Paul Gray, Inc. v. Ingels

Decision Date09 July 1938
Docket NumberEq. 1203-C.
Citation23 F. Supp. 946
CourtU.S. District Court — Southern District of California
PartiesPAUL GRAY, Inc., et al. v. INGELS, Director of Motor Vehicles, et al.

Tripp, Penney & Callaway (by L. E. Tripp and George Penney) and Clarence Eubanks, all of Los Angeles, Cal., for plaintiff.

John O. Palstine, Deputy Atty. Gen. (for U. S. Webb, Atty. Gen.) of State of California, for defendant.

Before WILBUR, Circuit Judge, COSGRAVE and YANKWICH, District Judges.

COSGRAVE, District Judge.

In 1935 the California Legislature passed an act that defined "caravaning" as the transportation from without the state of any motor vehicle operated on its own wheels or in tow of another vehicle for the purpose of sale to or by anyone within or without the state. The act required a special permit for caravaning for which a fee of fifteen dollars for each vehicle was charged. This money was paid into the general fund in the state treasury, "to reimburse the State treasury for the added expense which the State may incur in the administration and enforcement of this act and the added expense of policing the highways over which such caravaning may be conducted." Stat.1935, pp. 1453, 1454, § 6.

In a suit brought to restrain the enforcement of the act on the ground that it was a forbidden burden on interstate commerce, and an infringement of due process and equal protection enjoyed under the Fourteenth Amendment of the U. S. Constitution, U.S.C.A.Const.Amend. 14, the plaintiffs obtained judgment in a three judge District Court, Morf v. Ingels, D.C., 14 F.Supp. 922, on May 5, 1936. The defendants appealed to the U. S. Supreme Court, where the judgment was affirmed, Ingels v. Morf, 300 U.S. 290, 57 S.Ct. 439, 81 L.Ed. 653, on March 1, 1937. In its decision the Supreme Court considered only the contention that the licensing provisions burdened interstate commerce and expressly refrained from considering the question of discrimination against interstate commerce by failure of the act to exact a fee from those engaged in intrastate commerce, Ingels v. Morf, supra, page 293, 57 S.Ct. page 441. Appellants did not deny that the permit fee burdened interstate commerce, but urged that it was permissible for (a) the use of the highways, (b) the cost of policing the traffic, including the cost of administering the act. The court held (page 294, 57 S.Ct. page 441) that to justify the exaction by a state of a money payment burdening interstate commerce it must affirmatively appear that it is demanded as reimbursement for the expense of providing facilities or of enforcing regulations of the commerce, which regulations are within its constitutional power. Since, under the act, all the license fees were paid into the general fund, and since no part of the general fund is applied to highway purposes, the court concluded that the fees were collected, not for the use of the highways, but for the extra expense of administering the act and policing the traffic, and since the trial court found on sufficient evidence that the fee was excessive for such purpose, the decision of the District Court holding the act invalid was upheld.

In 1937 the California Legislature repealed the 1935 act and passed an entirely new act (Stat.1937, p. 2253), differing in several respects from that of 1935. The license fee is still imposed on vehicles transported on their own wheels for sale. The state is divided into two zones, with the result that each zone contains one of the two principal centers of population, Los Angeles and San Francisco. While a license fee is required in moving cars from one zone to the other, none is required for intrazone movement. A license fee of $7.50 is provided "as compensation for the privilege of using the public highways" of the state, and a like fee "to reimburse the State for expense incurred in administering police regulations pertaining to the operation of vehicles moved." Section 4. One-half of the fees are paid into the Motor Vehicle fund in the state treasury for the support of the Department of Motor Vehicles. In substance, the new act requires a license fee for all vehicles moved on their own wheels for sale from one of the densely populated areas of the state to another and from points outside of the state to points within either of the zones, but does not require a license fee for similar movements between points within each zone. It devotes one-half of the fee to general highway purposes and the remaining one-half to the expense of policing the traffic and enforcing the act.

Plaintiffs in the present action seek to enjoin the enforcement of the 1937 act on the grounds, among others, that it is an excessive burden on interstate commerce; that it unjustly discriminates between interstate and interzone movement of cars on the one hand, and intrazone movement on the other; that there is no reasonable relation between the charges made and the expenditures necessary.

The defendants plead, among other things, that large numbers of cars are moved in units of two coupled together, with a single driver; that drivers bring cars into the state, and are irresponsible, not regular employees, are transients; that the bringing in of a number of cars in single units produces congestion of the highways, increases traffic hazards and increases the cost of the highway maintenance.

It is shown that approximately 15,000 cars are brought into California upon their own wheels for sale annually. Of this number, 3000 are brought in singly, that is each car with its driver and not in association with any others — not in convoys. 6,000 are moved singly, each car with a single driver, but in convoys of varying numbers, possibly ten to twenty. 6,000 are moved in twos, the rear car being coupled to the one in front with one driver to each such unit. The interzone moving is negligible. At the two centers of population and distribution, San Francisco in the northerly zone, and Los Angeles in the southerly zone, there is, of course, extensive sale of cars not brought into the state on their own wheels. These are distributed over an average radius of perhaps a hundred miles from each of the centers, rarely coupled together, but nevertheless in convoys and generally each car is in charge of a driver regularly employed. Distribution is also made by loading the cars on trucks that exceed in length the coupled car unit.

A general comparison between the year 1931 and the year 1937 shows:

                                            1931       1937
                Total registrations in
                  California ...........  2,107,275  2,638,150
                Cars of outside registry
                  coming into
                  the state ............    324,726    504,943
                Total number driven
                  into the state .......    649,245  1,015,886
                

From this it appears that the 15,000 cars brought in for sale on their own wheels are not to exceed 1½% of the total number of cars coming over the border in 1937. The 3,000 cars brought in, each with its own driver and not in association with other cars, necessarily must be eliminated for it cannot be that they present anything in the nature of a problem. The remaining 12,000 cars come in convoys, say averaging 15 cars to a convoy, or 800 different processions of 15 cars each during the 365 days of the year. This is an average of 66 convoys each month over a distance that can be attained without undue haste in one day. Over a considerable portion of the distance, notably from points of entry at Yermo, Blythe, and Yuma, while the road is a two lane highway, it traverses great lengths of totally uninhabited country with no intersecting roads and with nothing in the way of congested traffic.

15,000 cars means 1½% of the total of 1,015,886 cars that cross the state borders. The testimony as to the number of men whose employment caravaning requires is indefinite and inconclusive. No one on behalf of defendants testified that caravans are actually escorted, with the exception of Captain Personius, who, while stating that he himself had gone from Truckee to Sacramento with caravans, did not know how many caravans had been assisted in his district. Mr. Cato, chief of the patrol, does not say that a single officer or employee devotes his entire time to the caravaning problem. At the most only Captain Personius and possibly two district officers do so. On the other hand, one of the plaintiffs testified that at no time was any of his considerable number of caravans ever escorted or assisted by a traffic officer. It was agreed that many other witnesses would give similar testimony.

The officer charged with the enforcement of the act testifies that after the enactment of the law three officers were assigned to Highway 50 between Carson City, Nevada, and Placerville, California, south of Lake Tahoe. At the same time defendants present the records of the Public Service Commission of the State of Nevada, from which it appears that during the entire eight months, beginning with January 1, 1937, and ending with August 31 of the same year, the period of greatest activity, a total of only 9 cars were brought into California for sale over Highway 50. These undisputed figures put in grave doubt the question as to whether substantial traffic problems exist by reason of caravaning.

The showing made by defendants as to the traffic problems presented by caravaning is not impressive. The number of caravaned cars compared with the total coming into the state, a negligible percentage, seems to force the conclusion that the situation presented is substantially that found by the District Court to exist in the former case, Morf v. Ingels, D.C., 14 F.Supp. 922, that is, that the fee is not fixed on any basis of compensation for the regulation of the traffic.

There is practically no interzone movement. The intrazone movement of cars for sale is approximately 4,000 monthly in Zone 1. While no figures were presented, the movement in Zone 2 may be deemed to be the same. Such cars are entirely untaxed. A tax, purporting to be for the...

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4 cases
  • Devine v. Joshua Hendy Corporation
    • United States
    • U.S. District Court — Southern District of California
    • 30 Abril 1948
    ...1941, D.C.Cal., 39 F. Supp. 895, 902. 12 Parker v. Brown, 1943, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315. 13 Paul Gray, Inc. v. Ingels, 1938, D.C. Cal., 23 F.Supp. 946, 950. And see, Clark v. Paul Gray, Inc., 1939, 306 U. S. 583, 59 S.Ct. 744, 83 L.Ed. 1001, sustaining the position taken in......
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    • U.S. Supreme Court
    • 17 Abril 1939
    ...the State of California, from enforcing the license and fee provisions of Chapter 788, p. 2253, California Statutes of 1937. Gray v. Ingels, D.C., 23 F.Supp. 946.1 The statute, known as the Caravan Act, was enacted as a substitute for the Caravan Act of 1935, c. 402, p. 1453, Cal.Stat.1935,......
  • Bender v. Connor
    • United States
    • U.S. District Court — District of Connecticut
    • 11 Agosto 1939
    ...17, 1939 (a decision not cited to us by counsel, although the defendant did cite the decision below, here reversed,. Paul Gray, Inc. v. Ingels, D.C.S.D.Cal., 23 F.Supp. 946, and stated erroneously that no appeal had been taken from it), the Supreme Court upheld a second California Caravan A......
  • In re Farr
    • United States
    • U.S. District Court — District of South Carolina
    • 23 Julio 1938

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