Hopkins v. Southern California Tel. Co. - 275 U.S. 393 (1928)
U.S. Supreme Court
Hopkins v. Southern California Tel. Co., 275 U.S. 393 (1928)
Hopkins v. Southern California Telephone Company
Argued December 8, 1927
Decided January 3, 1928
275 U.S. 393
1. Where a bill in the district court to enjoin state officials from enforcing a property tax raises substantial questions as to its validity under the Fourteenth Amendment, the court has jurisdiction even though its validity under the state law is also questioned and has not been decided by the courts of the state. P. 275 U. S. 398.
2. The district court, having thus acquired jurisdiction as a federal court, all material questions, state or federal, are open for decision. Id.
3. The equity jurisdiction also exists in such a case if the legal remedy of paying the tax and suing to recover is doubtful under the state law, would not include interest, and would involve a multiplicity of suits. P. 275 U. S. 399.
4. A rehearing granted by the Supreme Court of California vacates the previous opinion and judgment, and sets the whole matter at large. P. 275 U. S. 400.
5. Under the constitution (Art. XIII, § 14) and statutes of California, telephone companies pay a state property tax upon their franchises, poles, wires, and other property used exclusively in the operation of their business in the state, computed at certain percentages upon the gross receipts from such operation, and such taxes are in lieu of all other taxes upon such property of such companies. The percentages are adjusted so that this tax shall equal the average burden of taxation on other classes of property, which are subject to local taxation by counties and municipalities, and not by the state. Double taxation is forbidden. A telephone company was assessed, and paid, the full percentage of the gross receipts from the property operated by it, part of which was leased from another company. Held, that the leased property was not subject to county and municipal taxes assessed against the lessor. P. 275 U. S. 400.
6. Construction of a state constitution and statutes which may create serious questions under the federal Constitution is to be avoided if possible. P. 275 U. S. 403.
13 F.2d 817 affirmed.
Certiorari, 273 U.S. 685, to a decree of the circuit court of appeals reversing a decree of the district court and directing an injunction in a suit brought by the telephone company to enjoin the County of Los Angeles and certain of its officers from seizing and selling some 308,200 telephone "talking sets" in satisfaction of a local tax. The district court had dismissed the bill for lack of jurisdiction.