This case arose from the New Hampshire tax deeding process and involved both state and federal claims. The Town of Sanbornton took Nemetz’s property by tax deed and evicted him from it. Nemetz then sued the Town in superior court, seeking to regain his property and obtain an injunction against the Town prohibiting it from the “assessment, levy or collection” of taxes. He raised two claims under state law and two under federal law. The Town asked to have the case removed from superior court to the Federal District Court.
When a case involves both state and federal law, the federal courts can exercise jurisdiction over both areas. This prevents the parties from having to litigate in two courts for one matter. In this case, the plaintiff was alleging that the Town had violated both state and federal law. The claims included a deprivation of Nemetz’s federal due process rights under the U.S. Constitution when the Town levied taxes against the property, recorded a tax deed, and later evicted him.
This opinion focused on whether the case should be heard in federal court. Although the plaintiff raised federal Constitutional claims, the Court found that it did not have jurisdiction to hear those claims because of a federal law prohibiting it. The Tax Injunction Act, 28 U.S.C. § 1341 says that federal district courts may 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.” Because New Hampshire law provides a plain, speedy and efficient remedy for violations of federal rights arising from state taxes, the Court found it did not have jurisdiction over those claims.
The interesting part of this decision is that, ordinarily, violations of the U.S. Constitution may be heard in federal court. However, in this case, the fact that the U.S. Constitution was involved did not permit the federal court to hear the case because it involved state taxes. This interpretation has been the norm in New Hampshire federal courts since at least 1983.
As a result, the entire case, including the state law claims, had to be sent back to the Belknap County Superior Court, where all of the claims will be heard and decided.