Polar Tankers, Inc. v. City of Valdez - Oral Argument - April 01, 2009

Polar Tankers, Inc. v. City of Valdez

Media for Polar Tankers, Inc. v. City of Valdez

Audio Transcription for Opinion Announcement - June 15, 2009 in Polar Tankers, Inc. v. City of Valdez

Audio Transcription for Oral Argument - April 01, 2009 in Polar Tankers, Inc. v. City of Valdez

John G. Roberts, Jr.:

We will hear argument this morning in Case 08-310, Polar Tankers v. City of Valdez.

Mr. Rothfeld.

Charles A. Rothfeld:

Thank you, Mr. Chief Justice, and may it please the Court: The Valdez vessel tax violates the Constitution's Tonnage Clause because it operates as a charge on a privilege of trading in Port Valdez, and that tax is apportioned in a way that is guaranteed to tax extraterritorial values and values that do not have a connection to the city.

That violates the Due Process and Commerce Clauses.

Anthony M. Kennedy:

It's not often that we have disagreements as to the basic facts.

The red brief says that the tax in question constitutes 11 percent of the tax base, and you talk about that in the reply brief.

Can you spend just a little bit of time at the outset telling us your views of this tax?

And although it's the Respondent's statement, not yours, do you think 11 percent of the tax base means 11 percent of what's collected under this tax or under all taxes imposed by City of Valdez?

Charles A. Rothfeld:

Well, I think that it means all taxes that are imposed not only by the City of Valdez, but they are including taxes imposed by the State of Alaska that are collected by the City of Valdez.


Anthony M. Kennedy:

In which case, that seems really quite irrelevant.

Charles A. Rothfeld:

--That is our position.

We think that's absolutely right.

I think it's useful to focus on the nature of this tax.

It is a tax that is directed exclusively at vessels and not at all vessels.

It's -- by exempting small boats and all boats that are engaged in commercial fishing and all boats that dock exclusively at city-owned harbors.

This was a tax, a property -- it's calls a property tax, but it's a tax that falls only on vessels and is directed at those vessels that--

David H. Souter:

Well, some -- some of those vessels, I take it, are taxed under other statutes.

Is that correct?

Charles A. Rothfeld:

--I think -- I think not.

I think that the -- so far as Valdez is concerned, the vessels we are talking about are subject simply to this property tax.

David H. Souter:

Well, do you -- do you take the position -- let's say that if the State of Alaska taxed all the other property you had mentioned except for the tankers and the city taxed the tankers, that that would by definition be a discriminatory tax and/or on some other basis violate the Tonnage Clause?

Charles A. Rothfeld:

Well, that -- that would be quite a different situation than what we have here.

Here, the city--

David H. Souter:

Well, the reason I raised it was that -- that in -- in your response to my first question, you said, well, you didn't think the city was taxing these other -- these other pieces of property, and I'm -- I'm not sure why that is significant.

Charles A. Rothfeld:

--Well, there are -- there's a huge universe of personal property that could be taxed in the City of Valdez.

Valdez has the authority to tax all of this property except for a discrete category of oil and gas property that is subject to taxation by the State.

So Valdez can tax all the ordinary kinds of personal property -- movable property, personalty -- that any jurisdiction can tax.

They can tax cars and trucks and moving vans and refrigerators and jewelry.

Of all those innumerable things that they could tax, they have chosen to tax a single item.