When Legal and the Founder woke up in the drunk tank, Legal said, ‘This is worse than the time we were abducted by aliens’.
‘The first time or the second time’, the Founder asked. He didn’t like the way Legal kissed his ass, but when he looked at the large tattooed man leaning against him snoring and the Spanish dwarf looking up at him, he realized that he was not in a position to pick and choose his friends.
‘Both.’
‘That’s what you get for Roswell.’
‘Fuck Roswell.’
The tattooed man shifted his weight and snored a little louder. The dwarf perked up. I hope the little person doesn’t speak about Jesus, the Founder thought. Anything but that.
‘The slash account bills came in yesterday’, the Founder said.
‘They are always small’, Legal said. ‘Paying them is more an annoyance than anything else.’
‘It’s the principal of it’, the Founder said. ‘It seems wrong that I have to pay property tax on an asset that I don’t own.’
The tattooed man shifted his weight and woke up. The Founder saw that he was large, old and bearded, with hooded eyes. When he spoke, he shared his halitosis with the room.
‘What do you know about Steckel,’[1] the man asked.
‘Steckel One or Steckel Two’[2], Legal asked.
‘Both’, the man said.
‘Steckel Two was decided wrongly’, Legal said. ‘It was wrong on constitutional grounds when it was decided and it is more wrong now.’
‘I went to high school with a guy named Fred Steckel’, the Founder said.
Legal sat up straight, turned toward the Founder and said, ‘You mean the Fred Steckel? The finance professional whose LinkedIn profile says he has done more than a hundred thirty billion of M and A deals? The Connecticut resident who haunts charity events?’
‘That’s a hundred thirty billion of notional, not bonus checks’, the Founder said ‘and we made fun of him because he was six four and had a big nose.’
‘Be nice to the people you go to high school with’, Legal said. ‘They end up running the country.’
‘Man, I need a drink, the Founder said.
.
‘Where did we start the evening’, Legal asked.
‘I had dinner at Sams.’
‘Did you have the branzino?’
‘You can’t beat a good branzino.’
‘Nope.’
‘Then I ditched the family and went to Doubledays. Billy was bloviating and I got sick of Vinny trying to sell me a time-share, so you and I went to the Legitimate Businessman’s Social Club. Then Meatball broke out the homemade Baileys. I don’t remember anything after that.’
‘I’m glad New Year only happens only once a year.’
‘I could really use a drink.’
‘So could I.’
.
‘What was Steckel’, the tattooed man asked. He had stopped snoring and was now sitting up straight, looking at the Founder and Legal. A wiry man in the corner had cleared a space for himself by falling asleep in a pool of urine.
‘All I know is it doesn’t seem fair for me to write those checks’, the Founder said.
‘What do you mean by ‘fair’, the tattooed man asked.
‘I mean, fair’, the Founder said. ‘Something that complies with notions of fairness.’
‘If I asked you what water was, would you say, ‘The thing that makes other things wet’?’
‘What did you say your name was’, the Founder asked the tattooed man.
‘What do you think’, the tattooed man said to Legal. ‘How would you define fairness?’
‘The best I can say is that something is fair when it is consistent with basic standards of justice’, Legal said. ‘The notion is pre-linguistic.’
‘So you know it when you see it’, the tattooed man said.
Legal blushed. ‘I think there is a procedural aspect to it as well as a substantive aspect’, he said. ‘The procedural aspect is easy to define. Maybe, something is fair in a procedural sense if results are meted out to similarly-situated parties in a similar way? When it comes to substantive fairness, I can’t do better than ‘I know it when I see it’, because substantive fairness is rooted in prejudices.’
‘We have a department devoted to substantive justice’, the Founder said. ‘It is called DEI. We can get them in here to talk to that topic, if you like.’
‘There’s no need for that’, the tattooed man said.
‘When do we get out of here’, Legal asked.
‘You get out when you sober up’, the tattooed man said. ‘I work here.’
.
‘What’s with the little man’, Legal said. ‘The way he looks at me creeps me out. It’s like he’s a German Shephard and I’m hamburger meat.’ As legal spoke, the little guy looked up at him and beamed.
‘He’s harmless’, the tattooed man said.
Legal grunted.
‘You should have been here last week, the tattooed man said. He reduced a biker to tears.’
‘What happened?’
‘The biker came in on ibogaine. He lay on his back, talking to the little guy. Then he closed his eyes and started seeing things. When he saw a door, he told the little guy, he went through it. When he came to a staircase, he went up it. He said he remembered coming through the birth canal, living through an abusive childhood, enlisting in the Marines and doing three tours in Iraq and Afghanistan. He described children who were maimed by US ordnance and a friend who died in his arms. After four hours, he said that he had discussed this with plenty of people, but therapists are useless and nobody had walked through the pathways in his brain with him the way the little guy had. Re-living his trauma hand in hand with the little man had, he said, been a life-changing experience.’
‘He cried as he spoke about his past trauma?’
‘No. He cried when the little guy said, ‘Lo siento. No hablo ingles’.’
.
‘Tell me about Steckel’, the tattooed man said.
‘Steckel is the spawn of the devil’, the Founder said.
‘It is uptight WASP ladies vomiting into your mouth at a library board meeting’, Legal said.
‘It is the beginning of our suffering’, the Founder said.
‘It is injustice manifest’, Legal said.
The tattooed man pursed his lips and frowned. ‘At this rate, you’re never going to get out of here’, he said. ‘Tell me about Steckel.’
.
‘Steckel deals with two problems’, Legal said. ‘The first is that manufactured homes are real property for some purposes but personal property for others. The second is that a manufactured home in a park sits on rented land.’
‘Go on’, the tattooed man said.
‘Under current law, a manufactured home affixed to a foundation is personal property for secured lending purposes but real property for federal income tax purposes. I don’t know what it is for Statute of Fraud purposes, but you would be foolish not to put a contract for the transfer of a manufactured home in writing.’
‘You did that once’, the Founder said.
‘Fuck off’, Legal said. ‘The issue here is what a manufactured home is for municipal finance purposes. When a municipality sends a park owner a property tax bill, should the value of the homes in the owner’s park be included in the assessment, and if so, should the park owner, or the owners of the homes, be liable for tax thereon, even though the park owner does not own those homes?’
‘The homes sit on his land’, the tattooed man said. ‘Shouldn’t their value be included in the assessment of the land?’
‘I don’t think so’, Legal said. ‘He has none of the benefits of ownership with respect to those homes. He can’t live in them, sell them, hypothecate them, move them, or paint them an appealing shade of pink. It offends notions of fairness for him to pay property taxes on them.’
‘What do you mean by ‘fair’?’
‘Oy.’
‘That is not an argument.’
‘No.’
‘Continue.’
‘After the Second World War’, Legal said, ‘What we now know as manufactured homes became popular in New York State. These grew out of travel trailers, or what we would now call RVs. Entrepreneurs developed land for people to park their mobile homes. Under old law, these structures were treated as personal property, rather than as real property for municipal finance purposes. This meant that mobile home park residents benefitted from the public services financed by property taxes – public education, police and fire protection, the protection of the local court system – without paying into the pot. To address this problem, a few municipalities tried to tax manufactured homes as real property. Park owners sued, and won.[3] Then New York changed the statutory definition of real property to include manufactured homes.[4] Park owners sued over the constitutionality of the statute. That was Steckel.’
‘Any relation to Fred’, the Founder asked.
‘Focus, please’, the tattooed man said.
.
‘How did you do in Con law class’, the Founder asked Legal.
‘Terribly’, Legal said. ‘None of it made sense to me. The professor sounded like the wa-wa noise the grownups make in the Charlie Brown Christmas Special. I was lucky to get a B.’
‘You didn’t tell me that in the interview’, the Founder said.
‘You didn’t ask’, Legal said.
.
‘What were the constitutional arguments in Steckel’, the tattooed man asked.
‘There were two’, Legal said. ‘An equal protection argument and a due process argument. I think the court wiffed it because it focused on the equal protection argument. The due process argument is the stronger of the two.’
‘What is due process?’
‘Process that is due.’
‘Is that a circular argument?’
‘I do not believe so, if you have a positive definition of the process that is due.
.
A large corrections officer jangled a ring of keys and unlocked the door. ‘You’, he said, pointing at the skinny guy lying in his piss. ‘Come with me’. The man stood up and walked toward the door.
‘You and you’, the guard said, pointing at the Founder and Legal, ‘You stay till you’re done’. The Founder thought the guard could pierce a steel plate with that index finger.
‘You’, the guard said, pointing at the midget. ‘Clean this up.’ He held a mop out toward the little man and pointed to the puddle of urine.
‘No hablo Ingles’, the little man said.
The CO shrugged, led the skinny man out, locked the door and left the Founder, Legal, the tattooed man, the little man and the puddle of piss as he had found them.
.
‘How can an equal protection argument be relevant to a case like this’, the tattooed man asked.
‘It has to do with the nature of mobile homes in the late fifties and early sixties’, Legal said. ‘Mobile homes were more mobile back then. They were more like RVs than manufactured homes. The law assessed park owners on the value of homes in their park on a specific date. This meant that, if a home owner parked his home in A’s park a day before the assessment date, left it there for a week and then moved it to B’s park, A would be stuck with the tax, even though B would have the economic benefit of the home owner paying him lot rent for most of the year. The argument was that, in order for similarly-situated parties to be treated similarly, the parties should be taxed in a manner consistent with economic substance.’
‘A valid argument, I believe’, the tattooed man said.
‘Not really’, Legal said. ‘It skirts the fairness issues raised by the due process argument. And the facts have changed in a way that make it less relevant today than when the cases were argued.’
‘How so?’
‘Manufactured homes are less mobile today than they were sixty years ago. In the early sixties, you could still attach a mobile home to a trailer hitch and haul it away. Now, only a licensed manufactured home mover, using special equipment, can move a home. It is a rare occurrence for a home owner to move a home into or out of a park.’
‘So the equal protection argument is a loser.’
‘I believe it is irrelevant as couched. It could be powerful from another perspective. The juice is in the due process argument.’
.
‘What was Hoeper v. Tax Commission of Wisconsin,’[5] the tattooed man asked.
‘It was a case that came out of Wisconsin some time between when umlauts dropped out of written English and when the joint filing rules were adapted’, Legal said.
‘You try my patience, Glaucon.’
‘How did you know my real name?’
‘Continue.’
‘The plaintiff in Hoeper was a man who married a rich widow. He tried to file singly, but the Service imputed income from his wife’s property to him. He paid the tax under protest and sued. The Court held is that it is a failure of due process to tax someone on income or property that does not belong to them. Here’s the money quote:
‘[I]n law and in fact, the wife’s income is in the fullest degree her separate property and in no sense that of her husband, the question presented is whether the state has power, by an income tax law, to measure his tax not by his own income, but, in part, by that of another…
‘We have no doubt that, because of the fundamental conceptions which underlie our system, any attempt by a state to measure the tax on one person’s property or income by reference to the property or income of another is contrary to due process of law as guaranteed by the Fourteenth Amendment. That which is not in fact the taxpayer’s income cannot be made such by calling it income.[6]’
‘At common law, the Court held, men had the economic benefit associated with owning their wife’s property. Under contemporary law, that was not the case. Married women had the right to use, hypothecate and dispose of their property. Their husbands did not have the same rights with respect to that property. Because a husband did not have the benefit of owning his wife’s property, taxing a husband on income arising from property owned by his wife violated the due process clause of the Fourteenth Amendment.’
‘So Hoeper was an income tax case’, the tattooed man said.
‘Hoeper was an income tax case’, Legal said.
‘And Steckel was a property tax case’, the tattooed man said.
‘Yes.’
‘So, this is dicta.’
‘The term ‘dicta’ always seemed dirty to me.’
‘Can you please tell me why it is not apposite here?’
‘First, the word ‘property’ is in the holding itself. The question the Court refers to is whether a law ‘measure(s) the tax on one person’s property or income by reference to the property or income of another’. I think that that is a strong indication that the Court thought that X’s tax liability should not be calculated with reference to property owned by Y. Second, the income on which Mr. Hoeper was taxed was dividends, rents and interest paid from property owned by his wife. I won’t get into the tree-and-fruit analysis –‘
‘Please don’t’, the Founder said. ‘My head hurts already.’
‘- But this is tree and fruit.’
‘How did the New York Court of Appeals distinguish Hoeper’, the tattooed man asked.
‘They didn’t, really’, Legal said. ‘They closed their eyes and wished it away. They wiffed on the equal protection argument and they ignored the due process argument.’
‘How so?’
‘They dismissed the equal protection argument by saying that it was hypothetical. There was no actual harm to a park owner whose park housed a trailer the day before the assessment date and no actual benefit to a park owner whose park accepted a trailer the day after the assessment date. Since the harm was hypothetical, the court said, it couldn’t rule on it.’
‘Isn’t that like saying that a law that says that Black people can’t eat at lunch counters is not vulnerable to an equal protection challenge until an actual Black person is denied service?’
‘Yes, but there was more.’
‘Tell me, O Glaucon.’
‘The court only looked at the transaction as between Park Owner A and Park Owner B. I think that, in doing an equal protection analysis, the court should have looked to the treatment of Park Owner A and the home owner. Both are owners of real estate. One is taxed, the other isn’t. That looks like disparate treatment of similarly-situated parties. I am a simple man. That does not make sense to me.’
‘That’s my line.’
‘Their treatment of the due process claim was slippery and non-existent. First, they said that it did not make sense because, traditionally, stick built houses on rented land were included in the lessor’s tax assessment. There was precedent for this. Many courts had upheld that treatment.‘
At the mention of legal precedents, the tattooed man frowned. ‘Are you familiar with dung beetles, O Glaucon’, he asked.
‘Better than I would like to be’, Legal said.
‘And do you know what they eat?’
‘They eat shit.’
‘And how numerous are they?’
‘In the quadrillions, I believe.’
‘So quadrillions of dung beetles eat shit, O Glaucon?’
‘That is correct.’
‘So – should you eat shit? Quadrillions of dung beetles do so, after all.’
‘This guy is good’, the Founder said.
‘Dude’, Legal said. ‘I am just quoting. In addition to citing precedent, the court stated that, since park owners can pass the cost of tax on to their tenants by increasing lot rent, they should bear the burden of property taxes on homes owned by tenants.’
‘That’s not true’, the Founder shouted. ‘That’s not fucking true!’
‘Shh!’, Legal said.
The Founder picked up a tin cup left by the skinny man who shed the puddle of urine and began to bang it against the bars of the cell. ‘That is bullshit’, he shouted. ‘It’s not fucking fair! I have to pay taxes on other peoples’ property! I can’t be made whole for the cost I bear! I want to see a judge! I want to speak with Justice Holmes!’
‘Knock it off’, Legal said. ‘You’ll get us put away for good.’
‘Let him scream’, the tattooed man said to Legal. He patted the Founder on the back and said, ‘Let it out. All the frustration and anger. The bitterness at the injustice of it all. Don’t hold back. Let it go.’
.
‘Is that true’, the tattooed man asked Legal after the Founder quieted down. ‘Can you really not pass on the cost of property taxes anymore?
‘Nope’, Legal said. ‘The Nakba law of 2019 instituted rent control. That limits rent increases to three percent of right and six percent in certain cases regardless of inflation and tax assessments. In 1990, the Appellate Division held that a park owner can not charge a resident a separate fee to make the park owner whole for the portion of the assessment attributable to the value of the resident’s home.[7] So a park owner is required to pay tax on another party’s asset and can not pass on the cost either through rent or through a charge other than rent.’
‘I want my mother’, the Founder said. He had tired himself out by now and was lying on his back with his head in the tattooed man’s lap.
‘There, there’, the tattooed man said. ‘This is nothing that a little hemlock won’t cure.’
.
In the early afternoon, the corrections officer came for the two men. ‘You and you’, he said, pointing with the metal-piercing finger.
‘Us’, the Founder asked.
‘Unless you want to stay.’
Legal offered his hand to the Founder and pulled him up.
‘I have to get to the office’, Legal said.
‘Let’s stop by Doubledays first’, the Founder said. ‘I need a drink.’
‘Say hi to the guys there’, the tattooed man said. ‘I have not been there for a while, but I have fond memories of the place.’
The dwarf stood up, looked at the two men, and extended his hand. The Founder noticed that his head was normal-sized and his nose was straight and strong, like Mussolini’s. ‘Tip the staff on the way out, please’, he said in a baritone voice. ‘They work hard to make your time here a positive experience.’
[1] New York Mobile Homes Ass’n v. Steckel, 9 N.Y.2d 533 (1961).
[2]For purposes of this dialogue, Steckel One is the lower court case, which park owners won, and Steckel Two is the Court of Appeals decision, which they lost. For a detailed discussion of the issues raised by Steckel and its progeny, See Kaufmann, Mobile Homes on Rented Land: Why Steckel II Needs Updating, NYSBA News Center Dec. 12, 2022, available at https://nysba.org/mobile-homes-on-rented-land-why-steckel-ii-needs-updating/
[3] See, e.g. Stewart v. Farrington, 203 Misc. 543, 544 (Sup. Ct. Broome Co., 1953); Erwin v. Farrington, 285 A.D. 1212 (4th Dep’t 1955).
[4] NY RPTL, Article 1, 102(12)(g).
[5] 284 U.S. 206 (1931).
[6] Id.
[7] People ex rel. Higgins v. Leier, 164 A.D. 2d 492 3d Dep’t, 1990).