Also known as: surcharges · surcharged · surcharging
Written by attorneys — see sources below.
2 senses
An additional fee imposed by a state on the disposal or handling of out-of-state waste or goods that exceeds the fee charged for equivalent in-state items. Discriminatory cost differentials based on origin are presumptively invalid under the Dormant Commerce Clause unless Congress has expressly authorized the discrimination.
The personal liability a court imposes on a fiduciary such as a personal representative, trustee, or conservator for breach of duty. The fiduciary must compensate the estate or trust for resulting losses, measured by the same standards that apply to trustees of express trusts.
Each sense below has its own examples, sources, and questions.
An additional fee imposed by a state on the disposal or handling of out-of-state waste or goods that exceeds the fee charged for equivalent in-state items. Discriminatory cost differentials based on origin are presumptively invalid under the Dormant Commerce Clause unless Congress has expressly authorized the discrimination.
Starlight Media operates a disposal facility in State A. The state charges Starlight Media a $50-per-ton surcharge for accepting hazardous waste generated in State B but only a $10-per-ton fee for identical in-state waste. Starlight Media refuses the out-of-state shipments and sues, claiming the differential violates the Dormant Commerce Clause. The court invalidates the surcharge because the origin-based cost differential is presumptively invalid.
Sterling Dynamics ships spent nuclear fuel from out of state to a facility in State A. State A imposes a surcharge on the out-of-state fuel under an express federal statute that permits such discrimination to offset storage costs. Sterling Dynamics challenges the surcharge as violating the Dormant Commerce Clause. The court upholds the surcharge because Congress expressly authorized the discrimination.
Sylvia Santos operates a small business and elects not to provide health coverage. The IRS assesses the shared responsibility payment against her. Santos argues the payment is an unconstitutional penalty rather than a tax. The court treats the payment as a valid exercise of the taxing power even though it functions like a surcharge on the uninsured.
2 common questions
In commerce regulation a surcharge is an additional fee that a state imposes on out-of-state waste or goods, often challenged under the Dormant Commerce Clause. In fiduciary administration a surcharge is personal liability imposed on a trustee or personal representative for breach of duty. The two senses share only the word. Their doctrinal triggers and remedies are unrelated.
Congress may expressly permit states to discriminate against interstate commerce in specified ways, such as allowing surcharges on certain out-of-state nuclear wastes. Once Congress grants that authority the surcharge does not violate the Dormant Commerce Clause. Absent such authorization the surcharge is presumptively invalid.
The personal liability a court imposes on a fiduciary such as a personal representative, trustee, or conservator for breach of duty. The fiduciary must compensate the estate or trust for resulting losses, measured by the same standards that apply to trustees of express trusts.
Stephen Shaw serves as trustee of a testamentary trust that directs immediate sale of the decedent's residence. Shaw delays the sale for years while the property deteriorates. Beneficiaries petition the court to surcharge Shaw for the resulting loss in value. The court imposes the surcharge because Shaw's prolonged retention breached his duty to administer the trust according to its terms.
In 1902, a trust indenture established Kingsbury Place as a private subdivision in St. Louis, with covenants requiring maintenance as desirable residence property of the highest class. The indenture empowers trustees and property owners to enforce its provisions against encroachment or injury. Except for one vacant lot, the subdivision features spacious two and three-story homes used exclusively as private residences. Louise Woodruff Johnston, owner of the house at #4 Kingsbury Place, died on January 14, 1973. Her will directed the executor, Mercantile Trust Co., to cause the home to be razed and the land sold, with proceeds transferred to the residue of the estate. Following Johnston's death, neighboring property owners and trustees for the Kingsbury Place Subdivision filed suit against the executor seeking an injunction to prevent demolition of the house. The plaintiffs contended that razing the home would adversely affect their property rights and the community. During trial, uncontradicted testimony established that the current value of the house and land totaled $40,000, while the empty lot would fetch no more than $5,000 after $4,350 in demolition costs. The St. Louis Commission on Landmarks and Urban Design had designated Kingsbury Place as a city landmark due to its architectural significance. Witnesses testified that demolition would depreciate adjoining property values by an estimated $10,000 and create a break in the urban design continuity. The trial court dissolved the temporary restraining order and ruled against the plaintiffs on all issues. The plaintiffs then appealed the denial of their petition to the Missouri Court of Appeals.
View caseSamantha Stone serves as personal representative of an estate. She fails to mail required appointment information to known heirs whose addresses are readily available. The heirs later discover losses caused by her self-dealing and petition to surcharge her. The court permits the surcharge action because the notice breach does not invalidate her authority but exposes her to personal liability for resulting harm.
3 common questions
The beneficiary must show that the representative breached a fiduciary duty and that the breach caused a loss to the estate or to the beneficiaries' interests. The measure of liability is the same as that applied to a breaching trustee. The representative may be surcharged even if the conduct was authorized at the time only if later facts reveal the breach.
No. Failure to mail required appointment information to known heirs and devisees constitutes a breach of duty that may support surcharge or removal. The statute expressly provides that the breach does not affect the validity of the appointment or the representative's powers.
…” 505 U. S., at 169 (quoting 42 U. S. C. § 2021c(a)(1)(A)). A State that shipped its waste to another State was exposed to surcharges by the receiving State, a portion of which would be paid over to the Federal Government. And a State that did not adhere to the statutory scheme faced “[p]enalties for failure to comply,”…
…L. Ed. 2d 254 (1973), the Supreme Court held that members of an environmental organization had standing to challenge a railroad surcharge on shipping rates of recyclable materials on allegation that the higher rates would discourage the use of recyclable waste materials and promote increased use of new raw materials, thus…
…appeal, and now affirm. I. Petitioner’s Liability Petitioner argues that New York law does not permit a fiduciary to be surcharged for imprudent management of a trust for failure to diversify in the absence of additional elements of hazard, and that it relied upon, and complied with, this rule in administering the…
A conservator may not be surcharged for money paid for support, care, or education in accordance with a parent's or guardian's recommendations unless the conservator knows the recommender derives personal financial benefit or the recommendations are not in the protected person's best interest.