Auto Cargo, Inc. v. Miami Dade County

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
________________________ JAN 08 2001
THOMAS K. KAHN
No. 99-12176 CLERK
________________________
D. C. Docket No. 96-02138-CIV-ASG
AUTO CARGO, INC.,
Plaintiff-Appellant,
versus
MIAMI DADE COUNTY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(January 8, 2001)
Before BARKETT and WILSON, Circuit Judges, and DOWD*, District Judge.
BARKETT, Circuit Judge:
*
Honorable David D. Dowd, U.S. District Judge for the Northern District of Ohio, sitting
by designation.
Auto Cargo, Inc. (“Auto Cargo”) appeals from summary judgment in favor
of Miami Dade County (“Dade County”) in this action brought on behalf of a class
of all persons and entities required to pay to Dade County $7.50 for every used,
self-propelled vehicle exported through the U.S. Customs vehicle inspection
facility at the Port of Miami (the “Port”). The question presented is whether the
required payment is prohibited by the Import-Export Clause of the U.S.
Constitution. We affirm, finding that it does not violate the Import-Export Clause.
BACKGROUND
Dade County, which operates the Port, allowed the U.S. Customs Service to
place a trailer rent-free on property set aside by the Port to serve as a vehicle
inspection facility. The purpose of the facility is to inspect and process, in
accordance with federal regulations, 19 C.F.R. §§ 192 et seq. (2000), vehicles
presented for export as well as to prevent the export of stolen used cars.1 In 1994,
in order to recoup its costs for the establishment of the inspection facility, the Port
introduced a five dollar “vehicle export fee” on each used, self-propelled vehicle
for which export authorization was sought. In 1995, Dade County passed County
Ordinance 95-200 (the “1995 Ordinance”), increasing the fee to $7.50 and
1
The 1992 amendments to the Tariff Act of 1930 authorize the Commissioner of
Customs to “establish specific criteria for randomly selecting used automobiles scheduled to be
exported, consistent with the risk of stolen automobiles being exported. . . .” 19 U.S.C. § 1646c.
2
earmarking the additional $2.50 to the Dade County Multi-Agency Auto Theft
Task Force. The Task Force is comprised of representatives from city and county
police departments, Customs, and the FBI, and it conducts investigations into
organized groups of auto thieves. These investigations focus on South Florida but
can be national and international in scope. The Task Force has its main office in
the Miami Dade Police headquarters in Miami, but it has a satellite office in the
vehicle inspection facility, and six of its employees work there full-time inspecting
cargo containers. The Task Force devotes much of its work to reducing the flow of
stolen vehicles through the Port.
Auto Cargo is a Florida company that exports used, self-propelled vehicles
(mostly automobiles) and acts as an agent to the vehicle owners to secure clearance
for export through Customs. Auto Cargo sued the County on behalf of a class
consisting of “[a]ll persons and entities who have been required to pay . . . an
export Duty, tax or fee upon used, self-propelled vehicles . . . in order to gain
access to the U.S. Customs Vehicle Inspection Facility at the Port of Miami,”
arguing that the inspection fee, although disguised as a user fee, is really a means
to raise revenue for the County and constitutes an improper tax violating the
Import-Export Clause of the U.S. Constitution. The district court certified the class
and, after discovery, both sides moved for summary judgment. The district court
3
granted summary judgment to Dade County, finding that the inspection fee is not
discriminatory under the Import-Export Clause.
On appeal, Auto Cargo contends that the district court erroneously resolved
disputed issues of material fact in favor of Dade County and that the district court
misapplied controlling law in determining that the required payment was not
discriminatory in its application. We review de novo a district court’s grant of
summary judgment, applying the same legal standards as the district court. See
Whatley v. CNA Ins. Cos., 189 F.3d 1310, 1313 (11th Cir. 1999). Summary
judgment is appropriate if the evidence before the court shows that “there is no
genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.” Fed. R. Civ. P. 56(c).
DISCUSSION
Preliminarily, we reject, as inconsistent with its position before the district
court, Auto Cargo’s contention that the district court erroneously resolved disputed
issues of material fact. In its reply to Dade County’s memorandum in opposition
to Auto Cargo’s motion for summary judgment, Auto Cargo noted that “[b]oth
parties have taken the position that there are no material questions of fact which
would prevent the granting of summary judgment.”
4
The issue presented in this case is whether the inspection fee violates the
Import-Export Clause of the U.S. Constitution.2 The Import-Export Clause
provides:
No State shall, without the Consent of the Congress, lay any Imposts
or Duties on Imports or Exports, except what may be absolutely
necessary for executing its inspection Laws: and 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; and all such Laws
shall be subject to the Revision and Controul of the Congress.
U.S. Const. art. I, § 10, cl. 2. Although duties and imposts are indisputably taxes,
the Supreme Court has interpreted the Import-Export Clause to permit states to
impose “generally applicable, nondiscriminatory taxes even if those taxes fall on
imports or exports.” United States v. Int’l Bus. Mach. Corp., 517 U.S. 843, 852
(1996) (citing Department of Revenue of Washington v. Ass’n of Washington
Stevedoring Cos., 435 U.S. 734 (1978); Michelin Tire Corp. v. W.L. Wages, 423
U.S. 276 (1976)).
2
Count I of the complaint alleges that the inspection fee “is an unlawful tax or Duty,
prohibited by” the Import-Export Clause. Count II of the complaint alleges that the inspection
fee “unlawfully discriminates against exports in violation of” the Import-Export Clause. In its
Memorandum of Law in support of its motion for summary judgment, Auto Cargo again stated,
“The complaint alleges that [the inspection fee] is violative of the Constitution of the United
States, Article I, Section 10, Clause 2, the Import-Export Clause. . . .” In a joint pretrial
statement, the parties agreed that the only issues of law for determination by the district court
involved the question of whether the inspection fee violates the Import-Export Clause.
5
Before Michelin, assessment of the validity of a state exaction under the
Import-Export Clause turned on the question of whether or not the goods retained
their status as imports or exports at the time of the exaction. Low v. Austin, 80
U.S. 29, 20 L.Ed. 517 (1872). Thus a state could not tax goods destined for export
once they entered the “export stream,” and it could not tax an imported item so
long as that item remained in its “original package.” Washington Stevedoring, 435
U.S. at 758. Michelin overruled cases that stressed the nature of the goods as
imports or exports and instead focused on the nature of the exaction at issue.
Michelin, 423 U.S. at 279. The Michelin Court determined that the question of a
violation of the Import-Export Clause turns on whether the exaction in question
was “the type of state exaction which the Framers of the Constitution . . . had in
mind as being an ‘impost’ or ‘duty’ . . . .” Id. at 283. According to Michelin, an
exaction is valid unless it interferes with the three policies concerns that motivated
the Framers in adopting the Import-Export Clause: 1) maintaining federal
uniformity in foreign commercial relations; 2) preventing the diversion to the states
revenue generated by imported goods; and 3) maintaining harmony among the
states by preventing states from taxing goods flowing through seaboard states’
ports to (or from) other states. Michelin, 423 U.S. at 285-86.
6
Michelin involved a challenge to a Georgia state ad valorem property tax
assessed against tires that Michelin imported from France and included in an
inventory maintained at its wholesale warehouse. The Georgia Supreme Court had
rejected Michelin’s appeal on the ground that the tires, now stored in a warehouse,
had lost their status as imports. Id. at 279. Finding that a nondiscriminatory ad
valorem property tax on goods no longer in transit did not in any way compromise
the policy concerns underlying the Import-Export Clause, the Supreme Court
upheld the validity of the Georgia tax. Id. at 286.
Auto Cargo argues that, because the facts of this case differ from those
before the Supreme Court in Michelin, Michelin is inapplicable here. Although the
facts in this case are different, the framework established in Michelin for assessing
the constitutionality of an exaction under the Import-Export Clause is clearly a
general one and not restricted simply to the facts under consideration in that case.
Since Michelin, courts assessing the validity of state exactions on either imports or
exports under the Import-Export Clause have relied exclusively on Michelin’s
analysis. See, e.g., R.J. Reynolds Tobacco Co. v. Durham County, North Carolina,
479 U.S. 130, 152-55 (1986) (upholding the validity under the Import-Export
Clause of North Carolina’s ad valorem tax on imported tobacco); Limbach v.
Hoover & Allison Co., 466 U.S. 353 (1986) (upholding the constitutionality of an
7
Ohio ad valorem personal property tax on imported fibers still in their original
packages); Itel Containers Int’l Corp. v. Huddleston, 507 U.S. 60, 76-78
(upholding Tennessee’s imposition of sales tax on the lease of cargo containers
within the state for use in international shipping); Louisiana Land & Exploration
Co. v. Pilot Petroleum Corp., 900 F.2d 816, 819-821 (5th Cir. 1990) (applying the
Michelin policy analysis and striking down a direct state tax on jet fuel sold for
export as violative of the Import-Export Clause). In Washington Stevedoring, the
Supreme Court made clear that the Michelin analysis applies to cases involving
exports as well as imports. See 435 U.S. at 753-58 (finding that a state tax on
stevedoring activities did not disturb the three policies protected by the Import-
Export Clause). Accordingly, we analyze the inspection fee to determine whether
its effects undermine the three policy concerns identified by the Michelin Court.
First, the inspection fee can have no possible effect on foreign commercial
relations, as it applies only to business conducted at the Port and imposes no
burdens on foreign businesses. See Washington Stevedoring, 435 U.S. at 754(finding no effect on commercial regulation where challenged tax affects only
business conducted within Washington State and where no foreign businesses or
vessels are taxed). Far from disrupting federal uniformity in foreign commercial
relations, the inspection fee is imposed in order to offset the costs to Dade County
8
of effectuating federal regulations aimed at reducing the export of stolen vehicles.
See 19 C.F.R. § 192 et seq. (2000) (regulating exportation of used self-propelled
vehicles, vessels, and aircraft).
Second, the inspection fee “deprive[s] the Federal Government of no
revenues to which it was entitled. The exaction merely pa[ys] for services . . .
supplied by the local government.” See Washington Stevedoring, 435 U.S. at 753(summarizing the analysis in Michelin); id. at 754 (finding that a state tax on
stevedoring companies merely compensates the state for services and protection).
Indeed, a state tax on exports could not deprive the federal government of revenue
to which it is entitled, because the Constitution’s Export Clause, which provides,
“[n]o Tax or Duty shall be laid on Articles exported from any State,” specifically
forbids federal taxation of exports. U.S. Const. art. I, § 9, cl. 5; see Washington
Stevedoring, 435 U.S. at 758 (noting that “the Constitution forbids federal taxation
of exports”).
Finally, the inspection fee does not disrupt harmony among the states so
long as there is a reasonable nexus between the person paying the fee and Dade
County, the fee is properly apportioned and nondiscriminatory, and it relates
reasonably to the services provided by Dade County. See Washington
Stevedoring, 435 U.S. at 754. As only those who use the Port are required to pay
9
the inspection fee, there is a reasonable nexus between those who pay the fee and
Dade County. As Dade County installed the inspection facility in order to meet the
needs of those who use it in order to export used self-propelled vehicles through
the Port, the fee is properly apportioned and relates directly to the services
provided. Indeed, as the Supreme Court noted in R.J. Reynolds Tobacco, if the
inspection fee were not assessed, the effect would be to shift the burden from those
who use the facility supported by the fee to the local taxpayers, “a result
completely at odds with Michelin.” 479 U.S. at 154.
Auto Cargo makes no argument that the inspection fee has an adverse effect
on the policy concerns that informed the Supreme Court’s analysis in Michelin;
that is, Auto Cargo has made no showing that the fee disrupts federal uniformity in
foreign commercial relations, diverts to the states revenue generated by imported
goods, or disrupts harmony among the states by taxing goods flowing through
seaboard states’ ports to other states.
Instead, Auto Cargo broadly asserts that the inspection fee is
“discriminatory” because it applies only to used self-propelled vehicles and not to
other automobiles or to any other goods transported through the Port. If Auto
Cargo intends that this argument relates to the Import-Export Clause, it
misapprehends the meaning of the term “discriminatory” in this context. This fee
10
is clearly non-discriminatory under the Import-Export Clause because it is not
imposed in a way that discriminates against interstate or foreign commerce. The
fee applies to all who use the facility at the Port, as it does not matter whether the
vehicles that the parties seek to export entered the stream of commerce in Florida
or in some other state. Accordingly, the fee does nothing to disrupt the harmony
among the states. The issue of whether the inspection fee is somehow
“discriminatory” or “unfair” in ways unrelated to the Import-Export Clause is not
before us, and the fact that the inspection fee does not apply to other goods
exported through the Port does not make it a discriminatory tax under Michelin.
Accordingly, we find that the inspection fee is not discriminatory under the Import-
Export Clause.
Finally, Auto Cargo draws on Supreme Court cases involving challenges to
taxes or user fees brought under constitutional provisions other than the Import-
Export Clause and maintains that the district court erred in relying on Michelin in
finding the inspection fee non-discriminatory. The cases Auto Cargo cites to
involve challenges under the Commerce Clause, the Export Clause, and the implied
immunity of state governments from federal taxation. Auto Cargo may or may not
have a viable claim based on these other constitutional grounds, but that is not the
claim that has been pled here.
11
We reject Auto-Cargo’s arguments that draw on Evansville-Vanderburgh
Airport Auth. Dist. v. Delta Airlines, 405 U.S. 707, 716-17 (1972), and
Massachusetts v. United States, 435 U.S. 444, 464 (1978), for the simple reason
that Michelin establishes the only applicable standard for determining whether an
exaction is discriminatory under the Import-Export Clause. In Evansville-
Vandenburgh, private airlines brought a Commerce Clause challenge to a one
dollar per passenger user fee imposed on airlines by state legislatures. In
Massachusetts, the state challenged an annual registration tax as applied to state-
owned aircraft as violative of the implied immunity of state governments from
federal taxation. Neither of these cases provide any guidance for the adjudication
of challenges brought under the Import-Export Clause.
Similarly, Auto Cargo appears to argue that we should apply standards
imported from cases decided under the Export Clause. The Supreme Court has
recently remarked on the difference between the Import-Export Clause and the
Export Clause. Int’l Bus. Mach., 517 U.S. at 859 (“It is simply no longer true that
the Court perceives no substantive difference between the two Clauses.”). The two
clauses place limitations on different sovereign entities: while the Import-Export
Clause limits state exactions, the Export Clause limits Congressional action. In
addition, while the Supreme Court has interpreted the Export Clause as allowing
12
“no room for any federal tax, however generally applicable or nondiscriminatory,
on goods in export transit,” United States v. United States Shoe Corp., 523 U.S.
360, 367 (1998), it has interpreted the Import-Export Clause, as permitting states to
impose nondiscriminatory taxes on imports or exports. Michelin, 423 U.S. at 290.
We find that cases decided under the Export Clause provide us with no useful
guidance in this case.
Accordingly, we cannot conclude that the district court erred in finding that
the inspection fee is not a discriminatory exaction imposed in violation of the
Import-Export Clause. Thus, the district court’s decision, granting summary
judgment to Dade County, is
AFFIRMED.
13