Reserve Min. Co. v. State
| Decision Date | 25 September 1981 |
| Docket Number | No. 50957.,50957. |
| Citation | 310 NW 2d 487 |
| Parties | RESERVE MINING COMPANY, Respondent, v. STATE of Minnesota and Arthur C. Roemer, Commissioner of Revenue, Appellants. |
| Court | Minnesota Supreme Court |
Warren Spannaus, Atty. Gen., C. H. Luther, Deputy Atty. Gen., and Paul R. Kempainen, Sp. Asst. Atty. Gen., Dept. of Revenue, St. Paul, for appellants.
Hanft, Fride, O'Brien & Harries, Edward T. Fride, Raymond L. Erickson and Paul J. Lokken, Duluth, for respondent.
Heard, considered, and decided by the court en banc.
The State of Minnesota appeals a judgment of the Lake County District Court holding the Minnesota taconite tailings tax, Minn.Stat. § 298.24, subd. 2 (1980) unconstitutional as a bill of attainder in violation of U.S.Const. art. I, § 10, cl. 1 and Minn.Const. art. I, § 11, as a violation of the separation of powers doctrine under U.S.Const. art. I, § 1, art. II and art. III, § 1, and Minn.Const. art. III, and as an impairment of contract barred by U.S.Const. art. I, § 10, cl. 1, and Minn.Const. art. I, § 11. Additionally, the district court found the tailings tax to be an excise tax subject to the limitations on the taxation of taconite production imposed by Minn.Stat. § 298.40, subd. 1 (1980) and by Minn.Const. art. X, § 6. We affirm in part and reverse in part.
The Minnesota legislature in 1963 and the people of the State of Minnesota in 1964 approved legislation which became known as the taconite amendment, art. X, § 6 of the Minnesota Constitution. Reserve Mining Company (Reserve) proceeded under the amendment to construct taconite facilities in the state with a capital investment exceeding $350 million and over 3,300 employees. Reserve's discharge of taconite tailings into Lake Superior has been the subject of extensive litigation in federal and state courts.
The instant case involves a challenge to the taconite tailings tax enacted by the Minnesota legislature, effective after June 30, 1977. Act of June 2, 1977, ch. 423, art. X, § 32, 1977 Minn.Laws 1009, 1081. On the effective date of the act, Reserve brought this action for declaratory judgment. Reserve sought a declaration that the tailings tax was unconstitutional, as well as a declaration that the tailings tax was subject to the limitations of the taconite amendment. The text of Minn.Stat. § 298.24, subd. 2 (1980), which imposes the tax reads:
Reserve has been the only mining company to incur tax liability under its provisions because it is the only company that did not deposit its tailings on land in accord with state permits. Reserve paid a tailings tax of $89,235.78 for 1977 and $1,958,120 for 1978. The tax payment for 1979 has been postponed by stipulation, pending the outcome of this appeal.
The issues to be considered on appeal are:
B. Is the tailings tax subject to the limitation on taxation under Minn.Stat. § 298.40, and, if so, did the combined taxes subject to that limitation exceed that limitation?
The scope of our review of the decision below is clear. We will not disturb the findings of the trial court unless they are clearly erroneous, either without substantial evidentiary support or induced by an erroneous view of the law. Pettibone Minnesota Corp. v. Castle, 311 Minn. 513, 247 N.W.2d 52 (1976).
Reserve challenges the constitutionality of the tailings tax statute on the ground that it is a bill of attainder, a violation of the separation of powers doctrine and an impairment of contract.1
The trial court found that the taconite tailings tax statute was a bill of attainder in violation of U.S.Const. art. I, § 10, cl. 1 and Minn.Const. art. I, § 11 because it sought to punish Reserve for depositing tailings in Lake Superior and to recoup the state's litigation costs from several law suits and expenses for filtration of Lake Superior water. A bill of attainder, as defined in Nixon v. Administrator of General Services, 433 U.S. 425, 468, 97 S.Ct. 2777, 2802, 53 L.Ed.2d 867 (1977), is "a law that legislatively determines guilt and inflicts punishment upon an identifiable individual without provision of the protections of a judicial trial." A statute is a bill of attainder when it specifically singles out an identifiable group or individual for the infliction of punishment by other than judicial authority. The historical experience with laws similar to the statute in question, the function of the statute in imposing burdens without reasonable and appropriate legislative purpose, and the legislative intent to punish are all indications of an attainted law. Id. at 469-78, 97 S.Ct. at 2803-2808. See also United States v. Lovett, 328 U.S. 303, 316, 66 S.Ct. 1073, 1079, 90 L.Ed. 1252 (1946). Other factors to be considered are the pronouncement of punishment by the legislature, Nixon, 433 U.S. at 476-80, 97 S.Ct. at 2807-2809, and the ability of the identifiable individual or group to escape from the punishment, United States v. Brown, 381 U.S. 437, 85 S.Ct. 1707, 14 L.Ed.2d 484 (1965).
Reserve argues that, because it is the only taxpayer affected by the statute and because the estimates of the amount of revenue that would be raised by the tax were based solely on Reserve's estimated production, the statute "names" it with specificity in violation of the bill of attainder clause. The state responds that, though Reserve is the only taxpayer now, the statute applies to all taconite companies which produce tailings which are not deposited either in any body of water or on land not in accord with state permits. The appellant in Nixon also argued that he was singled out for punitive treatment. The court rejected his argument, saying that naming Nixon by name in the Act does not automatically offend the clause. Furthermore, the court held that "appellant constituted a legitimate class of one, and this provides a basis for Congress' decision to proceed with dispatch with respect to his materials * *." Nixon, 433 U.S. at 472, 97 S.Ct. at 2805. Additionally, the Nixon court rejected the idea that a bill of attainder exists whenever a group or individual is compelled by law to bear burdens the individual or group dislikes. Id. at 470, 97 S.Ct. at 2803. See also United States v. Lovett, 328 U.S. at 324, 66 S.Ct. at 1083. The fact that Reserve is the only member of the class does not make the tailings tax statute a bill of attainder. The statute could logically be applied to other tailings producers not operating in compliance with Minn.Stat. § 298.24, subd. 2.
Starkweather, 245 Minn. at 380, 71 N.W.2d at 876.
The Supreme Court of the United States has permitted inquiry into legislative motive for the limited purpose of determining "whether the statutes under review were punitive in nature." United States v. O'Brien, 391 U.S. 367, 383-84, n. 30, 88 S.Ct. 1673, 1682-1683, 20 L.Ed.2d 672 (1968). That court has found certain evidence to be appropriate in establishing legislative intent generally. Official journals and reports of the legislature may be consulted. Nixon, 433 U.S. at 478, 97 S.Ct. at 2808; Commissioner of Internal Revenue v. Acker, 361 U.S. 87, 80 S.Ct. 144, 4 L.Ed.2d 127 (1959). The sponsors of a bill, the floor manager, committee chairmen, or other members of the legislature who are knowledgeable may be called as witnesses, but caution should be exercised in calling opponents to the bill, since they tend to overstate its reach in their zeal to defeat it. NLRB v. Fruit and Vegetable Packers Local 760, 377 U.S. 58, 66, 84 S.Ct. 1063, 1068, 12 L.Ed.2d 129 (1963). One or two witnesses are generally...
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