Roger Huang v. City of Los Angeles , 637 F. App'x 363 ( 2016 )

FILED
NOT FOR PUBLICATION
FEB 18 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROGER HUANG, General Partner, No. 14-55400
on behalf of HYW LIMITED
PARTNERSHIP, D.C. No. 2:13-cv-07698-MMM-AJW
Plaintiff - Appellant,
MEMORANDUM*
v.
CITY OF LOS ANGELES,
a municipal corporation,
Defendant - Appellee.
Appeal from the United States District Court
for the Central District of California
Margaret M. Morrow, District Judge, Presiding
Argued and Submitted February 8, 2016
Pasadena, California
Before: FARRIS, CLIFTON, and BEA, Circuit Judges.
Roger Huang appeals the district court’s dismissal for lack of subject matter
jurisdiction of his suit challenging the City of Los Angeles’s conduct in assessing
taxes against his business. We review de novo a district court’s dismissal for lack
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
of subject matter jurisdiction. N. Cty. Cmty. All., Inc. v. Salazar, 573 F.3d 738, 741
(9th Cir. 2009).
The Tax Injunction Act (TIA), 28 U.S.C. § 1341, bars taxpayers from
challenging the validity of a state tax in federal court where an adequate remedy is
available in state court. Huang does not dispute that such a “plain, speedy and
efficient remedy” is available in the California courts. 28 U.S.C. § 1341. The key
factors to consider in deciding whether a municipal fee is a “tax” for purposes of
the TIA are (1) the entity that imposes the charge; (2) the parties upon whom the
charge is imposed; and (3) the purpose of imposing the charge. Bidart Bros v. Cal.
Apple Comm’n, 73 F.3d 925, 931–32 (9th Cir. 1996). Applying Bidart, the
business taxes assessed by the City of Los Angeles, as well as the penalties added
thereto for delinquent payment, are “taxes” under the TIA. The district court
therefore lacked subject matter jurisdiction over Huang’s claim challenging the
assessment of the taxes and penalties.
The Supreme Court’s decisions in National Federation of Independent
Business (N.F.I.B.) v. Sebelius, 132 S. Ct. 2566 (2012), and Direct Marketing
Association v. Brohl, 135 S. Ct. 1124 (2015), do not change this analysis. The
Court’s analysis in N.F.I.B. is not “clearly irreconcilable” with existing Ninth
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Circuit precedent. Miller v. Gammie, 335 F.3d 889, 900 (9th Cir. 2003) (en banc).
Nor is the reasoning of Direct Marketing applicable to the facts of this case.
The district court did, however, abuse its discretion in dismissing Huang’s
claim with prejudice. A dismissal for lack of subject matter jurisdiction, because it
does not go to the merits of the case, is without prejudice. See Oaks of Woodlake
Phase III, Ltd. v. Hall, Bayoutree Assocs., Ltd. (In re Hall, Bayoutree Assocs.,
Ltd.), 939 F.2d 802, 804 (9th Cir. 1991); see also Fed. R. Civ. P. 41(b). Huang’s
claim therefore should have been dismissed without prejudice. We consequently
vacate the district court’s order of dismissal with prejudice and remand with
instructions to enter a dismissal of the complaint without prejudice for lack of
subject matter jurisdiction.
Costs are awarded to Defendant-Appellee City of Los Angeles.
VACATED AND REMANDED.
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