Great Northern Ry Co v. State of Minnesota

• Decision Date: 18 February 1929
• Docket Number: 107,Nos. 106,s. 106
• Citation: 278 U.S. 503,49 S.Ct. 191,73 L.Ed. 477
• Parties: GREAT NORTHERN RY. CO. v. STATE OF MINNESOTA (two cases)
• Court: U.S. Supreme Court

278 U.S. 503

49 S.Ct. 191

73 L.Ed. 477

GREAT NORTHERN RY. CO.

v STATE OF MINNESOTA (two cases).

Nos. 106, 107.

Argued Jan. 9, 1929.

Decided Feb. 18, 1929.

Messrs. F. G. Dorety and Thomas Balmer, both of St. Paul, Minn., for plaintiff in error and appellant.

[Argument of Counsel from pages 504-505 intentionally omitted] G. A. Youngquist, Atty. Gen., of Minnesota, for State of Minnesota.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

This case is here both by writ of error and appeals. Appeal being the proper method, the writ of error (No. 106) will be dismissed.

The action was brought by the state to recover taxes for the years 1901 to 1912, inclusive. Judgment against the company was rendered by the trial court for the years 1903 to 1912, no recovery being allowed for 1901 or 1902. Upon appeal the state Supreme Court affirmed the judgment. 160 Minn. 515, 200 N. W. 834. A writ of error from this court was dismissed for want of jurisdiction, resulting from an insufficient setting forth and waiver of claim of a substantial federal constitutional question. 273 U.S. 658, 47 S. Ct. 343, 71 L. Ed. 826. Thereafter the state Supreme Court vacated its judgment, granted a reargument upon the constitutional question, and again affirmed the trial court. 174 Minn. 3, 218 N. W. 167. The present appeal is from the judgment of the court below last described.

In Minnesota, by statute amended from time to time, but substantially in effect since 1871 (see 1 Mason's Minnesota Statutes 1927, §§ 2246, 2247), a tax, measured by gross earnings, is laid upon all railway companies, in lieu of all taxes upon all of their property within the state. As a basis for computing the tax, each railway company is required to report annually its gross earnings upon business done upon its lines wholly within the state and upon interstate business in the proportion which the mileage within the state bears to the entire mileage of the reilway over which such interstate business is done. The tax thus levied is a property tax based on the gross earnings fairly attributable to the property of the railway company within the state. The state Supreme Court has so held. And to the same effect see Cudahy Packing Co. v. Minnesota, 246 U. S. 450, 452, 38 S. Ct. 373, 62 L. Ed. 827.

The attack upon the statute is not that it is bad upon its face, but that, as applied to the specific facts upon which the liability of the company in the present action was sustained, it imposes a tax in respect of earnings wholly referable to certain docks in Wisconsin and a short stretch of track immediately connected therewith, and therefore results in laying a tax upon property outside the state of Minnesota. The contention is that the statute as thus construed and applied constitutes a burden upon interstate commerce, and also violates the due process of law and equal protection of the laws clauses of the Fourteenth Amendment. The facts follow.

Among the lines owned and operated by the railway company, directly or through its subsidiaries, amounting in all to more than 2,000 miles within the state, is a road 107 miles in length, running from the Mesaba Iron Range in Minnesota to, and including as part thereof, the Wisconsin docks. Eighty-seven miles of the road are in Minnesota, and 20 miles, including the docks, are in Wisconsin. The principal business of the road in that of hauling ore from the mines at Mesaba to the docks. For this service the tariff provides a single charge per ton of ore transported, in which the dock service is absorbed without being separately specified. For the years in question, the railway company, in reporting the gross earnings assignable to the Minnesota part of the line as proportioned to the foregoing division of the mileage, first allocated to...