Fitzgerald v. Racing Assn. of Central Iowa
539 U.S. 103 (2003)

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CERTIORARI TO THE SUPREME COURT OF IOWA No. 02-695. Argued April 29, 2003-Decided June 9,2003

An Iowa law that, among other things, authorized racetracks to operate slot machines and imposed a graduated tax upon racetrack slot machine adjusted revenues, with a top rate that started at 20 percent and would automatically rise over time to 36 percent, left a 20 percent tax rate on riverboat slot machine adjusted revenues in place. Respondents, racetracks and a dog owners' association, filed a state-court suit challenging the law on the ground that the 20 percent/36 percent tax rate difference violated the Equal Protection Clause, U. S. Const., Arndt. 14, § 1. The District Court upheld the statute, but the Iowa Supreme Court reversed.


1. This Court has jurisdiction to review the state court's judgment, which does not rest independently upon state law. The state court's opinion says that Iowa courts should apply the same analysis in considering either state or federal equal protection claims. In such circumstances, this Court considers a state-court decision as resting upon federal grounds sufficient to support jurisdiction. P. 106.

2. Iowa's differential tax rate does not violate the Federal Equal Protection Clause. A law, such as Iowa's, which distinguishes for tax purposes among revenues obtained within a State by two enterprises conducting business in the State, is subject to rational-basis review. See Nordlinger v. Hahn, 505 U. S. 1, 11-12. The Iowa law, like most laws, might predominantly serve one general objective, e. g., rescuing racetracks from economic distress, while containing subsidiary provisions that seek to achieve other desirable (perhaps even contrary) ends as well, thereby producing a law that balances objectives but still serves the general objective when seen as a whole. And this law, seen as a whole, does what the state court says it seeks to do, namely, advance the racetracks' economic interests. A rational legislator might believe that the law's grant to the racetracks of authority to operate slot machines should help the racetracks economically-even if its simultaneous imposition of a tax on revenues means less help than respondents might like-and the Constitution grants legislators, not courts, broad authority (within the bounds of rationality) to decide whom they wish to help




with their tax laws and how much help those laws should provide. Once one realizes that not every provision in a single law must share a single objective, one has no difficulty finding the necessary rational support for the difference in tax rates here. Though harmful to the racetracks, it is helpful to the riverboats, which were also facing financial peril. This is not a case where the facts preclude any plausible inference that the reason for the different tax rates is to help the riverboat industry. Cf. Nord linger, supra, at 16. Allegheny Pittsburgh Coal Co. v. Commission of Webster Cty., 488 U. S. 336, distinguished. Pp. 106-110.

648 N. W. 2d 555, reversed and remanded.

BREYER, J., delivered the opinion for a unanimous Court.

Thomas J. Miller, Attorney General of Iowa, argued the cause for petitioner. With him on the briefs were Julie F. Pottorff, Deputy Attorney General, and Jeffrey D. Farrell and Jean M. Davis, Assistant Attorneys General.

Kent L. Jones argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Olson, Assistant Attorney General O'Connor, David English Carmack, and Judith A. Hagley.

Mark McCormick argued the cause for respondents.

With him on the brief were Thomas L. Flynn, Edward M. Mansfield, Stephen C. Krumpe, and Lawrence P. McLellan.*

*Briefs of amici curiae urging reversal were filed for the State of Missouri et al. by Jeremiah W (Jay) Nixon, Attorney General of Missouri, James R. Layton, State Solicitor, Alana M. Barragan-Scott, Assistant Attorney General, and by the Attorneys General for their respective jurisdictions as follows: William H. Pryor, Jr., of Alabama, Michael A. Cox of Michigan, Mike Hatch of Minnesota, Mike Moore of Mississippi, Patricia A. Madrid of New Mexico, Anabelle Rodriguez of Puerto Rico, Larry Long of South Dakota, Paul G. Summers of Tennessee, and William H. Sorrell of Vermont; and for the City of Bettendorf, Iowa, et al. by Thomas D. Waterman, Dennis W Johnson, and Robert N. Johnson III.

Briefs of amici curiae urging affirmance were filed for the City of Dubuque, Iowa, by Barry A. Lindahl; for Polk County, Iowa, by John P. Sarcone; and for the Institute for Justice by Clint Bolick, William H. Mellor, Dana Berliner, and Clark M. Neily.

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