Foods, Inc. v. County of Los Angeles (1987) 195 Cal.App.3d 821, 824–825, 241 Cal.Rptr. 18.)

8.   The Tax Injunction Act provides as follows:“The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.”  (28 U.S.C. § 1341.)

9.   The 4–R Act provides as follows:“(c) Notwithstanding section 1341 of title 28 and without regard to the amount in controversy or citizenship of the parties, a district court of the United States has jurisdiction, concurrent with other jurisdiction of courts of the United States and the States, to prevent a violation of [the anti-discrimination provisions] of this section.   Relief may be granted under this subsection only if the ratio of assessed value to true market value of rail transportation property exceeds by at least 5 percent, the ratio of assessed value to true market value of other commercial and industrial property in the same assessment jurisdiction.   The burden of proof in determining assessed value and true market value is governed by State law.   If the ratio of the assessed value of other commercial and industrial property in the assessment jurisdiction to the true market value of all other commercial and industrial property cannot be determined to the satisfaction of the district court through the random-sampling method known as a sales assessment ratio study (to be carried out under statistical principles applicable to such a study), the court shall find, as a violation of this section—“(1) an assessment of the rail transportation property at a value that has a higher ratio to the true market value of the rail transportation property than the assessed value of all other property subject to a property tax levy in the assessment jurisdiction has to the true market value of all other commercial and industrial property;  and“(2) the collection of an ad valorem property tax on the rail transportation property at a tax rate that exceeds the tax ratio rate applicable to taxable property in the taxing district.”  (49 U.S.C. § 11503(c).)The Motor Carrier Act contains a nearly identical subsection.  (See 49 U.S.C. § 11503a(c).)

10.   In their supplemental briefing, the Airlines contend, for the first time, that they can assert their rights under the AAIA via causes of action under 42 United States Code section 1983.   We agree with those courts that have held that a taxpayer cannot challenge the administration of state tax statutes under 42 United States Code section 1983 where the taxpayer has an adequate state remedy.  (See, e.g., L.L. Bean, Inc. v. Bracey (Tenn.1991) 817 S.W.2d 292, 294–297;  Vann v. DeKalb Cty. Bd. of Tax Assessors (Ga.Ct.App.1988) 186 Ga.App. 208, 367 S.E.2d 43, 47;  Linderkamp v. Bismarck School Dist. No. 1 (N.D.1986) 397 N.W.2d 76, 78–80;  Stufflebaum v. Panethiere (Mo.1985) 691 S.W.2d 271, 271–272;  Zizka v. Water Pollution Control Authority (1985) 195 Conn. 682, 490 A.2d 509, 513–514;  Johnston v. Gaston County (N.C.Ct.App.1984) 71 N.C.App. 707, 323 S.E.2d 381, 383–384.   Contra, Harlan Sprague v. Dept. of State Revenue (Ind.Tax 1991) 583 N.E.2d 214.)   In this case, since the Airlines have an adequate state remedy (see ante, pp. 172–173), they cannot maintain causes of action under 42 United States Code section 1983.

11.   Because we have held that the Airlines must assert their rights under the AAIA via state tax refund causes of action, exhaustion of state administrative remedies is required unless an exception to the exhaustion requirement is established.  (See ante, fn. 7.)   Since the trial court denied the Counties' motion for summary adjudication on the grounds that the Airlines had failed to exhaust their administrative remedies (see ante, fn. 6), the exhaustion issue is not properly before us.   Therefore, we express no opinion as to whether, as a factual matter, the Airlines exhausted their administrative remedies or whether, as a legal matter, any exceptions to the general exhaustion requirement apply.

12.   Revenue and Taxation Code section 401 provides as follows:“Every assessor shall assess all property subject to general property taxation at ․ its full value.”Revenue and Taxation Code section 5391 provides as follows:“For the 1980–81 fiscal year and each fiscal year thereafter, aircraft subject to this part shall be taxed at the same rate and in the same manner as all other personal property.   Aircraft which are considered business inventories, within the meaning of Section 129 of the Revenue and Taxation Code, shall be included in the inventory exemption.”

13.   In the trial court, the Airlines also argued that they had a viable discrimination cause of action because “[c]ertain key classifications of commercial and industrial personal property are exempt from property taxation altogether.”   The United States Supreme Court recently rejected this argument in construing analogous provisions of the 4–R Act (see Dept. of Revenue of Or. v. ACF Industries (1994) 510 U.S. 332, ––––, 114 S.Ct. 843, 849, 127 L.Ed.2d 165), and, accordingly, the Airlines have abandoned it on appeal.

14.   The Airlines refer to this underassessed and unassessed property as “escaped” property.   Escaped property includes property that other taxpayers intentionally conceal from taxing authorities.   As the Counties noted in the trial court, “[t]he logic of such an approach would be analogous to the defective reasoning of a cheating taxpayer who claims that he's entitled because ‘everyone else is doing it.’ ”   In the absence of a clear congressional mandate (see post, p. 175 and fn. 16), we decline to adopt such an approach.

15.   “The sales assessment ratio study is a statistical study used to measure the average ratio of market value to assessed value of locally-assessed property within a tax jurisdiction.   The method of the study is randomly to select recently sold properties and to compare the sales prices with the assessed values.   This composite of randomly-selected properties can provide, within a margin of error, the average ratio of market value to assessed value of property in the jurisdiction.  [Citation.]”  (Atchison, Topeka & Santa Fe Ry. v. State of Ariz. (D.Ariz.1983) 559 F.Supp. 1237, 1241, fn. 2.)

16.   The omission of a corresponding subsection to 49 United States Code section 11503(c) is not the only way in which the AAIA differs from the 4–R Act.   In both the Motor Carrier Act and the AAIA, Congress omitted a 4–R Act subsection prohibiting states from “impos[ing] another tax that discriminates against a rail carrier.”  (49 U.S.C. § 11503(b)(4).)   In addition, in the AAIA, Congress added a subsection permitting “any in lieu tax which is wholly utilized for airport and aeronautical purposes.”  (49 U.S.C.App. § 1513(d)(3), ante, fn. 5.)   Finally, in the AAIA, Congress expressly limited the comparison class for assessment ratio purposes to property “of the same type.”  (See post, p. 176.)   The effect of each of these differences is to narrow the scope of federal preemption by leaving more discretion vested in the hands of states.

17.   In this case, the Airlines estimate that approximately 15 percent of locally assessed personal property “although theoretically taxable under the state taxing scheme, escapes taxation through under reporting and administrative oversight.”   Since we are not confronted with a case in which the Airlines—“either alone or as part of some isolated and targeted group”—are “singled out ․ for discriminatory treatment,” we need not consider whether the AAIA would proscribe such treatment.   (Dept. of Revenue of Or. v. ACF Industries, supra, 510 U.S. at pp. 174–176, 114 S.Ct. at pp. 851–852.)

18.   Citing legislative history and case law under the 4–R Act and the Motor Carrier Act, the Airlines assert that the only “types” of property that Congress had in mind in the AAIA were real property and personal property.   Given that neither the 4–R Act nor the Motor Carrier Act used the words “of the same type,” this legislative history and case law is of little assistance.In rejecting the Airlines' invitation to limit the definition of “type” in the AAIA to real property and personal property, we note that Congress' decision to limit the comparison class to property “of the same type” is consistent with its decision not to require sales assessment ratio studies.  (See ante, pp. 174–176.)   By limiting the comparison class to property “of the same type,” Congress allowed courts to compare the statutorily prescribed assessment ratios for the same type of property in the same assessment jurisdiction (often fixed numbers) as opposed to having to conduct sales assessment ratio studies in order to determine whether assessment ratio discrimination exists.   In this case, by way of example, we need not undertake the difficult task of determining and factoring in ratios for centrally assessed utility property because it is a different type of property.   We again emphasize that airline personal property is taxed in exactly the same manner as all other locally assessed taxable personal property in California.   We are not faced with a situation in which the Airlines—“either alone or as part of some isolated and targeted group”—are “singled out ․ for discriminatory treatment.”  (See ante, fn. 17.)

DOSSEE, Associate Justice.

STRANKMAN, P.J., and NEWSOM, J., concur.

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