Writ of Certiorari Granted Nov. 5 1945.: July 23, 1945.
Before PHILLIPS, BRATTON, and HUXMAN, Circuit Judges.
These were two separate actions, one instituted by Kennecott Copper Corporation and the other by Silver King Coalition Mines Company, against the State Tax Commission of Utah and the individuals constituting the Commission. The actions were brought in the United States District Court for the District of Utah to recover alleged illegal taxes paid under protest. Both plaintiffs prevailed and the Commission has appealed. While separate appeals were perfected, the cases present identical questions. They were briefed and argued together and will be so treated in this opinion. On account of the conclusion we have reached on the jurisdictional question, it will not be necessary to discuss or consider in detail the nature or character of the taxes in question.
Appellant urges that these suits were actions against the State of Utah and that Utah has not waived its immunity from suit in the federal courts under the Eleventh Amendment to the United States Constitution.
We think the position that these actions are suits against the State is well taken. The suits were filed against the State Tax Commission and against the members of the Tax Commission as individuals. Whether a suit is one against a state is not to be determined alone from the mold in which the pleadings are cast. The names of the titular parties do not determine the question. If the impact of the judgment is felt by the state, then it is in fact the real party in interest. It has been held that a suit against an officer of a state for a money judgment which the state was required to satisfy was a suit against the state. See Ex parte New York, 256 U.S. 490, 500, 41 S. Ct. 588, 65 L. Ed. 1057.
Utah has comprehensive statutes dealing with the assessment and collection of taxes and with the right of taxpayers to challenge the collection of taxes claimed to be illegal for any reason.*fn1 These statutes provide for the assessment of mines by the State Tax Commission, and require the Commission to keep records of assessments of mines. They provide for notice of assessments, opportunity for hearings before the Commission and correction of assessments, and for application to the Supreme Court by writ of certiorari for review of the decisions of the Commission. Section 80 - 5 - 76 provides that no court other than the Supreme Court shall have jurisdiction to review, alter or annul a decision of the Commission. Section 80 - 11 - 13 provides that any tax paid under protest shall not be covered into the general fund but shall be held and retained by the State Treasurer until the time for filing an action for its recovery shall have expired, and if such an action is filed, until it has been finally determined, and that if the tax is determined to be illegal, the officer collecting the tax shall approve a claim for the same and the State Treasurer shall then repay the same, together with costs and interest, from any unappropriated funds in the hands of the Treasurer, or in case it is necessary, a deficit shall be authorized.
From the above general view of the Utah Statutes, it is clearly apparent that Utah is the real defendant in these suits. The funds are in its possession as escrow holder. If the judgments which the appellees recovered stand, the State Treasurer, who had nothing to do with the collection of the taxes, is by law required to repay them from funds which he holds for that purpose. Appellees recognized that these were proceedings against the State to recover funds held by it in escrow, and not suits against the individual members of the Tax Commission to recover a personal judgment on account of their wrongful acts when they filed their petitions. Their petitions alleged that they paid the tax under protest and demanded that the Commission make the records required in such cases, and that the money had not been covered into the general fund of the state but was being retained as by law required until it was finally determined whether the tax had been unlawfully collected. If these were suits against the individual members of the Commission for a personal judgment, these allegations would be surplusage and immaterial to the issue.
Utah has waived its immunity from suit and has consented to be sued in actions for the recovery of taxes, which it is claimed have been illegally exacted. But has it also consented to be sued in the federal court?
The pertinent part of Section 80 - 5 - 76 Utah Code, Annotated, 1943, from which this question must be answered, provides that: "Any taxpayer may pay his occupation tax under protest and thereafter bring an action in any court of competent jurisdiction for the return thereof as provided by section 80 - 11 - 11." It is argued that the phrase "any court of competent jurisdiction" has generally been construed to include federal courts where jurisdictional facts are present, and that there is nothing in the context of the statute to indicate that Utah did not intend to embrace a federal court in its waiver of immunity from suit. The question here is in what sense did Utah use this phrase when it waived its immunity from suit? It had two immunities - it was absolutely immune from suit, and in addition thereto was also immune from suit in federal courts. Waiving its immunity from suit for the recovery of illegal taxes did not confer jurisdiction on federal courts to entertain such actions unless the State in addition expressly consented that such a suit might be brought in the federal courts. Blackburn v. Portland Gold Mining Co., 175 U.S. 571, 20 S. Ct. 222, 44 L. Ed. 276, and kindred cases, upon which appellees rely, are not in point on this question. In the Blackburn case the Supreme Court considered a federal statute which required one claiming an adverse interest in a mining claim to institute an action within a specified time to establish the same in any court of competent jurisdiction. The action in that case was filed in the state court, and it was contended that such court was without jurisdiction. The Supreme Court merely held that what the statute did was to require a claimant to bring an action and that it evidenced no Congressional intent to restrict the right which the litigant had sans the statute to choose the forum in which he would bring the action. Without the statute an action to quiet title could have been instituted in the state court or in the federal court if jurisdictional requirements were present. The Supreme Court merely said that Congress did not by the passage of this Act intend to bar any of the doors through which a litigant might go in bringing such an action.
In our opinion it is not sufficient to say that there is nothing in the context of the statute to indicate that Utah did not intend to embrace the federal court in its waiver of immunity from suit.Before it can be sued in such courts, the statute must use language which evidences a clear intent to submit to the jurisdiction of federal courts. We think the rule which must guide us in interpreting this language is laid down in Great Northern Life Ins. Co. v. Read, 322 U.S. 47, 64 S. Ct. 873, 877, 88 L. Ed. 1121, where the Supreme Court said:
"When a state authorizes a suit against itself to do justice to taxpayers who deem themselves injured by any exaction, it is not consonant with our dual system for the Federal courts to be astute to read the consent to embrace Federal as well as state courts. * * * when we are dealing with the sovereign exemption from judicial interference in the vital field of financial administration a clear declaration of the state's intention to submit its fiscal problems to other courts than those of its own creation must be found."
This language was repeated in substance in Ford Motor Company v. Department of Treasury, 323 U.S. 459, 65 S. Ct. 347, 349. Both of these cases construed statutes very similar to the Utah statute and in both instances the Supreme Court held that the waiver of those statutes from immunity to suit did not constitute a waiver of the additional immunity from such suit in federal court. The statutes, while not identical with the Utah statute, are very similar, and we think the decisions in these two cases control the question here.
The statute of Indiana which was considered by the Supreme Court in the Ford Motor Company case, authorized "action or suit against the department in any court of competent jurisdiction; and the circuit or superior court of the county in which the taxpayer resides or is located shall have original jurisdiction * * *." Burns' Ann.St.Ind. § 64-2614(a). Significance is claimed for the language which refers to the Circuit Court or Superior Court of the county in which the taxpayer resides. No comparable language is found in the Utah statute. But the Oklahoma statute, like the Utah statute, contains no language similar to that in the Indiana statute. The Oklahoma statute provides for suit "in the Court having jurisdiction thereof." 68 O.S.A. § 15.50.
In considering whether Utah intended to consent to suit only in the state court or whether it intended to waive its further immunity from suit in the federal court, it is not sufficient to merely consider the provision of Section 80 - 5 - 76 which authorizes suit in "any court of competent jurisdiction." We must look to the entire plan of tax levy and collection. When so viewed, we think it is clear that Utah contemplates that proceedings for the levy, collection and resistance of taxes which it is claimed are illegally levied, shall be carried on within the framework of the state's government, including its courts. As pointed out, Utah has a comprehensive statute providing for the levy and collection of taxes, including the right of a taxpayer to challenge the tax. The occupation taxes in question here are levied by the State Tax Commission. There are provisions in the statute for notice of assessment, opportunity for protest, and hearings before the Commission, and for appeal to the Supreme Court of the state. Section 80 - 5 - 76 which gives the right to sue in any court of competent jurisdiction for the recovery of this particular tax provides that no court in the state except the Supreme Court has jurisdiction to review, alter or annul any ...