Appendix — Walter Fleisher Co. v. County of Los Angeles

APPENDIX

IN THE

SUPREME COURT

OF THE UNITED STATES

October Term, 1979

No. 79-700

WALTER FLEISHER CO., INC.,

Petitioner,

VS.

COUNTY OF LOS ANGELES and

CITY OF LOS ANGELES,

Respondents.

On Writ of Certiorari to the Court of Appeal of th:

State of California, Second Appellate District

PETITION FOR CERTIORARI FILED OCTOBER 31, 1979

CERTIORARI GRANTED APRIL 28, 1980

Item

APPENDIX

LIST OF CONTENTS

First Amendea Complaint for

Recovery of Ad Valorem Property

Taxes (filed by Plaintiff June

13, 1977, in Los Angeles Superior

Court

Answer to First Amended

Complaint (filed by Defendants

on or about July 15, 1977,

Los Angeles Superior Court

Notice of Motion for Summary

Judgment; Declarations in

Support of Motion; Memorandum

of Points and Authorities in

Support of Motion (filed by Plain-

tiff November 14, 1977, in Los

Angeles Superior Court

Stipulation of Facts for Motion

for Summary Judgment (filed

by Defendants on or about

December 22, 1977, in the Los

Angeles Superior Court

Page

A-6

Points and Authorities in Opposi-

tion to Motion for Summary

Judgment; Declaration in Opposi-

tion to Motion for Summary

Judgment (filed by Defendants on

or about December 23, 1977, in

the Los Angeles Superior Court A-35

Declaration of Joseph \W. Grant

(filed by Defendant on or about

December 23, 1977, in Los Angeles

Superior Court) A-60

Minute Order (filed by the court

February 9, 1978, in Los Angeles

Superior Court) A-62

Summary Judgment (filed by the

court March 7, 1978, in Los

Angeles Superior Court A-63

Opinion of the Court of Appeal of

the State of California, Second

Appellate District, Division Four,

filed July 25, 1979, has been omitted

in printing this Appendix. It appears

on pages B-1 through B-7 of the

Appendix to the printed Petition for

Writ of Certiorari,

RELEVANCE POCKET BN PRE,

IN ‘THE PROCRKEDING BELOW

(tC hinersebegticadl Pict)

Phevnny Pornbes

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OLN) TOT wreisTr ry an

, “ee ° P Ps

Pa Prreé rit {{ fy fg Fey , @

f oe

wigee f° rear) ®

10,

11.

Summary Judgment (los

Angeles Superior Court)

Notice of Appeal

Opinion of the Court of Appeal

of the State of California,

Second Appellate District,

Division Four

Denial of Petition for

Hearing in the California

Supreme Court

Petition for Writ of

Certiorari to the Court of

Appeal, State of California,

Second Appellate District

Petition for Writ of Certiorari

granted by U.5.

Court

biled and

entered

March 7, 1978

Filed

April 14, 1978

Filed

July 25, 1979

September

20, 1979

b iled

October

31, 1979

April 28, 1970

APPENDIX

IN THE SUPERIOR COURT OF THE

STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

WALTER FLEISHER COMPANY, ) NO. C

INC., ) 195 366

)

Plaintiff, ) FIRST AMEND-

)ED COMPLAINT

vs. )FOR RECOVERY

)OF AD VALOREM

COUNTY OF LOS ANGELES; ) PROPERTY TAXES

CITY OF LOS ANGELES; and )

DOES I through 10, In-

clusive,

Defendants.

COMES NOW THE PLAINTIFF, AND FOR

CAUSE OF ACTION AGAINST THE DEFENDANTS,

AND EACH OF THEM, COMPLAINING AND

ALLEGES AS FOLLOWS:

Le Plaintiff is, and at all times herein

mentioned was, an organized and validly existing

corporation,

Ze The true names and capacities, whether

individual, corporate, associate or otherwise, or

A-l

the type of political entity thereof, if any, of the

defendants sued herein as DOES o through 10,

inclusive, are unknown to the plaintiff, who there-

fore sues said defendants by such fictitious names,

and plaintiff will arnend this complaint to show such

true names and capacities when plaintiff has as-

certained the same or at the time of trial,

de Defendant County of Tos Angeles is,

and was atall times herein mentioned, 9 subdivision

of the State of California, hach city name herein

asa defendant and DOKS 1 through 5, are duly

incorporated cities, municipal corporations, and/or

political subdivisions of the State of California.

The defendant County of Los Angeles collec ter

personal property taxes on behalf of and for the

use and benefit of said defendant cities named

herein and/or named herein as DOES, and these

defendants are named herein along with the ¢ ournty

of Los Angeles so that judgment may be ontered

against all of said defendants, including said - ity

defendants, for refund of the taxes which plaintiff

Seeks to recover by this suit,

4, On March 1, 1976, plaintiff was the

owner of an in possession of a yuantity of persoral

property manufactured or produces) outside of the

United States and brought into this State for trans-

Shiprnent out of this State, for sale in the orcinar

course of trade or business. mon personal

-

. - + - - &- . , —~ +

property was notin a manufacturing process or

production.

= i + 294 os os t ey i

de Under the provisions of Califarni

t2 o* : - . "Po osm Se ‘ —_—— * g ge - <—

Revenue and [axation Code section 2245 6+ ser,

,

is

plaintiff was entitled to an exemption on the per-

sonal property referred to in the preceding

paragraph, in accordance with said provision

and in accordance with Section 225, 1.

6. The assessor of Los Angeles County

and the defendants herein have taken the position

that Section 225 et seq. of the Revenue and Taxa-

tion Code is unconstitutional and/or does not

apply to the goods in question, and have denied th

this plaintiff and all other taxpayers in the County

of Los Angeles any exemption based on the Cali-

fornia Free Port Law, Section 225 et seq.

7. Plaintiff was issued each of the tax

bill(s) hereafter set forth. Within six months

of the filing of the complaint herein, plaintiff,

under written protest, paid the whole of said tax

to the tax collector of Los Angeles County.

8. The County of Los Angeles and the

tax collector thereof, collected taxes on behalf

of said defendant cities, and part of the taxes

heretofore alleged were collected and were paid

to and for the use of said defendants, who re-

ceived a portion of said taxes.

9. No refund of said tax or any part

thereof has been made to the plaintiff or to anyone

acting on plaintiff's behalf,

10. ~+Plaintiff filed an Application for

fqualization, At the hearing on said application,

the Board of Equalization refused to hear any

evidence, make any findings of fact, and denied

A-3

anid-opplication om the prounde thot onby beget

questions were pregented aod it bad neo puniaedie

Hiren, Drs theese extent Phot thrice cee pt Pineedes thea t thee

Sesrreed byes del bee repaede Par teu d ove evga d tleeteg

minotions, ploimtiff hag been denied hae prorece

sored erp prt trbeve fiver.

, copabitrarbecdt ” ff lovin Foor reProneed porer cyypreryb obey thre

E Throat ange Npoprlicc tires Froe Pyegera diver bicens

pProviciowne toh PPectresnerpes copeel Peavrativeny © roede eet batons

5741 cobvie bee Devinee byevce beeen: cleric) within civ

.

rrocopebhyes acorns Filivege this rorepeonecle r) 4 rorepelaine,

bi Ihiee taved crovigehit tr, bees peesryye per) bene

ire cope core Phat pron fice tof hye bea coteonieleel) Preoer, thre

Naaeagcrnent of the rove ket vada of inventory lenper

yo Freee pret evecnrgetion: acs herein ollegerl, wn as

rrere prop tictebordy Geb Fer thy bee reaPher. tor sue kh

greater crank of business inventory as plein ti fh

prreyves st trindl was erbittest te, any owe rrigoli tor [re

evecare b crprecergpeh cof cope hy taves ic rnbricewsrn ter oolointiff

cot thrice tipese corel polo imtiff wilh File on ornenederoent

.

te, thy ce ‘ corcpoloine, for ar} sise trie f reer? ‘es Suir 7

caprecotenet cephoeny Gt 1S eCleterrmninesd) or ab the tire +f

triold,

Ps. Plaintiff was issuer) the following tax

boidbles, Plaintiff is entitles] te, ar ower otiorn ariel

reduction of market value em earch of soir] tax bills

in accordance with Pevenue and Taxation ¢ cole

“eve tiren 29, aot c5e Gu» irs the mmatrtinta nere Ce, r

ot forth, or in such preater or lesser arricourts

ne polevins tiff may prose rt the tirce of ty } tric,

if is entitled to under the prevvisions % OT) OF,

Pocseorotioon

Bill Ne,

SPIVNDIIHAT reo 4 TLUs te. 00

14th St.

J recs \ngoles

t ordi,

VER EFORE, plaintiffs pray Fe

cygerrgenerh Phaes chee Peenedarebss cone yeohy oof FF

foveg aug here abbegecd, pe the onneones

oes hae “at thie tornac cof triovl, Fror miter

ub EP rrebe: preeryicderd bry bree: Poor crpsst

brevperien: coped Frome corte by cobheer ored Prarther

thee cert leerns preper,

BAKER, ANC Ei ANT) R

hy

(SERALD (| Vi

Attorneys for if

{ rity if ; ; ‘ ;

fotal iy

vere

rhe

inventory

4143, 46 by

tae ee r

Ii» Pror iti

trifpoere ,

; r ”

rif rit

r ] ¥

ie i?

CAPTION OMITTED

ANSWER TO FIRST

AMENDED COMPLAINT

SUPERIOR COURT OF THE

STATE OF CALIFORNIA, FOR THE

COUNTY OF LOS ANGELES

Defendants, COUNTY OF LOS ANGELES

and CITY OF LOS ANGELES, by way of answer,

deny, admit, and allege as follows:

a. Answering Paragraphs 1, 2, 7, 8, 9,

10, and 12 of the First Amended Complaint herein,

defendants do not have information or belief sufficient

to enable them to answer the allegations set forth

therein and on that basis deny them.

2. Answering Paragraphs 3 of the First

Amended Complaint herein, defendants admit the

capacities of the named defendants as described.

Defendants do not have information or belief sufficient

to enable them to answer the remaining allegations

of said paragraph and on that basis deny them.

3. Answering Paragraph 4 of the First

Amended Complaint herein, defendants admit the

ownership of personal property at the time

described. Defendants do not have information

or belief sufficient to enable them to answer the

remaining allegations of said paragraph and on

that basis deny them,

4, Answering Paragraphs 5 and 11 of the

First Amended Complaint herein, defendants deny

the allegations set forth therein.

De Answering Paragraph 6 of the First

\mended Complaint herein, defendants admit

4-6

that plaintiff's interpretation of Revenue and Taxa-

tion Code Section 225 is unconstitutional and further

admit that no importer has yet qualified under an

appropriate interpretation of said section. De-

fendants do not have information or belief sufficient

to enable them to answer the remaining allegations

of said paragraph and on that basis deny them.

6. Answering Paragraph 13 of the First

Amended Complaint herein, defendants deny that

plaintiff is entitled to exemption under Section 225,

Defendants do not have information or belief suf-

ficient to enable them to answer the remaining

allegations of said paragraph and on that basis

deny them.

BY WAY OF AFFIRMATIVE DEFENSES

THE DEFENDANTS ALLEGE AS FOLLOWS:

Ve That plaintiff's First Amended Com-

plaint fails to state a cause of action;

8. That plaintiff has failed to exhaust its

administrative remedies;

9, That the Statute of Limitations (Reve-

nue and Taxation Code Section 5138) has expired;

and

10. That plaintiff has vased its First

Amended Complaint on legal theories which have

not been embodied in any claim or letter of pro-

test submitted to defendants,

WHEREFORE; defendants pray:

i. That plaintiff take nothing by its First

Amended Complaint herein;

) That defendants be awarded their costs

of suit; and

3. That defendants be awarded such other

and further relief as the court deems proper,

. DATED: JUL 15 1977

JOHN H. LARSON, County Counsel

By ss.

JAMES DEXTER CLARK

Deputy County Counsel

Attorneys for Defendants

(Declaration of Mailing Omitted)

A-8

C \PETON GOMER EE

NOEYETER Oot ATEYE TOON beng

SUINENMEARY ETD NTE NG

(OCT Shee thon Tie)

DPCTARATIONS IN SUP RORT

Cob ATEYE TOON

MEPMROANDUNM OF POINTE Ni

LUPE RIORTETES UN Stree reob aut

Nterb Peon

SUPE been COMUNE Gob ob dtl

SEAT. C8 CALMFORNE*, bom TH

COMIN Y Go TOs ANGE UE!

ror TRE PeRrENDANT? ANE) "POPE OR

VET ONE VEs Coble HPC OME

Nebiee a bereby power Cheat cm Nee nabee nr ty

PET, ot OO NL ND cet ce ence CPne ethene thas

poettbern tray Pee Ties, tre tine compe tree et Phe pean

rrvemet EEA Tee cated oat PED Neth Tab treet, ba

Vite ten, Corbtfernia, the plveetelh Woadter bP betatves

Cocetrapeaney, Tre.) wtb tree te tree utathed

Ome Per ce ectppeetern yy pedporeeneb pae fee et ane

prbvneetebt ceed cagetert bb eet cated che ferebaned

Seoteb greertpeme Perr capteegrag yy prrcdporevenet orth dee

trevebes teprome Cbne gerereebe Cirat Oli ne tre deter ae ef

thie ceereepebatoet Pre tetany brat thee te ate nee fa teadeds

peace doo be ony tte rioab feet one (hat pebaietied

pacembitbedd Gere qaetpraent ag a patter et baw,

Peete preeetrere wibh bee ney ehe ced Peace cnpecany

Hhriss mreatiee, the dee Daratioura otter Ded dren eter caved

Filed Deere waite, thie Nestrverneaneebinny cet Deeteetc vane

\uitheoritie gd cerverl ane Filed Dene with, all peapecna,

prlecvedivage cnr peecereba Pileak De reiny cue dy ate

Vicorea db chee Deve eatienne coe batted ites thyet pevay dee

Filed pormiern Ger cen at thie Dec dinge Deter cre dy read

Hermes Cdr tne cena t peace y toad predie Gad pretie ie ob,

and sueh other evidence, cdoeclarationea, alficdavite

and pomnts and authoritied ac miay be pare gente

on tiled with) the cane prrren fev con cod three Vee yerdnage

lhe reo,

Datel Nov Ed, oer,

BAKER, ANC EI LIND) RESPOND

CS RAT ET. MANEEART

THOMA © CORCOVELOS

\tterne ye For Phy intift

10

INDEX

TABLE OF CITATIONS. .. «+e e

DECLARATION OF WALTER P.

FLEISHER IN SUPPORT OF MOTION

FOR SUMMARY JUDGMENT .....

DECLARATION OF GERALD T,

MANPEARL IN SUPPORT OF MOTION

FOR SUMMARY JUDGMENT. .....

BRIEF:

I. STATEMENT OF FACTS

AND BACKGROUND ....

II. ARGUMENTS PRESENTED .,

III. PLAINTIFF IS ENTITLED

TO AN EXEMPTION UNDER

SECTION 225 ET SEQ..

A. CALIFORNIA CONSTI-

TU TIONAL PROVISIONS,

B. STATUTES ARE TO BE

PRESUMED CONSTITU-

TIONAL .

C. TAXING STATUTES ARE

TO BE CONSTRUED IN

FAVOR OF THE TAX-

ees SS 4 4G gS

A-11

D. SECTION 255 PROVIDES AN

EXEMPTION TO PROPERTY

IN STORAGE AWAITING

SHIPMENT 21

(A-32)

IV. CONCLUSION 23

(A-33)

TABLE OF CITATIONS

Atlantic Richfield Co. v. County of Los

Angeles (1977) 68 Cal. App. 3d 105, 115 .. 19

Brown v. Maryland (1827) 25 U.S.

{12 Wheat) 419, 6 L.Ed. 689 .... 12

California Housing Finance Agency v.

Elliott, 17 Cal. 3d 575, 594 (1976) ..... 19

(A-30)

Craig Corp. v. County of Los Angeles

(1975) 51 Cal. App. 3d 909, 916 ... 14

(A-24)

Delaney v. Lowery (1944)

25 Cal. 2d 561, 569, 569 ...... .17-18

(A-28)

Estate of Melvin (1970)

10 Cal. App. 3d 48, SS 2.4. 0s os 20

(A-30)

Henry's Restaurants of Pomona, Inc, v.

State Board of Equalization (1973)

30 Cal. App. 3d 1009, 1016 ...... 19

Honeywell Information Systems, Inc.,

v. County of Sonoma,

44 Cal. App. 3d 23, 27 (1974). .... 20

A-12 ;

inc

Low v. Austin (1871)

80 U.S, (13 Wall. ) 29 12, 14, 15

30 L. Ed, 517 oesee (A321, -24, -35)

Michelin ‘Tire Corp. v. Wages (1976)

423 U.S. 276, 96 S.Ct. 535, 14, 15

46 L. Ed, 2d 495 “oe © © © © © @ (A24, -25)

Montgomery Ward v. County of Alameda

(N.D.Cal, 1975) 390 F.Supp.277 .. 14

(A-24)

Singer v. County of Kings (1975)

36 Cal, App. 3d 852, 14

121 Cal. Rptr. 398 ss 2 © & & we eS (A-24)

Stevens v. Watson (1971)

16 Cal. App. 3d 629, 633 ....... 18

Volkswagen Pacific v. City of

Los Angeles (1972) 7 Cal.3d 48 ...... 12

California Constitution, Article XIII, §2. .16-1

(A-27)

U.5. Constitution, Art. 1, $70, Cl. 2 « «1 « « FB

(A-21)

California Revenue & Taxation Code

§201 et seq. ieee Oe dee ee Re

(A-27)

California Revenue 4 Taxation Code

§225 « « » Be" ES, T8, 19, 23

(A 22-23, 29, 30, 31)

DECLARATION Ob WAE TERE

PESTER IN SEE On Gon

MOYETOOIN TORR SEENENEARES

JUD OMEN

I, WATER Th. PE SES TEEIIR Tre teiny clere Dawe

ag follows:

.. Your declarant bs thre president ov

Valter bleisher Company, Tne. cmd is fareidins

wilh all the facts stated Dereiny ned if catbedl vpn

as a wittess combed « Ompetonthy feoatify threeneter,

. Walter bleisher Company. Imes, tao

duly organised and validby existing: courpran ations,

ee Walter Pleisher Company, Ines. as

a wholesale importer ane digteibutonr of mewe bre

ond piftss sellinge its products: Chaccgeont the tonated

Otates, Walter Pletsher Conipomy, des. ovens

houses the poods dese ribed Derern owotting sate,

and typonm sale seb groodss ane troanecshippwedd te

locations: througout the United tates,

A, Poor the PUTA 77 tas yecrny Dien chate

Mareh t, (9876, Walter Pleisher Company, toe. ,

Fileed Pirssimessss Property ota tenmentos chewinege in

ventory located at ane Pocation ia dos \argeed

(Conmity:

N. 1020 Bast P4th Street, Pecos Angee tes,

( abifornin irevenbery Devcinge oo trek

volue of & rho, HAO,

De Of the total market value of inventory

listed above, 90%, to wit, $287,694, was imported

by Walter Fleisher Company, Inc,, from foreign

countries, ‘These imported goods will hereafter

be referred to collectively as "imported inventories.

6. lor the year preceding lien date March

1, 1976, (to wit, 7/1/74--6/30/75) 74.2% of

Walter Fleisher Company, Inc.'s total shipments

from 1020 Kast 14th Street, Los Angeles, were

to customers sorete ‘d outside of the State of

California, 25.8% of such shipments were to

customers located inside the State of California.

Ve All of the imported inventories of

Walter Fleisher Company, Inc., are personal

property which is manufactured or produced

outside of the United States and brought into

California by Walter Fleisher Company, Inc.,

as the original amporter, none of which personal

property is in a manufacturing process or

production,

8. Under the provisions of Revenue and

Taxation Code Sections 225 and 225,1(1), plaintiff

is entitled to an exemption or reduction on the

market value of its inventory of $213, 468,95

(74, 2% X 3287, 694) (ALL of whic h is herein re-

ferred to as "the inventory which is the subject

of this lawsuit'’)

9. \ll of the inventory which is the sub-

ject of this Lawsuit was brought into this state

for transshipment out of California in the ordinary

course of business, and on tax len date March 1,

A-15

a

1976, was in plaintiff's warehouse awaiting such

shipment.

10, ‘Jn filing plaintiff's Business Property

Statement for 1976 an exemption under Revenue

and Taxation Code Section 225 was demanded;

however, such request for exemption was denied,

and plaintiff was issued the tax bill which is

attached hereto as Exhibit ''A.'' Plaintiff paid

such tax bill under protest in two installments,

accompanied by letters of protest dated December

6, 1976, and March 22, 1977, for each payment,

copies of which letters are attached hereto as

Exhibit "B.""'

I declare under penalty of perjury that the

foregoing is true and correct,

Executed , 1977, at

Los Angeles, California.

ss

WALTER P. FLEISHER

(Exhibits Omitted)

A-16

DECLARATION OF GERALD T.

MANPEARL IN SUPPOR’1 OF

MOTION FOR SUMMARY

JUDGMENT

I, GERALD T. MANPEARL, hereby de-

clare as follows:

i. Your declarant is a partner of Baker,

Ancel and Redmond, duly licensed California

attorneys and the attorneys for the plaintiff Walter

Ileisher Company, Inc., herein, and is damiliar

with all of the facts stated herein, and if called

upon as a witness could competently testify the

thereto,

2. Attached hereto as Exhibit ''A"' is a

copy of an Application for Equalization filed with

the Los Angeles County Assessment Appeals

Board by your declarant. ‘The application was

heard on March 18, 1977, at which time your

declarant appeared on behalf of the applicant

Walter Fleisher Company, Inc., and offered to

prove the facts stated in the application, that

applicant was entitled to an exemption, and en-

titled to a reduction in market value, pursuant

to the grounds stated in the application. The

Assessor's office objected to the offer of proof

on the grounds that only a legal question was

presented to the Board, ‘The Board, on the

grounds that only a legal question was presented,

then denied the offer of proof and denied the

application.

A-17

3. The Application for Mqualization stated

that it was to constitute a claim for refund, and

denial of the application constituted a denial of

the claim for refund under the provisions of

Revenue and ‘Taxation Code Section 5141,

4, Attached hereto as Exhibit "B" is a

copy of a form prepared by the California Pran-

chise ‘Tax Board in connection with obtaining

exemptions under Revenue and ‘Taxation Code

section 225 et seq. ‘This form is being sent to

importers in connection with filing requests for

exemption for the 1977 tax year, however, your

declarant has been advised by the los Angeles

County Assessor's office that no exemptions under

Section 225 et seq. have been granted in Los

Angeles County for 1976 or for 1977, even though

importers are being allowed to complete and

return the form attached hereto as Exhibit "BB."

De In the event this court grants the

motion for summary judgment in favor of the

plaintiff, plaintiff will supply the court with the

exact amount of refund and interest to which

plaintiff would be entitled, based upon a reduction

of the market value of plaintiff's inventory. ‘This

information can readily be computed from the tax

bill and by the amount of interest pursuant to

Revenue and Taxation Code Section 5151, or can

be readily computed by the County Treasurer's

office and submitted to the court by stipulation,

Vhis procedure has been used by your declaran

and the County Counsel's office on a number of

other occasions, both for summary judgment

proceedings and trial, involving other lawsuits

1-18

a

for the refund of property taxes,

Pdeclire under penalty of perjury that the

forepomp i true and correct,

executed een ay - gy WOTT, at

loos Angeles, California,

GERALD To. MANPEARL.

(liexhibitss Onartted)

STATEMENT OF FACTS

AND BACKGROUND

On lien date March 1, 1976, plaintiff had

inventory located in its warehcuse in Los Angeles

County, and although plaintiff claimed an exemp-

tion under California Revenue and Taxation Code

Section 225 et seq., an assessment was made on

the full value of plaintiff's inventory, and plaintiff

was sent a property tax bill. The bill was paid,

and the instant suit is for recovery of ad valorem

property taxes,

Plaintiff Walter Fleisher Company, Inc.,

is an importer of novelties and gifts and distribu-

tor of such products are sold to California

customers,

Until recent years all of plaintiff's goods

were cxempt from local ad valorem property taxes

1

This is a case of first impression. Plaintiff

knows of no appellate court decisions regarding

Section 225 et seq. Only two cases have come

before the trial courts, and in both, Motions for

Summary Judgment were granted for plaintiff:

Zee ‘Toys and Formosa Plastics Group (U.5S.A.),

Inc., v. County of Los Angeles, L.A, Superior

Court No, 179 151; All American Distributing

Co,., Inc., v. County of Los Angeles, L.A.

Superior Court No, C 182 173,

A-20

under the Import-Export Clause of the United

States Constitution, 2

In Brown v. Maryland (1827) 25 U.S. (12

Wheat) 419, 6 L. Ed. 689, the United States

Supreme Court fromulated the original package

deoctrine, hoiding in substance that goods held

by the original importer in their original package

were immune from taxes, and in Low v. Austin

(1971) 80 ULS. (13 Wall.) 29, 20 L. Ed. 517, the

Supreme Court held that such immunity applied to

all state and local taxes, whether discriminatory

or nondiscriminatory.

Under these cases the plaintiff and similarly

situated importers had import immunity for their

goods which were in their original package.

In 1972 theCalifornia Supreme Court de-

cided Volkswagen Pacific v. City of Los Angeles

(1972) 7 Cal. 3d 48. Although the case involved

a city license tax, because of ambiguous languate

in the decision, the County of Los Angeles and a

number of other major counties, took the position

that the "original package’ of imported goods was

a seagoing cargo van and not the shipping carton

itself. Based on this interpretation, a number

of counties began denying import immunity to im-

porters that used seagoing cargo containers.

»

Art. I, $10, Cl. 2: ‘No state shall, without the

consent of the Congress lay any Irmiposts or Duties

on Lmports or Exports, eXcept wnat may be abso-

lutely necessary for executing its Inspection Laws. —

A-21

i ee

The implementation of this policy by county

assessors occurred at a time when California

ports were under tremendous competitive pressure

from the Pacific Northwest, including the ports of

Tacoma, Seattle and Portland, and California

warehousing operations were facing increasingly

stiff competition from such major warehousing

centers as Reno, Sparks, Las Veges, and even

as far away as Utah. Containerized goods could

be easily moved and transported to these inland

ports, and the facilites in these areas were growing

at a rapid rate, primarily due to losses suffered

by California ports and warehouses.

The imposition of property taxes on goods

arriving in cargo vans added another competitive

disadvantage to importers in California, especially

those with natinal or out-of-state distribution

facilities. In response to this problem, the

California Legislature passed Revenue and Taxa-

tion Code Sections 225 et seq., commonly referred

to as the California Free Port Law.

o

"Section 225. Personal property manufactured

or produced (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 states, for sale in the ordinary course of

irade 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 procuction shall not

(cont. )

A-22

——————————————

Phe Petree Port Danw wor tribe tiberd Ger porew tele

bovetoetenedly feet Chaeerse: dteagee bet ote te oes Chee qebanntitt,

that Grebe tiebeed ter the Cb treba Di tepeon bathers ane

woe bretodtiy: Bae thither Bor thre rte igee ob probes Cnt

wete Ub btabe by pootige Ger Dee dipped ouitbeiebe thre

te en) Dhie Tocpetdattane fedlt that at

wan dee ena y Fe pravtebe aire Se tgethenn Poa thet

btripert bene ceeel obbeote dbeurteon ce Cheat weet cabbtaateds

i ( eral, Dd

bone Peoebe: Chee Pence abettage toe Deethy Labve Tatapey peee henpetnape,

bederbee Ding, cer begeae hetpettge el tie be paceprenty,

ve

‘

‘ace Ghee tL | Vopr tse ce Da tinettape ann es

Ctmplten dadbed Sachem 2 tay edtbieor hatin thas

coseeteapebtena des ee 0 (trent col clerlert

tuvteediage petepee ey tre bel Gere Ci ateedetpeteerit one Ptie

Eu pean tbe tebe bere bbe Dey Eber ating epee then eet

(hie Gerba tl Geawectebeen yy theettage Chae pee eurtiagre chetent

evbtveel Dey chev tebtnag Chre Qetb rit at tate: co titpetiretites

Dey bre Ha gea yet Er eetee (Peet Tere atten cient ttage thber pete

coubttu yecue Dey Ohre Geta at eth ote titis fren

ctor eve otters elven toupee cette ty veraey com (7) cate aetna

treet beered vce eu tebertne cred Ley cematncae Gee ot saber come tbe

Cor Vberte cheater, conned co Quod, Cate cette eet eet tive

Cory et uth pregrer Gy Trebeb Gon Ct oatodtnnparent Gopre thes

willy Chie hate ot tee tpt et tthe scunine, Obve chabert

wetbulecvwword cet (tie ceatnnesy Cbbes peerntat ot cen gents (hrertarnt,

reed (tre petit ot uib€timite dhe tree Giens Ge tmeet,

Tee Bhent roo UV pepper ty en enipted

titiedart Toe Cyemn Te whate th tes ace emtacsngetned Ger ca tanned

chee Cte Geers tay Obetee beats Pratl te ibe gare fae crrea cape

Loaves ehuvectat prtare edt ne

poop to ship theme poods out of Calmornim, but

nol for sueh companies that were using their

factlities: to sell to California customers, With

thiss pattomate an omand, the Legislature provided

the exemption set forth i Section 225, and pro-

vided two alternative methods for computing the

exemption, whieh are set forth ia Section 229. 1,

of the Revenue and Taxation Code,

\t the tre Seetron 220 was passed, the

comtroversy over whether contumners were or

were notin ae Uorminal package under the

Uod. Constitution, was stall berag litigated im the

eourts. (see, espe, Sinper ve County of Wings

(1975) 46 Cal, App. $d 852, 121 Cal. Rptr. 398;

Moomtprate ty Ward ve Cor vty of Vbaimeda (N.D.

Cal, Poy G90 BS Supp. 17) Craig Corp. v.

County of loos Angeles (I9vo) ob Cal. App. dd 909,

YO) The new seetion, however, provided im-

porters with an additional and independent prounds

for chatting exemption from property tates,

The eXetption provided os broader than the

rotety under the lmport=txport Clause, and

Allows imperters, while the goods are in storage,

fooopen Che ormimal cartons and repackage, rer

label, ete, The LOV8 tax vear, lren date Mareh

1, t98C70, was the first opportumity for importers

fo ochasta enerptiron under Phe Calitorniua bree

nat

over POG years, holding that qondiscrimninmaitory

ad Valoretn property taxes did not Come under

the purview of the Tniportebexport Clouse. The

Compl specifically lett open, however, the ques

tics, thr atey tredivactuad case, of whether poods

woth be tototne Gader the Comnmeree © latse

of the United States Constitution, and of Course,

foods would Comtmiiie to be exempt ander local

jet topred ty aX ha Wii.

Nos elewe that the es enaption provided

tet ee thom 2S woes mot ditenmcded: to be depot:

dent otypom taowwv. Atti oor the Tnaiport= boaxport

( hatte, Hors ot tide pemdent exemption statute

Whose Viability coutiamess, Phe court is re

ferred to an opiiionm by Lepiskitive Counsel dated

MOE dO, te Senator Milton Moaourkes, the author of

See thom US, and toa better Geom: the State Board

of biqaadteoationm dated 2/9/76 addressed to county

pooessors, whteb cho wunments are attached bereto

for the comverntrence of the court respectively as

Poxteeteartes ON Seed UPR dn both ot these Opin

the Cote tion ts peaehed that aitter the Mache bin

dectoten aecdessors titst still provide exemptions

Uthder Seether 22 Oo for goods Chat are stored iam the

Mate of Corbitortaa Cor Croressstaaparenmt, nd that

treet Che tecessary criteria of Seetrom 22,

the Caditeornmi State Bourd ot Pquadlieation

hos prepared a document ontitled bo Nemiptron

clatter fer Goods Held fer DPransshipment, 9 a cops

mMowleth as attected Co the Moanmpeael deela ration

be EN trata Un, this eNernption clrum ts beings

provided Co ttmprerterss Chroustout Cuditornmna,

crt Lenedttrg ttrepomterss te thre Commi. of Loos Ampelos,

However, to date, the Los Angeles County Asses-

sor's office has not seen fit to allow one single

exemption to any importer in California for either

the 1976 or the 1977 tax year. Plaintiff, along

with all other importers, has been denied any

claim for exemption under Section 225 or any

immunity under the Commerce Clause of the

United States Constitution.

II

ARGUMENTS PRESEN TED

It is submitted that plaintiff is entitled to an

exemption on the inventory which is the subject

of this lawsuit under Section 225.,1(1). Under

this section an importer is entitled to claim an

exemption on a percentage of his inventory based

on his total out-of-state shipments from the loca-

tion in question compared to the total shipments

from such location. The intent of the warchousing

operations for goods sold or shipped out of the

State, and not to provide an exemption for an

importer's California business.

PLAIN TIRE TS EN TEELSPED TO AN

EXE PM TION UNDER SECTION 225 b°R SiiaQ,

A, CALIFORNIA CONSTEEU TIONAL,

PROVISIONS

Article NI, Section 2 of the California

Constitution provides im part:

"The Lepisliture may provide

for property taxation of all formas otf

tangable personal property, shares of

capital stock, evidences of mdebted =

ness, and any legal or equitable

interest therein not oxempt under any

other provisiron of this article. The

Legistiture, two-thirds of the mem

bership of cach house concurring,

may clas Hsity sue h d personal property

for diffe re enti: alt taxation or for

“TW

exemption, (he mpha: as added)

It iss common practice for the California

Legiushiture to provide exemptions when the

Leyashature has, imats discretion, determined

that such exemption is in the publre mterest,

(See generally Revenue and Paxation Code Seetron

20L et seq.) Examples of such exemptions are:

property brought into the state for exhibitions at

fairs, carnivals, secrentifie, educational, religious,

or artistic works ($8213); 50° of all business

inventories (S219: aireraft while bere reparred

A-27

—

(§220); household furnishings ($224); seagoing

cargo containers (§232); motion pictures (§988);

wine held for aging ($992); computer programs

(§995); and business records (§997).

In discussing the broad power of the Legis-

lature to determine taxing policy, the California

Supreme Court stated in Delaney v. Lowery (1944)

25 Cal. 2d 561, 568-569:

"Generally the Legislature is

supreme in the field of taxation, and

the provisions on taxation in the state

Constitution are a limitation on the

power of the Legislature rather than

agranttoit....

"If there is any doubt as to the

Legislature's power to act in any given

case, the doubt should be resolved in

favor of the Legislature's action.

Such restrictions and limitations are

to be construed strictly, and are not

to be extended to include matters not

covered by the language used.' That

rule is a corollary of the strong pre-

sumption of the constitutionality of an

act of the Legislature. "

In Stevens v. Watson (1971) 16 Cal. App. 3d

629, 633, the Court stated:

"The power of this state to

select the subjects of taxation or to

grant exemptions therefrom is very

broad and a legislative determination

A-28

in this field must be sustained if there

is any conceivable state of facts which

would support it. "'

California's Free Port Legislation, Revenue

and Taxation Code Sections 225 et seq., is a pro-

perly enacted legislative act, passed pursuant to

and in conformity with the legislative power

granted in Article XIII of the California Constitu-

tion to exempt certain classes of personal property

from taxation. One purpose of such legislation

is clearly to prevent the abuse of the state's taxing

power by exempting properties imported into the

state and.stored pending shipment out of California.

Such purpose is to prevent a burden upon commerce

by providing an exemption which is broader than

that provided by the Commerce Clause or the

Import-Export Clause, and so to encourage com-

merce in the state, and the use of California

facilities. The California Legislature's deter-

mination that such property should be exempt from

California taxation, as wel] as the reasonable

methods the Legislature devised to compute the

exemption, must be sustained, (Atlantic Richfield

Co. v. County of Los Angeles (1977) 68 Cal. App.

3d 105, 115).

B. STATUTES ARE TO BE PRE-

SUMED CONSTITUTIONAL,

The genral and undisputed rule of constitu-

tionality is set forth in a recent California Supreme

Court decision:

A-29

"Tn Comsideriap: the comutitutronabity

ofa lepislative act we presume ites

validity, resolving all doubts an favor

of the vet." California Housing binanee

\peney ve ethiott, 1V Cal, td o7o, ood

(1976), Vecord, Henry's Restaurants

of Potmetma, te, ve State Booard of

Piaquatieation, S0 Cal, \pp. dd tooo, LOt6

(U7), Ta Cad. dur. SO, Conmestitutronmal

Paw, Sectrom G6, at bed Cbg),

Vs tide ated by the abowe quoted svuthorities,

eevee cath TPascatton Code Seethomns 22o und ’vb, -

an Valtdly emacted lepishative aets, are entitled to

ppee utaptronm of Comstitutromabl valrdity an the

usscsert et a oetrowatag of clear and anquestrmable

comflret wath the state or federal constitutions,

Cabatermnnna Pbetassimg: Paimanee Vpenmey ve tllott,

0 wT

hn PAAING STATUTES ARE To 2

CONSTURED IN PAVOR C8 TH

VANPAYV ER,

"it us settled law that Canine

statutes are acts ‘as unvetiss mad Chaat

the courts wtll mot adopt a strains

COMPETE CRE Cay attyparse a GaN wise

tet pura al the legislative aot

iW the legislative act expre:

grCentgatn fee oN erpt core ; \

Pesdana cash c armpsed asada 4 ’ ’ ¢

ta’ state .f Clr ‘ NK 3% ,* ‘ .

VMelyy m Ww a 1. ADD. $

wee [AP penmenad rude conmntitn

lien provinionn aod otatubes parting

Coe trpebbens Prine Cac then ane plewetly

Compote ber Chie eamd Chat ce di ences

beets ADD treet bee carb predd teen ea bended

Dee yer Chee gobo geeeco beg: Gf Shee Pangea gee

Ty Oc ee rtthe ol sitraet

Comotote Chen hoe tot qequnce Ghat thre

poadtenwent poormmtbebe gare cing: be piven

Hee cveetedis eherre e ipelive: cob Une cone tispelboon,

tere oe Code ceteeb pececetabebe: Gober pere tation

bate bee tebe of adh Dawe with cline nepoored

eee Ube corebbtnaeey: nevecneetenge cob Chne Deanipertages

eteapebenys choateeh Chie defect cconipeii te bree

tee coneagel ibid Cheeteby, " Pbeonee a well

Pisbeet ten abieon yatetin, Wtss Ve % only

col Secenncotnnce, Bd Cad, Ago. tab at, 2 Cha),

sere Obangeed shih fe acd rdereg, inate prmecstitiredd computite

ticeed ced wobbly, cael chewtbet co fe Chre tire ccniiipe on

Coben ct (bre coccumapetteme ane Cer dee reswobvedd tn

Prvert col Chee fa ngaayen, tov Cbebed evcurues, OUner taaderargoere:

Litteors oof Cbee Peeve Pteont Taw trove. ¢ oorniprone wetthy thre

Codttortta bepiodatune ts totemtion fee seripl freon

Pascttes Chee entation purepertions: treba in

CDi beet eater at trape oc dntpeenit out ot the state,

Pipe tbe t tree, kts Cheep eo cenmiprelten sfarttiberss

bre te be otete Oly Comeateued, Chet) tiaterpre tation

traterat Doce cceteret aber witty Chre cemetinanry tree curiae ot

the Dating etaplow edd patie t: Chor fhe tatre wes

rrvecatettnge Chaat e cotadel Deer rte tbertercd Ger cette bi Liatapetnagee.

DD. SHOC'TION 225 PROVIDES AN

MAE MIP'TION ‘TO PROPERTY

IN STORAGH AWATTING SHIP-

OUT MENT,

The purpose of the California Pree Port Law

is Clearly to provde an exemption greater in breadth

than that provided under the Lnport-lxport Clause

(as interpreted prior to Michelin) and greater in

breadth than that provided under the Commerce

Clause, ‘That the seetion covers property which

rio heldoan storage awaiting shipment out of the state

ri celur from the Linguapge of the statute itself,

Seetion 220 contains the following Language:

"The exemption under this section shall

not apply to personal property im manu-

facturing: process or production, That

process or production shall not include

the breaking im bulk, labeling, packaging,

relabeling, or repackaging of such

property.

Vhiass Language can only be interpreted to mean

property whichis net in a continuous transpor-

fafrom process,

\s indteated in the declarations, 90°) of the

mventery of plammtift is imported Crom without the

lrated States, lt is stored ina warehouse, ¢

fe be seldom the ordinary course of business

throughout Che United States,

\s set forth in the declination in support

‘ . ' . . . . ; , or

of Che motion for summary judgment, plant

has computed the percentage of its goods which

were shipped out of state for the year preceding

the March 1, 1976, lien date, as 74, 2% of its

total shipments, ‘Therefore, under the provi-

sions of Section 225 and 225,1(1), plaintiff is

entithed to an exemption on its inventory equaling

74, 2% of its total imported inventory on hand

March 1, L976. Plaintiff's total imported inven-

tory on lien date was $267,694.00, and the ex~

emption of 74, 2% therefore would amount to an

exemption on inventory having a market value of

$215,468.95, Plaintiff claims it is entitled to

a refund based on such value, and in the event this

court agrees and grants a summary judgment,

as set forth in the declaration attached hereto,

the tax represented by such amount and the interest

thereon will be Computed and supplied to this court

from figures to be obtained from the tax collector's

office,

1V

CONCLUSION

It is respectfully submitted that the summary

judgment should be granted in favor of the plaintiff

and against the defendants,

Respectfully submitted,

BAKER, ANCEL AND REDMOND

By: _

GERALD LT. MANVEARL and

PHOMAS CC, CORCOVELOS

Attorneys for Plaintiff

(Declaration of Mailing Omitted)

A-33

~~ —————— <<

“—_

CAPTION OMITTED

STIPULATION OF FACTS FOR

MOTION FOR SUMMARY

JUDGMENT

SUPERIOR COURT OF THI

STATIC OF CALIFORNIA, FOR THEE

COUNTY OF LOS ANGIE LAS

The parties, by and through their attorneys,

stipulate to the following facts, for purposes of

plaintiff's Motion for Summary Judgment and for

no other purposes:

The goods which are the subject of this Motion

for Summary Judgment are manufactured or pro-

duced in foreign countries, shipped to the plaintiff,

who is the original importer, where they are

unloaded into warehouses in the custody and

possession of the plaintiff, awaiting sale and

delivery to plaintiff's customers who are located

throughout the United States. ‘The goods are

stored for indefinite periods of time awaiting such

sale and delivery.

DATED: December 22, 1977

JOHN TH. LARSON, County Counsel

IY: Ss

JAMES DENTPER CLARK

Deputy County Counsel

Attorneys tor Detendants

BAKER, ANCEL AND REDMOND

Attorneys for Plaintiff

(Declaration of Mailing Omitted)

A-34

CAPTION OMITTED

POINTS AND AUTHORITIES IN

OPPOSITION TO MOTION FOR

SUMMARY JUDGMENT

N

TO MOTION FOR SUMMARY

JUDG MENT

SUPERIOR COURT OF THE

STATE OF CALIFORNIA, FOR THE

COUNTY OF LOS ANGELES

INTRODUCTION

The plaintiff and defendants disagree as to

the interpretation of §225 of the Revenue and Taxa-

tion Code which exempts certain kinds of goods

from taxation. There is no dispute as to the

constitutionality of the statute, although the de-

fendants claim that one of the reasons for not

choosing the plaintiff's version of the statute is

that that version will result in constitutional

problems. It should be noted that the dispute is

nota small one. As the Declaration of James

Dexter Clark points out, there are over 30 law-

suites claiming $1,000, 000.00 of exempted taxes

now filed and served, which represent only a part

of the importers now claiming that section.

PLAINTIFF'S CONTENTIONS

i, The plaintiff has argued that Section

225 is a ''Free Port" law made in response to

competitive pressures, and that the section was

designed to reverse the language in \olkswigen

Pacific v. City of Los Angeles, 7 Cal. 3d 48, 101

Cal. Rptr. 809, 496 P. 2d 1237 (1972) (see also

A-35

> ——————

Craig v. County of Los Angeles, 51 Cal. App. 3d

909, 124 Cal. Rptr. 621 (1975)). The plaintiff

argues that the section was meant to give im-

porters an even broader exemption than that

provided them under Low v. Austin, 80 U.S.

(13 Wall.) 29, 20 L. Ed. 517 (1871), (recently

overruled by the U. S. Supreme Court in Michelin

Tire Corp. v. Wages, 423 U.S. 276, 46 L.Ed.

2d 495, 96 S.Ct. 535 (1976)). The breadth of

the plaintiff's interpretation can be seen by the

fact that all repackaged goods would not even appear

to receive the immunity under Low v, Austin,

supra, while they would under plaintiff's version

of Section 225. Most of the goods of plaintiff

would be taxable pursuant to Craig v. County of

Los Angeles, supra.

2. The plaintiff next contends that the

Free Port'' interpretation is supported by

various administrative documents. (Plaintiff's

Motion p. 15.)

"

3. The plaintiff argues that the Legis-

lature has the power to exempt, and that any

doubt that that power exists should be resolved

in favor of its existence. (Plaintiff's Motion

pp. 19, et seq.)

4, The plaintiff also contends that the

Legislature may exempt businesses generally

and also may exempt business which import

while not exempting businesses dealing in U.S.

goods, (Plaintiff's Motion p. 18.)

A-36

a

Dy The plaintiff next relien on the pending

opinion in Athantie Hiehfield Co.v, County of Tos

Angeles, ON Cal, App. dd Gadvanee) 105 (L977) tor

the propodnttion that the Depiatuture' ss determiunatron

that come property choud be exeaapl mist be ve

cepted by the court. (C?'bainatitfi's Motion ps. 19.)

, ‘The plaintiff next cites Cased support

bop the tele that lepinhative aeth are presumed

commtitutional Ci hammtilf's Motton ps. bo)

eo ‘The pelaimtill states that theme asa

penerab oube that ail taxing stataterd: cae tobe

commbrued to haveor of the taxpayer, ‘They rely for

thin proposition on cored whieh state that on exerip

thom cheat be taterpreted Commimitenthy wath the

lepinhative doitent derpite the pomeral rate that

“toterbent poecitanap exemption Pron taxation are

"

rdriethy canitrued., oo. . CU bivaretadt ts: Metron

pr. OL)

i, Phi pebaieitil th ree xt melress on Lanprigree

of the otatute whtelh maken ca exception an the

eNetapelpen, The eX ception denen protection te

proooubo chestined for qaantbac ture, Ihe Cex ception

tor thre exemption! slates Chat repoachipunp, ete.,

doeennot conmititate oa daanubheetaring process. The

phitmtith combendes that the Toepisdature showed ats

bnfenmt fo eketipt pooods, not otherwise tiimiunme on

exennpet bey thiaet Lanpeigee. Cie barmtitt'ss Notion p.

", et rier. )

, Tlie prtcnnotatt piay acisert that the words

Yor cade’ tu Sveetiom 22 preci Chiat poor Larcupelat

inte the purrscdietion for both teoaticsbapiaent ond

nade ‘are: ¢ Nemipet,

ar

i

Dib ENDANTS CONTENTIONS

1. Doesectechagites Comber that Ceonesbapanent

mean bo teonafer from ome conveyance or bine to

another. Citandard College Dietionary, copyriyhe

POOU therecaourt, Trace A World, Ines, New York)

Phe defemdante alae Conmtend that plaintiff's broad

Interpretation ta contrary to bepiobative pitent, ss

well the pluin mec of the atatute,

oo Phe dhefendinte corprie Chat exeriptrones

are tobe an narrowly comoteued as pormible withun

thier Decpetrshative: gritenit, ’

Fe Phie chefemediante: farther Conmtenad thiat

prhattilt ss citppport froma the Latygiagee of the statute

hoon not conmmrder the tatu: of the Law when the

phatute wank emaeteds

\, Detendante assert that the very ad

ninttrative velease upon whreb plartitll relies

actttitly take the defendants! positron,

. Defeordante abse contend that the Cadi

foriie Lepiobatire thas previotialy omected exetipe

fiom whtel: poo further Chan the comstitutronal

thtatiitier already preanted by U.S. Steoreme

Court optrren, co that (hte statate ss nat prong

beyond the commerce ehause is mot unprecedented,

i, Defendants: Comtend: Chat the constitu

fhomal dittieulttes tavelwed an the plamtitt's broad

Interpretation supply abundant reasons for

avorbelitap it,

TV. Finally, defendants contend that the

words "for sale" refer to the purpose for which

the goods were originally manufactured and do

not add to the exemption.

I

THE PLAIN MEANING

The word ''transshipment"' is, of course,

key to Section 225. The plaintiff contends that

"transshipment" includes storage, sale, sorting,

distributing, and the like. There is no support

for this definition in any dictionary or case re-

searched by defendants including,

Funk & Wagnalls Standard College

Dictionary, supra

Webster's New World Dictionary (1968)

the World Publishing Company)

"to transfer from one ship,

train, etc. to another."

Ballentine's Law Dictionary (1969)

Lawyer's Cooperative-Bancroft Whitney)

"Moving cargo from one vessel

to another. "

Words & Phrases, Vol. 42, p. 482

"Where bill of lading allowing

transshipment at certain intermediate

port was stamped with clause indicating

that forwarding beyond such port was to

be in connection with named company,

A-39

terms 'transshipment' and 'forwarding'

held interchangeable, and clauses con-

taining such terms, not being inconsistent

must be construed together, '

Note: forwarding means "'To

undertake under the terms of the con-

tract with the shipper for through

transportation to a point beyond the

carrier's own line" (Ballentine's Law

Dictionary, supra),

It should be noted that even the unabridged

version of Webster's New Workd Dictionary (1971

G & C Merriam Co.) contains no other definition

than that stated above.

The plaintiff has postulated some other

definition, It is rst clear what it wishes this

court to decide, because they have not actually

set forth the meaning they give to the word.

They do make clear, however, that they want

the word transshipment to include storage await-

ing sale and delivery, the sale itself, sorting by

type, and distribution,

The authorities cited thus far make it clear

that the commonly accepted definition of "trans-

shipment" is that advocated by the defendants,

It is the policy of the courts to avoid giving

statutory phraseology a strained or forced

interpretation (Union Tool Co, v. Farmers' &

M. National Bank, 192 Cal. 40, 218 P, 424 (1923)).

A-40

a

‘Thus, the plaintiff must show that the legis-

lative intent clearly shows that the plaintiff's

situation was meant to be covered (Memorial

Hills Association v. Sequoia Inv. Corp., 157 Cal.

App. 2d 119, 123, 320 P.2d 567 (1958)). ‘That is

the burden placed upon the plaintiff.

I]

THE LEGISLATIVE INTENT

is The bill,

The Legislature, although not describing

its purpose in the enacting law's preamble, did

describe the effect it wished the statute to have

on the face of the bill.

In Stats. 1975, c. 1126, the Legislature

stated:

"SEC. 4. No appropriation is made by

this act, nor is any obligation created

thereby under Section 2229 of the

Revenue and ‘Taxation Code, for the

reimbursement of any local agency for

any revenue lost by it as a result of the

exemption of property from taxation

by this act because the net loss of reve-

nue to any local agency is not significant. "

(emphasis added. )

It should be noted that Section 2229 requires

the Legislature to reimburse local government

A-41

a

for the exemptions that body creates in their tax

lease. ‘That section is part of the system where-

by a ceiling is placed on local tax rates.

The plaintiff's broad interpretation would

put the Legislature in the position of having ex-

empted property from the county's tax base while

not providing reimbursement as it is requirea by

statute todo. The Legislature said it did not

need to provide that reimbursement because there

would be little or no money loss,

The plaintiff's interpretation flies in the face

of a direct statement by the |.cgislature that the

exemption would have virtually no impact.

a Section 22293,

One other aspect of Section 2229 1s worth

commenting on, That statute also requires that

no exemption will be for more than five years and

that no exemption will exempt more than 75% of

the value of the property exempted. This statute

does not comply with those restrictions. The

only explanation (unless the plaintiff is urging

legislative oversight) is that the de minimus

character of the bili (as described by the Legis-

lature itself) does not require comphance with

Section 2229. Section 225 was not meant to be

the overwhelming boon to importers which the

plaintiff postulates.

3. Why pass a ''de minimus" bill?

The logical question is: why could the legis-

lature have stated that the act would have little

effect and yet still enact it?

The answer rests on the distinction between

an exemption (statutory) and an immunity (consti-

tutional). The U. S. Supreme Court, and others,

provide the basic immunites from state and local

taxes under the U. S. Constitution. The State

Legislature provides exemptions,

As the plaintiff points out in its memorandum

accompanying its motion, the import-export clause

immunity was in flux actually from 1959) (Youngs-

town Sheet & Tube Co. v. Bowers, 358 U.S, 534,

3 L.Ed. 2d 490, 79 S. Ct. 383) until 1976) (Michelin

v. Wages, supra). The California Legislature has

often attempted to ''freeze'' a statutory interpretation

by enacting that interpretation into law. On at

least one other occasion it did the same thing with

regard to a constitutional immunity from tax.

Revenue and Taxation Code Section 30102

exempts from the cigarette tax, goods which are

in bond under the control us U. S. Customs. This

exemption was actually unnecessary in light of the

opinion in National Distillers Co. v. City and

County of San Francisco, 141 Cal, App. 2d 651,

297, P. 2d 61 (1966). Section 30102 was enacted

in 1959, Of course, ten years later, bond immunity

from state taxes was restricted to include only goods

which were not destined for LU. S. markets (American

Smelting Co. v. County of Contra Costa, 271 Cal. App.

A-43

2d 437, 77 Cal. Rptr. 570 (1969)). But in 1959,

the section was at least apparently covered by the

immunity. The result of the legislation was to

hold the status quo. (Of course, without the

immunity, the statute may face equal protection

or commerce clause problems, but Section 30102

has neither been tested in, nor interpreted by

the courts. )

In the same vein is the exempting from the

Alcoholic Beverage Tax Law all liquor in continu~

ous transit through the state (Revenue and Taxation

Code Section 32051). This exemption obviously

conforms with the immunity described in Minnesota

v. Blasius, 290 U. S. 1, 78 L. "Sd. 131, 54 5S, Ct.

34 (1933) and Baron v. M[linois, 227 U. S. 501,

07 L. #d 615, 33 S. Ct. 299 (1913). Those cases

hold that when goods have come to rest in the

taxing jurisdiction for the purposes of their owner,

they are taxable. Clearly the commerce clause

immunity is as broad and possible even broader

than the statute.

Immunities can fluctuate leaving the exemp-

tion "out ona limb.'' The exemption must, then,

meet all the requirements of any state action which

may deny equal protection or may regulate com-

merce. But if the Legislature wishes to try to

hold on to the immunity in this way, and if the

exemption passes constitutional muster on its

own, then the exemption will serve the legislative

purpose.

Section 225 is sucha statute. Poth the

import-export and commerce clauses had been

A-44

interpreted to allow more state taxation than

previously thought (see VW Pacific v. City of

Los Angeles, supra, and cases cited in Complete

Auto Transit v. Brady, __—SsU. S. ___, 51 L. Ed.

2d 326, 97S. Ct. 1076 (1977)).

The Legislature did not specifically say tnat

the exemption was already "covered" by an im-

munity, but the plain meaning of the terms it used,

and its refusal to limit the statute as required by

Section 2229 provide abundant support for that

conclusion.

4, The plaintiff's interpretation of the

legislative intent.

The plaintiff has pointed to that portion of

the bill which excepts goods bound for a manufact-

uring process from the exemption.

Actually, deleting goods in the process of

manufacturing is an attempt to see that goods

which were taxable when the statute was passed

would not be exempted. Thus, the exception

further supports the legislative finding that the

bill would not exempt any goods which were then

taxable.

From 1959, the import-export ciause had

been interpreted so that it would not provide an

immunity for goods which were the ''current

operational needs" of a manufacturer (see

Youngstown Sheet & Tube Co, v. Bowers, supra).

So deleting goods "in'' manufacture actually con-

forms the exemption to the then-existing import-

export immunity.

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Plaintiff further states that Section 225

excludes from the exception the process of label-

ling, repackaging, etc. It maintains that this

exception shows the legislative intent to exempt

goods held in the taxing jurisdiction for more

than transshipment. The plaintiff's reliance

on this language is misplaced.

The import-export clause had been inter-

preted to include as "current operational needs"

all goods under the control of a manufacturer

(Virtue Bros. v. County of Los Angeles, 239

Cal, App. 2d 220, 48 Cal. Rptr. 505 (1966)). Even

out-of-state manufacturers would be taxable under

Youngstown if the goods were stored in this state

as their current operational needs.

But if the extent of that out-of-state ''man-

ufacturing'' is repackaging or relabeling (i.e.,

not really manufacturing), the goods would not be

current operational needs and the import-export

immunity would still protect them (see Ralston

Purina v. County of Los Angeles, 56 Cal. App.

3rd 547, 128 Cal. Rptr. 556 (1976) where the

Appellate Court at p. 553 described pre-Michelin

law as holding that labeling and casing are not

manufacture),

Section 225 accomplishes these ends by,

first, excluding the current operational needs of

out-of-state manufacturers from the exemption,

and, second, by restricting manufacturing to

something more than repackaging, etc. Thus,

goods being transshipped will not be exempt if

they are current operational needs under

A-46

Youngstown and following cases,

Once again, the Legislature has manefested

its intention to conform this legislation to the

existing constitutional immunities.

III

THE ADMINISTRATIVE CONSTRUCTION

Plaintiff relies on administrative construc-

tion by the legislative counsel and by the State

Buard of Equalization to support its contention

that goods sorted, stored, and sold are exempted

by Section 225. The def@dants believe that the

interpretations cited are erroneous in that they

ignore the obvious impact of Youngstown and the

Legislature's attempt to not exempt goods destined

for manufacture out of state, because those goods

would not be exempt uner the pre-Michelin inter-

pretation of the import-export clause.

But in this case it simply does not matter

whether this court accepts the administrative

interpretation or the County's. Using the admin-

istrative interpretation still leads to the taxability

of these goods,

1, Legislative Counsel's opinion (Exhibit

A to Plaintiff's motions),

On page 3 of that opinion the Legislative

Counsel explains why that office determined that

Section 225 exempts goods imported for trans-

shipment plus repackaging.

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"It is our understanding that such matters

as 'breaking in bulk, labeling, packaging,

relabeling or repackaging' are not norm-

ally procedures carried out by shipping

companies, but are more usually tasks

carried out by the owner of the property

or by his agent. Thus, in our opinion,

breaks in the continuity of the shipment

of imports or exports covered by Section

225 for any of the specified purposes

its exemption. '' (Emphasis added. )

The Legislative Counsel restricts the

breaks in the continuity of the shipment" to those

covered by Section 225, That supports the

County's interpretation.

But, storage, sale, back-up inventory,

sorting, etc., are not among the purposes allowed.

Thus, the Legislative Counsel would exempt

goods passing through the state whose shipment

was interrupted for the purpose of repackaging, .

etc. But there is no support for the plaintiff's

contention that the statute exempts goods whose

shipment was interrupted for anything else.

Theoretically, even repackaging plus some

other purpose would not save the goods from taxa-

tion because the other purpose is not set forth in

the statute, and exemption must not be expanded

beyond a reasonable reading (Atlantic R. R. Co.

v. Phillips, 332 U. S. 168, 91 L. Ed. 1981, 67

S. Ct. 1587 (1947); Cypress Lawn Cemetery Assn.

A-48

wv. San Francisco, 211 Cal, 387, 390, 295 P. 813

(1931); Weber v. Santa Barbara, 15 Cal. 2d 82, 88

98 P,. 2d 492 (1940); Cedars of Lebanon Hospital v.

Los Angeles, 35 Cal, 2d 729, 734, 221 P.2d 31

(1950)). These cases go even further: the exemp-

tion must not be expanded beyond the narrowest

reasonable reading.

The Legislative Counsel had indicated the

purposes which it feels may cause a break in

shipment and still provide an exemption under

Section 225. There is no support for saying that

there are others.

2. Board of Equalization letter.

The State Board of Equalization sent a letter

to the Assessor upon which plaintiff also relies

(Exhibit B of plaintiff's motion). The State Board

letter says:

"Additionally, because of . . . section

225... goods brought into this state

from outside the United States for

transshipment out of this state...

tor sale. . . are exempt from tax

even if they are within the control of

a California consignee provided that his

reason for having them is for the pur-

pose of breaking in bulk, labeling,

relabeling, packaging, or repackaging

the property prior to transshipment."

Once again, there is absolutely no support

for including any other purpose in the exemption,

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IV

THE PLAINTIFF'S INTERPRETATION

AND THE STATE AND FEDERAL

CONSTITU TIONS

Statutes must, if at all possible, be inter-

preted so as to be constitutional (Shealor v. Lodi,

23 Cal, 2c 647, 653, 145 P. 2d 574 (1944); Palermo

v. Stockton Theatres, 23 Cal. 2d 53, 60, 195 P.2d

1 (1948)).

Interestingly enough, the plaintiff's inter-

pretation would distinguish between foreign goods

and U. S. goods, (Even under the pre-Michelin

law, according to plaintiff, owners of foreign

goods would be favored over those owning U.S.

goods, as well as over foreign goods bound for

California market). The same services would

be provided the plaintiff's goods as are provided

others, yet the owner of foreign goods would be

entitled to not pay for them, while his domestic

competitior would.

There would appear to be no reason for this

distinction. The warehousing and shipping

industries service both Japanese and Hawaiian

goods (as well as those shipped from other states,

see Sea-Land Services Inc. v. County of Alameda,

12 Cal. 3d 772, 117 Cal. Rptr. 448; 529 P. 2d 56

(1974) for a description of some of this interstate

sea traffic).

1, Equal protection and uniformity of

taxation.

Assuming that the Legislature simply neg-

lected to add the plaintiff's interpretation to the

statute and that it intended to exempt goods whose

shipments were "interrupted" for the purposes

of sorting, storage, sale, back-up inventory, and

the like, the statute would be a prime candidate for

a declaration of unconstitutionality because it would

pase the existence of preferential treatment on

the geographic location of its origin.

WHYY v. Glassboro, 343 U. S. 117, 21 L.

Ex, 2d 242, 89 S, Ct. 286 (1968) epecifically re-

jects this sort of exemption on the grounds of equal

protection. In Bethlehem Steel Corp, v. Depart-

ment of Water and Power, 276 Cal. App. 2d 221,

30 Cal, Rptr. 300 (1969) statute favoring U. 5S.

products over foreign ones was stricken on the

same grounds. Yet the plaintiff insists thata

statute be interpreted so as to give foreign goods

preference over domestic ones.

The plaintiff's interpreation is also contrary

to the California Constitution. Article XIII, Sec-

tion 1, in providing for the taxation of property

within the state requires uniform and even-handed

taxation (Watchtower Bible « Tract Soc. v. Los

Angeies County, 30 Cal. 2d 426, 182 P. 2d 178

(1947) cert. den, 332 U. S. 811, 92 L. Ed. 389,

68S. Ct. 112).

2. The commerce clause.

It is undisputed that the regulation of foreign

commerce is a power of the Federal Government

and not the states (Bethlehem Steel Corp. v.

Department of Water and Power, supra; United

States v. Belmont, 201 U.S, 324, 330; 81 L.Ed.

1134, 1139; 57 S.Ct. 758 (1937); and United States

v. Curtiss-Wright Export Corp., 299 U. S. 304,

315-316, 81 L. Ed. 255, 260-261, 57S. Ct. 216

(1936)).

The plaintiff's interpretation suggests that

the Legislature is using its power to tax and exempt

in order to encourage foreign goods while dis-

couraging domestic ones, In fact, such encour-

agement and discouragement constitute a regulation

of foreign commerce. As such, it is contrary to

the commerce clause which vests all power to

regulate foreign commerce in the Federal

Government.

The absurdity of the interpretation becomes

even Clearer when one remembers that one of the

purposes of congressionally mandated tariffs is to

protect American Industry (see Preamble to the

Tariff Act of 1930; 19 U. S. C. Section 1202, et

seq.). A review of this section makes it clear

that the variation in duties paid is not related to

local taxation but to the nature of the goods and

the country from which they come. Plaintiff's

interpretation of Section 225 would cancel or

reduce the impact of many of the tariffs thereby

directly countering the impact Congress intended.

A-52

Thus, the commerce clause, and the exclu-

sive Federal jurisdiction over foreign commerce

supply even more reasons to reject plaintiff's

interpretation.

3. Administrative interpretation and

constitutional provisions,

One of the primary reasons for the county's

interpreting the statute in the way it does is be-

cause allowing any exemption beyond the commerce

clause, even for repackaging, would create the

same constitutional problems. But the adminis-

trative interpretations at least rely on specific

language of the statute and do carry it beyond its

terms. The administrative interpretation holds

the constitutional problems to the minimum although

not disposing of them altogether.

V

THE WORDS "'FOR SALE" IN SEC-

TION 225 DO NOT REFER TO THE

GOODS' STATUS WHILE IN STORAGE

The plaintiff may assert that the words ''for

sale'’ eman that the goods must be for sale to

qualify for the exemption. This logic is clearly

unreasonable since it would call for the exemption

of goods held by their owners for the purpose of

sale, but not for other more transportation-related

purposes as were involved in All American v.

County of Los Angeles, decided earlier by this

court,

A-53

The placement of the commas in Section 225

is also contrary to such an interpretation. The

suggestion, if made, would more accurately be

reflected by the following:

"

Personal property, manufactured or

produced. ... for...

Instead the comma after the word property

is omitted, so that all the qualifiers that follow

the words ''manufactured or produced" actually

apply to them. The true sense of the section is

that the goods must be ''manufactured or produced

. . . for sale" rather than further manufacture

or use by their owners, thus again showing a

consistent legislative intent to go no further than

the commerce clause,

One other possibility exists that the words

"for sale'' qualify the words ''transshipment out

of this state'’ immediately before them. The

placement of the commas make this a less tenable

interpretation than the one suggested by these

defendants. But even this interpretation would

require transshipment for the purpose of sale

rather than for use by the owner. The definition

of the word transshipment is still not affected by

this qualifier.

Thus, the suggestion that the words "for

sale'' must modify the words "personal property”’

is totally unsupported.

VI

CONCLUSION

The plaintiff's interpretation is not supported

by the language of the statute, by the legislative

statement of the statute's scope, by administrative

interpretation, or by the Federal or State const

constitutions,

Adding language by implication is not only

unnecessary, it flies in the face of the general rule

in this state (and throughout the country) that the

plaintiff must show that they clearly fall within

the exemption. (Cypress Lawn Cemetery Assn.

v. San Francisco, supra; Atlantic R. R. Co. v.

Phillips, supra. )

That showing has not been made,

DATED:

Respectfully submitted,

JOHN H. LARSON, County Counsel

By ss

JAMES DEXTER CLARK

Deputy County Counsel

Attorneys for Defendants

A-55

DECLARATION OF JAMES DEXTER CLARK

I, JAMES DEXTER CLARK, declare:

That Iam the Deputy County Counsel

assigned to this matter.

That I have reviewed recent legislation to

determine what amounts of losses to counties are

being reimbursed pursuant to Revenue and Taxa-

tion Code Sections 2201, et seq., which provide

a maximum ceiling on local tax rates and extend

reimbursement for the localities' loss of funds

as a result of exemptions. The chapters I re-

viewed are attached. The show that the legisla-

ture specifically authorized amounts of reimburse-

ments ranging from $3, 750.00 to $180, 000. 00.

That my files reveal that well over 30 suits

have been filed by importers contesting the same

issue as is involved in this case. Cases are

presently being served against the County on this

issue at the rate of one per week. 1! conserva-

tively estimate that those actions involve over

$1, 000, 000.00 of actual taxes which the importers

claim they are exempt from peying as a result of

Revenue and Taxation Code Section 225. Ihave

knowledge of the fact ‘hat many importers have

not filed suit and that many more suites of the

same type are expected.

The above-facts are within my own personal

knowledge. If called upon to testify thereto, I

could competently do so.

A-56

I declare under penalty of perjury that the

foregoing is true and correct.

Executed this 22nd day of December, 1977,

at Los Angeles, California,

ss

JAMES DEXTER CLARK

(Exhibits Omitted)

DECLARATION OF ARTHUR LEW

I, ARTHUR LEW, declare:

That Iam an Appraiser II with the County

of Los Angeles and am presently assigned legal

and legislative research matters. I[holda B. S.

Degree in Marketing Management Ressearch which

included studies in distribution methods. lIalso

hold a Juris Doctor degree and am admitted to the

California Bar.

That I have researched the are of distribu-

tion pattersns of goods, and I have found that

there is a flow of traffic of substantial proportions

by which goods arrive in California from other

states for distribution throughout the United States

or throughout various regions of the United States.

Thus, there is a flow of traffic which corresponds

with that described in Revenue and Taxation Code

Section 225 which involves United States goods.

That I have also reveiwed the case Sea-Land

Services Inc. v. County of Alameda, 12 Cal, 3d

772, and found described therein a substantial .

amount of sea-borne traffic from the east coast

to California via the Panama Canal,

The above cacts are within my own personal

knowledge. If called upon to testify thereto, I

could competently do so,

I declare under penalty of perjury that the

foregoing is true and correct,

Executed this 22 day of December, 1977,

Los Angeles, California.

ss

ARTHUR LEW

(Declaration of Mailing Omitted)

CAPTION OMITTED

DECLARATION OF

JOSEPH W. GRANT

SUPERIOR COURT OF THE

STATE OF CALIFORNIA, FOR THE

COUNTY OF LOS ANGELES

I, JOSEPH W. GRANT, declare:

That Iam a Senior Appraiser for the County

of Los Angeles with seven years of practical

experience in appraising property similar to that

:nvolved in this action. Ia am certified as an

appraiser by the State of California.

I have, during the last seven years, appraised

and supervised appraisals of many firms similar to

Walter Fleischer Co., Inc. Ihave reviewed the

information submitted by Walter Fleischer Co,

All firms with the varied inventory which the plain-

tiff has informed us it has, sort their inventory by

type. Based upon the information supplied by the

plaintiff for the 1976-77 year, I believe it does

sort its goods by type once unloaded from transport

for storage.

I have reviewed the financial information

supplied by plaintiff for the 1976-77 year. The

amount of inventory in stock on the lien date and

the cost of goods sold for the entire year (extra-

polated fromthe first 8 months) indicate a turnover

rate of 3.4 per year. In other words the average

stock will be in the plaintiff's inventory for over

3-1/2 months.

The above-facts are within my own personal

knowledge. If called upon to testify thereto, I

could competently do so,

A-60

I declare under penalty of perjury that the

foregoing is true and correct.

Executed this 23rd day of December 1977 at

Los Angeles, California.

ss

JOSEPH W. GRANT

(Declaration of Mailing Omitted)

\-61

CAPTION OMITTED

Ruling on submitted matter

SUPERIOR COURT OF THE

STATE OF CALIFORNIA FCR THE

COUNTY OF LOS ANGELES

WALTER FLEISHER CO., INC., v.

COUNTY OF LOS ANGELES, etal.,

No. 195366

The matter, submitted December 27, 1977, is

now ruled on as follows: Counsel need no re-

minder that this Court rendered summary judg-

ment for the plaintiff in All American Distributing

Co v County of Los Angeles, # C182 173, in which

the facts are somewhat similar although not identi-

cal to those in the present case. The principal

distinction is the shipment out of California of all

of All-American's California-stored goods, while

in Fleisher only 74. 2% of its shipments were out

of state. Thus, pursuant to secs, 225 and 225. 1(1)

Rev. & Tax Code, Fleisher seeks an exemption of

74, 2% of its $213, 468.95 inventory.

Despite the fact that ''foolish consistency is the

hobgoblin of small minds, ''* this Court is still of th

of the view that All-American was decided correctly

and that there is no essential distinction in Fleisher

which requires a different result.

Summary judgment is rendered for plaintiff; its

counsel shall prepare and serve an appropriate

judgment.

‘possibly anonymous; at least unacknowledged.

A copy of this minute order is sent to counsel

this date.

A-62

CAPTION OMITTED

NO, C 195 366

SUMMARY JUDGMENT

SUPERIOR COURT OF THE

STATE OF CALIFORNIA FOR THE

COUNTY OF LOS ANGELES

WALTER FLEISHER CO., INC., v.

COUNTY OF LOS ANGELES, etal.,

No. 195366

This cause having come on regularly for

hearing in Department 85 of the above entitled court,

the Honorable George M. Dell, Judge Presiding,

on December 27, 1977, pursuant to duly noticed

Motion for Summary Judgment filed by the plaintiff;

Gerald T. Manpearl and Thomas C. Corcovelos

for Baker, Ancel and Redmond, appearing for

plaintiff Walter Fleisher Co., Inc.; and James

Dexter Clark, Deputy County Counsel, for the

defendants County of Los Angeles and City of Los

Angeles; and the Court having considered the plead-

ings, the documents presented and filed with respect

to the motions, and having heard and considered

the contentions of counsel; anc the Court having

heretofore granted the said motion of plaintiff on

the statutory ground that there is no defense to the

action, and that no triable issue of fact is presented:

IT IS ORDERED that the Answer of the

defendants County of Los Angeles and City of

Los Angeles be and it is stricken.

IT IS FURTHER ORDERED, ADJUDGED

AND DECREED that plaintiff Walter Fleisher Co.,

Inc., have judgment against the defendants

County of Los Angeles and City of Los -\ngeles

in the sum of $3,595.99 as principal, and $265. 41

as interest, for a total of $3, 861. 4C.

A-63

TI IS FURTHER ORDERED, ADJUDGED

AND DECREED that plaintiff Walter Fleisher Co.,

Inc, have judgment against the defendants County

of Los Angeles and City of Los Angeles for costs

in the sum of $

Dated this 7thday of March _, 1978.

GEORGE M. DELL

Judge of the Los Angeles

Superior Court

(Declaration of Mailing Omitted)

A-64