Document: 441 U.S. 434 99 S.Ct. 1813 60 L.Ed.2d 336 JAPAN LINE, LTD., et al., Appellants,v.COUNTY OF LOS ANGELES al. No. 77-1378. Argued Jan. 8, 1979. Decided April 30, Syllabus Appellant Japanese shipping companies' vessels carry cargo containers which, like the ships, are owned by appellants, based, registered, and subjected to property tax in Japan, used exclusively foreign commerce. A number of appellants' were temporarily present appellee county cities California, appellees levied taxes on containers. The California Supreme Court upheld as applied. Held : 1. This has appellate jurisdiction under 28 U.S.C. § 1257(2), since sustained tax, applied, against contention that such application would violate Commerce Clause various treaties. Pp. 440-441. 2. It is unnecessary decide broad proposition whether mere use international routes enough, "home port doctrine," render an instrumentality immune from a nondomiciliary State. question here more narrow one, namely, instrumentalities commerce owned, registered abroad, commerce, may be apportioned ad valorem taxation 441-444. 3. While Complete Auto Transit, Inc. v. Brady, 430 274, 97 1076, 51 326, no impermissible burden interstate will found if state "is applied activity with substantial nexus taxing State, fairly apportioned, does not discriminate related services provided State," id., at 279, 1079, elaborate inquiry necessary when State seeks foreign, rather than interstate, In addition answering nexus, apportionment, nondiscrimination questions posed Auto, court must also inquire, first, notwithstanding creates risk multiple taxation, and, second, prevents Federal Government "speak[ing] one voice regulating commercial relations governments." Michelin Tire Corp. Wages, 423 276, 285, 96 535, 540, 46 495. If contravenes either these precepts, it unconstitutional Clause. 444-451. 4. containers, Clause, results Moorman Mfg. Co. Bair, 437 267, 98 2340, 57 197, distinguished, this Nation "speaking voice" trade thus inconsistent Congress' power "regulate Nations." 451-457. 20 Cal.3d 180, 141 Cal.Rptr. 905, 571 P.2d 254, reversed. Peter L. Briger, New York City, for appellants. Kent Jones, Dept. Justice, Washington, D. C., pro hac vice United States, amicus curiae. James Dexter Clark, Deputy County Counsel, Los Angeles, Cal., appellees. Mr. Justice BLACKMUN delivered opinion Court. 1 case presents consistently Constitution, impose nondiscriminatory foreign-owned (cargo containers) 2 * facts "stipulated appeal," App. 29, trial court, 33-36, follows: 3 Appellants six companies; they incorporated laws have their principal places business domiciles country. Id., 34. operate commerce; Japan home ports there. Ibid. specifically designed constructed accommodate large containers.1 hire transportation 35. Each container constant transit save time spent undergoing repair or awaiting loading unloading cargo. All subject fact, taxed 4 Appellees political subdivisions California. Appellants' course journeys, pass through appellees' jurisdictions intermittently. Although none stays permanently some there any given time; container's average stay less three weeks. engage intrastate except continuations voyages. 30. Any movements periods nonmovement essential to, inseparable from, containers' efficient 35-36. 5 Property March (the "lien date" law) year tax. Cal.Rev. & Tax.Code Ann. §§ 117, 405, 2192 (West 1970 Supp.1979). physically lien dates 1970, 1971, 1972; was representative "average presence" during each year. excess $550,000 assessed value years question. 36. During same period, similar controlled steamship companies domiciled appeared therefore not, 6 paid taxes, so levied, protest sued refund Superior Angeles. That awarded judgment favor.2 39-40. had where taxed. federal courts, however, court's view, "consistently held which engaged can only." 24. rule, said avoid 23; whereas apportionment prevent duplicative "not practical" entities sovereign. cases, "[t]here tribunal adjudicate [competing] rights unless International invoke its consented all parties." derogation concluded, holding, followed Scandinavian Airlines System, 56 Cal.2d 11, 14 25, 363 cert. denied, 368 899, 82 175, 7 94 (1961) (hereinafter SAS) (ruling upon aircraft abroad Clause). Appeal 132 531 (1976). conclude SAS been effectively overruled Sea-Land Service, Alameda, 12 772, 117 448, 528 (1974). Sea-Land, criticized doctrine labeled "anachronistic," domestic corporation both intercoastal 787, Cal.Rptr., 458, P.2d, 66. rejected arguments different result required view ownership use. likewise dismissed argument taxation. "[T]he possibility double commerce," "no reason limit local them basis." 533.3 8 granted hearing it, too, reversed Court, essentially adopting Appeal. 254 (1977). concluded "the threat authorities role clause considerations burdens, burdens attributable discrimination matters agreement." 185, 908, 257. Deeming irrelevant purposes constitutional analysis, 186, 257-258, challenge validity applied.4 9 appealed. We postponed consideration our merits. 436 955, 3067, 1120 (1978). II 10 review final rendered highest decision could "where drawn statute ground being repugnant treaties favor validity." 1257(2). case, appellants drew California's contending treaties, Under circumstances, Court's seem manifest. 11 suggest courts did reality uphold attack, but simply refused extend immunity Motion Dismiss Affirm Appellees' suggested recharacterization unpersuasive. squarely challenged constitutionality statute, just validity, within meaning 1257(2) holds applicable particular set invalid grounds. E. g., Cohen 403 15, 17-18, 91 1780, 1784, 29 284 (1971); Warren Trading Post Arizona Tax Comm'n, 380 685, 686, n. 1, 85 1242, 1243, 165 (1965); Bantam Books, Sullivan, 372 58, 61 3, 83 631, 634, 584 (1963); Dahnke-Walker Milling Bondurant, 257 282, 288-290, 42 106, 107-108, 66 L.Ed. 239 (1921). we case. III A. doctrine" first alluded Hays Pacific Mail S. Co., 17 How. 596, 58 15 (1855). Hays, sought oceangoing intermittently touching ports. vessels' based; way Isthmus Panama, remained briefly unload undergo repairs. ships established situs California: 13 "We satisfied over purpose taxation; properly, abiding limits, become other personal State; temporarily, lawful port, belonged, owners liable capital invested, paid." 599-600. Because properly taxable all.5 enunciated corollary medieval maxim mobilia sequuntur personam ("movables follow person," see Black's Law Dictionary 1154 (rev. 4th ed. 1968)) resulted full domicile owner. theory course, fallen into desuetude, rule moving equipment, yielded fair among States. accordingly, taxed, basis, States travel. Pullman's Palace Car Pennsylvania, 18, 876, 35 613 (1891); Ott Mississippi Valley Barge Line 169, 69 432, 93 585 (1949); Braniff Airways, Nebraska Bd. Equalization, 347 590, 74 757, 967 (1954). discarding port" distinguished vessels. Palace, U.S., 23-24, 878 (approving railroad rolling stock, distinguishing "engaged high seas"); Ott, 173-174, S.Ct., barges navigating inland waterways, reach[ing] taxability ocean carriage"); Braniff, 600, 763 aircraft, "used plow open seas"). Relying argue yet vital, continues prescribe proper ships. Since "functionally part ship," Leather's Best, Mormaclynx, 451 F.2d 800, 815 (CA2 1971), conclude, only 16 argument, seen below, inner logic, decline cast analysis mold. claim unequivocal source; assessing legitimacy rely nor 1854, relied Due Process Fourteenth Amendment. basis rather, common-law tax.6 Given origins, "anachronistic"; underpinnings, indeed "abandoned." Northwest Airlines, Minnesota, 322 292, 320, 64 950, 964, 88 1283 (1944) (Stone, C. J., dissenting). As theoretical matter, then, rehabilitate tool somewhat odd. More importantly, hold survives prove too much. vessel logically barred, regardless domestically itself, waters. There need currently much is, State.7 B Constitution provides "Congress shall Power . To regulate Nations, several Indian Tribes." Art. I, cl. construing States," recently affirmed confers "interstate bear share burden." Washington Revenue Association Wash. Stevedoring Cos., 435 734, 750, 1388, 1399, 55 682 Instrumentalities exception regularly forms equipment. See supra (railroad stock); (barges waterways); (domestic aircraft). Cf. Central Greyhound Lines Mealey, 334 653, 663, 68 1260, 1266, 92 1633 (1948) (motor vehicles). found. 326 (1977); Dept., 1399. 18 contend vehicles transport, imposed meet 's fourfold requirements. argue, "substantial nexus" because times; based habitual employment 601, 764, habitually employed. moreover, "fairly apportioned," California.8 "does discriminate," thirdly, falls evenhandedly indeed, general application, necessity nondiscriminatory. finally, by" include police fire protection, benefits trained work force advantages civilized society. 19 These observations without force. assume that, issue purely apply satisfied, end. matter fact9 law.10 premise identical, involved. premise, rejected. When Nations," extensive required. two additional considerations, beyond those articulated come play. enhanced commonplace jurisprudence well offensive Evco 409 91, 94, 349, 351, 34 325 (1972); R. 370 607, 612, 1297, 1301, 720 (1962); Standard Oil Peck, 342 382, 384-385, 72 309, 310, 427 (1952); 174, 434; J. Adams Storen, 304 307, 311, 913, 915, 1365 (1938). order jurisdictions, value. principle, full. "The permits states precludes domicile. Otherwise operations." 310; 764. approval words, ability enforce potential bodies. 21 Yet neither ensure country right, custom nations, value.11 should seek inevitably results. Hence, fact means "multiple cannot occur," 746-747, 1397-98, conclusion, drawn. absence authoritative capable ensuring aggregation computed value, even though apportioned" reflect instrumentality's presence " 'to [domestic] exposed, forbids.' quoting 915. 22 Second, impair uniformity area essential. Foreign pre-eminently national concern. "In respect intercourse people act single government unified adequate power." Board Trustees 289 48, 59, 53 509, 510, 77 1025 (1933). grants Congress "with Nations" "among States" parallel phrases, evidence Founders intended scope greater.12 Cases stressing treating echo distinction.13 approving traffic, supra, 442; cases awareness necessitate uniform rule. Indeed, wrote 'vehicles water instruments intercommunication regulation assumed legislature.' 24, 878, Railroad Maryland, Wall. 456, 470, 678 (1875). Finally, discussing Import-Export 495 (1976), spoke Framers' overriding concern speak paramount ascertaining negative implications Clause.14 23 frustrate achievement ways. imposes disputes reconciling formulae arise.15 novel asymmetry structure, nations disadvantaged levy retaliate American-owned jurisdictions. Such retaliation directed American equipment general, whole suffer.16 State's example, varying degrees plainly 24 For reasons, believe mandated C 25 Analysis principles dictates impermissible. Assuming, arguendo, passes muster withstand scrutiny tests satisfy. 26 First, By stipulation, Japan; remain outside long needed complete missions. right produces fact. "are Japan," 32, but, found, "are, Japan." Thus, levies sustained, "would paying tax." 23.17 27 trade. desirability treatment evidenced Customs Convention Containers, signed. 10, supra. Convention, imported admitted free "all duties whatsoever chargeable importation." U.S.T., 304. reflects policy remove impediments "instruments traffic." 1322(a). attainment uniformity. stipulated Japan. maritime operating Japan's disadvantage. acute, felt whole.18 example (Oregon already done so19), depending enter. result, obviously, make impossible. unilateral act, permitted place before Nation's conduct trade, D proffer objections holding. They contend, attributable, say, trying take share; foreclosed election evaluated realistic framework nations. value; nothing doing so. context. 277, 12, 2346, 197 domiciliary "to blame" exacting excessive able insist rationalization apportionment. noted above, powerless correct malapportionment 30 secondly, created cured congressional action agreement. find merit contention. demonstrable pre-empted field affirmative regulation. But "accepted clause, aid Congressional legislation affords protection inimical acted, legislature, arbiter competing demands interests." Southern ex rel. 761, 769, 65 1515, 1520, 89 1915 (1945). Accord, Hughes Oklahoma, 322, 2, 1727, 1731, 250 (1979); Boston Stock Exchange 429 318, 328, 599, 606, 50 514 defeats, supports, cause aims promote. say problem susceptible congressional—indeed, international—solution concede tell how run policies. 31 Third, after insufficient condemn Moorman, invalidate Iowa's single-factor income formula, credible overlapping three-factor opinions dissent. 281, 283, 2348-2349. quite one. existence record then "speculative," 2346; arose, lack mathematical imprecision formulae. Yet, call exactness rigid formula; resulting valuation palpably aside." 325, 2345 (citing cases). Hellerstein, Taxation Clause: An Historical Perspective, Vand.L.Rev. 335, contrast, involves apportionment; situation true exist policed all. concerned concerns Even slight tax—a might deemed de minimis context—assumes importance sensitive sovereignty concerned.20 32 arguments. complain, lose revenue, California; go uncompensated undeniably renders containers; exempting effect forced domestic, weight, extent recoup user fees, today. arguments, wrong forum. "Whatever subjects [the commercial] nature national, admit system, plan regulation, justly require exclusive Congress." Cooley Wardens, 299, 319, 996 (1852). problems refer remedy. do solution 33 ordered. Substantially reasons forth Manuel his unanimous REHNQUIST affirmed. "A permanent reusable article transport durably made metal, equipped doors easy access goods repeated facilitate handling, loading, stowage aboard ship, carriage, discharge movement, transfer numbers packages simultaneously mechanical minimize cost risks manually processing package." Simon, Shipping Mar. Com. 507, 513 I(b), 1956, [1969] U.S.T. 301, 304, T. I. 6634. small cubic meter (35.3 feet), 49 CFR 420.3(c)(5) (1977), typically feet high, wide, between 40 long. Com., 510. officially reported. rejected, 534, prohibited XI, 4, XXII, Treaty Friendship, Navigation Between America Apr. 1953, [1953] 2063, T.I.A.S. 2863 (providing nationals residing payment "more burdensome borne nationals, according "most favored nation" status). repeat here, reject it. provisions cite interdict nationals; treated differently applying 533, constituted indirect "Duty Tonnage" proscribed U.S.Const., here; disposition, reach due process 532 either. "Imposts Duties" Cal.3d, 186-188, 908-910, 258-259. reiterate consider petition rehearing, argued contravened III, General Agreement Tariffs Trade (GATT), Stat. A18 "imported products" heavier favorable treatment, products origin). Pet. Rehearing 35-40. latter sub silentio. 190, 254. deem frivolous. entering re-exportation, GATT, prohibit discriminatory treatment. reaffirmed, vessels, Morgan Parham, 471, 476-477, 302 (1873), Kentucky, 222 63, 69, 13, (1911). waters St. Louis Ferry 423, (1871), Ayer Lord Tie 202 409, 421-423, 679, 682-683, 1082 (1906). See, e. Note, Calif.L.Rev. 968, 970-971 (1961); Air Transportation, Stan.L.Rev. 518, 522, (1959); Page, Jurisdiction Tangible Movables, 1945 Wis.L.Rev. 125, 143-144. Accordingly, (1974) (domestically tax); Flying Tiger Line, 314, 333 323 (1958) tax). date," roughly apportions mobile weeks year, arbitrarily selected date 3/52 total Taxing presence," i. e., spends per "instrumentalities commerce" constantly commerce." 35, entered pursuant "temporary admission import prohibitions restrictions," solely re-exportation. Similarly, 10.41a(a)(3) (1978) designates traffic," "may released entry duty" 10.41a(a)(1) bilateral associates them, "derived resident Contracting use, maintenance, lease connection operation traffic exempt State." Avoidance Double Taxation, [1972] 967, 1084-1085, 7365. Oceangoing generally nation registry; explains phenomenon "flags convenience" (a term derogatory quarters), whereby flags countries permit "at nominal level taxation." B. Boczek, Flags Convenience 5, 56-57 (1962). Aircraft apparently, "subject unapportioned origin." Stan.L.Rev., 6, 519, 11. SAS, 17, 28, Federalist 42, pp. 279-283 (J. Cooke 1961) (Madison); M. Farrand, Records 1787, p. 478 (1911) (Madison). Carriers, Nw.U.L.Rev. 92, 101, 525-526, 29; Abel, Constitutional Contemporary Comment, Minn.L.Rev. 465-475 (1941) (concluding, exhaustive survey contemporary materials: "Despite formal parallelism grants, tenable believing anywhere nearly range 'among states' 'with nations.' 475). Buttfield Stranahan, 192 492-493, 354, 48 525 (1904) ("exclusive absolute" commerce); Bowman Chicago N. 125 465, 482, 689, 697, 700 (1888) ("It [that] inference excludes affecting strongly Laws exterior governments nature, proceed legislative authority nation"); Henderson Mayor York, 259, 273, 543 (1876) (regulation "must character" affects "a relations, regard ought considered respected"); Gibbons Ogden, Wheat. 228-229, (1824) (Johnson, concurring). Atlantic Cleaners Dyers, 286 427, 434, 52 609, 76 1204 (1932). National League Cities Usery, 426 833, 2465, 245 restricted federalism sovereignty. never limited. policies animating same. Michelin, met main concerns: ; revenues major source revenue diverted States; harmony disturbed seaboard levying [goods transit]." 285-286, 540-541 (footnotes omitted). observed concerns. Minn.L.Rev., 67, 452, 81, 456-457, 110 (need deal manner nations); 446-451 preserve revenue); 448-449, nn. 69-70, 470-471, 472-473 disharmony account duties). (1978), third factor—preserving Interstate 754-755, 1401-1402. similarly, factor—the governments—mandates holding voice," noted: "No taxed." 754, 1401. Developments Law—Federal Limitations Business, 75 Harv.L.Rev. 953, 986 (1962) (noting difficulty allocating "international bridge time" consequent formulae, concluding forbidden). Chy Lung Freeman, 275, 550 (invalidating bond requirement Chinese immigrants): "[I]f plaintiff her twenty companions Queen Great Britain, doubt inquiry, direct redress? Upon whom made? Not for, she get lead war, suspension intercourse, alone suffer, Union?" stipulation facts, finding, "[a]ll [appellants] are, further uniformly insisted, Brief 9; Tr. Oral Arg. unapportioned, understand finding. seriously understanding, 10-11, curiae Multistate Commission suggests inadequate establish fact: says, offer "credits elsewhere." 8. Amicus support theory. Both Solicitor General, Curiae 9, Department 17a, assure us "full value," accept interpretation factual occasion what circumstances opposed Compare 276-277, 746, 1397, with, 615, 1303, 435, Retaliation automatic. West Germany's wealth exemption owner's reciprocal German-owned instrumentalities. Vermogensteuergesetz (VStG), 2(3), reprinted I Bundesgesetzblatt (BGB1) 950 (Apr. 23, 1974). European Economic Community (EEC), apprised apparently determined "suitable counter-measures." Press Release, Council Communities 521st Meeting—Transport (Luxenbourg, June 1978), 21. Ore.Op.Atty.Gen.No.7709 (Jan. 31, 1979) below). reliance Bob-Lo Excursion Michigan, 358, 455 (1948), misplaced. appellant, Michigan corporation, transported passengers Detroit amusement park island Province Ontario; appellant Negro prosecuted civil statute. sustaining statute's emphasized conducted "foreign name only. sole park, catered patrons. Canadian shore island," 36, 362, "economically socially adjunct city Detroit." 362. "highly closed localized manner" insulated "from social another usually characteristic conflicting "so remote [was] hardly conceivable," 37, 363, "difficult imagine interest policy, securing otherwise, reasonably adversely affected Michigan's outweigh so." 40, 364. consistent Whereas burdened "remote," realized And Government's "speak impairment worked substantial.

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