Document: 331 U.S. 70 67 S.Ct. 1062 91 L.Ed. 1346 INDEPENDENT WAREHOUSES, Inc., et al.v.SCHEELE, Recorder of Township Saddle River, al. No. 83. Argued Dec. 16, 1946. Decided April 14, 1947. Appeal from the Court Errors and Appeals State New jersey. Mr. Duane E. Minard, Newark, N.J., for appellants. Messrs. Harry Lane, Jersey City, Ralph W. Chandless, Hackensack, appellees. Justice RUTLEDGE delivered opinion Court. 1 An ordinance River Township, Jersey, forbids carrying on business storing goods hire except upon payment an annual license tax.1 Independent Warehouses, Thompson, agent that company, have been convicted fined conducting such a without procuring or paying tax. The convictions sustained by Jersey's highest court.2 appeal here seeks to judgment reversed basis done was exclusively interstate consequently application made contravenes commerce clause Federal Constitution, Art. I, § 8. Fourteenth Amendment objections also are raised.3 2 main thrust argument has toward phase case. In this controversy is familiar 'interruption' 'cessation' type. issue accordingly requires only determination proper be well-established legal principles particular circumstances. It whether cessation taking place in movement interstate, as shown record, nature which permits state municipality tax services, them, rendered connection with their handling.4 3 governing were stated Minnesota v. Blasius, 290 1, 9, 10, 54 34, 36, 78 131, follows: 4 '* * states may not property transit commerce. But, reason break transit, come rest within become subject power impose non-discriminatory tax.5 Such exertion belongs class cases which, virtue importance local concerns, act until Congress, if it paramount authority over subject, substitutes its own regulations. 'crucial question,' determining state's taxing thus exerted, 'continuity transit.' Carson Petroleum Co. Vial, 279 95, 101, 49 292, 293, 73 626. 5 'If begun, mere fact contemplated does withdraw it. If regarded continuing, so maintain immunity taxation, despite temporary interruptions due necessities journey purpose safety convenience course movement. Formalities, forms billing, changes method transportation, do affect continuity transit. question always one substance, each case necessary consider occasion interruption during sought levied. 6 'Where state, being held there at pleasure owner, disposal use, he dispose either shipment elsewhere, his interest dictates, deemed part general mass power.' Since circumstances characterizing controlling importance, we turn details stoppage record. I. 7 suit culmination extending back 1939, earlier litigious chapters federal courts. grows out operation facilities handling coal under various arrangements between Erie Railroad Company other corporations affiliated enterprises stock ownership contract. 8 Pennsylvania Coal wholly owned subsidiary Erie. owns operates mines Pennsylvania. 1901 acquired 67.25 acres land Jersey. This acreage faciliti s, known Coalberg, located York, Susquehanna Western perform functions connected road's operations material cause. Coalberg directly Bergen County Railroad, freight cutoff Its chief purpose, relevant controversy, provide storage shipped Company's later destinations. 9 Prior operated lessees private business, public utility. During time levied personal taxes storage, assessing collecting them owners.6 These were, they now, chiefly distributors using Coalberg's facilities, principally because accessibility distributing centers, especially vicinity York shipping both rail water.7 10 however, set forth involving Erie, converted into utility serve shippers lines. Under law, stored warehouses conducted exempted taxes. Rev.Stat.N.J. 54:4—3.20, N.J.S.A. change mode operation, continued levy 1940 assessment invalidated Pattison & Bowns, 129 N.J.L. 135, 28 A.2d 485; Id., 130 177, 32 363. 11 municipality's resulting loss revenue amounted about eight per cent total collected local, county purposes. To make up this, brief candidly admits, enacted now question, acting provisions law. N.J.Stat.Ann. §§ 40:52—1, 40:52—2. effect shift direct incidence owners i.e., shipper-distributors, operator character franchise privilege state. amount produced, though dispute, substantially will repair suffered invalidation outgrowth Township's effort enforce new provisions. 12 some detail 1939 brought operating Coalberg. agreement then provides former shall operate 'as service facility prepared anthracite lines desiring space accordance rates named certain Tariff file Interstate Commerce Commission Public Utilities *' recites view considerations no need use affording 'facilities whereon said Storage Yard shipments diverted competing available. pays net monthly loss, i any, yard remits surplus, any. undertakes duly authorized behalf warehouse receipts placed shippers. 13 discharged function arrangement corporation engaged warehousing business. leased Warehouses $1.00 year latter undertook plant consideration amounts approximately $500 year. governs manner Warehouses. 14 these purchasers who ship designate destination papers. sent railroad cars. unloaded pile where kept ordered owner. reloaded cars, when reshipped billing destination. Most coal, after stored, goes than Some, marketed disputed any distribution but comparatively insignificant. 15 financial tariff follows. On arrival transportation charges mine paid When moved again remainder through rate point original paid. privilege. 'The enables grain (here coal) A B, marketed, processed, C less combination separate B C.' Board Trade Kansas Mo., United States, 314 534, 537, 538, 62 366, 368, 86 432, authorities cited. 16 given free period two years,8 although charge unloading cars reloading reshipment. obtain 17 licensing applied adopted 1943, following decision supra. provides: 18 'No person, firm conduct carry work in, occupy, or, directly, indirectly whatsoever, utilize premises carried hire, unless granted Committee terms ordinance, force effect, conduc ed on.' 19 specifies charged advance fee three-quarters square foot ground on. There penalty clause,9 addition pertinent. 20 did apply pay 1943. Consequently company Thompson Magistrate's before appellee Scheele, having violated complying requirements. Each $200.10 allowed intervene went Supreme Court, obvious outcome litigation. That court unconstitutional undue burden convictions. 132 390, 40 796. Court's determination. 134 133, 45 703. valid neither nor guaranties relied had infringed. comes hereon appeal, 66 1342, pursuant 237(a) Judicial Code, U.S.C.A. 344(a). See King Mfg. City Council Augusta, 277 100, 48 489, 72 801; Jamison Texas, 318 413, 414, 63 669, 87 869. 21 itself sustain appellants' claim stopped sufficiently attach reached Cf. supra; Bacon Peopel Illinois, 227 504, 33 299, 57 615. long recognized privileges 'upon fiction incoming outgoing distinct, constitute continuous identical article origin final destination.' Central 257 247, 257, 42 80, 82, 217. Atchison, Topeka, Santa Fe R. 768, 779, 780, 494, 498, 947. Of fiction, desirable ratemaking purposes, cannot control activities properly exercise apart fiction's them. 22 Indeed, facts demonstrate least complete. They show subsequent journeys leaving parts transit' sense previous decisions preclude states' regulatory powers. See, e.g., Pittsburg Southern Bates, 156 , 415, 39 538; General Oil Crain, 209 211, 475, 52 754; People South Amboy, 228 665, 712, 1015. 23 characteristic feature those laid determined what ultimate be. Thus supra, oil Memphis required supply orders out-of-state customers. Brown Houston, 114 622, 1091, 29 Orleans taxable Louisiana because, subsequently exported, 'was sale might wish buy.' Champlain Realty Brattleboro, 260 376, 43 146, 309, 25 A.L.R. 1195. Bacon's elevator complete disposal. 'He sell Illinois forward it, saw fit.' Although intention inspection, grading, etc., irrelevant. page 516, 303, And anticipation yet actual Nashville, C. St. L.R. Wallace, 288 249, 53 345, 77 730, 1191; Edelman Boeing Air Transport, 289 591, 1155. 24 Those indistinguishable stoppage. Once can determine, receiving order person finally put. even owner know go next, very meet seasonal demand.11 while form conclusive, billed rebilled asks released further shows others. Moreover, all duration indefinite extend years indefinitely, since require, reserves right removal end years.12 significant invariably fungibles, pointing fictional intransit initially stream arrive consumption. 26 considerations, falls more appropriately category allowing apply, denying applicability. hardly 'due movement,' pages 37, broad latitude incidents More involved stopping take advantage latitudes. therefore one, language Blasius case, 'where dictates *.' 131. 27 bring exactly description, record most little, distributed locally Not ultimately happens go, controlling. levied.' Here takes simply carrier's reasons relating journey, primarily concerned owner's interests, As cases, entirely keep market send elsewhere. Marketing primarily, exclusively, determine choice many factors arise indeed months later. situation respect materially different Coal, Bacon, cited, distributor distance market, near-by way station, reduce cost operations. economy necessity arising absence prohibitive immediate lead him locate operations, thereby incur expense hauling could incident rather policy interest. secure same advantages others like own, result. defeat conducted. 30 noted, remains shipper directs. ended. elects points near distance, intrastate leg initial begun mine. 31 moving crosses line makes But beginning ending second taken move intrastate. interest, disconnected ordinary usual dictate another. Interruptions governed classified merely dictated convenience. alter substantial character, before, primary dictating shippers' action such. Accordingly affected change. chosen discontinue exercising matter difference respect. Nor fact, furnishing becomes depending purposes stoppage, nontransit ones. above true, generally coal. principal applies equally facilities. American Steel Wire Speed, 192 500, 365, 538. would impermissible anomaly hold taxed, legally applying powers taxation. 34 Accordingly, prior municipalities situations sort. follows forbidden measure. Even undisputed nature, 'not licensing, stands regulation important.' Robertson California, 328 440, 458, 1160, 1170. Union Brokerage Jensen, 322 202, 64 967, 88 1227, 152 1072; Compress Warehouse McLean, 291 17, 267, 622. anything Act, seq. forbid taxation otherwise permissible. clause. III. 35 Whether meas re stand must considered. Appellants say discriminatory unreasonable. Discrimination claimed applicable commercial contention grounded noted above, exempting closely related prohibitory unreasonable, claims considered together. 36 'It inherent select subjects grant exemptions. Neither process equal protection imposes rigid rule equality repeatedly inequalities result singling exemption, infringe constitutional limitation.' Carmichael Coke Co., 301 495, 509, 868, 872, 81 1245, 109 1327. 37 We tax,13 selection barred Amendment. 38 present illegal evasion laws taxes, empowered law rulings conclusive us. decide practical enabled transformed facility. Constitutionally speaking, invalid unreasonably large conferred.14 exaction unrelated value conferred found contrary.15 Private contractual arrangements, here,16 effective tax, relieving real beneficiaries success shunting contractually nominal operator.17 suggestion weight 1939.18 Appellants' arguments shorter disposition. Thompson's conviction 'unlawful' answered possesses exercised convict persons working unlicensed well prohibit obtaining license. employer's own. 41 suggested gives uncontrolled discretion revoke uncertainty, 'revoke sufficient cause notice hearing.' attempt position attack revocation ordinance. Bourjois, Chapman, 183, 188, 691, 694, 1027, Finally provision cumulative penalties.19 penal however imposed cumulatively Moreover separable,20 illegal. circumstances, objection unapplied cumulation violates substance. Louisville N.R. Garrett, 231 298, 311, 48, 53, 58 229, affirmed. 44 Affirmed. FRANKFURTER, concuring. 46 dissenting views me add few words opinion, I join. 47 Nearly thirty-five ago Holmes observed 'one my sees how often prevails trained national embodies Clause meant end.' (Holmes, Speeches, Law 98, 102). His concern lost time, important mindful whenever Equally observations regarding problem. once admitted, be, every affects among sense, nice distinctions expected. Regulation technical conceptions, and, naturally, limits fixed lines.' Galveston, Harrisburg, etc. 210 217, 225, 638, 639, 1031. so, mining ore left put produced. Oliver Iron Mining Lord, 262 172, 526, 929. joined 'There State's product certainly destined commerce.' J., Commonwealth West Virginia, 553, 600, 601, 658, 666, 1117, 300. Again, business' 'a flow commerce,' 'has situs state' depot another journey.' 8, 11, For goods. striking balance powers, figures speech treacherous. Lord cattle 'flow commerce' subjected controlled coal-carrying road. independent require railroad. Presumably good corporation. Compare Edwards Chile Copper 270 452, 456, 346, 678. opportunities, afforded protection, benefits identification Railroad. Wisconsin J. Penney 311 435, 444, 61 246, 85 1229. occasional transient precisely holding distinct permanent States give rise interests justify power. 714, Here, something 'than incidental continuity' coal's 'journey state.' delay availed of, products secured 668 Thereby arose. 50 railroad-rate treated relation State. Assuming stop-over follow significance allow opportunity separable enduring 51 JACKSON, whom Chief VINSON joins, dissenting. common carrier By specific filed Act severa carriers published joint proportional through-tariff stations storage-in-transit services reshipment agreements. contract custody tariffs warehouseman, issues received waybills. Title wholly-owned receives dollar lease. bears losses gets gains. apparent Erie's service. vital. summer season, consumption light dealers consumers elsewhere able store adequate winter reserves. At critical times grave danger inadequate fuel supplies piles accumulated consuming drawn periods peak demand. Therefore, accepts mingles ordering grade quantity needed. come, delivered. Storage-in-transit device equalize demands reserve exceeds production, enable away production consumption, finance future purchases issued against essential dependable lowcost great metropolitan area. fee, advance, alleged $20,475. doing used valuation $133,875, question. 55 unconstitutionally burdens substantiality undeniable, concludes assessments traffic course, amount, $20,000 $20,000,000 year, upheld. 56 agree Constitution vulnerable permissions burdens. Because impact railroad, should delude ourselves effect. traffic—on goods—and shifted consumer. is, 'local incident,' reloading. 'Local incidents' sort identified transportation. sales deliveries insubstantial amount. whole integrated management regulation. longer stoppages railroading. perpetually renewed continuously drawn-upon adapt needs economy, engage single fasten barriers obstructions designed end. unedifying story Colonial rivalry preying commerce, thing our necessity, too told historians repetition. reminiscent, phases warfare. 1787 supplied firewood Connecticut much farm produce seized lay Every sloop came down Hell Gate, cart entering city, boat rowed across Hudson heavy entrance duties. Then retaliatory measures. Fiske, Critical Period History, Chap. IV. chronic quarrels destroying trade rivals, controls. York's dangerous old firewood. government shortsightedly tariff, tariff-ridden people remove 59 representation lays fixes fix never answer evil 'taxation representation.' immediately taxpayer appear similarly affected. non-residents authority. valid, why community bear vice barrier nation's end, think hard find example. represents trend seems quite spirit history detrimental welfare unity. concurring Duckworth Arkansas, 397, 314, 294, 138 1144. am unaware locality, others, revenue. fully current immune Freeman Hewit, 329 274, Joseph Carter Weekes Stevedoring 330 422, 815. maintaining loading restraints locality lest pursued prosperity depends. reverse judgment. term note infra text. text Part infra. district enjoin enforcement dismissed existence 'plain, speedy, efficient remedy' D.C., F.Supp. 96, 97; U.S.C. 41(1), 41(1). discussed III opinion. 'A storing' forbidden. 21, 269, 4. 1921 imposition grounds. Tp., 96 40, A. 157. conveniently tidewater ports, northern area England States. (2) date delivery point, inbound (expense) bill. expiration period. Any lose destinations beyond yard. 'Any violate thereof imprisonment Jail provided detention prisoners, exceeding ninety (90) days fine Two Hundred Dollars ($200.00) both. may, Magistrate convicted, default imprisoned days. day violation continue offense.' 90 event fine. two-year see meeting supplied, said, demands.' witness gave illustrations: '(a) commodity consumed cold weather. currently weather requirements, railroads swamped fall volume conditions retard spreading favorable conditions, uniform assured. '(b) uniformly throughout tariffs, negotiable necessary. '(c) warm bulk avoids car releases rapidly arrived frozen solid, winter, delayed bad wait '(d) Experience instances, recent occurrence, close areas prevent relieve acute shortages labor weather, '(e) congestion, increased attends rush emergency '(f) facilitates steady employment, miners employees, revenue.' Brandeis Liggett Lee, 517, 570 ff, 481, 929, 699. somewhat larger aggregate Personal $12,000 Estimates vary sum around variation corresponds estimates area, footage, constituting base calculation 14. 573, 499, 699, proportionate differences taxpayers taxpayer's ability burden.' discloses agreements terminated notice. Browning Waycross, 233 23, 578, 580, 828; 22, 622: wi hin parties, descriptive contract, convert protected clause.' day's continuance offense. (45 703, 709): contains 'any section part' unconstitutional, invalidity 'shall construed impairing ordinance.' conceded arguendo part, sanctions severable unaffected.'

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