APPEAL FROM THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT. Reported below: 282 F.2d 574.
Warren, Black, Frankfurter, Douglas, Clark, Harlan, Brennan, Stewart; Whittaker took no part in the disposition of this case.
This is an appeal from the Court of Appeals' reversal of a summary judgment entered for the appellant in the United States District Court for the Southern District of Alabama. The suit, based on diversity of citizenship, sought contractual reimbursement of taxes paid to the City of Mobile relative to sales of natural gas to the appellees. They defended on the ground that the contracts contemplated reimbursement only of valid tax payments, and that the License Code of the City of Mobile, § 1, par. 193 (1955), under which the tax was exacted and paid, was invalid under the Commerce Clause of the United States Constitution. The Court of Appeals sustained this contention, by interpreting both the primary and enforcement provisions of the License Code and its surrounding state legislation as operating not to tax a separable local portion of interstate commerce but as a means of licensing appellant's right of entry into the City from without the State. 282 F.2d 574, 580. We postponed determination of our jurisdiction to consideration of the merits, 366 U.S. 916, and now find that the case is properly here under 28 U. S. C. § 1254 (2).
The interpretation of state law by the Court of Appeals, in an opinion by its Alabama member, was rendered in advance of construction of the License Code by the courts of the State, which alone, of course, can define its authoritative meaning. We ought not, certainly on this record, either accept the Court of Appeals' construction or, on an independent consideration, reject what the Alabama Supreme Court may later definitively approve. The availability of appropriate declaratory-judgment proceedings under Ala. Code, Tit. 7, §§ 156-168 (1940), avoids this unsatisfactory dilemma. Wise judicial administration in this case counsels that decision of the federal
question be deferred until the potentially controlling state-law issue is authoritatively put to rest. See Leiter Minerals, Inc., v. United States, 352 U.S. 220, 228-229. Accordingly, the judgment of the Court of Appeals is vacated to permit a construction of the License Code of the City of Mobile, so far as relevant to this litigation, to be sought with every expedition in the state courts.
MR. JUSTICE WHITTAKER took no part in the disposition of this case.
This case should be disposed of here; the long-drawn-out litigation*fn* foisted on the parties by the Court is needless. No matter how the local ordinance is construed the tax is constitutional.
Congress under the Natural Gas Act, as amended, would have the authority to prevent interstate pipelines from delivering any gas for industrial use. Federal Power Comm'n v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1. Yet once the interstate movement commences, the line between permissible and impermissible local regulation is no longer a puzzle.
United is an interstate pipeline company that brings natural gas into Alabama and supplies it in the City of Mobile to a distributor, Mobile Gas. United delivers gas to Mobile Gas at three stations not for resale, but for delivery to appellees under contracts between appellant and appellees. The gas, when delivered to Mobile Gas, is at a lower pressure than when it enters the State. When Mobile Gas delivers it to the industrial customers here involved, the gas is at a still lower pressure. The case is therefore on all fours with East Ohio Gas Co. v. Tax Comm'n, ...