Standard Dredging Corporation v. Murphy International Elevating Co v. Same

Decision Date24 May 1943
Docket NumberNos. 722 and 723,s. 722 and 723
Citation319 U.S. 306,87 L.Ed. 1416,63 S.Ct. 1067
PartiesSTANDARD DREDGING CORPORATION v. MURPHY, Acting Industrial Commissioner of State of New York. INTERNATIONAL ELEVATING CO. v. SAME
CourtU.S. Supreme Court

Mr. Cletus Keating, of New York City, for appellant Standard Dredging Corporation.

Mr. Robert B. Lisle, of Brooklyn, for appellant International Elevating Co.

Mr. Orrin G. Judd, of New York City, for appellee.

Mr. Justice BLACK delivered the opinion of the Court.

The issue in these cases is whether the New York Unemployment Insurance tax may be collected from employers of certain employees engaged in maritime employment on the wages of those employees. The New York Act, Labor Law, Consol.Laws, c. 31, § 500 et seq., levies a payroll tax on all employers of four or more persons, with exceptions not here material, and the sum thus collected is paid into a general fund for the benefit of all unemployed persons covered.1 The employee in 722 is an assistant cook on a dredge, and the employee in 723 is a grain worker on a floating elevator. The vessels on which both employees served were engaged primarily on work in the waters of the state of New York during the tax period. The appellants challenge the validity of the statute as applied on two grounds: (1) imposition of the tax on maritime employees violates Article 3, § 2, of the Constitution, which gives federal courts exclusive admiralty jurisdiction; (2) Congress has declared either expressly or by implication that no such tax shall be imposed on maritime employers. No other questions of jurisdiction to tax are before us. The New York Court of Appeals overruled both these contentions2 and the cases are here on appeal under § 237(a) of the Judicial Code, 28 U.S.C.A. § 344(a).

In approaching this problem, we may put aside two questions at the beginning. It is contended that these two employees are not 'members of a crew' and hence are outside the scope both of admiralty jurisdiction and of the relevant statutes.3 In the view we take, it is immaterial whether or not the employees are crew members. We also need not consider whether these taxes affect interstate or foreign commerce, since Congress has expressly provided that a state shall not be prohibited from levying the tax because the employer is engaged in interstate or foreign commerce, 26 U.S.C. § 1600, 26 U.S.C.A. Int.Rev.Code, § 1600. Perkins v. Commonwealth of Pennsylvania, 314 U.S. 586, 62 S.Ct. 484, 86 L.Ed. 473. The added contention that a vessel's federal license may bar state taxation is only another form of the argument that the tax burdens interstate commerce,4 and need not be considered separately.

That the state is vested with power to impose taxes in general upon employers to alleviate unemployment, and that the authority of the state is in no wise impaired by reason of blending the imposition of a tax with the relief of unemployment has already been decided by this Court. Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 57 S.Ct. 868, 81 L.Ed. 1245, 109 A.L.R. 1327; Steward Mach. Co. v. Davis, 301 U.S. 548, 57 S.Ct. 883, 81 L.Ed. 1279, 109 A.L.R. 1293. In a series of cases, however, beginning with Southern Pac. Co. v. Jensen, 244 U.S. 205, 37 S.Ct. 524, 61 L.Ed. 1086, L.R.A.,1918C, 451, Ann.Cas.1917E, 900, this Court called attention to the necessity of uniformity in certain aspects of maritime law, and invalidated several state workmen's compensation acts as applied on the ground that their enforcement would interfere with that essential uniformity. We are now asked to apply the Jensen doctrine to the field of unemployment insurance and to invalidate the statute before us on the ground that it is destructive of admiralty uniformity. The effect on admiralty of an unemployment insurance program is so markedly different from the effect which it was feared might follow from workmen's compensation legislation that we find no reason to expand the Jensen doctrine into this new area. Indeed, the Jensen case has already been severely limited, 5 and has no vitality beyond that which may continue as to state workmen's compensation laws. Cf. Parker v. Motor Boat Sales, 314 U.S. 244, 62 S.Ct. 221, 86 L.Ed. 184.

Granting that the federal government might choose to operate its own uniform unemployment insurance system for maritime workers if it chose,6 'Uniformity is required only when the essential features of an exclusive federal jurisdiction are involved.' Just v. Chambers, 312 U.S. 383, 392, 668, 61 S.Ct. 687, 693, 85 L.Ed. 903. When state compensation laws began to provide a remedy for maritime torts, it was at least arguable that the state remedy interfered with the existing admiralty system of relief through actions such as maintenance and cure. But in dealing with unemployment in- surance 'exclusive federal jurisdiction' is not affected at all. Congress retains the power to act in the field, and in the meantime, federal courts have nothing to do with it. No principle of admiralty requires uniformity of State taxation. Taxes on vessels and other business activities of operators have previously been upheld. 7 We hold that nothing in Article 3, § 2 of the Constitution places this tax beyond the authority of the State.

The second contention is that the federal Act precludes coverage of these employers by the state. Title 9 of the Federal Social Security Act, Federal Unemployment Tax Act, 26 U.S.C. §§ 1600—11, 26 U.S.C.A. Int.Rev.Code, §§ 1600—1611, taxes employers of eight or more employees but provides for a 90% credit against this federal tax for payments made into a state unemployment fund approved by the federal government. 26 U.S.C. § 1607, 26 U.S.C.A. Int.Rev.Code, § 1607, exempts from this federal tax certain types of employers of persons including those employed 'as an officer or member of the crew of a vessel on the navigable waters of the United States.' We do not believe that the exemption of these employers from the federal Act can operate to exempt them from state unemployment insurance taxes. The federal Act, from the nature of its ninety per cent credit device, is obviously an invitation to the states to enter the field of unemployment insurance, Buckstaff Bath House Co. v. McKinley, 308 U.S. 358, 363, 60 S.Ct. 279, 281, 84 L.Ed. 322, but the absence of an invitation as to employers of maritime workers is not to be construed as a barrier to state action. These employers appear to have been exempted from the federal Act because of certain administrative difficulties involved in their coverage, and because of some doubt that states could, under the Jensen line of cases, constitutionally enter this field;8 but we are pointed to nothing in the legislative history of the Act which indicates that Congress meant to forbid a state from risking the possible constitutional barriers to state coverage, and undertaking the...

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