Prouty v. Coyne, 358-361.

• Citation: 55 F.2d 289
• Decision Date: 20 January 1932
• Docket Number: No. 358-361.,358-361.
• Parties: PROUTY et al. v. COYNE, Secretary of State of South Dakota, et al., and three other cases.
• Court: United States District Courts. 8th Circuit. United States District Court of North Dakota

55 F.2d 289 (1932)

PROUTY et al. v. COYNE, Secretary of State of South Dakota, et al., and three other cases.

Nos. 358-361.

District Court, D. South Dakota, S. D.

January 20, 1932.

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J. H. Hays, of Sioux City, Iowa, and A. B. Fairbank, of Sioux Falls, S. D. (Hays, Baron & Mathews, of Sioux City, Iowa, and Boyce, Warren & Fairbank and Bielski & Elliott, all of Sioux Falls, S. D., on the brief), for complainants.

M. Q. Sharpe, Atty. Gen., and Benjamin D. Mintener and Herman L. Bode, Asst. Attys. Gen., for defendants.

Before GARDNER, Circuit Judge, and SANBORN and WYMAN, District Judges.

GARDNER, Circuit Judge.

The question presented by these suits which have been consolidated is the constitutionality of chapter 183, South Dakota Session Laws 1931, and chapter 224, South Dakota Session Laws 1925, as amended by chapter 179 of the South Dakota Session Laws of 1931.

Plaintiffs, who are operators of motor vehicles for hire, seek to enjoin the defendants, who are public officers of South Dakota charged with the duty of enforcing the motor vehicle laws, from attempting to enforce the above-mentioned statutes, claiming that their enforcement will violate rights guaranteed them under the Federal Constitution. Certain of the plaintiffs are common carriers engaged in interstate commerce, others are private carriers engaged in interstate commerce, still others are common carriers engaged in intrastate commerce, while still others are private carriers engaged in intrastate commerce. This classification may not be all-comprehensive, but will suffice for the purpose of this opinion.

Chapter 183, Session Laws 1931, comprises some twenty-two sections, and is too voluminous to set out in hæc verba herein. Section 6 provides for registration fee, and reads in part as follows: "The following license fee and compensation for the use of the highways shall be paid annually to the County Treasurer upon the application for registration or re-registration of a motor vehicle, except as hereinafter provided, upon the basis of the manufacturer's weight as follows."

Then follows a graduated schedule of license fees for cars; that schedule not being important in this case. The section further provides as follows: "For all motor trucks, including converted cars, road tractors and truck tractors, upon the basis of their manufacturer's weight of chassis or actual chassis weight, whichever is the greater, as follows."

Then follows a classification of weights from 1,500 to 9,000 pounds, opposite which weights is set down the applicable license fee or compensation charge. These are graduated from $15 to $400. The section further provides that: "For all trailers and semitrailers upon the basis of their actual weight, as follows." There is then set out a similar schedule of weights and charges.

It will be necessary later to call attention to certain other provisions of this section, which are made the object of attack by plaintiffs.

On behalf of those engaged in interstate commerce, it is urged that this statute is violative of the commerce clause of the United States Constitution, because a fixed flat charge is made against vehicles, graduated according to weight of the vehicle, but regardless of the mileage traveled or the tonnage carried. There is not much dispute as to the law, nor as to the facts, but the difficulty here arises in applying the law to the admitted facts. If applicable to interstate traffic, the tax imposed is without doubt a burden on interstate commerce, but that alone will not render it obnoxious to the commerce clause of the Constitution. The state may constitutionally impose a tax burden on interstate commerce as compensation for the use of the public highways, provided the charge is only a reasonable and fair contribution to the expense of construction and maintenance of such highways and of regulating the traffic thereon. Kane v. New Jersey, 242 U. S. 160, 37 S. Ct. 30, 61 L. Ed. 222; Clark v. Poor, 274 U. S. 554, 47 S. Ct. 702, 71 L. Ed. 1199; Sprout v. South Bend, 277 U. S. 163, 48 S. Ct. 502, 504, 72 L. Ed. 833, 62 A. L. R. 45; Interstate Busses Corp. v. Blodgett, 276 U. S. 245, 48 S. Ct. 230, 72 L. Ed. 551; Interstate Transit, Inc., v. Lindsey, 283 U. S. 183, 51 S. Ct. 380, 382, 75 L. Ed. 953; Hendrick v. Maryland, 235 U. S. 610, 35 S. Ct. 140, 59 L. Ed. 385.

Conceding this principle of law, plaintiffs contend that the method of determining the amount of the charge is unscientific, arbitrary, and unreasonable, and that the standard by which the amount of the charge is determined does not produce a charge or tax bearing any reasonable relation to the privilege of using the highways, but that the application of the law results in discrimination and is arbitrary. The amount of the tax is based solely upon the chassis weight, regardless of the mileage traveled, or the load carried. Regulatory acts have been held valid as not being unreasonable, which base the amount of the license charge or tax according to the type, size, weight, capacity, horse power, or use of the particular vehicle, but in Interstate Transit, Inc., v. Lindsey, supra, it is pointed out that, where such a tax is a direct burden on interstate commerce, it must appear that it is levied only as compensation for the use of the highways, or to defray the expense of regulating motor traffic. Answering the suggestion that a tax graded according to carrying capacity was a reasonable measure for use of the highways, Justice Brandeis, who wrote the opinion, said:

"It is suggested that a tax on busses graduated according to carrying capacity is common and is a reasonable measure of compensation for use of the highways. It is true that such a measure is often applied in taxing motor vehicles engaged in intrastate commerce. Being free to levy occupation taxes, states may tax the privilege of doing an intrastate bus business without regard to whether the charge imposed represents merely a fair compensation for the use of their highways. Compare Gundling v. Chicago, 177 U. S. 183, 189, 20 S. Ct. 633, 44 L. Ed. 725. But since a state may demand of one carrying on an interstate bus business only fair compensation for what it gives, such imposition, although termed a tax, cannot be tested by standards which generally determine the validity of taxes. Being valid only if compensatory, the charge must be necessarily predicated upon the use made, or to be made, of the highways of the state. Clark v. Poor, supra. In the present act the amount of the tax is not dependent upon such use. It does not rise with an increase in mileage traveled, or even with the number of passengers actually carried on the highways of the state. Nor is it related to the degree of wear and tear incident to the use of motor vehicles of different sizes and weights, except in so far as this is indirectly affected by carrying capacity. The tax is proportioned solely to the earning capacity of the vehicle. Accordingly, there is here no sufficient relation between the measure employed and the extent or manner of use to justify holding that the tax was a charge made merely as compensation for the use of the highways by interstate busses." (Italics ours.)

In the instant case, it appears from the face of the act that the avowed purpose of the tax was for compensation for the use of the highways. This being true, the burden of proof was upon the plaintiffs to show that the tax bears no reasonable relation to the privilege of using the highways, or is unreasonably discriminatory. To sustain the act as a burden on interstate commerce, three things must appear: First, that the tax was levied only for compensation for the use of the highways; second, that the tax as levied bears a reasonable relation to the privilege of using the highways; and, third, that it is not unreasonably discriminatory.

In the Lindsey Case, the tax, as in the case at bar, was substantial, and it was graded according to carrying capacity. In holding the statute unconstitutional, the court said: "In the present act the amount of the tax is not dependent upon such use. It does not rise with an increase in mileage traveled, or even with the number of passengers actually carried on the highways of the state."

So, in the instant case, the amount of the tax is in no way dependent upon the actual use which the vehicle might make of the highways, either as to miles traveled or tonnage carried.

The same thought is suggested in Sprout v. South Bend, supra, where the court said: "A flat tax, substantial in amount, and the same for busses plying the streets continuously in local service and for busses making, as do many interstate busses, only a single trip daily, could hardly have been designed as a measure of the cost or value of the use of the highways."

In the instant case, it appears that a number of the plaintiffs engaged in interstate commerce make only occasional and infrequent, though necessary, trips over the South Dakota highways, yet they are required under the statute to pay the same amount of tax, if such trips exceed four in number, as those who may be constantly using the highways. As to those engaged in interstate commerce, the act must be held to be unconstitutional. Interstate Transit, Inc., v. Lindsey, 283 U. S. 183, 51 S. Ct. 380, 75 L. Ed. 953; Sprout v. South Bend, 277 U. S. 163, 48 S. Ct. 502, 72 L. Ed. 833, 62 A. L. R. 45.

As to intrastate commerce, a wider latitude of classification rests with the Legislature. The state may tax the privilege of doing an intrastate business, regardless of whether the charge imposed fairly represents compensation for the use of the highways. It has already been pointed out that a classification graded for purpose of license fee or excise tax, according to horse power of the motors, according to the value of the vehicle, according to the size, weight, capacity, or load or seating capacity, where the tax is not a burden on interstate commerce, will...