A Case Analysis gives students a chance to demonstrate critical thinking skills as well as knowledge of legal vocabulary. Please make sure to answer the questions asked.
Legal Vocabulary: The text book identifies four schools of legal interpretation: (1) Identification with the Vulnerable; (2) Historical School: Tradition; (3) Legal Realism; and (4) Cost-Benefit Analysis. Short definitions of these four schools of legal interpretation are provided below:
1. Identification with the Vulnerable: Creating laws guided by a pursuit of fairness that considers members of our society, such as the ill, children, the aged, the disabled, and the poor, who require assistance meeting their fundamental needs of life, health, and education
2. Historical School: Tradition: Creating laws guided by stare decisis, which links our future behavior to the behavior of those who faced similar problems in earlier historical periods
3. Legal Realism: Creating laws guided by social and economic conditions, in addition to the law
4. Cost-Benefit Analysis: Creating laws guided by an examination of costs and benefits for alternative laws or decisions, placing monetary values on those costs and benefits, and choosing the legal alternatives that maximize the ratio of benefits to costs.
Background: South Dakota v. Wayfair, Inc., 138 S.Ct. 2080, 201 L.Ed.2d 403 (2018)
Prior to 2016, a State could not require a business to collect its sales tax on State residents’ purchases if the business lacked a physical presence in the State. Under this scenario, an Internet-based seller did not pay South Dakota sales tax on its sales to South Dakota residents.
In 2016, South Dakota confronted the serious inequity imposed on physically present sellers relative to Internet-based sellers by enacting a law, S.B. 106.
S.B. 106 requires out-of-state sellers to collect and remit sales tax “as if the seller had a physical presence in the state.” S.B. 106 applies only to 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.
Wayfair, Inc. is a merchant with no employees or real estate in South Dakota. Wayfair, Inc. did not collect sales tax, based on the prior law. South Dakota sued Wayfair, Inc., asking the Court to declare S.B. 106 constitutional. If S.B. 106 was constitutional, South Dakota could collect sales tax from Wayfair, Inc. on Internet-based sales to South Dakota residents.
In South Dakota v. Wayfair, Inc., the United States Supreme Court ruled that a State may require out-of-state sellers to collect and remit state sales tax, even if the sellers do not have a physical presence in the state. As part of its logic, the Court said, “Modern e-commerce does not align analytically with a test that relies on…physical presence [requirements]….”
Please answer the following question:
Which School of Legal Interpretation did the Court likely follow in deciding the Wayfair case? Please answer using the Conclusion-Rule-Analysis-Conclusion (CRAC) format. Use the definition of your chosen School of Legal Interpretation (the definitions are provided above) as the RULE.