Supreme Court of the United States
Decided February 22, 1984
Justice O’Connor, Concurring
|Topic: Judicial Power*||Court vote: 9–0|
Click any Justice for detailJoining O'Connor opinion: Justice POWELL Justice REHNQUIST
|Citation: 465 U.S. 367||Docket: 94–orig||Audio: Listen to this case's oral arguments at Oyez|
* As categorized by the Washington University Law Supreme Court Database
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JUSTICE O'CONNOR, with whom JUSTICE POWELL, and JUSTICE REHNQUIST join, concurring in the judgment.
The motion of South Carolina for leave to file a complaint in our original jurisdiction raises three questions. First, the Court must decide whether Congress intended, by the Tax Anti-Injunction Act, 26 U.S.C. § 7421(a), to bar nontaxpayers like the State of South Carolina from challenging the validity of federal tax statutes in the courts. Second, if the Act generally does bar such nontaxpayer suits, the Court must decide whether Congress intended, and if so whether the Constitution permits it, to bar us from considering South Carolina's complaint in our original jurisdiction. Third, if Congress either did not intend, or constitutionally is not permitted, to withdraw this case from our original jurisdiction, the Court must decide whether South Carolina's challenge to the constitutionality of § 103(j)(1) of the Internal Revenue Code of 1954, 26 U.S.C. § 103(j)(1) (1982 ed.), as added by § 310(b)(1) of the Tax Equity and Fiscal Responsibility Act of 1982, Pub.L. 97-248, 96 Stat. 596, raises issues appropriate for original adjudication.
In answering the first question, the Court reaches the unwarranted conclusion that the Tax Anti-Injunction Act proscribes only those suits in which the complaining party, usually a taxpayer, can challenge the validity of a taxing measure in an alternative forum. The Court holds that suits by nontaxpayers generally are not barred. In my opinion, the Court's interpretation fundamentally misconstrues the congressional anti-injunction policy. Accordingly, I cannot join its opinion.
The Tax Anti-Injunction Act provides, in pertinent part, that
no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.
26 U.S.C. § 7421(a). The Act's language "could scarcely be more explicit" in prohibiting nontaxpayer suits like this one, Bob Jones University v. Simon, 416 U. S. 725, 416 U. S. 736 (1974), since the suit indisputably would have the purpose and effect of restraining taxes. See id. at 416 U. S. 738 -742. The Act plainly bars not only "a taxpayer's attempt to enjoin the collection of his own taxes,..." but also "a suit to enjoin the assessment or collection of anyon[e] [else's] taxes...." Alexander v. "Americans United" Inc., 416 U. S. 752, 416 U. S. 760 (1974). Though the Internal Revenue Code (Code) contains a few exceptions to this nearly complete ban, [ Footnote 2/1 ] for the most part, Congress has restricted the judicial role to resolution of concrete disputes over specific sums of money, either by way of a deficiency proceeding in the Tax Court, see 26 U.S.C. §§ 6212, 6213, or by way of a taxpayer's suit for refund, see 26 U.S.C. §§ 6532, 7422.
In depriving courts of jurisdiction to resolve abstract tax controversies, Congress has determined that the United States must be able "to assess and collect taxes alleged to be due without judicial intervention...." Enochs v. Williams Packing & Navigation Co., 370 U. S. 1, 370 U. S. 7 (1962). "[T]axes are the life-blood of government," Bull v. United States, 295 U. S. 247, 295 U. S. 259 (1935), and the anti-injunction prohibition is Congress' recognition that "the tenacity of the American taxpayer" constantly threatens to drain the Nation of a life-sustaining infusion of revenues. See Gorovitz, Federal Tax Injunctions and the Standard Nut Cases, 10 Taxes 446, 446 (1932). The Act's proscription literally extends to nontaxpayer as well as taxpayer suits, if only to prevent taxpayers from sidestepping the anti-injunction policy by bringing suit through nontaxpaying associations of taxpayers. [ Footnote 2/2 ] Moreover, by broadly precluding both taxpayer and nontaxpayer suits, the Act serves a collateral objective of protecting "the collector from litigation pending a suit for refund." Enochs v. Williams Packing & Navigation Co., supra, at 370 U. S. 7 -8. The tax collector is an attractive target for all kinds of litigation, see, e.g., Simon v. Eastern Kentucky Welfare Rights Organization, 426 U. S. 26 (1976), and the Act ensures that only Congress and the Treasury, not a host of private plaintiffs, will determine the focus of the collector's energies.
The Act's history expressly reflects the congressional desire that all injunctive suits against the tax collector be prohibited. First enacted in 1867, [ Footnote 2/3 ] it apparently was designed to protect the federal tax system from being inundated with the same type of injunctive suits that were then sweeping over the state tax systems. See State Railroad Tax Cases, 92 U. S. 575, 92 U. S. 613 (1876); Snyder v. Marks, 109 U. S. 189, 109 U. S. 193 -194 (1883). There is little contemporaneous documentation, [ Footnote 2/4 ] but this Court's decisions indicate that the 39th Congress acted with a
... sense of... the evils to be feared if courts of justice could, in any case, interfere with the process of collecting the taxes on which the government depends for its continued existence.
State Railroad Tax Cases, supra, at 92 U. S. 613. The experience in the States demonstrated the grave dangers which accompany intrusion of the injunctive power of the courts into the administration of the revenue:
If there existed in the courts... any general power of impeding or controlling the collection of taxes, or relieving the hardship incident to taxation, the very existence of the government might be placed in the power of a hostile judiciary.
Cheatham v. United States, 92 U. S. 85, 92 U. S. 89 (1876). To avoid these evils and to safeguard the federal tax system, the 39th Congress committed administration of the Code to the discretion of the Secretary of the Treasury. [ Footnote 2/5 ]
This broad anti-injunction ban remained essentially untouched for almost a century. [ Footnote 2/6 ] In 1966, however, Congress took steps to "reaffir[m] the plain meaning of the original language of the Act." Alexander v. "Americans United" Inc., 416 U.S. at 416 U. S. 760, and n. 11. In § 110(c) of the Federal Tax Lien Act, Pub.L. 89-719, 80 Stat. 1144, Congress amended the Act to emphasize that no injunctive action " by any person, whether or not such person is the person against whom such tax was assessed " could be maintained in the courts. Ibid. (emphasis added). The Treasury Department proposed the 1966 amendment, and its principal spokesperson, Assistant Secretary Surrey, testified:
Subsection (c) of section 110 of the bill amends section 7421(a) of the code. That section presently prohibits injunctions against the assessment or collection of tax. The cases decided under this provision raise a question as to whether this prohibition applies against actions by persons other than the taxpayer. New section 7426 will specifically allow actions by third parties to enjoin the enforcement of a levy or sale of property. The amendment to section 7421 makes clear that third parties may bring injunction suits only under the circumstances provided in new section 7426(b)(1) of the code.
Statement by the Hon. Stanley S. Surrey, Assistant Secretary of the Treasury, reprinted in Hearings on H.R. 11256 and H.R. 11290, before the House Committee on Ways and Means, 89th Cong., 2d Sess., 58 (1966). The House Committee on Ways and Means and the Senate Committee on Finance apparently shared Mr. Surrey's understanding of the rights of nontaxpayers under prior law, for their Reports both state:
Under present law,... the United States cannot be sued by third persons where its collection activities interfere with their property rights. This includes cases where the Government wrongfully levies on one person's property in attempting to collect from a taxpayer. However, some courts allow suits to be brought against district directors of Internal Revenue where this occurs.
H.R.Rep. No. 1884, 89th Cong., 2d Sess., 27 (1966); S.Rep. No. 1708, 89th Cong., 2d Sess., 29 (1966). To accommodate these conflicting rights, both Committees recommended that Congress enact § 7426, allowing "persons other than taxpayers" to bring suits against the United States to protect preexisting liens on property levied upon by the Treasury, and amend § 7421(a) to forbid suits by all third persons, excepting those within the ambit of new § 7426. Congress followed the Committees' recommendations, on the understanding that the new language in § 7421(a) was "declaratory, not innovative." Bob Jones University v. Simon, 416 U.S. at 416 U. S. 731 -732, n. 6. [ Footnote 2/7 ]
Congress has since relaxed the statutory proscription against third-party suits on several occasions. For example, in 1974, it provided that certain designated persons could obtain declaratory judgments in the Tax Court with respect to the tax status of pension plans. See 26 U.S.C. § 7476. Similarly, in 1976, because "[u]nder [prevailing] law, no court review of [Internal Revenue Service] ruling[s] [was] available," H.R.Conf.Rep. No. 94-1515, p. 463 (1976), Congress provided declaratory judgment procedures for determining the tax status of charitable organizations and of certain property transfers. See 26 U.S.C. §§ 7428, 7477; see also H.R.Conf.Rep. No. 94-1515, supra, at 523-524 ("Under present law, the Tax Court can hear declaratory judgment suits only on the tax status of employee retirement plans. In no other case may an individual or an organization seek a declaratory judgment as to an organization's tax-exempt status"). Finally, in 1978, in 26 U.S.C. § 7478 (1982 ed.), Congress provided a mechanism whereby state or local governments could seek declaratory judgments as to the tax status of proposed municipal bond issuances. [ Footnote 2/8 ] The relevant Senate Report noted:
As a practical matter, there is no effective appeal from a Service private letter ruling (or failure to issue a private letter ruling) that a proposed issue of municipal bonds is taxable. In those cases, although there may be a real controversy between a State or local government and the Service, present law does not allow the State or local government to go to court. The controversy can be resolved only if the bonds are issued, a bondholder excludes interest on the bonds from income, the exclusion is disallowed, and the Service asserts a deficiency in its statutory notice of deficiency. This uncertainty, coupled with the threat of the ultimate loss of the exclusion, invariably makes it impossible to market the bonds. In addition, it is impossible for a State or local government to question the Service rulings and regulations directly. [S]tate and local government[s] should have a right to court adjudication in the situation described above. The bill deals with the problem by providing... for a declaratory judgment as to the tax status of a proposed issue of municipal bonds.
S.Rep. No. 95-1263, pp. 150-151 (1978). The Conference Report reflects a similar view of prevailing law. See H.R.Conf.Rep. No. 95-1800, p. 240 (1978). Thus, in 1974, 1976, and again in 1978, Congress expressed its belief that the Tax Anti-Injunction Act generally bars nontaxpayers from bringing the kind of injunctive action the State of South Carolina asks leave to file today. [ Footnote 2/9 ]
These subsequently enacted provisions and the legislative understanding of them are entitled to "great weight" in construing earlier, related legislation. See, e.g., Red Lion Broadcasting Co. v. FCC, 395 U. S. 367, 395 U. S. 380 -381 (1969); FHA v. The Darlington, Inc., 358 U. S. 84, 358 U. S. 90 (1958). Combined with the legislative purposes obviously motivating the 39th and 89th Congresses, these provisions conclusively demonstrate that, absent express exemption, the Act generally precludes judicial resolution of all abstract tax controversies, even if the complaining parties would have no other forum in which to bring their challenges.
The Court drew these same conclusions in Bob Jones University v. Simon. See 416 U.S. at 416 U. S. 736 -746. In that case, the Court rejected a private institution's request that an additional exception beyond the one created in Enochs v. Williams Packing & Navigation Co., 370 U. S. 1 (1962) (equity court may issue injunction where it is clear that under no circumstances could the Government prevail), be carved out of the Act. [ Footnote 2/10 ] The Court responded that Williams Packing
was meant to be the capstone to judicial construction of the Act. It spells an end to a cyclical pattern of allegiance to the plain meaning of the Act, followed by periods of uncertainty caused by a judicial departure from that meaning, and followed in turn by the Court's rediscovery of the Act's purpose.
416 U.S. at 416 U. S. 742. Bob Jones University then reaffirmed that, except where a litigant can show both that the Government would "under no circumstances... prevail" and that equity jurisdiction is otherwise present, the Act would be given its "literal effect." Id. at 416 U. S. 737, 416 U. S. 742 -745.
Because the plaintiffs in Bob Jones University were assured ultimately of having access to a judicial forum, the Court did not definitively resolve whether Congress could bar a tax suit in which the complaining party would be denied all access to judicial review. See id. at 416 U. S. 746. But the Court's reference to "a case in which an aggrieved party has no access at all to judicial review" came in the context of its discussion of the taxpayer's claim that postponement of its challenge to the revocation of its tax-exempt status would violate due process. Bob Jones University's dictum, therefore, should be interpreted only as reflecting the established rule that Congress cannot, consistently with due process, deny a taxpayer with property rights at stake all opportunity for an ultimate judicial determination of the legality of a tax assessment against him. See Phillips v. Commissioner, 283 U. S. 589, 283 U. S. 596 -597(1931).
On this reading, Bob Jones Uriversity's recognition that the complete inaccessability of judicial review might implicate due process concerns provides absolutely no basis for crafting an exception in this case. The State of South Carolina is not a "person" within the meaning of the Due Process Clause. See South Carolina v. Katzenbach, 383 U. S. 301, 383 U. S. 323 -324 (1966). Nor does the State assert a right cognizable as a "property" interest protected by that Clause. See generally Logan v. Zimmerman Brush Co., 455 U. S. 422, 455 U. S. 430 -433 (1982) (cataloging cases). Therefore, it has no due process right to review of its claim in a judicial forum. [ Footnote 2/11 ]
In holding that the Act does not bar suits by nontaxpayers with no other remedies, the Court today has created a "breach in the general scheme of taxation [that] gives an opening for the disorganization of the whole plan...." Allen v. Regents of University System of Ga., 304 U. S. 439, 304 U. S. 454 (1938) (Reed, J., concurring in result). Nontaxpaying associations of taxpayers, and most other nontaxpayers, will now be allowed to sidestep Congress' policy against judicial resolution of abstract tax controversies. They can now challenge both Congress' tax statutes and the Internal Revenue Service's regulations, Revenue Rulings, and private letter decisions. In doing so, they can impede the process of collecting federal revenues and require Treasury to focus its energies on questions deemed important not by it or Congress but by a host of private plaintiffs. The Court's holding travels
a long way down the road to the emasculation of the Anti-Injunction Act, and down the companion pathway that leads to the blunting of the strict requirements of Williams Packing....
Commissioner v. Shapiro, 424 U. S. 614, 424 U. S. 635 (1976) (BLACKMUN, J., dissenting). I simply cannot join such a fundamental undermining of the congressional purpose.
The Act's language, purpose, and history should leave no doubt that Congress intended to preclude both taxpayer and nontaxpayer suits, regardless of the availability of an alternative forum. The Solicitor General agrees and contends that, since the anti-injunction prohibition extends to "any court," it should be read to bar this Court from acting in its original jurisdiction as well. The Solicitor General's contention raises a grave constitutional question: namely, whether Congress constitutionally can impose remedial limitations so jurisdictional in nature that they effectively withdraw the original jurisdiction of this Court.
Under the language used in Art. III of the Constitution, Congress relates to the courts of the United States in three textually different ways. [ Footnote 2/12 ] In its broadest textual delegation, that Article authorizes Congress to establish the "inferior Courts" and places no express limits on the congressional power to regulate the courts so created. See U.S.Const., Art. III, § 1, cl. 1. By contrast, that Article itself creates the Supreme Court and textually differentiates between Congress' relationship with the appellate and original jurisdictions of that Court. Article III expressly empowers Congress to make "Exceptions" and "Regulations" to the appellate jurisdiction. U.S.Const., Art. III, § 2, cl. 2; Ex parte McCardle, 7 Wall. 506 (1869) (dismissing for want of appellate jurisdiction). But, in what is effectively its narrowest delegation, Art. III is silent regarding Congress' authority to make exceptions to or regulations regarding cases in the original jurisdiction -those that affect "Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party." Ibid.
Though the original history of Art. III is sparse, [ Footnote 2/13 ] what is available indicates that these textual differences were purposeful on the Framers' part. The Framers obviously thought that the National Government should have a judicial system of its own, and that that system should have a Supreme Court. However, because the Framers believed the state courts would be adequate for resolving most disputes, they generally left Congress the power of determining what cases, if any, should be channelled to the federal courts. The one textual exception to that rule concerned the original jurisdiction, where the Framers apparently mandated that Supreme Court review be available.
The evident purpose was to open and keep open the highest court of the nation for the determination, in the first instance, of suits involving a State or a diplomatic or commercial representative of a foreign government.
Ames v. Kansas, 111 U. S. 449, 111 U. S. 464 (1884). The Framers apparently thought that "[s]o much was due... the rank and dignity of those for whom the provision was made...." Ibid.; see also The Federalist No. 81, pp. 507-509 (H. Lodge ed. 1888) (A. Hamilton). Perhaps more importantly, the Framers also thought that the original jurisdiction was a necessary substitute for the powers of war and diplomacy that these sovereigns previously had relied upon. See Georgia v. Pennsylvania R. Co., 324 U. S. 439, 324 U. S. 450 (1945); United States v. Texas, 143 U. S. 621, 143 U. S. 641 (1892).
The Supreme Court [was] given higher standing than any known tribunal, both by the nature of its rights and the categories subject to its jurisdiction,
A. de Tocqueville, Democracy in America 149 (J. Mayer ed.1969) (emphasis in original), precisely to keep sovereign nations and States from using force "to rebuff the exaggerated pretensions of the Union...." Id. at 150.
Our cases have long paid tribute to the foreign sovereignty and federalism concerns forming the basis of the original jurisdiction. See Ames v. Kansas, supra, at 111 U. S. 464 -465; Maryland v. Louisiana, 451 U. S. 725, 451 U. S. 743 (1981). Out of respect for these concerns, the Court has held that Congress is without power to add parties not within the initial grant of original jurisdiction, See Marbury v. Madison, 1 Cranch 137, 5 U. S. 174 (1803), and has indicated, in dicta, that Congress may not withdraw that jurisdiction either. See, e.g., California v. Arizona, 440 U. S. 59, 440 U. S. 65 -66 (1979); California v. Southern Pacific Co., 157 U. S. 229, 157 U. S. 261 (1895); Wisconsin v. Pelican Insurance Co., 127 U. S. 265, 127 U. S. 300 (1888); Ames v. Kansas, supra, at 111 U. S. 464 ; Martin v. Hunter's Lessee, 1 Wheat. 304, 14 U. S. 332 (1816); Marbury v. Madison, supra, at 5 U. S. 174. Enlarging the original jurisdiction would require the sovereigns for whom the provision was made to compete with other, less dignified, parties for the Court's limited time and resources; diminishing the original jurisdiction possibly would leave those sovereigns without an acceptable alternative to diplomacy and war for settling disputes.
To be sure, the Tax Anti-Injunction Act does not expressly withdraw the original jurisdiction of this Court. Rather, it merely prohibits "any court" from "maintain[ing]" a suit that has "the purpose of restraining the assessment or collection" of federal taxes. See 26 U.S.C. § 7421(a). The effect of this prohibition, however, is to preclude this Court ever from assuming original jurisdiction to adjudicate a State qua State's Tenth and Sixteenth Amendment tax claims, in apparent derogation of the grant's constitutional purpose. [ Footnote 2/14 ] While
Congress has broad powers over the jurisdiction of the federal courts and over the sovereign immunity of the United States[,] it is extremely doubtful that they include the power to limit in this manner the original jurisdiction conferred upon this Court by the Constitution.
California v. Arizona, 440 U.S. at 440 U. S. 66.
Nevertheless, it is this Court's longstanding practice to avoid resolution of constitutional questions except when absolutely necessary. Ibid.
When the validity of an act of the Congress is drawn in question, and even if a serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly possible by which the question may be avoided.
Crowell v. Benson, 285 U. S. 22, 285 U. S. 62 (1932). Such a construction is possible in this case.
The manifest purpose of the Tax Anti-Injunction Act is simply to permit the United States to assess and collect taxes without undue judicial interference, and to require that legal challenges be raised in certain designated forums. The language and history of the Act evidence a congressional desire generally to bar both taxpayer and nontaxpayer suits, since both can substantially interrupt "the process of collecting the taxes on which the government depends for its continued existence" if left uncontrolled. State Railroad Tax Cases, 92 U.S. at 92 U. S. 613. Similarly, the language and history evidence a congressional desire to prohibit courts from restraining any aspect of the tax laws' administration, since the prohibition against injunctions should not depend upon the alleged legality or character of a particular assessment. See Snyder v. Marks, 109 U.S. at 109 U. S. 192 -194. Yet the statute was enacted against a settled history in which foreign and state sovereigns had a unique right to seek refuge in the original jurisdiction of this Court. Nothing in the legislative history of the Act of 1867, of the later amendments, or of the related declaratory judgment provisions enacted in 1974, 1976, or 1978, mentions any intent to alter these sovereign parties' unique right occasionally to seek injunctive relief by original action in this Court, even with regard to tax matters.
Admittedly, the Act precludes "any court" from maintaining a suit initiated for the purpose of restraining the assessment or collection of federal taxes. See 26 U.S.C. § 7421(a). That language clearly instructs all courts that Congress constitutionally controls not to prematurely interfere with the assessment and collection of federal taxes. That language does not, however, necessarily encompass this Court, which Congress did not create and which Congress is not expressly empowered to make "Exceptions" or "Regulations" as to its original jurisdiction. Moreover, since only a small number of preenforcement suits could conceivably involve a party for whom the original jurisdiction was created, there is no reason to believe that Congress would want to have the constitutionality of its anti-injunction policy placed into question. [ Footnote 2/15 ] Given this de minimis effect and the absence of express congressional intent to the contrary, I would conclude that the Act's reference to "any court" means to assure that all state, as well as federal, courts are subject to the anti-injunction prohibition. Such an interpretation gives meaning to the Act and avoids a grave constitutional question. [ Footnote 2/16 ]
Interpreting the Tax Anti-Injunction Act to bar both taxpayer and nontaxpayer claims in "any court" but this Court requires a determination whether this case is "appropriate" for the Court's obligatory original jurisdiction. Illinois v. City of Milwaukee, 406 U. S. 91, 406 U. S. 93 (1972).
[A]lthough it may initially have been contemplated that this Court would always exercise its original jurisdiction when properly called upon to do so,
Ohio v. Wyandotte Chemicals Corp., 401 U. S. 493, 401 U. S. 497 (1971), our cases recognize
the need [for] exercise of a sound discretion in order to protect this Court from an abuse of the opportunity to resort to its original jurisdiction....
Massachusetts v. Missouri, 308 U. S. 1, 308 U. S. 19 (1939). An original party establishes that a case is "appropriate" for obligatory jurisdiction by demonstrating, through "clear and convincing evidence," that it has suffered an injury of "serious magnitude," see New York v. New Jersey, 256 U. S. 296, 256 U. S. 309 (1921); see also Alabama v. Arizona, 291 U. S. 286, 291 U. S. 292 (1934), and that it otherwise will be without an alternative forum. Maryland v. Louisiana, 451 U.S. at 451 U. S. 740 ; Illinois v. City of Milwaukee, supra, at 406 U. S. 93. The State of South Carolina's motion for leave to file satisfies, albeit by the barest of margins, both of these tests. [ Footnote 2/17 ]
The State has demonstrated injury of "serious magnitude." It contends, and provides uncontroverted affidavits to support, that application of § 103(j)(1) will "materially interfere with and infringe upon the authority of South Carolina to borrow funds." Complaint 16. The authority the State claims has significant historical basis, see Pollock v. Farmers' Loan & Trust Co., 157 U. S. 429 (1895), and the injury the State alleges could deprive it of a meaningful political choice. See Colorado v. Kansas, 320 U. S. 383, 320 U. S. 393, and n. 8 (1943). Twenty-four States have filed a joint brief amici curiae in support of South Carolina's motion, which further attests to the "serious magnitude" of the federalism concerns at issue.
Similarly, the State qua State has demonstrated that it has no adequate alternative forum in which to raise its unique Tenth and Sixteenth Amendment claims. See Maryland v. Louisiana, supra, at 451 U. S. 743, and n.19. If the State issues bearer bonds and urges its purchasers to contest the legality of § 103(j)(1), it will suffer irremedial injury. The purchasers will inevitably demand higher interest rates as compensation for bearing the risk of future potential federal taxes. Conversely, if the State forsakes bearer bonds in favor of registered ones, it will bear the increased expense that issuers of registered bonds incur, and it will be unable ever to contest the constitutionality of § 103(j)(1). In short, the State will suffer irremedial injury if the Court does not assume original jurisdiction.
Therefore, although great deference is due the longstanding congressional policy against premature judicial interference with federal taxes, I believe it is proper to exercise the Court's original jurisdiction under these unique circumstances. I emphasize both the unique circumstances of this case and the congressional policy against premature judicial interference because original litigants should not be misled into believing that this Court will become a haven for suits that cannot be entertained in lower courts with concurrent jurisdiction. The original jurisdiction is not a forum for litigating everyday tax concerns. Rather, it must be "sparingly" invoked. United States v. Nevada, 412 U. S. 534, 412 U. S. 538 (1973). Moreover, the legislative policy against premature judicial interference embodied in the Act must be paid the highest deference by this Court. Thus, where the original party does not present a clear and convincing case that the tax at issue will impair its ability to structure integral operations of its government, and that irremedial injury is likely to occur absent review in the original jurisdiction, I would defer to the legislative directive against premature judicial interference. [ Footnote 2/18 ] But since South Carolina's claims meet these stringent requirements, its motion for leave to file should be granted.
I agree with the Court that the record is not sufficiently developed to permit us to address the merits, and that a Special Master should be appointed. But I do not share its view that the Tax Anti-Injunction Act applies only when Congress has provided an alternative avenue for a complaining party -one with original status or not -to litigate claims on its own behalf. That view is not, in my opinion, based on any fair or even tenable canon of statutory construction, and cannot be reconciled with express statements of congressional intent and purpose. Accordingly, I can concur only in the Court's judgment.
[ Footnote 2/1 ]
See infra at 465 U. S. 390 -392 (describing some exceptions); see also 26 U.S.C. §§ 6694(c), 7429(b).
[ Footnote 2/2 ]
Nontaxpaying associations of taxpayers and nontaxpayer organizations previously have attempted to avoid the congressional policy against judicial resolution of abstract tax controversies. See, e.g., Investment Annuity, Inc. v. Blumenthal, 197 U.S.App.D.C. 235, 609 F.2d 1 (1979) (insurers seeking declaration that certain investment annuity contracts are eligible for favorable tax treatment); Educo, Inc. v. Alexander, 557 F.2d 617 (CA7 1977) (company engaged in designing and administering educational benefit plans for corporate employees sues to protect its clients' tax benefits); Cattle Feeders Tax Committee v. Shultz, 504 F.2d 462 (CA10 1974) (unincorporated association representing participants in tax shelter cattle feed program seeking injunction to prevent Treasury from disallowing certain year-end deductions); McGlotten v. Connally, 338 F.Supp. 448, 453, n. 25 (DC 1972) (nontaxpayer challenge to tax-exempt status of racially discriminatory fraternal organization), disapproved in Bob Jones University v. Simon, 416 U. S. 725, 416 U. S. 732, and n. 6 (1974).
[ Footnote 2/3 ]
See Act of Mar. 2, 1867, § 10, 14 Stat. 475.
[ Footnote 2/4 ]
The Act was introduced on March 1, 1867, by Senator Fessenden, Chairman of the Senate Committee on Finance, as an amendment to a section which made a taxpayer appeal to the Commissioner of Internal Revenue a condition precedent to suit for the recovery of taxes. See Cong.Globe, 39th Cong., 2d Sess., 1933 (1867) (proposing amendment to the Act of July 13, 1866, ch. 184, § 19, 14 Stat. 152, presently codified at 26 U.S.C. § 6532(a)). The House initially objected to this amendment, see Cong.Globe, supra, at 1949, but the Senate would not recede, id. at 1950. After a conference, the House agreed to the amendment. See id. at 1968. No other recorded legislative history has been uncovered. See Note, Enjoining the Assessment and Collection of Federal Taxes Despite Statutory Prohibition, 49 Harv.L.Rev. 109, and n. 9 (1935).
[ Footnote 2/5 ]
The circumstances of the enactment do not, as the Court suggests, see ante at 465 U. S. 373 -374, indicate that Congress meant to prohibit injunctions only where the statutory scheme provided an alternative remedy. Rather,
[s]ince equitable principles militating against the issuance of federal injunctions in tax cases existed independently of the Anti-Injunction Act, it is most unlikely that Congress would have chosen the stringent language of the Act if its purpose was merely to restate existing law and not to compel litigants to make use solely of the avenues of review opened by Congress.
Bob Jones University v. Simon, 416 U. S. 725, 416 U. S. 743, n. 16 (1974).
'Enacted in 1867, [the Anti-Injunction Act], for more than sixty years, [was] consistently applied as precluding relief, whatever the equities alleged.'
Id. at 416 U. S. 744, n. 18 (quoting Miller v. Standard Nut Margarine Co., 284 U. S. 498, 284 U. S. 511 (1932) (Stone, J., dissenting)).
[ Footnote 2/6 ]
In the revised statutes, the term "any" was added so that the statute read: "No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court." Snyder v. Marks, 109 U. S. 189, 109 U. S. 192 (1883).
[ Footnote 2/7 ]
I am at a complete loss to understand the Court's assertion that the "language added to the Anti-Injunction Act by the 1966 amendment is... largely irrelevant to the issue before us today." Ante at 465 U. S. 377. This conclusion follows only if the Court begins with a premise that it need pay no attention to either the 1966 amendment's language or its legislative history.
Similarly, I do not believe, as the Court apparently does, see ante at 465 U. S. 377, n. 14, 465 U. S. 377 -378, n. 16, that statements in Bob Jones University v. Simon, supra, to the effect that the Act bars third-party suits, can or should be "disregarded." Those statements were made after studious interpretation of both the original Act and its 1966 amendment. They reflect what I believe is the only faithful reading of the statute's language and history.
[ Footnote 2/8 ]
Section 7478 does not directly apply to this case, because it permits the Tax Court only to "make a declaration whether... prospective obligations are described in section 103(a)." The issue in this case involves the constitutionality of § 103(j)(1), not whether the bonds South Carolina desires to issue are "described in section 103(a)." Nevertheless, § 7478 demonstrates that Congress believed that, prior to the enactment of that section, prospective issuers had no means to determine whether the interest on their bonds would be tax exempt. See S.Rep. No. 95-1263, pp. 150-151 (1978).
[ Footnote 2/9 ]
Our cases make clear that the constitutional nature of a challenge to a tax, as distinct from its probability of success, is of no consequence under the Anti-Injunction Act. See Alexander v. "Americans United" Inc., 416 U.S. at 416 U. S. 759 ; Bailey v. George, 259 U. S. 16, 259 U. S. 20 (1922); Dodge v. Osborn, 240 U. S. 118, 240 U. S. 121 (1916). Congress can be presumed to have had knowledge of those cases when it amended the Act in 1966, and in later years when it passed related legislation. See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U. S. 353, 456 U. S. 382, and n. 66 (1982); Lorillard v. Pons, 434 U. S. 575, 434 U. S. 580 -581 (1978).
[ Footnote 2/10 ]
The Williams Packing exception is not applicable in this case. Though South Carolina's Tenth Amendment and intergovernmental tax immunity claims are serious ones, we cannot say that there are no circumstances under which the Government could prevail. Thus, even if § 103(j)(1) would cause the State irreparable injury, South Carolina could not rely on the Williams Packing exception to invoke a court's authority to review.
[ Footnote 2/11 ]
Taxing measures inevitably have a pecuniary impact on nontaxpayers who are linked to the persons against whom a tax is imposed. This Court has held that the indirect impacts of a tax, no matter how detrimental, generally do not invade any interest cognizable under the Due Process Clause. See, e.g., Bob Jones University v. Simon (indirect impact on charitable organization); United States v. American Friends Service Committee, 419 U. S. 7 (1974) (per curiam) (indirect impact on First Amendment interests of employees). There is no occasion here to address when, if ever, such indirect impacts would implicate due process concerns if no judicial review of the complaining party's direct tax liabilities would ultimately be available. Cf. Bob Jones University v. Simon, 416 U.S. at 416 U. S. 747 -748 (discussing powerful governmental interests); Investment Annuity, Inc. v. Blumenthal, 197 U.S.App.D.C. at 242-245, 609 F.2d at 7-10 (indirect impact on nontaxpaying business does not implicate Due Process Clause even though no judicial review otherwise available).
[ Footnote 2/12 ]
Article III provides, in pertinent part:
Section. 1. The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.... Section. 2. The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority; -to all Cases affecting Ambassadors, other public Ministers and Consuls;... -to Controversies... between a State and Citizens of another State.... In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction. In all the other Cases before mentioned, the supreme Court shall have appellate Jurisdiction, both as to Law and Fact with such Exceptions, and under such Regulations as the Congress shall make.
[ Footnote 2/13 ]
See Note, The Original Jurisdiction of the United States Supreme Court, 11 Stan.L.Rev. 665, and n. 3 (1959).
[ Footnote 2/14 ]
The Solicitor General contends that the Act only fortuitously prevents the State of South Carolina from invoking its constitutional claims in this Court. See Supplemental Memorandum for Defendant 6-7. I do not think the fortuity of the effect saves the statute from constitutional doubt. As the Solicitor General himself reads the Act, it categorically prevents the State of South Carolina from maintaining a suit in this Court's original jurisdiction, which is precisely what Art. III arguably entitles the State to do. The fact that a bond interest recipient can litigate the constitutionality of § 103(j)(1) in due course, see id. at 7, does not mitigate an otherwise effective denial of the original forum to the State of South Carolina.
[ Footnote 2/15 ]
In this vein, Congress itself has recently questioned its power to withdraw the Court's original jurisdiction. In enacting the Diplomatic Relations Act of 1978, which changed the Court's original jurisdiction of actions involving ambassadors or foreign states from exclusive to concurrent, the Senate Judiciary Committee concluded that "Congress may not deny to the Supreme Court jurisdiction which is expressly granted to it by the Constitution." S.Rep. No. 95-1108, p. 6 (1978).
[ Footnote 2/16 ]
Since the Federal Declaratory Judgment Act, 28 U.S.C. § 2201 (1982 ed.), which prohibits "any court of the United States" from declaring rights of parties "with respect to Federal taxes," clearly has no jurisdictional effect, I have no occasion to address it at this time.
[ Footnote 2/17 ]
The Solicitor General concedes that, absent a bar from the Anti-Injunction Act, this case falls within the literal terms of the constitutional and statutory grant of original jurisdiction to this Court. See Supplemental Memorandum for Defendant 1-2.
[ Footnote 2/18 ]
Thus, where Congress expressly leaves open an alternative forum in which an original plaintiff can raise its claims, this Court will ordinarily presume that original jurisdiction is inappropriate. For example, where Congress allows the state, but not the federal, courts to issue injunctive relief, as Congress has done in the Norris-La Guardia Act, 29 U.S.C. § 104, and § 2283 of the Judicial Code, 28 U.S.C. § 2283, an original plaintiff could rarely, if ever, demand access to the obligatory original jurisdiction.
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