Norman W. Swanson William H. Talbert Robert B. Campbell Billy Clark Charles A. Dancy Wallace M. Davis William E. Denton Galena Elworth Melvin F. Eyerman Hamilton M. Howe Ralph P. Hunt Henry F. Murray William E. Nicholson, III Robert A. Nisbet John L. Powell, Jr. Donald v. Wallace Mary L. Pritchard Carl L. Whitney Ira N. Schwarz Grady L. Strange Walter J. Bartnikowski Marion B. Zollicoffer Browning Adams Pritchard C. Adams William H. Adams Edward H. Allen Flossie P. Allen Joseph A. Allen Rachel C. Allred Helen L. Anctil Leo I. Anctil Ronald E. Anderson Clarence P. Armstrong Carroll W. Austin F.L. Austin, Jr. Donald P. Bahr Paul Ballus Charles D. Barker, Sr. Walter E. Barkhouse Edward C. Barret James L. Baxter Russell W. Beard Bernard L. Beatty Richard K. Bell Leo E. Benade Sherman W. Betts Joseph H. Betz Robert L. Blevins Franklin M. Blunt Timothy C. Bolick Margaret C. Boone Henry A. Botkin Alex Bourdas Ola May Bovender, A/K/A Ola May Tate Eugene A. Bowen Lavaune K. Breda Marlowe G. Breda Trond G. Brekke Laura

Citation: 55 F.3d 956Docket: 94-1971

Court: Court of Appeals for the Fourth Circuit; June 5, 1995; Federal Appellate Court

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The excerpt lists numerous individuals, presumably plaintiffs or beneficiaries, involved in a legal case reported in 55 F.3d 956, under the Employee Benefits category. The names span a wide array of individuals, indicating a collective action or multiple claims, likely related to employee benefits. Each name is presented in a standard format, including first and last names, with some entries featuring alternative names or initials. This extensive enumeration suggests a significant number of stakeholders in the legal proceedings, indicating the potential complexity and scale of the case.

The document lists a comprehensive roster of plaintiffs, including individuals such as Thomas P. Ginn, Robert W. Goodman, and John R. Gordon, among many others, who are appealing against the defendants: Janice H. Faulkner, Secretary of the North Carolina Department of Revenue; Harlan E. Boyles, Treasurer of the State of North Carolina; and the North Carolina Department of Revenue. The plaintiffs are collectively identified as appellants in the case, indicating their pursuit of legal redress against the state officials and department related to revenue matters. The extensive list of names includes over a hundred individuals, highlighting the potentially broad impact of the case on the parties involved.

The document enumerates a comprehensive list of individuals, providing their full names, which likely pertains to a legal context such as a class action, settlement, or formal legal proceedings. The names include a diverse group of people, possibly indicating plaintiffs, defendants, witnesses, or other relevant parties in a legal matter. The extensive list suggests a significant number of participants or affected individuals, highlighting the potentially large scale of the case or issue addressed in the legal document. Each name is presented without context or additional detail regarding their roles, relationships, or the nature of the legal matter at hand.

A lengthy list of plaintiffs, including Thomas P. Ginn and others, is presented in a case against Janice H. Faulkner, Secretary of the North Carolina Department of Revenue, Harlan E. Boyles, Treasurer of the State of North Carolina, and the North Carolina Department of Revenue. The plaintiffs, referred to as Appellees, are engaged in litigation against the defendants, labeled as Appellants. The document emphasizes the involvement of numerous individuals as plaintiffs, indicating a potentially significant collective legal action concerning the state's revenue administration.

The United States Court of Appeals for the Fourth Circuit upheld a lower court's decision in a case involving retired federal employees seeking refunds for overpayments under North Carolina's unconstitutional tax scheme, which had favored state pension benefits over federal ones until 1989. After the Supreme Court's ruling in Davis v. Michigan Dep't of Treasury declared this taxation unconstitutional, the plaintiffs filed a Section 1983 class action, claiming that the state's refund procedures violated their due process rights. However, the district court granted summary judgment in favor of North Carolina, citing an earlier state court judgment that precluded the plaintiffs' claims. The appellate court affirmed this decision, noting that North Carolina had revised its tax system to comply with the Supreme Court's ruling and that the dispute was focused on the state’s refund process outlined in N.C. Gen. Stat. Sec. 105-267, which requires taxpayers to pay the tax first and then file a refund demand within thirty days. If no refund is issued within ninety days, taxpayers can file a lawsuit within three years of that period. This statute represents the exclusive method for challenging the legality of the state tax.

Sec. 266.1 of the North Carolina tax code allows taxpayers to recover excessive payments due to clerical or mathematical errors within three years of the tax return deadline, without the thirty-day limitation imposed by Sec. 267 for illegal tax payments. Plaintiffs assert that misleading information in state tax bulletins led them to believe they could file refund requests within three years, not recognizing the thirty-day requirement of Sec. 267. They argue that the State only publicized Sec. 267 shortly before the 1988 tax filing deadline, preventing many from complying within the required timeframe. In their federal complaint, they seek full refunds for overpayments, claiming the State's enforcement of Sec. 267, along with the misinformation provided, violated their due process rights. The State contends that the claims are barred by the Eleventh Amendment, the federal Tax Injunction Act, and plaintiffs' failure to comply with Sec. 267. The district court denied the State's dismissal motion, asserting jurisdiction despite the Tax Injunction Act, allowing declaratory and injunctive relief, but ruling that monetary claims were barred by the Eleventh Amendment. Following an appeal and the North Carolina Supreme Court's initial dismissal of the claims, the U.S. Supreme Court intervened, ruling that the precedent established in Davis applies retroactively. The plaintiffs then sought to revive their federal action for an injunction against the State's refund denials. The State opposed this, reiterating that the Eleventh Amendment bars any form of relief and requested a reconsideration of the district court's earlier ruling regarding the Tax Injunction Act. Both parties ultimately filed motions for summary judgment.

The North Carolina Supreme Court upheld the state's application of Sec. 267 and denied plaintiffs' requested refunds, reversing the state trial court's summary judgment in favor of the plaintiffs. The court ruled that Sec. 267 met due process requirements and dismissed the plaintiffs' argument that a federal district court's 1990 Tax Injunction Act order should have precluded the state court's due process decision, concluding that the federal order lacked preclusive effect due to its non-final status. Following this ruling, the district court granted summary judgment in favor of the state on the plaintiffs' federal claims, stating that the state court's due process ruling precluded different findings in federal court. However, it denied the state's motions regarding the Eleventh Amendment and reconsideration of the Tax Injunction Act ruling. The plaintiffs subsequently moved for reconsideration, arguing that the district court misapplied issue preclusion and that the Eleventh Amendment did not bar relief, as Sec. 267 imposed an administrative burden on federal rights and was not applicable to Sec. 1983 actions. The court denied this motion. The plaintiffs appealed both the summary judgment and the denial of their motion to reconsider, while the state cross-appealed, challenging the district court's findings on the Eleventh Amendment and federal jurisdiction under the Tax Injunction Act. The appellate court will review the summary judgment de novo, applying the same standards as the district court, which necessitates no genuine issue of material fact and entitlement to judgment as a matter of law. The plaintiffs assert that the district court erred in granting summary judgment based on issue preclusion, contending that the state court's decision on due process should have been precluded by the federal court's prior ruling regarding the Tax Injunction Act, which they argue indicated that Sec. 267 was not a "clear and certain" remedy as required for due process.

The Tax Injunction Act restricts federal district courts from hearing cases related to state taxation unless the state does not provide a "plain, speedy and efficient remedy." The district court determined it had jurisdiction because it found the state’s misapplication of Section 267 created an "uncertain" remedy, failing the required standard. Plaintiffs argue that without a proper remedy, they lack a meaningful opportunity to litigate their claims, particularly since the state court deemed the same remedy "clear and certain," which contradicts the federal finding. They assert the district court was not obligated to give preclusive effect to the state court's decision since the state court did not reciprocate for the federal order. The State of North Carolina contends on appeal that the state court was not bound by the earlier federal order as it was not final and refutes the plaintiffs' due process argument, citing the Supreme Court case Parsons Steel, Inc. v. First Alabama Bank. This case established that state court decisions on preclusion must be afforded full faith and credit by federal courts, regardless of correctness. The North Carolina Supreme Court's decision in Swanson III, which found it was not precluded by the federal order, is binding on the federal court per the Parsons principle. Plaintiffs’ reliance on American Postal Workers Union v. United States Postal Service to assert the federal court could ignore the state court ruling is unpersuasive, as the contexts differ significantly. Ultimately, the Parsons ruling mandates that if plaintiffs believe the state court's decision was incorrect, their proper remedy is an appeal to the U.S. Supreme Court, not a new action in federal court.

The federal district court was required to give the same preclusive effect to the North Carolina Supreme Court ruling as North Carolina courts would. The court needed to determine if it was precluded by the state court's Swanson III due process decision under North Carolina law. The requirements for issue preclusion in North Carolina include: (1) the issues must be the same as in the prior action; (2) the issues must have been raised and litigated; (3) the issues must be material to the prior action; and (4) the determination must have been essential to the judgment. The district court correctly found that the issue of whether Sec. 267 met the McKesson due process test was the same as in Swanson III. Both parties had vigorously litigated this issue, which was crucial to the state court's judgment. The plaintiffs’ argument regarding Sec. 267's constitutional compliance was central to their case, fulfilling all four requirements for issue preclusion.

The court also rejected the plaintiffs’ argument that the Supremacy Clause barred the application of Sec. 267 due to its conflict with Sec. 1983's remedial objectives, clarifying that it was not the Sec. 1983 action but state administrative relief that was affected by Sec. 267's time limitation. Furthermore, the plaintiffs claimed the district court's order was overbroad as it overlooked taxpayers who complied with Sec. 267 but were still denied relief. The State acknowledged delays in processing refunds but assured that these claims would be promptly reviewed, leading the court to conclude that such administrative issues did not reach a constitutional level. Consequently, the district court's judgment was affirmed, and the issues in the State's cross-appeal were not addressed. The plaintiffs were categorized into two classes: "Class A" for retired federal employees and "Class B" for active duty military personnel or reservists in the relevant timeframe. The document also references precedents set by the U.S. Supreme Court regarding tax treatment of retirement income.

Section 267 establishes that a taxpayer with a valid defense against a tax assessment must pay the tax to the appropriate officer without prejudice to their rights. They can request a refund within 30 days of payment; if not refunded within 90 days, they may sue the Secretary of Revenue within three years. If the court finds the tax unlawful or excessive, it will issue a judgment for the amount, including interest. 

The State acknowledges that its previous tax scheme violated Class A plaintiffs' constitutional rights but contends that Class B plaintiffs were not similarly affected. Class B plaintiffs argue that the state's $1,500 income tax exclusion for National Guard members, while denying it to active duty and reservist personnel, unconstitutionally favored state income over federal income. The court does not opine on the merits of this argument but assumes, for the sake of argument, that Class B plaintiffs were unconstitutionally taxed, treating both classes as one for this appeal.

Section 266.1 allows taxpayers to apply for refunds within three years of the filing deadline or within six months of payment, whichever is later. The Secretary must hold a hearing and adjust taxes if they are found excessive or incorrect.

The court views the Tax Injunction Act as reflecting principles of comity, a point both parties agree on. The document also notes a preference for the term "issue preclusion" over "collateral estoppel." Both parties extensively briefed arguments regarding the finality of issues and whether the North Carolina Supreme Court was precluded by a prior order. The court indicates that even erroneous state court rulings on preclusion must be given full faith and credit, thus not addressing the disputes over the nature of the 1990 order. Parsons is referenced as relevant to these issues and was decided after Postal Workers.