Evansville-Vanderburgh Airport Authority Dist. v. Delta Airlines, Inc., EVANSVILLE-VANDERBURGH
| Citation | 265 N.E.2d 27,255 Ind. 436 |
| Decision Date | 23 December 1970 |
| Docket Number | No. 869S179,EVANSVILLE-VANDERBURGH,869S179 |
| Parties | AIRPORT AUTHORITY DISTRICT, Kenneth C. Kent, Elmo Holder, Robert M. Leich, Ian F. Lockhart, Clifford K. Arden, James A. Geyer and Paul E. Hatfield, On Behalf of Himself and All Other Persons Similarly Situated, Appellants, v. DELTA AIRLINES, INC., Eastern Airlines, Allegheny Airlines, Inc., and WilliamF. Wood, On Behalf of Himself and All Other Persons Similarly Situated,Appellees. |
| Court | Supreme Court of Indiana |
Howard P. Trockman, James F. Flynn, Evansville, for appellants.
Fred P. Bamberger, Jeffrey R. Kinney, Evansville, John K. Mallory, Jr., Roger D. Chittum, Washington, D.C., for appellees; Bamberger, Foreman, Oswald & Hahn, Evansville, Cleary, Gottlieb, Steen & Hamilton, Washington, D.C., of counsel.
This is an appeal from a final judgment in the Vanderburgh County Superior Court granting appellees a permanent injunction against the enforcement of Evansville-Vanderburgh Airport Authority District's Ordinance No. 33, which ordinance establish a charge of $1.00 for each passenger (with certain exceptions) enplaning a commercial aircraft at Dress Memorial Airport, Evansville, Indiana. The other appellants are either directors or officers of the appellant Airport Authority District.
On February 26, 1968, appellants enacted Ordinance No. 33, intended to become effective July 1, 1968, which levied a charge of $1.00 on enplaning commercial air passengers at Dress Memorial Airport. The ordinance, in pertinent part, reads:
'Section 1. Commencing on July 1, 1968, there is hereby fixed, created and established a use and service charge of One Dollar ($1.00) for each passenger enplaning any commercial aircraft operated from the Dress Memorial Airport.
'Section 4. The term 'each passenger enplaning any commercial aircraft operated from the Dress Memorial Airport' shall not include, nor shall the use and service charge hereby created, apply to any active members of the United States Armed Forces enplaning aircraft at the Dress Memorial Airport, or any person purchasing an airline ticket having, as an initial point of departure, a locality other than Dress Memorial Airport, and whose flight either terminates or requires an intermediate or temporary stop at Dress Memorial Airport.
The appellee airlines are commercial air carriers transporting passengers, freight, express and mail to and from Dress Memorial Airport in interstate commerce under authorization of the Civil Aeronautics Board. Each of the appellee airlines leases and operates facilities at Dress Memorial Airport for the purposes of providing commercial air passenger and freight service. The appellees sought to enjoin the enforcement of Ordinance No. 33 on the grounds it was unconstitutional and illegal in several respects. In granting appellees a permanent injunction the trial court made eleven conclusions of law, but in the view we take of this case it is necessary to discuss only the following one:
'The $1.00 charge imposed by ordinance No. 33 upon passengers enplaning upon commercial aircraft at Dress Memorial Airport, not being related to or apportioned according to the use of facilities at Dress Memorial Airport, constitutes an unreasonable burden upon interstate commerce ni the United States.'
Appellants' argument on appeal is that that conclusion is erroneous and the $1.00 tax is a valid service tax for the use of facilities provided by appellants at Dress Memorial Airport and thus not an unreasonable burden on interstate commerce.
There is no question that the incidence of the tax imposed by Ordinance No. 33 falls on interstate commerce. The tax is on the act of enplanement on one of the appellee airlines and in 1966, 88.4% of the persons departing Dress Memorial Airport upon the appellee airlines enplaned for ultimate destinations beyond the State of Indiana.
The basic principle governing the power of a state to levy a tax affecting interstate commerce is that such a tax 'can only be justified as designed to make such commerce bear a fair share of the cost of the local government whose protection it enjoys.' National Bellas Hess, Inc. v. Dept. of Revenue (1967), 386 U.S. 753, 87 S.Ct. 1389, 18 L.Ed.2d 505; Freeman v. Hewit (1946), 329 U.S. 249, 67 S.Ct. 274, 91 L.Ed. 265. The mere fact that the taxing authority denominates a tax as a 'use' or 'service' does not settle the question, however. The classification used by the taxing authority for the assessment of such fees must embody a uniform, fair, practical standard bearing a reasonable relationship to the use of state facilities. Northwest Airlines, Inc. v. Joint City-County Airport Bd. (1970, Mont.S.Ct.), 463 P.2d 470; Hendrick v. Maryland (1915), 235 U.S. 610, 35 S.Ct. 140, 59 L.Ed. 385.
The sole issue then on this appeal is whether the act of enplaning a commercial aircraft is reasonably related to the use of the facilities at Dress Memorial Airport for which the $1.00 tax is levied.
The facts are undisputed and show the following:
In 1967, there were 146,955 enplaning passengers and 145,142 deplaning passengers on air carrier flights at Dress Memorial Airport. In 1967, there were 14,834 take-offs and landings by commercial air carriers and there were 84,598 take-offs and landings by other civil and military aircraft.
The airport facilities at Dress Memorial Airport include the following facilities and services:
'(1) Main Terminal Building
air passenger service counters
air freight service counters and facilities
waiting room
rest rooms
dining room
bar
lunch counter
newsstand
barber shop
display areas
taxi stands
car rental counters
baggage facilities
telephone booths
'(2) Other Facilities
private hangar facilities
nonscheduled airline hangar facilities, office space, and waiting areas
entrance and exit facilities and sidewalks
parking lots
fuel storage areas
office space
runways and taxi-ways
approach lighting system
instrument lighting system'
By the express terms of the Ordinance the revenue from the tax is for the support of all of these facilities, the relevant part stating:
(Emphasis added.)
However, enplaning commercial air passengers are not the only persons using these facilities. It was stipulated by the parties that the above facilities and services are also used by the following classes of...
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