The opinion of the court was delivered by: COHEN
Once again, taxes both of the Municipality of Philadelphia and the Commonwealth of Pennsylvania, respectively, are under attack.
Presently, we are confronted with a class action by plaintiffs, the Non-Resident Taxpayers Association, a New Jersey corporation, for itself and on behalf of those non-resident wage earners who commute daily to their places of employment in Philadelphia and elsewhere in Pennsylvania. There are additional parties-plaintiff, Fanelli, Nole, Straub, DiFilippo, Candara and Silverstein, employees of the Philadelphia Naval Shipyard, who, as non-residents, sue for themselves and others similarly situated.
Plaintiffs seek to enjoin enforcement against nonresident employees of tax liability imposed pursuant to the Wage and Net Profits Tax Ordinance of the City of Philadelphia enacted December 13, 1939, as amended and codified in Philadelphia, Pa. Code § 19-1500 (1963); also, to enjoin the enforcement of the Pennsylvania State Income Tax, Pa. Stat. Ann. tit. 72, § 7308 et seq. (1971), Act No. 93, August 31, 1971;
urging that these tax laws, as applied to plaintiffs, are unconstitutional or in the alternative, that such taxes should be apportioned, with respect to non-residents, in proportion to the lesser degree of benefits derived by them as contrasted to those enjoyed by residents employed in Philadelphia and Pennsylvania. Plaintiffs also seek to enjoin enforcement of the Executive Regulations of the United States Naval Shipyard, Circular No. A-38 which authorizes the submission of W-2 and 1099 wage forms of federal employees to the Municipality of Philadelphia, and Naval Joint Instruction 12750.213 which provides for disciplinary action against employees for failure to honor just debts.
Jurisdiction is invoked on six bases: (1) the alleged diversity of citizenship coupled with jurisdictional amount (28 U.S.C. § 1332); (2) the existence of a federal question (28 U.S.C. § 1331); (3) the deprivation of civil rights under color of law in violation of the Civil Rights Act of 1964 (28 U.S.C. § 1343); the existence of an action arising under Executive Regulations involving amounts less than $10,000 (28 U.S.C. § 1346(a)(2)); (5) the Declaratory Judgment Act (28 U.S.C. § 2201); and (6) the power of a three-judge district court to enjoin the enforcement of a state statute (28 U.S.C. §§ 2281, 2284).
The defendants, the Commonwealth of Pennsylvania and the Honorable Milton Shapp, its Governor, move for a dissolution of this three-judge court and for a dismissal of the complaint, contending that personal jurisdiction is lacking; that a statutory prohibition bars the injunction of state taxes (28 U.S.C. § 1341); that the complaint fails to state a claim upon which relief can be granted; and that improper venue is laid.
We will treat that which is considered to be the dispositive issue, namely, whether 28 U.S.C. § 1341, the Johnson Act bars injunctive relief. The Johnson Act provides that:
"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."
That statute applies as well to three-judge district courts convened pursuant to 28 U.S.C. § 2284.
Alterman Transport Lines Inc. v. Public Service Comm. of Tennessee, 259 F. Supp. 486 (M.D. Tenn. 1966), aff'd, 386 U.S. 262, 87 S. Ct. 1023, 18 L. Ed. 2d 39 (1967).
Since we hold that the Johnson Act is applicable, we must now determine if Pennsylvania provides a "plain, speedy and efficient remedy" which is the exception provided under this statute. A "plain, speedy and efficient remedy" is afforded to the plaintiffs under Pennsylvania law. See Pa. Stat. Ann. tit. 72 §§ 503(a)(4) (1957) and 7341 (1971). One need only file a petition with the Board of Finance and Review from which judicial review lies. Pa. Stat. Ann. tit. 72 § 7342 (1971). Actions, either for refund of a tax paid, or in defense of one for collection, are cognizable in local law courts. Appeal of City of Pittsburgh, 416 Pa. 574, 209 A. 2d 799 (1965); Philadelphia Life Insur. Co. v. Commonwealth, 410 Pa. 571, 190 A. 2d 111 (1963).
Plaintiffs contend that the inhibitory mandate of the anti-injunction provisions of the Johnson Act, supra, is not binding upon this Court because the alleged speedy and efficient remedy asserted by the Commonwealth is illusory at best by reason of the Pennsylvania Supreme Court's decision in Kiker v. City of Philadelphia, 346 Pa. 624, 31 A. 2d 289, cert. denied, 320 U.S. 741, 64 S. Ct. 41, 88 L. Ed. 439 (1943), and by the federal case of Application of Thompson, 157 F. Supp. 93 (E.D. Pa. 1957), aff'd, 258 F.2d 320 (3 Cir. 1958), cert. denied, 358 U.S. 931, 79 S. Ct. 317, 3 L. Ed. 2d 303 (1959), which, in effect, would render such a pursuit for taxpayer relief entirely futile.
Plaintiffs' reliance upon Kiker and Thompson, in support of their futility argument, is misplaced. Those cases dealt with the Philadelphia Wage Tax, not the Pennsylvania Income Tax and, accordingly, are inapposite.
Obviously, plaintiffs consider themselves shuttled between state and federal courts. We are not unmindful of the plight in which they find themselves. It should be borne in mind, however, that the Pennsylvania Income Tax, as originally adopted on March 4, 1971, was successfully challenged in Amidon v. Kane, 444 Pa. 38, 279 A. 2d 53 (1971) wherein the Supreme Court of Pennsylvania declared such Tax Act unconstitutional. That holding occasioned the enactment of a new Income Tax Act on August 31, 1971, and is the Act presently under attack; it stands unchallenged in the Commonwealth courts. Consequently, the remedies afforded by the Commonwealth are still available to an aggrieved taxpayer. Such remedies, which the plaintiffs must pursue, oust the jurisdiction of this Court.
Although the complaint alleges that the Declaratory Judgment Act and the statutes requiring a three-judge court are jurisdictional, they are not. Independent jurisdictional requisites must be met in order to proceed under these statutes. Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 70 S. Ct. 876, 94 L. Ed. 1194 (1950); Jacobs v. Tawes, 250 F.2d 611 (4 Cir. 1957). Furthermore, where injunctive relief is unavailable in this field, as in the present instance, a declaratory judgment may not be used in an effort to attain the same result. Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 300-301, 63 S. Ct. 1070, 87 L. Ed. 1407 (1943); Hillsborough v. Cromwell, 326 U.S. 620, 622, 623, ...