Chase Manhattan Bank, N.A. v. City of San Francisco

The issue is whether the Tax Injunction Act, 28 U.S.C. § 1341 (“TIA”), bars this suit for a judgment declaring that an upward reassessment of value for San Francisco real-estate tax purposes is preempted by the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 (“ERISA”), where the reassessment adversely affects an ERISA plan. The district court held the TIA bars the action, and we affirm.

In 1986, the IBM Retirement Plan Trust Fund (“Plan”) purchased an annuity contract from Equitable Life Assurance Society of America (“Equitable”). As part of the contract, Equitable allocated a share of its interest in One Market Plaza Corporation into a separate account for the benefit of the Plan. Defendants City and County of San Francisco deemed this transfer a change in ownership under California law. See Cal. Rev. & Tax.Code §§ 60-69.3. This determination allowed them to reassess, upward, the property tax on One Market Plaza.

As trustee of the Plan, Chase Manhattan Bank (“Chase”), filed a complaint in district court seeking a declaratory judgment stating that the creation of the separate account could not amount to a change of ownership for California tax purposes, because…