CSX Transportation, Inc. v. Alabama Department of Revenue , 891 F.3d 927 ( 2018 )

Case: 17-11705 Date Filed: 05/31/2018 Page: 1 of 3
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
______________
No. 17-11705
______________
D.C. Docket No. 2:08-cv-00655-AKK
CSX TRANSPORTATION, INC.,
Plaintiff-Appellant,
versus
ALABAMA DEPARTMENT OF REVENUE,
VERNON BARNETT,
Commissioner of the Alabama Department of Revenue
Defendant-Appellees.
__________________________________________
Appeal from the United States District Court
for the Northern District of Alabama
__________________________________________
Before ED CARNES, Chief Judge, BLACK, Circuit Judge, and MAY, * District
Judge.
PER CURIAM:
*
Honorable Leigh Martin May, United States District Judge for the Northern District of
Georgia, sitting by designation.
Case: 17-11705 Date Filed: 05/31/2018 Page: 2 of 3
CSX Transportation, Inc. (CSX) filed a petition for rehearing after we issued
a substitute opinion granting the State’s petition for rehearing. We issued that
substitute opinion to clarify that the water carrier exemption from the sales and use
tax applies only when those carriers purchase or use diesel fuel to ship freight
interstate, as opposed to shipping it intrastate. See CSX Transp., Inc. v. Ala. Dep’t
of Revenue, 888 F.3d 1163 (11th Cir. 2018).
CSX worries that our substitute opinion may imprecisely describe the scope
of the water carrier exemption. That exemption applies to diesel fuel used by
water carriers “engaged in foreign or international commerce or in interstate
commerce.” Ala. Code §§ 40-32-4(a)(10), 40-23-62(3). CSX asserts that Alabama
courts broadly interpret the phrase “engaged in interstate commerce,” and that our
substitute opinion may suggest that the scope of the exemption is more narrow by
referring to exempted activity as, among other things, “haul[ing] freight interstate”
or “transport[ing] freight interstate.” E.g., CSX Transp., Inc., 888 F.3d at 1170–
71, 1179, 1183, 1187.
We doubt that, but the State does not oppose CSX’s petition. Instead, it filed
a responsive motion to apprise the Court of a newly discovered fact that it says
warrants granting CSX the relief it requests. In keeping with the finest tradition of
the legal profession, the attorneys for the State disclosed in its motion that after
successfully seeking rehearing, they learned that the Department of Revenue has
Case: 17-11705 Date Filed: 05/31/2018 Page: 3 of 3
inconsistently applied the statutory language “engaged in interstate commerce”
with respect to water carriers. To avoid further inconsistencies, the State agrees
with CSX that quoting the statutory language will help the district court fashion
relief consistent with our opinion.
In light of CSX’s petition and the State’s motion, our substitute opinion is
modified to add, immediately before the last paragraph on page 1187:
As long as the State retains the sales and use tax exemption for
diesel fuel used by water carriers “engaged in foreign or international
commerce or in interstate commerce,” Ala. Code §§ 40-23-4(a)(10),
40-23-62(3), the 4-R Act forbids it from imposing the sales and use
tax on diesel fuel used by rail carriers “engaged in foreign or
international commerce or in interstate commerce.” Our opinion
should be read with that imperative in mind.
The petition for rehearing is otherwise DENIED.