First Nat. Bank of Boston v. Attorney General

Citation290 N.E.2d 526,362 Mass. 570
PartiesThe FIRST NATIONAL BANK OF BOSTON et al. v. ATTORNEY GENERAL.
Decision Date09 November 1972
CourtUnited States State Supreme Judicial Court of Massachusetts

Francis H. Fox, Boston, for plaintiffs.

Timothy F. O'Leary, Asst. Atty. Gen., for the Attorney General.

Before TAURO, C.J., and REARDON, QUIRICO, BRAUCHER and KAPLAN, JJ.

On October 13, 1972, the following order was issued by the court:

'WHEREAS this matter is before us on the reservation and report of the single justice; and

'WHEREAS a prompt resolution of the questions presented is required; and

'WHEREAS time does not allow that the opinion in the matter be prepared and filed at this time in view of the exigencies of the situation; and

'WHEREAS said opinion will be filed in the near future;

'NOW, THEREFORE, be it ORDERED that

'General Laws c. 55, § 7, as amended through St.1972, c. 458, is not effective to prohibit the plaintiffs from making the proposed expenditures which are in issue in this case.'

TAURO, Chief Justice (REARDON, Justice, concurring).

The plaintiffs 1 in their bill for declaratory relief allege that they intend to expend moneys, for newspaper advertisements and similar publicity, in an effort to persuade the voters of Massachusetts to defeat the proposed constitutional amendment to be submitted to the voters in a referendum question at the general election on November 7, 1972. 2 The proposed amendment would grant the General Court the authority to enact a graduated income tax. The bill further alleges that under the 1972 amendment to G.L. c. 55, § 7 ('political contributions' statute), they are forbidden to expend moneys for any such purpose. 3 The defendant, the Attorney General of the Commonwealth, has stated that if the plaintiffs expend any such sums he would prosecute them under the said statute. The plaintiffs allege that the statute, in its present amended form, is unconstitutional on its face and as applied to them, and seek a declaration to that effect.

The case is submitted to us on the pleadings and on a statement of agreed facts and we will consider the case on this record as a case stated.

The plaintiffs 4 can be described briefly as follows: The plaintiff banks are engaged in the county of Suffolk in the business of retail, commercial and other forms of banking activities. These include, but are not limited to, maintaining savings and checking accounts for the benefit of both individual and corporate depositors, making loans to individuals and corporations, acting as trustee for the benefit of beneficiaries designated by their customers, acting as transfer agent for certain publicly held corporations and performing other services normally associated with the banking business. John Hancock is a mutual life insurance company engaged principally in life insurance underwriting. Many of its policyholders are residents of Massachusetts. A portion of John Hancock's assets are invested in real estate located within the Commonwealth of Massachusetts. In order to conduct its business John Hancock relies on the services of a group of high level management personnel. John Hancock employs 9,618 persons in Massachusetts. Wyman-Gordon is a business corporation engaged in the business of die forging, utilizing highly sophisticated metal forming techniques. Wyman-Gordon principally serves the aircraft and automotive industries. It has plants in Worcester, Grafton and Millbury, Massachusetts, and employs approximately 2,500 persons in Massachusetts. The plaintiffs believe that because of their far reaching business relationships within Massachusetts, the proposed constitutional amendment, if enacted, would materially affect their business interests.

i. Are Plaintiff Corporations Materially Affected by the Proposed Constitutional Amendment?

Prior to its 1972 amendment, G.L. c. 55, § 7, did not prohibit a corporation from expending or contributing 'any money or other valuable thing for the purpose of . . . affecting the vote on any question submitted to the voters' provided the question materially affected the property, business or assets of the corporation. In Lustwerk v. Lytron, Inc., 344 Mass. 647, 653, 183 N.E.2d 871, we held that a question to be submitted to the voters at a State election, proposing a constitutional amendment granting the Legislature the power to impose a graduated income tax on either corporations or individuals, was a question materially affecting the property, business or assets of a Massachusetts business corporation. Expenditures by such a corporation for the purpose of influencing the voters on that proposed constitutional amendment were not, therefore, prohibited by c. 55, § 7.

The effect of the language of the proposed constitutional amendment in the Lustwerk case, Supra, 5 is very similar to that of the language of the constitutional amendment to be put to the voters on November 7, 1972. 6 The proposed constitutional amendment would authorize the Legislature to impose a graduated tax on individuals and corporations. 7 The plaintiffs contend that the potential power to impose a graduated income tax on corporations and individuals would materially affect their business and property. They maintain that such a power if enacted would discourage executives from settling or remaining in the State, alter the plaintiffs' wage and compensation structures, shrink total bank deposits and cause a great decline in the State's economic climate to the detriment of the plaintiffs' own business. Whether or not all of the plaintiffs' predictions concerning the future effects of the imposition of such taxes are accurate is not decisive. Indeed it may be that the Legislature will never exercise such power even if granted by the people. However, it is reasonable to conclude on the record before us that the proposed amendment, like its predecessor in the Lustwerk case, supra, at 651, 183 N.E.2d 871, materially affects the property, business or assets of the plaintiff corporations and thus the plaintiffs have reasonable justification for believing that the amendment would so affect them.

II. What was the Legislature's Intent in Enacting the 1972 Statutory Amendment to G.L. c. 55, § 7?

The rationale of the Lustwerk decision, supra, would have left the plaintiffs in the instant case free to publicize their views upon the proposed constitutional amendment. On June 20, 1972, however, the Legislature amended c. 55, § 7, by inserting, after the first sentence of § 7, the following sentence: 'No question submitted to the voters concerning the taxation of the income, property or transactions of individuals shall be deemed materially to affect the property, business or assets of the corporation.' 8

On its face, it would appear that the Legislature intended this statutory amendment to apply to any referendum question 'concerning' taxes on individuals, regardless of whether the precise question put to the voters also concerns the taxation of other entities. Since the proposed constitutional amendment is obviously a question 'concerning the taxation of the income . . . of individuals,' this interpretation of the Legislature's intent in my view requires us to reach the constitutional questions raised by the plaintiffs. This conclusion is based on the premise that the 1972 statutory amendment would prevent the plaintiffs from expressing their views to the public about the November 7 referendum question.

However, Justice Quirico suggests in his concurring opinion (joined by Braucher, J. and Kaplan, J.) that the Legislature intended its 1972 statutory amendment to apply only to referendum questions which solely concern the taxation of individuals. This interpretation of legislative intent leaves the plaintiffs free to expend moneys on the referendum question submitted to the voters on November 7 because that question does not solely concern taxes on individuals.

The strongest reason to accept such a construction is the constitutional rule of adjudication which obligates courts in construing legislative enactments 'to take care to interpret them so as to avoid a danger of unconstitutionality.' United States v. Congress of Industrial Organizations, 335 U.S. 106, 120--121, 68S.Ct. 1349, 1356, 92, L.Ed. 1849. The United States Supreme Court has adopted this approach to avoid ruling on the constitutionality of the Federal Corrupt Practices Act. 9 On three separate occasions in the last twenty-five years, the Supreme Court has been asked to decide the constitutionality of that act. On all three occasions, it has avoided reaching the constitutional questions by narrow and sometimes strained statutory construction. United States v. Congress of Industrial Organizations, 335 U.S. 106, 68 S.Ct. 1349, 92 L.Ed. 1849. United States v. International Union United Auto., Aircraft & Agricultural Implement Wkrs. of Am. (UAW-CIO), 352 U.S. 567, 77 S.Ct. 529, 1 L.Ed.2d 563. Pipefitters Local Union No. 562 v. United States, 407 U.S. 385 92 S.Ct. 2247, 33 L.Ed.2d 11. Justice Frankfurter used this doctrine of judicial self-restraint to support the court's decision in United States v. Congress of Industrial Organizations, supra. He relied chiefly on Chief Justice Marshall's observation that "(n)o questions can be brought before a judicial tribunal of greater delicacy than those which involve the constitutionality of a legislative act. If they become indispensably necessary to the case, the court must meet and decide them; but if the case may be determined on other points, a just respect for the legislature requires, that the obligation of its laws should not be unnecessarily and wantonly assailed." Quoted at 335 U.S. 125, at 68 S.Ct. 1359, from Ex parte Randolph, 20 Fed.Cas. page 242, at p. 254, No. 11,558, 2 Brock. 447, 478--479 (C.C.D.V.a.1883).

However, the United States Supreme Court has also acknowledged that the avoidance of constitutional questions is discretionary and should be used only...

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