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Carmichael v. Southern Coal & Coke Co.

Supreme Court of the United States

April 7, 8, 1937, Argued ; May 24, 1937, Decided

No. 724

Opinion

 [*504]   [**870]   [***1250]  MR. JUSTICE STONE delivered the opinion of the Court.

The questions for decision are whether the Unemployment Compensation Act of Alabama infringes the due  [*505]  process and equal protection clauses of the Fourteenth Amendment, and whether it is invalid because its enactment was coerced by the action of the Federal government in adopting the Social Security Act, and because it involves an unconstitutional surrender to the national government of the sovereign power of the state.

Appellee, the Southern Coal & Coke Co., is a Delaware corporation employing more than eight persons in its business of coal mining in Alabama. Appellee, Gulf States Paper Corporation, is a Delaware corporation employing more than eight persons in its business of manufacturing paper within the state. They brought the present suits in the District Court for the Middle District of Alabama, to restrain appellants, the Attorney General and the Unemployment Compensation Commission of Alabama, from collecting the money contributions exacted of them by the  [***1251]  provisions of the [****17]  Alabama Unemployment Compensation Act. From the decrees of the district court, three judges sitting (Jud. Code, § 266, 28 U. S. C. § 380), granting the relief prayed, the case comes here on appeal. Jud. Code, § 238 (3), 28 U. S. C., § 345 (3).

] The Unemployment Compensation Act, Ala. Acts 1935, No. 447; Ala. Code of 1928 (1936 ***. Supp.) §§ 7597 (1) et seq., as amended by Acts of 1936, Nos. 156, 194, 195, and Acts of Feb. 10, 1937, and March 1, 1937, Spec. Sess. 1937, sets up a comprehensive scheme for providing unemployment benefits for workers employed within the state by employers designated by the Act. These employers include all who employ eight or more persons for twenty or more weeks in the year, § 2 (f), except those engaged in certain specified employments. 2 It imposes  [*506]  on the employers the obligation to pay a certain percentage of their total monthly payrolls into the state Unemployment Compensation Fund, administered by appellants. ] For 1936 the  [**871]  levy is .9 of 1%; for 1937 it is 1.8% and for 1938 and subsequent years it is 2.7%. § 4 (b). In 1941 and thereafter the rates of contribution [****18]  by employers are to be revised in accordance with experience, but in no case are they to be less than 1 1/2 or more than 4% of the payroll. § 4 (c). After May 1, 1936, each employee is required to contribute 1% of his wages to the fund. § 4 (d). The fund is to be deposited in the "Unemployment Trust Fund" of the United States Government, § 3 (d), cf. Social Security Act, § 904 (a), and is to be used as requisitioned by the State Commission, to pay unemployment benefits prescribed by the statute, §§ 3 (b), 3 (d), but without any liability on the part of the state beyond amounts paid into or earned by the fund. Benefits are payable from the fund to the employees covered by the Act, in the event of their unemployment,  [*507]  upon prescribed conditions and at prescribed rates.

 [****19]  The Act satisfies the criteria which, by § 903 (a) of the Social Security Act of August 14, 1935, c. 531, 49 Stat. 620, 640, 42 U. S. C. § 1103 (a), are made prerequisite to its approval by the Social Security Board created by that Act, and it has been approved by the Board as that section directs. By § 902 of the Social Security Act, contributors to the state fund are entitled to credit their contributions in satisfaction of the tax imposed on employers by the Social Security Act, to the extent of 90% of the tax. See Chas. C. Steward Machine Co. v. Davis, decided this day, post, p. 548.

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301 U.S. 495 *; 57 S. Ct. 868 **; 81 L. Ed. 1245 ***; 1937 U.S. LEXIS 1198 ****; 109 A.L.R. 1327

CARMICHAEL, ATTORNEY GENERAL OF ALABAMA, ET AL. v. SOUTHERN COAL & COKE CO. 1

Prior History:  [****1]   APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE MIDDLE DISTRICT OF ALABAMA.

APPEALS from decrees of the District Court, of three judges, restraining the present petitioners, officials of Alabama, from collecting the money contributions exacted of them by the provisions of the Alabama Unemployment Compensation Act.

Disposition:  17 F.Supp. 225, reversed.

CORE TERMS

unemployment, employees, taxed, benefits, public purpose, exemption, expenditure, taxation, Social Security Act, Agriculture, funds, contributions, invalid, evil, unemployment benefits, perform a service, conditions, Railroad, purposes, payroll, unemployment compensation, due process, depression, births, state fund, Fourteenth Amendment, distributed, carriers, pension, Coal

Business & Corporate Compliance, Disability & Unemployment Insurance, Unemployment Compensation, Scope & Definitions, Labor & Employment Law, Claim Procedures, General Overview, Admiralty & Maritime Law, Maritime Tort Actions, Multiple Defendants, Contribution, Constitutional Law, Congressional Duties & Powers, Raising Revenue, Governments, State & Territorial Governments, Finance, Tax Law, State & Local Taxes, Energy & Utilities Law, Taxation Issues, Legislatures, Legislation, Severability, Eligibility, Voluntary Unemployment, Case or Controversy, Standing, Sales Taxes, Imposition of Tax, Constitutionality of Legislation