Federal judges in Nevada reject challenge in tax dispute case

LAS VEGAS - A panel of federal judges in Nevada on Friday rejected a challenge of a Nevada Supreme Court decision that set aside a state constitutional amendment requiring a two-thirds majority vote on a tax plan.

In a unanimous decision, the seven justices found that the U.S. Supreme Court has held that ``district courts have no power to declare a ruling of a state supreme court violated provisions of the federal Constitution.''

The decision followed a historic Nevada Supreme Court ruling last week that temporarily set aside the two-thirds voting requirement, clearing the way for lawmakers to break through a tax impasse that has extended through one regular and two special sessions.

During a 90-minute hearing held Wednesday in U.S. District Court, lawyers for the state argued that the state high court has the final word on interpreting the Nevada Constitution and any appeal should be taken directly to the U.S. Supreme Court.

With the ruling, the federal judges dissolved a temporary restraining order issued Monday that prevented legislative action on an $800 million-plus tax plan unless a two-thirds majority was achieved.

``We are, of course, disappointed that the district court has lifted the injunction and dismissed the case on jurisdictional grounds,'' said John Eastman, director of The Claremont Institute Center for Constitutional Jurisprudence who represented the plaintiffs in the case.

Eastman said he plans to file an appeal with the 9th U.S. Circuit Court of Appeals.

In Friday's opinion, the federal judges left open the possibility that plaintiffs who are not lawmakers may refile their case in state court or in U.S. District Court.

A group of 24 Republicans from the Assembly and Senate, along with a host of Nevada residents, filed petitions seeking a preliminary injunction blocking lawmakers from passing a tax plan without a two-thirds vote.

The federal judges said the lawmakers were named in the state Supreme Court decision and were precluded from petitioning the U.S. District Court for relief.

``Because this court cannot grant the relief requested by the Legislator Plaintiffs without voiding the decision of the Nevada Supreme Court, subject matter jurisdiction to consider their claims is lacking,'' the judges wrote.

The U.S. District Court judges wrote in the opinion that the only federal court suitable to address the lawmakers' claims is the U.S. Supreme Court.

Republican Gov. Kenny Guinn, who favors higher taxes, had requested the state Supreme Court's intervention after legislators deadlocked on a tax plan needed to balance a nearly $5 billion two-year budget.

In the state Supreme Court ruling, justices ruled that a simple majority vote on a tax plan was acceptable since other constitutional mandates required a balanced budget and adequate funding for public schools.

``I'm not surprised. I never thought there was a federal question in the case,'' said Senate Minority Leader Dina Titus, D-Las Vegas. ``We're going to try to get two-thirds but if it means shutting down schools, then we will go with a simple majority and go home.''