Xerox Corporation v. County of Harris

PETITIONER: Xerox Corporation
RESPONDENT: County of Harris
LOCATION: Minnesota State Legislature

DOCKET NO.: 81-1489
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: State appellate court

CITATION: 459 US 145 (1982)
ARGUED: Nov 10, 1982
DECIDED: Dec 13, 1982

ADVOCATES:
Alfred H. Hoddinott, Jr. - on behalf of the Appellant
Cheryl Helena Chapman - on behalf of the Appellee

Facts of the case

Question

Media for Xerox Corporation v. County of Harris

Audio Transcription for Oral Argument - November 10, 1982 in Xerox Corporation v. County of Harris

Warren E. Burger:

We will hear arguments next in Xerox Corporation against Harris County, Texas, and Houston.

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

Alfred H. Hoddinott, Jr.:

Chief Justice, may it please the Court, this case concerns Xerox copiers that were always in foreign commerce, never in domestic commerce or part of the common mass of property in the state of Texas, paused only temporarily in Texas, and were stored in a Customs bonded warehouse, always under the custody and control of the United States Customs Service.

The issue is whether Texas can assert property taxes without violating the commerce clause and the import export clause on goods in that warehouse.

The Texas Court of Civil Appeals said that it could.

It was wrong.

The facts are essentially undisputed.

Xerox manufactures copiers domestically and assembles them abroad.

The Latin American Free Trade Association requires the assembly of goods in member countries.

As a result, Xerox decided to build copiers in Mexico to compete in Latin America.

Initially, it stored those copiers in the Panama Canal Zone, but because of anti-American feeling there, it sought to store them elsewhere.

It decided to switch to a Customs bonded warehouse in Houston.

Physically, these copiers were assembled in Mexico, trucked by a bonded carrier to Houston, stored in a Customs bonded warehouse in Houston, anywhere from a few days to three years, but always less than the time permitted by the Customs statutes.

As orders were received, the copiers were trucked by a bonded carrier to the ship, and then to Latin America.

Because of the way the copiers were packaged and built, they could not be used domestically.

William H. Rehnquist:

Mr. Hoddinott, you used the term "Customs bonded warehouse in Houston", and I know the Court of Civil Appeals opinion certainly speaks in those terms, too.

Is there any generic description you can give of a Customs bonded warehouse?

Alfred H. Hoddinott, Jr.:

It is a warehouse that is maintained by a warehouseman.

He supplies bonds to the Customs Service that goods that are retained in there will not go out into domestic commerce, and they are... the goods are under the custody and control of a Customs employee.

William H. Rehnquist:

Is the warehouseman generally a private individual?

Alfred H. Hoddinott, Jr.:

Yes.

William H. Rehnquist:

And how about the building in which it is stored?

Is that generally a privately owned building?

Alfred H. Hoddinott, Jr.:

Generally, I believe it is, Your Honor.

This one certainly was.

Harry A. Blackmun:

And what is the distinction between the numbers?

I notice in these cases they speak of Number 3, Number 7, and this kind of thing.

Alfred H. Hoddinott, Jr.:

There are, I believe, eight Customs bonded warehouses, Your Honor, and they are for varying purposes.

Some are just straight storage.

Some are manufacturing warehouses.