88 F.Supp. 711 (D.Conn. 1949), Civ. 723, Spector Motor Service, Inc. v. McLaughlin

Docket Nº:Civ. 723
Citation:88 F.Supp. 711
Party Name:Spector Motor Service, Inc. v. McLaughlin
Case Date:October 18, 1949
Court:United States District Courts, 2nd Circuit, District of Connecticut

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88 F.Supp. 711 (D.Conn. 1949)




Civ. No. 723.

United States District Court, D. Connecticut

Oct. 18, 1949

Cyril Coleman, Day, Berry & Howard, Hartford, Conn., for plaintiff.

Frank Flood, Assistant Attorney General, State of Conn., for defendant.

SMITH, District Judge.

This action was brought under the name of Spector Motor Service, Inc., v. McLaughlin by complaint filed March 9, 1942 by plaintiff, an interstate motor truck freight carrier, to enjoin the then State Tax Commissioner of Connecticut from proceeding against the plaintiff under the Connecticut Corporation Business Tax Act, Gen. St. Supp. 1939, Sec. 354e, and for declaratory judgment of non-liability. This Court, by judgment filed December 21, 1942, granted the relief sought, on the theory that the tax, if intended to be applied to a carrier in the position of the plaintiff, was a tax on

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the privilege of doing solely interstate business, prohibited by the Commerce Clause, Article 1, Section 8, of the federal Constitution. This Court, therefore, construed the Tax Act as not intended to apply to one in the position of the plaintiff. 47 F.Supp. 671.

The Circuit Court of Appeals for the Second Circuit reversed by judgment entered January 20, 1944, ordering judgment for the defendant on the merits, holding that the trend of decisions on state tax cases attacked under the Commerce Clause made it apparent that the Supreme Court would uphold such a tax as the instant one applied to the plaintiff, that it was intended to apply to the plaintiff and, as so applied, not in violation of the state or federal Constitutions. The Court stressed the fairness of the method of allocation of the tax to income derived from business originating within the state and concluded that the Supreme Court would look beyond the formal classification of the tax as one upon the privilege of doing an interstate business, and uphold it as a fair charge upon the taxpayer for the state's services to it. Spector Motor Service v. Walsh, 139 F.2d 809.

The Supreme Court granted certiorari, 322 U.S. 720, 64 S.Ct. 1155, 88 L.Ed. 1560, and by mandate dated January 7, 1945, vacated the judgment of the Circuit Court of Appeals and remanded the cause to this Court with directions to retain the bill pending the determination of proceedings to be brought with reasonable promptitude in the state court in conformity with the opinion of the Supreme Court dated December 4, 1944, holding that the federal Courts should defer determination of the constitutionality of the state tax act until the state courts had an opportunity to determine the application and constitutionality of the act as applied to the plaintiff under local law. 323 U.S. 101, 65 S.Ct. 152, 89 L.Ed. 101.

Action for declaratory judgment was brought in the Superior Court for Hartford County by writ and complaint dated December 21, 1944. The Superior Court entered judgment on August 14, 1947, Judge Comley holding that the Act was intended to apply, and does apply, to the plaintiff as a carrier engaged exclusively in interstate commerce, that, as so applied, it is unconstitutional and void as in violation of the Commerce Clause, Article 1, Section 8, of the federal Constitution, that, as applied to the plaintiff, the Act is not unconstitutional and void under the Connecticut Constitution, and that the assessments made by the defendant are not illegal because computed on an improper base. 15 Conn.Supp. 205.

The Supreme Court of Errors, by its decision of July 21, 1948, sustained the judgment except insofar as it held the Act to be violative of the Commerce Clause of the federal Constitution, considering that, in the course of this litigation, the Supreme Court intended that question to be determined by the federal...

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