Petition for Writ of Certiorari — Alaska Airlines, Inc. v. California Department of Food & Agriculture

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Suprems Court, U.s.

FILED

_No. 95-95 + 48 8 SEP 1 9 1995.

Supreme'Court...

OF THE

United States

OCTOBER TERM, 1995

ALASKA AIRLINES, INC., AMERICAN AIRLINES, INC.,

DELTA AIR LINES, INC., NORTHWEST AIRLINES, INC.,

and UNITED AIR LINES, INC.,

Petitioners,

Vv.

CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE,

HENRY J. Voss, as Director of the California

Department of Food and Agriculture,

and STATE OF CALIFORNIA,

Respondents.

On Petition for a Writ of Certiorari

to the Court of Appeal of the State of California,

Second Appellate District

PETITION FOR A WRIT OF CERTIORARI

Of Counsel: BuRT PINES

DONALD B. AYER (Counsel of Record)

JONES, Day, REAVIS & POGUE JOHN A. SCHWIMMER

Metropolitan Square ALSCHULER, GROSSMAN &

1450 G. Street, N.W. PINES

Washington, D.C. 20005 2049 Century Park East

(202) 879-3939 39th Floor

Los Angeles, CA 90067-3213

(310) 277-1226

Counsel for Petitioners

Bowne of Los Angeles, Inc., Law Printers (213) 627-2200

A SE

QUESTION PRESENTED

Whether a fee imposed by the State of California on

arriving international flights, which fee is for agricultural

inspections and not for the use of airport facilities, is exempt

from the federal prohibition on fees or charges on “the

transportation of an individual traveling in air commerce” or

on “the sale of air transportation” set out in the Anti-Head

Tax Act, 49 U.S.C. § 40116(b) (former 49 U.S.C. App.

§ 1513(a)), merely because the fee applies to both passen-

ger and non-passenger flights.

PARTIES TO THE PROCEEDINGS

Petitioners Alaska Airlines, Inc., American Airlines, Inc.,

Delta Air Lines, Inc., Northwest Airlines, Inc., and United

Air Lines, Inc. were plaintiffs in the Los Angeles Superior

Court, respondents in the Court of Appeal of the State of

California, Second Appellate District, and petitioners to the

California Supreme Court. The California Department of

Food and Agriculture, Henry J. Voss, as Director of the

California Department of Food and Agriculture, and the

State of California were defendants in the Los Angeles

Superior Court and appellants in the Court of Appeal.

Petitioner Alaska Airlines, Inc. states that its parent

company is Alaska Air Group, Inc., and that it has no non-

wholly owned subsidiaries.

Petitioner American Airlines, Inc. states that its parent

company is AMR Corporation, and that it has no non-

wholly owned subsidiaries.

Petitioner Delta Air Lines, Inc. states that it has no

parent company and no non-wholly owned subsidiaries.

Petitioner Northwest Airlines, Inc. states that its parent

companies are NWA, Inc., and Northwest Airlines Corpo-

ration, and that it has no non-wholly owned subsidiaries.

Petitioner United Air Lines, Inc. states that its parent

company is UAL Corporation, and that its only non-wholly

owned subsidiaries are Kion de Mexico, S.A. de C.V., and

Four Star Insurance Company, Ltd.

TABLE OF CONTENTS

QUESTION PRESENTED.........--.-+++-++::

PARTIES TO THE PROCEEDINGS..........--

TABLE OF AUTHORITIES ...........--+--++:

OPINIONS BELOW ..........---- eee eee eeees

JURISDICTION ......... ee cece cece eee eeeeees

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED ..........

BTATIMEEINE cc ccc cccccccsccccnceccscccccsess

REASONS FOR GRANTING THE PETITION ..

THE DECISION BELOW LIMITING THE COV-

ERAGE OF SECTION 1513(a) TO FEES RE-

LATING ONLY TO THE TRANSPORTATION

OF PERSONS IS CONTRARY TO THIS

COURT’S DECISIONS IN ALOHA AIRLINES

AND NORTHWEST AIRLINES .......--+++--

II.

THE INSPECTION FEE DOES NOT FALL

WITHIN THE “SAVING” CLAUSE OF SEC-

,: ) 6.) ) rere rrr

ITI.

THE DECISION BELOW, IF ALLOWED TO

STAND, WILL BE HIGHLY DISRUPTIVE TO

INTERSTATE AND INTERNATIONAL AIR

COMMERCE ........ cece ccccccccccccccees

CONCLUBION «0c ccc ccc cece ccc ccccc cece:

APPENDICES

Appendix A:

Decision of the California Court of Appeal, Sec-

ond Appellate District, filed March 27, 1995

A-2

TABLE OF CONTENTS

Page

Appendix B:

Order of the California Supreme Court Denying

Petition for Review, filed June 22, 1995 ..... A-16

Appendix C:

Federal Anti-Head Tax Act (present version) 49

Cs AE on 6 dtaneh waka cae A-17

Appendix D:

California Airport and Maritime Plant Quaran-

tine, Inspection and Plant Protection Act,

adopted September 30, 1990............... A-21

Appendix E:

California Department of Food and Agriculture

Regulation, adopted April 1, 1991 .......... A-28

Appendix F:

First Amended Complaint for Declaratory Relief,

Injunctive Relief, and Restitution, filed

PFA 4 bad x BOS adeno Pee chekes A-30

Appendix G:

Order Granting Motion for Summary Adjudica-

tion of Issues and for Summary Judgment, filed

UE Uh SE a as pds cand aeeeee eee A-42

Appendix H:

Judgment by Court, filed July 9, 1993......... A-55

Citta

TABLE OF AUTHORITIES

Cases

Federal

Aloha Airlines, Inc. v. Director of Taxation, 464

U.S. 7, 104 S.Ct. 291, 78 L.Ed.2d 10 (1983)

vg bac cesta take dak dbedadess tea 9, 10, 12, 16

Denver v. Continental Airlines, Inc., 712 F.Supp. 834

CEP SUED Sdendctaddupicccdudeuel 11, 12, 14, 15

Evansville-Vanderburgh Airport Auth. Dist. v. Delta

Airlines, Inc., 405 U.S. 707, 92 S.Ct. 1349, 31

Sa eT GUD 6 ko 5 Se he ds Pe ae ce Ke 9

Indianapolis Airport Authority v. American Airlines,

Inc., 733 F.2d 1262 (7th Cir. 1984)............ 11

Northwest Airlines, Inc. v. County of Kent, 510

U.S. —__, 114 S.Ct. 855, 127 L.Ed.2d 183 (1994)

wivauuadsbuvesdb beer. eeeeeed 8, 10, 11, 12, 13, 16

Rocky Mountain Airways, Inc. v. County of Pitkin,

674 F.Supp. 312 (D.Colo. 1987) .............. 11,12

State

Airborne Freight Corp. v. New York State Depart-

ment of Taxation and Finance, 137 A.D.2d 30, 527

tb § Oe.) Aare eee 12

Republic Airlines, Inc. v. Department of Treasury,

169 Mich.App. 674, 427 N.W.2d 182 (1988).... 12

Constitutional Provision

United States Constitution, Art. 1, § 8, cl. 3 ...... 2

TABLE OF AUTHORITIES

Statutes

Page

Federal

SD Riis SO RMPTURD cccccchvivochexéversveuewm 2

GD ELBA. BA, BUSES ccc neccavecsnsiseseesase passim

49 U.S.C. App. §§ 1301(10) and (24) ........... 10, 13

GRAB, BUNGE cc veccccécccccscesueuneceuns 10, 13

git ee C PPPPPET TTT TT eS TTT eee 3,8

State

California Food and Agricultural Code §§ 5350-5353

adecusecesoseeseedusees pean 4, 6,12

Title 3, California Code of Regulations § 3560..... 5, 6

Legislative Material

House Report No. 103-180, reprinted in 1994 U.S.

Code Cong. & Ad. News 818-23, 1088-89 ...... 3

No. 95-

In the Supreme Court

OF THE

United States

OCTOBER TERM, 1995

ALASKA AIRLINES, INC., AMERICAN AIRLINES, INC.,

DELTA AIR LINES, INC., NORTHWEST AIRLINES, INC.,

and UNITED AiR LINEs, INC.,

Petitioners,

CALIFORNIA DEPARTMENT OF FooD AND AGRICULTURE,

HENRY J. Voss, as Director of the California

Department of Food and Agriculture,

and STATE OF CALIFORNIA,

Respondents.

On Petition for a Writ of Certiorari

to the Court of Appeal of the State of California,

Second Appellate District

PETITION FOR A WRIT OF CERTIORARI

Alaska Airlines, Inc., American Airlines, Inc., Delta Air

Lines, Inc., Northwest Airlines, Inc., and United Air Lines,

Inc., respectfully petition for a Writ of Certiorari to review

the judgment of the Court of Appeal of the State of

California, Second Appellate District, in this case.

OPINIONS BELOW

The opinion (“Opinion”) of the Court of Appeal of the

State of California, Second Appellate District, is reported at

33 Cal.App.4th 506, 39 Cal.Rptr.2d 426 (1995), and is

reprinted in the Appendix to this petition (“Pet. App.”).

The order of the Supreme Court of the State of California

(Pet. App. A-16) denying Petitioners’ Petition for Review

of the Court of Appeal’s decision has not yet been published

in the official reports, but it may be found at 1995 Cal.

LEXIS 4049. The decision of the Los Angeles Superior

Court granting Petitioner’s Motion for Summary Adjudica-

tion of Issues and for Summary Judgment (Pet. App. A-42)

and the Judgment in favor of Petitioners (Pet. App. A-55)

are unreported.

JURISDICTION

The Superior Court of Los Angeles County entered its

decision and judgment in favor of Petitioners on July 9,

1993. The California Court of Appeal, Second Appellate

District, issued its opinion and order reversing the trial court

on March 27, 1995. The California Supreme Court issued

its order denying review of the Court of Appeal’s decision,

without comment, on June 22, 1995. The jurisdiction of this

Court is invoked under 28 U.S.C. § 1257(a).

CONSTITUTIONAL PROVISIONS, STATUTES

AND REGULATIONS INVOLVED

The Commerce Clause of the United States Constitution,

Art. 1, § 8, cl. 3, provides, in pertinent part, that “The

Congress shall have Power ... to regulate Commerce ...

among the several States ....’

At the time of the judgment in this case, the Anti-Head

Tax Act was set forth in 49 U.S.C. App. § i513', which

provided in pertinent part:

(a) Prohibition; exemption

No State (or political subdivision thereof . . .) shall

levy or collect a tax, fee, head charge, or other charge,

directly or indirectly, on persons traveling in air com-

merce or on the carriage of persons traveling in air

commerce or on the sale of air transportation or on the

gross receipts derived therefrom ....

(b) Permissible State taxes and fees

['N Jothing in this section shall prohibit a State (or

political subdivision thereof ...) from the levy or col-

lection of taxes other than those enumerated in subsec-

tion (a) of this section, including property taxes, net

income taxes, franchise taxes, and sales or use taxes on

the sale of goods or services; and nothing in this section

shall prohibit a State (or political subdivision thereof

-+-) Owning or operating an airport from levying or

collecting reasonable rental charges, landing fees, and

'In 1994, while this matter was pending on appeal, Congress adopted

legislation to recodify Title 49 concerning the transportation laws of the

United States. As part of that recodification, former 49 U.S.C. App.

§ 1513 was revised and renumbered. The counterparts to former 49

U.S.C. App. §§ 1513(a) and 1513(b) are now set forth in 49 U.S.C.

§§ 40116(b) and (ec) and reprinted in the Appendix to this petition.

(Pet. App. A-17.) The legislative history of the recodification expressly

states that Congress did not intend to make any change in the substan-

tive law of Title 49 (House Report No. 103-180, reprinted in 1994 U.S.

Code Cong. & Ad. News 818-23, 1088-89), and therefore the recodifi-

cation has no significance to the issues on this Petition for Writ of

Certiorari. Because all of the underlying opinions refer to the statutory

enumeration and language of former 49 U.S.C. App. § 1513, Petitioners

shall refer to those provisions for ease of reference and consistency

throughout this brief.

EEEEESSSS:'S rr

other service charges from aircraft operators for the use

of airport facilities.

The California Airport and Maritime Plant Quarantine,

Inspection, and Plant Protection Act (Pet. App. A-21) is

codified in California Food and Agricultural Code Sec-

tions 5350-5353. These statutes provide in pertinent part:

§ 5350. Inspection program at airports and maritime

facilities

(a) The director shall establish a program for the

inspection of conveyances entering California through

airport and maritime facilities to prevent the introduc-

tion into, or the spread within, this state of pests.

(b) The director shall maintain plant quarantine in-

spection stations at points of entry at airports and

marine terminals pursuant to Section 5341.

dissemination of information at airports and marine

terminals in order to provide the users of the facilities

information regarding the pest control and quarantine

requirements of this state.

* * a

§ 5351. Service charge on air carriers

(a) The director shall levy a service charge, to the

extent authorized by subsection (b) of Section 1513 of

Title 49 of the United States Code, based on the

schedule established pursuant to Section 5353, on each

air carrier or foreign air carrier engaged in foreign air

commerce, as those terms are defined by Section 5353,

for the use of airport facilities for plant and animal pest

inspection, quarantine, and eradication.

* * *

§ 5353. Schedule of fees for air and marine carriers

(a) Each air carrier or foreign air carrier engaged in

foreign air commerce which carries animals or plants or

other materials which are, or are likely to be, infected

or infested with any pest shall pay a charge of cighty-

five dollars ($85) to the director upon the initial

landing in this state of each flight of the carrier which

Originates outside the United States.

* * *

(¢) The charges and fees collected pursuant to this

section shall be deposited in the Department of Food

and Agriculture Fund and shall be used by the director

for the purposes of this section and Section 5350.

(f) The director may, by regulation, increase or de-

crease any of the charges or fees prescribed in subdivi-

sion (a) or (b) upon determining that the revenue

received is inadequate or in excess of the amount

needed to conduct an effective inspection program. The

maximum adjusted charge or fee shall not exceed three

times the amount of the charge or fee specified in

subdivision (a) or (b).

The regulation of the California Department of Agricul-

ture (Cal. Code Regs., tit. 3, § 3560) (Pet. App. A-28),

provides in pertinent part:

(a) Pursuant to sections 5351 and 5353(a), each air

carrier or foreign air carrier shall pay a service charge of

eighty-five dollars ($85) to the Director upon the initial

landing in California of each flight of the carrier which

originated outside the United States from a country to

which a current United States Department of Agricul-

ture quarantine or California Department of Food and

Agriculture quarantine is applicable, or which made an

intermediate stop on that flight in such a country.

STATEMENT

On September 30, 1990, the Governor of the State of

California signed into law the California Airport and Mari-

~ time Plant Quarantine, Inspection, and Plant Protection Act

(“the Act”), California Food and Agricultural Code § 5350

et seq. (Pet. App. A-21.) Under the Act, the California

Department of Food and Agriculture (the “Department’’)

and the Director of the Department (the “Director”) are

authorized to impose a fee of $85 on every air carrier

arriving in California from anywhere outside the United

States that is the subject of a quarantine order (the “Inspec-

tion Fee”). California Food & Agricultural Code

§§ 5351(a), 5353(a). The Inspection Fee is imposed by a

governmental entity, the State of California, that does not

own or operate any of the airports at which the fees are

imposed. (Pet. App. A-44, J] B.2.)

The $85 Inspection Fee is for plant and animal pest

inspection, quarantine and eradication. California Food and

Agricultural Code §§ 5351(a), 5353(a) (Pet. App. A-24

and A-25). It is not for the use of airport facilities. (Opin-

ion, Pet. App. A-13.) After the Act was enacted, the

Director promulgated regulations thereunder on April 1,

1991, which are set forth in Title 3, California Code of

Regulations § 3560 (the “Regulations”). (Pet. App. A-28.)

Petitioners Alaska Airlines, Inc., American Airlines, Inc.,

Delta Air Lines, Inc., Northwest Airlines, Inc., and United

Air Lines, Inc. (“Petitioners”) filed suit in the Los Angeles

Superior Court on January 24, 1992, seeking declaratory

relief that the Act and the Regulations were invalid and

unenforceable, as well as restitution of all Inspection Fees

paid and an injunction against further collection of the

Inspection Fees. In less than two years, Petitioners were

compelled to pay aggregate Inspection Fees in excess of

$2.7 million through July 1993, and they continue to pay the

Inspection Fees to the present. Petitioners filed their first

amended complaint on June 17, 1992. (Pet. App. A-30.)

Petitioners alleged that the Act and the Regulations were

invalid and unenforceable on a number of grounds, including

that they were prohibited by federal law under the Anti-

Head Tax Act, 49 U.S.C. App. § 1513. Thus, in para-

graph 22 of their first amended complaint, Petitioners

alleged: |

Plaintiffs desire a judicial determination of their respec-

tive rights and duties with respect to the Regulations. |

In particular, plaintiffs desire a declaration that the :

Inspection Fee and the Regulations violate and conflict

with 49 U.S.C. Section 1513(a). (Pet. App. A-35.) |

On January 8, 1993, Petitioners filed their motion for

summary adjudication of issues and for summary judgment

directed, among other things, at the cause of action secking

declaratory relief that the Inspection Fee was prohibited by

the Anti-Head Tax Act. (C.T. 358.7) Former 49 U.S.C.

App. § 1513(a), which was the statute applicable at the

time of the trial court’s ruling, states in pertinent part:

No state (or political subdivision thereof . . .) shall levy

or collect a tax, fee, head charge, or other charge, |

directly or indirectly, on persons traveling in air com-

merce or on the carriage of person’s traveling in air

commerce or on the sale of air transportation or on the

gross receipts derived therefrom... .

The trial court, after taking the motion for summary

judgment under submission for more than three months,

*C.T. refers to the Clerk’s Transcript in the proceedings below.

issued its minute order granting the motion. (C.T. 559.)

The court held, among other things, that the Act and the

Regulations were prohibited by the Anti-Head Tax Act and

awarded Petitioners restitution of all Inspection Fees paid

and enjoined the collection of any further Inspection Fees.

The court’s formal order granting the motion and the court’s

judgment were entered on July 9, 1993. (Pet. App. A-42

and A-55.)

The Department, the Director and the State of California

(collectively “Respondents”) appealed. The California

Court of Appeal reversed the decision of the trial court. The

court of appeal concluded that the Inspection Fee is not

subject to the provisions of Section 1513(a), whose prohibi-

tion it viewed as limited to fees bearing “some rational

relation to persons or the carriage of persons travelling in air

commerce.” (Pet. App. A-11.) The court held that because

the Inspection Fee is charged on all commercial planes

arriving in California from a foreign country, regardless of

whether those planes carry passengers, the Inspection Fee is

therefore based on criteria other than “persons or the

carriage of persons traveling in air commerce.” (Court of

Appeal Opinion (“Opinion”), Pet. App. A-10.)

Petitioners filed a petition for review with the California

Supreme Court on April 7, 1995. That petition was denied

without comment on June 22, 1995. (Pet. App. A-16.)

REASONS FOR GRANTING THE PETITION

I. THE DECISION BELOW LIMITING THE COVER-

AGE OF SECTION 1513(a) TO FEES RELATING

ONLY TO THE TRANSPORTATION OF PERSONS

IS CONTRARY TO THIS COURT’S DECISIONS IN

ALOHA AIRLINES AND NORTHWEST AIRLINES.

This Court should grant this Petition for a Writ of

Certiorari because the decision of the court of appeal

decided an important question of federal law concerning the

scope and application of a federal statute, the Anti-Head

Tax Act, 49 U.S.C. App. § 1513 (presently, 49 U.S.C.

§ 40116), in a way that conflicts with the decisions of this

Court in Northwest Airlines, Inc. v. County of Kent, 510

U.S. ——, 114 S.Ct. 855, 127 L.Ed.2d 183 (1994), and

Aloha Airlines, Inc. v. Director of Taxation, 464 U.S. 7, 104

S.Ct. 291, 78 L.Ed.2d 10 (1983).’

In Aloha Airlines, Inc. v. Director of Taxation, 464

U.S. 7, 104 S.Ct. 291, 78 L.Ed.2d 10 (1983), this Court

discussed the legislative history of 49 U.S.C. App. § 1513.

In 1970, Congress had imposed a federal tax upon all airline

tickets and air freight. In 1972, this Court held that state

and local governments were not preempted by federal legis-

lation from imposing additional taxes and fees on air trans-

portation. See Evansville-Vanderburgh Airport Auth. Dist.

v. Delta Airlines, Inc., 405 U.S. 707, 92 S.Ct. 1349, 31

L.Ed.2d 620 (1972). In response, Congressional hearings

were held and, as this Court summarized, “Both Commit-

tees concluded that the proliferation of local taxes burdened

interstate air transportation, and, when coupled with the

federal Trust Fund levies, imposed double taxation on air

travelers.” Aloha, 464 U.S. at 9, 104 S.Ct. at 293, 78

>The court below correctly noted that the essential facts in this action

are undisputed and that the issues presented are questions of law

involving the interpretation of the State Act and 49 U.S.C. App. § 1513.

(Opinion, Pet. App. A-8.)

L.Ed.2d at 13 (emphasis added). These hearings resulted in

the adoption of 49 U.S.C. App. § 1513, the Anti-Head Tax

Act.

Based on the language of the Act, as construed in light of

this history, the Court in Aloha Airlines struck down a state

“tax of four per cent of . . . gross income each year from the

airline business,” as it was applied to two airlines carrying

“passengers, freight, and mail.” Aloha, 464 U.S. at 10, 104

S.Ct. at 293, 78 L.Ed.2d at 14.

Contrary to the reasoning and ruling of this Court in

Aloha Airlines that 49 U.S.C. App. § 1513(a) applies to

fees levied on the transportation of both passengers and

freight, the court of appeal wrongly concluded that the

statute was directed only against fees that “bear some

rational relation to persons or the carriage of persons travel-

ing in air commerce.” (Opinion, Pet. App. A-11.) The court

below did not cite any authority to support this conclusion.

Indeed, the legislative history of the federal statute is to the

contrary. Congress was concerned not solely with the burden

of such local taxes on passengers, but rather the burden on

the entire “interstate air transportation” system. Aloha, 464

U.S. at 9, 104 S.Ct. at 293, 78 L.Ed.2d at 13.‘

The court of appeal myopically focused solely upon the

order of the trial court, which held that the Inspection Fees

were prohibited by § 1513(a) because they constituted an

impermissible charge “on persons traveling in air com-

merce” or “on the carriage of persons traveling in air

commerce.” In Petitioners’ appellate briefs, however, in

response to arguments that the Inspection Fee did not

violate § 1513(a) because it was imposed on cargo flights as

“This Court in Aloha also expressly rejected the argument that a tax

measured by gross receipts was permissible under 49 U.S.C. App.

§ 1513 because the tax was imposed on air carriers and not on air

passengers. 464 U.S. at 11-12, 104 S.Ct. at 293-294, 78 L.Ed.2d at

14-15.

well as passenger flights, Petitioners pointed out that

§ 1513(a) also prohibited fees “on the sale of air transporta-

tion” and that the statutory definition of “air transportation”

included the carriage by air of passengers or property for

compensation. 49 U.S.C. App. §§ 1301(10) and (24) (pres-

ently 49 U.S.C. §§40102(5) and (23)). The court of

appeal, however, failed to address or analyze the applicabil-

ity of that portion of § 1513(a). (See Opinion, Pet. App.

A-6, n. 4.)

In Northwest Airlines, Inc. v. County of Kent, 510

US. —_, 114 S.Ct. 855, 127 L.Ed.2d 183 (1994), this

Court established a straight-forward approach to the analy-

sis of challenges under the Anti-Head Tax Act, which the

court below failed to follow. Rejecting the argument that

Section 1513(a) is limited to “direct head taxes,” this

Court explained the relationship between Sec-

tions 1513(a) and (b):

Sections 1513(a) and (b) together instruct that airport

user fees are permissible only if, and to the extent that,

they fall within §1513(b)’s saving clause, which

removes from § 1513(a)’s ban “reasonable rental

charges, landing fees, and other service charges from

aircraft operators for the use of airport facilities.”

Northwest, 510 U.S. at —_, 114 S.Ct. at 862, 127 L.Ed.2d

at 194. This Court further held, “The statute, in sum, is

hardly ambiguous on this matter: User fees are covered by

§ 1513(a), but may be saved by § 1513(b).” Northwest, 510

USS. at __, 114. S.Ct. at 862, n.9, 127 L.Ed.2d at 195, n. 9.

Moreover, this Court concluded that the prohibitions of

Section 1513(a) are written broadly, while the “saving”

*Thus, the lower court’s conclusion “that the inspection fee is not a

direct head tax” (Opinion, Pet. App. A-10) wholly begs the relevant

clause of Section 1513(b) is narrow. Northwest, 510 U.S. at

___, 114 S.Ct. at 867, n. 13, 127 L.Ed.2d at 196, n. 13.°

Without making any distinction between the passenger

and freight services provided by commercial air carriers, this

Court in Northwest held that the “landing fees, terminal

charges, and other airport user fees” at issue there came

within the scope of Section 1513(a). Northwest, 510 US. at

——, 114 S.Ct. at 862, 127 L.Ed.2d at 194.’

°A plethora of authority preceding Northwest had indicated that the

only user fees permitted under 49 U.S.C. App. § 1513 are those

expressly authorized by § 1513(b). See Indianapolis Airport Auth. v.

American Airlines, Inc., 733 F.2d 1262, 1265 (7th Cir. 1984); Denver v.

Continental Airlines, Inc., 712 F.Supp. 834, 840 (D.Colo. 1989); Rocky

Mountain Airways, Inc. v. County of Pitkin, 674 F.Supp. 312 (D.Colo.

1987) (“Thus, Section 1513(a) is a broadly worded prohibition of any

kind of indirect charge on the carrying of persons in air commerce.

Section 1513(b) then lays out certain exceptions to this broad prohibi-

tion.”). As discussed below in Section II, the Inspection Fee does not

fall within the “saving” clause of Section 1513(b).

’This application of § 1513(a) to the fee at issue in Northwest

remains part of the holding of the case notwithstanding the Court’s

subsequent conclusion that the fees were permissible pursuant to

§ 1513(b).

As in Aloha and Northwest, in both the Denver and Rocky Mountain

cases, the fees at issue were imposed on all commercial flights, not just

passenger flights. Denver, 712 F.Supp. at 835; Rocky Mountain, 674

F.Supp. at 314. See also Republic Airlines, Inc. v. Department of

Treasury, 169 Mich.App. 674, 427 N.W.2d 182, 186-87 (1988). Indeed,

in Airborne Freight Corp. v. New York State Department of Taxation

and Finance, 137 A.D.2d 30, 527 N.Y.S.2d 107, 108 (1988), a

New York appellate court held that Section 1513(a) prohibited the

imposition of a gross receipts tax upon an air express transportation

company that handled only cargo and no passengers:

It seems patently clear that the tax defendants have sought to

impose herein on the allocable New York shares of plaintiffs’ gross

receipts for inter-state transportation, in fact, is levied upon receipts

at least a portion of which are for air transportation of packages and

Here, the imposition of the Inspection Fee results from

the “initial landing in this state” of an international flight of

an air carrier. California Food and Agricultural Code

§ 5353(a). Were the fee assessed on a per passenger basis,

no one could doubt that it is covered by § 1513(a). There is

no authority to support the court of appeal’s conclusion that

fees imposed on a per plane basis, without regard to the

presence or number of passengers, do not fall within the

provisions of 49 U.S.C. App. § 1513(a).

The court of appeal set forth the following factors to

support its conclusion that the Inspection Fee was not

subject to the provisions of Section 1513(a):

The undisputed facts presented to the trial court

established that the fees are based on criteria other

than the number of passengers carried; that the fees are

also imposed on non-passenger flights; that the fees do

not vary depending on the number of passengers or

passenger receipts; that inspections are also performed

on air cargo and air freight operations; that the fee is

charged even if the airplane is empty; .. .°

(Opinion, Pet. App. A-10.) None of these factors is relevant

to the applicability of § 1513(a) under the analysis of this

Court in Northwest Airlines. The question is simply whether

it is clear, as here, that the fee is being imposed on the

landing of a commercial aircraft, regardless of whether the

aircraft carries passengers or cargo or both.

freight of plaintiffs’ customers. Therefore, the Federal exemption as

to such taxation ‘directly or indirectly’ clearly applies .. . .

*There is no evidence in the record whatsoever that Petitioners ever

flew an “empty plane” from a foreign country to an airport in California

or that an Inspection Fee was ever imposed on an “empty plane.” Thus,

this factor is entirely hypothetical. It is also irrelevant to the determina-

tion of the issues on this petition, since at most it supports an argument

that the Inspection Fee might be valid when imposed on aircraft

carrying neither passengers nor freight.

The correctness of this conclusion is demonstrated by the

fact that Section 1513(a) prohibits any direct or indirect

charge “on the sale of air transportation.” Title 49 defines

“air transportation” as “the transportation of persons or

property by aircraft as a common carrier for compensation

” 49 U.S.C. §§ 40102(5) and (23) (emphasis added).°

Thus, the unambiguous terms of the federal legislation

make clear that it applies to fees, like the one at issue here,

which reach non-passenger flights and air cargo operations

as well as passenger flights.

Il. THE INSPECTION FEE DOES NOT FALL

WITHIN THE “SAVING” CLAUSE OF SECTION

1513(b).

49 U.S.C. App. § 1513(b) states, in pertinent part:

[Nothing in this section shall prohibit a State (or

political subdivision thereof ...) owning or operating

an airport from levying or collecting reasonable rental

charges, landing fees, and other service charges from

aircraft operators for the use of airport facilities.

The decision of the California Court of Appeal conceded

that, if the Inspection Fee was covered by § 1513(a), it

would not be saved by the user fee exception of § 1513(b),

since it is not imposed in order to support the airport

facilities. (Opinion, Pet. App. A-13.) In that respect, the

court was surely correct.

The Inspection Fees are not “for the use of airport

facilities.” All of the authorities addressing this language

involve matters that obviously relate to the use of the airport

as an airport, such as landing fees and terminal costs.

*These sections replaced former 49 U.S.C. App. §§ 1301(10) and

(24) in the 1994 recodification of Title 49.

For example, in Denver v. Continental Airlines, Inc., 712

F.Supp. 834 (D.Colo. 1989), the City and County of Den-

ver, as the owner of an international airport, imposed certain

fees on the airlines in order to help fund the construction of

a proposed new airport. Two airlines challenged the imposi-

tion of these fees on the grounds that they were not

authorized by 49 U.S.C. App. § 1513(b) because the fees

were not “for the use of airport facilities’ but rather to fund

the construction of a new airport. The court held that the

fees were improper because they were not “to be used to

operate and maintain the presently existing airport facili-

ties.” Denver, 712 F.Supp. at 840. The court stated, “Since

the airlines are unable to use airport facilities which do not

yet exist, Denver cannot charge them and their passengers

for any costs connected with a replacement facility before

that facility is in use.” Jd. The court then concluded, “Such

charges are unreasonable as a matter of law because they do

not relate to the present use of the existing public facility.”

Id.

The Inspection Fee here has even less relationship to the

“use of airport facilities” than the fee that was at issue in

Denver. The purpose of the Inspection Fee has nothing to do

with the use of airport facilities. Rather, it is imposed to

protect the people of the State of California from the

introduction of exotic pests.'° Moreover, the Inspection Fee

This legislative purpose is manifest from the legislative findings and

declarations in Section 2 of the Act. Section 2(a) states, “The introduc-

tion of exotic plants and animal pests poses a serious threat to the health,

safety, and economic well being of the People of this State.” (Pet. App.

A-23.) Section 2(c) then states, “The inspection or removal of exotic

pests from air and marine conveyances is a necessary and reasonable

service provided by the State and its political subdivisions.” (Pet. App.

A-23.) Similarly, in declaring the Act to be an urgency statute that

would go into effect immediately, the Legislature provided in Section 8

of the Act, “In order to protect the People and the environment from

repeated application of pesticides and to protect California agriculture

is imposed by the State, which does not “own or operate”

any of the airports where the Inspection Fees are imposed.

(Pet. App. A-44, ¥ B.2.)

Thus, the Inspection Fee clearly does not fall within the

“saving” clause of Section 1513(b), and it is thereby pro-

hibited by the Anti-Head Tax Act.

Il. THE DECISION BELOW, IF ALLOWED TO

STAND, WILL BE HIGHLY DISRUPTIVE TO

INTERSTATE AND INTERNATIONAL AIR

COMMERCE.

The court of appeal’s decision, if allowed to stand, extends

to state and local governments an open invitation to raise

revenue and avoid the strictures of the Anti-Head Tax Act

through the mere expediency of imposing charges on all

commercial flights on a per plane basis, rather than on a per

passenger basis or just on passenger flights. As a result, the

court of appeal’s decision would emasculate the Anti-Head

Tax Act, and impose a substantial financial and administra-

tive burden on interstate and foreign air commerce.

Indeed, the decision below creates an absurd and anoma-

lous situation where state and local governments may, on

the one hand, impose fees “for the use of airport facilities”

only if they are reasonable under 49 U.S.C. App.

§ 1513(b) (i.e., they approximate the reasonable costs of

the benefit conferred on users of the airport, as this Court

held in Northwest, 510 U.S. at __, 114 S.Ct. at 857, 127

L.Ed.2d at 196-97), but on the other hand, the governmen-

tal entities may impose any charges, reasonable or not, for

purposes unrelated to the use of airport facilities, so long as

the charges are imposed on all planes in a specified category

from pests as soon as possible, it is necessary that this act take effect

immediately.” (Pet. App. A-27.)

(such as flights from a foreign country) and not just on

passenger planes.

For example, under the reasoning of the court of appeal’s

decision, a municipality might well be allowed to impose

fees on aircraft landings without running afoul of the restric-

tions of the Anti-Head Tax Act to (1) subsidize passengers

to use buses or vans to travel to or from the airport,

(2) purchase buses and vans for airport transportation,

(3) build a mass transit system to the airport, (4) widen

streets and intersections near the airport, (5) mitigate the

pollution caused by aircraft operations, (6) support police

and fire services throughout the community, or (7) help

bring tourism into the area. Clearly, the Anti-Head Tax Act

and this Court’s decisions in Northwest and Aloha were

intended to prevent state and local governments from using

foreign and interstate air transportation as a source of

revenue for such projects unrelated to the use of the airport

as an airport.

The potential financial impact on the airline industry of

the court of appeal’s decision is enormous. The impact on

Petitioners themselves, while substantial, is only the tip of

the iceberg. The five Petitioners, alone, were obligated to

pay aggregate Inspection Fees of more than $2.7 million in

California for a period of less than two years. Foreign air

carriers flying into California airports have also been re-

quired to pay substantial Inspection Fees. If the decision

below is allowed to stand, other cash-strapped state and

local governments will undoubtedly look to airline landings

as a new source of revenue and begin imposing similar fees.

The resulting proliferation of charges, based on the reason-

ing of the court of appeal’s decision, could well defeat

entirely the purposes of the Anti-Head Tax Act.

If permitted to stand, the court of appeal’s decision could

also prompt foreign countries, whose air carriers are now and

in the future subject to the Inspection Fee (and possibly

additional local fees and charges to be imposed by other

state and local governments, based on the reasoning of the

decision below), to retaliate against United States air carri-

ers flying to those countries.

CONCLUSION

For all the foregoing reasons, Petitioners request that this

Court grant their Petition for a Writ of Certiorari.

Respectfully submitted,

Of Counsel: BuRT PINES

DONALD B. AYER (Counsel of Record)

JONES, Day, REAVIS & JOHN A. SCHWIMMER

POGUE ALSCHULER, GROSSMAN &

Metropolitan Square PINES

1450 G. Street, N.W. 2049 Century Park East

Washington, D.C. 20005 39th Floor

(202) 879-3939 Los Angeles, CA

September 1995 90067-3213

(310) 277-1226

Counsel for Petitioners

A-l

PETITIONERS’ APPENDIX

. Decision of the California Court of Appeal,

Second Appellate District, filed March 27, 1995

. Order of the California Supreme Court Denying

Petition for Review, filed June 22, 1995 ......

. Federal Anti-Head Tax Act (present version)

A pe rary re

. California Airport and Maritime Plant

Quarantine, Inspection and Plant Protection

Act, adopted September 30, 1990 ...........

. California Department of Food and Agriculture

Regulation, adopted April 1, 1991 Title 3,

California Code of Regulations, Section 3560

. First Amended Complaint for Declaratory

Relief, Injunctive Relief, and Restitution, filed

, 8 Se RE Pe eee

. Order Granting Motion for Summary

Adjudication of Issues and for Summary

Judgment, filed July 9, 1993 ...............

. Judgment by Court, filed July 9, 1993 .......

A-28

A-30

A-2

APPENDIX A

B076888

) CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF

THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

ALASKA AIRLINES, INC. et al.,

Plaintiffs and Respondents,

Vv.

CALIFORNIA DEPARTMENT OF FOOD AND

AGRICULTURE; HENRY J. Voss, as

Director, etc.; et al.,

Defendants and Appellants.

(Super. Ct. No. BC047104)

FILED

March 27, 1995

APPEAL from a judgment of the Superior Court of Los

Angeles County. Frederick J. Lower, Jr., Judge. Reversed.

Daniel E. Lungren, Attorney General of the State of

California, Roderick E. Walston, Chief Assistant Attorney

General, Walter Wunderlich, Senior Assistant Attorney

General, Douglas B. Noble, Acting Senior Assistant Attor-

ney General, Charles W. Getz, Supervising Deputy Attor-

ney General, and John Davidson, Deputy Attorney General,

for Defendants and Appellants.

Alschuler, Grossman & Pines, Burt Pines, and John A.

Schwimmer for Plaintiffs and Respondents.

This is an appeal from a summary judgment ordering the

California Department of Food and Agriculture (“the De-

partment”) to return service charges collected from the

iad

A-3

respondent airlines and enjoining the Department from

collecting such charges in the future.

INTRODUCTION

The service charges were levied pursuant to the California

Airport and Maritime Plant Quarantine, Inspection, and

Plant Protection Act (the “Act”) which has as its laudable

purpose “inspection of conveyances entering California

through airport and maritime facilities to prevent the intro-

duction or spread within ... [California] of pests.”' (Food

& Agr. Code, § 5350, subd. (a).)

The Act, adopted in 1990 as an urgency measure in

response to the 1989-1990 Mediterranean fruit fly infesta-

tion and codified as Food and Agricultural Code sections

5350-5353, authorizes the Director of the Department of

Food and Agriculture (“the Director”) to identify and

establish a list of foreign countries which the Director

believes are potential sources of exotic plant or animal pests.

Conveyances, i.e. aircraft or ships, arriving from such loca-

tions and carrying animals, plants or other materials which

are, or are likely to be, infested with any pest are inspected

at a plant quarantine inspection station located at airports

and marine terminals and assessed a “service charge” of

$85, in the case of aircraft, and $200, in the case of ships,

'The Food and Agricultural Code defines “pest” as follows: “ ‘Pest’

means any of the following things that is, or is liable to be, dangerous or

detrimental to the agricultural industry of the state:

(a) Any infectious, transmissible, or contagious disease of any

plant, or any disorder of any plant which manifests symptoms or

behavior which the director, after investigation and hearing, finds

and determines is characteristic of an infectious, transmissible, or

contagious disease.

(b) Any form of animal life.

A-4

upon initial arrival in California. (Food & Agr. Code,

§ 5353, subd. (a).)?

Charges and fees collected pursuant to the Act are to be

deposited in a special fund to be used by the Director for the

purposes of the Act. (Food & Agr. Code, § 5353,

subd. (¢).) The Director is authorized to contract with

federal and state agencies to assist the Director in carrying

out the purposes of the Act. (Food & Agr. Code, § 5353,

subd. (e).) The Director has entered into an agreement

with the United States Department of Agriculture whereby

the inspection fees are turned over to that agency to help pay

for federally mandated pest inspections. The Director is

authorized by Food and Agricultural Code section 5351,

subdivision (a) (“section 5351(a)”) to levy the service

charge “to the extent authorized by subsection (b) of

Section 1513 of Title 49 of the United States Code,” the

Federal Anti-Head Tax Act (“AHTA”). Because the lan-

California is much concerned with the possibility of pests arriving

from outside its boundaries. Accordingly, California has adopted com-

prehensive regulations to protect its agricultural industry from pests and

has provided for an elaborate system of plant quarantines and inspec-

tions. The Legislature has authorized the Director to establish, maintain

and enforce such quarantine regulations as are deemed necessary to

protect the agricultural industry from pests (Food & Agr. Code,

§ 5301), including the making and enforcing of such regulations to

prevent any plant or thing which is, or is liable to be, infested or infected

from passing over a quarantine line. (Food & Agr. Code, § 5302.) Plant

quarantines are authorized. (Food & Agr. Code, § 5341.) Every opera-

tor of a motor vehicle entering the state with a shipment of an

agricultural commodity shall cause the vehicle and shipment to be

inspected. (Food & Agr. Code, § 5341.5.) Violation of some of these

protective measures are misdemeanors. (See, Food & Agr. Code,

§ 5341.5, subd. (d).)

A-5

guage of the AHTA is critical to our opinion, we quote the

relevant portion in full here:

The AHTA as originally adopted by Congress provides in

pertinent part:?

“§ 1513. State taxation of air commerce

Prohibition; exemption

(a) No State (or political subdivision thereof. . .)

shall levy or collect a tax, fee, head charge, or other

charge, directly or indirectly, on persons traveling in air

commerce or on the carriage of persons traveling in air

commerce or on the sale of air transportation or on the

gross receipts derived therefrom... .

Permissible State taxes and fees

(b) Nothing in this section shall prohibit a State (or

political subdivision thereof...) from the levy or col-

lection of taxes other than those enumerated in subsec-

tion (a) of this section, including property taxes, net

income taxes, franchise taxes, and sales or use taxes on

the sale of goods or services; and nothing in this section

shall prohibit a State (or political subdivision

thereof...) owning or operating an airport from levy-

ing or collecting reasonable rental charges, landing fees,

and other service charges from aircraft operators for the

use of airport facilities.”

Respondent air carriers approve generally of the Act and

do not object to the inspection program, but they do object

*The AHTA was recodified in 1994. It is now codified as sec-

tion 40116 of title 49, United States Code. Section 1513(a) was restated

as subsection (b) of section 40116. The words “directly or indirectly”

appearing in subsection (a) of section 1513 were omitted as surplus.

(Historical and Statutory Notes, 49 U.S.C.A. § 40116.) The parties

share the view that the omission of the words “directly or indirectly” is

of no significance.

A-6

to the payment of the $85 service charge. They filed this

declaratory relief action alleging that the service charges

assessed by the Director were invalid because not authorized

by the Act and further, that the charges are prohibited under

the federal preemption doctrine by the AHTA. Respon-

dents’ motion for summary adjudication on each of these

grounds was granted.

In its order granting respondents’ motion, the court inter-

preted the Act to mean that the Director was granted the

power to collect the inspection fee under section 5351 (a) of

the Act, but only to the extent authorized by section 1513,

subsection (b) (“section 1513(b)”) of the AHTA. The

court found that the following matters were established,

presenting no triable issues of material fact: The fee col-

lected by defendants is not a tax described in sec-

tion 1513(b); the State does not own or operate any of the

airports at which the fee is charged to the respondents; the

fee is not imposed for the use of airport facilities or for the

present operation or maintenance of existing airport facili-

ties. From these facts the court concluded that the fee is not

authorized by section 1513(b) of the AHTA. Moreover,

because the Act specifically provides that the Director may

levy a service charge only “to the extent authorized by

subsection (b),” the court determined that respondents’

collection of the fee violates the Act.

The court also concluded that the fee was impermissible

under section 1513, subsection (a) (“section 1513(a)”) of

the AHTA because the fee “constitutes a fee or charge on

the carriage of persons travelling in air commerce and an

indirect fee or charge on persons travelling in air com-

merce.” In connection with this issue, the court found that

“The trial court made no finding regarding whether the inspection fee

constitutes a tax or charge on the sale of air transportation or on gross

receipts. We express no view on these questions.

A-7

the fees charged are passed on to air passengers by the

plaintiffs.

Because the order granting summary adjudication was

dispositive of the action, the trial court entered a summary

judgment awarding respondents restitution of all service

charges paid, enjoining the collection of service charges in

the future, and dismissing the remaining causes of action at

respondents’ request. The trial court also dismissed a cross-

complaint filed by appellant against Northwest Airlines, Inc.

Appellants contend that the trial court erred in its deter-

mination that the service charge authorized by the Act is an

impermissible “tax, fee, head charge, or other charge”

levied directly or indirectly, on persons traveling in air

commerce or on the carriage of persons traveling in air

commerce within the meaning of section 1513(a). Appel-

lants further maintain that, because the fee does not fall

within those impermissible charges set forth in section

1513(a), it does not violate section 5351 (a) of the Act.>

Respondents counter that the inspection fee is a “tax, fee,

head charge, or other charge” within the meaning of section

1513(a) and thus violates the AHTA. Respondents also

contend that because the fee is not one authorized by

section 1513(b), the service charge is being levied in viola-

tion of the Act.

*In addition, appellants argue that respondents have no standing to

sue, since they have no right to enforce the AHTA through a private

right of action but must pursue administrative remedies, which would

then be subject to judicial review. We concur with respondents that this

issue was not raised in the summary adjudication proceedings below, and

thus is not properly before us on appeal. Moreover, contrary to appel-

lants’ position, the issue is not jurisdictional. (Northwest Airlines, Inc. v.

County of Kent, Michigan (1994) U.S. __, 114 S.Ct. 855, 862

(“The question whether a federal Statute creates a claim for relief is not

jurisdictional” }.)

A-8

The essential facts relating to these issues are undisputed;

thus, the issue presented is a question of law involving the

interpretation of the two relevant statutes, a matter subject

to our independent review. (Engs Motor Truck Co. v. State

Bd. of Equalization (1987) 189 Cal.App.3d 1458.)

DISCUSSION

The Anti-Head Tax Act

We begin our discussion with a brief history of the

AHTA. In Evansville-Vanderburgh Airport Authority Dist.

v. Delta Airlines, Inc., (1972) 405 U.S. 707, the airport had

established a “use and service charge of One Dollar ($1.00)

for each passenger enplaning any commercial aircraft oper-

ating from” the airport. The airline challenged the constitu-

tionality of the charge on the ground that it placed an

unreasonable burden on interstate commerce in violation of

the Commerce Clause, Article I, section 8, of the Federal

Constitution. The court held that the Commerce Clause

does not prohibit States or municipalities from charging

commercial airlines a reasonable “head tax” on passengers

boarding flights at airports within the jurisdiction, to defray

the costs of airport construction and maintenance. The court

noted: “‘No federal statute or specific congressional action or

declaration evidences a congressional purpose to deny or

pre-empt state and local power to levy charges designed to

help defray the costs of airport construction and mainte-

nance.” (Jd. at p. 721.) Concerned that local agencies in

response to the decision in Evansville might enact “new,

inequitable, and potentially chaotic” head taxes or other

charges on persons who use air transportation, thereby

burdening interstate air transportation and inhibiting the

flow of interstate commerce (and, when coupled with fed-

eral levies for airport construction, impose double taxation

on air travelers), Congress enacted the AHTA in 1973.

(S. Rep. No. 93-12, p. 4 (1973); see, generally, Northwest

A-9

Airlines, Inc. v. County of Kent, Michigan (1994) ___ US.

——, 114 S.Ct. 855, and Aloha Airlines, Inc. v. Director of

Taxation of Hawaii (1983) 464 U.S. 7, 9-10.)

Legislative history makes clear that Congress did not

intend to prohibit all state taxes or charges on air carriers:

“The Senate’s first proposal to limit state taxation

would have prohibited any state tax — direct or indi-

rect— on air transportation. S. 3611, 92d Cong.2d

Sess. (1972); see also H.R. 2337, 92nd Cong., Ist Sess.

(1971) (similar prohibition). The States, however,

complained loudly at the hearings that this sweeping

provision would prohibit even unobjectionable taxes

such as landing fees, fuel taxes, and sales taxes on food

provided to airline passengers. E.g., House Hearings, at

91 (statement of John A. Nammack, Executive Vice

President, National Association of State Aviation Offi-

cials).... In reply, Members of Congress assured

these officials that the prohibition was intended to apply

only to ‘head taxes’ and the like, and that some clarifi-

cation of the bill’s intent would be in order. (Citation. )

The final bill enacting § 1513 therefore appears to be a

compromise following careful consideration by Con-

gress as to the permissible scope of state taxation in the

area of air commerce.” Wardair Canada Inc. v. Florida

Department of Revenue (1986) 477 U.S. 11, 15-16

(opinion of Burger, C.J. concurring in part and concur-

ring in the judgment.)

The final bill reflected this compromise. “We find no

paradox between §1513(a) and § 1513(b). Section

1513(a) pre-empts a limited number of state taxes, includ-

ing gross receipts taxes imposed on the sale of air transporta-

tion or the carriage of persons traveling in air commerce.

Section 1513(b) clarifies Congress’s view that the States are

still free to impose on airlines and air carriers ‘taxes other

than those enumerated in subsection (a),’ such as property

A-10

taxes, net income taxes, and franchise taxes.” (Aloha Air-

lines, Inc. v. Director of Taxation, supra, 464 U.S. 7, 12,

fn. 6.)

The Inspection Fee Is Not A Head Tax Preempted By

The AHTA

The trial court concluded that the inspection fee levied

under the Act constitutes a fee or charge on the carriage of

persons traveling in air commerce and an indirect fee or

charge on persons traveling in air commerce. The undis-

puted facts presented to the trial court established that the

fees are based on criteria other than the number of passen-

gers carried; that the fees are also imposed on non-passenger

flights; that the fees do not vary depending on the number of

passengers or passenger receipts; that inspections are also

performed on air cargo and air freight operations; that the

fee is charged even if the airplane is empty; and that the

amount of fee is subject to change or elimination by the

director under an incentive program in which the airlines

may participate, or pursuant to a request for exemption.

These facts establish that the inspection fee is not a direct

head tax. It bears no relation to the number of passengers or

cargo on the aircraft, nor does it bear direct or indirect

relation to persons or the carriage of persons traveling in air

commerce, or the receipts derived therefrom. These facts

also establish that the purpose and effect of the fee is to fund

the inspection of foreign-sourced conveyances for pests, not

to mask a charge otherwise prohibited by section 1513(a).

(Cf. Aloha Airlines, Inc. v. Director of Taxation of Hawaii,

supra, 464 U.S. at pp. 13-14 [“The manner in which the

state legislature has described and categorized [the tax]

cannot mask” a forbidden levy].)

Respondents argue that the fee becomes a part of the cost

of operating the airline, which costs are passed on to

passengers in the form of increased fares. Thus, respondents

arene

A-1]

claim there is an indirect levy on persons traveling in air

commerce or on the carriage of persons traveling in air

commerce. Although the inspection fee may have the effect

of increasing the operational costs of the airline and thereby

increasing the average fare per passenger, this is a cost

which is unrelated to the AHTA prohibitions. For the fee to

be prohibited, it must bear some rational relation to persons

or the carriage of persons traveling in air commerce. A fee

which is based on other criteria is permitted, although

passed on to passengers in the form of increased fares.

(United Air Line Inc. v. County of San Diego (1991) 1

Cal.App.4th 418, 430.) The fee at issue here does not have

the required relation to the carriage of persons. Rather, it is

a fee for the inspection of aircraft for pests, which is

imposed by virtue of the fact that the aircraft arrive from

designated quarantine areas.

In amending the Plant Quarantine Act of 1912 (7 U.S.C.

§ 151), Congress recognized the threat posed to the states

by plant disease and insect infestation from plant and animal

products which enter their borders, and specifically sanc-

tioned state efforts to quarantine, prohibit or restrict the

transportation of such products. (See generally Guam Fresh,

Inc, v. ADA (9th Cir. 1988) 849 F.2d 436.) Furthermore

the United States Supreme Court has specifically upheld

the validity of state inspection laws and the imposition of

reasonable inspection fees. “In the exercise of its police

power a State may enact inspection laws, which are valid if

they tend in a direct and substantial manner to promote the

public safety and welfare or to protect the public from frauds

and imposition when dealing in articles of general use, as to

which Congress has not made any conflicting regulation, and

a fee reasonably sufficient to pay the cost of such inspection |

may constitutionally be charged, even though the property

may be moving in interstate commerce when inspected.”

(Pure Oil Co. v. Siate of Minnesota (1918) 248 U.S. 158,

161-162; cf. Evansville-Vanderburgh Airport Authority Dis-

i it ntti esa asain

A-12

trict v. Delta Airlines, Inc., supra, 405 U.S. 707.) Given this

context of Congressional and judicial approval of inspection

fees such as the one at issue here, we find nothing in the

AHTA or its legislative history which indicates that Con-

gress intended the AHTA to prohibit the inspection fee

imposed pursuant to the Act.

The Inspection Fee Does Not Violate the Act

According to respondents, even if the inspection fee is not

incompatible with the AHTA, it still violates the Act since

the fee is not a fee for the use of airport facilities authorized

by section 1513(b) as required by section 5351(a) of the

Act. While respondents’ position has some superficial ap-

peal, we conclude that it does not survive careful scrutiny.

As noted above, section 1513(b) provides:

“Nothing in this section shall prohibit a State...

from the levy or collection of taxes other than those

enumerated in subsection (a) of this section, including

property taxes, net income taxes, franchise taxes, and

sales or use taxes on the sale of goods or services; and

nothing in this section shall prohibit a State (or politi-

cal subdivision thereof...) owning or operating an

airport from levying or collecting reasonable rental

charges, landing fees, and other service charges from

aircraft operators for the use of airport facilities.”

With respect to user fees referred to in the second clause

of section 1513(b), the Supreme Court has held that:

“Sections 1513(a) and (b) together instruct that airport

user fees are permissible only if, and to the extent that, they

fall within 1513(b)’s savings clause, which removes from

1513(a)’s ban ‘reasonable rental charges, landing fees, and

other service charges from aircraft operators for the use of

airport facilities.’ (Northwest Airlines, Inc. v. County of

Kent, Michigan, supra, 114 S.Ct. 855, 862.) A fee or charge

“for the use of airport facilities” is one the proceeds of

A-13

which are used to help defray the costs of operation, mainte-

nance or development of airport facilities. (City and County

of Denver v. Continental Air Lines (D. Colo. 1989) 712

F.Supp. 834, 840.) As the trial court correctly concluded,

the undisputed facts establish that the proceeds of the

inspection fee in question are not used for such purposes, but

rather, they are used to finance an inspection programmed.

Therefore, as respondents maintain, the service charge is not

authorized by the user fee exception found in section

1513(b).

Respondents contend that since the inspection fee is not

authorized by section 1513(b), it is in violation of the very

terms of the Act. We find this reading of the Act

unpersuasive.

The legislative history of the Act makes clear that the

Legislature intended to subject foreign plant and animal

products to inspection upon entry into the State of Califor-

nia, as it has the right to do, and further intended to finance

that inspection program with fees levied upon the carriers of

the products, so long as that levy would not violate the

mandate of the AHTA. For example, the June 27, 1990 Bill

Analysis stated: “According to the Department, even if the

bill is signed, the legal issue of federal preemption could

postpone implementation of the program if commercial

carriers argue that the State cannot assess fees to fund the

inspection program.” This concern that the fee might be

preempted by the AHTA led the Legislature to characterize

the fee as a user fee for publicly owned facilities (Enrolled

Bill Report, dated September 12, 1990) and to suggest (by

use of the phrase “to the extent authorized by subsec-

tion (b)”) that the fee fell within the Savings clause of

*The trial court found that: “[T]he evidence and reasonable infer-

ences from these provisions [of the Act] reveal that the purpose of the

Fees is to generate revenue to fund inspections to prevent pest infesta-

tion and thereby protect agricultural interests and the general public.”

A-14

section 1513(b). As noted above, the inspection fee is not,

in fact, a user fee. Thus, according to respondents, it is not

authorized by the Act.

However, respondents’ interpretation of the statutory lan-

guage is not persuasive. According to that interpretation, the

Legislature intended to authorize collection of the inspec-

tion fee if it were a valid user fee which fell within the

savings clause of section 1513(b), but not if it were wholly

outside the scope of the AHTA and thus not subject to

challenge based on the preemptory effect of the federal

statute. This reading of the Act leads to a result, which

common rules of statutory construction prohibit. (Shields v.

Singleton (1993) 15 Cal.App.4th 1611, 1620.) Moreover, it

is directly contradicted by the Act’s legislative history,

which makes clear that the AHTA was referenced in antici-

pation of a challenge to the fee based on federal preemption

grounds, and not in order to render the fee uncollectible in

the event it were permissible under federal law because

outside the scope of the AHTA. We conclude that, though

the Legislature chose the words “authorized by sec-

tion 1513(b)” in referring to the fees to be levied under the

Act, it intended simply that the fees be “not prohibited” by

the AHTA. This is a workable and reasonable construction

of the Act. “As the court stated in Harris v. Alcoholic Bev.

etc. Appeals Bd. [1961] 197 Cal.App.2d 759, 763: ‘It is the

duty of the courts within the framework of the statutes

passed by the Legislature, to interpret the statutes so as to

make them workable and reasonable.’ [ Citation. ]” (Regents

of the University of California v. Superior Court (1970) 3

Cal.3d 529, 536-537.)

A-15

CONCLUSION

We conclude that the trial court erred in finding that the

inspection fee violates the Act and further erred in deter-

mining that the fee is a charge on persons traveling in air

commerce or on the carriage of persons traveling in air

commerce within the meaning of section 1513(a).’? We

therefore reverse the judgment and remand the case to the

trial court for further proceedings consistent with this opin-

ion. The writ of supersedeas is discharged. Each party to

bear its own costs on appeal.

CERTIFIED FOR PUBLICATION

ARMSTRONG, J.

We concur:

TURNER, P.J.

GRIGNON, J.

"Due to this disposition, we do not address appellants’ further claims

of error, including the court’s failure to reserve a reasonable opportunity

to complete discovery and allow time to complete preparation of

affirmative defenses, and the court’s error in dismissing the cross-

complaint against Northwest Airlines, Inc.

A-16

APPENDIX B

Second Appellate District,

Division Five,

No. B076888

S045859

IN THE SUPREME COURT OF CALIFORNIA

ALASKA AIRLINES INCORPORATED et al.,

Respondents

VS.

CALIF. DEPARTMENT OF FOOD AND AGRICULTURE

et al.,

Appellants

FILED JUNE 22, 1995

Respondents’ petition for review DENIED.

LUCAS

Chief Justice

See nS Sea een See TSA

A-17

APPENDIX C

FEDERAL ANTI-HEAD TAX ACT (present version), 49

U.S.C. § 40116

§ 40116. State taxation

(a) Definition. —In this section, “State” includes the

District of Columbia, a territory or possession of the United

States, and a political authority of at least 2 States.

(b) Prohibitions. — Except as provided in subsection

political subdivision of a State may not levy or collect a tax,

fee, head charge, or other charge on —

(1) an individual traveling in air commerce;

(2) the transportation of an individual traveling in

air commerce;

(3) the sale of air transportation; or

(4) the gross receipts from that air commerce or

transportation.

political subdivision of a State may levy or collect a tax on or

related to a flight of a commercial aircraft or an activity or

service on the aircraft only if the aircraft takes off or lands in

the State or political subdivision as part of the flight.

(d) Unreasonable burdens and discrimination against

interstate commerce. — (1) In this subsection —

(A) “air carrier transportation property” means

property (as defined by the Secretary of Transporta-

tion) that an air carrier providing air transportation

owns or uses.

(B) “assessment” means valuation for a property tax

levied by a taxing district.

A-18

area in a State used in determining the assessed value

of property for ad valorem taxation.

(D) “commercial and industrial property” means

property (except transportation property and land used

primarily for agriculture or timber growing) devoted to

a commercial or industrial use and subject to a property

tax levy.

(2)(A) A State, political subdivision of a State, or au-

thority acting for a State or political subdivision may not do

any of the following acts because those acts unreasonably

burden and discriminate against interstate commerce:

(i) assess air carrier transportation property at a

value that has a higher ratio to the true market value of

the property than the ratio that the assessed value of

other commercial and industrial property of the same

type in the same assessment jurisdiction has to the true

market value of other commercial and industrial

| property.

(ii) levy or collect a tax on an assessment that may

not be made under clause (i) of this subparagraph.

(iii) levy or collect an ad valorem property tax on air

carrier transportation property at a tax rate greater than

the tax rate applicable to commercial and industrial

property in the same assessment jurisdiction.

(iv) Levy or collect a tax, fee, or charge, first taking

effect after the date of the enactment of this clause,

exclusively upon a business located at a commercial

service airport or operating as a permittee of such an

airport other than a tax, fee, or charge wholly utilized

for airport or aeronautical purposes.

a a

A-19

(B) Subparagraph (A) of this paragraph does not apply

to an in lieu tax completely used for airport and aeronautical

purposes.

(¢) Other allowable taxes and charges. — Except as

provided in subsection (d) of this section, a State or

political subdivision of a State may levy or collect —

(1) taxes (except those taxes enumerated in subsec-

tion (b) of this section), including property taxes, net

income taxes, franchise taxes, and sales or use taxes on

the sale of goods or services; and

(2) reasonable rental charges, landing fees, and

other service charges from aircraft operators for using

airport facilities of an airport owned or operated by that

State or subdivision.

(f) Pay of air carrier employees. —(1) In this

subsection —

(A) “pay” means money received by an employee

for services.

(B) “State” means a State of the United States, the

District of Columbia, and a territory or possession of |

the United States. |

cent of the employee’s pay in a State or political

subdivision of a State in which the scheduled flight

time of the employee in the State or subdivision is more

than 50 percent of the total scheduled flight time of the

employee when employed during the calendar year.

regularly assigned duties on aircraft in least 2 States is

subject to the income tax laws of only the following:

(A) the State or political subdivision of the State

that is the residence of the employee.

(2) The pay of an employee of an air carrier having | |

A-20

(B) the State or political subdivision of the State in

which the employee earns more than 50 percent of the

pay received by the employee from the carrier.

(3) Compensation paid by an air carrier to an em-

ployee described in subsection (a) in connection with

such employee’s authorized leave or other authorized

absence from regular duties on the carrier’s aircraft in

order to perform services on behalf of the employee’s

airline union shall be subject to the income tax laws of

only the following:

(A) The State or political subdivision of the State

that is the residence of the employee.

(B) The State or political subdivision of the State in

which the employee’s scheduled flight time would have

been more than 50 percent of the employee’s total

scheduled flight time for the calendar year had the

employee been engaged full time in the performance of

regularly assigned duties on the carrier’s aircraft.

A-21

APPENDIX D

CALIFORNIA AIRPORT AND MARITIME PLANT

QUARANTINE, INSPECTION AND PLANT

PROTECTION ACT

Senate Bill No. 2772

CHAPTER 1612

An act to add Sections 5350, 5351, 5352, and 5353 to the

Food and Agricultural Code, relating to pest control, making

an appropriation therefor, and declaring the urgency thereof,

to take effect immediately.

[Approved by Governor September 30, 1990. Filed with

Secretary of State September 30, 1990. ]

LEGISLATIVE COUNSEL’S DIGEST

SB 2772, Torres. Pest control: air carriers and foreign air

Carriers: marine carriers.

(1) Under existing law, the Director of Food and Agri-

culture is required to maintain plant quarantine inspection

stations for the purpose of inspecting all conveyances which

might carry plants or other things which are, or are liable to

be, infested or infected with any pest to prevent the intro-

duction into, or the spread within this state, of pests.

This bill would enact the California Airport and Marine

[sic] Plant Quarantine, Inspection, and Plant Protection

Act, which would require the director to establish a program

for the inspection of conveyances entering California

through airport and maritime facilities to prevent the intro-

duction into, or the spread within, this state of pests, and to

maintain plant quarantine inspection stations at points of

entry at airports and marine terminals. The bill would

permit the director to authorize inspection and certification

of conveyances outside of California, as prescribed.

A-22

(2) Existing law does not require air carriers, foreign air

carriers, or commercial marine carriers arriving from other

countries to pay inspection fees to the director for purposes

of funding pest control and eradication programs.

The bill would require air carriers and foreign air carriers

engaged in foreign air commerce, as defined, to pay to the

director a specified service charge for the use of airport

facilities for plant and animal pest inspection upon the initial

landing in this state of each flight of the carrier which

originates outside the United States. The bill would also

require commercial marine carriers to pay a specified fee

upon the initial arrival in this state of the carrier on a voyage

which originated outside the United States. The bill would

require each carrier to maintain records subject to inspec-

tion by the director.

The bill would require the charges and fees to be depos-

ited in the Department of Food and Agriculture Fund, to be

used by the director for the purposes of the bill.

(3) The California Constitution requires the state to

reimburse local agencies and school districts for certain

costs mandated by the state. Statutory provisions establish

procedures for making that reimbursement.

Other provisions of existing law would make a violation of

this bill a misdemeanor.

This bill would provide that no reimbursement is required

by this act for a specified reason.

(4) This bill would declare that it is to take effect

immediately as an urgency statute.

Appropriation: yes.

A-23

The people of the State of California do enact as follows:

SECTION 1. This act shall be known and may be cited

as the California Airport and Maritime Plant Quarantine,

Inspection, and Plant Protection Act.

SEC. 2. The Legislature finds and declares the

following:

(a) The introduction of exotic plant and animal pests

poses a serious threat to the health, safety, and economic

well-being of the people of the state.

(b) Imported products provide a host material for exotic

pests entering the state and the inspection of host material

and the exclusion of exotic plant and animal pests is the

most effective and efficient pest management tool available

to the state.

and marine conveyances is a necessary and reasonable

service provided by the state and its political subdivisions.

SEC. 3. Section 5350 is added to the Food and Agricul-

tural Code, to read:

5350. (a) The director shall establish a program for the

inspection of conveyances entering California through air-

port and maritime facilities to prevent the introduction into,

or the spread within, this state of pests.

(b) The director shall maintain plant quarantine inspec-

tion stations at points of entry at airports and marine

terminals pursuant to Section 5341.

semination of information at airports and marine terminals

in order to provide the users of the facilities information

regarding the pest control and quarantine requirements of

this state.

A-24

(d) The director may authorize the inspection and certi-

fication of conveyances outside the state if the director finds

that the inspection and certification meets the standards

established for in-state inspection and certification programs

and, for that purpose, may enter into any agreements neces-

sary with any other state or the federal government. The

director may provide that conveyances inspected and certi-

fied pursuant to this subdivision are not required to be

inspected at California airports or marine terminals.

(¢) The functions of this section shall be performed by

the Division of Plant Industry, Pest Exclusion Branch, of the

department, and the duties shall be performed by plant

quarantine officers.

SEC. 4. Section 5351 is added to the Food and Agricul-

tural Code, to read:

5351. (a) The director shall levy a service charge, to the

extent authorized by subsection (b) of Section 1513 of

Title 49 of the United States Code, based on the schedule

established pursuant to Section 5353, on each air carrier or

foreign air carrier engaged in foreign air commerce, as those

terms are defined by Section 5353, for the use of airport

facilities for plant and animal pest inspection, quarantine,

and eradication.

(b) For the purposes of this section, “airport facilities”

means those airports owned or operated by any public entity.

SEC. 5. Section 5352 is added to the Food and Agricul-

tural Code, to read:

5352. To the extent permitted by federal law, the direc-

tor shall levy a fee on commercial marine carriers, based on

the schedule established pursuant to Section 5353, for the

use of marine terminal facilities for plant and animal pest

inspection, quarantine, and eradication. The director shall

identify and establish a list of countries which the director

A-25

has reason to believe are potential sources of exotic plant

and animal pests.

SEC. 6. Section 5353 is added to the Food and Agricul-

tural Code, to read:

5353. (a) Each air carrier or foreign air carrier engaged

in foreign air commerce which carries animals or plants or

other materials which are, or are likely to be, infected or

infested with any pest shall pay a charge of eighty-five

dollars ($85) to the director upon the initial landing in this

state of each flight of the carrier which originates outside the

United States.

(b) Each commercial marine carrier engaged in foreign

commerce which carries animals or plants or other materials

which are, or are likely to be, infected or infested with any

pest shall pay a fee of two hundred dollars ($200) to the

director upon the initial arrival in this state of the carrier on

a voyage which originated outside the United States from a

country identified and listed by the director pursuant to

Section 5352, or which made an intermediate stop on that

voyage in a country identified and listed by the director

pursuant to Section 5352.

be subject to inspection by the director, and pay the charges

and fees prescribed by this section in accordance with a

procedure adopted by the director, by regulation.

(d) Each such carrier who fails to pay the charges and

fees required pursuant to this section and the regulations

adopted pursuant to this section is subject to a penalty of

2 percent on the amount of the unpaid charge or fee for each

month, or portion thereof, that the charges or fees are not

paid.

(¢) The charges and fees collected pursuant to this

section shall be deposited in the Department of Food and

A-26

Agriculture Fund and shall be used by the director for the

purposes of this section and Section 5350.

(f) The director may, by regulation, increase or decrease

any of the charges or fees prescribed in subdivision (a) or

(b) upon determining that the revenue received is inade-

quate or in excess of the amount needed to conduct an

effective inspection program. The maximum adjusted

charge or fee shall not exceed three times the amount of the

charge or fee specified in subdivision (a) or (b).

(g) The director may contract with federal and state

agencies and with county agricultural commissioners to

assist the director in carrying out the purposes of this section

and Section 5350.

| | (h) The regulations adopted by the director pursuant to

ai this section shall be deemed to relate to rates for purposes of

| Section 11343 of the Government Code and are not subject

to review, approval, or disapproval by the Office of Adminis-

trative Law pursuant to Article 6 (commencing with Sec-

| tion 11349) of Chapter 3.5 of Part I of Division 3 of Title 2

of the Government Code.

(i) “Air carrier,” “foreign air carrier,” and “foreign air

commerce”, as used in this section, and Section 5351 shall

have the same meaning as specified in subsections (3),

(22), and (23), respectively, of Section 1301 of Title 49 of

the United States Code.

| SEC. 7. No reimbursement is required by this act pur-

suant to Section 6 of Article XIII B of the California

Constitution because the only costs which may be incurred

by a local agency or school district will be incurred because

this act creates a new crime or infraction, changes the

definition of a crime or infraction, changes the penalty for a

crime or infraction, or eliminates a crime or infraction.

Notwithstanding Section 17580 of the Government Code,

unless otherwise specified in this act, the provisions of this

A-27

act shall become operative on the same date that the act

takes effect pursuant to the California Constitution.

SEC. 8. This act is an urgency statute necessary for the

immediate preservation of the public peace, health, or safety

within the meaning of Article IV of the Constitution and

shall go into immediate effect. The facts constituting the

necessity are:

It is necessary to enact programs that are alternatives to

the repeated application of pesticides in order to eradicate

pests, including the Mediterranean fruit fly in Los Angeles

County. This act would enact one such alternative and, in

order to protect the people and the environment from the

repeated application of pesticides and to protect California’s

agriculture from pests as soon as possible, it is necessary that

this act take effect immediately.

A-28

APPENDIX E

CALIFORNIA DEPARTMENT OF FOOD AND

AGRICULTURE REGULATION

In Title 3, Division 4, Chapter 3, Subchapter 4,

adopt Article 6, Section 3560

Article 6. Airport and Marine Terminal Inspection

Section 3560. Facility Service Charges and User Fees.

(a) Pursuant to sections 5351 and 5353(a), each air

carrier or foreign air carrier shall pay a service charge of

eighty-five dollars ($85) to the Director upon the initial

landing in California of each flight of the carrier which

originated outside the United States from a country to

which a current United States Department of Agriculture

quarantine or California Department of Food and Agricul-

ture quarantine is applicable, or which made an intermedi-

ate stop on that flight in such a country. Any carrier may

apply for an exemption from Department inspection and

payment of the fee as to particular flights on the basis that

the aircraft’s operations and other inspections and certifica-

tions provide adequate compliance with the objectives of the

Act.

(b) Pursuant to sections 5352 and 5353(b), each marine

carrier engaged in foreign commerce shall pay a user fee of

two hundred dollars ($200) to the Director upon the initial

arrival in California of a carrier’s vessel on a voyage which

originated outside the United States from a country to

which a current United States Department of Agriculture

quarantine or California Department of Food and Agricul-

ture quarantine is applicable, or which made an intermedi-

ate stop on that voyage in such a country. Any carrier may

apply for an exemption from Department inspection and

payment of the fee as to particular voyages on the basis that

the carrier’s operations and other inspections and certifica-

A-29

tions provide adequate compliance with the objectives of the

Act.

charges or fees shall file a return quarterly in the form

prescribed by the Director, verified by the company officer

primarily responsible for supervising the preparation of the

return and assuring its accuracy. The return, accompanied

by full payment, shall be timely filed so as to be received by

the Cashier of the California Department of Food and

Agriculture within thirty (30) days following the quarters

ending on March 31, June 30, September 30 and Decem-

ber 31. Returns not received by such dates, or received

without required information and verification, shall be sub-

ject to the penalty prescribed by section 5353,

subsection (d).

NOTE: Authority: Sections 407 and 5351 through 5353,

Food and Agricultural Code.

Reference: Sections 5350 through 5353, Food and

Agricultural Code.

A-30

APPENDIX F

FIRST AMENDED COMPLAINT FOR DECLARA-

TORY RELIEF, INJUNCTIVE RELIEF, AND

RESTITUTION

CASE NO. BC047104

SUPERIOR COURT OF THE STATE OF

CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

ALASKA AIRLINES, INC., a corporation; AMERICAN AIR-

LINES, INC., a corporation; DELTA AIR LINES, INC., a

corporation; NORTHWEST AIRLINES, INC., a corporation;

and UNITED AIR LINES, INC., a corporation,

Plaintiffs,

vs.

CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE;

HENRY J. Voss, as Director of the California Department

of Food and Agriculture; STATE OF CALIFORNIA; and

Does | through 20, inclusive,

Defendants.

ORIGINAL FILED

JUN 17 1992

COUNTY CLERK

Plaintiffs Alaska Airlines, Inc. (“Alaska”), American

Airlines, Inc, (“American”), Delta Air Lines, Inc.

(“Delta”), Northwest Airlines, Inc. (“Northwest”), and

United Air Lines, Inc. (“United”) (collectively “plain-

tiffs”), allege causes of action against defendants California

Department of Food and Agriculture (“Department”),

Henry J. Voss, as Director of the Department (“Director”),

and the State of California (“State”) (collectively “defend-

ants”), as follows:

A-31

1. Plaintiff Alaska is an Alaska corporation authorized to

do and doing business in the State of California. Alaska is an

“air carrier” within the meaning of 49 U.S.C.

Section 1301 (3).

2. Plaintiff American is a Delaware corporation autho-

rized to do and doing business in the State of California.

American is an “air carrier” within the meaning of 49

U.S.C. Section 1301 (3).

3. Plaintiff Delta is a Delaware corporation authorized to

do and doing business in the State of California. Delta is an

“air carrier” within the meaning of 49 U.S.C.

Section 1301 (3).

4. Plaintiff Northwest is a Minnesota corporation autho-

rized to do and doing business in the state of California.

Northwest is an “air carrier” within the meaning of 49

U.S.C. Section 1301 (3).

5. Plaintiff United is a Delaware corporation authorized

to do and doing business in the State of California. United is

an “air carrier” within the meaning of 49 U.S.C.

Section 1301 (3).

6. Defendant Department is a department of the govern-

ment of the State of California.

7. Defendant Director is, and at all times mentioned in

this complaint, was the director of the Department.

8. The true names and capacities, whether individual,

corporate associate, or otherwise, of defendants Does |

through 20, inclusive, are presently unknown to plaintiffs,

who therefore sue these defendants by such fictitious names.

Plaintiffs are informed and believe and thereon allege that

each of the Doe defendants was and is cither intentionally,

negligently, or in some other manner, the cause or contribut-

ing cause of or otherwise responsible for, the damage suf-

fered by plaintiffs or the administration of the statutes and

A-32

regulations that are the subject of this complaint. Plaintiffs

will amend this complaint to allege the true names and

capacities of each Doe defendant, together with such allega-

tions as may be appropriate, when their names have been

ascertained.

9. On or about September 30, 1990, the State Legisla-

ture enacted, and the Governor approved, Senate Bill

No. 2772, the California Airport and Maritime Plant Quar-

antine, Inspection, and Plant Protection Act (“the Act”).

By this legislation, Sections 5350 through 5353 were added

to the California Food and Agricultural Code.

10. Section 4 of the Act added Section 5351 to the

California Food and Agricultural Code. That section reads,

in pertinent part, as follows:

“(a). The director shall levy a service charge, to the

extent authorized by subsection (b) of Section 1513 of

Title 49 of the United States Code, based on the

schedule established pursuant to Section 5353, on each

air carrier or foreign air carrier engaged in foreign air

commerce, as those terms are defined by Section 5353,

for the use of airport facilities for plant and animal pest

inspection, quarantine and eradication.”

11. Effective April 1, 1991, the Director caused the

Department to promulgate regulations purportedly intended

to implement the provisions of Section 5351(a) of the

California Food and Agricultural Code, which regulations

required air carriers, including plaintiffs, to pay an $85

inspection fee for each flight landing in California from

foreign countries (the “Inspection Fee”). Those regulations,

which are set forth in Title 3, Section 3560 of the California

Code of Regulations (the “Regulations”), state in pertinent

part:

“(a) Pursuant to Sections 5351 and 5353(a) [of the

Food and Agricultural Code], each air carrier or for-

A-33

eign air carrier shall pay a service charge of eighty-five

dollars ($85) to the Director upon the initial landing in

California of each flight of the carrier which originated

outside the United States from a country to which a

current United States Department of Agriculture quar-

antine or California Department of Food and Agricul-

ture quarantine is applicable, or which made an

intermediate stop on that flight in such a country.”

12. The Regulations are invalid and unenforceable for at

least the following reasons:

(a) Food and Agricultural Code Section 5351(a) per-

mits the imposition of a service charge only to the extent

such a service charge is authorized by 49 U.S.C. Sec-

tion 1513(b). The Inspection Fee required by the Regula-

tions is not authorized by 49 U.S.C. Section 1513(b);

(b) The Inspection Fee and the Regulations conflict

with, and are impermissible under, the provisions of 49

U.S.C. Section 1513(a).

13. The Act is invalid and unenforceable because the

State is preempted from enacting any legislation with re-

spect to the inspection for pests accompanying aircraft,

passengers, baggage and cargo arriving from foreign coun-

tries at international airport facilities in California in that

(a) Congress has manifested its intent to occupy the field by

virtue of its comprehensive regulation of that subject matter,

or (b) implementation of the Act would impede the pur-

poses and objectives of Congress.

14. Plaintiffs are informed and believe and thereon allege

that defendants have not implemented the Act in accor-

dance with its terms or in a manner permitted under

California or federal law, in that, among other things,

(a) the Director has not established a program for the

inspection of conveyances entering California through air-

port facilities to prevent the introduction into, or the spread ~

A-34

within, the State of pests, (b) the Director has not main-

tained plant quarantine inspection stations at points of entry

at airports, (c) the duties to be performed pursuant to the

Act have not been performed by plant quarantine officers of

the Division of Plant Industry, pest Exclusion Branch, of the

Department, and (d) the United States Department of

Agriculture is not permitted to receive from the defendants

funds in excess of its Congressional appropriation for agri-

cultural pest inspection.

15. Commencing on or about August 12, 1991, and

continuing thereafter United demanded that defendants

rescind the Regulations and refund the Inspection Fees that

United had paid under protest. Defendants have failed and

refused to comply with this demand.

FIRST CAUSE OF ACTION

(For Declaratory Relief by All Plaintiffs

Against All Defendants)

16. Plaintiffs reallege and incorporate by reference

paragraphs | through 12 and 15, set forth above.

17. An actual controversy now exists between plaintiffs

and defendants. Plaintiffs contend that the Regulations are

invalid and unenforceable because the Inspection Fee and

the Regulations are not authorized by Food and Agricultural

Code Section 5351(a) and 49 U.S.C. Section 1513(b),

while defendants contend otherwise.

18. Plaintiffs desire a judicial determination of their

respective rights and duties with respect to the Regulations.

In particular, plaintiffs desire a declaration that the Inspec-

tion Fee and the Regulations are not authorized by Food

and Agricultural Code Section 5351(a) and 49 US.C.

Section 1513(b).

19. The requested declaratory relief is necessary and

appropriate at this time to enable piaintiffs and defendants

i i

A-35

to ascertain whether the Regulations are valid and enforce-

able and whether plaintiffs will be required to continue to

pay the Inspection Fees levied upon them by defendants

pursuant to the Regulations.

SECOND CAUSE OF ACTION

(For Declaratory Relief By All Plaintiffs

Against All Defendants)

20. Plaintiffs reallege and incorporate by reference

paragraphs | through 12 and 15, set forth above.

21. An actual controversy now exists between plaintiffs

and defendants. Plaintiffs contend that the Regulations are

invalid and unenforceable because the Inspection Fee and

the Regulations violate an‘ conflict with 49 U.S.C. Sec-

tion 1513(a), while defendants contend otherwise.

22. Plaintiffs desire a judicial determination of their

respective rights and duties with respect to the Regulations.

In particular, plaintiffs desire a declaration that the Inspec-

tion Fee and the Regulations violate and conflict with

49 U.S.C. Section 1513(a).

23. The requested declaratory relief is necessary and

appropriate at this time to enable plaintiffs and defendants

to ascertain whether the Regulations are valid and enforce-

ble and whether plaintiffs will be required to continue to pay

the Inspection Fees levied upon them by defendants pursu-

ant to the Regulations.

THIRD CAUSE OF ACTION

(For Declaratory Relief By All Plaintiffs

Against All Defendants)

24. Plaintiffs reallege and incorporate by reference

paragraphs | through 11, 13 and 15, set forth above.

ee Se EP gh WEES

aeons a a ER

A-36

25. An actual controversy now exists between plaintiffs

and defendants. Plaintiffs contend that the Act, and the

Regulations promulgated thereunder, are invalid and unen-

forceable because the State is preempted from enacting any

legislation with respect to the inspection for pests accom-

panying aircraft, passengers, baggage and cargo arriving

from foreign countries at international airport facilities,

while defendants contend otherwise.

26. Plaintiffs desire a judicial determination of their

respective rights and duties with respect to the Act and the

Regulations promulgated thereunder. In particular, plaintiffs

desire a declaration that the Act, and the Regulations

promulgated thereunder, are invalid and unenforceable be-

cause the State is preempted from enacting any legislation

with respect to the inspection for pests accompanying air-

craft passengers baggage and cargo arriving from foreign

countries at international airport facilities.

27. The requested declaratory relief is necessary and

appropriate at this time to enable plaintiffs and defendants

to ascertain whether the Act, and the Regulations promul-

gated thereunder, are valid and enforceable and whether

plaintiffs will be required to continue to pay the Inspection

Fees levied upon them by defendants pursuant to the Act

and the Regulations.

FOURTH CAUSE OF ACTION

(For Declaratory Relief By All Plaintiffs

Against All Defendants)

28. Plaintiffs reallege and incorporate by reference

paragraphs | through 11, 14 and 15, set forth above.

29. An actual controversy now exists between plaintiffs

and defendants. Plaintiffs contend that the Inspection Fees

levied upon them by defendants purportedly pursuant to the

Regulations and the Act are improper and unenforceable

a -

A-37

because defendants have not implemented the Act in accor-

dance with its terms or in a manner permitted under

California or federal law, while defendants contend

t | otherwise.

| 30. Plaintiffs desire a judicial determination of their

respective rights and duties with respect to their obligation

1 | to pay the Inspection Fees levied upon them by defendants

H | purportedly pursuant to the Act and the Regulations. In

1 particular, plaintiffs desire a declaration that the Inspection

H | Fees levied upon them purportedly pursuant to the Act and

q the Regulations are improper and unenforceable because

| defendants have not implemented the Act in accordance

| with its terms or in a manner permitted under California or

federal law.

31. The requested declaratory relief is necessary and

appropriate at this time to enable plaintiffs and defendants

to ascertain whether the Inspection Fees levied upon plain-

tiffs by defendants purportedly pursuant to the Regulations

and the Act are valid and enforceable and whether plaintiffs

will be required to pay the Inspection Fees levied upon them

by defendants.

FIFTH CAUSE OF ACTION

(For Injunctive Relief By All Plaintiffs

Against All Defendants)

32. Plaintiffs reallege and incorporate by reference

paragraphs | through 15, set forth above.

33. Unless restrained by this Court, defendants will con-

tinue to enforce the Act and the Regulations against plain-

tiffs. Plaintiffs have no adequate remedy at law in that unless

i injunctive relief is granted, they will be required to file a

multiplicity of actions each time they are compelled to

i render a quarterly accounting for the Inspection Fees pursu-

i ant to the provisions of the Act and the Regulations.

}

A-38

Therefore, plaintiffs are entitled to an injunction prohibiting

the enforcement of the Act and the Regulations and the

levying of any Inspection Fees upon them by defendants

purportedly pursuant to the Act and the Regulations.

SIXTH CAUSE OF ACTION

(For Restitution By Plaintiffs Against All Defendants)

34. Plaintiffs reallege and incorporate by reference

paragraphs | through 15, set forth above.

35. Pursuant to the Regulations, Alaska has paid Inspec-

tion Fees to defendants in the aggregate amount of $279,650

through March 31, 1992. These payments were made pursu-

ant to the provisions of the invalid and unenforceable Act

and Regulations and were made by Alaska expressly under

protest.

36. On or about December 19, 1991, Alaska submitted a

claim to the State to recover the Inspection Fees it paid

pursuant to the invalid and unenforceable Act and Regula-

tions. Defendants have either rejected that claim or failed to

respond to it.

37. Pursuant to the Regulations, American has paid

Inspection Fees to defendants in the aggregate amount of

$145,845 through March 31, 1992. These payments were

made pursuant to the provisions of the invalid and unen-

forceable Act and Regulations and were made by American

expressly under protest.

38. On or about December 20, 1991, American submit-

ted a claim to the State to recover the Inspection Fees it

paid pursuant to the invalid and unenforceable Act and

Regulations. Defendants have either rejected that claim or

failed to respond to it.

39. Pursuant to the Regulations, Delta has paid Inspec-

tion Fees to defendants in the aggregate amount of $290,105

Re SE

A-39

through March 31, 1992. These payments were made pursu-

ant to the provisions of the invalid and unenforceable Act

and Regulations and were made by Delta expressly under

protest.

40. On or about March 19, 1991, Delta submitted a

claim to the State to recover the Inspection Fees it paid

pursuant to the invalid and unenforceable Act and Regula-

tions. Defendants have either rejected that claim or failed to

respond to it.

41. Pursuant to the Regulations, Northwest has paid

Inspection Fees to defendants in the aggregate amount of

$134,980 through March 31, 1992. These payments were

made pursuant to the provisions of the invalid and unen-

forceable Act and Regulations and were made by Northwest

expressly under protest.

42. On or about January 7, 1992, Northwest submitted a

claim to the State to recover the Inspection Fees it paid

pursuant to the invalid and unenforceable Act and Regula-

tions. Defendants have either rejected that claim or failed to

respond to it.

43. Pursuant to the Regulations, United has paid Inspec-

tion Fees to defendants in the aggregate amount of $365,840

through March 31, 1992. These payments were made pursu-

ant to the provisions of the invalid and unenforceable Act

and Regulations and were made by United expressly under

_ protest.

44. On or about October 10, 1991, United submitted a

claim to the State to recover the Inspection Fees it paid

pursuant to the invalid and unenforceable Act and Regula-

tions. Defendants have either rejected that claim or failed to

respond to it.

45. Defendants had no right or authority to collect any

Inspection Fees from plaintiffs pursuant to the invalid and

unenforceable Act and Regulations.

A-40

46. Plaintiffs are each entitled to a refund or reimburse-

ment of all Inspection Fees paid or to be paid by each of

them pursuant to the invalid and unenforceable Act and

Regulations, plus interest thereon.

WHEREFORE, plaintiffs each pray for judgment against

defendants as follows:

1. On the First Cause of Action, for a declaration by this

Court that the Inspection Fee and the Regulations are not

authorized by Food and Agricultural Code Section 5351 (a)

and 49 U.S.C. Section 1513(b);

2. On the Second Cause of Action, for a declaration by

this Court that the Inspection Fee and the Regulations

violate and conflict with 49 U.S.C. Section 1513(a);

3. On the Third Cause of Action, for a declaration by

this Court that the Act, and the Regulations promulgated

thereunder, are invalid and unenforceable because the State

is preempted from enacting any legislation with respect to

the inspection for pests accompanying aircraft, passengers,

baggage and cargo arriving from foreign countries at inter-

national airport facilities;

4. On the Fourth Cause of Action, for a declaration by

this Court that the Inspection Fees levied upon plaintiffs by

defendants purportedly pursuant to the Act and the Regula-

tions are improper and unenforceable because defendants

have not implemented the Act in accordance with its terms

or in a manner permitted under California or federal law;

5. On the Fifth Cause of Action, for an injunction, both

preliminarily during the pendency of these proceedings, and

permanently thereafter, enjoining defendants, and each of

them, from levying upon plaintiffs or collecting any Inspec-

tion Fees pursuant to the Act or Regulations or in any other

manner enforcing the Act or the Regulations;

NG FER ES ST STR Sr ee ee ease Bea oe ee —_ oe

A-41

6. On the Sixth Cause of Action, for restitution or

reimbursement of all Inspection Fees paid or to be paid by

each of the plaintiffs pursuant to the Regulations, plus

interest thereon;

7. On all causes of action, for costs of suit, and attorneys

fees where permitted by law, and for general relief.

ALSCHULER, GROSSMAN & PINES

BuRT PINES

JOHN A. SCHWIMMER

By:

John A. Schwimmer

Attorneys for Plaintiffs

A-42

APPENDIX G

ORDER GRANTING MOTION FOR SUMMARY

ADJUDICATION OF ISSUES AND FOR

SUMMARY JUDGMENT

ORIGINAL FILED JULY 9, 1993

CASE NO. BC047104

SUPERIOR COURT OF THE STATE OF

CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

ALASKA AIRLINES, INC., a corporation; AMERICAN

AIRLINES, INC., a corporation; DELTA AIR LINES, INC., a

corporation; NORTHWEST AIRLINES, INC., a corporation;

and UNITED AIR LINES, INC., a corporation,

Plaintiffs,

vs.

CALIFORNIA DEPARTMENT OF Foop AND

AGRICULTURE; HENRY J. Voss, as Director of

the California Department of Food and Agriculture;

STATE OF

CALIFORNIA; and Does | through 20, inclusive,

Defendants.

The motions of plaintiffs Alaska Airlines, Inc.,

(“Alaska”), American Airlines, Inc. (“American”), Delta

Air Lines, Inc. (“Delta”), Northwest Airlines, Inc.

(“Northwest”), and United Air Lines, Inc. (“United”) for

summary adjudication of issues and for summary judgment

came on regularly for hearing before this Court on March 8,

1993 at 8:30 a.m. in Department 82, the Honorable Freder-

ick J. Lower, Jr., Judge Presiding. Burt Pines and John

Schwimmer of Alschuler, Grossman & Pines appeared as

attorneys for plaintiffs, and Deputy Attorney General

Charles W. Getz, IV, appeared as attorney for defendants.

ee ene mene cm reg agre

A-43

The motions were fully briefed and argued by the parties.

The Court thereafter took the matter under submission. The

Court has given full consideration to all papers submitted by

the parties in support of and in opposition to the motions,

counsel’s oral argument, and all admissible, relevant, and

competent evidence. Being fully advised, the Court grants

plaintiffs’ motions for summary adjudication and finds, de-

clares and orders as follows:

Issue No. 1: There is no defense to plaintiffs’ first cause of

action against defendants. As shown by plaintiffs in their

moving and reply papers, there are no triable issues of

material fact relating to the first cause of action. The

Director of the California Department of Food and Agricul-

ture (“Director”) was granted the power to collect the fee at

issue (“Fee” or “Fees” herein) under California Food and

Agricultural Code, Section 5351(a), but only to the extent

authorized by 49 U.S.C. Section 1513(b). There are no

triable issues of material fact regarding the following: the

Fee collected by defendants is not a tax described in

Section 1513(b); neither the State of California nor any of

the other defendants owns or operates any of the airports at

which the Fee is charged to plaintiffs; the Fee is not imposed

for the use of airport facilities or for the present operation

and maintenance of existing airport facilities. Consequently,

plaintiffs are entitled to a declaration that the Fee is not

authorized by 49 U.S.C. Section 1513(b).

A. The following evidence supports this determination:

California Airport and Maritime Plant Quarantine, Inspec-

tion, and Plant Protection Act (“Act”) (plaintiffs’ Exh. 1);

California Food and Agricultural Code Sections 5350(a),

535i(a), 5352, and 5353(b); Certificates issued by the

California Department of Transportation (plaintiffs’

Exh. 5); Federal Permits (plaintiffs’ Exh. 6); Cooperation

Agreement (plaintiffs’ Exh. 3); March 18, 1991 letter from

Martina Heleamau to Rod D. Margo (plaintiffs’ Exh. 9);

A-44

Regulations of the Department of Food and Agriculture,

Title 3, Section 3560 of the California Code of Regulations

(plaintiffs’ Exh. 2) (“Regulations”); defendants’ Supple-

mental Interrogatory Responses No. 1, (plaintiffs’ Exh. 4,

p. 3).

B. For the reasons stated in plaintiffs’ moving and reply

papers, the evidence proffered by defendants does not create

a triable issue of material fact. Among other things:

1. Defendants agree that the Director is permitted to

levy Fees upon air carriers under California Food and

Agricultural Code Section 5351(a) only to the extent such

Fees are authorized by 49 U.S.C. Section 1513. (Defend-

ants’ Separate Statement, 1.)

2. Defendants concede that they do not own or operate

the airports at which the Fees are charged. (Defendants’

Separate Statement, {2.). The facts stated in plaintiffs’

Exhibits 5 and 6 are uncontroverted.

3. Defendants have failed to submit any evidence to

create a disputed issue of fact as to whether the Fees are for

the use of airport facilities. In their Separate Statement

(No. 3), defendants refer to the recitals of legislative pur-

pose contained in Section 2 of the Act and Sec-

tions 5350(a), 5351 (a), 5352, and 5353(b) of the California

Food and Agricultural Code. None of these provisions

constitutes evidence or creates a reasonable inference that

the Fees are for the use of airport facilities. On the contrary,

the evidence and reasonable inferences from these provi-

sions reveal that the purpose of the Fees is to generate

revenue to fund inspections to prevent pest infestation and

thereby protect agricultural interests and the general public.

Defendants also cite Paragraph 7 of the Declaration of

Valerie Brown and Paragraph 8 of the Declaration of James

Reynolds. Neither paragraph contains any admissible evi-

dence on point or provides any reasonable inference that the

A-45

Fees are collected “for the use of airport facilities” within

the meaning of Section 1513(b). The fact that the inspec-

tions occur on airport premises does not make the Fee a fee

or charge for the use of airport facilities.

4. Defendants have offered no evidence that the subject

Fee is a “tax” rather than a “fee.” To the contrary, the

sections of the Food and Agricultural Code and Regulations

referred to in defendants’ Separate Statement (No. 4)

describe the Fee as a “service charge,” not a “tax.” In

defendants’ supplemental responses to plaintiffs’ interroga-

tories, defendant Department of Food and Agriculture “as-

serts that the inspection Fee is a service charge ....”

(Plaintiffs’ Exh. 4, page 3.)

Issue No. 2: There is no defense to plaintiffs’ second

cause of action against defendants. For the reasons stated in

plaintiffs moving and reply papers, there are no triable issues

of material fact relating to the second cause of action.

Among other things, the Fees charged are passed on to air

passengers by the plaintiffs. The Fee constitutes a fee or

charge on the carriage of persons travelling in air commerce

and an indirect fee or charge on persons travelling in air

commerce. Therefore, plaintiffs are entitled to a declaration

that the Fees are impermissible under 49 U.S.C.

Section 1513(a).

A. The following evidence supports this determination:

The Act (plaintiffs’ Exh. 1); Regulations (plaintiffs’

Exh. 2); Vingo Decl., 94; Short Decl., 94; Gersmehl

Decl., 94; Haan Decl., 94; Lilly Decl., 94; Enrolled Bill

Report, dated December 12, 1990 (plaintiffs’ Exh. 10).

B. For the reasons stated in plaintiffs’ moving and reply

papers, the evidence proffered by defendants does not create

any triable issue of material fact. Among other things:

1. Defendants have not produced any evidence contra-

dicting plaintiffs’ evidence that the Fees are passed on to

A-46

plaintiffs passengers. According to the Enrolled Bill Report

(plaintiffs’ Exh. 10), defendants expected that the Fees

would be passed on to airline passengers.

2. Defendants have proffere’ ‘ertain evidence contained

in the declarations of Valerie Brown and James Reynolds

(defendants’ Separate Statement Nos. 7-11). None of this

evidence creates a triable issue of material fact as to whether

49 U.S.C. Section 1513(a) has been violated. A key test for

determining whether a fee or charge is impermissible under

Section 1513(a) is whether the Fee is ultimately passed on

to air passengers. The only evidence in the record reflects

that the plaintiffs have passed the Fees on to their passen-

gers. It is immaterial that the Fees are imposed on airlines

based on criteria other than the number of passengers; that

the Fees are also imposed on non-passenger flights; that the

Fees do not vary depending upon the number of passengers

or passenger receipts; that inspections are also performed on

air cargo and air freight operations; and that the amount of

the Fee is subject to change or elimination by the Director

under an incentive program in which the airlines may

participate or pursuant to a request for exemption. See City

& County of Denver v. Continental Airlines, Inc., 712 F.

Supp. 834 (D. Col. 1989), and Rocky Mountain Airways,

Inc. v. Pitkin County, 684 F. Supp. 312 (D. Col. 1987).

Issue No. 3: There is no defense to plaintiffs’ sixth cause

of action against defendants. As shown by plaintiffs in their

moving and reply papers, there are no triable issues of

material fact relating to the sixth cause of action. For the

reasons stated above, the Fees are not authorized by 49

U.S.C. Section 1513(b) and they are impermissible under

49 U.S.C. Section 1513(a). Through September 30, 1992,

plaintiffs have paid total inspection Fees to the defendants

Department of Food and Agriculture (“Department”) and

State of California in the following amounts: Alaska -

$449,650; American - $229,998; Delta - $443,190; North-

A-47

west - $205,020; and United - $671,755. All of these pay-

ments were made pursuant to the Regulations and were

made expressly under protest. Plaintiffs paid these Fees with

respect to international flights of plaintiffs landing at airports

in Los Angeles, San Francisco, San Diego, and/or San Jose.

Plaintiffs have filed timely claims with the California

State Board of Control (“Board”). On or about Decem-

ber 19, 1991, Alaska filed with the Board a claim demanding

refund of $115,600 plus all future payments made by Alaska

pursuant to the Regulations, plus interest on all such pay-

ments. On or about December 20, 1991, American filed with

the Board a claim demanding refund of $64,755 plus all

future payments made by American pursuant to the Regula-

tions, plus interest on all such payments. On or about

March 19, 1992, Delta filed with the Board a claim demand-

ing refund of $217,515 plus all future payments made by

Delta pursuant to the Regulations, plus interest on all such

payments. On or about January 7, 1992, Northwest filed

with the Board a claim demanding refund of $64,005 plus all

future payments made by Northwest pursuant to the Regu-

lations, plus interest on all such payments. On or about

October 10, 1991, United filed with the Board a claim

demanding refund of $80,920 plus all future payments made

by United pursuant to the Regulations, plus interest on all

such payments. As additional payments were thereafter

made by each of the plaintiffs, the aforesaid claims were

supplemented by letters to the Board from plaintiffs. The

Board has not accepted the claims. Plaintiffs are each

entitled to reimbursement of all Fees paid by them and

hereafter paid by them pursuant to the Regulations, plus

interest thereon.

A. The following evidence supports this determination:

Vingo Decl., 9] 2, 3; Short Decl., 9] 2, 3; Donohue Decl.,

q 3; Gersmehl Decl., 99 2, 3; Haan Decl., 9 2, 3; Lilly

Decl., 9 2, 3.

A-48

B. For the reasons stated in plaintiffs’ moving and reply

papers, the evidence proffered by defendants does not create

a triable issue of material fact. Among other things:

1. Defendants have not submitted any evidence to create

any triable issue of material fact with respect to the amount

of Fees which plaintiffs paid through September 30, 1992.

Plaintiffs’ evidence on this subject is uncontradicted. Al-

though the declaration of Valerie Brown ({[ 14) raised an

inference that there might be an approximate $6,000 dis-

crepancy with respect to the Fees which American claimed

to have paid through June 30, 1992, defendants produced no

evidence that American’s numbers as of September 30,

1992 were erroneous.

2. Defendants have not submitted any competent or

admissible evidence to create any triable issue of material

fact with respect to plaintiffs’ compliance with the Tort

Claims Act (assuming such compliance is necessary). The

only admissible and competent evidence before the Court

reflects unequivocally that each plaintiff filed a claim within

one year after its first payment of the Fees. The copy of the

claim on behalf of American which is attached to the

Valerie Brown declaration reflects that the claim was filed

on December 27, 1991, a date consistent with plaintiffs’

evidence and within the allowable statutory period. No

triable issue of material fact is raised by reason of the

Board’s June 18, 1992 letter, a copy of which is attached to

the Valerie Brown declaration. That letter refers to Ameri-

can’s supplemental claim, not American’s original claim.

The letter also incorrectly states that the claim period is six -

months instead of one year. Plaintiffs are not required to file

separate claims for each quarterly payment of Fees and are

entitled to supplement their original claim for each payment

of Fees.

Issue Nos. 4 and 5: There is no merit to defendants’ first

affirmative defense based on the statute of limitations and

A-49

laches as to any cause of action. As shown by plaintiffs in

their moving and reply papers, there are no triable issues of

material fact relating to this affirmative defense. The Act

was signed into law by the Governor on September 30, 1990.

The Regulations were promulgated by the Director, effec-

tive April 1, 1991. Under the Regulations, plaintiffs were

required to make the first quarterly payment of Fees on or

before July 30, 1991. On August 12, 1991, one of the

plaintiffs, United, wrote the Director and, in an effort to

avoid litigation, outlined its position as to why the Fees were

invalid. After an extended dialogue, the defendants deter-

mined that they would not rescind the Regulations or the

Fees. Plaintiffs then filed this lawsuit on January 24, 1992.

The lawsuit was timely filed. Defendants have not met their

burden of producing evidence under Code of Civil Proce-

dure Section 437c(n). Defendants have not identified any

conduct that purportedly constitutes laches and have not

identified any possible prejudice that would give rise to an

affirmative defense of laches.

A. The following evidence supports this determination:

The Act (plaintiffs’ Exh. 1); the Regulations (plaintiffs’

Exh. 2); the August 12, 1991 letter from counsel for United

to the Director (plaintiffs’ Exh. 11); Schwimmer Decl. { 13.

B. The only evidence proffered by defendants in support

of their first affirmative defense is Exhibit A to the Declara-

tion of Valerie Brown. This evidence is apparently proffered

in support of defendants assertion that “at least one, and

possibly other claims under the Tort Claims Act were not

filed in a timely fashion and was [sic] rejected by the Board

of Control of the State of California on that basis.” (De-

fendants’ Separate Statement No. 28.) As stated above,

with respect to Issue No. 3, plaintiffs’ claims were timely

filed under the Tort Claims Act. No triable issue of material

fact is raised by reason of Exhibit A to the Valerie Brown

Declaration.

A-50

Issue No. 6: There is no merit to defendants’ second

affirmative defense of unclean hands as to any cause of

action. As shown by plaintiffs in their moving and reply

papers, there are no triable issues of material fact relating to

this affirmative defense. Defendants have not met their

burden of producing evidence under Code of Civil Proce-

dure 437c(n) and have not produced any evidence showing

that plaintiffs have “unclean hands.” On the contrary, the

court finds that plaintiffs have acted wholly in good faith.

They have communicated their position to defendants, at-

tempted to achieve a non-judicial resolution of the issues

between the parties, paid the Fees under protest notwith-

standing their belief that the Fees are invalid and unenforce-

able, and asserted these claims in the appropriate judicial

forum.

A. The following evidence supports this determination:

August 12, 1991 letter from counsel for United to the

Director (plaintiffs’ Exh. 11); Vingo Decl., ] 2; Short decl.,

{1 2; Donohue Decl., § 2; Gersmehl Decl., § 2; Haan Decl.,

{ 2; Lilly Decl., ¥ 2.

B. The only evidence proffered by the defendants is the

Declaration of Valerie Brown, paragraphs 7 and 14. No

triable issue of fact is created. Among other things, the

statements in paragraph 7 do not reveal any unclean hands

or improper conduct on the part of the plaintiffs with respect

to the first, second, fifth or sixth causes of action. Similarly,

paragraph 14 does not contain evidence of unclean hands on

the part of the plaintiffs.

Issue No. 7: There is no merit to defendants’ third

affirmative defense of “good faith” as to any cause of action.

For the reasons stated by plaintiffs in their moving and reply

papers, there are no triable issues of material fact relating to

this affirmative defense. The defendants’ good faith is not an

issue in the lawsuit and the affirmative defenses are defec-

tive and inapplicable as a matter of law.

A-51

Issue No. 8: Defendants have withdrawn their fourth

affirmative defense concerning “political issues.”

Issue No. 9: There is no merit to defendants’ fifth affirm-

ative defense that the issues raised by this action are being

addressed by the Legislature as to any cause of action. As

shown by plaintiffs in their moving and reply papers, there

are no triable issues of material fact relating to this affirma-

tive defense. The defense is defective and inapplicable as a

matter of law. According to defendants’ Separate Statement

(No. 36), this affirmative defense has also been withdrawn.

Issue No. 10: There is no merit to defendants’ sixth

affirmative defense of failure to exhaust administrative rem-

edies as to any cause of action. As shown by plaintiffs in

their moving and reply papers, there are no triable issues of

material fact relating to the sixth affirmative defense. There

is no specific administrative remedy available to plaintiffs to

challenge the Act or the Regulations. Even if the plaintiffs

were obligated to pursue any administrative remedies, the

August 12, 1991 letter to the Director from counsel for

United fulfills any such requirement.

A. The following evidence supports this determination:

The Act (plaintiffs’ Exh. 1); the Regulations (plaintiffs’

Exh. 2); August 12, 1991 letter from counsel to United

Airlines (plaintiffs’ Exh. 11).

B. Defendants admit that there is no administrative

mechanism available to challenge the imposition of the

inspection Fees (defendants’ Separate Statement No. 37).

The only evidence proffered by defendants on this issue is

Exhibit A to the declaration of Valerie Brown relating to

compliance with the Tort Claims Act. As stated above, with

respect to Issue Nos. 3, 4 and 5, plaintiffs’ claims were

timely filed under the Tort Claims Act. No triable issue of

material fact is raised by reason of Exh. A to the Valerie

teh etonry IE Nas PRES II GN IR OE OES

A-52

Brown declaration. Defendants have not met their burden of

proof with respect to this affirmative defense.

Issue No. 11: There is no merit to defendants’ seventh

affirmative defense of misjoinder or nonjoinder of parties as

to any cause of action. As shown by plaintiffs in their

moving and reply papers, there are no triable issues of

material fact relating to the seventh affirmative defense.

This purported affirmative defense is defective and inappli-

cable as a matter of law. In their Separate Statement

(No. 40), defendants have suggested, without evidentiary

support, that the United States Department of Agriculture

(“USDA”) should be a party. The USDA is not a necessary

party because this court can afford complete relief to plain-

tiffs with respect to the Act, Regulations and Fees without

rendering any judgment with respect to the USDA. Further-

more, the defendants’ claim of misjoinder or nonjoinder

would apply, if at all, only to the plaintiffs’ fourth cause of

action. That cause of action is not an issue in the instant

motion. Defendants have not met their burden of proof with

respect to this affirmative defense.

Issue No. 12: Alaska is entitled to reimbursement from

defendants in the amount of $449,650, as alleged in the sixth

cause of action. For the reasons stated in this order and in

plaintiffs’ moving and reply papers, there are no triable

_ issues of material fact relating to this issue. Defendants’

objection (defendants’ Separate Statement No. 41) with

respect to compliance with the Tort Claims Act is addressed

above.

Issue No. 13: American is entitled to reimbursement

from defendants in the amount of $229,998, as alleged in the

sixth cause of action. For the reasons stated in this order and

plaintiffs’ moving and reply papers, there are no triable

issues of material fact relating to this issue. Defendants’

objection (defendants’ Separate Statement No. 42) with

A-53

respect to the $6,000 discrepancy as of June 30, 1992 is

addressed above.

Issue No. 14: Delta is entitled to reimbursement from

defendants in the amount of $443,190, as alleged in the sixth

cause of action. For the reasons stated in this order and in

plaintiffs’ moving and reply papers, there are no triable

issues of material fact relating to this issue. Defendants’

objection (defendants’ Separate Statement No. 43) with

respect to compliance with the Tort Claims Act is addressed

above.

Issue No. 15: Northwest is entitled to reimbursement

from defendants in the amount of $205,020, as alleged in the

sixth cause of action. For the reasons stated in this order and

in plaintiffs moving and reply papers, there are no triable

issues of material fact relating to this issue. Defendants’

objection (defendants’ Separate Statement No. 44) with

respect to compliance with the Tort Claims Act is addressed

above.

Issue No. 16: United is entitled to reimbursement from

defendants in the amount of $671,755, as alleged in the sixth

cause of action. For the reasons stated in this order and in

plaintiffs’ moving and reply papers, there are no triable

issues of material fact relating to this issue. Defendants,

objection (defendants’ Separate Statement No. 45) with

respect to compliance with the Tort Claims Act is addressed

above.

IT IS FURTHER ORDERED that, summary adjudica-

tion having been granted as to issues 1 and 2, and 4 through

16, plaintiffs’ request to dismiss without prejudice their third

and fourth causes of action is granted.

IT IS FURTHER ORDERED that, summary adjudica-

tion having been granted as to issues | through 16, the

defendants’ cross-complaint against Northwest is dismissed

with prejudice.

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IT IS FURTHER ORDERED that, summary adjudica-

tion having been granted as to issues 1 through 16, the

plaintiffs’ motion for summary judgment is granted.

IT IS FURTHER ORDERED that defendants are per-

manently enjoined from collecting any fees or charges from

plaintiffs under California Food and Agricultural Code Sec-

tions 5350-5353 or under the Regulations.

IT IS FURTHER ORDERED that plaintiffs are entitled

to reimbursement from defendant State of California of all

fees and charges paid by them through September 30, 1993,

as set forth above, plus all additional fees and charges paid

by them to the date of judgment in this matter. If the parties

are unable to arrive at this amount by stipulation, plaintiff

shall be entitled to produce evidence of such payments by

motion prior to entry of judgment.

IT IS FURTHER ORDERED that plaintiffs are entitled

to pre- and post-judgment interest at the legal rate.

IT IS FURTHER ORDERED that plaintiffs are entitled

to their costs of suit.

IT IS FURTHER ORDERED THAT judgment shall be

entered in favor of plaintiffs and against defendants in

accordance with the terms of this Order.

DATED: JULY 09, 1993

/S/

Frederick J. Lower, Jr.

Superior Court Judge

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APPENDIX H

JUDGMENT BY COURT UNDER C.C.P. § 437(c)

Department 82

CASE NO. BC047104

SUPERIOR COURT OF THE

STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

ALASKA AIRLINES, INC., a corporation;

AMERICAN AIRLINES, INC., a corporation;

DELTA AIR LINES, INC., a corporation;

NORTHWEST AIRLINES, INC., a corporation;

and UNITED AIR LINES, INC., a corporation,

Plaintiffs,

vs.

CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE;

HENRY J. Voss, as Director of the California Department

of Food and Agriculture; STATE OF CALIFORNIA; and

Does | through 20, inclusive,

Defendants.

ORIGINAL FILED JULY 9, 1993

The Court, having on June 1, 1993 granted plaintiffs’

motions for summary adjudication of issues and for

summary judgment and having ordered entry of judgment as

requested in said motions, and the parties having stipulated

to the additional fees and charges paid by plaintiffs to the

date of this judgment and the accrued prejudgment interest,

IT IS ORDERED, ADJUDGED AND DECREED

that:

1. Defendants California Department of Food and Agri-

culture, Henry J. Voss, and State of California, and each of

them, are hereby permanently enjoined from collecting from

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plaintiffs any fees or charges under Food and Agricultural

Code Sections 5350-5353 or pursuant to the regulations of

defendant Department of Food and Agriculture contained in

Title 3, Section 3560 of the California Code of Regulations.

2. Plaintiff Alaska Airlines, Inc. shall recover from

defendant State of California all fees and charges paid under

California Food and Agricultural Code Sections 5350-5353

in the amount of $588,625, plus prejudgment interest

thereon in the amount of $43,060.64 for a total judgment of

$631,685.64.

3. Plaintiff American Airlines, Inc. shall recover from

defendant State of California all fees and charges paid under

California Food and Agricultural Code Sections 5350-5353

in the amount of $296,395, plus prejudgment interest

thereon in the amount of $21,460.40 for a total judgment of

$317,855.40.

4. Plaintiff Delta Air Lines, Inc. shall recover from

defendant State of California all fees and charges paid under

California Food and Agricultural Code Sections 5350-5353

in the amount of $601,035, plus prejudgment interest

thereon in the amount of $43,204 for a total judgment of

$644,239.00. -

5. Plaintiff Northwest Airlines, Inc. shall recover from

defendant State of California all fees and charges paid under

California Food and Agricultural Code Sections 5350-5353

in the amount of $259,250, plus prejudgment interest

thereon in the amount of $18,723.04 for a total judgment of

$277,973.04.

6. Plaintiff United Air Lines, Inc. shall recover from

defendant State of California all fees and charges paid under

California Food and Agricultural Code Sections 5350-5353

in the amount of $1,015,155, plus prejudgment interest

thereon in the amount of $63,666.52 for a total judgment of

$1,078,821.52.

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7. Plaintiffs shall recover from defendant State of Cali-

fornia its costs of suit in the amount of $520.00.

8. This Court shall have continuing jurisdiction to enter

appropriate orders for such other and further post-judgment

relief as may be necessary or appropriate.

9. The provisions of this judgment shall be stayed until

July 30, 1993.

DATED: July 9, 1993

/s/

Fredrick J. Lower, Jr.

Judge of the Superior Court

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.