Opinion ID: 1335334
Heading Depth: 1
Heading Rank: 5

Heading: The Import-Export Clause

Text: It is perhaps understandable that fair minds would disagree on the outcome of a case such as this. The law applicable to the issues raised in this appeal are by no means subject to a simple application of non-divergent case-law. Indeed, one might understandably hope that the United States Supreme Court would take the opportunity to bring a new clarity to this area of constitutional law in the near future. It is, I believe, fundamental to our consideration of the issues raised on appeal that this Court embrace and enforce that precedent of the United States Supreme Court which best protects the rights and provisions set forth in the United States Constitution. I do not believe that applicable precedent should be ignored or minimized because another line of cases is more to a court's liking. In Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989), the United States Supreme Court admonished lower courts that [i]f [its] precedent has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, [the lower court] should follow the case which directly controls, leaving to [the Supreme] Court the prerogative of overruling its own decisions. 490 U.S. at 484, 109 S.Ct. at 1921-22, 104 L.Ed.2d at 526. The loading of coal for shipment is, like the severance of coal, a taxable activity under the Section 13A taxes. W. Va.Code § 11-13A-4(a). For appellant's coal which is irretrievably destined for a foreign market and which is taxed under the provisions of the Section 13A taxes, the loading of the coal for final transportation, with its concomitant irrevocable commitment of the coal to the foreign market, results in the latest passage of title and completion of the sale. [11] The Section 13A taxes set the amount of tax to be payed as a percentage of the gross value of the coal as determined by the sale price of the coal. Necessarily included within this sale price is a component of enhanced value added by the loading of the coal for final shipment. Therefore, it is readily apparent that the tax is set by the value of coal dedicated for a foreign market after that coal's value has been enhanced by the loading activity in apparent violation of the Import-Export Clause. [12] Recognizing our obligation to precedent, I believe that we must abide by the United States Supreme Court's interpretation of the Import-Export Clause as set forth in Richfield Oil. I therefore disagree with the majority of my colleagues and believe that Richfield Oil's stream-of-export rule, rather than, as they believe, the policy rule [13] set forth in Michelin Tire Corp. v. Wages, 423 U.S. 276, 96 S.Ct. 535, 46 L.Ed.2d 495 (1976) and Department of Revenue v. Association of Washington Stevedoring Companies, 435 U.S. 734, 98 S.Ct. 1388, 55 L.Ed.2d 682 (1978), provides the precedent that should control the judicial outcome of the issues raised on this appeal. My problem with the majority opinion is that it seems to presume that Richfield Oil's stream-of-export rule has been overruled or disregarded by the United States Supreme Court in favor of Michelin's policy rule with respect to taxes, as here, on goods or products in the stream of export. The majority opinion asserts that the Supreme Court took a sharp turn in Michelin. Sharp or not, the turn has not been applied to state taxes on exports in transit. The Supreme Court acknowledged in Washington Stevedoring that it did not reach in that case the question of the applicability of the Michelin approach when a State directly taxes imports or exports in transit .. . As in Michelin, decided less than three years ago, we prefer to defer decision until a case with pertinent facts is presented. At that time, with full argument, the issue with all its ramifications may be decided. 435 U.S. at 757, n. 23, 98 S.Ct. at 1403. Indeed, in the more recent case of United States v. International Business Machines Corp, [I.B.M.], 517 U.S. 843, 116 S.Ct. 1793, 135 L.Ed.2d 124 (1996), the United States Supreme Court stated that contrary to the Government's contention, this Court's Import-Export Clause cases have not upheld the validity of generally applicable, nondiscriminatory taxes that fall on imports or exports in transit. 517 U.S. at 862, 116 S.Ct. at 1804. [14] With respect to taxes on the value of goods or products in the stream of export, as I believe the Section 13A taxes are, I therefore respectfully disagree with the reasoning of the majority opinion and conclude that, in the words of the Supreme Court in Rodriguez de Quijas, the precedent which directly controls the issues raised in this appeal is Richfield Oil.