Wardair Canada v. Florida Dept. Of Revenue

PETITIONER: Wardair Canada
RESPONDENT: Florida Dept. Of Revenue
LOCATION: Hardwick's Apartment

DOCKET NO.: 84-902
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: Florida Supreme Court

CITATION: 477 US 1 (1986)
ARGUED: Mar 31, 1986
DECIDED: Jun 18, 1986

ADVOCATES:
Albert G. Lauber, Jr. - for United States as amicus curiae, in support of the appellant, by special leave of Court
Joseph C. Mellichamp, III - on behalf of the Appellee
Walter D. Hansen - on behalf of the Appellant

Facts of the case

Question

Media for Wardair Canada v. Florida Dept. Of Revenue

Audio Transcription for Oral Argument - March 31, 1986 in Wardair Canada v. Florida Dept. Of Revenue

Warren E. Burger:

Mr. Hansen, I think you may proceed whenever you are ready.

Walter D. Hansen:

Thank you, Mr. Chief Justice, and may it please the Court:

In the spring of 1983, Florida enacted and began collecting an unapportioned fuel tax on aviation fuel uplifted in Florida by Wardair, a Canadian airline, and by other foreign airlines, such fuel to be used exclusively in international commerce.

Wardair challenged the validity of that tax in a Florida circuit court on the grounds that it was unconstitutional and that it violated the terms of the Nonscheduled Air Services Agreement between the United States and Canada, an agreement which regulates the foreign air transport services which Wardair can provide in and out of the United States.

The circuit court held that the tax was constitutional, but that it did violate the terms of the bilateral agreement and issued an appropriate injunction.

On appeal, the case was certified to the Florida Supreme Court and that court again held the tax to be constitutional, but that it did not violate the terms of the bilateral agreement because there was no exemption from the payment of a state fuel tax.

That decision is at total odds with Japan Line against the County of Los Angeles in which this Court held that the California tax on cargo containers used exclusively in international commerce and owned by foreign nationals was unconstitutional even though there was no specific federal prohibition against the tax.

The question in this case is identical to the question in the Japan Line decision, whether a state has the power to tax an instrument of foreign commerce owned by foreign nationals and used exclusively in international commerce.

The Japan Line case is a pure one involving, as it does, solely the power over foreign commerce, an exclusive preserve of the federal government, with no parts shared with the individual states.

Sandra Day O'Connor:

Well, Mr. Hansen, in Japan Line I think the Court at least expressed considerable concern, reliance upon the asymmetry that would exist, and here, I guess, Canada imposes a tax on fuel under the same circumstances that Florida does.

Walter D. Hansen:

Yes, you are quite right, Justice O'Connor.

But, it is my belief that that fact does not enter into this case as an issue.

What it does do is show--

Sandra Day O'Connor:

But, certainly... It certainly cuts back on the reliance you can place on Japan Lines in my view.

Walter D. Hansen:

--Well, no, I respectfully disagree.

What it does show, Justice O'Connor, is that if there is a method to remedy the problem that the United States may have with Canada as to this reciprocity, the federal government has to have the exclusive power to devise the remedy to suit the national interest.

It cannot be worried about what the individual states may do with that circumstance.

It has to have the power.

The federal government has to have the power to attempt to remedy and it is doing that right now.

Harry A. Blackmun:

Well, isn't the Canadian counterpart provincial rather than national?

Walter D. Hansen:

Yes.

The tax is a tax--

Harry A. Blackmun:

It is not imposed by the dominion of Canada, it is imposed by a couple of provinces.

Walter D. Hansen:

--It is imposed by the provinces, just like Florida is imposing a tax here.

I might suggest, however, that insofar as that problem is concerned, there are several things to consider.

One, to my knowledge, there has not been a U.S. air carrier which has challenged that tax in Canada.

Two, there is presently a diplomatic initiative in an attempt to seek a remedy to that problem.

And, three, one of the United States air carriers that performs service to Canada has joined with other carriers in an amici brief supporting Wardair's case today.

In the Containers Corp. of America against the Franchise Tax Board, this Court commented on the Japan Line case, saying that it was consistent with international practice and expressed federal policy.

That case is a pure case involving the power of the federal government over foreign commerce.