UnitedStatesv.

CityofGlenCove,
LongIsland,NY,322F.Supp.149
(E.D.N.Y.1971)

U.S.DistrictCourtfortheEasternDistrictofNewYork322F.Supp.149
(E.D.N.Y.1971)
January7,1971

322F.Supp.149(1971)

UNITEDSTATESofAmerica,Plaintiff,
v.
CITYOFGLENCOVE,LONGISLAND,NEWYORKAndrew
J.DiPaola,MarvinL.Sutton,DavidQuient,Countyof
Nassau,"JohnDoe"and"MaryRoe,"Defendants.

No.70C1188.

UnitedStatesDistrictCourt,E.D.NewYork.

January7,1971.

*150EdwardR.Neaher,U.S.Atty.,E.D.N.Y.,Brooklyn,N.Y.,byJamesD.Porter,Jr.,
BruceF.Smith,CyrilHyman,Asst.U.S.Attys.,andBrunoA.Ristau,Chief,Foreign
LitigationUnit,Dept.ofJustice,ofcounsel,forplaintiff.

Morrison,Paul&Beiley,NewYorkCity,byElkanAbramowitz,NewYorkCity,of
counsel,JerradSiegel,DeputyCountyAtty.,CountyofNassau,Mineola,N.Y.,for
defendants.

MEMORANDUMOFDECISION

JUDD,DistrictJudge.

Inthisaction,triedtothecourtwithoutajury,theUnitedStatesseekstoenjointhe
defendantsfromassessinganytaxesagainstcertainpropertyownedbytheUnionof
SovietSocialistRepublics(USSR)intheCityofGlenCove,orproceedingwithanytax
salesofsuchproperty,andtorequirethatanytaxliensbedischargedofrecord.In
additiontotheCity,thedefendantsincludetheMayor,FinanceCommissionerandCity
Attorney.Thecomplaintisbasedontheassertionthatthepropertyisexemptfrom
taxationunderArticle21ofthe1968ConsularConventionbetweentheUnitedStates
andtheUSSR.14U.S.T.[4]5108,TIAS6503.Nocauseofactionwasestablished
againsttheCountyofNassau,andnosummonswasservedon"JohnDoe"or"Mary
Roe."

Thedefenseisbasedonquestionsofjurisdiction,standing,andthesufficiencyofproof
oftheexemptuseoftheproperty,plusanassertionthatthetaxlienattachedbeforethe
treatybecameeffective.Acounterclaimindefendants'answerseeksadeclaratory
judgmentthattheUnitedStatesmustcompensatetheCityofGlenCoveforitslossof
taxes.

Facts

Thepropertyinquestioncomprisesa37acreparcelintheCityofGlenCove,knownas
Killenworth,improvedwitha45roomhouse,anddescribedinthecomplaintasa
residenceofthePermanentRepresentativeoftheUSSRtotheUnitedNations(UN)and
hisdeputies.ItisconcededthatthepropertyhasbeenownedbyUSSRsince1955.

KillenworthwasonthetaxrollsoftheCityofGlenCovefrom1960to1966,andthe
taxesassessedagainstitthenwereultimatelypaidbytheUSSR.In1966,itwasremoved
fromthetaxrollsbyvoluntaryactionoftheCityofGlenCove,presumablyin
recognitionoftheexemptiongrantedunderNewYorkRealPropertyTaxLaw,
McKinney'sConsol.Laws,c.50A,418.In1968,thenewCommissionerofAssessment
andTaxationremovedtheexemptionandplacedthepropertyonthetaxrollforthe
1969citytaxandthe196970schooltax.HenotifiedtheUSSRbyletterdatedJune14,
1968thattheexemptstatushadbeenterminated,andtestifiedthatnoprotestwas
receivedbeforethestatutorygrievanceday,June18th.

Thetaxesnothavingbeenpaid,thecitydeclaredthemdelinquentonMay20,1970and
scheduledataxsaleofKillenworthtobeheldonJune26,1970.Thesalewaspostponed
byvoluntaryactionuntilSeptember28,1970,andhasbeenfurtherdeferredbya
temporaryrestrainingorderenteredwiththeconsentofthepartiesonSeptember23,
1970,andcontinuinguntilthefinaldeterminationofplaintiff'smotionforapreliminary
injunction.

Thehearingonthepreliminaryinjunctionwasconsolidatedwiththetrialonthemerits.

*151ThetaxrollwascompletedonMay21,1968andwasopenforpublicinspectionfor
threeweeksthereafter.Thereisnostatutoryobligationtonotifyapropertyownerofthe
assessmentorachangeinexemptstatus.ThetaxrolliscertifiedbytheCommissioner
ofTaxationandAssessmenttotheCommissionerofFinancewithinthirtydaysafterthe
June18thgrievanceday.Thetotalvalueoftaxablepropertyonthetaxrollisusedin
determiningtherealestatetaxrate,afterthebudgethasbeenadoptedonorbefore
October10thofeachyear.ThecitytaxesbecamedueonDecember1,1968andthe
schooltaxesonAugust1,1969,andbecameliensonthosedates.

TheonlyproofthatthepropertywasusedasaresidenceofUSSRdiplomatsconsistedof
threecertificatesfromtheUnitedStatesDepartmentofState.Thefirsttransmittedan
officialtranslationofanotefromthePermanentRepresentativeoftheUSSRtotheUN
handedtoAmbassadorCharlesW.Yost,ChiefofMissionoftheUnitedStatestotheUN,
onJune5,1970inNewYorkthisnoteassertedthattherealpropertywasused
exclusivelyasaresidenceforthePermanentRepresentativeoftheUSSRtotheUNand
hisdeputies,andrequestedtheassistanceoftheUnitedStatesMissioninputtingan
endtotheclaimsofGlenCove.

ThesecondwasacopyofatranslationofanotefromtheMinistryofForeignAffairsof
theUSSRtotheAmericanEmbassyinMoscowdatedJuly21,1970.Thissecondnote
repeatedthat

saidpropertyisusedasaresidenceofthePermanentRepresentativeofthe
USSRtotheUNandDeputiesofthePermanentRepresentativewiththe
 rankofAmbassadorsandMinistersoftheUnionofSovietSocialist
Republics.[*]

AfterreferringtotheagreementbetweentheUnitedNationsandtheUnitedStates
regardingtheheadquartersoftheUnitedNations,Section418oftheNewYorkReal
PropertyTaxLaw,andArticle21oftheConsularConvention,thenoteconcluded:

theMinistryinsiststhattheU.S.Governmenttakestepstoputanendtothe
unfoundedclaimsoftheGlenCovecityauthoritiesagainstthepropertyof
theUSSRMissiontotheUN.

ThethirdnotewasaletterdatedOctober16,1970fromU.AlexisJohnson,Under
SecretaryofStateforPoliticalAffairs,toAttorneyGeneralJohnN.Mitchell,tobe
insertedintherecordinthiscase,andstating,

TheDepartmentofStateacceptsastruethediplomaticrepresentationsof
theGovernmentoftheUnionofSovietSocialistRepublicsthatthereal
propertyownedbyitintheCityofGlenCoveisusedasaresidenceofits
PermanentRepresentativetotheUnitedNationsandhisdeputieshavingthe
rankofAmbassadororMinisteroftheUnionofSovietSocialistRepublics
andhasbeensousedduringtheperiodfollowingtheCity'srecognitionof
theproperty'staxexemptstatusin1966.

TheUnitedStatesinthisactionreliesonlyontheConsularConventionandnotonthe
UNHeadquartersAgreementortheNewYorkTaxLaw.

TheCommissionerofAssessmentandTaxationtestifiedthathisrevocationof
exemptionwasnotbasedonanychangeintheuseoftheproperty.

Theonlyotherfactwhichneedbesetforth,becauseofitsbearingonthecounterclaim,
isthatthetaxesinissueamounttoover$15,000.

*152TreatyProvision
Article21oftheConsularConventionof1968,14U.S.T.[4]5108,TIAS6503,provides:

1.Immovableproperty,situatedintheterritoryofthereceivingstate,of
whichthesendingstateoroneormorepersonsactinginitsbehalfisthe
ownerorlesseeandwhichisusedfordiplomaticorconsularpurposes,
includingresidencesforpersonnelattachedtothediplomaticandconsular
establishments,shallbeexemptfromtaxationofanykindimposedbythe
receivingstateoranyofitsstatesorlocalgovernmentsotherthansuchas
representpaymentsforspecificservicesrendered.

ThetreatytookeffectonJuly13,1968.

Itisnotdisputedthatthetreatyisbindingonthedefendantsas"thesupremeLawof
theLand"byvirtueofArticleVIoftheUnitedStatesConstitution.

DiscussionofLaw

1.JurisdictionandStanding

Jurisdictionisbasedon28U.S.C.A.1345,whichgivesdistrictcourtsoriginal
jurisdictionofallcivilactionscommencedbytheUnitedStates.

DefendantsassertthatSection1345doesnotapplybecausetheUnitedStateslacksany
pecuniaryinterestinthesubjectmatterandthereforeisnottherealpartyininterest.

IthasbeenlongestablishedthattheUnitedStatesneedhavenopecuniaryinterestin
ordertohavestandingtosue.InreDebs,158U.S.564,15S.Ct.900,39L.Ed.1092
(1894).Intheexerciseofitsconstitutionalresponsibilityfortheconductofforeign
affairs,theUnitedStatesmaysuetopreventstateactionwhichwouldviolateatreaty
obligationoftheUnitedStates.UnitedStatesv.Minnesota,270U.S.181,46S.Ct.298,
70L.Ed.539(1926)SanitaryDistrictv.UnitedStates,266U.S.405,45S.Ct.176,69L.
Ed.352(1925).
TheconductofforeignrelationswouldbehamperedandembarrassediftheUnited
StatesGovernmentwerepowerlesstorequireunitsoflocalgovernmenttocomplywith
treatyobligations,andifatreatycouldbeenforcedonlybytheforeigngovernment
makingitselfapartytolitigationbeforestateorfederalcourts.

Defendantsassertafurtherbartojurisdictiononthebasisof28U.S.C.A.1341,which
forbidsinjunctionsagainststatetaxes.Section1341providesthat:

Thedistrictcourtsshallnotenjoin,suspendorrestraintheassessment,levy
orcollectionofanytaxunderStatelawwhereaplain,speedyandefficient
remedymaybehadinthecourtsofsuchState.

However,Section1341hasbeenheldtobenobartojurisdictionofsuitsinstitutedby
theUnitedStates.SeeUnitedStatesv.ArlingtonCounty,326F.2d929(4thCir.1964)
UnitedStatesv.BureauofRevenue,291F.2d677(10thCir.1961)UnitedStatesv.
Woodworth,170F.2d1019(2dCir.1948).

TheabsenceofanypecuniaryinterestoftheUnitedStatesdoesnotmakeitsubjectto
thebarofSection1341inthiscase.Asuittoenjoincollectionofastatetaxfroman
individualmemberofthearmedforces,asaviolationofSection514oftheSoldiersand
SailorsCivilReliefActof1940,wassustainedintheArlingtonCountycase,wherethe
courtsaid(326F.2dat932933):

Therightofthefederalgovernmenttobringsuittoenforceitspoliciesand
programsevenintheabsenceofimmediatepecuniaryinteresthasbeen
upheldinnumerousotherfieldsoffederalactivity.

******

Herewefindthattheinterestofthenationalgovernmentintheproper
implementationofitspoliciesandprogramsinvolvingthenationaldefense
issuchastovestinitthenonstatutoryrighttomaintainthisaction.
*153Similarly,inDepartmentofEmploymentv.UnitedStates,385U.S.355,358359,
87S.Ct.464,467,17L.Ed.2d414(1966),theUnitedStateswaspermittedtosuein
federalcourttoenjointheenforcementofaColoradostatutetaxingtheAmerican
NationalRedCross,whichwasheldtobe"socloselyrelatedtogovernmentalactivityas
tobecomeataximmuneinstrumentality."

ThetaxexemptionmightberecognizedinNewYorkcourtsiftheUSSRsawfittoinvoke
theiraid.RepublicofArgentinav.CityofNewYork,25N.Y.2d252,303N.Y.S.2d644,
250N.E.2d698(1969).However,indealingwiththeenforcementofafederaltreaty
andtheprotectionofthehonoroftheUnitedStatesinmeetingitsobligations,afederal
courtisnotrequiredtoabstainfromjurisdictioninfavorofastatecourt.UnitedStates
v.Livingston,179F.Supp.9(E.D.S.C.1959).ThiscaseisnotlikeUnitedStatesv.Cityof
NewYork,175F.2d75(2dCir.1949),wherethequestionofthevalidityoftaxes
assessedagainstpropertyofavoluntaryhospitalaroseinthecontextofanagreementby
theUnitedStatestopaythehospitalafixedsumperyearplusthetaxeslegallyleviedon
theproperty.Noissueofcontroloverforeignaffairswasinvolvedinthatcase.

Thenationalgovernmenthasavitalinterestintheconductofforeignaffairsandthe
fulfillmentoftreatyobligations.Thiscase,therefore,fallswithinthejudicialexception
toSection1341,andthecourthasjurisdiction.

2.ProofofExemptUsageoftheProperty

TheDepartmentofStaterequestedtheUnitedStatesAttorneyGeneraltoplaceon
recordinthiscourtthattheStateDepartmentacceptedthetruthofUSSR's
representationsconcerningtheuseofKillenworthasaresidenceofitsdiplomatic
officialsaccreditedtotheUN.

Thepracticeofpresentingaclaimofsovereignimmunitytothecourtsthroughthe
ExecutiveDepartmentwasearlyrecognizedasaproperprocedure.TheSchooner
Exchangev.McFaddon,11U.S.(7Cranch)116,118,3L.Ed.287(1812).Whenaforeign
ambassadordepartedfromthispracticebyseekingdirectinterventioninanAmerican
court,theSupremeCourtsuggestedthatforeigngovernmentsshouldinsteadpresent
theirclaimsthroughtheExecutivebranchofthegovernment.TheNavemar,303U.S.
68,7475,58S.Ct.432,434435,82L.Ed.667(1938)cf.ExparteMuir,254U.S.522,
41S.Ct.185,65L.Ed.383(1921).

Thecaseonwhichdefendantsmainlyrelyisonewhereexecutiveapprovalofthe
communicationwasmissing.UnitedStatesexrel.Lindenauv.Watkins,73F.Supp.216,
224(S.D.N.Y.1947),reversedonothergrounds,subnom.UnitedStatesexrel.Paeteau
v.Watkins,164F.2d457(2dCir.1947).Theonlydocumentbeforethecourttherewasa
communicationfromtheMinistryofForeignAffairsofGuatemalatotheAmerican
AmbassadortoGuatemala,notauthenticatedbytheStateDepartment.

IndicationsthatStateDepartmentacceptanceofaforeigngovernment'sclaimsare
conclusiveontheissueofimmunitycanbefoundinTheNavemar,supra,wherethe
SupremeCourtsaid(303U.S.at74,58S.Ct.at434):

IftheclaimisrecognizedandallowedbytheExecutiveBranchofthe
government,itisthenthedutyofthecourtstoreleasethe[foreign]vessel
uponappropriatesuggestionbytheAttorneyGeneraloftheUnitedStates,or
otherofficeractingunderhisdirection.

Similarly,inExparteRepublicofPeru,318U.S.578,589,63S.Ct.793,800,87L.Ed.
1014(1943),thecourtstated:

Thecertificationandtherequestthatthevesselbedeclaredimmunemustbe
acceptedbythecourtsasaconclusivedeterminationbythepoliticalarmof
theGovernmentthatthecontinuedretentionofthevesselinterfereswiththe
properconductofourforeignrelations.

*154AmajorityofthecourttreatedaStateDepartmentacceptanceoffactsasevidence,
butnotconclusiveoftheissue,inSullivanv.StateofSaoPaulo,122F.2d355,357(2d
Cir.1941).JudgeLearnedHand,concurringintheresult,wouldhaveacceptedtheState
Department'srepresentationasconclusive,stating(p.361):

Certainly,iftheanswerdependsuponhowfarthesuitwillaffectforeign
relations,onlyourforeignofficeoughttodecideit.
Inacaseinvolvingaforeigngovernment'streatyrights,thecourtshouldacceptan
officialnotefromthatgovernmentasatleastprimafacieevidence,whenaccompanied
byaStateDepartmentcertificateofthetruthoftheassertionsinthenote.

ItisnotnecessaryheretoconsiderwhethertheStateDepartment'sacceptanceofthe
factthatKillenworthwasusedasaresidencebytheUSSRAmbassadortotheUNis
conclusive,forthedefendantsdidnotseektoofferanyevidencetothecontrary.Cross
examinationoftheUnderSecretaryofStatewouldnotbeausefulwaytodisprovethis
fact.TheCityofGlenCove,wherethepropertylies,hasaclearopportunitytoobserve
theusemadeoftheproperty,andshowwhethertherewasanonexemptuse.Ifthe
diplomaticimmunityofthepremisesandtheoccupantsinterfereswiththedefendants'
obtainingpreciseevidenceoftheactualusage,asmaybethecase,thismerely
emphasizesthatanyattempttochallengetheDepartmentofState'scertificationwould
impairthefederalgovernment'sconductofforeignrelations.

3.PriorityofLien

TheConsularTreatybecameeffectivebeforetheCityofGlenCoveadopteditsbudget
for1969orfixedthetaxrate.Thetestimonywasthatthecitytaxbecamealienon
December1,1968andtheschooltaxonJune1,1969(S.M.135),eventhoughthecity
assertsthatsomesortofinchoatelienattachedbeforethosedates.

Noneofthecasesonwhichdefendantsrelywouldpermitcollectingataxfromimmune
propertyundersuchcircumstances.InPrevostv.Greneaux,60U.S.(19How.)1,15L.
Ed.572(1856),thequestionwaswhetheraFrenchheircouldrelyonan1853treatyto
avoidpayinganinheritancetaxonpropertywhichhadpassedonthedeathofa
Louisianaresidentin1848.InUnitedStatesv.Alabama,313U.S.274,61S.Ct.1011,85
L.Ed.1327(1941),thestatestatuteimposedalienfor1937taxesasofOctober1,1936,
andthetractsinvolvedwerenotconveyedtotheUnitedStatesuntilOctober1,1936,
December10,1936,andMarch10,1937.ThecourtheldthattheUnitedStateswasnot
entitledtoanydifferentpositionfromthatofotherpurchasersoflandsinAlabamawho
takeconveyancesonandafterthespecifiedtaxdates.Nevertheless,thecourtheldthat
taxsalesmadewithouttheUnitedStatesconsentingtobeapartytotheproceedings
werevoidandshouldbesetaside.
IftheGlenCovelienattachedbeforeJuly13,1968,itmightbenecessarytoconsider
whethertaxexemptionwasalsograntedbySection418oftheNewYorkTaxLaworby
theUnitedNationsHeadquartersAgreement.Butitisclearherethattherewasnothing
morethananinchoatelien,atmost,beforetheConsularConventiontookeffect.

DefendantsassertthatKillenworth'sstatuswasfixedasnonexemptonJune1st.Real
Prop.TaxL.302.Thisdatawouldberelevantiftherehadbeenachangeofownership
afterJune1st,butitdoesnotpurporttocreateanylien.TheGlenCoveCharterspecifies
thattaxesbecomeliens"ontherespectivedayswhentheybecomedue."Sec.93.Inany
event,alienwhichisstillinchoatewillnotprevailoverarightcreatedbyfederallaw.
NewYorkv.Maclay,288U.S.290,53S.Ct.323,77L.Ed.754(1933).Muchlessshould
aforeigngovernmentbedeprivedofatreatybenefitbytheclaimthatamunicipal
governmentwithinthefederalstructurehaspowertopostponetherealization*155of
whatthetreatypromised.Treaties,afterall,arepartofthelawofeverystate.
Hauensteinv.Lynham,100U.S.483,490,25L.Ed.628(1879).

Thisisnotacasewhereamunicipalityhasbeentakenbysurprisebyanunexpected
removalofpropertyfromitstaxrolls.TheGlenCoveofficialsdeliberatelyterminatedan
exemptionwhichhadpreviouslybeenrecognized,withoutcitinganychangeof
circumstancesorotherreasontojustifytheiraction.

AsfortheprovisoinArticle21oftheConsularConvention,itisclearthatthetaxes
involvedwereforthegeneralsupportofthecitygovernmentandwerenot"payments
forspecificservicesrendered."

Theplaintiff'srighttoenjointheGlenCovetaxsalesisthereforefullyestablished.

4.Defendants'Counterclaim

Defendantspresentaningeniousargument,inassertingthattheUnitedStatesmust
compensatethecityforalossoftaxingpowerovertheKillenworthproperty.

Theruleisclear,however,thatpropertyownedbytheUnitedStatesisnotsubjectto
localtaxes.McCullochv.Maryland,17U.S.(4Wheat.)316,4L.Ed.579(1819).New
YorkexemptspropertyownedbytheUnitedStates,withoutattemptingtoexactany
compensationfortheexemption.RealProp.TaxL.400.
Theattempttotreatanexemptionfromlocaltaxationascreatinganobligationto
compensateforthelossoflocaltaxesfliesinthefaceofthisrule.PublicWaterSupply
DistrictNo.3v.UnitedStates,135F.Supp.887,133Ct.Cl.348(1955).Aswassaidin
thePublicWaterSupplyDistrictcase(135F.Supp.at890):

Whileitistruethatownershipoftangiblepropertyisnotalwaysessentialto
theestablishmentofatakingundertheFifthAmendment,theinterestmust
bemorethanamererighttotax.

Neitherfederalacquisitionofpropertynorfederalcreationofataxexemptionin
exerciseofconstitutionalpowerscanbeconditionedonanydutytomakecompensation
toaffectedstatesormunicipalities.

Defendants'counterclaiminanyeventisimproperlybrought,sincetheUnitedStatesis
notsubjecttosuitindistrictcourtsundertheTuckerActforamountsover$10,000
basedonnontortgrounds.28U.S.C.1346(a)(2).Toattempttocreatejurisdictionby
askingforadeclaratoryjudgmentofpecuniaryliabilitywithoutaformalmoney
judgmentisplainlyasubterfugetoescapethelimitsoftheTuckerAct.

TheCountyofNassau

ItwasconcededatthehearingsthattheCountyofNassauhasnoresponsibilityforthe
actsoftheotherdefendants,andwouldhavenopartintheconductofanytaxsales.

Conclusion

TheUnitedStatesisentitledtoaninjunctionasprayedinitscomplaintagainstthe
defendantswhowereserved,otherthantheCountyofNassau.Thecomplaintshouldbe
dismissedasagainsttheCountyofNassau.Thecounterclaimshouldbedismissedon
themerits.

Settlejudgmentonnotice.
NOTES

[*]Thestatementthatthedeputieshavetherankofambassadororministeris
apparentlymadewithreferencetothewordingoftheimmunityprovisionoftheUnited
NationsHeadquartersAgreementof1947(Pub.L.35780thCongr.,61Stat.756,15)
andtheexemptionprovisionoftheNewYorkstatutecited.Forpurposesofthe
ConsularConventionitissufficientthatthepropertybeusedasaresidenceby
"personnelattachedtothediplomaticandconsularestablishments."