Board of County Commissioners v. Donoho, - Col. -, 356 P.2d 267 (1960)

Hetzelt, Alfred

English

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Buffalo Law Review Volume 10 Number 2 Article 9 1-1-1961 The Periphery of “Exclusive” Federal Power to Legislate Over Federally Ceded Lands Alfred Hetzelt Follow this and additional works at: https://digitalcommons.law.buffalo.edu/buffalolawreview  Part of the Constitutional Law Commons Recommended Citation Alfred Hetzelt, The Periphery of “Exclusive” Federal Power to Legislate Over Federally Ceded Lands, 10 Buff. L. Rev. 387 (1961). Available at: https://digitalcommons.law.buffalo.edu/buffalolawreview/vol10/iss2/9 This Recent Decision is brought to you for free and open access by the Law Journals at Digital Commons @ University at Buffalo School of Law. It has been accepted for inclusion in Buffalo Law Review by an authorized editor of Digital Commons @ University at Buffalo School of Law. For more information, please contact lawscholar@buffalo.edu. RECENT DECISIONStrarily terminate the use after the initial five-year period had run, withoutregard for the pecuniary exigencies of the case, Camarco would have to onceagain resort to judicial process for additional time. A round of such legaljousts is foreseeable. A more suitable approach would be to discard that por-tion of the ordinance which calls for the flat five-year period in all cases,and substitute a realistic appraisal by the zoning board of each nonconform-ing use. The board would presumably be guided, in setting the grace periods,by an ordinance incorporating a standard based on the factors previouslyset out by the Court of Appeals.40This approach would concededly have the drawback of requiring anadministrative body to determine the proper time period for each nonconform-ing use. However, a number of very desirable results would be accomplished.First, it would reduce the amount of litigation likely to result in cases suchas the instant one. In addition, it would provide the user with a reasonableexpectancy as to the future economic position of his business, to the extentit reduced threats to him from the possible vagaries of future zoning boards.Most important-were this method adopted and effectuated by means ofsuitably drafted zoning regulations, there is little doubt that every nonconform-ing use or structure would be limited in time. Given a due regard for theprivate interest involved, but keeping in mind that ". . zoning legislationlooks to the future in regulating district development and the eventual liquida-tion of nonconforming uses,"'41 the overall goals of zoning would be sub-stantially furthered. This would contrast sharply with the many frustrationsof its purposes in recent years.SANFORD ROSENBLUIMTHE PERIPHERY OF "EXcLUsIVE" FEDERAL POWER TO LEGISLATE OVER FED-ERALLY CEDED LANDSAn area of less than ten square miles which a state has ceded to thefederal government for military purposes and which is on all sides surroundedby land over which the state has undisputed control presents the problemof which government, state or federal, has jurisdiction over the tiny areaof land. If the jurisdiction lies not entirely with either government, themore difficult problem is what is the extent of the jurisdiction of each govern-ment.The solution of this problem depends on how Article I, Section 8, Clause17 of the United States Constitution is interpreted. The pertinent clause readsas follows:The congress shall have power: ...(17) To exercise exclusive legislation in all cases whatsoever over40. Anderson, supra note 9 at 239.41. Supra note 22 at 127, 272 P.2d 8-9.BUFFALO LAW REVIEWsuch district (not exceeding ten miles square) as may by cession ofparticular states, and the acceptance of Congress, become the seat ofgovernment of the United States, and to exercise like authority overall places purchased, by the consent of the legislature of the statein which the same shall be, for the erection of forts, magazines,arsenals, dock-yards and other needful buildings; ...This problem has recently arisen in Board of County Commissioners v.Donoko.1 The federal government area involved therein was a military reser-vation, Fort Logan, located wholly within the geographical boundaries ofArapahoe County, Colorado. The issue was whether the claimant, Mrs.Donoho, who resided at Fort Logan, was entitled to receive benefits undera state relief program called "Aid to the Needy Disabled." The SupremeCourt of Colorado decided that she was so entitled.The Court, by its decision in Donoko, was in effect deciding that the word"exclusive" in Article I, Section 8, Clause 17 of the Constitution was notto be interperted as creating in the federal government "a unique and un-reservedly exclusive sovereignty within the federal enclave."' Rather, theterm "exclusive" as used in this clause "relates to protection of the federalgovernment against state or local conflicting regulations."'3 In other words,the Colorado Supreme Court, by its holding, acknowledges in effect that theterm "exclusive" means only that state law controls, regardless of the timeof its passage, unless a conflicting federal statute governing the area isactually in existence.For this proposition the Colorado court relied heavily on two UnitedStates Supreme Court decisions, Penn Dairies v. Milk Control Commissionof Pennsylvania4 and Pacific Coast Dairy v. Department of Agriculture.5 Thetransaction involved in Penn Dairies was a sale of milk within a federal en-clave to the United States itself. The enclave was not ceded to or purchasedby the federal government. It was covered by a mere permit involving nosurrender of state jurisdiction. No mention is made in the majority opinionnor in the majority opinion nor in the concurring or dissenting opinions ofArticle I, Section 8, Clause 17 of the United States Constitution. Yet, theColorado court cited the Penn Dairies case as support for its interpretationof the term "exclusive" as it is used in Clause 17. Clearly, the Supreme Courtin Penn Dairies was not at all concerned with an interpretation of the term"exclusive."Furthermore, the central issue in Penn Dairies differed from that inDonoho. The issue in Donoho was the extent of state jurisdiction over thefederal enclave. In the Penn Dairies case it was conceded by both parties that1. - Col. -, 356 P.2d 267 (1960).2. Id. at -, 356 P.2d 270.3. Id. at -, 356 P.2d 272.4. 318 U.S. 261 (1942).5. 318 U.S. 285 (1942).RECENT DECISIONS"the permit involved no surrender of state jurisdiction or authority over thearea occupied by the camp."' 6 The question was whether the State couldregulate a transaction involving the United States or whether the UnitedStates, as one of the parties to the milk sale transaction, had governmentalimmunity from state regulation which indirectly burdened it. In any case, theissues in Penn Dairies and Donoko differed. The Colorado court's heavy re-liance on Penn Dairies may then be subject to effective rebuttal.As to the Pacific Coast case, the Supreme Court therein held that Califor-nia was precluded from revoking the license of a violator of the state mini-mum price statute in sales to the government for use in an area ceded to theUnited States. The Colorado court cited Pacific Coast as supporting "theview that the term 'exclusive' as used in this clause relates to protection ofthe federal government against state or local conflicting regulations." 7 Somejustification exists for this position of the Colorado court. The Supreme Courtin Pacific Coast recognized a principle established in James Stewart & Co. v.Sadrakula that a state regulation enacted before the federal enclave is createdapplies, provided the regulation does not conflict with federal policy. Thisprinciple lends support to the view that the term "exclusive" in Article I,Section 8, Clause 17 does not mean entirely exclusive of all state regulatiqn.It does not establish, however, that any state regulation, regardless of thetime of its passage, which is not in conflict with an existing federal statute,is enforceable in a federal enclave.Said Mr. Justice Roberts for the majority in Pacific Coast:"When the federal government acquired the tract, local law not in-consistent with federal policy remained in force until altered by na-tional legislation (citing Stewart). The state statute involved wasadopted long after the transfer of sovereignty and was without forcein the enclave. It follows that contracts to sell and sales consummatedwithin the enclave cannot be regulated by the California law." 9Insofar as the Colorado court in Donoko cites the Pacific Coast case for theproposition that the term "exclusive" in Article I, Section 8, Clause 17 isnot absolute, it is on solid ground. What the Colorado court actually did,however, was to base its decision on language in the dissent to Pacific Coastby Mr. Justice Frankfurter. The conclusion Frankfurter reached was in effectthe Colorado court's holding-that, as long as no existing federal statuteconflicts with a state regulation, regardless of its time of passage, such stateregulation controls in a federal enclave. It is interesting to note that Frank-furter went so far as to label the phrase "exclusive" in Article I, Section 8,Clause 17 of the United States Constitution a "misnomer." "The phrase isindeed a misnomer for the manifold legal phases of the diverse situations6. Supra note 4 at 267 (1942). -7. Supra note 1 at -, 356 P.2d 272 (1960).8. 309 U.S. 94 (1940).9. Supra note 5 at 294 (1942).BUFFALO LAW REVIEWarising out of the existence of federally-owned lands within a state-problemscalling not for a single, simple answer but for disposition in the light of thenational purposes which an enclave serves."' 0Thus, the Colorado court extended the meaning of the word "exclusive"beyond any point thus far reached by a majority of the United States SupremeCourt. It is difficult to see how the Colorado decision does not directlyconflict with the Pacific Coast decision. Nonetheless, the question remainswhether the loose interpretation of the Colorado court is legally sound. Inother words, can and ought the Supreme Court adopt the position of Frank-furter in his Pacific Coast dissent?It should first be noted that "exclusive legislation," in reference to apower of the federal government, on its face, could reasonably mean that thefederal government has the sole power to legislate and that this power pro-hibits any state legislation. This interpretation has been decisively rejected-by the Supreme Court, at least in interpretation of Article I, Section 8, Clause17. The term "exclusive legislation" could also reasonably mean what Justice'Frankfurter and the Colorado court thought it meant, namely, that statelegislation will control unless a conflicting federal statute is in existence. Thepresent position of the Supreme Court, however, as evidenced by the Stewart'decision, allows only that state legislation in existence at the time of cessionor purchase of the enclave, and not contrary to any federal legislation, tocontrol.The reasoning which supports the Stewart rule is hard to uncover. TheCourt therein made clear why state laws in existence at the time of cessionor purchase should apply in an enclave. "This assures that no area howeversmall will be left without a developed legal system for private rights."" Noreason appears in the opinion, however, why state laws passed subsequentto the cession or purchase should not also apply in a federal enclave. TheCourt did, however, cite Arlington Hotel Co. v. Fant12 in support of therule. In Arlington, an Arkansas statute relieving innkeepers from liability asinsurers for property of guests destroyed in a fire, which statute was passedafter cession to the federal government, was held unavailing as a defense to aninnkeeper's common law liability in accordance with Arkansas law before thecession. The opinion in Arlington, however, did not even discuss whether astate statute passed after the cession was valid in the enclave. The Court dis-cussed a different issue, namely, whether the cession itself was valid underClause 17 because the land was not being used for one of the purposesexpressly contained therein. In deciding that the cession was valid the Courtimpliedly presumed that the state statute in effect at the time of the cessionwas controlling. The Court gave no reasoning for this position.10. Id. at 300.11. Supra note 8 at 99 (1940).12. 278 U.S. 439 (1929).RECENT DECISIONSThe rationale for the implied presumption in Arlington and the expressholding in Stewart, though not even mentioned in either of those opinions,might well have been what was the losing argument in the case of UnitedStates v. Sharpnack.13 Therein the Supreme Court upheld the AssimilativeCrimes Act of 1948 as constitutional. 1 4 The statute provided that in federalenclaves the state penal law in force at the time of the criminal act or omissioninvolved would control. The losing argument for the statute's unconstitution-ality made in Sharpnack was not based on the term "exclusive legislation"found in Article I, Section 8, Clause 17. Rather, the argument, adopted by thedissent, was based on Article IV, Section 3, Clause 2 of the Constitution whichreads: "The Congress shall have power to dispose of and make all needfulRules and Regulations respecting the Territory or other Property belongingto the United States..." It concerned an unconstitutional delegation to thestates of federal legislative power. To adopt state laws in existence at thepurchase of the enclave was, in effect, to merely legislate federally. To approveat the time of the purchase, however, all state laws which might be passed inthe future as applicable to a federal enclave was to give to a state the powerto legislate which belonged only to Congress.The majority in Sharpnack did not agree. They decided that the federalstatute was not an unconstitutional delegation to the states of federal legislativepower. Said the Court: "Having the power to assimilate the state laws, Con-gress obviously has like power to renew such assimilation annually or dailyin order to keep the laws in the enclaves current with those in the states."'' 1The present state of the law is, therefore, that, if a federal statute specificallyprovides that state legislation subsequent to cession or purchase shall controlin a federal enclave, the federal statute is constitutional and the state legisla-tion shall so control. In the absence of such a federal statute the Stewart ruleapplies to limit the effective state legislation to that in force at the time ofcession or purchase of the federal enclave.Thus, an express statute which makes state law subsequently passedapplicable to a federal enclave is not an unconstitutional delegation of federallegislative power. The question is why is a federal statute necessary in orderto allow a state statute passed subsequent to cession or purchase of a federalenclave and not in conflict with a federal statute to control in the enclave?If a state statute in force at the time of cession or purchase of the enclavecontrols by virtue of Article I, Section 8, Clause 17 and the constitutionalobjection to control by a subsequently passed statute has been eliminated bySharpnack, should not a subsequently passed statute also control in the enclave?One might argue "no" to the above question because of the word "ex-clusive" in Article I, Section 8, Clause 17. The word "exclusive" must have13. 355 U.S. 286 (1958).14. 18 U.S.C. § 13 (1949).15. Supra note 13 at 293 (1958).BUFFALO ,LAW REVIEWsome meaning. If a state statute in force at the time of cession can control inthe enclave, nothing is left for the word "exclusive" to mean except that sub-sequently passed state statutes can never control in the enclave. This argu-ment can be effectively countered, however, because the exclusiveness of federallegislative pQwer is not at all impaired by the control in the enclave of a statestatute passed subsequent to cession. Congress can nullify the applicationof a state statute passed subsequent to cession by enacting a contrary statute.Congress retains the ultimate or "exclusive" control of the enclave. Article I,Section 8, Clause 17 is satisfied.Therefore, no reason appears why the Supreme Court should stop shortof allowing subsequently passed state statutes to control in a federal enclave.It now holds the midstream position that, if the state statute is enforced beforethe federal enclave is created and if the statute does not conflict with a fed-eral statute, the state statute applies in the enclave. A federal statute canallow a subsequently passed state statute to control. Such is the Supreme Court'spresent position but the holding of the Colorado Supreme Court in Donoho andthe dissenting opinion of Mr. Justice Frankfurter in Pacific Coast appear tothis writer the better reasoning.ALFRED HETZELTSALE OF ENDOWMENT POLICY To AvoID ORDINARY INCOME TAX TREATMENTCongress introduced capital gain provisions into the tax structure withthe Revenue Act of 1918. The 1954 Code, as well as its predecessors, containedsimilar provisions. One of the primary purposes for the retention of theseprovisions is the elevation of burdensome taxation in certain transactions fall-ing within their scope. The constitutionality of such a tax has never beenseriously questioned since the Supreme Court decided the case of Merchant'sLoan and Trust Company v. Smnietanka.1 There the Court decided that income,within the meaning of the Sixteenth Amendment to the Constitution, includedprofit gained through the sale or conversion of a capital asset. The constitu-tional issue had thus been laid to rest; but since that date the courts havecontinually been asked to determine whether certain transactions give rise tocapital gains or ordinary income. The government is anxious to prevent anyattempt to deplete its revenue intake, while the taxpayer, with equal diligence,is seeking to minimize or to avoid taxes altogether. The battle lines arethus drawn.In order to take advantage of the capital gain provision certain basicrequirements spelled out in the Internal Revenue Code must be met. Theproperty dealt with must be a capital asset as defined by the Code.2 Secondly,any gain or loss resulting to the taxpayer must be the result of a sale or1. 255 U.S. 509 (1921).2. Int. Rev. Code of 1954 § 1221.

The Periphery of “Exclusive” Federal Power to Legislate Over Federally Ceded Lands

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The Periphery of “Exclusive” Federal Power to Legislate Over Federally Ceded Lands

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