Fitzgerald v. Racing Association of Central Iowa

PETITIONER: Michael Fitzgerald, Treasurer of Iowa
RESPONDENT: Racing Association of Central Iowa
LOCATION: United States Court of Appeals for the Ninth Circuit

DOCKET NO.: 02-695
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: Iowa Supreme Court

CITATION: 539 US 103 (2003)
ARGUED: Apr 29, 2003
DECIDED: Jun 09, 2003

ADVOCATES:
Kent L. Jones - Department of Justice, for the United States, as amicus curiae, supporting the petitioner
Mark McCormick - for the respondents
Thomas J. Miller - for the petitioner

Facts of the case

A group of racetracks that earn revenue from gambling sued the state of Iowa, claiming that the state's practice of taxing racetrack gambling at a higher rate than riverboat gambling violated the Fourteenth Amendment's Equal Protection Clause. The group asserted that gambling at racetracks and riverboat casinos is is not substantially different, and that the state should therefore charge the same tax rate for both activities. A state district court sided with the state, ruling that important differences did exist between riverboat and racetrack gambling; the Iowa Supreme Court reversed in a 4-3 decision.

Question

Do different tax rates levied against racetrack and casino gambling violate the Fourteenth Amendment's Equal Protection Clause?

Media for Fitzgerald v. Racing Association of Central Iowa

Audio Transcription for Oral Argument - April 29, 2003 in Fitzgerald v. Racing Association of Central Iowa

Audio Transcription for Opinion Announcement - June 09, 2003 in Fitzgerald v. Racing Association of Central Iowa

William H. Rehnquist:

I have the opinion of the Court to announce in two cases.

The first is 02-695, Fitzgerald versus the Racing Association of Central Iowa.

Iowa tax has adjusted revenues from slot machines at racetracks had graduated rates with a maximum rate of 36%.

The tax has adjusted revenues from slot machines on riverboats at graduated rates with a maximum rate of 20%.

The Iowa Supreme Court held that this tax rate difference, 36% as opposed to 20%, violated the Federal Constitution's equal protection clause.

In an opinion authored by Justice Breyer we reversed, as the Court stated in Nordlingerv. Hahn “differences in state tax rates do not violate the equal protection clause so long as there is a plausible policy reason for the classification”.

The legislature may have considered the underlying legislative facts to be true and the differences reflect a classification that is not arbitrary or irrational.

That standard is satisfied here.

The legislature may have wanted a lower riverboat tax rate, for example, to encourage riverboats to remain within Iowa or to help the communities in which the riverboats are located.

There is nothing irrational or arbitrary about such justification.

For these reasons and other set forth in the opinion we reverse the decision of the Supreme Court of Iowa.

The decision is unanimous.