Gast Realty & Investment Co. v. Schneider Granite Co.

Background

A realty company owned a long, undeveloped tract that fronted Broadway in St. Louis. A paving company did the work, received an assignment of the local paving tax, and won a judgment to collect it. The city charter directed that one-quarter of paving costs be charged by street frontage and three-quarters by area across a defined district, with district lines drawn midway to the next parallel or converging street or 300 feet where no parallel street existed.

Reasoning

The central question was whether the city ordinance using the charter’s mechanical rules complied with the Fourteenth Amendment’s protection against unequal treatment. The Court found that applying the charter’s formulas produced stark differences in depth included for nearby parcels — the landowner’s tract was included to about 400–500 feet while neighboring small lots were included to about 100–150 feet. Because those differences were produced mechanically without regard to differing benefits, the Court concluded the ordinance distributed the tax in grossly unequal proportions and could not stand.

Real world impact

The ruling reverses the state-court decision and prevents enforcement of this particular paving assessment as applied to the affected landowners. It signals that city rules that mechanically assign large burdens to some properties, especially undeveloped tracts, may be invalid if they produce substantial, unjustified disparities. Municipalities must ensure assessment rules reasonably reflect the expected benefits to different properties.

Dissents or concurrances

The Court later clarified the decision’s scope: it is limited to this specific ordinance, the three-quarters area assessment method as applied, and to those who suffered the unequal burdens described.