United States District Court, D. Oregon
MICHAEL H. SIMON, DISTRICT JUDGE.
States Magistrate Judge Paul Papak issued Findings and
Recommendation in this case on April 25, 2018. ECF 30. Judge
Papak recommended that Defendants' Joint Motion to
Dismiss be granted with prejudice and that Plaintiff's
Motion to Strike be denied.
the Federal Magistrates Act (“Act”), the Court
may “accept, reject, or modify, in whole or in part,
the findings or recommendations made by the
magistrate.” 28 U.S.C. § 636(b)(1). If a party
files objections to a magistrate judge's findings and
recommendations, “the court shall make a de novo
determination of those portions of the report or specified
proposed findings or recommendations to which objection is
made.” Id.; Fed.R.Civ.P. 72(b)(3).
those portions of a magistrate judge's findings and
recommendations to which neither party has objected, the Act
does not prescribe any standard of review. See Thomas v.
Arn, 474 U.S. 140, 152 (1985) (“There is no
indication that Congress, in enacting [the Act], intended to
require a district judge to review a magistrate's report
to which no objections are filed.”); United States
v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en
banc) (holding that the court must review de novo
magistrate judge's findings and recommendations if
objection is made, “but not otherwise”). Although
in the absence of objections no review is required, the Act
“does not preclude further review by the district
judge sua sponte . . . under a de novo or
any other standard.” Thomas, 474 U.S. at 154.
Indeed, the Advisory Committee Notes to Fed.R.Civ.P. 72(b)
recommend that “[w]hen no timely objection is filed,
” the Court review the magistrate judge's
recommendations for “clear error on the face of the
timely filed an objection (ECF 35), to which Defendants
responded. ECF 36. Plaintiff objects to the portions of Judge
Papak's recommendation finding that: (A) the Tax
Injunction Act (“TIA”) does not remove the
Court's jurisdiction over this case; (B) comity does not
warrant remanding this case to state court; (C) Defendants
have standing to challenge § 8.02.070 of the Clackamas
County Code (“CCC”); and (D) the enactment of CCC
§ 8.02.070 violated Oregon Revised Statute
(“ORS”) § 203.055. The Court reviews de
novo the portions of Judge Papak's Findings and
Recommendation to which Plaintiff has objected.
Court notes that no party has objected to, and the Court
finds no clear error with, the Legal Standards and Material
Facts sections of the Findings and Recommendation.
Accordingly, the Court adopts those portions of the Findings
The Court's Jurisdiction
argues that the Court does not have jurisdiction over this
case under the TIA. The TIA “does not bar collection
suits [in the district court], nor does it prevent taxpayers
from urging defenses in such suits that the tax for which
collection is sought is invalid.” Jefferson Cty.,
Alabama v. Acker, 527 U.S. 423, 435 (1999). Plaintiff
argues, however, that although Plaintiff seeks to collect
taxes in the future, the TIA bars jurisdiction in this case
because Plaintiff did not seek to collect taxes in this
particular action. Plaintiff cites to Orange Cty. v.
Expedia, Inc., which held that “[m]erely because
the end goal of the Plaintiffs will be a collection of taxes
in a future suit against Defendants does not mean that this
particular suit is a collection action.” 440
F.Supp.2d 1341, 1344 (M.D. Fla. 2006) (emphasis in original)
(holding that the TIA barred jurisdiction when a tax
collector brought an action seeking declaratory judgment
regarding the application of a tax to the defendants). Thus,
Plaintiff argues, the Court should reject the finding that
the TIA does not bar jurisdiction merely because
Plaintiff's goal is for Defendants collect and remit
taxes in the future.
filed its complaint in state court, alleging that CCC Chapter
8.02 creates a County transient lodging tax of six percent,
this tax is to be charged by the operator or intermediary of
transient or short-term rentals, such operators or
intermediaries must register with the County, Defendants are
such operators, Defendants have failed to register, and
Defendants have failed to collect the six percent tax or pay
it to the County. For its remedy, Plaintiff requests a
declaration that: (1) each Defendant is subject to the
registration requirements of CCC § 8.02.070; (2) each
Defendant has failed to register as required; (3) each
Defendant is required to register or cease all intermediary
business activity; and (4) each Defendant is assessed a
penalty of $2, 000 or $500 per day until registered and in
compliance with CCC Chapter 8.02. Plaintiff also requests its
costs and prevailing party fees. Defendants then removed the
case to this Court.
the circumstances of this case, the Court finds Orange
County to be both distinguishable and unpersuasive.
First, Orange County is distinguishable because the
plaintiff in Orange County sought a declaration
clarifying that it had the authority to seek the taxes it was
ultimately going to request. That is not the case here.
Clackamas County is not requesting a declaration that it has
the authority to seek the six percent transient tax. Instead,
Clackamas County's allegations demonstrate that it
presumes its authority to collect that tax.
the reasoning of Orange County is brief, conclusory,
and inconsistent with the reasoning of Jefferson
County. In Jefferson County, the Supreme Court
determined that the TIA was not intended “to prohibit
taxpayers from defending suits brought by a
government to obtain a collection of tax” because
“a suit to collect a tax is surely not brought to
restrain state action.” 527 U.S. at 433-35 (emphasis
added). The Supreme Court in Jefferson County noted
that the TIA was “shaped by state and federal
provisions barring anticipatory actions by taxpayers to stop
the tax collector from initiating collection
proceedings.” Id. at 435. This case is not an
anticipatory action by a taxpayer to stop the tax collector
from initiating a collection proceeding-it is a case brought
by Clackamas County to obtain declaratory relief and impose
fines and penalties. Further, the discussion in Jefferson
County supports a finding that there is no meaningful
difference between a suit brought by a tax collector to
collect taxes and a suit brought by a tax collector to impose
fines, penalties, or other obligations, because neither suit
is brought to restrain state action.
Court also notes that Orange County appears to be
the only post-Jefferson County case to hold that the
TIA bars jurisdiction over a case initiated by a taxing
authority. Moreover, the Eighth Circuit has criticized
Orange County, noting that the court failed to
“analyz[e] the text of [the TIA], its purpose, or its
legislative history.” City of Jefferson City, Mo.
v. Cingular Wireless, LLC, 531 F.3d 595, 604 (8th Cir.
Court rejects Plaintiff's other arguments in support of
the proposition that the TIA strips this Court of
jurisdiction to adjudicate Plaintiff's claims.
Accordingly, the Court adopts the portion of the Findings and
Recommendation relating to the TIA and concluding that it
does not bar the Court's jurisdiction to adjudicate