191 F.2d 123 (9th Cir. 1951), 12586, Anderson v. Mullaney

Docket Nº:12586.
Citation:191 F.2d 123
Party Name:ANDERSON et al. v. MULLANEY, Commissioner of Taxation of Territory of Alaska.
Case Date:June 25, 1951
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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Page 123

191 F.2d 123 (9th Cir. 1951)

ANDERSON et al.

v.

MULLANEY, Commissioner of Taxation of Territory of Alaska.

No. 12586.

United States Court of Appeals, Ninth Circuit.

June 25, 1951

Page 124

Wm. L. Paul, Jr., Juneau, Alaska, and Roy E. Jackson, Carl B. Luckerath, and Norman Ackley, Seattle, Wash., for appellant.

J. Gerald Williams, Atty. Gen. of Alaska, John H. Dimond, Asst. Atty. Gen., for appellee.

Before DENMAN, Chief Judge, and ORR and POPE, Circuit Judge.

POPE, Circuit Judge.

Chapter 66 of the Session Laws of Alaska 1949, enacted March 21, 1949, requires all commercial fishermen who take fish from the fishery resources of Alaska to obtain an annual license from the Territorial Tax Commissioner. For such license

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the fee charged a resident fisherman is $5; that charged a nonresident fisherman is $50. 1 The statute also prohibits other persons from employing, or purchasing fish from, any unlicensed fisherman.

Anderson, Secretary-Treasurer of the appellant Union, and the Alaska Fishermen's Union, on behalf of some 3200 of its members who are nonresidents, and who fish in Alaska each year, brought this action seeking a declaration of the court that Chapter 66 is unconstitutional and void insofar as it seeks to exact the $50 nonresident license fee, and praying for an injunction restraining the appellee Commissioner of Taxation from making collection. 2

The court made findings that '6. Thousands of nonresident fishermen come to Alaska each year and engage in fishing for salmon during the fishing season, which varies from twenty days in Bristol Bay to two months elsewhere. Said nonresident fishermen come to the Territory shortly before the fishing season and depart therefrom immediately after the close of the fishing season. Said nonresidents own no property in the Territory, and are not required by shipping laws to enter or clear upon arrival in or departure from the Territory. During the time said nonresidents are within the Territory, they enjoy the protection of local government. 7. Defendant and his deputies have detected evidence indicating large scale evasions of payment of the fishermen's license tax by nonresident fishermen. In order to enforce collection of this tax from the nonresident fishermen, defendant found it necessary to send an enforcement officer each year throughout the various fishing areas located along the 26, 000 miles of Alaska coastline. The difficulties encountered by defendant and his deputies in the collection of license taxes from nonresident fishermen and the detection and apprehension of those who evade payment of this tax are almost insuperable. 8. Little difficulty is encountered by defendant and his deputies in the collection of the license tax from resident fishermen. There are few attempts at evasion by this class of fishermen, and since resident fishermen are within the jurisdiction of the Territory after the close of the fishing season, the detection and apprehension of those who do evade payment of the tax is not difficult. 9. It is much more difficult and expensive to collect the license tax from nonresident fishermen than it is from resident fishermen. Approximately 90% of the cost of collecting the fishermen's license taxes is incurred in collecting or attempting to collect said taxes from nonresident fishermen. 10. The net annual earnings of trollers for a season of four or five months average approximately $3, 500.00; of gill netters in Bristol Bay approximately $2, 500.00 for a season of twenty days; and the average earnings of those employed on cannery tenders and traps are approximately $1, 500.00 and $2, 000.00 respectively.'

The court concluded that Chapter 66 did not 'contravene the Fourteenth Amendment to the Constitution, the Civil Rights Act, or the Organic Act of Alaska; does not encroach upon the admiralty jurisdiction of the United States or affect its substantial uniformity; and does not burden interstate commerce in violation of Article I, Section 8, of the Constitution. The classification of fishermen into residents and nonresidents as contained in Chapter 66 is valid because it rests on substantial differences bearing a fair and reasonable

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relation to the object of the legislation. The $50.00 license fee imposed on nonresident fishermen under Chapter 66, is reasonable and not excessive.'

Accordingly, the complaint was dismissed.

Upon this appeal Anderson and the Union contend that because of its discriminatory features the Act is in violation of the Organic Act, 48 U.S.C.A. § 21 et seq. 3 the Civil Rights Act, 8 U.S.C.A. § 41, 4 that portion of Sec. 2, Article IV of the Constitution relating to privileges and immunities of citizens, and the equal protection clause of the Fourteenth Amendment. It is also attacked as a burden on interstate commerce and void for that reason. Appellants further assert that the findings above quoted are not sustained by the evidence.

In disposing of the contention that the Alaska statute imposes an unconstitutional burden upon interstate commerce the trial judge said: 'Since * * * it is well settled that a tax of this kind is not a burden on interstate commerce because the taxable event- the taking of fish- occurs before the fish have entered the flow of commerce, Toomer v. Witsell, 334 U.S. 385, 394, (68 S.Ct. 1156, 92 L.Ed. 1460) * * * these contentions will not be discussed.' 5 We think the problem presents more difficulty than the trial judge thought.

We assume that the trial court had in mind no more than the fact that the product of the canneries would ultimately be sold in the States. But a reference to the court's findings and to the evidence in the record discloses that the interstate shipment of the product is only one part of the complete picture. It is only the final end of the interstate assembly line which puts the fish on the tables of the consumer. The other end of this great integrated enterprise, which follows uniform patterns from year to year, concerns the massive migratory movement of the fishermen from their homes in the Pacific Coast States into Alaska for the annual fish season. 6 The evidence shows that some of these fishermen are employed by the canneries and others sell their catches to the same canneries from whence the product is marketed in the States. While local Alaskan residents are also fishermen employed in the same enterprise and in the same manner as the nonresidents, yet the greater number of fishermen and the best qualified ones are those who reside in the States and who come into Alaska for the fishing season only. 7

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Thus it is apparent that so far as Alaska fisheries are concerned, they are in the center of a great interstate movement which begins when the fishermen start north to fish and terminates with the delivery of the processed product to the dealers in the States. The catching of the fish is but an interlude in this large flow of commerce. 8

This commerce is not 'interstate' in the sense that it is from one State to another State. But this court has held that commerce between the States and a Territory which has become a part of the United States in interstate commerce. Inter-Island Steam Nav. Co. v. Territory of Hawaii, 9 Cir., 96 F.2d 412, 416, 417, and such has been assumed to be true in McLean & Co. v. Denver & Rio Grande R.R. Co., 203 U.S. 38, 49, 27 S.Ct. 1, 51 L.Ed. 78; Hanley v. Kansas City Southern Ry. Co., 187 U.S. 617, 620, 23 S.Ct. 214, 47 L.Ed. 333; and Inter-Island Steam Nav. Co. v. Territory of Hawaii, 305 U.S.S. 306, 313, 59 S.Ct. 202, 83 L.Ed. 189.

We shall have occasion later in this opinion to point out that without regard to whether this movement in commerce be denominated 'interstate' or 'state-to-territory' commerce, the limitations on the Territory's power to regulate it are not in any substantial respect different from those applicable to a State. We proceed therefore to consider the validity of such a law if Alaska were a State.

That in such case the movement of these fishermen into Alaska would constitute interstate commerce is elementary. As stated by Mr. Justice Stone in Colgate v. Harvey, 296 U.S. 404, 444, 56 S.Ct. 252, 265, 80 L.Ed. 299: 'This Court has many times pointed out that movements of persons across state boundaries are a part of interstate commerce subject to the regulation and entitled to the protection of the national government under the commerce clause. Caminetti v. Unites States 242 U.S. 470, 37 S.Ct. 192, 61 L.Ed. 442; Hoke v. United States, 227 U.S. 308, 33 S.Ct. 281, 57 L.Ed. 523; (Town of Vidalia v. McNeely, 274 U.S. 676, 47 S.Ct. 758, 71 L.Ed. 1292; Gloucester Ferry Co. v. (Commonwealth of) Pennsylvania, 114 U.S. 196, 5 S.Ct. 826, 29 L.Ed. 185; cf. Passenger Cases 'Smith v. Turner), 7 How. 283.' 9 In this connection Mr. Justice Stone referred to Crandall v. State of Nevada, 1867, 6 Wall. 35, 18 L.Ed. 744, in which a Nevada capitation tax on persons leaving the State by railroad or other common carrier, was held unconstitutional. He said: 'No one could doubt that if the decision had been made at any time after Baltimore & Ohio Railroad Co. v. Maryland (1874), 21 Wall. 456, 472, 22 L.Ed. 678, and until the present moment, it would have been rested on the commerce clause.'

A more recent statement with respect to the movement of persons across State lines as interstate commerce was made in Edwards v. People of State of California, 314 U.S. 160, 172, 62 S.Ct. 164, 166, 86 L.Ed. 119, where, referring to Art. I Sec. 8 of the Constitution, it was said that 'it is settled beyond question that the transportation of persons is 'commerce' within the meaning of that provision.' 10

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We cannot avoid the fact that the movement of these better fishermen, upon whom the life of the industry depends...

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