rather alabama or any state can impose its general sales tax on diesel fuel used by railroads when i'd exhaust its major competitors from that very same tax and we know from c s x t two because it tells us that you are the eleventh circuit got it right on two issues last time we were in this courtroom number one is that in the supreme court has a that motor carriers and water carriers are the similarly situated members of this comparison class for this case and secondly dischord ruled and the supreme court is now a farmed that to tax you impose a sales tax and railroad fuel and not on his competitors constitutes discrimination it's facial discrimination that's been established this case is no longer about discrimination but this case and and the burden has shifted that shifted now to the defendants which is why they went first to trial the burden has shifted to them to show just occasion and that's what's left in the case in the end the supreme court said so the supreme court sent it back to this court on just two issues as to motor carriers rather an alternative roughly equivalent tax and they're relying on the motor fuel is taxed is a possible justification and secondly as to water carriers where there is no tax base justification what are the justification is can they establish so this case is no longer about the discrimination but just the question i'd like to turn first to the water carriers i'm sorry to the motor carriers the sole justification here is that alabama has about a fuels tax and it's roughly equivalent to the alabama sales tax imposed on road diesel fuel but one of the courts say about how to judge that rather quick points they didn't send you out in a skiff in uncharted waters because there's a well established precedent for decades in the supreme court and lower courts number two they cite they didn't say the test was assigned when they didn't or they didn't they tell you are because the compensatory tax doctrine is so well established and they and they're saying they didn't say that the test is determine what the what the roughly equivalent tax this and they did it not only by referencing the dormant commerce clause and not only by citing greg dunn and company which the state concedes is one of the foundation cases for the compensatory tax doctrine and they use the word roughly equivalent which the court often uses when they're talking about the story tax doctrine as a matter of fact in the when case why don't they just set up lot of compensatory tax down well because once they set the test this is what the supreme court operates once they set the test they they they tell you how to determine roughly equivalent but leave it to the lower courts to do it ok but that an anathema question why didn't they say apply the compensatory way they did it doesn't require a lot of imagination i hope is that they said the dorm of commerce clause they said greg greg diane company and they said roughly equivalent and and to the to the court and to the lo regardless of what you call the tax that's true and i don't think justice scalia said that i think just so he didn't say compensatory tax doctrine and maybe didn't say that but you think that let's take a step further ok and i realize this hypothetical but suppose suppose the motor carriers paid more tax under their different tax than the railroads did for diesel they paid more now would there be a the right you know look no i'm sorry suppose at the end of every year they've been taxed every single year you added up the total amount of taxes to computer over at the department of revenue that did that last say and it all the money goes into the great void of the general fund with the fact that there are the railroads paid less than the motor carriers not conclusively establish that we do not dispute the the courts math that except for one part i do want to make this point early because he did two calculations first as he did done in the first sometimes the sales tax was higher sometimes it was low now i think he erred the second time by i'm not going to look at local taxes but i think that was just that was that was just plain error but the math he did is spot appeal that is in the record you didn't holler much about that in your brain well because you don't think the case is about right with all due respect well i think the case is about roughly equivalent taxation and if the taxation revenue over a period of time is roughly equivalent you lose and under the district court's calculations and it's opinion it is roughly equivalent it's less than one and a half percent difference in what it fifty seven times subareas railroads are taxed more than fifty seven times the motor cares were taxed more and that was based on the state's exhibit two which was also erroneous because they added a much higher  locomotive fuel tax to their calculation i just didn't see that challenge account so i saw it so fundamentally you don't challenge the numbers you know and i correct except for the fact about the about the local taxes right that's correct the met but as the as the as the just a said an organ waste just because the math is fun doesn't mean that you passed the test rather quips you got to look at more than the agree that the compensatory tax doctrine was incorporated here and it makes sense because forget the labels for a second just to get the labels you have to look at what's going on in these two taxes as more than trying to contrive equivalent rates because you're comparing a tax this imposed as a percentage versus a tax that is imposed as per gallon so all of this is contrived in that sense i mean the calculator works you can pull out your it but but there's more to it on on roughly equivalent the just that right but still st the district court in this case took abbott's regarding the use of taxes did and did the district and and i i don't read the whole record but generally speaking with with our with professor pomp and dr magine it was primarily the your evidence am the states i presented not as much evidence as far as the use of the taxes and i'm generally correct you are correct because our our proof was  disputed we know how the money is spent the money that the motor carriers pay under the international feel of touch agreement goes to pay for their use of alabama ours i don't understand that but i don't understand how we can justify your argument given that text fashionable these days to actually look at what the statute says in the text of the statute you got for subsect this case impose another tax that discriminates against a real carry it doesn't say impose another tax are appropriate revenue in a way that discriminates against a kerry just card you're exactly right it is a symmetrical statute as justice kagan pointed out and see a sixteen i think it's perfectly civil metrical in the sense that it's talking about discriminating in the  tax you collect it says nothing nothing at all about discriminating in the way you use that tax money but it is a broad as justice scalia points out and see a sixty two it's a broadly written that he didn't have it say it's broadly written a nuff to get away from the text and he never would have imposed another tax if if let me put it this way if you have a tax on the rail carriers and it goes into the general f goes into legislation trust fund now they haven't imposed another tax about that amendment it's the same tax so i don't see how you say if they have the same tax let's say let's i don't see how that's different taxes that's different earmarking of the revenue raised about taxes and congress could have said that if they'd wanted to but they didn't say i don't that's the part of your argument i don't really understand but we have to we have to get into this now because as as we argued in and c s i x t two and last is that you shouldn't be looking at these alternative taxes it leaves you with a tax and ignore how it's spent because that's part of the roughly equivalent of that analysis you can't stop at one of my heart of whether a tax is discriminatory well if it is  appropriates exactly the same amount for the motor carriers for the use of our ways that it would get it earmarked exactly the same amount you can prove it everybody stipulates but they appropriate not one dime for the railroads does that violate some section phone yes because again the pro says so now we're going in and examining the revenue appropriations of state legislatures and telling them how to do it judge garzon don't need to do that for this case i know what i'm doing i mean that that's why i gave you the hypothetical we this statute means that state legislatures appropriate the same amount measured by whatever ratio or in our revenue it raising yardstick for railroads as far up motor carriers and water car statute doesn't require that what the statute requires state you make your policy decisions on how you going to tax these two competitors you make that decision but but what you do control is how the railroad stabbed and when the state makes those policy decisions they have to consider the fact was the of i'm not talking about tax everybody's tax this and we've done an audit let's say for ten years and it comes down to one difference and the railroads get the benefit of having one penny less everybody's happy about the tax but the railroad says you're not appropriating any money for me to take care of these real beds and i'm paying these tens of millions of dollars in taxes and would have asked them to appropriate money to our well your argument us your argument says you got it your market and if you got your market you got appropriated if there's no earmarks it please the court i'd like to start with what judge carnes was pointed out about the plain language of the statute if you remember back to c s x one the court used black's law dictionary to define what the word discriminates mean well if you use the s dictionary to define the word tax it simply says a charge imposed by the government on persons in these transactions property to yield public revenue that is a tax that is different than a spending measure under the plain language of the statute you do not impose spending measures you impose taxes to raise revenues the only thing that the court has asked this court to do is look at the tax the actual money taken in and that's exactly what judge co en did he looked at the tax and determined that the trucks pay twice as much per gallon than the railroads do to have cars the answer to your question is no there is no evidence in the record on the total amount of revenue paid both in the trucks we do know that c s x paid on average two million a year in state sales tax to the state by itself if you add state and local it's about five million a year there's no record as to how much the trucks pay i've seen the number i of twenty four point four cents per gallon and defending on the jurisdiction birmingham for example they pay a fixed rate per gallon so on light c s x where you actually have to do math because of the four percent the trucks you can easily tell trucks in alabama for the last ten years on average pay nineteen cents per gallon to the state but if you look at their total tax burden state plus local plus federal they pay forty seven point four cents per gallon c s s over the same time period pays twenty three point four that means that c s x already has a twenty four cent per gallon advantage over the trucks what c s x is trying to do is trying to get you to increase that advantage from twenty four cents to forty seven cents per gallon but literally paying zero judge black the answer to your question is yes the state did put on evidence of the benefits that c s x receives and judge did find out but that we don't believe that the benefits matters for the same reasons judge carnes was pointing out but if you want to talk about the benefits the court has found that c s ex benefits from the sales tax it pays because it employs more than twelve hundred alabamians it actively recruits in alabama colleges like auburn alabama is when trucks and trains work together to show up on roads and railroad tracks so you know so that is understand the argument is that there was a lot of evidence presented regarding what the cost to the state was to maintain the crossings the cost to the state when near death class i and all of that's in the record but that was not considered by the district court so it's in the record but it was not considered by the district court is that fair that it's fair or not fair and what i mean by that two part answer is it was not considered by the court for the purposes of the truck comparison judge cohen rightly held that when you're looking at whether a tax is roughly equivalent you look literally at the tax is the amount they pay the revenue the state taking in roughly equivalent so those numbers didn't matter and that's not why the state brought those particular numbers the reason this court the last panel of this court s was for evidence on water carriers that's what the court was concerned about because there was no evidence on water carriers the point that the state was trying to make and did make according to judge the law and with regard to the amount of money the state was spending  state's been over two hundred million dollars in a three year period dealing with issues caused by railroad crossings on state land while at the same time the states let spent literally zero energy on state water carriers because  federal waters so the evidence that we put on about the numbers wasn't going towards trucks necessarily because we don't believe those numbers batter what we were doing was showing our justification that it is ok that the state allows the federal government to charge the water carriers twenty nine point one cents per gallon and we don't double tax them because we're not spending any money on the water carriers they travel on federal waters and only the federal government exercises jurisdiction over them that's where those numbers come from judge carnes going back to your point about the water carriers occasionally do have accidents some which are spectacular and they do as the southern district of alabama will tell you i mean if if that's part of the justification for taxing the railroads and we say they get the benefit of quote benefit of the money we spend as a result of their accidents why should consider the occasional accidents with the water carriers two reasons for that the first is the factual reason that in the last ten years of commercial water carriers never actually had an accident alabama passed them many years last ten it's in the record the last ten years there expensive accident and that's actually a good good evidence of the second thing that i was going to bring up the state has a memorandum of op of understanding with the federal government that if it is a commercial carrier who has the accident then the federal government retains exclusive jurisdiction the state stays out of it if it's water craft like boat skis jet skis except for recreational then the state comes in but in that instance in an instance where it's a commercial water carrier the state by understanding i signed agreement with the federal government were hands off that's our point about commercial water carries not only is that hasn't happened in the last ten years if it did happen and judge cohen found this in his fact finding the states would stay out of it moving back to your point about the judge justice scalia's opinion the actual quote that you're referring to is his hypothetical saying that if the trucks paid for if if c s x were to pay a four percent sales tax and sub part one and support to all others pay a four percent sales tax that's not discriminatory and again that shows you the monster out of the court on what they believe the test here should be are you saying that state and local are just state just day and we can either way but it should just be state because again the plain language of the statute says the state shall not quote it impose a tax yeah but county its city has anybody ever looked at the alabama constitution or skimmed it knows part of the state i mean this there are creatures of the state there's very little local control of this statute every single time they've had it that it is best to err on the side of plain language if you look back at c s x two when justice scalia was writing for the majority in the statement of facts he says it is a four percent sales tax not a ten percent state plus local sales tax and he loved to do that it seems like we have an opinion that says that this is a very difficult pardon for the lower court to due to figure out this roughly equivalent number and if that inquiry is just looking at two tax rate and saying one is bigger than the other and not even looking at the local tax rate that seems to me a very easy task and what is the difficult task that they are referring to if it's just look at two numbers and decide which one is bigger respectfully justice scalia was being sarcastic the word sisyphean came from this coworker the previous panel and frankly he was being sarcastic he was saying it's not that hard twenty three cents per gallon twenty three point four cents per gallon or nineteen cents per gallon versus nine cents a gallon any district court in the circuit court can do that so i think that's the answer to question there's not a hard thing to do here that's why just  hypothetical he did and said well if you're both four percent the cases over  my opposing counsel brought up the fact that two experts in this case have said that the entire compensatory tax doctrine should be applied respectfully to both of the professors both have been been retained by either party you have the six circuit the ninth circuit in the tennessee district court the united states solicitor general all have come out on the same side saying that you don't look at where the state spends the money we believe that all of them are correct we don't believe that there has any reason for this court to create a circuit split to send this case back to the supreme court for a third tom supreme court made it very clear that it didn't want that and we believe that if this court follows every other court th issue so far that can be avoided with the remainder of my time i would like to talk about the water carriers and want to start but pointing out the fact that in the two and make us briefs in the us supreme court and c s x two the two that are in front of the court now on behalf of c s x and the first eighteen minutes of c s xs argument today they haven't said one word about water carriers and there's a reason for that the reason is the water carriers are so minimal in fact as judge they provide literally no injury because there is no instance where they compete and one pays the tax and one doesn't that they really don't matter in this case it's very telling that chief justice roberts very first question to th get rid of this case because there are less than one percent in his only question on rebuttal to the state was can you give me something on water carriers it's something that always should have gone away and i can give you numbers that show why if you look at the amount but tonnage of interstate commerce in the state first things that come out plus things that go in for every one ton that the water carriers do three tons for trying eight tons for trucks if you only look at the numbers of tonnage that leave the state that start hearing go out and that's where the tax would be paid because the diesel fuel is being bought here for every one ton of water carrier traffic six tons for the trains twenty two and a half for the trucks this case isn't always has been about trucks versus trains then doesn't sound to minimize to me and i'm not sure i buy your de minimus argument ok because suppose there's a clearly discriminatory tax and suppose they both cause the same amount of damage or both we have to pay the same amount because of their existence and we tax deductions out of railroads and  the water carries a free ride you save up not worth it when with a to three and unsound demand must to me respectfully i may not have should have started there we didn't win on and i know what you're arguing and now i'm only making the point that c s x has never really argued water carriers and there's a reason but i will spend the rest of my time arguing the things we actually want on that issue in the race they did so we have argued we understood so so it's not true they never are good ol retract what i've said and move on to what i should have started with and that is the fact that they've never proved an injury and the fact is that whether it's de minimus or not throughout two trials never once is i don't understand the concept of energy and theory are energy for that matter it says you can't impose a discriminatory tax it doesn't say you can impose a discriminatory tax that injures the railroads respectfully federal courts don't have the jurisdiction to enjoin a state tax unless there is an injury in fact you have to have article three standing there has to be a case or controversy with injury and respectfully the injury is they have a tax then that under the act they should have and if you apply the exemption to them that the water  pay no tax that is millions of dollars of injury that you're seeking death redress respectfully that's the same injury that every single person in this room has who ever bought those water bottles pay the same four percent sales tax that's a general tax but we don't have any claim under the road act no that's what we brought up spokeo we don't have any standing under the railroad act because there is no culpable claim at all but the railroads do have it but they have statutory standing they can they can bring a claim but they still have to show that 've dealt with isn't the case really limited to these these issues that we're dealing with in terms of the discrimination of the tax not the injury and the longer respectfully i don't think you could ever in the case without determining whether or the plaintiff is injured but isn't that already been determined i guess that's what i was it has never been determined it was ruled by judge caught in the first trial that came up to this court in the last instance this court was very trying to get the right word frustrated that there were no facts in evidence last time proving it either way when the case came back from c s x two in the supreme court said we want you to look at the state's arguments sue a sponsor the previous panel said tell us whether or not we should have a trial or tell us whether or not we should send this back to judge go on for fact findings on water carriers this court specifically said water carriers so that's what we went back and did and we put in the factual findings that would prove the state was both justified and even if we weren't there was no injury so injury has always been an issue in this case it is something that they had to get to the justification something we had to justifications one of which the court agreed with and one  not start with the one i did read we have and one thing to remember about both of these exemptions this is not an instance where the state chose to discriminate in favor of against in favor of trucks and boats against c s x both of these exemptions started because the federal government told us we had two on the truck side they said you will not get federal revenues for how a spending unless you dedicate your own state taxes for highway funds on the boats the supreme court said you cannot tax boats that go across state lines on the rivers under the commerce clause that's where it started ever since we have maintained that as have apparently forty other states and we are justified in not taking the affirmative action of getting rid of that exemption because if and when we do that we have a threat of being sued just like c s x sued us here under their statute we have the threat of beans dude sued by interstate water carriers under the commerce clause and the of being sued but c s x obviously did not persuade you to extend the exemption to them no so why extend it to the water care it is a choice that the state has the ability to make it as it is a is a an exemption we've always had it was forced upon us initially by congress and the enabling act in the supreme court and the state has the ability to decide we don't think it is something in our best interest to try to get this minimal amount money we might get if we do this just to avoid litigation against training's that's a decision that we have made so the reward is larger from taxing the railroads just the same amount of risk it the rule again we have always c s x this statute has been in effect for eighty years they just waited seventy years to sue us it's not like we made a decision one day and just said let's go tax e s x they waited and waited and many years well the taxes been in effect since nineteenth in the one nine hundred thirty s so they really waited since the four our act went into effect in the sixty's or seventy's that's the real measure the real measure but even under that measure we're talking thirty to forty years i sexist theory that we've been discriminating for three to four decades but they waited that long for we don't know what reason your defenses are opposed latches you know i'd i will take that as a defense but that's not how we're articulating it we are wondering what relevance it had to our purposes presently discussion i apologize i was simply answering the court's question you got a minute thirty eight left i want to ask a question about that the part where and you're saying it's compelled by federal law because there is this threat out there that you could get sued by the water carriers and what i'm kind of i'm just trying to understand it as house how strong is the standard so you're basically asking this court to find and some respects that by imposing this tax against water carriers it would violate the commerce clause and then these ten other states that are doing this would be doing something i don't constitutional but that the term reason is compel it so how strong does the finding have to be that this is unconstitutional to to provide an excuse for you not to to go in and other direction i think that all we have to show is the fact that they have a reasonably articulable claim a claim that could win and we've shown that by the fact that illinois sufficient justification and they said one of the justifications is that you are required by federal law and again i've only got thirty seconds left that's only one of two reasons in our primary argument has always been the state can choose not to double tax water carriers water carriers already pay a greater amount of federal tax than c s x does state plus local come by and we can choose not to make them pay an additional mt on top of that when we're not spending a dime on but don't motor carriers federal tax too that is ok so then water carriers similarly situated the boat play federal tax i disagree with that for the same reason i would disagree with the with the trains the the motor carriers travel across state lands we deal probably every five minutes with motor carrier accidents if you live in montgomery and have the ws f a at president since that's a different thing from whether they're federally taxed and the railroads are federally taxed as well are no they're not not a tax it would get rid of the exemptions for example the mode of care i think the state would have to choose or or would be allowed to choose i think if you roll of wire carriers they would be allowed the exemption if they cross state lines but again that's something that would require simply because the court hasn't looked at it yet but i don't think that's necessary because i think there are multiple reasons in this instance why the water carriers who haven't been injured we are justified in not taxing them are i think let's hear from mr good judge may i want to get to your point about being compelled but i got to start off by saying we need to debunk this theory that the railroads don't pay taxes in alabama they pay millions of dollars of taxes in alabama and not just not just  are two other major roads be n s f railway and norfolk southern and they're paying sales tax on all their materials to put it like any other taxpayer when their vehicles use the roads as they do they pay them out of fuel tax they pay millions of dollars in property tax they are paying their fair share we need to get away from this concept of the road to trying to escape and taxes i didn't pay any federal taxes well they pay income taxes they pay well th motor fuel tax but if i may let me get my word in edgewise about water carriers they judge leaps from exposure to suit to federal compulsion and that's an unjustified leap and cannot be what c s i x t it was two is talking about what the judge relied on and mr mays is correct he rejected correctly two things they relied on one was the maritime transportation security act which correctly said doesn't apply they relied on argument they have not resuscitate it here which was when alabama joined the union they promised they wouldn't touch water carries he he threw that went out to what what he came down on was the commerce clause question it is it is ludicrous to argue in the twenty first century that a state may not apply properly apportioned sales tax on the on the fuel of water carriers and we know that several states do and that and they can do that because of complete auto transit which is said you can impose a tax this is a tack this is the case decided fifty years after the hil case which is the case mr mays was referring to about you can't tax interstate commerce we know you can't and it is it is specious to argue number one that that would even be a carbon claim but even if it is why is that is  t excuse to discriminate against railroads it's a non sequitur quickly let me talk about benefits the judge himself is one of the issues we want judge cohen said look these benefits are not calibrated to the sales tax alabama didn't sit down and say well where was going to pay a four percent sales tax to pay for their burdens and just come on was right you don't do that and and also judge judge card you write the law is we don't prove in a case like this congress has proven the entry congress has said if the tax is discriminatory if the violates the act it will be in joint that's what congress has said congress has made that determination and as to that as to the motive carriers to show how these taxes are different recall and it's in our brief in the in the brief of the amica as other states impose a sales tax on both which they can do cary's i'm sorry both taxes on botha carries which they can do because they're taxing different things illinois says mark areas you will pay a sales tax like everybody else in the state when you when you engage in the transaction of b fuel and you'll also pay a motor fuel tax and why because it's going somewhere it differently is going to pay for the roads it is they do it is a different purpose it it that these are not mutually exclusive taxes which you have to have under any forget compensatory tax doctrine if you want to under any analysis they have to be mutually exclusive to be compensatory they have to be like the sales and they used to compensatory taxes mutually exclusive i also want to talk briefly about the split the mr mays says you may be getting into here you won't be getting into to a split here the night circuit case has been totally abrogated they had to release in that case number one was you don't sta if you if you look at the proceeds in this case with the sixth circuit because that six circuit case was not a roughly equivalent case it was in their view there were looking at a single tax they didn't need to get into roughly equivalent in any way they don't society an sides will take that case under submission and we'll have a ten minute recess now before we take up