# Petition — Tully v. New England Petroleum Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1700%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1981 - **Citation:** 452 U.S. 967 ## Text P onice-s “ey io Coal. us| 80-1864 FILED IN THE \PR 28 1988. —_— Court of the United Drage ss. October Term, 1980 No. NEW ENGLAND PETROLEUM CORPORATION, e Respondent, -against- JAMES H. TULLY., Commissioner of Taxation and Finance of the State of New York, and ROBERT ABRAMS, Attorney General, State of New York, " Petitioners. MOBIL OIL CORPORATION, ATLANTIC RICHFIELD COMPANY, GULF OIL CORPORATION, UNITED REFINING COMPANY, INC., CHEVRON, U.S.A., INC., AMOCO OIL COMPANY, TEXACO OIL., and EXXON CORPORATION, Respondents, -against- JAMES H. TULLY, JR., THOMAS H. LYNCH, and FRANCIS KOENIG, Constituting the New York State Tax Commission; ROBERT ABRAMS, Attorney General of the State of New York; and JAMES L. LaROCCA, Commissioner of the New York State Energy Office, Petitioners. AMERADA HESS CORPORATION, Respondent, -against- JAMES H. TULLY, JR., THOMAS H. LYNCH, AND FRANCIS KOENIG, Constituting the NEW YORK STATE TAX COMMISSION; ROBERT ABRAMS, Attorney General of the State of New York; and JAMES L. LaROCCA, Commissioner of the New York State Energy Office, Petitioners. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit. ROBERT ABRAMS ., Attorney General of the State of New York Attorney for Petitioners The Capitol Albany, New York 12224 SHIRLEY ADELSON SIEGEL Telephone (518) 474-8101 Solicitor General PETER G. CRARY Assistant Attorney General Of Counsel i Question Presented Does not the Tax Injunction Act, 28 USC § 1341, divest the Federal courts of jurisdiction to enjoin enforcement of a provision of a New York State tax statute on who shall bear the tax, when that injunction would necessarily prevent collection of the tax itself? TABLE OF CONTENTS BOND CE AWRORRIOS. «6 os o's cicdect scan sents GE SORE TONE onc sc0esausadhamenekesmienanenee INO, vn 60s 6.0000 es 14004) 0eama Eg gg he eerrrrerr etree ee Memorandum and Decision of the District Court Opinion of the Court of Appeals ..............008. Reasons for Granting the Writ The decision below resolved a significant and recurrent issue concerning the scope and purpose of the Federal Tax Injunction Act (28 USC § 1341) ina manner contrary to established Federal authority ........... CONCLUSION — For the reasons stated, the petition for a writ of certiorari should be granted ....... APPENDICES APPENDIX A — Memorandum-decision of the District Court for the Northern District of New York ... APPENDIX B — Opinion of the Court of Appeals, PREGRE GO occindavesdpideckene rewesemane li TABLE OF AUTHORITIES CASES Czajkowski v Illinois, 460 F Supp 1265 (ND III, 1977), afid 588 F2d 839 (7th Cir, 1978) .....ccccecees First Agricultural National Bank v Tax Commission, 392 Se RO RPE 6 kr eRe aR e ON CELEAUESER SO 8 6 Helmsley v Detroit, 320 F2d 476 (6th Cir, 1963) ..... Hillsborough v Cromwell, 326 US 620 (1946) ....... Lynch v Household Finance Corp., 405 US 538 (1972) Mandel v Hutchinson, 336 F Supp 772 (CD Cal, 1971), affd 494 F2d 364 (9th Cir, 1974) .............. Matthews v Rodgers, 284 US 521 (1932) ........... Moe v Salish & Kootenai Tribes, 425 US 463 (1976).. Perez v Ledesma, 401 US 82 (1971) ...........eeee Robinson Protective Alarm Co. v Philadelphia, 581 F2d BEE Ge GE ATE ok oe Soke Sr FA eee Rekha ewes Steffel vy Thompson, 415 US 452 (1974) .... te eeeees Tully v Griffin Inc., 429 US 68 (1976) ......0eeeeeee Statutes Emergency Petroleum Allocation Act (15 USC §§ 751, er PE Si pA Ua aan eC CAWah sae KEEN KARAS. 0.960008 oa ak cS kctie css Comme Tax Injunction Act (28 USC § 1341) ............... PAGE 5, 6 #% TABLE OF AUTHORITIES (cont’d.) Statutes (cont’d.) MEUM RBEBUDY i Soceors nc cae couse cs Peoccess | Peg DP TEOD, 6 a hisicncdcdccsnevecsceceve New York Laws of 1980, chs 271, 272 (including New PAGE -*% IN THE Supreme Court of the United States October Term, 1980 No. NEW ENGLAND PETROLEUM CORPORATION, Respondent, -against- JAMES H. TULLY., Commissioner of Taxation and Finance of the State of New York, and ROBERT ABRAMS, Attorney General, . State of New York, Petitioners. MOBIL OIL CORPORATION, ATLANTIC RICHFIELD COMPANY, GULF OIL CORPORATION, UNITED REFINING COMPANY, INC., CHEVRON, U.S.A., INC., AMOCO OIL COMPANY, TEXACO OIL., and EXXON CORPORATION, Respondents, -against- JAMES H. TULLY, JR., THOMAS H. LYNCH, and FRANCIS KOENIG, Constituting the New York State Tax Commission; ROBERT ABRAMS, Attorney General of the State of New York; and JAMES L. LaROCCA, Commissioner of the New York State Energy Office, Petitioners. AMERADA HESS CORPORATION, Respondent, -against- JAMES H. TULLY, JR., THOMAS H. LYNCH, AND FRANCIS KOENIG, Constituting the NEW YORK STATE TAX COMMISSION; ROBERT ABRAMS, Attorney General of the State of New York; and JAMES L. LaROCCA, Commissioner of the New York State Energy Office, Petitioners. Petition for a Writ of Certiorari to the United States Court of Appeals for the Second Circuit. — The petitioners respectfully pray that a writ of certiorari issue to review that portion of the judgment of the United States Court of Appeals for the Second Circuit entered in this proceeding on l % le 2 January 28, 1981 which affirmed the District Court’s denial of petitioners’ motion to dismiss for lack of jurisdiction. Opinions Below The memorandum-decision of the District Court for the Northern District of New York (NEAL P. McCURN, D.J.), dated September 19, 1980, which, inter alia, denied petitioners’ motion to dismiss for lack of Federal jurisdiction, pursuant to 28 USC § 1341, is reported at 499 F Supp 888 and is set forth as Appendix “A”. The opinion for affirmance of the Court of Appeals, dated January 28, 1981 which affirmed the District Court’s denial of Appendix “B”. Jurisdiction The judgment of the Court of Appeals for the Second Circuit was entered on January 28, 1981, affirming the order of the United States District Court for the Northern District dated September 4, 1980. The jurisdiction of this Court is invoked under 28 USC § 1254(1). Statutes Involved 28 USC § 1341, New York Tax Law, § 182 and chapter 272 of the Laws of New York of 1980 are set forth in pertinent part in Appendix “C”. Statement of the Case In June, 1980, New York Governor Hugh Carey signed into law two bills (chs 271 and 272 of the Laws of New York of 1980), which created New York Tax Law, § 182, establishing a 2% tax on the gross income of oil companies allocable to sources in New York. The express purpose of this law was to generate revenue to aid New York’s public transportation system (ch 272 of the Laws of New York of 1980, § 1). *" 3 In order to insure that the burden of this tax would be borne by the oil companies, themselves, and not the already overburdened consuming public, the Legislature provided in subdivision 12(a) of New York Tax Law § 182 (the “anti-pass through provision”) that the tax imposed “shall be a liability of the oil company...and shall not be included, directly or indirectly, in the sales price of its products sold in this state.” Because this provision was an essential element of the tax policy underlying section 182, the Legislature expressly made the continued vitality of the tax, itself, dependent upon the validity of that provision. Thus, section 5 of chapter 272 of the Laws of New York of 1980 provides that if enforcement of the anti-pass through provision is enjoined, the tax itself will cease to have force and effect. } Thereafter, respondents, ten oil companies, instituted this action in the District Court for the Northern District of New York, seeking (1) a declaration that the anti-pass through provision is unconstitutional under the Supremacy, Commerce and Due Process Clauses of the United States Constitution and (2) a permanent injunction against enforcement of that provision. The respondents subsequently moved for summary judgment upon their claim that the anti-pass through provision is preempted by the Emergency Petroleum Allocation Act (15 USC § 741, et seq.) and its regulations and is therefore void under the Supremacy Clause. . The petitioners, in turn, moved to dismiss the action for lack of Federal jurisdiction, relying on the Tax Injunction Act (28 USC § 1341), which precludes Federal courts from enjoining “the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” Memorandum and Decision of the District Court The District Court denied petitioners’ motion to dismiss, holding section 1341 inapplicable to this action. The Court recognized that an injunction against enforcement of the anti-pass through °°. 7? 4 provision would terminate the entire tax imposed by New York Tax Law § 182, but nevertheless held this action beyond the jurisdictional prohibition of the Tax Injunction Act. This holding was premised upon the rationale that the anti-pas through provision was a “price control measure, rather than a rule of tax incidence” (A7) roceeding to the merits, the Courts granted respondents’ motion fofsummary judgment, declaring the anti-pass through provision in violation of the Supremacy Clause and enjoining its enforcment.* Opinion of the Court of Appeals The Court of Appeals affirmed the denial of petitioners’ motion to dismiss, agreeing with the District Court’s determination that the anti-pass through provision was a price control measure, enacted under the State’s police power, rather than its taxing power. Therefore, the Court concluded, a “constitutional attack under the Supremacy Clause on that aspect of the law is not within Section — 1341” (A29). The Court found this result unaffected by the statutory linkage between the validity of the anti-pass through provision and the continued existence of the oil franchise tax under New York Tax Law § 182, reasoning that this linkage was “the calculated decision of the legislature” (A28). The Court also dismissed the petitioners’ appeal from the District Court’s grant of summary judgment, holding that the preemption issue raised in this litigation falls within the exclusive appellate jurisdiction of the Temporary Emergency Court of Appeals, pursuant to section 5 of the Emergency Petroleum Allocation Act (15 USC § 754{a][i]). Petitioners’ appeal from the grant of summary judgment is presently pending in that Court.** *This judgment has been stayed from the date of its entry to the present time. **Should defendants prevail in establishing that there is no preemption, extensive litigation is further anticipated on plaintiffs’ claims based on the commerce clause and due process. Meanwhile, defendants maintain that the motion to dismiss for lack of jurisdiction was erroneously decided. #% *y 5 REASONS FOR GRANTING THE WRIT The decision below resolved a significant and recurrent issue cuncerning the scope and purpose of the Federal Tax Injunction Act (28 USC § 1341) in a manner contrary to established Federal authority. The issue of threshold jurisdiction involved in petitioners’ motion to dismiss is of extreme significance, likely to recur with troublesome frequency within contexts similar to the instant matter. As recognized by the New York State Legislature, record oil profits caused by international market conditions make the oil industry an appropriate source of the additional State tax revenue increasingly necessary to alleviate budget problems resulting from ever-rising costs (ch 272 of the Laws of New York of 1980, § 1). Any state statute aimed at the oil industry, however, must address both the effect such taxes could have upon already intolerable oil prices and the resultant impact an increase in these prices would have upon a state’s economy. It is clear, therefore, that considerable legislative ingenuity is required to devise tax statutes which will tap this source of revenue without contributing to the country’s debilitating inflationary cycle. The decision below will have a chilling effect on the exercise of such ingenuity, casting the spectre of federal injunctive intervention upon all state tax policy decisions addressed to these issues. Indeed, the availability of such a federal remedy could pose a grave threat to the operation of state fiscal systems, since, as recognized by the Court of Appeals (A24), it has been estimated that section 182’s oil tax would raise 235 million dollars annually. ; The decision below conflicts with established equitable principles of Federal/ State comity intended to avoid such federal intervention in state tax policy matters. This Court has often noted that federal district courts are “under an equitable duty to refrain from interfering with a State’s collection of its revenue except in cases where an asserted federal right might otherwise be lost” (Tully v Griffin, Inc., 429 US 68, 73 [1976]). Prior to the enactment of section 1341, a unanimous Court in Matthews v Rodgers, 284 US 521, 525-526 (1932), discussed the sensitive nature of the use of 6 Federal injunctions to enjoin the assessment or collection of a state tax: “The scrupulous regard for the rightful independence of state governments which should at all times actuate the federal courts, and a proper reluctance to interfere by injunction with their fiscal operations, require that such relief should be denied in every case where the asserted federal right may be preserved without it. Whenever the question has been presented, this Court has uniformly held that the mere illegality or unconstitutionality of a state or municipal tax is not in itself a ground for equitable relief in the courts of the United States.” This vitally important principle is embodied in the express mandate of the Tax Injunction Act (28 USC § 1341) that no Federal injunction may issue to restrain the “assessment, levy or collection” of state taxes. Four decades of Supreme Court pronouncements reveal that “the statute has its roots in equity practice, in principles of federalism, and in recognition of the imperative need of a State to administer its own fiscal operations” (Tully v Griffin, Inc., 429 US 68, 73[1976], supra, citing Moe v Salish & Kootenai Tribes, 425 US 463 [1976]; Hillsborough v Cromwell, 326 US 620, 622-23 [1946]; Great Lakes Dredge & Dock Co. v Huffman, 319 US 293 [1943]; Matthews v Rodgers, supra). In an age of heightened sensitivity toward the role of the states in the federal system, this Court’s decisions continue to affirm that “federal courts will not entertain anticipatory adjudication which interferes with state and local tax administration if there is an adequate state remedy” ( Robinson Protective Alarm Co. v Philadelphia, 581 F2d 371, 376 [3d Cir, 1978], citing Steffel vy Thompson, 415 US 452, 472 [1974]; Lynch v Household Finance Corp., 405 US 538, 542 n 6 [1972]; Perez v Ledesma, 401 US 82, 126-28 & n 17[BRENNAN, J., concurring in part and dissenting in part)). Such interference with New York State’s tax administration is manifest in this case. Despite any incidential price control effect it might have, the anti-pass through provision at issue here is an 7% 7 integral aspect of the tax policy sought to be accomplished by section 182 (see ch 272 of the Laws of New York of 1980, § 1). The purpose of the anti-pass through provision is not to regulate oil price levels at all, but rather to prevent the tax on oil companies from fueling inflation, by insuring that its ultimate burden is not passed on to the consumers. Furthermore, the allocation of a tax’s economic burden is clearly an element of the State’s taxing power, not its poli i authorities have broad power to determine who sh of government (First Agricultural National Bank v Tax Com- mission, 392 US 339, 347-48 [1968]). The exercise of this power is especially evident in the area of sales taxes, for example, whose economic impact is often directed specifically by the taxing statutes (see, e.g., NJSA, §§40.48-8.7[b], 8.20[b]; Ohio Rev Code Ann, § 5739.29; NY Tax Law § 1133{d]). The willingness of the courts below to interfere with the exercise of New York’s taxing power is directly contrary to the express provisions of section 1341 and the equitable principles upon which that section is founded. Moreover, since the Legislature considered the anti-pass through provision such an essential element of the tax statute, it expressly made the continued existence of the tax, itself, dependent upon the validity of that provision (ch 272 of the Laws of New York of 1980, § 5).* It cannot be gainsaid, therefore, that if respondents are successful in their attack upon the anti-pass through provision, the tax imposed by New York-Tax Law, § 182 will cease to exist. Because an injunction against enforcement of that provision would thus, as a matter of law, “restrain the assessment, levy or *That section provides, in pertinent part: “{i]f the provisions of [the anti-pass through section] is [sic]: (i) adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review; *_* *& & all of the provisions of this act shall cease to be in force and effect [ten davs thereafter].” 8 collection” of the section 182 oil tax, this case falls squarely within the provisions of the Tax Injunction Act. In holding to the contrary, the Court below gave that Act a narrow, begrudging interpretation at odds with the broad construction accorded by Federal courts in other circuits (see, e.g., Helmsley v Detroit, 320 F2d 476 (6th Cir, 1963); Czajkowski v Illinois, 460 F Supp 1265, 1271-74 (ND Ill, 1977), affd 588 F2d 839 (7th Cir, 1978); Mandel v Hutchinson, 336 F Supp 772, 779 (CD Cal, 1971), affd 494 F2d 364 (9th Cir, 1974). One court has, in fact, noted that Federal courts have applied the jurisdictional bar of section 1341, “virtually without exception in favor of the State taxing authorities.” Mandel v Hutchinson, supra, p 778. In Mandel, the plaintiff sought to enjoin enforcement of a provision in the California Constitution which limited certain property tax exemptions to veterans who were California residents at the time of entering into military service. The Court granted the defendants’ motion to dismiss for lack of jurisdiction despite plaintiff's argument that he was seeking “only to enjoin the enforcement of the [Constitution’s] residency requirement,” rather than “ to restrain the assessment, levy or collection” of any tax within the meaning of section 1341 (supra, p 779). The Court found dismissal mandated by section 1341 because “there is a direct relationship between the enforcement of the residency requirement and the amount of taxes collected. If the residency requirement falls, the number of allowable exemptions increases and the amount of tax revenue decreases.” (Emphasis added.) Just as the plaintiff in Mandel argued that he was seeking only to enjoin the enforcement of the residency requirement and not the tax itself, the Court below reasoned that the District Court’s injunction restrained simply the anti-pass through provision of the tax. Federal authority establishes, however, that the Tax Injunction Act nevertheless requires dismissal since “there is a direct relationship” between the anti-pass through provision and “the amount of taxes collected.” The broad interpretation Federal courts have given section 1341's scope is aptly illustrated by Czajkowski v Illinois, 460 F Supp 1265 (ND Il, 1977), affd 588 F2d 839 (7th Cir, 1978), supra. In that 9 case, plaintiffs sought to enjoin the enforcement of two provisions of Illinois’ “regulatory scheme” taxing the distribution, sale and use of cigarettes. These provisions authorized state revenue agents who observe Illinois residents purchasing cigarettes at discount prices in Indiana stores to follow those residents into Illinois, and then to conduct warrantless searches of their automobilies. The defendants moved to dismiss pursuant to 28 USC § 1341. The Court, noting that “[i]t is arguable that plaintiffs are only seeking to enjoin the state from using unconstitutional methods and procedures to collect the taxes, rather than the collection of taxes itself”, nonetheless granted the defendant’s motion to dismiss since “in order to grant plaintiffs the relief they request, we would in effect be enjoining the collection of cigarette taxes” (supra, p 1272). As the Court wrote, supra: “Section 1341 cannot be avoided by attacks on the administration and implementation of the taxing scheme rather than on the validity of the tax itself...” The Court below ignored the broad interpretation given section 1341 by other Federal courts and affirmed the granting of an injunction which would inevitably disrupt New York’s taxing process. Accordingly, the decision of the Court below raises serious questions in a sensitive area of Federal/ State comity. It may, in fact, signal a new-found willingness by the Federal courts to intrude into areas involving the States’ tax power by carving unwarranted exceptions to section 1341’s broad prohibition. CONCLUSION For the reasons stated, the petition for a writ of certiorari should be granted. Dated: Albany, New York April 22, 1981 ** SHIRLEY ADELSON SIEGEL Solicitor General PETER G. CRARY Assistant Attorney General Of Counsel 10 Respectfully submitted, ROBERT ABRAMS Attorney General of the State of New York Attorney for Petitioners APPENDIX % A-l APPENDIX A MOBIL OIL CORP. v. TULLY Cite as 499 F.Supp. 888 (1980) 499 FEDERAL SUPPLEMENT MOBIL vIL CORPORATION, Atlantic Richfield Company, United Refining Company, Inc. and Gulf Oil Company Plaintiffs, ‘ v. James H. TULLY, Jr., Thomas H. Lynch and Francis Koenig, Constituting ty, New York State Tax Commission; Ro}. ert Abrams, Attorney General of the State of New York; and James L. La. Rocca, Commissioner of the New Yor; State Energy Office, Defendants. NEW ENGLAND PETROLEUM CORPORATION, Plaintiff, v James H. TULLY, Jr., Commissioner of Taxation and Finance of the State of New York, and Robert Abrams, Atter. ney General, State of New York, De. fendas.‘s. AMERADA HESS CORPORATION, Pisintiff, v. James FE. TULLY, Jr., Thomas H. Lynch, and Francis Koenig, Constituting the New York State Tax Commission; Red. ert Abrams, Attorney General ef the State of New York; and James L. La. Rocca, Commissioner of the New York State Energy Office, Defendants. Nos. 80-CV-543, 80-CY-544, 80-CV-578, United States District Court, N. D. New York. Sept. 19, 1980. '% A-2 Oil companies bruught action seeking declaratory and injunctive relief with re spect to antipass—through provision of New York statute imposing gross receipts tax os oil companics. On plaintiffs’ motion for summary judgment and defendants’ motica to dismiss, the District Court, McCurn, J. held that: (1) action was not barred by Tax Injunction Act; (2) New York tax was & franchise tax permitted to be passed through under federal regulation; and (3) antipass-through provision of New York law was preempted by federal regulation. Order accordingly. 1. Courts = 508(6) Tax Injunction Act was‘ intended to eliminate discrimination between citizens of a state who are confined te state court in challenging illegal tax assessments and for- eign corporations who are able to take ad- vantage of diversity jurisdiction in federal court and was also intended to prevent for eign corporations from paralyzing state fis- cal operations by refusing to pay siate tax- es and then commencing long and expensive litigation in federal court. 28 U.S.C.A. § 1341. 2. Courts ¢=508(6) Tax Injunction Act applies equally to actions for declaratory or injunctive relief. 28 U.S.C.A. § 1341. 3. Courts @=508(6) Action secking declaration that provi- sion of New York law prohibiting the pass— through of the state’s two percent gross receipts tax on certain oil companies was not an attack on the validity of the tax or the statutorily prescribed administrative procedures for assessing, ievying or collec- A-3 ting the tax and thus was not barred by the Tax Injunction Act, even though the New York statute contained a provision termi- nating the tax in the event that the anti- pass-through provision were invalidated. 28 U.S.C.A. § 1341; N.Y. Tax Law § 182, subd. 12a); N.Y.Laws 1980, c. 271, § 12 as amended. 4. Courts @=508(6) For purposes of determining applicabil- ity of the Tax Injunction Act, the federal definition of tax is to be employed. 28 U.S.C.A. § 1341. 5. States ¢=4.11 State statutes can be preempted by federal regulations properly promulgated under a federal statute when there is a conflict between state and federal regula- tion. U.S.C.A.Const. Art. 6, cl. 2. 6. States 4,13 When Congress has chosen to complete- ly occupy the field to the exclusion of the states, state may not regulate within the field even when the regulation is in harmo- ny with the federal scheme; if state law conflicts with valid federal statute, the state is preempted even though Congress has not completely foreclosed state legisla- tion in a particular area. U.S.C.A.Const. Art. 6, cl. 2. 7. States 4.10 Existence of pervasive and complex regulations under federal law does not, in every case, demonstrate a congressional in- tent to completely occupy a particular field so as to preempt any state regulation in that field. 8 States o=4.10 Preemption conflicts may be found, A-4 even absent ar sctual conflict between state and federal law, where it is clear that Congress has addressed the issue and decid- ed that the particular field should remain unregulated. 9. States 4.13 State law cannot escape invalidation on preemption grounds merely because its pur- pose promotes a valid state intcrest if its effect frustrates the full effectiveness of federal law. U.S.C.A.Const. Art. 6, cl. 2. 10. Federal Civil Procedure 2465 Summary judgment is not necessarily inappropriate simply because the legal is- sues are complex. Fed.Rules Civ.Proc. Rule 56, 28 U.S.C.A. 11. War and National Emergency 124 Even if an oil refiner has not applied cost increases cqually among all classcs of purchasers, the refiner will be deemed to have done so under regulations adopted pursuant to the Emergency Petroleum Allo- cation Act and will not have the deemed amounts available for future increases. Emergency Petroleum Allocation Act of 1978, § 4a), 15 U.S.C.A. § 753(a). 12. States o=4.16 Existence of a specific preemption pro- vision in federal legislation does not pre- clude application of the general preemption principles. 13. Courts 89 Letter written by acting general coun- sel for Department of Energy opining that a state’s antipass-through provision of a gross receipts tax imposed on certain oii companies did not conflict with the Emer- gency Petroleum Allocation Act and its reg- 7% A-5 ulations was not decisive of the irsue. Emergency Petroleum Allocation Act of 1973, § Gb), 15 U.S.C.A. § 755(b). 14. War and National Emergency ¢124 New York's yross receipts tax imposed on oil company receipts except those re- ceived for the sale of fuel oil for residential purposes was a state franchise tax falling within that group of taxes which could, under regulations adopted pursuant to the Emergency Petroleum Allocation Act, be passed through to the consumer. Tax Law N.Y. § 182; Emergency Petroleum Allioca- tion Act of 1973, § 42), 15 U.S.C.A. § 753(a). 15. War and National Emergency ¢124 In determining whether antipass— through provision of New York’s gross re- ceipts tax imposed on oil companies was preempted by federal regulation, court was required to.look not only at the particular regulation but at the objectives which the Department of Energy sought to further by its promulgation. Emergency Petroleum Allocation Act of 1973, § 4(a), 15 iJ.S.C.A. § 753(a). 16. States 4.10 Antipass—through provision of New York’s gross receipts tax imposed on oil companies was preempted by federal regu- lation in the field both with respect to oil products covered by federa) regulauion and those exempted from federal regulation. Emergency Petroleum Allocation Act of 1973, §§ 4a), 12, 15 U.S.C.A. §§ 75%(a), 760a; N.Y. Tax Law § 182, subd. 12; U.S. C.A.Const. Art. 6, cl. 2. Donovan, ‘Leisure, Newton & Irvine, New York City, Bond, Schoeneck & King, Syra- cuse, N. Y., for plaintiffs Mobil Oil Corp., 7% A-6 Atlantic Richfield and United Refining Co.; Thomas R. Trowbridge, III, New York City, John M. Freyer, Syracuse, N. Y., of counsel. Edward F: Gerber, Syracuse, N. Y., Ar- thur L. Vangeli and Sydney M. Avent, Phil- adelphia, Pa., for Gulf Oil Corp. Cleary, GottlieL, Sieen & Hamilton, New York City, Bouck, Holloway & Kiernan, Al- bany, N. Y., for plaintiff New England Petroleum; ‘James C. Blair, New York City, Warner Bouck, Albany, N. Y., of counsel. Kaye, Scholer, Fierman, Hays & Handler, New York City, Hancock, Estabrook, Ryan, Shove & Hust, Syracuse, N. Y., for plaintiff Amerada Hess Corp.; Stanley D. Robinson, New York City, William L. Allen, Jr., Syra- cuse, N. Y., of counsel. Robert Abrams, Atty. Gen., State of New York, Albany, N. Y., pro se and for defend- ant LaRocca; Shirley Siegel, Sol. Gen., Al- bany, N. Y., of counsel. Paul, Weiss, Rifkind, Wharton & Garri- son, New York City, for defendants Tully, Lynch and Koenig, constituting the New York State Tax Commission; Edward Cos- tikyan, Simon H. Rifkind, New York City, of counsel. ORDER McCURN, District Judge. Defendants have moved for an order dis- missing these three actions for lack of sub- ject matter jurisdiction pursuant to 28 U.S.C. § 1341. Plaintiffs in each action Lave moved for an order granting summary judgment in their favor. The Court has concluded after full hearing and after con- sideration of the arguments of counsel on both motions, the memoranda submitted 7% A-7 therewith, both in support and opposition, and the exhibits attached thereto, that the defendants’ motion to dismiss should be de- nied and that plaintiffs’ motions for sum- mary judgment should be granted and has further concluded that in the interests of judicial economy and in fairness to the liti- gants, this Order should be issued forthwith with a Memorandum—Decision containing the Court's findings of fact and conclusions of law to follow, as to avoid the need for the hearing scheduled for September 10, 1980, on plaintiff New England Petroleum Corporation’s application for a preliminary injunction with a consolidated hearing on the merits. It is therefore ORDERED, ADJUDGED AND DE- CREED that: 1. The defendants’ motion to dismiss the plaintiffs’ complaints in these three actions is denied; 2. The plaintiffs’ motions for summary judgment (a) declaring the anti—pasas through provision of section 182(12Xa) of the New York Tax Law as added by L.1980 ch. 271, § 4, as amended by ch. 272, § 1, and ch. 272, § 2, invalid as pre-empted by the Emergency Petroleum Allocation Act, 15 U.S.C. §§ 751—760h and the Mandatory Pe- troleum Price Regulations, 10 C.F.R. Part 212, promulgated thereunder and thus void under the Supremacy Clause of the United States Constitution and (b) enjcining de- fendants, their delegates and successors in office from enforcing the anti-pass through provision against plaintiffs in these actions, are granted; 3. Entry of judgment in these actions is hereby stayed until September 17, 1980, and in the event that a Memorandum—Decision has not been issued by the Court by that time, the Court shall, upon notice to the -% A-8 parties, extend the stay until such time as a decision is issued and the defendants have had a reasonable time to seek a further stay from the United States Court of Appeals for the Second Circuit. IT IS SO ORDERED. MEMORANDUM AND DECISION Plaintiffs in these actions seek (4) a dec- laration that section 182(12) of the New York Tax Law, as added by L.1980, ch. 271 § 4 and ch. 272 § 2, which prohibits the pass—through of the State's recently cnact- ed two (2%) percent gross receipts tax on certain oil companies is unconstitutional and thus invalid and (b) a permanent in- junction enjoining the defendants from en- forcing the anti-pass through provision. Relief is sought on the grounds that the anti—pass through provision (1) establishes a state price control rule which conflicts with the Federal Emergency Petroleum Alloca- tion Act of 1978, §§ 1-19, 15 U.S.C. § 751- 760h as‘amended, (EPAA), and the Federal Mandatory Petroleum Price Regulations, 10 C.F.R. Part 212 (Price Regulations) promul- gated thereunder, and is thus void under the Supremacy Clause of the United States Constitution (U.S.Const. Art. VI, cl. 2); (2) impermissibly burdens interstate commerce and thus is void under the Commerce Clause of the United States Constitution (U.S.Const. Art. I, § 8, cl. 8); and (8) con- travcnes the Due Process Clause of the Fourteenth Amendment to the United States Constitution. (U.S:Const. Amend. XIV, § 1). Plaintiffs in all three actions assert juris- diction under 28 U.S.C. §§ 1331 and 1387. In addition, plaintiffs in the Mobil Oil and Amerada Hess actions claim that exclusive ’* 7. A-9 original jurisdiction is vested in this Court by § 211 of the Economic Stabilization Act of 1970 (12 U.S.C. § 1904 note), as expressly incorporated by reference in § 5S(a) of the EPAA (15 U.S.C. § 754(a)], and section 502(b) of the Department of Energy Organ- ization Act, 42 U.S.C. § 7192(b).! The three actions are presently before the Court on the defendants’ motion to dismiss pursuant to the Tax Injunction Act, 28 U.S.C. § 1341 and the plaintiffs’ motions for summary judgment under Rule 56 of the Fed.R.Civ.P. on their respective pre-emp- tion ciaims.* THE NEW. YORK LEGISLATION On June 18, 1980, the Governor of New York State signed into law two bills which impose an annual tax “upon every oil com- pany equal to two per centum of its gross receipts from all sources, or the portion thereof allocated within the State as herein- 1. Plaintiffs in the Mobil Oil action also include section 210(a) of the Econumic Stabilization Act of 1970, 12 U.S.C. § 1904 note in their exclusive jurisdiction claim. 2. A pretrial confe-cuce with regard to all three actions was held by the Court on July 29, 1980, for the purpose of establishing an accelerated litigation schedule. At that conference it was decided that defendants’ motion to dismiss would be argued on August 20, 1980. it was further determined that motions for summary judgment to be brought by the plainuifs would be heard on August 27, 1980, and would be limited to the parties’ pre-emption claims, without prejudice to plaintiffs’ seeking summa- ry judgment on their Commerce and wue Proc- ess claims. a later date. Plaintiff, New England Petroleum Corpora- tion's motion for a preliminary injunction with a consolidated hearing on the merits pursuant to Rule 65 of the Fed.R.Civ.P. was scheduled to commence September 10, 1960. *. A-10 after provided ....” (1.1980, ch. 271, § 4). organized capacity or of maintaining an office in this state, for all or any part of its taxable years.” Id. Pursuant to the stat- ute the term gross receipts covers ali re- ceipts with the exception of “(r]eceipts re- ceived by reason of any sale of fuel oil (excluding diesel motor fuel) used for resi- dential purposes” and “receipts from any sale for resale to a purchaser which is an oil company subject to tax under this section.” Id. Revenue collected through the imposition of this new tax is earmarked to go into the “regional transportation operating and cap- ital assistance fund”, created by the legisla- tion (L.1980, ch. 271 §§ 2, 11), and is to be used to provide operating and capital assist- ance to New York State’s mass transporta- tion system. An additional provision of the State's new revenue raising plan prohibits the pass-through of the tax in the prices charged to consumers for products sold by the oil companies in New York State. The anti-pass through provision, which is set forth in subsection 12(a) of the new section 182 of the New York Tax Law, provides that: The tax imposed by this section and any penalty which may be assessed under this subdivision shall be a liability of the oil company, shall be paid by such company and shall not be included, directly or indi- 3. The full text of Senate Bills 10188 and 10261 is set forth in an Appendix to this Memoran- dum-Decision. -.\ *y A-11 rectly, in the sales price of its products sold in this state. L.1980, ch. 27), § 4(12Xa). Under the new law, each oil company subject to the tax is required to file an annual report with the Commission of Tax- ation and Finance “certifying, under oath, that it has not included, directly or indirect- ly, in the sales price of. its products sold in this state the tax imposed by this section.” L.1980, ch. 271, § 4. Companies which are found to have passed on the cost of the new tax through increased product costs or who are found to have filed false reports in violation of the certification requirement are subject to a penalty equal to one hun- dred (100%) percent of the tax imposed for the year in which the violation occurs. L.1980, ch. 271, § 4(12\(bX{2). The plaintiffs in these actions are oil companies within the meaning of the legis- lation involved in this litigation and are, therefore, subject to the gross receipts tax. Each, in the normal course of business, would generally pass on the cost of the new tax through increased petroleum product prices to customers in the taxing jurisdic- tion. None of the plaintiffs challenges the im- position of the gross receipts tax itself. Rather, they challenge only the anti—pass through provivon of § 182(12\a), which is now in effect. As previously indicated, the plaintiffs’ motions for summary judgment which are before the Court are limited to the pre-emption claims. Analysis of the pre-emption claims shall necessitate a careful examination of the Federal EPAA and the Mandatory Price Regulations promulgated thereunder. A-12 However, since the need for a determina- tion on the preemption issue would disap- pear should the Court grant the defendants’ motion to dismiss, that motion should be addressed and disposed of first. MOTION TO DISMISS Defendants contend that the Tax Injunc- tion Act, 28 U.S.C. § 1341, divests the Court of jurisdiction in these actions. Plaintiffs disagree. Section 1341 provides that: The district courts shall not enjoin, sus- pend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and eificient reme- dy may be had in the courts of such State. The defendants’ argument for application of the Tax Injunction Act in these cases is basically as follows. Plaintiffs are chal- lenging the validity of the anti-pass through provision of the new oil company franchise tax legislation. If plaintiffs are successful in having the anti-pass through invalidated, the gross receipts tax, by the terms of the New York legislation “shall cease to be in force and effect.” L.1980, ch. 271, § 12, as amended by L.1980, ch. 272, § 5. Thus, according to the dcfendants, the plaintiffs’ attack on the anti-pass through provision is in reality an attack on the tax itself. Since a decision by this Court strik- ing down the anti-pass through provision would by virtue of the statutory mandate, effectively “enjoin, suspend cr restrain the assessment, levy or collection of [a] tax under State law,” defendants conclude that the Court is without jurisdiction pursuant to 28 U.S.C. § 1341. Plaintiffs challenge the defendants’ con- clusion as to the applicability of 28 U.S.C. $ 1341 in these actions and disagree as well eX A-13 with defendants’ assertion of the availabili- ty to plaintiffs of a “plain, speedy and efficient remedy” in the Courts of New York State. In disputing the existence of a State Court remedy acceptable under 28 U.S.C. § 1341, plaintiffs argue that exclu- sive jurisdiction over their pre-emption ciaim rests in federal district court by vir- tue of § 211 of the Economic Stabilization Act of 1970 (12 U.S.C. § 1904 note), which as previously pointed out was expressly in- corporated by reference in § 5S(a) of the EPAA, 15 U.S.C. § 754(a). Thus, according to plaintiffs there is no state court remedy available. . Since, for reasons to be discussed below, the Court does not find the Tax Injunction Act, 28 U.S.C. § 1341, applicable to these actions, it will not be necessary to reach plaintiffs’ exclusive jurisdiction claim. [1] The Tax Injunction Act embodies long-standing principles of equity and fed- cralism which recognize “the imperative need of a State to administer its own fiscal operations.”* Tully v. Griffin, 429 U.S. 68, 73, 97 S.Ct. 219, 222, 50 L.Ed.2d 227 (1976). Quoting from the decision of the Supreme Court in Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 298, 298, 68 S.Ct. 1070, 1073, 87 L.Ed. 1407 (1943), the Court in Tully stressed that: “Interference with state internal econo- my and administration is inseparable from assaults in the federal courts on the validity of state taxation, and necessarily attends injunctions, interiocutory or final restraining collection of state taxes. Tully v. Griffin, supra, 429 U.S. at 78, 97 S.Ct. at 222. See also Matthews v. Rodgers, 284 U.S. 521, 525-526, 52 S.Ct. 217, 219, 76 L.Ed. 447 (1932). [2] Section 1341 has been found to apply equally to actions for declaratory or injunc- A-14 tive relief. Houston v. Standard-Triumph Motor Co., 347 F.2d 194, 198 (5th Cir. 1966); Helmsley v. City of Detroit, 320 F.2d 476, 478 (6th Cir. 1963); First United Methodist Church v. City of Syracuse, 489 F.Supp. 185 (N.D.N.Y.1980). The Tax Injunction Act has served as the basis for dismissal on jurisdictional grounds of actions directly challenging the validity of a state tax, See e. g. American Commut- ers Ass'n. v. Levitt, 279 F.Supp. 40 (S.D.N. Y.1967) aff'd. 405 F.2d 1148 (2d Cir. 1969); 57th St. Management Corp. v. City of New York, 456 F.Supp. 286 (S.D.N.Y.1978); ac- tions attacking particular. aspecis of state taxing schemes, which bore a direct rela- tionship to the successful assessment and collection of the tax, See e. g. Mandel v. Hutchinson, 336 F.Supp. 772 (C.D.Cal.1971) aff'd; 494 F.2d 364 (9th Cir. 1974); and 4. The legislative history of the Tax Injunction Act suggests two purposes behir.d its passage. The first was to eliminate the discrimination between citizens of a state who were confined to state court in challenging illegal tax assess- iments and furcign corporations who were able to take advantage of diversity jurisdiction in federal court. federal court: S.Rep.No. 1035, 75th Cong, Ist Sess. (1937); 81 Cong.Rec. 1415-17 (1937). See also Gurrett v. Bamford, 538 F.2d 63, 72 (3d Cir.), cert. denied 429 U.S. 977, 97 S.Ct. 485, 50 L.Ed.2d 585 (1976); Tramel v. Schrad- er, 505 F.2d 1310, 1315-16 (Sth Cir. 1975). The Supreme Court, however, has consistent- A-15 lawsuits challenging the procedures and methods employed ir the levy or collection of a state tax. See e. g. Czajkowski v. State of Iil., 460 F.Supp, 1265, 1271-74 (N.D.II1.1977), aff'd mem., 588 F.2d 839 (7th Cir. 1978); Kimmey v. H. A. Berkheimer, Inc., 376 F.Supp. 49, 54-55 (E.D.Pa.1974), aff'd. mem., 511 F.2d 1394 (3d Cir. 1975). Section 1341 has, on occasion, been found inapplicable in cases involving a aspect of a state taxing scheme. In Hargrave v. McKinncy, 413 F.2d 320 (5th Cir. 1969), the Court found that § 1341 did not require dismissal of an action in which the plain- tiffs sought the collection and disbursement of certain county tax monies rather than an injunction on collection of taxes. The Second Circuit in Wells v. Malloy, 516 F.2d 74 (2d Cir. 1975), refused to apply the Tax Injunction Act where the plaintiff challenged a Vermont statute which sus- pended the driver’s licenses of individuals in default in payment of the state motor vehi- cle purchase and use tax. Writing for the Court, Judge Friendly stated that in enact- ing the Tax Injunction Act Congress was thinking of cases where taxpayers were repeatedly using the fed- eral courts to raise questions of state or federal law going to the validity of the particular taxes imposed upon them (footnote references omitted)-not to a case where a taxpayer contended that an unusual sanction for non—payment of a tax admittedly due violated his constitu- tional rights .... (Emphasis supplied) Id. at 77.5 There is no question but that the gross receipts tax on oil companies would cease to be in effect at a statutorily ordained time after a determination by the Courts that the anti—pass through provision now under #% A-16 attack is invalid. Nonetheless, this Court as previously stated, does not believe that these cases fall within the jurisdictional proscription of the Tax Injunction Act.® [3] The plaintiffs are not challenging the validity of the gross receipts tax nor are they attacking the statutorily prescribed administrative procedure for assessing, levying or collecting the tax. In fact, but for the “self-destruct” mechanism included in the legislation, a determination by this Court invalidating the anti-pass through provision would have absolutely no affect on the “assessment, levy or collection” of the gross receipts tax. 28 U.S.C. § 1341. {4) Defendants describe the tax and the anti-pass through provision as a “single entity”, with the latter provision being merely a “rule of tax incidence”: Plain- tiffs, on the other hand, argue that the anti-pass through: provision is u state price control measure separate from the tax it- self. The Court, having carefully reviewed the statutory language of S-10188 and 10261 agrees that the anti-pass through 5. The new Tax Injunction Act has also been ‘ found to be inapplicable in actions which are either brought by the United States or which although brought by a private individual or group could have been commenced by the Unit- ed States. See e. g. Moe v. Confederated Salish and Kootenai Tribes, 425 U.S. 463, 473, 96 S.Ct. 1634, 1641, 48 L.Ed.2d 96 (1976); Department of Employment v. United States, 385 U.S. 355, 358, 87 S.Ct. 464, 466-67, 17 L.Ed.2d 1414 (1966). 6. The Fifth Circuit Court of Appeals in Har- grave v. McKinney, supra, 413 F.2d at 326 cautioned that: Encroachments on the federal judiciary’s power to vindicate rights allegedly guaran- teed by the Constitution must be construed narrowly. Cf. Phillips v. United States, 1941, 312 U.S. 246, 251, 61 S.Ct. 480, 85 L.Ed. 800. A-17 provision is a price control measure, rather than a rule of tax incidence. See Schirt- zinger v. Dunlop, 489 F.2d 1307, 1310 (Em. App.1973) (treating pass—throngh regula- tions as a form of price control), and is of the opinion that the “self-destruct” mecha- nism contained in the legislation indicates an intent on the part of the state legisla- ture to impose the gross receipts tax on oil companies only if it can in addition impose controls on the prices charged by the com- panies for products sold in New York State. The statement of legislative findings and declaration of purpose, following discussion of the State’s mass transit fisca: crisis, pro- vides that: It is also found that oil companies are currently reaping historically high prof- its. These increased profits do not result from the application of normal manage- ment techniques and strategies which any business uses to maximize profits, but rather result from the market conditions prevailing within the international oil in- dustry, which ure artificially inflating the price of petroleum products. In view of the high cost of petroleum, the impor- tance of energy conservation and New York’s dependence upon foreign energy suppliers, oil companies have become businesses clothed with a public interest. (Emphasis supplied) L.1980, ch. 272, § 1. The statement goes on to indicate an awareness on the part of the Legislature of the problems involved in supporting a mass transportation system in light of the “eco- nomic recession” and “inflationary cycle”. Id. The Legisiature, having determined that it did not wish to contribute to the “inflationary spiral” or “contribute to fur- ther increases in the price of petroleum ry A-18 products to consumers” expressed the fol- lowing legislative intent: The legislature hereby determines and declares that it is the public policy of the state to tax the gross receipts of oi] com- panies and at the same time to prevent such gross receipts tax from fueling infla- tion by prohibiting the pass through of such tax to the consumers of this state. Therefore, it is the intent of the legisla- tive that the gross receipts tax shall cease and terminate if such tax shall be permit- ted, either by judicial adjudication or by any formal opinion or ruling or in any cther manner, to be included either di- rectly or indirectly in the sales price of the products of the oil company. The foregoing language suggests to the Court that the Legislators anticipated that the anti—pass through provision of the legis- lation might be challenged, apart from any attack on the tax itself, and that it might be struck down by the Courts with no threat to the continued collection of the tax. The fact that the State chose to make the taxes’ survival dependent upon the survival of a provision which constitutes an exercise of the State’s police power rather than tax- ing power does not, in the opinion of this Court, justify the application of the Tax Injunction Act. The Court does not question the State's authority to enact a taxing statute, the survival of which is inextricably linked to 7. Although the State can label the anti-pass through provision any way it wishes, for the purpose of determining the applicability of 28 U.S.C. § 1341, the Federal definition of tax is to be employed. Robinson Protective Etc. v. City Of Philadviphia S61 F.2d 371, 375 (3d Cir. 1978). 7 = A-19 the surviva! of legislation constituting an exercise of the State’s police power. How- ever, it does not accept the defendants’ argument that the question of constitution- ality of such an exercise of police power can be insulated from Federal judicial scrutiny through a legislatively imposed linkage with a state taxing measure.’ Therefore, the Court finds that it has jurisdiction in these actions under 28 U.S.C. §§ 1531, 1337, 2201 and 2202 and hereby denies the de- fendants’ motion to dismiss pursuant to the Tax Injunction Act.. & In seeking dismissal of these actions under 28 U.S.C. § 1341, defendants ask the Court to closely examine the long history of hostility to government by Federal injunction and the tra- ditional Federal policy of non-intervention in certain state governmental matters. In that regard, defendants point to the enact- ment of the Norris-LaGuardia Act of 1932, (29 U.S.C. §§ 105-115) which restricts the Federal Courts’ power to issue injunctions in labor dis- putes and the Johnson Act of 1934, 28 U.S.C. § 1342, which prohibits Federal Courts from issuing injunctions of pubiic utility rate orders and after which the Tax Injunction Act was “modeled”. 81 Cong.Rec. 1415 (1927). It is interesting to note, in that regard, that the Johnson Act, which deals with what are in effect price control measures (public utility rates) precludes the issuance of Federal Court injunctions only if “(t]he order does not inter- fers with interstate commerce”. 28 U.S.C. § 1342(2). The Tax Injunction Act, of course, contains no such exception. While it is conjec- ture on the pai of this Court, it would appear | that Congress, in passing the Tax Injunction Act, anticipated that it would be applicable only in situations involving a state’s internal fiscal affairs. Price controls, however, by their very nature are more apt to have an effect which reaches outside of the boundaries of the State, thus calling for the exception in the Johnson Act, and perhaps bolstering the Court's determination in these cases. 4 A-20 SUPREMACY CLAUSE Plaintiffs seek judgmert invalidating the anti—pass through provision on the grounds that it is pre-empted by the EPAA and the price control regulations promulgated thereunder and is thus void under the Su- premacy Clause of the Constitution. The Supremacy Clause provides that “... the Laws of the United States ... shall be the supreme Law of the Land, ... any thing in the Constitution or Laws of. any State to the contrary notwithstanding.” (U.S.Const. Art. VI, cl. 2). The Supreme Court has frequently cau- tioned that in cases such as these involving a challenge to a State’s police power under the Supremacy Clause that the Court must “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Cen- gress.” Ray v. Atlantic Richfield Co., 435 U.S. 151, 157, 98 S.Ct. 988, 994, 55 L.Ed.2d 179 (1978), quoting from Rice v. Sante Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 1152, 91 L.Ed. 1447 (1947). See also Jones v. Rath Packing Co., 430 U.S. 519, 525, 97 S.Ct. 1805, 1309, 51 L.Ed.2d 604, reh’g denied 431 U.S. 925, 97 S.Ct. 2201, 58 L.Ed.2d 240 (1977). [5,6] There are two recognized grounds for finding pre-emption of state legislation by federal law.® The first is where Con- gress has chosen to completely occupy the field, to the exclusion of the states, in which 9%. State statutes can also be pre-empted by Federal regulations properly promulgated un- der a Federal statute when there is a conflict between State and Federal regulations. See e. 8g. Jones v. Rath Packing Co., supra, 430 U.S. at 536, 97 S.Ct. at 1315. A-21 case states may not regulate within the field even when the regulation is in harmo- ny with the federal scheme. Jones v. Rath Packing Co., supra, 430 U.S. at 525, 97 S.Ct. at 1309. The second is where, although Congress has not completely foreclosed state legislation in a particular area, the state law conflicts with a valid federal stat- ute. Ray v. Atlantic Richfield Co., supra, 435 U.S. at 158, 98 S.Ct. at 994. Congressional intent to totally occupy a particular field, precluding any state regu- lation may be “explicitly stated in the [fed- eral] statute’s language or implicitly con- tained in its structure and purpose.” Jones v. Rath Packing Co., supra, 430 U.S. at 525, 97 S.Ct. at 1309. See also City of Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 633, 93 S.Ct. 1854, 1859, 36 L.Ed.2d 547 (1973). (7] The Supreme Court in Rice v. Santa Fe Railroad, supra, 331 U.S. at 230, 67 S.Ct. at 1152, explaining that an implied congres- sional intent could be “evidenced in several ways”, stated that: The scheme of federal regulation may be so pervasive as to make reasonable the inference that Congress jeft no room for States to supplement it. [Citetions omit- ted] Or the Act of Congress may touch a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject. [Citations omitted] Likewise, the object sought to be obtained by the federal law and the character of obligations imposed by it may reveal the same purpose.'® Under the second form of pre-emption, conflict voiding a state statute will be found: “where compliance with both federal and A-22 state regulations is a physical impossibili- ty ...,”" Florida Lime & Avocado Grow- ers, Inc. v. Paul, 373 U.S. 132, 142-143, 83 S.Ct. 1210, 1217, 10 L.Ed.2d 245 (1963), or where the state “law stands as an obsta- cle to the accomplishment and execution of the full purposes and objectives of Congress.” Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941); Jones v. Kath Packing Co., supra, 430 U.S. at 526, 540-541, 97 S.Ct. at 1317. Accord, De Canas v. Bica, 444 U.S. 351, 363, 96 S.Ct. 933, 940, 47 L.Ed.Zd 43 (1976). Ray v. Atlantic .Richfield Co., supra, 435 U.S. at 158, 98 S.Ct. at 994-995. {8} On occasion a pre-emption conflict may be found absent-an actual conflict be- tween state and federa] law, where it is clear that Congress has addressed the issue and decided that the particular field should remain unregulated. As explained by the Supreme Court in Bethlehem Steel Co. v. New York State Labor Relations Board, 330 U.S. 767, 774, 67 S.Ct. 1026, 1030, 91 L.Ed. 1234 (1967) and recently reiterated in Ray v. Atlantic Richfield Co., supra, 435 U.S. at 178, 98 S.Ct. at 1004-1005: “where failure of ... federal officials affirmatively to exercise their full au- 10. it must be kept in mind, however, that the existence of pervasive and complex regulations does not, in every case, demonstrate a Congres- sional intent to completely occupy a particular field. See New York Dept. of Socizl Services v. Dublino, 413 U.S. 405, 415, 93 S.Ct. 2507, 2514, 37 L.Ed.2d 688 (1973), in which the Supreme Court cautioned that: The subjects of modern social and regulatory legislation often by their very nature require intricate and complex responses from Con- gress, but without Congress necessarily in- tending its enactment as the exclusive means of meeting the problem .... % A-23 thority takes on the character of a ruling that no such regulation is appropriate or approved pursuant to the policy of the statute,” States are not permitted to use their police power to enact such a regula- tion. Bethlehem Steel Co. v. New York State Labor Relations Board, 380 U.S. 767, 774, 67 S.Ct. 1026, 1080, 91 L.Ed. 1234 (1947); Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432 (1926). However, as recently pointed out by Judge Blumenfeld in Mobil Oil Corp. v. Dubno, 492 F.Supp. 1004, 1010 (D.Conn. 1980) a Connecticut case also involving an anti—pass through provision enacted in con- junction with a gross receipts tax on oil companies in that State: [the] mere failure to regulate, in and of itself, will rarely constitute an affirma- tive federal decision that “no such regula- tion is appropriate or approved” in light of federal policy. Rather, “(the perti- nent inquiry [is] whether [federal author- ities have) addressed and acted upon the question,” whether they have given “careful consideration” to factors speci- fied by Congress, and, after balancing the competing interests whether they have determined that no regulation, or limited regulation, is the proper way of achieving federal goals. Ray v. Atlantic Richfield Co., ... 485 U.S. at 174, 177, 98 S.Ct. at 1002, 1004. Id. at 1010. {9} Finally, it should be noted that a state law cannot escape invalidation on pre-emption grounds because its purpose promotes a valid state interest if its effect “frustrates the full effectiveness of federal law.” Perez v. Campbell, 402 U.S. 687, A-24 651-652, 91 S.Ct. 1704, 1712, 29 L.Ed.2d 233 (1971). The Court explained in Perez that: We can no longer adhere to the: abcrra- tional doctrine ... that state law may frustrate the operation of federal law as long as the state legislature in passing its law had some purpose in mind other than one of frustration. Apart from the fact that it is at odds with the approach taken in nearly all our Supremacy Clause cases, such a doctrine would enable state legis- latures to nullify nearly all unwanted ‘federal legislation by simply publishing a legislative committee report articulating some state interest or policy-other than frustration of the federal objective—that would be tangentically furthered by the proposed state law. {10} Plaintiffs will be entitied to sum- mary judgment on their pre-emption claims pursuant to Rule 56 of the Fed.R.Civ.P. “if the pleadings, depositions, answers to inter- rogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving [parties are] entitled to judgment as a matter of law”. Fed.R. Civ.P. 56(c). After review of the papers submitted by the parties to the actions and analysis of the EPAA and the Price Regulations pro- mulgated thereunder, the Court is of the opinion that there are no genuine issues as to any material fact on the pre-emption issue, and finds that plaintiffs are entitled to summary judgment on that claim." THE EPAA AND THE FEDERAL REGULATORY SCHEME The Emergency Petroleum Allocation Act Congress enacted the EPAA in 1973 in A-25 response to the Arab oil embargo which had created shortages of various petroleum products which “constitute[{d] a national en- ergy crisis which [was} a threat to the pub- lic health, safety, and welfare and [could] be averted or minimized most efficiently and effectively through prompt action by the Executive branch of Government.” 15 U.S.C. § 751(aX3). The stated purpose of the Act was to: ... grant the President of the United States and direct him to exercise specific temporary authority to deal with short- ages of crude oil, residual fuel oil, and refined petroleum products or dislocations in their national distribution system. .. . (Emphasis supplied] 15 U.S.C. § 751(b). As indicated in the preceding statutory lan- guage, the EPAA was initially considered by Congress to be a temporary measure enacted to deal with an emergency situa- tion on a national level. The President was required under the Act, to: promulgate a regulation providing for the mandatory allocation of crude oil, residu- al fuel oil, and each refined petroleum product in amounts specified in (or deter- mined in a manner prescribed by) and at prices specified in (or determined in a manner prescribed by) such regulation. 15 U.S.C. § 753(a). ll. There is no question but that ihe legal issues raised in plaintiffs’ pre-emption claims are complex. The Second Circuit, however, in S.E.C. v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir. 1978) has made it clear that summary judgment is not necessarily inappro- priate simply because the legal issues are com- plex. A-26 Authorization was granted under the EPAA for the President to delegate his authority under the Act “to such officers, departments or agencies of the United States, or to any State (or officer thereof), as he deems appropriate.” 15 U.S.C. § 754(b). The Department of Energy (DOE), was created by Congress in August of 1977 (De- pertment of Energy Organization Act, Pub. L.No. 95-91, § 201, 91 Stat. 569 (1977), and in February of 1978, the President delegat- ed his authority under the Act to the Secre- tary of Energy who at the present time has control over the mandatory allocation pro- gram. Exec. Order No.-i2038, 4) Fed.Reg. 4957 (Feb. 7, 1978). While the actual promulgatioz. of regula- tions under the EPAA was left to the Presi- dent, Congress did set forth guidelines defining the requisite area of coverage in the form of objectives which the regula- tions were to provide for “to the maximum extent practicable”. 15 U.S.C. § 753(b)\(1). Those objectives, set forth at 15 U.S.C. § 753(bX1XA)-(I) are: (A) protection of public health (includ- ing the production of pharmaccuticals), safety, and welfare (including mainte- nance of residential heating, such as indi- vidual homes, apartments, and similar oc- 12 ‘The President first deieguted his authority under the EPAA to the Federal Energy Office (FEO) in December of 1973, Exec. No. 11748, 38 Fed.Reg. 33575. In June of 1974 the President abolished the FEO and deleg:.ted his authority to the Federal Energy Administ: ation (FEA), which “ud Deen created by Congress in the Federai Energy Administration Act of 1974, Pub.L. 93-275, § 3, 88 Stat. 97 (1974). Exec. Order No. 11790, 39 Fed.Reg. 23185 (June 27, 1974). Authority remained in the (FEA) until delegated to the Secretary of Energy in 1978. A-27 cupied dwelling units), and the national defense; (B) maintenance of all public services (including facilities and services provided by municipally, cooperatively, or investor owned utilities or by any State or local government or authority, and including transportation facilities and services which serve the public at large); (C) maintenance of agricultural opera- tions, including farming, ranching, dairy, and fishing activities, and services direct- ly related thereto; | (D) preservation of an _ economically sound and competitive petroleum indus- try; including the priority needs to re- store and foster competition in the pro- ducing, refining, distribution, marketing, and petrochemical sectors of such indus- try, and to preserve the competitive via- bility of independent refiners, small re- finers, nonbranded independent market- ers, and branded independent marketers; (E) the allocation of suitable types, grades, and quality of crude oil to refin- erics in the United States to permit such refineries Ww operate at ful) capacity; (F) equitable distribution of crude oil, residual fuel oil, and refined petroleum products at equitable prices among all regions and areas of the United States and sectors of the petroleum industry, including independent refiners, small re-. finers, nonbranded independent market- ers, branded independent marketers, and among all users; (G) allocation of residual fuel oil and refined petroleum products in such amounts and in such manner as may be necessary for the maintenance of, explo- ration for, and production or extraction of- 7% A-28 (i) fuels, and (ii) minerals essential to the require- ments of the United States, and for required transportation related thereto. (H) economic efficiency; and (I) minimization of economic distortion, inflexibility, and unnecessary interfer- ence with market mechanisms. Congress, in addition, directed that: In specifying prices (or prescribing the manner for determining them), the regu- lation under subsection (a) of this sec- tion— (A) shall provide for a dollar—for—dol- lar pass through of net increases in the cost of crude oil, residual fuel oil, and refined petroleum products at all levels of distribution from the producer through: the retail level .... In 1975, Congress added 15 U.S.C. § 760a to the EPAA. Energy Policy and Conser- vation Act. Publ.L.No.94—163, 89 Stat. 871 (1975). Whereas the imposition of alloca- tion and price controls was mandatory un- der the 1973 Act, this section gave the President the authority to, in his discretion, and in accordance with the guidelines and procedural requirements set forth in the law, exempt “crude gil, residual fuel oil, or any refined petroleum product or refined product category” from the price and allo- cation regulations under the EPAA. The criteria for amendment of regula- tions under § 753(a) is a determination by the President that: such amendment is consistent with the attainment to the maximum extent prac- ticable, of the objectives specified in sec- tion 753(bX1) of this title and that the regulation, as amended, provides for the attainment to the maximum extent prac- A-29 ticable, of such objectives. 15 U.S.C. § 760a(b). Before any amendment to the regulations which pertains to either the allocation of or the price or manner of determining the price of crude oil, residual fuel oil or refined petroleum product could be promulgated, it had to be submitted for Congressiona] ap- proval. 15 U.S.C. § 760a(CX1) and (2).4 The President was also required to sub- mit in support of the proposed amendment “a finding that such amendment [was] con- sistent with the attainment of the objec- tives specified in section 753(bX1) of this title”, and in the case of a proposed a:nend- ment to the price control regulations, “a finding that market forces [were] adequate to protect consumers and that exempting such oil or refined product category [would] not result in inequitable prices for any class of users of such oil or product.” 15 U.S.C. § 760a(d)1). In addition, the President was required Wo submit with each proposed amendment a statement of his views as to: “the potential economic impact (if any) of such amendment which, where practica- ble, shall include his views as to— (i) the State and regional impacts of such amendment (including . A-62 tion. A major contention of the oil compa- nies was that Section 182(12(a) of the New York Tax Law prohibiting the passthrough of the two percent gross receipts tax was unconstitutional as a state price control rule which conflicted with the EPAA and the provision thus void under the Supremacy Clause of the United States Constitution (U.S.Const. art. “VI, cl. 2). To make the determination that the state law conflicted with the .federal regulations, as Judge McCurn found, necessitates “a careful ex- amination of the Federal EPAA and the Mandatory Price Regulations promulgated thereunder.” Mobil Oil Corp. v. Tully, su- pra, at 892. The trial judge proceeded therefore to analyze in detail the federal statute and regulations to determine whether or not the state law was in conflict with the regulations as well as the sional scheme and policy. Id. at 898-910. Whether that analysis was correct is not properly before this court since in making the analysis the District Court was clearly construing and interpreting the EPAA and its. regulations. The appellants argue that the preemption claims arise under the Constitution rather than the EPAA and thus do not pose an EPAA question. The argument is not per- suasive. In Swift & Co. v. Wickham, 362 U.S. 111, 86 S.Ct. 258, 15 L.Ed.2d 194 (1965), the_Supreme Court held that the issue of preemption did not involve a substantial constitutional question so as to warrant the convening oi & tnree judge court pursuant to 28 U.S.C. § 2282 The Court declared that the basic question involved. in a pre- emption case “is, never one of interpretation of the Federal Constitution but inevitably one of comparing two statutes.” Id, at 120, 86 S.Ct. at’ 268. See also. American Federa- tion of Labor v. Watson, 327 U.S. 582, 66 A-63 S.Ct. 761, 90 L.Ed. 878 (1946). This court has made a similar analysis in Andrews v. Maher, 525 F.2d 118, 119 (2d Cir. 1976). While [the Supremacy Clause] is the reason why a state law that conflicts with a federal statute is invalid, it is the feder- al statute that confers whatever rights the individual is seeking to vindicate.” It is obvious that in this case the trial court was obligated to and did make an analysis and interpretation of the two stat- utory schemes involved here, both state and federal. Having found that an impermissi- ble conflict existed between the anti-pass- through provision and the federal statute, regulations ‘and congressional policy, the finding of preemption was automatic. Ap- pellants further argue that if arguendo the District Court did have exclusive jurisdic- tion in all suits arising under the EPAA, then jit should not have adjudicated that issue but rather it should have followed the statutory mandate of Section 211(c) and made a determination as to whether a sub- stantial constitutional question exists and if 30 “certify such i to [TECA}” While our analysis Id indicate that the sub- stantial issue was statutory and regulatory analysis and interpretation rather than con- stitutional, the short answer to the conten- tion ts that the cortificaticn issue is a deter- mination to be made by TECA and not this court. Citronelle-Mobile Gathering, Inc. v. Gulf Oil Corp., 591 F.2d 711, 716 ), cert. denied, 444 U.S. 879, 100 S.Ct. 168, 62 L.Ed.2d 109 (1979). Appellants’ further argument that an EPAA question is one limited to cases and controversies involving a regulation pro- mulgated under Section 753(a) and not to alf cases or controversies arising under the (b). The Anti-Injunction Act [2] The oil company appellees’ motion to dismiss the appeals on _ jurisdictional A-65 this but denominate it as an issue ancillary to the EPAA preemption question and thercfore within TECA's exclusive jurisdic- tion. In a comparable setting TECA has de- clined to take jurisdiction. In Texaco, Inc. v. Department of Energy, 616 F.2d 1198 (Fm.App. 1979) TECA declined to accept jurisdiction to review a District Court hold- ing that the Federal Energy Regulatory Commission had review authority under the Department of Energy Organization Act eveu though the DOE actions which were to be reviewed by the FERC were taken under the EPAA. The court reasoned that since the District Court's only decision was that the FERC had review authority, which was under the DOE Act and not the EPAA, it could not exercise jurisdiction since it in- volved the interpretation of a statute not within the review provisions of 15 U.S.C. § 754(a). The court stated, “... TECA has repeatedly refused to exercise jurisdiction over issues or claims not arising under the EPAA even though they may be joined in the same case with other issues or claims that do arise under the EPAA.” Id. at 1196. Here the federal statutory prohibition is plainly not within the EPAA and the refus- al of TECA to exercise such jurisdiction is reasonably to be anticipated. Obviously, the TECA posit'cn can result in bifurcated appeals as it will in this case but that has been anticipated by this court in Coastal States Marketing v. New England Petrolo- um Corp., supra, 604 F.2d at 185. It is desirable to defer to a specialized federal appellate court, TECA, with its special ex- pertise on EPAA issues, which in this ap- peal, includes the preemption question in- present an EPAA question. Id. at 186. The Section 1841 question is substantial and Sons Oil Corp. v. B.:P. Oil Corp., 581 F.2d math abn Bryon asc That case ve an appeal from an BPAA ques- ae was within the exclusive juris- diction of TECA as well as an ancillary issue—an appeal from an interlocutory or- der of the District Court refusing to trans- fer the action to another District Court. Our dismissal was based on the proposition that a ruling on a transfer motion is rot independently appealable under 28 U.S.C. §$°1292(aX1). In,thia case the Section 1341 issue is independent and severable from the EPAA question and presents us with an appealable order from a final order of the District Court. We conclude therefore that the motion to dismiss the appeal on jurisdictional grounds is ‘granted with respect to the preemption question and denied as to the Section 1341 issue. A-67 II (4) Having determined that the preemp- tion issue is within the exclusive jurisdiction of TECA and that the applicability of the Tax Injunction Act is properly before this court, we address the latter issue. Section 1341 is brief and facially clear: The district courts shall not enjoin, sus- pend or restrain the assessment, levy or collection of any tax under State law ment, levy or collection” of a New York State Tax and is‘thus within the clear pro- scription of Section 1341. The oil compa- nies argue that they do not at all challenge the validity of the tax but: simply the anti- passthrough provisions which they denomi- nate as an exercise not of the taxing power of the State but rather its police power. The anti-passthrough proyision, they urge, is a price fixing statute and not a taxing device. While’ the statutory linkage be- tween the validity of this provision and the continued existence of the tax does result in the frustration of the State’s power to col- lect the tax, this was the calculated decision of the legislature and not the result of the court's determination. While the briefing and argument on this issue has been inten- sive, there is no authority precisely in point. The State appellants argue that Section 182(12Xa) is a state tax law and that the State has the authority to select the target of the tax. They rely upon language in First Agricultural National Bank v. Tax Commission, 392 U.S. 339, 347-48, 88 S.Ct. A-68 2173, 2177-78, 20 L.Ed.2d 1138 (1968) where the Court held invalid a Massachusetts stat- ute which imposed a sales tax upon a na- tional bank. In the course of its opinion the Court construed the state statute as impos- ing the legal incidence of the tax upon the purchaser rather-than the vendor. The Massachusetts State Court from which the appeal originated had construed the statute to impoge the tax on the vendor. In revers- ing, the court stated “[t}here can be no doubt from the clear wording of the statute that the Massachusetts Legislature intend- ed that this sales tax be passed on to the purchaser, For our purposes, at least, that intent is controlling.” Id. at 348, 88 S.Ct. at 2178. It is difficult to understand how the State can reasonably construe this language to be helpful here. There was no Section 1341 issue in that case at all—the appeal was not from a district court I st a state court. No one questions the right of the State of New York to place the legal inci- dence of the tax upon the oil companies— but it is an entirely different mattcr for the legislature to instruct the person t»xed that he cannot raise the resources to pay the tax by increasing the price of his product. As we have ‘indicated the tax purpose of the legislation was to raise funds for the mass transit system. “However, the purpose of the anti-passthrough provision was not to raise taxes but “to do nothing that will contribute to further increases in the price of petroleum products to (New York) con- sumers” and “to prevent such grocs recaipts tax from fueling inflation by prohibiting the passthrough of such tax to the consum- ers of this state.” N.Y. Act, ch. 272, § 1. This objective is certainly not an exercise of a taxing power but a police power affect- A-69 ing’ the price structure of petroleum prod- ucts. We agree that the State has the right to place the legal incidence of th. tax upon the oil companies; it has selected its target. But in barring the targets of the tax from recovering their costs fram the -onsumer directly or indirectly, the State has gone beyond its taxing powers and has employed its police powers. Whether this is appropri- ate is not the issue before us; whether it results in a collision with EPAA is for TECA. We simply hold that that action is not insulated from federal scrutiny by Sec- tion 1341. The mere fact that the anti-passthrough section is contained in 4 tax law of the State should not lead to automatic sanctu- ary under Section 1341. In Wells v. Malloy, 510 F.2d 74 (2d Cir. 1975), this court held that a District Court was not prevented from considering the constitutionality of a - Vermont Motor Vehicle Tax which provided for the suspension of a motor vehicle license if the owner failed to pay the tax due under the state law. An indigent claimed that such suspension created irreparable and im- mediate hardship and harm to him in viola- tion of his equal protection rights under the fourteenth amendment. This court found that his attack did not seek a restraint upon the assessment, levy or even the collection of the tax. That the attack of the oil companies is not on those sections of Section 182 which provide for the assessment, levy or collec- tion of the tax within the prohibition of Section 1341, is bolstered by the statement of James H. Tully, Jr., Commissioner of Taxation and Finance of the State of New York in his affidavit in support of a stay which states in part that the plaintiffs “do A-70 not challenge the imposition of the tax, or the rate of the tax, or the allocation formu- la on the collection of the tax.” He further stated that anti-passthrough provision . “is all that the court enjoined.” We agree therefore with the District Court that the anti- :assthrough provision is not an exercise of the taxing power of the State within Section 1341 but rather of its police powers directed to its express con- cerns about inflation and rising fuel costs. A constitutional attack under the Suprema- cy Clause on that aspect of the law is not within Section 1341. Having so held we need not address the issue of whether or not a plain, speedy and efficient remedy may be had in the courts of this State. The stay of enforcement is continued by this court and shall continue only until such time as the State can seek a stay from TECA. Any motion for further relief should be directed to that court. A-71 APPENDIX C Statutes Involved 28 USC § 1341 (the Tax Injunction Act) provides: “The district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” Subdivision | of New York Tax Law, § 182, provides: “1. Notwithstanding any other provision of this chapter, or of any other law, an annual tax is hereby imposed upon every oil company equal to two per centum of its gross receipts from all sources, or the portion thereof allocated within the state as hereinafter provided, for the privilege of exercising its corporate franchise, or of doing business, or of employing capital, or of owning or leasing property in this state in a corporate or organized capacity, or of maintaining an office in this state, for all or any part of each of its taxable years. In no event shall the tax imposed by this section be less than two hundred fifty dollars.” Subdivision 12(a) of New York Tax Law, § 182, provides (in pertinent part): “12. (a) The tax imposed by this section and any penalty which may be assessed under this subdivision shall be a liability of the oil company, shall be paid by such company and shall not be included, directly or indirectly, in the sales price of its products sold in this state.0=" Section 12(a) of chapter 272 of the New York Laws of 1980, provides: “§ 12. (a) If the provisions of paragraph (a) of subdivision twelve of section one hundred eighty-two of the tax law, as added by section four of this act, prohibiting the inclusion of the tax imposed by this act, directly or indirectly, in the sales price of its products sold in this state by the oil company upon which such tax has been imposed is: (i) adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review; or (ii) held ina formal opinion or ruling issued by the federal Economic Regulatory Administration or any other A-72 federal agency of competent jurisdiction to be violative of the provisions of the federal Emergency Price Allocation Act of 1973, as amended, or the federal Mandatory Petroleum Price Regulations (10 CFR 212) promulgated pursuant thereto, or any successor federal law or regulation, and thereby rendered inoperative, and after exhaustion of all appeals therefrom, then, in either of such events, all of the provisions of this act cease to be in force and effect on the date provided for in subdivision (d) of this section.” Section 12(d) of chapter 272 of the New York Laws of 1980, provides (in pertinent part): “(d) In the event that the provisions of this act shall cease to be in force and effect pursuant to the provisions of *** subdivision (a) *** of this section, the effective date of such cessaton shall be the tenth day after the effective date of *** the order or judgment, or formal opinion or ruling holding said paragraph (a) of subdivision twelve of section one hundred eighty-two of the tax law invalid, *** provided, however, that such tax shall continue in full force and effect until such day and all filing of returns and payment of taxes, interest and penalties otherwise required by this act for all periods prior to the cessation of such act shall be timely made and may be enforced as fully and to the same extent as if such act had continued in effect.” --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385007_1700%3A1. Public record. Not legal advice.