APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 77-1057)
Before Seitz, Chief Judge, and Van Dusen and Rosenn, Circuit Judges.
Section 9-303 of the Philadelphia Code regulates the construction and use of underground wires beneath the City's streets. Section 9-303(4)(a) provides:
"In consideration of privileges granted, every private alarm signal system licensee shall pay to the City, on the 15th of each month, 5% Of his gross earnings, whether collected or not, during the previous month from the exercise, directly or indirectly, of the privileges granted by special ordinance."
Central alarm station companies*fn1 furnish fire and/or burglar alarm services by transmitting signals from their customers' properties to central alarm stations over underground wires. Five such central alarm station companies have obtained, or seek to obtain, a special ordinance from the City of Philadelphia, as required under § 9-303, to operate their services by contracting for the use of existing underground lines maintained by Bell of Pennsylvania. These five central alarm station companies*fn2 brought suit against the City of Philadelphia*fn3 in the United States District Court for the Eastern District of Pennsylvania, challenging the collection of moneys under § 9-303(4)(a). The gist of the plaintiffs' complaint is that § 9-303(4) (a) applies only to licensed central alarm stations and not to other similarly situated users of Bell of Pennsylvania's underground wires. The central alarm station companies assert in their complaint that exacting fees from them, but not from other purchasers of Bell of Pennsylvania's services which involve transmissions along underground wires violates the equal protection and due process clauses of the Fourteenth Amendment of the United States Constitution, Article VIII, Section 1, of the Constitution of the Commonwealth of Pennsylvania, and the state's Sterling Act, as amended, 53 P.S. § 15971(a). The complaint prayed for appropriate declaratory, equitable and legal relief.*fn4
The district court, by bench memorandum and order of July 21, 1977, dismissed plaintiffs' complaint on motion by the defendants on the ground that the Tax Injunction Act, 28 U.S.C. § 1341 (1976), deprived the court of subject matter jurisdiction. We affirm.
The Tax Injunction Act provides that:
"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."
Plaintiffs' appeal from the district court's order of dismissal raises two issues of statutory construction: (1) whether § 9-303(4)(a) of the Philadelphia Code is a tax under State law," and (2) whether the central alarm station companies are afforded a "plain, speedy and efficient" state remedy.*fn5
The central alarm station companies argue that amounts payable pursuant to § 9-303(4)(a) are not taxes under state law and hence suits to restrain their collection are beyond the prohibitory scope of 28 U.S.C. § 1341. The plaintiffs rely on the Pennsylvania Supreme Court's characterization of the nature of payments made under a predecessor City ordinance to § 9-303(4)(a):
"But the consideration exacted in the ordinance is neither a tax nor a license fee; it is in the nature of an annual rental to be paid for the privilege of the use of space under the streets . . . ."
City of Philadelphia v. Holmes Electric Protective Co., 335 Pa. 273, 278, 6 A.2d 884, 887 (1939). Plaintiffs contend that this state judicial construction of the predecessor ordinance in the context of determining a municipality's immunity from the bar of state statutes of limitation should be binding in determining the application of a federal statute which explicitly restricts the subject matter jurisdiction of federal courts. The issue before us is whether Congress intended that the scope of the Tax Injunction Act's term "tax under State ...