Judicial Federalism - Federal Courts Author-1

X. Judicial Federalism

Anti-Injunction Act

The Anti-Injunction Act (“AIA”) currently provides that a federal court “may not grant an injunction to stay proceedings in a State court except [1] as expressly authorized by Act of Congress, [2] where necessary in aid of its jurisdiction, or [3] to protect or effectuate its judgments.” 28 U.S.C. § 2283.

BACKGROUND. The AIA, as originally enacted in 1793. (No one is sure why the AIA was enacted; Professor Mayton argues that the Act’s purpose was to prohibit a single Justice from enjoining a state proceeding while riding circuit). As originally enacted, the AIA did not recognize any exceptions. However, courts crafted several exceptions, for situations where (1) another Act of Congress expressly or impliedly authorized injunctions to stay state proceedings; (2) the stayed action was in rem; (3) the stayed action would have relitigated a federal court decision; or (4) the plaintiff in federal court was the United States or a federal agency asserting “superior federal interests.”

In Toucey, the Court expressly disavowed the relitigation exception and indicated that it intended to adopt a more textually constrained approach. In response, the 1948 amendments added explicit exceptions and indicated, in legislative history, that Congress intended to restore “the basic law as generally understood and interpreted prior to the Toucey decision.”

The AIA and Certiorari Jurisdiction. Note that the AIA (and similar statutes, including the Johnson Act and the Tax Injunction Act) were enacted prior to the abolition of mandatory Supreme Court appellate jurisdiction. The abolition of mandatory Supreme Court appellate jurisdiction may affect the AIA’s constitutionality if one believes that there is a right to have some federal court adjudicate every federal claim.

“AN INJUNCTION TO STAY PROCEEDINGS.” Functional Approach. Injunctions that have the same effect as a stay of proceedings are barred by the AIA even if they do not take the form of an “injunction to stay proceedings.” Thus, Atlantic Coast held that the AIA prohibited a federal court from ordering the parties to refrain from utilizing the results of a completed state proceeding.

Injunction Prohibiting Commencement of Proceedings Are Permissible. Injunctions issued prior to state court consideration of the merits may be permissible. Thus, Ex Parte Young held that the AIA did not prohibit a federal court from issuing an injunction against any criminal proceedings not yet instituted.

Prejudgment Garnishment. Lynch held that a prejudgment garnishment was not a “proceeding” in state court within the meaning of the AIA, and hence could be enjoined by a federal court.

EXCEPTIONS. Atlantic Coast indicated that the reach of the AIA should be applied literally, its exceptions should not be construed narrowly, and that “any doubts as to the propriety of a federal injunction against state court proceedings should be resolved in favor of permitting the state court to proceed.”

Under Atlantic Coast, a federal court is not permitted to enjoin a state court proceeding merely because (1) the proceedings interfere with a protected federal right or (2) invade an area preempted by federal law, even if the interference or invasion is “unmistakably clear.”

No Exception For Later-Filed In Personam Proceedings. The AIA precludes a federal court from enjoining a later-filed in personam state court action (Kline v. Burke Construction). Under this approach, both actions will proceed, and the law of preclusion will apply once one of the actions has come to judgment.

Fraudulent State Court Judgments. Prior to 1948, several Supreme Court decisions sustained the power of federal courts to enjoin litigants form enforcing judgments fraudulently obtained in state courts.

Injunctions Sought By The United States. Leiter Minerals recognized an exception to the AIA for injunctions sought by the United States.

Expressly Authorized. In light of the 1948 Act’s legislative history, the Court has construed “expressly authorized” to mean “impliedly authorized.” The test is “whether an Act of Congress, clearly creating a federal right or remedy enforceable in a federal court of equity, could be given its intended scope only by the state of a state court proceeding” (Mitchum).¹

“In Aid of Its Jurisdiction.” This exception confirms the “res” exception, and authorizes federal courts to stay proceedings in state cases that have been removed. However, the provision does not authorize federal courts to enjoin state court proceedings that encroach on the exclusive jurisdiction of the NLRB (Richman Brothers), and most lower courts have similarly held that the exception does not authorize federal courts to enjoin state court proceedings that encroach on the exclusive jurisdiction of federal district courts.

Relitigation Exception. For the relitigation exception to apply, the earlier federal court decision must have disposed of the merits of the legal issue being addressed in state court (Choo).² Moreover, the relitigation exception is limited “to those situations in which the state court has not yet ruled on the merits of the res judicata issue” (Parsons Steel). If a state court has ruled that a previous federal proceeding does not bind it, the federal court must respect this decision, per the Full Faith and Credit Statute (§1738), even if an injunction could have issued under the relitigation exception prior to the state court’s finding of no preclusion.

AIA AND §1983. Mitchum held that §1983 creates an “expressly authorized” exception to the AIA. The Court relied on evidence that §1983 was intended to enforce the provisions of the Fourteenth Amendment against action “under color of state law” that denies federal rights, whether taken by state executive, legislative, or judicial officers. Maine v. Thiboutot makes clear that §1983 reaches denial of any federal right, regardless whether statutory or constitutional.

“Under Color of State Law.” An action taken by a state court with respect to private party litigation can violate §1983. Although “a private party’s mere invocation of state legal procedures” cannot cause the state judiciary to violate §1983, a state court’s issuance of an injunction or authorization of ex parte attachment in a private party litigation can violate §1983 (Lugar).

The Johnson Act

The Johnson Act (28 U.S.C. § 1342) provides that federal district courts shall not have jurisdiction to enjoin the operation of any order of a state administrative agency or local body fixing rates for public utilities, when the following conditions exist:

1. Jurisdiction is based solely on diversity or arises under the constitution;

2. The order does not interfere with interstate commerce;

3. The order has been made after reasonable notice and hearing; and

4. “A plain, speedy, and efficient remedy” exists in State court.

The Act does not bar federal courts from issuing injunctions against preempted state actions (IBEW, 9th Cir.), or injunctions sought by the United States.

For the Johnson Act to apply, there must be an opportunity to appeal to the discretion of the state court for a stay of the order pendente lite (Mountain States).

Tax Injunction Act

28 U.S.C. § 1341 provides that “the district courts shall not enjoin . . . collection of any tax under State law where a plain, speedy, and efficient remedy may be had in the courts of such State.”

Scope. The TIA does not prohibit the issuance of an injunction against taxes that violate the Establishment Clause (Hibbs), or infringe upon a fundamental right, or discriminate on the basis of a protected class (see Levin). However, it is possible that the TIA prohibits the issuance of an injunction at the behest of a commercial actor against preferential treatment of its competitor (Levin). Thus, Hibbs appears to be a fairly narrow exception.

Declaratory Judgments. The TIA has been read to bar the issuance of declaratory judgments concerning the legality of state taxes (Grace Brethren).

“PLAIN, SPEEDY, AND EFFICIENT REMEDY.” In general, this “exception” to the TIA is narrowly construed (Grace Brethren). It is not necessary that the taxpayer have an offensive remedy in state court, provided that the taxpayer is entitled to raise challenges to the tax in defense to a collection action (Kohn). A refund remedy for payment under protest is sufficient remedy for purposes of the TIA (Grace Brethren). A taxpayer cannot avail himself of the exception to the TIA if he has forfeited an otherwise satisfactory remedy (Randall, 9th Cir.).

Plain. Where it is “speculative” whether the state will provide relief, there is no sufficient state remedy (Hillsborough).

Rosewell advanced a procedural interpretation of the requirement of “plain remedy,” such that the adequacy of process and the ability to raise constitutional challenges to the tax, not the stated remedy under current state law, is relevant. In dissent, Justice Stevens argued that the TIA must contemplate federal review of the substantive adequacy of the state remedy.

Speedy. Customary delay of two years until receipt of refund does not render the remedy insufficient. (Rosewell).

Efficiency. A state remedy that “would require the filing of over three hundred separate claims in fourteen different counties” to protect a single federal claim is not “efficient” (Redwine). But the fact that the taxpayer has to travel across state lines to obtain a remedy does not render the remedy inefficient (Tully).

INTEREST. A remedy may be sufficient for TIA purposes even if it does not include interest payments, as long as...