American Trucking Associations, Inc. v. Goldstein

• Decision Date: 01 September 1987
• Docket Number: No. 162,162
• Citation: 541 A.2d 955,312 Md. 583
• Parties: AMERICAN TRUCKING ASSOCIATIONS, INC. et al. v. Louis L. GOLDSTEIN, et al. ,
• Court: Maryland Court of Appeals

Page 583

312 Md. 583

541 A.2d 955

AMERICAN TRUCKING ASSOCIATIONS, INC. et al. v. Louis L. GOLDSTEIN, et al.

No. 162, Sept. Term, 1987.

Court of Appeals of Maryland.

May 31, 1988.

Andrew L. Frey, argued (Kenneth S. Geller, Mark I. Levy, Douglas K. Mayer and Mayer, Brown & Platt, Washington, D.C., C. Christopher Brown and Brown & Goldstein, Baltimore, Daniel R. Barney and Robert Digges, Jr., Alexandria, Va., William S. Busker, Washington, D.C., on brief), for appellants.

Ralph S. Tyler, Asst. Atty. Gen., argued (J. Joseph Curran, Jr., Atty. Gen., Andrew H. Baida, Gerald Langbaum, John K. Anderson, Ben C. Clyburn, Asst. Attys. Gen., Baltimore, on brief), H. Christopher Malone, Sr. Asst. County Atty., argued (Clyde H. Sorrell, County Atty., David J. Frankel, Asst. County Atty., Rockville, on brief), for appellees.

Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL, JJ.

ELDRIDGE, Judge.

We must decide whether, under the circumstances of this case, the circuit court erred in refusing to enjoin the enforcement of a Maryland tax statute that, according to both the circuit court and the State, violates the Commerce Clause of the United States Constitution, Art. I, § 8, cl. 3.

I.

The pertinent facts are as follows. Under Maryland's Road Tax on Motor Carriers Act, Code (1957, 1980 Repl. Vol., 1987 Cum.Supp.), Art. 81, §§ 412-429, all motor carriers ¹ operating commercial motor vehicles ² in Maryland must pay certain taxes and fees to support the State's highway system. One provision of the Act, § 423(a), requires that, for fuel tax reporting purposes, motor carriers must register their vehicles on an annual basis with the State Comptroller. For each vehicle thus registered, carriers obtain an "identification marker," which must be displayed on the vehicle in accordance with the Comptroller's regulations. Carriers must purchase a marker for each motor vehicle which they wish to operate in Maryland between January 1 and December 31 of any given year. As a result, the vast majority of markers are purchased in the several months preceding the beginning of the new year; however, carriers might also have to obtain markers during the course of the calendar year if, for example, they purchase new motor vehicles or begin operating in Maryland for the first time.

The annual fee for an identification marker is $25.00 per vehicle. ³ This flat fee applies to all vehicles using Maryland roads. Thus, § 423(a) takes no account of the actual mileage that any particular vehicle travels in the State. ⁴

The plaintiff American Trucking Associations, Inc. (A.T.A.), is a national organization of motor carriers. Along with two individual trucking companies, A.T.A. was certified by the circuit court as the class representative of "all non-Maryland interstate motor carriers" that are subject to the marker tax established by § 423(a). On behalf of this class, A.T.A. maintains that, as applied to such carriers, § 423(a) violates the Commerce Clause.

The original defendants in this case are the state officials who are charged with the duty of collecting and administering the marker tax. In addition, because of their interest in receiving a percentage of the fees generated by § 423(a), 17 counties and Baltimore City have intervened as parties defendant. ⁵

In 1984, in an action substantially identical to the instant case, this Court rejected A.T.A.'s argument that § 423(a) unconstitutionally discriminates against interstate commerce. American Trucking Ass'ns v. Goldstein, 301 Md 372, 483 A.2d 47 (1984) (Goldstein I ). In reaching that decision, we reasoned that § 423(a) applies equally to all carriers, regardless of whether their vehicles are registered in Maryland or elsewhere and regardless of whether they are engaged in interstate or intrastate commerce, Goldstein I, supra, 301 Md. at 386, 483 A.2d at 54. Moreover, we remarked (ibid.): "The purpose of § 423(a) is not to protect local carriers against foreign competition; the purpose is to spread evenly among all commercial users the tax burden of supporting Maryland's highway system." A.T.A. had argued that § 423(a)'s "practical effect" is to discriminate against interstate carriers, who might tend to travel fewer miles in Maryland and thus pay a higher per-mile price for an identification marker than would intrastate carriers. In declining to accept this argument, we relied on a line of Supreme Court cases holding that flat taxes similar to § 423(a) do not violate the Commerce Clause. See Capitol Greyhound Lines v. Brice, 339 U.S. 542, 70 S.Ct. 806, 94 L.Ed. 1053 (1950); Aero Mayflower Transit Co. v. Board of Railroad Comm'rs, 332 U.S. 495, 68 S.Ct. 167, 92 L.Ed. 99 (1947); Aero Mayflower Transit Co. v. Georgia Public Service Comm'n, 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439 (1935).

On June 23, 1987, however, the Supreme Court overruled the above-cited flat tax cases and held that a Pennsylvania marker tax, which was somewhat similar to § 423(a), unconstitutionally discriminated against interstate commerce. American Trucking Ass'ns, Inc. v. Scheiner, 483 U.S. ----, 107 S.Ct. 2829, 97 L.Ed.2d 226 (1987).

In light of the Supreme Court's Scheiner decision, A.T.A. filed this action in the Circuit Court for Baltimore City on July 1, 1987. A.T.A. sought a declaration that § 423(a) is unconstitutional, an injunction against future exaction of the marker fee, and refunds for identification markers purchased both before and after the date of Scheiner. A.T.A. has since relinquished any claim for fees paid before the date of Scheiner.

The defendants conceded that § 423(a) is unconstitutional. Nonetheless, they pointed out to the circuit court that, in reliance on Goldstein I, the State had calculated its budget for fiscal year 1988 with the expectation of receiving $12,000,000 in marker fees. Consequently, they argued that, in order to avoid imposing substantial hardships on the State and its political subdivisions, the circuit court should not enjoin enforcement of § 423(a) until the beginning of fiscal year 1989.

On October 22, 1987, the court declared § 423(a) unconstitutional. In addition, however, the court accepted the defendants' claims of detrimental reliance on prior law. Consequently, the court permitted the defendants to continue collecting the marker tax through June 30, 1988, which was the last day of the fiscal year 1988.

As a result of the circuit court's decision, the defendants have been able to impose the $25.00 flat fee for all markers that were purchased for calendar year 1987, even if the tax was not paid until after Scheiner, and for the vast majority of identification markers that were purchased for calendar year 1988.

A.T.A. appealed to the Court of Special Appeals, and, before further proceedings in that court, both parties petitioned this Court for a writ of certiorari. Because of the important issue presented, we granted the parties' petitions.

II.

As previously indicated, the defendants do not dispute that, in light of Scheiner, § 423(a) unconstitutionally discriminates against interstate commerce. This Court, however, would not hold a statute unconstitutional simply on the basis of a litigant's concession. Nevertheless, under the Scheiner majority's analysis of flat-rate highway taxes, it would seem clear that § 423(a) is inconsistent with the Commerce Clause. Although paying the marker tax affords both interstate and intrastate carriers the same privilege of operating to an unlimited extent on Maryland's highways, the Scheiner Court viewed this privilege as "several times more valuable to" intrastate carriers than to interstate carriers. 107 S.Ct. at 2847. Moreover, the Supreme Court made it clear that the $25 "unapportioned" marker fee is invalid (ibid.), and the Court overruled ( id. at 2845-2847) the flat tax cases upon which Goldstein I had relied. See also Scheiner, supra, 107 S.Ct. at 2841 n. 17. ⁶ Therefore, as recognized by the defendant state officials, Scheiner had the effect of invalidating § 423(a).

As previously pointed out, A.T.A. has abandoned any refund claim for marker fees paid before the date of the Scheiner decision. Furthermore, the defendants agree that, if the circuit court erred in refusing to grant an immediate injunction against enforcement of § 423(a), the plaintiffs are entitled to refunds for all marker fees collected after the date of the Scheiner decision. Consequently, this case turns on the question of whether the circuit court acted correctly in delaying the effective date of its decision that § 423(a) was unconstitutional.

III.

In support of the circuit court's action, the defendants assert that A.T.A. seeks retroactive application of Scheiner and that the circuit court correctly applied the applicable legal standards in concluding that Scheiner should receive only prospective effect. In our opinion, however, the defendants' argument evidences a fundamental misunderstanding of the principles governing the prospective or retrospective effect of judicial decisions.

In the overwhelming majority of cases, a judicial decision sets forth and applies the rule of law that existed both before and after the date of the decision. In this usual situation, "where a decision has applied settled precedent to new and different factual situations, the decision always applies retroactively." Potts v. State, 300 Md. 567, 577, 479 A.2d 1335 (1984). Thus, in the ordinary case, no issue of a "prospective only" application arises. See, e.g., Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 496, 88 S.Ct. 2224, 2233, 20 L.Ed.2d 1231 (1968); Houghton v. County Com'rs of Kent Co., 307 Md. 216, 220-221, 513 A.2d 291 (1986), and cases there cited.

When, however, a court overrules a prior interpretation of a constitutional or statutory provision, and renders a new interpretation of the provision, the question arises as to whether the new ruling is to operate retroactively or...