# Opposition Brief — Area Interstate Trucking, Inc. v. Indiana Department of Revenue

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1993
- **Citation:** 510 U.S. 864

## Text

| Ea

No. 93-106

In The

Supreme Court of the United States

October Term, 1993
+

AREA INTERSTATE TRUCKING, INC., INDIANA
MATERIAL TRANSFER, INC., ADVANCE
TRANSPORTATION COMPANY, BRYAN TRUCK LINE,
INC., CHURCHILL TRUCK LINES, INC., FRANKS &
SON, INC., GREAT AMERICAN LINES, INC., KAT, INC.,
and MOGLE ENTERPRISES, INC. on behalf of
themselves and all others similarly situated,

Petitioners,
V.

INDIANA DEPARTMENT OF REVENUE and
KENNETH L. MILLER, as Acting Commissioner
of the Indiana Department of Revenue,

Respondents.

- a
On Petition For Writ Of Certiorari

To The Supreme Court Of Indiana
¢

RESPONDENTS’ BRIEF IN OPPO‘SITION
*

RicHARD A. Huser

Counsel of Record foi Respondents
Locke REYNOLDs Bowp & WEISELL
1000 Capital Center South

201 North Illinois Street
Indianapolis, Indiama 46204
(317) 237-3800

Juuia M. BLacKWELL
Rosert W. WRIGHT
Co-Counsel for Respondents

= BEST AVAILABLE COPY

QUESTIONS PRESENTED

Respondents, Indiana Department of Revenue and
Kenneth L. Miller, Acting Commissioner of the Indiana
Department of Revenue, restate the questions presented
in the Petition for Writ of Certiorari as follows:

A. Whether the United States Supreme Court is
bound by the Indiana Tax Court’s construction of the
Motor Carrier Fuel Tax.

B. Whether the Indiana Tax Court’s construction of
the Motor Carrier Fuel Tax violates Petitioners’ rights to
equal protection and due process of law under the United
States Constitution.

C. Whether the United States Supreme Court
should adopt a new, “sliding-scale” approach to its
rational-basis scrutiny of state tax statutes.

ii

LIST OF PARTIES

Respondents adopt Petitioners’ list of parties with
regard to petitioners, with the exception that no class has
been certified as of this date. (Supplemental Appendix at
14). Respondents are not corporations.

iii

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED ......................... i
ee IA ys bees cs ocd cc bliviecce. ii
TABLE OF AUTHORITIES......................... iv
Bo 8 | a 1
og ag ee 2
CONSTITUTIONAL PROVISIONS AND STATUTES
SE a Does ara gs ah cd ov 046 Said ans ne 3
STATEMENT OF THE CASE....................... 3

REASONS WHY THE PETITION SHOULD BE
oe 6 Van nk avd cc. bi boos ciaenccs,,, 5

1. The Indiana Tax Court’s construction of the
Indiana Motor Carrier Fuel Tax is binding upon
the United States Supreme Court............. 6

2. The Indiana Tax Court’s construction of the
Indiana Motor Carrier Fuel Tax does not violate
Petitioners’ rights to equal protection and due
process of law under the United States Consti-
EE ne ee 8

3. The alleged complexity of the Indiana Motor
Carrier Fuel Tax does not warrant modification
of the firmly established rational-basis stan-
dard for review of equal protection challenges
oe a 14

a 15

iv

TABLE OF AUTHORITIES

Page
CAsEs
Area Interstate Trucking, Inc. v. Indiana Dep't of
Revenue, 605 N.E.2d 272 (Ind. Tax Ct. 1992),
PIE N00 0 C0s40 cute vias dicawees navensen passim
Area Interstate Trucking, Inc. v. Indiana State Dep’t of
Revenue, 574 N.E.2d 311 (Ind. App. 1991), trans-
pO RE See re ee eT Oe eT TTT TT COT TET Ee 4,6
Carmichael v. Southern Coal & Coke Co., 301 U.S. 495
So. Se ee errr rr Sree re 6, 9, 10
F.C.C. v. Beach Communications, Inc., 113 S.Ct. 2096
fo Seer errr ere ry err ory rrr rrr. 12, 13
Georgia Ry. & Electric Co. v. City of Decatur, 295
La WT MN A 0d. RG bea eke eGhNkaeak baat eta eK ss 11
Hicks ex rel. Feiock v. Feiock, 485 U.S. 624 (1988)...... 8
Leathers v. Medlock, 111 S.Ct. 1438 (1991) ............ 15
Madden v. Kentucky, 309 U.S. 83 (1940).............. 15
Minotti v. Lensink, 798 F.2d 607 (2nd Cir. 1986),
A 8 eee 7
Nordlinger v. Hahn, 112 S.Ct. 2326 (1992) ..... 13, 14, 15

Road Improvement Dist. No. 1 v. Missouri Pac. R.
ig me Ae OE MOUEE DS Sone ddansaeeeabaccuntnacues 11

Safeway Trails, Inc. v. Furman, 41 N.J. 467, 197 A.2d
366 (1964), appeal dismissed, cert. denied, 379 U.S.

err ee ete ee er eee 12
United States v. Thirty-Seven (37) Photographs, 402
a MO NED as 66566 0505 Kho ee 5 Sa bRAER ed Ke aK kes 9,0 7

Wisconsin v. Mitchell, 113 S.Ct. 2194 (1993) ........... 7

Vv

TABLE OF AUTHORITIES - Continued

Page
STATUTES AND RULES
me Wm & Se COM oso oc fos cx kv cleveeesc nw 2
Ind. Code § 6-6-4.1-1 (1992).............cccccccceceee 4
Ind. Code § 6-6-4.1-1(f) (1992) ....................... 4
Ind. Code § 6-6-4.1-4(a) (1992) ..................... 3, 6
Ind. Code § 6-6-4.1-4.5(a) (1992)..........0...00.... 3, 6
Ind. Code § 6-6-4.1-6 (1988).................0.0...05. 3
Ind. Code § 33-3-5-15 (1988) ...............0..00000-. 6
Indiana Trial Rule 56(C)........................... 2, 4
CONSTITUTIONAL PROVISIONS
U.S. Const. amend. XIV, § 1..................00-24.. 3

OTHER AUTHORITIES

J. Hartman, Federal Limitations on State and Local
Taxation, § 12:3 at 670 (1981).........2............ 10

No. 93-106
¢

In The

: Supreme Court of the United States

October Term, 1993
*

AREA INTERSTATE TRUCKING, INC., INDIANA
MATERIAL TRANSFER, INC., ADVANCE
TRANSPORTATION COMPANY, BRYAN TRUCK LINE,
INC., CHURCHILL TRUCK LINES, INC., FRANKS &
SON, INC., GREAT AMERICAN LINES, INC., KAT, INC.,
and MOGLE ENTERPRISES, INC. on behalf of
themselves and all others similarly situated,

Petitioners,
V.

INDIANA DEPARTMENT OF REVENUE and
KENNETH L. MILLER, as Acting Commissioner
of the Indiana Department of Revenue,

Respondents.

.

On Petition For Writ Of Certiorari
To The Supreme Court Of Indiana
+

RESPONDENTS’ BRIEF IN OPPOSITION
¢

OPINIONS BELOW

Petitioners improperly seek a writ of certiorari with
respect to an unpublished final order of the Supreme
Court of Indiana issued on April 14, 1993 (A. la). The
Writ of Certiorari, if issued, should in fact be directed to
the Indiana Tax Court with respect to the decision of the
Indiana Tax Court reported at 605 N.E.2d 272 (1992)

1

(A. 2a), which decision was rendered a final judgment by
the Indiana Tax Court pursuant to Indiana Trial Rule
56(C) on January 26, 1993. (Supplemental Appendix at 1).

¢

JURISDICTION

Petitioners seek to invoke this Court’s jurisdiction
pursuant to 28 USC § 1257(a) (1992). Petitioners essen-
tially dispute the Indiana Tax Court’s construction of the
Indiana Motor Carrier Fuel Tax and the wisdom of the
application of that tax to motor carriers traveling on the
Indiana Toll Road. The United States Supreme Court
lacks jurisdiction to address either of these issues.

Petitioners have improperly requested that the Writ
of Certiorari be directed to the Surpeme Court of Indiana
rather than to the Indiana Tax Court. The Writ of Cer-
tiorari, if issued, should be directed to the Indiana Tax
Court, the highest court of the state that actually ruled on
the merits. Additionally, Petitioners failed to include a
copy of the final judgment sought to be reviewed in the
Appendix of their Petition, and Petitioner’s jurisdictional
statement does not reference the date of entry of the
judgment sought to be reviewed. Respondents have
included a copy of that judgment in the Supplemental
Appendix at 1.

Petitioners contend that the Petition draws into ques-
tion the validity of a state statute on the ground that it is
repugnant to the United States Constitution. Although
this Court would have jurisdiction to address that ques-
tion, the state statute in question is not repugnant to the
United States Constitution.

—E— eee aaa

3

CONSTITUTIONAL PROVISIONS AND
STATUTES INVOLVED

The primary relevant statutory provisions are Ind.
Code §§ 6-6-4.1-4(a) and 6-6-4.1-4.5(a) (1992).

Respondents acknowledge that the Petition for Writ
of Certiorari argues that the state statute in question is
violative of Section 1 of the Fourteenth Amendment to
the United States Constitution. While Respondents deny
that the state statute in question is in any way repugnant
to the United States Constitution, Respondents agree that
the subject matter of the Writ involves Section 1 of the
Fourteenth Amendment to the United States Constitu-
tion.

In addition to the remaining statutory provisions and
regulations set forth in Petitioners’ Appendix, Ind. Code
§ 6-6-4.1-6 (1988) is also a relevant statutory provision.
(Supplemental Appendix at 3).

4

STATEMENT OF THE CASE

Petitioners filed a two count Amended Verified Peti-
tion to Enjoin Collection of Tax and Original Tax Appeal
(“Amended Verified Petition”) with the Indiana Tax
Court on July 22, 1991. Count I requested declaratory and
injunctive relief, and Count II requested a refund of taxes
already paid.

Petitioners filed a Motion for Summary Judgment on
Count I of the Amended Verified Petition, raising the
following issues:

I. Whether the Indiana toll road is a “high-
way” as defined under I.C. 6-6-4.1-1(f) for
purposes of the Motor Carrier Fuel Tax?

II. Whether imposition of the Motor Carrier
Fuel Tax upon fuel consumed in operating
on the Indiana toll road is constitutional?

(A. 4a)

Respondents filed a Cross-Motion for Summary
Judgment on these same issues. Following full briefing
and oral argument, the Tax Court denied Petitioners’
Motion and granted Respondents’ Cross-Motion for Sum-
mary Judgment on both issues by its published opinion
dated December 29, 1992. This Partial Summary Judg-
ment Order was rendered final pursuant to Indiana Trial
Rule 56(C) on January 26, 1993.

The Indiana Tax Court was not the first Indiana court
of appellate jurisdiction to consider the issues raised by
Petitioners’ Amended Verified Petition. One of the Peti-
tioners, Area Interstate Trucking, Inc., had previously
filed a Motion to Intervene in a class action lawsuit in the
Johnson County, Indiana Circuit Court. The Motion to
Intervene raised these same issues, albeit in a different
procedural context. The Trial Court denied Area’s Motion
to Intervene. The Indiana Court of Appeals affirmed the
Trial Court’s decision in Area Interstate Trucking, Inc. v.
Indiana State Dep't of Revenue, 574 N.E.2d 311 (Ind. App.
1991), transfer denied, and the Indiana Supreme Court
denied transfer on October 8, 1991.

Petitioners operate “commercial motor vehicles” sub-
ject to the Motor Carrier Fuel Tax, Ind. Code § 6-6-4.1-1
(1992). Petitioners are subject to this tax because they
operate vehicles upon Indiana highways. Petitioners are

required to calculate the amount of taxable fuel based on
the mileage their vehicles operate on Indiana highways,
including the Indiana toll road. Petitioners are required to
include toll road mileage in their calculation because the
Indiana Toll Road is a highway, as defined by the Motor
Carrier Fuel Tax statute. Both the Indiana Court of
Appeals and the Indiana Tax Court have now so held.

The Motor Carrier Fuel Tax is not imposed upon fuel
consumed in operations exclusively upon private prop-
erty or upon the portion of fuel used to operate auxiliary
equipment mounted on motor vehicles Subject to the tax,
because such fuel consumption is not for purposes of
operating or propelling commercial motor vehicles on
highways in Indiana.

*

REASONS WHY THE PETITION SHOULD BE DENIED

Petitioners have failed to identify a valid basis for grant-
ing the Writ. Their Petition invites this Court to interpret
state legislation contrary to a state appellate court’s inter-
pretation, to apply general rules of law to inapplicable fac-
tual situations, and to alter the firmly established standard
for review of equal protection challenges to state tax statutes.
None of these requests provide a valid basis for review by
this Court. The Indiana Tax Court's well-reasoned and well-
articulated decision does not necessitate this Court's reitera-
tion of firmly established precedent of this Court.

‘

1. The Indiana Tax Court’s construction of the Indiana
Motor Carrier Fuel Tax is binding upon the United
States Supreme Court.

The Petition for Writ of Certiorari presented in this
case does not involve a conflict between a state appellate
court decision (i.e. the decision of the Indiana Tax Court)!
and the United States Supreme Court decision of Car-
michael v. Southern Coal & Coke Co., 301 U.S. 495 (1937) as
alleged by Petitioners. Rather, the Petition involves dis-
gruntled taxpayers who insist that the Indiana Motor
Carrier Fuel Tax should be given an interpretation which
is more favorable to them. Because it is not the function
of this Court to construe that state statute, the Petition for
Writ of Certiorari should be denied.

The Indiana Motor Carrier Fuel Tax is imposed “on
the consumption of motor fuel by a carrier in its opera-
tions on highways in Indiana.” Ind. Code § 6-6-4.1-4(a)
(1992); Ind. Code § 6-6-4.1-4.5(a) (1992). As previously
determined by both the Indiana Court of Appeals and the
Indiana Tax Court, the plain and ordinary meaning of
highway includes a toll road. Area Interstate Trucking, Inc.
v. Indiana State Dep’t of Revenue, 574 N.E.2d 311 (Ind. App.
1991), transfer denied; Area Interstate Trucking, Inc. v. Indi-
ana Dep't of Revenue, 605 N.E.2d 272, 277 (Ind. Tax Ct.
1992), review denied. Petitioners agree that they are subject
to this tax as motor carriers providing for-hire transporta-
tion services through the operation of their trucks and

1 The Indiana Tax Court is considered a court of appellate
jurisdiction. Decisions of the Indiana Tax Court may be
appealed to the Indiana Supreme Court. Ind. Code § 33-3-5-15
(1988).

tractor-trailer vehicles on Indiana highways. Petitioners,
however, argue that the “plain” and “clear” objective of
this legislation is to assess a tax in direct proportion to
the “consumption” of roads in Indiana, and that the
purpose of the tax is to collect from taxpayers their
proportionate share of the cost of maintaining the roads
upon which they travel.

Petitioners’ view of the legislative intent behind the
Indiana Motor Carrier Fuel Tax deserves no consideration
by this Court because it is directly contradicted by the
Indiana Tax Court’s decision. The Indiana Tax Court spec-
ifically held that “the motor carrier fuel tax is appor-
tioned on the basis of the benefit of the use of Indiana’s
public roads, regardless of whether the roads are sup-
ported by the tax.” Area Interstate Trucking, Inc. v. Indiana
Dep't of Revenue, 605 N.E.2d at 277. The purpose of this
tax, as determined by the Indiana Tax Court, is simply to
charge motor carriers for the use of the public roads in
Indiana. Id. This Court must accept the Indiana Tax
Court’s interpretation of this Indiana legislation.

There is no doubt that the United States Supreme
Court is bound by a state court’s construction of a state
Statute. Wisconsin v. Mitchell, 113 S.Ct. 2194, 2198 (1993).
The United States Supreme Court lacks “jurisdiction
authoritatively to construe state legislation.” United States
v. Thirty-Seven (37) Photographs, 402 U.S. 363, 369 (1971).
Likewise, “legislative intent is a matter of state law, on
which the highest court of a state speaks with finality.”
Minotti v. Lensink, 798 F.2d 607, 610 (2nd Cir. 1986), cert.
denied, 482 U.S. 906 (1987) (citation omitted). This Court is
not at liberty to depart from a state appellate court's

resolution of issues of state law. Hicks ex rel. Feiock v.
Feiock, 485 U.S. 624, 629 (1988).

This rule applies with equal force to the decision of
the Indiana Tax Court, an intermediate appellate state
court.

Where an intermediate appellate state court
rests its considered judgment upon the rule of
law which it announces, that is a datum for
ascertaining state law which is not to be disre-
garded by a federal court unless it is convinced
by other persuasive data that the highest court
of the state would decide otherwise . . . . This is
the more so where, as in this case, the highest
court has refused to review the lower court’s
decision rendered in one phase of the very liti-
gation which is now prosecuted by the same
parties before the federal court.

Feiock, 485 U.S. at 630 n.3 (citations omitted). The Indiana
Tax Court’s interpretation of the Motor Carrier Fuel Tax,
which the Indiana Supreme Court refused to review, is
binding upon this Court.

2. The Indiana Tax Court’s construction of the Indiana
Motor Carrier Fuel Tax does not violate Petitioners’
rights to equal protection and due process of law
under the United States Constitution.

This Court’s required adherence to the Indiana Tax
Court’s determination of the legislative intent behind the
Motor Carrier Fuel Tax essentially disposes of this Peti-
tion for Writ of Certiorari. As Petitioners concede, the
State of Indiana was not compelled by any constitutional
requirement to tax fuel consumption in direct relation to

9

the benefits taxpayers enjoy. (Petitioners’ Brief, pp. 9-10).
As finally determined by the Indiana Tax Court, the State
of Indiana chose to tax the use of all highways in Indiana,
regardless of whether the highway was directly sup-
ported by the tax. Area Interstate Trucking, Inc. v. Indiana
Dep't of Revenue, 605 N.E.2d at 277. Thus, no equal protec-
tion violation is presented to this Court, and there is no
conflict with Carmichael.

Carmichael plainly sets forth, as the Indiana Tax Court
recognized, the general rule that a taxpayer cannot resist
the payment of a tax merely because it is not expended
for purposes which are peculiarly beneficial to it. As this
Court explained:

A tax is not an assessment of benefits. It is,
as we have said, a means of distributing the
burden of the cost of government. The only
benefit to which the taxpayer is constitutionally
entitled is that derived from his enjoyment of
the privileges of living in an organized society,
established and safeguarded by the devotion of
taxes to public purposes. . . . Any other view
would preclude the levying of taxes except as
they are used to compensate for the burden on
those who pay them, and would involve the
abandonment of the most fundamental principle
of government - that it exists primarily to pro-
vide for the common good. A corporation can-
not object to the use of the taxes which it pays
for the maintenance of schools because it has no
children.

Carmichael, 301 U.S. at 522-23 (citation omitted). This
firmly established rule has led the Court to reject argu-
ments such as the one advanced by Petitioners.

10

This Court has repudiated the suggestion,
whenever made, that the Constitution requires
the benefits derived from the expenditure of
public moneys to be apportioned to the burdens
of the taxpayer, or that he can resist the pay-
ment of the tax because it is not expended for
purposes which are peculiarly beneficial to him.

Id. at 523.

The principles set forth in Carmichael similarly
require repudiation of Petitioners’ suggestion that the
Indiana Motor Carrier Fuel Tax is unconstitutional as
applied to them because the State does not use revenues
generated by that tax for the benefit of the Indiana Toll
Road and its patrons. The tax charges motor carriers for
the use of the public roads in Indiana. Area Interstate
Trucking, 605 N.E.2d at 277. “[C]ommon carriers for hire,
which make the highways their place of business, may
properly be charged extra compensation for such use.” Id.
at 278 (quoting J. Hartman, Federal Limitations on State and
Local Taxation § 12:3 at 670. (1981) (footnotes omitted)).
Petitioners make the Indiana highways, including the
Indiana Toll Road, their place of business and may prop-
erly be charged extra compensation for such use. The
Indiana Tax Court’s decision is consistent with the hold-
ing of Carmichael.

Petitioners assert that this case falls within an excep-
tion to the general rule, citing a footnote in Carmichael.
The footnote cited, however, addresses a factual situation
which is not present here. This case does not involve a tax
assessed upon real property owners in a local govern-
mental district based on the value of benefits accruing to

11

those property owners from a specific improvement pro-
ject.2 The benefits derived from the tax need not be, and
in this instance are not, apportioned to the burdens of the
taxpayer. “[T]he state is not required to use the revenues
generated by the motor carrier fuel tax from operations
on the Indiana toll road for the benefit of the Indiana toll
road and its patrons.” Area Interstate Trucking, 605 N.E.2d
at 277.

The State of Indiana’s decision to tax toll road usage
does not violate Petitioners’ equal protection or due pro-
cess rights. As Petitioners concede, they are subject to the
Indiana Motor Carrier Fuel Tax because they are motor
carriers providing for-hire transportation services and
their vehicles consume fuel in operations upon Indiana
highways, which include the Indiana Toll Road. (Peti-
tioners’ Brief, p. 4). “In light of the legislative purpose to
ensure that motor carriers pay for their use of the state’s
roads, the distinctions between Indiana toll road users”
and the exempt users “are plain enough.” Area Interstate
Trucking, 605 N.E.2d at 277. Consumers of fuel used for
vehicles operated exclusively on private property, for

? Petitioners fail to discuss, or even to cite, the cases in that
footnote addressing this different question. Neither Georgia Ry.
& Electric Co. v. City of Decatur, 295 US. 165 (1935) nor Road
Improvement Dist. No. 1 v. Missouri Pac. R. Co., 274 U.S. 188 (1927)
involve a factual situation which is even remotely similar tu the
one presented in this case. In each of those cases, the statute or
ordinance which directed an assessment for the cost of improve-
ments required that the assessment be measured by the benefit
each local taxpayer received from the improvement project. In
each case, the assessment levied was ruled improper either
because there was no benefit to the taxpayer, or the assessment
was not properly made in proportion to the benefit received.

12

vehicles operated out-of-state, and for auxiliary equip-
ment, unlike toll road users, are not providing for-hire
transportation services in operations upon Indiana public
roads.

Petitioners present a similarly meritless assertion that
their equal protection rights are violated based upon
what they consider to be the “real impact” of the tax.
Petitioners claim that they are the only taxpayers
required to pay tax for vehicular use of public roads not
supported by the tax collected. They claim, but fail to
establish, that there is no conceivable basis to support the
tax of toll road usage. See F.C.C. v. Beach Communications,
Inc., 113 S.Ct. 2096, 2102 (1993). One conceivable basis for
taxing toll road usage is to compensate Indiana for the
indirect burdens imposed by the toll road. As noted by
the Supreme Court of New Jersey:

[T]he State incurs many expenses in connec-
tion with the use of the Turnpike and Parkway.
Subsidiary roads are high-cost roads to the State
because of the traffic congestion thereon result-
ing from Turnpike and Parkway traffic. And the
State incurs other expenses in the administra-
tion of its road laws in connection with toll road
use.

Safeway Trails, Inc. v. Furman, 41 N.J. 467, 197 A.2d 366,
376 (1964), appeal dismissed, cert. desied, 379 U.S. 14 (1964).
The indirect benefits afforded to the toll road users are
more than sufficient to meet the minimal requirements of
the rational-basis test.

Further, Petitioners’ assertion that they are the only
taxpayers required to pay tax for vehicular use of public

13

roads not supported by the tax collected is a misstate-
ment of fact. Even if every other road in Indiana were
eligible to receive funds from the Motor Carrier Fuel Tax,
Petitioners have not established that every alley, street
and county road in Indiana does in fact receive such
funds. The Legislature’s determination that the Toll Road
does not need funds from the Motor Carrier Fuel Tax is
no different than a local official determining that an alley
does not need funds in any particular year. The real
impact of the tax is the same: funds are used by the State
of Indiana where they are needed most. This discretion is
precisely the reason for the deferential standard for
review afforded to equal protection challenges to tax
Statutes.

Petitioners’ real complaint with the Motor Carrier
Fuel Tax deals with their perception of the wisdom and
equity of that tax. See Area Interstate Trucking, Inc. v.
Indiana Dep't of Revenue, 605 N.E.2d at 278.

Time and again, however, this Court has
made clear in the rational-basis context that the
“Constitution presumes that, absent some rea-
son to infer antipathy, even improvident deci-
sions will eventually be rectified by the
democratic process and that judicial interven-
tion is generally unwarranted no matter how
unwisely we may think a political branch has
acted.”

Nordlinger v. Hahn, 112 S.Ct. 2326, 2335-36 (1992) (citation
omitted). This Court need not grant a Writ of Certiorari in
this case simply to remind Petitioners that it is not the
function of this Court to comment on the wisdom of
legislative decisions. See Beach Communications, 113 S.Ct.
at 2101.

14

3. The alleged complexity of the Indiana Motor Carrier
Fuel Tax does not warrant modification of the firmly
established rational-basis standard for review of
equal protection challenges to state tax statutes.

Petitioners implicitly concede that no writ is war-
ranted in this case by asserting that this Court should
heighten the standard of review for equal protection chal-
lenges to state tax statutes. Petitioners suggest that this
Court adopt a “sliding-scale”> approach to reviewing
such challenges. This approach conflicts with the well-
established approach followed by this Court.

[T]his Court’s cases are clear that, unless a
classification warrants some form of heightened
review because it jeopardizes exercise of a fun-
damental right or categorizes on the basis of an
inherently suspect characteristic, the Equal Pro-
tection Clause requires only that the classifica-
tion rationally further a legitimate state interest.

Nordlinger, 112 S.Ct. at 2331. The Motor Carrier Fuel Tax
does not jeopardize any fundamental right, such as free-
dom of speech, nor does it categorize on the basis of an
inherently suspect characteristic, such as race or nation-
ality. Petitioners have failed to establish any basis for a
heightened standard of review in this case.

Petitioners suggest that the rational-basis standard
for review should evolve with regard to modern-day tax

3 This approach is totally unworkable, because it leaves no
definite standard to be applied and would require this Court to
review virtually every equal protection challenge to new tax
laws.

PIE i a

15

cases. More than 50 years ago, this Court commented on
the wisdom of the rational-basis standard:

The broad discretion as to classification pos-
sessed by a legislature in the field of taxation
has long been recognized. . . . [T]he passage of
time has only served to underscore the wisdom
of that recognition of the large area of discretion
which is needed by a legislature in formulating
sound tax policies.

Madden v. Kentucky, 309 U.S. 83, 87-88 (1940). Fifty years
later, this Court still adheres to that philosophy. Leathers
v. Medlock, 111 S.Ct. 1438, 1446 (1991), (quoting Madden,
309 U.S. at 87-88). The “standard is especially deferential
in the context of classifications made by complex tax
laws.” Nordlinger, 112 S.Ct. at 2332. Because Petitioners’
arguments regarding the standard for review of equal
protection challenges have been soundly rejected by this
Court, the Court should deny the Petition for Writ of
Certiorari in this case.

¢

CONCLUSION

The Motor Carrier Fuel Tax is imposed on the con-
sumption of motor fuel by a carrier in its operations on
highways in Indiana. Both the Indiana Court of Appeals
and the Indiana Tax Court have held that the Indiana Toll
Road is a highway within the meaning of the statute, and
that holding is not challenged by the Petitioners herein.

16 y

The Indiana Tax Court has construed the purpose of
the Motor Carrier Fuel Tax statute as simply to charge
motor carriers for the use of the public roads in Indiana.
This Court is bound by that construction, and Petitioners’
efforts to advance a different interpretation, 1.e., that the
purpose of the Motor Carrier Fuel Tax is to charge motor
carriers only for their use of highways supported by the
tax, is improper and cannot form the basis for the issu-
ance of a Writ of Certiorari.

_ The Indiana Legislature has broad powers in the classi-
fication of taxpayers and the creation of taxes. The Motor
Carrier Fuel Tax is apportioned on the basis of the use of
Indiana’s public roads, regardless of whether the roads are
supported by the tax. The State of Indiana is not required to
use the revenues generated by the Motor Carrier Fuel Tax
from operations on the Indiana Toll Road for the benefit of
the Indiana Toll Road and its patrons. The State of Indiana’s
decision to tax toll road usage does not violate Petitioners’
equal protection or due process rights.

The Petition for Writ of Certiorari should be denied.
Respectfully submitted,

RicHARD A. HusER
Counsel for Respondents

Locke REYNOLDs Boro &
WEISELL

1000 Capital Center South

201 North Illinois Street

Indianapolis, Indiana 46204

(317) 237-3800

Juuia M. BLACKWELL
Rosert W. WRIGHT
Co-Counsel for Respondents

SUPPLEMENTAL APPENDICES

App. 1

APPENDIX J

IN THE INDIANA TAX COURT
CASE NO. 49T10-9105-TA-00022

AREA INTERSTATE TRUCKING, )
INC., INDIANA MATERIAL )
TRANSFER, Inc., ADVANCE )
TRANSPORTATION COMPANY, _ )
BRYAN TRUCK LINE, INC., )
CHURCHILL TRUCK LINES, )
INC., FRANKS & SON, INC., )
GREAT AMERICAN LINES, )
INC., KAT, INC. and MOGLE )
ENTERPRISES, INC., on behalf )
of themselves and all others )
)
)
)
)
)
)
)
)
)
)
)

FILED
JAN 26 1993

similarly situated,
Petitioners,
VS.

INDIANA DEPARTMENT OF
REVENUE and KENNETH L.
MILLER, as Acting
Commissioner of the Indiana
Department of Revenue,

Respondents.

FINAL JUDGMENT ENTRY PURSUANT
TO IND. TRIAL RULE 56(C)

The Court, having issued an opinion in this case on
December 29, 1992 and having denied Petitioners’
Motions for Summary Judgment and granted Respon-
dents’ Cross-Motion for Summary Judgment, hereby
finds that there are no genuine issues of material fact
with respect to Count I of Petitioners’ Amended Verified

a

App. 2

Petition to Enjoin Collection of Tax and Original Tax
Appeal (“Amended Petition”) and that summary judg-
ment should be entered thereon. Such summary judg-
ment, being entered upon less than all of the claims in
this case, is hereby rendered final pursuant to ind. Trial
Rule 56(C) based upon the Court’s express findings
herein that there is no just reason for delay and that
Petitioners, if they so choose, should be permitted to file
with the Indiana Supreme Court a Petition for Review of
the Court’s December 29, 1992 opinion.

IT IS THEREFORE ORDERED, ADJUDGED, AND
DECREED that final summary judgment is hereby
entered in favor of Respondents on Count I of the
Amended Petition this 26th day of January, 1993.

/s/ Thomas G. Fisher
Thomas G. Fisher, Judge
Indiana Tax Court

COPIES TO:

James H. Hanson

Michael J. Tosick

SCOPELITIS, GARVIN, LIGHT & HANSON
1777 Market Tower

10 West Market Street

Indianapolis, IN 46204

Richard A. Huser

Kevin Charles Murray

LOCKE REYNOLDS BOYD & WEISELL
1000 Capital Center South

201 North Illinois Street

Indianapolis, IN 46204

App. 3
APPENDIX K

6-6-4.1-6 Credits against tax

Sec. 6. (a) A carrier is entitled to a credit against
the tax imposed under section 4 of this chapter if the
carrier, or a lessor operating under the carrier’s annual
permit, has:

(1) paid the tax imposed under IC 6-6-1.1 or IC
6-6-2.1 on motor fuel purchased in Indiana;

(2) consumed the motor fuel outside Indiana;
and

(3) paid a gasoline, special fuel, or road tax
with respect to the fuel in one (1) or more other
states or jurisdictions.

(b) The amount of credit for a quarter is equal to the
tax paid under IC 6-6-1.1 and IC 6-6-2.1 on motor fuel
that:

(1) was purchased in Indiana;
(2) was consumed outside Indiana; and

(3) with respect to which the carrier paid a
gasoline, special fuel, or road tax to another
state or jurisdiction.

(c) To qualify for the credit, the carrier shall submit
any evidence required by the department of payment of
the tax imposed under IC 6-6-1.1 or IC 6-6-2.1.

(d) A credit earned by a carrier ina particular quar-
ter shall be applied against the carrier’s tax liability
under this chapter for that quarter before any credit
carryover is applied against that liability under section 7

App. 4

of this chapter. As added by Acts 1982, P.L.59, SEC.1.
Amended by P.L.77-1985, SEC.28.

App. 5

APPENDIX L

AREA INTERSTATE TRUCKING, INC.,
Appellant-Intervenor-Plaintiff,

Vv.

INDIANA STATE DEPARTMENT OF REVENUE,
Appellee-Defendant.

No. 41A01-9012-CV-506.

Court of Appeals of Indiana,
First District.

June 26, 1991.

Trucking company brought class action against
Department of Revenue contending that Department
improperly assessed motor carrier fuel tax to extent
trucking company’s dump trucks used fuel in common
fuel reservoir to operate mechanism which raised and
lowered beds of trucks, as well as to move them along
highway. Carrier filed motion to intervene, alleging that
some of its fuel was used to traverse toll roads instead of
public highways. The Johnson Circuit Court, Jeffrey C.
Eggers, J., denied motion, and carrier appealed. The
Court of Appeals, Baker, J., held that: (1) toll roads were
“highways” within meaning of motor carrier fuel tax
Statutes, and (2) carrier did not use its fuel for locomotion
along highway and for “another commercial purpose,”
and thus did not come within definition of class.

Affirmed.

Carrier that used some of its motor fuel to traverse
toll roads did not come within class of carriers operating
equipment having common fuel reservoir for locomotion

eT

App. 6

along highway and for “another commercial purpose,” in
action for refund of motor carrier fuel tax attributable to
other commercial purpose, given determination that toll
road was “highway” within meaning of motor carrier fuel
tax statutes. West’s A.I.C. 6-6-4.1-1 et seq.

James H. Hanson, Lynne D. Lidke, Michael J. Tosick,
Scopelitis, Garvin, Light & Hanson, Indianapolis, Tom G.
Jones, Jones, Loveall & Johnson, Franklin, for appellant-
intervenor-plaintiff.

Kevin Charles Murray, Locke Reynolds Boyd &
Weisell, Indianapolis, for appellee-defendant.

BAKER, Judge.

Today we! are asked whether a toll road is a high-
way. We determine that it is. The question arises out of
Area Interstate Trucking, Inc.’s (Area) appeal from the
trial court’s final judgment denying Area’s motion to
intervene in a class action against the Indiana State
Department of Revenue (the Department) to recover
improperly assessed motor carrier fuel taxes.

Because we conclude a toll road is a highway, we
hold Area was not a class member under the class defini-
tion and affirm the trial court’s denial of Area’s motion to
intervene in the class action.

1 This action is before this court, instead of before the Indi-
ana Tax Court, because the action was commenced in the Mar-
ion Superior Court on June 27, 1986, whereas the Indiana Tax
Court did not come into existence until July 1, 1986. See
IND.CODE § 33-3-5-1.

App. 7

FACTS

Schwerman Trucking Company (Schwerman) oper-
ates dump trucks which have a common fuel reservoir
containing the fuel to propel the truck and operate a
mechanism which raises and lowers the beds of the dump
trucks. On June 27, 1986, Schwerman filed a class action
against the Department contending that the Department
had improperly assessed the motor carrier fuel tax pur-
suant to IND.CODE § 6-6-4.1-1 et seg. and that Schwer-
man and the class members were due tax refunds. The
trial court approved a stipulation for class certification
entered into by Schwerman and the Department which
defined the class as follows:

“That the class is composed of the following
taxpayers: each person and/or entity who oper-
ates equipment which has a common fuel! reser-
voir for locomotion along the highway and for
another commercial purpose and who are sub-
ject to the taxes imposed by the Indiana Code, as
amended I.C. 6-6-4.1-1, et seq.”

Record at 34.

Area filed a motion for the court to recognize a
subclass and appoint Area as its representative and a
motion to intervene, arguing its claim was like Schwer-
man’s in that some of the fuel used by Area, a carrier, was
used to traverse toll roads instead of public highways.
Area argued toll roads are not highways and, therefore,
the portion of Area’s fuel consumed on the toll roads was
fuel consumed for another commercial purpose and, in
accordance with IND.CODE § 6-6-4.1-1(d), is not subject
to the motor carrier fuel tax.

App. 8

The trial court denied Area’s motion to intervene and
entered final judgment on the order, after finding that the
motion was untimely and raised a question of law and
fact not common to Schwerman’s dispute with the
Department, and that Area’s intervention would preju-
dice settlement between the original parties by causing
substantial delay. Area then filed this appeal. Subse-
quently, Schwerman and the Department filed a settle-
ment agreement with the court acknowledging the
agreement would have no effect on Area’s claims.

In its order denying Area’s motion to intervene, the
trial court did not conclude explicitly that Area was not a
member of the Schwerman class but restated the defini-
tion of the Schwerman class, noted the definition of high-
way found in IND.CODE § 6-6-4.1-1(f), stated that
IND.ADMIN.CODE tit. 45, r. 13-2-11 (1984) indicates a
toll road is a highway for the purposes of IND.CODE
§ 6-6-4.1-1, and found, “Common Sense points to a con-
clusion that had the Legislature and the Department of
State Revenue intended toll road usage to not be highway
and to be ‘another commercial purpose’, specific lan-
guage to this effect would have been used.” Record at
264, Item 7. See also Record at 263, Items 3-5.

From the court’s findings we may infer that it would
find Area is not a class member if it were faced with the
issue. Both parties ask us, for the sake of judicial econ-
omy, to decide whether Area is a class member. Area
contends that its use of fuel upon the Indiana toll road is
fuel consumption “for another commercial purpose”, just
as is Schwerman’s auxiliary power equipment fuel usage
for the dump bed mechanism. Area argues it is, therefore,
a member of the class defined by Schwerman and the

ae —

App. 9

Department. The Department contends a toll road is a
highway and, therefore, the sole purpose of the equip-
ment operated by Area is for locomotion along a highway
and not for any other commercial purpose. Therefore, the
Department concludes, Area was not a class member.

DISCUSSION AND DECISION

Both Area and the Department agree the key issue in
this case is the meaning and scope of the class definition
stipulated to by Schwerman and the Department.? Speci-
fically, the question is whether Area’s claim for refunds of
taxes paid on fuel used for transportation on a toll road
brings it within the definition of class membership. On
appeal, Area concedes that if it is not a class member
there is no question of whether Schwerman was repre-
senting Area adequately and Area is not entitled to inter-
vene.

As the appellant, Area has the burden of demonstrat-
ing reversible error. The trial court’s judgment is clothed
with a presumption that it is correct. Indiana Dept. of
Revenue v. Waterfield Mortgage Co. (1980), Ind.App., 400
N.E.2d 212, 214.

2 Area initially raised as additional issues on appeal the
trial court’s findings that Area’s motion to intervene was
untimely, concerned questions not common with the disputes
between Schwerman and the Department, and would prejudice
settlement of the class claims. In its reply brief, however, Area
abandons those issues. We agree with the parties that an answer
to the question regarding Area’s class membership is disposi-
tive. Therefore, we do not address the additional issues raised
by Area.

App. 10

Our goal in construing statutes and regulations is to
seek out and give effect to the intent of our legislature.
Superior Construction Co. v. Carr (1990), Ind., 564 N.E.2d
281, 284; Hamilton County Dept. of Public Welfare v. Smith
(1991), Ind.App., 567 N.E.2d 165, 169. In attempting to
determine legislative intent, we give considerable defer-
ence to an interpretation of a statute by an administrative
agency charged with administering the statute. Indiana
State Prison and State Employees’ Appeals Commission v. Van
Ulzen (1991), Ind.App., 567 N.E.2d 1164, 1167; Dept. of
Revenue v. United States Steel Corp. (1981), Ind.App., 425
N.E.2d 659, 666. Furthermore, “a long adhered to admin-
istrative interpretation dating from the legislative enact-
ment, with no subsequent change having been made in
the statute involved, raises a presumption of legislative
acquiescence which is strongly persuasive upon the
courts.” Baker v. Compton (1965), 247 Ind. 39, 42, 211
N.E.2d 162, 164.

A carrier, meaning a “person who operates or causes
to be operated a commercial motor vehicle on any high-
way in Indiana”, IND.CODE § 6-6-4.1-1(a), is charged
with paying the motor fuel tax quarterly to the Depart-
ment, IND.CODE §§ 6-6-4.1-4(a); 6-6-4.1-1(e) which is
charged, under IND.CODE § 6-6-4.1-5(a), with depositing
revenue collected from the motor fuel tax into the state
highway fund. Thus, the Department is charged with
administering the motor carrier fuel tax and we will pay
great deference to its interpretation of IND.CODE
§ 6-6-4.1-1 et seq.

By the authority provided it in IND.CODE
§ 6-8.1-3-3, the Department adopted the rules in
IND.ADMIN.CODE tit. 45, r. 13-1-11 (1984) on July 13,

App. 11

1984. Those rules provide: “(a) The term ‘highway’ shall
mean the entire width between the boundary lines of
every thoroughfare that is open in any part to the use of
the public for purposes of vehicular travel. (b) For pur-
poses of IC 6-6-4.1-1, a toll road is a highway.” No legisla-
tive change has been made that would indicate the
legislature placed a different interpretation on
IND.CODE § 6-6-4.1-1 since July 13, 1984. We give sub-
stantial weight both to the Department's interpretation of
its own regulations and to the legislature’s acquiescence
in the administrative interpretation.

Although the doctrine of “legislative acquiescence is
a useful tool of statutory construction, it is not a sufficient
independent basis for affirming a judgment.” Indiana
Department of State Revenue v. Mercantile Mortgage Co.
(1980), Ind.App., 412 N.E.2d 1252, 1253. Therefore, we
will independently construe the term “highway” as used
in IND.CODE § 6-6-4.1-1 in accordance with the usual
rules of statutory construction.

“Statutes which impose or levy taxes may not be
extended beyond the clear import of the language of the
statute. Such statutes are to be construed strictly against
the state and in favor of the taxpayer.” Wechter v. Indiana
Department of State Revenue (1989), Ind.Tax, 544 N.E.2d
221, 224, aff’d (1990), Ind., 553 N.E.2d 844. Nevertheless,
in interpreting a statute we give the words used their
ordinary and common meaning rather than “over-
emphasizing a strict literal or selective reading of indi-
vidual words.” Spaulding v. International Bakers Services,
Inc. (1990), Ind., 550 N.E.2d 307, 309. We presume the
legislature intended the ordinary meaning of the statu-
tory language to apply unless such a presumption

App. 12

“would manifestly defeat the object of the provisions.”
Dept. of Revenue v. United States Steel, supra, 425 N.E.2d at
665. The plain and ordinary meaning of words is the
“meaning given to the language by the community and
ordinary reader.” Romain v. A. Howard Wholesale Co.
(1987), Ind.App., 506 N.E.2d 1124, 1126.

IND.CODE § 6-6-4.1-1(f) defines a “highway” as “[T]he
entire width between the boundary lines of every publicly
maintained way that is open in any part to the use of the
public for purposes of vehicular travel.” In common usage, a
“highway” is “la: a road or way on land or water that is
open to public use as a matter of right whether or not a
thoroughfare; a public road or way including the right-of-
way .. . C: a main direct road (as between one town or city
and another)...” Webster’s Third New International Dictionary
(Unabridged) 1069 (1967).

A “toll road” is “a road for the use of which a toll is
collected”. Id. at 2405. As our supreme court stated,
“Roads and highways are generic terms, embracing all
kinds of public ways, such as county and township roads,
streets, alleys, township and plank roads, turnpike or
gravel roads, ...” Strange v. Board (1910), 173 Ind. 640,
652, 91 N.E. 242, 247 (emphasis added). A “turnpike
road” is “a: a toll road; esp.: a toll expressway ...c: a
main road; a paved highway having a crowned surface”.
Webster's Third New International Dictionary (Unabridged)
at 2469. As we stated in Southern Indiana Gas v. Dept. of
Highways (1989), Ind.App., 533 N.E.2d 1289, trans. denied,
“All roads laid out under legislative enactment are public
highways belonging to the State.” Id. at 1293.

In accordance with these definitions, we hold that the
plain and ordinary meaning of a toll road or turnpike is

App. 13

that it is a highway as that term is defined in IND.CODE
§ 6-6-4.1-1(f). We have no reason to think that such a
meaning for toll road would manifestly defeat the legisla-
ture’s objective for the motor carrier fuel tax provisions.
We, therefore, reject Area’s arguments that: (1) a toll road
is not a highway because the motor carrier fue! tax reve-
nues are deposited into a state highway fund which
allegedly is not used to support the toll road, see
IND.CODE §§ 6-6-4.1-5; I.C. § 8-2.1-23-1; LC. § 8-14-1-2;
I.C. § 8-14-1-3; I.C. 8-23-9-55, and (2) a toll road is not
“open”, as the term is used to define “highway” in I.C.
§ 6-6-4.1-1(f), because access is gained by payment of a
toll and is hampered by restrictions.

We repeat that the definition of class membership is
an “entity who operates equipment which has a common
fuel reservoir for locomotion along the highway and for
another commercial purpose”. Record at 34. Thus, the
class definition requires both that an entity be using its
fuel for locomotion along the highway and for another
commercial purpose. We have determined that a toll road
is a highway. Therefore, toll road use does not constitute
“another commercial purpose”. Because Area was using
its common fuel reservoir solely for locomotion along a
highway, and not for another commercial Purpose, Area
was not a class member. Consequently, as Area concedes,
it is not entitled to intervene in Schwerman’s action. The
trial court did not err in denying Area the right to inter-
vene as a Class member in Schwerman’s action against the
Department.

Affirmed.
RATLIFF, C.J., and BARTEAU, J., concur.

App. 14

APPENDIX M
IN THE INDIANA TAX COURT
CASE NO. 49T10-9105-TA-00022

AREA INTERSTATE TRUCKING, )
INC., INDIANA MATERIAL )
TRANSFER, Inc., ADVANCE )
TRANSPORTATION COMPANY, )
BRYAN TRUCK LINE, INC., )
CHURCHILL TRUCK LINES, INC., )
FRANKS & SON, INC., GREAT )
AMERICAN LINES, INC., KAT, )
INC. and MOGLE ENTERPRISES, _ )
INC., on behalf of themselves and _)
all others similarly situated, )
Petitioners, ‘

vs. )

)

)

)

)

)

)

)

INDIANA DEPARTMENT OF
REVENUE and KENNETH L.
MILLER, as Acting Commissioner
of the Indiana Department of
Revenue,

a Ni i a ih ee

Respondents.

ORDER
(Filed Dec. 29, 1992)
This matter is before the Court on the Withdrawal of

Motion for Determination of Class and Praecipe for Hear-
ing filed by Petitioners.

The Court, being first duly advised in the premises,
now finds that permission to withdraw the Motion for

App. 15

Determination of Class and Praecipe for Hearing should
be granted.

IT IS THEREFORE ORDERED that Petitioners are
granted permission to withdraw their Motion for Deter-
mination of Class and Praecipe for Hearing at this time,
Subject to a right to re-file the Motion for Determination
of Class and Praecipe for Hearing at a later date.

Dated: December 29, 1992

/s/ Thomas G. Fisher
Thomas G. Fisher, Judge
Indiana Tax Court

COPIES TO:

James H. Hanson

Michael J. Tosick

SCOPELITIS, GARVIN, LIGHT & HANSON
1777 Market Tower

10 West Market Street

Indianapolis, IN 46204

Richard A. Huser

Kevin Charles Murray

LOCKE REYNOLDS BOYD & WEISELL
1000 Capital Center South

201 North Illinois Street

Indianapolis, IN 46204

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1176%3A2. Public record. Not legal advice.