Motion to Dismiss Appeal — New Yorker Magazine, Inc. v. Gerosa

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Ocroser TERM, 1957

_ No. 816

ne THE NEW YORKER MAS AZINE, INC, |

ae Se eee ae Apron,

LAWRENCE E. GEROSA, as“Comptroller of, the-City of New

York, and GEORGE -M. P AGALINI, as Treasurer of the

City of new York, , |

_ Appellees.

ae

* eo lise

Ey | ;

On APPEAL FROM THE Court oF APPEALS

OF THE STATE OF, NEw York.

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: ra === npn

_4¢ MOTION TO. DISMISS APPEAL ~

— = an

PETER CAMPBELL Brown,

Corporation Counsel

of the City of New York,

‘>

| y, Attorney for Appellees, * ©

‘Municipal Building,

_New York 7, New York. |

wy <i on

“STANLEY BucHSBAUM,

Morais L. Heat,

of Counsel. es

. 1? -

i . -

S INDEX

one - PAGE

Preliminary Statement PRU Ses eae Sei meee ne

Statutes and Regulations Involved Sent Ee her a <a

: Statement of the Case. 90 nosh cieseeeet ones sarees eee ae oe

Facts a Tree rere re eee eee x cesewe epéesce x Caweeder 3

oe Por. I—The shallengs to the ocisutttoittiaailing of

. the New York City General Business and. Finan-

cial Tax ag applied to appellant’s advertising re-

ceipts in this case presents to substantial federal « .

question since the case is indistinguishable from, -

and is squarely controlled by, Western Live —

Stock-v. Bureau of Revenue, 303.0. 8. 250 (1938) 8

“A. Western Live Stock v. Bureau of Revenue, -

303 U. S. 250 ( 1938) i is. controlling, in the pres-

OME CASE oo eee cece te eee erent e ete c ees = . :

B. Western Live Stock v. ‘Seen of Revenue, |

303. U. S. 250 (1988) is still sound law aces 2S

Pomrr II—The appellant’s due process and sigan

protection contentions are completely’ without

| METI”... seeps ee eeeeeeee ee eeetet teste tees. : ee

} Conclusion ee eeconiss eters eee acento eels 18

at f - 4 .

\e rae AN

ll INDEX . ——

| Casts Crm b

PAGE

Biderap v. .Pathe Exchange, 263 v. S. 291, Sil

| EE Gee isons B eaccisenepestrenses “5

— Braniff Airways v. Nebraska State Board, 347 U.-B.0°

- ~# 590, 597-598 (1954) ...... AIRY 16

Charleston Assn. v. Alderson, 324 U. Ss. 182, 190-191. :

BR SS rR ey Ca Sai mam er Bee 8

Fisher’ s Blend Station v. State T Tax Commission, 297 |

a if S. I i ia eu eae ay cent 15,17

Gwin, White & Prince, Ine. v. - Henneford, 305 U. 8. ~

434 (1939) ..... eer vaeneesseeter icity veuns 15, 16

Lorain Journal Co. v. United ‘States, 342. u. ‘S. 143 oa

| I sb cv caves eke eukever beseseesedu ey cee

’ - Mandeville Farms v. . Sugar Co, 334 U, 8 219, 134 7

ME Si bbe iwek Wa koe dhs Pc has ohn dew ake a. ae

A” Michigan-Wisconsin Pipe: dos Oe », Calvert; 447-

° te 157, 165-166, 169-170 (1954) POE ETB then _ 16

Olive Coat Co. v. McGoldrick, 287 .N. _Y. 769 (1942).. 17

‘Snowden v. ‘Hughes, 321 U: S. 1, 8-9. (1944) ........ 18

| Stafford v. Wallace, 258 U. S. 495, 525-528 (1922) °. 15

| Swift & Co. v. United States, 196 U. S. 375, 399

400 (1905) foo... een. ees BB

United States -v. Wrightwood Daity Co, 315 U. ma:

BO IE ov ovikisewrncedycceses ePhscas “16

a Western Live Stock v. ane of Reveune, 303 U. S.

~ ME GE. 5 ve 00 hee ekes 3, 8, 9, 10, 11, 13, 14, 15, 16, 17

. , Wheeling Steel Corp. v. Fox, 298 U. S. 193, 215 (1936) 17

Tae — Yousizn Masa Ino., "

ue | | F Appellant,

ans : against / z ae

| ae Bene E. Genosa, as ‘Compt er of the C Sto of New. on

‘York, and Gzorce M: B: iN Treas rer of the ~

a. of New hs. arate Wise

| Cry vg Appellees.

Or APPEAL ROM THE \Coone oF keine

* OF THE: STATE: ‘OF | New Your .

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MOTION TO DISIGSS | RPEAL a

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. Preliminary Statement

The enintiie has appealed from a ‘final ‘order of the ~~

Court of Appeals of the State of New \York-dated July 7

1957 ;.motion for reargument denied all red of that Court .

dated October 17, 1957.

The opinion of the Appellate ‘Division of the New York

State Supreme Court, First Judicial Department, is offi-

cially reported i in 2 AD 2d 600 and the opinion of the Court.

as

y .

, as to jurisdiction. | -

6f Appeals of the State of New York is officially reported.

in 3 NY 2d 362. - Both opinions are set forth in Appendix A

of the appellant’s statement as to jurisdiction.

By this appeal, the appellant challenges the constitutional |

validity of the New York City General Business and Finan-

cial Tax, as imposed om-it for the privilege of carrying on

business within the City, to the extent that the tax is meas-

ured by ‘appellant’s gross receipts from advertising. It |

contends that the tax, to the extent that it is measured by. :

such receipts is repugnant to the Commerce Clause.

%

It also coritends that the City pf New York, in taxing ith :

advertising receipts as receipts/from a local business while :

_ taxing receipts from interstafe. sales and from radio and :

~¢° television broadcasting as eceipts from interstate’ com- 3

merce, deprives it-of its property without due process of |

law and denies it the equal protection of the laws.

- Appellees move. to dismiss the appeal on the ground that

it does not present a substantial federal question.

Statutes and Regulations Involved — 5

The statutes imposing the tax, and the regulations sf the

| Comptroller of the City of New York f8sued thereunder,

are set forth in Appendix B of the appellant’s statement

_- Statement of the Case

This proceeding was brought under the provisions of

Article 78 of the Civil Practice Act of the State of New

York to annul and correct determinations of the Comp-

troller of the City of New. York denying refund-of generai

business taxes and assessing additional such’ taxes for the

three year period,.1947-1949, inclusive, in the total princi-

pal amount of $18,633. The determinations under re-

" view were.mnade as the result of a hearing held by the Comp-

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troller of the City of New York at which ovidiaes was

taken. Appellant appeared, and was represented by coun-

sel, at such hearing and both sides introduced testimony -

' the hearing.

| Under the practice in New York the prararrnren hear-

@ ing constitutes the trial of the issues in the case (Civil +

Practice Act, Article 78). The determinations issued in this _

| case as a result of the hearing were first reviewed by the

Appellate Division, First Department, which unanimously

4 confirmed them. Upon appeal by appellant to the Court of

4 Appeals of the State of New York that court unanimously —

7 affirmed. '

3 Both courts ew opinions, and both held the case to be

diréctly controlled ‘by Western Live Stock v.. waren of

Revenue, 303 U. 8. 250 (1938) ).

Facts =

1

dattiens is a New York corporation. engaged in the

| business of publishing ‘‘The New Yorker,’’. a weekly maga- |

_ sine. It has not qualified to do* business in any other state

(fols. 145-146, 272, 964- 966).

_ Appellant’s operating and executive offiess are situated

at 25 West 43rd Street, in the Borough of Manhattan, City

of New York, and it occupies several floors of the building

‘ at that address (fols. 279, 311-313, 445.46). This is its

) “only place of business, except for an advertising sales ofice

; in Chicago (fols. 275-277). —

Blanchard-Nichols, an cae concern with offices i in

San Francisco and Los Apgeles, California, and Atlanta,

. Georgia, has a contract with appellant to solicit advertising

for appellant and it assigns one man in each of its afore- ~

said offices to this activity (fols. aah 283-284, —

Appellant owns no printing equipment and does not print

the magazine itself (fols. 279-280, 299). The magazine is

- printed by an independent company, the Condé Nast Préss,

at its printing plant in Greenwich, Connecticut, finder a

contract with appellant (fols. 245, 1010-1011; City’s Exhs. A !

and. B). There is no corporate connection between the

* printer and appellant (fols. 273-274). . |

; ‘ aoe 4

* The magazine is entered as second-class matter with the

post office in the City of New York (Appellant’s Exhs. 3-6).

Appellant has no office at the printing plant and no em-

ployees regularly stationed there (fols. 315, 966-975, 995-

998). Under the contract appellant furnishes the paper on

which the magazine is printed. -This paper is stored by the

printer in its general warehouse until needed (fols. 1036,

1059-1063). oe .

Hl | oe aaglle

The main office of appellant's advertising department in

its New York City office is responsible for the acceptance

of all the advertising carried.in the magazine (fols. 410-412,

/ 422-427, 436-437). This involves not only credit approval

‘but approval for taste as well, as ‘*The New Yorker main- -

tains a very high standard of advertising acceptability ’’

* (fols. 423-425), a ie .

The advertising department keeps @ record of all space

contracted for by advertisers in future issues of the maga-

zine (fol. 438). Prior té the closingcdate for a given issue

~ the advertising agency or advertiser sends in cuts and copy

of the proposed advertisement (fols. 437-440). Most of .

them are received by appellant's advertising department

in New York City, but on rare’ oceasions, when they come

in very late, they go directly to the printer (fols. 439-440,

487-488, 494). : ie : |

nar

In eithér-case, the printer prepares a proof and sends it.

te the appellant’s advertising department in New York

City, which maintains a ‘‘dummy,’’ ‘constituting an exact

replica of the advertising to be included in the issue itself.

If the proof is accepted by the advertising departmentyit——. ~

is added to-this dummy (fols. 438-442, 477-478).

“The advertising dummy is sent by the advertising de-

partment to the printer each week, together with a dummy

of editorial matter prepared and sent by the editorial

department. The printer‘is required to follow these dum-

_mies exactly in printing the magazine (fols. 447-450).

Any last minute changes with respect to advertising

-matter are authorized by a telephone call to the. printer

from appellant’s advertising department in New York City .

(fols. 497-500)... a See ee

tear of five or six employees’ of the editorial depart-

ent go to the printing plant for part of one day a week

to check, proofread. and ‘make final\ changes in editorial —

matter (fols~3t43t5, 1012-1023) These individuals make

no changes in the advertisements (fol, 1034).

AV

The distribution of the magazine is supervised and di-

rected by the circulation department, consisting of a man-

‘ager and 55 employees, all located in appellant’s New York

City office (fols. 269-270, 311-312, 729-730). ‘That .depart-

ment maintains the list of subscribers and prepares the

mailing wrappers for the magazines (fols. 715-717, 724).

The printer ships the magazines as directed by this depart-—

ment’ (fols. 717-723). '

Under the printing contract, Condé Nast is required to

deliver the magazines ‘‘to Grand Central and General Post

Offices N.Y.C.”? (City's Exh. A, p. 4; City’s Exh. B, p. 9).

The actual practice appears to vary from the contract -

>

6 2

somewhat. - Appellant 's cifculation Tuanager testified that

copies of the magazine are mailed ty subscribers and news.

stands both at the New York Post Office and at the Green.

wich, Connecticut Post Office (fols. 719-720).

Vv"

Appellant publishes and sells only ‘one magazine, “The:

New Yorker.’’ The. magazine circulates throughout the

country, including the City of New York where it has ap-.

proximately 20% of its circulation. All copies of the maga-

zine are identical, except that the copies which circulate

in the New York City metropolitan area (called the ‘‘city”’

_ edition) contain a few additional pages of advertising and

some additional editorial mattér not found in the copies

circulated eisewhere (fols. 145-148, 172-174, 471-472, 941.

943). The additional editorial matter appears’ to be con-

fined to a listing, on approximately. one page, of the motion

_ pictures being shown ‘in New York ‘City ‘neighborhood

motion picture theaters. |

The additional advertisements inserted in the copies of

the magazine that circulate in the New York City area are

those of local stores. and other advertisers desiring: to

reach only this marketing area (fols. 394-395). But, except

for these relatively few advertisements, every advertise-_

" ment in the magazine appears in identical form in every

copy of the magazine, including the copies circulated in the

City of New York (fol. 901), See eae

For its own convenience, and to fix advertising rates, *

the copies of The New Yorker magazine that circulate in |

the New-York City metropolitan area are designated by

appellant as the city or metropolitan edition; the copies

that circulate outside this area are referred to as the star

or out-of-town edition (they bear a small star on the front

cover); and the total number of copies is known as the

entire or complete edition (fols, 146-148, 394-395, 941-943).

However, in selling the magazine no such distinctions are

7

made. Atl copies are ula as copies of The New Yorker

magazine and are identical in price, appearance and format.

Except for the star on the cover, it is impossible to tell

one copy from another, short of a careful page by page -

comparison. Appellant itself, in reporting its circula-

tion to the Audit Bureau of Circulations, characterizes

‘the differences. as a ‘‘slight difference in editorial content

and arrangement, and a small difference in advertising

content’ ’ (Appellant’ s Exh: 14, par. 28, p. 391 of the

record). .

Appellant did not accept advertising solely in the s0-

called star ‘or out-of-town edition ; i.e., the copies of. the

magazine: which were circulated outeide the New York

City metropolitan area. An advertiser could advertise

in the so-called ‘‘entire’’ edition (obtaining national cover-

age, including New York City) or in the ‘‘city’’ edition

- (obtaining coverage of the metropolitan New ‘York City

area only). It was given no third choice (fols. 1162-1163).

Hence, every advertisement accepted by appellant cireu-

lated in the City of New York, either as printed in the

city edition copy of the. page, or in both the city

and star edition bas ce

— . — VI-- . ot <a ae ween

Appellant’s advertising receipts are not taxed in any

state or local jurisdiction outside of the State of New

York. (fols. 960-964). The appellant’s assertion that Con-

necticut is threatening to tax it is not based on anything

in the record. The asserted threat of tax is not claimed

to involve ‘taxation ‘based ‘on ee or advertising

S

recel ipts. z " a

The City of New York excluded the receipts of appel-

lant’s Chicago offive in taxing its advertising receipts

herein. The tax for 1949 was imposed on $4,953,656 of

advertising receipts. It amounted to $9,907 (at the rate

of Ys of 1%), of which $i, 552 is — by ae

*

8

The tax for 1948 was approximately the same, and for

* 1947 was less, since the rate of tex was 1/10 of 1% in

* that year (Appellant’s Exh. 36). :

In ‘its ‘statement of the facts the dfpellant states that

_ -the tax was based on-more than 100% of the advertising

‘ receipts because of the inclusion of advertising agency

‘commissions (statment as to jurisdiction, p. 8).. The ap-

pellant, however, withdrew ‘‘any claim for a refund of tax’’

assessed with respect to advertising agency commissions

‘and ‘discounts, but, nevertheless, sought to reserve the

‘right to argue arbitrariness (fol. 1107). |

The tax on appellant’ s circulation receipts was appor-

tioned to reach only receipts from the sale of the magazine

in New York City, and-no issue is raised with regard

to the tax on circulation receipts (Appellant’s Exhs. 31-

33, Record, pp. 417-441 ;. Appellant’s Exh. 36).

"POINT I

The challenge to the constitutionality of the New

York City General Business _and_Financial- Fax as

.. applied to appellant’s advertising r receipts in this case

presents no substantial federal question since the case _

is indistinguishable from, and is squarely controlled

“by; Western Live Stock v. Bureau of Revenue, 303.

U. S. 250 (1938). |

The issue’ in this case is not novel or unsettled, and

the decision of the Court of Appeals of the State of

New York is not ini conflict with any decision of this’

_ Court. -In fact it is expressly and wholly based on the

decision of this Court in the case of Western Live Stock °

_ v. Bureau of Revenue, 303 U. S.°250 (1938).

No substantial federal question is presented since the

_ Western Live Stock case is indistinguishable from this

ease .on the facts and is still sound law.

9

A. Western’ Live Stock v. ane of is 303 U. S..

250 (1938) is controlling i in the present case.

_ In Western Live Stock v. Bureau of Revenue, 303 U. S.

250 (1938) this Court held constitutional.a New Mexico

privilege tax, measured by. the amount or volume of busi-

ness done, as applied to the gross receipts. received by

The issue was stated to be whether sich # tax on. pub-

lishers ‘‘who sell without the state, to advertisers there,

space in a journal which they publish: in New*Mexico and

circulate to subscribers within and without the state, im-

poses an unconstitutional burden on interstate commerce’’

(303 U. S. at p. 252). :

The following description of the business of the Western:

Live Stock concern appears at page 8 of the. record of

that case in ‘this Court: 3

See ‘the contracts’ negotiated and entered ‘ie with such

advertisers provide for and contemplate a continuous

passage of contracts, correspondence, plates, cuts, mats,

engravings, copy, intelligence and information from

the advertiser across state lines to plaintiff, the print-

ing of such advertising in its; journal, and its circula-

tion and ‘distribution in such journals by means of

mails throughout the states of tlie United States * * *.”’

‘ This Court held that the mere formation of the ad-

vertising contracts between persons in different states

did not bring the advertising within the protection of

the Commerce Clause (303 U. S. at p: 253). ‘It then

rejected the argument that such protection. applied because

the publication had an interstate <circulation. It held

a magazine publisher from the sale of advertising space. .

motor trucks, railroads, express, and-the United States —.

| 10

that the business taxed : was ‘*distinet from interstate com- |

merce’’ and that (p. 258) :

‘ ‘‘the business of preparing,»printing and publishing

magazine advertising is peculiarly local and distinct

from its circulation whether or not that cireulation.

“be interstate commerce.”

? The New Mexico statute involved - ‘in the Western Live

Stock- case imposed ‘‘privilege taxes, measured by the:

amount or volume of business done,’’ at different rates ~

on different businesses. The tax was imposed on the busi-

_ ness of publishing newspapers and “at the rate

of 2% of the gross receipts; ‘: the gross receipts of |

the business of publishing newspapers or magazinzs shall

inelude only the amounts received for the sale of. adver-

‘tising space’’ (303 U. S. at p. 251, footnote 1).

The’ tax here in issue is imposed ‘‘for the privilege of.

carrying on * * * business’’ within the City., The rate is

Ys of 1% and the tax is measured by ‘*all receipts received

in and/or allocable to the city’’ (General City Law of the: »:

State of New York, sec. 24-a, subsec. 2a; Administrative

Code of the City of New York, sec. B46-20, subd. a).

Thus, both are privilege taxes imposed. on magazine

j henevgeh for the privilege of engaging in the publishing

siness within the taxing jurisdiction and are measured by

5 ties —- e

Hl

In the Western Live Stock case the Court said that the —

‘preparing, printing and publishing is peculiarly local”

and distinct from its circulation”? (303 U. S. at p. 258).

The appellant argues that in the case at bar both the |

printing and publishing of the magazine advertising were

carried on largely outside New York and that part *

the preparation was done in Cpemeetnem. :

Pewee ie

' We.shall now show ‘that, to the extent that appellant

participated in them, the preparation, printing and publish- :*

. ing-of advertising matter were done by it entirely in New

| Tok City.

a Preparation

. In neither the Western Live Stock nor in the present

ease did the publishér create the advertisements. In both

cases the advertiser or the advertising agency prepared the

“outs, mats, engravings (and) copy’’ and sent them to the

‘magazine (Western Live Stock record, p. 8).

_——All advertising orders aré ‘accepted by appellant at the

_ New York office. The advertising i is ‘‘carefully scrutinized’’

by appellant which exercises a -‘‘very close censorship”’

and: places: a quota on liquor: advertising (fol. 869). In

fact, where the advertising does not meet the appellant’s

standards, the advertiser is told what he should put jg the |

‘advertisement and is given the option to ‘‘either accept .

our recommendations or withdraw the ‘advetlising’’ (fols. |

871-873). Each: year 30 to 40 accounts are rejected for

failure to meet appellant’s standards or because ofits

liquor quota ‘(fols. 880-883). .

This supervision over advertising exceeded anything |

shown in the Western Live. Stock case.

b. Printing : |

. While it is true that the actual printing is done by an

independent Connegticeut printer, every aspect of the print- ~

ing in which the appellant participates is done at the

«New York office or under its direction. The makeup de-

_ partment in- New York determines where each advertise-

- ment will be placed in the magazine and prepares a dummy

dummy is a guide for the printer who must follow it in

all respects (fols. 445, 448-450). The proof is then sent

to the appellant in New York (fols. 442, 478). All last .

which is an exact replica of the issue (fols. 438-439). This ~

12.

minute changes relating to advertising are made by tele-°

phone from the New York office to the printer ~_

_ 497- 499),

No one ~~ the advertising department goes to Connec-

ticut and that department does not in any way participate

in -the printing aside from the New York activities just

described: The once-a-week trips to the printer-by a few

' members of the editorial department have nothing to do

with advertising (fol. 1034). Their last minute revisions

and checking of copy are confined to the editorial matter. —

The exclusively local activities of this appellant with -

respect to advertising are no less local because an inde- —

pendent third party does the printing in another state.

The mere fact that the appellant does not do the printing

itself cannot transform its advertising activity into inter-

state commerce or bar the imposition of the tax. Certainly,

‘ no such argument could be advanced if the third party .

printer were located in New York. Nor can the chance

fact that the independent printer. is located in Connecticut

alter this. There is no basis for treating the printing in

Connecticut, which is done by a third party, as though it

were an activity actually performed by the enemies itself

‘in inother state.

> @

c. Publishing ae

The claim that the magazine is ‘‘published’’ in Con. _

” necticut is directly contradicted by the jegend contained

On the index page of ‘The New Yorker magazine itself,

which reads as follows (p. 2 of Appellant’s Exhs. 3 and 4):

*‘The New Yorker, published- weekly by the F.. R.

Publishing Corporation, 25 W. 43rd St, New York

“18, N. ¥. * * * Entered as second-class matter, | Feb-

ruary 16, 1925, at ™ -™ office at New York, N. Y.

lecits Printed. in U.S: a as

13

=

' The contract with the aniiiee dalled for shipment to the |

public from New York (‘Roll wrap and deliver to Grand |

Central and General Post Offices N. Y. C.’’, City’s: Exh. -

A, p. 4; City’s Exh. B, p. 5). And all circulation instruc-

tions were issued. from appellant’ 8 office in’ New York

(fols. 729-730). ,

The New York ene is ; given as appellant’ 5 office on:

the rate cards (record, PP. 385-386), in ‘official announce-

ments (i., pp. 387-388), in statements and reports to the

Audit Bureau of Circulations (id., p. 391; Pet’s Exhs. 15,

16, 17, 29, 30) ‘and in promotional material, (record, pp. |

407, 409, 411; .Appellant’s: Exh. 39).

‘Surely the independent Connecticut printer is not the.

publisher. It seems equally ‘clear that place of publica-.

tion does not shift from New York to Connecticut- simply

because the printer mails some of the copies of the maga-

zine from the fatter state.

Iv ..

Just as in the.Western Live Stock case, there .is no

danger of multiple taxation of the- advertising ‘receipts

in the present case. Any risk of multiple taxation arising

* from the possibility that a state where the appellant has

an office for the solicitation of advertising might tax such -

Teceipts has been tliminated. All receipts from the one

. ‘guch office maintained by the appellant have been excluded

from the measure of the tax.” Nor can the mere: fact that

the magazine circulates in other states furnish such states.

with a basis for taxing. the advertising receipts (303 U.S.

at. p. 260).

Similarly, there is no danger of taxation of the advertis-

ing receipts by Connecticut. On. this point it -suffices to

quote ‘the well reasoned statement of the intermediate:

court below (2 AD 2d at p. 604) :

14.

*- this. case . the fact that‘ taxpayer’s printing is done

in the State of Connecticut does not create that danger,

because the. printing is done under independent con-

tract, and there is no localized ownership (and there-

fore activity) of an integral part of the unitary opera-

tion of publishing, editing and printing a- magazine. —

The localized activity there, then, becomes that. of the

printer, rather than of this taxpayer. To the point —

urged by the- taxpayer here, that it warehouses large

' quantities of paper in Connecticut in order to serve —

‘its printer ‘and may, ‘therefore, be subject to local

- taxation in Connecticut, it must be assumed that | any

@ «such local taxation, to be valid; could not be a privi-

lege-of-doing-business tax, although it might be a

_-s- property tax, or tax based” on use, or other non-

3 —— local tax.”

ay

Appellant’s use of so-called’ ‘‘editions’’ in selling its

magazine does not establish a circulation pattern essen- -

tially any- different from that in the Western 2 Stock

- ease. In that case all copies of the magagine Were the

same. Here, the copies of the New Yorker that circulate

within New York City are essentially the same as the —

copies circulating elsewhere. In editorial content there

is only a very slight difference. And in advertising con-

tent there is no difference whatsoever except that the

copies circulating within New York City contain a4 number

of advertisements omitted from the copies circulated else-

where. | ;

Nor den te appellant’s national tintin canse this

case to differ from Western Live Stock. In that'case this

Court proceeded on the assumption’ that the ‘advertising.

contract stipulated ‘‘that the advertisements shall be sent.

to subscribers out of the state, or is so framed that the

15

compénsation would not: be earned if subscribers outside

the state should cancel their subscriptions’? (303 U. S.

ete «© a Bas, ee

, B. Western Live Stock v. Bureau of Revenue, 303 U. S.

- 250. (1938) is still sound.law. , *

During the twenty years since the Western Live Stock

case was decided this. Court has referred to it in thirty

different, decisions : twenty-five times.in majority opinions;

three times-in dissenting opinions; and twice in dismissing

appeals for. want of a substantial federal question. In ~

none of these cases has the authority of the decision been

overruled or questioned. In every instance it is cited with

approval. -_—* ,

Appellant appears to rely principally on the three cases 3

of Lorain Journal Co. v. United States, 342 U. S. 143

(1951) ; Gwin, White é Prince, Inc. v. Henneford, 305 U. S.

434 (1939) and Fisher’s Blend Station v. State Tax Com-

mission, 297 U. S, 650 (1936). ~~ capes uit

"The. Lorain Journal case involved a Sherman Antitrust

- Act prosecution against a newspaper publisher to enjoin

_ it from monopolizing commerce. In sustaining the Federal

. Government’s jurisdiction this Court relied on cases which.

specifically state that federal regulation may extend to

activities which are, beyond dispute, subject to state. taxa-

tion. a

Binderup J Pathe Exchange, 263 U. S. 291, 311

(1923); * tie i"

Stafford v. Wallace, 258.U. S. 495, 525-528 (1922) ;

‘ Swift & Co. v. United States, 196 U. 8. 375, 399-

400 (1905). ‘ ? '

In fact, the Sherman Act may be applied to competitive

- practices which, for tax and other purposes, are regarded

as wholly intrastate. « er :

16

United States v. Wrightwood Dairy Co., 315 U. S.

110, 120 (1942); om

- Mandeville Farms v: Sugar Co., 344 U. Ss. 219,

F 234 - a

‘Most significant i is the fact that the Court i in the —

Journal case decision made no reference to the Western

‘Eave Stock: case, although counsel for the publisher reliéd

“upon it in his brief. And the Subsequent references by

this Court to the Western Live Stock case in two 1954 de- ©

cisions (Michigan-Wisconsin Pipe Line Co. v. Calvert, 347

U. S. 157, 165-166, 169-170 and Braniff Airways.v. Nebraska ~

State Board, 347 U. S. 590; 597-598) indicate that its | au-

_ thority has not been limited. : " ,

Gwin, White & ‘Prince, Inc. v. i Means, sie Ss. 434 -

(1939), involved a Washington privilege tax, measured by —

- gross receipts, applied to.a Washington concern selling

‘ produce in other states and in foreign countries. The tax,

as measured by the receipts from such sales, was held to

_be invalid on the ground that it was an inapportioned tax

- on activities extending beyond the limits of the state. . |

The case might be relevant if the present tax were im. -

posed .on appellant’ 8 receipts from the circulation of its

magazine in states other. than New York. But the appel-

lant’s receipts from circulation have been taxed, without

challenge, only to the extent of the receipts from circila- .

tion of the magazine within the City of New ‘York. The

only dispute relates to the tax on appellant’s | separase and

distinet local advertising receipts.

In the Gwin White decision the Court expressly dis-.

Yinguished the situation in that case from the Western Live

Stock case. It said that the states to which the commerce

extended were. in a position to impose a tax similar to the

- Washington tax on the activities carried on in those states,

thus exposing the business to the risk of multiple taxation,

_ whereas such a risk was absent in the Western Live Stock

ease (305 U. S. at pp. 439-441).

‘17

- With ‘nll to the Fisher’ 8 Blend mite case, a ob-

‘ vious’ answer is that it Was considered in the Western

Live Stock case~and distinguished on the ground that

broadcasting is ‘‘itself interstate communication” (308

ieadees tee Sos

ant POINT. tt a x

The es due process ond equal protection

| contentions are completely without merit.

The ‘appellant’ 8 argument is that it is heing discrimi-

nated against because other businesses have’been taxed on |

an allocation basis while all of its advertising receipts from

its New York: office have been taxed, The answer is that

thé allocations were‘all required by the federal constitution

under rulings by this Court. The appellant appears to’

concede that this is so, but asserts that there is no ‘‘factual*

difference’’ between it and those who pay tax on an allo-

cated basis. Its argument comes down to a repetition of —

its Commerce Clause cuntention or a claim that one not

protected from state taxation’ by the Commerce Clause

may -limit’ such taxation on the ground that, it resembles

- those. protected from taxation by the Commerce Clause.

The appellant argues also that, since the tax law author- |

izes the Comptroller to decide the circuinstances in which:

‘allocation of tax is required by the federal constitution,

_the'validity of this administrative action.may be judicially

reviewed.

Such a delegation of powers to the Comptroller is neces-

sary and valid. Olive Coat Co. v. McGoldrick, 287 N. Y.

769 (1942); Wheeling Steel Corp. v. Foz, 298 U. S. 193,

215 (1936).

So far as the Comptroller’s ‘determination ' affects the

‘ appellant it is reviewable and: has been reviewed: in the

present case. On the other hand, the’ appeVant: cannot

escape tax, simply hecause, in interpreting this Court’ S

ih

18

decisions concerning the Commerce Clause, the Comptroller

may have made an error in concluding that another class:

of taxpayers cannot be taxed except on an allocated basis.

Charleston Assn. v. Alderson, 324 U. S. 182, 190-191 (1945) ;

Snowden v. Hughes, 321_U. S. 1, &9 (1944). Moreover, no

such error has been shown.

| CONCLUSION bee

The appeal to this Court from the order of the Court

of Appeals of the State of New York should be

dismissed.

March 17, 1958. .

eer, submitted,

PETER Canevunts, Brown,

Corporation Counsel of the

; City of New Y. ork,

- Attorney for Appellees.

STranLeY BucussBaum,

‘Morris L. HEatTH,

Of Counsel.