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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. S 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 91-321 - DISSENT
2 ITEL CONTAINERS INT'L CORP. v. HUDDLESTON ____
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 "impediments to the use of containers as `instruments
of international traffic.'" Japan Line, 441 U. S., at 453, quoting 19 U. S. C. __________
S1322(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 construction
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 91-321 - DISSENT
ITEL CONTAINERS INT'L CORP. v. HUDDLESTON 3 ____
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. Petitioner 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 Conventions 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 91-321 - DISSENT
4 ITEL CONTAINERS INT'L CORP. v. HUDDLESTON ____
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, S8, cl. 11 (Congress shall have the power to declare war); Art.
II, S2, cl. 2 (President shall have the power, by and with the advice and
consent of the Senate, to make treaties); and Art. II, S3 (President shall
receive ambassadors), but the power to regulate commerce with foreign nations is
textually delegated to Congress alone. Art. I, S8, cl. 3. "It is well
established that Congress may authorize States to engage in regulation that the ________
Commerce 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 ramifications 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 91-321 - DISSENT
ITEL CONTAINERS INT'L CORP. v. HUDDLESTON 5 ____
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.