owner claimed that the uniformity of valuation violated the equal-protection clause of the Fourteenth Amendment. This contention was explicitly overruled by the Supreme Court of the State. The Supreme Court of the United States held that, because the federal question had been passed upon by the State Court, it had jurisdiction to review the State Court's decision upon that federal constitutional question. The Supreme Court decided that there was no question but that the assessments under review were made pursuant to a deliberately adopted system, and did not result from mere errors in judgment. It therefore reversed the State Supreme Court by holding that the petitioning taxpayer was entitled to a readjustment of the assessments of its coal lands so as to put the assessments upon a basis of equality, with due regard to differences in actual value, with other assessments of coal lands in the same class within the same district.
That Class II railroad property and locally assessed other real estate constitute a single class which the New Jersey Constitution requires to be assessed at true value for tax purposes is conceded. Moreover, all parties to this litigation are aware that much locally assessed property is assessed for substantially less than true value for such purposes. However, as plaintiffs allege, there is no common level below true value at which non-railroad property is locally assessed to which this Court could properly reduce the plaintiffs' 1960 tax assessments upon their Class II property. The Director's Table of Equalized Valuations is not probative of the existence of a common level of assessment to which plaintiffs' assessments may be reduced and thus obviate the discrimination of which plaintiffs here complain. Such has been decided by the highest New Jersey court, whose determination in that regard this Court has no jurisdiction to review. Plaintiffs urge that Cummings v. Merchants' National Bank, 1880, 101 U.S. 153, 25 L. Ed. 903, is a precedent for this Court's intervention in the pending cases. In that case a national bank sought an injunction against a county treasurer to prevent his collection of a tax wrongfully assessed against the shares of its stockholders. The grant of injunctive relief was affirmed because the evidence of discrimination in assessment was uncontradicted and no adequate remedy was available through a State agency.
The defendants in the cases at bar concede that (1) the New Jersey Constitution of 1947 and the statutory tax law of that State require that railroad Class II property and non-railroad real property must be assessed at true value for tax purposes; and (2) intentional and systematic underassessment of non-railroad real estate vis-a-vis full value assessment of Clas II railroad property would constitute illegal discrimination, in violation of the rights guaranteed by the Fourteenth Amendment to the Constitution of the United States. Defendants contend, however, upon their present motions, that if such unconstitutional discrimination exists or were to occur, it appears from the allegations of the complaints in these cases that an adequate remedy is available in the administrative and judicial tribunals of the State. This contention raises three questions: (1) Is the existence of a State remedy apparent? (2) Is that remedy adequate? (3) Has this Court jurisdiction to afford an independent remedy?
The four stages of review of the Director's assessment of Class II railroad property afforded under State law have already been described. Their availability appears from the allegations of and references in the complaints. Plaintiffs concede their existence, and the complaints quote the statutory sections which embody the provisions for such review. Plaintiffs charge, however, that, despite their pursuit of those remedies, they have not received any relief for the tax years 1953 to 1959 inclusive. They contend that the State remedies so provided, when invoked for prior tax years, have proven inadequate in two respects: (1) the Division of Tax Appeals has not yet made a final determination upon their complaints, and (2) the highest court of the State, while holding that the Director has jurisdiction to reduce Class II railroad property assessments below true value to eliminate discrimination, has nevertheless required proof of the existence of a lower common level of assessment of non-railroad property to support a finding of discrimination. Plaintiffs contend that compliance with that criterion of proof is impossible, and that, therefore, State judicial review is inefficacious. They point to Central Railroad Co. of New Jersey v. Neeld, etc., 16 N.J. 188, 139 A.2d 119, as authority for this contention. That case merely held that delay on the part of the Division of Tax Appeals in reviewing Class II railroad property tax assessments did not justify the courts in taking over the function of correcting the alleged discriminatory assessments which N.J.S.A. 54:29A-33 vests in the Division. Mere delay, on the part of a tribunal authorized to afford a remedy by review, in deciding the case before it, does not render that remedy inadequate, because compulsion could be brought to bear upon the dilatory body by mandamus or its equivalent. Moreover, evidence of past tardiness on the part of the Division is irrelevant to the adequacy of the remedy for the 1960 tax year which the Division is directed by the statute to afford. The tax assessment for each year gives rise to new and independent obligations, rights and opportunities for review. Plaintiffs, however, assert that (1) defendant municipalities did not, in 1959, and do not now have a common level of assessment for non-railroad real estate within their borders; (2) the Director had available data on October 1, 1959
to determine an objective statistical common or general ratio of assessment level prevailing in the defendant taxing districts; and (3) the Director refuses to reduce plaintiffs' Class II property assessments for 1960 'to the average ratios set forth in said table of equalized valuations.' Plaintiffs therefore conclude that they lack adequate remedies in New Jersey tribunals for the alleged unconstitutional discriminations of which they complain.
I must reject the foregoing conclusion. What the plaintiffs are attempting to accomplish in the present actions amounts to a circumvention of their State remedies, and to an attempt to use this Court as a forum in which to review the decisions of the highest court of new Jersey. The former may not and the latter cannot be accomplished. The same federal constitutional provisions which the plaintiffs invoke here were relied upon by them in Central Railroad Co. of New Jersey v. Neeld, etc., 26 N.J. 172, 139 A.2d 110, certiorari denied 357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2d 1371. It was not necessary for the court to reach the constitutional question, because it decided that case upon a finding of plaintiffs' failure to exhaust administrative remedies. The denial of certiorari by the United States Supreme Court was therefore inevitable. Had the New Jersey Supreme Court decision turned upon and erroneously decided the federal constitutional question, the United States Supreme Court would still have constituted plaintiffs' exclusive ultimate forum for review. Rooker v. Fidelity Trust Co., 1923, 263 U.S. 413, 44 S. Ct. 149, 68 L. Ed. 362. The exercise of this Court's federal question jurisdiction must also be conditioned upon the prior exhaustion of State remedies. Matthews v. Rodgers, 1931, 284 U.S. 521, 52 S. Ct. 217, 76 L. Ed. 447; Martin v. Creasy, 1959, 360 U.S. 219, 79 S. Ct. 1034, 3 L. Ed. 2d 1186; City of Montgomery v. Gilmore, 5 Cir., 1960, 277 F.2d 364, 370; Hackensack Water Co. v. North Bergen Township, supra. Baldwin Construction Co. v. Essex County Board of Taxation, 1954, 16 N.J. 329, 108 A.2d 598, is one of many examples of the adequacy of the Supreme Court of New Jersey as a forum for the vindication of the federal constitutional rights of the victim of discrimination in local real property taxation. That the fact of discrimination against a complainant taxpayer may be determined by State agencies is emphasized in Gibraltar Corrugated Paper Co. v. North Bergen Township, supra. 'The mere illegality or unconstitutionality of a state or municipal tax is not in itself a ground for equitable relief in the courts of the United States. If the remedy at law is plain, adequate, and complete, the aggrieved party is left to that remedy in the State courts, from which the cause may be brought to this court for review if any federal question be involved.' Matthews v. Rodgers, supra, 284 U.S. at page 525, 52 S. Ct. at page 219. The principle above expressed is applicable to cases in which a federal declaratory judgment is sought. Great Lakes Dredge & Dock Co. v. Huffman, 1943, 319 U.S. 293, 63 S. Ct. 1070, 87 L. Ed. 1407; Hackensack Water Co. v. North Bergen Township, supra.
With respect to the tax year 1960, the law provides and the complaints allege that the Director furnished the plaintiffs with a detailed statement of his valuations of their Class II property on or before December 10, 1959, and certified such valuations to the assessors of the taxing districts. The complaints fail to allege, however, that any of the plaintiffs filed its petition for review of the valuations on or before the second Monday of January, 1960. The plaintiffs did not await the Director's certification of the valuations of their property, which was required to be made to the County Boards of Taxation on or before March 15, 1960, but instead filed the present actions in February of that year. It is apparent from the complaints that the plaintiffs not only failed to exhaust, but are endeavoring by these actions to circumvent, the remedies available to them under the Railroad Tax Law of the State. This Court, therefore, should not and will not exercise its jurisdiction under the circumstances. Williams v. Tooke, 5 Cir., 1940, 108 F.2d 758, certiorari denied 311 U.S. 655, 61 S. Ct. 8, 85 L. Ed. 419; 28 U.S.C. § 1341; George F. Alger Co. of Detroit, Mich. v. Peck, D.C.E.D.Ohio 1954, 119 F.Supp. 812, affirmed 347 U.S. 984, 74 S. Ct. 853, 98 L. Ed. 1148.
Should the abstention doctrine be considered inappropriate for application to the situation disclosed in these actions, the complaints therein still fail to set forth claims upon which relief could be granted by this Court. Plaintiffs' contemplated evidentiary use of tables of average ratios of assessed to true value of real estate in the various taxing districts may not be permitted. The contention that the average of such ratios constitutes competent evidence of the existence of a common level of assessment below true value has been adjudicated adversely to the plaintiffs by the New Jersey Supreme Court in Delaware, Lackawanna & Western R.R. Co. v. Neeld, 1957, 23 N.j. 561, 130 A.2d 6. The table of equalized valuations which the Director is required to promulgate by N.J.S.A. 54:1-35.1 by the terms of that statute itself is intended to be used only for purposes of calculation and apportionment of State school aid under the State School Aid Act of 1954, N.J.S.A. 18:10-29.30 to 18:10-29.48. See Delaware Township v. Neeld, 1958, 52 N.J.Super. 63, 144 A.2d 801. Such a table is purely an arithmetical averaging of ratios between the respective aggregates of assessed and true values of real and personal property in each of the taxing districts of the State. N.J.S.A. 54:1-35.2. Because upon a motion for judgment upon the pleadings we must assume as correct the table or tables of assessment to true values set forth in the complaints, the question is posed whether the data disclosed in the tables is evidence of unconstitutional discrimination against the plaintiffs' Class II properties. The answer to this question must be in the negative as the New Jersey Supreme Court has unqualifiedly stated in the Lackawana case, 23 N.J. 561, at page 573, 130 A.2d 6, at page 13, as follows:
'There is an essential difference between a common or uniform assessment ratio of true value applicable to all alike in the same class and the 'average' assessment ratio of true value. The 'common' ratio imports general equality in the incidence of the tax, the equality of burden that is of the essence of constitutional uniformity; the 'average' ratio is the arithmetical mean or median of varying ratios of true value, necessarily making for unequal proportions of value and thus for inequality of treatment and burden in the apportionment of the tax as between the several property owners.'
Defendant municipalities further contend (1) that the maintenance of the present actions is proscribed by 28 U.S.C. § 1341 and (2) that the decisions of the Supreme Court of New Jersey in the two Central Railroad cases (26 N.J. 188, 139 A.2d 119 and 26 N.J. 172, 139 A.2d 110, certiorari denied 357 U.S. 928, 78 S. Ct. 1373, 2 L. Ed. 2d 1371), is res judicata. Section 1341 is a legislative expression of policy to exclude matters involving State taxation from Federal judicial interference. The Federal courts themselves have expressed a similar policy in similar cases, in the form of the abstention doctrine. 'As questions of federal constitutional power have become more and more intertwined with preliminary doubts about local law, we have insisted that federal courts do not decide questions of constitutionality on the basis of preliminary guesses regarding local law.' Spector Motor Service v. McLaughlin, 1944, 323 U.S. 101, 105, 65 S. Ct. 152, 154, 89 L. Ed. 101.
I cannot find that the New Jersey decisions relied upon are res judicata for the reason that the 1960 assessments which are in issue in the present cases were not involved in the cases decided by the New Jersey Supreme Court. However, the administrative and judicial remedies afforded by State tribunals are and were equally available in both series of litigation. The determination by the highest court of New Jersey that there is an adequate administrative remedy for the review of the alleged unconstitutional assessment discrimination should be followed by this Court. The situation here presented is suggestive of, if not entirely similar to that involved in Chicago & Northwestern Railway Co. v. Lyons, D.C.S.D.Ill.1957, 148 F.Supp. 787. In the cited case, in which the defendants invoked 28 U.S.C. 1341, the District Court reiterated the two principles which appear to this Court to be equally applicable in the present cases: (1) if there is an adequate remedy at law and in equity in the State courts, a Federal District Court is without jurisdiction to pass upon the alleged federal unconstitutionality of the action of a State taxing authority until the taxpayer has first exhausted his State remedies (citing Toomer v. Witsell, 1948, 334 U.S. 385, 68 S. Ct. 1156, 92 L. Ed. 1460); and (2) in the absence of any basis for the conclusion that the State courts will fail to protect the taxpayer's federal constitutional rights, a federal court will refrain from interfering (citing Baker v. Atchison, Topeka & Santa Fe Ry. Co., 10 Cir., 1939, 106 F.2d 525, certiorari denied 1939, 308 U.S. 620, 60 S. Ct. 296, 84 L. Ed. 518). I fully concur in the view of the New Jersey Supreme Court that the present plaintiffs have adequate administrative and judicial remedies in New Jersey and, having so concluded, I deem section 1341 a complete proscription of the exercise by this Court of jurisdiction in these cases.
By stipulations filed April 25, 1960, all parties to these actions agreed to dismiss the same as to William Kingsley, individually.
I conclude that the complaints in these actions fail to set forth causes of action within the jurisdiction of this Court, and that no claim is set forth in the complaints upon which this Court may or should grant relief. Accordingly, the defendants' motions for judgment on the pleadings are granted. The complaints will be dismissed and appropriate orders may be presented in conformity with the views herein expressed.