Coleman et al v. Campbell County Public Library Board of Trustees
RESPONSE in Opposition re MOTION for Order by Charlie Coleman, Erik Hermes, John P. Roth, Jr filed by Campbell County Public Library Board of Trustees. (Attachments: # 1 Exhibit 1 - Resolution Authorizing Library District, # 2 Exhibit 2 - Letter from Asst Atty Gen Carter)(Mando, Jeffrey)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
NORTHERN DIVISION at COVINGTON
CASE NO. 2012-CV-00030
CHARLIE COLEMAN, ET AL.
CAMPBELL COUNTY LIBRARY
BOARD OF TRUSTEES
DEFENDANT CAMPBELL COUNTY LIBRARY
BOARD OF TRUSTEES’ RESPONSE IN OPPOSITION
TO PLAINTIFFS’ MOTION TO ESCROW ALL TAX PAYMENTS
The Defendant, Campbell County Library Board of Trustees, by and through counsel, for
its Response in Opposition to Plaintiffs’ Motion to Escrow all Tax Payments, states as follows:
On January 19, 2012, Plaintiffs filed a Class Action Complaint against the Campbell
County Library Board of Trustees (“the Library”) in Campbell Circuit Court. In their Complaint,
Plaintiffs challenge the ad valorem tax rates imposed by the library since 1994 and seek refunds
on behalf of all property owners in Campbell County. Plaintiffs also assert claims for conversion,
unjust enrichment, and unlawful taking under the 5th and 14th Amendments to the United States
Constitution. When Plaintiffs filed their Complaint, they also filed a Motion seeking an Order
requiring the Library to escrow all payments received in excess of $0.30 per thousand dollars of
assessed property value. On January 23, 2012, Plaintiffs filed a supplemental memorandum
criticizing the Library’s Executive Director for exercising his First Amendment rights by
responding to a media inquiry on the lawsuit published in the Cincinnati Enquirer. On February
1, 2012 the Library timely removed the Campbell Circuit Court action to this Court in light of
the federal constitutional claims asserted in the Complaint.
Plaintiffs’ Motion is styled a “Motion for an Order to Requiring (sic) the Campbell
County Library Board of Trustees to Escrow All tax Payments Received in Excess of $0.30 per
Thousand of Assessed Valuation.” However, when a party is seeking an order to mandatorily
direct the doing of an act, such relief can only be brought through a motion for preliminary
injunction under Fed. R. Civ. P. 65. Because Plaintiffs have not filed for a temporary injunction,
their Motion is improperly pled. And, assuming, arguendo, that Plaintiffs’ Motion can be
converted into a Motion for Preliminary Injunction; they still cannot prevail because they have
not met the burden to warrant such extraordinary relief.
A preliminary injunction is an extraordinary remedy, which should be granted only if the
moving party carries its burden of proving that the circumstances clearly demand it. Overstreet v.
Lexington-Fayette Urban County Gov't, 305 F.3d 566, 573 (6th Cir. 2002). The decision on
whether to issue the injunction requires balancing four factors: (1) the likelihood that the moving
party will succeed on the merits; (2) whether the moving party will suffer irreparable harm if the
injunction does not issue; (3) the probability that granting the injunction will cause substantial
harm to others; and (4) whether the injunction advances the public interest. Jones v. Caruso, 569
F.3d 258, 270 (6th Cir. 2009). A balancing of these four factors favors a denial of Plaintiffs’
Plaintiffs are not likely to succeed on the merits.
With respect to a showing of a strong likelihood of success on the merits, “the proof
required for the plaintiff to obtain a preliminary injunction is much more stringent than the proof
required to survive a summary judgment motion.” Leary v. Daeschner, 228 F.3d 729, 739 (6th
Cir. 2000). Plaintiffs have not made such a showing with their Motion.
The Campbell County Library was created in 1978 via petition pursuant to KRS 173.710
- .800.1 Included in those provisions is 173.790 which states, in part, that an ad valorem tax
levied by a library organized by petition:
...shall not be increased or decreased unless a duly certified petition requesting an
increase or decrease in the tax rate of a specifically stated amount is signed by
fifty-one percent (51%) of the number of duly qualified voters voting at the last
general election in each county in the district.
At the time of its creation, the Library’s ad valorem tax rate was set at $0.30 per thousand dollars
of assessed property valuation.2 Plaintiffs allege that the Library has improperly increased its ad
valorem tax rate because the increases were not accompanied by a petition of fifty-one percent
(51%) of qualified voters as required under KRS 173.790. However, KRS 173.790 no longer
applies to the Library because the statute was repealed by implication when the General
Assembly enacted KRS Chapter 132.
The Kentucky General Assembly enacted House Bill 44 in the 1979 Special Session.
Hallahan v. Sawyer, 390 S.W.2d 664 (Ky. 1965). The provisions of House Bill 44 were codified
in KRS Chapter 132 and state that all taxing districts shall levy ad valorem property tax rates
based upon the compensating tax rate as set forth in KRS 132.010(6). The compensating tax rate,
as calculated by the terms of KRS 132.010(6), is designed to produce approximately the same
amount of revenue collected in the previous year. Due to the fluctuating assessment of real
property, the compensating tax rate will often fluctuate from year to year thus causing ad
valorem tax rates to increase or decrease depending upon property assessments.
See attached Exhibit 1.
In Kentucky, libraries are considered taxing districts. See KRS 65.060; Boggs v. Reep,
404 S.W.2d 24 (Ky. 1966). Consequently, upon the enactment of House Bill 44 in 1979, all
libraries in the Commonwealth of Kentucky (including seventy-seven library districts created via
petition) began setting their ad valorem tax rates pursuant to the provision of KRS Chapter 132.
Since the passage of House Bill 44, the Kentucky Department of Libraries and Archives
(“KDLA”) has interpreted KRS Chapter 132 as the controlling authority with respect to setting
ad valorem tax rates for libraries. In addition, KDLA calculates the compensating tax rate for
library districts as a service.3
Under Kentucky law, a statute may be repealed by implication when the provisions of
earlier and later statutes are repugnant to each other and irreconcilable, or when the subsequent
statute covers the whole subject matter of the former and is manifestly intended as a substitute
for it. Hallahan v. Sawyer, 390 S.W.2d 664 (Ky. 1965). KRS Chapter 132 repeals all other
inconsistent statutes by implication because it covers the whole subject matter with respect to the
levying of ad valorem tax rates for taxing districts. For example, KRS 132.023 states, in part:
No taxing district, other than the state, counties, school districts, cities,
consolidated local governments, and urban-county governments, shall levy a tax
rate which exceeds the compensating tax rate defined in KRS 132.010, until the
taxing district has complied with the provisions of subsection (2) of this section.
In addition, KRS 132.010(6) defines the “compensating tax rate” as:
...that rate which, rounded to the next higher one-tenth of one cent ($0.001) per
one hundred dollars ($100) of assessed value and applied to the current year's
assessment of the property subject to taxation by a taxing district, excluding new
property and personal property, produces an amount of revenue approximately
equal to that produced in the preceding year from real property. (Emphasis added)
Finally, KRS Chapter 132 also provides detailed and comprehensive procedures for ad valorem
taxation for taxing districts including deadlines for setting rates (132.0225), recall petitions
(132.017), and reductions of tax rates on personal property (132.018).
In Fiscal Court Commissioners of Jefferson County v. Jefferson County Judge/Executive,
614 S.W.2d 954 (Ky. App. 1981), the Kentucky Court of Appeals held that the revisions to KRS
67.710, which said the Judge/Executive could not make appointments without Fiscal Court
approval, repealed by implication any statutes that vested sole appointment power with the
Judge/Executive. In their ruling, the Court noted that KRS 67.710 was a broad statute and that
more specific statutes with respect to certain boards existed giving the Judge/Executive sole
appointing authority. Id. at 958 – 959. However, the Court determined that because the revised
KRS 67.710 covered the whole subject area with respect to appointments by the
Judge/Executive, the inconsistent statutes were repealed by implication even though they were
more specific. Id.
Regardless of Plaintiffs’ contention otherwise, there is significant case law and
persuasive authority to support the fact that Chapter 132 is the proper legal authority governing
taxation for libraries. For example, in LFUCG v. Hayse, 684 S.W.2d 301 (Ky. App. 1984), the
Court of Appeals held that the provisions of Chapter 132 apply to public libraries despite
contrary language in KRS 173.360. And, in Daviess County Public Library Taxing District v.
Boswell, 185 S.W.3d 651 (Ky. App. 2005), the Court of Appeals held that the Davies County
Library District was subject to the provisions of KRS 132.023.
Furthermore, it bears repeated emphasis that KDLA has interpreted KRS Chapter 132 as
governing taxation for all library districts in Kentucky since the passage of House Bill 44 in
1979. This interpretation and application to libraries state-wide has gone unchallenged until now.
Under Kentucky law, courts must accord great deference to an administrative agency’s
interpretation of a statute within its specific province. Com. Ex rel. Beshear v. Kentucky Utilities
Co., 648 S.W.2d 535, 537 (Ky. App. 1982). Indeed, KDLA is not the only administrative agency
to share this opinion. In 1995, the Casey County Library posed the question of whether KRS
173.790 or Chapter 132 controlled to the Kentucky Attorney General. The Attorney General
responded with a letter stating:
We do not believe that the General Assembly intended library districts to be
exempt from the provisions of House Bill 44. The relevant provision in KRS
173.790 has existed since the statue’s creation in 1964. House Bill 44 was enacted
in 1979. In its original form, KRS 132.023 included the phrase “notwithstanding
any statutory provisions to the contrary.” These observations compel us to
conclude that the legislature was aware of the library tax provision when it
enacted House Bill 44 and it did not intend that the older library tax provision
override the newly enacted House Bill 44. Indeed, this has been the construction
acquiesced in during the sixteen years since House Bill 44 was enacted.4
The comprehensive language of Chapter 132, coupled with case law and administrative
agency interpretations shows that it was designed to cover the entire subject area with respect to
ad valorem taxation by taxing districts. As such, Chapter 132 repealed KRS 173.790 by
implication, thereby making it highly unlikely that Plaintiffs will ultimately succeed on the
merits of this action.
Plaintiffs have not shown irreparable harm.
Irreparable harm is the single most important prerequisite to consider when ruling on a
motion for a preliminary injunction. See Los Angeles v. Lyons, 461 U.S. 95, 111, (1983); see also
Lexington-Fayette Urban County Gov't v. Bellsouth Telcoms., Inc., 14 F. App'x. 636, 639 (6th
Cir. 2001). Plaintiffs’ contend that despite only seeking monetary damages, they will suffer
irreparable harm in that “tax money unlawfully collected will be paid out with the possibility it is
unable to be returned.” (Motion, p. 1). However, in Sampson v. Murray, 415 U.S. 61, 90 (1974),
May 8, 1995 Letter from Asst. Attorney General Ross T. Carter to Jan J. Banks attached hereto as Exhibit 2.
the Supreme Court explicitly held that claims for monetary damages do not constitute irreparable
harm for the purposes of injunctive relief, stating:
The key word in this consideration is irreparable. Mere injuries, however
substantial, in terms of money, time and energy necessarily expended in the
absence of a stay, are not enough. The possibility that adequate compensatory or
other corrective relief will be available at a later date, in the ordinary course of
litigation, weighs heavily against a claim of irreparable harm.
The Sixth Circuit offers further guidance on measuring irreparable harm when a sum of money is
involved. In Basicomputer Corp. v. Scott, the Court of Appeals held that “a plaintiff's harm is not
irreparable if it is fully compensable by money damages.” 973 F.2d 507, 511 (6th Cir. 1992)
(citing Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir. 1984)).
The only claimed harm Plaintiffs are seeking to avert is a potential monetary loss for
alleged overpayment of taxes. Since recovery of that amount, and nothing more, would return
Plaintiffs to the status quo, a preliminary injunction is unwarranted. Metro. Life Ins. Co. v.
Vanlue, 2011 U.S. Dist. LEXIS 56699 (W.D. Ky. May 23, 2011). Furthermore, the amount of
monetary damages claimed by Plaintiffs’ can be precisely determined. Only when “an injury is
not fully compensable by money damages [or] if the nature of the plaintiff's loss would make
damages difficult to calculate” should a court classify the harm as irreparable.” Basicomputer,
973 F.2d at 511. In short, because Plaintiffs will not suffer irreparable harm, their motion should
A preliminary injunction in favor of Plaintiffs would harm others and is not
in the public interest.
A preliminary injunction is an extraordinary remedy never awarded as of right. Munaf v.
Geren, 553 U.S. 674 (2008). In each case, “courts must balance the competing claims of injury
and must consider the effect on each party of the granting or withholding of the requested relief.”
Amoco Prod. Co. v. Vill. of Gambell, 480 U.S. 531 (U.S. 1987). "In exercising their sound
discretion, courts of equity should pay particular regard for the public consequences in
employing the extraordinary remedy of injunction.” Weinberger v. Romero-Barcelo, 456 U.S.
305, 312 (1982); see also Railroad Comm'n of Tex. v. Pullman Co., 312 U.S. 496, 500 (1941);
Winter v. NRDC, 555 U.S. 7, 24 (2008).
Plaintiffs do not address, much less acknowledge, the adverse impact the requested relief
would have on others and the public at large. Plaintiffs simply ask the Court to escrow all taxes
collected in excess of $0.30 per thousand dollars of assessed property valuation since the
Library’s creation. (Motion, p. 1). While not providing a total figure, Plaintiffs claim that the
alleged excess funds for 2010 alone exceeds $2.2 million. (Complaint, ¶ 1). And, it is certainly
within the realm of possibility that the total amount Plaintiffs seek to escrow could exceed $10
million. Under these circumstances, forcing the library to escrow an amount that constitutes most
of its yearly budget would in essence shut down most, if not all, library operations. Salaries of
staff could not be paid; regular and ordinary purchases of resources would have to be
discontinued; public services and programs would have to be eliminated; and, the facilities
themselves might have to be shut down if they cannot be maintained in a safe, clean, and
operable manner. The public consequences alone call for the denial of Plaintiffs’ motion.
Of course, the general function of a preliminary injunction is to maintain the status quo
pending determination of an action on its merits. Blaylock v. Cheker Oil Co., 547 F.2d 962, 965
(6th Cir. 1976). Injunctive relief in this case would do the exact opposite. Plaintiffs’ motion
denying the library access to millions of dollars in operating revenue is a punitive attack
apparently launched in response to the fact that the Library representatives had the audacity to
proactively mount a defense to and vigorously rebut Plaintiffs’ public accusations and legal
challenge issued in this lawsuit. Plaintiffs know full well, that forcing the library to escrow the
tax revenues at issue would deal a crippling, and possibly devastating blow to the Library’s
ability to serve the public. Rather than maintaining the status quo, Plaintiffs’ motion would
severely alter the status quo, causing an immediate and irreparable negative consequence to the
thousands of Library patrons who rely upon the Library on a daily basis. The interests of the
public must be weighed against any perceived harm that Plaintiffs might endure if the motion to
escrow is denied. Here, Plaintiffs posit no real, individual harm that they may suffer if the
motion to escrow is denied, and indeed, no such harm exists.
In sum, the equities, and in particular, the harm to the public if the motion is granted,
weigh heavily against Plaintiffs’ motion. If Plaintiffs are successful in their lawsuit they have
adequate remedy and redress, and the pre-trial issuance of extraordinary relief, especially relief
which has far-reaching, substantial negative consequences to the public on what is at best, a
dubious claim, is both unnecessary and unwarranted.
Assuming, arguendo, that the Court grants their Motion, Plaintiffs must
provide security to cover damages associated with the injunction.
Assuming, arguendo, that the Court is inclined to grant their Motion, Plaintiffs are
required to satisfy Fed. R. Civ. P. 65(c), which states that, “[t]he court may issue a preliminary
injunction or a temporary restraining order only if the movant gives security in an amount that
the court considers proper to pay the costs and damages sustained by any party found to have
been wrongfully enjoined or restrained.” Because they are seeking to freeze millions of dollars
and cripple the operations of the Library, Plaintiffs should be required to post a bond which will
adequately compensate the Library for the damages suffered from this action.
Based upon the foregoing, Defendants, Campbell County Library Board of Trustees,
respectfully request that Plaintiffs’ motion be denied.
/s/ Jeffrey C. Mando
Jeffrey C. Mando (#43548)
Louis D. Kelly (#92094)
WOLTERMANN & DUSING, P.L.L.C.
40 W. Pike Street, P.O. Box 861
Covington, Kentucky 41012-0861
Attorneys for Defendant Campbell County Library
Board of Trustees
This is to certify that on the 22nd day of February, 2012, I electronically filed the
foregoing with the clerk of the court by using the CM/ECF system, which will send a notice of
electronic filing to: Brandon N. Voelker.
/s/ Jeffrey C. Mando
Jeffrey C. Mando (#43548)
WOLTERMANN & DUSING, P.L.L.C.
40 W. Pike Street, P.O. Box 861
Covington, Kentucky 41012-0861
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