Appeal from the United States District Court for the Southern District of Illinois. No. 07-cv-00773-J. Phil Gilbert, Judge.
The opinion of the court was delivered by: Manion, Circuit Judge.
ARGUED SEPTEMBER 26, 2008
Before RIPPLE, MANION, and SYKES, Circuit Judges.
Scott Air Force Base Properties, LLC ("the Company"), brought this action against the County of St. Clair, Illinois ("the County") seeking a declaratory judgment that its leasehold interest in two parcels of land located on the Scott Air Force Base is not subject to the property tax which the County assessed. The district court held that the Tax Injunction Act ("TIA" or "the Act"), 28 U.S.C. § 1341, divested it of subject matter jurisdiction and dismissed the case. The Company has appealed. We affirm.
The Military Housing Privatization Initiative ("MHPI"), enacted in 1996 as part of the National Defense Authorization Act, Pub. L. No. 104-106, § 2801, 110 Stat. 186, 544-51 (codified as amended at 10 U.S.C. §§ 2871-2885), is intended to attract private investment and expertise to build housing for members of the military and their families. Developers submit competitive bids and the federal government leases land to the successful bidder to construct housing developments. This process provides necessary housing on military bases with no capital cost to the government and at the same time supplies the developer with reliable tenants with a housing allowance to pay the rent.
The Company saw this as an attractive opportunity and entered into a lease agreement with the United States through the Secretary of the Air Force, agreeing to construct, operate, and maintain rental housing units for military personnel on land located on the Scott Air Force Base for a term of fifty years. The government also executed to the Company a quit claim deed to improvements on the land and entered into a restrictive covenant and use agreement with the Company.
While this appeared to be an attractive investment opportunity for the Company, the County of St. Clair, Illinois (where Scott Air Force Base is located) also saw this as an attractive opportunity to obtain some tax revenue. The County added the Company's leasehold interest in two parcels of the leased land to the County's tax assessment rolls and assessed an ad valorem tax*fn1 in the amount of $15,681,300.00 on the Company's interest in each parcel for the 2007 tax year. In response, the Company filed a complaint for declaratory judgment in the United States District Court for the Southern District of Illinois, asserting that the assessment was contrary to various provisions of the United States Constitution, federal statutory law, and Illinois law, and invoking the district court's subject matter jurisdiction under 28 U.S.C. § 1331. The Company sought a declaratory judgment that its leasehold interest was not subject to the County's assessment and that all transactions entered into under the MHPI were exempt from state taxation.
The County moved to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), contending that the TIA removed the district court's jurisdiction to grant the declaratory relief the Company had requested. In response to the County's motion, the Company argued that the Act's jurisdictional bar did not apply because the declaratory judgment sought by the Company concerned a claim of preemption under federal law.
The district court granted the County's motion to dismiss. The court concluded that because a plain, speedy, and efficient remedy was available to the Company in the Illinois courts to challenge the County's tax assessment, the TIA divested it of jurisdiction to render the declaratory relief which the Company sought.*fn2 The Company appeals.
Our review of the district court's dismissal of the case for want of subject matter jurisdiction is de novo, and we accept all facts stated in the complaint as true and draw all reasonable inferences in the Company's favor. Newell Operating Co. v. Int'l Union of United Auto., Aerospace, & Agric. Implement Workers of Am., 532 F.3d 583, 587 (7th Cir. 2008).
The Company asserts that the district court erred by not addressing two threshold questions before reaching the TIA: 1) whether the subject parcels were under the exclusive legislative jurisdiction of the United States pursuant to Article I, Section 8, Clause 17 of the Constitution, and 2) if so, whether Congress authorized state taxation of the land through the MHPI or the lease agreement the parties entered in accordance with the statute.
In support of its position, the Company cites Humble Pipe Line Co. v. Waggonner, 376 U.S. 369 (1964), and Atlantic Marine Corps Communities, LLC v. Onslow County, North Carolina,497 F. Supp. 2d 743 (E.D.N.C. 2007). Humble Pipe Line was an appeal from the Supreme Court of Louisiana where the Supreme Court of the United States considered "whether the United States has such exclusive jurisdiction over a . . . tract of land . . . on which the Barksdale Air Force Base is located that Louisiana is without jurisdiction to levy an ad valorem tax on privately owned property situated on the tract." 376 U.S. at 370. However, the Court did not mention the TIA-nor should it have-because the case was liti-gated in the Louisiana state courts and never appeared in a district court of the United ...