Auto Cargo, Inc. v. Miami Dade County

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FILED

FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

________________________ JAN 08 2001

THOMAS K. KAHN

No. 99-12176 CLERK

________________________

D. C. Docket No. 96-02138-CIV-ASG

AUTO CARGO, INC.,

Plaintiff-Appellant,

versus

MIAMI DADE COUNTY,

Defendant-Appellee.

________________________

Appeal from the United States District Court

for the Southern District of Florida

_________________________

(January 8, 2001)

Before BARKETT and WILSON, Circuit Judges, and DOWD*, District Judge.

BARKETT, Circuit Judge:

*

Honorable David D. Dowd, U.S. District Judge for the Northern District of Ohio, sitting

by designation.

Auto Cargo, Inc. (“Auto Cargo”) appeals from summary judgment in favor

of Miami Dade County (“Dade County”) in this action brought on behalf of a class

of all persons and entities required to pay to Dade County $7.50 for every used,

self-propelled vehicle exported through the U.S. Customs vehicle inspection

facility at the Port of Miami (the “Port”). The question presented is whether the

required payment is prohibited by the Import-Export Clause of the U.S.

Constitution. We affirm, finding that it does not violate the Import-Export Clause.

BACKGROUND

Dade County, which operates the Port, allowed the U.S. Customs Service to

place a trailer rent-free on property set aside by the Port to serve as a vehicle

inspection facility. The purpose of the facility is to inspect and process, in

accordance with federal regulations, 19 C.F.R. §§ 192 et seq. (2000), vehicles

presented for export as well as to prevent the export of stolen used cars.1 In 1994,

in order to recoup its costs for the establishment of the inspection facility, the Port

introduced a five dollar “vehicle export fee” on each used, self-propelled vehicle

for which export authorization was sought. In 1995, Dade County passed County

Ordinance 95-200 (the “1995 Ordinance”), increasing the fee to $7.50 and

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The 1992 amendments to the Tariff Act of 1930 authorize the Commissioner of

Customs to “establish specific criteria for randomly selecting used automobiles scheduled to be

exported, consistent with the risk of stolen automobiles being exported. . . .” 19 U.S.C. § 1646c.

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earmarking the additional $2.50 to the Dade County Multi-Agency Auto Theft

Task Force. The Task Force is comprised of representatives from city and county

police departments, Customs, and the FBI, and it conducts investigations into

organized groups of auto thieves. These investigations focus on South Florida but

can be national and international in scope. The Task Force has its main office in

the Miami Dade Police headquarters in Miami, but it has a satellite office in the

vehicle inspection facility, and six of its employees work there full-time inspecting

cargo containers. The Task Force devotes much of its work to reducing the flow of

stolen vehicles through the Port.

Auto Cargo is a Florida company that exports used, self-propelled vehicles

(mostly automobiles) and acts as an agent to the vehicle owners to secure clearance

for export through Customs. Auto Cargo sued the County on behalf of a class

consisting of “[a]ll persons and entities who have been required to pay . . . an

export Duty, tax or fee upon used, self-propelled vehicles . . . in order to gain

access to the U.S. Customs Vehicle Inspection Facility at the Port of Miami,”

arguing that the inspection fee, although disguised as a user fee, is really a means

to raise revenue for the County and constitutes an improper tax violating the

Import-Export Clause of the U.S. Constitution. The district court certified the class

and, after discovery, both sides moved for summary judgment. The district court

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granted summary judgment to Dade County, finding that the inspection fee is not

discriminatory under the Import-Export Clause.

On appeal, Auto Cargo contends that the district court erroneously resolved

disputed issues of material fact in favor of Dade County and that the district court

misapplied controlling law in determining that the required payment was not

discriminatory in its application. We review de novo a district court’s grant of

summary judgment, applying the same legal standards as the district court. See

Whatley v. CNA Ins. Cos., 189 F.3d 1310, 1313 (11th Cir. 1999). Summary

judgment is appropriate if the evidence before the court shows that “there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.” Fed. R. Civ. P. 56(c).

DISCUSSION

Preliminarily, we reject, as inconsistent with its position before the district

court, Auto Cargo’s contention that the district court erroneously resolved disputed

issues of material fact. In its reply to Dade County’s memorandum in opposition

to Auto Cargo’s motion for summary judgment, Auto Cargo noted that “[b]oth

parties have taken the position that there are no material questions of fact which

would prevent the granting of summary judgment.”

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The issue presented in this case is whether the inspection fee violates the

Import-Export Clause of the U.S. Constitution.2 The Import-Export Clause

provides:

No State shall, without the Consent of the Congress, lay any Imposts

or Duties on Imports or Exports, except what may be absolutely

necessary for executing its inspection Laws: and the net Produce of all

Duties and Imposts, laid by any State on Imports or Exports, shall be

for the Use of the Treasury of the United States; and all such Laws

shall be subject to the Revision and Controul of the Congress.

U.S. Const. art. I, § 10, cl. 2. Although duties and imposts are indisputably taxes,

the Supreme Court has interpreted the Import-Export Clause to permit states to

impose “generally applicable, nondiscriminatory taxes even if those taxes fall on

imports or exports.” United States v. Int’l Bus. Mach. Corp., 517 U.S. 843, 852

(1996) (citing Department of Revenue of Washington v. Ass’n of Washington

Stevedoring Cos., 435 U.S. 734 (1978); Michelin Tire Corp. v. W.L. Wages, 423

U.S. 276 (1976)).

2

Count I of the complaint alleges that the inspection fee “is an unlawful tax or Duty,

prohibited by” the Import-Export Clause. Count II of the complaint alleges that the inspection

fee “unlawfully discriminates against exports in violation of” the Import-Export Clause. In its

Memorandum of Law in support of its motion for summary judgment, Auto Cargo again stated,

“The complaint alleges that [the inspection fee] is violative of the Constitution of the United

States, Article I, Section 10, Clause 2, the Import-Export Clause. . . .” In a joint pretrial

statement, the parties agreed that the only issues of law for determination by the district court

involved the question of whether the inspection fee violates the Import-Export Clause.

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Before Michelin, assessment of the validity of a state exaction under the

Import-Export Clause turned on the question of whether or not the goods retained

their status as imports or exports at the time of the exaction. Low v. Austin, 80

U.S. 29, 20 L.Ed. 517 (1872). Thus a state could not tax goods destined for export

once they entered the “export stream,” and it could not tax an imported item so

long as that item remained in its “original package.” Washington Stevedoring, 435

U.S. at 758. Michelin overruled cases that stressed the nature of the goods as

imports or exports and instead focused on the nature of the exaction at issue.

Michelin, 423 U.S. at 279. The Michelin Court determined that the question of a

violation of the Import-Export Clause turns on whether the exaction in question

was “the type of state exaction which the Framers of the Constitution . . . had in

mind as being an ‘impost’ or ‘duty’ . . . .” Id. at 283. According to Michelin, an

exaction is valid unless it interferes with the three policies concerns that motivated

the Framers in adopting the Import-Export Clause: 1) maintaining federal

uniformity in foreign commercial relations; 2) preventing the diversion to the states

revenue generated by imported goods; and 3) maintaining harmony among the

states by preventing states from taxing goods flowing through seaboard states’

ports to (or from) other states. Michelin, 423 U.S. at 285-86.

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Michelin involved a challenge to a Georgia state ad valorem property tax

assessed against tires that Michelin imported from France and included in an

inventory maintained at its wholesale warehouse. The Georgia Supreme Court had

rejected Michelin’s appeal on the ground that the tires, now stored in a warehouse,

had lost their status as imports. Id. at 279. Finding that a nondiscriminatory ad

valorem property tax on goods no longer in transit did not in any way compromise

the policy concerns underlying the Import-Export Clause, the Supreme Court

upheld the validity of the Georgia tax. Id. at 286.

Auto Cargo argues that, because the facts of this case differ from those

before the Supreme Court in Michelin, Michelin is inapplicable here. Although the

facts in this case are different, the framework established in Michelin for assessing

the constitutionality of an exaction under the Import-Export Clause is clearly a

general one and not restricted simply to the facts under consideration in that case.

Since Michelin, courts assessing the validity of state exactions on either imports or

exports under the Import-Export Clause have relied exclusively on Michelin’s

analysis. See, e.g., R.J. Reynolds Tobacco Co. v. Durham County, North Carolina,

479 U.S. 130, 152-55 (1986) (upholding the validity under the Import-Export

Clause of North Carolina’s ad valorem tax on imported tobacco); Limbach v.

Hoover & Allison Co., 466 U.S. 353 (1986) (upholding the constitutionality of an

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Ohio ad valorem personal property tax on imported fibers still in their original

packages); Itel Containers Int’l Corp. v. Huddleston, 507 U.S. 60, 76-78

(upholding Tennessee’s imposition of sales tax on the lease of cargo containers

within the state for use in international shipping); Louisiana Land & Exploration

Co. v. Pilot Petroleum Corp., 900 F.2d 816, 819-821 (5th Cir. 1990) (applying the

Michelin policy analysis and striking down a direct state tax on jet fuel sold for

export as violative of the Import-Export Clause). In Washington Stevedoring, the

Supreme Court made clear that the Michelin analysis applies to cases involving

exports as well as imports. See 435 U.S. at 753-58 (finding that a state tax on

stevedoring activities did not disturb the three policies protected by the Import-

Export Clause). Accordingly, we analyze the inspection fee to determine whether

its effects undermine the three policy concerns identified by the Michelin Court.

First, the inspection fee can have no possible effect on foreign commercial

relations, as it applies only to business conducted at the Port and imposes no

burdens on foreign businesses. See Washington Stevedoring, 435 U.S. at 754

(finding no effect on commercial regulation where challenged tax affects only

business conducted within Washington State and where no foreign businesses or

vessels are taxed). Far from disrupting federal uniformity in foreign commercial

relations, the inspection fee is imposed in order to offset the costs to Dade County

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of effectuating federal regulations aimed at reducing the export of stolen vehicles.

See 19 C.F.R. § 192 et seq. (2000) (regulating exportation of used self-propelled

vehicles, vessels, and aircraft).

Second, the inspection fee “deprive[s] the Federal Government of no

revenues to which it was entitled. The exaction merely pa[ys] for services . . .

supplied by the local government.” See Washington Stevedoring, 435 U.S. at 753

(summarizing the analysis in Michelin); id. at 754 (finding that a state tax on

stevedoring companies merely compensates the state for services and protection).

Indeed, a state tax on exports could not deprive the federal government of revenue

to which it is entitled, because the Constitution’s Export Clause, which provides,

“[n]o Tax or Duty shall be laid on Articles exported from any State,” specifically

forbids federal taxation of exports. U.S. Const. art. I, § 9, cl. 5; see Washington

Stevedoring, 435 U.S. at 758 (noting that “the Constitution forbids federal taxation

of exports”).

Finally, the inspection fee does not disrupt harmony among the states so

long as there is a reasonable nexus between the person paying the fee and Dade

County, the fee is properly apportioned and nondiscriminatory, and it relates

reasonably to the services provided by Dade County. See Washington

Stevedoring, 435 U.S. at 754. As only those who use the Port are required to pay

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the inspection fee, there is a reasonable nexus between those who pay the fee and

Dade County. As Dade County installed the inspection facility in order to meet the

needs of those who use it in order to export used self-propelled vehicles through

the Port, the fee is properly apportioned and relates directly to the services

provided. Indeed, as the Supreme Court noted in R.J. Reynolds Tobacco, if the

inspection fee were not assessed, the effect would be to shift the burden from those

who use the facility supported by the fee to the local taxpayers, “a result

completely at odds with Michelin.” 479 U.S. at 154.

Auto Cargo makes no argument that the inspection fee has an adverse effect

on the policy concerns that informed the Supreme Court’s analysis in Michelin;

that is, Auto Cargo has made no showing that the fee disrupts federal uniformity in

foreign commercial relations, diverts to the states revenue generated by imported

goods, or disrupts harmony among the states by taxing goods flowing through

seaboard states’ ports to other states.

Instead, Auto Cargo broadly asserts that the inspection fee is

“discriminatory” because it applies only to used self-propelled vehicles and not to

other automobiles or to any other goods transported through the Port. If Auto

Cargo intends that this argument relates to the Import-Export Clause, it

misapprehends the meaning of the term “discriminatory” in this context. This fee

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is clearly non-discriminatory under the Import-Export Clause because it is not

imposed in a way that discriminates against interstate or foreign commerce. The

fee applies to all who use the facility at the Port, as it does not matter whether the

vehicles that the parties seek to export entered the stream of commerce in Florida

or in some other state. Accordingly, the fee does nothing to disrupt the harmony

among the states. The issue of whether the inspection fee is somehow

“discriminatory” or “unfair” in ways unrelated to the Import-Export Clause is not

before us, and the fact that the inspection fee does not apply to other goods

exported through the Port does not make it a discriminatory tax under Michelin.

Accordingly, we find that the inspection fee is not discriminatory under the Import-

Export Clause.

Finally, Auto Cargo draws on Supreme Court cases involving challenges to

taxes or user fees brought under constitutional provisions other than the Import-

Export Clause and maintains that the district court erred in relying on Michelin in

finding the inspection fee non-discriminatory. The cases Auto Cargo cites to

involve challenges under the Commerce Clause, the Export Clause, and the implied

immunity of state governments from federal taxation. Auto Cargo may or may not

have a viable claim based on these other constitutional grounds, but that is not the

claim that has been pled here.

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We reject Auto-Cargo’s arguments that draw on Evansville-Vanderburgh

Airport Auth. Dist. v. Delta Airlines, 405 U.S. 707, 716-17 (1972), and

Massachusetts v. United States, 435 U.S. 444, 464 (1978), for the simple reason

that Michelin establishes the only applicable standard for determining whether an

exaction is discriminatory under the Import-Export Clause. In Evansville-

Vandenburgh, private airlines brought a Commerce Clause challenge to a one

dollar per passenger user fee imposed on airlines by state legislatures. In

Massachusetts, the state challenged an annual registration tax as applied to state-

owned aircraft as violative of the implied immunity of state governments from

federal taxation. Neither of these cases provide any guidance for the adjudication

of challenges brought under the Import-Export Clause.

Similarly, Auto Cargo appears to argue that we should apply standards

imported from cases decided under the Export Clause. The Supreme Court has

recently remarked on the difference between the Import-Export Clause and the

Export Clause. Int’l Bus. Mach., 517 U.S. at 859 (“It is simply no longer true that

the Court perceives no substantive difference between the two Clauses.”). The two

clauses place limitations on different sovereign entities: while the Import-Export

Clause limits state exactions, the Export Clause limits Congressional action. In

addition, while the Supreme Court has interpreted the Export Clause as allowing

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“no room for any federal tax, however generally applicable or nondiscriminatory,

on goods in export transit,” United States v. United States Shoe Corp., 523 U.S.

360, 367 (1998), it has interpreted the Import-Export Clause, as permitting states to

impose nondiscriminatory taxes on imports or exports. Michelin, 423 U.S. at 290.

We find that cases decided under the Export Clause provide us with no useful

guidance in this case.

Accordingly, we cannot conclude that the district court erred in finding that

the inspection fee is not a discriminatory exaction imposed in violation of the

Import-Export Clause. Thus, the district court’s decision, granting summary

judgment to Dade County, is

AFFIRMED.

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