1. Under 28 U.S.C. § 1341, it cannot be said, in the
circumstances of this case, that any of the remedies suggested by
the Attorney General of Georgia affords appellant the "plain,
speedy and efficient remedy" in the state courts necessary to
deprive the United States District Court of jurisdiction to enjoin
the State Revenue Commissioner from assessing or collecting
ad
valorem taxes from appellant corporation contrary to an
exemption in its special state charter and in violation of the
prohibition of the Federal Constitution against a state passing any
law impairing the obligation of contracts. Pp.
342 U. S.
300-303.
(a) A suit for injunction in a state court cannot be said to be
such a remedy, since it was tried by appellant without success in
Musgrove v. Georgia R. Co., 204 Ga. 139, 49 S.E.2d 26,
appeal dismissed, 335 U.S. 900. Pp.
342 U. S. 301,
342 U. S.
303.
(b) Nor can arresting tax executions by affidavits of illegality
be said to be such a remedy when it would require the filing of
over 300 separate claims in 14 different counties to protect the
single federal claim asserted by appellant. P.
342 U. S.
303.
(c) Nor can a suit against the State for refund after payment of
taxes be said to be such a remedy when it is applicable only to
taxes amounting to less than 15% of the total taxes in controversy.
P.
342 U. S.
303.
(d) Raising appellant's federal claim in defense of a suit by
the State Revenue Commissioner to recover taxes is not a remedy
that could have been invoked by appellant. P. 303,
n 11.
2. This suit in a federal district court by a corporation to
enjoin a State Revenue Commissioner from assessing or collecting
ad valorem taxes from the corporation contrary to an
exemption in its special state charter and in violation of the
prohibition of the Federal Constitution against a state passing any
law impairing the obligation of contracts, is not a suit against
the State which cannot be brought without the State's consent.
In re Ayers, 123 U. S. 443,
distinguished. Pp.
342 U. S.
303-306.
85 F. Supp. 749 reversed and remanded.
Page 342 U. S. 300
A three-judge federal district court dismissed appellant's suit
to enjoin a State Revenue Commissioner from assessing or collecting
ad valorem taxes contrary to an exemption in appellant's
special state charter and the prohibition of the Federal
Constitution against any state law impairing the obligation of
contracts. 85 F. Supp. 749. On appeal to this Court,
reversed
and remanded, p.
342 U. S.
306.
MR. CHIEF JUSTICE VINSON delivered the opinion of the Court.
Appellant was incorporated in 1833 by a Special Act of the
Georgia General Assembly that included a provision for exemption
from taxation. [
Footnote 1] In
1945, the Georgia Constitution was amended to provide that "[a]ll
exemptions from taxation heretofore granted in corporate charters
are declared to be henceforth null and void." [
Footnote 2] According to appellant's complaint,
appellee, who is State Revenue Commissioner, is threatening to act
pursuant to this amendment by proceeding against appellant for
the
Page 342 U. S. 301
collection of
ad valorem taxes for the year 1939, and
all subsequent years, on behalf of the State and every county,
school district and municipality through which appellant's lines
run. [
Footnote 3] Appellant
claims that this threatened taxation would be contrary to its
legislative charter, and would impair the obligation of contract
between appellant and the Georgia, contrary to Article I, Section
10 of the Federal Constitution. [
Footnote 4]
This latest phase [
Footnote
5] of appellant's frequent litigation over the tax exemption
provision of its 1833 charter began when appellant filed suit
against appellee's predecessor in a Georgia state court seeking
injunctive and declaratory relief. Relief was denied without
reaching the merits of appellant's claim when the Georgia Supreme
Court held that the action was, in effect, an unconsented suit
against the State which could not be maintained in the state
courts.
Musgrove v. Georgia Railroad & Banking Co.,
204 Ga. 139, 49 S.E.2d 26 (1948). We dismissed an appeal from that
judgment because it was based upon a nonfederal ground adequate to
support it. 335 U.S. 900 (1949).
Thereafter, appellant filed this action in the District Court to
enjoin appellee from assessing or collecting
ad valorem
taxes contrary to its legislative charter. Appellant also asked
that appellee's threatened acts be adjudged in violation of prior
decree also entered by the court below and affirmed by this Court.
Wright v.
Page 342 U. S. 302
Georgia Railroad & Banking Co., 216 U.
S. 420 (1910). A court of three judges [
Footnote 6] dismissed appellant's complaint
for want of jurisdiction, holding that the State of Georgia had not
submitted itself to the jurisdiction of the court so as to be
barred by the Wright decree, and that this action against appellee
is, in effect, an unconsented suit against the State prohibited by
the Eleventh Amendment. [
Footnote
7] 85 F. Supp. 749 (1949).
The Attorney General of Georgia stated at the bar of this Court
that "plain, speedy and efficient" state remedies were available to
appellant, particularly by appeal from an assessment by appellee.
We ordered the cause continued to enable appellant to assert such
remedies. 339 U.S. 901 (1950). After the District Court modified
the restraining order which it had entered pending appeal to permit
assessment, appellee held appellant liable for the full
ad
valorem tax and appellant appealed to the state courts. The
Georgia Supreme Court dismissed the appeal for want of
jurisdiction, holding that such remedy was not available to
appellant.
Georgia Railroad & Banking Co. v. Redwine,
208 Ga. 261,
66 S.E.2d 234
(1951). Following this decision, appellant moved for termination of
the continuance of its appeal in this Court, and we ordered
reargument.
First. On reargument, the Attorney General of Georgia
again maintained that "plain, speedy and efficient" remedies were
available to appellant in the state courts. If so, the District
Court is without jurisdiction under 28
Page 342 U. S. 303
U.S.C. (Supp. IV) § 1341. [
Footnote 8] The remedies now suggested are: (1) suit for
injunction in the Superior Court of Fulton County, Georgia; (2)
arresting tax execution by affidavits of illegality, and (3) suing
the State for refund after payment of taxes. The first route was
tried by appellant without success in the
Musgrove
litigation,
supra. The second remedy, the present
availability of which was doubted by the three Justices of the
Georgia Supreme Court that considered the matter in the appeal
case, [
Footnote 9] would
require the filing of over three hundred separate claims in
fourteen different counties to protect the single federal claim
asserted by appellant. [
Footnote
10] The third remedy, suit for refund after payment, is
applicable only to taxes payable directly to the State and
amounting to less than 15% of the total taxes in controversy.
[
Footnote 11] We cannot say
that the remedies suggested by the Attorney General afford
appellant the "plain, speedy and efficient remedy" necessary to
deprive the District Court of jurisdiction under 28 U.S.C. (Supp.
IV) § 1341.
Second. Passing to the jurisdictional ground upon which
the District Court rested its decision, we note that
Page 342 U. S. 304
the Georgia was not named as a party in the District Court. But,
since appellee is a state officer, the court below properly
considered whether the relief sought against the officer is not, in
substance, sought against the sovereign. [
Footnote 12] If this action is, in effect, an
unconsented suit against the State, the action is barred. [
Footnote 13]
The District Court characterized appellant's action as one to
enforce an alleged contract with the Georgia, and, as such, a suit
against the State. But appellant's complaint is not framed as a
suit for specific performance. It seeks to enjoin appellee from
collecting taxes in violation of appellant's rights under the
Federal Constitution. This Court has long held that a suit to
restrain unconstitutional action threatened by an individual who is
a state officer is not a suit against the State. [
Footnote 14] These decisions were
reexamined and reaffirmed in
Ex parte Young, 209 U.
S. 123 (1908), and have been consistently followed to
the present day. [
Footnote
15] This general rule has been applied in suits against
individuals threatening
Page 342 U. S. 305
to enforce allegedly unconstitutional taxation, including cases
where, as here, it is alleged that taxation would impair the
obligation of contract.
Gunter v. Atlantic Coast Line R.
Co., 200 U. S. 273
(1906);
Pennoyer v. McConnaughy, 140 U. S.
1 (1891);
Allen v. Baltimore & O. R. Co.,
114 U. S. 311,
114 U. S. 330
(1885).
In re Ayers, 123 U. S. 443
(1887), relied upon below, is not a contrary holding. In that case,
complainant had not alleged that officers threatened to tax its
property in violation of its constitutional rights. As a result,
the Court held the action barred as one in substance directed at
the State merely to obtain specific performance of a contract with
the State. [
Footnote 16]
Since appellant seeks to enjoin appellee from a threatened and
allegedly unconstitutional invasion of its property, we hold that
this action against appellee as an individual is not barred as an
unconsented suit against the State. [
Footnote 17] The State is free to carry out its functions
without judicial interference directed at the
Page 342 U. S. 306
sovereign or its agents, but this immunity from federal
jurisdiction does not extend to individuals who act as officers
without constitutional authority.
Accordingly, we find that the District Court was not deprived of
jurisdiction in this case on either the ground that it is a suit
against the State or that "plain, speedy and efficient" remedies
are available to appellant in the state courts. Since the District
Court did not determine whether appellee was bound by the
Wright decree, and did not address itself to the merits of
appellant's claim, we do not pass upon these questions, but remand
the case to the District Court for further proceedings.
Reversed and remanded.
[
Footnote 1]
Ga.Laws 1833, pp. 256, 264.
[
Footnote 2]
Ga.Const. Art. I, § III, par. III.
See Ga.Laws 1945,
No. 34, pp. 8, 14.
[
Footnote 3]
Ga.Code Ann.1937, cc. 92-26, 92-27, 92-28, as amended, contains
the taxation provisions which appellee is allegedly threatening to
invoke against appellant.
[
Footnote 4]
"No State shall . . . pass any Bill of Attainder, ex post facto
Law, or Law impairing the Obligation of Contracts. . . ."
U.S.Const. Art. I, § 10, cl. 1.
[
Footnote 5]
The cases concerning this exemption that have reached this Court
are collected in
Atlantic Coast Line R. Co. v. Phillips,
332 U. S. 168,
332 U. S. 173
(1947).
[
Footnote 6]
Required under 28 U.S.C. (Supp. IV) §§ 2281, 2284.
Query v.
United States, 316 U. S. 486
(1942).
[
Footnote 7]
"The Judicial power of the United States shall not be construed
to extend to any suit in law or equity, commenced or prosecuted
against one of the United States by Citizens of another State or by
Citizens or Subjects of any Foreign State."
U.S.Const. Amend. XI.
[
Footnote 8]
"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."
[
Footnote 9]
208 Ga. at 272, 66 S.E.2d at 241.
[
Footnote 10]
Compare Greene v. Louisville & Interurban R. Co.,
244 U. S. 499,
244 U. S. 520
(1917),
with Matthews v. Rodgers, 284 U.
S. 521,
284 U. S.
529-530 (1932).
See also Graves v. Texas Co.,
298 U. S. 393,
298 U. S. 403
(1936).
[
Footnote 11]
An adequate remedy as to only a portion of the taxes in
controversy does not deprive the federal court of jurisdiction over
the entire controversy.
Greene v. Louisville & Interurban
R. Co., note 10
supra. See Hillsborough v. Cromwell, 326 U.
S. 620,
326 U. S.
629.
It was also suggested that appellant's federal claim could be
raised in defense to a suit brought by appellee to recover taxes,
but this is hardly a remedy that could have been invoked by
appellant.
[
Footnote 12]
Larson v. Domestic & Foreign Commerce Corp.,
337 U. S. 682,
337 U. S.
687-688 (1949);
In re Ayers, 123 U.
S. 443 (1887).
[
Footnote 13]
Appellant is incorporated in Georgia, and a suit by it against
the Georgia is not expressly barred by the language of the Eleventh
Amendment. Nevertheless, a federal court may not entertain the
action if it is a suit against the State.
Hans v.
Louisiana, 134 U. S. 1
(1890).
[
Footnote 14]
Gunter v. Atlantic Coast Line R. Co., 200 U.
S. 273 (1906);
Prout v. Starr, 188 U.
S. 537 (1903);
Smyth v. Ames, 169 U.
S. 466,
169 U. S.
518-519 (1898);
Tindal v. Wesley, 167 U.
S. 204 (1897);
Reagan v. Farmers' Loan & Trust
Co., 154 U. S. 362
(1894);
Pennoyer v. McConnaughy, 140 U. S.
1 (1891), and numerous cases cited therein.
[
Footnote 15]
Alabama P.S.C. v. Southern R. Co., 341 U.
S. 341,
341 U. S. 344
(1951);
Sterling v. Constantin, 287 U.
S. 378,
287 U. S. 393
(1932), and cases cited therein;
Greene v. Louisville &
Interurban R. Co., note
10 supra, at
244 U. S. 507,
and cases cited therein.
See Larson v. Domestic & Foreign
Commerce Corp., note 12
supra, at
337 U. S.
690-691,
337 U. S.
704.
Appellant in this case merely seeks the cessation of appellee's
allegedly unconstitutional conduct, and does not request
affirmative action by the State.
Compare Ford Motor Co. v.
Department of Treasury, 323 U. S. 459,
323 U. S.
462-463 (1945);
Great Northern Life Ins. Co. v.
Read, 322 U. S. 47,
322 U. S. 50-51;
North Carolina v. Temple, 134 U. S.
22 (1890);
Hagood v. Southern, 117 U. S.
52 (1886).
[
Footnote 16]
That there is no inconsistency between the decision in
Ayers and the cases above cited is shown by the careful
differentiation of
Allen v. Baltimore & O. R. Co.,
supra, an opinion also written by Mr. Justice Matthews.
See also Pennoyer v. McConnaughy, note 14 supra.
[
Footnote 17]
The fact that the Georgia Supreme Court has considered that
appellee acts with official immunity does not, of course, impart
immunity from responsibility to the supreme federal authority.
Ex parte Young, supra, at
209 U. S. 167.
See also Graves v. Texas Co., note 10 supra, at
298 U. S.
403-404.
We do not find it necessary to consider whether the Georgia had
submitted itself to the jurisdiction of the District Court in the
Wright litigation. Unlike
Gunter v. Atlantic Coast
Line R. Co., supra, where additional parties were brought into
the second action, appellant has limited its complaint to a request
for relief against appellee alone.
MR. JUSTICE DOUGLAS, concurring.
It is my view that appellant's suit is, in reality, against the
Georgia to enjoin a breach of contract. It is the same contract
that was involved in
Wright v. Georgia R. & Banking
Co., 216 U. S. 420. In
that case, the Court held that the Contract Clause of the
Constitution barred Georgia from breaching her agreement granting
appellant tax immunity by legislative act.
The suit in the
Wright case was against a state
officer. But the Attorney General appeared and defended the case on
the merits. It is clear to me that the Attorney General represented
and spoke for the interests of Georgia in the lower court and in
this Court. The Georgia Constitution and statutes authorized the
Governor to allow the Attorney General to defend suits involving
the State's interests.
See Ga.Code of 1895, §§ 23, 220;
Ga.Const. of 1877, Art. VI, § X, par. II, Code, § 2-3802. The
decree that was entered adjudicated the rights of Georgia,
declaring her bound by the contract, stating that the Acts of the
Georgia Legislature involved in the litigation were "a valid and
binding contract between the Georgia"
Page 342 U. S. 307
and the present appellant. There were no special circumstances,
as in
Land v. Dollar, 330 U. S. 731,
that would keep the suit from being
res judicata against
the State.
I would conclude that Georgia is bound by the decree in the
Wright case. Therefore, relief is now available in the
form of an ancillary exercise of the District Court's equity
jurisdiction to protect appellant's rights secured under the prior
decree.
Gunter v. Atlantic Coast Line R. Co., 200 U.
S. 273.