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MERSCORP HOLDINGS, INC., ET AL. v.

DANNEL P. MALLOY ET AL.

(SC 19376)

Palmer, Zarella, Eveleigh, Espinosa and Robinson, Js.

Argued October 14, 2015—officially released February 23, 2016

Linda L. Morkan, with whom were Benjamin C.

Jensen and, on the brief, James A. Wade and Norman

H. Roos, for the appellants (plaintiffs).

Matthew J. Budzik, assistant attorney general, with

whom were Heather J. Wilson, assistant attorney general, and, on the brief, George Jepsen, attorney general,

for the appellees (defendants).

Ryan P. Barry and Michael J. Dyer filed a briefforthe

Connecticut Bankers Association et al. as amici curiae.

J. L. Pottenger, Jr., Jeffrey Gentes, and Aurelia

Chaudhury, Nicholas Gerschman and Marian Messing, law student interns, filed a brief for the Jerome N.

Frank Legal Services Organization and the Connecticut

Fair Housing Center as amici curiae.
Opinion

PALMER, J. In 2013, the legislature amended the statutes governing Connecticut’s public land records system to create a two tiered system in which a mortgage

nominee operating a national electronic database to

track residential mortgage loans must pay recording

fees approximately three times higher than do other

mortgagees. The plaintiffs, MERSCORP Holdings, Inc.,

and Mortgage Electronic Registration Systems, Inc.,

who are currently the only entities required to pay the

increased recording fees, commenced the present

action against the defendants, Governor Dannel P. Malloy, Attorney General George Jepsen, Treasurer Denise

L. Nappier, Kendall F. Wiggin, the state librarian, and

LeAnne R. Power, the state public records administrator,1

seeking, inter alia, injunctive relief and a judgment

declaring that this two tiered fee structure violates various provisions of the federal and state constitutions.

Specifically, the plaintiffs alleged that General Statutes

§§ 7-34a (a) (2) and 49-10 (h), as amended, violate the

equal protection, due process, and takings provisions of

the federal and state constitutions, the federal dormant

commerce clause, and the federal prohibition against

bills of attainder. The plaintiffs further alleged that

enforcement of the statutes violates 42 U.S.C. § 1983.

The parties filed motions for summary judgment, and

the trial court granted the state’s motion for summary

judgment on all counts and rendered judgment thereon.

This appeal followed.2 We affirm the judgment of the

trial court.

I

This case concerns the filing fees that the parties to a

residential mortgage loan must pay to record mortgage

documents in the public land records in Connecticut.

Because the plaintiffs raise both federal and state constitutional issues of first impression, it will be helpful

before considering the plaintiffs’ claims to briefly

review the traditional procedure for recording residential mortgage documents, certain relatively recent

changes to that system, and the novel response of the

Connecticut legislature to those changes.

Under the traditional residential mortgage model, a

person seeking to finance the purchase of a residential

property obtains a loan from a lender, typically a bank,

in exchange for a promissory note committing the borrower to repay the loan. To secure the loan, the borrower provides the lender a mortgage on the property.

Although, in Connecticut, there is no legal requirement

that the lender record the mortgage in the public land

records, mortgages typically are recorded—via the

clerk of the town in which the property is situated—

in order (1) to perfect the lender’s security interest

by giving public notice thereof, and (2) to maintain a

complete public chain of title.
Under the traditional model, the bank or other lender

maintains the loan on its books and continues to service

the loan until it is repaid. At that point, the parties

typically record a release of the mortgage in the land

records. At a minimum, then, the life of a residential

mortgage loan may involve only two recordable events,

although other events—for example, a transfer of the

mortgage loan to another lender, or the creation or

subordination of a home equity credit line—also may

arise under the traditional model.

The most significant factor in the decline of the traditionalresidential mortgage model has been the development and evolution of the secondary mortgage market.

A secondary market is created when the initial lender

sells the mortgage loan to outside investors. Doing so

provides local lenders with greaterliquidity, which facilitates additional home buying, and also allows large

outside investors to pool—and thus to minimize—the

risk that any particular loan will go into default.

Although the modern secondary mortgage market had

its genesis in the creation of the Federal Housing

Authority and associated government sponsored financing corporations such as Fannie Mae in the 1930s, it

expanded dramatically in the 1980s with the advent of

new types of mortgage backed securities for sale in the

private equity markets.

For mortgage loans sold in the secondary market,

the investor typically engages a third party to perform

servicing functions such as payment collection and file

maintenance. Both the loan itself and the servicing

rights may be sold ortransferred multiple times overthe

life of a loan. Underthe common-law rule, as codified in

many states, the mortgage follows the note, so that an

investor who acquires a residential note automatically

obtains the attached security interest as well.

Although the development of a robust and sophisticated secondary market has had a dramatic impact on

the liquidity and, with some notable exceptions, the

stability of the residential mortgage loan market, it also

has created challenges for the public land record system. Because the ownership and servicing rights to a

loan may be transferred multiple times over the life of

a loan, the mortgagee ofrecord, which may be eitherthe

note holder or the servicer as nominee, will frequently

change. This means that each subsequent holder must

choose either (1) to undertake the costly and timeconsuming process of recording each of the numerous

mortgages that it may briefly hold, subject to the varying

costs and requirements of each state’s county or, as in

Connecticut, each town clerk, or(2)to decline to record

its interest, which may result in potential problems and

costs resulting from an incomplete public chain of title.

To address these problems, in the 1990s, the major

public financial service corporations, in collaboration
with various private interests, developed the national

Mortgage Electronic Registration Systems (MERS) system. There are two primary components to the MERS

model.3 First, MERS operates a national electronic registration system that tracks any changes in the ownership and servicing rights of MERS-registered loans

between MERS members, who include in-state and outof-state mortgage lenders, servicers and subservicers,

and public finance institutions. In this sense, MERS

operates as a centralized, virtual alternative to the hundreds of traditional county or town land recording systems throughout the country. Second, because MERS

members cannot completely eschew the use of the public land records, MERS becomes the mortgage nominee

on any loans held by MERS members, and is identified

as such when the mortgage is initially recorded in the

land records. Recording a mortgage with MERS as a

mortgage nominee essentially creates a placeholder for

the electronic MERS system in the public records,

allowing the two systems to interoperate. That is to

say, if a party searching the chain of title on a property

comes upon a recorded mortgage to MERS, the party

is thereby notified that the MERS database may be

consulted to determine the present beneficial owner of

the mortgage and loan, as well as any related servicing

rights or subordinate security interests. MERS remains

the mortgagee of record in the public records until the

mortgage either is released or assigned to a nonmember

of MERS.

One potential advantage of the MERS system is that

it eliminates the costs, in both time and fees, associated

with recording each subsequent mortgage assignment

in the public land records. Although the plaintiffs in

the present case do not concede that any such savings

have been realized in Connecticut, the parties do agree

that, as of 2013, approximately 65 percent of mortgage

loans nationally and in Connecticut originated with

MERS acting as the mortgagee. The plaintiffs’ principal

place of business is in Virginia.

Turning our attention to the legislation that led to

the present action, we note that, prior to July 15, 2013,

§ 7-34a required that all filers pay the town clerk $10

for the first page of each document filed in the land

records, plus $5 for each subsequent page. General Statutes (Rev. to 2013) § 7-34a (a). Section 7-34a imposed

additional fees of $3 and $40 per filing; General Statutes

(Rev. to 2013) § 7-34a (d) and (e); and an additional fee

of $2 per assignment after the first two assignments.

General Statutes (Rev. to 2013) § 7-34a (a).

In 2013, General Statutes (Rev. to 2013) § 7-34a was

amended by Public Acts, No. 13-184, § 98 (P.A. 13-184),

and Public Acts, No. 13-247, § 82 (P.A. 13-247). As

amended, § 7-34a defines a ‘‘nominee of a mortgagee’’

as ‘‘any person who (i) serves as mortgagee in the land

records for a mortgage loan registered on a national
electronic database that tracks changes in mortgage

servicing and beneficial ownership interests in residential mortgage loans on behalf of its members, and (ii)

is a nominee or agent for the owner of the promissory

note or the subsequent buyer, transferee or beneficial

owner of such note.’’ General Statutes § 7-34a (a) (2)

(C). The parties agree that MERS is presently the only

entity that qualifies as a nominee of a mortgagee, as so

defined, and that the legislature crafted the statutory

language with MERS specifically in mind.

Section 7-34a, as amended, further provides that, with

two exceptions, when a nominee of a mortgagee files

a document in the land records, the town clerk shall

collect a fee of $116 for the first page filed and $5 for

each additional page. General Statutes § 7-34a (a) (2)

(A). In addition, the clerk continues to collect $3 for

each document pursuant to § 7-34a (d) and $40 for each

document pursuant to § 7-34a (e). The two exceptions

are that, when a nominee of a mortgagee files ‘‘(i) an

assignment of mortgage in which a nominee of a mortgagee appears as assignor, or (ii) a release of mortgage

by the nominee of a mortgagee,’’ the town clerk collects

a fee of $159, plus $10 for the first page and $5 for each

additional page.4 See General Statutes § 7-34a (a) (1)

and (2)(B). The recording fees for all otherfilers remain

unchanged under the amended statute.

The net effect of the amendments to § 7-34a (a) is to

collect from a nominee of a mortgagee, namely, MERS,

substantially more for the filing of deeds, assignments,

and other documents in the land records than from any

other filer. When filing a mortgage deed, for example,

if MERS is a party to the transaction, the recording fee

will be $159 ($116 plus $3 plus $40) for the first page

and $5 for each additional page. See General Statutes

§ 7-34a (a) (2) (A), (d) and (e). If MERS is not a party

to the transaction, the recording fee will be $53 ($10

plus $3 plus $40) for the first page and $5 for each

additional page. See General Statutes § 7-34a (a)(1), (d)

and (e). When filing a mortgage assignment orrelease, if

MERS is a party to the transaction, the recording fee

will be $159, plus $10 for the first page and $5 for each

additional page.5 See General Statutes § 7-34a (a) (1)

and (2) (B). If MERS is not a party to the transaction,

the recording fee will be $53 ($10 plus $3 plus $40)

for the first page and $5 for each additional page. See

General Statutes § 7-34a (a) (1), (d) and (e).

The 2013 amendments also shifted how the recording

fees on MERS-related transactions are allocated. See

generally P.A. 13-184, § 97, and P.A. 13-247, § 81, codified at General Statutes § 49-10 (h). The $159 assessed

for the filing of mortgage deeds in connection with

MERS transactions is allocated as follows: $10, plus

any fees for additional pages, to the town clerk; $39 to

the municipality’s general revenue accounts; and $110

to the state, of which $36 is paid into the community
investment account and $74 into the state’s general

fund. General Statutes § 49-10 (h). The $159 fee

assessed in connection with MERS-related assignments

and releases is allocated slightly differently: $32 to

municipal general revenue accounts; $36 to the state’s

community investment account; and $91 to the state’s

general fund. General Statutes § 49-10 (h). By contrast,

the $53 paid by other mortgagees for all recorded transactions continues to be allocated as follows: $12 for

the first page ($10 plus $1 of the $3 fee pursuant to § 7-

34a [d], plus $1 of the $40 fee pursuant to § 7-34a [e]),

and $5 per additional page to the town clerk; $3 to

the municipality forlocal capital improvement projects;

and $38 to the state, of which $2 is dedicated to historic

document preservation and $36 for community investment. See General Statutes § 7-34a (a) (1), (d) and (e).

The parties agree that the legislature adopted the

amendments to § 7-34a (a) at least in part as a revenue

enhancing measure to help balance the state budget.

They also agree that there is no evidence that any member of MERS has discontinued its membership in the

MERS system or halted orreduced its use of that system

as a result of the 2013 amendments. Finally, the parties

agree that, in most cases, the recording fees at issue

will be collected from the borrowers at closing and not

paid by MERS itself.

II

As an initial matter, we must address the dispute

between the parties about whether the fees imposed

by § 7-34a are more properly characterized as user fees

ortaxes. The state contends that the payments are more

akin to taxes than user fees because the statute was

enacted primarily to raise revenues for the state and

its municipalities and because the lion’s share of the

fees incurred in connection with MERS-related transactions is allocated to the state’s general fund, the state’s

community investment account, and municipal general

revenue accounts, whereas only a small fraction of the

fees is retained by the town clerks as compensation

for the recording service. The plaintiffs, by contrast,

contend that the fees, which are identified in the statute

as recording ‘‘fees’’; General Statutes § 7-34a; and are

paid in exchange for a discrete service of benefit to the

filer, are properly considered user fees. Courts in other

jurisdictions that have considered the question in other

contexts—e.g., for purposes of the federal tax injunction law, 28 U.S.C. § 1341 (2012)—have reached different conclusions as to whether a purported ‘‘fee’’ that

generates more revenue than is needed to fund the

service for which the fee is charged, with the surplus

allocated to the government’s general fund, constitutes

a tax or a fee. Compare, e.g., Empress Casino Joliet

Corp. v. Balmoral Racing Club, Inc., 651 F.3d 722, 730

(7th Cir. 2011) (tax), with, e.g., San Juan Cellular Telephone Co. v. Public Service Commission, 967 F.2d 683,
686 (1st Cir. 1992) (fee). But see S. Wolfe, ‘‘Municipal

Finance and the Commerce Clause: Are User Fees the

Next Target of the ‘Silver Bullet’?,’’ 26 Stetson L. Rev.

727, 729 (1997) (‘‘[r]ecent rulings by the [United States

Supreme] Court suggest that the difference between

user fees and taxes may be a distinction without a

difference’’). Because the payments at issue in this case

are hybrids, bearing some indicia of both taxes and

user fees, and because the parties have not fully briefed

the issue, we will assume, solely for purposes of the

present appeal, that we must apply the constitutional

standards governing both taxes and fees.

III

We now address the merits of the plaintiffs’ various

constitutional challenges,6 beginning with the plaintiffs’

claim that §§ 7-34a (a) (2) and 49-10 (h), by charging

nominees such as MERS higher recording fees than

other mortgagees, violate the equal protection guarantees of the state and federal constitutions.7 We reject

this claim.

‘‘To prevail on an equal protection claim, a plaintiff

first must establish that the state is affording different

treatment to similarly situated groups of individuals.

. . . [I]t is only after this threshold requirement is met

that the court will consider whetherthe statute survives

scrutiny under the equal protection clause.’’ (Citation

omitted; internal quotation marks omitted.) Keane v.

Fischetti, 300 Conn. 395, 403, 13 A.3d 1089 (2011). For

purposes of this case, we will assume without deciding

that the similarly situated requirement is satisfied and

proceed to consider whether the legislature was warranted in singling out the plaintiffs for disparate treatment. Cf. City Recycling, Inc. v. State, 257 Conn. 429,

449, 778 A.2d 77 (2001).

‘‘When a statute is challenged on equal protection

grounds, whether under the United States constitution

or the Connecticut constitution, the reviewing court

must first determine the standard by which the challenged statute’s constitutional validity will be determined.’’ (Internal quotation marks omitted.) D.A.

Pincus & Co. v. Meehan, 235 Conn. 865, 875, 670 A.2d

1278 (1996). In the present case, to prevail on their

equal protection claim, the plaintiffs must overcome a

highly deferential standard of review. ‘‘If the statute

does not [affect] either a fundamental right or a suspect

class, its classification need only be rationally related to

some legitimate government purpose . . . .’’ (Internal

quotation marks omitted.) Id. This rational basis review

test ‘‘is satisfied [as] long as there is a plausible policy

reason for the classification . . . the legislative facts

on which the classification is apparently based rationally may have been considered to be true by the government decisionmaker . . . and the relationship of

the classification to its goal is not so attenuated as

to render the distinction arbitrary or irrational . . . .’’
(Citations omitted; internal quotation marks omitted.)

Id., 876.

‘‘It is undisputed that the constitutionality of the taxation scheme at issue . . . must be analyzed under

rational basis review because it neither implicates a

fundamental right, nor affects a suspect class. Indeed,

claims that taxation schemes violate the equal protection rights of those more heavily taxed are subject to an

especially deferential rational basis review. The United

States Supreme Court has explained that in taxation,

even more than in other fields, legislatures possess the

greatest freedom in classification. Since the members

of a legislature necessarily enjoy a familiarity with local

conditions [that a reviewing] [c]ourt cannot have, the

presumption of constitutionality can be overcome only

by the most explicit demonstration that a classification

is a hostile and oppressive discrimination against particular persons and classes. . . . Accordingly, that court

has repeatedly held that inequalities [that] result from

a singling out of one particular class for taxation or

exemption, infringe no constitutional limitation.’’ (Citation omitted; internal quotation marks omitted.) Markley v. Dept. of Public Utility Control, 301 Conn. 56,

70, 23 A.3d 668 (2011); see, e.g., Alabama Dept. of Revenue v. CSX Transportation, Inc., U.S. , 135 S.

Ct. 1136, 1142–43, 191 L. Ed. 2d 113 (2015). ‘‘Similarly,

this court consistently has held that the state does not

violate the equal protection clause by singling out a

particular class for taxation or exemption.’’ Markley v.

Dept. of Public Utility Control, supra, 71. Rather, ‘‘[t]he

burden is on the one attacking the legislative arrangement to negative every conceivable basis [that] might

support it.’’ (Emphasis in original; internal quotation

marks omitted.) D.A. Pincus & Co. v. Meehan, supra,

235 Conn. 876–77. The same deferential standards govern equal protection challenges to user fees. See, e.g.,

United States v. Sperry Corp., 493 U.S. 52, 65, 110 S.

Ct. 387, 107 L. Ed. 2d 290 (1989); Kadrmas v. Dickinson

Public Schools, 487 U.S. 450, 462–63, 108 S. Ct. 2481,

101 L. Ed. 2d 399 (1988).

Turning to the case before us, we first consider

whether the challenged statutes seek to accomplish a

legitimate public purpose. The parties agree that one

primary purpose of the legislature in imposing higher

recording fees on mortgage nominees such as MERS

was simply to raise additional revenues, either to compensate for fees allegedly lost as a result of the MERS

business model or, more generally, to help balance the

state’s budget. It is well established that raising revenues is a legitimate purpose—often the primary purpose—of a tax or a fee. See Harbor Ins. Co. v. Groppo,

208 Conn. 505, 511, 544 A.2d 1221 (1988) (tax); Eagle

Rock Sanitation,Inc. v. JeffersonCounty, United States

District Court, Docket No. 4:12-CV-00100-EJL-CWD (D.

Idaho November 22, 2013) (fee). Accordingly, the first

prong of the test is satisfied.8
The dispute between the parties thus centers around

the question of whether it is permissible for the legislature to impose a higher share of the state’s revenue

burden on nominees such as MERS than it does on other

recording parties. That is to say, we must determine

whether the disparate treatment imposed by §§ 7-34a

(a) (2) and 49-10 (h) is rationally related to the goal of

raising revenues and recouping lost fees.

Before considering whether the legislature had a

rational basis for imposing higher recording fees on

nominees such as MERS than on other mortgagees, we

first address the plaintiffs’ contention that we must

restrict our analysis in this regard to those theories that

the state raised before the trial court and that find

evidentiary support in the record. The plaintiffs misstate the law. As the trial court properly recognized,

the state ‘‘has no obligation to produce evidence to

sustain the rationality of a statutory classification. [A]

legislative choice is not subject to courtroom [fact-finding] and may be based on rational speculation unsupported by evidence or empirical data. . . . A statute is

presumed constitutional . . . and [t]he burden is on

the one attacking the legislative arrangement to negative every conceivable basis which might support it

. . . whether or not the basis has a foundation in the

record.’’ (Citations omitted; internal quotation marks

omitted.) Heller v. Doe ex rel. Doe, 509 U.S. 312, 320–21,

113 S. Ct. 2637, 125 L. Ed. 2d 257 (1993). Indeed, it is

well established that a reviewing court need not restrict

its analysis even to those rationales proffered by the

parties but may itself hypothesize plausible reasons why

a legislative body might have drawn the challenged

statutory distinctions. See, e.g., Federal Communications Commission v.Beach Communications,Inc., 508

U.S. 307, 318, 113 S. Ct. 2096, 124 L. Ed. 2d 211 (1993);

Kadrmas v. Dickinson Public Schools, supra, 487 U.S.

462–63; American Express Travel Related Services Co.

v. Kentucky, 641 F.3d 685, 690 (6th Cir. 2011). In the

present case, in light of the highly deferential standard

of review that applies to tax and user fee legislation

and other forms of purely economic regulation, we perceive at least two conceivable bases on which the legislature might reasonably have imposed higher recording

fees on nominees such as MERS than on other mortgagees.

First, the legislature might simply have concluded

that a large corporation such as MERS, which is

involved in nearly two thirds of the nation’s residential

mortgage transactions, is better able to shoulder high

recording fees than are smaller mortgagees. Although

it is true that large banks, loan servicing companies,

and other well-heeled mortgagees may be no less able

to afford such fees, a statute subject to rational basis

review can be under inclusive without running afoul of

the equal protection clause. See, e.g., Nordlinger v.
Hahn, 505 U.S. 1, 11, 112 S. Ct. 2326, 120 L. Ed. 2d 1

(1992) (‘‘[i]n structuring internal taxation schemes the

[s]tates have large leeway in making classifications and

drawing lines [that] in their judgment produce reasonable systems of taxation’’ [internal quotation marks

omitted]); Markley v. Dept. of Public Utility Control,

supra, 301 Conn. 70 (‘‘[A] legislature is not bound to

tax every member of a class or none. It may make

distinctions of degree having a rational basis, and when

subjected to judicial scrutiny they must be presumed

to rest on that basis if there is any conceivable state

of facts [that] would support it.’’ [Internal quotation

marks omitted.]); Harbor Ins. Co. v. Groppo, supra, 208

Conn. 511 (‘‘[R]ecognizing that any plan of taxation

necessarily has some discriminatory impact . . . we

have previously stated the operative test for the validity

of a tax statute to be the following: As long as some

conceivable rational basis for the difference exists, a

classification is not offensive merely because it is not

made with mathematical nicety.’’ [Citations omitted;

emphasis in original; internal quotation marks omitted.]). Indeed, our sister state courts have upheld taxation schemes that impose a heightened burden on

individual corporate taxpayers when there is a principled basis for doing so. See, e.g., North Pole Corp. v.

East Dundee, 263 Ill. App. 3d 327, 336–37, 635 N.E.2d

1060 (1994); Horizon Blue Cross Blue Shield v. State,

425 N.J. Super. 1, 21–23, 39 A.3d 228 (App. Div.), cert.

denied, 211 N.J. 608, 50 A.3d 41 (2012); see also Verizon

New England, Inc. v. Rochester, 156 N.H. 624, 631, 940

A.2d 237 (2007) (city could tax one public utility more

heavily than others if selective taxation was reasonably

related to legitimate public interest).9

Second, as the trial court recognized, the legislature

reasonably may have determined that mortgage assignments that typically would be recorded in the public

land records are not recorded for loans registered with

the MERS system because MERS remains the mortgagee of record for its members. Accordingly, the legislature could have raised the initial recording fee that

MERS pays, as well as the final fee that is paid when

the mortgage is released or transferred out of the MERS

system, to compensate for the fees ‘‘lost’’ over the

course of the life of the loan.

The plaintiffs offer four arguments in response: (1)

there is no evidence in the record to support the contention that assignments are recorded less frequently

for MERS loans than for other mortgagees’ loans; (2)

there is no legal requirement that assignments be

recorded in the public land records; (3) even if town

clerks do perform fewer recording duties with respect

to MERS loans than non-MERS loans, there is no reason

to compensate town clerks for lost recording revenues

because they already save the costs associated with not

having to record assignments of MERS loans, or, put

differently, clerks are not entitled to payment for ser-
vices that they do not perform; and (4) even if town

clerks have lost recording fees under the MERS system,

there is no rational relationship between those losses

and the fees imposed under §§ 7-34a (a) (2) and 49-10

(h) because those fees are primarily allocated to the

state’s general fund and to municipal accounts, rather

than to the clerks themselves. We consider each argument in turn.

With respect to the plaintiffs’ argument that there is

no evidence in the record that mortgage assignments

are recorded less frequently for MERS-listed loans than

for non-MERS loans, we already explained that, under

the rational basis test, our review is not limited to theories that the state has documented at trial or that have

been subject to judicial fact-finding. Rather, courts may

consider—and it is the plaintiffs who must debunk—

any rationale that might plausibly have motivated the

legislature. In the present case, it cannot be seriously

suggested that the MERS model might not result in

fewer recordings in the public land records, with concomitant cost savings to MERS and its users. Indeed,

the plaintiffs’ argument is undercut repeatedly by the

amici supporting their own position. The amici comprising two bankers associations and a land title association

represent, for example, that (1) prior to the advent of

MERS, recording expenses added at least $30 to the

cost of each loan, and sometimes substantially more,

(2) MERS was devised ‘‘with an eye toward eliminating

many of the unnecessary costs . . . associated with

land title and recording issues,’’ (3) assignments that

typically were filed on the land records before the establishment of MERS are no longer required, (4) this

reduced need for assignments results in lower title

insurance and closing costs for both buyers and sellers

using the MERS system, and (5) MERS ‘‘made the transfer of loans in the secondary market both cheaper

and simpler.’’

The amici also direct our attention to scholarly literature concluding that MERS ‘‘reduces the need to pay

additional recording fees associated with subsequent

transfers of mortgage loans or mortgage loan servicing

rights’’ and to an article published by a former senior

executive officer of MERS predicting that, because

MERS ‘‘eliminates the need to record later assignments

in the public land records . . . MERS will save the

mortgage industry $200 million a year by eliminating

the need for many assignments. Because MERS should

decrease the cost of servicing transfers, mortgage loan

portfolios may begin to reflect a price difference if

the loans are MERS registered.’’ Moreover, ‘‘[w]hether

[town recorders’] assignment revenues will drop [as a

result] remains an open question.’’ In light of these

publicly available statements, we have no difficulty concluding that the legislature mightreasonably have determined that parties to MERS-listed loans can obtain significant cost savings in recording fees over the life of
a loan and that, as a result, it is not unfair to ask them

to pay higher recording fees at the outset and again

when the mortgage ultimately is released or transferred

out of the MERS system.

The plaintiffs’ second argument, namely, that there is

no legal requirement that assignments of loan servicing

rights be recorded in Connecticut, is a red herring. It

is clear from the above quoted statements that, when

the plaintiffs represent that the MERS system ‘‘eliminates the need to record later assignments in the public

land records’’; (emphasis added); they refer not to any

legal recording requirement but, rather, to the fact that,

from a practical standpoint, loan assignments must be

recorded if the holder is to perfect its security interest

and to avoid potentially costly gaps in the chain of title.

Nor are we persuaded by the plaintiffs’ third argument, namely, that the legislature had no legitimate

reason to compensate town clerks for lost recording

revenues because, if a document is not recorded, the

town clerk has performed no service for which he or

she deserves to be compensated. There are three flaws

with this argument. First, the argument accounts for

only the marginal costs associated with recording a

document. The costs of running a town clerk’s office,

including the clerk’s salary and benefits, building and

utilities, information technology infrastructure, and the

like, are largely fixed. By contrast, the marginal costs

associated with recording any particular document—a

bit of paper and ink, or the digital equivalents thereof—

are quite limited. Thus, if increased use of the MERS

system means that a clerk’s workload drops by 10 percent, it is unlikely that the clerk’s office will recognize

a corresponding 10 percent cost savings. It therefore

was reasonable for the legislature to impose higher upfront and back-end fees on MERS transactions to help

the town clerks maintain budget stability.

Second, the plaintiffs fail to acknowledge that the

service provided by a clerk’s office only begins with

the recording of a document. The principal service provided, and the principal value to the recording party,

is that a record of the transaction is perpetually maintained and made available to the public for search by

any interested party. This is the primary reason parties

opt to record assignments and other loan documents.

One value of the MERS system to subsequent transferees, then, is that it allows them essentially to free ride

on the public recording system. They reap the benefit

of MERS’ initialrecording as mortgagee, without having

to pay—at least without having to pay the clerk—for

the ongoing benefit of the public notice. It is reasonable

to assume that the legislature imposed higher up-front

recording fees on MERS loans as a way to remedy this

free rider problem.

Third, the plaintiffs go astray in considering the issue

solely from the standpoint of the town clerk. Regardless
of whether the clerks have lost money as a result of a

lower recording rate for assignments of MERS loans,

it seems clear that MERS, its members, and the buyers

and sellers involved in MERS-listed transactions do

achieve some savings in recording costs. If the legislature concluded that this system of loan processing

results in significant cost savings for MERS members

and its users, the legislature was free to impose a higher

tax or fee on those transactions in order to recapture

a portion of those savings. See Rosemont v. Priceline.com, Inc., United States District Court, Docket No.

09 C 4438 (N.D. Ill. October 14, 2011) (equal protection

clause was not offended when town imposed hotel tax

on only those travel companies using distinct business

model that otherwise would have resulted in tax savings

for those companies); Horizon Blue Cross Blue Shield

v. State, supra, 425 N.J. Super. 22–23 (equal protection

clause was not offended when state imposed tax solely

on health service companies, of which plaintiff was sole

exemplar, which previously had advantage of certain

tax loopholes).

Finally, the plaintiffs’ fourth argument is that, even

if town clerks have lost recording fees as a result of the

MERS system, there is no rational relationship between

those losses and the heightened fees imposed under

§§ 7-34a (a) (2) and 49-10 (h), which primarily are allocated to the state’s general fund and municipal

accounts. This argument fails because, among other

things, it assumes a system of municipal financing that

is largely obsolete. Pursuant to General Statutes § 7-

34b (b), ‘‘[a]ny town may, by ordinance, provide that

the town clerk shall receive a salary in lieu of all fees

and other compensation provided for in the general

statutes . . . . Upon the adoption of such ordinance

the fees or compensation provided by the general statutes to be paid to the town clerk shall be collected by

such town clerk and he shall deposit all such money

collected by him in accordance with such provisions

of law as govern the deposit of moneys belonging to

such town.’’ On the basis of publicly available documents, the legislature reasonably could have concluded

that only a handful of Connecticut towns still hew to the

traditional model under which financially independent

clerks’ offices retain the recording fees they collect,

and that, in most cases, such fees are now paid into

a town’s general revenues. See Office of Legislative

Research, Connecticut General Assembly, Report No.

2006-R-0297, Town Clerks: Duties, Responsibilities, and

Fee Collection (April 26, 2006). Accordingly, a falloff in

recording fees will adversely impact municipal budgets

and potentially result in a heightened need for local

community support by the state. For these reasons, we

conclude that the distinctions established by §§ 7-34a

(a) (2) and 49-10 (h) are rationally related to legitimate

public interests and, therefore, do not offend the equal

protection provisions of the state or federal consti-
tution.

IV

We next consider the plaintiffs’ claim that §§ 7-34a

(a) (2) and 49-10 (h) violate the dormant commerce

clause of the federal constitution. The commerce clause

provides that Congress shall have the power ‘‘[t]o regulate Commerce with foreign Nations, and among the

Several States, and with the Indian Tribes . . . .’’ U.S.

Const., art. I, § 8, cl. 3. ‘‘Although the [c]lause is framed

as a positive grant of power to Congress, [the United

States Supreme Court has] consistently held this language to contain a further, negative command, known

as the dormant [c]ommerce [c]lause, prohibiting certain

state [regulation] even when Congress has failed to

legislate on the subject.’’ (Internal quotation marks

omitted.) Comptroller of the Treasury v. Wynne,

U.S. , 135 S. Ct. 1787, 1794, 191 L. Ed. 2d 813 (2015).

‘‘[T]he dormant [c]ommerce [c]lause precludes [s]tates

from discriminat[ing] between transactions on the basis

of some interstate element. . . . This means, among

other things, that a [s]tate may not tax a transaction or

incident more heavily when it crosses state lines than

when it occurs entirely within the [s]tate. . . . Nor may

a [s]tate impose a tax [that] discriminates against interstate commerce either by providing a direct commercial

advantage to local business, or by subjecting interstate

commerce to the burden of multiple taxation.’’ (Citations omitted; internal quotation marks omitted.) Id.

Although the recording transactions at issue in this

case may themselves be purely local in nature, the presence of MERS as a participant indicates that many of

the mortgage loans involved ultimately will be transferred on the national secondary loan market. For this

reason, and in light of the unique role that MERS plays

in the national secondary market, we will assume that

interstate commerce is implicated. See Camps Newfound/Owatonna, Inc. v. Harrison, 520 U.S. 564, 573,

117 S.Ct. 1590, 137 L.Ed. 2d 852 (1997)(‘‘ifitis interstate

commerce that feels the pinch, it does not matter how

local the operation [that] applies the squeeze’’ [internal

quotation marks omitted]).

We first consider what legal standard governs challenges to taxes and user fees under the dormant commerce clause. The plaintiffs, at varying times, suggest

that the fees at issue in this case should be assessed

according to the tests and legal analysis that the United

States Supreme Court has applied to dormant commerce clause challenges against (1) general regulatory

measures, (2) tax schemes, and (3) user fees. The plaintiffs may be forgiven for any confusion in this regard,

however, as the United States Supreme Court’s dormant

commerce clause jurisprudence is less than a model of

clarity, particularly in the area of user fees and general

and special revenue taxes.10 That court itself has

acknowledged ‘‘the uneven course of [its] decisions in
this field’’; American Trucking Assns., Inc. v. Scheiner,

483 U.S. 266, 269, 107 S. Ct. 2829, 97 L. Ed. 2d 226

(1987); and has indicated that its inability to settle on

a guiding legal framework has created ‘‘a quagmire of

judicial responses . . . .’’ (Internal quotation marks

omitted.) Id., 280; see also S. Wolfe, supra, 26 Stetson

L. Rev. 778–81 (discussing ambiguous state of law).

Moreover, the high court’s recent dormant commerce

clause decisions have been decided by the narrowest

of margins, with substantial disagreement among the

members of that court as to the proper test or tests to

be applied. See, e.g., Comptroller of the Treasury v.

Wynne, supra, 135 S. Ct. 1791. As a result, several distinct but partially overlapping tests may be thought to

govern the present case. See, e.g., id., 1802 (applying

internal consistency test to income tax scheme); Dept.

of Revenue v. Davis, 553 U.S. 328, 338–40, 128 S. Ct.

1801, 170 L. Ed. 2d 685 (2008) (general two part test

governs all state regulations, including taxes, but different rules may govern taxes and fees imposed by state

in its dual capacity as market participant and regulator);

Complete Auto Transit, Inc. v. Brady, 430 U.S. 274,

279, 97 S. Ct. 1076, 51 L. Ed. 2d 326 (1977) (establishing

four part test governing state taxes that impact interstate commerce); Evansville-Vanderburgh Airport

Authority District v. Delta Airlines, Inc., 405 U.S. 707,

716–17, 92 S. Ct. 1349, 31 L. Ed. 2d 620 (1972) (establishing three part test governing user fees and special revenue taxes); Pike v. Bruce Church, Inc., 397 U.S. 137,

142, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970) (establishing

balancing test governing any facially neutral state regulation). As United States Supreme Court Justice Antonin

Scalia recently lamented: ‘‘One glaring defect of the

negative [c]ommerce [c]lause is its lack of governing

principle. Neither the [c]onstitution nor our legal traditions offer guidance about how to separate improper

state interference with commerce from permissible

state taxation or regulation of commerce. So we must

make the rules up as we go along. That is how we

ended up with the bestiary of ad hoc tests and ad hoc

exceptions that we apply nowadays . . . .’’ (Citations

omitted.) Comptroller of the Treasury v. Wynne, supra,

1809 (Scalia, J., dissenting).

Fortunately, we need not wade into this quagmire or

attempt to divine the precise standards by which the

United States Supreme Court might judge the statutes at

issue in this case. This is because the parties apparently

agree that their dispute boils down to the question of

whether two central criteria—criteria that reappear

throughout the United States Supreme Court’s various

dormant commerce clause tests and frameworks—are

satisfied. First, a state user fee or tax is presumed to

violate the dormant commerce clause if it facially discriminates against interstate commerce. See, e.g.,

United Haulers Assn., Inc. v. Oneida-Herkimer Solid

Waste Management Authority, 550 U.S. 330, 338, 127
S. Ct. 1786, 167 L. Ed. 2d 655 (2007). ‘‘In this context,

discrimination simply means differential treatment of

in-state and out-of-state economic interests that benefits the former and burdens the latter. . . . Discriminatory laws motivated by simple economic protectionism

are subject to a virtually per se rule of invalidity . . .

[that] can . . . be overcome [only] by a showing that

the [s]tate has no other means to advance a legitimate

local purpose . . . .’’ (Citations omitted; internal quotation marks omitted.) Id., 338–39. Second, a fee or

tax that is facially neutral nevertheless may offend the

dormant commerce clause if it has the practical effect

of imposing a burden on interstate commerce that is

disproportionate to the legitimate benefits. See, e.g.,

Dept. of Revenue v. Davis, supra, 553 U.S. 365 (Kennedy,

J., dissenting). We consider each criterion.

A

Facial Discrimination

The plaintiffs first contend that the challenged statutes discriminate on their face against interstate commerce because they impose higher recording fees only

on those transactions involving a mortgage nominee,

such as MERS, that operates in conjunction with a

national electronic database. The plaintiffs argue that

there is no apparent justification for penalizing companies that operate national databases, as opposed to a

hypothetical nominee operating a database that tracks

only mortgage loans transferred between Connecticutbased entities or securing Connecticut-based properties. For this reason, they contend, §§ 7-34a (a) (2) and

49-10 (h) presumptively violate the dormant commerce

clause. There are at least four problems with this

argument.

First, although the plaintiffs correctly note that a

statute can facially discriminate against interstate commerce even if it does not expressly favor in-state over

out-of-state businesses; see Healy v. Beer Institute, 491

U.S. 324, 340–41, 109 S. Ct. 2491, 105 L. Ed. 2d 275

(1989); the United States Supreme Court nevertheless

has emphasized that ‘‘[t]he central rationale for the rule

against discrimination is to prohibit state or municipal

laws whose object is local economic protectionism,

laws that would excite those jealousies and retaliatory

measures the [c]onstitution was designed to prevent.’’

C & A Carbone, Inc. v. Clarkstown, 511 U.S. 383, 390,

114 S. Ct. 1677, 128 L. Ed. 2d 399 (1994); see also Dept.

of Revenue v. Davis, supra, 553 U.S. 337–38 (‘‘economic

protectionism . . . designed to benefit in-state economic interests by burdening out-of-state competitors’’

is paradigmatic form of discrimination [internal quotation marks omitted]); Healy v. Beer Institute, supra,

326 (challenged statute ensured favorable pricing for

residents of Connecticut and maintained competitiveness of Connecticut-based retailers); Philadelphia v.

New Jersey, 437 U.S. 617, 624, 98 S. Ct. 2531, 57 L. Ed.
2d 475 (1978) (‘‘[t]he crucial inquiry . . . must be

directed to determining whether [the challenged statute] is basically a protectionist measure, or whether it

can fairly be viewed as a law directed to legitimate local

concerns, with effects [on] interstate commerce that

are only incidental’’). In the present case, there is no

indication that the legislative choice to impose higher

fees on nominees—whether in state or out of state—

who operate national mortgage databases reflected an

invidious discrimination against out-of-state interests,

or an effort to favor Connecticut-based financial companies. If anything, the opposite is true, as the likely result

will be that Connecticut homeowners, who, the parties

agree, typically absorb the higher upfront fees for

MERS-listed loans, will subsidize out-of-state banks and

government sponsored financing corporations or their

agents, who, upon acquiring the loans in the secondary

market, will receive the benefits of recordings in the

public land records without having to pay the associated

costs. See United Haulers Assn., Inc. v. Oneida-Herkimer Solid Waste Management Authority, supra, 550

U.S. 345.

Nor do we believe that the hypothetical favored mortgage nominee the plaintiffs conjure up—one that operates a Connecticut only electronic database—is anything other than a chimera. Because the secondary residential mortgage market is national in scope and is

dominated by federal agencies that are located outside

of this state, there would be no reason for a company

to invest in an electronic registration system that tracks

only loan transfers between Connecticut investors, or

only loans issued in connection with Connecticut-based

properties.11 The plaintiffs do not contend that any such

competitor currently exists or is likely to emerge in the

foreseeable future. As the Supreme Court explained in

Associated Industries v. Lohman, 511 U.S. 641, 114 S.

Ct. 1815, 128 L. Ed. 2d 639 (1994), ‘‘[it has] never deemed

a hypothetical possibility of favoritism to constitute

discrimination that transgresses constitutional commands.’’ Id., 654; see also Exxon Corp. v. Governor, 437

U.S. 117, 125, 98 S. Ct. 2207, 57 L. Ed. 2d 91 (1978)

(disparate treatment claim was meritless when state’s

entire gasoline supply flowed in interstate commerce).

Second, notwithstanding the statutory reference to

national electronic databases; General Statutes § 7-34a

(a) (2) (C); we do not interpret the challenged statute

to be a facial attack on interstate commerce. Rather,

the record suggests—and the plaintiffs conceded at oral

argument—that the language in question appears in § 7-

34a only because the legislature cut and pasted it from

MERS’ own corporate documents describing the company’s business model. In other words, the legislature’s

apparent intent was not to impose higher recording fees

on residential mortgage transactions with a national

character but, rather, merely to indicate that the higher

fees are directed at MERS and any other mortgage nom-
inees that may develop virtual recording systems to

facilitate transactions in the secondary mortgage market. It is only because that market, like many modern

financial markets, happens to be national in scope that

the ‘‘national electronic database’’ language found its

way into § 7-34a.12 Both this court and the United States

Supreme Court have emphasized in this regard ‘‘the

importance of looking past the formal language of [a]

tax statute [to] its practical effect . . . .’’ (Internal quotation marks omitted.) Chase Manhattan Bank v.

Gavin, 249 Conn. 172, 210, 733 A.2d 782, cert. denied,

528 U.S. 965, 120 S. Ct. 401, 145 L. Ed. 2d 312 (1999);

accord Quill Corp. v. North Dakota ex rel. Heitkamp,

504 U.S. 298, 310, 112 S. Ct. 1904, 119 L. Ed. 2d 91 (1992).

As we discuss hereinafter, we perceive no deleterious

effect of the challenged legislation on the national secondary mortgage market.

Third, the United States Supreme Court has explained

that ‘‘a fundamental element of dormant [c]ommerce

[c]lause jurisprudence [is] the principle that any notion

of discrimination assumes a comparison of substantially similar entities.’’ (Internal quotation marks omitted.) Dept. of Revenue v. Davis, supra, 553 U.S. 342. As

we explained in part III of this opinion, MERS is not

substantially similar to other mortgagees—even other

mortgage nominees—with respect to the roles they play

in Connecticut’s residential mortgage recording market.

Whereas traditional mortgagees are primarily lenders

or loan servicing companies, MERS is identified as a

mortgagee in the public land records as a sort of placeholder, indicating to interested parties that the recent

chain of title to a MERS-listed property may be traced

by consulting the MERS database. Accordingly, the statutes do not facially discriminate against interstate commerce. Rather, they simply recognize that MERS, which

uses the public land records as a means of enhancing

the value that its member companies obtain from its

electronic registration services, may realize a distinct

and greater benefit from recording its interests than do

other mortgagees.

Fourth, and relatedly, even if we believed that the

statutes in question discriminated against interstate

commerce, we would conclude, for reasons discussed

in part III of this opinion, that there is no constitutional

violation because such discrimination advances a legitimate local purpose. See, e.g., Camps Newfound/Owatonna, Inc. v. Harrison, supra, 520 U.S. 581. It is well

established that interstate commerce can be made to

‘‘pay its way’’ under a state regulatory scheme without

running afoul of the dormant commerce clause. (Internal quotation marks omitted.) Commonwealth Edison

Co. v. Montana, 453 U.S. 609, 616, 101 S. Ct. 2946, 69

L. Ed. 2d 884 (1981). In the present case, to the extent

that the purpose of the challenged legislation was

merely to recoup from MERS the recording fees that

its members otherwise would have paid upon the trans-
fer of a mortgage in the secondary market, §§ 7-34a (a)

(2) and 49-10 (h) represent a legitimate attempt to level

the playing field between MERS members and nonmembers and to ensure that recording revenues are not lost

as a result of MERS’ novel business model. For all of

the foregoing reasons, we agree with the state that

the statutes do not discriminate impermissibly against

interstate commerce.

B

Undue Burden

We next consider the plaintiffs’ claim that the challenged statutes place an undue burden on the national

secondary mortgage market. Their argument appears

to be that, despite the dearth of any evidence that the

increased fees have adversely impacted MERS’ business

orthe secondary mortgage market in general,the simple

fact that the state receives more than $5 million per

year in increased fees on MERS-related transactions is,

ipso facto, proof that interstate commerce has been

burdened. The plaintiffs further contend that, because

both the costs to the state and the benefits to the filers

are the same for the recording of MERS and non-MERS

transactions, but MERS is forced to pay fees that are

approximately three times higher than other mortgagees, the costs imposed are necessarily disproportionate

to the benefits. We are not persuaded.

The amount of a tax or user fee is presumed to be

appropriate; S. Wolfe, supra, 26 Stetson L. Rev. 739;

and the plaintiffs must demonstrate that the burdens

imposed on interstate commerce clearly outweigh the

benefits. See, e.g., Dept. of Revenue v. Davis, supra,

553 U.S. 353. As we explained in part III of this opinion,

we are not convinced that either the costs or the benefits of recording a MERS-listed mortgage are the same

as for any other mortgagee. Let us assume that a hypothetical non-MERS thirty year mortgage loan is transferred to a different lender every ten years during the

life of the loan and that each subsequent holder records

its interest in the public land records. Under that scenario, the original lender’s recording fees would afford

it the benefit of ten years of public notice of its interest

in the property, and the clerk’s office would receive

three recording fees—the initial one and the fees for

two assignments—to subsidize its costs of operation

overthe term of the loan, not including the release when

the loan is fully repaid. Under the same circumstances,

however, MERS and its members would continue to

receive the benefit of the initial filing fee for the entire

thirty year term of the loan, regardless of the number

of intervening assignments among MERS members, and

the clerk’s office will be correspondingly poorer. See

S. Wolfe, supra, 742 (noting that length of use of public

service ‘‘strongly affects cost’’); id., 744 (noting importance of intangibles in calculating value of public service and that continued consumer use suggests that
fees are not disproportionate to value provided).

Accordingly, we cannot say that imposing higher frontend and back-end fees on MERS transactions in order

to compensate for the reduced number of recorded

mortgage assignments imposes an undue burden on

MERS or, by extension, interstate commerce. See Associated Industries v. Lohman, supra, 511 U.S. 647 (interstate and intrastate transactions may be taxed differently, as long as ultimate burdens are comparable).

The United States Supreme Court also has suggested

that, in gauging the burdens imposed on interstate commerce, a reviewing court should consider whether, if

every state were to adopt the challenged policy, the

result would be to ‘‘place interstate commerce at a

disadvantage as compared with commerce intrastate.’’

(Internal quotation marks omitted.) Comptroller of the

Treasury v. Wynne, supra, 135 S. Ct. 1802. In the present

case, even if every state were to charge $106 extra to

record MERS-listed mortgages in its corresponding land

records, there is nothing in the record to suggest that

those higher fees, taken together, would unduly burden

interstate commerce. There is no indication that higher

recording fees would so overshadow the benefits of

participation in a national electronic registration system

that borrowers and lenders would opt not to participate

in MERS or that the vitality of the secondary mortgage

market would be compromised. The parties have agreed

that higher fees have not resulted in a loss of MERS

business within this state, and there is no reason to

believe the outcome would differ elsewhere, or nationally. Nor is there any evidence of (1) what share of

the estimated $5.4 million that the state will receive in

additional annual recording fees will be borne by MERS

and its members, and how that amount compares to

the annual profits on their residential mortgage lending

business in Connecticut,(2) what share of the increased

fees will be borne by borrowers, and what impact those

fees will have on their total closing costs, or (3) what

cost savings MERS, its members, and borrowers in

MERS-related transactions have achieved as a result of

the MERS system. We are mindful in this regard of the

United States Supreme Court’s recent guidance that the

judiciary is particularly ill-suited to making the sorts of

complex predictions and subtle cost-benefit calculations necessary to assess whether a particular tax

scheme is unduly burdensome. See Dept. of Revenue

v. Davis, supra, 553 U.S. 355.

In Davis, the United States Supreme Court also cautioned that a court ‘‘should be particularly hesitant to

interfere . . . under the guise of the [c]ommerce

[c]lause [when] a [state or] local government engages

in a traditional government function,’’ of which the

maintenance of public land records is clearly an example.(Internal quotation marks omitted.)Id., 341, quoting

United Haulers Assn., Inc. v. Oneida-Herkimer Solid

Waste Management Authority, supra, 550 U.S. 344. In
light of this guidance, and given the parties’ stipulation

that the legislation at issue has not redounded to the

tangible detriment of the MERS business model, we are

compelled to defer to the legislature’s judgment that

the fees at issue represent a reasonable approximation

of the savings in recording costs generated by use of

the MERS system. Accordingly, §§ 7-34a (a) (2) and 49-

10 (h) do not offend the dormant commerce clause,13

and we reject the plaintiffs’ claim to the contrary.14

The judgment is affirmed.

In this opinion the other justices concurred.

1 We hereinafter refer to the defendants collectively as the state.

2 The plaintiffs appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to General

Statutes § 51-199 (c) and Practice Book § 65-1.

The plaintiffs have not appealed from the trial court’s ruling that the

challenged statutes do not offend the takings provisions of the federal and

state constitutions, and, accordingly, those claims are not before us.

We granted permission for two groups to file amicus curiae briefs: the

Connecticut Bankers Association, Connecticut Mortgage Bankers Association, and American Land Title Association; and the Jerome N. Frank Legal

Services Organization and the Connecticut Fair Housing Center.

3 For the sake of brevity, in this opinion, we use the term MERS to refer

to (1) the electronic recording system, (2) the entities that are the plaintiffs

in this case, in their capacity as operators of the MERS system, and (3) the

general model according to which changing legal interests in residential

mortgages and mortgage loans are recorded in the MERS system.

4 The state interprets § 7-34a (a) (2) (B) to mean that, in addition to the

$159 recording fee, a nominee of a mortgagee filing an assignment or release

under that subparagraph must pay $10 for the first recorded page and $5

for each additional page pursuant to § 7-34a (a) (1). The plaintiffs contend

that it is unclear whether town clerks are permitted to charge these additional fees, in light of the statement in § 7-34a (a) (2) (B) that ‘‘[n]o other

fees shall be collected from the nominee for such recording.’’ For purposes

of this appeal, because we glean from the state’s brief that these additional

fees are in fact being imposed on the plaintiffs, and that they are therefore

a subject of the plaintiffs’ complaint, we assume without deciding that the

statute authorizes such additional fees.

5 See footnote 4 of this opinion.

6 Because a challenge to the constitutionality of a statute presents a question of law, our review is plenary. E.g., Keane v. Fischetti, 300 Conn. 395,

402, 13 A.3d 1089 (2011). We recognize, however, that legislation that structures and accommodates the burdens and benefits of economic life carries

a strong presumption of constitutionality. See, e.g., Schieffelin & Co. v.

Dept. of Liquor Control, 194 Conn. 165, 186, 479 A.2d 1191 (1984).

7 The equal protection clause of the fourteenth amendment to the United

States constitution provides that no state shall ‘‘deny to any person within

its jurisdiction the equal protection of the laws.’’ U.S. Const., amend. XIV,

§ 1. Article first, § 20, of the constitution of Connecticut provides in relevant

part: ‘‘No person shall be denied the equal protection of the law . . . .’’

Neither party contends that the state and federal constitutional analyses

diverge with respect to equal protection challenges to tax and fee statutes.

Accordingly, for purposes of this case, we treat the relevant state and federal

protections as coextensive. See, e.g., Keane v. Fischetti, 300 Conn. 395, 403,

13 A.3d 1089 (2011).

8 The plaintiffs also contend that the amendments to §§ 7-34a and 49-10

were motivated by an impermissible desire to punish MERS for its business

model. The trial court rejected this allegation, and we find no support for

it in the legislative history. Even if it were true, however, the outcome of

our analysis would be no different. As long as the challenged distinction is

rationally related to some legitimate public purpose that conceivably may

have motivated the legislature, it is irrelevant whether certain legislators

also may have been motivated by animus toward the plaintiffs. See, e.g.,

United States v. O’Brien, 391 U.S. 367, 383–84, 88 S. Ct. 1673, 20 L. Ed. 2d

672 (1968); see also Wisconsin Education Assn. Council v. Walker, 705 F.3d

640, 653 (7th Cir. 2013).

9 The equal protection cases on which the plaintiffs rely are readily distin-
guishable, as they primarily address legislative distinctions that (1) implicate

federalism or other constitutional interests, (2) are transparently arbitrary

and without rational basis, or (3) impose criminal or quasi-criminal sanctions. See, e.g., Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432,

449–50, 105 S. Ct. 3249, 87 L. Ed. 2d 313 (1985) (in rare case in which

United States Supreme Court held that challenged social legislation failed

to withstand rational basis review, court concluded that irrational fear of

mentally disabled individuals did not justify discriminatory zoning ordinance); Williams v. Vermont, 472 U.S. 14, 23, 105 S. Ct. 2465, 86 L. Ed. 2d

11 (1985) (state impermissibly discriminated against nonresidents); Zobel

v. Williams, 457 U.S. 55, 64, 65, 102 S. Ct. 2309, 72 L. Ed. 2d 672 (1982)

(apportioning state benefits on basis of duration of residency would impermissibly divide citizens into castes and unduly infringe interstate travel

rights); James v. Strange, 407 U.S. 128, 138–39, 92 S. Ct. 2027, 32 L. Ed. 2d

600 (1972) (statute imposed ‘‘unduly harsh or discriminatory terms’’ on

indigent criminal defendants and potentially infringed right to counsel); City

Recycling, Inc. v. State, supra, 257 Conn. 453 (trial court’s specific factual

findings ‘‘directly negate[d] every conceivable rational basis for the legislation’’); State v. Reed, 192 Conn. 520, 531–32, 473 A.2d 775 (1984) (quasi-penal

statute imposing liability for hospital care expenses on certain confined

individuals but not others was deemed to be ‘‘entirely arbitrary’’); Caldor’s,

Inc. v. Bedding Barn, Inc., 177 Conn. 304, 316–18, 417 A.2d 343 (1979)

(applying stricter standard in case of penal statute); see also Allegheny

Pittsburgh Coal Co. v. County Commission, 488 U.S. 336, 345, 109 S. Ct.

633, 102 L. Ed. 2d 688 (1989) (county assessor failed to comply with uniform

state tax policy).

10 Because the statutory scheme at issue in this case allocates a portion

of the nominee filing fees to the state’s general fund and municipal accounts,

and a portion to the town clerks and the state’s community investment

account, the fees have characteristics of both general and special revenue taxes.

11 To the extent that they suggest otherwise, the plaintiffs place the cart

before the horse. The amici consisting of the bankers associations and the

land title association, who support the plaintiffs’ position in this case, have

presented scholarship indicating that it was the national mortgage lending

industry and government sponsored financing corporations such as Fannie

Mae and Freddie Mac that partnered to create MERS to fill the need for a

central registry for the national residential mortgage industry. See R. Arnold,

‘‘Yes, There Is Life on MERS,’’ 11 Prob. & Prop. 33, 33 (1997); see also P.

Sargent & M. Harris, ‘‘The Myths and Merits of MERS’’ (September 25, 2012).

From its very inception, then, the MERS business was necessarily national

in scope.

12 Although the plaintiffs suggest in their reply brief that the statutes

bespeak a legislative intent to punish MERS for transacting business outside

of Connecticut, there is no evidence in either the record of this case or the

legislative history to support such a suggestion.

13 It might also be argued that, insofar as the state’s purpose in imposing

higher recording fees on MERS-listed mortgages is to prevent a competitor

in the mortgage recording business from free riding on its public recording

system, the state acts as a market participant—as well as a regulator—

with respect to MERS and, therefore, is immune from challenge under the

dormant commerce clause. See, e.g., Dept. of Revenue v. Davis, supra, 553

U.S. 339; SSC Corp. v. Smithtown, 66 F.3d 502, 510–12 (2d Cir. 1995), cert.

denied, 516 U.S. 1112, 116 S. Ct. 911, 133 L. Ed. 2d 842 (1996); see also

McBurney v. Young, U.S. , 133 S. Ct. 1709, 1720, 185 L. Ed. 2d 758

(2015) (state, having created market by offering program, does not offend

dormant commerce clause by restricting access to that market so as to favor

local interests). Because neither party has raised this argument, however, we

need not consider it.

14 On appeal, the plaintiffs also contend that enforcement of the challenged

statutes violates their substantive due process rights under the federal and

state constitutions, the federal constitutional prohibition against bills of

attainder, and 42 U.S.C. § 1983. We have reviewed these claims and, for

essentially the same reasons that we rejected the equal protection and

commerce clause claims, we find them to be without merit.