Grosjean v. American Press Co.

Background

Nine Louisiana newspaper publishers, who together print thirteen papers each circulating over 20,000 copies weekly, sued to stop a state law that charged a 2% license tax on gross receipts from advertising in publications with circulation above 20,000. The law required quarterly sworn reports and imposed fines or imprisonment for failing to file or pay. A federal district court entered a permanent injunction for the publishers, and the state appealed to the Supreme Court.

Reasoning

The central question was whether this targeted tax unlawfully limited the freedom of the press. The Court examined long historical efforts—like English stamp and advertisement duties—used to curb circulation and public access to information. It treated the tax as a device that would reduce advertising income and penalize high circulation, thereby restricting the press. The Court concluded that the Fourteenth Amendment’s protection of press freedom prevents a state from imposing this kind of tax. The opinion noted a corporation counts as a “person” under the due process clause and found the statute unconstitutional on that ground, so it did not decide the equal protection argument.

Real world impact

The ruling bars Louisiana’s specific 2% advertising tax and signals that states may not use similar taxes designed to limit newspaper circulation. It preserves the ability of large newspapers to rely on advertising revenue and circulation without being singled out by such a tax. The decision affirmed the injunction entered by the lower court.