Northwest Airlines Inc. v. Joint City-County Airport Bd., CITY-COUNTY

• Decision Date: 05 January 1970
• Docket Number: No. 11708,CITY-COUNTY,11708
• Court: Montana Supreme Court
• Parties: NORTHWEST AIRLINES INC., and Western Airlines, Inc., Plaintiffs and Appellants, v. JOINTAIRPORT BOARD, Lewis & Clark County, City of Helena, et al., Defendants and Respondents.

Page 470

463 P.2d 470

154 Mont. 352

NORTHWEST AIRLINES INC., and Western Airlines, Inc. Plaintiffs and Appellants, v. JOINT CITY-COUNTY AIRPORT BOARD, Lewis & Clark County, City of Helena, et al., Defendants and Respondents.

No. 11708.

Supreme Court of Montana.

Submitted Dec. 10, 1969.

Decided Jan. 5, 1970.

Hibbs, Sweeney & Colberg, Rex F. Hibbs, argued, Billings, Cleary, Gottlieb, Steen & Hamilton, Washington, D. C., Daniel B. Silver, appeared, Washington, D. C., for appellants.

Thomas Dowling, County Atty., C. W. Leaphart, City Atty., Leo J. Kottas, Jr., State Bd. of Equalization, Thomas Mahan, argued, Philip Strope, appeared, Helena, for respondents.

CASTLES, Justice.

Plaintiffs, hereinafter referred to as appellants, brought this action in the district court of the First Judicial District, in and for the County of Lewis and Clark, seeking a permanent injunction against the imposition of the tax authorized by Chapter 281, Laws of 1969, and a declaratory judgment that Chapter 281 is unconstitutional under the constitutions of the United States and the State of Montana. The court granted an order restraining imposition of the tax pending disposition of the action in the district court and the Montana Supreme Court. This appeal follows from the judgment denying permanent injunctive relief and holding Chapter 281 and the tax imposed pursuant thereto by the defendants, hereinafter referred to as respondents, to be constitutional.

Chapter 281 of the Montana Session Laws, 1969, now sections 1-829 through 1-832, R.C.M.1947, provides in part:

'Every city or county which constructs, operates or maintains, individually or jointly, a public airport with funds contributed in whole or in part, directly or indirectly, by the state, county, city or other public authority, is authorized and empowered to require every passenger air carrier for hire which uses the airport for commercial use of aircraft, to pay a service charge of one dollar ($1) for each passenger emplaning upon its aircraft at any such public airport as a point of origin for transportation purposes.'

Chapter 281 defines a 'Passenger air carrier' as:

'(A) common carrier of passengers for hire by aircraft weighing over twelve thousand five hundred (12,500) pounds on a regular schedule or schedules, and a carrier of passengers for hire by aircraft weighing over twelve thousand five hundred (12,500) pounds on a contract or charter basis.'

The act became effective July 1, 1969. Prior to that time the City Council of Helena, and the County Commission of Lewis and Clark County, joint owners and operators of the Helena airport, adopted resolutions directing the State Board of Equalization to commence collection of the fee authorized under the act.

The appellants are the only two scheduled commercial air carriers serving the Helena airport with aircraft weighing more than 12,500 pounds. Commercial service on a supplemental and/or charter basis is provided in addition by other carriers. In 1968 commercial aircraft of the appellants conducted approximately 5,000 arrivals and departures at the Helena airport, and there were approximately 46,000 operations by other aircraft, including those of other commercial carriers, private aircraft, and military aircraft. There were approximately 43,000 passenger emplanements and deplanements at the Helena airport in 1968, of which some 34,000 involved flights of the appellants. Approximately 75% of the emplaning passengers of the appellant airlines are interstate travelers.

In addition to use by the appellants, the Helena airport is used by commercial carriers using aircraft weighing 12,500 pounds or less; general aviation users and aircraft; military users and aircraft; personnel, aviators and aircraft of state and federal government agencies; airport concessionaires and their customers; and visitors. The airport facilities are also used by persons after arrival at the airport by other commercial and nonscheduled aircraft; persons using the airport facilities to transport and receive air freight shipments; and persons using the facilities when meeting or seeing off air passengers.

The sole issue to be determined is whether Chapter 281, authorizing cities and/or counties which operate public airports through the use of public funds to impose upon every air passenger carrier weighing over 12,500 pounds a charge of $1.00 for each originating passenger emplaning upon its aircraft, is constitutional. This Court will first consider whether Chapter 281 infringes upon the constitutional protection if interstate travel and, second, whether the exaction can be justified as a valid use charge for constitutionl purposes.

The right of interstate travel and the lack of power in the states to infringe upon or interfere with that right have been consistently upheld by the United States Supreme Court for over a century. The leading case is Crandall v. Nevada, 73 (6 Wall.) U.S. 35, 18 L.Ed. 745 (1868), in which the court struck down a Nevada head tax. There the state of Nevada sought to levy a tax of one dollar upon every person leaving the state by railroad, stagecoach or other vehicle engaged in transporting passengers for hire. The tax was to be collected by the carrier and reported monthly to the state. Crandall, agent of a stage company, was convicted for refusing to report the number of passengers carried and for nonpayment of the tax. In reversing the conviction, the court stated that the issue before it was 'the right of a State to levy a tax upon persons residing in the State who may wish to get out of it; and upon persons not residing in it who may have occasion to pass through it.' Crandall v. Nevada, supra.

The same question is before this Court. Here the City of Helena and the County of Lewis and Clark, acting pursuant to Chapter 281, seek to tax citizens of Montana who may wish to leave the state by air from the Helena airport and residents of Montana who pass through Montana on journeys encompassing a segment of travel by air carrier originating in Helena.

In holding the Nevada statute to be unconstitutional, the majority of the court in Crandall decided the case without reference to the Commerce Clause, Art. 1, § 8, Clause 3, of the United States Constitution; two justices concurred basing their opinion on the Commerce Clause. The majority rested its holding upon the requirements of the federal system itself, which demand that the government be able to call to its service, citizens from any part of the United States, without interference by any state through whose territory it might be necessary to pass. The flaw of the Nevada statute was not the amount of the tax, but the very assertion of the right to levy an exaction of that character.

'(I)f the State can tax a railroad passenger one dollar, it can tax him $1,000. If one State can do this, so can every other State. And thus one or more States covering the only practicable routes of travel from the east to the west, or from the north to the south, may totally prevent or seriously burden all transportation of passengers from one part of the country to the other.' Crandall v. Nevada, supra.

The same apprehended evils are present in Chapter 281. The exaction falls on the act of emplanement, which is equivalent to the act of departure and therefore is an integral aspect of interstate travel. If the state is empowered to tax the act of departure no inherent limits exist as to the amount of charge. The right of the airport to tax the act of emplanement cannot logically be distinguished from the right of the airport to tax the act of deplanement. By the same token, arrival and departure taxes could be levied by airports at each point of intermediate stopover or transfer on a passenger's route. Since no rational basis exists for apportioning the right to tax arrival and departure among the various airports through which a traveler might pass, there is nothing to prevent the accumulation of crippling burdens on interstate air travel. Clearly the power to tax the act of departure, even where the exaction is small, encompasses the power to prohibit departure completely and to impose crippling cumulative burdens on interstate travel.

The ban on state action in this area must be absolute as demonstrated by an important line of cases, including The Passenger Cases (Smith v. Turner, Norris v. City of Boston) 48 (7 How.) U.S. 283, 12 L.Ed. 702 (1848), on which the court relief heavily in Crandall v. Nevada, supra, and their progeny. Although this line of cases involved the foreign commerce of the United States and rested in part on the exclusive federal power to control ingress of persons into the United States, they illustrate the court's treatment of a right considered fundamental-free movement of persons. Unlike the movement of goods, where a balance often is struck (in the absence of federal legislation) between the Commerce Clause's demand for untrammeled commercial intercourse, and the states' needs for reasonable police regulation and revenue collection, the constitutional protection is treated as absolute.

The ban on state interference arises as a matter of constitutional law wherever the assertion of state power contains the inherent possibility of complete interdiction of some activity of federal concern. Thus, the states have been completely deprived of power to tax or otherwise regulate the act of entry to the United States, even in aid of valid police or revenue collection concerns of the states. The Passenger Cases, supra, and succeeding cases. The same is true of...