Robert Gordon v. Eric Holder, Jr.
406 U.S. App. D.C. 6
D.C. Cir.2013Background
- Robert Gordon ran a tobacco delivery business across state lines from the Alleghany Territory of the Seneca Nation in western New York.
- The PACT Act sections 2a and 3 impose a federal duty to collect state taxes and prohibit sending tobacco through the mail, with penalties for noncompliance.
- A Western District of New York injunction blocked enforcement of the tax provisions; the district court allowed the mail ban to proceed and Gordon appealed.
- The D.C. Circuit previously remanded Gordon I and affirmed/denied injunctions at different stages; Gordon’s business later closed during the pendency.
- The district court held Gordon likely to succeed on the merits of his due process challenge to the tax provisions and denied relief for the mail ban; the government appealed.
- This court affirms the district court in part and remands on questions involving the due process minimum-contacts analysis and the scope of the injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process requires minimum contacts with the taxing jurisdiction when the federal government imposes the duty | Gordon asserts minimum contacts with state/local governments are required. | The federal will to collect taxes excuses minimum-contacts concerns. | Close question; affirmed district court’s likelihood-of-success ruling without resolving on merits. |
| Whether a single delivery sale establishes minimum contacts for tax collection | Single sale may create sufficient minimum contacts. | Delivery-sale activity can trigger minimum contacts under Quill-based reasoning. | Close question; remand for merits and further factual development. |
| Whether the mail ban (Section 3) satisfies rational-basis review under the Fifth Amendment | Mail ban is overinclusive/underinclusive and duplicative of other provisions. | Mail ban serves legitimate aims (minors, trafficking, tax circumvention) and is rationally related. | Rational-basis review upheld; district court’s dismissal affirmed. |
| Whether the PACT Act’s tax-collection duties amount to unconstitutional commandeering under the Tenth Amendment | Act commandeers states to administer a federal program. | Act imposes duties on private sellers, not on states; permissible under the Federal power. | District court properly dismissed; no Tenth Amendment violation. |
Key Cases Cited
- Ashcroft v. ACLU, 542 U.S. 656 (2004) (deference in close constitutional questions at preliminary injunction stage)
- Quill Corp. v. North Dakota, 504 U.S. 298 (1992) (minimum contacts for taxation; modern nexus concepts; delivery solicitations)
- National Bellas Hess v. Department of Revenue, 386 U.S. 753 (1967) (physical presence required for state use tax absent Congress action (overruled by Quill))
- Kentucky Whip & Collar Co. v. Illinois Central Railroad Co., 299 U.S. 334 (1937) (Congress’s will can justify federal regulation harmonizing with state duties)
- James Clark Distilling Co. v. Western Maryland Railway Co., 242 U.S. 311 (1917) (commerce-power precedents; state law effects in federal regulation)
- Red Earth LLC v. United States, 657 F.3d 138 (2d Cir. 2011) (affirmed preliminary injunction on due process challenge; remand for merits)
- United States v. Lopez, 514 U.S. 549 (1995) (facially invalid interstate-commerce nexus; jurisdictional elements matter)
- Gordon v. Holder, 632 F.3d 722 (D.C. Cir. 2011) (initial remand on four-factor preliminary injunction standard)