Morf v. Ingels

14 F. Supp. 922, 1936 U.S. Dist. LEXIS 1414

• Court: District Court, S.D. California
• Decided: May 5, 1936
• Docket: 759
• Status: Published

Opinions

STEPHENS, District Judge.

The plaintiff seeks to enjoin state officials from enforcing a state layr which .allegedly invades his rights under the Federal Constitution. Upon issue joined, the case was tried and submitted for decision in a three-judge court.

For several years automobiles have been transported upon their own wheels from eastern points for sale in California. The practice increased so that automobiles, or cars, as we shall hereafter generally refer to them, were being brought into Calif ornia • singly and in fleets of from three to forty. In the fleets which were commanded by experienced men there were single cars and cars that were linked together; the leading one pulling the other. Up to November 29th last about 14,-000 cars had been rolled into the state during the year, and it is safe to say that the number exceeded 15,000 for the full year. The fleet movement, where made up of more than four automobiles, caused certain traffic difficulties, such as passing the fleet and meeting cars while passing it. The fleet would sometimes stop, affecting the flow of traffic. When motor police would stop a car in the fleet, those following would sometimes drive so as to interfere with other traffic. The drivers were not always careful as to their automobile lights, and the towed car sometimes swayed. Some of the drivers were unfamiliar with California traffic regulations and some were fatigued.

Plaintiff is a wholesale dealer of used cars, with his principal place of business in Los Angeles. He sells cars for delivery in other parts of the state and a smaller number for delivery in the North Pacific States. He buys cars and brings them into California singly and by twos coupled and sometimes in fleets of several. The cars are operated directly under his supervision and responsibility and not under contract. Although he has been operating this way for several years, no traffic trouble has occurred in connection with his activity. The specific complaints in this case are, first the demand for a license fee for driving a single car, not in fleet, across the California line from Arizona and, second, demands for license fees for so driving a car with another car attached'. Between 30% and 40% of such imported cars are driven to and .across the California state line singly and not in company with other automobiles. Plaintiff’s business is large and lucrative, but it would appear that the required $15 license fee for each car he brings into California would practically absorb his met profit and would ruin his business. It is a serious situation for him and others in like circumstances.

The Basic Theory of National Unity and Equality of the Laws.

Preferential laws for state industries and the . rivalry for foreign commerce prompted the enactment of tariffs against foreign imports between the states under the old federation. This situation was very detrimental to national peace and unity, and was one of the primary causes for the constitutional requirement that “all Duties, Imposts and Excises shall be uniform throughout the United States” and for the constitutional provision that Congress should have the power “to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes” (article 1, § 8), and that “no State shall, without the Consent of Congress, lay any Duty or Tonnage” (article 1, § 10). Through the Fifth and the Fourteenth Amendments the Constitution has provided for the security of property and for the personal freedom from arbitrary state action under the clauses requiring due process of law and the equal protection of the laws. In many instances the states have legislated in con-' travention of these “equality” principles, a practice certainly to be guarded against with vigilance equal to that we should use against encroachment of national legislation upon the reserved rights of the states. Through the years the courts have met the difficult problems of construing.the enacted statutes under these constitutional rules.

No nice and undeviating line has been discovered marking legislation on the one side in harmony with these constitutional provisions and on the other in conflict with them, but action has been held within a fairly narrow zone of deviation, under new and changing conditions, through the process of classification.

“The equal protection of the laws means subjection to equal laws, applying alike to all in the same situation. * * * While reasonable classification is permitted, without doing violence to the equal protec7 tion of the laws, such classification must be based upon some real and substantial distinction, bearing a reasonable and just relation to the things in respect to which such classification is imposed.” Southern Ry. Co. v. Greene, 216 U.S. 400, 30 S.Ct. 287, 289, 54 L.Ed. 536, 17 Ann.Cas. 1247; Darnell & Son Co. v. Memphis, 208 U.S. 113, at page 120, 28 S.Ct. 247, 250, 52 L.Ed. 413; Continental Baking Co. et al. v. Woodring, 286. U.S. 352, 52 S.Ct. 595, 76 L.Ed. 1155, 81 A.L.R. 1402.

Classification cannot be Sustained.

The California Legislature of 1935 legislated extensively upon the subject of motor transportation. It adopted the Vehicle Code (St.1935, p. 93) and many other acts relating to the subject of motor transportation, including the so-called Caravan Act (chapter 402, p. 1453, St.1935), here under consideration. In section 146.5 of the Vehicle Code it provided for the' registration of cars previously registered outside California. This District Court, sitting as a three-judge court, recently declared this section unreasonable, discriminatory, and void. Asher & Ponder v. Ingels et al. (D.C.) 13 F.Supp. 654. Ostensibly its purpose was to prevent the importation of stolen cars into California; actually it practically prohibited the sale of cars in California that had been registered elsewhere. We have referred to these several acts to show that the Legislature covered the subject of motor vehicle transportation comprehensively and, through separate but related acts, sought to apply, its legislative discretion to all conditions it deemed desirable to treat. The purpose of each act is more easily understood and the expressed purpose in each act becomes more definitely a limitation upon its basic theory and purpose through such information.

The term “caravan” as applied to and used in the act under consideration is a misnomer and leads to misunderstandings. In a metaphoric sense, it has come to mean a considerable number of persons journeying in company by several or many vehicles. Fleet movement of cars may with propriety be termed caravans.

But the so-called “caravan act,” although including such fleet movement of cars as hereinbefore described, is by no means limited thereto. In fact, it straightway defines the term “caravaning” as the movement of a single car upon its own wheels into California to be sold. There is nothing in the act that even refers to caravaning as that term is commonly understood, except that not more than three “vehicles or groups of vehicles” can be operated legally upon the highways unless spaced 150 feet. But this provision applies only to cars for sale that are rolled by highway into' California upon their own wheels. There is nothing in the act indicating that the Legislature has determined that the practice of bringing cars into California for sale in this way is undesirable or that' the act is intended to prevent, limit, or regulate the practice, except as to the spacing mentioned. There is nothing in the evidence that indicates any police problem resulting from the use of the highway except through fleet or caravan formation. Yet the act is specifically directed to each and every car falling within the prescribed specifications, in fleet or not, to wit, entering California upon its own wheels and being for sale.

The Supreme Court in Darnell & Son Co. v. Memphis, supra, quoted the following from Guy v. Baltimore, 100 U.S. 434, 25 L.Ed. 743, with approval: “In view of these and other decisions of this court, it must be regarded as settled that no state can, consistently with the Federal Constitution, impose upon the products of other states, brought therein for sale or use, or upon citizens because engaged in the sale therein, or the transportation thereto, of the products of other states, more onerous public burdens or taxes than it imposes upon the like products of its own territory. If this were not so, it is easy to perceive how the power of Congress to regulate commerce with foreign nations and among the several states could be practically annulled, and the equality of commercial privileges secured by the Federal Constitution to citizens of the several states be materially abridged and impaired.” See, also, Smith v. Cahoon, 283 U.S. 553, 51 S.Ct. 582, 75 L.Ed. 1264.

Most, if not all, of the cases relied upon for the validity of the act are common carrier cases—cases arising from the business of selling transportation upon and along the public highways. In such cases, subject to reasonableness and to the interstate commerce clauses of the Federal Constitution, the state denies, permits, regulates, and licenses such businesses. The permits issued and license fees paid are for continuing operation. The vehicles used are usually large and heavy, burdening the road and its roadbed. The difference is obvious between such cases and the instant one, where only ordinary automobiles for which the highways were primarily constructed are transported over but a few miles of highway and for but a few days (usually not a whole day), under the license permit. Expressions in opinions of courts must be read accordingly. It must always be borne in mind that plaintiff is not a common carrier, accepts no article for transportation for hire, and transports only his own property. It would appear that plaintiff has as good a right to the use of the highways as any one else transporting his own goods; subject, of course, to such police regulation as is reasonable in the circumstances. See Packard v. Ban-ton, 264 U.S. 140, 44 S.Ct. 257, 68 L.Ed. 596; also Buck v. Kuykendall, 267 U.S. 307, at page 314, 45 S.Ct. 324, 69 L.Ed. 623, 38 A.L.R. 286.

There is no doubt that classification to be legal need not approximate perfection, and, as said in Patsone v. Pennsylvania, 232 U.S. 138, 34 S.Ct. 281, 282,. 58 L.Ed. 539, the Legislature “may direct its law against what it deems the evil as it actually exists without covering the whole field of possible abuses.” There are single and fleet movements 'of cars for sale from point to point within the state, and there are other instances of troublesome use of the highways in the state of California as well as across the state lines. Instance the grouping of large vision obscuring trucks with trailers, the practice of hauling from three to five automobiles upon one long truck and trailer, and the trailer living quarters so greatly on the increase. Under the doctrine expressed in the Patsone Case, such instances do not necessarily invalidate a classification. They are eloquent, however, of the fact that the defining elements of the Caravan. Act classification are not elements of the wrong aimed at and do not gather together the common malefactors, but do arbitrarily, and unreasonably embrace innocent actors. It should he noticed that the act extends its burdens to singly driven cars .and two cars coupled together that do not add' any specific police burden. These cars come into sales competition with cars driven wholly within the state for sale.

The License Fee of $15 Per Car is Arbitrarily Fixed and Unreasonable in Amount.

The purpose of assessing a fee for each car admitted, expressed in the act, is to defray the expenses of adequately policing the highways where used in this importing practice, together with the administrative expense of the act. The full sum collected goes into the general state fund. It is argued that the state may charge for the commercial use of its highways. We have already stated that the use plaintiff makes of the highways is not a privilege that will support a tax under the act for other than such extra policing reasonably required by fleet movement. But, aside from that, there is no basis in the act upon which a highway tax can be estimated or calculated. As to purposes of fee, see Interstate Transit, Inc., v. Lindsey, 283 U.S. 183, 51 S.Ct. 380, 75 L.Ed. 953; Kane v. New Jersey, 242 U.S. 160, 37 S.Ct. 30, 61 L.Ed. 222; Sprout v. South Bend, 277 U.S. 163, at pages 170 and 171, 48 S.Ct. 502, 72 L.Ed. 833, 62 A.L.R. 45; Interstate Busses Corp. v. Blodgett, 276 U.S. 245, 48 S.Ct. 230, 72 L.Ed. 551.

There is a provision of the act to the effect that the licensing fee of $15 per car is in lieu of all other fees, but this is meaningless. It merely exempts the importing car operator from paying fees required of carriers defined and provided for in the other motor vehicle acts. But there is nothing in any act that requires the payment of any such fees by plaintiff or persons in his circumstances. The purchaser of the imported car must pay the regular state automobile license fee and must pay the property taxes placed upon the car in the same manner as upon any other car and to the same extent. The $15 fee cannot be bolstered into reasonableness through recital in the act of unreal benefits to the licensee.

Although there is language in the act that might seem to require it, we think no pains need he taken to discuss in full the claim of plaintiff that he need pay a $25 fee (it has not been demanded) before applying for the special permit hereinbefore mentioned nor that he is compelled against his will and against the facts obtaining to assume the status of a common carrier or a carrier for hire. California Carriers’ Act, St.1935, p. 878. The so-called Caravan Act itself excludes such fee, and, if the law attempts to fix upon plaintiff a status not justified by the facts, it goes beyond the power of the Legislature, and is to that extent void as to him. Frost & Frost Trucking Co. v. Railroad Comm., 271 U.S. 583, 46 S.Ct. 605, 70 L.Ed. 1101, 47 A.L.R. 457. It does not affect the other part of the statute, however, and is severable. For the theory of levying tax- on vehicles using highways, see Interstate Transit, Inc., v. Lindsey, 283 U.S. 183; 51 S.Ct. 380, 75 L.Ed. 953; Clyde Mallory Lines v. Alabama, 296 U.S. 261, 56 S.Ct. 194, 80 L.Ed. -; Interstate Busses Corp. v. Blodgett, 276 U.S. 245, 48 S.Ct. 230, 72 L.Ed. 551.

We have examined the California Carriers’ Act (chapter. 223, p. 878, St.1935) and find that it does not affect plaintiff in any but in the most incidental and inconsequential manner, if at all.

We come directly to the reasonableness of the license fee. As shown by the evidence in this case, during the year 1935 a great increase of automobile use of the highways occurred, and for that year at least 15,000 cars were brought into the state for sale under conditions hereinbefore recited. The mileage for such cars within the state and the operation upon the highways under the permit is, of course, very little. They go only to the market place. The increased personnel of motor policemen along the routes used by these fleets, for care of all traffic conditions during 1935 up to date of hearing, amounted to but six, although a few more could be used handily. The salary of such officer averages around $200 per month. A few inspectors at the border offices have been put on since the passage of the law, and there is some clerical expense. Even if the whole increase of expense just indicated were charged to “caravaning,” it would seem mathematically demonstrable that the figure of $15 per each imported car was not fixed upon any basis of compensating the state for policing and for administering the act. The evidence would indicate that ten additional employees would more than take care of the situation, including the generally increased traffic. Allowing $200 per month each, the sum would amount to $2,400, or for ten men $24,000, per year. Fifteen thousand cars at $15 per car would produce $225,000. Or, looking at it in another way, the distance from border point to point of destination can be traversed in less than a day. The $30 charge for each operating unit of two cars would pay for a special police patrol, and even under such regulation a great profit would result. Of course, there is no contention that such a service is required. There can be no doubt but that the license fee is excessive and arbitrary.

The Deputy Attorney General argues that the highways belong to the people and that their use for commercial purposes can be charged for, and he sought to show comparative railway charges for transporting automobiles. But this evidence has no materiality here. If the charge of $15 is intended as an equalization of transportation costs between railroads and highways, it rests upon an unsupportable premise.

The unreasonableness of tlie license charge discriminates against the plaintiff who brings cars into the state for sale in favor of those who deal in used cars obtained from within the state. The charge bears no reasonable relation to the purposes for which it is collected, and in practical effect constitutes a protective tariff and is unconstitutionally burdensome. Interstate Transit, Inc., v. Lindsey, 283 U.S. 183, 51 S.Ct. 380, 75 L.Ed. 953; Young’s Market Co. v. State Board of Equalization (D.C.) 12 F.Supp. 140, and cited authorities.

The clear statement of principles in Baldwin v. G. A. F. Seelig, Inc., 294 U.S. 511, at pages 521, 523, inclusive, 55 S.Ct. 497, 500, 79 L.Ed. 1032, 101 A.L.R. 55, may be related to the instant case. Mr. Justice Cardozo likens the attempt by the New York Legislature to fix milk producers’ prices in Vermont on a par with those of New York, as a condition of its sale in New York, to customs duties. He says: “Such a power, if exerted, will set a barrier to traffic between one state and another as effective as if customs duties, equal to the price differential, had been laid upon the thing transported. Imposts or duties upon commerce with other countries are placed, by an express prohibition of the Constitution, beyond the power of a state, ‘except what may be absolutely necessary for executing its inspection Laws.’ Constitution, art. 1, § 10, cl. 2. * * * ‘It is the established doctrine of .this court that a state may not, in- any form or under any guise, directly burden the prosecution of interstate business.’ International Text-Book Co. v. Pigg, 217 U.S. 91, 112, 30 S.Ct. 481, 487, 54 L.Ed. 678, 27 L.R.A.(N.S.) 493, 18 Ann. Cas. 1103.”

To burden the movement of plaintiff’s own property with a substantial tax, when that sum bears no reasonable relation to the express use of and cause of the levy, constitutes nothing less than a customs duty. To declare such tax legal as an exception would, to use the apt words of the justice above quoted, “be to eat up the rule under the guise of an exception.” Other cases of interest by analogy are Voight v. Wright, 141 U.S. 62, 11 S.Ct. 855, 35 L.Ed. 638; Brimmer v. Rebman, 138 U.S. 78, 11 S.Ct. 213, 34 L.Ed. 862; Webber v. Virginia, 103 U.S. 344, 26 L.Ed. 565.

The state cannot exact an arbitrary toll for revenue from any class of highway users. Interstate Transit, Inc., v. Lindsey, supra; Sprout v. City of South Bend, 277 U.S. 163, 169, 48 S.Ct. 502, 72 L.Ed. 833, 62 A.L.R. 45.

Judgment will go for plaintiff. A permanent injunction will issue and the bonds given under the temporary restraining order will be exonerated.