Graphic Packaging Corporation v. Glenn Hegar, Comptroller of Public Accounts of the State of Texas And Ken Paxton, Attorney General of the State of Texas
03-14-00197-CV
| Tex. App. | May 8, 2015Background
- Amicus brief by Interstate Commission for Juveniles, Association of Administrators of the Interstate Compact on the Placement of Children, and Jeffrey Litwak supporting Graphic Packaging in appeal from Travis County district court summary judgment.
- Central legal question: whether Texas may apply a subsequently enacted state statute to override the Multistate Tax Compact’s apportionment-election provision (Article III election) or whether the Compact, as an interstate contract/statute, preempts conflicting state law.
- Amici emphasize that interstate compacts are both statutory law and contracts among sovereigns; member states cannot unilaterally amend or nullify compact obligations by later state legislation.
- Amici argue the trial court failed to apply settled compact jurisprudence and thus erred in permitting Texas law to defeat the Compact’s express election; they urge reversal and summary judgment for Appellant.
- Brief explains consequences: allowing unilateral state changes would undermine uniformity and enforceability of many compacts (including those affecting juvenile supervision and child placement) and threaten interstate cooperative governance.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a state may apply later-enacted state law that conflicts with an interstate compact | Graphic Packaging: No — compact is a binding interstate contract/statute and supersedes conflicting state law; Article III election must be honored | Texas/Comptroller: State law may govern if compact did not require congressional consent or if compact is silent about overriding state law | Amici position (urged holding): Compact controls; member state cannot unilaterally override the Article III election by enacting conflicting state statute; trial court erred and should be reversed |
| Whether absence of congressional consent changes enforceability of compacts against unilateral state modification | Graphic Packaging: No — compacts remain binding contracts among states even without congressional consent; silence on consent does not permit unilateral amendment | Texas/Comptroller: Compacts lacking congressional consent may be less binding or subject to state law depending on state conduct | Held (per amici argument): Congressional consent affects federal status but not the core rule that member states cannot unilaterally alter compact terms; compacts without consent still enforceable among states |
| Whether compact silence about application of state law creates ambiguity permitting state law to apply | Graphic Packaging: No — express compact terms (e.g., Article III election) govern; silence does not create permission for conflicting state law | Texas/Comptroller: Ambiguity or silence allows state law to operate and displace compact application | Held (per amici argument): Silence is not a license to override clear compact terms; compact prevails unless it expressly reserves state-law application |
| Whether the Compact is a mere uniform law subject to unilateral amendment | Graphic Packaging: Compact is not a mere uniform law; it is a contract requiring collective amendment or withdrawal per compact terms | Texas/Comptroller: Treats the Compact more like uniform legislation that a state may alter | Held (per amici argument): The Compact is contractual in nature (per U.S. Steel); withdrawal or amendment requires collective action per the compact, not unilateral state statute |
Key Cases Cited
- West Virginia ex rel. Dyer v. Sims, 341 U.S. 22 (1951) (state may not use internal constitutional limits to evade obligations under an interstate compact)
- U.S. Steel Corp. v. Multistate Tax Comm’n, 434 U.S. 452 (1978) (Multistate Tax Compact characterized as an interstate compact; analysis of congressional-consent requirement)
- Alabama v. North Carolina, 560 U.S. 330 (2010) (courts will not order relief inconsistent with express terms of interstate compacts)
- New Jersey v. New York, 523 U.S. 767 (1998) (reluctance to read absent terms into interstate compacts and deference to express compact language)
- Texas v. New Mexico, 462 U.S. 554 (1983) (compact interpretation constrained by express terms; courts should not rewrite agreements among sovereigns)
- U.S. Trust Co. v. New Jersey, 431 U.S. 1 (1977) (Contract Clause principles applied in interstate-compact and state-obligation contexts)
- Seattle Master Builders Ass’n v. Pac. Nw. Elec. Power Planning Council, 786 F.2d 1359 (9th Cir. 1986) (state law applies to compact organization only if the compact specifically reserves that right)
- Entergy Arkansas, Inc. v. Nebraska, 358 F.3d 528 (8th Cir. 2004) (interstate compacts affect broad regional interests and are distinct from ordinary contracts)
- Delaware River Joint Toll Bridge Comm’n v. Colburn, 310 U.S. 419 (1940) (construction of congressionally sanctioned compacts raises federal questions)