Grosjean v. American Press Co.

Appellant
Alice Lee Grosjean, Supervisor of Public Accounts for the State of Louisiana
Appellee
American Press Co.
Appellant's Claim
That a state law imposing an advertising sales tax on large-circulation newspapers violates the principle of freedom of the press.
Chief Lawyers for Appellant
Charles J. Rivet and Gaston L. Porterie
Chief Lawyers for Appellee
Esmond Phelps and Elisha Hanson
Justices for the Court
Louis D. Brandeis, Pierce Butler, Benjamin N. Cardozo, Charles Evans Hughes,James Clark McReynolds, Owen Josephus Roberts, Harlan Fiske Stone, George Sutherland (writing for the Court), Willis Van Devanter
Justices Dissenting
None
Place
Washington, D.C.
Date of Decision
10 February 1936
Decision
The Supreme Court struck down the Louisiana tax.
Significance
Although the Supreme Court subsequently ruled that the press is subject to various types of nondiscriminatory economic regulation, in Grosjean, itmade clear its condemnation of any attempt at prior restraint of the press that posed as taxation.
In 1934, the state of Louisiana passed an act imposing a license tax for theprivilege of selling advertising. The tax applied only to newspapers with a circulation of more than 20,000 copies per week. Of the 163 newspapers published in the state at the time, only 13 fit this description, and all 13 were vocal opponents of the policies of former Louisiana Governor Huey Long, who hadfostered the licensing tax. When the District Court of the United States forthe Eastern District of Louisiana upheld the tax, the publishers of the 13 large-circulation papers brought suit against the state tax supervisor in theU.S. Supreme Court.
Court Strikes Down Tax As Unconstitutional Prior Restraint
The Supreme Court unanimously declared that the tax was a violation of the First Amendment guarantee of freedom of the press, which was applicable to state governments because of the Due Process Clause of the Fourteenth Amendment.The purpose of the tax, said the Court, was not to raise revenue for Louisiana, but to silence criticism of state government. In this, the license tax resembled certain "taxes on knowledge" imposed by the British Parliament in theeighteenth century on newspapers critical of the Crown. The knowledge taxes,noted the Court, were one of the sparks that set off the Revolutionary War:

[T]hese taxes constituted one of the factors that aroused the American colonists to protest against taxation for the purposes of the home government . . . the revolution really began when, in 1765, that [British] government sent stamps for newspaper duties to the American colonies . . . in the adoption of the English newspaper stamp tax and the tax on advertisements, revenue was of subordinate concern . . . the dominant and controlling aim was to prevent, or curtail the opportunity for, the acquisition of knowledge by people in respect of their governmental affairs.

Taxes on knowledge,like the Louisiana license tax, were imposed on those newspapers with the widest readership. Both taxes resulted in what amounted to state-sponsored censorship.
The prohibition on prior restraint of the press thus became one of the building blocks of the American democracy, enshrined in the First Amendment. One ofthe primary targets of the First Amendment was such "odious methods" of government censorship as discriminatory taxes on the press, clearly intended to prevent free public discussion of matters pertinent to the exercise of individual rights.
Louisiana's once governor, Huey P. Long, has been called a democrat and a demagogue, a populist and a fascist. Even after he left the governorship in 1930to assume a seat in the U.S. Senate, Long continued to use his political machine to control the executive, legislative, and judicial branches of Louisiana government. His policy was "the end justifies the means," and he used it torationalize his nearly dictatorial use of the legislature to achieve his political ends. For many, he bore a strong resemblance to the absolute monarchswhose arbitrary exercise of power had so alienated the American colonists. After Long was assassinated in 1935, Robert Penn Warren wrote a novel based onhis career called All the King's Men (1946).
After Grosjean, the Supreme Court upheld other, nondiscriminatory taxation of newspapers. What the Court made clear in the earlier case, however, is that abuses of power--in Grosjean the legislative taxing power--intended to circumvent the First Amendment will not be tolerated at the federal or the state level. The founding fathers framed their intolerance of such abuses in clear language when they wrote: "Congress shall make no law . . . abridging the freedom of speech, or of the press."
Related Cases

• Minneapolis Star and Tribune Company v. Minnesota Commissioner of Revenue, 460 U.S. 575 (1983).

Pro and Con: Taxing Newspapers
Special taxes imposed upon newspapers by state or federal governments may beunconstitutional. Newspapers are subject to taxes, as are any other type of business. Some states assert a right to impose an additional tax, applicable only to newspapers. For example, in Louisiana a 1934 law imposed a tax upon newspapers that sold over 20,000 copies per week. The tax was connected to thegross revenue the newspaper received from advertisements.
This sort of taxation, uniquely applied to newspapers, has a long history ofmisuse in this country. The British crown tried to restrict American colonists' freedom of press by imposing such a tax with the Stamp Act. The First Amendment prohibits the government from imposing restrictions upon the press, andthis sort of tax is clearly designed for that purpose. The U.S. Supreme Court ruled this sort of tax unconstitutional.
Sources
Cornell. http://supct.law.cornell.edu/supct/.