WHYY, Inc. v. Borough of Glassboro

RESPONDENT:Borough of Glassboro
LOCATION:Metropolitan Dade County Justice Building

DECIDED BY: Warren Court (1967-1969)

CITATION: 393 US 117 (1968)
ARGUED: Oct 17, 1968
DECIDED: Nov 12, 1968

Facts of the case


Audio Transcription for Oral Argument – October 17, 1968 in WHYY, Inc. v. Borough of Glassboro

Earl Warren:

Number 10, WHYY, Inc., Appellant versus Borough of Glassboro, et al.

Mr. Marsh.

James M. Marsh:

May it please the Court.

This is an appeal from the Supreme Court of New Jersey.

It presents a single clear issue of constitutional law, which is whether or not a state can permit its municipalities to tax certain property used within New Jersey by a foreign, nonprofit corporation which has qualified and based in New Jersey, and at the same time, permit them to exempt from taxation same type of property when used by a New Jersey nonprofit corporation.

We believe of course that is denial of equal protection as that term is now applied by this Court over the years.

Now the appellant here WHYY was one brought under Pennsylvania law in 1952.

It’s also license by the Federal Communications Commission for the transmission of noncommercial radio and TV programs.

It is subject to great many restrictions by both the state and the FCC.

It is not permitted to sell time, it is not permitted to accept advertising, it cannot engage in any activity which inures profit to any corporation or person, it’s not permitted to pay dividends.

The property involved in this case is the only property which, WHYY has in New Jersey.

As a site where there is a tower for transmission of television programs on the Channel 12, the site must be personally involved is what lead to this case.

All the programs in WHYY from Channel 12 are educational, cultural or recreational.

They broadcast daily for the benefit of schools in a number of school district in the three or four states involved including a number in New Jersey.

They have other programs in evenings and on Saturdays.

The population of the area reached by Channel 12 was about 8 million people and the record shows that about 29.5% are located in New Jersey.

Now at pages 47 to 67 there is a detailed statement as to a nature WHYY activities, his background and the restrictions imposed upon, this was put in the record of the request on the Supreme Court of New Jersey before argument in that court.

In the last two pages list programs which were geared strictly to New Jersey people with — to show the court what benefits were confertly in census in New Jersey.

That statement also shows that WHYY has supported completely by grants and donations from the federal state and local governments, by appellant from school district, by grants from foundations, by donations from corporations and by general public, all these donations are tax deductible.

The grantors of WHYY who are unpaid they are either public officials in the states involved where they are civic leaders.

WHYY is exempt from federal state and local tax as except to this particularly tax and a few tax they paid because they were de minimis.

Now all the broadcast and all the services performed by WHYY are supported by the source that I mentioned.

They have no sales of advertising.

They have no commercials.

This is a — which you might call 100% two-way charity operation, everything is given to WHYY for nothing and everything we do is done for nothing.

And on this circumstance it’s obvious that it is very important that we receive every proper economic advantage so that this station can survive.

Tax involved in this case are substantial, excuse me, at least they are substantial to WHYY.

The assessed valuation of the property which the state seeks to tax is $113,000.00.

There are four years involved in this case.

This case involved only 1964 but this result will govern 1965, 1966, and 1967.

Potter Stewart:

This is a real property tax?

James M. Marsh:

It’s partly real property and partly personal property and all the realty in New Jersey plus the site and everything that’s in it as I understand.

Potter Stewart:

The land, the buildings, —

James M. Marsh:

The land, the buildings, —

Potter Stewart:

And the content?

James M. Marsh:

The equipment, yes sir.

And during the course of this case, the New Jersey legislature amended that statute to grant this exemption to non-profit educational television station.

So for 1968 on, we have no problem but we do have this problem with these four years and they’re substantial amount of money.

Earl Warren:

You have no quarrel with this amended statute.

James M. Marsh:

No sir, we’re happy with the amended statute and we were saying we have it retroactive or take some other remedial action but strictly prospect on operation.

Now in New Jersey we run the gambit of the administrative proceedings that time strictly on the ground that WHYY having been domesticated was in a fact that domestic corporation had other language in the statute could be grant this exemption.

The New Jersey administrative officials didn’t see it that way in order the Supreme Court in New Jersey and they went solely in that ground.

The federal postures issue was not raised until the case in the Supreme Court in New Jersey.

That court then asked for the statement, which I mentioned which is at pages 47 to 67 at the record.

So they have a full background to make their judgment.

Unfortunately, when they made their judgment on equal protection argument, they made it very summarily and very abruptly.

They did not discuss or distinguished any of the cases in this Court up to that time.

They simply said that there is a presumption of validity of a statute and they indicated — they believe there is a possibility of different treatment of foreign nonprofit corporations and local domestic nonprofit corporations.

Now we feel this is clearly wrong under the case this court which we are citing could starting with Southern Railway, where this Court said that a division of corporations entered domestic and foreign for purposes of taxation, taxing the foreign and not taxing the domestic on the same property and in the same operation is unconstitutional.

And this Court has said many times that once a corporation has been admitted is entitled the exactly the same treatment as every other corporation in the same class within a state.

Now the idea was the New Jersey Supreme Court expressed that faced with a discriminatory statute, a court can say well the legislature had some basis where it could have had some basis.

You could imagine the basis in which they would make a finding that there will be some reason for not taxing domestic corporations and taxing foreign as also disowned by this Court.

As long ago as the Gulf, Colorado & Santa Fe case in 165 U.S. where Mr. Justice Stewart said that “To so treat the Due Process and Equal Protection Clause of the Fourteenth Amendment would make a mere rope of sand out of those clause and would afford no protection against state action.”

I would think they say an apt description of what happened and in this case and addition to that the question is whether or not to accept a particular group of taxpayers or group of corporations from taxation is the legislative function.

The New Jersey legislature made this judgment and that statute which was set forth on page 26 of the record, page 26 of our brief rather and pages 14 and 15 of the record.

That statute provides that a nonprofit at a foreign corporation of any kind can qualify New Jersey and get a certificate telling it to offer in New Jersey simply by following certain information about its composition, its capital and nature of its activities, and find certain documents.

The WHYY did this and it’s our view that the state Supreme Court cannot now retroactively in effect to kind of take back that certificate.

Because they have a thing that have more day have been requested perhaps the legislature would have come to a different conclusion what they have done is kind of dream up a phantom session of the legislature.

And said “Well these faults probably could have found some basis and if they could have why then, they would have” and we have a right to say, “You have no right to complain.”

And not with a —

Earl Warren:

Mr. Marsh, I understand when you say that you’re perfectly satisfied with the new law as it stands in the present time so far as two or three years.

James M. Marsh:

For future years, we are exempt, as I understand.

Earl Warren:

I beg your pardon.

James M. Marsh:

Yes, for future years —

Earl Warren:

So you’re satisfied with that.

Now may I ask you this, do in this case would you have complied, been in compliance with the present law at the time this case arose?

James M. Marsh:

The question of the technical compliance with the New Jersey statute was not decided by Supreme Court in New Jersey.

Earl Warren:

No, I didn’t ask you that.

I merely asked you as a matter of fact, if in this case you would have been in compliance with the present law, if it had existed at that time?

James M. Marsh:

Yes, Your Honor.

Earl Warren:

You would.

James M. Marsh:

It all requires as a nonprofit educational television station.

That is exactly what we are.

Earl Warren:

Yes, so —

James M. Marsh:

There will be no prob — this law had been on the books when this case came up I think even the Supreme Court of New Jersey would have grant us an exemption.

Now, we feel that with all due respect to that court hat they have ignored the decisions of this Court in telling us to the same protection.

Once we have been admitted the New Jersey legislature made that judgment that we could be admitted by doing certain things, which we did.

Now we say that the Supreme Court has no right to turn around and say “Well have they done otherwise you might have gotten a different answer.”

We feel that their ruling would produced a patent violation of the equal protection clause and that should be reversed.

I would like to reserve any time I have for any necessary rebuttal.

Earl Warren:

Do you consider this new legislation as overruling the Supreme Court of New Jersey in your case?

James M. Marsh:

I would like to view it that way but I don’t — it’s hard to say what, for one legislature to decide what other legislature meant where they correcting it or where they changing it.

I don’t, I really don’t know, I would — my view would be that they were saying, this is what I should have met all along, we would not have passed an unconstitutional statute that we’re satisfied that it was unconstitutional.

But there is nothing in the face of the statute to tell you that —

Earl Warren:

I see.

James M. Marsh:

And we have no way of knowing but we certainly feel that had this law been affected at that time, there was no doubt about our exemption.

And we feel that the decision of this Court the other statute, which by his terms is good as in the exemption and by its interpretation, excludes an exemption.

We feel it’s clearly bad and should be offset.

What are the dollar amounts on the taxes?

James M. Marsh:

The dollar amounts of the taxes are not on the record while I have talked to my adversary and we have agreed it is in the near $60,000.00 for these four years.

Potter Stewart:

And there is no question but that the new law is prospective only in its application.

James M. Marsh:

That’s right Mr. Justice Stewart, it’s prospective only.

Byron R. White:

And I take it that the new law may exempt you but there are other nonprofit corporations that it does not.

James M. Marsh:

I think that’s right, Mr. Justice White, it says educational television stations.

Byron R. White:


James M. Marsh:


Earl Warren:

Mr. Trimble.

John W. Trimble:

Mr. Chief Justice and may it please the Court.

William J. Brennan, Jr.:

Before you begin, I noticed that the Attorney General was in this case in the Superior Court and New Jersey Supreme Court, am I correct that the Attorney General is not here?

John W. Trimble:

The Attorney General, Your Honor was never in this matter.

He let me carry the ball through all the courts and filed a statement that in lieu of a brief that he felt that the situation was being adequately argued by the Borough of Glassboro and therefore he would not participate.

The situation is that the State of New Jersey —

William J. Brennan, Jr.:

— my problem of course, my personal problem, my son is an Attorney General and I just like to be sure whether I’m qualified — disqualified?

John W. Trimble:

Well, they have entered their appearance for the State of New Jersey but they’ve only entered a statement in lieu of a brief.

And appeared that none of hearings to argue is a matter and throughout all the record you’ll see that the Deputy Attorney General’s name is listed there but never appeared.

This is one of the problems faced in this matters that the State of New Jersey of course receives and none of this taxes.

This is a law of course passed by the New Jersey legislature.

Where the tax situation as I’m sure you’re aware of in New Jersey it’s for the local, a local purpose for the fire protection and police protection for the local municipalities.

None of this money ever inures to the State of New Jersey and since the Borough of Glassboro the one interested in this matter.

We of course carried the ball through the fight and the upholding the state statute on this matter.

Now the — in addition to the facts that were set forth by the appellant I’d like to add that the Channel 12, WHYY never applied for an exemption under the statute 54:4-4.4.

This was not handled in the New Jersey Supreme Court because they felt they didn’t have to handle that they’ve upheld the statute so therefore they did not consider this point.

The reason this may be very important is that the procedure is set forth where a form is filled out for the tax assessor to review the statements by someone claiming the exemption and why they should be exempt.

The record is clear that the Borough was put on noticed, a letter was sent by this attorney for the television station asking for an exemption, which was referred to the local solicitor who then referred to the states statute and says, you’re not exempt because under the New Jersey statute which is set forth in the appendix on page 17 the Section which excluded them of course and which was the argument I might say all through the New Jersey courts up into the Supreme Court that the foregoing exemptions shall apply only when the association, corporation or institution claiming the exemption owns the property in question that is incorporated, were organized under the laws of this state, and authorized to carry out the purposes on account of which the exemption is claimed.

We agree that this Channel 12 is a nonprofit corporation.

There’s no question that they comply in every way with what New Jersey would consider a nonprofit corporation that is not our argument today.

The situation is that the Borough of Glassboro has filed the law in New Jersey by denying this exemption.

We had to list this over a hundred thousand dollars of ratables both real and personal on our books.

The local citizens had to pay these taxes because we have the county government that relies on what you access on your local municipalities to run the county government in Gloucester County which Glassboro situate.

Now they have been paying these taxes and they have to make up this deficit every year, which now amounts to a sum of $60,000.00.

John W. Trimble:

It is true we are only arguing back taxes now.

The new Act that became effective January 1, 1968 and I might say the same question was raised by the New Jersey Supreme Court whether this was a — an Act to clarify the existing law or was it a modification to carry on after January 1st.

And I might only add that the law firm that was handling the matter in the state level was from a law firm where the Senators sponsored the bill.

So I think it’s safe to say that it was not a declaratory act but it was an act to amend 54:4-3.6 and to carry on after 1st of January.

Abe Fortas:

Where’s that follows?

Hugo L. Black:

What does the new Act do precisely?

John W. Trimble:

The new Act simply says that nonprofit corporations whether they be domestic or foreign or exempt under I think the new citation is 3.6 (a) or something.

It just includes them in there domestic or foreign corporations are included in the exemption of the section.

Down at it’s — the taxes as I said amount to approximately $60,000.00.

I would like to address myself to the procedural point here that the fact that the federal issue was never raised in this matter to all the Supreme Court in New Jersey.

And it might not have been raised then, had it not been for the fact that the appellate division of the superior court was unanimous in upholding the statute as it was argued.

Because it was argued that by Channel 12 that they are organized under the laws of New Jersey because they qualified — because they had a registered agent in the state that could be served, service of process.

So therefore, they were “organized”.

Of course, the word “organized” as shown in the opinions of the superior court appellate division and the state Supreme Court, New Jersey State Supreme Court meant that it dealt with organizations such as religious organizations that are not incorporated but nevertheless are organized in New Jersey and are available for the exemption.

This is the argument that prevailed to the Supreme Court then the appellant in this matter was faced with a problem on how to get into the Supreme Court.

Because there was no dissent in the appellate division and no constitutional issue raised.

It then for the first time raised the issue of equal protection of laws under the Fourteenth Amendment of the federal constitution.

This —

William J. Brennan, Jr.:

Have they raised up petition for certification?

John W. Trimble:

I believe it was on an appeal, a direct appeal but for the first time raised a federal issue at which time the Attorney General did contact me and suggested at which I was doing at the time, that I enter a motion to dismiss for failure to raised any federal issue, any constitutional issue up to that point since there was no dissent and the appellate division there was no grounds for an appeal to New Jersey Supreme Court.

The New Jersey Supreme Court when faced with this problem simply stated as it’s outlined on page 9 of the appendix, this Court may not need — this Court may but need not accept the constitutional question not raise below.

As this constitutional contention is one of the great concern to many municipalities and nonprofit foreign corporations the public interest in this question demands that it would be decided.

So they recognized it, it had not been raised but they accepted it to put this question to rest under the state statute.

William J. Brennan, Jr.:

Well on the posture here is that the New Jersey’s Supreme Court has decided a federal constitutional question.

John W. Trimble:

Oh, I argue of course that they waived the rule to hear the case.

William J. Brennan, Jr.:

Well, whether, whatever or however?

John W. Trimble:


William J. Brennan, Jr.:

But they have decided it, have they?

John W. Trimble:

They have decided that the — the cons — the statute is constitutional under the constitutional tagged first raised there.

Of course, it is my understanding that this Court demands that when a constitutional issue is to be raised it would be raised at the lowest level and not be raised as an afterthought and perhaps the last court in the state.

John W. Trimble:

And as set forth in the appendix the question was never raised, it was just the statutory construction whether that they were organized and came under that exemption.

And of course, the argument they lost all those arguments through the state courts.

Hugo L. Black:

Suppose the law had provided that it could not be raised in the law of court — state law, but have to be raised with the Supreme Court?

John W. Trimble:

Suppose the law required it, it could not be raised below?

Hugo L. Black:

In the trial court but had to be raised in the appellate court.

John W. Trimble:

Well, Your Honor, I can’t foresee of any type of a rule that said you could not raised a constitutional issue at a trial level.

Hugo L. Black:

— some courts that are too small they do not want them to pass on constitutional questions.

What you have here is that the state has said that it’s properly raised in the Supreme Court and it fashion on it.

John W. Trimble:

The state Supreme Court did accept the case and acknowledge it and perhaps it was not raised but we want to let hear this case anyhow.

So it could be argued either way, well, if it wasn’t raised but we’re going to hear it anyhow or although it wasn’t raised we’ll allow you to raised it in this Court and I think and all fairness that they did listen to the Constitution arguing at the highest court in New Jersey, I think there is any —

Hugo L. Black:

And then decided what they decided.

John W. Trimble:

They decided that as one of the points raised and upheld the —

Hugo L. Black:

It’s the point — if the constitutionality was determined under the federal constitution and the highest court to which it should go, wasn’t it?

John W. Trimble:

That’s true, Your Honor.

Earl Warren:

In our review of state case have we ever said that that the constitutional question must be raised in the lowest court where, it became pertinent or have we merely said that “It is an adequate state ground for not deciding the federal question.”

If the state holds that they did not properly raise it the first time, it was available to them.

John W. Trimble:

Well, I think the latter part of your statement is correct that this court has held it that way that and —

Earl Warren:

That’s what I felt.

John W. Trimble:

Now the – as we stated the Channel 12 is now exempt from this time on from 68 on we’re only arguing about back taxes.

Now the — of course the Borough of Glassboro now finds itself in a position where it is arguing for this back taxes that they’re local citizens have paid, and which they won’t — apparently won’t, will not be able to retrieve if now this Court were to decide that this statute that was effective up to 1968 is in fact unconstitutional.

Now this Court has upheld in cases where there are a foreign corporation need not be given equal treatment with domestic corporations.

The thrust of the, of our Glassboro’s argument in this matter is that these cases deal with profit corporations that are involved in an interstate commerce.

And the reasoning behind this that they — we should not discriminate against foreign corporations.

Because at the federal level we look at the nation as a whole and we don’t divide it into boundary lines, and there shouldn’t be adverse discrimination between these corporations, however, in this situation I think the focus is directive wrong.

Here, the State of New Jersey is giving a gift.

We’re allowing a complete exemption from any taxes and it appears to me that the State of New Jersey should be able to decide who they’re going to give this gift to.

This people pay no taxes whatsoever or they’re demanding that they pay no taxes whatsoever.

They don’t want to pay for any local municipal services at all.

They want to be completely free from all taxes and New Jersey says that we’ll grant these exemptions if you follow some simple procedures.

Number one, that you will be nonprofit, they are.

John W. Trimble:

Number two, of course that you own property, which they do.

And number three, that you’d be organized to incorporate on the State of New Jersey.

Now the New Jersey Supreme Court —

Thurgood Marshall:

What’s the reason for the last one?

John W. Trimble:

Your Honor, the New Jersey Supreme Court handled that problem briefly and I do not say that the statements they made is the end of the reasons that might be put forth on why you should be incorporated in New Jersey to —

Thurgood Marshall:

I thought you might have a better one.

John W. Trimble:

For instance and of course this is all we’re trying to fathom what the legislature had in mind some 25 years ago when they enacted this situation.

This corporation derives all of its assets from contributions of the public.

Many of which are in New Jersey and of course, the federal government and different foundations donate money to provide the facilities that they give.

I could foresee the situation where WHYY would become insolvent for one reason or another.

The New Jersey may have an interest on, what happened to the donations of the people in New Jersey?

They may have a jurisdictional problem since it’s a foreign corporation, the New Jersey people have donated money to the facilities involved here.

Whereas if they were incorporated in New Jersey our Chancery Court would take jurisdiction of an insolvent corporation and there is procedure set forth on listing assets, etcetera on what happens to this money and where it is to be distributed the New Jersey —

Thurgood Marshall:

Can you put the tax on?

John W. Trimble:

We asked them to incorporate, if they had incorporated and follow the law for some reason on benounce to me a very simple procedure.

Number one, the Borough of Glassboro wouldn’t have them on their books, we wouldn’t be faced with this problem, I wouldn’t be here today arguing for these back taxes.

We have been put in a position where we’re in a bind we’re defending a New Jersey statute for our back taxes and they have amended it on us so, which is fine but of course, the local citizens have had to payout their own pocket these back taxes.

And we’re in dilemma here and I’m only trying to pick reasons out in thin air and to be quite frank with you, it is difficult and I think the court — the New Jersey Supreme Court have a little bit of trouble.

When they mentioned the point about perhaps the local assessor should not be burdened with the problem of trying to figure out what a foreign jurisdiction considers as nonprofit.

Of course, it’s not applicable on this case because we agreed there is no question that Channel 12 WHYY is nonprofit.

I feel this is a suggestion put forth by the New Jersey Supreme Court and it is not the end reasoning of the New Jersey legislature.

The —

Byron R. White:

Do I understand you to say that unless there is a (Inaudible), do you think of some statute will at least justify the statute?

John W. Trimble:

I feel in the surface of it, it appears that it does discriminate against a foreign corporation as compared to a local corporation basically on the balance that –on the grounds that they did not incorporate in the State of New Jersey.

Byron R. White:


John W. Trimble:

I haven’t raised that point and I think they are, I don’t think there is any question that the – if you’re alluding to the problem of whether corporations are allowed to raise the Equal Protection Clause as not being a person.

I didn’t think of, that was a much moment to raise that point although it has been raised in many, many times before I — it appears that it doesn’t carryout much weight in this Court.

And so I didn’t raise the point that they’re not a person under the Fourteenth Amendment.

Earl Warren:

Does the amended statute a repeal of the New Jersey Supreme Court decision or is it a clarification of the Act, the original Act.

John W. Trimble:

It’s a repeal effective January 1, 1968 of the New Jersey decision in this matter.

Earl Warren:

How do you make the differentiation as to whether it was repeal or barely clarification of it?

John W. Trimble:

Well, the language of it as its set forth that it’s clearly aimed, of course, the information I have and the knowledge I have of this matter is without the record, and that it wouldn’t be fair to bring out why I feel that this is clearly meant to repeal it.

I mean the fact that the Senator that sponsored the bill was the law firm that was arguing these matters to the state court may have be of no moment but I think it might be significant.

The fact that this litigation has been going on to this time and soon after the one of the decisions was handled down, this thing was put to the legislation I think in about 6 or 7 weeks which is unusual.

And it was made effective six months afterwards, which was the 1st of the January 1968 and as an aid it’s educational.

William J. Brennan, Jr.:

I thought Mr. Trimble that Mr. Marsh conceded that this new legislation didn’t overrule the Supreme Court decision for the years to which that decision apply, but simply amended the statute to provide the exemption for the future.

John W. Trimble:


William J. Brennan, Jr.:

I ceded that.

John W. Trimble:

He did but I think the Chief Justice’s question was “What was the background of this, whether it was a clarification or repeal?”

And I think Mr. Marsh said that he’d like to think of it as a clarification rather than an appeal of it.

And I, it’s my position of course, that it was an appeal of it specifically for the Act is for educational corporations either domestic or foreign.

The rule — the main case that’s faced, that I’m faced with of course is the case in the Glander case, which this Court has ruled on and has upheld in previous cases on discrimination against foreign corporations as concerned with domestic corporations.

The Glander case of course, as I said before, the focus is on profit corporations that are in the business for profit that the firm in the Ohio corporation there was not Ohio — a foreign corporation in Ohio.

Of course, it was paying all its property taxes.

All its personal property taxes, its franchise taxes then they were attempting to tax the accounts receivable in that matter to the discrimination of the foreign corporation as compared to the, to the domestic corporation.

The problem we’re faced with here is an outward grant by the State of New Jersey, a gift and the point is that they should be allowed to decide who gets the scheme.

William J. Brennan, Jr.:

Well, but you’re not suggesting are you that exemptions are not subject to constitutional restraints?

John W. Trimble:

Exemptions for nonprofit corporations, I think that they should be —

William J. Brennan, Jr.:

Tax exemptions generally are.

John W. Trimble:

I think they should be —

William J. Brennan, Jr.:

Are the states are free to discriminate for example in the granting exemptions, without regard to the federal constitutional restraint?

John W. Trimble:

Well, I think that it should be reviewable but I don’t think in the same light Your Honor, as a profit corporation New Jersey could very well become the maker of nonprofit corporations without the state putting any type of guidelines on what they have to do to get in here.

All that they do when they said they’ve been domesticated is, they simply file a — an application as to a registered agent.

What is set forth in the appendix here concerning application to become a — to register in the State of New Jersey deals mainly with profit corporations.

It’s even under Title 14 which is our profit corporations, nonprofit is at Title 15.

It is for such things as stockholders.

These people don’t have any stockholders.

The amount of outstanding stocks and assets like that, it’s just, it’s not applicable to these people.

They just have a registered agent on the — so that state in New Jersey knows who they can contact in the event of a lawsuit or any other type of service.

Earl Warren:

So you have an agency or an officer in New Jersey who is responsible for supervising the nonprofit corporations as they do in some states.

Earl Warren:

In my own state, the Attorney General is charged with the responsibility of supervising the nonprofit corporations.

John W. Trimble:

Well, I’m sure that the Attorney General’s office has some type of control but for taxing purposes —

Earl Warren:

I don’t mean for tax.

John W. Trimble:



For other purposes?

Earl Warren:

Yes, to determine, for instance to determine whether they are actually carrying out their educational activities or whether they’re using it as a cover-up for something else.

John W. Trimble:

I don’t know whether I could give a direct answer to that.

Earl Warren:

Well, I don’t think —

John W. Trimble:

I don’t think unless there was a complaint lies against someone that was circumventing the nonprofit status.

New Jersey wouldn’t be concerned because the taxing problem is a local one.

So the local tax assessor must review the situation to make sure that they are fulfilling this status and there is a provision wherever here.

They’re supposed to re-file to show that their activities do continue to be nonprofit, so they are entitled to the exemptions as set forth in the statute.

I would like to reserve anytime remaining to any rebuttal for Mr. Marsh.

Earl Warren:

I think the order of our argument is that you complete you’re argument now, and Mr. Marsh then conclude his.

John W. Trimble:

Thank you.

A case was alluded to in the appellant’s brief the Board of Education of Kentucky versus Illinois case which was, is the only case involved in the appellant’s brief with nonprofit corporations as of situation where a state did discriminate on it’s taxing, on a taxing basis for a nonprofit corporation.

And it was upheld and that the basis being that this money was going to be used — have to be used exclusively in the State of Kentucky therefore Illinois would not receive any benefits from it and therefore could tax it on it, it was an inheritance tax, I believe in that matter.

Now it can be differentiated in the fact that the WHYY is claiming that they do some benefits for the State of New Jersey in Southern New Jersey with their transmitter.

The problem of rebutting the voluminous information that was supplied was that this information was supplied just prior to argument before the New Jersey Supreme Court.

This question apparently came up in their mind “What benefits does New Jersey receive from your Channel 12?”

And this was supplied as an outline in their appendix.

However, I don’t think it would be outlined at an extension of that rule of the Illinois case could be applicable here.

And that the discrimination that New Jersey is attempting or this alleged discrimination is not that far and unfair to the local residence of Glassboro that that rule could be extended to this situation.

That they should incorporate in the State of New Jersey so that the Glassboro wouldn’t have taxed them and then be bound in the situation they find themselves today.

And the case cited that Railway Express Agency versus Virginia were Justice Holmes wrote the opinion in that where they forced a foreign corporation to incorporate to do any business in the state.

And this was held not to be unreasonable and if they want to do business in the state they should incorporate and this was upheld.

Thank you

James M. Marsh:

May I please the Court.

Earl Warren:

Mr. Marsh.

James M. Marsh:

Just to clarify a few matters.

First, Mr. Justice Brennan’s problems about the Attorney General, I think it may be explained by raising the facts that during this litigation and up to today.

The Attorney General of New Jersey is the member of the Board of WHYY which might have made this participation a little awkward.

The other problem about the statue, the statute we talked about was passed after decision of the Superior Court of New Jersey but before the decision of the Supreme Court in New Jersey.

So it was, I supposed you say was repealed or the decision of the Supreme Court in New Jersey but it had no bearing on the —

William J. Brennan, Jr.:

Well, i thought you say Mr. Marsh that the new statute had no retroactive application that’s why you didn’t —

James M. Marsh:

No, it does not but as far as Davis passage in this relation, the Supreme Court of New Jersey decision had none —

Byron R. White:

Intervene in the Superior Court and the Supreme Court?

James M. Marsh:

Yes, it intervened between any Superior Court’s decision and the Supreme Court’s decision.

So the Supreme Court had nothing to do with it.

As far as the statement that we should have been required to incorporate in New Jersey and New Jersey legislature carry that they don’t make any sense in provision.

And we have comply with all the laws and all the regulations I did put down and we feel we have fully qualified for all the rights approach that nonprofit corporations have in New Jersey.

This is also the sense between the Kentucky case which I myself went out to the court in my brief.

Because in that case you had it questioned — a Kentucky corporation which had not qualified in Illinois, which could not possibly spend any money in Illinois couldn’t get any benefits to people of Illinois.

And Illinois said rightly, I think that they didn’t have to give them this inheritance free of tax like its quite duly case in every possible respect.

The only other question I want to talk to you on is the question of the exemption.

First of all the requirement that you applied for this exemption is not in this exemption section it’s in another quite general section of the statute.

Secondly, the duty raise is place on the assessor not on a taxpayer.

Thirdly, there was substantial compliance in that and we didn’t like a request on November 7, 1963 I supposed to November 1st, which would be the date of the law.

And the final thing, probably the most significant thing, is the Supreme Court in New Jersey did not decide the case on that ground and now had they thought much of it, it’s the same scenario it would have.

Because they could have avoided it deciding in federal constitution issue by just simply telling us whatever your rights where you gave them up, they didn’t do that.

I guess that’s very significant and I submit that we have comply well in the laws in New Jersey and required to be treated as a New Jersey corporation for this purpose and otherwise would be a protection, with this the judgment should be reversed.

Thank you very much.