# Petitioners Brief — Sears, Roebuck & Co. v. County of Los Angeles

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petitioners Brief
- **Published:** January 1, 1979
- **Citation:** 442 U.S. 915

## Text

~~ Bupreme Court, U.
I FILED
IN THE NOV 15 > |
Supreme Court of the Uni OAK, IR Cl

. ‘ ‘+e ete, OOO

October Term, 1979
Ne. 78-1577

SEARS, ROEBUCK AND Co., a corporation,
Petitioner,
vs. .
COUNTY OF Los ANGELES and City oF COMPTON,

Respondents.

On Writ of Certiorari to the Court of Appeal of the
State of California, Second Appellate District.

BRIEF FOR THE PETITIONER.

FRANK M. KEESLING, Esq.,
ANDREW S. Garp, Esq.,

1600 One Wilshire Building,
Los Angeles, Calif. 90017,

Attorneys for Petitioner.

THoMAs W. HENNING, Esgq., and
LOEB AND Logs,

and

ANN XK. SMITH, Esq., and
JONES, HALL AND ARKY,

Of Counsel.

Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622

aiden

SUBJECT INDEX

Page
I SENN *sisssciscbavesistichscetisseseunindchncbolotasinrtcavaateciiinedions l
SII wacissvisledsscschmiucscunvunvessdcengjuudenemnvoracsuhibienein 2
RN SN cciinencenicscarsdbunndntaledensanennidunsvntaien 2
Constitutional Provisions and Statutes Involved ...... 2
I Or TI IE ict peiricitsen csacacacsncncoscasnsnsiasnsiane a
I Oe FI iar esactsnccnssincennnicgieestnhtceenesensee 7
IIIT ccelies-kisnnubelatiebadcieonskaussdiaiiugpleeenibeaduniennitcse 11

The Commerce Clause Permits California’s Prop-
erty Tax to Favor Foreign Commerce Over
I GID iin ci cncemesescceivosiioncesentecteeees 11

A. The California Inventory Tax Structure .. 11

B. The Constitution Permits a State to Place
Local Business at a Disadvantage ............ 1]

C. The Commerce Clause Is Directed at Pro-
hibiting Discrimination in Favor of Local
Business at the Expense of Interstate
RII oiin sauncakiorsiatateintaiectasienteniislinat 13

D. The Boston Stock Exchange Decision Is
Distinguishable From the Instant Case,
Was Misconstrued by the Lower Court,
and Supports the Validity of the Cali-
NII: icancisseseonisshchnipiteciatpeichighetdniscaansnts 14

E. The California Statute Is Consistent With
Constitutional Policies Articulated in the
IN ooo Sc cscectonsensmiecincdones 18

il.
Page
F. Federal Policy Encourages States to Favor

Foreign Commerce Over Interstate Com-
IID oaceciccssscsiictienonsionbansaaeioaaaaaen 19

The Exemption Accorded Imported Goods Did
Not Frustrate Congressional Power in Estab-
ee TT CN AD Ma ia HS Fart 21

Il
The California Statute Should Be Upheld Because
No Impermissible Effect Upon Commerce Has
MID: ROOT assis snncencesconcttascnnsaeiaaa 23

A. The Lower Court Erroneously Applied a
Per Se Test in Determining the Statute’s
CORRE . «......--.~.-ciesieenseinnnane 23

B. Respondents Failed to Establish That the
Statute Has Any Effect on Interstate
i 25

C. The Effect of the Statute, if Any, Is too
Insubstantial to Place an Undue Burden

on Interstate Commerce _......................... 27
COORD: nitisincsicniiaStelciilsiinenteaidaie spatter 29
Exhibit A. Pertinent State Statutes Involved .......... l

ili.

TABLE OF AUTHORITIES CITED

Cases : Page

Alaska v. Arctic Maid, 366 U.S. 199 (1961) ...... 8, 12
Allied Stores v. Bowers, 358 U.S. 522 (1959) ....8, 12

‘Boston Stock Exchange v. State Tax Commission,

RUPE vedenecnsnessnisieimarwdicrmanntindenseds
7 Se Dae RC 7, 8, 9, 14, 15, 16, 17, 18, 28

Brown v. Maryland, 25 U.S. (12 Wheat.) 262

NER Sinhala. alice tninuniasinesnanhiehdpeenetinissnnnscrneooutians 2
Complete Auto Transit, Inc. v. Brady, 430 U.S. 274
IN ida cicastat acing dich inivaseonhieneeshuslsiown 10, 24, 25

Department of Revenue v. Association of Washing-

ton Stevedoring Cos., 435 US. 734 (1978) ....27, 28
Dunbar-Stanley Studios, Inc. v. Alabama, 393 U.S.

INE cd indececcacinndghighianndacnsnWalieaianatboininsatinaksdy 12
First Federal Savings and Loan Association v. State
Tax Commission, 437 U.S. 255 (1978) .......... ys
Gregg Dyeing Co. v. Query, 286 U.S. 472 (1932).. 27
Guy v. Baltimore, 100 U.S. 434 (1879) -..0..200002... 13
Halliburton Oil Well Cementing Co. v. Reily, 373
Ws Ie CRIED. wccsvevcscesesscscsasaene piibceiaertiaieceebinn 13, 14
Hooven & Allison Co. v. Evatt, 324 U.S. 652
GUSTER PE SEN er av OMEN Ce Oe ASA oe 3
I.M. Darnell & Son v. Memphis, 208 U.S. 113
RRR i ha crea tahenks Chcpasibelinas ice 14

Japan Line, Ltd. v. County of Los Angeles, ........
Se 60 1.2.26 336 (1979) ............ 8, 18. 19

iv.

Page
Low v. Austin, 80 U.S. (13 Wall.) 29 (1872) ....
MELEE TEAS RAE VER RETRY TR ETE ee 3, 4, 6
May v. New Orleans, 178 U.S. 496 (1900) ...... 3
‘Metropolitan Casualty Ins. Co. v. Brownell, 294
RN I osc cidiwnsneeracenenmbanensdivophseislalenmee 25
Michelin Tire Com. v. Wages, 423 U.S. 276
RITE ebcbncpdtchovshcanaadinscannesien 6, 8, 18, 19, 26, 27, 28
Moorman Mfg. Co. v. Bair, 437 U.S. 267 (1978)
cis cai iiodjadinncdiankeaestswacieabaiaaaniatuoeysseas 10, / 12, 43,23
Nippert v. Richmond, 327 U.S. 416 (1946) . » ae
Spector Motor Service, Inc. v. O'Connor, 340 U.S.
RN TD Sc cidiicaNiceetinsuibadipbuaciinenesencekinihsiediaiaha 24
Volkswagen Pacific, Inc. v. City of Los Angeles,

7 Cal.3d 48, 496 P.2d 1237 (1972) .....0022....... ae
Welton v. Missouri, 91 U.S. 275 (1875) -200....ce... 14
Miscellaneous

California Assembly Bill 66, + ae 1150, Sec. 7
TP nicks cisaaeiailaacana lcd cienintitasiiistinesesionses men 5

House of Representatives Report 91-601, 91st
RM, EOE TOME, BO COP) vc ccciccesckpeseversorceperasaccs 20

Regulations

Code of Federal Regulations, Title 26, Sec. 154.2-1
Sd Rae Rr CSRS CST SR ee rie Ge Lee ae Aa 20

Code of Federal Regulations, Title 26, Sec. 154.2-1
” HEpe NENG Eee Wer ves WEEN tren | ESE a pve me SSMS? SOR BRPL 20

Rules

Rules of the United States Supreme Court, Rule 36... 1

v.

Statutes Page
California Constitution, Art. XII, Sec. 1 -................. 11
California Revenue and Taxation Code, Sec. 201 .... 11

California Revenue and Taxation Code, Sec. 219 ....

California Revenue and Taxation Code, Sec. 225
3, 5, 6, 7, 8, 9, 10, 11, 13, 14, 17, 18, 19, 20, 26, 28

California Revenue and Taxation Code, Sec. 401.3.. 11

Internal Revenue Code, Sec. 4271 ...................ccceseeee 8
Internal Revenue Code, Sec. 4272 ....................2.... 8
Internal Revenue Code, Sec. 4272(a) ..........22..22.....- 20
PUREE Ee FU DE ace nccceisecicae eee 20
United States Code, Title 28, Sec. 1257(3) ............ 2
United States Constitution, Fourteenth Amendment
ss: Soci Supseaeleinnk abode epeda as dis biedincdaiains alee eam daa 12
United States Constitution, Fourteenth Amendment
BRR B eacoievcaececisps<sdicveiiamseanabinecbndeaeeae eb 2
United States Constitution, Art. I, Sec. 8, Clause 3
NCTM Nes Ne ikl ME RRNA AUN s A MOLES 2
United States Constitution, Art. I, Sec. 10, Clause 2
aks sabes pasondbisnsbesinennsiatdatecea abun sdiiaidtanani al nascent ame 2
Textbook

Keesling, Michelin Tire Corporation v. Wages: The
Demise of the Original Package Doctrine, 50
Se. Col. 1. Bers TED, TES CET eases tccincecnnniccsss 26

Maltz, The Burger Court, The Commerce Clause,
and the Problem of Differential! Treatment. 54
Bd CS. BRR: BGT CRO. ewnidicrnien es 15

IN THE

Supreme Court of the United States

October Term, 1979
No. 78-1577

SEARS, ROEBUCK AND Co., a corporation,
Petitioner,

vs.

COUNTY OF Los ANGELES and CiTy OF COMPTON,
Respondents.

On Writ of Certiorari to the Court of Appeal of the
State of California, Second Appellate District.

BRIEF FOR THE PETITIONER.

Opinions Below.

The order of the trial court is not officially reported.
The opinion of the Court of Appeal (Pet. App. 1-
29)' is reported at 85 Cal.App.3d 763, 149 Cal.Rptr.
750 (1978). The denial by the Supreme Court of
California of a petition for hearing (Pet. 2) is reported
at 149 Cal.Rptr. 764 (1979).

1The Appendix attached to the Petition for Certiorari shall
be referred to as “Pet. App.” followed by the appropriate
page numbers. The separate Appendix required by Rule 36
shall be referred to as “A.” followed by page numbers. The
Petition for Certiorari shall be referred to as “Pet.” followed

by page numbers.

pres, ‘aes
Jurisdiction.

The decision of the Court of Appeal was filed on
October 25, 1978 (Pet. 2; Pet. App. 1). The Supreme
Court of California denied a petition for hearing on
January 17, 1979 (Pet: 2). The petition for a writ
of certiorari was filed on April 16, 1979. The petition
was granted on October 1, 1979. The jurisdiction of
this Court is invoked under 28 U.S.C. § 1257(3).

Question Presented.

Does a California statute exempting from its property
tax certain goods manufactured or produced outside
the United States and imported into California for
shipment outside the state violate the Commerce Clause
of the United States Constitution?

Constitutional Provisions and Statutes Involved.

1. Article I, Section 8, Clause 3 of the United
States Constitution provides: “The Congress shall have
Power * * * To regulate Commerce with foreign

Nations, and among the several States, and with the
Indian Tribes;”

2. Article I, Section 10, Clause 2 of the United
States Constitution 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; * * *”

3. Amendment XIV to the Constitution of the
United States, Section 1, provides: “* * * No State
shall make or enforce any law which shall abridge
the privileges or immunities of citizens of the United
States; nor shall any State deprive any person of life,
liberty, or property, without due process of law; nor

po. a

deny to any person within its jurisdiction the equal
protection of the laws.”

4. California Revenue and Taxation Code, Section
225 provides: “Personal property manufactured or pro-
duced, (1) outside this state and brought into this
state for transshipment out of the United States, or
(2) outside of the United States and brought into
this state for transshipment out of this state, for sale
in the ordinary course of trade or business shall be
exempt from taxation. The exemption under this section
shall not apply to personal property in manufacturing
process or production. Such process or production shall
not include the breaking in bulk, labeling, packaging,
relabeling. or repackaging of such property.”

Statement of the Case.

The Commerce Clause challenge at issue here results
from an evolution of constitutional doctrine beginning
with Low v. Austin, 80 U.S. (13 Wall.) 29 (1872).
There the Court held that the Import-Export Clause
prohibited states from imposing an ad valorem property
tax on imported goods until they lost their status as
imports and became commingled with the mass of
property in the state. In ascertaining whether imported
goods retained their character as imports, the Court
endorsed a principle which came to be known as the
“original package doctrine.” first articulated in Brown
v. Maryland, 25 U.S. (12 Wheat.) 262 (1827). Under
this doctrine imported goods which remained the prop-
erty of the importer in his warehouse in the original
form or package in which they were imported were
immune from state taxation. May v. New Orleans,
178 U.S. 496 (1900); Hooven & Allison Co. v. Evatt,
324 U.S. 652 (1945).

a

One hundred years after Low v. Austin, the decision
of the California Supreme Court in Volkswagen Pacific,
Inc. v. City of Los Angeles, 7 Cal.3d 48, 496 P.2d
1237 (1972), triggered a series of events which led
to this case. Volkswagen held that receipts of a whole-
saler from the sale of goods imported in a shipping
container or sea van taken to the importer’s warehouse
where it was opened and the goods removed for sale
and delivery to dealers lost their immunity from a
city license tax.

The assessors of many California counties interpreted
Volkswagen as holding that a shipping container or
sea van containing imported goods constituted the origi-
nal package for the purpose of the original package
doctrine, and that upon opening such container or
sea van, the imported goods lost their immunity from
ad valorem property taxes. The assessments made by
such assessors on goods that had been considered im-
mune for over 100 years since this Court’s decision
in Low v. Austin, supra, caused consternation among
importers. See Report of the Research Department
of the Security Pacific National Bank (A. 28-49).

Prior to Volkswagen, California’s neighbor, Oregon,
and many other states had enacted statutes exempting
from their property taxes goods brought into such
states for shipment to other states, including goods
imported from foreign countries.”

From the report of the Research Department of
the Security Pacific National Bank it is also clear

*Citations to these statutes are set forth in Exhibit “A”
hereto. A Commerce Clearing House list of states with “free
port” laws and a brief analysis of the provisions thereof are
reproduced in Appendix A of Petitioner’s Reply to Response
to Petition for Writ of Certiorari.

=

that firms which imported goods in shipping containers
considered the California ad valorem tax to be a major
problem; that such firms were either changing their
operations or making plans to do so by diverting imports
to “free port” areas and by relocating part of their
facilities outside the state. Furthermore, such firms
were not expanding their facilities in California (A.
41).

Thus, as a result of the assessments made by Cali-
fornia assessors based upon their questionable interpre-
tation of the Volkswagen case, California was faced
with substantial deterioration of its import business
occasioned by the diversion of imports to other states
where partial exemption from property taxes was as-
sured by virtue of such states’ “free port” statutes.

The California legislature in 1975 enacted a free
port statute, Revenue and Taxation Code Section 225,
which provides for an exemption from property taxation
of goods purchased outside the United States and
brought into California for shipment and sale outside
the state. Section 225 also provides an exemption
for goods brought into California from other states
for shipment outside the United States, but it does not |
provide an exemption for goods produced in the state or
for goods brought into California from other states for
shipment within the United States."

8Effective January 1, 1980, business inventories will be
exempt from property taxation in California. Cal. Assem-
bly Bill 66, Ch. 1150, § 7 (1979), amending Cal. Rev. &
Tax. Code § 219. However, the 36 free port laws of states
other than California are in jeopardy, based upon Respondents’
assertion that a statute which treats interstate and foreign goods
more favorably than loca! gocds is invalid on Commerce Clause
grounds (Respondents’ Response to Petition for Writ of Cer-
tiorari, p. 5). Thus the issues raised herein are of importance
not only to Celifornia but to some 36 other states as well.

— a

Shortly after Section 225 became effective, this Court
in Michelin Tire Corp. v. Wages, 423 U.S. 276 (1976),
held that imports not in transit were no longer im-
mune from state ad valorem property taxes. The Court
overruled Low v. Austin’s prohibition on state taxation
of imports in their original packages. Although Cali-
fornia was thus free to impose an ad valorem prop-
erty tax on such imports, California’s free port law
which was enacted prior to Michelin remained in effect.

All of the facts of this case were stipulated to by
the parties, and such stipulation was adopted by the
trial court (A. 10-24).

On March 1, 1976, Petitioner was holding certain
imported goods in warehouses located in Los Angeles
County and the City of Compton. Petitioner brought
these goods into California for distribution throughout
the United States (A. 10), to be shipped as quickly
as distribution operations permitted (A. 12). The rate
of turnover averaged approximately three times per
year (A. 12).

Pursuant to Section 225, Petitioner claimed an ex-
emption for the imported goods in its warehouses on
March 1, 1976. Respondents denied Petitioner’s claim
and imposed two assessments, one in the amount of
$80,381.58 by the County of Los Angeles and the
City of Compton, and another in the amount of
$204,142.13 by the County of Los Angeles. Petitioner
paid the assessments under protest and after exhaust-

ing its administrative remedies filed suit for refund
(A. 12).

At trial, Respondents urged that the property tax
exemption of Section 225 applied only to imported
goods in transit and not to goods (such as those in

—

question here) held in warehouses while awaiting ship-
ment to other states. Respondents also asserted that
Section 225 violated the Commerce Clause of the United
States Constitution. The trial court held for Petitioner
on both issues and granted Petitioner the refund sought,
entering judgment in the amount of the two assessments
plus interest (A. 52-54).

The California Court of Appeal rejected Respondents’
interpretation of Section 225, but held for Respondents
on the ground that the section violated the Commerce
Clause of the United States Constitution. In so ruling,
the court reasoned that Boston Stock Exchange v. State
Tax Commission, 429 U.S. 318 (1977), prohibited
any differentiation in state taxation between foreign
commerce and interstate commerce (Pet. App. 10-18).

Summary of Argument.

1. California Revenue and Taxation Code Section
225 exempts from property tax goods imported into
California for shipment and sale outside the state and
goods brought into California from other states for
exportation. However, goods produced in California
and goods brought into California from other states
for shipment within the United States are not exempt
from tax.

The fact that Section 225 does not exempt goods
brought into California from another state to be shipped
to still another state does not render the statute invalid
under the Commerce Clause.

California taxes intrastate goods precisely the same
as interstate goods. Such tax treatment is unobjection-
able. California taxes intrastate goods less favorably
than certain out-of-state goods (imports and exports).

oe ee

Unfavorable treatment of intrastate goods vis-a-vis out-
of-state goods is permissible under the Commerce
Clause, Alaska v. Arctic Maid, 366 U.S. 199 (1961),
and under the Equal Protection Clause, Allied Stores
v. Bowers, 358 U.S. 522 (1959).

Favorable tax treatment of foreign goods is not pro-
hibited by any provision of the Constitution. Historical-
ly, Commerce Clause policy has been concerned with
discrimination in favor of local business at the expense
of interstate commerce. Section 225 is entirely consistent
with such policy. It is also consistent with the policies
underlying the Import-Export Clause as articulated in
Michelin Tire. Corp. v. Wages, 423 U.S. 276 (1976).

Moreover, Japan Line, Ltd. v. County of Los Ange-
les, .... U.S. ...., 60 L.Ed.2d 336 (1979), not only
permitted but required that in certain instances foreign
commerce be treated more favorably than interstate
commerce. Recent Congressional enactments in the tax
field consistent with California’s Section 225 also reveal
a favorable treatment of imports and exports over inter-
state goods. Internal Revenue Code Sections 4271 and
4272.

The Court of Appeal misconstrued Boston Stock
Exchange v. State Tax Commission, 429 U.S. 318
(1977), on which it relied heavily. There, New York
devised a scheme which provided for a reduction in
the rate of its stock transfer tax but only on the
condition that the sale of the stock to be transferred
also occur in New York rather than in another state,
thereby benefiting stock exchanges in New York to
the detriment of exchanges in other states. The Court,
in striking down the New York scheme, applied classic
Commerce Clause principles.

a

Section 225 imposes no coercive condition and is
consistent with Commerce Clause principles. The Cali-
fornia statute preserves tax neutrality between Califor-
nia and other free port states in a manner sanctioned
by the court in Boston Stock Exchange.

2. The Court of Appeal held that the exemption
accorded imported goods by Section 225 has the effect
of offsetting tariff rates and does not give domestic
manufacturers the protection from imports which Con-
gress intended they should have. The court cited such
effect as an additional reason for holding that the
section violates the Commerce Clause.

In addition to California, some thirty-six states with
free port laws provide for the exemption of imports
shipped to other states. If the lower court’s holding
is correct then the laws of such states relating to
the taxation of inventories of imports and domestic
goods are also invalid. - 3

Furthermore, some states completely exempt inven-
tories or tax them at more favorable rates than those
prevailing in other states. When imported goods shipped
from such states compete with domestic goods subject
to higher inventory tax rates, the imported goods enjoy
an advantage similar to the advantage accorded
imported goods by California and by the thirty-six
states referred to above. There should be. no difference
so far as their validity is concerned between the prop-
erty tax laws of a free port state and those of a
state with either no inventory tax or a low rate of
tax.

Such consequences are inevitable given (1) a nation
composed of fifty states each having considerable auton-
omy, and (2) Constitutional policies ensuring the free

==

flow of trade among the states. These consequences
can be eliminated only by requiring that all state tax
laws applicable to inventories be uniform. Such a policy
would destroy the principle of Federalism upon which
the nation was founded. .

3. No evidence was introduced to establish that
Section 225 had an actual discriminatory effect upon
interstate commerce. Such an effect was assumed by
the Court of Appeal, and the statute was declared
unconstitutional per se without any consideration of
its effect. A per se test has been rejected by this
Court in determining the validity of statutes under
the Commerce Clause. Complete Auto Transit, Inc.
v. Brady, 430 U.S. 274 (1977); Moorman Mfg. Co.
v. Bair, 437 U.S. 267 (1978).

The party attacking a statute as violative of the
Commerce Clause has the burden of proving a substan-
tial adverse effect on interstate commerce. To show
that Section 225 had such an effect, several facts
should have been established to demonstrate actual
competition between comparable interstate and foreign
goods competing in markets outside of California.
Respondents made no attempt to establish any of the
foregoing elements required to support their claim that
the California statute is unconstitutional.

Even if a substantial adverse effect were shown
to result, the California statute should not be declared
unconstitutional unless it unduly burdens interstate com-
merce. Such a conclusion should not be reached without
balancing the national interest in open trade against
California’s legitimate interest in exercising its taxing

power.

er) an
ARGUMENT.

]
The Commerce Clause Permits California’s Property
Tax to Favor Foreign Commerce Over Interstate
Commerce.

The instant case presents a question not heretofore
decided by this Court: Does the Commerce Clause
prohibit a state from according more favorable property
tax treatment to imports and exports than it accords
to goods produced in the state or to goods in inter-
state commerce?

A. The California Inventory Tax Structure.

All property in California on the tax lien date is
subject to an ad valorem property tax unless such
property qualifies for an exemption.* Section 225 ex-
empts goods produced outside California which have
a foreign origin or destination and which are held
in California for shipment and sale outside the state.
Goods held for sale in California are all equally subject
to tax. Goods produced in other states and held tempo-
rarily in California are also subject to tax unless des-
tined for exportation.

Thus, California’s property tax system treats intra-
state goods precisely the same as goods travelling
in interstate commerce. It is axiomatic that such equal
treatment is permissible.

B. The Constitution Permits a State to Place Local Business at
a Disadvantage.

California treats intrastate goods less favorably than

certain out-of-state goods, i.e., imports and exports held

4California Constitution Art. XIII, § 1; Cal. Rev. & Tax.
Code §§ 201, 401.3.

a

for transshipment. As will be discussed, unfavorable
treatment of local economic interests vis-a-vis outside
interests is entirely consistent with the Constitution.

The Equal Protection Clause of the Fourteenth
Amendment permits a state to tax local residents less
favorably than nonresidents. In Allied Stores v. Bowers,
358 U.S. 522 (1959), the Court considered a challenge
to an Ohio statute which, in an effort to promote
local warehouse business, exempted from Ohio’s prop-
_erty tax nonresidents’ property stored in Ohio ware-
houses. The Ohio law did not accord a similar ex-
emption to property of residents similarly stored. Em-
phasizing the wide discretion afforded the states in
laying taxes and the attribute of sovereignty that entitles
the states to devise fiscal systems appropriate to their
needs, the Court rejected the challenge and approved
Ohio’s statutory discrimination in favor of out-of-state
residents. Allied Stores v. Bowers, 358 U.S. at 526-27.

In Alaska v. Arctic Maid, 366 U.S. 199 (1961),
‘the Court considered the validity under the Commerce
Clause of an Alaska tax statute and reached the same
result as in Allied Stores. Under the Alaska tax system,
interstate taxpayers were taxed at a rate lower than
local businesses with which they competed. The Alaska
tax thus favored out-of-state interests over local busi-
nesses. The Court upheld the Alaska tax, reasoning
that so long as the tax on out-of-state interests “did
not exceed” the tax on local competitors, no unconstitu-
tional discrimination existed.*

In short, as the Court stated in Moorman Mfg.
Co. v. Bair, 437 U.S. 267, 291 (1978):

*See also Dunbar-Stanley Studios, Inc. v. Alabama, 393
U.S. 537, 542 (1969).

—

“The Commerce Clause does not concern itself
with a State’s decision to place local business
at a disadvantage.”

C. The Commerce Clause Is Directed at Prohibiting Discrimina-

tion in Favor of Local Business at the Expense of Inter-
state Commerce.

There is, however, an additional element of differen-
tiation in the California tax system that presents the
novel question in this case—the more favorable treat-
ment accorded foreign goods in relation to goods travel-
ling in interstate commerce. Respondents would have
this Court extend the Commerce Clause to invalidate
this distinction. Such an extension is not warranted.
Despite the unusual claim of discrimination based upon
California’s statutory distinction between foreign and in-
terstate commerce, traditional Commerce Clause analysis
affirms the validity of Section 225. Prior decisions
of this Court which addressed the question of discrimi-
nation against interstate commerce have held that the
Commerce Clause operates to prohibit the states from
discriminating in favor of local business at the expense
of interstate commerce. Favoritism toward local inter-
ests is the sine qua non of a Commerce Clause violation:

“(I]t must be regarded as settled that no State
can, consistently with the Federal Constitution,
impose upon the products of other States, brought
therein for sale or use, or upon citizens because
engaged in the sale therein, or the transportation
thereto, of the products of other States, more
onerous public burdens or taxes than it imposes
upon the like products of its own territory.” Guy
v. Baltimore, 100 U.S. 434, 439 (1879). See
Halliburton Oil Well Cementing Co. v. Reily, 373

=<

U.S. 64 (1963). Nippert v. Richmond, 327 USS.
416 (1946); 7.M. Darnell & Son v. Memphis,
208 U.S. 113 (1908); Welton v. Missouri, 91
U.S. 275 (1875).

D: The Boston Stock Exchange Decision Is Distinguishable
From the Instant Case, Was Misconstrued by the Lower
Court, and Supports the Validity of the California Statute.

The Court of Appeal’s decision in the present case

flies in the face of the Commerce Clause principles
historically applied in cases involving allegedly discrimi-
natory taxes. In finding that Section 225 unduly dis-
criminated between interstate and foreign commerce,
the lower court relied heavily on Boston Stock Exchange
v. State Tax Commission, 429 U.S. 318 (1977). But
the court radically misconstrued the holding of that
case. Rather than precluding Section 225’s differentia-
tion between interstate and foreign commerce, the prin-
ciples underlying the decision in Boston Stock Exchange
fully support the California exemption.

The New York statute challenged in Boston Stock
Exchange taxed transfers of securities in New York
by nonresidents at one rate if the sale of the securities
occurred outside New York and applied a substantially
lower rate if the sale occurred in New York.® The
use of discriminatory tax rates depending on whether
the sale occurred in other states or in New York
was the method or tool employed to induce nonresidents
to make their stock sales in New York rather than
in other states. The purpose of such discriminatory
rates was to benefit the stock exchanges in New York
at the expense of exchanges in other states.

*In the case of large transactions a lower rate of tax was
available to both residents and nonresidents if the sale occurred
in New York.

~~. a

In an effort to uphold the scheme, the New York
Court of Appeals held that a sale by a nonresident
outside the state followed by a transfer in New York
constituted a transaction in interstate commerce and
that a sale in New York by a nonresident followed
by a transfer in New York was also a transaction
in interstate commerce. The New York Court of Ap-
peals held that the statute did not discriminate against
interstate commerce in favor of local commerce but
rather discriminated between two kinds of interstate
transactions.

This Court in effect held that it was immaterial
that the discrimination involved two types of interstate
commerce. In striking down the New York scheme,
this Court applied classic Commerce Clause principles,
i.e., that a state may not discriminate against interstate
commerce in order to benefit local commerce.’ Thus
this Court held that discrimination between “two types
of interstate transactions in order to favor local commer-
cial interests over out-of-state businesses . . . is constitu-
tionally impermissible.” Boston Stock Exchange v. State
Tax Commission, 429 U.S. at 335.

The Court found that New York used “its power
to tax an in-state operation as a means of ‘requiring
[other] business operations to be performed in the
home state.’” 429 U.S. at 336. New York could not
have directly required that sales of New York securities

‘Boston Stock Exchange has recently been cited in support
of the following proposition:

“This Court consistently has struck down state and local
taxes which unjustifiably benefit local business at the ex-
pense of out-of-state business.” Moorman Mfg. Co. v.
Bair, 437 U.S. 267, 288 (1978) (Powell, J., dissenting).
See also Maltz, The Burger Court, The Commerce Clause,
and the Problem of Differential Treatment, 54 Ind. L.J.
165, 167 (1979).

a:

to be transferred in New York must be made in New
York rather than in some other state. This Court
held that the state could not endeavor to achieve the
same objective through the guise of a conditional reduc-
tion of its transfer tax—a method which was essentially
coercive in nature. Such a scheme prevented a non-
resident from making a tax neutral choice of exchange,
creating an advantage for New York exchanges and
a discriminatory burden on interstate commerce.

The present case presents completely different cir-
cumstances. The unconditional exemption of imported
goods is not coercive. It was not designed to benefit
local business at the expense of goods in interstate
commerce nor does it have any such effect. These
circumstances completely distinguish this case from
Boston Stock Exchange.

The purpose of the exemption was to encourage
import business to remain in the state by creating
a condition of tax neutrality as between California
and various other States with free port laws. Whether
or not the exemption was extended to interstate goods
was completely immaterial so far as achieving this
objective is concerned.

The Court of Appeal read Boston Stock Exchange
to stand for the proposition that differential tax burdens
which favor one class of commerce over another are
prohibited, irrespective of any purpose or effect to
advantage the home state. (Pet. App. 15). The court
thereby construed Boston Stock Exchange as prohibiting
all state differentiations between types of out-of-state
commerce. But the mere existence of tax differentiation
between types of out-of-state commerce, with no benefit
to local interests resulting from such differentiation,

—

does not violate the Commerce Clause." As this Court
has repeatedly and unequivocally held, the gravamen
of a Commerce Clause violation is the benefit to local
business that results from differential treatment. Boston
Stock Exchange simply reiterates and applies this rule
to the unusual facts of the case. Only by misinterpreting
Boston Stock Exchange to preclude all differentiations
between out-of-state transactions could the lower court
conclude that Section 225 unduly discriminated against
interstate commerce. The fact is that Section 225 is
a perfectly legitimate exercise of state power under
the rule of Boston Stock Exchange and is manifestly
distinguishable from the New York statute held to
be invalid in that case.

In this connection the following excerpt from Boston
Stock Exchange—which is conspicuously absent in the
Court of Appeal’s opinion—is noteworthy:

“Our decision today does not prevent the States
from structuring their tax systems to encourage
the growth and development of intrastate com-
merce and industry. Nor do we hold that a State
may not compete with other States for a share
of interstate commerce.” 429 U.S. at 336-37.

What California did in enacting Section 225 is pre-
cisely the kind of “structuring” to which this principle
is addressed. No preference is accorded local commer-
cial interests. It is not the differentiation in tax treat-
ment between foreign commerce and interstate com-
merce which may induce import business to remain
in the state. It is the fact that imported goods in

_ “See Boston Stock Exchange, supra, at 330 n. 11 suggest-
_ that an exemption like California’s would have been permissi-
2.

=. wae

California are exempt from tax. The tax differential
itself—the only alleged vice of the California statute—
can have no bearing on an out-of-state shipper’s deci-
sion to use California’s facilities. Thus, nothing in
the Boston Stock Exchange decision supports the attack
‘on Section 225’s validity.

E. The California Statute Is Consistent With Constitutional
_ Policies Articulated in the Michelin Decision.

Section 225 is not only consistent with underlying
Constitutional policy, but even goes further than re-
quired to advance such policy. Perhaps the most com-
prehensive recent discussion by this Court of many
of the constitutional policies relevant to the instant
case was in. Michelin Tire Corp. v. Wages, 423 USS.
276 (1976). Although Michelin involved an analysis
of the Import-Export Clause, it is established that the
policies animating the Import-Export Clause and the
Commerce Clause are much the same and that both
Clauses were directed to similar concerns. See Japan
Line, Ltd. v. County of Los Angeles, ........ iS Geen .
60 L.Ed.2d 336, 348 n.14 (1979).

In Michelin, the Court dealt at length with the con-
cerns which led the Framers of the Constitution to
correct the major defects of the Articles of Confedera-
tion. The Michelin opinion highlighted three original
concerns of the Framers: (1) The Federal Government
must speak with one voice when regulating tariffs and
commerce with foreign nations; (2) Import revenues
should not be diverted to the states; and (3) Seaboard
states should not be permitted to tax imports merely
flowing through their ports to inland states to the
detriment of citizens in states less favorably located.
Michelin Tire Corp. v. Wages, 423 U.S. at 285-86.

—19—

An analysis of the concerns expressed in Michelin
in the context of the instant case goes far to demon-
strate that Section 225, by freeing imports from property
tax burdens, advances each of the relevant constitutional
interests. Taking these in order: (1) So long as a
state forbears from imposing its property tax upon
imports, as California has done in Section 225, Congress
and the Federal Government are given maximum oppor-
tunity to speak with one voice to the extent necessary
to regulate tariffs and foreign commerce; (2) Section
225 diverts no import revenues, directly or indirectly,
to the states; and (3) Not only is California as a
coastal state not taking advantage of its location at
the expense of inland states, but rather it is facilitating
the process of importation and exportation and thereby
benefitting other states.

F. Federal Policy Encourages States to Favor Foreign Com-
merce Over Interstate Commerce.

The foregoing analysis demonstrates that the Consti-
tution permits the states to give favorable treatment
to imports and exports. In fact, state preferences for
imports and exports have been constitutionally encour-
aged. Thus, in Japan Line, Ltd. v. County of Los
Angeles, supra, the Court construed the Commerce
Clause to favor foreign commerce over domestic com-
merce. There, the Court held that shipping containers
used exclusively in foreign commerce are not subject
to state property tax. However, domestic containers
of the same type, when engaged in interstate commerce,
are subject to state taxation. The County of Los Ange-
les argued in Japan Line that such discrimination in
favor of foreign commerce and against interstate com-
merce is impermissible. The argument was deficient
in Japan Line and is likewise deficient here.

—20—

In addition, recent federal legislation shows that Cali-
fornia’s exemption for imports and exports is entirely
consistent with Congressional. policy. The Airport and
Airway Revenue Act of 1970, in order to compensate
for the cost of Government services provided to air
users, established a 5 percent tax on the amount
paid for the transportation of property by air.” The
‘Act,, however, excludes from tax the transportation

10

of imports and exports.

The provisions of the federal tax on transportation
of property by air are thus strikingly parallel to Cali-
fornia’s Section 225. The Federal provisions favor im-
ports and exports by limiting the tax to domestic air
transportation. Transportation of property in interstate
commerce is taxed but foreign commerce is exempt.
Moreover, Treasury Regulations issued under the Act
provide flexible rules permitting stopovers, repackag-
ing and consolidation of cargo in the course of move-
‘ment without loss of exemption from tax."' Califor-
nia’s Section 225 similarly provides that breaking in
bulk, labeling, packaging, relabeling or repackaging
of property is permitted without loss of exemption.

As pointed out at page 12 of the Brief for the
United States supporting the Petition for Certiorari,
“California’s removal of property tax burdens upon
imports and exports is therefore entirely consistent with
congressional poticy.”

*Pub. L. No. 91-258. H.R.Rep. No. 91-601, 91st Cong.,
Ist Sess., 38 (1969).

Internal Revenue Code § 4272(a).
1126 C.F.R. § 154.2-1(c), (d).

oe

II
The Exemption Accorded Imported Goods Did Not
Frustrate Congressional Power in Establishing
Tariffs.

The Court of Appeal held that the exemption accord-
éd certain imported goods had the effect of regulating
commerce by frustrating Congressional power in estab-
lishing tariffs. The reasoning of the court apparently
was that the exemption accorded imported goods had
the effect of offsetting tariffs, thus reducing the amount
of protection Congress intended to give domestic manu-
facturers (Pet. App. 15-16). If the exemption is invalid
on this ground, then the property tax laws of virtually
all the other states would likewise be invalid.

Each of some thirty-six other states with free port
laws exempts imported goods intended for shipment
to other states. Most do not extend the exemption
to goods produced in the state even though destined
for out-of-state shipment. Thus imported goods passing
through a free port state enjoy a competitive advan-
tage in markets in other states over (1) goods manufac-
tured in a free port state and shipped to other states,
and (2) goods manufactured and taxed in other states.

There is also a similar problem with respect to the
tax laws of states which do not have free port laws.
Although they do not single out imports for preferential
treatment, many of such states either exempt all inven-
tories or tax inventories at rates lower than those pre-
vailing in other states. If goods imported into any susch
state remained in the state of importation and competed

ae

only with goods manufactured there, the tax laws of
such state would not operate to “offset” tariffs. But this
is not the case.

The competition of imported goods is not confined
to goods manufactured in the state of importation.
On the contrary, imports flow through the state of
importation to other states. Once an import has been
shipped into another state, it there competes with locally
manufactured goods as well as goods manufactured
in the other states. Thus, competition will exist between
goods imported, goods manufactured in such state, and
goods manufactured in other states. These goods will
have been subject to different states’ property taxes.

To suggest that the above differences in state proper-
ty taxes result in interference with Congressional power
to levy tariffs is far fetched. Differences in state tax
laws are a corollary of Federalism. The nation is com-
posed of fifty states each of which within broad limits
is ftee to structure its tax laws as it sees fit. Except
by coincidence they will not be precisely alike. The
free flow of trade among the states and with foreign
countries is also an attribute of Federalism. Therefore
it is inevitable that consequences such as those discussed
will occur.

Many differences among states’ tax laws have long
existed. It must be assumed that Congress was aware
of such differences and adjusted tariffs accordingly
or, more likely, ignored them.

In the overall context of the tariff making process,
state property taxes are at most a minor item in the
determination of manufacturing costs throughout the
United States. Like California, most states impose a
tax only on goods in the state on the state’s tax

date—one day out of 365. As a result only a fraction
of the toial goods in the state during any given year
are actually taxed.

During the year at issue in the instant case, 1976,
the California tax rate on the market value of property
varied between 3 and 342%. A 50% exemption for
inventories reduced the tax rate to 1% to 14%.”
In the case of the goods in question there was a
turnover rate of three times per year, resulting in
an average effective rate of tax of as little as ’%%.
(A. 12). Thus. even if there were some merit to the
Court of Appeal’s holding regarding frustration of Con-
gressional power, the effect of the exemption in question
was de minimis.

Il
The California Statute Should Be Upheld Because No

Impermissible Effect Upon Commerce Has Been
Established.

A. The Lower Court Erroneously Applied a Per Se Test in
Determining the Statute’s Constitutionality.

No effort was made by Respondents to establish
that the California statute had an actual discriminatory
effect upon interstate commerce. The court below treat-
ed the statute as invalid on its face, thereby applying
a per se test in determining the statute’s constitutional-
ity.'* Thus, without any evidence on the subject. the
court assumed that an unconstitutional effect existed.

Cal. Rev. & Tax. Code § 219.

"The Court of Appeal assumed that since the statute accord-
ed goods different tax treatment on the basis of their origin,
“Foreign goods are thereby given a competitive advantage over
interstate goods of the same nature and competing in the same
market.” (Pet. App. 11).

a,” ee

In this respect, the Court of Appeal was in error.
This Court has rejected a per se test in determining
the validity of statutes under the Commerce Clause.
Earlier decisions suggested that state tax statutes might
be invalidated on Commerce Clause grounds without
considering their practical operation and effect. For
example, in Spector Motor Service, Inc. v. O’Connor,
340 U.S. 602 (1951), the Court held invalid a state
franchise tax on the ground that the tax was imposed
upon the privilege of engaging in interstate commerce.
The Spector approach deemed “irrelevant any considera-
tion of the practical effect of the tax.”

In declaring the California statute unconstitutional,
the Court of Appeal essentially followed the anachronis-
tic Spector approach. The court held that the differentia-
tion on the face of the statute between interstate and
foreign commerce was per se unconstitutional and re-
quired no evidence whatsoever of the practical effect
of the statute.

The Spector approach adopted by the Court of Ap-
peal has been rejected by this Court. Complete Auto
Transit, Inc. v. Brady, 430 U.S. 274 (1977). In Com-
plete Auto, the Court upheld the validity of a tax
similar to that stricken in Spector after considering
its practical operation and effect:

There is no economic consequence that follows
necessarily from the use of the particular words
[of the statute] and a focus on that formalism
merely obscures the question whether the tax pro-
duces a forbidden effect. . . . Accordingly, we
now reject the rule of Spector Motor Service,

Complete Auto Transit, Inc. v. Brady, 430 U.S. 274,
278 (1977).

=

Inc. v. O’Connor, that a state tax on the “privilege
of doing business” is per se unconstitutional when
it is applied to interstate commerce, and that
case is overruled."

In order to determine the validity of the California
statute it is necessary to consider the effect the statute
has upon interstate commerce. It would be an exercise
in formalism to declare the statute unconstitutional
based on speculative concerns of burdening interstate
commerce. Moorman Mfg. Co. v. Bair, 437 U.S. 267,
280. The burden of proving that the statute has an
unlawful effect rests upon Respondents, the parties
attacking the statute.’®

B. Respondents Failed to Establish That the Statute Has Any
Effect on Interstate Commerce.

The potential effect of the California statute which
the Court of Appeal assumed to be present is that
the different tax treatment accorded foreign and domes-
tic goods originating outside California and traveling
through California to destinations outside the State
could result in the foreign goods having “a competitive

Id. at 288. More recently, the Court scrutinized the prac-
tical operation of a state tax statute attacked as discriminatory
in First Federal Savings and Loan Association v. State Tax
Commission, 437 U.S. 255, 259 (1978), and upheld the tax,
holding that the federal savings and loan associations attacking
the statute:

|H]ave not, however, established that it is unfairly burden-
some in “practical operation.” The record does not indicate
that federal associations have suffered a significant handicap
in competing with state institutions, or that any other
federal policies have been thwarted. (Emphasis added.)
(Citation omitted. )

Metropolitan Casualty Ins. Co. v. Brownell, 294 U.S. 580,
584 (1935); Brown v. Maryland, 25 U.S. (12 Wheat.) 262,
263 (1827).

niin

advantage over interstate goods of the same nature
and’ competing in the same market.” (Pet App. 11).
This, however, was a gratuitous assumption on the part
of the lower court. There is no evidence in the record
whatsoever to support it.

In order to show such an adverse effect on com-
petition by interstate goods in the markets of other
states, it would be necessary at a minimum to prove
each of the following factors: (1) There must be
a volume of traffic in goods brought into California
from other states for shipment out of the state in
interstate commerce; (2) Such interstate goods must
be comparable to foreign goods similarly brought into
California for shipment out of the state; (3) The
interstate goods must be subjected to California prop-
erty tax and the foreign. goods must be exempted
from such tax by reason of Section 225;'' (4) The
interstate and foreign goods must be shipped to markets
in gther states where they compete against each other.

No evidence was offered to prove any of the fore-
going factors. The claimed discriminatory effect on
competition is therefore hypothetical and speculative.

‘There are a number of reasons for believing that inter-
state as ‘well as foreign goods may never become subject to
California property tax. As the Court pointed out in Michelin
Tire Corp. v. Wages, 423 U.S. at 288, state property taxes
on goods can easily be avoided by the use of modern methods
of transportation such as air freight, containerized packaging
and railroads. In addition, it is common knowledge that mer-
chants have for years avoided the property tax by letting their
inventories become depleted shortly before a given tax date
and then replenishing them shortly thereafter. See Keesling,
Michelin Tire Corporation v. Wages: The Demise of the Original
Package Doctrine, 50 So. Cal. L. Rev. 719, 725 (1977).

—,

Even if these factors are assumed to exist, they would
not establish the extent of the effect, if any, on com-
merce.'* At most, the effect of the tax on competition
in the markets of other states would be highly at-
tenuated.

C. The Effect of the Statute, if Any, Is too Insubstantial to
Place an Undue Burden on Interstate Commerce.

Assuming arguendo the existence of an effect on
competition, the question remains whether such effect
requires invalidation of the exemption under the Com-
merce Clause. At most, the policies of California may
have resulted in a slight ripple effect on competition
in markets outside of California. Respondents must
show that the California exemption has a substantial
effect which places an undue burden on interstate com-
merce.” The imposition of an ad valorem property
tax such as that involved in Michelin has been char-
acterized by the Court as having an insubstantial effect
on the demand for the goods so taxed. Department
of Revenue v. Association of Washington Stevedoring
Cos., 435 U.S. 734, 753 (1978).

Furthermore, even assuming a substantial adverse
effect on commerce, in order to determine whether
this constituted an undue burden it would be necessary

18The extent of the effect was de minimis. See text accom-
panying footnote 12, supra.

'"Ninpert v. Richmond, 327 U.S. 416, 424 (1946). See
also Gregg Dyeing Co. v. Query, 286 U.S. 472, 481 (1932):
“Discrimination, like interstate commerce itself, is a prac-
tical conception. We must deal in this matter, as in
others, with substantial distinctions and real injuries.”

==

to make “the delicate adjustment between the national
interest in free and open trade and the legitimate
interest of the individual States in exercising their taxing
powers.””” This determination requires an examina-
tion of “the unique characteristics of the statute at
issue and the particular circumstances in each case.”

No such characteristics or circumstances were con-
sidered by the Court of Appeal. In light of the history,
purpese and background of the statute,” its attenuated
and problematic effect on commerce, and the lack
of any precedent for an extension of the Commerce
Clause to invalidate any such effect, Section 225 should
be upheld.

_*°Boston Stock Exchange v. State Tax Commission, 429
U.S. 318, 329 (1977). “Complete Auto recognized that a
state has a significant interest in exacting from interstate com-
merce its fair share of the cost of state government.” Department
of Revenue v. Association of Washington Stevedoring Cos., 435
U.S. at 748.

“1Boston Stock Exchange v. State Tax Commission, 429
U.S. at 329. -

“The statute providing for the exemption in question was
enacted in 1975 and became effective while the original package
doctrine was still in effect. Notwithstanding the Constitutional
immunity then accorded imports, it was well established that
the state could tax other goods, including goods in their orig-
inal packages, brought into the state from other states.
Thus, there is little question but that the statute was valid
at the time enacted. Cf. First Federal Savings and Loan Associa-
tion v. State Tax Commission, 437 U.S. 255 (1978). The
Legislature in enacting the statute involved was not displaying
an unfriendly discriminatory attitude toward interstate commerce,
but was simply following a pattern which had existed from
time immemorial. Even after the decision of this Court in
Michelin the different tax treatment of goods in interstate com-
merce was not due to any deliberate attempt or unfriendly
attitude on the part of the California Legislature, but rather
was due to the passive continuation of the status quo ante
with respect to goods brought in from other states.

a,
Conclusion.

For the reasons set forth herein, the opinion of
the California Court of Appeal, Second Appellate Dis-
trict, should be reversed.

Respectfully submitted,

FRANK M. KEESLING, Esq.,
ANDREW S. GARB, Esq.,

Attorneys for Petitioner.

THOMAS W. HENNING, Esq., and
LOEB AND LOEB,
and
ANN K. SMITH, Esgq., and
JONES, HALL AND ARKY,
Of Counsel.

EXHIBIT A.

Ala. Code tit. 40, § 40-9-6 (1975) Sf,

Ariz. Rev. Stat. §42-631 (1956), Ariz. Rev. Stat. §42-
632 (Supp. 1957-1978)

Ark. Stat. Ann. $84-417 (Supp. 1979)

Cal. Rev. & Tax Code §225 (West Supp. 1979)
Colo. Rev. Stat. §§39-1-102, 39-1-104 (1973)
Conn. Gen. Stat. §§12-95a, 12-108 (1979)

D.C. Code §47-641 (Supp. 1978), D.C. Code §47-
1204 (1973) :

Fla. Stat. §196.0011 (1977)
Ga. Const. of 1976, art. VIII, $I, para. IV
Idaho Code §§63-105 W, 63-105 X (1976)

Rev. Act of 1938 $19.21, Ill. Rev. Stat. ch. 120,
§500.21 (1977)

Ind. Code §§6-1.1-10-29, 6-1.1-10-30, 6-1.1-10-30.5
(Supp. 1978)

Iowa Code §§ 427.1, 427.16 (1975)

Kan. Stat. §79-201f (1977)

Ky. Rev. Stat. §132.095 (1970)

La. Const. of 1974, art. 7, §21

Me. Rev. Stat. Ann. tit. 36, $655 (West 1978)

Mass. Ann. Laws ch. 59, §2 (Michie/Law. Co-op
1978)

Mich. Comp. Laws Ann. $211.9 (Supp. 1979-1980)
Miss. Code Ann. §27-31-13 (1972)

Mo. Rev. Stat. $137.093 (1969)

Mont. Rev. Codes Ann. $84-202(4) (Supp. 1977)

eniaien
Neb. Rev. Stat. $77-1226.01 (Supp. 1978)
Nev. Rev. Stat. $§361.160, 361.163, 361.165 (1977)
N.J. Stat. Ann. §54:4-3.20 (West 1960)
N.M. Stat. Ann. §§ 7-36-7, 7-36-14 (1978)
N.C. Gen. Stat. §105-275 (Supp. 1977 & Supp. 1978)
Ohio Rev. Code Ann. $5701.08 (Page 1973)

Okla. Stat. Ann. tit. 68, $2425 (West Supp. 1978-
1979)

Or. Rev. Stat. $§307.801, 307.820, 307.830, 307.840,
307.850, 307.990 (1977)

S.C. Code §§12-37-1110, 12-37-1120, 12-37-1130, 12-
37-1140, 12-37-1150 (1976)

S. D. Compiled Laws Ann. $10-4-28 (1967)
Tenn. Code Ann. $67-5180 (1976)

Tex. Rev. Civ. Stat. Ann. art. 7150 f (Vernon Supp.
1978-1979)

Utah Code Ann. §§59-2-18, 59-2-19 (1973)
Wis. Stat. §70-111(10) (1977)
Wyo. Stat. §39-1-201 (1977)

6 TE ET LS WOES Fe

— SO ee re er

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_0117%3A07. Public record. Not legal advice.