McGoldrick v. Compagnie Generale Transatlantique

Background

A French shipping company that operates passenger and freight vessels between New York and foreign ports bought fuel oil from a Standard Oil company. The oil was stored in New Jersey and barged to the company’s ships in New York Harbor. Some oil was held in bond or subject to duty refunds under federal revenue laws before delivery.

Reasoning

The New York courts had held the city’s sales tax unconstitutional as a burden on interstate commerce. The Supreme Court treated this as a companion to a recent case in which it sustained a like tax. Relying on that companion decision, the Court reversed the state-court judgment. The Court refused to decide new constitutional arguments about the oil’s status as imports or exports because those claims were not presented to the state’s highest court, and this Court will not ordinarily decide new grounds first raised on review from a state court.

Real world impact

The reversal means the city tax may be sustained consistent with the companion decision, but the specific import/export questions were left for the state courts to consider on remand. The case limits this Court’s review of constitutional attacks that were not argued in the state courts and sends unresolved federal questions back for state-court resolution.

Dissents or concurrances

The Chief Justice and Justice Roberts agreed that foreign-commerce questions were not properly before the Court but would have affirmed the state judgment on alternative grounds set out in the companion case’s dissent.