Legal Document

496 U.S. 18 110 S.Ct. 2238 L.Ed.2d 17 McKESSON CORPORATION, Petitionerv.DIVISION OF ALCOHOLIC BEVERAGES AND TOBACCO, DEPARTMENT BUSINESS REGULATION FLORIDA, et al. No. 88-192. Argued March 22, 1989. Reargued Dec. 6, Decided June 4, 1990. Syllabus After Bacchus Imports, Ltd. v. Dias, 468 263, 104 3049, 82 200, held that Hawaii's liquor excise tax scheme which allowed preferences for alcoholic beverages manufactured from certain products grown in the State—violated Commerce Clause because it had purpose and effect of discriminating against interstate commerce, Florida revised its similar preference to provide special rate reductions specified commonly State used produced there. Petitioner McKesson Corporation, a wholesale distributor whose did not qualify reductions, paid applicable taxes number months. then filed suit state court respondent taxing authorities seeking, inter alia, refund amount excess as result disfavored treatment. The trial invalidated under enjoining future enforcement preferential but declined order or any other form relief already paid. court's was stayed pending appeal, continued collect with local still effect. Supreme Court ultimately affirmed all respects, ruling refusal proper light "equitable considerations." Held: 1. Eleventh Amendment—which provides part federal "[j]udicial power . shall extend commenced prosecuted one United States by Citizens"—does preclude Court's exercise appellate jurisdiction over cases brought arise courts. This view has been implicit consistent practice uniformly endorsed cases, including involving actions court, almost 170 years. See, e.g., Cohens Virginia, 6 Wheat. 264, 412, 5 L.Ed. 257; General Oil Co. Crain, 209 211, 233, 28 475, 483, 52 754; Davis Michigan Dept. Treasury, 489 803, 109 1500, 103 891. Pp. 26-31. 2. If penalizes taxpayers failure remit their timely fashion, thus requiring them pay first obtain review tax's validity later action, Due Process Fourteenth Amendment requires afford meaningful postpayment pursuant found unconstitutional. 31-52. (a) precedents demonstrate traditional legal analysis appropriate determining Florida's constitutional duty retrospective payment an unlawful tax. Atchison, T. & S.F.R. O'Connor, 223 280, 285-286, 32 216, 217, 56 436; Ward Love County Board Comm'rs, 253 17, 24, 40 419, 422, 64 751; Carpenter Shaw, 280 363, 369, 50 121, 123, 74 478; Montana National Bank Billings Yellowstone County, 276 499, 504, 505, 48 331, 333, 72 673; Iowa-Des Moines Bennett, 284 239, 247, 133, 136, 76 265. 32-36. (b) Under these must procedural safeguards exaction such constitutes deprivation property Clause. A may do so either providing predeprivation process—e.g., authorizing sue enjoin imposition prior withhold interpose objections defenses state-initiated proceeding—or postdeprivation procedure. Since established various financial sanctions summary remedies encourage distributors tender payments before resolution dispute validity, does opportunity relief. Thus, only fair challenge accuracy obligation, also "clear remedy," supra, U.S., at 285, S.Ct., erroneous collection. Because courts invalidate entirety, declared unconstitutional insofar discriminated is free choose among several alternative courses remedy. It difference between would have assessed were extended same competitors. Cf. Bank, supra. also, extent restrictions, assess back McKesson's competitors who benefited during contested period, calibrating retroactive assessment create hindsight nondiscriminatory scheme. id., 136. Furthermore, implement combination partial increases on favored competitors, long resultant actually period reflects However, not, respondents contend, deny theory highest imposed known enacted be unconstitutional, event. this approach fact treats worse than products, inconsistent requirement due process: place position equivalent occupied render valid assessed. If, through State's own choice relief, ends up paying smaller initially everyone, will enjoy unpalatable "windfall," merely protected competitive economic disadvantage proscribed 36-43. (c) Neither considerations" cited sufficient override First, observation "the [was] implemented good faith reliance presumptively statute" bespeaks concern obligation refunds collected what turns out undermine ability engage sound fiscal planning. But adequately secured freedom impose requirements designed allow predict greater availability undisputed treasury funds; example, specify statute available those protest some notice complaint, refrain collecting invalid competent tribunal further review. avail itself methods self-protection weakens "equitable" justification avoiding obligation. Moreover, could hardly said "presumptively statute," since reflected cosmetic changes virtually identical struck down Imports. Second, speculation "windfall" McKesson, "likely passed on" cost customers, rejected context case. injured left poorer absolute sense (a problem might rectified incidence others), increased price compared preferred most likely lost sales else incurred costs (e.g., advertising) effort maintain market share. cannot persuasively claim "equity" entitles retain moneys taken unlawfully pass-on where furthers very constituting violation rendered place. Jefferson Electric Mfg. Co., 291 386, 402, 54 443, 449, 78 859, distinguished. 44-49. (d) interests serious administrative dislocation additional play role choosing fine-tuning provided though interest stability justify 49-51. 524 So.2d 1000 (Fla.1988), reversed remanded. BRENNAN, J., delivered opinion unanimous Court. David G. Robertson, San Francisco, Cal., petitioner. H. Bartow Farr, III, Washington, D.C., respondents. Justice BRENNAN 1 Corporation action alleging violated Constitution. agreed petitioner unconstitutionally commerce products. Although enjoined giving future, refused 2 Our establish if secure We therefore agree decision denying reversed. 3 * For decades until 1985, scheme, imposes manufacturers, distributors, vendors beverages, treatment "Florida-grown" citrus agricultural crops bottled state. Fla.Stat. §§ 564.02, 564.06, 565.12, 565.14 (1983). 200 (1984), employed Hawaii Clause1 (because both favor products), Legislature statutory provisions issue litigation. See 565.12 (1989) (hereafter Liquor Tax). legislature deleted previous express replaced citrus, grape, sugarcane are there.2 4 licensed reductions.3 every month required after Tax went into effect, 1986, application Office Comptroller seeking ground unlawful. In September, denied application, (along present here) Division Alcoholic Beverages Tobacco, Department Business Regulation, Comptroller. challenged constitutionality well Constitutions, sought declaratory injunctive discriminatory Pursuant "Repayment Funds" statute, "[a]n overpayment tax, license account due" "[a]ny made Treasury error," 215.26(1)(a), (c), apparent compliance requisites preserving thereunder,4 On petitioner's motion judgment, grounds "legislation failed surmount violations addressed [Imports, supra]." App. 263. leaving subject Tax's nonpreferred rates. however, previously prospective respondents' appeal Court.5 cross-appealed ruling, arguing matter law entitled least "a product's rate." 1000, 1009 (1988). upheld given no operative refund, declaring nature rulings below equitable considerations case." Id., 1010. noted Tobacco "good statute." Ibid. suggested that, "if [petitioner] probability receive windfall, [its] customers." 7 request rehearing denied, petition writ certiorari Court, presenting question whether refund. granted petition, 488 954, 389, 102 378 (1988), consolidated case American Trucking Assns., Inc. Smith, 167, 2323, 148, we decide today.6 II 8 Respondents ask us hold accepted monetary entities, Amendment7 nevertheless precludes our reject suggestion. Almost years ago, Chief Marshall, writing error judgment law. 257 (1821). involved proceeding instance citizen, holding read limited circumstance, understood supporting broader proposition: "[I]t ago settled final even when formal party [defendant] successful inferior within meaning Amendment." 754 (1908) (Harlan, concurring); see Charles River Bridge Warren Bridge, 11 Pet. 420, 585, 9 773 (1837) (Story, dissenting). confirms understanding. repeatedly without issues arising suits court; indeed, frequently entertained analogous one, taxpayer asked reverse adverse judicial premised upon law.8 correctly note Cohens, infrequently discussed cases. discussions reveal understanding circumscribe state-court judgments.9 little occasion discuss States, interjecting initiated time-honored judgments system. plain framers constitution contemplate cognizance courts, ordinary jurisdiction." Martin Hunter's Lessee, 304, 340, 97 (1816).10 To with, national uniformity of, law, encompassing two conditions: interpret enforce faithfully "supreme Law Land,"11 decisions Court.12 Whereas construed retains immunity original Atascadero Hospital Scanlon, 473 234, 237-240, 105 3142, 3144-3146, 87 171 (1985), "inherent plan," Monaco Mississippi, 292 313, 329, 745, 750, 1282 (1934), takes case, assents raised "whoever parties suit, private persons, itself."13 recognize cases: constrain Accordingly, turn merits claim. III 10 " 'crops adapted growing,' So.2d, 1008, acted awarding provisions. itself, exhausts answer no: places duress promptly relegates him he can legality, Amendment14 obligates backward-looking rectify deprivation.15 recent explain scope procedure this.16 today, rooted firmly precedent dating early century. 436 (1912), railroad company recover protest, franchise apportioned business conducted wholly outside State. concluded portion out-of-state activity. Holmes explained: 12 "It reasonable man denies legality should clear rule being apart circumstances interfere injunction collection revenues, left. Of course speaking put citizen refuses pay. latter his way defence, when, common, more remedy, distress, indicates yielding prevent, sometimes perhaps too slow implied made. 13 driven time assertion legal, constitutional, rights, defence justice require liberty avoid disadvantages bringing side." 217. 14 finding company's "was duress," 287, issued entitling "refunding tax." Thus remedy" extraction duress. 15 751 (1920), Oklahoma award subdivision lands allotted Congress members Choctaw Chickasaw Indian Tribes despite provision allotment treaty making 'lands nontaxable while title remains allottee, exceed twenty-one date patent.' 19, quoting Act 28, 1898, § 29, 30 Stat. 495, 507. distress sale lands, Tribe observed "it nontaxable" subdivisions and, therefore, 21, 421. duress, 23, 421, ordered explained follows: 16 "To say county coercive means incur nothing short saying take allottees arbitrarily process contravention Amendment, binds agency State." 422. 478 (1930) (holding, Ward, denial recovery exacted laws Constitution compulsion Amendment"). 673 (1928), applied discriminatory, otherwise impose. officials shares banks incorporated state-incorporated banks, relying interpreting taxation bank shares. contended different 5219 Revised Statutes, equal banks. overruled interpretation thereafter taxed, enabling comply 5219. Mont. 62, 252 P. 876 (1926). declined, exempted earlier decision. 86, P., 883. error, acknowledged overrule ensured demanded noted, alone "d[id] cure mischief done construction." 333. "c[ould not] deprived right [Montana Court] which, repudiating construction made, le[ft] monies public treasury," 504-505, enjoyed "an undoubted recover" 19 recognized mandate satisfied rather granting possibility, remarked: 20 unnecessary nowhere appears [taxing] officers, they possess [to taxes], undertaken intention ever doing so. soon enough invite consideration purely speculative suggestion ever, practical effect." 21 forced discriminatorily high entitled, addition paid—at unless disparity removed manner. 22 again 265 (1931). unanimously Iowa's higher competing domestic corporations Equal Protection 245-246, 135-136. With respect banks' paid, Brandeis "The [banks'] rights violated, causes arose, lower assumed fallen State, discovery discrimination, By grievances redressed, primarily overassessment. invoked treatment; attained competitors' reduced." 23 elect set matters four encompassed suit. And "well settled" "remitted necessity awaiting initiative." held, "entitled them." B 24 These property, exactions satisfy commands Clause.17 "predeprivation process," bring payment, allowing whereas "[w]e described 'the root requirement' 'that individual hearing significant interest,' Cleveland Bd. Education Loudermill, 470 532, 542, 1487, 1493, 84 494 (1985) (citation omitted), need taxes.18 Allowing litigate liabilities threaten government's security, creating unpredictable interim revenue shortfalls easily prepare, ultimate validly difficult.19 protect exceedingly strong context, employ remedies, sales, make assessment. 25 availed approach, establishing resolved.20 As result, purport like determination assessment's validity;21 rather, raise action. Clause, obligation,22 ensure contest one. 26 Had (other nature) beyond impose, unapportioned absolutely immune Carpenter, corrective invalidity period. "undo" refunding "collect 422; 123. 27 Here, entirety; operated manner commerce. may, course, erase full payments. Bennett illustrate, impermissibly flexibility responding determination. reformulate dictates Having so, appropriately levied reformulated retention deprive end, due: preventing permanent property. More specifically, received. (curing discrimination refunds). Alternatively, 136 (suggesting "collecting competitors").23 Finally, discriminate lawful Clause's fully adequate 29 suggest redress deprivation, retroactively Rather, claim, placed hypothetical Specifically, contend flat distributors. Tax, (at refund); confer burden borne there implicitly line reasoning expressly today. Even aside contrived self-serving baseline propose measure "deprivation,"24 worked scheme's relative category (those dealing products) largely composed companies, diverged fixed substantive norm.25 Hence, salient feature "should occupied" absent equivalence offer restore taxed according "hypothetical" deprivation: using thereby perpetuating correct "claim asks much prompt achieved"26 narrow immediately actual (or adjustment burdens and/or period) about nondiscrimination "prompt achieved." "windfall." comparative discriminates commerce.27 C 31 cites neither mentions [Division Tobacco] disruption (consistent limitations) refunds, find weighty circumstances. sufficiently meets might, complaint; execute installment basis; relatively statutes limitations actions;28 declaration appeal; escrow accounting devices funds. invoke protections suffices stable planning weighed relief.29 assume relevant disagree characterization statute. version (1984). 263 (trial [Imports] "). surprise courts' invalidation 33 speculated premise seems faced meet legitimately generating "passed customers suppliers). accept premise, refuse based sheer "pass-on" occurred.30 particular suppliers entails highly sophisticated theoretical factual inquiry; certainly satisfactorily engaging inquiry.31 34 event, attempt bestowing so-called redressing discriminatory. 859 enforced statutorily created defense Comparing assumpsit "money received," Federal Government's others, ought "unjustly enriched" Government "recovered" losses pass-on. "has shifted [economic] [of tax] purchasers, sufferers real interest," windfall injury. 35 here exceeded authorized statute; complaint marketplace vis-a-vis distributing n. 25, supra; 267, 3053 ("[E]ven completely successfully on, increase[d] [petitioner's] beverages"). whatever succeeded passing prices share.32 place.33 context.34 D 36 assert "would plainly cause Brief Rearg. 20. jurisprudence, traditionally played, play, shaping contours illegally erroneously taxpayers, just initial illegality error. generally Mathews Eldridge, 424 319, 347-348, 96 893, 908-909, 47 (1976). legitimate allegedly assessments, only. 37. chooses curing (as opposed increasing favored), earlier, 46, surprise, precautions reduce exposure themselves variety disruptive effects invalidation, enforcing limitation actions. 45. Such measures States' security taxation. 37 observe entail (apart "cost" itself35 ). Mathews, 348, 909 ("[T]he conserving scarce resources factor weighed" precise due). consider avenues open it. how influence selection afforded leave remand. IV 38 When obtaining principles ranging offsetting charge provide, satisfies minimum outlined.36 reversed, remanded proceedings opinion. 39 ordered. Power regulate States." Const., Art. I, 8, cl. 3. each categories calculated sliding scale. varies directly total volume sold preceding month. low, favorable Conversely, equals rate. contains "retaliation" declare apply imported supports export subsidies benefiting locally beverages. 564.06(9), 565.12(1)(c), 565.12(2)(c) (1989). divides traffic three tiers: (1) manufacture importation; (2) distribution; (3) retail sales. 561.14. Manufacturers sell dealers, serve necessary intermediaries. monthly. Distributors beverage receiving preferences, both. 561.50, 561.506, 565.13. record unclear how, September protested appears, preserve remittance 215.26(2) (generally 3-year containing requirement); Miami Retail Federation, Inc., 423 991, 993 (Fla.App.1982) involuntary promulgated presents bar protest"). purposes exist, explain, infra, 45, remand invoke, independent basis refusing cross-appeal certified District Appeal. immediate filing Notice Appeal automatically order. Fla.Rule App.Proc. 9.310(b)(2). requested vacate stay, continue expose claims refunds. hearing, motion. Pending decision, contests July 1985 February 1988 (the period). Both argued October Term reargued 1989 supplemental briefing requested. 492 915, 3238, 106 586 Judicial equity, Citizens another Subjects Foreign Amdt. 11. 891 (1989); Texas Monthly, Bullock, 1, 890, Tyler Pipe Industries, Washington Revenue, 483 232, 107 2810, 199 (1987); Arkansas Writers' Project, Ragland, 481 221, 1722, 95 Williams Vermont, 472 14, 2465, 86 (1985); (1984); Aloha Airlines, Director Taxation Hawaii, 464 7, 291, (1983); Exxon Corp. Eagerton, 462 176, 2296, 497 Central Machinery Arizona Comm'n, 448 160, 100 2592, 65 684 (1980); White Mountain Apache Bracker, 2578, 665 Halliburton Well Cementing Reily, 373 64, 83 1201, 202 (1963); Laurens Savings Loan Assn. South Carolina 365 517, 81 719, 749 (1961); Memphis Steam Laundry Cleaner, Stone, 342 424, (1952); Best Maxwell, 311 454, 61 334, 85 275 (1940); (1931); International Paper Massachusetts, 246 135, 292, 62 624 (1918); Tonnage Cases, Wall. 204, 370, 376 (1871); cf. Thomas Review Indiana Employment Security Div., 450 707, 101 1425, 67 (1981) (reversing claimant entity unemployment benefits); Bonelli Cattle Arizona, 414 94 526 (1973) quiet title). exercised entities noting precluded matter. Will Police, 491 58, 65, 5, 2304, 2309, 45 ("Had 1983 court," "dismissed plaintiff's damages barred Amendment"); Maine Thiboutot, 9, 2502, 2507, 555 (1980) ("[N]o present, court"); Nevada Hall, 440 410, 99 1182, 1188, 59 416 (1979) (exercising "places explicit limits powers entertain State"). Tafflin Levitt, 493 455, 458, 792, 795, 887 (1990) ("[S]tate inherent authority, competent, adjudicate States"); Federalist 82, p. (J. Cooke ed. 1961) (A. Hamilton) ("[I]n [state courts] excluded acts legislature, give birth. [T]he inference conclusive concurrent union, prohibited"). "This Constitution, Laws pursuance thereof; Treaties Authority supreme Land; Judges bound thereby, Thing contrary notwithstanding." VI. "Upon equally Union, rests guard, enforce, thereof, whenever them. fail therein, privileges, immunities aggrieved decided determination." Robb Connolly, 111 624, 637, 544, 551, 542 (1884). Brinkerhoff-Faris Trust Hill, 281 673, 681, 451, 1107 consequently, final"); (1816) (plenary motivated importance, throughout whole subjects purview constitution"). responded dissent's inadequately Supremacy adverting description, 256, 3154, "longstanding, unarticulated, limit [against States] courts." 240, 2, 3146, suits, constrained reasons apposite here. unreviewable rest state-law ground. Long, 463 1032, 1038, 3469, 3475, 77 1201 dissenting), citing Smith Reeves, 178 436, 919, 44 1140 (1900), dismissed illegal explained, consent state, federal, "subject always condition, supremacy reviewed reexamined [by Court], prescribed act Congress, plaintiff right, title, privilege specially claimed 445, 922. Similarly, Chandler Dix, 194 590, 766, 1129 (1904), recoup compensation deficiencies. defendant initiation court. simultaneously declared, "[o]f him, 592, 766. Rosewell LaSalle 503, 515-516, 1221, 1230-1231, (under objections, return taxes, [state] proceeding, litigants seek Court"). "[N]or person life, liberty, law." approaches advanced today governs O'CONNOR's 177-178, 2330-2331, applies rested jurisprudence. 45-46. STEVENS' 212-218, 2349-2352, decisions, retroactively. SCALIA's separate opinion, 204-205, 2344-2345; warranting departure stare decisis past, invalidating grounds, crafting accord Scheiner, 266, 297-298, 2829, 226 251-253, 2821-2823; 2474; 277, 3058. 902, (1976) ("This consistently finally interest"); Georgia R. Wright, 207 127, 138-142, 47, 51-53, 134 (1907); Davidson New Orleans, 97, 104-105, 616 (1878). Bob Jones University Simon, 725, 746, 2038, 2050, (1974); Phillips Commissioner, 283 589, 595-597, 51 608, 611-612, 75 1289 Dodge Osborn, 240 118, 122, 275, 276, 60 557 (1916). California Grace Brethren Church, 457 393, 2498, 2509, 73 93 (1982) (" 'During [prepayment litigation] obstructed, consequent damage budget, shift risk insolvency' "), Perez Ledesma, 401 128, 91 674, 698, 701 (1971) (Brennan, concurring dissenting part); Dows City Chicago, 108, 110, (1871) ("It chiefly rely carry respective governments, utmost importance modes adopted interfered possible. Any delay whom devolved derange operations government, detriment public"). fails time, warrant circuit directs sheriff levy delinquent taxpayer's goods chattels unpaid plus penalty 50%, along 1% per executing warrant. 210.14(1) addition, revoke, 561.29(1)(a), decline renew, 561.24(5), distributor's abide seizure personal "duress" Mississippi 412 368, 2183, 2187, (economic nonpayment); (1920) (distress land); Gaar, Scott Shannon, 468, 471, 236, 237, 510 (1912) (both). pays "under duress" proffers "serious rights" await "by suit." 286, contrast, instead offers assessments tendered deemed "voluntary." safeguard deprivations complain 11, "[W]here voluntary knowingly demand, denied"). 902 ("The fundamental heard 'at manner' ") omitted). adequacy aspect dispute. increase necessarily increased, temporal point "so harsh oppressive transgress limitation," depending laid." Welch Henry, 305 134, 147, 126, (1938). Hemme, 476 558, 2071, 90 538 (1986); Darusmont, 449 549, 66 513 (1981); Sperry Corp., 52, 387, 396, 290 surely legislate retrospectively program entire class persons rationally believes bear them"); Usery Turner Elkhorn Mining 428 16, 2882, 2893, 49 752 ("[L]egislation readjusting solely upsets expectations. true legislation new liability past acts") (citations know violate unduly interfering Should remedial alternative, perfectly successful. Some longer business. good-faith administer constitute collectors inadvertently missed few in-state taxpayers. Whether depends counterfactual assumptions regarding many complex variables affect legislative prediction proved. quite possible, unable enact universally keep growers (mostly in-state) products—even generate less revenue. "[i]t manufacturers [the Tax] direct competition not. facts mind becomes clearly raises manufacturer base 'adapted growing Florida.' 1008 15. scale schedules sold. schedule petitioner, gallons (and generally-applicable tax) [would be] included calculation" 28. Los Angeles Water Manhart, 435 702, 719-720, 36, 98 1370, 1380-1381, 55 657 (1978) district discretion, devising remedy Title VII sex-based insurance premiums, determine recalculation premium actuarially plan). Were calculation, maximum rates scales routinely apply. likely, owe extending fashion—but proposal appear accomplish result. proposed, calculate goods, untouched resulting questions use "volume" variable latter. originally imposed, 422 (recognizing "any [limitations] force filed"); actions). join stay continuing extra "[t]here mechanism refunds." 286. favorably motions preliminary ruled sua sponte appeal. At evidence concerning extent, any, pass consumers suppliers. statement speculative. expressed theoretical, factual, difficulties satisfactory antitrust doctrine. Illinois Brick Illinois, 431 720, 741-745, 2061, 2072-2074, 707 (1977); Hanover Shoe, Shoe 392 481, 492-493, 88 2224, 2231, 1231 (1968). A. Atkinson J. Stiglitz, Lectures Public Economics 160-226 Musgrave Musgrave, Finance Theory Practice 256-300 (3d 1980); McLure, Incidence Analysis Court: Examination Four Cases 1980 Term, Sup.Ct.Econ.Rev. 69 (1982); D. Phares, Who Pays Local Taxes? (1980). reason, often complicated massive theories." 493, 2231. Petitioner's share constant reacted raising trying burden. suffered injury enabled derive constant, run, retailers cost-plus contracts. 494, 2232. position. conceivable severe, drives entirely (though rational simply shouldered itself). (should avenue relief) extends Tax. suffered. 3, 2; 7. While concede waived sovereign 215.26's authorization waiver ex rel. Szabo Food Service, Dickinson, 286 529 (Fla.1973). import contention, misdescribe characterized alleged consideration," prohibition There, food well. 532. unique lacked standing explaining "[o]ne himself wrongfully extracted suffers loss injury, accordingly, demand refund." mention, let intimation considered Just object criminal fines finds useful, ideas spend free, 3058, 14.

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