Amicus Curiae Brief — California ex rel. McColgan v. Bruce

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SUBJECT INDEX

Brief of Amici Curiae

TABLE OF CITATIONS

Broderick v. Rosner, 294 U. S. 629, 641

Massachusetts v. Missouri, 308 U. S. 1

268

Moore v. Mitchell, 281 U. S. 18, 24

United States v. Carver, 260 U. S. 482, 490

CLAP OMRIS i ee cared ce Micat =: G

In the

Supreme Court of the United States

OCTOBER TERM 1942

RECORD No. 413

PEOPLE OF THE STATE OF CALIFORNIA,

ON THE RELATION OF CHARLES J. Mc-

COLGAN, AS STATE FRANCHISE TAX

COMMISSIONER, PETITIONER

vs.

JOHN HOWARD BRUCE, RESPONDENT

BRIEF OF THE STATES OF MICHIGAN, MARYLAND, MAINE,

KANSAS, NEBRASKA, OHIO, IOWA, CONNECTICUT, VIRGINIA,

NEW HAMPSHIRE, INDIANA, IDAHO, LOUISIANA, FLORDIA,

MISSISSIPPI, VERMONT, NEW MEXICO AND COLORADO,

AMICI CURIAE, IN SUPPORT OF PETITION FOR

REHEARING OF ORDER DENYING PETITION

FOR WRIT OF CERTIORARI.

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BRIEF OF AMICI CURIAE

This brief of amici curiae is in support of a petition

for rehearing in the above entitled matter of the order

of this court issued November 9, 1942, denying a peti-

tion for certiorari.

This brief is submitted in the belief that several

significant and important questions of law are involved

which require final determination by this court.

An important problem in state tax administration

is that of enforcing payment from persons who have

incurred tax liability and then departed from the tax-

ing state.

In the present condition of the law, the states are

uncertain as to the remedies available and it will be of

great benefit if the matter is clarified.

In Milwaukee County v. M. E. White Co., 296 U.S.

268, this court held that a federal district court in one

state had jurisdiction to entertain a suit upon a judgment

for taxes obtained in the taxing state. But this does

not meet the problem when it is impossible to obtain a

personal judgment in the taxing state against the person

subject to tax.

In Massachusetts V. Missouri, 308 U. S. 1, this court

declined to entertain jurisdiction of an original proceed-

ing by a state against citizens of another state for the

enforcement of taxes.

However, in both Milwaukee County Vv. M. E. White

Co., supra, and Massachusetts V. Missouri, supra, this

court employed language which seems to imply that

the states may sue in federal district courts in other

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states for the enforcement of tax claims. But in the

instant case the Circuit Court of Appeals for the Ninth

Circuit has held that federal district courts do not have

jurisdiction to entertain such suits.

Unless certiorari is granted in this case, the states

will be uncertain as to their right to sue in federal

district courts situated in other states, for this court

frequently has observed that the denial of certiorari does

not import an expression of opinion upon the merits

of the case (United States v. Carver, 260 U. S. 482,

490) and the rule announced by the Ninth Circuit is not

binding upon the other circuits. Yet, it is desirable, if

possible, to avoid protracted litigation and remove the

uncertainty now existing.

Further uncertainty as to the remedies available to

the states arises from the fact that in Mi/waukee County

Vv. M. E. White Co., supra, page 272, and again in

Massachusetts V. Missouri, supra, page 20, this court has

declared that the objection that the courts in one state

will not entertain a suit to recover taxes due to another

goes not to the jurisdiction but to the merits and raises a

question which federal district courts are competent to

decide, but this court has expressly left the question

undecided in Moore v. Mitchell, 281 U.S. 18, 24, and

again in Milwaukee County Vv. M. E. White Co., 296

U. S. 268, 275. It is a matter of considerable im-

portance to the states that this question be decided.

Assuming that actions may be brought in federal

courts of one state to recover taxes due another state,

the law also is unsettled regarding in whose name such

an action may be brought. In Moore v. Mitchell, 281

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U. S. 18, this court held that a county treasurer did

not have capacity to sue for taxes in federal courts in

another state. Yet in Broderick v. Rosner, 294 U. S.

629, 641, the Superintendent of Banks of the State

of New York was held to have capacity to sue in the

courts of another state to enforce stockholders’ liability.

In Milwaukee County v. M. E. White Co., supra, a

county was permitted to sue in the federal courts of

another state on a tax judgment although that judgment

for the most part was for taxes due a state. Yet, in the

instant case, the Circuit Court of Appeals has held that

an action in the name of the People of the State of

California on the relation of the State Franchise Tax

Commissioner cannot be brought in the federal district

court of another state, despite the apparent suggestion

in Massachusetts v. Missouri that such an action could

be brought. It will be most helpful if this situation

can be clarified.

Moreover, if a state may not bring original proceed-

ings in this court to enforce payment of taxes (Massa-

chusetts V. Missouri, supra) and if the decision of the

Circuit Court of Appeals in the instant case is permitted

to stand, holding that district courts do not have juris-

diction of such actions, the effect is to deny a state any

access to the federal courts for the bringing of suits

against citizens of other states to enforce tax claims.

The question whether such a result is consistent with

the constitutional purpose in providing a federal judi-

ciary is of such fundamental importance that an expres-

sion of opinion by this court seems warranted.

The present uncertainty as to the enforcement reme-

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dies available to the states tends to promote tax evasion.

Amici curiae take this means of respectfully urging that

certiorari be granted in the instant case in order that

existing uncertainties in the field of state tax administra-

tion may be eliminated.

Respectfully submitted,

HERBERT J. RUSHTON,

Attorney General of Michigan.

WILLIAM C. WALSH,

Attorney General of Maryland.

FRANK I. Cowan,

Attorney General of Maine.

JAY S. PARKER,

Attorney General of Kansas.

WALTER R. JOHNSON,

Attorney General of Nebraska.

THOMAS J. HERBERT,

Attorney General of Ohio.

JOHN M. RANKIN,

Attorney General of Iowa.

FRANCIs A. PALLOTTI,

Attorney General of Connecticut.

ABRAM P. STAPLES,

Attorney General of Virginia.

STEPHEN M. WHEELER,

Attorney General of New Hampshire.

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GEORGE N. BEAMER,

Attorney General of Indiana.

BERT H. MILLER,

Attorney General of Idaho.

EUCENE STANLEY,

Attorney General of Louisiana.

J. ToM WATSON,

Attorney General of Florida.

GREEK L. RICE,

Attorney General of Mississippi.

ALBAN J. PARKER,

Attorney General of Vermont.

EDWARD P. CHASE,

Attorney General of New Mexico.

GAIL L. IRELAND,

Attorney General of Colorado.