Olan Mills, Inc. of Tennessee v. Opelika, Alabama, Civ. A. No. 586-E.

• Citation: 207 F. Supp. 332
• Decision Date: 12 July 1962
• Docket Number: Civ. A. No. 586-E.
• Parties: OLAN MILLS, INC. OF TENNESSEE, Plaintiff, v. OPELIKA, Greenville, Alexander City, Jasper and Thomasville, ALABAMA, as representatives of a class consisting of all the municipal corporations in the State of Alabama, Defendants.
• Court: U.S. District Court — Middle District of Alabama

207 F. Supp. 332

OLAN MILLS, INC. OF TENNESSEE, Plaintiff, v. OPELIKA, Greenville, Alexander City, Jasper and Thomasville, ALABAMA, as representatives of a class consisting of all the municipal corporations in the State of Alabama, Defendants.

Civ. A. No. 586-E.

United States District Court M. D. Alabama, E. D.

July 12, 1962.

Rushton, Stakely & Johnston, Montgomery, Ala., Hunt & Lawson, and Sizer Chambliss, Chattanooga, Tenn., for plaintiff.

J. Arch McKee, Opelika, Ala., for the City of Opelika, Alabama; Fred Scott, Greenville, Ala., for the City of Greenville, Alabama, William I. Byrd, Alexander City, Ala., for the City of Alexander City, Alabama; Bankhead & Petree, Jasper, Ala., for the City of Jasper, Alabama, W. Johnson McCall, Thomasville, Ala., for the City of Thomasville, Alabama, and John F. Watkins, Montgomery, Ala., associated with the aforementioned attorneys for defendants.

JOHNSON, District Judge.

This cause is now submitted to this Court upon the motions to dismiss filed herein by each of the named defendants, said defendants being sued "as representatives of a class consisting of all the municipal corporations in the State of Alabama." The motion to dismiss filed by all but one of the named defendants is based upon several grounds other than the general ground that the complaint fails to state a claim against the defendants upon which relief can be granted. The motions to dismiss by each of the defendants set up that ground as a basis for the dismissal action sought herein.

Plaintiff, a Tennessee corporation, with its principal place of business in Chattanooga, Tennessee, brings this action for a declaratory judgment, claiming that the action arises "under the Constitution of the United States, Article I, Section 8; the Fourteenth Amendment to the Constitution of the United States, Section One and 28 U.S.C. Section 1343(3)." The plaintiff is engaged in the business of photography, using sales people, cameramen and traveling representatives who work out of its Chattanooga office. In conducting its business in the State of Alabama, plaintiff uses the method of advance salesmen who solicit orders in various towns and cities in Alabama for photographs to be taken. The plaintiff then sends cameramen into the town or city selected, at the appointed time; the film is then mailed to plaintiff's Chattanooga plant; proofs are returned at a designated time and place for approval or disapproval by the customer; and finally the customer's order is mailed from the Chattanooga plant. For the past twenty-five years, plaintiff has been doing business throughout Alabama in various municipal corporations (over seventy-five being listed in the exhibit to the complaint) that constitute the class of said municipal corporations that plaintiff says have ordinances imposing occupational license taxes on photographers who do business within their corporate limits. Plaintiff says that such license fees and taxes are restrictions on interstate commerce, that most are unequal and discriminatory and that as a result thereof plaintiff is denied the equal protection of the law and is deprived of its right to engage in business in the State of Alabama. The plaintiff, in this declaratory judgment action, asks this Court to declare the rights of the defendants to charge the plaintiff license fees and taxes for carrying on its business in interstate commerce and asks this Court to adjudge the rights of the defendants to charge the plaintiff greater fees for license taxes than those charged resident businesses.

It very readily appears from plaintiff's complaint that plaintiff is seeking declaratory relief from this Court which affects the taxing power delegated to the defendant municipalities on the part of the State of Alabama. The relief plaintiff seeks is alleged to arise under the Commerce Clause of the Constitution of the United States (Article I, Section 8), the Due Process Clause and the Equal Protection Clause of the Fourteenth Amendment to the Constitution of the United States and one of the Civil Rights Acts 28 U.S.C.A. 1343(3). As a practical matter, the plaintiff is asking this Court to declare unconstitutional and suspend the collection and excuse the plaintiff from paying the license fees and taxes imposed upon plaintiff by the members of the class of Alabama municipalities represented by the five defendants. In such instances, federal courts traditionally use considerable restraint in employing the declaratory judgment procedure. As a matter of fact, the federal district courts are prohibited by statute from taking such action as plaintiff seeks to have this Court take, except where no remedy is available in the courts of the State.¹ Professor Moore in his Federal Practice, 2d Ed., Vol. 6, § 57.181, in discussing § 1341 of the Federal Code, had this to say:

"* * * From a functional standpoint, the declaratory judgment in many instances is equivalent to an injunction, that it sic, it has the effect of enjoining and restraining tax assessment or collection * *."

* * * * * *

"Declaratory relief as to state taxes should normally be withheld. But where state law does not provide a plain, speedy and efficient remedy, then the federal district court should exercise its jurisdiction and grant the appropriate relief."

All of this means that this Court is under a duty to proceed cautiously in this instance in determining whether or not plaintiff shall be granted the extraordinary relief it is seeking. In addition, it means that this Court must proceed with reluctance in authorizing a suit that is designed to interfere with the fiscal operation of the State of Alabama, acting in the enforcement of Title 51, § 569, Code of Alabama, Recompiled 1958,² and in the operation of the some seventy-five separate municipal ordinances referred to by plaintiff in an exhibit to its complaint.

Assuming the some seventy-five municipal ordinances are sufficiently similar to the State statute set out in footnote 2 (as this Court must in this action do for the present time in order to deal with this case as a "class action"), this Court is confronted at the outset with the fact that the Supreme Court of the State of Alabama has already, on two separate occasions, construed the tax ordinances involved and defined the nature of the tax levied thereby. Graves v. State, 258 Ala. 359, 62 So.2d 446, and Haden v. Olan Mills, Inc., (Ala.1961), 135 So.2d 388. In each instance, the Alabama Supreme Court construed § 569 of the State statute to be a tax levied upon and directed at the purely local activities of the photographer or other representatives of the company taking and processing the pictures in Alabama. The significance of the action by the Supreme Court of Alabama in the Graves and Olan Mills, Inc., ...