Alabama Dept. of Revenue v. CSX Transp., Inc. (13-553)

argument 13-553

Alabama Dept. of Revenue v. CSX Transp., Inc.

Supreme Court of the United States 57 min 5 speakers 8 chapters transcribed 7 days ago official recording ↗

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What is the core dispute between Alabama and CSX over the 4R Act?

John G. Roberts 0:00

We'll hear argument next in case 13553, the Alabama Department of Revenue versus CSX Transportation. General Brasher.

General Brasher 0:09

Thank you, Mr. Chief Justice, and may it please the Court. The 4R Act does not make railroads most favored taxpayers. It instead balances the needs of carriers, shippers, and the general public. Opposition in this case does balance those interests, and CSX position does not. On the comparison class issue, we think the rule is this, and that's that courts should compare the taxation of railroads to the taxation of the mass of other businesses in the state, with a focus on whether a state is targeting or singling out railroads for a tax that the general mass of other businesses do not have to pay.

Unknown 0:42

Well, it said that in B-1, and it doesn't say that in B-4. Right, but

General Brasher 0:53

I think —

Unknown 0:54

Another tax that discriminates is all it says, whereas in 1 it said, as higher value true market than the ratio that the assessed value of other commercial and industrial property in the same assessment jurisdiction has. It's so specific there. And in 4, they just say, another tax that discriminates against a rail carrier.

General Brasher 1:15

But I think the question is whether there's any reason to read B4 to require a comparison class that is different than the one in B1, B2, and B3. Yeah,

Unknown 1:24

there's a good reason that they didn't spell out a specific

General Brasher 1:29

comparison class. Well, I don't think that that is a sufficient reason because I think that the comparison class that is spelled out in B1, B2, and B3 — if you apply it in before, it ensures that railroads are being treated fairly by tying them to a broad enough mass of politically influential taxpayers to keep their rates fair. And the competitor class here that CSX has proposed makes very little sense in the text of the statute. It also doesn't really make sense in light of what this Court said in CSX I, where the Court said that at the very least, we should be looking at similarly situated taxpayers.

Anthony M. Kennedy 2:05

But, General, I think On this question, CSX-1, I think your reasoning flies straight into the face of it, because CSX-1 talks about the notion that one through three is very different from four, and that you can't — this is just along the lines of what Justice Scalia says, that you can't draw anything about the meaning of four from one through three, given that they're clearly — they use different language, they're directed towards different things.

General Brasher 2:33

Well, I think the question here is whether you should be looking at general businesses or whether you should be looking at CSX's hand-picked class of competitors. And we've made the textual argument that that's the only thing that the text provides.

Unknown 2:49

Why do you say hand-picked? They're in the business of transporting goods. Motor carriers are and railroads are.

General Brasher 2:59

Well, because in this particular situation, CSX is comparing itself to motor carriers and water carriers, but it's not comparing itself to, for example, airlines or pipelines, which also compete with respect to CSX and transportation. But I think there's no reason to necessarily presume that competitors are similarly situated, especially for the purposes of state taxation. I mean, Amazon and Walmart are competitors, but for state taxation, they're not similarly situated. Well, if they're

John G. Roberts 3:24

not similarly situated, then the railroad loses, right? That's right. And I think for the purposes of this tax — That's a different question than saying what class they should be compared to. I don't think so, because I

General Brasher 3:34

think the question is — at the very least, the question is what the comparison class should be. And I think that CSX tells us that at the very least they should be similarly situated to —

Anthony M. Kennedy 3:44

But you see, when you say similarly situated, and I think that's right, but that seems to go to your second argument, which is, look, they're not similarly situated because there's another tax that falls upon motor carriers — that doesn't fall upon railroads, and that seems to me completely fair, but not on

General Brasher 4:05

the first question. Well, let me explain briefly on how I think it does go to the first question, which is that we're talking about a sales and use tax, which is a tax on a transaction.