Bi-Metallic Investment Co. v. State Board of Equalization

Supreme Court of the United States · Administrative Law

Administrative LawDue ProcessTaxationdue processhearinggeneral ruletax assessmentproperty valuation

Facts

Colorado's State Board of Equalization and Tax Commission ordered a forty percent increase in the valuation of all taxable property in Denver. The plaintiff, a Denver real estate owner, alleged that neither it nor others representing Denver interests were given an opportunity to be heard before the order was made, apart from whatever notice followed from the boards' meeting times being fixed by law. The plaintiff claimed that enforcing the increase would take property without due process of law under the Fourteenth Amendment. The Court treated that due process question as the only issue before it.

Issue

Does the Fourteenth Amendment require that each affected property owner receive an opportunity to be heard before a state board raises the valuation of all taxable property in a city or county by a general order? Put differently, is an individualized hearing constitutionally required when the government makes a broad, general determination affecting all property owners alike?

Rule

Due process does not require an individualized hearing before the government adopts a rule or determination of general application affecting a large number of people alike. A hearing is required when a relatively small number of persons are exceptionally affected on individual grounds, but not when the government makes a general determination about the basis on which all assessments in a jurisdiction are laid.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

The Ohio Revenue Adjustment Board adopts an order increasing the assessed value of all industrial parcels in Cuyahoga County by 18% for the current tax year after concluding county assessors have systematically undervalued that category. Nora Patel, who owns a warehouse in Cleveland, received no personal notice or chance to argue against the increase before the order took effect.

Does the Fourteenth Amendment require the board to give Nora an individualized hearing before enforcing the increase?

Explanation. Due process does not require an individualized hearing when government makes a broadly applicable determination affecting a large number of persons alike. The key distinction is between a general rule about the basis on which assessments are laid and a decision exceptionally affecting a small number of people on individual grounds. Here, the countywide increase for all industrial parcels is general in application, so no personal hearing is constitutionally required. (Derived from Bi-Metallic Investment Co. v. State Board of Equalization (n.d.).)