AMERICAN TRUCKING ASSNS., INC. v. MICHIGAN PUB. SERV. COMM'N
Michigan law required every truck engaged in intrastate commercial hauling to pay a flat $100 annual fee. Interstate trucking companies asked Michigan courts to invalidate the fee, claiming the flat fee discriminated against interstate carriers and imposed an unconstitutional burden on interstate trade (in violation of the "dormant" commerce clause). They pointed to the fact that trucks carrying both interstate and intrastate loads engaged in intrastate business less than trucks that only haul within Michigan. State courts refused to invalidate the fee.
Did a Michigan law requiring every truck engaged in intrastate commercial hauling to pay a fee violate burden interstate trade in violation of the dormant commerce clause?
Legal provision: Article 1, Section 8, Paragraph 3: Interstate Commerce Clause
No. In a 9-0 opinion delivered by Justice Stephen Breyer, the Court held that Michigan's fee did not violate the dormant commerce clause because the fee was imposed only on intrastate transactions and did not facially discriminate against interstate or out-of-state activities or enterprises. The dormant commerce clause did not, Breyer wrote, ban such a "neutral" and "locally focused fee."
Argument of Robert Digges, Jr.
Chief Justice Rehnquist: We'll hear argument now in American Trucking Associations v. Michigan Public Service Commission and a companion case.
Mr. Digges: Mr. Chief Justice, and may it please the Court:
This case is a challenge to Michigan's $100 per truck flat annual fee that is imposed on all trucks that are registered to do point-to-point operations in the State of Michigan.
We submit that this fee, this flat per truck fee, has the same impermissible effects on interstate commerce as the two flat truck fees that were struck down by this Court in American Trucking Associations v. Scheiner.
In the American Trucking Associations v. Scheiner case, this Court looked at the practical effect of these fees and found that because of their unapportioned structure, that the fees had four interrelated types of impermissible effects on interstate commerce.
First, the Court found that these kinds of flat fees were a financial barrier against out-of-state motor carriers even coming into the State that imposed the... the fee.
There's no question in this case that the Michigan flat fee has the same kind of protectionist quality.
Justice Souter: Well, it... it does for trucks that want to deliver things within the State of Michigan.
It doesn't for anybody else.
Mr. Digges: Yes, it... it discriminates and it... it has an exclusory effect on trucks... out-of-state carriers that want to compete in the... and bring their trucks across the... the border of Michigan and compete against local carriers for intrastate hauls.
Justice Souter: It would have that... it certainly has that tendency.
Do we have... do we know in fact what the effect is?
Is it deterring anybody?
How many trucks does it affect?
Mr. Digges: There was not a trial below.
So we don't have that fact.
We believe that as in the Scheiner case, these... these tendencies are inherent there.
Because of the structure of the fee, it not only has this effect, it has what this Court called a hydraulic pressure effect, and that is to... for carriers, once they have paid this fee as an entrance fee, to pull their trucks out of interstate commerce and to concentrate them into... in the State of Michigan in the local activities.
And that... in fact, the State acknowledges that.
Below, the State said that motor carriers should allocate or dedicate their trucks to the State of Michigan in order to avoid these consequences.
And even the Michigan Court of Appeals recognized that, saying a local carrier would be discouraged from operating in interstate commerce.
Justice Scalia: Of course, it also... I mean, you say it... it favors the in-state... intrastate carrier because if you're doing nothing but intrastate carriage, you... you amortize the $100 over many more miles, whereas the interstate carrier, much of whose business is out-of-state, doesn't do that.
On the other hand, you can certainly argue that... that this tax discriminates against intrastate carriers in... in another respect, that is to say, interstate carriers who... who do nothing within the State do not pay it, whereas the... the Michigan carrier that does a lot of interstate business but if he does one piece of intrastate business... interstate business, he still pays it.
Isn't that right?
Mr. Digges: Well, Your Honor, I think what... what that's saying... and I know that was the argument made in the Solicitor General's brief... is that you can discriminate against one component of interstate commerce, those carriers that want to actually compete and do intrastate business in the State, as long as you give a benefit to another component of interstate commerce, those who just wish to operate in the... in the State of Michigan in interstate commerce.
Justice Souter: Well, it's not so much that you necessarily can do it, but it... it sort of interrupts the... the kind of the a priori reasoning and you're thrown back on a... on... on a practical effects analysis under Pike.
Mr. Digges: No, Your Honor.
I think what happens is that... that there are the segment of carriers that would like to compete against intrastate carriers.
The fact that other carriers may be getting a break in terms of regulatory fees... and we don't know that to be the truth, getting the other interstate carriers.
It's the Boston Stock Exchange, and I think it was said again in the Scheiner case that... that you can't discriminate among interstate carriers.
And as we pointed out in our brief, you could set up a situation in which a... a State discriminated in favor of interstate carriers in situations or industries where their locals had no interest in competing, but where their... their locals were interested in competing, they could set up a discriminatory system.
So you can protect timber industry in... in Oregon and--
Justice Stevens: But may I ask this question?
Suppose you have an interstate carrier that does 100,000 miles of business in Michigan and you have an intrastate carrier that does a 100,000 miles of business in Michigan.
They both say the... pay the same tax, don't they?
Mr. Digges: --If they each do 100,000 miles of intrastate business in Michigan--
Justice Stevens: Yes.
Mr. Digges: --they would pay the same flat fee.
Justice Stevens: They would both pay the same tax, both the intra and the interstate.
Now, that doesn't sound to me like discrimination against either one.
Mr. Digges: If... if this... if this tax was apportioned based on mileage, it would not be discrimination, but unfortunately, it is not and--
Justice Stevens: No, but I'm just saying if the intrastate and interstate carriers both have the same intrastate mileage, they both pay the same tax.
Mr. Digges: --And we... we would... and again, if this was a mileage-apportioned fee, it would be... it would be fine.
But the fact is as in Scheiner, the out-of-state carriers, because the interstate carrier is... is operating--
Justice Stevens: Yes, but you might have an intrastate carrier that does a smaller amount of mileage, only 50,000 miles, and an interstate carrier that pays... does 100,000 miles.
They both pay the same tax too.
And everybody is treated alike on their intrastate business.
Mr. Digges: --That would be true but that--
Justice Stevens: And the tax only operates on intrastate business.
Mr. Digges: --The factual situation is going to be that the interstate carrier is just not going to have the opportunity to do as much business in Michigan as the intrastate carrier.
Justice Scalia: Well, it seems to me you should have introduced some evidence on that point.
I mean, it... it really is an assumption of your unfairness argument that purely intrastate carriers do significantly more intrastate business than interstate carriers who choose to do some interstate business.
Now, does that strike you as self-evident?
It does not need any--
Mr. Digges: Yes.
Yes, Your Honor.
Justice Scalia: --demonstration?
Mr. Digges: It does strike me as self-evident.
In fact, to courts below... we have... we've made this argument.
We've seen this argument now.
The cases have called it intuitively obvious.
And from the discussion of... in the Scheiner case and from the discussion in the Nippert case, the very difference between interstate and intrastate commerce means that on average the interstate carrier is just not going to use the State's facilities as much as the in-state carrier.
Chief Justice Rehnquist: Wouldn't we be better able to decide this question after a trial rather than speculation on both sides?
Mr. Digges: I don't think a trial is necessary because, as I say, this... this Court quoted Justice Frankfurter clearly, and I think the Solicitor General in his brief says that on average the out-of-state carrier is not going to get as much benefit from this fee.
This is a variable cost fee.
In effect, the out-of-state carrier is having to pay more than its fair share of the cost of the... of the State's regulatory system.
And again, that's something that was accepted in the Scheiner case, accepted in... in the Nippert case.
And the intrastate carrier... every time that it operates in the State, it is using that privilege.
Chief Justice Rehnquist: Well, Nippert was over 100 years ago, wasn't it?
Mr. Digges: I think the Nippert case was from the 1940's I believe.
In any event, as we've been discussing--
Chief Justice Rehnquist: It seems like 100 years ago.
Mr. Digges: --It's--
Justice Ginsburg: Mr. Digges, this... the... the... there was a question about the ramifications of the position that you're presenting.
That is, there are many situations in which there is some kind of licensing fee that is imposed on everyone, the same dollar amount, although some people who are licensed will be doing because in other States and have to get licenses there as well.
The example that was featured in the... in the briefs on the other side of the lawyer who is licensed, say, in Massachusetts and also in D.C. does not get any break on his D.C. Bar admission because he is also admitted in Massachusetts, and in fact, does most of his practice out-of-state, out of the District.
Mr. Digges: --Yes, Your Honor.
I know that... that example was given.
I think there are a variety of flat fees that would be unaffected by this.
There are fees that would be administrative charges and... and if all the State is doing is charging, for example, the cost of a background investigation or the cost of a truck inspection, a fixed cost, then it's fair to ask the carrier to pay a fixed fee or to ask the taxpayer to pay a fixed fee.
With respect to the bar fees, they are obviously different than the trucking industry and... and the taxation of an instrumentality in interstate commerce.
But we think that there may be impracticalities in apportioning a bar fee.
You could have an attorney in his office in Virginia that is working for a California customer or California client that is being... for a case that is being tried in the court system of Oregon, and then for transaction work, he could be working for a customer or a client in... in Missouri for... a multi state.
So it may be difficult to apportion fees.
We haven't really examined that.
But we know from this Court's decisions that... that is easy and can be apportioned for truck fees, and truck fees... this Court said in Scheiner that the technology is now available to look at the extent of the activity and the taxpayer in... in... of the truck in the State, and later on in a subsequent decision said that you can easily track large physical objects over States.
So you can apportion these fees on trucks to their mileage in the State, to their loads, to the gross revenue associated with the--
Justice Ginsburg: But the Scheiner case didn't make a distinction based on in-state activity.
I thought that that... that flat fee was applicable to every motor carrier that went on the roads in Pennsylvania.
Mr. Digges: --That is accurate, Your Honor, but... but nominally Scheiner... for instance, the Pennsylvania Supreme Court in the Scheiner case did say that... did uphold the fee because they said only Pennsylvania could charge for the privilege of using Pennsylvania's highways.
So like a lot of... like all interstate commerce, you can always... as... as the Court said in Nippert, you can always find... carve out a local activity to say that this is going to be the focus of the tax.
I think a problem here is with the... the approach taken by the State and the Solicitor General is they suggest that you go back to the days in which you're trying to draw a line between interstate and intrastate activity, this time not because the intrastate activity is going to be immune from the tax, but this time because you're going to have some separate, different kind of test applicable to something that clearly is subject to Commerce Clause protections, but is... is, in their view, subject to a more lenient Commerce Clause protection.
And I don't think this Court wants to retreat back to the days of having to draw a line between interstate and intrastate commerce and... and then having separate tests.
If there are no more questions, I'd like to reserve the rest of my time for rebuttal.
Argument of James H. Hanson
Chief Justice Rehnquist: Very well, Mr. Digges.
Mr. Hanson: Mr. Chief Justice, and may it please the Court: In contrast to the ATA case, the question before the Court today in the Mid-Con case is whether the fee on vehicles operating solely in interstate commerce is preempted by 49 U.S.C., section 14504.
Justice O'Connor: It's the same fee we're talking about.
Mr. Hanson: It is--
Justice O'Connor: But a different theory of invalidity.
Mr. Hanson: --It is not the same fee.
The... the fee under subsection (1) that ATA is arguing about is an intrastate fee charged only to--
Justice O'Connor: Intrastate.
Mr. Hanson: --carriers that engage in intrastate activities.
Justice O'Connor: Okay, and yours is the interstate fee.
Mr. Hanson: The subsection (2) fee under 478.1--
Justice Kennedy: And your fee applies to all Michigan-plated vehicles.
Am I correct about that?
Mr. Hanson: --That are operating solely in interstate commerce.
Justice Kennedy: Yes.
Justice Souter: Do... do I understand that the two distinctions in what is done with the... or the way the fee is collected and what's done with it is that the... the fee is charged against the... is it the operator as opposed to the owner, if there is a distinction?
Is... is that correct?
Mr. Hanson: All of the fees under subsections (1) and (2) are charged against the motor carrier--
Justice Souter: The carrier.
Mr. Hanson: --or--
Justice Souter: That's the term I should use.
Mr. Hanson: ----motor carrier, not to the owner.
Justice Souter: Which may not be the owner.
And number two, as I understand it, as distinct from the registration fee, this fee goes to a different State department.
Is that right?
Mr. Hanson: That's correct.
Justice Souter: Now, let... that's... that's a premise for a question I want to ask you, and the question is in economic effect, is there any difference really between charging this $100 fee with those differences from the registration fee and simply jacking up the registration fee by $100?
Would there... would there be any economic difference to the... to the public or... or indeed even to the carriers if they simply jacked up the... the registration fee by $100?
Because the... the registration fee is passed on to the carrier, if it's not the owner, and the carrier... it doesn't make any difference to the carrier whether the... whether the State diverts the $100 up front or... or divides the... the registration fee after it's paid.
So is there any economic difference?
Mr. Hanson: Yes, there is and the reason why there is a difference is that the... the fees that are paid for plating are under the... under the International Reciprocity Plan, the registration plan, the IRP.
And that is an apportioned fee.
It is charged to all vehicles, all commercial motor vehicles, regardless of whether it's for-hire or private, regardless of it's in state or... of interstate.
So everybody pays their apportioned amount based on mileage.
Justice Souter: No, but that... that... maybe I don't understand.
That... that tells us what happens to the money after it's paid, but it doesn't make any difference to the person who is paying the money, does it?
Mr. Hanson: Yes, it does.
Justice Souter: Except that he only has to pay in one place, and... and if they--
Mr. Hanson: He pays--
Justice Souter: --increase the registration fee, he'd only have to pay in one place, once.
Mr. Hanson: --But he would only pay the fee based on his mileage in the State.
It is not a flat fee if it is put onto the IRP fees.
Justice Ginsburg: Who... who sets the fee for the plating?
Mr. Hanson: --The... the State does.
It is administered by the Michigan Secretary of State--
Justice Ginsburg: So--
Mr. Hanson: --but I believe all of those are statutory fees.
Justice Ginsburg: --you could have... unlike the... the fee, the $10 fee, that--
Mr. Hanson: The SSRS.
Justice Ginsburg: --the Federal cap, this would... for plating it could be anything each individual State chooses it to be?
Mr. Hanson: In terms of the plating fee?
Justice Ginsburg: Yes.
Mr. Hanson: Each State is free to charge its... its own amount as the plating fee.
Justice Souter: Sure, but it... so... so regardless of what Michigan does with the apportioned amounts, the amount it charges to the... to the owner, in the case of the... the plating fee, is... is simply set by the State of Michigan.
Mr. Hanson: That is--
Justice Souter: Yes.
Mr. Hanson: --that is correct.
Justice Souter: So what... and... and the... the virtue of the apportionment is that the... that the owner or the... or the owner, I guess in this case, does not have to pay fees in 49 other States.
Mr. Hanson: That is correct.
Justice Souter: But he doesn't... it doesn't matter to... that's the value to him.
It doesn't matter to him how they apportion whatever that fee is that Michigan charges.
Mr. Hanson: If they apportion it, however, it is... it is not... it does not... if they put it into the IRP, it is not part of the registration process.
The thing that the--
Justice Souter: But who... I mean, is... that's... that's fine as a matter of administration, but in terms of the... the end effect on the person who has to pay it and on the consumers to whom it is ultimately passed on, what difference does it make?
Mr. Hanson: --Well, the... the difference for the person who is paying it under IRP is that if only 20 percent of their interstate miles as a solely interstate operating carrier, if only 20 percent are in the State, they would, in fact, only pay $20 per vehicle.
Justice Breyer: Can I ask a quick question?
The... there are three things.
Were... were you finished?
Justice Scalia: No, I don't think he... I didn't--
Justice Breyer: Sorry.
Justice Scalia: --I don't understand your answer.
If you were finished, I don't understand.
Justice Breyer: Okay.
Mr. Hanson: If it's... if it is put into a plating charge as opposed to a registration... part of the registration of a carrier for the privilege or the opportunity to carry on interstate trucking activities in the State of Michigan, that is the flat fee that we're talking about.
Under the SSRS we believe that $100 charge exceeds the $10 maximum and is therefore preempted.
If they put it into the IRP, that... IRP is charged against the owner of the vehicle, paid against the Secretary of... paid to the Secretary of State.
It is not a qualification under... for the privilege of engaging in interstate trucking in the State of Michigan.
The SSRS sets up the standards by which a carrier becomes qualified to operate in the State.
Michigan exceeds those standards.
If you put those fees into the IRP fees, then the carrier... or then the owner of the vehicle pays only the proportionate amount based on his mileage in the State.
Justice Stevens: May I ask this question?
Supposing the... Michigan changed its system and said we're going to charge you $90 for... as a plating fee.
We're only talking about vehicles that are plated in Michigan.
We're going to charge you $90 for a plating fee and now we're going to take 10... what used to part of the $100 and another $10 registration fee.
Would that be permissible?
Mr. Hanson: It would be permissible because the... if the $10 is charged to the carrier as part of the registration process, in order to be qualified to engage in interstate trucking.
The $90 would be charged to the owner of the vehicle and would be paid on an apportioned basis under IRP.
Justice Souter: Okay.
What if he said $20 instead of $10?
Mr. Hanson: If he said $20 was going to be put towards the... the State instead of... instead of $100?
Justice Souter: Yes.
Mr. Hanson: And $80 towards IRP?
Justice Souter: Yes.
Mr. Hanson: In that case, that would still violate the... the SSRS, if it is done as part of the registration process, which is what Michigan does.
Michigan... even though you're properly SSRS registered, Michigan still requires, under its SSRS form... it directs the carrier to specifically identify vehicles by make, model, and serial number to obtain a decal by paying $100 for that fee.
If they pay $20, that exceeds the $10 maximum that Congress set up in the SSRS in order to be qualified to operate in interstate trucking in the State of Michigan, as an interstate carrier in... in Michigan.
Justice Scalia: But that... that assumes it's an SSRS charge, and the State denies that it... it has anything to do with SSRS.
Don't you have to establish that it's part of the SSRS program?
Mr. Hanson: I think what you have to do is you have to look at what the... the standards do.
The... the registration standards in the SSRS are set up as the process by which a carrier has the privilege to enter into interstate trucking activities in Michigan.
When you look at the statute--
Justice Souter: Okay, but what... what if the State says, you can enter... enter into interstate activities for nothing?
We're simply going to increase the registration fee by $100.
Couldn't the State do that?
Mr. Hanson: --The State could do that and that would be perfectly permissible.
Justice Souter: So this is pure formalism.
Mr. Hanson: It is not pure form.
Any... what... what Congress did was say that in order to qualify a carrier... they were concerned about the burdens.
When ISTEA was enacted in 1991, they were concerned about the burdens on carriers of individual State registration requirements.
And they sought to... to alleviate that by making it so that carriers could only... would only have to register in one State so they could do business in all States on an interstate basis.
Justice Scalia: Maybe they sought to but maybe they didn't succeed.
As I read the statute, it... it really applies to the... the limitation of $10 only to those fees that are SSRS fees, and these are not.
So maybe there's... there's a hole in the Federal statute.
Mr. Hanson: And I don't believe that's the case, Justice Scalia.
Justice Scalia: You're trying to make the Federal statute work sensibly, but--
Mr. Hanson: Right.
Justice Scalia: --I hate to tell you, but not all statutes work sensibly.
Mr. Hanson: Right.
I think what you have to do, though, is go back and look at what Michigan does.
Michigan has a... a State statute, 478.7(1), that says in order to operate to carry property on an interstate basis in Michigan, you must register with the PSC and you must pay the required vehicle fees.
The registration standards are what they do as in accordance with SSRS: insurance, service of process, and operating authority.
Then you have to pay a fee, and the fee is limited to $10 per vehicle.
In the case of Michigan, those vehicle fees are set forth in two different sections of the statutes.
One is.7(4), which is the $10 SSRS fee.
The other one is subsection... it's 2(2).
That fee is $100--
Chief Justice Rehnquist: Thank you, Mr. Hanson.
Mr. Hanson: --in order for a Michigan-plated vehicle to engage in interstate commerce.
Chief Justice Rehnquist: Your time is expired.
Mr. Hanson: Thank you.
Argument of Henry J. Boynton
Chief Justice Rehnquist: Mr. Boynton, we'll hear from you.
Mr. Boynton: Mr. Chief Justice, and may it please the Court:
The petitioner, American Trucking, began its reply brief with the claim that the central reality in this case is that the Michigan intrastate fee places significant burdens on interstate commerce.
The Michigan Court of Appeals rejected this claim squarely, saying that as a matter of... that that was a matter of pure speculation.
There's no evidence in the record before this Court that the trucking companies'route choices are affected by the intrastate fee.
Furthermore, there is no evidence in the record that the intrastate fee keeps anyone out from engaging in intrastate trucking in Michigan.
Justice Scalia: It sure does make sense to me, though.
Surely it's the case that a company that does nothing but intrastate Michigan business will, by and large, log in many more miles intrastate than a company which does interstate business but part of its business is intrastate Michigan business.
I... I just... it seems to me obvious that--
Mr. Boynton: Well, the Michigan Court of Appeals said that that very well may be the case, but they pointed to the fact that there were no facts to support that finding.
And this is completely different than in Scheiner.
In Scheiner you had a... a trial, you had evidence before the court.
This Court noted that the... the cost to an interstate trucker in that situation was five times greater than the cost to a trucker that was in Pennsylvania.
You just simply don't have those facts here.
What you have is a discrete or a distinct local activity that is something that doesn't affect the interstate commerce.
Justice Scalia: --It... it's the case that a company that does only intrastate Michigan business logs all of its miles on... in Michigan.
No miles outside of Michigan.
Mr. Boynton: That's right.
Justice Scalia: And it seems to me it's obvious that a... a company that does interstate business does not log all of its miles in... in Michigan, and likely... likely... very likely does... does less miles in Michigan than... than a purely intrastate Michigan trucker.
Mr. Boynton: Well, Justice Scalia, that very well may be true, but we don't have any way of... of qualifying or quantifying the burden here because we don't have those facts.
Justice O'Connor: Is it difficult to apportion the intrastate fee based on the number of miles traveled intrastate?
Mr. Boynton: Well, Your Honor, I... I think it is very difficult to do that.
As the United States noted in its brief, they didn't think that mileage would be appropriate because this... this fee doesn't support the maintenance of the highways.
What this fee does is allows trucking companies or allows that truck to operate that truck in intrastate business.
So mileage isn't appropriate.
Our position is that mileage isn't appropriate because it's next to impossible to try and figure out.
What do you compare it to?
Do you... do you compare it to interstate miles?
Do you compare it to a ratio of interstate... intrastate to interstate?
And if you do that, how... how can you come up with a accurate picture of, you know, what the value of that license is in Michigan?
It may be--
Justice O'Connor: Does it make any difference how high the... the fee is set?
If it were $10,000 a truck, does that raise any concerns that are different?
Mr. Boynton: --Well, Your Honor, the Michigan Court of Appeals had taken the position that this was a fee, not a tax, and under a fee... if... if a fee was $10,000, if the expenses matched the... the revenue from it, well, then it... it would be a... could be sustained as a fee.
Now, if were a tax--
Justice Scalia: You... you defend that position, that... that it doesn't violate the Commerce Clause so long as it's a fee not a tax?
Mr. Boynton: --Your Honor, we think that the... if it's a fee and not a tax, the Michigan Court of Appeals applied the correct standard, and that was the standard of Pike v. Bruce Church.
And you would look to the... whether the statute regulated even-handedly, whether it affected a legitimate local--
Justice Scalia: Whenever it's a fee, not a tax, you immediately go to Pike Church.
Mr. Boynton: --I think that... that that was what the Michigan Court of Appeals--
Justice Scalia: I know.
I know that's what they said.
Mr. Boynton: --Yes, and I... I think that's a--
Justice Scalia: I found it very strange.
Mr. Boynton: --I think that's an appropriate manner in dealing with it.
But if you... if you look at the Michigan Court of Appeals opinion--
Justice O'Connor: What makes it a fee instead of a tax other than the court saying so?
Mr. Boynton: --Well, first of all, it provided a direct benefit to the intrastate truckers.
They were able to operate in the State of Michigan.
Second of all, they pointed out that it was in relation to the services granted, being able to do that, and then the third component would be the voluntariness, whether they could agree to... they didn't have to engage in intrastate trucking--
Justice Scalia: You could say the same about a tax.
You could say, you know, you only have to pay this tax if you operate in Michigan.
You don't want to operate; you don't have to pay it.
And you could also say unless you pay the tax, you cannot operate in Michigan.
Does that make it a tax or a fee?
Mr. Boynton: --Well, I think in the Michigan Court of Appeals opinion, it... it was a fee, and I think... I think what we come back to, Your Honor, is the idea is there a specific class of individuals or businesses that are benefitted.
And I think that that's the distinction between a fee and tax.
Also, a tax is a general revenue-raising measure, whereas a fee is not.
And that's another distinction of... of a tax.
And indeed, this Court... in National Cable Industry v. the United States, which we cited in our brief, this Court said as whether an exaction is a tax or a fee depends on whether its purpose is to raise revenue or regulate an industry or services.
One of the things--
Justice Kennedy: I'd like to get back just for a moment--
Mr. Boynton: --Yes, Your Honor.
Justice Kennedy: --to the answer you gave about apportionment because I wasn't quite sure I understood the answer.
You said, well, apportionment is very difficult.
What are you supposed to do?
What are you... what's the base?
Well, and you said, should we apportion against... between in-state and out-of-state, and I would think the answer is yes.
That's the whole point.
Mr. Boynton: Well--
Justice Kennedy: And if we're talking about mileage here, maybe this is something that's eminently susceptible of apportionment.
Now, it may be that administratively this is just too expensive.
That may be... that may be a very valid argument.
But so far as saying that there's no basis for apportionment, I didn't understand your answer.
Mr. Boynton: --Well, I... I... maybe I misspoke myself.
What I really meant to say was it would be very difficult to do.
And in our joint appendix... in the joint appendix--
Justice Kennedy: It would be difficult to do administratively.
But... just because of the cost of collecting all the--
Mr. Boynton: --Well, Your Honor, I think that you got to look at what's the total cost here.
The cost is not only to the administrative aspect by the State, but this imposes another cost on the truckers.
Justice Kennedy: --That... that... I agree that that is expensive.
However, it seems to me that it would be easier to do it with trucks which have miles than with--
Mr. Boynton: But, Your Honor, the problem is--
Justice Kennedy: --than with, say, attorneys or accountants or whatever.
Mr. Boynton: --Your Honor, the problem with that is that this fee, this intrastate fee, does not go to maintain the highways as it was in Scheiner.
They make the argument that it's very easy that the mechanism... they, being American Trucking, makes the argument that it's very easy to just start logging up the miles and... and you have the mechanism there.
But the difference between Scheiner and this case is that in Scheiner you were measuring all intrastate miles, any miles traveled within that State.
And there's a mechanism available administratively to do that.
The IRP requires that.
But here you're not logging all intrastate miles.
You're only logging those miles in the State that involve a point-to-point delivery, from one intrastate point to another.
So you don't... you'd have to get a whole new record keeping or you'd have to keep track of a while different set of miles than you would with respect to the IRP.
And that's the thing that I find striking about this, that the American Trucking Association is basically saying to its members that they want to have them do more record keeping on their part.
Justice Scalia: But the American Trucking Association is... is willing to be thrown into the... into the briar bush apparently.
It certainly involves no... no difficulty for your Michigan intrastate truckers.
All of their miles are intrastate.
And the plaintiffs here say we're... we're willing to... you know, to provide figures showing how much of our carriage was... was exclusively intrastate if you want to apportion.
Mr. Boynton: Well, that may be, Your Honor, but the... the point is... what we're dealing with is a... a fee that has revenues of about $3 million.
And if you have additional record keeping, how much of that $3 million is going to have to be devoted to paying for the administrative costs that are involved?
Justice Stevens: May I ask this question?
Is the fee payable before the... a carrier may engage in business or is it after the carrier has paid?
Is it... is it like a tax that's paid after the year is out?
Mr. Boynton: It's paid before.
They... they have to have--
Justice Stevens: If you had to pay it before, there would be no way to calculate it ahead of time because nobody would have had any mileage.
Isn't that correct?
Mr. Boynton: --I'm sorry.
Justice Stevens: If you have to pay it before the year begins and before you're allowed to engage in the business, you would have no way of measuring the number of miles you're going to travel during the... the ensuing year.
Mr. Boynton: That's correct.
You would have to have--
Justice Scalia: Well, I suppose that's the same thing for the $10 fee for the whatever the acronym is there.
That's paid at the beginning of the year, isn't it?
And it has to be apportioned among the States.
And you don't know how to apportion it at the beginning of the year.
Mr. Boynton: --Now, you're talking about the interstate fee, Your Honor.
Justice Scalia: Right, right.
But I'm saying the same problem arises when you do any apportioning.
Mr. Boynton: Well, it... let me back up.
The reason I asked with you... when you were referring to the $10 fee is because the intrastate fee... we have a $10 component in that as well.
You can obtain a temporary fee for $10 for 72 hours to conduct an intrastate operation.
So the statute in... structurally has some apportionment factor in it.
So you don't have to necessarily buy the $100 intrastate fee decal to conduct intrastate operations.
Justice Scalia: It's like a 3-day fishing license.
Mr. Boynton: I suppose that would be one way--
Justice Ginsburg: How... how does that work in... in practice?
Is it easily accessible?
Suppose the company--
Mr. Boynton: --Well--
Justice Ginsburg: --wants to fill up its truck and... and it said, well, this is going to be... the only haul this season for me, so I want the 3-day permit.
Mr. Boynton: --Yes, Your Honor, you can obtain the permits in advance.
You don't have to have trucks lined up at the border waiting to get a decal or get a permit.
You can purchase them in advance.
So that... that's available to the truckers.
The one thing I should mention, though, is you have to have one... you already have to have one vehicle licensed intrastate.
You already have to have paid the fee on one vehicle, and then you would be eligible to purchase additional temporary permits as the need arose based on seasonal needs or an emergency situation.
So that... that allows the... the statute... I... I would submit to Your Honor, allows some apportioning in and of itself.
Justice Ginsburg: This... this applies only to operations that are both licensed and registered in Michigan.
Is that so?
Mr. Boynton: No.
Your Honor I think is referring to the interstate fee--
Justice Ginsburg: Right, right, yes.
Mr. Boynton: --which is a different fee, which is in the Mid-Con case.
Justice O'Connor: Are you going to address the Mid-Con question?
Mr. Boynton: --I'm sorry?
Justice O'Connor: Are you going to address the Mid-Con question?
Mr. Boynton: I was going to do that right now, Your Honor.
The position that the State of Michigan and the Michigan Public Service Commission has is the SSRS does not preempt the interstate fee.
And the reason for that is--
Justice O'Connor: Well, what's the point of the limitation in SSRS to $10 if the State can impose any additional fee it wants just by calling it a different name?
Mr. Boynton: --Well, Your Honor, I think what you have to realize is you have... when you look at the text of the statute, I think what is very clear from reading the text is that the SSRS does not preempt all State fees and charges on motor carriers.
It only preempts those fees and charges that are specifically related to the registration of that motor carrier's interstate authority.
The interstate fee, or the Michigan-plated vehicle fee here, is not preempted because it's a regulatory fee that does not relate to the registration of the motor carrier's SSRS interstate authority.
Justice Kennedy: Of course, it... it does.
Number one, it's somewhat suspect at the outset because it applies only to interstate travel.
Mr. Boynton: Well--
Justice Kennedy: And... and then the... the other vehicles pay $100 for the... for the in-state fees, and so this seems to me that... that on... on its face shows that it's like a registration fee.
Mr. Boynton: --Well, Your Honor, I think a couple things.
Number one, I think that... I believe that if you look at the structure of the Michigan statute, you'll see that under section 2, which contains both the interstate fee and the intrastate fee, virtually all Michigan vehicles that are plated in Michigan... # the effect of it is that all vehicles that are plated in Michigan will have paid this $100 fee.
And furthermore, if you look at section 7 of the Michigan statute, which is 478.7, that involves the registration procedure.
That's specifically applicable to the registration of interstate authority.
And within that section 7, subsection (4) deals with the payment of the $10 fee for... and... and it's to be made by vehicles that are not plated in the State of Michigan.
Justice Breyer: That's... that's the problem.
Mr. Boynton: Well, that's the argument.
Justice Breyer: That's the problem because here we're dealing with the fee to be paid by the people who are plated in Michigan, and it looks like that $100 is the fee for them.
Well, let me... I have a question.
I'm trying to test this.
Suppose that I have a company in Maine.
And I have... I decide all my... I... I have all Maine plates, by the way.
And I decide I want my... now, let's... one word is license plates.
I'm going to talk about plating.
Another word is the ICC insurance.
Let's call it a decal.
And the third kind of a concept is whatever you refer to in your statute by a fee.
Mr. Boynton: Right.
Justice Breyer: All right.
Now, suppose in Maine what I do with my trucks is I say I want Michigan to be my home State for purposes of... what do you call it?
Mr. Boynton: SSRS.
Justice Breyer: Yes.
And so I go to Michigan, and now I pay all the registration fees here.
Do I get a... a certificate of some kind, a decal or something to show I did it?
Mr. Boynton: No.
Your Honor, I... I... you say that you're a Maine company--
Justice Breyer: Yes.
Mr. Boynton: --but your principal place of business is in Michigan?
Justice Breyer: Yes, yes.
So... that's right.
Mr. Boynton: Okay.
And your question is?
Justice Breyer: Do I get a decal after I go through all this procedure?
You have a whole form.
I pay $6 for Alabama.
I pay $2 for Idaho, and... but... but I do it all in one shopping place which happens to be Michigan.
Mr. Boynton: Okay.
Justice Breyer: Then do I get a little certificate to put on the truck to say I did it.
I... I registered my ICC decal everywhere.
Mr. Boynton: If that vehicle... if the vehicle you're registering is plated in Michigan--
Justice Breyer: No, it's not.
Mr. Boynton: --Okay.
You will pay nothing.
Justice Breyer: I know for Michigan.
But I have to pay.
But Michigan is my... I can't ask the question until I get clear on this.
Mr. Boynton: I'm sorry.
Justice Breyer: Don't... when I... when I go under this... this 49 U.S.C. 14504 and I choose a home State--
Mr. Boynton: That's correct.
Justice Breyer: --and I make all the relevant payments to that State, but they distribute, don't I get a piece of paper saying I did it?
Mr. Boynton: I believe so, Your Honor.
Justice Breyer: Fine.
Now, I'm now plated in Michigan, and I make Michigan my home State for this.
And I go and I make... I say, Michigan, I'm going to give you this big check to distribute, but the amount I'm putting here for Michigan, by the way, is zero.
And you say pay me $100.
I'm not going to do it.
So I haven't paid them the $100.
I haven't paid Michigan everything, but I paid $2 for Idaho.
Do I get the decal or don't I?
Mr. Boynton: To get a decal from Michigan, you have to be Michigan-plated and you have to pay the $100.
Justice Breyer: Excellent.
Now, if I don't get the decal, because I didn't pay the $100, then that $100 is a charge that falls within the SSI.
It is a charge for a decal which shows that I registered the ICC and my insurance because otherwise, if it weren't, you'd give me the decal.
Mr. Boynton: Your Honor, we believe that under the... the section 7 of the Michigan law, there is no fee charged for your SSRS.
Justice Breyer: I'm talking about a fee.
I'm trying to... oh, fine.
If there's no fee charged and I didn't pay the $100 and I didn't pay anything else, you'd give me the decal.
But you said you wouldn't.
Mr. Boynton: Your Honor, you have to... you have to... if it's Michigan-plated, that's the triggering mechanism.
It's not the... that's... that's what triggers the $100 fee.
Justice Stevens: Mr. Boynton, may I just... may I just ask this question?
Is part of your position that the Federal statute does not prevent Michigan from waiving the $10 fee on... for this particular purpose?
Mr. Boynton: Our position, with respect to that, Your Honor, is the fact that under section 7 of the Michigan Motor Carrier Act, 478.7, Michigan has no authority to charge a Michigan-plated vehicle any fee at all.
Justice Stevens: Right.
So that... but you're saying to Justice Breyer then is they have waived the $10 and they do it to a narrow class, those vehicles who are plated in Michigan because they've already charged them $100, a very heavy charge for the privilege of being plated.
Mr. Boynton: Well, I don't know if I'm saying that, Your Honor.
I'm saying that the... there's a zero charge, and then there's... there's another charge with respect to a vehicle fee.
The one thing that I need to point out here is that the SSRS is not vehicle-specific.
It talks about numbers of vehicles, but the Michigan decal fee for... or the interstate fee is vehicle-specific.
You have to identify the particular--
Justice Scalia: Is that right?
Let me... let me... I wanted to ask this question to see whether it's vehicle-specific.
Suppose I have nine trucks.
They're Michigan-plated, so I have to pay $100 for each of the nine.
Mr. Boynton: --Interstate commerce.
Justice Scalia: Now, suppose I... suppose I only pay the fee for eight of them.
Mr. Boynton: And how do you want to use the truck?
Do you want to use it in interstate commerce?
Justice Scalia: No.
I've paid for eight, but I haven't paid for the ninth.
As I read the Michigan law, it says shall not operate any motor vehicle upon or over the highways of this State while any of the fees imposed by this act remain unpaid.
Now, if... if I can't operate the other eight because I haven't paid for the nine, that sounds to me like a vehicle-specific tax.
Mr. Boynton: Yes, it is.
Justice Scalia: I mean... I mean the opposite.
It's... it's not vehicle-specific.
Mr. Boynton: Oh.
Justice Scalia: I've paid for the eight, and I can't operate at all because I haven't paid for the ninth.
Mr. Boynton: Well, I think administratively that... that wouldn't happen.
I... I think once you go--
Justice Scalia: It seems to me how it reads.
Am I reading the law wrong?
It says, shall not operate any motor vehicle while any of the fees imposed by this act remain unpaid.
Mr. Boynton: --I suppose that if the... for... for nonpayment of fees, a motor carrier risks its authority to operate in the State.
Justice Scalia: At all.
So it's not really vehicle-specific.
Mr. Boynton: Well, I... I think it is.
I would disagree with Your Honor.
Justice Souter: Well, the computation is vehicle-specific, but you're using all the vehicles as hostage for the payment of... of any shortfall.
That's what you're doing, isn't it?
Justice Scalia: So it's carrier-based.
Mr. Boynton: Well, Your Honor, I would have to disagree with Your Honor respectfully.
I think that the... that it is vehicle-specific because it identifies the particular vehicle that's involved here.
And I... I think you have to read the statute, the preemption statute, the scope of what preemption has sought to do here, and not all State fees and charges on motor carrier vehicles are preempted.
Justice Ginsburg: Do you place any reliance in this scheme on the fact that the only people subject to it are people who have their principal place of business in Michigan?
Mr. Boynton: No, Your Honor.
The triggering event for the interstate fee is the plating of the vehicle in Michigan.
Justice Souter: And... and anyone can choose to do that?
I mean, going back to Justice Breyer's example, anybody can say, well, I think I'd like to be plated in Michigan even though I operate in... in other States.
My principal place of business is in another State.
Mr. Boynton: Right.
I think all parties have noted, Your Honor, that the... under the SSRS it's much more stringent, more rigorous--
Justice Souter: No.
I'm just asking about what you do in Michigan.
Mr. Boynton: --Yes.
Yes, you can.
Justice Souter: You really can do that?
Mr. Boynton: You can plate wherever you have contacts with the State.
If your principal place of business is in Ohio but you have trucks going to and from Michigan, that... that would allow you to plate in State of Michigan.
Justice Souter: You... you can plate your whole fleet in Michigan under those circumstances.
Mr. Boynton: You could... you can choose where to plate your feet... plate your trucks, and a number of considerations go into that.
It's not just the license plating fees.
It has everything to do... as we noted in our brief, it could have to do with no fault insurance, the weight limits on trucks.
It's an economic decision and there's a number of different factors that go into that decision of where to plate a vehicle.
In conclusion, I would say that the Michigan Court of Appeals correctly decided this case.
And they... they found that the challenged fees in these cases are regulatory fees, that they serve the critical function of protecting the people of Michigan that use the highways.
And the Michigan Court of Appeals should be affirmed.
Argument of Malcolm L. Stewart
Chief Justice Rehnquist: Thank you, Mr. Boynton.
Mr. Stewart, we'll hear from you.
Mr. Stewart: Mr. Chief Justice, and may it please the Court:
The United States as amicus curiae supports the State in American Trucking and the petitioner in Mid-Con.
With respect to American Trucking, in our view the central question in resolving the constitutional issue is not whether it would be possible to apportion the intrastate fee on a more precise basis.
The question is whether the Constitution requires it.
And in the prior cases that we've cited in our brief, both the older cases dealing specifically with intrastate transportation and the more recent cases dealing with authority to engage in other intrastate businesses, this Court has repeatedly upheld the authority of States and municipalities to charge flat fees for the privilege of engaging in the local business within the jurisdiction during the... the relevant period of time.
And that practice--
Justice Scalia: Gee, that seems to me really to go back on... on Scheiner.
And I thought we tried to get away from deciding Commerce Clause questions on the basis of whether it is interstate commerce or local commerce, you know, the original package doctrine and things that succeeded it.
And you're... you're just dragging back in this... this inquiry into whether it's really interstate or... or rather local.
Mr. Stewart: --Well, with... with respect, Your Honor, I think the Court has certainly abandoned the notion that there is a bright, absolute line between intrastate activities which are subject to plenary regulation by the States without any Commerce Clause inquiry and interstate commerce which is wholly immune from State regulation.
The Court has recognized that the question is more complicated than that.
But in cases like Jefferson Lines, for instance, the Court held that the sales price of a ticket for an interstate bus trip could be taxed in... in its entirety by the State in which the ticket was purchased because the sale of the ticket was regarded as a separate, discrete event properly severable from the underlying interstate transaction.
And the case for severance is all the more powerful here.
That is, here we're dealing not with a... an aspect of an interstate transaction, we're dealing with point-to-point hauls within the State of Michigan.
It's true that those may be undertaken by trucks that also do interstate business, and it's even true that in some instances the intrastate load may be carried on the same truck at the same time that it's also carrying goods between the States.
But the intrastate haul is itself a discrete commercial transaction.
To the shipper it's wholly irrelevant, in most instances, that the... the truck is also doing an interstate business.
And to differentiate this case from Scheiner, one of the things that the Court has looked at in the dormant Commerce Clause inquiry is the risk of multiple taxation.
And the Court doesn't just mean multiple taxation in... in the abstract because it's necessarily going to be the case that an entity that does business in many States will be taxed in many States.
Rather the question is whether there's an undue risk of multiple taxation on the same transaction or the same conduct or the same activity.
And that was at real risk in Scheiner because if you imagine a truck that's delivering cargo from Maine to Florida and passing through several States on the way, and it's required to pay a fee that is, in essence, a fee for entering the State, has nothing to do with the mileage traveled within the jurisdiction, it's entirely reasonable to say that the imposition of those cumulative trips... cumulative taxes for a single haul of goods from Maine to Florida is an instance of multiple taxation of the same event.
Here we don't have a problem with that.
The tax is being levied solely on point-to-point hauls within the State of Michigan.
If a particular truck also makes point-to-point hauls in some other State within the calendar year, it may be subject to two taxes, but they can't be characterized as two taxes on the same conduct or the same transaction.
The second aspect of... of Scheiner--
Justice Scalia: Yes, it could.
I mean, if... if this... this truck is making one... one haul, it's carrying some goods from Texas to... to Maine, but some other goods it picks up along the way within Tennessee and just carries it to another place within Tennessee, and then it picks some other goods in New Jersey, carries it elsewhere to New Jersey, you're going to be taxed.
It seems to me it's... it's one trip.
We never used to... used to divide railroads on the basis of well, the ICC has jurisdiction over just the interstate portions and... and the two stops within a State can be regulated by the State.
Mr. Stewart: --I mean, I think you're right that it wouldn't be reasonable to regard the within-Texas segment or the within-Oklahoma segment of a transfer of goods between States as a discrete, separable event.
But if the truck is picking up goods at one point in Texas and depositing them at another point in Texas, again from the shipper's point of view, that's clearly a discrete transaction.
The shipper is unlikely to have any interest in whether the same truck is simultaneously carrying goods among the States.
And it's reasonable to regard that as a discrete event that is taxable by the State in which it occurs.
The other point to make about Scheiner is that even if we assume, as the petitioner argues, that the average interstate truck that makes some point-to-point hauls within Michigan will do so less frequently than the average truck that does business solely within that State, there's still a whole different class of interstate truckers that makes substantial use of Michigan's roads that could be charged taxes on the basis of mileage traveled and they're being let off the hook because the State has chosen to focus this tax on intrastate activity.
Petitioners'response to this is that you can't discriminate against one class and then make up for it by... by discriminating in favor of a different class.
And if this were, to use title VII terminology, a disparate treatment case, we would agree.
That is, if a State overtly discriminates against one class of interstate or out-of-state activities and on the face of the law those people are treated less favorably, then we would entirely agree that the State couldn't make up for it by giving more favorable treatment to a different class of out-of-state entities.
But here the petitioner is making what amounts to a disparate impact claim, and the essence of a disparate impact claim is not that any particular individual has suffered unfair treatment.
The way you prove a disparate impact claim is to show the effect cumulatively upon the class, upon interstate truckers in this case in the aggregate.
And there's really no way to feel any kind of confidence that interstate truckers won't do better as a group by virtue of Michigan's decision to focus this tax on intrastate activity rather than on the basis of mileage, which would sweep in a lot of out-of-state truckers that are not currently covered.
I'd like to speak briefly at least about the... the Mid-Con case.
And in our view the best way of understanding... to... to return to the historical antecedents of the current SSRS provision, in its original form, as enacted in 1965, the statute said it's not an unreasonable burden of... on interstate commerce to require an interstate carrier to register its Federal certificate so along as you do so in accordance with the standards of the ICC.
If you go beyond those standards, it's an unreasonable burden on commerce.
Justice Scalia: I'd like to know the text you rely on.
Mr. Stewart: That was--
Justice Scalia: For... for preemption, the text of the current statute that you rely on.
Mr. Stewart: --The text of the current statute is set forth at page 82 of the appendix to the certiorari petition in Mid-Con, and it's now 49 U.S.C. 14504(b).
And the statute says, the first sentence, the requirement of a State that a motor carrier providing transportation subject to jurisdiction under subchapter 1 of chapter 135... and that refers to interstate transportation... providing interstate transportation and providing transportation in that State must register with the State is not an unreasonable burden on transportation referred to in section 13501.
Justice Scalia: 13501 deals just with SSRS.
Mr. Stewart: No. 13501 is the provision that... that defines the general regulatory jurisdiction of the Department of Transportation and the Surface Transportation Board.
And it basically says these agencies have general regulatory jurisdiction over transportation between points in one State and points in another State and... or between points in the same State passing through another State.
So in... in using that shorthand reference, the Congress just means interstate transportation.
Justice Stevens: May I ask this question?
Because I know your time is short.
Supposing Michigan imposed a new $10 fee per... and it identified it precisely as in order to comply with that statute and then reduced its present plating fee from $100 to $90, would that be permissible?
Mr. Stewart: Well, as long as the... again, to... in our view the distinctive and disqualifying feature of the current statute is that subsection (2) is imposed specifically on vehicles that operate entirely in interstate commerce.
And if Michigan reduced to $90 the extra--
Justice Stevens: I'm not saying... they reduced to $90 the plating fee, but then they enacted a new $10 fee specifically designed to comply with the statute.
Mr. Stewart: --As long as--
Justice Stevens: Could they do that?
Mr. Stewart: --As long as they were still imposing that additional... again--
Justice Stevens: The $90 is for plating.
It said only... only Michigan-plated vehicles pay the $90.
Everybody else... everybody... and everybody also pays the $10.
Mr. Stewart: --As long as that $90 fee was imposed not just on Michigan-plated vehicles generally, but specifically on Michigan-plated vehicles that operate entirely in interstate commerce, we would say that's preempted because our reading of the statute is that basically Congress has said there's a severe limit on what you can do to interstate carriers that you don't do to intrastate carriers.
Justice Scalia: Where does it say that?
Let... let me come back to the... to the section of the statute you're quoting.
You didn't finish the sentence.
It says that it's not an unreasonable burden when the State registration is completed under standards of the Secretary under subsection (c).
Subsection (c) is entitled SSRS, Single State Registration System.
Mr. Stewart: May I answer, Mr. Chief Justice?
Chief Justice Rehnquist: Briefly.
Mr. Stewart: The State doesn't argue that this registration was completed in accordance with this standard.
It argues that the provision doesn't apply at all because this is not the sort of registration requirement that the statute speaks of.
We think it is because it's imposed strictly on interstate carriers.
Rebuttal of Robert Digges, Jr.
Chief Justice Rehnquist: Thank you, Mr. Stewart.
Mr. Digges, you have 4 minutes remaining.
Mr. Digges: Thank you.
I'd like to just briefly cover three points.
First, I believe that... that is accurate to say that the Solicitor General's position is returning us to the pre-Complete Auto days of line-drawing, but more than that, the Solicitor General's position is ignoring the practical effect of these fees on taxpayers.
I think the... the citation to the Peddler v. Drummer line of cases illustrates that.
The only difference between the Peddler cases and the Drummer cases was that in the... in the Nippert case and... and the Drummer case, they looked at the practical effect on an out-of-state salesman and whether that salesman would be discouraged by the $50 fee that was being imposed from coming into the State.
In the Wagner case, they simply said that the fee fell on an essentially local event, didn't look at the form of the fee, didn't look at the form of the fee on the out-of-state salesman.
I don't think it can be disputed that to out-of-state... that out-of-state salesmen would be equally discouraged from coming into a State because a $50 fee or a $100 fee, whether or not they're carrying the goods with them in at that time or whether the goods are later mailed in.
So, again, it is returning to the line-drawing issues, and really there is no test that is made as to, after you... you draw these lines, what the appropriate test should be.
The second point is it... with respect to the administrative practicality of apportioning these fees.
The purpose of apportionment would not be, as in a highway tax, to... to show the amount of highway damage that was done by a truck.
The purpose of apportionment here is simply to show the extent of the taxpayer's level of activity in the State.
It would be like a general revenue tax in which we're trying to allocate the taxpayer's activity to particular States, make sure that that taxpayer is paying its fair share of the State's costs with respect... of the State's generic costs, in this case, generic regulatory costs.
So, again, I think that apportionment would be very easy.
As Justice Scalia said, the trucking industry is willing to take the onus of this.
We bill by the mile.
You could do it on number of loads.
You could do it in a lot... a lot of ways.
And by apportioning the fee, you eliminate the burden and you make the out-of-state carrier, who would be otherwise prohibited from only hauling a load or two... he would then have the ability to haul that load and... and not be discriminated against.
The final area I'd like to talk about a little bit is the need for additional... the need for evidence in this case.
Again, in the Nippert and the Scheiner cases, there... they... they... it was expressly said that there was no need for evidence in the cases because in the general average of instances, the out-of-state trucker will always pay more than the in-state trucker.
And in answer to your question, Justice Stevens, I think it was recognized in those cases that there would be some exceptions to that rule.
There would be a few out-of-state carriers that would operate more heavily in the State than in-state carriers.
But that exception wasn't... wasn't what was going to happen and the most often, and that the average of instances, it would always work to the disadvantage of the out-of-state carriers.
And... and the final point is that with respect to evidence, you have here also a failure of internal consistency test, and this Court has said a number of times that failure internal... of internal consistency is not a test related... it doesn't rely on specific facts but it relies on hypotheticals.
And in this instance, I think there's a very clear failure of internal consistency.
Like in Scheiner, there's a cumulative burden on an out-of-state trucker.
If a trucker wants to operate in intrastate commerce around the country, it has to... and just haul one load in every State, it has to pay 48 times a $100 fee or pay $4,800 in eligible... in order to be eligible to haul in all of those States.
So that illustrates how that's going to balkanize commerce, that that carrier is not going to be able to pay that kind of entrance fee nationwide.
So that carrier will operate in less intrastate activities in... in only a few States or maybe none.
And again, we think that that defeats the purpose.
When Congress passed economic deregulation of the trucking industry, that they wanted to open it up to out-of-state carriers to be able to augment their interstate loads.
Chief Justice Rehnquist: Thank you, Mr. Digges.
Mr. Digges: Thank you.
Chief Justice Rehnquist: The case is submitted.
Argument of Chief Justice
Mr. Hanson: The opinions of the Court in two cases will be announced by Justice Breyer.
Argument of Justice Breyer
Mr. Breyer: We have here mini treat as Michigan Trucking regulation.
The first case is American Trucking Association against the Michigan Public Service Commission.
It involves a $100 fee that Michigan imposes on trucks that engage in local business, intrastate business, and you have to pay it whether you are entirely in local business or say, you are in interstate truck that travels across the nation that you want to do a little local business on the side.
So, the latter interstate group say, this is not very fair, if we just do a little bit of business in Michigan, we pay a $100 and the people who do it all the time, pay a $100.
So, really per load or per truck or per mile, they are paying a lot less, and that violates the Constitution’s Commerce Clause.
Well, we don’t think it does violate the Commerce Clause.
Commerce Clause says that commercial speaking, “all the members of the entire United States have to sink or swim together”, and it imposes a requirement called the Dormant Commerce Clause that forbids states to discriminate against out of state commercial enterprises or out of state commerce that crosses the border, but we don’t find any such discrimination here.
On the face of the statute it makes no instate, out of state distinction, everybody pays a $100.
It applies only to instate domestic transactions that’s what it's about.
It's neutral, locally focused, there is no evidence in the record of serious discriminatory harm in practice.
There is nothing here that shows it significantly deters or distorts interstate trade.
The record suggest that the $100 amounts to a reasonably fair share of the regulatory cost like, inspecting a truck that the $100 goes to defray and it is obviously far simpler to administer a flat tax and it is to have some complicated per mile tax.
At least the record does not show to the contrary.
So, it does not place a financial barrier around the State.
Language that comes from American Trucking Association versus Scheiner, a case on which the truckers heavily rely, we distinguish that case, the reasons I have summarized and others we find no Commerce Clause violation and we affirm a similar determination by the Michigan Court of Appeals.
Justice Scalia and Justice Thomas have each filed opinions concurring in the judgment.