LCM Enterprises, Inc. v. Town of Dartmouth

• Decision Date: 05 October 1993
• Docket Number: No. 93-1536,93-1536
• Citation: 14 F.3d 675
• Parties: -883, 62 USLW 2495, 24 Envtl. L. Rep. 20,899 LCM ENTERPRISES, INC. and Robert R. Capobianco, Plaintiffs-Appellants, v. TOWN OF DARTMOUTH, et al., Defendants-Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 675

14 F.3d 675

73 A.F.T.R.2d 94-883, 62 USLW 2495,

24 Envtl. L. Rep. 20,899

LCM ENTERPRISES, INC. and Robert R. Capobianco, Plaintiffs-Appellants, v. TOWN OF DARTMOUTH, et al., Defendants-Appellees.

No. 93-1536.

United States Court of Appeals, First Circuit.

Heard Oct. 5, 1993.

Decided Jan. 28, 1994.

Luigi R. Petruzziello, with whom F. Joseph Gentili and Capobianco & Gentili, P.C., Natick, MA, were on brief, for plaintiffs-appellants.

John A. Birknes, Jr., New Bedford, MA, for defendants-appellees.

Before TORRUELLA, Circuit Judge, ROSENN, ^* Senior Circuit Judge, and STAHL, Circuit Judge.

TORRUELLA, Circuit Judge.

This case presents the question of whether a town's disparate harbor usage fees between residents and nonresidents violates the Fourteenth Amendment of the Constitution. Plaintiffs-appellants, LCM Enterprises, Inc. ("LCM") and Robert Capobianco, ¹ brought this action against the town of Dartmouth, Massachusetts, its Board of Selectmen, and its Waterways Advisory Committee in the United States District Court for the District of Massachusetts. Appellants challenge the constitutionality of Dartmouth's usage fees which are assessed on boats that the appellants keep moored in the town's harbor. As nonresidents, appellants must pay a higher fee than residents with similarly sized boats. Although the Constitution does place limits on a town's ability to tax users of America's waterways, we find that the actions taken by Dartmouth in this case do not implicate such limits. We consequently affirm the district court's order granting summary judgment in favor of the defendants-appellees.

I. BACKGROUND

On May 7, 1991, the municipality of Dartmouth, Massachusetts established a Waterways Management Enterprise Fund (the "waterways fund" or "fund"), pursuant to Massachusetts General Laws, Chapter 44, Section 53F 1/2 (1990), ² to support water related infrastructure. The fund is financed by a waterways use fee (the "use fee") which is levied by the town upon all boat owners who use the waterways of Dartmouth for more than limited periods of time. The amount of the fee is determined in accordance with the following use fee schedule:

(1) For residents of Dartmouth:

(a) $20 for boats 12 to 16 feet in length;

(b) $35 for boats 17 to 30 feet in length;

(c) $35 for the first 30 feet plus $1 per each additional foot for boats greater than 30 feet in length.

(2) For nonresidents of Dartmouth:

(a) $50 for boats 12 to 16 feet in length;

(b) $100 for boats 17 to 30 feet in length;

(c) $100 for the first 30 feet plus $1.50 per each additional foot for boats greater than 30 feet in length.

A resident is defined as one or more of the following:

A voter registered in the Town.

A person who is domiciled in the Town.

A person who pays real estate taxes to the Town.

A spouse or dependant of any of the above.

Dartmouth, Mass., Amendment to Dartmouth General By-Laws Article IV, Section 19B, Sub-Section 25 (May 7, 1991).

Appellants are both nonresidents of Dartmouth according to the town's definition of residency. Appellant LCM owns a fifty foot boat and appellant Capobianco owns a fifteen foot boat. Both boats are habitually moored or docked in Dartmouth. LCM and Capobianco must pay use fees of $130 and $50 respectively. Residents with similar sized boats would have to pay fees of $55 and $20 respectively.

Appellants also pay an excise tax to Dartmouth pursuant to Massachusetts General Laws Chapter 60B "for the privilege of using the waterways of the Commonwealth [of Massachusetts]." Mass.Gen.L. ch. 60B, Sec. 2(a). The Commonwealth imposes the tax but directs cities and towns to collect the tax and use it for waterway maintenance. All boat owners pay the excise tax according to the same formula regardless of their place of residence. In addition, the appellants claim that they pay $2,450 in slip rental fees to the New Bedford Yacht Club which, they point out, pays real estate taxes to Dartmouth.

Dartmouth places the money it collects from the disputed use fee, along with other revenues from boating and shellfish licenses and permits, in the waterways fund. Dartmouth also deposits 50% of the Massachusetts excise taxes on boats that it collects into the fund. The other 50% of the excise tax revenue is placed into the town's general fund. According to affidavits provided by town officials, Dartmouth collected a total of $118,042 in revenues for the waterways fund for fiscal year 1992 including $58,874 in Usage Fees and $28,122 in excise taxes. ³

The same Dartmouth affidavits reveal that the town spent $111,276 in fiscal year 1992 on port related services such as waterway maintenance, capital improvements and operating expenses plus an additional $17,217 for overhead costs attributable to town administration expenses. These expenses were paid for entirely out of the waterways fund and consumed all fund revenues for fiscal year 1992. According to town officials, the town also spent $127,888.23 on municipal services provided to the waterfront and harbor including police, fire, sanitation, and other such services. Dartmouth paid for these costs out of its general fund which depends on the town's general tax levy, namely real estate taxes and fire district taxes, for its revenues. Dartmouth also presented evidence showing that its harbor related expenses were increasing significantly every year.

In November of 1991, appellants filed suit against Dartmouth contending that the facial disparity in the assessment and collection of the use fee constituted impermissible discrimination under the Commerce Clause, the Equal Protection Clause and the Due Process Clause of the Fourteenth Amendment. Both sides moved for summary judgment and, initially, both agreed that no genuine issues of material fact existed in the case. After a hearing on the motions, however, appellants submitted a supplemental memorandum in which they challenged some of the factual assertions contained in the appellees' affidavits.

The district court then granted summary judgment in favor of Dartmouth and the other appellees. The court found that appellants lacked standing to raise a Commerce Clause challenge because they used their boats only for recreational purposes and did not engage in any commercial activity that would be affected by the use fee. In ruling on the Fourteenth Amendment claims, the district court found that Dartmouth's actions did not burden a fundamental right nor invoke a suspect classification; consequently, the fee scheme need only be rationally related to a legitimate purpose in order to pass Constitutional scrutiny. The district court granted summary judgment because it found Dartmouth's fee structure was rationally related to the legitimate goal of equitably distributing the growing costs of waterway maintenance between residents and nonresidents. Noting that Dartmouth had to use money from its general fund to cover the shortfall between total costs attributable to the harbor and total revenues from the waterways fund, the district court found that the disparate fee structure was rationally related to the goal of equalizing the burdens between residents, who pay real estate and fire district taxes to the general fund, and nonresidents, who contribute little to the general fund.

On appeal, appellants challenge the Equal Protection and Due Process rulings and the trial court's implicit conclusion that there are no disputed issues of material fact to justify summary judgment. Appellants also raise related claims based on the theory that Dartmouth's fee is an impermissible regulation of the waterways. After reviewing the record in the light most favorable to the appellants for any genuine issue of a material fact that would preclude summary judgment, Fed.R.Civ.P. 56(c); Rogers v. Fair, 902 F.2d 140, 143 (1st Cir.1990), we find that the district court was correct in holding that Dartmouth and the other appellees were entitled to a judgment in their favor as a matter of law.

II. EQUAL PROTECTION AND DUE PROCESS

When a state, or a political subdivision thereof, distinguishes between two similarly situated groups, the distinctions it makes are subject to scrutiny under the Equal Protection Clause of the Fourteenth Amendment. Such scrutiny is normally of the rational basis variety unless the distinction involves a suspect classification or burdens a fundamental right. Nordlinger v. Hahn, --- U.S. ----, ---- - ----, 112 S.Ct. 2326, 2331-32, 120 L.Ed.2d 1 (1992); Friedman v. Rogers, 440 U.S. 1, 17, 99 S.Ct. 887, 898, 59 L.Ed.2d 100 (1979) (citing New Orleans v. Dukes, 427 U.S. 297, 303, 96 S.Ct. 2513, 2516, 49 L.Ed.2d 511 (1976)); Campos v. I.N.S., 961 F.2d 309, 316 (1st Cir.1992).

In judging the constitutionality of Dartmouth's use fee, the district court applied the rational basis standard of scrutiny because the fee did not penalize the right to travel, ⁴ or any other fundamental right, and it did not invoke a suspect classification. See Hawaii Boating Ass'n v. Water Transp. Facilities Div., Dept. of Transp., 651 F.2d 661, 664-66 (9th Cir.1981). For the same reasons, the district court appropriately applied the rational basis level of scrutiny to assess appellants' Due Process claim as well. See Baker v. Concord, 916 F.2d 744, 755 (1st Cir.1990); In re Wood, 866 F.2d 1367, 1371 (11th Cir.1989). On appeal, appellants fail to point out any error in the judge's finding that no fundamental right or suspect classification is implicated in this case. Thus, to the extent they challenge the level of scrutiny applied to Dartmouth's use fee, ⁵ we invoke "the settled appellate rule that issues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived." United States v. Innamorati, 996 F.2d 456, 468 (1st Cir.1993) (quoting United States v. Zannino, 895 F.2d 1, 17 (1st Cir.), cert. denied, 494 U.S. 1082, 110 S.Ct. 1814, 108 L.Ed.2d 944 (1990)).

Under rational basis scrutiny, a...