The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_321/91_321.zd

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SUPREME COURT OF THE UNITED STATES
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No. 91-321
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ITEL CONTAINERS INTERNATIONAL CORPORA-
TION, PETITIONER v. JOE HUDDLESTON,
COMMISSIONER OF REVENUE
OF TENNESSEE
on writ of certiorari to the supreme court of
tennessee, middle division
[February 23, 1993]

  Justice Blackmun, dissenting.
  It is established -that a treaty should generally be
`construe[d] . . . liberally to give effect to the purpose
which animates it' and that `[e]ven where a provision of
a treaty fairly admits of two constructions, one restricting,
the other enlarging, rights which may be claimed under
it, the more liberal interpretation is to be preferred.'-
United States v. Stuart, 489 U. S. 353, 368 (1989), quoting
Bacardi Corp. of America v. Domenech, 311 U. S. 150, 163
(1940); see also Nielsen v. Johnson, 279 U. S. 47, 51-52
(1929).  This Court recognized in Japan Line, Ltd. v.
County of Los Angeles, 441 U. S. 434 (1979), that the
Container Conventions reflect a -national policy to remove
impediments to the use of containers as `instruments of
international traffic.'-  Id., at 453, quoting 19 U. S. C.
1322(a); see Customs Convention on Containers, Dec. 2,
1972, [1983] 988 U. N. T. S. 43 (hereinafter 1972 Conven-
tion); Customs Convention on Containers, May 18, 1956,
[1969] 20 U. S. T. 301, T. I. A. S. No. 6634 (hereinafter
1956 Convention).  Tennessee's tax clearly frustrates that
policy.
  In concluding that Tennessee's tax is not prohibited, the
majority studiously ignores the realities of container
leasing.  All petitioner's containers are dedicated to
international commerce, which means that they spend no
more than three months at a time in any one jurisdiction.
See 1972 Convention, Art. 4; 1956 Convention, Art. 3.
Furthermore, transferring containers to new lessees is an
integral part of any container-leasing operation.  A major
advantage of leasing rather than owning a container is
that a shipper may return the container to the lessor at
or near the shipment destination without having to
provide for the return transport of the container.  J. Tan,
Containers: The Lease-Buy Decision 13 (London, Interna-
tional Cargo Handling Co-ordination Association, 1983).
The lessor then transfers the container to another shipper
who needs to carry goods from that location or transports
the container to another location where it is needed.
Leased containers like those of petitioner are constantly
crossing national boundaries and are constantly being
transferred to new lessees at the ends of their journeys.
Whether Tennessee taxes the act of importation or the act
of transfer makes little difference with respect to leased
containers.  Each kind of tax imposes substantial -impedi-
ments to the use of containers as `instruments of interna-
tional traffic.'-  Japan Line, 441 U. S., at 453, quoting 19
U. S. C. 1322(a), and each, in my view, is prohibited by
the Container Conventions.
  This is also the view of the other signatory nations to
the Conventions.  Their consistent practice is persuasive
evidence of the Conventions' meaning.  See Air France v.
Saks, 470 U. S. 392, 396 (1985), quoting Choctaw Nation
of Indians v. United States, 318 U. S. 423, 431-432 (1943)
(-`[T]reaties are construed more liberally than private
agreements, and to ascertain their meaning we may look
beyond the written words to . . . . the practical construc-
tion adopted by the parties'-).  Neither Tennessee nor the
United States as amicus curiae can point to any other
jurisdiction that directly taxes the lease of containers used
in international commerce.  Under the European Value
Added Tax (-VAT-) system, as the majority acknowledges,
ante, at 5, no direct tax is imposed on the value of
international container leases.
  In an attempt to make international practice fit its
reading of the Conventions, the majority mistakenly
equates the European VAT on goods with Tennessee's tax
on containers.  See ante, at 5-6.  The European VAT is
analogous to an American sales tax but is imposed on the
value added to goods at each stage of production or
distribution rather than on their sale price.  See Trinova
Corp. v. Michigan Dept. of Treasury, 498 U. S. 358,
365-366, n. 3 (1991).  The act of transporting goods to
their place of sale adds to their value and the cost of
transportation is reflected in their price.  An American
sales tax reaches the cost of transportation as part of the
sale price of goods.  The European VAT taxes the cost of
transportation as part of the value added to goods during
their distribution.  Tennessee's analogue to the European
VAT is its sales tax on goods imported by container, not
its direct tax on the proceeds of container leases.  Peti-
tioner does not argue that Tennessee must refrain from
imposing a sales tax on goods imported by container.  It
argues, instead, that like every other party to the Conven-
tions Tennessee may not impose a direct tax on containers
themselves.
  Even if Tennessee's tax did not violate the Container
Conventions, it would violate the Foreign Commerce
Clause by preventing the United States from -speaking
with one voice- with respect to the taxation of containers
used in international commerce.  See Japan Line, 441
U. S, at 452; Container Corp. of America v. Franchise Tax
Bd., 463 U. S. 159, 193 (1983).  This Court noted in
Japan Line that the Conventions show -[t]he desirability
of uniform treatment of containers used exclusively in
foreign commerce.-  441 U. S., at 452.  Tennessee's tax
frustrates that uniformity.
  The Court correctly notes that the Solicitor General's
decision to file an amicus brief defending the tax -`is by
no means dispositive.'-  Ante, at 15, quoting Container
Corp., 463 U. S., at 195-196.  Indeed, such a submission,
consistent with the separation of powers, may not be
given any weight beyond its power to persuade.  The
constitutional power over foreign affairs is shared by
Congress and the President, see, e.g., U. S. Const., Art.
I, 8, cl. 11 (Congress shall have the power to declare
war); Art. II, 2, cl. 2 (President shall have the power, by
and with the advice and consent of the Senate, to make
treaties); and Art. II, 3 (President shall receive ambassa-
dors), but the power to regulate commerce with foreign
nations is textually delegated to Congress alone.  Art. I,
8, cl. 3.  -It is well established that Congress may
authorize States to engage in regulation that the Com-
merce Clause would otherwise forbid,-  Maine v. Taylor,
477 U. S. 131, 138 (1986) (emphasis added), but the
President may not authorize such regulation by the filing
of an amicus brief.
  While the majority properly looks to see whether
Congress intended to permit a tax like Tennessee's, it
mistakenly infers permission for the tax from Congress'
supposed failure to prohibit it.  Ante, at 14-15.  -[T]his
Court has exempted state statutes from the implied
limitations of the [Commerce] Clause only when the
congressional direction to do so has been `unmistakably
clear.'-  Taylor, 477 U. S., at 139, quoting South-Central
Timber Development, Inc. v. Wunnicke, 467 U. S. 82, 91
(1984).  -The need for affirmative approval is heightened
by the fact that [Tennessee's tax] has substantial ramifica-
tions beyond the Nation's borders.-  Wunnicke, 467 U. S.,
at 92, n. 7.  Not only does the majority invert this
analysis by finding congressional authorization for the tax
in congressional silence, but it finds silence only by
imposing its own narrow reading on the Conventions.
  The majority invites States that are constantly in need
of new revenue to impose new taxes on containers.  The
result, I fear, will be a patchwork of state taxes that will
burden international commerce and frustrate the purposes
of the Container Conventions.  I respectfully dissent.