Document: 490 U.S. 844 109 S.Ct. 2228 104 L.Ed.2d 910 CALIFORNIA STATE BOARD OF EQUALIZATION, Petitionerv.SIERRA SUMMIT, INC. No. 88-681. Argued April 19, 1989. Decided June 12, Syllabus In holding that a Bankruptcy Court's injunction against petitioner Board of Equalization's assessment state sales tax upon the proceeds trustee's liquidation sale inventory also barred collection use from purchaser's lessees, Court Appeals rejected petitioner's argument it had wrongly decided California State Equalization v. Goggin, 245 F.2d 44 (Goggin II). There, court held (1) on places burden federal function bankruptcy and violates principles intergovernmental immunity, (2) 28 U.S.C. § 960—which specifically authorizes States to impose taxes business operations—sets forth sole area in which can any type negates by implication their power liquidations. Held: Neither doctrine immunity nor 960 proscribes imposition or sale. Pp. 847-854. (a) Under this recent decisions, prohibits directly taxing United States, an agency instrumentality so closely related Government tha two cannot realistically be viewed as separate entities insofar activity being taxed is concerned, but permits private parties with whom does even though financial falls Government, long not discriminate those deals. Thus, whatever estate once enjoyed its operations has since eroded. Such trustees they deal, purchaser at judicial only required pay same he would have been bound purchased anyone else. Nor trustee connected Federal entities. The representative debtor's estate, arm Government; administrative expense debtor, Government. There no material distinction between municipal withholding property upheld, see Otte 419 43, 52-54, 95 247, 254-255, 42 212; Swarts Hammer, 194 441, 444, 24 695, 696, 48 L.Ed. 1060, presented here. 848-850. (b) Goggin II court's reading contrary general approach claims States' preempted, plain meaning legislative history statutory provision, structure Code. Section clear expression exemption taxation. Rather, evinces Congress' intention permitted notwithstanding objection might interposed that, matter law, receivership, conducted under order, should subject liability owner possession of, operating, enterprise. 850-854. 847 570 (CA9 1988), vacated remanded. STEVENS, J., delivered opinion Court, REHNQUIST, C.J., WHITE, O'CONNOR, SCALIA KENNEDY, JJ., joined. BLACKMUN, filed dissenting opinion, BRENNAN MARSHALL, joined, post, p. 854. Robert F. Tyler, Jr., for petitioner. David Ray Jenkins, Fresno, Cal., respondent. Justice STEVENS Court. 1 Enmeshed tangled skein procedural state-law issues ruling important question was critical decision case. ultimate skis lessees. process reaching decision, Ninth Circuit case well known lawyers "Goggin "1 decided. three-judge panel heard concluded within power—"and heart—to change rule circuit force over thirty years." re China Peak Resort, 570, 572 (1988). Because " conflicts applied other Circuits,2 because we both duty resolve conflict, granted certiorari. 488 992, 554, 102 581 (1988).3 2 cases concerned attempt Equalization, here, assess I, 191 726 (1951), cert. denied, 342 909, 72 302, 96 680 (1952), Board's nondiscriminatory imposed retailers made order. Although based construction law excluded definition retailer, Judge Fee concurrence wrote constituted unlawful processes. Six years later, Fee, writing II, views law. 44, 353 961, 77 863, (1957). At issue collect remit goods paid. unlawful, finding while nonetheless burdened "essential processes" court. 3 opinions were premises, each respondent argues supports judgment First, therefore first recognized McCulloch Maryland, 17 (4 Wheat.) 316, 4 579 (1819). Second, found statute authorizing negated persuasive. undue governmental operation derives established view income assets individual receives contract constit ted thereby operations. See, e.g., Panhandle Oil Co. Knox, 277 218, 451, 857 (1928); Collector Day, 78 (11 Wall.) 113, 20 122 (1871); Dobbins Commissioners Erie County, 41 (16 Pet.) 435, 10 1022 (1842); Weston City Council Charleston, 27 (2 449, 7 481 (1829). drew agent's While former permissible, latter constitutionally proscribed. Railroad Peniston, 85 (18 5, 33, 21 787 (1873); Wheat.), 345; James Dravo Contracting Co., 302 134, 163, 58 208, 222, 82 155 (1937) (footnotes omitted) (Roberts, dissenting) ("No laid th[e] franchises [of government instrumentalities], local non-discriminating taxation"). although early 1904 could 1060 (1904), courts reasonably trustee. Flatbush Gum 73 283 (CA2 1934), denied sub nom. New York Arnold, 294 713, 55 509, 79 1247 (1935). 5 (1937), however, agent With Contracting, "the started path decline [it] now 'thoroughly repudiated.' Cotton Petroleum Corp. Mexico, 174, 1698, 1706, 209 (1989) (quoting South Carolina Baker, 485 505, 520, 108 1355, 1365, 99 592 (1988)). "[U]nder current never business, deals." Id., 523, S.Ct., 1366. Absolute appropriate when itself "or entities, least concerned." 455 720, 735, 1373, 1383, 71 580 (1982). 6 It evident taxation eroded there constitutional impediment claim, be, discriminates deal. As Augustus Hand observed similar facts 1936: "The if else." Leavy, 25, (CA2).4 "cannot entities." supra, 1383. debtor]," 11 323(a); cf. Commodity Futures Trading Comm'n Weintraub, 471 343, 105 1986, 372 (1985), "an Government," Department Employment Stat s, 385 355, 359-360, 87 464, 467, 414 (1966), 503(b)(1)(B) (1982 ed. Supp. V). Cf. Missouri Gleick, 135 137 (CA8 1943).5 For purposes absolute doctrine, 212 (1974); U.S., here.6 proscription implied prohibition 960.7 read setting where type" reasoned Congress authority liquidation, [were] inevitably free such imposition." F.2d, 46. That our pre-empted particular provision. 8 confer taxation, Washington 460 536, 540, 103 1344, 1347, 75 264 (1983); First Agricultural Nat. Bank Tax Comm'n, 392 339, 88 2173, 1138 (1968); Detroit, 355 466, 474, 478, 424 (1958), stated "[a] must proceed carefully asked recognize clearly expressed," Rockford Life Ins. Illinois Dept. Revenue, 482 182, 191, 107 2312, 2317, 152 (1987). See Oklahoma 319 598, 607, 63 1284, 1288, 1612 (1943); Graves ex rel. O'Keefe, 306 479, 59 595, 597, 83 927 (1939). passed 1934, height response District receiver operating gasoline oil distributing liable motor fuel. H.R.Rep. 1138, 73d Cong., 2d Sess. (1934); S.Rep. 1372, (1934).8 Read most naturally, interposed, Davis Michigan Treasury, 489 803, 813, 1500, 1506-1507, 891 (1989), "a enterprise," Palmer Webster Atlas Boston, 312 156, 61 542, 545, 642 (1941).9 "indicates Congressional purpose facilitate—not obstruct—enforcement laws." Boteler Ingels, 308 57, 60-61, 60 29, 32, 84 Nothing language statute, history, Code indicates intended exclude may estate. 9 Eighty-five ago, hands authorities. appellant argued, much manner transfer vested exclusive control "no sovereignty, foreign, exercise burdens interferes distribution prescribed act." Statement, Specification Error Argument Appellant O.T. 1902, 238, 4. We responded "[b]y mysterious peculiar ownership qualities are given property," "there nothing withdraw necessity protection municipality, exempt obligations either." 696. If wished declare otherwise, intent "be expressed, left collected inferred disputable considerations convenience administering bankrupt." Ibid. intervened last years, rejecting operations, gives conclusion proscribe sought assessed vacate remand further proceedings consistent opinion. ordered. 12 MARSHALL join, dissenting. 13 today, overturning 32-year-old settles conflict ancient vintage doubtful urgency properly presented. majority correct Califor ia (CA9) II), (1957), good I respectfully dissent majority's resolution res judicata litigation. 14 case, notably missing genesis 1980, Ltd., Chapter relief. After variety proceedings, receiver, T. Ford, entered into negotiations Snow Summit Ski Corporation Sierra Summit, Inc., wholly owned subsidiary, Peak's assets. 571 1988). consummated approval dismissed petition. sale, attempted principals Mr. Ford Summit. moved reopen adversary proceeding his own behalf seeking bar assessment. full briefing, amounted therefore, prohibited II. Peak, Advisory Proceeding 183-0344 (Bkrtcy.Ct. ED Cal.1983), App. Pet. Cert. A-27. assessing enforcing trustee, principals, "by reason Ltd. Summit." A-28. Petitioner did appeal 1983 judgment, became final time expired later year. 15 instant arose revenues rental ski equipment obtained claimed order precluded these enforcement injunction. ultimately relief, remanding instructions contempt citation 572-573. 16 agrees, II—the legal basis arises—was my view, challenge wisdom comes far too late. ample opportunity continuing validity litigation resulting failed adverse judgment. precedents underlying it, collateral attack proceedings. This Federated Stores, Inc. Moitie, 452 394, 101 2424, 69 (1981), wrote: "A merits action precludes privies relitigating raised action. . consequences final, unappealed altered fact wrong rested principle subsequently overruled another case." 398, 2428. Maggio Zeitz, 333 56, 68 401, 92 476 (1948), situation strikingly hand. losing party violated. refused hear because, "when completed terminated [the decision] becomes proceedings." 68, 407. elaborated: 18 "It di service depart long-standing open reconsideration factual alleged disobeyed thus become retrial original controversy. [W]hen [an order] disobedience justified re-trying whether issued place." 69, 408. 19 None cited race persuades me set aside time-honored appellate review. ante, 846-847, n. 3. Canton Harris, 378, 1197, 412 Tuttle, 808, 2427, 791 judicata. Donovan Dallas, 377 408, 1579, 409 (1964), involve review contempt. contrast reach part citation. simultaneously Donovan's petition certiorari Supreme subsequent conviction. 411, 1581. Far revisiting reviewed ordinary course business. Accordingly, before application issuance obvious importance parties, case-specific inquiry merit attention, dismiss writ having improvidently granted. (CA9), I" 1951), (1952). Compare Hatfield Construction 494 1179 (CA5 1974) (holding sale); 25 1936) (same), Cusato Brothers Int'l, 750 887 (CA11) excise taxes), Florida Great American Broward 472 1010, 2707, 86 722 (1985). Warmings A.G. Food Center, 50 B.R. 748 (Bkrtcy.Ct.Me.), summarily aff'd, 782 1024 (CA1 1985); Sunrise 39 668 (D.Wyo.1984); Hughes Drilling 196 (Bkrtcy.Ct.WD Okla.1987); Hubs Repair Shop, 858 (Bkrtcy.Ct.ND Iowa 1983) (all sales), Sheldon's Maine, 568 (Bkrtcy.Ct.Me.1983); Rhea, 789 Okla.1982) sales). brief merits, us. argued incorrectly Appeals, Brief 87-2542 pp. 28-33, reached question. previous argue circumstances decide Appeals. 383-385, 1201-1203, (1989); 815-816, 2431-2432, (1985); 414, 1583, (1964). added: "What really complaining is, functions, inability sell who higher price him than ordinarily paid sold. seems unreasonable treat absence normal function." 27. 346(c)(2) ed., V), "make return otherwise of" corporation partnership "in form partnership, make return." follows, fortiori, when, debtor remain possession, duties debtor-in-possession. 1107(a) V) (debtor-in-possession shall perform all functions trustee). commentators agreement. Wurzel, Taxation During Liquidation, Harv.L.Rev. 1141, 1166-1169 (1942) (footnote ("[T]here effects merely 'incidental.' A fulfills requirement. place States; will it—unless discriminatory unconstitutional—render task more difficult cumbersome"); Note, Liquidations: Federalism Misconceived, 67 Yale L.J. 335, 340 (1957) ("Case suggests upheld applicable waiver. one sovereign originated belief necessarily destructive. rationale repudiated, [v. (1939),] manipulated invalidated. Absent sellers buyers sales, seriously impede process"). Title provides: "Any officers agents conducting authorit Federal, extent corporation." provided: "That liquidator, referee, appointed authorized said conduct shall, after enactment Act, corporation: Provided, Act contained construed prohibit prejudice accrued prior event jurisdiction existing adjudge valid civil subdivisions imposing same." 18, ch. 585, Stat. 993. changes 1948 revision Judicial impart significant meaning. Finley 2003, 2009, 593 (1989). Cong.Rec. 6656 (1934) (statement Rep. McKeown) ("A great many receivers taxes. They do State. thousands dollars lost State, bank State"). Ironically, Howe Atlantic, Pacific & Gulf F.Supp. 162 (WD Mo.1933), precipitated passage reversed grounds signed Kansas Johnson, 70 360 (CA8), 293 617, 706 (1934). "If terms Louisiana provided levy doubt franchise tax. controversies authorities various liquidating agencies has, interest justice will, directed rather litigate claims. By sweeping doubts resolved favor taxes." Thompson Louisiana, 98 108, 111 1938). 3A Collier 62.14, 1526 (14th 1975) ("The true seem declaration policy: officer court, bankruptcy, governed defense, allowing bankrupt businesses compete advantage non-bankrupt businesses"); Pepper, Application Franchise Taxes Trustees Bankruptcy, 259 (1936) ("All imposes claim trustee").

Category: 9