Talladega County Commission et al v. City of Lincoln et al
MEMORANDUM OPINION Signed by Chief Judge Karon O Bowdre on 9/27/16. (SAC )
2016 Sep-27 AM 11:42
U.S. DISTRICT COURT
N.D. OF ALABAMA
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
COMMISSION, et al.,
CITY OF LINCOLN, et al.,
CASE NO.: 1:15-cv-2337-KOB
Nothing is certain in this world except death, taxes, and disputes about taxes.
The Talladega County Commission and four individual Plaintiffs filed an amended
complaint against the City of Lincoln, alleging under § 1983 that Lincoln subjected residents
within its police jurisdiction to “taxation without representation” and caused Talladega County to
lose sales taxes revenue. Additionally, two of the individual Plaintiffs allege under § 1983 that
Lincoln deprived them of property without due process of law when it issued a stop order that
delayed the construction of chicken houses on their farm. Now Lincoln–the only remaining
defendant–has filed a motion to dismiss the amended complaint. (Doc. 21). Because the court
lacks subject-matter jurisdiction over the first count of the action and the second count fails to
state a claim upon which relief can be granted, the court GRANTS Lincoln's motion.
STANDARD OF REVIEW
Federal courts are courts of limited jurisdiction. See Kokkonen v. Guardian Life Ins. Co.
of America, 511 U.S. 375, 377 (1994). The court “must have at least one of three types of subject
matter jurisdiction to entertain a cause of action: (1) jurisdiction under a specific statutory grant;
(2) federal question jurisdiction pursuant to 28 U.S.C. § 1331; or (3) diversity jurisdiction
pursuant to 28 U.S.C. 1332(a).” Baltin v. Alaron Trading Corp., 128 F.3d 1466, 1469 (11th Cir.
1997). Under Rule 12(b)(1), a party may assert a defense that the court lacks subject-matter
jurisdiction over the action. If a court determines it is without jurisdiction, “the court is powerless
to continue.” Univ. of S. Ala. v. Am. Tobacco Co., 168 F.3d 405, 410 (11th Cir. 1999).
A Rule 12(b)(6) motion to dismiss attacks the legal sufficiency of the complaint.
Generally, the Federal Rules of Civil Procedure require only that the complaint provide “‘a short
and plain statement of the claim’ that will give the defendant fair notice of what the plaintiff’s
claim is and the grounds upon which it rests.” Conley v. Gibson, 355 U.S. 41, 47 (1957) (quoting
Fed. R. Civ. P. 8(a)). A plaintiff must provide the grounds of his entitlement, but Rule 8
generally does not require “detailed factual allegations.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 555 (2007) (quoting Conley, 355 U.S. at 47). It does, however, “demand[ ] more than an
unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal 556 U.S. 662,
The Supreme Court explained that “[t]o survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its
face.’” Iqbal, 556 U.S. at 678 (quoting and explaining its decision in Twombly, 550 U.S. at 570).
To be plausible on its face, the claim must contain enough facts that “allow[ ] the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S.
at 678. A complaint need only state “a plausible claim for relief” to survive a motion to dismiss.
Id. at 679. If the court determines that well-pleaded facts, accepted as true, do not state a claim
that is plausible, the claim must be dismissed. Id.
STATEMENT OF FACTS
Lincoln is a municipal corporation located in Talladega County, Alabama. Because
Lincoln’s population exceeds 6,000, its police jurisdiction extends three miles past its corporate
limits. See Ala. Code. § 11-51-206 (1975). In October of 2007, Lincoln imposed a five-percent
sales tax within its city limits and a two-and-a-half-percent sales tax within its police jurisdiction.
Talladega County Commission is the governing body of Talladega County, Alabama. The
County imposes a two-percent sales taxes in those areas outside the corporate limits of the cities
located in Talladega County and a one-percent sales tax in the areas within a municipality's
police jurisdiction. Because the County only imposes a one-percent sales tax in the areas within
Lincoln’s police jurisdiction, Talladega County claims the State of Alabama’s annexation, police
jurisdiction, and tax laws permit Lincoln to “purposefully limit” Talladega County to collecting a
one-percent sales tax in Lincoln's police jurisdiction while Lincoln collects a two-and-a-halfpercent sales tax in its police jurisdiction without an obligation to provide services to the area.
Additionally, a substantial portion of residents within Lincoln's police jurisdiction are also
residents of Talladega County. The County provides governmental services to residents in that
Along with Talladega County, four individual plaintiffs have sued Lincoln. Robbie
Angles and Lori Angles are residents and registered voters in Talladega County. The Angleses
live on a farm outside of Lincoln’s corporate limits but within Lincoln’s police jurisdiction.
Because the Angleses do not reside within Lincoln's corporate limits, they are not permitted to
vote in elections for Lincoln's city council. The Angleses claim they pay sales taxes to Lincoln on
transactions within the police jurisdiction but receive no services from Lincoln.
Plaintiffs Angela Boozer and Thomas Martin are residents and registered voters in
Talladega County. Mr. Boozer and Ms. Martin reside in an area known as Lincoln Harbor, which
is outside Lincoln's corporate limits. Lincoln “elect[ed] not to exercise any jurisdiction or
authority, including the assessment of any tax” over Lincoln Harbor on October 13, 2015. (Doc.
21-3). However, prior to that time Lincoln imposed a sales tax on transactions conducted in the
area. Like the Angles, Boozer and Martin also claim that they received no governmental services
from the sales taxes Lincoln imposed.
Lincoln's tax scheme does not violate state law. Alabama Code § 11-40-10(a)(1) provides
that “[t]he police jurisdiction in municipalities having 6,000 or more inhabitants shall cover all
adjoining territory within three miles of the corporate limits . . ..” Ala. Code § 11-40-10(a)(1). As
a municipality, the City may impose a sales tax in the areas within its police jurisdiction. See Ala.
Code § 11-51-206. The statute provides that:
The council or other governing body shall have the authority to levy and assess by
ordinance within the police jurisdiction of any municipality or town all taxes
authorized by this article; provided, that the levy and assessment shall not exceed
one-half the amount levied and assessed for like businesses, sales or uses
conducted within the corporate limits, fees and penalties excluded.
Id. Further, Alabama law provides that municipalities may levy sales tax alongside the state's
assessment of sales tax. See Ala. Code § 11-51-200. Lincoln exercised its authority to levy a
sales tax in areas within its police jurisdiction but outside its corporate limits.
In addition to the claims made by the other Plaintiffs, the Angleses also allege in Count II
of the amended complaint that Lincoln deprived them of property without due process of law
when it delayed the completion of construction of chicken houses on their farm. In early January
of 2014, when the building project was approaching completion, Lincoln notified the Angleses
that they were required to have a permit to engage in construction on the property. Lincoln issued
a stop order that delayed completion of the project. The Angleses' construction project was not
within Lincoln’s corporate limits. Lincoln's building permit ordinance did not explicitly state that
it applied within its police jurisdiction. The Angleses were not afforded any opportunity to
oppose Lincoln’s stop work order before it was issued.
The Angleses paid $453.27 on February 5, 2014 and $4,193.62 on February 27, 2014 to
Lincoln to obtain a release from the stop-work order. As a result of the delay, the Angleses claim
they suffered $35,932.39 in lost business income.
The Plaintiffs’ filed a two-count amended complaint against Lincoln. In Count I, the
Talladega County Commission and the individual Plaintiffs assert a claim under 42 U.S.C. §
1983 against Lincoln, contending that its tax scheme violates the Equal Protection Clause of the
Fourteenth Amendment. Additionally, Plaintiffs Robbie Angles and Lori Angles assert another §
1983 claim in Count II, alleging that Lincoln deprived them of property without due process of
law when it delayed the completion of construction of the chicken homes on their farm. Neither
claim can survive Lincoln's motion to dismiss.
Count I: Challenge to Lincoln's Power to Collect Sales Taxes Within its
The court will first address whether it has jurisdiction over the Plaintiffs's claims. Lincoln
argues that “every single claim of every single Plaintiff must be dismissed based upon the
jurisdictional bar contained in 28 U.S.C. § 1341.” (Doc. 21-1 at 9). The statute, known as the Tax
Injunction Act, provides that “[t]he 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. Importantly, the Tax
Injunction Act “does not confer jurisdiction, but instead limits jurisdiction that might otherwise
exist.” Osceola v. Fla. Dep’t of Revenue, 893 F.2d 1231, 1232 (11th Cir. 1990) (emphasis
added). The act bars suits for declaratory relief as well as injunctions. Id. at 1233 (citing Great
Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293 (1943)).1
Given the broad sweep of the statute, this case would appear open and shut. The Tax
Injunction Act bars federal courts from granting declaratory relief against administration of state
taxes. In the Plaintiffs's first count, they challenge the administration of a tax scheme enabled by
state law. Therefore, the Tax Injunction Act bars the Plaintiffs's claim. However, the Plaintiffs
resist this simple syllogism with two arguments against the Tax Injunction Act's applicability to
First, the Plaintiffs assert that “the most compelling precedent favoring the [c]ourt’s
jurisdiction is the Holt case itself.” (Doc. 24 at 12). The Plaintiffs's theory is that the United
States Supreme Court in Holt Civic Club v. City of Tuscaloosa expressly determined that the
district court had jurisdiction to resolve the issues in that case, and the “Holt decision controls the
jurisdictional issue in this case.” (Doc. 24 at 13). The Plaintiffs reason that, because the Tax
Injunction Act did not bar the plaintiffs in Holt, it should not restrain the Plaintiffs in this case as
An even more stringent limitation on federal jurisdiction exists to hear damages actions
that allege an illegal tax scheme. See Fair Assessment in Real Estate Ass'n, Inc. v. McNary, 454
U.S. 100, 107 (1981) (“[W]e decide today that the principle of comity bars federal courts from
granting damages relief in such cases.”)
“[p]rocedurally, this case is almost identical.” (Doc. 24 at 13).
But Holt and the Plaintiff's claims are distinct in a critical way. Holt did not involve a
challenge to Tuscaloosa’s imposition of a tax on Holt residents, which is why the Tax Injunction
Act was never mentioned by the Court. See Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60,
67 (1978). In Holt, the residents of the unincorporated community of Holt, Alabama located
within the police jurisdiction of Tuscaloosa, Alabama filed a state-wide class action challenging
the constitutionality of Tuscaloosa’s extraterritorial exercise of police powers over Holt residents
when Holt residents were not allowed to vote in Tuscaloosa elections. Id. at 61–62. The Holt
residents were not challenging Tuscaloosa’s levy of sales taxes on Holt residents. Id. at 77.
Tuscaloosa did not tax the residents of Holt. Id. Instead, the Holt residents were challenging the
subjugation of Holt to Tuscaloosa police power and sanitary regulations. See id. at 67
(“Appellants focus their equal protection attack on . . . the statute fixing the limits of municipal
police jurisdiction and giving extraterritorial effect to municipal police and sanitary
ordinances.”). The plaintiffs were not challenging Tuscaloosa's ability to tax but rather its power
to regulate.2 Thus, Holt does not support this court's exercise of jurisdiction in this case that
specifically challenges the tax imposed by Lincoln.
The Plaintiffs's second argument is that the Tax Injunction Act is inapplicable because
they are not afforded a plain, speedy, and efficient remedy to challenge the tax by the state. A
state remedy is plain, speedy, and efficient if it provides the taxpayer with a full hearing and
The Plaintiffs concede as much in their brief's conclusion when attempting to distinguish
Holt's substantive holding from this case: “This case is factually different from Holt Civic Club .
. . [which] dealt with exercise of Lincoln's police power. The sales tax at issue here is not
regulatory, but is instead a revenue-generating tax.” (Doc. 24 at 27) (citations and emphasis
judicial determination at which the taxpayer may raise constitutional objections to the tax. See
Melof v. Hunt, 718 F. Supp. 877, 880 (M.D. Ala. 1989) (citing California v. Grace Brethren
Church, 457 U.S. 393, 411–12 (1982)). The remedy is not required to “be the best remedy
available or even equal to or better than the remedy which might be available in the federal
courts.” Kelly v. Ala. Dept. of Rev., 638 Fed. Appx. 884, 890 (11th Cir. 2016) (quoting Bland v.
McHann, 463 F.2d 21, 29 (5th Cir 1972); see also. Nat'l Private Truck Council, Inc. v. Oklahoma
Tax Comm'n, 515 U.S. 582, 587 (1995) (“States are afforded great flexibility in satisfying the
requirements of due process in the field of taxation.”). The “plain, speedy, and efficient”
exception is construed narrowly; the burden is on the taxpayer to demonstrate that it applies. See
Amos v. Glynn Cty. Bd. of Tax Assessors, 347 F.3d 1249, 1255–56 (11th Cir. 2003).
The Plaintiffs contend that Alabama's requirement that a merchant and a buyer file a joint
challenge to collection of a sales tax renders the remedy provided by the state inadequate because
if a merchant goes out of business or refuses to cooperate with a buyer's attempt to seek a refund,
the buyer cannot seek administrative review under the state's procedure. See Ala. Code. § 40-2A1 (1975).
Alabama law provides remedies that are plain, speedy, and efficient. Even if the
requirement of a joint petition somehow rendered the Plaintiffs's administrative appeals
impracticable, the Plaintiffs were still free to seek judicial review of their case in Alabama state
court by filing a declaratory judgement action. See Kelly, 638 Fed. Appx. at 891 (finding
Alabama's Declaratory Judgement Act provides a plain, speedy, and efficient remedy to
challenge state tax administration); see also Gibbs v. Cochran, 198 So. 2d 607, 608 (Ala. 1967)
(“We have said that controversies touching the legality of acts of public officials or public
agencies challenged by parties whose interests are adversely affected is one of the favored fields
for declaratory judgment.”).
Alabama law provides the Plaintiffs with remedies that give them a meaningful
opportunity to present their legal objections to the tax. In a declaratory judgement action, the
Plaintiffs's could have presented their constitutional concerns about Lincoln collecting sales tax
from transactions within its police jurisdiction but outside of its city limits to a court. If the
Plaintiffs were unsatisfied by the decision of lower Alabama courts, they could have presented
their arguments to the Alabama Supreme Court and then, if the Alabama Supreme Court did not
find in their favor, to the United States Supreme Court. See Rosewell v. LaSalle Nat. Bank, 450
U.S. 503, 512–15 (1981) (finding that such a procedure satisfied the requirement of providing
taxpayers a plain, speedy, and efficient remedy). In doing so, the Plaintiffs would have received a
“full hearing and judicial determination.” See id. at 514.
The Plaintiffs argue that a declaratory judgment action was available to the taxpayers in
Holt, and yet the federal court properly exercised jurisdiction over that action. However, as
previously discussed, Holt did not involve a challenge to administration of a state tax that would
have brought the case within the orbit of the Tax Injunction Act.
The Plaintiffs also argue that Alabama has foreclosed declaratory relief because it
requires compliance with the state's administrative scheme to sue for a refund. However, the
Plaintiffs were still free to challenge the validity of the tax in state court in a declaratory
judgment action. A state is free to place restrictions on a taxpayer's ability to sue for a refund, and
Alabama's restrictions have previously been upheld by the Eleventh Circuit. See Kelly, 638 Fed.
Appx at 891 (noting that a “state scheme requiring a taxpayer to pay the contested tax and then
seek a refund through state administrative and judicial procedures was deemed sufficient by the
Supreme Court”). Here, the Plaintiffs do not seek a refund but challenge the validity of the tax
itself–a dispute within the “favored field for declaratory judgment.” See Gibbs, 198 So. 2d at
Further, the burden is on the taxpayer to demonstrate the inadequacy of the state's
remedy. See Amos, 347 F.3d at 1255–56. The Plaintiffs do not carry that burden. The Plaintiffs
speculate about the effect of Alabama's procedural requirements but cannot prove anything, even
if every factual allegation contained in the complaint is assumed to be true. The Plaintiffs do not
allege that they have been unable to file a request for a refund with the state because of
As a matter of comity, when a plaintiff has not “availed itself of the administrative
remedies afforded” by state statute, federal jurisdiction is not appropriate. See First Nat. Bank of
Greeley v. Bd. of Comm'rs, 264 U.S. 450, 456 (1924); see also Fair Assessment in Real Estate
Ass'n, Inc. v. McNary, 454 U.S. 100, 137 (1981) (Brennan, J., concurring) (“Where
administrative remedies are a precondition to suit for monetary relief in state court . . . those
remedies should be deemed a precondition to suit in federal court as well.”). Requiring
compliance with state procedures ensures that a federal court is not required to speculate about
what relief is available under state law but may base its judgment on a real record. Given the
sparse evidence in support of the state's remedy being inadequate, the court does not find a
sufficient showing to overcome the “broad jurisdictional barrier” of the Tax Injunction Act. I.L.
v. Alabama, 739 F.3d 1273, 1282 (11th Cir. 2014).
Because the court lacks subject-matter jurisdiction over the first count of the complaint, it
GRANTS Lincoln Motion to Dismiss Count I of the amended complaint WITHOUT
Count II: Procedural Due Process Challenge to Lincoln's Stop Order
Lincoln argues that all of the Plaintiffs's claims are barred from being heard in federal
court by the Tax Injunction Act. However, the Plaintiffs's second count does not attempt to
restrain collection of a state tax. Rather, the Plaintiffs allege that Lincoln deprived them of
property without due process when it issued an order to stop construction on their property.
Accordingly, the Plaintiffs's claims arise under federal law because they invoke the Equal
Protection Clause of the Fourteenth Amendment. Because the court has jurisdiction over this
action under 28 U.S.C. § 1331, the court proceeds to consider whether the Plaintiffs have stated a
claim upon which this court can grant relief.
The Plaintiffs contend that Lincoln's building code ordinance had no effect in areas that
were outside Lincoln limits but within the police jurisdiction. The Plaintiffs's argument centers
on the fact that Lincoln's ordinance at the time did not say that it applied within its police
jurisdiction. However, Alabama law presumes city ordinances to apply within a municipality's
police jurisdiction. See Ala. Code. § 11-40-10 (1975).3 The ordinance's silence does not limit its
application. Lincoln was in full compliance with Alabama state law in extending its building
permit regulations to its police jurisdiction. See City of Robertsdale v. Baldwin Cty., 538 So. 2d
33 (Ala. Civ. App. 1988) (finding a building permit ordinance to be a “police regulation” for
§ 11-40-10 has been amended twice since Lincoln issued a stop order to the Plaintiffs to
halt their construction. At the time the order was issued, the statute read: “Ordinances of a city or
town enforcing police or sanitary regulations and prescribing fines and penalties for violations
thereof shall have force and effect in the limits of the city or town and in the police jurisdiction
thereof and on any property or rights-of-way belonging to the city or town.” (emphasis added).
purposes of § 11-40-10). Therefore, Lincoln did not violate the Plaintiffs's rights by failing to
properly follow state law.
The Plaintiffs also argue they were denied due process to challenge Lincoln's stop order.
The Plaintiffs concede that they had an opportunity for a post-deprivation hearing challenging
Lincoln's order but contend that such a hearing was constitutionally inadequate. Rather, the
Plaintiffs argue that because Lincoln's order directly affected their livelihood, they were entitled
to a pre-deprivation hearing.
First, Lincoln does not appear to have deprived the Plaintiffs of a protected interest. Put
simply, the Plaintiffs do not have a property interest in a licence they never obtained, and the
Plaintiffs do not have a liberty or property interest in building without a permit. See Regents of
State Colleges v. Roth, 408 U.S. 564, 577 (1972) (“[Property interests] are created and their
dimensions are defined by existing rules or understandings that stem from an independent source
such as state law.”). Without a protected interest, the Plaintiffs do not have a procedural due
Even if the court presumes an interest, the Plaintiffs fail to show that the remedies
provided by Lincoln or under state law were inadequate. This failure proves fatal. See Rymer v.
Douglas Cty., 764 F.2d 796, 803 (11th Cir. 1985) (“[A] plaintiff cannot bring a property claim
against a governmental body if the governmental body being sued provides a meaningful
post-deprivation remedy.”); Flagship Lake Cty. Dev. Number 5 v. City of Mascotte, 559 Fed.
App'x 811, 815 (11th Cir. 2014) (“Again and again, this Court has repeated the basic rule that a
procedural due process claim can exist only if no adequate state remedies are available.”). The
Plaintiffs have remedies under state law; they just elected not to exercise them.
The Plaintiffs could file a declaratory judgment action or petition for a writ of mandamus,
both of which are remedies that adequately protected their interests. See Kelly, 638 Fed. Appx. at
891 (finding declaratory judgement adequate); Cotton v. Jackson, 216 F.3d 1328, 1332–33 (11th
Cir. 2000) (finding mandamus adequate). The Plaintiffs could have sought to recover the
damages now they seek in the remedies provided by the state. The Plaintiffs may have failed to
take advantage of those remedies, but they may not now “rely on that failure to claim that the
state deprived [them] of procedural due process.” Cotton, 216 F.3d at 1331.
In support of the Plaintiffs's claim that they were entitled to a pre-deprivation hearing,
they cite to Bell v. Burson, 402 U.S. 535 (1971), a case where the Supreme Court held that predeprivation hearing was required to suspend a driver's licence. However, the circumstances of
Bell and this case are entirely different. In Bell, the plaintiff had previously obtained a driver's
license–an interest–the state then sought to revoke. Here, the Plaintiffs did not obtain a building
permit, which is the very reason why Lincoln issued the stop order. The Plaintiffs would have
required Lincoln to notify them that it intended to order them to stop building without a permit.
This reasoning would require an officer who stops a person who is driving without a licence to
provide notice and a hearing before preventing him from driving further down the road.
Accordingly, a pre-deprivation hearing is not required in the case of an “interim
suspension.” See Barry v. Barchi, 443 U.S. 55, 64 (1979) (upholding summary suspension of a
horse trainer's license without pre-suspension hearing). The Plaintiffs invoke misplaced reliance
on precedents where the deprivation was final. See Logan v. Zimmerman Brush Co., 455 U.S.
422, 433 (1982) (noting that a hearing is “required before the owner is finally deprived of a
protected property interest”) (emphasis added).
A stop order functions like an interim suspension of a license; it is not a permanent
deprivation of a right but rather a temporary restriction. Therefore, even assuming that the
Plaintiffs had an interest that warranted due process protection, Lincoln accorded the Plaintiffs
sufficient due process in the form of a post-depravation hearing.
Because the Plaintiffs's second count fails to state a claim upon which the court can grant
relief, the court GRANTS Lincoln's Motion to Dismiss Count II of the amended complaint
The court GRANTS the Lincoln's Motion to Dismiss the Plaintiffs's first count
WITHOUT PREJUDICE and the second count WITHOUT PREJUDICE. (Doc. 21).
DONE this the 27th Day of September, 2016.
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE
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