Jerron West, Inc. v. California State Board of Equalization

Plaintiffs-appellants Jerry A. Hettinger, Ronald Smith, and Jerron West, Inc. (“the Corporation”) (collectively, “the Taxpayers”) appeal the district court’s dismissal for lack of jurisdiction of their 42 U.S.C. § 1983 action seeking to enjoin the California State Board of Equalization (“Board”) from conducting administrative tax collection proceedings against them for the assessment and collection of state sales tax. We affirm the district court’s dismissal because we hold that the Tax Injunction Act, 28 U.S.C. § 1341 , divests the federal courts of jurisdiction over this action.

I

Hettinger and Smith are the two principals of the Corporation. Each own 50% of the Corporation’s stock. In 1993, an employee left the Corporation and reported allegations of tax evasion by the Taxpayers to the IRS and the Board. Events followed which eventually led the Taxpayers to this court.

In May 1993, a government search of the Corporation’s premises under an uneontest-ed, valid warrant resulted in the confiscation of several volumes of records. After a lengthy investigation, the IRS Criminal In *1336 vestigation Division recommended criminal prosecution of Hettinger and Smith for various…