Delivery was made into the hold of the vessel from the vendor's
tanks located at the dock. That delivery marked the
commencement of the movement of the oil abroad. It is true, as
the Supreme Court of California observed, that at the time of the
delivery the vessel was in California waters and was not bound
for its destination until it started to move from the port. But
when the oil was pumped into the hold of the vessel, it passed
into the control of a foreign purchaser and there was nothing
equivocal in the transaction which created even a probability
that the oil would be diverted to domestic use. . . .
It seems clear under the decisions which we have
reviewed involving Article I, Section 9, Clause 5 of the
Constitution that the commencement of the export would occur
no later than the delivery of the oil into the vessel.
Richfield, 329 U.S. at 82-83, 67 S.Ct. 163-164.
This straightforward analysis is clearly applicable to the instant case. The facts
herein show that the processed coal moves into export transit as it is loaded onto the train
through the flood load facility. From that point, the train travels to the dock where the coal
from each car is dumped onto a conveyor belt which loads the coal directly into the vessel
for export overseas. Significantly, once the coal is loaded onto the train, it cannot be diverted
from its overseas destination. Further, there is no dispute that sale of the coal occurs no
earlier than when the coal is loaded onto the railcars, and that the taxes at issue accrue at the
time of sale. Thus, I believe that any fair application of the law as articulated in Richfield Oil
to the undisputed facts mandates the conclusion that the so-called severance taxes at issue
are actually taxes imposed upon an export which violate the Import-Export Clause.
The majority opinion chooses to ignore Richfield Oil by making the dubious
observation that “the focus of Import-Export Clause analysis took a sharp turn” in Michelin
Tire Corp v. Wages, Inc., 423 U.S. 276, 96 S.Ct. 535, 46 L.Ed.2d 495 (1976) and Washington
Dept. of Revenue v. Assoc. of Washington Stevedoring Cos., 435 U.S. 734, 98 S.Ct. 1388, 55
L.Ed.2d 682 (1978). I believe the majority opinion's wholesale rejection of Richfield Oil in
favor of the Michelin Tire/Washington Stevedoring line of cases is improper for several
reasons.
First, it is undisputed that the Supreme Court has never overruled Richfield Oil.
Therefore, this Court should not feel free to completely reject the law set forth by the
Supreme Court in that case. Second, the Supreme Court has indicated that it never intended
the Michelin/Washington Stevedoring line of cases to supplant Richfield. Rather, the Court
plainly has distinguished Richfield from Michelin/Stevedoring. For example, in United
States v. IBM, Corp., 517 U.S. 843, 116 S.Ct. 1793, 135 L.Ed.2d 124 (1996), the Court
explained:
Our holdings in Michelin and Washington Stevedoring do not . . . interpret the Import-Export Clause to permit assessment of nondiscriminatory taxes on imports and exports in transit. Michelin involved a tax on goods, but the goods were no longer in transit. The tax in Washington Stevedoring burdened imports and exports while they were still in transit, but it did not fall directly on the goods themselves. . . .
The Court has never upheld a state tax assessed directly on goods in import or export transit. . . .
. . . Thus, contrary to the Government's contention, this
Court's Import-Export Clause cases have not upheld the validity
of generally applicable, nondiscriminatory taxes that fall on
imports or exports in transit. We think those cases leave us free
to follow the express textual command of the Export Clause to
prohibit the application of any tax “laid on Articles exported
from any State.”
IBM, 329 U.S. at 861-862, 116 S.Ct. at 1803-1804 (citations omitted). Under the distinction
made by the Supreme Court, because the facts in this case involve a tax on goods in transit,
Richfield Oil, not Michelin/Washington Stevedoring, applies. Finally, because Richfield Oil
remains good law and it directly controls this case, it should be followed by this Court. The
Supreme Court has explained that “If a precedent of this Court has direct application in a
case, yet appears to rest on reasons rejected in some other line of decisions, [the lower court]
should follow the case which directly controls, leaving to this Court the prerogative of
overruling its own decisions.” Rodriguez de Quijas v. Shearson/American Express, Inc., 490
U.S. 477, 484, 109 S.Ct. 1917, 1921-22, 104 L.Ed.2d 526 (1989).
In the instant case, the majority opinion should have relied upon the law set
forth in Richfield Oil. Application of that law to the present facts indicates that the severance
taxes at issue, which are imposed on the coal after it is moved into export transit, is a tax
upon an export within the meaning of the Import-Export clause and is therefore
unconstitutional. Accordingly, I dissent.
(See footnote 1)