Tuesday, February 17, 2004

No federal forum for landfill fee refund suit

As reported here ("Federal court will not hear landfill use fee lawsuit," 2/17/2004) in the Coalfield Progress, Judge Jones of the W.D. Va. has dismissed for lack of jurisdiction the federal class action suit filed for refunds of the Wise County landfill fee that has been declared unconstitutional.

In Indian Creek Monument Sales v. Adkins, Judge Jones based his decision on the Tax Injunction Act. Judge Jones identifies the state law remedy as based on Va. Code 8.01-186, which says nothing in particular about taxes but does allow courts issuing declaratory judgments to proceed with entering further relief beyond declarations. I would not have thought that this statute authorizes any kind of remedy against the government which is not authorized in some other statute - if the fee really is a tax, the tax statutes ought to provide the remedy, such as under Va. Code 58.1-3990. Indeed, there are Virginia cases suggesting that there is no state law remedy at all when a "tax" is declared unconstitutional, that the ruling applies prospectively only, and the taxpayers must depend on the largesse of the taxing authority for retrospective relief.

The Court goes on to discuss the availability of class-based relief in state court, concluding that he sees no reason why one claim could not be made in state court for all of the money. I think this was a mistake, surely unnecessary to the jurisdictional issue, possibly wrong on the law, and probably bad for the administration of justice, since the issue will almost surely come up again before the state courts - they'll have to decide whether Judge Jones' advisory opinion on this point is correct, and if they disagree, that won't exactly increase public confidence in the court system. (In any event, perhaps a gang of plaintiffs will join together in one big case, under Va. Code 8.01-267.5). The other thing that will be missing from a state court action, presumably, is a statutory right to attorneys' fees - which would have been available to the prevailing party in federal court under 42 U.S.C. 1988, and might well exceed the fees at issue. See Russell County Social Services v. O'Quinn, 259 Va. 139, 523 S.E.2d 492 (2000) (no attorneys' fees authorized under Declaratory Judgment Act).

The Court also concludes that the landfill fee was a tax, particularly since the idea of a "tax" under the Tax Injunction Act need not correspond with what is a "tax" under the Virginia Code.

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