Argued June 4, 2013
Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 11 CV 04028 — Sharon Johnson Coleman, Judge.
Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 10 CV 06682 — Matthew F. Kennelly, Judge.
Before Flaum, Sykes, and Hamilton, Circuit Judges.
Hamilton, Circuit Judge.
These appeals present issues concerning local taxpayers' ability to sue local tax officials for alleged federal constitutional violations. Both cases stem from news reports in 2009 claiming that then-Illinois State Represen- tative Paul Froehlich had offered property tax reductions to his constituents and implying that he received campaign contributions and political support in exchange. The news reports claimed that Rep. Froehlich arranged for many of his constituents' property taxes to be reduced on appeal to the Cook County Board of Review. The plaintiffs in these two cases, Louis Capra and Satkar Hospitality (and two of its owners), had appealed their property tax assessments and had won such reductions on appeal. After several news reports high- lighted the potential impropriety of their reductions, though, both were called back before the Board of Review and the Board reversed both reductions.
Capra and Satkar Hospitality filed these separate federal lawsuits against the Cook County Board of Review and its individual members and staff alleging several constitutional violations. We address the two cases together because the issues involved are so similar. As both district courts held, the individual defendants are entitled to absolute quasi-judicial immunity and the Board itself is not. We conclude, however, that the damages claims against the Board cannot proceed. They are not cognizable in federal courts under Fair Assessment in Real Estate Ass'n v. McNary, 454 U.S. 100, 116 (1981), which requires federal courts to abstain in suits for damages under 42 U.S.C. § 1983 challenging state and local tax collection, at least where an adequate state remedy is available, as it is here.
I. Factual and Procedural Background
In April and May 2009, a political blog and a Chicago television station began reporting on Illinois State Rep. Paul Froehlich. The reports suggested that Rep. Froehlich offered his constituents reductions in their county property taxes in exchange for political favors. A companion appeal, Satkar Hospitality v. Fox Television Stations, Inc., No. 11-3572, addresses the content of the reports in greater detail, but here it suffices to say that the reports at least implied that Rep. Froehlich had handled his constituents' property tax appeals in a way that consistently resulted in tax reductions, and that he had done so in exchange for political favors and support. The reports specifically highlighted Satkar Hospitality, reporting that it and its owners had donated thousands of dollars worth of hotel rooms to Froehlich's campaign.
Both plaintiffs here, Satkar Hospitality and Louis Capra, appealed their property tax assessments for the years 2007 and 2008 and won reductions. But in June 2009, after the publicity about Rep. Froehlich, both were called back before the Board of Review for new hearings. Both plaintiffs' complaints allege that in these second hearings, the Board inquired not into the value of their properties but into the nature of their relation- ships with Rep. Froehlich. The Board rescinded the reductions for both plaintiffs. Plaintiffs allege that the Board, when questioned about its actions, claimed that "we can do anything we want."
The plaintiffs filed these federal lawsuits against the Board itself as well as its three commissioners (Larry Rogers, Joseph Berrios, and Brendan Houlihan), its chief deputy commissioner (Scott Guetzow), and its first assistant commissioners (Thomas Jaconetty and John Sullivan). Both complaints allege that the Board and its commissioners and staff (the "individual defendants") violated the plaintiffs' right to equal protection by singling them out for their association with Rep. Froehlich, their right to due process by arbitrarily rescinding their reductions without a fair hearing, and their First Amendment rights by retaliating against them based on their political ties to Rep. Froehlich. Both plaintiffs also allege that any appeal available to them from the Board's decisions would not satisfy due process. They allege that their appeals before the state tax appeal board are "red-flagged" and could take seven to eight years to decide. They also allege that appeal to the Cook County Circuit Court would not provide impartial review because judges in that court are slated for election by the county Democratic Party, of which two individual defendants are leaders.
In the Satkar Hospitality case, the district court denied the defendants' motion to dismiss for failure to state a claim but granted the individual defendants' motion to dismiss on the ground that they are absolutely immune because their work reviewing tax appeals is quasi-judicial. Satkar Hospitality Inc. v. Cook County Bd. of Review, 819 F.Supp.2d 727 (N.D. Ill. 2011). As the sole remaining defendant, the Board moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), arguing that it is entitled to either the same quasi-judicial absolute immunity as the individual defendants or Eleventh Amendment sovereign immunity. The district court denied the motion, finding that the Board, as a municipal entity, is not entitled to quasi-judicial absolute immunity and that the Eleventh Amendment does not apply because the Board is a county entity operating independently of the state treasury. Satkar Hospitality Inc. v. Cook County Bd. of Review, No. 10 C 6682, 2012 WL 3151376 (N.D. Ill. Aug. 2, 2012). The plaintiffs appealed the district court's finding of absolute immunity for the individual defendants. The Board cross-appealed the district court's finding that the Board was not entitled to absolute immunity. We have jurisdiction because the district court properly certified its dismissal of the individual defendants as a final judgment under Federal Rule of Civil Procedure 54(b), and the Board's appeal from the denial of its immunity defense is appealable under the collateral order doctrine. See Behrens v. Pelletier, 516 U.S. 299, 307 (1996); Nixon v. Fitzgerald, 457 U.S. 731, 742–43 (1982).
In the Capra case, the district court also found that the individual defendants were entitled to quasi-judicial absolute immunity but that the Board was not. Capra v. Cook County Bd. of Review, No. 11-cv-4028, 2012 WL 1969393 (N.D. Ill. May 30, 2012). The district court in Capra, however, dismissed the entire case, holding that Capra had failed to state a claim against the Board for a violation of his equal protection or due process rights. (Capra had conceded the First Amendment claim. Unlike the Satkar plaintiffs, he never had any contact with Rep. Froehlich and had not contributed to his campaign.) Capra has appealed the final judgment against him.
These section 1983 actions for damages against the Board and its members and staff face obstacles they cannot overcome. We begin by explaining why the individual defendants are entitled to quasi-judicial absolute immunity. We then explain why the Board itself is not entitled to the same absolute immunity but that the damages claims against the Board itself must be dismissed without prejudice based on comity concerns under Fair Assessment in Real Estate Ass'n v. McNary, 454 U.S. ...