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The principle of comity bars taxpayers' damages actions brought in federal courts under 42 U.S.C. 1983 to redress the allegedly unconstitutional administration of a state tax system. Because the principle of comity bars federal courts from granting damages relief in such cases, it is not necessary to decide whether the Tax Injunction Act, standing alone, would bar such actions. Pp. 107-117.
REHNQUIST, J., delivered the opinion of the Court, in which BURGER, C. J., and WHITE, BLACKMUN, and POWELL, JJ., joined. BRENNAN, J., filed an opinion concurring in the judgment, in which MARSHALL, STEVENS, and O'CONNOR, JJ., joined, post, p. 117.
David J. Newburger argued the cause for petitioners. With him on the briefs were Susan Spiegel, Steve Vossmeyer, and James P. Gamble.
Thomas W. Wehrle argued the cause for respondents. With him on the brief for respondents McNary et al. was Andrew J. Minardi. John Ashcroft and Michael L. Boicourt filed a brief for respondents Williams et al. *
[ Footnote * ] John J. Enright, William J. Costello, Eugene L. Griffin, and Michael F. Baccash filed a brief for the International Association of Assessing Officers as amicus curiae.
JUSTICE REHNQUIST delivered the opinion of the Court.
In this action we are required to reconcile two somewhat intermittent and conflicting lines of authority as to whether a damages action may be brought under 42 U.S.C. 1983 to redress the allegedly unconstitutional administration of a state tax system. The United States District Court for the Eastern District of Missouri held that such suits were barred by both 28 U.S.C. 1341 (Tax Injunction Act) and the principle [454 U.S. 100, 102] of comity, and the Court of Appeals for the Eighth Circuit affirmed by an equally divided court sitting en banc. 1 We granted certiorari to resolve a conflict among the Courts of Appeals, 2 450 U.S. 1039 , and we now affirm. Before setting forth the facts, we think that a description of the past and at times divergent decisions of this Court may shed light upon the proper disposition of this case.
This Court, even before the enactment of 1983, recognized the important and sensitive nature of state tax systems and the need for federal-court restraint when deciding cases that affect such systems. As Justice Field wrote for the Court shortly before the enactment of 1983:
Contrasted with this statute and line of cases are our holdings with respect to 42 U.S.C. 1983. In 1871, shortly after Justice Field wrote of the vital and vulnerable nature of state tax systems, Congress enacted 1983 with its familiar language:
Thus, we have two divergent lines of authority respecting access to federal courts for adjudication of the constitutionality of state laws. Both cannot govern this case. On one hand, 1341, with its antecedent basis in the comity principle of Matthews v. Rodgers, supra, and Boise Artesian Water Co. v. Boise City, supra, bars at least federal injunctive challenges to state tax laws. Added to this authority is our decision in Great Lakes Dredge & Dock Co. v. Huffman, supra, holding that declaratory judgments are barred on the basis of comity. On the other hand is the doctrine originating in Monroe v. Pape, supra, that comity does not apply where 1983 is involved, and that a litigant challenging the constitutionality of any state action may proceed directly to federal court. With this divergence of views in mind, we turn now to the facts of this case, a 1983 challenge to the administration of state tax laws which implicates both lines of authority. We hold that at least as to such actions, which is all we need decide here, the principle of comity controls.
Petitioner Fair Assessment in Real Estate Association is a nonprofit corporation formed by taxpayers in St. Louis County (County) to promote equitable enforcement of property tax laws in Missouri. Petitioners J. David and Lynn F. Cassilly own real property with recent improvements in the County. Petitioners filed suit under 1983 alleging that respondents, the County's Tax Assessors, Supervisors, and Director of Revenue, and three members of the Missouri State [454 U.S. 100, 106] Tax Commission, had deprived them of equal protection and due process of law by unequal taxation of real property.
The complaint focuses on two specific practices by respondents. First, petitioners allege that County properties with new improvements are assessed at approximately 33 1/3% of their current market value, while properties without new improvements are assessed at approximately 22% of their current market value. This disparity allegedly results from respondents' failure to reassess old property on a regular basis, the last general reassessment having occurred in 1960. Second, petitioners allege that property owners who successfully appeal their property assessments, as did the Cassillys in 1977, are specifically targeted for reassessment the next year.
Petitioners have previously sought some relief from respondents' assessments in state proceedings. In 1975, petitioner David Cassilly and others brought an action in which the State Circuit Court ordered respondent Antonio to reassess all real property in the County. On direct appeal, however, the Missouri Supreme Court reversed on the ground that the State Tax Commission, not the Circuit Court, should supervise the reassessment process. State ex rel. Cassilly v. Riney, 576 S. W. 2d 325 (1979) (en banc). In 1977, the Cassillys appealed the tax assessed on their home to the County Board of Equalization and received a reduction in assessed value from 33 1/3% to 29%. When their home was again assessed at 33 1/3% in 1978, the Cassillys once more appealed to the Board of Equalization. That appeal was pending at the commencement of this litigation.
The Cassillys brought this 1983 action in federal court seeking actual damages in the amount of overassessments from 1975 to 1979, and punitive damages of $75,000 from each respondent. Petitioner Fair Assessment sought actual damages in the amount of expenses incurred in efforts to obtain equitable property assessments for its members. As in all other 1983 actions, the award of such damages would first [454 U.S. 100, 107] require a federal-court declaration that respondents, in administering the state tax, violated petitioners' constitutional rights.
As indicated by our discussion in Part I, 1341 and our comity cases have thus far barred federal courts from granting injunctive and declaratory relief in state tax cases. Because we decide today that the principle of comity bars federal courts from granting damages relief in such cases, we do not decide whether that Act, standing alone, would require such a result. 4 The correctness of the result in this case is demonstrated by an examination of the pre-Act decisions of this Court, the legislative history of the Act, our post-Act decision in the Great Lakes case, and more recent recognition of the principles of federalism.
Prior to enactment of 1341, virtually all federal cases challenging state taxation sought equitable relief. 5 Consequently, [454 U.S. 100, 108] federal-court restraint in state tax matters was based upon the traditional doctrine that courts of equity will stay their hand when remedies at law are plain, adequate, and complete. See, e. g., Matthews v. Rodgers, 284 U.S. 521 (1932); Singer Sewing Machine Co. v. Benedict, 229 U.S. 481 (1913); Boise Artesian Water Co. v. Boise City, 213 U.S. 276 (1909). Even with this basis in equity law, these cases recognized that the doctrine of equitable restraint was of "notable application," Boise Artesian Water Co., supra, at 281, and carried "peculiar force," Matthews, supra, at 525, in suits challenging the constitutionality of state tax laws. Such restraint was particularly appropriate because of the delicate balance between the federal authority and state governments, and the concomitant respect that should be accorded state tax laws in federal court. As the Court in Matthews explained:
This policy of equitable restraint based on notions of comity did not completely clear the federal courts of state tax cases. Indeed, the Senate Report on the bill that was to become 1341 referred to "[t]he existing practice of the Federal courts in entertaining tax-injunction suits against State officers . . . ." S. Rep. No. 1035, 75th Cong., 1st Sess., 2 (1937). An examination of the cases of that era demonstrates, however, that this practice resulted not from a repudiation of the principle of comity, but from federal-court determinations that available state remedies did not adequately protect the federal rights asserted. See, e. g., Grosjean v. American Press Co., 297 U.S. 233, 242 (1936); Gully v. Interstate Natural Gas Co., 82 F.2d 145 (CA5), cert. denied, 298 U.S. 688 (1936). See also Note, Federal Court Interference with the Assessment and Collection of [454 U.S. 100, 110] State Taxes, 59 Harv. L. Rev. 780, 783, n. 13 (1946); Note, The Tax Injunction Act and Suits for Monetary Relief, 46 U. Chi. L. Rev. 736, 744, and nn. 40, 41 (1979).
Congress' response to this practice of the federal courts - enactment of 1341 - was motivated in large part by comity concerns. As we said of the Act just last Term:
The post-Act vitality of the comity principle is perhaps best demonstrated by our decision in Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293 (1943). Several Louisiana taxpayers brought an action in Federal District Court seeking a declaratory judgment that the state tax law as applied to them was unconstitutional and void. Although 1341 was raised as a possible bar to the suit, as it has been raised in this case, "we [found] it unnecessary to inquire whether the words of the statute may be so construed as to prohibit a declaration by federal courts concerning the invalidity [454 U.S. 100, 111] of a state tax." 319 U.S., at 299 . Instead, "we [were] of the opinion that those considerations which have led federal courts of equity to refuse to enjoin the collection of state taxes, save in exceptional cases, require[d] a like restraint in the use of the declaratory judgment procedure." Ibid. Those considerations were, of course, principles of federalism:
The principle of comity has been recognized and relied upon by this Court in several recent cases dealing with matters other than state taxes. Its fullest articulation was [454 U.S. 100, 112] given in the now familiar language of Younger v. Harris, 401 U.S. 37 (1971), a case in which we held that traditional principles of equitable restraint bar federal courts from enjoining pending state criminal prosecutions except under extraordinary circumstances:
In arguments primarily addressed to the applicability of the Act, petitioners contend that damages actions are inherently less disruptive of state tax systems than injunctions or declaratory judgments, and therefore should not be barred by prior decisions of this Court. Petitioners emphasize that their 1983 claim seeks recovery from individual state officers, not from state coffers, and that the doctrine of qualified immunity will protect such officers' good-faith actions and will thus avoid chilling their administration of the Missouri tax scheme.
We disagree. Petitioners will not recover damages under 1983 unless a district court first determines that respondents' administration of the County tax system violated petitioners' constitutional rights. In effect, the district court must first enter a declaratory judgment like that barred in Great Lakes. We are convinced that such a determination would be fully as intrusive as the equitable actions that are barred by principles of comity. 7 Moreover, the intrusiveness [454 U.S. 100, 114] of such 1983 actions would be exacerbated by the nonexhaustion doctrine of Monroe v. Pape, 365 U.S. 167 (1961). Taxpayers such as petitioners would be able to invoke federal judgments without first permitting the State to rectify any alleged impropriety.
In addition to the intrusiveness of the judgment, the very maintenance of the suit itself would intrude on the enforcement of the state scheme. As the District Court in this case stated:
This case is therefore controlled by principles articulated even before enactment of 1983 and followed in later decisions such as Matthews and Great Lakes. The recovery of damages under the Civil Rights Act first requires a "declaration" or determination of the unconstitutionality of a state tax scheme that would halt its operation. And damages actions, no less than actions for an injunction, would hale state officers into federal court every time a taxpayer alleged the requisite elements of a 1983 claim. We consider such interference [454 U.S. 100, 116] to be contrary to "[t]he scrupulous regard for the rightful independence of state governments which should at all times actuate the federal courts." Matthews, 284 U.S., at 525 .
Therefore, despite the ready access to federal courts provided by Monroe and its progeny, we hold that taxpayers are barred by the principle of comity from asserting 1983 actions against the validity of state tax systems in federal courts. Such taxpayers must seek protection of their federal rights by state remedies, provided of course that those remedies are plain, adequate, and complete, 8 and may ultimately seek review of the state decisions in this Court. See Huffman v. Pursue, Inc., 420 U.S., at 605 ; Matthews v. Rodgers, supra, at 526.
The adequacy of available Missouri remedies is not at issue in this case. The District Court expressly found "that [petitioners] have means to rectify what they consider an unjust situation through the state's own processes," 478 F. Supp., at 1234, and petitioners do not contest this finding. In addition, the Missouri Supreme Court has expressly held that plaintiffs such as petitioners may assert a 1983 claim in state court. See, e. g., Stafford v. Muster, 582 [454 U.S. 100, 117] S. W. 2d 670, 681 (1979); Shapiro v. Columbia Union National Bank & Trust Co., 576 S. W. 2d 310 (1978).
Accordingly, the judgment of the Court of Appeals is
[ Footnote 2 ] Compare Fulton Market Storage Co. v. Cullerton, 582 F.2d 1071 (CA7 1978), cert. denied, 439 U.S. 1121 (1979), with Fair Assessment in Real Estate Assn., Inc. v. McNary, supra; Ludwin v. City of Cambridge, 592 F.2d 606 (CA1 1979); and Bland v. McHann, 463 F.2d 21 (CA5 1972), cert. denied, 410 U.S. 966 (1973).
[ Footnote 3 ] We held in Chapman v. Houston Welfare Rights Organization, 441 U.S. 600 (1979), that 28 U.S.C. 1343, the jurisdictional counterpart of 42 U.S.C. 1983, was narrower in scope than the latter. Because there can be no doubt that a claim of denial of due process or equal protection under the Fourteenth Amendment, which these petitioners asserted, would come under the narrower construction of 1343 adopted by the Court in Chapman, supra, it is unnecessary to pursue here the difference between 1983 and 1343.
[ Footnote 4 ] The result we reach today was foreshadowed by our decision last Term in Rosewell v. LaSalle National Bank, 450 U.S. 503 (1981), wherein we stated that "even where the Tax Injunction Act would not bar federal-court interference in state tax administration, principles of federal equity may nevertheless counsel the withholding of relief. See Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 301 (1943)." Id., at 525-526, n. 33. We need not decide in this case whether the comity spoken of would also bar a claim under 1983 which requires no scrutiny whatever of state tax assessment practices, such as a facial attack on tax laws colorably claimed to be discriminatory as to race.
[ Footnote 5 ] Of course, the Court had not yet broadly interpreted the Civil Rights Act to permit federal damages actions for state violations of constitutional rights, brought prior to exhaustion of state remedies. See Monroe v. Pape, 365 U.S. 167 (1961). The closest pre-Act case to a federal damages action was a suit for refund of state taxes allegedly assessed in violation of the Fourteenth Amendment. First National Bank v. Board of County Commissioners, 264 U.S. 450 (1924). Consistent with the federal-court deference for state tax matters of which we speak today, the Court held [454 U.S. 100, 108] that the action was barred by the parties' failure to exhaust their available state remedies. Id., at 456. Although declaratory actions were available before 1937, they were seldom used. See Note, Federal Declaratory Judgments on the Validity of State Taxes, 50 Yale L. J. 927, 929-930, and n. 14 (1941).
[ Footnote 6 ] JUSTICE BRENNAN has cogently explained the reasons behind federal-court deference for state tax administration:
[ Footnote 7 ] Other federal courts have reached this same conclusion. For example, in Advertiser Co. v. Wallace, 446 F. Supp. 677, 680 (MD Ala. 1978), the court concluded that "[a]lthough perhaps less coercive than anticipatory relief and less intrusive than a refund, the damage award plaintiff seeks, especially its request for punitive damages, still is designed to deter collection of the taxes now being assessed by defendants." And the court in Evangelical Catholic Communion, Inc. v. Thomas, 373 F. Supp. 1342, 1344 (Vt. 1973), correctly stated:
[ Footnote 8 ] We discern no significant difference, for purposes of the principles recognized in this case, between remedies which are "plain, adequate, and complete," as that phrase has been used in articulating the doctrine of equitable restraint, and those which are "plain, speedy and efficient," within the meaning of 1341. See, e. g., Tully v. Griffin, Inc., 429 U.S. 68, 73 -74 (1976); Hillsborough v. Cromwell, 326 U.S. 620, 622 -623 (1946); Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S., at 297 -299; Matthews v. Rodgers, 284 U.S., at 525 -526. Both phrases refer 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. Numerous federal decisions have treated the adequacy of state remedies, and it is to that body of law that federal courts should look in seeking to determine the occasions for the comity spoken of today.
JUSTICE BRENNAN, with whom JUSTICE MARSHALL, JUSTICE STEVENS, and JUSTICE O'CONNOR join, concurring in the judgment.
I agree that the judgment of the District Court dismissing petitioners' complaint should be affirmed. But I arrive at that conclusion by a different route for I cannot agree that this case, and the jurisdiction of the federal courts over an action for damages brought pursuant to express congressional authority, is to be governed by applying a "principle of comity" grounded solely on this Court's notion of an appropriate division of responsibility between the federal and state judicial systems. Subject only to constitutional constraints, it is exclusively Congress' responsibility to determine the jurisdiction of the federal courts. Federal courts have historically acted within their assigned jurisdiction in accordance with established principles respecting the prudent exercise of equitable power. But this practice lends no credence to the authority which the Court asserts today to renounce jurisdiction over an entire class of damages actions brought pursuant to 42 U.S.C. 1983.
Petitioners J. David Cassilly and Lynn F. Cassilly are owners of real property in St. Louis County, Mo. Petitioner Fair Assessment in Real Estate Association, Inc. (FAIR), is a not-for-profit corporation formed by real estate taxpayers in St. Louis County to promote equitable enforcement of the real property tax laws of the State of Missouri. Respondents are public officials responsible for the execution of the real property tax laws in St. Louis County. On July 2, 1979, [454 U.S. 100, 118] petitioners filed this action in the United States District Court for the Eastern District of Missouri, pursuant to 42 U.S.C. 1983, contending that respondents had willfully, intentionally, and systematically deprived them of their rights to due process and equal protection under the Fourteenth Amendment through inequitable property tax assessments. Petitioners alleged that respondents assessed properties with recent improvements at roughly 33 1/3% of current true market value, and older homes on the average of 22 1/2% of current market value. Further they alleged that respondents targeted for reassessment all real property upon which a successful appeal had been prosecuted in the prior year. The Cassillys sought compensatory damages measured by the difference between the taxes which they paid in several years prior to the action, and the amount they contended would have been owing had they been assessed at the average rate. They sought further compensation for expenses they had incurred in their sporadic attempts to remedy the alleged unlawful assessment by resort to the state administrative mechanisms, and substantial punitive damages against each respondent. FAIR sought money damages in the amount of expenses incurred in the course of its efforts to obtain equitable enforcement of the state real property tax law.
The District Court dismissed the complaint, holding that the action was barred by the Tax Injunction Act and principles of comity. 1 478 F. Supp. 1231. The judgment of the District Court was affirmed by an equally divided vote of the Court of Appeals for the Eighth Circuit sitting en banc. 622 F.2d 415. [454 U.S. 100, 119]
The opinion for the Court sets the "principle of comity" against the strong policies of 42 U.S.C. 1983 favoring a federal forum to vindicate deprivations of federal rights, and resolves the issue in favor of comity. In my view, there is no conflict here that could conceivably justify the unprecedented step of renouncing our assigned jurisdiction. Indeed the very cases relied on by the Court in its attempt to find some historic source for its sweeping view of the "principle of comity," reveal the limits of that principle as a source of judicial authority.
As employed by the Court in several recent opinions, and in the opinion of the Court today, the "principle of comity" refers to the "proper respect for state functions" that organs of the National Government, most particularly the federal courts, are expected to demonstrate in the exercise of their own legitimate powers. See Younger v. Harris, 401 U.S. 37, 44 -45 (1971). So employed, the "principle of comity" is nothing more than an encapsulation of policy, albeit policy with roots in the Constitution and our federal system of government. 2
While the "principle of comity" may be a source of judicial policy, it is emphatically no source of judicial power to renounce jurisdiction. 3 The application of the comity principle [454 U.S. 100, 120] has thus been limited to a relatively narrow class of cases: Only where a federal court is asked to employ its historic powers as a court of equity, and is called upon to decide whether to exercise the broadest and potentially most intrusive form of judicial authority, does "comity" have an established and substantial role in informing the exercise of the court's discretion. 4 There is little room for the "principle of [454 U.S. 100, 121] comity" in actions at law where, apart from matters of administration, judicial discretion is at a minimum. 5 Surely no judicial power to fashion novel doctrine concerning the jurisdiction of the federal courts is to be found in the Constitution itself, which provides that the judicial power "shall be vested [454 U.S. 100, 122] in one supreme Court and in such inferior Courts as the Congress may from time to time ordain and establish." U.S. Const., Art. III, 1.
The Court relies primarily on Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293 (1943), to support its sweeping view of the comity principle. Great Lakes presented the question whether the Tax Injunction Act could be "so construed as to prohibit a declaration by federal courts concerning the invalidity of a state tax." Id., at 299. We found no need to address that question, holding instead that "those considerations which have led federal courts of equity to refuse to enjoin the collection of state taxes, save in exceptional cases, require a like restraint in the use of the declaratory judgment procedure." Ibid. From this the Court today reasons:
The jurisdiction of the federal courts over cases such as the present one reflects a considered congressional judgment. As the Court acknowledges, 1983 "gave a federal cause of action to prisoners, taxpayers, or anyone else who was able to prove that his constitutional or federal rights had been denied by any State." Ante, at 103-104. In addition, 42 U.S.C. 1981 provides that "[a]ll persons . . . shall be subject to like punishment, pains, penalties, taxes, licenses, and exactions of every kind, and to no other." 9 (Emphasis added.) Congress has expressly provided jurisdiction over such claims in the district courts. 10 28 U.S.C. 1343; see [454 U.S. 100, 124] Zwickler v. Koota, 389 U.S. 241, 245 -248 (1967). 11 Where Congress has granted the federal courts jurisdiction, we are not free to repudiate that authority. Ibid.; 12 England v. Louisiana State Board of Medical Examiners, 375 U.S. 411 (1964). In England we said: [454 U.S. 100, 125]
Subject of course to constitutional constraints, the jurisdiction of the lower federal courts is subject to the plenary control of Congress. Kline v. Burke Construction Co., 260 U.S. 226, 233 -234 (1922); Cary v. Curtis, 3 How. 236, 245 (1845). As pointed out supra, at 123-124, and n. 11, this case appears to fall squarely within the jurisdictional grant of 28 U.S.C. 1343, and perhaps of 28 U.S.C. 1331 as well. The question, then, is whether Congress has anywhere contradicted that presumptive grant of judicial authority. [454 U.S. 100, 126] Only one possible source of that contradiction having been suggested, I begin my analysis of the jurisdictional question with the Tax Injunction Act itself.
Title 28 U.S.C. 1341 provides:
The federal courts have for most of their history been scrupulous in the exercise of their equitable powers to avoid unnecessary interference with the administration of state taxation. In Dows v. Chicago, 11 Wall. 108 (1871), Justice Field noted: [454 U.S. 100, 127]
Although this Court, in the many cases preceding passage of the Tax Injunction Act, affirmed the need for restraint in the exercise of the power of equity in state tax cases, it never intimated that the federal forum was inappropriate where the complaint sought only a remedy in damages, and the case was otherwise within federal jurisdiction. Indeed, the Court repeatedly [454 U.S. 100, 128] stated the contrary. See id., at 486; Henrietta Mills v. Rutherford County, 281 U.S. 121, 127 (1930); Chicago, B. & Q. R. Co. v. Osborne, 265 U.S. 14, 16 (1924). For example, in Henrietta Mills, a unanimous Court concluded that there was no basis for equitable relief, relying on the fact that there would have been "an adequate remedy at law, not only in the state court, but also in the Federal court if petitioner had been able to show a violation of the Federal Constitution." 281 U.S., at 127 (emphasis added). And indeed damages actions for wrongful collection of taxes, brought against both the taxing authority and the taxing officials, were not unknown to the lower federal courts. See, e. g., Tyler v. Dane County, 289 F. 843 (WD Wis. 1923); International Paper Co. v. Burrill, 260 F. 664 (Mass. 1919). In Matthews v. Rodgers, 284 U.S. 521 (1932), only five years prior to the enactment of the Tax Injunction Act, we summarized the federal practice:
Although in 1932 Matthews v. Rodgers stated a broad principle of restraint in the exercise of federal equity powers, [454 U.S. 100, 129] ibid., the rule was soon honored more in breach than in observance. Purporting to construe these equitable principles in state tax cases, the federal courts had become "free and easy with injunctions." 15 Thus federal remedial practice began to contrast sharply with the limits on state remedial authority, with the result that the federal court became the preferred forum for those who could properly invoke its jurisdiction: principally large out-of-state corporations. The legislative history of the Tax Injunction Act makes plain Congress' [454 U.S. 100, 130] concern with this disparity, and its effect on local finances. In introducing the bill that ultimately became the Tax Injunction Act, Senator Bone explained:
As understood and applied by this Court prior to the passage of the Tax Injunction Act, 18 and by Congress in enacting the Tax Injunction Act, the "principle of comity" which demanded respect for state tax administration, extended precisely as far as was necessary to ensure that the federal courts not become party to the abuse of their equity power. Congress intended that federal authority be exercised with the same restraint that the States applied in the administration of their own tax system, and thus to restore the parity between the two judicial systems. But there is absolutely no support in either the cases of this Court, or in Congress' [454 U.S. 100, 133] action, for total abdication of federal power in this field. It is thus entirely clear that as a jurisdictional matter, the federal courts have jurisdiction over claims seeking monetary relief arising from unconstitutional state taxation.
Petitioners argue that since their federal claim is brought pursuant to 42 U.S.C. 1983, it was not necessary to exhaust administrative remedies before commencing this action.
In First National Bank of Greeley v. Board of Commissioners of Weld County, 264 U.S. 450 (1924), we held that before a litigant complaining of alleged overassessment of taxes may bring a damages action grounded on the Constitution or statutes of the United States, that litigant must fully exhaust any administrative remedies afforded by the State. 19 In Weld County, plaintiff in error brought its action under federal question jurisdiction to recover the amount of taxes levied for the years 1913 and 1914. It alleged that the taxes were assessed and collected in contravention of the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and a federal statute 20 setting forth certain limitations [454 U.S. 100, 134] on state and local taxation in regard to national banks. 21 The Court paused before addressing plaintiff in error's substantive claim:
Although the Court did not elaborate on the underpinnings of that holding, it seems clear that it was grounded on the considerations of sound judicial administration 23 and parity between the state and federal judicial systems that had historically [454 U.S. 100, 135] guided the federal equity courts and were later embodied in the Tax Injunction Act. Those principles, and Weld County, govern the treatment of actions at law involving state tax matters.
Petitioners seek to avoid the reach of Weld County by arguing that this case is to be controlled by the general rule stated in McNeese v. Board of Education, 373 U.S. 668 (1963), that in cases brought pursuant to 42 U.S.C. 1983, resort to state administrative remedies is not a precondition to federal suit. As a factual matter of course, it is difficult to distinguish Weld County, which raised factual allegations that closely parallel those of the complaint at issue here. 24
More importantly, while this Court has repeatedly reaffirmed that exhaustion of administrative remedies is not a precondition to a suit brought under the Civil Rights Acts, [454 U.S. 100, 136] see, e. g., Ellis v. Dyson, 421 U.S. 426, 432 -433 (1975); Steffel v. Thompson, 415 U.S. 452, 472 -473 (1974); Carter v. Stanton, 405 U.S. 669, 670 -671 (1972); Wilwording v. Swenson, 404 U.S. 249, 251 (1971) (per curiam); King v. Smith, 392 U.S. 309, 312 , n. 4 (1968); Damico v. California, 389 U.S. 416, 416 -417 (1967) (per curiam), that conclusion rests firmly on the understanding that such was the intention of Congress in enacting 1983. Where Congress has provided that in a particular class of cases the federal courts should refrain from hearing suits brought under 1983 until administrative remedies have been exhausted, see, e. g., 42 U.S.C. 1997e (1976 ed., Supp. IV), there is no doubt that the federal courts are bound by that limitation. Cf. Preiser v. Rodriguez, 411 U.S. 475, 489 -490 (1973). My view has always been that displacement of 1983 remedies can only "be justified by a clear statement of congressional intent, or, at the very least, by the presence of the most persuasive considerations of policy." 25 Id., at 518 (BRENNAN, J., dissenting). Surely a somewhat lesser showing is required where, as here, we are concerned not with the displacement of the 1983 remedy, but with the deferral of federal court consideration pending exhaustion of the state administrative process. Where the obligation to require exhaustion of administrative remedies may be fairly understood from congressional action, or is in accord with congressional policy, not only is 1983 no bar, but the federal courts should be alert to further those policies.
We plainly have sufficient evidence of such congressional policy here. As noted above, in enacting the Tax Injunction Act, Congress sought to assure that the federal courts would remain open to suits for monetary relief in state tax cases "if [454 U.S. 100, 137] the requisite elements of Federal jurisdiction existed." H. R. Rep. No. 1503, 75th Cong., 1st Sess., 3 (1937). 26 In 1937 the requirement of exhaustion of state administrative remedies was certainly a mandatory precondition to suit, and in that sense a "jurisdictional prerequisite." Nevertheless, we need not reach the conclusion that Congress intended by enactment of the Tax Injunction Act to freeze the then-operative jurisdictional practice of the federal courts in order to recognize that the administrative-exhaustion requirement is entirely consonant with the principal purposes of the Act: to provide assurance that federal courts exercise at least the same restraint in dealing with questions of state tax administration as the courts of the State that levied the tax. Where administrative remedies are a precondition to suit for monetary relief in state court, absent some substantial consideration compelling a contrary result in a particular case, those remedies should be deemed a precondition to suit in federal court as well. 27 [454 U.S. 100, 138]
Petitioners sought damages arising from what they alleged to be unconstitutional assessments in four tax years. In 1974 and 1975, they failed to pursue in any manner the administrative remedies provided by the State. In 1977 they appealed their assessment to the St. Louis County Board of Equalization and gained substantial relief. Although they claim here that the relief granted by the Board of Equalization failed to bring their assessment up to constitutional standards, they failed to appeal the Board's ruling for that year to the State Tax Commission. An appeal of their 1978 assessment was pending before the State Tax Commission at the time they brought this action.
Because petitioners failed to exhaust their administrative remedies in each tax year for which they seek damages, their complaint was properly dismissed. To the extent today's judgment affirms that dismissal, I concur.
[ Footnote 1 ] The court focused on the claims of the Cassillys, the individual petitioners, dismissing FAIR's complaint because it is "obviously in the same position as the individual plaintiffs." Petitioners do not challenge that determination in this Court, but rather concede that the "case turns" solely on the claims of the individuals. Reply Brief for Petitioners 4, n. 2; Brief for Petitioners 8.
[ Footnote 2 ] To recognize the nature of the principle does not, of course, detract from the fact that its manifestations can be clearly seen in the cases of this Court, and in the Acts of Congress, long before Younger v. Harris. Indeed, the historic treatment of state tax litigation in the cases of this Court, and in Congress, provides an excellent illustration of the settled scope of the comity principle as a source of both judicial and congressional doctrine. The Court's failure today to acknowledge the substantive limits of the principle may in part be the product of the fact that the "principle of comity" is not at all tied to concrete language in any constitutional or statutory provision. See L. Tribe, American Constitutional Law 3-41 (1978).
[ Footnote 3 ] The distinction between federal court jurisdiction and the exercise of equitable power did not escape Chief Justice Stone writing for the Court in Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293 (1943): [454 U.S. 100, 120]
[ Footnote 4 ] "Abstention" is often cited as an application of the comity principle. See, e. g., Wells, The Role of Comity in the Law of Federal Courts, 60 N.C. L. Rev. 59, 63-68 (1981). Not surprisingly then, we have applied the abstention doctrine only in equity actions. See Railroad Comm'n v. Pullman Co., 312 U.S. 496, 500 (1941) ("The resources of equity are equal to an adjustment that will avoid the waste of a tentative decision as well as the friction of a premature constitutional adjudication"); Burford v. Sun Oil Co., 319 U.S. 315, 318 (1943) ("as a matter of sound equitable discretion").
In Pullman, the Court described the equitable origins of the rule:
Abstention is thus narrowly drawn to meet the particularized need it serves. The federal court remains open to the litigant to present his federal claim should the action for which he is remitted to state court fail to afford relief. England v. Louisiana State Board of Medical Examiners, 375 U.S. 411 (1964). See also Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 29 (1959) ("This course does not constitute abnegation of judicial duty. On the contrary, it is a wise and productive discharge of it. There is only postponement of decision for its best fruition").
Principles of comity are also reflected in federal habeas practice. While current habeas jurisdiction is wholly a statutory matter, 28 U.S.C. 2254, comity surely played a part in the development of the exhaustion requirement. See Ex parte Royall, 117 U.S. 241 (1886). But the judicial creation of that requirement reflected no usurpation of judicial power. Issuance of the Great Writ was historically regarded as a matter of equitable discretion. See Fay v. Noia, 372 U.S. 391, 438 (1963).
[ Footnote 5 ] This is not to suggest that there is no occasion to apply principles of comity in actions at law. The doctrine of exhaustion of administrative remedies, while based primarily on concerns of judicial administration, see Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41, 50 -51 (1938), and which reflects principles of avoidance of unnecessary litigation, deference to administrative expertise, and "notions of administrative autonomy," see McKart v. United States, 395 U.S. 185, 194 -195 (1969), is surely broad enough to encompass comity concerns as well. Cf. First National Bank of Greeley v. Board of Commissioners of Weld County, 264 U.S. 450 (1924). But the role of comity must narrow with the scope of judicial discretion, and, in regard to suits seeking monetary relief, that discretion is limited.
[ Footnote 6 ] The Court explained the equitable foundations of anticipatory relief:
[ Footnote 7 ] A similar desire to ensure that state and local governments not be deprived of the use of tax proceeds until the lawfulness of the levy was finally determined, was largely responsible for enactment of the Tax Injunction Act. See infra, at 129-130, and n. 16.
[ Footnote 8 ] The Court suggests that if the District Court determines that the assessments in question here were unlawful, the state officials "would promptly cease the conduct found to have infringed petitioners' constitutional rights," and thus the determination of unlawfulness would operate to "suspend" collection of state taxes. Ante, at 115. But I would never have thought this result something to be avoided. The Great Lakes rule seeks to avoid withholding tax funds from local authorities until the tax is determined to be unlawful, not afterwards.
[ Footnote 9 ] The Civil Rights Act that became 1981 was passed by Congress in 1868. The reference to "taxes" was added in 1870. See County of San Mateo v. Southern Pacific R. Co., 13 F. 145, 151 (CC Cal. 1882) (Justice Field). At least one state tax case seeking a damages remedy has involved a claim under 1981. Garrett v. Bamford, 538 F.2d 63 (CA3 1976).
[ Footnote 10 ] Actions challenging the constitutionality of state taxation have also been held to fall within the general federal question jurisdiction, 28 U.S.C. 1331. See, e. g., Raymond v. Chicago Union Traction Co., 207 U.S. 20, 35 (1907) ("The claim that the action of the state board of [454 U.S. 100, 124] equalization in making the assessment under consideration was the action of the State, and if carried out would violate the provisions of the Fourteenth Amendment to the Constitution of the United States, by taking property of the appellee without due process of law, and by failing to give it the equal protection of the laws, constitutes a Federal question beyond all controversy"); County of San Mateo v. Southern Pacific R. Co., supra; Louisville & N. R. Co. v. Bosworth, 230 F. 191 (ED Ky. 1915).
[ Footnote 11 ] The jurisdictional grant reflects a congressional policy pronouncement on the role of the federal courts in our federal system. The Civil Rights Acts, passed between 1866 and 1875, and made federally cognizable by 28 U.S.C. 1343(3), were followed by the Act of Mar. 3, 1875, which granted the federal courts jurisdiction over all federal statutory and constitutional questions where the requisite amount in controversy was met. 1, 18 Stat. 470. It hardly disparages the current standing of the state courts as qualified adjudicators of federal rights exercising jurisdiction concurrent with that of the federal courts, to note that at the time of the enactment there was a more than modest distrust of the state courts as protectors of federal rights, see Mitchum v. Foster, 407 U.S. 225, 238 -242 (1972), and that "[b]y that statute `. . . Congress gave the federal courts the vast range of power which had lain dormant in the Constitution since 1789. These courts ceased to be restricted tribunals of fair dealing between citizens of different states and became the primary and powerful reliances for vindicating every right given by the Constitution, the laws, and treaties of the United States.'" Zwickler v. Koota, 389 U.S. 241, 247 (1967) (emphasis in the opinion), quoting F. Frankfurter & J. Landis, The Business of the Supreme Court: A Study in the Federal Judicial System 65 (1927).
[ Footnote 12 ] We stated in Zwickler:
[ Footnote 13 ] I might also question whether these terms are totally devoid of specialized legal meaning, for they surely seem to evoke association with the language of equitable actions. See, e. g., Dows v. Chicago, 11 Wall. 108, 110 (1871) ("No court of equity will . . . allow its injunction to issue to restrain their action . . .") (emphasis added); Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S., at 299 ("suspend collection of the state taxes until the litigation is ended").
[ Footnote 14 ] To be cognizable in a court of equity, it was understood that "the case must be brought within some of the recognized foundations of equitable jurisdiction, and that mere errors or excess in valuation, or hardship or injustice of the law, or any grievance which can be remedied by a suit at law, either before or after payment of taxes, will not justify a court of equity to interpose by injunction to stay collection of a tax." State Railroad Tax Cases, 92 U.S. 575, 614 (1876). The limitations of federal equity practice in 1876 intensified the need for restraint. Because the equity court was limited to enjoining the collection of the tax as a whole, the effect of injunctive relief was to allow the complainant to escape payment of all taxes due, even though the portion that reflected the lawful assessment should, in justice, have been paid. Id., at 614-615.
[ Footnote 15 ] England v. Louisiana State Board of Medical Examiners, 375 U.S., at 431 (Douglas, J., concurring).
Two features of federal equity practice explained this willingness to grant equitable relief. The first was the construction that this Court placed on the equitable maxim that equity jurisdiction does not lie where there exists an adequate legal remedy. The Court had held that the "adequate legal remedy" must be one cognizable in federal court. City Bank Co. v. Schnader, 291 U.S. 24, 29 (1934). Where the limitations on federal jurisdiction would preclude adjudication of the suit for monetary relief, either because of the mandate of the Eleventh Amendment, or otherwise, the barrier to federal injunctive intervention was thus removed. The States had for the most part denied their courts the power to grant anticipatory relief against the collection of taxes. See Culp, The Powers of a Court of Equity in State Tax Litigation, 38 Mich. L. Rev. 610, 618-631 (1940). It was this imbalance in the powers of the state and federal judicial systems that was "particularly remedied" by passage of the Tax Injunction Act. H. R. Rep. No. 1503, 75th Cong., 1st Sess., 3 (1937).
The second feature was that the federal courts, in construing strictly the requirement that the remedy available at law be "plain, adequate and complete," see supra, at 127, had frequently concluded that the procedures provided by the State were not adequate. See Note, Federal Court Interference with the Assessment and Collection of State Taxes, 59 Harv. L. Rev. 780, 782-783 (1946). The Tax Injunction Act set forth a more deferential standard by which to evaluate the adequacy of the state remedy. See Rosewell v. LaSalle National Bank, 450 U.S. 503 (1981). Thus, in this respect too, the Tax Injunction Act limited the equitable range of the district court and brought federal court practice more closely into line with that of state courts - which assuredly were required to act within the bounds of state law and procedure without regard to whether the federal courts considered that law and procedure "plain, adequate and complete."
[ Footnote 16 ] The Report further noted:
[ Footnote 17 ] The brief quotes from many of the cases discussed in Part III-B, supra, supporting the view that the federal forum would continue to be available.
To be sure, the House and Senate Reports focus on actions brought under diversity jurisdiction. But this emphasis merely reflects the fact that Congress was particularly concerned about the advantage conferred on out-of-state corporations by virtue of diversity jurisdiction. Just as it was unlikely that Congress, by enacting 28 U.S.C. 1341, sought to limit federal equity power only in diversity cases, see Rosewell v. LaSalle National Bank, 450 U.S., at 522 -523, n. 29, it is implausible that Congress wished to ensure the continued availability of diversity jurisdiction in actions at law, while implicity barring damages actions arising under the Constitution and laws of the United States.
[ Footnote 18 ] And in the cases that succeeded the Act. See supra, at 122-123.
[ Footnote 19 ] See Apartments Bldg. Co. v. Smiley, 32 F.2d 142, 143 (CA8 1929). A like rule applied in equity actions. See Gorham Mfg. Co. v. State Tax Comm'n, 266 U.S. 265, 269 -270 (1924); First National Bank of Greenville v. Gildart, 64 F.2d 873, 874-875 (CA5 1933); McDougal v. Mudge, 233 F. 235, 237 (CA8 1916).
[ Footnote 20 ] Revised Statutes 5219 allowed state and local taxation of the shares of a national bank "subject only to the two restrictions, that the taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State, and that the shares of any national banking association owned by non-residents of any State shall be taxed in the city or town where the bank is located, and not elsewhere. Nothing herein shall be construed to exempt the real property of associations from either State, county, or municipal taxes, to the same extent, according to its value, as other real property is taxed."
[ Footnote 21 ] Plaintiff in error charged that the "banks of Weld county were assessed and compelled to pay upon a valuation grossly in excess of that put upon other property in the same county and likewise in excess of that put upon other banks in other counties of the State." 264 U.S., at 452 -453.
[ Footnote 22 ] The exhaustion rule stated in Weld County, reflecting the established practice in state tax matters, was limited to exhaustion of administrative, but not judicial, remedies. See id., at 456; Stason, Judicial Review of Tax Errors - Effect of Failure to Resort to Administrative Remedies, 28 Mich. L. Rev. 637, 659, and n. 47 (1930) ("In no case, so far as the present examination of authorities has disclosed, has it been held that the taxpayer must resort to available modes of direct attack by judicial proceedings, before proceeding with collateral attack, except in injunction cases in which an injunction is refused because of the adequacy of the legal remedy").
[ Footnote 23 ] In Myers v. Bethlehem Shipbuilding Corp., 303 U.S. 41 (1938), which set forth the exhaustion requirement with respect to federal administrative remedies, Justice Brandeis noted that the exhaustion rule had frequently been applied in equity cases. Id., at 51, n. 9. "But," he added, "because the rule is one of judicial administration - not merely a rule governing the exercise of discretion - it is applicable to proceedings at law as well as suits in equity," ibid., citing Weld County.
[ Footnote 24 ] Petitioners seek to distinguish this case from Weld County, arguing that in Weld County the action was brought against the county directly, and was thus in effect a suit for a refund for which exhaustion might be appropriate, while this action has been brought pursuant to 42 U.S.C. 1983 against officials of the county, seeking damages. The distinction is unpersuasive. Any relief obtained by petitioners through the administrative process would, of course, reduce the potential damages liability of these defendants. Moreover, a city or county might itself be susceptible to suit under 42 U.S.C. 1983 where (as is apparently the allegation here) it is alleged that the unlawful assessments are an artifact of official policy. Monell v. New York City Dept. of Social Services, 436 U.S. 658 (1978). Petitioners should not be able to circumvent the exhaustion requirement by designedly not bringing suit against the single potential defendant to have actually benefited from the collection of the allegedly unlawful tax.
Finally, petitioners' argument is particularly inapt in this case. Many of the officials named as defendants have no small involvement in the administrative process. It surely seems appropriate that before being held accountable in court those officials have the opportunity fully to consider petitioners' claims within the administrative forum that provides the only basis for their involvement in this matter. See McKart v. United States, 395 U.S., at 195 .
Of course, it is unnecessary to decide whether the allegations in the complaint at issue here do state a claim under 42 U.S.C. 1983.
[ Footnote 25 ] I dissented in Preiser because I saw insufficient justification there to warrant displacement of the 1983 remedy in favor of a habeas corpus procedure involving exhaustion of state judicial remedies.
[ Footnote 26 ] See also H. R. Rep. No. 1503, at 4: "`[T]he aggrieved party is left to . . . his suit at law in the Federal courts if the essential elements of Federal jurisdiction are present'" (quoting Matthews v. Rodgers, 284 U.S. 521, 525 -526 (1932)).
[ Footnote 27 ] In Perez v. Ledesma, 401 U.S. 82, 128 , n. 17 (1971) (concurring in part and dissenting in part), I noted the policies that have motivated both judicial and congressional restraint in this field:
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Citation: 454 U.S. 100
Docket No: No. 80-427
Argued: October 05, 1981
Decided: December 01, 1981
Court: United States Supreme Court
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