Court Opinion

ID: 6863066
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:51:07.394422+00
Date Added: 2024-06-11T16:05:16.652558
License: Public Domain

SANBORN, Circuit Judge
(concurring).
The power of the federal courts to enjoin the collection of state taxes upon the property of an interstate carrier has been so circumscribed, as pointed out by Judge STONE, in his able opinion, that, although I have no doubt that the property of the appelant in North Dakota was overvalued for tax purposes in 1933,1 concur in the conclusion reached in the opinion and the reasons assigned for it. I am not, however, in entire sympathy with the rule which seems to preclude any interference with such overassessments unless it clearly appears that they result from purely arbitrary action or from something akin to fraud. While death from an honest error'of judgment may be preferable to death designedly caused, the effect upon the victim is the same. Overtaxation resulting from honest mistake or errors of judgment is as serious as that resulting from fraud, and constitutes just as unreasonable a burden upon interstate commerce. I regard state taxation of interstate carriers as a matter of national concern.
In this case the defendants’ own expert states that no method of computation with which he is familiar would produce a value for 1933 equal to that fixed by the State Board. To that extent we have a different situation here than in the Rowley Case. That the value of the portion of appellant’s system in North Dakota in 1933, after the appellant had been through three years of depression, even approximated the values of 1928 and 1929 is to my mind inconceivable. Possibly I am substituting my judgment for that of the board, but the Supreme Court in Atchison, Topeka & Santa Fé Railway Co. et al. v. United States et al., 284 U. S. 248, at page 262, 52 S. Ct. 146, 150, 76 L. Ed. 273, referred to a record made in a rate hearing in 1928 as pertaining to a “different economic era,” and said: “This is not the usual case of possible fluctuating conditions but of a changed economic level.” Certainly no group of men who in 1933 were ready, able, and willing to buy the appellant’s system, and who were clothed in their right minds, would have paid, as the result of fair negotiations, any such sum for the portion of the road in North Dakota as was fixed by the board. So that, while. I agree that the court below, upon this record, was justified in denying the injunction prayed for, I am suffering from no illusions with respect to the great changes which took place in the value of all railway properties between the years 1929 and 1933. It may be impossible now for the federal courts to grant any relief to interstate carriers from overtaxation possibly resulting from honest mistakes or errors of judgment on the part" of the taxing authorities of those states through which their lines run, but I believe that if interstate commerce by rail continues to be unreasonably overburdened with state taxes, either Congress or the courts will find some way to protect it. In this connection, the opinions of Judge Webster in Northern Pac. Ry. Co. v. Adams County et al. (D. C. E. D. Wash.) 1 F. Supp. 163, and of Mr. Justice Brandeis in Nashville, Chattanooga & St. Louis Ry. v. Walters et al., 55 S. Ct. 486, 79 L. Ed.-, opinion filed March 4, 1935, are of interest.