Legislation of Kentucky laying a tax of ten cents per pound on
all oleomargarine sold in the State was assailed as invalid under
the due process clause of the Fourteenth Amendment and also under
the Kentucky Bill of Rights. A permanent injunction was granted on
the latter ground without deciding the federal question.
Held:
1. Upon the facts found, and principles laid down by the Court
of Appeals of Kentucky, the statute, although in form a taxing law,
is in reality a prohibition of sale, and hence invalid under the
state constitution. P.
290 U. S.
178.
2. The decree should be modified to permit the state authorities
to apply for relief in the future should it appear that the statute
has been sustained by the state court as valid under the state
constitution, or that, by reason of a change in circumstances, it
may be regarded as imposing a valid tax. P.
290 U. S. 179.
5 F. Supp.
4 modified and affirmed.
Appeal from a decree of perpetual injunction entered by the
District Court of three judges in a suit to restrain taxing
officials from enforcing a tax.
Page 290 U. S. 178
PER CURIAM.
This suit was brought by respondent, Field Packing Company,
against the State Tax Commission of Kentucky and its members to
restrain the enforcement of that part of Chapter 158 of the Acts of
the 1932 Session of the General Assembly of Kentucky which imposed
a tax of 10 cents per pound on all oleomargarine sold within the
state. The statute was assailed as being in violation of the Bill
of Rights of the Constitution of the state and of the due process
clause of the Fourteenth Amendment of the Constitution of the
United States. The District Court, composed of three judges (28
U.S.C. § 380) granted an interlocutory injunction and, on
final hearing, entered a decree making the injunction
permanent.
The District Court held that the statute, although in the form
of a taxing law, was in reality a prohibition of the sale of
oleomargarine in Kentucky, and hence was invalid under the state
constitution. The question presented under the Federal Constitution
was not decided.
Siler v. Louisville & Nashville R.
Co., 213 U. S. 175,
213 U. S. 191;
Hurn v. Oursler, 289 U. S. 238,
289 U. S.
243-244.
Upon the facts found, the decision appears to be supported by
principles laid down by the Court of Appeals of Kentucky, but, so
far as the application of the state constitution is concerned, the
ultimate determination of the validity of the statute necessarily
rests with that court. Further, a change in circumstances may
create a
Page 290 U. S. 179
situation different from that to which the opinion below was
addressed.
In order to prevent the possibility that the decree may operate
injuriously in the future, the decree will be modified by providing
that the members of the state tax commission, or that commission,
may apply at any time to the court below, by bill or otherwise, as
they may be advised, for a further order or decree, in case it
shall appear that the statute has been sustained by the state court
as valid under the state constitution, or that, by reason of a
change in circumstances the statute may be regarded as imposing a
valid tax.
See Minnesota Rate Case, 230 U.
S. 352, at
230 U. S.
473.
Decree modified as stated in the opinion and, as modified,
affirmed.
