559 P.2d 997 (Wash. 1977), 44140, Association of Washington Stevedoring Companies v. State Dept. of Revenue
|Citation:||559 P.2d 997, 88 Wn.2d 315|
|Party Name:||ASSOCIATION OF WASHINGTON STEVEDORING COMPANIES and Washington Public Ports Association, Respondent, v. STATE of Washington, DEPARTMENT OF REVENUE, Appellant.|
|Attorney:||Slade Gorton, Atty. Gen., Richard D. Hicks, Olympia, for appellant., Bogle & Gates, John T. Piper, Seattle, for respondent.|
|Judge Panel:||WRIGHT, C.J., STAFFORD, ROSELLINI, HAMILTON and BRACHTENBACH, JJ., and WIEHL, J. Pro Tem., concur.|
|Case Date:||February 03, 1977|
|Court:||Supreme Court of Washington|
HUNTER, Associate Justice. [88 Wn.2d 316]
The State appeals from a declaratory judgment of the Superior Court for Thurston County, declaring a state tax repugnant to the United States Constitution. This court has taken jurisdiction as the proper forum for disposition of such issue, pursuant to RCW 2.06.030(c) and ROA I--14(1)(c).
The trial court held that WAC 458--20--193D, as amended in 1974 to apply the State's general business and occupation tax to stevedoring activity, contravenes the Interstate Commerce Clause (U.S.Const. art. 1, § 8, Cl. 3) and the Import-Export Clause (U.S.Const. art. 1, § 10, Cl. 2). The trial court was adhering to two United States Supreme Court decisions, one of them having been brought up from this jurisdiction, on the precise issue raised in this appeal. We find the two cases to be indistinguishable, factually, from the instant case; hence, we also adhere to them, and affirm the trial court.
The first case the Supreme Court decided on the issue was Puget Sound Stevedoring Co. v. Tax Commission, 302 U.S. 90, 58 S.Ct. 72, 82 L.Ed. 68 (1937). Our court had upheld a state tax on the loading and unloading of ships plying interstate and foreign commerce. That decision was appealed to the United States Supreme Court, which reversed, holding that the business of loading and unloading ships Is interstate commerce and is therefore not taxable by the state. We quote language from Puget Sound Stevedoring Co. v. Tax Commission, supra at 93, 58 S.Ct. at 74 to show the court's reasoning:
'(S)tevedoring services are essential to waterborne commerce and always commence in the hold of the vessel and end at the 'first place of rest', and vice versa.' . . . The movement is continuous, is covered by a single contract, and is necessary in all its stages if transportation is to be accomplished without unreasonable impediments.
Almost 10 years later the City of New York attempted to impose the same type of
tax on identical stevedoring activity. The New York Supreme Court struck the tax down on authority of Puget Sound, supra. The Court of Appeals [88 Wn.2d 317] then affirmed, and certiorari was granted by the United States Supreme Court, which also affirmed. Joseph v. Carter & Weekes Co., 330 U.S. 442, 67 S.Ct. 815, 91 L.Ed. 993 (1947), thus became the second of what we refer to, for the sake of convenience, as the 'stevedoring cases.'
The petitioners in Joseph v. Carter & Weekes Co., supra at 425--26, 67 S.Ct. at 817, presented the Supreme Court with the same argument that is now presented by appellant to this court, quoting as follows:
Petitioners recognize the force of the Puget Sound case as a precedent. Their argument is that subsequent holdings of this Court have indicated that the reasons which underlay the decision are no longer controlling in judicial examination of the constitutionality of state taxation of the gross proceeds derived from commerce, subject to federal regulation. They cite, among others, these later decisions: Western Live Stock v. Bureau of Revenue, 303 U.S. 250, 58 S.Ct. 546, 82 L.Ed. 823, 115 A.L.R. 944; Southern Pacific Co. v. Gallagher, 306 U.S. 167, 59 S.Ct. 389, 83 L.Ed. 586; McGoldrick v. Berwind-White Coal Mining Co., 309 U.S. 33, 60 S.Ct. 388, 84 L.Ed. 565, 128 A.L.R. 876; Department of Treasury v. Wood Preserving Corporation, 313 U.S. 62, 61 S.Ct. 885, 85 L.Ed. 1188.
The Court then analyzed the cases, stating as follows:
Upon examination this history gives an impression that there has been a doubt as to the continued vitality of Puget Sound. We come now face to face with the problem of voerruling or approving the case.
Joseph v. Carter & Weekes Co., supra at 430, 67 S.Ct. at 820.
Puget Sound was reaffirmed. The cases cited by petitioners were distinguished on the reasoning that stevedoring is essentially a part of the commerce itself, more a part of commerce than any of the activities held validly taxed in the later cases. The Court stated:
Though all of these cases were closely related to transportation in commerce both in time and movement, it will be noted that in each there can be distinguished a definite separation between the taxable event and the commerce itself.
Joseph v. Carter & Weekes Co., supra at 433, 67 S.Ct. at 821. [88 Wn.2d 318]
The United States Supreme Court obviously views stevedoring as an integrated inseparable part of commerce by sea, and hence absolutely protected.
The appellant in the cause Before us makes the argument that subsequent decisions of the United States Supreme Court have either impliedly overruled the stevedoring cases or eroded the principles upon which the result in those cases was reached. As authority for this argument, appellant cites some of the same cases presented by petitioners in Carter & Weekes, in support of the same theory. Appellant also cites more recent Supreme Court commerce clause decisions, including Central Greyhound Lines, Inc. v. Mealey, 334 U.S. 653, 68 S.Ct. 1260, 92 L.Ed. 1633 (1948); Interstate Oil Pipeline v. Stone, 337 U.S. 662, 69 S.Ct. 1264, 93 L.Ed. 1613 (1949); Canton R.R. v. Rogan, 340 U.S. 511, 71 S.Ct. 447, 95 L.Ed. 488 (1951); Colonial Pipeline Co. v. Traigle, 421 U.S. 100, 95 S.Ct. 1538, 44 L.Ed.2d 1 (1975). A very recent import-export clause case is also cited, Michelin Tire Corp. v. Wages, 423 U.S. 276, 96 S.Ct. 535, 46 L.Ed.2d 495 (1976).
We have examined carefully each of the cases cited by appellant, and others not cited. (Spector Motor Service, Inc. v. O'Connor, 340 U.S. 602, 71 S.Ct. 508, 95 L.Ed. 573 (1951), and Michigan-Wisconsin Pipeline Co. v. Calvert, 347 U.S. 157, 74 S.Ct. 396, 98 L.Ed. 583 (1954).) We are of the opinion that the United States Supreme Court has not overruled its stevedoring decisions by implication, nor has there been any clear indication that the court would welcome the opportunity to do so.
We are therefore persuaded that we must hold the tax invalid; we do so in recognition
of our duty to abide by controlling United States Supreme Court decisions construing the federal constitution. Hence, we find it unnecessary to discuss the aforementioned cases beyond the fact that nowhere in them do we find language criticizing, expressly contradicting, or overruling (even impliedly) the stevedoring cases. [88 Wn.2d 319]
We have been constrained Before by controlling United States Supreme Court decisions in this area. See B. F. Goodrich v. State, 38 Wash.2d 663, 231 P.2d 325, Cert. denied, 342 U.S. 876, 72 S.Ct. 167, 96 L.Ed. 659 (1951), where essentially the same arguments were raised as are raised in...
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