Age Intern., Inc. v. Miller

Decision Date25 August 1993
Docket NumberCiv. No. 1:92-cv-1662-ODE.
PartiesAGE INTERNATIONAL, INC.; Austin, Nichols & Co., Incorporated; Bacardi Imports Inc.; The Black Prince Distillery, Inc.; Brown-Forman Corporation; Carillon Importers Ltd.; Charles Jacquin Et Cie., Inc.; David Sherman Corporation; E. & J. Gallo Winery; The Fleischmann Distilling Company, a Division of Fourth Colchester, Inc.; Fourth Colchester, Inc.; Heaven Hill Distilleries, Inc.; Heublein, Inc.; Hiram Walker & Sons, Inc.; Jim Beam Brands Co.; Joseph E. Seagram & Sons, Inc.; The Paddington Corporation; Remy Amerique, Inc.; Sazerac Company, Inc.; Schieffelin & Somerset Co.; Sidney Frank Importing Company, Inc.; Southern Wine & Spirits of America, Inc., d/b/a Shaw Ross International Importers; William Grant & Sons, Inc. v. Zell MILLER, Individually and as Governor of the State of Georgia; Marcus E. Collins, individually and as Georgia State Revenue Commissioner; and Claude L. Vickers, individually and as Deputy Commissioner of the Administration Division of the Department of Administrative Services and as Director of the Fiscal Division of the Department of Administrative Services and as State Treasurer for the State of Georgia.
CourtU.S. District Court — Northern District of Georgia

COPYRIGHT MATERIAL OMITTED

Celeste McCollough, John L. Taylor, Jr., Vincent Chorey Taylor & Feil, Atlanta, GA, for plaintiffs.

David A. Runnion, Office of State Atty. Gen., Bruce McCord Edenfield, Hicks Maloof & Campbell, Atlanta, GA, for defendants.

ORDER

ORINDA D. EVANS, District Judge.

This civil action challenging Georgia's alcohol tax statutes is before the court on its own motion for a determination of subject-matter jurisdiction. The issue is whether the court lacks jurisdiction to grant injunctive and declaratory relief by virtue of the Tax Injunction Act, 28 U.S.C. § 1341, which provides:

The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.

Defendants urge that there are a number of "plain, speedy and efficient remedies" available in the courts of Georgia, and that therefore this court has no jurisdiction to grant the relief requested by Plaintiffs.

An evidentiary hearing was held on July 8-9, 1993.1 After considering the evidence and the arguments of counsel, the court makes the following findings of fact and conclusions of law.

Plaintiffs are numerous distillers and manufacturers of alcoholic beverages which are manufactured and bottled outside the state of Georgia. As importers of alcoholic beverages, Plaintiffs are subject to the taxation scheme contained in O.C.G.A. § 3-4-60, which taxes imported alcoholic beverages at twice the rate as alcoholic beverages manufactured within the state of Georgia. In this action, Plaintiffs seek a declaration that § 3-4-60 is unconstitutional under the Commerce Clause and other provisions of the United States Constitution. They also seek an injunction to prevent future collection of the double tax.

Defendants are Zell Miller, the Governor of Georgia; Marcus E. Collins, the Georgia State Revenue Commissioner; and Claude L. Vickers, who holds three titles: Deputy Commissioner of the Administration Division of the Department of Administrative Services, Director of the Fiscal Division of the Department of Administrative Services, and State Treasurer for the State of Georgia.

I. FACTUAL AND LEGAL BACKGROUND
A. The History of Alcohol Taxation in Georgia

The Twenty-First Amendment to the United States was proposed and ratified in 1933. That amendment repealed the Prohibition Amendment, and granted each state certain authority over the importation of "intoxicating liquors" into the state. U.S. Const. amend. XXI, §§ 1, 2. The extent of a state's authority to regulate and tax the importation of alcoholic beverages has remained disputed since the ratification of the amendment; however, it is now clear that the amendment did not effect a pro tanto repeal of the Commerce Clause, and that the concerns of other constitutional provisions must be weighed against the concerns of the Twenty-First Amendment. Bacchus Imports, Ltd. v. Dias, 468 U.S. 263, 275, 104 S.Ct. 3049, 3057, 82 L.Ed.2d 200 (1984); Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324, 331-32, 84 S.Ct. 1293, 1297-98, 12 L.Ed.2d 350 (1964).

In response to the ratification of the Twenty-First Amendment, the state of Georgia enacted regulatory laws and a taxation scheme relating to the importation and sale of alcoholic beverages. The taxation system imposed a higher tax on alcoholic beverages imported into the state than on beverages manufactured within the state. See Ga.L. 1937-38, Ex.Sess., p. 103, §§ 11, 12 (later codified as O.C.G.A. § 3-4-60). In fact, the tax on imported beverages was exactly twice the tax on beverages manufactured within the state.

The regulatory system currently in place in Georgia is based on a "three-tier" structure. Under this structure, manufacturers (such as Plaintiffs) distill or brew and then package alcoholic beverages. The manufacturer (whether within or outside Georgia) ships the packaged beverage to an in-state wholesaler. That wholesaler then distributes the beverages to retail dealers who sell the beverages directly to consumers, either in unbroken packages or for consumption on the premises. See generally, O.C.G.A. § 3-1-2. The state maintains strict segregation between the different tiers; in most cases, a single company may not be both a manufacturer and a wholesaler. (See Affidavit of Herman Oliver, Plaintiffs' Exh. BBB ¶ 4; see also Transcript at 85).

During the 1937-38 extra legislative session, the Georgia legislature also enacted a general refund statute. See 1937-38 Ga.L., Ex.Sess., p. 77, §§ 34 (later codified as O.C.G.A. § 48-2-35). The refund statute provided (and still provides) as follows:

(a) A taxpayer shall be refunded any and all taxes or fees which are determined to have been erroneously or illegally assessed and collected from him under the laws of this state, whether paid voluntarily or involuntarily, and shall be refunded interest....

The procedure requires that the taxpayer file a claim with the Revenue Commissioner within three years of payment of the taxes. O.C.G.A. § 48-2-35(b). If the Commissioner denies the claim, or fails to render a decision within a year, the taxpayer may file an action for a refund in the superior court of the taxpayer's county of residence. O.C.G.A. § 48-2-35(b)(4). However, as explained in more detail below, this refund statute was amended in 1992 to make it inapplicable to alcoholic beverage taxes. See 1992 Ga.L., p. 1458, § 4 (now codified as O.C.G.A. § 48-2-35(d) (1993 supp.)).

B. The Impact of Bacchus

In 1984, the United States Supreme Court issued its decision in Bacchus Imports, Inc. v. Dias, 468 U.S. 263, 104 S.Ct. 3049, 82 L.Ed.2d 200 (1984). In that case, the Court struck down Hawaii's alcohol taxation statute on Commerce Clause grounds. Although not a radical departure from prior law, Bacchus made clear that pure economic protectionism is not a valid state purpose entitled to deference under the Twenty-First Amendment. Id. at 276, 104 S.Ct. at 3057. The Hawaii statute held unconstitutional was similar to the Georgia statute enacted in 1938.

In 1985, the Georgia General Assembly engaged in some legislative acrobatics to retain the essential structure of the taxation system, yet insulate it from the Commerce Clause jurisprudence crystallized in Bacchus. On March 31, 1985, the Assembly approved an act which equalized the excise tax on imported and domestic alcoholic beverages. However, the equalized tax had no time to become effective, because the next day the Assembly passed another act, the current version of O.C.G.A. § 3-4-60. This statute reimposed the differential tax on imported alcoholic beverages, although it is phrased slightly differently from the pre-1985 statute:

The following taxes are levied and imposed:
(1) There shall be imposed upon the first sale, use, or final delivery within this state of all distilled spirits an excise tax in the amount of 50¢ per liter and, upon the first sale, use, or final delivery within this state of all alcohol, an excise tax in the amount of 70¢ per liter, and a proportionate tax at the same rate on all fractional parts of a liter;
(2) There shall be imposed upon the importation for use, consumption, or final delivery into this state of all distilled spirits an import tax in the amount of 50¢ per liter and, upon the importation for use, consumption, or final delivery within this state of all alcohol, an import tax in the amount of 70¢ per liter, and a proportionate tax at the same rate on all fractional parts of a liter; and (3) All alcohol spirits manufactured within this state for sale within this state shall be made from Georgia grown products.

O.C.G.A. § 3-4-60. The April 1, 1985 Act contained a non-severability clause which provided that the March 31, 1985 version would be reinstated should the later version ever be held invalid or unconstitutional. The bill enacted on April 1, 1985, also contained a new preamble.2

In addition to the general refund procedure, alcoholic beverage taxpayers could seek a refund or credit under a more specific procedure contained in the alcoholic beverage code. This procedure, codified as O.C.G.A. § 3-2-13, was enacted in 1980. It provided that the commissioner "may issue refunds or credits for taxes" paid by wholesalers or manufacturers, in certain circumstances. Refunds and credits were authorized primarily in cases where the stamps or the stamped goods were lost, damaged, destroyed, or not actually shipped into Georgia.

C. The "Heublein I" Case

Shortly after the 1985 statute was enacted, Heublein, Inc. (a Plaintiff in the instant case) filed a complaint challenging its constitutionality. (See Plaintiffs' Exh. M)....

To continue reading

Request your trial
3 cases
  • Johnsen v. Collins
    • United States
    • U.S. District Court — Southern District of Georgia
    • 22 d2 Novembro d2 1994
    ...Flint River Mills v. Henry, 234 Ga. 385, 386-87, 216 S.E.2d 895 (1975). The Northern District of Georgia, in Age Int'l, Inc. v. Miller, 830 F.Supp. 1484, 1499 (N.D.Ga.1993), aff'd, 37 F.3d 637 (11th Cir. 1994), found superior court review of agency decisions on constitutional grounds too "u......
  • Johnson v. Georgia Dept. of Revenue, 1:96-cv-1224-CAM.
    • United States
    • U.S. District Court — Northern District of Georgia
    • 12 d3 Novembro d3 1997
    ...that plaintiff could not seek adequate remedy from the courts of the State of Georgia. The court in AGE International, Inc. v. Miller, 830 F.Supp. 1484, 1500 (N.D.Ga.1993), noted that "numerous cases ... indicate that the Georgia courts will entertain an action for declaratory or injunctive......
  • Age Intern., Inc. v. Miller
    • United States
    • U.S. Court of Appeals — Eleventh Circuit
    • 28 d3 Setembro d3 1994
    ...Age International, Inc. v. Miller ** NO. 93-9328 United States Court of Appeals, Eleventh Circuit. Sept 28, 1994 Appeal From: N.D.Ga., 830 F.Supp. 1484 ** Local Rule 36 case. ...

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