Civil Procedure – Tax Injunction Act

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U.S. Supreme Court

Civil

Civil Procedure – Tax Injunction Act

A retail association can sue to block a state from collecting sales taxes from customers who purchase from noncollecting retailers.

Petitioner’s suit cannot be understood to “restrain” the “assessment, levy or collection” of Colorado’s sales and use taxes merely because it may inhibit those activities. While the word “restrain” can be defined as broadly as the Tenth Circuit defined it, it also has a narrower meaning used in equity, which captures only those orders that stop acts of assessment, levy, or collection. The context in which the TIA uses the word “restrain” resolves this ambiguity in favor of this narrower meaning. First, the verbs accompanying “restrain”—“enjoin” and “suspend”—are terms of art in equity and refer to different equitable remedies that restrict or stop official action, strongly suggesting that “restrain” does the same. Additionally, “restrain” acts on “assessment,” “levy,” and “collection,” a carefully selected list of technical terms. The Tenth Circuit’s broad meaning would defeat the precision of that list and render many of those terms surplusage. Assigning “restrain” its meaning in equity is also consistent with this Court’s recognition that the TIA “has its roots in equity practice,” Tully v. Griffin, Inc., 429 U. S. 68, 73, and with the principle that “[j]urisdictional rules should be clear,” Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg., 545 U. S. 308, 321 (THOMAS, J., concurring). Pp. 10–12.

735 F. 3d 904, reversed and remanded.

13-1032 Direct Marketing Ass’n. v. Brohl

Thomas, J.; Kennedy, J., concurring; Ginsburg, J., concurring.

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