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Camps Newfound/Owatonna, Inc. v. Town of Harrison

Supreme Judicial Court of Maine · 1997 · Constitutional Law

Constitutional LawPropertyTaxCivil Proceduretax abatementtax refundCommerce Clause42 U.S.C. § 1983

Facts

The Camp challenged Maine's tax-exemption statute after the United States Supreme Court determined that 36 M.R.S.A. § 652(1)(A)(1) unconstitutionally denied certain exemptions to nonprofits serving mostly nonresidents. Before bringing this constitutional action, the Camp had pursued a 1989 tax abatement challenge based only on valuation of its property, obtained a partial abatement, lost before the county commissioners and Superior Court, and then lost on appeal in Camps I. In 1992, the Camp demanded refunds for 1989, 1990, and 1991 and a continuing exemption on constitutional grounds; after the Town denied relief, the Camp filed this action. A separate 1990 abatement proceeding remained pending before the county commissioners because the parties had agreed to stay it.

Issue

Whether the Camp could maintain claims under 42 U.S.C. §§ 1983 and 1988 despite Maine's tax-abatement and declaratory-judgment remedies; whether res judicata barred the Camp's claim for a refund of 1989 taxes; whether collateral estoppel barred its claim for a refund of 1990 taxes; and how interest, penalties, and fees should be calculated on any refund.

Rule

In state tax cases, relief under 42 U.S.C. § 1983 is unavailable when state law provides an adequate legal remedy, and § 1988 fees are unavailable when no § 1983 relief can be awarded. Under Maine claim preclusion doctrine, a later action is barred when the same parties or their privies are involved, a valid final judgment exists, and the matters in the second action were or might have been litigated in the first action; Maine defines a cause of action by a transactional test based on the aggregate of connected operative facts. A party may not split a cause of action by withholding claims that could have been joined in a Rule 80B action. For tax refunds, 36 M.R.S.A. § 506-A controls over general prejudgment-interest provisions and requires interest from the date of overpayment; delinquency interest, late-payment penalties, and lien fees that became part of the tax are also refundable.

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

Lena Ortiz owns a nonprofit retreat center in Burlington, Vermont, but her property is taxed by the town where it sits in Maine under a statute she believes violates the Commerce Clause. Maine law gives her an abatement process, judicial review under Rule 80B, and access to declaratory relief, but she instead files in Maine Superior Court seeking only declaratory and injunctive relief under 42 U.S.C. § 1983.

Should the court allow Lena's § 1983 claim to proceed?

Explanation. The majority held that, in state tax cases, state courts must refrain from granting relief under § 1983 when state law provides an adequate legal remedy. Maine's abatement process, Rule 80B review, and declaratory judgment procedures are adequate. The standard is adequacy, not whether the state remedy is the fastest possible or whether the claim is constitutional in nature. (Derived from Camps Newfound/Owatonna, Inc. v. Town of Harrison (1997).)