WASHINGTON -- In a surprise move, the Supreme Court yesterday agreed to review the constitutionality of an Oregon law that imposes a $2.25 per ton special fee on disposal of waste from other states but only an 85 cents per ton fee on disposal of waste generated within the state.
The justices also announced they had agreed to review whether a Montana tax on the possession and storage of dangerous drugs, imposed separately from criminal penalties, violates the U.S. Constitution's prohibitions on double jeopardy.
The court's 1993-94 term officially begins Monday. A court spokesman said yesterday's announcement will allow the disputes to be put on the court's January argument schedule. But no date has been announced for arguments in the cases.
Oregon Waste Systems Inc. v. Oregon Department of Environmental Quality challenges the constitutionality of fees enacted by the state legislature in 1989. Under the Oregon law, the state environmental quality department was directed to set the fee on the basis of "the costs to the state of Oregon and its political subdivisions of disposing of solid waste generated out-of-state."
Oregon Waste Systems challenged the fee as a violation of the U.S. Constitution's commerce clause. which prohibits states from erecting barriers to the free flow of goods and services across state lines.
But the Oregon Court of Appeals rejected the challenge, ruling that the fee is "based on and applied to the provision of a narrow range of state services that are directly connected to the activity on which the fees are imposed."
The state Supreme Court affirmed the lower court ruling.
The U.S. Supreme Court has wrestled with a similar issue before. Ruling in Chemical Waste Management Inc. v. Hunt, the court in 1992 struck down an Alabama law that taxed the disposal of hazardous waste generated outside the state but did not tax the disposal of Alabama-generated waste. The justices noted then that the court repeatedly has stated that "a state may not tax a transaction or incident more heavily when it crosses state lines than when it occurs entirely within the state."
In seeking Supreme Court review of the Oregon law, Oregon Waste Systems reasoned that, if allowed to stand. the Oregon high court's ruling would allow a state to impose highway tolls on out-of-state vehicles while exempting in-state vehicles.
The Montana case. Department of Revenue v. Kurth Ranch, involving marijuana, stems from enforcement of the state's Dangerous Drug Tax Act. The law, which covers the possession or storage of drugs, provides for a tax of 10% of the assessed market value of the drugs, or $100 per ounce of marijuana.
The extended Kurth family was in the marijuana-growing business at its ranch in central Montana. The operation was uncovered in 1987 when law enforcement officials seized 2,155 marijuana plants. 1,881 ounces of harvested marijuana, and several gallons of marijuana derivatives.
Following the Kurths' arrest, the Montana Department of Revenue assessed taxes on the seized goods under the state drug tax law.
The Kurths in 1988 pleaded guilty to state criminal charges and were sentenced in state court. They subsequently filed for bankruptcy. The federal bankruptcy court found that the Kurths owed $208,105 in drug taxes. But the court went on to determine that the tax assessment was a "second punishment" for conduct for which the Kurths already had been punished.
Consequently, the tax assessment violated the U.S. Constitution's double jeopardy clause. The Fifth Amendment provides that citizens cannot "be twice put in jeopardy of life or limb" in disputes arising from the same criminal act.
The bankruptcy court's ruling was affirmed by a federal district court and the U.S. Court of Appeals for the Ninth Circuit.
The state revenue department's appeal to the U.S. Supreme Court is based in part upon a 1992 Montana Supreme Court ruling that held the drug tax is an excise tax and not a punishment. The revenue department also noted that the federal government has had a similar $100 per ounce tax on marijuana, which the U.S. Supreme Court in 1950 said was a tax and not a penalty or punishment.
