Dunbar-Stanley Studios, Inc. v. Alabama

PETITIONER:Dunbar-Stanley Studios, Inc.
RESPONDENT:Alabama
LOCATION:Stanley’s Home

DOCKET NO.: 376
DECIDED BY: Warren Court (1967-1969)
LOWER COURT:

CITATION: 393 US 537 (1969)
ARGUED: Jan 16, 1969
DECIDED: Feb 25, 1969

Facts of the case

Question

Audio Transcription for Oral Argument – January 16, 1969 in Dunbar-Stanley Studios, Inc. v. Alabama

J. Edward Thornton:

Now push the Drummer case.

This is the Drummer case, this was just different.

The Drummer case is the states have sought to license the solicitation of orders in the state out of this series of events.

This Court has unanimously so far as I recall held that you cannot split them up into solicitation and put the tax on that — where there is this interstate activity throughout.

Abe Fortas:

Well it seems to me that the complicating factor here is that this could be regarded as a J.C. Penny operation.

J.C. Penny rounds up the children and does the selling and delivers the photographs after their maid, as I recall the facts here.

That’s correct.

Abe Fortas:

And that — and in that sense it is different from the typical Drummer case.

J. Edward Thornton:

True.

Abe Fortas:

And then you have these out of state photographers who come in and expose film and send the film out of state to be developed.

And they the film, then the photographs are sent back to J.C. Penny, so you have them.

Situation here that is a little complicated in the intermingling of intra and interstate aspects a little more than mingling than some of the others on that book.

J. Edward Thornton:

That’s true.

Now of course, response number one, this case doesn’t involve J.C. Penny as the court is aware, the assessment was made against us.

And in the appendix it’s pretty clear that the state was very anxious to see to it that no agency was developed between Penny and tax payer and this is true, there isn’t any agency.

But this is a slightly different case than the Drummer case as you say where he has no claim.

Abe Fortas:

Well the tax is not imposed on J.C. Penny, but the facts inevitably and inescapably involve J.C. Penny.

J. Edward Thornton:

Well, maybe Your Honor recalls the city case, which is before this Court and we went off on that point there and we don’t think we should have gone off on it.

But nevertheless, there they insisted that my suit for declaratory judgment to hold up this, fifty dollar a day license, which of course this is destructive.

I mean this stands we are gone, we can’t sell it up for $0.59 maybe pictures to make that kind of a license.

But there, after we got to court they met us by saying well you’re the wrong person and we said, no, you tried to put in jail and we are the ones that’s interested, we are the ones that’s going to pay it and this is not the J.C. Penny, it’s not quite like a leased section of a department store, where there, you know the department store will get an overall catch all license and then they will lease out various parts of the departments to.

But we are not quite that, we come and go, we come and go at Penny’s.

Abe Fortas:

You’re not quite, but somewhat.

J. Edward Thornton:

Well somewhat, yes that’s true, but now I would like to emphasize one thing, we deliberately do business this way.

That is to say we want a local business where a disgruntle customer or anyone like that has someone to go to.

We are not unaware of the fact that there has been criticism of transient photographers, just as there has been criticism of transient operators of any kind, where a man spends his money and can protect himself.

So we are very proud of our product, we think we have a good baby picture.

But we want the customer to know that he’s got someone with this sort of reputation that J.C. Penny has, that he can come to see about us and this is, we deliberately encourage that but we want to, because we think that’s good.

Lewis F. Powell, Jr.:

Your case rests particularly on the fact on your claim, rests particularly on the fact that they cannot license you to do business.

Suppose they were simply taxing, imposing a tax on the part of the activity done in Alabama, would your argument be the same?

Lewis F. Powell, Jr.:

Are you claiming that here they are actually licensing interstate commerce by putting the tax on the whole thing?

J. Edward Thornton:

Well, yes sir.

Lewis F. Powell, Jr.:

When there is only one part of it taxable in Alabama?

J. Edward Thornton:

Well we of course, we say the one part is not taxable, but that is correct.

We are saying that the licensing us —

Lewis F. Powell, Jr.:

What about a railroad, is that interstate business?

J. Edward Thornton:

Well —

Lewis F. Powell, Jr.:

And they can tax the track and the state in various other product.

J. Edward Thornton:

And of course an ad valorem tax I don’t — that would be something else of course.

Gross receipts tax, I’m not sure about those. Certainly a net income tax, I’m not sure about those.

But here it is a license and it is a license on the doing of this kind of business and so —

Lewis F. Powell, Jr.:

So it’s a matter of state business, is that your claim?

J. Edward Thornton:

That’s correct.

Lewis F. Powell, Jr.:

And the putting up a bar to that doing an interstate business, there should be a tax.

J. Edward Thornton:

That’s correct.

Lewis F. Powell, Jr.:

You know part of it, its in Alabama?

J. Edward Thornton:

That’s correct.

Lewis F. Powell, Jr.:

Which would bar them.

J. Edward Thornton:

That’s correct.

Byron R. White:

Well, as I understand, you say that you are not making an equal protection clause argument at all?

J. Edward Thornton:

That’s correct, we are not.

We are not.

Byron R. White:

So you don’t rely on the distinction between intenerate photographers and fixed location photographers.

J. Edward Thornton:

No, expect in so far —

Byron R. White:

I understand that you’re saying it is discriminatory against —

J. Edward Thornton:

As a client in this case.

But, that’s the only discriminatory feature that we are raising is the discriminatory because of the application in this case.

Byron R. White:

But you don’t say that it’s discriminatory against itinerant photographers, except that it discriminates against those who are interstate commerce.

J. Edward Thornton:

Well, it discriminates against those who send exposed film in the state, out of the state.

Yes sir.

J. Edward Thornton:

But that’s the only part and but the objection is commerce clause, you see this is discriminatory against interstate commerce and so far as I know that has never been recognized.

Byron R. White:

Why aren’t you making any potential argument?

You didn’t raise that in the court below?

J. Edward Thornton:

Well no.

But we are interested in the commerce clause.

This is point under which we developed the case and the discriminatory aspect of it is by reason —

Byron R. White:

Assume that you say that — do you say that the clause, that the law does not discriminate against itinerant photographers?

J. Edward Thornton:

Well, the —

Byron R. White:

Let’s assume there is an itinerant photographer solely based in Alabama.

Assume you were, would you say that you had a valid equal protection argument against this tax, because the tax is fixed for location photographers less than it taxes itinerant photographers?

J. Edward Thornton:

No.

I would not read.

I state that the Alabama can make a difference between itinerant and fixed location photography.

We raise no point on that.

Byron R. White:

Well then why would you say it’s, aren’t you really then crowded back to you first, your very first point?

J. Edward Thornton:

Well, this —

Byron R. White:

It’s really license on interstate commerce because it isn’t discriminatory, without reason anyway, is it?

J. Edward Thornton:

Well, this of course is the plot we want most of all, but if I may on page 27 of the brief, the reason they held The Supreme Court of Alabama held, the reason they held that we were subject to a transient or itinerant license, was because it says this, true in the branch operation, this had to do with Olan Mills case, page 27, there is a fixed location. But it sends its film back to Chattanooga to be processed and the pictures are ultimately made in Chattanooga.

Now on this basis you see it was because of this interstate activity that the transient or the $5 a week license is imposed rather than the $25 a year license.

Now we say this is a direct discrimination against interstate activity.

Now as to the equal protection clause, as to the state making a difference between itinerant photographers and resident photographers, we may make no point on that.

Have I made myself reasonably clear?

I would reserve the remaining time for rebuttal.

Earl Warren:

Mr. Burton.

William H. Burton:

Gentlemen, in biased instanced here, it seems that the appellant rather accuses the State of Alabama and the City of Mobile of entering into some kind of evil conspiracy to put this company out of business.

But actually the tax levied by the state has nothing whatsoever to do with the tax levied by the city, they are two separate and distinct entities and there is no evidence in the record that there was any kind of collusion or conspiracy here between the state and the city.

Now as any if there, where there is a confusion it is in this field of interstate commerce.

And as I read the cases, if there is one universal principle that applies to all cases it is that each case stands on its own shoes, on its own facts.

Now this particular case, not in this case but in similar cases where the state has assessed this licensed action, against photographers operating for Olan Mills, the Supreme Court of Alabama on not one, but on three occasions has held that this tax is directed at the photographer and the individual photographer.

That is a person who comes in and takes the picture.

William H. Burton:

Now we disagree with counsel for the appellant that the Court has said that it’s now sending the films out of the state.

If that were true, I wouldn’t be here arguing the case.

But what the Supreme Court of Alabama has held in defining the characteristics of this tax.

And its authoritative meaning is that it’s directed at the individual photographer and on his activities in the state more or less conducting the setting and taking the picture.

And if you read the license, it says, actually this license is levied under title 51 that’s the revenue code of the state, section 569.

Now the first part of the statute relates to fixed locations or photography gallery.

Then there is a last sentence there which levies a separate and distinct license on transit or travelling photographers.

And actually it reads as follows, for each transit or travelling photographer $5 a week.

Now in the case of Graves versus Alabama, that was the case involving one of Olan Mills photographs and it was a criminal case in the circuit court and in that case when it got to the Supreme Court of Alabama, the court held that the license was directed at the photographer as the statute says each travelling or transit photographer $5 a week.

Byron R. White:

Does your court characterize this license tax is a privilege tax?

Isn’t a license deemed to amount to giving a personal privilege to do business?

William H. Burton:

Your honor.

Byron R. White:

I mean it’s not an — for inspection or for, it just for the privilege of doing business.

William H. Burton:

It’s clearly a license task, it’s a task.

And it’s not claiming the strictly speaking a license, it doesn’t give anybody the right to do anything, if you do this business.

Byron R. White:

Without that they can’t do business in Alabama.

William H. Burton:

Right, right that’s right.

Byron R. White:

It is for the privilege you are doing business in Alabama.

William H. Burton:

It’s for the privilege of doing this business in the State of Alabama and districts.

Potter Stewart:

Which business, what sector?

William H. Burton:

This business is, business as a transit or travelling photographer.

Potter Stewart:

So what’s the business for transit?

William H. Burton:

Well our court has to find that in this Graves case.

Graves versus Alabama.

Potter Stewart:

As being.

William H. Burton:

As being a photographer, who goes out of state from county to county where he has no fixed location.

Potter Stewart:

And does what?

William H. Burton:

And takes pictures and conduct settings.

Potter Stewart:

Does he stops with that?

William H. Burton:

Yes and —

Potter Stewart:

Conducts settings and develop the pictures and all the rest.

William H. Burton:

No sir, what our court has said that this license is directed at is the photographer taking the picture conducting a setting.

And gentlemen that requires a place in which skill is an odd in itself and I have always looked on a photographer as somebody who takes a picture.

The proof readers and the film developers in North Carolina or Tennessee that’s not what this license is, if it’s the photographer, the individual photographer and this assessment was made against Olan Mills company.

Thurgood Marshall:

What makes the difference between the transit and the fixed, both are exact same thing right?

William H. Burton:

No sir, we say that there is a quite a distinction between the two, we say that the license on a fixed location, on a photograph gallery is another place and that this license —

Thurgood Marshall:

Why?

William H. Burton:

Sets up or not.

Thurgood Marshall:

If I understand you correctly, that you said a moment ago that a photographer has great expertise in taking the picture.

That’s what your licensing, that’s what you said a minute ago.

William H. Burton:

Yes, sir that is true.

Thurgood Marshall:

Well, is there a difference between the expert photographer taking a picture in a fixed location and an exert photographer taking a picture in the exact same location but moving on.

William H. Burton:

I would say no sir, not in the operation of the camera and taking the picture, I would say it would all be the same recognize –

Thurgood Marshall:

Now why do you charge the itinerant more if it’s the same action.

William H. Burton:

Well, that depends whether the itinerant or the transit has charged more.

If he stays one week it’s only a $5 but if a person —

Thurgood Marshall:

Why is it that the itinerant that works 52 weeks is charged more than the stationary man who works 52 weeks?

William H. Burton:

Well, we say they are in different classes or sub-classes and that the state.

Byron R. White:

Your law puts them on different classes but what about has your court ever explained or gone into the basis for the different classification and imply the different class.

William H. Burton:

I believe Your Honor in this Graves case, they touched on it, I don’t know how deeply, I don’t recall that part of the case but I believe that they did touch on that and in the Graves case they did point out that this transit photographer license, it applies to those who come from without and from within the state alike.

In other words, if a photographer has a fixed location in Montgomery and it’s been so applied.

And he sends photographers out in Monroe county and Mobile county, Jefferson or some other county in Alabama.

Then his photographers where they don’t have a fixed place — if they pay this license are supposed to stay —

Hugo L. Black:

Suppose in their state taxation system of photographers, suppose there is a large photographers business and he has half a dozen people in there who take the pictures, do you charge him one, charge them one or half a dozen licenses.

William H. Burton:

In that case your honor, the license would be on the photograph gallery and it would only the one license that’s true.

Hugo L. Black:

I thought you told us a little while ago that this was a personal that it was directed against the person who takes some pictures and if that is true why wouldn’t you charge him six license fees instead of one if he had six people taking pictures.

William H. Burton:

Your Honor the — our reasoning there is that they have two separate and distinct licenses.

In out of —

Hugo L. Black:

What are the two separate and distinct licenses?

William H. Burton:

Well, we say that the photographer who has a fixed place of business in a different place from the travelling photographer that goes from county to county.

William H. Burton:

That’s a different, you might say operation and it’s a different class or subclass but this court has said that the Congress and the State Legislatures can for the purpose of taxation, they can set up classes and even subclasses.

Hugo L. Black:

What is the state’s interest in separating these two that you just mentioned for purposes of taxation.

There must be some reason for the classification, mustn’t there be?

William H. Burton:

Your Honor, I would like to say this along that line in explanation is that in the case that the fixed location.

If you have five places of business in one city, you would have to have five different licenses under the general provisions of the revenue code relating the licenses and more particular Title 51, Section 831A.

If you got ten places of business, fixed location places of business then you would take ten licenses.

Actually the traveling photographer can take for week on $5 could operate through out every city in the county whereas the photographer with the fixed location would have to pay a license fee for separate place of business.

Hugo L. Black:

Let’s see if it’s in the last sentence here.

Suppose the photographer had just been into six counties, takes pictures in six counties.

He develops the pictures in those six counties, I suppose there is another photographer who takes the pictures in six different counties but he does not develop them in any of those counties but sends them all to be finished.

Could you charge him a license fee, this last one which would buy him from doing that business, if he didn’t pay the license for the whole thing?

William H. Burton:

Your honor in that case, if they have no fixed place of business, I think you would charge them both this $5 license just saying whether they develop the film in the county or well they send it out you would charged him the same licenses of $5 a week.

Hugo L. Black:

Well I gathered for this case up-to-date may be its wrong, that in the main what they are complaining about is this.

They send a representative to finish, he takes pictures with the understanding of those will be sent out of the state, develop and brought back and they complain that on that business you are charging them a license which would forbid them to do business without it and you could prosecute them, couldn’t you not?

William H. Burton:

Your Honor, you can prosecute, penalize a person but not paying any tax, whether it’s in Oklahoma, Alabama anywhere else everyone one of these taxes —

Hugo L. Black:

Taxing, if it can be shown that what your tax is, is the tax directly on the other interstate commerce which says you got to pay this much tax to do business in the state and interstate commerce.

How you are you doing that?

William H. Burton:

Your Honor we say that we are not because of the fact that this tax is not an entrance fee.

In other words — an entrance fee.

It’s not a license –.

Hugo L. Black:

Then separate people who had in two states in interstate commerce if they don’t pay it, isn’t it?

William H. Burton:

Your Honor, they are supposed to pay the tax.

But it wouldn’t keep them out of the state.

Hugo L. Black:

Wouldn’t keep them out, will they prosecuted for —

William H. Burton:

Yes, but that would be not for paying the tax, it wouldn’t be a mean.

Hugo L. Black:

It would be not for paying a tax on doing business in the interstate commerce, that’s what I understand is that your argument?

William H. Burton:

But the same person located within the state would also be –.

Hugo L. Black:

Well that’s a different question.

William H. Burton:

Yes.

Hugo L. Black:

Can you tax interstate comers at all, if you put a tax on it, if they had engaged on interstate commerce.

William H. Burton:

I have agree — whole heartedly

Hugo L. Black:

Well I can’t quite understand —

William H. Burton:

Yes and that’s what I’m trying to find out.

Hugo L. Black:

Why wouldn’t be doing business in interstate state commerce, they went to (Inaudible).

William H. Burton:

Yes.

Hugo L. Black:

Took the picture, and then sent it all to be developed and then sent back.

Why wouldn’t that all be a part of the interstate commerce transaction.

How can you divide it, apply to the argument in the segment and force them to pay the license to do that business.

William H. Burton:

Your Honor, it had been held by this court and I would think you’ve written some of the opinions that I read, that where you can realistically separate activities and localize them that you can validly tax them and —

Hugo L. Black:

That’s right.

William H. Burton:

And that’s exactly our contention in this case that and another point right there — this court in United Gas Pipeline versus City of Mobile held that it was a prerogative, I won’t say prerogative but the right of the state courts to define the meaning of a tax and tell what the characteristics of a tax are and in that case this court sent that case back to Alabama for the state court to define the meaning of the tax.

Now Mr. Justice Douglas, has said that the case had been back, he said that the license tax in that case was valid at the time it didn’t need to back.

Mr. Justice Harlan, in that case he says that it didn’t make any difference whether it was an entrance fee or not, he didn’t think that resolved the constitutional question involved but this court.

Hugo L. Black:

So which one had the most —

William H. Burton:

Well, the majority sent it back. The majority of the court sent that case back to Alabama.

Byron R. White:

What was the citation to that case.

William H. Burton:

Sir?

Byron R. White:

What was the citation to that case?

William H. Burton:

Your honor, I have the —

That’s United Gas Pipeline versus Ideal Cement Company, 369 US 134.

Now there is also a case by the Supreme Court of Alabama, when the case was sent back, the Supreme Court of Alabama actually defined the characteristics of the tax and it held that that tax was a local tax, although United Gas Pipeline Company was engaged in transporting gas in interstate commerce, that was their business and selling it.

But they held that this license levied by the City of Mobile on the selling of natural gas in Mobile was a local license.

And you could realistically separate that activity from United’s interstate activities, that’s exactly our argument in this case.

Also another case that we rely strongly on is the Caskey Baking case, whereby license was levied on bakeries, I believe those selling bread to people, retailers, licensed retailers in the State of Virginia.

And the bread was baked in West Virginia and transported over the state land.

It’s more or less one of the Peddler cases but this court held that license tax directed at that local activity of selling the bread and delivering it half of their trucks was sufficient while the license tax validly attached.

Another point in the Graves decision, the Supreme Court of Alabama has held that inherently this tax does not discriminate because it applies equally to all transit photographers, whether they come within or without the state.

And clearly this type of operation for the appellant relies mainly on the Drummer cases and I suppose the leading case in that line is Nippert versus Richmond but there the license was levied on solicitations and the orders was sent to Washington I believe the Nippert represented a Washington garment manufacturing company and the court held that the solicitations were clearly in interstate commerce and that license could not be valid or levied in that case.

Hugo L. Black:

Mr. Burton, what is that case — if you make mistake in relying on something I’ve written in this field.

William H. Burton:

Well, that case —

Hugo L. Black:

Our case is that.

William H. Burton:

Your Honor, I want to point out one thing in that case it was brought out that before you could secure the license in that case that you had to get a permit from the department of public safety, now that’s not so in this case.

And along the line of your question that, where that was more or less an entrance fee, this license if you go out to the probate Judges’ office and you put the money down you can get everybody is entitled to buy this license, I don’t care whether you end the business or not, this is a no respect an entrance fee or really a permit or a license.

In fact the probate Judge will welcome you with open arms, if you come up with the money and he will issue you the license.

Thurgood Marshall:

And if you operate.

William H. Burton:

Sir?

Hugo L. Black:

I thought you had said for the license, am I wrong?

Now I understand United says not a license fee but I thought you just had said it was —

William H. Burton:

It’s a license tax, Your Honor, I have used that word and I had used rather loosely but this is a license, it’s a tax and is on, and the Alabama court has held that it’s only doing a business, it’s not a right to do business.

If you don’t apply this license in other words you can come in to the State of Alabama and you can do business and your contracts are valid.

It doesn’t keep you out of the state —

Hugo L. Black:

Well it does put you, does put you in jail.

It does put you in jail.

William H. Burton:

Well, Your Honor —

Byron R. White:

This was pretty effective business.

William H. Burton:

That’s what it left it yes.

But I say this, we have provisions in our sales tax and use that and income taxes that have the same provisions and Oklahoma does, and Colorado, any other states and the Federal tax laws, I mean if you don’t pay any tax.

Byron R. White:

Because the statute says, for any person or a corporation engage in any businesses, they shall pay them the probate fee which is or the tax which is a — and the tax is there and saying that every license is a personal privilege to transact the business.

That’s what it said.

William H. Burton:

The statute does say that Your Honor, that is very true.

I mean its, no disputing that, that’s been black and white but as a matter of applications actually these business —

Byron R. White:

This business some people will —

William H. Burton:

Well I tell you, it’s not the duty of the state or the Federal government to catch any tax pleas–

Byron R. White:

Well, the claims inside the — didn’t know what the businesses are and giving your license —

William H. Burton:

Well I would think that, that would be pretty bad.

Hugo L. Black:

As I recall it the NAACP failed to pay a $10 license.

I thought that was the prosecutor.

William H. Burton:

Well Your Honor I don’t what the license it was.

Hugo L. Black:

Still not — I think you’d find it was 100,000.

William H. Burton:

Yes.

William H. Burton:

I don’t know what license, I don’t believe that came within the scope of these business licenses.

These are purely business or occupational taxes.

Hugo L. Black:

I was thinking it’s what that was rule.

William H. Burton:

It could be, I’m not familiar with the case Your Honor.

Hugo L. Black:

But it indicated a little danger not paying the license tax.

William H. Burton:

Yes.

But actually this wouldn’t cause you to — your contracts to be void or anything.

You could do business in the state, but — and I will say that as a matter of application, the criminal provisions are not used very often by the Department of Revenue.

Thurgood Marshall:

Was it the Olan Mills case?

William H. Burton:

Sir?

Thurgood Marshall:

The Olan Mills case was a criminal case, wasn’t it?

William H. Burton:

No sir.

Leon Graves versus State of Alabama was a criminal case.

And Leon Graves was a agent or photographer for Olan Mills.

Thurgood Marshall:

But you said they don’t usually do it and against that I have example of when they actually did it.

William H. Burton:

Yes.

Well that’s true that in the Leon Graves case they did invoke these penal statutes, yes they did.

But in present time they very seldom bring a — and it’s really frowned on. They try to bring several actions to recover these licenses.

Thank you gentlemen.

Earl Warren:

Mr. Thorton you may.

J. Edward Thornton:

I just have a word.

I think the facts in the Graves case may be of some importance.

Olan Mills at that time was engaged in a two-stage operation.

It solicitors who went through the state soliciting orders.

It had a photographer who followed.

Now when the photographer came through, they arrested him for not having a transient photographer’s license.

Question number one was, is the mere exposure of film engaging in the business of photography, and the Supreme Court of Alabama held it was.

It being so essential, a part of the photography business that a license owned photography generally would apply to the mere exposure of film.

Now it’s that holding that comes over into these cases here, where they say, well now we have already held that the license is only on, now that’s not quite true, it was true in the Graves case, because that’s all Graves did.

But they’ve now come along and said, but that’s all you have to do in order to be subjected to the license.

J. Edward Thornton:

This is true, but it’s true in a sort of a backhanded fashion but nevertheless it does show that the license is on the mere exposure of film and we’re taking the position that when that is connected with the entire transaction, which goes across the state line, that the state is not —

Potter Stewart:

Now let me ask Mr. Thorton, if I understood Mr. Burton correctly, if you had a photographer based in Montgomery and he sent photographers around this — among the six adjoining counties, but all of the work was done in the state of Alabama, nevertheless under this statute as to the activities of those photographers who went around in the six states, the license fee would be $5 a week.

The $25 a week would be reserved for what was done at the fixed location, do you agree with that?

J. Edward Thornton:

I believe that would be the correct construction.

Potter Stewart:

Now suppose in that very situation, all that happened or rather instead of developing everything in the State of Alabama, of the pictures taken by those photographers who went around the six counties.

This photographer sent that part of the business out of state, would you be making the same argument that then this would be discriminatory against interstate commerce?

J. Edward Thornton:

No, on the $25 license in Montgomery on the $5 one?

Potter Stewart:

No on the $5 license.

J. Edward Thornton:

That’s this case.

Potter Stewart:

That’s right.

J. Edward Thornton:

That is this case.

But here you see, the point is that we were taking pictures at a fixed location at Penny’s.

Potter Stewart:

Yes, but I gather then if you’re right, then all — the photographer who now does all of his work in Alabama would have to do to escape that $5 week tax, would be to send the developing work out of Alabama to be dealt with.

J. Edward Thornton:

Well, the going out of the state is what makes the photography at a fixed location a transient operation.

Potter Stewart:

Yes.

J. Edward Thornton:

If it’s already a transient operation I don’t believe whether he develops it in the state or out of the state would make any difference.

Potter Stewart:

Yes.

But I was trying to get what your view would be of the position where everything is now done in the state and all the photographer does is to change his practice to send the developing work out of the state.

Your position then would be that what maybe a proper tax now would become unconstitutional tax to the extent of the extent of the $5 a week charge.

Well that is this case, isn’t it?

J. Edward Thornton:

Well, no, no.

The reason we got the $5 a week, there is a reason we became a transient.

I’m repeating myself a little bit.

We take pictures at — we exposed film at a fixed location.

Now that should be $25 a year if a license is on it, of course we would contest that I think we are contesting license or could we say in the interstate commerce.

But if the license at a fixed location with charges, it would be $25 a year.

But by reason of the fact that we send it outside —

Potter Stewart:

The only reason they put you in the transient class because you sent your pictures outside.

J. Edward Thornton:

That’s correct.

That’s exactly right and that’s my last point.

J. Edward Thornton:

We guess it’s right after — and I don’t want you to ever get that, I hope you never get to that point, because you see they can cure that so easily, then we’ll be back in court, we want to the first one.

Potter Stewart:

How can they cure it?

J. Edward Thornton:

What.

Potter Stewart:

How can they cure?

J. Edward Thornton:

What’s that?

Potter Stewart:

How can it be cured? You say you can cure that so easily.

J. Edward Thornton:

Well, they would just demand the license and say that regardless of where the film is developed, the license would be $5 a week.

Potter Stewart:

For whom?

J. Edward Thornton:

For transient photographers.

Potter Stewart:

Well how they prove you are transient?

J. Edward Thornton:

Well the reason they proved we were a transient here was because we sent it out.

Potter Stewart:

But how could they ever prove that you are transient, whether if they amended the ordinance like this.

J. Edward Thornton:

Well, my part is that they might cure that by eliminating the discriminatory nature of the tax, because of the interstate activity.

This they could cure.

Potter Stewart:

You see, you would still object to the $25 a year.

J. Edward Thornton:

Oh yes, oh yes.

Potter Stewart:

And that’s your — that’s the point you would like us to —

J. Edward Thornton:

That’s correct.

Potter Stewart:

They can’t tax you at all.

J. Edward Thornton:

That’s correct.

Potter Stewart:

Now let’s suppose I’m making — that I’m a manufacturing steel products, selling them all over the country and I decide to establish an office, a sales office in Alabama, Montgomery.

I establish an office, put several employees in there and the state says, look if you’re going to establish a local office here, you’ve got to get a license and yet every order that’s taken is sent out of the state and billed from out of the state.

Would you say Alabama could not make them take out a license to set up a local office?

J. Edward Thornton:

No, I would not say that.

I would say that they probably could acquire a license for a local office there.

Byron R. White:

Well then how do you — why can’t Alabama do that to you and in so far as you take pictures at a fixed location in Alabama.

J. Edward Thornton:

Well, maybe they can’t.

Byron R. White:

Because that really, dispose of you — that would your first point isn’t it?

J. Edward Thornton:

No, my last point.

Byron R. White:

I think it exposes your first point.

J. Edward Thornton:

Well then, if it does, I don’t want make that concession, because I — and I didn’t understand your question adequately I’m sorry, this I don’t know —

Abe Fortas:

Well Mr. Mr. Thorton there is a little more to the facts of this case and just the mere exposure of films isn’t there?

Don’t we have in this case that Penny gives extensive advertising to the fact that these people will be there at a certain time and will have a fixed location in the city to transact its business and it does transact business in this particular place.

J. Edward Thornton:

Yes sir.

Abe Fortas:

Well doesn’t that bear somewhat on whether it’s a local thing that is being taxed or not or whether it could be taxed as a local activity?

J. Edward Thornton:

Well, admittedly the more local activities we engage here, the more the state has to latch on to.

Abe Fortas:

Yes.

J. Edward Thornton:

But we think in this case, see this license isn’t at Penny, if they go at Penny, that’s a different proposition as to Penny’s activities with reference to advertising, our coming into the state to.

But here where our coming into the state is purely transient, we come in and out merely exposing film.

We say now then that the isolating this part of it and attempting to tax that as a local activity is actually tax on the entire transaction.

We say that is attempt by the state to license an interstate activity, which they can’t do and so the $25 license should not apply if I am keeping myself straight.

Byron R. White:

And your first point and your last point are inconsistent.

I mean they are mutually exclusive.

J. Edward Thornton:

I haven’t thought so.

Byron R. White:

What?

J. Edward Thornton:

I hadn’t thought so.

Potter Stewart:

Because your last point starts out with the proposition that we are taking photographs in a fixed location.

J. Edward Thornton:

Yes.

Potter Stewart:

And the only reason you make an itinerant out of this is because we send the photographs out of the state.

J. Edward Thornton:

That is correct.

Potter Stewart:

But if you say you’re taking photographs in fixed location, it seems to me they would be able to put the $25 charge on you.

J. Edward Thornton:

Well, I’m backing off on that completely.

First we can strike that from the record and I hope.

Earl Warren:

Very well Mr. Thorton.