By: Brittany Flaherty Theis
Recent property tax cases reaffirmed that federal courts will abstain from hearing suits for damages under Section 1983 challenging state and local tax collection where an adequate state remedy is available. On August 21, 2013, the United States Court of Appeals for the Seventh Circuit issued a joint decision in Capra v. Cook County Board of Review and Satkar Hospitality, Inc. v. Rogers. Both cases concern local taxpayers’ ability to sue local tax officials for alleged federal constitutional violations. Each case stemmed from reports claiming that a politician offered his constituents reductions in their property taxes in exchange for political favors. After the reports were published, the Board of Review called both Capra and Satkar Hospitality back for new hearings, and ultimately rescinded reductions it had awarded to each in earlier Board of Review hearings. Following the new hearings, both taxpayers filed separate federal lawsuits against the Cook County Board of Review and its individual members and staff alleging several constitutional violations.
Specifically, the complaints allege that the board of review, its commissioners and its staff violated the plaintiffs’ right to equal protection by singling them out for their association with the politician, their right to due process by arbitrarily rescinding their reductions without a fair hearing, and their First Amendment rights by retaliating against them for their political ties to the politician from the reports. The plaintiffs alleged that any appeal available to them from the board of review’s decisions would not satisfy due process. On appeal from the district court, the court of appeals dismissed the cases holding that the individual defendants are entitled to absolute quasi-judicial immunity, but that the board of review itself is not. However, it also held that the damages claim against the board of review could not proceed because an adequate state remedy is available.
Quasi-Judicial Absolute Immunity for Individual Defendants
Courts have held that there are six factors for analyzing quasi-judicial immunity, which include “(1) the need to assure that the individual can perform her functions without harassment or intimidation; (2) the presence of safeguards that reduce the need for damages actions as a means for controlling unconstitutional conduct; (3) the insulation from political influence; (4) the importance of precedent; (5) the adversarial nature of the process; and (6) the correctability of error on appeal.” Here, the court of appeals found that an earlier case, Heyde v. Pittenger, 633 F.3d 512 (7th Cir. 2011), was right on point and controlled. In Heyde, as here, the court noted that the board of review’s hearing process was similar to a judicial proceeding: the board of review’s function of reviewing property assessments warranted insulation from harassment or intimidation and Illinois law provides the opportunity for taxpayers to appeal to either the Property Tax Appeal Board or Illinois circuit courts. For that reason, the individual members of the board of review were entitled to quasi-judicial absolute immunity.
However, the Cook County Board of Review, as a municipal entity, was not entitled to absolute immunity. The court of appeals held that extending absolute immunity to the board of review would be a “dramatic expansion of immunity that would severely limit the scope of section 1983 further than Congress intended and further than the Supreme Court ever has.” Therefore, the court held that the Cook County Board of Review was not protected by quasi-judicial absolute immunity even though its individual members were protected.
Comity and Federalism
Although the board of review did not enjoy absolute immunity, the suits against it were dismissed pursuant to the principles of comity and federalism, both of which serve to “minimize the frictions inherent in a federal system of government.” Comity is a practice among political entities involving the mutual recognition of legislative, executive, and judicial acts. Federalism refers to the legal relationship and distribution of power between national and regional goverments (in a federal system of government). The court of appeals looked to prior case law, which held that “taxpayers are barred by principles of comity from asserting Section 1983 actions against the validity of state tax systems in federal courts,” unless the available state remedies for those injuries are not adequate, plain, and complete.
In determining whether state remedies are adequate, plain, and complete, courts consider “the comparable standard from the Tax Injunction Act, which bars federal courts from enjoining state taxes where a ‘plain, speedy, and efficient’ state remedy is available.” State remedies meet these standards if they provide the taxpayer with a full hearing and judicial determination at which he or she may raise any and all constitutional objections to the tax. In Illinois, taxpayers dissatisfied with a decision of a board of review can either appeal to the Property Tax Appeal Board or file a tax objection complaint directly with a circuit court. Either avenue has further appeal options, which the court of appeals found to be sufficient. The court of appeals also held that the delay experienced during appeals to the Property Tax Appeal Board “does not doom the adequacy of state remedies.” Therefore, the court of appeals held that the federal district courts were required to abstain from considering the merits of the plaintiffs’ claims for damages under Section 1983, because the available state remedies were plain, adequate, and complete.
Conclusion
Taxpayers seeking to challenge property taxes are limited to the complaint and appeal options under Illinois law. Whitt Law has experience in all stages of property tax cases. If you have any questions related to property tax assessments or levies, please contact Whitt Law Attorney Josh Whitt.
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