HOMEWOOD VILLAGE LLC et al v. UNIFIED GOVERNMENT OF ATHENS-CLARKE COUNTY GEORGIA
Filing
19
ORDER denying 4 Motion to Dismiss for Lack of Subject Matter Jurisdiction; denying 14 Motion for Sanctions; and denying 17 Motion for Sanctions. Ordered by US DISTRICT JUDGE CLAY D LAND on 09/18/2015 (vac).
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
ATHENS DIVISION
*
HOMEWOOD VILLAGE, LLC, a
Georgia limited liability
company, HANCOCK PULASKI
PROPERTIES, INC., a Georgia
corporation, TIFFANY & TOMATO,
INC., a Georgia corporation,
BAXTER HARRIS INC., a Georgia
corporation, OLD SOUTH
INVESTMENT ENTERPRISES, LLC, a
Georgia limited liability
company, LUIS BONET,
individually,
Plaintiffs,
*
*
*
*
*
CASE NO. 3:15-CV-23 (CDL)
*
*
vs.
*
UNIFIED GOVERNMENT OF ATHENSCLARKE COUNTY,
*
*
Defendant.
O R D E R
The Unified Government of Athens-Clarke County
(“Athens-
Clarke”) enacted an ordinance that imposes a charge on property
owners for a stormwater management program.
Plaintiffs, who
have been assessed with charges under the ordinance, allege in
their Complaint that the charge is an unconstitutional tax, and
that by collecting the unconstitutional tax, Athens-Clarke is
violating their rights under the Takings Clause of the Fifth
Amendment and the Due Process Clause and Equal Protection Clause
of the Fourteenth Amendment to the United States Constitution.
Homewood Village, LLC and Luis Bonet bring these claims pursuant
to 42 U.S.C. § 1983, and the remaining Plaintiffs assert their
claims under the Declaratory Judgment Act.
Presently pending
before the Court is Athens-Clarke’s motion to dismiss for lack
of subject matter jurisdiction pursuant to the Tax Injunction
Act, 28 U.S.C. § 1341 (“TIA”).
stormwater
ordinance
imposes
The Court concludes that the
a
user
purposes of the Tax Injunction Act.
fee
and
not
a
tax
for
Athens-Clarke’s motion (ECF
No. 4) is therefore denied.
The parties also have filed motions for sanctions (ECF Nos.
14 and 17).
Those motions are also denied.
STANDARD
“Attacks on subject matter jurisdiction under [Federal Rule
of Civil Procedure] 12(b)(1) come in two forms: ‘facial attacks’
and ‘factual attacks.’”
Garcia v. Copenhaver, Bell & Assocs.,
M.D.’s, P.A., 104 F.3d 1256, 1260 (11th Cir. 1997) (quoting
Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990) (per
curiam)).
A facial attack “require[s] the court merely to look
and see if [the] plaintiff has sufficiently alleged a basis of
subject
matter
jurisdiction,
and
the
allegations
in
his
complaint are taken as true for the purposes of the motion.”
Lawrence,
919
F.2d
at
1529
(second
alteration
in
original)
(quoting Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511
(5th
Cir.
1980)).
“‘Factual
attacks,’
2
on
the
other
hand,
challenge ‘the existence of subject matter jurisdiction in fact,
irrespective
of
the
pleadings,
and
matters
outside
the
pleadings, such as testimony and affidavits, are considered.’”
Id. (quoting Menchaca, 613 F.2d at 511).
“no
presumptive
allegations.”
truthfulness
With factual attacks,
attaches
to
plaintiff’s
Garcia, 104 F.3d at 1261 (quoting Lawrence, 919
F.2d at 1529).
This motion involves a factual attack.
In factual attacks,
the Court may proceed under Rule 12(b)(1) only if the “facts
necessary to sustain jurisdiction do not implicate the merits of
plaintiff’s
cause
jurisdictional
of
issue
action.”
in
Id.
to
resolve
dispute,
this
Here,
the
Court
need
the
only
consider (1) whether the stormwater charge is a tax, as defined
by federal law, and if so (2) whether an adequate remedy exists
through the state courts.
See 28 U.S.C. § 1341.
The Court does
not need to reach the merits of Plaintiffs’ claims—whether the
stormwater
charge
violates
the
Fifth
Amendment
or
Fourteenth
Amendment—to decide whether it has jurisdiction to hear those
claims.
BACKGROUND
Athens-Clarke
prevents
depositing
has
a
stormwater
rainfall
runoff
those
pollutants
Athens-Clarke
originally
from
collecting
into
funded
3
management
nearby
the
program
that
pollutants
and
lakes
stormwater
and
rivers.
program
with
general revenue that it received from all taxpayers.
Athens-Clarke
County
concluded
that
its
general
In 2003,
revenue
fund
could not support the cost of the stormwater management program.
Consequently,
which
it
imposes
a
adopted
a
charge
on
stormwater
non-exempt
management
owners
property to fund the stormwater program.
of
ordinance,
developed
Athens-Clarke bases
the charge on the amount of stormwater that runs off each parcel
of
property.
Thus,
the
ordinance
imposes
a
fee
on
certain
citizens based on their alleged contribution to the runoff of
stormwater.
Plaintiffs are owners of non-exempt developed property in
Athens, Georgia.
They have refused to pay the stormwater charge
because they allege that the stormwater management program does
not provide them with any benefit that is not shared by the
general population.1
Plaintiffs complain that only owners of
developed property pay for the stormwater program, while all
members of the community benefit from it.
Plaintiffs point to
several sections of the stormwater ordinance that state that the
program benefits all residents of Athens-Clarke County.
e.g.,
Compl.
¶ 36(g),
ECF
No.
1
(“[P]rovision
of
See,
stormwater
management services . . . results in both service and benefit to
individual properties, property owners, citizens and residents
1
All Plaintiffs originally refused to pay the charge, but Homewood
and Luis Bonet have since paid the charge.
The remaining Plaintiffs
still have not paid the charge.
4
of Athens-Clarke County, and to all properties, property owners,
citizens and residents of Athens-Clarke County . . . .”).
Plaintiff
Homewood
Village,
LLC
also
contends
that
its
property does not even allow for any stormwater to run into the
stormwater management system because of the manner in which its
property
drains.
Nevertheless,
Homewood
for
stormwater
the
Athens-Clarke
runoff
fees.
still
Other
assesses
similarly
situated properties are exempt from the charge, according to
Homewood.
When Homewood refused to pay the stormwater charge, AthensClarke sued in state court to collect the unpaid charges.
In a
counterclaim, Homewood argued that the stormwater charge was an
unconstitutional tax.
The state court found that the ordinance
imposed a fee rather than a tax.
And on appeal, the Georgia
Supreme Court affirmed the trial court’s classification of the
charge as a permissible fee, not a tax.
See Homewood Vill., LLC
v. Unified Gov’t of Athens-Clarke Cty., 292 Ga. 514, 515, 739
S.E.2d 316, 318 (2013).
Additionally, Luis Bonet brings a claim under 42 U.S.C.
§ 1983 alleging that Athens-Clarke refused to renew his liquor
license until he paid his outstanding stormwater charges.
He
contends that the stormwater charge is an unconstitutional tax,
and
that
Athens-Clarke
County
imposed
condition on the renewal of his license.
5
an
unconstitutional
All
charge
Plaintiffs
ask
the
unconstitutional
and
collecting it.
Court
to
to
declare
prohibit
the
stormwater
Athens-Clarke
from
Homewood and Bonet also seek monetary damages.
DISCUSSION
The Tax Injunction Act states: “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.”
U.S.C. § 1341.
28
The Act applies to actions seeking to enjoin the
assessment, levy or collection of a state tax as well as actions
seeking to declare the assessment, levy or collection of state
taxes
unconstitutional.
See
California
v.
Grace
Brethren
Church, 457 U.S. 393, 407-08 (1982); Fair Assessment in Real
Estate
Ass’n,
(explaining
Inc.,
that
v.
the
McNary,
TIA
454
U.S.
prohibits
100,
federal
103
(1981)
courts
from
“render[ing] declaratory judgments as to the constitutionality
of
state
tax
Hallandale,
Injunction
laws.”);
734
Act
constitutional
F.2d
does
Miami
666,
not
claims;
Herald
672
Publ’g
(11th
distinguish
the
jurisdiction to review either
district
Cir.
Co.
v.
1984)
between
courts
City
of
(“The
Tax
statutory
and
are
without
if the dispute concerns a tax
under state law and there is an adequate state remedy.”).
To determine if the Tax Injunction Act applies, the Court
first must
consider whether the stormwater charge is a “tax
6
under State law.”
28 U.S.C. § 1341.
If it is, then the Court
is without jurisdiction to hear the case unless the state courts
lack “a plain, speedy and efficient remedy.”
The
sole
issue
presented
by
Id.
Athens-Clarke’s
motion
is
whether the stormwater charge is a “tax” for purposes of the Tax
Injunction Act.
The Court looks to how federal law defines the
term “tax” to determine if the stormwater charge is a tax.
See
Robinson Protective Alarm Co. v. City of Phila., 581 F.2d 371,
374 (3d Cir. 1978) (“[T]he meaning of the term ‘tax under state
law’ in 28 U.S.C. § 1341 should be determined as a matter of
federal law . . . .”).
The Fifth Circuit has explained:
The classic tax sustains the essential flow of revenue
to the government, while the classic fee is linked to
some regulatory scheme. The classic tax is imposed by
a state or municipal legislature, while the classic
fee is imposed by an agency upon those it regulates.
The classic tax is designed to provide a benefit for
the entire community, while the classic fee is
designed to raise money to help defray an agency’s
regulatory expenses.
Henderson v. Stalder, 407 F.3d 351, 356 (5th Cir. 2005) (quoting
Home Builders Ass’n of Miss. Inc. v. City of Madison, 143 F.3d
1006, 1001 (5th Cir. 1998)).
factor
test
articulated
by
Many courts have used a threethe
First
Circuit
in
San
Juan
Cellular Telephone Co. v. Public Service Commission, 967 F.2d
683, 685 (1st Cir. 1992).
Those factors are: (1) Who imposed
the assessment? (2) Who pays the assessment? (3) Who benefits
from the assessment?
Id.
If a state or municipal legislature
7
imposed the charge on many or most of the citizens and if the
funds
derived
from
the
charge
are
expended
for
public good, then the charge is likely a tax.
the
Id.
general
If these
factors do not decisively provide guidance, then the predominant
factor is the revenue’s ultimate use.
Id.
“When the ultimate
use is to provide a general public benefit, the assessment is
likely a tax, while an assessment that provides a more narrow
benefit
to
the
regulated
companies
is
likely
a
fee.”
Am.
Landfill Inc. v. Stark/Tuscarawas/Wayne Joint Solid Waste Mgmt.
Dist., 166 F.3d 835, 838 (6th Cir. 1999).
Although a state court’s label of a charge as a “tax” or a
“fee”
is
not
dispositive,
“[s]tate
law
determinations
as
to
whether a fee is a tax may still be pertinent or instructive.”
McLeod v. Columbia Cty., 254 F. Supp. 2d 1340, 1345 (S.D. Ga.
2003) (alteration in original); see also Tramel v. Schrader, 505
F.2d 1310, 1315 n.7 (5th Cir. 1975) (“The proper question is not
what the Texas courts have said the Texas legislature meant when
it used the term [taxes] but what Congress meant when it used
the term.”).
The Georgia Supreme Court has already analyzed the
very ordinance at issue here and held that the ordinance imposes
a “user fee” and not a “tax.”
Homewood Vill., 292 Ga. at 515,
739 S.E.2d at 318.
The
Georgia
Supreme
Court’s
decision
was
based
on
its
finding that the Athens-Clarke ordinance imposes a charge based
8
on how much stormwater runoff a given property contributes.
at 515, 739 S.E.2d at 318.
to
owners
of
developed
Id.
For example, the charge applies only
property
(not
owners
of
undeveloped
property) because undeveloped property actually absorbs, rather
than collects, stormwater runoff.
Id.
Also, the cost of the
stormwater service is apportioned based primarily on horizontal
impervious surface area.
Id.
Secondly, the Supreme Court found
that the property owners that pay the charge receive a special
benefit from the stormwater service because the service treats
polluted water on their properties.
Id.
Finally, the Supreme
Court found that the ordinance “allows ‘property owners [to]
reduce the amount of the charge by creating and maintaining
private stormwater management systems . . . .’”
Id. (alteration
in original) (quoting McLeod v. Columbia Cty., 278 Ga. 242, 245,
599
S.E.2d
152,
155
(2004)).
Based
on
these
factors,
the
Georgia Supreme Court concluded that the stormwater charge was a
fee, not a tax.
The
Court
finds
the
Georgia
Supreme
Court’s
analysis
persuasive and notes that the factors relied on by the State
court
are
Cellular.
nearly
identical
to
those
discussed
in
San
Juan
Applying the San Juan Cellular factors to the Athens-
Clarke ordinance, the second factor (who pays the assessment?)
indicates
that
the
stormwater
charge
is
a
fee
because
the
ordinance allegedly charges only those citizens who own property
9
that collects stormwater runoff.
The third factor (who benefits
from the assessment?) also indicates that the ordinance is a
fee, not a tax.
may
receive
runoff,
Although all residents of Athens-Clarke County
some
those
benefit
paying
the
from
the
charge
management
receive
a
of
stormwater
special
benefit.
Therefore, the Court concludes that the Athens-Clarke stormwater
ordinance imposes a user fee, not a tax, for purposes of the Tax
Injunction Act.
Accordingly, the
Act
does not deprive this
Court of subject matter jurisdiction.2
MOTIONS FOR SANCTIONS
The parties have also filed motions for sanctions.
As to
Athens-Clarke’s contention that Plaintiffs’ claims are frivolous
and therefore deserving of sanctions under Federal Rule of Civil
Procedure 11 and 19 U.S.C. § 1927, the Court disagrees for the
reasons discussed above.
denied (ECF No. 14).
Athens-Clarke’s motion is therefore
And while the Court finds Athens-Clarke’s
2
The Court recognizes that it reaches the opposite conclusion of its
sister court regarding a nearly identical ordinance enacted by the
Columbia County Commission.
See McLeod, 254 F. Supp. 2d at 1348
(finding that the stormwater charge established by the Columbia County
ordinance was a tax for purposes of the TIA, and that the court
therefore lacked subject matter jurisdiction).
The Court notes,
however, that the district court in McLeod did not have the benefit of
the Supreme Court of Georgia’s interpretation of the Columbia County
ordinance at the time it issued its decision.
After the district
court remanded the case to state court, the Georgia Supreme Court held
that the Columbia County ordinance was a fee, not a tax. See McLeod,
278 Ga. at 245, 599 S.E.2d at 155.
In fact, the Supreme Court
followed its holding in McLeod when it decided that the Athens-Clarke
stormwater charge challenged in the present case was a fee and not a
tax. See Homewood Vill., 292 Ga. at 514-15, 739 S.E.2d at 318.
10
motion for sanctions unconvincing, the record does not reveal
that
the
motion
substantial
was
made
for
justification.
an
The
improper
Court
purpose
Plaintiffs’ motion for Rule 11 sanctions.
lacked
also
therefore
or
denies
(ECF No. 17).
CONCLUSION
Athens-Clarke’s
motion
to
dismiss
matter jurisdiction is denied (ECF No. 4).
for
lack
of
The parties’ motions
for sanctions (ECF Nos. 14 and 17) are also denied.
concludes with two final observations.
subject
The Court
First, today’s ruling
does not suggest that Plaintiffs will prevail on their claims.
It will take a legal Houdini to make a convincing argument that
the stormwater charge is a fee for purposes of the TIA but a tax
for purposes of analyzing its constitutionality.
Court’s
decision
that
the
TIA
does
not
Second, the
deprive
it
of
jurisdiction does not mean that the Court may not eventually
dismiss
this
action
due
doctrine’ . . . ‘counsels
to
comity
lower
concerns.
federal
The
courts
“‘comity
to
resist
engagement in certain cases falling within their jurisdiction.’
Under
this
doctrine,
‘interfer[ing] . . . with
federal
the
fiscal
courts
refrain
operations
of
the
from
state
governments . . . in all cases where the Federal rights of the
persons could otherwise be preserved unimpaired.’”
Direct Mktg.
Ass’n v. Brohl, 135 S. Ct. 1124, 1133-34 (2015) (all alterations
other than the first in original) (quoting Levin v. Commerce
11
Energy, Inc., 560 U.S. 413, 421-22 (2010)).
But “[u]nlike the
TIA, the comity doctrine is nonjurisdictional.”
Id. at 1134.
Accordingly, the Court may later decide to dismiss this action
out of concern for comity between the federal courts and state
governments or upon finding
that
constitutionally valid user fee.
this
Court
from
exercising
the stormwater charge is a
But the TIA does not prevent
jurisdiction
to
make
these
determinations.3
IT IS SO ORDERED, this 18th day of September, 2015.
S/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA
3
It appears that the factual record in this case is sufficiently
developed for the Court to make a determination of whether this action
should be dismissed due to comity concerns or whether summary judgment
is appropriate as to the constitutionality of the Athens-Clarke
ordinance.
But the Court has not ruled on these issues since
Defendants have not yet presented these precise issues to the Court.
Accordingly, Defendants shall be permitted to file such motions within
21 days of today’s order.
12
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