Normand v. Cox Communications Louisiana, LLC

Filing 19

ORDER granting 13 Motion to Remand to State Court. Signed by Chief Judge Sarah S. Vance on 1/30/2012. (Attachments: # 1 Remand Letter) (rll, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

NEWELL NORMAND, Sheriff and
Ex-Officio Tax Collector for
the Parish of Jefferson

CIVIL ACTION

VERSUS

NO: 11-2476

COX COMMUNICATIONS, LLC

SECTION: R

ORDER AND REASONS
Before the Court is plaintiff Newell Normand’s motion to
remand. Because comity concerns counsel against the exercise of
federal jurisdiction in this case, the Court grants plaintiff’s
motion.

I.

BACKGROUND
This case arises out of a tax dispute between plaintiff

Newell Normand, the sheriff and ex officio tax collector for
Jefferson Parish, Louisiana, and defendant Cox Communications,
Inc., a Delaware limited liability company with offices in
Jefferson Parish. The dispute concerns the applicability of a
Louisiana sales tax to Cox’s video programming services. The tax
is imposed “upon the sale at retail, the use, the consumption,
the distribution, and the storage for use or consumption in this
state, of each item or article of tangible personal property,”

La. R.S. § 47:302(A), and “upon all sales of services.” La. R.S.
§ 47:302(C)(1). Cox argues that because its video programming
services are not “tangible personal property” and are not listed
among the state’s taxable “services,” see La. R.S. § 47:301(14),
they are not subject to the tax.
On December 30, 2010, the Parish issued and mailed two
notices of tax delinquency assessing Cox for back taxes allegedly
owed.1 Cox was permitted any of three alternative remedies under
the Uniform Local Sales Tax Code to challenge the Parish’s sales
tax assessments: (1) La. R.S. § 47:337.51 permitted Cox to
request an administrative hearing to protest the assessment, and
afforded a right to appeal to district court an administrative
decision rejecting the post-assessment protest; (2) La. R.S. §
47:337.63 permitted Cox to pay the assessment under protest and
sue for a refund in district court; and (3) La. R.S. § 47:337.64
permitted Cox to post a commercial bond or another security and
sue in district court to contest the assessments.2
Cox claims to have availed itself of the first of these
options, although the Parish contends that Cox’s efforts were
inadequate under the law. While La. R.S. § 47:337.51 was amended
in January 2011, the parties do not dispute that the pre-

1

R. Doc. 13-1 at 2-3.

2

See id. at 3-4.
2

amendment version governs this case. That statute reads, in
relevant part:
A. Having assessed the amount determined to be due, the
collector shall send a notice by certified mail to the
taxpayer against whom the assessment is imposed.... This
notice shall inform the taxpayer of the assessment and that
he has sixty calendar days from the date of the notice to (a)
pay the amount of the assessment; (b) request a hearing with
the collector or; (c) pay under protest in accordance with
R.S. 47:337.63.
B. If any dealer shall be aggrieved by any findings or
assessment of the collector, he may, within thirty days of
the receipt of notice of the assessment or finding, file a
protest with the collector in writing ... and may request a
hearing. Thereafter, the collector shall grant a hearing to
said dealer, if a hearing has been requested, and may make
any order confirming, modifying or vacating any such finding
or assessment....
La. R.S. § 47:337.51 (2010) (emphasis added). Part (A) of the
above statute ostensibly affords a party 60 days to protest the
assessment, while Part (B) offers only 30 days. As Cox filed its
protest and request for a hearing with the Parish 55 days after
the final assessment,3 the timeliness of the protest thus depends
upon the proper interpretation of the statute. The Parish
contends that the notice requirement of La. R.S. § 47:337.51(A)
does not set deadlines for invoking taxpayer remedies to
challenge the assessment, but rather, fixes a time period during
which the tax collector cannot execute a writ of distraint to
collect the assessment. See R. Doc. 13-1 at 5. Cox, meanwhile,
urges a reading that would grant a party the later of 60 days
3

R. Doc. 16 at 4.
3

from “the date of the notice” under part (A) and 30 days from
“the receipt of the notice” under part (B) in order to challenge
the assessment. See R. Doc. 16 at 5.
Because Cox did not timely and properly invoke its remedies
to challenge the assessment, the Parish contends that La. R.S. §
47:337.51(C) precludes a court from granting it relief from the
assessment:
(1) No assessment made by the collector shall be final if it
is determined that the assessment was based on an error of
fact or of law. An "error of fact" for this purpose means
facts material to the assessment assumed by the collector at
the time of the assessment to be true but which subsequently
are determined by the collector to be false. "Error of law"
for this purpose means that in making the assessment the
collector applied the law contrary to the construction
followed by the collector in making other assessments.
(2) The determination of an error of fact or of law under
this Subsection shall be solely that of the collector, and no
action against the collector with respect to the
determination shall be brought in any court, and no court
shall have jurisdiction of any such action, it being the
intent of this Subsection only to permit the collector to
correct manifest errors of fact or in the application of the
law made by the collector in making the assessment; however,
all reductions of assessments based on such errors, except
estimated assessments made due to the failure of the taxpayer
to file a proper tax return, must be approved and signed by
the collector. Estimated assessments made due to the failure
of the taxpayer to file a proper tax return may be corrected
by the acceptance of the proper tax return and must be
approved by the collector or his designee.”
La. R.S. § 47:337.51(C) (emphasis added).
Once an assessment becomes final, La. R.S. § 47:337.45(A)
affords the Parish three alternative remedies to enforce and
collect the sales taxes owed: (1) assessment and distraint, as
4

provided in La. R.S. § 47:337.48 - 47:337.60; (2) summary court
proceeding, as provided in La. R.S. § 47:337.61; and (3) ordinary
suit under the provisions of the general laws regulating actions
for the enforcement of obligations. The choice as to which remedy
to pursue belongs to the Parish. See La. R.S. § 47:337.45(B)
(“The collector may choose which of these procedures he will
pursue in each case[.]”).
The Parish selected the second option, which affords a
unique set of procedural and evidentiary rules:
(1) All such proceedings, whether original or by
intervention or third opposition, or otherwise, brought by
or on behalf of the taxing authority, or by or on behalf of
the collector, for the determination or collection of any
tax, interest, penalty, attorney fees, costs or other charge
claimed to be due shall be summary and shall always be tried
or heard by preference, in all courts, original and
appellate, whether in or out of term time, and either in
open court or chambers, at such time as may be fixed by the
court, which shall be not less than two nor more than ten
days after notice to the defendant or opposing party.
(2) All defenses, whether by exception or to the merits,
made or intended to be made to any such claim, must be
presented at one time and filed in the court of original
jurisdiction prior to the time fixed for the hearing, and no
court shall consider any defense unless so presented and
filed. This provision shall be construed to deny to any
court the right to extend the time for pleading defenses;
and no continuance shall be granted by any court to any
defendant except for legal grounds set forth in the
Louisiana Code of Civil Procedure.
(3) That all matters involving any such claim shall be
decided within forty-eight hours after submission, whether
in term time or in vacation, and whether in the court of
first instance or in an appellate court; and all judgments
sustaining any such claim shall be rendered and signed the
same day, and shall become final and executory on the fifth
calendar day after rendition. No new trial, rehearing or
5

devolutive appeal shall be allowed. Suspensive appeals may
be granted, but must be perfected within five calendar days
from the rendition of the judgment by giving of bond, with
good and solvent security, in a sum double that of the total
amount of the judgment, including costs. Such appeals,
whether to a court of appeals or to the supreme court, shall
be made returnable in not more than fifteen calendar days
from the rendition of the judgment.
(4) Whenever the pleadings filed on behalf of the taxing
authority, or on behalf of the collector, shall be
accompanied by an affidavit of the collector or of one of
his assistants or representatives or of the counsel or
attorney filing the same, that the facts as alleged are true
to the best of the affiant's knowledge or belief, all of the
facts alleged in said pleadings shall be accepted as prima
facie true and as constituting a prima facie case, and the
burden of proof to establish anything to the contrary shall
rest wholly on the defendant or opposing party.
La. R.S. § 47:337.61.
On September 28, 2011, The Parish filed the action in state
court to collect the taxes that it argues are owed.4 On October
3, Cox removed the matter to this Court, invoking diversity
jurisdiction.5 The Parish filed this motion to remand on November
1, contending that comity considerations and/or other abstention

4

The Parish notes that the final assessments are
collectible against Cox within Jefferson Parish by execution of
writs of distraint and sale issued on Sheriff Normand’s own
warrant, require no judicial approval, and are not subject to the
risk of judicial injunction. But the territorial limitations of
the Sheriff’s jurisdiction render collection impractical without
converting the final assessments into a court judgment executable
against Cox’s assets outside of Jefferson Parish. See R. Doc. 131 at 10.
5

The parties do not dispute that they are diverse, nor
that the amount-in-controversy requirement is met for
jurisdiction under 28 U.S.C. § 1332.
6

principles require this Court to abstain.6 Specifically, the
Parish contends that this Court's exercise of jurisdiction will
disrupt exercise of the tax administration remedies available to
it by statute, as the Federal Rules of Civil Procedure, Federal
Rules of Appellate Procedure, and Federal Rules of Evidence are
all incompatible with La. R.S. § 47:337.61. Defendant opposes the
Parish’s motion.7

II.

COMITY DOCTRINE
The plaintiff relies upon the recent Supreme Court case

Levin v. Commerce Energy, Inc., 130 S. Ct. 2323 (2010), for its
proposition that comity concerns demand that federal courts
“interfere as little as possible with the modes adopted by the
state law to enforce the taxes levied under state law[.]”8 Levin
settled a circuit split regarding the comity doctrine’s reach in
cases challenging the constitutionality of state tax schemes.
Before Levin, the Fourth and Tenth Circuits held that the
principles of federalism and comity required federal abstention
in certain tax cases beyond the ambit of the Tax Injunction Act

6

R. Doc. 13 at 1.

7

R. Doc. 16.

8

R. Doc. 13-1 at 12.
7

(TIA),9 see DIRECTV, Inc. v. Tolson, 513 F.3d 119, 127 (4th Cir.
2008); Hill v. Kemp, 478 F.3d 1236, 1247 (10th Cir. 2007), while
the First, Sixth, and Seventh Circuits held that the comity
doctrine was merely coextensive with the TIA. See Coors Brewing
Co. v. Mendez-Torres, 562 F.3d 3, 18 (1st Cir. 2009); Commerce
Energy, Inc. v. Levin, 554 F.3d 1094, 1097 (6th Cir. 2009),
rev’d, 130 S. Ct. 2323 (2010); Levy v. Pappas, 510 F.3d 755,
760-61 (7th Cir. 2007).
The Fourth and Tenth Circuits were vindicated in Levin,
which held that the comity doctrine is more expansive than the
TIA. The case involved a suit brought by natural gas marketers
against the Ohio state tax commissioner challenging the
constitutionality of three exemptions offered to their
competitors only. Levin, 130 S. Ct. at 2328-29. Although the TIA
did not apply, the Supreme Court noted nevertheless that
"[c]omity's constraint has particular force when lower federal
9

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. It applies to actions for anticipatory relief and
actions for declaratory relief, California v. Grace Brethren
Church, 457 U.S. 393, 408 (1982), but does not bar federal
jurisdiction over tax collection actions, nor limit defenses to
such actions. Jefferson County, Alabama v. Acker, 527 U.S. 423,
435 (1999). See also Buchanan Cnty. v. Equitable Prod. Co., 773
F. Supp. 2d 638, 639 (W.D. Va. 2011) (“[T]he statute was modeled
on other statutes preventing anticipatory actions brought by
taxpayers to stop the initiation of collection proceedings and
therefore was not intended to bar collection suits in federal
court.”). Thus, the TIA does not apply in this case.
8

courts are asked to pass on the constitutionality of state
taxation of commercial activity." Id. at 2330. But the Court was
unclear about just how expansive the doctrine is, and in
precisely what kinds of tax cases it is most pressing.
Cox contends that the comity doctrine does not apply in
cases without a constitutional challenge to the state’s tax laws.
And while Cox has argued that the Parish violated its procedural
due process rights by denying it a protest hearing, it insists
inconsistently that it has not alleged that the underlying sales
tax or the procedural statutes at issue are unconstitutional either facially or as applied. This is incorrect, as Cox plainly
argues that the tax scheme is unconstitutional as applied to Cox
if the Parish has correctly interpreted the tax protest statute.
Cox’s attempts to distinguish its constitutional challenge
from those that concerned the Levin Court are unavailing. If this
Court were to exercise jurisdiction and find a due process
violation, as Cox urges, it would encroach upon the province of
the state legislature by invalidating the remedial scheme it
chose. For Cox to win its due process claim would require not a
simple exercise of statutory interpretation, but rather, an
injunction against enforcement of a statutory provision based
upon the Constitution’s due process dictates. This is indeed an
example of the federal overreach that the Levin Court feared.

9

Moreover, limiting Levin as Cox suggests does not speak to
the Supreme Court’s other stated reasons for providing the comity
doctrine a broader scope than the TIA. Besides a concern over
available remedies, the Court noted broadly that “[i]t is upon
taxation that the several States chiefly rely to obtain the means
to carry on their respective governments, and it is of the utmost
importance to all of them that the modes adopted to enforce the
taxes levied should be interfered with as little as possible.”
Id. at 2330 (quoting Dows v. Chicago, 78 U.S. 108 (1871). The
Court recited Justice Brennan’s “cogent” explanation of “the
special reasons justifying the policy of federal noninterference
with state tax collection”:
The procedures for mass assessment and collection of state
taxes and for administration and adjudication of taxpayers'
disputes with tax officials are generally complex and
necessarily designed to operate according to established
rules. State tax agencies are organized to discharge their
responsibilities in accordance with the state procedures. If
federal declaratory relief were available to test state tax
assessments, state tax administration might be thrown into
disarray, and taxpayers might escape the ordinary procedural
requirements imposed by state law. During the pendency of the
federal suit the collection of revenue under the challenged
law might be obstructed, with consequent damage to the
State's budget, and perhaps a shift to the State of the risk
of taxpayer insolvency.
Id. at 2330, n.2 (quoting Perez v. Ledesma, 401 U.S. 82, 128,
n.17 (1971) (opinion concurring in part and dissenting in part)).
These concerns are especially salient in this case as Louisiana

10

has adopted a detailed framework for adjudicating tax disputes.10
If out-of-state defendants were able to make an end run around
this framework simply by refusing to pay their taxes, defaulting
on their administrative rights, and removing the subsequent
collection actions to federal court, the administration of
Louisiana’s tax code would cease to be the streamlined process
that the legislature designed, and foreign businesses would
receive an unwarranted procedural windfall. The “summary court
proceeding” afforded by La. R.S. § 47:337.61 would cease to be an
option for the collector.
In other ways, as well, a federal court’s tinkering with a
state’s tax enforcement mechanisms can threaten federal-state
relations to a commensurate degree as constitutional invalidation
of the substantive provisions of taxation statutes. Hundreds of
thousands of dollars of potential tax revenue hinge upon this
Court’s determination of the tax’s applicability to Cox. But
perhaps more importantly, a finding for Cox on its due process
claim would present collateral consequences impacting the state's
ability to collect potentially millions more in taxes owed by
third parties who protested their assessments outside of the 30
day window. The Levin Court expressed concern about federal
involvement in a state's tax “scheme,” which logically includes
not only the statutory wording, but the enforcement procedures

10

See R. Doc. 13-1 at 2-11.
11

necessary to give effect to the laws. The Court recognized that
the TIA is “but a partial codification of the federal reluctance
to interfere with state taxation,” Levin, 130 S. Ct. at 2332, and
in so doing, carved out broader conceptual space for the comity
doctrine to preserve state autonomy in cases like this.
Indeed, while the Supreme Court did not clearly define the
contours of the comity doctrine in Levin, it delineated several
factors that compel federal abstention here. Included are those
cases in which: (1) plaintiffs seek review regarding matters over
which the state enjoys wide regulatory latitude; (2) the claimed
constitutional violation does not require heightened judicial
scrutiny; (3) the plaintiffs seek aid in the federal court to
improve their competitive position; (4) the state court is more
familiar with state legislative preferences; and (5) the federal
court's remedial options are constrained. Id. at 2336. Here, save
for the third, the factors counsel in favor of abstention.
Defendant seeks intervention into Louisiana’s tax scheme, where
the state’s policies should be subject to minimal interference.
See id. at 2330 (noting the “special reasons justifying the
policy of federal noninterference with state tax collection”)
(quoting Perez, 401 U.S. at 128, n.17). The claimed
constitutional violation “does not involve any fundamental right
or classification that attracts heightened judicial scrutiny.”
Id. at 2336. See also Mathews v. Eldridge, 424 U.S. 319, 335

12

(1976) (noting that procedural due process claims are subject to
a balancing test weighing (1) the importance of the private
interest affected; (2) the risk of erroneous deprivation through
the procedures used, and the probable value of additional or
substitute procedural safeguards; and (3) the importance of the
state interest involved and the burdens which any additional or
substitute procedural safeguards would impose on the state). The
state court is more familiar with Louisiana’s tax laws and the
intent of its legislature in crafting them.11 And finally,
because “the TIA stands in the way of any decree that would
enjoin collection of a tax under State law,” Levin, 130 S. Ct. at
2335 (internal quotation marks omitted), a state court has
greater latitude to act should it find constitutional infirmity
in the procedural provisions of the tax code.
Levin factors notwithstanding, Cox argues next that the same
“respect for state functions” underlying the comity doctrine also
underlies the TIA - the latter being no bar to state-initiated
collection actions. See Acker, 527 U.S. at 433-34 (holding that
the TIA does not bar the exercise of federal jurisdiction over a
tax collection suit initiated by the taxing authority, and
indicating that the taxpayer may assert defenses to the validity

11

In fact, as the procedural statute at issue in this
case was amended in January of 2011 and the ambiguity resolved,
the state courts are in a unique position to ascertain the intent
of the Louisiana legislature, and the meaning to be given to the
pre-amendment version of that statute.
13

of the tax in that action). Thus, argues Cox, courts should be
wary of interpreting the comity doctrine to require abstention in
cases where the TIA proves no bar to jurisdiction. Critically,
however, Acker required interpreting Congress’s intent in passing
the TIA - a significantly different endeavor than determining the
appropriate boundaries of a prudential doctrine limiting federal
incursion into state affairs. While both the TIA and the comity
doctrine might be homages to federalism and comity, the TIA
reflects Congress’s assessment of appropriate federal-state
relations, while the comity doctrine reflects the Supreme
Court’s. As the upshot of Levin is that the comity doctrine is in
fact broader than the TIA, defendant's syllogism fails.
Also unavailing is defendant’s argument that this judicial
district’s record of exercising jurisdiction in similar
collection actions indicates that the Court must do the same
here.12 As already discussed, Levin opened the door to a more
12

Cox cites the following Eastern District of Louisiana
cases in support of this argument: Sch. Bd. of St. Charles v.
Quala Systems, Inc., 159 F. Supp. 2d 295 (E.D. La. 2001) (denying
motion to remand despite parish’s objections rooted in the TIA
and 11th Amendment); Sch. Bd. of St. Charles v. Roxco, Ltd., 2001
WL 283094 (E.D. La. 2001) (same); Sch. Bd. of St. Charles v.
Jesta Towers, Inc., 2004 WL 1460194 (E.D. La. 2004) (remanding
because the amount in controversy was insufficient for federal
jurisdiction, but rejecting the argument that the case should be
remanded based upon the TIA); St. Tammany Parish Tax Collector v.
Barnesandnoble.com, 481 F. Supp. 2d 575 (E.D. La. 2007) (reaching
the merits in a tax collection action removed from Louisiana
state court); Sch. Bd. of St. Charles v. Shell Oil, 2008 WL
1730095 (E.D. La. 2008) (reaching the merits in a tax collection
action filed by the parish in federal court).
14

robust conception of comity than that which existed at the time
these pre-Levin Eastern District opinions were decided. In fact,
these cases do not discuss comity at all - a fact that defendant
dismisses as unimportant since “comity may be raised by the court
sua sponte at any time[.]”13 But merely that a court may raise
the comity issue or any abstention doctrine sua sponte does not
mean that, in practice, it will. See Sch. Bd. of St. Charles v.
Quala Sys., 159 F. Supp. 2d 295, 299 (E.D. La. 2001) (finding, in
a tax collection action, that abstention was not raised by the
plaintiff and was “not manifestly evident such that the court
would abstain ex proprio motu”); Jefferson City v. Cingular
Wireless LLC, 531 F.3d 595, 605 (8th Cir. 2008) (noting that, in
part because the district court “heard no argument that it should
abstain from hearing the case,” it did not abuse its discretion
by exercising jurisdiction in a tax collection action). Thus,
these earlier Eastern District cases are not determinative here
when (1) the comity doctrine was not actually raised in those
cases, and (2) the scope of the doctrine was more limited than it
is today. In fact, since Levin, other federal courts, including
one from this district, have declined jurisdiction on comity
grounds in suits raising constitutional challenges to a state’s
tax scheme not otherwise banned by the TIA. See, e.g., ANR

13

R. Doc. 16 at 14 (citing Bellotti v. Baird, 428 U.S.
132, 143, n.10 (1976)).
15

Pipeline Co. v. La. Tax Comm'n, 2011 U.S. Dist. LEXIS 5976 (E.D.
La. 2011), aff’d, 646 F.3d 940 (5th Cir. 2011) (involving a
Commerce Clause challenge to a state tax); Joseph v. Hyman, 2010
U.S. Dist. LEXIS 91580 (S.D.N.Y. 2010), aff’d, 659 F.3d 215 (2d
Cir. 2011) (Privileges and Immunities Clause challenge); Swift
Frame v. City of San Diego, 2011 U.S. Dist. LEXIS 106618 (S.D.
Cal. 2011) (Due Process Clause and Equal Protection Clause
challenge); United States v. Oregon, 2011 U.S. Dist. LEXIS 1107
(D. Or. 2011) (Supremacy Clause challenge); Coors Brewing Co. v.
Mendez-Torres, 787 F. Supp. 2d 149 (D.P.R. 2011) (Commerce Clause
challenge).
Finally, Cox cites two post-Levin cases as examples of
federal courts declining to apply the comity doctrine in what Cox
contends are similar circumstances. But neither case included a
constitutional challenge to a state’s tax laws, and neither case
threatened the state’s administration of its own statutes. See
Buchanan Cnty. v. Equitable Prod. Co., 773 F. Supp. 2d 638, 640
(W.D. Va. 2011) (denying motion to remand county’s mineral
severance tax collection action based in part on comity grounds,
since “there is no challenge to the state tax law, and federal
jurisdiction will not result in federal interference with the
state’s administration of its taxing authority”); Amazon.com LLC
v. Lay, 758 F. Supp. 2d 1154, 1166 (W.D. Wash. 2010) (exercising
jurisdiction over taxpayer’s request for an injunction against
16

state taxing agency’s information request, since “Amazon's
requests for relief do not require the Court to restrain North
Carolina in assessing or collecting a tax from Amazon or to pass
judgment on the constitutionality of North Carolina's taxation
system”). Defendant’s cases are thus inapposite.
Exercise of jurisdiction in this case would bring two
discrete and unrelated issues, uniquely of local concern, into
federal court: (1) whether the Parish’s initial tax assessment
comported with La. R.S. § 47:302, and (2) whether the Parish
denied Cox a protest hearing in violation of its due process
rights. The constitutional dimension of the latter brings
Louisiana’s streamlined system for adjudicating tax disputes into
the crosshairs of the federal judiciary. The logic of Levin
counsels against such a result.

III. CONCLUSION
For the foregoing reasons, the Court finds that the comity
doctrine requires this court to decline to exercise its
jurisdiction over this case. Plaintiff’s motion to remand is
GRANTED.
New Orleans, Louisiana, this 30th day of January, 2012.
__
_________________________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

17