in support of its claim for an exemption for the tax years 1986 through 1991. The Township, through its attorneys, advised LGSI to assemble and furnish the supportive records. Accordingly, on May 20, 1993, LGSI presented the Township with the records needed to support its claim for an exemption, including monthly summaries of gross receipts by location for the entire six-year period. The Township then advised LGSI that it would need to provide additional information, but failed to specify the precise nature of the information it required. After LGSI contacted the Township with a request that it clarify its demand for further proof, the Township denied LGSI's claim for an exemption.
Spielvogel II was presented to an arbitration panel, which ruled against LGSI on the issue of the exemption. When LGSI appealed the arbitration panel's decision to the Court of Common Pleas, the Township stipulated that LGSI properly claimed and supported its request for an exemption for the portion of its gross receipts derived out-of-state, but argued that it was entitled to levy a tax on all receipts, regardless of where they were generated, without affording the taxpayer the opportunity to demonstrate an entitlement to an exemption. The Court of Common Pleas disagreed, and entered an order in LGSI's favor on December 27, 1994. Basing its decision on Spielvogel I, the court held that since the parties agreed that LGSI properly set forth a claim for an exemption, the Township's refusal to allow the exemption rendered the ordinance unconstitutional as applied. The Township elected not to appeal.
LGSI filed the instant complaint, which is 50 pages long and contains 327 averments, on March 21, 1995. It names as defendants not only the Attorney Defendants, who represented the Township throughout its 11-year battle with LGSI and allegedly assisted the Township in the drafting of the ordinances at issue, but also the Township and Ruth M. Damsker, William David Webb and Marsha Gash, all of whom worked in the Township's Tax Collector's Office during the time period relevant to the lawsuit (collectively, the "Township Defendants"). Moreover, the complaint contains four claims, the first three of which are brought pursuant to 42 U.S.C. § 1983. In the first claim, LGSI asserts that all of the defendants conspired to deprive it of the rights secured to it by the commerce clause and the due process clause of the fourteenth amendment. LGSI alleges in the second and third counts that Defendants Damsker, Gash, High, Abrams, HSRS and the Township acted to deprive it of its rights under the commerce clause and the due process clause of the fourteenth amendment, respectively. Finally, in Count IV, LGSI asserts that Defendants Damsker, High, Abrams, Clemm, HSRS and the Township are liable to it under a malicious prosecution theory. For their part, the Attorney Defendants and the Township Defendants have both submitted separate motions to dismiss. In support of their motion, the Township Defendants argue, inter alia, that this Court lacks subject matter jurisdiction over the instant dispute. We turn now to address their argument.
The Township Defendants call our attention to the Tax Injunction Act, 28 U.S.C. § 1341 (the "Act"), and argue that we must dismiss this action pursuant to Fed. R. Civ. P. 12(b)(1) for want of subject matter jurisdiction.
The Congress enacted the Act in 1937 for the purpose of "divesting the federal courts of jurisdiction to interfere with state tax administration." California v. Grace Brethren Church, 457 U.S. 393, 409 n.22, 102 S. Ct. 2498, 73 L. Ed. 2d 93 (1982). Thus, the Act provides as follows: "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." 28 U.S.C. § 1341.
Construing this statute, and the principle of comity
it embodies, the Supreme Court held that "taxpayers are barred by the principle of comity from asserting § 1983 actions against the validity of state tax systems in federal courts," and must pursue state remedies to vindicate their federal rights, as long as "those remedies are plain, adequate, and complete." Fair Assessment in Real Estate Ass'n v. McNary, 454 U.S. 100, 116, 102 S. Ct. 177, 70 L. Ed. 2d 271 (1981).
Courts in this circuit have also had occasion to apply the rule. In Long v. Kistler, 524 F. Supp. 225 (E.D. Pa. 1981), we commented on the Act as follows:
This statute strictly limits federal jurisdiction by withholding from federal courts the power to decide otherwise permissibly justiciable claims and implicates the doctrines of equitable restraint, comity and abstention as well as the strong federal policy against interference with enforcement of state tax laws. The operation of this statute cannot be voided by including a claim under Section 1983 or a federal constitutional violation, by requesting declaratory rather than injunctive relief, or by attacking the administration or implementation of the scheme rather than the tax itself.