Inter-City Truck Lines, Ltd. v. The United States
408 F.2d 686
Ct. Cl.
1969
Check Treatment

*1 LINES, LTD. TRUCK INTER-CITY

v. STATES. UNITED No. 389-67. of Claims. States Court March Mich., Daane, Detroit,

Roderick K. attorney plaintiff. Huf- of record for Detroit, Hollingshead faker, Daane, & Mich., of counsel. Gullen, Asst. J. with whom was David Rogovin,

Atty. for de- Mitchell Gen. Philip W. fendant. Miller R. C., McConnell, Washington, Stephen D. of counsel. COWEN, Judge,

Before Chief LARAMORE, DAVIS, DURFEE, COL- Judg- NICHOLS, LINS, SKELTON, and Nichols, J., dissented. es. OPINION Judge. DURFEE, is for a refund of suit stip-

ment taxes. facts have been ulated, body of and are set out opinion. trucking cor Taxpayer, Canadian poration, authorized to do business States, employed Canadian delivery citizens truck in its drivers pick ship up carrier of as motor Niagara Falls, ments Ontario- Buffalo, York Plaintiff was area. New employment pay required to taxes as Insurance Con serted under the Federal wages Act, as the result of tributions per employees paid to these formed within the United States. (Supple- 3111(a) of the Act Section 1965-66), imposes a ment II to U.S.C. “wages” paid upon employees on tax “Wages” “employment.” employment” “remuneration means 3121(a). under § seq. (1964). Act, 3101 et 26 U.S.C. § 1. Federal Insurance Contributions *2 3121(b) “employment” per- “Employment” under constitute unless § by formed a U. S. citizen for an Ameri- means: * * * employer, * * * can and since services the any either service performed the inside United by employee person the (A) for an up make less than one-half of each em- him, irrespective the employing of ployee’s during pay periods services all (i) either, citizenship of residence or * * * issue, here in none of such services con- within “employment” stitute taxable within by (B) outside the United States meaning 3121(c). the of I.R.C. § em- as an citizen of United States the ployee American for an ignore head we the bold face ** [Emphasis supplied] *. ing “Included and excluded service” of specifically 3121(c), then 3121(b) lists subsection and consider then Section completely exceptions out of con to its this subsection definition 19 vocational immediately stipulated employment. text subsection with of has been agree ap- preceding, plain exceptions could we none of these that interpretation plicable literal tiff’s lan to case. guage (c). However, of subsection foregoing following Immediately the 3121(c) only interpret apply to to § from “em- paragraphs of exclusions or ex “services” which are included 3121(c) pro- ployment” 3121(b), § § 3121(b), supra. cluded in § “Included treatment of vides for the legislative history 3121(c) according pre- of Service” § Excluded single day provisions our during period, view. Its confirms dominance by of first enacted Section 606 the wit: So- Security of cial Act Amendments and excluded service. Included 1360, amending * c. Stat. * * performed the if services of the Internal Revenue of 1939. Code during any pay or more of one-half sponsored before Con- The section was employee per- period by for the an gress by Security the Social Board employing em- him son constitute Treasury of the behalf the Board and ployment, of all such the services purely device ease administra- employee period be for such shall employee does two tion where the same employment; if deemed to be but employer. the of for kinds work same performed during more the services pay peri- such than one-half discussing proposed enactment the employee by person od an (c), then Chairman of of subsection employing him do constitute Security Board testified be- the Social employment, then the serv- none Ways fore the House Means Com- employee such ices such : mittee em- period be deemed shall be suggesting Then we are the clari- * * * ployment. regarding fication law every stipulated pay that has been employees perform who services of action, period each af- to this material both excluded and included employee performed fected Canadian being ment, suggestion that services than with- less his major portion one-half of de- his shall question is the United States. all shall termine whether his time employee periods of serv- whether having considered as be been devoted performed United ices employment. to excluded or included up less than which make get one-half You do some where em- ea.ses involved, pay periods is taxable all ployee ex- his time between divides quoted, “employment” under sections employment. The cluded and included supra. silent, present that makes law Treasury for the and for it difficult since Plaintiff asserts cases, these States do Board determine outside which are nevertheless, there be laid down in some * * [*] slight * [*] It is amendment should be cleared [*] just my suggestion large [*] the number, but, may *3 law a [*] do so. rough, up, [*] Lines. such both within and without States. flight sections are not to the services Accordingly, personnel of the M Air applicable performed by is held statement, mathematical that so em- contemporaneous by construction ployers engaged partly who are in an charged those with the administration partly excluded and in an included statute, of the probably and who were occupation may by have a standard drafting, active in its is entitled to re report employees.2 which on these spect and not except be overruled [Emphasis supplied.] weighty reasons. S. Thermo U. States, Control Co. et al. v. United 178 Report eight The Senate enumerated 561, 567, 964, 967, Ct.Cl. 372 F.2d employment exclusions from which it denied, 839, cert. 68, 389 U.S. 88 S.Ct. pre-existing added to or in amended (1967). 19 L.Ed.2d 103 law, and then stated: Although plaintiff does not claim re- 8. Included and excluded services. taxes, fund for FICA on based the serv- changed —The law is with performed ices Canada, accept if we employee performing services interpretation 3121(c) its literal § both included and excluded heading out of context with its and the employer ment for the that same so preceding subsection which predominate a services which heading relates, Security the Social pay period Act determine his status encompass performed by would services period.3 for that [Em- these Canadian truck drivers in Canada phasis supplied.] percent worked 51 time contemporaneous construc (instead in the United States of 49 contrary is to the tion of section percent). Certainly, this was not taxpayer’s position. In 1940 an airline Security intent Act, of the Social which operating foreign between and United designed by was the United States sought ruling airports re States only benefit those who work the Unit- spect flight personnel to whether its ed States. wholly wholly exempt taxable reading The literal of subsection 3121 1426(c) under of the Internal Revenue § (c) by upon plaintiff relied must be (the predecessor Code of 1939 3121 § light considered in of what this court Code). 402, of the 1954 In S.S.T. Salvage said in Select Tire Co. Inc. v. 253, 252, 1940-2 the Internal Cum.Bull. 1008, 1012, United States, F.2d 181 386 Revenue ruled: Service 695, (1967) (quoting Ct.Cl. from opinion Bureau, sec- Holy Trinity Church of the v. United 1426(c) 1607(d), supra, tions 457, 459, 511, 143 U.S. 12 S.Ct. were not intended to include as “em- (1892)): 36 L.Ed. 226 ployment” performed outside services “ * * * rule, or to from exclude familiar that a States “employment” performed thing may be within the letter of the yet within on ba- statute and the United States within the stat- ute, quantity spirit, sis of relations in serv- nor because within its performed within ices the United the intention of makers to the entire services [*] [*] [*] hearing's 734, S.Rep.No. Cong., Sess., p. on 3. before the Committee 1st House 76th Ways (1939-2 565, 571). H.Rep. relative to the Social and Means Cum.Bull. Security 728, Cong., Sess., p. 1939, No. 76th 1st Act Amendments 76th Sess., pp. (1939-2 538, 544) Cong., 1st 2288-2289. Cum.Bull. is substan- tially identical. “ * * * [*] n [*] ‘The [*] object designed [*] * * enjoy The fact certain implied exemptions international by recognized. the customs must limit and laws is be reached act well Conqueror, import of terms control the literal U.S. 17 S.Ct. ” 460, 510, employed.’ phrases (1897). Id. at 41 L.Ed. 937 19 U.S.C. “customary 1322(a) refers to them as 12 S.Ct. at 512. exemptions.” Thus, a Canadian truck provision That dealt with case again every dutiable all over laws, immigration prin- but like carrying enters ciples prevail revenue cargo. ternational is not even duti- ” * ** field. “customary” able first time. These exemptions legal had an established ex- plaintiff em We conclude long Congress istence before the first subject ployer to FICA taxes was *4 recognized 1322(a). them I would per wages employees’ for high- to like be shown that Canadian States, ir formed within United way obtain, trips not for carriers did percentage respective of em of what between Canadian and United States country ployees’ service in total points, after the enactment of the Social was Canada Security Act and before 1961 a “cus- United States. tomary exemption” validity. equal of plaintiff’s petition Accordingly, for legisla- of construction revenue dismissed, prejudice. is refund tion, readily impute do an courts not impose intent to double taxation. Maass Judge (dissenting): NICHOLS, Higgins, 443, 449, 61 v. 312 U.S. S.Ct. stipulation wholly 631, (1941). in- see the as con- I 85 L.Ed. 940 was argument adequate for decision. Pos- here an informed ceded in oral Canada allowing security sibly complete system be ourselves to we are has a of social delivering pronouncements into not called lured taxes our attention was regret. any provision allowing to that we will live a credit or to paid for taxes rebate States. applica- The administrative former perfect system a Thus double we have tion of the Act to of International crews part falls on taxation. The burden they short air carriers there noth- drivers and Canadian territory, g., over States e. United any way ing en- to show could in way Kennedy to or from Inter- any part joy that United of the benefits might Airport, some see as national enjoy paying simi- residents absurdity. whether the stated taxes, lar Canadian unless Long Is- stationed observers IRS using repeatedly persisted on in- them marshes, stopwatches, as- to land trips to own financial ternational his precise for- when a certain instant this, our can detriment. If IRS does so subject eign flag to air carrier became system of mutual double Canada. Congress ap- The the FICA. took taxation of international 3121(b) propriate action. 26 U.S.C. § employees could, to if carried (4). nothing to There is show whether conclusion, bring logical international paral- took a ever before 1961 IRS to has a halt. The defendant trade highway respecting lel stand carriers. contemptuous these shown itself so they did, there I find hard believe of- considerations it has even litigation or at would have been suggestions any reassuring fered us as ruling, yet none a is cited. least revenue why my might exaggerated. fears be position I conclude So .newly majority at arrived in this case was to Church IRS refers Of Trinity Holy States, as no in 1961 and has claim v. 143 457, 459, contemporaneous construction of 12 U.S. S.Ct. 36 L.Ed. following (1892), and our statute. decision Salvage Co., otherwise, nothing are but “weasel Inc. v. Tire it. Select exposition 1008, 1012, words”, to recall the kind F.2d (1967). They supposed Theodore Roosevelt Woodrow Ct.Cl. majority of. should wish to be a master Wilson last cases the invokes of. Select remind readers reject stipulation and I would arriving at rule caution order trial. terpretation which dis- act a revenue foreign against That trade. criminates Holy shrift here. short rule receives Trinity not con- holds that we immigration provision strue labor, in laws, coolie bar intended penalize a United to such a fashion foreign employing a church PIPE PANHANDLE EASTERN preacher. LINE CO. plaintiff. deciding for I not favor do v. ripe Here for decision. is not The case The UNITED STATES. things are not told are some 547-58, 166-60, Nos. 400-61. by inference, the ad- except what (a) 1961; before practice ministrative was of Claims. United States Court *5 any treaty with Canada whether March including most applicable, whether treaty makes nation Canada favored applicable countries with third treaties Department thinks State and what the this; the trucks all who owned they reg- drove, and were drivers where regu- they istered; (d) are whether so, by lated common important Government; and most what trips (e) all, whether e.,

ternational, i. between Canadian points. United States anything. not settle This decision will case” and Someone will “make new prop- put pertinent considerations erly court, court or before here another. I do not think counsel disregard of faith or in acted bad doubt each their clients’ interests. No desiring good had his own reasons reciprocal, decision, one made given stipulation, and on the facts not think no others. But I do we motives, counsel, whatever allow them, put let blinders us. deciding moot different no may suppose cases. Counsel establishing point law, but mere all is. Courts make

delusion is lasting response to valid and law comprehensive clear notions as Judge-made laws, arrived at the facts.