American Trucking Associations, Inc. v. Gray
| Decision Date | 14 March 1988 |
| Docket Number | No. 85-101,85-101 |
| Citation | 295 Ark. 43,746 S.W.2d 377 |
| Parties | AMERICAN TRUCKING ASSOCIATIONS, INC., et al. Appellants, v. Henry C. GRAY, Director, Arkansas Highway and Transportation Department, et al. Appellees. |
| Court | Arkansas Supreme Court |
Andrew L. Frey, Kenneth S. Geller, Washington, D.C., Daniel R. Barney, Robert Digges, Jr., Alexandria, Va., William S. Busker, Vice President, Legal Affairs ATA, Inc., Peter G. Kumpe, Leon Holmes, Gregory T. Jones, Little Rock, for American Trucking Association, Inc.
Eugene G. Sayre, Jack, Lyon & Jones, P.A., Little Rock, for appellant Leon Cawood d/b/a/ Leon Cawood Trucking.
Thomas B. Keys, Ted Goodloe, Joe Morphew, Steve Clark, Atty. Gen., Little Rock, for appellees.
Jerry C. Jones, B. Michael Bennett, Little Rock, for intervenors O.K. Enterprises, Inc., Peterson Industries, Inc., and Pilgrim's Pride Corp.
Jeffrey W.King, K. Michael O'Connell, Daniel J. Harrold, Collier, Shannon, Rill & Scott, Washington, D.C., Griffin Smith, Griffin Smith, Jr., Smith, Smith, Nixon & Duke, Little Rock, for Owner-Operators Independent Drivers Ass'n of America, Inc., Adaline Munn and Jacqueline Davis in support of their motion to intervene.
The appellants, American Trucking Associations, Inc., et al., (ATA) challenged the constitutionality of Act 685 of 1983, which instituted the Arkansas Highway Use Equalization Tax (HUE Tax), as a violation of the Commerce Clause. The Pulaski County Chancery Court upheld the tax, and we affirmed. American Trucking Associations, Inc. v. Gray, 288 Ark. 488, 707 S.W.2d 759 (1986). While the case was on certiorari, the Supreme Court decided American Trucking Associations, Inc. v. Scheiner, --- U.S. ----, 107 S.Ct. 2829, 97 L.Ed.2d 226 (1987), invalidating a similar Pennsylvania tax. The Supreme Court vacated our judgment in the Gray case and remanded it to us for reconsideration in light of its decision in the Scheiner case, --- U.S. ----, 107 S.Ct. 3252, 97 L.Ed.2d 752. On August 14, 1987, the appellees, Henry C. Gray, Director of the Arkansas Highway and Transportation Department, et al., were ordered by Mr. Justice Blackmun, in his capacity as Circuit Justice, to place HUE tax receipts in an interest-bearing escrow. As directed, we now reconsider our prior decision of the case. In addition to the basic question of the constitutionality of the act, we have been asked by the appellant class represented by ATA to decide whether and to what extent taxes collected pursuant to the act are to be refunded if the act is invalidated. We are also asked to determine whether counsel for ATA are entitled to court ordered attorney fees. We hold that the act is unconstitutional, the taxpayers represented by ATA are entitled to have refunded the taxes they have paid into the escrow fund, and the case is to be remanded to the chancery court to determine the manner of refund distribution and payment of attorney fees.
We need not set out the details of the HUE tax, as that was done in our earlier opinion in this case. Nor do we need to detail the Pennsylvania tax, which was held invalid in the Scheiner case, and the somewhat persuasive arguments about how the HUE tax differs significantly from the Pennsylvania tax. The important point to recognize is that, in the Scheiner case, the Supreme Court applied its "internal consistency" test and said, in effect, that if a state's tax treats truckers whose bases of operations are outside the state differently from those based in the taxing state, it violates the Commerce Clause. It is conceded that the HUE tax effectively costs other truckers more per mile than it costs those based in Arkansas, despite the option, which is available to all, to pay a flat rate or a per-mile rate or a trip rate. Therefore, we have little doubt that the Supreme Court would hold that the HUE tax is unconstitutional, and that is our holding.
The HUE tax promulgated by Act 685 of 1983 was repealed by Act 3 of 1987 (2nd Ex. Sess.). Thus, our decision that the tax was unconstitutional is unimportant except to the extent it may call for refunds. From the time the tax was enacted until Mr. Justice Blackmun's order of August 14, 1987, some $159 million was collected and funneled to the state treasury. After the escrow account was created, some $4.9 million was collected and placed in the account. As the HUE tax was paid by all truckers, it is obvious that some of it was paid by those based in Arkansas. Some Arkansas HUE taxpayers have intervened on behalf of all such taxpayers contending, along with the appellees, that the non-Arkansas based truckers are not entitled to a refund. The Arkansas HUE taxpayers have also made it clear that they seek no refund.
To hold the interstate truckers were entitled to all of their HUE tax payments, we would have to apply the Scheiner decision retroactively. It should only be applied prospectively. The Supreme Court, in Chevron Oil Co. v. Huson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971), stated three factors to be considered in deciding to apply a judgment prospectively: (1) The judgment establishes a new rule of law overruling cases or arises from a case of first impression. (2) The purpose of the law will not be thwarted by prospective application. (3) A general balancing of the equities favors prospective application.
The first factor is aimed at whether it was reasonable for the state to have conducted itself as it did, given prior Supreme Court interpretations of the Commerce Clause. The Scheiner decision notes that several other states besides Arkansas and Pennsylvania had enacted so-called "flat" highway taxes. Justice O'Connor, in her dissenting opinion, noted that these taxes would probably be found violative of the Commerce Clause pursuant to the Scheiner holding. The Scheiner case was decided five justices to four with strong dissenting opinions. It declared invalid a tax which a reasonable person could easily have found to pass Commerce Clause muster upon examination of Aero Mayflower Transit Co v. Bd. of R.R. Comm'rs of Montana, 332 U.S. 495, 68 S.Ct. 167, 92 L.Ed. 99 (1947), and Aero Mayflower Transit Co. v. Georgia Public Serv. Comm'n, 295 U.S. 285, 55 S.Ct. 709, 79 L.Ed. 1439 (1935), in which "flat" highway taxes were held not violative of the...
To continue reading
Request your trial
-
Gilmer v. Walt Disney Co., Civil No. 96-5012.
...results in the recovery of a "common fund" it is proper to allow attorney fees to be paid from the fund." American Trucking Assoc., Inc. v. Gray, 295 Ark. 43, 47, 746 S.W.2d 377 (1988); Powell v. Henry, 267 Ark. 484, 592 S.W.2d 107 (1980). However, there is nothing in the law of Arkansas to......
-
Private Truck Council of America, Inc. v. Oklahoma Tax Com'n
...and remanded 483 U.S. 1014, 107 S.Ct. 3252, 97 L.Ed.2d 752 (1987), rev'd on remand as a violation of the Commerce Clause, 295 Ark. 43, 746 S.W.2d 377 (1988).13 See American Trucking Ass'ns v. Scheiner, 483 U.S. 266, 107 S.Ct. 2829, 97 L.Ed.2d 226 (1987).14 See McCarren-Ferguson Act, 15 U.S.......
-
American Trucking Associations, Inc v. Smith
...after the August order should be refunded. Held: The judgment is affirmed in part and reversed in part, and the case is remanded. 295 Ark. 43, 746 S.W.2d 377, affirmed in part, reversed in part, and remanded. Justice O'CONNOR, joined by THE CHIEF JUSTICE, Justice WHITE, and Justice KENNEDY,......
-
Looney v. Bolt
...it in at least two previous decisions. See, e.g., Pledger v. Bosnick, 306 Ark. 45, 811 S.W.2d 286 (1991); American Trucking Ass'ns, Inc. v. Gray, 295 Ark. 43, 746 S.W.2d 377 (1988). In any event, the notion that "an overruled case is to be treated as if it never was the law" is clearly outm......
-
Retroactive Adjudication.
...flat taxes). (244.) 483 U.S. 266 (1987). (245.) Am. Trucking Ass'ns v. Gray, 483 U.S. 1014 (1987). (246.) Am. Trucking Ass'ns v. Gray, 746 S.W. 2d 377, 379 (Ark. 1988) (ordering restitution only back to the date of Justice Blackmun's escrow order on August 14, 1987). (247.) Justice Scalia j......