Meilink v. Unemployment Reserves Commission of State of California
 | |
| Meilink v. Unemployment Reserves Commission of State of California | |
| Reference: 314 U.S. 564 | |
| Term: 1942 | |
| Important Dates | |
| Argued: December 17-18, 1941 Decided: January 5, 1942 | |
| Outcome | |
| United States Court of Appeals for the Ninth Circuit affirmed | |
| Majority | |
| Chief Justice Harlan Stone · Hugo Black · Stanley Reed · Felix Frankfurter · William Douglas · Frank Murphy · James Byrnes · Robert Jackson Justice Owen Roberts took no part in the decision of this case. | |
Meilink v. Unemployment Reserves Commission of State of California was a case decided on January 5, 1942, by the United States Supreme Court, which ruled that California could charge a bankrupt company an annualized 12% interest rate on unpaid state unemployment taxes.[1][2]
The Supreme Court affirmed the lower court's ruling and held the 12% rate did not amount to a penalty in violation of the Bankruptcy Act or the California Constitution.[1][2]
Background
Meilink was a trustee for a bankrupt company that owed unemployment taxes to the California Unemployment Reserves Commission. Section 45 of the California Unemployment Reserves Act required employers that defaulted on their contributions to pay a 12% annualized interest payment on the principal owed.[1][2]
Meilink paid the principal owed to the commission plus six percent annualized interest. Meilink filed suit, alleging the 12% interest charged was a penalty and that six percent was the "reasonable and customary rate of interest" the company had to pay under Section 57j of the Bankruptcy Act and Article XX, Section 22 of the California Constitution.[1][2]
The United States Court of Appeals for the Ninth Circuit ruled that the company had to pay the full 12% interest charged by the state.[1][2]
Oral argument
Oral argument was held on December 17-18, 1941. The case was decided on January 5, 1942.[1]
Decision
The Supreme Court decided 8-0 that California could charge a bankrupt company an annualized 12% interest rate on unpaid state unemployment taxes. Justice Robert Jackson delivered the opinion of the court, joined by Chief Justice Harlan Stone and Justices Hugo Black, Stanley Reed, Felix Frankfurter, William Douglas, Frank Murphy, and James Byrnes. Justice Owen Roberts took no part in the decision of this case.[3][1]
Opinions
Opinion of the court
- See also: State unemployment tax
Justice Robert Jackson, writing for the court, argued that California could charge an annualized 12% interest rate on unpaid state unemployment taxes, despite Meilink's bankruptcy. Jackson ruled the 12% rate did not amount to a penalty (which could not be fully collected against a bankrupt entity), so the state could collect the full interest assessed on the late payment.[1]
| “ | We must give credit to a state legislature acting within its Constitutional sphere like that accorded to Congress acting in its Constitutional sphere. And the distinction which Congress made in the legislation considered in the Childs case, and in other revenue legislation, between penalty as a fixed ad valorem amount taking no account of time, and interest which does depend on time, is persuasive that its use of the word "penalty" in the Bankruptcy Act will bear a like differentiation from interest. ...
|
” |
| —Justice Robert Jackson, majority opinion in Meilink v. Unemployment Reserves Commission of State of California | ||
See also
- Federalism
- Unemployment insurance
- The Hughes Court
- Supreme Court of the United States
- History of the Supreme Court
External links
- Full text of case syllabus and opinions (Justia)
- Supreme Court of the United States
- Search Google News for this topic
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Justia, "Meilink v. Unemployment Reserves Comm'n, 314 U.S. 564 (1942)," accessed November 8, 2021
- ↑ 2.0 2.1 2.2 2.3 2.4 Cornell Law School, "Meilink v. Unemployment Reserves Comm'n," accessed August 27, 2021
- ↑ Cite error: Invalid
<ref>tag; no text was provided for refs namedoyez - ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
| |||||||||||