Tully v. Mobil Oil Corp., 455 U.S. 245 (1982)

Tully v. Mobil Oil Corp.

No. 81-96

Decided February 22, 1982
455 U.S. 245

ON APPEAL FROM THE UNITED STATES TEMPORARY EMERGENCY

COURT OF APPEALS

Syllabus

Appellees, oil companies that are subject to New York State’s gross receipts tax on their revenues derived from activities within the State, filed suit in Federal District Court challenging the provision of the tax statute that prohibits oil companies from passing on the cost of the tax in the prices of their products sold in the State. The statute also provides that the tax shall self-destruct if the antipassthrough provision is adjudged to be invalid or if its enforcement is enjoined. The court held that the antipassthrough provision was preempted by federal price control authority under the Emergency Petroleum Allocation Act, and enjoined its enforcement. The Temporary Emergency Court of Appeals affirmed, but noted that the federal statute would expire by its own terms on September 30, 1981, and that expiration of the Act would signal the end of federal concern in the area.

Held: The judgment is vacated, and the case is remanded for reconsideration in light of the expiration of federal price control authority. Since the District Court’s injunction did not terminate with the expiration of the federal statute, in its present form, the declaration of the invalidity of the antipassthrough provision and the injunction against its enforcement have no current validity, and must be set aside. The Temporary Emergency Court of Appeals should decide in the first instance what effect, if any, the expiration of federal price authority has on collateral matters raised by the parties concerning appellees’ authority to pass through to consumers taxes that were paid or accrued prior to October 1, 1981, and the validity of the tax itself in view of the statute’s "self-destruct" provisions.

653 F.2d 497, vacated and remanded.