Grosjean v. American Press Co.
The Court struck down a Louisiana law that taxed advertising revenue only for newspapers with circulation above 20,000 copies a week, ruling that the tax violated freedom of the press.
Looking to centuries of English and colonial history in which taxes were used to choke off critical newspapers, the Court held that this kind of targeted tax on a free press cannot be squared with the Constitution, even though the newspapers involved were corporations rather than individuals.
How it got here: A three-judge federal district court granted the publishers a permanent injunction against the tax, and the state appealed directly to the Supreme Court.
The Case in Depth
What happened
Nine Louisiana newspaper publishers, running the state's thirteen largest papers, challenged a 1934 state law taxing 2% of gross advertising receipts, but only for publications with weekly circulation above 20,000 copies. Smaller newspapers, which happened to be more favorable to the governor at the time, were exempt. The publishers argued the tax was designed to punish and suppress their papers.
The question before the Court
Could Louisiana put a special 2% tax on advertising revenue that applied only to the state's largest newspapers?
Why it matters
The ruling protects newspapers from being singled out for special taxes designed to shrink their circulation or advertising income. It gives publishers a durable constitutional shield against state efforts to punish or pressure the press through the tax code, rather than through open regulation applied to all businesses alike.
What changes now
The decision is final on the merits and affirms the permanent injunction, so Louisiana could not enforce the advertising tax against the publishers who sued. The ruling established a lasting rule against selectively taxing the press, though the Court left the equal-protection question unresolved since it did not need to reach it. No further proceedings on the constitutional question were required.
What this does not decide
The Court did not decide whether the Louisiana tax also violated the equal protection clause, since it resolved the case entirely on free-press grounds. It also did not hold that newspapers are immune from ordinary, generally applicable taxes — only that this particular targeted tax was unconstitutional.
How the Court got there
The legal reasoning, step by step
- The Court first confirmed federal jurisdiction existed because the required amount in controversy was met for six of the nine publishers, and that a motion to dismiss the whole complaint could not be granted piecemeal.
- The Court held equity jurisdiction was proper because Louisiana law provided no adequate legal remedy to recover taxes paid under protest, since the refund provision in the statute was ambiguous and could easily be foreclosed before a taxpayer could act.
- The Court explained that although a corporation is not a 'citizen' entitled to the privileges-and-immunities clause, it is a 'person' protected by the Fourteenth Amendment's due process and equal protection clauses, so the newspapers could raise a free-press claim.
- The Court traced the history of English and early American 'taxes on knowledge' — stamp and advertising taxes historically used to suppress newspapers critical of government — to show that the First Amendment's free-press guarantee, applied to the states through the Fourteenth Amendment's due process clause, was meant to bar not just prior censorship but also this kind of targeted financial punishment of the press.
- Applying that history, the Court found the Louisiana tax singled out a small group of larger newspapers by design, was unprecedented among the states, and functioned as a deliberate device to curtail circulation and advertising revenue rather than as an ordinary, evenly applied business tax.
- Because the tax was found to abridge freedom of the press under the due process clause, the Court held it unnecessary to decide whether the tax also violated the separate equal protection guarantee.
Doctrinal impact
Cases affected by this decision
Limits Hurtado v. California (110 U.S. 516)
Its broad reading of due process was qualified by later decisions recognizing fundamental rights against states.
Reaffirms Near v. Minnesota (283 U.S. 697)
Relied on as establishing that free-press protection is not limited to bans on prior censorship.