Petition for Writ of Certiorari — Mercury Press, Inc. v. District of CoLumbia

INDEX.

Page

Petition ror Writ or CERTIORARI ................... 1

Statement of the Matter Involved .................. 2

NN 5a C0. SEEM Ghs Ob. vhva dbase suena 2

Reasons for Allowance of the Writ ................. 2

ESS EAN RRR: a eee a nae de Meee 3

I I ot ee acne cae wes as'gbeas tak aaa 3

Britr iN Support oF PETITION ................000005 5)

I RN ars 5 Ta a a 5

ss Case iy ening a FRSa AWA Me CLaek ene 5)

EES SSRIS pap athe ye see SPN etry ng PGES 6

The proceeds of a tax on imports must go to

PE NN a sain db Oi aads hans ca ceb ices 6

Congress lacks power to tax imports for local

Th. Si eet en 60d in ss pape aes bas 66 6h aed 6

The tax here included being an indirect tax, may not

be included by implication within a statute pat-

ently providing solely for direct taxes .......... 9

I NE ee tie Aa nee eg NS 8 a 10

RR Se SORES na ea 10

AUTHORITIES CITED.

CASES

Atlantic Cleaners & Dyers v. U. S., 286 U. S. 427..... 2,8

Curry v. D. C., 14 App. D. C. 423, 439................ 7

Downes v. Bidwell, 182 U. S. 244 .................... 9

Hooven & Allison v. Evant, 324 U.S. 652.......... 2, 6, 7,8

Loughborough v. Blake, 5 Wheat. 317 ............... 2,8

moemsemper v. U. G., 163 UB. 976 i... wean css 9

Nield v. D. C., 71 App. D. C. 306, 110 F(2) 246........ 3

O’Donoghue v. U. S., 289 U. S. 516.................. 9

U. S. v. More, 7 U. S. (3 Cranch) 159, Footnote p. 160 7

U. S. v. Wigglesworth, 2 Story 369, 373, Fed. Cases

NEE s 056 ce KAM Ss GAARA dab Awa SS Oe weCAS coun 2 10

STaTuTEs

District of Columbia Code, 1940 Edition, Title 47, Sec.

IS bs bb vcd Aa can dak Cave AAAOd Asc wae x’ 5, 4

Judicial Code, Sec. 240, as Amended (Title 28 USCA

Sete ME Sawh in can vndieb panes kn catnckeatiie 3

IN THE

Hupreme Court of the United States

Ocroser Tzrm, 1948.

Mercury Press, Inc., Petitioner,

v.

Disrrict or CoLumBia, Respondent.

PETITION FOR WRIT OF CERTIORARI.

To the United States Court of Appeals for the District of

Columbia Circuit.

To the Honorable, The Chief Justice and the

Associate Justices of the United States:

Petitioner, Mercury Press, Inc., hereby petitions for the -

issuance of a Writ of Certiorari to review the judgment of

the United States Court of Appeals fo. the District of

Columbia Circuit, whose judgment of December 20, 1948,

affirmed the judgment below. Petition for rehearing filed

January 3, 1949, was denied April 27, 1949.

Statement of the Matter Involved.

Petitioner imported newsprint from Canada which on

arrival was stored in a warehouse some distance from its

printing plant, pending the time it could be put to the use

for which imported, The District of Columbia exacted a

tax on such imported newsprint on the same basis as on

other tangible personal property in the District on the tax

date,

A single question is presented:

Question Presented.

Are imports taxable in the Distriet of Columbia under a

statute which provides for a tax on ‘all tangible personal

“property?”

Reasons For Allowance of The Writ.

This case presents important questions affecting Consti-

tutional limitations on the taxation of imports, and on the

powers of Congress over District of Columbia affairs.

The decision below is in direet conflict with Hooven &

Allison v. Evant, 324 U.S. 652, as to the taxation of im-

ports, and with the above case as well as Atlantic Cleaners

& Dyers vo US S., 286 U.S, 427, and Loughborough v. Blake,

& Wheat, 317, 319, as to the powers of Congress.

A novel question is presented as to whether the exclusive

crant of legislative power over District of Columbia affairs,

gives to Congress, when legislating for such District, pow-

ers denied to the States and specifically withheld from the

national legislature.

The debate on the recent Sales Tax Bill indicates that

Congress itself is uncertain, if it does not positively dis-

agree with the Court of Appeals, as to the extent of its

powers in enacting tax laws for the District of Columbia.

While Congress has unlimited powers in dealing with

matters affecting interstate commerce, the Chairman of the

Senate District Committee, and the Senator in charge of

the recent Sales Tax Bill, both asserted that Congress may

—

3

not impair interstate commerce through the operation of

District tax statutes. No Senator challenged that position.

Mr. MeGrath, ... it is not within our power constitu-

tionally to make a tax apply to anything in interstate

commerce,’? Congressional Record, May 12, 1949, p.

6192

Mr. Hunt. T may say to the distinguished Senator

that we have in mind the exemption of any tangible

personal property to which interstate commerce laws

apply. In other words, it would not be lawful under

the Constitution.... Congressional Record, May 13,

1949, p. 6282.

But the United States Court of Appeals for the District of

Columbia has heid that Congress may impair interstate

commerce in taxing for the District, (Nield v. District of

Columbia, 71 App. D. C. 306, 110 F(2) 246); which decision

has now been broadened by that Court to hold that the

Congress may disregard positive constitutional limitations

on the taxation of imports when legislating for the District

of Columbia,

Jurisdiction.

The jurisdiction of this Court to grant the Writ is in-

voked under Judicial Code Section 240 as Amended (Title

238 U. 8S. C. A. Section 347). The United States Court of

Appeals for the District of Columbia Circuit denied peti-

tion for rehearing under date of April 27, 1949, and this

petition is filed within the statutory period. (28 U.S.C.A.

350).

Prayer For Relief.

Wherefore, the petitioner, by its counsel, prays the issu-

ance of = Writ of Certiorari to the United States Court o-

Appeals for the District of Columbia Circuit to the end

that the judgment may be reversed and for such other and

further relief as to the Court may seem appropriate.

Hersert G. PIuen,

Attorney for Petitioner,

5

BRIEF IN SUPPORT OF PETITION.

Statement of Facts.

Petitioner is engaged in the printing business in the Dis-

trict of Columbia and in that connection imported news-

print from Canada in large rolls, weighing from 500 to 1000

pounds, and wrapped in heavy waterproof paper. This

newsprint was stored in a warehouse. It was not brought

to Petitioner’s printing plant until ready to be put to the

use for which imported, viz., the printing of publications

for others.

In its personal property tax return for the fiscal year

ending June 30, 1948, petitioner showed among other

things, the following:

‘Imported newsprint in original packages in ware-

house $36,393.79.”’

The Assessor made an assessment upon the basis of all

the property reported, including the newsprint referred to

above. The tax was paid under protest and the case pro-

eceded thereafter in accordance with the usual procedure

ot cases of this kind.

The statute under which the assessment was made reads

as follows:

Statute Involved.

‘“*On all tangible personal property, assessed at a

fair cash value (over and above the exemptions * pro-

vided in section 47-1208) including vessels, ships, boats,

tools, implements, horses, and other animals, carriages,

wagons and other vehicles, there shall be paid to the

Collector of Taxes of the District of Columbia the rate

of tax provided by law.’’

D. C. Code, Title 47, See. 1207.

* The exemptions run to charitable institutions, libraries, ete., and are of

no application here. :

6

Argument.

The proceeds of a tax on imports must go to national

purposes,

Quite recently this court said, with reference to the Con-

stitutional provisions dealing with the limitations on Fed-

eral and State taxation of imports:

**These provisions were intended to confer on the

national government the exclusive power to tax im-

portations of goods into the United States.’

Hooven & Allison v. Evant, 324 U.S. 652, 656.

The proceeds of the tax here involved do not go ‘‘to pay

the debts and provide for the common defense and gen-

eral welfare of the United States’? as required by Article

I, Section 8, nor what amounts to the same thing, do they

go ‘‘for the use of the Treasury of the United States”? as

required by Section 10.*

On the contrary the proceeds go solely to the payment

of District of Columbia obligations, since the taxing stat-

ute provides:

**All taxes collected shall be paid into the Treasury

of the United States, and the same . . . shall be dis-

bursed for the expenses of said District . . .”’

D. C. Code, Title 47, Sec. 309.

Congress lacks power to tax imports for local purposes.

Clearly Congress did not enact the tax statute here in-

volved in its capacity as a national legislature: The tax is

*«*The Congress shall have power to lay and collect taxes, duties, imposts

and excises, to pay the debts and provide for the common defense and general

welfare of the United States; but all duties, imposts and excises shall be

uniform throughout the United States;’’

Art. I, See. 8, Cl. 1.

**No state shall, without the consent of the Congress, lay any imposts of

duties on imports or exports, except what may be absolutely necessary for

executing its inspection laws; and the net produce of all du and imposts,

laid by any state on imports or exports shall be for the use of the Treasury of

the United States; — all such laws shall be subject to the Revision and

control of the "

Art. I, See. 10, Cl. 10.

— =

7

not uniform, and the proceeds do not go for national pur-

poses as required by Section 8 of Article I.

If, on the other hand, it be argued that Congress has

powers equal to those of State legislatures when enacting

laws for the District of Columbia, the answer is clear: A

similar statute enacted by a State could not reach imports.

Hooven & Allison v, Evant, supra.

It follows therefore that in order for Congress to have

power to enact a tax on imports for the sole use of the

District of Columbia, it must have powers greater than the

combined State and national powers when it acts in its

capacity as District of Columbia legislature. There is

nothing in the grant to indicate unlimited power:

‘Congress shall have power . . . to exercise exclu-

sive legislation in all cases whatsoever, over such Dis-

trict (not exceeding ten Miles square) as may, by ces-

sion of particular States, and the Acceptance of

Congress, become the seat of the government of the

United States, ...”

Art. I, See. 8, Cl. 17.

It will be remembered that Congress is denied the power

to pass an ex post facto law or a bill of attainder by

Article I, Section 9, Clause 3, and the States are denied

such power under Article I, Section 10, Clause 1. Can Con-

gress pass an ex post facto law or bill of attainder for the

District of Columbia? The decisions are to the contrary.

U. S. v. More, 7 U.S. (3 Cranch) 159 (See Circuit

Court decision in footnote p. 160) Curry v. D. C. 14

App. D. C. 423, 439,

The law would seem to be that where limitations apply to

both the national Congress and to the State legislatures,

they apply with equal force to the Congress when acting as

local legislature for the District of Columbia. As stated by

this Court, when acting in this capacity Congress has all the

powers of legislation which may be exercised by a State

8

in dealing with its affairs, ‘‘so long as other provisions of

the Constitution are not infringed.’’

Atlantic Cleaners & Dyers vy. U. S§., 286 U.S. 427,

435.

The words ‘‘the net produce of all duties and imposts,

laid by any State on imports or exports shall be for the use

of the Treasury of the United States’’ as used in Section

10 of Article I, mean exactly the same thing as do the words .

“*to pay the debts and provide for the common defense and

general welfare of the United States’’ as used in Section 8

of that Article. It follows, as this Court held in the

Hooven € Allison case, that all proceeds from the collec-

tion of taxes on imports—whether by the national govern-

ment or by a State government (other than for inspection

purposes )—must go to national purposes.

However, the Court of Appeals by-passed the problem

by holding that since the uniformity rule does not apply

to excise taxes when applied by Congress to the territories,

the rule of uniformity does not apply to a tax on imports

in the District of Columbia.

But this case does not involve an excise tax, it involves

a tax on an import. There i. no limitation on the States

enacting excise taxes. There are positive limitations on

State enactments of taxes on imports. The power of Cong-

ress need only be equal to that of a State, as to District of

Columbia matters, to warrant the enactment of an excise

tax for the District of Columbia.

As to imports, in an early case Chief Justice Marshall

wrote:

‘The District of Columbia .. . is not less within

the United States, than Maryland, or Pennsylvania,

and it is not less necessary, on the principles of our

constitution that uniformity in the imposition of im-

posts, duties and excises should be observed in the one

than in the other.’’

Loughborough v. Blake, 5. Wheat, 317, 319.

9

While it may be that Congress can lay down whatever

conditions it likes in accepting a new territory, the District

of Columbia acquired every Constitutional protection while

a part of two states, and those States and the people in

them did not relinquish any of those rights and privileges

by cession of the area for a seat of government.

Downes v. Bidwell, 182 U. S. 244.

In McAllister v. U. S., 141 U. 8. 174, it was held that the

constitutional provision in respect to the tenure of judicial

office did not apply to territorial offices, while in O’Don-

oghue v. U. 8. 289 U. 8. 516, the courts of the District of

Columbia were held to be constitutional courts.

Furthermore, there is no power in the national Con-

gress to tax imports in one State for the sole benefit of that

State. There likewise is no power in Congress to tax im-

ports in the District of Columbia for the sole benefit of the

District of Columbia.

The tax here involved being an indirect tax may not be in-

cluded by implication within a statute patently pro-

viding solely for direct taxes.

That Congress did not rely on the general name ‘‘per-

sonal property’’ to determine what items should be subject

to taxation is shown by the fact that the statute specifically

names articles about which there might be doubt: vessels,

ships, tools, animals, etc. Imports are not mentioned, even

though this item is given a special character by virtue of

Constitutional limitations on taxation. A character which

developed prior to the enactment of this tax statute, 1902.

It is difficult to conceive that Congress intended the

name ‘‘personal property’’ as used in the District of Col-

umbia tax statute to have a meaning different from its

meaning in every other tax statute. If Congress enacted

legislation providing that all personal property shall be

subject to a direct tax, properly apportioned, it is obvious

the general name ‘‘personal property’’ could not include

10

an import. Likewise, when a State provides a tax on all

personal property, that term is not broad enough to include

imports.

By historical background, because of Constitutional lim-

itations, a tax on an import, while it retains its character

as an import, is an indirect tax, that is, a tax on the act of

importing.

The tax here involved was imposed under a statute clear-

ly intended to impose direct taxes only.

As said by Judge Story:

“Tt is as I conceive, a general rule in the interpre-

tation of all statutes levying taxes or duties upon sub-

jects or citizens not to extend their provisions by imp-

lication, beyond the clear import of the language used,

or enlarge their operation so as to embrace matters not

specifically pointed out, although standing upon a close

analogy.”’

U.S. v. Wigglesworth, 2 Story 369, 373, Fed. Cases

No. 16,690.

Opinion Below.

The opinion of the Board of Tax Appeals for the District

of Columbia was not published. It appears in the Record

at Page 3. The opinion of the United States Court of

Appeals for the District of Columbia, appears in the Record

at page 21.

Conclusion.

Wherefore, Petitioner respectfully prays for the issu-

ance of a Writ of Certiorari to the United States Court of

Appeals for the District of Columbia Circuit.

Respectfully submitted,

Hersert G. Prue,

522 Munsey Building,

Washington 4, D. C.,

Attorney for Petitioner.