Moore v. Mitchell
Citation and Court
30 F.2d 600 (2d Cir. 1929) (L. Hand, J.)
Facts
Ohio sought to enforce an Ohio tax claim against a New York defendant in New York federal court. The tax had not been reduced to judgment in Ohio; Ohio sought direct enforcement of its tax statutes in New York courts.
Issue
Whether a New York court will enforce another state’s (Ohio’s) tax laws by collecting a tax owed to Ohio from a New York-based defendant.
Holding
New York courts will not enforce Ohio’s tax laws; the traditional common law revenue rule bars courts from enforcing the tax obligations of a foreign sovereign.
Rule / Doctrine
The revenue rule (or penal/revenue law exception) holds that courts will not enforce another sovereign’s tax statutes or penal laws as an original matter. This is based on respect for territorial sovereignty — each state’s revenue laws are presumed to operate only within its own borders, and courts of other sovereigns are not enforcement mechanisms for a foreign state’s tax collectors.
Significance
Moore v. Mitchell is a classic Learned Hand opinion articulating the revenue rule in the interstate context. It is read alongside Milwaukee County v. M.E. White Co. (1935) to illustrate the distinction between enforcing tax claims directly (barred) and enforcing tax judgments (required by Full Faith and Credit).