In re Delaware Public Schools Litigation
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Opinion
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN RE DELAWARE PUBLIC SCHOOLS ) C.A. No. 2018-0029-JTL LITIGATION ) COUNTY TRACK
OPINION
Date Submitted: January 17, 2020 Date Decided: May 8, 2020
Richard H. Morse, COMMUNITY LEGAL AID SOCIETY, INC., Wilmington, Delaware; Karen Lantz, ACLU FOUNDATION OF DELAWARE, INC., Wilmington, Delaware; Saul P. Morgenstern, Peta Gordon, Jessica Laguerre, Travis W. Clark, ARNOLD & PORTER KAYE SCHOLER LLP, New York, New York; Counsel for Plaintiffs Delawareans for Educational Opportunity and the NAACP Delaware State Conference of Branches.
Gary W. Lipkin, Brian E. O’Neill, Alexandra D. Rogin, ECKERT SEAMANS CHERIN & MELLOTT, LLC, Wilmington, Delaware; Rosemarie Tassone-DiNardo, Aaron C. Baker, CITY OF WILMINGTON LAW DEPARTMENT, Wilmington, Delaware; Counsel for Plaintiff City of Wilmington.
Mary A. Jacobson, Adam Singer, Nicholas J. Brannick, NEW CASTLE COUNTY OFFICE OF LAW, New Castle, Delaware; Counsel for Defendant David M. Gregor, Chief Financial Officer for New Castle County.
William W. Pepper, Sr., Gary E. Junge, SCHMITTINGER & RODRIGUEZ, P.A., Dover, Delaware; Counsel for Defendant Susan Durham, Director of Finance for Kent County.
Herbert W. Mondros, Helene Episcopo, MARGOLIS EDELSTEIN, Wilmington Delaware; Counsel for Defendant Gina Jennings, Director of Finance for Sussex County.
LASTER, V.C. The NAACP Delaware State Conference of Branches (the “NAACP-DE”) and
Delawareans for Educational Opportunity (the “DEO”) contend that Delaware’s public
schools fail to provide an adequate education for students from low-income households,
students with disabilities, and students whose first language is not English (collectively,
“Disadvantaged Students”). The failure to provide an adequate education for
Disadvantaged Students is not just a problem for Disadvantaged Students. It affects the in-
school educational environment for all students, including non-Disadvantaged Students.
Ultimately, it affects the larger community of which we are all a part.
As one reason why Delaware’s public schools fall short, the NAACP-DE and the
DEO point to a broken system for funding schools. One third of the funding for Delaware’s
public schools comes from local taxes. When school districts levy local taxes, they are
required to use the assessment rolls prepared by Delaware’s three counties. If there are
problems with the counties’ assessment rolls, then those problems affect the school
districts’ ability to levy local taxes.
The NAACP-DE and the DEO proved at trial that when preparing their assessment
rolls, the counties fail to comply with two legal requirements. First, under the Delaware
Code, “[a]ll property subject to assessment shall be assessed at its true value in money.” 9
Del. C. § 8306(a) (the “True Value Statute”). The Delaware Supreme Court has held that
a property’s true value in money is the same as its present fair market value. Second, under
the Delaware Constitution, “[a]ll taxes shall be uniform upon the same class of subjects
within the territorial limits of the authority levying the tax . . . .” Del. Const. art. VIII, § 1 (the “Uniformity Clause”). The Delaware Supreme Court has held that the Uniformity
Clause requires all taxpayers within the same general class to be treated the same.
It is undisputed that when preparing their annual assessment rolls, the counties use
valuations from three and four decades ago. Sussex County uses valuations that became
effective in 1974. New Castle County uses valuations that became effective in 1983. Kent
County uses valuations that became effective in 1987. Each county refers to its valuation
year as its “base year.”
Making matters worse, two of the three counties do not even use their full base-year
valuations. Sussex County uses 50% of its base-year valuations. Kent County uses 60%.
The NAACP-DE and the DEO proved that assessing properties using base-year
valuations from three and four decades ago—much less using 50% or 60% of those
valuations—is not the same as assessing properties at their present fair market value. The
NAACP-DE and the DEO thus proved that the counties fail to comply with the True Value
Statute.
The NAACP-DE and the DEO also proved that the counties fail to comply with the
Uniformity Clause. During the thirty-three, thirty-seven, and forty-six years since the
counties’ base-year valuations became effective, different properties have appreciated at
different rates. By continuing to use the decades-old valuations when preparing their
assessment rolls, the counties treat owners of similar properties differently. Owners of the
same general class of property may pay taxes at the same nominal rate per dollar of assessed
valuation, but the outdated valuations mean that owners of the same general class of
property pay effective rates that are quite different. Owners whose properties have
2 appreciated more pay a lower effective rate than owners whose properties have appreciated
less. The counties’ outdated assessments conceal a reality of non-uniformity beneath a
cloak of uniformity.
The City of Wilmington also filed suit against New Castle County. The Delaware
Code gives each municipality the right to “elect to use the assessments and supplementary
assessments for property in the municipality as established annually or quarterly by the
[county] in which such municipality is located, subject to statutory judicial appeals, as the
assessment roll of such municipality for municipal taxation.” 22 Del. C. § 1101. A
municipality that exercises this right “shall be entitled to receive a copy of the county
assessments for the properties in the municipality . . . .” Id. § 1103. In addition, the pertinent
county officials are obligated to “certify the total assessed valuation for properties in the
municipality to each municipality . . . .” Id. § 1104. By ordinance, the City chose to exercise
its rights under these statutes (collectively, “the Assessment Roll Statutes”).
The City of Wilmington proved that New Castle County’s persistent use of property
valuations from 1983 violates the True Value Statute and the Uniformity Clause, leading
to inaccurate assessments and certifications. The City proved that by providing inaccurate
assessments and certifications, New Castle County violates its obligations under the
Assessment Roll Statutes.
This decision declares that all three counties use assessment methodologies that
violate the True Value Statute and the Uniformity Clause. This decision declares that New
Castle County violates the Assessment Roll Statutes by using its assessment methodology.
3 This decision does not reach the issue of remedy, which will require further
proceedings. The court originally bifurcated the merits determination from the remedial
phase because of the need to consider carefully what the remedy would be and how it would
be implemented. Both Delaware’s public schools and the counties depend on the current,
albeit broken, system of property tax assessments. It could cause significant disruption to
important public services if the administration of that system was suddenly brought to a
halt. Any remedial calculus must take into account a range of equities and considerations.
While this decision was under submission, the novel coronavirus emerged, resulting
in the Covid-19 pandemic. One of the minor consequences of the pandemic was to delay
the issuance of this decision.
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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN RE DELAWARE PUBLIC SCHOOLS ) C.A. No. 2018-0029-JTL LITIGATION ) COUNTY TRACK
OPINION
Date Submitted: January 17, 2020 Date Decided: May 8, 2020
Richard H. Morse, COMMUNITY LEGAL AID SOCIETY, INC., Wilmington, Delaware; Karen Lantz, ACLU FOUNDATION OF DELAWARE, INC., Wilmington, Delaware; Saul P. Morgenstern, Peta Gordon, Jessica Laguerre, Travis W. Clark, ARNOLD & PORTER KAYE SCHOLER LLP, New York, New York; Counsel for Plaintiffs Delawareans for Educational Opportunity and the NAACP Delaware State Conference of Branches.
Gary W. Lipkin, Brian E. O’Neill, Alexandra D. Rogin, ECKERT SEAMANS CHERIN & MELLOTT, LLC, Wilmington, Delaware; Rosemarie Tassone-DiNardo, Aaron C. Baker, CITY OF WILMINGTON LAW DEPARTMENT, Wilmington, Delaware; Counsel for Plaintiff City of Wilmington.
Mary A. Jacobson, Adam Singer, Nicholas J. Brannick, NEW CASTLE COUNTY OFFICE OF LAW, New Castle, Delaware; Counsel for Defendant David M. Gregor, Chief Financial Officer for New Castle County.
William W. Pepper, Sr., Gary E. Junge, SCHMITTINGER & RODRIGUEZ, P.A., Dover, Delaware; Counsel for Defendant Susan Durham, Director of Finance for Kent County.
Herbert W. Mondros, Helene Episcopo, MARGOLIS EDELSTEIN, Wilmington Delaware; Counsel for Defendant Gina Jennings, Director of Finance for Sussex County.
LASTER, V.C. The NAACP Delaware State Conference of Branches (the “NAACP-DE”) and
Delawareans for Educational Opportunity (the “DEO”) contend that Delaware’s public
schools fail to provide an adequate education for students from low-income households,
students with disabilities, and students whose first language is not English (collectively,
“Disadvantaged Students”). The failure to provide an adequate education for
Disadvantaged Students is not just a problem for Disadvantaged Students. It affects the in-
school educational environment for all students, including non-Disadvantaged Students.
Ultimately, it affects the larger community of which we are all a part.
As one reason why Delaware’s public schools fall short, the NAACP-DE and the
DEO point to a broken system for funding schools. One third of the funding for Delaware’s
public schools comes from local taxes. When school districts levy local taxes, they are
required to use the assessment rolls prepared by Delaware’s three counties. If there are
problems with the counties’ assessment rolls, then those problems affect the school
districts’ ability to levy local taxes.
The NAACP-DE and the DEO proved at trial that when preparing their assessment
rolls, the counties fail to comply with two legal requirements. First, under the Delaware
Code, “[a]ll property subject to assessment shall be assessed at its true value in money.” 9
Del. C. § 8306(a) (the “True Value Statute”). The Delaware Supreme Court has held that
a property’s true value in money is the same as its present fair market value. Second, under
the Delaware Constitution, “[a]ll taxes shall be uniform upon the same class of subjects
within the territorial limits of the authority levying the tax . . . .” Del. Const. art. VIII, § 1 (the “Uniformity Clause”). The Delaware Supreme Court has held that the Uniformity
Clause requires all taxpayers within the same general class to be treated the same.
It is undisputed that when preparing their annual assessment rolls, the counties use
valuations from three and four decades ago. Sussex County uses valuations that became
effective in 1974. New Castle County uses valuations that became effective in 1983. Kent
County uses valuations that became effective in 1987. Each county refers to its valuation
year as its “base year.”
Making matters worse, two of the three counties do not even use their full base-year
valuations. Sussex County uses 50% of its base-year valuations. Kent County uses 60%.
The NAACP-DE and the DEO proved that assessing properties using base-year
valuations from three and four decades ago—much less using 50% or 60% of those
valuations—is not the same as assessing properties at their present fair market value. The
NAACP-DE and the DEO thus proved that the counties fail to comply with the True Value
Statute.
The NAACP-DE and the DEO also proved that the counties fail to comply with the
Uniformity Clause. During the thirty-three, thirty-seven, and forty-six years since the
counties’ base-year valuations became effective, different properties have appreciated at
different rates. By continuing to use the decades-old valuations when preparing their
assessment rolls, the counties treat owners of similar properties differently. Owners of the
same general class of property may pay taxes at the same nominal rate per dollar of assessed
valuation, but the outdated valuations mean that owners of the same general class of
property pay effective rates that are quite different. Owners whose properties have
2 appreciated more pay a lower effective rate than owners whose properties have appreciated
less. The counties’ outdated assessments conceal a reality of non-uniformity beneath a
cloak of uniformity.
The City of Wilmington also filed suit against New Castle County. The Delaware
Code gives each municipality the right to “elect to use the assessments and supplementary
assessments for property in the municipality as established annually or quarterly by the
[county] in which such municipality is located, subject to statutory judicial appeals, as the
assessment roll of such municipality for municipal taxation.” 22 Del. C. § 1101. A
municipality that exercises this right “shall be entitled to receive a copy of the county
assessments for the properties in the municipality . . . .” Id. § 1103. In addition, the pertinent
county officials are obligated to “certify the total assessed valuation for properties in the
municipality to each municipality . . . .” Id. § 1104. By ordinance, the City chose to exercise
its rights under these statutes (collectively, “the Assessment Roll Statutes”).
The City of Wilmington proved that New Castle County’s persistent use of property
valuations from 1983 violates the True Value Statute and the Uniformity Clause, leading
to inaccurate assessments and certifications. The City proved that by providing inaccurate
assessments and certifications, New Castle County violates its obligations under the
Assessment Roll Statutes.
This decision declares that all three counties use assessment methodologies that
violate the True Value Statute and the Uniformity Clause. This decision declares that New
Castle County violates the Assessment Roll Statutes by using its assessment methodology.
3 This decision does not reach the issue of remedy, which will require further
proceedings. The court originally bifurcated the merits determination from the remedial
phase because of the need to consider carefully what the remedy would be and how it would
be implemented. Both Delaware’s public schools and the counties depend on the current,
albeit broken, system of property tax assessments. It could cause significant disruption to
important public services if the administration of that system was suddenly brought to a
halt. Any remedial calculus must take into account a range of equities and considerations.
While this decision was under submission, the novel coronavirus emerged, resulting
in the Covid-19 pandemic. One of the minor consequences of the pandemic was to delay
the issuance of this decision. One of the major consequences of the pandemic was to place
many households, businesses, and local and state governments under financial strain.
While the effects of the pandemic do not mean that the counties can continue indefinitely
to operate a local tax system that violates the Delaware Constitution and the Delaware
Code, the effects of the pandemic likely will introduce additional and significant
considerations for the remedial calculus, particularly regarding the timing of a remedy.
Evaluating those and other issues must await the remedial phase.
I. FACTUAL BACKGROUND
During a two-day trial, the court heard live testimony from five fact witnesses and
one expert witness.1 The parties introduced ninety-six exhibits into evidence and lodged
1 Jea Street, M.V., A.Y., Denzil Hardiman, and James Taylor testified live as fact witnesses. Richard Almy testified live as an expert witness. Initials are used to protect the 4 depositions from fourteen fact witnesses.2 The parties reached agreement on 101
stipulations of fact.3 The following facts were established by stipulation or proven by a
preponderance of the evidence.
A. The Role Of Local Taxes In Funding Delaware’s Public Schools
Delaware’s public schools receive funding from state, local, and federal sources.
PTO ¶ 3. The State of Delaware provides approximately sixty percent of the funding that
Delaware’s public schools receive. Id. ¶ 4. Local taxes generate approximately thirty-one
percent. Id. ¶ 10. Federal sources make up the rest.
School districts generate local funding by levying taxes on non-exempt property
located in their districts. Id. ¶ 11; see 14 Del. C. § 1902(a). The amount of local funding
depends on two variables: the assessed value of the property and the tax rate per dollar of
assessed value. PTO ¶ 16.
confidentiality of two individuals who testified about their minor children. Citations in the form “[Name] Tr.” refer to witness testimony from the trial transcript. 2 Citations in the form “JX –– at ––” refer to trial exhibits with the page designated by the last three digits of the control or JX number. If a trial exhibit used paragraph or section numbers, then references are by paragraph or section. The parties lodged depositions for the following witnesses: Susan Durham, David Gregor, Denzil Hardiman, Reba Hollingsworth, Jane Hovington, C. Linwood Jackson, Gina Jennings, Chris Keeler, Judy Mellen, Jeffrey Sayers, Gary Shannon, Jea P. Street, Susan Wilson, and A.Y. Initials again are used to protect the confidentiality of witnesses who testified about their minor children. Citations in the form “[Name] Dep.” refer to witness testimony from a deposition transcript. 3 Citations in the form “PTO ¶ ––” refer to stipulations of fact in Part II of the pre- trial order. Dkt. 200.
5 When levying local taxes, the school districts do not prepare their own property tax
assessments. By statute, the school districts must use the assessed values that the counties
establish. 14 Del. C. § 1912.
B. The Counties’ Obligations When Assessing Property
The counties are required to assess property for tax purposes “at its true value in
money.” PTO ¶ 19 (internal quotation marks omitted). A property’s true value in money is
the same as its fair market value. Id. ¶ 20. Fair market value is “the price which would be
agreed upon by a willing seller and a willing buyer, under ordinary circumstances, neither
party being under any compulsion to buy or sell.” Id. ¶ 21 (internal quotation marks
omitted).
The Delaware Code does not specify when or how frequently a county must conduct
a general assessment to establish current and uniform values for the properties within its
jurisdiction. Instead, the Delaware Code requires that each county make an annual
determination of assessed value when preparing its written statement of assessments,
otherwise known as the assessment roll. See 9 Del. C. § 8301 (“Annual assessment of all
assessable property and persons”); Id. § 8303 (“Each board of assessment or Department
of Finance or Department of Land Use shall make a written statement of their assessments
. . . .”). Although there are slight variations from county to county, each county follows the
same basic process. See id. § 8301. As part of this annual process, “[e]ach board of
assessment or Department of Finance or Department of Land Use shall revise all valuations
and assessments of assessable property in their counties, and lower or increase the
assessments or valuations.” Id. § 8302(a).
6 To ensure that the annual process is followed, the Delaware Code imposes a
monetary fine of up to $100 per property on any member of a board of assessment who
knowingly assesses property at something other than true value in money. See id. §
8306(b). The Delaware Code also imposes a fine of up to $100 on any receiver of taxes,
county treasurer, or other person authorized to collect school taxes who neglects or fails to
perform any of the duties imposed on that person by law. See 14 Del. C. § 1920.
1. Sussex County’s Obligations
The Sussex County Department of Finance is responsible for determining the value
of taxable property in Sussex County, preparing the county’s assessment rolls, sending tax
bills, and collecting property taxes. PTO ¶ 25; see 9 Del. C. § 7004(c). The Director of
Finance heads the Department of Finance and is responsible for ensuring that Sussex
County’s tax assessments comply with Delaware law. PTO ¶ 27; see 9 Del. C. § 7004(b).
Not later than February 15 of each year, the Department of Finance must prepare a
tax assessment roll for the year and present it to the Sussex County Board of Assessment
Review. PTO ¶ 28; see 9 Del. C. § 7004(j). During the month of March, the Board of
Assessment Review must review the roll and the methods that the Director of Finance used
to establish the assessments. See 9 Del. C. § 7004(j). Not later than June of each year, the
Board of Assessment Review must “certify to the Department of Finance a true and correct
assessment roll for the year.” Id. Not later than July of each year, the Director of Finance
must “certify to the county government the total value of all property in the County and the
total value of all property which has been assessed and is subject to taxation.” Id.
7 2. Kent County’s Obligations
Kent County’s process largely tracks Sussex County’s. The Kent County
Department of Finance is responsible for determining the value of taxable property in Kent
County, preparing the county’s assessment rolls, sending out bills, and collecting property
taxes. PTO ¶ 62; see 9 Del. C. § 4124. The Director of Finance heads the Department of
Finance and is responsible for ensuring that Kent County’s tax assessments comply with
Delaware law. PTO ¶ 63; see 9 Del. C. §§ 4123(b), 4124(b).
Not later than April 1 of each year, the Department of Finance must prepare and
present to the Kent County Board of Assessment Review a copy of the tax assessment roll
for the year. PTO ¶ 64; see 9 Del. C. § 4124(b). From April 1 through April 15, the Board
of Assessment Review reviews the roll and makes additions, alterations, or corrections to
the assessments. After completing its review, the Board of Assessment Review must
“certify to the Department of Finance a true and correct assessment roll for the year.” 9
Del. C. § 4124(b). Not later than May 1, the Director of Finance must “‘certify to the county
government the total value of all property in the County and the total value of all property
which has been assessed and is subject to taxation.’” PTO ¶ 66 (quoting 9 Del. C. §
4124(b)).
3. New Castle County’s Obligations
The process in New Castle County differs from the other counties in form but not
in substance. The New Castle County Office of Finance is responsible for assessing the
value of all property subject to taxation in the county, preparing the county’s assessment
rolls, sending out bills, and collecting property taxes. PTO ¶ 41; see 9 Del. C. §§ 1322,
8 1371(1) & (3), 1375. The Chief Financial Officer for New Castle County manages the
Office of Finance, has the responsibilities of the general manager of the Department of
Finance that are referenced in the Delaware Code, and is ultimately responsible for
ensuring that New Castle County’s tax assessments comply with Delaware law. PTO ¶ 42;
see 9 Del. C. §§ 1322(b), 1371.
Not later than February 15 of each year, the Office of Finance must prepare a tax
assessment roll for the year. PTO ¶ 43; see 9 Del. C. § 1322(a). The New Castle County
Board of Assessment Review reviews the roll and the methods that the Director of Finance
used to establish the assessments. See 9 Del. C. § 1318. Not later than April 30 of each
year, the Office of Finance must certify to the Chief Financial Officer that the assessments
are correct. See PTO ¶ 45; 9 Del. C. § 1322(b). Not later than May 31 of each year, the
Chief Financial Officer must “certify to the County Council the total value of all property
in the County and the total value of all property which has been assessed and is subject to
taxation.” 9 Del. C. § 1322(b). The County Council uses the information to set the county’s
tax rate. See PTO ¶ 45; 9 Del. C. § 8314(a).
C. Assessed Values In The Three Counties
Although Delaware’s statutory regime requires that the counties assess property for
tax purposes at its true value in money, the reality is quite different. All three counties
persist in using the assessed values established by their last general assessments, which at
this point took place over three decades ago. Each county refers to the year in which its last
general assessment became effective as its “base year.” None of the counties have any plan
9 or intention to update their base-year valuations. Each thus uses an indefinite-base-year
method of property assessment.
1. The Reality In Sussex County
Sussex County’s indefinite-base-year method of assessment relies on values from
1974, which is when Sussex County’s last general assessment became effective. 4 Sussex
County assesses properties for tax purposes at 50% of the values that were established in
1974. PTO ¶ 33. As a result, when determining the fair market value of a property in 2020,
Sussex County uses half of its value in 1974. Sussex County thus equates a property’s
present fair market value with 50% of its value from forty-six years ago. See id. ¶ 36.
Under Sussex County’s version of the indefinite-base-year method, if a property
was valued as part of the general assessment, then that value continues to be its assessed
value. If Sussex County has to value a property that did not exist in 1974, then the assessors
try to determine what value it would have been given in 1974. See id. ¶¶ 24, 34. To do that,
Sussex County assessors use replacement cost data derived from the cost manuals that the
4 PTO ¶ 32. During discovery, Sussex County informed the plaintiffs that the general assessment which became effective in 1974 established property values as of a date “prior to 1974.” JX 36 at 5. The record in this case does not reveal how much “prior to 1974,” but a reference in a Delaware Supreme Court decision suggests that the general assessment used a valuation date in 1970. See Bd. of Assessment for New Castle Cty. v. Stewart, 378 A.2d 113, 116 (Del. 1977). It is thus likely that Sussex County actually assesses property at 50% of its value in 1970. The earlier date makes Sussex County’s assessments even more stale and further undermines its system of taxation for purposes of the True Value Statute and the Uniformity Clause. For simplicity, and because the assumption favors Sussex County, this decision assumes that Sussex County’s indefinite-base-year method uses valuations from 1974.
10 H. L. Yoh Company provided as part of the 1974 general reassessment. Id. ¶ 34. Sussex
County assessors use the same approach when valuing property attributes that did not exist
in 1974, such as solar panels or wind farms. See id. ¶ 35 & n.28.
Sussex County officials recognize that replacement cost in 1974 has no correlation
to present fair market value. Id. ¶ 37. They recognize that the values of nearly all taxable
properties in Sussex County have changed since 1974. Id. ¶ 38. They likewise understand
that during the forty-six years since 1974, properties values in Sussex County have not
changed at uniform rates. Property values in different areas have changed at different rates,
as have properties with different uses. See id. ¶ 39. Sussex County officials agree that in
some parts of Sussex County, fair market values have increased greatly, while in other
parts, fair market values stagnated. See, e.g., Jennings Dep. 62; Keeler Dep. 104–06.
The total assessed value of taxable property on the Sussex County Assessment Roll
for fiscal year 2018 was $3,464,256,423. PTO ¶ 30. Everyone agrees that a general
reassessment would increase the total assessed value. Id. ¶ 17.
Sussex County has no plans to update its assessments. Id. ¶ 83. Sussex County
intends to continue assessing properties using values from 1974. Id.
2. The Reality In Kent County
Kent County’s indefinite-base-year method of assessment relies on values from
1987, which is when Kent County’s last general assessment became effective. 5 Kent
5 Id. ¶ 68. Kent County’s general assessment appears to have determined fair market value as of a date in 1986. JX 33 at 5; see PTO ¶¶ 72–74. As with Sussex County, the earlier date makes Kent County’s assessments one year older and further undermines them 11 County assesses properties for tax purposes at 60% of the values that were established in
1987. PTO ¶ 70; see id. ¶ 23 n.17. As a result, when determining the fair market value of a
property in 2020, Kent County uses 60% of its value in 1987. Kent County thus equates a
property’s present fair market value with 60% of its value from thirty-three years ago.
When preparing the annual assessment roll, the Kent County Department of Finance
starts with the taxable assessed values from the 1987 assessment, then adjusts for any
material changes that might affect the value of property. Id. ¶ 71. When making
adjustments, the Kent County Department of Finance uses construction cost data from the
1987 assessment. Id. ¶ 72. When assessing property that did not exist in 1987, the
Department of Finance uses construction cost data from the 1987 assessment. Id. ¶ 73.
When raw land in Kent County is subdivided and must be assessed, the assessors determine
the value it would been given in 1987. Id. ¶ 74. The overarching goal of the Department of
Finance is to ensure that all taxable property is assessed at the value it was or would have
for purposes of the True Value Statute and the Uniformity Clause. Additional problems arise under the Uniformity Clause because a Kent County official testified that the county uses a valuation date of July 1, 1987, when assessing properties or attributes that did not exist when the general assessment was conducted. See Durham Dep. 82–83. Kent County thus assesses some properties using a valuation date in 1986 and others using a valuation date in 1987. For simplicity, and because the assumption favors Kent County, this decision assumes that Kent County’s indefinite-base-year method uses valuations from 1987.
12 been given in 1987. See id. ¶ 75. Kent County gives no weight to the actual sales price of
a property when determining its assessed value. See id. ¶ 76.
The total assessed value of taxable properties on the Kent County Assessment Roll
for fiscal year 2018 was $3,580,074,950. Id. ¶ 67. Everyone agrees that a general
reassessment would increase the total assessed value. Id. ¶ 17.
Kent County has no plans to update its assessments. See id. ¶¶ 83–84. Kent County
intends to continue assessing properties using values from 1987. Id.; see Durham Dep.
111–13.
3. The Reality In New Castle County
New Castle County’s indefinite-base-year method of assessment relies on values
from 1983, which is when its last general assessment became effective. PTO ¶ 51. Unlike
Sussex County and Kent County, New Castle County assesses properties at 100% of their
values from 1983. As a result, when determining the fair market value of property in 2020,
New Castle County uses its value in 1983. New Castle County thus equates a property’s
present fair market value with its value from thirty-seven years ago.
Under New Castle County’s version of the indefinite-base-year method, if a
property was valued in 1983, then New Castle County continues to use that value. If New
Castle County has to assess a new property, then its assessors try to give the property the
value it would have been given in 1983. See id. ¶¶ 24, 53. For property types that did not
exist in 1983, the assessor tries to come up with a value from 1983. See id. ¶ 56. The
assessor might estimate the construction cost in 1983. Id. ¶ 54. Or the assessor might use a
sales price or income approach to determine a value from 1983. Id. ¶ 55. In each case, the
13 assessor’s goal is to determine what the value of a property in its current condition would
have been as of July 1, 1983. See id. ¶ 56 n. 48.
The total assessed value of taxable properties on the New Castle Assessment Roll
for fiscal year 2018 was $19,438,388,450. Id. ¶ 48. The Chief Financial Officer of New
Castle County acknowledged that the same properties have a present fair market value of
$58 billion (plus or minus 10%). Id. ¶ 49. He candidly conceded that the taxable assessed
values from 1983 are not the same as present fair market value. Id. ¶ 60. In its answer to
the City of Wilmington’s complaint, New Castle County admitted that its assessments for
residential properties may be less than 20% of present fair market value or more than 50%
of present fair market value. Dkt. 127, Ans. ¶ 32. New Castle County admitted that for
commercial properties, the assessments deviate from present fair market value to a greater
degree. Id. Everyone agrees that a general reassessment would increase the total assessed
value of property in New Castle County. PTO ¶ 17.
New Castle County has no plans to update its assessments. Id. ¶ 83. New Castle
County intends to continue assessing properties using values from 1983. Id.
D. The Problems That The Indefinite-Base-Year Method Creates For Delaware’s Public Schools
The counties’ persistent use of an indefinite-base-year method of assessment creates
problems for Delaware’s public schools and undermines Delaware’s system for funding
public schools. Delaware policy makers have long recognized this fact. See, e.g., JX 3 at
6; JX 4 at 1–2.
14 1. The Report Of The 2008 Reassessment Committee
In June 2008, the 144th General Assembly enacted House Joint Resolution 22,
which instructed specified state agencies to “provide the Governor and the General
Assembly with recommendations for a fair and equitable reassessment of all real property
for the purpose of ad valorem taxation by county governments and school districts.” Del.
H.J. Res. 22 syn., 144th Gen. Assem. (2008). The resulting committee (the “2008
Reassessment Committee”) issued a final report dated November 26, 2008. JX 3.
In its report, the 2008 Reassessment Committee observed that “[p]roperty
reassessment is a common topic among Delaware policy makers” and that “[t]he lack of
regular and consistent valuation of property is seen as the cause of many problems . . . .”
Id. at 4. Delaware’s public schools figured prominently among the groups that suffered
from the harmful effects of outdated property assessments. The 2008 Reassessment
Committee found that the counties’ failure to assess property at its present fair market value
(i) affected the ability of school districts to raise local funding and (ii) undermined the
school districts’ ability to receive their fair share of equalization funding. See id. at 6.
2. The Effect Of Stale Assessments On Local Tax Revenue
Consistent with the findings made by the 2008 Reassessment Committee, the
NAACP-DE and the DEO proved at trial that the counties’ use of the indefinite-base-year
method of assessment undermines the ability of school districts to levy local taxes. When
property has not been reassessed in decades, the assessed values lag behind present fair
market values. As a result, a given tax rate per dollar of assessed value fails to generate as
15 much in local school taxes as it would if properties were assessed at present fair market
value.
In theory, a taxing jurisdiction could address a revenue shortfall arising from the
failure to update property assessments by simply increasing the tax rate. The counties can
do this, because their governing bodies have discretion to adjust the tax rates they levy. 9
Del. C. § 8002. The counties’ revenues are thus not affected by the counties’ failure to
assess properties at present fair market value, because the counties can compensate by
increasing the tax rate.
School boards do not enjoy the same discretion to adjust tax rates. Before a school
board can increase the tax rate, the school board must “call a special election to be held at
the polling place or places designated by the Department of Elections conducting the
election.” 14 Del. C. § 1903. The outcome of the special election determines whether the
new tax rate will go into effect. See id. § 1911.
The counties’ failure to update their assessments to reflect present fair market value
means that year after year, the value of a school district’s tax base remains flat. The amount
of money that the static tax base generates at the prevailing tax rate likewise remains flat.
The cost of running a school district, however, does not remain flat. Each year, inflation
erodes the purchasing power of the school district’s budget, requiring more dollars to
achieve the same results. Even if a school district did not introduce any new initiatives and
just maintained the status quo, the absence of regular and systematic assessments inevitably
generates a funding gap.
16 To raise tax rates and close the gap, a school board must call for a referendum and
ask voters to approve a tax increase. Generally speaking, in Delaware, a school district
needs to prevail in a referendum every three to five years. See Young v. Red Clay Consol.
Sch. Dist., 159 A.3d 713, 800-18 (Del. Ch. 2017).
Prevailing in a referendum is difficult, and referendums often fail. See id. Some
residents object as a matter of principle to having their taxes increased. Others object to the
frequency of the requests. It takes time and effort to understand Delaware’s complex
system for funding public schools, including the direct link between the counties’
persistence in using decades-old property assessments and the need for recurring
referendums. Confronted with regular requests for tax increases, some residents infer that
school officials are wasting money or engaging in empire building. See JX 13 at 6
(describing school districts as facing “a heavy burden” when attempting to replace revenue
by increasing the tax rate through a referendum).
By not assessing properties at their present fair market values, the counties force
school districts to call referendums more often. If properties were assessed at their present
fair market values, then assessed values would increase with inflation. School district
revenue would rise with property values, and the same tax rates would generate more
money for the school districts. Rather than being forced to seek voter approval for tax rate
increases necessary to cover the same expense base, school districts could reserve
referendums for situations when they truly needed more money for new initiatives.
The burden of calling referendums is not trivial. School districts, school personnel,
and parent volunteers must devote time and effort to pursuing referendums that they
17 otherwise could devote to educational purposes. School districts that suffer failed
referendums must make do with less money in real-dollar terms. And regardless of whether
or not the referendums are successful, school districts risk backlash from voters confronted
with recurring requests to have their taxes raised.
3. The Effect Of Stale Assessments On Equalization Funding
The failure to value property at its true value in money also complicates the State of
Delaware’s efforts to support less wealthy school districts. The General Assembly
recognized long ago that the value of the tax base varies across school districts, enabling
some school districts to raise local revenue more easily than others. To promote equity in
school funding, the General Assembly designates a portion of the State’s contribution to
the public schools as “Equalization Funding,” which is intended to provide financial
support for less wealthy school districts.
The formula for allocating Equalization Funding is complex, but essentially pegs
the amount to a combination of each school district’s “effort index” and “ability index.” 14
Del. C. § 1707(b)(1)–(3) & (c). The effort index is the ratio by which the district’s tax
burden exceeds the average tax burden across the state. The ability index is the district’s
aggregate property value.
Because assessed values remain tied to valuations from decades ago, assessed
values cannot be used to measure the district’s relative ability. In an effort to correct for
the outdated values, the General Assembly introduced an additional formula that requires
an initial determination of the “total full valuation of all taxable real property within the
school district.” Id. § 1707(b)(5). That figure is derived by dividing the total assessed
18 valuation of the taxable property in the district “by the average of the 3 most current
assessment to sales price ratios.” Id. § 1707(b)(11) (the “Full Value Formula”). The
governing statute instructs the Office of Management and Budget to “conduct, in
accordance with nationally accepted standards and practices, an assessment to sales price
study, by school district, on an annual basis in order to establish the most current ratios and
such studies shall be open to public review.” Id. The statute provides that “in the event a
county completes a general reassessment during the period between studies, the county’s
assessment to sales price ratio shall be equal to its rate of assessment, until a subsequent
assessment to sales price study is completed.” Id.
The General Assembly’s decision to allocate Equalization Funding using the Full
Value Formula, rather than using current assessed values, implicitly recognizes that (i) the
assessed values are not accurate and (ii) the inaccurate assessments undermine the school-
funding regime. The General Assembly’s decision to use reassessed values only “until a
subsequent assessment to sales price study is completed” implicitly recognizes that
property values can change materially in as little as one year and that it would be
inequitable to use older values to allocate Equalization Funding.
The General Assembly established a committee to oversee the allocation of
Equalization Funding (the “Equalization Committee”). The General Assembly charged the
Equalization Committee with making recommendations annually on the use of the Full
Value Formula and “other issues and concerns related to equalization that impact the
State’s ability to achieve the basic purpose of equalization for Delaware’s school districts.”
Id. § 1707(i).
19 In 2016, the Equalization Committee issued its recommendations for 2017. See JX
9 (the “2016 Equalization Report”).
The committee unanimously agree[d] that a major issue in attempting to equalize school finances is the inconsistencies in current assessment practices related to property valuation. As the committee has tried over time to correct misalignment of equalization dollars due to the lack of reassessment, the formula has grown more and more unreliable. The data on which the equalization formula relies, property assessments, must be made current in order for the Equalization formula to adequately serve its purpose.
Id at 3.
The Equalization Committee further explained how the counties’ failure to update
their property assessments shortchanges school districts:
As the market value of property in a district (as determined by the assessment-to-sales price study) increases, it is deemed to be wealthier and is expected to generate more revenues from local taxes thereby entitling it to less equalization funding. However, since there is no consistent reassessment practice in place, the district’s tax base is not increasing in proportion to its market value. . . . So while a district losses equalization funding, the funding is not replaced by an increase in the tax base. It can only be replaced by a change in the tax rate through referendum. This is an unintended consequence of the formula and has placed a heavy burden on many local districts. It will likely cause even greater problems if the market value of real estate continues to change at current rates. To further compound the problem, the effect of these changes is to lower a district’s effort which may further reduce what they are eligible to receive in equalization funding.
Id. at 6; accord id. at 8. The counties’ failure to assess property at its present fair market
value thus deprives school districts of their fair share of Equalization Funding. The
Equalization Committee concluded that accurate property assessments were necessary to
“provide more reliable data on a district[’]s wealth, ensure equity among taxpayers, and
allow for the equalization model to function as intended.” Id. at 6.
20 The Equalization Committee historically tried to mitigate the problems created by
the counties’ failures to assess property at present fair market value. See id. at 7–8. In the
2016 Equalization Report, the Equalization Committee explained that the assessments had
become so outdated, the General Assembly needed “to establish a new methodology to
determine the distribution of equalization dollars in the future.” Id. at 3. Lacking a
meaningful way to allocate funds equitably, the Equalization Committee recommended
“holding the Fiscal Year 2017 per unit equalization values consistent with Fiscal Year 2009
values.” Id. In other words, the Equalization Committee determined that because property
is not assessed at its true value in money, the Full Value Formula could not be administered
fairly. See id. at 6.
The Equalization Committee made the same observations and determinations in
2017 as part of its recommendation for 2018. See JX 13 (the “2017 Equalization Report”).
The Equalization Committee again made the same observations and determinations in 2018
when making its recommendations for 2019. See JX 21 (the “2018 Equalization Report”).
The record in this case includes a report titled Assessment-to-Sales Ratio Study for
Division III Equalization Funding: 2017 Project Summary. See JX 84 (the “2017 Division
III Study”). A sales ratio captures the relationship between the assessed value of a property
and its fair market value by expressing the former as a function of the latter: The sales ratio
is derived by dividing the assessed value by the price paid in a recent arms’ length sale.
PTO ¶ 93.
Professor Edward C. Ratledge of the University of Delaware prepared the 2017
Division III Study to inform the deliberations of the Equalization Committee in making its
21 recommendations for the 2017 fiscal year. The 2017 Division III Study contains a table
spanning the years from 1996 through 2016 that chronicles the steady, year-by-year decline
in sales ratios as market values diverged from the assessed values established in 1974,
1983, and 1987. See JX 84 at 13.
E. The Problems That The Indefinite-Base-Year Method Creates For The City Of Wilmington
New Castle County’s failure to assess property at its true value in money creates
problems for the City of Wilmington. Delaware law gives every municipality in the state
the right to elect to use the assessments prepared by the county where it is located for
purposes of levying municipal taxes. 22 Del. C. § 1101. Once a municipality has elected to
use county assessments, the municipality is entitled to receive a copy of the county
assessment roll for properties within its jurisdiction and to have the accuracy of the total
assessed value certified by county officials. See id. §§ 1103, 1104.
The City of Wilmington has exercised its right to use New Castle County’s
assessments. See JX 8. Property tax revenues represent a significant revenue source for the
City and are essential for providing public safety and other services to its more than 70,000
residents as well as non-resident property owners and visitors.
The evidence at trial demonstrated that New Castle County’s use of an indefinite-
base-year method fails to assess property at its true value in money. This failure in turn
deprives the City of Wilmington of its right to use county assessments. It also deprives the
City of its right to receive an accurate determination of total assessed value that has been
certified by county officials.
22 The evidence at trial demonstrated that New Castle County’s use of an indefinite-
base-year method also exacerbates the frequency of property appeals, which has a
destabilizing effect on the City of Wilmington’s budget. Each year, officials for the City
attempt to anticipate, estimate, and budget for losses in property tax revenue caused by
property appeals. The following chart shows the budgeted amounts and the actual losses
incurred:
Fiscal Year Budgeted Loss Actual Loss 2015 $250,000 $500,000 2016 $350,000 $50,000 2017 $500,000 $261,000 2018 $250,000 $1,300,000 2019 $250,000 $408,000
The loss for each year is not a one-time event, but rather a reduction in recurring revenue
that affects every subsequent year until a reassessment. In some cases, assessment appeals
have retroactive effect, requiring the City to give the property owner a credit against future
property taxes or issue a refund. See Taylor Tr. 96–97.
Since 2008, appeals of county assessments have contributed to a decline in the total
assessed value of non-exempt properties in the City of Wilmington from $2.3 billion to
$2.16 billion, despite an upward trend in fair market value over the same time frame. See
id. at 98, 100. The bulk of these losses took place between FY2015 and FY2019, when the
City lost $126 million from its tax base due to property appeals.6
6 This amount is established through simple algebra. The record reflects that during this period, the City lost $2,519,000 in revenue from adverse results in appeals, and the 23 New Castle County recognizes that a large number of property owners in the City
of Wilmington file tax appeals. See Dkt. 127, Ctcl. ¶ 61 (“Hundreds of property owners
within the City’s jurisdiction appeal the assessed value of their properties . . . .”). New
Castle County correctly observes that property owners would have the right to file appeals
regardless of the assessment methodology that the county used, but the county’s present
use of the indefinite-base-year method exacerbates the problem. Moreover, the problem
increases over time, because as the base year becomes more stale, a property owner can
mount stronger arguments that the property in its current condition would have a different
value if assessed in that condition in 1983. With thirty-seven years having passed since the
valuation date, property owners have far greater ability to appeal and challenge assessments
than they would if New Castle County assessed properties at their present fair market value.
Just as Delaware policy makers have long recognized the problems that the lack of
accurate property assessments creates for the public schools, they have also recognized that
the outdated assessments facilitate challenges to valuations and cause appeals to
proliferate. The 2008 Reassessment Committee made the following observation:
Businesses such as Verizon and DuPont have successfully challenged their assessments throughout the State based on lack of comparable technology on which to assess the property. Updating property assessments statewide will help ease the number of appeals to local assessment boards and provide the counties with more accurate property data.
JX 3 at 6.
City’s tax rate is 1.995% of assessed value. The total loss in assessed value is therefore $126,265,664.16. See JX 95 at 101; Dkt. 306 at 52–53.
24 In the eleven years since this determination, the issue has only gotten worse. In
2018, The News Journal quoted New Castle County’s current chief executive as saying
that recent judicial decisions had “‘throw[n] the math that [New Castle County] use[s] to
assess properties based on 1983 values into a crazy place, into the twilight zone.’”7 He
added that the decisions “made it easier for companies to challenge their assessments.”
Jedra, supra (internal quotation marks omitted).
F. This Litigation
In January 2018, the NAACP-DE and the DEO filed this litigation. Both are non-
profit, non-partisan, civic-oriented institutions with a strong interest in Delaware’s schools.
The NAACP-DE is the Delaware affiliate of the National Association for the
Advancement of Colored People (the “NAACP”). Like its parent organization, the
NAACP-DE’s mission is to ensure the political, educational, social, and economic equality
of rights of all persons and to eliminate race-based discrimination. See JX 62 at 92. As part
of its mission, the NAACP-DE seeks to ensure that all students in Delaware have an equal
opportunity to obtain a high quality public education. See id. at 81, 83. The organization
has worked since its founding to remove barriers to the education of minority students on
a fully equal basis and to ensure that all students receive the services they need. As part of
the NAACP’s strategic plan for the twenty-first century, the organization seeks to ensure
7 JX 55 at 2 (quoting Christina Jedra, Wilmington mayor accuses county of ‘bleeding’ its tax dollars, The News Journal (Mar. 16, 2018), https://www.delawareonline.com/story/news/local/2018/03/15/wilmington-mayor- county-costing-us-alarming-amount-tax-revenue/428768002/).
25 that “[e]very child will receive a free, high quality, equitably-funded, public pre-K and K-
12 education.” JX 62 at 85. Over the years, the NAACP-DE, its national affiliate, and their
leaders and members have achieved important victories in service of these goals. See, e.g.,
Brown v. Bd. of Educ., 349 U.S. 294, 301 (1955), aff’g Belton v. Gebhart, 87 A.2d 862
(Del. Ch. 1952) (Seitz, C.). The NAACP-DE has seven branches located throughout the
state. The members of the NAACP-DE and its branches include residents of all three
counties.
The DEO is an association of Delawareans who joined together to improve
Delaware’s system of public education so that all children have a meaningful opportunity
to obtain an adequate education regardless of where they live, their economic
circumstances, their health, their disability status, or their first language. See JX 58 at 221.
The DEO’s approximately thirty members include residents of all three counties. Street Tr.
61.
The NAACP-DE and the DEO filed this action because they believe that Delaware’s
public schools are not providing an adequate education to Disadvantaged Students. They
point to a broken system for funding the public schools as one reason why Delaware’s
public schools fall short. They challenged the counties’ assessment practices as one of the
causes of the broken system.
In their original complaint, the NAACP-DE and the DEO sued the county officials
responsible for supervising the assessment process and collecting local taxes. The county
officials moved to dismiss the complaint, and the court denied the motion. See
26 Delawareans for Educ. Opportunity v. Carney (DEO I), 2018 WL 4849935 (Del. Ch. Oct.
5, 2018).
The NAACP-DE and the DEO also sued various state officials who are responsible
for Delaware’s public schools, contending that they have failed to provide an adequate
education for Disadvantaged Students. The state officials moved to dismiss the complaint,
and the court denied the motion. See Delawareans for Educ. Opportunity v. Carney (DEO
II), 199 A.3d 109 (Del. Ch. 2018).
With the claims against the state officials and the county officials both moving
beyond the pleading stage, the court bifurcated the litigation into a “State Track” and
“County Track.” See Dkt. 67. After bifurcation, the NAACP-DE and the DEO filed an
amended complaint which asserted that the indefinite-base-year method of assessing
property also violated the Uniformity Clause. See Dkt. 77. In February 2019, the court
bifurcated the County Track litigation again, separating the merits phase from the remedial
phase. See Dkt. 98.
Meanwhile, in January 2019, the City of Wilmington moved to intervene to assert
claims against New Castle County. Dkt. 89. New Castle County opposed intervention. Dkt.
104. On March 1, the court granted the City’s motion. See Dkts. 110, 121. Later that month,
the City filed its complaint against New Castle County. See Dkt. 111.
On June 7, 2019, just forty days before trial, the counties moved for summary
judgment, arguing that the NAACP-DE and the DEO lacked standing to sue. See Dkt. 156.
New Castle County separately moved to dismiss the City of Wilmington’s claims for lack
of standing. See Dkt. 163. Because of the imminence of trial and the possibility that the
27 NAACP-DE and the DEO would present evidence that could be relevant to the issues of
standing, the court denied the motions without prejudice. See Dkts. 205, 206. Trial was
held on July 17 and 18, 2019.
II. LEGAL ANALYSIS
The NAACP-DE and the DEO contend that Sussex County, Kent County, and New
Castle County employ assessment methodologies that violate the True Value Statute and
the Uniformity Clause, thereby interfering with the ability of school districts to raise local
taxes and undermining Delaware’s system of funding its public schools. For its part, the
City of Wilmington contends that New Castle County violates the Assessment Roll
Statutes, the True Value Statute, and the Uniformity Clause. The City separately contends
that New Castle County violates what this decision refers to as the Same Rate Statute,
which is a provision that the NAACP-DE and the DEO have not invoked. The City’s claims
overlap, because the City contends that New Castle County violates the Assessment Roll
Statutes by failing to comply with the True Value Statute, the Uniformity Clause, and the
Same Rate Statute.
To parse through these issues, this decision begins with the True Value Statute, then
turns to the Uniformity Clause, then analyzes the Same Rate Statute. Having analyzed the
these requirements both for purposes of the claims asserted by the NAACP-DE and the
DEO, as well as for purposes of the predicate breaches on which the City of Wilmington
relies, this decision addresses the City’s claim under the Assessment Roll Statutes.
28 A. The Counties’ Compliance With The True Value Statute
The NAACP-DE and the DEO contend that the counties are violating the True
Value Statute. The City of Wilmington contends that New Castle County is violating the
Assessment Roll Statutes by failing to comply with the True Value Statute.
The True Value Statute requires that property be assessed for tax purposes at its
“true value in money.” 9 Del. C. § 8306(a). The Delaware Supreme Court has held that a
property’s true value in money “is the same as its fair market value.” New Castle Cty. Dep’t
of Fin. v. Teachers Ins. & Annuity Ass’n, 669 A.2d 100, 102 (Del. 1995). Fair market value
is “the price which would be agreed upon by a willing seller and a willing buyer, under
ordinary circumstances, neither party being under any compulsion to buy or sell.” Seaford
Assocs., L.P. v. Bd. of Assessment Review, 539 A.2d 1045, 1048 (Del. 1988); accord
Teachers Ins., 669 A.2d at 102. Under Delaware law, the fair market value of taxable
property means its “present market value.” Stewart, 378 A.2d at 115. The plain language
of the True Value Statute thus requires that property be assessed for tax purposes at its
present fair market value.
This statutory requirement, however, does not mean that assessed value must always
perfectly match up with present fair market value. Valuation is as much art as science.8
8 See Brennan v. Black, 104 A.2d 777, 795 (Del. 1954) (“‘The valuation of real estate and improvements has always been difficult and presents many problems, and even with the applied science for valuation and appraisal, the true value cannot be obtained with mathematical exactitude . . . .’” (quoting Conory v. City of Battle Creek, 222 N.W.2d 275, 278 (Mich. 1946))); JX 7 at 7 (“Market value is a concept in economic theory and cannot be observed directly.”).
29 Determining the value of a property costs time and money, and market values invariably
change, sometimes rapidly. Given these realities, there will always and necessarily be some
divergence between assessed values and market value. In my view, to evaluate compliance
with the True Value Statute, the operative question is whether the assessments fall within
a reasonable range of present fair market value, taking into account related considerations
such as legitimate governmental interests in efficiency and administrative convenience and
the constitutional mandate of uniform treatment. Cf. Stewart, 378 A.2d at 115-16 (weighing
similar considerations when evaluating compliance with Uniformity Clause).
In this case, the plaintiffs proved that the counties’ assessments deviate from present
fair market value to an unacceptable degree. Although the base-year methodology remains
a theoretically viable approach in the abstract, the indefinite-base-year method that the
counties employ has reached the point where it generates arbitrary assessed values divorced
from any reasonable approximation of present fair market value. The evidence on this point
was one-sided and overwhelming.
1. The Expert Analysis Of The Level Of Assessment
To demonstrate that the counties’ assessments fail to comply with the True Value
Statute, the plaintiffs presented expert testimony from Richard R. Almy. The defendants
chose not to present any expert testimony.
Almy is a professional assessor who is an expert in property tax policy and
administration, valuation, computer-assisted mass-appraisal, land information
management, performance audits, and ratio studies. Almy’s qualifications to testify as an
expert were not disputed. Indeed, both Kent County and New Castle County have retained
30 Almy’s firm in the past to evaluate the need for a general reassessment. See Almy Tr. 129.
Almy was a candid, forthright, and highly credible witness.
Expert assessors like Almy evaluate whether property tax systems comply with
valuation requirements like the True Value Statute by conducting sales ratio studies. To
reiterate, a sales ratio captures the relationship between the assessed value of a property
and its fair market value by expressing the former as a function of the latter: The sales ratio
is derived by dividing the assessed value by the price paid in a recent arms’ length sale.
PTO ¶ 93. In a perfect system, the sales ratio would be 1.0, because the taxable assessed
value would equal 100% of its fair market value.
The parties agree that a sales ratio study is an accepted and effective method for
evaluating whether properties are assessed at their present fair market value. Id. ¶ 89. The
International Association of Assessing Officers (the “IAAO”) is a nonprofit, educational,
and research association of government assessment officials and others interested in the
administration of property taxes. JX 61 at 2 n.2; see Almy Tr. 127. The IAAO has
promulgated standards for conducting sales ratio studies, which are widely accepted. See
JX 61 at 2 n.2. The principal set of standards is the 2013 Standard of Ratio Studies. See JX
7.
Almy worked for the IAAO from 1969 until 1991. He started as a research assistant,
rose through the ranks, and served as executive director from 1981 through 1991. See Almy
Tr. 126–27. While working for the IAAO, he played a leading role in the IAAO’s efforts
to develop and maintain standards for conducting and interpreting ratio studies. See id. at
128. In 1991, Almy left the IAAO and started a consulting practice, primarily providing
31 advice to taxing agencies at the state and local levels. See id. at 129. While in private
practice, Almy remained involved with the IAAO as a member and continued to play a
significant role in the ongoing development of standards for ratio studies. See id. at 130.
He has written a textbook titled Fundamentals of Mass Appraisal that was published by
the IAAO. See id. at 131–32.
For this case, Almy conducted a series of ratio studies using data from twelve Excel
files that the plaintiffs obtained in discovery from the counties. The initial sample contained
the following numbers of transactions:
Kent New Castle Sussex Residential 16,535 166,919 25,284 Commercial and 645 8,834 500 Industrial Vacant Land 5,522 165 3,087 Mobile Homes -- -- 1,231
Almy determined that vacant land in New Castle County was too small a sample for study.
He proceeded to examine the other categories.
Before making any calculations, Almy converted the assessed values for Sussex and
Kent County into their full-value equivalents to correct for Sussex County’s practice of
assessing properties at 50% of the values that became effective in 1974 and Kent County’s
practice of assessing properties at 60% of the values that became effective in 1987.
Converting the Sussex and Kent assessments into their 100% equivalents allowed Almy to
evaluate sales ratios consistently and in accordance with the IAAO standards. See Almy
Tr. 147–48; JX 61 at 3. Almy also conducted a multi-step process to clean and screen the
counties’ data so that it only included what were likely to be arms’ length transactions. See
32 Part II.E.6, infra. During this process, Almy calculated and reviewed different measures of
central tendency to determine which would be the most reliable and informative. See JX 7
at 13, 27. Almy decided to use the median, which is the standard measure of central
tendency used in ratio studies. See Almy 137–38; JX 7 at 13.
To comply with the IAAO standards, the calculated measure of central tendency
should fall between 0.90 and 1.10. PTO ¶ 94; JX 7 at 17. A measure of central tendency
within this range indicates that the jurisdiction assesses property at between 90% and 110%
of its fair market value. If the measure of central tendency is below 0.90, then the assessed
values are too low. If the measure of central tendency is above 1.10, then the assessed
values are too high. See Almy Tr. 149–50. In addition, each class of property should be
within 5% of the overall level of appraisal in the jurisdiction. PTO ¶ 94; JX 7 at 17.
Using the sales ratios that he calculated, Almy analyzed how the level of assessed
value compared to fair market value in each county. He examined the county as a whole
and the individual school districts within the county. If a school district spanned more than
one county, he examined the property in that school district that was located in the pertinent
county. When the data was available, Almy separately examined residential property,
commercial property, vacant land, and mobile homes. If a single recent year provided a
sufficient number of transactions, then Almy only used transactions from that year. For
example, for residential property in Kent County, Almy only used transactions from 2018.
For commercial property and vacant land in Kent County, however, Almy used five years
of sales data from 2014 to 2018. See JX 61 at 11–12. If a county or school district lacked
a sufficient number of transactions during the five-year period to perform a reliable
33 calculation for a particular type of property, then Almy did not include the calculation in
his analysis.
a. The Level Of Assessment In Sussex County
Almy calculated an overall sales ratio for Sussex County of 0.1687. Id. at 18. This
result indicates that the full-value assessments of property in Sussex County reflect only
16.87% of their fair market value. Because Sussex County in fact uses 50% of its
assessments for tax purposes, Sussex County actually uses assessments that reflect just
8.435% of fair market value. Under the IAAO standards, a measure of less than 90% is
unacceptable.
In addition to a county-wide sales ratio for all types of property, Almy calculated
sales ratios derived from the full-value assessments for four specific types of property:
residential property, commercial property, vacant land, and mobile homes. For each
property type, he calculated sales ratios for each school district and for the county as a
whole. The following chart presents the resulting median sales ratios:
Jurisdiction Median Ratio Median Ratio Median Radio Median Ratio for Residential for Commercial for Vacant for Mobile Property Property Land Homes Indian River 0.1695 0.1427 0.0289 0.1891 Laurel 0.1758 0.1228 0.0571 0.2013 Seaford 0.1808 0.1671 0.0652 0.2143 Milford 0.1769 0.1065 0.0198 0.2065 Woodbridge 0.1830 0.1718 0.0524 0.2163 Cape Henlopen 0.1458 0.0840 0.0312 0.1837 Delmar 0.1599 0.1101 0.0135 0.1993 Countywide 0.1622 0.1307 0.0299 0.1927 IAAO Min. 0.9000 0.9000 0.900 0.9000
34 As the chart shows, the median sales ratios range from a low of 0.0135 for vacant
land in Delmar to a high of 0.2163 for mobile homes in Woodbridge. Reframed as
percentages, the full assessed value of vacant land in Delmar reflects 1.35% of its fair
market value, and the full assessed value of mobile homes in Woodbridge reflects 21.63%
of its fair market value. Because Sussex County in fact uses 50% of its assessments for tax
purposes, the values actually range from a low of less than 1% of fair market value for
vacant land in Delmar to a high of 10.815% of fair market value for mobile homes in
Woodbridge.
Countywide, the full assessed value of residential property in Sussex County reflects
16.22% of its fair market value, the full assessed value of commercial property in Sussex
County reflects 13.07% of its fair market value, the full assessed value of vacant land in
Sussex County reflects 2.99% of its fair market value, and the full assessed value of mobile
home properties in Sussex County reflect 19.27% of its fair market value. Because Sussex
County actually uses 50% of its assessments for tax purposes, Sussex County uses
assessments for residential property that reflect 8.11% of fair market value, for commercial
property that reflect 6.535% of fair market value, for vacant land that reflect 1.495% of fair
market value, and for mobile home properties that reflect 9.635% of fair market value. To
reiterate, under the IAAO standards, assessments are unacceptable when they reflect less
than 90% of fair market value.
b. The Level Of Assessment In Kent County
Almy calculated an overall sales ratio for Kent County at 0.3440. Id. at 13. This
result implied that the full value assessments of property in Kent County reflect only
35 34.40% of fair market value. Because Kent County in fact uses 60% of its assessments for
tax purposes, Kent County’s actual assessments reflect only 20.64% of fair market value.
Under the IAAO standards, a measure of less than 90% is unacceptable.
In addition to a county-wide sales ratio for all types of property, Almy calculated
sales ratios derived from the full-value assessments for three specific types of property:
residential property, commercial property, and vacant land. For each property type, he
calculated sales ratios for each school district and for the county as a whole. The following
chart presents the resulting median sales ratios:
Jurisdiction Median Sales Ratio Median Sales Ratio Median Sales Ratio for Residential for Commercial for Vacant Land Property Property Caesar Rodney 0.3611 0.3379 0.1667 Capital 0.3820 0.3210 0.2089 Lake Forest 0.3397 0.3439 0.1756 Milford 0.3449 0.3609 0.2413 Smyrna 0.3365 0.3144 0.1454 9 10 Woodbridge NA NA 0.1956 Countywide 0.3535 0.3370 0.1813 IAAO Minimum 0.9000 0.9000 0.9000
As the chart shows, the median sales ratios range from a low of 0.1667 for vacant
land in the Caesar Rodney School District to a high of 0.3820 for residential property in
the Capital School District. Reframed as percentages, the full assessed value of vacant land
9 Woodbridge did not have a sufficiently large sample of residential sales in Kent County to produce a reliable result. Id. at 11. 10 Woodbridge did not have a sufficiently large sample of commercial sales in Kent County to produce a reliable result. Id. at 11–12.
36 in the Caesar Rodney School District reflects 16.67% of its fair market value, and the full
assessed value of residential homes in the Capital School District reflects 38.20% of its fair
market value. Because Kent County in fact uses 60% of its assessments for tax purposes,
the values actually range from a low of 10% of fair market value for vacant land in the
Caesar Rodney School District to a high of 22.92% of fair market value for residential
property in the Capital School District.
Countywide, the full assessed value of residential property in Kent County reflects
35.35% of its fair market value, the full assessed value of commercial property in Kent
County reflects 33.70% of its fair market value, and the full assessed value of vacant land
in Kent County reflects 18.13% of its fair market value. Because Kent County in fact uses
60% of its assessments for tax purposes, Kent County actually assesses residential property
at 21.21% of fair market value, commercial property at 20.22% of fair market value, and
vacant land at 10.88% of fair market value. To reiterate, under the IAAO standards,
assessments are unacceptable when they reflect less than 90% of fair market value.
c. The Level Of Assessment In New Castle County
Almy performed similar calculations for New Castle County. But when typing in
the statistical formula to calculate the ratios for commercial properties, he inadvertently
left out part of the function. The counties identified this problem after reviewing his report
and supporting documentation, but they did not present an expert of their own who would
have identified the error, and they chose not to depose Almy and question him about it
before trial. They raised this issue for the first time on cross examination during trial, when
it was too late for the error to be corrected. That was their tactical prerogative, but it
37 interfered with the truth-seeking function of the proceeding.11 Almy therefore was unable
to present any sales ratio data for commercial properties in New Castle County.
Almy nevertheless opined regarding the reliability of the overall sales ratio in New
Castle County by assuming that commercial properties were assessed perfectly at fair
market value.12 On a county-wide basis, making that assumption, the overall sales ratio for
New Castle County was 0.5127. In other words, even assuming that New Castle County
values commercial property perfectly at 100% of fair market value, New Castle County
assesses property overall at just 51.27% of its fair market value. To reiterate, under the
IAAO standards, assessments are unacceptable when they reflect less than 90% of fair
market value.
11 See D.R.E. 611 (“The court should exercise reasonable control over the mode and order of examining witnesses and presenting evidence so as to . . . make those procedures effective for determining the truth . . . .”); see also Buckham v. State, 185 A.3d 1, 9 (Del. 2018) (recognizing the “the trial’s truth-seeking function” and instructing trial judges to exercise their discretion over witness testimony in service of it); Hoey v. Hawkins, 332 A.2d 403, 405 (Del. 1975) (explaining that “a trial decision should result from a disinterested search for truth from all the available evidence rather than tactical maneuvers based on the calculated manipulation of evidence and its production” (internal quotation marks omitted)). See generally Daniel L. Herrmann, The New Rules of Procedure in Delaware, 18 F.R.D. 327, 339 (1956) (explaining that under the Delaware rules, “surprise has been reduced to a minimum and the ‘sporting theory of justice’ has been eliminated in the interest of the ascertainment of truth”; noting that “[t]he exponents of surprise testimony as the best weapon against a perjurious adversary become fewer and fewer as experience proves the contrary view”). 12 The record demonstrates that this assumption, while favorable to New Castle County, is counterfactual. See PTO ¶¶ 48–49; Dkt. 127, Ans. ¶ 32.
38 In addition to a county-wide sales ratio for all types of property, Almy calculated
sales ratios for residential property and commercial property. He did not analyze vacant
property because there were not enough transactions to provide reliable data. Once the
counties identified the error in his formula for commercial property, he conceded that his
values for the commercial property were incorrect, leaving only his values for residential
property. The following chart presents the resulting median sales ratios:
Jurisdiction Median Sales Ratio for Residential Property Brandywine 0.3023 Red Clay 0.3123 Christina 0.3166 Colonial 0.3104 Appoquinimink 0.2845 Smyrna 0.3197 City of Wilmington 0.3242 County ex. Wilmington 0.2986 Countywide 0.3038 IAAO Minimum 0.9000
As the chart shows, the median sales ratios range from a low of 0.2845 for
residential property in the Appoquinimink School District to a high of 0.3242 for
residential property in the City of Wilmington. Reframed as percentages, the full assessed
value of residential property in the Appoquinimink School District reflects 28.45% of its
fair market value, and the full assessed value of residential homes in the City of Wilmington
reflects 32.42% of its fair market value. To reiterate, under the IAAO standards,
assessments are unacceptable when they reflect less than 90% of fair market value.
39 d. Almy’s Opinions Regarding The Level Of Assessment
Based on his analysis, Almy opined that the counties do not value property at its fair
market value. Almy Tr. 150, 153–54. Almy further opined that the counties’ use of an
indefinite-base-year method of assessment is not a professionally defensible approach for
properties that did not exist in the base year. JX 61 at 20. He explained that “[a]n assessor
simply cannot take into account all changes in the supply and demand factors that define
real estate markets while preserving the logic of base-year values. The result is assessments
based on a non-uniform hodge-podge of factors that reflect values as of various dates.” Id.
He also noted that “it is virtually impossible to conclude what the market value of a
property would have been much before it existed.” Id.
2. The Factual Record On The Level Of Assessment
Separate and apart from Almy’s expert testimony, the factual record establishes that
the counties are violating the True Value Statute by failing to assess property at present fair
market value. By their own admission, the counties do not assess property at present fair
Sussex County assesses property at 50% of the value it would have had if it existed in its present condition when Sussex County’s last general assessment became effective in 1974. PTO ¶¶ 32–36. The resulting assessed values have no correlation with present fair market value. Id. ¶ 37.
Kent County assesses property at 60% of the value it would have had if it existed in its present condition when Kent County’s last general assessment became effective in 1987. See id. ¶¶ 68, 70. The resulting assessed values do not reflect present fair market value. Durham Dep. 27.
New Castle County uses the value that the property would have had if it existed in its present condition when New Castle County’s last general assessment became
40 effective in 1983. PTO ¶ 51. The resulting assessed values are substantially different than their present fair market values. Id. ¶ 59; Gregor Dep. 21, 60, 68–69.
New Castle County further recognizes that the ranges of deviations from present
fair market value are quite broad. In its answer to the City of Wilmington’s complaint, New
Castle County “[a]dmitted that the Assessment Ratios for residential properties in the
County may be less than 20% of fair market value or greater than 50% of current fair
market value.” Dkt. 127, Ans. ¶ 32. New Castle County also “[a]dmitted that for
commercial properties in the County, the comparative ratios may vary by an even greater
amount.” Id.
The total taxable assessed value of taxable properties on the New Castle Assessment
Roll for fiscal year 2018 was $19,438,388,450. PTO ¶ 48. In this litigation, the then-
incumbent Chief Financial Officer of New Castle County acknowledged that the same
properties have a present fair market value of $58 billion (plus or minus 10%). Id. ¶ 49.
Based on the testimony of New Castle County’s then-Chief Financial Officer, the overall
sales ratio for all property in New Castle County is approximately 33%.
The counties’ admissions in this case comport with other evidence in the record. In
2017, New Castle County analyzed the divergence between assessed values and fair market
values when evaluating the prospect of a general reassessment. See JX 10 at 5, 17; JX 11
at 3–4; JX 12 at 10, 12. One graph showed the median sales ratio for New Castle County
declining from 1.0 in 1983 to below 0.30 in 2017. See JX 10 at 5; JX 12 at 10; see also JX
76 at 3 (reporting that a random sample of properties in New Castle County had a median
41 sales ratio of 0.2820, that 69% of the properties had sales ratios between 0.24 and 0.31, and
that the range of the sales ratios in the sample was 0.168 to 0.727).
The 2008 Reassessment Committee concluded that Delaware’s counties were not
assessing property at fair market value, observing that “many properties are assessed at
rates as low as 6% of market value” and that “[b]ecause assessments have not kept pace
with increases in market values, Delaware’s statewide assessed valuation represents just
21% of the market value.” JX 3 at 6.
The Equalization Committee has conducted sales ratio studies that reveal a wide
divergence between assessed values and fair market value. In its recommendations for
2017, 2018, and 2019, the Equalization Committee determined that the divergence was so
great that it could not make an equitable recommendation as to the allocation of
Equalization Funding. See Almy Tr. 157; JX 9 at 10, 13–14, 16; JX 13 at 9, 12–13, 15; JX
21 at 9, 12–13, 15; see also JX 84.
In the 2017 Division III Study, Professor Ratledge demonstrated that Delaware’s
counties do not assess property at fair market value. Professor Ratledge calculated an
overall sales ratio for property in Sussex County of 0.08, an overall sales ratio for property
in Kent County of 0.21, and an overall sales ratio for property in New Castle County was
0.30. JX 84 at 12. The study also included a table showing steadily declining sales ratios
from 1996 until 2016 as market values diverged from assessed values. Id. at 13.
For New Castle County, where Almy provided the least data because of the
typographical error in his formula for commercial properties, the 2017 Division III Study
42 reported the following sales ratios as of September 2016 for the school districts in New
Castle County.
Jurisdiction in New Business Farmland Residential Vacant Total Castle County Property Property Land Appoquinimink 0.339 0.260 0.286 0.112 0.289 Brandywine 0.339 0.260 0.279 0.112 0.296 Christina 0.339 0.260 0.298 0.112 0.313 Colonial 0.339 0.260 0.290 0.112 0.313 Red Clay 0.339 0.260 0.294 0.112 0.300 Smyrna (in NCC) 0.339 0.260 0.290 0.112 0.284
Id. at 37; see also id. at 13, 20.
The factual record also provides support for Almy’s opinion that the counties’
indefinite-base-year system is professionally indefensible. The 2008 Reassessment
Committee noted that “[t]he current industry standard is to evaluate the actual market value
of properties at least once every six years.” JX 3 at 6. The IAAO standards promulgated by
the IAAO recommends that “ratio studies made by assessors should be conducted at least
annually.” JX 7 at 10.
3. This Court’s Findings Regarding The Counties’ Compliance With The True Value Statute
The plaintiffs proved by a preponderance of the evidence that the counties violate
the True Value Statute by using an indefinite-base-year method of assessment that
produces assessed values that diverge wildly from present fair market value. Sussex County
violates the True Value Statute by using an indefinite-base-year method that assesses
property at 50% of the value it would have had when its last general assessment went into
effect in 1974. Kent County violates the True Value Statute by using an indefinite-base-
year method that assesses property at 60% of the value it would have had when its last
43 general assessment went into effect in 1987. New Castle County violates the True Value
Statute by using an indefinite-base-year method that assesses property at the value it would
have had when its last general assessment went into effect in 1983. The assessed values in
each county do not reflect present fair market value.
Despite this overwhelming evidence, the counties claim that the plaintiffs failed to
carry their burden of proof because the evidentiary standard is “a very heavy one.” Dkt.
223 at 82 (internal quotation marks omitted). For this proposition, they cite the Delaware
Supreme Court’s observation in Brennan that when a “taxpayer is seeking . . . to set aside
[an] entire assessment on the ground that the Board [of Assessment Review] has
completely disregarded the applicable constitutional and statutory provisions in the
performance of its duty . . . the burden resting on the taxpayer is a very heavy one.” 104
A.2d at 792–93. The reference to a “very heavy” burden did not alter the preponderance-
of-the-evidence standard. The Delaware Supreme Court was rather emphasizing that a
single taxpayer cannot overturn an overall scheme of assessments “by showing that his
own assessment is unreasonably high.” Brennan, 104 A.2d at 793.
In this case, the plaintiffs introduced persuasive evidence of systemic problems with
the counties’ assessments. Even assuming that the evidentiary standard was a higher one,
the plaintiffs presented clear and convincing evidence that the counties fail to comply with
the True Value Statute.
44 B. The Counties’ Compliance With The Uniformity Clause
The NAACP-DE and the DEO contend that the counties are violating the
Uniformity Clause. The City of Wilmington contends that New Castle County is violating
the Assessment Roll Statutes by failing to comply with the Uniformity Clause.
Under the Uniformity Clause, “[a]ll taxes shall be uniform upon the same class of
subjects within the territorial limits of the authority levying the tax, except as otherwise
permitted herein, and shall be levied and collected under general laws passed by the
General Assembly.” Del. Const. art. VIII, § 1. The Uniformity Clause “requires that all
taxpayers of the same class residing within the same tax district be treated equally.”
Stewart, 378 A.2d at 116. Uniformity “is achieved when all taxpayers of the same general
class and within the territorial limits of the authority are treated the same.” Seaford Assocs.,
539 A.2d at 1049.
Perfect uniformity is neither possible nor expected. “Taxation is not an exact science
and, therefore, the uniformity clause does not require that all taxes be assessed with
computer precision against all taxpayers equally.” Stewart, 378 A.2d at 115. Property
values change over time, particularly in a dynamic economy, and the reality of “frequent
economic change will strain any system of assessment which seeks to be uniform.” Id. at
116. “Optimally, every system of assessment will incorporate both the preference for
present market value and the requirement of uniformity into its general scheme; but, when
these two concepts cannot be accommodated under the facts of a specific case, the former
must give way to the latter as the true measure of assessment.” Id. at 115–16.
45 The Uniformity Clause requires a uniform method of assessment because “in the
taxation of real property [uniformity] cannot be achieved without a uniform system of
assessment.” Id. at 115. The base-year method, when properly employed, balances the
preference for assessing property at its present fair market value with the need to ensure
that all taxpayers of the same general class and within the territorial limits of the authority
are treated the same. See id.
In this case, the plaintiffs proved that the counties are using indefinite-base-year
methods that do not generate anything approaching acceptable levels of uniformity. The
counties have used the same assessed values for so long that taxpayers of the same general
class and within the territorial limits of the authority are not treated the same. Instead,
taxpayers experience quite different effective rates of taxation. The fact that property
owners pay the same nominal rates creates a mirage of uniformity. The underlying assessed
values diverge from present fair market value to such a degree that the reality is a profound
lack of uniformity. As with the counties’ violations of the True Value Statute, the evidence
on this point was one-sided and overwhelming.
1. The Expert Analysis Of Uniformity
To address the issue of uniformity, the plaintiffs again relied on expert testimony
and analysis from Almy. Once again, the defendants chose not to present any expert
testimony. Once again, Almy provided credible and persuasive analysis.
Expert assessors like Almy assess uniformity in tax systems by comparing sales
ratios using statistical methods. The parties agree that a sales ratio study is an accepted and
effective method for evaluating whether taxes are being levied uniformly. PTO ¶ 90.
46 Expert assessors study sales ratios to evaluate the relative levels at which properties
are assessed, thereby exposing how a property tax system allocates the real burden of
taxation, as opposed to the nominal burden of taxation. Even if properties are taxed at the
same nominal rate per dollar of assessed value, the properties that are assessed at a higher
ratio to present fair market value will pay taxes at a higher effective rate. The relatively
higher-valued properties pay a relatively higher share of the tax burden, which may cause
the system to be non-uniform. See Almy Tr. 141–42; JX 61 at 2, 4.
Expert assessors consider at least three different dimensions of uniformity. One
dimension examines the sales ratios of similar types of properties. In a uniform system,
similar types of property will have similar sales ratios. In a non-uniform system, the sales
ratios of properties within the same category will diverge, resulting in the higher-valued
properties paying a higher effective rate and bearing a greater relative share of the relative
tax burden. Almy referred to this dimension of his analysis as the issue of horizontal equity.
This decision refers to the issue as “within-category uniformity,” because the analysis tests
whether similar properties that are grouped together in a category receive uniform
treatment. See Almy Tr. 139; JX 61 at 4.
A second dimension of uniformity compares the sales ratios of one category (such
as residential property) with the overall sales ratio for all properties or with the sales ratios
for properties in another category (such as commercial property). In a uniform system, the
sales ratios will be similar. In a non-uniform system, the sales ratios will diverge, with the
category of property with a higher sales ratio paying a higher effective rate and bearing a
relatively greater share of the tax burden. See Almy Tr. 139; JX 61 at 3. Almy regarded
47 this dimension of uniformity as a second aspect of horizontal equity. This decision refers
to it as “cross-category uniformity,” because it examines whether properties in different
categories receive uniform treatment.
A third dimension of uniformity compares the sales ratios of lower-value properties
with the sales ratios of higher-value properties. In a uniform system, sales ratios will be
similar regardless of property value. In a non-uniform system, the sales ratios at one end
of the valuation spectrum may be higher than the sales ratios at the other end of the
valuation spectrum. Once again, even if the properties are taxed at the same nominal rate
per dollar of assessed value, the properties assessed at a higher level pay a higher effective
tax rate, causing them to bear a greater relative share of the tax burden per dollar of true
value. See Almy Tr. 141–42; JX 61 at 2, 4. This decision refers to this dimension of
uniformity as “price-related uniformity.”
A lack of price-related uniformity could favor either higher-value properties or
lower-value properties. Generally speaking, if the higher-value properties have a lower
sales ratio, then the owners of lower-value properties bear a greater relative share of the
tax burden, and the system is regressive. If the higher-value properties have a higher sales
ratio, then the owners of lower-value properties bear a smaller relative share of the tax
burden, and the system is progressive. The IAAO standards state that “[a]ppraisals made
for tax purposes of course should be neither regressive nor progressive.” JX 7 at 14.
a. Within-Category Uniformity
To measure within-category uniformity, expert assessors use a statistical measure
of variability called the coefficient of dispersion. PTO ¶ 96. To derive this measure, the
48 assessor identifies a statistically significant group of properties within the category being
examined, then calculates sales ratios for the properties within the group. The coefficient
of dispersion measures the extent to which the sales ratios of individual properties within
the group deviate on a percentage basis from the median sales ratio for the group. In a
category with a low coefficient of dispersion, similar properties have similar sales ratios.
When graphed, the observations clump together, indicating a high degree of uniformity. In
a category with a high coefficient of dispersion, similar properties have divergent sales
ratios. See Almy Tr. 138–39; JX 61 at 4; PTO ¶¶ 97–98.
The IAAO has established ranges of acceptable coefficients of dispersion for
different types of properties in jurisdictions similar to the counties. For residential
properties, the range is 0.05 to 0.15. JX 7 at 19.13 For commercial or business properties,
the range is 0.05 to 0.20. JX 7 at 19; see PTO ¶ 100. For vacant land, the range is 0.05 to
0.25. JX 7 at 19; see PTO ¶ 101. See generally Almy Tr. 140; JX 7 at 19, 34.
13 In the pre-trial order, the parties stipulated that the IAAO standards set the range for the coefficient of dispersion for residential properties as 0.05 to 0.20. See PTO ¶ 99. In tension with this stipulation, the IAAO standards state that the range is actually 0.05 to 0.15. JX 7 at 19. Given the clarity of the IAAO standards, this decision uses the official standard, rather than the parties’ stipulation. “Courts have broad discretion in determining whether to hold a party to a stipulation and may set aside a stipulation where enforcement would not be conducive to justice.” 73 Am Jur. 2d Stipulations § 12, Westlaw (database updated Feb. 2020) (footnote omitted); accord Perry v. Neupert, 2019 WL 719000, at *28 (Del. Ch. Feb. 15, 2019). The misstatement of the IAAO standards was an obvious mistake, and it would be unjust to apply it.
49 i. Within-Category Uniformity In Sussex County
Almy calculated coefficients of dispersion for each school district located in Sussex
County and for the county as a whole. He again examined residential property, commercial
property, vacant land, and mobile homes. The following chart presents the results:
Jurisdiction COD for COD for COD for COD for Residential Commercial Vacant Land Mobile Homes Property Property Indian River 0.260 0.495 0.943 0.245 Laurel 0.249 0.556 0.691 0.217 Seaford 0.246 0.440 0.626 0.198 Milford 0.219 0.533 2.039 0.201 Woodbridge 0.231 0.359 0.611 0.195 Cape Henlopen 0.299 0.610 0.875 0.317 Delmar 0.292 0.490 1.1948 0.231 Countywide 0.277 0.527 0.988 0.252 IAAO Max. 0.150 0.200 0.250 0.200
For residential property, commercial property, and vacant land, the coefficients of
dispersion exceed the maximums deemed acceptable by the IAAO in every school district
and for the county as a whole. For mobile homes, the coefficients of dispersion equal or
are slightly below the maximum in two districts, while exceeding the maximum in five
districts and for the county as a whole.
ii. Within-Category Uniformity In Kent County
Almy calculated coefficients of dispersion for each school district located in Kent
County and for the county as a whole. He again examined residential property, commercial
property, and vacant land. The following chart presents the results:
50 Jurisdiction COD for Residential COD for Commercial COD for Vacant Property Property Land Caesar Rodney 0.161 0.323 0.491 Capital 0.196 0.400 0.434 Lake Forest 0.167 0.427 0.452 Milford 0.202 0.347 0.398 Smyrna 0.158 0.380 0.623 14 Woodbridge NA NA15 0.369 Countywide 0.182 0.377 0.488 IAAO Max. 0.150 0.200 0.250
For each category of property, the coefficients of dispersion exceed the maximums deemed
acceptable by the IAAO in every school district and for the county as a whole.
iii. Within-Category Uniformity In New Castle County
Almy calculated coefficients of dispersion for each school district located in New
Castle County and for the county as a whole. He examined both residential and commercial
property, but because of the error in his formula for commercial property, those results
could not be used. The following chart presents the results for residential property:
14 Woodbridge School District did not have a sufficiently large sample of residential sales in Kent County to produce reliable results. JX 61 at 11. 15 Woodbridge School District did not have a sufficiently large sample of commercial sales in Kent County to produce reliable results. Id. at 11–12.
51 Jurisdiction COD for Residential Property Brandywine 0.344 Red Clay 0.311 Christina 0.288 Colonial 0.272 Appoquinimink 0.173 Smyrna 0.380 Wilmington 0.360 County ex. Wilmington 0.235 Countywide 0.288 IAAO Max. 0.150
The coefficients of dispersion for residential property exceed the maximums deemed
acceptable by the IAAO for every school district, for the City of Wilmington, for the county
excluding the City, and for the county as a whole. Almy Tr. 151.
iv. Almy’s Opinions Regarding Within-Category Uniformity
Based on his analysis, Almy opined that Sussex County and Kent County do not tax
real property in a uniform manner. JX 61 at 20. Almy also opined that New Castle County
does not tax property in a uniform manner, but because his analysis of commercial property
could not be used, his opinion was limited to New Castle County’s taxation of residential
property. Id.
b. Cross-Category Uniformity
To analyze cross-category uniformity, professional assessors compare the measures
of central tendency for different categories of property, both among themselves and with
the overall level of assessment. Under the IAAO standards, levels of assessment are
unacceptable when they differ by more than 5% from each other or from the overall level
of assessment. JX 7 at 17. For example, if the overall sales ratio for a jurisdiction is 0.80,
52 then each category of property should have an assessment ratio between 0.76 and 0.84. A
jurisdiction with assessments falling in this range would be achieving uniformity by taxing
different categories of property at similar levels. A jurisdiction that taxed one or more
categories of property at 75% or less of fair market value or 85% or more of fair market
value would not be achieving uniformity, because it would be taxing different categories
of property at unacceptably different levels. See JX 61 at 3; JX 7 at 18–19.
i. Cross-Category Uniformity In Sussex County
To assess cross-category uniformity in Sussex County, Almy compared the sales
ratios for residential property, business property, and vacant land with the overall sales
ratio for the county. The overall sales ratio for Sussex County was 0.1687. The residential
sales ratio was 0.1622, a figure 3.85% less than the county-wide ratio. The business sales
ratio was 0.1307, a figure 22.53% less than the county-wide ratio. The vacant land sales
ratio was 0.0299, a figure 82.28% less than the county-wide ratio. Almy opined that based
on these competing ratios, Sussex County fails to value different categories of property in
a uniform manner. See JX 61 at 20. For tax purposes, the differential for residential property
falls within levels that the IAAO views as acceptable, but business property is undervalued
and vacant land is significantly undervalued. See id. at 18. Relative to owners of residential
property, owners of business property pay less than their fair share, and owners of vacant
land pay far less than their fair share.
ii. Cross-Category Uniformity In Kent County
To assess cross-category uniformity in Kent County, Almy compared the sales
ratios for residential property, business property, and vacant land with the overall sales
53 ratio for the county. The overall sales ratio for Kent County was 0.3440. The residential
sales ratio was 0.3535, a figure 2.76% greater than the county-wide ratio. The business
sales ratio was 0.3370, a figure 2.03% less than the county-wide ratio. The vacant land
sales ratio was 0.1813, a figure 47.30% less than the county-wide ratio. Almy opined that
based on these competing ratios, Kent County fails to value different categories of property
in a uniform manner. See Id. at 20. The differential between residential property and
commercial property falls within levels that the IAAO views as acceptable, meaning that
as between those two categories, property valuations are relatively uniform. Vacant land,
however, is significantly undervalued. See id. at 13. Relative to owners of residential
property and business property, owners of vacant land pay far less than their fair share.
iii. Cross-Category Uniformity In New Castle County
To assess cross-category uniformity in New Castle County, Almy compared the
sales ratios for residential property and commercial property with the overall sales ratio for
the county. Because Almy’s formula for calculating ratios for commercial property
contained an error, his comparisons were flawed and could not be used.
Almy separately examined the cross-category uniformity of residential property in
the City of Wilmington with the county as a whole. The county-wide median ratio for
residential property was 0.3038. The median sales ratio for the City was 0.3242, a figure
6.71% greater than the county-wide ratio and outside the range that the IAAO regards as
acceptable. Almy opined that as between the City and the county as a whole, New Castle
County is not valuing different categories of property in a uniform manner. See Almy Tr.
54 152; JX 61 at 20. Relative to owners of residential property in the county as a whole,
owners of residential property in the City pay more than their fair share.
c. Price-Related Uniformity
To examine price-related uniformity, professional assessors use two measures: (i)
the coefficient of price-related bias and (ii) the price-related differential. The coefficient of
price-related bias is derived by conducting a regression of the percentage differences in
assessed values against a measure of value that equally weights assessed values and sales
prices. If the coefficient is not statistically significant, then the analysis does not indicate
any bias. If the coefficient is significant and exceeds plus or minus 0.05, then the regression
indicates bias. A coefficient outside a range of -0.10 to 0.10 indicates an unacceptable level
of price-related bias. See Almy Tr. 140–42; JX 7 at 19, 29; JX 61 at 4.
The price-related differential divides the mean sales ratio for a group of properties
by the weighted mean ratio for the same group of properties. In an ideally uniform
jurisdiction, the ratios would be the same, so the result would equal 1.0. A price-related
differential that exceeds 1.0 indicates that higher-value properties are taxed at a lower
percentage of fair market value than lower-value properties, signaling a regressive system.
A price-related differential that is less than 1.0 indicates that higher-value properties are
taxed at a higher percentage of fair market value than lower-value properties, signaling a
progressive system. Under the IAAO standards, the price-related differential for a
jurisdiction should not be less than 0.98 or greater than 1.03. See Almy Tr. 141–42; JX 7
at 14, 19, 29, 36; JX 61 at 4
55 Almy calculated price-related differentials but provided them for “information
purposes only.” JX 61 at 3. He did not offer any opinions on price-related differentials.
Almy Tr. 191. He also testified on cross-examination that his analysis of price-related
uniformity only related to whether a tax system was progressive or regressive, which he
regarded as a different inquiry than whether the level of assessments fell within an
acceptable range or whether the system was sufficiently uniform. See Almy Tr. 306. For
purposes of Delaware law, however, a system that is overly regressive or overly
progressive would not comply with the Uniformity Clause, because similarly situated
taxpayers would not be treated similarly.
i. Price-Related Uniformity In Sussex County
To examine price-related uniformity in Sussex County, Almy calculated county-
wide coefficients of price-related bias for residential property, commercial property, vacant
land, and mobile homes. For residential property, Almy reported a statistically significant
coefficient of price-related bias of -0.133, which indicates that with each doubling of fair
market value, the level of assessed value of a residential property decreases by 13.3%. See
JX 61 at 16. For commercial property, Almy reported a statistically significant coefficient
of price-related bias of -0.054, which indicates that with each doubling of fair market value,
the assessed value of a commercial property decreases by 5.4%. See id. at 17. For vacant
land in Sussex County, Almy reported a statistically significant coefficient of price-related
bias of -0.134, which indicates that with each doubling of fair market value, the assessed
value of a vacant land decreases by 13.4%. See id. at 17. For mobile homes in Sussex
County, Almy reported a statistically significant coefficient of price-related bias of -0.149,
56 which indicates that with each doubling of fair market value, the assessed value of a mobile
home decreases by 14.9%. See id. at 18. In each case, the coefficients imply that the system
of tax assessments in Sussex County is unacceptably regressive, resulting in owners of
lower-value properties paying more than their fair share of property taxes. See generally
JX 7 at 19.
For informational purposes, Almy reported the price-related differentials for each
school district located in Sussex County and for the county as a whole. He again examined
residential property, commercial property, vacant land, and mobile homes. The following
chart presents the results:
Jurisdiction PRD for PRD for PRD for PRD for Residential Commercial Vacant Land Mobile Homes Property Property Indian River 1.178 1.377 1.631 1.098 Laurel 1.097 1.043 1.686 1.091 Seaford 1.023 1.546 1.719 1.043 Milford 1.020 1.415 2.136 1.046 Woodbridge 1.103 1.429 1.834 1.070 Cape Henlopen 1.208 1.060 1.536 1.295 Delmar 1.144 0.802 2.036 1.050 Countywide 1.203 1.329 1.652 1.135 IAAO Range 0.980 to 1.030 0.980 to 1.030 0.980 to 1.030 0.980 to 1.030
For the county as a whole, the price-related differentials for every category of property
exceeded the maximum deemed acceptable by the IAAO. In each case, the price-related
differentials were greater than one, indicating a non-uniform system in which higher-value
properties are assessed at a lower percentage of fair market value than lower-value
properties. Under this regressive system, owners of lower-value properties bear a greater
relative share of the tax burden.
57 Within specific school districts, only Seaford and Milford had price-related
differentials for residential property that fell within the acceptable range. All others fell
outside the maximum range.
With one exception (commercial property in Delmar), all of the price-related
differentials exceeded one, indicating that higher-value properties are assessed at a lower
percentage of fair market value than lower-value properties. Under this regressive system,
owners of lower-value properties bear a greater relative share of the tax burden.
ii. Price-Related Uniformity In Kent County
To examine price-related uniformity in Kent County, Almy calculated county-wide
coefficients of price-related bias for residential property, commercial property, and vacant
land. For residential property, Almy reported a statistically significant coefficient of 0.033,
which indicated that with each doubling of fair market value, the assessed value of a
property increased by 3.3%. This result indicates that the overall system of tax assessment
for residential property in Kent County is progressive and results in owners of higher-value
properties bearing a relatively greater share of the tax burden. See JX 61 at 11. The
coefficient for commercial property was not statistically significant. Almy reported a
statistically significant coefficient for vacant land of -0.098, which indicated that with each
doubling of fair market value, the assessed value of a property decreased by 9.8%. This
result indicates that the overall system of tax assessment for vacant land in Kent County is
regressive and results in owners of higher-value properties bearing a relatively lower share
of the tax burden. See id. at 12.
58 For informational purposes, Almy reported the price-related differentials for each
school district located in Kent County and for the county as a whole. He again examined
residential property, commercial property, and vacant land. The following chart presents
the results:
Jurisdiction PRD for Residential PRD for Commercial PRD for Vacant Property Property Land Caesar Rodney 1.009 0.959 1.164 Capital 1.037 1.168 1.335 Lake Forest 1.020 1.273 1.179 Milford 1.035 1.255 1.209 Smyrna 1.000 1.623 1.092 Woodbridge NA16 NA17 1.173 Countywide 1.019 1.211 1.208 IAAO Range 0.980 to 1.030 0.980 to 1.030 0.980 to 1.030
For the county as a whole, the price-related differentials for commercial property
and vacant land exceeded the maximum acceptable range. The price-related differential for
residential property fell within the acceptable range.
Except for Smyrna, the price-related differentials for residential property in specific
school districts were all greater than one, indicating that higher-value properties are taxed
at a lower percentage of fair market value and resulting in a regressive system. In the Caesar
Rodney and Lake Forest school districts, the extent of the mispricing fell within the
16 Woodbridge School District did not have a sufficiently large sample of residential sales in Kent County to produce reliable results. Id. at 11. 17 Woodbridge School District did not have a sufficiently large sample of commercial sales in Kent County to produce reliable results. Id. at 11–12.
59 acceptable range. For Smyrna, there was no mispricing. For the other districts, the price-
related differentials for residential property show price-related bias.
Except for Caesar Rodney, the price-related differentials for commercial property
were all greater than one, indicating that higher-value properties are taxed at a lower
percentage of fair market value and resulting in a regressive system. In Caesar Rodney, the
price-related differential was less than one, indicating that higher-value properties are taxed
at a higher percentage of fair market value and resulting in a progressive system. All of the
values fell outside the acceptable range, indicating price-related basis.
For vacant land, all of the price-related differentials fell outside the acceptable
range. All were greater than one, indicating an unacceptable level of regressive, price-
related bias.
iii. Price-Related Uniformity In New Castle County
To examine price-related uniformity in New Castle County, Almy calculated a
statistically significant coefficient of price-related bias for residential property of -0.252.
The coefficient indicates that with each doubling of fair market value, the assessed value
of a property decreases by 25.2%. This indicates that the overall system of tax assessments
in New Castle County is regressive and results in owners of higher-value properties bearing
a relatively lower share of the tax burden. See id. at 14.
For informational purposes, Almy reported price-related differentials for each
school district in the county, for the City of Wilmington, for the county excluding the City,
and for the county as a whole. He examined both residential and commercial property, but
because of the error in his formula for generating ratios for commercial property, the results
60 for commercial property could not be used. The following chart presents the results for
residential property:
Jurisdiction PRD for Residential Property Brandywine 1.163 Red Clay 1.124 Christina 1.121 Colonial 1.121 Appoquinimink 1.081 Smyrna 1.196 Wilmington 1.181 County ex. Wilmington 1.099 Countywide 1.132 IAAO Range 0.980 to 1.030
All of the price-related differentials exceed the maximum deemed acceptable by the IAAO.
2. The Factual Record On Uniformity
The factual record on uniformity its more limited than the factual record on the level
of assessment, but it nevertheless corroborates Almy’s analysis and supports a finding of
non-uniformity. The factual evidence at trial demonstrated, and the counties did not
dispute, that (i) property values have changed dramatically since the counties conducted
their last general assessments, and (ii) property values have not appreciated at uniform rates
within each county. See PTO ¶¶ 17, 58, 77, 79; JX 6; JX 71; JX 72. The operation of these
trends over the intervening decades since the counties established their base-year
valuations has resulted in assessed values that are disparate and non-uniform within the
counties. Similar properties are not valued similarly, and owners of similar properties do
not pay similar rates of taxation. See PTO ¶¶ 80–81.
County officials implicitly recognized the lack of uniformity by testifying about the
need for a general reassessment. A Kent County official admitted that the county should 61 conduct a general reassessment “for equity purposes.” Id. ¶ 84 (internal quotation marks
omitted). A New Castle County official admitted that the county should conduct a general
reassessment “so that the application of real estate taxes across the county would be
equitable.” Id. ¶ 61 (internal quotation marks omitted). He further agreed that the divergent
levels of assessment have become “an issue of credibility that we are applying things in
such a way that you can have predictable results.” Gregor Dep. 77.
The 2008 Reassessment Committee observed that “[n]ot conforming to [assessment
standards] creates many equity issues throughout the State and could potentially be a
violation of the Uniformity Clause under Article VIII, § 1 of the Delaware Constitution.”
JX 3 at 6. The committee noted that “[m]any properties that were given the same valuation
in the last assessment have substantially different market values today.” Id. Because of the
lack of uniformity, the 2008 Reassessment Committee recommended that the State “take
on the role of implementing a comprehensive statewide reassessment of all property” and
called for “[a]ll properties [to] be assessed at 100% of market value with annual
revaluations.” Id. at 4. The committee observed that a statewide reassessment would
“restore the integrity and equity to the property tax base,” thus recognizing that the
assessments as they existed in 2008 lacked integrity and were not equitable. Id. at 12. The
evidence at trial demonstrates that since then, the situation has only gotten worse. See JX
84 at 6.
62 3. The Court’s Findings On Uniformity
The plaintiffs proved by a preponderance of the evidence that the counties violate
the Uniformity Clause by persistently using valuations from 1974, 1983, and 1987. Both
the expert analysis and the factual evidence support this finding.
Almy’s expert analysis demonstrates a pervasive lack of uniformity. It can be said
with some irony that the counties’ assessments are uniformly non-uniform. Not only are
the assessments themselves non-uniform across each of the critical dimensions, but the
levels of non-uniformity vary, with certain types of property, in certain districts or counties,
and for particular dimensions exhibiting non-uniformity to more extreme degrees.
Almy’s analysis admittedly identifies isolated instances of uniformity for certain
types of property in particular districts, and there are also specific categories of property
where Almy’s analysis would not support a finding of non-uniformity in isolation. In
Sussex County, the assessments for mobile homes in two school districts exhibit an
acceptable degree of within-category uniformity, and the level of assessment for residential
property exhibits cross-category uniformity with the level of assessment for the county as
a whole. Otherwise, Sussex County’s assessments are unacceptably non-uniform across all
three dimensions of uniformity, for the county and in each school district, and for all types
of property. In Kent County, the levels of assessments for residential and commercial
property exhibit cross-category uniformity as between themselves, and the coefficient of
price-related bias for commercial property was not statistically significant. Otherwise, Kent
County’s assessment are unacceptably non-uniform across all three dimensions of
uniformity, for the county and in each school district, and for all types of property. In New
63 Castle County, because of the error in his formula, Almy’s analysis does not support
findings of non-uniformity as to commercial property, not is it possible to evaluate cross-
category uniformity between commercial and residential property. New Castle County’s
assessments of residential property fail to meet the standards for within-category
uniformity and price-related uniformity, and the assessments fail to meet the standard for
cross-category uniformity when the assessments for properties in the City of Wilmington
are compared with the assessments for properties in the rest of New Castle County.
On the whole, Almy’s analysis demonstrates that the counties are operating
unconstitutionally non-uniform systems of taxation. The factual evidence points to the
same conclusion.
In response, the counties argue that they comply with the Uniformity Clause because
they uniformly use the same stale base-year valuations for all properties, and each property
owner pays taxes at the same nominal rate. As Almy explained, “The true test of uniformity
is whether effective property tax rates (taxes as a percentage of market value) are
reasonably uniform. . . . Consistent application of outdated valuation tables, when based
on decades-old evidence, such as construction costs, sales, or net incomes, has no probative
force.” JX 61 at 1.
The counties persist in applying decades-stale assessments, creating an appearance
of uniformity. Because present fair market values have diverged from the assessments to
such a degree as to make the assessments arbitrary, property owners who pay the same
nominal rates in reality pay quite different effective tax rates. The appearance of uniformity
64 is an illusion. The counties’ nominally uniform use of the indefinite-base-year method
treats similar taxpayers differently.
As with their showing for purposes of the True Value Statute, the plaintiffs
introduced persuasive evidence of systemic problems with the counties’ indefinite-base-
year methods of tax assessment. Those problems are so pervasive as to render the counties’
systems of tax assessment unconstitutional.
C. New Castle County’s Compliance With The Same Rate Statute
The City of Wilmington contends that New Castle County fails to comply with the
Same Rate Statute. This statute states that “[r]eal property, all of which shall be taxed at
the same rate, shall consist of the following: (1) Land; (2) Buildings; (3) Improvements;
(4) Special Betterments.” 9 Del. C. § 8101(b). The City contends that the Same Rate Statute
mandates more than just the same nominal rate of taxation. The City argues that it requires
the same or substantially similar effective rates of taxation.
When interpreted against the backdrop of the Uniformity Clause and the True Value
Statute, the plain language of the Same Rate Statute cannot be read to address effective
rates of taxation. The plain language of the Same Rate Statute seeks to achieve cross-
category uniformity among the four identified categories by requiring that the same
nominal tax rate be used for each category. If New Castle County also complied with the
True Value Statute, then the combination of the two statutes would result in uniform
effective rates of taxation. New Castle County’s system of assessments has become non-
uniform and currently violates the Uniformity Clause because the county has failed to
comply with the True Value Statute, not the Same-Rate Statute.
65 A fair and equitable system of taxation must necessarily take into account effective
rates of taxation. If the Same Rate Statute were the only tax provision on the books, then
perhaps it could be construed broadly to encompass effective tax rates. When read in
conjunction with the Uniformity Clause and the True Value Statute, the Same Rate Statute
only addresses nominal tax rates.
The City of Wilmington has not shown that New Castle County fails to apply the
same nominal tax rates to all four categories of real property. Judgment will be entered in
favor of New Castle County on this aspect of the City’s claims.
D. New Castle County’s Compliance With The Assessment Roll Statutes
The City of Wilmington contends that New Castle County violates the Assessment
Roll Statutes. These statutes authorize any municipality in the state to “elect to use the
assessments and supplementary assessments for property in the municipality as established
annually or quarterly by the [county] in which such municipality is located, subject to
statutory judicial appeals, as the assessment roll of such municipality for municipal
taxation.” 22 Del. C. § 1101. The City has adopted an ordinance electing to use the
assessments established by New Castle County. See JX 8.
Once a municipality has elected to use county assessments for municipal tax
purposes, it “shall be entitled to receive a copy of the county assessments for the properties
in the municipality . . . .” 22 Del. C. § 1103. Under the Assessment Roll Statutes, the
pertinent county officials “shall certify the total assessed valuation for properties in the
municipality to each municipality . . . .” Id. § 1104.
66 The City of Wilmington proved at trial that New Castle County’s use of the
indefinite-base-year method results in inaccurate assessment rolls and an inaccurate
certification of total value. The sources of these inaccuracies are New Castle County’s
failure to comply with the True Value Statute and the Uniformity Clause, which this
decision has already addressed. By failing to provide the City with accurate assessment
rolls and an accurate certification of total value, New Castle County violates its statutory
obligations under the Assessment Roll Statutes and deprives the City of its right to elect to
use New Castle County’s assessment rolls and certification.
1. The City Of Wilmington’s Right To Use The New Castle County Assessment Roll
New Castle County maintains that the Assessment Roll Statutes do not grant the
City of Wilmington a “right” to use the county’s assessment roll. To support this position,
New Castle County cites Section 1101, which uses the words “may . . . elect,” and points
out that the “may” is permissive. See Dkt. 223 at 78 & n.280 (quoting 22 Del. C. § 1101).
The statute is permissive in the sense that it permits a municipality to decide whether to
use the county’s assessment roll. Section 1101 thus does not require the City to use New
Castle County’s assessment roll, and New Castle County could not force the City to use its
assessment roll.18
18 See id. at 78 & n.281 (citing Senior Tour Players 207 Mgmt. Co. LLC v. Golftown 207 Hldg. Co. LLC, 853 A.2d 124, 127 n.5 (Del. Ch. 2004) (explaining that 6 Del. C. § 18- 108, which states that “a limited liability company may, and shall have the power to, indemnify and hold harmless any member or manager . . . ,” is permissive and does not create a per se right to indemnification); then citing Reynolds v. City & Cty. of S.F., 125 Cal. Rptr. 673, 673 (Cal. Ct. App. 1976) (explaining that statute providing that money other 67 Once a municipality exercises its right to use a county’s assessment roll, then the
county must comply with its statutory obligations. The plain language of the Assessment
Roll Statutes grants municipalities in Delaware the right to elect “to use” the county’s
assessment roll. 22 Del. C. § 1101. By granting municipalities this right, the General
Assembly relieved municipalities (and, indirectly, municipal taxpayers) of the duplicative
costs associated with performing and defending assessments. See 57 Del. Laws ch. 278
(1969) (adopting “AN ACT TO PERMIT MUNICIPALITIES TO ADOPT COUNTY
ASSESSMENTS FOR PURPOSES OF MUNICIPAL TAXATION AND PROVIDING FOR
THE IMPLEMENTATION THEREOF”).
The City of Wilmington has exercised its right to use New Castle County’s
assessment roll. At this point, New Castle County is depriving the City of its statutory right
to rely on the county’s assessment roll by persisting in using valuations from 1983.
2. The Proper Defendant For A Violation Of The Assessment Roll Statutes
To dodge its statutory obligations, New Castle County points out that under Section
1104, the Board of Assessment Review is obligated to “certify the total assessed valuation
for properties in the municipality to each municipality.” Dkt. 223 at 79 (citing 22 Del. C.
than taxes “may” be returned was permissive and did not create right of recovery); then citing State ex rel. Scherer v. Madison Cty. Comm’rs, 527 N.W.2d 615, 620 (Neb. 1995) (explaining that statute providing that county board “may” remove snow from certain streets did not impose duty to do so); and then citing Affrunti v. Zwirn, 892 F. Supp. 451, 459–60 (E.D.N.Y. 1995) (explaining that statute providing that members of town zoning board “may” be compensated did not create a right to compensation), aff’d, 100 F.3d 943 (2d Cir. 1996)).
68 § 1104). New Castle County points out that the City has failed to sue the members of the
Board, concluding that the City’s claim must fail.
The steps in the process by which New Castle County generates its assessment roll
demonstrate that the county and its employees dominate the process. Each year, the Office
of Finance prepares the tax assessment roll. PTO ¶ 43; see 9 Del. C. § 1322(a). Each year,
the Office of Finance must certify to the Chief Financial Officer that the assessments are
correct. See 9 Del. C. § 1322(b). Each year, the Chief Financial Officer must “‘certify to
the County Council the total value of all property in the County and the total value of all
property which has been assessed and is subject to taxation.’” PTO ¶ 45 (quoting 9 Del. C.
§ 1322(b)). The Chief Financial Officer is ultimately responsible for ensuring that New
Castle County’s tax assessments comply with Delaware law. Id. ¶ 42; see 9 Del. C. §
1322(b).
The role of the Board of Assessment Review in this process is important but limited:
it reviews and approves the roll and the methods that the Director of Finance uses to
establish the assessments. See 9 Del. C. § 1318. When the Board certifies the assessments,
it implicitly relies on New Castle County’s work, and it effectively passes on New Castle
County’s numbers.
The primary actor for purposes of the Assessment Roll Statutes and throughout the
process of property tax assessment is thus New Castle County. The City of Wilmington
has properly sought relief from New Castle County to fix the problems that the county has
created under the Assessment Roll Statutes by using its indefinite-base-year method of
valuation.
69 3. Unclean Hands
In one short paragraph, New Castle County argues that “the City has ignored its own
obligation to assist [New Castle County] in tax appeals regarding City property, even when
asked to do so, and is routinely derelict in providing permit information to [New Castle
County] necessary to increase the assessed value of properties in the City.” Dkt. 223 at 74
(footnotes omitted). According to New Castle County, “[t]he City seeks absolution from
this Court for its complicity in the alleged problems with its property assessments.” Id.
New Castle County later reiterates this point, asserting that if its assessments are unlawful,
then “the City has been knowingly taxing its own residents in an unconstitutional manner
for years by using [New Castle County’s] assessment.” Id. at 79. According to New Castle
County, the City’s claim under the Assessment Roll Statutes should therefore “be
dismissed under the doctrine of unclean hands.” Id. at 80.
Conceptually, New Castle County is wrong. The City of Wilmington is not seeking
absolution for any past complicity involving property assessments. The City is only seeking
prospective relief. It wants the system to work going forward. If the City were seeking to
recover damages from New Castle County for problems with past assessments, then New
Castle County’s argument would have more force. In a suit for prospective relief, however,
the equities favor the City. “Wisdom too often never comes, and so one ought not to reject
it merely because it comes late.” Henslee v. Union Planters Nat. Bank & Trust Co., 335
U.S. 595, 600 (1949) (Frankfurter, J., dissenting).
Doctrinally, this case does not warrant application of the doctrine of unclean hands.
Before the doctrine will apply, the improper conduct must “relate directly to the underlying
70 litigation” in the sense of having an “‘immediate and necessary’” relation to the claim for
which relief is sought. Nakahara v. NS 1991 Am. Tr., 718 A.2d 518, 522 (Del. Ch. 1998)
(quoting Kousi v. Sugahara, 1991 WL 248408, at *2 (Del. Ch. Nov. 21, 1991)). The City
of Wilmington’s claims in this case turn on New Castle County’s indefinite-base-year
methodology. The City was not involved in setting that methodology, nor in using it to
conduct property assessments. The City’s past reliance on New Castle County’s
assessments does not have an immediate or necessary connection to the gravamen of the
claim on which the City seeks relief.
Nor does the public policy that undergirds the doctrine apply on these facts.
The unclean hands doctrine is aimed at providing courts of equity with a shield from the potentially entangling misdeeds of the litigants in any given case. The Court invokes the doctrine when faced with a litigant whose acts threaten to tarnish the Court’s good name. In effect, the Court refuses to consider requests for equitable relief in circumstances where the litigant’s own acts offend the very sense of equity to which he appeals.
Id. The City of Wilmington has not taken any action that would “tarnish the Court’s good
name.” Rather than shielding the court, applying the doctrine in this case would shield New
Castle County from its obligation to comply with the Uniformity Clause and the True Value
Statute, which in turn results in New Castle County failing to fulfill its obligations under
the Assessment Roll Statutes.
E. The Counties’ Evidentiary Objection To Almy’s Analysis
In an effort to short circuit the plaintiffs’ case, the counties contend that Almy’s
analysis is so unreliable as to be inadmissible under Delaware Rule of Evidence 702. In
support of this argument, the counties cite three ways in which Almy departed from the
71 IAAO standards: (i) his report did not recite the confidence intervals for his median sales
ratios, coefficients of dispersion, and coefficients of price-related bias; (ii) he did not use
time-adjusted sales data or investigate whether a major economic shock occurred during
his sales-price window, and (iii) he used procedures to clean and screen his data, then used
techniques to reduce the effect of outliers, rather than validating every sale on which he
relied. These objections do not fatally undermine Almy’s analysis. The plaintiffs proved
by a preponderance of the evidence that Almy’s analysis was reliable and admissible. Even
after giving weight to the counties’ concerns, the court finds Almy’s analysis persuasive.
1. The Standards For Admissibility Under Rule 702
Under Delaware Rule of Evidence 702, an expert witness may testify in the form of
an opinion or otherwise if:
(a) The expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) The testimony is based on sufficient facts or data;
(c) The testimony is the product of reliable principles and methods; and
(d) The expert has reliably applied the principles and methods to the facts of the case.
D.R.E. 702. Delaware Rule of Evidence 702 is identical to Federal Rule of Evidence 702,
and the Delaware Supreme Court has endorsed the interpretations given to Rule 702 by the
Supreme Court of the United States in Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999),
and Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). M.G. Bancorp.,
72 Inc. v. Le Beau, 737 A.2d 513, 522 (Del. 1999); accord Bowen v. E.I. DuPont de Nemours
& Co., 906 A.2d 787, 794 (Del. 2006).
2. The Court’s Gatekeeper Obligation
Under Rule 702, the trial judge has a “special obligation” to act as a “gatekeep[er]”
to ensure that expert testimony “is not only relevant, but reliable.” M.G. Bancorp., 737
A.2d at 522 (internal quotation marks omitted). The special gatekeeper obligation
predominantly operates in cases that will be tried before a jury, where the judge acts as
gatekeeper to ensure that “unreliable expert testimony does not carry too much weight with
the jury.” United States v. Ozuna, 561 F.3d 728, 737 (7th Cir. 2009); accord In re Salem,
465 F.3d 767, 777 (7th Cir. 2006). “[T]here is less of a basis to use [the rule] to exclude
testimony entirely in a bench trial because the judge can consider any shortcomings in the
expert’s testimony that are drawn out through cross-examination.” Beard Research, Inc. v.
Kates, 8 A.3d 573, 593 n.122 (Del. Ch.), aff’d sub nom. ASDI, Inc. v. Beard Research, Inc.,
11 A.3d 749 (Del. 2010); accord Cornell Glasgow, LLC v. La Grange Props., LLC, 2012
WL 6840625, at *21 n.237 (Del. Super. Dec. 7, 2012).
When making a gatekeeping assessment of reliability, the trial judge is primarily
concerned with the “principles and methodology” used by the expert and whether they have
“a reliable basis in the knowledge and experience of the relevant discipline.” Bowen, 906
A.2d at 794 (internal quotation marks and alterations omitted). The trial judge therefore
considers
(1) whether a theory or technique has been tested;
(2) whether it has been subjected to peer review and publication;
73 (3) whether a technique had a high known or potential rate of error and whether there are standards controlling its operation; and
(4) whether the theory or technique enjoys general acceptance within a relevant scientific community.
Bowen, 906 A.2d at 794 (citing Daubert, 509 U.S. at 590–94). “[A]n expert’s methodology
must be not only reliable intrinsically but also be reliably applied to the facts of the specific
case . . . .” Gen. Motors Corp. v. Grenier, 981 A.2d 524, 529 (Del. 2009). “The party
seeking to introduce the expert testimony bears the burden of establishing its admissibility
by a preponderance of the evidence.” Bowen, 906 A.2d at 795.
There is no meaningful basis to dispute that the “principles and methodology” that
Almy applied had “a reliable basis” in his discipline. Almy grounded his opinions and
analysis on a sales ratio study, which the parties agree is a generally accepted method of
analysis that is widely used to determine the extent to which assessments diverge from fair
market value and to evaluate the uniformity and fairness of systems of taxation. See PTO
¶¶ 89–90. As a general matter, no one disputes this point, and provisions in the Delaware
Code specifically call for the use of sales ratio studies.19
19 The process of allocating Equalization Funding involves the use of a sales ratio study. See 14 Del. C. § 1707(b)(11). In making its recommendations for 2017, 2018, and 2019, the Equalization Committee examined sales ratio studies that used methodologies broadly consistent with Almy’s approach and which identified prevailing sales ratios broadly consistent with Almy’s findings. See Almy Tr. 157; JX 9 at 10, 13–14, 16; JX 13 at 9, 12–13, 15; JX 21 at 9, 12–13, 15; see also JX 84. The Delaware Code also calls for using a sales ratio study when a school district crosses county lines, making it necessary for the school district to true up the differences between levels of assessments in the counties so that properties are taxed uniformly. See 14 Del. C. § 1913(b).
74 What the counties really dispute are not the overarching principles on which Almy
relied or the basic methodology that he employed, but rather the specific details of how he
applied those principles and methods in the current case. Objections of this type “go to the
weight of the evidence, not to its admissibility.” Campbell ex rel. Campbell v. Metro. Prop.
& Cas. Ins. Co., 239 F.3d 179, 186 (2d Cir. 2001).
3. Almy’s Ability To Make Judgments Under The IAAO Standards
Under the IAAO standards, Almy had the ability and obligation as an assessor to
make judgments about whether to comply strictly with the standards or to make case-
specific adjustments. Almy was uniquely situated to make judgments about whether to
depart from the IAAO’s standards, because he helped draft them, then played a major role
in keeping them updated and determining how they should be applied. See Almy Tr. 126–
28, 130, 131–32.
The IAAO standards make clear that an assessor must make judgments. The
standards explain that “[t]he first step in any ratio study is to determine and state clearly
the reason for the study,” which “determines the specific goals, scope, content, depth and
required flexibility.” JX 7 at 8. In designing the study, “the assessor must consider the
quantity of sale data and the resources available for conducting the ratio study. Although
absolute accuracy cannot be ensured, all reasonable, cost-effective steps should be taken
to maximize reliability.” Id. The IAAO standards require only that “[t]he findings of a ratio
study should be sufficiently detailed and documented to meet the needs of the users of the
study.” Id. at 16.
In this case, the purpose of the study was twofold. Its first purpose was to determine
75 the extent to which the counties’ persistent use of valuations from 1974, 1983, and 1987
results in assessments that depart from present fair market value. Its second purpose was
to determine whether continuing to use those valuations despite changes in property values
since 1974, 1983, and 1987 results in a non-uniform system of taxation. See JX 61 at 1.
Almy appropriately evaluated the extent of the analysis that he needed to conduct to
address these issues. Both issues notably involve price changes of great magnitude and
massive deviations from the ranges of value deemed acceptable by the IAAO. Almy was
not charged with assessing the effect of a far shorter time period or smaller degree of
variation, where more detailed investigation and finer-grained analysis might have been
warranted. Almy properly chose to depart in minor instances from the IAAO standards
given the reasons for his study.
When choosing to depart from the IAAO standards, Almy also took into account
that he was acting as a litigation expert, and the IAAO standards were not drafted for
litigation experts. They were intended for two categories of users: (i) local assessment
districts evaluating their own taxation practices, and (ii) state supervisory and equalization
agencies that oversee local assessment districts. Almy Tr. 136; see JX 7 at 7. The standards
thus anticipate the existence of a client that will (i) possess and furnish the analyst with
more extensive data than Almy received and (ii) help the analyst interpret the data. If the
counties had hired Almy to evaluate their tax systems, as Kent County and New Castle
County previously did in 1993 and 1994, then they doubtless would have furnished Almy
with additional data, responded to his questions, and helped him analyze it. Instead, the
plaintiffs had to obtain the data from the counties through discovery, and Almy had to
76 screen it, clean it, and analyze it on his own. Then, after reviewing Almy’s report and the
supporting information, the counties informed the plaintiffs that they would not be
deposing Almy, nor would they be presenting an opposing expert. As a result, they did not
raise certain easily correctable issues with Almy until trial, when it was too late for Almy
to fix them.
As a general matter, Almy acted reasonably when departing from the IAAO
standards. The counties’ three specific objections to Almy’s work do not alter the overall
picture of thoughtfulness, conscientiousness, and reliability. Evidencing the reasonable and
non-controversial nature of Almy’s decisions, Professor Ratledge made similar decisions
when preparing the 2017 Division III Study. See JX 84 at 8–14.
4. The Confidence Intervals
In their principal evidentiary argument, the counties contend that Almy’s report is
so unreliable as to be inadmissible under Rule 702 because the report did not identify the
confidence intervals surrounding Almy’s measures of central tendency. In making this
argument, the counties rely on an IAAO standard which instructs that a sales ratio study
“should” include the “confidence interval (measures of reliability) about the measures of
central tendency.” JX 7 at 16–17. Elsewhere, the IAAO standards explain the role of the
confidence interval as follows:
While the theoretically desired level of appraisal is 1.00, an appraisal level between 0.90 and 1.10 is considered acceptable for any class of property. However, each class of property must be within 5 percent of the overall level of appraisal of the jurisdiction . . . . Both criteria must be met. By themselves, the calculated measures of central tendency provide only an indication, not proof, of whether the level meets the appropriate goal. Confidence intervals and statistical tests should be used to determine whether it can be reasonably
77 concluded that appraisal level differs from the established goal in a particular instance. Additionally, when uniformity measures show considerable variation between ratios, level measurements may be less meaningful.
Id. at 17–18.
In his report, Almy stated that “[m]easures of central tendency and the coefficient
of price-related bias were computed at the 95% level of confidence.” JX 61 at 4–5. Almy
thus represented that the measurements in his report fell within the requisite range 95% of
the time. That range is the confidence interval.20 Almy’s report noted when his results were
not statistically significant. See JX 61 at 7, 11, 14, 15, 17. If there had been results that fell
outside of the confidence interval, Almy’s report would have noted them.
The counties maintain that by failing to provide a specific confidence interval for
each measurement in his report, Almy violated a bright-line requirement that renders the
report useless. The IAAO standards state that a report “should” include confidence
intervals, not that it “must” do so. The real concern with a failure to include confidence
intervals is that the lower or upper bound for a particular measurement might fall within
the acceptable ranges that the IAAO standards identify. Although Almy did not include his
20 See JX 7 at 40 (“Confidence interval. A range of values, calculated from the sample observations, that are believed, with a particular probability, to contain the true population parameter (mean, median, COD). . . . Confidence level. The degree of probability associated with a statistical test or confidence interval, commonly 90, 95 or 99 percent. For example, a 95 percent confidence interval implies that were the estimation process repeated again and again, then 95 percent of the calculated intervals would be expected to contain the true population measure (such as the median, mean, or COD).”).
78 confidence intervals in his report, he did provide them to the counties during expert
discovery. Almy Tr. 169, 174–75. The counties never identified a measurement where the
upper or lower bound was problematic. Their fastidious cross-examination of Almy
demonstrates that they would have pointed out a problematic measurement if they had been
able to do so.
Almy testified at trial that his measures of central tendency were within the required
confidence intervals. See id. at 168–69. Almy was a highly credible witness. The counties
dismiss this testimony as ipse dixit, see Dkt. 223 at 97, but that suggests they do not
understand that term. Almy grounded his testimony on his analysis and underlying data,
including the confidence intervals that he provided to the counties. Along similar lines, the
counties object to Almy’s testimony as having turned “the process of challenging an
expert’s reliability into a game of whack-a-mole . . . .” Dkt. 223 at 96. To the contrary, the
counties received Almy’s report and all of his underlying data. They chose not to depose
Almy before trial or offer an expert of their own. When the counties questioned Almy about
his confidence intervals for the first time at trial, Almy was entitled to explain how he
treated that issue. If the counties had wanted to know what Almy would say before trial,
they could and should have deposed Almy. See Project Boat Hldgs., LLC v. Bass Pro Gp.,
LLC, 2018 WL 3814930, at *2 (Del. Ch. Aug. 10, 2018) (explaining that a party “need not
provide every nuance or detail of the expert’s opinion in a pretrial disclosure (whether by
report or interrogatory response), particularly given that our rules of procedure . . . allow
for expert depositions”).
79 In any event, too much should not be made of the 95% confidence interval, at least
on the facts of this case. As Judge Posner has explained, a bright-line threshold like this is
“arbitrary” and
influenced by the fact that scholarly publishers have limited space and don’t want to clog up their journals and books with statistical findings that have a substantial probability of being a product of chance rather than of some interesting underlying relation between the variables of concern. Litigation generally is not fussy about evidence; much eyewitness and other nonquantitative evidence is subject to significant possibility of error, yet no effort is made to exclude it if it doesn’t satisfy some counterpart to the 5 percent significance test. A lower significance level may show that the correlation is spurious, but may also be a result of “noise” in the data or collinearity (correlation between independent variables . . . ); and such evidence, when corroborated by other evidence, need not be deemed worthless. Conversely, a high significance level may be a misleading artifact of the study’s design; and there is always the risk that the party’s statistical witness ran 20 regressions, one and only one of which supported the party’s position and that was the only one presented, though, in the circumstances, it was a chance result with no actual evidentiary significance. (Careful pretrial discovery by the other party should unmask this trick.)
The question whether a study is responsible and therefore admissible under the Daubert standard is different from the weight to be accorded to the significance of a particular correlation found by the study. It is for the judge to say, on the basis of the evidence of a trained statistician, whether a particular significance level, in the context of a particular study in a particular case, is too low to make the study worth the consideration of judge or jury.
Kadas v. MCI Systemhouse Corp., 255 F.3d 359, 362–63 (7th Cir. 2001). Almy had the
training and experience necessary to prepare a reliable study worthy of consideration.
Consistent with the approach that Almy took, Professor Ratledge of the University
of Delaware did not report explicit confidence intervals in the 2017 Division III Study.
Like Almy, he explained that his results fell within the 95% confidence interval and noted
those instances where they did not. See JX 84 at 7, 10.
80 Almy testified credibly about his treatment of the confidence intervals. Moreover,
his report contained persuasive analysis of the extent to which property values have
diverged from fair market value over the past three and four decades, and his analysis and
conclusions are corroborated by other evidence in the case, including the admissions of the
defendants and their witnesses. See Part II.E.7, infra. On the facts of this case, Almy’s
failure to include specific confidence intervals in his written report is not a sufficient basis
to exclude his report and testimony.
5. The Timing Of Sales Within The Observation Window
The counties also argue that Almy’s report is so unreliable as to be inadmissible
because when calculating sales ratios, Almy sometimes included sales data from multiple
years when necessary to develop a sufficient sample. For example, although he used one
year of data for sales of residential property in each county, he used five years of data for
sales of commercial property in Kent and Sussex County. See JX 61 at 11–12, 16–18. When
Almy used multiple years of sales data, he did not adjust the prices from earlier years so
that all prices were expressed in constant dollars. For example, he did not adjust the price
of a sale in 2017 so that it would be comparable in inflation-adjusted dollars to a sale in
2018. Almy also did not analyze whether there had been any significant economic shifts
during his multi-year windows that might have affected the comparability of the sales
prices. These are unpersuasive quibbles with Almy’s analysis.
In making this argument, the counties rely on the following language from the
IAAO standards: “To develop an adequate sample size, the sales used in ratio studies can
span a period of as long as five years provided there have been no significant economic
81 shifts or changes to property characteristics and sales prices have been adjusted for time as
necessary.” JX 7 at 10. The counties again treat the language of the IAAO standards as an
ironclad rule, rather than a standard that the assessor can tailor for the study in question.
The IAAO standards make clear that the latter, not the former, is the correct approach. See
id. at 8, 16. The IAAO standards also emphasize that the “value of more reliable
information must be balanced against the costs of obtaining that information.” Id. at 31.
Almy did not time-adjust sales because doing so would not have had a significant
effect on the results. As Almy explained in his report, “the interest here was in examining
assessment accuracy over several decades,” and therefore “adjusting sales prices for
changes in market conditions either within each year or since the last general reassessment
was considered neither important nor practicable . . . .” JX 61 at 10. As he testified at trial,
adjusting prices would “have been a big expenditure of resources for very little gain.” Almy
Tr. 187. Put differently, when comparing assessed values from 1974 with sales prices from
2014 through 2018, it makes little difference whether the prices are measured in 2014
dollars or 2018 dollars. Almy also testified that during the sales windows, prices generally
increased. Almy Tr. 208; see JX 6; JX 71; JX 72. If Almy had brought the prices forward
to constant 2018 dollars, it would have resulted in a higher measure of fair market value
and a greater disparity between fair market value and assessed value. Almy’s decision not
to adjust sales prices thus favored the counties.
The counties’ concern about Almy not investigating whether there was a significant
economic shift during any of his pricing windows criticizes Almy for failing to look for
something that wasn’t there. The counties have not pointed to any significant economic
82 shift that might have affected property values, and the counties certainly had the knowledge
to advance such an argument if they could have supported it. Almy was familiar with
economic trends generally, and he had access to data on pricing trends nationally, within
Delaware, and within the counties. See JX 6; JX 71; JX 72. Almy made a reasonable
judgment not to expend resources investigating further.
Consistent with the approach that Almy took, Professor Ratledge did not make time-
based adjustments to the transactions in his sales window when preparing the 2017
Division III Study. He generally described trends in property values, but like Almy, he did
not expressly state whether he looked for significant economic shifts. See JX 84 at 8–14.
6. The Validation Of Sales Prices
In their third and final argument, the counties contend that Almy’s opinions and
analyses are so unreliable as to be inadmissible because Almy did not independently verify
each sale relied on in his sales ratio study to determine whether it was conducted at arms’
length. In making this argument, the counties rely on the following statement in the IAAO
standards: “Sales must be screened to eliminate those that don’t meet the requirements of
arm’s-length, open market sales.” JX 7 at 8. Elaborating, the IAAO standards explain that
“[i]n general, a ratio study is valid to the extent that the sample is sufficiently representative
of the population.” Id. at 11. The IAAO standards further explain that “representativeness
is improved when . . . [s]ales have been appropriately screened and validated,” and this
“requirement generally is met when the sales to be used in the sample are properly
screened, adjusted if necessary, and validated.” Id.
83 During discovery, the plaintiffs obtained twelve Excel files from the counties that
contained the sales data that Almy used. Unlike in the collaborative process that the IAAO
standards contemplate, the counties did not help Almy understand the data. Almy instead
carefully assembled, screened, and cleaned his data set through a multi-phase process so
that it only included what were likely to be open-market, arms’ length sales. JX 61 at 7.
Almy’s screening process had three phases. During the first phase, Almy inspected
the data for transactions that were missing information, such as omitted property
identification numbers, assessments of zero, or sales prices of zero. Almy excluded these
transactions. Even after doing so, Almy observed that the “range in assessed values and
sales prices were extremely broad.” Id. at 8. He also observed anomalies such as “future
dates of sale and constructions years” and “large numbers of sales with the same sale price.”
Id. He therefore determined that additional screening was necessary.
During the second phase, Almy excluded transactions where the data appeared to
be unreliable, such as:
Sales prices that were too low to be plausible, such as a sale price less than $10.
Properties with implausibly high sales prices.
Properties that were exempt from taxation.
Multiple records where the same property was given different assessed values.
Multi-parcel sales where the files lacked information that would allow Almy to link up the parcels.
Properties ostensibly sold before their construction date.
New construction.
84 Construction spanning multiple years.
Properties classified as vacant with substantial non-land values.
Properties classified as residential with very large lot sizes/values.
See id. at 7–9. Even after this second level of screening, Almy continued to observe
“considerable variability” in the total assessed values and sales prices. Id. at 9. After
calculating sales ratios using the data, he also observed extreme variability in the sales
ratios. Id.
During the third phase, Almy trimmed the data for outliers by following the IAAO’s
“Outlier Trimming Guidelines.” JX 7 at 53. In substance, he divided the data set into
quartiles, then used a statistical technique to exclude roughly the upper half of the first
quartile (essentially the uppermost 12.5% of the data set) and roughly the lower half of the
fourth quartile (essentially the bottommost 12.5% of the data set). See JX 61 at 9. For New
Castle County, he separately trimmed the data sets for residential and commercial
properties. Id. at 10. Through this process, Almy eliminated the portions of his data set that
were most likely to contain unreliable outliers, while leaving a large data set that he could
use to calculate sales ratios and render opinions.
Having conducted this screening process, Almy inspected the data further to
determine what measures of central tendency would be most reliable and informative. He
calculated medians, arithmetic means, and weighted means for each county and for each
school district, then considered the advantages and disadvantages of each metric.
The median identifies the middle sales ratio when the ratios are arrayed in order of magnitude. Because it is unaffected by outliers at the ends of the array, the median
85 is generally preferred as the measure of central tendency when evaluating a system of assessments.
The arithmetic mean (or average) is the sum of the individual ratios divided by the number of ratios. The value of the arithmetic mean is strongly affected by the values of extreme ratios, making it less reliable as a measure of central tendency.
The weighted mean is (1) the sum of the assessed values divided by (2) the sum of the sales prices. The value of the weighted mean is strongly affected by the ratios of high-value properties. The value-weighting feature makes the weighted mean the preferred measure of central tendency when considering the total value of property within a district.
Because the arrays continued to have outlying results, Almy determined that the arithmetic
mean was not a reliable measure of central tendency, and he did not rely on it. For similar
reasons, he did not use the weighted mean. Almy instead decided to use the median, which
is the standard measure of central tendency used in ratio studies and further reduced the
risk of error from outliers in his data. See Almy Tr. 137–38; JX 7 at 27.
At trial, the counties questioned Almy about types of sales that the IAAO standards
recommend excluding, such as “sales regarding government agencies or public utilities,”
“transfers to financial institutions, such as deeds in lieu of foreclosure,” “intrafamily or
intracorporate transfers,” and “forced sales, such as foreclosures or tax sales.” Almy Tr.
204. Almy agreed that he had not attempted to exclude these types of transactions. Almy
also agreed that he did not retain a third party to verify the individual sales.
As with Almy’s decision on time-adjusting his sales, Almy had to make decisions
about how to generate a reliable dataset without incurring unnecessary expense. Almy
made reasonable decisions. He carefully screened the data by following a logical and
reasonable process. He opted not to screen the data further, and he testified that in his fifty-
86 year career as professional assessor, he had never retained a third party to verify individual
sales. Almy Tr. 205. Unlike the case the counties most heavily rely on, Almy’s statistics
did not lack “randomness, representative[ness] and sufficient editing” or include “obvious
errors” such as using sales from the wrong years. In re Rosewell, 478 N.E.2d 343, 347 (Ill.
1985).
If the counties had hired Almy to conduct a sales ratio study in the ordinary course
then they likely would have assisted Almy in screening his data further. They also might
have helped him verify third party sales. In the adversarial posture of litigation, Almy did
not have the benefit of the counties’ expertise. Nor did Almy or the court have the benefit
of a competing presentation by an expert hired by the counties. If the counties had retained
an expert of their own, then their expert could have screened the data further and shown
that the results would be different. But the counties did not hire an expert of their own.
Almy’s screening methods reliably narrowed the counties’ data to those transactions
that were most likely to include arms’ length sales. When preparing the 2017 Division III
Study, Professor Ratledge of the University of Delaware followed a cleaning and screening
procedure that closely resembled Almy’s. He did not explicitly screen out certain types of
transactions, nor did he validate each individual sale. See JX 84 at 8–10.
7. The Court’s Ruling On Admissibility
The plaintiffs proved by a preponderance of the evidence that Almy’s report and
analysis were sufficiently reliable to be admissible. Almy thoroughly understood the IAAO
standards, having played a leading role in preparing them. He understood the overall
purposes of the IAAO standards and could evaluate when it made sense not to adhere to
87 them strictly. Almy persuasively explained his departures from the IAAO standards. The
plaintiffs proved that Almy’s departures from the IAAO standards did not materially affect
his opinions or analyses. They instead were cost-effective methods of proving what the
counties had essentially already admitted: that their indefinite-base-year methods of
assessment do not value properties at their present fair market value and fail to produce
uniform levels of taxation. On each issue where the counties’ objected, Almy followed an
approach similar to how Professor Ratledge proceeded when preparing the 2017 Division
III Study. See id. at 8–14.
The counties raised theoretical reasons to doubt portions of Almy’s report, but those
theoretical doubts were not supported by any facts challenging Almy’s findings. The
counties could have retained their own expert, presented their own analysis, or deposed
Almy before trial. Instead, they decided to reserve their few “gotcha” points for trial.
Other sources of evidence corroborated the substance of Almy’s opinions and
analyses. Almy’s analysis and opinions were broadly consistent with the findings and
observations by the 2008 Reassessment Committee. See JX 3 at 6. Almy’s results were
broadly consistent with the assessment ratios in the 2016 Equalization Report, the 2017
Equalization Report, the 2018 Equalization Report, and the 2017 Division III Study. See
Almy Tr. 157; JX 9 at 10, 13–14, 16; JX 13 at 9, 12–13, 15; JX 21 at 9, 12–13, 15; JX 84
at 13, 36–37. Almy’s results were broadly consistent with a high-level internal assessment
of assessment ratios that New Castle County prepared in 2017. See JX 10 at 5, 17; JX 11
at 3–4; JX 12 at 10, 12. His findings matched up with admissions made by county officials
during discovery. See Gregor Dep. 77; Durham Dep. 111–12.
88 Overall, the plaintiffs proved by a preponderance of the evidence that Almy’s
opinions were sufficiently reliable to be admissible. His report and testimony is therefore
admitted.
III. STANDING
As their principal defense to the case, the counties argue that the plaintiffs lack
standing to sue. In contrast to the counties’ position on the merits, where they introduced
neither evidence nor expert testimony and advanced only a handful of arguments, the
counties’ position on standing bristles with points and counterpoints. Contrary to the
counties’ position, the plaintiffs have standing to pursue the claims they have asserted.
A. General Principles Of Standing
“The term ‘standing’ refers to the right of a party to invoke the jurisdiction of a court
to enforce a claim or to redress a grievance.” Dover Historical Soc’y v. City of Dover
Planning Comm’n, 838 A.2d 1103, 1110 (Del. 2003). The issue of standing is concerned
“only with the question of who is entitled to mount a legal challenge and not with the merits
of the subject matter of the controversy.” Stuart Kingston, Inc. v. Robinson, 596 A.2d 1378,
1382 (Del. 1991).
1. State Court Standing Versus Federal Court Standing
Federal courts have developed an extensive body of standing jurisprudence that
interprets Article III of the United States Constitution and the limitations it imposes on the
scope of federal judicial power. The Delaware Supreme Court has noted that the standards
for evaluating standing under federal law “are generally the same as the standards for
determining standing to bring a case or controversy within the courts of Delaware.” Dover
89 Historical Soc’y, 838 A.2d at 1110. The application of those standards may differ,
however, because “[u]nlike the federal courts, where standing may be subject to stated
constitutional limits, state courts apply the concept of standing as a matter of self-restraint
to avoid the rendering of advisory opinions at the behest of parties who are ‘mere
intermeddlers.’” Id. at 1111 (quoting Stuart Kingston, 596 A.2d at 1382). As the counties’
counsel noted at post-trial argument, standing doctrine in the state courts is predominantly
discretionary and prudential. Dkt. 306 at 26 (“[A]ll of standing in other Delaware law is
prudential.”); see also id. at 58 (arguing that “public importance standing . . . is prudential
standing”).
Based on the structure of our cooperative federal system, state court standing
doctrine is appropriately more flexible than federal standing doctrine, because the state
courts play a different and more expansive role than the federal courts. See generally John
Dimanno, Beyond Taxpayers’ Suits: Public Interest Standing in the States, 41 Conn. L.
Rev. 639, 658–63 (2008) (collecting authorities). State courts draw their power from the
original sovereignty of the several states as governments with plenary and unenumerated
powers. The federal courts, by contrast, can only exercise the sovereign power that the
states delegated to the United States as a limited government with enumerated powers.21
21 See, e.g., U.S. Const. amend. X; Murphy v. Nat’l Collegiate Athletic Ass’n, --- US ---, 138 S.Ct. 1461, 1475–77 (2018). See generally Randy J. Holland, State Constitutions: Purpose and Function, in The Delaware Constitution of 1897: The First One Hundred Years 3, 13–14, 16 (Randy J. Holland & Harvey Bernard Rubenstein eds. 1997) [hereinafter First One Hundred Years].
90 “State courts, of course, may impose more lenient standing requirements than federal
courts, because state courts are not bound by the federal Constitution’s ‘case or
controversy’ requirement.” Eli Savit, States Empowering Cities, 52 U. Mich. J.L. Reform
581, 605 (2019); see ASARCO Inc. v. Kadish, 490 U.S. 605, 617 (1989) (“We have
recognized often that the constraints of Article III do not apply to state courts, and
accordingly the state courts are not bound by the limitations of a case or controversy or
other federal rules of justiciability.”). “‘State courts need not become enmeshed in the
federal complexities and technicalities involving standing and are free to reject procedural
frustrations in favor of just and expeditious determination on the ultimate merits.’” Helen
Hershkoff, State Courts and the “Passive Virtues”: Rethinking the Judicial Function, 114
Harv. L. Rev. 1833, 1857 (2001) (quoting State ex rel. Ohio Acad. of Trial Lawyers v.
Sheward, 715 N.E.2d 1062, 1081-82 (Ohio 1999) (quoting 59 Am. Jur. 2d Parties § 30
(1987))).
The Delaware Constitution contains provisions that illustrate the broader expanse
of state court power. One is Article I, Section 9, which provides that “[a]ll courts shall be
open; and every person for any injury done him or her in his or her reputation, person,
movable or immovable possessions shall have remedy by the due course of law, and justice
administered according to the very right of the cause and the law of the land . . . .” Del.
Const. Art. I, § 9. This provision traces its lineage through Article I, Section 9 of the
Delaware Constitution of 1792, to Article 22 of the Delaware Declaration of Rights of
1776, and ultimately to Chapter 40 of Magna Charta. See Randy J. Holland, The Delaware
State Constitution 64–65 (2011). “Under this section, the courts have a duty to afford a
91 remedy for every substantial wrong; the volume of cases, danger of fraudulent claims, or
difficulty of proof do not eliminate this requirement.” Id. at 65; see also Maurice A.
Hartnett, III, Delaware’s Charters and Prior Constitutions, in First One Hundred Years,
supra, at 29 (“The Delaware Declaration of Rights, somewhat uniquely, provided a
‘remedy at law for any injury.’ A similar provision still remains in the Delaware
constitution.”).
Another significant provision is Article I, Section 10, which vests in the Court of
Chancery “the general equity jurisdiction of the High Court of Chancery of Great Britain
as it existed prior to the separation of the colonies” and was “intended to establish for the
benefit of the people of the state a tribunal to administer the remedies and principles of
equity.” Du Pont v. Du Pont, 85 A.2d 724, 727, 729 (Del. 1951). The power of a court of
equity to hear claims has always been and necessarily remains broad and flexible.
“Historically, equity jurisdiction has taken its shape and substance from the perceived
inadequacies of the common law and the changing demands of a developing nation.”
Schoon v. Smith, 953 A.2d 196, 204 (Del. 2008) (internal quotation marks omitted). To
administer a system of equity,
the Chancellor always has had, and always must have, a certain power and freedom of action, not possessed by the courts of law, of adapting the doctrines which he administers. He can extend those doctrines to new relations, and shape his remedies to new circumstances, if the relations and circumstances come within the principles of equity, where a court of law in analogous cases would be powerless to give any relief.
Id. at 204–05 (internal quotation marks omitted). The Court of Chancery thus “has an
expansive power, to meet new exigencies” and “to meet changing needs.” Id. at 205 n.24,
92 206 (internal quotation marks omitted). Equity will not suffer a wrong without a remedy.
See Donald J. Wolfe, Jr. & Michael A. Pittenger, Corporate and Commercial Practice in
the Delaware Court of Chancery, at v (2d ed. 2019) (listing “THE MAXIMS OF
EQUITY”).
One example of Delaware’s broader approach to standing involves its treatment of
taxpayer suits. Under Delaware law, “[e]ven absent the showing of a particularized injury,
. . . a plaintiff may have standing, as a taxpayer, to enjoin the unlawful expenditure of
public money or the misuse of public property.” Reeder v. Wagner, 2009 WL 1525945, at
*2 (Del. June 2, 2009) (TABLE). “A taxpayer has a direct interest in the proper use and
allocation of tax receipts. That interest gives the taxpayer a sufficient stake in the outcome
of the suit to allow him to challenge improper uses of tax funds.” City of Wilm. v. Lord
(Lord II), 378 A.2d 635, 637 (Del. 1977). For purposes of Delaware law, “a taxpayer does
have standing to sue to enjoin the unlawful expenditure of public money, or misuse of
public property, regardless of any showing of special damages.” Id.
Delaware’s approach to standing diverges significantly from the federal model,
where taxpayer standing is quite narrow.22 Delaware’s approach accords with other states,
where taxpayer actions “are for the most part uncontroversial.”23 The plaintiffs do not rely
22 See Flast v. Cohen, 392 U.S. 83, 102–03 (1968); Frothingham v. Mellon, decided with Massachusetts v. Mellon, 262 U.S. 447, 488–89 (1923); Hershkoff, supra, at 1853. 23 Hershkoff, supra, at 1855; accord Susan L. Parsons, Taxpayers’ Suits: Standing Barriers and Pecuniary Restraints, 59 Temple L.Q. 951, 962 (1986) (“Despite strict 93 on taxpayer standing in this case, but the doctrine demonstrates that Delaware courts can
and do apply the principles of standing more broadly than their federal counterparts,
consistent with the different nature of state-court jurisdiction and the authority granted by
the Delaware Constitution.
2. The Elements Of Standing
For a plaintiff to have standing to sue in its own right, the plaintiff must identify (i)
an injury to a legally protected interest and (ii) demonstrate that the interest they seek to
vindicate is “arguably within the zone of interest to be protected or regulated by the statute
or constitutional guarantee in question.” Gannett Co., Inc. v. State, 565 A.2d 895, 897 (Del.
1989); accord Oceanport Indus., Inc. v. Wilm. Stevedores, Inc., 636 A.2d 892, 903 (Del.
1994). The injury element is itself multi-faceted:
(1) the plaintiff must have suffered an injury in fact—an invasion of a legally protected interest which is (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—the injury has to be fairly traceable to the challenged action of the defendant and not the result of the independent action of some third party not before the court; and
(3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
Dover Historical Soc’y, 838 A.2d at 1110 (formatting altered and internal quotation marks
omitted); accord Oceanport, 636 A.2d at 904.
standing requirements at the federal level, states generally have taken an increasingly more permissive stance toward taxpayers’ actions.” (footnote omitted)).
94 In addition to these basic principles of individual standing, this case implicates other
standing doctrines. The first is the ability of a sovereign to assert claims on behalf of its
citizens by suing as parens patriae. For a government or agency to invoke this doctrine, it
must show that it possesses the necessary attributes of sovereignty and that it seeks to
protect a quasi-sovereign interest. See Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel.
Barez, 458 U.S. 592, 600–08 (1982).
The second is the ability of an organization to sue on behalf of its members, a
doctrine sometimes called associational standing. An institution can rely on associational
standing if “1) the interests to be protected by the suit are germane to the organization’s
purpose; and 2) neither the claim asserted nor the relief requested requires the participation
of individual members; and 3) the organization’s members would otherwise have
standing.” Oceanport, 636 A.2d at 902; accord Dover Historical Soc’y, 838 A.2d at 1115.
A third is policy-based or public-interest standing, which permits a suitable plaintiff
to raise constitutional and statutory issues of substantial public importance, whose impact
on the law is real, and where the ongoing violations are likely to continue and to evade
judicial review. This doctrine is only invoked rarely and in exceptional cases. See Part III.E,
infra..
The City of Wilmington asserts standing to sue in its own right to address injures it
has suffered due to New Castle County’s violations of the Assessment Roll Statutes, the
Uniformity Clause, and the True Value Statute. The City also asserts standing as parens
patriae to sue for its residents and property owners. The DEO relies on the doctrine of
associational standing. The NAACP-DE contends it has standing to sue in its own right for
95 injury to its organizational interests. All three maintain that, regardless, the court should
recognize their standing to sue because this is an exceptional case where doing so would
promote the public interest.
B. The City Of Wilmington’s Standing To Sue
The City of Wilmington asserts three claims against New Castle County that warrant
consideration for purposes of standing.
Count I of the City’s complaint asserts that New Castle County’s indefinite-base- year method of conducting property assessments violates the Uniformity Clause.
Count III of the City’s complaint asserts that New Castle County’s indefinite-base- year method of conducting property assessments violates the True Value Statute.
Count IV of the City’s complaint asserts that New Castle County’s indefinite-base- year method of conducting property assessments deprives the City of its rights under the Assessment Roll Statutes.24
New Castle County contends that the City lacks standing to assert these claims.
1. The City Of Wilmington’s Standing To Sue For Violations Of The Assessment Roll Statutes
New Castle County contends that the City of Wilmington lacks standing to sue the
county for failing to fulfill its obligations under the Assessment Roll Statutes. According
to New Castle County, the City failed to prove injury. See Dkt. 223 § II.D. The City proved
24 In Count II of its complaint, the City asserts a violation of the Same Rate Statute. Although New Castle County at times seemed to defend against this claim using the language of standing, its arguments addressed the merits of what the Same Rate Statute requires. This decision has agreed with New Castle County’s arguments on the merits. See Part II.C, supra. Because the claim failed on the merits, and because the analysis of standing is already lengthy and complex, this decision does not address the City’s standing to sue under the Same Rate Statute.
96 at trial that New Castle County’s method of assessing property for tax purposes generates
inaccurate assessments, resulting in an unreliable assessment roll and an inaccurate
certification of total assessed value. See Part I.E, supra. By depriving the City of its rights
under the Assessment Roll Statutes, New Castle County has injured the City, which
therefore has standing to sue. The City therefore also has standing to litigate why New
Castle County’s practices violate the Assessment Roll Statutes, which the City standing to
prove that New Castle County’s practices violate the Uniformity Clause and the True Value
a. The City Of Wilmington’s Injury In Fact For Purposes Of The Assessment Roll Statutes
For a plaintiff to have standing to sue in its own right, the plaintiff must have
suffered an injury in fact. As discussed previously, the Assessment Roll Statutes authorize
any municipality in the state to “elect to use the assessments and supplementary
assessments for property in the municipality as established annually or quarterly by the
[county] in which such municipality is located, subject to statutory judicial appeals, as the
assessment roll of such municipality for municipal taxation.” 22 Del. C. § 1101. Once a
municipality has elected to use county assessments for municipal tax purposes, the
municipality “shall be entitled to receive a copy of the county assessments for the
properties in the municipality . . . .” Id. § 1103. In addition, the pertinent county officials
are obligated to “certify the total assessed valuation for properties in the municipality to
each municipality . . . .” Id. § 1104.
97 By ordinance, the City of Wilmington has elected to take advantage of the
Assessment Roll Statutes and exercised its right to use the assessments established by New
Castle County. See JX 8. The City has been injured because the evidence shows that New
Castle County’s indefinite-base-year method for assessing property fails to provide the City
with accurate assessments, an accurate assessment roll, or an accurate certification of total
assessed value that the City can use for purposes of municipal taxation. The City has the
right to receive accurate materials and to rely on them. New Castle County is depriving the
City of that statutory right.
The City of Wilmington has also been injured because the City cannot effectively
and fairly administer its property tax system using New Castle County’s assessments. New
Castle County’s persistent use of an indefinite-base-year system has generated a decades-
long and ever-growing gulf between the true value of City properties and their value under
New Castle County’s methodology, giving property owners ample grounds to appeal
assessed valuations. The Delaware Supreme Court strengthened one ground for appeal by
holding that the assessed value of a commercial property must take into account
depreciation. See Commerce Assocs., LP v. New Castle Cty. Office of Assessment, 159 A.3d
1206, 1208–09 (Del. 2017). When applied in the context of New Castle County’s
indefinite-base-year system, the ability of commercial property owners to seek reductions
in assessed value based on more than three decades of depreciation created a valuation
gyre. Frequent appeals, together with New Castle County’s understandable practice of
settling them, have led to losses of recurring revenue for the City, which destabilizes its
98 budget and impairs its ability to plan for future expenditures. See Taylor Tr. 95–97, 101;
see also JX 38 at 13–15; JX 55 at 2–5, 9–12; JX 95.
The City of Wilmington has shown that a favorable ruling in this case is likely to
remedy its injury. One certainly hopes and would expect that if the Delaware courts
concluded that New Castle County is failing to comply with the Assessment Roll Statutes,
then New Castle County would change its methodology to bring itself into compliance. In
an earlier phase of the case, in an effort to defeat jurisdiction in this court, New Castle
County represented that it would do precisely that. See DEO I, 2018 WL 4849935, at *8.
Doing so would address the City’s injury. And if New Castle County did not change its
methodologies, then the City could seek further remedies.
In response to the City of Wilmington’s showing, New Castle County offers a series
of off-point objections. First, New Castle County complains that “approximately 35-40%
of the assessed value of property in the City is exempt from taxation because of the City’s
decision to grant those exemptions.” Dkt. 223 at 9. That is a non sequitur. By making this
argument, New Castle County implies that if the City could make up for the injuries that
New Castle County has inflicted by ordering its affairs differently, then the City would not
have suffered an injury. To the contrary, the City still would have suffered an injury; it just
would have found a way to compensate. “A plaintiff suffers an injury even if it can avoid
that injury by incurring other costs.” Texas v. United States, 787 F.3d 733, 749 (5th Cir.
2015).
Second, and relatedly, New Castle County maintains that the City of Wilmington
could choose to conduct its own property assessments rather than exercising its statutory
99 right to rely on New Castle County’s assessments under Section 1101. Dkt. 223 at 80. Here
again, New Castle County takes the position that if the City could do something to
compensate for the injuries that New Castle County has inflicted, then the City has not
suffered an injury. But the City is entitled to exercise a right that the General Assembly has
given to municipalities, namely the right to rely on the tax assessments that the counties
prepare. The City’s legislative body has exercised its sovereign authority by choosing to
exercise that right and accept that benefit. By failing to comply with its statutory and
constitutional obligations, New Castle County deprives the City of its right and injures the
City. If the City were forced to choose to change its own laws and conduct its own general
reassessments, then New Castle County would be depriving the City of its “sovereign
interest in the power to create and enforce a legal code.” Texas v. United States, 787 F.3d
at 749 (internal quotation marks omitted); see 15 James William Moore et al., Moore’s
Federal Practice § 101.60[4][a], at 101-210.2 (3d ed. 2019) (explaining that interference
with “the state’s ability to enforce its own laws” constitutes an injury to the state’s
sovereign interests). “[A] forced choice . . . is itself sufficient to support standing.” Texas
v. United States, 497 F.3d 491, 497 (5th Cir. 2007).
Third, New Castle County observes that because a major issue in recent assessment
appeals is the treatment of depreciation, and because the Delaware Supreme Court held in
the Commerce Associates case that depreciation must be taken into account when assessing
commercial property, then “[t]here is no connection as a matter of law between [New
Castle County’s] use of the 1983 base year and commercial property owners filing property
tax appeals . . . .” Dkt. 223 at 72. That is not accurate. The valuation issues raised by tax
100 appeals are a matter of degree. If New Castle County were using a current or reasonably
recent base year, then the valuation issues, including the obligation to take depreciation
into account, would be less problematic. New Castle County’s insistence on using an
indefinite-base-year methodology that relies on valuations now thirty-seven-years stale
creates major complications for everyone and becomes a destabilizing source of disputes.
The crux of the problem is not the inclusion of depreciation or the ability of taxpayers to
appeal, but New Castle County’s persistence in using an indefinite-base-year methodology,
because the latter feature is what exacerbates the effect of depreciation and enables
property owners to leverage that issue in tax appeals. Eliminating any doubt on this point,
New Castle County’s current chief executive has recognized that under the current system,
“the math that [New Castle County] use[s] to assess properties” is in “a crazy place” which
he likened to “the twilight zone.” JX 55 at 2 (internal quotation marks omitted). He agreed
that the current system makes “it easier for companies to challenge their assessments.”
Fourth, New Castle County attacks the sufficiency of the City of Wilmington’s
evidence, insisting that the City had to show injury with far greater precision. See Dkt. 223
at 73. If the City were claiming damages and seeking to recover a specified sum, then it is
possible that a more specific showing could have been necessary. But the City is not
seeking a monetary remedy. It is seeking prospective relief that would require New Castle
County to comply with clear and unambiguous requirements of the True Value Statute and
the Uniformity Clause, where New Castle County neither disputes the contents of those
requirements nor contends that it is complying with them, and where New Castle County’s
101 own witnesses agree that New Castle County’s assessments do not reflect present fair
market value and are not uniform.
The City of Wilmington has suffered an injury in fact as a result of New Castle
County’s assessment practices, which deprive the City of its rights under the Assessment
Roll Statutes. As a result, the City has standing to litigate New Castle County’s violations.25
b. The City Of Wilmington’s Ability To Prove Violations Of The Uniformity Clause And The True Value Statute As A Result Of Its Standing To Sue Under The Assessment Roll Statutes
Because it has standing to sue under the Assessment Roll Statutes, the City of
Wilmington has standing to prove that New Castle County is violating the Uniformity
Clause and the True Value Statute. As the basis for its claim that New Castle County is
violating the Assessment Roll Statutes, the City contends that New Castle County is
violating the Uniformity Clause and the True Value Statute. New Castle County denigrates
this as bootstrapping, but it merely reflects a litigation reality: the City is entitled to prove
how New Castle County is violating its obligations under the Assessment Roll Statutes.
25 New Castle County does not expressly make a zone-of-interests argument against standing based on the Assessment Roll Statutes. Implicitly, New Castle County advances a zone-of-interests argument against all of the City’s theories by contending that “[n]one of the four claims asserted in the City Complaint is directed at the issue of [New Castle County] resolving tax appeals regarding properties located in the City.” Id. at 9. By making this argument, New Castle County appears to contend that for an injury to fall within the zone of interests, the language of the statute or constitutional provision must speak directly to the specific injury that the plaintiffs’ claim. As discussed below, the zone-of-interests test is not so narrow. Regardless, the City falls squarely within the zone of interests protected by the Assessment Roll Statutes. That statute grants municipalities the right to rely on the tax assessments prepared by the county in which they are located, and the City is entitled to invoke that right.
102 The City can therefore obtain determinations as to New Castle County’s compliance with
those provisions en route to proving a violation of the Assessment Roll Statutes.
2. The City Of Wilmington’s Standing To Sue For Violations Of The Uniformity Clause And The True Value Statute
New Castle County argues that without the Assessment Roll Statutes, the City of
Wilmington would not have standing to assert claims in its own right under the Uniformity
Clause and the True Value Statute. New Castle County maintains that without the
Assessment Roll Statutes, the City cannot point to an injury in fact that falls within the
zone of interests that the provisions protect. To the contrary, the City can satisfy both
requirements.
a. The City Of Wilmington’s Injury In Fact For Purposes Of The Uniformity Clause And The True Value Statute
To support its claims under the Uniformity Clause and the True Value Statute, the
City of Wilmington identifies two injuries. The first does not support standing; the second
does.
The first injury is to the City of Wilmington’s revenue stream and budgeting
process. That injury is sufficient to support standing to sue under the Assessment Roll
Statutes, but in a hypothetical world without the Assessment Roll Statutes, the City would
not have the right to use New Castle County’s assessments, so the injury to its revenue
stream and budgeting process would not exist. That injury therefore cannot give the City
standing to prove violations of the Uniformity Clause and the True Value Statute in its own
right (as opposed to in its capacity as parens patriae or when proving a violation of the
Assessment Roll Statutes).
103 The second injury flows from the consequences of an assessment scheme that forces
owners of property in the City of Wilmington to bear a relatively greater share of the tax
burden. See Part II.B.1.b.iii, supra. As a result, owners of property in the City pay a
relatively greater share of the tax burden for New Castle County services and the public
schools, which creates a disincentive to own property in the City. See Dkt. 216 at 82 (noting
that relatively higher assessments “operate[] as a disadvantage to property ownership
within the City”); Dkt. 306 at 48. The City would suffer this injury regardless of the
existence of the Assessment Roll Statutes. This is an injury in fact that results directly from
New Castle County’s failure to comply with the Uniformity Clause and the True Value
Statute and which would be redressed by orders enforcing those provisions. It therefore
satisfies the injury requirement for purposes of the City’s standing to sue under those
provisions.
b. The Zone Of Interests For The City Of Wilmington’s Claims Under The Uniformity Clause And The True Value Statute
New Castle County separately argues that the City of Wilmington lacks standing to
sue in its own right under the Uniformity Clause and the True Value Statute “because both
of those provisions exist to protect taxpayers, not taxing authorities.” Dkt. 223 at 66. This
is an argument that the interests that the City seeks to vindicate do not fall within the zone
of interests that the Uniformity Clause and the True Value Statute seek to protect.
Under controlling Delaware Supreme Court authority, a plaintiff must show that the
interest it seeks to vindicate is “arguably within the zone of interest to be protected or
regulated by the statute or constitutional guarantee in question.” Gannett, 565 A.2d at 897;
104 accord Dover Historical Soc’y, 838 A.2d at 1110; Oceanport, 636 A.2d at 903. When
initially adopting and subsequently applying the zone-of-interests test in Gannett,
Oceanport, and Dover Historical Society, the Delaware Supreme Court endorsed the law
governing this aspect of federal standing doctrine as it then existed. See, e.g., Gannett, 565
A.2d at 897 (citing Ass’n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153–
54 (1970)).
When endorsed by the Delaware Supreme Court, the federal zone-of-interests test
was a prudential and plaintiff-friendly aspect of standing doctrine. The Supreme Court of
the United States had stressed that the conspicuous inclusion of the word “arguably” means
that “the benefit of any doubt goes to the plaintiff.” Match-E-Be-Nash-She-Wish Band of
Pottawatomi Indians v. Patchak, 567 U.S. 209, 225 (2012). The test does not require any
“indication of [legislative] purpose to benefit the would-be plaintiff.” Id. (quoting Clarke
v. Sec. Indus. Ass’n, 479 U.S. 388, 399–400 (1987)). The test foreclosed suit “only when a
plaintiff’s ‘interests are so marginally related to or inconsistent with the purposes implicit
in the statute that it cannot reasonably be assumed that Congress intended to permit the
suit.’” Id. (quoting Clarke, 479 U.S. at 399). If the interest had “a plausible relationship to
the policies underlying” the provision, then that is sufficient. Clarke, 479 U.S. at 403.
More recently, the Supreme Court of the United States has tightened federal
standing doctrine. It has restricted its plaintiff-friendly interpretations of the zone-of-
interests test to the Administrative Procedure Act and stated that the zone-of-interests test
will apply differently under other statutes. It has also held that the zone-of-interests test is
a mandatory aspect of the injury requirement for purposes of Article III standing. See, e.g.,
105 Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 130–31 (2014). The
lower federal courts have responded to these developments by limiting standing. See, e.g.,
Lee v. McCardle (In re Peeples), 880 F.3d 1207, 1213 (10th Cir. 2018). The counties rely
on these and other recent cases to argue for a stricter interpretation of the zone-of-interests
test. See Dkt. 306 at 26–27, 29–30; Dkt. 223 at 46.
The parties agree that the Delaware Supreme Court has not had the opportunity to
consider whether to endorse the narrowing of standing doctrine. Dkt. 306 at 38. When
considering a comparable tightening of the pleading requirements under Rule 12(b)(6), the
Delaware Supreme Court declined to adopt more recent interpretations by the Supreme
Court of the United States. See Central Mortg. Co. v. Morgan Stanley Mortg. Capital
Hldgs. LLC, 27 A.3d 531, 537 (Del. 2011).26 Following that lead, this decision continues
to apply the older framework that the Delaware Supreme Court endorsed. It therefore does
not address the many recent federal authorities that the counties have submitted in favor of
more restrictive approaches to the zone-of-interests test.
By seeking to vindicate an injury resulting from a non-uniform tax system that
imposes a greater burden on property owners in the City of Wilmington, the City is
pursuing an interest that falls within the zone of interests protected by the Uniformity
26 The traditional pleading standard uses the concept of conceivability and builds on Conley v. Gibson, 355 U.S. 41 (1957). See, e.g., In re Tri-Star Pictures, Inc., Litig., 634 A.2d 319, 326 (Del. 1993) (citing Conley). In the first decade of the current millennium, the Supreme Court of the United States abrogated Conley and adopted a new standard of plausibility. See Ashcroft v. Iqbal, 556 U.S. 662, 670 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555–65 (2007).
106 Clause and the True Value Statute. The Delaware Supreme Court has recognized that one
purpose of the Uniformity Clause is to ensure equal treatment of taxpayers.27 Both the
Delaware Supreme Court and the Delaware Superior Court have recognized that the True
Value Statute seeks to achieve accurate assessments and promote the fairness in the
assessment process.28 The City is suing to require New Castle County to implement a
system that results in accurate assessments, equal treatment of taxpayers, and a fair system
of taxation.
27 See Stewart, 378 A.2d at 115 (“Article VIII, s 1 simply requires that all taxpayers of the same class residing within the same tax district be treated equally.”); In re Estate of Zoller, 171 A.2d 375, 381 (Del. 1961) (“So long as the burden of taxes levied and collected within a taxing district, to raise revenue for that district, is equally and fairly borne by all taxpayers within that district, the fundamental requirement of uniformity is satisfied. It is in the light of this fundamental principle that our constitutional provision should be construed.”). New Castle County also cites two non-Delaware cases that express similar sentiments. See Dkt. 223 at 66 n.30 (citing Colvard v. Ridley, 128 S.E.2d 732, 734 (Ga. 1962) (interpreting uniformity requirement as ensuring “that all taxable property within the county is returned and assessed for taxes at its just and fair value and that valuations as between the individual taxpayers are fairly and justly equalized so that each taxpayer shall pay as near as may be only his proportionate share of taxes”); and then citing State ex rel. La Follette v. Torphy, 270 N.W.2d 187, 193 (Wis. 1978) (“The uniformity clause is intended to protect the citizen against unequal and unjust taxation. The clause requires that taxation act alike on all persons similarly situated.” (citation omitted))). 28 See Seaford Assocs., 539 A.2d at 1048 (“Accurate valuation of the property is essential to fairness in the assessment process.”); Excelsior Assocs., L.P. v. New Castle Cty. Dept. of Fin., 1995 WL 347380, at *7 (Del. Super. Ct. Jan. 31, 1995) (“In order to assure fairness in the assessment process, it is essential to determine an accurate valuation of the property.”).
107 Neither the provisions themselves nor any of these cases state that the provisions
only protect taxpayers or that only taxpayers can sue under them.29 They instead indicate
that the zone of interests protected by the Uniformity Clause and the True Value Statute
encompasses the interest that the City seeks to vindicate.
To recognize that the Uniformity Clause and the True Value Statute protect a broad
zone of interests comports with how Delaware courts have interpreted zoning ordinances
and regulations. Although the restrictions technically apply only to the property owner in
29 The out-of-state authorities are mixed. New Castle County cites In re Martin, 209 S.E.2d 766 (N.C. 1974), which dismissed a lawsuit by Mecklenburg County which challenged the constitutionality of a North Carolina statute that classified certain personal property stored in public warehouses as nontaxable. Mecklenburg County alleged that the statute deprived it of tax revenue in violation of North Carolina’s uniformity clause, and the Supreme Court of North Carolina held that this injury did not fall within the zone of interests protected by the clause. See id. at 773 (“Under our Constitution uniformity in taxation relates to equality in the burden on the State’s taxpayers. The interests of [the] County in collecting tax revenues . . . is not within the zone of interest intended to be protected by Article V, Section 2 of our State Constitution.”). By contrast, the City of Wilmington relies on Millcreek Township School District v. County of Erie, 714 A.2d 1095 (Pa. Commw. Ct. 1998), in which a township litigated a challenge under Pennsylvania’s uniformity clause. New Castle County correctly observes that the Erie decision did not rule explicitly on standing, but that case and others involving municipalities or school districts suggest that standing would not be a bar to suit under the uniformity clause of that state. See, e.g., Wilkinsburg Sch. Dist. v. Bd. of Prop. Assessment, 797 A.2d 1034 (Pa. Commw. Ct. 2002); Bald Eagle Area Sch. Dist. v. Cty. of Centre, 745 A.2d 689 (Pa. Commw. Ct. 1999); City of Harrisburg v. Dauphin Cty. Bd. of Assessment Appeals, 677 A.2d 350 (Pa. Commw. Ct. 1996); City of Lancaster v. Cty. of Lancaster, 599 A.2d 289 (Pa. Commw. 1991); see also State ex rel. State Bd. of Tax Comm’rs v. Marion Superior Court, 392 N.E.2d 1161, 1164–65 (Ind. 1979) (holding that county had standing to test the legality of action taken by Indiana’s state tax board); cf. Proviso Twp. High Sch. Dist. No. 209 v. Hynes, 417 N.E.2d 1290, 1291 (Ill. 1980) (acknowledging that “there may be a question as to the plaintiff’s standing” because they are school districts challenging constitutionality of property tax exemption, the proceeds of which they receive, but “elect[ing] to consider the case on its merits”).
108 question, Delaware courts have held that their “real design and purpose” is “to make the
locality a better place in which to live [and] to protect the value of the property and provide
for the health and safety of those who live there.” Harvey v. Zoning Bd. of Adjustment,
2000 WL 33111028, at *6 (Del. Super. Nov. 27, 2000) (citing In re Auditorium, Inc., 84
A.2d 598, 602 (Del. Super. 1951)). Delaware decisions therefore have recognized that other
owners have standing to sue and that their claims fall within the zone of interests protected
by the ordinances. See id. at *7. See generally Dover Historical Soc’y, 838 A.2d at 1116.
The real design and purpose of the Uniformity Clause and the True Value Statute is to
promote a fair, uniform, and transparent tax system that benefits communities as well as
taxpayers. Parties other than the taxpayers directly affected by the assessments therefore
can have standing to sue.
New Castle County argues that the True Value Statute should be interpreted to deny
the City of Wilmington standing to sue because “(i) ‘statutes relating to taxation and
collection of taxes should not be given breadth greater than that which is clearly apparent
from the wording of the statute,’ and (ii) ‘statutes providing for assessments upon property
must be construed strictly and given an interpretation favorable to the property owner.’”
Dkt. 223 at 67 (quoting New Castle Cty. v. Chrysler Corp., 681 A.2d 1077, 1082 (Del.
Super. 1995), aff’d, 1996 WL 145806 (Del. 1996) (TABLE)). The Chrysler decision and
the cases it cited are distinguishable. The Chrysler case addressed whether New Castle
County had a statutory right to appeal from an administrative hearing. Because “[t]he
appellate jurisdiction of Delaware courts is limited by the Delaware constitution and
statutes,” the court looked to whether the statute granted the county a right to appeal and
109 found that the plain language of the statute controlled. Chrysler, 681 A.2d at 1081–82. The
court mentioned the two interpretive canons in passing, citing cases that dealt with quite
different situations.30 Regardless, in this case, the interpretation “favorable to the property
owner” permits the City to sue to enforce the Uniformity Clause and the True Value Statute.
New Castle County’s interpretation would prevent the City from filing suit and enable New
Castle County to continue assessing property in the City using decades-old valuations that
do not reflect present fair market value and which impose a disproportionate burden on
City properties.
New Castle County’s efforts to deny standing to the City of Wilmington therefore
fail. Even without the Assessment Roll Statutes, the City of Wilmington would have
standing to assert claims in its own right under the Uniformity Clause and the True Value
30 The Chrysler court cited Wilmington Trust Company v. Caratello, 385 A.2d 1131 (Del. Super. 1978), for the first canon. There, the Delaware Superior Court recited the proposition that “statutes relating to taxation and collection of taxes should not be given breadth greater than that which is clearly apparent from the wording of the statute” in the course of rejecting New Castle County’s contention that delinquent sewer service charges were taxes that enabled a subject property to be sold for nonpayment, even though a Delaware statute specified that the charges had to be delinquent for five years before that remedy was available. Id. at 1135. For the second canon, the Chrysler court cited Riley v. Banks, which found “the general rule to be, that statutes providing for local improvements and assessments upon the property to be benefitted thereby, must be strictly construed and given an interpretation favorable to the owner of the property to be assessed.” 62 A.2d 229, 234 (Del. Super. 1948) (en banc). The Riley decision held that insufficient notice had been given before a hearing on a proposed sanitary district, rendering invalid the assessment approved at the meeting. Id. at 235–36.
110 3. The City Of Wilmington’s Standing To Sue As Parens Patriae
As an additional basis for having standing to sue under the Uniformity Clause and
the True Value Statute, the City of Wilmington relies on the doctrine of parens patriae.
This doctrine gives the City standing to sue.
“Parens patriae means literally ‘parent of the country.’” Alfred L. Snapp, 458 U.S.
at 600. Under this doctrine, a state can sue to protect the “quasi-sovereign interests” that it
has “in the well-being of its populace.” Id. at 602. These quasi-sovereign interests fall into
two general categories: “First, a State has a quasi-sovereign interest in the health and well-
being—both physical and economic—of its residents in general. Second, a State has a
quasi-sovereign interest in not being discriminatorily denied its rightful status within the
federal system.” Id. at 607.
The power to sue under the doctrine of parens patriae belongs in the first instance
to the State of Delaware. The General Assembly chose to grant municipalities the right to
assume sovereignty for themselves by declaring themselves to be “home rule cities.” 22
Del. C. § 802 (the “Home Rule Act”). The General Assembly provided that if a
municipality exercised this right, then it would “have and assume all powers which, under
the Constitution of this State, it would be competent for the General Assembly to grant by
specific enumeration and which are not denied by statute.” Id. The Home Rule Act
contained only two exceptions to this authorization to take up the tools of sovereignty:
“This grant of power does not include the power to enact private or civil law governing
civil relationships except as an incident to an exercise of an independent municipal power,
nor does it include power to define and provide for the punishment of a felony.” Id.
111 “The purpose of the home rule provisions was to enable municipalities to exercise
the powers of the sovereign except as limited by either the State Constitution or State
statute.” Schadt v. Latchford, 843 A.2d 689, 691 (Del. 2004) (internal quotation marks
omitted). The City of Wilmington has exercised its right to become a home rule city. The
City charter provides:
Pursuant to 22 Del. C. ch. 8 . . . the city shall have and exercise all express and implied powers and authority of local self-government and home rule, which, under the Delaware Constitution, it would be competent for the General Assembly to grant the city by specific enumeration and which are not denied by general statute; and the city shall have complete powers of legislation and administration in relation to its municipal functions, including any additional powers and authority which may hereafter be granted to it.
Wilm. C. § 1-101. Through this provision, the City “became a sovereign power as far as
local self-government was concerned.” City of Wilm. v. Lord (Lord IV), 340 A.2d 182, 182
(Del. Super. 1975).
The General Assembly’s expansive grant of “all powers which, under the
Constitution of this State, it would be competent for the General Assembly to grant by
specific enumeration and which are not denied by statute” logically includes the power to
sue as parens patriae. Although the decision was abrogated on other grounds, the United
States District Court for the District of Delaware held that the combination of the broad
grant of authority under the Home Rule Act and the City of Wilmington’s broad assertion
of all power within its reach meant that the City had the capacity to sue the State of
Delaware for equitable relief:
Nothing has been found in either the Delaware Constitution or the Delaware Code which would prohibit the City from seeking equitable relief against the State. It seems plain that the General Assembly could have expressly
112 permitted the City to file an action such as this one. The broad delegation of the [Home Rule Act], the definite intent of the City to assume all powers within its reach, and the absence of any relevant limitation on the City’s power to sue in either the Delaware Constitution or the Delaware Code persuade the Court that the City has the capacity to sue the State.
Nat’l Ass’n for Advancement of Colored People v. Wilm. Med. Ctr., Inc., 426 F. Supp. 919,
927 (D. Del. 1977), abrogated on other grounds by Chowdhury v. Reading Hosp. & Med.
Ctr., 677 F.2d 317, 321 (3d Cir. 1982). By parity of reasoning, the Home Rule Act
conferred on the City the ability to sue in parens patriae.
New Castle County attempts to swat away the City of Wilmington’s ability to sue
as parens patriae by citing a law review article for the assertion that “nearly every court to
have addressed the issue of municipal authority to proceed in parens patriae has held that
the municipality lacks sufficient sovereignty to do so.” Dkt. 223 at 69 (citing Savit, supra,
at 605 n.38). The law review article in fact argues in favor of recognizing the ability of
cities to sue as parens patriae, notes that “state courts have occasionally held (or suggested)
that cities enjoy authority to sue on behalf of their residents as parens patriae,” and
expresses regret that other cases have rejected this basis for standing by citing federal
precedent that the article views as inapposite. Savit, supra, at 605–06. This case is different
because the General Assembly enacted the Home Rule Act, which delegated to home rule
jurisdictions “all powers which, under the Constitution of this State, it would be competent
for the General Assembly to grant by specific enumeration and which are not denied by
statute.” The law review article argues that states can and should delegate to cities the
sovereign authority to sue as parens patriae. See Savit, supra, at 609–11. The broad
delegation in the Home Rule Act did precisely that.
113 In response to the City of Wilmington’s reliance on the Home Rule Act, New Castle
County argues that the statute “does not change [the City’s] lack of sovereignty, because
the City remains subordinate to the State of Delaware.” Dkt. 223 at 69. It is of course true
that the General Assembly can deny the City powers by enacting general statutes. See Lord
IV, 340 A.2d at 183–84. It is also true that if a conflict exists between a local ordinance and
state law, then state law controls.31 In either case, however, the General Assembly must
have exercised its authority and limited—either explicitly or implicitly—the grant of
sovereignty that the Home Rule Act otherwise provides. If the General Assembly has not
acted, then the City can exercise sovereignty under the Home Rule Act. The General
Assembly has the authority to deny the City the power to sue in parens patriae, but it must
exercise that authority. The General Assembly has not done so.
Perhaps recognizing the weakness of its argument based on the Home Rule Act,
New Castle County fires off four arguments in rapid succession, each supposedly
foreclosing the City of Wilmington from having the ability to sue. First, New Castle County
claims that the City’s authority under the Home Rule Act is “‘limited to legislation
31 See 22 Del. C. § 835(a) (“[The Home Rule Act] shall not permit the amending of a municipal charter so as to . . . (2) Permit any charter amendment in contravention of any general statute of this State.”); FMC Corp. v. Special Servs. Dept., 2017 WL 2378002, at *3 (Del. Super. May 31, 2017) (holding that home rule authority conferred on New Castle County does not include the power to expand the jurisdiction of the Delaware courts, which is determined by the Delaware Constitution and by state statute); Walton v. Baldini Inc., 1991 WL 35712, at *2 (Del. Super. Feb. 14, 1991) (“When a conflict between the local ordinance and state law exists, the latter must prevail, unless under the statutes or law of the state the ordinance is given predominance in a particular instance or as to a particular subject matter.”).
114 concerning local matters.’” Dkt. 223 at 69 (emphasis omitted) (quoting Walton, 1991 WL
35712, at *2). That is not accurate. It includes the power to sue. See Wilm. Med. Ctr., 426
F. Supp. at 927. New Castle County then suggests that the City’s power to litigate should
not extend to “matters having implications outside of the confines of the City limits, such
as countywide reassessment.” Dkt. 223 at 70. Under the structure of the Home Rule Act,
New Castle County would need to point to legislation imposing that limitation. New Castle
County has not done so, and the holding by the United States District Court for the District
of Delaware that the City can sue the State of Delaware points in the opposite direction.
See Wilm. Med. Ctr., 426 F. Supp. at 927.
Next, New Castle County cites a Delaware Supreme Court decision which held that
“‘the doctrine of parens patriae is merely a species of prudential standing . . . and does not
create a boundless opportunity for governments to seek recovery for alleged wrongs against
them or their residents.’” Dkt. 223 at 70 (quoting State of São Paulo v. Am. Tobacco Co.,
919 A.2d 1116, 1121 (Del. 2007) (quoting Serv. Empl’s Int’l Union Health and Welfare
Fund v. Philip Morris Inc., 249 F.3d 1068, 1073 (D.C. Cir. 2001))). New Castle County
claims that the City of Wilmington is trying to “expand[] this Court’s jurisdiction through
the invocation of standing in parens patriae.” Id. (citing FMC Corp., 2017 WL 2378002,
at *3). Contrary to this conclusory argument, the City is not relying on the Home Rule Act
115 to establish jurisdiction. This court has already held that it has jurisdiction to hear the claims
and grant the types of relief at issue in this case. See DEO I, 2018 WL 4849935, at *8.32
Third, New Castle County posits that even if the City of Wilmington could sue as
parens patriae, it cannot “simply pursu[e] claims to vindicate the private interests of City
taxpayers, which even the State would not have standing to do.” Dkt. 223 at 70. This
assertion misconstrues the City’s claim. The City has not sought to aggregate and vindicate
the private interests of City taxpayers. The City is not, for example, attempting to recover
a sum of money on behalf of its residents. Instead, the City has asserted an injury to the
well-being of its residents and to their confidence in the fairness of the property tax system.
See Alfred L. Snapp, 458 U.S. at 600, 602. The City seeks to compel New Castle County
to comply with clear and undisputed statutory and constitutional requirements that affect
the sound administration of the City’s tax system as a whole. That is a legitimate quasi-
sovereign interest that the City has standing to protect.
Finally, New Castle County argues that under Delaware precedent, taxpayers in the
City of Wilmington could pursue claims through a class action. See Brennan, 104 A.2d at
792–93; Cronin v. Greenhouse, 1992 WL 403111, at *2 (Del. Ch. Dec. 26, 1992), aff’d,
32 By contrast, in FMC Corp., the petitioner contended that New Castle County had used its home rule authority to create a right of appeal from a county agency to the Delaware Superior Court. 2017 WL 2378002, at *2. New Castle County argued, and the Superior Court agreed, that New Castle County could not have created a right of appeal to the Superior Court, because the General Assembly established the Court’s appellate jurisdiction by statute. See id. at *3. Here, the City is not attempting to expand this court’s jurisdiction.
116 623 A.2d 1142 (Del. 1993) (TABLE). New Castle County contends that because a class
action could be filed, “they do not need the City to act on their behalf.” Dkt. 223 at 70–71.
Neither Brennan nor Cronin implies that a taxpayer class action is the exclusive
means of challenging aspects of the tax assessment system. In Brennan, the Delaware
Supreme Court did not reach that conclusion. The high court confronted “a taxpayer’s class
suit to enjoin an entire assessment of all real estate within the jurisdiction of a Board of
Assessment” and commented that “[i]n such a case the burden resting upon the taxpayer is
a very heavy one.” Brennan, 104 A.2d at 792–93. In Cronin, the Court of Chancery
declined to exercise jurisdiction over an individual action in which a plaintiff challenged
the application of a base-year valuation to his own property, finding that the plaintiff “has
an adequate remedy at law.” 1992 WL 403111, at *2. Neither case foreclosed other possible
forms of litigation, and neither addressed the possibility of a municipality suing in parens
patriae.
In the current case, the City of Wilmington has standing as parens patriae to assert
a claim against New Castle County for violating the Uniformity Clause and the True Value
Statute. The City can sue to vindicate its residents’ interests in (i) achieving a uniform
system of taxation and (ii) avoiding arbitrary and non-uniform assessments. The City can
also sue on behalf of its residents who are children, because they face the prospect of
attending public schools that receive less funding than they otherwise would if New Castle
County updated its assessments. The doctrine of parens patriae applies with special force
when a sovereign asserts claims on behalf of children. See Newmark v. Williams, 588 A.2d
1108, 1116 (Del. 1991).
117 4. The Conclusion Regarding The City Of Wilmington’s Standing
The City of Wilmington has standing to assert its claims against New Castle County
under the Assessment Roll Statutes, the Uniformity Clause, and the True Value Statute.
New Castle County’s efforts to foreclose the City from asserting these claims lack merit.
C. The DEO’s Standing To Sue
In contrast to the City of Wilmington, which sues in its own right and as parens
patriae, the DEO relies on the concept of associational standing. That doctrine enables an
institution to sue on behalf of its members when “1) the interests to be protected by the suit
are germane to the organization’s purpose; and 2) neither the claim asserted nor the relief
requested requires the participation of individual members; and 3) the organization’s
members would otherwise have standing.” Oceanport, 636 A.2d at 902. The third issue—
whether the organization’s members would have standing to sue—implicates the basic
standing requirements that any plaintiff must meet, including the zone-of-interests test and
the multi-factor injury test. See id. at 903–04.
The counties do not dispute that the DEO has met the first and second elements of
the test for associational standing. The question therefore becomes whether the DEO has
established that one of more of its members would have standing to sue.
1. A DEO Member’s Injury In Fact
To establish associational standing, at least one member of the organization must
have suffered an injury in fact, defined as an invasion of a legally protected interest which
is (i) concrete and particularized and (ii) actual or imminent, not conjectural or
hypothetical. Dover Historical Soc’y, 838 A.2d at 1110. At bottom, the plaintiff must have
118 been affected “in a personal and individual manner.” Oceanport, 636 A.2d at 905. The
legally protected interest need not be economic. See, e.g., Gannett, 565 A.2d at 897.
Federal decisions have recognized that parents have standing to sue when
government policies affect their children’s education.33 Federal decisions have also
recognized that standing exists to challenge actions that result in a diminished quality of
education or reduced educational opportunities.34
The DEO offered evidence that its members include parents who reside in all three
counties and whose children have suffered harm because of the failures of Delaware’s
public schools to meet the needs of Disadvantaged Students. The DEO contends that the
counties’ assessment practices contribute to these failures by depriving schools of local tax
revenue and undermining the State of Delaware’s funding scheme.
33 See Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, 551 U.S. 701, 719 (2007) (holding that non-profit corporation with parent members had standing to sue school district based upon injuries they could validly claim on behalf of their children); Sch. Dist. of Abington Twp. v. Schempp, 374 U.S. 203, 225 n.9 (1963) (“The parties here are school children and their parents, who are directly affected by the laws and practices against which their complaints are directed. These interests surely suffice to give the parties standing to complain.”); see also Liddell v. Special Admin. Bd. of Transitional Sch. Dist., 894 F.3d 959, 965–66 (8th Cir. 2018) (“Parents have standing to sue when practices and policies of a school threaten their rights and interests and those of their children.”). 34 See Liddell, 894 F.3d at 965–66 (finding parents of students attending charter schools showed sufficient injury to intervene in action brought to enforce settlement agreement where outcome would result in charter schools losing significant funding with concomitant harm to educational opportunities for their children); Doe ex rel Doe v. Vermillion Parish Sch. Bd., 421 F. App’x 366, 372–74 (5th Cir. 2011) (recognizing that student had standing to challenge policy of same-sex classes based on allegations of injury “resulting from a diminished quality of education”).
119 Jea Street, the President of DEO, testified at trial. He explained that the DEO’s
members include Wilmington residents whose children are Disadvantaged Students, who
attend public school in New Castle County, and who suffer because the public schools lack
sufficient funding to meet their educational needs. See Street Tr. 62–64, 76–77, 86–87.
Street described the problems that Disadvantaged Students face, and he testified from
personal knowledge that the problems could have been addressed with additional
resources. See id. at 86–87. Street’s testimony comported with the DEO’s interrogatory
responses, introduced into evidence at trial, which identified two members residing in New
Castle County whose children attend school in the Red Clay Consolidated School District.
See JX 51 at 3–7.
M.V., a member of the DEO, also testified at trial. She resides in Sussex County
and has an eleven-year-old daughter who attended public school in the Indian River School
District from kindergarten through fourth grade. While attending public school, M.V.’s
daughter qualified for free lunch. M.V. testified about the inadequate services that the
school provided to students whose first language is not English. Among other things, M.V.
explained that her daughter, who is bilingual, was frequently pulled out of class to help
Spanish-speaking children understand material being taught in English. See M.V. Tr. 9–
11. M.V. also testified about instances when the schools focused on assisting
Disadvantaged Students, but did so at the expense of providing learning opportunities to
regular students. See id. at 9–12. M.V. described large classes and inadequate staffing at
the public schools. See id. at 13–15, 23. M.V. explained that her experiences and concerns
are not limited to her family; Sussex County has a large percentage of Hispanic families
120 who do not speak English or for whom English is not their first language. M.V. described
instances when Spanish-speaking families asked her to participate in meetings with school
representatives or to translate school communications. See id. at 7, 14–15. M.V.’s concerns
about the public schools were sufficiently severe that she moved her daughter to a private
school. See id. at 7–8, 16. After enrolling her daughter in the private school, she learned
that her daughter was not performing at grade level and had to do extra work to catch up.
See id. at 17. M.V. attributed her daughter’s struggles to her experience in public schools
that lack the resources to provide all students with the education they need. Id. at 17.
A.Y. is a member of the DEO who resides in Kent County. She has a daughter and
a son, both of whom currently attend high school. Both attended public schools throughout
their educational careers. A.Y. Tr. 233–34. A.Y. testified about significant levels of
violence and disruption in the public schools and the effect it had on her children. She
attributed the problems to the public schools lacking sufficient resources to address the
needs of Disadvantaged Students. See id. at 235–38. She described other examples of
insufficient staffing and the consequences for students. See id. at 238, 243–44, 275–76.
A.Y. compared her children’s experience in the Kent County schools with her personal
experience as a student in Maryland and her knowledge of other students’ experience in
better funded Pennsylvania schools. See id. at 239–42, 280, 287.
121 The counties contend that the testimony from Street, M.V., and A.Y. is insufficient
to support standing. Relying on federal case law,35 they argue that Street’s testimony about
the DEO’s members cannot give the DEO standing to sue for injury because the DEO must
identify affected members specifically. The counties have not cited, and research has not
identified, any Delaware case adopting this aspect of federal standing doctrine. Before the
Supreme Court of the United States required the identification of a specific member, some
decisions had rejected the argument, explaining that it
misconceives the crucial inquiry for standing: while it will often be expedient (if not necessary) to identify particular individuals in order to show with reasonable certainty that there will in fact be a real injury, the “identity” of those injured is not the ultimate goal. Rather, the identity of individual members is only a means to an end, and it should not be confused with the real purpose of the inquiry—that is, for the court to be satisfied that the requisite injury really has occurred or will occur in the future to members of the organizations . . . .36
35 See Dkt. 223 at 34 n.121 (citing, e.g., Summers v. Earth Island Inst., 555 U.S. 488, 498 (2009); and Nationwide Ins. Indep. Contractors Ass’n, Inc. v. Nationwide Mut. Ins. Co., 518 F. App’x 58, 63 (3d Cir. 2013); and Am. Chemistry Council v. Dept. of Transp., 468 F.3d 810, 820 (D.C. Cir. 2006)). 36 Pub. Citizen v. FTC, 869 F.2d 1541, 1551–52 (D.C. Cir. 1989) (citation omitted); accord Disability Rights Wis., Inc. v. Walworth Cty. Bd. of Supervisors, 522 F.3d 796, 802 (7th Cir. 2008); Doe v. Stincer, 175 F.3d 879, 882 (11th Cir. 1999); Nat’l Wildlife Fed’n v. Burford, 835 F.2d 305, 313 (D.C. Cir. 1987); see also N.Y. State Club Ass’n, Inc. v. City of New York, 487 U.S. 1, 9 (1988) (“It does not matter what specific analysis is necessary to determine that the members could bring the same suit, for the purpose of the first part of the [associational standing] test is simply to weed out plaintiffs who try to bring cases, which could not otherwise be brought, by manufacturing allegations of standing that lack any real foundation.”).
122 From a policy standing, the more flexible approach recognizes that some individuals may
be reluctant to seek redress if they can be identified, particularly in cases involving
sensitive personal matters or where there may be consequences from taking a public stand.
When a representative of the organization gives credible testimony regarding its
members, that should be sufficient for purposes of Delaware law. 37 Street gave credible
testimony about the composition of the DEO’s membership.38 Street’s testimony is
sufficient to give the DEO standing to sue.
The counties next argue that M.V. and A.Y. cannot confer standing to sue upon the
DEO because neither was the parent of a Disadvantaged Student. A.Y. admitted that her
children are not themselves Disadvantaged Students. M.V. described herself as “low
income” and testified that her child qualified for free lunch while attending public school,
bringing her within the definition of Disadvantaged Students used by the complaint. The
counties dispute that M.V. qualifies as “low income” or “poor,” but M.V.’s testimony on
this subject was credible.
Assuming for the sake of argument that M.V. and A.Y. are not the parents of
Disadvantaged Students, their children still suffered injury. When a school district lacks
37 If I am incorrect and Delaware law requires that an organization identify a specific member by name, then that would only affect the DEO’s ability to sue New Castle County. 38 The counties quibble that Street testified about having “recruited” members to the DEO, without specifying that they actually joined. Dkt. 223 at 8. Street used the word “recruited” in the sense of having completed their recruitment. He thus referred to members he had successfully recruited, not members that he had attempted unsuccessfully to recruit.
123 sufficient funding to provide an adequate education to Disadvantaged Students, that reality
has consequences for all students. M.V. and A.Y. both testified credibly about the
consequences for their children that resulted from their schools’ inability to meet the needs
of Disadvantaged Students.
Although there does not appear to be a Delaware case on point, the injury that
students suffer when a school lacks sufficient resources to serve Disadvantaged Students
should be sufficient to support standing. The Dover Historical Society case is instructive.
There, the Delaware Supreme Court held that residents who owned property within the
Historic District of Dover had standing to challenge the Dover Planning Commission’s
grant of a permit to build a new structure in the Historic District. Although the residents
were not directly affected by the permitting decision in a tangible or economic way, the
high court explained that “aesthetic injuries can constitute an injury in fact that is sufficient
to support a plaintiff’s standing.” Dover Historical Soc’y, 838 A.2d at 1113. On the facts
presented, the senior tribunal ruled that the residents’ “individual concerns about the
integrity and cohesiveness of the historical sites in their own backyard” were sufficient to
confer standing, distinguishing those interests from “a ‘common concern for obedience to
the law.’” Id. at 1114 (quoting Pye v. United States, 269 F.3d 459, 469 (4th Cir. 2001)).
Although the analogy is not perfect, the interest that children have in attending schools that
provide adequate support for Disadvantaged Students seems at least as weighty as the
interest that Dover property owners had in a district that gave adequate consideration to
historic sites. These children and their parents have an interest in ensuring that
Disadvantaged Students receive services to preserve the integrity and cohesiveness of their
124 school communities. Likewise, the injury children suffer when their educational
opportunities are compromised due to their school’s inability to provide adequate support
for Disadvantaged Students seems at least as concrete, particularized, and worthy of
protection as the interest that Dover property owners had in the administration of a historic
district. Where the Dover property owners suffered aesthetic injury, the children suffer the
potential lifelong legacy of diminished educational opportunities.
Another instructive decision is Food & Water Watch v. Delaware Department of
Natural Resources and Environmental Control, 2018 WL 4062112 (Del. Super. Aug. 24,
2018). There, an organization whose members used waterways in Delaware sued the state
environmental agency over newly adopted regulations for Concentrated Animal Feeding
Operations (“CAFOs”). The regulations established operating standards for CAFOs to
meet, but did not require CAFOs to monitor on-site water sources or nearby streams for
CAFO-generated pollutants. The agency moved to dismiss the complaint, contending that
the organization lacked standing because its members could not show injury from the lack
of monitoring standards. The Delaware Superior Court upheld the organization’s standing,
explaining that “injury due to loss of benefits that might be derived from natural resources
such as camping, hiking, fishing, sightseeing and the like” was “enough to support
standing.” Id. at *5 (internal quotation marks and alternations omitted). The court further
held that the organization established a sufficient injury to its interests when its members
averred that they previously had enjoyed using Delaware waterways for recreation, but had
decreased their activities, stopped using certain areas altogether, and were enjoying their
recreation less due to fear of contamination. See id. Although the analogy is again
125 imperfect, a child’s interest in attending a school that provides adequate support for
Disadvantaged Students seems at least as weighty as a nature lover’s interest in using
waterways for recreation. Likewise, the injury children suffer when their educational
opportunities are compromised due their school’s inability to provide adequate support for
Disadvantaged Students seems at least as concrete, particularized, and entitled to protection
as the “loss of benefits that might be derived from natural resources such as camping,
hiking, fishing, sightseeing and the like.” Just as the members in Food & Water Watch
established sufficient injury by averring that they were enjoying their recreation less, had
diminished their activities, and had stopped using some areas altogether, A.Y. and M.V.
testified about their children enjoying school less and learning less, and M.V. testified that
she stopped using Delaware’s public schools—she withdrew her child and placed her in
private school—because of concerns about the problems caused by inadequate resources
for Disadvantaged Students.
The counties argue that the DEO cannot rely on the injuries suffered by its members’
children who are not Disadvantaged Students because the complaint focuses on harm to
Disadvantaged Students. See Dkt. 223 at 33–35. The standing inquiry seeks to ensure that
a plaintiff has a sufficient interest in the controversy to litigate the case, distinct from the
interests of the public in general, and is not an intermeddler. See Stuart Kingston, 596 A.2d
at 1382. The injuries suffered by the children of DEO members, even if not themselves
Disadvantaged Students, are sufficiently concrete and particularized injuries to give the
DEO standing to sue.
126 Through the testimony of Street, its President, the DEO has established injury for
purposes of its claims against New Castle County. Through the testimony of M.V. and
A.Y., the DEO has established injury for purposes of its claims against Kent County and
Sussex County.
2. The Connection Between The DEO Members’ Injury And The Counties’ Actions
For an organization to invoke associational standing, the injury suffered by its
members must be “fairly traceable to the challenged action of the defendant and not the
result of the independent action of some third party not before the court.” Dover Historical
Soc’y, 838 A.2d at 1110 (internal quotation marks omitted). The evidence supports a
sufficient connection between the DEO’s members and the counties’ indefinite-base-year
method.
This court has made factual findings establishing that the counties’ practice of using
stale assessments directly affects school district funding and reduces the level of services
that schools can provide. See Part I.D, supra. As discussed in the Factual Background, the
counties’ failure to comply with the True Value Statute and the Uniformity Clause reduces
the local revenue that schools receive and undermines the State of Delaware’s system of
Equalization Funding. Delaware policy makers have repeatedly reached the same
conclusions. See JX 3; JX 4; JX 9; JX 13; JX 21.
The counties contend that the DEO members’ injuries are not fairly traceable to the
counties’ actions because they depend on the involvement of other actors. First, the
counties contend that because public schools can obtain more money by raising tax rates
127 through the referendum process, the counties bear no responsibility. If a referendum fails,
the counties say, then that decision is attributable to voters, not the counties’ assessment
practices. See Dkt. 223 at 50–51. They even go so far as to contend that a judicial decision
requiring the counties to comply with their constitutional and statutory obligations would
have the effect of overturning the results of those referendums. See id. at 51 n.184. The
answer is that because of inflation, the counties indefinite-base-year method steadily
deprives school districts of money. School districts must conduct referendums in an effort
to mitigate the harm that that the counties are inflicting. The fact that school districts are
forced to conduct referendums is itself part of the harm. That fact alone distinguishes the
cases on which the counties rely, all of which involved challenges to the outcomes of
elections.39 The plaintiffs are not challenging an election. They are challenging the broken
system of tax assessments that forces school districts to resort to referendums.
39 See Habecker v. Town of Estes Park, 518 F.3d 1217, 1225 (10th Cir. 2008) (holding that former member of town’s governing board lacked standing to challenge result of recall election where court could not find that the voters’ decision to recall him was connected to defendants’ alleged wrongful conduct); Kardules v. City of Columbus, 95 F.3d 1335, 1355 (6th Cir. 1996) (finding lack of standing where court could not attribute voters’ rejection of a proposal to merge two municipalities to the threat that water and sewage rate increases might result from the merger); League of United Latin Am. Citizens v. Ferrera, 792 F. Supp. 2d 1222, 1234 (D.N.M. 2011) (concluding that losing candidate lacked standing to challenge result of primary where he could not show he lost because of disciplinary petition filed against him); Winpisinger v. Watson, 86 F.R.D. 77, 78–79 (D.D.C.), aff’d, 628 F.2d 133 (D.C. Cir. 1980) (holding that supporters of Senator Edward Kennedy lacked standing to challenge results of primary where their injury resulted from “their inability to persuade people to vote for Senator Kennedy”).
128 The counties also argue that to the extent the public schools do not receive accurate
allocations of Equalization Funding, then that is a decision attributable to the Equalization
Committee, not the counties. Dkt. 223 at 53–54. As a threshold matter, the existence of the
Full Value Formula in the Equalization Funding statute demonstrates that the counties’
failure to update their assessments directly interferes with the equalization process. If the
counties complied with their obligations, then the Full Value Formula would not be
necessary, because property would be assessed at its present fair market value. As a factual
matter, the gap between the counties’ assessed values and present fair market values has
grown so great that the Full Value Formula no longer can compensate. As a result, in 2016,
2017, and 2018, the three most recent years in the record, the Equalization Committee was
unable to carry out its charge of allocating Equalization Funding. See JX 9, JX 13, JX 21.
This evidence demonstrates the counties’ assessment practices interfere with the
Equalization Funding system, which deprives school districts of their proper allocation of
funding and inflicts injury on the DEO’s members.
At bottom, the counties maintain that the plaintiffs can sue only if their actions are
the last link in the causation chain, making them the sole or proximate cause of the
plaintiffs’ injury. Even under narrower federal standing doctrine, the Supreme Court of the
United States has rejected this strict view of traceability, which “wrongly equates injury
‘fairly traceable’ to the defendant with injury as to which the defendant’s actions are the
very last step in the chain of causation.” Bennett v. Spear, 520 U.S. 154, 168–69 (1997).
Consistent with this approach, the Supreme Court of the United States has found that
129 litigants had standing to sue even when the outcome they challenged had multiple causes.
For example:
In Regents of University of California v. Bakke, the Supreme Court of the United States held that a prospective medical student had standing to challenge the affirmative action policy at the school where he applied, even though he could not show that the school would have admitted him but for the policy, and where the evidence instead indicated that the school would not have admitted him even without the policy. 438 U.S. 265, 280 n.14 (1978). The Court reasoned that the policy deprived the prospective medical student of a threshold opportunity to compete. Id.
In Northeastern Florida Chapter of Associated General Contractors v. City of Jacksonville, the Supreme Court of the United States held that a contractor had standing to challenge a city’s remedial set-aside program, even though the contractor could not prove that the city would have decided to award the contract without the program. 508 U.S. 656, 666 (1993). The Supreme Court of the United States reached the same conclusion in Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995).
In Parents, the Supreme Court of the United States considered whether parents had standing to challenge desegregation plans that would consider race as a factor when determining admission to an oversubscribed school. Although the school admission decisions had not yet been made and would depend on the actions of other parents and the schools in question, the Parents decision held that the plaintiffs had standing to challenge the desegregation plans. 551 U.S. at 718–19.
Other courts have reached similar conclusions.40 Under these precedents, a sufficient
connection exists between the counties’ actions and the injury that the DEO seeks to
remedy.
40 See, e.g., Nw. Requirements Utilities v. FERC, 798 F.3d 796, 806 (9th Cir. 2015) (“The agency actions need not be the sole source of injury, and a causal chain does not fail simply because it has several links, provided those links are not hypothetical or tenuous and remain plausible.” (internal quotation marks omitted)); Stormans, Inc. v. Selecky, 586 F.3d 1109, 1121 (9th Cir. 2009) (finding standing to sue government where a pharmacist might be fired by a pharmacy because of the pharmacy’s reaction to government regulations); Weaver’s Cove Energy, LLC v. R.I. Coastal Res. Mgmt. Council, 589 F.3d 130 The counties rely heavily on Indiana Coalition for Public Education - Monroe
County and South Central Indiana, Inc. v. McCormick, 338 F. Supp. 3d 926 (S.D. Ind.
2018). See Dkt. 223 at 55. There, an Indiana statute authorized colleges to sponsor charter
schools. Grace College, a religious school, sponsored a charter school that received public
resources. The plaintiff sued the state superintendent of schools and the charter school,
seeking a declaration that the Indiana statute violated the Establishment Clause, and
claiming injury because the public schools received less public resources. The plaintiff did
not sue Grace College. The district court identified Grace College as “the actor whose
authorization of [the charter school] allegedly violates the Establishment Clause” and
which had “caused funds and students to be diverted to [the charter school].” McCormick,
338 F. Supp. 3d at 940–41. On that basis, the court found that the injury to the plaintiff was
not fairly traceable to the named defendants. If anything, the decision supports standing in
this case, because the county defendants are analogous to Grace College in that they are
the actors violating the law by collecting taxes based on assessments that violate the
Uniformity Clause and the True Value Statute.
The plaintiffs have shown that their injuries are fairly traceable to the counties’
failure to comply with the Uniformity Clause and the True Value Statute. This dimension
of the standing inquiry is satisfied.
458, 467–68 (1st Cir. 2009) (finding plaintiff had standing to sue a government agency for its delay of a decision to certify a project although the failure to certify was only one of several possible causes of plaintiff’s injury);
131 3. Whether The Litigation Can Remedy The Injury That The DEO Seeks To Address.
An organization that seeks to invoke associational standing must also show that it
is “likely, as opposed to merely speculative, that the injury will be redressed by a favorable
decision.” Dover Historical Soc’y, 838 A.2d at 1110 (internal quotation marks omitted). It
is highly likely that if the Delaware courts determine that the counties’ indefinite-base-year
method for assessing property violates the Uniformity Clause and the True Value Statute,
then the counties will take steps to remedy their violations. When previously seeking
dismissal of this case, the counties represented that they would do just that. During post-
trial argument, the counties conceded that this court has the power to order a general
reassessment if violations are established. See Dkt. 306 at 64–65. The court could also
deploy other remedies from the judicial toolkit to address the deficiencies that have been
identified. Fixing those deficiencies in turn will redress the injuries that the same
deficiencies are inflicting on Delaware’s public schools.
To argue against redressability, the counties recast the issue as turning on whether
this lawsuit will lead to a reassessment that will necessarily generate more money for the
public schools. The counties point out that under the Delaware Code, if a county conducts
a general reassessment, then each school board must calculate a new tax rate “which, at its
maximum, would realize no more than 10% increase in actual revenue over the revenue
derived by real estate tax levied in the fiscal year immediately preceding such reassessed
real estate valuation.” 14 Del. C. § 1916(b). The counties argue that because a school board
132 theoretically could reject the 10% increase in local revenue, the plaintiffs’ injury will not
be redressed by a favorable decision.
The logjam over the local component of school funding has a key log, and it is the
counties’ failure assess property in compliance with the True Value Statute and the
Uniformity Clause. This litigation can redress that injury directly. Moreover, the outcome
of the declaratory judgments that the plaintiffs seek is not a one-time thing. If the Delaware
courts determine that the counties’ indefinite-base-year method fails to comply with the
True Value Statute and the Uniformity Clause, then the counties will be obligated to
comply with those requirements on an annual basis. As described in the Factual
Background, the evidence demonstrates that ongoing compliance will result in property
assessments that rise over time, at a minimum due to inflation and potentially also due to
property appreciation. As those assessments improve, schools will receive more local
funding, without any need for a re-determination of the applicable tax rate under Section
1916(b).
Regardless, it is highly likely that school districts will happily accept the 10%
increase in revenue that would result from a general reassessment. Given that school
districts currently call for referendums every three to five years in an effort to mitigate the
effects of the counties’ failures to comply with their legal obligations, it is unlikely that
school districts would reject the increase.
4. The Zone Of Interests For The DEO’s Claims
To meet the next requirement for associational standing, the organization must meet
the zone-of-interests test. As discussed previously, the plaintiff must demonstrate that the
133 interest it seeks to vindicate is “arguably within the zone of interest to be protected or
regulated by the statute or constitutional guarantee in question.” Gannett, 565 A.2d at 897;
accord Dover Historical Soc’y, 838 A.2d at 1110; Oceanport, 636 A.2d at 903. The interest
need only have “a plausible relationship to the policies underlying” the provision. Clarke,
479 U.S. at 403.
The DEO seeks to enforce the Uniformity Clause and the True Value Statute to
mend one fracture in Delaware’s broken system for funding its public schools. The
Uniformity Clause and the True Value Statute are twin pillars of Delaware’s property tax
scheme. The operative question for a zone-of-interests analysis is whether there is a
plausible connection between an effort to enforce critical requirements of Delaware’s
property tax scheme and Delaware’s system for funding public schools.
The connection is clear and direct. The General Assembly built Delaware’s system
for funding its public schools on the legal infrastructure for property tax assessment and
collection. Approximately one-third of the funding for Delaware’s public schools comes
from local taxes levied by individual school districts. The General Assembly provided that
when levying taxes for school purposes, “[t]he school board . . . shall use the assessment
list of the county in which that district is located as a basis for any school district tax.” 14
Del. C. § 1912. The General Assembly further provided that “[t]he receiver of taxes and
county treasurer shall collect school taxes in the same manner and at the same time as
provided by law for the collection of taxes for other purposes . . . .” Id. § 1917(a). The
General Assembly thus connected the school financing system to the property tax system
and its component parts, including the Uniformity Clause and the True Value Statute.
134 An additional component of the funding for Delaware’s public schools comes from
Equalization Funding. The complex formula used to determine the allocation of
Equalization Funding likewise starts with assessed values, then attempts to use sales ratios
to correct for the counties’ decades-old valuations through the Full Value Formula. See Id.
§ 1707(b)(11). The linkage is sufficiently close that when the Equalization Committee
attempted to make its recommendations for the allocation of Equalization Funding in 2017,
2018, and 2019, it concluded on each occasion that the underlying property assessments
were so inaccurate as to foreclose any attempt to allocate Equalization Funding fairly. See
JX 9; JX 13; JX 21. Here again, the General Assembly linked the school financing system
to the property tax system and its component parts, including the Uniformity Clause and
The counties point out the obvious fact that neither the Uniformity Clause nor the
True Value Statute expressly mentions educational funding. See Dkt. 223 at 43–44. That
is not dispositive. Given that nearly one third of the funding for Delaware’s public schools
comes from local property taxes, the question is whether the plaintiffs’ challenges to the
fairness and uniformity of that system and the assessments on which it is based arguably
fall within the zone of interests protected by the Uniformity Clause or the True Value
Statute. See Patchak, 567 U.S. at 225. The direct linkage between school funding and the
property tax system makes clear that they do.
The counties also claim erroneously that the zone-of-interests analysis must focus
narrowly “on the ‘particular provision [of law] upon which the plaintiff relies.’” Dkt. 223
135 at 46 (quoting Bennett, 520 U.S. at 176). By excising this phrase from Bennett and quoting
it out of context, the counties have twisted its meaning. The full passage states:
Whether a plaintiff’s interest is “arguably . . . protected . . . by the statute” within the meaning of the zone-of-interests test is to be determined not by reference to the overall purpose of the Act in question (here, species preservation), but by reference to the particular provision of law upon which the plaintiff relies. It is difficult to understand how the Ninth Circuit could have failed to see this from our cases. In Data Processing itself, for example, we did not require that the plaintiffs’ suit vindicate the overall purpose of the Bank Service Corporation Act of 1962, but found it sufficient that their commercial interest was sought to be protected by the anticompetition limitation contained in § 4 of the Act—the specific provision which they alleged had been violated. [See Data Processing, 397 U.S. at 155–56]. As we said with the utmost clarity in [Lujan v. National Wildlife Federation], “the plaintiff must establish that the injury he complains of . . . falls within the ‘zone of interests’ sought to be protected by the statutory provision whose violation forms the legal basis for his complaint.” [497 U.S. 871, 883 (1990)].
Bennett, 520 U.S. at 176 (emphasis omitted). Read in context, the passage calls on a court
to consider the zone-of-interests protected by the particular provision in question, while
not rejecting a zone-of-interests argument based on a general sense of what the overall
statute is for. By analogy to Bennett, the plaintiffs do not have to show that they are
protecting taxpayers, as the counties argue, to fall within the zone of interests protected by
the Uniformity Clause and the True Value Statute. It is enough that the plaintiffs seek to
vindicate an interest in uniformity (for purposes of the Uniformity Clause) and an interest
in having property assessed at its present fair market value (for purposes of the True Value
Statute). They do, because both interests are critical to the proper functioning of the system
that generates nearly one third of the funding for Delaware’s public schools.
Equally important, and contrary to the counties’ reading of Bennett, a court is not
precluded from considering the overall purpose of a broader act when considering the zone
136 of interests that a particular provision arguably covers. The Supreme Court of the United
States has held expressly that when conducting this inquiry, a court is “not limited to
considering the statute under which [the plaintiff] sued, but may consider any provision
that helps us understand [the] overall purposes [of the act].” Clarke, 479 U.S. at 401. In the
course of its analysis, the Clarke court considered related statutory provisions that were
enacted at different times. See id. at 401–02. That is precisely what the plaintiffs do here
when drawing the obvious connection between the property tax system and the funding of
Delaware’s public schools.
In an effort to prevent the plaintiffs from identifying the clear connection between
property taxes and school funding, the counties argue that a court can only consider
separate statutory provisions under the zone-of-interests test if they have an “‘integral
relationship.’” Dkt. 223 at 46 (quoting Air Courier Conference of Am. v. Am. Postal
Workers Union, AFL-CIO, 498 U.S. 517, 530 (1991)). They further argue that to determine
whether provisions have an integral relationship, a court should consider “‘[1] whether
both provisions address similar subject matter, [2] whether legislative history reveals that
they share a common purpose, and [3] whether they are located in a common section or
subsection of the act.’” Dkt. 223 at 46 (quoting Programmers Guild, Inc. v. Chertoff, 338
F. App’x 239, 242 (3d Cir. 2009)).41 The counties argue that the Uniformity Clause and the
41 The Programmers Guild opinion was an unpublished decision written “solely for the benefit of the parties.” 338 F. App’x at 240. The Court identified the three elements that the counties enumerate as “[f]actors to consider,” not as an exclusive test. Id. at 242. The Court noted that “[t]he plaintiff need not show that Congress intended him, in particular, to benefit from the provision.” Id. The Court also reiterated the admonishment 137 True Value Statute address taxation, not education funding. They point out that the
Uniformity Clause was enacted in 1897 and does not appear in the section of the Delaware
Constitution addressing education. They likewise point out that the True Value Statute
codified separate provisions for each county that had been enacted in 1915, 1917, and 1920,
and that it was in the next year—1921—that the General Assembly enacted the provisions
that call for school districts to use the county assessments for local school taxes.42 The Full
Value Formula for Equalization Funding had its origins in a later statute enacted in 1949.43
The counties observe that the True Value Statute is not in the same title of the Delaware
Code as the provisions that call for school districts to use the county assessments for local
school taxes. See Dkt. 223 at 47–48.
If anything, the General Assembly’s decision in 1921 to require school districts to
use the county assessments for local school taxes, just one year after completing the
enactment of county-specific legislation imposing a true-value requirement on each
that the zone-of-interests test is “‘not meant to be especially demanding.’” Id. (quoting Clarke, 479 U.S. at 399). 42 Compare 28 Del. Laws ch. 79, § 23 (1915) (codifying for Sussex County provision stating that “[a]ll property . . . shall be assessed at its true value true in money.”), and 29 Del. Laws ch. 72, § 25 (1917) (codifying for New Castle County provision stating that “[a]ll property [in New Castle County] . . . shall be assessed at its true value in money.”), and 31 Del. Laws ch. 14, § 8 (1920) (codifying for Kent County provision stating that “[a]ll property . . . shall be assessed at its true value in money.”), with 32 Del. Laws ch. 160, § 54 (1921) (requiring local school taxes to use county assessments). 43 See 47 Del. Laws ch. 364, § 2.C & D (1949) (providing early version of equalization funding).
138 county, suggests a close linkage between the two. The counties’ arguments and
observations also do not undermine the obvious fact that the General Assembly built
Delaware’s system for funding its public schools on the legal infrastructure for property
tax assessment and collection. In light of the obvious linkage between the system for local
school taxes and the system of property tax assessment and collection, the fact that the
provisions appear in different titles is not dispositive.
By grafting Delaware’s system for funding its public schools onto its system for
property tax assessment and collection, the General Assembly necessarily incorporated the
guarantees of fairness that were part of that scheme, including the Uniformity Clause and
the True Value Statute. The General Assembly plainly intended that local school taxes
would be levied and collected in a uniform manner, consistent with the Uniformity Clause,
and that assessments for local school taxes would be pegged to present fair market value,
consistent with the True Value Statute. It is more than plausible that when local school
taxes are not being levied and collected in a uniform manner, and when property
assessments for local school taxes are not pegged to present fair market value, that the
resulting violations arguably fall within the zone of interests protected by the Uniformity
Clause and the True Value Statute.
5. The Relationship Between The DEO’s Purpose And This Litigation
For an organization to be able to sue on behalf of its members, the interests to be
protected by the suit must be “germane to the organization’s purpose.” Oceanport, 636
A.2d at 902. “The question whether one’s interest is germane is ‘undemanding’ and
requires only ‘mere pertinence between the litigation subject and organizational purpose.’”
139 Id. (quoting Humane Soc’y of U.S. v. Hodel, 840 A.2d 45, 58 (D.C. Cir. 1988)). This test
establishes “a weak standard, barring only those whose litigation goals and organization’s
purpose are totally unrelated.” Id.
In Oceanport, the Delaware Supreme Court held that Wilmington Stevedores, Inc.
(“WSI”), a company engaged in the stevedoring business at the Port of Wilmington, met
this test for purposes of challenging a decision that resulted in the Secretary of the
Department of Natural Resources and Environmental Control (“DNREC”) permitting
Oceanport Industries, Inc. to operate a docking facility on the Delaware River. See id. at
897–98. The high court observed that “[a]rguably, a purpose, if not duty, of WSI is to
protect its employees from injurious environmental conditions,” holding that this
connection “satisfies this part of the test.” Id. at 902.
The DEO’s members joined together to improve Delaware’s educational system “so
that all children may obtain an adequate education regardless of where they live, their
economic circumstances, their health, their disability status or their first language.” JX 58
at 221. Pursuing this litigation falls squarely within the DEO’s organizational purpose.
6. The Need For Participation By Individual Members Of The DEO
Finally, an organization can sue on behalf of its members if “neither the claim
asserted nor the relief requested requires the participation of individual members.”
Oceanport, 636 A.2d at 902. The Delaware Supreme Court held in Oceanport that WSI,
the stevedoring company that sought to challenge a decision permitting a competitor to
operate a new docking facility, had satisfied this test where it “challenged the issuance of
permits, the ultimate objective of which is to ensure that the Secretary [of DNREC] has
140 lawfully complied with his duties.” Id. The high court noted that WSI’s employees were
“not needed to testify in the case or otherwise participate to allow the court to adjudicate
the issues on their merits.” Id. The high court also observed that WSI was “not claiming
monetary damages, or seeking other relief in which its employees would be actively
affected by a positive disposition.” Id.
The same is true here. The DEO’s members are not necessary parties. The evidence
needed to determine whether the counties are violating their statutory and constitutional
obligations primarily came from the counties’ own documents, most notably the tax
assessments that they have been using for over thirty years. Other than to establish
standing, evidence from individual DEO members was not required.
7. The Conclusion Regarding The DEO’s Standing
The DEO has standing to assert claims against the counties for violating the
Uniformity Clause and the True Value Statute. The counties’ objections to the DEO’s
standing lack merit.
D. The NAACP-DE’s Standing To Sue
The NAACP-DE asserts standing to sue in its own right for injury it has suffered as
an organization. The NAACP-DE has made the necessary showing. It is not a mere
intermeddler. Stuart Kingston, 596 A.2d at 1382. It is an organization with a longstanding
commitment to equity in education and an established track record of securing relief for
disadvantaged individuals.
141 1. The NAACP-DE’s Injury
To establish standing to sue in its own right, the organization must establish “some
injury to its own interests.” Oceanport, 636 A.2d at 903. An organization can establish an
injury in fact by identifying a pecuniary loss attributable to the defendant’s conduct or by
showing that the likelihood of a contingent loss “will be appreciably increased.” Id. at 905.
An organization can also rely on a non-pecuniary injury, as long as the injury “actually
affect[s] the plaintiff in a personal and individual manner.” Id.
Organizations have been held to have a sufficient “stake in the outcome of the
controversy” to support standing when the organization had to divert resources to a
controversy or where the organization suffered reputational harm as a result of the
controversy’s existence.44 There is no requirement that the organization quantify the
amount of harm it has suffered. See Crawford v. Marion Cty. Election Bd., 472 F.3d 949,
951 (7th Cir. 2007) (“The fact that the added cost has not been estimated and may be slight
does not affect standing, which requires only a minimal showing of injury.”).45
44 Havens Realty Corp. v. Coleman, 455 U.S. 363, 378 (1982); see Shukh v. Seagate Tech., LLC, 803 F.3d 659, 663 (Fed. Cir. 2015); Nat’l Collegiate Athletic Ass’n v. Governor of N.J., 730 F.3d 208, 220–22 (3d Cir. 2013), abrogated on other grounds by Murphy, 138 S. Ct. at 1461; Fair Hous. Council of Suburban Phila. v. Montgomery Newspapers, 141 F.3d 71, 78–79 (3d Cir. 1998). 45 As with the zone-of-interests test, the counties rely on a battery of recent federal court decisions that have tightened the injury-in-fact requirements for organizations to establish standing. See Dkt. 223 at 20–33. The parties agree that the Delaware Supreme Court has not yet adopted any of these approaches. See Dkt. 223 at 19; Dkt. 306 at 38. This decision hews to Gannett, Oceanport, and Dover Historical Society, which took a more permissive approach to organizational standing.
142 The mission of NAACP-DE and its national affiliate is to advance the cause of
fairness and justice for people of color throughout the country. Achieving educational
equity has always been part of that endeavor. Street testified credibly that the NAACP-DE
has diverted resources from other activities so that it could pursue its efforts to obtain
equitable funding in the area of education. If the public schools had been better funded,
then NAACP-DE could have devoted time and effort to other civil rights issues. Street also
testified credibly that the NAACP-DE has suffered reputational harm because of the
persistent inadequacy of school funding in Delaware. Because of NAACP-DE’s historic
and longstanding involvement in the educational system, including its advocacy for school
desegregation, people regard the NAACP-DE as bearing a share of the responsibility for
the state of Delaware’s schools.46
The counties’ failure to comply with the Uniformity Clause and the True Value
Statute harms Delaware’s public schools. The inadequacies of Delaware’s public schools
in turn harm the reputation of NAACP-DE and force the organization to deploy resources
in an effort to remedy problems with Delaware’s public schools. Through this lawsuit,
NAACP-DE seeks to address a longstanding problem with the funding of Delaware’s
public schools: the absence of a fair and equitable system of property tax assessment. The
46 Relying on recent standing decisions from federal courts that have tightened the requirements for organizational standing, the counties argue that Street’s testimony was not sufficient. See Dkt. 223 at 21–25. Here again, this decision hews to Gannett, Oceanport, and Dover Historical Society, rather than adopting the more stringent federal standards that are now ascendant.
143 General Assembly recognized that problem when it established the 2008 Reassessment
Committee, the committee then recognized it in its report, and the Equalization Committee
recognized it in its reports in 2016, 2017, and 2018. The NAACP-DE therefore can sue
under the doctrine of organizational standing.
2. The Zone Of Interests For The NAACP-DE’s Claims
To establish standing, an organization must also show that the claim it wishes to
assert meets the zone-of-interests test. See Dover Historical Soc’y, 838 A.2d at 1110. The
counties maintain that the NAACP-DE lacks standing to assert claims under the Uniformity
Clause and the True Value Statute because those provisions have nothing to do with
education. This decision has already rejected that argument. See Part III.C.4, supra.
E. Policy-Based Standing
Finally, the plaintiffs contend that they have standing as appropriate parties to raise
constitutional and statutory issues of substantial public importance, whose impact on the
law is real, and where the ongoing violations are likely to continue and to evade judicial
review. This doctrine is only invoked rarely and in exceptional cases, but this is such a
case. The doctrine applies with particular salience because the counties’ failure to comply
with the applicable constitutional and statutory requirements is effectively undisputed, and
the counties have made clear that absent a determination by the Delaware courts, they
intend to continue violating the law.
In rare situations, Delaware courts have issued rulings even though the traditional
requirements for standing were not met. One example involves the ability of a citizen or
taxpayer in Delaware to petition for a writ of mandamus to enforce a public duty, without
144 needing to show a special interest in the result of the proceeding or otherwise meet the
traditional requirements of standing.47 Another example is when an issue has been rendered
moot, depriving the court of a proper case or controversy, but where the court may render
a decision “where the question is of public importance, and its impact on the law is real.”48
As this court held previously, the plaintiffs in this case could not seek a writ of
mandamus because for that writ to be available, the duty that the plaintiff seeks to enforce
“must be nondiscretionary or ministerial, meaning that it is prescribed with such precision
and certainty that nothing is left to discretion of judgment.” DEO I, 2018 WL 4849935, at
*6 (internal quotation marks omitted) (quoting Brittingham v. Town of Georgetown, 113
A.3d 519, 524 (Del. 2015)). This court explained that
[a] writ of mandamus would not be available in this case. As the County Defendants elsewhere recognize, the Delaware Code does not require that counties conduct general assessments on any regular schedule. If the Delaware Code required that a county conduct a general assessment every year, or on a specific schedule, then a petition for mandamus might be viable.
47 See State ex rel. Biggs v. Corley, 172 A. 415, 417 (Del. 1934) (in banc) (permitting citizen and taxpayer to seek a writ of mandamus “to procure the enforcement of public duties” and explaining that “[n]o special interest in the result of the proceedings need be shown” because “[i]t is sufficient that the relator is a citizen and, as such, interested in the enforcement of the laws”); Hawkins v. Dougherty, 18 A. 951, 952 (Del. 1980) (holding that member of public had sufficient interest to petition to force tax collector to comply with the law); see also Plumbers & Pipefitters Local Union 74 v. Gordon, 2000 WL 1152434, at *1 (Del. 2000) (TABLE) (holding that union lacked organizational standing but remanding because “it does not necessarily follow that its members, in their capacity as citizens and taxpayers, also lack standing” and noting that “[c]itizens have an interest in the enforcement of our laws and the writ of mandamus may be used to procure the enforcement of public duties” (internal quotation marks omitted)). 48 McDermott Inc. v. Lewis, 531 A.2d 206, 211 (Del. 1987); see Darby v. New Castle Gunning Bedford Educ. Ass’n, 336 A.2d 209, 209 n.1 (Del. 1975).
145 But the General Assembly did not prescribe a specific schedule for conducting general assessments. It chose instead to leave the matter to the judgment of the leaders of each county with the expectation that they would take the steps necessary to comply with the [True Value Statute]. A writ of mandamus directing the counties to conduct general assessments could not issue.
Id. Lacking the ability to seek a writ of mandamus, the plaintiffs in this case “made a classic
appeal to the powers of equity.” Id. at *7.
Although this case does not involve a writ of mandamus, and although the plaintiffs
could not have sought one, the issue for purposes of standing is much the same: the failure
of public officials to comply with established constitutional and legal requirements. The
counties’ failure to comply with the True Value Statute and the Uniformity Clause is all
but conceded, yet the counties have made clear that absent a determination by the Delaware
courts, they will continue violating the law by persisting in using the indefinite-base-year
method of assessment. This is a case in which the City of Wilmington, the DEO, and the
NAACP-DE should have standing to sue to enforce the counties’ public duties. None are
mere intermeddlers. All are legitimately concerned that the counties have become and
intend to remain tax-assessment scofflaws.
This matter is also a dispute that otherwise would likely evade review. From time
to time, individual property owners have challenged the staleness of their property
assessments in tax appeals, but in those cases, the Uniformity Clause operates to foreclose
any single property owner from obtaining a valuation different than what the indefinite-
146 base-year method generates.49 An individual plaintiff might theoretically sue on a class-
wide basis, but it would take a brave and civic-minded person to assert the claim. New
Castle County has estimated that after a general assessment, approximately half of property
owners would have their taxes go up. See JX 76 at 10–15. Few people like having their
taxes raised, and it is hard to imagine an individual suing to fix a dysfunctional system
when the outcome could irritate as many as half of her fellow property owners. The
NAACP-DE and the DEO have more systemic interests, such as restoring the integrity of
the school-funding mechanism and protecting the interests of minors who are
disadvantaged by the current system. They are therefore willing to bring and litigate
statutory and constitutional violations that otherwise would go unchallenged. The City of
Wilmington is likewise uniquely situated to press claims against New Castle County based
on the county’s failures to fulfill its obligations under the Assessment Roll Statutes, the
True Value Statute, and the Uniformity Clause.
“[L]aw and order exist for the purpose of establishing justice and . . . when they fail
in this purpose they become the dangerously structured dams that block the flow of social
progress.” Martin Luther King, Jr., Why We Can’t Wait 73 (Penguin Books 2000) (1963).
49 See, e.g., Commerce Assocs. v. New Castle Cty. Office of Assessment, 2016 WL 3457820, at *8 (Del. Super. Apr. 1, 2016), rev’d on other grounds, 159 A.3d at 1209; Shahin v. City of Dover Bd. of Assessment Appeals, 2016 WL 520996, at *2 (Del. Super. Jan. 22, 2016), aff’d, 149 A.3d 227 (Del. 2016) (TABLE); RRHC Wilm., LLC v. New Castle Cty. Office of Finance, 2014 WL 2538886, at *8–9 (Del. Super. May 30, 2014), aff’d 108 A.3d 1226 (Del. 2015) (TABLE); Bailey v. Bd. of Assessment Review Dept. of Land Use, 2004 WL 1965867, at *5 (Del. Super. Aug. 19, 2004).
147 This same is true for justiciability doctrines like standing. Other states have recognized a
public interest exception to standing doctrine.50 To the extent this decision has reasoned
incorrectly and the plaintiffs lack standing under traditional Delaware standing doctrine,
they have standing as appropriate parties to raise constitutional and statutory issues of
substantial public importance, whose impact on the law is real, and where the ongoing
violations are likely to continue and to evade judicial review.
IV. CONCLUSION
Sussex County, Kent County, and New Castle County use assessment
methodologies that violate the True Value Statute and the Uniformity Clause. New Castle
County’s assessment methodology also violates the Assessment Roll Statutes. New Castle
County’s assessment methodology does not violate the Same Rate Statute.
50 See, e.g., Schwartz v. Lopez, 382 P.3d 886, 894–95 (Nev. 2016) (holding that parents of children had standing to assert challenge under state constitution to educational spending account program where (i) the issue was of “significant public importance,” (ii) the plaintiff contended that a legislative expenditure or appropriation violated a specific provision of the state constitution, and (iii) there was “no one else in a better position who will likely bring an action” and the plaintiff was “capable of fully advocating his or her position in court”); S.C. Pub. Interest Found. v. S.C. Dept. of Transp., 804 S.E.2d 854, 858 (S.C. 2017) (permitting a plaintiff to sue under the doctrine of “public importance standing,” which is intended to “allow interested citizens a right of action in our judicial system when issues are of significant public importance to ensure accountability and the concomitant integrity of government action” (internal quotation marks and alterations omitted)); Utah Chapter of Sierra Club v. Utah Air Quality Bd., 148 P.3d 960, 972 (Utah 2006) (holding that a party has “alternative standing” when it is able to show that it is “an appropriate party raising issues of significant public importance”); see also State ex rel. Bronster v. Yoshina, 932 P.2d 316, 322 (Haw. 1997) (“Given the significant public importance of this issue, which is likely, if not certain, to recur, we hold that the attorney general has standing to raise the claims in this action.”). See generally Dimanno, supra, at 664–77.
148 The City of Wilmington has standing to assert its claims as an organization that has
been injured by New Castle County’s violations and as parens patriae. The NAACP-DE
has standing to assert its claims as an organization that has been injured by the counties’
violations. The DEO has standing to assert its claims as an association of individuals who
would otherwise have standing to assert its claims. Even if the plaintiffs did not have
standing under traditional standing doctrines, all three have standing to sue as appropriate
parties to raise constitutional and statutory issues of substantial public importance, whose
impact on the law is real, and where the ongoing violations are likely to continue and to
evade judicial review.
This decision addresses only the merits of the plaintiffs’ claims. It does not address
the remedy, which must await further proceedings. Within forty-five days, the parties shall
submit a scheduling order to govern the remedial phase.
Related
Cite This Page — Counsel Stack
In re Delaware Public Schools Litigation, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-delaware-public-schools-litigation-delch-2020.