Global Leadership Foundation v. City of New York

Background

Global Leadership Foundation (GLF) brought constitutional claims against the City of New York and other defendants concerning the assessment of property taxes on one of GLF’s properties. GLF alleged that the defendants denied its requested exemption for charitable use and significantly increased the property’s assessed value. GLF claimed these actions were retaliation for its founders’ opposition to a development plan that displaced one founder’s business in 2018. GLF also alleged that the defendants treated it differently from religious organizations that routinely received property-tax exemptions without close scrutiny. GLF sought damages and a declaration that the defendants’ conduct was unlawful.

On July 15, 2022, the court dismissed the case for lack of subject-matter jurisdiction, meaning the federal court concluded that it lacked authority to hear the claims. The court relied on the Tax Injunction Act and the related comity doctrine. Those legal rules generally bar federal courts from hearing claims challenging state-tax assessments when the state provides a plain, speedy, and efficient remedy. Judgment was entered on July 18, 2022.

Motion to Set Aside the Judgment

GLF moved on August 11, 2022, to set aside the judgment. Although GLF brought the motion under Federal Rule of Civil Procedure 59(e), the court treated it under the strict standards applicable to motions for reconsideration. Relief is generally available only when there has been a controlling change in the law, new evidence has become available, or the court needs to correct a clear error or prevent manifest injustice.

GLF argued that the July 15 decision improperly relied on facts outside the pleadings. In particular, GLF objected to the court’s consideration of the fact that GLF had amended its state-court property-tax petition about two years after filing it and that oral argument had since occurred. GLF also submitted a declaration describing its legal and administrative challenges to the property assessment.

Court’s Analysis

The court rejected GLF’s challenge. When deciding subject-matter jurisdiction based only on a complaint’s allegations, a court generally accepts the complaint’s material factual allegations as true and draws reasonable inferences for the plaintiff. But courts may take judicial notice—meaning they may consider certain facts from public records—of docket sheets and documents filed in court. The court therefore concluded that it was proper to consider the undisputed facts about GLF’s state-court proceeding.

The court also held that those facts were not necessary to the jurisdictional ruling. New York provides several remedies for constitutional challenges to property taxes, and the Second Circuit has held that those remedies satisfy the requirements of the Tax Injunction Act and the comity doctrine. The court stated that GLF could pursue other remedies, including a civil-rights action under Section 1983 in state court, that could provide the forms of relief GLF sought. GLF’s failure to pursue those state remedies did not allow it to bring the claims in federal court.

Disposition

Judge Denise Cote denied GLF’s August 11, 2022 motion to set aside the judgment. The judgment dismissing the case for lack of subject-matter jurisdiction therefore remained in place.