No. 99-1209
In the Supreme Court of the United States
NOVATO FIRE PROTECTION DISTRICT, PETITIONER
v.
UNITED STATES OF AMERICA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE RESPONDENTS IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
DAVID W. OGDEN
Acting Assistant Attorney General
MARK B. STERN
PETER J. SMITH
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Whether a local fire protection district, which has an obligation under
state law to provide services to all entities within its borders, may, to
avoid providing services to a tax-exempt federal property, redraw its borders
to exclude the federal property and impose on the federal government a fee
for fire protection services in "an amount equivalent to the revenue
the District would receive were the [federal property] on [the] tax rolls."
Pet. App. 6a.
In the Supreme Court of the United States
No. 99-1209
NOVATO FIRE PROTECTION DISTRICT, PETITIONER
v.
UNITED STATES OF AMERICA, ET AL.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIEF FOR THE RESPONDENTS IN OPPOSITION
OPINIONS BELOW
The opinion of the court of appeals (Pet. App. 1a-12a) is reported at 181
F.3d 1135. The opinion of the district court (Pet. App. 13a-22a) is unreported.
JURISDICTION
The judgment of the court of appeals was entered on July 7, 1999. A petition
for rehearing was denied on September 21, 1999. Pet. App. 23a. On December
6, 1999, Justice O'Connor extended the time for filing a petition for a
writ of certiorari to and including January 20, 2000. The petition for a
writ of certiorari was filed on January 19, 2000. The jurisdiction of this
Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. Under California law, fire protection services are generally provided
by Fire Protection Districts. Pet. App. 7a-8a & n.4. The Novato Fire
Protection District (NFPD or District) has an obligation under California
law to provide fire protection and emergency medical services to all entities
located in the District, which is in Marin County, California. Id. at 8a,
13a.
In the 1930s, the United States acquired Hamilton Field and built the Hamilton
Air Force Base on the property, which is located in Marin County. Pet. App.
2a, 13a. Until the base was decommissioned in 1974, the federal government
provided its own primary fire protection services on the base, and NFPD
provided secondary response services. Id. at 2a, 9a. After the base was
decommissioned, the Navy (which became the principal occupant of the property)
sought to obtain NFPD's primary fire protection services. Id. at 2a.
NFPD entered into a contract with the Navy to provide primary fire protection
services on the base. The contract required the federal government to pay
a fee for fire protection services. Pet. App. 2a. NFPD was aware both that
the base was within the district's geographical boundaries and that, as
federal property, the base was exempt from state taxation. Id. at 9a; Court
of Appeals Excerpts of Record (C.A. E.R.) 132. The fee specified in the
contract, however, was not calculated based on the cost of providing fire
protection services to Hamilton Field. Instead, the contract required the
Navy to pay NFPD "an amount equivalent to the revenue the District
would receive were the Navy on property tax rolls." Pet. App. 6a.
Concerned that this charge might constitute an impermissible tax on the
federal government because of NFPD's pre-existing state-law duty to provide
fire protection services within the District, NFPD sought to eliminate the
problem by redrawing the District's boundaries to exclude Hamilton Field.
Pet. App. 2a-3a. NFPD therefore petitioned the Local Agency Formation Commission
for Marin County (LAFCo) for permission to initiate proceedings to detach
the federal property from the District. Id. at 3a.1
As LAFCo's Executive Director explained, NFPD's purpose in seeking detachment
was "to insure that it will receive compensation for any services it
provides to the currently tax exempt properties." C.A. E.R. 132 In
addition, a resolution of NFPD's Board of Directors explained that "the
reason for said proposed detachment is that the District may have the legal
responsibility for providing fire protection to said territory, and said
territory produces no tax revenue to District to pay for such services,
which imposes an intollerable [sic] burden upon the remaining property owners
in the District." C.A. E.R. 137-138.
In response to NFPD's petition, LAFCo passed a resolution approving the
detachment proceedings and calling for an election to confirm NFPD's decision
to exclude Hamilton Field from the District. Pet. App. 3a-4a. Despite formal
objections from the Navy and the Air Force, NFPD's Board adopted a resolution
in favor of detachment. Id. at 4a.
The detachment issue was included on the ballot in the November 1977 local
election. The votes of the residents of the federal property were not separately
tallied. Marin County voters approved detachment of the federal property,
and the California Secretary of State recognized the detachment. Pet. App.
4a.
From the time of the detachment until 1996, the federal government entered
into annual contracts with NFPD to obtain fire protection services for Hamilton
Field. Pet. App. 2a, 14a. By the terms of those contracts, the annual payment
was, as it was in the original contract, in "an amount equivalent to
the revenue the District would receive were the [federal property] on [the]
tax rolls." Id. at 6a.
2. In 1996, NFPD and the United States were unable to agree on the terms
of the contract for fire protection services. In response, NFPD filed suit
in the Superior Court of California for the County of Marin to obtain a
declaration that the detachment was valid and that, as a result, NFPD had
no obligation to provide fire services to Hamilton Field. Pet. App. 4a.
The United States removed the case to the United States District Court for
the Northern District of California, and the parties filed cross-motions
for summary judgment. Id. at 5a.
The district court granted the United States' motion. Pet. App. 22a. The
court first held that the United States was not subject to a state-law statute
of limitations in its challenge to the detachment proceedings and that the
government's claim was not barred by the doctrines of waiver or estoppel.
Id. at 16a-18a.
The court then held that the detachment was invalid because it violated
two state-law requirements. Pet. App. 19a-22a. First, the court concluded
that the detachment violated the version of Cal. Gov't Code Section 56316
that was in effect in August 1977. That provision required that a detachment
proceeding be abandoned if "written protests filed and not withdrawn
prior to the conclusion of the hearing represent * * * [m]ore than 50 percent
of the assessed value of the land therein." Cal. Gov't Code §
56316(a)(1) (West 1966 & Supp. 1976). Because the government "owned
all of Hamilton Field," the court concluded that "its protest
represented more than half the assessed value of the area to be detached,
satisfying the requirement of section 56316." Pet. App. 20a. The court
therefore ruled that "the detachment was invalid." Ibid.
Second, the court concluded that the detachment violated the former Cal.
Gov't Code § 56252(b) (West 1966), which required that votes held in
the area sought to be detached be tallied separately from the votes in the
remainder of the district. Pet. App. 20a-22a. Because "such a vote
did not occur in this case, the detachment was confirmed by a process that
violated California municipal reorganization law, and is invalid."
Id. at 22a.
3. The court of appeals affirmed on federal-law grounds. Pet. App. 12a.
The court held that the detachment and contractual fees that NFPD charged
the United States violated the federal government's constitutional immunity
from state taxation. Id. at 5a-10a. The court explained that inter-governmental
tax immunity, first recognized in M'Culloch v. Maryland, 17 U.S. (4 Wheat.)
316 (1819), applies only to taxes imposed on entities "so closely connected
with the government that the two cannot realistically be viewed as separate
entities." Pet. App. 5a (quoting United States v. New Mexico, 455 U.S.
720, 735 (1982)). The court noted that the "parties do not dispute
that the federal occupants of Hamilton Field enjoy inter-governmental tax
immunity." Ibid.
The court held that the contractual fees that NFPD charged the federal government
constituted an unconstitutional tax. Pet. App. 5a-7a. The court explained
that, "[w]hen analyzing whether a fee constitutes an impermissible
tax, 'we are not bound by the characterization given to a state tax by state
courts or legislatures, or relieved by it from the duty of considering the
real nature of the tax and its effect upon the federal right asserted.'"
Id. at 6a (quoting Carpenter v. Shaw, 280 U.S. 363, 367-368 (1930)). Because
the "fees that the District charged the government in exchange for
continued fire and emergency medical protection were based not upon the
actual cost of services provided to Hamilton Field, but rather upon the
value of the property in question," the court concluded that the fees
amounted to an impermissible tax. Ibid.
The court reached that conclusion in light of its holding that the detachment
of the property violated the Supremacy Clause. Pet. App. 7a-10a. The court
noted that NFPD and LAFCo acknowledged the District's "pre-existing
duty to provide" fire protection services to Hamilton Field. Id. at
9a. The court concluded that, "under the unique circumstances of this
case," ibid., the detachment action "effectively g[a]ve [the]
municipality a method of assessing a property tax from the federal government
in exchange for the provision of any and all basic services," id. at
7a.2
ARGUMENT
The decision of the court of appeals is correct. Furthermore, the result
reached by the court of appeals is, as the district court held, supported
by independent state-law grounds. This Court's review is not warranted.
1. The court of appeals correctly concluded that NFPD's attempt effectively
to assess an ad valorem tax on federal property is impermissible. That conclusion
flows from two well-established principles of constitutional law. First,
"possessions, institutions, and activities of the Federal Government
itself in the absence of [express] congressional consent are not subject
to any form of state taxation." Pet. App. 5a (quoting United States
v. County of Allegheny, 322 U.S. 174, 177 (1944)); see also United States
v. New Mexico, 455 U.S. 720, 733 (1982). Second, "the constitutional
immunity doctrine * * * has, from the time of M'Culloch v. Maryland, [17
U.S. (4 Wheat.) 316 (1819),] barred taxes that 'operat[e] so as to discriminate
against the Government or those with whom it deals.'" Davis v. Michigan
Dep't of the Treasury, 489 U.S. 803, 812 (1989) (quoting United States v.
City of Detroit, 355 U.S. 466, 473 (1958)).
As the court of appeals explained, NFPD recognized but sought to evade those
basic rules of constitutional law. Pet. App. 2a-3a, 9a; see C.A. E.R. 132.
NFPD acknowledged its duty to provide fire protection services to all entities
within the District, including Hamilton Field. Pet. App. 9a. Further, NFPD
did not dispute that, before the 1977 detachment proceedings, Hamilton Field
was within the District. Id. at 8a. NFPD was concerned that, because the
"Hamilton properties remain publically [sic] owned and therein tax
exempt, they will not produce any tax revenues to the District." C.A.
E.R. 132. Aware that it could not levy a direct tax on the federal properties
or refuse selectively to provide fire services to those properties, NFPD
sought to accomplish indirectly what it could not accomplish directly: NFPD
attempted to redraw its boundaries to exclude Hamilton Field, and then sought
to levy on the federal government a charge in an "amount equivalent
to the revenue the District would receive were the Navy on property tax
rolls," Pet. App. 6a, in the hope that it could "ensure that the
District would continue to receive compensation for any services it provided
to the currently tax exempt properties," id. at 3a (internal quotation
marks omitted). See also C.A. E.R. 137-138 ("[T]he reason for said
proposed detachment is that the District may have the legal responsibility
for providing fire protection to said territory, and said territory produces
no tax revenue to District to pay for such services, which imposes an intollerable
[sic] burden upon the remaining property owners in the District.").
In those "unique circumstances," Pet. App. 9a, the court of appeals
correctly concluded that the detachment and contractual charge, when viewed
together, constitute an impermissible attempt to tax the federal government.
See id. at 5a-10a. As the court of appeals explained, "[w]hen analyzing
whether a fee constitutes an impermissible tax, '[federal courts] are not
bound by the characterization given to a state tax by state courts or legislatures,
or relieved by it from the duty of considering the real nature of the tax
and its effect upon the federal right asserted.'" Id. at 6a (quoting
Carpenter v. Shaw, 280 U.S. 363, 367-368 (1930)). Looking to "the effect,
not the form, of the local government action," id. at 7a (citing County
of Allegheny, 322 U.S. at 184), the court of appeals inquired whether the
detachment, in conjunction with NFPD's decision to assess a contractual
fee in an "amount equivalent to the revenue the District would receive
were the Navy on property tax rolls," id. at 6a, was in effect an attempt
to tax the federal government.
As the court of appeals explained, the contractual fee that NFPD sought
to charge the federal occupants of Hamilton Field was not based on "the
actual cost of services provided" but rather the value of the property
itself. Pet. App. 6a. The charge was therefore not a permissible "user
fee," which is a payment "given in return for a government-provided
benefit." United States v. City of Huntington, 999 F.2d 71, 74 (4th
Cir. 1993); cf. United States v. City of Columbia, 914 F.2d 151 (8th Cir.
1990) (holding that city utility fee not an impermissible tax). Instead,
by assessing the fee in an "amount equivalent to the revenue the District
would receive were the Navy on property tax rolls," Pet. App. 6a, NFPD
levied an ad valorem property tax on the United States. See Michelin Tire
Corp. v. Wages, 423 U.S. 276, 287 (1976) ("[Ad valorem] property taxes
are taxes by which a State apportions the cost of such services as police
and fire protection among the beneficiaries according to their respective
wealth.").
This Court has made clear that a State or locality violates the Supremacy
Clause when the "substance" of its action "is to lay an ad
valorem general property tax on property owned by the United States."
County of Allegheny, 322 U.S. at 185, 192; accord City of Huntington, 999
F.2d at 74; City of Cincinnati v. United States, 39 Fed. Cl. 271, 274 (1997)
(storm drainage charge constitutes impermissible tax because it "is
based upon the size and the development intensity of the commercial property
owned by the federal government, and not on the services actually used"),
aff'd, 153 F.3d 1375 (Fed. Cir. 1998). The court of appeals here thus correctly
concluded that the detachment proceedings and contractual assessment constituted
an impermissible attempt to tax the United States.
2. Review of the decision in this case would be particularly inappropriate
because, as the district court held, the result reached by the court of
appeals is also supported by independent state-law grounds. Pet. App. 19a-22a.
As the district court held (id. at 19a), the detachment violated the state-law
requirement that a detachment proceeding be abandoned if "written protests
filed and not withdrawn prior to the conclusion of the hearing represent
* * * [m]ore than 50 percent of the assessed value of land therein."
Cal. Gov't Code § 56316 (West 1966 & Supp. 1976). Because the federal
government's "protest represented more than half the assessed value
of the area to be detached," the court correctly held that "the
detachment was invalid." Pet. App. 20a.
The district court also concluded that the detachment violated the separate-tallying
requirement of former Cal. Gov't Code § 56252(b) (West 1966). Pet.
App. 20a-22a. Because separate votes "did not occur in this case, the
detachment was confirmed by a process that violated California municipal
reorganization law, and is invalid." Id. at 22a. Because the detachment
was invalid, NFPD continues to have an obligation to provide fire services
to Hamilton Field.
3. None of the reasons advanced by petitioner justifies this Court's review
of this case.
a. Petitioner's contention (Pet. 11, 13) that the decision of the court
of appeals conflicts with Washington v. United States, 460 U.S. 536 (1983),
is incorrect. In Washington, this Court upheld a sales and use tax that
the State imposed on "contractors that work for the federal government."
Id. at 539. The Court reaffirmed, however, the long-standing rule that a
State may not lay a tax directly on the United States. Id. at 540. The charge
imposed by NFPD in this case was imposed not on a third party but directly
on the federal government.
b. Petitioner also errs in contending (Pet. 14-15) that Congress waived
the government's immunity from liability for the NFPD charge by enacting
15 U.S.C. 2210. The court of appeals did not discuss Section 2210 in its
opinion, and that statute has no bearing on the question presented by the
petition.
Section 2210 provides:
Reimbursement for costs of firefighting on Federal property
(a) Filing of claims
Each fire service that engages in the fighting of a fire on property which
is under the jurisdiction of the United States may file a claim with the
Administrator for the amount of direct expenses and direct losses incurred
by such fire service as a result of fighting such fire. The claim shall
include such supporting information as the Administrator may prescribe.
(b) Determination
Upon receipt of a claim filed under subsection (a) of this section, the
Administrator shall determine-
(1) what payments, if any, to the fire service or its parent jurisdiction,
including taxes or payments in lieu of taxes, the United States has made
for the support of fire services on the property in question;
(2) the extent to which the fire service incurred additional firefighting
costs, over and above its normal operating costs, in connection with the
fire which is the subject of the claim; and
(3) the amount, if any, of the additional costs referred to in paragraph
(2) of this subsection which were not adequately covered by the payments
referred to in paragraph (1) of this subsection.
15 U.S.C. 2210.
Section 2210 does not address the federal government's immunity from general,
annual assessments that finance local fire protection services. Indeed,
the provision does not directly address the question of inter-governmental
tax immunity. As its title indicates, Section 2210 creates a mechanism to
reimburse state and local governments for expenses that they actually incur
in combating fires on federal property. Subsection (a) provides that state
and local governments may file claims for reimbursement of direct expenses
and direct losses incurred in rendering fire fighting services. Although
Section 2210(b) provides that claims against the United States are to be
offset by any taxes (or payments in lieu of taxes) that have been made for
local fire protection services, the statute does not waive the federal government's
immunity from state and local taxes. Instead, the statute merely reduces
the amount of reimbursement when federal agencies or instrumentalities have,
pursuant to other federal statutes that waive federal immunity from state
and local taxation, paid taxes that support local fire services.3 For example,
Section 2210(b) provides for a reduction in fire-control claims against
Federal Reserve Banks, which must pay state and local real estate taxes
under 12 U.S.C. 531. Similarly, Section 2210(b) provides for a reduction
in claims against the United States when the federal government has made
payments "in lieu of taxes," such as payments pursuant to federal
statutes that compensate local governments for the loss of revenue occasioned
by their inability to assess taxes against certain federal property located
in the municipality. See 60 Comp. Gen. 637, 640 (1981). Statutes such as
31 U.S.C. 6902 (1994 & Supp. IV 1998) provide for payments by the federal
government to units of local governments in which certain tax-exempt land
owned by the federal government is located. Such payments, when made, may
be used "for any governmental purpose." 31 U.S.C. 6902(a)(1) (Supp.
IV 1998).
c. There is also no merit to petitioner's argument (Pet. 15) that the court
of appeals' decision "imposes on state and local governments a constitutional
obligation to provide free services to the federal government ad infinitum."
The decision of the court of appeals invalidated only the particular means
utilized by petitioner to seek payment and did not, for example, address
whether reimbursement might be available to petitioner under 15 U.S.C. 2210,
for the cost of services actually rendered. Moreover, the obligation of
NFPD to provide fire services to Hamilton Field arises under state, not
federal, law. See Pet. App. 8a & n.4, 13a; Cal. Health & Safety
Code § 13821 (West 1964); id. § 13811 (1994). Although California
may elect generally to restrict the availability of fire protection services,
one of its localities may not, because the federal government enjoys tax
immunity, evade its state-law duty to provide those services to federal
properties within its borders.4
Likewise, a locality may not, as NFPD has here, assess an ad valorem tax
on the United States in return for the services it is required to provide
under state law. Otherwise, "virtually all of what are now considered
taxes could be transmuted into user fees by the simple expedient of dividing
what are generally accepted as taxes into constituent parts, e.g., a police
fee." Pet. App. 7a (quoting City of Huntington, 999 F.2d at 74). This
Court's precedents do not allow such a result. See, e.g., County of Allegheny,
322 U.S. at 185, 192.
d. Finally, petitioner's contention (Pet. 17) that the court of appeals'
decision conflicts with Printz v. United States, 521 U.S. 898 (1997), lacks
merit. Congress has not commanded the officers of NFPD to "enforce
a federal regulatory program." Id. at 935. Instead, as noted above,
the State of California has imposed on NFPD the obligation to provide fire
services within its District. Nothing in Printz suggests that NFPD may impose
an ad valorem tax on federal property to fund that obligation.
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
DAVID W. OGDEN
Acting Assistant Attorney General
MARK B. STERN
PETER J. SMITH
Attorneys
APRIL 2000
1 At the time, local agency formation commissions had the power to organize
fire protection districts. See Cal. Gov't Code § 54774 (West 1966 &
Supp. 1976); Pet. App. 3a nn.2-3. Detachment was governed by Cal. Gov't
Code §§ 56000-56550 (West 1966) and defined as "the detachment,
deannexation, exclusion, deletion or removal from a district of any portion
of the territory of such district." Cal. Gov't Code § 56038 (West
1966).
2 Because the court of appeals found the charges and detachment invalid
under federal law, the court did not address the district court's holding
that the detachment was invalid under California law. Pet. App. 11a.
3 Other federal statutes explicitly waive federal immunity from state and
local taxation in specific circumstances. See, e.g., 12 U.S.C. 531 ("Federal
Reserve banks * * * shall be exempt from Federal, State, and local taxation,
except taxes upon real estate."); 12 U.S.C. 1452(e) (The Federal Home
Loan Mortgage Corporation "shall be exempt from all taxation * * *
except that any real property of the Corporation shall be subject to State,
territorial, county, municipal, or local taxation to the same extent according
to its value as other real property is taxed."); 15 U.S.C. 713a-5 (same
for taxation of real property owned by Commodity Credit Corporation). As
those statutes demonstrate, when Congress intends to waive federal immunity
from state and local taxation, it expresses its intention clearly.
4 Indeed, as noted above, the district court concluded that the detachment
proceedings violated state law. Pet. App. 19a-22a.