## Facts

- Minnesota enacted a 1933 chain-store tax that included a graduated gross-sales tax on chain-store retailers.
- The tax rate increased with sales volume, ranging from 0.05% on initial sales up to 1% on sales over $1,000,000.
- National Tea Company and other chain-store retailers paid the tax for 1933 and 1934 under protest and sued in Minnesota courts for refunds.
- Minnesota trial courts entered judgments ordering refunds, and the Minnesota Supreme Court affirmed.
- The Minnesota Supreme Court stated the tax violated both the Equal Protection Clause of the Fourteenth Amendment and Minnesota’s constitutional requirement that taxes be uniform on the same class of subjects.
- The Minnesota Supreme Court described the state and federal limitations on tax classification as “identical,” and its analysis did not clearly separate state-law and federal-law grounds.

## Issues

1. Whether the U.S. Supreme Court had jurisdiction to review a state-court judgment when it was unclear whether the judgment rested on an adequate and independent state constitutional ground or on federal constitutional law.
2. What disposition is proper when the state court’s opinion obscures whether the controlling basis of decision is state law, federal law, or both.

## Decision

- The Court did not reach the merits of the constitutional challenge to the tax.
- The Court held that the basis of the state court’s decision was obscure and therefore placed the Court’s appellate jurisdiction in doubt.
- The Court vacated the judgment and remanded to allow the state and federal questions to be clearly separated.

## Legal Principles

- The U.S. Supreme Court lacks jurisdiction to review a state-court judgment that rests on a state-law ground that is adequate to support the judgment and independent of federal law.
- When a state court blends state and federal grounds such that the controlling basis of decision cannot be determined, the Court may vacate and remand for clarification rather than decide a potentially unnecessary federal question.
- Vacatur and remand in this setting serves to prevent an advisory federal constitutional ruling and to determine whether a federal question is properly presented for review.

## Conclusion

Because the Minnesota Supreme Court’s opinion did not clearly disclose whether the refund judgment rested independently on Minnesota’s constitutional uniformity clause or on the Fourteenth Amendment, the U.S. Supreme Court vacated and remanded for clarification so it could determine whether federal review was available.


Minnesota v. Nat’l Tea Co., 309 U.S. 551 (1940)