Mr. JUSTICE DOUGLAS delivered the opinion of the Court.
This action was brought by respondent under the Declaratory Judgment Act, Judicial Code, § 274 (d), 28 U.S.C. § 400, to have declared null and void certain assessments on intangible personal property entered for the years 1940 and 1941 by the Collector of Hillsborough Township, Somerset County, New Jersey.
Sec. 267 of the Judicial Code, 28 U.S.C. § 384, provides that suits in equity shall not be sustained in the federal courts "in any case where a plain, adequate, and complete remedy may be had at law." That principle has long been recognized as having "peculiar force" in cases where the federal courts were asked to enjoin the collection of a state tax. Matthews v. Rodgers, 284 U.S. 521, 525, and cases cited. "The scrupulous regard for the rightful independence of state governments which should at all times actuate the federal courts, and a proper reluctance to interfere by injunction with their fiscal operations, require that such relief should be denied in every case where the asserted federal right may be preserved without it." Id., p. 525. Where the remedy at law is "plain, adequate, and complete," it is the one which must be pursued even for the protection of any federal right. That practice of the federal equity courts was given further recognition and sanction
The Circuit Court of Appeals fully recognized the principle of the Huffman case, but concluded that the state procedure was not "speedy, efficient or adequate" to protect the federal right against discriminatory state taxation. It is around that conclusion that the first phase of this controversy turns.
The equal protection clause of the Fourteenth Amendment protects the individual from state action which selects him out for discriminatory treatment by subjecting him to taxes not imposed on others of the same class. The right is the right to equal treatment. He may not complain if equality is achieved by increasing the same taxes of other members of the class to the level of his own. The constitutional requirement, however, is not satisfied if a State does not itself remove the discrimination, but imposes on him against whom the discrimination has been directed the burden of seeking an upward revision of the taxes of other members of the class. Sioux City Bridge Co. v. Dakota County, 260 U.S. 441, 445-447; Iowa-Des Moines National Bank v. Bennett, 284 U.S. 239, 247; Cumberland Coal Co. v. Board of Revision, 284 U.S. 23,
It is argued, however, that in 1933 the New Jersey courts adopted a different rule when Central R. Co. v. State Tax Dept. (Thayer-Martin), 112 N.J.L. 5, 169 A. 489, was decided by the Court of Errors and Appeals. In that case the court did entertain an objection that the particular tax assessment violated the rule of Sioux City Bridge Co. v. Dakota County, supra. It found that the complaining taxpayer had not shown that a discrimination within the meaning of our cases existed. So it is argued that as the highest court in New Jersey recognized the federal rule, the federal District Court should have remitted respondent to her remedy in the New Jersey
In the first place, the same judge who wrote the opinion for the Court of Errors and Appeals in the Thayer-Martin case wrote the opinion for the Supreme Court of New Jersey a year later in Lehigh Valley R. Co. v. State Board, 12 N.J. Misc. 673, 174 A. 359. The taxpayer contended that the state board of tax appeals erred in refusing to admit evidence of discrimination. The argument was that the rule of Sioux City Bridge Co. v. Dakota County, supra, should be followed and the holding of Royal Mfg. Co. v. Board of Equalization, supra, should be disapproved. The Supreme Court of New Jersey declined to allow a writ of certiorari to review the judgments of the state board of tax appeals. It did not mention the Thayer-Martin case, but followed Royal Mfg. Co. v. Board of Equalization, supra, saying that the New Jersey law on the point was "settled and controlling." 12 N.J. Misc. p. 675. It, therefore, may well be true, as respondent says, that the court in the Thayer-Martin case simply decided that the point raised by the taxpayer was not supported by facts and found it unnecessary to consider whether, if systematic discrimination had been shown, New Jersey would have afforded an adequate remedy. In any event, there is such uncertainty concerning the New Jersey would have afforded an adequate remedy. In any event, there is such uncertainty concerning the New Jersey remedy as to make it speculative (Wallace v. Hines, 253 U.S. 66, 68) whether the State affords full protection to the federal rights. In the second place, the state board of tax appeals to which respondent might have appealed concededly has no right to pass on constitutional questions.
This brings us to the second phase of the controversy. Neither the District Court nor the Circuit Court of Appeals decided the case on federal grounds. They held in reliance on Duke Power Co. v. State Board, 129 N.J.L. 449, 30 A.2d 416, 131 N.J.L. 275, 36 A.2d 201, that the assessments were invalid under the New Jersey statutes. In that case, as in the present one, property "omitted in the assessment" was attempted to be assessed by the County Board against the taxpayer after April 1st of each of the tax years involved without notice and hearing.
Petitioner argues that it is clear from Duke Power Co. v. State Board, supra, that respondent had a remedy in the state tribunals for failure of petitioner to follow the procedure required by the New Jersey statutes and that the federal court should have required her to pursue it.
It follows a fortiori that the bill should not have been dismissed. As stated in Greene v. Louisville & I.R. Co., 244 U.S. 499, 520, "A remedy at law cannot be considered adequate, so as to prevent equitable relief, unless it covers the entire case made by the bill in equity." Though the availability of a state remedy on the local law question be assumed to exist, so much uncertainty surrounds the New Jersey remedy to protect the taxpayer's federal right that a refusal to dismiss the bill was a proper exercise of discretion. Thus, however the case may be viewed, the exceptional circumstances which we have noted take it out of the general rule of Great Lakes Dredge & Dock Co. v. Huffman, supra. The District Court, therefore, properly proceeded to decide the case on the merits. That it placed its decision on local law grounds is not objectionable. For it is well settled that where the federal court has jurisdiction, it may pass on the whole case and agreeably with the desired practice decide it on local law questions, without reaching the constitutional issues. Siler v. Louisville & N.R. Co., 213 U.S. 175, 191, 193; Greene v. Louisville & I.R. Co., supra, p. 508; Chicago G.W.R. Co. v. Kendall, 266 U.S. 94, 97-98; Risty v. Chicago, R.I. & P.R. Co., 270 U.S. 378, 387; Waggoner Estate v. Wichita County, 273 U.S. 113, 116; Hurn v. Oursler, 289 U.S. 238, 243-248.
Petitioner makes an extended argument to the effect that Duke Power Co. v. State Board, supra, is not a controlling
MR. JUSTICE MURPHY and MR. JUSTICE JACKSON took no part in the consideration or decision of this case.
A different procedure is provided by § 54: 3-20 for inclusion of property "omitted by the assessor." For a discussion of the difference between the two types of assessments see Duke Power Co. v. State Board, supra, 129 N.J.L. pp. 452-455. At p. 455, the court said: "If property in a taxing district is omitted by the assessor it must be added to the assessment before April 1st. Its addition decreases the amount of taxes to be raised since the ratables are thereby increased. The taxpayer is not embarrassed. He knows he will have a tax to pay and is liable anyway even if the property was not included in the assessment. However, if property is added to the assessment after the rate has been fixed it gives rise to a municipal windfall. There is no harm in this if there were due notice and a fair hearing by the County Board and a judicial determination by it."
"No tax, assessment or water rate imposed or levied in this state shall be set aside or reversed in any action, suit or proceeding for any irregularity or defect in form, or illegality in assessing, laying or levying any such tax, assessment or water rate, or in the proceeding for its collection if the person against whom or the property upon which it is assessed or laid is, in fact, liable to taxation, assessment or imposition of the water rate, in respect to the purposes for which the tax, assessment or rate is levied, assessed or laid."
Sec. 54: 4-59 provides:
"The court in which any action, suit or proceeding is or shall be pending to review any such tax, assessment or water rate shall amend all irregularities, errors or defects, and may if necessary ascertain and determine the sum for which the person or property was legally liable and by order or decree fix the amount thereof. The sum so fixed shall be the amount of tax, assessment or water rate for which the person or property shall be liable."
The court in Duke Power Co. v. State Board, supra, 129 N.J.L. p. 457, stated that "the remedial statutes we do not find to have been a substitute for proper assessment. Their application has been only in instances where property has been omitted by the assessor or has been assessed in the name of one other than the true owner."