Court Opinion

ID: 9418773
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:38:57.595762+00
Date Added: 2024-06-11T17:11:32.600847
License: Public Domain

Mr. Justice Cardozo,
dissenting in part.
The graduation of a tax upon the business of a chain store may be regulated by the test of territorial expansion, and territorial expansion may be determined by the spread of business from one county into another.
Students of the chains have accepted the classification of the Census Bureau, which divides them into three groups: local, sectional and national. Census of 1930, Report on Retail Distribution by Chains; Lebhar, “The Chain Store,” p. 20. Chains are local “ if substantially all their stores are located in and around some one city.” *581In 1930, the number of these was 5589. They are sectional if their “ stores are located in some one section of the country, such as the New England states or the Pacific Coast States or in the Gulf Southwest or any other geographic division.” Of these there were 1136. They are national if their “ interests are broader than those of any one section of the country.” Of these there were 321.
Statistics thus indicate that there is. a definite line of cleavage between chains that serve consumers within a single territorial unit and those framed for larger ends. ¡ The business that keeps at home affects the social organism in ways that differ widely from those typical of a business that goes out into the world. It affects the social organism, but also it affects itself. With the lengthening of the chain there are new fields to be exploited. The door is opened to opportunities that have hitherto been closed. Where does the local have an end and the non-local a beginning? The legislature had to draw the line somewhere, and it drew it with the county. Within the range of reasonable discretion its judgment must prevail. There is need to remember the varying significance of county lines for, varying communities. From the beginnings of our history, the town has been the distinctive unit of government in the New England states and in many others of the North. In the South from the beginning the distinctive unit has been the county. Bryce, The American Commonwealth, (2nd edition, revised) vol. 1, part'll, chap. 48, pp. 570, 571; K. H. Porter, County and Township Government in the United States, p. 60. Florida is largely an agricultural state; The census of 1930 shows three cities of over 100,000 (Jacksonville, 129,549, Miami, 110,637, and Tampa, 101,161); four between 20,000 and 40,000 (Orlando, West Palm Beach, Pensacola, and St. Petersburg); and seven between 10,000 and 20,000. Of these fourteen cities, all are in different counties. In a state with a population thus distributed, *582the boundaries of the county will have an approximate correspondence with the area of local business. When a chain goes beyond the county, beyond the traditional boundaries of local government,’it puts the locality behind it, and elects to play for larger stakes.
.Every new community is potentially a new centre.of economic opportunity. -' There is then a hazard of new adventures, a tapping of new sources of dominance and profit. At once with this advance, the tax mounts into higher brackets, but does not mount again. • There are not progressive increases when a business, after -moving into one county, moves on again to others. The second county once attained, the rate is not affected though many more are added. The chain has made its choice, and for this it pays but once. It has put its local character away, and found alignment in another class. It is on the way to becoming an organization of another order,- to becoming sectional or national. There is confirmation of this, tendency in the facts stated in the bill as to the. stores operated by the complainants and by those allowed to intervene. All who have gone beyond a single county do business in.many more, or else in many states. One can imagine extreme. cases, to. be sure, where county lines may be crossed and the business remain local in substance, if not in form. The store in the new county may be next to the boundary line that separates from the old. So too the chain that is national in scope may have its Florida stores in one county and one only, in which event it is local quoad its activities' in'Florida, whatever it may be beyond. Lawmakers are not required to legislate with an eye to exceptional conditions. Their search is for probabilities and tendencies of general validity, and these being ascertained, they may frame their rule accordingly. They are not required to legislate with an eye to forms of growth beyond the limits of their own state. .In laying a tax upon a Florida chain their concern is with those *583activities that have social and economic consequences for Florida and her people. The question for them, and so for us, is liot how a business might be expected to develop if its forms and lines of growth were to be predicted in the abstract without reference to experience. The question is how it does develop in normal or average conditions, and the answer to that question is to be found in life and history. When the problem is thus approached, the movement from one county to another becomes in a very definite sense the crossing of a frontier, a change as marked' as the difference between wholesale trade and retail. Cook v. Marshall County, 196 U. S. 261. So at least the legislature might not unreasonably believe, and act on that belief in the formulation of the law. O’Gorman & Young v. Hartford Fire Insurance Co., 282 U. S. 251, 257.
Corresponding to the change of opportunity—to the change at the periphery—that accompanies • the expansion of the area of action are changes at the centre. The chain that is merely local is likely to be organized more simply than the one that spreads itself afar. Methods at the point of origin must be adapted to expanding needs. Other things being equal, there will be a new concentration of control, a new unity of administration, a new emphasis of the very features that distinguish chain stores from others and supply an important reason for taxing the two differently, whether within the county or without. Tax Commissioners v. Jackson, 283 U. S. 527, 534. Movement' from the locality to other fields of activity is thus a symptom of an inner change. This, at least, is its' normal meaning, its meaning, or so the legislature might fairly say, in the common run of cases. ' If so, the scale of payment may be graduated in correspondence with the, changing facts.
There is a distinction not to be ignored between the facts that, determine subjection to a tax and those that measure its amount. “ Classification good for one pur*584pose may be bad for another.” Louisville Gas Co. v. Coleman, 277 U. S. 32, 38. The case cited drew a distinction between graduation of the burden and uncondi- ■ tional exemption. The business conducted by these appellants is not subjected to a tax bec'ause it is in several counties. It is taxed because it is the business of operating chain stores, and its spread over counties is only one circumstance, along with others, to be considered by the Collector in determining how much it has to pay. The factor may be inconclusive if our search is for mathematical exactness. This is far from saying that it is to be rejected as irrelevant. None of the factors measuring this tax. will answer to a test of certainty. Even' where the business is kept within a single county, there is no certainty that a chain of thirty stores will so differ from one of fifty either in its method of organization or in the proportionate returns that the first should pay a tax at one rate for every store, and the second at another. The like is true where organization is affected by territorial expansion. There is a relation surpassing mere irrelevance between the essential character of the business and its territorial spread beyond the unit of , its origin. Even if this is doubtful a priori, it is made apparent or probable by statistics and experience. A court will go no farther.
What has been written has discovered differences between local chains and others, differences in organization at the centre and in opportunity at the outer rim. The differences need not be great. Tax Commissioners v. Jackson, supra, at p. 538. This is true even of the classes that may be described as primary, those accompanied by a division between a tax and no tax. It is true even more plainly Of subclasses, the secondary divisions corresponding to graduations of the scale. How slight may be the variance that will mark a permissible classification between a tax and none at all has illustration in the case at hand. The prevailing opinion upholds the power of the state to discriminate between integrated and volun* *585tary chains, though the difference of organization is slender and the inequality of economic benefit uncertain and disputed. Slender though the difference of organization is, it is real enough to rescue classification from the reproach of an arbitrary preference. It will not do to shut one’s eyes to the motive that has led so many legislatures to lay hold of this difference and turn it into a basis for a new system of taxation. The system has had its origin in the belief that the social utility or inutility of one group is less or greater than that of others, and that the choice of subjects to be taxed should be adjusted to social gains and losses. Courts would be lacking in candor if they were not to concede the presence of such a motive behind this chain store legislation. But a purpose to bear more heavily on one class than another will not avail without more to condemn a tax as void. American Sugar Refining Co. v. Louisiana, 179 U. S. 89, 95; Southwestern Oil Co. v. Texas, 217 U. S. 114, 126; Sproles v. Binford, 286 U. S. 374, 394; Stephenson v. Binford, 287 U. S. 251. We must know why the discrimination is desired, to what end it is directed and the relation between end and means. If the motive is vindictiveness, ensuing in mere oppression, the result may be one thing. If the motive and the end attained are the advancement of the public good, the result may be quite another, unless 'preference and repression go so far as to -outrun the bounds of reason. The legislature has determined with the approval of the court that an integrated chain is a taxable class separable from independent dealers and even from chains that are merely cooperative leagues. If these differences suffice to establish a basis for distinction between a tax and hone at all, smaller differences may suffice for the graduation of the scale. The legislature has found them in those variations of degree that separate a chain within the territorial unit of the locality from chains that are reaching out for wider fields, of power. There is no need to approve or disapprove the concept of utility or inutility reflected in such laws. State Board of Tax Commissioners v. Jackson, *586supra, at p. 537. The concept may be right or wrong. At least it corresponds to an intelligible belief, and one widely prevalent today, among honest men and women. Cf. Otis v. Parker, 187 U. S. 606. With that our function . ends.
Systems of taxation are not framed, nor is it possible to frame, them, with perfect distribution of benefit and burden. Their authors must be satisfied with a rough and ready form of justice. This is true in special measure while the workings of a novel method are untested by a rich experience. There must be advance by trial and error. Taxes upon chain stores are not exempt from these infirmities. To what extent there is a change of form and) spirit when a business ceases to be local is not a question of law. O’Gorman & Young v. Hartford Fire Ins. Co., supra. In essence it is one of fact. There is a presumption that the legislature did not classify along the lines of counties without study of the- relevant data or without an informed and considered judgment. Its findings are not subject to annulment by a court unless facts within the range of judicial notice point to. them as wrong. In- discarding as arbitrary symbols the lines that it has chosen, there is- danger of forgetting that in sbcial- ' and -economic life the grooves of thought and action are not always those of logic, and that symbols may mean as much as conduct has put into them.
Holding these views, I find it unnecessary to consider whether the statute may be upheld for the additional reasons that have been stated by Mr. Justice Brandéis with such a wealth of learning. They present considerations that were not laid before us by counsel either in the briefs or in the .oral- argument, and a determination of their validity and weight may be reserved with' propriety until the necessity emerges.
My vote is for affirmance.
I am authorized to .state that Mr. Justice . Stone con- . curs in. this opinion.