Dooley v. United States
Headline: Court upholds Congress’s power to impose temporary tariff duties on goods shipped from U.S. ports to Porto Rico, allowing duties to be collected for the island’s government and denying merchants’ refunds.
Holding: The Court ruled that Congress lawfully imposed duties on merchandise arriving in Porto Rico from New York because the import/export clauses apply to foreign commerce, so the Foraker Act’s tariffs may be collected for Porto Rico’s benefit.
- Allows collection of Foraker Act duties on goods shipped from U.S. ports to Porto Rico.
- Permits revenue to be held for and used by Porto Rico’s government until local taxes begin.
- Makes merchants shipping to Porto Rico responsible for paying these temporary tariffs.
Summary
Background
The case was brought by New York commission merchants who shipped goods from New York to their branch at San Juan in Porto Rico and sued to recover duties collected under the Foraker Act of April 12, 1900. The statute directed that merchandise coming into Porto Rico from the United States be entered on payment of a percentage of the tariff normally levied on similar foreign imports, and required collectors at San Juan to hold net receipts for Porto Rico’s government.
Reasoning
The Court asked whether those charges were an unconstitutional tax on articles “exported from any State.” A majority, relying on earlier decisions, held that the Constitution’s import and export clauses refer to commerce with foreign countries, not transfers between a State and a territory under U.S. sovereignty. Because Porto Rico was treated as under U.S. sovereignty and the duties were collected for the island’s benefit, Congress lawfully imposed the temporary tariff; the Circuit Court’s ruling was affirmed. Justice White wrote a separate concurrence emphasizing those prior cases.
Real world impact
The ruling allows the federal government to collect the Foraker Act duties on goods shipped from U.S. ports to Porto Rico and to use the revenue for the island’s government until local taxation is established. Practically, merchants who ship to Porto Rico can be required to pay these duties, and Congress retains flexibility to tax commerce involving newly acquired territories.
Dissents or concurrances
Chief Justice Fuller, joined by three Justices, dissented: they argued the export prohibition applies to any articles exported from a State, that the charges are customs duties on exports, and that the plaintiffs should recover the taxes paid.
Opinions in this case:
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