American Motors Sales Corporation v. James F. Runke

708 F.2d 202, 1983 U.S. App. LEXIS 28110
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 10, 1983
Docket82-5263
StatusPublished

This text of 708 F.2d 202 (American Motors Sales Corporation v. James F. Runke) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Motors Sales Corporation v. James F. Runke, 708 F.2d 202, 1983 U.S. App. LEXIS 28110 (6th Cir. 1983).

Opinion

708 F.2d 202

AMERICAN MOTORS SALES CORPORATION, Plaintiff-Appellee,
v.
James F. RUNKE, Commissioner, Bureau of Vehicle Regulation,
and Bureau of Vehicle Regulation, Department of
Transportation, and Department of Transportation,
Commonwealth of Kentucky, Defendants-Appellants.

No. 82-5263.

United States Court of Appeals,
Sixth Circuit.

Argued Jan. 17, 1983.
Decided May 10, 1983.

Gary L. Dailey, Office of Gen. Counsel, Dept. of Transp., Dandridge Walton, (argued), Frankfort, Ky., for defendants-appellants.

Edward H. Stopher (argued), Robert E. Stopher, Boehl, Stopher, Graves & Deindoerfer, Louisville, Ky., for plaintiff-appellee.

Before KEITH, KENNEDY and WELLFORD, Circuit Judges.

CORNELIA G. KENNEDY, Circuit Judge.

Defendant Runke, Commissioner of the Bureau of Vehicle Regulation of the Kentucky Department of Transportation, appeals an order of the District Court granting a preliminary injunction prohibiting the enforcement of provisions of the Kentucky Automobile Marketing Act, Ky.Rev.Stat.Ann. Secs. 190.010-190.080, 190.990 (Baldwin 1982)1 against the American Motors Sales Corporation. We affirm the District Court's judgment but remand with directions to modify the injunctive relief granted.

The appellee, American Motor Sales Corporation (American),2 is licensed under Kentucky law to distribute American Motors, Jeep and Renault vehicles, parts and accessories to thirty-two dealers in Kentucky. American has, since as early as 1973, promoted sales to dealers in Kentucky by offering "incentive" programs such as sales contests, rebates and wholesale price reductions. On January 22, 1982, in response to a complaint by Gambrel & Madon Motor Company, Inc.,3 the appellant Runke issued a notice of a hearing before the Kentucky Department of Transportation, Bureau of Motor Vehicle Registration. This notice ordered American to "show cause" why its license to distribute vehicles, parts and accessories in Kentucky should not be revoked for violations of the state's Automobile Marketing Act, Ky.Rev.Stat. Sec. 190.040.

This hearing was postponed until March 29, 1982. In the interim American filed this action on March 22, 1982 seeking injunctive relief and a declaratory judgment that the Kentucky statute was unconstitutional under the Supremacy and Commerce Clauses of the United States Constitution. After an adversary hearing on March 23, the District Court issued a temporary restraining order enjoining the defendants from conducting any hearing "or other proceeding" or otherwise attempting to enforce Ky.Rev.Stat. Secs. 190.010-190.080 or Ky.Rev.Stat. Sec. 190.990. The court subsequently held a full hearing on the issues raised and granted the preliminary injunction now appealed.

Runke raises three issues on appeal: (1) whether the injunction was prohibited under the Anti-Injunction Act, 28 U.S.C. Sec. 2283 (1976); (2) whether the District Court abused its discretion in issuing the preliminary injunction; and (3) whether the District Court abused its discretion in refusing to abstain under the Pullman or Younger doctrines.4

The Anti-Injunction Statute

Appellant Runke urges that the Anti-Injunction Act, 28 U.S.C. Sec. 2283 (1976), prohibits the District Court from enjoining the state administrative hearing at which the Kentucky act was to be enforced. This jurisdictional challenge is without merit. Section 2283 by its terms only prohibits federal courts from enjoining state court proceedings.5 At least two courts including the Sixth Circuit have expressly stated that this prohibition does not extend to state administrative proceedings. Taylor v. Kentucky State Bar Association, 424 F.2d 478, 482 (6th Cir.1970); Engleman v. Cahn, 425 F.2d 954, 958 (2d Cir.1969) cert. denied, 397 U.S. 1009, 90 S.Ct. 1238, 25 L.Ed.2d 422 (1970). See also Erdmann v. Stevens, 458 F.2d 1205, 1213 n. 3 (2d Cir.1972) (concurring opinion); Cabot Corp. v. Public Service Comm'n of W.Va., 332 F.Supp. 370, 373 (S.D.W.Va.1971).6

Runke argues, however, that in United States v. Ohio, 614 F.2d 101, 104 (6th Cir.1979), a panel of this Circuit established that the distinction between state judicial and administrative proceedings is without legal significance under the federal anti-injunction statutes. We disagree. First, United States v. Ohio, did not involve Sec. 2283 but rather the Anti-Tax Injunction Statute, 28 U.S.C. Sec. 1341 (1976). Although both statutes reflect congressional disapproval of federal judicial inference with state judiciaries, they do so in different ways. Section 2283 by its terms only prohibits federal courts from enjoining state court proceedings. Section 1341 on the other hand restricts the district courts from enjoining or restraining the "assessment, levy or collection" of any state tax where a "plain, speedy and efficient remedy" is available in the state courts.7 Since the assessment, levy or collection of state taxes is almost always undertaken administratively Sec. 1341 clearly contemplates a ban on injunctions against state administrative tax proceedings so long as an adequate state court remedy exists. See Rosewell v. LaSalle National Bank, 450 U.S. 503, 512, 101 S.Ct. 1221, 1228, 67 L.Ed.2d 464 (1981); Tully v. Griffin, Inc., 429 U.S. 68, 73, 97 S.Ct. 219, 222, 50 L.Ed.2d 227 (1976). Second, the Court in United States v. Ohio actually refused to consider Sec. 1341, since it was first raised as a defense on appeal. Rather, the Court rested its decision and distinction between administrative and judicial proceedings on the Pullman and Younger abstention doctrines. 614 F.2d at 103-104. Third, in the context of abstention the Court found no distinction between a state court and the particular administrative body sought to be enjoined because that administrative body was well suited to adjudicating the issues of state law involved. The State of Ohio had specifically designated this body, the tax appeals board, to adjudicate state tax law disputes including constitutional questions. The present case in contrast, involves a primarily executive administrative proceeding. Runke's reliance on United States v. Ohio is, therefore, misplaced.

Abuse of Discretion in Granting the Preliminary Injunction

The standard of review on appeal from a preliminary injunction is whether the District Court abused its discretion. Adams v. Federal Express Corporation, 547 F.2d 319, 322 (6th Cir.1976), cert. denied, 431 U.S. 915, 97 S.Ct. 2177, 53 L.Ed.2d 225 (1977). There are four factors to be considered in determining whether the grant of a preliminary injunction was an abuse of discretion: (a) Substantial likelihood of success on the merits; (b) likelihood of irreparable injury; (c) absence of substantial harm to other parties; and (d) protection of the public's interest. Mason County Medical Association v. Knebel, 563 F.2d 256, 261 (6th Cir.1977).

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708 F.2d 202, 1983 U.S. App. LEXIS 28110, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-motors-sales-corporation-v-james-f-runke-ca6-1983.