AM. TRUCKING ASSOCIATIONS, INC. v. O'NEILL, Civ. No. H-81-267.

• Decision Date: 06 May 1981
• Docket Number: Civ. No. H-81-267.
• Citation: 522 F. Supp. 49
• Parties: AMERICAN TRUCKING ASSOCIATIONS, INC., et al. v. William O'NEILL, et al.
• Court: U.S. District Court — District of Connecticut

522 F. Supp. 49

AMERICAN TRUCKING ASSOCIATIONS, INC., et al. v. William O'NEILL, et al.

Civ. No. H-81-267.

United States District Court, D. Connecticut.

May 1, 1981.

Ruling On Motion For Preliminary Injunction May 6, 1981.

Stephen I. Traub, Dennis Marlowe, Stephen Errante, Lynch, Traub, Keefe & Marlowe, New Haven, Conn., for plaintiffs.

Richard Greenberg, Paul Scimonelli, Asst. Attys. Gen., Carl Ajello, Atty. Gen., State of Connecticut, Hartford, Conn., for defendants.

CLARIE, Chief Judge.

This Court has jurisdiction in this case pursuant to 28 U.S.C. § 1331.

The Court finds that the proposed registration fee increment demanded of the plaintiffs would, if enforced, constitute imminent and irreparable harm to the plaintiffs. Further, there is a basis for genuine doubt in the laws and decisional authority of the State of Connecticut as to the existence of an adequate remedy in law or equity to secure to the plaintiffs and members of the proposed plaintiff class a full refund of any monies paid by them to the defendant Dubno pursuant to this demand under Connecticut Public Act 81-14. It is this inadequacy of remedy which excepts this Court from the strictures of 28 U.S.C. § 1341. There is a substantial likelihood that the effect of Public Act 81-14 renders Connecticut General Statutes § 12-487 unconstitutional as violative of the commerce clause.

THEREFORE, it is hereby ordered, as follows:

1. The defendant Dubno is hereby enjoined and restrained from demanding or accepting payment of any motor carrier registration fees as required by Conn.Gen. Stat. § 12-487, as amended by Public Act 81-14, except, that defendant Dubno may accept and process applications for 1981 motor carrier registration decals from or with respect to motor carrier vehicles not previously registered under Conn.Gen.Stat. § 12-487 for operation in Connecticut during 1981 upon payment of a fee of not more than Five Dollars ($5.00), advising each applicant at or before the time any such decals are issued of their possible liability for additional fees pursuant to Public Act 81-14 and further orders of this Court pertaining thereto.

2. The defendant Dubno is hereby enjoined and restrained from negotiating any instruments of payment of the registration fee called for by Public Act 81-14 and from disbursing or releasing to any person or instrumentality any monies which may already be or may hereafter come into his possession by virtue of payment under that statute, except upon subsequent order and direction of this Court. Defendant Dubno may, at his discretion, return any instruments of payment, or monies already received to the payor of such instruments or monies pending a final determination of these proceedings, or subsequent orders of this Court.

3. The defendant Dubno is hereby enjoined and restrained from sending or distributing any registration decals prepared for distribution pursuant to Public Act 81-14 and signifying payment of the fee required thereby pending a final determination of these proceedings, or subsequent orders of this Court. As provided in Paragraph 1 of this Order, defendant Dubno may issue registration decals to motor carriers whose vehicles, or some of which, have not previously been registered under Conn. Gen.Stat. § 12-487 for operation in Connecticut during 1981.

4. Defendants O'Neill, Dubno, Muzio and Long are hereby enjoined and restrained from undertaking or pursuing any actions to enforce the registration requirements of Conn.Gen.Stat. § 12-487, as amended by Public Act 81-14 pending a final determination of these proceedings or subsequent orders of this Court. This Order shall not be construed to prevent defendants O'Neill, Dubno, Muzio and Long, from enforcing the decal registration provisions of Conn.Gen.Stat. § 12-487, or the penalty provisions of Conn.Gen.Stat. § 12-492 as to any motor carrier vehicle operating within Connecticut without displaying a previously issued 1981 registration decal, or such a decal issued hereafter pursuant to Paragraphs 1 and 3 of this Order.

5. Plaintiffs shall provide security against the wrongful or erroneous entry of this Order by filing forthwith a bond in the amount of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) with the Clerk of this Court for such costs and damages as may be incurred or suffered by the defendants if they are found to have been wrongfully restrained. This Order shall not become effective or be deemed of force and effect until the plaintiffs shall have filed said bond.

A full hearing on the merits of the plaintiffs' request for declaratory relief will be held on June 1, 1981.

Service of the foregoing shall be made on all parties hereto and due return made to the Court.

SO ORDERED.

RULING ON MOTION FOR PRELIMINARY INJUNCTION

The plaintiffs are requesting the Court to grant declaratory and injunctive relief, based upon a proposed finding that the amendment to § 12-487 of the Connecticut General Statutes, Public Act 81-14, is unconstitutional. The defendants assert that such injunctive relief is barred in this case, because the Tax Injunction Act, 28 U.S.C. § 1341, forbids the district courts from enjoining the collection of state taxes unless the state does not provide "a plain, speedy and efficient remedy." This Court issued a finding on May 1, 1981, that Connecticut General Statutes § 12-487 is, in its present form, a tax and not a fee. Nevertheless the Court found that injunctive relief was available here, because the state remedy afforded is speculative and inadequate, there is a risk of irreparable harm to the plaintiffs, and the factual circumstances indicate that the latter are likely to succeed ultimately on the merits. Accordingly a preliminary injunction was ordered, subject to the plaintiffs' posting a Two Hundred Fifty Thousand Dollar bond, to protect the state against any possible loss.

Jurisdiction

The Court has jurisdiction in this case pursuant to 28 U.S.C. §§ 1331, 1332, 1337; 49 U.S.C. § 11503a(c).

Facts

The plaintiff American Trucking Associations, Inc. (ATA) represents some ten thousand motor carrier companies. The ATA, and plaintiff Ryder Truck Lines, Inc. (Ryder), participate in the operation of approximately two hundred and forty-three thousand motor carrier vehicles, all of which are subject to the requirements of the challenged statute, Connecticut General Statutes § 12-487, as amended.

Chapter 222 of the Connecticut General Statutes, titled the Motor Carrier Road Tax, is administered so as to impose an eleven cent per gallon tax on those interstate motor carriers that purchase gasoline or diesel fuel in other states but use it during their driving operations in Connecticut. The successful administration of this tax structure depends upon the annual registration, in Connecticut, of all interstate motor carriers which will operate in the state. Section 12-487 details the registration procedure. All such registered vehicles are required to submit quarterly reports, which detail their mileage in Connecticut and which compute the tax thereupon owed.

On March 27, 1981, Connecticut Public Act 81-14 amended Connecticut General Statute § 12-487 so as to raise the annual registration fee from five dollars to forty dollars per vehicle. This amendment also imposes a retroactive incremental fee of thirty-five dollars on those carriers who had previously registered their vehicles, under the old five dollar fee, for the calendar year 1981. These additional fees were due on or before April 30, 1981.

The plaintiffs seek injunctive and declaratory relief, alleging that Section 12-487, in its present form, violates a number of state and federal statutory provisions. These violations, claim the plaintiffs, lead to the plaintiffs' deprivation of constitutional rights of due process. They also allege several independent violations of constitutional provisions, such as the commerce, supremacy, and privileges and immunities clauses. The Court found, on May 1, 1981, that a preliminary injunction should issue, and an appropriate order was entered.

Discussion of the Law

I. The Application of 28 U.S.C. § 1341

The defendants claim that injunctive relief is not available in this case, due to the Tax Injunction Act, 28 U.S.C. § 1341. That section provides that "the district courts shall not enjoin ... 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." The threshold question is whether Connecticut General Statutes § 12-487, as amended by Connecticut Public Act 81-14, imposes a "tax" or a "fee," for the purposes of 28 U.S.C. § 1341, on interstate motor carriers.

The plaintiffs argue that the original statutory Section 12-487 imposed a fee, and cite four points in support of that position: (1) the purpose of the section was merely to register vehicles; (2) the new act is titled "An Act Concerning The Annual Registration Fee for Vehicles Operated By Motor Carriers"; (3) the proceeds derived from this section were reasonably proportioned to the costs of administration; (4) this statute provided for a means of collecting a tax and so is only incident to the administration of a taxing statute. The defendants respond that Section 12-487 is in fact a tax, because the proceeds are deposited in the general fund, thus marking this section as a revenue-raising device.

The issue thus raised may be decided by reference to certain well-settled principles. Taxes have been defined as "only those levies made to raise revenue for general governmental purposes .... Other courts have defined "tax" more broadly, indicating that the term embraces any extraction of property from a private person by a sovereign for its use ...." Tramel v. Schrader, 505 F.2d 1310, 1314-15 (5th Cir. 1975). See also United States v. Wyoming, 402 F.Supp. 229, 231 (D.Wyo.1975) (a purported "fee" was held to be a tax, largely because it was "designed to raise revenue rather than merely...