1. The United States owned the fertilizer which it shipped into
Florida for distribution pursuant to the Soil Conservation and
Domestic Allotment Act, and in respect of such distribution was
acting in a governmental capacity. P.
319 U. S.
444.
2. A State is without Constitutional power to exact an
inspection fee -- although the design of the inspection service was
to protect consumer from fraud -- in respect of fertilizer which
the United States owns and is distributing within the State
pursuant to provisions of the Soil Conservation and Domestic
Allotment Act. Const., Art. VI. P.
319 U. S.
447.
3. The instrumentalities and property of the United States used
by it in governmental activities are immune from state taxation or
regulation unless Congress affirmatively provides otherwise. P.
319 U. S. 448.
47 F. Supp. 552 affirmed.
Appeal from a decree of a District Court of three judges
enjoining state officers from enforcing against the United States
the provisions of the Florida Commercial Fertilizer Law.
Page 319 U. S. 442
MR. JUSTICE REED delivered the opinion of the Court.
This record presents for review the action of a specially
constituted district court in enjoining, on final hearing, the
Commissioner of Agriculture of the Florida and his agents from
enforcing against the United States the provisions of the Florida
Commercial Fertilizer Law. Judicial Code, §§ 266 and 238.
By this Florida act, the sale or distribution of commercial
fertilizer is comprehensively regulated. There is included a
requirement of a label or stamp on each bag evidencing the payment
of an inspection fee. Unless so identified, the bags may be seized
and sold by the sheriff of the county. The purpose of the
legislation is to assure the consumers that they will obtain the
quality of fertilizer for which they pay and that substances
deleterious to the land will be excluded from the material sold.
Florida Statutes, 1941, c. 576, F.S.A. § 576.01
et
seq.
The United States, under the direction of the Secretary of
Agriculture, acting under the provisions of the Soil Conservation
and Domestic Allotment Act, [
Footnote 1] purchased commercial fertilizer outside of
Florida and undertook its distribution to consumers within that
state during the fiscal year ending June 30, 1943, without state
inspection and without paying for or affixing to the bags the
inspection stamps required by the Florida act. This distribution
was a part of the national soil conservation program. [
Footnote 2] Through
Page 319 U. S. 443
the use of fertilizers with a high content of superphosphate on
winter legumes, the plan sought, by plowing under the legumes, to
obtain scarce nitrogen for the commercial crops which were to
follow. To secure a heavy growth of the legumes before plowing
time, the fertilizer should be applied and the legumes planted
prior to October 15th. Farmers who desire to participate in the
conservation program follow the required practices under the
supervision of county committees or associations which are federal
instrumentalities for carrying out the plans. Section 8(b).
The soil-building and soil-conserving practices, when carried
out by a participating farmer, entitle him to a grant or benefit
payment. Section 8. In order that the farmer may earn this grant,
phosphate fertilizers are furnished to him in advance by the
Government through the county committee. The cost is deducted from
the grant. For the purpose of carrying out the program, the United
States caused fertilizers purchased by its agents to be shipped
into Florida to the local agricultural associations for such
distribution. As the sacks were without stamps, the Florida
Commissioner of Agriculture, on September 10, 1942, gave a "stop
sale" notice to the county agricultural association to cease
distribution.
The Attorney General of the United States directed the filing of
a complaint against the Florida officials who are charged with the
enforcement of the Florida law. The complaint set out the "stop
sale" notice, the refusal of numerous persons utilized by the
United States in its work to proceed with the distribution of the
fertilizer without the protection of an injunction, the frustration
of the conservation program of the Secretary of Agriculture, the
imminency of irreparable damage because of the necessity of prompt
distribution of the fertilizer, and the lack of any efficient
remedy other than a temporary and permanent injunction. Florida
objected to the complaint for failure to state a cause of action,
and set up numerous defenses,
Page 319 U. S. 444
which have now been reduced by the specification of errors and
the brief to the fundamental one that the United States, as to
fertilizer to be used upon Florida soil, is not exempt by
Constitution or statute from compliance with reasonable state
regulation or the payment of reasonable inspection fees. At any
rate, it is urged, inspection fees may be collected under the facts
heretofore stated as the Government is merely a conduit or service
agent for the fertilizer manufacturer or the Florida farmer.
The District Court disposed, we think, of the conduit or service
agent argument by its finding that the Government "became the
owner" of the fertilizer at the manufacturing plants, which are
outside the state, and was engaged in distributing it in Florida as
a part of the national soil conservation program. In promoting soil
conservation by precept and demonstration through the Department of
Agriculture, the United States, as in its other authorized
activities, acts in a governmental capacity. [
Footnote 3] Prior to the Soil Conservation Act,
Congress had, as a matter of custom, put money and responsibility
in the hands of the executive to promote agriculture in the most
general sense. It is commonplace for appropriations to be made for
loans to farmers. [
Footnote 4]
The distribution of fertilizer owned by the United States as a
charge against grants to aid soil conservation is of the same
character. Section 8(b).
Cf. United States v. Butler,
297 U. S. 1,
297 U. S. 65,
297 U. S. 68. No
inference of fact or conclusion of law, we think, can be properly
drawn from the circumstances of this fertilizer
Page 319 U. S. 445
distribution other than that the United States was the owner of
the fertilizer in Florida awaiting distribution.
The other findings are substantially in accord with the
allegations of the complaint, and are not contested. The District
Court, one judge dissenting, enjoined the application of Florida
law to the above described acts of the United States on the ground
of federal immunity from state regulation.
Since the United States is a government of delegated powers,
none of which may be exercised throughout the Nation by any one
state, it is necessary for uniformity that the laws of the United
States be dominant over those of any state. Such dominancy is
required also to avoid a breakdown of administration through
possible conflicts arising from inconsistent requirements. The
supremacy clause of the Constitution states this essential
principle. Article VI. A corollary to this principle is that the
activities of the Federal Government are free from regulation by
any state. [
Footnote 5] No
other adjustment of competing enactments or legal principles is
possible.
Appellants' argument in support of the inspection fee is that
neither the Constitution nor any federal statute exempts the United
States from paying reasonable state inspection fees to support
permissible regulation of commercial fertilizer. Such inspections
are allowable where the United States is not the owner.
Patapsco Guano Co. v. North Carolina, 171 U.
S. 345;
Red "C" Oil Co. v. North Carolina,
222 U. S. 380,
222 U. S. 392.
Appellants urge that, since they are allowable to protect the
farmers against the imposition of fertilizers of quality possibly
inferior to the manufacturers' representations, the inspection fee
should
Page 319 U. S. 446
be paid on fertilizers distributed by the United States, where
the federal law is silent as to any exemption on the ground of
sovereignty. Reliance is placed upon
Graves v. New York ex rel.
O'Keefe, 306 U. S. 466.
It lies within Congressional power to authorize regulation,
including taxation, by the state of federal instrumentalities.
[
Footnote 6] No such permission
is granted here.
Compare 56 Stat. 664. Congress may
protect its agencies from the burdens of local taxation. [
Footnote 7] There are matters of local
concern within the scope of federal power which, in the silence of
Congress, may be regulated in such manner as does not impair
national uniformity. [
Footnote
8] There are federal activities which, in the absence of
specific Congressional consent, may be affected by state
regulation. [
Footnote 9]
Graves v. New York ex rel. O'Keefe, supra, upon which
appellants rely so strongly, is in this latter group. In that case,
an employee of the Home Owners' Loan Corporation, a Federal agency
which was assumed to have the same immunity from state taxation as
the United States itself, sought exemption from New York's income
tax on the ground that a tax upon the employee's salary imposed an
unconstitutional burden upon the federal government. This position
was not without precedent. [
Footnote 10] Upon full reexamination of the authorities
and the reasoning upon which the earlier cases had allowed the
employees
Page 319 U. S. 447
of one sovereignty freedom from the exactions of the other, this
Court declared that, in the absence of a federal declaration of
immunity from state taxation, no such
"tangible or certain economic burden is imposed on the [United
States] as would justify a court's declaring that the [employee] is
clothed with the implied constitutional tax immunity of the
government by which he is employed."
306 U.S. at
306 U. S.
486.
These inspection fees are laid directly upon the United States.
They are money exactions the payment of which, if they are
enforceable, would be required before executing a function of
government. Such a requirement is prohibited by the supremacy
clause. We are not dealing, as in
Graves v. New York ex rel.
O'Keefe, supra, with a tax upon the salary of an employee, or
as in
Alabama v. King & Boozer, 314 U. S.
1, with a tax upon the purchases of a supplier, or as in
Penn Dairies, Inc. v. Milk Control Comm'n, 318 U.
S. 261, with price control exercised over a contractor
with the United States. In these cases, the exactions directly
affected persons who were acting for themselves, and not for the
United States. These fees are like a tax upon the right to carry on
the business of the post office or upon the privilege of selling
United States bonds through federal officials. Admittedly the state
inspection service is to protect consumers from fraud, but, in
carrying out such protection, the federal function must be left
free. [
Footnote 11] This
freedom is inherent in sovereignty. The silence of Congress as to
the subjection of its instrumentalities, other than the United
States, to local taxation or regulation is to be interpreted in the
setting of the applicable
Page 319 U. S. 448
legislation and the particular exaction.
Shaw v.
Gibson-Zahniser Oil Corp., 276 U. S. 575,
276 U. S. 578.
But where, as here, the governmental action is carried on by the
United States itself and Congress does not affirmatively declare
its instrumentalities or property subject to regulation or
taxation, the inherent freedom continues.
Affirmed.
MR. JUSTICE BLACK concurs in the result.
[
Footnote 1]
49 Stat. 163, 1148; 50 Stat. 329; 55 Stat. 257, 860; 56 Stat.
664.
[
Footnote 2]
Sections 7 and 8 of the Soil Conservation and Domestic Allotment
Act, as amended.
[
Footnote 3]
Graves v. New York ex rel. O'Keefe, 306 U.
S. 466,
306 U. S. 477;
Pittman v. Home Owners' Corp., 308 U. S.
21,
308 U. S. 32;
Federal Land Bank v. Bismarck Co., 314 U. S.
95,
314 U. S.
102.
[
Footnote 4]
Establishment of the Department of Agriculture, 12 Stat. 387; of
colleges of agriculture, 26 Stat. 417; Federal Farm Loan Act, 39
Stat. 360 40 Stat. 431; Federal Intermediate Credit Banks, 42 Stat.
1454; Federal Farm Board, 46 Stat. 11; boll weevil grant, 45 Stat.
539, 565.
[
Footnote 5]
McCulloch v.
Maryland, 4 Wheat. 316,
17 U. S. 427;
Ohio v. Thomas, 173 U. S. 276,
173 U. S. 283;
Owensboro National Bank v. Owensboro, 173 U.
S. 664,
173 U. S. 667;
Johnson v. Maryland, 254 U. S. 51;
Arizona v. California, 283 U. S. 423,
283 U. S.
451.
[
Footnote 6]
Owensboro National Bank v. Owensboro, 173 U.
S. 664,
173 U. S. 667;
Baltimore National Bank v. Tax Comm'n, 297 U.
S. 209;
Pacific Coast Dairy, Inc. v. Dept. of
Agriculture, 318 U. S. 285.
[
Footnote 7]
Pittman v. Home Owners' Corp., 308 U. S.
21, and cases cited.
[
Footnote 8]
Standard Dredging Corp. v. Murphy, ante, p.
319 U. S. 306;
California v. Thompson, 313 U. S. 109.
[
Footnote 9]
Alabama v. King & Boozer, 314 U. S.
1,
314 U. S. 9, and
cases cited.
[
Footnote 10]
Dobbins v.
Commissioners, 16 Pet. 435;
Collector
v. Day, 11 Wall. 113;
New York ex rel. Rogers
v. Graves, 299 U. S. 401;
Brush v. Commissioner, 300 U. S. 352.
[
Footnote 11]
Similar conclusions have been reached in adjacent fields. The
state is powerless to punish its citizens for acts done in
exclusively federal territory.
Pacific Coast Dairy, Inc. v.
Dept. of Agriculture, 318 U. S. 285. A
state cannot tax land of the United States situated within the
state, even though the state has not ceded sovereignty to the
United States.
Van Brocklin v. Tennessee, 117 U.
S. 151,
117 U. S.
177.