Joseph Maraia v. City of Cranston CV-98-173-B 05/08/98

UNITED STATE DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Joseph Maraia, et a l .

v. Civil No. 98-173-B

City of Cranston, et a l .

MEMORANDUM AND ORDER

The plaintiffs in this class action pay sewer fees to the

City of Cranston, Rhode Island. They filed their complaint

against the city and several of its officials in state court.

The complaint concerns the city's agreement to lease its sewer

facility to a private corporation in exchange for a $48,000,000

loan and other consideration. Pursuant to the agreement, the

city's sewer fee payers will be reguired to repay the loan and

cover the corporation's costs of operating the sewer facility.

Plaintiffs argue that the city is using the loan proceeds to pay

debts unrelated to the operation of the sewer system. They also

claim that the city violated state and federal law by entering

into the agreement and accepting the loan without first holding a city-wide vote. Among other forms of relief, plaintiffs seek an

injunction barring the city council from raising sewer fees to

repay the allegedly illegal loan.

Defendants removed the case to federal court relying on the

fact that the compliant contains claims based on federal law.

See

(b) (West 1994). Plaintiffs now seek to

have the case remanded. Their primary argument is that the Tax

Injunction Act ("TIA"),

(West 1994), deprives

the court of subject matter jurisdiction.

I.

The TIA provides that "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."

. The Act

constitutes a jurisdictional bar to claims that fall within its

scope. Cumberland Farms, Inc. v. Tax Assessor,

(1st Cir. 1997). Accordingly, a removed case must be remanded to

state court if the claims on which federal jurisdiction is based

are subject to the TIA. See Bank of New England Old Colony, N.A.

v. Clark,

(1st Cir. 1993) (affirming remand of

removed case based on Tax Injunction Act). Two conditions must be present before the TIA will deprive a

federal court of subject matter jurisdiction: first, the

jurisdictional claim must seek to "enjoin, suspend or restrain

the assessment, levy or collection of a tax"; second, a "plain,

speedy and efficient remedy" for the alleged violation must be

available in state court.

; Cumberland Farms,

. As I explain below, I cannot determine whether

the Act applies in this case because the record is insufficient

to permit a reliable determination as to whether Cranston's sewer

fee constitutes a "tax."

Plaintiffs have failed to offer any evidence or argument to

support their assertion that Cranston's sewer fee is a tax under

the TIA, and defendants rely exclusively on a Rhode Island

Supreme Court ruling that addresses the issue of whether a sewer

fee is a tax in a very different context.1 Costello v. Ricci,

(R.I. 1979). However, since the guestion of what

1 Rhode Island General Laws § 45-3-12 (1991) establishes certain procedural reguirements that must be met before a town can dispose of land or impose a tax. The plaintiffs in Costello argued that a town could not impose new sewer fees without complying with these procedural reguirements. In rejecting this argument, the court relied on the fact that the legislature had passed a separate authorizing statute for sewer fees. See, e.g., R.I. Gen. Laws § 45-14-1;

. The court buttressed its conclusion by noting that other states generally do not regard a sewer charge as a tax.

at 512

-3- constitutes a tax under the TIA is a matter of federal law.

Trailer Marine Transp. Corp. v. Rivera Vazquez,

(1st Cir. 1992), the Rhode Island Supreme Court's discussion of

the subject in a very different context is of limited value in

resolving the issue presented in this case.

The First Circuit Court of Appeals has observed that it is

often difficult to distinguish exactions that gualify as a tax

under the TIA from those that do not. Cumberland Farms,

6; Trailer Marine Transp., 97 7 F.2d at 5; San Juan Cellular

Tel. Co. v. Public Serv. Comm'n of Puerto Rico,

(1st Cir. 1992). Among the factors that may prove to be helpful

in making this distinction in this case are: (1) whether the fee

is designed primarily to raise revenue rather than to serve a

regulatory function or to defray the cost of a service; (2)

whether the fee is assessed against only the users of the

service; (3) whether the amount of the fee is determined based on

usage; (4) whether the service for which the fee is assessed

benefits the general public; and (5) whether the proceeds

generated by the fee are deposited into a general fund. See

generally, Cumberland Farms,

; Trailer Marine

Transp.,

; San Juan Cellular, 967 F.3d at 686; see

also Folio v. Citv of Clarksburg,

, 1217 (4th Cir. 1998); Collins Holding Corp. v. Jasper County,

(4th Cir. 1997); Hager v. West Peoria,

, 870 (7th Cir.

1996).

As I cannot determine on the present record how, if at all,

these or other factors may affect the resolution of this

question, I deny the plaintiffs' motion to remand without

prejudice insofar as it is based on the TIA. On or before June

15, 1998, plaintiffs shall file a motion for summary judgment

addressing the applicability of the TIA. Said motion shall be

supported by affidavits or other materials that satisfy the

requirements of Fed. R. Civ. P. 56(e). Discovery on matters

unrelated to this issue shall be stayed until further order of

the court.

II.

Plaintiffs also argue that a remand is warranted for several

other reasons. As I explain below, the arguments are devoid of

merit.

A.

Plaintiffs argue that the court lacks subject matter

jurisdiction even if the TIA is inapplicable. As plaintiffs have

pleaded nonfrivolous claims based on federal law, the court has subject matter jurisdiction over these claims pursuant to

(West 1993). It also has supplemental

jurisdiction over the state law claims pursuant to

(West 1993). Further, removal was warranted pursuant to

(b) as the complaint contains claims arising under

federal law.

B.

Plaintiffs assert that the court should remand the case to

state court pursuant to

(c). Where, as in this

case, a federal claim is properly removed pursuant to

(b), the court lacks discretion to remand said claim

pursuant to § 1441(c). Further, plaintiffs' state law claims

cannot be remanded pursuant to § 1441 (c) because they are not

"separate and independent."

C.

Plaintiffs contend that abstention is required pursuant to

Younger v. Harris,

(1971), and its progeny. The

simple answer to this claim is that Younger abstention is

unwarranted because no related state judicial or administrative

proceedings are pending which could be adversely affected by any

rulings that I may make in this case. See Brooks v. New

Hampshire Supreme Court,

(1st Cir. 1996) (related state judicial or administrative proceedings addressing

important state interests must be pending in order to justify

Younger abstention).

D.

Plaintiffs' final argument is that abstention is reguired

under Buford v. Sun Oil Co.,

(1943), and its

progeny. I reject this argument because this case does not

implicate matters that are subject to the type of complex state

scheme of administrative regulation that was at issue in Buford.

See EPIC v. Sweeney,

, 219 (1st Cir. 1998).

III.

In conclusion, I deny the motion to remand. Plaintiffs

shall file a motion for summary judgment addressing their claim

that the TIA deprives the court of subject matter jurisdiction on

or before June 15, 1998. Discovery on issues unrelated to the

TIA shall be stayed until further order of the court.

SO ORDERED.

Paul Barbadoro Chief Judge

May 8, 1998

-7- cc: Joseph Cavanaugh, Esq. Kevin McKenna, Esq. William Landry, Esq. Clerk, USDC - R.I.

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