Pan v. City of Niagara Falls: Federal Limits on §1983 Claims – Sovereign Immunity, Tax Injunction Act, and the Class-of-One Equal Protection Doctrine

Introduction

Pan v. City of Niagara Falls, decided by the Second Circuit on April 22, 2025, arises from pro se plaintiff Raymond C. Pan’s challenge under 42 U.S.C. § 1983 and New York state tort law. Pan alleged that the City of Niagara Falls, Niagara County, the Niagara Falls Water Board, and the State of New York (collectively, “the municipal and state defendants”) imposed unfair real-property taxes and selectively enforced the municipal building code against him, purportedly on account of his race and without a rational basis. The district court dismissed his amended complaint as frivolous and denied reconsideration. On appeal, the Second Circuit affirmed in part, vacated in part, and remanded for limited further proceedings.

Summary of the Judgment

The Second Circuit panel, speaking through Judge Lynch, held:

Claims for damages against the State of New York were barred by state sovereign immunity.
Claims seeking declaratory or injunctive relief against the State were also barred because Pan failed to name individual state officers and sovereign immunity cannot be evaded by such remedies against the state itself.
Pan’s § 1983 claims relating to unfair taxation were barred by the Tax Injunction Act (28 U.S.C. § 1341) and the comity principle, as New York provides adequate state court remedies for property-tax disputes.
Pan’s § 1983 equal protection claims failed to state a claim under either a race-based theory or the class-of-one theory, but the court vacated dismissal of the latter as it might be curable by amendment.
State-law tort claims were dismissed for failure to plead compliance with New York’s notice-of-claim requirement.
The denial of reconsideration was not an abuse of discretion.

The court affirmed the district court’s judgment in all respects except for the dismissal of Pan’s non-tax, class-of-one equal protection claim, which was vacated and remanded so Pan could be given an opportunity to amend.

Analysis

1. Precedents Cited

McEachin v. McGuinnis, 357 F.3d 197 (2d Cir. 2004) – Governs de novo review of dismissals under 28 U.S.C. §§ 1915A and 1915(e)(2)(B).
Van Buskirk v. United Group of Cos., 935 F.3d 49 (2d Cir. 2019) – Standard for reviewing denials of motions for reconsideration (abuse of discretion).
CSX Transportation, Inc. v. New York State Office of Real Property Services, 306 F.3d 87 (2d Cir. 2002) – State sovereign immunity under § 1983.
Trotman v. Palisades Interstate Park Commission, 557 F.2d 35 (2d Cir. 1977) – New York has not waived immunity from § 1983 suits.
Dube v. State University of New York, 900 F.2d 587 (2d Cir. 1990) – Congress did not abrogate state sovereign immunity under § 1983.
Verizon Md., Inc. v. Public Service Commission of Maryland, 535 U.S. 635 (2002) – Prospective relief exception to sovereign immunity.
Santiago v. New York State Department of Correctional Services, 945 F.2d 25 (2d Cir. 1991) – Must name state officers to invoke prospective relief exception.
P.R. Aqueduct & Sewer Authority v. Metcalf & Eddy, Inc., 506 U.S. 139 (1993) – Prospective relief exception does not apply to the state or state agencies.
Long Island Lighting Co. v. Town of Brookhaven, 889 F.2d 428 (2d Cir. 1989) – Tax Injunction Act and comity bar federal adjudication of state tax disputes.
Village of Willowbrook v. Olech, 528 U.S. 562 (2000) – Class-of-one equal protection standard.
Hu v. City of New York, 927 F.3d 81 (2d Cir. 2019) – “Prima facie identical” comparator requirement in class-of-one claims.
Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252 (1977) – Racially discriminatory intent standard under the Equal Protection Clause.
Hardy v. New York City Health & Hospitals Corp., 164 F.3d 789 (2d Cir. 1999) – State notice-of-claim statutes apply in federal court to state-law claims.

2. Legal Reasoning

The court’s reasoning proceeds in sequential steps:

Sovereign Immunity: Under the Eleventh Amendment and rooted in long-standing precedent, New York has not waived immunity from § 1983 suits, and Congress has not validly abrogated it. Pan’s claims for damages or relief against the State were thus dismissed.
Prospective Relief Exception: Although prospective remedies against state officers may bypass sovereign immunity, Pan failed to name any state officer. Sovereign immunity extends to all forms of relief when the state or its agencies are named directly.
Tax Injunction Act & Comity: Federal courts lack jurisdiction to enjoin state tax enforcement or award damages for purported wrongful taxation when the taxpayer has access to adequate state judicial remedies. Pan neither contested the availability of New York’s remedies nor showed they were inadequate, so his § 1983 tax claims were barred.
Equal Protection Claims:
- Race-based theory: Pan’s bare assertions of differential treatment were insufficient to allege discriminatory intent under the Arlington Heights framework.
- Class-of-one theory: Although Pan alleged he was singled out for stricter code-enforcement requirements than unspecified others, he did not identify any comparator “prima facie identical” to him or show the enforcement disparity could not be a mistake. Nonetheless, because class-of-one allegations can sometimes be cured by more detailed facts, the court remanded to allow amendment.
State-Law Tort Claims: Under New York law, notice-of-claim is a condition precedent against municipal defendants. Pan failed to allege timely service of such a notice, requiring dismissal.
Reconsideration Standard: Reconsideration is an “extraordinary remedy.” Pan pointed to no overlooked controlling authority, so denial was not an abuse of discretion.

3. Impact

This decision reinforces several critical limits on federal § 1983 practice:

Sovereign Immunity Vigilance: Plaintiffs must carefully plead around Eleventh Amendment constraints, including naming individual officers for prospective relief.
Tax Injunction Act and Comity: Federal courts will continue to defer to state tax courts when state remedies are adequate, preserving federal-state comity.
Class-of-One Clarity: The “prima facie identical” comparator requirement remains a high bar; pleadings must identify actual comparators and explain why differential treatment cannot be a mistake.
Notice-of-Claim Compliance: Pro se litigants in federal court suing municipalities on state tort theories must still comply with stringent notice requirements under state law.

Future litigants and lower courts will look to Pan for guidance on pleading around sovereign immunity, invoking the Tax Injunction Act, and properly stating class-of-one equal protection claims.

Complex Concepts Simplified

State Sovereign Immunity: Under the Eleventh Amendment, states cannot be sued for damages in federal court unless they consent or Congress validly overrides the immunity. § 1983 does not override New York’s immunity.
Prospective Relief Exception: Even if damages are barred, courts may grant injunctions or declaratory relief against individual state officials to stop ongoing violations of federal law—but not against the state itself.
Tax Injunction Act (28 U.S.C. § 1341): Federal courts cannot halt state tax assessments or collections if there is a “plain, speedy, and efficient” state remedy, to respect state sovereignty over taxation.
Comity Principle: A federal § 1983 claim for damages arising from state tax administration is blocked if the plaintiff could get a complete remedy in state court.
Class-of-One Equal Protection: A plaintiff must show he was singled out among truly identical comparators for no rational reason. Mere allegation of unequal treatment, without naming who was treated differently, is insufficient.
Notice-of-Claim Requirement: In New York, you must give municipalities written notice of a potential claim and wait at least 30 days before suing, or your state-law claims are dismissed.

Conclusion

Pan v. City of Niagara Falls reaffirms that federal courts strictly enforce sovereign immunity under § 1983 and respect state tax administration through the Tax Injunction Act and comity. It underscores the need for plaintiffs to plead with precision—naming proper defendants, defining adequate comparators in class-of-one claims, demonstrating inadequacy of state remedies, and complying with state notice rules. By vacating only the dismissal of Pan’s non-tax, class-of-one equal protection claim and remanding for possible amendment, the Second Circuit balanced procedural rigor with the policy of liberal amendment for pro se litigants. This decision will guide both practitioners and courts in navigating the intersection of federal civil rights jurisdiction and entrenched limits on federal encroachment into state governance.