Court Opinion

ID: 6360551
Source: CourtListenerOpinion
Date Created: 2022-06-24 23:35:23.954288+00
Date Added: 2024-06-11T15:49:40.346398
License: Public Domain

Dissenting Opinion by
Judge Mencer:
I respectfully dissent.
Any tax, however measured, imposed by a state upon the business of loading cargo onto or unloading cargo from ships engaged solely in interstate or foreign commerce is in direct conflict with Article I, Section 8, of the United States Constitution1 and, therefore, unconstitutional as a tax on the privilege of engaging in interstate or foreign commerce. Puget Sound Stevedoring Co. v. Tax Commission of the State of Washington, 302 U.S. 90, 82 L. ed. 68, 58 S. Ct. 72 (1937).
I cannot accept as controlling the majority’s “water’s edge” test which was the sole basis for its determination that appellant was “out of the stream of interstate and foreign commerce.” The majority reached its conclusion by the following reasoning: “At all times the tallymen in this case sat on the dock, counting items and checking them for damage. They never boarded the ship, never unloaded cargoes and never extended their activities beyond the water’s edge in any fashion. Applying Mr. Justice Douglas’ test, we draw the line at the water’s edge. Doing so puts Atlantic’s services out of the stream of interstate and foreign commerce.”
In Puget Sound Stevedoring Co., supra, it was recognized that transportation of cargo by water is impossible unless the thing to be transported is put aboard the ship and taken off at its destination. The Court said: “True, the service did not begin or end at the *260ship’s side, where the cargo is placed upon a sling attached to the ship’s tackle. It took in the work of carriage to and from the 'first place of rest’, which means that it covered the space between the hold of the vessel and a convenient point of discharge upon the dock.” Here we have appellant’s tally clerks checking for damage and counting cargo as it is moved by stevedores. This is not a subsequent checking but is simultaneous with and part of the unloading operation. This service is an integral part of the business of unloading cargo and, if done by the ship’s crew or by stevedores, would be, without question, a part of the unloading process and essential to waterborne commerce.
It is likewise significant that appellant controlled, directed, and supervised the work of its tally clerks. The mere fact that appellant’s employees never boarded the ship or crossed the water’s edge is not the controlling factor. The dominant factor is whether the counting and inspection at the “first place of rest” was an integral part of unloading the ship’s cargo. The majority opinion quotes with approval Justice Douglas, from Western Maryland Ry. Co. v. Rogan, 340 U.S. 520, 95 L. ed. 501, 71 S. Ct. 450 (1951), when he said: “. . . the line must be drawn at the water’s edge.” However, the majority fails to set forth Justice Douglas’ next sentence which reads: “Whether loading and unloading would be exempt is a question we reserve.”
Thus it is clear that in Western Maryland Ry. Co. v. Rogan, supra, it was decided that the transportation of goods by railroads from the port to their final destination and from the place of origin of shipment to the port was not foreign commerce. The test then, as applied to the facts of the instant case, is not one of the “water’s edge” but rather whether appellant’s tally clerks are engaged in the business of unloading the ship’s cargo, such unloading from ship to dock being *261the terminal phase of the cargo’s being in foreign commerce. I conclude that they were so engaged in the business of unloading cargo and that appellant is not subject to the Pennsylvania tax in question.
I would distinguish the instant case from the holdings in Commonwealth v. Northern Metal Co., 416 Pa. 75, 204 A. 2d 467 (1964), cert. denied, 380 U.S. 944, and Commonwealth v. Camax Company, 83 Dauph. 56 (1964), since here (1) we have a foreign corporation, not a domestic corporation, and (2) appellant is not engaged in intrastate commerce.
The fact that a business is exclusively engaged in Interstate or foreign commerce does not necessarily insulate it from an apportioned state net income tax. Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 3 L. ed. 2d 421, 79 S. Ct. 357 (1959). If the tax is not on the privilege of engaging in interstate or foreign commerce and does not discriminate against, interfere with, or unduly burden such commerce, then the business is not insulated from the tax. Roy Stone Transfer Corp. v. Messner, 377 Pa. 234, 103 A. 2d 700 (1954). Here the business that appellant does in Pennsylvania is exclusively in foreign commerce, and Pennsylvania’s attempt to impose a tax on the privilege of doing such business constitutes a privilege tax on foreign commerce. Commonwealth v. Eastman Kodak Co., 385 Pa. 607, 124 A. 2d 100, cert. den., 352 U.S. 952 (1956); Roy Stone Transfer Corp. v. Messner, supra. Such a tax is an interference by Pennsylvania with freedom of foreign commerce and accordingly is forbidden by the Commerce Clause of the United States Constitution. Joseph v. Carter and Weekes Stevedoring Company, 330 U.S. 422, 91 L. ed. 993, 67 S. Ct. 815 (1947). See Phila. Tax Review Board v. Norton, Ully and Co., 398 Pa. 77, 157 A. 2d 60 (1959).
Judges Kiiambr and Manderino join in this dissent.

 “The Congress shall have Power ... To regulate Commerce with foreign Nations, and among the several States . . .” U. S. Const art. I, §8.