Interstate Busses Corporation v. Blodgett

• Decision Date: 04 January 1927
• Docket Number: No. 1862.,1862.
• Citation: 19 F.2d 256
• Parties: INTERSTATE BUSSES CORPORATION v. BLODGETT, State Tax Com'r of Connecticut, et al.
• Court: U.S. District Court — District of Connecticut

19 F.2d 256 (1927)

INTERSTATE BUSSES CORPORATION v. BLODGETT, State Tax Com'r of Connecticut, et al.

No. 1862.

District Court, D. Connecticut.

January 4, 1927.

Before MANTON, Circuit Judge, and THOMAS and CAMPBELL, District Judges, holding court pursuant to section 266 of the Judicial Code (Comp. St. § 1243).

Edward H. Kelly, of Hartford, Conn., for plaintiff.

Frank E. Healy, Atty. Gen., for the State of Connecticut.

Stoddard, Goodhart, Wetzler & Persky, of New Haven, Conn. (S. F. Wetzler, of New Haven, Conn., of counsel), for defendants.

MANTON, Circuit Judge.

The complainant is a corporation organized under the laws of the state of Connecticut, with its principal place of business in that state. It is engaged in interstate commerce in the transportation of passengers for hire between Connecticut and cities in Massachusetts and Rhode Island. The defendants are public officers of the state of Connecticut, and perform duties pursuant to section 1245 of the General Statutes of Connecticut.

In June, 1925, an act was passed by the Connecticut Legislature providing an excise on the use of public highways by public service motor busses. Chapter 254 of the Public Acts of 1925. Part 2, § 4, of this chapter, which is applicable to the plaintiff as an interstate carrier of passengers, imposes a tax or excise of one cent a mile for the total number of miles of highway over which motor vehicles operate in interstate commerce. It provides that —

"The owner of each motor vehicle which is operated over any highway in the state for the purpose of carrying passengers from a point outside the state to another point outside the state, from a point outside the state to a point within the state or from a point within the state to a point outside the state, shall, annually, on or before the thirty-first day of March, file with the tax commissioner, on blanks to be prescribed by him, a sworn statement, of the name and address of such owner, the number of miles of highway in the state over which such motor vehicle shall have been operated during the year ending the thirty-first day of the last preceding December and such other information as said commissioner shall require, and shall pay to the treasurer, as an excise on the use of such highway, one cent for each mile so used."

Protection against this enactment is sought through the constitutional provision — clause 3, § 8, art. 1 — which provides that Congress shall have the power to regulate commerce with foreign nations, among the several states, and with Indian tribes. The contention is that this tax imposes an unlawful burden upon interstate commerce, and the prayer of the complaint seeks to enjoin the public officers from enforcing the terms of the statute. There is also a prayer for relief based upon the theory that this legislation is in conflict with the Fourteenth Amendment of the Constitution, as depriving the complainant of its property without due process of law. On the argument and in the briefs, this latter contention is not pressed, and plaintiff places its sole reliance upon the alleged conflict with section 8, art. 1, of the federal Constitution. If the law be unconstitutional, the right to maintain this suit as a restraint on enforcement is well recognized.

The Legislature of Connecticut, in the enactment of its motor vehicle laws, has enacted a comprehensive scheme of supervision and control by the state, in so far as concerns the motor vehicle carriers doing intrastate business, and it is conceded that they do not apply to interstate carriers. But by the enactment here attacked a tax, as an excise, is imposed upon the interstate carrier. By the Connecticut law, the intrastate carrier is subject to the jurisdiction of its Utilities Commission, and its rules and regulations announce routes, fares, speeds, schedules, continuity of service, and the convenience and safety of passengers and the public. Such carrier may only engage in business after having obtained a certificate of public convenience and necessity from the commission, specifying the route to be covered and the service to be rendered. Townships, cities, and boroughs, touched by such operation, are permitted to be heard. Certificates are subject to amendment and revocation. Fines for violation of the law, regulations, and orders are issued; carriers are required to register their cars; insurance or surety bonds are required, indemnifying against injury to person and property.

The interstate carrier is subject only to pay the mileage tax above referred to. He selects his own routes and roads at will. He may travel them as often as he wishes, as the calls of his business may require. He fixes his rates of traffic and contributes nothing toward the upkeep of the roads or the building of new ones. He carries no insurance, by regulation of law, for the benefit of those who suffer injury to person or property, and he is not required to report to the public officials in any manner, except by the command of the present enactment. If the state is permitted to impose the excise tax referred to, it is in no sense a discrimination against interstate commerce. On the contrary, it is a means of creating equality of the burden of taxation exacted and the burden of road use and damage thereto.

It was pointed out in Hendrick v. Maryland, 235 U. S. 610, 35 S. Ct. 140, 59 L. Ed. 385, that the movement of motor vehicles over the highways is abnormally destructive to the ways themselves, and that success depends upon good roads, the construction and maintenance of which was extensive, and that there are in recent years insistent demands made upon the states for better facilities, especially by the ever-increasing number of vehicles using them. In that case, the court said that, in view of its many decisions, there could not now be a serious doubt that, where a state at its own expense furnished special facilities for the use of those engaged in commerce, interstate as well as domestic, it could exact compensation therefor. The amount of the charges and the method of collection was held to be primarily for determination by the state, and as long as they are reasonable, and are fixed according to some uniform, fair, and practical standard, they constitute no burden on interstate commerce — citing, O. R. Transp. Co. v. Parkersburg, 107 U. S. 691, 2 S. Ct. 732, 27 L. Ed. 584; Huse v. Glover, 119 U. S. 543, 7 S. Ct. 313, 30 L. Ed. 487; the Minnesota Rate Cases, 230 U. S. 352, 33 S. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18.

In Kane v. State of New Jersey, 242 U. S. 160, 37 S. Ct. 30, 61 L. Ed. 222, the Supreme Court again stated that "the power of a state to regulate the use of motor vehicles on its highways has been recently considered by this court and broadly sustained. It extends to nonresidents as well as to residents. It includes the right to exact reasonable compensation for special facilities afforded as well as reasonable provisions to ensure safety. And it is properly exercised in imposing a license fee graduated according to the horse power of the engine."

The theory of the tax imposed by statute here is consistent with the rulings of these cases. The case is one for the use of special privileges and facilities afforded by the public highways of the state, and for enjoyment of these facilities and privileges the state may tax both intrastate and interstate commerce. It is required, however, that the tax be in reasonable relation to the privilege. As long as the discretion exercised by the state goes to the point of exerting its taxing powers in proportion to and adjusting the scheme, basis, and amount of the tax to the possible extent and result of the use of the roads, it is not an interference against interstate commerce.

The state, however, may not enact a statute which requires an interstate carrier of passengers by motor bus to secure a certificate from its director of public works, to establish the public convenience and necessity requiring the operation of busses. And this, for the reason that such regulation is not one to secure safety on the highways, or to conserve them, but is a prohibition of competition as applied to one desirous of using...