1. A suit to restrain the enforcement of a State tax on the
purchase and sale of goods at Army Post Exchanges, upon the ground
that such Exchanges are federal instrumentalities and that
therefore the state statute imposing the tax is, as applied to
them, unconstitutional, is a suit cognizable by a three-judge
District Court under Jud.Code § 266. Pp.
316 U. S. 487,
316 U. S.
490.
2. An appeal from a decree of injunction granted by a
three-judge District Court under Jud.Code § 266 lies directly to
this Court, not to the Circuit Court of Appeals. P.
316 U. S.
490.
3. Where appeals in such a case were taken erroneously to the
Circuit Court of Appeals, and from that court to this, and the time
within which a direct appeal from the three-judge District Court to
this Court under Jud.Code § 266 had elapsed, the decree of the
Circuit Court of Appeals was vacated, and the cause remanded to the
District Court for the entry of a fresh decree from which a timely
appeal might be taken. P.
316 U. S. 491.
121 F.2d 631 vacated.
Certiorari,
post, p. 653, to review a decree sustaining
an injunction against enforcement of a state sales tax as applied
to the purchase and sale of goods at Army Post Exchanges.
Page 316 U. S. 487
MR. JUSTICE BLACK delivered the opinion of the Court.
A statute of South Carolina imposes a license tax for the
privilege of selling tobacco products, playing cards, soft drinks,
and other enumerated articles. [
Footnote 1] The United States and two Army officers
brought this suit against the members of the South Carolina Tax
Commission to enjoin enforcement of this statute with respect to
activities of United States Army Post Exchanges located within the
state. The bill alleged that post exchanges are instrumentalities
of the United States, operating as voluntary unincorporated
organizations under the direction and supervision of the United
States Army and in accordance with rules and regulations
promulgated by the Secretary of War; that the respondents had
ordered that the tax be applied to the purchase and sale of
commodities by the exchanges; that enforcement would inflict
immediate and irreparable damage for which the complainants were
without any plain, speedy, and efficient remedy in the courts of
South Carolina; that the Congressional consent given by a recent
federal statute (54 Stat. 1059) for the imposition of certain kinds
of state taxes within "Federal areas" did not extend to the
imposition of taxes on the purchases and sales of commodities by
post exchanges, and that the threatened application of the South
Carolina statute would interfere with the activities of the United
States Government, and would be repugnant to the Constitution of
the United States. The respondents' answer admitted the threatened
enforcement and the absence of remedy in the South Carolina courts,
but denied that post exchanges are instrumentalities of the United
States and that application of the statute to them would be
repugnant to the United States Constitution. With respect to the
federal statute
Page 316 U. S. 488
referred to in the complaint, the answer stated:
". . . no consent of Congress is necessary to permit the State
to levy its lawful tax . . . , the territorial immunity having been
removed by Public Act No. 819, 76th Congress."
A Federal District Court of three judges, satisfying the
requirements of Section 266 of the Judicial Code, [
Footnote 2] heard the case and granted the
injunction sought by the complainants.
37 F.
Supp. 972. The opinion accompanying the decree stated, however,
that the three judges were of the view that a district judge alone
had exclusive jurisdiction to pass upon the case, and that the
decree should therefore be considered
"not as the decree of a three-judge court, but as his decree,
from which appeal lies to the Circuit Court of Appeals, and not to
the Supreme Court."
Nevertheless, all three judges signed the decree
"so that, in the event that it should hereafter be determined
that the case was one for three judges under the statute, an
appropriate decree will have been entered."
37 F. Supp.
972, 977. The Circuit Court of Appeals, of the same view on the
question of jurisdiction, granted an appeal and affirmed. 121 F.2d
631.
If no more than a question of construction of a federal statute
had been involved, there would have been no necessity for a
three-judge court pursuant to Section 266.
Ex
Page 316 U. S. 489
parte Buder, 271 U. S. 461,
271 U. S.
466-467. As a basis for its conclusion that a court of
one District Judge was the appropriate forum here, the District
Court stated that the
"question involved is whether, under the provisions of Public
Act No. 819, 76th Cong., 3d Sess., . . . the taxes imposed by . . .
the state statute are applicable to and collectible from the United
States Army Post Exchange at Fort Jackson, Richland County, South
Carolina. [
Footnote 3]"
And both courts below thought that disposition of the case
required only a determination of the statute of post exchanges
within the meaning of the federal statute.
37 F.
Supp. 972, 973, 977; 121 F.2d 631, 632. But the complainants
sought to restrain the state officers from enforcing the state
statute upon the ground of the unconstitutionality of the
threatened application. Not only was unconstitutionality the ground
asserted by the complaints for the relief sought, but it appears
that the relief awarded was predicated on the same ground.
Cf.
Wilentz v. Sovereign Camp, 306 U. S. 573,
306 U. S.
576.
For the federal act, so far as here relevant, merely declares
that "no person shall be relieved from liability" for certain State
taxes "on the ground that the sale or use, with respect to which
such tax is levied, occurred in whole or in part within a Federal
area." A proviso adds that the "Act shall not be deemed to
authorize the levy or collection of any tax on or from the United
States or any instrumentality thereof." The complainants
asserting
Page 316 U. S. 490
that the post exchange is a federal instrumentality to which the
statutory consent does not apply rest their entire case upon a
nonstatutory ground: the immunity from state taxation which they
contend must be given, under the Constitution, to the post exchange
as an instrumentality of the United States. And, notwithstanding
its assertion that only the meaning of the federal statute was
involved, the District Court nevertheless found it necessary to
include in the opinion accompanying the decree a statement that the
threats and attempts to enforce the State statute "constitute an
interference with the activities of the United States, and are
unconstitutional."
Here, a substantial charge has been made that a state statute,
as applied to the complainants, violates the Constitution. Under
such circumstances, we have held that relief in the form of an
injunction can be afforded only by a three-judge court pursuant to
Section 266.
Stratton v. St. Louis S.W. Ry. Co.,
282 U. S. 10;
Ex parte Bransford, 310 U. S. 354,
310 U. S. 361.
And this is not, like
Phillips v. United States,
312 U. S. 246, a
case in which the state officials threatened to engage in conduct
which state law could not reasonably be construed to authorize. The
complainants in this case sought interlocutory and permanent
injunctions against "the enforcement, operation, or execution" of a
"statute of a State;" they sought to restrain the action of
officers "of such State in the enforcement or execution of such
statute;" and their attack was based entirely "upon the ground of
the unconstitutionality of such statute."
Since there was such complete satisfaction of the conditions
which make Section 266 applicable, the cause was a proper one for a
three-judge court, and appeal did not lie to the Circuit Court of
Appeals. But a direction by us to the Circuit Court of Appeals to
dismiss the appeal
Page 316 U. S. 491
which the petitioners brought to it would, without more,
terminate the litigation. For the time within which a direct appeal
might have been brought to this Court under Section 266 has
elapsed. In the present circumstances, however, we think the
petitioners' right to such an appeal should be preserved.
Cf.
Phillips v. United States, supra, 312 U. S. 254. The
judgment below is therefore vacated, and the cause remanded to the
district court for the entry of a fresh decree from which a timely
appeal may be taken if the petitioners so desire.
It is so ordered.
[
Footnote 1]
Code of Laws of South Carolina (1932) Vol. II, Sections
2527-2557.
[
Footnote 2]
28 U.S.C. § 380. This section provides in part:
"No interlocutory injunction suspending or restraining the
enforcement, operation, or execution of any statute of a State by
restraining the action of any officer of such State in the
enforcement or execution of such statute . . . shall be issued or
granted . . . unless the application for the same shall be
presented to . . . and shall be heard and determined by three
judges, of whom at least one shall be a justice of the Supreme
Court or a circuit judge, and the other two may be either circuit
or district judges, and unless a majority of said three judges
shall concur in granting such application. . . . An appeal may be
taken direct to the Supreme Court of the United States from the
order granting or denying . . . an interlocutory injunction in such
case."
[
Footnote 3]
There was a stipulation between the parties that, if the
complainants should prevail with respect to the post exchanges at
Fort Jackson, the relief granted should be applicable to certain
other post exchanges, ships' stores, and officers' clubs. Both
courts below proceeded on the assumption, which we accept here,
that all of these organizations were located in "Federal areas." To
the extent, if any, that this assumption is incorrect, Public Act
No. 819 has no relevance whatsoever.