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U.S. Supreme Court Denies Petition to Review Cook County Property Tax Assessment Litigation

K-12 Education Property Tax

As reported in Education Week, the U.S. Supreme Court has denied a petition to hear an appeal brought by the Cook County Treasurer’s Office, the Cook County Assessor’s Office and others challenging a 7th Circuit decision allowing Illinois federal courts to hear property tax disputes. Franczek P.C., along with other law firms, filed an amicus brief in support of the petition on behalf of several school district clients, the Illinois Association of School Boards, and the Illinois Association of School Business Officials urging the Supreme Court to consider this important issue.

The plaintiffs in this case, a group of seven Cook County property tax payers sued in the Northern District of Illinois alleging that between 2000 and 2008 their constitutional rights were violated when county officials assessed their properties at the level set in County ordinance but assessed residential property substantially below the level set in County ordinance.  The taxpayers’ complaint asks for refunds of $27.8 million plus interest. In defense of these claims, and to keep property tax matters in state court, the County defendants argued that the Tax Injunction Act prohibits federal courts from interfering with the state collection of revenue where a “plain, speedy, and efficient remedy” exists in state court.  The District Court ruled in favor of the County defendants, but the 7th Circuit reversed, finding no “plain, efficient, and speedy” remedy existed for the taxpayers’ constitutional claims in state court. The case will now proceed in the trial court for a determination on the merits of the claims.

The amicus brief argued that school districts and other taxing agencies are the real parties of interest since it is their revenue that will be lost if taxpayers prevail. It went on to set forth all the potential harms that would be imposed on them if litigation continues in federal court.  Finally, the amicus brief argued that the issue should be referred to the Illinois Supreme Court since the 7th Circuit’s decision hinged on a question of state law.

The denial of the petition means that the 7th Circuit decision holding that Cook County property owners may sue in federal court will stand. School districts, who often intervene in lawsuits challenging property tax assessments will now potentially have to litigate in federal court as well as face significant refunds. Franczek P.C. will continue to monitor this litigation and keep our readers apprised of how this issue develops and the effects it may have. Please contact your Franczek attorney with any questions or concerns.