Before Mayer, Chief Judge, Archer, Senior Circuit Judge, and Lourie, Circuit Judge.
The opinion of the court was delivered by: Lourie, Circuit Judge.
Appealed from: United States District Court for the Northern District of Illinois Judge David H. Coar
The United States appeals from the decision of the United States District Court for the Northern District of Illinois transferring Counts III and V of Cook County's counterclaim to the United States Court of Federal Claims. See United States v. County of Cook, Illinois, No. 94-C-7068, at 3 (N.D. Ill. Nov. 14, 1997). Because 28 U.S.C. § 1500 bars jurisdiction in the Court of Federal Claims over the transferred claims, we reverse.
This lengthy litigation arises from Cook County's attempts to tax two federal office buildings located within the county. While detailed mastery of the facts and procedural history are not necessary to understand and resolve the legal issues presented in this appeal, we briefly set forth those details necessary to put the present dispute into context.
The office buildings at issue were constructed in the early 1970s pursuant to 40 U.S.C. § 602a, which authorized the United States' Administrator of General Services to enter into installment purchase contracts for the acquisition of federal buildings. The statute permitted state and local taxation of § 602a property until the date that title to the buildings formally passed to the government. See 40 U.S.C. § 602a(d) (1994). The title to both buildings did not pass to the United States until 1993.
In 1979, the Cook County Tax Assessor assessed property taxes against the buildings for certain prior tax years and eventually foreclosed on and sold the buildings when the United States failed to pay the taxes. The United States filed suit in federal district court seeking a declaration that the buildings were exempt from state taxation and an order vacating the sales of the buildings. On appeal, a panel of the Seventh Circuit affirmed the district court's declaration that the buildings were not subject to taxation because Illinois law exempted from local taxation property "that is being purchased by a governmental body under an installment contract . . . ." See United States v. County of Cook, Illinois, 725 F.2d 1128, 1130 (7th Cir. 1984) (quoting Ill. Rev. Stat. ch. 120, ¶ 500.9a), overruled-in-part by United States v. Hynes, 20 F.3d 1437 (7th Cir. 1994) (en banc).
In response to the Seventh Circuit's decision and in light of § 602a(d), the Illinois legislature in 1984 amended its statute to permit taxation when the "governmental body has permitted itself" to be taxed. See Ill. Rev. Stat. ch. 120, ¶ 500.9a (West 1992) (now codified at 35 Ill. Comp. Stat. 205/19.9a). Cook County thereafter assessed taxes against the buildings for certain tax years subsequent to 1984. The United States again filed suit, seeking a declaration that the amended statute was unconstitutional under the Supremacy Clause. The Seventh Circuit, sitting en banc, disagreed with the United States and held that the taxes had been constitutionally levied under the amended statute, in the process overruling a portion of the earlier panel's decision. See United States v. Hynes, 20 F.3d 1437, 1441 (7th Cir. 1994) (en banc) ("We therefore overrule County of Cook to the extent that taxing federal § 602a property while exempting similar property of state and local governmental bodies would be unconstitutionally discriminatory and that § 602a(d) is not a sufficient consent to such discriminatory taxation.").
After the Seventh Circuit's decision in Hynes, and after continued non-payment of the taxes, Cook County amended its pleadings in a related state court action to seek the issuance of tax deeds on the buildings in order to facilitate their sale. This prompted the United States to file the instant action in the Northern District of Illinois. This action sought declaratory and injunctive relief to prohibit the foreclosure sales of the buildings, and also sought a declaration that the United States is not liable for interest and penalties incurred with respect to the unpaid taxes.
Cook County filed a counterclaim constituting five separate counts, four of which are relevant here. *fn1 Count II sought taxes for tax years 1985-93, with interest. Count III sought "just compensation" and alleged that the United States' "repudiation" of its obligation to pay its taxes in 1985-93 constituted a taking actionable under the Fifth Amendment; this count also sought interest. *fn2 Counts IV and V were largely duplicative of counts II and III, respectively, except that they applied to tax years 1977-84. *fn3
Both parties moved for summary judgment. See United States v. County of Cook, Illinois, No. 94-C-7068 (N.D. Ill. Sept. 30, 1997). The district court, inter alia, granted the United States' motion for summary judgment and in the process dismissed all of Cook County's counterclaims, reasoning that Cook County could not assert counterclaims against the United States in district court without violating principles of sovereign immunity. See id. at 28-29 (citing United States v. Shaw, 309 U.S. 495 (1940) and United States v. United States Fidelity & Guaranty Co., 309 U.S. 506 (1940)); United States Fidelity & Guaranty, 309 U.S. at 512 ("In [Shaw] we hold that cross-claims against the United States are justiciable only in those courts where Congress has consented to their consideration."). The court also granted the United States the declaratory and injunctive relief it sought, holding that § 602a did not waive the United States' sovereign immunity against state foreclosure sales or penalties and interest accruing on taxes payable thereunder. See United States v. County of Cook, Illinois, No. 94-C-7068, at 22-27 (N.D. Ill. Sept. 30, 1997).
Cook County thereafter moved the district court to amend its judgment and to transfer Counts III and V to the Court of Federal Claims pursuant to 28 U.S.C. § 1631 (1994). The district court granted Cook County's request to transfer and otherwise reaffirmed the summary judgment for the United States on its claims and on the counterclaims that were not transferred. See United States v. County of Cook, Illinois, No. 94-C-7068, at 3 (N.D. Ill. Nov. 14, 1997). Cook County later appealed the entry of summary judgment against it to the Seventh Circuit, which reversed and reinstated Cook's claims. See United States v. County of Cook, Illinois, ___ F.3d ___, 1999 WL 50269 (7th Cir. Feb. 4, 1999).
The only issue before this court is the propriety of the district court's transfer order. We have jurisdiction to review this order pursuant to ...