fair share

South Dakota taxes the retail sales of goods and services in the State. Sellers are required to collect and remit the tax to the State, but if they do not then in-state consumers are responsible for paying a use tax at the same rate. Under prior decisions, South Dakota may not require a business that has no physical presence in the State to collect its sales tax. Consumer compliance rates are notoriously low, and it is estimated that those decisions cause South Dakota to lose between $48 and $58 million annually. Concerned about the erosion of its sales tax base and corresponding loss of critical funding for state and local services, the South Dakota Legislature enacted a law requiring out-of-state sellers to collect and remit sales tax as if the seller had a physical presence in the State. The Act covers only sellers that, on an annual basis, deliver more than $100,000 of goods or services into the State or engage in 200 or more separate transactions for the delivery of goods or services into the State. Respondents Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc. are merchants with no employees or real estate in South Dakota. Wayfair, Inc. is a leading online retailer of home goods and furniture and had net revenues of over $4.7 billion last year. Overstock.com, Inc. is one of the top online retailers in the United States and had net revenues of over $1.7 billion last year. Newegg, Inc. is a major online retailer of consumer electronics in the United States. Each of these three companies ships its goods directly to purchasers throughout the United States, including South Dakota. Each easily meets the minimum sales or transactions requirement of the Act, but none collects South Dakota sales tax. Pursuant to the Act’s provisions for expeditious judicial review, South Dakota filed a declaratory judgment action against respondents in state court, seeking a declaration that the requirements of the Act are valid and applicable to respondents and an injunction requiring respondents to register for licenses to collect and remit the sales tax. Respondents moved for summary judgment, arguing that the Act is unconstitutional. The trial court granted their motion. The South Dakota Supreme Court affirmed on the ground that Quill is controlling precedent. This Court granted certiorari. The case was argued on April 17, 2018, and decided on June 21, 2018.

In 1967 the Detroit Federation of Teachers was certified under Michigan's Public Employment Relations Act as the exclusive bargaining representative of all teachers employed by the Detroit Board of Education. The Union and the Board thereafter concluded a collective-bargaining agreement effective from July 1, 1969, to July 1, 1971. Among the agreement's provisions was an agency shop clause. Every teacher who had not become a Union member within 60 days of hire or of the clause's effective date had to pay the Union a service charge equal to the regular dues required of Union members. A teacher who failed to meet this obligation was subject to discharge. Christine Warczak and other named teachers filed a class action in a state court naming as defendants the Board, the Union, and several Union officials. Their complaint as amended alleged that they were unwilling or had refused to pay dues and that they opposed collective bargaining in the public sector. D. Louis Abood and other named teachers filed a separate action in the same state trial court with virtually identical allegations. This second action was held in abeyance pending disposition of the Warczak appeal. When that case was remanded the two cases were consolidated in the trial court for consideration of the defendants' renewed motion for summary judgment. Following the 1973 legislative amendment that expressly authorized agency-shop clauses the trial court granted summary judgment and upheld the clause under state law and the Federal Constitution. The Michigan Court of Appeals reversed the retroactive application of the amendment but upheld the clause insofar as service fees financed collective bargaining while invalidating it to the extent fees financed political and ideological activities. The Michigan Supreme Court denied review and the plaintiffs appealed to the United States Supreme Court.

In August and September 1972, an advertisement captioned “I say let's keep the campaign honest. Mobilize ‘truth squads' ” appeared in national publications including Time, Newsweek, and U. S. News and World Report, as well as nineteen local newspapers in communities where Bethlehem Steel Corp. maintained plants. Reprints of the advertisement, which featured quotations from a speech by petitioner Stewart S. Cort, chairman of the board of directors of Bethlehem, accompanied the September 11, 1972, quarterly dividend checks mailed to the corporation's stockholders. The costs of the advertisements and mailings were paid entirely from Bethlehem’s general corporate funds. Respondent, who owned fifty shares of Bethlehem stock and was qualified to vote in the 1972 Presidential election, filed suit on September 28, 1972, in the United States District Court for the Eastern District of Pennsylvania on behalf of himself and derivatively on behalf of Bethlehem. Count I of the complaint invoked jurisdiction under 28 U. S. C. § 1331 and sought relief under 18 U. S. C. § 610. Count II asserted a pendent claim under Delaware law alleging that the expenditures constituted an ultra vires act and a breach of duty by the defendants. The District Court denied respondent’s request for a preliminary injunction on October 25, 1972. On appeal, the Court of Appeals for the Third Circuit affirmed the denial solely on the ground that irreparable harm had not been shown. After the affirmance, petitioners moved for an order requiring respondent to post security for expenses under Pennsylvania law. The District Court declined to require security for the federal claim but ordered $35,000 security for the pendent state claim. Respondent then filed an amended complaint that eliminated Count II. The District Court granted petitioners’ motion for summary judgment. The Court of Appeals reversed that judgment, holding that a private cause of action existed under § 610 for both injunctive relief and derivative damage relief. The Supreme Court granted certiorari to review the decision.

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