Multistate Tax Commission Eugene F. Corrigan v. United States Steel Corporation

This is an appeal by the Multistate Tax Commission (MTC) from an order of the district court dismissing MTC’s action to enforce its income tax audit of United States Steel Corporation, the court concluding that there was no remaining judicial controversy upon which it might grant further relief. We remand for more specific findings with respect to the substantiality of U.S. Steel’s compliance with a prior order of the court.

I. History of Proceedings

MTC was created under the Multistate Tax Compact, which became effective in 1967 and which has now been adopted by. more than 20 states. The Supreme Court upheld the constitutionality of the Compact in United States Steel Corp. v. Multistate Tax Commission, 434 U.S. 452 , 98 S.Ct. 799 , 54 L.Ed.2d 682 (1978). Article VIII of the Compact authorizes MTC to conduct audits on behalf of member states and to seek compulsory process to enforce its audits in the courts of any member state.

Eight states requested MTC to audit several corporations, including U.S. Steel. On August 23, 1976, MTC petitioned an Idaho state court for an order compelling production of documents. U.S. Steel with other corporations subject to the audit removed the…