Polar Tankers, Inc. v. City of Valdez

2009 United States Supreme Court case

Polar Tankers, Inc. v. City of Valdez, 557 U.S. 1 (2009), was a decision by the Supreme Court of the United States involving the tonnage clause of the United States Constitution.

The City of Valdez in Alaska imposed a property tax that, in practice, applied only to large oil tankers. Polar Tankers, a ConocoPhillips subsidiary, sued, arguing that the tax violated the Tonnage Clause of the Constitution, which forbids a state, “without the Consent of Congress, [to] lay any Duty of Tonnage.”

The Supreme Court agreed with Polar Tankers. The court noted that the original meaning of the clause was as a term of art for a tax imposed that varies with “the internal cubic capacity of a vessel,” but emphasized that a consistent line of cases had read the clause broadly, “forbidding a State to do that indirectly which she is forbidden … to do directly.”^[1] Those cases, the court concluded, stood for the proposition that the tonnage clause’s prohibition reaches any taxes or duties on a ship, “whether a fixed sum upon its whole tonnage, or a sum to be ascertained by comparing the amount of tonnage with the rate of duty[,] … regardless of [the tax or duty’s] name or form … which operate to impose a charge for the privilege of entering, trading in, or lying in a port.”^[2]

With this premise in mind, the court concluded that because Valdez taxes “ships and to no other property at all[,] … in order to obtain revenue for general city purposes[, this was] … the kind of tax that the Tonnage Clause forbids Valdez to impose without the consent of Congress, consent that Valdez lacks.”

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