Township of Lyndhurst v. Inc ( 2011 )

  •                                           PRECEDENTIAL
                 FOR THE THIRD CIRCUIT
                           No. 09-2053
        on behalf of itself and all similarly situated taxing
           authorities within the State of New Jersey,
            TRAVELOCITY.COM, L.P.; SITE59.COM,
           LLC; EXPEDIA, INC.; HOTELS.COM, L.P.;
                  ORBITZ WORLDWIDE, INC.;
     doing business as CHEAP TICKETS, INC.; ORBITZ, LLC
           Appeal from the United States District Court
                  for the District of New Jersey
             (D.C. Civil Action No. 2-08-cv-03033)
            District Judge: Honorable Jose L. Linares
                       Argued June 10, 2010
                 Before: AMBRO, CHAGARES,
              and GREENAWAY, JR., Circuit Judges
                (Opinion filed : September 14, 2011 )
    John M. Agnello, Esquire
    James E. Cecchi, Esquire (Argued)
    Lindsey H. Taylor, Esquire
    Carella, Byrne, Cecchi, Olstein, Brody & Agnello
    5 Becker Fram Road
    Roseland, NJ 07068
          Counsel for Appellant
    Melissa C. Fulton, Esquire
    Michael R. Griffinger, Esquire
    One Gateway Center
    Newark, NJ 07102-5310
    Randolph K. Herndon, Esquire
    Karen L. Valihura, Esquire
    Skadden, Arps, Slate, Meagher & Flom
    One Rodney Square, Room 6-23
    P.O. Box 636
    Wilmington, DE 19899
    Brian S. Stagner, Esquire
    Scott R. Wiehle, Esquire
    Suite 2500
    201 Main Street
    Fort Worth, TX 76102
    Lazar P. Raynal, Esquire
    Jeffrey A. Rossman, Esquire (Argued)
    Michael W. Weaver, Esquire
    McDermott, Will & Emery
    227 West Monroe Street, Suite 5200
    Chicago, IL 60606
           Counsel for Appellees
                     OPINION OF THE COURT
    AMBRO, Circuit Judge
           The Township of Lyndhurst, New Jersey, brought this
    putative class action “in its capacity as a taxing authority” on
    behalf of itself and all other similarly situated New Jersey
    municipalities, townships, and counties.1 It alleges that
             The putative class includes “every municipality,
    township, and county in the State of New Jersey that, by
    ordinance authorized under N.J. Stat. Ann. § 40:48F-1, imposes
    defendants—all companies who operate hotel booking sites
    online—owe the putative class unpaid hotel occupancy taxes.2
    The District Court granted defendants’ motion to dismiss on
    prudential standing grounds, concluding that Lyndhurst did
    not have the right to sue for the alleged taxes owed under the
    relevant statutory scheme. Instead, that enforcement right
    was given to the State of New Jersey’s Director of Taxation
    (the “Director”), aided by the State’s Attorney General (the
    “Attorney General”).3 For the reasons that follow, we affirm.
           Lyndhurst is a political subdivision of the State of New
    Jersey. “As a general principle, it is established beyond
    question that [such] municipalities, being created by the State,
    a tax on charges of rent for every occupancy of a room or rooms
    in a hotel.”
             Defendants in this case are Inc., LLC, Travelweb LLC,, Inc., L.P.,, LLC, Expedia, Inc.,, L.P., Hotwire, Inc.,, Inc.,
    Travelport Americas, LLC, Trip Network, Inc., Orbitz, LLC,
    and Orbitz Worldwide, Inc.
             The Director is head of the New Jersey Division of
    Taxation, which is a division within the New Jersey Department
    of the Treasury. See N.J. Stat. Ann. §§ 52:18A-1, -3; 52:27B-
    have no powers save those delegated to them by the
    Legislature and the State Constitution.” Dome Realty, Inc. v.
    City of Paterson, 
    416 A.2d 334
    , 341 (N.J. 1980).4 This case
    involves two distinct powers under N.J. Stat. Ann. §§ 40:48F-
    1 to -5 (the “Enabling Act”): 1) the power to enact a local
    hotel occupancy tax; and 2) the subsequent power to enforce
    it.5 The text of the Enabling Act speaks to each of these
    powers, as well as to the substantive reach of any ordinance
    enacted under this statutory scheme.
    A.    The Enactment Power and the Hotel Occupancy
    Tax’s Substantive Reach
           The Enabling Act’s grant of power to enact local hotel
    occupancy taxes varies based on the “class” of the political
    subdivision at issue. For general classification purposes,
    cities of the “first class” have populations of greater than
             Under New Jersey law, a “municipality” is defined as
    a “municipal corporation,” and “[t]he words ‘municipality’ and
    ‘municipal corporation’ include cities, towns, townships,
    villages[,] and boroughs.” N.J. Stat. Ann. § 1:1-2.
              After we heard oral argument, the New Jersey
    legislature amended the Enabling Act to add two new
    provisions, N.J. Stat. Ann. §§ 40:48F-6 and -7. Though the
    latter is not relevant to this case, Lyndhurst argues that the
    former is, an argument we answer in n.14 below.
    150,000, while cities of the “second class” have populations
    between 12,000 and 150,000. See N.J. Stat. Ann. §§ 40A:6-
    4(a), (b).6 It is undisputed that Lyndhurst is a city of the
    “second class” and that its enactment power is governed by
    N.J. Stat. Ann. § 40:48F-1, which permits it to “adopt an
    ordinance imposing a tax . . . on charges of rent for every
    occupancy . . . of a room or rooms in a hotel.” (Emphasis
    added).7 Lyndhurst exercised this authority by adopting (that
              As noted below, the distinctions based on these
    classifications are more nuanced, as cities of the “second class”
    with international airports have the same powers as cities of the
    “first class.”
               In full, the provision reads as follows:
           The governing body of a municipality, other than
           a city of the first class or a city of the second class
           in which the tax is authorized under [N.J. Stat.
           Ann. § 40:48E-3] is imposed, a city of the fourth
           class in which the tax is authorized under [N.J. §
           40:48-8.15 et seq.] is imposed, or a municipality
           in which the tax and assessment authorized under
           [N.J. Stat. Ann. § 40:54D-4] is imposed, may
           adopt an ordinance imposing a tax, at a uniform
           percentage rate not to exceed 1% on charges of
           rent for every occupancy on or after July 1, 2003,
           but before July 1, 2004, and not to exceed 3% on
           charges of rent for every occupancy on or after
           July 1, 2004, of a room or rooms in a hotel subject
    is, enacting) such a tax, as did each member of the putative
    plaintiff class.8    Even as the New Jersey legislature
    provided Lyndhurst with the power to enact such a tax
    ordinance, it (the legislature) also placed limits on the
    ordinance’s substantive reach. In short, the Enabling Act only
    permitted Lyndhurst to impose a local hotel occupancy tax on
    transactions that were already subject to the Sales and Use
          to taxation pursuant to [the Sales and Use Tax
          Act, N.J. Stat. Ann. § 54:32B-3].
    N.J. Stat. Ann. § 40:48F-1 (emphases added). Cities of the
    “second class” with international airports are governed by a
    different provision. See id. § 40:48E-3.
               Lyndhurst’s hotel occupancy tax ordinance reads as
          There is hereby established a hotel and motel
          room occupancy tax in the Township of
          Lyndhurst which shall be fixed at a uniform
          percentage rate of one percent on charges of rent
          for every occupancy of a hotel or motel room in
          the Township of Lyndhurst on or after July 1,
          2003, but before July 1, 2004, and three percent
          on charges of rent for every occupancy of a hotel
          or motel room in the Township of Lyndhurst on
          or after July 1, 2004, of a room or rooms in a
          hotel subject to taxation pursuant to [the Sales and
          Use Tax Act].
    Tax Act, which levied a statewide tax on “[t]he rent for every
    occupancy of a room or rooms in a hotel in [New Jersey].”
    N.J. Stat. Ann. § 54:32B-3(d). The tax was to be collected by
    “the person collecting rent from the hotel customer,” id.
    § 40:48F-3(a), which included “every operator of a hotel,” id.
    § 54:32B-2(w). Given this scheme, although the substantive
    reach of Lyndhurst’s hotel occupancy tax remains a matter of
    dispute, its power to enact such a tax is not.
    B.     The Enforcement Power
           Once Lyndhurst passed its hotel occupancy tax, the
    Enabling Act also provided for a specific enforcement regime.
    By the terms of the statute, only the Director—a State of New
    Jersey official—is given the explicit right to enforce
    Lyndhurst’s hotel occupancy tax: “The Director of the
    Division of Taxation shall collect and administer any tax
    imposed pursuant to the provisions of [§ 40:48F-1].” Id. §
    40:48F-5 (emphasis added). Interestingly, the Enabling Act
    provides a distinct enforcement regime for cities of the “first
    class” and those of the “second class” with an international
    airport—as these municipalities may enforce directly their
    local hotel occupancy taxes. See id. § 40:48E-3 (outlining the
    enforcement regime for cities of the “first class” and cities of
    the “second class” with international airports). The same
    enforcement power is not given to other “second class” cities
    like Lyndhurst. As noted, this power resides with the
           “In carry[ing] out” his authority to enforce Lyndhurst’s
    hotel occupancy tax, the Director is given “all the powers
    granted in” the Sales and Use Tax Act. Id. § 40:48F-5. This
    includes the power to “determine” the amount of tax owed by
    a taxpayer. Id. § 54:32B-19 (emphasis added). Indeed, the
    Act provides that, “[i]f a return required . . . is not filed, or if a
    return when filed is incorrect or insufficient, the amount of
    tax due shall be determined by the [D]irector from such
    information as may be available.” Id. “[S]uch determinations
    shall finally and irrevocably fix the tax unless the person
    against whom it is assessed . . . shall apply to the [D]irector
    for a hearing, or unless the [D]irector of his own motion shall
    redetermine the same.” Id. The Act also includes a specific
    mechanism for dealing with delinquent taxpayers: “Whenever
    any person required to collect tax shall fail to collect or pay
    over any tax[,] . . . the Attorney General shall, upon the
    request of the [D]irector, bring or cause to be brought an
    action to enforce the payment of same on behalf of the State
    of New Jersey . . . .” Id. at § 54:32B-22(a). In the end, the
    question remains whether this explicit grant of enforcement
    power to the Director (aided by the Attorney General)
    precludes Lyndhurst from bringing its own enforcement
    action against private parties in federal court.
          This case involves the propriety of the taxes owed by
    defendants to certain New Jersey municipalities, pursuant to
    the Enabling Act, under the so-called “Merchant Model”
    employed by defendants, whereby they (1) acquire inventories
    of hotel rooms at negotiated rates; and then (2) rent those
    rooms to consumers at higher rates.9 Lyndhurst alleges that
    defendants calculate the amount owed under Lyndhurst’s
    hotel occupancy tax based on the negotiated rate paid by a
    defendant for rooms (the so-called “wholesale” rate), not the
    higher rate that the consumers are subsequently charged (the
           In its Complaint, Lyndhurst describes the “Merchant
    Model” as follows:
          Defendants: (i) first acquire inventories of hotel
          rooms at negotiated rates from hotels
          (“wholesale” or “net” rates); and (ii) then rent the
          hotel rooms to consumers at higher rates (“retail”
          or “marked up” rates), keeping the difference as
          profit.     Defendants collect rent from their
          customers when the hotel rooms are rented from
          . . . [d]efendants on the [I]nternet. In addition, . .
          . [d]efendants charge the customer a separate
          amount for applicable Hotel Taxes. . . .
          Thereafter, when the customer checks out of the
          hotel, [d]efendants are either invoiced by the hotel
          for the net rate, or . . . [d]efendant pays the hotel
          the net rate through a “single use” credit card
          transaction. . . . The hotels then remit the amounts
          collected by . . . [d]efendants as “taxes” to the
          applicable taxing authority. . . . [T]he amount
          charged . . . fails to include any tax on the amount
          of the rent retained by . . . [d]efendant.
    so-called “retail” rate). Defendants then pay the tax to the
    hotel, which in turn remits it to the State taxing authority.
    Lyndhurst alleges that this scheme, which understates the
    amount of taxes it seeks to exact, is a form of tax evasion.
           At the same time, there is no evidence in the record
    that the Director has ever sought to collect tax revenue under
    a hotel occupancy tax based on the retail rate charged to
    consumers by online travel booking sites. In fact, in a letter
    opinion the New Jersey Division of Taxation has concluded
    that online booking agents are not subject to the hotel
    occupancy tax. This was in response to a ruling request by
    one defendant.10
          Lyndhurst brought this putative class action in June
    2008. It asserted claims for the collection of unpaid taxes,
    conversion, and unjust enrichment, as well as for the
               The parties dispute the weight that should be afforded
    this letter. Defendants argue that this determination is entitled
    to some deference. See Metromedia, Inc. v. Div. of Taxation,
    478 A.2d 742
    , 749 (N.J. 1984) (holding that the Director’s
    interpretation “is entitled to prevail, so long as it is not plainly
    unreasonable”). Lyndhurst counters that the letter ruling should
    be afforded no deference, as it was based on ex parte
    communications by defendants’ counsel, which included both
    factual and legal errors. We need not resolve this dispute, as our
    conclusion is independent of the views expressed in the letter
    imposition of a constructive trust and a declaratory judgment.
    In August 2008, defendants moved to dismiss the complaint
    under Fed. R. Civ. P. 12(b)(1) and (6). In their motion,
    defendants argued that: 1) Lyndhurst lacked standing to bring
    the action; 2) the Director (who was the proper party to bring
    suit, with the aid of the Attorney General) had already
    determined that defendants were not subject to the hotel
    occupancy tax; 3) even if Lyndhurst had standing, it had
    failed to exhaust its administrative remedies; and 4)
    Lyndhurst’s claims failed as a matter of law.
           In March 2009, the District Court granted defendants’
    motion to dismiss for lack of subject matter jurisdiction on the
    prudential standing ground discussed below. It concluded
    that Lyndhurst was attempting to assert a legal right that was
    reserved to the Director (aided by the Attorney General) and
    not to Lyndhurst—namely, the right to enforce Lyndhurst’s
    hotel occupancy tax by determining the amount of tax due and
    then collecting the related revenue. The Court did not reach
    the remainder of defendants’ arguments.
           Lyndhurst filed a timely notice of appeal.
           The District Court had jurisdiction under 28 U.S.C.
    § 1332, and we have jurisdiction under 28 U.S.C. § 1291. We
    exercise plenary review over a dismissal under Fed. R. Civ. P.
    12(b)(1), and determine “whether the allegations on the face
    of the complaint, taken as true, allege facts sufficient to
    invoke the jurisdiction of the [D]istrict [C]ourt.” Turicento v.
    Am. Airlines, 
    303 F.3d 293
    , 300 n.4 (3d Cir. 2002).
           “[T]he question of standing in the federal courts is to
    be considered within the framework of Article III [of the
    Constitution,] which restricts judicial power to ‘cases’ or
    ‘controversies.’” Ass’n of Data Processing Serv. Orgs., Inc. v.
    397 U.S. 150
    , 151 (1970). However, this question
    “involves both constitutional limitations on federal-court
    jurisdiction and prudential limitations on its exercise.” Warth
    v. Seldin, 
    422 U.S. 490
    , 498 (1975). Article III standing has
    three elements: 1) “the plaintiff must have suffered an injury
    in fact—an invasion of a legally protected interest which was
    (a) concrete and particularized, and (b) actual or imminent,
    not conjectural or hypothetical”; 2) “there must be a causal
    connection between the injury and the conduct complained
    of”; and 3) “it must be likely, as opposed to merely
    speculative, that the injury will be redressed by a favorable
    decision.” Lujan v. Defenders of Wildlife, 
    504 U.S. 555
    , 560-
    61 (1992).11 “The party invoking federal jurisdiction bears
              As the Supreme Court recently explained, “[a]lthough
    we have packaged the requirements of a constitutional ‘case’ or
    ‘controversy’ somewhat differently in the past 25 years—an era
    rich in three-part tests—the point has always been the same:
    whether a plaintiff personally would benefit in a tangible way
    from the [C]ourt’s intervention.” Steel Co. v. Citizens for a
    the burden of establishing these elements.” Id. at 561.
            Nevertheless, Article III standing does not answer all
    questions. Even when it exists, courts at times deem it
    prudent not to confer standing to a plaintiff. Though we call
    it “prudential standing,” it is actually an additional set of
    requirements that must be met even when standing otherwise
    exists. Over time, we have developed yet another three-part
    test for assessing when prudential standing is satisfied: 1) a
    plaintiff must “assert his or her own legal interests rather than
    those of a third party”; 2) “courts [should] refrain from
    adjudicating abstract questions of wide public significance
    amounting to generalized grievances”; and 3) “a plaintiff must
    demonstrate that his or her interests are arguably within the
    ‘zone of interests’ that are intended to be protected by the
    statute, rule, or constitutional provision on which the claim is
    based.” Mariana v. Fisher, 
    338 F.3d 189
    , 204-05 (3d Cir.
    2008). “Like their constitutional counterparts, these judicially
    Better Env’t, 
    523 U.S. 83
    , 104 n.5 (1998). For helpful
    background information on the history of standing, see generally
    Anthony J. Bellia Jr., Article III and the Cause of Action, 
    89 Iowa L
    . Rev. 777 (2004); Daniel E. Ho & Erica L. Ross, Did
    Liberal Justices Invent the Standing Doctrine?: An Empirical
    Study of the Evolution of Standing, 1921-2006, 62 Stan. L. Rev.
    591 (2010); Elizabeth Magill, Standing for the Public: A Lost
    95 Va. L
    . Rev. 1131 (2009); and Cass R. Sunstein,
    What’s Standing after Lujan?: Of Citizen Suits, “Injuries,” and
    Article III, 
    91 Mich. L
    . Rev. 163 (1992).
    self-imposed limits on the exercise of federal jurisdiction are
    founded in concerns about the proper—and properly
    limited—role of the courts in a democratic society.” Bennett
    v. Spear, 
    520 U.S. 154
    , 162 (1997) (internal citations and
    quotation marks omitted).           However, “unlike their
    constitutional counterparts, they can be modified or abrogated
    by Congress.” Id.
           The District Court dismissed Lyndhurst’s suit on
    prudential standing grounds. In particular, it concluded that
    Lyndhurst was not the “proper party” to bring the lawsuit and
    therefore ran afoul of our first prudential standing
    requirement. For the reasons that follow, we agree and
    therefore affirm.
    A.     Article III Standing
           Beginning with Article III standing, there is little
    question that Lyndhurst satisfies        “the irreducible
    constitutional minimum of” injury in fact, causation, and
    redressability. Lujan, 504 U.S. at 560. We consider each
    requirement in turn.
           First, there is no dispute that the local hotel occupancy
    tax revenue that the Director collects belongs to the
    municipalities and not to the State. When those taxes are not
    paid in full, the municipalities suffer an injury in fact in the
    form of monetary harm. See Danvers Motor Co., Inc. v. Ford
    Motor Co., 
    423 F.3d 268
    , 293 (3d Cir. 2005) (“Monetary
    harm is a classic form of injury in fact. Indeed, it is often
    assumed without discussion.”). As such, if Lyndhurst is
    correct (and it is owed additional tax revenue under its hotel
    occupancy tax), this constitutes both actual harm as to taxes
    that should have been remitted to it in the past and imminent
    harm with respect to taxes that should be collected for its
    benefit in the future.
            Second, there is a causal connection between
    defendants’ conduct and Lyndhurst’s alleged harm.           In
    Lyndhurst’s view, defendants were required to pay hotel
    occupancy taxes on the retail price charged to their customers.
    Instead, they have paid taxes based only on the wholesale
    rates that they had initially paid for the hotel rooms. As a
    result, Lyndhurst contends that it has not received the full
    amount of taxes due under its hotel occupancy tax
    ordinance—an injury caused by defendants’ conduct.
           Finally, this alleged injury can be redressed by a
    favorable decision of this Court. This could be in the form of
    either money damages or equitable relief.
            In short, Lyndhurst has succeeded in making a non-
    frivolous argument that it was entitled to additional tax
    revenue under the substantive provisions of its hotel
    occupancy tax ordinance. This is enough to satisfy the
    threshold requirements of Article III standing. See, e.g., Steel
    Co. v. Citizens for a Better Env’t, 
    523 U.S. 83
    , 89 (1998)
    (“[T]he [D]istrict [C]ourt has jurisdiction if the right of the
    petitioners to recover under their complaint will be sustained
    if the . . . laws . . . are given one construction and will be
    defeated if they are given another, unless . . . such a claim is
    wholly insubstantial and frivolous.” (internal quotation marks
    and citations omitted)).
    B.     Prudential Standing
            Turning to prudential standing, we note at the outset
    our reluctance to resolve this dispute. Although (overtly) an
    action between a township and private parties, this dispute
    involves decidedly local concerns that, in the interests of
    federal-state comity, we are hesitant to adjudicate, including:
    1) a disagreement between the State and a local government
    over the meaning of New Jersey tax law; and 2) the relative
    enforcement powers delegated to these entities by the State
    legislature. Lyndhurst’s central complaint is that defendants
    are not paying the full money owed to it under its hotel
    occupancy tax. Implicit is a further complaint that the
    Director has misapplied the underlying statute (or otherwise
    neglected his duties) by not requesting enough money from
    defendants. In a sense, Lyndhurst is second-guessing the
    Director—and, through this federal action, asking us to do the
    same. Though “we must be certain not to adjudicate the[se]
    [disputes] unnecessarily,” the statutory scheme at issue in the
    present case is sufficiently clear to justify “wad[ing] into
    [this] fray[]”—albeit unenthusiastically. Amato v. Wilentz,
    952 F.2d 742
    , 755 (3d Cir. 1991).
           In dismissing this case on prudential standing grounds,
    the District Court explained that Lyndhurst was not asserting
    its own “legal interests” as prescribed by the statute, but
    instead those of the Director. At first glance, this may appear
    an odd proposition. After all, Lyndhurst brought the current
    action to enforce its own (properly enacted) hotel occupancy
    tax. As such, one might argue that Lyndhurst had a clear
    “legal interest” in the tax revenue it intended to collect
    through this enforcement action—indeed, it was its own
    revenue under its own ordinance.
           Taken in isolation, this is an appealing argument.
    However, it fails to consider the statutory scheme as a whole,
    and thus construes the legal interests involved too narrowly.
    To understand why, we must return to the specific powers
    granted to Lyndhurst under the Enabling Act.
           A municipality “is a creature of the state and thus
    necessarily subordinate to its creator[,] and can exercise only
    such powers as may be granted to it by the Legislature.” In re
    Grant Charter Sch. Application of Englewood on Palisades
    Charter Sch., 
    727 A.2d 15
    , 45 (N.J. Super. Ct. App. Div.
    1999). This is especially true in the area of taxation. See,
    e.g., Taxi’s, Inc. v. E. Rutherford, 
    373 A.2d 717
    , 723 (N.J.
    Super. Ct. Law Div. 1977) (“The power of taxation, a basic
    right of government, is vested in the Legislature and
    municipalities have no comparable power.”). Even as the
    New Jersey Constitution “directs that grants of power to
    municipalities be construed liberally in favor of the local
    government,” State v. Crawley, 
    447 A.2d 565
    , 569 (N.J.
    1982), where the legislature has “adopted a series of statutes
    which spell out in comprehensive fashion the powers and
    rights of [a] municipalit[y],” those statutes “set forth the
    exclusive means available to a municipality to enforce tax
    liabilities,” Dome Realty Inc. v. City of Paterson, 
    375 A.2d 1240
    , 1243 (N.J. Sup. Ct. App. Div. 1977) (emphasis added).
    As such, “[w]hen a municipality enters the field of
    enforcement of tax collections[,] its power is limited by the
    state legislation on the subject.” Id.; see also Murphy v. Jos.
    Hollander, Inc., 
    34 A.2d 780
    , 783 (N.J. 1943) (“Where the
    [l]egislature has provided a special method for the collection
    of taxes, such is ordinarily an exclusive procedure, and
    remedies based upon general legal rules may not be
    invoked.”); cf. Great Adventure, Inc. v. Dir., Div. of Taxation,
    9 N.J. Tax 480
    , 484-85 (N.J. Tax Ct. 1988) (“Strict adherence
    to statutory requirements is mandated in tax matters because
    they involve exigencies of taxation and the administration of
            Given these well-established principles, Lyndhurst’s
    enforcement power turns on the relevant powers delegated to
    it by the State. To repeat, the Enabling Act itself did not grant
    Lyndhurst any direct enforcement powers—certainly none
    explicitly. The New Jersey legislature’s silence on this point
    takes on added significance when the provisions of the
    Enabling Act governing Lyndhurst are contrasted with those
    governing cities of the “first class” and those of the “second
    class” with an international airport. For those two groups, the
    principal provision reads as follows:
           The governing body of any city of the first class
           or the governing body of any city of the second
           class in which there is located a terminal of an
           international airport may make, amend, repeal[,]
           and enforce an ordinance imposing in the city a
           tax, not to exceed 6%, on charges for the use or
           occupation of rooms in hotels[,] which tax shall
           be in addition to any other tax imposed by law.
    N.J. Stat. Ann. § 40:48E-3 (emphasis added). The Enabling
    Act further provides these municipalities with the power to
    “enforce the payment of delinquent hotel occupancy taxes in
    the same manner as provided for municipal real property
    taxes.” Id. § 40:48E-4(e) (emphasis added). At the same
    time, the provision governing Lyndhurst (and the putative
    class) allows those municipalities—“second class” cities
    without an international airport—to “adopt an ordinance
    imposing a tax . . . for every occupancy . . . of a room or
    rooms in a hotel,” and nothing more. Id. § 40:48F-1
    (emphasis added). Only the Director is given the explicit
    authority to “collect and administer any tax imposed pursuant
    to the provisions of [§ 40:48F-1].” Id. § 40:48F-5 (emphasis
           Thus, though both §§ 40.48E-3 and 40.48F-1 permit
    the relevant municipalities to enact a local hotel occupancy
    tax ordinance, only the former allows a municipality to
    “enforce” such an ordinance directly.            This distinction
    strongly suggests that, if the State legislature had intended for
    Lyndhurst to have a similar power to “enforce” its hotel
    occupancy tax, then it would have expressly granted such a
    power. Yet it did not do so. Instead, for Lyndhurst the power
    to “collect and administer” its hotel occupancy tax was
    delegated explicitly to the Director.
            In short, without the Enabling Act, Lyndhurst would
    have no power to enact a local hotel occupancy tax—let alone
    sue private parties to enforce it directly. With the Enabling
    Act, Lyndhurst is entitled to enact such a tax and receive
    related revenue, but only as dictated by the Act itself. Under
    it, the State legislature conditioned Lyndhurst’s right to enact
    a local hotel occupancy tax on a specific enforcement
    regime—one where the Director was the exclusive decision-
    maker charged with determining the amount of tax due and
    then collecting the related revenue. 12 In short, Lyndhurst is
    only entitled to tax revenue under its hotel occupancy tax as
              The cases cited by Lyndhurst are not to the contrary.
    See, e.g., Jersey City v. Hague, 
    115 A.2d 8
     (N.J. 1955); Board
    of Taxation of Essex County v. Town of Belleville, 
    223 A.2d 359
    (N.J. Super. Ct. Law Div. 1966). These cases simply show that
    a liberal construction of a municipal ordinance is proper when
    either the State statute grants certain powers to the municipality
    or the State legislature did not contemplate a specific context.
    Here, the State legislature considered the current situation (how
    to “collect and administer” Lyndhurst’s hotel occupancy tax)
    and enacted a specific provision addressing it (the Director
    “shall collect and administer,” with the aid of the Attorney
    General, if necessary). As the State legislature never granted
    Lyndhurst the power to “collect and administer” (that is, to
    “enforce”) its hotel occupancy tax, there is nothing to construe
    liberally in its favor. As a result, the statute cannot be
    interpreted (liberally or otherwise) to give Lyndhurst implied
    powers that the State legislature decided not to confer on it.
    determined by the Director—revenue that it has already
    received. In the current action, Lyndhurst is asking for more
    than the Director decided was due. This contravenes the
    enforcement regime enacted by the State legislature. We thus
    agree with the District Court that this suit must be dismissed
    on prudential standing grounds because “Lyndhurst is not the
    proper party to bring suit to enforce its ordinance created
    pursuant to the Enabling Act.”         Dist. Ct. Op. at 13.
    Furthermore, its attempt to do so conflicts with the Director’s
    legal interest in fulfilling his related enforcement
           N.J. Stat. Ann. § 40:48F-3 does not, as Lyndhurst
    contends, undermine this reading of the statutory scheme or
    our conclusion that this suit must be dismissed. That
    provision simply requires a municipality’s chief fiscal officer
    to be joined as a party in any action brought by a hotel
    operator to collect taxes owed by a customer. It reads as
                  a.     A tax imposed pursuant to a
                         municipal ordinance adopted
                         under the provision of N.J. Stat.
                         Ann. § 40:48F-1 shall be collected
                         on behalf of the municipality by
                         the person collecting the rent from
                         the hotel customer.
                  b.     Each person required to collect a
                         tax imposed by the ordinance
                         shall be personally liable for the
                         tax imposed, collected[,] or
                         requ ired to be collected
                         hereunder. Any such person shall
                         have the same right in respect to
                         collecting the tax from a customer
                         as if the tax were a part of the rent
                         and payable at the same time;
                         provided, however, that the chief
                         fiscal officer of the municipality
                         shall be joined as a party in any
                         action or proceeding brought to
                         collect the tax.
    N.J. Stat. Ann. § 40:48F-3. Lyndhurst argues this provision
    demonstrates that the State legislature did not give the
    Director the exclusive right to enforce its hotel occupancy tax.
           We disagree for the reasons already stated by the
    District Court. Properly understood, there are two separate
    “collections” under the Enabling Act. First, there is a
    collection of the tax from the customer by the hotel operator.
    Second, there is a collection of all related taxes from the hotel
    operator by the Director. Importantly, each hotel operator is
    required to remit any taxes owed to the Director, whether the
    operator actually receives the amount owed from its
    customers or not. Under § 40:48F-3, the hotel operator is
    “personally liable” for this tax revenue, and that provision
    simply permits the operator to bring suit directly against
    delinquent customers for the amount owed.              As such,
    § 40:48F-3 covers a hotel operator’s power to sue for a fixed
    amount owed (but unpaid) by a customer, not a municipality’s
    power to bring suit on its own to enforce its ordinance
           Finally, Lyndhurst also argues that it has a right to
    enforce its hotel occupancy tax based on its general police
    powers. Under N.J. Stat. Ann. § 40:48-1, the State legislature
    granted municipalities the right to “make, amend, repeal[,]
    and enforce ordinances to . . . [m]anage, regulate[,] and
    control the finances and property, real and personal, of the
    municipality.” Lyndhurst asserts that its hotel occupancy tax
    is an ordinance relating to the “manage[ment], regulat[ion][,]
    and control” of its finances, which Lyndhurst may “enforce”
    on its own, without the assistance of the Director. However,
    under New Jersey law there is a “clear distinction between the
    power of taxation for revenue and police powers which are
    granted for the maintenance of order and the administration of
    the internal affairs of a municipality.” State v. Hoboken, 
    41 N.J.L. 71
    , 78-79 (1879); see also Taxi’s, Inc., 373 A.2d at 723
    (distinguishing a municipality’s power to tax from its general
    police powers).       Hence, a grant of power under a
    municipality’s general police powers does not necessarily
    affect its powers of taxation. Moreover, a municipality’s
    police powers are still limited by “the laws of [New Jersey],”
    N.J. Stat. Ann. § 40:48-1, which include the Enabling Act.
    And, “[w]here the legislature has provided a special method
    for the collection of taxes,” as in this case, that “is ordinarily
    an exclusive procedure, and remedies based upon general
    legal rules may not be invoked.” Murphy, 34 A.2d at 783.13
           In the end, we believe that the Enabling Act provided
    Lyndhurst with the power to enact its hotel occupancy tax, but
    not to enforce it directly. This enforcement power was given
    to the Director alone (though assisted by the Attorney
    General), and included the exclusive right both to determine
    the amount of tax due and then to collect that amount.14 As
               Lyndhurst contends as well that N.J. Stat. Ann.
    § 40:48-2.11 lends additional textual support to its argument that
    it can sue to enforce its own ordinances. This provision reads as
           Nothing in this act shall be construed to abrogate
           or impair the powers of the courts or of any
           department of any municipality to enforce any
           provisions of its charter or its ordinances or
           regulations, nor to prevent or punish violations
           thereof; and the powers conferred by this act shall
           be in addition and supplemental to the powers
           conferred by any other law.
    The stumbling block is again that the State legislature never
    granted Lyndhurst the power to enforce its hotel occupancy tax.
            N.J. Stat. Ann. § 40:48F-6(a), which was added to the
    Enabling Act after we heard oral argument, reads:
           The State Treasurer [who oversees New Jersey’s
           Department of the Treasury, a division of which
           is the State’s Division of Taxation] shall annually
    such, it was for the Director—not Lyndhurst—to determine
    whether the difference between the wholesale rate and the
    retail rate was taxable under Lyndhurst’s hotel occupancy tax.
    Since Lyndhurst is not given a similar enforcement power, it
    is in effect attempting to share, if not take over, the Director’s
    role as exclusive enforcer of this tax regime—a role
    consciously delegated by the State legislature to the Director
    (aided by the Attorney General) and not to Lyndhurst. Once
    made, it is not our role to second-guess such a legislative
    determination—especially one made by the legislature of a
    sovereign state.
           Viewed this way, this federal action is an attempted
    end-run around the exclusive enforcement regime enacted by
    the New Jersey legislature, with Lyndhurst asking us to insert
    ourselves into this dispute as a means of circumventing the
           provide to a municipality that has adopted an
           ordinance imposing the tax pursuant to
           [§ 40:48F-1] written notification of nonpayment
           by a hotel or motel of taxes required to be paid
           under the ordinance. The written notification
           required by this section shall also authorize the
           municipality to act as the collection agent for the
           outstanding balance of taxes due and owing to it
           in place of the State Treasurer.
    We do not find this provision to grant Lyndhurst any direct
    power to enforce its hotel occupancy tax.
    Director. We refuse to do so.
                             *   *   *    *   *
            For these reasons, we affirm the District Court’s
    judgment and dismiss this action with prejudice.15 Although
    Lyndhurst undoubtedly has a legal interest in receiving tax
    revenue from its local hotel occupancy tax, the State has
    delegated the task of determining the amount of tax due (as
    well as its collection) to its Director of Taxation (assisted by
    its Attorney General). Therefore, any effort by Lyndhurst to
    bring in federal court a direct enforcement action against
    private parties is an attempt to assert the “legal interests . . . of
    a third party”—namely, those of the Director—in determining
    the amount of tax due and collecting the related revenue. Any
    disagreement with this arrangement must be voiced in the
    halls of the State Capitol in Trenton, not the chambers of this
             We asked the parties to offer supplemental briefing on
    whether Lyndhurst had the legal capacity to bring this suit. See
    Fed. R. Civ. P. 17(b). As we have dismissed this action on
    prudential standing grounds, we need not address this issue.
             We also deny Lyndhurst’s Motion to Certify the
    Question to the New Jersey Supreme Court.