In the case at bar, this court must first decide whether the doctrine of collateral estoppel bars the commissioner from imposing an ad valorem property tax upon imported raw goods stored by Hooven in its warehouse.
In Montana v. United States (1979),
“* * * Under res judicata, a final judgment on the merits bars further claims by parties or their privies based on the same cause of action. * * * Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to
As the instant cause does not involve returns for the same years at issue in Hooven I, it is arguable whether the more restrictive doctrine of res judicata is apposite here. The applicability of collateral estoppel to the case sub judice, however, is undeniable. Both parties to the prior action (the Hooven & Allison Company and the Tax Commissioner of Ohio) are parties to the present, and the ultimate issue decided in Hooven I is that now under consideration — whether an ad valorem, personal property tax may constitutionally be assessed against imported raw materials stored in their original containers for future use.
The commissioner offers this court’s decision in Beatrice Foods Co. v. Lindley (1982),
Nonetheless, despite the inappositeness oi Beatrice Foods and Standard Oil, it must be acknowledged that, at least in the context of tax determinations, the applicability of collateral estoppel is not untempered. As the United States Supreme Court observed, in Commissioner v. Sunnen (1948),
“* * * [Collateral estoppel is a doctrine capable of being applied so as to avoid an undue disparity in the impact of income tax liability. A taxpayer may secure a judicial determination of a particular tax matter, a matter which may recur without substantial variation for some years thereafter. But a subsequent modification of the significant facts or a change or development in the controlling legal principles may make that determination obsolete or erroneous, at least for future purposes. * * * [A] judicial declaration intervening between * * * two proceedings may so change the legal atmosphere as to render the rule of collateral estoppel inapplicable. * * *”
The commissioner argues that the United States Supreme Court’s decision in Michelin Tire Corp. v. Wages, supra (
Although the Michelin court clearly felt no compunction in explicitly overruling Low v. Austin (1871),
Moreover, that the Michelin court did not attempt to overrule Hooven I should be evident given the factual distinctiveness of the two cases. In Michelin, the court upheld the constitutionality of a state ad valorem property tax levied upon imported tires that had been mixed with domestically manufactured ones and stored for future sale and delivery to various franchised dealers, without regard to the tires’ point of origin.
The United States Supreme Court’s decision in Youngstown Sheet & Tube Co. v. Bowers and United States Plywood Corp. v. Algoma (1959),
The commissioner’s attempt to distill from Michelin a rigid and unassailable principle which would permit the taxation of imported raw materials, like those represented in the case at bar, is inappropriate. In Brown v. Maryland (1827),
“* * * The power, and the restriction on it, though quite distinguishable when they do not approach each other, may yet, like the intervening colours between white and black, approach so nearly as to perplex the understanding, ,as colours perplex the vision in making the distinction between them. Yet the distinction exists, and must be marked as the cases arise. Till they do arise, it might be premature to state any rule as being universal in its application. * * *” Brown v. Maryland, supra, at 441. The United States Supreme Court has, in short, decreed that no single prescription can adequately treat the constitutional issues raised by state taxation of various imported goods. Thus, the commissioner’s attempts, through a misplaced reliance on Michelin to do so, must be rejected.
Finally, it has been suggested that we ignore the dictates of Hooven I as Michelin indicates at the very least the United States Supreme Court’s intention presently to abandon the principles embodied in the former action. Were this court to comply with such a request, we would be guilty of overreaching. As was cogently stated in Penfield Co. of California v. SEC (C.A. 9, 1944),
“We cannot agree that an inferior federal court may make its prognostication of the weather in the Supreme Court chambers, however well fortified in judicial reasoning, and forecast that the Supreme Court ‘seems’ about to overrule its prior decision, and outrun that Court to the overruling goal.” Like the federal district and appellate courts, we are constrained to abide by the decisions of the nation’s highest court until expressly overruled by that tribunal.
Finding the commissioner’s levying of an ad valorem personal property tax upon the subject imported goods barred by the doctrine of collateral estoppel, we decline to address the constitutional issues raised by Hooven in its appeal.
Accordingly, the decision of the Board of Tax Appeals is affirmed'..
Decision affirmed.
Notes
In Michelin, the court additionally overruled Low v. Austin, supra, to the extent the latter interdicted the imposition of state taxes of any type upon imported goods, particularly the levying of ad valorem personal property taxes. Michelin has also been viewed as sounding the death knell for the “original package” theory, i.e., that imports still in their original containers are immune from all forms of state taxation. Michelin Tire Corp. v. Wages, supra, at 297.
As the court stated, in Michelin Tire Corp. v. Wages, supra, at 279, fn. 2: “The respondents [Gwinnett County, Georgia, Tax Commissioner and Assessors] did not cross-petition from the affirmance of the holding of the Superior Court that the tubes in the corrugated shipping cartons were immune from the tax, and that holding is therefore not before us for review.”