Robertson v. State Liquor Control Bd.

Citation10 P.3d 1079,102 Wash.App. 848
Decision Date12 October 2000
Docket NumberNo. 18604-1-III.,18604-1-III.
CourtCourt of Appeals of Washington
PartiesEddie L. ROBERTSON, Appellant, v. STATE of Washington LIQUOR CONTROL BOARD, as Agent of Department of Revenue, Respondent.

Robert W. Bjur, Zillah, for Appellant.

Jerry A. Ackerman, Asst. Atty. Gen., Olympia, for Respondent.

BROWN, J.

Eddie Robertson is an interstate trucker. After a jury trial, his truck was forfeited under state law because the jury decided it had been used to transport contraband cigarettes into Washington. On appeal, Mr. Robertson argues (1) federal preemption, and (2) improper allocation of the burden of proof to him on his exemption claim. We reject both arguments and affirm.

FACTS

Eddie Robertson owns a trucking company based in Tulsa, Oklahoma, engaging in interstate commerce under a federal license. From March 1998 until November 21, 1998, Mr. Robertson personally hauled 17 loads of unstamped, untaxed cigarettes from Arizona to Washington apparently on behalf of the Yakama Indian Nation (Tribe). No one notified the Washington State Liquor Control Board (Board) pursuant to RCW 82.24.250 that Mr. Robertson was bringing unstamped and untaxed cigarettes into Washington. On November 21, Mr. Robertson's truck was lawfully seized, stopped and searched inside Washington. Mr. Robertson's trailer contained 28,900 cartons of untaxed, unstamped cigarettes. The Board seized the cigarettes and Mr. Robertson's truck pursuant to RCW 82.24.130.

Mr. Robertson unsuccessfully petitioned the Benton County Superior Court for return of his truck, alleging the Federal Aviation Administration Authorization Act of 1994, 49 U.S.C. § 14501(c) (FAAA Act), preempted Washington's cigarette forfeiture law. At a later jury trial before a different judge, Mr. Robertson objected to the court allocating the burden of proof to him in the following instruction:

The Court has found that the Liquor Control Board has established probable cause to seize the truck, so the law presumes that the Liquor Control Board is lawfully in possession of the truck because at the time of the seizure it was being used to transport unstamped cigarettes in violation of Washington law.
The claimant seeks an order of the court awarding the truck to him. In order to recover on his claim, claimant must prove by a preponderance of the evidence:

1) That he was not a consenting party; and 2) That he was not privy to transporting unstamped cigarettes in the State of Washington.

If you find from the evidence that he was a consenting party or that he was privy to transporting unstamped cigarettes in the State of Washington, your verdict should be for the Liquor Control Board.
If you find that the claimant has proven by a preponderance of the evidence that he was not a consenting party and that he was not privy to transporting unstamped cigarettes in the State of Washington, your verdict should be for the claimant.

The jury found for the Board. Mr. Robertson filed this appeal.

ANALYSIS
A. Preemption

The issue is whether the trial court erred by deciding 49 U.S.C. § 14501(c)(1) did not preempt Washington's cigarette excise tax and seizure laws, RCW 8.24.130 and RCW 8.24.250. Preemption is reviewed de novo. Hoddevik v. Arctic Alaska Fisheries, Corp., 94 Wash.App. 268, 278, 970 P.2d 828, 975 P.2d 563, review denied, 138 Wash.2d 1016, 989 P.2d 1140 (1999), cert. denied, ___ U.S. ___, 120 S.Ct. 1161, 145 L.Ed.2d 1072 (2000).

We begin by assuming state laws regarding matters historically within a state's police powers are not preempted by federal statute, absent the clear and manifest intent of Congress. Hue v. Farmboy Spray Co., 127 Wash.2d 67, 78, 896 P.2d 682 (1995). The United States Supreme Court has long recognized Washington's right to seize unapproved unstamped cigarettes in transit to Indian reservations. See Washington v. Confederated Tribes of Colville Indian Reservation, 447 U.S. 134, 161-62, 100 S.Ct. 2069, 65 L.Ed.2d 10 (1980)

. The seized cigarettes are contraband per RCW 82.24.250. Thus, our first inquiry is "whether Congress exhibited a clear and manifest intent" to have the FAAA Act preempt the statutes authorizing the seizures here. See Californians for Safe & Competitive Dump Truck Transp. v. Mendonca, 152 F.3d 1184, 1187 (9th Cir. 1998) (discussing preemptive effect of 49 U.S.C. § 14501(c)(1)).

When deciding the scope of federal preemption we must decide its reach by not implying preemption where it clearly does not exist while bearing in mind the plain wording to determine congressional intent. Hue, 127 Wash.2d at 79, 896 P.2d 682. The preemption provision of 49 U.S.C. § 14501(c)(1), partly states:

[A] State ... may not enact or enforce a law, regulation, or other provision having the force and effect of law related to a price, route, or service of any motor carrier... with respect to the transportation of property.

In enacting 49 U.S.C. § 14501(c)(1), Congress had two objectives in mind: (1) to institute "across-the-board deregulation ... to eliminate non-uniform state regulations of motor carriers which had caused `significant inefficiencies, increased costs, reduction of competition, inhibition of innovation and technology, and curtail[ed] the expansion of markets;'" and (2) to "`even the playing field' between air carriers and motor carriers." Californians for Safe & Competitive Dump Truck Transp., 152 F.3d at 1187 (quoting H.R. Conf. Rep. No. 103-677, at 85-88 (1994), reprinted in 1994 U.S.C.C.A.N. 1715, 1757-60). Thus, Congress did not enact 49 U.S.C. § 14501(c)(1) to affect a state's traditional right to prevent circumvention of its cigarette tax laws. See California Div. of Labor Standards Enforcement v. Dillingham Constr., N.A., Inc., 519 U.S. 316, 331, 117 S.Ct. 832, 136 L.Ed.2d 791 (1997)

(noting lack of indication Congress intended ERISA to preempt state apprenticeship training standards or state prevailing wage laws).

The operative phrase in the preemption clause of 49 U.S.C. § 14501(c)(1) is "related to." Deerskin Trading Post, Inc. v. United Parcel Serv. of America, Inc., 972 F.Supp. 665, 668 (N.D.Ga.1997). A broad preemptive purpose is expressed. Deerskin Trading Post, 972 F.Supp. at 668. But the "related to" phrase must not be read too literally. Dillingham, 519 U.S. at 335,117 S.Ct. 832 (Scalia, J. concurring). Rather, the "related to" language merely guides the reviewing court in identifying the field of law the preemption provision applies to. Id. at 336, 117 S.Ct. 832. Thus, the focus is range or scope.

Moreover, for the "related to" language to apply, the challenged state action must not affect the concerned industry in "too tenuous, remote, or peripheral a manner' to have preemptive effect." Californians for Safe & Competitive Dump Truck Transp., 152 F.3d at 1188 (quoting Morales v. Trans World Airlines, 504 U.S. 374, 390, 112 S.Ct. 2031, 119 L.Ed.2d 157 (1992)). The FAAA Act preempts state action "to the extent that it impose[s] its substantive standards on the prices, routes, or services of the affected carrier. Id. at 1188 (citing American Airlines, Inc. v. Wolens, 513 U.S. 219, 232, 115 S.Ct. 817, 130 L.Ed.2d 715 (1995)). Thus, the FAAA Act's preemption provision will not apply when a state statute's "effect is no more than indirect, remote, and tenuous." Id. at 1189 (citing Dillingham, 519 U.S. at 334, 117 S.Ct. 832).

Clearly the instant preemption claim is not based upon the "price" Mr. Robertson charged or the "route" he took. Mr. Robertson's argument is directed solely to state interference with the "service" he provided. Thus, the determinative question is whether Washington's cigarette excise tax laws "related to" the "service" that Mr. Robertson provided, transportation of cigarettes considered contraband under valid state law. Clearly, Congress did not intend to preempt this field of law.

Here, Mr. Robertson ran afoul of RCW 82.24. RCW 82.24.250, which prohibits transportation of contraband cigarettes in Washington, partly provides:

(1) No person other than: (a) A licensed wholesaler in the wholesaler's own vehicle; or (b) a person who has given notice to the board in advance of the commencement of transportation shall transport or cause to be transported in this state cigarettes not having the stamps affixed to the packages or containers.
(2) When transporting unstamped cigarettes, such persons shall have in their actual possession or cause to have in the actual possession of those persons transporting such cigarettes on their behalf invoices or delivery tickets for such cigarettes, which shall show the true name and address of the consigner or seller, the true name and address of the consignee or purchaser, and the quantity and brands of the cigarettes so transported.
....
(4) In the absence of the notice of transportation required by this section or in the absence of such invoices or delivery tickets, or, if the name or address of the consignee or purchaser is falsified or if the purchaser or consignee is not a person authorized by chapter 82.24 RCW to possess unstamped cigarettes, the cigarettes so transported shall be deemed contraband subject to seizure and sale under the provisions of RCW 82.24.130.
....
(7) For purposes of this section, the term "person authorized by chapter 82.24 RCW to possess unstamped cigarettes" means:
(a) A wholesaler or retailer, licensed under Washington state law;
....
(c) Any person, including an Indian tribal organization, who, after notice has been given to the board as provided in this section, brings or causes to be brought into the state unstamped cigarettes, if within a period of time after receipt of the cigarettes as the department determines by rule to be reasonably necessary for the purpose the person has caused stamps to be affixed in accordance with RCW 82.24.030 or otherwise made payment of the tax required by this chapter in the manner set forth in rules adopted by the department.

Here, the Board seized Mr....

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