Nippert v. City of Richmond

Decision Date25 February 1946
Docket NumberNo. 72,72
PartiesNIPPERT v. CITY OF RICHMOND
CourtU.S. Supreme Court

Appeal from the Supreme Court of Appeals of the State of virginia.

Mr.Cornelius H. Doherty, of Washington, D.C., for appellant.

Mr. Horace H. Edwards, of Richmond, Va., for appellee.

Mr. Justice RUTLEDGE delivered the opinion of the Court.

The question is whether a license tax laid by an ordinance of the City of Richmond, Virginia, upon engaging in business as solicitor can be applied in the facts of this case consistently with the commerce clause of the Federal Constitution, Article I, § 8. As the case has been made, the issue is substantially whether the long line of so-called 'drummer cases'1 beginning with Robbins v. Shelby County Taxing District, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694, shall be adhered to in result or shall now be overruled in the light of what attorneys for the city say are recent trends requiring that outcome.

The ordinance lays an annual license tax in the following terms:

'(Upon) * * *—Agents—Solicitors—Persons, Firms or Corporations engaged in business as solicitors * * * $50.00 and one-half of one per centum of the gross earnings, receipts, fees or commissions for the preceding license year in excess of $1,000.00. Permit of Director of Public Safety required before license will be issued * * *.'2

Appellant was arrested in Rich ond for having engaged in the business of a solicitor there without previously procuring the required license. After hearing before a police court justice she was fined $25 and costs and ordered to secure a license. An appeal was noted to the Hustings Court of the City of Richmond, where a trial de novo was had upon the agreed statement of facts set forth in the margin.3 The Hustings Court held the ordinance appli- cable to appellant in the circumstances disclosed by the facts and was of the opinion that, so applied, it was not in conflict with the commerce clause. Accordingly the court found the appellant guilty and fined her five dollars and costs. The Supreme Court of Appeals of Virginia affirmed. 183 Va. 689, 33 S.E.2d 206. From that judgment of the state's highest court the case comes here by appeal.

If the matter is to be settled solely on the basis of authority, nothing more is required than bare reference to the long list of drummer decisions, which have held unvaryingly that such a tax as Richmond has exacted cannot be applied constitutionally to situations identical with or substantially similar to the facts of this case. Among the latest of these is Real Silk Hosiery Mills v. Portland, 268 U.S. 325, 45 S.Ct. 525, 69 L.Ed. 982, in which a municipal ordinance requiring solicitors to pay a license fee was held unconstitutional as a forbidden burden upon interstate commerce when applied to an out-of-state corporation whose representatives solicited orders for subsequent interstate shipment. Cf. Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275.

Counsel for Richmond, however, insist that other cases decided here have seriously impaired the 'drummer' line of authority, so much so that those rulings no longer can stand consistently with the later ones. Their principal reliance is on McGoldrick v. Berwind-White Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876, in which the Court sustained the application of New York City's sales tax to the delivery there, at the end of its interstate journey, of coal shipped from ennsylvania pursuant to contracts of sale previously made in New York.4 It is urged that the case is indistinguishable from the present one on any tenable basis relating to the bearing or effect of the tax upon interstate commerce, although the opinion reviewed at some length the drummer cases, among others, and expressly distinguished them.5

Unless therefore this latest pronouncement upon their continuing authority is to be put aside with the cases themselves, the application made of the ordinance in this case must be stricken down. For the tax thus laid is precisely the 'fixedsum license taxes imposed on the business of soliciting orders for the purchase of goods to be shipped interstate' which the Berwind-White opinion distinguished from the New York tax.6

But we are told that the rationale of the decision requires the distinction to be discarded. As counsel state it, this was 'that the tax was imposed upon events which occurred within the taxing jurisdiction which events are separate and distinct from the transportation or intercourse which is interstate commerce.'7 The logic is completed by noting that the New York tax was upon the 'local incident' of 'delivery' while in this case it is on the like incident of 'solicitation'; and by adding the contention, given mere substance since the argument by our decision in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, that 'mere solicitation' when it is regular, continuous and persistent, rather than merely casual, constitutes 'doing business,' contrary to formerly prevailing n tions. Hence it is concluded, since the delivery in the Berwind-White case could be taxed, so can the solicitation in this case.

Appellee's rationalization takes only partial account of the reasoning and policy underlying the Berwind-White decision and its differentiation of the drummer authorities. If the only thing necessary to sustain a state tax bearing upon interstate commerce were to discover some local incident which might be regarded as separate and distinct from 'the transportation or intercourse which is' the commerce itself and then to lay the tax on that incident, all interstate commerce could be subjected to state taxation and without regard to the substantial economic effects of the tax upon the commerce. For the situation is difficult to think of in which some incident of an interstate transaction taking place within a state could not be segregated by an act of mental gymnastics and made the fulcrum of the tax. All interstate commerce takes place within the confines of the states and necessarily involves 'incidents' occurring within each state through which it passes or with which it is connected in fact. And there is no known limit to the human mind's capacity to carve out from what is an entire or integral economic process particular phases or incidents, label them as 'separate and distinct' or 'local,' and thus achieve its desired result.

It has not yet been decided that every state tax bearing upon or affecting commerce becomes valid, if only some conceivably or conveniently separable 'local incident' may be found and made the focus of the tax. This is not to say that the presence of so-called local incidents is irrelevant. On the contrary the absence of any connection in fact between the commerce and the state would be sufficient in itself for striking down the tax on due process grounds alone; and even substantial connections, in an economic sense, have been held inadequate to support the local tax.8 But beyond the presence of a sufficient con- nection in a due process or 'jurisdictional' sense, whether or not a 'local incident' related to or affecting commerce may be made the subject of state taxation depends upon other considerations of constitutional policy having reference to the substantial effects, actual or potential, of the particular tax in suppressing or burdening unduly the commerce.9 Some of these at least were emphasized in the Berwind-White opinion.

Thus the Court, referring to the Shelby County line of decisions, stressed that 'read in their proper historical setting, these cases may be said to support the view that this kind of a tax is likely to be used as 'an instrument of discrimination against interstate or foreign commerce * * *"10 and that the tax 'in its practical operation, was capable of use, through increase in the tax, and in fact operated to some extent to place the merchant thus doing business interstate at a disadvantage in competition with untaxed sales at retail stores within the state.'11 Noting that the state in some instances can suppress or curtail one kind of local business for the advantage of another type of competing business, the opinion denied that interstate commerce 'may be similarly affected by the practical operation of a state taxing statute,' and also denied that the New York tax had any such actual or potential effect.

Thus the essence of the distinction taken in the Berwind-White case was that the taxes outlawed in the drummer cases in their practical operation worked discriminatorily against interstate commerce to impose upon it a burden, either in fact or by the very threat of its incidence, which they did not place upon competing local business and which the New York sales tax did not create.12 See Best & Co. v. Maxwell, 311 U.S. 454, 61 S.Ct. 334, 85 L.Ed. 275; cf. Nelson v. Sears, Roebuck & Co., 312 U.S. 359, 61 S.Ct. 586, 85 L.Ed. 888, 132 A.L.R. 475.

As has been so often stated but nevertheless seems to require constant repetition, not all burdens upon commerce, but only undue or discriminatory ones, are forbidden.13 For, though 'interstate commerce must pay its way,' 14 a state consistently with the commerce clause cannot put a barrier around its borders to bar out trade from other states and thus bring to naught the great constitutional purpose of the fathers in giving to Congress the power 'To regulate Commerce with foreign Nations, and among the several States * * *'.15 Nor may the pro- hibition be accomplished in the guise of taxation which produces the excluding or discriminatory effect.16

Appellee argues, as the Virginia Supreme Court of Appeals held,17 that the Richmond tax is not discriminatory or unduly burdensome in effect. In support of this view it relies mainly on two contentions, first, that the tax is no more discriminatory or burdensome than was the tax in the Berwind-White case; and, second, that it applies alike to all solicitors whether they are...

To continue reading

Request your trial
193 cases
  • State Tax Commission v. John H. Breck, Inc.
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • July 3, 1957
    ...See Memphis Steam Laundry Cleaner, Inc., v. Stone, 342 U.S. 389, 392-393, 72 S.Ct. 424, 96 L.Ed. 436. See also Nippert v. Richmond, 327 U.S. 416, 66 S.Ct. 586, 90 L.Ed. 760. Compare Memphis Natural Gas Co. v. Stone, 335 U.S. 80, 89, 68 S.Ct. 1475, 92 L.Ed. 1832. Compare also American Mfg. C......
  • Sea-Land Services, Inc. v. Municipality of San Juan
    • United States
    • United States District Courts. 1st Circuit. District of Puerto Rico
    • September 18, 1980
    ...industry. See Robbins v. Shelby County Taxing District, 120 U.S. 489, 7 S.Ct. 592, 30 L.Ed. 694 (1887); Nippert v. City of Richmond, 327 U.S. 416, 66 S.Ct. 586, 90 L.Ed. 760 (1946); Alaska v. Arctic Maid, 366 U.S. 199, 81 S.Ct. 929, 6 L.Ed.2d 227 The statute here at stake applies to "every ......
  • Martin Ship Service Co. v. City of Los Angeles
    • United States
    • United States State Supreme Court (California)
    • February 28, 1950
    ...is not enough. There are always convenient local incidents in every interstate operation. Nippert v. City of Richmond, supra, 327 U.S. (416), at page 423, 66 S.Ct. 589, 90 L.Ed. 760, (162 A.L.R. 844). The incident selected should be one that does not lend itself to repeated exactions in oth......
  • Roy Stone Transfer Corp. v. Messner
    • United States
    • United States State Supreme Court of Pennsylvania
    • March 24, 1954
    ...... intrastate or interstate commerce. Section 3 of said Act, 72. P.S. § 3420n-3, provides: ‘ Every corporation. carrying on ... Constitutionality was sustained. Blauner's Inc. v. City of Philadelphia, 330 Pa. 342, 345, 198 A. 889;. National Biscuit Co. v. ... integral economic process', [377 Pa. 247] Nippert v. City of Richmond, supra , 327 U.S. [416], at. page 423, 66 S.Ct. ......
  • Request a trial to view additional results
1 books & journal articles
  • Stare Decisis, Precedent, and the Constitution
    • United States
    • Political Research Quarterly No. 9-1, March 1956
    • March 1, 1956
    ...social and political philosophy of thejudges. In searching for clear examples of the work of common law judges 3 See Nippert v. Richmond, 327 U.S. 416 at 435 (1946); Kotch v. Board of Pilot sioners, 330 U.S. 552 at 558 (1947); and Everson v. Board of Education, 330 U.S. 1 at9 (1947). 4 Burn......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT