Opinion of Justices to the House of Representatives

• Decision Date: 19 November 1998
• Citation: 702 N.E.2d 8,428 Mass. 1201
• Parties: OPINION OF JUSTICES TO THE HOUSE OF REPRESENTATIVES
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 8

702 N.E.2d 8

428 Mass. 1201

OPINION OF JUSTICES TO THE HOUSE OF REPRESENTATIVES

Supreme Judicial Court of Massachusetts.

Nov. 19, 1998.

To the Honorable the House of Representatives of the Commonwealth of Massachusetts:

The undersigned Justices of the Supreme Judicial Court respectfully submit their response to the questions set forth in an order adopted by the House of Representatives on October 5, 1998, and transmitted to this court on October 8, 1998. The order recites that § 2 of House No. 5822, a bill pending before the General Court, entitled "An Act further regulating convention and exhibition centers in the commonwealth," reduces the ten dollar additional surcharge imposed on each vehicular rental transaction contract in the city of Boston to three dollars for residents of the city of Boston, and that grave doubt exists as to the constitutionality of the bill if enacted into law. The Act would strike out St.1997, c. 152, § 9(e ), and replace it with the following language: "There shall be an additional surcharge of $10, or in the case of residents of the city of Boston $3, imposed upon each vehicular rental transaction contract in said city; provided, however, that $1 of said additional surcharge shall be paid to said city and deposited in the Room Occupancy Excise Fund."

The order presents to us the following questions:

"1. Would the enactment of Section 2 of said House No. 5822 in that it

reduces the surcharge on vehicular rental transaction contracts in the city

of Boston from ten dollars to three dollars for residents of the city of

Boston violate the Privileges and Immunities Clause of the United States

Constitution, Art. IV, Sec. 2, cl. 1?

"2. Would the enactment of Section 2 of said House No. 5822 in that it

reduces the surcharge on vehicular rental transaction contracts in the city

of Boston from ten dollars to three dollars for residents of the city of

Boston violate the Commerce Clause of the Constitution, Art. 1, Sec. 8?

"3. Would the enactment of Section 2 of said House No. 5822 in that it

reduces the surcharge on vehicular rental transaction contracts in the city

of Boston from ten dollars to three dollars for residents of the city of

Boston deny equal protection of the laws under the Fourteenth

Amendment of the United States Constitution or the Declaration of Rights of

the Massachusetts Constitution to non-residents of the city of Boston?"

A memorandum of interested parties was submitted to the court by Bernard Borman, a Boston resident who "rents automobiles near his home," on behalf of himself and other similarly situated individuals.

The proposed measure plainly imposes a different burden on vehicle renters who are not residents of Boston (nonresidents) than on those who reside in the city (residents). Tax legislation invariably makes distinctions that impose different burdens on different classes of persons. Rent seeking, which seeks to shift some of the cost of widely shared benefits, is the stuff of politics. See DeBow, The Social Costs of Populist Antitrust: A Public Choice Perspective, 14 Harv. J.L. & Pub. Pol'y 205, 214 (1991) ("The public choice theory of rent seeking focuses on the processes by which government dispenses favorable treatment (for example, tax breaks, direct subsidies, or protection from competition) to private parties" and the efforts of individuals, businesses and organizations to "gain access to a share of this largesse"). It is only where the allocation of burdens disproportionately disadvantages interests or groups enjoying some measure of constitutional solicitude that a measure raises constitutional concern. See, e.g., Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 103 S.Ct. 1365, 75 L.Ed.2d 295 (1983). One such family of concerns relates to measures that disproportionately disadvantage persons or interests outside of the State imposing the measures. The constitutional provisions that address these concerns are the commerce clause, art. I, § 8, the privileges and immunities clause, art. IV, § 2, and the equal protection clause of the Fourteenth Amendment to the United States Constitution.

Question 2: Commerce Clause.

The second question propounded by the House of Representatives asks us to determine whether the enactment of § 2 of House No. 5822 would violate the commerce clause of the United States Constitution. We note at the outset that "[t]here is no presumption of validity when we consider a proposed statute in an advisory opinion." Opinion of the Justices, 368 Mass. 831, 842, 333 N.E.2d 388 (1975), quoting Opinion of the Justices, 345 Mass. 780, 781-782, 189 N.E.2d 849 (1963).

The Supreme Court of the United States continues to interpret the commerce clause as more than an authority for Congress to legislate in the premises. See, e.g., Camps Newfound/Owatonna, Inc. v. Harrison, 520 U.S. 564, 117 S.Ct. 1590, 137 L.Ed.2d 852 (1997). The Court, in spite of persisting doubts and criticism, see id. at 610-611, 117 S.Ct. 1590 (Thomas, J., dissenting); Redish, The Dormant Commerce Clause and the Constitutional Balance of Federalism, 1987 Duke L.J. 569; Edmund W. Kitch, Regulation, the American Common Market and Public Choice, 6 Harv. J.L. & Pub. Pol'y 119 (1982), interprets the clause as imposing limits on the authority of State and local governments to regulate in ways that impinge on interstate or foreign commerce. See, e.g., Oklahoma Tax Comm'n v. Jefferson Lines, Inc., 514 U.S. 175, 179, 115 S.Ct. 1331, 131 L.Ed.2d 261 (1995); West Lynn Creamery v. Healy, 512 U.S. 186, 192-193, 114 S.Ct. 2205, 129 L.Ed.2d 157 (1994), quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273-274, 108 S.Ct. 1803, 100 L.Ed.2d 302 (1988); Cooley v. Wardens of the Port of Philadelphia, 53 U.S. (12 How.) 299, 13 L.Ed. 996 (1851).

The course of decision under what has come to be known as the dormant, or negative, commerce clause, see Jefferson Lines, Inc., supra, has not been consistent, nor have lines of demarcation always been easy to discern, see id. at 179, 115 S.Ct. 1331 (recounting the numerous "turns" the Supreme Court's "understanding of the dormant Commerce Clause has taken"), but "opinions of the Court through the years have reflected an alertness to the evils of 'economic isolation' and protectionism." Philadelphia v. New Jersey, 437 U.S. 617, 623, 98 S.Ct. 2531, 57 L.Ed.2d 475 (1978). Therefore, a State may not "block the flow of natural resources or products of trade from one State to another in order to satisfy local needs," Andover Sav. Bank v. Commissioner of Revenue, 387 Mass. 229, 247, 439 N.E.2d 282 (1982), citing New England Power Co. v. New Hampshire, 455 U.S. 331, 102 S.Ct. 1096, 71 L.Ed.2d 188 (1982); Hughes v. Oklahoma, 441 U.S. 322, 99 S.Ct. 1727, 60 L.Ed.2d 250 (1979), and is prevented from "retreating into economic isolation or jeopardizing the welfare of the Nation as a whole, as it would do if it were free to place burdens on the flow of commerce across its borders that commerce wholly within those borders would not bear." Jefferson Lines, Inc., supra at 180, 115 S.Ct. 1331. See H.P. Hood & Sons v. Du Mond, 336 U.S. 525, 532, 69 S.Ct. 657, 93 L.Ed. 865 (1949); Baldwin v. G.A.F. Seelig, Inc., 294 U.S. 511, 527, 55 S.Ct. 497, 79 L.Ed. 1032 (1935) ("What is ultimate is the principle that one state in its dealings with another may not place itself in a position of economic isolation.... Neither the power to tax nor the police power may be used by the state of destination with the aim and effect of establishing an economic barrier against competition with the products of another state or the labor of its residents").

It has also been noted that legislation disadvantaging out-of-State interests, which by hypothesis cannot participate in the political process imposing that disadvantage, has for that reason a special burden of justification. See 2 R.D. Rotunda & J.E. Nowak, Constitutional Law: Substance and Procedure § 11.11(a) (2d ed.1992); Farber, In the Shadow of the Legislature: The Common Law in the Age of the New Public Law, 89 Mich. L.Rev. 875, 906 n.74 (1991); Sunstein, Naked Preferences and the Constitution, 84 Colum. L.Rev. 1689, 1705 (1984); Tushnet, Rethinking the Dormant Commerce Clause, 1979 Wis. L.Rev. 125. Cf. McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 428-429, 4 L.Ed. 579 (1819). But see West Lynn Creamery, Inc., supra at 212-217, 114 S.Ct. 2205 (Rehnquist, C.J., dissenting).

In assessing whether a particular statutory provision violates the dormantcommerce clause, an initial question is whether that provision "has a sufficient effect on interstate commerce to evoke commerce clause scrutiny."

Perini Corp. v. Commissioner of Revenue, 419 Mass. 763, 766, 647 N.E.2d 52 (1995), citing Aronson v. Commonwealth, 401 Mass. 244, 248, 516 N.E.2d 137 (1987), cert. denied, 488 U.S. 818, 109 S.Ct. 58, 102 L.Ed.2d 36 (1988). Inhibitions on interstate transportation affect interstate commerce. Indeed, they are the very type of regulations that the Supreme Court has ruled are impermissible under the commerce clause. See Camps Newfound/Owatonna, Inc., supra at 573, 117 S.Ct. 1590 ("transportation of persons across state lines ... has long been recognized as a form of 'commerce' "); Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 6 L.Ed. 23 (1824). The rental of vehicles in Boston is plainly an aspect of interstate transportation. Many, if not the majority, of those who rent motor vehicles in the city of Boston are interstate travelers, and their vehicle rentals may represent the final step of an interstate journey. It does not matter that some vehicles rented in Boston might be driven only within the city. "The Court has ... long since rejected any suggestion that a state tax or regulation affecting interstate commerce is immune from Commerce Clause scrutiny because it attaches only to a 'local' ... activity." Commonwealth Edison Co. v. Montana, 453 U.S. 609, 615, 101 S.Ct. 2946, 69 L.Ed.2d 884 (1...