                    IN THE SUPREME COURT OF MISSISSIPPI

                                 NO. 2011-CA-01274-SCT

COMMONWEALTH BRANDS, INC., THE CORR-
WILLIAMS COMPANY, AND VICKSBURG
SPECIALTY COMPANY

v.

J. ED MORGAN, COMMISSIONER OF REVENUE
OF THE DEPARTMENT OF REVENUE


DATE OF JUDGMENT:                           08/18/2011
TRIAL JUDGE:                                HON. PATRICIA D. WISE
COURT FROM WHICH APPEALED:                  HINDS COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANTS:                   LUTHER T. MUNFORD
                                            FRED L. BANKS, JR.
                                            ROBERT GREGG MAYER
                                            ROBERT J. BROOKHISER
                                            ELIZABETH B. MCCALLUM
                                            STEPHEN J. CARMODY
                                            LOUIS G. FULLER
ATTORNEYS FOR APPELLEE:                     GARY WOOD STRINGER
                                            BRIDGETT THOMAS
NATURE OF THE CASE:                         CIVIL - OTHER
DISPOSITION:                                ON DIRECT APPEAL: REVERSED AND
                                            REMANDED. ON CROSS-APPEAL:
                                            REVERSED AND REMANDED - 04/04/2013
MOTION FOR REHEARING FILED:
MANDATE ISSUED:


       BEFORE DICKINSON AND RANDOLPH, P.JJ., AND PIERCE, J.

       RANDOLPH, PRESIDING JUSTICE, FOR THE COURT:

¶1.    Appellants raise a constitutional challenge to a fee legislated on cigarettes distributed

through Mississippi for sale outside the state, claiming separate violations of the Commerce
and Due-Process Clauses. In 2009, the Mississippi Legislature passed a law imposing a fee 1

on the sale, purchase, and distribution in Mississippi of cigarettes manufactured by

companies that did not enter into settlement agreements with the State of Mississippi as a

result of a 1997 lawsuit (the “nonsettling manufacturer” or “NSM” law), “including

cigarettes sold, purchased or otherwise distributed in this state for sale outside of this state.” 2

Miss. Code Ann. § 27-70-5 (Rev. 2010) (amended in 2010) (emphasis added).

¶2.    In   2009,    one    nonsettling    manufacturer      –   Commonwealth         Brands, Inc.

(“Commonwealth”) – and one distributor – the Corr-Williams Company (“Corr-Williams”)

(collectively “Appellants”) – sued Ed Morgan, in his capacity as Commissioner of Revenue

of the Department of Revenue (“Commissioner”) in Hinds County Chancery Court.

Appellants claimed that the imposition of the NSM fee on products sold, purchased, or

distributed in Mississippi, but ultimately sold to consumers or users outside Mississippi,

violated the Commerce and Due-Process Clauses of the United States Constitution. They

sought a declaration that the imposition of the NSM fee on cigarettes for sale outside

Mississippi is unconstitutional; an injunction to prevent the State from collecting the fee from




       1
        The parties and chancellor have used the terms “tax” and “fee” interchangeably
throughout this litigation. For purposes of this opinion only, this Court does likewise. The
issue of whether they are legally the same for purposes of this case is not before the Court.
We are expressing no opinion in this regard. This opinion should not be cited for the
proposition that this Court has declared that they are the same.
       2
        The Legislature has since amended the NSM law to remove the provision that applied
the fee to cigarettes sold outside Mississippi. See infra, ¶ 11.

                                                 2
them for cigarettes distributed in Mississippi for sale outside the state; and damages,

expenses, and attorney fees under 42 U.S. Code Sections 1983 and 1988.

¶3.    In October 2009, the chancery court entered a temporary restraining order enjoining

the Commissioner from assessing and collecting the challenged fee. In November 2009, the

chancery court held an evidentiary hearing, after which it granted Appellants a preliminary

injunction and ordered them to post surety bonds. The chancery court found as follows:

       (A) There is a substantial likelihood that Plaintiffs will prevail on their
       constitutional challenges to the assessment and payment of fees on the sale of
       NSM cigarettes sold, purchased or otherwise distributed in Mississippi for sale
       outside of Mississippi . . . ;
       (B) Corr-Williams and Commonwealth Brands will suffer immediate and
       irreparable harm with such threat being imminent if the MSTC assesses and
       demands payment of fees on the sale of [such] cigarettes . . . in that Corr-
       Williams may lose its ability to distribute NSM cigarettes and other grocery
       products in the State of Louisiana, with an accompanying loss in competitive
       advantage, business reputation, and goodwill and that Commonwealth Brands
       also faces the threat of immediate loss of competitive advantage, market share,
       business reputation, and good will with respect to cigarettes sold, purchased
       or otherwise distributed in this state for sale outside of this state.
       (C) The threat of irreparable injury to Corr-Williams and Commonwealth
       Brands far outweighs any potential harm to the State . . . , even considering the
       present economic conditions of the State of Mississippi and the potential
       implications of . . . reduced revenues that this [preliminary injunction] might
       have on the State budget, and moreover, . . . the threat of injury to the
       Defendant is minimal in that if the MSTC ultimately prevails, it will be able
       to assess and collect the tax that accrues during the pendency of this litigation;
       and
       (D) The public interest is served by the entry of the [preliminary injunction]
       because if the MSTC assesses and demands payment of fees on the sale of
       NSM cigarettes sold, purchased or otherwise distributed in Mississippi for sale
       outside of Mississippi . . . from Commonwealth Brands or by Corr-Williams,
       there may be a resulting loss of jobs and tax revenue when Corr-Williams and
       distributors in situations similar to Corr-Williams move all or some of its
       operations to the State of Louisiana and other states to avoid the effect thereof,
       or when Commonwealth and manufacturers in situations similar to

                                               3
       Commonwealth shift some or all of their business to distributors in other states
       to avoid the effect thereof.

In January 2010, the chancery court allowed Vicksburg Specialty to intervene, entered a

preliminary injunction enjoining the Commissioner from imposing the NSM fee on NSM

cigarettes distributed by Vicksburg Specialty, and required Vicksburg Specialty to post a

surety bond.

¶4.    In May 2010, the chancery court issued a “Stipulated Order Regarding Schedule and

Procedures,” in which the parties agreed, in lieu of trial, to submit proposed stipulations of

facts and proposed findings of fact and conclusions of law to the chancellor. In August 2010,

the chancery court issued an order denying Appellants a permanent injunction and

declaratory relief, and finding all other issues moot. The chancery court found that the NSM

fee did not violate the Commerce Clause or the Due-Process Clause, based on its findings

that: (1) there was “a substantial nexus between the tax and the transaction within

Mississippi”; (2) the fee was fairly apportioned, because, even if other states had an identical

statute, those states would not tax Commonwealth for the “same purpose” – distribution

through Mississippi; (3) the fee did not discriminate against interstate commerce, because,

(like its reasoning for finding fair apportionment) even if other states had an identical statute,

they would not impose a fee on the same transaction as the Mississippi law – distribution

through Mississippi; and (4) the fee was fairly related to distribution activities and services

in Mississippi.




                                                4
¶5.    Subsequently, the Commissioner filed a “Motion for Entry of Final Judgment,”

seeking fees, interest, and penalties from Appellants for the two years that it was enjoined

from collecting fees under the preliminary injunction, and Appellants filed a motion for

reconsideration. The chancery court held a hearing on both motions in December 2010. The

chancery court reserved ruling on the motions until the end of the 2011 Mississippi

Legislative Session, during which the Legislature amended the statute to provide that the

NSM fee does not apply to cigarettes sold, purchased, or distributed in Mississippi for sale

outside the state. Miss. Code Ann. § 27-70-5 (Supp. 2012).

¶6.    In May 2011, the chancery court found that the legislative amendment did not apply

retroactively, denied Appellants’ motion for reconsideration, and granted the Commissioner’s

motion for final judgment. However, the chancery court did not enter final judgment at that

time. Rather, three months later, on August 30, 2011 (upon the parties’ request for a status

conference), the chancellor entered final judgment, which incorporated the August 2010

order (denying Appellants’ request for a permanent injunction and declaratory relief) and the

May 2011 order (denying motion for rehearing and granting motion for final judgment).

Commonwealth, Corr-Williams, and Vicksburg Specialty appeal the final judgment, and the

Commissioner cross-appeals.

                                          FACTS

¶7.    Mississippi has long imposed and collected taxes on the sale of tobacco within the

state under the Tobacco Tax Act. The Tobacco Tax Act provides that:




                                             5
       The . . . tax is levied upon the sale, use, gift, possession or consumption of
       tobacco within the State of Mississippi, and the impact of the tax levied by this
       chapter is hereby declared to be on the vendee, user, consumer or possessor of
       tobacco in this state; and when said tax is paid by any other person, such
       payment shall be considered as an advance payment and shall thereafter be
       added to the price of the tobacco and recovered from the ultimate consumer or
       user.

Miss. Code Ann. § 27-69-13 (Rev. 2010) (emphasis added). The Tobacco Tax Act also

specifies that “[t]he provisions of this chapter shall not apply to dealers in tobacco made the

subject of interstate sales, except as provided in Chapter 70, Title 27, Mississippi Code of

1972.” Miss. Code Ann. § 27-69-19 (Rev. 2010).

¶8.    In 1997, the State of Mississippi entered into a settlement agreement with the four

largest U.S. cigarette manufacturers. The settling manufacturers agreed to pay the State

certain sums, to be adjusted by domestic tobacco product volume sales.

¶9.    In 1998, forty-six other states and territories entered into a separate settlement

agreement with the same four cigarette manufacturers that were parties to the 1997

Mississippi agreement (“Master Settlement Agreement” or “MSA”).3 Under the Master

Settlement Agreement, as under the 1997 agreement, the manufacturers agreed to pay certain

sums to the settling states and territories. Id. The MSA based these sums on national tobacco

sales, net of, inter alia, amounts paid to Mississippi under the 1997 agreement. Id.




       3
           Master        Settlement            Agreement,              available            at
http://web.archive.org/web/20080625084126/http://www.naag.org/backpages/naag/tobacc
o/msa/msa-pdf/1109185724_1032468605_cigmsa.pdf (last visited Mar. 28, 2013).

                                              6
Manufacturers other than the four originally sued were permitted to join the MSA

voluntarily. Id. Commonwealth elected to do so.4

¶10.   In 2009, the Mississippi Legislature enacted the NSM law, imposing on manufacturers

that were not parties to the 1997 agreement a fee for sales, purchases, and distribution of

tobacco products in Mississippi. Miss. Code Ann. §§ 27-70-1 to 27-70-23 (Rev. 2010). The

stated purpose of the NSM law was to:

       (a) Prevent nonsettling manufacturers from undermining this state’s policy of
       discouraging underage smoking by offering cigarettes at prices that are
       substantially below the prices of cigarettes of other manufacturers;

       (b) Protect the tobacco settlement agreement, and funding, which has been
       reduced because of the growth of sales of nonsettling-manufacturer cigarettes,
       for programs that are funded wholly or partly by payments to this state under
       the tobacco settlement agreement and recoup for this state settlement payment
       revenue lost because of sales of nonsettling-manufacturer cigarettes;

       (c) Provide funding to enforce and administer this chapter and any legislation
       relating to nonsettling manufacturers; and

       (d) Provide funding for any other purpose the Legislature determines.

Miss. Code Ann. § 27-70-1 (Rev. 2010). The statute imposed a fee as follows:

       (1) A fee is imposed on the sale, use, consumption or distribution in this state
       of:
              (a) Nonsettling-manufacturer cigarettes if a stamp is required to be
              affixed to a package of those cigarettes under the Tobacco Tax Law;
              and
              (b) Nonsettling-manufacturer cigarettes that are sold, purchased or
              distributed in this state but that are not required to have a stamp affixed


       4
        The amounts Commonwealth must pay under the MSA are not net of any payments
to Mississippi, as Commonwealth was not a party to the 1997 agreement. Master Settlement
Agreement.

                                               7
              to a package of those cigarettes under the Tobacco Tax Law, including
              cigarettes sold, purchased or otherwise distributed in this state for sale
              outside of this state.

       (2) The fee imposed by this chapter does not apply to cigarettes that are
       included in computing payments due to be made by a settling manufacturer
       under the tobacco settlement agreement.

       (3) The fee imposed by this chapter is in addition to any other privilege,
       license, fee or tax required or imposed by state law.

       (4) Except as otherwise provided by this chapter, the fee imposed by this
       chapter is imposed, collected, paid, administered, and enforced in the same
       manner, taking into account that the fee is imposed on nonsettling
       manufacturers, as the taxes imposed by the Tobacco Tax Law, as appropriate.

Miss. Code Ann. § 27-70-5 (Rev. 2010) (emphasis added).

¶11.   In 2011, during the pendency of this litigation, the Mississippi Legislature amended

the NSM law. Miss. Code Ann. § 27-70-5 (Supp. 2012). Those amendments included the

removal of the language explicitly imposing the NSM fee on cigarettes for sale outside of the

state (Section 27-70-5(1)(b) of the 2009 law), and the addition of the following language:

“[t]he tax imposed by this chapter does not apply to cigarettes that are sold, purchased or

otherwise distributed in this state for sale outside of this state.” Id.; Miss. Code Ann. § 27-

70-5(2) (Supp. 2012) (emphasis added).

                                           ISSUES

¶12.   All Appellants raise the following three issues on appeal:

       1. Whether a law imposing a fee on certain cigarette manufacturers for the in-
       state sale, purchase, or distribution of cigarettes for retail sale outside of the
       state violated the Commerce Clause.



                                               8
       2. Whether the fee on the in-state sale, purchase, or distribution of cigarettes
       to be sold out of state was an impermissible exercise of extra-territorial
       jurisdiction that violated the Due-Process Clause.

       3. Whether Commonwealth, Corr-Williams, and Vicksburg Specialty are
       entitled to relief under 42 U.S.C. § 1983 and attorney fees under 42 U.S.C. §
       1988, because state law provides them no plain, speedy, and efficient remedy.

¶13.   Appellants Corr-Williams and Vicksburg Specialty raise a fourth issue:

       4. Whether the final judgment of the chancery court is invalid to the extent that
       it allows the State to seek unpaid NSM fees, interest, and penalties from Corr-
       Williams and Vicksburg Specialty.

¶14.   On cross-appeal, the Commissioner raises the following issue:

       5. Whether the chancellor erred by failing to include in the final judgment a
       monetary judgment in favor of the State against Commonwealth, Corr-
       Williams, and Vicksburg Specialty in the amount of the fees and interest the
       State was enjoined from collecting due to the temporary restraining order and
       preliminary injunctions, plus ten percent under Mississippi Code Section 11-
       13-15.

¶15.   Finding the first and third issues dispositive, we decline to address issue two. Our

disposition moots issues four and five.

                                       DISCUSSION

       I. Standard of Review

¶16.   This Court applies a de novo standard of review when addressing a statute’s

constitutionality. Johnson v. Sysco Food Servs., 86 So. 3d 242, 243 (Miss. 2012) (citations

omitted).

       II. Commerce Clause




                                              9
¶17.   To comply with the Commerce Clause, a tax must: (1) be imposed on an activity with

a substantial nexus with the taxing state; (2) be fairly apportioned, based on the activity

within the taxing state; (3) not discriminate against interstate commerce; and (4) be fairly

related to services provided by the taxing state. Complete Auto Transit, Inc. v. Brady, 430

U.S. 274, 97 S. Ct. 1076, 51 L. Ed. 2d 326 (1977). This Court and the United States Supreme

Court have recognized that, to satisfy these basic Commerce-Clause requirements, a tax also

must be “internally consistent.” 5 See, e.g., Thomas Truck Lease, Inc. v. Lee County, 768 So.

2d 870, 876 (Miss. 1999); Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 185,

115 S. Ct. 1331, 131 L. Ed. 2d 261 (1995); Tenn. Gas Pipeline Co. v. Marx, 594 So. 2d 615,

618 (Miss. 1992). The U.S. Supreme Court has provided that “internal consistency is

preserved when the imposition of a tax identical to the one in question by every other State

would add no burden to interstate commerce that intrastate commerce would not also bear.”

Jefferson Lines, 514 U.S. at 185 (emphasis added). Phrased slightly differently, we have

explained that, “[t]o be internally consistent, a tax must be structured so that if every State

were to impose an identical tax, no multiple taxation would result.” Thomas Truck Lease,

768 So. 2d at 876 (emphasis added). Thus, internal consistency broadly asks whether, if all

states enacted an identical statute, interstate commerce would bear a burden that purely


       5
        The U.S. Supreme Court has provided that a tax must be both internally and
externally consistent. Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175, 185, 115
S. Ct. 1331, 131 L. Ed. 2d 261 (1995). However, a tax that does not satisfy the internal
consistency test is unconstitutional, and there is no need to assess whether it is externally
consistent. Id. (noting that the U.S. Supreme Court asks “whether the tax is ‘internally
consistent’ and, if so, whether it is ‘externally consistent’ as well.”) (emphasis added).

                                              10
intrastate commerce would not, such as multiple taxation. Id.; Jefferson Lines, 514 U.S. at

185.

¶18.   The U.S. Supreme Court has further explained that:

       [the internal-consistency] test asks nothing about the degree of economic
       reality reflected by the tax, but simply looks to the structure of the tax at issue
       to see whether its identical application by every State in the Union would place
       interstate commerce at a disadvantage as compared with commerce intrastate.
       A failure of internal consistency shows as a matter of law that a State is
       attempting to take more than its fair share of taxes from the interstate
       transaction, since allowing such a tax in one State would place interstate
       commerce at the mercy of those remaining States that might impose an
       identical tax.

Jefferson Lines, 514 U.S. at 185.

¶19.   The chancellor analyzed compliance with the Commerce-Clause requirements set

forth in Complete Auto Transit, 430 U.S. 274, and concluded that the NSM law did not

violate the Commerce Clause. However, the chancellor erred, as a matter of law, by failing

to apply the internal-consistency test mandated by Jefferson Lines, 514 U.S. at 185, and

Thomas Truck Lease, 768 So. 2d at 876.

¶20.   We find that the NSM law, as enacted by the Legislature and acted upon by the

Commissioner, failed to satisfy the internal-consistency test as a matter of law. For the NSM

fee to be internally consistent, interstate commerce must not bear a burden that intrastate

commerce does not (such as multiple taxation) if other states were to adopt statutes identical

to the NSM law, including the following provision:

       A fee is imposed on the sale, use, consumption or distribution in this state of
       . . . [n]onsettling-manufacturer cigarettes that are sold, purchased or distributed
       in this state but that are not required to have a stamp affixed to a package of

                                               11
       those cigarettes under the Tobacco Tax Law, including cigarettes sold,
       purchased or otherwise distributed in this state for sale outside of this state.

Miss. Code Ann. § 27-70-5(1)(b) (Rev. 2010). The distribution of cigarettes in Mississippi

for ultimate sale outside the state involves separate transactions: (1) the Mississippi

distributor’s acquisition of products from Commonwealth and (2) the sale of those products

in another state – say, Louisiana. If Louisiana enacted a statute identical to the Mississippi

NSM law, then Mississippi would impose a fee on transaction (1) and Louisiana would

impose a fee on transaction (2).6 Thus, if another state adopted a law identical to the NSM

law, two fees would be imposed on the same cigarettes. Stated simply, this interstate

application involves two fees on the same cigarettes. In contrast, if the cigarettes acquired by

the Mississippi distributor were sold intrastate, they would be subject to only one fee – under

the Mississippi NSM law. Although each state would impose its fee on a separate

transaction, cigarettes sold in interstate commerce would bear a second fee that those sold

in intrastate commerce would not. Thus, if another state enacted a statute identical to the

challenged NSM law, interstate commerce would bear a burden that purely intrastate

commerce would not also bear: multiple fees on the same cigarettes. We conclude that the

provision of the NSM law imposing a fee on NSM cigarettes distributed through Mississippi

for sale outside the state was not internally consistent, in violation of the Commerce Clause.



       6
        The inverse also would be true: if NSM cigarettes were distributed through Louisiana
for sale to retail customers in Mississippi, then Louisiana would impose a fee for the
distribution under the Louisiana NSM law, and Mississippi would impose a fee for the sale
under the Mississippi NSM law.

                                              12
Accordingly, Appellants were entitled to the requested permanent injunction and declaratory

relief.

          III. 42 U.S.C. Section 1983 Claims

¶21.      Appellants claim that they are entitled to attorney fees under 42 U.S.C. Section 1988 7

for their claims under Section 1983 challenging the constitutionality of the NSM law. Section

1983 reads as follows, in relevant part:

          Every person who, under color of any statute, ordinance, regulation, custom,
          or usage, of any State . . . subjects, or causes to be subjected, any citizen of the
          United States or other person within the jurisdiction thereof to the deprivation
          of any rights, privileges, or immunities secured by the Constitution and laws,
          shall be liable to the party injured in an action at law, suit in equity, or other
          proper proceeding for redress . . . .

42 U.S.C.A. § 1983.

¶22.      At issue in the case sub judice is whether the federal Tax Injunction Act precludes a

Section 1983 claim in state court to challenge the constitutionality of a state tax where an

adequate state-law remedy is available. The Tax Injunction Act provides that:

          The district courts shall not enjoin, suspend or restrain the assessment, levy or
          collection of any tax under State law where a plain, speedy and efficient
          remedy may be had in the courts of such State.



          7
              Section 1988 provides that:

          [i]n any action or proceeding to enforce a provision of section[ ] . . . 1983 . .
          . of this title, . . . the court, in its discretion, may allow the prevailing party,
          other than the United States, a reasonable attorney’s fee as part of the costs .
          ...

42 U.S.C.A. § 1988(b) (2000).

                                                  13
28 U.S.C.A. § 1341 (1940). The language of Section 1341 prevents federal district courts

from granting injunctive relief regarding state tax matters where state law provides a plain,

speedy, and efficient remedy. In National Private Truck Council, Inc. v. Oklahoma Tax

Commission, 515 U.S. 582, 115 S. Ct. 2351, 132 L. Ed. 2d 509 (1995), the United States

Supreme Court “granted certiorari to resolve a conflict among the state courts as to whether,

in tax cases, state courts must provide relief under § 1983 when adequate remedies exist

under state law.” Nat’l Private Truck, 515 U.S. at 585-86 (emphasis added).

¶23.   Our review of the cases reveals a conflict not only among the states, but also within

our own jurisprudence. In State Tax Commission v. Fondren, 387 So. 2d 712 (Miss. 1980),

a taxpayer sought to enjoin the Commission from approving county recapitulation of

assessment rolls until the Commission had equalized assessments among counties. Fondren,

387 So. 2d 712. The Fondren Court found that “a state court entertaining a 1983 action has

no more jurisdiction than a federal district court” and that “[i]t is well established that

[Section 1341] is an explicit congressional limitation on the jurisdiction of the federal courts

in [state tax] cases . . . .” Id. at 723. The Court then found that, in the state-tax action before

it:

       [Section] 1983 collides full force with a specific congressional limitation on
       federal jurisdiction. In such circumstances, we are convinced that [Section]
       1341 must prevail.

Id. The Fondren Court cited the holding in Bland v. McHann, 463 F. 2d 21 (5th Cir. 1972),

that “Mississippi law provides a plain, speedy and efficient remedy for claims that

assessments for taxes in a municipality were not equal and uniform[,]” and reasoned that:

                                                14
       [o]bviously this action could not have been brought in federal court under
       section 1983 because there is a plain, speedy and efficient remedy in
       Mississippi courts. Complainants, by filing their action in state court, invoked
       the plain, speedy and efficient remedy granted them by the chancery court and
       affirmed here.

Id. The Fondren Court presciently concluded that “the section 1983 cause of action must fail

in the state court because it would have failed if it had been filed first in federal court.” Id.

(emphasis added).

¶24.   Seven years later, in Marx v. Truck Renting and Leasing Association Inc., 520 So.

2d 1333 (Miss. 1987), this Court applied a contradictory analysis of federal and state courts’

jurisdiction over Section 1983 challenges of state taxes. The Marx Court first recognized that

“[t]he courts of this State have jurisdiction concurrent with that of the federal courts over

actions brought under 42 U.S.C. § 1983.” Marx, 520 So. 2d at 1346 (citations omitted).

However, the Marx Court posited its jurisdictional holding on the antithesis of concurrent

jurisdiction, declaring that:

       it is the absence of federal jurisdiction under 28 U.S.C. § 1341 which
       operates to open the door to the state courthouse so that the taxpayer may
       here assert his § 1983 claim. A federal courthouse door is closed under such
       circumstances by 28 U.S.C. § 1341.

Id. Thus, this Court held in Marx that state courts’ jurisdiction over actions challenging the

constitutionality of state taxes under Section 1983 is available because the federal

courthouse door is closed.8


       8
        What Marx does not say is that the key to either courthouse door – federal or state
– for a Section 1983 state-tax claim is controlled by the availability, vel non, of a plain,
speedy, and efficient remedy in the courts of the state – as previously held by this Court in

                                               15
¶25.   A year after Marx, this Court decided Burrell v. Mississippi State Tax Commission,

536 So. 2d 848, 864 (Miss. 1988). The Burrell Court interpreted the holdings of Fondren

and Marx as follows:

       [Fondren] says that the state courts have no authority to entertain claims under
       Section 1983 where the suit is one seeking to enjoin unconstitutional state
       action with regard to the collection of taxes. Fondren confuses a federal
       jurisdictional limitation, 28 U.S.C. § 1341, with the enforceability of a
       federally created right and remedy in state court. . . . [O]ur recent decision in
       [Marx] may only be read as holding that the Section 1983/1988 discussion in
       Fondren stands overruled.

Burrell, 536 So. 2d at 864.

¶26.   Subsequently, courts in other states addressing the same issue revealed that

Mississippi was one of only two states to hold that a Section 1983 action could be brought

in state court despite the availability of a state-law remedy. Tatten Partners v. New Castle

County Bd. of Assessment Review, 642 A. 2d 1251, 1265 (Del. 1993); Greenwich Twp. v.

Murtagh, 601 A. 2d 1352, 1356 at n.10 (Pa. 1992). The other state, New Jersey, also had

found that Section 1983 actions challenging state taxes – including actions that could not be

brought in federal court under the Tax Injunction Act – could be brought in state court.

Bung’s Bar & Grille, Inc. v. Florence Twp., 502 A. 2d 1198, 1215 (N.J. 1985). However,

after the U.S. Supreme Court issued its opinion in National Private Truck, discussed infra,

the New Jersey court rejected its prior approach, holding that “both state and federal courts

‘must refrain from granting federal relief under § 1983 when there is an adequate legal


Fondren, and subsequently made clear by the U.S. Supreme Court in National Private
Truck. See infra at ¶ 27.

                                              16
remedy.’” General Motors Corp. v. City of Linden, 671 A. 2d 560, 564-65 (N.J. 1996)

(quoting Nat’l Private Truck, 515 U.S. at 592). We do the same today.

¶27.   In 1995, the U.S. Supreme Court issued a definitive statement on this issue. The ruling

is clear and unequivocal (repeatedly declared), and relies on the same principles used by this

Court in Fondren. Nat’l Private Truck, 515 U.S. at 590-92; see Fondren, 387 So. 2d at 723

(relying on concurrent jurisdiction to find that Section 1983 state-tax action must fail in state

court, because it would have failed in federal court due to the availability of a plain, speedy,

and efficient remedy in state court). In National Private Truck, the Court held that Section

1341 restrains both federal and state court jurisdiction over Section 1983 challenges of state

taxes – thus validating the Fondren Court’s approach and rejecting Marx and Burrell. Nat’l

Private Truck, 515 U.S. at 590-92. The National Private Truck Court first stated as follows:

       To be sure, the Tax Injunction Act reflects the congressional concern with
       federal court interference with state taxation, see 28 U.S.C. § 1341, and there
       is no similar statute divesting state courts of the authority to enter an injunction
       under federal law when an adequate legal remedy exists. But this silence is
       irrelevant here, because we do not understand § 1983 to call for courts
       (whether federal or state) to enjoin the collection of state taxes when an
       adequate remedy is available under state law. Given the strong background
       presumption against interference with state taxation, the Tax Injunction Act
       may be best understood as but a partial codification of the federal reluctance
       to interfere with state taxation. After all, an injunction issued by a state court
       pursuant to § 1983 is just as disruptive as one entered by a federal court.

Id. at 590-91 (emphasis added) (citation omitted). The Court reiterated that:

       We simply do not read § 1983 to provide for injunctive or declaratory relief
       against a state tax, either in federal or state court, when an adequate legal
       remedy exists.

Id. at 591. Again phrasing slightly differently, the Court held that:

                                               17
       When a litigant seeks declaratory or injunctive relief against a state tax
       pursuant to § 1983, . . . state courts, like their federal counterparts, must refrain
       from granting federal relief under § 1983 when there is an adequate legal
       remedy.

Id. at 592. Thus, the U.S. Supreme Court firmly established that the constitutionality of a

state tax may not be challenged under Section 1983 in state court if an adequate remedy is

available under state law – as stated in Fondren and overruled in Burrell. Fondren, 387 So.

2d at 723; Marx, 520 So. 2d at 1346; Burrell, 536 So. 2d at 864. To the extent that Marx and

Burrell conflict with the U.S. Supreme Court’s holding in National Private Truck, they are

hereby overruled.

¶28.   Was a plain, speedy, and efficient remedy under Mississippi law available to

Appellants? To provide an adequate remedy, a state law must satisfy “minimal procedural

criteria[;]” it must “provid[e] the [party] with a ‘full hearing and judicial determination’[to]

raise any and all constitutional objections to the tax.” Rosewell v. LaSalle Nat’l Bank, 450

U.S. 503, 512-15 101 S. Ct. 1221, 1229-30, 67 L. Ed. 2d 464 (1981) (emphasis in original).

¶29.   We first turn to the record to answer the question. We find that all Appellants had an

adequate remedy, which they invoked, seeking a plain, speedy, and efficient remedy:

declaratory relief under Mississippi Rule of Civil Procedure 57.9 In their complaints, all


       9
       Commonwealth also had a remedy available under Mississippi Code Section 11-13-
11, which provides that:

       The chancery court shall have jurisdiction of suits by one or more taxpayers
       in any county, city, town, or village, to restrain the collection of any taxes
       levied or attempted to be collected without authority of law.


                                                18
Appellants sought “a declaration” that the NSM fee “discriminates against interstate

commerce, unduly burdens interstate commerce, and denies due process of law.” Appellants’

“Motion for Expedited Declaratory and Injunctive Relief,” filed the same day as

Commonwealth’s and Corr-Williams’s complaint, states that “[p]ursuant to Miss. R. Civ. P.

57 and 65, Plaintiffs . . . request that the Court issue a declaration and a preliminary and/or

permanent injunction . . .”and requests, inter alia, that the trial court “[e]nter a judgment . .

. declaring unconstitutional the Mississippi NSM tax law insofar as it requires the assessment

and collection of fees on nonsettling-manufacturer cigarettes sold, purchased or otherwise

distributed in the State of Mississippi for sale outside of Mississippi[.]” In their “Brief in

Support of Motion for Expedited Declaratory and Injunctive Relief,” Appellants “move[d]

. . . for . . . a declaration that . . . [the] NSM fee . . . is unconstitutional . . . .” The brief further

stated that: “As the Supreme Court also held in Marx, in an action under 42 USC § 1983 to

vindicate constitutional rights, successful plaintiffs are also presumptively entitled to

attorneys’ fees pursuant to 42 U.S.C. § 1988. Marx, supra, 520 So. 2d at 1346.” Their

reliance on Marx must fail for the reasons stated supra. There can be no serious debate that

Rule 57 provided a plain, speedy, and efficient remedy, upon which Appellants relied. The

record clearly establishes that Appellants premised their claim for attorney fees in

conjunction with a claim for declaratory relief under Rule 57, and repeatedly referenced Rule




Miss. Code Ann. § 11-13-11 (Rev. 2004). Section 11-13-11 clearly provides persons or
entities upon whom a tax is levied or attempted to be collected a full hearing and judicial
determination at which they may raise their constitutional challenges.

                                                    19
57 in their pleadings. Accordingly, we find that adequate remedies under state law were

available to all Appellants. Thus, the courts of this State should refrain from considering

Section 1983 claims in tax cases, mooting Section 1988 claims for fees. That being said, no

basis exists for a claim by Appellants for attorney fees under Section 1988.

                                     CONCLUSION

¶30.   For the reasons discussed herein, we reverse the final judgment of the Hinds County

Chancery Court. We remand this case to the Hinds County Chancery Court for entry of

judgment consistent with this opinion.

¶31. ON DIRECT APPEAL: REVERSED AND REMANDED. ON CROSS-APPEAL:
REVERSED AND REMANDED.

     WALLER, C.J., DICKINSON, P.J., LAMAR, KITCHENS, CHANDLER,
PIERCE, KING AND COLEMAN, JJ., CONCUR.




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