538 F.

2d 63

Donald F. GARRETT et al., Appellants,

v.
James B. BAMFORD, Chairman, et al.
No. 75-1811.

United States Court of Appeals,

Third Circuit.
Argued Jan. 16, 1976.
Decided June 16, 1976.

Harold E. Kohn, Stuart H. Savett, Donald L. Weinberg, Atty., Carole A.

Broderick, Philadelphia, Pa., for appellants.
C. Wilson Austin, Austin, Speicher, Boland, Connor & Giorgi, Joseph E.
DeSantis, McGavin, DeSantis & Koch, Reading, Pa., for appellees.
Before GIBBONS, FORMAN and ROSENN, Circuit Judges.
OPINION OF THE COURT
ROSENN, Circuit Judge.

I.

Black and poor residents in urban areas across the country have evinced in
recent years a growing concern that property tax assessments discriminate
against them.1 Litigation against this discrimination has been notably
unsuccessful, primarily due to the bar of the federal Tax Injunction Act of
1937.2 See, e. g., Bland v. McHann, 463 F.2d 21 (5th Cir. 1972), cert. denied,
410 U.S. 966, 93 S.Ct. 1438, 35 L.Ed.2d 700 (1973). This appeal questions
whether that statute withholds any federal remedy in an action claiming that the
assessment method, as distinguished from the levy or collection of taxes, of the
Board of Assessment Appeals of Berks County, Pennsylvania, is racially
discriminatory. The district court held that the action was barred and dismissed
the complaint. Garrett v. Bamford, 394 F.Supp. 902 (E.D.Pa.1975). We reverse.

Since this case comes to us from a jurisdictional dismissal granted on

defendants' motion pursuant to Fed.R.Civ.P. 12(b)(1), the only "facts" are the
allegations of the complaint. These must be taken as true for the purposes of
our review. Walker, Inc. v. Food Machinery, 382 U.S. 172, 174-5, 86 S.Ct. 347,
15 L.Ed.2d 247 (1965); Curtis v. Everette, 489 F.2d 516, 518 (3d Cir. 1973),
cert. denied sub nom. Smith v. Curtis, 416 U.S. 995, 94 S.Ct. 2409, 40 L.Ed.2d
774 (1974).

The named plaintiffs 3 are one non-white and two white homeowners residing
in a predominantly non-white area of the City of Reading, Berks County,
Pennsylvania. Named as individual defendants are members of the Board of
Assessment Appeals of Berks County; the Board is also named as a defendant.
Defendants are responsible for assessing the homes of plaintiffs and others
residing in Berks County. The gravamen of the complaint is that the method of
assessing the value of plaintiffs' property, on which real estate and school taxes
are based, is intentionally racially discriminatory in violation of 42 U.S.C.
1981, 1983 (1970), and the Fourteenth Amendment.

Plaintiffs allege that their properties are assessed at values which are higher
than the values assigned to similar properties in predominantly or exclusively
white areas of Berks County. They further contend that their assessments
constitute a greater percentage of their properties' actual value than do the
assessments of properties in white areas generally. They claim that the result of
the discriminatory assessments is that plaintiffs bear a disproportionately heavy
burden in their city and county real estate and school taxes. Plaintiffs aver that
this discrimination is systematic and intentional.4 Cf. Washington v. Davis, --U.S. ----, 96 S.Ct. 2040, 48 L.Ed.2d 597, 44 U.S.L.W. 4789, 4794 (1976).

The chief method of accomplishing this discrimination, according to plaintiffs,

is defendants' failure to make annual assessments of property values as required
by state law. See 72 P.S. 5344(a) (Supp.1975). Plaintiffs claim that property
values in non-white areas of the county are declining, while values in white
neighborhoods are increasing. Failure to make the annual assessments thus
results in a tax based on higher than actual value in non-white areas and one
based on lower than actual values in white neighborhoods. Accordingly, the
principal relief plaintiffs seek is an injunction requiring defendants immediately
to cause the assessment of all residential property within the county on a nondiscriminatory basis, and to make an annual assessment with proofs submitted
to the court to demonstrate that the assessment is uniform and nondiscriminatory.

II.

Problems such as those presented in this case did not become part of our
jurisprudence until the Supreme Court's landmark decision in Ex parte Young,
209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). By holding that federal courts
could enjoin the unconstitutional acts of state officials, the Court caused a
major shift in the jurisprudential relationship between the federal government
and the states. That decision spurred efforts by the courts and the Congress to
limit the broad scope of its application.5 The Tax Injunction Act has roots in
federal equity and comity doctrine developed in Supreme Court decisions after
Ex parte Young. The legislative history of the Act, however, demonstrates that
Congress addressed the statute to a more circumscribed range of concerns than
the broad federalism doctrine developed in the judicial decisions. Our analysis
of the current 1341's applicability to this case must begin with an examination
of the legislative and judicial policies underlying the statute.

A. Legislative History
7

The Congressional materials revealing the purposes of the Tax Injunction Act
are brief but clear. Congress became concerned with the practice of large out of
state corporations' using diversity jurisdiction to litigate the validity of state
taxes in federal courts. The foreign corporations thus gained an advantage over
state citizens who generally, under state law, had to pay the tax and then sue for
a refund. Furthermore, federal litigation was time consuming and costly;
municipalities often became strapped for funds and the corporations were able
to reach extremely favorable settlements. Local financing was disrupted and
foreign corporations escaped a large part of their tax burdens.6

It thus appears that the statute had a twofold purpose: eliminating unfair
advantage of foreign corporations over citizens of the state and eliminating the
ability of foreign corporations interminably to withhold payment of local taxes
and to disrupt local financing. See Tramel v. Schrader, 505 F.2d 1310, 1315-16
(5th Cir. 1975); Hargrave v. McKinney, 413 F.2d 320 , 325-26 (5th Cir. 1969).

An additional point is worthy of note. In his Senate floor discussion of the Tax
Injunction Act, its chief sponsor, Senator Bone, introduced portions of the
Judiciary Committee report on the prior Johnson Act,7 which applied similar
restraints to federal injunctions against orders of state administrative agencies.
Senator Bone stated that the following quotation was "applicable to (the Tax
Injunction Act) in the same manner that (it was) applicable to the Johnson bill."
81 Cong.Rec. at 1416 (1937).

10 wealthy individual or corporation is thus often enabled to wear out his opponent
The
and compel him to settle or submit to an unjust judgment for the very reason that his

opponent is not financially able to follow him through the tortuous and expensive
route through the Federal court to the Supreme Court of the United States at
Washington. And all the time in this dispute there is no Federal question involved.
There is a dispute arising under a State statute or law of other origin and nothing
more.
11

Id. at 1417 (emphasis supplied). This excerpt from the Congressional Record,
coupled with Congress' apparent concern to limit the ability of foreign
corporations to use the diversity jurisdiction, at least suggests that Congress did
not intend the Tax Injunction Act to bar federal courts from entertaining
challenges to state taxes when such challenges were based on federal law.

B. Federal Equity Practice

12

Before the passage of the 1937 Act, the Supreme Court had announced that
federal courts of equity would not grant relief against state taxes, even when
challenged on constitutional grounds, as long as the state provided an adequate
remedy. See, e. g., Matthews v. Rodgers, 284 U.S. 521, 52 S.Ct. 217, 76 L.Ed.
447 (1932); Henrietta Mills v. Rutherford County, 281 U.S. 121, 50 S.Ct. 270,
74 L.Ed. 737 (1930). In Matthews, the Court articulated the rationale of this
equity principle:

13 scrupulous regard for the rightful independence of state governments which

The
should at all times actuate the federal courts, and a proper reluctance to interfere by
injunction with their fiscal operations, require that such relief should be denied in
every case where the asserted federal right may be preserved without it. Whenever
the question has been presented, this Court has uniformly held that 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 .
...
14

284 U.S. at 525-26, 52 S.Ct. at 220.

15

After passage of the 1937 Act, the Court rejected efforts to have federal courts
issue declaratory judgments on the validity of state taxes. Great Lakes Dredge
& Dock Co. v. Huffman, 319 U.S. 293, 63 S.Ct. 1070, 87 L.Ed. 1407 (1943).
The Court did not decide whether the Act itself precluded suits, 319 U.S. at
299, 63 S.Ct. 1070, but it continued to rely on the principles of the Matthews
lines of cases:

Interference with state internal economy and administration is inseparable from

16

assaults in the federal courts on the validity of state taxation . . . .

17

319 U.S. at 298, 63 S.Ct. at 1073.

18

In Steffel v. Thompson, 415 U.S. 452, 472, 94 S.Ct. 1209, 39 L.Ed.2d 505
(1974), the Court has recently reaffirmed the comity principles of Matthews and
Great Lakes. See also Moe v. Confederated Salish and Kootenai Tribes of
Flathead Reservation, --- U.S. ----, 96 S.Ct. 1634, 48 L.Ed.2d 96, 44 U.S.L.W.
4535, 4537 (1976); Lynch v. Household Finance Corp., 405 U.S. 538, 542 n. 6,
92 S.Ct. 1113, 31 L.Ed.2d 424 (1972); Perez v. Ledesma, 401 U.S. 82, 126-28
and n. 17, 91 S.Ct. 674, 27 L.Ed.2d 701 (1971) (Brennan, J., concurring).

19

From this review of the legislative history of the 1937 Act and federal equity
practice, it appears that, as a general rule, injunctive or declaratory relief
against state taxes can be sought in federal court only when the forums
provided by the state are inadequate to the task. We turn then to an examination
of the remedies provided these plaintiffs under Pennsylvania law.

III.
20

Under the 1937 Act, the inquiry into state remedies seeks to ascertain whether
the state, in this case Pennsylvania, provides plaintiffs with a " plain, speedy
and efficient remedy" for adjudicating the claims alleged in their complaint.
Supreme Court decisions construing this statutory language offer two essential
points of guidance. First, although it can be argued that Congress meant to
establish a more stringent standard for federal intervention, the decisions
indicate that "plain, speedy and efficient" means no more than the prior equity
standard of "adequacy." Second, it is sufficient for a finding of inadequacy that
the availability of the state remedy be merely uncertain. Hart and Wechsler,
supra note 5, at 979. Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602,
605, 71 S.Ct. 508, 95 L.Ed. 573 (1951); Township of Hillsborough v.
Cromwell, 326 U.S. 620, 66 S.Ct. 445, 90 L.Ed. 358 (1946); Spector Motor
Service, Inc. v. McLaughlin, 323 U.S. 101, 65 S.Ct. 152, 89 L.Ed. 101
(1944).A. Pennsylvania Equity Practice

21

If plaintiffs could bring this action in Pennsylvania courts of equity, they would
have an adequate remedy. We must initially determine, then, whether
Pennsylvania equity courts would entertain this challenge to the practices in
Berks County assessments.

22

In recent years, the Pennsylvania Supreme Court has frequently had the

opportunity to consider the question of equity jurisdiction to hear challenges to

local taxes. In Lynch v. Owen J. Roberts School District, 430 Pa. 461, 244 A.2d
1 (1968), the Court faced a challenge to an occupational tax. Writing for five
justices, Justice Roberts agreed "with the general proposition that equity will
not entertain an action where plaintiff has an adequate statutory remedy at law,"
but recognized an exception to that rule "where the controversy involves a
challenge to the constitutional validity of a taxing statute . . . ." 244 A.2d at 3.
Justice Cohen dissented, citing his dissent in Studio Theaters, Inc. v. City of
Washington, 418 Pa. 73, 209 A.2d 802 (1965), where he had argued that under
the statute enacting the occupational tax plaintiffs had an adequate remedy and
that denied the power of equity to intervene, even in a constitutional matter.
23

Two years later Justice Cohen's view appeared to become the law. Writing for a
four-justice majority in Rochester & Pittsburgh Coal Co. v. Board of
Assessment, 438 Pa. 506, 266 A.2d 78 (1970), he stated:

24 is required to confer jurisdiction on an equity court is the existence of a

what
substantial question of constitutionality (and not a mere allegation) and the absence
of an adequate statutory remedy.
25

266 A.2d at 79. The opinion went on to imply that equity would never have
jurisdiction in cases challenging real estate taxes. Id. Justice Roberts, joined by
Chief Justice Bell, dissented, arguing that Studio Theaters and Lynch allowed
jurisdiction when, as in the case before him, the constitutionality of the method
of assessment was at issue.

26

Most recently, Justice Pomeroy made a concerted effort to reconcile these

divergent cases,8 but failed to carry a majority of the Court. Borough of Green
Tree v. Board of Property Assessments, 459 Pa. 268, 328 A.2d 819 (1974). The
opinion first appears to reaffirm the rule of Rochester : for equity to take
jurisdiction there must be a constitutional question and "either the absence of a
statutorily-prescribed remedy or, if such a remedy exists, then a showing of its
inadequacy in the circumstances." 328 A.2d at 823. The determination of the
adequacy of the statutory remedy, in Justice Pomeroy's view, apparently
involved a balancing test. See 328 A.2d at 825. Applying that test, he
concluded that the statutory remedy was not adequate for dealing with a direct
challenge to the constitutionality of a section of the Second Class County
Assessment Law, 72 P.S. 5452.7 (1968). Id. at 825.

27

Justice Pomeroy's opinion attracted only one adherent. Chief Justice Jones and
Justices Eagan and Nix dissented without opinion. Justice Manderino was
noted as concurring in the result. Only Justice O'Brien joined Justice Pomeroy,

but Justice O'Brien also joined the concurring opinion of Justice Roberts, who
adhered to the teaching of Lynch and criticized Justice Pomeroy's balancing
analysis as confusing and unnecessary.
28

This review of Pennsylvania decisions illustrates the degree to which the

Justices of the Pennsylvania Supreme Court have differed on the reach of
equity jurisdiction in tax matters. Fortunately, we need not divine the ultimate
outcome of their analytical labors. The latest Pennsylvania decision on equity
jurisdiction over a constitutional challenge to a property tax that commanded a
majority of the Court, Rochester & Pittsburgh Coal Co. v. Board of
Assessment, supra, appears to govern this case. There plaintiffs sought "to
enjoin application of a revised method of taxation." 266 A.2d at 78 (emphasis
supplied). The dissenting opinion reveals that the challenge in that case was
comparable to the one now before us. The coal company apparently argued that
the county had violated the uniformity requirement of the Pennsylvania
constitution 9 by taxing "property owners in one locality on the basis of recent
valuations while utilizing older, lower valuations for calculating the taxes due
from taxpayers owning property in other portions of the county . . . ." 266 A.2d
at 82. Thus, Rochester appears to bar this case from a Pennsylvania equity court
simply due to the similarity between the complaints. Moreover, the Court
denied equity jurisdiction on the analysis that:

29 the real estate tax area most of the grave constitutional questions have already
(i)n
been decided, and most of the actions, including this one, question not the
underlying statute but rather its application. In such a situation, the administrative
body which has responsibility for applying the statute on a day-by-day basis should
have the first opportunity of studying and ruling on any new application.
30

Id. at 79. This language suggests that any challenge, as in the case before us, to
the method of application of a taxing statute will not find an equity forum in
Pennsylvania.

31

Nothing in Greentree suggests that Rochester would not govern this case.10 Nor
is there language in any of the other Pennsylvania decisions we have reviewed
which would mitigate the application of Rochester to this case. Lynch, for
example, recognized an exception to equity's traditional abstention from tax
cases "where the controversy involves a challenge to the constitutional validity
of a taxing statute . . ." 244 A.2d at 3 (emphasis supplied), thereby suggesting
that the exception extends only to attacks on the underlying statute. Studio
Theaters, Inc. v. City of Washington, 418 Pa. 73, 209 A.2d 802, 805 (1965),
reaffirmed this principle. See also Narehood v. Pearson, 374 Pa. 299, 96 A.2d
895 (1953); County of Allegheny v. Three Rivers Management Corporation, 16

Pa.Cmwlth. 361, 328 A.2d 567, 569 (1974); Borough of Crafton v. Board of
Property Assessments, 7 Pa.Cmwlth. 291, 298 A.2d 643, 648 (1972). 11 Indeed,
an extensive study of Pennsylvania tax cases by one commentator finds "no
case on record where a Pennsylvania court has enjoined the collection of a tax
on the grounds that the method of assessment was unconstitutional."12
32

This analysis of Pennsylvania decisions creates substantial uncertainty as to the

availability of a Pennsylvania equity forum for the instant complaint. Following
Township of Hillsborough v. Cromwell and the two Spector Motor Service
cases, supra, we conclude that plaintiffs do not have a "plain, speedy and
efficient" remedy in Pennsylvania equity courts.

B. Administrative Appeal with Judicial Review

33
34

The statutory remedy referred to in the foregoing Pennsylvania cases is

contained in the assessments legislation for counties of the third class, 72 P.S.
5342 et seq. (Supp.1975). 13 The statute creates a three-member Board of
Assessment Appeals, 72 P.S. 5342 (Supp.1975), which must cause annual
assessment of property within its jurisdiction. 72 P.S. 5344 (Supp.1975).
Assessments must be completed by the fifteenth of August of each year, 72 P.S.
5347 (1968), and property owners must be duly notified. 72 P.S. 5348
(1968). "Any person aggrieved by any assessment, whether or not the value
thereof shall have been changed since the preceding annual assessment . . . may
appeal to the board for relief." 72 P.S. 5349(c) (Supp.1975). Parties must be
notified of hearings and the board has "the power to compel the attendance of
witnesses and the furnishing of documents." 72 P.S. 5349(d) (Supp.1975). A
final decision of the board may be appealed to the court of common pleas,
which may proceed de novo. 72 P.S. 5350 (Supp.1975).

35 the case of real property, the court shall determine, from the evidence submitted
In
at the hearing, what ratio of assessed value to actual value was used generally in the
taxing district, and the court shall direct the application of the ratio so found to the
value of the property which is the subject matter of the appeal . . . .
36

Id. Decisions of the court of common pleas may be appealed. Id.

37

This statutory remedy is clearly designed for an individual taxpayer to appeal

his individual assessment. See Narehood v. Pearson, 374 Pa. 299, 96 A.2d 895,
898 (1953); Sharkey v. Showers, 18 Pa.Cmwlth. 363, 336 A.2d 453 (1975).
Indeed, the Pennsylvania Commonwealth Court recently upheld a lower court's
rejection of an effort to form a class action out of an individual appeal from a
board decision. Sharkey v. Showers, supra, 336 A.2d at 454. An alternative

reason for the court's decision was that a class action does not lie when the
members of the class have failed to exhaust their administrative remedies. Id.
38

In the instant case, the plaintiffs claim that they and the members of the class
they represent have been assessed at values higher than comparable property in
white neighborhoods and that the ratios of their assessed value to actual value
is higher than in all-white neighborhoods. The lack of a class action mechanism
would impose substantial expense on plaintiffs' efforts to prove their case
before the board and the common pleas court. Each individual taxpayer would
have to produce evidence of the fair market value of his property before he
could establish the ratio of assessed value to actual market value. "The
determination must be ultimately made, on the basis of competent testimony, as
to the worth of the property in the market at a fair sale." Deitch Company v.
Board of Property Assessment, 417 Pa. 213, 209 A.2d 397, 402 (1965). In order
to establish discrimination, and thus the lack of uniformity of assessments in the
taxing district, he then must produce relevant evidence to show the overall
current assessment ratio in the rest of the taxing district. There are several
methods by which this can be done, as adverted to in Deitch Company, supra,
but each will require proof by relevant evidence of actual market value of other
properties whose assessment ratios are used as a basis of comparison.14 Such
evidence will in all probability require expert testimony.

39

Gathering this evidence and hiring the necessary expert witnesses can be very
expensive. The members of the class plaintiffs claim to represent probably
could share the cost of gathering the evidence, as they could do in a class
action. However, because the Pennsylvania procedure requires each person to
bring a separate review action, each would have to pay his own filing fees,
attorney's fees, and expert witness' fees; these costs could not be consolidated
as they could be in a class action.

40

These duplicative costs might be avoided if class-wide relief could be obtained

from an individual review action. However, Sharkey v. Showers, by holding
that each individual must first exhaust his administrative remedy before seeking
review from the courts, indicates that each person would have to bear the
expense of proceeding before the Board. Furthermore, there is no indication in
the Pennsylvania statute or decisions construing it that the relief granted by the
Board or the reviewing courts can extend beyond the individual taxpayer.

41

Thus, the litigational expense of the Pennsylvania statutory review procedures

can be forbidding, if not insurmountable, for the individual taxpayer. Since,
according to the allegations of the complaint, many of the putative class
members are in the lower economic brackets, the totality of these costs could

effectively bar any attack on the allegedly discriminatory tax structure. This is
precisely the kind of situation where courts and multiple parties must endure
the expense, inconvenience, and inefficiency of separate actions at law
involving the same issue and a common defendant, which might deter large
groups of individuals from seeking judicial relief that prompted equity to
develop the forerunner of today's class action mechanism. See Wright & Miller,
Federal Practice and Procedure: Civil 1751.
42

Where legal remedies require multiple suits involving identical issues against
the same defendant, federal equity practice has recognized the inadequacy of
the legal remedy and has provided a forum. Matthews v. Rodgers, 284 U.S.
521, 529-30, 52 S.Ct. 217, 76 L.Ed. 447 (1932); Hale v. Allinson, 188 U.S. 56,
78, 23 S.Ct. 244, 47 L.Ed. 380 (1903). See 16 Minn.L.Rev. 679, 683 (1932).
Matthews rejected a multiplicity argument in favor of jurisdiction, but did not
deny the application of this equity principle to federal litigation over state taxes.
Rather, the opinion found that the plaintiffs in that case did not present
common issues. Their allegation that the challenged tax statute was an
unconstitutional burden on interstate commerce as applied to each of their
businesses tendered issues "between them and the adverse party (which were)
not necessarily identical." 284 U.S. at 530, 52 S.Ct. at 221. Here, by contrast,
the factfinding process and the issues will be identical for each plaintiff and
their common adversary, for the complaint alleges not the unlawful assessment
imposed on each taxpayer individually, but the unconstitutionality of the
method of assessment as applied to them as a group. In this posture, the issues
of law and fact tendered by plaintiffs meet the traditional requirements for
equitable intervention.

43

Moreover, adjustment of plaintiffs' taxes in one year will not necessarily

prevent repetition of disparate assessments in succeeding years. If, as plaintiffs
have alleged, the Board's discriminatory assessment pattern is intentional and
systematic, the discrimination could be repeated. Plaintiffs may be required to
undergo the administrative appeal route again, expending additional time,
effort, and money. In futuro relief is not available from the statutory procedure;
it acts only for the current year and for the individual taxpayer.15 Where a state
remedy for an allegedly unlawful tax requires repetitive suits year after year, "
(r)esort may be had to equity . . . to avoid the multiplicity of suits . . . ." Graves
v. Texas Company, 298 U.S. 393, 403, 56 S.Ct. 818, 823, 80 L.Ed. 1236
(1936).

44

We conclude that the Pennsylvania statutory review procedure does not provide
these plaintiffs with the "plain, speedy and efficient remedy" required by
section 1341 or federal equity principles. Combining this conclusion with our

previous determination of the inadequacy of Pennsylvania equitable remedies,

we believe that Pennsylvania law does not provide a "plain, speedy and
efficient remedy" for plaintiffs' complaint.16 Its rigid statutory procedures are
not designed to protect the federal constitutional rights of taxpayers "especially
freedom from racial discrimination from violation by state officials." Clement,
supra note 1, at p. 279.17
IV.
45

Applying our conclusion precisely to these proceedings, we hold that when

plaintiffs allege systematic and intentional class-based racial discrimination in
tax assessments, Pennsylvania law does not provide a "plain, speedy and
efficient remedy." Thus, a federal action seeking injunctive relief to alleviate
the alleged discrimination is not barred by 28 U.S.C. 1341. The district court,
therefore, had jurisdiction over plaintiffs' cause of action.

46

Our holding is fortified by our previous review of the legislative history of

section 1341 and it is undiminished by the policy underlying federal comity
doctrine in the state taxation area. The facts of this case do not present the
problems Congress addressed in section 1341; indeed, a contrary situation is
presented. As Section II of this opinion sets forth, Congress sought by section
1341 to attack out-of-state corporations' use of the diversity jurisdiction to
impose burdensome litigation on local governments and avoid paying local
taxes. A denial of a federal forum in the instant case would allow a state to
depend upon burdensome piecemeal review procedures as an effective defense
to an allegedly unconstitutional tax structure. Such a result would stand the
legislative intent of section 1341 on its head.

47

We further note that a federal hearing on plaintiffs' allegations will not produce
the interference with state fiscal affairs that section 1341 and federal comity
doctrine seek to avoid. If the district court finds that plaintiffs' claim has merit,
it can and should mold relief so that Berks County can continue to receive tax
revenues. Indeed, a beneficial result of this suit may be that assessments in the
entire taxing district will be raised, thereby increasing county treasury
revenues.

48

Accordingly, the judgment of the district court will be reversed and the case
remanded for further proceedings.

See Clement, Discrimination in Real Property Tax Assessment: A Litigation

Strategy for Pennsylvania, 36 U.Pitt.L.Rev. 285 (1974) (hereinafter cited as

"Clement")
2

28 U.S.C. 1341 (1970) provides:

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.

Plaintiffs sought to represent a class of similarly situated individuals. Because

of the jurisdictional dismissal, the district court did not act on the class action
question

Plaintiffs also claim that this discrimination violates state law and seek to
invoke the district court's pendent jurisdiction to adjudicate these counts. The
exercise of pendent jurisdiction is within the district court's discretion. Hagans
v. Lavine, 415 U.S. 528, 545-7, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974); United
Mine Workers of America v. Gibbs, 383 U.S. 715, 726-29, 86 S.Ct. 1130, 16
L.Ed.2d 218 (1966). We leave it to the district court to consider on remand the
propriety of hearing these claims
The complaint contained an additional count alleging that the discrimination
was also "based upon the economic status and that of the areas in which
(plaintiffs) live," in violation of the federal Constitution and federal law. We
express no view on whether this count is within the district court's jurisdiction
or states a cause of action; the district court may consider those questions on
remand.

See generally Wright, Law of Federal Courts, 49-52, pp. 186-208 (2d ed.
1970); Bator, et al., Hart and Wechsler's The Federal Courts and the Federal
System, pp. 965-1050 (2d ed. 1973) (hereinafter cited as "Hart and Wechsler")

See 81 Cong.Rec. 1415-1417 (1937) (remarks of Senator Bone);

S.Rep.No.1035, 75th Cong., 1st Sess. (1937); H.R.Rep.No.1503, 75th Cong.,
1st Sess. (1937). The Supreme Court found these materials "convincing
evidence of legislative purpose." Department of Employment v. United States,
385 U.S. 355, 358, 87 S.Ct. 464, 17 L.Ed.2d 414 (1966)

48 Stat. 775 (1934), now codified at 28 U.S.C. 1342 (1970)

Some effort to reconcile Rochester and Lynch was made in Crosson v.

Downingtown Area School District, 440 Pa. 468, 270 A.2d 377 (1970), and
Campbell v. Coatesville Area School District, 440 Pa. 496, 270 A.2d 385
(1970), two cases considering challenges to occupational taxes

Pa.Const. art. 8, 1 states:

All taxes shall be uniform, upon the same class of subjects, within the territorial
limits of the authority levying the tax, and shall be levied and collected under
general laws.

10

Justice Pomeroy's opinion noted that the case presented "a frontal attack on the
constitutionality" of a taxing statute. 328 A.2d at 825. He upheld equity
jurisdiction because the complaint challenged the constitutionality of the
underlying statute rather than its method of application. Justice Roberts'
concurrence, 328 A.2d at 826-28, was limited to reaffirming his agreement with
Lynch, and did not extend to his dissenting argument in Rochester that method
challenges come within the jurisdiction of equity. Justice O'Brien joined both
opinions; since Justice Roberts did not go as far as his Rochester dissent,
Justice O'Brien cannot be understood to have wavered in his support of
Rochester. Three justices dissented without opinion, thereby indicating their
view that even the "frontal attack" in Greentree did not create equity
jurisdiction. Two of those justices, Jones and Eagan, had voted with the
Rochester majority. Thus, Greentree reveals that there are at least four justices
Pomeroy, O'Brien, Jones, and Eagan who continue to adhere to the view that
equity does not have jurisdiction over cases alleging that the method of
application of a taxing statute is unconstitutional

11

Language in Young Men's Christian Ass'n v. City of Reading, 402 Pa. 592, 167
A.2d 469 (1961), may suggest that a constitutional challenge to "official
action" taken under a taxing statute would be within the equity jurisdiction. 167
A.2d at 472. However, it is the only Pennsylvania case in which one might read
that suggestion, it cites no authority, and has not been followed in later
decisions

12

Clement, supra note 1, at 302

13

Pennsylvania counties are divided into nine classes for the purposes of
legislation and the regulation of their affairs. 16 P.S. 210 (Supp.1975). Berks
County is a county of the third class

14

Plaintiffs argue, citing In re Rick's Appeal, 402 Pa. 209, 167 A.2d 261 (1961),
and In re Brooks Building, 391 Pa. 94, 137 A.2d 273 (1958), that Pennsylvania
law would bar them from introducing evidence of assessed value to actual value
ratios for property in neighborhoods other than their own and thus that they
could not, in any event, prove the discrimination alleged. The more recent
decision in McKnight Shopping Center, Inc. v. Board of Property Assessment,
417 Pa. 234, 209 A.2d 389 (1965), and Deitch Company v. Board of Property
Assessment, 417 Pa. 213, 209 A.2d 397 (1965), clearly indicate that assessment

ratios in the entire taxing district may be introduced. See, e. g., Deitch, supra,
209 A.2d at 403
15

We do not imply the precise relief plaintiffs request must be available to afford
an adequate remedy. It is clear, however, that plaintiffs' claims, if true, will
require some form of continuing relief which is not available from the statutory
review procedure

16

The district court reached a contrary result by speculating on the availability of

Pennsylvania remedies. He recognized that the statutory procedure is designed
to accommodate the "ordinary" situation of "individual appeals within a taxing
district . . . ," but relied on the "ingenuity" of assessment authorities and state
courts to find a "realistic and non-technical construction" of the statute that
would allow them to reach the issues tendered by plaintiffs. 394 F.Supp. at 906.
He apparently also recognized that Rochester posed a substantial bar to
Pennsylvania equity jurisdiction, but concluded without analysis of other cases
that the "particular pitch of this case . . . is such that it is cognizable in a court
of equity in Pennsylvania . . . ." 394 F.Supp. at 907. Not only is this approach
unsupported speculation, but it ignores the federal standard that a state remedy
is inadequate if its availability is uncertain. Spector Motor Service, Inc. v.
O'Connor, 340 U.S. 602, 71 S.Ct. 508, 95 L.Ed. 573 (1951); Township of
Hillsborough v. Cromwell, 326 U.S. 620, 66 S.Ct. 445, 90 S.Ct. 358 (1946)

17

In his dissenting opinion in Rochester, supra, Justice Roberts also criticized the
ineffectiveness of Pennsylvania's statutory remedies in resolving constitutional
challenges to taxing schemes, stating:
If a tax is inherently constitutionally defective, there is no reason to confine
those affected to narrow statutory remedies. Why should every property owner
in (the taxing district) have to assume the burden of appealing the propriety of
his payment when the large questions could expeditiously and effectively be
resolved in a single suit?