Commonwealth Brands, Inc. v. Morgan
110 So. 3d 752
| Miss. | 2013Background
- Mississippi enacts NSM law in 2009 imposing a fee on nonsettling-manufacturer cigarettes sold or distributed in Mississippi, including for sale outside the state.
- Commonwealth Brands and Corr-Williams challenge the NSM fee as violating Commerce and Due Process Clauses in Chancery Court.
- Chancery Court issues TRO and later preliminary injunction, finding likely constitutional merits and potential irreparable harm to plaintiffs.
- Legislature amended NSM law in 2011 to remove explicit خارج-state application; court proceedings continue on retroactivity and final judgment.
- Court below concludes NSM violates Commerce Clause internal consistency; finds nexus, apportionment, non-discrimination, and service-related justifications insufficient under Jefferson Lines.
- Mississippi Supreme Court reverses, holds NSM not internally consistent, and remands for judgment consistent with the opinion; discusses 1983/1988 remedies and requests for fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Commerce Clause internal consistency | NSM imposes dual fees on interstate cigarette distribution. | NSM statute fairly apportions and relates to Mississippi activities. | NSM fails internal-consistency; violates Commerce Clause. |
| Extra-territorial due process | NSM asserts extraterritorial reach by taxing out-of-state distribution. | Taxation is tied to in-state activities and administration. | Issue deemed moot/not resolved on merits. |
| Section 1983/1988 remedies | Plaintiffs seek attorney fees under §1988 for §1983 challenges. | State remedy via Rule 57 declaratory actions suffices; §1983/1988 inappropriate. | State remedy exists; §1983/1988 claims mooted; no fees. |
| Final judgment and unpaid fees | Final judgment must account for unpaid NSM fees, interest, penalties. | Judgment as entered aligned with mootness post-remedies. | Remainder issues mooted; not addressed in result. |
| Monetary judgment on cross-appeal | State seeks monetary judgment for fees and interest under 11-13-15. | Judgments should reflect the injunctions and final disposition. | Reversed/remanded; monetary issue unresolved. |
Key Cases Cited
- National Private Truck before the Oklahoma Tax Commission, 515 U.S. 582 (U.S. 1995) (Tax Injunction Act; §1983 claims barred when adequate state remedy exists)
- Okla. Tax Comm’n v. Jefferson Lines, Inc., 514 U.S. 175 (U.S. 1995) (internal and external consistency; double taxation concern)
- Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (U.S. 1977) (Commerce Clause four-part test)
- Fondren v. State Tax Commission, 387 So.2d 712 (Miss. 1980) (state remedy bars §1983 action in state tax cases)
- Marx v. Truck Renting and Leasing Assoc., Inc., 520 So.2d 1333 (Miss. 1987) (concurrent jurisdiction theory over §1983 challenges to state taxes)
- Burrell v. Mississippi State Tax Commission, 536 So.2d 848 (Miss. 1988) (overruled Marx/Fondren stance; but later National Private Truck clarified)
- Rosewell v. LaSalle Nat’l Bank, 450 U.S. 503 (U.S. 1981) (minimum procedural criteria for adequate state remedy)