336 U.S. 169 (1949), 244, Ott v. Mississippi Valley Barge Line Co.

Docket Nº:No. 244
Citation:336 U.S. 169, 69 S.Ct. 432, 93 L.Ed. 585
Party Name:Ott v. Mississippi Valley Barge Line Co.
Case Date:February 07, 1949
Court:United States Supreme Court
 
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Page 169

336 U.S. 169 (1949)

69 S.Ct. 432, 93 L.Ed. 585

Ott

v.

Mississippi Valley Barge Line Co.

No. 244

United States Supreme Court

Feb. 7, 1949

Argued January 5, 1949

[69 S.Ct. 432] APPEAL FROM THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

1. A state and a city levied ad valorem taxes on foreign corporations operating barge lines in interstate commerce on inland waters. The assessments were based on the ratio between the number of miles of line within the State and the total number of miles of the entire line. The vessels engaged in the service were enrolled at ports outside of the State, and were only within the State for such time as was required to load and unload cargo and to make necessary repairs.

Held: the taxes did not violate either the Due Process Clause of the Fourteenth Amendment or the Commerce Clause of the Federal Constitution. Pp. 170-175.

2. The rule of tax apportionment for rolling stock of railroads in interstate commerce, formulated in Pullman's Car Co. v. Pennsylvania, 141 U.S. 18, is applicable here. Pp. 172-174.

3. So far as due process is concerned, the only question is whether the tax, in practical operation, has relation to opportunities, benefits, or protection conferred or afforded by the taxing State, and those requirements are satisfied if the tax is fairly apportioned to the commerce carried on within the State. P. 174.

Page 170

4. Claims of errors in the amount of the assessment need not here be resolved in the absence of any suggestion that the State affords no administrative or judicial remedy to correct them. P. 175.

166 F.2d 509, reversed.

Appellees instituted suits in the District Court, based on diversity of citizenship, to recover allegedly unconstitutional state taxes which they had paid under protest. The District Court gave judgment for appellees. 68 F.Supp. 30. The Court of Appeals affirmed. 166 F.2d 509. On appeal to this Court, reversed, p. 175.

DOUGLAS, J., lead opinion

MR. JUSTICE DOUGLAS delivered the opinion of the Court.

Appellees are foreign corporations which transport freight in interstate commerce up and down the Mississippi and Ohio Rivers under certificates of public convenience and necessity issued by the Interstate Commerce Commission. Each has an office or agent in Louisiana, but its principal place of business is elsewhere. The barges and towboats which they use in this commerce are enrolled at ports outside Louisiana, but they are not taxed by the states of incorporation.

In the trips to Louisiana, a tugboat brings a line of barges to New Orleans, where the barges are left for unloading and reloading. Then the tugboat picks up loaded barges for return trips to ports outside that state. There is no fixed schedule for movement of the barges. But the turn-arounds are accomplished as quickly as possible,

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with the result that the vessels are within Louisiana [69 S.Ct. 433] for such comparatively short periods of time as are required to discharge and take on cargo and to make necessary and temporary repairs.1 Louisiana and the City of New Orleans levied ad valorem taxes under assessments based on the ratio between the total number of miles of appellees' lines in Louisiana and the total number of miles of the entire line.2 The taxes were paid under protest, and various

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suits, which have been consolidated, were instituted in the District Court by reason of diversity of citizenship for their return, the contention being that the taxes violated the Due Process Clause of the Fourteenth Amendment and the Commerce Clause. The District Court gave judgment for the appellees, holding that the taxes violated the Due Process Clause of the Fourteenth Amendment because the vessels had acquired no tax situs in Louisiana. 68 F.Supp 30. The Court of Appeals affirmed. 166 F.2d 509. Certiorari having been denied, 334 U.S. 859, the case was brought here by appeal. Judicial Code § 240, 28 U.S.C. § 347(b), now § 1254.

It is argued that the rule of tax apportionment for rolling stock of railroads in interstate commerce which was introduced by Pullman's Car Co. v. Pennsylvania, 141 U.S. 18, should be applied here. In that case, a nondomiciliary State was allowed to tax an interstate rail

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carrier by taking as the basis of assessment such proportion of its capital stock as the [69 S.Ct. 434] number of miles of railroad over which its cars ran within the State bore to the total number of miles in all the States.3 The Court of Appeals thought that case and its offspring inapplicable because of our decisions in Hays v. Pacific Mail S.S. Co., 17 How. 596; St. Louis v. Wiggins Ferry Co., 11 Wall. 423; Morgan v. Parham, 16 Wall. 471; Ayer & Lord Tie Co. v. Kentucky, 202 U.S. 409, and Southern Pacific Co. v. Kentucky, 222 U.S. 63. Some of these cases involved vessels which moved on the high seas. Hays v. Pacific Mail S. Co., supra; Morgan v. Parham, supra; Southern Pacific Co. v. Kentucky, supra. Others involved vessels moving in our inland waters, St. Louis v. Wiggins Ferry Co., supra; Ayer & Lord Tie Co. v. Kentucky, supra. In each situation, the Court evolved the rule that the vessels were taxable solely at the domicile of the owner, save where they had acquired an actual situs elsewhere, as they did when they operated wholly on the waters within one State. Old Dominion S.S. Co. v. Virginia, 198 U.S. 299. So far as ships of American ownership and registry sailing the high seas are concerned, it was thought that, if they were not taxable at the domicile, they might not be taxable at all. See Southern Pacific Co. v. Kentucky, supra, at 75. But in neither situation was the element of apportionment involved or considered.

We do not reach the question of taxability of ocean carriage, but confine our decision to transportation on

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inland waters. We see no practical difference so far as either the Due Process Clause or the Commerce Clause is concerned whether it is vessels or railroad cars that are moving in interstate commerce. The problem under the Commerce Clause is to determine "what...

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