Source: http://supreme.justia.com/cases/federal/us/557/08-310/dissent.html
Timestamp: 2014-08-22 21:37:23
Document Index: 84858676

Matched Legal Cases: ['§10', '§3', '§3', '§3', '§3', '§3', '§3', '§3']

Polar Tankers, Inc. v. City of Valdez :: 557 U.S. ___ (2009) :: Justia US Supreme Court Center Justia.comFind a LawyerLegal AnswersLawMore ▾Justia BlogVerdictLaw Blog DirectoryLegal FormsUS Law US Supreme Court Cases Federal Cases US Constitution US Code Federal RegulationsFederal DocketsState CasesState Codes & StatutesTrademarksPatentsCompany Legal ProfilesMarketing ServicesSign InSearchJustia › US Law › US Case Law › US Supreme Court › Volume 557 › Polar Tankers, Inc. v. City of Valdez › Dissent
Sign up for Justia's FREE Newsletters: Daily Opinion Summaries by Court (covering the U.S. Supreme Court, all Federal Appellate Courts, and the 50 State Supreme Courts), and Weekly Opinion Summaries by Practice Area. Subscribe NowPolar Tankers, Inc. v. City of Valdez557 U.S. ___ (2009)Annotate this CaseOpinionPDFSyllabusOpinion
VALDEZ, ALASKAon writ of certiorari to the supreme court of alaska[June 15, 2009] Justice Stevens, with whom Justice Souter joins, dissenting.
The Tonnage Clause prohibits the States and their political subdivisions from charging ships for the privilege of using their ports. Because this case does not involve such a charge, I respectfully dissent.I
The Tonnage Clause commands that “No State shall, without the Consent of Congress, lay any Duty of Tonnage.” U. S. Const., Art. I, §10, cl. 3. As the Court asserts, the purpose of the Clause is to prevent States with convenient ports from abusing the privileges their natural position affords. See ante, at 3–4. Thus, the pertinent inquiry in determining whether an exaction violates the Clause’s prohibitions is whether the charge is “ ‘in its essence a contribution claimed for the privilege of arriving and departing from a port.’ ” Transportation Co. v. Wheeling, 99 U. S. 273, 283–284 (1879) (quoting Cannon v. New Orleans, 20 Wall. 577, 581 (1874)); see Clyde Mallory Lines v. Alabama ex rel. State Docks Comm’n, 296 U. S. 261, 265–266 (1935). In applying that principle, we have been cognizant of its limits. By its terms, the Tonnage Clause prohibits States from imposing a duty on ships based on their internal cubic capacity, see id., at 265, and it similarly prohibits charges that “effect the same purpose” as a duty of tonnage—for instance, by imposing a duty based “on the number of masts, or of mariners, the size and power of the steam-engine, or the number of passengers which she carries,” Passenger Cases, 7 How. 283, 458–459 (1849) (opinion of Grier, J.). By contrast, charges levied for other purposes are outside the Clause’s reach. This Court has often approved charges for services rendered to ships to ensure their safe and convenient use of a port. See Clyde Mallory, 296 U. S., at 266–267. And the federal interest in protecting access to the ports generally does not prevent States from charging shipowners those taxes and fees that the States are also authorized to levy on other property. See Wiggins Ferry Co. v. East St. Louis, 107 U. S. 365, 375, 376 (1883) (upholding a “license tax” “laid upon the business of keeping a ferry”); Wheeling, 99 U. S., at 279 (upholding a property tax on ships).
Our decision in the State Tonnage Tax Cases is to the same effect, as we held that taxes levied on ships “as property, based on a valuation of the same as property, are not within the prohibition of the Constitution,” but if States tax ships “by a tonnage duty, or indirectly by imposing the tax upon the master or crew, they assume a jurisdiction which they do not possess.” 12 Wall., at 213, 214 (emphasis in original). Indeed, each of the taxes challenged in that case was invalidated because it was “levied on the steamboats wholly irrespective of the value of the vessels as property, and solely and exclusively on the basis of their cubical contents.” Id., at 217; see id., at 224 (holding the tax unconstitutional because “the amount of the tax depends upon the carrying capacity of the steamboat and not upon her value as property”).[Footnote 2] Thus, in both Wheeling and the State Tonnage Tax Cases,the method by which the challenged tax was calculated was essential to the Court’s determination of its validity.
In support of its understanding of the “same manner” requirement, the plurality asserts that the rule “helps to assure that a value-related property tax differs significantly from a graduated tax on a ship’s capacity and that the former is not simply a redesignation of the latter.” Ante, at 9. But our cases provide such assurance without resort to the plurality’s strained reading. Because States and their political subdivisions only have authority to tax property that has established a tax situs in the jurisdiction, they cannot levy such taxes on ships merely for the privilege of entering or leaving the port; much more substantial contact with the jurisdiction is required. See Valdez Municipal Code §3.12.020(C) (2008); Central R. Co. of Pa. v. Pennsylvania, 370 U. S. 607, 614–615 (1962). And it is that contact, rather than entry into the port, that provides the basis for taxing the ships. The tax situsrequirement thus ensures that a State cannot avoid the proscriptions of the Tonnage Clause by redesignating a duty charged for the privilege of entering the port as an ad valoremtax.
The facts of this case illustrate the point. Most of petitioner’s ships spend 40-to-50 days per year in the Port of Valdez. See App. 32–45. “[A]s a group the tankers form a continuous presence in the city.” 182 P. 3d, at 623. The ships’ prolonged physical presence and extensive commercial activities in the city have a substantial impact on the city’s resources. On average, the ships’ presence adds 550 people to the population of Valdez, increasing the city’s total population by 10%. Those people, as well as the ships themselves, require numerous public services, including harbor facilities, roads, bridges, water supply, and fire and police protection. Ibid. As the Alaska Supreme Court concluded, the challenged tax is therefore a legitimate property tax levied to support the ships’ use of the city’s services. See ibid.II
Even if the Tonnage Clause were properly understood to permit a jurisdiction to levy a tax on ships only when other property in the jurisdiction is also taxed, I would uphold the challenged tax. Although the tax applies only to ships, see Valdez Municipal Code §3.12.020, other property in the city is also subject to taxation. First, §3.12.022 imposes a value-based property tax on trailers, mobile homes, and recreational vehicles that are affixed to a site and connected to utilities. The plurality makes much of the requirement that the property be “ ‘affixed’ ” to a particular site, concluding that “Valdez in fact taxes those vehicles only when they constitute a form, not of personal property, but of real property.” Ante, at 10. But the taxability of property pursuant to §3.12.022 is determined in much the same way as the taxability of ships. “A trailer or mobile home is conclusively presumed to be affixed to the land” and may therefore be taxed if “it has remained at a fixed site for more than ninety days.” §3.12.022(C). Similarly, a ship owner can establish a tax situs in Valdez and thus be subject to taxation if it is “kept or used within the city for any ninety days or more.” §3.12.020(C)(2)(c).[Footnote 3] In both cases, the provision serves to impose a tax on property that has developed substantial contacts with the city. The plurality is thus wrong to conclude that ships have been singled out for taxation.
Finally, it bears mention that the result in this particular case does nothing to further the interests the Tonnage Clause was intended to protect. As the Court acknowledges, ante, at 4,the central purpose of the Clause is “to prevent the seaboard States, possessed of important ports of entry, from levying taxes on goods flowing through their ports to inland States,” Youngstown Sheet & Tube Co. v. Bowers, 358 U. S. 534, 556 (1959) (Frankfurter, J., dissenting in part). Port Valdez is at the southern terminus of the Trans Alaska Pipeline System, which carries oil extracted from Alaska’s North Slope to Port Valdez where it is loaded onto oil tankers belonging to petitioner and others for transport to refineries in other States. Taxes imposed on ships exporting that oil have the same effect on commerce in oil as do taxes on oil-production property or the oil itself, and Alaska’s authority to impose taxes on oil and oil-production property is undisputed. From an economic or political point of view, there is no difference between Alaska’s geographical control over the area in which the oil is produced and the port from which it is exported. Accordingly, no federal interest is served by prohibiting Alaska or its political subdivisions from taxing the oil-bearing ships that are continually present in the State’s ports.III
The Tonnage Clause permits a State to levy a property tax on ships whether or not it taxes other property. Were that not the case, the challenged tax would still be permissible because Valdez also taxes mobile homes, trailers, and a wide variety of property used in producing oil. Because the tax in my view does not run afoul of the prohibitions of the Tonnage Clause, I respectfully dissent.Footnote 1 Previously, courts followed the common-law “home port” doctrine, pursuant to which a ship could be taxed only by the State in which its owner was domiciled. See Pullman’s Palace Car Co. v. Pennsylvania, 141 U. S. 18, 23–24 (1891). That doctrine has since “yielded to a rule of fair apportionment among the States,” permitting any jurisdiction with which a ship has had sufficient contacts to establish a tax situs to levy a property tax on the ship in proportion to the ship’s contacts with the jurisdiction. See Japan Line, Ltd. v. County of Los Angeles, 441 U. S. 434, 442–443 (1979); see also Standard Oil Co. v. Peck, 342 U. S. 382, 383 (1952). We have roundly rejected the doctrine in cases involving ships moving in interstate operations along the inland waters. See ibid. And in the context of ocean-going ships, we have referred to the doctrine as “ ‘anachronistic’ ” and all but “ ‘abandoned,’ ” noting that “to rehabilitate the ‘home port doctrine’ as a tool of Commerce Clause analysis would be somewhat odd.” Japan Line, 441 U. S., at 443. In light of these developments, it is odd indeed that The Chief Justice endeavors to distinguish Transportation Co. v. Wheeling, 99 U. S. 273 (1879),and the State Tonnage Tax Cases, 12 Wall. 204 (1871), as “apply[ing] only to taxation of property owned by citizens of the State.” See ante, at 2 (opinion concurring in part and concurring in judgment).Footnote 2 The Court seems to conflate these methods of calculating taxes on ships, as it asserts that “a tax on the value of such vessels is closely correlated with cargo capacity” and concludes that the tax in this case “depends on a factor related to tonnage.” Ante, at 7; see also ante, at 1 (opinion of Roberts, C. J.). This is contrary to our longstanding recognition that a ship’s capacity is not a proxy for its value: “[T]he experience of every one shows that a small steamer, new and well built, may be of much greater value than a large one, badly built or in need of extensive repairs.” State Tonnage Tax Cases, 12 Wall., at 224.Footnote 3 A ship can also establish a tax situs in Valdez if it is usually kept or used within the city, travels to or within the city along regular routes, or is necessary to the conduct of substantial business in the city. §3.12.020(C)(2).Footnote 4 As the plurality notes, ante, at 10–11,Valdez did not raise this issue in state court, and the parties have provided only limited briefing on the issue.