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362 U.S. 365
80 S.Ct. 779
4 L.Ed.2d 797
MARINE COOKS & STEWARDS, AFL, etc., et al., Petitioners,v.PANAMA STEAMSHIP COMPANY, Ltd., et al.
No. 403.
Argued March 2, 3, 1960.
Decided April 18, 1960.
Rehearing Denied May 31, 1960.
See 363 U.S. 809, 80 S.Ct. 1235.
Mr. John Paul Jennings, Pebble Beach, Cal., for petitioners.
Mr. John D. Mosser, Portland, Or., for respondents.
Mr. Justice BLACK delivered the opinion of the Court.
1
The respondents, who are the owner, time charterer, and master of the Liberian registered vessel, S. S. Nikolos, brought this action in a United States District Court against the petitioner union and its members praying for temporary and permanent injunctions to restrain, and for damages allegedly suffered from, the union's peaceful picketing of the ship in American waters and its threats to picket shore consignees of the ship's cargo should they accept delivery. The union's sole contention was that the District Court was without jurisdiction to restrain the picketing because of the Norris-LaGuardia Act which states in § 1:
2
'That no court of the United States, as herein defined, shall have jurisdiction to issue any restraining order or temporary or permanent injunction in a case involving or growing out of a labor dispute, except in a strict conformity with the provisions of this Act; nor shall any such restraining order or temporary or permanent injunction be issued contrary to the public policy declared in this Act.'1
3
Section 4 of that same law specifically denies jurisdiction to District Courts to issue any restraining order or temporary or permanent injunction to prohibit unions from:
4
'(e) Giving publicity to the existence of, or the facts involved in, any labor dispute, whether by advertising, speaking, patrolling, or by any other method not involving fraud or violence * * *.'2
5
Notwithstanding these provisions of the Norris-LaGuardia Act and despite an express finding that the union and its members had not been guilty of fraud, and had not threatened or committed any acts of physical violence to any person or any property, the District Court issued a temporary injunction to restrain the picketing.3 The injunction prohibited picketing by the petitioner union of 'the §§ 'Nikolos' or any other vessel registered under a foreign flag and manned by an alien crew and owned, operated or chartered by' respondents, in the Puget Sound area. This action of the court was based on its conclusions that (a) the case did not involve or grow out of any labor dispute within the meaning of the Norris-LaGuardia Act and (b) even if there were a labor dispute within the meaning of that Act, the court had jurisdiction to restrain the picketing because it interfered in the internal economy of a vessel registered under the flag of a friendly foreign power and amounted to an 'unlawful interference with foreign commerce.'4 The court's conclusion rested on the following facts, about which there was no substantial dispute.
6
The petitioner and other national labor organizations act as bargaining representatives for most of the unlicensed personnel of vessels that fly the American flag on the Pacific Coast. Petitioner alone, pursuant to National Labor Relations Board certification, represents employees of the stewards' department on a large majority of those vessels. The S. S. Nikolos is owned by a Liberian corporation, was time-chartered for this trip by another Liberian corporation, and all members of its crew were aliens working under employment contracts made outside this country. There was no labor dispute between the ship's employees and the ship. The Nikolos picked up a cargo of salt in Mexico and carried it to the harbor of the port of Tacoma, Washington, for delivery to an American consignee there. After the ship entered the Tacoma harbor it was met by the union's boat which began to circle around the Nikolos displaying signs marked 'PICKET BOAT.' Later an additional sign was put on the boat reading: 'AFL—CIO seamen protest loss of their livelihood to foreign flagships with substandard wages or substandard conditions.' The union threatened to extend its picketing to the consignee of the salt should an attempt be made to berth and unload that cargo. Although the picketing was peaceful and there was no fraud, the result was that the ship could not deliver its cargo.
7
On appeal from the temporary injunction to the Court of Appeals the petitioner argued that the injunction granted by the District Court was beyond the jurisdiction of that court because of the provisions of § 4 of the Norris- LaGuardia Act previously set out,5 but the Court of Appeals rejected that contention and upheld that injunction.6 That court's view was based almost entirely upon our holding in Benz v. Compania Naviera Hidalgo, 353 U.S. 138, 77 S.Ct. 699, 1 L.Ed.2d 709. Certiorari was granted to consider the question of the applicability of the Norris-LaGuardia Act here, 361 U.S. 893, 80 S.Ct. 197, 4 L.Ed.2d 150, and in Order of Railroad Telegraphers v. Chicago & North Western R. Co., 361 U.S. 809, 80 S.Ct. 56, 362 U.S. 330, 80 S.Ct. 761. We think neither the holding nor the opinion in the Benz case supports the narrow construction the Court of Appeals gave the Norris-LaGuardia Act in this case.
8
The Benz case was decided by a United States District Court sitting as a state court to enforce state law under its diversity jurisdiction. The question in the Benz case was whether the Labor Management Relations Act of 1947, 29 U.S.C.A. § 141 et seq., governed the internal labor relations of a foreign ship and its foreign workers under contracts made abroad while that ship happened temporarily to be in American waters. The Benz case decided that the Labor Management Relations Act had no such scope or coverage and that it accordingly did not pre-empt the labor relations filed so as to bar an action for damages for unlawful picketing under Oregon law. Nothing was said or intimated in Benz that would justify an inference that because a United States District Court has power to award damages in state case growing out of labor disputes it also has power to issue injunctions in like situations. That question—of United States courts' jurisdiction to issue injunctions in cases like this—is to be controlled by the Norris-LaGuardia Act.
9
That Act's langauge is broad. The language is broad because Congress was intent upon taking the federal courts out of the labor injunction business except in the very limited circumstances left open for federal jurisdiction under the Norris-LaGuardia Act. The history and background that led Congress to take this view have been adverted to in a number of prior opinions of this Court in which we refused to give the Act narrow interpretations that would have restored many labor dispute controversies to the courts.7
10
It is difficult to see how this controversy could be thought to spring from anything except one 'concerning terms or conditions of employment,' and hence a labor dispute within the meaning of the Norris-LaGuardia Act.8 The protest stated by the pickets concerned 'substandard wages or substandard conditions.' The controversy does involve, as the Act requires, 'persons who are engaged in the same industry, trade, craft, or occupation.'9 And it is immaterial under the Act that the unions and the ship and the consignees did not 'stand in the proximate relation of employer and employee.'10 This case clearly does grow out of a labor dispute within the meaning of the Norris-LaGuardia Act.
11
The District Court held, however, that even if this case involved a labor dispute under the Norris-LaGuardia Act the court had jurisdiction to issue the injunction because the picketing was an 'unlawful interference with foreign commerce' and interfered 'in the internal economy of a vessel registered under the flag of a friendly foreign power' and prevented 'such a vessel from lawfully loading or discharging cargo at ports of the United States.'11 The Court of Appeals adopted this position, but cited no authority for its statement that the picketing was 'unlawful,' nor have the respondents in this Court pointed to any statute or persuasive authority proving that petitioner's conduct was unlawful. Compare § 20 of the Clayton Act, 29 U.S.C. § 52, 29 U.S.C.A. § 52. And even if unlawful, it would not follow that the federal court would have jurisdiction to enjoin the particular conduct which § 4 of the Norris-LaGuardia Act declared shall not be enjoined. Nor does the language of the Norris-LaGuardia Act leave room to hold that jurisdiction it denies a District Court to issue a particular type of restraining order can be restored to it by a finding that the nonenjoinable conduct may 'interfere in the internal economy of a vessel registered under the flag of a friendly foreign power.'12
12
Congress passed the Norris-LaGuardia Act to curtail and regulate the jurisdiction of courts, not, as it passed the Taft-Hartley Act, to regulate the conduct of people engaged in labor disputes. As we pointed out in the Benz case, a ship that voluntarily enters the territorial limits of this country subjects itself to our laws and jurisdiction as they exist.13 The fact that a foreign ship enters a United States court as a plaintiff cannot enlarge the jurisdiction of that court. There is no presented to us here, and we do not decide, whether the picketing of petitioner was tortious under state or federal law. All we decide is that the Norris-LaGuardia Act deprives the United States court of jurisdiction to issue the injunction it did under the circumstances shown.
13
The judgment of the Court of Appeals is reversed and the case is remanded to the District Court with directions to dismiss the petition for injunction. It is so ordered.
14
Judgment of Court of Appeals reversed and case remanded with directions.
15
Mr. Justice WHITTAKER, believing that the controversy in this case does not constitute a lawful 'labor dispute' within the meaning of the Norris-LaGuardia Act, see his dissenting opinion in Order of Railroad Telegraphers v. Chicago & North Western R. Co., 362 U.S. at page 345, 80 S.Ct. at page 769, dissents.
1
47 Stat. 70, 29 U.S.C. § 101, 29 U.S.C.A. § 101.
2
47 Stat. 70, 71; 29 U.S.C. § 104, 29 U.S.C.A. § 104. Even in the limited jurisdiction the Norris-LaGuardia Act leaves to federal courts in labor controversies, other sections of the Act narrowly circumscribe the cases where, the parties against whom, and the circumstances in which, injunctions may issue. If, however, issuance of a specific injunction is prohibited by one section, such as § 4, compliance with the requirements of another section, such as § 7, does not justify the injunction.
3
Panama Steamship Co. v. Marine Cooks & Stewards, AFL, 1959 A.M.C. 340.
4
1959 A.M.C. 340, 350.
5
In the District Court respondents rested their claim for jurisdiction on 28 U.S.C. § 1331, 28 U.S.C.A. § 1331, which provides:
'The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy * * * arises under the Constitution, laws or treaties of the United States.'
Between the time the District Court's injunction was appealed and the time the Court of Appeals decided the appeal, this Court decided Romero v. International Terminal Operating Co., 358 U.S. 354, 79 S.Ct. 468, 483, 3 L.Ed.2d 368. That case decided that § 1331 does 'not extend, and could not reasonably be interpreted to extend, to cases of admiralty and maritime jurisdiction.' Id., 358 U.S. at page 378, 79 S.Ct. at page 483. In the Court of Appeals the petitioner here broadened its challenge to the jurisdiction of the District Court in this case by invoking the interpretation of § 1331 declared in the Romero case. The view we take of the challenge to the court's jurisdiction under the Norris-LaGuardia Act makes it unnecessary for us to determine the entirely separate question raised under the Romero case.
6
Marine Cooks & Stewards, AFL, v. Panama Steamship Co., 9 Cir., 1959, 265 F.2d 780.
7
See, e.g., United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788; Milk Wagon Drivers' Union etc. v. Lake Valley Farm Products, 311 U.S. 91, 61 S.Ct. 122, 85 L.Ed. 63; New Negro Alliance v. Sanitary Grocery Co., 303 U.S. 552, 58 S.Ct. 703, 82 L.Ed. 1012; Lauf v. E. G. Shinner & Co., 303 U.S. 323, 58 S.Ct. 578, 82 L.Ed. 872. And see Allen Bradley Co. v. Local Union No. 3, I.B.E.W., 325 U.S. 797, 805, 65 S.Ct. 1533, 1538, 89 L.Ed. 1939.
'The underlying aim of the Norris-LaGuardia Act was to restore the broad purpose which Congress thought it had formulated in the Clayton Act but which was frustrated, so Congress believed, by unduly restrictive judicial construction.' United States v. Hutcheson, 312 U.S. 219, 235—236, 61 S.Ct. 463, 468, 85 L.Ed. 788.
This congressional purpose, as is well known, was prompted by a desire to protect the rights of laboring men to organize and bargain collectively and to withdraw federal courts from a type of controversy for which many believed they were ill-suited and from participation in which, it was feared, judicial prestige might suffer. See Frankfurter and Greene, The Labor Injunction (1930), at 200; Gregory, Labor and the Law (1958), at 184—199.
8
Section 13 of the Norris-LaGuardia Act, 29 U.S.C. § 113(c), 29 U.S.C.A. § 113(c), defines a labor dispute, for purposes of that Act, as follows: 'The term 'labor dispute' includes any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, regardless of whether or not the disputants stand in the proximate relation of employer and employee.' (Emphasis supplied.)
9
47 Stat. 70, 73; 29 U.S.C. § 113(a), 29 U.S.C.A. § 113(a).
10
See note 8, supra.
11
1959 A.M.C. 340, 350.
12
Unlike the situation in the Benz case, in which American unions to which the foreign seamen did not belong picketed the foreign ship in sympathy with the strike of the foreign seamen aboard, the union members here were not interested in the internal economy of the ship, but rather were interested in preserving job opportunities for themselves in this country. They were picketing on their own behalf, not on behalf of the foreign employees as in Benz. Though the employer here was foreign, the dispute was domestic. For a thoughtful discussion of the impact of foreign employment upon American labor standards, see Afran Transport Co. v. National Maritime Union, D.C., 169 F.Supp. 416, 1959 A.M.C. 326 (holding that the Norris-LaGuardia Act withdrew from Federal District Courts jurisdiction to issue labor injunctions in a labor dispute strikingly like the one here involved). But see Fianza Cia. Nav. S.A. v. Benz, D.C., 178 F.Supp. 243, 1959 A.M.C. 1758, 37 C.C.H. Lab.Cas., 65, 495.
13
Benz v. Compania Naviera Hidalgo, 353 U.S. 138, 142, 77 S.Ct. 699, 702, 1 L.Ed.2d 709. See generally, Comment, The Effect of United States Labor Legislation on the Flag-of-Convenience Fleet: Regulation of Shipboard Labor Relations and Remedies Against Shoreside Picketing, 69 Yale L.J. 498, 516—525, esp. 523 525.
Here respondents do not even claim that foreign ships seeking injunctions can obtain them without complying with the requirement of § 7 of the Norris-LaGuardia Act that the court hold a hearing and make specified findings.
| 67
|
362 U.S. 384
80 S.Ct. 785
4 L.Ed.2d 812
MACKEY, Commissioner of Immigration and Naturalization Service, et al., Appellants,v.Francisco MENDOZA-MARTINEZ.
No. 29.
Argued Dec. 8, 1959.
Decided April 18, 1960.
Mr. Oscar H. Davis, Washington, D.C., for appellants.
Mr. Thomas R. Davis, for respondent.
PER CURIAM.
1
This is a suit by appellee for a declaratory judgment that he is a citizen of the United States. The District Court sustained the contention of the United States that appellee had lost his citizenship by reason of § 401(j)1 of the Nationality Act of 1940, 54 Stat. 1137, as amended, 58 Stat. 746, 8 U.S.C. § 1481(a)(10), 8 U.S.C.A. § 1481(a)(10), and the Court of Appeals affirmed. 9 Cir., 238 F.2d 239. Meanwhile we had decided Trop v. Dulles, 356 U.S. 86, 78 S.Ct. 590, 2 L.Ed.2d 630, and when certiorari was sought here we granted the petition and remanded the cause to the District Court for reconsideration in light of that decision. 356 U.S. 258, 78 S.Ct. 713, 2 L.Ed.2d 757. On remand the District Court held that § 401(j) was unconstitutional. The case is here on direct appeal (28 U.S.C. § 1252, 28 U.S.C.A. § 1252) from the judgment of the District Court holding that appellee is therefore a citizen of the United States. We noted probable jurisdiction. 359 U.S. 933, 79 S.Ct. 648, 3 L.Ed.2d 635.
2
After the case was argued the Court, sua sponte, put to the parties the following questions based on appellee's conviction for draft evasion:2
3
'(1) Was the judgment of conviction of appellee for draft evasion premised in any respect upon his citizenship status after the date of enactment of Section 401(j)?
4
'(2) If so, does the judgment of conviction for any reason foreclose litigation of the appellee's citizenship in the present case?
5
'(3) Are the foregoing questions appropriate for the Court's consideration?'
6
The parties have filed supplemental briefs and from them it appears that the offense charged, and to which appellee pleaded guilty, was departing from the United States November 15, 1942, to evade service in the Armed Forces and remaining away until November 1, 1946. The statute under which he was convicted placed the duty of service on 'every male citizen of the United States, and of every other male person residing in the United States.' 54 Stat. 885, as amended, 55 Stat. 844, 50 U.S.C.App. 303(a) (1940 ed. Supp. I).3
7
Appellee contends that while that Act requires service of aliens residing here, it is inapplicable to nonresident aliens; and that therefore the charge in the indictment that appellee remained away could be applicable only if appellee were a citizen. Indeed the facts stipulated in the present case state that he was a citizen by birth. It follows, appellee argues, that the judgment of conviction for draft violation necessarily included an adjudication of citizenship, and that that judgment brings into play the doctrine of collateral estoppel (Washington, Alexandria & Georgetown Steam Packet Co. v. Sickles, 5 Wall. 580, 18 L.Ed. 550; Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 71 S.Ct. 408, 95 L.Ed. 534) since the conviction of draft evasion was subsequent to September 27, 1944, the date of the enactment of § 401(j). The Solicitor General argues, inter alia, that the issue of citizenship was not necessarily involved in the conviction for draft evasion since a charge of evasion by an alien would be made out even though he had left the country provided the duty to serve had attached when he resided here. The Solicitor General suggests, however, that the avoidance of a constitutional issue when not clearly necessary and the importance of citizenship to the appellee are important factors to be considered in disposing of the case. He is of the view that 'there is so little ground for saying that appellee's citizenship status has already been definitively decided, we believe that this issue should not and need not be canvassed by the Court.' Yet with his customary candor the Solicitor General says, 'But if the Court should be convinced on this record that appellee's citizenship was authoritatively determined in his favor in the 1947 criminal proceeding, we would not oppose a resolution of the case on that basis.'
8
The issue of collateral estoppel is a question that clouds the underlying issue of constitutionality. Since the issue of collateral estoppel may be dispositive of the case, we remand the cause to the District Court with permission to the parties to amend the pleadings, if they so desire, to put in issue the question of collateral estoppel and to obtain an adjudication upon it.
9
It is so ordered.
10
Cause remanded to District Court.
11
Separate memorandum of Mr. Justice FRANKFURTER.
12
The Solicitor General's acquiescence in having this case disposed of by avoiding decision of the important constitutional question concerning the validity of § 401(j) of the Nationality Act of 1940, which is the only one presented by the record, probably reflects an understandable desire on the part of the Government to have this Court adjudicate that issue unembarrassed by an extraneous problem that did not come to the surface until this appeal had been submitted. I do not think that this new matter—a claim of collateral estoppel—should be considered here as though this were a court of first instance. No matter how sympathetic one may be towards liberalization of pleading and informality in judicial proceedings, the intrinsic demands of orderliness in the judicial process require that the issues on which this Court is to render judgment should be appropriately defined through pleadings and proceedings in the lower courts and not be initially shaped for adjudication in this Court. Apart from all else, since taking testimony before this Court has long since ceased to be feasible, we would necessarily have to act on the merits of a claim, based on the rather opaque law of collateral estoppel, resting on documentary submissions not subject to the test of testimonial examination.
13
I am prepared, therefore, to accede to the Solicitor General's suggestion, but to do so by wiping the slate clean. This calls for an appropriate order vacating the proceedings in this Court and in the District Court for the Southern District of California as well as the deportation proceedings which derived from a finding that the appellee has lost his citizenship by reason of § 401(j) of the Nationality Act, a conclusion which is the very issue in controversy. I would do so without summarizing the positions of the parties on the claim of collateral estoppel which is not relevantly before us on this record, and, above all, without any intimation regarding the seriousness of such a claim.
14
Mr. Justice CLARK, whom Mr. Justice HARLAN and Mr. Justice WHITTAKER join, dissenting.
15
This case having now been in the courts for some six years, we think that proper judicial administration would require the Court to decide the question of collateral estoppel, raised belatedly and sua sponte. As we see it, if the Court can raise that issue here, certainly we can decide it without the additional delay of having the parties go through the motions of amending the pleadings, as suggested. The Court could then pass upon the constitutional issue and advise the Congress of its power in this important field, in which it legislated some 16 years ago.
1
Section 401(j) reads as follows:
'A person who is a national of the United States, whether by birth or naturalization, shall lose his nationality by:
'(j) Departing from or remaining outside of the jurisdiction of the United States in time of war or during a period declared by the President to be a period of national emergency for the purpose of evading or avoiding training and service in the land or naval forces of the United States.'
2
The facts stipulated in the present case and relevant to that conviction are:
'III. Plaintiff was born in the United States on March 3, 1922, and thus was a citizen of the United States at birth.
'IV. Under the laws of Mexico plaintiff is now, and ever since his birth has been, a citizen and national of the Republic of Mexico.
'V. During 1942 plaintiff departed from the United States and went to Mexico for the sole purpose of evading and avoiding training and service in the Armed Forces of the United States.
'VI. Plaintiff remained in Mexico continuously from sometime during 1942 until on or about November 1, 1946 for the sole purpose of evading and avoiding training and service in the Armed Forces of the United States.
'VII. On June 23, 1947, plaintiff upon his plea of guilty was convicted in the United States District Court for the Southern District of California for violation of Section 11 of the Selective Service and Training Act of 1940. He was sentenced to imprisonment for a period of one year and one day.'
3
Now 50 U.S.C.A.Appendix, § 454.
| 12
|
362 U.S. 411
80 S.Ct. 822
4 L.Ed.2d 832
LOCAL LODGE NO. 1424, etc., et al., Petitioners,v.NATIONAL LABOR RELATIONS BOARD.
No. 44.
Argued Jan. 11, 1960.
Decided April 25, 1960.
Mr. Bernard Dunau, Washington, D.C., for petitioners.
Mr. Norton Come, Washington, D.C., for respondent.
Mr. Justice HARLAN delivered the opinion of the Court.
1
The question we decide in this case is whether unfair labor practice complaints, whose charges against the petitioners were sustained by the National Labor Relations Board, were barred by the six-month statute of limitations contained in § 10(b) of the National Labor Relations Act, as amended, 61 Stat. 146, 29 U.S.C. § 160(b), 29 U.S.C.A. § 160(b). That section reads in pertinent part:
2
'Provided * * * no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made * * *.'
3
On August 10, 1954, petitioners Bryan Manufacturing Company and the International Association of Machinists, AFL, entered into a collective bargaining agreement for a unit of Bryan's employees. The agreement, as later supplemented in certain respects not material to this litigation, contained the conventional provisions, of which two are relevant here: the 'recognition' clause, by which the Union was recognized as 'the sole and excusive bargaining agency for all employees' in the unit; and the 'union security' clause, by which all employees were required, subject to a 45-day grace period, to become and remain members of the Union. On August 30, 1955, a new agreement was entered into, with Bryan, the Union, and petitioner Local Lodge No. 1424, IAM, as signatories, replacing the old agreement and applying additionally to employees at a newly opened plant as well as to those covered by the original agreement.
4
When the original agreement was executed on August 10, 1954, the Union did not represent a majority of the employees covered by it.1 Under §§ 7 and 8 of the Act2 the Board has evolved the principle, not drawn in question here, that it is an unfair labor practice for an employer and a labor organization to enter into a collective bargaining agreement which contains a union security clause, if at the time of original execution the union does not represent a majority of the employees in the unit.3 The maintaining of such an agreement in force is a continuing violation of the Act, and the 'majority status' of the union at any subsequent date—including the date of execution of any renewals of the original agreement—is immaterial, for it is presumed that subsequent acquisition of a majority status is attributable to the earlier unlawful assistance received from the original agreement.4
5
In June and August 1955, 10 months and 12 months after the execution of the original agreement, charges were filed with the Board and served upon the petitioners, alleging the Union's lack of majority status at the time of execution and the consequent illegality of the continued enforcement of the agreement. Complaints were thereafter issued by the Board's General Counsel against the Union and the Company. Petitioners contended before the Board that the complaints were barred by the limitations proviso of § 10(b), set forth above. The Board, two members dissenting, held that the complaints were not barred by limitations, 119 N.L.R.B. 502, and the Court of Appeals affirmed, one judge dissenting. 105 U.S.App.D.C. 102, 264 F.2d 575. We granted certiorari, 360 U.S. 916, 79 S.Ct. 1432, 3 L.Ed.2d 1532, because of the importance of the question in the proper administration of the National Labor Relations Act. For reasons given in this opinion we hold that the complaints against these petitioners are barred by time.5
6
We first note the opposing contentions of the parties. The Board starts with the premise that a collective bargaining agreement which contains a union security clause valid on its face, but which was entered into when the Union did not have a majority status, gives rise to two independent unfair labor practices, one being the execution of the agreement, the other arising from its continued enforcement. Conceding that a complaint predicated on the execution of the agreement here challenged was barred by limitations, the Board contends that its complaint was nonetheless timely since it was 'based upon' the parties' continued enforcement, within the period of limitations, of the union security clause. It is then said that even though the former was itself time-barred, the unlawful execution of the agreement was nevertheless 'relevant in determining whether conduct within the 6-month period was unlawful,' 119 N.L.R.B., at 504; and that evidence as to it was admissible because § 10(b) is a statute of limitations, and not a rule of evidence.
7
On the other hand, petitioners contend that, standing alone, the union security clause and its enforcement were wholly innocent; that they were tainted only by virtue of the original unlawful execution of the agreement; and that since a complaint based upon that unfair labor practice was barred by limitations, that event itself could not be utilized to infuse with illegality the otherwise legal union security clause or its enforcement. They say, in short, that to apply in this situation the doctrine that § 10(b) is a statute of limitations, and not a rule of evidence, is to circumvent the purposes of the section, and that acceptance of the Board's position would mean that the statute of limitations would never run in a case of this kind. We think petitioners' position represents the correct view of the matter.
8
It is doubtless true that § 10(b) does not prevent all use of evidence relating to events transpiring more than six months before the filing and service of an unfair labor practice charge. However, in applying rules of evidence as to the admissibility of past events, due regard for the purposes of § 10(b) requires that two different kinds of situations be distinguished. The first is one where occurrences within the six-month limitations period in and of themselves may constitute, as a substantive matter, unfair labor practices. There, earlier events may be utilized to shed light on the true character of matters occurring within the limitations period; and for that purpose § 10(b) ordinarily does not bar such evidentiary use of anterior events.6 The second situation is that where conduct occurring within the limitations period can be charged to be an unfair labor practice only through reliance on an earlier unfair labor practice. There the use of the earlier unfair labor practice is not merely 'evidentiary,' since it does not simply lay bare a putative current unfair labor practice. Rather, it serves to cloak with illegality that which was otherwise lawful. And where a complaint based upon that earlier event is time-barred, to permit the event itself to be so used in effect results in reviving a legally defunct unfair labor practice.
9
The situation before us is of this latter variety, for the entire foundation of the unfair labor practice charged was the Union's time-barred lack of majority status when the original collective bargaining agreement was signed. In the absence of that fact enforcement of this otherwise valid union security clause was wholly benign.7 The Trial Examiner, whose findings were adopted by the Board, observed:
10
'The General Counsel concedes that the 6-month limitation of Section 10(b) of the Act precludes currently finding the execution8 of the 1954 agreement to be an unfair labor practice, and also precludes currently finding its enforcement to be an unfair labor practice * * * at any time prior to the * * * periods beginning 6 months prior to the * * * charges * * *. However, this concession in no way detracts from the crucial nature of the earlier events, because at the core of the General Counsel's contentions as to all of the unfair labor practices is his fundamental position that, because of the circumstances prevailing when made, the original union-security agreement of 1954 has never been valid or legal, since it has never met certain overriding requirements of Section 8(a)(3) of the Act.' 119 N.L.R.B., at 530. (Emphasis added, except as indicated.)9
11
Where, as here, a collective bargaining agreement and its enforcement are both perfectly lawful on the face of things, and an unfair labor practice cannot be made out except by reliance on the fact of the agreement's original unlawful execution, an event which, because of limitations, cannot itself be made the subject of an unfair labor practice complaint, we think that permitting resort to the principle that § 10(b) is not a rule of evidence, in order to convert what is otherwise legal into something illegal, would vitiate the policies underlying that section. These policies are to bar litigation over past events 'after records have been destroyed, witnesses have gone elsewhere, and recollections of the events in question have become dim and confused,' H.R.Rep.No. 245, 80th Cong., 1st Sess., p. 40,10 and of course to stabilize existing bargaining relationships.
12
Our view of the matter is lent support by the attitude of the Board itself, whose previous decisions, albeit not always with unanimity among its members or even perhaps with perfect consistency, have recognized that evidentiary rules as to past events must be regarded differently in the two situations we have already depicted. Compare, e.g., Potlatch Forests, Inc., 87 N.L.R.B. 1193, where evidence as to events during the barred period was used to illuminate current conduct claimed in itself to be an unfair labor practice,11 with Bowen Products Corp., 113 N.L.R.B. 731, and Greenville Cotton Oil Co., 92 N.L.R.B. 1033, affirmed sub nom. American Federation of Grain Millers, A.F.L. v. National Labor Relations Board, 5 Cir., 197 F.2d 451, where the gravamen of the unfair labor practice complained of lay in a fact or event occurring during the barred period.12
13
Indeed, some Board cases have gone even further and held § 10(b) a bar in circumstances when, although none of the material elements of the charge in a timely complaint need necessarily be proved through reference to the barred period—so that utilization of evidence from that period is ostensibly only for the purpose of giving color to what is involved in the complaint—yet the evidence in fact marshalled from within the six-month period is not substantial, and the merit of the allegations in the complaint is shown largely by reliance on the earlier events. See, e.g., News Printing Co., 116 N.L.R.B. 210, 212; Universal Oil Products Co., 108 N.L.R.B. 68; Tennessee Knitting Mills, Inc., 88 N.L.R.B. 1103.13 However, we express no view on the problem raised by such cases, for here we need not go beyond saying that a finding of violation which is inescapably grounded on events predating the limitations period is directly at odds with the purposes of the § 10(b) proviso.14
14
The applicability of these principles cannot be avoided here by invoking the doctrine of continuing violation. It may be conceded that the continued enforcement, as well as the execution, of this collective bargaining agreement constitutes an unfair labor practice, and that these are two logically separate violations, independent in the sense that they can be described in discrete terms. Nevertheless, the vice in the enforcement of this agreement is manifestly not independent of the legality of its execution, as would be the case, for example, with an agreement invalid on its face or with one validly executed, but unlawfully administered. As the dissenting Board members in this case recognized, in dealing with an agreement claimed to be void by reason of the union's lack of majority status at the time of its execution,
15
'* * * the circumstances which cause the agreement to be invalid existed only at the point in time in the past when the agreement was executed and are not thereafter repeated. For this reason, therefore, the continuing invalidity of the agreement is directly related to and is based solely on its initial invalidity, and has no continuing independent basis.' 119 N.L.R.B., at 516.
16
In any real sense, then, the complaints in this case are 'based upon' the unlawful execution of the agreement, for its enforcement, though continuing, is a continuing violation solely by reason of circumstances existing only at the date of execution. To justify reliance on those circumstances on the ground that the maintenance in effect of the agreement is a continuing violation is to support a lifting of the limitations bar by a characterization which becomes apt only when that bar has already been lifted. Put another way, if the § 10(b) proviso is to be given effect, the enforcement, as distinguished from the execution, of such an agreement as this constitutes a suable unfair labor practice only for six months following the making of the agreement.15
17
The Board's ruling is further sought to be supported on the ground that it did not rest on a formal finding that the execution of the 1954 agreement constituted an unfair labor practice. The Court of Appeals, while stating that the Board could not draw 'any legal conclusion with regard to events outside the statutory period,' distinguished the decision here as resting on the 'mere existence (of the facts surrounding the making of the 1954 contract) rather than on ascribing legal significance to those facts standing alone.' 105 U.S.App.D.C. at page 108, 264 F.2d at page 581 (emphasis by the court). This distinction sacrifices the policy of the Act to procedural formalities. If, as is not disputable, the § 10(b) limitation was prompted by 'complaint that people were being brought to book upon stale charges,' National Labor Relations Board v. Pennwoven, Inc., 3 Cir., 194 F.2d 521, 524, it is a particular use of the prelimitations facts or conduct at which the section is aimed, and it can hardly be thought relevant that the proscribed use has not been labeled as such. The applicability of the policy of § 10(b) in the Grain Millers case, supra, where in the particular circumstances of that case, and not because of anything arising from § 10(b), the challenged acts within the limitations period could not be condemned as unlawful without an express declaration that earlier conduct constituted an unfair labor practice (see note 12, ante), was not greater than it is here, where although there was no 'finding' that execution of the agreement constituted an unfair labor practice, it is manifest that were that not in fact the case enforcement of the agreement would carry no taint of illegality. The availability of the repose sought to be assured by § 10(b) cannot turn on the vagaries of any such hypertechnical distinctions, bearing no relation to the purpose of the legislation.
18
It is apparently not disputed that the Board's position would withdraw virtually all limitations protection from collective bargaining agreements attacked on the ground asserted here. For, once the principle on which the decision below rests is accepted, so long as the contract—or any renewal thereof—is still in effect, the six-month period does not even begin to run. Cf. Bowen Products Corp., supra, at 732. In Lively Photos, Inc., 123 N.L.R.B. 1054, the Board unhesitatingly applied the doctrine of the case at bar to an attack upon an agreement executed more than three and one-half years prior to the filing of the charge. The cease-and-desist order entered in that case directed the severance of a bargaining relationship which had been initiated five years earlier. A doctrine which does such disservice to stability of bargaining relationships could be upheld, in light of the language and evident purpose of § 10(b), only by a convincing showing that Congress did not intend that provision to be applied so as to bar attacks on collective agreements with unions lacking majority status unless brought within six months of their execution. Far from providing such a showing, the legislative history contains affirmative evidence that Congress was specifically advertent to the problem of agreements with minority unions, had previously been at pains to protect such agreements from belated attack, and manifested an intention, in enacting § 10(b), not to withdraw that protection.
19
Four years prior to the enactment of the Taft-Hartley amendments, of which the § 10(b) limitations proviso was one, Congress barred the Board from proceeding, under certain conditions not here relevant, in cases 'arising over an agreement between management and labor which has been in existence for three months or longer without complaint being filed.' National Labor Relations Board Appropriation Act, 1944, 57 Stat. 515. This legislation was enacted with specific reference to agreements with minority unions,16 and was re-enacted in each succeeding session through 1947.17 At the time the Senate Committee on Labor and Public Welfare reported S. 1126 (the Senate version of the proposed legislation enacted as the Labor Management Relations Act, 1947), a rider to the appropriations bill for the fiscal year 1948 (H.R. 2700, 80th Cong., 1st Sess.) was pending before the Senate Appropriations Committee, having been previously reported by the House Appropriations Committee in language identical with that of its predecessors. The Labor Committee's discussion of the proposed § 10(b) amendment is illuminating:
20
'The principal substantive change in this section is a provision for a 6-month period of limitations upon the filing of charges. The Board itself by adopting a doctrine of laches has to some extent discouraged dilatory filing of charges, and a rider to the current appropriations bill (which if this amendment was adopted would no longer be necessary) contains a 3-month period of limitations with respect to certain kinds of unfair labor practices.' S.Rep.No.105, 80th Cong. 1st Sess., p. 26. (Emphasis added.)
21
This language cannot be squared with an interpretation of § 10(b) which would ascribe to Congress, in enacting for the first time a general limitations provision, a purpose to eliminate the then-existing all-embracing limitation specifically applicable to agreements with minority unions.18
22
In sustaining the Board's position, the Court of Appeals also relied on the public character of the right sought to be vindicated by the Board, and the limited scope of judicial review of Board determinations. Observing that 'in interpreting, applying and administering a statute of limitations prescribed by Congress in this context (the field of labor relations), the Board—and the courts—are not confronted by precisely the same considerations as apply to statutes of limitations affecting the private rights of two individual litigants,' the Court reasoned that '(t)he Board may have thought that the interests of (employee) self determination outweighed otherwise important competing considerations of burying stale disputes.' 105 U.S.App.D.C. at pages 108—109, 264 F.2d, at pages 581—582. We think this analysis inadmissible here, for the reason that the accommodation between these competing factors has already been made by Congress. It is a commonplace, but one too easily lost sight of, that labor legislation traditionally entails the adjustment and compromise of competing interests which in the abstract or from a purely partisan point of view may seem irreconcilable. The 'police of the Act' is embodied in the totality of that adjustment, and not necessarily in any single demand which may have figured, however weightily, in it. Cf. note 7, ante. It may be asserted, without fear of contradiction, that the interest in employee freedom of choice is one of those given large recognition by the Act as amended. But neither can one disregard the interest in 'industrial peace which it is the overall purpose of the Act to secure.' National Labor Relations Board v. Childs Co., 2 Cir., 195 F.2d 617, 621—622 (concurring opinion of L. Hand, J.). Cf. Colgate-Palmolive Peet Co. v. National Labor Relations Board, 338 U.S. 355, 362—363, 70 S.Ct. 166, 170, 94 L.Ed. 161. As expositor of the national interest, Congress, in the judgment that a six-month limitations period did 'not seem unreasonable,' H.R.Rep.No. 245, 80th Cong., 1st Sess., p. 40, barred the Board from dealing with past conduct after that period had run, even at the expense of the vindication of statutory rights.19 'It is not necessary for us to justify the policy of Congress. It is enough that we find it in the statute. That policy cannot be defeated by the Board's policy * * *.' Colgate-Palmolive Peet Co. v. National Labor Relations Board, supra, 338 U.S. at page 363, 70 S.Ct. at page 171. Cf. Southern S.S. Co. v. National Labor Relations Board, 316 U.S. 31, 47, 62 S.Ct. 886, 894, 86 L.Ed. 1246.
23
Reversed.
24
Mr. Justice FRANKFURTER, dissenting.
25
While agreeing with my Brother WHITTAKER'S grounds for dissenting, I should like to add confirming considerations for his conclusion. At a time when the union did not represent a majority of employees, union and employer entered into a collective bargaining agreement, containing a 'union security' clause compelling all employees to become members of the union. Under principles accepted by the Court, this constituted an 'unfair labor practice,' for it tended 'to restrain or coerce employees' in the exercise of their right 'to bargain collectively through representatives of their own choosing.' Union and employer continued to carry out the terms of this illicit agreement. Specifically, the union purported to act as an authorized bargaining agent, union dues were collected through a 'check-off' by th employer, and employees were compelled to become members of the union within forty-five days. The Court's opinion recognizes that all this constituted continuing interference with the employees' free choice and was therefore a continuing unfair labor practice.
26
Ten months after the collective agreement was first entered into, but while its terms continued to be actively carried out, an unfair labor practice charge against the union and employer was filed with the Board. Plainly, the continuing unfair labor practice of maintaining the collective agreement illegally entered into did occur within six months of the filing of the charge. The Court accepts this as true. But the Court holds that a charge based upon that continuing unfair practice is time-barred.
27
The applicable statute of limitations provides: 'no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board.' The Court relies on the fact that the active carrying out of the agreement, concededly an unfair practice occurring within six months, is revealed as unlawful only by reason of the unlawful character of the agreement at its inception, specifically, the fact that the union did not represent a majority of employees at that time. The Court concludes that the action is barred because the inception of the unlawful agreement was outside of the statutory period.
28
Such an interpretation, I respectfully submit, is not to enforce congressional legislation, which is our task, but is to fashion linguistic legislation and then apply it. Instead of barring only those complaints 'based upon any unfair labor practice occurring more than six months prior to the filing of the charge,' the statute is made to read 'based upon any unfair labor practice having had its inception more than six months prior to the filing of the charge.' Thus the complaint is held barred, even though an unfair practice did occur, with due regard to the thought conveyed by that word. That is, we have here not mere inert continuity of consequences through antecedent action; events were brought to pass through conscious human intervention within six months of the filing of the charge.
29
I see no justification for such rewriting of what Congress wrote. The legislative history recited by the Court makes no such demand. Congress no doubt wanted to put stale claims to rest, and it did so by a relatively short statute of limitations for permitting claims to be brought to litigation. If six months are allowed to pass by without a charge against an unfair labor practice being filed, Congress said that is an end of the matter, and a charge cannot be filed thereafter. But Congress did not say that if a charge is filed within six months of the occurrence of an unfair practice, that cannot be halted, that cannot be proceeded against, if such labor practice had its inception more than six months before. On the contrary, what I deem a controlling analogy leads me to apply the statute as I find it, and to bar complaints only when based upon active occurrences not falling within the six-month period. I find that analogy in the treatment of the same kind of problem in cases where a conspiracy is entered into before a statutory period but is actively kept alive within that period.
30
The essence of the unfair labor practice involved in this case is the making and maintaining of an illegal agreement between upon and employee. Suppose that Congress, having defined such an agreement to be an unfair labor practice, had subjected it not only to civil remedies but had also made it a misdemeanor. That is by no means a fanciful supposition. The federal antitrust statutes are a prominent instance of the use of the criminal law, and in particular the law of conspiracy, as part of a scheme of industrial regulation. Suppose a six-month statutory limitations period for the criminal charge, as we now have for the civil, and suppose the very facts of this case. Specifically, suppose it had been charged that during the prior six months, by maintaining their collective agreement, entered into when the union did not represent a majority of employees, the union and employer had conspired to deprive employees of their rights freely to choose bargaining representatives, and that during those six months overt acts had been committed in pursuance of the unlawful agreement.
31
To find a cognate statute of limitations to be a bar to such a case would be to ignore the applicable precedents. The rules set out by this Court for applying statutes of limitations to conspiracy cases are clearly otherwise. See United States v. Kissel, 218 U.S. 601, 31 S.Ct. 124, 54 L.Ed. 1168; Hyde v. United States, 225 U.S. 347, 367—370, 32 S.Ct. 793, 802—803, 56 L.Ed. 1114; Brown v. Elliott, 225 U.S. 392, 400—401, 32 S.Ct. 812, 815, 56 L.Ed. 1136; Fiswick v. United States, 329 U.S. 211, 216, 67 S.Ct. 224, 227, 91 L.Ed. 196; Grunewald v. United States, 353 U.S. 391, 396—397, 77 S.Ct. 963, 969—970, 1 L.Ed.2d 931. 'The statute of limitations, unless suspended, runs from the last overt act during the existence of the conspiracy.' Fiswick v. United States, supra, 329 U.S. at page 216, 67 S.Ct. at page 227. And these cases show that this principle applies even when, as here, the overt acts within the statutory period derive their illegal significance only when interpreted in light of an illegal agreement which was initiated prior to the statutory period for bringing a charge. Certainly, the illegalities committed within the six-months period in this case, to the same degree as overt acts in pursuance of a conspiracy already formed, represent 'a renewed affirmation of the unlawful purpose,' expressed in an agreement which Congress has outlawed as an unfair labor practice. A conspiracy is kept alive by an overt act within the period of the statute of limitations not by reason of some dogmatic postulate relevant to conspiracies, but as a result of judicial reasoning in applying statutes of limitations. This reasoning is equally applicable to the matter in hand.
32
I am baffled to understand why the present case should be different from what it would be were it a prosecution for criminal conspiracy, rather than a civil proceeding based on an agreement giving rise to an unfair labor practice.
33
Mr. Justice WHITTAKER, with whom Mr. Justice FRANKFURTER joins, dissenting.
34
The Court correctly recognizes (1) that it is violative of employees' rights guaranteed by § 7, and an unfair labor practice by an employer under § 8(a) and by a labor union under § 8(b), of the National Labor Relations Act, for an employer and a labor union to enter into a contract providing either for the recognition by the employer of the union as the representative of its employees or that its employees must become and remain members of the union, unless the union, at that time, represented a majority of the employees in the unit, (2) that 'The maintaining of such an agreement in force is a continuing violation of the Act,' and (3) that the bargaining contract involved in this case not only recognized the union as the exclusive bargaining representative of the employees, but also required the employees to become and remain members of the union, although the union did not then represent a majority of the employees in the unit.*
35
Despite the foregoing, the Court holds, I think, with deference, quite inconsistently and erroneously, that § 10(b) of the Act barred the issuance of a complaint, upon an employee's charge filed with and served by the Board 10 months after the making of the contract, based not upon the making of the contract, but alleging that, within and throughout the period of six months preceding the filing and service of the charge, the employer and the union required the employees to become and remain members of the union, and, once in each of those six months, caused certain sums to be deducted from the employees' wages and paid over to the union, all without the authorization of the employees.
36
The Court, noting the employer-union contention that the contract was 'tainted' only by its 'unlawful execution,' and that 'since a complaint based upon that unfair labor practice (would be) barred' by § 10(b), that event could not be utilized 'to infuse with illegality the otherwise legal union security clause or its enforcement,' adopts that argument as presenting the 'correct view.' (Emphasis added.)
37
Surely the fact that a prosecution for the making of a 'tainted' contract is barred by limitations does not 'infuse' the 'tainted' contract with legality. Moreover, I respectfully submit that the complaint here was not based upon the 'tainted' contract, and that its unlawful execution was not utilized 'to infuse (the always illegal contract) with illegality.' Rather, the complaint here was based upon and limited to independent acts of the employer and the union, committed within six months preceding the filing and service of the charge, that deprived the employees of rights guaranteed to them by § 7, resulting in unfair labor practices under § 8; and the fact that prosecution for the illegal execution of the 'tainted' contract is time-barred, as an independent wrong, may not be utilized 'to infuse with' legality the illegal 'union security clause or its enforcement.'
38
It is important carefully to note what it is that § 10(b) bars. It says, in relevant part, that 'no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge * * *.' (Emphasis added.) The bar is, then, against the issuance of a 'complaint' that is 'based upon' acts 'occurring more' than six months prior to the filing of the charge. In the plainest possible sense, then, it does not bar the issuance of a complaint based upon acts occurring within six months of the filing of the charge. The complaint that was issued here was based upon acts occurring within six months of the filing of the charge. And the Board rested its decision solely on those acts.
39
But the Court holds that, although § 10(b) is only a statute of limitations, evidence of the illegality of the contract is inadmissible, in the circumstances of this case, because it would serve 'to cloak with illegality that which was otherwise lawful,' and would permit a time-barred event 'to be so used (as to revive) a legally defunct unfair labor practice.' This conclusion gives hip rather than heed to the conceded rule that 'the maintaining of such an agreement in force is a continuing violation of the Act,' for it makes incompetent all relevant evidence that may be adduced to prove the 'continuing violation.' Moreover, such a rule is contrary to the decisions of this Court and to every decision of the Court of Appeals upon the point to which our attention has been directed.
40
In Federal Trade Comm. v. Cement Institute, 333 U.S. 683, 68 S.Ct. 793, 92 L.Ed. 1010, this Court held it to be:
41
'well within the established judicial rule of evidence that testimony of prior or subsequent transactions, which for some reason are barred from forming the basis for a suit, may nevertheless be introduced if it tends reasonably to show the purpose and character of the particular transactions under scrutiny. Standard Oil Co. v. United States, 221 U.S. 1, 46 47, 31 S.Ct. 502, 510—518, 55 L.Ed. 619; United States v. Reading Co., 253 U.S. 26, 43, 44, 40 S.Ct. 425, 427, 428, 64 L.Ed. 760.' 333 U.S. at page 705, 68 S.Ct. at page 805.
42
To the same effect, but directly dealing with unfair labor practices, are Paramount Cap Mfg. Co. v. National Labor Relations Board, 8 Cir., 260 F.2d 109, 112—113; National Labor Relations Board v. Gaynor News Co., 2 Cir., 197 F.2d 719, 722, affirmed sub nom., Radio Officers v. National Labor Relations Board, 347 U.S. 17, 74 S.Ct. 323, 98 L.Ed. 455; Katz v. National Labor Relations Board, 9 Cir., 196 F.2d 411, 415; National Labor Relations Board v. General Shoe Corp., 6 Cir., 192 F.2d 504, 507; National Labor Relations Board v. Clausen, 3 Cir., 188 F.2d 439, 443; Superior Engraving Co., v. National Labor Relations Board, 7 Cir., 183 F.2d 783, 791.
43
In the Katz case, almost identical with this one on the point in issue, the Court specifically rejected the contention that, inasmuch as more than six months had expired from the date of the execution of the tainted contract, the complaint, based upon acts occurring within six months of the charge, was barred by § 10(b), saying:
44
'While * * * the mere execution of the agreement on December 17, 1948, constituted an unfair labor practice, there is no doubt but that the continuous enforcement of the agreement thereafter within the six months period prior to the filing of the charge, was an unfair labor practice, and with respect to this continued and continuous enforcement of the illegal union shop agreement, the prosecution of the proceeding was not barred by limitations.' 196 F.2d at page 415.
45
In the Gaynor case, the Court, after pointing out that although the tainted contract had been executed more than six months prior to the filing of the charge, and its execution was therefore barred as an independent subject of punishment by § 10(b), observed that enforcement of the contract was 'a continuing offense,' and held that the complaint, based only on acts occurring within six months of the filing of the charge, was lawfully issued and 'in all respects valid.' 197 F.2d at page 722.
46
Although still recognizing that enforcement of a tainted labor contract 'is a continuing violation' of the law, the Court further says that this is true 'solely by reason of circumstances existing only at the date of execution'; and it therefore concludes that evidence of the taint is inadmissible in a proceeding to punish unlawful conduct occurring from enforcement of the contract within six months of the filing of a charge. I respectfully submit it is plain that this reasoning negates the conceded rule that enforcement of a tainted contract is 'a continuing offense.' The Court's reasoning, inconsistently, would at once both recognize, and deny any means of proving, the 'continuing offense.'
47
Analytical curiosity provokes the query whether such an illegal contract, openly posted in the plant but not made effective in practice until the first day of the seventh month, would then become so 'infused' with legality as to be unassailable by the employees—not because its enforcement is not 'a continuing offense,' but, rather, because, under the Court's rule, there can be no competent evidence of its illegality. If so, the rule of 'continuing offense' is utterly destroyed. If not, the Court's rule that there can be no competent evidence of the continuing violation must give way. The two theories are diametrically opposed and self-destructive. Section 10(b) does not at all deal with the competency or admissibility of evidence. Surely, as the cited cases hold, any evidence which shows that continuing enforcement of the contract is or is not an offense under the Act is competent under the law.
48
But there is even a more fundamental consideration which, for me, settles this issue beyond all controversy. While it is the burden of the General Counsel of the Board to prove his case, all he need do, initially at least, is to make a prima facie case. He may do this, in a case like the present, simply by putting on evidence showing that the employer and the union, within six months preceding the filing of the charge, required the employees to become and remain members of the union and to submit to deduction of dues from their wages without asking them for authorization and without any election, or Board certification of the union. That evidence alone would raise prima facie the issue: By what right was this done? That issue would call for a defense, and the burden of producing the defense would necessarily fall upon the employer and the union. Surely it will not be said that anything in § 10(b), or elsewhere in the law, makes incompetent all evidence that might be adduced by the employer and the union to meet their burden and justify their action. If, as I submit cannot be denied, such evidence is competent when offered by the employer and the union, it must likewise be competent when, if he so elects, it is offered by the General Counsel of the Board. Here, at the very least, the General Counsel made a prima facie case of continuing violations of the law within the six months preceding the filing of the charge, the employer and the union made no effort to show the legality of their conduct in the period complained of.
49
The Court attributes to its rule the virtues of quieting 'stale claims' and of 'stabiliz(ing) existing bargaining relationships.' I cannot agree that it would do either, for employee rights, occurring within six months of the filing of the charge, are not 'stale claims,' and deprivation of those rights which, as the Court of Appeals said, 'rankles at least once a month in the mind of (the employees) offended,' is not conducive to industrial peace and would not—certainly not legally—'stabilize existing bargaining relationships.' At all events, and however this may be, these matters were for Congress; and the cardinal purposes of the National Labor Relations Act, contained in § 7, were to guarantee to employees the right to join or assist labor organizations 'of their own choosing' or to refrain from such activities. Surely, the continuing offense of enforcing a contract, made by an employer with a union which was not of the employees' 'own choosing,' was not intended by Congress to be left without a remedy. Congress did not intend to create and 'to hold out to (employees) an illusory right for which it was denying them a remedy.' Graham v. Brotherhood of Locomotive Firemen, 338 U.S. 232, 240, 70 S.Ct. 14, 18, 94 L.Ed. 22. Certainly, 'any limitation on the employees' right(s) (under) §§ 7 and 8 * * * must be more explicit and clear than it is here in order to restrict them at the very time they may be most needed.' Mastro Plastics Corp. v. National Labor Relations Board, 350 U.S. 270, 287, 76 S.Ct. 349, 360, 100 L.Ed. 309. See also National Labor Relations Board v. Lion Oil Co., 352 U.S. 282, 289, 77 S.Ct. 330, 334, 1 L.Ed.2d 331.
50
Believing that the Board and the Court of Appeals correctly decided this case, I would affirm the judgment.
1
It was so found by the Board, and petitioners have not challenged that finding.
2
Section 7 (61 Stat. 140, 29 U.S.C. § 157, 29 U.S.C.A. § 157) provides:
'Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through repre-
sentatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3).'
Section 8 (61 Stat. 140, as amended, 29 U.S.C. § 158, 29 U.S.C.A. § 158) provides:
'(a) It shall be an unfair labor practice for an employer—
'(1) to interfere with restrain, or coerce employees in the exercise of the rights guaranteed in section 7;
'(2) to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it: * * *
'(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization: Provided, That nothing in this Act, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization (not established, maintained, or assisted by any action defined in section 8(a) of this Act as an unfair labor practice) to require as a condition of employment membership therein on or after the thirtieth day following the beginning of such employment or the effective date of such agreement, whichever is the later, * * * if such labor organization is the representative of the employees as provided in section 9(a), in the appropriate collective-bargaining unit covered by such agreement when made; * * *
'(b) It shall be an unfair labor practice for a labor organization or its agents—
'(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in section 7: * * *
'(2) to cause or attempt to cause an employer to discriminate against an employee in violation of subsection (a)(3) * * *.'
3
The same doctrine is applied to an agreement containing only a 'recognition' clause making a union the exclusive bargaining agent for all employees in the unit covered by the agreement. See Bernhard-Altmann Texas Corp., 122 N.L.R.B. 1289; Charles W. Carter Co., 115 N.L.R.B. 251, 262; International Metal Products Co., 104 N.L.R.B. 1076; John B. Shriver Co., 103 N.L.R.B. 23, 38; and see the Trial Examiner's discussion in the present case, 119 N.L.R.B. 502, 555, n. 98. The agreement now in question contained both a union security and a recognition clause, but for convenience we shall deal with the matter in terms of the union security clause alone.
4
See 119 N.L.R.B., at 546, 548.
5
The petition for certiorari also raised an issue as to the propriety of the relief ordered by the Board. Because of our view of the case it becomes unnecessary to reach that question.
6
The most frequently cited Board expression of this principle is that found in Axelson Mfg. Co., 88 N.L.R.B. 761, 766:
'As I interpret the statute however, Section 10(b) enacts a statute of limitations and not a rule of evidence. It forbids the issuance of complaints and, consequently, findings of violation of the statute in conduct not within the 6 months' period. But it does not, as I construe it, forbid the introduction of relevant evidence bearing on the issue as to whether a violation has occurred during the 6 months' period. Events obscure, ambiguous, or even meaningless when viewed in isolation may, like the component parts of an equation, become clear, definitive, and informative when considered in relation to other action. Conduct, like language, takes its meaning from the circumstances in which it occurs. Congress can scarcely have intended that the Board, in the performance of its duty to decide the validity of conduct within the 6 months' period, should ignore reliable, probative, and substantial evidence as to the meaning and the nature of the conduct. Had such been the intent, it seems reasonable to assume that it would have been stated.'
The Board, however, has developed certain limits on the applicability of this principle. See 362 U.S. 421, 80 S.Ct. 829, and note 13.
7
It was the view of one member of the Board majority that a presumption of illegality should attend the enforcement of a union security clause, so that sufficient proof of violation results merely from a showing that such a clause is operative, thus putting on the parties to the agreement the burden to defend by proving compliance with the requirements of the proviso to § 8(a)(3) of the Act, 61 Stat. 140, as amended, 29 U.S.C. § 158(a)(3), 29 U.S.C.A. § 158(a)(3), see note 2, ante, including majority status at the time of execution. 119 N.L.R.B., at 510. While acceptance of this view would concededly support the result reached below, it was not adopted by the Board, as the concurring member acknowledged. Id., at 511. We too reject it. It rests on the mistaken judgment that the proviso to § 8(a)(3) permits the inclusion of union security provisions 'in derogation of the rights guaranteed employees in the definitive statement of national police contained in Section 7,' id., at 510, and on the principle that, exoneration of certain types of union security clauses having been granted in a proviso, the burden of proving the proviso's applicability rests on him asserting it. The latter principle need not detain us; insights derived from syntactical analysis form a hazardous basis for the explication of major legislative enactments. As to the argument drawn from § 7, it would be enough to note that that very provision is in terms limited by the scope of the § 8(a)(3) proviso. (See note 2, ante.) More to the heart of the matter, it is the entire Act, and not merely one portion of it, which embodies 'the definitive statement of national policy.' It is well known, and the legislative history of the 1947 Taft-Hartley amendments plainly shows, that § 8(a)(3) including its proviso—represented the Congressional response to the competing demands of employee freedom of choice and union security. Had Congress thought one or the other overriding, it would doubtless have found words adequate to express that judgment. It did not do so; it accommodated both interests, doubtless in a manner unsatisfactory to the extreme partisans of each, by drawing a line it thought reasonable. It is not for the administrators of the Congressional mandate to approach either side of that line grudgingly.
8
Emphasis here by the Trial Examiner.
9
These observations were accepted both by the Board and the Court of Appeals. 119 N.L.R.B., at 503—504; 105 U.S.App.D.C. at page 106, 264 F.2d, at 579. See also Lively Photos, Inc., 123 N.L.R.B. 1054.
10
The Examiner's Report shows the pertinency of this statutory purpose in the present case. In his analysis of the evidence, he observed:
'It is evident that with many witnesses testifying as to numerous different matters, it would protract this report greatly to summarize all of the testimony, or to spell out fully the confusion and inconsistencies therein, much of which is not too surprising, in view of the fact that with respect to the events of August 1954 (the events 'at the core' of the allegations of illegality), there had been a lapse of almost 15 months before testimony was given in November 1955.' 119 N.L.R.B., at 529.
11
In that case, in explaining his consideration of 'relevant evidence' antedating the six-month period, the Trial Examiner, whose report was confirmed by the Board, said: 'The Respondent's earlier conduct has been considered here merely for the purpose of bringing into clearer focus the conduct in issue. Even without such consideration, however, the allegations of discrimination would have been found amply supported by such undisputed record facts as bear directly upon the layoffs of (the employees involved within the six-month period).' 87 N.L.R.B., at 1211. See also Local 1418, International Longshoremen's Ass'n, 102 N.L.R.B. 720, 729—730, relied on by the Board, and National Labor Relations Board v. General Shoe Corp., 6 Cir., 192 F.2d 504; National Labor Relations Board v. Clausen, 3 Cir., 188 F.2d 439; and Superior Engraving Co. v. National Labor Relations Board, 7 Cir., 183 F.2d 783, cited by a dissenting opinion here.
12
In Bowen Products an employee recalled from layoff was discriminatorily placed at the bottom of the relevant seniority list. He unsuccessfully attempted to obtain his proper seniority rating, and several months later was included in an economic reduction in force. Had his seniority originally been properly computed, he would not have been laid off at that time. The charge was filed and served within six months of the layoff, but more than six months after the original determination of seniority status. Finding that the only basis for a holding of unlawful layoff would be a finding that that determination had been a violation of the Act, the Board dismissed the complaint.
Greenville Cotton Oil (American Federation of Grain Millers) dealt with an alleged discriminatory refusal to reinstate strikers. Conceding that the respondent had engaged permanent replacements, the strikers demanded reinstatement on the ground that the strike had been caused or prolonged by an unfair labor practice committed by the employer prior to the hiring of the replacements. The acts alleged to have constituted such unfair practices having taken place more than six months prior to the filing and service of the charge, the Board held § 10(b) a bar to an order of reinstatement.
13
The complaint in News Printing Co. alleged that a refusal to grant wage increases to certain employees had been motivated by displeasure at their union activities. As a substantive matter, this allegation turned on the respondent's motive at the time of the refusal, which was within the limitations period. However, the General Counsel was unable to produce sufficient evidence, from within that period, to prove discriminatory motive, and the Board refused to permit reliance on evidence relating to acts occurring prior to the six-month period. The contention that such earlier acts could be referred to in order to justify the inference that the 'pattern of unlawful conduct . . . continued on into the present situation' was rejected. 116 N.L.R.B., at 211. Compare Paramount Cap Mfg. Co., 119 N.L.R.B. 785, 786, 799, enforcement granted, 8 Cir., 260 F.2d 109, where the presence of substantial post-limitations evidence was held to justify resort to evidence of earlier conduct.
The Universal Oil Products and Tennessee Knitting Mills cases concerned allegations that respondent employers had dominated or assisted labor organizations. Here again, the material issue was as to the relationship of the respondents to the unions involved, as of the date of the charge. Yet in both cases, because the evidence from within the statutory period was too sketchy to warrant a finding of unlawful conduct, the Board refused to permit reference to evidence from the earlier period, declining to rely on an inference that earlier unlawful relationships continued.
While it is true that in Paint, Varnish & Lacquer Makers Union (Andrew Brown Co.), 120 N.L.R.B. 1425, the Board found union picketing during the six-month period to have been undertaken for the unlawful purpose of obtaining recognition, although the only affirmative evidence of such purpose was based on acts done prior to that period, the decision is not inconsistent, so far as presently relevant, with the cases discussed above. Substantial evidence of purpose from within the limitations period was found in reliance on the inference that the earlier motive had continued unchanged. Id., at 1428, 1438. While the permissibility of an inference of this nature was rejected in the preceding cases, we need not now inquire into this seeming disparity of treatment, for it affects the minor premise only, and does not impair the accuracy of the proposition that, however marshalled, acts within the limitations period must under Board doctrine yield some substantial evidence of unlawful conduct.
14
Katz v. National Labor Relations Board, 9 Cir., 196 F.2d 411, and National Labor Relations Board v. Gaynor News Co., 2 Cir., 197 F.2d 719, relied on below and in dissent here, arose under provisions of the Act (§ 8(a)(3), 61 Stat. 140), since repealed (65 Stat. 601), which permitted union security agreements only with unions which possessed a Board certificate that a union security clause had been authorized at a special election of the employees involved. While the language, and perhaps the approach, of these cases may be considered inconsistent with the principles we deem governing here, the decisions on their facts present no such difficulty. Proof of the nonexistence of such a certificate, which of course was a continuing fact, plainly did not require resort to testimony about past events; rather the issue was much like one arising out of an agreement illegal on its face, the only difference being that a separate instrument was involved.
15
We think the rule in conspiracy cases, where the statute of limitations only begins to run upon the commission of the last overt act in furtherance thereof, does not furnish a useful analogy in this case. The statute in question here bars issuance of a complaint 'based upon any unfair labor practice' which occurred more than six months prior to the filing of the charge; it does not merely bar proceedings against an unfair labor practice which are not commenced within six months after that unfair labor practice has been committed. Cf. 18 U.S.C. § 3282, 18 U.S.C.A. § 3282. Our conclusion that the complaints giving rise to the judgment under review are of necessity 'based upon' the unfair labor practice of execution of the agreement, and are barred by time, has drawn on this statute's purpose and history, and we do not assert the universal applicability of our resolution of the particular question presented for decision. In any event, the commission of an overt act pursuant to a conspiratorial agreement represents a renewed affirmation of the unlawful purpose of the conspiracy. The acts constituting enforcement of a collective bargaining agreement cannot well be so characterized. Beyond that, one may question the appropriateness of analogizing this situation, where proper application of a particular statute of limitations involves taking into account competing values, to one which involves an unlawful agreement of a kind unreservedly condemned, and the entire undoing of which is the undiluted purpose of the criminal law. Indeed, the rule advanced in dissent cannot be squared with the Board's own approach to the statute. See the cases discussed in notes 12 and 13, ante.
16
The immediate impetus to the legislation was the pendency of an N.L.R.B. proceeding involving a closed-shop agreement in effect at the Kaiser shipbuilding yards at Portland, Oregon. The agreement, though executed at a time when only 66 workers were employed, was being applied to a 20,000-man work force. The debates show that the issue of representation by minority unions was in the forefront of legislative concern. See 89 Cong.Rec. 6950 (remarks of Reps. Smith and Tarver), 6953 (Rep. Tarver), 7029 (Sens. Truman and Ball), 7031—7032 (Sen. Wagner).
17
The National Labor Relations Board Appropriation Act, 1945, 58 Stat. 568, made several amendments in the limitations provisions, the principal of which were designed to render the rider inapplicable to agreements with company-dominated unions, and to provide an additional three-month period at the commencement of any renewal of an agreement in which a complaint could be filed. See 9 N.L.R.B.Ann.Rep. (1944), pp. 5—6. Subsequent re-enactments were without relevant change. 59 Stat. 378, 60 Stat. 698.
18
This conclusion seems to us not vitiated by the fact that the Senate Appropriations Committee, subsequent to the issuance of the Labor Committee Report, amended the appropriations rider in a manner perhaps susceptible of an interpretation which would render it inapplicable to agreements with minority unions. S.Rep. No. 146, 80th Cong., 1st Sess., pp. 6, 13. Nor is it sufficient to attempt to explain away the language of the Committee Report by reliance on the fact that, while the appropriations riders immunized agreements invalid on their face as well as those invalid for lack of majority status, see 8 N.L.R.B.Ann.Rep. (1943), pp. 7—8, § 10(b) is more narrowly framed, and concededly does not protect an agreement invalid on its face from attack six months after its execution. Under the broad union security proviso to § 8(3) of the original Act, 49 Stat. 452, invalidity of an agreement on its face was not a common problem, and we should not have expected Congressional discussion to have been primarily concerned with it. As we have seen, however, agreements with minority unions were specifically the focus of Congressional attention in this period, and the direct relevance of the Committee's discussion to the history of that problem is evident.
19
Adoption of a six-month period of limitations, criticized by opponents of the legislation as 'the shortest statute of limitations known to the law,' S.Rep.No. 105 (pt. II), 80th Cong., 1st Sess., p. 5 (Minority Report), was resisted on the ground that it gave 'unjust assistance to employers or unions which commit those types of practices which are easily concealed and difficult to detect.' 93 Cong.Rec. 4905 (remarks of Sen. Murray).
It need hardly be pointed out that we are not dealing with a case of fraudulent concealment alleged to toll the statute. See 105 U.S.App.D.C. at page 110, 264 F.2d at page 583 (dissenting opinion).
*
In fact, the undisputed testimony was that the union did not then represent a single one of the employees, and that the employer acceded to the union's demand for recognition and entered into the contract simply because the union had it 'over a barrel.'
| 67
|
362 U.S. 456
80 S.Ct. 874
4 L.Ed.2d 874
Willard H. PHILLIPS, petitioner,v.NEW YORK.
No. 497.
Supreme Court of the United States
October Term, 1959.
Argued April 18, 1960.
April 25, 1960
Mr. Henry W. Schober, Mineola, N.Y., for petitioner.
Mr. Joseph I. Heneghan, Mineola, N. Y., for respondent.
Argued April 18, 1960.
On writ of certiorari to the Court of Appeals of New York.
PER CURIAM.
1
After hearing oral argument and fully examining the record which was only partially set forth in the petition for certiorari, we conclude that the totality of circumstances as the record makes them manifest did not warrant bringing the case here. Accordingly, the writ is dismissed as improvidently granted.
| 89
|
362 U.S. 404
80 S.Ct. 843
4 L.Ed.2d 826
NEW HAMPSHIRE FIRE INSURANCE CO., Petitioner,v.SCANLON, District Director of Internal Revenue, et al.
No. 339.
Argued March 22, 1960.
Decided April 25, 1960.
Mr. Jack Hart, New York City, for petitioner.
Mr. Richard M. Roberts, Washington, D.C., for respondents.
Mr. Justice BLACK delivered the opinion of the Court.
1
Acting pursuant to statutory authority to levy, distrain or seize property or rights to property belonging to a delinquent taxpayer,1 respondent Scanlon, District Director of Internal Revenue, served notices of levy on the City of New York demanding that it pay to the Director money alleged to be due from the city to respondent Acme Cassa, Inc., under a contract for the construction of a school playground. The purpose of this distraint was to secure payment of taxes owing by taxpayer Acme Cassa to the Federal Government. The petitioner, New Hampshire Fire Insurance Co., then brought this summary proceeding, by a 'petition' in a United States District Court, seeking to have the levy quashed. The 'petition' alleged that the indebtedness of the city for the construction work was not owing to Acme Cassa but to the petitioner because, under its obligation as surety for Cassa's faithful performance of the construction contract, the insurance company had been compelled to complete the playground after Cassa got into financial difficulties and defaulted on the job. Pointing out that petitioner could institute a plenary suit for recovery on the indebtedness if it chose, the District Court held that it was without jurisdiction to determine the respective rights of the parties in a summary proceeding, and accordingly dismissed the petition.2 The Court of Appeals for the Second Circuit affirmed upon the opinion of the District Court.3 Because the Court of Appeals for the Third Circuit had previously held that a claimant of property so distrained for tax delinquencies need not resort to a plenary action but could adjudicate the controversy summarily, Ersa, Inc. v. Dudley, 3 Cir., 234 F.2d 178, 180; Raffaele v. Granger, 3 Cir., 196 F.2d 620; Rothensies v. Ullman, 3 Cir., 110 F.2d 590, we granted certiorari to resolve the intercircuit conflict. 361 U.S. 881, 80 S.Ct. 152, 4 L.Ed.2d 118.
2
Summary trial of controversies over property and property rights is the exception in our method of administering justice. Supplementing the constitutional, statutory, and common-law requirements for the adjudication of cases or controversies, the Federal Rules of Civil Procedure, 28 U.S.C.A., provide the normal course for beginning, conducting, and determining controversies. Rule 1 directs that the Civil Rules shall govern all suits of a civil nature, with certain exceptions stated in Rule 81 none of which is relevant here. Rule 2 directs that 'There shall be one form of action to be known as 'civil action." Rule 3 provides that 'A civil action is commenced by filing a complaint with the court.' Rule 56 sets forth an expeditious motion procedure for summary judgment in an ordinary, plenary civil action. Other rules set out in detail the manner, time, form and kinds of process, service, pleadings, objections, defenses, counterclaims and many other important guides and requirements for plenary civil trials. The very purpose of summary rather than plenary trials is to escape some or most of these trial procedures. Summary trials, as is pointed out in the petitioner's brief, may be conducted without formal pleadings, on short notice, without summons and complaints, generally on affidavits, and sometimes even ex parte.4 Such summary trials, it has been said, were practically unknown to the English common law and it may be added that they have had little acceptance in this country.5 In the absence of express statutory authorization,6 courts have been extremely reluctant to allow proceedings more summary than the full court trial at common law.7 Especially when a controversy like this is begun by peremptory seizure without an initial determination of the taxpayer's liability, there is neither justification nor authority for carving out an exception to the uniform and regular civil procedure laid down by the Federal Rules, either for the benefit of the party from whom the property was seized or for any other claimant.
3
Petitioner contends, however, that there is express statutory approval for summary trial of a claim for property seized by Internal Revenue officers. For this contention petitioner relies on 28 U.S.C. § 2463, 28 U.S.C.A. § 2463, which reads as follows:
4
'All property taken or detained under any revenue law of the United States shall not be repleviable, but shall be deemed to be in the custody of the law and subject only to the orders and decrees of the courts of the United States having jurisdiction thereof.'
5
Petitioner's argument is that this section puts property seized by revenue officers in the custody of the courts and that it necessarily follows that a court having such custody has power to dispose of the issue of ownership summarily. We cannot agree with either contention.
6
Property seized by a revenue officer for delinquent taxes is lawfully held by that officer in his administrative capacity and he has broad powers over such property. See Den ex dem. Murray v. Hoboken Land & Improvement Co., 18 How. 272, 15 L.Ed. 372, and Phillips v. Commissioner, 283 U.S. 589, 595—597, 51 S.Ct. 608, 611 612, 75 L.Ed. 1289. The history of § 2463 plainly indicates a congressional purpose to protect that property in the revenue officer's custody and not to transfer that custody either actually or fictionally into the custody of the federal courts. The section was originally adopted in 1833 to meet a particular necessity brought about by South Carolina's adoption of an 'Ordinance of Mullification.'8 That state ordinance authorized state officials to seize property that had been distrained or levied on by federal officers and provided that South Carolina state courts could issue writs of replevin to take such property out of the hands of federal officials. The plain object of the 1833 Act was to counteract this state ordinance and it therefore specifically provided that property held under United States revenue laws should not be 'repleviable.' This statute went on to say that property so seized should be considered as 'in the custody of the law, and subject only to the orders and decrees of the courts of the United States having jurisdiction thereof.' 4 Stat. 633. This law, originally passed to protect the custody of property seized by federal revenue officers against more or less summary state court action, should not now be construed as justifying summary proceedings for determining the rights of any litigant to property seized by federal officers. In placing these cases exclusively within the jurisdiction of the federal courts, Congress did not indicate any intention to relax or alter the safeguards of plenary proceedings generally applicable to property controversies in federal courts.
7
Even if § 2463 could somehow be construed as transferring custody of property seized by revenue officers into the hands of officers of the federal courts it would by no means follow that cases and controversies involving ownership of that property should be tried in summary fashion. It is true that courts have sometimes passed on ownership of property in their custody without a plenary proceeding where, for illustration, such a proceeding was ancillary to a pending action or where property was held in the custody of court officers, subject to court orders and court discipline. See, e.g., Go-Bart Importing Co. v. United States, 282 U.S. 344, 355, 51 S.Ct. 153, 157, 75 L.Ed. 374.9 But here there is no situation kindred to that in Go-Bart. What is at issue here is an ordinary dispute over who owns the right to collect a debt—an everyday, garden-variety controversy that regular, normal court proceedings are designed to take care of. As the District Court pointed out in its opinion, there is ample authority for petitioner to have its claim adjudicated by the Federal District Court but that should be done in a plenary not in a summary proceeding.
1
I.R.C. of 1954, §§ 6331, 6332, 26 U.S.C.A. §§ 6331, 6332.
2
New Hampshire Fire Ins. Co. v. Scanlon, 172 F.Supp. 392. The District Court relied on two Second Circuit cases, Goldman v. American Dealers Service, 135 F.2d 398, and In re Behrens, 39 F.2d 561, holding that parties from whom property was seized could not avail themselves of summary proceedings for its recovery.
3
New Hampshire Fire Ins. Co. v. Scanlon, 267 F.2d 941.
4
See Central Republic Bank & Trust Co. v. Caldwell, 8 Cir., 58 F.2d 721, 731—732, from which petitioner's brief quoted the following:
'The main characteristic differences between a summary proceeding and a plenary suit are: The former is based upon petition, and proceeds without formal pleadings; the latter proceeds upon formal pleadings. In the former, the necessary parties are cited in by order to show cause; in the latter, formal summons brings in the parties other than the plaintiff. In the former, short time notice of hearing is fixed by the court; in the latter, time for pleading and hearing is fixed by statute or by rule of court. In the former, the hearing is quite generally upon affidavits; in the latter, examination of witnesses is the usual method. In the former, the hearing is sometimes ex parte; in the latter, a full hearing is had.'
5
See, e.g., United States v. Casino, D.C., 286 F. 976; Clarke v. City of Evansville, 75 Ind.App. 500, 505, 131 N.E. 82, 84, ('No cause can be tried summarily (otherwise than in due course), except perhaps cases of contempt of court; for our Code, as well as the common law, is a stranger to such a mode of trial'); Billings Hotel Co. v. City of Enid, 53 Okl. 1, 5, 154 P. 557, 558, L.R.A.1916D, 1016. Cf. Western & Atlantic R. Co. v. Atlanta, 113 Ga. 537, 38 S.E. 996, 54 L.R.A. 294; State ex rel. Timothy v. Howse, 134 Tenn. 67, 183 S.W. 510, L.R.A.1916D, 1090.
6
For examples of such authorization, see § 67, subs. a(4), and f(4) of the Bankruptcy Act, 11 U.S.C. § 107, subs. a(4), and f(4), 11 U.S.C.A. § 107, subs. a(4), and f(4). See also § 2, sub. a(7), 11 U.S.C. § 11, sub. a(7), 11 U.S.C.A. § 11, sub. a(7); Thompson v. Magnolia, 309 U.S. 478, 481, 60 S.Ct. 628, 630, 84 L.Ed. 876; Harris v. Avery Brundage Co., 305 U.S. 160, 162—164, 59 S.Ct. 131, 132—134, 83 L.Ed. 100.
7
See Judge Learned Hand's opinion in United States v. Casino, D.C., 286 F. 976, at pages 978—979: 'It is clear that the owner of property unlawfully seized has without statute no summary remedy for a return of his property. * * * He may have trespass, or, if there be no statute to the contrary, replevin; but, just as in our law no public officer has any official protection, so no individual has exceptional remedies for abuse of power by such officers. We know no 'administrative law' like that of the Civilians.'
See also, for example, United States v. Gowen, 2 Cir., 40 F.2d 593, 598; Weinstein v. Attorney General, 2 Cir., 271 F. 673; United States v. Farrington, D.C., 17 F.Supp. 702; In re Allen, D.C., 1 F.2d 1020; Sims v. Stuart, D.C., 291 F. 707; Lewis v. McCarthy, D.C, 274 F. 496; United States v. Hee, D.C., 219 F. 1019; In re Chin K. Shue, D.C., 199 F. 282. Cf. Taubel-Scott-Kitzmiller Co. v. Fox, 264 U.S. 426, 431, 44 S.Ct. 396, 398, 68 L.Ed. 770; Applybe v. United States, 9 Cir., 32 F.2d 873, opinion denying rehearing, 33 F.2d 897. And see the Second Circuit cases cited in note 2, supra.
8
'An Ordinance, To Nullify certain Acts of the Congress of the United States, Purporting to be Laws, laying Duties and Imposts on the Importation of Foreign Commodities.' 1 Statutes at Large of South Carolina 329 ff.
9
See also Cogen v. United States, 278 U.S. 221, 225, 49 S.Ct. 118, 120, 73 L.Ed. 275 (motion procedure upheld as ancillary to criminal action); Weeks v. United States, 232 U.S. 383, 398, 34 S.Ct. 341, 346, 58 L.Ed. 652 (property, allegedly unlawfully seized, in possession of an 'officer(s) of the court'); United States v. McHie, D.C., 194 F. 894, 898 (property seized under purported authority of the court's own process, a search warrant).
Those cases that have required the Government to bring a plenary action in forfeiture proceedings promptly after seizing property, on pain of an order to abandon the seizure and return the property, are plainly inapplicable here. See, e.g., Goldman v. American Dealers Service, 2 Cir., 135 F.2d 398; Church v. Goodnough, D.C., 14 F.2d 432. In all these cases, stemming from a dictum in Slocum v. Mayberry, 2 Wheat. 1, 9—10, 4 L.Ed. 169, the threat of summary order was invoked under the equitable powers of the courts, not to adjudicate claims to the property but to compel the Government to bring an ordinary civil action, the only proceeding authorized in those cases, without unreasonable delay.
| 89
|
362 U.S. 440
80 S.Ct. 813
4 L.Ed.2d 852
HURON PORTLAND CEMENT COMPANY, etc., Appellant,v.CITY OF DETROIT, MICHIGAN, etc., et al.
No. 86.
Argued Feb. 29, 1960.
Decided April 25, 1960.
Mr. Alfred E. Lindbloom, Detroit, Mich., for appellant.
Mr. John F. Hathaway, Detroit, Mich., for appellees.
Mr. Justice STEWART delivered the opinion of the Court.
1
This appeal from a judgment of the Supreme Court of Michigan draws in question the constitutional validity of certain provisions of Detroit's Smoke Abatement Code as applied to ships owned by the appellant and operated in interstate commerce.
2
The appellant is a Michigan corporation, engaged in the manufacture and sale of cement. It maintains a fleet of five vessels which it uses to transport cement from its mill in Alpena, Michigan, to distributing plants located in various states bordering the Great Lakes. Two of the ships, the S. S. Crapo and the S. S. Boardman, are equipped with handfired Scotch marine boilers. While these vessels are docked for loading and unloading it is necessary, in order to operate deck machinery, to keep the boilers fired and to clean the fires periodically. When the fires are cleaned, the ship's boiler stacks emit smoke which in density and duration exceeds the maximum standards allowable under the Detroit Smoke Abatement Code. Structural alterations would be required in order to insure compliance with the Code.
3
Criminal proceedings were instituted in the Detroit Recorder's Court against the appellant and its agents for violations of the city law during periods when the vessels were docked at the Port of Detroit. The appellant brought an action in the State Circuit Court to enjoin the city from further prosecuting the pending litigation in the Recorder's Court, and from otherwise enforcing the smoke ordinance against its vessels, 'except where the emission of smoke is caused by the improper firing or the improper use of the equipment upon said vessels.' The Circuit Court refused to grant relief, and the Supreme Court of Michigan affirmed, 355 Mich. 227, 93 N.W.2d 888. An appeal was lodged here, and we noted probable jurisdiction, 361 U.S. 806, 80 S.Ct. 53, 4 L.Ed.2d 53.
4
In support of the claim that the ordinance cannot constitutionally be applied to appellant's ships, two basic arguments are advanced. First, it is asserted that since the vessels and their equipment, including their boilers, have been inspected, approved and licensed to operate in interstate commerce in accordance with a comprehensive system of regulation enacted by Congress, the City of Detroit may not legislate in such a way as, in effect, to impose additional or inconsistent standards. Secondly, the argument is made that even if Congress has not expressly pre-empted the field, the municipal ordinance (materially affects interstate commerce in matters where uniformity is necessary.' We have concluded that neither of these contentions can prevail, and that the Federal Constitution does not prohibit application to the appellant's vessels of the criminal provisions of the Detroit ordinance.1
5
The ordinance was enacted for the manifest purpose of promoting the health and welfare of the city's inhabitants. Legislation designed to free from pollution the very air that people breathe clearly falls within the exercise of even the most traditional concept of what is compendiously known as the police power. In the exercise of that power, the states and their instrumentalities may act, in many areas of interstate commerce and maritime activities, concurrently with the federal government. Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23; Cooley v. Board of Wardens of Port of Philadelphia, 12 How. 299, 13 L.Ed. 996; The Steamboat New York v. Rea, 18 How. 223, 15 L.Ed. 359; Morgan's Louisiana & T.R. & S.S. Co. v. Louisiana Board of Health, 118 U.S. 455, 6 S.Ct. 1114, 30 L.Ed. 237; The Minnesota Rate Cases, Simpson v. Shepard, 230 U.S. 352, 33 S.Ct. 729, 57 L.Ed. 1511; Wilmington Transp. Co. v. R.R. Commission of California, 236 U.S. 151, 35 S.Ct. 276, 59 L.Ed. 508; Vandalia R.R. Co. v. Public Service Commission, 242 U.S. 255, 37 S.Ct. 93, 61 L.Ed. 276; Stewart & Co. v. Rivara, 274 U.S. 614, 47 S.Ct. 718, 71 L.Ed. 1234; Welch Co. v. State of New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500.
6
The basic limitations upon local legislative power in this area are clear enough. The controlling principles have been reiterated over the years in a host of this Court's decisions. Evenhanded local regulation to effectuate a legitimate local public interest is valid unless pre-empted by federal action, Erir R.R. Co. v. People of State of New York 233 U.S. 671, 34 S.Ct. 756, 58 L.Ed. 1149; Oregon-Washington R. & Nav. Co. v. State of Washington, 270 U.S. 87, 46 S.Ct. 279, 70 L.Ed. 482; Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432; Missouri Pacific R. Co. v. Porter, 273 U.S. 341, 47 S.Ct. 383, 71 L.Ed. 672; Service Storage & Transfer Co. v. Commonwealth of Virginia, 359 U.S. 171, 79 S.Ct. 714, 3 L.Ed.2d 717, or unduly burdensome on maritime activities or interstate commerce, State of Minnesota v. Barber, 136 U.S. 313, 10 S.Ct. 862, 34 L.Ed. 455; Morgan v. Commonwealth of Virginia, 328 U.S. 373, 66 S.Ct. 1050, 90 L.Ed. 1317; Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 79 S.Ct. 962, 3 L.Ed.2d 1003.
7
In determining whether state regulation has been pre-empted by federal action, 'the intent to supersede the exercise by the state of its police power as to matters not covered by the Federal legislation is not to be inferred from the mere fact that Congress has seen fit to circumscribe its regulation and to occupy a limited field. In other words, such intent is not to be implied unless the act of Congress, fairly interpreted, is in actual conflict with the law of the state.' Savage v. Jones, 225 U.S. 501, 533, 32 S.Ct. 715, 726, 56 L.Ed. 1182. See also Reid v. State of Colorado, 187 U.S. 137, 23 S.Ct. 92, 47 L.Ed. 108; Asbell v. State of Kansas, 209 U.S. 251, 28 S.Ct. 485, 52 L.Ed. 778; Welch Co. v. State of New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500; Maurer v. Hamilton, 309 U.S. 598, 60 S.Ct. 726, 84 L.Ed. 969.
8
In determining whether the state has imposed an undue burden on interstate commerce, it must be borne in mind that the Constitution when 'conferring upon Congress the regulation of commerce, * * * never intended to cut the States off from legislating on all subjects relating to the health, life, and safety of their citizens, though the legislation might indirectly affect the commerce of the country. Legislation, in a great variety of ways, may affect commerce and persons engaged in it without constituting a regulation of it, within the meaning of the Constitution.' Sherlock v. Alling, 93 U.S. 99, 103, 23 L.Ed. 819; Austin v. State of Tennessee, 179 U.S. 343, 21 S.Ct. 132, 45 L.Ed. 224; Louisville & Nashville R. Co. v. Commonwealth of Kentucky, 183 U.S. 503, 22 S.Ct. 95, 46 L.Ed. 298; The Minnesota Rate Cases, Simpson v. Shepard, 230 U.S. 352, 33 S.Ct. 729, 57 L.Ed. 1511; Boston & Maine R. Co. v. Armburg, 285 U.S. 234, 52 S.Ct. 336, 76 L.Ed. 729; Collins v. American Buslines, Inc., 350 U.S. 528, 76 S.Ct. 582, 100 L.Ed. 672. But a state may not impose a burden which materially affects interstate commerce in an area where uniformity of regulation is necessary. Hall v. DeCuir, 95 U.S. 485, 24 L.Ed. 547; Southern Pacific Co. v. State of Arizona, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915; Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 79 S.Ct. 962, 3 L.Ed.2d 1003.
9
Although verbal generalizations do not of their own motion decide concrete cases, it is nevertheless within the framework of these basic principles that the issues in the present case must be determined.
I.
10
For many years Congress has maintained an extensive and comprehensive set of controls over ships and shipping. Federal inspection of steam vessels was first required in 1838, 5 Stat. 304, and the requirement has been continued ever since. 5 Stat. 626; 10 Stat. 61; 14 Stat. 227; 16 Stat. 440; 22 Stat. 346; 28 Stat. 699; 32 Stat. 34; 34 Stat. 68; 60 Stat. 1097; 73 Stat. 475. Steam vessels which carry passengers must pass inspection annually, 46 U.S.C. § 391(a), 46 U.S.C.A. § 391(a), and those which do not, every two years. 46 U.S.C. § 391(b), 46 U.S.C.A. § 391(b). Failure to meet the standards invoked by law results in revocation of the inspection certificate, or refusal to issue a new one, 46 U.S.C. § 391(d), 46 U.S.C.A. § 391(d). It is unlawful for a vessel to operate without such a certificate. 46 U.S.C. § 390c(a), 46 U.S.C.A. § 390c(a).
11
These inspections are broad in nature, covering 'the boilers, unfired pressure vessels, and appurtenances thereof, also the propelling and auxiliary machinery, electrical apparatus and equipment, of all vessels subject to inspection * * *.' 46 U.S.C. § 392(b), 46 U.S.C.A. § 392(b). The law provides that 'No boiler * * * shall be allowed to be used if constructed in whole or in part of defective material or which because of its form, design, workmanship, age, use or for any other reason is unsafe.' 46 U.S.C. § 392(c), 46 U.S.C.A. § 392(c).
12
As is apparent on the face of the legislation, however, the purpose of the federal inspection statutes is to insure the seagoing safety of vessels subject to inspection. Thus 46 U.S.C. § 392(c), 46 U.S.C.A. § 392(c), makes clear that inspection of boilers and related equipment is for the purpose of seeing to it that the equipment 'may be safely employed in the service proposed.' The safety of passengers, 46 U.S.C. § 391(a), 46 U.S.C.A. § 391(a), and of the crew, 46 U.S.C. § 391(b), 46 U.S.C.A. § 391(b), is the criterion. The thrust of the federal inspection laws is clearly limited to affording protection from the perils of maritime navigation. Cf. Ace Waterways v. Fleming, D.C., 98 F.Supp. 666. See also Steamship Co. v. Joliffe, 2 Wall. 450, 17 L.Ed. 805.
13
By contrast, the sole aim of the Detroit ordinance is the elimination of air pollution to protect the health and enhance the cleanliness of the local community. Congress recently recognized the importance and legitimacy of such a purpose, when in 1955 it provided:
14
'(I)n recognition of the dangers to the public health and welfare, injury to agricultural crops and livestock, damage to and deterioration of property, and hazards to air and ground transportation, from air pollution, it is hereby declared to be the policy of Congress to preserve and protect the primary responsibilities and rights of the States and local governments in controlling air pollution, to support and aid technical research to devise and develop methods of abating such pollution, and to provide Federal technical services and financial aid to State and local government air pollution control agencies and other public or private agencies and institutions in the formulation and execution of their air pollution abatement research programs.' 69 Stat. 322, 42 U.S.C. § 1857, 42 U.S.C.A. § 1857.
15
Congressional recognition that the problem of air pollution is peculiarly a matter of state and local concern is manifest in this legislation. Such recognition is underlined in the Senate Committee Report:
16
'The committee recognizes that it is the primary responsibility of State and local governments to prevent air pollution. The bill does not propose any exercise of police power by the Federal Government and no provision in it invades the sovereignty of States, counties, or cities.' S.Rep. No. 389, 84th Cong., 1st Sess. 3, U.S.Code Congressional and Administrative News 1955, p. 2459
17
We conclude that there is no overlap between the scope of the federal ship inspection laws and that of the municipal ordinance here involved.2 For this reason we cannot find that the federal inspection legislation has pre-empted local action. To hold otherwise would be to ignore the teaching of this Court's decisions which enjoin seeking out conflicts between state and federal regulation where none clearly exists. Savage v. Jones, 225 U.S. 501, 32 S.Ct. 715, 56 L.Ed. 1182; Welch Co. v. State of New Hampshire, 306 U.S. 79, 59 S.Ct. 438, 83 L.Ed. 500; Maurer v. Hamilton, 309 U.S. 598, 60 S.Ct. 726, 84 L.Ed. 969.
18
An additional argument is advanced, however, based not upon the mere existence of the federal inspection standards, but upon the fact that the appellant's vessels were actually licensed. 46 U.S.C. § 263, 46 U.S.C.A. § 263, and enrolled, 46 U.S.C. §§ 259, 260, 46 U.S.C.A. §§ 259, 260, by the national government. It is asserted that the vessels have thus been given a dominant federal right to the use of the navigable waters of the United States, free from the local impediment that would be imposed by the Detroit ordinance.
19
The scope of the privilege granted by the federal licensing scheme has been well delineated. A state may not exclude from its waters a ship operating under a federal license. Gibbons v. Ogden, 9 Wheat. 1, 6 L.Ed. 23. A state may not require a local occupation license, in addition to that federally granted, as a condition precedent to the use of its waters. Moran v. City of New Orleans, 112 U.S. 69, 5 S.Ct. 38, 28 L.Ed. 653. While an enrolled and licensed vessel may be required to share the costs of benefits it enjoys, Huse v. Glover, 119 U.S. 543, 7 S.Ct. 313, 30 L.Ed. 487, and to pay fair taxes imposed by its domicile, Transportation Co. v. Wheeling, 99 U.S. 273, 25 L.Ed. 412, it cannot be subjected to local license imposts exacted for the use of a navigable waterway, Harman v. City of Chicago, 147 U.S. 396, 13 S.Ct. 306, 37 L.Ed. 216. See also Sinnot v. Davenport, 22 How. 227, 16 L.Ed. 243.
20
The mere possession of a federal license, however, does not immunize a ship from the operation of the normal incidents of local police power, not constituting a direct regulation of commerce. Thus, a federally licensed vessel is not, as such, exempt from local pilotage laws, Cooley v. Board of Wardens of Port of Philadelphia, 12 How. 299, 13 L.Ed. 996, or local quarantine laws, Morgan's Louisiana & T.R. & S.S. Co. v. Louisiana Board of Health, 118 U.S. 455, 6 S.Ct. 1114, 30 L.Ed. 237, or local safety inspections, Kelly v. State of Washington, 302 U.S. 1, 58 S.Ct. 87, 82 L.Ed. 3, or the local regulation of wharves and docks, Packet Co. v. Catlettsburg, 105 U.S. 559, 26 L.Ed. 1169. Indeed this Court has gone so far as to hold that a state, in the exercise of its police power, may actually seize and pronounce the forfeiture of a vessel 'licensed for the coasting trade, under the laws of the United States, while engaged in that trade.' Smith v. Maryland, 18 How. 71, 74, 15 L.Ed. 269. The present case obviously does not even approach such an extreme, for the Detroit ordinance requires no more than compliance with an orderly and reasonable scheme of community regulation. The ordinance does not exclude a licensed vessel from the Port of Detroit, nor does it destroy the right of free passage. We cannot hold that the local regulation so burdens the federal license as to be constitutionally invalid.
II.
21
The claim that the Detroit ordinance, quite apart from the effect of federal legislation, imposes as to the appellant's ships and undue burden on interstate commerce needs no extended discussion. State regulation, based on the police power, which does not discriminate against interstate commerce or operate to disrupt its required uniformity, may constitutionally stand. Hennington v. State of Georgia, 163 U.S. 299, 16 S.Ct. 1086, 41 L.Ed. 166; Lake Shore & Michigan Southern Railway Co. v. State of Ohio, 173 U.S. 285, 19 S.Ct. 465, 43 L.Ed. 702; Pennsylvania Gas Co. v. Public Service Commission, 252 U.S. 23, 40 S.Ct. 279, 64 L.Ed. 434; Milk Control Board of Pennsylvania v. Eisenberg Farm Products, 306 U.S. 346, 59 S.Ct. 528, 83 L.Ed. 752; Bob-Lo Excursion Co. v. People of State of Michigan, 333 U.S. 28, 68 S.Ct. 358, 92 L.Ed. 455.
22
It has not been suggested that the local ordinance, applicable alike to 'any person, firm or corporation' within the city, discriminates against interstate commerce as such. It is a regulation of general application, designed to better the health and welfare of the community. And while the appellant argues that other local governments might impose differing requirements as to air pollution, it has pointed to none. The record contains nothing to suggest the existence of any such competing or conflicting local regulations. Cf. Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 79 S.Ct. 962, 3 L.Ed.2d 1003. We conclude that no impermissible burden on commerce has been shown.
23
The judgment is affirmed.
24
Mr. Justice DOUGLAS, with whom Mr. Justice FRANKFURTER concurs, dissenting.
25
The Court treats this controversy as if it were merely an inspection case with the City of Detroit supplementing a federal inspection system as the State of Washington did in Kelly v. State of Washington, 302 U.S. 1, 58 S.Ct. 87, 82 L.Ed. 3. There a state inspection system touched matters 'which the federal laws and regulations' left 'untouched.' Id., 302 U.S. at page 13, 58 S.Ct. at page 93. This is Not that type of case. Nor is this the rare case where state law adopts the standards and requirements of federal law and is allowed to exact a permit in addition to the one demanded by federal law. People of State of California v. Zook, 336 U.S. 725, 735, 69 S.Ct. 841, 93 L.Ed. 1005. Here we have a criminal prosecution against a shipowner and officers of two of its vessels for using the very equipment on these vessels which the Federal Government says may be used. At stake are a possible fine of $100 on the owner and both a fine and a 30-day jail sentence on the officers.
26
Appellant has a federal certificate for each of its vessels S.S. John W. Boardman, S.S.S.T. Crapo, and others. The one issued on March 21, 1956, by the United States Coast Guard for S.S.S.T. Crapo is typical. The certificate states 'The said vessel is permitted to be navigated for one year on the Great Lakes.' The certificate specifies the boilers which are and may be used—'Main Boilers Number 3, Year built 1927, Mfr. Manitowoc Boiler Wks.' It also specifies the fuel which is used and is to be used in those boilers—'Fuel coal.'
27
Appellant, operating the vessel in waters at the Detroit dock, is about to be fined criminally for using the precise equipment covered by the federal certificate because, it is said, the use of that equipment will violate a smoke ordinance of the City of Detroit.
28
The federal statutes give the Coast Guard the power to inspect 'the boilers' of freight vessels every two years,1 and provide that when the Coast Guard approves the vessel and her equipment throughout, a certificate to that effect shall be made.2
29
The requirements of the Detroit smoke ordinance are squarely in conflict with the federal statute. Section 2.2A of the ordinance prohibits the emission of the kind of smoke which cannot be at all times prevented by vessels equipped with hand-fired Scotch marine boilers such as appellant's vessels use. Section 2.16 of the ordinance makes it unlawful to use any furnace or other combustion equipment or device in the city without a certificate of operation which issues only after inspection. Section 2.17 provides for an annual inspection of every furnace or other combustion equipment used within the city. Section 2.20 provides that if an owner has been previously notified of three or more violations of the ordinance within any consecutive 12-month period he shall be notified to show cause before the Commissioner why the equipment should not be sealed. At the hearing, if the Commissioner finds that adequate corrective means have not been employed to remedy the situation, the equipment shall be sealed. Section 3.2 provides for a fine of not more than $100 or imprisonment for not more than 30 days or both upon conviction of any violation of any provision of the ordinance, and each day a violation is permitted to exist constitutes a separate offense.
30
Thus it is plain that the ordinance requires not only the inspection and approval of equipment which has been inspected and approved by the Coast Guard but also the sealing of equipment, even though it has been approved by the Coast Guard. Under the Detroit ordinance a certificate of operation would not issue for a hand-fired Scotch marine boiler, even though it had been approved by the Coast Guard.3 In other words, this equipment approved and licensed by the Federal Government for use on navigable waters can pass muster under local law.
31
If local law required federally licensed vessels to observe local speed laws, obey local traffic regulations, or dock at certain times or under prescribed conditions, we would have local laws not at war with the federal license, but complementary to it. In Kelly v. State of Washington, supra, 302 U.S. at pages 14—15, 58 S.Ct. at page 94, 82 L.Ed. 3, the Court marked precisely that distinction. While it allowed state inspection of hull and machinery of tugs over and above that required by federal statutes, it noted that state rules which changed the federal standards 'for the structure and equipment of vessels' would meet a different fate:
32
'The state law is a comprehensive code. While it excepts vessels which are subject to inspection under the laws of the United States, it has provisions which may be deemed to fall within the class of regulations which Congress alone can provide. For example, Congress may establish standards and designs for the structure and equipment of vessels, and may prescribe rules for their operation, which could not properly be left to the diverse action of the states. The state of Washington might prescribe standards, designs, equipment and rules of one sort, Oregon another, California another, and so on. But it does not follow that in all respects the state act must fail.'
33
This case, like Napier v. Atlantic Coast Line R. Co., 272 U.S. 605, 47 S.Ct. 207, 71 L.Ed. 432, involves the collision between a local law and a federal law which gives a federal agency the power to specify or approve the equipment to be used by a federal licensee. In that case one State required automatic fire doors on locomotives of interstate trains and another State required cab curtains during the winter months. The Interstate Commerce Commission, though it had the power to do so under the Boiler Inspection Act, had never required a particular kind of fire door or cab curtain. The Court, speaking through Mr. Justice Brandeis, said, 272 U.S. at pages 612—613, 47 S.Ct. at page 210:
34
'The federal and the state statutes are directed to the same subject—the equipment of locomotives. They operate upon the same object. It is suggested that the power delegated to the Commission has been exerted only in respect to minor changes or additions. But this, if true, is not of legal significance. It is also urged that, even if the Commission has power to prescribe an automatic firebox door and a cab curtain, it has not done so, and that it has made no other requirement inconsistent with the state legislation. This, also, if true, is without legal significance. The fact that the Commission has not seen fit to exercise its authority to the full extent conferred, has no bearing upon the construction of the act delegating the power. We hold that state legislation is precluded, because the Boiler Inspection Act, as we construe it, was intended to occupy the field.'
35
Here the Coast Guard would be entitled to insist on different equipment. But it has not done so. The boats of appellant, therefore, have credentials good for any port; and I would not allow this local smoke ordinance to work in derogation of them. The fact that the Federal Government in certifying equipment applies standards of safety for seagoing vessels, while Detroit applies standards of air pollution seems immaterial. Federal pre-emption occurs when the boilers and fuel to be used in the vessels are specified in the certificate. No state authority can, in my view, change those specifications. Yet that is in effect what is allowed here.
36
As we have seen, the Detroit ordinance contains provisions making it unlawful to operate appellant's equipment without a certificate from the city and providing for the sealing of the equipment in case of three of more violations within any 12-month period. The Court says that those sanctions are not presently in issue, that it reserves decision as to their validity, and that it concerns itself only with 'the enforcement of the criminal provisions' of the ordinance. Yet by what authority can a local government fine people or send them to jail for using in interstate commerce the precise equipment which the federal regulatory agency has certified and approved' The burden of these criminal sanctions on the owners and officers, particularly as it involves the risk of imprisonment, may indeed be far more serious than a mere sealing of the equipment. Yet whether fine or imprisonment is considered, the effect on the federal certificate will be crippling. However the issue in the present case is stated it comes down to making criminal in the port of Detroit the use of a certificate issued under paramount federal law. Mintz v. Baldwin, 289 U.S. 346, 53 S.Ct. 611, 77 L.Ed. 1245, upheld the requirement of a state inspection certificate where a federal certificate might have been, but was not, issued. Cf. People of State of California v. Thompson, 313 U.S. 109, 112, 61 S.Ct. 930, 931, 85 L.Ed. 1219. Never before, I believe, have we recognized the right of local law to make the use of an unquestionably legal federal license a criminal offense.
37
What we do today is in disregard of the doctrine long accepted and succinctly stated in the 1851 Term in State of Pennsylvania v. Wheeling & Belmont Bridge Co., 13 How. 518, 566, 14 L.Ed. 249, 'No State law can hinder or obstruct the free use of a license granted under an act of Congress.'4 The confusion and burden arising from the imposition by one State of requirements for equipment which the Federal Government has approved was emphasized in Kelly v. State of Washington, supra, in the passage already quoted. The requirements of Detroit may be too lax for another port. Cf. People v. Cunard White Star, Ltd., 280 N.Y. 413, 21 N.E.2d 489. The variety of requirements for equipment which the States may provide in order to meet their air pollution needs underlines the importance of letting the Coast Guard license serve as authority for the vessel to use, in all our ports, the equipment which it certifies.
1
The Detroit legislation also contains provisions making it unlawful to operate any combustion equipment in the city without a certificate, § 2.16, providing for an annual inspection of all such equipment used in the city, § 2.17, and further providing for the sealing of equipment in the event that the inspection requirements are repeatedly ignored, § 2.20. There is nothing in the record to indicate that the city has at any time attempted to enforce these provisions with respect to the appellant's ships. Accordingly, we do not reach the question of the validity of the inspection sections as they might be applied to appellant, but limit our consideration solely to what is presented upon this record—the enforcement of the criminal provisions of the Code for violation of the smoke emission provisions.
2
Compare, Napier v. Atlantic Coast Line R. Co., where the Court concluded that 'the (Locomotive) Boiler Inspection Act (45 U.S.C.A. § 22 et seq.) * * * was intended to occupy the field.' 272 U.S. 605, 613, 47 S.Ct. 207, 210, 71 L.Ed. 432.
1
46 U.S.C. § 392, 46 U.S.C.A. § 392.
2
46 U.S.C. § 399, 46 U.S.C.A. § 399, provides in part:
'When the inspection of a steam vessel is completed and the Secretary of the Department in which the Coast Guard is operating approves the vessel and her equipment throughout, he shall make and subscribe a certificate to that effect.'
3
The trial court in its opinion said:
'It is agreed it is impossible to prevent emission of the kind of smoke prohibited by the smoke ordinance if the vessel is equipped with hand-fired scotch marine boilers. The Boardman has two boilers each with two doors and one steam air jet over each door. The Crapo has three boilers, each with two doors and one steam air jet over each door. The steam jets being installed at the suggestion of Benjamin Linsky, former Chief of the Bureau of Smoke Abatement for the City.
'Testimony showed also that the plaintiff used a chemical in an attempt to reduce the smoke. Plaintiff urges it has done everything that it could possibly do with the equipment it has to prevent the emission of smoke. It was shown on trial that the fleet is subject to periodic inspection by the coast guard, which issues a search (sic) of inspection. The Crapo in 1955, docked at Detroit twenty-two times for an average docking time of 23.9 hours and the Boardman docked at Detroit 25 times that year with an average stay of 16.2 hours. Both vessels were constantly engaged in interstate and foreign commerce during this period.'
4
Smith v. State of Maryland, 18 How. 71, 15 L.Ed. 269, is not to the contrary. There a vessel enrolled under the laws of the United States was allowed to be forfeited by Maryland for dredging for oysters in violation of Maryland law. But the enrollment of vessels serves only a limited purpose. Smith v. State of Maryland, supra, was explained in Stewart & Co. v. Rivara, 274 U.S. 614, 47 S.Ct. 718, 71 L.Ed. 1234. The Court said, 'The purpose of the enrollment of vessels is to give to them the privileges of American vessels as well as the protection of our flag.' Id., 274 U.S. at page 618, 47 S.Ct. at page 720. Enrollment without more did not give the enrolled vessel a license to disregard the variety of pilotage, health and other such local laws which the opinion of the Court in the famous case of Cooley v. Board of Wardens of Port, 12 How. 299, 13 L.Ed. 996 (written by Mr. Justice Curtis who also wrote for the Court in Smith v. State of Maryland), had left to the States to be obeyed by all vessels. The local regulations approved in the Cooley case never qualified the license to ply as a vessel nor penalized its movement on navigable waters. The federal license in the instant case, however, specifically describes the only equipment and fuel which these vessels are allowed to use, and Detroit is permitted to make their use criminal.
| 910
|
362 U.S. 458
80 S.Ct. 847
4 L.Ed.2d 880
MARYLAND AND VIRGINIA MILK PRODUCERS ASSOCIATION, INC., Appellant,v.UNITED STATES of America. UNITED STATES of America, Appellant, v. MARYLAND AND VIRGINIA MILK PRODUCERS ASSOCIATION, INC.
Nos. 62, 73.
Argued Jan. 19, 20, 1960.
Decided May 2, 1960.
Messrs.
[Syllabus from pages 458-459 intentionally omitted] Herbert A. Bergson and William J. Hughes, Jr., Washington, D.C., for appellant in No. 62 and for appellee in No. 73.
Mr. Philip Elman, Washington, D.C., for appellee in No. 62 and for appellant in No. 73.
Mr. Justice BLACK delivered the opinion of the Court.
1
This is a civil antitrust action brought by the United States in a Federal District Court against an agricultural co-operative, the Maryland and Virginia Milk Producers Association, Inc. The Association supplies about 86% of the milk purchased by all milk dealers in the Washington, D.C., metropolitan area, and has as members about 2,000 Maryland and Virginia dairy farmers. The complaint charged that the Association had: (1) attempted to monopolize and had monopolized interstate trade and commerce in fluid milk in Maryland, Virginia and the District of Columbia in violation of § 2 of the Sherman Act;1 (2) through contracts and agreements combined and conspired with Embassy Dairy and others to eliminate and foreclose competition in the same milk market area in violation of § 3 of that Act;2 and (3) bought all the assets of Embassy Dairy, the largest milk dealer in the area which competed with the Association's dealers, the effect of which acquisition might be substantially to lessen competition or to tend to create a monopoly in violation of § 7 of the Clayton Act.3 The chief defense set up by the Association was that, because of its being a cooperative composed exclusively of dairy farmers, § 6 of the Clayton Act4 and §§ 1 and 2 of the Capper-Volstead Act5 completely exempted and immunized it from the antitrust laws with respect to the charges made in the Government's complaint. The District Court concluded after arguments that
2
'an agricultural cooperative is entirely exempt from the provisions of the antitrust laws, both as to its very existence as well as to all of its activities, provided it does not enter into conspiracies or combinations with persons who are not producers of agricultural commodities.' 167 F.Supp. 45, 52.
3
Accordingly the court dismissed the Sherman Act § 2 monopolization charge, where the Association was not alleged to have acted in combination with others, but upheld the right of the Government to go to trial on the Sherman Act § 3 and Clayton Act § 7 charges because they involved alleged activities with the owners of Embassy and other persons who were not agricultural producers. After trial the court found for the United States on the latter two charges and entered a decree ordering the Association to divest itself within a reasonable time of all assets acquired from Embassy and to cancel all contracts ancillary to the acquisition. 167 F.Supp. 799; 168 F.Supp. 880. The court refused to grant additional relief the United States asked for. It is from this refusal and the dismissal of its Sherman Act § 2 monopolization charge that the Government appealed directly to this Court under the Expediting Act.6 The Association similarly appealed to review the judgments against it on the Sherman Act § 3 charge and the Clayton Act § 7 charge. We noted probable jurisdiction, 360 U.S. 927, 79 S.Ct. 1447, 1450, 3 L.Ed.2d 1541, and treat both appeals in this opinion.
4
The Association's chief argument for antitrust exemption is based on § 2 of the Capper-Volstead Act, which authorizes the Secretary of Agriculture to issue a cease-and-desist order upon a finding that a cooperative has monopolized or restrained trade to such an extent that the price of an agricultural commodity has been 'unduly enhanced.'7 The contention is that this provision was intended to give the Secretary of Agriculture primary jurisdiction, and thereby exclude any prosecutions at all under the Sherman Act. This Court unequivocally rejected the same contention in United States v. Borden Co., 308 U.S. 188, 206, 60 S.Ct. 182, 191, 84 L.Ed. 181, after full consideration of the same legislative history that we are now asked to review again. We adhere to the reasoning and holding of the Borden opinion on this point.
5
The Association also argues that without regard to § 2 of the Capper-Volstead Act, § 1 of that Act and § 6 of the Clayton Act demonstrate a purpose wholly to exempt agricultural associations from the antitrust laws. In the Borden case this Court held that neither § 6 of the Clayton Act nor the Capper-Volstead Act granted immunity from prosecution for the combination of a co-operative and others to restrain trade there charged as a violation of § 1 of the Sherman Act. Although the Court was not confronted with charges under § 2 of the Sherman Act in that case we do not believe that Congress intended to immunize cooperatives engaged in competition-stifling practices from prosecution under the antimonopolization provisions of § 2 of the Sherman Act, while making them responsible for such practices as violations of the antitrade-restraint provisions of §§ 1 and 3 of that Act. These sections closely overlap, and the same kind of predatory practices may show violations of all.8 The reasons underlying the Court's holding in the Borden case that the cooperative there was not completely exempt under § 1 apply equally well to §§ 2 and 3. The Clayton and Capper-Volstead Acts, construed in the light of their background, do not lend themselves to such an incongruous immunity-distinction between the sections as that urged here.
6
In the early 1900's, when agricultural cooperatives were growing in effectiveness, there was widespread concern because the mere organization of farmers for mutual help was often considered to be a violation of the antitrust laws. Some state courts had sustained antitrust charges against agricultural cooperatives,9 and as a result eventually all the States passed Acts authorizing their existence.10 It was to bar such prosecutions by the Federal Government as to interstate transactions that Congress in 1914 inserted § 6 in the Clayton Act exempting agricultural organizations, along with labor unions, from the antitrust laws. This Court has held that the provisions of that section, set out below,11 relating to labor unions do not manifest 'a congressional purpose wholly to exempt' them from the antitrust laws,12 and neither the language nor the legislative history of the section indicates a congressional purpose to grant any broader immunity to agricultural cooperatives. The language shows no more than a purpose to allow farmers to act together in cooperative associations without the associations as such being 'held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws,' as they otherwise might have been. This interpretation is supported by the House and Senate Committee Reports on the bill.13 Thus, the full effect of § 6 is that a group of farmers acting together as a single entity in an association cannot be restrained 'from lawfully carrying out the legitimate objects thereof' (emphasis supplied), but the section cannot support the contention that it gives such an entity full freedom to engage in predatory trade practices at will. See United States v. King, D.C., 229 F. 275; D.C., 250 F. 908, 910. Cf. United States v. Borden Co., 308 U.S. 188, 203—205, 60 S.Ct. 182, 190—191, 84 L.Ed. 181.
7
The Capper-Volstead Act of 1922 extended § 6 of the Clayton Act exemption to capital stock agricultural cooperatives which had not previously been covered by that section.14 Section 1 of the Capper-Volstead Act also provided that among 'the legitimate objects' of farmer organizations were 'collectively processing, preparing for market, handling, and marketing' products through common marketing agencies and the making of 'necessary contracts and agreements to effect such purposes.' We believe it is reasonably clear from the very language of the Capper-Volstead Act, as it was in § 6 of the Clayton Act, that the general philosophy of both was simply that individual farmers should be given, through agricultural cooperatives acting as entities, the same unified competitive advantage—and responsibility—available to businessmen acting through corporations as entities. As the House Report on the Capper-Volstead Act said:
8
'Instead of granting a class privilege, it aims to equalize existing privileges by changing the law applicable to the ordinary business corporations so the farmers can take advantage of it.'15
9
This indicates a purpose to make it possible for farmer-producers to organize together, set association policy, fix prices at which their cooperative will sell their produce, and otherwise carry on like a business corporation without thereby violating the antitrust laws. It does not suggest a congressional desire to vest cooperatives with unrestricted power to restrain trade or to achieve monopoly by preying on independent producers, processors or dealers intent on carrying on their own businesses in their own legitimate way. In the Senate hearings on the Capper-Volstead Act the Secretary of Agriculture, who was given a large measure of authority under this Act, and the Solicitor of his Department, testified that the Act would not authorize cooperatives to engage in predatory practices in violation of the Sherman Act.16 And the House Committee Report assured the Congress that:
10
'In the event that associations authorized by this bill shall do anything forbidden by the Sherman Antitrust Act, they will be subject to the penalties imposed by that law.'17
11
Although contrary inferences could be drawn from some parts of the legislative history, we are satisfied that the part of the House Committee Report just quoted correctly interpreted the Capper-Volstead Act, and that the Act did not leave co-operatives free to engage in practices against other persons in order to monopolize trade, or restrain and suppress competition with the cooperative. Therefore, we turn now to a consideration of the District Court's judgments in this case.
12
Sherman Act § 2 Dismissal.—The complaint charging monopolization alleged that the Association had '(t)hreatened and undertaken diverse actions to induce or compel dealers to purchase milk from the defendant (Association), and induced and assisted others to acquire dealer outlets' which were not purchasing milk from the Association. It also alleged that the Association '(e)xcluded, eliminated, and attempted to eliminate others, including producers and producers' agricultural cooperative associations not affiliated with defendant, from supplying milk to dealers.' Supporting this charge the statement of particulars listed a number of instances in which the Association attempted to interfere with truck shipments of nonmembers' milk, and an attempt during 1939—1942 to induce a Washington dairy to switch its non-Association producers to the Baltimore market. The statement of particulars also included charges that the Association engaged in a boycott of a feed and farm supply store to compel its owner, who also owned an Alexandria dairy, to purchase milk from the Association, and that it compelled a dairy to buy its milk by using the leverage of that dairy's indebtedness to the Association. We are satisfied that the allegations of the complaint and the statement of particulars, only a part of which we have set out, charge anticompetitive activities which are so far outside the 'legitimate objects' of a cooperative that, if proved, they would constitute clear violations of § 2 of the Sherman Act by this Association, a fact, indeed, which the Association does not really dispute if it is subject to liability under this section. It was error for the District Court to dismiss the § 2 charge.
13
Clayton Act § 7 Judgment.—In 1954 the Association purchased the assets of Embassy Dairy in Washington. The complaint charged that this acquisition constituted a violation of § 7 of the Clayton Act, which prohibits a corporation engaged in commerce from acquiring all or any part of the assets of another corporation so engaged where the effect may be to tend to create a monopoly or substantially lessen competition. A trial was had before the District Court on this charge and the court found that the motive for and result of the Embassy acquisition was to: eliminate the largest purchaser of non-Association milk in the area; force former Embassy non-Association producers either to join the Association or to ship to Baltimore, thus both bringing more milk to the Association and diverting competing milk to another market; eliminate the Association's prime competitive dealer from government contract milk bidding; and increase the Association's control of the Washington market. On these findings, amply supported by evidence, the District Court could properly conclude, as it did, that the Embassy acquisition tended to create a monopoly or substantially lessen competition, and was therefore a violation of § 7.18
14
This leaves the contention that the acquisition of Embassy was protected by the last paragraph of § 7 of the Clayton Act which in pertinent part provides that:
15
'Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by * * * the Secretary of Agriculture under any statutory provision vesting such power in such * * * Secretary * * *.'19
16
The Association contends that its purchase of Embassy Dairy was 'consummated pursuant to authority given by * * * the Secretary of Agriculture.' The trouble with this contention is that there is no 'statutory provision' that vests power in the Secretary of Agriculture to approve a transaction and thereby exempt a cooperative from the anti-trust laws under the circumstances of this case. While there is a 'statutory provision' vesting power in the Secretary of Agriculture to enter into agricultural marketing agreements which 'shall be deemed to be lawful' and 'not * * * be in violation of any of the antitrust laws of the United States,' no such marketing agreement is involved here.20
17
Sherman Act § 3 Judgment.—The complaint charged that the Association, Embassy and others had violated § 3 of the Sherman Act by engaging in a combination and conspiracy to eliminate and foreclose competition with the Association and with dealers purchasing milk from the Association. The District Court, with the consent of the parties, considered and decided this § 3 charge on the evidence offered on the § 7 Clayton Act charge. A crucial element in this charge of concerted action was the Association's purchase of Embassy's assets under a contract containing an agreement by the former owners of Embassy not to compete with the Association in the milk business in the Washington area for 10 years, and to attempt to have all former Embassy producers either join the Association or ship their milk to the Baltimore market. Also, particularly pertinent to the charge of a § 3 combination, was evidence showing a long and spirited business rivalry between the Association and its producers on the one hand and Embassy and its independent producers on the other. The Association had been 'unhappy' about Embassy's price cutting and its generally 'disruptive' competitive practices that had made Embassy a 'thorn in the side of the Association for many years.' There was also evidence emphasized by the court in its Clayton Act § 7 opinion that 'the price paid by the Association for the transfer was far in excess of the actual and intrinsic value of the property purchased.' 167 F.Supp. 799, 806. After readopting its Clayton Act § 7 findings regarding the anticompetitive motives and results of the Embassy acquisition, see 80 S.Ct. at page 854, supra, the District Court made the three following additional findings on the Sherman Act § 3 charge: (1) 'that the result of the transaction complained of was a foreclosure of competition,' (2) 'that the transaction complained of was entered into with the intent and purpose of restraining trade,'21 and (3) 'that an unreasonable restraint of trade, violative of the Sherman Act, has resulted from the acquisition of Embassy Dairy by the defendant (Association).' (168 F.Supp. 881.) On the basis of its findings and opinion the court then concluded that 'the transaction involving the acquisition of Embassy Dairy by the defendant constitutes a violation of Section 3 of the Sherman Act.' 168 F.Supp. 880, 881, 882.
18
The facts found by the court show a classic combination or conspiracy to restrain trade, unless, as the Association contends, 'the transaction involving the acquisition of Embassy' upon which the judgment against it was based is protected against Sherman Act prosecutions by the Capper-Volstead Act's provisions that cooperatives can lawfully make 'the necessary contracts and agreements' to process, handle and market milk for their producer-members. The Embassy assets the Association acquired are useful in processing and marketing milk, and we may assume, as it is contended, that their purchase simply for business use, without more, often would be permitted and would be lawful under the Capper-Volstead Act. But even lawful contracts and business activities may help to make up a pattern of conduct unlawful under the Sherman Act.22 The contract of purchase here, viewed in the context of all the evidence and findings, was not one made merely to advance the Association's own permissible processing and marketing business; it was entered into by both parties, according to the court's findings as we understand them, because of its usefulness as a weapon to restrain and suppress competitors and competition in the Washington metropolitan area. We hold that the privilege the Capper- Volstead Act grants producers to conduct their affairs collectively does not include a privilege to combine with competitors23 so as to use a monopoly position as a lever further to suppress competition by and among independent producers and processors.
19
Adequacy of Relief.—The Government's appeal in this case is directed in part at the relief granted it by the District Court. The judgment requires the Association to 'dispose of as a unit and as a going dairy business all (Embassy) assets * * * tangible or intangible, which it acquired on July 26, 1954, and replacements therefor,' and to do so in 'good faith' to preserve the business in 'as good condition as possible.' The District Court refused to go further and require the Association to dispose of 'all assets used' in the Embassy operation, to prohibit the Association from operating as a dealer in the Washington market for a period after divestiture, to prevent the future acquisition of distributors without prior approval of the Government, and to grant the Government general 'visitation rights' as to the Association's records and employees. The District Court was of the view that the Government would either be adequately protected as to these matters by the 'good faith' requirement or by subsequent orders of the District Court when the occasion necessitated. The formulation of decrees is largely left to the discretion of the trial court, and we see no reason to reject the judgment of the District Court that the relief it granted will be effective in undoing the violation it found in view of the fact that it also retains the cause for future orders, including the right of visitation if deemed appropriate. See Associated Press v. United States, 326 U.S. 1, 22—23, 65 S.Ct. 1416, 1425—1426, 89 L.Ed. 2013.
20
Accordingly, the judgment of the District Court finding violations of § 7 of the Clayton Act and § 3 of the Sherman Act is affirmed, and its dismissal of the charges under § 2 of the Sherman Act is reversed and remanded for a trial.
21
Affirmed in part, reversed and remanded in part.
1
Sherman Act § 2: 'Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding fifty thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court.' 26 Stat. 209 (1890), as amended, 15 U.S.C. § 2, 15 U.S.C.A. § 2.
2
Sherman Act § 3: 'Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia * * * or between the District of Columbia and any State or States or foreign nations, is declared illegal. * * *' 26 Stat. 209 (1890), as amended, 15 U.S.C. § 3, 15 U.S.C.A. § 3. Section 1 declares the same prohibition as to commerce 'among the several States.' 15 U.S.C.A. § 1. Although there was also a charge against the Association under § 1 there was no judgment against it on this section, and that charge is no longer relevant here.
3
Clayton Act § 7: 'No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.
* * * * *
'Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by the * * * (independent regulatory commissions) or the Secretary of Agriculture under any statutory provision vesting such power in such Commission, Secretary, or Board.' 38 Stat. 731 (1914), 15 U.S.C. § 18, 15 U.S.C.A. § 18.
4
38 Stat. 731 (1914), as amended, 15 U.S.C. § 17, 15 U.S.C.A. § 17, set forth in note 11, infra.
5
Capper-Volstead Act § 1: 'Persons engaged in the production of agricultural products as farmers, planters, ranchmen, dairymen, nut or fruit growers may act together in associations, corporate or otherwise, with or without capital stock, in collectively processing, preparing for market, handling, and marketing in interstate and foreign commerce, such products of persons so engaged. Such associations may have marketing agencies in common; and such associations and their members may make the necessary contracts and agreements to effect such purposes * * *.' 42 Stat. 388 (1922), 7 U.S.C. § 291, 7 U.S.C.A. § 291. Section 2 is set forth in note 7, infra.
6
32 Stat. 823 (1903), as amended, 15 U.S.C. § 29, 15 U.S.C.A. § 29.
7
Capper-Volstead Act § 2: 'If the Secretary of Agriculture shall have reason to believe that any such association monopolizes or restrains trade in interstate or foreign commerce to such an extent that the price of any agricultural product is unduly enhanced by reason thereof (after a 'show cause' hearing he may direct) such association * * * to cease and desist from monopolization or restraint of trade. * * *' This order may be enforced by the Attorney General if not obeyed by the association. 42 Stat. 388 (1922), 7 U.S.C. § 292, 7 U.S.C.A. § 292.
8
Klor's, Inc., v. Broadway-Hale Stores, Inc., 359 U.S. 207, 211, 79 S.Ct. 705, 708, 3 L.Ed.2d 741; United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 226, note 59, 60 S.Ct. 811, 846, 84 L.Ed. 1129; Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 59—60, 31 S.Ct. 502, 515, 55 L.Ed. 619.
9
See, e.g., Reeves v. Decorah Farmers' Cooperative Society, 1913, 160 Iowa 194, 140 N.W. 844, 44 L.R.A.,N.S., 1104; Burns v. Wray Farmers' Grain Co., 1918, 65 Colo. 425, 176 P. 487, 11 A.L.R. 1179; Ford v. Chicago Milk Shippers' Ass'n, 1895, 155 Ill. 166, 39 N.E. 651, 27 L.R.A. 298. Contra, Burley Tobacco Society v. Gillaspy, 1912, 51 Ind.App. 583, 100 N.E. 89. Hanna, Antitrust Immunities of Cooperative Associations, 13 Law and Contemp.Prob. 488—490 (1948); Hanna, Cooperative Associations and the Public, 29 Mich.L.Rev. 148, 163—165 (1930); Jensen, The Bill of Rights of U.S. Cooperative Agriculture, 20 Rocky Mt.L.Rev. 181, 184—189 (1948). See generally Att'y Gen. Nat'l Comm. Antitrust Rep. (1955), 306—313; Note, 57 Mich.L.Rev. 921 (1959).
10
See statutes collected in Jensen, The Bill of Rights of U.S. Co-operative Agriculture, 20 Rocky Mt.L.Rev. 181, 191, n. 29 (1948); Note, 38 Harv.L.Rev. 87, 89, n. 17 (1924). See Connolly v. Union Sewer Pipe Co., 1902, 184 U.S. 540, 556—558, 22 S.Ct. 431, 438—439, 46 L.Ed. 679, holding Illinois exemption statute unconstitutional, and see dissent per McKenna, J., 184 U.S. at pages 565, 571, 22 S.Ct. at pages 442, 444, overruled by Tigner v. State of Texas, 1940, 310 U.S. 141, 60 S.Ct. 879, 84 L.Ed. 1124.
11
Clayton Act § 6: 'The labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.' 38 Stat. 731 (1914), 15 U.S.C. § 17, 15 U.S.C.A. § 17.
12
Allen Bradley Co. v. Local Union No. 3, 325 U.S. 797, 805, 65 S.Ct. 1533, 1538, 89 L.Ed. 1939; Duplex Printing Press Co. v. Deering, 254 U.S. 443, 468—469, 41 S.Ct. 172, 177, 65 L.Ed. 349. Cf. United States v. Hutcheson, 312 U.S. 219, 61 S.Ct. 463, 85 L.Ed. 788.
13
'In the light of previous decisions of the courts and in view of a possible interpretation of the law which would empower the courts to order the dissolution of such organizations and associations, your committee feels that all doubt should be removed as to the legality of the existence and operations of these organizations and associations, and that the law should not be construed in such a way as to authorize their dissolution by the courts under the antitrust laws or to forbid the individual members of such associations from carrying out the legitimate and lawful objects of their associations.' (Emphasis supplied.) H.R.Rep. No. 627, 63d Cong., 2d Sess. 16; S.Rep. No. 698, 63d Cong., 2d Sess. 12.
14
Some Congressmen opposed § 6 of the Clayton Act because it did not include agricultural associations with capital stock. 'Under the provisions of section 7 (now § 6) of this bill farmers' organizations with capital stock, organized for profit, would be left subject to the provisions of the Sherman antitrust law.' H.R.Rep. No. 627, Pt. 4, 63d Cong., 2d Sess. 4. And see id., Pt. 3, 10.
15
H.R.Rep. No. 24, 67th Cong., 1st Sess. 2.
16
The Solicitor of the Department of Agriculture testified that it was his 'opinion that if the farmers want to create monopolies or want to engage in unfair practices in commerce, this bill certainly would not give them the right to do it, and they would have to get another bill. * * * (T)hese organizations would not be allowed to adopt any illegal means or methods of conducting their business,' and if they 'engaged in some practice that prevented other people from selling their milk * * * they would be subject to the antitrust laws. * * * It does not say * * * that they may adopt any unfair methods of competition.' The Secretary of Agriculture testified to the same effect. Hearings before a Subcommittee of the Senate Judiciary Committee on H.R. 2373, 67th Cong., 1st Sess. 203, 204, 205.
17
Op. cit., supra, note 15, at 3.
18
167 F.Supp. 799, 807—808.
19
See note 3, supra.
20
Agricultural Adjustment Act, § 8b, as amended, 7 U.S.C. § 608b, 7 U.S.C.A. § 608b. United States v. Borden Co., 308 U.S. 188, 198—202, 60 S.Ct. 182, 188—190, 84 L.Ed. 181; United States v. Rock Royal Co-operative, Inc., 307 U.S. 533, 560, 59 S.Ct. 993, 1006, 83 L.Ed. 1446; United States v. Maryland & Virginia Milk Producers' Ass'n, Inc., D.C., 90 F.Supp. 681, 688.
21
See United States v. Griffith, 334 U.S. 100, 105, 68 S.Ct. 941, 944, 92 L.Ed. 1236. Cf. United States v. Columbia Steel Co., 334 U.S. 495, 525, 68 S.Ct. 1107, 1123, 92 L.Ed. 1533; United States v. Paramount Pictures, Inc., 334 U.S. 131, 173, 68 S.Ct. 915, 936, 92 L.Ed. 1260.
22
See Schine Chain Theatres, Inc., v. United States, 334 U.S. 110, 119, 68 S.Ct. 947, 952, 92 L.Ed. 1245.
23
See United States v. Maryland Cooperative Milk Producers, Inc., D.C., 145 F.Supp. 151.
| 78
|
362 U.S. 474
80 S.Ct. 840
4 L.Ed.2d 892
Howard L. NOSTRAND and Max Savelle, Appellants,v.Herbert LITTLE et al.
No. 342.
Argued March 30, 31, 1960.
Decided May 2, 1960.
Messrs. Francis Hoague and Solie M. Ringold, Seattle, Wash., for appellants.
Mr. Herbert H. Fuller, Olympia, Wash., for appellee.
PER CURIAM.
1
Washington requires every public employee to subscribe to an oath that he is 'not a subversive person or a member of the Communist Party or any subversive organization, foreign or otherwise, which engages in or advocates, abets, advises, or teaches the overthrow, destruction or alteration of the constitutional form of the government of the United States, or of the State of Washington, or of any political subdivision of either of them, by revolution, force or violence; * * *.' Refusal so to do 'on any ground(s) shall be cause for immediate termination of such employee's employment.'1
2
Appellants brought this declaratory judgment action claiming the Act to be violative of due process as well as other provisions of the Federal Constitution. One of the claims is that no hearing is afforded at which the employee can explain or defend his refusal to take the oath. The Supreme Court of Washington did not pass on this point. The Attorney General suggests in his brief that prior to any decision thereon here, 'the Supreme Court of Washington should be first given the opportunity to consider and pass upon' it. Moreover, appellants point to a recent case of the Washington Supreme Court, City of Seattle v. Ross, 1959, 54 Wash.2d 655, 344 P.2d 216, as analogous. There that court overturned an ordinance because it established a presumption of guilt without affording the accused an opportunity of a hearing to rebut the same. In the light of these circumstances we cannot say how the Supreme Court of Washington would construe this statute on the hearing point.
3
The declaratory nature of the case, the fact that the State's statute here under attack supplements previous statutory provisions raising questions concerning the applicability of the latter, and the principle of comity that should be afforded the State with regard to the interpretation of its own laws, bring us to the conclusion that we must remand the case for further consideration. Cf. Williams v. State of Georgia, 1955, 349 U.S. 375, 75 S.Ct. 814, 99 L.Ed. 1161.
4
Vacated and remanded.
5
Mr. Justice DOUGLAS, with whom Mr. Justice BLACK concurs, dissenting.
6
I think the remand in the present case is a useless act. The Supreme Court of Washington has cleared up any ambiguity that could be relevant to the issues posed here.
7
The present statute says that the refusal to take the oath 'on any grounds' shall be cause for 'immediate termination' of employment. The Supreme Court of Washington has held that the oath stating whether the employee is or is not a member of a 'subversive organization' includes 'the element of scienter.'1 Yet neither knowing members nor innocent members are excused from taking the oath. A hearing 'at which the employee can explain or defend his refusal to take the oath,' to use the words of the Court, would seem therefore to serve no function under this type of statute. If the present statute is taken as it is written, I think this case is ripe for decision.
8
City of Seattle v. Ross, 54 Wash.2d 655, 344 P.2d 216, 217, does not seem to me to be relevant. The ordinance there involved read:
9
'It is unlawful for anyone not lawfully authorized to frequent, enter, be in, or be found in, any place where narcotics, narcotic drugs or their derivatives are unlawfully used, kept or disposed of.'
10
The defendant in question entered the premises innocently and lawfully without knowledge of the presence of narcotics. He was convicted, the trial court overruling the defense of innocence.
11
The Supreme Court of Washington reversed the judgment of conviction, holding the ordinance was unconstitutional as applied. The court said, 54 Wash.2d at page 658, 344 P.2d at page 218:
12
'The respondent would have us rewrite the statute to exclude persons upon the premises for lawful purposes, as well as those who are authorized or commissioned to go there. This the court cannot do. Where the language of a statute is plain, unambiguous, and well understood according to its natural and ordinary sense and meaning, the statute itself furnishes a rule of construction beyond which the court cannot go. Parkhurst v. City of Everett, 51 Wash.2d 292, 318 P.2d 327. The trial court had no difficulty in discerning the meaning of the words used in this ordinance. A person 'lawfully authorized,' the court decided and we agree, is a person carrying some express authority to go upon the premises, as a law enforcement officer, narcotic agent, or the like, and not one who goes upon some lawful business but without express authority.' (Italics added.) A hearing under the present statute would obviously be important to a determination of the existence of 'scienter' for prosecution of one who took the oath for perjury. But such a hearing is not germane to the question whether under this statute a teacher has the right to refuse to take the oath that is tendered. The command of the statute is clear: refusal to take the oath 'on any grounds' is cause for discharge. That command poses the critical issue for us. A remand for a determination of whether there will be a hearing therefore seems to me to be a remand for an irrelevancy in the setting of this case.
1
Chapter 377, Laws of Washington 1955. The pertinent part of that statute reads:
'Sec. 1. Every person and every board, commission, council, department, court or other agency of the state of Washington or any political subdivision thereof, who or which appoints or employs or supervises in any manner the appointment or employment of public officials or employees * * * shall require every employee * * * to state under oath whether or not he or she is a member of the communist party or other subversive organization, and refusal to answer on any grounds shall be cause for immediate termination of such employee's employment * * *.'
The Washington Supreme Court construed this statute as requiring the element of scienter.
1
The oath which was prepared by the Washington Attorney General and tendered to appellants, however, contains no qualifications. It reads, in material part, as follows:
'(2) That I am not a subversive person or a member of the Communist Party or any subversive organization, foreign or otherwise, which engages in or advocates, abets, advises, or teaches the overthrow, destruction or alteration of the constitutional form of the government of the United States, or of the State of Washington, or of any political subdivision of either of them, by revolution, force or violence;
'That this statement is voluntarily made by me, pursuant to the provisions of Chapter 377, Laws of 1955, with full knowledge that the same is subject to the penalties of perjury.'
| 23
|
362 U.S. 479
80 S.Ct. 838
4 L.Ed.2d 896
COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, and Local
No. 4372, Communications Workers of America,
AFL-CIO, Petitioners,
v.
NATIONAL LABOR RELATIONS BOARD.
No. 418.
Argued April 18, 1960.
Decided May 2, 1960.
Mr. J. R. Goldthwaite, Jr., Atlanta, Ga., for petitioners.
Mr. Dominick L. Manoli, Washington, D.C., for respondent.
PER CURIAM.
1
The Board found that the petitioner unions, during the course of a strike, coerced employees of the Ohio Consolidated Telephone Company in the exercise of their right to refrain from or discontinue participation therein, in violation of § 8(b)(1)(A) of the National Labor Relations Act.1 It entered an order requiring the unions to cease and desist 'from in any manner restraining or coercing employees of Ohio Consolidated Telephone Company or any other employer in the exercise of the rights guaranteed in Section 7 of the Act.' (Emphasis supplied.) The Court of Appeals enforced the order after deleting the words 'in any manner.' (266 F.2d 823.) Because of an asserted conflict with the decision of the Court of Appeals for the Fifth Circuit in National Labor Relations Board v. Local 926, Int. Union of Operating Engrs., 267 F.2d 418, 421, we brought the case here. 361 U.S. 893, 80 S.Ct. 199, 4 L.Ed.2d 150. The only challenge here to the order as so amended is to its validity as extended to 'any other employer,' as well as the telephone company.
2
Petitioners were not found to have engaged in violations against the employees of any employer other than Ohio Consolidated and we find neither justification nor necessity for extending the coverage of the order generally by the inclusion therein of the phrase 'any other employer.' 'It would seem * * * clear that the authority conferred on the Board to restrain the practice which it has found * * * to have (been) committed is not an authority to restrain generally all other unlawful practices which it has neither found to have been pursued nor persuasively to be related to the proven unlawful conduct.' National Labor Relations Board v. Express Pub. Co., 1941, 312 U.S. 426, 433, 61 S.Ct. 693, 698, 85 L.Ed. 930. See also May Dept. Stores Co. v. National Labor Relations Board, 1945, 326 U.S. 376, 66 S.Ct. 203, 90 L.Ed. 145. That loaned employees of other affiliated companies were included within the ambit of petitioners' coercive acts plainly does not evidence such a generalized scheme against all telephone employers, for it was only the employment of such employees at the struck plant that brought them within the scope of the unions' activities.2 We therefore conclude that the inclusion in the order of the words 'or any other employer' was unwarranted and the order is modified by striking the same therefrom. As so modified, the judgment is affirmed.
3
Modified and affirmed.
1
That section reads in pertinent part:
Sec. 8(b). 'It shall be an unfair labor practice for a labor organization or its agents—
'(1) to restrain or coerce (A) employees in the exercise of the rights guaranteed in section 7 * * *.' 61 Stat. 141, 29 U.S.C.A. § 158(b).
Section 7 provides:
'Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3).' 61 Stat. 140, 29 U.S.C.A. § 157.
2
In the Court of Appeals, the Board sought to justify the breadth of its order by relying on two compromise settlement agreements involving activities of the International and other locals against other employers. Neither the opinion of the Board nor that of the Court of Appeals in this case indicates that any reliance was placed on such agreements, and in this Court the Board disclaims any such reliance.
| 67
|
362 U.S. 511
80 S.Ct. 945
4 L.Ed.2d 921
Max SCHAFFER and Norman, Schaffer, Petitioners,v.UNITED STATES of America. Hyman KARP and Benjamin T. Marco, Petitioners, v. UNITED STATES of America.
Nos. 111, 122.
Argued March 24, 1960.
Decided May 16, 1960.
Rehearing Denied June 27, 1960.
See 363 U.S. 858, 80 S.Ct. 1605.
Mr. Jacob Kossman, Philadelphia, Pa., for Max Schaffer and Norman Schaffer, petitioners.
Mr. Harris B. Steinberg, New York City, for Hyman Karp and Benjamin T. Marco, petitioners.
Mr. John F. Davis, Washington, D.C., for respondent.
Mr. Justice CLARK delivered the opinion of the Court.
1
Involved here are questions concerning joinder of defendants under Rule 8(b) of the Federal Rules of Criminal Procedure, 18 U.S.C.A.,1 and whether shipments of stolen goods in interstate commerce may be aggregated as to value in order to meet the statutory minimum of $5,000, under 18 U.S.C. § 2314, 18 U.S.C.A. § 2314.2
2
The indictment charged transportation in interstate commerce of goods known to have been stolen and having a value in excess of $5,000. In contained three substantive counts. Count 1 charged the two Schaffers (petitioners in No. 111) and the three Stracuzzas (defendants below, who either pleaded guilty or had the charges against them nolle prossed at trial) with transporting stolen ladies' and children's wearing apparel from New York to Pennsylvania. Count 2 charged petitioner Marco and the Stracuzzas with a similar movement of stolen goods from New York to West Virginia. Count 3 charged petitioner Karp and the Stracuzzas with like shipments from New York to Massachusetts. The fourth and final count of the indictment charged all of these parties with a conspiracy to commit the substantive offenses charged in the first three counts. The petitioners here were tried on the indictment simultaneously in a single trial. On motion of petitioners for acquittal at the close of the Government's case, the court dismissed the conspiracy count for failure of proof. This motion was denied, however, as to the substantive counts, the court finding that no prejudice would result from the joint trial. Upon submission of the substantive counts to the jury on a detailed charge, each petitioner was found guilty and thereafter fined and sentenced to prison. The Court of Appeals affirmed the convictions, likewise finding that no prejudice existed by reason of the joint trial. 266 F.2d 435. We granted certiorari. 361 U.S. 809, 80 S.Ct. 58, 4 L.Ed.2d 58.
3
The allegations of the indictment having met the explicit provisions of Rule 8(b) as to joinder of defendants, we cannot find clearly erroneous the findings of the trial court and the Court of Appeals that no prejudice resulted from the joint trial. As to the requirements of value, we hold that the shipments to a single defendant may be aggregated. The judgments are therefore affirmed.
4
We first consider the question of joinder of defendants under Rule 8(b) of the Federal Rules of Criminal Procedure. It is clear that the initial joinder of the petitioners was permissible under that Rule, which allows the joinder of defendants 'in the same indictment * * * if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses.' It cannot be denied that the petitioners were so charged in the indictment. The problem remaining is whether, after dismissal of the conspiracy count before submission of the cases to the jury, a severance should have been ordered under Rule 143 of the Federal Rules of Criminal Procedure. This Rule requires a separate trial if 'it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together * * *.' Under the circumstances here, we think there was no such prejudice.
5
It is admitted that the three Stracuzzas were the common center of the scheme to transport the stolen goods. The four petitioners here participated in some steps of the transactions in the stolen goods, although each was involved with separate interstate shipments. The separate substantive charges of the indictment employed almost identical language and alleged violations of the same criminal statute during the same period and in the same manner. This made proof of the over-all operation of the scheme competent as to all counts. The variations in the proof related to the specific shipments proven against each petitioner. This proof was related to each petitioner separately and proven as to each by different witnesses. It included entirely separate invoices and other exhibits, all of which were first clearly identified as applying only to a specific petitioner and were so received and shown to the jury under painstaking instructions to that effect. In short, the proof was carefully compartmentalized as to each petitioner. The propriety of the joinder prior to the failure of proof of conspiracy was not assailed.4 When the Government rested, however, the petitioners filed their motion for dismissal and it was sustained as to the conspiracy count. The petitioners then pressed for acquittal on the remaining counts, and the court decided that the evidence was sufficient on the substantive counts. The case was submitted to the jury on each of these counts, and under a charge which was characterized by petitioners' counsel as being 'extremely fair.' This charge meticulously set out separately the evidence as to each of the petitioners and admonished the jury that they were 'not to take into consideration any proof against one defendant and apply it by inference or otherwise to any other defendant.'
6
Petitioners contend that prejudice would nevertheless be implicit in a continuation of the joint trial after dismissal of the conspiracy count. They say that the resulting prejudice could not be cured by any cautionary instructions, and that therefore the trial judge was left with no discretion. Petitioners overlook, however, that the joinder was authorized under Rule 8(b) and that subsequent severance was controlled by Rule 14, which provides for separate trials where 'it appears that a defendant * * * is prejudiced * * * by such joinder for trial * * *.' It appears that not only was no prejudice shown, but both the trial court and the Court of Appeals affirmatively found that none was present. We cannot say to the contrary on this record. Nor can we fashion a hard-and-fast formula that, when a conspiracy count fails, joinder is error as a matter of law. We do emphasize, however, that, in such a situation, the trial judge has a continuing duty at all stages of the trial to grant a severance if prejudice does appear. And where, as here, the charge which originally justified joinder turns out to lack the support of sufficient evidence, a trial judge should be particularly sensitive to the possibility of such prejudice. However, the petitioners here not only failed to show any prejudice that would call Rule 14 into operation but even failed to request a new trial. Instead they relied entirely on their motions for acquittal. Moreover, the judge was acutely aware of the possibility of prejudice and was strict in his charge—not only as to the testimony the jury was not to consider, but also as to that evidence which was available in the consideration of the guilt of each petitioner separately under the respective substantive counts. The terms of Rule 8(b) having been met and no prejudice under Rule 14 having been shown, there was no misjoinder.
7
This case is not like United States v. Dietrich,5 where a single-count indictment against two defendants charged only a single conspiracy offense, or McElroy v. United States,6 where no count linked all the defendants and all the offenses. Neither is Kotteakos v. United States,7 on which the petitioners place their chief reliance, apposite. That case turned on the harmless-error rule, and its application to a serious variance between the indictment and the proof. There the Court found 'it highly probable that the error had substantial and injurious effect.' 328 U.S. at page 776, 66 S.Ct. at page 1253. The dissent agreed that the test of injury resulting from joinder 'depends on the special circumstances of each case,' id., 328 U.S. at page 777, 66 S.Ct. at page 1254; but it reasoned that the possibility was 'nonexistent' that evidence relating to one defendant would be used to convict another, and declared that the 'dangers which petitioners conjure up are abstract ones.' Id., 328 U.S. at page 778, 66 S.Ct. at page 1254. The harmless-error rule, which was the central issue in Kotteakos, is not even reached in the instant case, since here the joinder was proper under Bule 8(b) and no error was shown.
8
Petitioners also contend that, since the individual shipments with which they were connected amounted to less than $5,000 each, the requirements of the statute as to value were not present. However, it appeared at the trial that the total merchandise shipped to each petitioner during the period charged in the several counts was over $5,000, even though each individual shipment was less. The trial court permitted the aggregation of the value of these shipments to meet the statutory limit,8 and it is this that is claimed to be error. A sensible reading of the statute properly attributes to Congress the view that where the shipments have enough relationship so that they may properly be charged as a single offense, their value may be aggregated. The Act defines 'value' in terms of that aggregate.9 The legislative history makes clear that the value may be computed on a 'series of transactions.'10 It seems plain that the Stracuzzas and each of the petitioners were engaged in a series of transactions, and therefore there is no error on that phase of the case.11
9
Petitioners in No. 122 further contend that certain of the prosecutor's remarks in his summation to the jury were improper and prejudicial. We agree with the treatment of this issue by the Court of Appeals, and see no need for further elaboration.
10
The judgments are therefore affirmed. Affirmed.
11
Mr. Justice DOUGLAS, with whom THE CHIEF JUSTICE, Mr. Justice BLACK, and Mr. Justice BRENNAN concur, dissenting.
12
The indictment in these cases charged violations of 18 U.S.C. § 2314, 18 U.S.C.A. § 2314, for transporting in interstate commerce goods known to have been stolen1 and having a value in excess of $5,000.2
13
Counts 1, 2, and 3 were substantive counts. Count 1 charged the two Schaffers, petitioners in No. 111, together with the three Stracuzzas, with transporting stolen ladies' and children's wearing apparel from New York to Pennsylvania between May 15, 1953, and July 27, 1953.
14
Count 2 charged Marco, one of the petitioners in No. 122, and the Stracuzzas with a similar movement from New York to West Virginia from June 11, 1953, to July 27, 1953.
15
Count 3 charged Karp, the other petitioner in No. 122, with like shipments from New York to Massachusetts from May 21, 1953, to July 27, 1953.
16
Count 4 charged all the parties with a conspiracy to commit the substantive offenses.
17
Two of the Stracuzzas (who seemed to be the brains behind the various illegal transactions) pleaded guilty and received suspended sentences. The indictment against the third Stracuzza was disposed of nol. pros. The four present petitioners pleaded not guilty and were tried simultaneously in a single trial,3 one of the Stracuzzas being the principal witness for the Government.
18
At the close of the Government's case the court dismissed the conspiracy count4 for failure of proof. Indeed, it does not appear even arguable that there was evidence linking all petitioners with each other in one conspiracy. Over objection the court continued the joint trial on the remaining substantive counts, instructing the jury that the evidence against each defendant was to be considered separately, the proof against one not to be used against another.
19
It is clear that but for the conspiracy count the joinder of these petitioners for similar but unrelated crimes would have been in error. Rule 8(b) of the Federal Rules of Criminal Procedure allows joinder of defendants in the same indictment 'if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses.'5
20
The Court of Appeals, while conceding that it would have been clearly erroneous to try petitioners together were it not for the conspiracy count, concluded that no showing of prejudice had been established and that the District Court did not abuse its discretion in denying separate trials.
21
I take a different view. I believe that once the conspiracy count was dismissed, the court had before it the same problem as would be presented if the prosecution had sought to try before a single jury separate indictments against defendants who had been charged with like crimes but which were wholly unrelated to each other.
22
Rule 8(b)6 contemplates joinder of defendants in two types of situations—first, where they participate jointly in one 'act or transaction'; or second, where they participate 'in the same serious of acts or transactions constituting an offense or offenses.' These four petitioners did not participate in one act or transaction as evidenced by the fact that the proof of conspiracy utterly failed. The other acts or transactions charged were not in the same 'series,' within the meaning of Rule 8(b).
23
Mr. Justice Van Devanter, when circuit judge, in United States v. Dietrich, C.C., 126 F. 664, 670, said:
24
'Much can be said in support of a practice which, subject to a discretion invested in the court to enable it to do justice between the government and the accused, permits two or more defendants to be in separate counts of the same indictment severally charged with distinct and several offenses of the same class and grade, and subject to the same punishment, where the offenses appear to have been committed at the same time and place and to form parts of the same transaction. Under such circumstances the proof in respect to one offense would almost necessarily throw light upon the other or others, and the connection between them would frequently be so close that it would be difficult or impossible to separate the proof of one from the proof of the other or others.'
25
McElroy v. United States, 164 U.S. 76, 17 S.Ct. 31, 41 L.Ed. 355, decided long before the present Rules, held it error to consolidate four indictments charging unrelated offenses (arson and assault with intent to kill) where six people were named in three of the indictments and only three of the six in the remaining one. The Court said the question of joinder or severance did not rest 'in mere discretion'; that under those circumstances joinder was error as a matter of law:
26
'(S)uch joinder cannot be sustained where the parties are not the same, and where the offenses are in nowise parts of the same transaction, and must depend upon evidence of a different state of facts as to each or some of them. It cannot be said in such case that all the defendants may not have been embarrassed and prejudiced in their defense, or that the attention of the jury may not have been distracted to their injury in passing upon distinct and independent transactions.' Id., 164 U.S. at page 81, 17 S.Ct. at page 33.
27
I think this is the sound rule and consistent with what Mr. Justice Van Devanter said in the Dietrich case. There must somehow be a nexus between the several transactions charged against the several defendants, lest proof of distinct transactions blend to the prejudice of some defendants. The evidence concerning these petitioners was not in any proper sense of the words evidence concerning 'the same series of acts or transactions' constituting an offense. The Schaffers had nothing to do with Karp's shipments to Massachusetts nor Marco's shipments to West Virginia; nor did the latter two have anything to do with Schaffers' shipments to Pennsylvania. The only possible connection between these disparate transactions was the fact that each petitioner dealt with the Stracuzzas, who were the brains of these deals. But that was a happenstance which did not make petitioners any the less strangers to each other. The Pennsylvania, Massachusetts, and West Virginia shipments had nothing in common except that they were all from the house of Stracuzza. Yet customers of one shop, engaged in an illegal enterprise, do not become participants 'in the same series of acts or transactions,' unless somehow or other what each does is connected up with the others or has some relation to them.
28
It is said that the joinder was proper if participation 'in the same series' of transactions was 'alleged' in the indictment. Such an allegation, to be sure, saves the indictment from attack at the preliminary stages. Yet once it becomes apparent during the trial that the defendants have not participated 'in the same series' of transactions, it would make a mockery of Rule 8(b) to hold that the allegation alone, now known to be false, is enough to continue the joint trial.
29
The Court in Kotteakos v. United States, 328 U.S. 750, 773, 66 S.Ct. 1239, 1252, 90 L.Ed. 1557, disapproved the joinder for trial of eight or more conspiracies related in kind 'when the only nexus among them lies in the fact that one man participated in all.' Guilt with us remains personal. 'The dangers of transference of guilt from one to another across the line separating conspiracies, subconsciously or otherwise, are so great,' said the Court in the Kotteakos case, 'that no one really can say prejudice to substantial right has not taken place.' Id., 328 U.S. at page 774, 66 S.Ct. at page 1252. A like danger of such transference existed in the present case. It is not enough to say that evidence of the guilt of each of the present petitioners may have been clear. Reasons for severance are founded on the principle that evidence against one person may not be used against a codefendant whose crime is unrelated to the others. Instructions can be given the jury and admonitions can be made explicit that the line between the various defendants must be kept separate. The district judge conscientiously made that effort here. But where, as here, there is no nexus between the several crimes, the mounting proof of the guilt of one is likely to affect another. There is no sure way to protect against it except by separate trials, especially where, as here, the several defendants, though unconnected, commit the crimes charged by dealing with one person, one house, one establishment. By a joint trial of such separate offenses, a subtle bond is likely to be created between the several defendants though they have never met nor acted in unison; prejudice within the meaning of Rule 147 is implicit.
30
This is unlike the case where the conspiracy count and the substantive counts are submitted to the jury, the verdict being not guilty of conspiracy but guilty on the other counts. There is then no escape from the quandary in which defendants find themselves. Once the conspiracy is supported by evidence, it presents issues for the jury to decide. What may motivate a particular jury in returning a verdict of not guilty on the conspiracy count may never be known.
31
Conspiracy presents perplexing problems that have long concerned courts. See Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790; Delli Paoli v. United States, 352 U.S. 232, 77 S.Ct. 294, 1 L.Ed.2d 278. While it is proper at times to join a conspiracy count with substantive counts even where the latter are the same as the overt acts charged in the conspiracy count, Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489, there is danger in any multiplication. The loose practice of trying to bring together into one conspiracy those whose ties are at best extremely tenuous has often been criticized.8 We allow conspiracy to be put to new dangerous uses when we sanction the practice approved here.
32
I would reverse these judgments and remand the causes for new trials.
1
Rule 8(b) provides:
'Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count.'
2
18 U.S.C. § 2314, 18 U.S.C.A. § 2314, provides in relevant part:
'Whoever transports in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud; * * *
'Shall be fined not more than $10,000 or imprisoned not more than ten years, or both.'
18 U.S.C. § 2311, 18 U.S.C.A. § 2311, provides so far as material here:
"Value' means the face, par, or market value, whichever is the greatest, and the aggregate value of all goods, wares, and merchandise, securities, and money referred to in a single indictment shall constitute the value thereof.'
3
Rule 14 provides:
'If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires.'
4
A motion of petitioner Karp for a severance on grounds other than those tendered here was denied. United States v. Stracuzza, D.C., 158 F.Supp. 552.
5
C.C., 126 F. 664.
6
1896, 164 U.S. 76, 17 S.Ct. 31, 41 L.Ed. 355.
7
1946, 328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557.
8
See note 2, supra.
9
See note 2, supra.
10
H.R.Rep. No. 1462, 73d Cong., 2d Sess., p. 2; H.R.Conf.Rep. No. 1599, 73d Cong., 2d Sess., p. 3.
11
This is not a case like Andrews v. United States, 4 Cir., 108 F.2d 511, where aggregation of shipments to a number of individuals was justified on the theory of a common design among the recipients. The instant case, unlike Andrews, involves aggregation of a number of shipments to a single defendant, and therefore it was quite unnecessary to justify aggregation on the theory of common design.
1
18 U.S.C. § 2314, 18 U.S.C.A. § 2314, provides in relevant part:
'Whoever transports in interstate or foreign commerce any goods, wares, merchandise, securities or money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud; * * *
'Shall be fined not more than $10,000 or imprisoned not more than ten years, or both.'
2
18 U.S.C. § 2311, 18 U.S.C.A. § 2311, provides so far as material here:
"Value' means the face, par, or market value, whichever is the greatest, and the aggregate value of all goods, wares, and merchandise, securities, and money referred to in a single indictment shall constitute the value thereof.'
3
A motion of petitioner Karp for a severance was denied. United States v. Stracuzza, D.C., 158 F.Supp. 522.
4
A separate indictment charging a conspiracy between petitioners and others to violate 18 U.S.C. § 659, 18 U.S.C.A. § 659, by receiving and concealing goods stolen in interstate commerce was also dismissed.
5
Rule 8(b) provides:
'Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count.'
6
See note 5, supra.
7
Rule 14 provides:
'If it appears that a defendant or the government is prejudiced by a joinder of offenses or of defendants in an indictment or information or by such joinder for trial together, the court may order an election or separate trials of counts, grant a severance of defendants or provide whatever other relief justice requires.'
8
See Annual Report of the Attorney General for 1925, pp. 5 6; O'Dougherty, Prosecution and Defense Under Conspiracy Indictments, 9 Brooklyn L.Rev. 263; Developments in the Law: Criminal Conspiracy, 72 Harv.L.Rev. 920, 980—983; Note, Guilt by Association—Three Words in Search of a Meaning, 17 U. of Chi.L.Rev. 148; Note, The Conspiracy Dilemma: Prosecution of Group Crime or Protection of Individual Defendants, 62 Harv.L.Rev. 276; United States v. Falcone, 2 Cir., 109 F.2d 579, 581; United States v. Liss, 2 Cir., 137 F.2d 995, 1003 (dissenting opinion).
| 01
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362 U.S. 574
80 S.Ct. 909
4 L.Ed.2d 963
George Lee PARKER, Petitioner,v.O. B. ELLIS, General Manager, Texas Prison System.
No. 38.
Argued Jan. 20, 1960.
Decided May 16, 1960.
Mr. Frank W. Wozencraft, New York City, for petitioner.
Mr. Leon Pesek, for respondent.
PER CURIAM.
1
This is an application for a writ of habeas corpus brought in the United States District Court for the Southern District of Texas alleging unlawful detention under a sentence of imprisonment following a trial in the state court in which petitioner was, according to his claim, denied due process of law as guaranteed by the Due Process Clause of the Fourteenth Amendment of the United States Constitution. After hearing, the District Court dismissed the petition. The Court of Appeals for the Fifth Circuit, with one judge dissenting, affirmed the order of dismissal, 258 F.2d 937, to which opinion reference is made for the facts. A petition for certiorari to review this judgment presented so impressive a showing for the exercise of this Court's discretionary jurisdiction that the case was brought here with leave to the petitioner to proceed in forma pauperis, 359 U.S. 924, 79 S.Ct. 610, 3 L.Ed.2d 627, and his motion for the assignment of counsel was duly granted. 359 U.S. 951, 79 S.Ct. 741, 3 L.Ed.2d 759.
2
Before the case could come to he heard here, the petitioner was released from the state prison after having served his sentence with time off for good behavior. The case has thus become moot, and the Court is without jurisdiction to deal with the merits of petitioner's claim. 'The purpose of the proceeding defined by the statute (authorizing the writ of habeas corpus to be issued) was to inquire into the legality of the detention, and the only judicial relief authorized was the discharge of the prisoner or his admission to bail.' McNally v. Hill, 293 U.S. 131, 136, 55 S.Ct. 24, 26, 79 L.Ed. 238. 'Without restraint of liberty, the writ will not issue.' Id., 293 U.S. 138, 55 S.Ct. 27. See also Johnson v. Hoy, 227 U.S. 245, 33 S.Ct. 240, 57 L.Ed. 497.* 'It is well settled that this court will not proceed to adjudication where there is no subject-matter on which the judgment of the court can operate.' Ex parte Baez, 177 U.S. 378, 390, 20 S.Ct. 673, 677, 44 L.Ed. 813. We have applied these principles to deny the writ of certiorari for mootness on the express ground that petitioner was no longer in respondent's custody in at least three cases not relevantly different from the present one. Weber v. Squier, 315 U.S. 810, 62 S.Ct. 800, 86 L.Ed. 1209; Tornello v. Hudspeth, 318 U.S. 792, 63 S.Ct. 990, 87 L.Ed. 1158; Zimmerman v. Walker, 319 U.S. 744, 63 S.Ct. 1027, 87 L.Ed. 1700. In all these cases there was custody as the basis for habeas corpus jurisdiction until the cases reached here. In Weber, the respondent's custody ceased because the petitioner had received the benefits of the United States Parole Act, 18 U.S.C.A. § 4201 et seq. In Tornello the petitioner had been pardoned, and was no longer in the custody of anyone. In Zimmerman petitioner had been unconditionally released and was also no longer in the custody of anyone. These cases demonstrate that it is a condition upon this Court's jurisdiction to adjudicate an application for habeas corpus that the petitioner be in custody when that jurisdiction can become effective. It is precisely because a denial of a petition for certiorari without more has no significance as a ruling that an explicit statement of the reason for a denial means what it says. Accordingly, the writ of certiorari is dismissed for want of jurisdiction.
3
Since the case has become moot before the error complained of in the judgment below could be adjudicated, the case is remanded to the Court of Appeals to vacate its judgment and to direct the District Court to vacate its order and dismiss the application.
4
Case remanded to Court of Appeals with directions.
5
Mr. Justice HARLAN, joined by Mr. Justice CLARK, also considers this case moot on a further ground. It appears that petitioner has outstanding against him felony convictions in a number of other States. Under Texas law any one of those convictions would carry the same consequences with respect to petitioner's exercise of civil rights in Texas (Election Code Art. 5.01) V.A.T.S., as his conviction in this case. See Harwell v. Morris, Tex.Civ.App., 143 S.W.2d 809, 812—813. This Court is as much bound by constitutional restrictions on its jurisdiction as it is by other constitutional requirements. The 'moral stigma of a judgment which no longer affects legal rights does not present a case or controversy for appellate review.' St. Pierre v. United States, 319 U.S. 41, 43, 63 S.Ct. 910, 911, 87 L.Ed. 1199.
6
Mr. Chief Justice WARREN, with whom Mr. Justice BLACK, Mr. Justice DOUGLAS, and Mr. Justice BRENNAN join, dissenting.
7
If the Court is right in holding that George Parker's five-year quest for justice must end ignominiously in the limbo of mootness, surely something is badly askew in our system of criminal justice. I am convinced the Court is wrong. Even assuming arguendo that we could not enter a nunc pro tunc order, I believe that we still would be able to grant relief.
8
We have here the case of a man who was convicted of a felony in flagrant disregard of his constitutional right to assistance of counsel. Since the Court terms his claim an 'impressive' one, lengthy discussion of its merits is unnecessary. Still, it is not amiss briefly to describe what it is the Court here declines to decide.
9
In 1954, petitioner was tried in the District Court of Moore County, Texas, on a charge of forging a check. He was then 67 years of age and, respondent concedes, in 'failing health.' The judge refused to appoint counsel to represent him.1 He was convicted and received a sentence of seven years. To any lawyer's eye—and it is not at all clear that the restriction to lawyers is warranted—his trial was a sham. Although the testimony directly bearing on the issue of forgery was not strong,2 petitioner's conviction is hardly surprising, for the prosecution's case consisted in large part of a potent me lange of assorted types of inadmissible evidence introduced without objection by petitioner.3 But petitioner suffered as much from errors of omission as he did from errors of commission. Petitioner now alleges—and respondent does not deny that the victim of the alleged forgery was petitioner's mother-in-law and that the principal prosecution witness was his brother-in-law, a 'bitter enemy';4 but petitioner introduced no evidence to this effect at the trial.5 Nor is this strange, for petitioner's halting attempts to defend himself disclose his utter ineptness in the courtroom. After the prosecution had examined its witnesses—unhampered by searching cross-examination—petitioner conducted what respondent terms 'a premeditated type of defense which might have been successful on another jury.'
Item:
10
'Direct examination by Mr. Parker:
11
'Q. Ted, you go ahead and tell the court about my condition and how you have known me—tell the jury? A. Well, do I understand it right?
12
'Q. Huh? A. You mean your physical condition, so forth and so on?
13
'Q. Yes. Just go ahead and tell the jury about what you know? A. Well, his physical condition, according to everything, is bad or, at least, the doctors say so, you know. I couldn't—as far as the checks, I don't know; but, I do know that he needs medical care. Is that what you meant, George?
14
'Q. Yes, I guess so; just go ahead and tell them what you know about me. That is all—only—that is all I want to ask—I am just leaving mine up to them, you know?
15
'The Court. Do you know what he is driving at—what he wants? A. Well, if I understood it, the condition, you know—
16
'The Court. That is up to you too.
17
'(The Prosecutor). You got anything else?
18
'Mr. Parker. No. Go ahead and ask him.'
Item:
19
'The Court. Are you through?
20
'Mr. Parker. Judge, here are some letters I would like for the jury to see.
21
'The Court. We can't give the letters to the jury.
22
'Mr. Parker. For—from the doctors?
23
'The Court. No, sir.
24
'Mr. Parker. That is all.'
25
This is enough to give the flavor of the 'trial.' It is difficult to recall a case which more clearly illustrates the helplessness of the layman when called upon to defend himself against a criminal charge. Judge, now Chief Judge, Rives, who dissented from the judgment of the Court of Appeals, was clearly correct in stating:
26
'Upon such a record, it would appear that Parker's efforts to defend himself were little short of farcical. In view of the small amounts of the checks, his family connection with the Quattlebaums, and the open way in which the checks were payable to and endorsed by Parker, it is quite possible that he may have had a defense to the charge of forgery, or at least that mitigating circumstances might have been shown. The record * * * shows that he suffered badly from the lack of assistance of counsel, and tends to corroborate his claim of extreme illness.' 258 F.2d 937, 944.
27
But George Parker's unhappy experience with the law was not destined to end with the trial. Instead, time after time the courts have turned aside his applications for redress. There has hardly been a minute in the past five years that Parker's case has not been before a court. He was convicted in November, 1954, and on March 23, 1955, the Court of Criminal Appeals of Texas affirmed his conviction in a brief opinion. Parker v. State, 276 S.W.2d 533. Parker then applied to the Court of Criminal Appeals for habeas corpus, but his petition was denied on September 21, 1955, without a hearing. On February 27, 1956, this Court denied certiorari.6 350 U.S. 971, 76 S.Ct. 444, 100 L.Ed. 843. Next, on May 31, 1956, Parker turned to the Federal District Court and sought relief by way of habeas corpus. The district judge denied his petition on June 24, 1957, after his thrice-repeated request for a lawyer had been thrice-ignored. The Court of Appeals affirmed on August 29, 1958. 258 F.2d 937. Parker petitioned for certiorari on October 24, 1958; and this Court granted the petition on March 2, 1959. 359 U.S. 924, 79 S.Ct. 610, 3 L.Ed.2d 627. At last an attorney was appointed to represent Parker's interests. 359 U.S. 951, 79 S.Ct. 741, 3 L.Ed.2d 759. Then, on June 6, 1959, Parker was released from the penitentiary—almost five years after his conviction, three years after he had applied to the Federal District Court for relief, more than seven months after he had petitioned this Court for certiorari, and more than three months after certiorari had been granted. Now that petitioner has dutifully fulfilled the requirement that he exhaust—an apt word—all other remedies,7 he is told that it is too late for the Court to act.
I.
28
The Court does not suggest that this strange result is a happy one. But it appears to believe it is bound by precedent to the view that, because of the nature of the habeas corpus remedy, 'it is a condition upon this Court's jurisdiction * * * that the petitioner be in custody when that jurisdiction can become effective.' Consequently, the Court does not express any view on the mootness question considered de novo. Since, as will appear, I do not regard the decisions upon which the Court relies as at all decisive, I am obliged to consider whether the habeas corpus statute, 28 U.S.C. §§ 2241—2254, 28 U.S.C.A. §§ 2241—2254, entitles us to pass upon the merits of this controversy. I conclude that it does.
29
It is quite true that the statute provides that the writ of habeas corpus will not issue unless the applicant is 'in custody.' 28 U.S.C. § 2241(c), 28 U.S.C.A. § 2241(c). But the statute does not impose this same restriction upon the grant of relief. Rather, the federal courts are given a broad grant of authority to 'dispose of the matter as law and justice require.' 28 U.S.C. § 2243, 28 U.S.C.A. § 2243. In the case at bar, the 'in custody' prerequisite to issuance of the writ is no longer relevant, because the function of the writ—to provide and to facilitate inquiry into the validity of the applicant's claim—has already been fully served.8 The district judge ordered that petitioner's application be heard upon affidavits, depositions, and the record of the trial,9 and the latter alone conclusively substantiates petitioner's allegations. Thus all that remains is to determine what form of relief should be given. Under the circumstances of this case, 'law and justice require' that the patent invalidity of Parker's conviction be proclaimed.
30
Granting Parker relief would not only comport with the statutory mandate, but would also be in keeping with the spirit of the writ. Habeas corpus, with an ancestry reaching back to Roman Law,10 has been over the centuries a means of obtaining justice and maintaining the rule of law when other procedures have been unavailable or ineffective. The early years of its development in England were distinguished by the role it played in securing enforcement of the guarantees of Magna Charta.11 But even the Great Writ was not secure from the pressures of the English Crown, and perhaps the most effective method of eviscerating the remedy proved to be procrastination.12 Abuses such as the delay of over four months in the famous Jenkes case finally caused Parliament to enact the Habeas Corpus Act of 1679, 31 Car. II, c. 2, which required returns on the writ to be made within specified periods of time and which proscribed the judiciary's tactic of refusing to issue the writ during 'Vacation-Time.'13 The summary nature of the remedy thus became established, and our own statutory writ has this same stamp.14
31
The general problem we confront in the case at bar, then, is hardly novel in the history of the writ—an intolerable delay in affording justice and the absence of any other remedy.15 The causes, to be sure, have changed with the times. Instead of the arbitrariness of judges, Parker has had to contend with the time-consuming nature of our system of appellate review and collateral attack. We cannot expect history to tell us exactly how to cope with this problem, because it simply did not exist in the early days of the common-law writ, when there was little if any appellate review of the then relatively simple habeas corpus proceedings.16 But history does provide general guidance. This guidance is incompatible with the idea that the writ designed as an effective agent of justice has become fossilized so that old problems, once thought to have been solved, are now insurmountable because they have taken slightly new forms. The Court has not hesitated to expand the scope of habeas corpus far beyond its traditional inquiry into matters of technical 'jurisdiction.' The statute permitted this adaptation in the interests of 'law and justice,' and the Court has responded to the demands of that compelling standard. We have the same latitude in this case, and the character of the writ does not require us to impose upon applicants what will amount to a 'time-is-of-the-essence' strait jacket.
II.
32
The Court apparently believes that these considerations are foreclosed by prior decisions. The fact is, however, that while the writ-remedy argument seems never to have been squarely presented to this Court, the weight of authority favors petitioner.
33
In Pollard v. United States, 352 U.S. 354, 77 S.Ct. 481, 1 L.Ed.2d 393, the Court was confronted with a mootness question identical to that presented here. Pollard involved a collateral attack upon a conviction by way of motion under 28 U.S.C. § 2255, 28 U.S.C.A. § 2255. After certiorari had been granted, the petitioner was released from prison. Nevertheless, this Court held that the case was not moot. But, just as the habeas corpus statute provides that the writ 'shall not extend to a prisoner unless * * * (h)e is in custody,'17 so too is § 2255 available only to a 'prisoner in custody under sentence of a court.' Moreover, as this Court has noted, § 2255 affords the same relief as habeas corpus, with the difference, which is not material here, that a § 2255 motion is filed in the sentencing court instead of in the court of the district of incarceration.18 Consequently, if Pollard's claim was not moot, it is difficult to perceive why Parker's claim is.
34
The Court recognizes the difficulty posed by Pollard, and solves it by stating that this aspect of Pollard was predicated upon an 'unconsidered assumption' which was overruled by Heflin v. United States, 358 U.S. 415, 79 S.Ct. 451, 3 L.Ed.2d 407, 'after full deliberation.' But Heflin did the purport to discard Pollard, and there is no inherent inconsistency between these two decisions. In Heflin, the Court decided that a prisoner could not secure § 2255 relief from a sentence which he had not yet begun to serve because he was not yet 'in custody' pursuant to that sentence. But the mootness problem dealt with in Pollard was not involved in Heflin. A construction of § 2255 similar to the construction of the habeas corpus statute proposed above would harmonize Heflin and Pollard; it is only the Court's opinion in this case which tends to make them irreconcilable. Thus the Court's argument comes full circle.
35
Moreover, it is curious that the Court, in dealing with the cases upon which it relies, does not exhibit the same attitude that is reflected by its treatment of Pollard. The three cases which constitute the principal basis for the Court's judgment are Weber v. Squier, 315 U.S. 810, 62 S.Ct. 800, 86 L.Ed. 1209; Tornello v. Hudspeth, 318 U.S. 792, 63 S.Ct. 990, 87 L.Ed. 1158; and Zimmerman v. Walker, 319 U.S. 744, 63 S.Ct. 1027, 87 L.Ed. 1700.19 While in Pollard the Court rendered judgment after plenary consideration, in these three cases the Court simply denied certiorari, and it did so in terse orders without benefit of briefs or oral arguments. The opinion of the Court in the case at bar hardly seems consistent with this Court's oftrepeated warnings concerning the lack of significance of denials of certiorari. Furthermore, when the records in Weber, Tornello, and Zimmerman are examined, it becomes unmistakably clear that the orders in those cases were not based upon the theory now espoused by the Court.
36
Weber was the first of the trio. There the petitioner was paroled while his petition for certiorari was pending, and the Court thereupon denied the petition on grounds of mootness. Since a lower court had issued a writ of habeas corpus prior to the parole, Weber would be directly in point if the Court's order had rested upon the premise that petitioner, as a parolee, was no longer in custody within the meaning of the habeas corpus statute. But the respondent did not suggest that the petition be denied on this ground. Rather, his sole argument was that the case was moot because the petitioner was no longer in his custody. The only case respondent cited, Van Meter v. Sanford, 5 Cir., 99 F.2d 511, held that a habeas corpus action becomes moot when the respondent loses custody and is thereby disabled from complying with the order which might be necessary upon remand—in Weber's case, an order of discharge. It was this theory the Court adopted in denying certiorari because petitioner was 'no longer in the respondent's custody.'20 It is instructive to note that the language of the Weber order21 is identical to the language the Court used shortly thereafter to dispose of a case on grounds of mootness where the petitioner had been transferred from one custodian to another, but where he was still in the penitentiary. See United States ex rel. Innes v. Crystal, 319 U.S. 755, 63 S.Ct. 1164, 87 L.Ed. 1708. Whatever may be said of the Weber theory of mootness,22 it is irrelevant to the instant case, where it would be unnecessary to issue an order of discharge.
37
The second case discussed by the Court is Tornello v. Hudspeth, supra, where a petition for certiorari was denied because 'petitioner has been pardoned by the President and * * * is no longer in respondent's custody.' Since the Court used the verbal formula of Weber and Innes, and since the only case cited was Weber, it is evident that the Court relied entirely upon the Weber theory so far as the custody question was concerned. It is unfortunate that the Court did not consider the significance of the fact that there was no custody at all in Tornello and that hence no order of discharge would have been necessary. But the Court's failure to examine this aspect of the mootness problem robs the case of controlling authority. No doubt the Court's uncritical application of the Weber rule is attributable not only to the fact that the parties did not discuss the mootness issue at all, but also to the Court's reliance upon the full and unconditional pardon as an alternative ground of mootness.23
38
Not surprisingly, perhaps, the order in the third case, Zimmerman v. Walker, supra, relied solely upon Weber and Tornello, and repeated the 'released from the respondent's custody' phrase. In that case, respondent filed a suggestion of mootness in which he mentioned the total lack of custody, but in which he relied primarily upon the ground which had proved successful in the past the absence of custody by him. But it is unnecessary to explore this case further, inasmuch as no writ or rule to show cause had ever issued. Since custody is a prerequisite for issuance of the writ, the case was clearly moot; but it is just as clearly irrelevant.
39
Orders of this character do not provide a solid basis for disposition of Parker's case. The 'law and justice' standard of the statute does.
III.
40
The concurring opinion raises another objection to granting Parker relief. While the Court's opinion simply construes the statute, the concurring opinion construes the Constitution. The Court's opinion would not foreclose Congress from authorizing relief in a case like Parker's; the concurring opinion would. While the Court's decision is based on the theory that nothing can be done for Parker because of the nature of the relief authorized by the habeas corpus statute, the concurrence is grounded upon the view that Parker has such an insubstantial interest in securing an adjudication that his claim could not present a 'case or controversy' under Art. III, § 2 of the Constitution, regardless of what relief a statute were to authorize.24
41
One could take exception to the factual premise of this conclusion. The evidence of record which is relied upon to establish the existence and number of Parker's convictions leaves much to be desired,25 and there is nothing to indicate whether Parker has been relieved of the civil consequences of any of these convictions under statutes designed to mitigate the effect of civil disability laws.26 Moreover, Harwell v. Morris, Tex.Civ.App., 143 S.W.2d 809, the decision which the concurring opinion cites as establishing that Parker's convictions outside of Texas—if still effective—would deprive him of his voting rights in Texas, is not persuasive authority. Not only was the decision not reviewed by the Texas Supreme Court, but it was rendered in the context of an election dispute, where the real issue was not the impact upon the voter but the impact upon the candidates. Cf. Logan v. United States, 144 U.S. 263, 303, 12 S.Ct. 617, 630, 36 L.Ed. 429. In any event, even conceding the accuracy of the assumption with respect to Parker's prior convictions and the Harwell issue, it is entirely possible that the conviction in this case would operate to augment the punishment should Parker ever again be adjudged guilty of a crime in Texas or in any other State.
42
Aside from these considerations, however, there is something fundamentally wrong with the theory that mootness should turn upon whether or not a convicted person can run for office or cast a ballot. The principal policy basis for the doctrine of mootness, when that term is employed in the 'case or controversy' context, is to insure that the judiciary will have the benefit of deciding legal questions in a truly adversary proceeding in which there is the 'impact of actuality,'27 and in which the contentiousness of the parties may be relied upon to bring to light all relevant considerations.28 Here the issue is surely not abstract. The case comes to us after the actions complained of have occurred, and we have the entire trial record before us. Moreover, George Parker's interest in this litigation is quite substantial enough to insure that his case has been fully presented.29 Conviction of a felony imposes a status upon a person which not only makes him vulnerable to future sanctions through new civil disability statutes, but which also seriously affects his reputation and economic opportunities.30 And the fact that a man has been convicted before does not make the new conviction inconsequential. There is, after all, such a thing as rehabilitation and reintegration into the life of a community. In this case, for example, none of Parker's previous convictions were in Texas, and he had been out of jail for over five years at the time of the 1954 forgery trial. Five years of law-abiding life in a new community give Parker a significant enough stake in the outcome of this adjudication to preclude a finding of mootness. Furthermore, there is an important public interest involved in declaring the invalidity of a conviction obtained in violation of the Constitution, and, under the Court's decisions, this is a consideration relevant to the mootness question.31
43
In sum, I cannot agree with the Court that George Parker's case comes to us too late. It is too late, much too late, to undo entirely the wrong that has been inflicted upon him; but it is not too late to keep the constitutional balance true. I dissent from the notion that, because we cannot do more, we should do nothing at all.
44
Mr. Justice DOUGLAS, with whom THE CHIEF JUSTICE concurs, dissenting.
45
I do not take the dim view of fictions that the opinion of the Court reflects. Fictions are commonplace to lawyers. In Delaware, prior to its adoption of a modern code of civil procedure, the action of ejectment was based on a series of fictions. The declaration averred a lease to a fictious lessee, the entry by a fictitious lessee, and the ouster by a fictitious ejector 'which when proven or admitted by the consent rule' left 'the question of title as the only matter to be determined in the case.' 2 Woolley, Practice in Civil Actions (1906), § 1591.
46
We know from English history how the King's Bench and Exchequer contrived to usurp the Court of Common Pleas—by alleging that the defendant was in custody of the king's marshal or that the plaintiff was the king's debtor and could not pay his debt by reason of the defendant's default. See 3 Reeves' History of the English Law (Finlason ed. 1869), 753.
47
We are told by Maine, Ancient Law (New ed. 1930), 32, that in old Roman law 'fictio' was a term of pleading and signified a false averment which could not be traversed, 'such, for example, as an averment that the plaintiff was a Roman citizen, when in truth he was a foreigner.'
48
The list is long, and the case for or against a particular fiction is often hotly contested. See Fuller, Legal Fictions, 25 Ill.L.Rev. 363, 513, 877.
49
Some fictions worked grievous injustices such as the presupposition that a defendant, though far away, was within the jurisdiction and should be proceeded against by outlawry.1 Bentham inveighed against 'the pestilential breath of Fiction.'2 Yet fictions were often expedients to further the end of justice.3 '(T)he purpose of any fiction is to reconcile a specific legal result with some premise.' Fuller, op. cit., supra, at 514. As Justice Holmes once said, 'To say that a ship has committed a tort is merely a shorthand way of saying that you have decided to deal with it as if it had committed one, because some man has committed one in fact.' Tyler v. Judges of Court of Registration, 175 Mass. 71, 77, 55 N.E. 812, 814, 51 L.R.A. 433.
50
We have here an injustice to undo. Parker was convicted in a Texas court of a crime without benefit of counsel; and the nature of the charge, the kind of defense available, and the capabilities of Parker to defend himself, make it plain to all of us, I assume, that due process of law was denied him under the standards laid down in our cases,4 the most recent one being Cash v. Culver, 358 U.S. 633, 79 S.Ct. 432, 3 L.Ed.2d 557. No remedy against this invasion of his constitutional rights was available to him except by habeas corpus. While in prison, he followed the federal route. The writ was applied for, the District Court ordered respondent to answer, see Walker v. Johnston, 312 U.S. 275, 284, 61 S.Ct. 574, 578, 85 L.Ed. 830, and a hearing on affidavits, other documents, and the trial record was held. The petition was dismissed and the Court of Appeals affirmed. 258 F.2d 937. Then a petition for a writ of certiorari was filed here. More than seven months after his petition for certiorari was filed with us and over three months after we granted certiorari he was released from prison. That was June 6, 1959. So the Court now rules that he has no relief by way of habeas corpus because the illegal detention he challenged has been terminated. And so it has. But his controversy with the State of Texas has not ended. The unconstitutional judgment rendered against him has a continuing effect because under Texas law '(a)ll persons convicted of any felony except those restored to full citizenship and right of suffrage or pardoned' are disqualified from voting. Texas Election Code, Art. 5.01, V.A.T.S. The loss of these civil rights prevents a case from becoming moot, even though the sentence has been satisfied.5 Fiswick v. United States, 329 U.S. 211, 222, 67 S.Ct. 224, 230, 91 L.Ed. 196; Pollard v. United States, 352 U.S. 354, 358, 77 S.Ct. 481, 484, 1 L.Ed.2d 393. The controversy that Parker has with Texas is a continuing one.
51
If this were a federal conviction, Parker would have a remedy under 28 U.S.C. § 2255, 28 U.S.C.A. § 2255. See Pollard v. United States, supra. But we were advised on oral argument that Texas provides no such remedy and that Parker has no known method of removing the civil disabilities that follow from the unconstitutional judgment of conviction. He may be pardoned. But pardons are matters of grace. There is no remedy which he can claim as a matter of right, unless it is this one. I cannot therefore be party to turning him from this Court empty-handed.
52
Any judgment nunc pro tunc indulges in a fiction. But it is a useful one, advancing the ends of justice. A man who claims to be unlawfully in the custody of X is not required to start all over again if X has died and Y has been substituted in X's place. We treat the habeas corpus petition as the facts were when the issue was drawn and enter judgment nunc pro tunc 'as of that day.' Quon Quon Poy v. Johnson, 273 U.S. 352, 359, 47 S.Ct. 346, 348, 71 L.Ed. 680. The same is done when other parties die before final decision. See Mitchell v. Overman, 103 U.S. 62, 26 L.Ed. 369; Harris v. Commissioner, 340 U.S. 106, 112—113, 71 S.Ct. 181, 184 185, 95 L.Ed. 111. These cases can all be distinguished from the present one. But the principle is deep in our jurisprudence and was stated long ago in Mitchell v. Overman, supra, 103 U.S. at pages 64—65, as follows:
53
'(T)he rule established by the general concurrence of the American and English courts is, that where the delay in rendering a judgment or a decree arises from the act of the court, that is, where the delay has been caused either for its convenience, or by the multiplicity or press of business, either the intricacy of the questions involved, or of any other cause not attributable to the laches of the parties, the judgment or the decree may be entered retrospectively, as of a time when it should or might have been entered up. In such cases, upon the maxim actus curiae neminem gravabit, which has been well said to be founded in right and good sense, and to afford a safe and certain guide for the administration of justice,—it is the duty of the court to see that the parties shall not suffer by the delay. A nunc pro tunc order should be granted or refused, as justice may require in view of the circumstances of the particular case.'
54
It is the fault of the courts, not Parker's fault, that final adjudication in this case was delayed until after he had served his sentence. Justice demands that he be given the relief he deserves. Since the custody requirement, if any, was satisfied when we took jurisdiction of the case, I would grant the relief as of that date.
*
It is likewise true that 'a motion for relief under 28 U.S.C. § 2255, 28 U.S.C.A. § 2255 (relevant only to federal sentences) is available only to attack a sentence under which a prisoner is in custody.' Heflin v. United States, 358 U.S. 415, at page 420, 79 S.Ct. 451, at page 454, 3 L.Ed.2d 407. Contrary to the unconsidered assumption in Pollard v. United States, 352 U.S. 354, 77 S.Ct. 481, 1 L.Ed.2d 393, this was decided after full deliberation only a year ago. See the opinion of Mr. Justice Douglas, 358 U.S. at page 418, 79 S.Ct. at page 453, and the opinion of Mr. Justice Stewart for the Court on this point, 358 U.S. at page 420, 79 S.Ct. at page 454, in Heflin v. United States, 358 U.S. 415, 79 S.Ct. 451, 3 L.Ed.2d 407. Of course Rule 35 of the Federal Rules of Criminal Procedure, 18 U.S.C.A., is not available for state sentences.
1
'The Court. Do you want a trial by jury or without a jury?
'Mr. Parker. Well, it is immaterial to me, Judge. I don't have any attorney.
'The Court. Well, you are going to have to make up your mind. It is certainly immaterial to the court.
'Mr. Parker. I guess a jury then.
'The Court. Do you have a lawyer hired?
'Mr. Parker. No, sir, I don't.
'The Court. The law does not require the court to appoint an attorney to represent a defendant where he has a trial by jury and it is not the practice of this court to appoint any attorney to represent to defendant. It is up to him to arrange for his own counsel. Now, if you are eligible for a suspended sentence, why, then, the court would get some lawyer to advise you about the procedure in filing your application for a suspended sentence but only for that part and only if you are eligible for a suspended sentence.
'Mr. Parker. I will not apply for any suspended sentence.'
2
For example, the woman on whose account the check was drawn was never called as a witness. The only evidence regarding petitioner's lack of authority from her to sign the check is contained in this bit of testimony—of highly questionable admissibility—by the woman's son:
'Q. Did your mother tell you that she authorized him to write checks on her? A. No, sir.
'Q. And, your mother didn't authorize anyone to use that signature? A. No, sir.'
3
In his brief, respondent stated that it was 'not necessary to discuss' petitioner's argument that his trial was gravely infected by error, because these matters of state law 'are not properly before this Court.' Obviously they are very much much before the Court in a deprivation of counsel case, for they are among the factors which indicate to what degree the defendant has been prejudiced. On oral argument, respondent's counsel, the Assistant Attorney General of Texas, freely answered the Court's questions regarding these issues, and, with admirable candor, expressed his view that as a matter of fact—though not as a matter of law—no layman could competently defend himself against a criminal charge.
4
The allegation is supported by an affidavit of petitioner's wife.
5
In fact, the testimony of the brother-in-law conveyed the opposite impression:
'Q. You know G. L. Parker, don't you? A. I know of him.
'Q. Well, he is the defendant sitting here, isn't he? A. I think so.
'Q. Well, as a matter of fact, you know he is, don't you, Mr. Quattlebaum? A. Yes.
'Q. How long have you known him? A. Well, a long time.'
6
Petitioner suffered throughout from the poverty which prevented him from hiring an attorney and from obtaining a transcript of the record of his trial. Left to his own devices, his petitions—at least his first petition to this Court—did not sufficiently reveal the prejudice which he suffered at the trial because of the failure of the trial court to appoint an attorney.
7
See 28 U.S.C. §§ 2242, 2254, 28 U.S.C.A. §§ 2242, 2254; Darr v. Burford, 339 U.S. 200, 70 S.Ct. 587, 94 L.Ed. 761.
8
See Ex parte Baez, 177 U.S. 378, 389, 20 S.Ct. 673, 677, 44 L.Ed. 813; Ingersoll, History And Law of Habeas Corpus, 2. In Baez, the Court pointed out that, as a practical matter, the writ could not be issued and the applicant produced for a hearing before the date scheduled for his release, so that mootness could be anticipated. 177 U.S. at pages 389—390, 20 S.Ct. at page 677. This was a proper application of the 'in custody' requirement.
9
28 U.S.C. §§ 2246, 2247, 28 U.S.C.A. §§ 2246, 2247. Petitioner secured the transcript through the financial assistance of a fellow prisoner to the extent of $25.
10
See Church, Habeas Corpus (2d ed. 1893), 2—3.
11
See 2 Hallam, Europe During the Middle Ages, 552; 9 Holdsworth's History of English Law 111—125; Hurd, Habeas Corpus (2d ed. 1876), 66—74.
It is instructive to recall the following passages of the Magna Charta:
'39. No free-man shall be seized, or imprisoned, or dispossessed, or outlawed, or in any way destroyed; nor will we condemn him, nor will we commit him to prison, excepting by the legal judgment of his peers, or by the laws of the land.
'40. To none will we sell, to none will we deny, to none will we delay right or justice.' Magna Charta, reprinted in S.Doc. No. 232, 66th Cong., 2d Sess. 17.
12
'Prerogative then reigned. The obnoxious members of the late Parliament were seized and imprisoned for words spoken in debate. The writ of habeas corpus was rendered powerless even to liberate them on bail by the servile procrastination of the court who dared not expressly to deny the right. And finally JOHN ELLIOTT, the most distinguished leader of the popular party, doomed to imprisonment and loaded with fines by a court usurping jurisdiction, died in the Tower—a martyr to parliamentary freedom of speech.' Hurd, Habeas Corpus (2d ed. 1876), 78. See also 3 Blackstone Commentaries (15th ed. 1809), 133—135; authorities cited in note 13, infra.
13
'* * * Jenkes, a citizen of London on the popular or factious side, having been committed by the king in council for a mutinous speech in Guildhall, the justices at quarter sessions refused to admit him to bail, on pretence that he had been committed by a superior court; or to try him, because he was not entered in the calendar of prisoners. The chancellor, on application for a habeas corpus, declined to issue it during the vacation; and the chief-justice of the king's bench, to whom, in the next place, the friends of Jenkes had recourse, made so many difficulties that he lay in prison for several weeks.' Hallam. History of England (8th ed. 1855), 10—11. See also 3 Blackstone Commentaries (15th ed. 1809), 134—135; Church, Habeas Corpus (2d ed. 1893), 24—25; 6 Howell's State Trials 1190—1207; Hurd, Habeas Corpus (2d ed. 1876), 82. It is plain from these other sources that the 'several weeks' mentioned in Hallam's account refers only to one period of Jenkes' incarceration. There is also some dispute among these authors with respect to the historical significance of the Jenkes case. The nature of the abuses which led to passage of the Act is clear, however; and, for present purposes, it is immaterial which particular case aroused the greatest public sentiment.
14
Under our habeas corpus statute, the court is required to issue the writ or a show-cause order 'forthwith' unless the petition does not state a cause for relief. The return must normally be made within three days, and the hearing held within five days thereafter. 28 U.S.C. § 2243, 28 U.S.C.A. § 2243.
15
Respondent's attorney, the Assistant Attorney General of Texas, conceded during oral argument that there is no other judicial avenue open to petitioner.
16
See 2 Spelling, Injunctions (2d ed. 1901), 1159—1165. Cf. Ingersoll, History And Law of Habeas Corpus, 32—33; 9 Holdworth's History of English Law 123—124.
17
28 U.S.C. § 2241(c), 28 U.S.C.A. § 2241(c).
18
Section 2255, of course, is available only with respect to federal judgments, whereas habeas corpus is available to attack either state or federal judgments.
The legislative history of § 2255 and its relationship to habeas corpus are exhaustively discussed in United States v. Hayman, 342 U.S. 205, 210—219, 72 S.Ct. 263, 267—272, 96 L.Ed. 232. See also Heflin v. United States, 358 U.S. 415, 420—421, 79 S.Ct. 451, 454—455, 3 L.Ed.2d 407 (concurring opinion). While I share the views expressed by Mr. Justice Douglas in Heflin, supra, 358 U.S. at pages 417—418, 79 S.Ct. at pages 452—453, I believe that if § 2255 and habeas corpus are to be treated as synonymous when the result is to deny their availability, they should be treated in the same manner when this would afford an applicant relief.
19
The Court mentions three other decisions, but apparently does not rest upon them. In McNally v. Hill, 293 U.S. 131, 55 S.Ct. 24, 79 L.Ed. 238, the Court held that a person who was serving the first of two consecutive sentences could not attack the second at that time. His habeas corpus remedy, held the Court, lay before him. Petitioner's problem is quite different. His remedy, under the Court's decision, is gone forever. It is also relevant to note that in McNally the Court suggested that there was another type of relief available to the petitioner even before he commenced serving his second sentence. Id., 293 U.S. at page 140, 55 S.Ct. at page 28. Johnson v. Hoy, 227 U.S. 245, 33 S.Ct. 240, 57 L.Ed. 497, involved a habeas corpus action brought prior to trial, which obviously presents questions entirely different from those posed by the case at bar. For a discussion of Ex parte Baez, 177 U.S. 378, 20 S.Ct. 673, 44 L.Ed. 813, see note 8, supra.
20
Had the case been argued, conceivably the petitioner would have urged upon the Court the writ-remedy distinction, and contended that no order of discharge would be necessary in his case because parole was not custody. It is hardly surprising that the Court did not explore this intricate problem sua sponte; nor is it surprising that the petitioner did not suggest this approach, inasmuch as the Court's opinion left open the possibility that he could maintain a habeas corpus action against a new respondent.
It may be noted that the Courts of Appeals, in considering the difficult question whether parole is sufficient restraint to serve as a basis for a habeas corpus action, seem to have taken divergent views of the significance of Weber. The Weber order, unillumined by the record, is hardly a model of clarity, and it is natural enough that some—though not all—courts have been misled. Compare Siercovich v. McDonald, 5 Cir., 193 F.2d 118, and Adams v. Hiatt, 3 Cir., 173 F.2d 896, with Factor v. Fox, 6 Cir., 175 F.2d 626, 628—629, and Shelton v. United States, 5 Cir., 242 F.2d 101, 109—110. See also Anderson v. Corall, 263 U.S. 193, 196, 44 S.Ct. 43, 44, 68 L.Ed. 247. ('While (parole) is an amelioration of punishment, it is in legal effect imprisonment.') But cf. Wales v. Whitney, 114 U.S. 564, 5 S.Ct. 1050, 29 L.Ed. 277.
21
The order reads as follows:
('Petition for writ of certiorari to the Circuit Court of Appeals) for the Ninth Circuit denied on the ground that the cause is moot, it appearing that petitioner has been released upon order of the United States Board of Parole and that he is no longer in the respondent's custody. The motion for leave to proceed further in forma pauperis is therefore also denied.'
22
The Court finally came to grips with this problem in Ex parte Endo, 323 U.S. 283, 304—307, 65 S.Ct. 208, 219—221, 89 L.Ed. 243.
23
This aspect of the mootness question as it relates to the instant case is discussed post, 362 U.S. at pages 591—594, 80 S.Ct. at pages 918—921. It may be noted that Tornello's conclusion as to the effect of a pardon is not unchallengeable. See 3 The Attorney General's Survey of Release Procedures 267—294.
24
See Muskrat v. United States, 219 U.S. 346, 31 S.Ct. 250, 55 L.Ed. 246.
25
At the trial, the sheriff testified from an F.B.I. record with respect to Parker's prior convictions. The record was not introduced into evidence, its nature was not disclosed, and it was not authenticated in any manner. Moreover, the sheriff's description of the information in the record was confused, and, in response to a question by Parker, he conceded that 'some' of the cases were never 'disposed of,' so far as the record indicated. During the habeas corpus proceedings, respondent submitted a record from the Texas Department of Public Safety which purported to summarize Parker's criminal history. It is, so far as appears, merely a compilation of information from various sources for Department use, and it was submitted only as evidence that Parker was being held pursuant to the judgment in this case. Its usefulness with regard to the mootness issue is further diminished by the fact that the Parker, or Parkers, whose convictions appear on the record are listed under seven different first and middle names.
26
See 19 St. John's L.Rev. 185; 59 Yale L.J. 786, 787, n. 3.
27
Frankfurter, A Note on Advisory Opinions, 37 Harv.L.Rev. 1002, 1006.
28
See United States v. Johnson, 319 U.S. 302, 304—305, 63 S.Ct. 1075, 1076—1077, 87 L.Ed. 1413; Bischoff, Status to Challenge Constitutionality, in Supreme Court and Supreme Law (Cahn ed.), 26 et seq.; Freund, On Understanding the Supreme Court, 84—86; Note, 103 U. of Pa.L.Rev. 772—773.
29
Of opinions expressing a view consistent with the concurring opinion, the Supreme Court of Washington has said, 'Those decisions, it seems to us, lose sight of * * * that damaging effect of such a judgment which everybody knows reaches far beyond its satisfaction by payment of a fine or serving a term of imprisonment.' State v. Winthrop, 148 Wash. 526, 534, 269 P. 793, 797, 59 A.L.R. 1265. See also In re Byrnes, 26 Cal.2d 824, 161 P.2d 376; People v. Marks, 64 Misc. 679, 120 N.Y.S. 1106; Village of Avon v. Popa, 96 Ohio App. 147, 121 N.E.2d 254; Roby v. State, 96 Wis. 667, 71 N.W. 1046; Note, 103 U. of Pa.L.Rev. 772, 779—782, 795. But cf. St. Pierre v. United States, 319 U.S. 41, 63 S.Ct. 910, 911, 87 L.Ed. 1199, where the Court held moot on direct appeal the case of a person who had served his sentence for contempt before certiorari was granted. That case is readily distinguishable in view of the factors the Court stressed as relevant. For example, the Court stated that it did not appear 'that petitioner could not have brought his case to this Court for review before the expiration of his sentence.' Moreover, the Government admitted that petitioner would again be required to testify before a grand jury and that his commitment would again be sought if he refused, so that, as the Court noted, there might very well be 'ample opportunity to review such a judgment * * *.' Id., 319 U.S. at page 43, 63 S.Ct. at page 911. It seems reasonably clear also that the 'collateral consequences' cases have considerably undermined the philosophy of St. Pierre. See Pollard v. United States, supra, 352 U.S. at page 358, 77 S.Ct. at page 484; United States v. Morgan, 346 U.S. 502, 512—513, 74 S.Ct. 247, 253—254, 98 L.Ed. 248; Fiswick v. United States, 329 U.S. 211, 220—223, 67 S.Ct. 224, 229—230, 91 L.Ed. 196. See also Lafferty v. District of Columbia 107 U.S.A.pp.D.C. 318, 277 F.2d 348, where the Court of Appeals for the District of Columbia Circuit set aside a decree of unsoundness of mind after the individual concerned was no longer in a mental institution and was not mentally ill.
Possibly it should be noted, for the sake of completeness, that no one has suggested that the State's interest in upholding the validity of this conviction is insubstantial.
30
For example, under § 504 of the Labor-Management Reporting and Disclosure Act of 1959, persons who have been convicted of specified crimes are ineligible to serve for a five-year period in various positions for labor unions or employer associations. 73 Stat. 536—537, 29 U.S.C.A. § 504.
For a discussion of the 'status degradation ceremony' represented by criminal conviction, see Goldstein, Police Discretion Not to Invoke The Criminal Process: Low-Visibility Decisions in the Administration of Justice, 69 Yale L.J. 543, 590 592. See also Waite, The Prevention of Repeated Crime, 30—31; Frym, The Treatment of Recidivists, 47 J.Crim.L., Criminology & Police Science 1; United States v. Hines, 2 Cir., 256 F.2d 561, 563.
31
See Walling v. James V. Reuter Co., 321 U.S. 671, 674 675, 64 S.Ct. 826, 827—828, 88 L.Ed. 1001; Southern Pacific Terminal Co. v. Interstate Commerce Comm'n, 219 U.S. 498, 516, 31 S.Ct. 279, 284, 55 L.Ed. 310; United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 309, 17 S.Ct. 540, 546, 41 L.Ed. 1007.
1
9 Holdsworth, A History of English Law (3d ed. 1944), 254 et seq. As to corporations, churches, and boroughs see 1 Pollock and Maitland, History of English Law (2d ed. 1899), 486, 669—670.
2
1 Bentham's Works (Bowring ed. 1843), 235.
3
9 Holdsworth, op. cit., supra, note 1, at 250—251:
'Of all these methods of beginning an action the most common was a capias ad respondendum, i.e. a writ directing the sheriff to arrest the defendant. This process was possible in all the most usual personal actions; and, where it was possible, it became the practice, in the course of the eighteenth century, to 'resort to it in the first instance, and to suspend the issuing of the original writ, or even to neglect it altogether, unless its omission should afterwards be objected by the defendant. Thus the usual practical mode of commencing a personal action by original writ is to begin by issuing, not an original, but a capias.' As the author of the Pleader's Guide said:—
"Still lest the Suit should be delayed,
And Justice at her Fountain stayed,
A Capias is conceived and born
Ere yet th' ORIGINAL is drawn,
To justify the Courts proceedings,
Its Forms, its Processes, and Pleadings,
And thus by ways and means unknown
To all but Heroes of the Gown,
A Victory full oft is won
Ere Battle fairly is begun;
'Tis true, the wisdom of our Laws
Has made Effect precede the Cause,
But let this Solecism pass—
In fictione aequitas.'
But the original was always supposed; and the defendant could always object to its absence, and compel the plaintiff to procure it from the office of the cursitor. It should be noted also that in the procedure by bill against persons actually privileged, or supposed to be privileged, there was necessarily no original. The bill took the place of the original, and also operated as the plaintiff's declaration.' And see 1 Bouv.Law Dict. (8th ed. 1914), Rawles Third Revision pp. 1213—1214.
4
And see the dissenting opinion of Judge Rives below, 258 F.2d 937, 941—944.
5
The fact that there are other felony convictions which would be unaffected by our action seems to me to be immaterial. Petitioner is entitled here and now to start untangling the skein. If we grant relief, we will have undone the wrong which our own delay made possible. We have no way of knowing what other measures may be available to relieve petitioner of the stigma of the other felonies. Only if we were certain (as we are not) that there are or will be none could we fail to give him relief against the wrong done here by the processes of the law.
| 89
|
362 U.S. 607
80 S.Ct. 900
4 L.Ed.2d 985
Victor Donald WILDEv.WYOMING et al.
No. 645, Misc.
Decided May 16, 1960.
Victor Donald Wilde, pro se.
Messrs.
Norman B. Gray, Atty. Gen. of Wyoming, and W. M. Haight, Deputy Atty. Gen., for respondents.
PER CURIAM.
1
The motion for leave to proceed in forma pauperis and the petition for writ of certiorari are granted. In petitions for writ of habeas corpus, filed with the Second Judicial District Court of the State of Wyoming and with the Wyoming Supreme Court, the petitioner alleged, among other grounds for relief, that his plea of guilty to second degree murder in December 1945, upon which he received a life sentence, was induced when he 'had no counsel present' and that the prosecutor wilfully suppressed the testimony of two eyewitnesses to the alleged crime which would have exonerated the petitioner. It does not appear from the record that an adequate hearing on these allegations was held in the District Court, or any hearing of any nature in, or by direction of, the Supreme Court. We find nothing in our examination of the record to justify the denial of hearing on these allegations. The judgment is therefore vacated and the case is remanded for a hearing thereon. Com. of Pennsylvania ex rel. Herman v. Claudy, 350 U.S. 116, 76 S.Ct. 223, 100 L.Ed. 126; Sublett v. Adams, 362 U.S. 143, 80 S.Ct. 527, 4 L.Ed.2d 527.
2
Judgment vacated and case remanded.
| 12
|
362 U.S. 525
80 S.Ct. 901
4 L.Ed.2d 931
James Ivey WYATT, Petitioner,v.UNITED STATES of America.
No. 119.
Argued Jan. 13, 1960.
Decided May 16, 1960.
Robert R. Rissman and Fred Okrand, Los Angeles, Cal., for petitioner.
Mr. Roger G. Connor, Juneau, Alaska, for respondent.
Mr. Justice HARLAN delivered the opinion of the Court.
1
Petitioner was tried and convicted of knowingly transporting a woman in interstate commerce for the purpose of prostitution, in violation of the White Slave Traffic Act, 18 U.S.C. § 2421, 18 U.S.C.A. § 2421. At the trial, the woman, who had since the date of the offense married the petitioner, was ordered, over her objection and that of the petitioner, to testify on behalf of the prosecution.1 The Court of Appeals, on appeal from a judgment of conviction, affirmed the ruling of the District Court. 263 F.2d 304. As the case presented significant issues concerning the scope and nature of the privilege against adverse spousal testimony, treated last Term in Hawkins v. United States, 358 U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125, we granted certiorari. 360 U.S. 908, 79 S.Ct. 1299, 3 L.Ed.2d 1259. We affirm the judgment.
2
First. Our decision in Hawkins established, for the federal courts, the continued validity of the common-law rule of evidence ordinarily permitting a party to exclude the adverse testimony of his or her spouse. However, as that case expressly acknowledged, the common law has long recognized an exception in the case of certain kinds of offenses committed by the party against his spouse. Id., 358 U.S. at page 75, 79 S.Ct. at page 137, citing Stein v. Bowman, 13 Pet. 209, 221, 10 L.Ed. 129. Exploration of the precise breadth of this exception, a matter of some uncertainty, see 8 Wigmore, Evidence (3d ed.), § 2239, can await a case where it is necessary. For present purposes it is enough to note that every Court of Appeals which has considered the specific question now holds that the exception, and not the rule, applies to a Mann Act prosecution, where the defendant's wife was the victim of the offense.2 Such unanimity with respect to a rule of evidence lends weighty credentials to that view.
3
While this Court has never before decided the question, we now unhesitatingly approve the rule followed in five different Circuits. We need not embark upon an extended consideration of the asserted bases for the spousal privilege (see Hawkins, supra, 358 U.S. at pages 77—78, 79 S.Ct. at pages 138—139; Wigmore, op. cit., supra, § 2228(3)) and an appraisal of the applicability of each here, id., § 2239, for it cannot be seriously argued that one who has committed this 'shameless offense against wifehood,' id., at p. 257, should be permitted to prevent his wife from testifying to the crime by invoking an interest founded on the marital relation or the desire of the law to protect it. Petitioner's attempt to prevent his wife from testifying, by invoking an asserted privilege of his own, was properly rejected.
4
Second. The witness-wife, however, did not testify willingly, but objected to being questioned by the prosecution, and gave evidence only upon the ruling of the District Court denying her claimed privilege not to testify. We therefore consider the correctness of that ruling.3
5
The United States argues that, once having held, as we do, that in such a case as this the petitioner's wife could not be prevented from testifying voluntarily, Hawkins establishes that she may be compelled to testify. For, it is said, that case specifically rejected any distinction between voluntary and compelled testimony. 358 U.S. at page 77, 79 S.Ct. at page 138. This argument fails to take account of the setting of our decision in Hawkins. To say that a witness-spouse may be prevented from testifying voluntarily simply means that the party has a privilege to exclude the testimony;4 when, on the other hand, the spouse may not be compelled to testify against her will, it is the witness who is accorded a privilege. In Hawkins, the Government took the position that the spousal privilege should be that of the witness, and not that of the party, so that while the wife could decline to testify, she could not be prevented from giving evidence if she elected not to claim a privilege which, it was said, belonged to her alone. Brief for the United States, No. 20, O.T.1958, pp. 22 43. In declining to hold that the party had no privilege, we manifestly did not thereby repudiate the privilege of the witness.
6
While the question has not often arisen, it has apparently been generally assumed that the privilege resided in the witness as well as in the party. Hawkins referred to 'a rule which bars the testimony of one spouse against the other unless both consent,' supra, 358 U.S. at page 78, 79 S.Ct. at page 138. (Emphasis supplied.) See Stein v. Bowman, supra, 13 Pet. at page 223 (wife cannot 'by force of authority be compelled to state facts in evidence'); United States v. Mitchell, supra, 137 F.2d at page 1008 ('the better view is that the privilege is that of either spouse who chooses to claim it'); Wigmore, op. cit., supra, § 2241; McCormick, Evidence, § 66, n. 3. In its Hawkins brief, the Government, while calling for the abolition of the party's privilege, urged that the commonlaw development could be explained, and its policies fully vindicated, by recognition of the privilege of the witness. Brief, pp. 22—25, 33, 42—43; see Hawkins, supra, 358 U.S. at pages 77, and concurring opinion, at page 82, 79 S.Ct. at pages 139, 141. At least some of the bases of the party's privilege are in reason applicable to that of the witness. As Wigmore puts it, op. cit., supra, at p. 264: '(W)hile the defendant-husband is entitled to be protected against condemnation through the wife's testimony, the witness-wife is also entitled to be protected against becoming the instrument of that condemnation,—the sentiment in each case being equal in degree and yet different in quality.' In light of these considerations, we decline to accept the view that the privilege is that of the party alone.
7
Third. Neither can we hold that, whenever the privilege is unavailable to the party, it is ipso facto lost to the witness as well. It is a question in each case, or in each category of cases, whether, in light of the reason which has led to a refusal to recognize the party's privilege, the witness should be held compellable. Certainly, we would not be justified in laying down a general rule that both privileges stand or fall together. We turn instead to the particular situation at bar.
8
Where a man has prostituted his own wife, he has committed an offense against both her and the marital relation, and we have today affirmed the exception disabling him from excluding her testimony against him. It is suggested, however, that this exception has no application to the witness-wife when she chooses to remain silent. The exception to the party's privilege, it is said, rests on the necessity of preventing the defendant from sealing his wife's lips by his own unlawful act, see United States v. Mitchell, supra, 137 F.2d at pages 1008—1009; Wigmore, op cit., supra, § 2239, and it is argued that where the wife has chosen not to 'become the instrument' of her husband's downfall, it is her own privilege which is in question, and the reasons for according it to her in the first place are fully applicable.
9
We must view this position in light of the congressional judgment and policy embodied in the Mann Act. 'A primary purpose of the Mann Act was to protect women who were weak from men who were bad.' Denning v. United States, 5 Cir., 247 F. 463, 465. It was in response to shocking revelations of subjugation of women too weak to resist that Congress acted. See H.R.Rep. No. 47, 61st Cong., 2d Sess., pp. 10—11. As the legislative history discloses, the Act reflects the supposition that the women with whom it sought to deal often had no independent will of their own, and embodies, in effect, the view that they must be protected against themselves. Compare 18 U.S.C. § 2422, 18 U.S.C.A. § 2422 (consent of woman immaterial in prosecution under that section). It is not for us to re-examine the basis of that supposition.
10
Applying the legislative judgment underlying the Act, we are led to hold it not an allowable choice for a prostituted witness-wife 'voluntarily' to decide to protect her husband by declining to testify against him. For if a defendant can induce a woman, against her 'will,' to enter a life of prostitution for his benefit—and the Act rests on the view that he can—by the same token it should be considered that he can, at least as easily, persuade one who has already fallen victim to his influence that she must also protect him. To make matters turn upon ad hoc inquiries into the actual state of mind of particular women, thereby encumbering Mann Act trials with a collateral issue of the greatest subtlety, is hardly an acceptable solution.
11
Fourth. What we have already said likewise governs the disposition of the petitioner's reliance on the fact that his marriage took place after the commission of the offense. Again, we deal here only with a Mann Act prosecution, and intimate no view on the applicability of the privilege of either a party or a witness similarly circumstanced in other situations. The legislative assumption of lack of independent will applies as fully here. As the petitioner by his power over the witness could, as we have considered should be assumed, have secured her promise not to testify, so, it should be assumed, could he have induced her to go through a marriage ceremony with him, perhaps 'in contemplation of evading justice by reason of the very rule which is now sought to be invoked.' United States v. Williams, D.C., 55 F.Supp. 375, 380.
12
The ruling of the District Court was correctly upheld by the Court of Appeals.5
13
Affirmed.
14
Mr. Chief Justice WARREN, with whom Mr. Justice BLACK and Mr. Justice DOUGLAS join, dissenting.
15
Last Term this Court held that a wife could not voluntarily testify against her husband in a criminal prosecution over his objection. Hawkins v. United States, 358 U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125. The Court finds the case at bar so different from Hawkins that it approves overriding not only the husband's objection, but also the wife's. In both cases the husband was prosecuted for violation of the Mann Act, 18 U.S.C. § 2421, 18 U.S.C.A. § 2421. The only relevant difference is that here the wife herself was the person allegedly transported by the husband for purposes of prostitution. Morally speaking, this profanation of the marriage relationship adds an element of the utmost depravity to the ugly business of promoting prostitution. Legally speaking, however, this does not warrant the radical departure from the Hawkins rule which the Court now sanctions.
16
The Court's analysis of the problem here presented is sound in so many ways that the unsoundness of its conclusion is especially disappointing—and somewhat curious. Briefly, that analysis appears to be as follows: The Court accepts the principle that the spousal privilege belongs both to the person charged with the offense, as we held in Hawkins, and also to the witness. Moreover, the Court rejects the notion that the latter may be barred from asserting the privilege simply because, in a given case, it may be improper for the former to invoke it. The defendant may not claim the privilege where he is charged with 'certain kinds of offenses committed * * * against his spouse,' and the Court believes that the instant case involves this type of crime. It apparently recognizes, moreover, that the policy behind this exception may be effectuated in the ordinary situation by giving the injured party the option to testify, without compelling her to testify.1 In this case, however, it concludes that the wife 'should be assumed' to be under the sway of the husband to such an extent that she cannot be entrusted with that choice. Consequently, the trial court—and the prosecutor—must be given the power to protect her against herself by forcing her to testify.
17
The fatal defect in this conclusion lies in the Court's evaluation of the mental state of the wife, an evaluation which finds no support in the record and which cannot properly be justified by any legislative enactment.
18
The Court does not and could not rely upon the record to prove that petitioner's wife was somehow mesmerized by him when she was on the witness stand. The evidence, in point of fact, strongly suggests that the wife played a managerial role in the sordid enterprise which formed the basis for the prosecution.2 Apparently this was the jury's view, since the jurors asked the judge whether it would 'make any difference or—if the woman had anything to do with the instigation or planning * * * .' The judge, of course, instructed then that this would be immaterial, but the jury nevertheless unanimously recommended leniency. Thus this case is a strange vehicle for the Court to use in announcing its 'lack of independent will' theory. Presumably it is to be regarded as the exception which proves the rule.
19
The sole ground assigned by the Court for its decision is that it is a necessary application of the 'legislative judgment underlying the (Mann) Act,' which 'reflects the supposition that the women with whom (Congress) sought to deal often had no independent will of their own, and embodies, in effect, the view that they must be protected against themselves.' In support of this hypothesis, the Court cites legislative history and the fact that, under 18 U.S.C. § 2422, 18 U.S.C.A. § 2422, a companion provision to § 2421, the consent of the woman does not relieve the defendant of criminal responsibility.3 This equation of the legislative judgment involved in fashioning a criminal statute with the judgment involved in the Court's restriction of the husband-wife privilege is, I submit, entirely too facile, for it overlooks the critically different nature of these problems. In assessing the pertinence of the woman's consent to the culprit's criminal responsibility, Congress chose between the interest of society in eradicating the importation and interstate transportation of prostitutes and the interest of women to be protected from clever and unscrupulous profiteers, on the one hand, and the voluntary engagement of women in prostitution on the other. In view of the manifest imbalance of these competing considerations and the difficulty of definition and proof of the type of consent which might conceivably be relevant, it is hardly surprising that Congress passed the Mann Act and made consent entirely immaterial under § 2422. The testimonial privilege, however, presents questions of quite a different order, since there is a significant interest traditionally regarded as supporting the privilege, as we recognized in Hawkins—the preservation of the conjugal relationship. And where the wife refuses to testify, there is strong evidence that there is still a marital relationship to be protected.
20
Not only does prior congressional action provide no support for the Court's decision, but without such support that decision represents an incursion into what is essentially a legislative area. It is true, of course, that federal courts have the authority to interpret the common-law principles of evidence 'in the light of reason and experience.' Fed.Rules Crim.Proc. rule 26, 18 U.S.C.A. This authority, however, must be exercised with a discriminating awareness of the distinction between matters which fall within the special competence of the judiciary and those which are primarily the concern of the legislature. It is more properly Congress' business, not ours, to place comparative values upon the quest for facts in the judicial process as against the safeguarding of the marriage relationship, and to give—or deny expression to what has been termed 'a natural repugnance in every fair-minded person to compelling a wife or husband to be the means of the other's condemnation, and to compelling the culprit to the humiliation of being condemned by the words of his intimate life-partner.' 8 Wigmore, Evidence, 227. That this decision is uniquely legislative and not judicial is demonstrated by the fact that, both in England and in this country, changes in the common-law privilege have been wrought primarily by legislatures.4 And perhaps it is worth noting that the essentials of the privilege have survived with remarkable sturdiness through the course of continued consideration by legislative bodies.5
21
Of particular interest is the past action and attitude of Congress with respect to the privilege. As the Court pointed out in Hawkins, in 1887 Congress passed a statute which permitted either spouse to testify in prosecutions of the other for the crimes of bigamy, polygamy, or unlawful cohabitation, but stipulated that neither should be compelled to testify. 24 Stat. 635. Apparently Congress believed that this provision gave sufficient protection to the spouse-witness, and that the interest of the State in securing convictions was outweighed by the considerations supporting the right of the spouse-witness not to testify against her will. Even more in point is the 1917 legislation by which Congress made spouses competent to testify against each other in prosecutions for the importation of aliens for immoral purposes. 39 Stat. 878—879, re-enacted as 66 Stat. 230, 8 U.S.C. § 1328, 8 U.S.C.A. § 1328. Thus Congress has acted with respect to the scope of the privilege in prosecutions under a statute kindred to § 2421, but has remained silent so far as § 2421 itself is concerned. The negative implication does not require elaboration.6 Moreover, it should be noted that even under § 1328 the testimony of the spouse is made only 'admissible and competent,' not compellable.7
22
In my judgment, the Court in this case strays from the course of appropriate judicial reserve marked by Hawkins. I am unwilling to join in a decision based upon an assumption of fact which is without support in the record and which involves a delicate, and essentially legislative determination. I therefore dissent.
1
Although the record is ambiguous as to the fact and time of petitioner's marriage, we shall consider established, as the Court of Appeals did, the sequence of events stated in the text. Further, the Court of Appeals noted that, while the record did not clearly establish that the petitioner, as well as his wife, claimed a privilege with respect to her testimony, it would assume that he had. 263 F.2d 304, 308. We accept that assumption.
2
United States v. Mitchell, 2 Cir., 137 F.2d 1006; Levine v. United States, 5 Cir., 163 F.2d 992; Shores v. United States, 8 Cir., 174 F.2d 838, 11 A.L.R.2d 635, overruling Johnson v. United States, 8 Cir., 221 F. 250; Pappas v. United States, 9 Cir., 241 F. 665; Hayes v. United States, 10 Cir., 168 F.2d 996.
3
The United States does not question the standing of petitioner to seek reversal because of the allegedly erroneous refusal to respect the privilege of his wife. Since such testimony, even if wrongly compelled, is per se admissible, Funk v. United States, 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369, and relevant, it has been argued that the party has suffered no injury of which he may complain. Wigmore, op. cit., supra, § 2196(2)(a); McCormick, Evidence, § 73; Uniform Rules of Evidence, Rule 40; Am.L.Inst. Model Code of Evidence, Rule 234; Note, 30 Col.L.Rev. 686, 693—694. See, e.g., Turner v. State, 60 Miss. 351, 353. However, as the point has not been briefed or argued, we have thought it appropriate, in view of our disposition of the case on the merits, not to consider the issue of standing, and of course intimate no view on it.
4
Funk v. United States, supra, abolished, for the federal courts, the disqualification or incompetence of the spouse as a witness, thus establishing the admissibility of his or her testimony, and leaving the question one of privilege only.
5
The petitioner's further assertion, that apart from the testimony of the wife there was insufficient corroboration of his admission of transportation, thus fails by its own assumption.
1
Perhaps the Court is merely assuming this to be true arguendo. Since the basic purpose of the exception is to prevent the husband from abusing the wife with impunity, the assumption is amply warranted. See, e.g., Lord Audley's Trial, 3 How.St.Tr. 401, 402, 414 (1631); Bentley v. Cooke, 3 Doug. 422, 424 (1784) ('(T)hat necessity is not a general necessity, as where no other witness can be had, but a particular necessity, as where, for instance, the wife would otherwise be exposed without remedy to personal injury.' Mansfield, L.C.J.); 8 Wigmore, Evidence (3rd ed.), § 2239; Comment, 4 Ark.L.Rev. & Bar Assn.J. 426, 427; Note, 38 Va.L.Rev. 359, 361. All that is necessary to fulfill this purpose is to provide the injured spouse with the means for redress. If she chooses not to utilize that means, there is no greater justification for compelling her testimony in such a case than there is in the normal situation. Although there is concededly authority to the contrary, in my view it is not well reasoned. Since the Court does not disagree, it is unnecessary at this time to discuss the matter in detail.
2
The most important testimony regarding the petitioner's purpose in providing for his wife's transportation was given by a hotel bellboy, who related various conversations which he had with petitioner. The clerk also testified as to his conversations with the wife, and there is little if anything to distinguish the evidence relating to the wife from that relating to the husband.
3
Section 2421, generally speaking, makes it a crime (a) to transport in interstate or foreign commerce any woman for the purpose of prostitution or other immoral purpose, or with the intent of inducing her to engage in prostitution or other immoral practice, and (b) to secure interstate or foreign transportation for any woman for the above purposes or with the above intent. Section 2422, generally speaking, makes it a crime to induce a woman to travel on common carriers in interstate or foreign commerce for the above purposes or with the above intent.
4
Every State has a statute governing the matter. For discussion of these statutes, see 3 Vernier, American Family Laws, 585—586; 2 Wigmore, Evidence, § 488, 8 id., § 2245; 43 Marq.L.Rev. 131, 132; 33 Tulane L.Rev. 884; Note, 38 Va.L.Rev. 359. The many differences among these statutes is further evidence of the divergent views which may be held with respect to the relative importance of the factors involved. It is interesting to note in this connection that apparently only a small minority of States have passed statutes which make the wife competent to testify in a prosecution against her husband for pandering or white slavery when she is the female involved, and only some of these make her compellable as well as competent. See, e.g., Me.Rev.Stat.1954, c. 134, § 22; Ore.Comp.Laws Ann.1940, § 23—921; Utah Code Ann.1943, § 103—51—14; Va.Code 1950, § 18—97; W.Va.Code Ann.1955, §§ 6062, 6063. See also Note, 38 Va.L.Rev. 359, 366. Nor does the comprehensive British legislation give comfort to the Court. For a description of these statutes, see Evidence of Spouses in Criminal Cases, 99 Sol.J. 551. See also Nokes, Evidence, A Century Of Family Law (Graveson and Crane ed.), 146—149; Scots L.T. (1956), 145. Compare Leach v. Rex, (1912) A.C. 305, with Rex v. Lapworth, (1931) 1 K.B. 117. The experience of the Alabama Supreme Court is instructive. That court, in an 'exception of necessity' case, held that the wife was not only competent to testify, but also compellable. Johnson v. State, 94 Ala. 53, 10 So. 427. The Alabama Legislature, however, abolished this decision by statute. Ala.Code, 1940, Tit. 15, § 311.
5
See the sources cited in note 4, supra. To be sure, the privilege has been strongly attacked by commentators, most of whom rely upon Wigmore's treatise. Wigmore's lengthy criticism of the privilege is best summarized in his own words:
'This privilege has no longer any good reason for retention. In an age which has so far rationalized, depolarized, and de-chivalrized the marital relation and the spirit of Femininity as to be willing to enact complete legal and political equality and independence of man and woman, this marital privilege is the merest anachronism, in legal theory, and an indefensible obstruction to truth, in practice.' 8 Wigmore, Evidence, 232.
It is arguable that this is as much an ipse dixit as the statements in favor of the rule which Wigmore criticizes upon that very ground. Id., at 226—228. In any event, it is evident that his conclusion involves value judgments which the legislature is far better adapted to accept or reject than the judiciary.
For a view contrasting with Wigmore's, see Bassett v. United States, 137 U.S. 496, 505—506, 11 S.Ct. 165, 167, 34 L.Ed. 762, where this Court narrowly construed a legislative provision regarding the privilege:
'We do not doubt the power of the legislature to change this ancient and well-supported rule; but an intention to make such a change should not lightly be imputed. It cannot be assumed that it is indifferent to sacred things, or that it means to lower the holy relations of husband and wife to the material plane of simple contract. So, before any departure from the rule affirmed through the ages of the common law * * * can be adjudged, the language declaring the legislative will should be so clear as to prevent doubt as to its intent and limit.'
6
The nature of relevant action by Congress and by the state legislatures, see note 4, supra, distinguishes this case from Funk v. United States, 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369, which held that one spouse was competent to testify on behalf of the other in a criminal trial. As the Court there pointed out, the dispualification was based upon interest, and '(t)he rules of the common law which disqualified as witnesses persons having an interest, long since, in the main, have been abolished both in England and in this country * * *.' Id., 290 U.S. at page 380, 54 S.Ct. at page 215. The contrast between this case and Funk, where the Court was able to rely upon 'the general current of legislation and of judicial opinion,' id., 290 U.S. at page 381, 54 S.Ct. at page 215, is striking. In this connection, perhaps it should be emphasized that the federal decisions cited in note 2 of the Court's opinion stand, as the Court indicates, only for the proposition that a Mann Act prosecution falls within the common-law exception so that the wife may testify, and not for the rule that a wife in such a case may be compelled to testify. But see Shores v. United States, 174 F.2d 838, 841, where the Court of Appeals for the Eighth Circuit stated in dicta that the wife may be compelled to testify in any exception case—a view much broader than that here adopted by this Court.
7
This seems to be the plain meaning of the statutory language, though similar language in state statutes has received both broad and narrow constructions. Compare McCormick v. State, 135 Tenn. 218, 186 S.W. 95, L.R.A.1916F. 382, with Richardson v. State, 103 Md. 112, 117, 63 A. 317, 319—320. For the view of an English court, see Leach v. Rex, (1912), A.C. 305, 311 (not compellable) ('The principle that a wife is not to be compelled to give evidence against her husband is deep seated in the common law of this country, and I think if it is to be overturned it must be overturned by a clear, definite, and positive enactment, not by an ambiguous one * * *' Lord Atkinson). See also 8 Wigmore, Evidence § 2245(a): Note, 38 Va.L.Rev. 359, 362—363.
| 01
|
362 U.S. 600
80 S.Ct. 960
4 L.Ed.2d 980
Harry NEEDELMAN, petitioner,v.UNITED STATES of America.
No. 278.
Supreme Court of the United States
October Term, 1959.
May 16, 1960
Rehearing Denied June 27, 1960.
See 363 U.S. 858, 80 S.Ct. 1606.
Herbert A. Warren, Jr., Miami, Fla., for petitioner.
Oscar H. Davis, Washington, D. C., for respondent.
On writ of certiorari to the United States Court of Appeals for the Fifth Circuit.
PER CURIAM.
1
After hearing oral argument, and further study of the record, we conclude that the record does not adequately present the questions tendered in the petition. Accordingly the writ is dismissed as improvidently granted.
2
Mr. Justice FRANKFURTER, whom Mr. Justice CLARK and Mr. Justice HARLAN join.
3
Considering the volume of cases which invoke the Court's discretionary jurisdiction—as of today 1,092 such cases have been passed on during this Term—it would be indeed surprising if in each Term there were not two or three instances of petitions which, after passing through the preliminary sifting process, did not survive the scrutiny of oral argument. See the cases collected in Rice v. Sioux City Cemetery, 349 U.S. 70, 77-78, 75 S.Ct. 614, 99 L.Ed. 897, and, more recently, Triplett v. Iowa, 357 U.S. 217, 78 S.Ct. 1358, 2 L.Ed.2d 1361; Joseph v. Indiana, 359 U.S. 117, 79 S.Ct. 720, 3 L.Ed.2d 673; and Phillips v. New York, 362 U.S. 456, 80 S.Ct. 874. But this is not one of them. The specific questions which were presented by the petition for certiorari are not now found to be frivolous nor do they raise disputed questions of fact, nor does the record otherwise appropriately preclude answers to them. In my view they call for answers against the claims of the petitioner and I would therefore affirm the judgment. In view of the disposition of the case elaboration is not called for.
| 89
|
362 U.S. 539
80 S.Ct. 926
4 L.Ed.2d 941
Frank C. MITCHELL, Petitioner,v.TRAWLER RACER, INC.
No. 176.
Argued Jan. 21, 1960.
Decided May 16, 1960.
Mr. Morris D. Katz, Boston, Mass., for petitioner.
Mr. James A. Whipple, Boston, Mass., for respondent.
Mr. Justice STEWART delivered the opinion of the Court.
1
The petitioner was a member of the crew of the Boston fishing trawler Racer, owned and operated by the respondent. On April 1, 1957, the vessel returned to her home port from a 10-day voyage to the North Atlantic fishing grounds, loaded with a catch of fish and fish spawn. After working that morning with his fellow crew members in unloading the spawn,1 the petitioner changed his clothes and came on deck to go ashore. He made his way to the side of the vessel which abutted the dock, and in accord with recognized custom stepped onto the ship's rail in order to reach a ladder attached to the pier. He was injured when his foot slipped off the rail as he grasped the ladder.
2
To recover for his injuries he filed this action for damages in a complaint containing three counts: the first under the Jones Act, 46 U.S.C.A. § 688, alleging negligence; the second alleging unseaworthiness; and the third for maintenance and cure. At the trial there was evidence to show that the ship's rail where the petitioner had lost his footing was covered for a distance of 10 or 12 feet with slime and fish gurry, apparently remaining there from the earlier unloading operations.
3
The district judge instructed the jury that in order to allow recovery upon either the negligence or unseaworthiness count, they must find that the slime and gurry had been on the ship's rail for a period of time long enough for the respondent to have learned about it and to have removed it.2 Counsel for the petitioner requested that the trial judge distinguish between negligence and unseaworthiness in this respect, and specifically requested him to instruct the jury that notice was not a necessary element in proving liability based upon unseaworthiness of the vessel. This request was denied.3 The jury awarded the petitioner maintenance and cure, but found for the respondent shipowner on both the negligence and unseaworthiness counts.
4
An appeal was taken upon the sole ground that the district judge had been in error in instructing the jury that constructive notice was necessary to support liability for unseaworthiness. The Court of Appeals affirmed, holding that at least with respect to 'an unseaworthy condition which arises only during the progress of the voyage,' the shipowner's obligation 'is merely to see that reasonable care is used under the circumstances * * * incident to the correction of the newly arisen defect.' 265 F.2d 426, 432. Certiorari was granted, 361 U.S. 808, 80 S.Ct. 70, 4 L.Ed.2d 57, to consider a question of maritime law upon which the Courts of Appeals have expressed differing views. Compare Cookingham v. United States, 3 Cir., 184 F.2d 213, with Johnson Line v. Maloney, 9 Cir., 243 F.2d 293, and Poignant v. United States, 2 Cir., 225 F.2d 595.
5
In its present posture this case thus presents the single issue whether with respect to so-called 'transitory' unseaworthiness the shipowner's liability is limited by concepts of common-law negligence. There are here no problems, such as have recently engaged the Court's attention, with respect to the petitioner's status as a 'seaman.' Cf. Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099; Pope & Talbot, Inc., v. Hawn, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143; United New York and New Jersey Sandy Hook Pilots Ass'n v. Halecki, 358 U.S. 613, 79 S.Ct. 517, 3 L.Ed.2d 541, or as to the status of the vessel itself. Cf. West v. United States, 361 U.S. 118, 80 S.Ct. 189, 4 L.Ed.2d 161. The Racer was in active maritime operation, and the petitioner was a member of her crew.4
6
The origin of a seaman's right to recover for injuries caused by an unseaworthy ship is far from clear. The earliest codifications of the law of the sea provided only the equivalent of maintenance and cure—medical treatment and wages to a mariner wounded or falling ill in the service of the ship. Markedly similar provisions granting relief of this nature are to be found in the Laws of Oleron, promulgated about 1150 A.D. by Eleanor, Duchess of Guienne; in the Laws of Wisbuy, published in the following century; in the Laws of the Hanse Towns, which appeared in 1597; and in the Marine Ordinances of Louis XIV, published in 1681.5
7
For many years American courts regarded these ancient codes as establishing the limits of a shipowner's liability to a seaman injured in the service of his vessel. Harden v. Gordon, Fed.Cas. No. 6,047, 2 Mason 541; The Brig George, Fed.Cas. No. 5,329, 1 Sumn. 151; Reed v. Canfield, Fed.Cas. No. 11,641, 1 Sumn. 195.6 During this early period the maritime law was concerned with the concept of unseaworthiness only with reference to two situations quite unrelated to the right of a crew member to recover for personal injuries. The earliest mention of unseaworthiness in American judicial opinions appears in cases in which mariners were suing for their wages. They were required to prove the unseaworthiness of the vessel to excuse their desertion or misconduct which otherwise would result in a forfeiture of their right to wages. See Dixon v. The Cyrus, 7 Fed.Cas. page 755, No. 3,930; Rice v. The Polly & Kitty, 20 Fed.Cas. page 666, No. 11,754; The Moslem, 17 Fed.Cas. page 894, No. 9,875. The other route through which the concept of unseaworthiness found its way into the maritime law was via the rules covering marine insurance and the carriage of goods by sea. The Caledonia, 157 U.S. 124, 15 S.Ct. 537, 39 L.Ed. 644; The Silvia, 171 U.S. 462, 19 S.Ct. 7, 43 L.Ed. 241; The Southwark, 191 U.S. 1, 24 S.Ct. 1, 48 L.Ed. 65; I Parsons on Marine Insurance (1868) 367—400.
8
Not until the late nineteenth century did there develop in American admiralty courts the doctrine that seamen had a right to recover for personal injuries beyond maintenance and cure. During that period it became generally accepted that a shipowner was liable to a mariner injured in the service of a ship as a consequence of the owner's failure to exercise due diligence. The decisions of that era for the most part treated maritime injury cases on the same footing as cases involving the duty of a shoreside employer to exercise ordinary care to provide his employees with a reasonably safe place to work. Brown v. The D.S. Cage, Cage, 4 Fed.Cas. page 367, No. 2,002; Halverson v. Nisen, 11 Fed.Cas. page 310, No. 5,970; The Noddleburn, D.C., 28 F. 855; The Neptuno, D.C., 30 F. 925; The Lizzie Frank, D.C., 31 F. 477; The Flowergate, D.C., 31 F. 762; The A. Heaton, C.C., 43 F. 592; The Julia Fowler, D.C., 49 F. 277; The Concord, D.C., 58 F. 913; The France, 2 Cir., 59 F. 479; The Robert C. McQuillen, D.C., 91 F. 685.
9
Although some courts held shipowners liable for injuries caused by 'active' negligence, The Edith Godden, D.C., 23 F. 43; The Frank & Willie, D.C., 45 F. 494, it was held in The City of Alexandria, D.C., 17 F. 390, in a thorough opinion by Judge Addison Brown, that the owner was not liable for negligence which did not render the ship or her appliances unseaworthy. A closely related limitation upon the owner's liability was that imposed by the fellow-servant doctrine. The Sachem, D.C., 42 F. 66.7
10
This was the historical background behind Mr. Justice Brown's much quoted second proposition in The Osceola, 189 U.S. 158, 175, 23 S.Ct. 483, 487, 47 L.Ed. 760: 'That the vessel and her owner are, both by English and American law, liable to an indemnity for injuries received by seamen in consequence of the unseaworthiness of the ship, or a failure to supply and keep in order the proper appliances appurtenant to the ship.' In support of this proposition the Court's opinion noted that '(i)t will be observed in these cases that a departure has been made from the Continental Codes in allowing an indemnity beyond the expense of maintenance and cure in cases arising from unseaworthiness. This departure originated in England in the Merchants' shipping act of 1876 * * * and in this country, in a general consensus of opinion among the circuit and district courts, that an exception should be made from the general principle before obtaining, in favor of seamen suffering injury through the unseaworthiness of the vessel. We are not disposed to disturb so wholesome a doctrine by any contrary decision of our own.' 189 U.S. at page 175, 23 S.Ct. at page 487.
11
It is arguable that the import of the above-quoted second proposition in The Osceola was not to broaden the shipowner's liability, but, rather, to limit liability for negligence to those situations where his negligence resulted in the vessel's unseaworthiness. Support for such a view is to be found not only in the historic context in which The Osceola was decided, but in the discussion in the balance of the opinion, in the decision itself (in favor of the shipowner), and in the equation which the Court drew with the law of England, where the Merchant Shipping Act of 1876 imposed upon the owner only the duty to use 'all reasonable means' to 'insure the seaworthiness of the ship.' This limited view of The Osceola's pronouncement as to liability for unseaworthiness may be the basis for subsequent decisions of federal courts exonerating shipowners from responsibility for the negligence of their agents because that negligence had not rendered the vessel unseaworthy. The Henry B. Fiske, D.C., 141 F. 188; Tropical Fruit S.S. Co. v. Towle, 5 Cir., 222 F. 867; John A. Roebling's Sons Co. of New York v. Erickson, 2 Cir., 261 F. 986. Such a reading of the Osceola opinion also finds arguable support in several subsequent decisions of this Court. Baltimore S.S. Co. v. Phillips, 274 U.S. 316, 47 S.Ct. 600, 71 L.Ed. 1069; Plamals v. The Pinar Del Rio, 277 U.S. 151, 48 S.Ct. 457, 72 L.Ed. 827; Pacific S.S. Co. v. Peterson, 278 U.S. 130, 49 S.Ct. 75, 73 L.Ed. 220.8 In any event, with the passage of the Jones Act in 1920, 41 Stat. 1007, 46 U.S.C. § 688, 46 U.S.C.A. § 688, Congress effectively obliterated all distinctions between the kinds of negligence for which the shipowner is liable, as well as limitations imposed by the fellow-servant doctrine, by extending to seamen the remedies made available to railroad workers under the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq.9
12
The first reference in this Court to the shipowner's obligation to furnish a seaworthy ship as explicitly unrelated to the standard of ordinary care in a personal injury case appears in Carlisle Packing Co. v. Sandanger, 259 U.S. 255, 42 S.Ct. 475, 66 L.Ed. 927. There it was said 'we think the trial court might have told the jury that without regard to negligence the vessel was unseaworthy when she left the dock * * * and that if thus unseaworthy and one of the crew received damage as the direct result thereof, he was entitled to recover compensatory damages.' 259 U.S. at page 259, 42 S.Ct. at page 477. This characterization of unseaworthiness as unrelated to negligence was probably not necessary to the decision in that case, where the respondent's injuries had clearly in fact been caused by failure to exercise ordinary care (putting gasoline in a can labeled 'coal oil' and neglecting to provide the vessel with life preservers). Yet there is no reason to suppose that the Court's language was inadvertent.10
13
During the two decades that followed the Carlisle decision there came to be a general acceptance of the view that The Osceola had enunciated a concept of absolute liability for unseaworthiness unrelated to principles of negligence law. Personal injury litigation based upon unseaworthiness was substantial. See, Gilmore and Black, The Law of Admiralty (1957), p. 316. And the standard texts accepted that theory of liability without question. See Benedict, The Law of American Admiralty (6th Ed., 1940), Vol. I, § 83; Robinson, Admiralty Law (1939), p. 303 et seq. Perhaps the clearest expression appeared in Judge Augustus Hand's opinion in The H. A. Scandrett, 2 Cir., 87 F.2d 708:
14
'In our opinion the libelant had a right of indemnity for injuries arising from an unseaworthy ship even though there was no means of anticipating trouble.
15
'The ship is not freed from liability by mere due diligence to render her seaworthy as may be the case under the Harter Act (46 U.S.C.A. §§ 190—195) where loss results from faults in navigation, but under the maritime law there is an absolute obligation to provide a seaworthy vessel and, in default thereof, liability follows for any injuries caused by breach of the obligation.' 87 F.2d at page 711.
16
In 1944 this Court decided Mahnich v. Southern S.S. Co., 321 U.S. 96, 64 S.Ct. 455, 88 L.Ed. 561. While it is possible to take a narrow view of the precise holding in that case,11 the fact is that Mahnich stands as a landmark in the development of admiralty law. Chief Justice Stone's opinion in that case gave an unqualified stamp of solid authority to the view that The Osceola was correctly to be understood as holding that the duty to provide a seaworthy ship depends not at all upon the negligence of the shipowner or his agents. Moreover, the dissent in Mahnich accepted this reading of The Osceola and claimed no more than that the injury in Mahnich was not properly attributable to unseaworthiness. See 321 U.S. at pages 105—113, 64 S.Ct. at pages 460—463.
17
In Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099, the Court effectively scotched any doubts that might have lingered after Mahnich as to the nature of the shipowner's duty to provide a seaworthy vessel. The character of the duty, said the Court, is 'absolute.' 'It is essentially a species of liability without fault, analogous to other well known instances in our law. Derived from and shaped to meet the hazards which performing the service imposes, the liability is neither limited by conceptions of negligence nor contractual in character. * * * It is a form of absolute duty owing to all within the range of its humanitarian policy.' 328 U.S. at pages 94—95, 66 S.Ct. at page 877. The dissenting opinion agreed as to the nature of the shipowner's duty. '(D)ue diligence of the owner,' it said, 'does not relieve him from this obligation.' 328 U.S. at page 104, 66 S.Ct. at page 822.
18
From that day to this, the decisions of this Court have undeviatingly reflected an understanding that the owner's duty to furnish a seaworthy ship is absolute the completely independent of his duty under the Jones Act to exercise reasonable care. Pope & Talbot, Inc., v. Hawn, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143; Alaska Steamship Co. v. Petterson, 347 U.S. 396, 74 S.Ct. 601, 98 L.Ed. 798; Rogers v. United States Lines, 347 U.S. 984, 74 S.Ct. 849, 98 L.Ed. 1120; Boudoin v. Lykes Bros. S.S. Co., 348 U.S. 336, 75 S.Ct. 382, 99 L.Ed. 354; Crumady v. The J. H. Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413; United New York and New Jersey Sandy Hook Pilots Ass'n v. Halecki, 358 U.S. 613, 79 S.Ct. 517, 3 L.Ed.2d 541.
19
There is no suggestion in any of the decisions that the duty is less onerous with respect to an unseaworthy condition arising after the vessel leaves her home port, or that the duty is any less with respect to an unseaworthy condition which may be only temporary. Of particular relevance here is Alaska Steamship Co. v. Petterson, supra. In that case the Court affirmed a judgment holding the shipowner liable for injuries caused by defective equipment temporarily brought on board by an independent contractor over which the owner had no control. That decision is thus specific authority for the proposition that the shipowner's actual or constructive knowledge of the unseaworthy condition is not essential to his liability. That decision also effectively disposes of the suggestion that liability for a temporary unseaworthy condition is different from the liability that attaches when the condition is permanent.12
20
There is ample room for argument, in the light of history, as to how the law of unseaworthiness should have or could have developed. Such theories might be made to fill a volume of logic. But, in view of the decisions in this Court over the last 15 years, we can find no room for argument as to what the law is. What has evolved is a complete divorcement of unseaworthiness liability from concepts of negligence. To hold otherwise now would be to erase more than just a page of history.
21
What has been said is not to suggest that the owner is obligated to furnish an accident-free ship. The duty is absolute, but it is a duty only to furnish a vessel and appurtenances reasonably fit for their intended use. The standard is not perfection, but reasonable fitness; not a ship that will weather every conceivable storm or withstand every imaginable peril of the sea, but a vessel reasonably suitable for her intended service. Boudoin v. Lykes Bros. S.S. Co., 348 U.S. 336, 75 S.Ct. 382, 99 L.Ed. 354.
22
The judgment must be reversed, and the case remanded to the District Court for a new trial on the issue of unseaworthiness.
23
Reversed and remanded.
24
Mr. Justice FRANKFURTER, whom Mr. Justice HARLAN and Mr. Justice WHITTAKER join, dissenting.
25
No area of federal law is judge-made at its source to such an extent as is the law of admiralty. The evolution of judge-made law is a process of accretion and erosion. We are told by a great master that law is civilized to the extent that it is purposefully conscious. Conversely, if law just 'grow'd' like Topsy unreflectively and without conscious design, it is irrational. When it appears that a challenged doctrine has been uncritically accepted as a matter of course by the inertia of repetition—has just 'grow'd' like Topsy—the Court owes it to the demands of reason, on which judicial law-making power ultimately rests for its authority, to examine its foundations and validity in order appropriately to assess claims for its extension.
26
Our law of the sea has an ancient history. While it has not been static, the needs and interests of the interrelated world-wide seaborne trade which it reflects are very deeply rooted in the past. For the most part it has not undergone the great changes attributable to the emergence and growth of industrialized society on land. In the law of the sea, the continuity and persistence of a doctrine, particularly one with international title-deeds, has special significance.
27
The birth of the current doctrine of unseaworthiness, now impressively challenged by Chief Judge Magruder's opinion under review, can be stated precisely: it occurred on May 29, 1922, in Carlisle Packing Co. v. Sandanger, 259 U.S. 255, 42 S.Ct. 475, 66 L.Ed. 927. The action was brought in the Washington state courts by Sandanger, an employee of Carlisle, who was injured while working on its motorboat on a six- or eight-hour trip. The injury occurred when he lighted fuel from a can on board marked 'coal oil' in order to start a cookstove, and it exploded. It appeared thereafter that the can had mistakenly been filled with gasoline. In a suit based on a claim of negligence, Sandanger won a verdict on a finding of negligence, which was challenged in the Supreme Court of Washington on the ground that the exclusively applicable maritime law did not afford relief by way of compensation for negligent injury of an employee. The Washington court held that an injury caused by a negligently created unseaworthy condition was compensable, even when, under the rule laid down in The Osceola, 189 U.S. 158, 23 S.Ct. 483, 47 L.Ed. 760, negligent injury without unseaworthiness would not be. 112 Wash. 480, 192 P. 1005.
28
The matter was dealt with in this Court in the few lines innovating the rule of absolute liability: 'we think the trial court might have told the jury that without regard to negligence the vessel was unseaworthy when she left the dock * * * and that if * * * one of the crew received damage as the direct result thereof, he was entitled to recover compensatory damages.' 259 U.S. at page 259, 42 S.Ct. at page 477. (The full text is quoted in the margin.1) No explication accompanied this dogmatic pronouncement on an issue not presented by an issue of the affirmed judgment. It was strangely deemed sufficient to rely on the unelaborated citation of two cases in this Court (The Silvia, 171 U.S. 462, 464, 19 S.Ct. 7, 8, 43 L.Ed. 241, and The Southwark, 191 U.S. 1, 8, 24 S.Ct. 1, 3, 48 L.Ed. 65) which were concerned not with the rights of seamen but with the shipowner's liability for cargo damage. The abrupt, unreasoned conclusion was reached without benefit of argument: the parties had presented the case solely on the basis on which the action was instituted and in the terms in which it had been decided by the Supreme Court of Washington—liability founded on negligence. Neither our own investigation nor that of the parties here has disclosed a single case in an English or an American court prior to Sandanger in which the absolute duty to provide a seaworthy vessel for cargo carriage and marine insurance contracts was applied to a seaman's suit for personal injury. Sandanger was an unillumined departure in the law of the sea. Reasoned decision of the case before us, in which extension is sought of a rule so dubiously initiated,2 requires that its rational, historical and social basis be scrutinized and not merely accepted as unquestionable dogma.
29
We must take it as established that the petitioner, a seaman employed on the Racer, fell from her rail while using it as a customary stepping place in leaving the vessel; that the resulting injury was caused by the presence of fish spawn on the rail rendering it slippery; that it was not negligent for respondent to allow the spawn to get on and remain on the rail.3 It further appears that the spawn was deposited on the rail shortly before the injury, when bags of it were handed across the rail in the course of the unloading of the vessel.
30
The claim now before the Court rested on the alleged unseaworthiness of the vessel. Petitioner asserts that if the presence of spawn on the rail rendered it not reasonably fit for its function, then, without more—and particularly without regard to the length of time the spawn had remained on the rail respondent was liable to compensate him for his consequent injuries. He asserts that these conclusions flow from the rule of Sandanger, supra, that the owner's liability to compensate seamen for injuries caused by the unseaworthiness of his vessel is 'absolute.'
31
Respondent contends, and the lower courts held, that the fact that spawn on the rail caused petitioner's injury is not, of itself, sufficient to establish respondent's liability. It urges two related propositions in the alternative in support of its judgment. The first of these—the express ground of Judge Magruder's decision and the primary ground urged here in its support—is that since this unseaworthy condition concededly did not arise until after the commencement of the voyage it did not create liability unless it persisted so long before the injury as to have afforded the owner notice of its existence. This view makes liability for an unseaworthy condition created without negligence after the start of the voyage turn on the existence of negligence in permitting the condition to persist. Respondent also urges that, even if negligently caused or allowed to persist, this transitory hazard arising after the start of the voyage in equipment otherwise sound was not an unseaworthy condition.
32
We are thus confronted with two questions of the nature and scope of the duty of a shipowner to seamen to provide a seaworthy ship. The decision in Sandanger, supra, in light of the facts from which its generalization was drawn, certainly did not foreshadow the result urged by petitioner, a result characterized by Judge Magruder as 'startlingly opposed to principle.' 265 F.2d at page 432. There was in that case no such analysis of the reasons upon which the rule announced was rested as to govern or even suggest the present decision. The Court does not deny force to the distinctions urged by respondent, but regards the questions now presented as foreclosed by Alaska S.S. Co. v. Petterson, 347 U.S. 396, 74 S.Ct. 601, 98 L.Ed. 798. In fact, today's decision rests on an unrevealing per curiam opinion, itself founded on prior decisions affording no justification for the result here.
33
As the opinion of the Court of Appeals shows, 9 Cir., 205 F.2d 478, that case held a shipowner liable for injuries to a longshoreman caused by defective equipment brought on board his vessel by a contract stevedore for use in loading operations. The owner gave the stevedore permission at his option to substitute his own equipment for that of the vessel, and the equipment which caused the injury was a snatch-block, standard ships' equipment, supplied pursuant to that permission. Following Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099, and Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143, which had held that the owner's duty to provide a seaworthy ship runs to non-seamen engaged in seamen's work, Petterson at best added to this doctrine the rule that that duty could not be delegated by giving the stevedore control over loading operations and an option to substitute its own equipment for that of the vessel. The parties did not raise or argue either (1) that the vessel was seaworthy at the start of her voyage and no absolute liability attached to subsequently arising conditions, or (2) that because the condition was temporary, in the sense pertinent here, there was no unseaworthiness. There is therefore no foundation, either in what the per curiam revealed or in the history of the case, to warrant the inference that the Court was conscious of the distinctions now squarely pressed upon us, much less that it rejected them. Such a conclusion is the more fanciful because, even had the Court considered and accepted the contentions now urged, it might well have found them insufficient to avoid liability and have held that, by giving permission to have substitution made for warranted ships' equipment, the owner adopted the substitute as his own.
34
In view of the insubstantial foundation in authority of what is today decided, I deem it incumbent upon me to examine the history of the evolution of the doctrine of absolute liability in injury cases upon which petitioner rests his claim.
35
Although it was reasonably well established by the middle of the nineteenth century that the maritime carrier of goods, in the absence of express provisions to the contrary, warranted their safe delivery against all hazards save acts of God or the public enemy, see, e.g., The Propeller Niagara v. Cordes, 21 How. 7, 23, 16 L.Ed. 41, the origins of such strict liability are not entirely clear. The English admiralty courts apparently confined the shipowner's liability to losses resulting from his fault or that of his servants. See Fletcher, The Carrier's Liability, 51—79. The imposition of stricter liability appears to have begun not in the admiralty at all, but in the common-law courts as the jurisdiction of the admiral gradually declined. See Mears, The History of the Admiralty Jurisdiction, in 2 Select Essays in Anglo-American Legal History, p. 312 et seq. (originally published in Roscoe, Admiralty Jurisdiction and Practice, pp. 1—61). They increasingly regarded the carrier by sea as a common carrier, whether or not he fitted the traditional concept, see Paton, Bailment in the Common Law, 233—236, and it does not appear that they predicated his strict liability to redeliver cargo on any peculiarly maritime aspects of the carriage.
36
In any event, with the sanction of the English—and, to a lesser extent, the American—courts it early became possible for the maritime carrier to use the contract of carriage by way of limiting this extraordinary liability, and the significance of a carrier's liability as such shrank. See Pope v. Nickerson, Fed.Cas. No. 11,274, 3 Story 465. Disclaimers of any duty beyond the exercise of diligence were valid and common, and, in England, disclaimers of liability even for negligent damage were sustained. See I Parsons, Maritime Law, 177—179, n. 1; compare, In re Missouri S.S. Co., 42 Ch.D. 321 (1889), with Liverpool & G. W. Steam Co. v. Phenix Ins. Co., 1889, 129 U.S. 397, 438—439, 9 S.Ct. 469, 470—471, 32 L.Ed. 788.
37
It was against the background of such limitations of the carrier's strict duty to redeliver cargo, and in derogation of them, that the more limited, though absolute, duty to furnish a seaworthy vessel emerged. Unlike the strict duty imposed on carriers in general to redeliver cargo, it was a concept rooted in the peculiarly maritime hazards of carriage by sea. It expressed, and became the focus of, American judicial resistance to broad disclaimers, and was implied despite relatively specific limitations in the contract of carriage. See, e.g., The Caledonia, 157 U.S. 124, 137, 15 S.Ct. 537, 542, 39 L.Ed. 644. The reasons for the development are evident. The hazards of the sea were great even in vessels properly maintained and outfitted; in imperfect ships they became intolerable. Since at the start of a voyage the familiar facilities of the home port were ordinarily available to the owner to permit him to reduce the risk, it was not unreasonable to require him at the peril of extensive liability to make the vessel seaworthy—reasonably fit for the intended voyage, see The Silvia, 171 U.S. 462, 464, 19 S.Ct. 7, 8, 43 L.Ed. 241; The Southwark, 191 U.S. 1, 9, 24 S.Ct. 1, 3, 48 L.Ed. 65—and thereby remove a profitable temptation to add to the hazards of the sea. Though the fact that the duty was absolute is in some measure indicative of an unstated determination that the carrier's ability to distribute the risk justified regarding him as an insurer, cf. Seas Shipping Co. v. Sieracki, 328 U.S. 85, 94, 66 S.Ct. 872, 877, 90 L.Ed. 1099, the dominant reason appears to have been that under the conditions existing before the start of a voyage it was fair to demand the increment of additional safety which could be obtained by barring the defense of due care. The instances of defects in fact undiscoverable under the comparatively ideal pre-voyage circumstances would be predictably low, and the extraordinary character of the risk, coupled with the exclusive knowledge and control of the owner and his ability to contract away the risk in his dealings with suppliers and service companies, justified imposing the burden on him.
38
This judicial evolution was doubtless influenced as well by the similarly absolute implied warranty in contracts of marine insurance by which the assured, whether shipowner, charterer, or shipper, warranted the seaworthiness of the vessel at the start of its voyage as a condition upon the attaching of the policy. The origin of this rule has been attributed to the customary understanding of the risks actually undertaken by the insurer. See, e.g., Tetreault, Seamen, Seaworthiness, and the Rights of Harbor Workers, 39 Cornell L.Q. 381, 395. But whatever role custom may have played, the implied warranty appears to have sprung, at least in part, from considerations of policy unrelated to the insurer's understanding. 'I have endeavoured, both with a view to the benefit of commerce and the preservation of human life, to enforce that doctrine (of the implied warranty of initial seaworthiness) as far as, in the exercise of a sound discretion, I have been enabled to do so. * * *' Lord Eldon, in Douglas v. Scougall, 4 Dow. 269, 276 (1816); cf. The Caledonia, 157 U.S. 124, 15 S.Ct. 537, 39 L.Ed. 644.
39
Toward the end of the nineteenth century these different considerations, which had given rise to a single duty, became inperceptibly fused. This Court held that the warranty of assured to insurer was identical to that of carrier to shipper, even explaining the carrier's implied promise in terms of the undertaking of the shipper. The Caledonia, 157 U.S. 124, 15 S.Ct. 537, 39 L.Ed. 644.
40
The divergence of attitude between American and English courts which appeared in the scope of the contractual disclaimers of liability each would recognize, was more sharply exemplified by the scope they respectively attributed to the warranty of seaworthiness in cargo and insurance cases. By 1853 English courts had clearly limited the warranty to the condition of the vessel at the start of the voyage, while recognizing that American courts had just as clearly held the owner liable and the insurer exonerated for losses occasioned by unseaworthy conditions subsequently arising and allowed to persist through the negligence of responsible servants. See, e.g., Baron Parke in Gibson v. Small, 4 H.L.Cas. 353, 398—399; I Parsons, Marine Insurance, 381—383; Union Ins. Co. v. Smith, 124 U.S. 405, 427, 8 S.Ct. 534, 546, 31 L.Ed. 497. The English courts were strongly influenced by the inherent limitations of the owner's actual control of a vessel (see, e.g., Gibson v. Small, supra, at 404); while the American so highly esteemed the protection of life and property, presumably to be so gained, as to have held the owner in effect absolutely liable to select master and crew who would in fact diligently see to the continuing seaworthiness of the vessel. In America, the result of the conflicts created by this divergence in the law of two maritime nations was the Harter Act of 1893, 27 Stat. 445, 46 U.S.C.A. §§ 190—195. The carrier was thereby permitted to disclaim any duty other than to exercise due diligence in the preparation of the vessel. If he in fact exercised such diligence, he was freed of liability for losses 'resulting from faults or errors in navigation or in the management' of the vessel. The purpose and effect of the Act was to strike a compromise between the English and American standards so as to reduce conflicts between them.4 See Gilmore and Black, The Law of Admiralty, 122. One collateral effect of the Act was largely to remove from concern of the courts questions of liability for cargo damage caused by unseaworthy conditions arising after the start of the voyage. Cf. The Silvia, 171 U.S. 462, 463, 19 S.Ct. 7, 43 L.Ed. 241; May v. Hamburg-Amerikanische, 290 U.S. 333, 54 S.Ct. 162, 78 L.Ed. 348. After, and probably because of, the Harter Act, the statement frequently appears in cargo-damage cases that the warranty of seaworthiness applies only at the start of the voyage; subsequently arising deficiencies are treated as aspects of 'navigation or management.' See, e.g., May v. Hamburg-Amerikanische, supra, 290 U.S. at page 345, 54 S.Ct. at page 165; The Steel Navigator, 2 Cir., 1928, 23 F.2d 590, 591. However, even that Act did not diminish the tendency of the admiralty courts to find that a contractual disclaimer did not apply to the warranty of seaworthiness at the start of the voyage, and the absolute warranty of initial seaworthiness therefore remained. See, e.g., The Carib Prince, 170 U.S. 655, 18 S.Ct. 753, 42 L.Ed. 1181.
41
The most striking differences between English and American courts as to the scope of the warranty of seaworthiness occurred in the area of compensation for seamen's injuries.5 The law of both nations early recognized unseaworthiness as a condition upon the contract of employment, which, upon the employer's default, operated to exonerate the seaman from forfeiture of wages if he quit the ship. 1 Parsons, Maritime Law, 455; The Arizona v. Anelich, 298 U.S. 110, 121—122, note 2, 56 S.Ct. 707, 710—711, 80 L.Ed. 1075. But though the duty to provide a seaworthy vessel was thus held to run to seamen, the seaman's remedy was for a considerable time restricted to this limited form of self-help.
42
In England the question of a seaman's right to compensatory damages for injuries resulting from the unseaworthiness of the vessel was first presented for decision in Couch v. Steele, (1854) 3 El. & Bl. 402. The plaintiff claimed compensation for damage from illness brought about by the leaky condition of the vessel. The court, apparently assuming that the vessel was unseaworthy, declared that the warranty did not run to seamen, for the reason that it was unknown whether the deficiencies of the vessel were taken into account in the contract for wages. Coleridge, J. (at 408), distinguished the insurance warranty as turning on doctrines which 'have no place in any other branch of the law,' and confined the duty of owner to seamen to the scope of master-servant law on land. A similar disposition to analogize maritime to non-maritime activity on the part of the English common-law courts was manifested in Readhead v. Midland R. Co., (1869) L.R., 4 Q.B. 379, where the claim was advanced that a railway passenger injured when a wheel broke was, by analogy to the warranty of seaworthiness as to cargo, entitled to compensation for his injuries. The court disposed of the contention by describing the warranty of seaworthiness as solely responsive to the need early noted in Coggs v. Bernard, (1703) 2 Ld.Raym. 909, to prevent common carriers generally from colluding with thieves.
43
Couch v. Steele, supra, was modified by the Merchant Shipping Act of 1876, 39 & 40 Vict., c. 80, sec. 5, by which a duty was imposed on the owner to exercise due care to provide and maintain a seaworthy vessel. For injuries resulting from breach of the duty, a seaman could recover compensatory damages. But even that Act was narrowly construed as to conditions arising after the start of the voyage in the course of operation of the vessel. See Hedley v. Pinkney & Sons S.S. Co., (1894) A.C. 222. In the United States, Couch v. Steele, supra, was early disapproved. See, e.g., The Noddleburn, D.C.Or.1886, 28 F. 855; 2 Parsons, Shipping and Admiralty, 78. The liability which lower courts generally found to exist, however, was not founded upon the absolute warranty rejected in Couch, but upon fault. See, e.g., The Noddleburn, supra; The Flowergate, D.C.E.D.N.Y.1887, 31 F. 762; The Lizzie Frank, D.C.S.D.Ala.1887, 31 F. 477, 479 (which followed Readhead v. Midland R. Co., supra, in explaining the cargo warranty as stemming only from common-carrier status).
44
In 1903 this Court decided The Osceola, 189 U.S. 158, 23 S.Ct. 483, 47 L.Ed. 760, and laid down its oft-cited four propositions (189 U.S. at page 175, 23 S.Ct. at page 487) governing the liability of vessel and owner to injured seamen. As has frequently been noted, the second proposition, a dictum declaring a right to indemnity for injuries 'received by seamen in consequence of the unseaworthiness of the ship, or a failure to supply and keep in order the proper appliances appurtenant to the ship' (189 U.S. at page 175, 23 S.Ct. at page 487) does not appear to have announced a doctrine of liability without fault. No cargo or insurance cases were relied upon, and none of the cases cited had found such liability. The only reliance on English law was on the Act of 1876, supra, which defined the duty as requiring the exercise of due diligence to render the vessel seaworthy. It appears instead that it was the intention of The Osceola to adopt the analysis of Judge Addison Brown in The City of Alexandria, D.C.S.D.N.Y.1883, 17 F. 390, which it cited, under which a seaman could recover only for injuries resulting from that limited species of negligence which resulted in an unseaworthy condition. Such is the tenor of the third and fourth propositions of The Osceola.
45
After The Osceola a number of decisions denied recovery for negligently caused injury on the ground that unseaworthiness was absent. See, e.g., Tropical Fruit S.S. Co. v. Towle, 5 Cir., 1915, 222 F. 867; John A. Roebling's Sons Co. of New York v. Erickson, 2 Cir., 1919, 261 F. 986. After an abortive attempt by Congress, see 38 Stat. 1164, 1185; Chelentis v. Luckenbach S.S. Co., 247 U.S. 372, 38 S.Ct. 501, 62 L.Ed. 1171, there followed in 1920 the remedial legislation now familiarly known as the Jones Act, extending relief against the owner for all forms of negligent injury to seamen, free of the so-called fellow-servant rule of admiralty.
46
It was against this background that Carlisle Packing Co. v. Sandanger, 259 U.S. 255, 42 S.Ct. 475, 66 L.Ed. 927, quite out of the blue, citing cargo cases, declared that the owner's duty to a seaman to provide a seaworthy vessel was as absolute as that established by the implied warranty as to cargo.6 In so ruling, the Court gave expression to a policy, long discernible in American admiralty decisions, of implying the warranty not merely because of the customary expectations of the parties to an agreement—the English court's basis for rejection of the warranty in Couch v. Steele, supra—but as well in order to increase protection to life and property against the hazards of the sea. They had previously manifested this conception of the source of the warranty in the degree to which they departed from the English common-law courts in confining attempted disclaimers of the warranty, and in their willingness to find a duty to maintain the condition of seaworthiness throughout the voyage.
47
The reasons which justified the implication on grounds of policy as to cargo, justified it as to employed seamen; and there was no countervailing extensive increase in the nature of the duty to give the Court serious pause in extending to the protection of life a policy designed in significant part for the protection of property. Despite the Harter Act, the absolute warranty of initial seaworthiness as to cargo survived; and under the strict rules of shipboard organization and conduct, the safety of the seaman was, in a very real sense, subject to the same hazards.
48
It was predictable that there would be few, if any, matters with which the owner would have to be concerned under the warranty so extended, that he could reasonably have ignored as creating no threat to the safety of cargo. At the start of the voyage, his opportunity would be ample, as in the case of cargo, to undertake that effective diligence which would in fact avoid all but a very few injuries resulting from unseaworthiness; and he would be able to protect himself from the consequences of most deficiencies undetectable by him by agreement with suppliers, or service companies, and from the rest by the purchase of insurance. The additional burden created by extension of the warranty to seamen was thus not unduly heavy; and the interest to be vindicated had for long been a traditional concern of American admiralty.
49
If Sandanger now stood alone, it would be plain that the absolute warranty it announced was no greater in scope than the warranty as to cargo which pre-existed the Harter Act of 1893, and the question now presented—whether the warranty is also absolute as to subsequently arising conditions—would clearly present a novel issue for decision. Subsequent decisions in this Court have not deliberately closed the gap.
50
It was twenty-two years before the question of the existence and scope of absolute liability came before this Court again, and in the interim the lower courts manifested sharp disagreement whether it existed at all. Compare The Rolph, 9 Cir., 1924, 299 F. 52, and The Tawmie, 5 Cir., 1936, 80 F.2d 792, with The H. A. Scandrett, 2 Cir., 1937, 87 F.2d 708. (In this case Judge Augustus N. Hand followed Sandanger in relying upon cargo cases.)
51
In 1944 this Court decided Mahnich v. Southern S.S. Co., 321 U.S. 96, 64 S.Ct. 455, 88 L.Ed. 561. The suit was brought by a seaman under the general maritime law (the statute of limitations having run on Jones Act claims) for injuries which he incurred at sea when a rope, with which the staging on which he was working fifteen feet over the deck was rigged, parted and he fell. The mate in charge had taken the rope, which was unused, but at least two years old, from the Lyle Gun (a life-saving device) box. After the accident it appeared that the rope was decayed.
52
The District Court, 45 F.Supp. 839, found that the mate's selection of the rope was negligent but dismissed the libel on the ground that, apart from the Jones Act, negligent injury alone was not compensable and that the vessel, since it had other good rope on board sufficient for the job, was not unseaworthy. The Court of Appeals affirmed. 3 Cir., 135 F.2d 602. It assumed, without deciding, that the rope was negligently selected (a dissenting judge found no negligence, 135 F.2d at page 605), and agreed with the District Court's conclusion that the vessel was not unseaworthy. Though it reversed, this Court, too, found it unnecessary to decide the contested question of negligence. It gave as its primary reason that 'the exercise of due diligence does not relieve the owner of his obligation to the seaman to furnish adequate appliances.' 321 U.S. at page 100, 64 S.Ct. at page 458. Although this statement was the critical major premise of an opinion which went on to decide that such absolute liability would not be barred by the mate's intervening negligence, it was rested primarily on Carlisle Packing Co. v. Sandanger, supra, without further explanation.
53
There is no more disclosure in the opinion or history of this case than there was in Sandanger to warrant attributing to this statement a deliberate or authoritative ruling that liability is absolute for all injuries resulting from unseaworthy conditions. Confined to the facts of the case, the decision that intervening negligence would not constitute a defense to an action for injuries resulting from an unseaworthy condition is consistent with the rule of the cargo and insurance cases, confining the absolute warranty to damage resulting from initial unseaworthiness. The rope, which was new, had decayed from overlong or improper storage, not from use, and was, it is right to assume defective from the start of the voyage. Cf. The Edwin I. Morrison, 153 U.S. 199, 211, 14 S.Ct. 823, 826, 38 L.Ed. 688.
54
Moreover, a claim for extending the scope of the absolute warranty was not raised or argued by the parties. They simply assumed that liability would follow unseaworthiness unless intervening negligence was a defense. Their major concern, and the primary focus of the Court's attention, was the earlier case of Plamals v. The Pinar Del Rio, 277 U.S. 151, 48 S.Ct. 457, 72 L.Ed. 827, where it was held, on substantially identical facts, that the mate's negligence did not create liability for unseaworthiness where there was an adequate supply of sound rope on board. In Mahnich, Plamals was held to have rested on one of two mistaken premises: (1) either that the question of seaworthiness turned solely on the supply of rope and not on the condition of the appliance rigged in the course of the voyage, or (2) that liability for provision of an unseaworthy appliance in the course of a voyage would be barred where the unseaworthiness resulted from the mate's negligence. The Court in Mahnich was not remotely called upon, in rejecting those premises as it did, to consider whether the absolute warranty of seaworthiness extends to conditions arising after the commencement of the voyage. Finally, there is evidence that if the Court made any assumption about the scope of the warranty it assumed that, as in the case of cargo until the Harter Act, it was absolute, but only as to conditions existing at the commencement of the voyage. It said:
55
'It required the Harter Act to relax the exacting obligation to cargo of the owner's warranty of seaworthiness of ship and tackle. That relaxation has not been extended, either by statute or by decision, to the like obligation of the owner to the seaman' (321 U.S. at page 101, 64 S.Ct. at page 458).
56
Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099, is no better authority for petitioner's contentions here. The action was instituted by a longshoreman who was injured while loading respondent's vessel, when a forged shackle supporting the vessel's ten-ton boom gave way because of a latent defect in the forging. The defect had existed from the time of the construction of the ship. Both parties conceded that the vessel was unseaworthy, and that if a seaman had been injured in the same way he could have recovered compensatory damages. The District Court gave judgment for the owner on the ground that it was not negligent for it to have failed to discover the defect. 57 F.Supp. 724. The Court of Appeals reversed, on the ground that Sieracki was entitled to recover under the warranty of seaworthiness. 3 Cir., 149 F.2d 98. The turning-point of the case in this Court was whether the warranty of seaworthiness, concededly absolute on the facts covered longshoremen doing seamen's work.
57
The Court's extended discussion of the sources and rationale of the warranty is entirely consistent with the history noted above. 328 U.S. at pages 90—96, 66 S.Ct. at pages 875—878. Nothing that was said or implied casts any light whatever on the question whether the initial absolute warranty carried over by Sandanger from the cargo cases extends to subsequently arising conditions, unless, as in Mahnich, the Court's equation of the warranty running to seamen with the pre-Harter Act warranty as to cargo bespeaks its assumption that the warranty was absolute only as to the start of the voyage.
58
No other case in this Court is further enlightening on the question of the scope of the absolute warranty. Alaska S.S. Co. v. Petterson, 347 U.S. 396, 74 S.Ct. 601, 98 L.Ed. 798, has already been discussed. See also Rogers v. United States Lines, 347 U.S. 984, 74 S.Ct. 849, 98 L.Ed. 1120. Pope & Talbot, Inc., v. Hawn, 346 U.S. 406, 74 S.Ct. 202, 98 L.Ed. 143, is irrelevant here. The injury occurred in port in the course of loading the vessel; the question of unseaworthiness was not an issue in this Court; and the jury had found the defendant guilty of negligence. Boudoin v. Lykes Bros. S.S. Co., 348 U.S. 336, 75 S.Ct. 382, 99 L.Ed. 354, concerned unseaworthiness predicated upon the incompetency of a crew member which, as the Court found, was a traditional aspect of the initial warranty of seaworthiness. Crumady v. The Joachim Hendrik Fisser, 358 U.S. 423, 79 S.Ct. 445, 3 L.Ed.2d 413, found unseaworthiness as a result of the vessel's failure to use 'safe practice,' 358 U.S. at page 426, n., 79 S.Ct. at page 447, in the preparation of a winch for unloading operations, on its face a negligent act, although its negligent character was not the overt basis of the decision. None of the several parties to the case raised the objections now urged upon us, and no more than in Manich were they considered or adjudicated.
59
Against this background of prior adjudications it assumes what is required to be established to assert that '(t)here is no suggestion in any of the decisions that the duty is less onerous with respect to an unseaworthy condition arising after the vessel leaves her home port. * * *' In fact, there is no overt suggestion in any of our decisions that the duty is not less onerous, and the origin of the duty in cargo and marine insurance cases strongly suggests that it is. Even the admiralty courts of the nineteenth century, during the growth of American shipping found no justification in peculiarly maritime concerns for imposing an absolute duty at all times after the start of the voyage to maintain the vessel in seaworthy condition. Once the vessel was made safe, it was thought sufficient to entrust its safe conduct to an appropriate standard of diligence. This view undoubtedly involved the weighing of a number of factors, all of which remain pertinent today: the unavailability of the familiar facilities of the home port, or of any port, to make inspections or repairs; the unfairness of holding the vessel accountable for losses resulting from damage, detectable or otherwise, caused, without fault of the vessel, by perils of the sea; the likelihood that those whose safety depends on the vessel will in any event use every reasonable precaution to preserve it, and that in the circumstances of operation of the vessel no additional care could be exacted by the imposition of absolute liability; and the determination that to impose absolute liability for injuries caused by defects arising without fault in the complex operation of a vessel would be, in all the circumstances, unduly burdensome.
60
This latter consideration is especially pertinent in cases of so-called 'transitory' unseaworthiness such as is before us. For disposition of this case it may be assumed, though with considerable misgiving, that the condition here created wholly without fault after the journey had begun rendered the vessel unseaworthy. But the unreasonableness of imposing liability on the vessel for injuries occasioned by the unavoidable consequences of its proper operation need not therefore be ignored. No compensating increase in the caution actually to be exercised can be anticipated as a result of the creation of such a duty. Nor can the owner pass along the risk to suppliers or service companies. The only rational justification for its imposition is that the owner is now to be regarded as an insurer who must bear the cost of the insurance. But the Court offers no reason of history or policy why vessel owners, unlike all other employers, should, in circumstances where the only benefit to be gained is the insurance itself, be regarded by law as the insurers of their employees. If there were a sufficient reason for the judicial imposition of such a duty, it would be arbitrary in the extreme to limit it to cases where by chance the injury occurs through the momentary inadequacy of a prudently run vessel. All accidental injury should fall within such a humanitarian policy provided only that it occurs in the service of the ship. It was such a policy which from the earliest times has justified the imposition of the duty to provide maintenance and cure; but nothing in the nature of modern maritime undertakings justifies extending to compensation a form of relief which for more than five centuries has been found sufficient.
61
I would affirm the judgment below.
62
Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER and Mr. Justice WHITTAKER join, dissenting.
63
In joining my Brother FRANKFURTER'S dissent, I wish to add a few words. I believe the Court's decision not only finds no support in the past cases, but also is unjustified in principle, and is directed at ends not appropriately within our domain. The Second Circuit's decision in Poignant v. United States, 225 F.2d 595, provides a useful point of departure for what I have to say.
64
In Poignant the libellant, a crew member, slipped on a small piece of garbage lying in a passageway of the ship. The vessel lacked garbage chutes, and the garbage was pulled, in cans, through the passageway to a railing, where it was jettisoned. The Court of Appeals first expressed the view that any unseaworthy condition which existed had in all probability arisen after the voyage had commenced. It said, much as the Court now holds, that Alaska Steamship Co. v. Petterson, 347 U.S. 396, 74 S.Ct. 601, 98 L.Ed. 798, required it to apply a rule of absolute liability nonetheless. It then put, as the critical issue, the question whether the presence of some garbage in a public passageway constituted an unseaworthy condition, and, finding the matter to turn on an issue of fact, remanded the case for trial. However, it is important to note the manner in which the court dealt with the problem. Although at the outset of the opinion the allegedly unseaworthy condition was assumed to be the presence of garbage in a passageway, 225 F.2d at page 597, the remand was in fact directed to the question whether the absence of garbage chutes rendered the vessel not reasonably fit for the voyage, and therefore unseaworthy. Id., at page 598. This, of course, would be a condition going to the proper outfitting of the vessel for sea travel, and a clear case of initial unseaworthiness. In such event, the injury would have been the proximate result of that unseaworthiness, for it was by reason of the lack of chutes that garbage was carried through the passageways at all.
65
For me this approach indicates the rule which should govern the case before us. Had the petitioner contended and proved that a properly outfitted trawler of this type should have had a particular device for unloading fish, or an alternative means of facilitating petitioner's egress from the vessel, so that either the railing would not have been slippery or the petitioner would not have been required to use the railing in debarking, the case would have been governed by the absolute liability rule of Sandanger and its successors, and respondent's opportunity to remove the spawn from the rail would properly be held immaterial. As the case is decided, however, we are told that even though there is no claim that the vessel should have made different provisions for the unloading of its catch or the debarking of its crew, the shipowner is liable for an injury caused by a temporary unsafe condition arising from the normal operation of the vessel, not the result of fault or mismanagement of anyone on board, and which no one had a reasonable opportunity to remedy. Had there been negligence, either in permitting the spawn to accumulate or in failing to remove it, the admiralty principles developed in the cargo cases, and taken over into personal injury cases, would warrant an imposition of liability, although as to cargo damage the Harter Act and the Carriage of goods by Sea Act would, of course, bar recovery. The Silvia, 171 U.S. 462, 19 S.Ct. 7, 43 L.Ed. 241. But where, as here, there is neither a claim that the vessel was initially unseaworthy, nor any showing of negligence, the imposition of liability seems to me borrowing from Judge Magruder, a 'hard doctrine,' 'startlingly opposed to principle.' 265 F.2d at page 432.
66
The Court is not fashioning a rule designed to protect life, cf. Bullard v. Roger Williams Ins. Co., 4 Fed.Cas. 643, No. 2,122, at 646, for there appears no real basis for expectation that today's decision will promote the taking of greater precautions at sea. See, dissenting opinion of, Frankfurter, J., ante, p. 557. The respondent is held liable, without being told that there was something left undone which should have been done, for petitioner is not asked to show, as was the libellant in Poignant, that the vessel ought to have been outfitted differently, that is, in a fashion which would have prevented the dangerous condition from arising at all. Nor is the respondent permitted to show that such condition was not due to its fault.
67
The sole interest served by the Court's decision is compensation. Such an interest is, of course, equally present in the case of an undoubted accident, where under the Court's ruling no right of recovery is bestowed, as it is in the present case. But, because of the Court's inherent incapacity to deal with the problem in the comprehensive and integrated manner which would doubtless characterize its legislative treatment, cf. Dixon v. United States, 2 Cir., 219 F.2d 10, 15, this arbitrary limitation is preserved. This internal contradiction in the rule which the Court has established only serves to highlight a more central point: it is not for a court, even a court of admiralty, to fashion a tort rule solely in response to considerations which underlie workmen's compensation legislation, weighty as such considerations doubtless are as a legislative matter. Citation is not needed to remind one of the readiness of Congress to deal with felt deficiencies in judicial protection of the interests of those who go to sea. We should heed the limitations on our own capacity and authority. See Halcyon Lines v. Haenn Ship, etc., Corp., 342 U.S. 282, 285—287, 72 S.Ct. 277, 279—280, 96 L.Ed. 318.
68
I would affirm.
1
In accordance with tradition, the employment agreement provided that the proceeds from the sale of the fish spawn should be divided among the members of the crew, no part thereof going to the officers or to the owner of the vessel.
2
The instructions on this aspect of the case were as follows: 'In a case like this we have the argument presented here, which you do not have to believe, that the ship was unseaworthy because at the time of the injury there was on the rail of the ship some kind of slime. Well, if that really was there and had been there any period of time, and it caused the accident, then you would find as a matter of your conclusion of fact, that unseaworthiness caused the accident.
'I haven't told you what unseaworthiness is. You will recognize it is somewhat overlapping and alternative to, indeed quite similar to, negligence because it is one of the obligations of the owner of a ship to see to it through appropriate captains, mates, members of the crew, or someone, that there isn't left upon the rail of a ship, especially a rail which is going to be utilized for leaving the ship, to climb the ladder, any sort of substance such as slime.
'It doesn't make any difference who puts it there. As far as the owner-operator of the vessel goes, it is his job to see it does not stay there too long, if he knows it is the kind of place, as he could have known here, which is used by members of the crew in getting off the ship.
'So I think it would be fair to tell you the real nub of this case which I hope has not been clouded for you, the real nub of this case is, Was there on the rail some slime; was it there for an unreasonably long period of time; was there a failure on the part of the owner-operator through appropriate agents to remove it; and was that slime the cause of the injury which the plaintiff suffered.
'Was there something there and was it there for a reasonably long period of time so that a shipowner ought to have seen that it was removed? That is the question.'
3
'Mr. Katz: May I make a further request? In your charge you specifically said 'and was it there for a reasonably long period of time so that the shipowner could have had it removed.'
'I submit that would apply to the negligence count only but with respect to unseaworthiness, if there is an unseaworthy condition, there is an absolute situation, there is no time required. It is the only—
'The Court: Denied. Refer to the case in the Second Circuit.'
4
The trial judge instructed the jury as follows: 'In this case, on the basis of rulings I made earlier, I have instructed you on the undisputed fact, Mr. Mitchell is to be regarded as being an employee of the defendant and therefore entitled to those rights if any which flow from the maritime law and flows (sic) from the act of Congress.'
In a memorandum filed almost a month after the trial, the district judge, apparently relying upon the fact that the shipowner had no direct financial interest in the spawn which had been unloaded (see note 1, supra), stated that, '(T)here should have been a directed verdict for the defendant on the unseaworthiness count. If there were slime on the rail, it was put there by an associate and jointventurer of the plaintiff and not by a stranger or by anyone acting for the defendant. If Sailor A and his wife go on board, and each of them has a right to be there, but they are engaging in a frolic of their own, not intended for the profit or advantage of the shipowner, say, for example, that they are munching taffy, and the wife drops the taffy on the deck, and the sailor slips on it, the sailor, if he is injured, is not entitled to collect damages from the shipowner. In short, absolute as is the liability for unseaworthiness, it does not subject the shipowner to liability from articles deposited on the ship by a co-adventurer of the plaintiff.' But this theory played no part in the issues developed at the trial, where the district judge denied the respondent's motion for a directed verdict and instructed the jury as indicated above.
5
All of these early maritime codes are reprinted in 30 Fed.Cas. pages 1171—1216. The relevant provisions are Articles VI and VII, of the Laws of Oleron, 30 Fed.Cas. pages 1174—1175; Articles XVIII, XIX, and XXXIII, of the Laws of Wisbuy, 30 Fed.Cas. pages 1191, 1192; Articles XXXIX and XLV of the Laws of the Hanse Towns, 30 Fed.Cas. page 1200; and Title Fourth, Articles XI and XII, of the Marine Ordinances of Louis XIV, 30 Fed.Cas. page 1209.
6
And, of course, the vitality of a seaman's right to maintenance and cure has not diminished through the years. Calmar S.S. Corp. v. Taylor, 303 U.S. 525, 58 S.Ct. 651, 82 L.Ed. 993; Waterman S.S. Corp. v. Jones, 318 U.S. 724, 63 S.Ct. 930, 87 L.Ed. 1107; Farrell v. United States, 336 U.S. 511, 69 S.Ct. 707, 93 L.Ed. 850; Warren v. United States, 340 U.S. 523, 71 S.Ct. 432, 95 L.Ed. 503.
7
For a more thorough discussion of the history here sketched see Tetreault, Seamen, Seaworthiness, and the Rights of Harbor Workers, 39 Cornell L.Q. 381, 382—403; Gilmore and Black, The Law of Admiralty (1957), pp. 315—332. See also the illuminating discussion in the opinion of then Circuit Judge Harlan in Dixon v. United States, 2 Cir., 219 F.2d 10, 12—15.
8
Where it was said '(u)nseaworthiness, as is well understood, embraces certain species of negligence; while the (Jones Act) includes several additional species not embraced in that term.' 278 U.S. at page 138, 49 S.Ct. at page 77.
9
An earlier legislative effort to broaden recovery for injured seamen (the La Follette Act of 1915, 38 Stat. 1164, 1185) had been emasculated in Chelentis v. Luckenbach S.S. Co., 247 U.S. 372, 38 S.Ct. 501, 62 L.Ed. 1171.
10
As one commentator has chosen to regard it. See Tetreault, op. cit., supra, note 7, at 394.
11
I.e., as simply overruling the decision in Plamals v. The Pinar Del Rio, 277 U.S. 151, 48 S.Ct. 457, 72 L.Ed. 827, that unseaworthiness cannot include 'operating negligence.' See Gilmore and Black, op. cit., supra, at 317.
12
The persuasive authority of Petterson in a case very similar to this one has been recognized by the Court of Appeals for the Second Circuit. Poignant v. United States, 2 Cir., 225 F.2d 595.
1
'Considering the custom prevailing in those waters and other clearly established facts, in the present cause, we think the trial court might have told the jury that without regard to negligence the vessel was unseaworthy when she left the dock if the can marked 'coal oil' contained gasoline; also that she was unseaworthy if no life preservers were then on board; and that if thus unseaworthy and one of the crew received damage as the direct result thereof, he was entitled to recover compensatory damages.'
2
Chief Judge Magruder has appropriately noted that no previous decision in this Court has considered whether liability for unseaworthiness existing at the start of the voyage extends to subsequently arising conditions. 265 F.2d at page 432; see also Dixon v. United States, 2 Cir., 219 F.2d 10.
3
It was not contended that the failure to provide the vessel with a different mode of access, or other means for unloading, rendered it unseaworthy from the start of the voyage. Cf. Poignant v. United States, 2 Cir., 225 F.2d 595.
4
The considerations urging harmony of law for international carriage, especially as between the United States and the United Kingdom, led, in 1936, to the enactment of the Carriage of Goods by Sea Act, 49 Stat. 1207, 46 U.S.C.A. § 1300 et seq., substantially adopting the recommendations of an international convention on the problem. The Gilmore and Black, The Law of Admiralty, 122—124. Where applicable, the 1936 Act imposes only the duty to use due diligence to provide a seaworthy ship at the start of the voyage.
5
From the time of the earliest maritime codes seamen injured in the service of the vessel have, to varying extents, been entitled to maintenance and cure at the expense of the ship. See The Osceola, 189 U.S. 158, 169—170, 23 S.Ct. 483, 484—485, 47 L.Ed. 760. But the seaman's right to compensation for injuries is a relatively modern development, probably originating in cases concerning the negligent failure of the vessel to discharge the duty to provide maintenance and cure. See Brown v. Overton, D.C.Mass. 1859, 4 Fed.Cas. page 418, No. 2,024; Tetreault, Seamen, Seaworthiness, and the Rights of Harbor Workers, 39 Cornell L.Q. 381, 385. However, there appears to have been no connection between the elaboration of the duty to provide maintenance and cure and the emergence of the doctrine of absolute liability for unseaworthiness.
6
It is not irrelevant to note that the spokesman for the Court was the Justice under whose lead the most unhappy admiralty doctrines were promulgated: Southern Pacific Co. v. Jensen, 244 U.S. 205, 37 S.Ct. 524, 61 L.Ed. 1086 and Knickerbocker Ice Co. v. Stewart, 253 U.S. 149, 40 S.Ct. 438, 64 L.Ed. 834.
| 78
|
362 U.S. 482
80 S.Ct. 884
4 L.Ed.2d 903
UNITED STATES, Petitioner,v.REPUBLIC STEEL CORP. et al.
No. 56.
Argued Jan. 12, 13, 1960.
Decided May 16, 1960.
Rehearing Denied June 27, 1960.
See 363 U.S. 858, 80 S.Ct. 1605.
Mr. J. Lee Rankin, Sol. Gen., Washington, D.C., for petitioner.
Mr.Raymond T. Jackson, Cleveland, Ohio, for respondent, Interlake iron corp.
Mr. Paul R. Conaghan, Chicago, Ill., for respondent, Republic Steel Corp.
Messrs. Peter A. Dammann and W. S. Bodman, Chicago, Ill., submitted on brief for respondent, International Harvester Co.
Mr. Justice DOUGLAS delivered the opinion of the Court.
1
This is a suit by the United States to enjoin respondent companies from depositing industrial solids in the Calumet River (which flows out of Lake Michigan and connects eventually with the Mississippi) without first obtaining a permit from the Chief of Engineers of the Army providing conditions for the removal of the deposits and to order and direct them to restore the depth of the channel to 21 feet by removing portions of existing deposits.
2
The District Court found that the Calumet was used by vessels requiring a 21-foot draft, and that that depth has been maintained by the Corps of Engineers. Respondents, who operate mills on the banks of the river for the production of iron and related products, use large quantities of the water from the river, returning it through numerous sewers. The processes they use create industrial waste containing various solids. A substantial quantity of these solids is recovered in settling basins but, according to the findings, many fine particles are discharged into the river and they flocculate into larger units and are deposited in the river bottom. Soundings show a progressive decrease in the depth of the river in the vicinity of respondents' mills. But respondents have refused, since 1951, the demand of the Corps of Engineers that they dredge that portion of the river. The shoaling conditions being created in the vicinity of these plants were found by the District Court to be created by the waste discharged from the mills of respondents.1 This shoaling was found to have reduced the depth of the channel to 17 feet in some places and to 12 feet in others. The District Court made findings which credited respondents with 81.5% of the waste deposited in the channel, and it allocated that in various proportions among the three respondents. See D.C., 155 F.Supp. 442.
3
The Court of Appeals did not review the sufficiency of evidence. It dealt only with questions of law and directed that the complaint be dismissed. 7 Cir., 264 F.2d 289. The case is here on a petition for a writ of certiorari which we granted because of the public importance of the questions tendered. 359 U.S. 1010, 79 S.Ct. 1150, 3 L.Ed.2d 1035.
4
Section 10 of the Rivers and Harbors Act of 1899, 30 Stat. 1121, 1151, as amended, 33 U.S.C. § 403, 33 U.S.C.A. § 403, provides in part:2
5
'That the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States is hereby prohibited; * * *' (Italics added.) The section goes on to outlaw various structures 'in' any navigable waters except those initiated by plans recommended by the Chief of Engineers and authorized by the Secretary of the Army. Section 10 then states that 'it shall not be lawful to excavate or fill, or in any manner to alter or modify the * * * capacity of * * * the channel of any navigable water of the United States, unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of the Army prior to beginning the same.'
6
A criminal penalty is added by § 12, 33 U.S.C.A. § 406; and § 12 further provides that the United States may sue to have 'any structures or parts of structures erected' in violation of the Act removed. Section 17, 33 U.S.C.A. § 413, directs the Department of Justice to 'conduct the legal proceedings necessary to enforce' the provisions of the Act, including § 10.
7
Section 13, 33 U.S.C.A. § 407 forbids the discharge of 'any refuse matter of any kind or description whatever other than that flowing from streets and sewers and passing therefrom in a liquid state, into any navigable water of the United States'; but § 13 grants authority to the Secretary of the Army to permit such deposits under conditions prescribed by him.
8
Our conclusions are that the industrial deposits placed by respondents in the Calumet have, on the findings of the District Court, created an 'obstruction' within the meaning of § 10 of the Act and are discharges not exempt under § 13. We also conclude that the District Court was authorized to grant the relief.
9
The history of federal control over obstructions to the navigable capacity of our rivers and harbors goes back to Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1, 8, 8 S.Ct. 811, 815, 31 L.Ed. 629, where the Court held 'there is no common law of the United States' which prohibits 'obstructions' in our navigable rivers. Congress acted promptly, forbidding by § 10 of the Rivers and Harbors Act of 1890, 26 Stat. 426, 454, 'the creation of any obstruction, not affirmatively authorized by law, to the navigable capacity' of any waters of the United States. The 1899 Act followed a report3 to Congress by the Secretary of War, which at the direction of Congress, 29 Stat. 234, contained a compilation and revision of existing laws relating to navigable waters. The 1899 Act was said to contain 'no essential changes in the existing law.'4 Certainly so far as outlawry of any 'obstructions' in navigable rivers is concerned there was no change relevant to our present problem.
10
It is argued that 'obstruction' means some kind of structure. The design of § 10 should be enough to refute that argument, since the ban of 'any obstruction,' unless approved by Congress, appears in the first part of § 10, followed by a semicolon and another provision which bans various kinds of structures unless authorized by the Secretary of the Army.
11
The reach of § 10 seems plain. Certain types of structures, enumerated in the second clause, may not be erected 'in' any navigable river without approval by the Secretary of the Army. Nor may excavations or fills, described in the third clause, that alter or modify 'the course, location, condition, or capacity of' a navigable river be made unless 'the work' has been approved by the Secretary of the Army. There is, apart from these particularized invasions of navigable rivers, which the Secretary of the Army may approve, the generalized first clause which prohibits 'the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity' of such rivers. We can only conclude that Congress planned to ban any type of 'obstruction,' not merely those specifically made subject to approval by the Secretary of the Army. It seems, moreover, that the first clause being specifically aimed at 'navigable capacity' serves an end that may at times be broader than those served by the other clauses. Some structures mentioned in the second clause may only deter movements in commerce, falling short of adversely affecting navigable capacity. And navigable capacity of a waterway may conceivably be affected by means other than the excavations and fills mentioned in the third clause. We would need to strain hard to conclude that the only obstructions banned by § 10 are those enumerated in the second and third clauses. In short, the first clause is aimed at protecting 'navigable capacity,' though it is adversely affected in ways other than those specified in the other clauses.
12
There is an argument that § 10 of the 1890 Act, 26 Stat. 454, which was the predecessor of the section with which we are now concerned, used the words 'any obstruction' in the narrow sense, embracing only the prior enumeration of obstructions in the preceding sections of the Act. The argument is a labored one which we do not stop to refute step by step. It is unnecessary to do so, for the Court in United States v. Rio Grande Dam & Irrigation Co., 174 U.S. 690, 708, 19 S.Ct. 770, 777, 43 L.Ed. 1136, decided not long after the 1890 Act became effective, gave the concept of 'obstruction,' as used in § 10, broad sweep: 'It is not a prohibition of any obstruction to the navigation, but any obstruction to the navigable capacity, and anything, wherever done or however done, within the limits of the jurisdiction of the United States, which tends to destroy the navigable capacity of one of the navigable waters of the United States, is within the terms of the prohibition.' This broad construction given § 10 of the 1890 Act was carried over to § 10 of the 1899 Act in Sanitary District Co. of Chicago v. United States, 266 U.S. 405, 429, 45 S.Ct. 176, 179, 69 L.Ed. 352, the Court citing United States v. Rio Grande Dam & Irrigation Co., supra, with approval and saying that § 10 of the 1899 Act was 'a broad expression of policy in unmistakable terms, advancing upon' § 10 of the 1890 Act.
13
The decision in Sanitary District Co. of Chicago v. United States, supra, seems to us to be decisive. There the Court affirmed a decree enjoining the diversion of water from Lake Michigan through this same river. Mr. Justice Holmes, writing for the Court, did not read § 10 narrowly but in the spirit in which Congress moved to fill the gap created by Willamette Iron Bridge Co. v. Hatch, supra. That which affects the water level may, he said, amount to an 'obstruction' within the meaning of § 10:
14
'Evidence is sufficient, if evidence is necessary, to show that a withdrawal of water on the scale directed by the statute of Illinois threatens and will affect the level of the Lakes, and that is a matter which cannot be done without the consent of the United States, even were there no international covenant in the case.' Sanitary District Co. of Chicago v. United States, supra, 266 U.S. at page 426, 45 S.Ct. at page 179.
15
'There is neither reason nor opportunity for a construction that would not cover the present case. As now applied it concerns a change in the condition of the Lakes and the Chicago River, admitted to be navigable, and, if that be necessary, an obstruction to their navigable capacity * * *.' Id., 266 U.S. at page 429, 45 S.Ct. at page 179.
16
It is said that that case is distinguishable because it involved the erections of 'structures,' prohibited by the second clause of § 10. The 'structures' erected, however, were not 'in' navigable waters. The Sanitary District had reversed the flow of the Chicago River, 'formerly a little stream flowing into Lake Michigan,' 266 U.S. at page 424, 45 S.Ct. at page 178, and used it as a sluiceway to draw down the waters of the Great Lakes to a dangerous degree. Moreover, the Court did not rely on the second clause of § 10 but on the first and the third. Id., 266 U.S. at page 428, 45 S.Ct. at page 179. The decree in that case did not run against any 'structure'; it merely enjoined the diversion of water from Lake Michigan in excess of 250,000 cubic feet per minute.
17
That broad construction of § 10 was reaffirmed in State of Wisconsin v. State of Illinois, 278 U.S. 367, 414, 49 S.Ct. 163, 170, 73 L.Ed. 426, another case involving the reduction of the water level of the Great Lakes by means of withdrawals through the Chicago River. And the Court, speaking through Chief Justice Taft (id., 278 U.S. at pages 406, 414, 417, 49 S.Ct. at pages 167, 170, 171), made clear that it adhered to what Mr. Justice Holmes had earlier said, 'This withdrawal is prohibited by Congress, except so far as it may be authorized by the Secretary of War.' Sanitary District Co. of Chicago v. United States, supra, 266 U.S. at page 429, 45 S.Ct. at page 180.
18
The teaching of those cases is that the term 'obstruction' as used in § 10 is broad enough to include diminution of the navigable capacity of a waterway by means not included in the second or third clauses. In the Sanitary District case it was caused by lowering the water level. Here it is caused by clogging the channel with deposits of inorganic solids. Each affected the navigable 'capacity' of the river. The concept of 'obstruction' which was broad enough to include the former seems to us plainly adequate to include the latter.
19
As noted, § 13 bans the discharge in any navigable water of 'any refuse matter of any kind or description whatever other than that flowing from streets and sewers and passing therefrom in a liquid state.' The materials carried here are 'industrial solids,' as the District Court found. The particles creating the present obstruction were in suspension, not in solution. Articles in suspension, such as organic matter in sewage, may undergo chemical change. Others settle out. All matter in suspension is not saved by the exception clause in § 13. Refuse flowing from 'sewers' in a 'liquid state' means to us 'sewage.' Any doubts are resolved by a consistent administrative construction which refused to give immunity to industrial wastes resulting in the deposit of solids in the very river in question.5 The fact that discharges from streets and sewers may contain some articles in suspension that settle out and potentially impair navigability6 is no reason for us to enlarge the group to include these industrial discharges. We follow the line Congress has drawn and cannot accept the invitation to broaden the exception in § 13 because other matters 'in a liquid state' might logically have been treated as favorably as sewage is treated. We read the 1899 Act charitably in light of the purpose to be served. The philosophy of the statement of Mr. Justice Holmes in State of New Jersey v. State of New York, 283 U.S. 336, 342, 51 S.Ct. 478, 479, 75 L.Ed. 1104, that 'A river is more than an amenity, it is a treasure,' forbids a narrow, cramped reading either of § 13 or of § 10.
20
The Court of Appeals concluded that even if violations were shown, no relief by injunction is permitted. Yet § 17 provides, as we have seen, that 'the Department of Justice shall conduct the legal proceedings necessary to enforce' the provisions of the Act, including § 10. It is true that § 12 in specifically providing for relief by injunction refers only to the removal of 'structures' erected in violation of the Act (see United States v. Bigan, 3 Cir., 274 F.2d 729), while § 10 of the 1890 Act provided for the enjoining of any 'obstruction.' Here again Sanitary District Co. of Chicago v. United States, supra, is answer enough. It was argued in that case that relief by injunction was restricted to removal of 'structures.' See 266 U.S. at page 408, 45 S.Ct. at page 177. But the Court replied. 'The Attorney General by virtue of his office may bring this proceeding and no statute is necessary to authorize the suit.'7 Id., 266 U.S. at page 426, 45 S.Ct. at page 178. The authority cited was United States v. San Jacinto Tin Co., 125 U.S. 273, 8 S.Ct. 850, 31 L.Ed. 747, where a suit was brought by the Attorney General to set aside a fraudulent patent to public lands. The Court held that the Attorney General could bring suit, even though Congress had not given specific authority. The test was whether the United States had an interest to protect or defend. Section 10 of the present Act defines the interest of the United States which the injunction serves. Protection of the water level of the Great Lakes through injunctive relief. Sanitary District Co. of Chicago v. United States, supra, is precedent enough for ordering that the navigable capacity of the Calumet River be restored. The void which was left by Willamette Iron Bridge Co. v. Hatch, supra, need not be filled by detailed codes which provide for every contingency. Congress has legislated and made its purpose clear; it has provided enough federal law in § 10 from which appropriate remedies may be fashioned even though they rest on inferences. Otherwise we impute to Congress a futility inconsistent with the great design of this legislation. This is for us the meaning of Sanitary District Co. of Chicago v. United States, supra, on this procedural point.8
21
Since the Court of Appeals dealt only with these questions of law and not with subsidiary questions raised by the appeal, we remand the case to it for proceedings in conformity with this opinion.
22
Reversed.
23
Memorandum of Mr. Justice FRANKFURTER, dissenting.
24
In the absence of comprehensive legislation by Congress dealing with the matter, I would go a long way to sustain the power of the United States, as parens patriae, to enjoin a nuisance that seriously obstructs navigation. But that road to judicial relief in this case is, in light of Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1, 8 S.Ct. 811, 31 L.Ed. 629, barred by the Rivers and Harbors Act of 1899. For the reasons set forth by my Brother HARLAN, the structure and history of that Act, reflected by the very particularities of its provisions, make it unavailable for the situation now before the Court.
25
Mr. Justice HARLAN, with whom Mr. Justice FRANKFURTER, Mr. Justice WHITTAKER and Mr. Justice STEWART, join, dissenting.
26
In my opinion this decision cannot be reconciled with the terms of the Rivers and Harbors Act of 1899, apart from which the Court, as I understand its opinion, does not suggest the United States may prevail in this case. Far from presenting the clear and simple statutory scheme depicted by the Court, the provisions of the governing statute are complex and their legislative history tortuous. My disagreement with the Court rests on four grounds: (1) that the term 'any obstruction' in § 10 of the Act was not used at large, so to speak, but refers only to the particular kinds of obstructions specifically enumerated in the Act; (2) that the discharge of this liquid matter from the respondents' mills does not fall within any of the Act's specific proscriptions; (3) that in any event injunctive relief was not authorized; and (4) that Sanitary District Co. of Chicago v. United States, 266 U.S. 405, 45 S.Ct. 176, 69 L.Ed. 352 does not militate against any of these conclusions.
27
Five sections of the Act are relevant to this case:
28
(1) Section 9, 33 U.S.C. § 401, 33 U.S.C.A. § 401, makes it unlawful to construct any bridge, dam, dike, or causeway without the consent of Congress and the approval of the Chief of Engineers and the Secretary of War.1
29
(2) Section 10, 33 U.S.C. § 403, 33 U.S.C.A. § 403, contains three clauses: Clause 1 provides 'That the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States is hereby prohibited.' Clause 2 makes it unlawful to build any wharf, pier, dolphin, boom, weir, breakwater, bulkhead, jetty, or other structure without complying with certain conditions. Clause 3 makes it unlawful 'to excavate or fill, or in any manner to alter or modify the course, location, condition, or capacity of * * * the channel of any navigable water' without the authorization of the Secretary of War.2
30
(3) Section 12, 33 U.S.C. § 406, 33 U.S.C.A. § 406, provides that violation of § 9, § 10, or § 11 (the last3 not being material here) constitutes a misdemeanor, and that removal of any 'structures or parts of structures' erected in violation of said sections may be enforced by injunction.4
31
(4) Section 13, 33 U.S.C. § 407, 33 U.S.C.A. § 407, makes it unlawful to place in navigable waters any refuse of any kind other than 'that flowing from streets and sewers and passing therefrom in a liquid state * * *.'5
32
(5) Section 16, 33 U.S.C. § 411, 33 U.S.C.A. § 411, makes violation of § 13, § 14, or § 15 (the latter two not being involved here)6 a misdemeanor. No injunctive relief is provided for.7
33
The Court holds that respondents have violated §§ 10 and 13, and that injunctive relief is authorized under the present circumstances. A closer examination of the Act and its history than that undertaken in the Court's opinion, in my view, refutes both conclusions.
I.
34
The Court relies primarily on the first clause of § 10, which provides:
35
'That the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States is hereby prohibited. * * *'.
36
If that clause stood in isolation, it might bear the broad meaning which the Court now attributes to it. However, it is but one part of an involved and comprehensive statute which has emerged from a long legislative course. The bare words of the clause cannot be considered apart from that context.
37
Two circumstances apparent on the face of the statute immediately raise a doubt whether the term 'any obstruction' can be taken in its fullest literal sense. First, the clause is surrounded in the statute by an exhaustive enumeration of particular types of obstructions and cognate activities, that is, 'bridge, dam, dike, or causeway' (§ 9); 'wharf, pier, dolphin, boom, weir, breakwater, bulkhead, jetty, or other structures' (§ 10, cl. 2); 'excavate,' 'fill,' 'alter,' 'modify' (§ 10, cl. 3); and 'any refuse matter of any kind' (§ 13). If the 'any obstruction' clause were intended to cover a category of obstructions not included within any of the specific enumerations, it is strange that it should be inserted at the beginning of a section which lists several specific obstructions and which is itself both preceded and followed by other sections making similar enumerations. Second, the lawful creation of the structural obstructions mentioned in § 9 requires the approval of Congress, while those listed in clauses 2 and 3 of § 10 and in § 13 can be lawfully accomplished with only the authorization of the Secretary of War. Yet clause 1 of § 10 says that 'any obstruction' must be affirmatively authorized by Congress. If the clause is taken in its literal sense, the condition of congressional approval therein prescribed is difficult to square with the condition of approval by the Secretary of War prescribed as to many of the obstructions specifically enumerated.8 Because of the doubts raised by these considerations, it becomes necessary to explore the derivation of the 1899 Act. When this is done, I believe it will be found that 'any obstruction' will not bear the broad meaning given it by the Court, but that it must be taken as embracing only the particular obstructions specified in the statute.
38
The provisions of the 1899 Act dealing with obstructions derive ultimately from a proposal made by the Chief of Engineers and transmitted to Congress by the Secretary of War in 1877.9 A bill based on this recommendation was three times introduced in Congress,10 and came to be known as the Dolph bill. It was reported favorably all three times, and was passed by the Senate twice.11 It enumerated the proscribed obstructions in terms virtually identical to those contained in the 1899 Act, but did not contain the 'any obstruction' clause found in § 10 of that Act.
39
After the Senate had for the second time passed the Dolph bill but before the House had acted on it, the annual rivers and harbors appropriation bill, which was to become the Rivers and Harbors Act of 1890,12 came up for consideration on the floor of Congress. The bill already contained a set of provisions dealing with the power of the Secretary of War to order the alteration or removal of bridges which obstructed navigation. During the Senate debate on those provisions, Senator Edmunds of Vermont offered as an amendment an additional section which provided as follows:
40
'Every obstruction, not affirmatively authorized by law, to the navigable capacity of any waters in respect of which the United States has jurisdiction is hereby prohibited. * * * Every person and every corporation which shall be guilty of creating or continuing any such obstruction in this section mentioned shall be deemed guilty of a misdemeanor * * *. The creating or continuing of any obstruction in this section mentioned may be prevented by the injunction of any circuit court * * *.'13
41
Subsequently, the Dolph bill was offered in toto as a further amendment.14 The Senate accepted the Edmunds amendment and passed the appropriation bill as so amended,15 but it refused to add the Dolph bill.16 In conference, however, it was decided to accept both by combining them. The penal section of the Dolph bill, which followed all of the sections enumerating particular obstructions, had provided simply that every offender against any provision of the Act should forfeit a $250 penalty and be liable for actual damages. The conferees deleted that entire section and replaced it with an adaptation of the Edmunds amendment.17 The latter, which was enacted into law as § 10 of the Rivers and Harbors Act of 1890, read as follows:
42
'That the creation of any obstruction, not affirmatively authorized by law, to the navigable capacity of any waters, in respect of which the United States has jurisdiction, is hereby prohibited. * * * Every person and every corporation which shall be guilty of creating or continuing any such unlawful obstruction in this act mentioned, or who shall violate the provisions of the last four preceding sections of this act, shall be deemed guilty of a misdemeanor * * * (T)he creating or continuing of any unlawful obstruction in this act mentioned may be prevented and such obstruction may be caused to be removed by the injunction of any circuit court * * *.'18
43
Thus, the Edmunds amendment, in which the 'any obstruction' clause had first appeared, and which carried both penal and injunctive sanctions, was substituted for a section which theretofore had contained purely penal provisions and had followed an exhaustive enumeration of those particular obstructions to which the penalties applied. It is to be further noted that while the original Edmunds amendment had made its remedial provisions applicable to any person creating 'any such obstruction in this section mentioned,' Congress, in incorporating the Edmunds amendment into the Dolph bill, made such provisions applicable to any person creating 'any such unlawful obstruction in this act mentioned, or who shall violate the provisions of the last four preceding sections of this act * * *.' (Emphasis added.) In both instances, the word 'such' clearly referred back to the initial sentence of the section prohibiting 'any obstruction,' the only place in either bill where that term appears. Whatever the meaning of 'any obstruction' may have been in the original Edmunds amendment, Congress made it clear in § 10 of the 1890 Act that 'such' obstruction meant those obstructions 'in this act mentioned.' To consider 'any obstruction' in that section as embracing something more than the kinds of obstructions specifically enumerated in the Act would lead to the conclusion that the remedial provisions of § 10 did not cover all the obstructions proscribed by the first sentence of the section.19 Definition of an additional set of offenders—those 'who shall violate the provisions of the last four preceding sections of this act'—was made necessary by the fact that the Dolph bill contained prohibitions of several practices which might not amount to obstructions.
44
From this background, I think the reasonable conclusion to be drawn is that 'any obstruction' in § 10 of the 1890 Act referred only to those obstructions enumerated in the preceding sections of the Act, and not to obstruction in the catchall sense.20
45
The Rivers and Harbors Act of 1899, with which the present case is directly concerned, came about as a result of Congress' direction to the Secretary of War in 1896 to prepare a compilation and revision of existing general laws relating to navigable waters.21 The Secretary's report purported only to codify existing law with no substantive changes,22 and Senator Frye, the Chairman of the Commerce Committee, and the conferees on the bill as ultimately passed, confirmed that the legislation was to have no new substantive effect.23 This indeed is recognized by the Court. As part of the codification, Congress took the first sentence of § 10 of the 1890 Act and inserted it as the first sentence of one of the provisions enumerating several specific obstructions which then became § 10 of the 1899 Act.24 There is nothing to indicate that in so doing, Congress departed from its announced intention to leave the substance of the Act unchanged. Thus the 'any obstruction' language of the first sentence of new § 10 was, as it had been in the old § 10, simply declaratory of all the obstructions specifically proscribed throughout the Act, whether of a structural or nonstructural nature.25
II.
46
I cannot agree that respondents' practices are prohibited by any of the specific provisions of the Act of which § 10, cl. 1, is declaratory. The Court seems to rely in part on § 10, cl. 3, on the theory that the discharge from respondents' plants 'alter or modify the * * * capacity' of the Calumet River. But again, this provision must be read in context. It is evident that in §§ 9 and 10 Congress was dealing with obstructions which are constructed, in a conventional sense, reserving for § 13 the treatment of discharges of refuse which may eventually create obstructions. The structure of § 10, cl. 3, itself confirms this. The basic prohibition of the clause relates to excavations and fills, both of which represent construction in the ordinary sense of that term. The immediately following phrase, 'or in any manner to alter or modify the * * * capacity * * * of the channel of any navigable water,' must be read as referring to the same general class of things as the basic prohibition of the clause. If there could be any doubt about the clause's frame of reference, it is dispelled by the concluding words: 'unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of War prior to beginning the same.' (Emphasis added.)
47
Finally, I do not believe that § 13 can be construed to proscribe respondents' practices. The term 'any refuse matter of any kind or description whatever' undoubtedly embraces the matter discharged from respondents' mills. However, § 13 expressly exempts refuse 'flowing from streets and sewers and passing therefrom in a liquid state.'26 The Court says that materials in 'a liquid state' must mean materials which do not settle out. But it is difficult to believe that a nineteenth century Congress, in carving out an exception for liquid sewage, meant to establish an absolute standard of purity which not only bore no relation to the prevailing practice of sewage disposal at the time,27 but also is impossible to achieve even under present-day technology. It is conceded that despite respondents' best efforts to separate out industrial solids, a few minute particles remain. These comprise a small fraction of 1% of the total solution and the most damaging of them are too small to be seen under a microscope. One need not be an expert to say that the refuse discharged by an ordinary sewer pipe today, and a fortiori 60 years ago, undoubtedly contains far more solid matter in suspension than respondents' discharges. And the statute affords no basis for differentiating, as the Court suggests, between industrial and domestic refuse.
III.
48
Even if a violation of § 10 or § 13 could be established, injunctive relief would not be authorized. The Court seems to avoid saying that the statute provides for injunctive relief under the present circumstances, but holds that the propriety of such relief can somehow be 'inferred' from the statute. However, where, as in this statute, Congress has provided a detailed and limited scheme of remedies, it seems to me the Court is precluded from drawing on any source outside the Act. One need go no farther than the plain words of § 16, which prescribes the penalties for violation of § 13, to see that an injunction against violation of the latter section is not authorized. As to violations of § 10, section 12 provides only that 'the removal of any structures or parts of structures erected in violation of' §§ 9, 10, or 11 may be enforced by injunction. (Emphasis added.)
49
The Government relies heavily on the fact that the comparable provision in § 10 of the 1890 Act authorized injunctive relief against 'any unlawful obstruction.' A closer examination of that section, however, undermines the Government's conclusion. It authorized criminal penalties in two instances: First, for the creation of any unlawful obstruction mentioned in the Act, and second, for violation of the preceding four sections. By contrast, the section authorized injunctive relief only in the first instance—the creation of any unlawful obstruction 'in this act mentioned.' To me this indicates that a deliberate distinction was drawn between those prohibitions relating to obstructions created by construction in the ordinary sense and those relating to other types of interferences with navigation, including the discharge of refuse. In the 1899 Act, the provisions relating to the erection of particular types of obstructions were gathered together in § 9, § 10, and § 11 and subjected to the penalties of § 12. The criminal penalties of § 12 are applicable to any violation of the preceding three sections (and any rule promulgated by the Secretary of the Army under § 14), while injunctive relief is limited to 'structures or parts of structures,' thus reflecting the same distinction made in the 1890 Act. The provisions relating to violations not involving the erection of any structures, such as discharge of refuse, unauthorized use of government navigational installations, and careless sinking of vessels. were gathered together in §§ 13, 14, and 15 and subjected to the penalties of § 16 The last-mentioned section is conspicuously lacking in any reference to injunctive relief, thus again reflecting the distinction established by the 1890 Act. Since the deposits attributable to respondents' mills are not 'structures' within the meaning of § 12, their removal, as I read the Act, cannot be enforced by injunction.
50
The Court seems to say that § 17, which directs the Department of Justice to conduct the legal proceedings necessary to enforce the Act, itself authorizes injunctive relief. But it would have been futile for Congress to prescribe and carefully limit the relief available for violation of the Act if § 17 were meant to authorize a disregard of those limitations. Section 17, in my view, does no more than allocate within the Government the responsibility for the invocation of those remedies already authorized by Congress.
IV.
51
The case of Sanitary District Co. of Chicago v. United States, supra, is not, in my opinion, the 'decisive' authority which the Court finds it to be, either as to the question whether a violation has taken place or as to whether injunctive relief would be authorized under the present circumstances, given a violation of the Act. The United States in that case had originally sought an injunction against the construction of the Calumet-Sag channel and later against the diversion thereby of water from Lake Michigan in excess of the amount authorized by the Secretary of War. There is no doubt that a substantive violation of the Act was made out under §§ 9 and 10, since the complained-of diversion and consequent alteration in the navigable capacity of the Great Lakes had been brought about by the excavation of a channel and the construction of pumping stations, intercepting sewers, movable dams, and navigational locks.28 By contrast, respondents in the present case have erected no structures which could give rise to either a violation of the Act or a right to injunctive relief.
52
To the extent that Sanitary District relied on the inherent power of the United States, apart from the statute, it is wide of the mark in this situation. The Court here seems to concede that the Sanitary case is no authority for inferring a substantive cause of action arising from the constitutional power of the United States over navigable waters. Indeed, no other conclusion could well be reached in view of the holding in Willamette Iron Bridge Co. v. Hatch, 125 U.S. 1, 8, 8 S.Ct. 811, 815, 31 L.Ed. 629, that 'there is no common law of the United States which prohibits obstructions and nuisances in navigable rivers,' and of the opinion in State of Wisconsin v. State of Illinois, 278 U.S. 367, 414, 49 S.Ct. 163, 170, 73 L.Ed. 426, which said of the Sanitary case that '(t)he decision there reached and the decree entered cannot be sustained, except on the theory that the court decided * * * that Congress had exercised the power to prevent injury to the navigability of Lake Michigan * * *.'
53
The Court nevertheless seems to find in the Sanitary case an authorization to infer that the United States has a right to injunctive relief, despite the statute's failure to provide for it. Whatever the validity of that proposition may have been in the context of Sanitary, it can have no applicability here. For in the former case, the effect of the complained-of practices was to lower the level of the entire Great Lakes system. The Government there argued that a right to injunctive relief could be inferred because of the repercussions of the State's action beyond its own borders,29 and the Court expressly relied upon the 'sovereign interest' of the United States in all the Great Lakes and upon a treaty with Great Britain touching the use of Canadian boundary waters. In the present case, the waters affected consist of a few miles of the Calumet River lying wholly within the State of Illinois, and no treaty or international obligation is involved.
54
What has happened here is clear. In order to reach what it considers a just result the Court, in the name of 'charitably' construing the Act, has felt justified in reading into the statute things that actually are not there. However appealing the attempt to make this old piece of legislation fit modern-day conditions may be, such a course is not a permissible one for a court of law, whose function it is to take a statute as it finds it. The filling of deficiencies in the statute, so that the burdens of maintaining the integrity of our great navigable rivers and harbors may be fairly allocated between those using them and the Government, is a matter for Congress, not for this Court.
55
I would affirm.
1
A House Report contains similar animadversions. H.R.Rep. No. 1345, 83d Cong., 2d Sess., p. 10.
2
Section 10 provides in full:
'That the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States is hereby prohibited; and it shall not be lawful to build or commence the building of any wharf, pier, dolphin, boom, weir, breakwater, bulkhead, jetty, or other structures in any port, roadstead, haven, harbor, canal, navigable river, or other water of the United States, outside established harbor lines, or where no harbor lines have been established, except on plans recommended by the Chief of Engineers and authorized by the Secretary of the Army; and it shall not be lawful to excavate or fill, or in any manner to alter or modify the course, location, condition, or capacity of, any port, roadstead, haven, harbor, canal, lake, harbor of refuge, or inclosure within the limits of any breakwater, or of the channel of any navigable water of the United States, unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of the Army prior to beginning the same.'
3
H.R.Doc. No. 293, 54th Cong., 2d Sess.
4
32 Cong.Rec., Pt. 3, p. 2923, which reports the statement by the House Conferees. For the discussion in the Senate see 32 Cong.Rec. 2296—2298.
5
We have a rather precise history of administrative construction of the 1899 Act as it applies to the deposit of solids in the Calumet River by mills located on it. The Army Engineers, beginning in 1909, warned a steel company of the accumulation of solids from industrial wastes being poured into the Calumet. In 1918, 1920, 1924, 1927, 1928, 1931, and 1937 the District Engineer required these deposits to be removed. An improvement in the Calumet was authorized by the Act of August 30, 1935, 49 Stat. 1028, 1036, on the basis of a report from the Army Engineers. See H.R.Doc. No. 494, 72d Cong., 2d Sess. The costs were computed on the basis that shoals created by the deposit of solids would be removed by the company creating them. The report states, at p. 24, 'It is assumed, in this estimate, that the shoal adjacent to the outer bulkhead of the Illinois Steel Co. will be removed by that company to the depth of 21 feet originally provided by the United States.'
This long-standing administrative construction, while not conclusive of course, is entitled to 'great weight' even though it arose out of cases 'settled by consent rather than in litigation.' Federal Trade Commission v. Mandel Bros., Inc., 359 U.S. 385, 391, 79 S.Ct. 818, 823, 3 L.Ed.2d 893.
For references in public documents to this administrative construction see H.R.Doc. No. 237, 63d Cong., 1st Sess., pp. 77, 160; S.Rep. No. 66, 68th Cong., 1st Sess., p. 2; H.R.Doc. No. 494, 72d Cong., 2d Sess., pp. 24, 34; S.Rep.No. 2225, 74th Cong., 2d Sess., p. 2; Hearings, Civil Functions, Department of the Army Appropriations for 1955, Subcommittee of House Committee on Appropriations, 83d Cong., 2d Sess., Pt. 1, pp. 695—696; H.R.Rep. No. 1345, 83d Cong., 2d Sess., p. 10.
6
H.R.Doc. No. 417, 69th Cong., 1st Sess., p. 9, states:
'In some instances the organic solid matter in sewage and wastes causes temporary shoaling in the vicinity of the point of discharge, but in most cases of this kind nature eventually decomposes this organic matter and rectifies the condition. In a few instances, where large quantities of sewage are discharged into sluggish and restricted waters, overpollusion results and the oxygen content remains insufficient to enable nature to break up the solids. In such cases permanent shoaling in the vicinity of the point of discharge results and dredging must be resorted to. As a rule such dredging is well attended to by municipal authorities.'
7
The 'main ground' advanced was the interest of the United States in removing obstructions to commerce. 266 U.S. at page 426, 45 S.Ct. at page 178. Another ground was a treaty with Great Britain. Id., 266 U.S. at pages 425—426, 45 S.Ct. at page 178. But these were alternative grounds, the treaty rights being treated as lesser or subordinate interests. Id., 266 U.S. at page 426, 45 S.Ct. at page 178.
8
See Comment, Substantive and Remedial Problems in Preventing Interferences with Navigation: The Republic Steel Case, 59 Col.L.Rev. 1065, 1079.
1
Section 9 provides in full as follows:
'That it shall not be lawful to construct or commence the construction of any bridge, dam, dike, or causeway over or in any port, roadstead, haven, harbor, canal, navigable river, or other navigable water of the United States until the consent of Congress to the building of such structures shall have been obtained and until the plans for the same shall have been submitted to and approved by the Chief of Engineers and by the Secretary of War: Provided, That such structures may be built under authority of the legislature of a State across rivers and other waterways the navigable portions of which lie wholly within the limits of a single State, provided the location and plans thereof are submitted to and approved by the Chief of Engineers and by the Secretary of War before construction is commenced: And provided further, that when plans for any bridge or other structure have been approved by the Chief of Engineers and by the Secretary of War, it shall not be lawful to deviate from such plans either before or after completion of the structure unless the modification of said plans has previously been submitted to and received the approval of the Chief of Engineers and of the Secretary of War.'
2
Section 10 provides in full as follows:
'That the creation of any obstruction not affirmatively authorized by Congress, to the navigable capacity of any of the waters of the United States is hereby prohibited; and it shall not be lawful to build or commence the building of any wharf, pier, dolphin, boom, weir, breakwater, bulkhead, jetty, or other structures in any port, roadstead, haven, harbor, canal, navigable river, or other water of the United States, outside established harbor lines, or where no harbor lines have been established, except on plans recommended by the Chief of Engineers and authorized by the Secretary of War; and it shall not be lawful to excavate or fill, or in any manner to alter or modify the course, location, condition, or capacity of, any port, roadstead, haven, harbor, canal, lake, harbor of refuge, or inclosure within the limits of any breakwater, or of the channel of any navigable water of the United States, unless the work has been recommended by the Chief of Engineers and authorized by the Secretary of War prior to beginning the same.'
3
Section 11 deals with the power of the Secretary of War to establish harbor lines.
4
Section 12 provides in full as follows:
'That every person and every corporation that shall violate any of the provisions of sections nine, ten, and eleven of this Act, or any rule or regulation made by the Secretary of War in pursuance of the provisions of the said section fourteen, shall be deemed guilty of a misdemeanor, and on conviction thereof shall be punished by a fine not exceeding twenty-five hundred dollars nor less than five hundred dollars, or by imprisonment (in the case of a natural person) not exceeding one year, or by both such punishments, in the discretion of the court. And further, the removal of any structures or parts of structures erected in violation of the provisions of the said sections may be enforced by the injunction of any circuit court exercising jurisdiction in any district in which such structures may exist, and proper proceedings to this end may be instituted under the direction of the Attorney-General of the United States.'
5
Section 13 provides in full as follows:
'That it shall not be lawful to throw, discharge, or deposit, or cause, suffer, or procure to be thrown, discharged, or deposited either from or out of any ship, barge, or other floating craft of any kind, or from the shore, wharf, manufacturing establishment, or mill of any kind, any refuse matter of any kind or description whatever other than that flowing from streets and sewers and passing therefrom in a liquid state, into any navigable water of the United States, or into any tributary of any navigable water from which the same shall float or be washed into such navigable water; and it shall not be lawful to deposit, or cause, suffer, or procure to be deposited material of any kind in any place on the bank of any navigable water, or on the bank of any tributary of any navigable water, where the same shall be liable to be washed into such navigable water, either by ordinary or high tides, or by storms or floods, or otherwise, whereby navigation shall or may be impeded or obstructed: Provided, That nothing herein contained shall extend to, apply to, or prohibit the operations in connection with the improvement of navigable waters or construction of public works, considered necessary and proper by the United States officers supervising such improvement or public work: And provided further, That the Secretary of War, whenever in the judgment of the Chief of Engineers anchorage and navigation will not be injured thereby, may permit the deposit of any material above mentioned in navigable waters, within limits to be defined and under conditions to be prescribed by him, provided application is made to him prior to depositing such material; and whenever any permit is so granted the conditions thereof shall be strictly complied with, and any violation thereof shall be unlawful.'
6
Section 14 deals with unauthorized use and occupation of federal navigational installations. Section 15 deals with floating obstructions and sunken vessels.
7
Section 16 provides in full as follows:
'That every person and every corporation that shall violate, or that shall knowingly aid, abet, authorize, or instigate a violation of the provisions of sections thirteen, fourteen, and fifteen of this Act shall be guilty of a misdemeanor, and on conviction thereof shall be punished by a fine not exceeding twenty-five hundred dollars nor less than five hundred dollars, or by imprisonment (in the case of a natural person) for not less than thirty days nor more than one year, or by both such fine and imprisonment, in the discretion of the court, one-half of said fine to be paid to the person or persons giving information which shall lead to conviction. And any and every master, pilot, and engineer, or person or persons acting in such capacity, respectively, on board of any boat or vessel who shall knowingly engage in towing any scow, boat, or vessel loaded with any material specified in section thirteen of this Act to any point or place of deposit or discharge in any harbor or navigable water, elsewhere than within the limits defined and permitted by the Secretary of War, or who shall willfully injure or destroy any work of the United States contemplated in section fourteen of this Act, or who shall willfully obstruct the channel of any waterway in the manner contemplated in section fifteen of this Act, shall be deemed guilty of a violation of this Act, and shall upon conviction be punished as hereinbefore provided in this section, and shall also have his license revoked or suspended for a term to be fixed by the judge before whom tried and convicted. And any boat, vessel, scow, raft, or other craft used or employed in violating any of the provisions of sections thirteen, fourteen, and fifteen of this Act shall be liable for the pecuniary penalties specified in this section, and in addition thereto for the amount of the damages done by said boat, vessel, scow, raft, or other craft, which latter sum shall be placed to the credit of the appropriation for the improvement of the harbor or waterway in which the damage occurred, and said boat, vessel, scow, raft, or other craft may be proceeded against summarily by way of libel in any district court of the United States having jurisdiction thereof.'
8
It is to be noted that if § 10, cl. 1, is construed to cover obstructions not within any of the Act's specific prohibitions, and if the respondents' practices are held to fall only within § 10, cl. 1, then the relief granted by the District Court would not in any event be proper, since its decree required only the approval of the Chief of Engineers of the Department of the Army. D.C., 155 F.Supp. 442, 453.
9
The letters are reprinted in S.Rep. No. 224, 50th Cong., 1st Sess.
10
H.R. 2007, 49th Cong., 1st Sess.; S. 27, 50th Cong., 1st Sess.; S.Rep. No. 224, 50th Cong., 1st Sess.; H.R.Rep. No. 2760, 50th Cong., 1st Sess.; S. 88, and H.R. 394, 51st Cong., 1st Sess.; H.R.Rep. No. 1635, 51st Cong., 1st Sess.; H.R.Rep. No. 477, 51st Cong., 1st Sess.
11
19 Cong.Rec. 2338, 21 Cong.Rec. 1319.
12
26 Stat. 426.
13
21 Cong.Rec. 8607.
14
21 Cong.Rec. 8684.
15
21 Cong.Rec. 8608, 8691.
16
21 Cong.Rec. 8685.
17
21 Cong.Rec. 9558.
18
26 Stat. 454.
19
The scanty legislative history in connection with the Edmunds amendment does not militate against this view. It was reported from the Senate Judiciary Committee with no explanation three days before the floor consideration of the appropriation bill. See 21 Cong.Rec. 8603. It was first discussed in the context of its effect on the problem of bridges and its relation to the provisions already in the appropriation bill dealing with the Secretary of War's power over bridges. Id., 8603—8605. Subsequent discussion centered on the meaning of the term 'not affirmatively authorized by law.' Id., 8607.
Two isolated statements which might be read to attribute a catch-all meaning to 'any obstruction' are inconclusive. Senator Edmunds referred to an example which had been brought to the Judiciary Committee's attention, involving a railroad company which had been tumbling rocks into a navigable river. Ibid. However, it seems that even the specific 'refuse' provisions of the Dolph bill would have covered such a practice, and in any event, discussion of the Edmunds amendment out of the context of the Dolph bill can hardly be significant as to the scope of the 'any obstruction' clause with relation to the Dolph bill. Senator Carlisle referred to the Edmunds amendment as covering not only bridges, but 'all obstructions of every kind whatsoever.' Id., 8689. Apart from the fact that this statement was made prior to the adaptation of the Edmunds amendment for purposes of incorporation into the Dolph bill, Senator Carlisle's own subsequent proposal to eliminate the Edmunds amendment but to incorporate its provisions for judicial proceedings into the section of the bill dealing with bridges, thereby 'harmonizing' the two provisions, ibid., casts grave doubt on whether the Senator himself believed that the Edmunds amendment covered any obstructions other than those created by bridges.
20
The Court asserts that a contrary construction of § 10 of the 1890 Act was established by United States v. Rio Grande Dam & Irrigation Co., 174 U.S. 690, 19 S.Ct. 770, 43 L.Ed. 1136. The defendant there attempted to build a dam across the Rio Grande River in New Mexico. The building of dams was specifically prohibited by § 7 of the 1890 Act. The defendant, however, contended that the Act did not apply because the Rio Grande was nonnavigable at the point where the dam was to be built. The very passage of which the Court quotes only a part deals simply with that contention:
'It is urged that the true construction of this act limits its applicability to obstructions in the navigable portion of a navigable stream, and that as it appears that, although the Rio Grande may be navigable for a certain distance above its mouth, it is not navigable in the territory of New Mexico, this statute has no applicability. The language is general, and must be given full scope. It is not a prohibition of any obstruction to the navigation, but any obstruction to the navigable capacity, and anything, wherever done or however done, within the limits of the jurisdiction of the United States, which tends to destroy the navigable capacity of one of the navigable waters of the United States, is within the terms of the prohibition. * * * (I)t would be to improperly ignore the scope of this language to limit it to the acts done within the very limits of navigation of a navigable stream.' Id., 174 U.S. at page 708, 19 S.Ct. at page 777.
The Court was obviously not remotely concerned with the issue in the present case, i.e., whether the first clause of § 10 covers obstructions not enumerated in the remainder of the Act, since the dam there involved was specifically covered by § 7.
21
29 Stat. 234.
22
H.R.Doc. No. 293, 54th Cong., 2d Sess.
23
32 Cong.Rec. 2296—2297, 2923.
24
The identity of the numbers of the respective sections in the new and old Acts is purely coincidental.
25
This construction of the first clause of § 10 seems to have been assumed, though not expressly passed on, by this Court in State of Wisconsin v. State of Illinois, 278 U.S. 367, 412—413, 49 S.Ct. 163, 169, 73 L.Ed. 426. The phrase not 'affirmatively authorized by law' was changed to 'not affirmatively authorized by Congress' simply to overcome the holding of a lower court that authorization by state law was sufficient. United States v. Bellingham Bay Boom Co., C.C.D.Wash.1896, 72 F. 585, affirmed, 9 Cir., 1897, 81 F. 658, reversed on other grounds, 1900, 176 U.S. 211, 20 S.Ct. 343, 44 L.Ed. 437. See Sanitary District Co. of Chicago v. United States, 266 U.S. 405, 429, 45 S.Ct. 176, 179, 69 L.Ed. 352; State of Wisconsin v. State of Illinois, supra, 278 U.S. at page 412, 49 S.Ct. at page 169. Since the prohibition of the clause covers both those obstructions which require congressional approval and those which require only approval of the Secretary of War, the phrase 'authorized by Congress' must be read to mean authorized by Congress or the agency designated by it. State of Wisconsin v. State of Illinois, supra, 278 U.S. at pages 412—413, 49 S.Ct. at page 169.
26
While a refuse provision was contained in the Dolph bill which became the 1890 Act, the liquid-sewage exception was first added in 1894, 28 Stat. 363, and carried forward into the 1899 Act. There was no discussion in the reports or debates of the meaning of the exception.
27
In 1900, only 4% of the urban population having sewage facilities provided any treatment at all for domestic and trade wastes. Modern Sewage Disposal (1938), p. 13 (Federation of Sewage Works Assns., Langdon Pearse, editor, Anniversary Book, Lancaster Press, Inc.).
28
Brief for Appellant, pp. 5—14. It is to be noted that the Sanitary District did not challenge the propriety of injunctive relief in the District Court, and indeed invited it to avoid criminal penalties in testing its right to maintain the channel and divert the complained-of amount of water. 266 U.S. at pages 431—432, 45 S.Ct. at page 180; Record on Appeal, Vol. VIII, pp. 129, 151—152; Brief for Appellee, pp. 66—67, 284—285.
29
Brief for Appellee, pp. 123—158.
| 78
|
362 U.S. 602
80 S.Ct. 924
4 L.Ed.2d 982
UNITED STATES of America, Petitioner,v.STATE OF ALABAMA et al.
No. 398.
Argued May 2, 1960.
Decided May 16, 1960.
Rehearing Denied June 27, 1960.
See 363 U.S. 857, 80 S.Ct. 1608.
Solicitor General J. Lee Rankin, Washington, D.C., for petitioner.
Messrs. Gordon Madison, Montgomery, Ala., and Nicholas S. Hare, Monroeville, Ala., for respondents.
PER CURIAM.
1
Alleging a course of racially discriminatory practices calculated to deprive Negro citizens of their voting rights in violation of the Fifteenth Amendment to the Constitution of the United States and Part IV of the Civil Rights Act of 1957, 71 Stat. 637, 42 U.S.C. § 1971(a), 42 U.S.C.A. § 1971(a),1 the United States, proceeding under 42 U.S.C. § 1971(c), 42 U.S.C.A. § 1971(c),2 brought this action against the Board of Registrars of Macon County, Alabama, and the two individual respondents as members thereof, for declaratory and injunctive relief. Thereafter the Government amended its complaint so as to join the State of Alabama as a party defendant.
2
The District Court dismissed the complaint as to all defendants. It held (1) that the individual respondents had been sued only as Registrars, and that having under Alabama law effectively resigned their offices they were not suable in their official capacities; (2) that the Board of Registrars was not a suable legal entity; and (3) that the Civil Rights Act of 1957 did not authorize this action against the State. 171 F.Supp. 720. The Court of Appeals, sustaining each of these holdings, affirmed. 267 F.2d 808. Because of the importance of the issues involved we brought the case here. 361 U.S. 893, 80 S.Ct. 196, 4 L.Ed.2d 150.
3
Shortly before the case was heard in this Court on May 2, 1960, Congress passed the Civil Rights Act of 1960. The bill was signed by the President on May 6, 1960, and has now become law. Act of May 6, 1960, 74 Stat. 86. Among other things § 601(b) of that Act amends 42 U.S.C. § 1971(c), 42 U.S.C.A. § 1971(c) by expressly authorizing actions such as this to be brought against a State.3 Under familiar principles, the case must be decided on the basis of law now controlling, and the provisions of § 601(b) are applicable to this litigation. American Steel Foundries v. Tri-City Central Trades Council, 257 U.S. 184, 201, 42 S.Ct. 72, 75, 66 L.Ed. 189; Hines v. Davidowitz, 312 U.S. 52, 60, 61 S.Ct. 399, 400, 85 L.Ed. 581; see also Reynolds v. United States, 292 U.S. 443, 449, 54 S.Ct. 800, 803, 78 L.Ed. 1353.
4
We hold that by virtue of the provisions of that section the District Court has jurisdiction to entertain this action against the State. In so holding we do not reach, or intimate any view upon, any of the issues decided below, the merits of the controversy, or any defenses, constitutional or otherwise, that may be asserted by the State.
5
Accordingly, the judgments of the Court of Appeals and the District Court will be vacated, and the case remanded to the District Court for the Middle District of Alabama with instructions to reinstate the action as to the State of Alabama, and for further proceedings consistent with this opinion. It is so ordered.
6
Judgments vacated and case remanded to District Court with instructions.
1
Section 1 of the Fifteenth Amendment provides: 'The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude.'
42 U.S.C. § 1971(a), 42 U.S.C.A. § 1971(a) provides: 'All citizens of the United States who are otherwise qualified by law to vote at any election by the people in any State, Territory, district, county, city, parish, township, school district, municipality, or other territorial subdivision, shall be entitled and allowed to vote at all such elections, without distinction of race, color, or previous condition of servitude; any constitution, law, custom, usage, or regulation of any State or Territory, or by or under its authority, to the contrary notwithstanding.'
2
42 U.S.C. § 1971(c), 42 U.S.C.A. § 1971(c) provides: 'Whenever any person has engaged or there are reasonable grounds to believe that any person is about to engage in any act or practice which would deprive any other person of any right or privilege secured by subsection (a) * * * the Attorney General may institute for the United States, or in the name of the United States, a civil action or other proper proceeding for preventive relief, including an application for a permanent or temporary injunction, restraining order, or other order. In any proceeding hereunder the United States shall be liable for costs the same as a private person.'
3
Section 601(b) provides: 'Whenever, in a proceeding instituted under this subsection (42 U.S.C. § 1971(c)) any official of a State or subdivision thereof is alleged to have committed any act or practice constituting a deprivation of any right or privilege secured by subsection (a), the act or practice shall also be deemed that of the State and the State may be joined as a party defendant and, if, prior to the institution of such proceeding, such official has resigned or has been relieved of his office and no successor has assumed such office, the proceeding may be instituted against the State.'
| 12
|
362 U.S. 605
80 S.Ct. 923
4 L.Ed.2d 987
LOCAL 24, INTERNATIONAL BROTHERHOOD OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN & HELPERS OF AMERICA et al.v.OLIVER et al.
No. 813.
Decided May 16, 1960.
Rehearing Denied June 27, 1960.
See 363 U.S. 858, 80 S.Ct. 1611.
Messrs. David Previant, Robert C. Knee, Bruce Laybourne and David Leo Uelmen, for petitioners.
Messrs. Bernard J. Roetzel and Charles R. Iden, for respondents.
PER CURIAM.
1
The motion for leave to use record in No. 49, October Term, 1958, is granted. The petition for certiorari is also granted. After our remand to the Court of Appeals of the State of Ohio, Ninth Judicial District, for proceedings not inconsistent with the opinion of this Court, 358 U.S. 283, 79 S.Ct. 297, 3 L.Ed.2d 312, the Court of Appeals set aside its previous order 'as it concerns and applies to Revel Oliver, appellee, as a lessor-driver' but continued the order in full force and effect 'as it concerns and applies to Revel Oliver, appellee, as a lessor-owner and employer of drivers of his equipment.' We read the judgment of the Court of Appeals as enjoining petitioner and respondents A.C.E. Transportation Co. and Interstate Truck Service, Inc., for enforcing against respondent Oliver those parts of Article 32 which provide that hired or leased equipment, if not owner-driven, shall be operated only by employees of the certificated or permitted carriers and require those carriers to use their own available equipment, before hiring any extra equipment. Art. 32, §§ 4 and 5, 358 U.S. at 298—299, 79 S.Ct. at pages 305—306. While we do not think the issue was tendered to us when the case was last here, we are of opinion that these provisions are at least as intimately bound up with the subject of wages as the minimum rental provisions we passed on then. Accordingly, as in the previous case, we hold that Ohio's antitrust law here may not 'be applied to prevent the contracting parties from carrying out their agreement upon a subject matter as to which federal law directs them to bargain.' 358 U.S., at page 295, 79 S.Ct. at page 304.
2
The judgment accordingly is reversed.
3
Reversed.
4
Mr. Justice WHITTAKER dissents.
5
Mr. Justice FRANKFURTER and Mr. Justice STEWART took no part in the consideration or decision of this case.
| 910
|
362 U.S. 610
80 S.Ct. 1038
4 L.Ed.2d 989
Morry LEVINE, Petitioner,v.UNITED STATES of America.
No. 164.
Argued March 22, 1960.
Decided May 23, 1960.
Rehearing Denied June 27, 1960.
See 363 U.S. 858, 80 S.Ct. 1605.
Mr. Myron L. Shapiro, New York City, for petitioner.
Mr. Philip R. Monahan, Washington, D.C., for respondent.
Mr. Justice FRANKFURTER delivered the opinion of the Court.
1
This is a prosecution for contempt arising from petitioner's refusal to answer a series of questions propounded to him by a federal grand jury. In every respect but one, this case is a replica of Brown v. United States, 359 U.S. 41, 79 S.Ct. 539, 3 L.Ed.2d 609, and as to all common issues it is controlled by that case. In Brown, however, we expressly declined to decide the effect of claimed 'secrecy' upon proceedings culminating in the petitioner's sentencing for contempt, 'because the record does not show this to be the fact.' 359 U.S. at page 51, 79 S.Ct. at page 547, note 11. Here, it appears that the contemptuous conduct, the adjudication of guilt, and the imposition of sentence all took place after the public had been excluded from the courtroom, in what began and was continued as 'a Grand Jury proceeding.' The effect of this continuing exclusion in the circumstances of the case is the sole question presented.
2
On the morning of April 18, 1957, pursuant to a subpoena, petitioner appeared as a witness before a federal grand jury in the Southern District of New York engaged in investigating violations of the Interstate Commerce Act. He was asked six questions relevant to the grand jury's investigation. After consultation with his attorney, who was in an anteroom, he refused to answer them on the ground that they might tend to incriminate him. He persisted in this refusal after having been directed to answer by the foreman of the grand jury and advised by government counsel that applicable statutes gave him complete immunity from prosecution concerning any matter as to which he might testify. See 49 U.S.C. § 305(d), 49 U.S.C.A. § 305(d).
3
Later that day the grand jury, government counsel, petitioner and his attorney appeared before Judge Levet, sitting in the District Court for the Southern District of New York, the grand jury having sought 'the aid and assistance of the Court, in a direction to a witness, Morry Levine, who has this morning appeared before the Grand Jury and declined to answer certain questions that have been put to him.' The record of the morning's proceedings before the grand jury was read. After argument by counsel, the judge ruled that the adequate immunity conferred by statute deprived petitioner of the right to refuse to answer the questions put to him. Petitioner was ordered to appear before the grand jury on April 22, and was directed by the court then to answer the questions.
4
On the morning of April 22 petitioner appeared before the grand jury. The questions were again put to him and he again refused to answer. Once again the grand jury, government counsel, petitioner and his counsel went before Judge Levet, for 'the assistance of the Court in regard to the witness Morry Levine.' At this time the record shows the following:
5
'The Court: Will those who have no other business in the courtroom please leave now? I have a Grand Jury proceeding.
6
'The Clerk: The Marshal will clear the court room.
7
'(Court room cleared by the Marshals.)'
8
Petitioner, his counsel, the grand jury, government counsel and the court reporter remained. Petitioner objected to further participation by the court in the process of compelling his testimony, except according to the procedures prescribed by Rule 42(b) of the Federal Rules of Criminal Procedure, 18 U.S.C.A. That provision, which relates to contempts generally, excluding those 'committed in the actual presence of the court' as to which the judge certifies 'that he saw or heard the conduct constituting the contempt,' provides in effect for a conventional trial. In petitioner's view the court was compelled to regard his contempt, if any, as having already been committed out of the presence of the court, through petitioner's disobedience before the grand jury that morning of the court's order of April 18.
9
The judge, however, did not treat petitioner's renewed refusal to answer the grand jury's questions as a definitive contempt. He chose to proceed just as he had two weeks earlier in the case of Brown, reviewed here as Brown v. United States, supra, 359 U.S. 41, 79 S.Ct. 539, 3 L.Ed.2d 609. The morning's grand jury proceedings, showing petitioner's refusals to answer, were read, and petitioner was ordered by the judge to take the stand. The court indicated it was proceeding as '(t)he Court and the Grand Jury' 'in accordance with Rule 42(a),' which relates to the procedure in cases of contempt 'committed in the actual presence of the court.' Over objection, the court then put to petitioner the six questions which he had refused to answer when propounded by the grand jury. Petitioner again refused to answer these questions on the claim of the privilege against self-incrimination. In answer to a question by the court he stated that he would continue to refuse on that ground should the grand jury again put the questions to him. Government counsel asked that petitioner be adjudged in contempt 'committed in the physical presence of the Judge.' The court asked for reasons 'why I should not so adjudicate this witness in contempt.' Petitioner's counsel made three points: (1) that the procedures had not been in accordance with 'the requirements of due process'; (2) that the procedures had not followed the requirements of Rule 42(b) of the Federal Rules of Criminal Procedure; and (3) that, on the merits of the charge, the statutory immunity was not sufficiently extensive to deprive petitioner of his privilege not to answer. No reference was made to the exclusion of the general public from the proceedings. Petitioner was adjudicated in contempt and, after submission by counsel of views regarding sentence, one year's imprisonment was imposed. The conviction was affirmed by the Court of Appeals, 267 F.2d 335, and we granted certiorari, 361 U.S. 860, 80 S.Ct. 118, 4 L.Ed.2d 101, limiting our grant to the question left open in Brown v. United States, namely, whether the 'secrecy' of the proceedings offended either the Due Process Clause of the Fifth Amendment of the Constitution or the public-trial requirement of the Sixth Amendment.
10
The course of proceeding followed by the District Court in this case for compelling petitioner's testimony was the one approved in Brown. Specifically, it was established by that case that, after petitioner had disobeyed the court's direction to answer the grand jury's questions before that body, it was proper for the court, upon application of the grand jury, (1) to disregard any contempt committed outside its presence; (2) to put the questions directly to petitioner in the court's presence as well as in the presence of the grand jury; and (3) to punish summarily under Rule 42(a) as a contempt committed 'in the actual presence of the court' petitioner's refusal thereupon to answer.
11
It was surely not error for the judge initially to have cleared the courtroom on April 22 when the grand jury appeared before him for the second time seeking his 'assistance * * * in regard to the witness Morry Levine.' The Secrecy of grand jury proceedings is enjoined by statute (see 18 U.S.C. § 1508, 18 U.S.C.A. § 1508, and Federal Rules of Criminal Procedure 6(d) and (e)), and a necessary initial step in the proceedings was to read the record of the morning's grand jury proceedings. The precise question involved in this case, therefore, is whether it was error, once the courtroom had been properly, indeed necessarily, cleared, for petitioner's contempt, summary conviction and sentencing to occur without inviting the general public back into the courtroom.
12
From the very beginning of this Nation and throughout its history the power to convict for criminal contempt has been deemed an essential and inherent aspect of the very existence of our courts. The First Congress, out of whose 95 members 20, among them some of the most distinguished lawyers, had been members of the Philadelphia Convention, explicitly conferred the power of contempt upon the federal courts. Section 17 of the Judiciary Act of 1789, 1 Stat. 73, 83, 18 U.S.C.A. § 401. That power was recognized by this Court as early as 1812, in a striking way. United States v. Hudson, 7 Cranch 32, 34, 3 L.Ed. 259. As zealous a guardian of the procedural safeguards of the Bill of Rights as the first Mr. Justice Harlan, in sustaining the power summarily to punish contempts committed in the face of the court, described the power in this way: 'the offender may, in (the court's) discretion, be instantly apprehended and immediately imprisoned, without trial or issue, and without other proof than its actual knowledge of what occurred; * * * such power, although arbitrary in its nature and liable to abuse, is absolutely essential to the protection of the courts in the discharge of their functions.' Ex parte Terry, 1888, 128 U.S. 289, 313, 9 S.Ct. 77, 83, 32 L.Ed. 405. It is a particular exercise of this power of summary punishment of contempt committed in the court's presence which is at issue in this case. This Court has not been wanting in effective alertness to check abusive exercises of that power by federal judges. See Cooke v. United States, 267 U.S. 517, 45 S.Ct. 390, 69 L.Ed. 767; Offutt v. United States, 348 U.S. 11, 75 S.Ct. 11, 99 L.Ed. 11. It would, however, be throwing the baby out with the bath to find it necessary, in the name of the Constitution, to strangle a power 'absolutely essential' for the functioning of an independent judiciary, which is the ultimate reliance of citizens in safeguarding rights guaranteed by the Constitution.
13
Procedural safeguards for criminal contempts do not derive from the Sixth Amendment. Criminal contempt proceedings are not within 'all criminal prosecutions' to which that Amendment applies. Ex parte Terry, 128 U.S. 289, 306—310, 9 S.Ct. 77, 80—82, 32 L.Ed. 405; Cooke v. United States, 267 U.S. 517, 534—535, 45 S.Ct. 390, 394, 69 L.Ed. 767; Offutt v. United States, 348 U.S. 11, 14, 75 S,.ct. 11, 13, 99 L.Ed. 11. But while the right to a 'public trial' is explicitly guaranteed by the Sixth Amendment only for 'criminal prosecutions,' that provision is a reflection of the notion, deeply rooted in the common law, that 'justice must satisfy the appearance of justice.' Offutt v. United States, 348 U.S. 11, at page 14, 75 S.Ct. 11, at page 13. Accordingly, due process demands appropriate regard for the requirements of a public proceeding in cases of criminal contempt, see In re Oliver, 333 U.S. 257, 68 S.Ct. 499, 92 L.Ed. 682, as it does for all adjudications through the exercise of the judicial power, barring narrowly limited categories of exceptions such as may be required by the exigencies of war, see Amendment to Rule 46 of the Admiralty Rules, June 8, 1942, 316 U.S. 717, revoked May 6, 1946, 328 U.S. 882, 28 U.S.C.A., or for the protection of children, see 18 U.S.C. § 5033, 18 U.S.C.A. § 5033.
14
Inasmuch as the petitioner's claim thus derives from the Due Process Clause and not from one of the explciitly defined procedural safeguards of the Constitution, decision must turn on the particular circumstances of the case, and not upon a question-begging because abstract and absolute right to a 'public trial.' Cf. Snyder v. Commonwealth of Massachusetts, 291 U.S. 97, 114—117, 54 S.Ct. 330, 335—336, 78 L.Ed. 674. The narrow question is whether, in light of the facts that the grand jury, petitioner and his counsel were present throughout and that petitioner never specifically made objection to the continuing so-called 'secrecy' of the proceedings or requested that the judge open the courtroom, he was denied due process because the general public remained excluded from the courtroom.
15
The grand jury is an arm of the court and its in camera proceedings constitute 'a judicial inquiry.' Hale v. Henkel, 201 U.S. 43, 66, 26 S.Ct. 370, 375, 50 L.Ed. 652. 'The Constitution itself makes the grand jury a part of the judicial process. It must initiate prosecution for the most important federal crimes. It does so under general instructions from the court to which it is attached and to which, from time to time, it reports its findings.' Cobbledick v. United States, 309 U.S. 323, 327, 60 S.Ct. 540, 542, 84 L.Ed. 783. Unlike an ordinary judicial inquiry, where publicity is the rule, grand jury proceedings are secret. In the ordinary course, therefore, contempt of the court committed through a refusal to answer questions put before the grand jury does not occur in a public proceeding. Publicity fully satisfying the requirements of due process is achieved in such a case when a public trial upon notice is held on the charge of contempt under Rule 42(b) of the Federal Rules of Criminal Procedure.
16
Brown v. United States, supra, established that a grand jury as an arm of the court has available to it another course to vindicate its authority over a lawlessly recalcitrant witness. Appeal may be made to the court under whose aegis the grand jury sits to have the witness ordered to answer the grand jury's inquiries in the judge's physical presence, so that the court's persuasive exertion to induce obedience, and its power summarily to commit for contempt should its authority be ignored, may be brought to bear upon him. Since such a summary adjudication of contempt occurs in the midst of a grand jury proceeding, a clash may arise between the interest, sanctioned by history and statute, in preserving the secrecy of grand jury proceedings, and the interest, deriving from the Due Process Clause, in preserving the public nature of court proceedings.
17
In the present case grand jury secrecy freely gave way insofar as petitioner's counsel was present and was permitted to be fully active in behalf of his client throughout the proceedings before Judge Levet. Petitioner had ample notice of the court's intention to put the grand jury's questions directly to him, and to proceed against him summarily should he persist in his refusal to answer. Had petitioner requested, and the court denied his wish, that the courtroom be opened to the public before the final stage of these proceedings we would have a different case. Petitioner had no right to have the general public present while the grand jury's questions were being read. However, after the record of the morning's grand jury proceedings had been read, and the six questions put to petitioner with a direction that he answer them in the court's presence, there was no further cause for enforcing secrecy in the sense of excluding the general public. Having refused to answer each question in turn, and having resolved not to answer at all, petitioner then might well have insisted that, as summary punishment was to be imposed, the courtroom be opened so that the act of contempt, that is, his definitive refusal to comply with the court's direction to answer the previously propounded questions, and the consequent adjudication and sentence might occur in public. See Cooke v. United States, 267 U.S. 517, 534—536, 45 S.Ct. 390, 394—395, 69 L.Ed. 767. To repeat, such a claim evidently was not in petitioner's thought, and no request to open the courtroom was made at any stage of the proceedings.
18
The continuing exclusion of the public in this case is not to deemed contrary to the requirements of the Due Process Clause without a request having been made to the trial judge to open the courtroom at the final stage of the proceeding, thereby giving notice of the claim now made and affording the judge an opportunity to avoid reliance on it. This was not a case of the kind of secrecy that deprived petitioner of effective legal assistance and rendered irrelevant his failure to insist upon the claim he now makes. Counsel was present throughout, and it is not claimed that he was not fully aware of the exclusion of the general public. The proceedings properly began out of the public's presence and one stage of them flowed naturally into the next. There was no obvious point at which, in light of the presence of counsel, it can be said that the onus was imperatively upon the trial judge to interrupt the course of proceedings upon his own motion and establish a conventional public trial. We cannot view petitioner's untenable general objection to the nature of the proceedings by invoking Rule 42(b) as constituting appropriate notice of an objection to the exclusion of the general public in the circumstances of this proceeding under Rule 42(a).
19
This case is wholly unlike In re Oliver, 333 U.S. 257, 68 S.Ct. 499, 92 L.Ed. 682. This is not a case where it is or could be charged that the judge deliberately enforced secrecy in order to be free of the safeguards of the public's scrutiny; nor is it urged that publicity would in the slightest have affected the conduct of the proceedings or their result. Nor are we dealing with a situation where prejudice, attributable to secrecy, is found to be sufficiently impressive to render irrelevant failure to make a timely objection at proceedings like these. This is obviously not such a case. Due regard generally for the public nature of the judicial process does not require disregard of the solid demands of the fair administration of justice in favor of a party who, at the appropriate time and acting under advice of counsel, saw no disregard of a right, but raises an abstract claim only as an afterthought on appeal.
20
Affirmed.
21
Mr. Justice BLACK, whom The Chief Justice and Mr. Justice DOUGLAS join, dissenting.
22
The Court here upholds the petitioner's conviction and imprisonment for contempt of court in refusing to answer grand jury questions, although admitting that 'the contemptuous conduct, the adjudication of guilt, and the imposition of sentence all took place after the public had been excluded from the courtroom, in what began and was continued as 'a Grand Jury proceeding." Stated not quite so euphemistically the Court is simply saying that this petitioner was summarily convicted and sentenced to a one-year prison term after a 'trial' from which the public was excluded—a governmental trial technique that liberty-loving people have with great reason feared and hated in all ages.
23
This Court condemned such secret 'trials' 12 years ago in the case of In re Oliver, 333 U.S. 257, 68 SCt. 499, 92 L.Ed. 682. There Oliver had been convicted by a Michigan state court and sentenced to jail for 60 days on a charge of contempt based on his refusal to answer questions propounded by a one-man grand jury. Since the public had been excluded from Oliver's 'trial' we were squarely faced with this precise question: 'Can an accused be tried and convicted for contempt of court in grand jury secrecy?' Id., 333 U.S. at pages 265—266, 68 S.Ct. at page 504. Our answer was an emphatic 'No,' although Mr. Justice Frankfurter and Mr. Justice Jackson dissented. We held that Michigan had denied Oliver due process of law guaranteed by the Fourteenth Amendment by convicting him of contempt in a trial from which the public was excluded. In the course of our decision we said this:
24
'Counsel have not cited and we have been unable to find a single instance of a criminal trial conducted in camera in any federal, state, or municipal court during the history of this country. Nor have we found any record of even one such secret criminal trial in England since abolition of the Court of Star Chamber in 1641, and whether that court ever convicted people secretly is in dispute. Summary trials for alleged misconduct called contempt of court have not been regarded as an exception to this universal rule against secret trials, unless some other Michigan one-man grand jury case may represent such an exception.' Id., 333 U.S. 266, 68 S.Ct. 504.
25
It seems apparent, therefore, that the Court in upholding petitioner's sentence for contempt here is not only repudiating our Oliver decision in whole or in part but is at the same time approving a secret trial procedure which apologists for the Star Chamber have always been careful to deny even that unlimited and unlamented court ever used. The Court holds that petitioner's secret trial here violated neither the Due Process Clause of the Fifth Amendment nor the Sixth Amendment's guarantee that '(i)n all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial * * *.' Certainly the one-year prison sentence for criminal contempt here, like the three-year criminal contempt sentence in Green v. United States, 356 U.S. 165, 78 S.Ct. 632, 2 L.Ed.2d 672, has all the earmarks and the consequences of a plain, ordinary criminal prosecution. Id., 356 U.S. 193, 78 S.Ct. 648 (dissenting opinion).
26
In the Green case I asked for a reappraisal of the whole doctrine of summary contempt trials. I repeat that 'I cannot help but believe that this arbitrary power to punish by summary process, as now used, is utterly irreconcilable with first principles underlying our Constitution and the system of government it created * * *.' Green v. United States, supra, 356 U.S. at page 208, 78 S.Ct. at page 656. This case illustrates once more the dangers of such trials and the fact that it is nothing but a fiction to say that by labeling a prosecution as one for 'contempt' it is changed from that which it actually is—a criminal prosecution for criminal punishment—a procedure which is being used more and more each year as a substitute for trials with Bill of Rights safeguards. The length to which the Court is going in this case—depriving petitioner of the specific public trial safeguard of the Sixth Amendment and holding that he has no more than whatever measure of protection the Court chooses to give him under its flexible interpretation of the Due Process Clause of the Fifth Amendment—is shown by its express declaration that the Sixth Amendment's guarantee of a public trial for those charged with a crime provides no protection at all if the crime charged is labeled 'contempt.' And the Court cites no case holding that the public trial provision of that Amendment does not apply to criminal contempt proceedings.
27
I wholly reject the idea that the presence of any power so awesome and arbitrary as 'criminal contempt' has grown to be, as nourished by courts, is essential to preserve the independence of the judiciary and I am constrained to say that such a plea of necessity has a strange sound when voiced by our independent judiciary dedicated to fair trials in accordance with ancient safeguards. It is pertinent here to repeat the statement of one of our great lawyers, Edward Livingston, who said: "Not one of the oppressive prerogatives of which the crown has been successively stripped, in England, but was in its day, defended on the plea of necessity. Not one of the attempts to destroy them, but was deemed a hazardous innovation." Green v. United States, supra, 356 U.S. at page 214, 78 S.Ct. at page 659.
28
In the closing part of its opinion the Court indicates that its decision rests to some extent upon a failure of petitioner to make the proper kind of objection to the secrecy of his trial. His objection is referred to as 'an abstract claim (raised) only as an afterthought on appeal.' The Court thinks that the trial judge was not given 'an opportunity to avoid reliance on (the claim now made).' The record shows, however, that on the two occasions petitioner was brought before the court, he requested a trial according to due process, notice and specification of the charges against him, an opportunity to prepare his defenses, an adjournment to obtain compulsory process and subpoena witnesses as well as, in general, proceedings under Rule 42(b), which undoubtedly calls for a public trial. Petitioner's objection seems sufficient to me to raise the extremely important point of his constitutional right to a public trial.
29
Despite the Court's decision that petitioner's repeated claims for constitutional procedures were not enough to raise the constitutionality of his secret 'trial,' there is an intimation in the Court's opinion that maybe at some future time, in some future contempt conviction, the Court would frown upon exclusion of the public from some part of a contempt trial such as this. Here it is said, however, 'The proceedings properly began out of the public's presence and one stage of them flowed naturally into the next. There was no obvious point at which, in light of the presence of counsel, it can be said that the onus was imperatively upon the trial judge to interrupt the course of proceedings upon his own motion and establish a conventional public trial.' The theory of the Court here seems to be that since grand jury hearings in the grand jury room are secret, the grand jury's proceedings in court against allegedly recalcitrant witnesses may also be in secret. But surely this cannot be. The grand jury has to report to the judge to invoke his assistance and it did so in this case, bringing Levine along. The grand jury then preferred charges against him to the court. To say that grand jury secrecy extends into the courtroom is wholly to ignore the difference between secrecy of grand jury deliberations and votes, and secrecy of a trial for contempt. Not only are the grand jury deliberations supposed to be free from the intrusions of others, but the idea of a grand jury is one of an independent body, which even the judge shall not be allowed to interfere with or control. See, e.g., Stirone v. United States, 361 U.S. 212, 218, 80 S.Ct. 270, 273, 4 L.Ed.2d 252. The grand jury did not enter the courtroom to deliberate or to vote; it went there and took the petitioner there in order to ask the court to compel him to testify under penalty of contempt. At that moment the grand jury deliberations were temporarily ended and a court proceeding against petitioner began. It was then that there arose petitioner's constitutional right to be free from secret procedures gravely jeopardizing his liberty or property.1 The judge has no more right or power under the law to intrude on the secret deliberations of a grand jury than anyone else. Grand juries, as this Court has said, "* * * are not appointed for the prosecutor or for the court; they are appointed for the government and for the people * * *." Hale v. Henkel, 201 U.S. 43, 61, 26 S.Ct. 370, 373, 50 L.Ed. 652. See also Costello v. United States, 350 U.S. 359, 362, 76 S.Ct. 406, 408, 100 L.Ed. 397. When the grand jury came into the courtroom with the petitioner it was to get immediate action against the petitioner under its charges, which the Court now holds the judge was entitled to try summarily and secretly without further notice. This was the kind of trial from which the public should not be excluded if we are to follow constitutional commands. In fact, I believe, as I said in Green v. United States, supra, that at the very least a man whose liberty may be taken away for a period of months or years as punishment, is entitled to a full-fledged, constitutional, Bill of Rights trial.2
30
The Court seems to conclude its holding by invoking the doctrine of error without injury. In my judgment it is scant respect for the constitutional command that trials be had in public to look at the circumstances of the trial and conviction of a man tried in secret and approve the trial on the ground that 'anyhow he wasn't hurt.' I think every man is hurt when any defendant in America is convicted and sent to the penitentiary after a secret 'trial' which is condemned by the Constitution's requirement of public trials as well as its command that all trials be conducted according to due process of law.
31
Mr. Justice BRENNAN, with whom Mr. Justice DOUGLAS joins, dissenting.
32
The Court's opinion makes it plain that the petitioner was adjudicated guilty of criminal contempt through a proceeding from which the public was excluded. And the whole Court is agreed that, whether petitioner's right is founded on the Fifth or the Sixth Amendment, he possessed a right, guaranteed by the Constitution, that this adjudication of his guilt of crime be made in public.
33
But the Court concludes that despite this, the petitioner is not entitled to our judgment of reversal because he did not object in precise enough terms to this infringement of his constitutional rights. Its ruling is, I submit, a radical departure from the principles which have prevailed, and should continue to prevail, in this Court respecting the waiver of a criminal defendant's constitutional procedural rights. The key to the matter has been the defendant's consent—his 'express, intelligent consent.' Adams v. United States ex rel. McCann, 317 U.S. 269, 277, 63 S.Ct. 236, 241, 87 L.Ed. 268. The special interest of the public in the publicity of adjudications of guilt of crime has been repeatedly pointed out judicially, see United States v. Kobli, 3 Cir., 172 F.2d 919, 924; Davis v. United States, 8 Cir., 247 F. 394, 395—396; Neal v. State, 86 Okl.Cr. 283, 289, 192 P.2d 294, 297, and this has led some to argue that even the defendant's express consent should not suffice to permit proceedings to be had in secret. Kirstowsky v. Superior Court, 143 Cal.App.2d 745, 300 P.2d 163; United Press Ass'ns v. Valente, 308 N.Y. 71, 93, 123 N.E.2d 777, 788 (dissenting opinion). But though the defendant's power to waive the constitutional protection be assumed, this consideration underscores how imperative is the requirement that the waiver of publicity be a meaningful one, based on real consent—be part of the 'defendant's own conduct of his defense.' Id., 308 N.Y. at page 81, 123 N.E.2d at page 780 (majority opinion). The waiver must be one based on the defendant's conclusion that 'in his particular situation his interests will be better served by foregoing the privilege than by exercising it.' United States v. Sorrentino, 3 Cir., 175 F.2d 721, 723.
34
This requirement could not by the greatest stretch of the imagination be said to have been met here. Here petitioner's counsel by no means consented to the proceedings, but repeatedly made the most fundamental objections to the procedure whereby his client was being adjudicated guilty of crime, based on the Criminal Rules and on the very provision of the Constitution which the Court today finds applicable. If the objection had been sustained, and the procedure contended for adopted, the error now laid bare would not have been committed. Whether the objection was well taken on its own grounds is irrelevant, since it is consent that must be found. The question is not whether the trial court was apprised of its error in the talismanic language the Court now finds in retrospect to have been essential. There are, to be sure, trial errors as to which specific objection is required of counsel. But where fundamental constitutional guarantees are omitted, the question is rather whether consent to proceed without the constitutional protection can be found. It is patent here that it cannot. Of course, this principle is hardly to be altered by the Court's transparent semantic device of phrasing the constitutional right of this defendant as one that did not come into existence until he made explicit request that he have its benefits.1 The judgment should be reversed.
1
I omit the word 'life' from the usual phrase 'life, liberty or property' because the courts have not yet said that their vast power to punish for contempt extends to taking the life of the convicted defendant.
2
It is to be borne in mind that petitioner is not to be put in jail with the keys in his pocket, so that he would be released immediately upon complying with the court's valid order, see Brown v. United States, 359 U.S. 41, 55, 79 S.Ct. 539, 549, 3 L.Ed.2d 609 (dissenting opinion), but is being punished by a year's imprisonment for a past and completed offense. See, id., 359 U.S. 53, 79 S.Ct. 548; Green v. United States, supra, 356 U.S. at page 197, 78 S.Ct. at page 650.
1
Apparently through the same device the Court has avoided the settled rule of the federal courts that a showing of prejudice is not necessary for reversal of a conviction not had in public proceedings. Davis v. United States, 8 Cir., 247 F. 394, 398—399; Tanksley v. United States, 9 Cir., 145 F.2d 58, 59, 156 A.L.R. 257; United States v. Kobli, 3 Cir., 172 F.2d 919, 921. See People v. Jelke, 308 N.Y. 56, 67—68, 123 N.E.2d 769, 775.
| 01
|
362 U.S. 628
80 S.Ct. 1050
4 L.Ed.2d 1002
ROHR AIRCRAFT CORPORATION, a California Corporation, Appellant,v.COUNTY OF SAN DIEGO, a Body Corporate, and City of Chula Vista, a Municipal Corporation.
No. 295.
Argued March 30, 1960.
Decided May 23, 1960.
Mr. Leroy A. Wright, San Diego, Cal., for appellant.
Mr. Manuel L. Kugler, Chula Vista, Cal., and Henry A. Dietz, San Diego, Cal., for appellees.
Messrs. Myron C. Baum, Washington, D.C., for the United States, as amicus curiae, by special leave of Court.
Mr. Justice CLARK delivered the opinion of the Court.
1
The question to be decided is whether real property declared to be surplus under the Surplus Property Act of 1944, 58 Stat. 765, but the record title to which is in the Reconstruction Finance Corporation, continues to be subject to local taxation under the exemption of § 8 of the Reconstruction Finance Corporation Act, 47 Stat. 5.1 The Supreme Court of California and the Supreme Court of Michigan2 have held that it does. The Court of Claims has reached the opposite conclusion.3 In view of this conflict we agreed to hear this case, but postponed consideration of the question of jurisdiction to the hearing on the merits. 361 U.S. 859, 80 S.Ct. 122, 4 L.Ed.2d 99.
2
On the question of jurisdiction, we believe that appellant did not make the required 'explicit and timely insistence in the state courts that a state statute, as applied, is repugnant to the federal Constitution, treaties or laws. * * * And it has long been settled that an attack upon a tax assessment or levy, such as (appellant) here made, on the ground that it infringes a taxpayer's federal rights, privileges, or immunities, will not sustain an appeal * * *.' Charleston Federal Savings & Loan Ass'n v. Alderson, 1945, 324 U.S. 182, 185, 65 S.Ct. 624, 627, 89 L.Ed. 857.4 The appeal is therefore dismissed. While the case is not properly here by appeal, we treat the same as a petition for certiorari under 28 U.S.C. § 2103, 28 U.S.C.A. § 2103.5 The petition is granted. On the merits, we conclude that the property involved is not within the waiver provision of the federal Act.
3
The language of § 8 of the Reconstruction Finance Corporation Act was borrowed from earlier federal legislation dealing with federal financial institutions.6 The congressional policy appears to have been to waive tax exemption on real property owned by government corporations whose functions were primarily financial in nature. Originally conceived for the purpose of making loans to distressed business concerns, the Reconstruction Finance Corporation was in this category. Apparently Congress was concerned that property obtained by the Corporation through its financial operations in aid of economic recovery policies would lose its taxable status. Through § 8, therefore, Congress preserved the right of state and local governmental bodies to tax property even though it came into the hands of the Corporation. Success crowned the economic efforts of the Corporation, and, as the country approached the critical period immediately preceding its entry into World War II, Congress in 1940 extended the Corporation's functions to include the stockpiling of critical supplies and the operation of plants engaged in the manufacture of war mate rial. 54 Stat. 573. It was soon apparent that large tracts of land would be necessary in this operation, and the waiver was extended to the real estate holdings of the Defense Plant Corporation, a subsidiary of the Reconstruction Finance Corporation. 55 Stat. 248.
4
The termination of the war quickly threw substantial portions of such property into disuse, there being no further need for the mass production of war mate rial. The President created the War Assets Administration for the purpose of disposing of all government surplus property.7 After March 25, 1946, government agencies possessing property surplus to official needs were required so to declare it and to transfer it to the Administration for disposal.8 By declaration of May 29, 1946, the Reconstruction Finance Corporation declared the subject property to be surplus to its needs and responsibilities. Under the Surplus Property Act, this declaration transferred9 to the War Assets Administration the functions of: caring for and handling the property pending disposal (§ 3(g) and § 6); making disposition of the property on such terms as it saw fit (§ 9(b) and § 15(a), including donation under certain conditions (§ 13(b); and the power of execution and delivery of all necessary papers incident to transfer of title (§ 15(b). It further provided that all funds derived from such disposition would be covered into the United States Treasury as miscellaneous receipts (§ 30(a). Pursuant to this declaration by the Reconstruction Finance Corporation, the War Assets Administration took possession of this property on May 29, 1946, and its successor, the General Services Administration,10 retained possession until September 1, 1949, during which period the property was used as a storage depot and a sales center for surplus property held by the Administration. On the latter date, the property was leased to appellant's predecessor. The lease described the lessor as the 'Reconstruction Finance Corporation * * * and the United States of America, both acting by and through the General Services Administrator under * * * the Surplus Property Act of 1944.'
5
Appellees assessed ad valorem real property taxes on the realty against the Reconstruction Finance Corporation, as owner, for the fiscal tax years 1951 to 1955, inclusive. Appellant paid the taxes11 and filed this suit after claims for refund had been denied. The trial court entered judgment against appellant. On appeal, the Supreme Court of California affirmed the judgment of the trial court, and denied the claim for refund. 51 Cal.2d 759, 336 P.2d 521, 523.
6
There would be no question as to the exemption of the real property involved had the record title been in the name of the United States. Since March 17, 1955, in fact, it has been so recorded; on that date the Reconstruction Finance Corporation executed and recorded a quit-claim deed to the United States.
7
The Supreme Court of California correctly posed as the underlying question, 'whether the land ceased to be 'real property of the Reconstruction Finance Corporation' after it was declared surplus and became subject to the provisions of the Surplus Property Act of 1944. That court found that, since no deed was executed transferring title out of the Reconstruction Finance Corporation until 1955, it remained 'property of the * * * Corporation' and hence subject to taxation until that time. We believe the court placed too much reliance on the fact that the bare record title to the property remained in the name of the Corporation.
8
It appears to us that the purpose of the waiver provision was to permit taxation of real property being used by the Reconstruction Finance Corporation in the performance of its functions. Such use was terminated when the property was declared surplus in 1946. At that time another agency of the Government took both the occupancy and complete control of the property for the purpose of management and disposition. The Reconstruction Finance Corporation, under the specific provisions of the Surplus Property Act, thereby lost all power and control over the property, which came into the hands of the Administrator for the account of the United States, any proceeds therefrom being ordered paid into the United States Treasury. Thereafter, the Administrator elected, as he had the statutory power to do, to lease the property to appellant's predecessor. The real property, however, remained in the account of the United States, not the Reconstruction Finance Corporation. As the Supreme Court of California recognized, the general rule is 'that lands owned by the United States of America or its instrumentalities are immune from state and local taxation.' We think that the land here was 'owned' by the United States.
9
We believe that California overlooks the fact that, while the 1949 lease was formally made in the name of both the United States and the Reconstruction Finance Corporation, as lessors, it recited on its face that the property was 'surplus property of the Government of the United States' and subject to the Surplus Property Act of 1944. Furthermore, this lease noted that the property had 'been assigned to War Assets Administration for disposal,' and that 'the Department of Air Force has determined that the use of the leased premises by the Lessee herein is necessary for the production of military equipment for the National Defense.' Moreover, the property had been occupied by the War Assets Administration during the two years immediately preceding its lease. The appellees' contention seems to be that, since the lease was in the name of the Reconstruction Finance Corporation as well as the United States, the land was 'property of the Corporation.' We hardly think such a conclusion inevitable. We believe that the appropriate test would turn on practical ownership of the property rather than the naked legal title. This is the more necessary with respect to public property where the record title may often be in a government agency or department—or, for that matter, in an official of the Government—rather than in the name of the United States. Here the Reconstruction Finance Corporation had no proprietary interest in the property, no possession or control thereof, was performing none of its functions with regard thereto, and could receive none of the income or future benefits therefrom. Even though it held the record title, such holding, under the circumstances here, could be only for the benefit of the United States. All of the incidents of beneficial ownership ended by the express mandate of the statute when the property was declared surplus and transferred to another agency for disposition.
10
When confronted with the same issue as presented by the instant case, the Court of Claims reached a conclusion directly contrary to that of the Supreme Court of California. Board of County Comm'rs of Sedgwick County v. United States, 123 Ct.Cl. 304, 105 F.Supp. 995, 123 Ct.Cl. 304. The Court of Claims there noted that, after the declaration of surplus, the Reconstruction Finance Corporation had no 'physical possession, control, or custody of the property. It had neither the use nor the right to use the property.' The court went on to conclude that '(t)here is no indication that Congress intended to waive immunity from taxation under these circumstances.' 123 Ct.Cl. at page 324, 105 F.Supp. at page 1001. We ageee with the Court of Claims 'that the cloak of immunity descended upon the property (when it was declared surplus) and no tax liability for the property could arise thereafter.' 123 Ct.Cl. at page 324, 105 F.Supp. at page 1002.
11
Since the crucial element is the intent of Congress, it is important to note the enactment of a 1955 statute providing the States relief from the effects of federal immunity. 40 U.S.C. §§ 521—524, 40 U.S.C.A. §§ 521—524. The congressional declaration of purpose in that statute 'recognizes that the transfer of real property having a taxable status from the Reconstruction Finance Corporation * * * to another Government department has often operated to remove such property from the tax rolls * * *' 'Transfer' was defined to include 'a transfer of custody and control of, or accountability for the care and handling of,' the property, as well as 'transfer of legal title.' The statute goes on to provide for certain payments in lieu of taxes where such a transfer occurs. The relevance of this statute lies in a congressional sanction of the rule of the Sedgwick County case, construing the waiver provision.
12
We cannot say that Congress in 1932 intended to waive the tax exemption on 'real property of the Corporation' after the Corporation found the property surplus to its needs and responsibilities and transferred it to another agency, for management and disposition as United States property. To say that the Government's land remained taxable merely because no formal deed was executed transferring title, either to itself or any of its designated agencies, would but make a local tollgate of a technicality.
13
Nor can we agree that the short administrative practice claimed here continued the waiver in effect. Even if the responsible agency had permitted the paper title to the Government's property to remain in the Reconstruction Finance Corporation for the sole purpose of allowing it to be taxed, the congressional mandate in the Surplus Property Act of 1944 could not be overridden. As to such matters, any adjustments between the federal and the local governments are strictly legislative ones for the Congress, United States v. City of Detroit, 1958, 355 U.S. 466, 474, 78 S.Ct. 474, 479, 2 L.Ed.2d 424, and not within the discretion of the executive agencies.
14
The judgment is therefore reversed and the cause remanded for further proceedings not inconsistent with this opinion.
15
Reversed and remanded.
16
Mr. Justice BLACK and Mr. Justice DOUGLAS dissent.
1
Section 8 (as amended), 15 U.S.C.A. § 607:
'* * * any real property of the Corporation shall be subject to * * * State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.' 61 Stat. 205; 15 U.S.C. § 607, 15 U.S.C.A. § 607.
2
Continental Motors Corp. v. Township of Muskegon, 346 Mich. 141, 77 N.W.2d 370.
3
Board of County Comm'rs of Sedgwick County v. United States, 123 Ct.Cl. 304, 105 F.Supp. 995. In a case involving property in a similar posture, the Ninth Circuit reached a result in accord with Sedgwick County, and contrary to the California and Michigan courts. United States v. Shofner Iron & Steel Works, 9 Cir., 168 F.2d 286. In Shofner, the ultimate issue was not tax immunity, but ejectment of a defendant from government property.
4
28 U.S.C. § 1257, 28 U.S.C.A. § 1257 provides:
'Final judgments or decrees rendered by the highest court of a State in which a decision could be had, may be reviewed by the Supreme Court as follows:
'(2) By appeal, where is drawn in question the validity of a statute of any state on the ground of its being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of its validity.
'(3) By writ of certiorari, * * * where any title, right, privilege or immunity is specially set up or claimed under the Constitution, treaties or statutes of * * * the United States.'
5
28 U.S.C. § 2103, 28 U.S.C.A. § 2103:
'If an appeal to the Supreme Court is improvidently taken from the decision of the highest court of a State in a case where the proper mode of a review is by petition for certiorari, this alone shall not be ground for dismissal; but the papers whereon the appeal was taken shall be regarded and acted on as a petition for writ of certiorari and as if duly presented to the Supreme Court at the time the appeal was taken. * * *'
6
See 13 Stat. 99, 111, 12 U.S.C. § 548, 12 U.S.C.A. § 548 (national banking associations); 38 Stat. 251, 258, 12 U.S.C. § 531, 12 U.S.C.A. § 531 (Federal Reserve Banks); 39 Stat. 380, 12 U.S.C. §§ 931, 933, 12 U.S.C.A. §§ 931, 933 (Federal Land Banks); 42 Stat. 1469, 12 U.S.C. § 1261, 12 U.S.C.A. § 1261 (National Agricultural Credit Corporation).
7
See Exec.Order No. 9689, dated Jan. 31, 1946, 11 Fed.Reg. 1265, U.S.Code Cong.Service 1946, p. 1761.
8
See Surplus Property Act of 1944, 58 Stat. 765, 50 U.S.C.A.Appendix, § 1611 et seq.
9
The Act did not require the execution of a deed to the Administration.
10
As of July 1, 1949, Congress transferred all of the functions of the War Assets Administration to the General Services Administration. See Federal Property and Administrative Services Act of 1949, c. 288, 63 Stat. 377, 5 U.S.C.A. § 630 et seq., 40 U.S.C.A. § 471 et seq.
11
By the terms of the lease, the lessee undertook to pay all taxes legally assessed against the property.
| 89
|
363 U.S. 1
80 S.Ct. 961
363 U.S. 121
4 L.Ed.2d 1025
4 L.Ed.2d 1096
UNITED STATES of America, Plaintiff.v.STATES OF LOUISIANA, TEXAS, MISSISSIPPI, ALABAMA AND FLORIDA.
No. 10, Original.
May 31, 1960.
[Syllabus from pages 1-3 intentionally omitted]
Messrs. J. Lee Rankin, Sol. Gen., George S. Swarth, Washington, D.C., for the Government.
Messrs. Jack P. F. Gremillion, Atty. Gen. of Louisiana, W. Scott Wilkinson, Sp. Asst. Atty. Gen., Victor A. Sachse, Baton Rouge, La., for State of Louisiana.
Messrs. Joe T. Patterson, Atty. Gen. of Mississippi, John H. Price, Asst. Atty. Gen., for State of Mississippi.
Messrs. Richard W. Ervin, Atty. Gen. of Florida, Spessard L. Holland, U.S. Senate, Washington, D.C., for State of Florida.
Messrs. Will Wilson, Atty. Gen. of Texas, Price Daniel, Governor of Texas, James P. Hart, J. Chrys Dougherty, Austin, Tex., for State of Texas.
Mr. Gordon Madison, Asst. Atty. Gen. of Alabama, for State of Alabama.
Mr. Justice HARLAN delivered the opinion of the Court.
1
The United States, invoking our original jurisdiction under Art. III, § 2, of the Constitution, brought this suit against the States of Louisiana, Texas, Mississippi, Alabama, and Florida, seeking a declaration that it is entitled to exclusive possession of, and full dominion and power over, the lands, minerals, and other natural resources underlying the waters of the Gulf of Mexico more than three geographical miles seaward from the coast of each State and extending to the edge of the Continental Shelf.1 The complaint also asks that the States be enjoined from interfering with the rights of the United States in that area, and that they be required to account for all sums of money derived by them therefrom since June 5, 1950.2 The case is now before us on the motions of the United States for judgment on the pleadings and for dismissal of Alabama's cross bill seeking to establish its rights to such submerged lands and resources within three marine leagues of its coast.
2
The controversy is another phase of the more than 20 years' dispute between the coastal States and the Federal Government over their respective rights to exploit the oil and other natural resources of offshore submerged lands. In 1947 this Court held that, as against California, the United States possessed paramount rights in such lands underlying the Pacific Ocean seaward of the low-water mark on the coast of California and outside of inland waters. United States v. State of California, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889; 332 U.S. 804, 68 S.Ct., 20, 92 L.Ed. 382. And on June 5, 1950, the Court, following the principles announced in the California case, made like holdings with respect to submerged lands in the Gulf of Mexico similarly lying off the coasts of Louisiana and Texas, and directed both States to account to the United States for all sums derived from natural resources in those areas after that date. United States v. State of Louisiana, 339 U.S. 699, 70 S.Ct. 914, 94 L.Ed. 1216; 340 U.S. 899, 71 S.Ct. 275, 95 L.Ed. 651; United States v. State of Texas, 339 U.S. 707, 70 S.Ct. 918, 94 L.Ed. 1221;340 U.S. 900, 71 S.Ct. 276, 95 L.Ed. 652.3
3
On May 22, 1953, Congress, following earlier repeated unsuccessful attempts at legislation dealing with state and federal rights in submerged lands,4 passed the Submerged Lands Act, 67 Stat. 29, 43 U.S.C. §§ 1301—1315, 43 U.S.C.A. §§ 1301 1315. By that Act the United States relinquished to the coastal States all of its rights in such lands within certain geographical limits, and confirmed its own rights therein beyond those limits. The Act was sustained in State of Alabama v. State of Texas, 347 U.S. 272, 74 S.Ct. 481, 98 L.Ed. 689, as a constitutional exercise of Congress' power to dispose of federal property, Const.Art. IV, § 3, cl. 2. Since the Act concededly did not impair the validity of the California, Louisiana, and Texas cases, which are admittedly applicable to all coastal States, this case draws in question only the geographic extent to which the statute ceded to the States the federal rights established by those decisions.
4
The purposes of the Submerged Lands Act are described in its title as follows:
5
'To confirm and establish the titles of the States to lands beneath navigable waters within State boundaries and to the natural resources within such lands and waters, to provide for the use and control of said lands and resources, and to confirm the jurisdiction and control of the United States over the natural resources of the seabed of the Continental Shelf seaward of State boundaries.'
6
To effectuate these purposes the Act, in pertinent part—
7
1. relinquishes to the States the entire interest of the United States in all lands beneath navigable waters within state boundaries (§ 3, 43 U.S.C. § 1311, 43 U.S.C.A. § 1311);5
8
2. defines that area in terms of state boundaries 'as they existed at the time (a) State became a member of the Union, or as heretofore approved by the Congress,' not extending, however, seaward from the coast of any State more than three marine leagues6 in the Gulf of Mexico or more than three geographical miles in the Atlantic and Pacific Oceans (§ 2, 43 U.S.C. § 1301, 43 U.S.C.A. § 1301);7
9
3. confirms to each State a seaward boundary of three geographical miles, without 'questioning or in any manner prejudicing the existence of any State's seaward boundary beyond three geographical miles if it was so provided by its constitution or laws prior to or at the time such State became a member of the Union, or if it has been heretofore approved by Congress' (§ 4, 43 U.S.C. § 1312, 43 U.S.C.A. § 1312);8 and
10
4. For purposes of commerce, navigation, national defense, and international affairs, reserves to the United States all constitutional powers of regulation and control over the areas within which the proprietary interests of the States are recognized (§ 6(a), 43 U.S.C. § 1314, 43 U.S.C.A. § 1314);9 and retains in the United States all rights in submerged lands lying beyond those areas to the seaward limits of the Continental Shelf (§ 9, 43 U.S.C. § 1302, 43 U.S.C.A. § 1302).10
11
The United States concedes that the statute grants to each of the defendant States submerged land rights in the Gulf of Mexico to the extent of three geographical miles, but contends that none of them is entitled to anything more. The States, conceding that three leagues is the limit of the statute's grant in the Gulf contend that each of them is entitled to that much. The wide-ranging arguments of the parties, reflecting no doubt the magnitude of the economic interests at stake,11 can be reduced to the following basic contentions:
12
The Government starts with the premise that the Act grants submerged land rights to a distance of more than three miles only to the extent that a Gulf State can show, in accordance with § 2(b) of the Act, either that it had a legally established seaward boundary in excess of three miles at the time of its admission to the Union, or that such a boundary was thereafter approved for it by Congress prior to the passage of the Submerged Lands Act. It is contended that the Act did not purport to determine, fix, or change the boundary of any State, but left it to the courts to ascertain whether a particular State had a seaward boundary meeting either of these requirements. The Government then urges, as to any State relying on its original seaward boundary, that the Act contemplates as the measure of the grant a boundary which existed subsequent to a State's admission to the Union, and not one which existed only prior to admission—in other words, a boundary carrying the legal consequences of the event of admission. It reasons from this that since a State's seaward boundary cannot be greater than the national maritime boundary, and since the national boundary was at all relevant times never greater than three miles, no State could have had a seaward boundary in excess of three miles, regardless of what it may have claimed prior to admission. Further, the Government undertakes to show that, irrespective of the extent of the national maritime boundary, none of these States ever had a valid seaward boundary in excess of three miles, even prior to admission, and that no such boundary was thereafter approved by Congress for any State.
13
The States, on the other hand, make several alternative arguments. At one extreme, they contend that the Submerged Lands Act ipso facto makes a three-league grant to all the Gulf States, or at least that the Act by its terms establishes the seaward boundary of some States, notably Texas and Florida, at three leagues. Alternatively, they argue that if the extent of such state boundaries 'at the time' of admission was left to judicial determination, then the controlling inquiry is what seaward boundary each State had just prior to admission. If, however, the Act contemplates a boundary as fixed by the event of admission, each State contends that Congress fixed for it a three-league Gulf boundary, and that whatever may have been the extent of the national maritime boundary at the time is an irrelevant factor. Florida further contends that when it was readmitted to the Union in 1868, Congress approved for it a three-league Gulf boundary. And finally the States argue that if the national boundary is in any way relevant, it has at all material times in fact been at three leagues in the Gulf of Mexico.
14
Both sides have presented in support of their respective positions a massive array of historical documents, of which we take judicial notice, and substantially agree that all the issues tendered can properly be disposed of on the basis of the pleadings and such documents.
15
In this opinion we consider the issues arising in common between the Government and all the defendant States, and the particular claims of Texas, Louisiana, Mississippi, and Alabama, all of which depend upon their original admission boundaries. The particular claims of Florida, which involve primarily its readmission boundary, are considered in a separate opinion. 363 U.S. 121, 80 S.Ct. 1026.
I.
16
The Common Issues.
17
A. The Statute On Its Face.
18
The States' contention that the Act ipso facto grants them submerged land rights of three leagues in the Gulf may be shortly answered. The terms of the statute require rejection of such a construction. Rather the measure of the grant in excess of three miles is made to depend entirely upon the location of a State's original or later Congressionally approved maritime boundary, subject only to the three-league limitation of the grant.
19
We turn next to the question whether, as the States contend, the first of the two alternative requirements of § 2—a boundary which 'existed at the time such State became a member of the Union'—is satisfied merely by a showing a preadmission boundary, or whether, as the Government claims, that requirement contemplates only a boundary that carries the legal consequences of the event of admission. While it is manifest that the second requirement of § 2—a boundary which was 'heretofore approved by the Congress'—must take into account the effect of Congressional action, it is not clear from the face of the statute that the same is true of the first requirement—a boundary 'as it existed at the time (a) State became a member of the Union.'
20
The Government argues that in construing the first requirement of § 2 the effect of Congressional action cannot be ignored because to do so would be to measure the boundary prior to the time a State became a member of the Union, and 'at the time' cannot mean 'prior to the time.' However, it might be contended with equal force that to take account of the effect of Congressional action would be to measure the boundary after the time the State became a member of the Union, and 'at the time' cannot mean 'after the time.' Indeed, if 'at the time' were to be taken in a perfectly literal sense, it could refer only to the timeless instant before which the consequences of not being a State would obtain, and after which the consequences of statehood would follow, leaving unanswered the question whether the effect of Congressional action was to be considered or not. In short, if the term is to be given content it must be read as referring either to some time before or after the instant of admission, or to both times.
21
As an aid to construction of 'at the time' in § 2, the Government points to § 4, the last sentence of which states:
22
'Nothing in this section is to be construed as questioning or in any manner prejudicing the existence of any State's seaward boundary beyond three geographical miles if it was so provided by its constitution or laws prior to or at the time such State became a member of the Union, or if it has been heretofore approved by Congress.' (Emphasis supplied.)
23
It is urged that the disjunctive use of the terms 'prior to' and 'at the time' shows that the latter must have been used to refer to the time after admission, since the phraseology would otherwise be redundant, and that such meaning should also be attributed to the same term in § 2, thereby including the effect of Congressional action. But, as has already been indicated, 'at the time' inherently can also be taken as referring to the preadmission period, thereby excluding the effect of such action. And on that basis there would be no redundancy in the phrase 'prior to or at the time' if 'at the time' meant immediately before the instant of admission and 'prior to' referred to times substantially prior to admission; yet this would nonetheless exclude the effect of Congressional action. So far as the statute itself is concerned, the Government's argument is thus inconclusive.
24
Nor do the States' arguments upon the face of the statute illumine the meaning of 'at the time' as used in § 2. They contend that the meaning of § 2 is explained or clarified by the last sentence of § 4. According to them, a boundary 'existed at the time (a) State became a member of the Union' (§ 2) if 'it was so provided by its constitution or laws prior to or at the time such State became a member of the Union * * *.' § 4. Under this view, whatever the meaning of 'at the time,' the existence of a state constitutional or statutory three-league provision prior to admission would conclusively establish the boundary contemplated by the Act, irrespective of the character of Congressional action upon admission. However, this provision appears not in the definitional or granting sections of the statute (§§ 2 or 3), but in § 4, the purpose of which is to approve and confirm the boundaries of all States at three miles, and to negative any prejudice which might thereby result to claims in excess of three miles. It thus does not define the grant, but at most describes the claims protected from prejudice by § 4 in terms of their most likely nature. A fair reading of the section does not point to the conclusion that claims of this nature were deemed to be self-proving.
25
Finally, there is no indication on the face of the statute whether the Executive policy of the United States on the extent of territorial waters is a relevant circumstance in ascertaining the location of state seaward boundaries for purposes of the Act.
26
Because the statute on its face is inconclusive as to these issues, we turn to the legislative history.
27
B. The Legislative History.
28
This Court early held that the 13 original States, by virtue of the sovereignty acquired through revolution against the Crown, owned the lands beneath navigable inland waters within their territorial boundaries, and that each subsequently admitted State acquired similar rights as an inseparable attribute of the equal sovereignty guaranteed to it upon admission. Pollard's Lessee v. Hagan, 3 How. 212, 11 L.Ed. 565.12 It was assumed by many, and not without reason,13 that the same rule would be applied to lands beneath navigable waters of the marginal sea, that is, beyond low-water mark and the outer limit of inland waters. However, beginning in the 1930's, the Federal Government, while conceding the validity of the Pollard rule as to inland waters, disputed its applicability to submerged lands beyond that limit, and claimed ownership of those lands for the United States.14 The controversy centered primarily on the ownership of the oil-rich submerged lands off the coast of California. The State maintained that its original constitution, adopted in 1849 before it was admitted to the Union, established a seaward boundary three English miles from the coast,15 that this boundary was ratified by the Act of Congress admitting it to the Union, and that therefore under the Pollard rule, it was entitled to all submerged lands lying within three English miles of its coast. This Court refused so to apply Pollard, and held in the California case and the subsequent Louisiana and Texas cases, supra, that paramount rights in the marginal sea are an attribute of national rather than state sovereignty, irrespective of the location of state seaward boundaries.
29
Meanwhile an extended series of attempts was underway to secure Congressional legislation vesting in the States the ownership of those lands which would be theirs under an application of the Pollard rule to the marginal sea.16 It was strongly urged, both before and after the California decision that because the States had for many years relied on the applicability of the Pollard rule to the marginal sea, it was just and equitable that they be definitively given the rights which follow from such an application of the rule, and the California, Louisiana, and Texas cases were severely criticized for not having so applied it.17
30
Thus virtually every 'quitclaim' measure introduced between 1945 and 1953, when the Submerged Lands Act was ultimately enacted, framed the grant in terms of 'lands beneath navigable waters within State boundaries.' This framework was employed because the sponsors understood this Court to have established, prior to the California decision, a rule of state ownership itself defined in terms of state territorial boundaries, whether located at or below low-water mark.18 Since, however, none of the cases which had applied that rule involved lands below low-water mark, and since the California and subsequent Louisiana and Texas cases adopted for such lands a rule which does not depend upon state boundaries, this Court has never had occasion to consider the precise nature and method of determining state territorial boundaries in the open sea, such as would circumscribe the extent of state ownership of offshore lands under an application of the Pollard rule. Because Congress, in the exercise of its constitutional power to dispose of federal property, has chosen so to frame its grant, we are now called on to resolve such questions in light of the Act's history and purposes.
31
From the very outset, the sponsors of 'quitclaim' legislation believed that all States were entitled to at least three miles of coastal submerged lands.19 The earliest bills confirmed to the States all lands beneath navigable waters within their boundaries, and defined 'lands beneath navigable waters' to include at least all lands lying within three geographical miles of the coast of each State.20 However, they contained no definition of'boundaries,' and it was apparently assumed that the boundaries of all States extended at least three miles.21 Opponents of such legislation quickly pointed out that while California based its three-mile claim on an expressly defined maritime boundary, many, if not most, of the coastal States lacked such a boundary,22 and that therefore, such States could not avail themselves of the Pollard rule, the applicability of which is restricted to areas within the actual territorial boundaries of the State, even assuming the rule to be capable of application beyond low-water mark.23 Proponents of the legislation alleged it to be defective in that it granted only those lands beneath navigable waters which lay within state boundaries, and that this Court in the California case, while not expressly passing on the question, had cast doubt on whether any of the original States ever had a boundary beyond its coast.24 As a result, a new section was added, substantially similar to the second and third sentences of § 4 of the present Act (see note 8, 363 U.S. 10, 80 S.Ct. 968), which permitted each State which had not already done so to extend its boundary seaward three miles and approved all such extensions theretofore or thereafter made, without prejudice to any State's claim that its boundary extended beyond three miles.25
32
It is not entirely clear on what theory Congress thus concluded that each State owned the submerged lands within three miles of its coast, irrespective of the existence of an expressly defined seaward boundary to that distance. It was substantially agreed that the 13 original Colonies owned the lands within three miles of their coasts because of their sovereignty and the alleged international custom which permitted a nation to extend its territorial jurisdiction that far.26 Some proponents of the legislation seem to have concluded that therefore, not only did the original States retain such rights after formation of the Union, but that subsequently admitted States acquired similar rights within three miles, irrespective of the location of their boundaries, by the operation of the equal-footing clause.27 It was also suggested that state ownership within three miles came about by operation of federal law because of the Federal Government's assumed adherence to the three-mile limit of territorial waters.28 While some speakers maintained that these factors in effect gave each State a three-mile maritime boundary,29 others eschewed technical reliance on the matter of boundaries and thought it sufficient that the Pollard rule had always been thought to confer ownership on the State of lands within three miles of the coast and that the States ought to be restored to the position they believed they had formerly occupied.30 And there is some suggestion that since many States, under the Congressional view of Pollard, had indisputable claims to three miles of submerged lands, the remainder ought to be treated on a parity whether or not their claims were technically justified.31 The upshot of all of these differing views was the confirmation of each coastal State's seaward boundary at three geographical miles.
33
Whatever may have been the uncertainty attending the relevance of state boundaries with respect to rights in submerged lands within three miles of the coast, we find a clear understanding by Congress that the question of rights beyond three miles turned on the existence of an expressly defined state boundary beyond three miles. Congress was aware that several States claimed such a boundary. Texas throughout repeatedly asserted its claim that when an independent republic its statutes established a three-league maritime boundary, and that the United States ratified that boundary when Texas was admitted to the Union and permitted Texas to retain its own public lands.32 Florida repeatedly asserted its claim that subsequent to its secession at the time of the Civil War, it framed a constitution which established a three-league boundary along its Gulf coast, and that such boundary was ratified when Congress in 1868, 15 Stat. 73, approved the State's constitution and readmitted it to the Union.33 Louisiana asserted that the Act of Congress admitting it to the Union in 1812, 2 Stat. 701, fixed for it a three-league maritime boundary by virtue of the provision which includes within the State 'all islands within three leagues of the coast.'34 And it was suggested that Mississippi and Alabama might claim boundaries six leagues in the Gulf because of similar provisions in the Acts admitting them to the Union.35
34
It was recognized that if the legal existence of such boundaries could be established, they would clearly entitle the respective States to submerged land rights to that distance under an application of the Pollard rule to the marginal sea. Hence, while a three-mile boundary was expressly confirmed for all coastal States, the right of the Gulf States to prove boundaries in excess of three miles was preserved. This treatment of the matter was carried into all the numerous 'quitclaim' bills by language similar to that found in § 4 of the present Act, confirming all coastal state boundaries at three miles and negating any prejudice to boundary claims in excess of that.36 Repeated expressions of the Act's sponsors make it absolutely clear that no boundary in excess of three miles was fixed for any State, but that a State would have to establish the existence of such a boundary in judicial proceedings.37 The many individual expressions of views as to the location of particular state boundaries—notably statements that the effect of the Act would be to give Texas and Florida three leagues of submerged land rights38—while undoubtedly representing the sincere beliefs of the speakers, cannot serve to relieve this Court from making an independent judicial inquiry and adjudication on the subject, as contemplated by Congress.
35
The earlier 'quitclaim' bills defined the grant in terms of presently existing boundaries,39 since such boundaries would have circumscribed the lands owned by the States under an application of Pollard to the marginal sea. However, the sponsors of these measures soon recognized that present boundaries could be ascertained only by reference to historic events. The claims advanced by the Gulf States during consideration of earlier bills were identical to those subsequently asserted.40 The theory of those claims, as we have noted, depended either, as in the cases of Texas and Florida, upon a constitutional or statutory provision allegedly ratified by Congressional acquiescence, or, as in the cases of Louisiana, Mississippi, and Alabama, upon express Congressional action. Indeed, it could hardly have been contended that Congressional action surrounding the event of admission was not relevant to the determination of present boundaries. Some suggestions were made, however, that States might by their own action have effectively extended, or be able to extend, their boundaries subsequent to admission.41 To exclude the possibility that States might be able to establish present boundaries based on extravagant unilateral extensions, such as those recently made by Texas and Louisiana,42 subsequent drafts of the bill introduced the twofold test of the present Act—boundaries which existed at the time of admission and boundaries heretofore approved by Congress.43 It is apparent that the purpose of the change was not to alter the basic theory of the grant, but to assure that the determination of boundaries would be made in accordance with that theory—that the States should be 'restored' to the ownership of submerged lands within their present boundaries, determined, however, by the historic action taken with respect to them jointly by Congress and the State.44 It was such action that the framers of this legislation conceived to fix the States' boundaries against subsequent change without their consent and therefore to confer upon them the long-standing equities which the measure was intended to recognize.45
36
Somewhat later, the last sentence of the present Act's § 4 was added, for the specific purpose of assuring that the boundary claims of Texas and Florida would be preserved.46 The first part of the sentence (see note 8, 363 U.S. 10, 80 S.Ct. 968), intended to refer to Texas alone, protects the State's claim to a three-league boundary as 'provided by its constitution or laws prior to or at the time such State became a member of the Union.' That claim, however, was asserted to rest not only on its statute but also on the action of Congress in admitting it to the Union.47 If any doubt could remain that the event of admission is a vital circumstance in ascertaining the location of boundaries which existed 'at the time' of admission within the meaning of the Submerged Lands Act, it is conclusively dispelled by repeated statements of its proponents to that effect.48
37
We conclude, therefore, that the States' contention that preadmission boundaries, standing alone, suffice to meet the requirements of the statute is not tenable.
38
3. The Question of Executive Policy Respecting the 'Three-Mile Limit.'
39
During consideration of the various 'quitclaim' bills between 1945 and 1953, the suggestion that international questions might be raised by the bill constantly recurred. It was asserted that the United States might be embarrassed in its dealings with other nations, first, by permitting States to exercise rights in submerged lands beyond three miles,49 and, second, by recognizing that the boundaries of some States might extend beyond three miles from the coast.50 The first objection was laid to rest by the testimony of Jack B. Tate, Deputy Legal Adviser to the State Department. Mr. Tate stated that exploitation of submerged lands involved a jurisdiction of a very special and limited character, and he assured the Committee that assertion of such a jurisdiction beyond three miles would not conflict with international law or the traditional United States position on the extent of territorial waters. He concluded that since the United States had already asserted exclusive rights in the Continental Shelf as against the world, the question to what extent those rights were to be exercised by the Federal Government and to what extent by the States was one of wholly domestic concern within the power of Congress to resolve.51
40
The second objection, however—that to recognize by the Act the possible existence of some state maritime boundaries beyond three miles would embarrass this country in its dealings with other nations—was persistently pressed by the State Department and by opponents of the bill. The bill's supporters consistently took the position that under the Pollard rule as they understood it, the extent of a State's submerged land rights in excess of three miles depended entirely upon the location of its maritime boundary as fixed by historical events,52 and that to the extent a State's boundary had been so fixed beyond three miles, it constituted an exception to this country's assumed adherence to the three-mile limit. The admission of Texas and the readmission of Florida were repeatedly asserted as instances where Congress had made exceptions to the three-mile policy, purportedly based on the shallowness of waters in the Gulf and the alleged Spanish custom of claiming three leagues of territorial waters.53
41
The State Department, confronted with this argument, tenaciously maintained that it had never recognized any boundaries in excess of three miles.54 It insisted that by virtue of federal supremacy in the field of foreign relations, the territorial claims of the States could not exceed those of the Nation, and that, therefore, if the bill recognized the effectiveness of the relied-on historical events to fix boundaries beyond three miles despite the State Department's refusal so to recognize them, the bill would violate this country's consistent foreign policy. The Government now urges in this case a closely similar contention. It says that the Submerged Lands Act did not establish any formula for the ascertainment of state boundaries but left them to be judicially determined, and that because of federal supremacy in the field of foreign relations, this Court must hold that the Executive policy of claiming no more than three miles of territorial waters—allegedly in force at all relevant times, and evidenced by the State Department's consistent refusal to recognize boundaries in excess of three miles—worked a decisive limitation upon the extent of all state maritime boundaries for purposes of this Act.55
42
We agree that the Submerged Lands Act does not contain any formula to be followed in the judicial ascertainment of state boundaries, and that therefore, we must determine, as an independent matter, whether boundaries, for purposes of the Act, are to be taken as fixed by historical events such as those pointed to in the Congressional hearings and debates, or whether they must be regarded as limited by Executive policy on the extent of territorial waters, as contended by the Government. However, in light of the purely domestic purposes of the Act, we see no irreconcilable conflict between the Executive policy relied on by the Government and the historical events claimed to have fixed seaward boundaries for some States in excess of three miles. We think that the Government's contentions on this score rest on an oversimplification of the problem.
43
A land boundary between two States is an easily understood concept. It marks the place where the full sovereignty of one State ends and that of the other begins. The concept of a boundary in the sea, however, is a more elusive one. The high seas, as distinguished from inland waters, are generally conceded by modern nations to be subject to the exclusive sovereignty of no single nation.56 It is recognized, however, that a nation may extend its national authority into the adjacent sea to a limited distance for various purposes. For hundreds of years, nations have asserted the right to fish, to control smuggling, and to enforce sanitary measures within varying distances from their seacoasts.57 Early in this country's history, the modern notion had begun to develop that a country is entitled to full territorial jurisdiction over a belt of waters adjoining its coast.58 However, even this jurisdiction is limited by the right of foreign vessels to innocent passage.59 The extent to which a nation can extend its power into the sea for any purpose is subject to the consent of other nations, and assertions of jurisdiction to different distances may be recognized for different purposes.60 In a manner of speaking, a nation which purports to exercise any rights to a given distance in the sea may be said to have a maritime boundary at that distance. But such a boundary, even if it delimits territorial waters, confers rights more limited than a land boundary. It is only in a very special sense, therefore, that the foreign policy of this country respecting the limit of territorial waters results in the establishment of a 'national boundary.' The power to admit new States resides in Congress. The President, on the other hand, is the constitutional representative of the United States in its dealings with foreign nations. From the former springs the power to establish state boundaries; from the latter comes the power to determine how far this country will claim territorial rights in the marginal sea as against other nations. Any such determination is, of course, binding on the States. The exercise of Congress' power to admit new States, while it may have international consequences, also entails consequences as between Nation and State. We need not decide whether action by Congress fixing a State's territorial boundary more than three miles beyond its coast constitutes an overriding determination that the State, and therefore this country, are to claim that much territory against foreign nations. It is sufficient for present purposes to note that there is no question of Congress' power to fix state land and water boundaries as a domestic matter. Such a boundary, fully effective as between Nation and State, undoubtedly circumscribes the extent of navigable inland waters and underlying lands owned by the State under the Pollard rule. Were that rule applicable also to the marginal sea—the premise on which Congress proceeded in enacting the Submerged Lands Act—it is clear that such a boundary would be similarly effective to circumscribe the extent of submerged lands beyond low-water mark, and within the limits of the Continental Shelf, owned by the State. For, as the Government readily concedes, the right to exercise jurisdiction and control over the seabed and subsoil of the Continental Shelf is not internationally restricted by the limit of territorial waters.
44
We conclude that, consonant with the purpose of Congress to grant to the States subject to the three-league limitation, the lands they would have owned had the Pollard rule been held applicable to the marginal sea, a state territorial boundary beyond three miles is established for purposes of the Submerged Lands Act by Congressional action so fixing it, irrespective of the limit of territorial waters. We turn now to the task of ascertaining what boundary was was so fixed for each of the defendant States.
II.
45
The Particular Claims of Texas.
46
Texas, the only one of the defendant States which had the status of an independent nation immediately prior to its admission, contends that it had a three-league maritime boundary which 'existed at the time (it) became a member of the Union' in 1845. Whether that is so for the purposes of the Submerged Lands Act depends upon a proper construction of the Congressional action admitting the State to the Union.
47
Texas declared its independence from Mexico on March 2, 1836, 1 Laws, Republic of Texas, 3—7, Vernon's Ann.St.Const. and on December 19, 1836, the Texan Congress passed an Act to define its boundaries, which were described in part as
48
'beginning at the mouth of the Sabine river, and running west along the Gulf of Mexico three leagues from land, to the mouth of the Rio Grande, thence up the principal stream of said river. * * *' Id., 133. (Emphasis added.) See diagram at 363 U.S. 65, 80 S.Ct. 998.61
49
In March 1837 this country recognized the Republic of Texas.62 On April 25, 1838, the United States entered into a convention with the Republic to establish a boundary between the two countries and to provide for a survey of part of it.63 On April 12, 1844, President Tyler concluded a Treaty of Annexation with the Republic, but on June 8, 1844, the Senate refused to retify it.64 On March 1, 1845, President Tyler signed a Joint Resolution of Congress for the annexation of Texas, which provided:
50
'That Congress doth consent that the territory properly included within, and rightfully belonging to the Republic of Texas, may be erected into a new State, to be called the State of Texas * * *. Said State to be formed, subject to the adjustment by this government of all questions of boundary that may arise with other governments * * *.'65 (Emphasis added.)
51
Pursuant to this Resolution, the people of Texas adopted a constitution, Const. 1845, Vernon's Ann.St., which was submitted to Congress, and by Joint Resolution of December 29, 1845, Texas was admitted to the Union in accordance with the terms of the previous Joint Resolution.66 The 1836 Texas Boundary Act remained in force up to the time of admission, and the State Constitution expressly continued in force from that time forward all laws of the Republic not repugnant to the Federal or State Constitution or the Joint Resolution of Annexation.67
52
The Government, while conceding that Texas continuously asserted by statute a three-league seaward boundary, contends that at no time before, during, or after admission did the United States or any other country recognize the validity of that boundary. It follows, therefore, the Government says, that since Texas upon entering the Union became subject to the foreign policy of the United States with respect to the 'three-mile limit,' the State's seaward boundary became immediately and automatically fixed at three miles. Texas, on the other hand, argues that it effectively established, and that the United States repeatedly recognized, the State's three-league boundary before, during, and after admission, and that therefore such a boundary existed 'at the time' of its admission within the meaning of the Submerged Lands Act. For reasons already discussed, 363 U.S. at pages 24—36, 80 S.Ct. at pages 976—982, we consider that the only relevant inquiry is what boundary was fixed for the State of Texas by virtue of the Congressional action admitting it to the Union in accordance with the terms of the Joint Resolution of March 1, 1845. This inquiry first takes us back to some earlier history.
53
By the Treaty of Paris, signed April 30, 1803,68 France ceded to the United States the Louisiana Territory. The extent of the territory thus conveyed was left uncertain, the description in the Treaty referring only to a previous treaty by which France had acquired the territory from Spain, which in turn described the area only as 'the colony or province of Louisiana.'69 It was asserted by some that the territory acquired did not stop at the Sabine River the present boundary between the States of Louisiana and Texas—but extended westward to the Rio Grande so as to include Texas.70 However, by the Treaty of February 22, 1819, between the United States and Spain, the boundary line between the two countries was established at the Sabine.71 Those who had believed that the Louisiana Territory extended west of the Sabine decried this Treaty as a breach of faith by the United States in violation of the covenant in the 1803 Treaty which required the inhabitants of all the Louisiana Territory to be incorporated as soon as possible into the Union.72 Subsequently, the United States attempted unsuccessfully on several occasions to acquire the territory west of the Sabine by purchase.73
54
Meanwhile, Mexico had revolted from Spain, had been recognized by this country in 1822, and had proclaimed a federal constitution in 1824. Texas was made part of the compound province of Coahuila-Texas, with the indication that it would eventually be given a separate constitution as a sovereign state. After a series of difficulties with the central government, however, Texas in 1836 proclaimed its own independence from Mexico. It immediately sent diplomatic representatives to the United States to negotiate for annexation, but nothing was consummated at that time.74 Shortly thereafter, it promulgated the 1836 boundary statute referred to above.
55
It was against this background that President Tyler negotiated and sent to the Senate the 1844 Treaty for the annexation of Texas. That document provided:
56
'The Republic of Texas * * * cedes to the United States all its territories, to be held by them in full property and sovereignty * * *.'75
57
One of the objections made to the Treaty on the floor of the Senate was that it purported to cede to the United States all the territory claimed by Texas under her 1836 Boundary Act, to large parts of which Texas allegedly had no title, those parts assertedly having always been under the domination and control of Spain and Mexico.76 This objection was countered by several proponents of the Treaty who insisted that since it contained no delineation of boundaries and since the Republic of Texas was referred to by a general designation, the clause 'all its territories' ceded only that which properly and rightfully belonged to Texas, its Boundary Act notwithstanding.77
58
The proponents pointed also to a letter of instructions written by Secretary of State Calhoun to the United States Charge d'Affaires in Mexico a week after the Treaty was signed, which enjoined the latter, in making the Treaty known to Mexico, 'to assure the Mexican Government that it is his (the President's) desire to settle all questions between the two countries which may grow out of this treaty, or any other cause, on the most liberal and satisfactory terms, including that of boundary * * *. (The United States) has taken every precaution to make the terms of the treaty as little objectionable to Mexico as possible; and, among others, has left the boundary of Texas without specification, so that what the line of boundary should be might be an open question, to be fairly and fully discussed and settled according to the rights of each, and the mutual interest and security of the two countries.'78
59
Despite these controversial aspects of the Treaty, it is quite apparent that its supporters desired to press Texas' boundary claims to the utmost degree possible. President Tyler, in response to the Senate's request, transmitted to it a map showing the western and southwestern boundaries of Texas, and according generally with the Texas Boundary Act.79 Senator Walker of Mississippi, while insisting that the Treaty ceded 'only * * * the country embraced within its (Texas') lawful boundaries,' asserted that in fact her lawful boundary extended to the Rio Grande, that it had extended that far when she was ceded away by the United States in 1819, that the United States had acquiesced in those boundaries when it recognized Texas in 1837, and that Mexico had never protested the Convention of 1838 which allegedly validated that boundary.80 Senator Breese of Illinois, while assuring the Treaty's opponents that the boundary was left open to future determination, avowed that the United States had acknowledged the Texas boundaries as asserted in her 1836 statute, and that he was in favor of the recovery not only of the old province of Texas as it existed in 1803 and 1819, but also 'for as much more as the 'republic' of Texas can lawfully claim.'81 Senators Woodbury of New Hampshire and Buchanan of Pennsylvania, while expressing doubt about the validity of the Texas Boundary Act to the extent that it claimed portions of New Mexico, thought it was valid so far as it pressed beyond the Nueces to the Rio Grande and ought to be maintained.82
60
After the failure of the Treaty, which would have annexed Texas as a territory of the United States, several proposals were introduced in the next session of Congress for the annexation of Texas by a Joint Resolution admitting it immediately as a State.83 The doubts which had been raised in 1844 as to the validity of certain Texan pretensions to territory on her western and southwestern frontiers were reiterated during consideration of the various Resolutions, and reference was made to the fact that the rejected Treaty had been assailed as purporting to embrace such territory.84 In 1844, supporters of the Treaty had considered the general designation 'all its territories' as ceding only territory which rightfully, properly, or lawfully belonged to Texas, and as leaving to the Executive the duty of settling the extent of that territory by amicable negotiation.85 The two clauses of the 1845 Annexation Resolution (363 U.S. 37, 80 S.Ct. 983), appear, against this background, to be an express formulation of precisely the same thing. The first makes it clear that the grant is of initially undefined scope, governed by the truism that only 'the territory properly included within, and rightfully belonging to the Republic of Texas' is ceded. The second expressly contemplates future negotiation to settle the exact extent of such territory, by making it 'subject to the adjustment by this government of all questions of boundary that may arise with other governments.' In short, it is clear that the 'properly' and 'rightfully' clause was intended neither as a legislative determination that the entire area claimed by Texas was legitimately hers, nor to serve, independently of the 'adjustment' clause, as a self-operating standard for measuring Texas' boundaries. Rather, the precise fixation of the new State's boundaries was left to future negotiations with Mexico.
61
The circumstances surrounding the Resolution's passage make it clear that this was the understanding of Congress. Congressional attention was focused primarily on the great political questions attending annexation—primarily the extent to which slavery would be permitted in the new territory and the possibility that annexation would embroil this country with Mexico and the matter of boundary received little consideration except as it was related to the larger issues. Public agitation over annexation had become so great that some bills had proposed annexation virtually in the abstract, with all details to be worked out later.86 Although the Resolution as ultimately passed did settle the details of certain matters—notably slavery, the Texan debt, and the mode of annexation—the manifest purport of it and all the many other annexation bills introduced was to postpone the fixing of boundaries for the sake of achieving immediate annexation, and no apparent importance was attached to the particular verbal formula used to achieve such postponement.87 The general tenor of opposition to annexation changed from a fear that the cession covered too much to criticisms of the indefinite treatment of boundary and concern over whether Texas really owned as much as some supporters asserted.88 It is true that isolated statements were made which seem to indicate that the speaker thought the Resolutions would admit Texas with the boundary defined in her 1836 boundary statute, subject to possible subsequent readjustment.89 However, read in context, these statements may have meant no more than that the United States, in its negotiations with Mexico, would attempt to sustain the full extent of Texas' declared boundaries, rather than that those boundaries were in fact proper. Be that as it may, in view of the overwhelming evidence of Congressional understanding and of the express language of the Annexation Resolution as ultimately passed, the conclusion is inescapable that Texas at least as to its land area, was admitted with undefined boundaries subject to later settlement.
62
While this conclusion appears unavoidable as regards Texas' land boundaries, a question does exist as to whether it applies also to the State's seaward boundary. For we are unable to find in the Congressional debates either on the 1844 Treaty or the 1845 Annexation Resolution a single instance of significant advertence to the problem of seaward boundaries. Furthermore, a series of other events manifests a total lack of concern with the problem. Prior to Texan independence, the United States had entered into successive treaties with Spain and Mexico,90 which provided that
63
'The boundary line between the two countries, west of the Mississippi, shall begin on the Gulph of Mexico, at the mouth of the river Sabin, in the sea, continuing north, along the western bank of that river * * *.' (Emphasis added.) Just after Texas had proclaimed its independence from Mexico, the two countries, on May 14, 1836, concluded 'Articles of Agreement and Solemn Compact,' acknowledging Texan independence and setting its boundary as follows:
64
'The line shall commence at the estuary or mouth of the Rio Grande, on the western bank thereof, and shall pursue the same bank up the said river * * *.'91 (Emphasis added.)
65
Thereafter a minister was sent to the United States to seek recognition and broach the subject of annexation. With respect to the latter, he was instructed on November 18, 1836:
66
'As regards the boundaries of Texas * * * (w)e claim and consider that we have possession to the Rio Bravo del Norte. Taking this as the basis, the boundary of Texas would be as follows. Beginning at the mouth of said River on the Gulf of Mexico, thence up the middle thereof * * *.'92 (Emphasis added.)
67
Yet a month later, on December 19, 1836, the Texan Congress passed the Boundary Act which inexplicably, so far as we can find, provided that the boundary should run along the Gulf of Mexico at three leagues from land.93 Quite in contrast, in the subsequent Convention of 1838 to establish the boundary between the United States and Texas, Texas reaffirmed the 1819 and 1828 Treaties with Spain and Mexico regarding that boundary and agreed to the running and marking of
68
'that portion of the said boundary which extends from the mouth of the Sabine, where that river enters the Gulph of Mexico, to the Red river.'94 (Emphasis added.)
69
Again, as previously mentioned (note 79, 363 U.S. 41, 80 S.Ct. 985), during its consideration of the unratified Treaty of April 12, 1844, the Senate requested President Tyler to transmit any information he possessed concerning the southern, southwestern, and western boundaries of Texas. On April 26, 1844, he sent a map and a memoir by its compiler. The memoir flagrantly misquoted the 1836 Boundary Act by describing the Texas boundary as "Beginning at the mouth of the Rio Grande, thence up the principal stream of said river * * *."95
70
The foregoing circumstances make it abundantly plain that at the time Texas was admitted to the Union, its seaward boundary, though expressly claimed at three leagues in the 1836 Texas Boundary Act, had not been the subject of any specific concern in the train of events leading to annexation.
71
Given this state of affairs, we must initially dispose of an argument made by Texas. The State urges, in effect, that whether or not its maritime boundary was actually considered by the Congress or the Executive during the course of the annexation proceedings, it was incumbent upon the United States to protest or reject in some manner Texas' claim in this regard, and that failure to do so constituted in law a validation or ratification of that boundary claim upon admission. Whatever the merit of this proposition may be in the abstract, the controlling factor for purposes of this case must be the terms of the Joint Resolution of Annexation. There is, indeed, a strong argument that the 'properly,' 'rightfully,' and 'adjustment' clauses of that Resolution should be read as applying only to the land boundaries disputed with Mexico, which give rise to those qualifications, and that the Resolution was meant to validate any boundary asserted by Texas without protest. However, in light of the fact that the language employed in the Resolution is of general applicability, we should hesitate to limit its effect by reading into it such an additional unexpressed test respecting the extent of Texas' boundaries. We think that its language must be taken as applying to Texas' maritime boundary as well as to its land boundary.
72
On this basis an argument of the Government must now be met. It is contended that since Texas was admitted to the Union with its maritime boundary not yet settled, United States foreign policy on the extent of territorial waters, to which Texas was admittedly subject from the moment of admission, automatically upon admission operated to fix its seaward boundary at three miles. This contention must be rejected. As we have noted, the boundaries contemplated by the Submerged Lands Act are those fixed by virtue of Congressional power to admit new States and to define the extent of their territory, not by virtue of the Executive power to determine this country's obligations via-a -vis foreign nations. 363 U.S. at pages 30—36, 80 S.Ct. at pages 979—982. It may indeed be that the Executive, in the exercise of its power, can limit the enjoyment of certain incidents of a Congressionally conferred boundary, but it does not fix that boundary. If, as in the case of Texas, Congress employs an uncertain standard in fixing a State's boundaries, we must nevertheless endeavor to apply that standard to the historical events surrounding admission.
73
We are brought back, then, to a twofold inquiry: First, whether the three-league maritime boundary asserted by the Republic of Texas embraced an area which was 'properly included within, and rightfully belonging to' the Republic. Second, whether such a boundary was ever fixed for the State of Texas pursuant to the power reserved by Congress to adjust 'all questions of boundary that may arise with other governments.' As we have observed, it is evident that the first clause, independently of the second, was not intended to operate as a self-executing standard for determining the disputed western and southwestern boundaries of Texas. To attempt to apply that clause as fixing the extent of Texas' maritime boundary, immediately upon admission to the Union, no less than in so fixing its land boundaries, would be illusory at best. The parties devote considerable discussion to the validity or invalidity of the asserted three-league maritime boundary under international law. It is true that the propriety of a nation's seaward boundary must be viewed in the context of its obligations vis-a -vis the family of nations. But surely the Joint Resolution of Annexation could not have been meant to import such an elusive inquiry into the determination of Texas' maritime boundary, especially when that question was never even considered and when the Resolution was expressly drawn to leave undefined the land boundaries which did receive consideration. And we are unable to say that Congress might have deemed the three-league maritime boundary 'proper' or 'rightful' in some other sense. It is necessary, therefore, to look to other events to ascertain where the Texan maritime boundary was fixed pursuant to the Joint Resolution of Annexation.
74
Congress' failure to carry into the Annexation Resolution the boundaries fixed by the 1836 Texas Boundary Act did not, of course, foreclose the possibility that the State's boundary might ultimately be fixed in accordance with that statute. It is significant in this regard to note the opinions ventured in Congress on the probable settlement of the boundary with Mexico which would occur subsequent to annexation. One group asserted that the Texan claims to the Rio Grande, particularly the portion which encompassed New Mexico, could not possibly be maintained.96 But such remarks were made primarily by opponents of annexation and were intended as warnings against assuming that enough land would be included in the cession to pay the Texan debt or to form free States. Much more significant than opinions as to where the boundary might ultimately be fixed are observations made regarding the basis on which the boundary question might be pressed against Mexico. Supporters and opponents alike acknowledged that the United States would probably negotiate on the basis of the Texan boundaries as declared in her own boundary statute, even though some parts of that boundary might not be maintainable. Some thought this was so because those boundaries were in fact her proper and rightful boundaries.97 Others thought it was so because the United States, having acquiesced in the Boundary Act after receiving notice of it, was bound, upon admitting Texas to the Union, to maintain those claims on her behalf.98 Whatever the reasons given, it is clear that Congress, although it purposely refused to settle the question, anticipated that the Texas Boundary Act should and would be insisted on to the greatest degree possible in negotiations with Mexico.
75
This prediction was borne out by subsequent events. After the Annexation Resolution had been passed the transmitted to Texas for its assent, the Mexican army threatened to cross the Rio Grande and invade Texas. On June 15, 1845, President Polk wrote an informal and confidential letter to the United States Charge d'Affairs in Texas which indicated that Polk intended to repel such an invasion and to maintain the Texan claim at least to the lower portion of the Rio Grande:
76
'In the contingency * * * that a Mexican army should cross the Rio Grande * * * then in my judgment, —the public necessity for our interposition—will be such, that we should not stand—quietly by—and permit—an invading foreign enemy—either to occupy or devastate any portion of the Texian territory. Of course I would maintain the Texan title to the extent which she claims it to be, and not permit an invading enemy—to occupy a foot of the soil East of the Rio Grande.' Andrew Donelson Papers (Library of Congress), Vol. 10, folios 2068—2070.
77
Nine days before, Polk had manifested a similar intention in a letter to Sam Houston, former President of the Republic of Texas and an influential spokesman for annexation:
78
'You may have no apprehensions in regard to your boundary. Texas once a part of the Union and we will maintain all your rights of territory and will not suffer them to be sacrificed.' Polk Papers (Library of Congress) (1845), Vol. 84.
79
The attitude of the Executive at this time toward the Texan boundary is made even more explicit by an account of an interview between the United States Charge d'Affaires in Texas and Sam Houston, written by the former to his superior, the Secretary of State:
80
'I stated at large the general policy of the United States as justifying no doubt of the tenacity with which they would maintain not only the present claim of Texas, but reenforce it with the preexisting one derived from France in 1803 * * *
81
'I brought also to his view the fact that this latter feature of the proposals did not interfere with the right of Texas to define her limits as she claimed them, in her statutes—that the specification of the Rio Grande as the western boundary would be proper enough as shewing the extent to which the United States would maintain her claim as far as it could be done without manifest injustice to Mexico, and to the portion of the inhabitants of Mexico that had never yet acknowledged the jurisdiction of Texas—that practically the United States would take the place of Texas, and would be obligated to do all, in this respect, that Texas could do, were she to remain a separate nation.'99
82
After Texas consented to annexation and Congress had finally admitted her to statehood, the Mexican army crossed the Rio Grande and declared war upon the United States. On May 11, 1846, President Polk called on Congress to declare war against Mexico. He said in part:
83
'Texas, by the final action of our Congress, had become an integral part of our Union. The Congress of Texas, by its act of December 19, 1836, had declared the Rio del Norte to be the boundary of that republic. Its jurisdiction had been extended and exercised beyond the Nueces. The country between that river and the Del Norte had been represented in the congress and in the convention of Texas; had thus taken part in the act of annexation itself; and is now included within one of our congressional districts. Our own Congress had, moreover, with great unanimity, by the act approved December 31, 1845, recognized the country beyond the Nueces as a part of our territory, by including it within our own revenue system; and a revenue officer, to reside within that district, has been appointed, by and with the advice and consent of the Senate. It became, therefore, of urgent necessity to provide for the defence of that portion of our country.' H.R.Exec.Doc. No. 60, 30th Cong., 1st Sess. 4, 7.
84
In a later message to Congress on December 8, 1846, Polk manifested the same disposition, H.R.Exec.Doc. No. 4, 29th Cong., 2d Sess. 13—14. And on December 7, 1847, he explained that the United States had rejected a treaty proposal by Mexico because
85
'It required the United States to dismember Texas, by surrendering to Mexico that part of the territory of that State lying between the Nueces and the Rio Grande, included within her limits by her laws when she was an independent republic, and when she was annexed to the United States and admitted by Congress as one of the States of our Union.' H.R.Exec.Doc. No. 8, 30th Cong., 1st Sess. 9.
86
However, there is absolutely nothing to indicate that the Executive, any more than the Congress, was interested in, or was at all aware of any problem presented by, the seaward boundary of Texas claimed in its 1836 Boundary Act. The Government urges, by way of explanation, that the United States had, by this time, firmly established a policy of claiming no more than three miles of territorial waters. But the Executive's responsibility for fixing the Texan boundary derived from a delegation of Congressional power to admit new States, not from the Executive's own power to fix the extent of territorial waters. As we have already pointed out, the two powers can operate independently, and only the first is determinative in this case. To the extent it may be argued that the Executive would naturally take account of its own policy toward territorial waters in fixing the Congressionally mandated boundary, the data presented to us are utterly devoid of any suggestion that such was the case. On the contrary, it is evident that the overwhelming concern of the President and his subordinates was to maintain to the greatest extent possible the land boundaries claimed by Texas and disputed with Mexico, as anticipated by Congress. The settlement of that matter remained for future events, to which we now turn.
87
On April 15, 1847, Nicholas P. Trist was appointed Commissioner to Mexico to negotiate a peace treaty. Among his instructions was a project of the proposed treaty, which provided:
88
'The boundary line between the two Republics shall commence in the Gulf of Mexico three leagues from land opposite the mouth of the Rio Grande, from thence up the middle of that river * * *.' 5 Miller, Treaties and Other International Acts of the United States of America (1937), 265. (Emphasis added.)
89
This language was incorporated verbatim into Article V of the Treaty of Guadalupe Hidalgo as finally signed on February 2, 1848, 9 Stat. 922, which fixed the boundary between the United States and Mexico from the Gulf of Mexico to the Pacific coast.100 While there was considerable disagreement in the negotiations over the various land boundaries, the proposals of both parties never departed from the three-league provision. See 5 Miller, op. cit. supra, at 270, 288, 289, 315, 317, 325.
90
Tirst stated in his notes that one object of instructions given to his predecessor, substantially identical in relevant part to those given him, was to get Mexico to agree to a boundary which
91
'would throw within the territory of the United States the country lying east of the Rio Grande. Or, as said object stands in said instructions, specifically stated & expressed, it was the object of prevailing upon Mexico 'to agree that the line shall be established along the boundary defined by the act of Congress of Texas, approved December 19, 1836, to wit: beginning at 'the mouth of the Rio Grande; thence up the principal stream of said river * * *.'"101
92
While this misquotation of the Texas Boundary Act again demonstrates total insensitivity to any problem of a seaward boundary, the passage does indicate that the United States was attempting to follow the Texas statute in negotiating the boundary.102 More important for the purposes of this case are the circumstances that the three-league provision was made an express part of the Treaty of Guadalupe-Hidalgo, that such boundary was reaffirmed five years later in the Gadsden Treaty of December 30, 1853103 and subsequently in a long line of international conventions,104 and that it has never been repudiated.
93
The Treaty unquestionably established the Rio Grande from New Mexico to the Gulf as the land boundary not only of the United States but also of Texas, since the Executive, acting pursuant to the power given by Congress to 'adjust' Texas' boundaries in dealings with other nations, pressed that boundary against Mexico on the theory that it embraced territory rightfully belonging to the State of Texas. There is nothing to indicate that the extension of that boundary three leagues into the Gulf, pursuant to the very same Boundary Act, was treated on any different basis. The portion of the boundary extending into the Gulf, like the rest of the line, was intended to separate the territory of the two countries, and to recognize that the maritime territory of Texas extended three leagues seaward.
94
Whether the Treaty be deemed to constitute an exercise of the power to adjust the boundaries left unsettled by the 1845 Joint Resolution of Annexation, or a post hoc recognition of a seaward boundary which was actually fixed for Texas upon its admission in 1845, or a fixation of boundaries which related back to the time of admission, is of no moment. Although the Submerged Lands Act requires that a State's boundary in excess of three miles must have existed 'at the time' of its admission, that phrase was intended, in substance, to define a State's present boundaries by reference to the events surrounding its admission. As such, it clearly includes a boundary which was fixed pursuant to a Congressional mandate establishing the terms of the State's admission, even though the final execution of that mandate occurred a short time subsequent to admission.
95
The Government contends that the Treaty of Guadalupe Hidalgo is of no significance in this case because the line drawn three leagues out to sea was not meant to separate territory of the two countries, but only to separate their rights to exercise certain types of 'extraterritorial' jurisdiction with respect to customs and smuggling. We believe the conclusion is clear that what the line, denominated a 'boundary' in the Treaty itself, separates is territory of the respective countries. No reference to 'extraterritorial' jurisdiction is made in the Treaty, and no such concept can be gleaned from the context of the negotiations. Being based on the three-league provision of the 1836 Texas Boundary Act, which itself denotes a territorial boundary, the obvious and common-sense meaning of the analogous treaty provision is that it separates the maritime territory of the United States and Mexico.
96
The Government relies on certain diplomatic correspondence as evidencing a subsequent construction of the Treaty contrary to this conclusion. In 1848, when Great Britain protested the three-league provision of the Treaty, both the United States and Mexico replied that the Treaty defined rights only as between the two countries and was not intended to impair the rights of any other nation in the marginal sea.105 In 1875, Secretary of State Hamilton Fish made a similar explanation to Lord Derby of England, but added a new contention that the boundary provision was 'probably' suggested by the Acts of Congress permitting revenue officials to board vessels bound for the United States within four leagues of the coast.106 And in 1936, after Mexico had asserted a three-league belt of territorial water along its entire coast, the United States, in denying that the Treaty gave Mexico such a right, adopted both rationales relied on in 1875, and in addition contended that the boundary provision did recognize the territory of the two countries as extending three leagues from the coast, but only in the 'one area' adjacent to the international boundary.107 It seems evident from the shifting and uncertain grounds upon which these pronouncements relied that they should be taken as reflecting no more than after-the-fact attempts to limit the effect of a provision which patently purported to establish a three-league territorial boundary, so as to bring it into accord with this country's international obligations. Undoubtedly the Executive has the right to limit the effect to be accorded a treaty provision in its dealings with other countries. But where, as here, that Treaty touches upon relationships between the Nation and a State created pursuant to a Congressional mandate, the original purport of the Treaty must control, and the dealings of the Executive with other nations cannot affect the State's rights in any way as a domestic matter.
97
We conclude, therefore, that pursuant to the Annexation Resolution of 1845, Texas' maritime boundary was established at three leagues from its coast for domestic purposes. Of course, we intimate no view on the effectiveness of this boundary as against other nations. Accordingly, Texas is entitled to a grant of three leagues from her coast under the Submerged Lands Act.
BOUNDARIES CLAIMED BY TEXAS*
III.
THE PARTICULAR CLAIMS OF LOUISIANA
98
Louisiana's claims, like those of Texas, are based on the contention that it had a three-league maritime boundary which existed "at the time" it was admitted to the Union, and must be judged by the same standards. The Act of Congress admitting the State to the Union in 1812107a described the new State's boundaries as follows:
99
"beginning at the mouth of the river Sabine; thence, by a line to be drawn along the middle of said river, including all islands to the thirty-second degree of latitude; thence, due north, to the northernmost part of the thirty-third degree of north latitude; thence, along the said parallel of latitude, to the river Mississippi; thence, down the said river, to the river Iberville; and from thence, along the middle of the said river, and lakes Maurepas and Ponchartrain, to the gulf of Mexico; thence, bounded by the said gulf, to the place of beginning, including all islands within three leagues of the coast...." (Emphasis added.)
100
Louisiana claims that the concluding clause "including all islands within three leagues of the coast" should be read to mean that Congress fixed as the State's seaward boundary a line three leagues from its coast, and that such a reading is supported both by the State's preadmission history and by subsequent events. The Government, on the other hand, insists that the phrase includes only the islands themselves lying within three leagues of the coast, and not all water within that distance as well.108
1. The Act of Admission on Its Face.
101
The language of the Act itself appears clearly to support the Government's position. The boundary line is drawn down the middle of the river Iberville 'to the gulf of Mexico,' not into it for any distance. The State is thence to be bounded 'by the said gulf,' not by a line located three leagues out in the Gulf, 'to the place of beginning,' which is described as 'at the mouth of the river Sabine,' not somewhere beyond the mouth in the Gulf. (Emphasis added.) And while 'all islands' within three leagues of the coast were to be included, there is no suggestion that all waters within three leagues were to be embraced as well. In short, the language of the Act evidently contemplated no territorial sea whatever.
102
Similar language was employed in the Treaty of Paris of September 3, 1783, by which Great Britain recognized the independence of the United States.109 After describing the boundary of the United States from the mouth of the St. Croix River in the Bay of Fundy to the mouth of the St. Mary's River between Georgia and Florida, the parties added: 'comprehending all islands within twenty leagues of any part of the shores of the United States * * *.' In the light of Jefferson's observation, only 10 years later, that national claims to control of the sea beyond approximately 20 miles from the coast had not therefore been generally recognized among maritime powers;110 his accompanying proposal that a three-mile limit should be placed upon the extent of territorial waters;111 and subsequent American and British policy in this regard, see note 54, supra, it is hardly conceivable that this provision of the Treaty was intended to establish United States territorial jurisdiction over all waters lying within 20 leagues (60 miles) of the shore.112 No reason appears for reading the Louisiana statute differently. The conclusion that language claiming all islands within a certain distance of the coast is not meant to claim all the marginal sea to that distance is further confirmed by the Act defining the boundaries of Georgia,113 which claims three miles of marginal sea but all islands within 20 leagues of the coast. That Act provides:
103
'along the middle of (the St. Mary's) river to the Atlantic Ocean, and extending therein three English miles from low-water mark; thence running in a northeasterly direction and following the direction of the Atlantic coast to a point opposite the mouth, or inlet, of said Savannah River; and from thence to the mouth or inlet of said Savannah River, to the place of beginning; including all the lands, waters, islands, and jurisdictional rights within said limits, and also all the islands within 20 marine leagues of the seacoast.'
104
Nothing in the case of Alaska Pacific Fisheries v. United States, 248 U.S. 78, 39 S.Ct. 40, 63 L.Ed. 138, tends toward a contrary construction. The Court there held that an Act of Congress designating as an Indian reservation 'the body of lands known as Annette Islands' included the intervening and surrounding waters and submerged lands, which were inland waters admittedly under the control of the United States, whether actually part of the reservation or not. The Court, construing the statute in light of the Indians' historic use of these waters as fishing grounds, merely concluded that Congress intended to include in the area reserved the waters and water bed, as well as the islands, referring to both 'as a single body of lands.' Id., 248 U.S. 89, 39 S.Ct. 42. The construction here contended for by Louisiana would, in contrast, sweep within the State's jurisdiction waters and submerged lands which bear no proximate relation to any islands, and which would otherwise be part of the high seas.
105
Louisiana also contends, relying on United States v. State of Texas, 162 U.S. 1, 16 S.Ct. 725, 40 L.Ed. 867; State of Louisiana v. State of Mississippi, 202 U.S. 1, 26 S.Ct. 408, 50 L.Ed. 913, that this Court has already determined that its boundary includes three leagues of marginal sea. The Texas case, however, involved only the question whether Greer County, in the northwest part of the State, was properly a part of Texas. And even if that case had effectively established a three-league maritime boundary for Texas, which quite evidently it did not, that would not establish a similar boundary for Louisiana.
106
The Mississippi case involved only the issue of the boundary between Louisiana and Mississippi. Louisiana relies on the holding of the Court that because the eastern boundary of Louisiana was a water boundary along the middle of the river Iberville, extending to the Gulf, it went on to include a deep-water sailing channel in the Gulf adjacent to Mississippi. It also relies on a rough map included in the Court's opinion showing a line drawn all the way around the State's coast at some distance in the Gulf. There is, however, no indication whatever that the line so indicated bore any relation to the three-league provision in the Louisiana Act of Admission. Furthermore, if there could be any doubt that only the portion of the water boundary adjacent to Mississippi was considered by the Court, it is dispelled by the Court's statement that
107
'Questions as to the breadth of the maritime belt or the extent of the sway of the riparian states require no special consideration here. The facts render such discussion unnecessary.' Id., 202 U.S. 52, 26 S.Ct. 422.
108
See also United States v. State of California, supra, 332 U.S. at page 37, 67 S.Ct. at page 1667.
2. Preadmission History.
109
Preliminarily, it should be observed that in light of what has already been said, 363 U.S. at pages 24—30, 80 S.Ct. at pages 976—979, Louisiana's preadmission history is relevant in this case only to the extent that it aids in construing the Louisiana Act of Admission. The thrust of the State's argument on this score is that the boundaries fixed by the Act of Admission comprised the entire area acquired by the United States from France through the Louisiana Purchase, effected by the Treaty of Paris in 1803; that the extent of this area traces back, through cessions by France to Spain in 1762 and Spain to France in 1800, to what was first claimed by France in 1682; and that such area originally extended some 120 miles into the Gulf of Mexico, and in any case, by virtue of other events, at least three leagues into the Gulf.
110
For reasons now to be discussed we think that this historical thesis is not borne out by any of the documents or events on which Louisiana relies, but that to the contrary what has been shown us leads to the conclusion that Louisiana's preadmission territory, consistently with the Act of Admission, stopped at its coast and did not embrace any marginal sea.
111
1. The area which includes the present State of Louisiana was first claimed for France by La Salle in 1682, extending southward
112
'as far as (the Mississippi's) * * * mouth in the sea, or gulf of Mexico, about the twenty-seventh degree of the elevation of the North Pole * * *.'114
113
It is apparent from the face of La Salle's proclamation that it was the mouth of the Mississippi which defined the southerly limit of his claim. His expression of belief that the river mouth was at 'about' the 27th parallel does not indicate an intent to claim to that parallel, which is in fact some 120 miles south of the Mississippi's mouth. In any event, the proce s-verbal of Jacques de la Me tairie, notary of the La Salle expedition,115 shows that the proclamation was issued after the mouth of the Mississippi had been reached and the party had returned upstream only far enough to find solid ground for the erection of a monument, and that La Salle then thought, mistakenly in fact, that they were at about the 27th parallel. Other documents also indicate that the river mouth defined the extent of the claim and that the territory included no marginal sea whatever.116
114
2. By a secret Treaty executed at Fontainebleau on November 3, 1762, France ceded to Spain 'all the country known under the name of Louisiana, as well as New Orleans and the island in which the place stands.'117 By the secret Treaty of San Ildefonso, signed October 1, 1800, Spain retroceded the 'colony and province of Louisiana' to France.118 Certainly there is nothing on the face of either of these Treaties to indicate that France or Spain claimed any territorial sea.
115
3. Louisiana argues, however, that certain treaties between France, Spain, and other nations evidence such an intent. Four of these treaties concern the right of the French to fish within certain distances of the coasts of the British possessions in North America, varying from three to 30 leagues. The relevant portions do not relate to French or Spanish territory at all.119 In another, Great Britain undertook not to permit its subjects to navigate or fish within 10 leagues of coasts occupied by Spain 'in the Pacific Ocean, or in the South Seas,' so as to prevent illicit trade with Spanish settlements.120 The Treaty does not relate to the area in question, and, far from being an assertion of a territorial claim by Spain, imposed an obligation of a limited nature on Great Britain alone. The same reasoning applies to another of these treaties, the Treaty between Spain and Tripoli, signed September 10, 1794, prohibiting the capture of any vessel within 10 leagues from coasts of the dominions of Spain.121 Reliance is also placed on an ordinance promulgated by Philip II of Spain in October 1565, asserting rights within the visual horizon of the coasts of Spain and its possessions.122 It may be questioned whether this ordinance even constituted an assertion of territorial jurisdiction as it is known today, especially in view of the fact that the concept of the territorial sea did not arise in international law until after this country achieved its independence. See United States v. State of California, supra, 332 U.S. 32—33, 67 S.Ct. 1665. Even if it did, the ordinance can hardly be taken as applying to a territory not acquired by Spain until 200 years later or as affecting the construction of the Act admitting Louisiana to the Union 250 years later.123
116
4. By the Treaty of Paris, signed April 30, 1803, France ceded to the United States the Louisiana Territory with all its rights and appurtenances 'as fully and in the same manner as they have been acquired by the French Republic, in virtue of the above-mentioned treaty (Treaty of San Ildefonso, Oct. 1, 1800), concluded with his Catholic Majesty,' including 'the adjacent islands belonging to Louisiana.'124 To show that the Act admitting Louisiana to the Union must be construed as referring to the Union must Treaty, Louisiana relies on Article III of the Treaty, which required the United States to admit 'the ceded territory' to statehood as soon as possible. But since the historic documents to which our attention has been called fail to show that the ceded territory included any territorial sea, taking the Treaty as defining the scope of the Act of Admission only confirms the view that Louisiana's maritime boundary was fixed at, and not somewhere in, the Gulf of Mexico.
117
5. Louisiana also asserts that about the time of its admission, the United States was claiming three leagues of territorial waters in the Gulf, and that the Act of Admission was framed with reference to that claim. However, from the great variety of documentation presented by the parties, the most that could possibly be said is that the United States, contrary to the Government's contention, had not unequivocally asserted the applicability of the three-mile limit in the Gulf of Mexico. Assuming, as the defendants have here argued, that it would have been reasonable under international law for the United States to claim three leagues of territorial waters in the Gulf had it so chosen, we nevertheless cannot conclude that Congress meant to define Louisiana's boundaries by reference to a rule which was the subject of so much difference among nations and which had never been adopted by this country. The terms of the Act of Admission seem to point so strongly to the contrary that it would require much more convincing evidence than this to persuade us that the construction advanced by Louisiana is correct. Furthermore, it is significant that only a few years later, Congress admitted Mississippi and Alabama to the Union, describing their boundaries as including all islands within six leagues of the shore. See 363 U.S. at pages 81, 82, 80 S.Ct. at pages 1005 and 1006. If the three-league provision in Louisiana's Act of Admission was intended to reflect a policy of claiming three leagues of territorial waters, it is difficult to understand why Congress, so shortly thereafter, should have incorporated a six-league limit in an otherwise identical provision.
118
3. Postadmission Events.
119
To the extent that Louisiana's reliance on postadmission events is for the purpose of showing that the United States established a three-league 'national boundary' in the Gulf, they cannot help her case, for reasons previously discussed. 363 U.S. at pages 30—36, 80 S.Ct. at pages 979—982. We need not decide whether the United States ever claimed three leagues of territorial waters along the entire Gulf coast, which could in a sense be said to constitute a national boundary, or whether, if it did, Louisiana would have been entitled to extend its own boundary to that distance. Under the Submerged Lands Act, Louisiana's boundary must be measured at the time of her admission, unless a subsequent change was approved by Congress. If the Act of Admission fixed the boundary at the shore, neither action by Congress fixing greater boundaries for other States nor Executive policy on the extent of territorial waters could constitute Congressional approval of a maritime boundary for Louisiana. Louisiana, however, insists that certain of these events subsequent to admission must be considered in construing the Act of Admission.
120
1. We are urged to infer that since, as the Court today holds, three-league boundaries were fixed for Texas (363 U.S. at page 64, 80 S.Ct. at page 996) and Florida (363 U.S. at page 121, 80 S.Ct. at page 1026), and since, after Texas' admission, the Treaty of Guadalupe Hidalgo fixed the starting point of the boundary between the United States and Mexico at three leagues in the Gulf, Congress must have meant to treat Louisiana equally. The inference must be based primarily on the existence of the Texas and Florida boundaries, for the Treaty of Guadalupe Hidalgo relates only to the boundary between Texas and Mexico, and tends to prove nothing more than the existence of a three-league boundary for Texas. In view of the fact that shortly after Louisiana's admission, Congress fixed maritime boundaries for Mississippi and Alabama which, even on Louisiana's construction, would be different than three leagues, we can discern no consistent Congressional policy toward the maritime boundaries of the Gulf States at the time of Louisiana's admission, even if the much later actions with respect to Texas and Florida could be thought to have established such a policy. Cf. State of Louisiana v. State of Mississippi, supra, 202 U.S. at page 41, 26 S.Ct. at page 418. It would require clear evidence that such a policy was operative at the time Congress passed the Act admitting Louisiana to overcome language in that Act which points so strongly against the construction urged by Louisiana. Nor does the concept of equal footing require such a construction. While the ownership of certain lands within state boundaries has been held to be an inseparable attribute of the political sovereignty guaranteed equally to all States, see United States v. State of Texas, supra, 339 U.S. at page 716, 70 S.Ct. at page 922, the geographic extent of those boundaries, and thus of the lands owned, clearly has nothing to do with political equality. A fortiori this is true in the case of maritime boundaries beyond low-water mark, since, except as granted by Congress, the States do not own the lands beneath the marginal seas. See United States v. State of California, supra; State of Alabama v. State of Texas, supra.
121
2. Certain treaties successively entered into from 1819 to 1838 by the United States with Spain, Mexico, and the Republic of Texas establishing the boundary between Texas and the United States are relied on as indicating that the State and Federal Governments thought that Congress had fixed a threeleague maritime boundary for Louisiana.125 Louisiana contends that the treaties fixed the beginning of the international boundary at a point three leagues from land, and that therefore the southwestern corner of Louisiana as well as the southeastern corner of Texas must have been regarded as extending seaward to that distance. Whether or not such reasoning is valid, the language of the treaties refutes the premise that the international boundary began three leagues from land. Both the 1819 and the 1828 treaties recited that '(t)he boundary line between the two countries, west of the Mississippi, shall begin on the Gulph of Mexico, at the mouth of the river Sabine, in the sea * * *.' The Treaty of 1838 referred to the Treaty of 1828, and provided for a survey of 'that portion of the said boundary which extends from the mouth of the Sabine, where that river enters the Gulph of Mexico, to the Red river.'126
122
3. In its answer to the original complaint, Louisiana alleged certain acts of sovereignty over the marginal sea and seabed and the acquiescence of the Federal Government therein.127 Although it has now abandoned its ear contention that these acts establish its title by prescription and estoppel apart from the Submerged Lands Act, it now urges that they indicate a subsequent practical construction of Louisiana's Act of Admission. Taking these facts as proved, they do not have the effect urged by Louisiana. They indicate only that until the 1930's, the Federal Government may have believed that lands beneath the marginal sea belonged to the States. There is no allegation that the geographical extent of Louisiana's assertions, assuming that such assertions were made beyond three miles, was drawn in question, or that the question of Louisiana's boundary was considered. Some of the acts alleged constituted police power measures which a State can enforce it has now abandoned its earlier contention Skiriotes v. State of Florida, 313 U.S. 69, 61 S.Ct. 924, 85 L.Ed. 1193. As to acts touching the development of the submerged lands themselves, the United States would have had no reason to object to activity beyond Louisiana's boundary, since not until 1945 did the Federal Government assert any rights in the Continental Shelf for itself. If any of the other acts alleged conflicted with this Nation's policy toward territorial waters, objection would have lain regardless of the location of the State's boundary, and lack of objection is therefore, for the purposes of this case, inconclusive.
123
4. Finally, Louisiana relies on a 1954 statute of its own establishing the State's boundary at three leagues seaward of the line between inland and open waters. Act 33 of 1954, LSA-Rev.Stat. 49:1. It is said that in so legislating Louisiana followed the coastline as defined in regulations promulgated by the Commandant of the Coast Guard, pursuant to the Federal Act of February 19, 1895, 28 Stat. 672, 33 U.S.C. § 151, 33 U.S.C.A. § 151, and that because of this, and also on considerations of convenience and certainty, this state enactment should be accepted as establishing Louisiana's coast. We think the consideration of this contention should be postponed to a later stage of this case. We decide now only that Louisiana is entitled to submerged-land rights to a distance no greater than three geographical miles from its coastlines, wherever those lines may ultimately be shown to be.
IV.
The Particular Claims of Mississippi.
124
Mississippi's claim to a three-league seaward boundary must fail largely for the same reasons that have led us to reject the similar claim of Louisiana.
125
The territory which now comprises the part of Mississippi lying south of the 31st parallel was originally ceded by France to Great Britain by the Treaty of Paris of February 10, 1763.128 Great Britain designated this territory part of West Florida, and by proclamation of October 7, 1763, King George III described West Florida as
126
'bounded to the southward by the gulf of Mexico, including all islands within six leagues of the coast, from the river Apalachicola to Lake Pontchartrain * * *.'129
127
On September 3, 1783, Great Britain and Spain signed a treaty by which Great Britain ceded this area to Spain as part of a cession embracing all of western and eastern Florida.130
128
By the Treaty of San Ildefonso, signed October 1, 1800, Spain ceded to France 'the colony and province of Louisiana.' See 363 U.S. at page 72, 80 S.Ct. at page 1001. In the Treaty of Paris of April 30, 1803, France ceded Louisiana to the United States to the same extent as France had acquired it by virtue of the Treaty of San Ildefonso. See 363 U.S. at page 74, 80 S.Ct. at page 1002. A dispute arose between the United States and Spain as to whether, by the Treaty of San Ildefonso, Spain had conveyed to France any land east of the Mississippi River (including any part of West Florida), and therefore whether France could have subsequently passed that territory to the United States in the Treaty of Paris. On October 27, 1810, President Madison claimed the right to possession of the area,131 and on May 14, 1812, Congress made it part of the Mississippi Territory.132 On March 1, 1817, Congress authorized the creation of the State of Mississippi, specifically setting out its boundaries, in part as follows:
129
'thence due south to the Gulf of Mexico, thence westwardly, including all the islands within six leagues of the shore, to the most eastern junction of Pearl river with Lake Borgne * * *.'133 (Emphasis added.)
130
The Mississippi Constitution, approved by the Act admitting the State to the Union on December 10, 1817,134 contained an identical provision. Finally, by the Treaty of February 22, 1819, Spain purported to cede East and West Florida to the United States. 8 Stat. 254. It was determined, however, in Foster v. Neilson, 2 Pet. 253, 7 L.Ed. 415, that the portion of the State of Mississippi south of the 31st parallel passed to the United States as part of the Louisiana Purchase under the Treaty of Paris in 1803, and not as part of West Florida under the Spanish Treaty of 1819.
131
We have already held with respect to Louisiana's claim to a three-league maritime boundary that an Act of Admission which refers to all islands within a certain distance of the shore does not appear on its face to mean to establish a boundary line that distance from the shore, including all waters and submerged lands as well as all islands. There is nothing in Mississippi's history, just as there is nothing in Louisiana's, to cause us to depart from that conclusion in this instance. Indeed, Mississippi relies almost entirely on the fact that the very language which defeats its contention was repeatedly used, in the 1763 Proclamation by King George III, in the Congressional Enabling Act, and in the State Constitution, and was implicitly incorporated in mesne conveyances.
132
Mississippi also urges that the draftsmen of the provision must have intended to include all waters and submerged lands within six leagues from shore because the waters are very shallow and the islands are constantly shifting. This argument, however, appears only to strengthen the conclusion that it was islands upon which the provision focused, and not waters where there were no islands.
133
We must told that Mississippi is not entitled to rights in submerged lands lying beyond three geographical miles from its coast.135
V.
The Particular Claims of Alabama.
134
The preadmission history of Alabama is essentially the same as that of Mississippi, the portion of the State lying south of the 31st parallel having passed by the same mesne conveyances from France to the United States. That portion was incorporated into the Mississippi Territory by the Act of May 14, 1812,136 and became a part of the State of Alabama formed out of that territory. Its Act of Admission137 incorporated the Enabling Act, which described its boundary in part as follows:
135
'thence due south, to the Gulf of Mexico, thence eastwardly, including all the islands within six leagues of the shore, to the Perdido river * * *.'138
136
The same reasons applicable to the claims of Louisiana and Mississippi compel us to hold that Alabama is not entitled to rights in submerged lands lying beyond three geographical miles from its coast.139
VI.
137
Conclusions.
138
On the basis of what has been said in this opinion, we reach the following conclusions:
139
1. As to the States of Louisiana, Mississippi, and Alabama, a decree will be entered (1) declaring that the United States is entitled, as against these States, to all the lands, minerals, and other natural resources underlying the Gulf of Mexico more than three geographical miles from the coast of each such State, that is, from the line of ordinary low-water mark and outer limit of inland waters, and extending seaward to the edge of the Continental Shelf; (2) declaring that none of these States is entitled to any interest in such lands, minerals, and resources; (3) enjoining these States from interfering with the rights of the United States therein; (4) directing each such State appropriately to account to the United States for all sums of money derived therefrom subsequent to June 5, 1950:140 and (5) dismissing the cross bill of the State of Alabama.141
140
2. As to the State of Texas, a decree will be entered (1) declaring that the State is entitled, as against the United States, to the lands, minerals, and other natural resources underlying the Gulf of Mexico to a distance of three leagues from Texas' coast, that is, from the line of ordinary low-water mark and outer limit of inland waters; (2) declaring that the United States is entitled, as against Texas, to no interest therein; (3) declaring that the United States is entitled, as against Texas, to all such lands, minerals, and resources lying beyond that area, and extending to the edge of the Continental Shelf; (4) enjoining the State from interfering with the rights of the United States therein; and (5) directing Texas appropriately to account to the United States for all sums of money derived since June 5, 1950, from the area to which the United States is declared to be entitled.
141
3. Jurisdiction over this case will be retained for such further proceedings as may be necessary to effectuate the rights adjudicated herein.
142
4. The motions of Louisiana and Mississippi to take depositions and present evidence are denied, without prejudice to their renewal in such further proceedings as may be had in connection with matters left open by this opinion.142 In so deciding we have not been unmindful of this Court's liberality in original cases of 'allowing full development of the facts.' See United States v. State of Texas, 339 U.S. 707, 715, 70 S.Ct. 918, 922, 94 L.Ed. 1221. We think, however, that the conclusions to be drawn from the historical documents relied on by Louisiana, Mississippi, and Alabama are so clear as to leave no issue presently involved open to dispute, and that we would not be justified in postponing the granting of the relief to which we find the United States entitled as against these three States.143 By the same token we see no need to postpone the adjudication of the issues now presented as between the United States and Texas, and we do not understand the Government indeed to contend otherwise.
143
The parties may submit an appropriate form of decree giving effect to the conclusions reached in this opinion. It is so ordered.
144
Decree in accordance with opinion.
145
The CHIEF JUSTICE and Mr. Justice CLARK took no part in the consideration or decision of these cases.
146
(For opinion of Mr. Justice FRANKFURTER, joined by Mr. Justice BRENNAN, Mr. Justice WHITTAKER and Mr. Justice STEWART see 363 U.S. 129, 80 S.Ct. 1030.)
147
Mr. Justice BLACK, concurring in part and dissenting in part.
148
I concur in the Court's judgment that Texas owns the belt of submerged lands extending three marine leagues from that State's coastline into the Gulf of Mexico (including oil and other resources), but dissent from denial of like claims by Louisiana, Mississippi and Alabama.
149
The claims of all these States depend on our interpretation and application of the Submerged Lands Act passed in 1953.1 Two bills previously passed by Congress, substantially the same as the 1953 Act, were vetoed by the President.2 After the first veto we refused to hold that California, Texas and Louisiana owned or had ever owned legal title to the submerged lands adjacent to their coasts. We held that the United States, not the States, had paramount rights in and power over such lands and their products, including oil.3 Congress accepted our holdings as declaring the then-existing law that these States had never owned the offshore lands—but believed that all coastal States were equitably entitled to keep all the submerged lands they had long treated as their own,4 without regard to technical legal ownership or boundaries. Accordingly, Congress exercised its power by passing the Submerged Lands Act in an attempt to restore the 'rights and powers of the States and those holding under (them) * * * as they existed prior to the decision of the Supreme Court of the United States in the California case.'5
150
To accomplish this purpose the Act first provides for an outright grant to all the coastal States of a boundary three geographical miles from their coastlines.6 The Gulf States, however, were not satisfied with three miles but claimed that special circumstances entitled them to three leagues (about 10 1/2 miles) or more. They urged, among other things, that claims of the Gulf States and their predecessors in title had always been more expansive than claims of coastal States in other parts of the country; that when admitted to the Union their constitutions contained definitions which, properly interpreted, described boundaries extending three to six leagues seaward; that the Gulf States had not only claimed these more expansive boundaries, but had always exercised possessory and ownership rights over these marginal lands and their products at will without regard to any three-mile limitations; and that historically the United States had never questioned any of their claims until disputes arose regarding oil leases during the late 1930's.7 Moved by these arguments, strongly supported by evidence and concessions, Congress did not limit its grant to the Gulf States to three miles of submerged lands, but granted a belt extending all the way to each State's 'boundaries * * * as they existed at the time such State became a member of the Union * * * but in no event * * * more than * * * three marine leagues into the Gulf of Mexico. * * *' 43 U.S.C. § 1301(b), 43 U.S.C.A. § 1301(b). We have upheld the power of Congress to convey these marginal lands to the States. State of Alabama v. State of Texas, 347 U.S. 272, 74 S.Ct. 481, 98 L.Ed. 689.
151
The statute neither defines the kind of 'boundary' which is to measure Congress' grants to these States, nor particularizes the criteria for deciding it. We may agree with the Government that the term 'boundary' was used here in its usual sense to mean the limit of territory, which, in the case of a coastal boundary, would mean the outer limit of the territorial sea. But this does not get us very far in determining the location of these States' boundaries. For a number of reasons I cannot accept the Government's contention that each State must show a 'legal' or 'legally accepted' boundary as of the date it became a member of the Union. I cannot see how we can be expected retroactively to reconstruct a technically defined legal boundary, extending out into the lands under the Gulf, if the States never technically owned any of these lands. In United States v. State of California, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889, and the cases which followed it, this Court held that the States of California, Texas and Louisiana did not own or have title to the offshore lands they claimed. If we were now to hold that these States must prove technical title as of the early 1800's in order to satisfy the Submerged Lands Act and that they have succeeded in doing so, we would in effect be overruling our prior cases, cases expressly accepted by Congress as declaring the law when the 1953 Act was passed. I cannot believe that Congress intended us to try to use again the same 'legal' test of ownership we had applied in holding that the States did not own any part of their marginal lands, particularly since Congress passed the 1953 Act to allow the States' rights to be determined under established equitable, not strictly legal, principles. The opinion of Mr. Justice DOUGLAS forcefully points out the difficulty, if not the impossibility, of finding that any of these States ever had a technical legal boundary out in the ocean. Even if a technical determination of boundaries were intended by Congress, rather than attempt that impossible task, I would prefer to return the Act to Congress for a more precise expression of its will. Cf. United States v. Alcea Band of Tillamooks, 329 U.S. 40, 54, 67 S.Ct. 167, 174, 91 L.Ed. 29 (concurring opinion); Northwestern Bands of Shoshone Indians v. United States, 324 U.S. 335, 354—358, 65 S.Ct. 690, 700—702, 89 L.Ed. 985 (concurring opinion).
152
Moreover, the Submerged Lands Act prescribes no standards for determining a strictly 'legal' boundary according to the conveyancer's art. There are, of course, no markers out in the Gulf of Mexico to show where the boundaries were when the States were admitted. Since some were admitted anywhere from 140 to 150 years ago there are no living witnesses to testify where their boundaries were at that time. But despite these difficulties, it is our duty to give effect to the congressional act as best we can. It is therefore my view that since we cannot look to legalistic tests of title, we must look to the claims, understandings, expectations and uses of the States throughout their history. This is because of the congressional expressions, stated time and time again that the Act's purpose was to restore to the States what Congress deemed to have been their historical rights and powers. Nor can I accept the Government's argument that these States' interests in the marginal seas must be determined in accord with the national policy of foreign relations. Everything in the very extended congressional hearings and reports refutes any such idea. Instead, these sources indicate that Congress passed the Act to apply broad principles of equity—not as we see it but as Congress saw it.8 In determining the boundaries of these States, we must, I think, recognize and follow the same principles if we are to effectuate the congressional purpose that produced this Act. That is what I would do. A few references to the legislative background will illustrate the guides Congress intended we should apply in interpreting its Act.
153
Senator Ellender of Louisiana invoked the equitable sense of Congress.9 Senator Holland of Florida, the author of the bill, urged Congress to 'look into the equities and the moral considerations that are involved. * * *'10 The presiding officer of the Senate Committee, who conducted the hearings and reported the bill, told the Congress that 'justice, equity, and the best interests of the Nation will be served by the enactment of this legislation.'11 The Senate Committee Report on an earlier bill, printed and adopted as a part of the Report on the 1953 Act, declared that 'The Congress, in the exercise of its policy powers, is not and should not be confined to the same technical rules that bind the courts in their determination of legal rights of litigants. * * * The committee believes that, as a matter of policy in this instance, the same equitable principles and high standards that apply between individuals, should be applied by Congress as between the National Government and the sovereign states.'12 The very last paragraph of the report on the bill referred to it as 'an act of simple justice to each of the 48 States in that it reestablishes in them as a matter of law that possession and control of the lands beneath navigable waters inside their boundaries which have existed in fact since the beginning of our Nation. It is not a gift; it is a restitution.'13
154
Congress has thus repeatedly emphasized its desire to have the States' rights in these submerged lands determined not under 'technical rules' but, as the Senate Committee said, in accordance with 'equitable principles and high standards' of justice.14 To point out specifically what it meant, that Committee referred to three similar cases of this Court. One, which is illustrative, was State of Indiana v. State of Kentucky, 136 U.S. 479, 10 S.Ct. 1051, 34 L.Ed. 329.15 That case involved a boundary dispute between Indiana and Kentucky. The crucial question was the determination in 1890 of the location of the Kentucky boundary when Kentucky became a State in 1792. That same kind of backward-looking determination of boundaries is involved here with reference to the Gulf States. In the Indiana-Kentucky case, as here, there were no satisfactory markers, and testimony of living witnesses was deemed to be of little value. There was much evidence in the Indiana-Kentucky case, however, that Kentucky had exercised authority over the disputed territory since it first became a State and that Indiana had never challenged the boundary or the authority of Kentucky. Emphasizing the great value of that evidence this Court said: 'This long acquiescence in the exercise by Kentucky of dominion and jurisdiction over the island is more potential than the recollection of all the witnesses produced on either side. * * * It is a principle of public law universally recognized, that long acquiescence in the possession of territory, and in the exercise of dominion and sovereignty over it, is conclusive of the nation's title and rightful authority.' 136 U.S. at page 510, 10 S.Ct. at page 1054. The Court went on to quote the following from State of Rhode Island v. State of Massachusetts, 4 How. 591, 639, 11 L.Ed. 1116, 'For the security of rights, whether of state or individuals, long possession under a claim of title is protected; and there is no controversy in which this great principle may be invoked with greater justice and propriety than in a case of disputed boundary.' 136 U.S. at page 511, 10 S.Ct. at page 1054.
155
Accepting, as I think we should, the desire of Congress to have the ancient boundaries of these Gulf States determined on the basis of their long-unchallenged claims, rather than by the use of subtle and refined legal inferences, I am led to the conclusion that the other Gulf States, as well as Texas, are entitled to prevail over the Government here. It is admitted that prior to 1937 the United States never claimed any title to, or exercised any possession over, any part of these marginal lands, either within or without three-mile limits, except under grants from the States. On the other hand, each of the Gulf States began to exercise acts of possession, ownership, dominion and sovereignty over the marginal belt from the time of admission into the Union, without regard to any three-mile limit.16 The hearings of Congressional Committees show and their reports assert that very large sums of money have been spent by the States and their public agencies and grantees in the development and improvement of the marginal submerged lands adjacent to the States' borders.17 Not only have the States' possession, dominion and sovereignty over these marginal belts been open and notorious, but that is coupled with the fact that for much more than a century federal departments and agencies not only acquiesced in but unequivocally recognized the States' rightful claims to these belts.18 It is conceded that in many instances the Government itself has deemed it necessary to acquire title from these States before attempting to exercise any power of its own.19 There is nothing to indicate that the claims or uses of the marginal lands were ever limited to three miles. Certainly there is no evidence before us, and there was none before the Congress, that up to 1937 the United States had ever attempted to limit the sovereignty of the Gulf States within boundaries three miles from their coasts. On the other hand, evidence considered by the Congressional Committees and argued to us provides ample support for holding that the Gulf States did not consider their boundaries as limited to three miles.
156
The constitutions of all these States defined their boundaries when they were admitted into the Union. The first Texas Constitution kept in force the same boundary, three leagues into the Gulf, claimed for the Republic of Texas before it became a State.20 This definition was presented to Congress as a reason why Texas should be granted three leagues. The constitutions of all of the other States involved here defined their coastal boundaries as extending from one Gulf point to another 'including all islands' three or six leagues from the shore or coastline. The legislative history of the Submerged Lands Act shows that these definitions were repeatedly called to the attention of Congress as a reason why these Gulf States should be granted three leagues or more.21 From the standpoint of the paper boundary claims, Texas urges, on the basis of the more precise definition of its seaward boundary, that it has a stronger case than the other States. Although all these paper claims were considered by Congress, none was treated as decisive of the question of state boundaries, as is clearly shown by Congress' refusal to make Texas and Florida22 the exclusive beneficiaries of this Act simply because their constitutions had specifically defined a three-league seaward boundary. Nevertheless, each constitutional definition provides some color of title for each State's claim of a boundary extending at least three leagues from its coastline. The paper claims of each State, therefore, merely add some weight to the overwhelming fact, as Congress saw it, that for more than 100 years all the Gulf States exercised the only possession, dominion and sovereignty over the submerged lands adjacent to their coastlines that was ever exercised at all. The admitted facts with reference to these state boundaries thus entitle all the States to three-league marginal belts, if we fairly apply the equitable principles of prescription under which Congress declared this controversy between the Federal Government and the Gulf States should be settled.'23
157
The result of the Court's holding in this and the Florida case24 is that Texas and Florida will have marginal belts that uniformly extend three leagues from their shores. The other Gulf States, however, are not so fortunate. Their boundaries will extend only three miles in some places. The Government concedes, however, that their boundaries extend three miles beyond the coastline of their islands—which may be as far as six leagues from the mainland. Thus, Louisiana, Mississippi and Alabama will have irregular saw-toothed boundaries projecting six leagues at some points and retreating to within three miles of the mainland at other points. This condition follows from the Government's concession that all lands between the States' islands and the mainland are lands beneath inland waters. The mere exercise of jurisdiction over such jagged boundaries as these raises serious problems. Moreover, there is an element of fundamental unfairness about granting Texas and Florida ownership and sovereignty over three-league marginal belts while denying it to their sister States bordering the Gulf of Mexico. This is bound to frustrate the intent of Congress to settle this whole Gulf States controversy at this time.
158
The unfairness of the Court's result is particularly emphasized when we consider the plight in which it leaves Louisiana. One of the grounds that Congress assigned for its desire to restore these lands to the States was its strong belief that the States rather than the Federal Government should exploit their offshore oil. This desire rested on two conclusions: (1) that the States would do it better and more effectively for the interests of the public at large,25 and (2) that it would be unconscionable to take this oil away from the States after they had been solely responsible for bringing it into the public use.26 The record shows that Louisiana had leased land out more than three leagues from its coastline as early as 1920.27 There are still oil wells out there. For many years royalties from those wells have gone into the public treasury of the State of Louisiana. This income has become a part of the very life of the State.28 It constitutes a large part of the support of the State's public-school system. To take these marginal lands away from the State of Louisiana and give Texas the lands it claims—when Texas apparently has no wells at all beyond the three-mile limit—seems to me completely incompatible with the kind of justice and fairness that the Congress wanted to bring about by this Act. Moreover, I am not at all sure but that this result will completely upset the congressional desire to bring about once and for all a settlement of this long-standing controversy by passage of the Submerged Lands Act.29
159
Nothing in the Act itself indicates that Texas was to be given any more consideration in this case than Louisiana, Mississippi and Alabama. Had Congress wanted to give the land to Texas and refuse to give it to the other States it easily could have done so. In fact, this was specifically suggested to Congress by the Attorney General of the United States, and the Congress rejected it.30 Time and again Congress emphasized that its interests were focused on the problem of these lands because of the unfairness it saw in taking them from the Gulf States.
160
As Congress indicated, it is time that the problem be solved, the title be quieted and the controversy be stilled.31 In my judgment to interpret this Act in a way which grants the land to Texas and Florida and withholds it from the other Gulf States simply prolongs this costly and disquieting controversy. It will not be finally settled until it is settled the way Congress believes is right, and I do not think Congress will believe it right to award these marginal lands to Texas and Florida and deny them to the other Gulf States.
161
Mr. Justice DOUGLAS, dissenting in part.
162
Texas was admitted to the Union in 1845 (9 Stat. 108) pursuant to a prior Joint Resolution (5 Stat. 797) which reserved for adjustment by the United States 'all questions of boundary that may arise with other governments.' Texas as early as 1836 had claimed, as the opinion of the Court shows, a seaward boundary of 'three leagues from land.' Such a claim conflicted with our national policy in the Gulf, since the United States before then had in treaties with Spain (8 Stat. 252) and with Mexico (8 Stat. 372) described the boundaries between the two countries west of the Mississippi as commencing 'on the Gulf of Mexico, at the mouth of the river Sabine, in the sea.' Moreover the Convention of 1838 to establish the boundary between the United States and Texas (8 Stat. 511) agreed to the running and marking of 'that portion of the said boundary which extends from the mouth of the Sabine, where that river enters the Gulph of Mexico, to the Red river.' Certainly in that Convention Texas was not going so far as to claim, as she had earlier, 'three leagues' into the Gulf.
163
I agree with the Court that there was nothing done at or subsequent to that time to approve the Texas claim to three leagues from land unless it be the Treaty of Guadalupe Hidalgo signed on February 2, 1848, 9 Stat. 922, by the United States and Mexico and which, inter alia, fixed the 'boundary line between the two republics' in the Gulf of Mexico 'three leagues from land, opposite the mouth of the Rio Grande.' Can we say that the United States sat at that conference table negotiating for Texas and her boundary claim? Was the seaward boundary once claimed by Texas now claimed by the United States in recognition that Texas owned it?
164
There is not a word in the history of the negotiations to indicate that the United States had moral or legal claim to the three-league belt because of the earlier claim of Texas. There is no suggestion that the United States claimed derivatively from the right of Texas and thus upheld the position of Texas, approving the claim made by Texas in 1836. There is not a word indicating that the Treaty of 1848 was in form or in essence an undertaking by Congress to fix the boundaries of Texas under the 1838 convention.
165
The terms of the 1838 Convention do not support any such construction for, as I have said, that Convention fixed the boundary as extending 'from the mouth of the Sabine, where that river enters the Gulph of Mexico,' not 'three leagues' seaward of that point. To conclude, therefore, that the Treaty of Guadalupe Hidalgo was intended to fix the land and sea boundaries of Texas in accordance with the Texas Boundary Act of 1836 is to indulge in mental gymnastics beyond my capacities. The agreement by the United States to fix the boundaries of Texas was not contained in the unilateral act of Texas reflected in her 1836 statute but by the Convention of 1838 which required the seaward boundary to extend from 'the mouth of the Sabine, where that river enters the Gulph of Mexico.' The obligation in this Convention thus is at war with any inference that the seaward boundary was to be 'three leagues' from shore. Cf. United States v. State of Texas, 162 U.S. 1, 32, 16 S.Ct. 725, 731, 40 L.Ed. 867.
166
While the 1838 Convention failed to include any seaward territory, a Joint Commission appointed to make the survey pursuant to the 1838 Convention actually marked the boundary between the United States and the Republic of Texas at the mouth of the Sabine River—not three leagues into the Gulf of Mexico.1
167
It is true that the Joint Resolution of 1845 (5 Stat. 797) called for the formation of Texas 'subject to the adjustment by this government of all questions of boundary that may arise with other governments.' But the situation envisaged by that clause soon changed. The Mexican war broke out in 1846; and the Treaty of Guadalupe Hidalgo finally brought it to a close. By the time the treaty negotiations started the United States was thinking in new dimensions. The problem was no longer finding and establishing what the Texas boundaries had been. We then put that question to one side. The instructions to our representative, Nicholas P. Trist, which included a projet of the Treaty, read in part, 'The extension of our boundaries over New Mexico and Upper California, for a sum not exceeding twenty millions of dollars, is to be considered a sine qua non of any treaty. You may modify, change, or omit the other terms of the proje t if needful, but not so as to interfere with this ultimatum.'2 If Lower California was included, Trist was authorized to pay up to $25,000,000.3 Trist recorded at his first conference with the Mexican Commissioners that 'our claim for extension of territory' was placed 'on the ground of indemnity for the expenses of the war.'4 The acquisition of territory from Mexico as indemnity was repeated over and again by President Polk in his message of December 7, 1847.5 Thus he said, '* * * if no Mexican territory was acquired, no indemnity could be obtained.'6 Again, '(t)he doctrine of no territory is the doctrine of no indemnity.'7 And what he went on to say should remove any doubts about the nature of the controversy with Mexico. First, it will be apparent from what follows that 'three leagues' were not a part of his thinking when it came to the seaward boundary. Second, it is obvious that the sole preoccupation was with the acquisition of land from Mexico.8
168
'The commissioner of the United States was authorized to agree to the establishment of the Rio Grande as the boundary, from its entrance into the Gulf to its intersection with the southern boundary of New Mexico, in north latitude about thirty-two degrees, and to obtain a cession to the United States of the provinces of New Mexico and the Californias, and the privilege of the right of way across the isthmus of Tehuantepec. The boundary of the Rio Grande, and the cession to the United States of New Mexico and Upper California, constituted an ultimatum which our commissioner was, under no circumstances, to yield.
169
'That it might be manifest not only to Mexico, but to all other nations, that the United States were not disposed to take advantage of a feeble power, by insisting upon wresting from her all the other provinces, including many of her principal towns and cities, which we had conquered and held in our military occupation, but were willing to conclude a treaty in a spirit of liberality, our commissioner was authorized to stipulate for the restoration to Mexico of all our other conquests.
170
'As the territory to be acquired by the boundary proposed might be estimated to be of greater value than a fair equivalent for our just demands, our commissioner was authorized to stipulate for the payment of such additional pecuniary consideration as was deemed reasonable.' (Italics added.)
171
And when the Treaty had been ratified by both countries and President Polk reported to Congress, he did not speak of settlement of any boundaries of the former State of Texas. He stated, 'The extensive and valuable territories ceded by Mexico to the United States constitute indemnity for the past.'9 And he expounded on the valued additions of New Mexico and Upper California to our domain.10 There is no mention of any settlement of any claim of Texas to a seaward boundary 'three leagues' off shore. Nor is there any reference to any boundary settlement based on old Texas claims. This is not surprising, for the Treaty of Guadalupe Hidalgo was part of our empire building, not the determination of old boundaries.
172
The Treaty of Guadalupe Hidalgo has until now never been considered to have played any part in determining any Texan boundary question. As stated by the Court in United States v. State of Texas, 162 U.S. 1, 16 S.Ct. 725, 40 L.Ed. 867, the boundary question was resolved by the Act of September 9, 1850 (9 Stat. 446). After quoting the 1836 Act by which Texas claimed 'three leagues from land' as her seaward border, the Court went on to say:
173
'This boundary had not been defined when Texas was admitted, as a State, into the Union, with the territory 'properly included within and rightfully belonging to the Republic of Texas.' The settlement of that question, together with certain claims made by Texas against the United States, were among the subjects that engaged the attention of congress during the consideration of the various measures constituting the compromises of 1850. The result was the passage of the above act of September 9, 1850, c. 49, the provisions of which were promptly accepted by the State of Texas. This legislation of the two governments constituted a convention or contract in respect of all matters embraced by it. The settlement of 1850 fixed the boundary of Texas 'on the north' to commence at the point at which the 100th meridian intersects the parallel of 36 30 north latitude, and from that point the northern line ran due west to the 103d meridian, thence due south to the 32d degree of north latitude, thence on that parallel to the Rio Bravo del Norte, and thence with the channel of that river to the Gulf of Mexico.' 162 U.S. at page 39, 16 S.Ct. at page 733.
174
Drawing the line 'to the Gulf of Mexico' is a far cry from drawing it to a point 'three leagues' from the shore. What we do today is quite inconsistent with what a unanimous Court in United States v. State of Texas, supra, decided in 1896. What the Court said was not decided until 1850 we now say was decided earlier.
175
Though the United States and Mexico by the Treaty of Guadalupe Hidalgo established land boundaries between the two countries, Congress never recognized that the Treaty established any boundaries of Texas. In her 1836 statute, Texas not only claimed the three-league belt in the Gulf of Mexico but also much of the territory lying west and north of her present boundaries, including eastern New Mexico which, like the three-league belt, was acquired under the Treaty by the United States. Congress in the 1850 compromise paid Texas $10,000,000 to relinquish its claim to this territory. Yet this payment was regarded by Congress not as purchase price but as settlement of a disputed claim.11 Accordingly, it was early held that eastern New Mexico, though claimed by Texas, was not brought into the Union by the Joint Resolution of 1845 and that the Treaty of Guadalupe Hidalgo did not establish what the Texas boundaries had been at the time of its annexation. De Baca v. United States, 1901, 36 Ct.Cl. 407. I cannot understand how the Treaty can be said to have established a seaward boundary when it did not fix the inland boundaries of Texas. The Court does not suggest that all the land claimed by Texas in her 1836 statute and subsequently ceded to the United States in the Treaty of Guadalupe Hidalgo was 'territory properly included within, and rightfully belonging to the Republic of Texas' within the meaning of the Joint Resolution of 1845. Yet I can see no basis for deciding that the Treaty, though not recognizing the validity of the western boundary claims of Texas, did establish and fix other Texas boundaries.12 If the Government was not negotiating on behalf of Texas in acquiring the eastern New Mexico territory, how can it be said to have done so with respect to the seaward boundary claim?
176
The southwestern boundary of Texas was confirmed in the 1850 Compromise to lie along the Rio Grande 'to the Gulf of Mexico.' The 1838 Convention had fixed the eastern boundary at 'the mouth of the Sabine.' Thus, on the two occasions when the United States and Texas negotiated and agreed upon boundaries and when they would have been most likely to have settled the question, no extension of the Texas territory into the Gulf was recognized. The conclusion for me is irresistable that the seaward boundary, so far as Texas was concerned, was so inconsequential as to require or receive no settlement. I conclude that in terms of § 4 of the 1953 Act the boundary of Texas reserved for later adjudication when Texas was admitted to the Union was on its seaward side never approved by Congress to be three leagues from shore.
177
Why then the reference in the Treaty to the 'Boundary line' between the United States and Mexico as 'three leagues' from land in the Gulf of Mexico?
178
The Court says that the United States in negotiating the Treaty attempted to follow the 1836 Texas Act. The project of the Treaty given to Trist did provide for a boundary line commencing 'three leagues from the land opposite the mouth of the Rio Grande.'13 But neither it nor the accompanying instructions made any reference to the 1836 Act of Texas. Trist was not told to take the 1836 Act as his guide when it came to seaward boundaries. I can find nothing in the instructions to Trist which relates his duties in negotiating the Treaty to what Texas had claimed in 1836, nor does the Court refer us to any such instruction. To be sure, Trist's predecessor, John Slidell, had been advised by the Secretary of State, Mr. Buchanan, in a letter dated November 10, 1845, that 'The Congress of Texas, by the act of December 19, 1836, have declared the Rio del Norte (Rio Grande), from its mouth to its source, to be a boundary of that republic.'14 Trist knew of these earlier instructions.15 Yet if he followed them literally he would have negotiated a boundary beginning 'at the mouth' of the Rio Grande not 'three leagues from land opposite the mouth.'16 And, as I have pointed out, the purpose of Trist's mission was much different from that of Slidell's. Slidell was sent to Mexico before the war to settle a boundary dispute. Trist went to obtain the fruits of our conquest of Mexico. The Court concedes that Slidell's instructions demonstrate 'total insensitivity to any problem of a seaward boundary.' I agree. But I cannot take the additional step that, although our State Department was wholly insensitive to the problem of a seaward boundary, it was nonetheless trying to stand in the shoes of Texas and get Mexico to validate the old boundary claims of Texas. So far as I can deduce, this is sheer speculation.
179
Much less speculative is the reason advanced in 1875 by Hamilton Fish, Secretary of State.
180
In 1874 Lord Derby had raised for Great Britain a question with regard to Spain's claim of jurisdiction of two leagues from the Spanish coast.17 Hamilton Fish replied on January 22, 1875, as follows:18
181
'* * * I have the honor to inform you that this Government has uniformly, under every administration which has had occasion to consider the subject, objected to the pretension of Spain adverted to, upon the same ground and in similar terms to those contained in the instruction of the Earl of Derby.
182
'We have always understood and asserted that, pursuant to public law, no nation can rightfully claim jurisdiction at sea beyond a marine league from its coast.
183
'This opinion on our part has sometimes been said to be inconsistent with the facts that, by the laws of the United States, revenuecutters are authorized to board vessels anywhere within four leagues of their coasts, and that by the treaty of Guadalupe Hidalgo, so called, between the United States and Mexico, of the second of February, 1848, the boundary line between the dominions of the parties begins in the Gulf of Mexico, three leagues from land.
184
'It is believed, however, that in carrying into effect the authority conferred by the act of Congress referred to, no vessel is boarded, if boarded at all, except such a one as, upon being hailed, may have answered that she was bound to a port of the United States. At all events, although the act of Congress was passed in the infancy of this Government, there is no known instance of any complaint on the part of a foreign government of the trespass by a commander of a revenue-cutter upon the rights of its flag under the law of nations.
185
'In respect to the provision in the treaty with Mexico, it may be remarked that it was probably suggested by the passage in the act of Congress referred to, and designed for the same purpose, that of preventing smuggling. By turning to the files of your legation, you will find that Mr. Bankhead, in a note to Mr. Buchanan of the 30th of April, 1948, objected on behalf of Her Majesty's government, to the provision in question. Mr. Buchanan, however, replied in a note of the 19th of August, in that year, that the stipulation could only affect the rights of Mexico and the United States, and was never intended to trench upon the rights of Great Britain, or of any other power under the law of nations.'
186
The Act referred to was that of March 2, 1799 (1 Stat. 627), which provided in § 54 that it shall be lawful for our collectors, naval officers, inspectors, and officers of revenue cutters to board ships bound to the United States 'within four leagues of the coast' for the purpose of controlling or preventing smuggling.19
187
That this was the purpose gains collateral support from a series of treaties concluded by Mexico in the latter half of the nineteenth century with China,20 the Dominican Republic,21 El Salvador,22 France,23 Germany,24 the Netherlands,25 Norway and Sweden,26 and the United Kingdom,27 which state that the 'three league' belt (or at times a broader one) was being used for certain limited reasons of law enforcement.
188
These treaties reflect what Hamilton Fish as Secretary of State said about the Treaty of Guadalupe Hidalgo and its 'three league' provision. They show a practice of exercising extraterritorial regulation beyond the usual three-mile limit with respect to customs and smuggling. It is true that the Treaty of Guadalupe Hidalgo speaks in terms of 'boundary.' But, if it meant 'boundary' in the technical property sense, it would mark a line that separated the territory of the United States and Mexico and established a territorial claim good against all comers. Our State Department from the beginning insisted that was not intended. When Great Britain protested in 1848 that the Treaty of Guadalupe Hidalgo did not respect the three-mile limit which 'is acknowledged by international law and practice as the extent of territorial jurisdiction over the sea that washes the coasts of states,' Secretary of State Buchanan's answer (which, as we have noted, Hamilton Fish referred to in his communication of January 22, 1875) was as follows:28
189
'In answer I have to state, that the stipulation in the treaty can only affect the rights of Mexico and the United States. If for their mutual convenience it has been deemed proper to enter into such an arrangement, third parties can have no just cause of complaint. The Government of the United States never intended by this stipulation to question the rights which Great Britain or any other power may possess under the law of nations.'
190
That has consistently been our construction. I have already referred to what Secretary Fish said in 1875. When Mexico in 1935 undertook to extend the breadth of Mexican territorial waters from three to nine miles,29 our Ambassador Josephus Daniels on instructions from the State Department protested, reserving 'all rights of whatever nature so far as concerns any effects upon American commerce from enforcement of this legislation.'30 And when Mexico in reply31 referred to the Treaty of Guadalupe Hidalgo as justifying her claim to nine miles, the State Department reiterated among other things our consistent position that the treaty provision extending the 'boundary' into the Gulf for three leagues was included to give the two nations jurisdiction to that distance at that particular point 'to prevent smuggling.'32
191
It seems apparent from this history that the United States in negotiating the Treaty of Guadalupe Hidalgo was far from determining that the metes and bounds of our property on the seaward side of the Gulf ran to three leagues. The three-league provision in purpose and presumed effect had quite a different aim. It had no aim to assert derivatively a title that Texas had claimed. Its aim was merely to mark a zone where, so far as the two contracting parties were concerned, our law enforcement agencies could maintain effective patrols. If this history shows nothing else, it shows that the United States had a national interest in having the three-league belt recognized for its own purposes, whereas Texas up to the time oil was discovered offshore placed no value whatsoever on a seaward boundary. For me the argument becomes too thin to say that the United States, though nominally negotiating on her own behalf, was claiming the three-league maritime belt on behalf of Texas.
192
If we acted today with the precision and meticulous care which is demanded in title disputes, we could not, I think, say that the United States in the Treaty of Guadalupe Hidalgo recognized or approved the Texas claim that the territory of Texas extended three leagues from shore.
193
Yet if we are to decide these cases by substandards (lessening the requirements of proof as we should do if Congress intended to grant whatever the parties fairly claimed), then I agree with Mr. Justice Black that the discrimination in favor of Texas and against Louisiana, Alabama, and Mississippi is quite unjustified.
194
If the southeast corner of Texas was three leagues offshore, it is difficult for me to see how the southwest corner of Louisiana was not at the same point. From the beginning the United States and Spain fixed their corner west of the Mississippi 'on the Gulph of Mexico, at the mouth of the river Sabine, in the sea.' 8 Stat. 254. If we move the Texas boundary out three leagues, it is hard to see why Louisiana's does not accompany it. It has long been recognized that a part of Louisiana's border is 'a water boundary' that extends 'to the open sea or Gulf of Mexico,' State of Louisiana v. State of Mississippi, 202 U.S. 1, 43, 26 S.Ct. 408, 419, 50 L.Ed. 913, and includes 'the deep-water sailing channel line as a boundary.' Id., 202 U.S. at page 44, 26 S.Ct. at page 419.
195
The enabling Act authorizing the people of the Territory of Orleans to form Louisiana described the territory as running 'to the gulf of Mexico; thence bounded by the said gulf * * * including all islands within three leagues of the coast.' 2 Stat. 641. The boundaries described in the Act admitting Louisiana to the Union are similarly described as 'to the gulf of Mexico; thence, bounded by the said gulf * * * including all islands within three leagues of the coast.' 2 Stat. 701, 702.
196
As respects Mississippi, Congress in the Enabling Act (3 Stat. 348) provided that the territory included in the new State would run from a specified point on the Gulf of Mexico 'westwardly, including all the islands within six leagues of the shore.' This was the boundary description used since George III of Great Britain described West Florida as 'bounded to the southward by the Gulf of Mexico, including all islands within six leagues of the coast.'33
197
Alabama when a territory had two of its boundaries described as 'thence due south to the Gulf of Mexico, thence east-wardly, including all the islands within six leagues of the shore, to the Perdido river.' 3 Stat. 371. This language was repeated in the Enabling Act. 3 Stat. 489.
198
The United States concedes that, so far as Louisiana, Mississippi and Alabama are concerned, all the submerged lands between the mainland and the islands are sufficiently enclosed to constitute inland waters that passed to the State on its entry into the Union. Pollard v. Hagan, 3 How. 212, 11 L.Ed. 565. It further concedes that these States have rights to the submerged lands within three miles of the islands under the ordinary three-mile rule.
199
If we were to require the degree of proof of ownership which is ordinarily required in title disputes, I would agree that neither Louisiana, Alabama, nor Mississippi has met the burden of proof. But if standards and requirements as lax as those used to grant Texas three leagues from shore are sufficient for her, they should be sufficient for these other three States.
200
The heart of the Texan claim is that the United States and Mexico recognized that there was a three-league maritime belt which each would respect and that this was done in recognition of the validity of the claims contained in the 1836 statute of Texas. This belt was called a 'boundary'; but, as I have tried to demonstrate, it was not a territorial claim but only a demarcation of zones where the parties' respective law enforcement activities would be recognized and approved. The Gulf presents peculiar problems due to its shallow coast. The shallowness of its waters is well documented and our Government was well aware of this condition in 1848.34 These are the persuasive facts behind the creation of the three-league belt by the Treaty of Guadalupe Hidalgo and by Mexico in the other treaties concerning the Gulf which she negotiated with other nations.
201
If the policy of measuring the zone of the United States as 'three leagues' into the Gulf off the shore of Texas is to give Texas property rights to the submerged lands in that zone, the beneficiaries of that concern should be all our Gulf States. At best the language used to describe the seaward territories of Louisiana, Alabama, and Mississippi is ambiguous. The words 'to the Gulf of Mexico * * * including all of the islands' within certain designated leagues of the shore can reasonably mean that the 'boundary line' is marked by the islands. There is difficulty in that construction. Yet it is for me no more difficult than the method we use to give Texas a territorial claim in the same belt. All the States on the Gulf should be given the same benefit of the doubts that have been resolved in favor of Texas. The claim of Florida, as shown in United States v. State of Florida, 363 U.S. 121, 80 S.Ct. 1026, is fully established by the standard I would ask Texas to meet. If we are to relax the standard of proof for the benefit of Texas, we should do so for all these claimants. In that posture, the claims of each of the other Gulf States which have gone 'long-unchallenged,' as shown by Mr. Justice Black, are as clear as those of Texas.
202
Mr. Justice BLACK delivered the opinion of the Court.
203
This controversy involves the interests of all five Gulf States—Florida, Texas, Louisiana, Mississippi and Alabama—in the submerged lands off their shores. The Court heard the claims together, but treats them in two opinions. This opinion deals solely with Florida's claims. The result as to the other States is discussed in one opinion, at 363 U.S. 1, 80 S.Ct. 961. All the claims arise and are decided under the Submerged Lands Act of 1953.1
204
The Act granted to all coastal States the lands and resources under navigable waters extending three geographical miles seaward from their coastlines. In addition to the three miles, the five Gulf States were granted the submerged lands as far out as each State's boundary line either 'as it existed at the time such State became a member of the Union,' or as previously 'approved by Congress,' even though that boundary extended further than three geographical miles seaward. But in no event was any State to have 'more than three marine leagues into the Gulf of Mexico.'2 This suit was first brought against Louisiana by the United States, United States v. State of Louisiana, 350 U.S. 990, 76 S.Ct. 541, 100 L.Ed. 856, invoking our original jurisdiction under ART. III, § 2, cl. 2, of the Constitution, to determine whether Louisiana's boundary when it became a member of the Union extended three leagues or more into the Gulf, as Louisiana claimed, so as to entitle it to the maximum three-league grant of the Submerged Lands Act. After argument on the Government's motion for judgment against Louisiana, we suggested that the interests of all the Gulf States under the Act were so related, 'that the just, orderly, and effective determination' of the issues required that all those States be before the Court. United States v. State of Louisiana, 354 U.S. 515, 516, 77 S.Ct. 1373, 1 L.Ed.2d 1525. All are now defendants, each has claimed a three-league boundary and grant, which the United States denies, and the issues have been extensively briefed and argued by the parties. As stated, this opinion deals only with the United States-Florida controversy.
205
Florida contends that the record shows it to be entitled under the Act to a declaration of ownership of three marine leagues of submerged lands, because (1) its boundary extended three leagues or more seaward into the Gulf when it became a State, and (2) Congress approved such a three-league boundary for Florida after its admission into the Union and before passage of the Submerged Lands Act. Since we agree with Florida's latter contention, as to congressional approval, we find it unnecessary to decide the boundaries of Florida at the time it became a State.
206
Florida claims that Congress approved its three-league boundary in 1868, by approving3 a constitution submitted to Congress as required by a Reconstruction Act passed March 2, 1867. 14 Stat. 428. That constitution carefully described Florida's boundary on the Gulf of Mexico side as running from a point in the Gulf 'three leagues from the mainland' and 'thence northwestwardly three leagues from the land' to the next point.4 The United States concedes that from 1868 to the present day Florida has claimed by its constitutions a three-league boundary into the Gulf.5 The United States also admits that Florida submitted this constitution to Congress in 1868, but denies that the Gulf boundary it defined was 'approved' by Congress within the meaning of the Submerged Lands Act.6 This is the decisive question as between Florida and the United States.
207
The 1868 Florida Constitution was written and adopted by Florida pursuant to the congressional Act of March 2, 18677 as supplemented by a second Act of March 23, 1867.8 These Reconstruction Acts purported 'to provide for the more efficient government of the Rebel States,' including Florida. The States involved were divided into military districts and subject to strict military authority. Detailed provisions were made for registration of voters, election of delegates to constitutional conventions, the framing of constitutions 'in conformity with the provisions' of these Reconstruction Acts, and submission of the constitutions to the people of those States for their ratification and approval—all under the supervision and control of commanding generals. Constitutions so adopted were then to be 'submitted to Congress for examination and approval,' after which approval by Congress and after ratification of the Fourteenth Amendment by each State, each should be 'declared entitled to representation in Congress.' Florida's Constitution was written, considered and voted upon in the State in accordance with these statutory directions and under the eye and control of an Army general. When submitted to Congress it was much debated, and thereafter on June 25, 1868, another Act was passed authorizing the admission of Florida and other Southern States 'to Representation in Congress.'9 15 Stat. 73. The preamble to this 'Admission Act' declared that these States had adopted their constitutions 'in pursuance of the provisions' of the 1867 Acts, which Acts, as has been pointed out, required 'examination and approval' of the constitutions as a prerequisite to readmission of congressional representation. Thus by its own description, Congress not only approved Florida's Constitution which included three-league boundaries, but Congress in 1868 approved it within the meaning of the 1867 Acts. In turn, the approval the 1867 Acts required appears to be precisely the approval the 1953 Act contemplates.
208
The Government argues, however, that these readmission enactments did not contemplate and Congress did not make a general scrutiny of all the provisions of the state constitutions, but only that the constitutions had been duly adopted and were republican in form. The Government makes many references to debates which indicated that some Senators and Congressmen were satisfied with such a limited examination of the constitutions.10 Florida, on the other hand, points out many other remarks which indicated a much closer examination of the state constitutions.11
209
It is beyond doubt that the proposed constitutions were printed, then read, discussed, and amended in the Congress. For instance, the very 1868 bill that admitted Florida's congressional representatives contained a proviso rejecting certain parts of the Georgia Constitution.12 That at least some Congressmen scrutinized the constitutions to see if amendments were necessary is persuasively shown by the remarks of Congressman Thaddeus Stevens, set out below.13 Mr. Stevens was Chairman of the all-important Joint Committee on Reconstruction, and, because of his leading role as architect of the reconstruction plan finally adopted and carried out by Congress, has appropriately been called 'the Father of the Reconstruction.'14
210
The voluminous references to the Reconstruction debates fail to show us precisely how closely the Southern States' Reconstruction Constitutions were examined. We cannot know, for sure, whether all or any of the Congressmen or Senators gave special attention to Florida's boundary description. We are sure, however, that this constitution was examined and approved as a whole, regardless of how thorough that examination may have been, and we think that the 1953 Submerged Lands Act requires no more than this. Moreover, the Hearings and the Reports on the Submerged Lands Act show, as the Government's brief concedes, that those who wrote into that measure a provision whereby a State was granted up to three leagues if such a boundary had been 'heretofore approved by Congress,' had their minds specifically focused on Florida's claim based on submission of its 1868 Constitution to Congress. When Florida's claims were mentioned in the hearings it was generally assumed that Congress had previously 'approved' its threeleague boundaries.15 The Senate Report on a prior bill, set forth as a part of the report on the 1953 Act, pointed out that 'In 1868 Congress approved the Constitution of Florida, in which its boundaries were defined as extending 3 marine leagues seaward and a like distance into the Gulf of Mexico.' S.Rep.No. 133, 83d Cong., 1 Sess. 64-65.16 The language of the Submerged Lands Act was at least in part designed to give Florida an opportunity to prove its right to adjacent submerged lands so as to remedy what the Congress evidently felt had been an injustice to Florida. Upon proof that Florida's claims met the statutory standard—'boundaries * * * heretofore approved by the Congress'—the Act was intended to 'confirm' and 'restore' the three-league ownership Florida had claimed as its own so long and which claim this Court had in effect rejected in United States v. State of Texas, 339 U.S. 707, 70 S.Ct. 918, 94 L.Ed. 1221; United States v. State of Louisiana, 339 U.S. 699, 70 S.Ct. 914, 94 L.Ed. 1216; and United States v. State of California, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889. As previously shown, Congress in 1868 did approve Florida's claim to a boundary three leagues from its shores. And, as we have held, the 1953 Act was within the power of Congress to enact. State of Alabama v. State of Texas, 347 U.S. 272, 74 S.Ct. 481, 98 L.Ed. 689. See also United States v. State of California, 332 U.S. 19, 27, 67 S.Ct. 1658, 1663, 91 L.Ed. 1889.
211
We therefore deny the United States' motion for judgment. We hold that the Submerged Lands Act grants Florida a three-marine-league belt of land under the Gulf, seaward from its coastline, as described in Florida's 1868 Constitution. The cause is retained for such further proceedings as may be necessary more specifically to determine the coastline, fix the boundary and dispose of all other relevant matters. The parties may submit an appropriate form of decree giving effect to the conclusions reached in this opinion. It is so ordered.
212
The United States' motion for judgment denied.
213
The CHIEF JUSTICE and Mr. Justice CLARK took no part in the consideration or decision of this case.
214
Mr. Justice FRANKFURTER, whom Mr. Justice BRENNAN, Mr. Justice WHITTAKER and Mr. Justice STEWART join, concurring.*
215
Considering the variety of views evoked by these cases, I deem it appropriate to add a few words to the two Court opinions which I have joined.
216
The one thing which I take to be incontestable is that Congress did not, by the Submerged Lands Act of 1953, make an outright grant to any of the Gulf States in excess of three miles. Congress only granted to each of these States the opportunity to establish at law that it possessed a boundary in excess of three miles, either by virtue of possession of such a boundary at the time of its admission to the Union or by virtue of congressional 'approval' of such a boundary prior to the enactment of the Submerged Lands Act. A Gulf State that can successfully establish such a judicially ascertainable fact is entitled to a grant of the submerged lands beyond three miles to a distance of the lesser of three leagues or of the boundary so established. Congress, in the Submerged Lands Act itself, did not determine the existence of a boundary for any State beyond three miles, either explicitly or by implied approval of a claim presented to it in the course of the legislative process. Nor of course did Congress vest this Court with determination of a claim based on 'equity' in the layman's loose sense of the term, for it could not. Congress may indulge in largess based on considerations of policy; Congress cannot ask this Court to exercise benevolence on its behalf.
217
There is no foundation in the Act of 1953 or its legislative history for the view that particularized, express approval of a State's boundary claim by a prior Congress is required to make a defined boundary the measure of the grant. To the contrary, in the case of Florida, authoritative legislative history makes it perfectly clear that the very question deliberately preserved by the Act of 1953 was whether congressional approval of the new Florida Constitution in the Reconstruction legislation of 1867 1868, by which Florida was restored to full participation in the Union, amounted to an approval of the three-league boundary which that constitution explicitly set forth.* I sustain Florida's claim because I find that its boundary was so approved.
218
The proper construction of the effect of congressional 'approval' of the Florida Reconstruction constitution presents problems quite different from those stirred by the constitutional controversy and its resulting problems that are compendiously known as Reconstruction. See Lincoln's last public address, April 11, 1865. 8 Basler, The Collected Works of Abraham Lincoln, 399. The readjustment of the relationship between the States that had remained in the Union and those that had seceded presented major issues not only for the political branches of the Government, the President and the Congress, but also for this Court. Insofar as the perplexing and recalcitrant problems of Reconstruction involved legal solutions, the evolution of constitutional doctrine was an indispensable element in the process of healing the wounds of the sanguinary conflict. It was in aid of that process that this Court formulated the doctrine expressed in the famous sentence in State of Texas v. White: 'The Constitution, in all its provisions, looks to an indestructible Union, composed of indestructible States.' 7 Wall. 700, 725, 19 L.Ed. 277.
219
This theory served as a fruitful means for dealing with the problems for which it was devised. It is unrelated to the question now before us, namely, whether, when it 'approved' as an entirety the Florida Constitution as a condition to the recognition of that State's full membership in the Union, Congress exercised its undoubted power to approve the seaward boundary claim contained within it. It is in essence the contention of the United States that approval could only have been manifested explicitly, that Congress must have ratified the boundary provision in so many words, either expressly in the Reconstruction Acts, or by an authoritative gloss upon them in a committee report or a speech on the floor by a responsible chairman. But in these matters we are dealing with great acts of State, not with fine writing in an insurance policy. Florida was directed to submit a new constitution for congressional approval as a prerequisite for the exercise of her full rights in the Union of States and the resumption of her responsibilities. In this context it would attribute deceptive subtlety to the Congresses of 1867—1868 to hold that it is necessary to find a formal, explicit statement by them, whether in statutory text or history, that the boundary claim, as submitted in Florida's new constitution, was duly considered and sanctioned, in order to find 'approval' of that claim.
220
Mr. Justice HARLAN, dissenting.
221
It is with regret that I find myself unable to agree that Florida has made a case for 'three-league' rights under the Submerged Lands Act. As shown in the Court's opinion relating to the other States involved in the litigation (363 U.S. at pages 16 36, 80 S.Ct. at pages 971—982), a state seaward boundary satisfying the requirements of the Submerged Lands Act must be one which by virtue of Congressional action would have been legally effective to carry, as between State and Nation, submerged land rights under the Pollard rule, as Congress conceived that rule to have been prior to this Court's decision in the California case, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889. That test supplies the meaning and content not only of the phrase 'boundaries * * * as they existed at the time such State became a member of the Union,' but also of the phrase 'boundaries * * * as heretofore approved by the Congress,' contained in § 2 of the Submerged Lands Act (363 U.S. at page 10, 80 S.Ct. at page 968, note 7). Florida must satisfy that test if it is to prevail in this case.
222
The Court's Florida opinion conceives the issue to be whether Congress in 1868 made a 'general scrutiny of all the provisions of' Florida's Constitution, and states that the Submerged Lands Act requires only that it have been 'examined and approved as a whole.' The concurring opinion asserts that the relevant inquiry is 'whether congressional approval of the new Florida Constitution * * * amounted to an approval of the three-league boundary which that constitution explicitly set forth.' In my view, neither formulation adequately characterizes the nature of the question left by the Submerged Lands Act to this Court. It may be conceded that Congress scrutinized all the provisions of Florida's Constitution and that by accepting the Constitution it, in an abstract sense, approved the boundary provision. The further and controlling inquiry that must be made is whether the legal effect of such action was to establish a valid three-league boundary for Florida. If not, Florida would not have owned the submerged lands to that distance under Congress' concept of the Pollard rule, and it would therefore be entitled to no better rights under the Submerged Lands Act. On neither branch of its claims do I believe that Florida's showing measures up to that standard.
I.
223
My difficulty with Florida's 'readmission' claim begins with the proposition that a State relying on a readmission boundary stands on quite a different legal footing than one relying on an original admission boundary. In the latter instance the fixing of a boundary is a necessary incident of Congress' power to admit new States. A newly admitted State, in the absence of an express fixation of its boundary by the Congressional act of admission or an articulated rejection of its preadmission boundary, may, I think, rely on a presumed Congressional purpose to adopt whatever boundary the political entity had immediately prior to its admission as a State.1 That would seem to be the effect of State of New Mexico v. State of Colorado, 267 U.S. 30, 45 S.Ct. 202, 69 L.Ed. 499, and State of New Mexico v. State of Texas, 275 U.S. 279, 48 S.Ct. 126, 72 L.Ed. 280; 276 U.S. 557, 48 S.Ct. 437, 72 L.Ed. 698.2
224
Different considerations, however, obtain in the case of a State readmitted to 'representation in Congress' after the Civil War. Such a State renounced the Union with boundaries already fixed by Congress at the time of original admission. When it was restored to full participation in the Union, there is no reason to suppose its territorial limits would not remain the same. So much indeed finds sound support in the constitutional doctrines evolved in the so-called reconstruction cases, even though they related to different problems arising out of the Civil War. See State of Texas v. White, 7 Wall. 700, 726, 19 L.Ed. 227; White v. Hart, 13 Wall. 646, 649—652, 20 L.Ed. 685; Gunn v. Barry, 15 Wall. 610, 623, 21 L.Ed. 212; Keith v. Clark, 97 U.S. 454, 461, 24 L.Ed. 1071. Since, as will be shown later (80 S.Ct. at page 1036), Florida renounced the Union with a seaward boundary no greater than three miles, the issue here is whether upon readmission Congress changed that boundary to three leagues. Unlike the situation at original admission, where the necessity of fixing some boundary for a newly admitted State leads readily to the presumption of Congressional approval of a tendered preadmission boundary, no similar presumption arises in connection with an alleged change in a state boundary already fixed by Congress.
225
After a painstaking examination of the legislative materials I can find no evidence whatever that the Congress intended to change Florida's seaward boundary from one not in excess of three miles to one of three leagues when the State was readmitted to representation in 1868. Certainly the Act of readmission (Act of June 25, 1868, 15 Stat. 73), upon which Florida relies, affords no basis for a claim that Congress expressly approved the State's three-league boundary provision.3 The statute refers in no way to boundaries; it does not even undertake to approve Florida's Constitution, let alone the boundaries described therein; and it is entitled merely as 'An Act to admit * * * Florida, to Representation in Congress,' not as an act to admit it to the Union. Cf. White v. Hart, supra, 13 Wall. at page 652.4
226
Nor can I find any basis in the legislative record for a conclusion that Congress impliedly changed Florida's boundary. The Congressional debates and reports may be searched in vain for a single reference—even a causal one—to the boundaries of any of the readmitted States. The preamble of the Act of June 25, 1868, and the Congressional debates affirmatively show that all with which Congress was concerned was whether the constitutions of the readmitted States had been validly adopted and were republican in structure, and, in a few instances, whether they contained provisions in palpable violation of the Federal Constitution.5 No territorial questions at all appear to have figured in the debates. In these circumstances the case of State of Virginia v. State of Tennessee, 148 U.S. 503, 13 S.Ct. 728, 37 L.Ed. 537, upon which Florida relies in support of its argument as to implied approval, is quite inapposite. There the two States had made a compact with respect to the boundary between them. Subsequently Congress adopted the line so established in setting up districts for judicial, revenue, election, and appointive purposes. It was held that Congress had thereby impliedly approved the interstate compact. Id., 148 U.S. 521—522, 13 S.Ct. 735—736. In the present instance we have no affirmative action by Congress respecting the 1868 proffered Florida boundary in any way comparable to that in this earlier case.
227
Nor can a purpose to change Florida's boundary be inferred from the bare context of the Congressional action. The constitutional area in which the Congress was moving in 1868 should not be forgotten. Congress was not undertaking to exercise its power to fix state boundaries incident to the admission of new States. Rather, it was engaged in 're-establishing the broken relations of the State(s) with the Union,' and in satisfying itself that the constitutions of the States lately in rebellion had been validly adopted and were republican in form, all pursuant to Congress' constitutional obligation to guarantee to each State a republican form of government. See State of Texas v. White, supra, 7 Wall. 727—728. This is not to say that Congress could not at the same time have changed any State's original admission boundary, but only to raise the question whether it in fact did so. While the exercise of a particular constitutional power does not of course preclude resort to others, the nature of the power exerted in 1868 does seem to me to negative the idea that Congress also purported to exercise its power to change Florida's boundary.6
228
In the last analysis I think that Florida's claim here could only be sustained on the view that Congress was under a duty to speak with reference to the State's boundary provision, failing which Congress' silence should as a matter of law be deemed the equivalent of acceptance of the provision. In light of factors already adverted to I cannot perceive how such a duty could be found to exist. To uphold Florida's claim on any such theory would be novel doctrine indeed, particularly where property rights of the United States are involved. Cf. United States v. State of California, supra, 67 U.S. at pages 39—40, 67 S.Ct. at pages 1668 1669. Moreover, to say that such a duty existed seems to me to misconceive the nature of the 'approval' of the constitutions of the seceded States contemplated by the reconstruction statutes. Such approval was not of the sort involved in the case of a constitution submitted to a constitutional convention for adoption or ratification, where the failure to reject a particular provision would be equivalent to its acceptance. Instead, the whole tenor of the reconstruction debates clearly shows that all that was meant by 'approval' was that before any seceded State was restored to representation, Congress must be satisfied that its constitution had been properly adopted and was republican in its general structure. That kind of a requirement of 'approval' does not lend itself to the conclusion that this Court would be attributing to the 1868 Congress a 'deceptive subtlety' unless it regards silence upon Florida's boundary provision as tantamount to its acceptance. Especially so, when that provision was quite outside the realm of matters upon which Congress had been called upon to act. 'Great acts of State' these events of the reconstruction period were indeed, but I do not think they can now be taken as having encompassed acceptance of the territorial pretensions of any particular State.
229
In sum, I believe the conclusion inescapable that all that Congress can properly be taken to have done in readmitting Florida was to declare that nothing in the State's new constitution disqualified its Senators and Representatives from taking their seats in Congress. While such action may in some abstract sense have constituted 'approval' of Florida's boundary provision, since it was included in its constitution, in my opinion it did not represent the sort of advertent, affirmative Congressional action which legally would have been necessary to effectuate an actual change in Florida's original admission boundary. It therefore did not 'approve' Florida's three-league boundary within the only sense contemplated by the Submerged Lands Act.
II.
230
It is clear that the State fares no better on its alternative claim, based upon its original admission boundary. Since the Court does not reach this claim, it will be enough to state briefly the reasons which require its rejection.
231
The territory which now comprises the State of Florida was originally acquired by England from France and Spain by the Treaty of Paris of February 10, 1763.7 By the proclamation of October 7, 1763,8 King George III divided the acquired territory into East and West Florida. East Florida was declared to be 'bounded to the westward by the Gulf of Mexico and the Apalachicola river * * * and to the east and south by the Atlantic ocean and the gulf of Florida, including all islands within six leagues of the sea coast.' West Florida was declared to be 'bounded to the southward by the gulf of Mexico, including all islands within six leagues of the coast, from the river Apalachicola to Lake Pontchartrain. * * *'
232
By the Treaty of Versailles of September 3, 1783, England ceded to Spain the territory described merely as 'East Florida, as also West Florida.'9 By the Treaty of Amity, Settlement, and Limits of February 22, 1819, Spain ceded to the United States 'all the territories which belong to (Spain), situated to the eastward of the Mississippi, known by the name of East and West Florida.'10 Both the Act establishing Florida as a Territory,11 and the Act admitting it to the Union,12 describe it in terms of the territories of East and West Florida ceded by the Treaty of 1819.
233
Florida contends that the provision in King George's proclamation relating to all islands within six leagues of the coast was an assertion of a territorial boundary at that distance along the entire coast, and that subsequent conveyances necessarily incorporated that description. The opinion of the Court relating to Louisiana, Mississippi, and Alabama disposes of that contention (363 U.S. at pages 66—82, 80 S.Ct. at pages 997 1006), and what has been said there need not be repeated here.
234
Florida also relies on many of the same treaties as does Louisiana to show that this country's predecessors in title claimed large amounts of territorial sea. Without elaborating on what has already been said (363 U.S. at pages 73—74, 80 S.Ct. at pages 1001, 1002), it is sufficient to point out here that these treaties did not constitute territorial assertions, but merely established obligations between the parties of a special and limited nature, and varied so widely in the disstances specified as not to be of any value whatever in showing a uniform practice.
235
I would grant the Government's motion for judgment as to Florida.
1
The suit was originally instituted against Louisiana alone. Pursuant to the order of this Court the suit was thereafter broadened to include the other defendant States. 354 U.S. 515, 77 S.Ct. 1373, 1 L.Ed.2d 1525.
2
See note 140, infra.
3
In 1945, the United States had proclaimed, as against other nations, its jurisdiction and control over such submerged lands to the edge of the Continental Shelf. Presidential Proclamation No. 2667, Sept. 28, 1945, 10 Fed.Reg. 12303, 59 Stat. 884. The accompanying Executive Order provided that '(n)either this Order nor the aforesaid proclamation shall be deemed to affect the determination by legislation or judicial decree of any issues between the United States and the several states, relating to the ownership or control of the subsoil and sea bed of the continental shelf within or outside of the three-mile limit.' Exec.Order No. 9633, 10 Fed.Reg. 12305, 5 U.S.C.A. § 485 note.
The 'continental shelf,' in the geological sense, is the gently sloping plain which underlies the seas adjacent to most land masses, extending seaward from shore to the point at which there is a marked increase in the gradient of the decline and where the continental slope leading to the true ocean bottom begins. In the Gulf of Mexico, the edge of the Continental Shelf, as so defined, lies as much as 200 miles from shore in some places. Christopher, The Outer Continental Shelf Lands Act: Key to a New Frontier, 6 Stan.L.Rev. 23, 24; H.R.Rep. No. 215, 83d Cong., 1st Sess. 6.
4
1937—1938, 75th Congress:
S. 2164, S.J.Res. 208. Both would have confirmed the rights in the Federal Government. S.J.Res. 208 was passed by the Senate but not by the House.
1939, 76th Congress, 1st Session:
H.J.Res. 176, H.J.Res. 181, S.J.Res. 24, S.J.Res. 83, S.J.Res. 92. All would have confirmed the rights in the Federal Government.
1945—1946, 79th Congress:
H.J.Res. 118 and 17 similar bills, H.J.Res. 225, S.J.Res. 48. All would have quitclaimed rights to the States within their bound-
aries. H.J.Res. 225 was passed by both Houses but vetoed by President Truman.
1948, 80th Congress, 2d Session:
H.R. 5992 and S. 1988 (quitclaim measures); S. 2222, H.R. 5890, and S. 2165 (to confirm States' rights in lands underlying inland waters and the Federal Government's rights in lands underlying the marginal sea). H.R. 5992 was passed by the House.
1949—1950, 81st Congress:
1st Sess: H.R. 5991, H.R. 5992 ('compromise' bills); S. 155, S. 1545 (quitclaim measures); S. 923, S. 2153, H.R. 354 (to confirm States' rights in lands beneath inland waters and Federal Government's rights in lands beneath marginal seas); S. 1700 (to establish a federal reserve).
2d Sess: H.R. 8137 (quitclaim measure); S.J.Res. 195 (interim management bill).
1951—1952, 82d Congress:
S.J.Res. 20, H.J.Res. 131, H.J.Res. 274 (interim management bills); H.R. 4484, S. 940 (quitclaim measures). H.R. 4484 was passed by the House in the 1st Session; S.J.Res. 20 was passed by the Senate after amending it by substituting therefor S. 940, in the 2d Session. S.J.Res. 20 as amended prevailed in conference, but was vetoed by President Truman.
1953, 83d Congress, 1st Session:
H.R. 2948 and 40 other bills, resulting in drafting of H.R. 4198 by Committee, S.J.Res. 13 (quitclaim measures); H.R. 5134, S. 1901 (to provide for administration of submerged lands seaward of those granted to States and to the edge of Continental Shelf). S.J.Res. 13 became the Submerged Lands Act, and S. 1901 became the Outer Continental Shelf Lands Act.
5
Section 3 provides:
'(a) It is hereby determined and declared to be in the public interest that (1) title to and ownership of the lands beneath navigable waters within the boundaries of the respective States, and the natural resources within such lands and waters, and (2) the right and power to manage, administer, lease, develop, and use the said lands and natural resources all in accordance with applicable State law be, and they are hereby, subject to the provisions hereof, recognized, confirmed, established, and vested in and assigned to the respective States or the persons who were on June 5, 1950, entitled thereto under the law of the respective States in which the land is located, and the respective grantees, lessees, or successors in interest thereof;
'(b)(1) The United States hereby releases and relinquishes unto said States and persons aforesaid, except as otherwise reserved herein, all right, title, and interest of the United States, if any it has, in and to all said lands, improvements, and natural resources; (2) the United States hereby releases and relinquishes all claims of the United States, if any it has, for money or damages arising out of any operations of said States or persons pursuant to State authority upon or within said lands and navigable waters * * *.'
6
Nine marine, nautical, or geographic miles, or approximately 101/2 land, statute or English miles.
7
Section 2 provides:
'(a) The term 'lands beneath navigable waters' means—
'(2) all lands permanently or periodically covered by tidal waters up to but not above the line of mean high tide and seaward to a line three geographical miles distant from the coast line of each such State and to the boundary line of each such State where in any case such boundary as it existed at the time such State became a member of the Union, or as heretofore approved by Congress extends seaward (or into the Gulf of Mexico) beyond three geographical miles * * *
'(b) The term 'boundaries' includes the seaward boundaries of a State or its boundaries in the Gulf of Mexico or any of the Great Lakes as they existed at the time such State became a member of the Union, or as heretofore approved by the Congress, or as extended or confirmed pursuant to section 4 hereof but in no event shall the term 'boundaries' or the term 'lands beneath navigable waters' be interpreted as extending from the coast line more than three geographical miles into the Atlantic Ocean or the Pacific Ocean, or more than three marine leagues into the Gulf of Mexico;
'(c) The term 'coast line' means the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters * * *.'
8
Section 4 provides:
'The seaward boundary of each original coastal State is hereby approved and confirmed as a line three geographical miles distant from its coast line * * *. Any State admitted subsequent to the formation of the Union which has not already done so may extend its seaward boundaries to a line three geographical miles distant from its coast line. * * * Any claim heretofore or hereafter asserted either by constitutional provision, statute, or otherwise, indicating the intent of a State so to extend its boundaries is hereby approved and confirmed, without prejudice to its claim, if any it has, that its boundaries extend beyond that line. Nothing in this section is to be construed as questioning or in any manner prejudicing the existence of any State's seaward boundary beyond three geographical miles if it was so provided by its constitution or laws prior to or at the time such State became a member of the Union, or if it has been heretofore approved by Congress.'
9
Section 6(a) provides:
'The United States retains all its navigational servitude and rights in and powers of regulation and control of said lands and navigable waters for the constitutional purposes of commerce, navigation, national defense, and international affairs, all of which shall be paramount to, but shall not be deemed to include, proprietary rights of ownership, or the rights of management, administration, leasing, use, and development of the lands and natural resources which are specifically recognized, confirmed, established, and vested in and assigned to the respective States and others by section 3 of this Act.'
10
Section 9 provides:
'Nothing in this Act shall be deemed to affect in any wise the rights of the United States to the natural resources of that portion of the subsoil and seabed of the Continental Shelf lying seaward and outside of the area of lands beneath navigable waters, as defined in section 2 hereof, all of which natural resources appertain to the United States, and the jurisdiction and control of which by the United States is hereby confirmed.'
Later in the same year, Congress passed the Outer Continental Shelf Lands Act, 67 Stat. 462, 43 U.S.C. §§ 1331—1343, 43 U.S.C.A. §§ 1331—1343, which provides in detail for federal exploitation of the submerged lands of the Continental Shelf beyond those granted to the States by the Submerged Lands Act.
11
See S.Rep. No. 133, 83d Cong., 1st Sess., pt. 2 (minority views), 6.
12
This holding was approved in a considerable number of subsequent cases. See, e.g., Smith v. Maryland, 18 How 71, 74, 15 L.Ed. 269; Mumford v. Wardwell, 6 Wall. 423, 436, 18 L.Ed. 756; Weber v. Board of Harbor Commissioners, 18 Wall. 57, 65—66, 21 L.Ed. 798; McCready v. Virginia, 94 U.S. 391, 394, 24 L.Ed. 248; Shively v. Bowlby, 152 U.S. 1, 26—28, 14 S.Ct. 548, 557—558, 38 L.Ed. 331; Manchester v. Massachusetts, 139 U.S. 240, 259—260, 11 S.Ct. 559, 562—563, 35 L.Ed. 159; United States v. Mission Rock Co., 189 U.S. 391, 404, 23 S.Ct. 606, 608, 47 L.Ed. 865; State of Louisiana v. Mississippi, 202 U.S. 1, 52, 26 S.Ct. 408, 422, 50 L.Ed. 913; The Abby Dodge, 223 U.S. 166, 174, 32 S.Ct. 310, 312, 56 L.Ed. 390; Borax Consolidated Ltd., v. Los Angeles, 296 U.S. 10, 15—16, 56 S.Ct. 23, 25—26, 80 L.Ed. 9. See also Martin v. Waddell, 16 Pet. 367, 410, 10 L.Ed. 997.
13
This Court in the California case, supra, 332 U.S. at page 36, 67 S.Ct. at page 1667, stated that in following the Pollard case, it had previously used language strong enough to indicate that the Court then believed that states not only owned tidelands and soil under navigable inland waters, but also owned soils under all navigable waters within their territorial jurisdiction, whether inland or not.'
14
See S.Rep. No. 133, 83d Cong., 1st Sess. 21, U.S.Code Cong. and Adm.News 1953, p. 1385 et seq.
15
One English, statute, or land mile equals approximately .87 marine, nautical, or geographical mile. The conventional '3-mile limit' under international law refers to three marine miles, or approximately 3.45 land miles.
16
See note 4, 363 U.S. 6, 80 S.Ct. 966. The legislative history of all the bills considered prior to enactment of the Submerged Lands Act in 1953 is directly relevant to the latter Act, since the purposes and phraseology of such bills, and the objections raised against them were substantially similar. During the hearings on the final bills, all prior hearings on predecessor bills were expressly incorporated into the record, see Hearings before Subcommittee No. 1 of the House Committee on the Judiciary, 83d Cong., 1st Sess., on H.R. 2948 and similar bills 1—2 (hereinafter cited as 1953 House hearings); Hearings before the Senate Committee on Interior and Insular Affairs on S.J.Res. 13 and other bills 6—8 (hereinafter cited as 1953 Senate Hearings), and similar references to past hearings and debates were made on the floor of Congress, see 99 Cong.Rec. 2554, 2613, 4097.
17
H.R.Rep. No. 1778, 80th Cong., 2d Sess., to accompany H.R. 5992, at 1, 2, 3, 16 (Apr. 21, 1948); 'H.R. 5992 is, in substance, the same as numerous bills introduced in the House. * * * (T)he aforementioned bills (were) introduced in the Congress to preserve the status quo as it was thought to be prior to the California decision * * * to confirm and establish the rights and claims of the 48 States, long asserted and enjoyed with the approval of the Federal Government, to the lands and resources beneath navigable waters within their boundaries * * *. The repeated assertions by our highest Court for a period of more than a century of the doctrine of State ownership of all navigable waters, whether inland or not, and the universal belief that such was the settled law, have for all practical purposes established a principle which the committee believes should be a matter of policy be recognized and confirmed by Congress as a rule of property law.'
S.Rep. No. 1592, 80th Cong., 2d Sess., to accompany S. 1988, at 17—18 (June 10, 1948), after noting that the legal profession had long believed that the States owned the lands under navigable waters within their territorial jurisdiction, went on to comment:
'The evidence is conclusive that not only did our most eminent jurists so believe the law to be, but such was the belief of lower Federal court jurists and State supreme court jurists as reflected by more than 200 opinions. The pronouncements were accepted as the settled law by lawyers and authors of leading legal treatises.
'The present Court in the California decision did not expressly overrule these prior Supreme Court opinions but, in effect, said that all the eminent authorities were in error in their belief.
'For the first time in history the Court drew a distinction between the legal principles applicable to bays, harbors, sounds, and other inland waters on the one hand, and to submerged lands lying seaward of the low-water mark on the other, although it appears the Court had ample opportunity to do so in many previous cases, but failed or refused to draw such distinction. In the California decision the
Court refused to apply what it termed 'the old inland water rule' to the submerged coastal lands; however, historically speaking, it seems clear that the rule of State ownership of inland waters is, in fact, an offshoot of the marginal sea rule established much earlier.'
H.R.Rep. No. 695, 82d Cong., 1st Sess., to accompany H.R. 4484, at 5 (July 12, 1951):
'Title II merely fixes as the law of the land that which, throughout our history prior to the Supreme Court decision in the California case in 1947, was generally believed and accepted to be the law of the land; namely, that the respective States are the sovereign owners of the land beneath navigable waters within their boundaries and of the natural resources within such lands and waters. Therefore, title II recognizes, confirms, vests, and establishes in the States the title to the submerged lands, which they have long claimed, over which they have always exercised all the rights and attributes of ownership.'
S.Rep. No. 133, 83d Cong., 1st Sess., to accompany S.J.Res. 13, at 7—8 (Mar. 27, 1953). U.S.Code Cong. and Adm.News 1953, page 1481:
'All of these areas of submerged lands have been treated alike in this legislation because they have been possessed, used, and claimed by the States under the same rule of law, to wit: That the States own all lands beneath navigable waters within their respective boundaries. Prior to the California decision, no distinction had been made between lands beneath inland waters and lands beneath seaward waters so long as they were within State boundaries.
'The rule was stated by the Supreme Court in the early case of Pollard v. Hagan * * *.
'The purpose of this legislation is to write the law for the future as the Supreme Court believed it to be in the past—that the States shall own and have proprietary use of all lands under navigable waters within their territorial jurisdiction, whether inland or seaward, subject only to the governmental powers delegated to the United States by the Constitution.'
18
For example, the very first 'quitclaim' bill introduced in Congress—H.J.Res. 118, 79th Cong., 1st Sess., provided:
'Resolved * * * That, in consideration of the premises, the United States of America hereby releases, premises, and quitclaims all right, title, interest, claim, or demand of the United States of America in and to all lands beneath tidewaters and all lands beneath navigable waters within the boundaries of each of the respective States * * *.'
1. Confirmation of All Boundaries at Three Miles.
19
See, e.g., 91 Cong.Rec. 8867 (remarks of Representative Gearhart); 92 Cong.Rec. 10310 (remarks of Representative Sumners). See also 92 Cong.Rec. 9519 (remarks of Senator Overton).
20
H.J.Res. 118, 79th Cong., 1st Sess.; H.J.Res. 225, 79th Cong., 1st Sess.; H.R. 5992, 80th Cong., 2d Sess.; S. 1988, 80th Cong., 2d Sess. H.J.Res. 118 and H.J.Res. 225 used the term 'lands beneath tidewaters' to denote the lands beneath the navigable waters of the marginal sea.
21
See H.R.Rep. No. 927, 79th Cong., 1st Sess., to accompany H.J.Res. 225, at 2 (July 17, 1945): 'The ownership by the States of these lands as above stated is coextensive with the States' boundaries, which in the case of the coastal States is in no instance less than 3 miles from the coast line.' 92 Cong.Rec. 9541 (remarks of Senator Cordon): '(T)he joint resolution is limited to those submerged lands within the boundaries of the several States, with this exception, that if there should be—and there conceivably cannot be a State whose boundary did not go 3 miles at sea—then it would cover 3 miles at sea.'
22
California Constitution of 1849, Art. XII, § 1, West's Ann. California claimed that this boundary was ratified by the Act admitting it to the Union. 9 Stat. 452. See 92 Cong.Rec. 9614 (remarks of Senator Knowland). Attorney General Clark testified that six of the 11 original coastal States had not yet expressly claimed a three-mile boundary in the marginal sea, and that the other five had done so unilaterally long subsequent to the formation of the Union—Massachusetts in 1859 (see Stat.1859, c. 289, as amended, Mass.Gen.Laws Ann. c. 1, § 3), Rhode Island in 1872, (R.I., Gen.Stat.1872, c. 1, § 1), New Jersey in 1906 (see N.J.Stat.Ann., Tit. 40, § 18—5), New Hampshire in 1901 (see N.H.Laws 1901, c. 115), and Georgia in 1916 (see Acts 1916, p. 29, Ga.Code Ann. § 15—101).
23
See 92 Cong.Rec. 9524—9526 (remarks of Senator Donnell); Joint Hearings before the Committees on the Judiciary of the Congress on S.1988 and similar House bills, 80th Cong., 2d Sess. 885—895 (hereinafter cited as 1948 Joint Hearings).
24
Id., 93—95, 884—886.
25
Because of fears that this permission to extend boundaries would not protect grantees of the original States who had received their grants at a time when the State had not yet expressly extended its boundaries, a provision was subsequently inserted as the first sentence of § 4 of the present Act, absolutely confirming the boundary of each original State at three miles. See 1953 Senate Hearings, pt. II (Exec. Sess.), 1316; 99 Cong.Rec. 2697. The last sentence of § 4 was first inserted without explanation in H.R. 8137, 81st Cong., 2d Sess., and was carried forward as part of S.J.Res. 20, 82d Cong., 2d Sess., as it was amended and passed by Congress and vetoed by President Truman. See 98 Cong.Rec. 2886.
26
See 91 Cong.Rec. 8858; 92 Cong.Rec. 10310. See also Manchester v. Com. of Massachusetts, 139 U.S. 240, 257, 258, 11 S.Ct. 559, 562, 35 L.Ed. 159.
27
See, e.g., 98 Cong.Rec. 2884—2885 (remarks of Senator Holland). See also H.R.Rep. No. 927, 79th Cong., 1st Sess. 2.
28
See 98 Cong.Rec. 3351 (remarks of Senator Holland); 1953 House Hearings 222 (remarks of Attorney General Brownell); 99 Cong.Rec. 2757, 2922—2923, 4095 (remarks of Senator Holland). Solicitor General Perlman, while rejecting the idea that the existence of a seaward boundary entitled the State to ownership of the underlying lands, stated that California was entitled to a boundary for other purposes of three nautical miles, as opposed to the three English miles asserted by its constitution, because of the federal three-mile policy. Hearings before the Senate Committee on Interior and Insular Affairs, on S.J.Res. 20 and S. 940, 82d Cong., 1st Sess. 40 (hereinafter cited as 1951 Senate Hearings).
29
See 92 Cong.Rec. 9541 (remarks of Senator Cordon); id., 9619 (remarks of Senator Capehart); 99 Cong.Res. 3265 (remarks of Senator Hill).
30
Leander I. Shelley, counsel for the port authorities, whose proposal that all States be permitted to extend their boundaries to three miles was adopted by the Committee, said: 'My position is that prior to the decision of the Supreme Court in the California case, practically everybody concerned * * * was under the impression that all the coastal States owned the land for 3 miles out. * * *
'Whether their failure to be in that position is because of a title question or boundary question is immaterial to us. Our position is that they should be restored to where they thought they were.' 1948 Joint Hearings 894. See also 92 Cong.Rec. 9515 9516 (remarks of Senator O'Mahoney); id., 9519 (remarks of Senator Overton); 99 Cong.Rec. 4095 (remarks of Senator Holland).
31
See 98 Cong.Rec. 3351—3352 (remarks of Senator Holland).
2. Boundaries Beyond Three Miles.
32
E.g., 91 Cong.Rec. 8867; 92 Cong.Rec. 9518; Hearings before the Senate Committee on Interior and Insular Affairs on S. 155, S. 923, S. 1545, S. 1700, and S. 2153, 81st Cong., 1st Sess. 131 (hereinafter cited as 1949 Senate Hearings); 1953 Senate Hearings 212—234; 99 Cong.Rec. 2620, 2830, 4171—4175.
33
E.g., 92 Cong.Rec. 9516; 99 Cong.Rec. 2621, 2752, 4095 4096.
34
See 1949 Senate Hearings 187; 98 Cong.Rec. 3352; 1953 Senate Hearings 47—48, 536, 1093, 1115; 99 Cong.Rec. 2896.
35
Hearings before the Senate Judiciary Committee on S.J.Res. 48 and H.J.Res. 225, 79th Cong., 2d Sess. 228—230 (hereinafter cited as 1946 Senate Hearings); 1951 Senate Hearings 420.
36
The structure of § 4 was so explained by Senators Cordon, Holland, and Long. 1953 Senate Hearings, pt. II (Exec. Sess.), 1317—1318; 99 Cong.Rec. 2621, 2698, 4095—4096.
37
92 Cong.Rec. 9441—9442, 9516; 1953 Senate Hearings 48—49; id., pt. II (Exec. Sess.), 1318, 1414—1415; 99 Cong.Rec. 2558 2559, 2620—2622, 2632—2633, 2694—2695, 2703, 2746, 2754—2755, 2757, 2896—2897, 2933, 4095—4096, 4116.
38
98 Cong.Rec. 3347, 3350 (Senators Connally and Holland); 1953 House Hearings 181, 195 (Secretary of the Interior McKay); 1953 Senate Hearings 957 (Attorney General Brownell); letter from President Eisenhower to Jack Porter, Republican National Committeeman, Dec. 4, 1957, reported in Houston Post, Dec. 7, 1957, § 1, pp. 1—2; letter from President Eisenhower to Senator Anderson, Apr. 24, 1953, reprinted in 99 Cong.Rec. 3865; letter from President Eisenhower to Price Daniel, Governor of Texas, Nov. 7, 1957, printed at p. 294 of Texas' brief.
39
H.J.Res. 118, 79th Cong., 1st Sess.; H.J.Res. 225, S.J.Res. 48, 79th Cong., 2d Sess.; S. 1988 and H.R. 5992, 80th Cong., 2d Sess.
40
See, e.g., 1946 Senate Hearings 183; 91 Cong.Rec. 8867; 92 Cong.Rec. 9515—9518.
41
E.g., 92 Cong.Rec. 9518, 9628 (remarks of Senator Connally); id., 9524 (remarks of Senator Donnell).
42
La. Act No. 55 of 1938, LSA—Rev.Stat. 49:1 (27 miles); Act of May 16, 1941, L.Tex., 47th Leg., p. 454 (27 miles), Act of May 23, 1947, L.Tex., 50th Leg., p. 451 (outer edge of Continental Shelf), Vernon's Tex.Civ.Stat. Art. 5415a. See also Act of May 25, 1947, L.Tex., 50th Leg., p. 490, Vernon's Tex.Civ.Stat. Art. 1592a (boundaries of counties extended to edge of Continental Shelf).
43
An amendment was first proposed for that purpose by Senator Capehart on the floor during consideration of H.J.Res. 225, 79th Cong., 2d Sess., 92 Cong.Rec. 9541, 9619. It did not contain the 'heretofore approved by the Congress' provision (see note 7, 363 U.S. 9, 80 S.Ct. 968), and was defeated, apparently on the ground that the boundaries of some States might have been lawfully altered since their admission. See 92 Cong.Rec. 9630 (remarks of Senator McCarran); id., 9632 (amendment defeated). During the Eightieth Congress, Second Session, H.R. 5992 and S. 1988 were originally introduced with present boundaries still the measure of the grant. During the hearings on the bills, the matter of unilateral extensions was called to the Committee's attention several times. 1948 Joint Hearings 653—654 (Attorney General Clark), id., 734 (Secretary of the Interior Krug), and an amendment specifically incorporating the twofold test of the present Act was proposed to the Committee by Leander I. Shelley, counsel for the port authorities, id., 886. Both H.R. 5992 and S. 1988, when reported out of Committee, incorporated the proposed change. See 94 Cong.Rec. 5154, S.Rep. No. 1592, 80th Cong., 2d Sess. 2.
44
Representative Willis of Louisiana made clear the nature of the inquiry it was contemplated the courts would make to ascertain the location of 'historic boundaries':
'Mr. Willis. Do you know of a better criteria than a historic approach?
'Secretary McKay. No, sir.
'Mr. Willis. Let us apply that criteria to Texas, for instance, and I think you and I are in thorough agreement. Texas was a republic. The Republic of Texas took certain action. Then there was a treaty between the Republic of Texas and the United States preliminary to admission. There might have been maps exhibited or maps in existence at that time. Then Congress passed an act admitting Texas into the Union, and then Texas adopted a constitution delimiting its historic boundaries. Those are the historic documents that set forth Texas' title; is that correct?
'Secretary McKay. That is right. If my memory is correct, the United States would not take the land. They gave it bank to Texas.
'Mr. Willis. That is right. There is nothing unusual about that. Let me illustrate the point in this way. I know you are not a lawyer, but I think you can follow this. If a farmer should consult a lawyer to find out what the limits of his farm are, that lawyer would have to examine the papers. He would have to go first to the patent. He would have to consult all the deeds in the chain of title. There might be maps attached to those deeds which help to interpret them. After his study he would give an opinion on the limits, based upon the history of that title, and every link in the chain.
'* * * There has been some talk here this morning about 3 miles. The principle, though, that I think you and I agree on is that we have to go to the documents to find out what our historic boundaries are?
'Secretary McKay. Yes, sir.' 1953 House Hearings 197—198.
And on the floor of the House, he explained 'historic boundaries' as follows:
'You will hear a great deal during general debate today, first about the historic boundaries and second about the outer continental shelf of the States. Let me explain what these terms mean.
'Each State was admitted into the Union by an act of Congress, and each State adopted a constitution which was approved by the Congress. The act of Congress and the first Constitution defined the boundaries of each State in the first instance. In some cases treaties were involved. Thus the Louisiana Territory was retroceded or reconveyed by Spain to France in 1803, and then France, in turn, transferred the Louisiana Territory to the United States. Thereafter, Louisiana was admitted into the Union as a State under an act of Congress of 1812, and the first Constitution of Louisiana, of 1812, was approved by the Congress. Both Spain and France exerted influence over and claimed, owned, and controlled a marginal belt as part of the Louisiana Territory, as shown by maps then used and still in existence.
'Obviously, we must resort to all of such ancient documents in order to determine the true and actual historic boundaries of each State, and as a practical matter, that is exactly what this bill permits and accomplishes. I do not know of any better criteria for the establishment of the boundaries of the States than a historic approach.' 99 Cong.Rec. 2504.
45
See 99 Cong.Rec. 4174—4175 (remarks of Senator Daniel); State of New Mexico v. State of Texas, 275 U.S. 279, 48 S.Ct. 126, 72 L.Ed. 280; 276 U.S. 557, 48 S.Ct. 437, 72 L.Ed. 698; 276 U.S. 558, 48 S.Ct. 344, 72 L.Ed. 699; State of New Mexico v. State of Colorado, 267 U.S. 30, 45 S.Ct. 202, 69 L.Ed. 499.
46
1953 Senate Hearings, pt. II (Exec. Sess.), 1317—1319; 99 Cong.Rec. 3551—3552, 4095.
47
It is worth observing that at one time the claims protected from prejudice by § 4 included not only those based on state constitutional or statutory provisions, but also those based on 'any treaty ratified by the Senate of the United States' or on 'an act of Congress.' 99 Cong.Rec. 2567. This provision was inserted specifically to preserve Texas' claim based on the Joint Resolution of Annexation (see 80 S.Ct. 983) which was loosely referred to as a 'treaty' between Texas and the United States. Id., 2568. See also 1953 House Hearings 301—302.
48
1919 Senate Hearings 138—139; 1953 Senate Hearings 957, 1076—1078; 99 Cong.Rec. 2504, 2558—2559, 2746, 2754, 2755, 2933, 4095, 4096, 4116, 4171, 4175, 4477.
49
E.g., 99 Cong.Rec. 2916 (remarks of Senator Douglas).
50
1948 Joint Hearings 618 (Attorney General Clark); Hearings before Subcommittee No. 1 of the House Judiciary Committee on H.R. 5991 and H.R. 5992, 81st Cong., 1st Sess. 196 (Solicitor General Perlman); 1951 Senate Hearings 40, 393 (Solicitor General Perlman); 97 Cong.Rec. 9167 (letter from Solicitor General Perlman introduced by Representative Celler); 98 Cong.Rec. 5247 (Representatives Mansfield and Feighan); 1953 Senate Hearings 27 (Assistant Secretary of State Morton); id., 663 (Senator Anderson); id., 678—679, 680—684 (former Solicitor General Perlman); id., 1053—1086 (State Department Deputy Legal Adviser Tate); 99 Cong.Rec. 2502—2503 (Representative Hays); id., 2568 (Representative Yates); id., 3034 (Senator Anderson).
51
1953 Senate Hearings 1051—1086.
52
1953 Senate Hearings 326; id., pt. II (Exec. Sess.), 1415.
53
Hearings before the House Judiciary Committee and a Special Subcommittee of the Senate Judiciary Committee on H.J.Res. 118 and other bills, 79th Cong., 1st Sess. 23; 91 Cong.Rec. 8867; 1949 Senate Hearings 137—138; 1953 Senate Hearings 670, 1076—1078, 1082—1084; 99 Cong.Rec. 4074—4075, 4172—4173. Even Senator Anderson, who was opposed to the bill, in proposing that the grant should in any event be limited to three leagues in the Gulf of Mexico, conceived that distance to be justified as an exception to this country's three-mile policy, based on the fact that the Gulf is very largely enclosed by land. 1953 Senate Hearings, pt. II (Exec. Sess.), 1349.
54
1953 Senate Hearings 319—323, 1056—1057, 1060—1063, 1076 1078, 1080—1082. See also 99 Cong.Rec. 2513, 2569, 3041—3042.
55
Similar suggestions seem to have been made in the course of consideration of the various 'quitclaim' bills, though never fully developed. See 92 Cong.Rec. 9518 (remarks of Senator Connally); 1953 Senate Hearings 316—317 (statement of John J. Real); 99 Cong.Rec. 3037 (remarks of Senators Gore and Anderson); id., 3265 (remarks of Senators Morse and Hill); id., 3270 (remarks of Senator Hill). See also 1953 Senate Hearings 1078 (remarks of Senator Daniel). In this Court the Government has undertaken to support its position respecting this Nation's adherence to the three-mile limit by a letter from the Secretary of State summarizing historical Executive policy in that regard. In our view of the issues in this case we do not reach the Government's contention that the Secretary's letter would be conclusive upon us as to the existence of that policy.
56
See Mouton, The Continental Shelf 183—192 (1952 ed.).
57
See 1951 Senate Hearings 511.
58
See United States v. State of California, supra, 332 U.S. at page 33, 67 S.Ct. at page 1665.
59
See 1953 Senate Hearings 1074—1075.
60
For example, the United States has long claimed the right to exercise jurisdiction over domestic and foreign vessels beyond the three-mile limit for purposes of customs control, 1 Stat. 145, 164, 648, 668; Anti-Smuggling Act of Aug. 5, 1935, 49 Stat. 517, 19 U.S.C. §§ 1701—1711, 19 U.S.C.A. §§ 1701—1711, and for defense purposes, 62 Stat. 799, 18 U.S.C. § 2152, 18 U.S.C.A. § 2152, and this practice is recognized by international law. See 1953 Senate Hearings 1087—1088; American Law Institute, Restatement of the Foreign Relations Law of the United States (Tentative Draft No. 2, May 8, 1958), §§ 8(c), 21.
61
The boundaries of Texas were described in full by the Act as follows:
'That from and after the passage of this act, the civil and political jurisdiction of this republic be, and is hereby declared to extend to the following boundaries, to wit: beginning at the mouth of the Sabine river, and running west along the Gulf of Mexico three leagues from land, to the mouth of the Rio Grande, thence up the principal stream of said river to its source, thence due north to the forty-second degree of north latitude, thence along the boundary line as defined in the treaty between the United States and Spain, to the beginning: and that the president be, and is hereby authorized and required to open a negotiation with the government of the United States of America, so soon as in his opinion the public interest requires it, to ascertain and define the boundary line as agreed upon in said treaty.'
62
On March 1, the Senate resolved that recognition of Texas would be expedient and proper, Cong.Globe, 24th Cong., 2d Sess. 83, 270. A Charge d'Affaires to be sent there was appointed by the President on March 3, 4 S.Exec.J. 631, and confirmed by the Senate on March 7, 5 id., 17.
63
8 Stat. 511.
64
S.Doc. No. 341, 28th Cong., 1st Sess. 10; Cong.Globe, 28th Cong., 1st Sess. 652.
65
5 Stat. 797.
66
9 Stat. 108.
67
Texas Const., 1845, Art. Thirteenth, § 2, 2 Gammel, Laws of Texas, at 1299.
68
8 Stat. 200.
69
13 Cong.Deb., 24th Cong., 2d Sess., Pt. II, at 229.
70
See, e.g., Cong.Globe, 28th Cong., 1st Sess., App. 540; id., at 697. The Rio Grande was also sometimes called the Rio Bravo, Rio Bravo del Norte, or Rio Del Norte. We shall refer to it throughout as the Rio Grande.
71
8 Stat. 252.
72
See Cong.Globe, 28th Cong., 1st Sess., App. 486, 697.
73
In 1825 and 1827, President Adams and his Secretary of State, Henry Clay, made overtures to Mexico for the acquisition of Texas. See Justin H. Smith, The Annexation of Texas, 8; Cong.Globe, 28th Cong., 1st Sess., App. 698, 768. Again in 1829 and 1835, President Jackson made similar overtures. Smith, op. cit., supra, at 9; Cong.Globe, 28th Cong., 1st Sess., App. 698. It seems that the Rio Grande was not always sought as the boundary, but that on at least one occasion, Jackson was willing to stop at the center of the desert between the Nueces and the Rio Grande.
74
See 4 Miller, Treaties and Other International Acts of the United States of America (1934), 139; Justin H. Smith, The Annexation of Texas 1, 7, 20; Cong.Globe, 28th Cong., 1st Sess., App. 697; 1 Garrison, Diplomatic Correspondence of the Republic of Texas, 127, 132—133, H.R.Doc. No. 1282, 60th Cong., 2d Sess. 127, 132—133; letter from Messrs. Van Zandt and Henderson to Secretary of State Calhoun, Apr. 15, 1844, S.Doc. No. 341, 28th Cong., 1st Sess. 13.
75
S.Doc. No. 341, 28th Cong., 1st Sess. 10.
76
Speech of Senator Benton of Missouri, Cong.Globe, 28th Cong., 1st Sess., App. 474; Speech of Senator Jarnagin of Tennessee, id., at 685. The contested portions of Texas' claim were the area between the Nueces and Rio Grande Rivers on the southwest, and the area bounded by the upper portion of the Rio Grande in the northwest, which is now part of New Mexico. See diagram at 80 S.Ct. 998.
77
Speech of Senator Walker of Mississippi, Cong.Globe, 28th Cong., 1st Sess., App. 548; speech of Senator McDuffie of South Carolina, id., at 529; speech of Senator Breese of Illinois, id., at 540; speech of Senator Buchanan of Pennsylvania, id., at 726; speech of Senator Woodbury of New Hampshire, id., at 768.
78
S.Doc. No. 341, 28th Cong., 1st Sess., 53, 54.
79
Id., at 55—57.
80
Cong.Globe, 28th Cong., 1st Sess., App. 548.
81
Id., at 540.
82
Id., at 768, 726.
83
Opponents of the proposals objected that since the consent of a foreign nation was required, the object could be accomplished only by an exercise of the treaty-making power, which would bring Texas in as a territory. See, e.g., Cong.Globe, 28th Cong., 2d Sess., App. 367. Supporters of the Resolutions insisted that the express constitutional power of Congress to admit new States on prescribed terms extended to the admission of foreign states as well as of territory already belonging to the United States. See, e.g., id., at 406—407. The measure as finally passed represented a compromise, the Senate having added a § 3, which authorized an alternative procedure to be pursued by the President, at his election, under the treaty-making power. See Cong.Globe, 28th Cong., 2d Sess. 359, 360, 362—363. President Polk elected not to use that power.
84
See, e.g., speech of Senator Ashley of Arkansas, Cong.Globe, 28th Cong., 2d Sess., App. 288:
'(T)he present boundaries of Texas I learn from Judge Ellis, the president of the convention that formed the constitution of Texas, and also a member of the first legislature under that constitution, were fixed as they now are, solely and professedly with a view of having a large margin in the negotiation with Mexico, and not with the expectation of retaining them as they now exist in their statute book.' (Emphasis in original.)
See also speech of Representative Brinkerhoff of Ohio, Cong.Globe, 28th Cong., 2d Sess. 346—347. Significantly, the House of Representatives on Jan. 16, 1845, passed a Resolution calling on the President to communicate any information he might possess on the territory within which the authority and jurisdiction of the Republic of Texas was recognized by its inhabitants. Id., at 147.
85
Speech of Senator McDuffie of South Carolina, Cong.Globe, 28th Cong., 1st Sess., App. 530: '(T)he treaty neither does convey, nor is intended to convey, one solitary square foot of land which does not rightfully belong to Texas.' (Emphasis added.) Speech of Senator Walker of Mississippi, id., at 548: '(W)hen (a nation) is ceded by name, that cession extends only to the country embraced within its lawful boundaries. If, then, the Del Norte * * * be the proper boundary, then it is and ought to be included.' (Emphasis added.) See also Speech of Senator Buchanan of Pennsylvania, id., at 726; speech of Senator Breese of Illinois, id., at 540.
86
Representative Rhett of South Carolina proposed that 'the sense of the * * * (House) be taken on the first number in the series of resolutions, which simply declared that Texas should be annexed to the United States.' He did not 'feel very scrupulous as to the particular means, provided Texas was got; and have it they would.' Cong.Globe, 28th Cong., 2d Sess., App. 55. See also remarks of Representative Ingersoll, Chairman of the Committee on Foreign Affairs, which had reported on the subject of annexation, objecting to this procedure, ibid., and those of Senator Dayton of New Jersey, id., at 387.
87
The bills introduced included the following variations in treatment of the boundary question:
'That the republic of Texas * * * be received and admitted * * *. That the United States be authorized to adjust and settle all questions of boundary which may arise with other governments.' (Offered by Senator Ashley of Arkansas, Cong.Globe, 28th Cong., 2d Sess., App., at 287—288.)
'The republic of Texas * * * cedes to the United States all the territories of Texas * * *.' (Reported by Representative Ingersoll as Chairman of the Committee on Foreign Affairs, Cong.Globe, 28th Cong., 2d Sess., at 191.)
'(T)he territory now known as the republic of Texas be, and the same is hereby, annexed to, and made a portion of, the territory of the United States. * * * That commissioners shall hereafter be appointed, who shall establish the boundaries * * *.' (Offered by Representative Weller of Ohio, id., at 192.)
'That the Congress both consent that the territory rightfully included within the limits of Texas be erected into a new State * * *. That said State be formed subject to the adjustment, by the government of the United States, of all questions of boundary that may arise with other governments.' (Offered by Representative Douglass of Illinois, id., at 192.)
'That the Congress doth consent that the territory known as the republic of Texas, and rightfully belonging to the same, may be erected into a new State * * *. That the President of the United States, by and with the advice and consent of the Senate, is hereby authorized to adjust the settle all questions relating to the boundaries of said territory, which may arise with other governments.' (Offered by Representative Burke of New Hampshire, ibid.)
There were also several proposals to carve a State out of only part of the Texan territory, with assigned territorial boundaries, and to admit the remainder as a territory subject to later adjustment of boundaries. Cong.Globe, 28th Cong., 2d Sess. 76 (Representative Tibbatts of Kentucky); 107, 187, App. 304 (Representative Dromgoole of Virginia); 192 (Representative Robinson of New York); 359 (Senator Walker of Mississippi); 362 (Senator Miller of New Jersey).
88
See, e.g., Cong.Globe, 28th Cong., 2d Sess., App. 387, 400. The maintainable extent of Texas' territory was crucial for two reaons: first, because it had been proposed that the United States assume the Texan debt and that Texas cede all her vacant and unappropriated public lands to be applied in discharge of the debt; second, because it had been proposed that several States be carved out of the Texan territory, those lying south of latitude 36 degrees 30 minutes—the Missouri compromise line—to be slave States, and those to the north to be free States. In this context, it was repeatedly asserted by opponents of the Annexation Resolutions that by their terms, the United States would not get nearly as much public land as the Texas Boundary Act would indicate, nor any land north of the Missouri compromise line, despite the Act's claim of a boundary extending to the 42d parallel. See, e.g., Cong.Globe, 28th Cong., 2d Sess. 191 (Representative McIlvaine of Pennsylvania); id., App. 369—370 (Representative Severance of Maine).
89
Representative Hudson of Massachusetts said:
'What is the Texas which we propose to take into our embrace? Not simply the old province of Texas—not the Texas which declared itself independent, and whose independence we and several other nations have recognised—not Texas proper, but a large amount of territory which is not included in Texas—territory over which Texas never extended her conquest or jurisdiction, and which is as much a part of Mexico as the city of Mexico itself.' Cong.Globe, 28th Cong., 2d Sess., App. 336.
See also remarks of Representative Rayner of North Carolina, id., 411—412, see note 98, infra; and of Representative Haralson of Georgia. Id., App. 195, see note 97, infra.
90
Treaty of Amity, Settlement, and Limits, Feb. 22, 1819, 8 Stat. 252; Treaty of Limits, Jan. 12, 1828, 8 Stat. 372.
91
This compact was alluded to during the debates on the unsuccessful 1844 Treaty as having probably provided the origin of the boundary claims made in the Texas 1836 boundary statute. See Cong.Globe, 28th Cong., 1st Sess., App. 700, 768.
92
1 Garrison, Diplomatic Correspondence of the Republic of Texas, 127, 132 reprinted as H.R.Doc. No. 1282, 60th Cong., 2d Sess. 127, 132.
93
On Dec. 22, 1836, President Jackson sent a message to the House regarding possible recognition of Texas. One of the documents accompanying the message was a report dated Aug. 27, 1836, in which the Texas boundary was described as
'extend(ing) from the mouth of the Rio Grande on the east side, up to its head waters; thence on a line due north until it intersects that of the United States, and with that line to the Red river, or the northern boundary of the United States; thence to the Sabine, and along that river to its mouth; and from that point westwardly with the Gulf of Mexico to the Rio Grande.' H.R.Exec.Doc. No. 35, 24th Cong., 2d Sess. 11. (Emphasis added.)
While this report was written before the Texas boundary statute was passed, it again illustrates the lack of concern over a seaward boundary.
94
Convention Between the United States of America and the Republic of Texas, for marking the boundary between them, Apr. 25, 1838, 8 Stat. 511. The Journal of the Joint Commission which conducted the survey stated:
'(W)e established the point of beginning of the boundary between the United States and the republic of Texas at a mound on the western bank of the junction of the river Sabine with the sea * * *.' S.Doc. No. 199, 27th Cong., 2d Sess. 59.
95
S.Doc. No. 341, 28th Cong., 1st Sess. 55, 56.
96
See, e.g., speech of Representative Severance of Maine, Cong.Globe, 28th Cong., 2d Sess., App. 369—370; speech of Representative McIlvain of Pennsylvania, id., at 373.
97
Representative Haralson of Georgia, speaking to the Joint Resolution, said:
'If it should turn out that, by receiving the entire limits of Texas, as defined in her act, we acquired more territory than we could rightfully hold, having a just regard to the rights of other nations, all that is necessary to be done is to surrender the overplus. The Texian act of Congress, approved December 19, 1836, I have little doubt, defines correctly the boundary of that republic. If not, any imaginable difficulty may be adjusted if you adopt one of these resolutions, which provides for the consent of Texas to our settlement of the boundaries.' Cong.Globe, 28th Cong., 2d Sess., App. 193, 195.
98
Representative Rayner of North Carolina, speaking to the Joint Resolution, said:
'Texas claims the country on the east of the Del Norte, from its mouth to its source. She has laid down this as her boundary in her constitution. She is to transfer to this government, or retain to herself, all the unappropriated lands within the limits of her republic. She has defined these limits; and it is with Texas, claiming territory as extending to the Del Norte in its whole length, that you propose to make the contract. It may be said that this question of boundary must be left to future negotiation with Mexico. But will not this government, if Texas is now annexed, with her definition of boundary, be precluded from making any concessions to Mexico? Will not any compromise as to boundary be resisted by Texas as a breach of faith towards her? She might say that Texas had defined her own limits; that with Texas, as thus bounded, we had contracted for her admission into the Union; and that this government was bound by every consideration of faith and honor to see that Texas should not be again mutilated. * * *
'Whether this reasoning be founded in justice or not, there is some plausibility in it * * *'. Id., at 410, 411—412.
Similarly Senator Breese of Illinois, speaking to the 1844 Treaty, had said:
'The limits of Texas are to be adjusted hereafter. But we have acknowledged the limits as defined in the act of the Texian Congress of 1836, and as delineated on the map accompanying the documents, as extending to the Del Norte. And why do I say so? Because we did, in 1837, with a full knowledge of these declared boundaries, acknowledge the independence of Texas as a state, with that act of her Congress then, and as now, in full force; and which acknowledgment received the vote of the senator from Missouri. But this is a small matter, and can be readily adjusted with Mexico, should we encroach upon her rights. We get a title to all Texas, rightfully ours in virtue of her sovereignty. We ask no more—no less.
'The senator says that he is for the recovery of (t)he province of Texas—Spanish Texas—the Texas of La Salle. So am I, Mr. President; and for as much more as the 'republic' of Texas can lawfully claim.' Cong.Globe, 28th Cong., 1st Sess., App. 537, 540.
Senator Walker of Mississippi, commenting on the 1844 Treaty, had placed his approval of the Boundary Act on both grounds. Id., at 548—557.
99
Letter from Andrew J. Donelson to James Buchanan, Apr. 12, 1845, 12 Manning, Diplomatic Correspondence of the United States: Inter-American Affairs, 1831—1860 (1939), 400-401.
100
The treaty provided as follows:
'The boundary line between the two republics shall commence in the Gulf of Mexico, three leagues from land, opposite the mouth of the Rio Grande, otherwise called Rio Bravo del Norte, or opposite the mouth of its deepest branch, if it should have more than one branch emptying directly into the sea; from thence up the middle of that river, following the deepest channel, where it has more than one, to the point where it strikes the southern boundary of New Mexico; thence, westwardly, along the whole southern boundary of New Mexico (which runs north of the town called Paso) to its western termination; thence, northward, along the western line of New Mexico, until it intersects the first branch of the River Gila; (or if it should not intersect any branch of that river, then to the point on the said line nearest to such branch, and thence in a direct line to the same;) thence down the middle of the said branch and of the said river, until it empties into the Rio Colorado; thence across the Rio Colorado, following the division line between Upper and Lower California, to the Pacific Ocean.'
By this treaty, the United States thus not only maintained the Texan claim to the territory between the Nueces and the Rio Grande, but also acquired from Mexico the whole of New Mexico, part of which Texas had claimed by its boundary statute. To settle the
conflict thus created between the United States and Texas to that portion of New Mexico, the United States in 1850 paid Texas $10,000,000 to relinquish its claim to the area, 9 Stat. 446, thereby consummating the final step in the establishment of Texas' disputed land boundaries. See diagram, 363 U.S. at page 65, 80 S.Ct. at page 998.
The Act provided as follows:
'The State of Texas will agree that her boundary on the north shall commence at the point at which the meridian of one hundred degrees west from Greenwich is intersected by the parallel of thirty-six degrees thirty minutes north latitude, and shall run from said point due west to the meridian of one hundred and three degrees west from Greenwich; thence her boundary shall run due south to the thirty-second degree of north latitude; thence on the said parallel of thirty-two degrees of north latitude to the Rio Bravo del Norte, and thence with the channel of said river to the Gulf of Mexico.'
It is suggested that the seaward boundary of Texas was thereby fixed at the edge of the Gulf. But Texas' western boundary south of New Mexico had already been definitively fixed by the Treaty of Guadalupe Hidalgo. 363 U.S. at pages 60—61, 80 S.Ct. at pages 994, 995. Since the Treaty had fully supported Texas' claim to that area, there was nothing to compromise in 1850. By contrast, the portion of the 1848 boundary which encompassed not only eastern New Mexico, to which Texas had a very doubtful claim, but also western New Mexico and California, which it had never claimed, obviously was not pressed against Mexico on Texas' behalf and was not intended to validate its claim to eastern New Mexico. Thus the 1850 Compromise could be concerned only with the latter area. Nothing in United States v. State of Texas, 162 U.S. 1, 16 S.Ct. 725, 40 L.Ed. 867, militates to the contrary. The concluding phrase of the Act, describing the portion of Texas' boundary south of New Mexico was unnecessary to the purposes of the Act and could not, without Texas' consent, affect the seaward boundary previously fixed for it.
101
Papers of Nicholas P. Trist (Library of Congress 1917), Vol. 33, folio 62071. The quotation is from letter of Secretary of State Buchanan to John Slidell, Nov. 10, 1845. S.Exec.Doc. No. 52, 30th Cong., 1st Sess. 78.
102
See also 5 Miller, op. cit., supra, at 315, n. 1. While the United States demanded and obtained as a war indemnity a large amount of territory west of Texas' claimed boundaries extending to the Pacific coast, see note 100, supra, that fact never obscured this country's firm contention that as to Texas' southwestern boundary—lying along the Rio Grande from the Gulf to what is now New Mexico—the Texan claim based on its 1836 Boundary Act must be maintained against Mexico.
103
10 Stat. 1031. It is noteworthy that the boundary commissioners appointed at that time to survey the three-league boundary reported: 'Lieut. Wilkinson, in command of the brig Morris, repaired at the appointed time to the mouth of the river and made soundings * * * to trace the boundary, as the treaty, required, 'three leagues out to sea." 1 Emory, Report on the United States and Mexican Boundary Survey (1857), 58. This is in marked contrast to the notes of the surveyors of the boundary between Texas and the United States established by the 1838 Convention. See note 94, supra.
104
See the following boundary conventions between the United States and Mexico: July 29, 1882, 22 Stat. 986; Nov. 12, 1884, 24 Stat. 1011; Dec. 5, 1885, 25 Stat. 1390; Feb. 18, 1889, 26 Stat. 1493; Mar. 1, 1889, 26 Stat. 1512; Aug. 24, 1894, 28 Stat. 1213; Oct. 1, 1895, 29 Stat. 841; Nov. 6, 1896, 29 Stat. 857; Oct. 29, 1897, 30 Stat. 1625; Dec. 2, 1898, 30 Stat. 1744; Nov. 21, 1900, 31 Stat. 1936; Mar. 20, 1905, 35 Stat. 1863.
105
Letter of Secretary of State Buchanan to Mr. Crampton, British Minister, Aug. 19, 1848, Manning, Diplomatic Correspondence of the United States, Inter-American Affairs, 1831 1860, VII, 31—32; Letter from Luis G. Cuevas, Mexican Foreign Minister, to Percy W. Doyle, British Charge d'Affaires in Mexico, photostatic copy of translation in Public Record Office, London, Gov.Br. p. 403.
106
Foreign Relations of the United States, 1875, Pt. I, 649 650. It is difficult to understand why, if jurisdiction for revenue purposes had been extended by statute to four leagues, the boundary was established only at three leagues if it was drawn solely for that purpose. It is asserted, however, that Mexico concluded a series of treaties with other countries in the latter half of the nineteenth century which established jurisdiction for revenue purposes at three leagues. Treaty between Mexico and China, Art. XI, 1 Laws and Regulations on the Regime of the High Seas (United Nations Legislative Series) 147; Treaty between Mexico and the Dominican Republic, Art. 15, id., at 153, 154; Treaty between Mexico and El Salvador, Art. XXI, id., at 156; Treaty between Mexico and France, Art. 15, id., at 169, 170; Treaty between Mexico and Germany, Art. VIII, id., at 170; Treaty between Mexico and the Netherlands, Art. 6, id., at 171; Treaty between Mexico and Norway and Sweden, Art. VII, id., at 171—172; Treaty between Mexico and the United Kingdom, Art. IV, id., at 172. Only some of those Treaties set the limit at three leagues; others set it at twenty kilometers, which is equivalent to approximately 10.8 nautical miles, or closer to four leagues than to three. In any event, the Mexican Treaties indicate only that Mexico chose to limit the rights she would assert as against other nations, and do not relate to the rights created between it and the United States by the Treaty of Guadalupe Hidalgo.
107
Letter from Mr. De L. Boal, American Charge d'Affaires an interim at Mexico City, to Senor General Hay, Mexican Minister for Foreign Affairs, June 3, 1936, 99 Cong.Rec. 3623—3624.
In testifying before Congress on the Submerged Lands Act, representatives of the State Department reiterated these various grounds, 1953 Senate Hearings 1056—1057, 1077—1078. See also id., at 321—323, 670; 99 Cong.Rec. 2513—2514, 2569, 2893—2895, 3041 3042. Their concern was to avert a congressional determination that a three-league territorial boundary had been fixed for Texas which might be embarrassing to this country in its foreign relations. However, as we have pointed out, 363 U.S. at pages 30 36, 80 S.Ct. at pages 979—982, there is no necessary conflict between the existence of a three-league territorial boundary for domestic purposes and the maintenance of the Executive's policy on the limit to which this country will assert rights in the marginal seas as against other nations. Despite the State Department's contentions with respect to the Treaty, Congress clearly left that question, like all other matters bearing on the determination of boundaries, an open question to be judicially resolved.
*
United States Department of the Interior, Boundaries, Areas, Geographic Centers, and Altitudes of the United States and the Several States, Second Edition, 1932, Edward M. Douglas, Editor, Geological Survey Bulletin 817, p. 170.
107a
2 Stat. 701, 702. The terms of this Act were practically identical with those of the Louisiana Enabling Act, passed the year before. 2 Stat. 641.
108
In precise modern usage, the term 'shore' denotes the line of low-water mark along the mainland, while the term 'coast' denotes
the line of the shore plus the line where inland waters meet the open sea. It is obvious that the term 'coast' was used in Louisiana's Act of Admission in a nontechnical sense to denote what is actually the shore. The Acts admitting both Mississippi and Alabama contain similar provisions for the inclusion of all islands within six leagues of the shore, despite the fact that Great Britain had proclaimed those areas in 1763 to include all islands within six leagues of the 'sea coast.' And, in State of Louisiana v. State of Mississippi, 202 U.S. 1, 47, 26 S.Ct. 408, 420, 50 L.Ed. 913, this Court held that the 'coast' referred to in Louisiana's Act of Admission was the St. Bernard marshes on the mainland and not the Chandeleur Islands, which might be thought to be the seaward limit of inland waters.
The Government concedes that all the islands which are within three leagues of Louisiana's shore and therefore belong to it under the terms of its Act of Admission, happen to be so situated that the waters between them and the mainland are sufficiently enclosed to constitute inland waters. Thus, Louisiana is entitled to the lands beneath those waters quite apart from the affirmative grant of the Submerged Lands Act, under the rule of Pollard's Lessee v. Hagan, 3 How. 212, 11 L.Ed. 565. Furthermore, since the islands enclose inland waters, a line drawn around those islands and the intervening waters would constitute the 'coast' of Louisiana within the definition of the Submerged Lands Act. Since that Act confirms to all States rights in submerged lands three miles from their coasts, the Government concedes that Louisiana would be entitled not only to the inland waters enclosed by the islands, but to an additional three miles beyond those islands as well. We do not intend, however, in passing on these motions, to settle the location of the coastline of Louisiana or that of any other State.
109
8 Stat. 80, 82.
110
Circular sent by Jefferson to United States Attorneys, ms. in National Archives, Record Group 59.
111
Ibid.; see also letter from Jefferson to George Hammond, British Minister, Nov. 8, 1793; H.Exec.Doc.No.324, 42d Cong., 2d Sess. 553; letter from Jefferson to Edmond Genet, French Minister, American State Papers, 1 Foreign Relations 183.
112
While, as we have observed, Congress may fix state boundaries independently of Executive policy on the extent of territorial waters, subject to any limitations imposed by that policy, the Treaty of Paris does not present such a situation. It represents an exercise of purely Executive power (prior, in fact, to the establishment of the Federal Constitution) in setting a national boundary with another nation.
113
Ga.Code Ann. § 15—101, derived from Act 1788, Cobb, 150; Watkins' Dig. 713—762, as amended, Acts 1916, p. 29.
114
'* * * jusq u'a son embouchure dans la mer ou golfe de Mexique, environ les 27 Degrez d'd le vation du pole septentrional * * *.' 2 Margry, De couvertes et E tablissements des Francais dans L'Ouest et dans le Sud de L'Ame rique Septentrionale (1877), 191—192.
115
2 Margry, op. cit., supra, at 186, 190—191.
116
Fragment of a letter of La Salle, 2 Margry, op. cit., supra, at 199 (The Mississippi runs as far as the 27th degree, where it discharges into the sea); Letters Patent issued on Sept. 14, 1712, by Louis XIV to his Secretary, Antoine Crozat, for exclusive trading in Louisiana, in Greenhow, Memoir, Historical and Political, on the Northwest Coast of North America, S.Doc.No.174, 26th Cong., 1st Sess. 150 (Louisiana extends along the Mississippi 'from the seacoast to the Illinois country'); Definitive Treaty of Peace between Great Britain, Spain, and France, signed at Paris, Feb. 10, 1763, Art. VII, 15 Parliamentary History of England 1291, 1296 (domains of Britain and France separated by a line drawn along the middle of the river Iberville, and lakes Maurepas and Pontchartrain 'to the sea').
117
13 Cong.Deb., 24th Cong., 2d Sess., pt. II, App. 226.
118
Id., at 229.
119
Treaty of Utrecht, 1713, between Great Britain and France, 17 Journal of the House of Commons 329; Preliminary Treaty of Peace between Great Britain, Spain, and France, Nov. 3, 1762, 15 Parliamentary History of England 1241, 1243; Definitive Treaty of Peace between Great Britain, Spain, and France, Feb. 10, 1763, 15 Parliamentary History of England 1291, 1295; Definitive Treaty of Peace and Friendship between Britain and France, at Versailles, Sept. 3, 1783, 39 Journal of the House of Commons, 718, 719.
120
Convention between Great Britain and Spain, at The Escurial, Oct. 28, 1790, 46 Journal of the House of Commons 30.
121
Estevan de Ferrater, Codigo de Derecho Internacional (Barcelona 1846), Vol. I, p. 488.
122
Ernest Nys, Le Droit International, Vol. I, p. 499.
123
Certain correspondence between the United States and Spain involving a dispute over the eastern and western limits of Louisiana also indicates that Spain believed the territory ended at the Gulf of Mexico. Letter from Pedro Cevallos, Spanish Foreign Minister, to Charles Pinckney and James Monroe, United States Envoys, Apr. 13, 1805, American State Papers, 2 Foreign Relations 660, 662; letter from Luis de Onis, Spanish Ambassador, to John Quincy Adams, United States Secretary of State, Dec. 29, 1817, American State Papers, 4 Foreign Relations 452, 453; letter from de Onis to Adams, Mar. 23, 1818, id., at 480, 484.
124
8 Stat. 200, 202.
125
Treaty of Amity, Settlement, and Limits (between the United States and Spain), Feb. 22, 1819, 8 Stat. 252; Treaty of Limits (between the United States and Mexico), Jan. 12, 1828, 8 Stat. 372; Convention Between the United States of America and the Republic of Texas, for marking the boundary between them, Apr. 25, 1838, 8 Stat. 511.
126
See note 94, supra.
127
Among the acts alleged were 'the passing and enforcing of laws regulating fishing, trawling and dredging of said submerged lands, the granting of leases for the cultivation, propagation and taking of oysters, fish and shrimp, for the dredging and removal of sand, gravel and shells, and for the leasing and development of said lands for oil, gas and other minerals.' The answer further alleged that prior to the discovery of oil and gas under said lands, the United States had never claimed any interest in them, and that it had recognized Louisiana's title thereto when, on numerous occasions, it 'requested the Chief Executive of the State to secure the passage of laws which would permit the federal government to acquire sites therein for game and fish preserves and for light houses, jetties and other aids to navigation.'
128
15 Parliamentary History of England 1291, 1296.
129
2 White, New Collection of Laws, Charters and Local Ordinances of Great Britain, France and Spain (1839), 292, 293.
130
39 Journal of the House of Commons 722, 723.
131
1 Richardson, Messages and Papers of the Presidents 465.
132
2 Stat. 734.
133
3 Stat. 348.
134
3 Stat. 472.
135
We express no opinion at this time on the location of Mississippi's coastline. See note 108, ante.
136
2 Stat. 734.
137
3 Stat. 608.
138
3 Stat. 489, 490.
139
We express no opinion at this time on the location of Alabama's coastline. See note 108, ante.
140
On June 5, 1950, the date of this Court's decision in the Louisiana and Texas cases, all coastal States were put on notice that the United States was possessed of paramount rights in submerged lands lying seaward of their respective coasts. The Submerged Lands Act, passed in 1953, by which parts of those lands were relinquished to the States, also forgave any monetary claims arising out of the States' prior use of the lands so relinquished. But the United States remains entitled to an accounting for all sums derived since June 5, 1950, from lands not so relinquished.
Mississippi contends that it is not liable for an accounting, since it was never party to a suit decreeing the United States' rights in offshore lands. However, principles announced in the 1950 Louisiana and Texas cases are plainly applicable to all coastal States, and Mississippi was put on notice by the decrees in those cases. A fortiori, the similar contention of Louisiana, the defendant in the 1950 Louisiana case, must be overruled.
141
In light of these conclusions we do not reach the question whether Alabama's cross bill constitutes an 'unconsented' suit against the United States.
142
The same disposition is made of the similar averment in Alabama's answer. Texas' motion for similar relief and for a severance is rendered moot by our decision as to it.
143
The alternative motion of Louisiana, contained in its answer to the original complaint herein, to transfer the case as to it to the United States District Court in Louisiana is denied for the same reasons, and on the further ground that we have already determined that the issues as to all the defendant States should be heard together in this Court. 354 U.S. 515, 77 S.Ct. 1373, 1 L.Ed.2d 1525.
1
67 Stat. 29, 43 U.S.C. §§ 1301—1315, 43 U.S.C.A. §§ 1301 1315.
2
H.J.Res. 225, 79th Cong., 2d Sess., 92 Cong.Rec. 10660; S.J.Res. 20, 82d Cong., 2d Sess., 98 Cong.Rec. 6251.
3
United States v. State of Texas, 339 U.S. 707, 70 S.Ct. 918, 94 L.Ed. 1221; United States v. State of Louisiana, 339 U.S. 699, 70 S.Ct. 914, 94 L.Ed. 1216; United States v. State of California, 332 U.S. 19, 67 S.Ct. 1658, 91 L.Ed. 1889.
4
'Therefore, in full acceptance of what the Supreme Court has now found the law to be, Congress may nevertheless enact such legislation as in its wisdom it deems advisable to solve the problems arising out of the decision.' S.Rep. No. 133, 83d Cong., 1st Sess. 56, from the reprint, in Appendix E, of S.Rep. No. 1592, 80th Cong., 2d Sess., U.S.Code Cong. and Adm.News 1953, p. 1385 et seq.
'Mr. Daniel. * * * We can and do accept the decisions of the Court as the interpretation of the law as it exists today, but, by the same token, the Congress of the United States, in placing its interpretation on the Constitution and in deciding the equities can write the law for the future differently from that which the Court has found it to be at this time.
'That is what we propose in Senate Joint Resolution 13. We want Congress to write the law for the future exactly as it was understood and believed to be during the first 150 years of the existence of this Nation.' 99 Cong.Rec. 4080—4081.
5
'Finally, it is the intent and purpose of this bill to establish the law for the future so that the rights and powers of the States and those holding under State authority may be preserved as they existed prior to the decision of the Supreme Court of the United States in the California case.' S.Rep. No. 133, 83d Cong., 1st Sess. 75. This is the closing paragraph of S.Rep. No. 1592, 80th Cong., 2d Sess., printed as an Appendix to the Report on the 1953 Act. See also S.Rep. No. 133, 83d Cong., 1st Sess. 6: 'The offshore rights which are confirmed to the States and their grantees are rights growing out of the concept of ownership and proprietary use and development—rights which were first asserted by the Federal Government in recent years and which it has never exercised nor enjoyed. These rights, legally vested in the States and their grantees by Senate Joint Resolution 13, have in fact been enjoyed and exercised by them from the beginning of our history as a nation until the date of the California decision.' And see Hearings before the Senate Interior and Insular Affairs Committee on S.J.Res. 13, etc., 83d Cong., 1st Sess. 32.
6
'It is * * * declared to be in the public interest that * * * title to * * * the lands beneath navigable waters within the boundaries of the respective States * * * be * * * vested in and assigned to the respective States * * *.' 43 U.S.C. § 1311(a), 43 U.S.C.A. § 1311(a). 'The term 'lands beneath navigable waters' means * * * (2) all lands * * * seaward to a line three geographical miles distant from the coast line of each such State * * *.' § 1301(a).
7
'Moreover, at the time Louisiana and Texas extended their seaward boundaries to 27 marine miles, the United States was not claiming ownership or jurisdiction and control over the Continental Shelf. Actually, some years earlier the State Department had taken the position that the United States had no jurisdiction over the ocean bottom of the Gulf of Mexico beyond the territorial waters adjacent to the coast and that therefore it was not in a position to grant a lease on this area. * * *
'Furthermore, the United States did not dispute the actions taken by the two States.' H.R.Rep. No. 215, 83d Cong., 1st Sess. 25—26. And see note 18, infra.
See, e.g., as to Louisiana, the statement of Miss Lucille May Grace, Register, State Land Office, State of Louisiana:
'(I)t strikes me as being highly incongruous that the Department of the Interior of the Federal Government, at this late date, should assert the slightest claim to such lands for it was in 1908 and again in 1915 that the General Land Office of the Department of the Interior wrote to the Federal land office of Louisiana, said records now being a part of the records of my office, explaining that certain lands beneath tidewaters belonged to Louisiana by her right of sovereignty, and that the State of Louisiana had made a mistake in applying 'to select such lands under the Swamp Lands Act.' * * *
'Let me respectfully request and urge your favorable consideration of this resolution in order that my State and all States, as well as the business interests of our country, who have in the past spent such high sums of money and who plan to invest greater sums in the future in the oil and gas development of our natural resources, will feel assured that our claims to such areas are recognized by all persons—once and for all—claims that we have considered sacred and valid in my State since Louisiana was admitted to the Union in 1812.' Joint Hearings before House Committee on Judiciary, Senate Special Judiciary Subcommittee on H.R.Res. 118, etc., 79th Cong., 1st Sess. 82—83.
8
Under the heading 'Equity best served by establishing State ownership,' the earlier Senate Report incorporated in the Report on the 1953 Act summarizes the equitable features involved:
'The repeated assertions by our highest Court for a period of more than a century of the doctrine of State ownership of all navigable waters, whether inland or not, and the universal belief that such was the settled law, have for all practical purposes established a principle which the committee believes should as a matter of policy be recognized and confirmed by Congress as a rule of property law.
'The evidence shows that the States have in good faith always treated these lands as their property in their sovereign capacities; that the States and their grantees have invested large sums of money in such lands; that the States have received, and anticipate receiving large income from the use thereof, and from taxes thereon; that the bonded indebtedness, school funds, and tax structures of several States are largely dependent upon State ownership of these lands; and that the legislative, executive, and judicial branches of the Federal Government have always considered and acted upon the belief that these lands were the properties of the sovereign States.
'If these same facts were involved in a dispute between private individuals, an equitable title to the lands would result in favor of the person in possession. * * *' S.Rep. No. 133, 83d Cong., 1st Sess. 67, reprinting S.Rep. No. 1592, 80th Cong., 2d Sess.
To the same effect is the conclusion of the 1953 Report: 'By this joint resolution the Federal Government is itself doing the equity it expects of its citizens.' Id., at 24.
9
99 Cong.Rec. 4393—4394.
10
Hearings before the Senate Committee on Interior and Insular Affairs on S.J.Res. 13, etc., 83d Cong., 1st Sess. 69.
11
99 Cong.Rec. 4382.
12
S.Rep. No. 133, 83d Cong., 1st Sess. 68, 67. And see statement of Senator Daniel in the Hearings before the Senate Interior and Insular Affairs Committee on S.J.Res. 13, etc., 83d Cong., 1st Sess. 695.
13
Id., at 24.
14
Text accompanying note 12, supra.
15
The other two cases were United States v. State of Texas, 162 U.S. 1, 16 S.Ct. 725, 40 L.Ed. 867, and State of New Mexico v. State of Texas, 275 U.S. 279, 48 S.Ct. 126, 72 L.Ed. 280. S.Rep. No. 133, supra, at 67.
16
See note 5, supra.
17
'States and their grantees have expended millions of dollars to build piers, breakwaters, jetties, and other structures, to install sewage-disposal systems and to fill in beaches and reclaim lands. During the past two decades California, Louisiana, and Texas have been leasing substantial portions of the lands in question for oil, gas, and mineral development. California commenced such leasing in 1921 and Texas in 1926. Other States, including Washington, Florida, Mississippi, North Carolina, and Maryland, have made leases for like purposes. States have levied and collected taxes upon interests in and improvements on these lands. It appears to the committee that the States have exercised every sovereign right incident to the utilization of these submerged coastal lands.' S.Rep.No.133, 83d Cong., 1st Sess. 64, from S.Rep.No.1592, 80th Cong., 2d Sess. Senator Holland placed the figure at 'billions of dollars of invested money.' Hearings before the Senate Interior and Insular Affairs Committee on S.J.Res. 13, etc., 83d Cong., 1st Sess. 74.
18
President Truman, in his veto message of S.J.Res. 20, 82d Cong., 2d Sess., acknowledged that, 'Even so careful and zealous a guardian of the public interest as the late Secretary of the Interior, Harold Ickes, at first assumed that the undersea lands were owned by the States.' H.R.Rep.No.215, 83d Cong., 1st Sess. 104. And the Senate Report noted that 'The facts are conclusive that at least prior to 1937 the policy of the executive departments of the Government has consistently been to recognize State ownership of the submerged lands, whether inland or not, within the territorial jurisdiction of the State.' S.Rep.No.133, 83d Cong., 1st Sess. 65, from S.Rep.No.1592, 80th Cong. 2d Sess. A letter to this effect written by Secretary Ickes in 1933 was read at the Hearings before the Senate Interior and Insular Affairs Committee on S.J.Res. 13, etc., 83d Cong., 1st Sess. 68. And see note 7, supra, and accompanying text.
19
Senator Holland mentioned an incomplete list prepared by California of 195 such instances involving all coastal States, and he discussed two specific grants from Florida to the Federal Government. Hearings before the Senate Interior and Insular Affairs Committee on S.J.Res. 13, etc., 83d Cong., 1st Sess. 63 64, 65, 66, and see Senator Daniel's statement at 233.
20
Texas Const.1845, Art. XIII, § 3, Vernon's Ann.St.Tex., continued in effect 'All laws * * * in force in the Republic of Texas,' thus including the 1836 Boundary Act. Republic of Texas Boundary Act, December 19, 1836, 1 Laws of the Republic of Texas 133 (3 leagues).
21
These provisions are found in Ala.Const., 1819, preamble 6 (leagues); Miss.Const., 1817, preamble (6 leagues); La.Const., 1812, LSA—Const., preamble (3 leagues).
From the beginning of the congressional hearings on the matter of the submerged lands, it has been clear to Congress that all the Gulf States' constitutional definitions of their boundaries have been a basis of their claims, without regard to the slight differences in language. These claims reappeared throughout the hearings. For illustration, an eight-page opinion of Dean Borchard of Yale appeared as 'Appendix B' to S.Rep.No.1260, 79th Cong., 2d Sess., as early as 1946. He stated: 'Examining the conduct of the States we find a series of provisions in State constitutions and statutes in which several States, e.g., Alabama, Florida, Georgia, Mississippi, Texas, and Louisiana, lay claim to a maritime boundary of 3 leagues, 6 leagues, or more.' Id., at 16.
During the 1953 hearings Senator Long of Louisiana was concerned by statements made by Senator Holland of Florida, the author of the bill, to the effect that only Florida and Texas would be entitled to three leagues.
'Senator Long. May I ask the Senator a question concerning my State? When Louisiana came into the Union, it is my recollection that the enabling act which was passed by Congress described the boundaries of Louisiana as including all islands within 3 leagues of the coast * * *.'
To this Senator Holland replied, 'The Senator from Florida has read and studied to some extent the question which the Senator from Louisiana has mentioned. The Senator from Florida thinks that the coast of Louisiana is that rim of islands, but the court might not so find when it went before the court.' Hearings before the Senate Interior and Insular Affairs Committee, 83d Cong., 1st Sess. 48.
22
By another opinion, handed down this day, we have held that Florida is entitled to a three-league marginal belt because Congress in 1868, 15 Stat. 73, expressly approved the Florida Constitution which precisely defined a three-league seaward boundary. United States v. State of Florida, 362 U.S. at page 121, 80 S.Ct. at page 1026.
23
See text accompanying notes 12 and 15, supra.
24
See note 22, supra.
25
'The committee believes that failure to continue existing State control will result in delaying for an indefinite time the intensive development now under way on these lands and that any delay is, in the words of Secretary Forrestal, 'contrary to the best interest of the United States from the viewpoint of national security.' * * * Local controls and promptness of action are highly desirable. The fixed, inflexible rules and the delays and remoteness which are inseparable from a centralized national control would, in the committee's judgment, be improvident.' S.Rep.No.133, 83d Cong., 1st Sess. 70, 71, from S.Rep.No.1592, 80th Cong., 2d Sess.
26
'Therefore, the committee concludes that in order to avoid injustices to the sovereign States and their grantees, legislative equity can best be done by the enactment of S.1988.' Id., at 68. And see notes 8—10, supra.
27
See discussion in Hearings before the Senate Interior and Insular Affairs Committee on S.J.Res. 13, etc., 83d Cong., 1st Sess. 341, and Joint Hearings before House Committee on Judiciary, Senate Special Judiciary Subcommittee on H.J.Res. 118, etc., 79th Cong., 1st Sess. 82.
28
See note 7, supra, for the statement of the Louisiana Registrar in 1945. She also said:
'For the fiscal year of 1944 my report shows that I have collected five and a half millions of dollars from this source. In fact the most productive area in the entire State is that in the maritime belt, or from lands beneath the tidewaters. * * *
'I would think that you gentlemen will readily understand what revenues of this size mean to the financial structure of Louisiana. * * * Terrebonne Parish, which is situated on the coast of Louisiana, received in 1944 $45,500 from the oil and gas production. Said funds are expended by the police jury for the benefit of the parish. It should certainly be obvious what this loss of revenue would mean to the taxpayers not only of this one parish but of the entire State.' Joint Hearings before House Committee on Judiciary, Senate Special Judiciary Subcommittee on H.J.Res. 118, etc., 79th Cong., 1st Sess. 82.
See note 8, supra, for the listing by Congress of these factors as going to the equity of the States' ownership (e.g., 'that the bonded indebtedness, school funds, and tax structures of several States are largely dependent upon State ownership of these lands * * *.' S.Rep.No.133, 83d Cong., 1st Sess. 67).
29
See note 31, infra.
30
'In order that there may be no misunderstanding, generally speaking what we have in mind is the 3-mile line, except for the coasts of Texas and the west coast of Florida, where 3 leagues would generally prevail.' Hearings before the Senate Committee on Interior and Insular Affairs on S.J.Res. 13, etc., 83d Cong., 1st Sess. 957. And see 926, 931—933, 957—958, and Senator Jackson's comments, at 279—281.
31
'The committee deems it imperative that Congress take action at the earliest possible date to clarify the endless confusion and multitude of problems resulting from the California decision, and thereby bring to a speedy termination this whole controversy. Otherwise inequities, injustices, vexatious and interminable litigation, and the retardment of the much needed development of the resources in these lands will inevitably result. * * * We are certain that until the Congress enacts a law consonant with what the States and the Supreme Court believed for more than a century was the law, confusion and uncertainty will continue to exist, titles will remain clouded, and years of vexations and complicated litigation will result.' S.Rep. No. 133, 83d Cong., 1st Sess. 57, 61, from S.Rep. No. 1592, 80th Cong., 2d Sess.
1
The Journal of the Joint Commission under date of May 21, 1840, states:
'* * * we proceeded to the entrance of the Sabine river into the Gulf of Mexico, and then, in virtue of our respective powers, and in conformity to the provisions of the convention between the two countries concluded at Washington the 25th day of April, 1838, we established the point of beginning of the boundary between the United States and the republic of Texas at a mound on the western bank of the junction of the river Sabine with the sea. * * * The mound was made by throwing up earth in a circular form of fifty feet in diameter, and about seven feet high at its centre. * * *' S.Doc.No.199, 27th Cong., 2d Sess. 59.
2
S.Exec.Doc.No.52, 30th Cong., 1st Sess. 83.
3
Id., at 82.
4
His first conference on January 2, 1848, was described in his own words as follows:
'President's message referred to by the Mexican Commissioners as founding our claim for extension of territory on the ground of indemnity for the expenses of the war. The causes of the war, & the question of justice in respect thereto, viewed by Mexico in a totally different light from that in which they are presented in the message. They propose arbitration as the first mode of settling this question and of determining the measure of indemnity justly due to the U. States. * * *' Papers of Nicholas P. Trist (Library Cong.1917), Vol. 27, fol. 61009.
5
H.R.Exec.Doc.No.8, 30th Cong., 1st Sess. 3.
6
Id., at 8.
7
Ibid.
8
Id., at 8—9.
9
President's Message to Congress, July 6, 1848, S.Exec.Doc.No.60, 30th Cong., 1st Sess. 1.
10
Id., at 2.
11
See Message of President Fillmore to Congress, Aug. 6, 1850, Cong.Globe, 31st Cong., 1st Sess. 1525—1526; letter from Daniel Webster, Secretary of State, to P. H. Bell, Governor of Texas, Aug. 5, 1850, id., at 1526—1527; remarks of Senator Pearce, sponsor of the bill, id., at 1540—1542.
12
The Court suggests, ante, note 100, that while the United States pressed Texas' claim to the three-league belt, Texas' claim to eastern New Mexico 'obviously was not pressed against Mexico on Texas' behalf.' Yet the evidence relied upon by the Court in finding that the United States pressed the Texas claim to a three-league belt supports no such distinction. The statement of President Polk to Congress (H.R.Exec.Doc.No.60, 30th Cong., 1st Sess. 4, 7) said, 'The Congress of Texas, by its act of December 19, 1836, had declared the Rio del Norte to be the boundary of that republic.' The instructions to John Slidell (S.Exec.Doc.No.52, 30th Cong., 1st Sess. 75) read, 'The Congress of Texas, by the act of December 19, 1836, have declared the Rio del Norte, from its mouth to its source, to be a boundary of that republic.' The Court relies on this evidence in finding that the United States was confirming the claims in the Texas act of 1836, insofar as it related to a seaward boundary but not insofar as the act claimed ownership of all land lying east of the Rio Grande. Since these communications expressly referred to the Texas claim to the territory east of the Rio Grande, from its mouth to its source, which included eastern New Mexico, whereas they were wholly silent on any claim to a seaward territory, the Court's conclusion that the seaward claim was pressed and approved while some territorial claims were not, seems fanciful to me.
13
S.Exec.Doc.No.52, 30th Cong., 1st Sess. 86.
14
Id., at 75.
15
Papers of Nicholas P. Trist (Library of Congress 1917), Vol. 33, fol. 62071.
16
These instructions authorized Slidell 'to pay five millions of dollars in case the Mexican government shall agree to establish the boundary between the two countries from the mouth of the Rio Grande, up the principal stream to the point where it touches the line of New Mexico; thence west of the river along the exterior line of that province, and so as to include the whole within the United States * * *.' S.Exec.Doc.No.52, 30th Cong., 1st Sess. 78.
17
H.R.Exec.Doc.No.1, Pt. 1, 44th Cong., 1st Sess. 641.
18
Id., at pages 649—650.
19
Chief Justice Marshall writing for the Court in Church v. Hubbart, 2 Cranch 187, 235, 2 L.Ed. 249, said:
'In different seas and on different coasts, a wider or more contracted range, in which to exercise the vigilance of the government, will be assented to. Thus in the channel, where a very great part of the commerce to and from all the north of Europe, passes through a very narrow sea, the seizure of vessels on suspicion of attempting an illicit trade, must necessarily be restricted to very narrow limits, but on the coast of South America, seldom frequented by vessels but for the purpose of illicit trade, the vigilance of the government may be extended somewhat further; and foreign nations submit to such regulations as are reasonable in themselves, and are really necessary to secure that monopoly of colonial commerce, which is claimed by all nations holding distant possessions.'
20
'Article XI. * * * The two contracting parties agree upon considering a distance of three marine leagues, measured from the line of low tide, as the limit of their territorial waters for everything relating to the vigilance and enforcement of the customs-house regulations and the necessary measures for the prevention of smuggling.' 1 Laws and Regulations on the Regime of the High Seas (United Nations Legislative Series) 147.
21
'Article 15. In all that concerns the police regulations of the ports, the loading and discharging of ships, and the custody of the merchandise and effects, the subjects of the two Powers shall be subject to the local laws and ordinances.
'With respect to Mexican ports, under this title are comprehended the laws and ordinances promulgated, or that may be promulgated in the future, by the federal Government, as also the dispositions of the local authorities within the limits of the sanitary police.
'The contracting parties agree to consider as the limit of the territorial jurisdiction on their respective coasts the distance of twenty kilometres, counted from the line of lowest tide. Nevertheless, this rule shall only be applied for the carrying out of the custom-house inspection, the observance of the custom-house regulations, and the prevention of smuggling; but on no account shall it apply to the other questions of international maritime law.
'It is equally understood that each one of the contracting parties shall not apply the said extension of the limit of jurisdiction to the ships of the other contracting party, except when this contracting Power proceeds in the same manner with the ships of the other nations with which it has treaties of commerce and navigation.' Id., at 153, 154.
22
'Article XXI. It is agreed between the High contracting parties that the limit of sovereignty in the territorial waters adjacent to their respective coasts comprises a distance of twenty kilometres, counted from the line of lowest tide: but this rule shall apply only as regards the exercise of the right of police, for the execution of customs ordinances and the prevention of smuggling, and in respect of matters concerning the security of the country. In no case shall such limit be applicable to other questions of international maritime law.' Id., at 156.
23
'Article 15. The contracting parties agree to consider as the limit of territorial sovereignty on their respective coasts a distance of twenty kilometres from the line of lowest tide.
'At all times this rule shall be applicable only for exercising customs control, for executing customs ordinances, and for the regulations against contraband, and shall never be applied, on the other hand, in all other questions of international maritime law. It is likewise understood that each of the contracting parties will apply said extent of the limit of sovereignty to the vessels of the other contracting party only provided that said contracting party acts likewise toward vessels of other nations with which it has made treaties of commerce and navigation.' Id., at 169, 170.
24
'Article VIII. * * * The two contracting parties agree to consider as the limit of maritime jurisdiction on their coasts, the distance of three sea leagues, reckoned from low-water mark. Nevertheless, this stipulation shall not have effect except as regards the coastguard and custom-house service, and the measures for preventing contraband trade. As regards all other questions of international law it shall have no application. It is, however, to be understood that the aforesaid extension of maritime jurisdiction shall not be made applicable by one of the contracting parties as against the vessels of the other, unless that party shall treat in the same manner the vessels of all other nations with which it may have treaties of commerce and navigation.' Id., at 170.
25
'Article 6. The high contracting parties agree to consider, as a limit of their territorial waters on their respective coasts, the distance of twenty kilometres reckoned from the line of low-water mark. Nevertheless this stipulation shall have no effect, except in what may relate to the observance and application of the custom-house regulations and the measures for preventing smuggling, and can in no way be extended to other questions of international maritime law.' Id., at 171.
26
'Article VII. * * * The two contracting parties agree to consider as the limit of territorial seas on their respective coasts for the purpose of applying customs regulations and measures necessary for the prevention of smuggling, the distance of three marine leagues reckoned from low-water mark. It is understood, however, that with
respect to other questions of international maritime law, this extension of territorial seas shall not be applied by one of the contracting parties to the vessels of the other, unless that party shall apply it equally to vessels of other nations with which she has concluded treaties of commerce and navigation.' Id., at 171 172.
27
'Article IV. * * * The two Contracting Parties agree to consider as a limit of their territorial waters on their respective coasts, the distance of three marine leagues, reckoned from the line of low-water mark. Nevertheless, this stipulation shall have no effect, excepting in what may relate to the observance and application of the custom-house regulations and the measures for preventing smuggling, and cannot be extended to other questions of civil or criminal jurisdiction, or of international maritime law.' Id., at 172.
28
1 Moore, Digest of International Law (1906), 730.
29
1 Hackworth, Digest of International Law (1940), 639.
30
99 Cong.Rec. 3623.
31
Ibid.
32
Id., at 3624.
33
American State Papers, 5 Public Lands 756. Both East and West Florida were ceded to the United States by Spain in 1819. 8 Stat. 252, 254.
34
See 7 British and Foreign State Papers 984; 9 British and Foreign State Papers 828—829; 18 British and Foreign State Papers 1403.
1
67 Stat. 29, 43 U.S.C. §§ 1301—1315, 43 U.S.C.A. §§ 1301 1315.
2
43 U.S.C. § 1301(a)(2), (b), 43 U.S.C.A. § 1301(a)(2), (b). Section 1301(b) provides: 'The term 'boundaries' includes the seaward boundaries of a State or its boundaries in the Gulf of Mexico * * * as they existed at the time such State became a member of the Union, or as heretofore approved by the Congress, * * * but in no event shall the term * * * be interpreted as extending from the coast line more than * * * three marine leagues into the Gulf of Mexico.' Section 1311(a) provides: 'It is * * * declared to be in the public interest that (1) title to and ownership of the lands beneath navigable waters within the boundaries of the respective States * * * be, and they are, * * * recognized, confirmed, established, and vested in and assigned to the respective States * * *.' And § 1312 provides: 'The seaward boundary of each original coastal State is approved and confirmed as a line three geographical miles distant from its coast line. * * * Nothing in this section is to be construed as questioning or in any manner prejudicing the existence of any State's seaward boundary beyond three geographical miles if it was so provided by its constitution or laws prior to or at the time such State became a member of the Union, or if it has been heretofore approved by Congress.'
3
The Florida Constitution of 1868, 25 Fla.Stat.Ann. 411, 413, was considered by Congress along with the constitutions of North Carolina, South Carolina, Louisiana, Georgia and Alabama in an Act of June 25, 1868, readmitting those States to 'representation in Congress.' 15 Stat. 73.
4
The Florida boundary described in Article I of that State's 1868 Constitution provided in relevant part: '* * * thence southeastwardly along the (Atlantic Ocean) coast to the edge of the Gulf Stream; thence southwestwardly along the edge of the Gulf Stream and Florida Reefs to and including the Tortugas Islands; thence northeastwardly to a point three leagues from the mainland; thence northwestwardly three leagues from the land, to a point west of the mouth of the Perdido river; thence to the place of beginning.' Emphasis supplied.)
5
The Florida Constitution of 1885, 25 Fla.Stat.Ann. 449, is that State's current constitution. Language identical to that set forth above, note 4, supra, provides, in the present Article I, for the same three-league boundary described in 1868. Id., 717.
6
See note 2, supra.
7
14 Stat. 428.
8
15 Stat. 2.
9
Debates on the 1868 Act, including discussions of the constitutions of the States to be readmitted to representation in Congress, are reported at Cong.Globe, 40th Cong., 2d Sess. 2412 2413, 2445—2456, 2461—2466, 2498—2499, 2858—2860, 2861—2872, 2895 2900, 2901—2904, 2927—2935, 2963—2970, 2998—3022, 3023—3029, 3052, 3090—3097, 3466, 3484—3485, App. 314—316, 329—338, 347—354.
10
See, e.g., the remarks of Senator Sherman. 'When we go beyond securing the enforcement of the guaranty of republican government, which we have the power to do, when we undertake to legislate for them upon matters on which they have passed, we transcend our bounds.' Cong.Globe, 40th Cong., 2d Sess. 2969. Senator Williams said: 'If I understand the reconstruction laws, it is not necessarily the duty of Congress to revise the constitution of every one of these States * * * (otherwise) we might just as well have made these constitutions at the beginning and sent them down there with instructions to the people to adopt them as the constitutions of the several States.' Id., 2999.
11
In opposing the inclusion of Florida in the Readmission bill, Congressman Paine, a member of the powerful Reconstruction Committee, said: '(I)t has been my duty as a member of the committee to scrutinize this constitution. I ought to explain to the House its character. After I have done that it will be for each member to decide himself whether he will or will not vote for concurrence.' Cong.Globe, 40th Cong., 2d Sess. 3091. See also discussion concerning the Arkansas Constitution, note 13, infra.
12
15 Stat. 73. As to this action a Congressman said: 'With a microscopic view the Committee on Reconstruction, or a majority of them, have looked into the details of the constitution of Georgia, and propose to strike out of it certain provisions.' (Emphasis supplied.) Cong.Globe, 40th Cong., 2d Sess. 3094.
13
'Now, all I have to say is this: this constitution of Arkansas has been before us for four weeks, fairly printed. * * * I think that this constitution is above all suspicion, and I am a little scrupulous and particular about any constitution I am called upon to vote for. Now, with a constitution with which I can find no fault, after it has been so long before us, i cannot for a moment conceive that there has not been time enough allowed for all of us to become acquainted with it. And as in equity that is presumed to be done which should be done, which ought to be done, therefore it is to be presumed that there is not a man in this House who does not know all about this constitution.' (Emphasis supplied.) Cong. Globe, 40th Cong., 2d Sess. 2399. Congressman Stevens was here referring to one State, Arkansas, 500 copies of whose constitution were printed for use of the members of the House of Representatives, Cong.Globe, 40th Cong., 2d Sess. 2333, 2372. The record shows that Florida's Constitution was referred to the Committee on Reconstruction and copies were printed for the use of the House. The congressional history indicates that all the constitutions were given equally close attention.
14
Brodie, Thaddeus Stevens (1959), 371. See also 17 Dictionary of American Biography (1935), 620, 624, and biographies cited at 625.
15
'Senator Long. When Congress approved the constitution of the State of Florida, fixing Florida's boundary on the Gulf side 3 leagues out into the sea, could there be any doubt in your mind that Congress in effect said to Florida that your boundary goes out 3 leagues and agreed to it? That certainly is not a unilateral act, is it?' Hearings before Senate Committee on Interior and Insular Affairs on S.J.Res. 13, S. 294, S. 107, S. 107 amendment, and S.J.Res. 18, 83d Cong., 1st Sess. 317. See also id., 323 and 326 for remarks that in 1868 'Congress approved' Florida's boundary, and 931 for Attorney General Brownell's acknowledgment that Florida's west coast would not be limited to the general three-mile line.
16
At pages 21—23 of this report may be found a legislative history of the submerged lands controversy. Appendix E, the Report of the Senate Judiciary Committee on the prior bill, contains further helpful background material.
*
(NOTE: This opinion applies also to United States v. Louisiana et al., 363 U.S. 161, 80 S.Ct. 961.)
*
For example, Senator Holland, the Senator from Florida, stated, in response to questioning on the precise issue:
'I have never contended in this debate, or anywhere else, for a 3-league limitation in the case of my State, except as fixed by its constitution and except as approved, I believe, by the Congress.
'If the Senator does not think we have a case which we can establish in court, why is he concerned about it? I am perfectly willing to rely upon that 3-league limit on our Gulf Coast, as stated in the Florida Constitution and as approved by the Congress, so I believe, in 1868.
'So it is very difficult for me to understand why those who oppose the pending joint resolution feel that there is something to fear, if they feel we have no firm case for that boundary. We do not spell out that firm case in the pending measure. In this measure we simply claim the right * * * to show—if it be a fact that we have a greater border than 3 miles, as we claim, in the Gulf of Mexico.
'Likewise we claim—and to come under this measure we would have to establish that claim—that that 3-league border was not only provided in our constitution, and is still there, but that it was approved when our constitution was approved by act of Congress.
'So if the Senator thinks that any link in that chain is unsafe and insecure, that should make him believe that Florida will not have the claimed 3-league boundary. * * *
'I am beginning to believe that my friends are fairly well convinced of the strength of the action taken by Congress, and are afraid that Florida does have a legal and a supportable claim to the 3-league boundary, because if the case were as weak as some Senators seem to believe it is, why would they be disturbed by the general wording of the pending joint resolution, which simply gives Florida its day in court?' 99 Cong.Rec. 2923.
1
More is required of Texas in this case because of the manner in which the Joint Resolution admitting Texas to the Union was drawn. See the Court's opinion relating to the other States, 363 U.S. at pages 44—47, 80 S.Ct. at pages 986—988.
2
In both cases, the description of the boundary fixed for the State by the event of admission was agreed upon—the 37th parallel in the Texas case, and the middle of the channel of the Rio Grande in the Colorado case. The actual physical location of those respective boundaries, however, ws in dispute. In the former, the Court held that the location of the boundary was fixed by the event of admission in accordance with a survey of the 37th parallel which had been theretofore made, even though it might not have been a correct survey. In the latter case, it held that since the location of the Rio Grande's channel in 1850 had been continuously accepted as the location of New Mexico's boundary prior to statehood, and had been so specified in its constitution when admitted to the Union, that became the location of the State's boundary.
3
In pertinent part the Act reads:
'Whereas the people of North Carolina, South Carolina, Louisiana, Georgia, Alabama, and Florida have, in pursuance of the provisions of an act entitled 'An act for the more efficient government of the rebel States,' passed March second, eighteen hundred and sixty-seven, and the acts supplementary thereto (see note 4, post), framed constitutions of State government which are republican, and have adopted said constitutions by large majorities of the votes
cast at the elections held for the ratification or rejection of the same: Therefore,
'Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That each of the States of North Carolina, South Carolina, Louisiana, Georgia, Alabama, and Florida, shall be entitled and admitted to representation in Congress as a State of the Union when the legislature of such State shall have duly ratified the amendment to the Constitution of the United States proposed by the Thirty-ninth Congress, and known as article fourteen, upon the following fundamental conditions: That the constitutions of neither of said States shall ever be so amended or changed as to deprive any citizen or class of citizens of the United States of the right to vote in said State, who are entitled to vote by the constitution thereof herein recognized, except as a punishment for such crimes as are now felonies at common law, whereof they shall have been duly convicted under laws equally applicable to all the inhabitants of said State: Provided, That any alteration of said constitution may be made with regard to the time and place of residence of voters; and the State of Georgia shall only be entitled and admitted to representation upon this further fundamental condition: that the first and third subdivisions of section seventeen of the fifth article of the constitution of said State, except the proviso to the first subdivision, shall be null and void, and that the general assembly of said State by solemn public act shall declare the assent of the State to the foregoing fundamental condition.'
4
Reliance is placed on the Act of March 2, 1867, 14 Stat. 428, providing for a State's readmission when, among other things, its 'constitution shall have been submitted to Congress for examination and approval, and Congress shall have approved the same * * *.' I find nothing in this provision, or in those of any of the other so-called reconstruction legislation, Act of March 23, 1867, 15 Stat. 2; Act of July 19, 1867, 15 Stat. 14; Act of March 11, 1868, 15 Stat. 41, which warrants the conclusion that the constitutions of the readmitted States were to be 'approved' by Congress, except in the sense that Congress must be satisfied that they had been duly adopted and were republican in form.
5
The following excerpts from the Congressional debates are typical of many others: 'Now, sir, what is the particular question we are considering? Five or six States have had submitted to them the question of forming constitutions for their own government. They have voluntarily formed such constitutions, under the direction of the Government of the United States. They have sent those constitutions here. * * * We have looked at them; we have pronounced them republican in form; and all we propose to require is that they shall remain so forever. Subject to this requirement, we are willing to admit them into the Union.' Representative Stevens of Pennsylvania, Cong.Globe, 40th Cong., 2d Sess. 2465.
'All previous fundamental conditions imposed upon a State being admitted into the Union have been upon one of two grounds, either that the clause in the State constitution objected to was in violation of the Constitution of the United States, or that it affected some great, material right, without which the government would not be republican in form. * * *
'When we go beyond securing the enforcement of the guaranty of republican government, which we have the power to do, when we undertake to legislate for them upon matters on which they have passed, we transcend our bounds.' Senator Sherman of Ohio, Cong.Globe, 40th Cong., 2d Sess. 2968, 2969.
6
In passing the Submerged Lands Act, Congress seems to have assumed that it has always had the power so to change a State's boundary, provided the State consents. For purposes of this case, we need not stop to inquire as to the source of the assumed power. It is sufficient to say that, whatever may be the power of Congress to change boundaries as a general matter, Congress clearly has the power to change boundaries, with a State's consent, to the extent that such a change affects only the exercise of property rights as between State and Nation.
7
15 Parliamentary History of England 1291, 1296, 1301.
8
2 White, A New Collection of Laws, Charters and Local Ordinances of Great Britain, France and Spain (1839), 292.
9
39 Journal of the House of Commons 722, 723.
10
8 Stat. 252, 254. The Treaty also provided: 'The adjacent islands dependent on said provinces, all public lots and squares, vacant lands, public edifices, fortifications, barracks, and other buildings, which are not private property, archives and documents, which relate directly to the property and sovereignty of said provinces, are included in this article.'
11
3 Stat. 654.
12
5 Stat. 742.
| 910
|
363 U.S. 166
80 S.Ct. 1158
4 L.Ed.2d 1124
FEDERAL TRADE COMMISSION, Petitioner,v.HENRY BROCH & COMPANY.
No. 61.
Argued Jan. 14 and 18, 1960.
Decided June 6, 1960.
Mr. Daniel M. Friedman, Washington, D.C., for petitioner.
Mr. Frederick M. Rowe, Washington, D.C., for respondent.
Mr. Henry J. Bison, Jr., Washington, D.C., for the National Association of Retail Grocers of the United States, as amicus curiae.
Mr. Justice DOUGLAS delivered the opinion of the Court.
1
Section 2(c) of the Clayton Act, as amended by the Robinson-Patman Act,1 makes it unlawful for 'any person' to make an allowance in lieu of 'brokerage' to the 'other party to such transaction.' The question is whether that prohibition is applicable to the following transactions by respondent.
2
Respondent is a broker or sales representative for a number of principals who sell food products. One of the principals is Canada Foods Ltd., a processor of apple concentrate and other products. Respondent agreed to act for the Canada Foods for a 5% Commission. Other brokers working for the same principal were promised a 4% Commission. Respondent's commission was higher because it stocked merchandise in advance of sales. Canada Foods established a price for its 1954 pack of apple concentrate at $1.30 per gallon in 50-gallon drums and authorized its brokers to negotiate sales at that price.
3
The J. M. Smucker Co., a buyer, negotiated with another broker, Phipps, also working for Canada Foods, for apple concentrate. Smucker wanted a lower price than $1.30 but Canada Foods would not agree. Smucker finally offered $1.25 for a 500-gallon purchase. That was turned down by Canada Foods, acting through Phipps. Canada Foods took the position that the only way the price could be lowered would be through reduction in brokerage. About the same time respondent was negotiating with Smucker. Canada Foods told respondent what it had told Phipps, that the price to the buyer could be reduced only if the brokerage were cut; and it added that it would make the sale at $1.25—the buyer's bid—if respondent would agree to reduce its brokerage from 5% To 3%. Respondent agreed and the sale was consummated at that price and for that brokerage. The reduced price of $1.25 was thereafter granted Smucker on subsequent sales. But on sales to all other customers, whether through respondent or other brokers, the price continued to be $1.30 and in each instance respondent received the full 5% Commission. Only on sales through respondent to Smucker were the selling price and the brokerage reduced.
4
The customary brokerage fee of 5% To respondent would have been $2,036.84. The actual brokerage of 3% Received by respondent was $1,222.11. The reduction of brokerage was $814.73 which is 50% Of the total price reduction of $1,629.47 granted by Canada Foods to Smucker.
5
The Commission charged respondent with violating § 2(c) of the Act, and after a hearing and the making of findings entered a cease-and-desist order against respondent. The Court of Appeals, while not questioning the findings of fact of the Commission, reversed. 261 F.2d 725. The case is here on writ of certiorari, 360 U.S. 908, 79 S.Ct. 1297, 3 L.Ed.2d 1259.
6
The Robinson-Patman Act was enacted in 1936 to curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power. A lengthy investigation revealed that large chain buyers were obtaining competitive advantages in several ways other than direct price, concessions2 and were thus avoiding the impact of the Clayton Act.3 One of the favorite means of obtaining an indirect price concession was by setting up 'dummy' brokers who were employed by the buyer and who, in many cases, rendered no services. The large buyers demanded that the seller pay 'brokerage' to these fictitious brokers who then turned it over to their employer. This practice was one of the chief targets of § 2(c) of the Act.4 But it was not the only means by which the brokerage function was abused5 and Congress in its wisdom phrased § 2(c) broadly, not only to cover the other methods then in existence but all other means by which brokerage could be used to effect price discrimination.6
7
The particular evil at which § 2(c) is aimed can be as easily perpetrated by a seller's broker as by the seller himself. The seller and his broker can of course agree on any brokerage fee that they wish. Yet when they agree upon one, only to reduce it when necessary to meet the demands of a favored buyer, they use the reduction in brokerage to undermine the policy of § 2(c). The seller's broker is clearly 'any person' as the words are used in § 2(c)—as clearly such as a buyer's broker.
8
It is urged that the seller is free to pass on to the buyer in the form of a price reduction any differential between his ordinary brokerage expense and the brokerage commission which he pays on a particular sale because § 2(a)7 of the Act permits price differentials based on savings in selling costs resulting from differing methods of distribution. From this premise it is reasoned that a seller's broker should not be held to have violated § 2(c) for having done that which is permitted under § 2(a). We need not decide the validity of that premise, because the fact that a transaction may not violate one section of the Act does not answer the question whether another section has been violated. Section 2(c), with which we are here concerned, is independent of § 2(a) and was enacted by Congress because § 2(a) was not considered adequate to deal with abuses of the brokerage function.8
9
Before the Act was passed the large buyers, who maintained their own elaborate purchasing departments and therefore did not need the services of a seller's broker because they bought their merchandise directly from the seller, demanded and received allowances reflecting these savings in the cost of distribution. In many cases they required that 'brokerage' be paid to their own purchasing agents. After the Act was passed they discarded the facade of 'brokerage' and merely received a price reduction equivalent to the seller's ordinary brokerage expenses in sales to other customers. When haled before the Commission, they protested that the transaction was not covered by § 2(c) but, since it was a price reduction, was governed by § 2(a). They also argued that because no brokerage services were needed or used in sales to them, they were entitled to a price differential reflecting this cost saving. Congress had anticipated such a contention by the 'in lieu thereof' provision.9 Accordingly, the Commission10 and the courts11 early rejected the contention that such a price reduction was lawful because the buyer's purchasing organization had saved the seller the amount of his ordinary brokerage expense.
10
In Great Atlantic & Pacific Tea Co. v. Federal Trade Comm., 3 Cir., 1939, 106 F.2d 667, a buyer sought to evade § 2(c) by accepting price reductions equivalent to the seller's normal brokerage payments. The court upheld the Commission's view that the price reduction was an allowance in lieu of brokerage under § 2(c) and was prohibited even though, in fact, the seller had 'saved' his brokerage expense by dealing directly with the select buyer. The buyer also sought to justify its price reduction on the ground that it had rendered valuable services to the seller. The court rejected this argument also. Although that court's interpretation of the 'services rendered' exception in § 2(c) has been criticized,12 its conclusion that the price reduction was an allowance in lieu of brokerage within the meaning of § 2(c) has been followed13 and accepted.14
11
We are asked to distinguish these precedents on the ground that there is no claim by the present buyer that the price reduction, concededly based in part on a saving to the seller of part of his regular brokerage cost on the particular sale, was justified by the elimination of services normally performed by the seller or his broker. There is no evidence that the buyer rendered any services to the seller or to the respondent nor that anything in its method of dealing justified its getting a discriminatory price by means of a reduced brokerage charge. We would have quite a different case if there were such evidence and we need not explore the applicability of § 2(c) to such circumstances. One thing is clear—the absence of such evidence and the absence of a claim that the rendition of services or savings in distribution costs justified the allowance does not support the view that § 2(c) has not been violated.
12
The fact that the buyer was not aware that its favored price was based in part on a discriminatory reduction in respondent's brokerage commission is immaterial. The Act is aimed at price discrimination, not conspiracy. The buyer's intent might be relevant were he charged with receiving an allowance in violation of § 2(c). But certainly it has no bearing on whether the respondent has violated the law. The powerful buyer who demands a price concession is concerned only with getting it. He does not care whether it comes from the seller, the seller's broker, or both.
13
Congress enacted the Robinson-Patman Act to prevent sellers and sellers' brokers from yielding to the economic pressures of a large buying organization by granting unfair preferences in connection with the sale of goods. The form in which the buyer pressure is exerted is immaterial and proof of its existence is not required. It is rare that the motive in yielding to a buyer's demands is not the 'necessity' for making the sale. An 'independent' broker is not likely to be independent of the buyer's coercive bargaining power. He, like the seller, is constrained to favor the buyers with the most purchasing power. If respondent merely paid over part of his commission to the buyer, he clearly would have violated the Act. We see no distinction of substance between the two transactions. In each case the seller and his broker make a concession to the buyer as a consequence of his economic power. In both cases the result is that the buyer has received a discriminatory price. In both cases the seller's broker reduces his usual brokerage fee to get a particular contract. There is no difference in economic effect between the seller's broker splitting his brokerage commission with the buyer15 and his yielding part of the brokerage to the seller to be passed on to the buyer in the form of a lower price.16
14
We conclude that the statute clearly applies to payments or allowances by a seller's broker to the buyer, whether made directly to the buyer, or indirectly, through the seller. The allowances proscribed by § 2(c) are those made by 'any person' which, as we have said, clearly encompasses a seller's broker.17 The respondent was a necessary party to the price reduction granted the buyer. His yielding of part of his brokerage to be passed on to the buyer was a sine qua non of the price reduction. This is not to say that every reduction in price, coupled with a reduction in brokerage, automatically compels the conclusion that an allowance 'in lieu' of brokerage has been granted. As the Commission itself has made clear, whether such a reduction is tantamount to a discriminatory payment of brokerage depends on the circumstances of each case. Main Fish Co., Inc., 53 F.T.C. 88. Nor does this 'fuse' provisions of § 2(a), which permits the defense of cost justification, with those of § 2(c) which does not; it but realistically interprets the prohibitions of § 2(c) as including an independent broker's allowance of a reduced brokerage to obtain a particular order.
15
It is suggested that reversal of this case would establish an irrevocable floor under commission rates. We think that view has no foundation in fact or in law. Both before and after the sales to Smucker, respondent continued to charge the usual 5% On sales to other buyers. There is nothing in the Act, nor is there anything in this case, to require him to continue to charge 5% On sales to all customers.18 A price reduction based upon alleged savings in brokerage expenses is an 'allowance in lieu of brokerage' when given only to favored customers. Had respondent, for example, agreed to accept a 3% Commission on all sales to all buyers there plainly would be no room for finding that the price reductions were violations of § 2(c). Neither the legislative history nor the purposes of the Act would require such an absurd result, and neither the Commission nor the courts have ever suggested it. Here, however, the reduction in brokerage was made to obtain this particular order and this order only and therefore was clearly discriminatory.
16
The applicability of § 2(c) to sellers' brokers under circumstances not distinguishable in principle from the present case is supported by a 20-year-old administrative interpretation. Beginning in 1940, four years after the Act was passed, the Commission restrained the practice of brokers who, whether buying and selling on their own account or acting on behalf of the seller, sold goods to purchasers who bought through them direct at a reduced price reflecting the savings made by the elimination of the services of a local broker. This practice was held to be a violation of § 2(c), not § 2(a).19
17
If we held that § 2(c) is not applicable here, we would disregard the history which we have delineated, overturn a settled administrative practice, and approve a construction that is hostile to the statutory scheme—one that would leave a large loophole in the Act. Any doubts as to the wisdom of the economic theory embodied in the statute are questions for Congress to resolve.
18
Reversed.
19
Mr. Justice WHITTAKER, with whom Mr. Justice FRANKFURTER, Mr. Justice HARLAN and Mr. Justice STEWART join, dissenting.
20
The Court holds, in effect, that the action of an independent broker, engaged by a seller, in reducing his contract rate of commission for the purpose of enabling the seller to make a sale to a buyer at a reduced price, constitutes the granting of an allowance in lieu of 'brokerage' by the broker to the buyer, in violation of § 2(c) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(c), 15 U.S.C.A. § 13(c).
21
Respondent, an independent broker of Chicago, Illinois, was engaged by Canada Foods, Ltd., of Kentville, Nova Scotia, to procure orders for its products upon a commission or 'brokerage' basis of 5% Of the amount of the sales made. Other independent brokers in the United States were similarly engaged by Canada Foods, but upon a commission or brokerage basis of 4%. Canada Foods had announced a price of $1.30 per gallon for its apple concentrate. Respondent and another independent broker, both acting on behalf of Canada Foods, separately solicited the J. M. Smucker Company of Orrville, Ohio, for an order for that product. Smucker was willing to purchase a quantity of the product, but would pay only $1.25 per gallon for it. Finally, respondent agreed with Canada Foods to reduce its commission or brokerage to 3% In order to permit the latter to accept the Smucker order. Thereupon, Canada Foods accepted and filled the order, and thereafter paid respondent a commission of 3% As agreed. Smucker, the buyer, was not advised that respondent had agreed to reduce its commission charge to the seller.
22
Thereafter, in what appears to be the first proceeding of this type, the Federal Trade Commission charged respondent with granting and allowing the buyer a portion of its brokerage fee, in violation of § 2(c) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(c), 15 U.S.C.A. § 13(c), and, after hearing, entered a cease-and-desist order against it. The Court of Appeals reversed, holding that respondent, an independent seller's broker, was not covered by § 2(c), and moreover had not paid anything of value as a commission, brokerage, or other compensation to the buyer. 261 F.2d 725. We granted certiorari, 360 U.S. 908, 79 S.Ct. 1297, 3 L.Ed.2d 1259.
23
In reversing the Court of Appeals, the Court now holds that § 2(c) 'clearly applies to payments or allowances by a seller's broker to the buyer, whether made directly to the buyer, or indirectly, through the seller.' In my view, no such question is presented on the admitted facts of this case, and the Court's holding is not supported by the terms nor the object of § 2(c), but is actually opposed to its declared purpose as shown by its legislative history.
24
Section 2(c) makes it 'unlawful for any person * * * to pay or grant * * * anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods * * * either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf * * * of any party to such transaction other than the person by whom such compensation is so granted or paid.'1 (Emphasis added.)
25
The phrase 'any person' in § 2(c) includes, of course, even a truly independent seller's broker. But that only poses the true question, which is whether an agreement by such a broker to reduce his commission charge to the seller, thus enabling the seller to reduce its price, constitutes the paying or granting by the broker of 'anything of value as a commission, brokerage, or other compensation,' or an 'allowance or discount in lieu thereof,' to the buyer.
26
There is no contention here that the buyer made any claim for 'anything of value as a commission, brokerage, or other compensation * * * for services rendered in connection with the * * * purchase of (the) goods,' either directly or through any intermediary. Rather, it is conceded that the buyer did not even know that respondent had agreed with the seller to reduce its commission charge. Nor is there any claim that respondent was 'acting in fact for or in behalf * * * of any party to such transaction other than the (seller) by whom (the concession in price was) granted.' Rather, it is conceded that it was not. Nor, indeed, is there any claim that respondent actually paid 'anything of value as a commission, brokerage, or other compensation' to the buyer or to any intermediary who was 'acting in fact for or in (its) behalf.' What and all respondent did was to reduce its charge to the seller for its services from 5% To 3%. It much surely be clear that this did not constitute a violation by respondent of the terms of § 2(c). For if it did, then all legitimate commission rates are frozen in destruction of competition, and in actual violation of the antitrust laws.
27
I turn now to the purpose of § 2(c) as shown by its legislative history. The motivating factor behind the enactment of § 2(c) was the elimination of the practice by large buyers of demanding and receiving price concessions in the guise of 'dummy brokerage' payments and 'allowances' for 'services' claimed to have been rendered to sellers, but which were not actually performed.2 It was Congress' purpose to eliminate that evil. Accordingly, it designed § 2(c) to prohibit payments or allowances of 'anything of value as a commission, brokerage, or other compensation' by a seller to a buyer, directly or through an intermediary, 'where such intermediary is acting in fact for or in behalf (of the buyer).'3 Although Congress took the view that neither a party to the transaction nor his intermediary could perform legitimate services for the other party, § 2(c) was not intended to and did not proscribe payments by a seller or a buyer to his own broker for services actually rendered to him, nor did Congress intend to fix or freeze brokerage rates or otherwise interfere with such legitimate brokerage operations.4 The purpose of § 2(c), as shown by the legislative history referred to, was not to embrace or affect legitimately negotiated rates of commission for brokers' services.
28
As I have pointed out, this is not a case where the buyer has claimed or received, either directly or through its intermediary, any 'brokerage' 'allowance,' or discount in price, as compensation for services.5 Nor has the buyer obtained any allowance or discount because of any 'savings' claimed to have been effected for the seller through elimination by the buyer or his broker of services normally performed by the seller or his broker.6 I am, therefore, unable to see or understand how it may be thought that the action of respondent in reducing its charge to the seller from 5% To 3% Constituted the granting, either directly or indirectly, of 'a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof' to the buyer, within the meaning of those terms as used in § 2(c). Since this case does not in any way involve any payment or allowance for services claimed to have been performed by the buyer or his intermediary, it is simply not the type or kind of case that is covered and governed by § 2(c). Inasmuch as the legislative history of § 2(c) shows that Congress did not intend that section to affect negotiated charges for legitimate brokerage services, I submit that the Court ought not so extend it by construction.
29
Until today, it seems always to have been generally understood that a truly independent broker, such as respondent, was free to negotiate the rate or amount of his commissions with this principal without fear of violating § 2(c).7 Such was the expressed congressional intention.8 Surely if the rate or amount of respondent's commissions for services rendered to Canada Foods had been left to negotiation on each sale, no one would contend that an agreement by respondent to accept a commission of 3% For the sale in question would violate § 2(c). Likewise, there could be no violation of § 2(c) if, instead of dealing through a broker who charged a 5% Commission, the seller had dealt through a broker who charged only 3%. But the Court now holds that an independent seller's broker who has once agreed with the seller on a general rate of commission may not renegotiate that rate with his principal in order to effect a sale that would otherwise be lost to him. The fact that respondent and the seller had previously entered into an agreement concerning commission rates should not, in my view, be controlling, for I can see no sound reason why the seller and his broker must regard such an agreement as establishing an irrevocable floor under commission rates or amounts in order to avoid antitrust consequences. The Court's holding appears to me to be an unwarranted interference with legitimate brokerage operations, in direct contravention of congressional intent.
30
Quite obviously, the Court's real concern in this case is with the price reduction which this particular buyer has received. But, while it was the aim of the Robinson-Patman Act to eliminate discriminatory price advantages which particular buyers might obtain through unfair means, it should be borne in mind that Congress did not choose to condemn all price differences between purchasers. Section 2(a), designed to deal with outright price discriminations between purchasers which may lessen competition, contains, for example, a proviso to the effect that 'nothing * * * shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered.'9 This proviso was incorporated for the purpose of 'preserving for the public the benefits of efficient marketing methods while at the same time subjecting to the prohibitions of the statute those 'unearned' price differentials which could not be reasonably related to some savings in the seller's costs of manufacture, sale, or delivery.' Report of the Attorney General's National Committee to Study the Antitrust Laws (1955), p. 171. See also H.R.Rep.No. 2287, 74th Cong., 2d Sess., pp. 9—10.
31
It was the evident intention of Congress in § 2(a) to permit sellers to pass through to buyers, in the form of reduced prices, any true savings in the cost of distribution of their goods. There appears to be no basis for ascribing to Congress an intention by § 2(c) to require a seller who uses the services of a broker in some sales to do so in all sales, or to require that brokerage rates be static. Yet this would be the effect of the Commission's contention that a sale made directly by such a seller to a buyer at a price that does not include any brokerage constitutes the granting by the seller to the buyer of brokerage or an allowance in lieu of brokerage under § 2(c).10 Since a reduction (or even elimination) of legitimate brokerage fees paid by the seller to an independent broker representing him might well constitute a true saving in the cost of one phase of the marketing process, such a reduction may, in proper circumstances validly justify a reduction in price to a particular buyer.11 Once this fact is recognized, and is coupled with an understanding that the real purpose of § 2(c) was to prohibit allowances by a seller based on services claimed to have been performed, to the benefit of the seller, by the buyer or his broker, I would think there is no choice but to conclude that the transaction here in question was one which Congress contemplated would be actionable only in a proceeding under § 2(a), subject to any valid 'cost justification' defense. The high standards of proof required to sustain a 'cost justification' defense in a § 2(a) proceeding eliminate any possibility of establishing as a true cost saving any reduction in brokerage commissions made as a subterfuge for the granting of an allowance or discount as a rebate to a buyer, whether or not as the result of coercive pressure of the buyer upon the seller or his broker.12
32
However, under the expansive reading which the Court now gives § 2(c), in opposition, I believe, to its legislative history, this provision may now be applied to prohibit a price reduction granted by a seller to a buyer, even though such price reduction may be well based solely on true savings arising from a reduction in the cost of legitimate brokerage services performed by the seller's own broker. I am unable to perceive any basis for a conclusion that respondent's reduction of its brokerage charge to the seller, and the seller's consequent reduction in price to the buyer, violated the provisions of § 2(c). That conclusion seems to me to be an obvious thwarting of the intention of Congress to allow true cost savings to be passed through to buyers.
33
Indeed, the Court itself seems to display some concern for the potential sweep of today's decision. It declares that its interpretation of the statute includes 'an independent broker's allowance of a reduced brokerage to obtain a particular order,' and it is at pains to point out that 'the reduction in brokerage was made to obtain this particular order and this order only and therefore was clearly discriminatory.' The Court also asserts that its holding in this case should not be understood to mean 'that every reduction in price, coupled with a reduction in brokerage, automatically compels the conclusion that an allowance 'in lieu' of brokerage has been granted,' indicating that 'whether such a reduction is tantamount to a discriminatory payment of brokerage depends on the circumstances of each case.' Even further, the Court makes it clear that it does not intend to approve any absolute rule that § 2(c) is violated in every case where savings in brokerage are passed on to buyers—justifying its holding in this case by stating that 'the 'savings' in brokerage were passed on to a single buyer who was not shown in any way to have deserved favored treatment.'
34
To me these efforts by the Court to so limit its holding represent a clear recognition of the fact that in some cases a reduction or elimination of brokerage costs might well justify a valid reduction in price by a seller to a particular buyer, and, in such cases, the Court is apparently quite prepared to hold that § 2(c) would not be violated. But as I read § 2(c), either its terms are not applicable to any case where a price reduction results from a reduction in the seller's legitimate brokerage costs, or they are applicable to all such cases. Section 2(c) does not expressly require discrimination between purchasers as an element of its proscriptions, nor does it provide any defenses based on legitimate savings in brokerage costs; only § 2(a) contains such provisions. And as we said just last Term, in construing § 2(e) of the Act, '(w)e cannot supply what Congress has studiously omitted.' Federal Trade Comm. v. Simplicity Pattern Co., 360 U.S. 55, 67, 79 S.Ct. 1005, 1012, 3 L.Ed.2d 1079.
35
I can only conclude that, by leaving the door open for cases in which a reduction in price based on a saving in the seller's brokerage costs may, in its view, be validly justified, the Court has done one of two things. Either it has, in this § 2(c) case, recognized and applied the true purposes and policies underlying § 2(a), tested the validity of a 'cost justification' defense in this case under that section, and concluded sub silentio that none could be made out here, or it has, despite our holding in Simplicity Pattern, supra, and notwithstanding its own disclaimer, fused the provisions of § 2(a) with those of § 2(c) and thereby weakened materially the per se thrust which Congress intended that § 2(c), when applicable, would have.
36
In my view, § 2(c) is not applicable to any case of this type, for in such a case there is no payment of 'brokerage' or an 'allowance or discount in lieu thereof' to the buyer, as I understand the meaning of those terms as used in the statute. For me, every case presenting this type of situation is actionable only under § 2(a), for it seems clear that § 2(a), which is expressly concerned with discrimination between purchasers, with effects on competition, and with the possible existence of true cost savings, was designed by Congress to cover this type of case. And in a § 2(a) proceeding, the challenged party will be afforded an opportunity to establish the validity of the price reduction in question—an opportunity not afforded under the terms of § 2(c). The Court's adroit footwork in this regard serves quite effectively to illustrate the reasons why I think the case before us is one which Congress intended should be actionable under § 2(a), rather than § 2(c), and I would therefore affirm the judgment of the Court of Appeals.
1
Section 2(c) makes it unlawful for 'any person * * * to pay or grant * * * anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods * * * either to the other party to such transaction or to an * * * intermediary therein * * *.' (Emphasis supplied.) 49 Stat. 1527, 15 U.S.C.A. § 13(c).
2
See Final Report on the Chain-Store Investigation, S.Doc. No. 4, 74th Cong., 1st Sess. (1935).
3
Section 2 of the Clayton Act as originally enacted in 1914 (38 Stat. 730) applied only to price discriminations the effect of which was to 'substantially lessen competition or tend to create a monopoly.' This section was modified and retained in § 2(a) as amended by the Robinson-Patman Act. See note 7, infra.
4
See S.Rep. No. 1502, 74th Cong., 2d Sess., p. 7; H.R.Rep. No. 2287, 74th Cong., 2d Sess., pp. 14—15; Federal Trade Comm. v. Simplicity Pattern Co., 360 U.S. 55, 69, 79 S.Ct. 1005, 1013, 3 L.Ed.2d 1079.
5
In the Final Report on the Chain-Store Investigation, note 2, supra, Congress had before it examples not only of large buyers demanding the payment of brokerage to their agents but also instances where buyers demanded discounts, allowances, or outright price reductions based on the theory that fewer brokerage services were needed in sales to these particular buyers, or that no brokerage services were necessary at all. Id., at 25, 63. These transactions were described in the report as the giving of 'allowances in lieu of brokerage' (id., at 62) or 'discount(s) in lieu of brokerage.' Id., at 27.
6
The Report of the House Judiciary Committee described the brokerage provision as dealing 'with the abuse of the brokerage function for purposes of oppressive discrimination.' H.R.Rep. No. 2287, 74th Cong., 2d Sess., p. 14. And although not mentioned in the Committee Reports, the debates on the bill show clearly that § 2(c) was intended to proscribe other practices such as the 'bribing' of a seller's broker by the buyer. See 80 Cong.Rec. 7759 7760, 8111-8112.
7
Section 2(a) 15 U.S.C. § 13(a), 15 U.S.C.A. § 13(a), provides, in relevant part: 'It shall be unlawful for any person engaged in commerce * * * to discriminate in price between different purchasers of commodities of like grade and quality * * * where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly * * * or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing * * * shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, of delivery resulting from the differing methods or quantities in which such commodities are * * * sold or delivered.'
8
The bill as reported from the Senate Committee excepted savings in brokerage from the cost proviso in § 2(a). S.Rep. No. 1502, 74th Cong., 2d Sess., p. 5. Yet when the bill was finally passed, the reference to brokerage in § 2(a) had been deleted. This was done, according to the Conference Report, 'for the reason that the matter of brokerage is dealt with in a subsequent subsection of the bill.' H.R.Conf.Rep.No. 2951, 74th Cong., 2d Sess., p. 6. By striking the words 'other than brokerage' from § 2(a) we think Congress showed both an intention that 'legitimacy' of brokerage be governed entirely by § 2(c) and an understanding that the language of § 2(c) was sufficiently broad to cover allowances to buyers in the form of price concessions which reflect a differential in brokerage costs. The legislative history is barren of any indication that a change in substance was intended by this deletion. Indeed, the Conference Report clearly precludes any other inference.
9
The brokerage clause in the bill was originally directed only at outright commission payments by sellers to buyers' agents. The Senate added the phrases 'or any allowance or discount in lieu thereof,' and 'either to the other party to such transaction (or his intermediary).' S.Rep. No. 1502, 74th Cong., 2d Sess., p. 7. 'This phrasing of the law was obviously designed to prevent evasion of the restriction through a mere modification of the form of the sales contract. It was assumed that large buyers would seek to convert the brokerage which they had hitherto received into an outright price reduction.' Zorn and Feldman, Business Under the New Price Laws (1937), 219.
10
The Commission has held that a price reduction to favored buyers, who bought direct without the intervention of a broker, which was equivalent to brokerage currently paid by the seller to its brokers for sales to other customers was a violation of § 2(c). It has issued cease-and-desist orders against buyers in, e.g., The Great Atlantic & Pacific Tea Co., 26 F.T.C. 486 (1938), affirmed 3 Cir., 1939, 106 F.2d 667; General Grocer Co., 33 F.T.C. 377 (1941); Giant Tiger Corporation, 33 F.T.C. 830 (1941); UCO Food Corporation, 33 F.T.C. 924 (1941); R. C. Williams & Co., 33 F.T.C. 1182 (1941); A. Krasne, Inc., 34 F.T.C. 121 (1941); and against sellers in Ramsdell Packing Co., 32 F.T.C. 1187 (1941); The Union Malleable Mfg. Co., 52 F.T.C. 408 (1955). See also several memorandum decisions reported in 32 F.T.C. 1192, 1193 (1941).
11
Great Atlantic & Pacific Tea Co. v. Federal Trade Comm., 3 Cir., 1939, 106 F.2d 667; Southgate Brokerage Co. v. Federal Trade Comm., 4 Cir., 1945, 150 F.2d 607 (buyer's broker buying and selling on his own behalf).
12
See Report of the Attorney General's National Committee to Study the Antitrust Laws (1955) 192, 193; Oppenheim, Federal Antitrust Legislation: Guideposts to a Revised National Antitrust Policy, 50 Mich.L.Rev. 1139, 1207, n. 178; Rowe, Price Discrimination, Competition, and Confusion: Another Look at Robinson-Patman, 60 Yale L.J. 929, 957—958.
13
Southgate Brokerage Co. v. Federal Trade Comm., supra, note 11. See also cases cited, note 10, supra.
14
In speaking of these interpretations of § 2(c), a leading authority said:
'Here too the Commission and the court have applied the Congressional intent with precision. If Congress envisaged the evil as the transmission of brokerage commissions to the buyer, then to permit the buyer to get the same thing under 2(a) in another form and name would deprive 2(c) of all substance.' Oppenheim, Administration of the Brokerage Provision of the Robinson-Patman Act, 8 Geo.Wash.L.Rev. 511, 535.
15
See Oliver Bros., Inc. v. Federal Trade Comm., 4 Cir., 102 F.2d 763, 770.
16
The Conference Report states that § 2(c) 'prohibits the direct or indirect payment of brokerage except for such services rendered.' (Italics supplied.) H.R.Conf.Rep. No. 2951, 74th Cong., 2d Sess., p. 7.
17
Several writers, including one of the co-authors of the Act, have viewed § 2(c) as covering payments or allowances by sellers' brokers for the benefit of particular buyers. See Patman, The Robinson-Patman Act (1938), 102, 108; Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act, Am.L.Inst. (rev. ed. 1953), 108. (See also 2d rev. ed., 1959, 116); Oppenheim, Administration of the Brokerage Provision of the Robinson-Patman Act, 8 Geo.Wash.L.Rev. 511, 544 (1940); Edwards, The Price Discrimination Law (1959), 104. As Patman, op. cit., supra, at 102, states respecting seller's brokerage, 'To waive the cost of the brokerage or commission to one purchaser and assess it against another represents an unfair discrimination between the purchasers, is an attempt to divorce one item of cost from the rest when, in fact, they all make up the whole, and permits a practice to gain foothold which may increase in such proportions as to demoralize the industry of which it is a part.'
18
Cf. Robinson v. Stanley Home Products, Inc., 1 Cir., 272 F.2d 601, where it was held that § 2(c) was not violated by a seller who eliminated the services of a broker entirely, converted to direct selling, and thereafter reduced his prices.
19
See Albert W. Sisk & Son, 31 F.T.C. 1543 (1940); C. F. Unruh Brokerage Co., 31 F.T.C. 1557 (1940); C. G. Reaburn & Co., 31 F.T.C. 1565 (1940); William Silver & Co., 31 F.T.C. 1589 (1940); H. M. Ruff & Son, 31 F.T.C. 1573 (1940); Thomas Roberts & Co., 31 F.T.C. 1551 (1940); American Brokerage Co., Inc., 31 F.T.C. 1581 (1940); W. E. Robinson & Co., 32 F.T.C. 370 (1941); Custom House Packing Corp., 43 F.T.C. 164 (1946).
We need not view this administrative practice as laying down an absolute rule that § 2(c) is violated by the passing on of savings in broker's commissions to direct buyers, for here, as we have emphasized, the 'savings' in brokerage were passed on to a single buyer who was not shown in any way to have deserved favored treatment.
1
Section 2(c), 15 U.S.C. § 13(c), 15 U.S.C.A. § 13(c), provides in full that:
'It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.'
2
'Among the prevalent modes of discrimination at which this bill is directed, is the practice of certain large buyers to demand the allowance of brokerage direct to them upon their purchases, or its payment to an employee, agent, or corporate subsidiary whom they set up in the guise of a broker, and through whom they demand that sales to them be made. Whether employed by the buyer in good faith to find a source of supply, or by the seller to find a market, the broker so employed discharges a sound economic function and is entitled to appropriate compensation by the one in whose interest he so serves. But to permit its payment or allowance where no such service is rendered, where in fact, if a 'broker,' so labeled, enters the picture at all, it is one whom the buyer points out to the seller, rather than one who brings the buyer to the seller, is but to permit the corruption of this function to the purposes of competitive discrimination. The relation of the broker to his client is a fiduciary one. To collect from a client for services rendered in the interest of a party adverse to him, is a violation of that relationship; and to protect those who deal in the streams of commerce against breaches of faith in its relations of trust, is to foster confidence in its processes and promote its wholesomeness and volume.' S.Rep. No. 1502, 74th Cong., 2d Sess., p. 7. See also H.R.Rep. No. 2287, 74th Cong., 2d Sess., pp. 14—15.
3
'Section ((c)) permits the payment of compensation by a seller to his broker or agent for services actually rendered in his behalf: Likewise by a buyer to his broker or agent for services in connection with the purchase of goods actually rendered in his behalf; but it prohibits the direct or indirect payment of brokerage except for such services rendered. It prohibits its allowance by the buyer direct to the seller, or by the seller direct to the buyer; and it prohibits its payment by either to an agent or intermediary acting in fact for or in behalf, or subject to the direct or indirect control, of the other.' H.R.Rep. No. 2287, 74th Cong., 2d Sess., p. 15. See also the Conference Committee Report, H.R.Conf.Rep. No. 2951, 74th Cong., 2d Sess., p. 7.
4
As stated by Senator Logan on the Senate floor:
'The bill has nothing to do with brokerage at all. The bill deals with schemes and shams used to bring about discriminations in prices. * * * A legitimate broker can charge whatever his employer may be willing to pay without the violation of any provisions of the proposed act.' 80 Cong.Rec. 3118.
'I shall now speak of the matter of brokerage. Let me say in the beginning that the bill does not affect legitimate brokerage either directly or indirectly. Where the broker renders service to the buyer or to the seller the bill does not prohibit the payment of brokerage. It is not aimed at the legitimate practice of brokerage, because brokerage is necessary. The broker has a field all his own and he should not be interfered with.' 80 Cong.Rec. 6281.
5
See Biddle Purchasing Co. v. Federal Trade Comm., 2 Cir., 96 F.2d 687; Oliver Bros., Inc., v. Federal Trade Comm., 4 Cir., 102 F.2d 763.
6
See Great Atlantic & Pacific Tea Co. v. Federal Trade Comm., 3 Cir., 106 F.2d 667, and Southgate Brokerage Co., Inc., v. Federal Trade Comm., 4 Cir., 150 F.2d 607, in which the buyer claimed to have effected a 'saving' in distribution costs for the seller because of services performed by the buyer's purchasing organization. Such cases must be distinguished from those in which the nature of the seller's own operation, without more, enables it to effect legitimate savings in brokerage and other distribution costs.
7
See, e.g., Report of the Attorney General's National Committee to Study the Antitrust Laws (1955) 190—191; Oppenheim, Federal Antitrust Legislation: Guideposts to a Revised National Antitrust Policy, 50 Mich.L.Rev. 1139, 1207, n. 178.
8
See note 4.
9
Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a), 15 U.S.C.A. § 13(a), provides, in pertinent part:
'It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality * * * where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing contained in sections 12, 13, 14—21, and 22—27 of this title shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered * * *.'
10
The Commission has expressed such a view in several early proceedings, see, e.g., Albert W. Sisk & Son, 31 F.T.C. 1543 (1940); C. F. Unruh Brokerage Co., 31 F.T.C. 1557 (1940); W. E. Robinson & Co., 32 F.T.C. 370 (1941); Ramsdell Packing Co., 32 F.T.C. 1187 (1941); Custom House Packing Corp., 43 F.T.C. 164 (1946), but that view is in conflict with the terms of § 2(c) and does not accord with the congressional intent.
11
When § 2(a) emerged from the Senate Committee, the 'cost justification' proviso contained an addition to the clause, permitting:
'* * * differentials which make only due allowance for differences in the cost, other than brokerage, of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered. * * *' (Emphasis added.)
This addition was explained as having been deemed necessary 'to harmonize this subsection with subsection ((c)) considered below, which deals directly with the question of brokerage.' S.Rep. No. 1502, 74th Cong., 2d Sess., p. 5.
In discussion on the Senate floor with respect to this addition, Senator Logan commented:
'I think perhaps legitimate brokerage ought to be allowed as a part of the costs; and I think when the bill was drafted—I did not write the bill—perhaps in the amendment which was inserted by the Judiciary Committee of the Senate we had in mind dummy brokerage, sham brokerage. It may be that something should be done about that. I call it to the attention of the Senate, so that some of the other Senators may consider it.' 80 Cong.Rec. 6285.
The Conference Committee then deleted the phrase 'other than brokerage' from the proviso, 'for the reason that the matter of brokerage is dealt with in a subsequent subsection of the bill.' H.R.Conf.Rep. No. 2951, 74th Cong., 2d Sess., p. 6.
In view of the meaning of 'brokerage' as used in § 2(c) and the elimination of the phrase 'other than brokerage' from the 'cost justification' proviso, it seems clear to me that a reduction in price based on savings in legitimate brokerage costs is among the reductions which Congress intended might be validly justified under the § 2(a) proviso.
12
I intimate no view on whether a valid 'cost justification' defense would be available in a § 2(a) proceeding on the facts of this case.
The Court of Appeals for the First Circuit has recently recognized the fundamental differences between § 2(a) and § 2(c), discussed here. Robinson v. Stanley Home Products, Inc., 1 Cir., 272 F.2d 601. See generally, Note, 57 Mich.L.Rev. 926.
Of course, § 2(f) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(f), 15 U.S.C.A. § 13(f), Which makes it 'unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section,' may be applicable in a proceeding against the buyer.
| 78
|
363 U.S. 144
80 S.Ct. 1146
4 L.Ed.2d 1109
George DE VEAU, Appellant,v.John M. BRAISTED, Jr., as District Attorney of Richmond County.
No. 71.
Argued March 1, 1960.
Decided June 6, 1960.
Mr. Thomas W. Gleason, New York City, for appellant.
Mr. Thomas R. Sullivan, Staten Island, N.Y., for appellee.
Mr. Justice FRANKFURTER announced the judgment of the Court and delivered an opinion in which Mr. Justice CLARK, Mr. Justice WHITTAKER and Mr. Justice STEWART joined.
1
This is an action brought in the Supreme Court of Richmond County, New York, for a declaratory judgment regarding the constitutional validity of § 8 of the New York Waterfront Commission Act of 1953 (N.Y.Laws 1953, cc. 882, 883; McK.Unconsol.Laws, § 6700aa et seq.), and for an injunction restraining its operation. The section is claimed to be in conflict with the Supremacy Clause of the United States Constitution; it is also challenged under the Due Process Clause of the Fourteenth Amendment, and as an ex post facto law and bill of attainder forbidden by Art. I, § 10, of the Constitution.
2
The Waterfront Commission Act formulates a detailed scheme for governmental supervision of employment on the waterfront in the Port of New York. The relevant part of the specific provision, § 8, under attack follows:
3
'No person shall solicit, collect or receive any dues, assessments, levies, fines or contributions within the state from employees registered or licensed pursuant to the provisions of this act (pier superintendents, hiring agents, longshoremen and port watchmen) for or on behalf of any labor organization representing any such employees, if any officer or agent of such organization has been convicted by a court of the United States, or any state or territory thereof, of a felony unless he has been subsequently pardoned therefor by the governor or other appropriate authority of the state or jurisdiction in which such conviction was had or has received a certificate of good conduct from the board of parole pursuant to the provisions of the executive law to remove the disability.'
4
The compliant upon which this action is based makes the following allegations. Appellant was a member, and beginning in 1950 had been Secretary-Treasurer, of Local 1346, International Longshoremen's Association, a labor organization with offices in Richmond County, New York, representing 'employees registered or licensed pursuant to' the Waterfront Commission Act. As Secretary-Treasurer appellant had control of the Local's funds and also served as a bargaining representative. In 1920 appellant had pleaded guilty to a charge of grand larceny in New York and had received a suspended sentence. It is not alleged that appellant has ever applied for or received a pardon or a 'certificate of good conduct.' Three years after the enactment of the Waterfront Commission Act, in 1956, the President of the International Longshoremen's Association was informed by the appellee, who was and is the District Attorney of Richmond County, New York, that because of appellant's conviction § 8 of the Act prohibited any person from collecting dues on behalf of Local 1346, so long as appellant remained its officer or agent. Appellee threatened to prosecute anyone collecting dues for the Local while appellant remained its officer. By reason of § 8 and this threat appellant was suspended as an officer of Local 1346, whereupon he brought this action.
5
The appellee moved to dismiss the complaint, and for judgment on the pleadings in his favor. This motion was granted. The court, holding that appellant's 1920 conviction was a conviction for a felony within the meaning of § 8, sustained the validity of that section. 11 Misc.2d 661, 166 N.Y.S.2d 751. This judgment was affirmed by the Appellate Division of the Supreme Court, 5 A.D.2d 603, 174 N.Y.S.2d 596, and by the Court of Appeals of New York, 5 N.Y.2d 236, 183 N.Y.S.2d 793, 157 N.E.2d 165. See also Hazelton v. Murray, 21 N.J. 115, 121 A.2d 1. Since a statute of a State has been upheld by the highest court of the State against a federal constitutional attack, the case is properly here on appeal. 361 U.S. 806, 80 S.Ct. 51, 4 L.Ed.2d 53.1
6
Due consideration of the constitutional claims that are made requires that § 8 be placed in the context of the structure and history of the legislation of which it is a part. The New York Waterfront Commission Act was an endeavor by New York and New Jersey to cope with long-standing evils on their joint waterfront in the Port of New York. The solution which was evolved between the two States embodies not only legislation by each but also joint action by way of a constitutional compact between them, approved by Congress, including the establishment of a bi-state Waterfront Commission.
7
For years the New York waterfront presented a notoriously serious situation. Urgent need for drastic refrom was generally recognized. Thorough going investigations of the mounting abuses were begun in 1951 by the New York State Crime Commission and the Law Enforcement Council of New Jersey. After extensive hearings, the New York Crime Commission in May 1953 published a detailed report (4th Report of the New York State Crime Commission, New York State Leg.Doc.No.70 (1953)) on the evils its investigation disclosed and the legislative remedies these were thought to require. The Commission reported that the skulduggeries on the waterfront were largely due to the domination over waterfront employment gained by the International Longshoremen's Association, as then conducted. Its employment practices easily led to corruption, and many of its officials participated in dishonesties. The presence on the waterfront of convicted felons in many influential positions was an important causative factor in this appalling situation. It was thus described to Congress in the compact submitted by New York and New Jersey for its consent:
8
'* * * the conditions under which waterfront labor is employed within the Port of New York district are depressing and degrading to such labor, resulting from the lack of any systematic method of hiring, the lack of adequate information as to the availability of employment, corrupt hiring practices and the fact that persons conducting such hiring are frequently criminals and persons notoriously lacking in moral character and integrity and neither responsive or responsible to the employers nor to the uncoerced will of the majority of the members of the labor organizations of the employees; that as a result waterfront laborers suffer from irregularity of employment, fear and insecurity, inadequate earnings, an unduly high accident rate, subjection to borrowing at usurious rates of interest, exploitation and extortion as the price of securing employment and a loss of respect for the law; that not only does there result a destruction of the dignity of an important segment of American labor, but a direct encouragement of crime which imposes a levy of greatly increased costs on food, fuel and other necessaries handled in and through the Port of New York district.
9
'* * * many of the evils above described result not only from the causes above described but from the practices of public loaders at piers and other waterfront terminals; that such public loaders serve no valid economic purpose and operate as parasites exacting a high and unwarranted toll on the flow of commerce in and through the Port of New York district, and have used force and engaged in discriminatory and coercive practices including extortion against persons not desiring to employ them; * * *
10
'* * * stevedores have engaged in corrupt practices to induce their hire by carriers of freight by water and to induce officers and representatives of labor organizations to betray their trust to the members of such labor organizations.' 67 Stat. 541—542.
11
Shortly after the Crime Commission submitted its report, the Governor of New York conducted hearings based upon the Crime Commission report. As a result, a Waterfront Commission Act was introduced into and passed by the Legislatures of both States in June 1953. N.Y.Laws 1953, cc. 882, 883; N.J.Laws 1953, cc. 202, 203, N.J.S.A. 32:23—1 et seq.
12
Part I of both Acts constitutes what became the compact between the two States. This is the heart of the legislation. It establishes as a bi-state agency a Waterfront Commission of New York Harbor with power to license, register and regulate the waterfront employment of pier superintendents, hiring agents, longshoremen and port watchmen, and to license and regulate stevedores. It entirely prohibits one class of waterfront employment, public loading, found to be unnecessary and particularly infested with corruption. Manifestly, one of the main aims of the compact is to keep criminals away from the waterfront. The issue of licenses to engage in waterfront occupations, or the right to be registered, depends upon findings by the Commission of good character. In particular, past convictions for certain felonies constitute specific disabilities for each occupation, with discretion in the Commission to lift the disability, except in the case of port watchmen, where it constitutes an absolute bar to waterfront employment. A new procedure for the employment of longshoremen is also provided under the supervision of the Commission, replacing the archaic, corrupt 'shape-up.'
13
Under the requirement of Art. I, § 10, of the Constitution the compact was submitted to the Congress for its consent, and it was approved. This was no perfunctory consent. Congress had independently investigated the evils that gave rise to the Waterfront Commission Acts, and the Subcommittee of the Senate Committee on Interstate and Foreign Commerce had in a Report endorsed the state legislative solution embodied in these Acts. See S.Rep.No.653, 83d Cong., 1st Sess., pp. 49—50. After the compact's submission to Congress, hearings were held upon it by the Committee on the Judiciary of the House of Representatives, at which arguments were made by interested parties for and against the compact. Approval was recommended by both the House Judiciary Committee and the Senate Committee on Interstate and Foreign Commerce. The House Committee concluded that '(t)he extensive evidence of crime, corruption, and racketeering on the waterfront of the port of New York, as disclosed by the State investigations reported to this committee at its hearings and by the recent report of the Senate Committee on Interstate and Foreign Commerce (S.Rep.No. 653, supra), has made it clear beyond all question that the plan proposed by the States of New York and New Jersey to eradicate those public evils is urgently needed.' H.R.Rep.No.998, 83d Cong., 1st Sess., p. 1. The Senate Committee Report stated its conclusion in similar terms. S.Rep.No.583, 83d Cong., 1st Sess., p. 1. The compact was approved by Congress in August 1953. Act of Aug. 12, 1953, 67 Stat. 541, c. 427.
14
In addition to the compact, New York enacted, as Parts II and III of its 1953 Waterfront Commission Act, supplementary legislation dealing, in most part, with the administration of New York's responsibility under the compact. This supplementary legislation also contains two substantive provisions in furtherance of the objectives of the compact, but not calling for bi-state enforcement, and thus not included in the compact. These are § 8, which is here challenged, and a prohibition against loitering on the waterfront. New Jersey enacted a supplementary provision essentially similar to § 8. N.J.Laws 1953, c. 202, § 8, N.J.S.A. 32:23—80. Although § 8 does not require enforcement by the bi-state Waterfront Commission, and was therefore not formally submitted as part of the compact to Congress, in giving its approval to the compact Congress explicitly gave its authority to such supplementary legislation in accord with the objectives of the compact by providing in the clause granting consent '(t)hat the consent of Congress is hereby given to the compact set forth * * * and to the carrying out and effectuation of said compact, and enactments in furtherance thereof.'
15
In giving this authorization Congress was fully mindful of the specific provisions of § 8. Not only had § 8 already been enacted by the States as part of the Waterfront Commission Acts when the compact was submitted to Congress, but, in the hearings held before the House Committee on the Judiciary, it was specifically urged by counsel for the International Longshoremen's Association, as a ground of opposition to congressional consent, that approval of the compact by Congress would carry with it sanction of § 8. See Hearing before Subcommittee No. 3 of the Committee on the Judiciary, House of Representatives, 83d Cong., 1st Sess., on H.R.6286, H.R. 6321, H.R.6343, and S.2383, p. 136. The ground of objection to the section which is appellant's primary reliance here, namely, that it conflicts with existing federal labor policy, was urged as ground for rejecting the compact. It is in light of this legislative history that the compact was approved, and that congressional consent was given to 'enactments in furtherance thereof.'
16
With this background in mind, we come to consider appellant's objection that § 8 is in conflict with and therefore pre-empted by the National Labor Relations Act, specifically §§ 1 and 7 of that Act, 29 U.S.C. §§ 151, 157, 29 U.S.C.A. §§ 151, 157. The argument takes this course. Section 1 of the National Labor Relations Act declares a congressional purpose to protect 'the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.' Section 7 grants employees 'the right * * * to bargain collectively through representatives of their own choosing.' Under § 8 of the Waterfront Commission Act, waterfront employees do not have complete freedom of choice in the selection of their representatives, for if they choose a convicted felon the union is disabled from collecting dues. Thus, it is said, with reliance on Hill v. State of Florida, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782, there is a conflict and the state legislation must fall.
17
This is not a situation where the operation of a state statute so obviously contradicts a federal enactment that it would preclude both from functioning together or, at least, would impede the effectiveness of the federal measure. Section 8 of the Waterfront Commission Act does not operate to deprive waterfront employees of opportunity to choose bargaining representatives. It does disable them from choosing as their representatives ex-felons who have neither been pardoned nor received 'good conduct' certificates. The fact that there is some restriction due to the operation of state law does not settle the issue of pre-emption. The doctrine of pre-emption does not present a problem in physics but one of adjustment because of the interdependence of federal and state interests and of the interaction of federal and state powers. Obviously, the National Labor Relations Act does not exclude every state policy that may in fact restrict the complete freedom of a group of employees to designate 'representatives of their own choosing.' For example, by reason of the National Labor Relations Act a State surely is not forbidden to convict and imprison a defendant in a criminal case merely because he is a union official and therefore could not serve as a bargaining representative.
18
It would misconceive the constitutional doctrine of pre-emption—of the exclusion because of federal regulation of what otherwise is conceded state power—to decide this case mechanically on an absolute concept of free choice of representatives on the part of employees, heedless of the light that Congress has shed for our guidance. The relevant question is whether we may fairly infer a congressional purpose incompatible with the very narrow and historically explained restrictions upon the choice of a bargaining representative embodied in § 8 of the New York Waterfront Commission Act. Would Congress, with a lively regard for its own federal labor policy, find in this state enactment a true, real frustration, however dialectically plausible, of that policy?
19
In light of the purpose, scope and background of this New York legislation and Congress' relation to it, such an inference of incompatibility has no foundation. In this case we need not imaginatively summon the likely reaction of Congress to the state legislation, as a basis for ascertaining whether due regard for congressional purpose bars the state regulation. Here the States presented their legislative program to cope with an urgent local problem to the Congress, and the Congress unambiguously supported what is at the core of this reform. Had § 8 been written into the compact, even the most subtle casuistry could not conjure up a claim of pre-emption.
20
Here the challenged state legislation was not in terms approved by Congress, but was part of the legislative history and of the revealed purpose of the compact which was approved. Formal inclusion of § 8 in the compact was not called for since its enforcement was to be unilateral on the part of each State. Both New York and New Jersey enacted § 8 at the time they enacted the proposed compact. Section 8 is the same kind of regulation as is contained in the compact: it effectively disqualifies ex-felons from waterfront union office, just as the compact makes prior conviction of certain felonies a bar to waterfront employment, unless there is a favorable exercise of execulative discretion. The total state legislative program represents a drastic effort to rid the waterfront of criminal elements by generally excluding ex-felons. What sensible reason is there to suppose that Congress would approve the major part of this local effort, as it has expressly done through its approval of the compact, and disapprove its application to union officials who, as history proved, had emerged as a powerful and corrupting influence on the waterfront second to none?
21
This is not all. As we have seen, § 8 was brought to the attention of Congress as part of the legislation which would come into effect as an adjunct to the compact, and the objection was raised at that time and not heeded that § 8 unduly interfered with federal labor policy. Finally, it is of great significance that in approving the compact Congress did not merely remain silent regarding supplementary legislation by the States. Congress expressly gave its consent to such implementing legislation not formally part of the compact. This provision in the consent by Congress to a compact is so extraordinary as to be unique in the history of compacts. Of all the instances of congressional approval of state compacts—the process began in 1791, Act of Feb. 4, 1791, 1 Stat. 189, with more than one hundred compacts approved since—we have found no other in which Congress expressly gave its consent to implementing legislation. It is instructive that this unique provision has occurred in connection with approval of a compact dealing with the prevention of crime where, because of the peculiarly local nature of the problem, the inference is strongest that local policies are not to be thwarted.
22
The sum of these considerations is that it would offend reason to attribute to Congress a purpose to pre-empt the state regulation contained in § 8. The decision in Hill v. State of Florida, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782, in no wise obstructs this conclusion. An element most persuasive here, congressional approval of the heart of the state legislative program explicitly brought to its attention, was not present in that case. Nor was it true of Hill v. State of Florida, as it is here, that the challenged state legislation was part of a program, fully canvassed by Congress through its own investigations, to vindicate a legitimate and compelling state interest, namely, the interest in combatting local crime infesting a particular industry.
23
Appellant also asks us to find evidence of federal pre-emption of § 8 of the Waterfront Commission Act in the enactment by Congress of the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519, 29 U.S.C.A. § 401 et seq. Title V of the 1959 Act imposes restrictions upon union officers, and defines qualifications for such officers. Specifically, § 504(a) provides that '(n)o person * * * who has been convicted of, or served any part of a prison term resulting from his conviction of (a group of serious felonies) * * * shall serve—(1) as an officer, director, trustee, member of any executive board or similar governing body, business agent, manager, organizer, or other employee (other than as an employee performing exclusively clerical or custodial duties) of any labor organization * * * for five years after * * * such conviction or after the end of such imprisonment, unless prior to the end of such fiveyear period, in the case of a person so convicted or imprisoned, (A) his citizenship rights, having been revoked as a result of such conviction, have been fully restored, or (B) the Board of Parole of the United States Department of Justice determines that such person's service in any capacity referred to in clause (1) * * * would not be contrary to the purposes of this Act.' The fact that Congress itself has thus imposed the same type of restriction upon employees' freedom to choose bargaining representatives as New York seeks to impose through § 8, namely, disqualification of ex-felons for union office, is surely evidence that Congress does not view such a restriction as incompatible with its labor policies. Appellant, however, argues that any state disablement from holding union office on account of a prior felony conviction, such as § 8, which has terms at variance with § 504(a), is impliedly barred by it. Just the opposite conclusion is indicated by the 1959 Act, which reflects congressional awareness of the problems of pre-emption in the area of labor legislation, and which did not leave the solution of questions of pre-emption to inference. When Congress meant pre-emption to flow from the 1959 Act it expressly so provided. Sections 205(c) and 403, set out in the margin,2 are express provisions excluding the operation of state law, supplementing provisions for new federal regulation. No such pre-emption provision was provided in connection with § 504(a). That alone is sufficient reason for not deciding that § 504(a) pre-empts § 8 of the Waterfront Commission Act. In addition, two sections of the 1959 Act, both relevant to this case, affirmatively preserve the operation of state laws. That § 504(a) was not to restrict state criminal law enforcement regarding the felonies there enumerated as federal bars to union office is provided by § 604 of the 1959 Act: 'Nothing in this Act shall be construed to impair or diminish the authority of any State to enact and enforce general criminal laws with respect to (the same group of serious felonies, with the exception of exclusively federal violations, which are listed in § 504(a)).' And to make the matter conclusive, § 603(a) is an express disclaimer of pre-emption of state laws regulating the responsibilities of union officials, except where such pre-emption is expressly provided in the 1959 Act. Section 603(a) provides: 'Except as explicitly provided to the contrary, nothing in this Act shall reduce or limit the responsibilities of any labor organization or any officer, agent, shop steward, or other representative of a labor organization * * * under the laws of any State * * *.' In view of this explicit and elaborate treatment of pre-emption in the 1959 Act, no inference can possibly arise that § 8 is impliedly pre-empted by § 504(a).
24
Appellant's argument that § 8 of the Waterfront Commission Act is contrary to the Due Process Clause of the Fourteenth Amendment depends, as it must, upon the proposition that barring convicted felons from waterfront union office, unless they are pardoned, or receive a 'good conduct' certificate, is not, in the context of the particular circumstances which gave rise to the legislation, a reasonable means for achieving a legitimate state aim, namely, eliminating corruption on the waterfront.
25
In disqualifying all convicted felons from union office unless executive discretion is exercised in their favor, § 8 may well be deemed drastic legislation. But in the view of Congress and the two States involved the situation on the New York waterfront regarding the presence and influence of ex-convicts called for drastic action. Legislative investigation had established that the presence of ex-convicts on the waterfront was not a minor episode but constituted a principal corrupting influence. The Senate Subcommittee which investigated for Congress conditions on the New York waterfront found that '(c)riminals whose long records belie any suggestion that they can be reformed have been monopolizing controlling positions in the International Longshoremen's Association and in local unions. Under their regimes gambling, the narcotics traffic, loansharking, shortganging, payroll 'phantoms,' the 'shakedown' in all its forms—and the brutal ultimate of murder have flourished, often virtually unchecked.' S.Rep. No. 653, 83d Cong., 1st Sess. (1953), p. 7.
26
In light of these findings, and other evidence to the same effect,3 the Congress approved as appropriate if indeed not necessary a compact, one of the central devices of which was to bar convicted felons from waterfront employment, and from acting as stevedores employing others, either absolutely, or in the Waterfront Commission's discretion. No positions on the waterfront were more conducive to its criminal past than those of union officials, and none, if left unregulated, were felt to be more able to impede the waterfront's reform. Duly mindful as we are of the promising record of rehabilitation by ex-felons, and of the emphasis on rehabilitation by modern penological efforts, it is not for this Court to substitute its judgment for that of Congress and the Legislatures of New York and New Jersey regarding the social surgery required by a situation as gangrenous as exposure of the New York waterfront had revealed.
27
Barring convicted felons from certain employments is a familiar legislative device to insure against corruption in specified, vital areas. Federal law has frequently and of old utilized this type of disqualification. Convicted felons are not entitled to be enlisted or mustered into the United States Army, or into the Air Force, but 'the Secretary * * * may authorize exceptions, in meritorious cases.' 10 U.S.C. §§ 3253, 8253, 10 U.S.C.A. §§ 3253, 8253. This statute dates from 1833. A citizen is not competent to serve on federal grand or petit juries if he has been 'convicted in a state or federal court of record of a crime punishable by imprisonment for more than one year and and (sic) his civil rights have not been restored by pardon or amnesty.' 28 U.S.C. § 1861, 28 U.S.C.A. § 1861. In addition, a large group of federal statutes disqualify persons 'from holding any office of honor, trust, or profit under the United States' because of their conviction of certain crimes, generally involving official misconduct. 18 U.S.C. §§ 202, 205, 206, 207, 216, 281, 282, 592, 1901, 2071, 2381, 18 U.S.C.A. §§ 202, 205—207, 216, 281, 282, 592, 1901, 2071, 2381. For other examples in the federal statutes see 18 U.S.C. § 2387, 18 U.S.C.A. § 2387; 5 U.S.C. § 2282, 5 U.S.C.A. § 2282; 8 U.S.C. § 1481, 8 U.S.C.A. § 1481. State provisions disqualifying convicted felons from certain employments important to the public interest also have a long history. See, e.g., Hawker v. People of State of New York, 170 U.S. 189, 18 S.Ct. 573, 42 L.Ed. 1002. And it is to be noted that in § 504(a) of the 1959 Federal Labor Act, quoted earlier in this opinion, Congress adopted this same solution in its attempt to rid all unions of criminal elements. Just as New York and New Jersey have done, the 1959 Federal Act makes a prior felony conviction a bar to union office unless there is a favorable exercise of executive discretion. In the face of this wide utilization of disqualification of convicted felons for certain employments closely touching the public interest, remitting them to executive discretion to have the bar removed, we cannot say that it was not open to New York to clean up its waterfront in the way it has. New York was not guessing or indulging in airy assumptions that convicted felons constituted a deleterious influence on the waterfront. It was acting on impressive if mortifying evidence that the presence on the waterfront of ex-convicts was an important contributing factor to the corrupt waterfront situation.
28
Finally, § 8 of the Waterfront Commission Act is neither a bill of attainder nor an ex post facto law. The distinguishing feature of a bill of attainder is the substitution of a legislative for a judicial determination of guilt. See United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, 90 L.Ed. 1252. Clearly, § 8 embodies no further implications of appellant's guilt than are contained in his 1920 judicial conviction; and so it manifestly is not a bill of attainder. The mark of an ex post facto law is the imposition of what can fairly be designated punishment for past acts. The question in each case where unpleasant consequences are brought to bear upon an individual for prior conduct, is whether the legislative aim was to punish that individual for past activity, or whether the restriction of the individual comes about as a relevant incident to a regulation of a present situation, such as the proper qualifications for a profession. See Hawker v. People of State of New York, 170 U.S. 189, 18 S.Ct. 573, 42 L.Ed. 1002. No doubt is justified regarding the legislative purpose of § 8. The proof is overwhelming that New York sought not to punish ex-felons, but to devise what was felt to be a much-needed scheme of regulation of the waterfront, and for the effectuation of that scheme it became important whether individuals had previously been convicted of a felony.
29
Affirmed.
30
Mr. Justice HARLAN took no part in the consideration or decision of this case.
31
Mr. Justice BRENNAN is of opinion that Congress has demonstrated its intent that § 8 of the New York Waterfront Commission Act should stand despite the provisions of the National Labor Relations Act, and that the Labor-Management Reporting and Disclosure Act of 1959 explicitly provides that it shall not displace such legislation of the States. He believes that New York's disqualification of ex-felons from waterfront union office, on all the circumstances, and as applied to this specific area, is a reasonable means for achieving a legitimate state aim, and does not deny due process or otherwise violate the Federal Constitution. Accordingly, he agrees that the judgment should be affirmed.
32
Mr. Justice DOUGLAS, with whom The CHIEF JUSTICE and Mr. Justice BLACK concur, dissenting.
33
I could more nearly comprehend the thrust of the Court's ruling in this case if it overruled Hill v. State of Florida, 325 U.S. 538, 65 S.Ct. 1373, 89 L.Ed. 1782, and adopted the dissenting opinion in that case written by my Brother Frankfurter. But to sustain this New York law when we struck down the Florida law in the Hill case is to make constitutional adjudications turn on whimsical circumstances
34
The New York law makes a person ineligible to solicit funds on behalf of a labor union if he has been convicted of a felony. The Florida law made it unlawful for one to be a business agent for a union if he had been convicted of a felony. 325 U.S., at page 540, 65 S.Ct. at page 1374. In each the question is whether such a state restriction is compatible with the federal guarantee contained in § 7 of the National Labor Relations Act1 which reads as follows:
35
'Employees shall have the right to self-organization, to form join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection * * *.' The answer we gave in Hill v. State of Florida, supra, 325 U.S. at page 541, 65 S.Ct. at page 1374, was as follows:
36
'It is apparent that the Florida statute has been so construed and applied that the union and its selected representative are prohibited from functioning as collective bargaining agents, or in any other capacity, except upon conditions fixed by Florida. The declared purpose of the Wagner Act, as shown in its first section, is to encourage collective bargaining, and to protect the 'full freedom' of workers in the selection of bargaining representatives of their own choice. To this end Congress made it illegal for an employer to interfere with, restrain or coerce employees in selecting their representatives. Congress attached no conditions whatsoever to their freedom of choice in this respect. Their own best judgment, not that of someone else, was to be their guide. 'Full freedom' to choose an agent means freedom to pass upon that agent's qualifications.
37
'Section 4 of the Florida Act circumscribes the 'full freedom' of choice which Congress said employees should possess. It does this by requiring a 'business agent' to prove to the satisfaction of a Florida Board that he measures up to standards set by the State of Florida as one who, among other things, performs the exact function of a collective bargaining representative. To the extent that Section 4 limits a union's choice of such an 'agent' or bargaining representative, it substitutes Florida's judgment for the workers' judgment.'
38
Nothing has been done to change, in relevant part, the language of § 7 of the National Labor Relations Act since Hill v. State of Florida, supra. If § 7 foreclosed Florida from prescribing standards for union officials, I fail to see why it does not foreclose New York. Much is made of the fact that Congress, when it approved the Waterfront Commission Compact2 between New York and New Jersey, 67 Stat. 541, knew of the restrictions contained in § 8 of the New York Waterfront Commission Act3 now in litigation. But that is an argument that comes to naught when Art. XV, § 1 of the Compact is read:
39
'This compact is not designed and shall not be construed to limit in any way any rights granted or derived from any other statute or any rule of law for employees to organize in labor organizations, to bargain collectively and to act in any other way individually, collectively, and through labor organizations or other representatives of their own choosing. Without limiting the generality of the foregoing, nothing contained in this compact shall be construed to limit in any way the right of employees to strike.' (Italics added.)
40
Yet how can employees maintain their right to act through (representatives of their own choosing' if New York can tell them whom they may not choose?
41
Moreover the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519, 29 U.S.C. (1958 ed., Supp. I) § 401, 29 U.S.C.A. § 401, shows unmistakably that Congress has kept unto itself control over the qualifications of officers of labor unions. Section 2(a) of that Act provides in part:
42
'The Congress finds that, in the public interest, it continues to be the responsibility of the Federal Government to protect employees' rights to organize, choose their own representatives, bargain collectively, and otherwise engage in concerted activities for their mutual aid or protection * * *.'
43
Congress by § 504 of that Act has barred enumerated felons from holding union office 'during or for five years after' the conviction or end of imprisonment. That federal, not state, qualifications for union offices now obtain is made plain by § 604 of that Act.4 It provides as follows:
44
'Nothing in this Act shall be construed to impair or diminish the authority of any State to enact and enforce general criminal laws with respect to robbery, bribery, extortion, embezzlement, grand larceny, burglary, arson, violation of narcotics laws, murder, rape, assault with intent to kill, or assault which inflicts grievous bodily injury, or conspiracy to commit any of such crimes.' (Italics added.)
45
I do not know how Congress could make clear its twofold purpose: first, that federal standards are to determine the qualifications for holding union offices; and second, that enforcement of 'general criminal laws' by the States remains unimpaired.
46
What Congress did in approving the Waterfront Commission Compact and in adopting the Labor-Management Reporting and Disclosure Act of 1959 respected the integrity of Hill v. State of Florida, supra. We seem now to forsake it and in effect adopt the dissent in Hill v. State of Florida. That I cannot do. For the federal legislative record makes plain to me beyond doubt that Congress has left the qualifications for union offices to be determined by federal not state law. The Supremacy Clause of Article VI of the Constitution calls for a reversal of the judgment of the New York Court of Appeals. Hence I do not reach the other questions presented.
1
Appellee's claim that the cause is moot, since, after the commencement of this action, Local 1346 was disbanded and all employees under its jurisdiction came under the jurisdiction of a new local, Local 1, with offices in New York County, must fail. On the basis of what has been submitted to us, the new local is, in part, simply the old in a new dress.
2
Section 205(c) provides:
'* * * No person shall be required by reason of any law of any State to furnish to any officer or agency of such State any information included in a report filed by such person with the Secretary pursuant to the provisions of this title, if a copy of such report, or of the portion thereof containing such information, is furnished to such officer or agency * * *.'
Section 403 provides:
'No labor organization shall be required by law to conduct elections of officers with greater frequency or in a different form or manner than is required by its own constitution or bylaws, except as otherwise provided by this title. * * * The remedy provided by this title for challenging an election already conducted shall be exclusive.'
3
See, e.g., Hearings before Subcommittee No. 3 of the Committee on the Judiciary, House of Representatives, on H.R. 6286, H.R. 6321, H.R. 6346, and S. 2383, 83d Cong., 1st Sess. (1953), pp. 88, 97.
1
Section 1 of the Act declared as its purpose encouraging collective bargaining and protecting 'the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing.'
2
The Waterfront Commission Compact, which Congress approved, set up qualifications and licensing requirements for certain types of waterfront employment. It also called for the creation of employment information centers, to be administered by the bi-state regulatory agency, the purpose of which was to eliminate extortionate hiring practices and regularize employment by eliminating casual laborers from the registration rolls. It did not purport to regulate or set up qualifications for labor unions or labor representatives.
3
Section 8 of Part III of the Waterfront Commission Act of the State of New York, New York Laws 1953, c. 882, provides as follows:
'No person shall solicit, collect or receive any dues, assessments, levies, fines or contributions within the state from employees registered or licensed pursuant to the provisions of this act for or on behalf of any labor organization representing any such employees, if any officer or agent of such organization has been convicted by a court of the United States, or any state or territory thereof, of a felony unless he has been subsequently pardoned therefor by the governor or other appropriate authority of the state or jurisdiction in which such conviction was had or has received a certificate of good conduct from the board of parole pursuant to the provisions of the executive law to remove the disability.
'As used in this section, the term 'labor organization' shall mean and include any organization which exists and is constituted for the purpose in whole or in part of collective bargaining, or of dealing with employers concerning grievances, terms and conditions of employment, or of other mutual aid or protection; but it shall not include a federation or congress of labor organizations organized on a national or international basis even though one of its constitutent labor organizations may represent persons so registered or licensed.'
4
Section 603(a) of the 1959 Act provides in relevant part that 'Except as explicitly provided to the contrary, nothing in this Act shall reduce or limit the responsibilities of any labor organization or any officer, agent, shop steward, or other representative of a labor organization * * * under any other Federal law or under the laws of any State, and, except as explicitly provided to the contrary, nothing in this Act shall take away any right or bar any remedy to which members of a labor organization are entitled under such other Federal law or law of any State.'
This has reference to the fiduciary responsibilities created by § 501 of the Act and makes clear that these provisions of federal law do not pre-empt state law. As stated in S.Rep. No. 187, 86th Cong., 1st Sess., p. 19, 'Individual union members will therefore have a choice between suing in the State courts under the common law or invoking the provisions of the federal statute.'
There is no like provision which saves § 504 (the section that bars felons from holding union office) from pre-empting state law.
| 910
|
363 U.S. 192
80 S.Ct. 1048
4 L.Ed.2d 1142
Roy DOUGLASv.Lamoyne GREEN et al.
No. 438, Misc.
Decided June 6, 1960.
Roy Douglas, pro se.
Messrs.
Mark McElroy, Atty. Gen. of Ohio, and Aubrey A. Wendt, Asst. Atty. Gen., for respondent.
PER CURIAM.
1
The motion for leave to proceed in forma pauperis is granted. The petition for a writ of certiorari is also granted. Petitioner, a prisoner in an Ohio penitentiary, filed an application for a writ of habeas corpus in the District Court for the Northern District of Ohio. Among other claims, the petitioner alleged that the Ohio Supreme Court did not provide him, as an indigent criminal defendant, an adequate remedy for the prosecution of an appeal from his conviction without payment of docket fees. This deficiency was urged, as we read this lay petitioner's informal pro se application for the writ, as a violation of the Federal Constitution's guarantee of the equal protection of the laws. See Burns v. State of Ohio, 360 U.S. 252, 79 S.Ct. 1164, 3 L.Ed.2d 1209. The writ of habeas corpus was in effect denied by the District Court, that court denying petitioner, for want of merit, leave to proceed in forma pauperis before it. The District Court further denied a motion for leave to appeal in forma pauperis and the Court of Appeals sustained this action on the renewal of the motion before it.
2
We hold that petitioner's allegations in the application for the writ made out a case of deprivation of his constitutional right to the equal protection of the laws by Ohio in respect to his appeal from the conviction in the criminal prosecution against him. Clearly federal habeas corpus is an appropriate remedy under these circumstances. See Johnson v. Zerbst, 304 U.S. 458, 467—468, 58 S.Ct. 1019, 1024, 82 L.Ed. 1461; Burns v. State of Ohio, supra, 360 U.S. at page 262, 79 S.Ct. at page 1170 (dissenting opinion). In view of our decision in Burns as to the validity of the former Ohio practice, and Ohio's conformance, as we are advised, to the requirements of that decision, we think that the District Court should suspend a hearing on the writ for a reasonable time to allow petitioner to reapply to the Ohio Supreme Court for consideration of his appeal. Upon that court's action thereon, the District Court should proceed, upon hearing, to make such appropriate order in the premises, as under the circumstances 'law and justice require.' 28 U.S.C. § 2243, 28 U.S.C.A. § 2243. It may at that time consider, in the posture in which the case then stands, petitioner's other claims as to the constitutional adequacy of Ohio's appellate procedure in respect of his original conviction and his application for state collateral relief. To this end, the judgment is reversed and the cause is remanded to the District Court.
3
Reversed and remanded.
4
Mr. Justice STEWART took no part in the consideration or decision of this case.
| 12
|
363 U.S. 190
80 S.Ct. 1037
4 L.Ed.2d 1140
Wassil A. KRESHIKv.SAINT NICHOLAS CATHEDRAL.
No. 824.
Decided June 6, 1960.
Messrs. Philip Adler and Eugene Gressman, for petitioners.
Messrs. Ralph Montgomery Arkush and Charles H. Tuttle, for respondent.
PER CURIAM.
1
The motion for leave to proceed upon the record in No. 3, October Term 1952, and the petition for certiorari, are granted.
2
In a prior decision in this litigation, we held that the right conferred under canon law upon the Archbishop of the North American Archdiocese of the Russian Orthodox Greek Catholic Church, as the appointee of the Patriarch of Moscow, to the use and occupancy of the St. Nicholas Cathedral in New York City, owned by respondent corporation, was 'strictly a matter of ecclesiastical government,' and as such could not constitutionally be impaired by a state statute, New York Religious Corporations Law, McKinney's Consol.Laws, c. 51, Art. 5—C, purporting to bestow that right on another. Kedroff v. St. Nicholas Cathedral, 344 U.S. 94, 73 S.Ct. 143, 97 L.Ed. 120. We reversed a judgment of the New York Court of Appeals against the petitioners' predecessors in office, and remanded the case for 'further action * * * not in contravention' of our opinion. Id., 344 U.S. at page 121, 73 S.Ct. at page 157.
3
The Court of Appeals ordered a retrial of the question of petitioners' right to use and occupancy, on a common-law issue assertedly left open by our invalidation of the statutory basis for the former decision. 306 N.Y. 38, 114 N.E.2d 197. After trial, the Court of Appeals directed the entry of judgment against petitioners, holding that, by reason of the domination—so found by that court to be the fact—of the Patriarch by the secular authority in the U.S.S.R., his appointee could not under the common law of New York validly exercise the right to occupy the Cathedral. 7 N.Y.2d 191, 196 N.Y.S.2d 655, 164 N.E.2d 687.
4
As the opinions of the Court of Appeals make evident, compare 302 N.Y. 1, at pages 29—33, 96 N.E.2d 56, at pages 72—74, with 7 N.Y.2d at pages 209—216, 196 N.Y.S.2d at pages 667—673, 164 N.E.2d at pages 696—700, the decision now under review rests on the same premises which were found to have underlain the enactment of the statute struck down in Kedroff. 344 U.S. at pages 117—118, 73 S.Ct. at page 155. But it is established doctrine that '(i)t is not of moment that the State has here acted solely through its judicial branch, for whether legislative or judicial, it is still the application of state power which we are asked to scrutinize.' N.A.A.C.P. v. State of Alabama, 357 U.S. 449, 463, 78 S.Ct. 116o, 1172, 2 L.Ed.2d 1488. See Shelley v. Kraemer, 334 U.S. 1, 14—16, 68 S.Ct. 836, 842—843, 92 L.Ed. 1161, and cases there cited. Accordingly, our ruling in Kedroff is controlling here, and requires dismissal of the complaint.
5
Reversed.
| 23
|
363 U.S. 202
80 S.Ct. 1131
4 L.Ed.2d 1165
PENNSYLVANIA RAILROAD CO., Petitioner,v.UNITED STATES of America.
No. 451.
Argued May 17, 1960.
Decided June 13, 1960.
Mr. Hugh B. Cox, Washington, D.C., for petitioner.
Mr. George Cochran Doub, Washington, D.C., for respondent.
Mr. Justice BLACK delivered the opinion of the Court.
1
This case involves the power of District Courts to review Interstate Commerce Commission orders determining the reasonableness of rates.
2
In 1941 and 1942 the United States made 75 shipments of iron and steel over the Pennsylvania Railroad intended for export from the port of New York to Great Britain. War conditions prevented exportation from New York. This caused a dispute about applicable transportation charges since the Pennsylvania had in effect tariffs for 'domestic rates' that were higher than 'export rates.' Since the goods were not exported as planned the Railroad billed the United States for the higher domestic rates which the Government paid because required to do so by § 322 of the Transportation Act of 1940, 54 Stat. 955, 49 U.S.C. § 66, 49 U.S.C.A. § 66. Later, under authority of the same section, the General Accounting Office deducted from other bills due the Railroad the difference between the higher and lower rates, claiming that the higher domestic rates were inapplicable, unreasonable and unlawful. The Railroad then brought this action in the Court of Claims to recover the amount deducted.
3
Properly relying on our holding in United States v. Western Pacific R. Co., 352 U.S. 59, 62—70, 77 S.Ct. 161, 164—168, 1 L.Ed.2d 126, the Court of Claims suspended proceedings to enable the parties to have the Interstate Commerce Commission pass on the reasonableness of the rates. After hearings the Commission found and reported that the domestic rates were 'unjust and unreasonable' as to 62 of the shipments but 'just and reasonable' as to 13. 305 I.C.C. 259, 265. The Railroad then took two steps to challenge that part of the order adverse to it: (1) it invoked the jurisdiction of a United States District Court in Pennsylvania under 28 U.S.C. §§ 1336, 1398, 28 U.S.C.A. §§ 1336, 1398, and 49 U.S.C. § 17(9), 49 U.S.C.A. § 17(9), to enjoin and set aside the order; and (2) it moved that the Court of Claims stay its proceedings until the District Court could pass upon the validity of the order. The United States objected to further stay in the Court of Claims and asked for dismissal of the case or judgment in its favor. It urged in support of dismissal that the Railroad had deprived the Court of Claims of jurisdiction when it filed the District Court action to enjoin the Commission order because 28 U.S.C. § 1500, 28 U.S.C.A. § 1500, declares that 'The Court of Claims shall not have jurisdiction of any claim for or in respect to which the plaintiff * * * has pending in any other court any suit or process against the United States * * *.' The Court of Claims rejected this contention and its action in this respect is not challenged here.
4
The United States argued in support of its motion for judgment that the order of the Commission did not require anything to be done or not done, that it was therefore an advisory opinion only, and consequently not the kind of 'order' subject to review by 28 U.S.C. § 1336, 28 U.S.C.A. § 1336, 49 U.S.C. § 17(9), 49 U.S.C.A. § 17(9), or any other provision of law. The contention of the United States was that although the Court of Claims was compelled to submit the question of the reasonableness of the rates to the Commission, neither that court nor any other court had power to review the Commission's determination. The Court of Claims agreed with this contention of the United States, accordingly refused to stay the case for the District Court to pass on the validity of the order, and entered judgment for the Railroad for only $1,663.39, which the Commission had held to be recoverable, instead of the $7,237.87 which the Railroad claimed. The result is that the Railroad has been held bound by the Commission's order although completely denied any judicial review of that order. We granted certiorari to consider this denial. 361 U.S. 922, 80 S.Ct. 291, 4 L.Ed.2d 239.
5
The Railroad contends that it was error for the Court of Claims to refuse to stay its proceedings while the District Court reviewed the Commission's order. The Solicitor General concedes here that this was error. We reach the same conclusion on the basis of our independent consideration of the record. We decided some years ago that while a mere 'abstract declaration' on some issue by the Commission may not be judicially reviewable, an order that determines a 'right or obligation' so that 'legal consequences' will flow from it is reviewable. Rochester Telephone Corp. v. United States, 307 U.S. 125, 131, 132, 143, 59 S.Ct. 754, 757, 763, 83 L.Ed. 1147. The record shows that the Commission order here meets this standard. The Commission found that the Railroad's domestic rates were 'unreasonable' as to 62 shipments. This order is by no means a mere 'advisory opinion,' its 'legal consequences' are obvious, for if valid it forecloses the 'right' of the Railroad to recover its domestic rates on those shipments. We have held that judicial review is equally available whether a Commission order relates to past or future rates, or whether its proceeding follows referral by a court or originates with the Commission. El Dorado Oil Works v. United States, 328 U.S. 12, 66 S.Ct. 843, 90 L.Ed. 1053.
6
For these reasons we conclude that the Railroad was entitled to have this Commission order judicially reviewed. We have already determined, however, that the power to review such an order cannot be exercised by the Court of Claims. United States v. Jones, 336 U.S. 641, 651—653, 670—671, 69 S.Ct. 787, 793—794, 802, 93 L.Ed. 938. That jurisdiction is vested exclusively in the District Courts. 28 U.S.C. § 1336, 28 U.S.C.A. § 1336, 49 U.S.C. § 17(9), 49 U.S.C.A. § 17(9). See Seaboard Air Line R. Co. v. Daniel, 333 U.S. 118, 122, 68 S.Ct. 426, 428, 92 L.Ed. 580. Moreover, this order is properly reviewable by a one-judge rather than a three-judge District Court because it is essentially one 'for the payment of money' within the terms of 28 U.S.C. §§ 2321 and 2325, 28 U.S.C.A. §§ 2321, 2325, which exempt such orders from the three-judge procedure of 28 U.S.C. § 2284, 28 U.S.C.A. § 2284. United States v. Interstate Commerce Comm., 337 U.S. 426, 441, 443, 69 S.Ct. 1410, 1418, 1419, 93 L.Ed. 1451. It necessarily follows, of course, that since the Railroad had a right to have the Commission's order reviewed, and only the District Court had the jurisdiction to review it, the Court of Claims was under a duty to stay its proceedings pending this review.
7
Other questions argued by the Government are not properly presented by this record.
8
It was error for the Court of Claims to render judgment on the basis of the Commission's order without suspending its proceedings to await determination of the validity of that order by the Pennsylvania District Court.
9
Reversed.
| 89
|
363 U.S. 237
80 S.Ct. 1108
4 L.Ed.2d 1192
UNITED STATES of America, Petitioner,v.William J. BROSNAN et al. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a National Banking Association, Petitioner, v. UNITED STATES of America.
Nos. 137 and 183.
Argued March 21, 22, 1960.
Decided June 13, 1960.
Mr. Daniel M. Friedman, Washington, D.C., for petitioner United states.
Mr. Samuel B. Stewart, San Francisco, Cal., for petitioner Bank of America Nat. Trust & Savings Assn.
Mr. William L. Jacob, Pittsburgh, Pa., for respondents Brosnan and others.
Mr. Justice HARLAN delivered the opinion of the Court.
1
In these two cases, the United States purports to hold federal tax liens on Pennsylvania and California real properties which are concededly junior to defaulted mortgages held on the same properties by the other parties to the suits. The basic issue in each case is whether the federal lien was effectively extinguished by state proceedings to which the United States was not, nor was required under state law to be, a party.
2
The course of proceedings giving rise to this issue was as follows: In No. 137, involving a tract of Pennsylvania land, the respondent mortgagees, under a confession-of-judgment provision of the mortgage bond, obtained an in personam judgment against the mortgagor-taxpayer, pursuant to which the property was sold under a writ of fieri facias.1 Subsequently, the United States instituted this suit under 26 U.S.C. § 7403, 26 U.S.C.A. § 7403, seeking an enforcement of its tax lien by foreclosure and sale.2 The District Court held that the Government's lien on the property in question had been effectively extinguished by the Pennsylvania proceedings, and it entered judgment for the defendants. The Court of Appeals affirmed. 3 Cir., 264 F.2d 762.
3
In No. 183, California real and personal properties, subject to a deed of trust and two chattel mortgages, were sold by the trustee-mortgagee pursuant to powers of sale contained in the respective instruments. The United States received no actual notice of the sale. Thereafter, the mortgagee, which had bought in at the sale, brought this suit against the Government under 28 U.S.C. § 2410, 28 U.S.C.A. § 2410, to quiet its title, claiming that the exercise of the powers of sale had effectively extinguished the federal tax lien. The Court of Appeals, reversing the District Court, dismissed the suit, holding that the federal lien could be divested 'only with the consent of the United States and in the manner prescribed by Congress.' 9 Cir., 265 F.2d 862, 869. The Court did not reach the question of the effect which California law purports to give to the exercise of the power of sale upon junior liens.
4
We brought the cases here, 361 U.S. 811, 80 S.Ct. 63, 4 L.Ed.2d 58, because of the importance of the issue in the administration of the tax laws and the conflict between the decisions of the Third and Ninth Circuits.
I.
5
Federal tax liens are wholly creatures of federal statute. Detailed provisions govern their creation, continusance, validity, and release.3 Consequently, matters directly affecting the nature or operation of such liens are federal questions, regardless of whether the federal statutory scheme specifically deals with them or not. See Clearfield Trust Co. v. United States, 318 U.S. 363, 63 S.Ct. 573, 87 L.Ed. 838. Yet because federal liens intrude upon relationships traditionally governed by state law, it is inevitable that the Court, in developing the federal law defining the incidents of such liens, should often be called upon to determine whether, as a matter of federal policy, local policy should e adopted as the governing federal law, or whether a uniform nationwide federal rule should be formulated.
6
In determining the extent of the 'property and rights to property' (§ 6321) to which a government tax lien attaches, we have looked to state law. United States v. Bess, 357 U.S. 51, 55, 78 S.Ct. 1054, 1057, 2 L.Ed.2d 1135. The mortgagees claim that the present cases are governed by the principle of Bess. They assert that since the taxpayer-mortgagors' interests were subject to being terminated by means of the state proceedings here invoked, their 'property and rights to property' were limited to that extent; that under Bess, the Government's lien attaches only to property rights created under state law; and that therefore, the Government's interest was subject to being similarly terminated.
7
The fallacy of this contention is evident. In Bess, we held that a deceased's property in insurance policies on his own life was limited to their cash surrender value and did not extend to their proceeds, which he could never enjoy. Here, however, the mortgagors owned the entire fee interests in the properties, subject only to the mortgages. This Court has repeatedly rejected the contention that because a fee owned by a taxpayer was already encumbered by a lien which enjoyed seniority under state law, the Government's lien necessarily attached subject to that lien.4 A fortiori, the 'property' to which the federal lien can attach is not diminished by the particular means of enforcement possessed by a competing lienor to whom federal law concedes priority.
II.
8
We nevertheless believe it desirable to adopt as federal law state law governing divestiture of federal tax liens, except to the extent that Congress may have entered the field. It is true that such liens form part of the machinery for the collection of federal taxes, the objective of which is 'uniformity, as far as may be.' United States v. Gilbert Associates, 345 U.S. 361, 364, 73 S.Ct. 701, 703, 97 L.Ed. 1071. However, when Congress resorted to the use of liens, it came into an area of complex property relationships long since settled and regulated by state law. We believe that, so far as this Court is concerned, the need for uniformity in this instance is outweighed by the severe dislocation to local property relationships which would result from our disregarding state procedures. Long accepted nonjudicial means of enforcing private liens would be embarrassed, if not nullified where federal liens are involved, and many titles already secured by such means would be cast in doubt. We think it more harmonious with the tenets of our federal system and more consistent with what Congress has already done in this area, not to inject ourselves into the network of competing private property interests, by displacing well-established state procedures governing their enforcement, or superimposing on them a new federal rule. Cf. Board of Com'rs of Jackson County v. United States, 308 U.S. 343, 60 S.Ct. 285, 84 L.Ed. 313.
III.
9
This conclusion would not, of course, withstand a congressional direction to the contrary. The Government argues that by the enactment of certain statutes relating to judicial proceedings for the enforcement and extinguishment of federal liens, Congress has, at least impliedly, so spoken.
10
As early as 1868, Congress had authorized a suit by the United States to enforce its own tax lien.5 A similar provision now appears as 26 U.S.C. § 7403, 26 U.S.C.A. § 7403.6 However, it was already then well established that the United States was an indispensable party to any suit affecting property in which it had an interest, and that such a suit was therefore a suit against the United States which could not be maintained without its consent.7 Furthermore, the laws of many States themselves required all persons claiming an interest in property to be joined as parties to any suit to foreclose a lien or quiet title to the property. Thus there was no way in which a party who held a lien on property senior to that of the United States could get a judicial decree extinguishing the Government's interest.
11
To remedy this situation, Congress in 1924 passed the predecessor of 26 U.S.C. § 7424, 26 U.S.C.A. § 7424,8 which gives the holder of a prior-filed lien the right to enforce it by civil action against the United States, subject to the exhaustion of certain administrative remedies. The court is to proceed to 'a final determination of all claims to or liens upon the property in question' in the same manner as if the action had been brought by the Government to enforce its lien under § 7403. The latter section requires the court to determine the merits of all claims to the property, and in case the United States establishes such a claim, permits, but does not require, the court to order a judicial sale. The details of the procedure to be followed in case of judicial sale are not specified, nor is the United States expressly given any right to redeem.
12
In 1931, Congress, for similar reasons, passed the predecessor of 28 U.S.C. § 2410, 28 U.S.C.A. § 2410, whih gives a private lienor the right to name the United States a party in any action or suit to foreclose a mortgage or lien or to quiet title to property on which the United States claims any kind of mortgage or lien, whether or not a tax lien.9 The action can be brought in a state court, but is removable to a federal court.10 If a judicial sale is conducted in such an action or suit, it is to have the same effect as it would have under local law, but the United States is given one year to redeem.
13
These statutes on their face evidence no intent to exclude otherwise available state procedures. Their only apparent purpose is to lift the bar of sovereign immunity which had theretofore been considered to work a particular injustice on private lienors. Several features of the statutes make this clear:
14
(1) Both sections are purely permissive in tenor. A private lienor 'may * * * file a petition in the district court' under § 7424, or 'the United States may be named a party' under § 2410. (Emphasis added.)
15
(2) Under neither section is there a federally imposed requirement that there be any judicial sale at all. Nor is there any uniformity of procedure under the statutes. Under § 7424, the court 'may decree a sale' of the property, but no guidance is given as to the procedure to be followed. Under § 2410, a judicial sale is to have the same effect as it would have under local law, but nothing in the section indicates when a judicial sale is to be had. While the Government is guaranteed a one-year right to redeem if the plaintiff proceeds under § 2410, it is guaranteed no such right if he proceeds under § 7424.
16
(3) The specific permission of § 2410(a) to institute a quiet-title suit against the United States obviously contemplates a declaration by the federal courts of previously created legal consequences. If § 7424 or § 2410 were invoked to extinguish a federal lien, a subsequent suit to quiet title obviously would not be necessary. Therefore, Congress must have recognized the possibility that state procedures might affect federal liens.
17
The Government, however, aruges that the legislative history indicates that Congress believed a suit against the United States to be the only way in which a federal lien could be extinguished. But the statements relied on11 reveal simply a recognition that competing lienors were put at an unfair disadvantage because of inability to join effectively the Government as a party to judicial proceedings. As to the extent of that disadvantage, it is not clear whether Congress thought that the Government's sovereign immunity barred an attempt to affect a federal lien in any manner; that a nonjudicial procedure might be effective to divest federal liens but that state procedures by and large required junior lienors to be joined as parties to judicial proceedings; or that regardless of the existence and effectiveness of state procedures, a cloud on the title could only be removed conclusively by a judicial determination binding on the United States. In any event, the basic question is not what the existing state of the law was, or even what Congress believed it to be, but whether Congress intended to exclude the application of all state procedures, whatever their existence or effectiveness might be. No such inference can be drawn from the legislative statements referred to.
IV.
18
The question remains whether the state procedures followed in these cases were nonetheless ineffective to defeat the government liens because they should de regarded as being unconsented suits against the United States. Because no judicial proceeding was there involved, No. 183 presents no such problem, unless we are now to hold, beyond anything this Court has heretofore decided, that because the private sale of its own force was effective under California law to extinguish all junior liens,12 what was done in this instance amounted to a 'suit' against the United States. We do not think that the doctrine of sovereign immunity reaches so far.
19
No. 137, however, presents a different and more difficult question on this score. Under Pennsylvania law the Sheriff's sale of the mortgaged land under a writ of fieri facias was a judicial sale, having the effect of extinguishing junior liens even though their holders were not, nor required to be made, parties to the proceedings.13 Under the decisions of this Court, a judicial proceeding against property in which the Government has an interest is a suit against the United States which cannot be maintained without its consent. The Siren, 7 Wall. 152, 19 L.Ed. 129; State of Minnesota v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235; United States v. State of Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327. It has been suggested that this rpinciple applies only where the Government holds a fee interest or such other interest in the property as to render it an indispensable party under state law. See United States v. Cless, 3 Cir., 254 F.2d 590, 592. That, however, seems a dubious distinction, since whether or not the United States is an indispensable party to a judicial proceeding cannot depend on state law. See State of Minnesota v. United States, supra, 305 U.S. at page 386, 59 S.Ct. at page 294. Nevertheless, no case in this Court, so far as we can find, has yet applied the doctrine of sovereign immunity in the precise situation before us. Much can be said for the view that this Pennsylvania procedure should not be considered as being an unconsented suit against the United States,14 any more than the wholly private proceeding in the California case. In both cases, the practical effect upon junior liens is exactly the same.
20
Be that as it may, we shall not so extend the principle of sovereign immunity. To do so would not only produce incongruous results as between these two cases, but would trespass upon the considerations which have led to our refusal to fashion a federal rule of uniformity respecting the extinguishment of federal junior liens under state procedures. It must be recognized that the factors supporting a federal rule of uniformity in this field, and those militating against the dislocation of long-standing state procedures, are full of competing considerations. They involve many imponderables which this Court is ill-equipped to assess, on which Congress has not yet spoken, and which we think are best left to that body to deal with in light of their full illumination. A wise solution of such a far-reaching problem cannot be achieved within the confines of a lawsuit. Until Congress otherwise determines, we think that state law is effective to divest government junior liens in cases such as these.
21
The judgment in No. 137 is affirmed, and that in No. 183 is reversed.
22
It is so ordered.
23
Judgment of Court of Appeals for the Third Circuit affirmed; judgment of Court of Appeals for the Ninth Circuit reversed.
24
Mr. Justice CLARK, whom THE CHIEF JUSTICE, Mr. Justice BLACK and Mr. Justice FRANKFURTER join, dissenting.
25
I submit that the over-all purpose of Congress in the adoption of § 2410 and § 7424 was 'to afford to a holder of a lien prior in time to that of the United States * * * a method of procedure for clearing the title to the property.'1 The Committee pointed out that 'there is no method whereby the lien for taxes may be discharged without payment. Although the lien may * * * be valueless to the United States, it remains a cloud on the title which the prior lienor is powerless to remove.' And the House Committee stated, among other things, that real estate interests had recommended the legislation for years because a prior recorded lienholder was 'in effect defeated of his own right to foreclose' and that the 'simple and just method of proceeding' under the bill 'is fair to the holder of the prior lien on the real estate and * * * amply and fully protects the rights of the Federal Government. * * *' It declared that 'equity dictates that the Government's lien in such circumstances should have a junior status, yet under the present practice the inability of the plaintiff to bring the United States in as a party to the proceeding to foreclose or have execution and sale on a court judgment * * * ties the hands of a prior lien holder by making it impossible for him to grant a clear title to the property and thus * * * deprives him of the benefits of his security or court judgment as the case may be.' (Italics added.) Furthermore, the Congress understood and intended that foreclosure under state procedures—by court or private sale without notice to the United States 'could not possibly discharge the Government's lien.' (Chairman Graham of the House Judiciary Committee, manager of the bill on the floor.)
26
The Congress first passed § 7424, which gave a mortgagee the right, after exhausting administrative remedies, to bring an action against the United States to test its lien. Thereafter in 1931 it enacted § 2410 which, without administrative remedies, permitted the United States to be named a party in a suit by a mortgagee for foreclosure of a prior mortgage lien on property or to quiet title. The Act gave consent to the filing of such actions '(u)nder the conditions prescribed,' including a one-year right of redemption, all of which requirements the Congress found to be necessary 'for the protection of the United States.'
27
Nevertheless, the Court has brushed aside all of these protections and, without regard to the congressional mandate, has turned these acts into booby traps in which the Government has now been caught up by its own benevolence. Giving the California mortgagees in No. 183 a carte blanche to wipe out the Government's lien by summary action at a trustee's sale, without even giving the Government notice, the Court declares its extraordinary action to be in recognition 'of long-standing state procedures.' For the same reason, the Pennsylvania mortgagees in No. 137 are permitted to bring an action in the courts of that State and to foreclose the Government's lien without making it a party or giving it any notice whatsoever. All of this it does as 'a matter of federal policy.' But this is not all. The Court finds that the Pennsylvania proceeding was a judicial one culminating in a sale of property on which the United States had a lien and that '(u)nder the decisions of this Court, a judicial proceeding against property in which the Government has an interest is a suit against the United States which cannot be maintained without its consent.' Yet, even though admittedly the Government has not so consented, the Court says that since 'no case in this Court, so far as we can find, has yet applied the doctrine of sovereign immunity in the precise situation before us,' it will not do so now. This is certainly less than a self-evident explanation for wiping out an interest of the Government without its authorized consent, but this anomalous ground for decision is followed by the bootstrap operation that 'Pennsylvania procedure should not be considered as being an unconsented suit against the United States, any more than the wholly private proceeding in the California case.'
28
The fact about it is that the Court presupposes, wholly apart from 28 U.S.C. § 2410, 28 U.S.C.A. § 2410 and 26 U.S.C. § 7424, 26 U.S.C.A. § 7424, that the 'long-standing state procedures' applicable to the extinguishment of junior private liens apply equally to junior government ones. In the light of the fact that federal law with regard to the manner in which liens of the United States may be released or extinguished has been on the books in one form or another for over 90 years, this is indeed a violent assumption. Under federal law, a priorfiled lienholder has for some 30 years enjoyed three specific remedies that he may follow to secure the release or extinguishment of a junior government lien. First, he may apply to the Secretary of the Treasury or his delegate to release the lien under § 6325 of the Internal Revenue Code.2 Section 6325 authorizes that official (1) to execute a release when the liability is satisfied or has become legally unenforceable or upon the furnishing of a bond conditioned on the payment of the amount of the lien, or (2) to execute a partial release of the property involved where such a discharge will not jeopardize the Government's interest. This provision, in itself, seems entirely adequate to protect moneylenders from suffering any injustice, but the Congress did not stop there. It gave such a lienholder two additional remedies. These alternative and additional methods are set out in 26 U.S.C. § 7424, 26 U.S.C.A. § 7424 and 28 U.S.C. § 2410, 28 U.S.C.A. § 2410.
29
Section 7424 grants the mortgagee the privilege of enforcing his prior-filed lien by civil action against the United States as provided in § 7403, which was originally passed in 1868 as a remedy available only to the Government. As a protection to the United States, § 7424 first requires that the mortgagee request the Secretary of the Treasury to authorize the filing of an action under § 7403. Upon the Secretary's failure to authorize such an action within six months, the mortgagee may apply to the District Court for relief. Notice to all lienholders, including the United States, is required. The majority opinion emphasizes that no redemption right is given the Government in a proceeding under § 7424 and seems to place some reliance for its action on the absence of such relief. However, this policy of the Congress is entirely understandable when we consider that § 7424 first requires application to the Secretary. This requirement gives that official ample time before suit is filed to pay off the prior lien if advantageous to the Government. This is, of course, tantamount to a full redemption right after sale. There would be no point in permitting such relief after suit when its equivalent was available to the Secretary for six months during the time when he was considering the mortgagee's request.
30
In addition to this procedure, the Congress in § 2410 gave the mortgagee an additional and separate method by which to proceed. It does not require a request to be filed with the Secretary but permits the immediate invocation of judicial remedies in state or federal courts. Its relief extends to any type of mortgage or lien claimed by the United States, whether or not for taxes. The United States, of course, must be made a party and given notice. Judicial sales may be ordered, having the same effect as they would under state law, and the United States is given one year in which to redeem. Obviously this provision was inserted to protect the Government. Unlike a § 7424 proceeding, it ordinarily has received no notice of the prior mortgage lien before the mortgagee files suit. The Congress, in fairness to the Government, gave it one year after the judgment to reimburse the lienholder and redeem the property in protection of the Government's interest.
31
Now let us take up seriatim the grounds on which the Court disregards this carefully devised scheme for protecting the Government's liens. It says that certain 'features' of the acts make 'clear' that the federal remedies are not exclusive. The first two features have to do with the use by the Congress of the word 'may' in granting permission to file the suit and the phrase the court 'may decree a sale' in dealing with the action to be taken in the same. But statutory interpretation must not be reduced to an exercise in semantology. In stating that a mortgagee 'may * * * file a petition' Congress did not—because it could not—require him to do so. He 'may' file suit if he wishes or he can take his chances that his title is superior, as thousands have in such matters. Likewise, in granting the privilege that 'the United States may be named a party' the Congress employed the word 'may' in its ordinary, familiar usage and understanding. Congressional expression, after all, must not necessarily be of Addisonian diction. Reaching the Court's further objection to the word 'may' in the congressional language that the court 'may decree a sale,' it is submitted in all logic that, since other relief is available in the suit, i.e., receivership, quieting of title, et cetera. Congress could use no other word. Certainly the word 'shall' would be inapplicable. It was left up to the court to decree the appropriate relief after a full hearing and if a sale was in order to fix the manner, time and condition of the same. These are details the Congress appropriately and traditionally leaves to courts.
32
The third 'feature' of which the majority makes much is the fact that the federal Acts do not 'on their face' exclude state procedures. But this is a commonplace in federal legislation, Hines v. Davidowitz, 1941, 312 U.S. 52, 67, 61 S.Ct. 399, 404, 85 L.Ed. 581, and is by no means the test. See Commonwealth of Pennsylvania v. Nelson, 1956, 350 U.S. 497, 76 S.Ct. 477, 100 L.Ed. 640. The majority says that, since § 2410(a) grants specific permission to file a quiet-title suit, this 'contemplates a declaration by the federal courts of previously created legal consequences.' This provision was suggested in 1941 by the then Attorney General Jackson. Being a practical lawyer with a large general practice, he knew that many titles were then clouded by government liens and that many times in the future 'persons acting in good faith * * * without knowledge of the Government lien or in the belief that the lien had been extinguished' would likewise have no remedy under which to clear their titles. This moved him to make the suggestion. But, being the lawyer he was, I am confident he never dreamed that his suggestion would strip the Government he was so capably representing of notice in private trustee sales and deprive it of any defense in such a quiet-title suit. Such a construction of this clause in § 2410(a) acts as a repealer of all other provisions of these federal statutes. Why would the Congress give its consent to sue the United States as a quid pro quo of the Government having a fair chance to test out the validity of the prior-claimed private lien, and then turn right around and let the state procedure through a trustee's sale wipe out the government lien without notice, hearing or redemption rights? In this manner, action under state law wipes out federal procedure entirely—with the exception of the quiet-title suit and even in it the Government, according to the holding today, has none of the federal statutory protections. The trustee's deed under the deed of trust sale has, the Court says, extinguished the inferior government lien under state law and that is binding on the Government. It cannot contest the bona fides and priority of the deed of trust, the amount due under it, the regularity, fairness or validity of the exercised power of sale, or any other infirmities in the sale, including fraud or collusion—unless allowed by state law. To be able to construe a federal statute so as to wipe out the government lien, which on the face of the statute was to be tested on specific conditions written therein 'for the protection of the United States,' stretches the imagination for me beyond the breaking point.
33
Other than these 'features' of the federal Acts, the 'long-standing state procedures' and the 'matter of federal policy,' the Court gives no reason for adopting state procedures in extinguishing government liens. Of course, if, as the Court holds, the principle of sovereign immunity were not applicable, and if the Congress had not acted in the field, the Court could 'fashion the governing rule of law.' Clearfield Trust Co. v. United States, 1943, 318 U.S. 363, 367, 63 S.Ct. 573, 575, 87 L.Ed. 838. But the adoption of local law, even in that event, would be 'singularly inappropriate.' The tax liabilities involved here, as well as the liens securing the same, are all federally created and the rights arising therefrom would be governed by federal law. The enforcement of these rights, however, would be controlled by state law. Would this include the validity of the tax as assessed by the collector and asserted in the lien? While § 2410 and § 7424 do not permit the validity of the tax to be tested under their procedures, what about state law? Certainly this would open up endless problems. But be that as it may, the procedures of enforcement themselves would vary in each State, resulting in 50 separate and different rules of procedure, entailing varying interpretations, practices and pitfalls peculiar to each jurisdiction. Would it not be better to have a uniform system in the tax collection machinery of the Nation? In Clearfield the Court concluded that:
34
'The issuance of commercial paper by the United States is on a vast scale and transactions in that paper from issuance to payment will commonly occur in several states. The application for state law, even without the conflict of laws rules of the forum, would subject the rights and duties of the United States to exceptional uncertainty. It would lead to great diversity in results by making identical transactions subject to the vagaries of the laws of the several states. The desirability of a uniform rule is plain.' 318 U.S. at page 367, 63 S.Ct. at page 575.
35
I submit that these grounds for uniformity so forcefully spelled out in Clearfield are even more compelling here where the revenue of the United States is imperiled. The importance of uniformity in tax procedures is well illustrated in United States v. Gilbert Associates, 1953, 345 U.S. 361, 364, 73 S.Ct. 701, 703, 97 L.Ed. 1071, where we again emphasized its necessity in these words:
36
'A cardinal principle of Congress in its tax scheme is uniformity, as far as may be. Therefore, a 'judgment creditor' (as used in 26 U.S.C. (1946 ed.) § 3672, 26 U.S.C.A § 3672) should have the same application in all the state.'
37
It is the more important that, if moneylenders having prior-filed liens are to be given the right to extinguish inferior government liens, it be done on a uniform basis applicable equally in all of the States.
38
However, there is an even more serious objection to the adoption of state procedures in these cases. As we have seen, the Government is left without even the protection of notice. The United States' lien will be wiped out before its tax officials even know of the foreclosure under the prior-filed mortgage. It will be left without any protection. With thosuands of trustees' sales going on over the country each day the Government's revenue will be seriously jeopardized.
39
While I would hold the federal procedures exclusive, if the Court insists that state law be made applicable would not a 'just method of proceeding' at least include a rule that tax liens of the United States cannot be extinguished in any state proceeding by trustee's sale or through judicial process—without giving the United States notice thereof? With all of its millions of tax transactions, how else can the public treasury be protected? Nor would such a requirement 'inject ourselves into the network of competing private property interests' or displace 'well-established state procedures governing their enforcement.' The State could proceed as it wishes, within Fourteenth Amendment requirements, to set up and enforce its own procedures as to private lienholders. Only in those cases where government liens are involved would lienholders have to give notice to the United States. This would protect the public revenue and cause no more hardship on money-lenders than they agreed to and have up until today had to bear under § 2410 and § 7424.
40
I would therefore reverse the judgment in No. 137 and affirm that in No. 183.
1
Subsequent to the entry of judgment, but prior to the sale, the mortgagees attempted to join the United States as a party under 28 U.S.C. § 2410, 28 U.S.C.A. § 2410. We agree with the District Court that that attempt did not comply with the statute.
2
Alternatively, in the event the District Court found that the Government had been properly joined as a party to the state proceedings, the Government sought a decree that it had properly exercised its right of redemption. That issue is not pressed by the Government and is not before us.
3
See 26 U.S.C. § 6321, 26 U.S.C.A. § 6321 (Lien for taxes); § 6322 (Period of lien); § 6323 (Validity against mortgagees, pledgees, purchasers, and judgment creditors); and § 6325 (Release of lien or partial discharge of property).
4
United States v. Security Trust & Savings Bank, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53; United States v. City of New Britain, 347 U.S. 81, 74 S.Ct. 367, 98 L.Ed. 520; United States v. Acri, 348 U.S. 211, 75 S.Ct. 239, 99 L.Ed. 264; United States v. Liverpool & London & Globe Ins. Co., Ltd., 348 U.S. 215, 75 S.Ct. 247, 99 L.Ed. 268; United States v. Scovil, 348 U.S. 218, 75 S.Ct. 244, 99 L.Ed. 271; United States v. I. J. Colotta, 350 U.S. 808, 76 S.Ct. 82, 100 L.Ed. 725; United States v. White Bear Brewing Co., 350 U.S. 1010, 76 S.Ct. 646, 100 L.Ed. 871; United States v. W. H. Vorreiter, 355 U.S. 15, 78 S.Ct. 19, 2 L.Ed.2d 23; United States v. R. F. Ball Construction Co., Inc., 355 U.S. 587, 78 S.Ct. 442, 2 L.Ed.2d 510; United States v. Hulley, 358 U.S. 66, 79 S.Ct. 117, 3 L.Ed.2d 106.
5
Act of July 20, 1868, c. 186, § 106, 15 Stat. 167.
6
'§ 7403. Action to enforce lien or to subject property to payment of tax.
'(a) Filing. In any case where there has been a refusal or neglect to pay any tax, or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or his delegate, at the request of the Secretary or his delegate, may direct a civil action to be filed in a district court of the United States to enforce the lien of the United States under this title with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which he has any right, title, or interest, to the payment of such tax or liability.
'(b) Parties. All persons having liens upon or claiming any interest in the property involved in such action shall be made parties thereto.
'(c) Adjudication and decree. The court shall, after the parties have been duly notified of the action, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property, by the proper officer of the court, and a distribution of the proceeds of such sales according to the findings of the court in respect to the interests of the parties and of the United States.
'(d) Receivership. In any such proceeding, at the instance of the United States, the court may appoint a receiver to enforce the lien, or, upon certification by the Secretary or his delegate during the pendency of such proceedings that it is in the public interest, may appoint a receiver with all the powers of a receiver in equity.'
7
The Siren, 7 Wall. 152, 19 L.Ed. 129; State of Minnesota v. United States, 305 U.S. 382, 386, 59 S.Ct. 292, 294, 83 L.Ed. 235; United States v. State of Alabama, 313 U.S. 274, 282, 61 S.Ct. 1011, 1014, 85 L.Ed. 1327.
8
43 Stat. 253. Section 7424 now provides:
§ 7424. Civil action to clear title to property.
'(a) Obtaining leave to file.
'(1) Request for institution of proceedings by United States. Any person having a lien upon or any interest in the property referred to in section 7403, notice of which has been duly filed of record in the jurisdiction in which the property is located, prior to the filing of notice of the lien of the United States as provided in section 6323, or any person purchasing the property at a sale to satisfy such prior lien or interest, may make written request to the Secretary or his delegate to authorize the filing of a civil action as provided in section 7403.
'(2) Petition to court. If the Secretary or his delegate fails to authorize the filing of such civil action within 6 months after receipt of such written request, such person or purchaser may, after giving notice to the Secretary or his delegate, file a petition in the district court of the United States for the district in which the property is located, praying leave to file a civil action for a final determination of all claims to or liens upon the property in question.
'(3) Court order. After a full hearing in open court, the district court may in its discretion enter an order granting leave to file such civil action, in which the United States and all persons having liens upon or claiming any interest in the property shall be made parties.
'(b) Adjudication. Upon the filing of such civil action, the district court shall proceed to adjudicate the matters involved therein, in the same manner as in the case of civil actions filed under section 7403. For the purpose of such adjudication, the assessment of the tax upon which the lien of the United States is based shall be conclusively presumed to be valid.'
9
46 Stat. 1528, as amended, 56 Stat. 1026. As presently codified, 28 U.S.C. § 2410, 28 U.S.C.A. § 2410, provides:
§ 2410. Actions affecting property on which United States has lien.
'(a) Under the conditions prescribed in this section and section 1444 of this title for the protection of the United States, the United States may be named a party in any civil action or suit in any district court, or in any State court having jurisdiction of the subject matter, to quiet title to or for the foreclosure of a mortgage or other lien upon real or personal property on which the United States has or claims a mortgage or other lien.
'(b) The complaint shall set forth with particularity the nature of the interest or lien of the United States. In actions in the State courts service upon the United States shall be made by serving the process of the court with a copy of the complaint upon the United States attorney for the district in which the action is brought or upon an assistant United States attorney or clerical employee designated by the United States attorney in writing filed with the clerk of the court in which the action is brought and by sending copies of the process and complaint, by registered mail, to the Attorney General of the United States at Washington, District of Columbia. In such actions the United States may appear and answer, plead or demur within sixty days after such service or such further time as the court may allow.
'(c) A judicial sale in such action or suit shall have the same effect respecting the discharge of the property from liens and encumbrances held by the United States as may be provided with respect to such matters by the local law of the place where the property is situated. * * * Where a sale of real estate is made to satisfy a lien prior to that of the United States, the United States shall have one year from the date of sale within which to redeem. In any case where the debt owing the United States is due, the United States may ask, by way of affirmative relief, for the foreclosure of its own lien and where property is sold to satisfy a first lien held by the United States, the United States may bid at the sale such sum, not exceeding the amount of its claim with expenses of sale, as may be directed by the head of the department oragency agency of the United States which has charge of the administration of the laws in respect of which the claim of the United States arises.'
10
28 U.S.C. § 1444, 28 U.S.C.A. § 1444.
11
The Senate Committee which reported the bill which became the predecessor of § 7424 stated (S.Rep. No. 398, 68th Cong., 1st Sess. 46):
'At the present time, in cases in which the lien prior in time to that of the United States equals or exceeds in amount the value of the property, there is no method whereby the lien for taxes may be discharged without payment. Although the lien may thus be valueless to the United States, it remains a cloud on the title which the prior lienor is powerless to remove. The subdivision gives the lienor a remedy in this case.'
The House Committee which reported a bill designed to achieve the sae objective as § 2410 stated (H.R.Rep. No. 95, 71st Cong., 2d Sess. 1—3):
'This legislation has been recommended for a number of years by the American Bar Association through its committee on removal of Government liens on real estate, the United States League of Local Building and Loan Associations, and by numerous land title companies, in order to relieve against the injustice with which mortgagees are confronted under the present state of the law who find, when it is necessary to foreclose their mortgages, that there has been filed against the property a junior lien by the Federal Government for some debt due the United States by the owner of the equity in the property, and for which the mortgagee owes no obligation either legal or moral. In such circumstances, the mortgagee finds himself at an impasse. It is impossible for him to bring about a judicial sale of the property owing to the cloud upon the title created by the Government's lien. He can not remove the lien as there is no method by which he may bring the United States in as one of the parties to the foreclosure proceeding. He is, therefore, in effect defeated of his own right to foreclose unless he is willing to pay off the Government lien, a debt for which he is in no way responsible and he being a person to whom the Government would in no event look for its payment.
'The purpose of this bill is to provide a simple and just method of proceeding in such cases * * *.
'This bill will provide reflief from a situation that has caused a great deal of injustice to innocent holders of liens against real estate. The number of liens filed under the revenue laws has been steadily growing. * * * The law provides and equity dictates that the Government's lien in such circumstances should have a junior status, yet under the present practice the inability of the plaintiff to bring the United States in as a party to the proceeding to foreclose or have execution and sale on a court judgment where a Government lien is found to have been placed upon the property subsequently to the time of the plaintiff's encumbrance ties the hands of a prior lien holder by making it impossible for him to grant a clear title to the property and thus for no just reason deprives him of the benefits of his security or court judgment as the case may be.'
During the debates leading to the enactment of the predecessor of *s 2410, Representative Graham, who had reported the bill from the Judiciary Committee, explained it as follows (72 Cong.Rec. 3119):
'It is simply a provision by which whenever a mortgagee, for instance, holding a mortgage upon real estate, finds that a lien to the Government has been filed * * * the owner of that mortgage may go into the State court and foreclose his mortgage, but this would do him no good unless he could get the United States made a party to the proceeding in some way so that the lien would be relieved on the part of the Government.'
Subsequently, the following colloquy took place with respect to a provision of the bill which authorized administrative release of questionable or worthless federal liens (72 Cong.Rec. 3121 3122):
'Mr. Burtness (of North Dakota). So that some of us may understand a little better the relief that is suggested simply as an administrative act and the cases to which it would apply. I understand, for instance, it would apply to a case of this sort: In many States foreclosure by advertisement is permitted, with the right of redemption. Assume that a prior lien is foreclosed, the Government has a junior lien, the time for redemption expires and the purchaser
at the foreclosure sale of the prior lien gets title through the foreclosure proceedings under State laws. Presumably in a case of that sort the enforcibility of the Federal lien as a practical proposition has been wiped out, but it is still a cloud on the title. Now, in that sort of a case, could the administrative officers give relief under the amendment that is proposed without going into court in any way?
'Mr. Hawley (of Oregon). If at any time they find as a matter of fact that the Government lien is valueless they are authorized to release that lien by the pending amendment.
'Mr. Burtness. And it may become valueless for several reasons, for instance, depreciation in the value of the property, the amount of prior liens foreclosed in legal proceedings, or anything else.
'Mr. Graham (of Pennsylvania). The foreclosure the gentleman speaks of could not possibly discharge the Government's lien.
'Mr. Burtness. I understand it would not be discharged, but, of course, the holder of the property would have been subrogated to the rights acquired under the foreclosure of the prior lien, I take it.'
In 1941, Attorney General Jackson sent a letter to the Chairman of the Senate Judiciary Committee urging that the predecessor of § 2410 be amended to include suits to quiet title. The letter stated (S.Rep. No. 1646, 77th Cong., 2d Sess. 2):
'It should be observed in this connection that under existing law there is no provision whereby the owner of real estate may clear his title to such real estate of the cloud of a Government mortgage or lien. Welch v. Hamilton (S.D.Calif.), 33 F.(2d) 224, and U.S. v. Turner (C.C.A.8), 47 F.2d 86.
'In many instances persons acting in good faith have purchased real estate without knowledge of the Government lien or in the belief that the lien had been extinguished. In other instances, mortgagees have foreclosed on property and have failed to join the United States. It appears that justice and fair dealing would require that a method be provided to clear real-estate titles of questionable or valueless Government liens. Accordingly, I suggest that the bill be amended by inserting the phrase 'to quiet title or' between the words 'matter' and 'for the foreclosure of' in line 4 of page 2 of the bill.'
12
Cal.Civ.Code, § 2932; Bracey V. Gray, 49 Cal.App.2d 274, 121 P.2d 770; Sohn v. California Pac. Title Ins. Co., 124 Cal.App.2d 757, 269 P.2d 223; 34 Cal.Jur.2d, Mortgages and Trust Deeds § 463.
13
Purdon's Pa.Stat.Ann. Tit. 12, § 2447; Liss v. Medary Homes, Inc., 388 Pa. 139, 130 A.2d 137; State College Borough v. Leathers, 19 Pa.Dist. & Co. 405; Moore v. Schell, 99 Pa.Super. 81; Standard Pennsylvania Practice, c. 68, § 32. See also Commonwealth v. Keystone Graphite Co., 257 Pa. 249, 101 A. 766; Standard Pennsylvania Practice, c. 68, § 4, n. 20.
14
If state procedures undertook to discriminate against the United States with respect to joinder, questions of a different order would be presented.
1
For the sake of brevity, see note 11, at pages 247—249 of 363 U.S., page 1114 of 80 S.Ct., of the majority opinion for references to, and citations of authorities for, these quotations.
2
'§ 6325. Release of lien or partial discharge of property.
'(a) Release of lien. Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of release of any lien imposed with respect to any internal revenue tax if—
'(a) Liability satisfied or unenforceable. The Secretary or his delegate finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied, has become legally unenforceable, or, in the case of the estate tax imposed by chapter 11 or the gift tax imposed by chapter 12, has been fully satisfied or provided for; or
'(2) Bond accepted. There is furnished to the Secretary or his delegate and accepted by him a bond that is conditioned upon the payment of the amount assessed, together with all interest in respect thereof, within the time prescribed by law (including any extension of such time), and that is in accordance with such requirements relating to terms, conditions, and form of the bond and sureties thereon, as may be specified by such rules or regulations.
'(b) Partial Discharge of Property.—
'(1) Property double the amount of the liability. Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of discharge of any part of the property subject to any lien imposed under this chapter if the Secretary or his delegate finds that the fair market value of that part of such property remaining subject to the lien is at least double the amount of the unsatisfied liability secured by such lien and the amount of all other liens upon such property which have priority to such lien.
'(2) Part payment or interest of United States valueless. Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of discharge of any part of the property subject to the lien if—
'(A) there is paid over to the Secretary or his delegate in part satisfaction of the liability secured by the lien an amount determined by the Secretary or his delegate, which shall not be less than the value, as determined by the Secretary or his delegate, of the interest of the United States in the part to be so discharged, or
'(B) the Secretary or his delegate determines at any time that the interest of the United States in the part to be so discharged has no value.
In determining the value of the interest of the United States in the part to be so discharged, the Secretary or his delegate shall give consideration to the fair market value of such part and to such liens thereon as have priority to the lien of the United States.
'(c) Effect of certificate of release or partial discharge. A certificate of release or of partial discharge issued under this section shall be held conclusive that the lien upon the property covered by the certificate is extinguished.' 68A Stat. 781, 26 U.S.C. § 6325, 26 U.S.C.A. § 6325.
| 1112
|
363 U.S. 370
80 S.Ct. 1171
4 L.Ed.2d 1277
George B. PARR et al., Petitioners,v.UNITED STATES.
No. 391.
Argued April 28, 1960.
Decided June 13, 1960.
Mr. Abe Fortas, Washington, D.C., and T. Gilbert Sharpe, Brownsville, Tex., for petitioners.
Mr. Malcolm Richard Wilkey, Washington, D.C., for respondent.
Mr. Justice WHITTAKER delivered the opinion of the Court.
1
Petitioners, nine individuals and two state banking corporations,1 were indicted in 20 counts in the United States District Court for the Southern District of Texas, Houston Division, for mail fraud and conspiracy to commit mail fraud. The first 19 counts charged that petitioners devised, prior to September 1, 1949, and continued to February 20, 1954, a scheme to defraud the Benavides Independent School District ('District') of Duval County, Texas, the State of Texas, and the taxpayers of each, and that they used the mails for the purpose of executing the scheme, in violation of 18 U.S.C. § 1341, 18 U.S.C.A. § 1341.2 The twentieth count charged that petitioners conspired to commit the substantive offense charged in the first count, in violation of 18 U.S.C. § 371, 18 U.S.C.A. § 371.3
2
After their various motions, including one challenging venue and asking transfer of the action to the Corpus Christi Division of the court, and one for a bill of particulars, were denied, petitioners entered pleas of 'not guilty' and in due course the case was put to trial before a jury. The jury returned verdicts finding petitioners guilty as charged—some of them on all counts and others on only some of the counts. After denying timely motions in arrest of judgment and for a new trial, the court entered judgments upon the verdicts, convicting petitioners and sentencing them to imprisonment.4 On appeal, the judgments were affirmed, 265 F.2d 894, and, to determine questions of importance relative to the scope and proper application of § 1341, we granted certiorari. 361 U.S. 912, 80 S.Ct. 254, 4 L.Ed.2d 182.
3
Petitioners' principal contentions here are: (1) that, although the indictment charged and the evidence tended to show that petitioners devised and practiced a scheme to defraud the District by the local or state crimes of misappropriating and embezzling its money and property, neither the indictment nor the proofs support the judgments, because the indictment did not charge, and the proofs did not show, any use of the mails 'for the purpose of executing such scheme' within the meaning of that phrase as used in § 1341, and (2) that the court's charge did not submit to the jury any theory or issue of fact that could constitute use of the mails 'for the purpose of executing such scheme.' The nature of these contentions requires a detailed examination of the indictment, the evidence adduced, and of the issues of fact actually tried and submitted to the jury, for its resolution, by the court in its charge.
4
We turn first to the indictment. Summarized as briefly as fair statement permits, the first count alleged that the District is a public corporation organized under the laws of Texas to acquire and hold the facilities necessary for, and to operate, the public schools within the District,5 and, for those purposes, to assess and collect taxes; that the laws of Texas vest exclusive control of the property and management of the affairs of the District in its Board of Trustees, consisting of seven members; that prior to September 1, 1949, petitioners devised, and continued to February 20, 1954, a scheme to defraud the District, the State of Texas, and the taxpayers of each, and to obtain their money and property for themselves and their relatives.
5
It then alleged that, as part of the scheme, petitioners would falsely represent that district checks were issued, and its funds disbursed, only to persons and concerns for services rendered and materials furnished to the District, and that its Annual Reports to the State Commissioner of Education were correct.
6
It next alleged that, as a further part of the scheme, seven of the petitioners would establish and maintain domination and control of the District;6 that three of them would acquire and maintain control of petitioner, the Texas State Bank of Alice, which was the authorized depository of the District's funds,7 and that one of them would acquire and maintain control of petitioner, the San Diego State Bank.8
7
It then alleged that it was a further part of the scheme that petitioners would sent or cause to be sent letters, tax statements, checks in payment of taxes, and receipted tax statements, through the United States mails; that the checks and moneys received by the District from taxpayers and others would be deposited to the credit of the District in the authorized depository bank, against which petitioners would issue district checks payable to fictitious persons, and to existing persons, without consideration (falsifying the District's records to show that such checks were issued in payment for services or materials), and would cash such checks, upon forged endorsements or without endorsements of the payees, at the depository bank and convert the proceeds; that they would open accounts and deposit checks received in payment of taxes in unauthorized banks, and that petitioner Chapa would withdraw and convert the funds; that they would convert and cash checks received by the District in payment of taxes and keep the proceeds; that they would obtain merchanedise for themselves on the credit and at the expense of the District; that they would prepare, and the Board of Trustees would approve, false Annual Reports of the District and mail them to the State Commissioner of Education at Austin, Texas; that they would conceal their fraudulent misuse of district funds by destroying canceled checks, bank statements and other records of the District and the microfilmed records of the petitioner banks showing the fraudulent checks drawn against and paid out of the District's accounts.
8
The last paragraph of the count—the only paragraph purporting to charge an offense—charged that petitioners on September 29, 1952, for the purpose of executing the scheme, caused to be taken from the post office, in the Houston Division of the court, a letter addressed to Humble Oil & Refining Company, Houston, Texas.9
9
Each of Counts 2 through 19 adopted by reference all allegations of the first count, except those contained in the last paragraph of that count which charged a specific offense against petitioners, and then proceeded to allege that on a stated date the petitioners, for the purpose of executing the scheme, 'caused' a particular letter, tax statement, check, tax receipt or invoice to be placed in or taken from an authorized depository for United States mail in the Houston Division of the court.10 Doubtless the charge in each of these counts was so limited, in the light of Rule 18 of Federal Rules of Criminal Procedure, 18 U.S.C.A., fixing venue over crimes in the District and division where committed,11 in order to give the Houston Division venue over this action, and consequently the indictment does not count upon petitioners' full uses of the mails, for they were principally made in Duval County in the Corpus Christi Division of the court.
10
The twentieth count charged that throughout the relevant period petitioners feloniously conspired and agreed among themselves and with others to commit 'the offenses * * * which are fully described and set out in the first count of this indictment,' and that, to effect the object of the conspiracy, petitioners committed specified overt acts.12
11
We now look to the evidence. Condensed to pith, the 6,000 pages of evidence disclose that the District, acting through its Board of Trustees of seven members, operated the public schools in the towns of Benavides and Freer, each having slightly more than 1,000 pupils. From time to time the Board met to appoint (a) an assessor-collector, (b) an independent firm of engineers and accountants to assist the assessor-collector in determining the ownership and valuation of property—particularly mineral lands and complex fractional interests therein—in the District, (c) a Board of Equalization, and (d) a depository of the District's funds, and also met (e) to consider and propose to the electorate the authorization and sale of bonds in 1949 ($265,000) and in 1950 ($362,500) to finance the construction of new school facilities.
12
In actual operations the engineering-accounting firm would annually prepare and submit to the assessor-collector a list showing the ownership and its appraisal of the value of the various properties and mineral interests in the District, from which, after the Board of Equalization and completed its work thereon (in June and July), the assessor-collector would prepare the tax rolls for the current year and therefrom prepare and sent out the tax statements by mail, and on receipt of checks in payment of taxes (the great majority of which were received in the mails) would—with exceptions later noted—deposit them to the credit of the District in the depository bank, and then mail receipts to the taxpayers.
13
Three members of the Board resided in Freer, and the other four resided in Benavides. Aside from the meetings for the purposes above stated, the Trustees rarely met as a board. Each group, rather independently, operated the schools in its town, and the actual costs of operation were about the same in each town.13 But the Benavides members handled generally the day-to-day business of the District, including the staffing and operation of its office, the keeping of its books and records, the making of its contracts, its relations with the assessor-collector, the Annual Report to the State Commissioner of Education (to obtain from the State the amount per pupil prescribed to be paid to such school districts by the Texas law) and the routine disbursement of its funds.
14
Petitioners Saenz, Garza and Garcia were three of the four Benavides members of the Board. Petitioners Oscar Carrillo, Sr., and O. P. Carrillo were, respectively, the secretary of and the attorney for the Board. Petitioner Chapa was the assessor-collector. Petitioner Parr was the president and principal stockholder of petitioner Taxes State Bank—the authorized depository of the District's funds—and of petitioner San Diego State Bank, and there was evidence that, although having no official connection with the District, he practically dominated and controlled its affairs, kept its books and records in his office, outside the District, until July 1951, and countersigned all its checks after June 1950. Petitioner Donald was the cashier and administrative manager of the Texas State Bank, and petitioner Oliveira was a director of that bank.
15
There was evidence that throughout the relevant period the District's funds, in large amounts, were misappropriated, converted, embezzled and stolen by petitioners. It tended to show that four devices were used for such purposes:
16
(1) At least once each month numerous district checks were issued against both its building and maintenance accounts in the depository bank payable to fictitious persons and were presented in bundles, totaling from $3,000 to $12,000, to the depository bank and, under the supervision of petitioner Donald, were cashed by it, without endorsements, and the currency was placed and sealed in an envelope and handed to the presenting person for delivery to petitioner Parr. The evidence tended to show that no less than $120,000 of the District's funds were misappropriated in this way. However, no one of these acts is charged as an offense by the indictment.
17
(2) At least once each month large numbers of district checks were issued to petitioners, other than Donald and the two banks, often in assumed names or in the names of members of their families, purporting to be in payment for services rendered or materials furnished to the District but which were not rendered or furnished, which checks were presented to the depository bank and, under the supervision of petitioner Donald, were cashed by it, often without or upon forged enforsements.14 The evidence tended to show that no less than $65,000 of the District's funds were misappropriated in this way. But again no one of these acts is charged as an ffense by the indictment.
18
(3) Petitioner Chapa converted district checks received by mail in payment of taxes, cashed the same—some at a local bank and some at the depository bank—upon unauthorized endorsements, and misappropriated the proceeds.15
19
(4) Petitioners Oscar Carrillo, Sr., and Garza obtained gasoline and oil for themselves upon the credit card and at the expense of the District.16 Use of the mails by 'causing' the oil company to place its invoices for these goods in the mails and to take the District's check in payment from the mails in Houston, constitutes the basis of Counts 17, 18 and 19 of the indictment.17
20
The letters, checks and invoices which Counts 1 through 19 of the indictment charge were 'caused' by petitioners to be placed in or taken from the mails in Houston, were all offered and received in evidence. Having fully stated the substance of them in notes 9 and 10, we do not repeat it here. The evidence also tended to prove the overt acts alleged in the twentieth count of the indictment.18
21
We now proceed to examine the court's charge to determine what theories and issues of fact were predicated by the court and submitted for resolution by the jury. Relative to Counts 1 through 19 of the indictment, the court, after reminding the jury that the indictment had been read to them at the beginning of the trial and that they would have it with them for study during their deliberations in the jury room, read aloud § 1341, defined numerous words and phrases, cautioned on many scores, including the weight to be given to the testimony of 'accomplices,' stressed the Government's burden of proof, and then proceeded to give the one verdict-directing charge covering those counts which, in pertinent part, was as follows:
22
'Applying the law to the first 19 counts of the indictment, if you believe beyond a reasonable doubt that the defendant George B. Parr and the other defendants charged and triable in Count One of the indictment considering each separately, did the things that it is alleged that he did do in the first count of the indictment, and at the time that it occurred there existed a scheme to defraud, and that, as a result of such scheme, the mails were used necessarily or incidentally to the carrying out of that scheme, and, as a result thereof, * * * he did cause the defrauding or obtaining of property by false pretenses and representations in any of the particulars set forth therein * * * and that he used the United States Mails as set forth in Count One, * * * then it becomes your duty * * * to find such defendant or defendants guilty as charged in the first count of the indictment and so find by your verdict. * * * The same reasoning and instructions apply to each of the first nineteen counts of the indictment and as to each of the defendants charged and triable in each of the first nineteen counts of the indictment.' Relative to the twentieth count, the court, after reading to the jury § 371, telling them that the essence of the charge 'is an agreement to use the mails to defraud,' defining 'conspiracy,' commenting on 'circumstantial evidence,' and stressing the Government's burden of proof, proceeded to give the one verdict-directing charge covering that count which, in pertinent part, was as follows:
23
'Therefore, with reference to the 20th count, if you believe as to any of the alleged conspirators that that person, together with at least one other, did the things charged against him in such count * * * to effect the objects of the alleged conspiracy, and thereafter there was done one or more of the overt acts set forth in such count * * * then it becomes your duty under the law as to such defendant or defendants that you so believe as to such 20th count were guilty, to so say by your verdict * * *.'19
24
In the light of this review of the indictment, the evidence adduced and the court's charge to the jury, we return to the questions presented by petitioners. There can be no doubt that the indictment charged and the evidence tended strongly to show that petitioners devised and practiced a brazen scheme to defraud by misappropriating, converting and embezzling the District's moneys and property. Counsel for petitioners concede that this is so. But, as they correctly say, these were essentially state crimes and could become federal ones, under the mail fraud statute, only if the mails were used 'for the purpose of executing such scheme.'20 Hence, the question is whether the uses of the mails that were charged in the indictment and shown by the evidence properly may be said to have been 'for the purpose of executing such scheme,' in violation of § 1341. Petitioners say 'no.' The Government says 'yes.'
25
Specifically, petitioners' position is that the School Board was required by law to assess and collect taxes for the acquisition of facilities for, and to maintain and operate, the District's schools; that the taxes, assessed in obedience to that duty and for those purposes, were not charged in the indictment or shown by the evidence to have been in any way illegal, and must therefore be assumed to have been entirely lawful; that to perform its duty to assess and collect such taxes the Board was both legally authorized and compelled to cause the mailing of the letters and their enclosures (tax statements, checks and receipts) complained of in the indictment, and hence those mailings may not be said to have been 'for the purpose of executing such scheme,' in violation of § 1341.
26
The Government, on the other hand, contends, first, that it was not necessary to charge or prove that the taxes were unlawful, for it is its view that once the scheme to defraud was shown to exist, the subsequent mailings of the letters and their enclosures, even though legally compelled to be made, constituted essential steps in the scheme and, in contemplation of § 1341, were made 'for the purpose of executing such scheme'; but it asserts that, in fact, it was impliedly charged in the indictment and shown by the evidence that the taxes were illegal in that they were assessed, collected and accumulated in excess of the District's needs in order to provide a fund for misappropriation, and, second, that the indictment charged and the evidence showed that the mailings impliedly pretended and falsely represented that the tax moneys would be used only for lawful purposes, and, hence, those mailings were caused for the purpose of obtaining money by false pretenses and misrepresentations, in violation of § 1341.
27
After asserting complete novelty of the Government's position and that no reported case supports it, counsel for petitioners point to what they think would be the 'explosively expanded' and incongruous results from adoption of the Government's theory, e.g., making federal mail fraud cases out of the conduct of a doctor's secretary or a business concern's billing clerk or cashier in mailing out, in the course of duty, the employer's lawful statements with the design, eventually executed, of misappropriating part of the receipts—the aptness of which supposed analogies, happily, we are not called on to determine. But petitioners' counsel concede that if such secretary, clerk or cashier—and similarly a member of a School Board—improperly 'pads' or increases the amounts of the statements and causes them to be mailed to bring in a fund to be looted, such mailings, not being those of the employer (or School Board), would not be duty bound or legally compelled and would constitute an essential step 'for the purpose of executing (a) scheme' to defraud, in violation of § 1341. They then repeat and stress their claim that here the indictment did not allege, and there was no evidence tending to show, that the taxes assessed and collected were excessive, 'padded' or in any way illegal, that the court did not submit any such issue to the jury and that such was not the Government's theory.
28
It is clear and undisputed that the School Board was under an express constitutional mandate to levy and collect taxes for the acquisition of facilities for, and to maintain and operate the schools of the District, Constitution of Texas, Art. 7, § 3, Vernon's Ann.St.Const.,21 and was required by statute to issue statements for such taxes and to deliver receipts upon payment.22
29
The Texas laws leave to the discretion of such school boards the valuation of properties and the fixing of the tax rate, within a prescribed limit, in the making of their assessments,23 and their determinations, made within the prescribed limit as here, are not judicially reviewable, Madeley v. Trustees of Conroe Ind. School Dist., Tex.Civ.App., 130 S.W.2d 929, 34, except enforcement may be enjoined for fraud.24 But the question whether the amount of such an assessment might be collaterally attacked, even for fraud, in a federal mail fraud case is not presented here, for after a most careful examination we are compelled to say that the indictment did not expressly or impliedly charge, and there was no evidence tending to show, that the taxes assessed were excessive, 'padded' or in any way illegal. Nor did the court submit any such issue to the jury. Indeed, the court refused a charge proffered by counsel for petitioners that would have submitted that issue to the jury.25 Such was not the Government's theory. In fact, the Government took the position at the trial, and argued to the jury, that the taxes assessed and collected were needed by the District for a new 'science hall,' 'office building,' 'plumbing facilities (and) all sorts of things,' and that petitioners' misappropriations not only deprived the District of those needed things but lft it 'two and one-half years in debt'—a sum several times greater than that said to have been misappropriated by petitioners.
30
The theory that it was impliedly charged and shown that the taxes were illegal in that they were assessed, collected and accumulated in excess of the District's needs in order to provide a fund for misappropriation, was first injected into the case by the Court of Appeals. That court rested its judgment largely upon its conclusion that the assessments were designed to bring in not only 'enough money * * * to provide for the legitimate operation of the schools (but also) enough additional * * * to provide the funds to be looted.' 265 F.2d at page 897. We think that theory and conclusion is not supported by the record. As stated, no such fact or theory was charged in the indictment, shown by the evidence or submitted to the jury, and moreover the Government negatived any such possible implication by taking the position at the trial that the assessed taxes were needed for new school facilities and improvements and that the misappropriations deprived the District of those needed things and left it 'two and one-half years in debt.'
31
Nor does the Government question that the Board, to collect the District's taxes (largely from nonresident property owners), was required by the state law to use the mails. Indeed, it took the position at the trial, and argued to the jury, that the Board could not 'collect these taxes from Houston, from the Humble, from The Texas Oil Company, and from the taxpayers all over the State of Texas without the use of the United States mails.' The Court of Appeals thought that such legal compulsion placed petitioners 'on the horns of a dilemma' because they could not at once contend that the law compelled them to cause the mailings and deny that they did cause them. 265 F.2d at page 898.
32
The crucial question, respecting Counts 1 through 16 of the indictment, then comes down to whether the legally compelled mailings of the lawful—or, more properly, what are not charged or shown to have been unlawful—letters, tax statements, checks and receipts, complained of in those counts, properly may be said to have been for the purpose of executing a scheme to defraud because those legally compelled to cause and causing those mailings planned to steal an indefinite part of the receipts.
33
The fact that a scheme may violate state laws does not exclude it from the proscriptions of the federal mail fraud statute, for Congress 'may forbid any * * * (mailings) in furtherance of a scheme that it regards as contrary to public policy whether it can forbid the scheme or not.' Badders v. United States, 240 U.S. 391, 393, 36 S.Ct. 367, 368, 60 L.Ed. 706. In exercise of that power, Congress enacted § 1341 forbidding and making criminal any use of the mails 'for the purpose of executing (a) scheme' to defraud or to obtain money by false representations leaving generally the matter of what conduct may constitute such a scheme for determination under other laws. Its purpose was 'to prevent the post office from being used to carry (such schemes) into effect * * *.' Durland v. United States, 161 U.S. 306, 314, 16 S.Ct. 508, 511, 40 L.Ed. 709. Thus, as its terms and purpose make clear, '(t)he federal mail fraud statute does not purport to reach all frauds, but only those limited instances in which the use of the mails is a part of the execution of the fraud, leaving all other cases to be dealt with by appropriate state law.' Kann v. United States, 323 U.S. 88, 95, 65 S.Ct. 148, 151, 89 L.Ed. 88. Therefore, only if the mailings were 'a part of the execution of the fraud,' or, as we said in Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 363, 98 L.Ed. 435, were 'incident to an essential part of the scheme,' do they fall within the ban of the federal mail fraud statute.
34
The Government, with the support of the cases, soundly argues that immunization from the ban of the statute is not effected by the fact that those causing the mailings were public officials26 or by the fact that the things they caused to be mailed were 'innocent in themselves,' if their mailing was 'a step in a plot.' Badders v. United States, supra, 240 U.S. at page 394,27 36 S.Ct. at page 368. It then argues that the jury properly could find that the mailings, complained of in the first 16 counts—namely, the letter notice of a modification in assessed valuation, two letters giving notice of hearings before the Board of Equalization to determine taxable value of property, one letter complying with a property owner's request for an 'auxiliary tax notice,' and 12 checks of taxpayers and their letters of transmittal28—were, even if innocent in themselves, each 'a step in a plot' or scheme to defraud, and that they were caused to be made 'for the purpose of executing such scheme' in violation of § 1341. But it cites no case holding that the mailing of a thing which the law required to be mailed may be regarded as mailed for the purpose of executing a plot or scheme to defraud. Instead, it frankly concedes that there is no such case. It says that 'there is no reported case exactly like this,' but expresses its view that this case rests on a factually 'unique situation.'
35
We agree that the factual situation is uniquie, and, of course, agree, too, that the fact there is no reported decision involving similar factual circumstances or legal theories is not determinative. But in the light of the particular circumstances of this case, and especially of the facts (1) that the School Board was legally required to assess and collect taxes, (2) that the indictment did not charge nor the proofs show that the taxes assessed and collected were in excess of the District's needs or that they were 'padded' or in any way unlawful, (3) that no such issue was submitted to, nor, hence, determined by, the jury, (4) that the Board was compelled to collect and receipt for the taxes by state law, which, in the circumstances here, compelled it to use and cause (here, principally by permitting) the use of the mails for those purposes, we must conclude that the legally compelled mailings, complained of in the first 16 counts of the indictment, were not shown to have been unlawful 'step(s) in a plot,' Badders v. United States, supra, 240 U.S. at page 394, 36 S.Ct. at page 368, 'part(s) of the execution of the fraud,' Kann v. United States, supra, 323 U.S. at page 95, 65 S.Ct. at page 151, 'incident to an essential part of the scheme,' Pereira v. United States, supra, 347 U.S. at page 8, 74 S.Ct. at page 363, or to have been made 'for the purpose of executing such scheme,' within the meaning of § 1341, for we think it cannot be said that mailings made or caused to be made under the imperative command of duty imposed by state law are criminal under the federal mail fraud statute, even though some of those who are so required to do the mailing for the District plan to steal, when or after received, some indefinite part of its moneys.
36
Nor, in the light of the facts in this record, can it be said that the mailings complained of in the first 16 counts of the indictment constituted false pretenses and misrepresentations to obtain money. Surely the letters giving notice of the modification of an assessed valuation and of valuation hearings to be conducted by the Board of Equalization, constituting the basis of Counts 1, 2 and 5, contained no false pretense or misrepresentation. We fail to see how the letter complying with a property owner's request for an 'auxiliary tax notice,' constituting the basis of Count 7, could be said to be a misrepresentation. And the mailings complained of in the remaining counts, even though 'caused' by petitioners, certainly carried no misrepresentations by petitioners for they were checks (and covering letters) of taxpayers in payment of taxes which, so far as this record shows, were in all respects lawful obligations. On this phase of the case the Government has principally relied on the fact that the Annual Reports of the Board and the depository bank to the State Commissioner of Education, apparently necessary to obtain the amount per pupil allowed by the State to such districts, contained false entries. But the fact is those mailings were not charged as offenses in the indictment, doubtless because they were, as shown, between Benavides and Austin, Texas, and therefore not within the Division, nor hence the venue, of the court.29
37
Counts 17, 18 and 19 of the indictment relate to a different subject. They charged, and there was evidence tending to show, that petitioners Oscar Carrillo, Sr., and Garza fraudulently obtained gasoline and other filling station products and services for themselves upon the credit card and at the expense of the District knowing, or charged with knowledge, that the oil company would use the mails in billing the District for those things. The mailings complained of in those counts were two invoices, said to contain amounts for items so procured by Carrillo and Garza, mailed by the oil company, at Houston, to the District, at Benavides, and the District's check mailed to the oil company, at Houston, in payment of the latter invoice. We think these counts are ruled by Kann v. United States, supra. Here, as in Kann, '(t)he scheme in each case had reached fruition' when Carrillo and Garza received the goods and services complained of. 'The persons intended to receive the (goods and services) had received (them) irrevocably. It was immaterial to them, or to any consummation of the scheme, how the (oil company) * * * would collect from the (District). It cannot be said that the mailings in question were for the purpose of executing the scheme, as the statute requires.' 323 U.S. at page 94, 65 S.Ct. at page 151.
38
Inasmuch as the twentieth count charged petitioners with conspiring to commit the offense complained of in Count 1, and inasmuch as, on the facts of this record, that count cannot be sustained, it follows that petitioners' convictions upon the twentieth count cannot stand.
39
In view of our stated conclusions, it is unnecessary to discuss other contentions made by petitioners.
40
The strongest element in the Government's case is that petitioners' behavior was shown to have been so bad and brazen, which, coupled with the inability or at least the failure of the state authorities to bring them to justice,30 doubtless persuaded the Government to undertake this prosecution. But the showing, however convincing, that state crimes of misappropriation, conversion, embezzlement and theft were committed does not establish the federal crime of using the mails to defraud, and, under our vaunted legal system, no man, however bad his behavior, may be convicted of a crime of which he was not charged, proven and found guilty in accordance with due process.
41
Reversed.
42
Mr. Justice FRANKFURTER, whom Mr. Justice HARLAN and Mr. Justice STEWART join, dissenting.
43
The petitioners, nine individuals and two banks, were indicted for violations of, and conspiracy to violate, the Mail Fraud Act, 18 U.S.C. § 1341, 18 U.S.C.A. § 1341. All were convicted on the conspiracy count, and all but two, who were exonerated on all of the substantive counts, were convicted of eight or more of the nineteen specific mailings charged.
44
Together these petitioners controlled a public body created under Texas law, the Benavides Independent School District (hereinafter called the District), which administered the public schools within its geographical confines, and dominated the bank serving as depository of the District, designated as such pursuant to statute. Vernon's Tex.Rev.Civ.Stat., arts. 2763, 2763a. Through their control of the District's fiscal affairs they looted it of at least $200,000 between 1949 and 1953.
45
The District was vested by Texas law with a limited taxing power, Vernon's Tex.Rev.Civ.Stat. art. 2784e, and the annual collection of taxes was the primary source of revenue for maintaining its public schools. The District, and therefore these petitioners exercising the powers of the District, assessed and collected an ad valorem property tax which was by law to be devoted exclusively to the maintenance of the public schools. They were empowered to fix the rate of txation according to projected needs, whether for expenditures or reserves. Vernon's Tex.Rev.Civ.Stat. arts. 2784e, 2827. Apart from their duty to confine the tax to school purposes, petitioners' discretionary power to fix the rate was unlimited, except that a maximum rate was fixed by statute. Vernon's Tex.Rev.Civ.Stat. art. 2784e. In 1951, petitioners raised the tax rate to the statutory maximum, and thereafter taxed at that rate. Pursuant to a scheme devised in 1949, they regularly spent less than the amount collected on the schools, created no reserves, and appropriated a portion of the proceeds to their own uses. When their domination of the District ceased in 1954, school expenditures sharply rose, while tax collections remained substantially unchanged.
46
Conduct or transactions fall under the Mail Fraud Act if it be established that there existed 'any scheme or artifice to defraud' and that the mails were used 'for the purpose of executing such scheme or artifice or attempting so to do.' Of the nineteen substantive violations charged in this indictment, sixteen were mailings in connection with the tax collection process carried out by petitioners. As to those counts this case presents the question whether the Act is violated by a public officer vested by law with a discretionary power to levy taxes for the purpose of providing funds estimated to meet projected expenditures for a statutorily defined public need for the satisfaction of which the power is entrusted to him, who exercises that power over several years to collect through the mails sums which could as a matter of law be so expended, but a portion of which he at all times, throughout successive years of fixing the tax rate and utilizing the proceeds, actually intends to and does appropriate to his own uses.
47
Petitioners urge that because the amounts they collected each year were credited to the taxpayers on the District's books, and were not in excess of what they might, had they lawfully applied the proceeds, have expended for school maintenance, the collections were in effect lawful and did not constitute a fraudulent scheme in the collection of the taxes, so that there was no wrongdoing, nothing illicit, till they misapplied the innocently collected funds. Their case is that it must therefore be concluded that the mailings, which occurred in the course of the exercise of the District's lawful taxing power, were not for the purpose of 'executing' their scheme within the meaning of the Act, regardless of the fact that it was established beyond peradventure that their abuse of the District's powers was a seamless fraudulent scheme, conceived and executed as such with every element of the enterprise interdependent with every other.
48
Insofar as the defense rests on the lawfulness of the isolated act of mailing as a claim of immunity from the Mail Fraud statute, it is without substance. It has long been established that under this Act '(i)ntent may make an otherwise innocent act criminal, if it is a step in a plot.' Badders v. United States, 240 U.S. 391, 394, 36 S.Ct. 367, 368, 60 L.Ed. 706. In fact the heart of petitioners' effort to escape their conviction is the claim that the skulduggeries of which the jury found them guilty do not fall within the scope of the Mail Fraud statute because in sending out the tax bills they were the neutral vehicles of legal compulsion, although at the time that they sent them out, and having full governmental control of the process of controlling revenue and expending it, they had predetermined that the proceeds were not to be fully applied to school purposes but were in part to be diverted into their private pockets. It bespeaks an audacious lack of humor to suggest that the law anywhere under any circumstances requires tax collectors who send out tax bills, and who also have complete control over the returns, to send out bills to an amount which they predeterminedly design to put in part to personal uses. That is certainly not the law of Texas in any event. While it may be assumed that since the maintenance of the schools was the duty of the District, petitioners were obligated to collect some amount of ad valorem tax for that purpose, it is undisputed that how much was to be expended, and therefore how much was to be collected, was determined not by Texas law, but by the discretion, the voluntary act, of petitioners themselves. No Texas statute required them to collect what they intended to spend to keep the schools running, plus an amount which they intended to misappropriate,1 and that is precisely what the proof established and the jury found that they did.
49
Petitioners' claim raises the further question whether, even if the mailings were not immune in themselves, they were too remote from the purpose of the fraudulently designed scheme to be deemed in 'execution' of it. Whether a mailing which occurs in discernible relation to a scheme to defraud is an execution of it is a question of the degree of proximity of the mailing to the scheme. The statute was enacted 'with the purpose of protecting the public against all such intentional efforts to despoil, and to prevent the post office from being used to carry them into effect * * *.' Durland v. United States, 161 U.S. 306, 314, 16 S.Ct. 508, 511, 40 L.Ed. 709. Whether the post office was so used must be the Court's central inquiry. If the use of the mails occurred not as a step in but only after the consummation of the scheme, the fraud is the exclusive concern of the States. Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88. The adequate degree of relationship between a mailing which occurs during the life of a scheme and the scheme is of course not a matter susceptible of geometric determination. In United States v. Young, 232 U.S. 155, 34 S.Ct. 303, 58 L.Ed. 548, we said that it is not necessary that the scheme contemplate the use of the mails as an essential element, and in Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 363, 98 L.Ed. 435, we found a mailing to be in execution of a scheme because it was 'incident to an essential part' of it. The determining question is whether the mailing was designed materially to aid the consummation of the scheme, as for example, in Pereira v. United States, supra, by the obtaining of its proceeds through the innocent collection of defendant's fraudulently obtained check by his bank.
50
For the purposes of the statute, the significance of the relationship between scheme and mailing depends on the interconnection of the parts in a particular scheme. Ordinarily, once the fraud is proved its scope is not a matter of dispute. But when, as here, the fraud involves the abuse of a position of public trust, closer analysis is required. Petitioners seek to denude their scheme of its range and pervasiveness. They construct an artifact whereby their fraudulent scheme was, as it were, intramural, unrelated to taxpayers to whom they sent the tax bills, and so the mails, the ingenuous argument runs, were not used in the fraud because the wrongdoing only arose after the mails had fulfilled their function by bringing the returns. The wrong is thus nicely pigeonholed as embezzlement, without any prior scheme.
51
The fraudulent, episodic, petty-cash peculations of a clerk at a regulatory agency are frauds upon that agency, and although taxpayers generally are injured by the fraud and in that sense are the ultimate objects of it, the mailings by which the tax proceeds are collected which constitute the vast government funds out of which the agency's funds are taken, are, as a matter of practical good sense by which law determines such issues of causation, see Gully v. First National Bank, 299 U.S. 109, 117—118, 57 S.Ct. 96, 99—100, 81 L.Ed. 70, too remote from the scheme to be deemed in execution of it. But to analogize petitioners' scheme to a conventional case of peculation by an employee, whether public or private, is to disregard the facts of this case.
52
The petitioners themselves controlled the entire conduct of the District's fiscal affairs, and their own decision, limited only by a statutory ceiling, determined the amount of the tax that would be collected. Petitioners' exercise of their power to fix the amount of the tax, an exercise which ultimately assured to themselves an excess of funds over their intended expenditures or reserves for school purposes, was necessarily central to their scheme. Such control obliterates the line they seek to draw between themselves and the entity it was their duty to serve. By demanding and collecting what they intended to misappropriate they made the process of collection an inseparable element of their scheme.
53
The petitioners' control of the District and therefore of its tax rate, similarly disposes of their contentions that one or another element of a technical fraud upon the taxpayers of the District is absent. The suggestion that in the collection of taxes there was no representation by petitioners to the taxpayers of the District might be pertinent were the system a self-executing tax structure under which the time for, and amount of, the payment due and the payee to whom it is to be made are designated by statute, so that the tax collector, serving as an automatic conduit, does nothing to cause collection of the tax. These collectors, however, were the prime actors in the structure. They not only billed the taxpayers but also fixed the rate of the tax itself. For that reason it cannot be said that the taxpayers paid their taxes solely under compulsion of Texas law, and not at all in reliance upon the implied false representation of petitioners that the amounts assessed were collected to meet projected expenditures. The taxpayers necessarily depended upon petitioners' setting of the rate for knowledge of what amount was to be paid. Each taxpayer who testified revealed that he awaited his bill before making payment. The fact, much relied on by petitioners, that an available Texas procedure for challenging the tax was not invoked, establishes not, as is argued, the legality of the tax, but the reliance of taxpayers on petitioners' implied representations in the collection of it.
54
The intention of petitioners to have their bills paid is beyond dispute. But they urge an absence of detriment to the taxpayers who did rely since their payments were ordinarily credited to them on the District's books. The claim is frivolous. Whether they are viewed as having overpaid for school services, or having been deprived of services for which they paid, the detriment to the taxpayers is self-evident. It is in part for this reason that petitioners' attempted analogy between this case and the case of a doctor's secretary who sends out just bills but intends to steal from the proceeds is to urge that a mountain is a molehill. Even if the secretary, rather than her principal, is regarded as making the representation to patients that they may pay her, they are not injured by so doing, and they are not defrauded. The result would be very different, as petitioners concede, if the bills so sent out were padded by her. Here inescapably the bills were padded by the predetermined increase, which, though within technical legal limits, was for fraudulent ends.
55
Although this analysis appropriately disposes of this case it goes beyond the requirements of the statute. While the Mail Fraud Act is directed against the utilization of the mails in carrying out a fraudulent scheme, the penal prohibition of the use of the mails for a fraud does not turn on the niceties of the common-law offense of obtaining money or goods under false pretenses, see Durland v. United States, 161 U.S. 306, 312—313, 16 S.Ct. 508, 510 511, 40 L.Ed. 709. The statute sought to forbid the use of the mails as a vehicle for a fraudulent enterprise in the ordinary sense of a fraud—a dishonest and cheating enterprise. It is significant that the Act was amended in 1909 by adding to the outlawry of a 'scheme or artifice to defraud' the expanding condemnation, 'obtaining money or property by means of false or fraudulent pretenses, representations, or promises.' 35 Stat. 1130. While of course penal criminal statutes must not be extended beyond the fair meaning of English words, they must not be artificially and unreasonably contracted to avoid bringing a new situation within their scope which plainly falls within it in light of 'the evil sought to be remedied.' Durland v. United States, supra, 161 U.S. at page 313, 16 S.Ct. at page 511. The lay, commonsensical way of interpreting condemnation of aspects of fraud in federal penal legislation is illustrated by the settled doctrine that the prohibition against defrauding the United States in 18 U.S.C. § 371, 18 U.S.C.A. § 371, extends far beyond the common-law conception of fraud in that financial or property loss is not an ingredient of the offense. Haas v. Henkel, 216 U.S. 462, 480, 30 S.Ct. 249, 254, 54 L.Ed. 569; see also United States v. Plyler, 222 U.S. 15, 32 S.Ct. 6, 56 L.Ed. 70. If the fraudulent enterprise of which this record reeks is not a scheme essentially to defraud the taxpayers who constitute the District rather than a disembodied, abstract entity called the District, English words have lost their meaning.
56
Petitioners finally urge as to these counts that their convictions cannot be sustained because, even if the facts were sufficient to sustain a conviction, the indictment did not allege, the proof did not show, the conduct of the trial and the summations to the jury did not reveal, and the charge to the jury did not present, such a case either as to fact or law. It is apparent however that every aspect of this prosecution was focused on the Government's basic assertion that because petitioners controlled the District's affairs, continuously schemed to and did misappropriate funds while continuing to collect fasely represented revenues from taxpayers by mail, the use of the mails to collect taxes was in execution of a scheme to defraud the District and its taxpayers.
57
The indictment in every substantive count expressly alleged 'a scheme and artifice to defraud the BISD, persons obligated by the laws of the State of Texas to pay texas to the BISD (hereinafter called taxpayers), the State of Texas, and * * * to obtain the money and property of the BISD and the taxpayers for themselves * * *.' The primary devices allegedly undertaken to effectuate the scheme were the obtaining and maintaining of control of the District and its depository bank, and the collection of taxes by mail from District taxpayers during the period of the scheme.
58
The Government's proof established a design of petitioners to obtain control of the political and fiscal mechanism of the District, and that, having obtained control and being the dominus of the District, they sent out tax bills of the returns from which, year after year, they took a portion for themselves. The proof thus established a continuing course of conduct constituting, by the very nature of the systematic continuity of the practice, a conscious scheme to utilize their powers of government, of which setting the tax rate was one, for fraudulent purposes, in the execution of which the mails of the United States were a necessary instrument. Objections to government evidence offered on the substantive counts as to events before 1951 were overruled on the well-settled ground that the offers were admissible to show the continuing scheme to acquire, maintain and abuse control of the District.
59
In its summation the Government repeatedly characterized the scheme which it had sought to prove as one to employ petitioners' comprehensive control to maximize District revenues with a view to stealing funds,2 and the charge adequately placed the issues of the indictment and trial before the jury.
60
The remaining three substantive counts of the indictment charged that as part of the same scheme to control and defraud the District the petitioners used the District's charge account to obtain gasoline for their personal use, which acts resulted in the use of the mails by the vendor to present the appropriate bills to the District. The mailings of two such bills and of one payment by the District were charged as separate offenses. Two matters are to be noted. First, it is suggested that there was no misrepresentation by the petitioners, because only the correct bill of the vendor was sent to the District. No reason appears however why a bill which the jury could have found petitioners knowingly caused to be sent to the District constitutes less of a representation by them that the gasoline consumed was used for the District's purposes than a voucher directly submitted by them for reimbursement for cash purchases.
61
Second, it is urged that, under the rationale of Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88, the mailings, even if caused by petitioners, were not in execution of a scheme to defraud because the scheme was consummated once they received the gasoline. Kann v. United States found an appropriate instance of such a limitation; but it also expressly excepted from the force of the rule situations in which the subsequent mailing has the function of affording 'concealment so that further frauds which are part of the scheme may be perpetrated,' supra, 323 U.S. at pages 94—95, 65 S.Ct. at page 151. Here the jury might properly have found that consumption of gasoline for private purposes was but one device of petitioners for turning their control of the District to their personal advantage, and that the continuing presentation and payment of the bills, and not merely the receipt of the gasoline, was the purpose of the scheme.
62
Petitioners raise no substantial objections to the conspiracy convictions that are not disposed of by what has already been said. The petitioners' other attacks against the verdict require no more discussion than given below. 265 F.2d 894.
63
I would affirm the judgments.
1
The petitioners are George B. Parr, D. C. Chapa, B. F. Donald, Octavio Saenz, Jesus G. Garza, Santiago Garcia, Oscar Carrillo, Sr., O. P. Carrillo, Jesus Oliveira, Texas State Bank of Alice and San Diego State Bank, all of Duval County, Texas, in the Corpus Christi Division of the United States District Court for the Southern Division of Texas.
2
Section 1341 provides, in pertinent part, as follows:
'Whoever, having devised * * * any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses * * * for the purpose of executing such scheme * * * places in any post office or authorized depository for mail matter, any matter * * * to be sent or delivered by the Post Office Department, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail according to the direction thereon * * * any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both.' 18 U.S.C. § 1341, 18 U.S.C.A. § 1341.
3
Section 371 provides, in pertinent part, as follows:
'If two or more persons conspire * * * to commit any offense against the United States, * * * and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined not more than $10,000 or imprisoned not more than five years, or both. * * * 18 U.S.C. § 371, 18 U.S.C.A. § 371.
4
Counts on which
Names convicted Sentences
George B. Parr All Aggregate of 10 years and $20,000 fine.
D. C. Chapa All Aggregate of 5 years.
B. F. Donald 1-14, 17-20 Aggregate of 4 years.
Jesus G. Garza All but 7 3 years, but suspended on probation.
Santiago Garcia 4, 5, 8, 13, 14, 3 years, but suspended on probation.
15, 17-19.
Octavio Saenz All but 7 Aggregate of 3 years.
Oscar Carrillo, Sr. All Aggregate of 4 years.
O. P. Carrillo 20 2 years, but suspended on probation.
Jesus Oliveira 20 2 years, but suspended on
probation, and fine of $7,000.
Texas State Bank of Alice All Fine of $2,000.
San Diego State Bank 1-3, 7, 10-12, Fine of $900.
16, 20
5
The District operates the public schools in the towns ofBenavides and Freer in Duval County, Texas. The schools in each town have slightly more than 1,000 pupils.
6
The persons named in the allegation were petitioners Parr, Chapa, Oscar Carrillo, Sr., O. P. Carrillo, Saenz, Garza and Garcia.
7
The persons named in the allegation were petitioners Parr, Donald and Oliveira.
8
The allegation was that control of the San Diego State Bank would be maintained by petitioner Parr.
9
The letter referred to was one by the District of Sept. 26, 1952, to Humble Oil & Refining Co., Houston, Texas, giving notice of a modification in the assessed value of the latter's property in the District to $2,542,920 for the year 1952, and advising that the amount of tax, at the rate of $1.75 per $100, was $44,501.10.
10
The second count described a letter by the Secretary of the Board of Equalization of the District, dated July 18, 1952, to Humble Oil & Refining Co., Houston, Texas, giving notice of a hearing to be held by that Board at Benavides on Aug. 1, 1952, to determine the taxable value of the latter's lands in the District for the year 1952.
The third count described a check of Humble Oil & Refining Co., Houston, Texas, dated Sept. 26, 1952, payable to the Tax Collector in the amount of $43,166.07, and the accompanying letter of the taxpayer, dated Sept. 29, 1952, advising that the attached check was in payment of 'the correct taxes (of) $44,501.10' on the taxpayer's property in the District for 1952, less 'the 3 per cent discount for
September payment of.$1,335.03 leaving a net of $43,166.07 as evidenced by our check.'
The fourth count described a check of Humble Oil & Refining Co., Houston, Texas, dated Sept. 24, 1953, payable to the Tax Collector in the amount of $53,807.35, and the accompanying letter of the taxpayer, dated Sept. 24, 1953, advising that the attached check was in payment of taxes for the year 1953.
The fifth count described a letter by the Secretary of the Board of Equalization, dated May 20, 1953, to Humble Oil & Refining Co., Houston, Texas, giving notice of a hearing to be held by that Board at Benavides on June 2, 1953, to determine the taxable value of the latter's property in the District for the year 1953.
The sixth count described a check of Humble Oil & Refining Co., dated Sept. 25, 1951, payable to the Tax Collector in the amount of $34,285.09, and the accompanying letter of the taxpayer, dated Sept. 26, 1951, advising that the attached check was in payment of taxes for the year 1951.
The seventh count described a letter of Dec. 3, 1952, by the District to C. W. Hahl Co., Houston, Texas, complying with a request for an 'auxiliary tax notice covering Surface Fee in the Rosita Townsite.'
The eighth, ninth and tenth counts described checks of C. W. Hahl Co., Houston, Texas, dated Sept. 25, 1953, Sept. 21, 1951 and Sept. 26, 1952, respectively, payable to the Tax Collector in the amounts of $544.21, $555.25 and $451.70, respectively, and accompanying letters of the taxpayer advising that the attached checks were in payment of taxes on certain property in the District for the years 1953, 1951 and 1952, respectively.
The eleventh, twelfth and thirteenth counts described voucher checks of the Texas Company, Houston, Texas, dated Sept. 27, 1951, Sept. 26, 1952, and Sept. 30, 1953, respectively, payable to the Tax Assessor in the amounts of $13,532.64, $13,078.72 and $14,665.04, respectively, in payment of taxes on certain property in the District for the years 1951, 1952 and 1953, respectively.
The fourteenth count described a check of the Texas Pipe Line Co., Houston, Texas, dated Sept. 30, 1953, payable to the Tax Collector in the amount of $330.84, and the taxpayer's accompanying
letter advising that the attached check was in payment of taxes for the year 1953.
The fifteenth and sixteenth counts described checks of J. E. Beall, Houston, Texas, dated Sept. 30, 1953 and Oct. 24, 1952, respectively, payable to 'Benavides Indep. School Dist.' in the amounts of $415.72 and $355.55, respectively, in payment of taxes for the years 1953 and 1952, respectively.
Count 17 described an invoice or statement of Continental Oil Co., Houston, Texas, dated May 25, 1953, to the District for merchandise in the amount of $273.85; Count 18 described a check of the District dated Mar. 31, 1953, payable to Continental Oil Co. in the amount of $353.02, and Count 19 described a statement of Continental Oil Co., dated Mar. 20, 1953, to the District for merchandise in the amount of $353.02, which was paid by the District's check described in Count 18.
11
Rule 18 of Fed.Rules Crim.Proc. provides:
'Except as otherwise permitted by statute or by these rules, the prosecution shall be had in a district in which the offense was committed, but if the district consists of two or more divisions the trial shall be had in a division in which the offense was committed.'
12
The overt acts alleged were the sending by mail of tax receipts to Humble Oil & Refining Co. at Houston, Texas, on Oct. 4, 1951, to the Texas Co. at Houston, Texas, on Oct. 11, 1951, and Oct. 15, 1953, and to the Texas Pipe Line Co. at Houston, Texas, on Oct. 7, 1952; the deposit by the Texas Pipe Line Co. in the mails at Houston, Texas, on Sept. 30, 1952, of a letter and attached check for $325.07 addressed to the assessor-collector at Benavides, Texas; that D. C. Chapa converted and cashed at the Merchants Exchange Bank, Benavides, Texas, checks payable to the District assessor-collector, (1) of J. E. Beall for $355.55 on Nov. 8, 1952, (2) of Barbara Oil Co. for $361 on Nov. 15, 1952, (3) of O. W. Greene for $298.43, (4) of Peal Properties for $230.92, (5) of Allen Martin for $300.82 on Nov. 22, 1952, and (6) of Jones-Laughlin Supply for $320.15 on Oct. 17, 1952.
13
The actual costs of operating the schools at Freer were about $200,000 per year. They were estimated to be approximately the same amount at Benavides. Although there was evidence estimating the District's total tax assessments, not collections, at about $400,000 for 1949, at about $650,000 for 1952, and the tax rolls show a total tax assessment of $519,613.51 for 1953, the Board's records show tax collections of $310,840.59 for 1949, $295,161.25 for 1950, $370,852.42 for 1951 and $385,084.96 for 1952. The Board had other income, including payments from Duval County and the pupil per capita amount paid by the State, of about $140,000 per year.
14
Petitioners Saenz, Garcia, Garza, Oliveira and Chapa regularly received district payroll checks, sometimes in their own names but usually under one or more fictitious names, for services not rendered. Saenz regularly received eight payroll checks in various names; Garcia regularly received payroll checks in the name of his daughter, so did Garza; Oliveira regularly received such checks, sometimes payable to him and at other times to his implement company. Chapa regularly received three such checks each month in various names. All of the checks mentioned were for from $100 to $125. A payroll check for $500 was issued monthly in the name of Parr's brother-in-law, who rendered no services for the District.
15
Included in the checks so converted and cashed by Chapa were the checks of J. E. Beall for $415.72 and for $355.55, described in the fifteenth and sixteenth counts, but there was evidence that he similarly converted and cashed other district checks totaling about $25,000.
16
There was evidence, too, that petitioner O. P. Carrillo procured the remodeling of his law office and new office furniture and equipment on the credit and at the expense of the District to the extent of about $2,500.
17
See not 10 re Counts 17, 18 and 19.
18
See note 12.
19
Before the giving of the charge, petitioners' counsel, among numerous requests for charge, had requested the court to charge the jury as follows:
'You are further instructed that if the use of the mails involved in each of the first 19 counts of the indictment was solely for the purpose of collection of taxes by the Benavides Independent School District, or for the purpose of payment of same by taxpayers, or if you have a reasonable doubt in regard thereto, you will find the Defendants and each of them, 'Not Guilty,' as to each of the first 19 counts of the indictment.'
A similar charge was requested with respect to the twentieth count. Both requests were denied.
After the court's charge, counsel for petitioners excepted to the charge on the grounds, among others, that it did 'not apply the law given to the facts in any way,' was 'an abstract instruction which nowhere applies the complete law * * * to the facts in this case,' and, with particular reference to the twentieth count, did not instruct the jury 'as to the exact essential elements of the offense involved in the first count of the indictment.'
20
18 U.S.C. § 1341, 18 U.S.C.A. § 1341, quoted in note 2.
21
Madeley v. Trustees of Conroe Ind. School Dist., Tex.Civ.App., 130 S.W.2d 929, 934.
22
Vernon's Tex.Rev.Civ.Stat., art. 2784e.
23
Vernon's Tex.Rev.Civ.Stat., arts. 2784e, 2827.
24
Madeley v. Trustees, supra, 130 S.W.2d at page 932; Kluckman v. Trustees, Tex.Civ.App., 113 S.W.2d 301, 303.
25
See note 19.
26
Bradford v. United States, 5 Cir., 129 F.2d 274, 276; Shushan v. United States, 5 Cir., 117 F.2d 110, 115, 133 A.L.R. 1040. See also Steiner v. United States, 5 Cir., 134 F.2d 931, 933.
27
United States v. Earnhardt, 7 Cir., 153 F.2d 472; Holmes v. United States, 8 Cir., 134 F.2d 125, 133; Mitchell v. United States, 10 Cir., 126 F.2d 550; Stephens v. United States, 9 Cir., 41 F.2d 440. See also Ahrens v. United States, 5 Cir., 265 F.2d 514.
28
See notes 9 and 10.
29
Rule 18 of Fed.Rules Crim.Proc., quoted in note 11.
30
Petitioners Parr, Chapa and Donald were several times tried in the state court on charges growing out of matters involved in this case. Parr and Donald were ultimately found guilty but their convictions were reversed. Donald v. State, 1957, 165 Tex.Cr.R. 252, 306 S.W.2d 360; Parr v. State, Tex.Cr.App.1957, 307 S.W.2d 94. Chapa was tried on two other indictments returned in the state court, both charging fraudulent conversion of the District's funds. He was acquitted on the first indictment and convicted on the second but his conviction was reversed. Chapa v. State, 1957, 164 Tex.Cr.R. 554, 301 S.W.2d 127.
1
See Madeley v. Trustees, Tex.Civ.App., 130 S.W.2d 929, 932 and Kluckman v. Trustees, Tex.Civ.App., 113 S.W.2d 301, 303, both stating that an action will lie to enjoin the collection of taxes on the ground of the Trustees' fraud; and Stephens v. Dodds, Tex.Civ.App., 243 S.W. 710, suggesting that a referendum conferring on the Trustees the power to tax may be void if the tax is not for the statutory purpose.
2
'A continuing scheme year after year, sent out the tax notice, rake in the harvest through the mails, and then milk it by several methods as outlined.' '(T)his was a continuing scheme to defraud. This was not a scheme which these defendants thought up 'I will take one check and convert it to my own use,' but it went on, '48, '49, '50, '51, '52, '53, in order to draw out more fraudulent checks, more money from the depository banks they had to replenish the supply.' 'It is the Government's theory of this case that these defendants took over a mailorder business. * * * The defendants knew that; they had to know it.' 'What is the function of the School District? The function of the School District is to provide for the public education, the free education of the students, all the children who live in their district. * * * The trustees are someone in whom confidence * * * trust and reliance are placed by the taxpayers. * * * What was the school district used for in this instance? * * * it was used as a personal vehicle for the fraudulent designs and purposes of these defendants.'
| 01
|
363 U.S. 335
80 S.Ct. 1084
4 L.Ed.2d 1254
Honorable Julius J. HOFFMAN, Judge of the United States District Court for the Northern District of Illinois, Eastern Division, Petitioner,v.John F. BLASKI et al. Honorable Philip L. SULLIVAN, Chief Judge of the United States District Court for the Northern District of Illinois, Petitioner, v. Otto BEHIMER and John A. Roberts.
Nos. 25, 26.
Argued April 19 and 20, 1960.
Decided June 13, 1960.
Mr. Charles J. Merriam, Chicago, Ill., for petitioner Julius J. hoffman.
Mr. John C. Butler, Chicago, Ill., for petitioner Philip L. Sullivan.
Mr. Daniel V. O'Keeffe, Chicago, Ill., for respondents Blaski and others.
Mr. Warren E. King, Chicago, Ill., for respondents Behimer and Roberts.
Mr. Justice WHITTAKER delivered the opinion of the Court.
1
To relieve against what was apparently thought to be the harshness of dismissal, under the doctrine of forum non conveniens, of an action brought in an inconvenient one of two or more legally available forums, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055, and concerned by the reach of Baltimore & Ohio R. Co. v. Kepner, 314 U.S. 44, 62 S.Ct. 6, 86 L.Ed. 28,1 Congress, in 1948, enacted 28 U.S.C. § 1404(a), 28 U.S.C.A. § 1404(a), which provides:
2
's 1404. Change of venue.
3
'(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.'
4
The instant cases present the question whether a District Court, in which a civil action has been properly brought, is empowered by § 1404(a) to transfer the action, on the motion of the defendant, to a district in which the plaintiff did not have a right to bring it.
5
No. 25, Blaski.—Respondents, Blaski and others, residents of Illinois, brought this patent infringement action in the United States District Court for the Northern District of Texas against one Howell and a Texas corporation controlled by him, alleging that the defendants are residents of, and maintain their only place of business in, the City of Dallas, in the Northern District of Texas, where they are infringing respondents' patents. After being served with process and filing their answer, the defendants moved, under § 1404(a), to transfer the action to the United States District Court for the Northern District of Illinois.2 Respondents objected to the transfer on the ground that, inasmuch as the defendants did not reside, maintain a place of business, or infringe the patents in, and could not have been served with process in, the Illinois district, the courts of that district lacked venue over the action3 and ability to command jurisdiction over the defendants;4 that therefore that district was not a forum in which the respondents had a right to bring the action, and, hence, the court was without power to transfer it to that district. Without mentioning that objection or the question it raised, the District Court found that 'the motion should be granted for the convenience of the parties and witnesses in the interest of justice,' and ordered the case transferred to the Illinois district. Thereupon, respondents moved in the Fifth Circuit for leave to file a petition for a writ of mandamus directing the vacation of that order. That court, holding that '(t)he purposes for which § 1404(a) was enacted would be unduly circumscribed if a transfer could not be made 'in the interest of justice' to a district where the defendants not only waive venue but to which they seek the transfer,' denied the motion. Ex parte Blaski, 245 F.2d 737, 738.
6
Upon receipt of a certified copy of the pleadings and record, the Illinois District Court assigned the action to Judge Hoffman's calendar. Respondents promptly moved for an order remanding the action on the ground that the Texas District Court did not have power to make the transfer order and, hence, the Illinois District Court was not thereby vested with jurisdiction of the action. After expressing his view that the 'weight of reason and logic' favored 'retransfer of this case to Texas,' Judge Hoffman, with misgivings, denied the motion. Respondents then filed in the Seventh Circuit a petition for a writ of mandamus directing Judge Hoffman to reverse his order. After hearing and rehearing, the Seventh Circuit, holding that '(w)hen Congress provided (in § 1404(a)) for transfer (of a civil action) to a district 'where it might have been brought,' it is hardly open to doubt but that it referred to a district where the plaintiff * * * had a right to bring the case,' and that respondents did not have a right to bring this action in the Illinois district, granted the writ, one judge dissenting. 260 F.2d 317, 320.
7
No. 26, Behimer.—Diversity of citizenship then existing, respondents, Behimer and Roberts, residents of Illinois and New York, respectively, brought this stockholders' derivative action, as minority stockholders of Utah Oil Refining Corporation, a Utah corporation, on behalf of themselves and others similarly situated, in the United States District Court for the Northern District of Illinois against Standard Oil Company and Standard Oil Foundation, Inc., Indiana corporations but licensed to do and doing business in the Northern District of Illinois, for damages claimed to have been sustained through the alleged illegal acquisition by defendants of the assets of the Utah corporation at an inadequate price.
8
After being served with process and filing their answer, the defendants moved, under § 1404(a), to transfer the action to the United States District Court for the District of Utah.5 Respondents objected to the transfer on the ground that, inasmuch as the defendants were not incorporated in or licensed to do or doing business in, and could not be served with process in, the district of Utah, the courts of that district lacked venue over the action6 and ability to command jurisdiction over the defendants;7 that therefore that district was not a forum in which the respondents had a right to bring the action, and, hence, the court was without power to transfer it to that district. Without mentioning the question raised by that objection, the court found that the proposed transfer would be 'for the convenience of the parties and witnesses, and in the interest of justice,' and ordered the case transferred to the district of Utah.
9
Respondents then filed in the Seventh Circuit a petition for a writ of mandamus directing the District Court to reverse its order. After hearing, the Seventh Circuit, following its decision in Blaski v. Hoffman, supra, granted the writ. 261 F.2d 467.
10
To settle the conflict that has arisen among the circuits respecting the proper interpretation and application of § 1404(a),8 we granted certiorari. 359 U.S. 904, 79 S.Ct. 583, 3 L.Ed.2d 570; 361 U.S. 809, 80 S.Ct. 50.
11
Without sacrifice or slight of any tenable position, the parties have in this Court commendably narrowed their contentions to the scope of the only relevant inquiry. The points of contention may be sharpened by first observing what is not in contest. Discretion of the district judges concerned is not involved. Propriety of the remedy of mandamus is not assailed. No claim is made here that the order of the Fifth Circuit denying the motion of respondents in the Blaski case for leave to file a petition for writ of mandamus, 245 F.2d 737, precluded Judge Hoffman or the Seventh Circuit from remanding that case.9 Petitioners concede that these actions were properly brought in the respective transferor forums; that statutory venue did not exist over either of these actions in the respective transferee districts,10 and that the respective defendants were not within the reach of the process of the respective transferee courts.11 They concede, too, that § 1404(a), being 'not unlimited,' 'may be utilized only to direct an action to any other district or division 'where it might have been brought," and that, like the superseded doctrine of forum non conveniens, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 91 L.Ed. 1055, the statute requires 'an alternative forum in which plaintiff might proceed.'
12
Petitioners' 'thesis' and sole claim is that § 1404(a), being remedial, Ex parte Collett, 337 U.S. 55, 71, 69 S.Ct. 944, 946, 93 L.Ed. 1207, should be broadly construed, and, when so construed, the phrase 'where it might have been brought' should be held to relate not only to the time of the bringing of the action, but also to the time of the transfer; and that 'if at such time the transferee forum has the power to adjudicate the issues of the action, it is a forum in which the action might then have been brought.'12 (Emphasis added.) They argue that in the interim between the bringing of the action and the filing of a motion to transfer it, the defendants may move their residence to, or, if corporations, may begin the transaction of business in, some other district, and, if such is done, the phrase 'where it might have been brought' should be construed to empower the District Court to transfer the action, on motion of the defendants, to such other district; and that, similarly, if, as here, the defendants move to transfer the action to some other district and consent to submit to the jurisdiction of such other district, the latter district should be held one 'in which the action might then have been brought.' (Emphasis added.)
13
We do not agree. We do not think the § 1404(a) phrase 'where it might have been brought' can be interpreted to mean, as petitioners' theory would required, 'where it may now be rebrought, with defendants' consent.' This Court has said, in a different context, that § 1404(a) is 'unambiguous, direct (and) clear,' Ex parte Collett, 337 U.S. at page 58, 69 S.Ct. at page 946, and that 'the unequivocal words of § 1404(a) and the legislative history * * * (establish) that Congress indeed meant what it said.' United States v. National City Lines, Inc., 337 U.S. 78, 84, 69 S.Ct. 955, 958, 93 L.Ed. 1226. Like the Seventh Circuit, 260 F.2d at page 322, we think the dissenting opinion of Judges Hastie and McLaughlin in Paramount Pictures, Inc. v. Rodney, 3 Cir., 186 F.2d 111, 119, correctly answered this contention:
14
'But we do not see how the conduct of a defendant after suit has been instituted can add to the forums where 'it might have been brought.' In the normal meaning of words this language of Section 1404(a) directs the attention of the judge who is considering a transfer to the situation which existed when suit was instituted.'
15
It is not to be doubted that the transferee courts, like every District Court, had jurisdiction to entertain actions of the character involved, but it is obvious that they did not acquire jurisdiction over these particular actions when they were brought in the transferor courts. The transferee courts could have acquired jurisdiction over these actions only if properly brought in those courts, or if validly transferred thereto under § 1404(a). Of course, venue, like jurisdiction over the person, may be waived. A defendant, properly served with process by a court having subject matter jurisdiction, waives venue by failing seasonably to assert it, or even simply by making default. Commercial Casualty Ins. Co. v. Consolidated Stone Co., 278 U.S. 177, 179—180, 49 S.Ct. 98, 99, 73 L.Ed. 252; Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167. But the power of a District Court under § 1404(a) to transfer an action to another district is made to depend not upon the wish or waiver of the defendant but, rather, upon whether the transferee district was one in which the action 'might have been brought' by the plaintiff.
16
The thesis urged by petitioners would not only do violence to the plain words of § 1404(a), but would also inject gross discrimination. That thesis, if adopted, would empower a District Court, upon a finding of convenience, to transfer an action to any district desired by the defendants and in which they were willing to waive their statutory defenses as to venue and jurisdiction over their persons, regardless of the fact that such transferee district was not one in which the action 'might have been brought' by the plaintiff. Conversely, that thesis would not permit the court, upon motion of the plaintiffs and a like showing of convenience, to transfer the action to the same district, without the consent and waiver of venue and personal jurisdiction defenses by the defendants. Nothing in § 1404(a), or in its legislative history, suggests such a unilateral objective and we should not, under the guise of interpretation, ascribe to Congress any such discriminatory purpose.
We agree with the Seventh Circuit that:
17
'If when a suit is commenced, plaintiff has a right to sue in that district, independently of the wishes of defendant, it is a district 'where (the action) might have been brought.' If he does not have that right, independently of the wishes of defendant, it is not a district 'where it might have been brought,' and it is immaterial that the defendant subsequently (makes himself subject, by consent, waiver of venue and personal jurisdiction defenses or otherwise, to the jurisdiction of some other forum).' 260 F.2d at page 321, and 261 F.2d at page 469.
18
Inasmuch as the respondents (plaintiffs) did not have a right to bring these actions in the respective transferee districts, it follows that the judgments of the Court of Appeals were correct and must be affirmed.
19
Affirmed.
20
Mr. Justice STEWART, concurring in No. 25.
21
Two Courts of Appeals disagreed about the meaning of a federal law, as conscientious federal courts sometimes do. From the point of view of efficient judicial administration the resulting history of this litigation is no subject for applause. But, as the Court points out, no claim was made here that the decision of the Fifth Circuit precluded Judge Hoffman or the Seventh Circuit from remanding the case, and on the merits of that question I agree with the Court that principles of res judicata were inapplicable. In any event, the conflict between the Circuits is now resolved, and what happened here will not happen again.
No. 25
22
Mr. Justice FRANKFURTER, whom Mr. Justice HARLAN and Mr. Justice BRENNAN join, dissenting.*
23
My special disagreement with the Court in this case concerns a matter of judicial administration arising out of the fact that after the question on the merits had been considered by the Court of Appeals for the Fifth Circuit, the same question between the same parties was later independently again adjudicated by the Court of Appeals for the Seventh Circuit. I cannot join the Court's approval of the right of the Seventh Circuit to make such a re-examination. It is true that in its opinion in this case and No. 26, Sullivan v. Behimer, decided today, the Court settles the question over which the two Courts of Appeals disagreed, so that it should not recur. This is not, however, an isolated case. A general principle of judicial administration in the federal courts is at stake. In addition, while the Court today settles one problem arising in the application of § 1404(a), other questions involving that section may readily give rise to conflicting views among the eleven Courts of Appeals. Under the Court's opinion, for example, transfer always depends upon the meaning of the federal venue statutes, and upon the jurisdiction of the transferee court over the person of the defendant, which may be a problem of constitutional dimensions, and there is obviously a substantial opportunity for conflict between the Courts of Appeals over those matters. We ought to forestall in other situations of potential controversy the kind of judicial unseemliness which this case discloses.
24
Plaintiffs brought this action for patent infringement in the United States District Court for the Northern District of Texas. Defendants moved pursuant to 28 U.S.C. § 1404(a), 28 U.S.C.A. § 1404(a), to have it transferred to the Northern District of Illinois. Finding transfer to be 'for the convenience of parties and witnesses, in the interest of justice,' the Texas District Court granted the motion and transferred the action to Illinois. Plaintiffs sought a writ of mandamus in the Court of Appeals for the Fifth Circuit to require the Texas District Court to set aside the transfer. In plaintiffs' view the Northern District of Illinois was not a place where the action 'might have been brought,' and thus the Texas District Court had no power to transfer the action there under § 1404(a). The Fifth Circuit fully examined the merits of this claim and rejected it, holding that in the circumstances before the court the Northern District of Illinois was a jurisdiction where the action 'might have been brought.' Leave to file a mandamus petition was therefore denied, and the action was duly transferred. 245 F.2d 737.
25
Upon the assignment of the action to the calendar of the United States District Court for the Northern District of Illinois, plaintiffs moved that court to disregard the explicit decision of another District Court in the same case, sustained by the appropriate Court of Appeals, and to send the case back to Texas. Plaintiffs advanced precisely the claim already rejected by the Fifth Circuit, namely, that the Northern District of Illinois was not a place where the action 'might have been brought' within the proper meaning of § 1404(a). Transfer had, in their view, erroneously been ordered by the Texas District Court and the power to transfer erroneously approved by the Fifth Circuit. Plaintiffs' application was denied by the Illinois District Court. Still not accepting the decision against them, plaintiffs again sought an appellate remedy by way of mandamus, this time in the Court of Appeals for the Seventh Circuit. Initially, mandamus was denied. On rehearing, however, the Seventh Circuit held that the prior decision of the Fifth Circuit was wrong. It held that § 1404(a) did not authorize transfer to Illinois, and it ordered the action 'remanded' to the Texas District Court within the Fifth Circuit, from whence it had come, to go forward there. 260 F.2d 317. That 'remand' is the order which is here on certiorari. 359 U.S. 904, 79 S.Ct. 583, 3 L.Ed.2d 570.
26
The Court of Appeals for the Seventh Circuit has thus refused to permit an Illinois District Court to entertain an action transferred to it with the approval, after full consideration of the problem involved, of the Court of Appeals for the Fifth Circuit. The Seventh Circuit considered no evidence not before the Fifth Circuit in so deciding. It considered precisely the same issue and reached a contrary legal conclusion. This was after explicit prior adjudication of the question at the same level of the federal system in the same case and between the same parties. Because the question involved is the transferability of the action, the consequence of the Seventh Circuit's disregard of the Fifth Circuit's prior decision is not only that a question once decided has been reopened, with all the wasted motion, delay and expense which that normally entails. Unless and until this Court acts, the litigants have no forum in which trial may go forward. Each Court of Appeals involved has refused to have the District Court in its Circuit hear the case and has sent it to a District Court in the other.
27
This is the judicial conduct the Court now approves. The Court does not suggest that the Court of Appeals for the Fifth Circuit was powerless, was without jurisdiction, to review, as it did, the question of the applicability of § 1404(a) to this case. The occasion for the Fifth Circuit's review by way of mandamus may have been, as the Court suggests, 'to protect its appellate jurisdiction,' but there can be no question that the Fifth Circuit undertook to and did resolve on its merits the controversy between the parties regarding the meaning of § 1404(a). Yet the Court decides that the review in the Fifth Circuit was so much wasted motion, properly ignored by the Court of Appeals for the Seventh Circuit in arriving at a contrary result. The case is treated just as if the Fifth Circuit had never considered the questions involved in it. I am at a loss to appreciate why all the considerations bearing on the good administration of justice which underlie the technical doctrine of res judicata did not apply here to require the Court of Appeals for the Seventh Circuit to defer to the previous decision. 'Public policy dictates that there be an end of litigation; that those who have contested an issue shall be bound by the result of the contest; and that matters once tried shall be considered forever settled as between the parties. We see no reason why this doctrine should not apply in every case where one voluntarily appears, presents his case and is fully heard, and why he should not, in the absence of fraud, be thereafter concluded by the judgment of the tribunal to which he has submitted his cause.' Baldwin v. Iowa Traveling Men's Ass'n, 283 U.S. 522, 525—526, 51 S.Ct. 517, 518, 75 L.Ed. 1244. One would suppose that these considerations would be especially important in enforcing comity among federal courts of equal authority.
28
The fact that the issue involved is the propriety of a transfer of the action only makes the case for deference to the previous decision of a coordinate court in the same litigation that much stronger. The course of judicial action now approved by the Court allows transfer over a persisting objection only when concurred in by two sets of courts: those in the place where the case begins, and those in the place to which transfer is ordered. Not only does the place of trial thus remain unsettled for an unnecessarily long time to accommodate double judicial consideration, but, as this case shows, the result of a disagreement between the courts involved is that the litigation cannot go forward at all unless this Court resolves the matter. Surely a seemly system of judicial remedies, especially appellate judicial remedies, regarding controverted transfer provisions of the United States Code should encourage, not discourage, quick settlement of questions of transfer and should preclude two Courts of Appeals from creating, through their disagreement in the same case, an impasse to the litigation which only this Court can remove. Section 1404(a) was meant to serve the ends of 'convenience' and 'justice' in the trial of actions. It perverts those ends to permit a question arising under § 1404(a), as here, to be litigated, in turn, before a District Court and Court of Appeals in one Circuit, and a District Court and Court of Appeals in another Circuit, one thousand miles distant, thereby delaying trial for a year and a half, only to have the result of all that preliminary litigation be that trial may not go forward at all until this Court shall settle the question of where it shall go forward, after at least another year's delay.
29
We are not vouchsafed claims of reason or of the due administration of justice that require the duplication of appellate remedies approved by the Court in this case. Why is not a single judicial appellate remedy in a Court of Appeals entirely adequate for one aggrieved by a transfer? Once the Court of Appeals for the Fifth Circuit had decided, after due consideration, that the proper meaning of § 1404(a) included Illinois as a place where the action 'might have been brought,' this should have ended the matter, except of course for this Court's power of review of that decision through the writ of certiorari, a power which we declined to exercise in this case. Nor does such a view of right and wise judicial administration depend upon the nature of the procedural or even jurisdictional issue in controversy. Technically res judicata controls even a decision on a matter of true jurisdiction. 'We see no reason why a court, in the absence of an allegation of fraud in obtaining the judgment, should examine again the question whether the court making the earlier determination on an actual contest over jurisdiction between the parties, did have jurisdiction of the subject matter of the litigation.' Stoll v. Gottlieb, 305 U.S. 165, at page 172, 59 S.Ct. 134, at page 138, 83 L.Ed. 104. See also Baldwin v. Iowa Traveling Men's Ass'n, supra, 283 U.S. 522, 51 S.Ct. 517, 75 L.Ed. 1244. Surely, a prior decision of a federal court on the unfundamental issue of venue ought to receive similar respect from a coordinate federal court when the parties and the facts are the same. The question is of the appropriate scheme of judicial remedies for enforcing rights under a federal remedial statute aimed at enhancing the fair administration of justice in the federal courts. It is not consonant with reason to permit a duplicate appellate procedure for questions under this statute, thereby forestalling final decision on a pre-trial matter which ought to be decided as expeditiously as possible, causing wasteful delay and expense, and thus depriving the statutory motion to transfer of effectiveness in achieving the ends of 'convenience' and 'justice' for which it was created.
No. 26
30
Mr. Justice FRANKFURTER, whom Mr. Justice HARLAN and Mr. Justice BRENNAN join, dissenting.*
31
The problem in this case is of important concern to the effective administration of justice in the federal courts. At issue is the scope of 28 U.S.C. § 1404(a), 28 U.S.C.A. § 1404(a), providing for the transfer of litigation from one Federal District Court to another. The main federal venue statutes necessarily deal with classes of cases, without regard to the occasional situation in which a normally appropriate venue may operate vexatiously. Section 1404(a) was devised to avoid needless hardship and even miscarriage of justice by empowering district judges to recognize special circumstances calling for special relief. It provides that an action, although begun in a place falling within the normally applicable venue rubric may be sent by the District Court to go forward in another district much more appropriate when judged by the criteria of judicial justice.
The terms of § 1404(a) are as follows:
32
'For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.'
33
The part of § 1404(a) the meaning of which is at issue here is its last phrase, 'any other district or division where it (the action) might have been brought.' The significance of this phrase is this: even though a place be found to be an overwhelmingly more appropriate forum from the standpoint of 'convenience' and 'justice,' the litigation may not be sent to go forward there unless it is a place where the action 'might have been brought.' Upon the scope to be given this phrase thus depends almost entirely the effectiveness of § 1404(a) to insure an appropriate place of trial, when the action is begun in an oppressive forum.
34
One would have to be singularly unmindful of the treachery and versatility of our language to deny that as a mere matter of English the words 'where it might have been brought' may carry more than one meaning. For example, under Rule 3 of the Federal Rules of Civil Procedure, civil actions are 'commenced' by filing a complaint with the court. As a matter of English there is no reason why 'commenced' so used should not be thought to be synonymous with 'brought' as used in § 1404(a), so that an action 'might have been brought' in any district where a complaint might have been filed, or perhaps only in districts with jurisdiction over the subject matter of the litigation. As a matter of English alone, the phrase might just as well be thought to refer either to those places where the defendant 'might have been' served with process, or to those places where the action 'might have been brought' in light of the applicable venue provision, for those provisions speak generally of there actions 'may be brought.' Or the phrase may be thought as a matter of English alone to refer to those places where the action 'might have been brought' in light of the applicable statute of limitations, or other provisions preventing a court from reaching the merits of the litigation. On the face of its words alone, the phrase may refer to any one of those considerations, i.e., venue, amenability to service, or period of limitations, to all of them or to none of them, or to others as well.1 And to the extent that these are matters which may or may not be raised at the defendant's election, the English of the phrase surely does not tell whether the defendant's actual or potential waiver or failure to raise such objections is to be taken into account in determining whether a district is one in which the action 'might have been brought,' or whether the phrase refers only to those districts where the plaintiff 'might have brought' the action even over a timely objection on the part of the defendant, that is, where he had 'a right' to bring it.
35
The particular problem in the present case has been a relatively commonplace one in the application of § 1404(a), and it demonstrates the failure of the words of the section, considered merely as words, to define with precision those places where an action 'might have been brought.' The problem here is this. Action was brought by plaintiff in district A, a proper venue under the applicable venue statute. Defendant objected and moved for transfer to district B, submitting that in the interests of 'convenience' and 'justice' to all concerned the action should go forward there instead of in district A. District B, however, is one in which, had the complaint been filed there, the plaintiff would have been unable without the defendant's consent to serve him with process. In addition, the defendant in district B, had the complaint been filed there, would have had an objection to the venue, under the applicable venue statute. In moving for transfer to B, the defendant stipulates to waiving all objections to venue there and to submitting his person to the jurisdiction of District Court B, should transfer be ordered. The District Court in A agrees that B, not A, is the appropriate place for trial and is disposed to transfer the action there, for in light of the defendant's stipulation there is no way in which the plaintiff can be prejudiced by the lack of venue in B or the impossibility, as an original matter, of serving defendant there. Is B a place where the action 'might have been brought' so that the transfer can be effected? The Court finds it 'plain,' from the words of the phrase themselves, that B is not such a place, and that, for it, is the end of the matter.
36
We would all agree that B would be a place where the action 'might have been brought' if it were a place of statutory venue, if the defendant had always been amenable to process there, and if B had no other special characteristics whereby the defendant could prevent consideration there of the merits of the cause of action. Almost every statute has a core of indisputable application, and this statute plainly applies to permit transfer to a place where there could never have been any objection to the maintenance of the action. But is it clear, as the Court would have it, that, as a mere matter of English, because potential objections peculiar to the forum would have been present in B, it is not to be deemed a place where the action 'might have been brought,' although defendant not only might but is prepared to waive, as he effectively may, such objections? I submit that it is not clear from the words themselves, and the experience in the lower courts gives compelling proof of it. At least 28 District Courts, located in all parts of the Nation, have had to give concrete meaning to the set of words in controversy. These are the judges who are, to use a familiar but appropriate phrase, on the firing line, who are in much more intimate, continuous touch with the needs for the effective functioning of the federal judicial system at the trial level than is this Court. They have not found the last phrase of § 1404(a) unambiguous. There has been anything but the substantial uniformity of views to be expected in the application of a clear and unambiguous direction. There have been severe differences with regard to whether § 1404(a) is ever available as a remedy to a plaintiff forced into an inconvenient forum, and if so under what conditions.2 With regard to defendants' motions to transfer, it has been held that 'brought' in § 1404(a) is synonymous with 'commenced' in Rule 3 so that transfer may be made to virtually any district dictated by 'convenience' and 'justice.'3 It has been held that the phrase is to be applied as if it read 'where it might have been brought now,' thus giving full effect to a waiver of objections by defendant in moving for transfer.4 It has been said, on the other hand, that '(s)ection 1404(a) * * * contemplates statutory venue and not consent venue.'5
37
With regard to the particular problem in this case, which has arisen most often, a majority of the District Courts which have considered the problem have ruled against the Court's 'plain' meaning of the statute. At least seven District Courts have ruled that, because of the defendant's consent to have the action go forward there, a district is one where the action 'might have been brought,' even though it is a place where the defendant might either have objected to the venue, or avoided process, or both had the action been brought there originally.6 At least three District Courts have held or implied to the contrary, that the defendant's consent is not relevant, and that such a district cannot be one where the action 'might have been brought.'7 Two others have simply denied motions by the defendant on the ground that the transferee court was not one where the action 'might have been brought,' without discussing whether in moving for transfer the defendant had consented to go forward in the transferee court, or what the effect of that consent would be.8 Two District Courts have granted the defendant's motion to transfer, making the matter turn on the presence of a number of defendants and the fact that some of them were suable as of right in the transferee court.9 Two others have found the amenability of the defendant to service of process in the place to which transfer is proposed to be wholly irrelevant to whether the action 'might have been brought' there, and have ordered transfer to such a place on the plaintiff's motion even though the defendant did not consent.10 It simply cannot be said in the face of this experience that the words of the statute are so compellingly precise, so unambiguous, that § 1404(a) as a matter of 'plain words' does not apply in the present case.
38
The experience in the Courts of Appeals is also revealing. Of the six cases where defendants have moved for transfer, in only two has it been held that the defendant's consent to the transfer is not relevant in determining whether the place to which transfer is proposed is a place where the action 'might have been brought,' and these are the two decisions of the Seventh Circuit now before us. Blaski v. Hoffman, 7 Cir., 1958, 260 F.2d 317; Behimer v. Sullivan, 7 Cir., 1958, 261 F.2d 467. The Third Circuit has ruled in favor of transfer on the defendant's motion to a place where the defendant might have objected to the venue, Paramount Pictures, Inc. v. Rodney, 3 Cir., 1951, 186 F.2d 111. The First and Second Circuits have ruled in favor of transfer on defendant's motion to a place where the defendant could not have been served with process, Torres v. Walsh, 2 Cir., 1955, 221 F.2d 319; In re Josephson, 1 Cir., 1954, 218 F.2d 174. And the Second and Fifth Circuits have ruled in favor of transfer on defendant's motion to a place where there was neither statutory venue nor a chance to serve the defendant. Anthony v. Kaufman, 2 Cir., 1951, 193 F.2d 85; Ex parte Blaski, 5 Cir., 1957, 245 F.2d 737. All these courts have considered the meaning of the phrase in detail and have held that the place to which transfer was proposed was a place where the action 'might have been brought.' Thus the Court's view of the meaning of § 1404(a) is contrary to the rulings of every Court of Appeals but one which has considered the problem, and is contrary to the view of more than half the District Courts as well. Yet the Court maintains that the statute unambiguously means what it says it does.
39
Surely, the Court creates its own verbal prison in holding that 'the plain words' of § 1404(a) dictate that transfer may not be made in this case although transfer concededly was in the interest of 'convenience' and 'justice.' Moreover, the Court, while finding the statutory words 'plain,' decides the case by applying, not the statutory language, but a formula of words found nowhere in the statute, namely, whether plaintiffs had 'a right to bring these actions in the respective transferee districts.' This is the Court's language, not that of Congress. Although it is of course a grammatically plausible interpretation of the phrase 'where it might have been brought,' it has been, I submit, established that it is not by any means the only plausible interpretation. In fact, the Court's rephrasing, as distinguished from Congress' phrasing, gives the narrowest possible scope to the operation of § 1404(a). There can be expected to be very few, if any, alternative forums in a given case where the plaintiff has a 'right' to sue, considering that that means places of unobjectionable venue where the defendant is amenable to service of process and where there are no other impediments such as a statute of limitations which the defendant can rely on to defeat the action.
40
This case, then, cannot be decided, and is not decided, by the short way of a mechanical application of Congress' words to the situation. Indeed, it would be extraordinary if a case which could be so decided were deemed worthy of this Court's attention twelve years after the applicable statute was enacted. To conclude, as the Court does, that the transferee court is inexorably designated by the inherent force of the words 'where it might have been brought' is to state a conclusion that conceals the process by which the meaning is, as a matter of choice, extracted from the words.
41
The problem in this case is one of resolving an ambiguity by all the considerations relevant to resolving an ambiguity concerning the conduct of litigation, and more particularly the considerations that are relevant to resolving an ambiguous direction for the fair conduct of litigation in the federal judicial system. At the crux of the business, as I see it, is the realization that we are concerned here not with a question of a limitation upon the power of a federal court but with the place in which that court may exercise its power. We are dealing, that is, not with the jurisdiction of the federal courts, which is beyond the power of litigants to confer, but with the locality of a lawsuit, the rules regulating which are designed mainly for the convenience of the litigants. (T)he locality of a law suit—the place where judicial authority may be exercised—though defined by legislation relates to the convenience of litigants and as such is subject to their disposition. * * * (A venue statute) 'merely accords to the defendant a personal privilege respecting the venue, or place of suit, which he may assert, or may waive, at his election.' Commercial Ins. Co. v. Stone Co., 278 U.S. 177, 179, 49 S.Ct. 98, 99, 73 L.Ed. 252.' Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 154, 84 L.Ed. 167. And in that case the Court was merely reiterating considerations already forcefully set out in General Investment Co. v. Lake Shore R. Co., 260 U.S. 261, 43 S.Ct. 106, 67 L.Ed. 244, and Lee v. Chesapeake & Ohio R. Co., 260 U.S. 653, 43 S.Ct. 230, 67 L.Ed. 443. This basic difference 'between the court's power and the litigant's convenience is historic in the federal courts.' 308 U.S. at page 168, 60 S.Ct. at page 154.
42
Applying these considerations to a problem under a different statute but relevant to the present one, namely, whether removal from a state court to a federal court might be had upon the motion of the defendant when the federal court was one where the venue would have been subject to objection, had the action originally been brought there, this Court, speaking unanimously through Mr. Justice Van Devanter, discriminatingly reminded that '(i)t therefore cannot be affirmed broadly that this suit could not have been brought * * * (in the federal court) but only that it could not have been brought and maintained in that court over a seasonable objection by the company to being sued there.' This analysis has striking application to the present problem under § 1404(a), and it is also relevant here that the Court sanctioned removal in that case to a federal court with no statutory venue, partly because 'there could be no purpose in extending to removals the personal privilege accorded to defendants by (the venue statutes) since removals are had only at the instance of defendants.' General Investment Co. v. Lake Shore R. Co., 260 U.S. 261, 273, 275, 43 S.Ct. 106, 67 L.Ed. 244. See also, to the same effect, Lee v. Chesapeake & Ohio R. Co., 260 U.S. 653, 43 S.Ct. 230, 67 L.Ed. 443, overruling Ex parte Wisner, 203 U.S. 449, 27 S.Ct. 150, 51 L.Ed. 264, and qualifying In re Moore, 209 U.S. 490, 28 S.Ct. 585, 52 L.Ed. 904. The rule that statutory venue rules governing the place of trial do not affect the power of a federal court to entertain an action, or of the plaintiff to bring it, but only afford the defendant a privilege to object to the place chosen, is now enacted as part of the Judicial Code. 28 U.S.C. § 1406(b), 28 U.S.C.A. § 1406(b). And of course it needs no discussion that a defendant is always free voluntarily to submit his person to the jurisdiction of a federal court.
43
In light of the nature of rules governing the place of trial in the federal system, as thus expounded and codified, as distinguished from limitation upon the power of the federal courts to adjudicate, what are the competing considerations here? The transferee court in this case plainly had and has jurisdiction to adjudicate this action with the defendant's acquiescence. As the defendant, whose privilege it is to object to the place of trial, has moved for transfer, and has acquiesced to going forward with the litigation in the transferee court, it would appear presumptively, unless there are strong considerations otherwise, that there is no impediment to effecting the transfer so long as 'convenience' and 'justice' dictate that it be made. It does not counsel otherwise that here the plaintiff is to be sent to a venue to which he objects, whereas ordinarily, when the defendant waives his privilege to object to the place of trial, it is to acquiesce in the plaintiff's choice of forum. This would be a powerful argument if, under § 1404(a), a transfer were to be made whenever requested by the defendant. Such is not the case, and this bears emphasis. A transfer can be made under § 1404(a) to a place where the action 'might have been brought' only when 'convenience' and 'justice' so dictate, not whenever the defendant so moves. A legitimate objection by the plaintiff to proceeding in the transferee forum will presumably be reflected in a decision that the interest of justice does not require the transfer, and so it becomes irrelevant that the proposed place of transfer is deemed one where the action 'might have been brought.' If the plaintiff's objection to proceedings in the transferee court is not consonant with the interests of justice, a good reason is wanting why the transfer should not be made.
44
On the other hand, the Court's view restricts transfer, when concededly warranted in the interest of justice, to protect no legitimate interest on the part of the plaintiff. And by making transfer turn on whether the defendant could have been served with process in the transferee district on the day the action was brought, the Court's view may create difficult problems in ascertaining that fact, especially in the case of non-corporate defendants. These are problems which have no conceivable relation to the proper administration of a provision meant to assure the most convenient and just place for trial.
45
Nor is it necessary to reach the Court's result in order to preserve an appropriate meaning for the phrase 'where it might have been brought.' I fully agree that the final words of § 1404(a) are words of limitation upon the scope of the provision. But to hold as I would that a district is one where the action 'might have been brought' when the defendant consents to going forward with the litigation there, does not remove the quality of those words as a limitation. The words compel the defendant in effect to waive any objections to going forward in the transferee district which he might have had if the action had been brought there, in order to obtain a transfer. The words therefore insure that transfer will not be a device for doing the plaintiff out of any forum in which to proceed, no matter how inconvenient. The words in any case, plainly limit the plaintiff's right to seek a transfer when the defendant does not consent to the change of venue. Moreover, the words may serve to prevent transfer to courts with a lack of federal power to adjudicate the matter of the dispute which the defendant cannot confer with his consent.11 In light of the fact that the venue statutes in Title 28 U.S.C., 28 U.S.C.A., are phrased in terms of where the action 'may be brought,' or in some cases where it 'shall' or 'must' be brought,12 the most obvious limiting significance of the phrase 'where it might have been brought' is that it refers to places where, under the venue provisions, the action, 'may,' 'shall,' or 'must' be brought assuming the existence of federal jurisdiction.13 In the meaning of federal venue provisions as expounded by this Court, and by Congress in § 1406(b), these, as has been said, are not only places where, under the applicable provision, no objection to the venue is available to the defendant. They are also places where the defendant consents to be sued.
46
The relevant legislative history of § 1404(a) is found in the statement in the Reviser's Notes, accompanying the 1948 Judicial Code, that § 1404(a) 'was drafted in accordance with the doctrine of forum non conveniens.'14 Under that doctrine, the remedy for an inconvenient forum was not to transfer the action, but to dismiss it. In Gulf Oil Corp. v. Gilbert, 330 U.S 501, 506—507, 67 S.Ct. 839, 842, 91 L.Ed. 1055, we held that '(i)n all cases in which the doctrine of forum non conveniens comes into play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes criteria for choice between them.' It is entirely 'in accordance' with this view of the doctrine of forum non conveniens to hold that transfer may be made at the instance of the defendant regardless of the plaintiff's right as an original matter to sue him in the transferee court, so long as the defendant stipulates to going forward with the litigation there. Indeed, to hold otherwise as the Court does is to limit § 1404(a) to a much narrower operation than the nonstatutory doctrine of forum non conveniens. Investigation has disclosed several forum non conveniens cases, one of them in this Court, where dismissal of the action on the defendant's motion was made upon the condition of the defendant's voluntary submission to the jurisdiction of another more convenient forum when that forum was not available to the plaintiff as of right over the defendant's objection. See Canada Malting Co. v. Paterson Steamships, Ltd., D.C., 49 F.2d 802, 804, affirmed, 285 U.S. 413, 424, 52 S.Ct. 413, 416, 76 L.Ed. 837; Giatilis v. The Darnie, D.C., 171 F.Supp. 751, 754; Bulkley, Dunton Paper Co. v. The Rio Salado, D.C., 67 F.Supp. 115, 116; Libby, McNeill & Libby v. Bristol City Line of Steamships, D.C., 41 F.Supp. 386, 389; The City of Agra, D.C., 35 F.Supp. 351; Strassburger v. Singer Mfg. Co., 263 App.Div. 518, 33 N.Y.S.2d 424; Wendel v. Hoffman, 258 App.Div. 1084, 259 App.Div. 732, 18 N.Y.S.2d 96. See also Cerro De Pasco Copper corp. v. Knut Knutsen, 2 Cir., 187 F.2d 990, and Swift & Co. Packers v. Compania Caribe, 339 U.S. 684, 697—698, 70 S.Ct. 861, 869, 94 L.Ed. 1206: 'it was improper under the circumstances here shown to remit a United States citizen to the courts of a foreign country without assuring the citizen that respondents would appear in those courts and that security would be given equal to what had been obtained by attachment in the District Court. The power of the District Court to give a libellant such assurance is shown by Canada Malting Co. v. Paterson Steamships, Ltd., 285 U.S. 413, 424, 52 S.Ct. 413, 416, 76 L.Ed. 837 (supra).' In view of the familiarity of this device of dismissing for forum non conveniens when as of right no other forum was available to plaintiff, upon the defendant's agreement to appear in the more convenient forum, it is almost necessary to suppose, in light of the Reviser's description of § 1404(a) as 'in accordance with the doctrice of forum non conveniens,' that transfer under § 1404(a) may likewise be made where the defendant consents to going forward with the case in the transferee court.
47
The only consideration of the Court not resting on the 'plain meaning' of § 1404(a) is that it would constitute 'gross discrimination' to permit transfer to be made with the defendant's consent and over the plaintiff's objection to a district to which the plaintiff could not similarly obtain transfer over the defendant's objection. To speak of such a situation as regards this statute as 'discrimination' is a sterile use of the concept. Mutuality is not an empty or abstract doctrine; it summarizes the reality of fair dealing between litigants. Transfer cannot be made under this statute unless it is found to be in the interest of 'convenience' and in the interest of 'justice.' Whether a party is in any sense being 'discriminated' against through a transfer is certainly relevant to whether the interest of justice is being served. If the interest of justice is being served, as it must be for a transfer to be made, how can it be said that there is 'discrimination' in any meaningful sense? Moreover, the transfer provision cannot be viewed in isolation in finding 'discrimination.' It, after all, operates to temper only to a slight degree the enormous 'discrimination' inherent in our system of litigation, whereby the sole choice of forum, from among those where service is possible and venue unobjectionable, is placed with the plaintiff. The plaintiff may choose from among these forums at will; under § 1404(a) the defendant must satisfy a very substantial burden of demonstrating where 'justice' and 'convenience' lie, in order to have his objection to a forum of hardship, in the particular situation, respected.
48
In summary, then, the 'plain meaning' of § 1404(a) does not conclude the present case against the transfer, for the statute, as applied in this case, is not 'plain' in meaning one way or another, but contains ambiguities which must be resolved by considerations relevant to the problem with which the statute deals. Moreover, the most obvious significance for the set of words here in question, considered as self-contained words, is that they have regard for the limitations contained in the regular statutory rules of venue. Those rules, it is beyond dispute, take into account the consent of the defendant to proceed in the forum, even if it is not a forum designated by statute. And the doctrine of forum non conveniens 'in accordance with' which § 1404 (a) was drafted, also took into account the defendant's consent to proceed in another forum to which he was not obligated to submit. Nor can a decision against transfer be rested upon notions of 'discrimination' or of unfairness to the plaintiff in wrenching him out of the forum of his choice to go forward in a place to which he objects. In the proper administration of § 1404(a), such consequences cannot survive the necessity to find transfer to be in the interests of 'convenience' and 'justice,' before it can be made. On the other hand, to restrict transfer as the Court does to those very few places where the defendant was originally amenable to process and could have had no objection to the venue is drastically to restrict the number of situations in which § 1404(a) may serve the interests of justice by relieving the parties from a vexatious forum. And it is to restrict the operation of the section capriciously, for such a drastic limitation is not counseled by any legitimate interest of the plaintiff, or by any interest of the federal courts in their jurisdiction. The defendant's interest of course is not involved because he is the movant for transfer.
49
The essence of this case is to give fair scope to the role of § 1404(a) in our system of venue regulations, that is, a system whereby litigation may be brought in only a limited number of federal districts, which are chosen generally upon the basis of presumed convenience. Two extremes are possible in the administration of such a system, duly mindful of the fact that in our jurisprudence venue does not touch the power of the court. (1) All venue may be determined solely by rigid rules, which the defendant may invoke and which work for convenience in the generality of cases. In such an extreme situation there would be no means of responding to the special circumstances of particular cases when the rigid venue rules are inappropriate. (2) At the other extreme there may be no rigid venue provisions, but all venue may be determined, upon the defendant's objection to the plaintiff's choice of forum, by a finding of fact in each case of what is the most convenient forum from the point of view of the parties and the court. The element of undesirability in the second extreme is that it involves too much preliminary litigation; it is desirable in that it makes venue responsive to actual convenience. The first extreme is undesirable for according too little, in fact nothing, to actual convenience when the case is a special one; it is desirable in that it does away with preliminary litigation.
50
If anything is plain, from its history and from its words, it is that § 1404(a) means to afford a balance, a compromise, between these two extremes. It is in this spirit that its provisions must be read. In the ordinary course the regular venue rules are to prevail, with no preliminary litigation to determine the actual convenience. But the statute means to allow for cases where the ordinary rules are found to work a great hardship; there, actual convenience is to prevail. We should therefore not, as the Court has done, impose limitations upon the operation of § 1404(a) which have no relation to ordinary considerations governing the place of trial in the federal system and which arbitrarily prevent actual convenience from determining the place of trial. The limitations upon the section should only be those which recognize legitimate countervailing considerations to the free reign of actual convenience, namely limitations regarding the power of the federal courts to adjudicate, and limitation recognizing the historic privilege of the defendant, should be choose to exercise it, to object to the place of trial unless it is affirmatively designated by the venue statute.
51
It may be urged in answer to this analysis that if transfer is available as a matter of 'convenience' and 'justice' in every case in which the defendant consents to going forward in the transferee court, § 1404(a) will entail burdensome preliminary litigation and may, if improperly administered, prove vexatious to plaintiffs. Thus, even arbitrary limitations, such as the Court imposes, may be said to be warranted. In effect this argument against transfer in situations like the present implies distrust in the ability and character of district judges to hold the balance even, that is, to dispose quickly of frivolous contentions and to prevent transfer from proving unduly prejudicial to plaintiffs while according it its proper scope to deal with cases of real inconvenience. 'Such apprehension implies a lack of discipline and of disinterestedness on the part of the lower courts, hardly a worthy or wise basis for fashioning rules of procedure. It reflects an attitude against which we were warned by Mr. Justice Holmes, speaking for the whole Court, likewise in regard to a question of procedure: 'Universal distrust creates universal incompetence.' Graham v. United States, 231 U.S. 474, 480, 34 S.Ct. 148, 151, 58 L.Ed. 319.' Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 185, 72 S.Ct. 219, 222, 96 L.Ed. 200. As in that case, doubts here should be resolved in favor of the competence of the District Courts wisely to administer § 1404(a). Whatever salutary effect that section is to have must in any event depend upon due appreciation by district judges of the relevant considerations involved in ordering a transfer. Nothing is to be gained by parceling out the areas of their discretion mechanically, making distinctions which have no relevance to the manner in which venue provisions are ordinarily administered in the federal courts. I would therefore permit considerations of 'convenience' and 'justice' to be operative whenever the defendant consents to going forward in the transferee court on the same terms on which he was sued in the original forum. Against a rare abuse, there will always be available the corrective supervisory power of the Courts of Appeals, and ultimately of this Court.
1
See the Reviser's Notes following 28 U.S.C. § 1404, 28 U.S.C.A. § 1404.
2
The asserted basis of the motion was that trial of the action in the Illinois District Court would be more convenient to the parties and witnesses and in the interest of justice because several actions involving the validity of these patents were then pending in that court, and that pretrial and discovery steps taken in those actions had developed a substantial amount of evidence that would be relevant and useful in this action.
Defendants also stated in the motion that, if and when the case be so transferred, they would waive all objections to the venue of the Illinois District Court over the action and would enter their appearance in the action in that court.
3
See 28 U.S.C. § 1400(b), 28 U.S.C.A. § 1400(b), quoted in note 10, infra.
4
See Rule 4(f) of the Fed.Rules Civ.Proc., 28 U.S.C.A., quoted in note 11, infra.
5
The motion asserted, and the court found, that trial of the action in the district of Utah would be more convenient to the parties and witnesses for the reasons, among others, that all of the officers and directors, and a majority of the minority stockholders, of the Utah corporation reside in that district; that the books and records of the corporation are located in that district; that the substantive law of Utah governs the action, and that the calendar of the Utah court was less congested than the Illinois one.
As part of their motion, defendants stated that, in the event of the transfer of the action as requested, they would waive all objections to the venue of the Utah court and enter appearances in the action in that court.
6
See 28 U.S.C. § 1391(c), 28 U.S.C.A. § 1391(c), quoted in note 10, infra.
7
See Rule 4(f) of the Fed.Rules Civ.Proc., quoted in note 11, infra.
8
The decisions of the circuits are in great conflict and confusion. The Second Circuit has held one way on a plaintiff's motion and the other on a defendant's motion. Compare Foster-Milburn Co. v. Knight, 181 F.2d 949, 952—953, with Anthony v. Kaufman, 193 F.2d 85, and Torres v. Walsh, 221 F.2d 319. The Fifth Circuit, too, has held both ways. Compare Blackmar v. Guerre, 190 F.2d 427, 429, with Ex parte Blaski, 245 F.2d 737. The Ninth Circuit has held a District Court to be without power to transfer an action, on plaintiff's motion, to a district in which plaintiff did not have a legal right to bring it originally. Shapiro v. Bonanza Hotel Co., 185 F.2d 777, 780. The Third Circuit has held, two of the five judges dissenting, that a District Court has power to transfer an action, on defendant's motion, to a district in which the plaintiff did not have a legal right to bring it. Paramount Pictures, Inc. v. Rodney, 186 F.2d 111. The First Circuit has upheld transfer, on defendant's motion, to a district in which venue existed but where process could not be served on defendants (but defendants had been served in the transferor district). In re josephson, 218 F.2d 174.
9
That order did not purport to determine the jurisdiction of the transferee court and therefore did not preclude Judge Hoffman of power to determine his own jurisdiction, nor did it preclude the power of the Seventh Circuit to review his action. Fettig Canning Co. v. Steckler, 7 Cir., 188 F.2d 715; Wilson v. Kansas City Southern R. Co., D.C.W.D.Mo., 101 F.Supp. 56; United States v. Reid, D.C.E.D.Ark., 104 F.Supp. 260, 266. Several reasons why principles of res judicata do not apply may be stated in a few sentences. The orders of the Texas and Illinois District Courts on the respective motions to transfer and to remand, like the orders of the Fifth and Seventh Circuits on the respective petitions for mandamus, were (1) interlocutory, (2) not upon the merits, and (3) were entered in the same case by courts of coordinate jurisdiction. Here the sole basis of the right of the Fifth Circuit to entertain the petition for a writ of mandamus was to protect its appellate jurisdiction, 28 U.S.C. § 1651(a), 28 U.S.C.A. § 1651(a); Magnetic Engineering & Mfg. Co. v. Dings Mfg. Co., 2 Cir., 178 F.2d 866, 869—870; Foster-Milburn Co. v. Knight, 2 Cir., 181 F.2d 949, 951; In re Josephson, 1 Cir., 218 F.2d 174, 177; Torres v. Walsh, 2 Cir., 221 F.2d 319, 321 and, by denying leave to file the petition, it forsook such right, but it did not thereby determine that the Illinois District Court had jurisdiction of the action. The question of that court's jurisdiction still remained subject to attack as of right on appeal to the Seventh Circuit from any final judgment in the action. When, therefore, jurisdiction of the District Court was assailed in the Seventh Circuit, by the petition for mandamus, that court surely had power to determine whether it would hold, on such an appeal, that the Illinois District Court did or did not have jurisdiction of the action and, if not, to say so and thus avoid the delays and expense of a futile trial.
10
Venue over patent infringement actions is prescribed by 28 U.S.C. § 1400(b), 28 U.S.C.A. § 1400(b), which provides:
'(b) Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.'
See Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561, 62 S.Ct. 780, 86 L.Ed. 1026; Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 77 S.Ct. 787, 1 L.Ed.2d 786.
General venue over actions against corporations is prescribed by 28 U.S.C. § 1391(c), 28 U.S.C.A. § 1391(c), which provides:
'(c) A corporation may be sued in any judicial district in which it is incorporated or licensed to do business or is doing business, and such judicial district shall be regarded as the residence of such corporation for venue purposes.'
11
General provisions respecting service of the process of federal courts are prescribed by Rule 4(f) of the Fed.Rules Civ.Proc., which provides:
'(f) Territorial Limits of Effective Service.
'All process other than a subpoena may be served anywhere within the territorial limits of the state in which the district court is held and, when a statute of the United States so provides, beyond the territorial limits of that state. A subpoena may be served within the territorial limits provided in Rule 45.'
12
A similar view was expressed in Paramount Pictures, Inc. v. Rodney, 3 Cir., 186 F.2d 111. The court there thought that the § 1404(a) phrase 'might have been brought' means 'could now be brought.' Id., at page 114.
*
(This opinion applies only to No. 25, Hoffman v. Blaski. For opinion of Mr. Justice FRANKFURTER, joined by Mr. Justice HARLAN and Mr. Justice BRENNAN in No. 26, Sullivan v. Behimer, see 363 U.S. at page 351, 80 S.Ct. at page 1093.
*
(This opinion applies only to No. 26, Sullivan v. Behimer. For opinion of Mr. Justice FRANKFURTER, joined by Mr. Justice HARLAN and Mr. Justice BRENNAN, in No. 25, Hoffman v. Blaski, see 363 U.S. at page 345, 80 S.Ct. at page 1090.
1
See, e.g., Felchlin v. American Smelting & Refining Co., D.C.S.D.Cal.1955, 136 F.Supp. 577 (transfer denied on defendant's motion because plaintiff was an executor not qualified in transferee court); Masterpiece Productions, Inc. v. United Artists Corp., D.C.E.D.Pa.1950, 90 F.Supp. 750 (transfer denied on defendant's motion because, had the action originally been brought in the transferee court, the alignment of parties would have been different, there being one involuntary party, thereby destroying complete diversity of citizenship); Lucas v. New York Central R. Co., D.C.S.D.N.Y.1950, 88 F.Supp. 536 (transfer denied on defendant's motion because defendant's corporate status would have destroyed diversity of citizenship had the action been brought in the transferee court). In all of these cases transfer was denied because the transferee court was deemed not to be one where the action 'might have been brought.' See also Arvidson v. Reynolds Metals Co., D.C.W.D.Wash.1952, 107 F.Supp. 51 (denying the defendant's motion for transfer in part because the action was a local one, and state courts in the transferee district would not have taken jurisdiction over it).
2
See, e.g., Dufek v. Roux Distrib. Co., D.C.S.D.N.Y.1954, 125 F.Supp. 716; Barnhart v. John B. Rogers Producing Co., D.C.N.D.Ohio 1949, 86 F.Supp. 595; Troy v. Poorvu, D.C.Mass.1955, 132 F.Supp. 864; United States v. Reid, D.C.E.D.Ark.1952, 104 F.Supp. 260; Otto v. Hirl, D.C.S.D.Iowa 1952, 89 F.Supp. 72; McGee v. Southern Pacific Co., D.C.S.D.N.Y.1957, 151 F.Supp. 338; Rogers v. Halford, D.C.E.D.Wisc.1952, 107 F.Supp. 295; Herzog v. Central Steel Tube Co., D.C.S.D.Iowa 1951, 98 F.Supp. 607; Mitchell v. Gundlach, D.C.Md.1955, 136 F.Supp. 169; McCarley v. Foster-Milburn Co., D.C.W.D.N.Y.1950, 89 F.Supp. 643.
3
Otto v. Hirl, D.C.S.D.Iowa 1952, 89 F.Supp. 72, 74.
4
Cain v. Bowater's Newfoundland Pulp & Paper Mills, Ltd., D.C.E.D.Pa.1954, 127 F.Supp. 949, 950.
5
Johnson v. Harris, D.C.E.D.Tenn.1953, 112 F.Supp. 338, 341.
6
Hill v. Upper Mississippi Towing Corp., D.C.Minn.1956, 141 F.Supp. 692; McGee v. Southern Pacific Co., D.C.S.D.N.Y.1957, 151 F.Supp. 338; Welch v. Esso Shipping Co., D.C.S.D.N.Y.1953, 112 F.Supp. 611; Mire v. Esso Shipping Co., D.C.S.D.N.Y.1953, 112 F.Supp. 612; Cain v. Bowater's Newfoundland Pulp & Paper Mills, Ltd., D.C.E.D.Pa.1954, 127 F.Supp. 949; Anthony v. RKO Radio Pictures, D.C.N.Y.1951, 103 F.Supp. 56; Blaski v. Howell, D.C.N.D.Ill., March 14, 1958.
7
General Electric Co. v. Central Transit Warehouse Co., D.C.W.D.Mo.1955, 127 F.Supp. 817; Tivoli Realty v. Paramount Pictures, D.C.Del.1950, 89 F.Supp. 278; Felchlin v. American Smelting & Refining Co., D.C.S.D.Cal.1955, 136 F.Supp. 577. See also Johnson v. Harris, D.C.E.D.Tenn.1953, 112 F.Supp. 338 (dictum).
8
Silbert v. Nu-Car Carriers, D.C.S.D.N.Y.1953, 111 F.Supp. 357; Hampton Theaters, Inc. v. Paramount Film Distributing Corp., D.C.D.C.1950, 90 F.Supp. 645. See also Arvidson v. Reynolds Metals Co., D.C.W.D.Wash.1952, 107 F.Supp. 51 (denying the defendants' motion to transfer in part because the plaintiff would not have been amenable to process in the transferee court).
9
Ferguson v. Ford Motor Co., D.C.S.D.N.Y.1950, 89 F.Supp. 45; Glasfloss Corp. v. Owens-Corning Fiberglas Corp., D.C.S.D.N.Y.1950, 90 F.Supp. 967.
10
McCarley v. Foster-Milburn Co., D.C.W.D.N.Y.1950, 89 F.Supp. 643; Troy v. Poorvu, D.C.Mass.1955, 132 F.Supp. 864.
11
See cases cited in note 1, supra.
12
See 28 U.S.C. §§ 1391, 1392(a) and (b), 1393(a) and (b), 1396—1399, 1400(b), 1401 and 1403, 28 U.S.C.A. §§ 1391, 1392(a, b), 1393(a, b), 1396—1399, 1400(b), 1401, 1403.
13
See Chief Judge Magruder's opinion for the Court of Appeals for the First Circuit in In re Josephson, 218 F.2d 174, 184.
14
The whole of the statement in the Reviser's Note dealing with subsection (a) of § 1404 is as follows:
'Subsection (a) was drafted in accordance with the doctrine of forum non conveniens, permitting transfer to a more convenient forum, even though the venue is proper. As an example of the need of such a provision, see Baltimore & Ohio R. Co. v. Kepner, * * * 314 U.S. 44, * * * which was prosecuted under the Federal Employer's Liability Act in New York, although the accident occurred and the employee resided in Ohio. The new subsection requires the court to determine that the transfer is necessary for convenience of the parties and witnesses, and further, that it is in the interest of justice to do so.'
| 89
|
363 U.S. 278
80 S.Ct. 1190
4 L.Ed.2d 1218
COMMISSIONER OF INTERNAL REVENUE, Petitioner,v.Mose DUBERSTEIN et al. Alden D. STANTON et al., Petitioners, v. UNITED STATES of America.
Nos. 376, 546.
Argued March 23, 24, 1960.
Decided June 13, 1960.
No. 376: Mr. Philip Elman, Washington, D.C., for petitioner.
Mr. Sidney G. Kusworm, Sr., Dayton, Ohio, for respondents.
No. 546:
Mr. Clendon H. Lee, New York City, for petitioners.
Mr. Wayne G. Barnett, Washington, D.C., for respondent.
Mr. Justice BRENNAN delivered the opinion of the Court.
1
These two cases concern the provision of the Internal Revenue Code which excludes from the gross income of an income taxpayer 'the value of property acquired by gift.'1 They pose the frequently recurrent question whether a specific transfer to a taxpayer in fact amounted to a 'gift' to him within the meaning of the statute. The importance to decision of the facts of the cases requires that we state them in some detail.
2
No. 376, Commissioner v. Duberstein. The taxpayer, Duberstein,2 was president of the Duberstein Iron & Metal Company, a corporation with headquarters in Dayton, Ohio. For some years the taxpayer's company had done business with Mohawk Metal Corporation, whose headquarters were in New York City. The president of Mohawk was one Berman. The taxpayer and Berman had generally used the telephone to transact their companies' business with each other, which consisted of buying and selling metals. The taxpayer testified, without elaboration, that he knew Berman 'personally' and had known him for about seven years. From time to time in their telephone conversations, Berman would ask Duberstein whether the latter knew of potential customers for some of Mohawk's products in which Duberstein's company itself was not interested. Duberstein provided the names of potential customers for these items.
3
One day in 1951 Berman telephoned Duberstein and said that the information Duberstein had given him had proved so helpful that he wanted to give the latter a present. Duberstein stated that Berman owed him nothing. Berman said that he had a Cadillac as a gift for Duberstein, and that the latter should send to New York for it; Berman insisted that Duberstein accept the car, and the latter finally did so, protesting however that he had not intended to be compensated for the information. At the time Duberstein already had a Cadillac and an Oldsmobile, and felt that he did not need another car. Duberstein testified that he did not think Berman would have sent him the Cadillac if he had not furnished him with information about the customers. It appeared that Mohawk later deducted the value of the Cadillac as a business expense on its corporate income tax return.
4
Duberstein did not include the value of the Cadillac in gross income for 1951, deeming it a gift. The Commissioner asserted a deficiency for the car's value against him, and in proceedings to review the deficiency the Tax Court affirmed the Commissioner's determination. It said that 'The record is significantly barren of evidence revealing any intention on the part of the payor to make a gift. * * * The only justifiable inference is that the automobile was intended by the payor to be remuneration for services rendered to it by Duberstein.' The Court of Appeals for the Sixth Circuit reversed. 265 F.2d 28, 30.
5
No. 546, Stanton v. United States. The taxpayer, Stanton, had been for approximately 10 years in the employ of Trinity Church in New York City. He was comptroller of the Church corporation, and president of a corporation, Trinity Operating Company, the church set up as a fully owned subsidiary to manage its real estate holdings, which were more extensive than simply the church property. His salary by the end of his employment there in 1942 amounted to $22,500 a year. Effective November 30, 1942, he resigned from both positions to go into business for himself. The Operating Company's directors, who seem to have included the rector and vestrymen of the church, passed the following resolution upon his resignation: 'Be it resolved that in appreciation of the services rendered by Mr. Stanton * * * a gratuity is hereby awarded to him of Twenty Thousand Dollars, payable to him in equal instalments of Two Thousand Dollars at the end of each and every month commencing with the month of December, 1942; provided that, with the discontinuance of his services, the Corporation of Trinity Church is released from all rights and claims to pension and retirement benefits not already accrued up to November 30, 1942.'
6
The Operating Company's action was later explained by one of its directors as based on the fact that, 'Mr. Stanton was liked by all of the Vestry personally. He had a pleasing personality. He had come in when Trinity's affairs were in a difficult situation. He did a splendid piece of work, we felt. Besides that * * * he was liked by all of the members of the Vestry personally.' And by another: '(W)e were all unanimous in wishing to make Mr. Stanton a gift. Mr. Stanton had loyally and faithfully served Trinity in a very difficult time. We thought of him in the highest regard. We understood that he was going in business for himself. We felt that he was entitled to that evidence of good will.'
7
On the other hand, there was a suggestion of some ill-feeling between Stanton and the directors, arising out of the recent termination of the services of one Watkins, the Operating Company's treasurer, whose departure was evidently attended by some acrimony. At a special board meeting on October 28, 1942, Stanton had intervened on Watkins' side and asked reconsideration of the matter. The minutes reflect that 'resentment was expressed as to the 'presumptuous' suggestion that the action of the Board, taken after long deliberation, should be changed.' The Board adhered to its determination that Watkins be separated from employment, giving him an opportunity to resign rather than be discharged. At another special meeting two days later it was revealed that Watkins had not resigned; the previous resolution terminating his services was then viewed as effective; and the Board voted the payment of six months' salary to Watkins in a resolution similar to that quoted in regard to Stanton, but which did not use the term 'gratuity.' At the meeting, Stanton announced that in order to avoid any such embarrassment or question at any time as to his willingness to resign if the Board desired, he was tendering his resignation. It was tabled, though not without dissent. The next week, on November 5, at another special meeting, Stanton again tendered his resignation which this time was accepted.
8
The 'gratuity' was duly paid. So was a smaller one to Stanton's (and the Operating Company's) secretary, under a similar resolution, upon her resignation at the same time. The two corporations shared the expense of the payments. There was undisputed testimony that there were in fact no enforceable rights or claims to pension and retirement benefits which had not accrued at the time of the taxpayer's resignation, and that the last proviso of the resolution was inserted simply out of an abundance of caution. The taxpayer received in cash a refund of his contributions to the retirement plans, and there is no suggestion that he was entitled to more. He was required to perform no further services for Trinity after his resignation.
9
The Commissioner asserted a deficiency against the taxpayer after the latter had failed to include the payments in question in gross income. After payment of the deficiency and administrative rejection of a refund claim, the taxpayer sued the United States for a refund in the District Court for the Eastern District of New York. 137 F.Supp. 803. The trial judge, sitting without a jury, made the simple finding that the payments were a 'gift,'3 and judgment was entered for the taxpayer. The Court of Appeals for the Second Circuit reversed. 268 F.2d 727.
10
The Government, urging that clarification of the problem typified by these two cases was necessary, and that the approaches taken by the Courts of Appeals for the Second and the Sixth Circuits were in conflict, petitioned for certiorari in No. 376, and acquiesced in the taxpayer's petition in No. 546. On this basis, and because of the importance of the question in the administration of the income tax laws, we granted certiorari in both cases. 361 U.S. 923, 80 S.Ct. 291, 4 L.Ed.2d 239.
11
The exclusion of property acquired by gift from gross income under the federal income tax laws was made in the first income tax statute4 passed under the authority of the Sixteenth Amendment, and has been a feature of the income tax statutes ever since. The meaning of the term 'gift' as applied to particular transfers has always been a matter of contention.5 Specific and illuminating legislative history on the point does not appear to exist. Analogies and inferences drawn from other revenue provisions, such as the estate and gift taxes, are dubious. See Lockard v. Commissioner, 1 Cir., 166 F.2d 4099 The meaning of the statutory term has been shaped largely by the decisional law. With this, we turn to the contentions made by the Government in these cases.
12
First. The Government suggests that we promulgate a new 'test' in this area to serve as a standard to be applied by the lower courts and by the Tax Court in dealing with the numerous cases that arise.6 We reject this invitation. We are of opinion that the governing principles are necessarily general and have already been spelled out in the opinions of this Court, and that the problem is one which, under the present statutory framework, does not lend itself to any more definitive statement that would produce a talisman for the solution of concrete cases. The cases at bar are fair examples of the settings in which the problem usually arises. They present situations in which payments have been made in a context with business overtones—an employer making a payment to a retiring employee; a businessman giving something of value to another businessman who has been of advantage to him in his business. In this context, we review the law as established by the prior cases here.
13
The course of decision here makes it plain that the statute does not use the term 'gift' in the common-law sense, but in a more colloquial sense. This Court has indicated that a voluntarily executed transfer of his property by one to another, without any consideration or compensation therefor, though a common-law gift, is not necessarily a 'gift' within the meaning of the statute. For the Court has shown that the mere absence of a legal or moral obligation to make such a payment does not establish that it is a gift. Old Colony Trust Co. v. Commissioner, 279 U.S. 716, 730, 49 S.Ct. 499, 504, 73 L.Ed. 918. And, importantly, if the payment proceeds primarily from 'the constraining force of any moral or legal duty,' or from 'the incentive of anticipated benefit' of an economic nature, Bogardus v. Commissioner, 302 U.S. 34, 41, 58 S.Ct. 61, 65, 82 L.Ed. 32, it is not a gift. And, conversely, '(w) here the payment is in return for services rendered, it is irrelevant that the donor derives no economic benefit from it.' Robertson v. United States, 343 U.S. 711, 714, 72 S.Ct. 994, 996, 96 L.Ed. 1237.7 A gift in the statutory sense, on the other hand, proceeds from a 'detached and disinterested generosity,' Commissioner of Internal Revenue v. LoBue, 351 U.S. 243, 246, 76 S.Ct. 800, 803, 100 L.Ed. 1142; 'out of affection, respect, admiration, charity or like impulses.' Robertson v. United States, supra, 343 U.S. at page 714, 72 S.Ct. at page 996. And in this regard, the most critical consideration, as the Court was agreed in the leading case here, is the transferor's 'intention.' Bogardus v. Commissioner, 302 U.S. 34, 43, 58 S.Ct. 61, 65, 82 L.Ed. 32. 'What controls is the intention with which payment, however voluntary, has been made.' Id., 302 U.S. at page 45, 58 S.Ct. at page 66 (dissenting opinion).8
14
The Government says that this 'intention' of the transferor cannot mean what the cases on the common-law concept of gift call 'donative intent.' With that we are in agreement, for our decisions fully support this. Moreover, the Bogardus case itself makes it plain that the donor's characterization of his action is not determinative—that there must be an objective inquiry as to whether what is called a gift amounts to it in reality. 302 U.S. at page 40, 58 S.Ct. at page 64. It scarcely needs adding that the parties' expectations or hopes as to the tax treatment of their conduct in themselves have nothing to do with the matter.
15
It is suggested that the Bogardus criterion would be more apt if rephrased in terms of 'motive' rather than 'intention.' We must confess to some skepticism as to whether such a verbal mutation would be of any practical consequence. We take it that the proper criterion, established by decision here, is one that inquires what the basic reason for his conduct was in fact—the dominant reason that explains his action in making the transfer. Further than that we do not think it profitable to go.
16
Second. The Government's proposed 'test,' while apparently simple and precise in its formulation, depends frankly on a set of 'principles' or 'presumptions' derived from the decided cases, and concededly subject to various exceptions; and it involves various corollaries, which add to its detail. Were we to promulgate this test as a matter of law, and accept with it its various presuppositions and stated consequences, we would be passing for beyond the requirements of the cases before us, and would be painting on a large canvas with indeed a broad brush. The Government derives it test from such propositions as the following: That payments by an employer to an employee, even though voluntary, ought, by and large, to be taxable; that the concept of a gift is inconsistent with a payment's being a deductible business expense; that a gift involves 'personal' elements; that a business corporation cannot properly make a gift of its assets. The Government admits that there are exceptions and qualifications to these propositions. We think, to the extent they are correct, that these propositions are not principles of law but rather maxims of experience that the tribunals which have tried the facts of cases in this area have enunciated in explaining their factual determinations. Some of them simply represent truisms: it doubtless is, statistically speaking, the exceptional payment by an employer to an employee that amounts to a gift. Others are overstatements of possible evidentiary inferences relevant to a factual determination on the totality of circumstances in the case: it is doubtless relevant to the over-all inference that the transferor treats a payment as a business deduction, or that the transferor is a corporate entity. But these inferences cannot be stated in absolute terms. Neither factor is a shibboleth. The taxing statute does not make nondeductibility by the transferor a condition on the 'gift' exclusion; nor does it draw and distinction, in terms, between transfers by corporations and individuals, as to the availability of the 'gift' exclusion to the transferee. The conclusion whether a transfer amounts to a 'gift' is one that must be reached on consideration of all the factors.
17
Specifically, the trier of fact must be careful not to allow trial of the issue whether the receipt of a specific payment is a gift to turn into a trial of the tax liability, or of the propriety, as a matter of fiduciary or corporate law, attaching to the conduct of someone else. The major corollary to the Government's suggested 'test' is that, as an ordinary matter, a payment by a corporation cannot be a gift, and, more specifically, there can be no such thing as a 'gift' made by a corporation which would allow it to take a deduction for an ordinary and necessary business expense. As we have said, we find no basis for such a conclusion in the statute; and if it were applied as a determinative rule of 'law,' it would force the tribunals trying tax cases involving the donee's liability into elaborate inquiries into the local law of corporations or into the peripheral deductibility of payments as business expenses. The former issue might make the tax tribunals the most frequent investigators of an important and difficult issue of the laws of the several States, and the latter inquiry would summon one difficult and delicate problem of federal tax law as an aid to the solution of another.9 Or perhaps there would be required a trial of the vexed issue whether there was a 'constructive' distribution of corporate property, for income tax purposes, to the corporate agents who had sponsored the transfer.10 These considerations, also, reinforce us in our conclusion that while the principles urged by the Government may, in nonabsolute form as crystallizations of experience, prove persuasive to the trier of facts in a particular case, neither they, nor any more detailed statement than has been made, can be laid down as a matter of law.
18
Third. Decision of the issue presented in these cases must be based ultimately on the application of the fact-finding tribunal's experience with the mainsprings of human conduct to the totality of the facts of each case. The nontechnical nature of the statutory standard, the close relationship of it to the date of practical human experience, and the multiplicity of relevant factual elements, with their various combinations, creating the necessity of ascribing the proper force to each, confirm us in our conclusion that primary weight in this area must be given to the conclusions of the trier of fact. Baker v. Texas & Pacific R. Co., 359 U.S. 227, 79 S.Ct. 664, 3 L.Ed.2d 756; Commissioner of Internal Revenue v. Heininger, 320 U.S. 467, 475, 64 S.Ct. 249, 254, 88 L.Ed. 171; United States v. Yellow Cab Co., 338 U.S. 338, 341, 70 S.Ct. 177, 179, 94 L.Ed. 150; Bogardus v. Commissioner, supra, 302 U.S. at page 45, 58 S.Ct. at page 66 (dissenting opinion).11
19
This conclusion may not satisfy an academic desire for tidiness, symmetry and precision in this area, any more than a system based on the determinations of various fact-finders ordinarily does. But we see it as implicit in the present statutory treatment of the exclusion for gifts, and in the variety of forums in which federal income tax cases can be tried. If there is fear of undue uncertainty or overmuch litigation, Congress may make more precise its treatment of the matter by singling out certain factors and making them determinative of the matters, as it has done in one field of the 'gift' exclusion's former application, that of prizes and awards.12 Doubtless diversity of result will tend to be lessened somewhat since federal income tax decisions, even those in tribunals of first instance turning on issues of fact, tend to be reported, and since there may be a natural tendency of professional triers of fact to follow one another's determinations, even as to factual matters. But the question here remains basically one of fact, for determination on a case-by-case basis.
20
One consequence of this is that appellate review of determinations in this field must be quite restricted. Where a jury has tried the matter upon correct instructions, the only inquiry is whether it cannot be said that reasonable men could reach differing conclusions on the issue. Baker v. Texas & Pacific R. Co., supra, 359 U.S. at page 228, 79 S.Ct. at page 665. Where the trial has been by a judge without a jury, the judge's findings must stand unless 'clearly erroneous.' Fed.Rules Civ.Proc. 52(a), 28 U.S.C.A. 'A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.' United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746. The rule itself applies also to factual inferences from undisputed basic facts, id., 333 U.S. at page 394, 68 S.Ct. at page 541, as will on many occasions be presented in this area. Cf. Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 609—610, 70 S.Ct. 854, 856, 857, 94 L.Ed. 1097. And Congress has in the most explicit terms attached the identical weight to the findings of the Tax Court. I.R.C. § 7482(a), 26 U.S.C.A. § 7482(a).13
21
Fourth. A majority of the Court is in accord with the principles just outlined. And, applying them to the Duberstein case, we are in agreement, on the evidence we have set forth, that it cannot be said that the conclusion of the Tax Court was 'clearly erroneous.' It seems to us plain that as trier of the facts it was warranted in concluding that despite the characterization of the transfer of the Cadillac by the parties and the absence of any obligation, even of a moral nature, to make it, it was at bottom a recompense for Duberstein's past services, or an inducement for him to be of further service in the future. We cannot say with the Court of Appeals that such a conclusion was 'mere suspicion' on the Tax Court's part. To us it appears based in the sort of informed experience with human affairs that fact-finding tribunals should bring to this task.
22
As to Stanton, we are in disagreement. To four of us, it is critical here that the District Court as trier of fact made only the simple and unelaborated finding that the transfer in question was a 'gift.'14 To be sure, conciseness is to be strived for, and prolixity avoided, in findings; but, to the four of us, there comes a point where findings become so sparse and conclusory as to give to revelation of what the District Court's concept of the determining facts and legal standard may be. See Matton Oil Transfer Corp. v. The Dynamic, 2 Cir., 123 F.2d 999, 1000—1001. Such conclusory, general findings do not constitute compliance with Rule 52's direction to 'find the facts specially and state separately * * * conclusions of law thereon.' While the standard of law in this area is not a complex one, we four think the unelaborated finding of ultimate fact here cannot stand as a fulfillment of these requirements. It affords the reviewing court not the semblance of an indication of the legal standard with which the trier of fact has approached his task. For all that appears, the District Court may have viewed the form of the resolution or the simple absence of legal consideration as conclusive. While the judgment of the Court of Appeals cannot stand, the four of us think there must be further proceedings in the District Court looking toward new and adequate findings of fact. In this, we are joined by Mr. Justice WHITTAKER, who agrees that the findings were inadequate, although he does not concur generally in this opinion.
23
Accordingly, in No. 376, the judgment of this Court is that the judgment of the Court of Appeals is reversed, and in No. 546, that the judgment of the Court of Appeals is vacated, and the case is remanded to the District Court for further proceedings not inconsistent with this opinion. It is so ordered.
24
Judgment of Court of Appeals in No. 376 reversed, and judgment of Court of Appeals in No. 546 vacated, and case remanded to District Court for further proceedings.
25
Mr. Justice HARLAN concurs in the result in No. 376. In No. 546, he would affirm the judgment of the Court of Appeals for the reasons stated by Mr. Justice FRANKFURTER.
26
Mr. Justice WHITTAKER, agreeing with Bogardus that whether a particular transfer is or is not a 'gift' may involve 'a mixed question of law and fact,' 302 U.S., at page 39, 58 S.Ct. at page 64, concurs only in the result of this opinion.
27
Mr. Justice DOUGLAS dissents, since he is of the view that in each of these two cases there was a gift under the test which the Court fashioned nearly a quarter of a century ago in Bogardus v. Commissioner, 302 U.S. 34, 58 S.Ct. 61.
28
Mr. Justice BLACK, concurring and dissenting.
29
I agree with the Court that it was not clearly erroneous for the Tax Court to find as it did in No. 376 that the automobile transfer to Duberstein was not a gift, and so I agree with the Court's opinion and judgment reversing the judgment of the Court of Appeals in that case.
30
I dissent in No. 546, Stanton v. United States. The District Court found that the $20,000 transferred to Mr. Stanton by his former employer at the end of ten years' service was a gift and therefore exempt from taxation under I.R.C. of 1939, § 22(b)(3), 26 U.S.C.A. § 22(b)(3) (now I.R.C. of 1954, § 102(a), 26 U.S.C.A. § 102(a)). I think the finding was not clearly erroneous and that the Court of Appeals was therefore wrong in reversing the District Court's judgment. While conflicting inferences might have been drawn, there was evidence to show that Mr. Stanton's long services had been satisfactory, that he was well liked personally and had given splendid service, that the employer was under no obligation at all to pay any added compensation, but made the $20,000 payment because prompted by a genuine desire to make him a 'gift,' to award him a 'gratuity.' Cf. Commissioner of Internal Revenue v. LoBue, 351 U.S. 243, 246—247, 76 S.Ct. 800, 802—803, 100 L.Ed. 1142. The District Court's finding was that the added payment 'constituted a gift to the taxpayer, and therefore need not have been reported by him as income * * *.' The trial court might have used more words, or discussed the facts set out above in more detail, but I doubt if this would have made its crucial, adequately supported finding any clearer. For this reason I would reinstate the District Court's judgment for petitioner.
31
Mr. Justice FRANKFURTER, concurring in the judgment in No. 376 and dissenting in No. 546.
32
As the Court's opinion indicates, we brought these two cases here partly because of a claimed difference in the approaches between two Courts of Appeals but primarily on the Government's urging that, in that interest of the better administration of the income tax laws, clarification was desirable for determining when a transfer of property constitutes a 'gift' and is not to be included in income for purposes of ascertaining the 'gross income' under the Internal Revenue Code. As soon as this problem emerged after the imposition of the first income tax authorized by the Sixteenth Amendment, it became evident that its inherent difficulties and subtleties would not easily yield to the formulation of a general rule or test sufficiently definite to confine within narrow limits the area of judgment in applying it. While at its core the tax conception of a gift no doubt reflected the non-legal, non-technical notion of a benefaction unentangled with any aspect of worldly requital, the divers blends of personal and pecuniary relationships in our industrial society inevitably presented niceties for adjudication which could not be put to rest by any kind of general formulation.
33
Despite acute arguments at the bar and a most thorough re-examination of the problem on a full canvass of our prior decisions and an attempted fresh analysis of the nature of the problem, the Court has rejected the invitation of the Government to fashion anything like a litmus paper test for determining what is excludable as a 'gift' from gross income. Nor has the Court attempted a clarification of the particular aspects of the problem presented by these two cases, namely, payment by an employer to an employee upon the termination of the employment relation and non-obligatory payment for services rendered in the course of a business relationship. While I agree that experience has shown the futility of attempting to define, by language so circumscribing as to make it easily applicable, what constitutes a gift for every situation where the problem may arise, I do think that greater explicitness is possible in isolating and emphasizing factors which militate against a gift in particular situations.
34
Thus, regarding the two frequently recurring situations involved in these cases—things of value given to employees by their employers upon the termination of employment and payments entangled in a business relation and occasioned by the performance of some service—the strong implication is that the payment is of a business nature. The problem in these two cases is entirely different from the problem in a case where a payment is made from one member of a family to another, where the implications are directly otherwise. No single general formulation appropriately deals with both types of cases, although both involve the question whether the payment was a 'gift.' While we should normally suppose that a payment from father to son was a gift, unless the contrary is shown, in the two situations now before us the business implications are so forceful that I would apply a presumptive rule placing the burden upon the beneficiary to prove the payment wholly unrelated to his services to the enterprise. The Court, however, has declined so to analyze the problem and has concluded 'that the governing principles are necessarily general and have already been spelled out in the opinions of this Court, and that the problem is one which, under the present statutory framework, does not lend itself to any more definitive statement that would produce a talisman for the solution of concrete cases.'
35
The Court has made only one authoritative addition to the previous course of our decisions. Recognizing Bogardus v. Commissioner, 302 U.S. 34, 58 S.Ct. 61, as 'the leading case here' and finding essential accord between the Court's opinion and the dissent in that case, the Court has drawn from the dissent in Bogardus for infusion into what will now be a controlling qualification, recognition that it is 'for the triers of the facts to seek among competing aims or motives the ones that dominated conduct.' 302 U.S. 34, 45, 58 S.Ct. 61, 66 (dissenting opinion). All this being so in view of the Court, it seems to me desirable not to try to improve what has 'already been spelled out' in the opinions of this Court but to leave to the lower courts the application of old phrases rather than to float new ones and thereby inevitably produce a new volume of exegesis on the new phrases.
36
Especially do I believe this when fact-finding tribunals are directed by the Court to rely upon their 'experience with the mainsprings of human conduct' and on their 'informed experience with human affairs' in appraising the totality of the facts of each case. Varying conceptions regarding the 'mainsprings of human conduct' are derived from a variety of experiences or assumptions about the nature of man, and 'experience with human affairs,' is not only diverse but also often drastically conflicting. What the Court now does sets fact-finding bodies to sail on an illimitable ocean of individual beliefs and experiences. This can hardly fail to invite, if indeed not encourage, too individualized diversities in the administration of the income tax law. I am afraid that by these new phrasings the practicalities of tax administration, which should be as uniform as is possible in so vast a country as ours, will be embarrassed. By applying what has already been spelled out in the opinions of this Court, I agree with the Court in reversing the judgment in Commissioner v. Duberstein.
37
But I would affirm the decision of the Court of Appeals for the Second Circuit in Stanton v. United States. I would do so on the basis of the opinion of Judge Hand and more particularly because the very terms of the resolution by which the $20,000 was awarded to Stanton indicated that it was not a 'gratuity' in the sense of sheer benevolence but in the nature of a generous lagniappe, something extra thrown in for services received though not legally nor morally required to be given. This careful resolution, doubtless drawn by a lawyer and adopted by some hardheaded businessmen, contained a proviso that Stanton should abandon all rights to 'pension and retirement benefits.' The fact that Stanton had no such claims does not lessen the significance of the clause as something 'to make assurance doubly sure.' 268 F.2d 728. The business nature of the payment is confirmed by the words of the resolution, explaining the 'gratuity' as 'in appreciation of the services rendered by Mr. Stanton as Manager of the Estate and Comptroller of the Corporation of Trinity Church throughout nearly ten years, and as President of Trinity Operating Company, Inc.' The force of this document, in light of all the factors to which Judge Hand adverted in his opinion, was not in the least diminished by testimony at the trial. Thus the taxpayer has totally failed to sustain the burden I would place upon him to establish that the payment to him was wholly attributable to generosity unrelated to his performance of his secular business functions as an officer of the corporation of the Trinity Church of New York and the Trinity Operating Co. Since the record totally fails to establish taxpayer's claim, I see no need of specific findings by the trial judge.
1
The operative provision in the cases at bar is § 22(b)(3) of the 1939 Internal Revenue Code, 26 U.S.C.A. § 22(b)(3). The corresponding provision of the present Code is § 102(a), 26 U.S.C.A. § 102(a).
2
In both cases the husband will be referred to as the taxpayer, although his wife joined with him in joint tax returns.
3
See note 14, infra.
4
§ II.B., c. 16, 38 Stat. 167.
5
The first case of the Board of Tax Appeals officially reported in fact deals with the problem. Parrott v. Commissioner, 1 B.T.A. 1.
6
The Government's proposed test is stated: 'Gifts should be defined as transfers of property made for personal as distinguished from business reasons.'
7
The cases including 'tips' in gross income are classic examples of this. See, e.g., Roberts v. Commissioner, 9 Cir., 176 F.2d 221.
8
The parts of the Bogardus opinion which we touch on here are the ones we take to be basic to its holding, and the ones that we read as stating those governing principles which it establishes. As to them we see little distinction between the views of the Court and those taken in dissent in Bogardus. The fear expressed by the dissent at 302 U.S. at page 44, 58 S.Ct. at page 66, that the prevailing opinion 'seems' to hold 'that every payment which in any aspect is a gift is * * * relieved of any tax' strikes us now as going beyond what the opinion of the Court held in fact. In any event, the Court's opinion in Bogardus does not seem to have been so interpreted afterwards. The principal difference, as we see it, between the Court's opinion and the dissent lies in the weight to be given the findings of the trier of fact.
9
Justice Cardozo once described in memorable language the inquiry into whether an expense was an 'ordinary and necessary' one of a business: 'One struggles in vain for any verbal formula that will supply a ready touchstone. The standard set up by the statute is not a rule of law; it is rather a way of life. Life in all its fullness must supply the answer to the riddle.' Welch v. Helvering, 290 U.S. 111, 115, 54 S.Ct. 8, 9, 78 L.Ed. 212. The same comment well fits the issue in the cases at bar.
10
Cf., e.g., Nelson v. Commissioner, 6 Cir., 203 F.2d 1.
11
In Bogardus, the Court was divided 5 to 4 as to the scope of review to be extended the fact-finder's determination as to a specific receipt, in a context like that of the instant cases. The majority held that such a determination was 'a conclusion of law or at least a determination of a mixed question of law and fact.' 302 U.S. at page 39, 58 S.Ct. at page 64. This formulation it took as justifying it in assuming a fairly broad standard of review. The dissent took a contrary view. The approach of this part of the Court's ruling in Bogardus, which we think was the only part on which there was real division among the Court, see note 8, supra, has not been afforded subsequent respect here. In Heininger, a question presenting at the most elements no more factual and untechnical than those here—that of the 'ordinary and necessary' nature of a business expense—was treated as one of fact. Cf. note 9, supra. And in Dobson v. Commissioner, 320 U.S. 489, 498, n. 22, 64 S.Ct. 239, 245, 88 L.Ed. 248, Bogardus was adversely criticized, insofar as it treated the matter as reviewable as one of law. While Dobson is, of course, no longer the law insofar as it ordains a greater weight to be attached to the findings of the Tax Court than to those of any other fact-finder in a tax litigation, see note 13, infra, we think its criticism of this point in the Bogardus opinion is sound in view of the dominant importance of factual inquiry to decision of these cases.
12
I.R.C. § 74, 26 U.S.C.A. § 74, which is a provision new with the 1954 Code. Previously, there had been holdings that such receipts as the 'Pot O' Gold' radio giveaway, Washburn v. Commissioner, 5 T.C. 1333, and the Ross Essay Prize, McDermott v. Commissioner, 80 U.S.App.D.C. 176, 150 F.2d 585, were 'gifts.' Congress intended to obviate such rulings. S.Rep. No. 1622, 83d Cong., 2d Sess., p. 178. We imply no approval of those holdings under the general standard of the 'gift' exclusion. Cf. Robertson v. United States, supra.
13
'The United States Courts of Appeals shall have exclusive jurisdiction to review the decisions of the Tax Court * * * in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury * * *.' The last words first came into the statute through an amendment to § 1141(a) of the 1939 Code, 26 U.S.C.A. § 1141(a) in 1948 (§ 36 of the Judicial Code Act, 62 Stat. 991). The purpose of the 1948 legislation was to remove from the law the favored position (in comparison with District Court and Court of Claims rulings in tax matters) enjoyed by the Tax Court under this Court's ruling in Dobson v. Commissioner, 320 U.S. 489, 64 S.Ct. 239. Cf. note 11, supra. See Grace Bros., Inc., v. Commissioner, 9 Cir., 173 F.2d 170, 173.
14
The 'Findings of Fact and Conclusions of Law' were made orally, and were simply: 'The resolution of the Board of Directors of the Trinity Operating Company, Incorporated, held November 19, 1942, after the resignations had been accepted of the plaintiff from his positions as controller of the corporation of the Trinity Church, and the president of the Trinity Operating Company, Incorporated, whereby a gratuity was voted to the plaintiff, Allen (sic) D. Stanton, in the amount of $20,000 payable to him in monthly installments of $2,000 each, commencing with the month of December, 1942, constituted a gift to the taxpayer, and therefore need not have been reported by him as income for the taxable years 1942, or 1943.'
| 1112
|
363 U.S. 194
80 S.Ct. 1103
4 L.Ed.2d 1158
UNITED STATES of America, Appellant,v.MANUFACTURERS NATIONAL BANK OF DETROIT, etc.
No. 350.
Argued March 31, 1960.
Decided June 13, 1960.
Mr. Robert Kramer, Dept. of Justice, Washington, D.C., for appellant.
Mr. Henry I. Armstrong, Jr., Detroit, Mich., for appellee.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
The question here is whether Section 811(g)(2)(A) of the Internal Revenue Code of 1939 is constitutional as applied in this case. That section, the 'payment of premiums' provision in the 1939 Code, requires inclusion of insurance proceeds in the gross estate of an insured where the proceeds are receivable by beneficiaries other than the executor but are attributable to premiums paid by the insured.1 Inclusion is required regardless of whether the insured retained any policy rights. However, if the insured possessed no 'incident of ownership' after January 10, 1941, the premiums paid by him before that date are excluded in determining the portion of the proceeds for which he paid the premiums.2
2
The facts in the case are stipulated. The insured died testate on July 15, 1954. The taxpayer is his executor. On the estate tax return, the taxpayer included, as part of the gross estate, the proceeds of four insurance policies payable to the wife of the insured. These policies were originally issued to the insured, but he divested himself of the policy rights by assigning them to his wife on December 18, 1936. However, he continued to pay the premiums on the policies until he died. After his death, the proceeds were retained by the insurer for the benefit of the family, pursuant to the provisions of a settlement option selected by the wife.
3
In auditing the return, the Revenue Service determined that only the portion of the proceeds attributable to premiums paid by the insured after January 10, 1941, should be included in his estate.3 Accordingly, the tax was adjusted and a refund was made. The executor then filed a claim for refund of the rest of the tax attributable to the inclusion of the proceeds. The executor claimed that because the decedent had divested himself of all interest in the policies in 1936, the tax constituted an unapportioned direct tax on property, invalid under Article I, Sections 2 and 9, of the Constitution.4 However, the Commissioner refused to allow the claim, and the present suit for refund followed. In the District Court, the executor added a claim that the tax is also invalid under the Due Process Clause of the Fifth Amendment 'because it is retroactive and discriminatory in its operation.'
4
The District Court sustained the taxpayer's contention that, as applied in this case, Section 811(g)(2)(A) is unconstitutional. It held that because the decedent retained no incidents of ownership in the policies after 1936, 'no transfer of the property herein sought to be included in the estate of this decedent occurred at the time of his death.' (175 F.Supp. 293.) The court concluded that the tax was therefore a direct tax on the proceeds themselves and could not be levied without apportionment.5 175 F.Supp. 291. The Government appealed directly to this Court under Sections 1252 and 2101 of Title 28, and we noted jurisdiction. 361 U.S. 880, 80 S.Ct. 151, 4 L.Ed.2d 116.
5
The first objection to the tax is that it is a direct tax that is, that it is not a tax upon a transfer or other taxable event but is, instead, a tax upon property—which Congress cannot exact without apportionment.
6
This argument does not do justice to the evident intent of Congress to tax events, 'as distinguished from (their) tangible fruits.' Tyler v. United States, 281 U.S. 497, 502, 50 S.Ct. 356, 358, 74 L.Ed. 991. From its inception, the estate tax has been a tax on a class of events which Congress has chosen to label, in the provision which actually imposes the tax, 'the transfer of the net estate of every decedent.'6 (Emphasis added.) See New York Trust Co. v.Eisner, 256 U.S. 345, 41 S.Ct. 506, 65 L.Ed. 963. If there is any taxable event here which can fairly be said to be a 'transfer' under this language in Section 810 of the 1939 Code, the tax is clearly constitutional without apportionment. For such a tax has always 'been treated as a duty or excise, because of the particular occasion which gives rise to its levy.' Knowlton v. Moore, 178 U.S. 41, 81, 20 S.Ct. 747, 763, 44 L.Ed. 969; New York Trust Co. v. Eisner, supra, 256 U.S. at page 349, 41 S.Ct. at page 507.
7
Under the statute, the occasion for the tax is the maturing of the beneficiaries' right to the proceeds upon the death of the insured. Of course, if the insured possessed no policy rights, there is no transfer of any interest from him at the moment of death. But that fact is not material, for the taxable 'transfer,' the maturing of the beneficiaries' right to the proceeds, is the crucial last step in what Congress can reasonably treat as a testamentary disposition by the insured in favor of the beneficiaries. That disposition, which began with the payment of premiums by the insured, is completed by his death. His death creates a genuine enlargement of the beneficiaries' rights. It is the 'generating source' of the full value of the proceeds. See Schwarz v. United States, D.C., 170 F.Supp. 2, 6. The maturing of the right to proceeds is therefore an appropriate occasion for taxing the transaction to the estate of the insured. Cf. Tyler v. United States, 281 U.S. 497, 503, 504, 50 S.Ct. 356, 359.
8
There is no inconsistency between such a view of the taxable event and the basic definition of the subject of the tax in Section 810. 'Obviously, the word 'transfer' in the statute, or the privilege which may constitutionally be taxed, cannot be taken in such a restricted sense as to refer only to the passing of particular items of property directly from the decedent to the transferee. It must * * * at least include the transfer of property procured through expenditures by the decedent with the purpose, effected at his death, of having it pass to another.' Chase National Bank v. United States, 278 U.S. 327, 337, 49 S.Ct. 126, 128, 73 L.Ed. 405.
9
It makes no difference that the payment of premiums occurred during the lifetime of the insured and indirectly effected an inter vivos transfer of property to the owner of the policy rights. Congress can properly impose excise taxes on wholly inter vivos gifts. Bromley v. McCaughn, 280 U.S. 124, 50 S.Ct. 46, 74 L.Ed. 226. It may impose an estate tax on inter vivos transfers looking toward death. Milliken v. United States, 283 U.S. 15, 51 S.Ct. 324, 75 L.Ed. 809. Surely, then, it may impose such a tax on the final step—the maturing of the right to proceeds—in a partly inter vivos transaction completed by death. The question is not whether there has been, in the strict sense of the word, a 'transfer' of property owned by the decedent at the time of his death, but whether 'the death has brought into being or ripened for the survivor, property rights of such character as to make appropriate the imposition of a tax upon that result * * *.' Tyler v. United States, supra, 281 U.S. at page 503, 50 S.Ct. at page 359.
10
Therefore, this tax, laid on the 'ripening,' at death, of rights paid for by the decedent, is not a direct tax within the meaning of the Constitution. Cf. Chase National Bank v. United States, supra; Fernandez v. Wiener, 326 U.S. 340, 66 S.Ct. 178, 90 L.Ed. 116; Tyler v. United States, supra; United States v. Jacobs, 306 U.S. 363, 59 S.Ct. 551, 83 L.Ed. 763.7
11
Further objections to the statute as applied in this case are predicated on the Due Process Clause of the Fifth Amendment.
12
It is said that the statute operates retroactively. But the taxable event—the maturing of the policies at death—occurred long after the enactment of Section 811(g)(2)(A) in 1942. Moreover, the payment of all but a few of the premiums in question occurred after the effective date of the statute, and those few were paid during the period after January 10, 1941, when regulations gave the insured fair notice of the likely tax consequences. See T.D. 5032, 1941—1 Cum.Bull. 427.8 Therefore, the statute cannot be said to be retroactive in its impact. It is not material that the policies were purchased and the policy rights were assigned before the statute was enacted. The tax is not laid on the creation or transfer of the policy rights, and it 'does not operate retroactively merely because some of the facts or conditions upon which its application depends came into being prior to the enactment of the tax.' United States v. Jacobs, supra, 306 U.S. at page 367, 59 S.Ct. at page 554.
13
The taxpayer argues, however, that the enactment of the statute subjected the insured to a choice between unpleasant alternatives: '(H)e could stop paying the premiums—in which case the policies would be destroyed; or, he could continue paying premiums—in which case they would be included in his estate.' But when he gave away the policy rights, the possibility that he would eventually be faced with that choice was an obvious risk, in view of the administrative history of the 'payment of premiums' test. See 1 Paul, Federal Estate and Gift Taxation, § 10.13. The executor should not complain because his decedent gambled and lost. And, while it may be true that the insured could have avoided the tax only at the price of a loss on an investment already made, that fact alone does not prove that the lawmakers did 'a wholly arbitrary thing,' or that they 'found equivalence where there was none,' or that they 'laid a burden unrelated to privilege or benefit.' Burnet v. Wells, 289 U.S. 670, 679, 53 S.Ct. 761, 764, 77 L.Ed. 1439. Without such a showing, it cannot be held that the tax offends due process.
14
Reversed.
15
Mr. Justice DOUGLAS took no part in the consideration or decision of this case.
1
These provisions were enacted, through amendment of § 811(g), by § 404(a) of the Revenue Act of 1942, 56 Stat. 798, 944, 26 U.S.C.A. § 811(g). As amended, § 811 provides in pertinent part that:
'The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property, real or personal, tangible or intangible, wherever situated, except real property situated outside of the United States—
'(g) Proceeds of life insurance
'(1) Receivable by the executor. To the extent of the amount receivable by the executor as insurance under policies upon the life of the decedent.
'(2) Receivable by other beneficiaries.—To the extend of the amount receivable by all other beneficiaries as insurance under policies upon the life of the decedent (A) purchased with premiums, or other consideration, paid directly or indirectly by the decedent, in proportion that the amount so paid by the decedent bears to the total premiums paid for the insurance, or (B) with respect to which the decedent possessed at his death any of the incidents of ownership, exercisable either alone or in conjunction with any other person * * *.'
2
§ 404(c), Revenue Act of 1942, 56 Stat. 798, 945, 26 U.S.C.A. § 811 note. Section 404(c) provides that:
'The amendments made by subsection (a) (see note 1, supra) shall be applicable only to estates of decedents dying after the date of the enactment of this Act (October 21, 1942); but in determining the proportion of the premiums or other consideration paid directly or indirectly by the decedent (but not the total premiums paid) the amount so paid by the decedent on or before January 10, 1941, shall be excluded if at no time after such date the decedent possessed an incident of ownership in the policy.'
January 10, 1941, was the effective date of a Treasury Regulation, T.D. 5032, 1941—1 Cum.Bull. 427, which provided for use of the 'payment of premiums' test under § 811(g) as it existed prior to the 1942 amendments, see note 1, supra, regardless of whether the decedent retained any incidents of ownership. The regulation also provided, however, that premiums paid by the decedent before its effective date were to be excluded if the decedent did not thereafter possess any incidents of ownership.
It should be noted that the 'payment of premiums' test was abandoned in the 1954 Code, which reverted to the exclusive use of the 'incident of ownership' test. See 26 U.S.C. § 2042, 26 U.S.C.A. § 2042.
3
See note 2, supra.
4
Article I, § 2, provides in pertinent part that:
'Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers * * *.'
Article I, § 9, provides in pertinent part that:
'No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.'
5
This result is in accord with Kohl v. United States, 7 Cir., 226 F.2d 381, the reasoning of which the District Court 'adopted' as its own. As the District Court recognized, Kohl is in conflict with Estate of Loeb v. Commissioner, 2 Cir., 261 F.2d 232, affirming 29 T.C. 22; Schwarz v. United States, D.C., 170 F.Supp. 2; cf. Colonial Trust Co. v. Kraemer, D.C., 63 F.Supp. 866; Estate of Baker v. Commissioner, 30 T.C. 776.
6
Compare § 201 of the Revenue Act of 1916, 39 Stat. 756, 777, with § 810 of the Internal Revenue Code of 1939, 53 Stat. 120, 26 U.S.C.A. § 810. In the 1954 Code, the word 'taxable' was substituted for the word 'net' in this provision. 26 U.S.C. § 2001, 26 U.S.C.A. § 2001.
7
Our view of the nature of the taxable event here involved makes it unnecessary to discuss United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135, and other similar cases relied on by the District Court. Nor do we find it necessary to consider at length Lewellyn v. Frick, 268 U.S. 238, 45 S.Ct. 487, 69 L.Ed. 934, or its progeny. The Court in Frick did not reach the constitutional issue.
8
We do not agree with the holding in Kohl v. United States, 7 Cir., 226 F.2d 381, 385, that T.D. 5032 'transcended' § 811(g) as it existed in 1941 and that it was therefore 'illegal and void.' T.D. 5032, in effect, construed the controlling language in the earlier statute—'taken out by the decedent,' 53 Stat. 122—as meaning paid for by the insured. Such a construction was clearly not unreasonable.
| 1112
|
363 U.S. 229
80 S.Ct. 1134
4 L.Ed.2d 1186
UNITED STATES, Petitioner,v.GRAND RIVER DAM AUTHORITY.
No. 503.
Argued May 17, 1960.
Decided June 13, 1960.
Mr. J. Lee Rankin, Sol. Gen., Washington, D.C., for petitioner.
Mr. Jess Larson, Washington, D.C., for respondent.
Opinion of the Court by Mr. Justice DOUGLAS, announced by Mr. Justice HARLAN.
1
Grand River is a nonnavigable tributary of the navigable Arkansas River and flows through Oklahoma. Respondent was created by the Oklahoma Legislature to develop hydroelectric power on the Grand River. It is, to use the statutory language of the law creating it, 'a governmental agency and body politic and corporate.' Session Laws of Oklahoma, 1935, c. 70, Art. 4, § 1, 82 O.S.1951 § 861. A report of the Army Corps of Engineers, made in 1930, indicated that federal development at Pensacola, Markham Ferry, and Ft. Gibson—all sites on the Grand River—was not then economically justified.1 Respondent, following its creation in 1935, proposed a river development plan at these three sites. In 1939 the Army Engineers recommended a three-dam coordinated project as a federal undertaking.2 Congress by the Flood Control Act of August 18, 1941,3 incorporated that Grand River plan into a comprehensive plan for the Arkansas River basin.
2
Meanwhile respondent obtained a license under § 23(b) of the Federal Power Act4 to build and operate a project at Pensacola and completed it in 1940. The United States took over the operation of this project during World War II, after which it was returned to respondent. In 1946 the United States started the construction of a project at Ft. Gibson. It has been completed as an integral part of a comprehensive plan for the regulation of navigation, the control of floods, and the production of power on the Arkansas River and its tributaries. Congress, by modifying its plan for the Arkansas River basin,5 cleared the way for respondent to obtain from the Federal Power Commission a license for a project at Markham Ferry. Thus the United States operates the Ft. Gibson project which is the farthest downstream, while the respondent has the two upstream projects. A 70-acre tract owned by the respondent was condemned when the Ft. Gibson project was built; flowage rights over its lands were acquired; and payment was made for relocation of its transmission lines. Respondent claimed more. It demanded of the United States $10,000,000 for the 'taking' of its water power rights at Ft. Gibson and its franchise to develop electric power and energy at that site.6 The Court of Claims, while reserving the question as to the amount of compensation due, held by a divided vote that the United States was liable. Ct.Cl., 175 F.Supp. 153. The case is here on a writ of certiorari. 361 U.S. 922, 80 S.Ct. 292, 4 L.Ed.2d 239.
3
The Court of Claims recognized that if the Grand River were a navigable stream the United States would not be liable for depriving another entrepreneur of the opportunity to utilize the flow of the water to produce power. Our cases hold that such an interest is not compensable because when the United States asserts its superior authority under the Commerce Clause, Const. art. 1, § 8, cl. 3, to utilize or regulate the flow of the water of a navigable stream there is no 'taking' of 'property' in the sense of the Fifth Amendment because the United States has a superior navigation easement which precludes private ownership of the water or its flow. See United States v. Chandler-Dunbar Water Power Co., 229 U.S. 53, 69, 33 S.Ct. 667, 674, 57 L.Ed. 1063; United States v. Twin City Power Co., 350 U.S. 222, 224—225, 76 S.Ct. 259, 260 261, 100 L.Ed. 240. The Government contends that the navigational servitude of the United States extends also to nonnavigable waters, pre-empting state-created property rights in such waters, at least when asserted against the Government. In the view we take in this case, however, it is not necessary that we reach that contention. Congress by the 1941 Act, already mentioned,7 adopted as one work of improvement 'for the benefit of navigation and the control of destructive floodwaters' the reservoirs in the Grand River. That action to protect the 'navigable capacity' of the Arkansas River (United States v. Rio Grande Dam & Irrigation Co., 174 U.S. 690, 708, 19 S.Ct. 770, 777, 43 L.Ed. 1136) was within the constitutional power of Congress. We held in State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., 313 U.S. 508, 61 S.Ct. 1050, 85 L.Ed. 1487, that the United States over the objection of Oklahoma could build the Denison Dam on the Red River, also nonnavigable, but a tributary of the Mississippi. We there stated, 'There is no constitutional reason why Congress cannot, under the commerce power treat the watersheds as a key to flood control on navigable streams and their tributaries.' Id., 313 U.S. at page 525, 61 S.Ct. at page 1059. And see United States v. Appalachian Electric Power Co., 311 U.S. 377, 426, 61 S.Ct. 291, 308, 85 L.Ed. 243; Grand River Dam Authority v. Grand-Hydro, 335 U.S. 359, 373, 69 S.Ct. 114, 121, 93 L.Ed. 64. We also said in State of Oklahoma ex rel. Phillips v. Guy F. Atkinson Co., supra, that '* * * the power of flood control extends to the tributaries of navigable streams.' Id., 313 U.S. at page 525, 61 S.Ct. at pages 1059, 1060. We added, 'It is for Congress alone to decide whether a particularproject, by itself or as part of a more comprehensive scheme, will have such a beneficial effect on the arteries of interstate commerce as to warrant it. That determination is legislative in character.' Id., 313 U.S. at page 527, 61 S.Ct. at page 1060. We held that the fact that the project had a multiple purpose was irrelevant to the constitutional issue, id., 313 U.S. at pages 528—534, 61 S.Ct. at pages 1060—1063, as was the fact that power was expected to pay the way. Id., 313 U.S. at page 533, 61 S.Ct. at page 1063. '(T)he fact that ends other than flood control will also be served, or that flood control may be relatively of lesser importance does not invalidate the exercise of the authority conferred on Congress.' Id., 313 U.S. at pages 533—534, 61 S.Ct. at page 1063.
4
We cannot say on this record that the Ft. Gibson dam is any less essential or useful or desirable from the viewpoint of flood control and navigation than was Denison Dam.8 When the United States appropriates the flow either of a navigable or a nonnavigable stream pursuant to its superior power under the Commerce Clause, it is exercising established prerogatives and is beholden to no one. Plainly under our decisions it could license another to build the project and operate it. If respondent sued for damages for failure of the Federal Government to grant it a license to build the Ft. Gibson project, it could not claim that something of right had been withheld from it. So it is when the United States exercises its prerogative by building the project itself.9
5
Respondent, however, argues that it had a vested interest in the waters of the Grand River and points to the grant made by Oklahoma to it for the development of hydroelectric power on the Grand River. It seeks to trace the title of Oklahoma through the Cherokees who, in consideration of their agreement to remove to the territory which included the Grand River, received on December 31, 1838, a deed from the United States to the territory.10 By § 15 of the Act of March 3, 1893, 27 Stat. 612, 645, Congress agreed that this Cherokee land could be allotted to the members of the nation in severalty. The argument is that the United States had divested itself entirely of any rights in the water of the Grand River prior to Oklahoma's admission as a State in 1907. Assuming, arguendo, that that is true, respondent's claim is not advanced. It dealing with a grant by the United States to the Osage Indians over a nonnavigable stretch of the Arkansas River the Court in Brewer-Elliott Oil & Gas Co. v. United States, 260 U.S. 77, 87—88, 43 S.Ct. 60, 64, 67 L.Ed. 140, said:
6
'The title of the Indians grows out of a federal grant when the Federal government had complete sovereignty over the territory in question. Oklahoma when she came into the Union took sovereignty over the public lands in the condition of ownership as they were then, and if the bed of a nonnavigable stream had then become the property of the Osages, there was nothing in the admission of Oklahoma into a constitutional equality of power with other states which required or permitted a divesting of the title.'
7
Respondent argues that if any rights in the waters of the Grand River remained in the United States after the grant to the Indians in 1838, rights over them were later given to Oklahoma. The reference is to § 25 of the Act of April 26, 1906, 34 Stat. 137, 146, which granted light and power companies the right to construct dams across nonnavigable streams in Cherokee territory for power and other purposes. The right to acquire or condemn property was granted the companies in prescribed situations 'subject to approval by the Secretary of the Interior.' And § 25 contained at the end a proviso critical to respondent's case and reading as follows: 'Provided, That all rights granted hereunder shall be subject to the control of the future Territory or State within which the Indian Territory may be situated.' But this Act was no more than a regulatory measure. It did not purport to grant title to waters and appurtenant lands. The 1906 Act was an assertion of power possessed by the Federal Government to regulate Indian territory. Moreover, no water rights condemned under this Act are shown to have passed to Oklahoma and from Oklahoma to respondent. Yet the Federal Government was the initial proprietor in these western lands and any claim by a State or by others must derive from this federal title. See United States v. Gerlach Live Stock Co., 339 U.S. 725, 747, 70 S.Ct. 955, 966, 94 L.Ed. 1231; Federal Power Commission v. State of Oregon, 349 U.S. 435, 75 S.Ct. 832, 99 L.Ed. 1215. Congress has made various grants or conveyances or by statute recognized certain appropriations of lands or waters in the public domain made through machinery of the States. United States v. Gerlach Live Stock Co., supra, 339 U.S. at pages 747—748, 70 S.Ct. at pages 966 967; Federal Power Commission v. State of Oregon, supra, 349 U.S. at pages 446—448, 75 S.Ct. at pages 838—840. Yet the only Federal Act on which reliance is based by respondent for the grant of these water rights to Oklahoma is § 25 of the Act of April 26, 1906. As we have seen, that was a regulatory measure through which title might be obtained; but no water rights under it were acquired by a light or power company which is now asserted to be in respondent's chain of title. If the 1906 Act be less clear than we believe, nevertheless the construction urged by respondent would be precluded by the principle that all federal grants are construed in favor of the Government lest they be enlarged to include more than what was expressly included. See United States v. Union Pacific R. Co., 353 U.S. 112, 116, 77 S.Ct. 685, 687, 1 L.Ed.2d 693.
8
Respondent argues that since Oklahoma gave it rights to the waters of the Grand River, it has a compensable interest in them under the decision in Federal Power Commission v. Niagara Mohawk Power Corp., 347 U.S. 239, 74 S.Ct. 487, 98 L.Ed. 686. That decision merely held that the Federal Power Act treats 'usufructuary water rights like other property rights,' id., 347 U.S., at page 251, 74 S.Ct. at page 494, making it necessary for a licensee to compensate the claimant for them. Here no licensee claims under the Federal Act; the United States builds the project on its own account.
9
The Court of Claims erred in failing to distinguish between an appropriation of property and the frustration of an enterprise by reason of the exercise of a superior governmental power. Here respondent has done no more than prove that a prospective business opportunity was lost. More than that is necessary as Omnia Commercial Co. v. United States, 261 U.S. 502, 43 S.Ct. 437, 67 L.Ed. 773, holds. In that case the claimant stood to make large profits from a contract it had with a steel company. But the United States, pursuant to the War Power, requisitioned the company's entire steel production. Suit was brought in the Court of Claims for just compensation. The Court, after pointing out that many laws and rulings of Government reduce the value of property held by individuals, noted that there the Government did not appropriate what the claimant owned but only ended his opportunity to exploit a contract. 'Frustration and appropriation are essentially different things.' Id., 261 U.S. at page 513, 43 S.Ct. at page 439. And see Mitchell v. United States, 267 U.S. 341, 345, 45 S.Ct. 293, 294, 69 L.Ed. 644; United States ex rel. Tennessee Valley Authority v. Powelson, 319 U.S. 266, 281—283, 63 S.Ct. 1047, 1055—1056, 87 L.Ed. 1390. No more need be said here.
10
In conclusion, the United States did not appropriate any business, contract, land, or property of respondent. It had the superior right by reason of the Commerce Clause to build the Ft. Gibson project itself or to license another to do it. The frustration of respondent's plans and expectations which resulted when the United States chose to undertake the project on its own account did not take property from respondent in the sense of the Fifth Amendment.
11
Reversed.
1
H.R.Doc. No. 308, 74th Cong., 1st Sess., Vol. 3.
2
H.R.Doc. No. 107, 76th Cong., 1st Sess.
3
55 Stat. 638, 645.
4
49 Stat. 846, 16 U.S.C. § 817, 16 U.S.C.A. § 817. See Grand River Dam Authority v. Grand-Hydro, 335 U.S. 359, 69 S.Ct. 114, 93 L.Ed. 64.
5
68 Stat. 450.
6
Severance damages, storage and headwater benefits accruing to Ft. Gibson from the Pensacola unit, the cost and value of surveys, plans, and specifications for the Ft. Gibson unit, the loss of the use and value of lands and rights-of-way acquired for the interconnection of the Ft. Gibson unit with respondent's system and for the distribution of power from Ft. Gibson were also claimed. But these claims were denied by the Court of Claims and no review of that denial has been sought here.
7
Note 3, supra, at pages 639, 645.
8
The findings are 'There is storage capacity between elevation 554 and elevation 582 that is reserved for the control of flood waters.'
9
No riparian land is involved, and it cannot be claimed as was asserted in United States v. Kelly, 243 U.S. 316, 330, 37 S.Ct. 380, 386, 61 L.Ed. 746, that in substance there was a taking of land. And see United States v. Willow River Power Co., 324 U.S. 499, 507, 65 S.Ct. 761, 766, 89 L.Ed. 1101, which narrowly confined the holding in the Kelly case.
10
See Mills, Oklahoma Indian Land Laws (1924), 27.
| 910
|
363 U.S. 299
80 S.Ct. 1204
4 L.Ed.2d 1233
UNITED STATES, Petitioner,v.Allen KAISER.
No. 55.
Argued March 23, 1960.
Decided June 13, 1960.
Mr. Wayne G. Barnett, Washington, D.C., for petitioner.
Mr. Joseph L. Rauh, Jr., Washington, D.C., for respondent.
Mr. Justice BRENNAN announced the judgment of the Court, and delivered an opinion in which THE CHIEF JUSTICE, Mr. Justice BLACK, and Mr. Justice DOUGLAS join.
1
This case presents the questions whether a labor union's strike assistance, by way of room rent and food vouchers, furnished to a worker participating in a strike constitutes income to him under § 61(a) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 61(a);1 and whether the assistance furnished to this particular worker, who was in need, constituted a 'gift' to him, and hence was excluded from income by § 102(a) of the Code, 26 U.S.C.A. § 102(a).2
2
The respondent was employed by the Kohler Company in Wisconsin. The bargaining representative at the Kohler plant was Local 833 of the United Automobile, Aircraft, and Agricultural Implement Workers of America, CIO (UAW). In April 1954, the Local, with the approval of the International Union of the UAW, called a strike against Kohler in support of various bargaining demands in connection with a proposed renewal of their recently expired collective bargaining contract. The respondent was not a member of the Union, but he went out on strike. He had been earning $2.16 an hour at his job. This was his sole source of income, and when he struck he soon found himself in financial need. He went to the Union headquarters and requested assistance. It was the policy of the Union to grant assistance to the many Kohler strikers simply on a need basis. It made no difference whether a striker was a union member. The Union representatives questioned respondent as to his financial resources, and his dependents. He had no other job and needed assistance with respect to the essentials of life. He was single during the period in question, and the Union provided him with a food voucher for $6 a week, redeemable in kind at a local store; the voucher was later increased to $7.50 a week. The Union also paid his room rent, which amounted to $9 a week. If in need, married strikers and married strikers with children received respectively larger food vouchers.3 The over-all policy of the International Union was not to render strike assistance where strikers could obtain state unemployment compensation or local public assistance benefits. But the former condition does not prevail in Wisconsin,4 and local public assistance was available only on a showing of a destitution evidently deemed extreme by the Union.
3
The Union thought that strikers ought to perform picketing duty, but did not require, advise or encourage strikers who were receiving assistance to picket or perform any other activity in furtherance of the strike; but assistance ceased for strikers who obtained work. Respondent performed some picketing, though apparently no considerable amount. After receiving assistance for several months, he joined the Union. This had in no way been required of him or suggested to him in connection with the continued receipt of assistance.
4
The program of strike assistance was primarily financed through the strike fund of the International Union, which had been raised through crediting to it 25 cents of the $1.25 per capita monthly assessment the International required from the local unions. The Local also had a small strike fund built up through monthly credits of 5 cents of the local members' dues and contributions were received in some degree, not contended to be substantial, from other unions and outsiders. The constitution of the International Union required that it be the authorizing agency for strikes, and imposed on it the general duty to render financial assistance to the members on strike.5
5
During 1954, the Union furnished respondent assistance in the value of $565.54. In computing his federal income tax for the year, he did not include in gross income any amount in respect of the assistance. The District Director of Internal Revenue informed respondent that the $565.54 should have been added to his gross income and the tax due increased by $108 accordingly. Respondent paid this amount, and after administrative rejection of a refund claim, sued for a refund in the District Court for the Eastern District of Wisconsin. A jury trial was had, and the court submitted to the jury the single interrogatory whether the assistance rendered to respondent was a gift. The jury answered in the affirmative; but the court entered judgment for the Government, n.o.v., on the basis that as a matter of law the assistance was income to the respondent, and did not fall within the statutory exclusion for gifts. 158 F.Supp. 865.
6
By a divided vote, the Court of Appeals for the Seventh Circuit reversed. 262 F.2d 367. It held alternatively that the assistance was not within the concept of income of § 61(a) of the Code, and that in any event the jury's determination that the assistance was a gift, and hence excluded from gross income by § 102(a), had rational support in the evidence and accordingly was within its province as trier of the facts. We granted the Government's petition for certiorari, because of the importance of the issues presented. 359 U.S. 1010, 79 S.Ct. 1150, 3 L.Ed.2d 1035. Later, when the Government petitioned for certiorari in No. 376, Commissioner of Internal Revenue v. Duberstein, and acquiesced in the taxpayer's petition in No. 546, Stanton v. United States, 363 U.S. 278, 80 S.Ct. 1190, it suggested that those cases be set down for argument with the case at bar, because they illustrated in a more general context the 'gift' exclusion issues presented by this case. We agreed, and the cases were argued together. We conclude, on the basis of our opinion in the Duberstein case, 362 U.S. at page 278, 80 S.Ct. at page 1196, that the jury in this case, as finder of the facts, acted within its competence in concluding that the assistance rendered here was a gift within § 102(a). Accordingly, we affirm the judgment of the Court of Appeals. Therefore, we think it unnecessary to consider or express any opinion as to whether the assistance in fact constituted income to the respondent within the meaning of § 61(a).
7
At trial, counsel for the Government did not make objection to any part of the District Court's charge to the jury or the 'gift' exclusion. In this Court, the charge is belatedly challenged, and only as part of the Government's position that there should be formulated a new 'test' for application in this area.6 We have rejected that contention in our opinion in Duberstein. In the absence of specific objection at trial, or of demonstration of any compelling reason for dispensing with such objection, we do not here notice any defect in the charge, in the light of the controlling legal principles as we have reviewed them in Duberstein.
8
We think, also, that the proofs were adequate to support the conclusion of the jury. Our opinion in Duberstein stresses the basically factual nature of the inquiry as to this issue. The factual inferences to be drawn from the basic facts were here for the jury. They had the power to conclude, on the record, taking into account such factors as the form and amount of the assistance and the conditions of personal need, of lack of other sources of income, compensation, or public assistance, and of dependency status, which surrounded the program under which it was rendered, that while the assistance was furnished only to strikers, it was not a recompense for striking. They could have concluded that the very general language of the Union's constitution, when considered with the nature of the Union as an entity and with the factors to which we have just referred, did not indicate that basically the assistance proceeded from any constraint of moral or legal obligation, of a nature that would preclude it from being a gift. And on all these circumstances, the jury could have concluded that assistance, rendered as it was to a class of persons in the community in economic need, proceeded primarily from generosity or charity, rather than from the incentive of anticipated economic benefit. We can hardly say that, as a matter of law, the fact that these transfers were made to one having a sympathetic interest with the giver prevents them from being a gift. This is present in many cases of the most unquestionable charity.
9
We need not stop to speculate as to what conclusion we would have drawn had we sat in the jury box rather than those who did. The question is one of the allocation of power to decide the question; and once we say that such conclusions could with reason be reached on the evidence, and that the District Court's instructions are not overthrown, our reviewing authority is exhausted, and we must recognize that the jury was empowered to render the verdict which it did.
10
Affirmed.
11
Mr. Justice FRANKFURTER, whom Mr. Justice CLARK joins, concurring in the result.
12
In 1957 the Commissioner of Internal Revenue ruled that strike benefits paid by unions to strikers on the basis of need, without regard to union membership, were to be regarded as part of the recipient's gross income for income tax purposes. Rev.Rul. 57 1, 1957—1 Cum.Bull. 15. This ruling, if valid, governs this case. The taxpayer assails the ruling on three grounds. First, it is urged that in a series of rulings since 1920 the Commissioner has treated both public and private 'subsistence relief' payments as not constituting gross income; that union strike benefits are not relevantly different from such 'subsistence relief'; and that, with due regard to fair tax administration the Commissioner is constrained so to treat strike benefits in order to accord 'equal treatment.' Second, it is urged that both the Commissioner's rulings and court decisions have evolved an exclusion from the statutory category of 'gross income,' not explicitly stated in the statute, for 'alleviative' receipts which do not result in any 'enrichment,' i.e., 'reparation' payments made in compensation for some loss or injury suffered by the recipient, and that strike benefits fall within this exclusion. Third, it is urged that strike benefits in general, or at least these strike benefits in particular, are to be deemed 'gifts' within the meaning of the statutory exclusion from gross income of 'gifts.' The taxpayer's first ground, that of the denial by the Commissioner to strike benefits of consistent treatment accorded other public and private 'subsistence relief' payments, depends wholly upon past rulings of the Commissioner. In chronological order, the substance of the Commissioner's rulings deemed relevant to this ground by the taxpayer are set out in the Appendix, 363 U.S. at page 317, 80 S.Ct. at page 1214, to this opinion. Set out as well are the rulings deemed pertinent by both parties to the theory of 'alleviate' 'reparations' receipts. The two theories overlap and much of the material relevant to them is the same. For each ruling are included the relevant facts, the Commissioner's conclusion, with his reasons and supporting authority when given.
13
What these rulings reveal largely depends on the viewpoint from which their meaning is read. Only two of the rulings set out in the Appendix, Numbers 1 and 21, dealt expressly with strike benefits, and Number 21 is the 1957 ruling here challenged. Putting this 1957 ruling aside, the conclusion may be drawn from these rulings that the Commissioner has not taxed receipts for which no services were rendered and no direct consideration was given, which did not arise out of an employment relation, and which were relatively small in amount and designed to enable the recipient to provide for his needs so they can be said to have been in a sense 'subsistence' payments. None of the rulings holding payments taxable squarely contradicts such a conclusion.
14
Number 2, taxing union unemployment benefits, does not because the benefits there were paid by the union only to its members, and it can be supposed that members paid dues and lent their support in other ways, and thus there was consideration for the benefits.
15
Numbers 5, 15, 19, 24 and 25, all holding 'subsistence' payments taxable, do not contradict it. The payments in those cases were either made from funds partly or wholly sustained by the employer (Numbers 5 and 19), or the recipient had become eligible for benefits by paying into the fund from which the payments were made (Numbers 15, 24, and 25). Thus, it can be said that there was consideration for the payments, as there is, for example, consideration for insurance. In Numbers 24 and 25 it is in fact clear that the benefits paid varied with the recipient's contribution to the fund, and in Number 15 the fact is not stated one way or the other.
16
Number 1, the first strike-benefit ruling, does not squarely contradict a conclusion regarding 'subsistence relief' payments made without consideration, because that also only concerned payments to union members.
17
Only Number 20 casts doubt on the conclusion, but not enough seriously to disturb it. In that ruling, concerning payments by the German Government to persons mistreated by the Nazis, it was left open that some payments, greater than the basis in the property confiscated by the Nazis, might be taxed as income, depending on the circumstances. But it can be reasoned that such payments were windfalls, not related to 'subsistence,' and in any event it was not clearly decided that they were income.
18
So, if one starts with a feeling or assumption that 'subsistence relief,' paid without the voluntary giving of consideration, has not been taxed by the Commissioner, material may be adduced to justify one's starting point.
19
There are two reasons why such reasoning does not conclude this case in my view. First, it is far from clear that, as a matter of law, the situation before us falls within a hypothetical 'subsistence relief' category. Although the taxpayer paid no union dues before or during the taxable year, he did picket, and for part of the year he was a member of the union. The Commissioner has regularly taxed 'subsistence' payments by unions to union members as well as payments made from a fund to which the recipient contributed, or to which his employer contributed. See Numbers 1, 2, 15, 19, 24 and 25. Although it may be possible to distinguish all these rulings on the ground that here taxpayer's contribution to the union was minimal and that the strike benefits were in fact paid to members and non-members alike, they hardly furnish solid basis for a claim of uniform treatment of non-taxability by the Commissioner of payments like the strike benefits in this case.
20
My second objection is more basic. A fair evaluation of the administrative materials in the Appendix does not lead to the conclusion that the Commissioner has uniformly treated so-called 'subsistence relief' as a relevant category of payments, and one not subject to tax. The only reason urged in this case for holding the Commissioner bound to follow rulings of non-taxability which he considers inapplicable is respect for an overriding principle of 'equal' tax treatment. The Commissioner cannot tax one and not tax another without some rational basis for the difference. And so, assuming the correctness of the principle of 'equality,' it can be an independent ground of decision that the Commissioner has been inconsistent, without much concern for whether we should hold as an original matter that the position the Commissioner now seeks to sustain is wrong.
21
If I am right about the justification for asking this Court in this case to bind the Commissioner to former relevant rulings, with indifference to the correctness of his present position as an independent matter, the appropriate inquiry is not, 'Can such and such a principle be drawn from the administrative rulings?' The right question is, 'Is there any rational basis for the prior rulings which does not apply to the present case?' For only if there is no such rational basis can the Commissioner be said to be denying 'equal' treatment. Accordingly, I think that the rulings in which the Commissioner has not imposed a tax must be analyzed to ascertain whether the only principle which can explain them is a principle that 'subsistence relief' is not taxable, or whether they can be reasonably explained, individually or severally, as the result of the application of some other principle or principles which do not govern the present strike benefits. I think the Commissioner's prior rulings of non-taxability can all be explained in a way which leaves the Commissioner free to assert that the strike benefits in this case are, unless 'gifts,' part of gross income, without denying 'equal' treatment.
22
There are sixteen rulings set forth in the Appendix in which no tax was imposed: Numbers 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, 18, 20 and 22. Of these, reasons were clearly given in several, and in several others reasons were suggested though not spelled out. In no case was the reason given that the payment was 'subsistence relief' and not taxable on that score. The nature of the payment as 'subsistence' was mentioned only once, in Number 12, and it was used there as a characterization, not a reason, in a ruling which expressly accepted the nature of the payment as 'gifts.' The reasons which have been given suggest two other grounds upon which the Commissioner has excluded many of these payments from tax.
23
In Number 13, one reason for the ruling was stated to be that the payments 'are considered gratuitous and spontaneous.' In light of the circumstances of that case, involving disaster relief, it is natural to suppose that this language reflects an application of the principle that 'gifts' are not part of gross income. See also Number 21, explaining Number 13.
24
In Numbers 3, 4, 6, 7, 14, 16, 20, and with regard to part of Number 12, the reasons given or suggested were that the payment involved was to be treated as compensation for a loss or injury that had been suffered and that it was not taxable either because not greater in amount than the loss or because the thing lost or damaged had no ascertainable market value and so it could not be said that there had been any net profit to the taxpayer through the effectual exchange of the thing lost for the payment received. Although not articulated there, such reasons may well have applied also in Number 13, whose express ground was one of 'gift.'
25
The fact that a companion question or even the principal question in some of these cases (see Numbers 12 and 20) was whether the payment should reduce the amount of the deduction permitted by the Code for a casualty loss emphasizes the explicit treatment of the payments as in return for a loss suffered.
26
Even in those cases where the thing lost or injured had no basis to the taxpayer for purposes of computing gain or loss, the language of reparation or compensation for loss was used. Thus in Number 3 damages for alienation of affections or defamation were treated as 'in compromise' 'for an invasion of' a 'personal right.' See also McDonald v. Commissioner, 9 B.T.A. 1340, referred to in Number 7. In Number 4 damages for breach of promise to marry were held not taxable because '(a) promise to marry is a personal right not susceptible of any appraisal in relation to market values.' Numbers 6 and 14 involved death payments, and they were called 'compensation for (the) loss (of life).' In Number 16 the payment to a mistreated prisoner of war was called 'reimbursement.' The principle at work here is that payment which compensates for a loss of something which would not itself have been an item of gross income is not a taxable payment. The principle is clearest when applied to compensation for the loss of what is ordinarily thought of as a capital asset, e.g., insurance on a house which is destroyed. See Number 12. If a capital asset is sold for no more than its basis there is no taxable gain. The result, then, is the same if it is destroyed and there is paid in compensation no more than its basis. There are, to be sure, difficulties, not present where ordinary assets are involved, in applying this principle to compensation for the loss of something which has no basis and which is not ordinarily thought of as a capital asset, such as health or life or affection or reputation. With those difficulties we have no concern. The relevant question is whether the Commissioner has, or reasonably could have, applied a principle of reparation to deal with these cases, and the reasons given by him in Numbers 3, 4, 6, 7, 12, 14, 16, and 20 show that he has.
27
It is important to note that in Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 432, note 8, 75 S.Ct. 473, 477, 99 L.Ed. 483, we recognized just such treatment as '(t)he long history of departmental rulings holding personal injury recoveries non-taxable on the theory that they roughly correspond to a return of capital,' and distinguished those rulings from the case of punitive damages, which we held not to be compensatory and therefore taxable. See also United States v. Supplee-Biddle Hardware Co., 265 U.S. 189, 195, 44 S.Ct. 546, 548, 68 L.Ed. 970.
28
The rationale of payments in compensation for a loss is not applicable to the present case. Even if we suppose that strike benefits are made to compensate in a sense for the loss of wages, the principle of payments in compensation does not apply because the thing compensated for, the wages, had they been received, would have been included in gross income. See United States v. Safety Car Heating & Lighting Co., 297 U.S. 88, 56 S.Ct. 353, 80 L.Ed. 500. That is not so in any of the rulings set out, where the thing lost and compensated for was not an item of taxable income, but an aspect of capital or analogous to capital, which obviously would not have been included in gross income had it been retained.
29
Taking stock, then, ten rulings of non-taxability are clearly explainable according to the two legitimate principles of 'gift' and 'compensation for loss' and should not bind the Commissioner to a principle that 'subsistence relief' is not to be taxed. They are Numbers 3, 4, 6, 7, 13, 14, 15, 16, 20, and part of 12. The remaining portion of Number 12 concerns Red Cross disaster relief in the form of food and clothing. A ruling regarding inclusion in gross income was not asked for in that case, which concerned the use of the casualty loss deduction with regard to payments for the loss of capital assets. The relief was referred to as a 'gift' in the ruling, and it was simply asserted, without explication, that, as to the food and clothing, 'nor do they represent taxable income.' It is not unreasonable to attribute this conclusion to an application of the principle of 'gift,' in light of the nature of the Red Cross as a charitable organization.
30
The rulings imposing no tax which thus remain unexplained as either dealing with 'gifts' or payments in compensation for loss are Numbers 8, 9, 10, 11, 17, 18, and 22.
31
'Numbers 8, 9 and 11 dealt with federal old age and death payments under the Social Security Act.
32
'Numbers 10 and 17 dealt with unemployment payments under the Social Security Act, 42 U.S.C.A. § 301 et seq. In Number 10 the payments were made by the States from the Federal Unemployment Trust Fund set up under that Act, and in Number 17 the payments were under the Social Security plan to cover federal employees.
33
Number 18 dealt with payments by the Government of Panama under an Act 'basically similar' to the United States Social Security Act.
34
Number 22 dealt with a state payment to the blind, under a statute authorizing disbursement of money received from the United States for such a purpose.
35
Except for Number 22, all these payments came out of United States Social Security funds, or in the case of Number 18, a Panamanian analogue. The Commissioner has expressly treated these Social Security payments as related to each other. Number 9 relies on ruling Number 8, Number 17 relies on Number 10, and Number 18 on Number 11. These Social Security rulings rely on no others, and no others rely on them. On the other hand, the Commissioner has uniformly treated as taxable non-governmental payments, either by employers, unions, or 'private' groups which have been similar to the Social Security benefits not taxed in their character as 'subsistence relief,' except for their private nature. See Numbers 1, 2, 5, 15, 19, 24 and 25. In the instances urged on us, the Commissioner has never treated such a non-governmental payment as non-taxable. Having uniformly accorded different treatment to small pension, old age, and unemployment payments, depending on their source, whether they arose out of a private arrangement on the one hand, or under the Federal Social Security program on the other, the Commissioner is not disentitled to treat these strike benefits as he has the non-governmental payments in the past. Surely there is a fair basis for differentiating, for income tax purposes, payments under a comprehensive scheme of federal welfare legislation from private payments, although their ultimate social purposes may be similar. To say that the Social Security rulings control private welfare schemes is to say that the Commissioner has not been entitled to find in the policy of the Social Security legislation, in the relation to the tax statutes, a reason for excluding its benefits from taxation, while this policy does not apply to other payments.
36
The remaining ruling, Number 22, deals with a state assistance payment to the blind. Aside from the differences which arise from the fact that this payment involved federal funds, which was set forth in the ruling as one of the relevant facts, it may well have been treated by the Commissioner as a gift, and not unreasonably so, for the blind are a common object of charity. In any case, this payment cannot alone create an administrative practice binding the Commissioner in the present case.
37
In summary, the relevant instances in which the Commissioner has ruled payments not taxable can all be explained according to principles other than the general principle of 'subsistence relief' urged by the taxpayer. Putting aside the question of 'gift,' these principles do not cover the present case. Therefore the Commissioner, in seeking to tax these strike benefits, has not denied the taxpayer 'equal' treatment.
38
No one argues that a tax principle regarding 'subsistence relief' can be drawn from the statute or the cases. The taxpayer does urge, however, that a principle concerning 'alleviative,' 'reparations' payments can and should be derived. I have already discussed why such a principle in my view does not include the present strike benefits, which compensate no loss but the loss of wages, and these would have been included in gross income if received. It might be argued that the Court should itself formulate a principle covering 'subsistence relief' payments which would cover this case. There are controlling reasons for not formulating such a principle. Such new principles in the tax law are best left to Treasury initiative and congressional adoption. Moreover, the principle of excluding 'subsistence' is already reflected in the $600 personal exemption and the graduated rates.
39
Finding these strike benefits not otherwise outside the statutory concept of 'gross income,' the decisive factor for me in this case is whether the strike benefits are to be deemed a 'gift.' As a matter of ordinary reading of language I could not conclude that all strike benefits are, as a matter of law, 'gifts.' I should suppose that a strike benefit does not fit the notion of 'gift.' A union surely has strong self-interest in paying such benefits to strikers. The implications arising out of the relationship between a union which calls a strike and its strikers are such that, without some special circumstances, it would be unrealistic for a court to conclude that payments made by the union for which only strikers qualify, even though based upon need, derive solely from the promptings of benevolence.
40
In this case, however, under instructions to the jury that
41
'(t)he term 'gift' as here used denotes the receipt of financial advantage gratuitously, without obligation to make the payment, either legal or moral, and without the payment being made as remuneration for something that the Union wished done or omitted by the plaintiff. To be a gift, the payments must have been made with the intent that there be nothing of value received, or that they were not made to repay what was plaintiff's due but were bestowed only because of personal regard or pity or from general motives of philanthropy or charity. If the plaintiff received this assistance simply and solely because he and his family were in actual need and not because of any obligations, as above referred to, or any expectation of anything in return, then such payments were gifts,'
42
the jury found in a special verdict that the strike benefit payments to taxpayer were a 'gift.' These instructions certainly were not unfavorable to the Government.
43
For me, then, the question is whether there is anything in this particular record to justify a jury in finding, as it must be deemed to have found under these instructions, that the payment to taxpayer was, unlike the ordinary strike benefit, wholly a benefaction because of need, uninfluenced by the union's self-interest in promoting the success of the strike. The trial judge held that the record precluded the jury's verdict; the Court of Appeals reinstated that verdict.
44
On the evidence in this case, may the jury's verdict stand? There was evidence justifying the view that in the particular circumstances existing in Sheboygan at the time these benefits were paid, the union had assumed the functions normally exercised by private charitable organizations and governmental relief programs, in view of the excessive difficulty in getting adequate relief from them, so that these benefits were dispensed pursuant to such a charitable relief program in what, because of the strike, was a distressed area. The mere fact that the payments were made by the union to men participating in a strike called by the union does not as a matter of tax law conclude the case against a 'gift.' When the circumstances negating the business nature of the payment were strong enough, the Commissioner has ruled that even payments by an employer to his employees were gifts. See ruling Number 13 in the Appendix, and see also Rev.Rul. 59—58, 1959—1 Cum.Bull. 17, holding that the value of turkeys, hams, etc., given by an employer to employees at Christmas or some other holiday need not be reported as income. Although it is for me a very close question, I find sufficient evidence in the record to support the theory that in making these payments the union was exercising a wholly charitable function. On this view, restricted to the particular set of circumstances under which the special verdict was rendered, I would therefore hold the payment in this case to be a gift and would affirm the judgment below.
45
I am well aware that this disposition of the case does not preclude different juries reaching different conclusions on the same facts. Some individualization of result is inevitable so long as it is left to courts to determine what is or is not a 'gift.' The diversities that may thus result are all the more inevitable in view of the scope left to the fact-finders—whether courts or jury—by our decision today in Commissioner of Internal Revenue v. Duberstein and Stanton v. United States, 363 U.S. 278, 80 S.Ct. 1190.
46
Appendix.
47
As used in the citations to materials in this Appendix, 'O.D.' refers to an Office Decision, 'I.T.' to an Income Tax Ruling, 'Sol.Op.' to a Solicitor's Opinion, 'S.' to a Solicitor's Memorandum, 'G.C.M.' to a General Counsel's Memorandum, 'Rev.Rul.' to a Revenue Ruling, and 'T.D.' to a Treasury Decision.
48
1 O.D. 552, 2 Cum.Bull. 73 (1920).
49
'Benefits received from a labor union by an individual member while on strike are to be included in his gross income for the year during which received, there being no provision of law exempting such income from taxation.'
50
2. I.T. 1293, I—1 Cum.Bull. 63 (1922).
51
'Amounts paid by an organized labor union as unemployed benefits to its unemployed members are required to be included in gross income of the recipients.'
52
3. Sol.Op. 132, I—1 Cum.Bull. 92 (1922).
53
Damages for alienation of affections or defamation of character held not to be income. 'In the light of these decisions of the Supreme Court (Stratton's Independence v. Howbert, 231 U.S. 399, 34 S.Ct. 136, 58 L.Ed. 285 and Eisner v. Macomber, 252 U.S. 189, 40 S.Ct. 189, 64 L.Ed. 521) it must be held that there is no gain, and therefore no income, derived from the receipt of damages for alienation of affections or defamation of personal character. In either case the right invaded is a personal right and is in no way transferable. While a jury endeavors roughly to compute the amount of damage inflicted, in the very nature of things there can be no correct estimate of the money value of the invaded rights. The rights on the one hand and the money on the other are incomparable things which can not be placed on opposite sides of an equation. If an individual is possessed of a personal right that is not assignable and not susceptible of any appraisal in relation to market values, and thereafter receives either damages or payment in compromise for an invasion of that right, it can not be held that he thereby derives any gain or profit.' Revoking S. 1384, 2 Cum.Bull. 71, 72 (1920), which had held such damages taxable and relying on T.D. 2747 (unpublished) where 'it was held that damages for personal injuries due to accident do not constitute income.'
54
4. I.T. 1804, II—2 Cum.Bull. 61 (1923).
55
Damages for breach of promise to marry not gross income. '(A) promise to marry is a personal right not susceptible of any appraisal in relation to market values * * *.' Relying on Sol.Op. 132, supra, Number 3, and Eisner v. Macomber, 252 U.S. 189, 40 S.Ct. 189, 64 L.Ed. 521.
56
5. I.T. 1918, III—1 Cum.Bull. 121 (1924).
57
Payments to employees 'involuntarily thrown out of employment because of lack of work in a certain industry.' Payments made out of a fund established for that purpose under an agreement between 'an association of manufacturers' and an 'employees' association' and maintained by deductions from the wages of those employees who ratify the agreement and by equivalent contributions from the employers. Held, 'Any benefits paid to the employee from the fund in excess of the amounts which he has contributed will constitute taxable income to him.' Also held that employees may not deduct their contributions to the fund.
58
6. I.T. 2420, VII—2 Cum.Bull. 123 (1928).
59
Payment made to taxpayer for the death of her husband on the Lusitania. Payment made by the Government of Germany through the Mixed Claims Commission of the United States and Germany. Held, payment not income. 'An award paid for the loss of a life is compensation for the loss, and as such is not embraced in the general concept of the term 'income.' In the instant case, the award is, in fact * * * to restore (the recipient) * * * to substantially the same financial and economic status as she possessed prior to the death of her husband.'
60
7. G.C.M 4363, VII—2 Cum.Bull. 185 (1928); I.T. 2422, VII—2 Cum.Bull. 186 (1928).
61
Damages for breach of contract to marry are not income. Commissioner acquiesces in 9 B.T.A. 1340 which so holds. O.D. 501, 2 Cum.Bull. 70 (1920), and I.T. 2170, IV—1 Cum.Bull. 28 (1925), which held otherwise, revoked.
62
8. I.T. 3194, 1938—1 Cum.Bull. 114.
63
Lump sum payments under § 204(a) of the Social Security Act, 49 Stat. 620, 42 U.S.C.A. § 404(a), to 'aged individuals not qualified for benefits (under § 202 of the Act)' upon their reaching age 65. Payments maount to 3 1/2% of the total wages paid to the individual with respect to employment after Dec. 31, 1936, and prior to reaching 65. Held, payments not subject to income tax.
64
9. I.T. 3229, 1938—2 Cum.Bull. 136.
65
Lump sum death payments under the 'Federal old-age benefits' provisions in §§ 203 and 204(b) of the Social Security Act, 42 U.S.C.A. §§ 403, 404(b) to the estates of those deceased. Amount paid equals 3 1/2% of wages earned after Dec. 31, 1936, if death occurs before 65; if death occurs after 65 amount paid is the difference between what the deceased had already been paid under the Social Security Act and 3 1/2% of his total wages after Dec. 31, 1936, or the difference between what the deceased has already been paid under the Social Security Act and what he was entitled to be paid under that Act during his life, whichever difference is higher. Held, citing I.T. 3194, Number 8, supra, that 'likewise' these payments are not subject to income tax.
66
10. I.T. 3230, 1938—2 Cum.Bull. 136—137.
67
Benefit payments made 'under the Federal and State plan for unemployment compensation' by a state agency during unemployment periods. The payments are made from a fund held in the Treasury of the United States, established under the Social Security Act, called the Federal Unemployment Trust Fund. Money is deposited in the fund by the various States under the provisions of the Social Security Act. Held, payments not subject to income tax.
68
11. I.T. 3447, 1941—1 Cum.Bull. 191.
69
Monthly payments from the Federal Old Age and Survivors Insurance Trust Fund under § 202 of the Social Security Act, as amended, 53 Stat. 1360, 42 U.S.C.A. § 402. Held, payments not subject to income tax.
70
12. Special Ruling. May 11, 1952, 1952—5 CCH Fed.Tax.Rep. 6196.
71
Ruling was asked with regard to (1) whether money paid by the Red Cross as disaster relief 'will affect the deductibility of losses sustained by the taxpayer in the casualty,' and (2) whether disaster relief in the form of food, clothing, medical supplies, etc., will affect 'the loss deduction (for casualty losses provided by the Code).' Held, amounts received 'from the American Red Cross by a disaster victim in the form of cash or property for the purpose of restoring or rehabilitating property of the victim which was lost or damaged in the casualty should be applied to reduce the amount of the deductible loss sustained by the taxpayer,' but '(f)ood, medical supplies, and other forms of subsistence received by the taxpayer which are not replacements of lost property do not reduce the amount of any loss deduction to which he is otherwise entitled nor do they represent taxable income to him.'
72
13. Rev.Rul. 131, 1953—2 Cum.Bull. 112.
73
Payments 'for purposes of rehabilitation not actually compensated for by insurance or other sources' by a corporation to employees and their families who were injured or sustained damages as a result of a tornado. The size of the payments did not depend upon the length of service of the employee or the nature of his employment, and the ruling states that the payments were 'not related to services rendered.' Held, payments not taxable income. 'Such contributions, measured solely by need, are considered gratuitous and spontaneous. The objective of the corporation is to try to place the employees in the same economic position, or as near to it as possible, which they had before the casualty.'
74
14. Rev.Rul. 54—19, 1954—1 Cum.Bull. 179.
75
Monetary recovery by decedent's estate for death under state Wrongful Death statute. Held, recovery not taxable as income either to decedent's estate or to those who eventually receive the proceeds. 'Proceeds of this nature, that is, compensation for loss of life, are not embraced in the general concept of the term 'income," citing I.T. 2420, Number 6, supra.
76
15. Rev.Rul. 54—190, 1954—1 Cum.Bull. 46.
77
Pension payments to employees from a fund administered by a union. Fund financed by compulsory employee contributions, based on earnings. It is not stated whether or how the benefits varied. Benefits payable only after age 60 to employees unable to keep their jobs and unable to get other regular employment because of age or disability. Benefits suspended when employee's wages reach a certain level. Held, payments subject to income tax. Since they are 'directly attributable' to employment they are not without consideration and not gifts, '(a)ccordingly' they are income.
78
16. Rev.Rul. 55—132, 1955—1 Cum.Bull. 213.
79
Payments under the War Claims Act of 1948, 62 Stat. 1240, 50 U.S.C.A. Appendix, § 2001 et seq., made by the United States to a former prisoner of war on account of an enemy government's violation of its obligation to furnish him humane treatment while held prisoner. Held, payments not subject to income tax because 'in the nature of reimbursement for the loss of personal rights.'
80
17. Rev.Rul. 55—652, 1955—2 Cum.Bull. 21.
81
Unemployment compensation payments made to federal employees pursuant to the Social Security Act, as amended, 68 Stat. 1130. Payments in amounts to equal payments employees would receive if covered by state unemployment compensation laws in States where employed and subject to the same conditions as such state payments would be. Payments made either by State, acting as agent of the United States, or by the Secretary of Labor. Held, payments not subject to income tax, relying on I.T. 3230, Number 10, supra (relating to state unemployment payments out of federally administered fund under the Social Security Act). The principle applied there considered equally applicable here.
82
18. Rev.Rul. 56—135, 1956—1 Cum.Bull. 56.
83
'Social security benefits' paid by the Republic of Panama under Panama law to United States citizens living and working in Panama. Held, not subject to income tax. 'Such benefits are deemed to be basically similar to the sundry insurance benefit payments made to individuals under the United States social security system which are described and held to be nontaxable to the recipients in I.T. 3447 (Number 11, supra).'
84
19. Rev.Rul. 56—249, 1956—1 Cum.Bull. 488.
85
Payments to unemployed workers at M. Co. made from fund to which only M. Co. contributes. Payments supplement state unemployment benefits, and are only paid to employees eligible for state benefits. Payments are such that in combination with state benefits they give employee a certain percentage of his salary while laid off, which percentage depends on marital status, number of dependents and wage rate when laid off. Length of payment period depends on size of fund. Held, subject to income tax.
86
20. Rev.Rul. 56—518, 1956—2 Cum.Bull. 25.
87
Payments made by German Government to persons persecuted by Nazi German Government who suffered damage to 'life, body, health, liberty, rights of property ownership, or to professional or economic advancement.' Held, because the payments are 'in the nature of reimbursement of the deprivation of civil or personal rights,' where they are on account of property taken away they are not income so long as they are less than taxpayer's basis in the property. Where payments are greater than basis they may or may not be income depending on the circumstances of the case. No ruling made with regard to payments not on account of property taken away.
88
21. Rev.Rul. 57—1, 1957—1 Cum.Bull. 15.
89
Strike benefit payments made on the basis of need to strikers without regard to union membership. Held, taxable. Payments are not gratuitous because for the union's purposes. No conflict with I.T. 3230 (Number 10, supra, relating to state unemployment payments under Federal Fund), or I.T. 3447 (Number 11, supra, relating to Federal Social Security Insurance payments), because '(t)he benefits in these cases were held not to constitute taxable income because it was believed that Congress intended that such benefits be not subject to tax,' and there is no evidence of such intent here. No conflict seen with Rev.Rul. 131 (Number 13, supra), relating to corporation's payments to rehabilitate employees after tornado, because payments there were gratuitous and donative. Rev.Rul. 54—190 (Number 15, supra), relating to pension payments from a union fund financed by dues relied upon.
90
22. Rev.Rul. 57—102, 1957—1 Cum.Bull. 26.
91
Payment to a blind person under the Public Assistance Law of Pennsylvania, 62 P.S. § 2501 et seq., for the purpose of 'providing for and regulating assistance to certain classes of persons * * * requiring relief.' The law authorizes the State 'to cooperate with, and to accept and disburse money received from, the United States Government for assistance to such persons.' Held, payments not taxable as income for they constitute 'a disbursement from a general welfare fund in the interest of the general public.'
92
23. T.D. 6272, § 1.61—11(b), 1957—2 Cum.Bull. 18, 30.
93
'Pensions and retirement allowance paid either by the Government or by private persons constitute gross income unless excluded by law. * * *' * * * Amounts received as pensions or annuities under the Social Security Act or the Railroad Retirement Act are excluded from gross income.'
94
24. Rev.Rul. 57—383, 1957—2 Cum.Bull. 44.
95
Payments to unemployed workers from union unemployment fund financed through dues. Plan similar to insurance, employee choosing beforehand to class of benefits desired, and paying dues accordingly. Held, taxable.
96
25. Rev.Rul. 59—5, 1959—1 Cum.Bull. 12.
97
Benefit payments from 'private' unemployment fund financed by dues from members. Dues vary with class of benefits desired. Held, payments are income to the extent that they exceed the contributions to the fund of the recipient. 'In the absence of any provision in the Code which expressly excludes unemployment benefits derived from private sources from Federal income taxation, the rationale of the above-cited case (Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 75 S.Ct. 473, 99 L.Ed. 483) and Revenue Ruling (Rev.Rul. 57—383, Number 24, supra, relating to unemployment benefits from union fund financed through dues) is applicable.' '(E)ach member must contribute to the fund an amount in relation to the benefits which he desires ultimately to receive. Therefore, the benefits, when received, do not constitute amounts gratuitously paid or received so as to be considered gifts.' Citing Rev.Rul. 54—190 (Number 15, supra, relating to pension payments from union fund financed by dues).
98
Mr. Justice DOUGLAS, concurring.
99
While I join the opinion of my Brother BRENNAN, my view of the merits is so divergent from the rest that a word of explanation is needed. Bogardus v. Commissioner, 302 U.S. 34, 41, 58 S.Ct. 61, 65, 82 L.Ed. 32, in holding payments by stockholders to employees were, on the facts there present, gifts, said:
100
'There is entirely lacking the constraining force of any moral or legal duty as well as the incentive of anticipated benefit of any kind beyond the satisfaction which flows from the performance of a generous act.'
101
Had a motion for a directed verdict been made by respondent at the close of the evidence, I think with all deference that it should have been granted, since my idea of a 'gift' within the meaning of the Internal Revenue Code is a much broader concept than that of my Brethren. As the opinion of the Court points out, this striker (who became a union member without solicitation several months after he began receiving benefits) had no legal or moral duty to picket or to do any other act in furtherance of the strike. There is no evidence that the union made these payments to keep this striker in line. It is said that these strike payments serve the union's cause in promoting the strike. Yet the whole setting of the case indicates to me these payments were welfare, plain and simple. Unions, like employers, may have charitable impulses and incentives. Here only the needy got the relief.* Yet since (so far as the present record shows) respondent acquiesced in the submission to the jury, the United States received more favored consideration than it could claim as of right.
102
Mr. Justice WHITTAKER, with whom Mr. Justice HARLAN and Mr. Justice STEWART join, dissenting.
103
The question here is whether, in the light of the rule adopted by the Court today in Commissioner of Internal Revenue v. Duberstein, 363 U.S. 278, 80 S.Ct. 1190, there is a reasonable basis in the evidence to support the jury's conclusion that the strike benefits paid to respondent by the union were nontaxable 'gifts,' within the meaning of § 102(a) of the 1954 Internal Revenue Code.1
104
With deference, I am convinced that there was not, and that, to the contrary, the evidence compels the conclusion, as a matter of law, that those strike benefits were not 'gifts' within the meaning of § 102(a), as construed by the Court in the Duberstein case.2
105
The International Union is a private labor organization serving as the certified bargaining agent and representative of numerous collective bargaining units of employees. One of its principal purposes, as stated in its constitution, is to call, or approve the call by its local unions, of strikes to obtain better wages, hours and working conditions for those employees, and, of course, to win such strikes. To that end, its constitution provides for the creation of a Strike Fund, out of the dues of its members, for use in assisting its local unions in waging and winning such strikes, and it has actually created and maintains such a strike fund.3 Article 12, § 15 of its constitution further provides that:
106
'If and when a strike has been approved by the International Executive Board, it shall be the duty of the International Executive Board to render all financial assistance to the members on strike consistent with the resources and responsibilities of the International Union.'
107
Thus there is a clear and specific undertaking by the International Union to furnish assistance to its striking members when, as here, it has approved the strike, and the union has created and maintains a fund for that purpose.
108
Although the mentioned provisions of the International's constitution relate to financial assistance to union members, it was stipulated at the trial that:
109
'The International Union grants strike benefits to non-members of the Union, who participate in a strike, if they do not have sufficient income to purchase food or to meet an emergency situation. The Union treats such non-members on the same basis as members of the Union, but non-members as well as members must be strikers before they may receive assistance from the Union.' (Emphasis added.) It was further stipulated that respondent, who was not a member of the union during the early months of the strike, 'received from the International Union' strike benefits totaling $565.54 during the taxable year 1954.4
110
It is now established that objective intention of the transferor determines whether transfers constitute 'gifts,' within the meaning of § 102(a). Bogardus v. Commissioner, 302 U.S. 34, 58 S.Ct. 61, 82 L.Ed. 32; Commissioner of Internal Revenue v. Duberstein, 363 U.S. at page 278, 80 S.Ct. at page 1190. In Duberstein, the Court, in attempting to shed additional light on the factors determinative of whether requisite donative intent impelled the transfer, said:
111
'This Court has indicated that a voluntarily executed transfer of his property by one to another, without any consideration or compensation therefor, though a common-law gift, is not necessarily a 'gift' within the meaning of the statute. * * * And, importantly, if the payment proceeds primarily from 'the constraining force of any moral or legal duty,' or from 'the incentive of anticipated benefit' of an economic nature * * * it is not a gift. * * * A gift in the statutory sense, on the other hand, proceeds from a 'detached and disinterested generosity,' * * *; 'out of affection, respect, admiration, charity or like impulses.' * * *' Commissioner or Internal Revenue v. Duberstein, 363 U.S. at page 285, 80 S.Ct. at page 1196.
112
I find nothing in this record to indicate that the strike benefit payments by the union to respondent and other striking workers, while they were waging the strike, were made out of any 'detached and disinterested generosity,' or 'out of affection, respect, admiration, charity or like impulses.' To the contrary, it seems plain enough that those payments were made by the union to enable and encourage respondent and other striking workers to continue the strike which had been called or approved by the union, and were not motivated by benevolence. Those payments were therefore made in furtherance of one of the union's principal economic objectives—the winning of the strike—and hence proceeded primarily from "the incentive of anticipated benefit' of an economic nature' to the union, and from 'the constraining force' of the union's promise to assist striking workers in winning the strike. Duberstein, 363 U.S. at page 285, 80 S.Ct. at page 1196. Because of the economic advantages to be obtained by the union from winning the strike, the union had a manifest self-interest in financially sustaining the strikers while they carried on its strike. This shows, as a matter of law, that the payments were not made with the donative intent required to constitute 'gifts' within the meaning of § 102(a) and of the Bogardus and Duberstein cases. Wholly apart from the immediate objective which the union sought to achieve by paying these strike benefits, they could qualify as 'gifts,' as the Court recognizes, only if they were made, as said in Duberstein, with a "detached and disinterested generosity," and this record shows that it was principally private business purposes, not detached and disinterested generosity, that prompted the union to make the payments in question.
113
To be sure, the International's Secretary-Treasurer expressed his conclusion at the trial that, in the course of this strike, the International carried out the 'same function' as would a local welfare agency in furnishing assistance to needy persons. But it is important to distinguish the very different factors that impelled the union from those that motivate a local welfare agency in furnishing such assistance. The union made payments only to strikers to sustain then while they carried on the strike, whereas, a welfare agency assists the needy solely from humanitarian impulses, without purpose to obtain any benefit for itself, and whether the needy recipients are strikers or not. Public welfare payments represent the charitable response of the community to relieve hardships arising from conditions beyond its control; but the strike benefits shown by this record were designed, principally at least, for the purpose of sustaining the strikers while they carried on the union's strike to victorious end. The motivation of a public welfare agency in supplying basic needs to the unemployed is purely charitable in nature, but payments by a private union to striking workers to enable them to continue to successful conclusion a strike called or approved by the union, cannot reasonably be said to have proceeded primarily from any such charitable impulse.5
114
This conclusion is fortified by the consistent and long-standing rulings of the Treasury Department. It has twice ruled that strike benefits do not constitute nontaxable 'gifts' to the recipient. In 1920 it held that:
115
'Benefits received from a labor union by an individual member while on strike are to be included in his gross income for the year during which received, there being no provision of law exempting such income from taxation.' O.D. 552, 2 Cum.Bull. 73 (1920). (Emphasis added.)
And again in 1957, it ruled:
116
'Strike benefit payments are included within the broad definition of gross income and do not fall within any of the exclusions provided for in the Code, including the exclusions for gifts under section 102. They are paid only upon the event of a strike which is a means employed by the union and its members for securing economic benefits, and, for this reason, they do not constitute amounts gratuitously paid or received.
117
'Accordingly, the strike benefit payments received under these circumstances do not constitute gifts but constitute income and are includible in the gross income of the recipients even though distributed on the basis of their need and regardless of whether the recipients are members or nonmembers of the union.' Rev.Rul. 57—1, 1957—1 Cum.Bull. 15, 16—17. (Emphasis added.)
118
Nor do I find in this record any 'special circumstances' which might support the jury's conclusion that the payments made to respondent were 'gifts.' The record shows that it was the union's policy at the time of this strike to require strikers to avail themselves of any assistance offered by local community agencies before seeking assistance from the union. However, the union decided to waive this requirement with regard to the strike involved here, for the reasons given by the International's Secretary-Treasurer:
119
'In this particular case, the community assistance available in Sheboygan County was so small, and so much red tape involved in obtaining it, we decided that Kohler workers would not have to seek assistance from the community agencies.'
120
'The policy in 1954 was to use community agencies but, as I testified previously, that in the case of the Kohler workers we waived that particular policy because, after checking with the Sheboygan Welfare Agency, we found that the Kohler workers were expected to give up their license plates and not use their automobiles, and restrictions were so great that we didn't think we ought to impose those restrictions on the Kohler workers.'
121
This determination was further evidence that the union's purpose in making the payments to respondent and other strikers was a business one, not proceeding from any "detached and disinterested generosity" nor "out of affection, respect, admiration, charity or like impulses," Duberstein, 363 U.S. at page 285, 80 S.Ct. at page 1197, but proceeding, rather, from the union's business purpose to obviate the supposed oppression of the local welfare restrictions upon the strikers, and thereby more effectively to preserve and continue the strike. It corroborates, I think unmistakably, the union's business purpose in paying the strike benefits, and shows that no genuine charitable or donative intent was involved.
122
For these reasons I would reverse that judgment of the Court of Appeals and hold that the payments in question were not 'gifts' but were 'income' and taxable as a matter of law.
1
'Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:
'(1) Compensation for services, including fees, commissions, and similar items;
'(2) Gross income derived from business;
'(3) Gains derived from dealings in property;
'(4) Interest;
'(5) Rents;
'(6) Royalties;
'(7) Dividends;
'(8) Alimony and separate maintenance payments;
'(9) Annuities;
'(10) Income from life insurance and endowment contracts;
'(11) Pensions;
'(12) Income from discharge of indebtedness;
'(13) Distributive share of partnership gross income;
'(14) Income in respect of a decedent; and
'(15) Income from an interest in an estate or trust.'
2
'Gross income does not include the value of property acquired by gift. * * *'
3
After the increase referred to, married strikers without children received a $15 weekly food voucher; those with one child, an $18 voucher.
4
Compare N.Y. Labor Law, McKinney's Consol.Laws, c. 31, § 592 (compensation payable after seven weeks of striking).
5
Article 12, § 1 provides that 'The International Executive Board * * * shall have the power to authorize strikes.' Section 15 of that article provides that upon such authorization, 'it shall be the duty of the International Executive Board to render all financial assistance to the members of strike consistent with the resources and responsibilities of the International Union.'
The strike funds referred to are provided for by §§ 4 and 11 of Art. 16 of the International's constitution.
6
Specific challenge to the instructions was not made by the Government until its reply brief in this Court, and then only on the basis we have noted.
*
An administrative letter from the national union to the local unions dated March 6, 1952, states in part:
'The handling of the emergency health and welfare problems of our members and their families is one of the most important tasks facing our Union during strike periods. We should do everything possible to minimize the hardship of our members and their families during strike periods by using the resources of the community and our Union.
'The International Union, UAW—CIO, has established a Community Services Program in order to assist our members in making full use of community services. These health and welfare agencies have been organized in the community to render services, including financial assistance, medical, hospital and nursing care, legal aid, unemployment compensation (in New York State), family and child
care and other such services. These services can be used by our members during strike periods as well as in lay-off periods. Our members support and pay for such services through taxes for Federal, state and local public agencies and through contributions for voluntary community agencies.
'* * * Emergency strike assistance may be given to strikers who cannot meet their minimum needs with their own individual resources, who cannot qualify for such assistance from community agencies. Local Unions requiring strike assistance from the International Union must make their application for assistance to their Regional Director.'
The parties stipulated to the following:
'* * * The International Union grants strike benefits to non-members of the Union, who participate in a strike, if they do not have sufficient income to purchase food or to meet an emergency situation. The Union treats such non- members on the same basis as members of the Union, but non-members as well as members must be strikers before they may receive assistance from the Union.
'In order to obtain strike benefits from the Union, each applicant must appear before a Union Counsellor who asks him a series of questions which are contained on a printed Counselling form.
'* * * The Union makes a distinction between applicants in granting strike benefits to them, depending on their marital status and number of dependents. At the time the Kohler strike aid program began, a single person received a food voucher for $6.00 per week; a married couple without dependents received a food voucher for $10.00 a week; a married couple with two children, a food voucher for $13.85 a week. On June 28, 1954, the Union increased the amount of aid to the people on the Kohler strike: aid for a single person was increased to $7.50 a week; for a married couple without dependents aid was increased to $15.00 a week; aid for a married couple with one child was increased to $18.00 a week.'
1
Section 102(a) provides: 'Gross income does not include the value of property acquired by gift, bequest, devise, or inheritance.' 26 U.S.C. § 102(a), 26 U.S.C.A. § 102(a).
2
Although the plurality opinion apparently considers it unnecessary to decide whether the strike benefits received by respondent constitute 'income,' and deals only with the question whether they were excludable 'gifts,' I think it is clear that those payments were 'income.' Strike benefits constitute realized gains to their recipients, as a partial substitute for lost wages rather than lost capital, and are materially different in nature from the various categories of realized gains which have been treated as nontaxable through administrative fiat. (See the Treasury Rulings detailed in Mr. Justice FRANKFURTER'S concurring opinion.) Strike benefits are, therefore, within the reach of the 'gross income' provision of the Code. See Commissioner of Internal Revenue v. Glenshaw Glass Co., 348 U.S. 426, 429—430, 75 S.Ct. 473, 475—476, 99 L.Ed. 483.
3
The evidence shows an administrative letter was written by the International to its locals describing the nature and purpose of its strike fund as follows:
'The International Union, UAW—CIO, has also established a Strike Fund to further assist Local Unions in winning current strikes and to build a fund to protect our members in any future strikes. The Strike Fund of the International Union, UAW—CIO, is not large enough to provide strike assistance on the basis of right, and is not sufficient to meet all of the needs of our members during strike periods.'
4
While the Court of Appeals emphasized respondent's status as a nonmember when he began receiving strike benefits from the union, the parties' stipulation nullifies any possible basis for distinguishing between members and nonmembers in deciding the question before us, and, indeed, the Court does not purport to rest its decision on any such distinction.
5
That voluntary payments by a union may be and often are made with the requisite donative intent is not to be doubted. This was illustrated by the testimony of two union officials at the trial of this case. The Secretary-Treasurer testified about expenditures from the union's strike fund to assist in emergencies caused by a tornado at Flint, Michigan, and by a flood in Connecticut. A regional officer testified that the union purchased furniture for a member whose home and its furnishings had burned, viewing that action, somewhat differently than these strike benefits, as an 'outright donation' by the union. But plainly such were not the generous and charitable impulses that impelled the union to pay the strike benefits to respondent, and other strikers to sustain them while they waged the union's Kohler strike.
| 1112
|
363 U.S. 263
80 S.Ct. 1122
4 L.Ed.2d 1208
TEXAS GAS TRANSMISSION CORPORATION and Louisville Gas and Electric Company and Federal Power Commission, Petitioners,v.SHELL OIL COMPANY. FEDERAL POWER COMMISSION, Petitioner, v. SHELL OIL COMPANY.
Nos. 167, 170.
Argued April 20, 21, 1960.
Decided June 13, 1960.
Mr. Mathias F. Correa, New York City, for petitioners in No. 167.
Mr. Willard W. Gatchell, Washington, D.C., for petitioner in No. 170.
Mr. Oliver L. Stone, New York City, for respondent in both cases.
Mr. Justice BRENNAN delivered the opinion of the Court.
1
One of the series of orders issued by the Federal Power Commission after this Court's decision in Phillips Petroleum Co. v. State of Wisconsin, 347 U.S. 672, 74 S.Ct. 794, 98 L.Ed. 1035, required affected independent producers of natural gas to submit rate schedules in effect on June 7, 1954, the date Phillips was decided.1 The respondent. Shell Oil Company, on November 18, 1954, submitted its contract dated May 1, 1951, with Texas Gas Transmission Corporation,2 as a rate schedule on June 7, 1954, for gas from its Chalkley Field, Cameron Parish, Louisiana. The Commission, on March 13, 1957, accepted the contract as a rate schedule but ordered a hearing for the purpose of determining and fixing the price effective thereunder on June 7, 1954.3
2
At the hearing, Texas Gas contended that paragraph 1 of Article VI of the contract specifying the price of 8.997 cents per thousand cubic feet (Mcf.) for the period which included June 7, 1954, established that price for the date.4 This was the price at which Shell was billing Texas Gas for gas at the time. However, Shell contended that when Texas Gas, prior to June 7, 1954, began paying 12.5 cents per Mcf. to Atlantic Refining Company, for gas produced in nearby Acadia Parish, Shell became entitled to receive the same price under the so-called 'favored nation' clause of the Shell contract. That clause, paragraph 3 of Article VI, provides that '(i)f at any time after December 31, 1951, (Texas Gas) shall enter into a contract providing for the purchase by it of gas' at a higher price (than that currently being paid under this—the Shell contract), the price currently being paid will be increased to equal the 'price payable under such other contract.'5
3
When Texas Gas and Shell made the contract of May 1, 1951, Atlantic Refining Company was selling gas to the former from Acadia Parish production under a contract concluded in 1943 for a 25-year term. The Atlantic contract specified a price effective for the first five years and provided that during succeeding five-year periods, 'prices to be paid will be determined at the beginning of each period. * * *' 'The price to be paid * * * is to be agreed upon * * * after a survey of prevailing prices for gas being sold in similar quantities in the southwestern part of Louisiana.' The contract further provided that '(i)n the event that the parties are unable to agree upon the price * * * such determination shall be submitted to arbitration'; the arbitrators to be selected as provided in the agreement.6 Negotiations between Atlantic and Texas Gas as to the price to be effective for the five-year period beginning September 1, 1953, terminated with a letter agreement dated February 17, 1954, which recited: '(I)t is hereby agreed that the price to be paid * * * between September 1, 1953, and August 31, 1958, both inclusive, shall be 12.2 cents net' plus .3 cent for severance tax, or 12.5 cents. It is this letter agreement which Shell contends triggered the Shell contract's 'favored nation' clause.
4
The Commission's examiner issued his decision on August 9, 1957. He held that in making the Atlantic letter agreement Texas Gas 'enter(ed) into a contract providing for the purchase by it of gas' within the meaning of the Shell 'favored nation' clause and that this had escalated the Shell price to 12.5 cents per Mcf. The Commission reversed the examiner's decision and determined that the effective price on June 7, 1954, was 8.997 cents per Mcf., the price fixed in paragraph 1 of Article VI. 18 F.P.C. 617. Shell's petition for rehearing was denied. 19 F.P.C. 74. The Court of Appeals for the Third Circuit, on review, vacated the Commission's order. 263 F.2d 223. We granted the separate petitions for certiorari of Texas Gas and Louisville Gas and Electric Company in No. 167, and of the Federal Power Commission in No. 170, being particularly moved to do so by the contention made in both petitions that the Court of Appeals exceeded the appropriate scope of judicial review of the Commission's determination. 361 U.S. 811, 80 S.Ct. 68, 4 L.Ed.2d 59.
5
We may assume with the petitioners that the Court of Appeals did not treat the Commission's order as one which it was required to accept if reasonably supported in the record, and instead considered that it could examine de novo the question of the proper interpretation to be given the Shell 'favored nation' clause. The petitioners' argument that the Court of Appeals exceeded the allowable limits of judicial review is based upon the premise that the Commission's interpretation of the 'favored nation' clause reflects the application of its expert knowledge and judgment to a highly technical field, so that the Court of Appeals was required to accept the Commission's interpretation if it had "warrant in the record' and a 'reasonable basis in law," citing Unemployment Compensation Commission of Territory of Alaska v. Aragon, 329 U.S. 143, 153—154, 67 S.Ct. 245, 250, 91 L.Ed. 136. But the record nowhere discloses that the Commission arrived at its interpretation of the 'favored nation' clause on the basis of specialized knowledge gained from experience in the regulation of the natural gas business, or upon the basis of any trade practice concerning 'favored nation' clauses. On the contrary the opinions of the examiner and the Commission show that both treated the question as one to be determined simply by the application of ordinary rules of contract construction. The examiner stated that '(t)he language (of the 'favored nation' clause) is clear enough to reveal the intent of the parties without resort to parole evidence or self-serving memoranda. * * * (I)ts plain meaning is * * * Shell sought to cause its selling price to rise to that called for by any other contract Buyer made for gas after an agreed date. * * * The language was evidently broad; not narrowly technical in character.' The examiner concluded that 'elemental principles of contract law * * * too commonly known to the legal profession to require citations in support thereof' compelled the decision he reached. The Commission, in turn, relying for authority entirely upon court decisions and texts, construed the 'favored nation' clause to be applicable only when Texas Gas entered into a 'new' contract after December 31, 1951, and held that the February 17, 1954, 'agreement with Atlantic does not constitute a new contract as required by Shell's escalation clause, but merely represents action taken under a pre-existing contract between Texas Gas and Atlantic.' 18 F.P.C., at 618—619. It is apparent that the Commission rested its determination upon a construction of the words of the contract as it supposed a court would interpret them.7
6
'The grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.' Securities & Exchange Commission v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 459, 87 L.Ed. 626. Therefore, since the Commission professed to dispose of the case solely upon its view of the result called for by the application of canons of contract construction employed by the courts, and did not in any wise rely on matters within its special competence, the Court of Appeals was fully justified in making its own independent determination of the correct application of the governing principles. See Federal Communications Commission v. RCA Communications, Inc., 346 U.S. 86, 91, 73 S.Ct. 998, 97 L.Ed. 1470. There applies here what the Court said in Chenery: 'Since the decision of the Commission was explicitly based upon the applicability of principles (of contract interpretation) announced by courts, its validity must likewise be judged on that basis.' 318 U.S. at page 87, 63 S.Ct. at page 459.
7
In the circumstances, considerations of the scope of review of administrative determinations need not deter us from reviewing the decision of the Court of Appeals and deciding the proper construction of the 'favored nation' clause. We proceed to do so since the question of interpretation of the clause was presented in both petitions, our grant of certiorari was not limited to exclude it, and the question has been briefed and argued.
8
The question to be decided is: did the parties to the Shell contract mean that an agreement of the nature of the Atlantic letter agreement of February 17, 1954, should constitute the 'enter(ing) into a contract (by Texas Gas) providing for the purchase by it of gas * * *'? We first consider the nature of the letter agreement. The pricing provisions of the Atlantic contract specify a price for the first five-year period, and provide that prices for the four succeeding five-year periods should be determined by agreement of the parties, or failing such agreement, by arbitration.8 In either case the determination is to be made 'after a survey of prevailing prices for gas being sold in similar quantities in the southwestern part of Louisiana.' Pursuant to this provision a letter agreement dated October 29, 1948, and a modification agreement dated February 16, 1949, established prices for the five-year period from September 1, 1948, to August 31, 1953. The letter agreement of February 17, 1954, setting the price for the 1953—1958 period was thus the second such agreement.
9
Shell urges that the letter agreement is in actuality an entirely new contract which incorporates by inferential reference the terms of the 1943 contract. There is nothing in the letter agreement or otherwise in the record to substantiate this contention. On the contrary, the letter agreement affirmatively states that the action was taken 'in accordance with' the 1943 contract.9
10
To be sure, the letter agreement may be said to have been a 'contract' insofar as Atlantic and Texas Gas agreed therein upon a price and gave up the right to have arbitrators determine the price for them. But their act was merely in the performance of an undertaking they assumed in 1943 when they chose this binding method for periodic price adjustments instead of some method which would have foreordained the adjustments in precise amounts. The letter agreement in discharge of this obligation assumed in 1943 is thus simply 'executory of the (1943) contract between the parties.' Phillips Petroleum Co. v. Federal Power Commission, 10 Cir., 227 F.2d 470, 475. We therefore agree with the Commission's holding that the letter agreement 'merely represents action taken under a pre-existing contract between Texas Gas and Atlantic.' 18 F.P.C., at 619.
11
In the light of this, we do not think that in being party to the letter agreement Texas Gas 'enter(ed) into a contract for the purchase * * * of gas' within the meaning of those words as employed by the parties in the 'favored nation' clause. The language of that clause of the Shell contract is virtually the same as the parties used several times at the very outset of that contract. The sense in which the parties used the language there reveals its meaning in the 'favored nation' clause and, so interpreted, the Atlantic letter agreement is not a 'contract' within the meaning of the clause. The contract begins:
12
'This Contract, made and entered into as of May 1, 1951 * * *.
13
'Whereas, under date of October 1, 1943, Shell Oil Company, Inc., entered into a contract for the sale of gas * * *.
14
'Whereas, * * * Buyer and Seller now desire to rescind said contract and enter into a new contract for the purchase of gas * * *.' (Emphasis added.)
15
What follows are the nine Articles which detail the many aspects of the parties' relationship for the 20-year term of the contract. The Articles are captioned 'Sale of Gas,' 'Quantity of Gas,' 'Pressure Decline,' 'Point of Delivery,' 'Warranty of Title to Gas,' 'Prices,' 'Arbitration,' 'Term of Contract,' and 'Miscellaneous.' In addition an exhibit made part of the contract deals with such matters as 'Quality of Gas,' 'Measurements,' 'Billing and Payment,' 'Regulatory Bodies' and 'Force Majeure.' In other words 'enter(ing) into a contract providing for the purchase of gas' meant to the parties the making of a full-fledged contract containing all the terms defining the complete relationship.
16
This conclusion is borne out in the 'Prices' Article itself. That Article divides the contract term into five periods, one from May 1, 1951, until January 1, 1952, and four others each of five years. Paragraph 1 specifies the price for each period according to a schedule of automatic step-increases. Adjustment otherwise to higher prices may result in one of two ways: (1) under paragraph 3, the 'favored nation' clause, or (2) under paragraph 4 applicable only to the last two five-year periods—if Shell requests a 'price redetermination.' Upon such request 'determination is to be made by the parties or, if they are unable to agree, by the arbitrators' upon the basis of 'the three (3) highest prices to be paid during such period by operating interstate transporters of natural gas, including (Texas Gas)' for gas purchased from named Louisiana fields.
17
In all probability any 'price redetermination' agreed upon by Shell and Texas Gas under paragraph 4 would be evidenced by a writing stating the determination. Surely the parties who used the language 'enter(ing) into a contract' as they did in the preamble to their agreement would not conceive of such a 'price redetermination' as 'enter(ing) into a contract providing for the purchase * * * of gas.' No more does the similar periodic price adjustment under the Atlantic contract partake of the nature of 'enter(ing) into a contract providing for the purchase * * * of gas,' within the meaning of the language of the Shell 'favored nation' clause.
18
The Court of Appeals, in holding that the letter agreement came within the intendment of 'enter(ing) into a contract providing for the purchase * * * of gas,' stressed that Shell's objective was to assure itself a 'top price for its gas' and said that the facts tended to show 'that the intention of the parties was for any higher price paid by (Texas Gas) to another producer to trigger a rise on the Shell contract to the same figure * * *.' 363 F.2d at page 225. We think the contract demonstrates the contrary, and we find the record barren of any other evidence which would support this conclusion. Of course, we recognize that Shell desired to protect itself during so extended a contract period by provisions for price increases; and it did so. Indeed in this respect the contract is a one-way street. Shell is guaranteed automatic periodic step-increases and in addition, during the last 10 years of the contract term, at Shell's option, prices are to be redetermined to reflect any higher prevailing market prices. Then there is the 'favored nation' clause—also part of the protection afforded Shell. Shell is entitled to the highest price which any of these methods will yield. In contrast, there is no provision allowing Texas Gas the possibility of a price decrease.
19
Even assuming that the parties assigned paramount importance to giving Shell the 'top price,' the 'favored nation' clause as written is not as broad as it might have been. Shell has made other contracts with 'favored nation' clauses which are triggered by every higher price paid by the buyer to other producers.10 In contrast, Shell concedes that this 'favored nation' clause would not be triggered by higher prices paid by Texas Gas to other producers under pre-existing contracts by way of automatic increases or increases which are mathematically determined. The most reasonable explanation for the inclusion of the concededly more limited clause is that the parties meant to distinguish between increases which Texas Gas was contractually bound to pay under provisions of pre-1951 contracts and higher prices which Texas Gas voluntarily assumed to pay after 1951. In deciding which increases do and which to not trigger this 'favored nation' clause we would be making an irrational distinction were we to focus upon the mechanics chosen in the Atlantic contract and conclude that the Shell clause was activated by a post-1951 price determination under the Atlantic contract, although it would not have been activated by price increases pursuant to a more mathematically precise formula. In its essential respects the Atlantic price adjustment was no different from the latter, for the Atlantic adjustment was required under a pre-existing contract, and Texas Gas was powerless to prevent it.
20
We therefore hold that the Court of Appeals erred in its interpretation of the 'favored nation' clause and that the Commission correctly construed it as not effecting an increase in price by reason of the letter agreement.
21
There remains for mention an argument of Shell which the Court of Appeals found unnecessary to consider because of the rationale which it adopted. This is the contention that the 1943 Atlantic agreement did not provide for a fixed and determined price beyond the first five-year period, so that under applicable state law enforceability was suspended until the contract price for a particular succeeding five-year term was supplied by agreement or arbitration. From this premise it is argued that when the second five-year period came to an end on August 31, 1953, neither Atlantic nor Texas Gas was under any enforceable obligation to continue the prior relationship and therefore when on February 17, 1954, Texas Gas signed the letter agreement it was not acting pursuant to any pre-existing obligation but was exercising its free choice to enter what was in effect a new contract. In its petition for writ of certiorari the Commission argued that not only was there no doubt about the enforceability of the Atlantic contract but that the issue is immaterial because the parties to that contract treated the contract as binding and that it is not for Shell, a stranger to the contract, to say that it was not legally enforceable. However, the Commission suggested that should we reverse the decision of the Court of Appeals, premised as it is upon the assumption that the 1943 Atlantic contract imposed a binding obligation for its entire stated term, and if we considered the question of enforceability to be material, we should remand the issue of enforceability to the Court of Appeals for its decision. Shell has maintained in this Court that the issue of enforceability is material but, in view of the Commission's statement, has argued neither that issue nor the issue of enforceability. We agree that it is appropriate that the Court of Appeals address itself to the enforceability issue, if it is material, but under the circumstances we think the Court of Appeals should first decide the question of materiality.11 We therefore reverse the judgment of the Court of Appeals and remand for further proceedings consistent with this opinion. It is so ordered.
22
Judgment reversed and cause remanded with directions.
23
Mr. Justice BLACK concurs in the result.
1
The Phillips case held that the Commission had jurisdiction over the independent producers and the order in question was Order No. 174—B now incorporated in Regulations under the Natural Gas Act, 15 U.S.C.A. § 717 et seq., 18 CFR §§ 154.92 154.93.
2
The contract was actually between Shell and Louisiana Natural Gas Corporation, a wholly owned subsidiary of the petitioner, Texas Gas Transmission Corporation. The subsidiary was merged into its parent in 1955.
3
The hearing was ordered after Shell filed on February 11, 1957, an application for a rate increase from 12.5 cents per thousand cubic feet (Mcf.) to 16.75 cents per Mcf. plus tax reimbursement. This price increase has been suspended and is pending before the Commission in another proceeding. The Commission noted in its opinion herein that it was 'necessary in connection with any rate proceeding after suspension of increased rates * * * that we know the rate previously in effect * * *.' 18 F.P.C. 617, 618. Texas Gas and its customer, the other petitioner in No. 167, Louisville Gas and Electric Company were permitted to intervene in these proceedings.
4
Article VI, paragraph 1, provides in pertinent part:
'1. The prices to be paid by Buyer for gas hereunder shall be as follows:
'For all gas purchased from January 1, 1952, through December 31, 1956 ... 8.9970¢ per 1000 cu. ft.'
5
Paragraph 3 of Article VI is as follows:
'If at any time after December 31, 1951, Buyer shall enter into a contract providing for the purchase by it of gas produced from a field or fields located, and delivered to Buyer, within a radius of fifth (50) miles of any point of delivery provided hereunder, Buyer shall forthwith notify Seller of such fact, and if the price per one thousand (1000) cubic feet at any time payable under such other contract is higher than the price payable hereunder, each price payable hereunder which is less than the price payable at the same time under such other contract shall be immediately increased so that it will equal the price payable under such other contract. In determining whether the price payable under such other contract is 'higher' than the price payable for gas under this contract, due consideration shall be given to the provisions of this contract as compared with such other contract as to quality of gas, delivery pressures, gathering and compressing arrangements, quantity, provisions regarding measurement of gas, including deviation from Boyle's Law, taxes payable on or in respect of gas delivered and all other pertinent factors.'
6
The pertinent provisions are in Article III of the 1943 Atlantic contract reading as follows:
'The Buyer agrees to pay for the gas received hereunder a price computed as follows:
'(b) At the end of the first five-year period, Buyer and Seller are to reach an agreement as to the price for gas sold and delivered under this contract during the second five-year period. The price to be paid during such second five-year period is to be agreed upon at the beginning of such period after a survey of prevailing prices for gas being sold in similar quantities in the southwestern part of Louisiana.
'(c) During succeeding five-year periods, prices to be paid will be determined at the beginning of each period in the same manner as provided for in paragraph (b) above.
'(d) In the event that the parties are unable to agree upon the price to be paid for gas after the first five-year period, in accordance with the arrangements set forth in paragraphs (b) and (c) above, such determination shall be submitted to arbitration in accordance with Condition XII.'
7
The Commission reached its conclusion as to the interpretation of the 'favored nation' clause without dissent. There was one dissent, by Commissioner Connole, from an alternative ground of decision, namely, that the effective rate on June 7, 1954, was 8.997 cents per Mcf. because that was the charge actually being collected from Texas Gas. 18 F.P.C. 621. The Court of Appeals found no merit in this ground saying 'What that rate was * * * depends upon the contract-established provisions rather than on the fortuity of rates which were being actually paid on that date.' 263 F.2d at page 224. The Commission did not present this question among the Questions Presented in its petition for certiorari and we intimate no view upon its merits.
8
For purposes of its decision the Court of Appeals 'assumed without deciding that the Atlantic contract of 1943 did in fact impose a binding agreement-to-agree on the price for gas in each of the contract's last four five year periods.' 263 F.2d at page 226. We proceed on the same assumption in reviewing the interpretation of the 'favored nation' clause in the Shell contract.
9
The pertinent text of the letter is as follows:
'Under date of September 1, 1943, Defense Plant Corporation, as Buyer, entered into a gas purchase contract with The Atlantic Refining Company, as Seller, for the purchase of gas produced from Seller's leases in the North Tepetate pool of Acadia Parish, Louisiana, which contract was subsequently amended February 16, 1949. Louisiana Natural Gas Corporation purchased the pipe line operated by Defense Plant Corporation and the aforesaid contract with The Atlantic Refining Company was assigned to Louisiana Natural Gas Corporation.
'In accordance with Paragraph III of said (1943) contract, it is hereby agreed that the price to be paid by Louisiana Natural Gas Corporation to The Atlantic Refining Company for gas sold and delivered under such contract between September 1, 1953, and August 31, 1958, both inclusive, shall be 12.2 cents net for each 1,000 cubic feet at a pressure base of 15.025 psia of gas received at the central point or points set forth in the original contract, regardless of whether such gas is delivered to a government plant or not; and, in addition, Buyer shall reimburse Seller for all state severance taxes, or similar taxes, which Seller is obligated to pay and has paid to the State of Louisiana on such gas.'
10
For example the Commission's opinion on the order denying rehearing, 19 F.P.C., at 77, states:
'For instance in Shell's Gas Rate Schedule No. 4 it is provided:
"If at any time or times the price per Mcf of gas or dry gas purchased by (the Buyer) from any gas producer whomever * * * shall be greater than the price per Mcf of gas purchased hereunder, (the Buyer) will increase the price per Mcf payable to (Shell) for gas delivered hereunder. * * *'
'In Shell's Gas Rate Schedule No. 7, it is provided:
"Buyer agrees that if, during the term of this agreement, it purchases or agrees to purchase natural gas at any place within a distance of twenty-five (25) miles of the delivery point under the present contract, as a price or prices higher * * * than the prices provided for by the present contract, * * * it will, upon seller's request, thereafter pay to seller a price or prices under the present agreement not less than the higher price so being paid.'
'There are numerous other examples included in the present record.'
11
We do not read the following statement of the Court of Appeals as foreclosing the Commission's argument that the issue of enforceability is not material:
'We have assumed without deciding that the Atlantic contract of 1943 did in fact impose a binding agreement-to-agree on the price for gas in each of the contract's last four five year periods. Thus it has not been necessary to determine the several questions raised in connection with the arguments directed to that phase of the case. Of course if the Atlantic contract of 1943 was not a binding agreement-to-agree, that circumstance alone would place the February, 1954 Atlantic contract fully within the terms of the escalation clause in the Shell contract.' 263 F.2d at page 226.
| 89
|
363 U.S. 207
80 S.Ct. 1222
4 L.Ed.2d 1170
John CLAY, Petitioner,v.SUN INSURANCE OFFICE LIMITED.
No. 349.
Argued March 22 and 23, 1960.
Decided June 13, 1960.
Mr. Paschal C. Reese, West Palm Beach, Fla., for petitioner.
Mr. Bert Cotton, New York City, for respondent.
Mr. Robert J. Kelly, Tallahassee, Fla., for State of Florida, as amicus curiae, pro hac vice, by special leave of Court.
Mr. Justice FRANKFURTER delivered the opinion of the Court.
1
In 1952, petitioner, while a citizen and resident of Illinois, purchased from respondent in Illinois the contract of insurance upon which this suit is based. The respondent is a British company licensed to do business in Illinois, Florida, and nine other States.
2
The policy, which petitioner bought for a lump sum, ran for three years. Designated a 'Personal Property Floater Policy (World Wide),' it provides world-wide coverage against 'all risks' of loss or damage to the property covered, property generally classified as personal property having no fixed situs. A provision of the policy, which has given rise to this controversy, required that suit on any claim for loss must be brought within twelve months of the discovery of the loss.
3
Some months after purchasing the policy the petitioner moved to Florida, where he brought this suit for losses sustained in Florida in the winter of 1954—1955. Petitioner reported the losses to the respondent on February 1, 1955, and on April 1, 1955, respondent denied liability.
4
The action, resting on diversity of citizenship, was instituted in the United States District Court for the Southern District of Florida on May 20, 1957, more than two years after discovery of the losses. The respondent defended on two grounds: (1) that under the time limitation for bringing suit, a restriction concededly valid under Illinois law, the suit was barred; and (2) that the 'all risks' coverage of the policy does not include the losses resulting from willful injury to or appropriation of the insured property by the insured's spouse.1 The jury was charged that if the losses were caused by the deliberate acts of petitioner's wife, they were not therefore excluded from coverage. The jury found for petitioner, and judgment in the amount of $6,800 was entered. The District Court, without opinion, denied a motion for judgment non obstante veredicto, which was based, inter alia, upon the suit clause, apparently believing that Florida Statutes (1957), § 95.03 F.S.A., which is set out in the margin,2 rendered the clause ineffective.
5
On appeal the Court of Appeals for the Fifth Circuit reversed (one judge dissenting), sustaining the defense based upon the suit clause on the ground that Florida could not apply its statute to this Illinois-made contract consistently with the requirements of due process. 265 F.2d 522. The court considered the preliminary question of state law—whether the Florida statute, § 95.03, in fact applies to a contract made in these circumstances. Strangely enough, it did not decide this threshold question because it apparently found it easier to decide the constitutional question that would be presented only if the statute did apply. Such disposition of a serious constitutional issue justified bringing the case here. 361 U.S. 874, 80 S.Ct. 141, 4 L.Ed.2d 113.
6
By the settled canons of constitutional adjudication the constitutional issue should have been reached only if, after decision of two non-constitutional questions, decision was compelled. The lower court should have first considered: (1) whether, under the law of Florida, § 95.03 is applicable to this contract; and (2) whether the losses sued upon were within the 'all risks' coverage of the policy if in fact caused by petitioner's wife.
7
It would be a temerarious man who described the constitutional question decided below as frivolous. The seriousness of the question becomes manifest from a recital of the decisions of this Court relevant to the determination of the issue on which the court below passed.
8
In Home Insurance Co. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926, the Court held that Texas could not constitutionally apply its own law to invalidate a suit clause in a contract of fire insurance covering a tugboat. The plaintiff was at all pertinent times both a Texas domiciliary and a resident of Mexico. The contract, of which he was an assignee, was made in Mexico between a Mexican insurer which had no contact whatever with Texas, and a Mexican resident. The premium was paid in Mexico, and the policy covered the tug only while it was in Mexican waters. In Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, the Court held that Mississippi could not constitutionally apply its own law to invalidate a contract clause limiting the insurer's liability on a surety bond against defalcations by the insured's employees 'in any position, anywhere,' to losses of which notice was given within fifteen months after the termination of coverage. The contract was made in Tennessee where the insured had offices and the insurer was licensed to do business. Mississippi's action was struck down although the contract covered an ambulatory risk, the default giving rise to the claim actually occurred in Mississippi, the insurer was under license doing business there, and the insured was incorporated there.
9
The most recent case in the series is Watson v. Employers Liability Assurance Corp., Ltd., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74. Without questioning either Dick, or Delta & Pine, the Court sustained Louisiana's application, in a suit by a Louisiana citizen, of its own 'direct action' statute although thereby it invalidated an express provision against direct liability of the insurer in a contract negotiated and paid for within Illinois and Massachusetts, in both of which the clause was valid. The contract insured Toni, an Illinois corporation distributing its product nationally, against liabilities arising from the use of the product. The insurer was a British corporation licensed to do business in several States, including Massachusetts, Illinois and Louisiana. Toni had no contact with Louisiana and could not be served there. The Louisiana plaintiff had sustained her injury in Louisiana. The Court found Louisiana's contact with the subject justified its application of the statute to make an insurer doing business in Louisiana amenable to suit by a locally injured citizen.
10
The relevant factors of the present case are not identic either with Dick, or Delta & Pine, or Watson, and not one of them can fairly be deemed controlling here. The bearing of all three on the immediate situation would have to be considered and appropriately evaluated in adjudicating the precise constitutional issue presented by it, were that issue inescapably before us. The disposition of either of two unresolved state law questions may settle this litigation. The Court of Appeals was therefore not called upon initially to reach this constitutional question; nor is this Court. The doctrine that the Court will not 'anticipate a question of constitutional law in advance of the necessity of deciding it,' Liverpool, N.Y. & P.S.S. Co. v. Emigration Commissioners, 113 U.S. 33, 39, 5 S.Ct. 352, 355, 28 L.Ed. 899, relied on by Mr. Justice Brandeis in his well-known concurring opinion in Ashwander v. T.V.A., 297 U.S. 288, 347—348, 56 S.Ct. 466, 483, 80 L.Ed. 688, is a well-settled doctrine of this Court which, because it carries a special weight in maintaining proper harmony in federal-state relations, must not yield to the claim of the relatively minor inconvenience of postponement of decision. Of course we do not remotely hint at an answer to a question that is prematurely put.
11
While both questions not disposed of by the Court of Appeals are questions of local law, the question whether under Florida law § 95.03 is applicable to this contract is one on which the state court's determination is controlling. But, as the Court of Appeals indicated, it could not, on the available materials, make a confident guess how the Florida Supreme Court would construe the statute. See, e.g., Hoagland v. Railway Express Agency, 75 So.2d 822; Equitable Life Assurance Society of United States v. McRee, 75 Fla. 257, 78 So. 22. The Florida Legislature, with rare foresight, has dealt with the problem of authoritatively determining unresolved state law involved in federal litigation by a statute which permits a federal court to certify such a doubtful question of state law to the Supreme Court of Florida for its decision. Fla.Stat.Ann., 1957, § 25.031.3 Even without such a facilitating statute we have frequently deemed it appropriate, where a federal constitutional question might be mooted thereby, to secure an authoritative state court's determination of an unresolved question of its local law. See Allegheny County v. Frank Mashuda Co., 360 U.S. 185, 189, 79 S.Ct. 1060, 1063, 3 L.Ed.2d 1163, and cases cited; see also Meredith v. City of Winter Haven, 320 U.S. 228, 236, 64 S.Ct. 7, 12, 88 L.Ed. 9.
12
Vacated and remanded.
13
Mr. Justice BLACK, whom THE CHIEF JUSTICE and Mr. Justice DOUGLAS join, dissenting.
14
The Court today holds that this Court and the federal courts below must refrain from exercising their jurisdiction to decide this lawsuit properly brought. It remands the case to the Court of Appeals and implies that a state court should be the one to determine two questions of state law to avoid a federal constitutional question which is also presented. In so doing, I believe this Court is carrying the doctrine of avoiding constitutional questions to a wholly unjustifiable extreme. I agree that it is frequently better not to decide constitutional questions when decision of nonconstitutional questions also presented will dispose of a case. But I do not agree that this is such an occasion. The state law questions do not call for first interpretation of a broad, many-pronged, state regulatory scheme.1 They do not involve peculiarly local questions such as the eminent domain power a State has allowed a city to exercise,2 or the local land law of a State.3 Nor are the state questions here difficult ones depending on ambiguous or vague state law,4 but instead they border on the frivolous. Since I think the answer to the constitutional question also is clear, I believe we should decide all the questions in the case. The Court's refusal to do so, together with the language it uses, seems to me to be an automatic application of 'canons of constitutional adjudication' so absolute that a federal court can never under any circumstances or conditions decide a constitutional question if there is any possibility of turning a case away on other grounds. I believe that there are times when a constitutional question is so important that it should be decided even though judicial ingenuity would find a way to escape it. I would decide this case here and now.
15
The first state question is whether, under state interpretation, the clause of this insurance policy which insures the petitioner against 'all risks,' protects him against destruction and loss of the property caused by his wife.5 The policy does not intimate any exception to its coverage for such a risk although it has pages of small printed type stating its extensions, limitations, exclusions and general conditions. The United States District Judge who tried this case, experienced in Florida law, not surprisingly paid scant attention to this contention. No case in which we have ever 'abstained' from passing on difficult state questions offers the faintest support for the holding that a contention so unlikely to be sustained anywhere can be used as a reason to avoid passing on a constitutional question, even one much more serious than I see the one here to be.
16
The second state question that the Court is sending back, with the suggestion that the Court of Appeals should refer it to the Florida Supreme Court for decision, is almost equally devoid of plausibility. A Florida state statute provides that all contractual provisions fixing a period of time in which suits may be brought under such contract at a period of time less than that provided by the statute of limitations of Florida are illegal and void. The statute also forbids any court in Florida to 'give effect to any provision or stipulation of the character mentioned in this section.'6 Since the contract of insurance here provided for a period of limitation shorter than the State's five-year period for unsealed, written contracts,7 this contractual provision would be void under the Florida statute if it applies.8 The only way to get ambiguity into this section is to import it. Statutes of a similar nature exist in 31 States and the District of Columbia.9 They are in line with the protective safeguards that States have felt it necessary to create so as to preserve a fair opportunity for people who have bought and paid for insurance to go to court and collect it. And state courts in the main have interpreted and applied such statutes so as to carry out the legislative policy adopted.10 Florida's particular interest in this very statute is shown by the fact that the Attorney General of the State filed briefs and participated in oral argument to support both the full meaning petitioner claimed for the statute and its constitutionality when so interpreted. I see no reason to send this particular question back to the Court of Appeals, much less, ultimately, to the state court. The statute's plain language, its interpretation by the experienced trial judge who sat on the case and its interpretation by the Attorney General of the State should be sufficient to show to even the most doubtful that this state law applies to this printed provision of the contract and requires the company to try this lawsuit on its merits (unless, of course, the statute is unconstitutional when so applied). I think no cloud should be cast on the statute's clear meaning and I certainly do not think it is necessary to point out to the Florida court that it also could, if it wished, avoid the constitutional question the Court makes so much of by limiting the meaning the Florida legislature obviously intended to give this statute.11 If 'maintaining proper harmony in federal-state relations' is the objective of the Court, I would think it best to give this statute its plain meaning and to settle the constitutionality of this statute Florida passed (according to its Attorney General) to protect its people.
17
In now come to the constitutional question which is avoided and which I would decide. This insurance contract was made in the State of Illinois. There are Illinois cases indicating that the contractual provision shortening the Illinois state statute of limitations might be treated as valid in a court of that State.12 There are no cases, however, indicating that Illinois wanted to project its law into the State of Florida so as to nullify a Florida law invalidating such contractural provisions in Florida courts.13 The constitutional question raised is this. Since the policy's restrictive provision would probably be upheld in Illinois courts in a suit on an Illinois contract, does either the Due Process Clause or the Full Faith and Credit Clause require Florida to pay it homage?
18
The Florida statute is, in my judgment, constitutional as applied by the District Court in this case. I believe it violates neither the Due Process Clause nor the Full Faith and Credit Clause of the Constitution. There was a time in the evolution of conflict of laws theories when the idea was championed that every detail and element of a contract, every action taken under it, was governed by the law of the place where the contract was made. This concept ran into many difficulties. Was the contract made at the home office of an insurance company or at the place where an agent dropped it in the mail to send it to a man in another State? Exceptions sprang up such as the rule applying the law of the place where the contract was to be performed to issues of performance. Soon it was discovered that it was almost as puzzling to tell where a contract was intended to be performed or what part of activities under a contract could be considered performance as it had been to determine where a contract was made. These and other such academic problems dissipated the dream of a fixed rule or rules for deciding which law governed contract cases. As the concepts developed, there came an emphasis upon having a contract governed by the law which the parties intended to be applied. But it was not always possible to tell which law the parties had agreed upon, and there was resistance on the part of some jurisdictions having close interests in the events leading to litigation to applying foreign law, against their deeply felt policies, solely because the parties at one time preferred it.
19
As business boomed throughout our growing country giving more States than one an interest in what a contract meant and how it should be enforced for the benefit of the citizens who made it or for whose benefit it was made, practical men began to see that there could not be one single rule of law to govern a contract in which the citizens of many States were interested. One of the many opinions of this Court recognizing that fact was Pacific Employers Ins. Co. v. Industrial Accident Comm., 306 U.S. 493, 59 S.Ct. 629, 83 L.Ed. 940, in which Mr. Justice Stone, later Chief Justice, stated that:
20
'(T)he conclusion is unavoidable that the full faith and credit clause does not require one state to substitute for its own statute, applicable to persons and events within it, the conflicting statute of another state, even though that statute is of controlling force in the courts of the state of its enactment with respect to the same persons and events.' Id., 306 U.S. at page 502, 59 S.Ct. at page 633.
21
Later, in Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477, and in Griffin v. McCoach, 313 U.S. 498, 61 S.Ct. 1023, 85 L.Ed. 1481, this Court recognized that the courts of a State are not compelled to enforce all provisions of all contracts, but have much freedom to exercise their own state policy in their own courts. See also Pink v. A.A.A. Highway Express, 314 U.S. 201, 62 S.Ct. 241, 86 L.Ed. 152; Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 63 S.Ct. 602, 87 L.Ed. 777.14
22
After these and a host of other cases recognizing the constitutional power of States to apply their own laws in many ways to contracts made outside the State, we decided Watson v. Employer's Liability Assurance Corp., 348 U.S. 66, 75 S.Ct. 166, 99 L.Ed. 74. That case involved a law of Louisiana which provided that injured persons could bring direct actions against liability insurance companies that had issued policies contracting to pay judgments imposed against persons who had inflicted the injuries. The insurance contract in that case, however, contained a clause, binding and enforceable under the law of the places where the contract was made and delivered, that prohibited direct action against the insurance company until after final determination of the insured's obligation to pay damages. A person injured in Louisiana by an insured company sued the insurance company there directly. Application of the Louisiana law was challenged as an unconstitutional denial of equal protection, due process, full faith and credit, and an unconstitutional impairment of contract. We rejected all these contentions. The policy of insurance there, like the one here, was to be given nation-wide effect. We held there, Mr. Justice Frankfurter disagreeing with the grounds of the Court's opinion, that none of the provisions of the Constitution relied on requires States automatically to subordinate their own contract laws to the laws of other States in which contracts happened to have been executed. We said:
23
'Where, as here, a contract affects the people of several states, each may have interests tht leave it free to enforce its own contract policies.' Id., 348 U.S. at page 73, 75 S.Ct. at page 170.
24
In the Watson case we also rejected a contention that the cases relied on by the Court here as throwing a cloud upon the Florida statute, Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U.S. 143, 54 S.Ct. 634, 78 L.Ed. 1178, and Home Ins. Co. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926, required that we hold Louisiana's law unconstitutional. The reasons we gave for rejecting the contention about those cases there apply equally to the Florida statute here. In the Dick case the Court's opinion carefully pointed out that the decision in that case might have been different had activities relating to the contract there held binding in Texas been carried on in that State. And in the Delta & Pine Land Co. case, we pointed out that the Court had considered that the Mississippi activities in connection with the policy sued on there were found to be so 'slight' and so 'casual' that Mississippi could not apply its own law. I, myself, have grave doubts that the Delta & Pine Land Co. case would be treated the same way today on its facts. But however that may be, as it stands, it does not require a holding that Florida's law is unconstitutional. If thought to suggest such a holding, it only means that we should decide this case to remove any such suggestion once and for all. The only philosophy on which the Dick and Delta & Pine Land Co. cases could be made to apply here would be on the old idea that the law of the place where the contract is made always governs every activity under it, a rule that had been repudiated by courts and commentators everywhere, especially as a constitutional rule.15
25
Our later cases previously discussed express the only workable rule for this country today.16 Insurance companies, like other contractors, do not confine their contractual activities and obligations within state boundaries. They sell to customers who are promised protection in States far away from the place where the contract is made. In this very case the policy was sold to Clay with knowledge that he could take his property anywhere in the world he saw fit without losing the protection of his insurance. In fact, his contract was described on its face as a 'Personal Property Floater Policy (World Wide).' The contract did not even attempt to provide that the law of Illinois would govern when suits were filed anywhere else in the country. Shortly after the contract was made, Clay moved to Florida and there he lived for several years. His insured property was there all that time. The company knew this fact. Particularly since the company was licensed to do business in Florida, it must have known it might be sued there, and that Florida courts would feel bound by Florida law.
26
In addition to the reasons already given for my view that Florida law constitutionally may govern this case—that Florida, the forum State, has sufficient contacts with the parties, the property insured and the lawsuit—I would add that when a contractual provision is one dealing with limitations on actions, it is particularly inappropriate to compel the forum State, as a constitutional matter, to apply the law of the place where the contract was 'made.' This Court has long recognized that the States where lawsuits are tried are free to apply their own statutes of limitations. This has been the constitutional rule since the decision in 1839 of M'Elmoyle for Use of Bailey v. Cohen, 13 Pet. 312, 10 L.Ed. 177. The continued vitality of this principle was recognized by the Court in Wells v. Simonds Abrasive Co., 345 U.S. 514, 516—517, 73 S.Ct. 856, 857—858, 97 L.Ed. 1211. The only deviation from it appears to have been Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 67 S.Ct. 1355, 91 L.Ed. 1687, which applied a special rule freeing fraternal insurance companies because of their 'indivisible unity,' a distinction to which I registered my dissent. It is true that this case is not identical with one in which the forum seeks to apply an ordinary statute of limitations to a suit on a contract having no limitation clause. Here, Florida, seeking to be sure that its own limitation rules and no others apply to cases in its courts, has legislated that contractual limitations of too short duration are invalid. The Court of Appeals called it error to assume 'that the issue presented concerned the choice of the applicable statute of limitations rather than the choice of the substantive law governing the validity of the contract itself.' But the same reasons for the view that the forum may refuse to apply a foreign statute of limitations impel me to the view that the forum may refuse to apply a foreign contract of limitations. See Order of United Commercial Travelers of America v. Wolfe, 331 U.S. 586, 627 630, 67 S.Ct. 1355, 1374—1376, 91 L.Ed. 1687 (dissenting opinion). And cf. Metropolitan Cas. Ins. Co. of New York v. Brownell, 294 U.S. 580, 55 S.Ct. 538, 79 L.Ed. 1070.
27
The Court, however, says that there is a serious constitutional question whether Florida can apply its own law here. Therefore, the Court refuses to decide the question (and the related state questions) on the ground, as I read the opinion, that there exists an unbending, unyielding, automatic canon of constitutional adjudication that if a constitutional question is not 'frivolous,' the Court must avoid it, unless decision is 'compelled' after disposition of all nonconstitutional questions. In fact, the Court indicates that when a constitutional question lurks in the case, not even the lower federal courts sitting in diversity jurisdiction should decide the nonconstitutional questions.17 Of course, this view is not unprecedented altogether; it is in my opinion, however, wholly unprecedented in a case such as this. I agree that there is a judicial practice, wise perhaps in most instances, under which courts do not ordinarily decide constitutional questions unless essential to a decision of the case.18 This practice extends back to the early days of the country. But even the greatest of our judges have not always followed it as a rigid rule. Perhaps had they done so the great opinion of Chief Justice Marshall in Marbury v. Madison would never have been written.19 Only if the practice of occasionally avoiding decision of a constitutional question is first made into a rule and then elevated to a position of absoluteness denied by some even to constitutional commands themselves, are we wise in avoiding decision here. On the other hand, if the power to avoid deciding constitutional issues is discretionary, as I think it undoubtedly is, I believe that this is not a proper case for its exercise.
28
Such a rigid, ironclad, all-encompassing rule as I understand the Court to promulgate here is, in my judgment, bad for the litigants, bad for the courts, and bad for the country. Litigants, too, have a right to have their lawsuits decided without unreasonable and unnecessary delay or expense.20 There do come times, in my judgment, when a constitutional question is so ripe for decision, when its resolution is so much needed, that it would be proper to decide the constitutional question even though there might be a possibility or even a probability that by sending a case back some nonconstitutional question might be decided in a way that would remove the constitutional controversy from that particular case. The fact that one case presenting the constitutional issue in some clear form has survived the jurisdictional and practical obstacles to adjudication, the fact that such an issue has been tossed up from the maelstrom of trials and private disputes to the height of our appellate courts, is one sign that the issue needs deciding. However this particular case is or may be decided, the pressing need for deciding this constitutional question will remain the same. Our expanding commerce among the States guarantees that. The constitutional question is squarely presented and the way it is decided will have an important effect on the laws of many States in addition to Florida. It is here now. Why not decide it? Sometimes a conflict of view among the circuits and among the States on a constitutional question, like such conflicts on statutes or common-law questions, reaches such proportions that they cry out for an authoritative decision of our Court. At least in such instances I am not willing to tie myself down by a judicially created rule that would bar deciding constitutional questions when they get here.21 Subscribing as I have to the belief that there is virtue in the policy of not unnecessarily deciding constitutional issues, I think it would be better to abandon that policy entirely than to carry it to the extremes of the Court's opinion today. In my judgment, the rule in the rigid and sweeping form announced has not been the rule heretofore. It is true that some dissents might possibly have gone so far, but I do not think it can fairly be said that the whole Court has done so. That this Court has not heretofore followed the dogmatic rule announced today is very clear from our case of City of Chicago v. Atchison, T. & S.F.R. Co., 357 U.S. 77, 78 S.Ct. 1063, 2 L.Ed.2d 1174. Cf. United States v. Sullivan, 332 U.S. 689, 692—694, 68 S.Ct. 331, 333—335, 92 L.Ed. 297. In the Chicago case, over a strong dissent, the majority of the Court refused to avoid the constitutional question on the ground that we should first wait to have a city ordinance interpreted by Illinois courts. We said:
29
'We see no ambiguity in the section which calls for interpretation by the state courts. Cf. Toomer v. Witsell, 334 U.S. 385, 68 S.Ct. 1156, 92 L.Ed. 1460. Remission to those courts would involve substantial delay and expense, and the chance of a result different from that reached below, on the issue of applicability, would appear to be slight.' Id., 357 U.S. at page 84, 78 S.Ct. at page 1067.
30
This was a fair application of the constitutional avoidance practice.22
31
The Court assumes that there is in Florida a method which will enable the Court of Appeals for the Fifth Circuit to obtain a decision of the Supreme Court of Florida by certifying to them the two questions of state law here involved. Florida does have such a law on paper, but evidently does not have one in fact. The state statute, first passed in 1945 and now appearing as Fla.Stat.Ann. (1959 Supp.) § 25.031, authorizes the Supreme Court of Florida to provide rules for obtaining such certifications from federal appellate courts, but the best information obtainable is that the Supreme Court of Florida has never promulgated any such rules, and evidently has never accepted such a certificate.23 This is not difficult to understand. Perhaps state courts take no more pleasure than do federal courts in deciding cases piecemeal on certificates. State courts probably prefer to determine their questions of law with complete records of cases in which they can enter final judgments before them. It seems rather unfortunate for this petitioiner that he is to be made the guinea pig in the Court's effort to get the Supreme Court of Florida to put into effect a law that it has deliberately left unused for a period of 15 years.24 This suit was filed three years ago and, borrowing an expression, it would be a 'temerarious man' who would forecast that it is sure to get back to us again before three more years. That would be all right if such an exasperating delay were necessary in order to achieve fair and just consideration of this case. I do not think it is necessary or justified in this case, and I think the Court's handling of the case sets up a precedent of such an extreme nature that the rule of avoiding constitutional questions might begin to produce more evil consequences than good.
32
I would affirm the judgment of the District Court.
33
Mr. Justice DOUGLAS, dissenting.
34
While I join the dissent of my Brother BLACK, I desire to give renewed protest to our practice of making litigants travel a long, expensive road in order to obtain justice. Congress has created federal courts with power to adjudicate controversies between citizens of different States. They are manned by judges drawn from the local Bars and fairly conversant with the laws of their respective areas. They are equipped to decide questions of local law as well as federal questions. As we stated in Meredith v. City of Winter Haven, 320 U.S. 228, 236, 64 S.Ct. 7, 12, 88 L.Ed. 9:
35
'Congress having adopted the policy of opening the federal courts to suitors in all diversity cases involving the jurisdictional amount, we can discern in its action no recognition of a policy which would exclude cases from the jurisdiction merely because they involve state law or because the law is uncertain or difficuilt to determine.'
36
The situations where a federal court might await decision in a state court or even remand the parties to it should be the exception not the rule. Only prejudice against diversity jurisdiction can explain the avoidance of the simple constitutional question that is presented here and the remittance of the parties to state courts to begin the litigation anew. Some litigants have long purses. Many, however, can hardly afford one lawsuit, let alone two. Shuttling the parties between state and federal tribunals is a sure way of defeating the ends of justice. The pursuit of justice is not an academic exercise. There are no foundations to finance the resolution of nice state law questions involved in federal court litigation. The parties are entitled absent unique and rare situations—to adjudication of their rights in the tribunals which Congress has empowered to act.
1
Certain property was taken from his home. Other property, clothing, was burned, and a painting was slashed.
2
'All provisions and stipulations contained in any contract whatever * * * fixing the period of time in which suits may be instituted under any such contract * * * at a period of time less than that provided by the statute of limitations of this state, are hereby declared * * * to be illegal and void. No court in this state shall give effect to any provision or stipulation of the character mentioned in this section.' Section 95.11(3) provides a five-year limitation for actions on written contracts not under seal.
3
The statute provides that the Supreme Court of Florida may devise rules to govern such certifications; it appears that to date such rules have not been promulgated. See Kurland, Toward a Co-operative Judicial Federalism, 24 F.R.D. 481, 489. It is not to be assumed, however, that such rules are a jurisdictional requirement for the entertainment by the Florida Supreme Court of a certificate under § 25.031.
1
See Harrison v. NAACP, 360 U.S. 167, 79 S.Ct. 1025, 3 L.Ed.2d 1152 (a declaratory judgment case); Rescue Army v. Municipal Court of City of Los Angeles, 331 U.S. 549, 67 S.Ct. 1409, 91 L.Ed. 1666; Alabama State Federation of Labor, etc. v. McAdory, 325 U.S. 450, 65 S.Ct. 1384, 89 L.Ed. 1725, and Congress of Industrial Organizations v. McAdory, 325 U.S. 472, 65 S.Ct. 1395, 89 L.Ed. 1741 (declaratory judgment cases); American Federation of Labor v. Watson, 327 U.S. 582, 66 S.Ct. 761, 90 L.Ed. 873 (parallel action pending in state court). And cf. Alabama Public Service Comm. v. Southern R. Co., 341 U.S. 341, 71 S.Ct. 762, 95 L.Ed. 1002; Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424; Railroad Comm. of Texas v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (cases involving injunctions or interference with state regulations, law or administrative orders).
2
See Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 79 S.Ct. 1070, 3 L.Ed.2d 1058.
3
See Thompson v. Magnolia Petroleum Co., 309 U.S. 478, 60 S.Ct. 628, 84 L.Ed. 876.
4
In City of Chicago v. Atchison, T. & S.F.R. Co., 357 U.S. 77, 84, 78 S.Ct. 1063, 2 L.Ed.2d 1174; Albertson v. Millard, 1953, 345 U.S. 242, 73 S.Ct. 600, 97 L.Ed. 983, and Toomer v. Witsell, 1948, 334 U.S. 385, 68 S.Ct. 1156, 92 L.Ed. 1460, it was made clear that 'abstention would be improper if the statute was in fact reasonably clear * * *.' Note, Abstention: An Exercise in Federalism, 108 U. of Pa.L.Rev. 226, 233 (1959).
5
The policy stated under 'Perils Insured,' 'All risks of loss of or damage to property covered except as hereinafter provided.'
6
Fla.Stat., 1957, § 95.03, F.S.A. Relevant portions of the statute are set forth in note 2 of the opinion of the Court.
7
Fla.Stat. § 95.11(3), F.S.A.
8
The suit clause in the contract provided: 'No suit, action or proceeding for the recovery of any claim under this Policy shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after discovery by the Assured of the occurrence which gives rise to the claim. Provided, however, that if by the laws of the state within which this Policy is issued such limitation is invalid, then any such claims shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of such state to be fixed herein.'
9
See statutes referred to in Carnahan, Conflict of Laws and Life Insurance Contracts (1958), §§ 26(h), n. 83 and 137. Also four States have statutes dealing specifically with certificates of fraternal benefit societies. Id., § 26(h), n. 84.
10
See, e.g., Galliher v. State Mutual Life Ins. Co., 1907, 150 Ala. 543, 43 So. 883; Ehrenzweig, Contracts in the Conflict of Laws, 59 Col.L.Rev. 973, 1000.
11
Cf. Harrison v. NAACP, 360 U.S. 167, 177—178, 79 S.Ct. 1025, 1030—1031, 3 L.Ed.2d 1152.
12
The Circuit Court below cited Trichelle v. Sherman & Ellis, Inc., 259 Ill.App. 346; Hartzell v. Maryland Cas. Co., 163 Ill.App. 221. Sun Ins. Office Limited v. Clay, 5 Cir., 265 F.2d 522, 524, note 2.
13
The Illinois cases cited by the court below as upholding limitation clauses did not deal with events so connected with foreign jurisdictions, statutes of policies as were those in the present case. They merely held that Illinois courts would honor limitation clauses in Illinois centered controversies. See note 15, infra.
14
But see Order of United Commercial Travelers v. Wolfe, 331 U.S. 586, 67 S.Ct. 1355, 91 L.Ed. 1687, in which an exception was made with regard to policies issued by a fraternal benefit society.
15
It has been pointed out that if a court of one State, in applying the rule that the law of the place of making the contract determines its validity, looks only to the internal law and not the conflict-of-laws rules of the foreign jurisdiction, it enforces the rights not of the parties in the case before it but of the parties in some hypothetical case. See Stumberg, Conflict of Laws, 11—12, 228. Constitutionally requiring blind and unvarying application of the internal law of the place of making is a return to outmoded territorial and vested rights theories of conflict of laws long ago outgrown by our jurisprudence.
And see generally, on application of the law of the forum, Ehrenzweig, The Lex Fori—Basic Rule in The Conflict of Laws, 58 Mich.L.Rev. 637.
16
See also McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223; Travelers Health Ass'n v. Commonwealth of Virginia ex rel. State Corporation Comm., 339 U.S. 643, 70 S.Ct. 927, 94 L.Ed. 1154; International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95.
17
Cf. Penagaricano v. Allen Corp., 1 Cir., 267 F.2d 550, 556 where Judge Woodbury, speaking for the Court, said: 'Indeed this ground for declining to exercise jurisdiction (the 'salutary policy of refraining from the unnecessary decision of constitutional questions') has been invoked in so many cases decided by the United States Supreme Court as perhaps to give rise to serious doubt as to whether the lower courts in fact have 'discretion' in this matter.'
18
See, e.g., United States v. Raines, 362 U.S. 17, 21, 80 S.Ct. 519, 523, 4 L.Ed.2d 524 (citing Barrows v. Jackson, 346 U.S. 249, 73 S.Ct. 1031, 97 L.Ed. 1586).
19
1 Cranch 137, 2 L.Ed. 60. See 3 Beveridge, The Life of John Marshall, 132—133, 142; 1 Warren, The Supreme Court in United States History, 242—243. And see Cohens v. Virginia, 6 Wheat. 264, 404, 5 L.Ed. 257, where Chief Justice Marshall said: 'It is most true that this Court will not take jurisdiction if it should not: but it is equally true, that it must take jurisdiction if it should. The judiciary cannot, as the legislature may, avoid a measure because it approaches the confines of the constitution. * * * With whatever doubts, with whatever difficulties, a case may be attended, we must decide it, if it be brought before us.'
20
This case was begun in 1957. The damage was sustained in late 1954 and early 1955. It has taken over a year to have this Court rule on the decision of the Circuit Court below. Remand, some form of transfer of part or all of the case to the state courts, proceedings there and either appeal to this Court again or return to the federal system and eventually return here, might possibly even take 10 years or more. See, e.g., the post-abstention history of the Windsor and Spector cases in Note, Consequences of Abstention by a Federal Court, 73 Harv.L.Rev. 1358 (1960).
21
There is a view, ably and clamorously urged by many, that would consider the canon of constitutional avoidance as so broad that it practically would be impossible ever to reach a constitutional question. Should this view wholly prevail, the great decision of Marbury v. Madison, 1 Cranch 137, 2 L.Ed. 60, might just as well not have been written. In that opinion Chief Justice Marshall said:
'The very essence of civil liberty certainly consists in the right of every individual to claim the protection of the laws, whenever he receives an injury. One of the first duties of government is to afford that protection.' Id., 1 Cranch at page 163.
For a general discussion of judicial restraint and this Court's powers of review, see C. L. Black, The People and The Court (1960), passim, particularly c. IV.
22
Five cases last Term include full discussions of the policy of federal courts of waiting for state court determinations. Martin v. Creasy, 360 U.S. 219, 79 S.Ct. 1034, 3 L.Ed.2d 1186; Allegheny County v. Frank Mashuda Co., 360 U.S. 185, 79 S.Ct. 1060, 3 L.Ed.2d 1163; Harrison v. NAACP, 360 U.S. 167, 79 S.Ct. 1025, 3 L.Ed.2d 1152; Lassiter v. Northampton County Bd. of Elections, 360 U.S. 45, 79 S.Ct. 985, 3 L.Ed.2d 1072; Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25, 79 S.Ct. 1070, 3 L.Ed.2d 1058.
See generally, Wright, The Abstention Doctrine Reconsidered, 37 Tex.L.Rev. 815, Note, 59 Col.L.Rev. 749.
23
See opinion of the Court, 363 U.S. at page 213, 80 S.Ct. at page 1226, note 3; Vestal, The Certified Question of Law, 36 Iowa L.Rev. 629, 643; Note, 73 Harv.L.Rev. 1358, 1368, n. 68; Stern, Conflict of Laws, 12 U.Miami L.Rev. 383, 397 (1958); Kurland, Toward A Cooperative Judicial Federalism, 24 F.R.D. 481, 489. Cf. Fla.App. Rule 4.6, 31 Fla.Stat.Ann., 1959 Cum.Pocket Part.
24
The statutory authorization giving the State Supreme Court the power to entertain certified questions, first enacted in 1945, Fla.Laws 1945, c. 23098, § 1, was 'perfected' in 1957, Fla.Laws 1957, c. 57—274, § 1. See Stern, Conflict of Laws, 12 U.Miami L.Rev. 383, 395 (1958).
| 89
|
363 U.S. 405
80 S.Ct. 1139
4 L.Ed.2d 1299
Diamond KIMM, Petitioner,v.George K. ROSENBERG, District Director, Immigration and Naturalization Service.
No. 139.
Argued May 16 and 17, 1960.
Decided June 13, 1960.
Mr. Joseph Forer, Washington, D.C., for petitioner.
Mr. John F. Davis, Washington, D.C., for respondent.
PER CURIAM.
1
Petitioner applied for suspension of an order directing his deportation to Korea or permitting his voluntary departure. He does not question the validity of the deportation order, but contends that he is within the eligible statutory class whose deportation may be suspended at the discretion of the Attorney General. § 19(c) of the Immigration Act of 1917, as amended. Relief on this score was denied on the basis that the Attorney General has no power to exercise his discretion in that regard since petitioner failed to prove his eligibility under that section and the Internal Security Act of 1950.
2
Before the hearing officer, petitioner was asked if he was a member of the Communist Party. He refused to answer, claiming the Fifth Amendment privilege against self-incrimination. The officer refused the suspension on the grounds that petitioner had failed to prove that he was a person of good moral character and that he had not met the statutory requirement of showing that he was not a member of or affiliated with the Communist Party. The Board of Immigration Appeals affirmed on the latter ground, as did the Court of Appeals. Kimm v. Hoy, 263 F.2d 773.
3
Petitioner contends that he presented 'clear affirmative evidence' as to eligibility which stands uncontradicted and that the burden was on the Government to show his affiliations, if any, with the Party. He contends that the disqualifying factor of Communist Party membership is an exception to § 19(c) which the Government must prove. We think not. Rather than a proviso, it is an absolute disqualification, since that class of aliens is carved out of the section at its very beginning by the words 'other than one to whom subsection (d) of this section is applicable.1 Subsection (d)2 referred to aliens deportable under the Act of October 16, 1918. Section 22 of the Internal Security Act of 1950 amended the 1918 Act to include Communists,3 and thus terminated the discretionary authority under § 19(c) as to any alien who was deportable because of membership in the Communist Party. Petitioner offered no evidence on this point, although the regulations place on him the burden of proof as to 'the statutory requirements precedent to the exercise of discretionary relief.' 8 CFR, 1949 ed., § 151.3(e), as amended, 15 Fed.Reg. 7638. This regulation is completely consistent with § 19(c). The language of that section, in contrast with the statutory provisions governing deportation, imposes the general burden of proof upon the applicant.
4
It follows that an applicant for suspension, 'a matter of discretion and of administrative grace,' U.S. ex rel. Hintopoulos v. Shaughnessy, 1957, 353 U.S. 72, 77, 77 S.Ct. 618, 621, 1 L.Ed.2d 652, must, upon the request of the Attorney General, supply such information that is within his knowledge and has a direct bearing on his eligibility under the statute. The Attorney General may, of course, exercise his authority of grace through duly delegated agents. Jay v. Boyd, 1956, 351 U.S. 345, 76 S.Ct. 919, 100 L.Ed. 1242. Perhaps the petitioner was justified in his personal refusal to answer—a question we do not pass upon—but this did not relieve him under the statute of the burden of establishing the authority of the Attorney General to exercise his discretion in the first place.
5
Affirmed.
6
Mr. Justice DOUGLAS, with whom The CHIEF JUSTICE and Mr. Justice BLACK concur, dissenting.
7
It has become much the fashion to impute wrongdoing to or do impose punishment on a person for invoking his constitutional rights.1 Lloyd Barenblatt has served a jail sentence for invoking his First Amendment rights. See Barenblatt v. United States, 360 U.S. 109, 79 S.Ct. 1081, 3 L.Ed.2d 1115. As this is written, Dr. Willard Uphaus, as a consequence of our decision in Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090, is in jail in New Hampshire for invoking rights guaranteed to him by the First and Fourteenth Amendments. So is the mathematician, Horace Chandler Davis, who invoked the First Amendment against the House Un-American Activities Committee. Davis v. United States, 6 Cir., 269 F.2d 357. Today we allow invocation of the Fifth Amendment to serve, in effect though not in terms, as proof that an alien lacks the 'good moral character' which he must have under § 19(c) of the Immigration Act in order to become eligible for the dispensing powers entrusted to the Attorney General.
8
The import of what we do is underlined by the fact that there is not a shred of evidence of bad character in the record against this alien. The alien has fully satisfied the requirements of § 19(c) as shown by the record. He entered as a student in 1928 and pursued his studies until 1938. He planned to return to Korea but the outbreak of hostilities between China and Japan in 1937 changed his mind. Since 1938 he has been continuously employed in gainful occupations. That is the sole basis of his deportability.2 The record shows no criminal convictions, nothing that could bring stigma to the man. His employment since 1938 has been as manager of a produce company, as chemist, as foundry worker, and as a member of O.S.S. during the latter part of World War II. He also was self-employed in the printing business, publishing a paper 'Korean Independence.' No one came forward to testify that he was a Communist. There is not a word of evidence that he had been a member of the Communist Party at any time. The only thing that stands in his way of being eligible for suspension of deportation by the Attorney General is his invocation of the Fifth Amendment.
9
The statute says nothing about the need of an alien to prove he never was a Communist. If the question of Communist Party membership had never been asked and petitioner had never invoked the Fifth Amendment, can it be that he would still be ineligible for suspension? It is for me unthinkable. Presumption of innocence is too deeply ingrained in our system for me to believe that an alien would have the burden of establishing a negative. What the case comes down to is simply this: invocation of the Fifth Amendment creates suspicions and doubts that cloud the alien's claim of good moral character.
10
Imputation of guilt for invoking the protection of the Fifth Amendment carries us back some centuries to the hated oath ex officio used both by the Star Chamber and the High Commission. Refusal to answer was contempt.3 Thus was started in the English-speaking world the great rebellion against oaths that either violated the conscience of the witness or were used to obtain evidence against him. See Ullmann v. United States, 350 U.S. 422, 445—449, 76 S.Ct. 497, 510—512, 100 L.Ed. 511 (dissenting opinion).
11
I had assumed that invocation of the privilege is a neutral act, as consistent with innocence as with guilt. We pointed out in Slochower v. Board of Education, 350 U.S. 551, 557—558, 76 S.Ct. 637, 641, 100 L.Ed. 692: 'The privilege serves to protect the innocent who otherwise might be ensnared by ambiguous circumstances.' We re-emphasized that view in Grunewald v. United States, 353 U.S. 391, 421, 77 S.Ct. 963, 982, 1 L.Ed.2d 931: 'Recent re-examination of the history and meaning of the Fifth Amendment has emphasized anew that one of the basic functions of the privilege is to protect innocent men.'
12
We went further in Konigsberg v. State Bar, 353 U.S. 252, 267, 77 S.Ct. 722, 730, 1 L.Ed.2d 810, and in Schware v. Board of Bar Examiners, 353 U.S. 232, 246, 77 S.Ct. 752, 760, 1 L.Ed.2d 796, and held that even past membership in the Communist Party was not by itself evidence that the person was of bad moral character.
13
We therefore today make a marked departure from precedent when we attach a penalty for reliance on the Fifth Amendment. The Court in terms does not, and cannot, rest its decision on the ground that by invoking the Fifth Amendment the petitioner gave evidence of bad moral character. Yet the effect of its decision is precisely the same. In so holding we disregard history and, in the manner of the despised oath ex officio, attribute wrongdoing to the refusal to answer. It seems to me indefensible for courts which act under the Constitution to draw an inference of bad moral character from the invocation of a privilege which was deemed so important to this free society that it was embedded in the Bill of Rights.
14
Mr. Justice BRENNAN, with whom The CHIEF JUSTICE and Mr. Justice DOUGLAS join, dissenting.
15
Suspension of deportation may be 'a matter of discretion and of administrative grace,' United States ex rel. Hintopoulos v. Shaughnessy, 353 U.S. 72, 77, 77 S.Ct. 618, 621, but eligibility for suspension, for the exercise of that discretion, is very much a matter of law. McGrath v. Kristensen, 340 U.S. 162, 169, 71 S.Ct. 224, 229, 95 L.Ed. 173. The decision of the Board of Immigration Appeals was that petitioner was not, under the governing statute, eligible for suspension; and on that basis its order must stand or fall in court. Securities & Exchange Comm. v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 459, 87 L.Ed. 626.
16
The only basis of the Appeals Board's determination of ineligibility that the Government seriously defends here is the Board's finding that the petitioner had not shown he was not deportable under §§ 1 and 4 of the Act of October 16, 1918, 40 Stat. 1012, as amended by § 22 of the Internal Security Act of 1950, 64 Stat. 1006, 1008. Those provisions retroactively made deportable an alien who had been a Communist Party member at any time since his entry into the United States; and § 19 of the 1917 Immigration Act, 39 Stat. 889, as later amended,1 under which petitioner's eligibility for suspension was determined, made those aliens who were deportable on that basis ineligible for suspension of deportation.
17
It has not been, and scarcely could be, controverted that the Government must in general bear the burden of demonstrating, in administrative proceedings, the deportability of an alien; whatever the exceptions to this rule may be,2 it was established by the time relevant here that where post-entry misconduct is charged as the basis for deportability, the burden is the Government's. Hughes v. Tropello, 3 Cir., 296 F. 306, 309; Werrmann v. Perkins, 7 Cir., 79 F.2d 467, 469. Here the Government never bore any burden of showing that petitioner was deportable as having been, since his entry, a Communist. The determination of his deportability was made on entirely different grounds; that (as was conceded) he had failed to maintain the student status on the basis of which he had been admitted to the United States. At the hearing on suspension of deportation the Government introduced literally no evidence even remotely suggesting that petitioner had ever been a Communist; and much evidence as to petitioner's good character was introduced. But, apparently at random, and out of the blue, petitioner was asked about membership in the Communist Party; and he declined to answer, citing his constitutional privilege against self-incrimination. On this basis the administrative officials found that he was ineligible for suspension of deportation.
18
If the basis on which it was sought to deport petitioner in the first place was that he was deportable as a Communist or ex-Communist under §§ 1 and 4 of the 1918 Act, as amended, it could hardly be contended that this would be evidence, let alone sufficient evidence, that he was or had been a Communist, on which to base a finding of deportability. Cf. Slochower v. Board of Higher Education, 350 U.S. 551, 76 S.Ct. 637. The provision in § 19 of the 1917 Immigration Act, as amended, which is relied on, disqualifies from suspension an alien who is 'deportable' under the other Act; and one would think the burden of proof of deportability in both circumstances should be the same. The most obvious case, of course, for the application of § 19's disqualification from suspension is the one in which the Government, in the deportation proceedings, has already borne the burden of proving the alien deportable under the amended 1918 Act. It is an anomaly that the burden of proof shifts, there cases to be a requirement of evidence of deportability as a Communist or ex-Communist, and the alien must prove a negative in order to qualify for suspension, when the Government has chosen to base deportation on some other ground. In support of this the Court cites only a regulation which stated in general terms that it was up to the alien to show his eligibility for suspension. 8 CFR, 1949 ed., § 151.3(e), as added, 15 Fed.Reg. 7638.
19
I would think it perfectly plain that such a regulation, as applied in this case, would be contrary to the statutory scheme, properly and responsibly construed.3 In the first place, as I have noted, it turns around the ordinary rules as to the burden of proof as to which party shall show 'deportability.' It requires the alien to prove a negative—that he never was a Communist since he entered the country—when no one has said or intimated that he was. Such proof would necessarily lead to petitioner's bearing the laboring oar in showing that all his political or economic expressions in this country were independent of any covert connection with the Communist Party. The effect of imposing such a burden of exculpation on the exercise, for example, of non-Communist political action on behalf of causes which Communists might also happen to favor is obvious. In fact, on this very basis, we not so long ago struck down a state statute which placed on an individual desiring a tax exemption the burden of proof to show that his political activities were not of a proscribed nature—of a nature, moreover, which we assumed the State had the power directly to proscribe. Speiser v. Randall, 357 U.S. 513, 520, 78 S.Ct. 1332, 1338, 2 L.Ed.2d 1460. We have this Term reaffirmed the central principle of that case, its inhibition on procedural devices which, though designed to reach legitimate ends, impose burdens on the exercise of the freedom of speech, in a subsequent decision, by striking down another state enactment. Smith v. California, 361 U.S. 147, 80 S.Ct. 215, 4 L.Ed.2d 205. On such a basis we declared the enactments of sovereign States unconstitutional; I think we should hardly be less willing to apply the same doctrine to set aside, as not statutorily warranted, a federal administrative regulation which anomalously truns about the ordinary state of the burden of proof as to 'deportability,' and in fact so far dispenses with the ordinary requirement of evidence of 'deportability' that the alien must shoulder the burden of negating it even where the Government has introduced no evidence at all on the issue.
20
We are, apart from construction of the Constitution, responsible for the proper construction of Acts of Congress, and for determining the validity of challenged administrative regulations and procedures under them. Here we are called upon only to put a rational construction upon a federal statute and the allocation of the burden of proof under it, that will promote the statute's internal consistency and minimize its frictions with the First Amendment. One of the relevant enactments, § 22 of the 1950 Internal Security Act, is a harsh one whose constitutionality was upheld here only on historical grounds. See Galvan v. Press, 347 U.S. 522, 530—532, 74 S.Ct. 737, 742—743, 98 L.Ed. 911. By subscribing to the anomalous allocation of the burden of proof here, we increase the statute's harshness, promote the procedural restriction on the freedom of speech which we condemned in Speiser and Smith, and in practical effect, because of the allocation, let this petitioner's invocation of his constitutional privilege be equated with a demonstration of his deportability as to the matters on which he invoked the privilege. I cannot subscribe to a construction that has this effect, and accordingly dissent.
1
Section 19(c) provided, in relevant part:
'In the case of any alien (other than one to whom subsection (d) of this section is applicable) who is deportable under any law of the United States and who has proved good moral character for the preceding five years, the Attorney General may * * * (2) suspend deportation of such alien if he is not ineligible for naturalization * * * if he finds * * * (b) that such alien has resided continuously in the United States for seven years or more and is residing in the United States upon the effective date of this Act. * * *' 8 U.S.C. (1946 ed., Supp. II) § 155(c), now 8 U.S.C.A. § 1254(a)(1, 2).
2
Section 19(d), as amended:
'The provisions of subsection (c) shall not be applicable in the case of any alien who is deportable under (1) the Act of October 16, 1918 (40 Stat. 1008; U.S.C., title 8, sec. 137), entitled 'An Act to exclude and expel from the United States aliens who are members of the anarchist and similar classes', as amended * * *.' 54 Stat. 672, 8 U.S.C. (1946 ed.) § 155(d).
3
The Act of October 16, 1918, c. 186, 40 Stat. 1012, as amended by the Internal Security Act of 1950, c. 1024, § 22, 64 Stat. 1006—1008, provided in pertinent part:
'Any alien who is a member of any one of the following classes shall be excluded from admission into the United States:
'(2) Aliens who, at any time, shall be or shall have been members of any of following classes:
'(C) Aliens who are member of or affiliated with (i) the Communist Party of the United States, (ii) any other totalitarian party of the United States, (iii) the Communist Political Association, (iv) the Communist or other totalitarian party of any State of the United States, of any foreign state, or of any political or geographical subdivision of any foreign state; (v) any section, subsidiary, branch, affiliate, or subdivision of any such association or party; or (vi) the direct predecessors or successors of any such association or party, regardless of what name such group or organization may have used, may now bear, or may hereafter adopt;
'Sec. 4. (a) Any alien who was at the time of entering the United States, or has been at any time thereafter, * * * a member of any one of the classes of aliens enumerated in section 1(2) of this Act, shall, upon the warrant of the Attorney General, be taken into custody and deported * * *.' Now 8 U.S.C.A. §§ 1182(a)(28)(C), 1251(a)(6)(A—C).
1
Meiklejohn, Political Freedom (1960) pp. 154—155, after referring to the efforts of legislative committees to compel Americans to give testimony 'about their political beliefs and affiliations,' goes on to say: '* * * in that filed, the Fifth and the First Amendments are joined together, as their motives have been joined for centuries, in requiring of free citizens and of free institutions that they resist with all their might the irresponsible usurpations of a legislature which would attempt to tell men what they may believe and what they may not believe, with whom they may associate and with whom they may not associate.'
2
Petitioner was admitted as a student pursuant to § 4(e) of the Immigration Act of 1924. 43 Stat. 155, 8 U.S.C. (1946 ed.) § 204(e), now 8 U.S.C.A. § 1101(a)(15)(F).
3
See Maguire, Attack of the Common Lawyers on the Oath Ex Officio As Administered in the Ecclesiatical Courts in England, Essays in History and Political Theory (1936), c. VII, p. 199, at 215, where the procedure of the High Commission is described:
'Thus the defendant swore to answer fully and truly all questions which might be put to him before he knew the charges in detail, and in cases ex officio without knowing the accuser. Either party could produce witnesses who gave their depositions on oath, but in the most important cases ex officio mero the whole trial was based on the answers of the defendant. As in the Star Chamber the judges delivered their opinions seriatim and the decree accorded with the decision of the majority.
'Thus the crux of the procedure was the oath ex officeo. Until the defendant had been sworn, the articles for his examination could not be produced; until he had been examined, the case could not proceed to trial. Refusal or partial answers constituted contempt, followed by imprisonmentf perjury was a cardinal sin.'
1
The suspension provisions, with their reference to deportability under the 1918 Act as a disqualification, were added to the old § 19 through the amendments of 1940 and 1948, 54 Stat. 672, 62 Stat. 1206.
The validity of the proceedings here is to be tested under the law as it stood as of the time of the administrative hearing and review in 1951 and early 1952, before the passage of the Immigration and Nationality Act of 1952, 66 Stat. 163, 8 U.S.C. § 1101 et seq., 8 U.S.C.A. § 1101 et seq., on June 27, 1952. See § 405(a) of the later Act, 66 Stat. 280.
2
Section 23 of the 1924 Immigration Act, 43 Stat. 165, placed the burden on the alien in a deportation proceeding to show that he had been lawfully admitted to the country. The current Act is to the same effect. § 291, 66 Stat. 234, 8 U.S.C. § 1361, 8 U.S.C.A. § 1361. The courts in the cases cited in text drew a sharp distinction between this issue and the matter of deportability owing to post-admission conduct. The failure of Congress to specify other issues on which the alien has the burden is confirmation of the correctness of these decisions. See United States ex rel. Bilokumsky v. Tod, 263 U.S. 149, 153, 44 S.Ct. 54, 55, 68 L.Ed. 221.
3
Section 19(c) in terms imposes a burden of proof on the alien as to his good moral character, but is silent as to the burden of proof otherwise. And it is in § 19(d) that the noneligibility of those deportable under the amended 1918 Act is provided for; and § 19(d) is inexplicit as to the burden of proof. Accordingly, no support for this application of the regulation can be found in § 19(c).
| 12
|
363 U.S. 709
80 S.Ct. 1331
4 L.Ed.2d 1508
CORY CORPORATION et al., Petitioners,v.Ernest J. SAUBER.
No. 436.
Argued May 16, 1960.
Decided June 20, 1960.
Mr. Edwin A. Rothschild, Chicago, Ill., for petitioners.
Mr. Howard A. Heffron, Washington, D.C., for respondent.
PER CURIAM.
1
This suit was instituted by petitioners in the District Court for a refund of excise taxes collected on the sales of two air-conditioning units sold in 1954 and 1955. Section 3405(c) of the Internal Revenue Code of 1939, 26 U.S.C. (1952 ed.) § 3405(c), 26 U.S.C.A. § 3405(c), placed a 10% tax on '(s)elf-contained air-conditioning units.'1 Section 3450 gave the Commissioner, with the approval of the Secretary, power to prescribe needful rules and regulations for the enforcement of the provisions relating to such taxes. Pursuant to this power, the Commissioner published revenue rulings in 19482 and in 19543 holding that the statute taxed air-conditioning units which had certain physical features, were designed for installation in a window or other opening and had 'a total motor horsepower of less than 1 horsepower.' These rulings represented the Commissioner's construction of the Act until a different construction, applied prospectively only, was expressed in regulations issued in 1959.4
2
The parties stipulated that the statute applied only to 'self-contained air conditioning units of the household type' and that each of the two units in question had an actual motor horsepower of one horsepower. The taxpayers contended that the words 'motor horsepower' in the revenue rulings meant actual horsepower; the Government contended that they meant the nominal horsepower given by the manufacturer or 'rated' horsepower assigned on the basis of standards established by trade associations. The District Court construed the revenue rulings as referring to actual, not nominal or rated, horsepower and found, in accordance with the stipulation, that each each of the two units had an actual horsepower in excess of one horsepower. It found additionally that even the 'rated' horsepower of the two units in question was greater than one horsepower. On appeal the Court of Appeals reversed. 7 Cir., 266 F.2d 58; 267 F.2d 802. It did not reach the question as to the meaning of the revenue rulings, for it held that 'household type' was the controlling statutory criterion, that the horsepower of the units is irrelevant to that issue, that the units in question were clearly of the household type because they were 'made to meet the needs of a household,' and that the revenue rulings, insofar as they referred to horsepower, were therefore void. The case is here on petition for a writ of certiorari, 361 U.S. 899, 80 S.Ct. 209, 4 L.Ed.2d 155.
3
There is much said in the briefs and in oral argument about this case as a test case. It is said that taxes on the sale of about 50,000 units turn on this decision. We intimate no opinion as to the taxes on any sales except the two involved here. The only issues before the Court are the construction and validity of the revenue rulings. Hence we do not reach the question as to what other defenses might have been made. Respondent urges in this Court, contrary to the stipulation below, that the statute taxes all self-contained air-conditioning units, not merely those of the household type. We need not consider which view of the statute is correct for under either view we think the horsepower test is a permissible one. We hold that the revenue rulings which were in force from 1948 to 19595 were not void. The factor of horsepower in our opinion may have had some relation to size in the then stage of engineering development and size might well have been relevant to what was then a 'self-contained air-conditioning unit.' There is indeed evidence that the less-than-one-horsepower test was designed to draw the line between household and commercial types of air-conditioning equipment. Moreover, it appears that the rulings in question were issued after consultation with industry representatives, who asserted that horsepower was a factor relevant to the definition of the statutory term as they understood it. The Commissioner consistently adhered to the horsepower test for more than 10 years, and Congress did not change the statute though it was specifically advised in 1956 that that was the test which was being applied.6 We cannot say that such a construction was not a permissible one, cf. Universal Battery Co. v. United States, 281 U.S. 580, 50 S.Ct. 422, 74 L.Ed. 1051, especially where it continued without deviation for over a decade. Cf. United States v. Leslie Salt Co., 350 U.S. 383, 76 S.Ct. 416, 100 L.Ed. 441. The District Court found that 'Among engineers, the horsepower of a motor does not mean its nominal horsepower rating but means the actual horsepower which the motor will deliver continuously under its full normal load.'
4
The Court of Appeals did not reach that question nor review that finding in view of its conclusion that the horsepower test was not valid. Accordingly we remand the case to the Court of Appeals for consideration of that and any other questions which may remain. And we add that our disposition is without prejudice to such action as the lower courts may deem appropriate to prevent taxpayers, should they ultimately prevail, from obtaining a windfall by reason of taxes collected by them but not paid to the Government.
5
Reversed.
6
Mr. Justice FRANKFURTER, dissenting.
7
I would dismiss the writ of certiorari as improvidently granted.
8
The petition urged the substantial question of retroactivity in the Commissioner's exercise of his lawmaking power, in that he attacked in court a prior interpretation by him of the taxing statutes whereby the tax now claimed was not due. As the case finally was presented here no substantial question of retroactivity was presented. Insofar as the retroactivity initially asserted depended upon the reliance of the petitioners, that is apparently governed by § 1108(b) of the Revenue Act of 1926, 44 Stat. 114, 26 U.S.C.A. Int.Rev.Acts, page 319, controlling excise taxation, and is in any event not now in issue, for the petitioners stipulated in the trial court and reiterated here that the Commissioner was in no way 'estopped' to attack the invalidity of the ruling as petitioners and the District Court construed it. Insofar as the retroactivity asserted was the more general unfairness of a change in the Commissioner's interpretation, it cannot be presented in this case because from the start it has been manifest that the ruling is, to say the least, ambiguous (the Commissioner tried to clarify it in 1957) and reasonably susceptible of both interpretations urged for it, so that any judicial determination of its meaning was bound to affect some taxpayers retroactively. Nor was or is there any basis in the record for saying that the Court of Appeals' rejection of the horsepower test in toto was more severely retroactive in its effect than either construction of the ruling might have been.
9
The only other contention presented for review is the substantive statutory determination of the Court of Appeals, as to which that court apparently failed to give due weight to the interpretative function of the Commissioner. In light of the confused and cloudy record in this case, this failure cannot be said to be clearly presented since the Commissioner's approach has resulted in a rule which the Court of Appeals found to be 'inconclusive and uncertain.' (266 F.2d 62.) Had all this been clear from the start, it would have been apparent, to me at least, that, assuming the Court of Appeals to be wrong, there was not such a departure 'from the accepted and usual course of judicial proceedings * * * as to call for an exercise of this court's power of supervision.' Rule 19, par. 1(b), 28 U.S.C.A.
10
Moreover, this litigation bears many of the earmarks of a feigned suit. Despite the desire of the parties to 'test' a question of law, we ought to avoid adjudication in a case with so checkered a course of positions taken by the parties where the particular controversy may well be less than real. The consent required by § 6416(a)(3) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 6416(a)(3), a precondition for this action, was obtained from the attorney and auditor of the petitioners. It is not too broad an inference to say that the petitioners were, in effect, writing their own consent for bringing this suit. Without further proof, such sales and consent hardly establish the immediate interest of the petitioners in the outcome of this lawsuit, i.e., money loss due to an illegal exaction, not some other suit sought to be made to turn upon it, which is a requisite to adjudication. Cf. Atherton Mills v. Johnston, 259 U.S. 13, 15, 42 S.Ct. 422, 423, 66 L.Ed. 814. Responsibility for the confusing shifts of position during litigation which characterize this record may not unfairly be attributed to the extent to which this action was contrived, and to the stipulations affecting the really substantial interests which were apparently the chief concern for using this action as a pilot litigation. Whether or not a case is feigned must ultimately turn on inferences from the record and history of a litigation. The appearance that it may be, even if not demonstrably calling for dismissal of the proceeding, ought to make the Court doubly unwilling to give its judgment on the substantive questions to be dug out of so dubious a litigation on such a record.
11
I would dismiss.
12
Mr. Justice CLARK, whom THE CHIEF JUSTICE and Mr. Justice BLACK join, dissenting.
13
The Congress, in 1941, levied an excise tax on '(s)elf-contained air-conditioning units.' § 3405(c), Internal Revenue Code of 1939. The legislative history shows that the Congress intended the tax to 'apply to all mechanical refrigerators and refrigerating units (including self-contained air-conditioning units) whether of household or other type.' H.R.Rep. No. 1040, 77th Cong., 1st Sess., p. 32. In 1948, the Commissioner issued a ruling, reissued in 1954, which defined self-contained air-conditioning units as those with 'a total motor horsepower of less than 1 horsepower.'
14
This suit involves only two self-contained air-conditioning units, but by stipulation of the parties it is a 'proto-type or test' case to determine the extent of the coverage of the excise tax under § 3405(c) as to self-contained air-conditioning units. Petitioners contend that 'total motor horsepower' as used in the rulings meant actual horsepower rather than that for which the motor is rated by the manufacturer. It was stipulated that each unit had over one actual horsepower, but a manufacturer's rating of three-fourths horsepower. The Government contended that an interpretation that actual horsepower applied would make the rulings 'fly in the face of the statute.' It argued that the ruling should be interpreted 'in (consonance) with the statute so as not to require the Court to strike down the ruling as a nullity and as something that is unreasonable, void, and of no effect.'1 This, the Government asserted, required that 'total motor horsepower' be interpreted as manufacturer's rated horsepower. The trial court, however, enforced the rulings as requiring the application of the actual horsepower test. The Court of Appeals reversed, holding that the horsepower test was not permissible under the statute, and that the rulings were void.
15
The Government's contention that the statute covers all self-contained air-conditioning units is brushed aside by this Court with a finding that such a position is 'contrary to the stipulation' which declares the statute restricted to units of the 'household type.' The Court finds that it 'need not consider which view of the statute is correct for under either view we think the horsepower test is a permissible one.' It holds that the rulings 'were not void.' Thus, despite the fact that § 3405(c) refers solely to '(s)elf-contained air-conditioning units' and fails to mention 'household type,' the Court refuses to resolve this question of statutory construction raised by the Government. It simply remands the case to the Court of Appeals for a determination of whether the ruling meant by its language to refer to actual horsepower, as the District Court found, or to the manufacturer's rated horsepower as posted on the motor itself. I cannot see how any horsepower test under the rulings would be permissible, since it is not mentioned in the statute and is entirely inconsistent with the statute's full coverage. This test was formulated by the industry in meetings that culminated in a letter from the York Corporation to the Commissioner. This letter revealed that York considered the language '(s)elf-contained air-conditioning units' as used in § 3405(c) to mean 'exactly what the common everyday accepted usage of the term implies—the unit must be complete within itself.' The suggested definition which York made was later promulgated in almost identical language by the Commissioner. York represented it to be 'sufficiently broad in its scope to include without exception all self-contained air conditioning units which are now being manufactured.' Petitioners admit that they were 'at all times material hereto engaged in the manufacture and sale of self-contained air conditioning units.' It is further admitted that the units involved here were self-contained ones, 'in the sense that all the works are in the same box.' They certainly came within the terms of § 3405(c) as reflected in the York representations. If these representations brought about an erroneous ruling inconsistent with § 3405(c), then it is void and we should so declare it, as did the Court of Appeals.
16
Finally, these rulings do not have the force of regulations, and, as petitioners admit, they cannot 'overrule a statute.' However, if the manufacturer does not collect the tax on a sale because of his reliance on a ruling of the Commissioner holding the sale nontaxable, then '(n)o tax shall be levied, assessed, or collected' on that sale. § 1108(b), Revenue Act of 1926.2 It follows that if the petitioners did not collect the tax imposed by § 3405(c) because of the Commissioner's rulings, no tax can now be levied or collected on the same. The Government specifically concedes that if respondents 'had relied to their detriment—by treating as nontaxable the sale of units with an actual horsepower output of one or more (which is the interpretation placed on the ruling by petitioners and the trial court)—they would be protected (under § 1108(b)) against any retroactive change in administrative position.' Conversely, if the manufacturer did not rely on the rulings of the Commissioner and collected the tax under § 3405(c), then he could not now interpose invalid rulings to bar the Government's recovery from him of the tax he has already collected.
17
In this connection, no one seems to know to what extent the tax has been collected by the industry. Petitioners now seem to admit that they made substantial collections, and the record discloses that other major manufacturers determined 'taxability * * * by reference to rated horsepower, whether or not the actual horsepower was different therefrom.' It therefore appears that large sums of money have been collected and are now being retained by the manufacturers. This case is based on only two units, purchased by persons connected with the petitioners. Under the stipulation, nevertheless, the result of this case will control the tax on some 50,000 other units not involved here. While the customers who paid the tax might sue the manufacturer therefor, the likelihood of such actions would be highly remote under the circumstances here.
18
Thus far the Government has received the tax only on the two units involved here. There are no 'consents' save on these same two units—and these consents were obtained from a lawyer and an accountant of the taxpayers. The entire record and course of this litgation are cloudy, and the parties cannot even agree as to what they 'agreed' upon in their stipulations. In light of these circumstances, I think it highly unfortunate that today the Court should enter an order which may permit the manufacturers to keep as a windfall considerable amounts they have charged their customers for 'excise taxes.'
1
This was re-enacted in § 4111 of the 1954, Code, 26 U.S.C. § 4111, 26 U.S.C.A. § 4111.
2
S.T. 934, 1948—2 Cum.Bull. 180.
3
Rev.Rul. 54—462, 1954—2 Cum.Bull. 410.
4
This test of horsepower was excluded from the Treasury Regulations promulgated in 1959 under the 1954 Code by T.D. 6423, 1959—2 Cum.Bull. 282.
5
See notes 2 and 3, supra.
6
Hearings, Subcommittee, House Ways and Means Committee on Excise Taxes, 84th Cong., 2d Sess. 163—165.
1
See R. pp. 130—132
2
§ 1108(b) of the Revenue Act of 1926, c. 27, 44 Stat. 9, 114:
'No tax shall be levied, assessed, or collected * * * on any article sold or leased by the manufacturer, * * * if at the time of the sale or lease there was an existing ruling, regulation, or Treasury decision holding that the sale or lease of such article was not taxable, and the manufacturer, * * * parted with possession or ownership of such article, relying upon the ruling, regulation, or Treasury decision.'
| 1112
|
363 U.S. 564
80 S.Ct. 1343
4 L.Ed.2d 1403
UNITED STEELWORKERS OF AMERICA, Petitioner,v.AMERICAN MANUFACTURING CO.
No. 360.
Argued April 27, 1960.
Decided June 20, 1960.
Mr. David E. Feller, Washington, D.C., for petitioner.
Mr. John S. Carriger, Chattanooga, Tenn., for respondent.
Opinion of the Court by Mr. Justice DOUGLAS, announced by Mr. Justice BRENNAN.
1
This suit was brought by petitioner union in the District Court to compel arbitration of a 'grievance' that petitioner, acting for one Sparks, a union member, had filed with the respondent, Sparks' employer. The employer defended on the ground (1) that Sparks is estopped from making his claim because he had a few days previously settled a workmen's compensation claim against the company on the basis that he was permanently partially disabled, (2) that Sparks is not physically able to do the work, and (3) that this type of dispute is not arbitrable under the collective bargaining agreement in question.
2
The agreement provided that during its term there would be 'no strike,' unless the employer refused to abide by a decision of the arbitrator. The agreement sets out a detailed grievance procedure with a provision for arbitration (regarded as the standard form) of all disputes between the parties 'as to the meaning, interpretation and application of the provisions of this agreement.'1
3
The agreement reserves to the management power to suspend or discharge any employee 'for cause.'2 It also contains a provision that the employer will employ and promote employees on the principle of seniority 'where ability and efficiency are equal.'3 Sparks left his work due to an injury and while off work brought an action for compensation benefits. The case was settled, Sparks' physician expressing the opinion that the injury had made him 25% 'permanently partially disabled.' That was on September 9. Two weeks later the union filed a grievance which charged that Sparks was entitled to return to his job by virtue of the seniority provision of the collective bargaining agreement. Respondent refused to arbitrate and this action was brought. The District Court held that Sparks, having accepted the settlement on the basis of permanent partial disability, was estopped to claim any seniority or employment rights and granted the motion for summary judgment. The Court of Appeals affirmed, 264 F.2d 624, for different reasons. After reviewing the evidence it held that the grievance is 'a frivolous, patently baseless one, not subject to arbitration under the collective bargaining agreement.' Id., at page 628. The case is here on a writ of certiorari, 361 U.S. 881, 80 S.Ct. 152, 4 L.Ed.2d 118.
4
Section 203(d) of the Labor Management Relations Act, 1947, 61 Stat. 154, 29 U.S.C. § 173(d), 29 U.S.C.A. § 173(d), states, 'Final adjustment by a method agreed upon by the parties is hereby declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective-bargaining agreement. * * *' That policy can be effectuated only if the means chosen by the parties for settlement of their differences under a collective bargaining agreement is given full play.
5
A state decision that held to the contrary announced a principle that could only have a crippling effect on grievance arbitration. The case was International Ass'n of Machinists v. Cutler-Hammer, Inc., 271 App.Div. 917, 67 N.Y.S.2d 317, affirmed 297 N.Y., 519, 74 N.E.2d 464. It held that 'If the meaning of the provision of the contract sought to be arbitrated is beyond dispute, there cannot be anything to arbitrate and the contract cannot be said to provide for arbitration.' 271 App.Div. at page 918, 67 N.Y.S.2d at page 318. The lower courts in the instant case had a like preoccupation with ordinary contract law. The collective agreement requires arbitration of claims that courts might be unwilling to entertain. In the context of the plant or industry the grievance may assume proportions of which judges are ignorant. Yet, the agreement is to submit all grievances to arbitration, not merely those that a court may deem to be meritorious. There is no exception in the 'no strike' clause and none therefore should be read into the grievance clause, since one is the quid pro quo for the other.4 The question is not whether in the mind of the court there is equity in the claim. Arbitration is a stabilizing influence only as it serves as a vehicle for handling any and all disputes that arise under the agreement.
6
The collective agreement calls for the submission of grievances in the categories which it describes, irrespective of whether a court may deem them to be meritorious. In our role of developing a meaningful body of law to govern the interpretation and enforcement of collective bargaining agreements, we think special heed should be given to the context in which collective bargaining agreements are negotiated and the purpose which they are intended to serve. See Lewis v. Benedict Coal Corp., 361 U.S. 459, 468, 80 S.Ct. 489, 495, 4 L.Ed.2d 442. The function of the court is very limited when the parties have agreed to submit all questions of contract interpretation to the arbitrator. It is confined to ascertaining whether the party seeking arbitration is making a claim which on its face is governed by the contract. Whether the moving party is right or wrong is a question of contract interpretation for the arbitrator. In these circumstances the moving party should not be deprived of the arbitrator's judgment, when it was his judgment and all that it connotes that was bargained for.
7
The courts, therefore, have no business weighing the merits of the grievance,5 considering whether there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim. The agreement is to submit all grievances to arbitration, not merely those which the court will deem meritorious. The processing of even frivolous claims may have therapeutic values of which those who are not a part of the plant environment may be quite unaware.6
8
The union claimed in this case that the company had violated a specific provision of the contract. The company took the position that it had not violated that clause. There was, therefore, a dispute between the parties as to 'the meaning, interpretation and application' of the collective bargaining agreement. Arbitration should have been ordered. When the judiciary undertakes to determine the merits of a grievance under the guise of interpreting the grievance procedure of collective bargaining agreements, it usurps a function which under that regime is entrusted to the arbitration tribunal.
9
Reversed.
10
Mr. Justice FRANKFURTER concurs in the result
11
Mr. Justice WHITTAKER, believing that the District Court lacked jurisdiction to determine the merits of the claim which the parties had validly agreed to submit to the exclusive jurisdiction of a Board of Arbitrators (Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 923, 1 L.Ed.2d 972), concurs in the result of this opinion.
12
Mr. Justice BLACK took no part in the consideration or decision of this case.
13
Mr. Justice BRENNAN, with whom Mr. Justice HARLAN joins, concurring.
14
While I join the Court's opinions in Nos. 443, 360 and 538, I add a word in Nos. 443 and 360.
15
In each of these two cases the issue concerns the enforcement of but one promise—the promise to arbitrate in the context of an agreement dealing with a particular subject matter, the industrial relations between employers and employees. Other promises contained in the collective bargaining agreements are beside the point unless, by the very terms of the arbitration promise, they are made relevant to its interpretation. And I emphasize this, for the arbitration promise is itself a contract. The parties are free to make that promise as broad or as narrow as they wish, for there is no compulsion in law requiring them to include any such promises in their agreement. The meaning of the arbitration promise is not to be found simply by reference to the dictionary definitions of the words the parties use, or by reference to the interpretation of commercial arbitration clauses. Words in a collective bargaining agreement, rightly viewed by the Court to be the charter instrument of a system of industrial self-government, like words in a statute, are to be understood only by reference to the background which gave rise to their inclusion. The Court therefore avoids the prescription of inflexible rules for the enforcement of arbitration promises. Guidance is given by identifying the various considerations which a court should take into account when construing a particular clause—considerations of the milieu in which the clause is negotiated and of the national labor policy. It is particularly underscored that the arbitral process in collective bargaining presupposes that the parties wanted the informed judgment of an arbitrator, precisely for the reason that judges cannot provide it. Therefore, a court asked to enforce a promise to arbitrate should ordinarily refrain from involving itself in the interpretation of the substantive provisions of the contract.
16
To be sure, since arbitration is a creature of contract, a court must always inquire, when a party seeks to invoke its aid to force a reluctant party to the arbitration table, whether the parties have agreed to arbitrate the particular dispute. In this sense, the question of whether a dispute is 'arbitrable' is inescapably for the court.
17
On examining the arbitration clause, the court may conclude that it commits to arbitration any 'dispute, difference, disagreement, or controversy of any nature or character.' With that finding the court will have exhausted its function, except to order the reluctant party to arbitration. Similarly, although the arbitrator may be empowered only to interpret and apply the contract, the parties may have provided that any dispute as to whether a particular claim is within the arbitration clause is itself for the arbitrator. Again the court, without more, must send any dispute to the arbitrator, for the parties have agreed that the construction of the arbitration promise itself is for the arbitrator, and the reluctant party has breached his promise by refusing to submit the dispute to arbitration.
18
In American, the Court deals with a request to enforce the 'standard' form of arbitration clause, one that provides for the arbitration of '(a)ny disputes, misunderstandings, differences or grievances arising between the parties as to the meaning, interpretation and application of * * * this agreement * * *.' Since the arbitration clause itself is part of the agreement, it might be argued that a dispute as to the meaning of that clause is for the arbitrator. But the Court rejects this position, saying that the threshold question, the meaning of the arbitration clause itself, is for the judge unless the parties clearly state to the contrary. However, the Court finds that the meaning of that 'standard' clause is simply that the parties have agreed to arbitrate any dispute which the moving party asserts to involve construction of the substantive provisions of the contract, because such a dispute necessarily does involve such a construction.
19
The issue in the Warrior case is essentially no different from that in American, that is, it is whether the company agreed to arbitrate a particular grievance. In contrast to American, however, the arbitration promise here excludes a particular area from arbitration—'matters which are strictly a function of management.' Because the arbitration promise is different, the scope of the court's inquiry may be broader. Here, a court may be required to examine the substantive provisions of the contract to ascertain whether the parties have provided that contracting out shall be a 'function of management.' If a court may delve into the merits to the extent of inquiring whether the parties have expressly agreed whether or not contracting out was a 'function of management,' why was it error for the lower court here to evaluate the evidence of bargaining history for the same purpose? Neat logical distinctions do not provide the answer. The Court rightly concludes that appropriate regard for the national labor policy and the special factors relevant to the labor arbitral process, admonish that judicial inquiry into the merits of this grievance should be limited to the search for an explicit provision which brings the grievance under the cover of the exclusion clause since 'the exclusion clause is vague and arbitration clause quite broad.' The hazard of going further into the merits is amply demonstrated by what the courts below did. On the basis of inconclusive evidence, those courts found that Warrior was in no way limited by any implied covenants of good faith and fair dealing from contracting out as it pleased—which would necessarily mean that Warrior was free completely to destroy the collective bargaining agreement by contracting out all the work.
20
The very ambiguity of the Warrior exclusion clause suggests that the parties were generally more concerned with having an arbitrator render decisions as to the meaning of the contract than they were in restricting the arbitrator's jurisdiction. The case might of course be otherwise were the arbitration clause very narrow, or the exclusion clause quite specific, for the inference might then be permissible that the parties had manifested a greater interest in confining the arbitrator; the presumption of arbitrability would then not have the same force and the Court would be somewhat freer to examine into the merits.
21
The Court makes reference to an arbitration clause being the quid pro quo for a no-strike clause. I do not understand the Court to mean that the application of the principles announced today depends upon the presence of a no-strike clause in the agreement.
22
Mr. Justice FRANKFURTER joins these observations.
1
The relevant arbitration provisions read as follows:
'Any disputes, misunderstandings, differences or grievances arising between the parties as to the meaning, interpretation and application of the provisions of this agreement, which are not adjusted as herein provided, may be submitted to the Board of Arbitration for decision. * * *
'The arbitrator may interpret this agreement and apply it to the particular case under consideration but shall, however, have no authority to add to, subtract from, or modify the terms of the agreement. Disputes relating to discharges or such matters as might involve a loss of pay for employees may carry an award of back pay in whole or in part as may be determined by the Board of Arbitration.
'The decision of the Board of Arbitration shall be final and conclusively binding upon both parties, and the parties agree to observe and abide by same. * * *'
2
'The Management of the works, the direction of the working force, plant layout and routine of work, including the right to hire, suspend, transfer, discharge or otherwise discipline any employee for cause, such cause being: infraction of company rules, inefficiency, insubordination, contagious disease harmful to others, and any other ground or reason that would tend to reduce or impair the efficiency of plant operation; and to lay off employees because of lack of work, is reserved to the Company, provided it does not conflict with this agreement. * * *'
3
This provision provides in relevant part:
'The Company and the Union fully recognize the principle of seniority as a factor in the selection of employees for promotion, transfer, lay-off, re-employment, and filling of vacancies, where ability and efficiency are equal. It is the policy of the Company to promote employees on that basis.'
4
Cf. Structural Steel & Ornamental Iron Ass'n. v. Shopmens Local Union, D.C., 172 F.Supp. 354, where the employer sued for breach of the 'no strike' agreement.
5
See New Bedford Defense Products Division v. Local No. 1113, 1 Cir., 258 F.2d 522, 526.
6
Cox, Current Problems in the Law of Grievance Arbitration, 30 Rocky Mt.L.Rev. 247, 261 (1958) writes:
'The typical arbitration clause is written in words which cover, without limitation, all disputes concerning the interpretation or application of a collective bargaining agreement. Its words do not restrict its scope to meritorious disputes or two-sided disputes, still less are they limited to disputes which a judge will consider two-sided. Frivolous cases are often taken, and are expected to be taken, to arbitration. What one man considers frivolous another may find meritorious, and it is common knowledge in industrial relations circles that grievance arbitration often serves as a safety valve for troublesome complaints. Under these circumstances it seems proper to read the typical arbitration clause as a promise to arbitrate every claim, meritorious or frivolous, which the complainant bases upon the contract. The objection that equity will not order a party to do a useless act is outweighed by the cathartic value of arbitrating even a frivolous grievance and by the dangers of excessive judicial intervention.'
| 67
|
363 U.S. 641
80 S.Ct. 1300
4 L.Ed.2d 1462
Hon. Julius H. MINER and Hon. Edwin A. Robson, etc., Petitioners,v.H. Leslie ATLASS.
No. 156.
Argued March 3, 1960.
Decided June 20, 1960.
Mr. Harold A. Liebenson, Chicago, Ill., for petitioners.
Mr. Edward B. Hayes, Chicago, Ill., for respondent.
Mr. Justice HARLAN delivered the opinion of the Court.
1
Certiorari was granted in this case, 361 U.S. 807, 80 S.Ct. 66, 41 L.Ed.2d 57, to review the decision of the Court of Appeals holding that a District Court sitting in admiralty lacked power to order the taking of oral depositions for the purpose of discovery only, and that Rule 32 of the Admiralty Rules of the District Court for the Northern District of Illinois, purporting to authorize the taking of such depositions,1 was invalid for want of authority in the District Court to promulgate it.
2
The issue arose in the following manner: The respondent filed a petition in admiralty seeking exoneration from or limitation of liability for the death by drowning of two seamen employed on a yacht owned by him. The representatives of the deceased seamen, having appeared as claimants, applied to the District Court for an order granting leave to take the depositions of several named persons, including respondent, for the purpose of discovery only. Respondent opposed the motion on the ground that the court had no power to order the taking of depositions in any case not meeting the conditions of R.S. §§ 863—865, the de bene esse statute.2 After argument, petitioner Miner, D.J., granted the claimants' motion, pursuant to local Admiralty Rule 32. Respondent then sought a writ of mandamus or prohibition requiring the vacation of the order of the District Court, and prohibiting Judge Miner, or any other district judge to whom the case might be assigned, from further proceeding under it. A rule to show cause was issued by the Court of Appeals and, after a hearing, the application for extraordinary relief, whose availability in the particular circumstances involved is not challenged before us, was granted. 7 Cir., 265 F.2d 312. For reasons presently to be stated, we have concluded that the Court of Appeals' conclusion was correct, and we affirm its judgment.
3
Counsel for the claimants, representing the petitioners here, undertake to support the discovery-deposition order on the grounds that: (1) a court of admiralty has inherent power, not dependent on any statute or rule, to order the taking of depositions for the purpose of discovery; (2) Rule 32C of this Court's General Admiralty Rules, 28 U.S.C.A., impliedly empowers a district judge to order the taking of such depositions; (3) Rule 32 of the District Court's Admiralty Rules is a valid exercise of its power to regulate local practice, conferred by Rule 44 of the General Admiralty Rules. We consider each contention in turn.
4
The reliance on an asserted inherent power is based almost exclusively on the decision of the Court of Appeals for the Third Circuit in Dowling v. Isthmian S.S. Corp., 184 F.2d 758. In an exhaustive discussion, Judge Fee, for that court, expressed the view that the traditionally flexible and adaptable admiralty practice empowers a court to order a party to submit to pretrial oral examination. Whether or not the decision was intended to embrace examinations solely for discovery purposes is not entirely clear. Compare Standard Steamship Co. v. United States, D.C., 126 F.Supp. 583, with Darling's Estate v. Atlantic Contracting Corp., D.C., 150 F.Supp. 578, 579; 1950 Annual Survey of American Law 523. None of the historical data adduced in the Dowling case seems to go beyond the area of testimony for use at the trial. The opinion states no more than that history discloses no overt rejection of the power to order depositions taken for discovery purposes. 184 F.2d at page 771, note 36. There is no affirmative indication of the exercise of such a power, if any was thought to exist, and the 1940 edition of Benedict on Admiralty unequivocally asserts that '(a)n admiralty deposition may only be taken for the purpose of securing evidence; it may not be taken for the purpose of discovery.' 3 Benedict, Admiralty (Knauth ed.), 34. This statement by a leading work in the field hardly bespeaks the existence of traditional inherent power, and we find none. Cf. Cary v. Curtis, 3 How. 236, 245, 11 L.Ed. 576.
5
Neither can we find in this Court's Admiralty Rules warrant for the entry by a district judge of an order of the character granted below. The deposition practice authorized by the Civil Rules does not of its own force provide the authority sought, since those rules are expressly declared inapplicable to proceedings in admiralty. Civil Rule 81(a)(1). Certain of the Civil Rules were adopted by this Court as part of the Admiralty Rules in the 1939 amendments, 307 U.S. 653. Thus, Civil Rules 33 through 37 were made part of the Admiralty Rules as Rules 31, 32, 32A, 32B, and 32C, respectively.3 However, the remainder of the Civil Rules in Part V, dealing with 'Depositions and Discovery,' including Rule 26, the basic authority for discovery-deposition practice (see note 1, ante), was not adopted. We cannot of course regard this significant omission as inadvertent, cf. 76 A.B.A.Ann.Rep. 565—566; rather, it goes far to establish the lack of any provision for discovery by deposition in the General Admiralty Rules.
6
However, petitioners contend, and some courts have agreed, that the existence of such a power is to be inferred from Rule 32C, the counterpart of Civil Rule 37, entitled, 'Refusal to make discovery: consequences.' That rule details the procedures which are to be followed if 'a party or other deponent refuses to answer any question propounded upon oral examination * * *.' It has been held that the inclusion of this rule must be taken as the expression of an assumption by the Court that the discovery-deposition practice existed or was to be followed in admiralty, for the reason that '(i)t is inconceivable that the Supreme Court, by means of the elaborate and detailed terms of Rule 32C would have given a suitor in admiralty a method of enforcing a right that did not exist.' Brown v. Isthmian S.S. Corp., D.C.E.D.Pa., 79 F.Supp. 701, 702. In accord with the Brown decision are Bunge Corp. v. The Ourania Gournaris, D.C.S.D.N.Y., 1949 A.M.C. 744; Galperin v. United States, D.C.E.D.N.Y., 1949 A.M.C.1907; The Ballantrae, D.C.N.J., 1949 A.M.C. 1999.
7
The dilemma thus suggested—either that we must regard Civil Rule 26 as inadvertently omitted from the Admiralty Rules4 or that we should consider that part of Civil Rule 37 which refers to oral examinations as inadvertently included—is more seeming than real. The reference to 'discovery' in the title to Rule 32C can well have been simply to the modes of discovery authorized by those of the Civil Rules which were carried into the Admiralty Rules in the 1939 amendments, see note 3, ante, and we think it should so be taken. As to the reference to 'oral examination,' we are in agreement with the explanation offered by Judge Rifkind in Mulligan v. United States, D.C., 87 F.Supp. 79, 81, that it comprehends only those forms of oral examinations traditionally recognized in admiralty, primarily the deposition de bene esse (see note 2, ante).5 By this construction, both actions of this Court—the adoption of Civil Rule 37 and the omission of Civil Rule 26—are given harmonious effect.
8
Petitioners' third contention is that, although admiralty courts were not given authority by the General Admiralty Rules to order the taking of depositions for discovery purposes, the District Court in the present case acted pursuant to its own local Admiralty Rule 32 (see note 1, ante) granting such authority, and that such rule was a valid exercise of power conferred on the District Court by Rule 44 of the General Rules. See Ludena v. The Santa Luisa, D.C.S.D.N.Y., 95 F.Supp. 790; Application of A. Pellegrino & Son, D.C.S.D.N.Y., 11 F.R.D. 209; cf. Republic of France v. Belships Co., Ltd., D.C., 91 F.Supp. 912; Prudential Steamship Corp. v. Curtis Bay Towing Co., D.C.Md., 20 F.R.D. 356. Rule 44, entitled 'Right of trial courts to make rules of practice,' provides:
9
'In suits in admiralty in all cases not provided for by these rules or by statute, the District Courts are to regulate their practice in such a manner as they deem most expedient for the due administration of justice, provided the same are not inconsistent with these rules.' (Emphasis added.)
10
We may assume, without deciding, that, the proviso apart, the affirmative grant of authority contained in Rule 44 is sufficiently broad and unqualified, in light of the traditional liberality and flexibility of admiralty practice, to embrace the 'practice' of taking depositions for discovery purposes. Cf. Galveston Dry Dock & Const. Co. v. Standard Dredging Co., 2 Cir., 40 F.2d 442. However, we feel constrained to hold that this particular practice is not consistent with the present General Admiralty Rules and therefore that in this respect local Rule 32 falls within the proviso.6
11
As we have noted, the determination of this Court in 1939 to promulgate some but not all of the Civil Rules relating to discovery must be taken as an advertent declination of the opportunity to institute the discovery-deposition procedure of Civil Rule 26(a) throughout courts of admiralty. It may be, see 76 A.B.A.Ann.Rep. 565—566,7 that one reason for this failure was the belief that this Court could not take over into Admiralty in its entirety Civil Rule 26. The Enabling Act did not then, R.S. § 913, although it does now, 28 U.S.C. § 2073, 28 U.S.C.A. § 2073, authorize the Court to supersede statutes, and the limitations of the de bene esse statute would therefore have overridden Civil Rule 26(d) to the extent the statute was more restrictive. Nevertheless it does seem clear that the part of Civil Rule 26 with which we are now concerned could have been promulgated in admiralty, cf. note 6, ante. But for whatever reason, no action was taken.
12
It is of course true that the failure to adopt Civil Rule 26 implies no more than that this Court did not wish to impose the practice on the District Courts, and does not necessarily bespeak an intention to foreclose each District Court from exercising a 'local option' under Rule 44. We do not deny the logic of this contention; neither do we hold that whenever the General Admiralty Rules deal with part, but not all, of a subject, those practices left unprovided for by the General Rules may not in any circumstances be dealt with by the District Courts under General Rule 44. Unlike many state practice statutes, this Court's rules of admiralty practice for the District Courts are not comprehensive codes regulating every detail of practice, and we would be slow to hold that the interstices may not be the subject of appropriate local regulation. For example, rules fixing the time for doing certain acts are of the essence of orderly procedure. So long as the time set be not unreasonable, it is less important what the limit be than that there be a rule whereby some timetable may be known to the profession. Thus, the failure of the General Admiralty Rules to prescribe a time within which motions for rehearing may be filed should not bar a District Court from fixing such a time limit. See Papanikolaou v. Atlantic Freighters, 4 Cir., 232 F.2d 663, 665. Similarly, the General Admiralty Rules provide no answer to the question whether one sued for a certain sum, who contests his liability for but a portion of that sum, may be required to suffer a judgment for the remainder prior to trial on the contested portion, and there is no compelling reason why that lack should be held to prevent a District Court from supplying an answer by local rule. See Galveston Dry Dock & Const. Co. v. Standard Dredging Co., supra.
13
We deal here only with the procedure before us, and our decision is based on its particular nature and history. Discovery by deposition is at once more weighty and more complex a matter than either of the examples just discussed or others that might come to mind. Its introduction into federal procedure was one of the major achievements of the Civil Rules, and has been described by this Court as 'one of the most significant innovations' of the rules. Hickman v. Taylor, 329 U.S. 495, 500, 67 S.Ct. 385, 388, 91 L.Ed. 451. Moreover, the choice of procedures adopted to govern various specific problems arising under the system was in some instances hardly less significant than the initial decision to have such a system. It should be obvious that we are not here dealing either with a bare choice between an affirmative or a negative answer to a narrow question, or even less with the necessary choice of a rule to deal with a problem which must have an answer, but need not have any particular one. Rather, the matter is one which, though concededly 'procedural,' may be of as great importance to litigants as many a 'substantive' doctrine, and which arises in a field of federal jurisdiction where nationwide uniformity has traditionally always been highly esteemed.
14
The problem then is one which peculiarly calls for exacting observance of the statutory procedures surrounding the rule-making powers of the Court, see 28 U.S.C. § 331, 28 U.S.C.A. § 331 (advisory function of Judicial Conference), 28 U.S.C. § 2073, 28 U.S.C.A. § 2073 (prior report of proposed rule to Congress), designed to insure that basic procedural innovations shall be introduced only after mature consideration of informed opinion from all relevant quarters with all the opportunities for comprehensive and integrated treatment which such consideration affords. Having already concluded that the discovery-deposition procedure is not authorized by the General Admiralty Rules themselves, we should hesitate to construe General Rule 44 as permitting a change so basic as this to be effectuated through the local rule-making power, especially when that course was never reported to Congress8 as would now be required under 28 U.S.C. § 2073, 28 U.S.C.A. § 2073.
15
We are strongly reinforced in our conclusion by the post-1939 history of the question of adoption of discovery-deposition rules in the General Admiralty Rules. In the 1948 revision of the Judicial Code this Court was given the power to supersede statutes, which it lacked in 1939. In 1951 a joint committee representing several leading bar associations proposed the adoption of a rule permitting the taking of the deposition of a party for discovery purposes. See 76 A.B.A.Ann.Rep. 181; Maritime Law Assn., Doc. No. 348 (Sept. 1951). No action was taken. In 1953 it was recommended that Rule 26(a) be made applicable to proceedings in admiralty, with two minor modifications; this would of course have permitted discovery by deposition of witnesses as well as parties. Maritime Law Assn., Doc. No. 369 (Apr. 1953). Again no action was taken. We do not think this failure to enact the proposed amendments can be explained away by suggesting that the widespread local adoption of rules similar to the local rule now before us9 was thought to render amendment of the General Rules unnecessary, for local rules, by virtue of the inability of the District Courts to supersede statutes, cannot deal with the matter of the taking and use of depositions as an integrated whole. See Mercado v. United States, 2 Cir., 184 F.2d 24.
16
It hardly need be added that our decision here in no way implies any view as to the desirability or undesirability of having a discovery-deposition procedure in admiralty cases. Those who advise the Court with respect to the exercise of its rule-making powers—more particularly of course the Judicial Conference of the United States (28 U.S.C. § 331, 28 U.S.C.A. § 331) and the newly created Advisory Committee on the General Admiralty Rules, which it is to be hoped will give the matter their early attention—are left wholly free to approach the question of amendment of the discovery provisions of the rules in the light of whatever considerations seem relevant to them, including of course the experience gained by the District Courts which have had rules similar to the Local Rule here challenged. Nor would anything we have said prevent those bodies from recommending that the matter of discovery-depositions be left to local rule making. All we decide in the existing posture of affairs is that the matter of discovery-depositions is not presently provided for in the General Admiralty Rules or encompassed within the local rule-making power under General Rule 44.
17
Affirmed.
18
Mr. Justice BRENNAN, with whom Mr. Justice DOUGLAS and Mr. Justice STEWART join, dissenting.
19
The Court today strikes down a local admiralty rule which has counterparts in District Courts throughout the country. In fact, the statistics of the most recent fiscal year in the experience of the federal courts indicate that over half the admiralty litigation in the federal courts is conducted in courts having discovery-deposition rules like the one today nullified.1 I cannot agree to a judgment which lightly brings about so widespread a turning back of the clock in the admiralty practice throughout the Nation.
20
I agree with the Court that the first and second contentions of the petitioners, on which reliance is put that the judgment should be reversed, are not well taken;2 but I must dissent from the Court's rejection of the third, and truly substantial, contention of petitioners. This is that the order for discovery depositions made here was sanctioned by the District Court's local Admiralty Rule 32 and that that rule is a valid exercise of the District Court's rulemaking power. There is no doubt that the order in question was authorized by the local rule; and so the only question is of the rule's validity. The question is one of power; and to me the Court's opinion fails completely to demonstrate a lack of power to promulgate the rule in question in this District Court and the many District Courts having a very substantial admiralty business which have adopted similar rules. The local rule was promulgated under authority of this Court's General Admiralty Rule 44, which provides:
21
'Rule 44. Right of trial courts to make rules of practice.
22
'In suits in admiralty in all cases not provided for by these rules or by statute, the district courts are to regulate their practice in such a manner as they deem most expedient for the due administration of justice, provided the same are not inconsistent with these rules.'
23
The authority established by General Admiralty Rule 44, under this Court's statutory powers, is separate in form and different in expression from the general statutory authority of the District Courts, with the other federal courts, to make 'rules for the conduct of their business.' 28 U.S.C. § 2071, 28 U.S.C.A. § 2071.3 Whatever the precise content of § 2071, I think as a separate authority General Admiralty Rule 44 must be read separately as a grant of power to the District Courts to make admiralty rules of procedure effective as to actions within them, subject only to the limitations specified in the rule or otherwise implicit in law. This seems to be the obvious meaning of the rule, and it should be taken at its face value. See Papanikolaou v. Atlantic Freighters, Ltd., 4 Cir., 232 F.2d 663, 665; Galveston Dry Dock & Construction Co. v. Standard Dredging Co., 2 Cir., 40 F.2d 442, 444.4 Cf. British Transport Commission v. United States, 354 U.S. 129, 138, 77 S.Ct. 1103, 1107, 1 L.Ed.2d 1234. Civil Rule 83 is quite similar in concept, and appears to be given a comparable interpretation. Russell v. Cunningham, 9 Cir., 233 F.2d 806, 811; 7 Moore, Federal Practice (2ed ed.), 83.03. Cf. United States v. Hvass, 355 U.S. 570, 575, 78 S.Ct. 501, 504, 2 L.Ed.2d 496.
24
Clearly a rule providing for discovery by way of deposition practice is one regulating procedure. See Sibbach v. Wilson & Co., 312 U.S. 1, 61 S.Ct. 422, 85 L.Ed. 479. The Court does not venture to deny this. Of course this procedural rule may be as important as many a 'substantive' doctrine, but there is nothing in General Rule 44 confining the local rulemaking power to exercises in the trivial. Hence the District Court rule is prima facie valid (as the Court apparently admits), and we must examine whether it is invalidated by reason of conflict with some rule promulgated by this Court, or some statute. No statute precludes the local rule;5 but the court holds that it is precluded by some of this Court's General Admiralty Rules. The Court gingerly draws some support from the circumstance that the amendatory Admiralty Rules promulgated by this Court in 1939—General Admiralty Rules 31 through 32C—incorporated some of the Civil Rules' discovery devices but not others. On this basis it is concluded that the District Courts are precluded from adopting local rules that establish in admiralty the Civil Rules discovery devices not adopted in the General Admiralty Rules—such as Civil Rule 26.6 But certainly this negative inference does not follow. This Court's promulgation of General Admiralty Rules 31 through 32C made the observance of those rules, counterparts of Civil Rules as they were, mandatory on the District Courts. As to those Civil Rules dealing with discovery and pretrial practice that were not adopted by General Admiralty Rules, the inference is obvious that they were not made mandatory upon the District Courts; but it does not follow that the District Courts' power under General Admiralty Rule 44 in regard to local rules was lessened. This Court decided that the rules it promulgated in the discovery area were enough for the time being as General Admiralty Rules; but there is not a word in the rules that inhibits the District Courts from going further if they desire. The test of General Rule 44 is simply whether the local rules are 'not inconsistent' with the general. There is not a word in the General Rules indicating that their discovery devices shall constitute the only ones permissible.7 Howe then does the Court come to a contrary conclusion?
25
The Court's basic reason, it appears, why this local rule is to be held void under the negative implications of the 1939 amendments to the General Admiralty Rules, is that it was not promulgated with the safeguards provided for in the current General Admiralty Rules Enabling Act. 28 U.S.C. § 2073, 28 U.S.C.A. § 2073; see also 28 U.S.C. § 331, 28 U.S.C.A. § 331 (advisory function of Judicial Conference). There are many answers to this contention. Perhaps the most basic is that these safeguards are relevant only to General Admiralty Rules—rules which are promulgated by this Court, and whose observance is mandatory in admiralty throughout the country. The statutes that ordain those safeguards do not require them of local rules; and this reflects the difference in Congress' approach between rulemaking carried on on a local basis, and General Rule-making, which ends all forms of local innovations and prescribes a rule for the whole country.8 If the District Court for the Northern District of Illinois had attempted to promulgate a rule for the whole country, the Court's observations would have some point.
26
Furthermore, one of the protective provisions—the provision for Judicial Conference advice (which is not mandatory even on this Court, incidentally)—was not even in effect as to General Rules at the time this local rule was adopted.9 And the General Admiralty Rules additions of 1939, which introduced sweeping liberalizations of discovery practice, and which the Court finds preclusive of this supplementary local rule, were promulgated with none of these safeguards—with no advisory report at all, and with no submission to Congress. Yet there is no doubt as to their validity. The reason of course is that there was no statutory requirement for the use of these procedures; the Court had the power to promulgate these rules without them. And unquestionably in 1939 this Court could have promulgated a General Rule in the terms of the local rule here.10 By the same token, so did the District Court, under General Admiralty Rule 44, which stood side-by-side with the 1939 amendments, have the power to make this local rule without reference to Congress; there was no statute requiring it to make such a reference and in fact no procedure by which the reference could have been made. The local rule may be one providing for a 'basic' change in procedure, but it is still a local rule; it was validly authorized by General Admiralty Rule 44 to be promulgated, as local rules may be promulgated, without reference to Congress; and I think we break faith with the District Courts when we give them a power which we later declare to be a mirage.
27
The court finds support for its position from the fact that this Court has never promulgated a General Rule for deposition-discovery since 1948, when it received the power to supersede statutes in the exercise of its General Admiralty Rule-making power. To be sure, Civil Rule 26 then could have been promulgated in admiralty by this Court (as it could not have been before, in toto). But the local rule, which does not contain any provision contrary to existing statutes,11 was not dependent on any such power. It did not require the exercise of a power reserved exclusively to this Court. And the failure of this Court to promulgate a General Rule in the post-1948 era hardly reflects on the validity of the local rules. Perhaps this Court thought that the time was not ripe for a General Rule; that the problem for a while was best approached through local experimentation. Certainly there does not have to be evidence that the Court thought the local rules made the promulgation of a General Rule 'unnecessary,' as the Court today intimates. For the local rule to be valid, it is enough that it have been promulgated within the scope of the District Court's authority. It is not a prerequisite on the validity of a local rule that it make General Rules unnecessary. Obviously this is one of the intrinsic differences between a local rule and a General Rule.12
28
The Court's holding stops up one of the most plentiful sources of reform and revision of the General Admiralty Rules; a source very relevant to revision of the discovery rules. In developing the Civil Discovery Rules, there was a great body of state court experience with discovery depositions on which to draw, and Civil Rule 26's formulators drew upon it. See 4 Moore, Federal Practice (2d ed.), 26.01. If there is consideration whether Civil Rule 26, or a comparable provision, should be promulgated as a General Admiralty Rule, the question will occur whether the discovery deposition procedure is suitable to the particular problems of the admiralty court. State court and Federal Civil Rules experience may arguably not be of great value here. For example, there has been opposition to a general rule making the Civil Rules applicable in admiralty to cases unprovided for in the other Admiralty Rules by those who argue that the problems of admiralty are so unique that the Civil Rules will fit badly. See Report of the Standing Committee on Admiralty and Maritime Law, American Bar Association, in 76 Ann.Rep.A.B.A. (1951), pp. 182—183. It would appear difficult either to evaluate the correctness of this attitude, or to investigate which civil rules would work well in admiralty, without some District Court experience in applying them. If it is being held that, every time this Court's General Admiralty Rules deal with a general subject, all parts of the subject, though untouched by the General Rules, become insulated from further rulemaking by the District Courts, the most fruitful source, and perhaps the only valid source, of experience as to further revision of the General Admiralty Rules would be choked off—the experience of the various District Courts under their local admiralty rules. We should be loath to draw any negative inference from our rules that would produce such a result.
29
We are not apprised how broad the principle of implicit preclusion the Court today establishes may be. It would be pure speculation to attempt to enumerate the local rules which might be struck down on the basis of it because they deal with an important subject matter and there are General Rules which move in the same area as they do. The result is a cloud of uncertain proportions on the local rules.
30
Obviously the Court is greatly influenced by the fact that any local admiralty oral deposition rule must to some extent be a piecemeal effort, because even if discovery can be provided for by local deposition rule, the local rule cannot change the provisions of the de bene esse act regulating admissibility into evidence. So Mercado v. United States, 2 Cir., 184 F.2d 24, holds, and there is no gainsaying its correctness.13 Thus the District Courts themselves cannot give the whole subject of depositions the integrated treatment that the Civil Rules give it, or that an admiralty deposition rule from this Court, with its post-1948 power to supersede statutes, could give it. There is force to this point, but its force is not against the validity of the local rule. I do not see how it affects the power of the District Courts, under General Admiralty Rule 44, to deal with the matter as far as they can. It may have considerable force in indicating that this Court, and those who advise it in this regard,14 should be more careful to examine whether a general rule should be promulgated. But the question here is one of the District Court's power, and to me that seems unimpaired, so long as it is confined to the use of the deposition for discovery.15
31
However well-motivated may be the basis on which the Court today strikes down this rule and the many, many local rules like it, I cannot conclude that its action has any basis in law. It may well be desirable that this Court promulgate a General Rule in the premises, and certainly, informed with this Court's power to supersede statutes, such a rule might provide a better approach to the problem than the local rules can provide. And the area may be one that particularly lends itself to uniform regulation. But if that is so, the answer is for this Court to promulgate such a rule, not to strike down local rules which, within their territorial and statutory limitations, provide some sort of solution for the problem in the interim. This Court has granted local rulemaking power to the District Courts through General Admiralty Rule 44 and Civil Rule 83; and I submit we should not seek to escape the plain consequences of such a grant of power whenever we believe that it has been exercised in an area where we think we could do better. When we do act on admiralty discovery depositions through a General Rule, the local rules will be superseded; and that will be time enough.
32
The Court's action nullifies these many local admiralty discovery-deposition rules, and casts an uncertain cloud over other local admiralty and civil rules. It creates an unfortunate hiatus in the development of discovery in admiralty by postponing the further collection of practical experience on the matter until a General Rule can be produced. I can see no legal reason why the exercise of the District Court's rulemaking powers should not be permitted to go forward, and accordingly I dissent from the judgment affirming the Court of Appeals' issuance of the extraordinary writs.
1
Local Rule 32 provides that the 'taking and use of depositions of parties and witnesses shall be governed by the Federal Rules of Civil Procedure except as otherwise provided by statute and except that their use' is limited as set forth in the rule. Rule 26(a) of the Civil Rules, 28 U.S.C.A., permits the taking of 'the testimony of any person, including a party, by deposition upon oral examination * * * for the purpose of discovery or for use as evidence in the action or for both purposes,' subject to limitations as to use of such depositions set forth in Rule 26(d).
2
This statute, as amended, 31 Stat. 182, is now appliable only to proceedings in admiralty. See note preceding 28 U.S.C. § 1781, 28 U.S.C.A. § 1781. Section 863 permits the taking of the deposition de bene esse of a witness in a pending action, in the following circumstances only:
'* * * when the witness lives at a greater distance from the place of trial than one hundred miles, or is bound on a voyage to sea, or is about to go out of the United States, or out of the district in which the case is to be tried, and to a greater distance than one hundred miles from the place of trial, before the time of trial, or when he is ancient and infirm. * * *'
The deposition is admissible at trial only in the event of the deponent's death, absence from the country, presence at a distance greater than 100 miles from the place of trial, or inability to travel and appear by reason of age, ill health, or imprisonment. R.S. § 865.
3
Civil Rule 33, adopted as Admiralty Rule 31, is entitled, 'Interrogatories to parties'; Civil Rule 34 (Admiralty Rule 32) relates to 'Discovery and production of documents and things for inspection, copying, or photographing'; Civil Rule 35 (Admiralty Rule 32A) authorizes 'Physical and mental examination of persons'; Civil Rule 36 (Admiralty Rule 32B) governs 'Admission of facts and of genuineness of documents'; Civil Rule 37 (Admiralty Rule 32C) deals with 'Refusal to make discovery: consequences.'
4
For reasons stated, 363 U.S. at pages 643—644, 80 S.Ct. at pages 1302—1303, we cannot regard the omission as the result of a so well-settled practice of using depositions for discovery in admiralty that codification was thought unnecessary. See Mulligan v. United States, D.C., 87 F.Supp. 79, 80.
5
Apart from the de bene esse procedure, admiralty practice traditionally utilized the Commission Dedimus Potestatum, the Deposition In Perpetuam Rei Memoriae, and Letters Rogatory. The statutory authority for these procedures, R.S. §§ 866—870, 875, was not repealed until the 1948 codification of the Judicial Code, some years after the 1939 amendments to the Admiralty Rules. For a discussion of them, see 3 Benedict, Admiralty, §§ 397—401.
Judge Rifkind's rejection of the Brown decision has been followed by several district judges. See Kelleher v. United States, D.C.S.D.N.Y., 88 F.Supp. 139; cf. Standard Steamship Co. v. United States, D.C.Del., supra; Gulf Oil Corp. v. Alcoa S.S. Co., D.C.S.D.N.Y., 1949 A.M.C. 1965.
6
We do not find such inconsistency in Admiralty Rule 46, requiring that 'the testimony of witnesses * * * be taken orally in open court, except as otherwise provided by statute, or agreement of parties.' We regard that provision as having been promulgated with reference to the trial and not the discovery stage of the lawsuit. See Republic of France v. Belships Co., Ltd., supra.
For much the same reason, we do not deem the challenged rule inconsistent with the de bene esse statute, note 2, ante. That statute is concerned with the taking of depositions for use at trial, and not for discovery. The limitations on the taking of a deposition are evidently the product of the limitations on use. A discovery-deposition not meeting the conditions of the statute may not be admitted into evidence at the trial, Mercado v. United States, 2 Cir., 184 F.2d 24, but where a deposition is not sought to be taken for use at trial, we see no reason to regard the statute as a bar. See Republic of France v. Belships Co., Ltd., supra.
7
The Bar Association Report, in referring to 'Chief Justice Stone,' is in error. The Chief Justice in 1939 was Charles Evans Hughes.
8
R.S. § 913, the predecessor source of this Court's authority to promulgate admiralty rules, in effect when Rule 44 was adopted, did not, as does 28 U.S.C. § 2073, 28 U.S.C.A. § 2073, require the prior reporting of such rules to Congress.
9
See, e.g., Southern District of New York, Admiralty Rule 32; Southern and Northern Districts of Florida, Admiralty Rule 24; Northern District of California, Admiralty Rule 13, West's Ann.Code. See also Darling's Estate v. Atlantic Contracting Corp., D.C.E.D.Va., supra; Brown v. Isthmian S.S. Corp., D.C.E.D.Pa., supra.
1
In the fiscal year ending June 30, 1959, over half the private admiralty actions filed in the District Courts were brought in districts having rules similar to the one in question here. Local admiralty rules expressly providing for the taking of depositions of witnesses (including nonparty witnesses) in accord with the Civil Rules have been adopted in the Southern District of New York (Admiralty Rule 32); the Northern District of New York (Admiralty Rule 32); the Southern and Northern Districts of Florida (joint Admiralty Rule 24); the Northern District of California (Admiralty Rule 13); and the Western District of Washington (Admiralty Rule 25 and 25A), besides the Northern District of Illinois. In the fiscal year referred to, these districts were responsible for 1,743 of the 3,424 private admiralty actions filed in the District Courts, or 50.9%.
In addition, there are two districts where there is a catchall local admiralty rule making the Federal Rules of Civil Procedure applicable to situations not otherwise provided for. In one of these districts, the local rule is interpreted as allowing discovery depositions. Eastern District of Virginia, Admiralty Rule 24; Darling's Estate v. Atlantic Contracting Corp., D.C., 150 F.Supp. 578, 580. In the other, the rule was apparently promulgated in response to a suggestion by the chief district judge that a local rule on depositions be proposed by a committee for promulgation by the court. Prudential S.S. Corp. v. Curtis Bay Towing Co., D.C., 20 F.R.D. 356, 357 (decided May 9, 1957); District of Maryland, Admiralty Rule 46, promulgated May 9, 1958. These two districts accounted for 170 or 5% of the private admiralty cases filed during the year in question. This with the category of districts just discussed indicates that 55.9% of the private admiralty cases were prosecuted in districts where there existed a local rule making the Civil Rules procedure for discovery deposition available.
In addition, several districts have admiralty rules providing for broadened deposition practice in regard to adverse parties. Eastern District of New York, Admiralty Rule 32; Eastern District of North Carolina, Admiralty Rule 30; Western District of Louisiana, Admiralty Rule 30; Northern District of Ohio, Admiralty Rule 38. In the year in question, these districts accounted for 116 cases filed, or 3.4%.
In other districts, the need for a local rule may have been thought to be obviated by a ruling that General Admiralty Rule 32C implicitly made broadened discovery available, see The Ballantrae, D.C.N.J., 1949 A.M.C. 1999; Brown v. Isthmian S.S. Corp., D.C.E.D.Pa., 79 F.Supp. 701, or by a decision indicating that the practice was available without rule of court, see Dowling v. Isthmian S.S. Corp., 3 Cir., 184 F.2d 758.
For the statistics as to private admiralty cases filed, see Annual Report of the Director of the Administrative Office of the United States Courts for the Fiscal Year ending June 30, 1959, Table C.3. Government admiralty cases are not separately listed as such.
2
These contentions are first, that admiralty courts have inherent power to order such depositions, and second, that this power is conferred by General Admiralty Rule 32C.
3
Before the codification of 1948, the statutory predecessors of 28 U.S.C. § 2071, 28 U.S.C.A. § 2071, themselves were more clear in providing for some practice rulemaking power in the trial courts. See R.S. § 918, and its somewhat differently worded predecessor, § 7 of the Act of March 2, 1793, 1 Stat. 335. See also R.S. § 913, derived from the early Process Acts. But as early as the First General Admiralty Rules of 1844, this Court had provided for subsidiary rulemaking power by the District Courts, in terms fairly similar to those of the present General Admiralty Rule 44. See General Admiralty Rule 46 of 1844, 3 How. xiii.
4
In the last-cited case, Judge Learned Hand went so far as to say of a District Court rule promulgated under the authority of R.S. § 918 and General Admiralty Rule 44, that it was 'the result of the exercise of a power to legislate, delegated by Congress, though circumscribed by the statute which gives it, and by anything contained in the general laws, or the Supreme Court rules, as the statute itself declares. Within these limits the District Court may disregard existing practice as freely as Congress itself; its action has the force of law * * * and we are as much bound to observe it as a statute.' 40 F.2d, at page 444.
5
The Court rightly rejects the contention that the de bene esse act itself, R.S. §§ 863—865, operates through negative implication to prevent the promulgation by a District Court of any other deposition rule, and hence makes this local rule fall as violative of a statute. General Admiralty Rule 44 does not purport to invest District Courts with this Court's current power to supersede statutes under the Admiralty Rules Enabling Act, 28 U.S.C. § 2073, 28 U.S.C.A. § 2073. But there is no inconsistency between the de bene esse act and the local rule. The act provides a method for the introduction of depositions into evidence; the local rule regulates their taking for discovery. The local rule contains a provision designed to subject the admissibility into evidence of depositions taken under it to the provisions of the act. It is said that the Fisk and Tooth Crown cases, Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117; Hanks Dental Ass'n v. International Tooth Crown Co., 194 U.S. 303, 24 S.Ct. 700, 48 L.Ed. 989, implied that the de bene esse act, and the other statutes regulating the taking of depositions for use as testimony, then on the books (see note 6, infra), amounted to an implicit exclusion of all other means of examination, for discovery purposes, or otherwise. These cases were based primarily on the provisions of R.S. § 861 for the taking of testimony in open court (see note 12, infra); but even if they were based in part on negative inferences from the deposition acts, they have not been honored as authorities in admiralty. For this Court's 1939 amendatory General Admiralty Rules, dealing extensively with discovery, were promulgated at a time when all these statutes were on the books, and when this Court's rulemaking powers in admiralty did not extend to the power to supersede statutes. It has been recognized in the admiralty jurisprudence here, accordingly, that the various statutory provisions referred to in Fisk and Tooth Crown are to be taken as relating only to the introduction of proof at trial, and not to discovery practice. Accordingly there is no barrier in those cases, or in the de bene esse act, to the local rule here involved.
6
Of course, in 1939 this Court had no authority to promulgate in admiralty that part of Civil Rule 26 which provides for the reception of depositions in evidence, to the extent that it was inconsistent with the de bene esse act and such other statutes as R.S. §§ 866—870, 875, providing for various means of taking evidence other than in open court. See 3 Benedict, Admiralty (6th ed. 1940), §§ 397—401. All these statutes except the de bene esse act were repealed in the 1948 codification of the Judicial Code. 62 Stat. 993. This inability was due to the fact that until the 1948 revision of the Judicial Code, 28 U.S.C. § 2073, 28 U.S.C.A. § 2073, this Court's Admiralty Rules Enabling Act did not contain a power to supersede statutes. R.S. § 917. See also R.S. §§ 862 and 913. Civil Rule 26 contains provisions for the reception of depositions as evidence different from those of the de bene esse act. Hence it could not have been promulgated in terms in admiralty then, only in a form like the local rule here which avoids conflict with the statute. See note 5, supra; cf. Mercado v. United States, 2 Cir., 184 F.2d 24.
There is some evidence that it was the inability of this Court under the then-existing Admiralty Rules Enabling Act to promulgate Civil Rule 26 in toto in admiralty which resulted in no action at all being taken on the subject. See Report of the Standing Committee on Admiralty and Maritime Law, American Bar Association, in 76 Ann.Rep.A.B.A. (1951), pp. 565—566. The 1939 General Admiralty Rules amendments were made without report from an advisory committee, and no rule was promulgated which was not a copy of one of the new Civil Rules.
7
Not only might a local rule on discovery depositions serve as a supplement to the General Rules on discovery, but to the pretrial conference practice. See General Admiralty Rule 44 1/2, added 316 U.S. 716. Cf. Dowling v. Isthmian S.S. Corp., 3 Cir., 184 F.2d 758, 773.
8
It should be noted that a similar authority to that of General Admiralty Rule 44 is vested in the District Courts by Civil Rule 83, empowering the District Courts to make local rules of civil procedure. No submission of these local rules to Congress is contemplated by this Court's Rules. No power to supersede statutes is delegated by either the General Admiralty Rule or the Civil Rule. It might be noted that generally (but cf. 28 U.S.C. § 2074, 28 U.S.C.A. § 2074) only where this power is given, has Congress provided for a procedure whereby new rules are reported to it and laid on the table before it. See the original Civil Rules Enabling Act, the Act of June 19, 1934, c. 651, 48 Stat. 1064, and its present form, 28 U.S.C. § 2072, 28 U.S.C.A. § 2072, and the current Admiralty Rules Enabling Act, 28 U.S.C. § 2073, 28 U.S.C.A. § 2073. Contrast the old civil rulemaking authority in the lower courts, R.S. § 918, and the old Admiralty Rules Enabling Act, R.S. § 917, together with R.S. §§ 862 and 913. These provisions did not empower the courts to supersede pre-existing statutes (although § 917's predecessor may have been itself an implicit repealer of certain statutes, see note 12, infra); and they provided for no procedure whereby the rules would be laid before Congress.
Of course, under the modern Acts, all new General Admiralty and Civil Rules promulgated here must be laid before Congress, not simply those which supersede statutes; but the point is that the limited rulemaking power delegated here to the District Court, since it does not contemplate the supercession of statutes, is foreign to the procedural safeguards which the Court today finds indispensable to its exercise. The point is that a narrow power, particularly in lower courts, to make procedural rules of a nature (like this one) not inconsistent with statutory law, has not generally been deemed by Congress to require the safeguards the Court today requires, and which the local rulemaking power cannot provide.
9
This provision was added to § 331 of the Judicial Code by the Act of July 11, 1958, 72 Stat. 356. The local rule in question was in effect in 1955. See 5A Benedict, Admiralty (7th ed. 1959), p. 833. Of course this is not relevant to the efficacy of a local admiralty rule, since even today local rules are not covered by § 331; but it is interesting to note that the provisions of § 331 that the Court treats as relevant here would not even have been applicable to a General Rule promulgated at the time this local rule was.
10
There is some suggestion in the Court's opinion that General Admiralty Rule 44 itself should be narrowly construed because it was not reported to Congress. But that procedure was not required at the time it was promulgated; and in promulgating it, there is no evidence to show that this Court did not exercise the plenitude of its rulemaking powers under the then-existing statutes. See note 6, supra.
11
See note 5, supra.
12
The Court rightly rejects the argument that the local rule is in conflict with General Admiralty Rule 46, which requires that 'the testimony of witnesses shall be taken orally in open court, except as otherwise provided by statute, or agreement of parties.' Old cases here have held discovery-deposition practice at law inconsistent with comparable provisions, Ex parte Fisk, 113 U.S. 713, 5 S.Ct. 724, 28 L.Ed. 1117; Hanks Dental Ass'n v. International Tooth Crown Co., 194 U.S. 303, 24 S.Ct. 700, 48 L.Ed. 989; but these cases hardly offer guides to our decision under the present General Admiralty Rules. The primary basis of these decisions, rendered in 1885 and 1904, was that discovery depositions were thought to be inconsistent with the then-existing statute, applicable at law, providing that all testimony be given orally in open court except as otherwise statutorily provided. R.S. § 861. See Hanks Dental Ass'n v. International Tooth Crown Co., supra, 194 U.S. at page 308, 24 S.Ct. at page 702. Modern practice has come to see the making of testimonial proof and the taking of discovery depositions as quite separate matters. There would seem no reason why a limitation on the former should affect the latter. See Republic of France v. Belships Co., D.C., 91 F.Supp. 912, 913. And the provisions for the taking of testimony in open court found in General Admiralty
Rule 46 comes with an entirely different history from that of the statutory provision applicable at law. The first statutory provision on the subject, § 30 of the First Judiciary Act of 1789, c. 20, 1 Stat. 88, applied to all actions, admiralty, law and equity alike; but in the revision of 1874, the provision was restricted to actions at law, R.S. § 861, and admiralty and equity proofs were left to this Court's rules. R.S. § 862. This may, in fact, have been the state of the law even before the 1874 revision. The note to R.S. § 862 derives the provision entirely from § 6 of the Act of August 23, 1842, c. 188, 5 Stat. 518, which was the first Admiralty Rules Enabling Act. The 1842 Act contained no explicit repealer of the application in admiralty of § 30 of the First Judiciary Act, but evidently at the time of the revision the view was taken that the rule-making authority (which in its 1842 form, as opposed to its form in the revision, R.S. §§ 862, 917, was not made expressly subject to pre-existing statutes) had superseded in admiralty the requirement of § 30 of the First Judiciary Act.
This Court's General Admiralty Rules of 1844, which subject to individual amendments remained in effect till the revision of 1921, never contained any provision comparable to R.S. § 861, or to the present General Admiralty Rule 46. (See Hughes, Admiralty (2d ed. 1920), p. 511 et seq., for the form of the 1844 Rules as they stood immediately before the 1921 revision.) General Rule 46 was introduced in the 1921 General Admiralty Rules revision; but side-by-side with it were promulgated two rules, General Admiralty Rules 31 and 32, 254 U.S., at pages 692—693, which touched on the subject of discovery; and when the extensive 1939 discovery supplements to the rules were promulgated, it was not thought necessary to make any alteration in General Admiralty Rule 46. Accordingly, since discovery rules have stood side-by-side with Rule 46, without explicit exception or cross-reference in it, it should not be treated as carrying the same gloss as R.S. § 861 was held to have, particularly since the interpretation of such a provision as inhibiting discovery rather than simply regulating the introduction of proof at trial is a very strained one.
13
Cf. notes 5 and 6, supra.
14
The Judicial Conference has responsibilities in this area, as has been developed, see 28 U.S.C. § 331, 28 U.S.C.A. § 331; United States v. Isthmian S.S. Co., 359 U.S. 314, 323—324, 79 S.Ct. 857, 862, 3 L.Ed.2d 845; and an Advisory Committee to this Court on the General Admiralty Rules has recently been formed.
15
The local rule in question here, with an exception for use as impeachment or contradiction of the deponent when he has testified, makes admissibility in evidence depend generally upon the fulfillment of the conditions specified in R.S. § 865. It does not provide for admissibility in the circumstances set forth in Civil Rule 26(d)(3), items 4 and 5, which present occasions for admission not having counterparts in the de bene esse act.
| 89
|
363 U.S. 697
80 S.Ct. 1314
4 L.Ed.2d 1500
Larry Dayton HUDSON, Petitioner,v.STATE OF NORTH CAROLINA.
No. 466.
Argued May 16, 1960.
Decided June 20, 1960.
Mr. William Joslin, Raleigh, N.C., for petitioner.
Mr. Ralph Moody, Raleigh, N.C., for respondent.
Mr. Justice STEWART delivered the opinion of the Court.
1
The petitioner and two others were brought to trial before a jury in the Superior Court of Cumberland County, North Carolina, upon an indictment jointly charging them with robbery. When their case was called one of the defendants, David Cain, was represented by a lawyer of his own selection. The petitioner and the other defendant did not have counsel. Before pleading to the indictment, the petitioner, who was eighteen years old, asked the presiding judge to appoint a lawyer to help him with his defense, stating that he was without funds to employ counsel and was incapable of defending himself.1 The prosecutor conceded that the petitioner was unable to employ an attorney.2 The trial judge denied the motion, telling the petitioner that 'The Court will try to see that your rights are protected throughout the case.'
2
All three of the defendants thereupon pleaded not guilty, and the case proceeded immediately to trial. The first witness for the State was the alleged victim of the robbery. Midway through this witness's testimony Cain's lawyer offered to represent all three codefendants 'as long as their interests don't conflict.' At the conclusion of the witness's direct testimony the trial judge advised the lawyer that he should cross-examine only on behalf of Cain, because 'I think you probably have a conflicting interest there.' Thereafter the witness was cross-examined intensely by Cain's lawyer, who brought out the witness's criminal record and previous commitment to a state mental institution. The petitioner and the other codefendant also briefly cross-examined the witness. The only other witnesses for the prosecution were two deputy sheriffs, who testified as to statements made to them by the defendants. They were cross-examined by the lawyer, but not by the two defendants without counsel.
3
At the conclusion of the State's evidence, Cain's lawyer moved that the case be dismissed. When this motion was denied he stated that Cain had no evidence to offer. Thereupon, in the presence of the jury, he tendered on behalf of Cain a plea of guilty to petit larceny. This plea was agreed to by the prosecutor and accepted by the court. The lawyer then withdrew from the proceedings.
4
The trial proceeded. The petitioner and his remaining codefendant each took the stand. Each made a statement denying the robbery. The petitioner was cross-examined at some length, with emphasis upon his previous criminal record. Neither the petitioner nor his codefendant produced any other witnesses or offered any further evidence. They were given an opportunity to argue their case to the jury, but did not do so.
5
The jury found both defendants guilty of larceny from the person, a felony under North Carolina law, and the following day the trial judge pronounced sentence. The petitioner was committed to the penitentiary for a term of three to five years. The codefendant convicted with him was sentenced to a jail term of eighteen months to two years. Cain was given a six months' suspended sentence.
6
The petitioner's subsequent appeal to the Supreme Court of North Carolina was dismissed for want of prosecution. Thereafter he filed in the trial court a 'petition for writ of certiorari,' which urged that the failure of the trial court to provide him with counsel had deprived him of his constitutional rights. This petition was treated as an application for relief under the North Carolina Post-Conviction Hearing Act.3 In the subsequent proceedings the court appointed a lawyer to represent the petitioner,4 and held a hearing at which the petitioner and his counsel were present. After considering the evidence presented, including a transcript of the trial proceedings,5 the court concluded that no special circumstances were shown which required the appointment of trial counsel, that the petitioner had been convicted only after a fair and impartial trial, and that there had consequently been no denial of due process of law. The petition was accordingly dismissed.6 The Supreme Court of North Carolina declined to review the order of dismissal. We granted certiorari to consider the substantial constitutional claim asserted. 361 U.S. 812, 80 S.Ct. 91, 4 L.Ed.2d 60.
7
The judge who presided at the post-conviction proceedings made detailed findings of fact. He found that the trial judge had 'advised the petitioner of his right to challenge when the jury was selected and advised the petitioner of his right to cross examine witnesses and to argue the case to the jury.' He also found that 'during the trial the Court properly excluded evidence which was inadmissible, and the petitioner cross examined the witnesses against him and at his request testified in his own behalf.'
8
In this Court counsel for the petitioner does not take issue with these findings. Counsel's primary emphasis rather is upon the petitioner's comparative youth, relying upon Wade v. Mayo, 334 U.S. 672, 68 S.Ct. 1270, 92 L.Ed. 1647. In that case it was held that the denial of a lawyer's help had resulted in the deprivation of due process where the Federal District Court after a habeas corpus hearing had found that the eighteen-year-old defendant was 'an inexperienced youth unfamiliar with Court procedure, and not capable of adequately representing himself.' 334 U.S., at page 683, 68 S.Ct. at page 1276. Here, by contrast, the post-conviction court found that 'although the petitioner was only eighteen years of age and had been only to the sixth grade in school at the time of his trial, he is intelligent, well informed, and was familiar with and experienced in Court procedure and criminal trials * * *.' Evaluations of this nature are peculiarly within the province of the trier of the facts based upon personal observation. As the Court pointed out in Wade v. Mayo, '(t)here are some individuals who, by reason of age, ignorance or mental capacity, are incapable of representing themselves adequately in a prosecution of a relatively simple nature. This incapacity is purely personal and can be determined only by an examination and observation of the individual.' 334 U.S., at page 684, 68 S.Ct. at page 1276.
9
In view of the findings of the post-conviction court, supported by the record of the trial proceedings, this, in short, is not a case where it can be said that the failure to appoint counsel for the defendant resulted in a constitutionally unfair trial either because of deliberate overreaching by court or prosecutor or simply because of the defendant's chronological are. Moreover, the record shows that up to the time that Cain's lawyer withdrew from the proceedings the petitioner was receiving the effective benefit of the lawyer's activity, and had the trial of all three defendants proceeded to a jury verdict, it is possible that the lawyer could have continued to represent the interests of the petitioner as well as those of the client who had retained him.
10
But that did not happen. Instead, on the advice of his counsel Cain entered a plea of guilt in the presence of the jury midway through the trial. The potential prejudice of such an occurrence is obvious and has long been recognized by the courts of North Carolina. State v. Hunter, 94 N.C. 829, 835; State v. Bryant, 236 N.C. 745, 747, 73 S.E.2d 791, 792; State v. Kerley, 246 N.C. 157, 97 S.E.2d 876. Yet it was precisely at this moment of great potential prejudice that the petitioner and his codefendant were left entirely to their own devices, for it was then that Cain's lawyer withdrew from the case. At that very point the petitioner and his codefendant were left to go it alone.
11
The precise course to be followed by a North Carolina trial court in order to cure the prejudice that may result from a codefendant's guilty plea does not appear to have been made entirely clear by the North Carolina decisions. In the Hunter case the Supreme Court of North Carolina pointed out that while not infrequently a defendant on trial with another is allowed to enter a plea of guilt should exercise care 'to see that such should exercise care cto see that such practice works no undue prejudice to another party on trial.' 94 N.C., at page 835. Later cases have been somewhat more explicit. In the Bryant case curative instructions to the jury given immediately after a codefendant's guilty plea were held sufficient to avoid error prejudicial to the remaining defendant. 236 N.C. at pages 747—748, 73 S.E.2d at page 792. More recently, in the Kerley case, the court said that '(w)hen request therefor is made, it is the duty of the trial judge to instruct the jury that a codefendant's plea of guilty is not to be considered as evidence bearing upon the guilt of the defendant then on trial and that the latter's guilt must be determined solely on the basis of the evidence against him and without reference to the codefendant's plea.' 246 N.C., at page 161, 97 S.E.2d, at page 879. Indeed the court expressed the view that even 'a positive instruction probably would not have removed entirely the subtle prejudice that unavoidably resulted from (a codefendant's) plea * * *.' 246 N.C., at page 162, 97 S.E.2d, at page 880.
12
In the present case the petitioner did not make any request that the jury be instructed to disregard Cain's guilty plea, and the court gave none, either at the time the plea was entered or in finally instructing the jury. A layman would hardly be aware of the fact that he was entitled to any protection from the prejudicial effect of a codefendant's plea of guilt. Even less could he be expected to know the proper course to follow in order to invoke such protection. The very uncertainty of the North Carolina law in this respect serves to underline the petitioner's need for counsel to advise him.
13
The post-conviction court made no finding specifically evaluating the prejudicial effect of Cain's plea of guilt and the trial judge's subsequent failure to give cautionary instructions to the jury. In any event, we cannot escape the responsibility of making our own examination of the record. Spano v. New York, 360 U.S. 315, 316, 79 S.Ct. 1202, 1203, 3 L.Ed.2d 1265. We hold that the circumstances which thus arose during the course of the petitioner's trial made this a case where the denial of counsel's assistance operated to deprive the defendant of the due process of law guaranteed by the Fourteenth Amendment. The prejudicial position in which the petitioner found himself when his codefendant pleaded guilty before the jury raised problems requiring professional knowledge and experience beyond a layman's ken. Gibbs v. Burke, 337 U.S. 773, 69 S.Ct. 1247, 93 L.Ed. 1686; Cash v. Culver, 358 U.S. 633, 79 S.Ct. 432, 3 L.Ed.2d 557.
14
Reversed.
15
Mr. Justice CLARK, whom Mr. Justice WHITTAKER joins, dissenting.
16
The opinion of the Court bids fair to 'furnish opportunities hitherto uncontemplated for opening wide the prison doors of the land.' Foster v. Illinois, 1947, 332 U.S. 134, 139, 67 S.Ct. 1716, 1719 91 L.Ed. 1955. Without so much as mentioning Betts v. Brady, 1942, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595, it cuts serious inroads into that holding and releases petitioner, now a fourth offender though only 18 years old, from his 3-to-5-year sentence for larceny from the person. The Court does so on the ground of a single circumstance occurring at the trial, i.e., the fact that a codefendant, David Cain, was permitted at the close of the State's case to plead guilty to 'larceny, in such amount that it is a misdemeanor.' The Court says that this circumstance 'made this a case where the denial of counsel's assistance operated to deprive the defendant of the due process of law guaranteed by the Fourteenth Amendment.' Strangely enough, the Court digs up this ground sua sponte, for neither the petitioner, the State, nor any court of North Carolina thought such circumstance produced sufficient 'unfairness' in the trial even to discuss it, though its existence was mentioned in the recital of facts in petitioner's brief. The truth is that the courts of North Carolina have held affirmatively that petitioner received a fair trial, and that no special circumstances were shown to indicate that lack of counsel resulted in prejudice to petitioner.
17
The Court, however, speculates that Cain's change in plea 'raised problems requiring professional knowledge and experience beyond a layman's ken.' The Court says that 'The prejudicial position in which the petitioner found himself' resulted. But this is purely speculative and, I submit, does not at all follow. In fact, the jury—despite language in the court's charge which indicated the presence of 'violence,' intimidation and putting (the victim) in fear'—refused to find petitioner guilty of the common-law offense of robbery but only found him guilty of the lesser offense, larceny from the person. The record here would clearly support a verdict of guilty on the robbery charge. As I appraise the jury's verdict, it would be much more realistic to say that David Cain's plea of guilty influenced the jury not to find petitioner guilty of the greater offense. After all, Cain was only the driver of the car and participated no further in the criminal enterprise. In fact, the victim could not even identify him at the trial. Cain, unlike petitioner, had 'wholeheartedly admitted' his guilt to the officers. This apparently brought on his plea. Petitioner on the other hand was the chief actor in the criminal enterprise. In addition, he had a criminal record, had served a term in prison, was twice an escapee therefrom, and from the record here gives every appearance of being a hardened criminal. Still the jury found him guilty only of the lesser offense, larceny from the person. It is reasonable to assume that it did this because Cain was permitted to plead to the lesser offense of larceny.
18
The Court cites three North Carolina cases* in support of the 'potential prejudice' which it finds petitioner may have suffered from Cain's change of plea. None of these cases were cited by the parties. As I have said, the point was not raised in the briefs. But even the North Carolina cases cited by the Court do not support its new theory for reversal. All they indicate, as the Court frankly points out, is that care must be exercised to avoid 'undue prejudice.' In this regard the trial court fully protected petitioner all during the presentation of the case and gave a full, fair, and intelligent charge to which do objection is even now being made by petitioner. It is intimated by the Court that North Carolina law required a charge that Cain's plea not be considered as any evidence bearing on petitioner's guilt. But the short answer is that three North Carolina courts have considered this case and not one has even mentioned the point. The Court says this underlines the petitioner's need for counsel. I submit that he has had counsel since his Post Conviction Hearing Act case was filed some two years ago, and not once has the handling of the Cain plea been urged as error necessitating reversal.
19
While I do not wish to labor the issue, I must say that careful study of the case convinces me that it was a simple one and the trial was without complexity or technicality. The petitioner and three others induced their victim, an elderly man, to enter their car on the ruse that they would take him home for a dollar. It was in the nighttime and on the way to his home they drove into some woods. Petitioner ordered the victim out of the car, directed him to hold up his hands, and then went through his pockets, taking his billford, containing some $24. The sole question for the jury was one of fact, namely, did petitioner take the old man's money? The State offered three witnesses in support of its position. The petitioner and his codefendant took the stand and gave their version of the affair, each admitting his presence on the scene but denying any robbery. There is not and never has been any claim that the State withheld any evidence or used perjured testimony or that incompetent evidence was admitted against the petitioner; or that he was denied compulsory process for witnesses; or that he was ignorant or feeble-minded; or that the instructions of the court were not full and sufficient. As the Court itself finds, this 'is not a case' where the age of the defendant or the deliberate 'over-reaching by court or prosecutor' resulted in an 'unfair trial.' Moreover, the Court finds that the case upon which the petitioner primarily depends, Wade v. Mayo, 1948, 334 U.S. 672, 68 S.Ct. 1270, 92 L.Ed. 1647, is in nowise controlling. It therefore follows that the lone special circumstances upon which petitioner depends, namely, his 'youthfulness * * * his lack of formal education, his timely request for the appointment of counsel, his inability to hire a lawyer, and his own fumbling defense,' do not show a lack of due process based on the trial judge's refusal to appoint counsel for him.
20
The record clearly shows, as the trial court found, that the petitioner 'is intelligent, well informed, and was familiar with and experienced in Court procedure and criminal trials, having been previously tried on different occasions for careless and reckless driving, for breaking and entering, for driving while under the influence of intoxicating liquor, and for assault and robbery.' Only at the previous term of the same court, petitioner had defended himself on the assault and robbery charge and was found not guilty by the jury. But what more could emphasize the petitioner's ingenuity in defending himself than his defense here? It was simple and direct. Both he and his codefendant had this story: The victim, before entering the car, had been drinking beer and on the way home gave petitioner the money to buy a pint of vodka. After they all partook of the vodka the victim became ill and nauseated while sitting in the back of the car. The petitioner then got in the back seat, and when the car was stopped he helped the victim out and the latter fell down on the ground. Petitioner then got back in the car and his group drove away. After leaving the victim, petitioner's codefendant found the billford in the car. It 'almost went behind the (back) seat.' It had no money in it but petitioner proposed that they take it back to the victim. They then returned to where the victim got out of the car but he was gone, and although they 'got out and hollered for him,' he could not be found. After the defendants left the scene, the billfold was thrown from the car by petitioner's codefendant and was not produced at the trial. This was indeed a shrewd defense. The only trouble was that the jury did not believe it.
21
On the facts of this record, I can see no basis for saying that petitioner was denied due process, Betts v. Brady, supra, and accordingly would affirm the judgment.
1
'I don't have funds to employ an attorney and am not capable of defending myself. If the Court please, I would like to ask the Court to employ me an attorney.'
2
'I will say that he is not able to employ an attorney, but as to whether he is able to represent himself I cannot say.'
3
N.C.Gen.Stat. § 15—217 et seq.
4
The North Carolina Post-Conviction Hearing Act provides: 'If the petition alleges that the petitioner is without funds to pay the costs of the proceeding, and is unable to give a costs bond with sureties for the payment of the costs for the proceeding and is unable to furnish security for costs by means of a mortgage or lien upon property to secure the costs, the court may order that the petitioner be permitted to proceed to prosecute such proceeding without providing for the payment of costs. If the petitioner is without counsel and alleges in the petition that he is without means of any nature sufficient to procure counsel, he shall state whether or not he wishes counsel to be appointed to represent him. If appointment of counsel is so requested, the court shall appoint counsel if satisfied that the petitioner has no means sufficient to procure counsel. The court shall fix the compensation to be paid such counsel which, when so determined, shall be paid by the county in which the conviction occurred.' N.C.Gen.Stat., § 15—219.
5
The judge who conducted the post-conviction proceedings was not the judge who had presided at the trial.
6
The dismissal was clearly based upon the court's view of the merits of the petitioner's constitutional claim. The court nowhere suggested that the petitioner had chosen an inappropriate remedy under the State law. Indeed the Supreme Court of North Carolina has made clear that claims of unconstitutional denial of the right to counsel are to be considered on their merits in Post-Conviction Hearing Act proceedings. State v. Hackney, 240 N.C. 230, 81 S.E.2d 778; State v. Cruse, 238 N.C. 53, 76 S.E.2d 320.
*
State v. Hunter, 94 N.C. 829, 835; State v. Bryant, 236 N.C. 745, 747, 73 S.E.2d 791, 792; State v. Kerley, 246 N.C. 157, 97 S.E.2d 876.
| 01
|
363 U.S. 593
80 S.Ct. 1358
4 L.Ed.2d 1424
UNITED STEELWORKERS OF AMERICA, Petitioner,v.ENTERPRISE WHEEL AND CAR CORP.
No. 538.
Argued April 28, 1960.
Decided June 20, 1960.
Mr. Elliott Bredhoff and David E. Feller, Washington, D.C., for petitioner.
Mr. William C. Beatty, Huntington, W.Va., for respondent.
Opinion of the Court by Mr. Justice DOUGLAS, announced by Mr. Justice BRENNAN.
1
Petitioner union and respondent during the period relevant here had a collective bargaining agreement which provided that any differences 'as to the meaning and application' of the agreement should be submitted to arbitration and that the arbitrator's decision 'shall be final and binding on the parties.' Special provisions were included concerning the suspension and discharge of employees. The agreement stated:
2
'Should it be determined by the Company or by an arbitrator in accordance with the grievance procedure that the employee has been suspended unjustly or discharged in violation of the provisions of this Agreement, the Company shall reinstate the employee and pay full compensation at the employee's regular rate of pay for the time lost.' The agreement also provided:
3
'* * * It is understood and agreed that neither party will institute civil suits or legal proceedings against the other for alleged violation of any of the provisions of this labor contract; instead all disputes will be settled in the manner outlined in this Article III—Adjustment of Grievances.'
4
A group of employees left their jobs in protest against the discharge of one employee. A union official advised them at once to return to work. An official of respondent at their request gave them permission and then rescinded it. The next day they were told they did not have a job any more 'until this thing was settled one way or the other.'
5
A grievance was filed; and when respondent finally refused to arbitrate, this suit was brought for specific enforcement of the arbitration provisions of the agreement. The District Court ordered arbitration. The arbitrator found that the discharge of the men was not justified, though their conduct, he said, was improper. In his view the facts warranted at most a suspension of the men for 10 days each. After their discharge and before the arbitration award the collective bargaining agreement had expired. The union, however, continued to represent the workers at the plant. The arbitrator rejected the contention that expiration of the agreement barred reinstatement of the employees. He held that the provision of the agreement above quoted imposed an unconditional obligation on the employer. He awarded reinstatement with back pay, minus pay for a 10-day suspension and such sums as these employees received from other employment.
6
Respondent refused to comply with the award. Petitioner moved the District Court for enforcement. The District Court directed respondent to comply. 168 F.Supp. 308. The Court of Appeals, while agreeing that the District Court had jurisdiction to enforce an arbitration award under a collective bargaining agreement,1 held that the failure of the award to specify the amounts to be deducted from the back pay rendered the award unenforceable. That defect, it agreed, could be remedied by requiring the parties to complete the arbitration. It went on to hold, however, that an award for back pay subsequent to the date of termination of the collective bargaining agreement could not be enforced. It also held that the requirement for reinstatement of the discharged employees was likewise unenforceable because the collective bargaining agreement had expired. 269 F.2d 327. We granted certiorari. 361 U.S. 929, 80 S.Ct. 371.
7
The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. As we stated in united Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 80 S.Ct. 1347, the arbitrators under these collective agreements are indispensable agencies in a continuous collective bargaining process. They sit to settle disputes at the plant level disputes that require for their solution knowledge of the custom and practices of a particular factory or of a particular industry as reflected in particular agreements.2
8
When an arbitrator is commissioned to interpret and apply the collective bargaining agreement, he is to bring his informed judgment to bear in order to reach a fair solution of a problem. This is especially true when it comes to formulating remedies. There the need is for flexibility in meeting a wide variety of situations. The draftsmen may never have thought of what specific remedy should be awarded to meet a particular contingency. Nevertheless, an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator's words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.
9
The opinion of the arbitrator in this case, as it bears upon the award of back pay beyond the date of the agreement's expiration and reinstatement, is ambiguous. It may be read as based solely upon the arbitrator's view of the requirements of enacted legislation, which would mean that he exceeded the scope of the submission. Or it may be read as embodying a construction of the agreement itself, perhaps with the arbitrator looking to 'the law' for help in determining the sense of the agreement. A mere ambiguity in the opinion accompanying an award, which permits the inference that the arbitrator may have exceeded his authority, is not a reason for refusing to enforce the award. Arbitrators have no obligation to the court to give their reasons for an award. To require opinions3 free of ambiguity may lead arbitrators to play it safe by writing no supporting opinions. This would be undesirable for a well-reasoned opinion tends to engender confidence in the integrity of the process and aids in clarifying the underlying agreement. Moreover, we see no reason to assume that this arbitrator has abused the trust the parties confided in him and has not stayed within the areas marked out for his consideration. It is not apparent that he went beyond the submission. The Court of Appeals' opinion refusing to enforce the reinstatement and partial back pay portions of the award was not based upon any finding that the arbitrator did not premise his award on his construction of the contract. It merely disagreed with the arbitrator's construction of it.
10
The collective bargaining agreement could have provided that if any of the employees were wrongfully discharged, the remedy would be reinstatement and back pay up to the date they were returned to work. Respondent's major argument seems to be that by applying correct principles of law to the interpretation of the collective bargaining agreement it can be determined that the agreement did not so provide, and that therefore the arbitrator's decision was not based upon the contract. The acceptance of this view would require courts, even under the standard arbitration clause, to review the merits of every construction of the contract. This plenary review by a court of the merits would make meaningless the provisions that the arbitrator's decision is final, for in reality it would almost never be final. This underlines the fundamental error which we have alluded to in United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343. As we there emphasized, the question of interpretation of the collective bargaining agreement is a question for the arbitrator. It is the arbitrator's construction which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his.
11
We agree with the Court of Appeals that the judgment of the District Court should be modified so that the amounts due the employees may be definitely determined by arbitration. In all other respects we think the judgment of the District Court should be affirmed. Accordingly, we reverse the judgment of the Court of Appeals, except for that modification, and remand the case to the District Court for proceedings in conformity with this opinion. It is so ordered.
12
Judgment of Court of Appeals, except for its modification of District Court's judgment, reversed and case remanded to District Court with directions.
13
Mr. Justice FRANKFURTER concurs in the result.
14
Mr. Justice BLACK took no part in the consideration or decision of this case.
15
For opinion of Mr. Justice BRENNAN, joined by Mr. Justice FRANKFURTER and Mr. Justice HARLAN, see 363 U.S. 569, 80 S.Ct. 1363.
16
Mr. Justice WHITTAKER, dissenting.
17
Claiming that the employer's discharge on January 18, 1957, of 11 employees violated the provisions of its collective bargaining contract with the employer—covering the period beginning April 5, 1956, and ending April 4, 1957—the union sought and obtained arbitration, under the provisions of the contract, of the issues whether these employees had been discharged in violation of the agreement and, if so, should be ordered reinstated and awarded wages from the time of their wrongful discharge. In August 1957, more than four months after the collective agreement had expired, these issues, by agreement of the parties, were submitted to a single arbitrator, and a hearing was held before him on January 3, 1958. On April 10, 1958, the arbitrator made his award, finding that the 11 employees had been discharged in violation of the agreement and ordering their reinstatement with back pay at their regular rates from a time 10 days after their discharge to the time of reinstatement. Over the employer's objection that the collective agreement and the submission under it did not authorize nor empower the arbitrator to award reinstatement or wages for any period after the date of expiration of the contract (April 4, 1957), the District Court ordered enforcement of the award. The Court of Appeals modified the judgment by eliminating the requirement that the employer reinstate the employees and pay them wages for the period after expiration of the collective agreement, and affirmed it in all other respects, 269 F.2d 327, and we granted certiorari, 361 U.S. 929, 80 S.Ct. 371, 4 L.Ed.2d 352.
18
That the propriety of the discharges, under the collective agreement, was arbitrable under the provisions of that agreement, even after its expiration, is not in issue. Nor is there any issue here as to the power of the arbitrator to award reinstatement status and back pay to the discharged employees to the date of expiration of the collective agreement. It is conceded, too, that the collective agreement expired by its terms on April 4, 1957, and was never extended or renewed.
19
The sole question here is whether the arbitrator exceeded the submission and his powers in awarding reinstatement and back pay for any period after expiration of the collective agreements. Like the Court of Appeals, I think he did. I find nothing in the collective agreement that purports to so authorize. Nor does the Court point to anything in the agreement that purports to do so. Indeed, the union does not contend that there is any such covenant in the contract. Doubtless all rights that accrued to the employees under the collective agreement during its term, and that were made arbitrable by its provisions, could be awarded to them by the arbitrator, even though the period of the agreement had ended. But surely no rights accrued to the employees under the agreement after it had expired. Save for the provisions of the collective agreement, and in the absence, as here, of any applicable rule of law or contrary covenant between the employer and the employees, the employer had the legal right to discharge the employees at will. The collective agreement, however, protected them against discharge, for specified reasons, during its continuation. But when that agreement expired, it did not continue to afford rights in futuro to the employees—as though still effective and governing. After the agreement expired, the employment status of these 11 employees was terminable at the will of the employer, as the Court of Appeals quite properly held, 269 F.2d, at page 331, and see Meadows v. Radio Industries, 7 Cir., 222 F.2d 347, 349; Atchison, T. & S.F.R. Co. v. Andrews, 10 Cir., 211 F.2d 264, 265; Warden v. Hinds, 4 Cir., 163 F. 201, 25 L.R.A.,N.S., 529, and the announced discharge of these 11 employees then became lawfully effective.
20
Once the contract expired, no rights continued to accrue under it to the employees. Thereafter they had no contractual right to demand that the employer continue to employ them, and a fortiori the arbitrator did not have power to order the employer to do so; nor did the arbitrator have power to order the employer to pay wages to them after the date of termination of the contract, which was also the effective date of their discharges.
21
The judgment of the Court of Appeals, affirming so much of the award as required reinstatement of the 11 employees to employment status and payment of their wages until expiration of the contract, but not thereafter, seems to me to be indubitably correct, and I would affirm it.
1
See Textile Workers v. Cone Mills Corp., 4 Cir., 268 F.2d 920.
2
'Persons unfamiliar with mills and factories—farmers or professors, for example—often remark upon visiting them that they seem like another world. This is particularly true if, as in the steel industry, both tradition and technology have strongly and uniquely molded the ways men think and act when at work. The newly hired employee, the 'green hand,' is gradually initiated into what amounts to a miniature society. There he finds himself in a strange environment that assaults his senses with unusual sounds and smells and often with different 'weather conditions' such as sudden drafts of heat, cold, or humidity. He discovers that the society of which he only gradually becomes a part has of course a formal government of its own—the rules which management and the union have laid down—but that it also differs from or parallels the world outside in social classes, folklore, ritual, and traditions.
'Under the process in the old mills a very real 'miniature society' had grown up, and in important ways the technological revolution described in this case history shattered it. But a new society or work community was born immediately, though for a long time it developed slowly. As the old society was strongly molded by the discontinuous process of making pipe, so was the new one molded by the continuous process and strongly influenced by the characteristics of new highspeed automatic equipment.' Walker, Life in the Automatic Factory, 36 Harv.Bus.Rev. 111, 117.
3
See Jalet, Judicial Review of Arbitration: The Judicial Attitude, 45 Cornell L.Q. 519, 522.
| 67
|
363 U.S. 603
80 S.Ct. 1367
4 L.Ed.2d 1435
FLEMMING, Secretary of Health, Education, and Welfare, Appellant,v.Ephram NESTOR.
No. 54.
Argued Feb. 24, 1960.
Decided June 20, 1960.
Mr. John F. Davis, Washington, D.C., for appellant.
Mr. David Rein, Washington, D.C., for appellee.
Mr. Justice HARLAN delivered the opinion of the Court.
1
From a decision of the District Court for the District of Columbia holding § 202(n) of the Social Security Act (68 Stat. 1083, as amended, 42 U.S.C. § 402(n), 42 U.S.C.A. § 402(n)) unconstitutional, the Secretary of Health, Education, and Welfare takes this direct appeal pursuant to 28 U.S.C. § 1252, 28 U.S.C.A. § 1252. The challenged section, set forth in full in the margin,1 provides for the termination of old-age, survivor, and disability insurance benefits payable to, or in certain cases in respect of, an alien individual who, after September 1, 1954 (the date of enactment of the section), is deported under § 241(a) of the Immigration and Nationality Act (8 U.S.C. § 1251(a), 8 U.S.C.A. § 1251(a)) on any one of certain grounds specified in § 202(n).
2
Appellee, an alien, immigrated to this country from Bulgaria in 1913, and became eligible for old-age benefits in November 1955. In July 1956 he was deported pursuant to § 241(a)(6)(C)(i) of the Immigration and Nationality Act for having been a member of the Communist Party from 1933 to 1939. This being one of the benefit-termination deportation grounds specified in § 202(n), appellee's benefits were terminated soon thereafter, and notice of the termination was given to his wife, who had remained in this country.2 Upon his failure to obtain administrative reversal of the decision, appellee commenced this action in the District Court, pursuant to § 205(g) of the Social Security Act (53 Stat. 1370, as amended 42 U.S.C. § 405(g), 42 U.S.C.A. § 405(g)), to secure judicial review.3 On cross-motions for summary judgment, the District Court ruled for appellee, holding § 202(n) unconstitutional under the Due Process Clause of the Fifth Amendment in that it deprived appellee of an accrued property right. 169 F.Supp. 922. The Secretary prosecuted an appeal to this Court, and, subject to a jurisdictional question hereinafter discussed, we set the case down for plenary hearing. 360 U.S. 915, 79 S.Ct. 1433, 3 L.Ed.2d 1532.
3
The preliminary jurisdictional question is whether 28 U.S.C. § 2282, 28 U.S.C.A. § 2282, is applicable, and therefore required that the case be heard below before three judges, rather than by a single judge, as it was. Section 2282 forbids the issuance, except by a three-judge District Court, of any 'interlocutory or permanent injunction restraining the enforcement, operation or execution of any Act of Congress for repugnance to the Constitution * * *.' Neither party requested a three-judge court below, and in this Court both parties argue the inapplicability of § 2282. If the provision applies, we cannot reach the merits, but must vacate the judgment below and remand the case for consideration by a three-judge District Court. See Federal Housing Administration v. The Darlington, Inc., 352 U.S. 977, 77 S.Ct. 381, 1 L.Ed.2d 363.
4
Under the decisions of this Court, this § 205(g) action could, and did, draw in question the constitutionality of § 202(n). See, e.g., Anniston Mfg. Co. v. Davis, 301 U.S. 337, 345 346, 57 S.Ct. 816, 820, 81 L.Ed. 1143. However, the action did no more. It did not seek affirmatively to interdict the operation of a statutory scheme. A judgment for appellee would not put the operation of a federal statute under the restraint of an equity decree; indeed, apart from its effect under the doctrine of stare decisis, it would have no other result than to require the payment of appellee's benefits. In these circumstances we think that what was said in International Ladies' Garment Workers' Union v. Donnelly Garment Co., 304 U.S. 243, 58 S.Ct. 875, where this Court dealt with an analogous situation, is controlling here:
5
'(The predecessor of § 2282) does not provide for a case where the validity of an act of Congress is merely drawn in question, albeit that question be decided, but only for a case where there is an application for an interlocutory or permanent injunction to restrain the enforcement of an act of Congress. * * * Had Congress intended the provision * * *, for three judges and direct appeal, to apply whenever a question of the validity of an act of Congress became involved, Congress would naturally have used the familiar phrase 'drawn in question' * * *.' Id., 304 U.S. at page 250, 58 S.Ct. at page 879.
6
We hold that jurisdiction over the action was properly exercised by the District Court, and therefore reach the merits.
I.
7
We think that the District Court erred in holding that § 202(n) deprived appellee of an 'accrued property right.' 169 F.Supp., at page 934. Appellee's right to Social Security benefits cannot properly be considered to have been of that order.
8
The general purposes underlying the Social Security Act were expounded by Mr. Justice Cardozo in Helvering v. Davis, 301 U.S. 619, 640—645, 57 S.Ct. 904, 908—911, 81 L.Ed. 1307. The issue here, however, requires some inquiry into the statutory scheme by which those purposes are sought to be achieved. Payments under the Act are based upon the wage earner's record of earnings in employment or self-employment covered by the Act, and take the form of old-age insurance and disability insurance benefits inuring to the wage earner (known as the 'primary beneficiary'), and of benefits, including survivor benefits, payable to named dependents ('secondary beneficiaries') of a wage-earner. Broadly speaking, eligibility for benefits depends on satisfying statutory conditions as to (1) employment in covered employment or self-employment (see § 210(a), 42 U.S.C. § 410(a), 42 U.S.C.A. § 410(a)); (2) the requisite number of 'quarters of coverage'—i.e., three-month periods during which not less than a stated sum was earned—the number depending generally on age (see §§ 213—215, 42 U.S.C. §§ 413—415, 42 U.S.C.A. §§ 413—415); and (3) attainment of the retirement age (see § 216(a), 42 U.S.C. § 416(a), 42 U.S.C.A. § 416(a)). § 202(a), 42 U.S.C. § 402(a), 42 U.S.C.A. § 402(a).4 Entitlement to benefits once gained is partially or totally lost if the beneficiary earns more than a stated annual sum, unless he or she is at least 72 years old. § 203(b, e), 42 U.S.C. § 403(b, e), 42 U.S.C.A. § 403(b, e). Of special importance in this case is the fact that eligibility for benefits, and the amount of such benefits, do not in any true sense depend on contribution to the program through the payment of taxes, but rather on the earnings record of the primary beneficiary.
9
The program is financed through a payroll tax levied on employees in covered employment, and on their employers. The tax rate, which is a fixed percentage of the first $4,800 of employee annual income, is set at a scale which will increase from year to year, presumably to keep pace with rising benefit costs. I.R.C. of 1954, §§ 3101, 3111, 3121(a), 26 U.S.C.A. §§ 3101, 3111, 3121(a). The tax proceeds are paid into the Treasury 'as internal-revenue collections,' I.R.C., § 3501, 26 U.S.C.A. § 3501, and each year an amount equal to the proceeds is appropriated to a Trust Fund, from which benefits and the expenses of the program are paid. § 201, 42 U.S.C. § 401, 42 U.S.C.A. § 401. It was evidently contemplated that receipts would greatly exceed disbursements in the early years of operation of the system, and surplus funds are invested in government obligations, and the income returned to the Trust Fund. Thus, provision is made for expected increasing costs of the program.
10
The Social Security system may be accurately described as a form of social insurance, enacted pursuant to Congress' power to 'spend money in aid of the 'general welfare," Helvering v. Davis, supra, 301 U.S. at page 640, 57 S.Ct. at page 908, whereby persons gainfully employed, and those who employ them, are taxed to permit the payment of benefits to the retired and disabled, and their dependents. Plainly the expectation is that many members of the present productive work force will in turn become beneficiaries rather than supporters of the program. But each worker's benefits, though flowing from the contributions he made to the national economy while actively employed, are not dependent on the degree to which he was called upon to support the system by taxation. It is apparent that the noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.
11
It is hardly profitable to engage in conceptualizations regarding 'earned rights' and 'gratuities.' Cf. Lynch v. United States, 292 U.S. 571, 576—577, 54 S.Ct. 840, 842, 78 L.Ed. 1434. The 'right' to Social Security benefits is in one sense 'earned,' for the entire scheme rests on the legislative judgment that those who in their productive years were functioning members of the economy may justly call upon that economy, in their later years, for protection from 'the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey's end is near.' Helvering v. Davis, supra, 301 U.S. at page 641, 57 S.Ct. at page 909. But the practical effectuation of that judgment has of necessity called forth a highly complex and interrelated statutory structure. Integrated treatment of the manifold specific problems presented by the Social Security program demands more than a generalization. That program was designed to function into the indefinite future, and its specific provisions rest on predications as to expected economic conditions which must inevitably prove less than wholly accurate, and on judgments and preferences as to the proper allocation of the Nation's resources which evolving economic and social conditions will of necessity in some degree modify.
12
To engraft upon the Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to everchanging conditions which it demands. See Wollenberg, Vested Rights in Social-Security Benefits, 37 Ore.L.Rev. 299, 359. It was doubtless out of an awareness of the need for such flexibility that Congress included in the original Act, and has since retained, a clause expressly reserving to it '(t)he right to alter, amend, or repeal any provision' of the Act. § 1104, 49 Stat. 648, 42 U.S.C. § 1304, 42 U.S.C.A. § 1304. That provision makes express what is implicit in the institutional needs of the program. See Analysis of the Social Security System, Hearings before a Subcommittee of the Committee on Ways and Means, House of Representatives, 83d Cong., 1st Sess., pp. 920—921. It was pursuant to that provision that § 202(n) was enacted.
13
We must conclude that a person covered by the Act has not such a right in benefit payments as would make every defeasance of 'accrued' interests violative of the Due Process Clause of the Fifth Amendment.
II.
14
This is not to say, however, that Congress may exercise its power to modify the statutory scheme free of all constitutional restraint. The interest of a covered employee under the Act is of sufficient substance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause. In judging the permissibility of the cut-off provisions of § 202(n) from this standpoint, it is not within our authority to determine whether the Congressional judgment expressed in that section is sound or equitable, or whether it comports well or ill with the purposes of the Act. 'Whether wisdom or unwisdom resides in the scheme of benefits set forth in Title II, it is not for us to say. The answer to such inquiries must come from Congress, not the courts. Our concern here, as often, is with power, not with wisdom.' Helvering v. Davis, supra, 301 U.S. at page 644, 57 S.Ct. at page 910. Particularly when we deal with a withholding of a noncontractual benefit under a social welfare program such as this, we must recognize that the Due Process Clause can be thought to interpose a bar only if the statute manifests a patently arbitrary classification, utterly lacking in rational justification.
15
Such is not the case here. The fact of a beneficiary's residence abroad—in the case of a deportee, a presumably permanent residence—can be of obvious relevance to the question of eligibility. One benefit which may be thought to accrue to the economy from the Social Security system is the increased over-all national purchasing power resulting from taxation of productive elements of the economy to provide payments to the retired and disabled, who might otherwise be destitute or nearly so, and who would generally spend a comparatively large percentage of their benefit payments. This advantage would be lost as to payments made to one residing abroad. For these purposes, it is, of course, constitutionally irrelevant whether this reasoning in fact underlay the legislative decision, as it is irrelevant that the section coes not extend to all to whom the postulated rationale might in logic apply.5 See United States v. Petrillo, 332 U.S. 1, 8—9, 67 S.Ct. 1538, 1542—1543, 91 L.Ed. 1877; Steward Machine Co. v. Davis, 301 U.S. 548, 584—585, 57 S.Ct. 883, 889—890, 81 L.Ed. 1279; cf. Carmichael v. Southern Coal & Coke Co., 301 U.S. 495, 510—513, 57 S.Ct. 868, 872—874, 81 L.Ed. 1245. Nor, apart from this, can it be deemed irrational for Congress to have concluded that the public purse should not be utilized to contribute to the support of those deported on the grounds specified in the statute.
16
We need go no further to find support for our conclusion that this provision of the Act cannot be condemned as so lacking in rational justification as to offend due process.
III.
17
The remaining, and most insistently pressed, constitutional objections rest upon Art. I, § 9, cl. 3, and Art. III, s 2, cl. 3, of the Constitution, and the Sixth Amendment.6 It is said that the termination of appellee's benefits amounts to punishing him without a judicial trial, see Wong Wing v. United States, 163 U.S. 228, 16 S.Ct. 977, 41 L.Ed. 140; that the termination of benefits constitutes the imposition of punishment by legislative act, rendering § 202(n) a bill of attainder, see United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, 90 L.Ed. 1252; Cummings v. Missouri, 4 Wall. 277, 18 L.Ed. 356; and that the punishment exacted is imposed for past conduct not unlawful when engaged in, thereby violating the constitutional prohibition on ex post facto laws, see Ex parte Garland, 4 Wall. 333, 18 L.Ed. 366.7 Essential to the success of each of these contentions is the validity of characterizing as 'punishment' in the constitutional sense the termination of benefits under § 202(n).
18
In determining whether legislation which bases a disqualification on the happening of a certain past event imposes a punishment, the Court has sought to discern the objects on which the enactment in question was focused. Where the source of legislative concern can be thought to be the activity or status from which the individual is barred, the disqualification is not punishment even though it may bear harshly upon one affected. The contrary is the case where the statute in question is evidently aimed at the person or class of persons disqualified. In the earliest case on which appellee relies, a clergyman successfully challenged a state constitutional provision barring from that profession—and from many other professions and offices—all who would not swear that they had never manifested and sympathy or support for the cause of the Confederacy. Cummings v. Missouri, supra. The Court thus described the aims of the challenged enactment:
19
'The oath could not * * * have been required as a means of ascertaining whether parties were qualified or not for their respective callings or the trusts with which they were charged. It was required in order to reach the person, not the calling. It was exacted, not from any notion that the several acts designated indicated unfitness for the callings, but because it was thought that the several acts deserved punishment * * *.' Id., 4 Wall. at page 320. (Emphasis supplied.)
20
Only the other day the governing inquiry was stated, in an opinion joined by four members of the Court, in these terms:
21
'The question in each case where unpleasant consequences are brought to bear upon an individual for prior conduct, is whether the legislative aim was to punish that individual for past activity, or whether the restriction of the individual comes about as a relevant incident to a regulation of a present situation, such as the proper qualifications for a profession.' De Veau v. Braisted,
22
363 U.S. 144, 160, 80 S.Ct. 1146, 1155 (plurality opinion).
23
In Ex parte Garland, supra, where the Court struck down an oath—similar in content to that involved in Cummings—required of attorneys seeking to practice before any federal court, as also in Cummings, the finding of punitive intent drew heavily on the Court's first-hand acquaintance with the events and the mood of the then recent Civil War, and 'the fierce passions which that struggle aroused.' Cummings v. Missouri, supra, 4 Wall. at page 322.8 Similarly, in United States v. Lovett, supra, where the Court invalidated, as a bill of attainder, a statute forbidding subject to certain conditions—the further payment of the salaries of three named government employees, the determination that a punishment had been imposed rested in large measure on the specific Congressional history which the Court was at pains to spell out in detail. See 328 U.S. at pages 308—312, 66 S.Ct., at pages 1075—1077. Most recently, in Trop v. Dulles, 356 U.S. 86, 78 S.Ct. 590, 2 L.Ed.2d 630, which held unconstitutional a statute providing for the expatriation of one who had been sentenced by a court-martial to dismissal or dishonorable discharge for wartime desertion, the majority of the Court characterized the statute as punitive. However, no single opinion commanded the support of a majority. The plurality opinion rested its determination, at least in part, on its inability to discern any alternative purpose which the statute could be thought to serve. Id., 356 U.S. at page 97, 78 S.Ct. at page 596. The concurring opinion found in the specific historical evolution of the provision in question compelling evidence of punitive intent. Id., 356 U.S. at pages 107—109, 78 S.Ct. at pages 601—602.
24
It is thus apparent that, though the governing criterion may be readily stated, each case has turned on its own highly particularized context. Where no persuasive showing of a purpose 'to reach the person, not the calling,' Cummings v. Missouri, supra, 4 Wall. at page 320, has been made, the Court has not hampered legislative regulation of activities within its sphere of concern, despite the often-severe effects such regulation has had on the persons subject to it.9 Thus, deportation has been held to be not punishment, but an exercise of the plenary owner of Congress to fix the conditions under which aliens are to be permitted to enter and remain in this country. Fong Yue Ting v. United States, 149 U.S. 698, 730, 13 S.Ct. 1016, 1028, 37 L.Ed. 905; see Galvan v. Press, 347 U.S. 522, 530—531, 74 S.Ct. 737, 742 743, 98 L.Ed. 911. Similarly, the setting by a State of qualifications for the practice of medicine, and their modification from time to time, is an incident of the State's power to protect the health and safety of its citizens, and its decision to bar from practice persons who commit or have committed a felony is taken as evidencing an intent to exercise that regulatory power, and not a purpose to add to the punishment of ex-felons. Hawker v. New York, 170 U.S. 189, 18 S.Ct. 573, 42 L.Ed. 1002. See De Veau v. Braisted, supra (regulation of crime on the waterfront through disqualification of ex-felons from holding union office). Cf. Helvering v. Mitchell, 303 U.S. 391, 397—401, 58 S.Ct. 630, 632—634, 82 L.Ed. 917, holding that, with respect to deficiencies due to fraud, a 50 percent addition to the tax imposed was not punishment so as to prevent, upon principles of double jeopardy, its assessment against one acquitted of tax evasion.
25
Turning, then, to the particular statutory provision before us, appellee cannot successfully contend that the language and structure of § 202(n), or the nature of the deprivation, requires us to recognize a punitive design. Cf. Wong Wing v. United States, supra (imprisonment, at hard labor up to one year, of person found to be unlawfully in the country). Here the sanction is the mere denial of a noncontractual governmental benefit. No affirmative disability or restraint is imposed, and certainly nothing approaching the 'infamous punishment' of imprisonment, as in Wong Wing, on which great reliance is mistakenly placed. Moreover, for reasons already given (363 U.S. at pages 611—612, 80 S.Ct. at pages 1372—1373), it cannot be said, as was said of the statute in Cummings v. Missouri, supra, 4 Wall. at page 319; see Dent v. West Virginia, 129 U.S. 114, 126, 9 S.Ct. 231, 235, 32 L.Ed. 623, that the disqualification of certain deportees from receipt of Social Security benefits while they are not lawfully in this country bears no rational connection to the purposes of the legislation of which it is a part, and must without more therefore be taken as evidencing a Congressional desire to punish. Appellee arrgues, however, that the history and scope of § 202(n) prove that no such postulated purpose can be thought to have motivated the legislature, and that they persuasively show that a punitive purpose in fact lay behind the statute. We do not agree.
26
We observe initially that only the clearest proof could suffice to establish the unconstitutionality of a statute on such a ground. Judicial inquiries into Congressional motives are at best a hazardous matter, and when that inquiry seeks to go behind objective manifestations it becomes a dubious affair indeed. Moreover, the presumption of constitutionality with which this enactment, like any other, comes to us forbids us lightly to choose that reading of the statute's setting which will invalidate it over that which will save it. '(I)t is not on slight implication and vague conjecture that the legislature is to be pronounced to have transcended its powers, and its acts to be considered as void.' Fletcher v. Peck, 6 Cranch 87, 128, 3 L.Ed. 162.
27
Section 202(n) was enacted as a small part of an extensive revision of the Social Security program. The provision originated in the House of Representatives. H.R. 9366, 83d Cong., 2d Sess., § 108. The discussion in the House Committee Report, H.R.Rep. No. 1698, 83d Cong., 2d Sess., pp. 5, 25, 77, does not express the purpose of the statute. However, it does say that the termination of benefits would apply to those persons who were 'deported from the United States because of illegal entry, conviction of a crime, or subversive activity * * *.' Id., at 25. It was evidently the thought that such was the scope of the statute resulting from its application to deportation under the 14 named paragraphs of § 241(a) of the Immigration and Nationality Act. Id., at 77.10
28
The Senate Committee rejected the proposal, for the stated reason that it had 'not had an opportunity to give sufficient study to all the possible implications of this provision, which involves termination of benefit rights under the contributory program of old-age and survivors insurance * * *.' S.Rep. No. 1987, 83d Cong., 2d Sess., p. 23; see also id., at 76. However, in Conference, the proposal was restored in modified form,11 and as modified was enacted as § 202(n). See H.R.Conf.Rep. No. 2679, 83d Cong., 2d Sess., p. 18.
29
Appellee argues that this history demonstrates that Congress was not concerned with the fact of a beneficiary's deportation—which it is claimed alone would justify this legislation as being pursuant to a policy relevant to regulation of the Social Security system—but that it sought to reach certain grounds for deportation, thus evidencing a punitive intent.12 It is impossible to find in this meagre history the unmistakable evidence of punitive intent which, under principles already discussed, is required before a Congressional enactment of this kind may be struck down. Even were that history to be taken as evidencing Congress' concern with the grounds, rather than the fact, of deportation, we do not think that this, standing alone, would suffice to establish a punitive purpose. This would still be a far cry from the situations involved in such cases as Cummings, Wong Wing, and Garland (see 363 U.S. at page 617, 80 S.Ct. at page 1376), and from that in Lovett, supra, where the legislation was on its face aimed at particular individuals. The legislative record, however, falls short of any persuasive showing that Congress was in fact concerned alone with the grounds of deportation. To be sure Congress did not apply the termination provision to all deportees. However, it is evident that neither did it rest the operation of the statute on the occurrence of the underlying act. The fact of deportation itself remained an essential condition for loss of benefits, and even if a beneficiary were saved from deportation only through discretionary suspension by the Attorney General under § 244 of the Immigration and Nationality Act (66 Stat. 214, 8 U.S.C. § 1254, 8 U.S.C.A. § 1254), § 202(n) would not reach him.
30
Moreover, the grounds for deportation referred to in the Committee Report embrace the great majority of those deported, as is evident from an examination of the four omitted grounds, summarized in the margin.13 Inferences drawn from the omission of those grounds cannot establish, to the degree of certainty required, that Congressional concern was wholly with the acts leading to deportation, and not with the fact of deportation.14 To hold otherwise would be to rest on the 'slight implication and vague conjecture' against which Chief Justice Marshall warned. Fletcher v. Peck, supra, 6 Cranch at page 128.
31
The same answer must be made to arguments drawn from the failure or Congress to apply § 202(n) to beneficiaries voluntarily residing abroad. But cf. § 202(t), ante, note 5. Congress may have failed to consider such persons; or it may have thought their number too slight, or the permanence of their voluntary residence abroad too uncertain, to warrant application of the statute to them, with its attendant administrative problems of supervision and enforcement. Again, we cannot with confidence reject all those alternatives which imaginativeness can bring to mind, save that one which might require the invalidation of the statute.
32
Reversed.
33
Mr. Justice BLACK, dissenting.
34
For the reasons stated here and in the dissents of Mr. Justice DOUGLAS and Mr. Justice BRENNAN I agree with the District Court that the United States is depriving appellee, Ephram Nestor, of his statutory right to old-age benefits in violation of the United States Constitution.
35
Nestor came to this country from Bulgaria in 1913 and lived here continuously for 43 years, until July 1956. He was then deported from this country for having been a Communist from 1933 to 1939. At that time membership in the Communist Party as such was not illegal and was not even a statutory ground for deportation. From December 1936 to January 1955 Nestor and his employers made regular payments to the Government under the Federal Insurance Contributions Act, 26 U.S.C. §§ 3101—3125, 26 U.S.C.A. §§ 3101—3125. These funds went to a special federal old-age and survivors insurance trust fund under 49 Stat. 622, 53 Stat. 1362, as amended, 42 U.S.C. § 401, 42 U.S.C.A. § 401, in return for which Nestor, like millions of others, expected to receive payments when he reached the statutory age. In 1954, 15 years after Nestor had last been a Communist, and 18 years after he began to make payments into the old-age security fund, Congress passed a law providing, among other things, that any person who had been deported from this country because of past Communist membership under 66 Stat. 205, 8 U.S.C. § 1251(a)(6)(C), 8 U.S.C.A. § 1251(a) (6)(C), should be wholly cut off from any benefits of the fund to which he had contributed under the law. 68 Stat. 1083, 42 U.S.C. § 402(n), 42 U.S.C.A. § 402(n). After the Government deported Nestor in 1956 it notified his wife, who had remained in this country, that he was cut off and no further payments would be made to him. This action, it seems to me, takes Nestor's insurance without just compensation and in violation of the Due Process Clause of the Fifth Amendment. Moreover, it imposes an ex post facto law and bill of attainder by stamping him, without a court trial, as unworthy to receive that for which he has paid and which the Government promised to pay him. The fact that the Court is sustaining this action indicates the extent to which people are willing to go these days to overlook violations of the Constitution perpetrated against anyone who has ever even innocently belonged to the Communist Party.
I.
36
In Lynch v. United States, 292 U.S. 571, 54 S.Ct. 840, 78 L.Ed. 1434, this Court unanimously held that Congress was without power to repudiate and abrogate in whole on in part its promises to pay amounts claimed by soldiers under the War Risk Insurance Act of 1917, §§ 400—405, 40 Stat. 409. This Court held that such a repudiation was inconsistent with the provision of the Fifth Amendment that 'No person shall be * * * deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.' The Court today puts the Lynch case aside on the ground that 'It is hardly profitable to engage in conceptualizations regarding 'earned rights' and 'gratuities." From this sound premise the Court goes on to say that while 'The 'right' to Social Security benefits is in one sense 'earned," yet the Government's insurance scheme now before us rests not on the idea of the contributors to the fund earning something, but simply provides that they may 'justly call' upon the Government 'in their later years, for protection from 'the rigors of the poor house as well as from the haunting fear that such a lot awaits them when journey's end is near." These are nice words but they cannot conceal the fact that they simply tell the contributors to this insurance fund that despite their own and their employers' payments the Government, in paying the beneficiaries out of the fund, is merely giving them something for nothing and can stop doing so when it pleases. This, in my judgment, reveals a complete misunderstanding of the purpose Congress and the country had in passing that law. It was then generally agreed, as it is today, that it is not desirable that aged people think of the Government as giving them something for nothing. An excellent statement of this view, quoted by Mr. Justice DOUGLAS in another connection, was made by Senator George, the Chairman of the Finance Committee when the Social Security Act was passed, and one very familiar with the philosophy that brought it about:
37
'It comports better than any substitute we have discovered with the American concept that free men want to earn their security and not ask for doles—that what is due as a matter of earned right is far better than a gratuity. * * *
38
'Social Security is not a handout; it is not charity; it is not relief. It is an earned right based upon the contributions and earnings of the individual. As an earned right, the individual is eligible to receive his benefit in dignity and self-respect.' 102 Cong.Rec. 15110.
39
The people covered by this Act are now able to rely with complete assurance on the fact that they will be compelled to contribute regularly to this fund whenever each contribution falls due. I believe they are entitled to rely with the same assurance on getting the benefits they have paid for and have been promised, when their disability or age makes their insurance payable under the terms of the law. The Court did not permit the Government to break its plighted faith with the soldiers in the Lynch case; it said the Constitution forbade such governmental conduct. I would say precisely the same thing here.
40
The Court consoles those whose insurance is taken away today, and others who may suffer the same fate in the future, by saying that a decision requiring the Social Security system to keep faith 'would deprive it of the flexibility and boldness in adjustment to everchanging conditions which it demands.' People who pay premiums for insurance usually think they are paying for insurance, not for 'flexibility and boldness.' I cannot believe that any private insurance company in America would be permitted to repudiate its matured contracts with its policyholders who have regularly paid all their premiums in reliance upon the good faith of the company. It is true, as the Court says, that the original Act contained a clause, still in force, that expressly reserves to Congress '(t)he right to alter, amend, or repeal any provision' of the Act. § 1104, 49 Stat. 648, 42 U.S.C. § 1304, 42 U.S.C.A. § 1304. Congress, of course, properly retained that power. It could repeal the Act so as to cease to operate its old-age insurance activities for the future. This means that it could stop covering new people, and even stop increasing its obligations to its old contributors. But that is quite different from disappointing the just expectations of the contributors to the fund which the Government has compelled them and their employers to pay its Treasury. There is nothing 'conceptualistic' about saying, as this Court did in Lynch, that such a taking as this the Constitution forbids.
II.
41
In part II of its opinion, the Court throws out a line of hope by its suggestion that if Congress in the future cuts off some other group from the benefits they have bought from the Government, this Court might possibly hold that the future hypothetical act violates the Due Process Clause. In doing so it reads due process as affording only minimal protection, and under this reading it will protect all future groups from destruction of their rights only if Congress 'manifests a patently arbitrary classification, utterly lacking in rational justification.' The Due Process Clause so defined provides little protection indeed compared with the specific safeguards of the Constitution such as its prohibitions against taking private property for a public use without just compensation, passing ex post facto laws, and imposing bills of attainder. I cannot agree, however, that the Due Process Clause is properly interpreted when it is used to subordinate and dilute the specific safeguards of the Bill of Rights, and when 'due process' itself becomes so wholly dependent upon this Court's idea of what is 'arbitrary' and 'rational.' See Levine v. United States, 362 U.S. 610, 620, 80 S.Ct. 1038, 1044 (dissenting opinion); Adamson v. California, 332 U.S. 46, 89—92, 67 S.Ct. 1672, 1695—1696 (dissenting opinion); Rochin v. California, 342 U.S. 165, 174, 72 S.Ct. 205, 211, 96 L.Ed. 183 (concurring opinion). One reason for my belief in this respect is that I agree with what is said in the Court's quotation from Helvering v. Davis, 301 U.S. 619, 644, 57 S.Ct. 904, 910, 81 L.Ed. 1307:
42
'Whether wisdom or unwisdom resides in the scheme of benefits set forth in Title II, it is not for us to say. The answer to such inquiries must come from Congress, not the courts. Our concern here, as often, is with power, not with wisdom.'
43
And yet the Court's assumption of its power to hold Acts unconstitutional because the Court thinks they are arbitrary and irrational can be neither more nor less than a judicial foray into the field of governmental policy. By the use of this due process formula the Court does not, as its proponents frequently proclaim, abstain from interfering with the congressional policy. It actively enters that field with no standards except its own conclusion as to what is 'arbitrary' and what is 'rational.' And this elastic formula gives the Court a further power, that of holding legislative Acts constitutional on the ground that they are neither arbitrary nor irrational, even though the Acts violate specific Bill of Rights safeguards. See my dissent in Adamson v. California, supra. Whether this Act had 'rational justification' was, in my judgment, for Congress; whether it violates the Federal Constitution is for us to determine, unless we are by circumlocution to abdicate the power that this Court has been held to have ever since Marbury v. Madison, 1 Cranch 137, 2 L.Ed. 60.
III.
44
The Court in part III of its opinion holds that the 1954 Act is not an ex post facto law or bill of attainder even though it creates a class of deportees who cannot collect their insurance benefits because they were once Communists at a time when simply being a Communist was not illegal. The Court also puts great emphasis on its belief that the Act here is not punishment. Although not believing that the particular label 'punishment' is of decisive importance, I think the Act does impose punishment even in a classic sense. The basic reason for Nestor's loss of his insurance payments is that he was once a Communist. This man, now 69 years old, has been driven out of the country where he has lived for 43 years to a land where he is practically a stranger, under an Act authorizing his deportation many years after his Communist membership. Cf. Galvan v. Press, 347 U.S. 522, 532, 533, 74 S.Ct. 737, 743, 744, 98 L.Ed. 911 (dissenting opinions). Now a similar ex post facto law deprives him of his insurance, which, while petty and insignificant in amount to this great Government, may well be this exile's daily bread, for the same reason and in accord with the general fashion of the day—that is, to punish in every way possible anyone who ever made the mistake of being a Communist in this country or who is supposed ever to have been associated with anyone who made that mistake. See, e.g., Barenblatt v. United States, 360 U.S. 109, 79 S.Ct. 1081, 3 L.Ed.2d 1115, and Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090. In United States v. Lovett, 328 U.S. 303, 315—316, 66 S.Ct. 1073, 1079, 90 L.Ed. 1252, we said:
45
'* * * legislative acts, no matter what their form, that apply either to named individuals or to easily ascertainable members of a group in such a way as to inflict punishment on them without a judicial trial are bills of attainder prohibited by the Constitution.'
46
Faithful observance of our holdings in that case, in Ex parte Garland, 4 Wall. 333, 18 L.Ed. 366, and in Cummings v. Missouri, 4 Wall. 277, 18 L.Ed. 356, would, in my judgment, require us to hold that the 1954 Act is a bill of attainder. It is a congressional enactment aimed at an easily ascertainable group; it is certainly punishment in any normal sense of the word to take away from any person the benefits of an insurance system into which he and his employer have paid their moneys for almost two decades; and it does all this without a trial according to due process of law. It is true that the Lovett, Cummings and Garland Court opinions were not unanimous, but they nonetheless represent positive precedents on highly important questions of individual liberty which should not be explained away with cobwebbery refinements. If the Court is going to overrule these cases in whole or in part, and adopt the views of previous dissenters, I believe it should be done clearly and forthrightly.
47
A basic constitutional infirmity of this Act, in my judgment, is that it is a part of a pattern of laws all of which violate the First Amendment out of fear that this country is in grave danger if it lets a handful of Communist fanatics or some other extremist group make their arguments and discuss their ideas. This fear, I think, is baseless. It reflects a lack of faith in the sturdy patriotism of our people and does not give to the world a true picture of our abiding strength. It is an unworthy fear in a country that has a Bill of Rights containing provisions for fair trials, freedom of speech, press and religion, and other specific safeguards designed to keep men free. I repeat once more that I think this Nation's greatest security lies, not in trusting to a momentary majority of this Court's view at any particular time of what is 'patently arbitrary,' but in wholehearted devotion to and observance of our constitutional freedoms. See Wieman v. Updegraff, 344 U.S. 183, 192, 73 S.Ct. 215, 219, 97 L.Ed. 216 (concurring opinion).
48
I would affirm the judgment of the District Court which held that Nestor is constitutionally entitled to collect his insurance.
49
Mr. Justice DOUGLAS, dissenting.
50
Appellee came to this country from Bulgaria in 1913 and was employed, so as to be covered by the Social Security Act, from December 1936 to January 1955—a period of 19 years. He became eligible for retirement and for Social Security benefits in November 1955 and was awarded $55.60 per momth. In July 1956 he was deported for having been a member of the Communist Party from 1933 to 1939. Pursuant to a law, enacted September 1, 1954, he was thereupon denied payment of further Social Security Benefits.
51
This 1954 law seems to me to be a classic example of a bill of attainder, which Art. I, § 9 of the Constitution prohibits Congress from enacting. A bill of attainder is a legislative act which inflicts punishment without a judicial trial. Cummings v. Missouri, 4 Wall. 277, 323, 18 L.Ed. 356.
52
In the old days punishment was meted out to a creditor or rival or enemy by sending him to the gallows. But as recently stated by Irving Brant,1
53
'* * * By smiting a man day after day with slanderous words, by taking away his opportunity to earn a living, you can drain the blood from his veins without even scratching his skin.
54
'Today's bill of attainder is broader than the classic form, and not so tall and sharp. There is mental in place of physical torture, and confiscation of tomorrow's bread and butter instead of yesterday's land and gold. What is perfectly clear is that hate, fear and prejudice play the same role today, in the destruction of human rights in America that they did in England when a frenzied mob of lords, judges, bishops and shoemakers turned the Titus Oates blacklist into a hangman's record. Hate, jealousy and spite continue to fill the legislative attainder lists just as they did in the Irish Parliament of ex-King James.' Bills of attainder, when they imposed punishment less than death, were bills of pains and penalties and equally beyond the constitutional power of Congress. Cummings v. Missouri, supra, 4 Wall. at page 323.
55
Punishment in the sense of a bill of attainder includes the 'deprivation or suspension of political or civil rights.' Cummings v. Missouri, supra, at page 322. In that case it was barring a priest from practicing his profession. In ex parte Garland, 4 Wall. 333, 18 L.Ed. 366, it was excluding a man from practicing law in the federal courts. In United States v. Lovett, 328 U.S. 303, 66 S.Ct. 1073, 90 L.Ed. 1252, it was cutting off employees' compensation and barring them permanently from government service. Cutting off a person's livelihood by denying him accrued social benefits—part of his property interests—is no less a punishment. Here, as in the other cases cited, the penalty exacted has one of the classic purposes of punishment2—'to reprimand the wrongdoer, to deter others.' Trop v. Dulles, 356 U.S. 86, 96, 78 S.Ct. 590, 595, 2 L.Ed.2d 630.
56
Social Security payments are not gratuities. They are products of a contributory system, the funds being raised by payment from employees and employers alike, or in case of self-employed persons, by the individual alone. See Social Security Board v. Nierotko, 327 U.S. 358, 364, 66 S.Ct. 637, 640, 90 L.Ed. 718. The funds are placed in the Federal Old-Age and Survivors Insurance Trust Fund, 42 U.S.C. § 401(a), 42 U.S.C.A. § 401(a); and only those who contribute to the fund are entitled to its benefits, the amount of benefits being related to the amount of contributions made. See Stark, Social Security: Its Importance to Lawyers, 43 A.B.A.J. 319, 321 (1957). As the late Senator George, long Chairman of the Senate Finance Committee and one of the authors of the Social Security system, said:
57
'There has developed through the years a feeling both in and out of Congress that the contributory social insurance principle fits our times—that it serves a vital need that cannot be as well served otherwise. It comports better than any substitute we have discovered with the American concept that free men want to earn their security and not ask for doles—that what is due as a matter of earned right is far better than a gratuity. * * *
58
'Social security is not a handout; it is not charity; it is not relief. It is an earned right based upon the contributions and earnings of the individual. As an earned right, the individual is eligible to receive his benefit in dignity and self-respect.' 102 Cong.Rec. 15110.
59
Social Security benefits have rightly come to be regarded as basic financial protection against the hazards of old age and disability. As stated in a recent House Report:
60
'The old-age and survivors insurance system is the basic program which provides protection for America's families against the loss of earned income upon the retirement or death of the family provider. The program provides benefits related to earned income and such benefits are paid for by the contributions made with respect to persons working in covered occupations.' H.R.Rep. No. 1189, 84th Cong., 1st Sess. 2.
61
Congress could provide that only people resident here could get Social Security benefits. Yet both the House and the Senate rejected any residence requirements. See H.R.Rep. No. 1698, 83d Cong., 2d Sess. 24—25; S.Rep. No. 1987, 83d Cong., 2d Sess. 23. Congress concededly might amend the program to meet new conditions. But may it take away Social Security benefits from one person or from a group of persons for vindictive reasons? Could Congress on deporting an alien for having been a Communist confiscate his home, appropriate his savings accounts, and thus send him out of the country penniless? I think not. Any such Act would be a bill of attainder. The difference, as I see it, between that case and this is one merely of degree. Social Security benefits, made up in part of this alien's own earnings, are taken from him because he once was a Communist.
62
The view that § 202(n), with which we now deal, imposes a penalty was taken by Secretary Folsom, appellant's predecessor, when opposing enlargement of the category of people to be denied benefits of Social Security, e.g., those convicted of treason and sedition. He said:
63
'Because the deprivation of benefits as provided in the amendment is in the nature of a penalty and based on considerations foreign to the objectives and provisions of the oldage and survivors insurance program, the amendment may well serve as a precedent for extension of similar provisions to other public programs and to other crimes which, while perhaps different in degree, are difficult to distinguish in principle.
64
'The present law recognizes only three narrowly limited exceptions3 to the basic principle that benefits are paid without regard to the attitudes, opinions, behavior, or personal characteristics of the individual * * *.' Hearings Senate Finance Committee on Social Security Amendments of 1955, 84th Cong., 2d Sess., 1319.
65
The Committee Reports, though meagre, support Secretary Folsom in that characterization of § 202(n). The House Report tersely stated that termination of the benefits would apply to those persons who were deported 'because of illegal entry, conviction of a crime, or subversive activity.' H.R.Rep. No. 1698, 83d Cong., 2d Sess. 25. The aim and purpose are clear—to take away from a person by legislative fiat property which he has accumulated because he has acted in a certain way or embraced a certain ideology. That is a modern version of the bill of attainder—as plain, as direct, as effective as those which religious passions once loosed in England and which later were employed against the Tories here.4 I would affirm this judgment.
66
Mr. Justice BRENNAN, with whom THE CHIEF JUSTICE and Mr. Justice DOUGLAS join, dissenting.
67
When Nestor quit the Communist Party in 1939 his past membership was not a ground for his deportation. Kessler v. Strecker, 307 U.S. 22, 59 S.Ct. 694, 83 L.Ed. 1082. It was not until a year later that past membership was made a specific ground for deportation.1 This past membership has cost Nestor dear. It brought him expulsion from the country after 43 years' residence—most of his life. Now more is exacted from him, for after he had begun to receive benefits in 1955—having worked in covered employment the required time and reached age 65—and might anticipate receiving them the rest of his life, the benefits were stopped pursuant to § 202(n) of the Amended Social Security Act.2 His predicament is very real—an aging man deprived of the means with which to live after being separated from his family and exiled to life among strangers in a land he quit 47 years ago. The common sense of it is that he has been punished severely for his past conduct.
68
Even the 1950 statute deporting aliens for past membership raised serious questions in this Court whether the prohibition against ex post facto laws was violated. In Galvan v. Press, 347 U.S. 522, 531, 74 S.Ct. 737, 742, 98 L.Ed. 911, we said 'since the intrinsic consequences of deportation are so close to punishment for crime, it might fairly be said also that the ex post facto Clause, even though applicable only to punitive legislation, should be applied to deportation.' However, precedents which treat deportation not as punishment, but as a permissible exercise of congressional power to enact the conditions under which aliens may come to and remain in this country, governed the decision in favor of the constitutionality of the statute.
69
However, the Court cannot rest a decision that § 202(n) does not impose punishment on Congress' power to regulate immigration. It escapes the common-sense conclusion that Congress has imposed punishment by finding the requisite rational nexus to a granted power in the supposed furtherance of the Social Security program 'enacted pursuant to Congress' power to 'spend money in aid of the 'general welfare.'" I do not understand the Court to deny that but for that connection, § 202(n) would impose punishment and not only offend the constitutional prohibition on ex post facto laws but also violate the constitutional guarantees against imposition of punishment without a judicial trial.
70
The Court's test of the constitutionality of § 202(n) is whether the legislative concern underlying the statute was to regulate 'the activity or status from which the individual is barred' or whether the statute 'is evidently aimed at the person or class of persons disqualified.' It rejects the inference that the statute is 'aimed at the person or class of persons disqualified' by relying upon the presumption of constitutionality. This presumption might be a basis for sustaining the statute if in fact there were two opposing inferences which could reasonably be drawn from the legislation, one that it imposes punishment and the other that it is purposed to further the administration of the Social Security program. The Court, however, does not limit the presumption to that use. Rather the presumption becomes a complete substitute for any supportable finding of a rational connection of § 202(n) with the Social Security program. For me it is not enough to state the test and hold that the presumption alone satisfies it. I find it necessary to examine the Act and its consequences to ascertain whether there is ground for the inference of a congressional concern with the administration of the Social Security program. Only after this inquiry would I consider the application of the presumption.
71
The Court seems to acknowledge that the statute bears harshly upon the individual disqualified, but states that this is permissible when a statute is enacted as a regulation of the activity. But surely the harshness of the consequences is itself a relevant consideration to the inquiry into the congressional purpose.3 Cf. Trop v. Dulles, 356 U.S. 86, 110, 78 S.Ct. 590, 2 L.Ed.2d 630 (concurring opinion).
72
It seems to me that the statute itself shows that the sole legislative concern was with 'the person or class of persons disqualified.' Congress did not disqualify for benefits all beneficiaries residing abroad or even all dependents residing abroad who are aliens. If that had been the case I might agree that Congress' concern would have been with 'the activity or status' and not with the 'person or class of persons disqualified.' The scales would then be tipped toward the conclusion that Congress desired to limit benefit payments to beneficiaries residing in the United States so that the American economy would be aided by expenditure of benefits here. Indeed a proposal along those lines was submitted to Congress in 1954, at the same time § 202(n) was proposed,4 and it was rejected.5
73
Perhaps, the Court's conclusion that regulation of 'the activity or status' was the congressional concern would be a fair appraisal of the statute if Congress had terminated the benefits of all alien beneficiaries who are deported. But that is not what Congress did. Section 202(n) applies only to aliens deported on one or more of 14 of the 18 grounds for which aliens may be deported.6
74
H.R.Rep. No. 1698, 83d Cong., 2d Sess. 25, 77, cited by the Court, describes § 202(n) as including persons who were deported 'because of unlawful entry, conviction of a crime, or subversive activity.' The section, in addition, covers those deported for such socially condemned acts as narcotic addiction or prostitution. The common element of the 14 grounds is that the alien has been guilty of some blameworthy conduct. In other words Congress worked its will only on aliens deported for conduct displeasing to the lawmakers.
75
This is plainly demonstrated by the remaining four grounds of deportation, those which do not result in the cancellation of benefits.7 Two of those four grounds cover persons who become public charges within five years after entry for reasons which predated the entry. A third ground covers the alien who fails to maintain his nonimmigrant status. The fourth ground reaches the alien who, prior to or within five years after entry, aids other aliens to enter the country illegally.
76
Those who are deported for becoming public charges clearly have not, by modern standards, engaged in conduct worthy of censure. The Government's suggestion that the reason for their exclusion from § 202(n) was an unarticulated feeling of Congress that it would be unfair to the 'other country to deport such destitute persons without letting them retain their modicum of social security benefits' appears at best fanciful, especially since, by hypothesis, they are deportable because the conditions which lead to their becoming public charges existed prior to entry.
77
The exclusion from the operation of § 202(n) of aliens deported for failure to maintain nonimmigrant status rationally can be explained, in the context of the whole statute, only as evidencing that Congress considered that conduct less blameworthy. Certainly the Government's suggestion that Congress may have thought it unlikely that such persons would work sufficient time in covered employment to become eligible for social Security benefits cannot be the reason for this exclusion. For frequently the very act which eventually results in the deportation of persons on that ground is the securing of private employment. Finally, it is impossible to reconcile the continuation of benefits to aliens who are deported for aiding other aliens to enter the country illegally, except upon the ground that Congress felt that their conduct was less reprehensible. Again the Government's suggestion that the reason might be Congress' belief that these aliens would not have worked in covered employment must be rejected. Five years after entry would be ample time within which to secure employment and qualify. Moreover the same five-year limitation applies to several of the 14 grounds of deportation for which aliens are cut off from benefits and the Government's argument would apply equally to them if that in fact was the congressional reason.
78
This appraisal of the distinctions drawn by Congress between various kinds of conduct impels the conclusion, beyond peradventure that the distinctions can be understood only if the purpose of Congress was to strike at 'the person or class of persons disqualified.' The Court inveighs against invalidating a statute on 'implication and vague conjecture.' Rather I think the Court has strained to sustain the statute on 'implication and vague conjecture,' in holding that the congressional concern was 'the activity or status from which the individual is barred.' Today's decision sanctions the use of the spending power not to further the legitimate objectives of the Social Security program but to inflict hurt upon those who by their conduct have incurred the displeasure of Congress. The Framers ordained that even the worst of men should not be punished for their past acts or for any conduct without adherence to the procedural safeguards written into the Constitution. Today's decision is to me a regretful retreat from Lovett, Cummings and Garland.
79
Section 202(n) imposes punishment in violation of the prohibition against ex post facto laws and without a judicial trial.8 I therefore dissent.
1
Section 202(n) provides as follows:
'(n) (1) If any individual is (after the date of enactment of this subsection) deported under paragraph (1), (2), (4), (5), (6), (7), (10), (11), (12), (14), (15), (16), (17), or (18) of section 241(a) of the Immigration and Nationality Act, then, notwithstanding any other provisions of this title—
'(A) no monthly benefit under this section or section 223 (42 U.S.C. § 423, relating to 'disability insurance benefits') shall be paid to such individual, on the basis of his wages and self-employment income, for any month occurring (i) after the month in which
the Secretary is notified by the Attorney General that such individual has been so deported, and (ii) before the month in which such individual is thereafter lawfully admitted to the United States for permanent residence,
'(B) if no benefit could be paid to such individual (or if no benefit could be paid to him if he were alive) for any month by reason of subparagraph (A), no monthly benefit under this section shall be paid, on the basis of his wages and self-employment income, for such month to any other person who is not a citizen of the United States and is outside the United States for any part of such month, and
'(C) no lump-sum death payment shall be made on the basis of such individual's wages and self-employment income if he dies (i) in or after the month in which such notice is received, and (ii) before the month in which he is thereafter lawfully admitted to the United States for permanent residence.
'Section 203(b) and (c) of this Act shall not apply with respect to any such individual for any month for which no monthly benefit may be paid to him by reason of this paragraph.
'(2) As soon as practicable after the deportation of any individual under any of the paragraphs of section 241(a) of the Immigration and Nationality Act enumerated in paragraph (1) in this subsection, the Attorney General shall notify the Secretary of such deportation.'
The provisions of § 241(a) of the Immigration and Nationality Act are summarized in notes 10, 13, post, 363 U.S. at pages 618, 620, 80 S.Ct. at pages 1376, 1378.
2
Under paragraph (1)(B) of § 202(n) (see note 1, ante), appellee's wife, because of her residence here, has remained eligible for benefits payable to her as the wife of an insured individual. See § 202(b), 53 Stat. 1364, as amended, 42 U.S.C. § 402(b), 42 U.S.C.A. § 402(b).
3
Section 205(g) provides as follows:
'(g) Any individual, after any final decision of the Board made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Board may allow. * * * As part of its answer the Board shall file a certified copy of the transcript of the record including the evidence upon which the findings and decision complained of are based. The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Board, with or without remanding the cause for a rehearing. The findings of the Board as to any fact, if supported by substantial evidence, shall be conclusive * * *. The judgment of the court shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions.'
4
In addition, eligibility for disability insurance benefits is of course subject to the further condition of the incurring of a disability as defined in the Act. § 223, 42 U.S.C. § 423, 42 U.S.C.A. § 423. Secondary beneficiaries must meet the tests of family relationship to the wage earner set forth in the Act. § 202(b—h), 42 U.S.C. § 402(b—h), 42 U.S.C.A. § 402(b—h).
5
The Act does not provide for the termination of benefits of nonresident citizens, or of some aliens who leave the country voluntarily—although many nonresident aliens do lose their eligibility by virtue of the provisions of § 202(t), 70 Stat. 835, as amended, 42 U.S.C. § 402(t), 42 U.S.C.A. § 402(t)—or of aliens deported pursuant to paragraphs 3, 8, 9, or 13 of the 18 paragraphs of § 241(a) of the Immigration and Nationality Act. See note 13, post.
6
Art. I, § 9, cl. 3:
'No Bill of Attainder or ex post facto Law shall be passed.'
Art. III, § 2, cl. 3:
'The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed * * *.'
Amend. VI:
'In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defence.'
7
Appellee also adds, but hardly argues, the contention that he has been deprived of his rights under the First Amendment, since the adverse consequences stemmed from 'mere past membership' in the Communist Party. This contention, which is no more than a collateral attack on appellee's deportation, is not open to him.
8
See also Pierce v. Carskadon, 16 Wall. 234, 21 L.Ed. 276. A West Virginia statute providing that a nonresident who had suffered a judgment in an action commenced by attachment, but in which he had not been personally served and did not appear, could within one year petition the court for a reopening of the judgment and a trial on the merits, was amended in 1865 so as to condition that right on the taking of an exculpatory oath that the defendant had never supported the Confederacy. On the authority of Cummings and Garland, the amendment was invalidated.
9
As prior decisions make clear, compare Ex parte Garland, supra,. with Hawker v. New York, supra, the severity of a sanction is not determinative of its character as 'punishment.'
10
Paragraphs (1), (2), and (10) of § 241(a) relate to unlawful entry, or entry not complying with certain conditions; paragraphs (6) and (7) apply to 'subversive' and related activities; the remainder of the included paragraphs are concerned with convictions of designated crimes, or the commission of acts related to them, such as narcotics addiction or prostitution.
11
For example, under the House version termination of benefits of a deportee would also have terminated benefits paid to secondary beneficiaries based on the earning records of the deportee. The Conference proposal limited this effect to secondary beneficiaries who were nonresident aliens. See note 2, ante.
12
Appellee also relies on the juxtaposition of the proposed § 108 and certain other provisions, some of which were enacted and some of which were not. This argument is too conjectural to warrant discussion. In addition, reliance is placed on a letter written to the Senate Finance Committee by appellant's predecessor in office, opposing the enactment of what is now § 202(u) of the Act, 70 Stat. 838, 42 U.S.C. § 402(u), 42 U.S.C.A. § 402(u), on the ground that the section was 'in the nature of a penalty and based on considerations foreign to the objectives' of the program. Social Security Amendments of 1955, Hearings before the Senate Committee on Finance, 84th Cong., 2d Sess., p. 1319. The Secretary went on to say that 'present law recognizes only three narrowly limited exceptions (of which § 202(n) is one) to the basic principle that benefits are paid without regard to the attitudes, opinions, behavior, or personal characteristics of the individual * * *.' It should be observed, however, that the Secretary did not speak of § 202(n) as a penalty, as he did of the proposed § 202(u). The latter provision is concededly penal, and applies only pursuant to a judgment of a court in a criminal case.
13
They are: (1) persons institutionalized at public expense within five years after entry because of 'mental disease, defect, or deficiency' not shown to have arisen subsequent to admission (§ 241(a)(3)); (2) persons becoming a public charge within five years after entry from causes not shown to have arisen subsequent to admission § 241(a)(8)); (3) persons admitted as nonimmigrants (see § 101(a)(15), 66 Stat. 167, 8 U.S.C. § 1101(a)(15), 8 U.S.C.A. § 1101(a)(15)) who fail to maintain, or comply with the conditions of, such status (§ 241(a)(9)); (4) persons knowingly and for gain inducing or aiding, prior to or within five years after entry, and other alien to enter or attempt to enter unlawfully (§ 241(a)(13)).
14
Were we to engage in speculation, it would not be difficult to conjecture that Congress may have been led to exclude these four grounds of deportation out of compassionate or de minimis considerations.
1
Address entitled Bills of Attainder in 1787 and Today. Columbia Law Review dinner 1954, published in 1959 by the Emergency Civil Liberties Committee, under the title Congressional Investigations and Bills of Attainder.
2
The broad sweep of the idea of punishment behind the concept of the bill of attainder was stated as follows by Irving Brant, op. cit. supra, note 1, 9—10:
'In 1794 the American people were in a state of excitement comparable to that which exists today. Supporters of the French Revolution had organized the Democratic Societies—blatantly adopting that subversive title. Then the Whisky Rebellion exploded in western Pennsylvania. The Democratic Societies were blamed. A motion censuring the Societies was introduced in the House of Representatives.
'There, in 1794, you had the basic division in American thought—on one side the doctrine of political liberty for everybody, with collective security resting on the capacity of the people for self-government; on the other side the doctrine that the people could not be trusted and political liberty must be restrained.
'James Madison challenged this latter doctrine. The investigative power of Congress over persons, he contended, was limited to inquiry into the conduct of individuals in the public service. 'Opinions,' he said, 'are not the subjects of legislation.' Start criticizing people for abuse of their reserved rights, and the censure might extend to freedom of speech and press. What would be the effect on the people thus condemned? Said Madison:
"It is in vain to say that this indiscriminate censure is no punishment. * * * Is not this proposition, if voted, a bill of attainder?'
'Madison won his fight, not because he called the resolution a bill of attainder, but because it attainted too many men who were going to vote in the next election. The definition, however, was there—a bill of attainder—and the definition was given by the foremost American authority on the principles of liberty and order underlying our system of government.'
3
The three exceptions referred to were (1) § 202(n); (2) Act of September 1, 1954, 68 Stat. 1142, 5 U.S.C. §§ 2281—2288, 5 U.S.C.A. §§ 2281—2288; (3) Regulation of the Social Security Administration, 20 CFR § 403.409—denying dependent's benefits to a person found guilty of felonious homicide of the insured worker.
4
Brandt, op. cit., supra, note 1, states at p. 9:
'What were the framers aiming at when they forbade bills of attainder? They were, of course, guarding against the religious passions that disgraced Christianity in Europe. But American bills of attainder, just before 1787, were typically used by Revolutionary assemblies to rid the states of British Loyalists. By a curious coincidence, it was usually the Tory with a good farm who was sent into exile, and all too often it was somebody who wanted that farm who induced the legislature to attaint him. Patriotism could serve as a cloak for greed as easily as religion did in that Irish Parliament of James the Second.
'But consider a case in which nothing could be said against the motive. During the Revolution, Governor Patrick Henry induced the Virginia legislature to pass a bill of attainder condemning Josiah Phillips to death. He was a traitor, a murderer, a pirate and an outlaw. When ratification of the new Constitution came before the Virginia Convention, Henry inveighed against it because it contained no Bill of Rights. Edmund Randolph taunted him with his sponsorship of the Phillips bill of attainder. Henry then made the blunder of defending it. The bill was warranted, he said, because Phillips was no Socrates. That shocking defense of arbitrary condemnation may have produced the small margin by which the Constitution was ratified.'
1
The Alien Registration Act, 1940, 54 Stat. 673, made membership in an organization which advocates the overthrow of the Government of the United States by force or violence a ground for deportation even though the membership was terminated prior to the passage of that statute. See Harisiades v. Shaughnessy, 342 U.S. 580, 72 S.Ct. 512, 96 L.Ed. 586. Until the passage of the Internal Security Act of 1950, 64 Stat. 1006, 1008, it was necessary for the Government to prove in each case in which it sought to deport an alien because of membership in the Communist Party that that organization in fact advocated the violent overthrow of the Government. The 1950 Act expressly made deportable aliens who at the time of entry, or at any time thereafter were 'members of or affiliated with * * * the Communist Party of the United States.' See Galvan v. Press, 347 U.S. 522, 529, 74 S.Ct. 737, 742, 98 L.Ed. 911.
2
A comparable annuity was worth, at the time appellee's benefits were canceled, approximately $6,000. To date he has lost nearly $2,500 in benefits.
3
The Court, recognizing that Cummings v. Missouri, 4 Wall. 277, 18 L.Ed.2d 356, and Ex parte Garland, 4 Wall. 333, 18 L.Ed. 366, strongly favor the conclusion that § 202(n) was enacted with punitive intent, rejects the force of those precedents as drawing 'heavily on the Court's first-hand acquaintance with the events and the mood of the then recent Civil War, and 'the fierce passions which that struggle aroused." This seems to me to say that the provision of § 202(n) which cuts off benefits from aliens deported for past Communist Party membership was not enacted in a similar atmosphere. Our judicial detachment from the realities of the national scene should not carry us so far. Our memory of the emotional climate stirred by the question of communism in the early 1950's cannot be so short.
4
See H.R.Rep. No. 1698, 83d Cong., 2d Sess. 24—25.
5
See S.Rep. No. 1987, 83d Cong., 2d Sess. 23; H.R.Conf.Rep. No. 2679, 83d Cong., 2d Sess. 4.
6
See Court's opinion, ante, note 1.
7
See the Court's opinion, ante, note 13.
8
It is unnecessary for me to reach the question whether the statute also constitutes a bill of attainder.
| 23
|
363 U.S. 666
80 S.Ct. 1288
4 L.Ed.2d 1478
Walter SCHILLING, Petitioner,v.William P. ROGERS, Attorney General.
No. 319.
Argued Feb. 29 and March 1, 1960.
Decided June 20, 1960.
Mr. Henry I. Fillman, New York City, for petitioner.
Mr. Robert Kramer, Washington, D.C., for respondent.
Mr. Justice HARLAN delivered the opinion of the Court.
1
Section 32(a) of the Trading with the Enemy Act (added by 60 Stat. 50, as amended, 50 U.S.C.Appendix, § 32(a), 50 U.S.C.A.Appendix, § 32(a)) authorizes the return in certain circumstances of property vested by the United States during World War II. Under that provision:
2
'The President, or such officer or agency as he may designate, may return any property or interest vested in or transferred to the Alien Property Custodian (other than any property or interest acquired by the United States prior to December 18, 1941), or the net proceeds thereof, whenever the President or such officer or agency shall determine * * *'
3
that the following conditions are met: (1) the claimant was the owner of the property in question prior to its vesting, or is the legal representative or successor in interest of the owner;1 (2) he was not a member of any of several excluded classes, summarized in the margin;2 (3) the property was not used pursuant to a 'cloaking' arrangement, whereby the interest of an ineligible person in the property was concealed;3 (4) there is no danger of liability in respect of the property attaching to the Custodian under the renegotiation statutes;4 and (5) 'such return is in the interest of the United States.'5
4
The particular provision involved in this case is paragraph 2(D) of § 32(a), which makes ineligible citizens of certain enemy countries who were present in those countries after the onset of hostilities, and its first proviso (added by 60 Stat. 930), which exempts from that ineligibility certain persons who were the victims of persecution.6 The question for decision is whether the District Court had jurisdiction to review a determination of the Director, Office of Alien Property, sanctioned by the respondent Attorney General, holding this proviso inapplicable to the facts presented by the petitioner's claim.7
5
Petitioner, a national and resident of Germany at all material times, duly filed with the Attorney General a claim under the § 32(a)(2)(D) proviso for the return of the proceeds of certain property vested by the respondent's predecessors in 1942, 1947, and 1948, asserting an interest therein of some $68,500. He alleged that throughout the relevant period he, as an 'anti-Nazi,' claimed to have been a discriminated-against political group, had been deprived of full rights of German citizenship, in that he had been denied admission to the practice of law. A Hearing Examiner recommended allowance of the claim, but his recommendation was rejected by the Director on the ground that petitioner was ineligible for relief under the § 32(a)(2)(D) proviso.8 The Attorney General refused review. Petitioner then sued in the District Court to review the administrative determination, claiming it to have been arbitrary and illegal. The court denied the Government's motion to dismiss the complaint for want of jurisdiction. The Court of Appeals reversed, holding, in line with its own prior course of decisions, that judicial review of the administrative disposition was precluded by § 7(c) of the Trading with the Enemy Act, 50 U.S.C.A.Appendix, § 7(c). 106 U.S.App.D.C. 8, 268 F.2d 584. Because of the importance of the question in the proper administration of the Trading with the Enemy Act we brought the case here. 361 U.S. 874, 80 S.Ct. 138, 4 L.Ed.2d 112. For reasons given hereafter we affirm the judgment below.
6
Petitioner's principal reliance is upon § 10 of the Administrative Procedure Act which provides for judicial review of agency action '(e)xcept so far as (1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion.' 60 Stat. 243, 5 U.S.C. § 1009, 5 U.S.C.A. § 1009. We find that both such limitations are applicable here.
Section 7(c) of the Act provides:
7
'The sole relief and remedy of any person having any claim to any money or other property heretofore or hereafter * * * transferred * * * to the Alien Property Custodian * * * shall be that provided by the terms of this Act * * *.' 40 Stat. 1021.
8
We perceive no basis for petitioner's contention that § 7(c) limits only the remedies available to nonenemies under § 9(a), or for construing § 7(c), passed in 1918, as not being applicable to § 32, passed in 1946. The language of the section is 'all-inclusive,' Becker Steel Co. of America v. Cummings, 296 U.S. 74, 79, 56 S.Ct. 15, 18, 80 L.Ed. 54, and it speaks to the future as well as the past. See also Central Union Trust Co. of New York v. Garvan, 254 U.S. 554, 568, 41 S.Ct. 214, 216, 65 L.Ed. 403.
9
The only express provision in the Trading with the Enemy Act for recourse to the courts by those claiming the return of property vested during World War II is that contained in § 9(a). That section, however, is applicable only to persons not enemies or allies of enemies as defined in the relevant statutes, and hence is not available to this petitioner, an enemy national.9 While § 9(c) also entitles certain classes of 'enemies' enumerated in § 9(b) similarly to sue in the courts to recover vested property whose return is authorized under § 9(b), those sections apply only to World War I vestings. See Feyerabend v. McGrath, 89 U.S.App.D.C. 33, 189 F.2d 694; cf. Markham v. Cabell, 326 U.S. 404, 66 S.Ct. 193, 90 L.Ed. 165. Although § 32(a) broadened the categories of those having an enemy status who were eligible for the return of property vested during World War II, unlike § 9(c) it contains no express provision for judicial relief in respect of such claims.
10
The question then is whether a right to such relief can fairly be implied, for we shall assume that if such be the case the requirements of § 7(c) would be satisfied. The terms of § 32 and its legislative history speak strongly against any such implication. The absence in § 32 of any provision for judicial relief respecting 'enemy' claims for the return of property vested during World War II stands in sharp contrast to the presence of such a provision in s 9(c) with respect to certain enemy claims arising out of World War I vestings. The original version of what ultimately became § 32 did contain a provision for judicial relief comparable to that in § 9(c), not applicable, however, to property of enemy national-residents, as well as a 'sole relief and remedy' provision comparable to that in § 7(c)—H.R. 4840, § 32(b), (c), in Hearings before Subcommittee No. 1 of the Committee on the Judiciary, House of Representatives on H.R. 4840, 78th Cong., 2d Sess., pp. 1—2—but the subsequent draft of the bill, substantially in the form as finally enacted in March 1946 (60 Stat. 50), omitted both provisions. See H.R. 3750, in Hearings before Subcommittee No. 1 of the Committee on the Judiciary, House of Representatives, on H.R. 3750, 79th Cong., 1st Sess., pp. 1—2. While the legislative record contains no explanation of these omissions, the committee hearings on H.R. 3750 and those on subsequent amendments to the Act preclude the view that it was contemplated that persons having an enemy status, still less those who were nationals and residents of enemy countries, should have the right of recourse to the courts with respect to administrative denials of return claims.
11
Speaking to H.R. 3750 at the initial committee hearing. Mr. Markham, then Alien Property Custodian, stated:
12
'I want to be sure I make this clear. Supposing a person applies to the Custodian for the return of a property, and for reasons that I deem appropriate under the bill I refuse to return the property. Now, we will say this person would have to be a technical enemy, a Frenchman. He has no right to compel me to return it under this bill.' Hearings before Subcommittee No. 1 of the Committee on the Judiciary, House of Representatives, on H.R. 3750, 79th Cong., 1st Sess., p. 14; see also pp. 11, 15.
13
And when a few months later, in August 1946, various amendments to the statute were considered and the § 32(a)(2)(D) proviso was added (60 Stat. 930), § 32 came under severe criticism because of the absence of provisions for judicial relief in respect of return claims by technical enemies. See Hearings before a Subcommittee of the Senate Committee on the Judiciary, on S. 2378 and S. 2039, 79th Cong., 2d Sess., pp. 57—59, 61, 62—63. The affording of such relief to enemy nationals was, however, at no time suggested. Congress, nevertheless, permitted § 32 to stand without enacting provisions for such judicial relief,10 and later proposed legislation of that character also failed of enactment. See S. 2544, 82d Cong., 2d Sess.; S. 34, 83d Cong., 1st Sess.11
14
The conclusion which the history of § 32 impels is confirmed by the text of the section and other provisions of the Act. The absence of any provision for recourse to the courts in connection with § 32(a) return claims contrasts strongly with the care that Congress took to provide for and limit judicial remedies with respect to other aspects of the section and other provisions of the Act. See, e.g., §§ 32(d), 32(e), 32(f),12 33, 34(e), 34(f), 34(i). It is not of moment that these provisions concerned direct judicial relief, and not court review of denials of administrative relief. The point is that in this Act Congress was advertent to the role of courts, and an absence in any specific area of any kind of provision for judicial participation strongly indicates a legislative purpose that there be no such participation. Beyond this, the permissive terms in which the § 32 return provisions are drawn (363 U.S. at page 667, 80 S.Ct. at page 1290) persuasively indicate that their administration was committed entirely to the discretionary judgment of the Executive branch 'without the intervention of the courts.' See Work v. United States ex rel. Rives, 267 U.S. 175, 182, 45 S.Ct. 252, 254, 69 L.Ed. 561.
15
Petitioner, however, relying on McGrath v. Kristensen, 340 U.S. 162, 71 S.Ct. 224, 95 L.Ed. 173, contends that even though he might not be entitled to judicial review of an adverse administrative determination on the merits of his claim, he is nonetheless entitled to such review on the issue of his eligibility under the § 32(a)(2)(D) proviso, the only issue here involved. The Kristensen case, involving eligibility for suspension of deportation under § 244 of the Immigration and Nationality Act (66 Stat. 214, 8 U.S.C. § 1254, 8 U.S.C.A. § 1254), bears little resemblance to the situation involved here. See Heikkila v. Barber, 345 U.S. 229, 233, 73 S.Ct. 603, 605, 97 L.Ed. 972; Switchmen's Union of North America v. National Mediation Board, 320 U.S. 297, 301, 64 S.Ct. 95, 97, 88 L.Ed. 61. The structure of § 32(a) does not permit of any such distinction in this case. Compare H.R. 4840, 78th Cong., 2d Sess., § 32(a). Indeed, it is not certain whether petitioner's theory of partial reviewability would apply only to the proviso with which he is concerned; to all of paragraph (2), but only to that paragraph; or to paragraphs (1), (3), and (4) as well (see 363 U.S. at pages 667—668, 80 S.Ct. at pages 1290—1291, and notes 1—4). None of these alternatives is acceptable. As to the first and second, no reason appears why either of these categories should be singled out for special treatment, while the third would make reviewable determinations which involve factors with which only the Executive Branch can satisfactorily deal. See, e.g., Hearings before Subcommittee No. 1 of the Committee on the Judiciary, House of Representatives, on H.R. 3750, 79th Cong., 1st Sess., p. 4 (proof of prevesting ownership); Hearings before Subcommittee No. 1 of the Committee on the Judiciary, House of Representatives, on H.R. 5089, 79th Cong., 2d Sess., p. 37 (proof of 'cloaking' arrangements). Beyond that, we think the congressional decision to spell out in some detail certain limitations on the power it was conferring on the Executive was not designed to bestow rights on claimants, arising out of an assertedly too-narrow reading by the Executive of the discretionary power given him. Rather we consider the specifications of paragraphs (1) through (4) as designed to provide guides for the Executive, thereby lessening the administrative burden of decision. See Hearings before a Subcommittee of the Senate Committee on the Judiciary, on S. 2378 and S. 2039, 79th Cong., 2d Sess., p. 19.
16
We conclude that the Trading with the Enemy Act excludes a judicial remedy in this instance, and that because of this, as well as because of the discretionary character of the administrative action involved, the Administrative Procedure Act, by its own terms (363 U.S. at page 670, 80 S.Ct. at page 1292), is unavailing to the petitioner.13
17
Petitioner's other contentions may be dealt with shortly. It is urged that judicial review is in any event available because the complaint, whose allegations as the case comes here must be taken as true, alleges that the administrative action was arbitrary and capricious. However, such conclusory allegations may not be read in isolation from the complaint's factual allegations and the considerations set forth in the administrative decision upon which denial of this claim was based. See Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, 401, 14 S.Ct. 1047, 1056, 38 L.Ed. 1014. So read, it appears that the complaint should properly be taken as charging no more than that the administrative action was erroneous. This is not a case in which it is charged either that an administrative official has refused or failed to exercise a statutory discretion, or that he has acted beyond the scope of his powers, where the availability of judicial review would be attended by quite different considerations than those controlling here. Cf., e.g., United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681; Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210.
18
Finally, petitioner's reliance on the Declaratory Judgments Act, 28 U.S. C.A. §§ 2201, 2202 carries him no further. Section 7(c) of the Trading with the Enemy Act embraces that form of judicial relief as well as others. Additionally, the Declaratory Judgments Act is not an independent source of federal jurisdiction, Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667, 671, 70 S.Ct. 876, 879, 94 L.Ed. 1194; the availability of such relief presupposes the existence of a judicially remediable right. No such right exists here.
19
We conclude that the Court of Appeals correctly held that the District Court lacked jurisdiction over this action, and that its judgment must be affirmed.
20
Affirmed.
21
Mr. Justice BRENNAN, with whom THE CHIEF JUSTICE, Mr. Justice BLACK, and Mr. Justice DOUGLAS join, dissenting.
22
This Court has gone far towards establishing the proposition that preclusion of judicial review of administrative action adjudicating private rights is not lightly to be inferred. See Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210; Harmon v. Brucker, 355 U.S. 579, 78 S.Ct. 433, 2 L.Ed.2d 503; Stark v. Wickard, 321 U.S. 288, 64 S.Ct. 559, 88 L.Ed. 733; American School of Magnetic Healing v. McAnnulty, 187 U.S. 94, 23 S.Ct. 33, 47 L.Ed. 90. Generalizations are dangerous, but with some safety one can say that judicial review of such administrative action is the rule, and nonreviewability an exception which must be demonstrated.1 To be sure, a clear command of the statute will preclude review; and such a command of the statute may be inferred from its purpose, though Leedom v. Kyne, supra, where I thought nonreviewability proved from the congressional purpose, shows that the Court is far from quick to draw such a conclusion. I cannot agree that the statute here gives any clear direction that this administrative determination that as a matter of law petitioner was ineligible for the exercise of discretionary relief under § 32(a) should not be reviewable by the courts. Questions as to the scope of that review, of course, are not now before us; simply whether the power exists at all.
23
Section 7(c) of the Act states that the Act's remedies shall be '(t)he sole relief and remedy' of claimants of vested property, and, to be sure, this language is 'all-inclusive,' Becker Steel Co. of America v. Cummings, 296 U.S. 74, 79, 56 S.Ct. 15, 80 L.Ed. 54. Let us, then, take a close and fully-focused look at what those remedies include, and compare them with what petitioner seeks.
24
Section 9(a) of the Act, under which petitioner of course makes no claim, provides a judicial remedy for those who are not enemies and not allies of enemies; they may sue in equity for the return of their property.2 Section 9(c) gives the same remedy to certain classes of enemies.3 But it is apparent from both these provisions that they contemplate an independent judicial remedy—a suit to return property; not an action to review certain determinations of administrative officers. There is not even a provision that application must be made for administrative relief before suit is brought. There simply is a requirement for the filing of a notice of claim, which the statute clearly distinguishes from making an application for an administrative return, the latter being optional. Draeger Shipping Co. v. Crowley, D.C., 49 F.Supp. 215; Duisberg v. Crowley, D.C., 54 F.Supp. 365. See Stoehr v. Wallace, 255 U.S. 239, 246, 41 S.Ct. 293, 296, 65 L.Ed. 604. Even where the applicant chooses to seek an administrative return, suit may be instituted before the administrative action is completed. The administrative remedy and the judicial remedy are each completely independent of the other; Congress has made this clear even to the extent of putting an 'and/or' on the statute books. In no sense, then, can the independent judicial remedy of § 9 be said to be a judicial review of administrative action. It is independent of any administrative action's being taken. It requires the courts to make a plenary, de novo adjudication of all the controverted issues as they would in any lawsuit between citizens.
25
Section 32(a), under which petitioner has applied for relief, on the other hand provides simply for an administrative remedy. That it does, of course, under § 7(c) precludes the inference of any independent judicial remedy such as § 9 provides. But there is no reason why it should preclude the inference that administrative action taken under it should be subject to judicial review. The courts have developed many principles defining and limiting the quantum of judicial review that may be afforded administrative adjudication. This generally narrow character of judicial review, in contrast to an independent lawsuit directed at the same end as an administrative adjudication, points up the distinction between the independent action under § 9 and what is contended for here. In the latter, the courts cannot order the return of the property. They simply may say that the administrator cannot stand on the ground he gave for not returning it. See Greene v. McElroy, 360 U.S. 474, 510, 79 S.Ct. 1400, 1421, 3 L.Ed.2d 1377 (concurring opinion). The former is clearly precluded, but the latter hardly is. The approach to interpretation that cases like Kyne, Harmon and Stark symbolize should indicate that judicial review of the administrative action under § 32(a) is available. Section 7(c) is by no means offended by this since this construction recognizes that the sole remedy under § 32(a) is administrative in nature, but attaches to that administrative remedy the general attribute of administrative remedies in our system—judicial review.
26
The Court points to the legislative history of § 32(a) as indicating a contrary conclusion. It says that a judicial remedy was originally provided for in early versions of the bill which added § 32(a) to the statute, but that the final enactment omitted it. This would be very relevant if what had been originally contained in the bill had been a provision for judicial review of action taken under § 32(a), such as what petitioner now contends is implicit. But it was not; it was rather a provision for an independent judicial remedy, patterned entirely in the style of § 9.4 That it was omitted of course adds another proof that there can be no independent judicial action to get a return under § 32(a); but it does not tell us that normal judicial review into administrative action under § 32(a) is to be foreclosed. Mr. Markham's remarks, quoted by the Court, are of course explicable on the ground that there was no counterpart of § 9's provision for an independent lawsuit in § 32(a). In fact, they were spoken in response to a question whether 'the individual whose property has been taken or affected can appeal to the courts of the land to have his equity determined.' Hearing before Subcommittee No. 1, Committee on the Judiciary, House of Representatives, on H.R. 3750, 79th Cong., 1st Sess., p. 13. The question is a good description of the functions of courts under § 9. It does not describe the functions of courts exercising a review function of administrative action under § 32(a). The subsequent legislation which the Court mentions as having failed of passage, S. 2544, 82d Cong., 2d Sess.; S. 34, 83d Cong., 1st Sess., was not legislation to provide judicial review, but to afford an independent judicial remedy similar to § 9.5 Thus it is apparent that the alternative that was presented to Congress and rejected clearly enough was not ordinary judicial review of determinations under § 32(a), but independent judicial action of a sort comparable to § 9's.
27
The Court does not demonstrate any policy on which Congress may have been acting and from which it might be inferred that judicial review was impliedly precluded under § 32. Congress clearly precluded independent lawsuits, but there is no demonstration that it acted in pursuance of any purpose which would be broad enough impliedly to negate judicial review of administrative action as well. So there is no reason why the general principle should not apply: 'Generally, judicial relief is available to one who has been injured by an act of a government official which is in excess of his express or implied powers.' Harmon v. Brucker, supra, 355 U.S. at pages 581 582, 78 S.Ct. at page 435.
28
There is then clearly established jurisdiction to review under the general principles which find expression in § 10 of the Administrative Procedure Act; the statute does not 'preclude judicial review.' 60 Stat. 243, 5 U.S.C. § 1009, 5 U.S.C.A. § 1009. But the Court also holds that, within the meaning of § 10, 'agency action is by law committed to agency discretion.' Since want of jurisdiction in the District Court is found, I take it the Court holds that the question, review of which is now sought, which is an issue of statutory construction, is totally and exclusively for the administrative officers to determine—not simply that the courts are to give their determination of this question of law considerable weight. Cf. National Labor Relations Board v. Hearst Publications, Inc., 322 U.S. 111, 130, 64 S.Ct. 851, 860, 88 L.Ed. 1170; Gray v. Powell, 314 U.S. 402, 411, 62 S.Ct. 326, 332, 86 L.Ed. 301. Once it is established that the statute does not preclude judicial review, this conclusion seems to me untenable. The issue is a question of law; the construction of a detailed and moderately specified standard. It is not like the ultimate determination that the return be 'in the interest of the United States,' § 32(a)(5), which is clearly where the ultimate reservoir of discretion lies under § 32(a). This determination was never reached. We need not speculate about the breadth of judicial inquiry in judicial review where the administrative decision not to return the property is based on that ground, or is based on one of the other grounds under the statute. The quantum of review can be adjusted to the problem before the courts. Here the determination not to return was based on a holding that petitioner did not come within the first proviso to § 32(a)(2)(D). The proviso's terms were viewed administratively not as guides to an administrative discretion but as legal standards. Under commonplace principles, the determination must stand or fall on that basis. It may be that the novelty of the standards of that proviso (see Subcommittee Hearings, Senate Committee on the Judiciary, on S. 2378 and S. 2039, 79th Cong., 2d Sess., p. 19) should teach the courts to give considerable weight to the administrative construction of the law. But that is not to say, as the Court does, that it is so much a matter of administrative discretion as to preclude judicial review.6 To my mind, McGrath v. Kristensen, 340 U.S. 162, 71 S.Ct. 224, 95 L.Ed. 173, is squarely in point. There there was a statute which bristled with discretion as much as this one. But where the administrative decision under it was not rendered on the basis for the exercise of discretion the statute provided, but as a matter of law, judicial review was available. We retreat from established principles of administrative law when we say it is unavailable here. The judgment of the Court of Appeals should be reversed, and the order of the District Court declining to dismiss the complaint for want of jurisdiction should be affirmed.
1
§ 32(a)(1): 'That the person who has filed a notice of claim for return, in such form as the President or such officer or agency may prescribe, was the owner of such property or interest immediately prior to its vesting in or transfer to the Alien Property Custodian, or is the legal representative (whether or not appointed by a court in the United States), or successor in interest by inheritance, devise, bequest, or operation of law, of such owner * * *.'
2
§ 32(a)(2) disqualifies: (A) the Governments of Germany, Japan, Bulgaria, Hungary and Rumania; (B) corporations or associations organized under the laws of such nations; (C) persons voluntarily resident since Dec. 7, 1941, in any such nation, other than American citizens, certain diplomatic officers, or certain persecuted persons; (D) citizens of such nations, other than certain persecuted persons, who were present or engaged in business there between Dec. 7, 1941, and Mar. 8, 1946; and (E) certain foreign corporations or associations which, after Dec. 7, 1941, were controlled by persons falling within the above categories.
3
§ 32(a)(3): 'that the property or interest claimed, or the net proceeds of which are claimed, was not at any time after September 1, 1939, held or used, by or with the assent of the person who was the owner thereof immediately prior to vesting in or transfer to the Alien Property Custodian, pursuant to any arrangement to conceal any property or interest within the United States of any person ineligible to receive a return under subsection (a)(2) of this section * * *.'
4
§ 32(a)(4): 'that the Alien Property Custodian has no actual or potential liability under the Renegotiation Act or the Act of October 31, 1942 (56 Stat. 1013; 35 U.S.C. §§ 89—96), in respect of the property or interest or proceeds to be returned and that the claimant and his predecessor in interest, if any, have no actual or potential liability of any kind under the Renegotiation Act or the said Act of October 31, 1942; or in the alternative that the claimant has provided security or undertakings adequate to assure satisfaction of all such liabilities or that property or interest or proceeds to be retained by the Alien Property Custodian are adequate therefor * * *.'
5
§ 32(a)(5).
6
§ 32(a)(2)(D) disqualifies: 'an individual who was at any time after December 7, 1941, a citizen or subject of Germany, Japan, Bulgaria, Hungary, or Rumania, and who on or after December 7, 1941, and prior to the date of the enactment of this section, was present (other than in the service of the United States) in the territory of such nation or in any territory occupied by the military or naval forces thereof or engaged in any business in any such territory: Provided, That notwithstanding the provisions of this subdivision (D) return may be made to an individual who, as a consequence of any law, decree, or regulation of the nation of which he was then a citizen or subject, discriminating against political, racial, or religious groups, has at no time between December 7, 1941, and the time when such law, decree, or regulation was abrogated, enjoyed full rights of citizenship under the law of such nation * * *.'
7
On May 16, 1946, the President delegated his functions under § 32(a) to the Alien Property Custodian. Executive Order No. 9725, 11 Fed.Reg. 5381, 50 U.S.C.A.Appendix, § 20 note. On Oct. 15, 1946, the functions of the Custodian were transferred to the Attorney General. Executive Order No. 9788, 11 Fed.Reg. 11981, 50 U.S.C.A.Appendix, § 6 note.
8
The Director stated the essence of his decision as follows: 'Even if it were to be assumed that denial of a license to practice law deprived claimant of full rights of citizenship, his claim must be disallowed for the reason that he was not a member of a political, racial or religious group that was discriminated against. Anti-Nazis and non-Nazis do not constitute a political group.' (Citing past administrative decisions.)
9
Section 9(a) authorizes '(a)ny person not an enemy or ally of enemy' (defined in § 2 of the Act, 50 U.S.C.A.Appendix, § 2 as supplemented by the First War Powers Act, 1941, 55 Stat. 838) to sue in equity for the return of vested property in which he claims an interest, either in the District Court for the District of Columbia or in the District Court of the district in which the claimant resides. 40 Stat. 419, as amended, 50 U.S.C.Appendix, § 9(a), 50 U.S.C.A.Appendix, § 9(a). As a German national and resident, petitioner is concededly an 'enemy' under the statute.
10
At the same time, however, Congress enacted other provisions relating to judicial remedies, § 33, 50 U.S.C.A.Appendix, § 33 providing a statute of limitations on the commencement of suits under § 9, and § 34, 50 U.S.C.A.Appendix, § 34 providing for judicial review of administrative determinations on debt claims allowable out of vested property (60 Stat. 925). In connection with the former section there was spread in the Congressional Record, with the approval of the Chairman and Ranking Member of the House Judiciary Committee, a letter from the Custodian stating his understanding that 'this amendment is not to be regarded as implying that there is judicial review under section 32.' 92 Cong.Rec. 10486. Similarly, in connection with the enactment of § 32, a few months before, Congress had added to the Act § 20, 50 U.S.C.A.Appendix, § 20 providing for judicial review of administrative allowances of counsel fees in return proceedings before the Custodian, 60 Stat. 54. See also S.Rep. No. 920, 79th Cong., 2d Sess., p. 7.
11
More particularly with reference to the § 32(a)(2)(D) proviso, neither the Committee hearings preceding its enactment, see Hearings before a Subcommittee of the Senate Committee on the Judiciary, on S. 2378 and S. 2039, 79th Cong., 2d Sess.; cf. Hearings before Subcommittee No. 1 of the Committee on the Judiciary, House of Representatives, on H.R. 5089, 79th Cong., 2d Sess., nor later Senate or House Reports referring to the proviso see S.Rep. No. 784, 81st Cong., 1st Sess.; H.R.Rep. No. 2338, 81st Cong., 2d Sess.; S.Rep. No. 600, 82d Cong., 1st Sess.; Final Report of the Subcommittee on Administration of the Trading with the Enemy Act, Senate Committee on the Judiciary, pursuant to S.Res. 245, 82d Cong., 2d Sess., as amended by S.Res. 47, and S.Res. 120, 83d Cong., 1st Sess.—contain any suggestion that judicial review was contemplated in connection with such claims.
12
This section, which requires the Custodian to publish in the Federal Register a 30-day notice of his intention to return vested property to claimants other than residents of the United States or domestic corporations, provides that publication of such notice 'shall confer no right of action upon any person to compel the return of any such property,' and further that any such notice may be revoked by the Custodian by appropriate publication in the Federal Register.
13
The fact that in a third-party suit affecting returned property, the courts must, in accordance with § 32(e), determine, if relevant, the claimant's eligibility under the § 32(a)(2)(D) proviso, does not militate against this conclusion. First, it is far from clear that in such circumstances the doctrine of primary jurisdiction would not call for a referral of that issue to the Attorney General. Cf. United States Navigation Co. v. Cunard S.S. Co., 284 U.S. 474, 52 S.Ct. 247, 76 L.Ed. 408; Far East Conference v. United States, 342 U.S. 570, 72 S.Ct. 492, 96 L.Ed. 576; Federal Maritime Board v. Isbrandtsen, 356 U.S. 481, 496—498, 78 S.Ct. 851, 860—862, 2 L.Ed.2d 926. Moreover, even if necessity compelled judicial determination in suits between private parties of the issue ordinarily disposed of under § 32(a), we would not be justified, in the context of the other provisions of this statute, in inferring from that a congressional willingness to have Executive determinations reviewed in court.
1
See Jaffe, The Right to Judicial Review, 71 Harv.L.Rev. 401, 432.
2
In pertinent part, § 9(a) provides:
'(a) Any person not an enemy or ally of enemy claiming any interest, right, or title in any money or other property which may have been conveyed, transferred, assigned, delivered, or paid to the Alien Property Custodian or seized by him hereunder and held by him or by the Treasurer of the United States, or to whom any debt may be owing from an enemy or ally of enemy whose property or any part thereof shall have been conveyed, transferred, assigned, delivered, or paid to the Alien Property Custodian or seized by him hereunder and held by him or by the Treasurer of the United States may file with the said custodian a notice of his claim under oath and in such form and containing such particulars as the said custodian shall require; and the President, if application is made therefor by the claimant, may order the payment, conveyance, transfer, assignment, or delivery to said claimant of the money or other property so held by the Alien Property Custodian or by the Treasurer of the United States, or of the interest therein to which the President shall determine said claimant is entitled: Provided, That no such order by the President shall bar any person from the prosecution of any suit at law or in equity against the claimant to establish any right, title, or interest which he may have in such money or other property. If the President shall not so order within sixty days after the filing of such application or if the claimant shall have filed the notice as above required and shall have made no application to the President, said claimant may institute a suit in equity in the United States District Court for the District of Columbia or in the district court of the United States for the district in which such claimant resides, or, if a corporation, where it has its principal place of business (to which suit the Alien Property Custodian or the Treasurer of the United States, as the case may be, shall be made a party defendant), to establish the interest, right, title, or debt so claimed, and if so established the court shall order the payment, conveyance, transfer, assignment, or delivery to said claimant of the money or other property so held by the Alien Property Custodian or by the Treasurer of the United States or the interest therein to which the court shall determine said claimant is entitled. * * *' 40 Stat. 419, as amended, 50 U.S.C.Appendix, § 9(a), 50 U.S.C.A.Appendix, § 9(a).
3
Section 9(c) provides:
'(c) Any person whose money or other property the President is authorized to return under the provisions of subsection (b) hereof may file notice of claim for the return of such money or other property, as provided in subsection (a) hereof, and thereafter may make application to the President for allowance of such claim and/or may institute suit in equity to recover such money or other property, as provided in said subsection, and with like effect. The President or the court, as the case may be, may make the same determinations with respect to citizenship and other relevant facts that the President is authorized make under the provisions of subsection (b) hereof.' As added, 41 Stat. 980, as amended, 50 U.S.C.Appendix, § 9(c), 50 U.S.C.A. § 9(c).
The relevant classes of enemies are set forth in § 9(b). Petitioner makes no claim under § 9(c).
4
In fact, the independent judicial remedy was not even put in pari materia with the administrative remedy under § 32(a). It simply provided:
'After filing a claim with the Alien Property Custodian pursuant to subsection (a) hereof, a claimant may institute a suit in equity in the United States District Court for the District of Columbia or in the district court of the United States for the district in which such claimant resides, or, if a corporation, where it has its principal place of business (to which suit the Custodian shall be made a party defendant), to establish that he is not a foreign country or national thereof as defined pursuant to subsection (b) of section 5 hereof, and to establish the interest, right, or title claimed. The claimant shall obtain a judgment or decree ordering the return to him of the interest, right, or title to which the court shall determine he is entitled, but only if the court shall adjudicate that he is not a foreign country or national thereof * * *.' § 32(b), H.R. 4840, in Hearing before Subcommittee No. 1, Committee on the Judiciary, House of Representatives, on H.R. 4840, 78th Cong., 2d Sess., pp. 1—2.
5
This legislation seems to have contemplated a judicial remedy much broader than that of the early provisions before the addition of § 32, see note 4, supra. The bills covered '(a)ny person eligible for a return under this section' (§ 32) and provided that such a person, after filing a notice of claim, might 'institute a suit in equity to recover such money or other property in the manner provided by subsection 9(a) hereof and with like effect.'
6
One of the grounds on which the administrative officials may decline return under § 32(a) is that the claimant was not the owner of the property at the time it was vested, or the successor thereof. § 32(a)(1). Is this simply to be deemed a guide to the administrative discretion in granting returns, or a legal standard?
| 78
|
363 U.S. 420
80 S.Ct. 1502
4 L.Ed.2d 1307
John A. HANNAH et al., Appellants,v.Margaret M. LARCHE et al. John A. HANNAH et al., Petitioners, v. J. A. H. SLAWSON et al.
Nos. 549, 550.
Argued Jan. 18 and 19, 1960 on the Petition for Writ of Certiorari, theJurisdiction on Appeal, and on the Merits.
Decided June 20, 1960.
Mr. Lawrence E. Walsh, Washington, D.C., for appellants in No. 549 and for petitioners in No. 550.
Mr. Jack P. F. Gremillion, Baton Rouge, La., for appellees in No. 549.
Mr. W. M. Shaw, Homer, La., for respondents in No. 550.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
These cases involve the validity of certain Rules of Procedure adopted by the Commission on Civil Rights, which was established by Congress in 1957.1 Civil Rights Act of 1957, 71 Stat. 634, 42 U.S.C. §§ 1975—1975e, 42 U.S.C.A. §§ 1975—1975e. They arise out of the Commission's investigation of alleged Negro voting deprivations in the State of Louisiana. The appellees in No. 549 are registrars of voters in the State of Louisiana, and the respondents in No. 550 are private citizens of Louisiana.2 After having been summoned to appear before a hearing which the Commission proposed to conduct in Shreveport, Louisiana, these registrars and private citizens requested the United States District Court for the Western District of Louisiana to enjoin the Commission from holding its anticipated hearing. It was alleged, among other things, that the Commission's Rules of Procedure governing the conduct of its investigations were unconstitutional. The specific rules challenged are those which provide that the identity of persons submitting complaints to the Commission need not be disclosed, and that those summoned to testify before the Commission, including persons against whom complaints have been filed, may not cross-examine other witnesses called by the Commission. The District Court held that the Commission was not authorized to adopt the Rules of Procedure here in question, and therefore issued an injunction which prohibits the Commission from holding any hearings in the Western District of Louisiana as long as the challenged procedures remain in force. The Commission requested this Court to review the District Court's decision.3 We granted the Commission's motion to advance the cases, and oral argument was accordingly scheduled on the jurisdiction on appeal in No. 549, on the petition for certiorari in No. 550, and on the merits of both cases.
2
Having heard oral argument as scheduled, we now take jurisdiction in No. 549 and grant certiorari in No. 550. The specific questions which we must decide are (1) whether the Commission was authorized by Congress to adopt the Rules of Procedure challenged by the respondents, and (2) if so, whether those procedures violate the Due Process Clause of the Fifth Amendment.
3
A description of the events leading up to this litigation is necessary not only to place the legal questions in their proper factual context, but also to indicate the significance of the Commission's proposed Shreveport hearing. During the months prior to its decision to convene the hearing, the Commission had received some sixty-seven complaints from individual Negroes who alleged that they had been discriminatorily deprived of their right to vote. Based upon these complaints, and pursuant to its statutory mandate to 'investigate allegations in writing under oath or affirmation that certain citizens of the United States are being deprived of their right to vote and have that vote counted by reason of their color, race, religion, or national origin,'4 the Commission began its investigation into the Louisiana voting situation by making several ex parte attempts to acquire information. Thus, in March 1959, a member of the Commission's staff interviewed the Voting Registrars of Claiborne, Caddo, and Webster Parishes, but obtained little relevant information. During one of these interviews the staff member is alleged to have informed Mrs. Lannie Linton, the Registrar of Claiborne Parish, that the Commission had on file four sworn statements charging her with depriving Negroes of their voting rights solely because of their race. Subsequent to this interview, Mr. W. M. Shaw, Mrs. Linton's personal attorney, wrote a letter to Mr. Gordon M. Tiffany, the Staff Director of the Commission, in which it was asserted that Mrs. Linton knew the sworn complaints lodged against her to be false. The letter also indicated that Mrs. Linton wished to prefer perjury charges against the affiants, and Mr. Shaw therefore demanded that the Commission forward to him copies of the affidavits so that a proper presentment could be made to the grand jury. On April 14, 1959, Mr. Tiffany replied to Mr. Shaw's letter and indicated that the Commission had denied the request for copies of the sworn affidavits. Mr. Shaw was also informed of the following official statement adopted by the Commission:
4
'The Commission from its first meeting forward, having considered all complaints submitted to it as confidential because such confidentiality is essential in carrying out the statutory duties of the Commission, the Staff Director is hereby instructed not to disclose the names of complainants or other information contained in complaints to anyone except members of the Commission and members of the staff assigned to process, study, or investigate such complaints.'
5
A copy of Mr. Tiffany's letter was sent to Mr. Jack P. F. Gremillion, the Attorney General of Louisiana, who had previously informed the Commission that under Louisiana law the Attorney General is the legal adviser for all voting registrars in any hearing or investigation before a federal commission.
6
Another attempt to obtain information occurred on May 13, 1959, when Mr. Tiffany, upon Commission authorization, sent a list of 315 written interrogatories to Mr. Gremillion. These interrogatories requested very detailed and specific information, and were to be answered by the voting registrars of nineteen Louisiana parishes. Although Mr. Gremillion and the Governor of Louisiana had previously assented to the idea of written interrogatories, on May 28, 1959, Mr. Gremillion sent a letter to Mr. Tiffany indicating that the voting registrars refused to answer the interrogatories. The reasons given for the refusal were that many of the questions seemed unrelated to the functions of voting registrars, that the questions were neither accompanied by specific complaints nor related to specific complaints, and that the time and research required to answer the questions placed an unreasonable burden upon the voting registrars.
7
In response to this refusal, on May 29, 1959, Mr. Tiffany sent a telegram to Mr. Gremillion, informing the latter that the interrogatories were based upon specific allegations received by the Commission, and reaffirming the Commission's position that the identity of specific complainants would not be disclosed. Mr. Tiffany's letter contained a further request that the interrogatories be answered and sent to the Commission by June 5, 1959. On June 2, 1959, Mr. Gremillion wrote a letter to Mr. Tiffany reiterating the registrars' refusal, and again requesting that the names of complainants be disclosed.
8
Finally, as a result of this exchange of correspondence, and because the Commission's attempts to obtain information ex parte had been frustrated, the Commission, acting pursuant to Section 105(f) of the Civil Rights Act of 1957,5 decided to hold the Shreveport hearing commencing on July 13, 1959.
9
Notice of the scheduled hearing was sent to Mr. Gremillion, and between June 29 and July 6, subpoenas duces tecum were served on the respondents in No. 549, ordering them to appear at the hearing and to bring with them various voting and registration records within their custody and control. Subpoenas were also served upon the respondents in No. 550. These private citizens were apparently summoned to explain their activities with regard to alleged deprivations of Negro voting rights.6
10
On July 8, 1959, Mr. Tiffany wrote to Mr. Gremillion, enclosing copies of the Civil Rights Act and of the Commission's Rules of Procedure.7 Mr. Gremillion's attention was also drawn to Section 102(h) of the Civil Rights Act, which permits witnesses to submit, subject to the discretion of the Commission, brief and pertinent sworn statements for inclusion in the record.8
11
Two days later, on July 10, 1959, the respondents in No. 549 and No. 550 filed two separate complaints in the District Court for the Western District of Louisiana. Both complaints alleged that the respondents would suffer irreparable harm by virtue of the Commission's refusal to furnish the names of persons who had filed allegations of voting deprivations, as well as the contents of the allegations, and by its further refusal to permit the respondents to confront and cross-examine the persons making such allegations. In addition, both complaints alleged that the Commission's refusals not only violated numerous provisions of the Federal Constitution, but also constituted 'ultra vires' acts not authorized either by Congress or the Chief Executive. The respondents in No. 549 also alleged that they could not comply with the subpoenas duces tecum because Louisiana law prohibited voting registrars from removing their voting records except 'upon an order of a competent court,' and because the Commission was not such a 'court.' Finally, the complaint in No. 549 alleged that the Civil Rights Act was unconstitutional because it did not constitute 'appropriate legislation within the meaning of Section (2) of the XV Amendment.'
12
Both complaints sought a temporary restraining order and a permanent injunction prohibiting the members of the Commission (a) from compelling the 'testimony from or the production of any records' by the respondents until copies of the sworn charges, together with the names and addresses of the persons filing such charges were given to the respondents;9 (b) from 'conducting any hearing pursuant to the rules and regulations adopted by' the Commission; and (c) from 'conspiring together * * * or with any other person * * * to deny complainants their rights and privileges as citizens' of Louisiana or the United States 'or to deny to complainants their right to be confronted by their accusers, to know the nature and character of the charges made against them,' and to be represented by counsel. The complaint in No. 549 also sought a declaratory judgment that the Civil Rights Act of 1957 was unconstitutional.
13
On the day that the complaints were filed, the district judge held a combined hearing on the prayers for temporary restraining orders. On July 12, 1959, he found that the respondents would suffer irreparable harm if the hearings were held as scheduled, and he therefore issued the requested temporary restraining orders and rules to show cause why a preliminary injunction should not be granted. Larche v. Hannah, D.C., 176 F.Supp. 791. The order prohibited the Commission from holding any hearings which concerned the respondents or others similarly situated until a determination was made on the motion for a preliminary injunction.
14
Inasmuch as the complaint in No. 549 attacked the constitutionality of the Civil Rights Act, a three-judge court was convened pursuant to 28 U.S.C. § 2282, 28 U.S.C.A. § 2282. Since the complaint in No. 550 did not challenge the constitutionality of the Civil Rights Act of 1957, that case was scheduled to be heard by a single district judge. That district judge was also a member of the three-judge panel in No. 549, and a combined hearing was therefore held on both cases on August 7, 1959.
15
On October 7, 1959, a divided three-judge District Court filed an opinion in No. 549. Larche v. Hannah, 177 F.Supp. 816. The court held that the Civil Rights Act of 1957 was constitutional since it 'very definitely constitutes appropriate legislation' authorized by the Fourteenth and Fifteenth Amendments and Article I, Section 2, of the Federal Constitution. Id., at page 821. The court then held that since the respondents' allegations with regard to apprisal, confrontation, and cross-examination raised a 'serious constitutional issue,' this Court's decision in Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377, required a preliminary determination as to whether Congress specifically authorized the Commission 'to adopt rules for investigations * * * which would deprive parties investigated of their rights of confrontation and cross-examination and their right to be apprised of the charges against them.' 177 F.Supp. at page 822. The court found that Congress had not so authorized the Commission, and an injunction was therefore issued. In deciding the case on the issue of authorization, the court never reached the 'serious constitutional issue' raised by the respondents' allegations.10 The injunction prohibits the Commission from holding any hearing in the Western District of Louisiana wherein the registrars, 'accused of depriving others of the right to vote, would be denied the right of apprisal, confrontation, and cross examination.'11 The single district judge rendered a decision in No. 550 incorporating by reference the opinion of the three-judge District Court, and an injunction, identical in substance to that entered in No. 549, was issued.
I.
16
We held last Term in Greene v. McElroy, supra, that when action taken by an inferior governmental agency was accomplished by procedures which raise serious constitutional questions, an initial inquiry will be made to determine whether or not 'the President or Congress, within their respective constitutional powers, specifically has decided that the imposed procedures are necessary and warranted and has authorized their use.' Id., 360 U.S. at page 507, 79 S.Ct. at page 1419. The considerations which prompted us in Greene to analyze the question of authorization before reaching the constitutional issues presented are no less pertinent in this case. Obviously, if the Civil Rights Commission was not authorized to adopt the procedures complained of by the respondents, the case could be disposed of without a premature determination of serious constitutional questions. See Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L.Ed.2d 1012; Kent v. Dulles, 357 U.S. 116, 78 S.Ct. 1113, 2 L.Ed.2d 1204; Watkins v. United States, 354 U.S. 178, 77 S.Ct. 1173, 1 L.Ed.2d 1273; Peters v. Hobby, 349 U.S. 331, 75 S.Ct. 790, 99 L.Ed. 1129.
17
We therefore consider first the question of authorization. As indicated above, the Commission specifically refused to disclose to the respondents the identity of persons who had submitted sworn complaints to the Commission and the specific charges contained in those complaints. Moreover, the respondents were informed by the Commission that they would not be permitted to cross-examine any witnesses at the hearing. The respondents contend, and the court below held, that Congress did not authorize the adoption of procedural rules which would deprive those being investigated by the Commission of the rights to apprisal, confrontation, and cross-examination. The court's holding is best summarized by the following language from its opinion:
18
'(W)e find nothing in the Act which expressly authorizes or permits the Commission's refusal to inform persons, under investigation for criminal conduct, of the nature, cause and source of the accusations against them, and there is nothing in the Act authorizing the Commission to deprive these persons of the right of confrontation and cross-examination.' 177 F.Supp., at page 822.
19
After thoroughly analyzing the Rules of Procedure contained in the Civil Rights Act of 1957 and the legislative history which led to the adoption of that Act, we are of the opinion that the court below erred in its conclusion and that Congress did authorize the Commission to adopt the procedures here in question.
20
It could not be said that Congress ignored the procedures which the Commission was to follow in conducting its hearings. Section 102 of the Civil Rights Act of 1957 lists a number of procedural rights intended to safeguard witnesses from potential abuses. Briefly summarized, the relevant subdivisions of Section 102 provide that the Chairman shall make an opening statement as to the subject of the hearing; that a copy of the Commission's rules shall be made available to witnesses; that witnesses 'may be accompanied by their own counsel for the purpose of advising them concerning their constitutional rights'; that potentially defamatory, degrading, or incriminating testimony shall be received in executive session, and that any person defamed, degraded, or incriminated by such testimony shall have an opportunity to appear voluntarily as a witness and to request the Commission to subpoena additional witnesses; that testimony taken in executive session shall be released only upon the consent of the Commission; and that witnesses may submit brief and pertinent sworn statements in writing for inclusion in the record.12
21
The absence of any reference to apprisal, confrontation, and cross-examination, in addition to the fact that counsel's role is specifically limited to advising witnesses of their constitutional rights, creates a presumption that Congress did not intend witnesses appearing before the Commission to have the rights claimed by respondents. This initial presumption is strengthened beyond any reasonable doubt by an investigation of the legislative history of the Act.
22
The complete story of the 1957 Act begins with the 1956 House Civil Rights Bill, H.R. 627. That bill was reported out of the House Judiciary Committee without any reference to the procedures to be used by the Commission in conducting its hearings. H.R.Rep. No. 2187, 84th Cong., 2d Sess. During the floor debate, Representative Dies of Texas introduced extensive amendments designed to regulate the procedure of Commission hearings. 102 Cong.Rec. 13542. Those amendments would have guaranteed to witnesses appearing before the Commission all of the rights claimed by the respondents in these cases. The amendments provided, in pertinent part, that a person who might be adversely affected by the testimony of another 'shall be fully advised by the Commission as to the matters into which the Commission proposes to inquire and the adverse material which is proposed to be presented'; that a person adversely affected by evidence or testimony given at a public hearing could 'appear and testify or file a sworn statement in his own behalf'; that such a person could also 'have the adverse witness recalled' within a stated time; and that he or his counsel could cross-examine adverse witnesses.13
23
The bill, as finally passed by the House, contained all of the amendments proposed by Representative Dies. 102 Cong.Rec. 13998—13999. However, before further action could be taken, the bill died in the Senate. Although many proposals relating to civil rights were introduced in the 1957 Session of Congress, two bills became the prominent contenders for support. One was S. 83, a bill introduced by Senator Dirksen containing the same procedural provisions that the amended House bill in 1956 had contained. The other bill, H.R. 6127, was introduced by Representative Celler, Chairman of the House Judiciary Committee, and this bill incorporated the so-called House 'fair play' rules as the procedures which should govern the conduct of Commission hearings.14 After extensive debate and hearings, H.R. 6127 was finally passed by both Houses of Congress, and the House 'fair play' rules, which make no provision for advance notice, confrontation, or cross-examination, were adopted in preference to the more protective rules suggested in S. 83.15
24
The legislative background of the Civil Rights Act not only provides evidence of congressional authorization, but it also distinguishes these cases from Greene v. McElroy, supra, upon which the court below relied so heavily. In Greene there was no express authorization by Congress or the President for the Department of Defense to adopt the type of security clearance program there involved. Nor was there any legislative history or executive directive indicating that the Secretary of Defense was authorized to establish a security clearance program which could deprive a person of his government employment on the basis of secret and undisclosed information. Therefore, we concluded in Greene that because of the serious constitutional problems presented, mere acquiescence by the President or the Congress would not be sufficient to constitute authorization for the security clearance procedures adopted by the Secretary of Defense. The facts of this case present a sharp contrast to those before the Court in Greene. Here, we have substantially more than the mere acquiescence upon which the Government relied in Greene. There was a conscious, intentional selection by Congress of one bill, providing for none of the procedures demanded by respondents, over another bill, which provided for all of those procedures. We have no doubt that Congress' consideration and rejection of the procedures here at issue constituted an authorization to the Commission to conduct its hearings according to the Rules of Procedure it has adopted, and to deny to witnesses the rights of apprisal, confrontation, and cross-examination.
II.
25
The existence of authorization inevitably requires us to determine whether the Commission's Rules of Procedure are consistent with the Due Process Clause of the Fifth Amendment.16
26
Since the requirements of due process frequently vary with the type of proceeding involved, e.g., compare Opp Cotton Mills, Inc. v. Administrator, 312 U.S. 126, 152, 61 S.Ct. 524, 536, 85 L.Ed. 624, with Interstate Commerce Comm. v. Louisville & N.R. CO., 227 U.S. 88, 91, 33 S.Ct. 185, 186, 57 L.Ed. 431, we think it is necessary at the outset to ascertain both the nature and function of this Commission. Section 104 of the Civil Rights Act of 1957 specifies the duties to be performed by the Commission. Those duties consist of (1) investigating written, sworn allegations that anyone has been discriminatorily deprived of his right to vote; (2) studying and collecting information 'concerning legal developments constituting a denial of equal protection of the laws under the Constitution'; and (3) reporting to the President and Congress on its activities, findings, and recommendations.17 As is apparent from this brief sketch of the statutory duties imposed upon the Commission, its function is purely investigative and fact-finding. It does not adjudicate. It does not hold trials or determine anyone's civil or criminal liability. It does not issue orders. Nor does it indict, punish, or impose any legal sanctions. It does not make determinations depriving anyone of his life, liberty, or property. In short, the Commission does not and cannot take any affirmative action which will affect an individual's legal rights. The only purpose of its existence is to find facts which may subsequently be used as the basis for legislative or executive action.
27
The specific constitutional question, therefore, is whether persons whose conduct is under investigation by a governmental agency of this nature are entitled, by virtue of the Due Process Clause, to know the specific charges that are being investigated, as well as the identity of the complainants,18 and to have the right to crossexamine those complainants and other witnesses. Although these procedures are very desirable in some situations, for the reasons which we shall now indicate, we are of the opinion that they are not constitutionally required in the proceedings of this Commission.
28
'Due process' is an elusive concept. Its exact boundaries are undefinable, and its content varies according to specific factual contexts. Thus, when governmental agencies adjudicate or make binding determinations which directly affect the legal rights of individuals, it is imperative that those agencies use the procedures which have traditionally been associated with the judicial process. On the other hand, when governmental action does not partake of an adjudication, as for example, when a general fact-finding investigation is being conducted, it is not necessary that the full panoply of judicial procedures be used. Therefore, as a generalization, it can be said that due process embodies the differing rules of fair play, which through the years, have become associated with differing types of proceedings. Whether the Constitution requires that a particular right obtain in a specific proceeding depends upon a complexity of factors. The nature of the alleged right involved, the nature of the proceeding, and the possible burden on that proceeding, are all considerations which must be taken into account. An analysis of these factors demonstrates why it is that
29
It is probably sufficient merely to indicate that the rights claimed by respondents are normally associated only with adjudicatory proceedings, and that since the Commission does not adjudicate it need not be bound by adjudicatory procedures. Yet, the respondents contend and the court below implied, that such procedures are required since the Commission's proceedings might irreparably harm those being investigated by subjecting them to public opprobrium and scorn, the distinct likelihood of losing their jobs, and the possibility of criminal prosecutions. That any of these consequences will result is purely conjectural. There is nothing in the record to indicate that such will be the case or that past Commission hearings have had any harmful effects upon witnesses appearing before the Commission. However, even if such collateral consequences were to flow from the Commission's investigations, they would not be the result of any affirmative determinations made by the Commission, and they would not affect the legitimacy of the Commission's investigative function.19
30
On the other hand, the investigative process could be completely disrupted if investigative hearings were transformed into trial-like proceedings, and if persons who might be indirectly affected by an investigation were given an absolute right to cross-examine every witness called to testify. Fact-finding agencies without any power to adjudicate would be diverted from their legitimate duties and would be plagued by the injection of collateral issues that would make the investigation interminable. Even a person not called as a witness could demand the right to appear at the hearing, cross-examine any witness whose testimony or sworn affidavit allegedly defamed or incriminated him, and call an unlimited number of witnesses of his own selection.20 This type of proceeding would make a shambles of the investigation and stifle the agency in its gathering of facts.
31
In addition to these persuasive considerations, we think it is highly significant that the Commission's procedures are not historically foreign to other forms of investigation under our system. Far from being unique, the Rules of Procedure adopted by the Commission are similar to those which, as shown by the Appendix to this opinion,21 have traditionally governed the proceedings of the vast majority of governmental investigating agencies.
32
A frequently used type of investigative agency is the legislative committee. The investigative function of such committees is as old as the Republic.22 The volumes written about legislative investigations have proliferated almost as rapidly as the legislative committees themselves, and the courts have on more than one occasion been confronted with the legal problems presented by such committees.23 The procedures adopted by legislative investigating committees have varied over the course of years. Yet, the history of these committees clearly demonstrates that only infrequently have witnesses appearing before congressional committees been afforded the procedural rights normally associated with an adjudicative proceeding. In the vast majority of instances, congressional committees have not given witnesses detailed notice or an opportunity to confront, cross-examine and call other witnesses.24
33
The history of investigations conducted by the executive branch of the Government is also marked by a decided absence of those procedures here in issue.25 The best example is provided by the administrative regulatory agencies. Although these agencies normally make determinations of a quasi-judicial nature, they also frequently conduct purely fact-finding investigations. When doing the former, they are governed by the Administrative Procedure Act, 60 Stat. 237, 5 U.S.C. §§ 1001—1011, 5 U.S.C.A. §§ 1001—1011, and the parties to the adjudication are accorded the traditional safeguards of a trial. However, when these agencies are conducting nonadjudicative, fact-finding. Investigations, rights such as apprisal, confrontation, and cross-examination generally do not obtain.
34
A typical agency is the Federal Trade Commission. its rules draw a clear distinction between adjudicative proceedings and investigative proceedings. 16 CFR, 1958 Supp., § 1.34. Although the latter are frequently initiated by complaints from undisclosed informants, id., §§ 1.11, 1.15, and although the Commission may use the information obtained during investigations to initiate adjudicative proceedings, id., § 1.42, nevertheless, persons summoned to appear before investigative proceedings are entitled only to a general notice of 'the purpose and scope of the investigation,' id., § 1.33, and while they may have the advice of counsel, 'counsel may not, as a matter of right, otherwise participate in the investigation.' Id., § 1.40. The reason for these rules is obvious. The Federal Trade Commission could not conduct an efficient investigation if persons being investigated were permitted to convert the investigation into a trial. We have found no authorities suggesting that the rules governing Federal Trade Commission investigations violate the Constitution, and this is understandable since any person investigated by the Federal Trade Commission will be accorded all the traditional judicial safeguards at a subsequent adjudicative proceeding, just as any person investigated by the Civil Rights Commission will have all of these safeguards, should some type of adjudicative proceeding subsequently by instituted.
35
Although regulatory agency which distinguishes between adjudicative and investigative proceedings is the Securities and Exchange Commission. This Commission conducts numerous investigations, many of which are initiated by complaints from private parties. 17 CFR § 202.4. Although the Commission's Rules provide that parties to adjudicative proceedings shall be given detailed notice of the matters to be determined, id., 1959 Supp., § 201.3, and a right to cross-examine witnesses appearing at the hearing, id., § 201.5, those provisions of the Rules are made specifically inapplicable to investigations, id., § 201.20,26 even though the Commission is required to initiate civil or criminal proceedings if an investigation discloses violations of law.27 Undoubtedly, the reason for this distinction is to prevent the sterilization of investigations by burdening them with trial-like procedures.
36
Another type of executive agency which frequently conducts investigations is the presidential commission. Although a survey of these commissions presents no definite pattern of practice, each commission has generally been permitted to adopt whatever rules of procedure seem appropriate to it,28 and it is clear that many of the most famous presidential commissions have adopted rules similar to those governing the proceedings of the Civil Rights Commission.29 For example, the Roberts Commission established in 1941 to ascertain the facts relating to the Japanese attack upon Pearl Harbor, and to determine whether the success of the attack resulted from any derelictions of duty on the part of American military personnel, did not permit any of the parties involved in the investigation to cross-examine other witnesses. In fact, many of the persons whose conduct was being investigated were not represented by counsel and were not present during the interrogation of other witnesses. Hearings before the Joint Committee on the Investigation of the Pearl Harbor Attack, 79th Cong., 1st Sess., pts. 22—25.
37
Having considered the procedures traditionally followed by executive and legislative investigating agencies, we think it would be profitable at this point to discuss the oldest and, perhaps, the best known of all investigative bodies, the grand jury. It has never been considered necessary to grant a witness summoned before the grand jury the right to refuse to testify merely because he did not have access to the identity and testimony of prior witnesses. Nor has it ever been considered essential that a person being investigated by the grand jury be permitted to come before that body and cross-examine witnesses who may have accused him of wrongdoing. Undoubtedly, the procedural rights claimed by the respondents have not been extended to grand jury hearings because of the disruptive influence their injection would have on the proceedings, and also because the grand jury merely investigates and reports. It does not try.
38
We think it is fairly clear from this survey of various phases of governmental investigation that witnesses appearing before investigating agencies, whether legislative, executive, or judicial, have generally not been accorded the rights of apprisal, confrontation, or cross-examination. Although we do not suggest that the grand jury and the congressional investigating committee are identical in all respects to the Civil Rights Commission,30 we mention them, in addition to the executive agencies and commissions created by Congress, to show that the rules of this Commission are not alien to those which have historically governed the procedure of investigations conducted by agencies in the three major branches of our Government. The logic behind this historical practice was recognized and described by Mr. Justice Cardozo's landmark opinion in Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 53 S.Ct. 350, 77 L.Ed. 796. In that case, the Court was concerned with the type of hearing that the Tariff Commission was required to hold when conducting its investigations. Specifically, the Court was asked to decide whether the Tariff Act of 1922, 42 Stat. 858, gave witnesses appearing before the Commission the right to examine confidential information in the Commission files and to cross-examine other witnesses testifying at Commission hearings. Although the Court did not phrase its holding in terms of due process, we think that the following language from Mr. Justice Cardozo's opinion is significant:
39
'The Tariff Commission advises; these others ordain. There is indeed this common bond that all alike are instruments in a governmental process which according to the accepted classification is legislative, not judicial. * * * Whatever the appropriate label, the kind of order that emerges from a hearing before a body with power to ordain is one that impinges upon legal rights in a very different way from the report of a commission which merely investigates and advises. The traditionary forms of hearing appropriate to the one body are unknown to the other. What issues from the Tariff Commission as a report and recommendation to the President, may be accepted, modified, or rejected. If it happens to be accepted, it does not bear fruit in anything that trenches upon legal rights.' 288 U.S., at page 318, 53 S.Ct. at page 359.
40
And in referring to the traditional practice of investigating bodies, Mr. Justice Cardozo had this to say:
41
'(W)ithin the meaning of this act the 'hearing' assured to one affected by a change of duty does not include a privilege to ransack the records of the Commission, and to subject its confidential agents to an examination as to all that they have learned. There was no thought to revolutionize the practice of investigating bodies generally, and of this one in particular.' Id., 288 U.S. at page 319, 53 S.Ct. at page 360. (Emphasis supplied.)
42
Thus, the purely investigative nature of the Commission's proceedings, the burden that the claimed rights would place upon those proceedings, and the traditional procedure of investigating agencies in general, leads us to conclude that the Commission's Rules of Procedure comport with the requirements of due process.31
43
Nor do the authorities cited by respondents support their position. They rely primarily upon Morgan v. United States, 304 U.S. 1, 58 S.Ct. 773, 999, 82 L.Ed. 1129; Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817; and Greene v. McElroy, supra. Those cases are all distinguishable in that the government agency involved in each was found by the Court to have made determinations in the nature of adjudications affecting legal rights. Thus, in Morgan, the action of the Secretary of Agriculture in fixing the maximum rates to be charged by market agencies at stockyards was challenged. In voiding the order of the Secretary for his failure to conduct a trial-like hearing, the Court referred to the adjudicatory nature of the proceeding:
44
'Congress, in requiring a 'full hearing,' had regard to judicial standards—not in any technical sense but with respect to those fundamental requirements of fairness which are of the essence of due process in a proceeding of a judicial nature.' 304 U.S. at page 19, 58 S.Ct. at page 777.
45
Likewise, in Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 140—141, 71 S.Ct. 624, 632—633, 95 L.Ed. 817, this Court held that the Attorney General's action constituted an adjudication. Finally, our decision last year in Greene v. McElroy lends little support to the respondents' position. The governmental action there reviewed was certainly of a judicial nature. The various Security Clearance Boards involved in Greene were not conducting an investigation; they were determining whether Greene could have a security clearance—a license in a real sense, and one that had a significant impact upon his employment. By contrast, the Civil Rights Commission does not make any binding orders or issue 'clearances' or licenses having legal effect. Rather, it investigates and reports leaving affirmative action, if there is to be any, to other governmental agencies where there must be action de novo.
46
The respondents have also contended that the Civil Rights Act of 1957 is inappropriate legislation under the Fifteenth Amendment. We have considered this argument, and we find it to be without merit. It would unduly lengthen this opinion to add anything to the District Court's disposition of this claim. See 177 F.Supp., at pages 819—821.
47
Respondents' final argument is that the Commission's hearings should be governed by Section 7 of the Administrative Procedure Act, 60 Stat. 241, 5 U.S.C. § 1006, 5 U.S.C.A. § 1006, which specifies the hearing procedures to be used by agencies falling within the coverage of the Act. One of those procedures is the right of every party to conduct 'such cross-examination as may be required for a full and true disclosure of the facts.' However, what the respondents fail to recognize is that Section 7, by its terms, applies only to proceedings under Section 4, 60 Stat. 238, 5 U.S.C. § 1003, 5 U.S.C.A. § 1003 (rule making), and Section 5, 60 Stat. 239, 5 U.S.C. § 1004, 5 U.S.C.A. § 1004 (adjudications), of the Act. As we have already indicated, the Civil Rights Commission performs none of the functions specified in those sections.
48
From what we have said, it is obvious that the District Court erred in both cases in enjoining the Commission from holding its Shreveport hearing. The court's judgments are accordingly reversed, and the cases are remanded with direction to vacate the injunctions.
49
Reversed and remanded.
50
(For opinion of Mr. Justice FRANKFURTER, concurring in the result, see 363 U.S. at page 486, 80 S.Ct. at page 1542.)
51
(For concurring opinion of Mr. Justice HARLAN, joined by Mr. Justice CLARK, see 363 U.S. at page 493, 80 S.Ct. at page 1542.)
52
(For dissenting opinion of Mr. Justice DOUGLAS, joined by Mr. Justice BLACK, see post, 363 U.S. at page 493, 80 S.Ct. at page 1546.) APPENDIX TO OPINIONOF THE COURT1
53
(Footnotes at end of table)
Extent of agency's
Scope of agency's subpoena power in
54
Agency investigative authority investigative
55
proceedings
56
Executive and The Commission is authorized The Commission may
57
Administrative to "make such studies and subpoena any person
58
Agencies2 investigations, * * * and hold to appear and
59
Atomic Energy such meetings or hearings as testify or produce
60
Commission. (it) may deem necessary or documents "at any
61
proper to assist it in
62
designated place."
63
exercising" any of its statutory
68 Stat. 948, 42
64
functions. 68 Stat. 948, 42 U.S.C.
65
U.S.C. § 2201(c),
66
§ 2201(c).
The right, if any, of
The type of notice persons affected by
67
required to an investigation to Miscellaneous
68
be given in cross-examine others Comments
69
investigative testifying at
70
proceedings3 investigative
proceedings4
71
This is not This is not specified The Commission's
72
specified by by statute. The Rules of Practice
73
statute. The Commission's Rules of draw a sharp
74
Commission's Rules Practice do not distinction between
75
of Practice require that those informal and formal
76
provide that (t)he summoned to appear before hearings. Formal hearings
77
procedure to be informal hearings are used only in "cases of
78
followed in be given the right to adjudication," 10 CFR
79
informal hearings cross-examine other § 2.708, and parties
80
shall be such as witnesses. Rather, to the hearings are
81
will best serve the Commission is given detailed notice
82
the purpose of given the discretion of the subject of the
83
the hearing. to adopt those hearing, id., §
84
10 CFR § 2.720. procedures which "will best 2.735, as well as the
85
The Rules of serve the purpose of right to cross-examine
86
Practice do not the hearing." 10 CFR witnesses, id., §
87
require any § 2.720. 2.747. Informal
88
specific type hearings are used in
89
of notice to investigations "for the
90
be given in purposes of obtaining
91
informal hearings. necessary or useful
92
Ibid. information, and
93
affording
94
participation by
95
interested persons,
96
in the formulation,
97
amendment, or
98
rescission of
99
rules and
100
regulations."
101
Id., § 2.708.
The safeguards which
102
are accorded in the
103
formal adjudicative
104
hearings
105
are not mentioned
106
in the Commission's
Rule relating to
107
informal hearings.
108
Id., § 2.720.
Extent of agency's
Scope of agency's subpoena power in
109
Agency investigative authority investigative
110
proceedings
111
Federal (1) The Commission is authorized (1) The Commission
112
Communications to investigate any matters may "subpena the
113
Commission. contained in a complaint "in attendance and
114
such manner and by such means
115
testimony of
116
as it shall deem proper." 48
117
witnesses and the
Stat. 1073, 47 U.S.C. § 208, 47
118
production of all
119
U.S.C.A. § 208. books, papers,
120
(2) The Federal Communications
121
schedules of
Commission was also authorized
122
charges, contracts,
123
to conduct a special investigation
124
agreements and
125
of the American Telephone and
126
documents relating
Telegraph Company, and to obtain
127
to any matter under
128
information concerning the company's
129
investigation." 48
130
history and structure, the services
Stat. 1096, 47
131
rendered by it, its failure
132
to U.S.C. § 409(e),
133
reduce rates, the effect of
47 U.S.C.A. § 409
134
monopolistic control on the
135
(e).
136
company, the methods of
137
(2) The Commission
138
competition engaged in by the
139
was also given the
140
company, and the company's
141
subpoena power by
142
attempts to influence public
143
the statute
144
opinion by the use of propaganda
145
authorizing the
146
49 Stat. 43.
147
the American
Telephone and
148
Telegraph Company.
49 Stat. 45
149
Federal Trade (1) The Commission is authorized (1) The Commission
150
Commission. to investigate "the may "subpoena the
151
organization, business, conduct,
152
attendance and
153
practices, and management of any
154
testimony of
155
corporation engaged in
156
witnesses and the
157
commerce"; to make an production of all
158
investigation of the manner in
159
such documentary
160
which antitrust decrees are being
161
evidence relating to
162
carried out; to investigate and
163
any matter under
164
report the facts relating to any
165
investigation. 38
The right, if any, of
The type of notice persons affected by
166
required to an investigation to Miscellaneous
167
be given in cross-examine others Comments
168
investigative testifying at
169
proceedings3 investigative
proceedings4
170
This is not This is not specified It should b noted
171
specified by by statute. Nor do that the
172
statute. The the Commission's Commission's Report
173
Commission's Rules Rules of Practice on the Telephone
174
of Practice do refer to cross-examination Investigation made no
175
not specify the in investigative mention of the type
176
type of notice proceedings. Therefore, of notice, if any, given to
177
to be given in whether persons those summoned to appear at
178
investigative appearing at an the investigation.
179
proceedings. investigation have the Nor was there any
180
However, the Rules privilege of cross- reference to cross-
181
do provide that examining witnesses examination. The
182
the (p)rocedures apparently depends upon Commission did permit
183
to be followed by whether the the Company "to
184
the Commission, Commission is of the submit statements
185
shall, unless opinion that in writing
186
specifically cross-examination pointing out
187
prescribed * * * in "will best serve the any inaccuracies
188
the (Rules), be such purposes of such in factual data
189
as in the opinion proceeding." 47 CFR § statistics in
190
of the Commission 1.10. It should also be the reports
191
will best serve the noted that even in introduced in
192
purposes of * * * that portion of the the hearings or
193
(any investigative) Commission's Rules in any testimony
194
proceeding. 47 CFR relating to adjudicative in connection
195
§ 1.10. proceedings, there therewith, provided
196
is no specific provision
197
that such statements
198
relating to cross- were confined to
199
examination. Id. § § the presentation
1.101-1.193. of facts and that no
200
attempt would be
201
be made therein to
202
draw conclusions
203
therefrom." H. R. Doc.
204
No. 340, 76th Cong.,
205
1st Sess xviii.
206
(1) This is not (1) This is not (1) It is interesting
207
specified by specified by statute. The to note that the
208
statute. The Commission's Rules of Commission's Rules
209
Commission's Rules Practice provide that of Practice draw
210
of Practice a person required to an express and sharp
211
provide that testify in an distinction between
212
(a)ny party under investigative proceeding investigative and
213
investigation "may be accompanied adjudicative
214
compelled to and advised by proceedings and the
215
furnish information counsel, but counsel may Commission's Rules
216
or documentary not, as a matter of relating to notice
217
evidence shall be right, otherwise and cross-examination
218
advised with respect participate in the in investigative
Extent of agency's
Scope of agency's subpoena power in
219
Agency investigative authority investigative
220
proceedings
221
alleged violations of the
222
Stat. 722, 15 U.S.C.
223
Federal antitrust Acts by any § 49, 15 U.S.C.A.
224
Trade corporation; and § 49.
225
Commission - "to investigate * * * (2) The Commission
226
Continued. trade conditions in and with was also given the
227
foreign countries where
228
subpoena power
229
associations, combinations,
230
under the statute
231
or practices of manufacturers,
232
authorizing the
233
merchants, or traders, or other
234
investigation of the
235
conditions, may affect the foreign
236
motor vehicle
237
trade of the United States." 38
238
industry. 52
Stat. 721-722, 15 U.S.C. § 46, 15
239
Stat. 218.
240
U.S.C.A. § 46.
241
(2) The Commission was also
242
authorized to conduct a special
243
investigation of the motor
244
vehicle industry to determine (a)
245
"the extent of concentration of
246
control and of monopoly in the
247
manufacturing, warehousing,
248
distribution, and sale of
249
automobiles, accessories, and
250
parts, including methods and
251
devices used by manufacturers
252
for obtaining and maintaining
253
their control or monopoly * * *
254
and the extent, if any, to which
255
fraudulent, dishonest, unfair,
256
and injurious methods (were)
257
employed, including combinations,
258
monopolies, price fixing,
259
or unfair trade practices"; and
260
(b) " the extent to which any
261
of the antitrust laws of the
United States (were) being
262
violated." 52 Stat. 218.
The right, if any, of
The type of notice persons affected by
263
required to an investigation to Miscellaneous
264
be given in cross-examine others Comments
265
investigative testifying at
266
proceedings3 investigative
proceedings4
267
to the purpose and investigation." 16 CFR,1959 proceedings are very
268
scope of the Supp., § 1.40. similar to those adopted
269
investigation. over, while the Rules by the Civil Rights
270
16 CFR, 1959 Supp., of Practice make no Commission.
271
§ 1.33. mention of the right (2) It should also be
272
(2) The Commission's to cross-examine observed that FTC
273
Report on the Motor witnesses in investigations may be
274
Vehicle Industry did investigative proceedings, be initiated "upon
275
not indicate what see id., § 1.31-1.42, such a complaint by members
276
type of notice, if right is specifically of the consuming
277
any, was given to given to parties in an public, businessmen,
278
those summoned to adjudicative or the concerns aggrieved
279
testify at the proceeding. Id., § 3.16. by unfair practices," 16
280
investigation. (2) The Commission's CFR, 1959 Supp., §
281
H. R. Doc. No. 468, Report on the Motor 1.11, and that
282
76th Cong., 1st Vehicle Industry did complaints received
283
Sess. Presumably, not refer to cross- by the Commission
284
the Commissioner's examination. H.R. Doc. may charge "any
285
regular Rules of No. 468, 76th Cong., violation of law over
286
Practice obtained. 1st Sess. Presumably, which the Commission
287
the Commission's has jurisdiction." Id.,
288
regular Rules of Practice
289
§ 1.12
290
obtained. (3) Also relevant to
291
our inquiry is the
292
fact that the
Commission
293
does not "publish or
294
divulge the name of
295
an applicant or
296
complaining party."
297
Id., § 1.15.
298
(4)Finally, it is
299
important to observe
300
that the FTC,
301
unlike
The Civil Rights
Commission, has the
302
a thority to
303
commence
304
adjudicative
305
proceedings
306
based upon the
307
material obtained by
308
means of
309
investigative
310
proceedings. Id.,
311
§ 1.42.
Extent of agency's
Scope of agency's subpoena power in
312
Agency investigative authority investigative
313
proceedings
314
National Labor Under the National Labor "For the purpose of
315
Relations Relations Act, the Board is all hearings and
316
Board. given the power to investigate investigations * * *
317
petitions and charges submitted
318
the Board (may)
319
to it relating to union
320
* * * copy any
321
representation and unfair labor
322
evidence of any
323
practices. 61 Stat. 144, 149, 29
324
person being
325
U.S.C. §§ 159(c), 160(l), 29 U.S.
326
investigated or
327
C.A. §§ 159(c), 160(l).
328
proceeded against
329
that relates to any
330
matter under
331
investigation," and
332
it may also issue
333
subpoenas requiring
334
the attendance and
335
testimony of
336
witnesses in any
337
proceeding or
338
investigation. 61
339
Stat. 150, 29 U.S.C.
340
§ 161, 29 U.S.C.A.
341
§ 161.
342
Securities and (1) Under the Securities Act of All of the Acts
343
Exchange 1933, as amended, the which authorize
344
Commission. Commission is authorized to the Commission
345
conduct "all investigations to conduct
346
which, * * are necessary and
347
investigations also
348
proper for the enforcement of"
349
bestow upon it the
350
the Act. 48 Stat. 85, 15 U.S.C.
351
the power to
352
§ 77s(b), 15 U.S.C.A. § 77s(b).
353
subpoena witnesses,
354
(2) The Securities Exchange
355
compel their
Act of 1934 authorizes the
356
attendance, and
Commission to "make such
357
require the
358
investigations as it production of any
359
deems necessary to any books,
360
determine whether correspondence,
361
any person has memoranda,
362
violated or is contracts,
363
about to violate any agreements,
364
provisions of (the Act)
365
and other records
366
or any rule or regulation
367
which are relevant
368
thereunder." 48 Stat. to the investigation.
369
899, 15 U.S.C. § 78u (a),
Securities Act of
370
15 U.S.C.A. § 78 (a). 1933, 48 Stat. 85,
371
(3) The Public Utility Holding
372
15 U.S.C. § 77s (b),
Company Act of 1935 empowers
373
15 U.S.C.A. §
374
the Commission to 77c (b);
375
"investigate any facts,
Securities Exchange
The right, if any, of
The type of notice persons affected by
376
required to an investigation to Miscellaneous
377
be given in cross-examine others Comments
378
investigative testifying at
379
proceedings3 investigative
proceedings4
380
This is not This is not specified
It should be noted
381
specified by by statute. The that the National
382
statute. The Board's Statements of Labor Relations
383
Board's Statements Procedure and Rules Board may use the
384
of Procedure and and Regulations information collected
385
Rules and Regulation provide for the right to during preliminary
386
provide for the cross-examine investigations to
387
preliminary witnessess at formal, initiate adjudicative
388
investigation of adjudicative hearings, 29 proceedings, 61 Stat. 149,
389
all petitions and CFR, 1960 Supp., §§ 29 U.S.C.§ 160(l), 29
390
charges received 101.10, 102.38. 102.66, U.S.C.A. § 160 (l).
391
by the Board. 102.86, 102,90, but The Commission on Civil
392
Although a copy of there is no such Rights has no such
393
the initial charge provision with regard power. Moreover, the
394
may be served upon preliminary Board, unlike the
395
an alleged violater, investigations. Id., § § Civil Rights Commission,
396
there is no 101.4, 101.18,101.22, may use the
397
specific rule 101.27,101.32, 102.63, information obtained
398
requiring the Board 102.77, 102.85. by it through
399
to give notice of investigations to
400
the preliminary petition the federal
401
investigation. See courts for appropriate
402
29 CFR, 1960 Supp., injunctive relief, 61
403
§§ 101.4, Stat. 149, 29
101.18, 101.22, U.S.C. § 160(l), 29
404
101.27, 101.32, U.S.C.A. § 160(l).
405
102.63, 102.77,
406
102.85.
407
This is not This is not specified The Securities
408
specified by. by statute. The and Exchange
409
statute. Nor do Commission's Rules of Commission's procedures
410
the Commission's Practice make no for investigative
411
Rules of Practice mention of the right proceedings are very
412
relating to formal to cross-examine similar to those of
413
investigations make witnesses in investigative the Civil Rights
414
any mention of the proceedings. 17 CFR Commission.
415
type of notice § 202.4. Parties are Investigations may
416
which must be given given the right to be initiated upon
417
in such proceedings. cross-examine witnesses complaints received from
418
17 CFR § 202.4. in adjudicative members of the public,
419
The Commission's proceedings, id., § and these complaints
420
Rules do provide 201.5, but this may contain specific
421
for the giving provision is made charges of illegal
422
of notice in specifically inapplicable conduct. 17 CFR §
423
adjudicative to investigative 202.4. It should be
424
proceedings, id., proceedings. Id., § 201.20. noted, however, that
425
1959 Supp., § 201.3, the Securities and
426
but this provision Exchange
427
is made Commission,
428
specifically unlike the
429
inapplicable to Civil Rights
430
investigative Commission, is an
431
proceedings. adjudicatory body,
432
Id., § 210.20 and it may use the
Extent of agency's
Scope of agency's subpoena power in
433
Agency investigative authority investigative
434
proceedings
435
Securities conditions, practices, Act of 1934, 48
436
and Exchnage or matters which it may Stat. 900, 15 U.S.C.
437
Commission - deem necessary or § 78u (b),
438
Continued. appropriate to determine 15 U.S.C.A.
439
whether any person has
440
§ 78u (b); Public
441
violated or is about Utility Holding
442
to violate any provision
Company Act of
443
of (the Act) or any 1935, 49 Stat. 831,
444
rule or regulation 15 U.S.C. § 79r (c),
445
thereunder, or to aid in the
15 U.S.C.A. § 78r
446
enforcement of the provisions
447
(c); Trust Indenture
448
of (the Act), in the prescribing
Act of 1939, 53
449
of rules and regulations
450
Stat.1174 15 U.S.C.
451
thereunder, or in obtaining
452
§ 77uuu (a), 15
453
information to serve as a
U.S.C.A. § 77uuu
454
basis for recommending further
455
(a); Investment
456
legislation concerning the
457
Company Act of 1940,
458
matters to which (the Act)
54 Stat. 842, 15
459
relates." 49 Stat. 831, 15 U.S.C.
460
§ 80a-41(b).
461
U.S.C. § 79r (a), 15 U.S.C.A.
15 U.S.C.A. § 80a-41
462
§ 79r (a). (b); Investment
463
(4) The Trust Indenture Act of
Advisers Act of 1940
1939 authorizes the 54 Stat. 853, 15
Commission to conduct "any
464
U.S.C. § 80b-9(b).15.
465
investigation * * * which
466
U.S.C.A. § 805-9(b).
467
* * * is necessary and proper
468
for the enforcement of" the
469
Act. 53 Stat. 1174, 15 U.S.C.
470
§ 77uuu (a), 15 U.S.C.A. §
471
77 uuu (a).
472
(5) The Investment Company
Act of 1940 gives the
Commission the power to
473
"make such investigations as
474
it deems necessary to
475
determine whether any person
476
has violated or is about to
477
violate any provision of
478
* * * (the Act) or of any
479
rule, regulation, or order
480
thereunder, or to determine
481
whether any action in any
482
court or any proceeding
483
before the Commission shall
484
be instituted under * * *
485
(the Act) against a particular
486
person or persons, or with
487
respect to a particular
488
person or persons, or with
489
respect to a particular
490
transaction or transactions."
491
54 Stat. 842, 15 U.S.C. §
492
80a-41(a), 15 U.S.C.A. §
493
80a-41(a).
494
(6) Finally, under the
Investment Advisers Act of
1940, the Commission is
495
authorized to determine by
The right, if any, of
The type of notice persons affected by
496
required to an investigation to Miscellaneous
497
be given in cross-examine others Comments
498
investigative testifying at
499
proceedings3 investigative
proceedings4
500
information gathered
501
through
502
investigative
503
proceedings to
504
initiate
505
"administrative
506
proceedings looking
507
to the imposition of
508
remedial sanctions,
509
* * * (or) injuction
510
proceedings in the
511
courts, and, in the
512
case of a willful
513
violation," it may
514
refer the "matter to
515
the Department of
Justice for criminal
516
prosecution," Ibid.
See also Securities
517
Act of 1933,
518
48 Stat. 86,
519
15 U.S.C.
520
§ 77t (b),
521
15 U.S.C.A,
522
§ 77t (b);
Securities
Exchange Act of
523
1934, 48 Stat.
524
900 15 U.S.C.
525
§ 78u (e),
526
15 U.S.C.A,
527
§ 78u (e); Public
Utility Holding
528
Company Act of 1935,
529
49 Stat.
530
832, 15 U.S.C.
531
§ 79r (f),
532
15 U.S.C.A.
533
§ 79r (f):
Investment Company
534
Act of 1940.
535
54 Stat.
536
843, 15 U.S.C.
537
§ 80a-41
538
(e), 15 U.S.C.A.
539
§ 80a-
41 (e): Investment
Advisers Act of
540
1940, 54 Stat. 854,
541
15 U.S.C. §
542
80b-9(e),
543
15 U.S.C.A.
544
§ 80b-9(e).
Extent of agency's
Scope of agency's subpoena power in
545
Agency investigative authority investigative
546
proceedings
547
Securities investigation whether "the
548
and Exchange provisions of * * * (the Act)
549
Commission - or of any rule or regulation
Continued prescribed under the
550
the authority thereof, have been or
551
are about to be violated by any
552
person." 54 Stat. 853, 15 U.S.C.
553
§ 80b-9(a), 15 U.S.C.A.
554
§ 80b-9(a).
555
Office of Price The Defense Production Act of The Defense
556
Stabilization.5 1950 authorized the President to Production Act of
557
"issue regulations and orders
1950 conferred upon
558
establishing a ceiling or
559
the President the
560
ceilings on the price, rental,
561
power, by * * *
562
commission, margin,
563
"subpena, or
564
rate, fee, charge, otherwise, to
565
or allowance paid or obtain such
566
received on the sale or delivery,
567
information from,
568
or the purchase or receipt,
569
require such reports
570
by or to any person, of any
571
and the keeping of
572
material or service, and at
573
such records by,
574
the same time * * issue
575
make such inspection
576
regulations and orders
577
of the books,
578
stabilizing wages, records, and
579
salaries, and other other writings,
580
compensation in accordance
581
premises or property
582
with provisions of" the
583
of, and take the
584
Act. 64 Stat. 803, 50 U.S.C.A.
585
sworn testimony of,
586
Appendix, § 2102(b). This * * *
587
any person as
588
authority was delegated to the
589
may be necessary or
Economic Stabilization
590
appropriate, in his
591
Adminstrator by Exec. Order No.
592
discretion, to the
10161, 15 Fed. Reg. 6105, 50
593
enforcement or the
594
U.S.C.A. Appendix, § 2071 note.
595
administration of
The Administrator in turn
596
(the) Act and the
597
delegated the duty of issuing
598
regulations or orders
599
price regulations to the Office
600
issued thereunder."
601
of Price Stabilization. Gen. Order
64 Stat. 816, 50
602
No. 2 of the Economic U.S.C.A. Appendix,
603
Stabilization Agency, 16 Fed. Reg. § 2155.
This power
604
738. Pursuant to this authority,
605
was delegated to
606
the Office of Price Stabilization
607
the Office of Price
608
promulgated Rules of Procedure,
Stabilization by
Section 2 of which provided that
609
Exec. Order No.
610
investigations would be held before
611
10161, 15 Fed. Reg.
612
the issuance of a ceiling price
613
6105, 50 U.S.C.A.
614
regulation. Price Procedural Appendix,
615
§ 2071
616
Regulation 1, Revision 2—note;
Gen. Order
617
General Price Procedures,
No. 2 of the Economic
618
§ 2, 17 Fed. Reg. 3788.
619
Stabilization Agency,
620
16 Fed. Reg. 738.
The right, if any, of
The type of notice persons affected by
621
required to an investigation to Miscellaneous
622
be given in cross-examine others Comments
623
investigative testifying at
624
proceedings3 investigative
proceedings4
625
This was not This was not It should be noticed
626
specified by specified by statute or that the Office's
627
statute or Executive Order. Nor preissuance hearings
628
Executive Order. did the Office's Rules usually led to
629
The Office's of Procedure make determinations which
630
Rules of Procedure any mention of the right had severe effects
631
provided that to cross-examine upon certain individuals;
632
a general public witnesses appearing at yet, there
633
notice was to preissuance hearings. was no provision for
634
be given in the The Rules merely said personalized detailed
635
Federal Register that the hearing was notice or cross-
636
of all pre-issuance to "be conducted in examination.
637
hearings. Price such manner,
638
Procedural consistent with the need
639
Regulation for expeditious action,
640
1—General Price as will permit the fullest
Prrocedures, § possible presentation
4, 17 Fed. Reg. of the evidence by
641
3788. such persons as are,
642
in the judgment of
643
the Director, best
644
qualified to provide
645
information with
646
respect to matters
647
considered at the hearing
648
or most likely to be
649
seriously affected by
650
action which may be
651
taken as a result of
652
the hearing."Price
Procedural Regulation
1--General Price
653
procedures, § 5, 17 Fed.
654
Reg. 3788.
Extent of agency's
Scope of agency's subpoena power in
655
Agency investigative authority investigative
656
proceedings
657
Office of Price The Administrator was "For the purpose of
658
Administration.6 "authorized to make such obtaining any
659
studies and investigations and
660
information (in an
661
to obtain such information as he
662
investigation) * * *
663
(deemed) necessary or proper
664
the Administrator
665
to assist him in prescribing any
666
(could) by subpena
667
regulation or order under (the)
668
require any * * *
Act, or in the administration
669
person to appear and
670
and enforcement of (the) Act
671
testify or to appear
672
and regulations, orders, and
673
and produce
674
price schedules thereunder."
675
documents, or both,
56 Stat. 30. at any designated
676
place." 56 Stat. 30.
677
The Department (1) Under the Perishable (1) The Perishable
678
of Agriculture. Agricultural Commodities Act Agricultural
679
of 1930, the Department is
Commodities Act of
680
authorized to investigate any
1930 authorizes
681
complaint filed with the
682
the Secretary to
Secretary alleging that someone
683
"require by subpoena
684
has violated the Act. 46 Stat.
685
the attendance and
686
534, 7 U.S.C. § 499f(c),
687
testimony of
7 U.S.C.A. § 499f(c). witnesses and the
688
(2) The Department also enforces
689
production of such
690
the Packers and Stockyards Act
691
accounts, records,
The right, if any, of
The type of notice persons affected by
692
required to an investigation to Miscellaneous
693
be given in cross-examine others Comments
694
investigative testifying at
695
proceedings3 investigative
proceedings4
696
This was not This was not specified It should be noted
697
specified by by statute. The that even though the
698
statute. The Administrator's Rules of Administrator's
699
Administrator's Rules Procedure made no proceedings smacked
700
of Procedure did mention of the right to of an adjudication,
701
not specify the cross-examine there was no express
702
type of notice, witnesses during either requirement that
703
if any, to be given investigations or either detailed
704
during the preissuance hearings. notice or the right to
705
investigative 32 CFR, 1944 Supp., to cross-examine
706
stage of price § § 1300.2, 1300.5. witnesses be given
707
regulation The Rules merely provided to the parties
708
proceedings. 32 CFR that hearings were to affected by the
709
1944 Supp., § be conducted "in such Administrator's actions.
1300.2. After manner, consistent
710
the investigation, with the need for
711
the Administrator expeditious action, as
712
could hold a will permit the fullest
713
price hearing possible presentation
714
prior to issuance of evidence by such
715
of the regulation, persons as are, in the
716
and general judgment of the
717
notice of the Administrator, best
718
hearing was to qualified to provide
719
be published in the information with respect to
Federal Register. matters considered at
Id., § 1300.4. the hearing or most
720
likely to be seriously
721
affected by action
722
which may be taken
723
as a result of the
724
hearing." Id.,
725
§ 1300.-5.
726
This is not This is not specified (1) The Department of
727
specified by by statute. The of Agriculture,
728
statute. The Department's Rules of unlike the Civil
729
Department's Rules Practice adopted Rights Commission,
730
of Practice adopted pursuant to the may use the information
731
pursuant to the Perishable Agricultural obtained through
732
Perishable Commodities Act and investigations in its
733
Agricultural the Packers and subsequent adjudicative
734
Commodities Act and Stockyards Act proceedings under
735
the Packers and contain no reference to the Perishable
736
Stockyards Act do cross-examination Agricultural Extent of agency's
Scope of agency's subpoena power in
737
Agency investigative authority investigative
738
proceedings
739
The of 1921, which, for the purposes and memoranda as
740
Department of that Act, gives the Secretary may be material for
741
of Agriculture - the investigative and other the determination
742
Continued. enforcement powers possessed by of any complaint
743
the Federal Trade Commission, 42
744
under" the Act. 46
745
Stat. 168, 7 U.S.C. § 222,
746
Stat. 536, 7 U.S.C.
747
7 U.S.C.A. § 222. The § 499m (b), 7 U.
Department's Rules of Practice
748
S.C.A. § 499m(b).
749
also provide that investigations
750
(2) The Packers and
751
shall be conducted when informal
Stockyards Act of
752
complaints charging a violation
1921 gives to the
753
of the Act are received by the
Secretary those
754
Secretary. 9 CFR § 202.23.
755
powers conferred
756
upon the Federal
Trade Commission by
757
"sections 46 and
758
48-50 of Title 15."
Among those powers
759
is the authority to
760
subpoena witnesses.
42 Stat. 168, 7
U.S.C. § 222, 7
761
U.S.C.A. § 222.
The right, if any, of
The type of notice persons affected by
762
required to an investigation to Miscellaneous
763
be given in cross-examine others Comments
764
investigative testifying at
765
proceedings3 investigative
proceedings4
766
not refer to the during investigative Commodities Act.
767
type of notice, if proceedings. 7 CFR § 47. 7 CFR § 47.7.
768
any, which must 3; 9 CFR § 202.3, (2) it is also of interest
769
be given in although such a right is that investigative
770
investigative given in the formal, proceedings under both
771
proceedings, 7 CFR adjudicative stage of the Perishable
772
§ 47.3; 9 CFR the proceedings. 7 Agricultural
773
§ 202.3, CFR § §47.15, 47.32; Commodities Act
774
although a 9 CFR § § 202.11, 202.29, and the Packers
775
specific right to 202.48. and Stockyards
776
notice is given Act are commenced
777
in adjudicative by the filing
778
proceedings. 7 CFR of complaints from
779
§ § 47.6, 47.27; private individuals.
9 CFR § § 202.6 7 CFR § 47.3
780
202.23, 202.39. 9 CFR § 202.3.
781
(3) Finally, it
782
should be noted that
783
the Department of
Agriculture
784
administers
785
the Federal Seed
786
Act, 53 Stat. 1275,
787
7 U.S.C. §§ 1551-1610,
788
7 U.S.C.A. §§
1551-1610, which
789
makes it unlawful to
790
engage in certain
791
practices relating
792
to the labeling
793
and importation
794
of seeds, and a
795
statute regulating
796
export standards
797
for apples and pears,
798
48 Stat. 123,
799
7 U.S.C.
800
§ § 581-589,7 U.S.C.A.
801
§§ 581-589. The Rules
802
of Practice adopted
803
by the Secretary
804
pursuant to
805
statutory
806
authorization
807
provide that
808
proceedings under
809
these statutes shall
810
be initiated by an
811
investigation of the
812
charges contained
813
in any complaint
814
received by the
815
the Secretary.These
Rules
816
make no mention of the
817
type of notice, if
818
any,
819
given to those being
820
investigated; nor is
Extent of agency's
Scope of agency's subpoena power in
821
Agency investigative authority investigative
822
proceedings
Commodity
Exchange
Commission
823
(Department of The Commodity Exchange Act The Secretary of
824
Agriculture). empowers the Secretary of Agriculture (acting
825
Agriculture (acting through the through the
Commission) to "make such
Commission) is given
826
investigations as he may deem
827
the same subpoena
828
necessary to ascertain the facts
829
powers as are vested
830
regarding the operations of
831
in the Interstate
832
boards of trade, whether prior
Commerce Commission
833
or subsequent to the enactment
834
by the Interstate
835
of" the Act. The Secretary is
Commerce Act, 24
836
also empowered to "investigate
837
Stat. 383, 27 Stat.
838
marketing conditions of commodity
839
443, 32 Stat. 904,
840
and commodity products and
34 Stat. 798, 49
841
byproducts, including supply
842
and U.S.C. §§ 12, 46-48,
843
demand for these commodities, cost
844
49 U.S.C.A. §§ 12,
845
to the consumer, and handling and
846
46-48. 42 Stat. 1002,
847
transportation charges." 42 Stat.
848
as amended, 49 Stat.
849
1003, as amended, 49 Stat. 1499,
850
69 Stat. 160,
851
1491, 7 U.S.C. § 12, 7 U.S.C. § 15,
852
7 U.S.C.A. § 12. 7 U.S.C.A. § 15.
Food and Drug
Administration
853
(Department of The Regulations adopted The Act makes no
854
Health, Education pursuant to the Federal provision for
855
and Welfare). Caustic Poison Act, 44 Stat. compelling
1406, 15 U.S.C. §§ 401-411, 15
856
testimony.
U.S.C.A. §§ 401-411, authorize
857
the Administration to conduct
858
investigations, 21 CFR § 285.15,
859
and to hold preliminary hearings
860
"whenever it appears * * *
861
that the provisions of section 3
862
or 6 of the Caustic Poison Act
863
* * * have been violated and
864
criminal proceedings are
865
contemplated." Id., § 285.17.
866
[471]
The right, if any, of
The type of notice persons affected by
867
required to an investigation to Miscellaneous
868
be given in cross-examine others Comments
869
investigative testifying at
870
proceedings3 investigative
proceedings4
871
there any reference
872
to cross-examination
873
during the
874
investigative stage
875
of the proceedings
876
7 CFR § §
877
201,151, 33.17.
878
This is not This is not specified It is of interest to
879
specified by. The by statute. The note that
880
statute. The Commission has no special investigations may be
881
Commission has no rules for be initiated by
882
special rules for investigations; however, complaints from private
883
investigations; its Rules of Practice parties and that the
884
however, its Rules provide that a private information
885
of Practice party may initiate a obtained during
886
provide that a disciplinary proceeding investigations
887
private party by filing a may be used
888
may initiate a complaint, and that an in a subsequent
889
disciplinary investigation of the adjudicative
890
proceeding by complaint will be made. proceeding
891
filing a complaint, No mention is 17 CFR § 0.53.
892
and that an made of the right to
893
investigation of cross-examine
894
the complaint will witnesses during
895
be made. No mention investigative proceedings.
896
is made of the type 17 CFR § 0.53.
897
of notice, if any,
898
which must be
899
given in
900
investigative
901
proceedings.
902
17 CFR § 0.53.
903
This is not This is not specified It should be noted
904
specified by by statute. The that the
905
statute. The Administration's Administration
906
Administration's regulations make no investigates
907
Regulations make no mention of the right specific instances
908
reference to notice to cross-examine of possible unlawful
909
of investigative witnesses appearing at activity, and that
910
proceedings, but investigative proceedings unlike the Civil
911
they do require or preliminary hearings. Rights Commission,
912
that general 21 CFR § 285.17. the Secretary
913
notice be given (acting through
914
to those against the Administration)
915
whom prosecution is required to
916
is contemplated. refer possible
917
21 CFR § 285.17. violations to the
918
proper United States
919
Attorney. 44 Stat.
920
1409, 15 U.S.C.A.
921
§ 409 (b),15 U.S.C.A.
922
§ 409 (b).
Extent of agency's
Scope of agency's subpoena power in
923
Agency investigative authority investigative
924
proceedings
925
Presidential (1) The Commission is authorized The Commission
926
Commissions "to investigate the may, "for the
927
United States administration and fiscal purposes of carrying
928
Tariff and industrial effects of the customs out its functions
929
Commission. laws of this country now in and duties in
930
force or which may be hereafter
931
connection with any
932
enacted, the relations
933
investigation
934
between the rates of authorized
935
duty on raw materials by law, * * * (1)
936
and finished * * * products,
937
* * * have access
938
the effects of ad valorem
939
and to and the right to
940
specific duties and of compound
941
copy any document,
942
specific and ad valorem duties,
943
paper, or record,
944
all questions relative
945
pertinent to the
946
to the arrangement of schedules
947
subject matter under
948
and classification of articles
949
investigation, in
950
in the several schedules of the
951
the possession of
952
customs law, and, in general,
953
any person, firm,
954
* * * the operation of customs
955
copartnership,
956
laws, including their relation
957
corporation, or
958
to the Federal revenues,
959
association engaged
960
(and) their effect upon the
961
in the production,
962
industries and labor of the
963
importation, or
964
country." 46 Stat. 698, 19 U.S.C. §
965
distribution of
966
1332(a), 19 U.S.C.A. § 1322(a).
967
any article under
968
(2) The Commission is also
969
investigation,
970
authorized "to investigate the
971
(2)* * * summon
972
tariff relations between the
973
witnesses, take
United States and foreign
974
testimony, and
975
countries, commercial treaties,
976
administer oaths,
977
preferential provisions,
978
(3)* * * require
979
economic alliances, the effect of
980
any person, firm,
981
export bounties and preferential
982
copartnership,
983
transportation rates, the volume of
984
corporation, or
985
importations compared with
986
association, to
987
domestic production and
988
produce books or
989
consumption, and conditions,
990
papers relating
991
causes and effects relating to
992
to any matter
993
competition of foreign
994
pertaining to such
995
industries with those of the United
996
investigation, and
States, including dumping and cost
997
(4) * * * require
998
of production." 46 Stat. 698, 19
999
any person, firm,
1000
U.S.C. § 1332(b), 19 U.S.C.A.
1001
copartnership,
1002
§ 1322(b). corporation, or
1003
(3) The Commission may
1004
association, to
1005
investigate "the Paris
1006
furnish in writing,
Economy Pact and similar
1007
in such detail and
1008
organizations and arrangements
1009
in such form as the
1010
Europe." 46 Stat. 698, 19 U.S.C. §
1011
commission may
1012
1322(c), 19 U.S.C.A. § 1332(c).
1013
prescribe,
1014
(4) The Commission is information in
1015
empowered to "investigate the
1016
their possession
1017
difference in the costs of
1018
pertaining to such
The right, if any, of
The type of notice persons affected by
1019
required to an investigation to Miscellaneous
1020
be given in cross-examine others Comments
1021
investigative testifying at
1022
proceedings3 investigative
proceedings4
1023
Many of the This is not specified (1) Since the
1024
statutory by statute. The Commission's
1025
provisions Commission's Rules permit investigative powers
1026
authorizing a party who has entered are generally
1027
the Commission an appearance to question exercised to aid
1028
to hold hearings a witness "for the the President
1029
pursuant to its purpose of assisting in the execution
1030
investigatory the Commission in obtaining of his duties under
1031
power require that the material facts with the Tariff Act, it
1032
reasonable notice respect to the subject is readily apparent that
1033
of prospective matter of the investgation." the Commission's
1034
hearings be given. 19 CFR § 201.14. However, investigations may
1035
46 Stat. 701, 19 all questioning is done have far reaching
1036
U.S.C. § 1336 under the direction of effects upon those
1037
(a), 19 U.S.C.A. and subject to the persons affected
1038
§ 1336(a): 65 limitations imposed by the by specific tariff
1039
Stat. 72, 19 U.S.C. Commission, and a person who regulations.
1040
§ 1360( ) (1), 19 has not entered a formal (2) It should also also
1041
U.S.C.A. § 1360 appearance may not, as be noted that business
1042
(b) (1); 65 Stat. a matter of right, question data given to the
1043
74, 19 U.S.C § witnesses. Ibid. See Commission may
1044
1364(a), 19 U.S.C.A. also Norwegian Nitrogen be classified as
1045
§ 1364(a); 49 Products Co. v. United confidential, 19
1046
Stat. 774, 7 States, 288 U.S. 294. CFR § 201.6,
1047
U.S.C. § 53 S.Ct. 350, 77 and that confidential
1048
624(a), 7 L.Ed. 796. material contained
1049
U.S.C.A. § 624(a). in applications for
1050
The Commission's investigation and
1051
Rules of Practice complaints will not
1052
also provide that be made available
1053
public notice of for public
1054
any pending inspection. Id.,
1055
investigation shall § 201.8.
1056
be given. 19 CFR,
1057
1960 Supp., §
201.10
Extent of agency's
Scope of agency's subpoena power in
1058
Agency investigative authority investigative
1059
proceedings
1060
production of any domestic
1061
investigation." 46
1062
article and of any like or
Stat. 699, as
1063
similar foreign article." 46 Stat.
1064
ammended, 72 Stat
701, 19 U.S.C. § 1336(a), 19
1065
679, 19 U.S.C. §
1066
U.S.C.A. § 1336(a). 1333 (a),
1067
19 U.S.C.A.
1068
(5) The Commission is authorized
1069
§ 1333(a).
1070
to investigate any complaint
1071
alleging that a person
1072
has engaged in unfair methods
1073
of competition or unfair acts in
1074
the importation of articles into
1075
the United States. 46 Stat. 703,
19 U.S.C. § 1337(a), (b), 19
1076
U.S.C.A. § 1337(a, b).
1077
(6) Before the President enters
1078
into negotiations concerning any
1079
proposed foreign trade
1080
agreement, the Commission
1081
is required to conduct an
1082
investigation and make a report
1083
to the President, indicating the
1084
type of agreement which will best
1085
carry out the purpose of the
Tariff Act. 65 Stat. 72, 19
1086
U.S.C. § 1360(a), 19 U.S.C.A.
1087
§ 1360(a).
1088
(7) The Commission is authorized
1089
to "make an investigation
1090
and make a report thereon * *
1091
to determine whether any product
1092
upon which a concession
1093
has been granted under a trade
1094
agreement is, as a result, in
1095
whole or in part, of the duty or
1096
other customs treatment
1097
reflecting such concession,
1098
being imported into the United States
1099
in such increased quantities,
1100
either actual or relative, as to
1101
cause or threaten serious injury
1102
to the domestic industry producing
1103
like or directly competitive
1104
products." 65 Stat. 74, 19 U.S.
1105
C. § 1364(a), 19 U.S.C.A.
1106
§ 1364 (a).
1107
(8) The Commission is authorized
1108
to investigate the effects
1109
of dumping, and to determine
1110
whether because of such dumping,
1111
"an industry in the United
States is being or is likely to
1112
be injured, or is prevented from
1113
being established." 42 Stat. 11,
1114
19 U.S.C. § 160(a), 19 U.S.C.A.
1115
§ 160(a).
The right, if any, of
The type of notice persons affected by
1116
required to an investigation to Miscellaneous
1117
be given in cross-examine others Comments
1118
investigative testifying at
1119
proceedings3 investigative
proceedings4
Extent of agency's
Scope of agency's subpoena power in
1120
Agency investigative authority investigative
1121
proceedings
1122
(9) Finally, the Commission is
1123
authorized to conduct
1124
investigations for the purpose
1125
of determining whether "any
1126
article or articles are being
1127
or are practically certain to be
1128
imported into the United States
1129
under such conditions and in
1130
such quantities as to render or
1131
tend to render ineffective, or
1132
materially interfere with, any
1133
program or operation undertaken
1134
under" the Agricultural
Adjustment Act or the Soil
Conservation and Domestic
Allotment Act, 49 Stat. 773, as
1135
amended, 62 Stat. 1248, 7 U.S.C.
1136
§ 624(a), 7 U.S.C.A. § 624(a).
1137
Commission To The Commission was authorized The Commission
1138
Investigate the to investigate the attack upon was authorized "to
1139
Japanese Attack Pearl Harbor in order "to issue subpenas
1140
on Hawaii. provide bases for sound requiring the
1141
decisions whether any derelictions
1142
attendance and
1143
of duty or errors of judgment on
1144
testimony of
1145
the part of the United States Army
1146
witnesses and the
1147
or Navy personnel contributed
1148
production of any
1149
to such successes as were
1150
evidence that
1151
achieved by the enemy on the
1152
relates to any
1153
occasion mentioned, and if so,
1154
matter under
1155
what these derelictions or
1156
investigation by
1157
errors were, and who were
1158
the Commission."
1159
responsible therefor." Exec.
1160
55 Stat. 854.
Order No. 8983, 6 Fed. Reg. 6569
The right, if any, of
The type of notice persons affected by
1161
required to an investigation to Miscellaneous
1162
be given in cross-examine others Comments
1163
investigative testifying at
1164
proceedings3 investigative
proceedings4
1165
Neither the Neither the Executive It is of special
1166
Executive Order Order creating the interest that the
1167
creating the Commission, Exec. Order No. Commission was
1168
Commission, Exec. 8983, 6 Fed. Reg. 6569, charged with the
1169
Order No. 8983, nor the joint resolution responsibility of
1170
6 Fed. Reg. 6569, conferring the subpoena determining whether
1171
nor the joint power upon the Commission, the successful attack
1172
resolution 55 Stat. 853, made upon Pearl Harbor
1173
conferring the any mention of resulted
1174
subpoena power upon the right to from any
1175
the Commission, cross-examine individual
1176
55 Stat. 853, witnesses. derelictions
1177
required the An examination of the of duty.
1178
Commission to Commission's proceedings Yet, even
1179
inform prospective does not disclose instances though the
1180
witnesses of wherein any witness or Commission's
1181
complaints party to the investigation
1182
lodged against investigation had all the
1183
them. was given the right to earmarks of
1184
cross-examine other. an adjudication,
1185
witnesses. none of the
In fact, such interested
1186
procedural
1187
parties as Admiral Kimmel
1188
safeguards
1189
and General Short, the demanded
1190
the Navy and Army by the respondents
1191
commanders at Pearl in these
Harbor, were not even cases were
1192
present at the hearings
1193
provided.
1194
when other witnesses
Extent of agency's
Scope of agency's subpoena power in
1195
Agency investigative authority investigative
1196
proceedings
1197
Temporary The Committee was authorized The Committee was
1198
National Economic to investigate "monopoly and given the same
1199
Committee. the concentration of economic subpoena powers as
1200
power in and financial control
1201
were conferred upon
1202
over production and distribution
1203
the Securities
1204
of goods and services * * *
1205
and Exchange
1206
with a view to determining
Commission by the
1207
* * * (1) the causes of
Public Utility
1208
such concentration and
1209
Holding Company Act,
1210
control and their effect upon
49, Stat. 831, 15
1211
competition; (2) the effect of
U.S.C. § 79r(c), 15
1212
the existing price system and
1213
U.S.C.A. § 79r(c).
1214
the price policies of industry
1215
Stat. 706.
1216
upon the general level of trade,
1217
upon employment, upon long-
1218
term profits, and upon
1219
consumption, and (3) the effect of
1220
existing tax, patent, and other
Government policies upon
1221
competition, price levels,
1222
unemployment, profits, and
1223
consumption." 52 Stat. 705.
1224
Congressional The Committee was authorized The Committee was
1225
Investigating to conduct an investigation into authorized "to send
1226
Committees7 charges that William Duane, a for persons,
1227
Senate Committee newspaper editor, had published papers, and
1228
of Privileges. articles defaming the Senate. records, and
1229
(1800) Annals of Cong. 117 (1800). compel the
1230
attendance of
1231
witnesses which
1232
may become
1233
requisite for the
1234
execution of their
1235
commission." 10
Annals of Cong. 121
1236
(1800).
The right, if any, of
The type of notice persons affected by
1237
required to an investigation to Miscellaneous
1238
be given in cross-examine others Comments
1239
investigative testifying at
1240
proceedings3 investigative
proceedings4
1241
were testifying.
Hearings of the
Joint Congressional
Committee on the
Investigation
1242
of the Pearl Harbor Attack,
1243
79th Cong.,
1244
1st Sess., pts.
1245
22-25.
This was not This was not specified
1246
specified by by statute. The Rules
1247
statute. of Procedure
1248
The Rules adopted by the Committee
1249
of Procedure for the conduct of its
1250
adopted by the hearings did not refer to
1251
Committee for the cross-examination. There
1252
conduct of was merely a general
1253
its hearings statement that
1254
made no mention "(i)n all examination
1255
of the type of witnesses, the rules of
1256
of notice, if any evidence shall be observed
1257
which was to be but liberally construed."
1258
given to prospective Hearings of the Temporary
1259
witnesses. National
1260
Hearings of Economic Committee, pt. 1,
1261
the Temporary 193.
National Economic
Committee, pt. 1
193.
This was not This was not specified It should be noted
specified by the by the authorizing that this
authorizing resolution. The Senate Committee was
resolution. later rejected a motion to investigating the
However, a permit Duane "to have allegedly unlawful
subsequent assistance of counsel for conduct of a
resolution provided his defense," but allowed specific individual;
that Duane was to him to be heard through yet, it does not
be informed of the counsel "in denial of appear that he was
charges against him any facts charged against given the right to
when he presented (him) or in excuse and cross-examine
himself at the bar and extenuation of his adverse
of the Senate. 10 offence." 10 Annals of witnesses.
Annals of Cong. 117 Cong. 118, 119 (1800).
(1800).
Extent of agency's
Scope of agency's subpoena power in
Agency investigative authority investigative
proceedings
Committee of Senator Smith had been The authorizing
the Senate to accused of conspiring with Aaron resolution did not
Investigate Burr to commit treason, and indicate whether
Whether Senator the Committee was the Committee had
John Smith established to investigate the subpoena power.
of Ohio Should the charges and to inquire 17 Annals of Cong.
Retain His Seat whether Senator Smith "should 40 (1807).
in the Senate be permitted any longer
(1807). to have a seat" in the
Senate. 17 Annals of Cong.
40
(1807)
Joint Committee (1) The Committee was The Committee had
on the Conduct established "to inquire into the "the power to send
of the conduct of the present (Civil) for persons and
Civil War war." Cong. Globe, 37th papers." Cong.
(1861). Cong., 2d Sess. 32, 40 (1861). Globe, 37th Cong.,
(2) The Committee was 2d
Sess. 32, 40
also authorized (1861).
"to inquire into the
truth of the rumored slaughter
of the Union troops, after their
surrender, at the recent attack
of the rebel forces upon Fort
Pillow, Tennessee; as also,
whether Fort Pillow could have
been sufficiently reenforced or
evacuated, and, if so, why it
was not done." 13 Stat. 405.
The right, if any, of
The type of notice persons affected by
required to an investigation to Miscellaneous
be given in cross-examine others Comments
investigative testifying at
proceedings3 investigative
proceedings4
This was not This was not specified Here again, it
specified by the by the authorizing should be observed that
authorizing resolution. Before the the Committee
resolution. The Committee, Senator Smith was investigating
ommittee furnished "claimed, as a right, to the conduct of a
Senator Smith with be heard in his defense particular
a description of by counsel, to have individual, and
the charges and compulsory process for that the Committee's
evidence against witnesses, and to be findings could
him. Report of confronted with his have had
the Committee, accusers, as if severe
17
Annals of the Committee consequences on
Cong. 56 (1807). had been a circuit court that individual.
of the United States."
Report of the Committee,
17
Annals of Cong. 56 (1807)
However, the Committee
rejected these claims
on the ground that it was
not a court, but rather
a body whose function
it was to investigate
and report the facts
relating to Senator Smith's
conduct. Ibid.
This was not This was not specified It should be noted
specified by the by the authorizing that the
authorizing resolution. Many of the Committee's
resolution. Many generals whose conduct was investigation
of the generals being investigated were not frequently
whose conduct was given the right to be centered on the
being investigated assisted by counsel or allegedly derelict
were given no to cross-examine other conduct of specific
notice of the witnesses. Botterud, individuals.
charges that had The Joint Committee on the Botterud, The
been leveled Conduct of the Civil War Joint Committee
against them. (M.A. Thesis, Georgetown on the Conduct
Botterud, The University, 1949), of the Civil
Joint Committee 42. War (M.A.
on the Conduct of Thesis, Georgetown
the Civil War University, 1949), 42.
(M.A. Thesis,
Georgetown
University, 1949),42.
Extent of agency's
Scope of agency's subpoena power in
Agency investigative authority investigative
proceedings
House Committee The Committee was established The Committee had
to Investigate to investigate charges that the authority "to send
the Electric Electric Boat Company of New for persons an
Boat Company Jersey had "been engaged in papers." H. R. Res.
of New efforts to exert corrupting 288, 60th Cong.,
Jersey (1908). influence on certain Members of 1st Sess., 42 Cong.
Congress in their legislative
Rec. 2972.
capacities, and * * * (had)
in fact, exerted such corrupting
influence." H. R. Res. 288, 60th
Cong., 1st Sess., 42 Cong. Rec.
2972.
House Committee (1) The Committee was authorized The Committee was
to Investigate to conduct an investigation authorized "to
Violations "for the purpose of ascertaining compel the
of the whether or not there have been attendance of
Antitrust Laws violations of the antitrust act of witnesses, (and) to
by the American July 2, 1890, and the various send for persons
Sugar Refining acts supplementary thereto, by and papers." H. R.
Co. (1911). the American Sugar Refining Res. 157, 62d
Co.," and further, to Cong.,
1st Sess.,
"investigate the organization
47
Cong. Rec. 1143
and operations of said American
Sugar Refining Co., and its
relations with other persons or
corporations engaged in the
business of manufacturing or
refining sugar, and all
other persons or corporations
engaged in manufacturing
or refining sugar and
their relations with each
other." H. R., Res. 157, 62d
Cong., 1st Sess., 47 Cong.
Rec. 1143.
Senate The Committee was authorized The Committee was
Committee to "to make a full and complete authorized "to
Investigate investigation of all lobbying require by subpena
Lobbying activities and all efforts to or otherwise the
(1935-1936) influence, encourage, promote, attendance of such
or retard legislation, directly,
witnesses and the
or indirectly in connection with
production of such
the so-called 'holding-company
correspondence,
The right, if any, of
The type of notice persons affected by
required to an investigation to Miscellaneous
be given in cross-examine others Comments
investigative testifying at
proceedings3 investigative
proceedings4
This was not The questioning of all It is of interest
specified by the witnesses was conducted that the
authorizing by the Committee, although Committee was
resolution. the parties being investigating
However, most of investigated were specific charges
the charges which permitted to of corruption
led to the submit written leveled against
investigation were interrogatories named
made in public for the Committee individuals.
hearings before the to propound to
Rules Committee certain witnesses.
of the House. H. R. Rep. No. 1727,
H. R. Rep. No. 60th Cong.,
1168, 60th Cong. 1st Sess. 11.
1st Sess.
1262
This was not This was not specified Once again, it
1263
specified by the by the authorizing statute. should be noted
1264
authorizing The Committee's Rules of that the
1265
resolution. Nor Procedure provided that Committee
1266
was this specified "counsel may attend was established
1267
by the Committee's witnesses summoned to investigate,
1268
Rules of Procedure. before this committee, among other things,
1269
but may not possible
1270
participate in the violations of
1271
examination or argument,
1272
the law.
1273
given by the committee,
1274
from time to time,
1275
as the occasion
1276
arises." Hearings before
1277
the Special Committee on
1278
the Investigation of the
American Sugar Refining
1279
Co., 62d Cong., 1st Sess.,
1280
Vols. 1, 3.
This was not This was not specified
1281
specified by the by the authorizing
1282
authorizing resolution. resolution.
The Committee adopted a rule
1283
that witnesses and their
Extent of agency's
Scope of agency's subpoena power in
1284
Agency investigative authority investigative
1285
proceedings
1286
bill', or any other matter or
1287
books, papers, and
1288
proposal affecting legislation."
1289
documents * * * as
S. Res. 165, 74th Cong., 1st
1290
it * * * (deemed)
1291
Sess., 79 Cong. Rec. 11003.
1292
advisable." S.
Res. 165, 74th
1293
Cong., 1st Sess.,
1294
79 Cong. Rec.
11003.
The right, if any, of
The type of notice persons affected by
1295
required to an investigation to Miscellaneous
1296
be given in cross-examine others Comments
1297
investigative testifying at
1298
proceedings3 investigative
proceedings4
1299
attorneys could not examine
1300
other witnesses; however,
1301
they could submit
1302
written questions,
1303
which the Committee would
1304
consider propounding to
1305
other witnesses. Hearings
1306
before Special Senate
Committee to Investigate
Lobbying Activities, 74th
1307
Cong., 2d Sess. 1469.
1308
Mr. Justice FRANKFURTER, concurring in the result.
1309
The United States Commission on Civil Rights, in exercising powers granted to it by the Civil Rights Act of 1957 (71 Stat. 635, 42 U.S.C. § 1975c, 42 U.S.C.A. § 1975c), scheduled a hearing to be held by it in Shreveport, Louisiana, on July 13, 1959. By these two actions judgments were sought to declare the proposed hearing illegal and to restrain the members of the Commission from holding it.
1310
The rules of procedure formulated by the Commission amply rest on leave of Congress. I need add nothing on this phase of the case to the Court's opinion. While it is a most salutary doctrine of constitutional adjudication to give a statute even a strained construction to avoid facing a serious doubt of constitutionality, 'avoidance of a difficulty will not be pressed to the point of disingenuous evasion. Here the intention of the Congress is revealed too distinctly to permit us to ignore it because of mere misgivings as to power. The problem must be faced and answered.' Moore Ice Cream Co. v. Rose, 289 U.S. 373, 379, 53 S.Ct. 620, 622, 77 L.Ed. 1265. I have no such misgivings in the situation before us. I also agree with the Court's conclusion in rejecting the constitutional claims of the clients. In view, however, of divergences between the Court's analysis and mine of the specific issues before us, including the authoritative relevance of In re Groban, 352 U.S. 330, 77 S.Ct. 510, 1 L.Ed.2d 376 and Anonymous Nos. 6 and 7 v. Baker, 360 U.S. 287, 79 S.Ct. 1157, 3 L.Ed.2d 1234, I state my reasons for agreement.
1311
To conduct the Shreveport hearing on the basis of sworn allegations of wrongdoing by the plaintiffs, without submitting to them these allegations and disclosing the identities of the affiants, would, it is claimed, violate the Constitution. The issue thus raised turns exclusively on the application of the Due Process Clause of the Fifth Amendment. The Commission's hearing are not proceedings requiring a person to answer for an 'infamous crime,' which must be based on an indictment of a grand jury (Amendment V), nor are they 'criminal prosecutions' giving an accused the rights defined by Amendment VI. Since due process is the constitutional axis on which decision must turn, our concern is not with absolutes, either of governmental power or of safeguards protecting individuals. Inquiry must be directed to the validity of the adjustment between these clashing interests—that of Government and of the individual, respectively—in the procedural scheme devised by the Congress and the Commission. Whether the scheme satisfies those strivings for justice which due process guarantees, must be judged in the light of reason drawn from the considerations of fairness that reflect our traditions of legal and political thought, duly related to the public interest Congress sought to meet by this legislation as against the hazards or hardship to the individual that the Commission procedure would entail.
1312
Barring rare lapses, this Court has not unduly confined those who have the responsibility of governing within a doctrinaire conception of 'due process.' The Court has been mindful of the manifold variety and perplexity of the tasks which the Constitution has vested in the legislative and executive branches of the Government by recognizing that what is unfair in one situation may be fair in another. Compare, for instance, Den ex dem Murray v. Hoboken Land & Improvement Co., 18 How. 272, 15 L.Ed. 372, with Ng Fung Ho v. White, 259 U.S. 276, 42 S.Ct. 492, 66 L.Ed. 938, and see Federal Communications Comm. v. WJR, 337 U.S. 265, 275, 69 S.Ct. 1097, 1103, 93 L.Ed. 1353. Whether the procedure now questioned offends 'the rudiments of fair play,' Chicago, M. & St. P.R. Co. v. Polt, 232 U.S. 165, 168, 34 S.Ct. 301, 58 L.Ed. 554, is not to be tested by loose generalities or sentiments abstractly appealing. The precise nature of the interest alleged to be adversely affected or of the freedom of action claimed to be curtailed, the manner in which this is to be done and the reasons for doing it, the balance of individual hurt and the justifying public good—these and such like are the considerations, avowed or implicit, that determine the judicial judgment when appeal is made to 'due process.'
1313
The proposed Shreveport hearing creates risks of harm to the plaintiffs. It is likewise true that, were the plaintiffs afforded the procedural rights they seek, they would have a greater opportunity to reduce these risks than will be theirs under the questioned rules of the Commission. Some charges touching the plaintiffs might be withdrawn or modified, if those making them knew that their identities and the content of their charges were to be revealed. By the safeguards they seek the plaintiffs might use the hearing as a forum for subjecting the charges against them to a scrutiny that might disprove them or, at least, establish that they are not incompatible with innocent conduct.
1314
Were the Commission exercising an accusatory function, were its duty to find that named individuals were responsible for wrongful deprivation of voting rights and to advertise such finding or to serve as part of the process of criminal prosecution, the rigorous protections relevant to criminal prosecutions might well be the controlling starting point for assessing the protection which the Commission's procedure provides. The objectives of the Commission on Civil Rights, the purpose of its creation, and its true functioning are quite otherwise. It is not charged with official judgment on individuals nor are its inquiries so directed. The purpose of its investigations is to develop facts upon which legislation may be based. As such, its investigations are directed to those concerns that are the normal impulse to legislation and the basis for it. To impose upon the Commission's investigations the safeguards appropriate to inquiries into individual blameworthiness would be to divert and frustrate its purpose. Its investigation would be turned into a forum for the litigation of individual culpability matters which are not within the keeping of the Commission, with which it is not effectively equipped to deal, and which would deflect it from the purpose for which it was within its limited life established.
1315
We would be shutting our eyes to actualities to be unmindful of the fact that it would dissuade sources of vitally relevant information from making that information known to the Commission, if the Commission were required to reveal its sources and subject them to cross-examination. This would not be a valid consideration for secrecy were the Commission charged with passing official incriminatory or even defamatory judgment on individuals. Since the Commission is merely an investigatorial arm of Congress, the narrow risk of unintended harm to the individual is outweighed by the legislative justification for permitting the Commission to be the critic and protector of the information given it. It would be wrong not to assume that the Commission will responsibly scrutinize the reliability of sworn allegations that are to serve as the basis for further investigation and that it will be rigorously vigilant to protect the fair name of those brought into question.
1316
In appraising the constitutionally permissive investigative procedure claimed to subject individuals to incrimination or defamation without adequate opportunity for de ense, a relevant distinction is between those proceedings which are preliminaries to official judgments on individuals and those, like the investigation of this Commission, charged with responsibility to gather information as a solid foundation for legislative action. Judgments by the Commission condemning or stigmatizing individuals are not called for. When official pronouncements on individuals purport to rest on evidence and investigation, it is right to demand that those so accused be given a full opportunity for their defense in such investigation, excepting, of course, grand jury investigations. The functions of that institution and its constitutional prerogatives are rooted in long centuries of Anglo-American history. On the other hand, to require the introduction of adversary contests relevant to determination of individual guilt into what is in effect a legislative investigation is bound to thwart it by turning it into a serious digression from its purpose.
1317
The cases in which this Court has recently considered claims to procedural rights in investigative inquiries alleged to deal unfairly with the reputation of individuals or to incriminate them, have made clear that the fairness of their procedures is to be judged in light of the purpose of the inquiry, and, more particularly, whether its essential objective is official judgment on individuals under scrutiny. Such a case was Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377. There the inquiry was for the purpose of determining whether the security clearance of a particular person was to be revoked. A denial of clearance would shut him off from the opportunity of access to a wide field of employment. The Court concluded that serious constitutional questions were raised by denial of the rights to confront accusatory witnesses and to have access to unfavorable reports on the basis of which the very livelihood of an individual would be gravely jeopardized. Again, Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 71 S.Ct. 624, 95 L.Ed. 817, presented a contrasting situation to the one before us. The Government there sought through the Attorney General to designate organizations as 'Communist,' thus furnishing grounds on which to discharge their members from government employment. No notice was given of the charges against the organizations nor were they given an opportunity to establish the innocence of their aims and acts. It was well within the realities to say of what was under scrutiny in Joint Anti-Fascist Refugee Committee v. McGrath that 'It would be blindness * * * not be recognize that in the conditions of our time such designation drastically restricts the organizations, if it does not proscribe them.' 341 U.S. at page 161, 71 S.Ct. at page 643 (concurring opinion). And the procedure which was found constitutionally wanting in that case could be fairly characterized as action 'to maim or decapitate, on the mere say-so of the Attorney General, an organization to all outward-seeming engaged in lawful objectives * * *.' Ibid. Nothing like such characterization can remotely be made regarding the procedure for the proposed inquiry of the Commission on Civil Rights.
1318
Contrariwise, decisions arising under the Due Process Clause of the Fourteenth Amendment strongly support the constitutionality of what is here challenged, where the purposes were as here truly investigatorial. Thus, In re Groban, 352 U.S. 330, 77 S.Ct. 510, 1 L.Ed.2d 376, sustained inquiry by the Ohio State Fire Marshal into the causes of a fire while excluding counsel of subpoenaed witnesses on whose premises the fire occurred. The Court so held even though the Fire Marshal had authority, after questioning a witness, to arrest him if he believed there was sufficient evidence to charge him with arson. The guiding consideration was that, although suspects might be discovered, the essential purpose of the Fire Marshal's inquiry was not to adjudicate individual responsibility for the fire but to purs e a legislative policy of fire prevention through the discovery of the origins of fires. This decision was applied in Anonymous Nos. 6 and 7 v. Baker, 360 U.S. 287, at page 288, 79 S.Ct. 1157, at page 1158, 3 L.Ed.2d 1234, which concerned 'a state judicial Inquiry into alleged improper practices at the local bar'. Rejecting the claim based on the consideration that the inquiry might serve as a groundwork for the prosecution of witnesses called before it, the Court applied Groban because the inquiry was a general one and appellants were before it not as potential accused but 'solely as witnesses.' The proposed investigation of the Commission on Civil Rights is much less likely to result in prosecution of witnesses before it than were the investigations in Groban and Baker. Just as surely, there is not present in the cases now before us a drastic official judgment, as in Greene and Joint Anti-Fascist Refugee Committee, where the Court deemed it necessary to insure that full opportunity for defense be accorded to individuals who were the specific, adverse targets of the secret process.
1319
Moreover, the limited, investigatorial scope of the challenged hearing is carefully hedged in with protections for the plaintiffs. They will have the right to be accompanied by counsel. The rules insure that they will be made aware of the subject of the hearings. They will have the right to appeal to the Commission's power to subpoena additional witnesses. The rules significantly direct the Commission to abstain from public exposure by taking in executive session any evidence or testimony tending 'to defame, degrade, or incriminate any person.' A person so affected is given the right to read such evidence and to reply to it. These detailed provisions are obviously designed as safeguards against injury to persons who appear in public hearings before the Commission. The provision for screening defamatory and incriminatory testimony in order to keep it from the public may well be contrasted with the procedure in the Joint Anti-Fascist case, where the very purpose of the inquiry was to make an official judgment that certain organizations were 'Communist.' Such condemnation of an organization would of course taint its members. The rules of the Commission manifest a sense of its responsibility in carrying out the limited investigatorial task confided to it. It is not a constitutional requirement that the Commission be argumentatively turned into a forum for trial of the truth of particular allegations of denial of voting rights in order thereby to invalidate its functioning. Such an inadmissible transformation of the Commission's function is in essence what is involved in the claims of the plaintiffs. Congress has entrusted the Commission with a very different role—that of investigating and appraising general conditions and reporting them to Congress so as to inform the legislative judgment. Resort to a legislative commission as a vehicle for proposing well-founded legislation and recommending its passage to Congress has ample precedent.
1320
Finally it should be noted that arguments directed either at the assumed novelty of employing the Commission in the area of legislative interest which led Congress to its establishment, or at the fact that the source of the Commission's procedures were those long used by Committees of Congress, are not particularly relevant. History may satisfy constitutionality, but constitutionality need not produce the title deeds of history. Mere age may establish due process, but due process does not preclude new ends of government or new means for achieving them. Since the Commission has, within its legislative framework, provided procedural safeguards appropriate to its proper function, claims of unfairness offending due process fall. The proposed Shreveport hearing fully comports with the Constitution and the law. Accordingly I join the judgment of the Court in reversing the District Court.
1321
Mr. Justice HARLAN, whom Mr. Justice CLARK joins, concurring.
1322
In joining the Court's opinion, as I do, I desire to add that in my view the principles established by In re Groban, 352 U.S. 330, 77 S.Ct. 510, 1 L.Ed.2d 376, and Anonymous Nos. 6 and 7 v. Baker, 360 U.S. 287, 79 S.Ct. 1157, 3 L.Ed.2d 1234, are dispositive of the issues herein in the Commission's favor.
1323
Mr. Justice DOUGLAS, with whom Mr. Justice BLACK concu s, dissenting.
1324
With great deference to my Brethren I dissent from a reversal of these judgments.
1325
The cause which the majority opinion serves is, on the surface, one which a person dedicated to constitutional principles could not question. At the bottom of this controversy is the right to vote protected by the Fifteenth Amendment. That Amendment withholds power from either the States or the United States to deny or abridge the right to vote 'on account of race, color, or previous condition of servitude.' This right stands beyond the reach of government. Only voting qualifications that conform to the standards proscribed by the Fifteenth Amendment may be prescribed. See Lassiter v. Northampton County Board of Elections, 360 U.S. 45, 79 S.Ct. 985, 3 L.Ed.2d 1072. As stated in Terry v. Adams, 345 U.S. 461, 468, 73 S.Ct. 809, 813, 97 L.Ed. 1152, 'The Amendment, the congressional enactment and the cases make explicit the rule against racial discrimination in the conduct of elections.' By democratic values this right is fundamental, for the very existence of government dedicated to the concept 'of the people, by the people, for the people,' to use Lincoln's words, depends on the franchise.
1326
Yet important as these civil rights are, it will not do to sacrifice other civil rights in order to protect them. We live and work under a Constitution. The temptation of many men of goodwill is to cut corners, take short cuts, and reach the desired end regardless of the means. Worthy as I think the ends are which the Civil Rights Commission advances in these cases, I think the particular means used are unconstitutional.
1327
The Commission, created by Congress, is a part of 'the executive branch' of the Government, 71 Stat. 634, 42 U.S.C. § 1975(a), 42 U.S.C.A. § 1975(a), whose members are appointed by the President and confirmed by the Senate. § 1975(a). It is given broad powers of investigation with the view of making a report with 'findings and recommendations' to the Congress. § 1975c. It is empowered, among other things, to
1328
'investigate allegations in writing under oath or affirmation that certain citizens of the United States are being deprived of their right to vote and have that vote counted by reason of their color, race, religion, or national origin; which writing, under oath or affirmation, shall set forth the facts upon which such belief or beliefs are based.' § 1975c(a)(1).
1329
Complaints have been filed with the Commission charging respondents, who are registrars of voters in Louisiana, with depriving persons of their voting rights by reason of their color. If these charges are true and if the registrars acted willfully (see Screws v. United States, 325 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495), the registrars are criminally responsible under a federal statute which subjects to fine and imprisonment1 anyone who willfully deprives a citizen of any right under the Constitution 'by reason of his color, or race.'2 18 U.S.C. § 242, 18 U.S.C.A. § 242.
1330
The investigation and hearing by the Commission are therefore necessarily aimed at determining if this criminal law has been violated. The serious and incriminating nature of the charge and the disclosure of facts concerning it are recognized by the Congress, for the Act requires certain protective procedures to be adopted where defamatory, degrading, or incriminating evidence may be adduced.
1331
'If the Commission etermines that evidence or testimony at any hearing may tend to defame, degrade, or incriminate any person, it shall (1) receive such evidence or testimony in executive session; (2) afford such person an opportunity voluntarily to appear as a witness; and (3) receive and dispose of requests from such person to subpena additional witnesses.' 42 U.S.C. § 1975a(e), 42 U.S.C.A. § 1975a(e).
1332
Yet these safeguards, given as a matter of grace, do not in my judgment dispose of the constitutional difficulty. First, it is the Commission's judgment, not the suspect's, that determines whether the hearing shall be secret or public. Thus this procedure has one of the evils protested against in In re Groban, 352 U.S. 330, 337, 348—353, 77 S.Ct. 510, 515, 521—524, 1 L.Ed.2d 376 (dissenting opinion). The secrecy of the inquisition only underlines its inherent vices: 'Secret inquisitions are dangerous things justly feared by free men everywhere. They are the breeding place for arbitrary misuse of official power. They are often the beginning of tyranny as well as indispensable instruments for its survival. Modern as well as ancient history bears witness that both innocent and guilty have been seized by officers of the state and whisked away for secret interrogation or worse until the groundwork has been securely laid for their inevitable conviction.' Id., 352 U.S. at pages 352—353, 77 S.Ct. at page 523. As said in dissent in Anonymous Nos. 6 and 7 v. Baker, 360 U.S. 287, 299, 79 S.Ct. 1157, 1164, 3 L.Ed.2d 1234, 'secretly compelled testimony does not lose its highly dangerous potentialities merely because' it is taken in preliminary proceedings. Second, the procedure seems to me patently unconstitutional whether the hearing is public or secret. Under the Commission's rules the accused is deprived of the right to notice of the charges against him and the opportunity of cross-examination. This statutory provision, fashioned to protect witnesses as such rather than a prospective defendant, permits the Commission to exclude the accused entirely from the hearing and deny him the opportunity even to observe the testimony of his accusers. And even if the Commission were inclined in a particular case to protect the accused from the opprobrium likely to flow from the testimony of individual witnesses against him by holding secret sessions, this would be little comfort after the Commission's findings, based on such untested evidence, were publicized across the Nation.
1333
I assume that no court would be justified in enjoining a Congressional Committee composed of Senators or Congressmen that engaged in this kind of conduct. This is not that kind of a committee. Moreover, even if it were and if private rights were infringed by reason of the Committee's violations of the Constitution, there are circumstances when redress can be had in the courts. Kilbourn v. Thompson, 103 U.S. 168, 26 L.Ed. 377. Cf. Greenfield v. Russel, 292 Ill. 392, 127 N.E. 103, 9 A.L.R. 1334; Opinion of the Justices, 96 N.H. 530, 73 A.2d 433. The judiciary also becomes implicated when the Congress asks the courts to back up what its Committees have done; or when a victim of an investigation asks relief from punishment imposed on him. Then the procedural safeguards of the Bill of Rights come into full play. See Watkins v. United States, 354 U.S. 178, 77 S.Ct. 1173, 1 L.Ed.2d 1273.
1334
The Civil Rights Commission, however, is not a Congressional Committee of Senators or Congressmen; nor is it an arm of Congress. It is an arm of the Executive. There is, in my view, only one way the Chief Executive may move against a person accused of a crime and deny him the right of confrontation and cross-examination and that is by the grand jury.
1335
The grand jury is the accusatory body in federal law as provided by the Fifth Amendment. The essence of the institution of the grand jury was stated by 1 Stephen, History of Criminal Law of England, 252: 'The body of the country are the accusers.' Thomas Erskine stated the matter ac urately and eloquently in Jones v. Shipley 21 How.St.Tr. 847, 977.
1336
'(I)t is unnecessary to remind your lordships, that, in a civil case, the party who conceives himself aggrieved, states his complaint to the court,—avails himself at his own pleasure of its process,—compels an answer from the defendant by its authority,—or taking the charge pro confesso against him on his default, is entitled to final judgment and execution for his debt, without any interposition of a jury. But in criminal cases it is otherwise; the court has no cognizance of them, without leave from the people forming a grand inquest. If a man were to commit a capital offense in the face of all the judges of England, their united authority could not put him upon his trial:—they could file no complaint against him, even upon the records of the supreme criminal court, but could only commit him for safe custody, which is equally competent to every common justice of the peace:—the grand jury alone could arraign him, and in their discretion might likewise finally discharge him, by throwing out the bill, with the names of all your lordships as witnesses on the back of it. If it shall be said, that this exclusive power of the grand jury does not extend to lesser misdemeanors, which may be prosecuted by information; I answer, that for that very reason it becomes doubly necessary to preserve the power of the other jury which is left.'
1337
This idea, though uttered in 1783, is modern and relevant here. The grand jury brings suspects before neighbors, not strangers. Just recently in Stirone v. United States, 361 U.S. 212, 218, 80 S.Ct. 270, 273, 4 L.Ed.2d 252, we said, 'The very purpose of the requirement that a man be indicted by grand jury is to limit his jeopardy to offenses charged by a group of his fellow citizens acting independently of either prosecuting attorney or judge.'
1338
This Commission has no such guarantee of fairness. Its members are not drawn from the neighborhood. The members cannot be as independent as grand juries because they meet not for one occasion only; they do a continuing job for the executive and, if history is a guide, tend to acquire a vested interest in that role.
1339
The grand jury, adopted as a safeguard against 'hasty, malicious, and oppressive' action by the Federal Government, Ex parte Bain, 121 U.S. 1, 12, 7 S.Ct. 781, 787, 30 L.Ed. 849, stands as an important safeguard to the citizen against open and public accusations of crime. Today the grand jury may act on its own volition, though originally specific charges by private prosecutors were the basis of its action. Hale v. Henkel, 201 U.S. 43, 59—60, 26 S.Ct. 370, 372—373, 50 L.Ed. 652. It has broad investigational powers to look into what may be offensive against federal criminal law. United States v. Johnson, 319 U.S. 503, 510, 63 S.Ct. 1233, 1237, 87 L.Ed. 1546. An indictment returned by a grand jury may not be challenged because it rests wholly on hearsay. Costello v. United States, 350 U.S. 359, 361—362, 76 S.Ct. 406, 407—408, 100 L.Ed. 397. An accused is not entitled to a hearing before a grand jury, nor to present evidence, nor to be represented by counsel; and a grand jury may act secretly—a procedure normally abhorrent to due process. In this country as in England of old, the grand jury is convened as a body of laymen, free from technical rules, acting in secret, pledged in indict no one because of prejudice and to free no one because of special favor. Costello v. United States, supra, 350 U.S. at page 362, 76 S.Ct. at page 408.
1340
Grand juries have their defects. They do not always return a true bill, for while the prejudices of the community may radiate through them, they also have the saving quality of being familiar with the people involved. They are the only accusatory body in the Federal Government that is recognized by the Constitution. I would allow no other engine of government, either executive or legislative, to take their place—at least when the right of confrontation and cross-examinat on are denied the accused as is done in these cases.
1341
The might and power of the Federal Government have no equal. When its guns are leveled at a citizen on charges that he committed a federal crime, it is for me no answer to say that the only purpose is to report his activities to the President and Congress, not to turn him over to the District Attorney for prosecution. Our Constitution was drawn on the theory that there are certain things government may not do to the citizen and that there are other things that may be done only in a specific manner. The relationship of the Federal Government to a man charged with crime is carefully defined. Its power may be marshalled against him, but only in a defined way. When we allow this substitute method, we make an innovation that does not comport with that due process which the Fifth Amendment requires of the Federal Government. When the Federal Government prepares to inquire into charges that a person has violated federal law, the Fifth Amendment tells us how it can proceed.
1342
The Civil Rights Commission, it is true, returns no indictment. Yet in a real sense the hearings on charges that a registrar has committed a federal offense are a trial. Moreover, these hearings before the Commission may be televised or broadcast on the radio.3 In our day we have seen Congressional Committees probing into alleged criminal conduct of witnesses appearing on the television screen. This is in reality a trial in which the whole Nation sits as a jury. Their verdict does not send men to prison. But it often condemns men or produces evidence to convict and even saturates the Nation with prejudice against an accused so that a fair trial may be impossible. As stated in 37 A.B.A.J. 392 (1951), 'If several million television viewers see and hear a politician, a businessman or a movie actor subjected to searching interrogation, without ever having an opportunity to cross-examine his accusers or offer evidence in his own support, that man will stand convicted, or at least seriously compromised, in the public mind, whatever the later formal findings may be.' The use of this procedure puts in jeopardy our traditional concept of the way men should be tried and replaces it with 'a new concept of guilt based on inquisitorial devices.' Note, 26 Temp.L.Q. 70, 73.
1343
Yet whether the hearing is televised or not it will have all the evils of a legislative trial. 'The legislative trial,' wrote Alan Barth in Government by Investigation (1955) p. 81, 'is a device for condemning men without the formalities of due process.' And he went on to say:
1344
'The legislative trial serves three distinct though related purposes: (1) it can be used to punish conduct which is not criminal; (2) it can be used to punish supposedly criminal conduct in the absence of evidence requisite to conviction in a court of law; and (3) it can be used to drive or trap persons suspected of 'disloyalty' into committing some collateral crime such as perjury or contempt of Congress, which can then be subjected to punishment through a judicial proceeding. 'It is hard to get them for their criminal activities in connection with espionage, but a way has been found,' Senator McCarthy once remarked. 'We are getting them for perjury and putting some of the worst of them away. For that reason I hope every witness who comes here is put under oath and his testimony is gone over with a fine-tooth comb, and if we annot convict some of them for their disloyal activities, perhaps we can convict some of them for perjury.' That they may have been guilty of no violation of law in the first place seems of no concern to the Senator.' Id., at 83. And see Telford Taylor, Grand Inquest (1955).
1345
Barth wrote of hearings in the so-called loyalty cases. But the reasons apply to any hearing where a person's job or liberty or reputation is at stake. Barth wrote of hearings held by Congressional Committees. Yet the evil is compounded where the 'legislative trial' has become a 'Commission trial.' And while I assume that a court would not enjoin the typical Congressional Committee, it is duty bound to keep commissions within limits, when its jurisdiction is properly invoked.
1346
The right to know the claims asserted against one and to contest them—to be heard—to conduct a cross-examination—these are all implicit in our concept of 'a full and fair hearing' before any administrative agency, as the Court in Morgan v. United States, 304 U.S. 1, 18, 58 S.Ct. 773, 999, 82 L.Ed. 1129, emphasized. We spoke there in the context of civil litigation where property was at stake. Here the need for all the protective devices of a fair hearing is greater. For one's job and perhaps his liberty are hinged on these hearings.
1347
We spoke in the tradition of the Morgan case only recently in Greene v. McElroy, 360 U.S. 474, 496—497, 79 S.Ct. 1400, 1413, 3 L.Ed.2d 1377.
1348
'Certain principles have remained relatively immutable in our jurisprudence. One of these is that where governmental action seriously injures an individual, and the reasonableness of the action depends on fact findings, the evidence used to prove the Government's case must be disclosed to the individual so that he has an opportunity to show that it is untrue. While this is important in the case of documentary evidence, it is even more important where the evidence consists of the testimony of individuals whose momory might be faulty or who, in fact, might be perjurers or persons motivated by malice, vindictiveness, intolerance, prejudice, or jealousy. We have formalized these protections in the requirements of confrontation and cross-examination. They have ancient roots. They find expression in the Sixth Amendment which provides that in all criminal cases the accused shall enjoy the right 'to be confronted with the witnesses against him.' This Court has been zealous to protect these rights from erosion. It has spoken out not only in criminal cases, * * * but also in all types of cases where administrative and regulatory actions were under scrutiny.' (Italics added.)
1349
We spoke there in a context where men were being deprived of their jobs as a result of investigations into their loyalty. Certainly no less is required if hearings are to be held on charges that a person has violated a federal law.
1350
Respondents ask no more than the right to known the charges, to be confronted with the accuser, and to cross-examine him. Absent these rights, they ask for an injunction. In the Greene case we said these rights were available 'where governmental action seriously injures an individual.' 360 U.S., at page 496, 79 S.Ct. at page 1413. Injury is plain and obvious here—injury of a nature far more serious than merely losing one's job, as was the situation in the Greene case. If the hearings are to be without the safeguards which due process requires of all trials—civil and criminal—there is only one way I know by which the Federal Government may proceed and that is by grand jury. If these trials before the Commission are to be held on charges that these respondents are criminals, the least we can do is to allow them to know what they are being tried for, and to confront their accusers and to cross-examine them.4 This protection would be extended to them in any preliminary hearing, even in one before a United States Commissioner.5 Confrontation and cross-examination are so basic to our concept of due process (Peters v. Hobby, 349 U.S. 31, 351—352, 75 S.Ct. 790, 800—801, 99 L.Ed. 1129 (concurring opinion)) that no proceeding by an administrative agency is a fair one that denies these rights.
1351
References are made to federal statutes governing numerous administrative agencies such as the Federal Trade Commission and the Securities and Exchange Commission; and the inference is that what is done in this case can be done there. This comes as a surprise to one who for some years was engaged in those administrative investigations. No effort was ever made, so far as I am aware, to compel a person, charged with violating a federal law, to run the gantlet of a hearing over his objection. No objection based either on the ground now advanced nor on the Fifth Amendment was, so far as I know, ever overruled. Investigations were made; and they were searching. Such evidence of law violations as was obtained was turned over to the Department of Justice. But never before, I believe, has a federal executive agency attempted, over the objections of an accused, to force him through a hearing to determine whether he has violated a federal law. If it did, the action was lawless and courts should have granted relief.
1352
What we do today is to allow under the head of due process a fragmentation of proceedings against accused people that seems to me to be foreign to our system. No indictment is returned, no commitment to jail is made, no formal criminal charges are made. Hence the procedure is condoned as violating no constitutional guarantee. Yet what is done is another short cut used more and more these days to 'try' men in ways not envisaged by the Constitution. The result is as damaging as summoning before committees men who it is known will invoke the Fifth Amendment and pillorying them for asserting their constitutional rights. This case—like the others—is a device to expose people as suspects or criminals. The concept of due process which permits the invention and use of prosecutorial devices not included in the Constitution makes due process reflect the subjective or even whimsical notions of a majority of this Court as from time to time constituted. Due process under the prevailing doctrine is what the judges say it is; and it differs from judge to judge, from court to court. This notion of due process makes it a tool of the activists who respond to their own visceral reactions in deciding what is fair, decent, or reasonable. This elastic concept of due process is described in the concurring opinion as follows:
1353
'Whether the scheme satisfies those strivings for justice which due process guarantees, must be judged in the light of reason drawn from the considerations of fairness that reflect our traditions of legal and political thought, duly related to the public interest Congress sought to meet by this legisla ion as against the hazards or hardship to the individual that the Commission procedure would entail.'
1354
When we turn to the cases, personal preference, not reason, seems, however, to be controlling.
1355
Illustrative are the First Amendment protection given to the activities of a classroom teacher by the Due Process Clause of the Fourteenth Amendment in Sweezy v. State of New Hampshire, 354 U.S. 234, 255, 261—263, 77 S.Ct. 1203, 1214, 1217—1218, 1 L.Ed.2d 1311 (concurring opinion), but denied to the leader of an organization holding discussion groups at a summer camp in Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090; the decisions that due process was violated by the use of evidence obtained by the forceful use of a stomach pump in Rochin v. People of California, 342 U.S. 165, 72 S.Ct. 205, 96 L.Ed. 183, but not when evidence was used which was obtained by taking the blood of an unconscious prisoner. Breithaupt v. Abram, 352 U.S. 432, 77 S.Ct. 408, 1 L.Ed.2d 448.
1356
It is said in defense of this chameleonlike due process that it is not 'an exercise of whim or will,' that it is 'founded on something much deeper and more justifiable than personal preference. As far as it lies within human limitations, it must be an impersonal judgment. It must rest on fundamental presuppositions rooted in history to which widespread acceptance may fairly be attributed.' Sweezy v. State of New Hampshire, supra, 354 U.S. at page 267, 77 S.Ct. at page 1220 (concurring opinion). Yet one who tries to rationalize the cases on cold logic or reason fails. The answer turns on the personal predilections of the judge; and the louder the denial the more evident it is that emotion rather than reason dictates the answer. This is a serious price to pay for adopting a free-wheeling concept of due process, rather than confining it to the procedures and devices enumerated in the Constitution itself. As said in Adamson v. People of State of California, 332 U.S. 46, 68, 89, 67 S.Ct. 1672, 1695, 91 L.Ed. 1903 (dissenting opinion):
1357
'In my judgment the people of no nation can lose their liberty so long as a Bill of Rights like ours survives and its basic purposes are conscientiously interpreted, enforced and respected so as to afford continuous protection against old, as well as new, devices and practices which might thwart those purposes. I fear to see the consequences of the Court's practice of substituting its own concepts of decency and fundamental justice for the language of the Bill of Rights as its point of departure in interpreting and enforcing that Bill of Rights.'
1358
That was written concerning the meaning of the Due Process Clause of the Fourteenth Amendment. But it has equal vitality when applied to the Due Process Clause of the Fifth Amendment with which we are now concerned.
1359
I think due process is described in the Constitution and limited and circumscribed by it. The Constitution is explicit as respects permissible accusatory process that the Executive can employ against the citizen. Men of goodwill, not evil ones only, invent, under feelings of urgency, new and different procedures that have an awful effect on the citizen. The new accusatory procedure survives if a transient majority of the Court are persuaded that the device is fair or decent. My view of the Constitution confines judges—as well as the lawmakers and the Executive—to the procedures expressed in the Constitution. We look to the Constitution—not to the personal predilections of the judges—to see what is permissible. Since summoning an accused by the Government to explain or justify his conduct, that is charged as a crime, may be done only in one way, I would require a constitutional amendment before it can be done in a different way.
1360
The alternate path which we take today leads to trial of separate essential parts of criminal prosecutions by commissions, by executive agencies, by legislative committees. Farming out pieces of trials to investigative agencies is fragmentizing the kind of trial the Constitution authorizes. It prejudices the ultimate trial itself; and it puts in the hands of officials the awesome power which the Framers entrusted only to judges, grand jurors and petit jurors drawn from the community where the accused lives. It leads to government by inquisition.
1361
The Civil Rights Commission can hold all the hearings it desires; it can adduce testimony from as many people as it likes; it can search the records and archives for such information it needs to make an informed report to Congress. See United States v. Morton Salt Co., 338 U.S. 632, 70 S.Ct. 357, 94 L.Ed. 401; Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614. But when it summons a person, accused under affidavit of having violated the federal election law, to see if the charge is true, it acts in lieu either of a grand jury or of a committing magistrate. The sifting of criminal charges against people is for the grand jury or for judges or magistrates and for them alone under our Constitution. In my view no other accusatory body can be used that withholds the rights of confrontation and cross-examination from those accused of federal crimes.
1362
I would affirm these judgments.
1
Although the Civil Rights Act of 1957 provided that the Commission should cease to exist within two years after its creation, 71 Stat. 635, 42 U.S.C. § 1975c, 42 U.S.C.A. § 1975c, in 1959 Congress extended the Commission's life for an additional two years. 73 Stat. 724.
2
The appellants in No. 549 and the petitioners in No. 550 are the individual members of the Civil Rights Commission. Hereinafter, they will be referred to as 'the Commission.' The appellees in No. 549 and the respondents in No. 550 will both hereinafter be referred to as 'respondents.'
3
Because No. 549 was heard and decided by a three-judge District Court, a direct appeal to this Court was sought by the Commission pursuant to 28 U.S.C. § 1253, 28 U.S.C.A. § 1253. The Commission also filed an appeal in No. 550 with the United States Court of Appeals for the Fifth Circuit. However, before the Court of Appeals could render a decision in No. 550, the Commission filed a petition for certiorari pursuant to Rule 20 of this Court, 28 U.S.C.A.
4
Section 104 of the Civil Rights Act of 1957, 71 Stat. 635, 42 U.S.C. § 1975c(a)(1), 42 U.S.C.A. § 1975c(a)(1).
5
Section 105(f) of the Civil Rights Act authorizes the Commission to hold hearings and to subpoena witnesses. That section provides:
'(f) Hearings; issuance of subpenas.
'The Commission, or on the authorization of the Commission any subcommittee of two of more members, at least one of whom shall be of each major political party, may, for the purpose of carrying out the provisions of this Act, hold such hearings and act at such times and places as the Commission or such authorized subcommittee may deem advisable. Subpenas for the attendance and testimony of witnesses or the production of written or other matter may be issued in accordance with the rules of the Commission as contained in section 1975a(j) and (k) of this title, over the signature of the Chairman of the Commission or of such subcommittee, and may be served by any person designated by such Chairman.' 71 Stat. 636, 42 U.S.C. § 1975d(f), 42 U.S.C.A. § 1975d(f).
6
The role of private citizens in depriving Negroes of their right to vote was one of the questions involved in United States v. McElveen, D.C.E.D.L.a., 180 F.Supp. 10, affirmed as to defendant Thomas, United States v. Thomas, 362 U.S. 58, 80 S.Ct. 612, 4 L.Ed.2d 535.
7
Rule 3(i) of the Commission's Rules of Procedure, adopted on July 1, 1958, prohibits witnesses or their counsel from cross-examining other witnesses. That Rule reads:
'Interrogation of witnesses at hearings shall be conducted only by members of the Commission or by authorized staff personnel.'
8
The full text of Section 102(h) of the Civil Rights Act reads as follows:
'(h) Submission of written statements.
'In the discretion of the Commission, witnesses may submit brief and pertinent sworn statements in writing for inclusion in the record. The Commission is the sole judge of the pertinency of testimony and evidence adduced at its hearings.' 71 Stat. 634, 42 U.S.C. § 1975a(h), 42 U.S.C.A. § 1975a(h).
9
Under the Civil Rights Act, the Commission not only has the power to issue subpoenas under Section 105(f), but, as is customary when Congress confers the subpoena power on an investigative agency, the Commission is also authorized to enforce its subpoenas by enlisting the aid of the federal courts. 71 Stat. 636, 42 U.S.C. § 1975d(g), 42 U.S.C.A. § 1975d(g).
10
Judge Wisdom, who dissented, was of the opinion that the procedures adopted by the Commission were authorized by Congress, and that those precedures were also constitutional. 177 F.Supp., at page 828.
11
The court's injunction reads as follows:
'For reasons assigned in the Court's written opinion of October 6, 1959,
'It is ordered, adjudged and decreed that defendants and their agents, servants, employees and attorneys are enjoined and restrained from conducting the proposed hearing in Shreveport, Louisiana, wherein plaintiff registrars, accused of depriving others of the right to vote, would be denied the right of apprisal, confrontation and cross examination.
'This injunction does not prohibit all hearings pursuant to Public Law 85—315, 85th Congress, 42 U.S.C.A. § 1975 et seq., but only those hearings proposed to be held in the Western District of Louisiana wherein the accused are denied the right of apprisal, confrontation and cross examination.
'Thus done and signed in Chambers on this the 9 day of November, 1959.'
The breadth of this injunction is indicated by the fact that the Commission is not only prohibited from compelling respondents' appearance at the hearing, but it is also enjoined from conducting any hearing in the Western District of Louisiana under existing rules of procedure, whether or note the respondents are called as witnesses.
12
The complete text of Section 102 reads as follows:
§ 1975a. Rules of procedure.
'(a) Opening statement.
'The Chairman or one designated by him to act as Chairman at a hearing of the Commission shall announce in an opening statement the subject of the hearing.
'(b) Copy of rules.
'A copy of the Commission's rules shall be made available to the witness before the Commission.
'(c) Attendance of counsel.
'Witnesses at the hearings may be accompanied by their own counsel for the purpose of advising them concerning their constitutional rights.
'(d) Censure and exclusion of counsel.
'The Chairman or Acting Chairman may punish breaches of order and decorum and unprofessional ethics on the part of counsel, by censure and exclusion from the hearings.
'(e) Defamatory, degrading or incriminating evidence.
'If the Commission determines that evidence or testimony at any hearing may tend to defame, degrade, or incriminate any person, it shall (1) receive such evidence or testimony in executive session; (2) afford such person an opportunity voluntarily to appear as a witness; and (3) receive and dispose of requests from such person to subpena additional witnesses.
'(f) Requests for additional witnesses.
'Except as provided in this section and section 1975d(f) of this title, the Chairman shall receive and the Commission shall dispose
of requests to subpena additional witnesses.
'(g) Release of evidence taken in executive session.
'No evidence or testimony taken in executive session may be released or used in public sessions without the consent of the Commission. Whoever releases or uses in public without the consent of the Commission evidence or testimony taken in executive session shall be fined not more than $1,000, or imprisoned for not more than one year.
'(h) Submission of written statements.
'In the discretion of the Commission, witnesses may submit brief and pertinent sworn statements in writing for inclusion in the record. The Commission is the sole judge of the pertinency of testimony and evidence adduced at its hearings.
'(i) Transcripts.
'Upon payment of the cost therefore, a witness may obtain a transcript copy of his testimony given at a public session or, if given at an executive session, when authorized by the Commission.
'(j) Witness fees.
'A witness attending any session of the Commission shall receive $4 for each day's attendance and for the time necessarily occupied in going to and returning from the same, and 8 cents per mile for going from and returning to his place of residence. Witnesses who attend at points so far removed from this respective residences as to prohibit return thereto from day to day shall be entitled to an additional allowance of $12 per day for expenses of subsistence, including the time necessarily occupied in going to and returning from the place of attendance. Mileage payments shall be tendered to the witness upon service of a subpena issued on behalf of the Commission or any subcommittee thereof.
'(k) Restriction on issuance of subpena.
'The Commission shall not issue any subpena for the attendance and testimony of witnesses or for the production of written or other
matter which would require the presence of the party subpenaed at a hearing to be held outside of the State, wherein the witness is found or resides or transacts business.' 71 Stat. 634, 42 U.S.C. § 1975a, 42 U.S.C.A. § 1975a.
In addition to the procedural safeguards provided by Section 102 of the Act, the Commission's Rules of Procedure grant additional protection. Thus, Rule 3(f) of the Commission's Rules of Procedure provides:
'(f) An accurate transcript shall be made of the testimony of all witnesses in all hearings, either public or executive sessions, of the Commission or of any subcommittee thereof. Each witness shall have the right to inspect the record of his own testimony. A transcript copy of his testimony may be purchased by a witness pursuant to Rule 2(i) above. Transcript copies of public sessions may be obtained by the public upon payment of the cost thereof.'
And Rule 3(j) provides:
'(j) If the Commission pursuant to Rule 2(e), or any subcommittee thereof, determines that evidence or testimony at any hearing may tend to defame, degrade, or incriminate any person, it shall advise such person that such evidence has been given and it shall afford such person an opportunity to read the pertinent testimony and to appear as a voluntary witness or to file a sworn statement in his behalf.'
13
The amendments, introduced by Representative Dies, read, in pertinent part, as follows:
"(q) A person shall be considered to be adversely affected by evidence or testimony of a witness if the Commission determines that: (i) the evidence or testimony would constitute libel or slander if not presented before the Commission or (ii) the evidence or testimony alleges crime or misconduct or tends to disgrace or otherwise to expose the person to public contempt, hatred, or scorn.
"(r) Insofar as practicable, any person whose activities are the subject of investigation by the Commission, or about whom adverse information is proposed to be presented at a public hearing of the Commission, shall be fully advised by the Commission as to the matters into which the Commission proposes to inquire and the adverse material which is proposed to be presented. Insofar as practicable, all material reflecting adversely on the character or reputation of any individual which is proposed to be presented at a public hearing of the Commission shall be first reviewed in executive session to determine its reliability and probative value and shall not be presented at a public hearing except pursuant to majority vote of the Commission.
"(s) If a person is adversely affected by evidence or testimony given in a public hearing, that person shall have the right: (i) to appear and testify or file a sworn statement in his own behalf, (ii) to have the adverse witness recalled upon application made within thirty days after introduction of such evidence or determination of the adverse witness' testimony, (iii) to be represented by counsel as heretofore provided, (iv) to cross-examine (in person or by counsel) such adverse witness, and (v) subject to the discretion of the Commission, to obtain the issuance by the Commission of subpenas for witnesses, documents, and other evidence in his defense. Such opportunity for rebuttal shall be afforded promptly and, so
far as practicable, such hearing shall be conducted at the same place and under the same circumstances as the hearing at which adverse testimony was presented.
"Cross-examination shall be limited to one hour for each witness, unless the Commission by majority vote extends the time for each witness or group of witnesses.
"(t) If a person is adversely affected by evidence or testimony given in executive session or by material in the Commission files or records, and if public release of such evidence, testimony, or material is contemplated such person shall have, prior to the public release of such evidence or testimony or material or any disclosure of or comment upon it by members of the Commission or Commission staff or taking of similar evidence or testimony in a public hearing, the rights heretofore conferred and the right to inspect at least as much of the evidence or testimony of the adverse witness or material as will be made public or the subject of a public hearing.
"(u) Any witness (except a member of the press who testifies in his professional capacity) who gives testimony before the Commission in an open hearing which reflects adversely on the character or reputation of another person may be required by the Commission to disclose his sources of information, unless to do so would endanger the national security." 102 Cong.Rec. 13542—13543.
14
The complete text of the House 'fair play' rules may be found in H.Res. 151, 84th Cong., 1st Sess.
15
That Congress focused upon the issues here involved and recognized the distinctions between H.R. 6127 and S. 83 is attested to by the following extracts from the floor debate and committee hearings:
In testifying before both the House and Senate Subcommittees considering the various proposed civil rights bills, Attorney General Brownell supported the adoption of the House 'fair play' rules instead of the more restrictive procedures outlined in S. 83. Thus, at the Senate hearings, the Attorney General made the following statement:
'Now there is one other addition to S. 83 that I would like to make special reference to and that is the provision for rules of procedure contained in section 102 on pages 2 to 10 of S. 83.
'These rules of procedure are considerably more restrictive than those imposed on regular committees of the House and Senate. There is much in them which clearly would be desirable. We have not at yet had any experience with the use of rules such as those proposed here and we cannot predict the extent to which they might be used to obstruct the work of the Commission.
'Yet I feel that the task to be given to this Commission is of such great public importance that it would be a mistake to make it the vehicle for experimenting with new rules which may have to be tested out under the courts and this is only a 2-year Commission and you might have to spend those 2 years studying the rules instead of getting at the facts.' Hearings before Subcommittee on Constitutional Rights of the Senate Judiciary Committee, 85th Cong., 1st Sess. 14—15. See also Hearings before Subcommittee No. 5 of the House Judiciary Committee, 85th Cong., 1st Sess. 593.
The lack of any right to cross-examine witnesses was commented upon by members of both the House and the Senate:
Statement of Senator Talmadge during the Senate floor debate, 103 Cong.Rec. 11504:
'No provision is made for notification of persons against whom charges are to be made.
'No provision is made for persons adversely affected by testimony taken by the Commission to be present when they are accused or later to confront and cross-examine their accusers.'
Statement of Senator Stennis during Senate floor debate, 103 Cong.Rec. 13835:
'Defamatory testimony tending to defame, degrade, or incriminate any person cannot be heard by the person slandered, since the testimony must be taken in executive session. There is no requirement in the proposed statute that the person injured by defamatory testimony shall have an opportunity to examine the nature of the adverse testimony. He has no right of confrontation nor cross-examination, and his request to subpoena witnesses on his behalf falls within the arbitrary discretion of the Commission. There is no right to subpoena witnesses.'
Statement of Representative Kilday during House floor debate, 103 Cong.Rec. 8673:
'The bill provides that witnesses may be accompanied by counsel, for what purpose? 'For the purpose of advising them concerning their constitutional rights.' That is all. Even though the Commission or its own counsel develops only a portion of a transaction, and that adverse to the witness, his lawyer cannot ask a single question to develop the remainder of the transaction or the portion favorable to him.'
Statement of Representative Frazier during Hearings before the House Rules Committee, 85th Cong., 1st Sess. 176:
'The authors of this proposal contemplate that it will yield thousands of complaints and even more thousands of subpenas will be issued. The various allegations will, in the first instance, be incontrovertible and wholly ex parte and the principal concerned, against whom the charges are made, when summoned as a witness is given no opportunity to cross-examine. True, the person summoned as a witness may have counsel (sec. 102), but only for the purpose of advising him of his constitutional rights.'
That the bill contained the House 'fair play' rules is demonstrated by the following statement of Representative Celler, the author of the bill:
'The rules of procedure of the Commission are the same as those which govern the committees of the House. For example, the chairman is required to make an opening statement as to the subject of the hearing. Witnesses are furnished with a copy of the Commission's rules and may be accompanied by counsel. The chairman is authorized to punish breaches of order by censure and exclusion. Protection is furnished to witnesses when it appears that a person may be the subject of derogatory information by requiring such evidence to be received in executive session, and affording the person affected the right to appear and testify, and further to submit a request for subpena of additional witnesses.' 103 Cong.Rec. 8491. (Emphasis supplied.)
16
Although the respondents contend that the procedures adopted by the Commission also violate their rights under the Sixth Amendment, their claim does not merit extensive discussion. That Amendment is specifically limited to 'criminal prosecutions,' and the proceedings of the Commission clearly do not fall within that category. See United States v. Zucker, 161 U.S. 475, 481, 16 S.Ct. 641, 643, 40 L.Ed. 777.
17
The full text of Section 104 of the Act reads as follows:
§ 1975c. Duties; reports; termination.
'(a) The Commission shall—
'(1) investigate allegations in writing under oath or affirmation that certain citizens of the United States are being deprived of their right to vote and have that vote counted by reason of their color, race, religion, or national origin; which writing, under oath or affirmation, shall set forth the facts upon which such belief or beliefs are based;
'(2) study and collect information concerning legal developments constituting a denial of equal protection of the laws under the Constitution; and
'(3) appraise the laws and policies of the Federal Government with respect to equal protection of the laws under the Constitution.
'(b) The Commission shall submit interim reports to the President and to the Congress at such times as either the Commission or the President shall deem desirable, and shall submit to the President and to the Congress a final and comprehensive report of its activities, findings, and recommendations not later than two years from September 9, 1957.
'(c) Sixty days after the submission of its final report and recommendations the Commission shall cease to exist.' 71 Stat. 635, 42 U.S.C. § 1975c, 42 U.S.C.A. § 1975c.
18
It should be noted that the respondents in these cases did have notice of the general nature of the inquiry. The only information withheld from them was the identity of specific complainants and the exact charges made by those complainants. Because most of the charges related to the denial of individual voting rights, it is apparent that the Commission could not have disclosed the exact charges without also revealing the names of the complainant.
19
Cf. Sinclair v. United States, 279 U.S. 263, 295, 49 S.Ct. 268, 272, 73 L.Ed. 692, holding that Congress' legitimate right to investigate is not affected by the fact that information disclosed at the investigation may also be used in a subsequent criminal prosecution. Cf. also McGrain v. Daugherty, 273 U.S. 135, 179—180, 47 S.Ct. 319, 330—331, 71 L.Ed. 580, holding that a regular congressional investigation is not rendered invalid merely because 'it might possibly disclose crime or wrongdoing' on the part of witnesses summoned to appear at the investigation. Id., 273 U.S. at page 180, 47 S.Ct. at page 330.
20
The injunction issue by the court below would certainly lead to this result since it prohibits the Commission from conducting any hearing under existing procedure, even though those being investigated are not summoned to testify.
21
A compilation of the rules of procedure governing the investigative proceedings of a representative group of administrative and executive agencies, presidential commissions, and congressional committees is set out in the Appendix to this opinion. 363 U.S. at page 454, 80 S.Ct. at page 1521.
22
The first full-fledged congressional investigating committee was established in 1792 to 'inquire into the causes of the failure of the late expedition under Major General St. Clair.' 3 Annals of Cong. 493 (1792). The development and use of legislative investigation by the colonial governments is discussed in Eberling, Congressional Investigations, 13—30. The English origin of legislative investigation in this country is discussed in Dimock, Congressional Investigating Committees, 46—56.
23
See, e.g., Kilbourn v. Thompson, 103 U.S. 168, 26 L.Ed. 377; McGrain v. Daugherty, 273 U.S. 135, 47 S.Ct. 319, 71 L.Ed. 580; Sinclair v. United States, 279 U.S. 263, 49 S.Ct. 268, 73 L.Ed. 692; Christoffel v. United States, 338 U.S. 84, 69 S.Ct. 1447, 93 L.Ed. 1826; United States v. Bryan, 339 U.S. 323, 70 S.Ct. 724, 94 L.Ed. 884; United States v. Fleischman, 339 U.S. 349, 70 S.Ct. 739, 94 L.Ed. 906; Watkins v. United States, 354 U.S. 178, 77 S.Ct. 1173, 1 L.Ed.2d 1273; Barenblatt v. United States, 360 U.S. 109, 79 S.Ct. 1081, 3 L.Ed.2d 1115.
24
See Appendix, post, 363 U.S. at pages 478—485, 80 S.Ct. at pages 1536—1541. See also Dimock, Congressional Investigating Committees, 153; Eberling, Congressional Investigations, 283, 390; McGeary, The Developments of Congressional Investigative Power, 80; Liacos, Rights of Witnesses Before Congressional Committees, 33 B.U.L.Rev. 337, 359—361; American Bar Association, Special Committee on Individual Rights as Affected by National Security, Appendix to Report on Congressional Investigations, 67—68.
The English practice is described in Clokie and Robinson, Royal Commissions of Inquiry; Finer, Congressional Investigations: The British System, 18 U. of Chi.L.Rev. 521; Keeton, Parliamentary Tribunals of Inquiry, in Vol. 12, Current Legal Problems 1959, 12.
25
See Appendix, post, 363 U.S. at pages 454—471, 80 S.Ct. at pages 1521—1532. See also Gellhorn, Federal Administrative Proceedings, 108; Report of the Attorney General's Committee on Administrative Procedure and the various Monagraphs written by that Committee.
26
The Commission's practice with regard to investigations was described by the Attorney General's Committee on Administrative Procedure, Monograph, Securities Exchange Commission, 34—41. The following extract is pertinent here:
'Where formal investigations are utilized as preliminaries to decisive proceedings, the person being investigated is normally not sent a notice, which, in any event, is not public. The order for investigation, which includes the notice, is, however, exhibited to any person examined in the course of such investigation who so requests; since ordinarily the investigation will include the examination of the person suspected of violation, he will, thus, have actual notice of the investigation. Since a person may, on the other hand, be wholly unaware of the fact that he is being investigated until his friends who are interviewed so inform him, and since this may sometimes give rise to antagonism and a feeling that the Commission is besmirching him behind his back, no reason is apparent why, simply as a matter of good will, the Commission should not in ordinary cases send a copy of its order for investigation to the person under investigation.
'The Commission's Rules of Practice expressly provide that all such rules (governing notice, amendments, objections to evidence, briefs, and the like) are inapplicable to formal investigatory hearings in the absence of express provision to the contrary in the order and with the exception of rule II, which relates to appearance and practice by representatives before the Commission. The testimony given in such investigations is recorded * * *. In the usual case, witnesses are granted the right to be accompanied by counsel, but the latter's role is limited simply to advising the witnesses in respect of their right against self-incrimination without claiming the benefits of the immunity clause of the pertinent statute (a right of which the presiding officer is, in any event, instructed to apprise the witnesses) and to making objections to question which assertedly exceed the scope of the order of investigation.' Id., 37—38. (Emphasis supplied.) See also Loss, Securities Regulation (1951), 1152.
27
Loss, Securities Regulation (1951), 1153. See also the statutes cited in the Appendix, 363 U.S. at page 463, 80 S.Ct. at page 1526.
28
Marcy, Presidential Commissions, 97—101.
29
See Appendix, 363 U.S. at pages 472—479, 80 S.Ct. at pages 1532—1537.
30
However, the courts have on more than one occasion likened investigative agencies of the executive branch of Government to a grand jury. See, e.g., United States v. Morton Salt Co., 338 U.S. 632, 642, 70 S.Ct. 357, 363, 94 L.Ed. 401; Oklahoma Press Pub. Co. v. Walling, 327 U.S. 186, 216, 66 S.Ct. 494, 509, 90 L.Ed. 614; Consolidated Mines of Calif. v. Securities & Exchange Comm., 9 Cir., 97 F.2d 704, 708; Woolley v. United States, 9 Cir., 97 F.2d 258, 262.
31
The Commission cites In re Groban, 352 U.S. 330, 77 S.Ct. 510, 1 L.Ed.2d 376, and Anonymous Nos. 6 and 7 v. Baker, 360 U.S. 287, 79 S.Ct. 1157, 3 L.Ed.2d 1234, in support of its position. Each of us who participated in those cases adheres to the view to which he subscribed therein. However, because there are significant differences between the Groban and Anonymous cases and the instant litigation, and because the result we reach today is supported by the other considerations analyzed herein, the Court does not find it necessary to discuss either of those cases.
1
This Appendix describes the Rules of Procedure governing the authorized investigative proceedings of a representative group of administrative agencies, executive departments, presidential commissions, and congressional committees. The Appendix does not purport to be a complete enumeration of the hundreds of agencies which have conducted investigations during the course of this country's history. Rather, it is designed to demonstrate that the procedures adopted by the Civil Rights Commission are similar to those which have traditionally been used by investigating agencies in both the executive and legislative branches of our Government.
2
We have found many other administrative agencies and presidential commissions enpowered to conduct investigations and to subpoena witnesses. Those agencies are not listed in the body of this Appendix because we were unable to find an adequate description of the rules of procedure governing their investigative proceedings. However, it is significant that the statutes creating these agencies made no reference to apprisal or cross-examination in investigative proceedings. Among the agencies in this catagory are: (1) Bureau of Corporations in the Department of Commerce and Labor, 32 Stat. 827; (2) Commission on Industrial Relations, 37 Stat. 415; (3) the Railroad Labor Board, 41 Stat. 469; (4) the United States Coal Commission, 42 Stat. 1023; (5) the Investigation Commission established by the Railroad Retirement Act of 1935, 49 Stat. 972, 45 U.S.C.A. §§ 215-218 note; (6) National Bituminous Coal Commission, 49 Stat. 992; (7) Wage and Hour Division of the Department of Labor, 52 Stat. 1061, 29 U.S.C.A. § 204; (8) Board of Investigation to Investigate Various Modes of Transportation, 54 Stat. 952, 49 U.S.C.A. note preceding section 1; (9) Commission on Organization of the Executive Branch of the Government, 67 Stat. 143, 5 U.S.C.A. §§ 138a-138j note; (10) Commission on Intergovernmental Relations, 67 Stat. 145, 5 U.S.C.A. §§ 138a-138j note.
3
If the relevant statute makes no reference to notice, this fact will be mentioned. The negative inference which may be drawn from the absence of any statutory requirement that notice be given is supported by the fact that, in a few instances, Congress has made specific provision for the giving of notice in investigative proceedings. See, e.g., the statutes cited on page 473 of 363 U.S., page 1532 of 80 S.Ct., supra, requiring the United States Tariff Commission to give reasonable notice of any investigative hearing.
4
If the relevant statute makes no reference to cross-examination, that fact will be mentioned because of the inference which may be drawn therefrom that Congress did not intend persons appearing at investigative hearings to cross-examine other witnesses. This inference
is strengthened by the fact that in a relatively few instances Congress has, for one reason or another, required that persons being investigated by a commission or agency be given the right to cross-examine other witnesses. See, e.g., 49 Stat. 1381, 46 U.S.C.A. § 239, which authorized the Secretary of Commerce to appoint special boards to investigate the causes of marine casualties.
5
The Office of Price Stabilization is now defunct, having been terminated by Exec.Order No. 10434, 18 Fed.Reg. 809, U.S.Code Cong. and Adm.News 1953, p. 994.
6
The Office of Price Administration is now defunct, its functions having been transferred to the Office of Temporary Controls by Exec.Order No. 9809, 11 Fed.Reg. 14281, 50 U.S.C.A. x, Appendix § 601 note, which in turn was terminated by Exec.Order No. 9841, 12 Fed.Reg. 2645, 50 U.S.C.A. Appendix, § 601 note.
7
In addition to the investigating committees listed in the body of the Appendix, we think mention should also be made of the contemporary standing committees of Congress. Most of these committees have rules very similar to those adopted by the Civil Rights Commission. The Rules of Procedure of the Subcommittee on Privileges and Elections of the Senate Committee on Rules and Administration are typical. Rule 17 of the Rules reads as follows:
"There shall be no direct or cross examination by counsel appearing for a witness. However, the counsel may submit in writing any question or questions he wishes propounded to his client or to any other witness. With the consent of the majority of the Members of the Subcommittee present and voting, such question or questions shall be put to the witness by the Chairman, by a Member of the Subcommittee or by the Counsel of the Subcommittee either in the orginal form or in modified language. The decision of the Subcommittee as to the admissibility of questions submitted by counsel for a witness, as well as to their form, shall be final."
See also S.Rep. No. 2, 84th Cong., 1st Sess. 20; Hearings before the Subcommittee on Rules of the Senate Committee on Rules and Administration, on S.Res. 65, 146, 223, 249, 253, 256, S.Con.Res. 11 and 86, 83d Cong., 2d Sess., Part 3, 141-142, 344, 345, 374; Rules of Procedure of the Select Committee on Improper Activities in the Labor or Management Field, Rules 10 and 11. Reference has been made in the text, supra, 363 U.S. at pages 436-439, 80 § Ct. at pages 1512, 1513, to the House 'fair play' rules, which govern the hearings of most House Committees, and which make no provision for cross-examination.
1
Civil suits for damages are also authorized. See 42 U.S.C. § 1983, 42 U.S.C.A. § 1983; Lane v. Wilson, 307 U.S. 268, 59 S.Ct. 872, 83 L.Ed. 1281.
2
The section reads in relevant part as follows:
'Whoever, under color of any law, statute, ordinance, regulation, or custom, willfully subjects any inhabitant of any State * * * to the deprivation of any rights, privileges, or immunities secured or protected by the Constitution or laws of the United States * * * by reason of his color, or race * * * shall be fined not more than $1,000 or imprisoned not more than one year, or both.'
3
The Rules of the Commission by Subdivision (k) provide:
'Subject to the physical limitations of the hearing room and consideration of the physical comfort of Commission members, staff, and witnesses, equal and reasonable access for coverage of the hearings shall be provided to the various means of communications, including newspapers, magazines, radio, news reels, and television. However, no witness shall be televised, filmed, or photographed during the hearings if he objects on the ground of distraction, harassment, or physical handicap.'
4
Cf. Frankfurter, Hands Off the Investigations, New Republic, May 21, 1924, p. 329, at 331: 'It must be remembered that our rules of evidence are but tools for ascertaining the truth, and that these tools vary with the nature of the issues and the nature of the tribunal seeking facts. Specifically, the system of rules of evidence used in trials before juries 'are mainly aimed at guarding the jury from the over-weening effect of certain kinds of evidence.' That system, as pointed out by Wigmore, 'is not applicable by historical precedent, or by sound practical policy' to 'inquiries of fact determinable by administrative tribunals.' Still less is it applicable to inquiries by congressional committees. Of course the essential decencies must be observed, namely opportunity for cross-examination must be afforded to those who are investigated or to those representing issues under investigation.'
5
Rule 5(b), Rules of Criminal Procedure, 18 U.S.C.A., provides that the defendant shall be informed of the complaint against him and of his right to retain counsel. Rule 5(c) expressly states, 'The defendant may cross-examine witnesses against him and may introduce evidence in his own behalf.'
| 34
|
363 U.S. 536
80 S.Ct. 1267
4 L.Ed.2d 1385
FEDERAL TRADE COMMISSION, Petitioner,v.ANHEUSER-BUSCH, INC.
No. 389.
Argued March 2, 1960.
Decided June 20, 1960.
Mr. Philip Elman, Washington, D.C., for petitioner.
Mr. Edgar Barton, New York City, for respondent.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
The question presented is whether certain pricing activities of respondent, Anheuser-Busch, Inc., constituted price discrimination within the meaning of § 2(a) of the Clayton Act, 38 Stat. 730, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15 U.S.C. § 13(a), 15 U.S.C.A. § 13(a).
Section 2(a) provides in pertinent part:
2
'That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them * * *.' This controversy had its genesis in a complaint issued by the Federal Trade Commission in 1955, which charged respondent, a beer producer, with a violation of § 2(a). The complaint alleged that respondent had 'discriminated in price between different purchasers of its beer of like grade and quality by selling it to some of its customers at higher prices than to other(s)'; that, more specifically, respondent had lowered prices in the St. Louis, Missouri, market, without making similar price reductions in other markets; that this discrimination had already diverted substantial business from respondent's St. Louis competitors; that it was 'sufficient' to have the same impact in the future; that there was a 'reasonable probability' it would substantially lessen competition in respondent's line of commerce; and that it might also tend to create a monopoly or to injure, destroy, or prevent competition with respondent. Thus the complaint described a pricing pattern which had adverse effects only upon sellers' competition, commonly termed primary-line competition, and not upon buyers' competition, commonly termed secondary-line competition.
3
Both the hearing examiner and, on appeal, the Commission held that the evidence introduced at the hearing established a violation of § 2(a). The Commission found the facts to be as follows:
4
Respondent, a leading national brewer,1 sells a so-called premium beer, which is priced higher than the beers of regional and local breweries in the great majority of markets, although both the price of respondent's beer and the premium differential vary from market to market and from time to time. During the period relevant to this case, respondent had three principal competitors in the St. Louis area, all regional breweries: Falstaff Brewing Corporation, Griesedieck Western Brewing Company, and Griesedieck Brothers Brewery Company.2 In accord with the generally prevailing price structure, these breweries normally sold their products at a price substantially lower than respondent's.
5
In 1953, most of the national breweries, including respondent, granted their employees a wage increase, and on October 1,1953, they put into effect a general price increase.3 Although many regional and local breweries throughout the country followed suit by raising their prices, Falstaff, Griesedieck Western, and Griesedieck Brothers maintained their pre-October price of $2.35 per standard case. Although respondent's sales in the St. Louis area did not decline, its national sales fell, along with industry sales in general.
6
On January 4, 1954, respondent lowered its price in the St. Louis market from $2.93 to $2.68 per case, thereby reducing the previous 58$ differential to 33$. A second price cut occurred on June 21, 1954, this time to $2.35, the same price charged by respondent's three competitors. On January 3, 1954, the day before the first price cut, respondent's price in the St. Louis market had been lower than its price in other markets,4 and during the period of the price reductions in the St. Louis area, respondent made no similar price reductions in any other market. In March, 1955, respondent increased its St. Louis price 45$ per case, and Falstaff, Griesedieck Western, and Griesedieck Brothers almost immediately raised their prices 15$, which re-established a substantial differential. This ended the period of alleged price discrimination.
The Commission concluded:
7
'As a result of maintaining higher prices to all purchasers outside of the St. Louis area and charging the lower prices, as reduced in 1954, to only those customers in the St. Louis area, respondent discriminated in price as between purchasers differently located.'
8
Since, as will appear, it is this aspect of the decision which concerns us, it is necessary only to sketch summarily the remaining elements in the Commission's decision. The Commission's finding of competitive injury was predicated to a substantial degree upon what it regarded as a demonstrated diversion of business to respondent from its St. Louis competitors during the period of price discrimination. For example, by comparing that period with a similar period during the previous year, the Commission determined that respondent's sales had risen 201.5%, Falstaff's sales and dropped slightly, Griesedieck Western's sales had fallen about 33%, and Griesedieck Brothers' sales had plummeted about 41%. In tabular form, the relative market positions of the St. Louis sellers were as follows:
Dec. 31 June 30 Mar. 1 July 31
1953 1954 1955 1955
Respondent. 12.5. 16.55 39.3 21.03
Griesedieck
Brothers.. 14.4. 12.58 4.8 7.36
Falstaff... 29.4. 32.05 29.1 36.62
Griesedieck
Western... 38.9. 33. 23.1 27.78
All others. 4.8. 5.82 3.94 7.21
9
The Commission rejected respondent's contention that its price reductions had been made in good faith to meet the equally low price of a competitor within the meaning of the proviso to § 2(b) of the Act, 49 Stat. 1526, 15 U.S.C. § 13(b), 15 U.S.C.A. § 13(b), and also found respondent's attack upon the examiner's cease-and-desist order to be meritless. The Commission thereupon adopted and issued that order, with only slight modification.5
10
On review, the Court of Appeals set aside the order. 265 F.2d 677. We granted certiorari 361 U.S. 880, 80 S.Ct. 151, 4 L.Ed.2d 117, because a conflict had developed among the Courts of Appeals on a question of importance in the administration of the statute. See Atlas Building Products Co. v. Diamond Block & Gravel Co., 10 Cir., 269 F.2d 950.
11
The limited nature of our inquiry can be fully appreciated only in the light of the correspondingly narrow decision of the Court of Appeals, which rested entirely upon the holding that the threshold statutory element of price discrimination had not been established. Thus the Court of Appeals did not consider whether the record supported a finding of the requisite competitive injury, whether respondent's good faith defense was valid, or whether the Commission's order was unduly broad. We have concluded that the Court of Appeals erred in its construction of § 2(a) and that the evidence fully warranted the Commission's finding of price discrimination. Respondent would have us affirm nonetheless on any of the alternative grounds it strongly urged below. While this is, to be sure, an appropriate course of action under proper circumstances, we believe that it would be unwise for us to grapple with these intricate problems, the solution to which requires a careful examination of a voluminous record, before they have been dealt with by the Court of Appeals. Therefore, the case will be remanded, and of course nothing in this opinion should be interpreted as intimating a view upon the remaining aspects of the controversy.
12
A discussion of the import of the § 2(a) phrase 'discriminate in price,' in the context of this case, must begin with a consideration of the purpose of the statute with respect to primary-line competition. The Court of Appeals expressed some doubt that § 2(a) was designed to protect this competition at all, but respondent has not undertaken to defend that position here. This is entirely understandable. While 'precision of expression is not an outstanding characteristic of the Robinson-Patman Act,' Automatic Canteen Co. of America v. Federal Trade Comm., 346 U.S. 61, 65, 73 S.Ct. 1017, 1020, 97 L.Ed. 1454, it is certain at least that § 2(a) is violated where there is a price discrimination which deals the requisite injury to primary-line competition, even though secondary-line and tertiary-line competition are unaffected. The statute could hardly be read any other way, for it forbids price discriminations 'where the effect * * * may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them.' (Emphasis added.)
13
The legislative history of § 2(a) is equally plain. The section, when originally enacted as part of the Clayton Act in 1914, was born of a desire by Congress to curb the use by financially powerful corporations of localized price-cutting tactics which had gravely impaired the competitive position of other sellers.6 It is, of course, quite true—and too well known to require extensive exposition—that the 1936 Robinson-Patman amendments to the Clayton Act were motivated principally by congressional concern over the impact upon secondary line competition of the burgeoning of mammoth purchasers, notably chain stores.7 However, the legislative history of these amendments leaves no doubt that Congress was intent upon strengthening the Clayton Act provisions, not weakening them, and that it was no part of Congress' purpose to curtail the pre-existing applicability of § 2(a) to price discriminations affecting primary-line competition.8
14
The federal courts, both before and after the amendment of § 2(a), have taken this view of the scope of the statute in cases involving impairment of primary-line competition. See Porto Rican American Tobacco Co. of Porto Rico v. American Tobacco Co., 2 Cir., 1929, 30 F.2d 234; E. B. Muller & Co. v. Federal Trade Comm., 6 Cir., 1944, 142 F.2d 511; Maryland Baking Co. v. Federal Trade Comm., 4 Cir., 1957, 243 F.2d 716; Atlas Building Products Co. v. Diamond Block & Gravel Co., supra (1959). In fact, the original focus of § 2(a) on sellers' competition was so evident that this Court was compelled to hold explicitly, contrary to lower court decisions,9 that the statute was not restricted to price discriminations impeding primary-line competition, but protected secondary-line competition as well. Van Camp & sons v. American Can Co., 1929, 278 U.S. 245, 49 S.Ct. 112, 73 L.Ed. 311. And more recently, in Moore v. Mead's Fine Bread Co., 1954, 348 U.S. 115, 75 S.Ct. 148, 99 L.Ed. 145, the Court sustained a treble damage judgment in favor of a competing seller which was based partly upon a violation of § 2(a).
15
Thus neither the language of § 2(a), its legislative history, nor its judicial application countenances a construction of the statute which draws strength from even a lingering doubt as to its purpose of protecting primary-line competition. But the rationale of the Court of Appeals appears to have been shaped by precisely this type of doubt. The view of the Court of Appeals was that, before, there can be a price discrimination within the meaning of § 2(a), '(t)here must be some relationship between the different purchasers which entitles them to comparable treatment.' 265 F.2d, at page 681. Such a relationship would exist, the court reasoned, if different prices were being charged to competing purchasers. But the court observed that in this case all competing purchasers paid respondent the same price, so far as the record disclosed. Consequently, the court concluded that, even assuming the price cuts 'were directed at (Anheuser-Busch's) local competitors, they were not discriminatory.'10 Ibid.
16
This qualification upon the applicability of § 2(a) to primary-line-competition cases is in no way adumbrated by the prevailing line of relevant decisions. In Mead's Fine Bread Co., supra, in Maryland Baking Co., supra, and in Porto Rican American Tobacco Co., supra, violations of § 2(a) were predicated upon injury to primary-line competition without reliance upon the presence or absence of competition among purchasers as a relevant factor. And in E. B. Muller & Co., supra, while there was evidence that the purchasers in question were competing, the court explicitly rejected the notion that this was a necessary element of a violation in a primary-line case. 142 F.2d, at page 518. But cf. Balian Ice Cream Co. v. Arden Farms Co., 9 Cir., 231 F.2d 356.
17
More important, however, is the incompatibility of the Circuit Court's rule with the purpose of § 2(a). The existence of competition among buyers who are charged different prices by a seller is obviously important in terms of adverse effect upon secondary-line competition, but it would be merely a fortuitous circumstance so far as injury to primary-line competition is concerned. Since, as we have indicated, an independent and important goal of § 2(a) is to extend protection to competitors of the discriminating seller, the limitation of that protection by the alien factor of competition among purchasers would constitute a debilitating graft upon the statute.
18
Although respondent's starting point is the same as that of the Court of Appeals—that a price discrimination is not synonymous with a price difference—its test of price discrimination is somewhat broader.11 Respondent concedes that a competitive relationship among purchasers is not a prerequisite of price discrimination, but maintains that at least there must be 'proof that the lower price is below cost or unreasonably low for the purpose or design to eliminate competition and thereby obtain a monopoly.' Since such a finding is lacking here, respondent argues that it cannot be said that there was price discrimination.
19
Respondent asserts that its view is supported by legislative history, court decisions, and reason. Respondent relies heavily, as did the Court of Appeals, upon a statement made during Congress' consideration of the Robinson-Patman legislation by Representative Utterback, a manager of the conference bill which became § 2(a). In this rather widely quoted exegesis of the section, Representative Utterback declared that 'a discrimination is more than a mere difference,' and exists only when there is 'some relationship * * * between the parties to the discrimination which entitles them to equal treatment.' Such a relationship would prevail among competing purchasers, according to the Congressman, and also 'where * * * the price to one is so low as to involve a sacrifice of some part of the seller's necessary costs and profit,' so that 'it leaves that deficit inevitably to be made up in higher prices to his other customers.' 80 Cong.Rec. 9416.12 Respondent also cites expressions in the legislative history of the Clayton Act which reflect Congress' concern over classic examples of predatory business practices. See H.R.Rep. No. 627, 63d Cong., 2d Sess. 8; S.Rep. No. 698, 63d Cong., 2d Sess. 2—4. Moreover, respondent maintains that the principle it advances has found expression in the decisions of the federal courts in primary-line-competition cases, which consistently emphasize the unreasonably low prices and the predatory intent of the defendants.13 Respondent also urges that its view is grounded upon the statutory scheme of § 2(a), which penalizes sellers only if an anticompetitive effect stems from a discriminatory pricing pattern, not if it results merely from a low price. Thus, the argument goes, unless there is proof that high prices in one area have subsidized low prices in another, the price differential does not fall within the compass of the section. In such a case, it is contended, § 3 of the Robinson-Patman Act, 49 Stat. 1528, 15 U.S.C. § 13a, 15 U.S.C.A. § 13a, may be applicable, but not § 2(a).14 Finally, respondent argues that, unless its position is accepted, the law will impose rigid price uniformity upon the business world, contrary to sound economics and the policy of the antitrust laws The trouble with respondent's arguments is not that they are necessarily irrelevant in a § 2(a) proceeding, but that they are misdirected when the issue under consideration is solely whether there has been a price discrimination. We are convinced that, whatever may be said with respect to the rest of §§ 2(a) and 2(b) and we say nothing here—there are no overtones of business buccaneering in the § 2(a) phrase 'discriminate in price.' Rather, a price discrimination within the meaning of that provision is merely a price difference.
20
When this Court has spoken of price discrimination in § 2(a) cases, it has generally assumed that the term was synonymous with price differentiation. In Federal Trade Comm. v. Cement Institute, 333 U.S. 683, 721, 68 S.Ct. 793, 813, 92 L.Ed. 1010, the Court referred to 'discrimination in price' as 'selling the same kind of goods cheaper to one purchaser than to another.' And in Federal Trade Comm. v. Morton Salt Co., 334 U.S. 37, 45, 68 S.Ct. 822, 827, 92 L.Ed. 1196, the Court said, 'Congress meant by using the words 'discrimination in price' in § 2 that in a case involving competitive injury between a seller's customers the Commission need only prove that a seller had charged one purchaser a higher price for like goods than he had charged one or more of the purchaser's competitors.'15 The commentators have generally shared this view.16
21
These assumptions, we now conclude, were firmly rooted in the structure of the statute, for it is only by equating price discrimination with price differentiation that § 2(a) can be administered as Congress intended. As we read that provision, it proscribes price differences, subject to certain defined defenses,17 where the effect of the differences 'may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit' of the price differential, 'or with customers of either of them.' See Federal Trade Comm. v. Morton Salt Co., 334 U.S. 37, 45—47, 68 S.Ct. 822, 827—828, 92 L.Ed. 1196. In other words, the statute itself spells out the conditions which make a price difference illegal or legal, and we would derange this integrated statutory scheme were we to read other conditions into the law by means of the nondirective phrase, 'discriminate in price.' Not only would such action be contrary to what we conceive to the the meaning of the statute, but, perhaps because of this, it would be thoroughly undesirable. As one commentator has succinctly put it, 'Inevitably every legal controversy over any price difference would shift from the detailed governing provisions—'injury,' cost justification, 'meeting competition,' etc.—over into the 'discrimination' concept for ad hoc resolution divorced from specifically pertinent statutory text.' Rowe, Price Differentials and Product Differentiation: The Issues Under the Robinson-Patman Act, 66 Yale L.J. 1, 38.18
22
In the face of these considerations, we do not find respondent's arguments persuasive. The fact that activity which falls within the civil proscription of § 2(a) may also be criminal under § 3 is entirely irrelevant. The partial overlap between these sections, which was to a significant extent the by-product of the tortuous path of the Robinson-Patman bills through Congress,19 has been widely recognized. '(T)his section (§ 3) does not restrict the operation of the prohibitions, with civil sanctions, of the Robinson-Patman amendments to § 2(a) of the Clayton Act.' Corn Products Refining Co. v. Federal Trade Comm., 324 U.S. 726, 734, 65 S.Ct. 961, 965, 89 L.Ed. 1320.20
23
The other materials adduced by respondent do no more than indicate that the factors in question—predatory intent and unreasonably low local price cuts—may possibly be relevant to other matters which may be put in issue in a § 2(a) proceeding. For example, it might be argued that the existence of predatory intent bears upon the likelihood of injury to competition,21 and that a price reduction below cost tends to establish such an intent.22 Practically all of the legislative materials and court decisions relied upon by respondent are explicable on this basis, since hardly any of them are concerned specifically with the meaning of price discrimination.23 Moreover, many of the legislative expressions cited by respondent may merely be descriptive of the prototype of the evil with which Congress dealt in § 2(a) rather than delineative of the outer reach of that section. A possible exception is the statement of Representative Utterback. But the primary function of statutory construction is to effectuate the intent of Congress, and that function cannot properly be discharged by reliance upon a statement of a single Congressman, in the face of the weighty countervailing considerations which are present in this case.24
24
Nothing that we have said, of course, should be construed to be the expression of any view concerning the relevance of the factors stressed by respondent to statutory standards other than price discrimination. We wish merely to point out, on the one hand, why respondent's arguments in our view are not pertinent to the issue at bar, and, on the other, that we are not foreclosing respondent from urging in the Court of Appeals that such arguments are material to issues not now before us.
25
What we have said makes it quite evident, we believe, that our decision does not raise the specter of a flat prohibition of price differentials, inasmuch as price differences constitute but one element of a § 2(a) violation. In fact, as we have indicated, respondent has vigorously contested this very case on the entirely separate grounds of insufficient injury to competition and good faith lowering of price to meet competition. Nor is it relevant that the Commission did not proceed upon the basis of the respondent's price differentials which existed prior to the period in question in this case. This choice is committed to the discretion of the Commission; and it may well be that the Commission did not believe the remaining statutory elements could be established with respect to other differentials. Our interest is solely with this case, and at this stage of the litigation that interest is confined exclusively to identifying and keeping distinct the various statutory standards which are part of the § 2(a) complex.
26
The judgment of the Court of Appeals is reversed and the case is remanded to that court for further proceedings not inconsistent with this opinion.
27
Reversed.
1
Anheuser-Busch ranked second nationally in gross sales in 1952 and 1955, and first in 1953 and 1954.
2
It appears that Griesedieck Western sold out to Carling Brewing Company in October, 1954.
3
Respondent maintains—and petitioner agrees—that the evidence establishes that it did not raise its price in Missouri or Wisconsin. In view of our disposition of the case, this is immaterial to the issue presented on this review.
Possibly we should note that most of the facts in this particular paragraph are taken from the initial decision. Although the Commission adopted 'the findings, conclusions, and order, as modified, contained in the initial decision,' there is some disagreement as to how encompassing this incorporation order was. See note 10, infra. Since that dispute concerns matters not relevant to our decision, and since the facts set forth above are merely background and appear to be unquestioned, we find it unnecessary to resolve the disagreement.
4
The following table discloses the degree of this price spread:
St. Louis, Mo.................. $2.93
Chicago, Ill.................... 3.44
Cincinnati, Ohio................. 3.75
Houston, Tex.................... 3.70
Bronx, N. Y..................... 3.68
Kearney, Nebr................... 3.68
St. Joseph, Mo.................. 3.17
Buffalo, N. Y................... 3.60
Baltimore, Md................... 3.62
Washington, D. C................ 3.65
Detroit, Mich................... 3.55
Boston, Mass.................... 3.69
Kansas City, Mo................. 3.15
St. Paul, Minn.................. 3.53
Sioux Falls, S. Dak............. 3.50
Denver, Colo. ------
San Francisco, Calif............ 3.79
Los Angeles, Calif.............. 3.80
5
'It Is Ordered that the respondent, Anheuser-Busch, Inc., a corporation, and its officers, representatives, agents and employees, directly or through any corporate or other device, in the sale of beer of like grade and quality, do forthwith cease and desist from discriminating, directly or indirectly, in price, between different purchasers engaged in the same line of commerce, where either, or any, of the purchases involved in such discrimination are in commerce, as 'commerce' is defined in the Clayton Act, by a price reduction in any market where respondent is in competition with any other seller, unless it proportionally reduces its prices everywhere for the same quantity of beer.'
6
'Section 2 of the bill * * * is expressly designed with the view of correcting and forbidding a common and widespread unfair trade practice whereby certain great corporations and also certain smaller concerns which seek to secure a monopoly in trade and commerce by aping the methods of the great corporations, have heretofore endeavored to destroy competition and render unprofitable the business of competitors by selling their goods, wares, and merchandise at a less price in the particular communities where their rivals are engaged in business than at other places throughout the country. * * * In the past it has been a most common practice of great and powerful combinations engaged in commerce—notably the Standard Oil Co., and the American Tobacco Co., and others of less notoriety, but of great influence—to lower prices of their commodities, oftentimes below the cost of production in certain communities and sections where they had competition, with the intent to destroy and make unprofitable the business of their competitors, and with the ultimate purpose in view of thereby acquiring a monopoly in the particular locality or section in which the discriminating price is made. * * *' H.R.Rep. No. 627, 63d Cong., 2d Sess. 8. See also S.Rep. No. 698, 63d Cong., 2d Sess. 2—4.
7
See H.R.Rep. No. 2287, 74th Cong., 2d Sess.; S.Rep. No. 1502, 74th Cong., 2d Sess.; F.T.C., Final Report on the Chain-Store Investigation, S.Doc. No. 4, 74th Cong., 1st Sess.; Federal Trade Comm. v. Morton Salt Co., 334 U.S. 37, 43, 68 S.Ct. 822, 826, 92 L.Ed. 1196; Report of the Attorney General's National Committee to Study the Antitrust Laws, 155—156; Austin, Price Discrimination and Related Problems under the Robinson-Patman Act (2d rev. ed., 1959), 8—11; Palamountain, The Politics of Distribution, 188—234; Rowe, The Evolution of the Robinson-Patman Act: A Twenty-Year Perspective, 57 Col.L.Rev. 1059.
8
See sources cited in note 7, supra.
9
See Mennen Co. v. Federal Trade Comm., 2 Cir., 288 F. 774, 30 A.L.R. 1120; National Biscuit Co. v. Federal Trade Comm., 2 Cir., 299 F. 733.
10
There is a dispute as to whether the Commission adopted a finding by the examiner which related to the purpose of the price reductions. Since we conclude that the issue of predatory intent is irrelevant to the question before us, it is unnecessary for us to resolve this dispute.
11
Respondent maintains that the opinion of the Court of Appeals may and should be read to encompass respondent's views. It is true that there are certain passages in the opinion which lend some support to respondent's interpretation. In view of our disposition of the case, it is unnecessary for us either to accept or reject that construction.
12
The statement in full is as follows:
'In its meaning as simple English, a discrimination is more than a mere difference. Underlying the meaning of the word is the idea that some relationship exists between the parties to the discrimination which entitles them to equal treatment, whereby the difference granted to one casts some burden or disadvantage upon the other. If the two are competing in the resale of the goods concerned, that relationship exists. Where, also, the price to one is so low as to involve a sacrifice of some part of the seller's necessary costs and profit as applied to that business, it leaves that deficit inevitably to be made up in higher prices to his other customers; and there, too, a relationship may exist upon which to base the charge of discrimination. But where no such relationship exists, where the goods are sold in different markets and the conditions affecting those markets set different price levels for them, the sale to different customers at those different prices would not constitute a discrimination within the meaning of this bill.'
13
See, e.g., Porto Rican American Tobacco Co. of Porto Rico v. American Tobacco Co., supra; Atlas Building Products Co. v. Diamond Block & Gravel Co., supra; Maryland Baking Co. v. Federal Trade Comm., supra.
14
Section 3 provides:
'It shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or contract to sell, which discriminates to his knowledge against competitors of the purchaser, in that, any discount, rebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transaction to said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor.'
15
See also Federal Trade Comm. v. A. E. Staley Mfg. Co., 324 U.S. 746, 757, 65 S.Ct. 971, 976, 89 L.Ed. 1338; Samuel H. Moss, Inc., v. Federal Trade Comm., 2 Cir., 148 F.2d 378, 379; 2 Cir., 155 F.2d 1016. Compare Automatic Canteen Co. of America v. Federal Trade Comm. supra, 346 U.S. at pages 70, note 10, 71, 73 S.Ct. at pages 1022, 1023, 97 L.Ed. 1454.
16
See Att'y Gen. Nat'l Comm. Antitrust Rep. 156; Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act (2d rev. ed. 1959), 18—20; McAllister, Price Control by Law in the United States: A Survey, 4 Law and Contemp. Prob. 273, 291—293; Rowe, Price Differentials and Product Differentiation: The Issues Under the Robinson-Patman Act, 66 Yale L.J. 1, 36—38; Comment, 12 Stan.L.Rev. 460, 461. But see Zorn and Feldman, Business Under The New Price Laws, 75.
17
In addition to the statutory provisions regarding injury to competition, set out at page 537 of 363 U.S., page 1268 of 80 S.Ct., supra, there are other relevant portions of the statute, such as the seller's § 2(b) defense of 'showing that his lower price * * * was made in good faith to meet an equally low price of a competitor * * *.' And a proviso to § 2(a) states:
'That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered * * *.'
And still another proviso to § 2(a) states:
'That nothing herein contained shall prevent price changes from time to time where in response to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.'
18
See also Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act (2d rev. ed. 1959), 18—20; McAllister, Price Control by Law in the United States: A Survey, 4 Law and Contemp. Prob. 273, 291—293.
19
See Palamountain, The Politics of Distribution, 188—234; Rowe, The Evolution of the Robinson-Patman Act: A Twenty-Year Perspective, 57 Col.L.Rev. 1059.
20
'Subsection (h) of the Senate amendment * * * appears in the conference report as section 3 of the bill itself. It contains the operative and penal provisions of what was originally the Borah-Van Nuys bill (S. 4171). While they overlap in some respects, they are in no way inconsistent with the provisions of the Clayton Act amendment provided for in section 1. Section 3 authorizes nohing which that amendment prohibits, and takes nothing from it. On the contrary, where only civil remedies and liabilities attach to violations of the amendment provided in section 1, section 3 sets up special prohibitions as to the particular offenses therein described and attaches to then also the criminal penalties therein provided.' H.R.Rep. No. 2951, 74th Cong., 2d Sess. 8. See also Nashville Milk Co. v. Carnation Co., 355 U.S. 373, 378, 78 S.Ct. 352, 355, 2 L.Ed.2d 340; Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act (2d rev. ed. 1959), 3—4; 108 U. of Pa.L.Rev. 116, 121; 45 Va.L.Rev. 1397, 1400; sources cited in note 19, supra.
21
Of course we do not depart from our holding in Federal Trade Comm. v. Morton Salt, supra, 334 U.S. at pages 50—51, 68 S.Ct. at pages 830—831, as to adequacy of proof of tendency to injure competition in cases involving discrimination between purchasers. The instant case, as we have pointed out, involves differences in prices among competing sellers.
22
See Balian Ice Cream Co. v. Arden Farms Co., supra, 231 F.2d at page 369; Report of the Attorney General's National Committee to Study The Antitrust Laws, 165; Rowe, Price Discrimination, Competition, and Confusion: Another Look at Robinson-Patman, 60 Yale L.J. 929, 956; The 'New' Federal Trade Commission and the Enforcement of the Antitrust Laws, 65 Yale L.J. 34, 74—75; A Symposium on the Robinson-Patman Act, 49 N.W.U.L.Rev. 197, 215, 224. But cf. Nashville Milk Co. v. Carnation Co., 355 U.S. 373, 378, 78 S.Ct. 352, 355, 2 L.Ed.2d 340; Federal Trade Comm. v. Ruberoid Co., 343 U.S. 470, 484, 72 S.Ct. 800, 808, 96 L.Ed. 1081 (dissenting opinion).
23
Perhaps it is worth noting in this connection that the Senate and House committee reports appear to use the words 'discrimination' and 'differential' interchangeably. See H.R.Rep. No. 2287, 74th Cong., 2d Sess. 10; S.Rep. No. 1502, 74th Cong., 2d Sess. 5.
24
Representative Utterback's comment has been criticized as 'ambiguous and misleading and * * * too often accepted without analysis.' Austin, Price Discrimination and Related Problems Under the Robinson-Patman Act (2d rev. ed. 1959), 18. It is, of course, possible that the Congressman was so intent upon the immediate problem—protection of secondary-line competition—that he did not reflect upon the significance of his statement when applied to primary-line cases.
| 78
|
364 U.S. 280
80 S.Ct. 1611
4 L.Ed.2d 1719
LUCKENBACH STEAMSHIP COMPANY, Inc.v.UNITED STATES.
No. 848.
Supreme Court of the United States
June 27, 1960
Messrs. Mark P. Schlefer, John Cunningham and Israel Convisser, for appellant.
Solicitor General Rankin, Acting Assistant Attorney General Bicks, Messrs. Charles H. Weston, Robert W. Ginnane and H. Neil Garson, for the United States and Interstate Commerce Commission.
Messrs. Jeremiah C. Waterman, Edward M. Reidy and Raymond A. Negus, for appellees.
PER CURIAM.
1
The judgment of the United States District Court for the District of Delaware, so far as it relates to the suspension of rates phase of the dispute, is vacated and the case is remanded to the District Court with instructions to dismiss the cause as moot. United States v. Amarillo-Borger Express, 352 U.S. 1028, 77 S.Ct. 594, 1 L.Ed.2d 598; Atchison, T. & S. F. R. Co. v. Dixie Carriers, 355 U.S. 179, 78 S.Ct. 258, 2 L.Ed.2d 186. With respect to the antitrust phase of the dispute, the judgment of the District Court is affirmed.
2
Mr. Justice BLACK and Mr. Justice DOUGLAS dissent on the holding of Georgia v. Pennsylvania R. Co., 324 U.S. 439, 65 S.Ct. 716, 89 L.Ed. 1051.
| 78
|
363 U.S. 555
80 S.Ct. 1321
4 L.Ed.2d 1397
METLAKATLA INDIAN COMMUNITY ANNETTE ISLAND RESERVE, Appellant,v.EGAN, Governor of Alaska, et al. ORGANIZED VILLAGE OF KAKE et al., AppellantsV v. EGAN, Governor of Alaska.
Nos. 326, 327.
Argued May 18, 1960.
Decided June 20, 1960.
Mr. Richard Schifter, Washington, D.C., for appellant in No. 326.
Mr. John W. Cragun, Washington, D.C., for appellants in No. 327.
Mr. John D. Calhoun, New York City, for the United States, as amicus curiae, by special leave of Court, in both cases.
Mr. John L. Rader, Anchorage, Alaska, for appellees in both cases.
Mr. Justice FRANKFURTER delivered the opinion of the Court.
1
These consolidated cases were commenced on June 22 and 24, 1959, in the interim District Court for Alaska, by complaints seeking permanent injunctions against threatened enforcement by the new State of Alaska, its Governor, and other agents, of an Alaska statute (Alaska Laws 1959, c. 17, as amended, Alaska Laws 1959, c. 95) making it a criminal offense to fish with traps. The statute was assailed on the ground that it was in conflict with applicable federal law. On July 2, 1959, orders were entered denying the injunctions, dismissing the complaints with prejudice, and denying an injunction pending appeal to this Court. 174 F.Supp. 500. On July 11, 1959, Mr. Justice Brennan, acting in his capacity as a circuit justice, granted appellants' application for an injunction pending final disposition of their future appeals to this Court. His opinion noted the existence of substantial questions, both as to our jurisdiction and the merits. 80 S.Ct. 33, 4 L.Ed.2d 34. The notices of appeal were filed on August 6, 1959; on December 7, 1959, we postponed further consideration of the question of jurisdiction to the hearing of the cases on the merits. 361 U.S. 911, 80 S.Ct. 254, 4 L.Ed.2d 181.
2
If the orders rendered on July 2, 1959, were those of the 'highest court of a State in which a decision could be had,' the appeals are within our jurisdiction under 28 U.S.C. § 1257(2), 28 U.S.C.A. § 1257(2), since the court below sustained a statute of the State of Alaska against a claim of unconstitutionality under the United States Constitution. The jurisdictional problem arises out of the enactments governing Alaska's accession to statehood, specifically, in relation to the Constitution of the new State and to the state and federal laws governing the termination of the former territorial courts and their displacement by a new state judicial system and a Federal District Court for the District of Alaska. The State Constitution, which took effect 'immediately upon the admission of Alaska into the Union as a state' (Art. XV, § 25) on January 3, 1959, provided for a Supreme Court, to 'be the highest court of the State, with final appellate jurisdiction,' a superior court, and such other courts as the legislature may provide. Art. IV, §§ 1, 2. Article XV, § 17, provides that in the transitional period until the new courts are organized, 'the judicial system shall remain as constituted on the date of admission * * *' and that '(w)hen the state courts are organized, new actions shall be commenced and filed therein, and all causes, other than those under the jurisdiction of the United States, pending in the courts existing on the date of admission, shall be transferred to the proper state court as though commenced, filed, or lodged in those courts in the first instance, except as otherwise provided by law.'
3
The Alaska Statehood Act, 72 Stat. 339, which also became fully effective on January 3, 1959, in §§ 13—17, 48 U.S.C.A. preceding section 23, makes similar provision for the eventual disposition of business pending in the territorial district court upon the organization of the new District Court for the District of Alaska. However, it too provides, in § 18, that 'the United States District Court for the Territory of Alaska shall continue to function as heretofore' for three years, or until the President proclaims that the new District Court 'is prepared to assume the functions imposed upon it.' In June, 1959, when these actions were commenced, and on July 2, 1959, when decision below was rendered, neither new federal nor state courts were in operation.
4
The first question presented is whether the interim Alaskan District Court was the 'court of a State' in deciding these cases. Sections 12 to 18 of the Statehood Act, 72 Stat. 339, make it plain that the interim court was not intended to be the newly created United States District Court for the District of Alaska, 28 U.S.C. § 81A, 28 U.S.C.A. § 81A; otherwise the nature of the court, whether state or federal, is not explicitly set forth. It is apparent, however, that the court is to a significant degree the creature of two sovereigns acting cooperatively to accomplish the joint purpose of avoiding an interregnum in judicial administration in the transitional period. The termination of the existence of the interim court is governed by federal law, Statehood Act § 18; but the termination of its general jurisdiction over state law matters, insofar as it is dependent on state consent, is governed by state law, Alaska Laws 1959, c. 50, § 31(2), which also provides for the accelerated organization of separate Alaska courts should the interim court be terminated before they are ready. Alaska Laws 1959, c. 50, § 32(4), amended by Alaska Laws 1959, c. 151, § 1.
5
To determine our jurisdiction we need not engage in abstract speculation as to the function of the interim court in cases not before us. Whether the court can serve as a federal court, and the permissible scope of its powers if it may so serve, cf. National Mutual Ins. Co. v. Tidewater Transfer Co., 337 U.S. 582, 69 S.Ct. 1173, 93 L.Ed. 1556; Benner v. Porter, 9 How. 235, 13 L.Ed. 119, are perplexing questions, decision of which should not be avoidably made. It is apparent that the legislature of Alaska vested the judicial power of the State in the interim District Court for the time being, that the district judge in this case explicitly deemed himself to be exercising such power, and that, in light of the express consent of the United States, he properly did so. Benner v. Porter, supra. It follows that the District Court sat as a 'court of a State' to decide these cases.
6
The question remains whether the interim court was also the 'highest court' of Alaska within the meaning of 28 U.S.C. § 1257, 28 U.S.C.A. § 1257. At the time of the filing of the notice of this appeal on August 6, 1959, the latest time at which jurisdiction could properly be determined, no new Alaska state court was in actual operation, although on July 29 the Justices of the Court were designated by the Governor. The contention that the interim court was not the highest court of Alaska at that time rests upon this latter fact, and the terms of Alaska Laws 1959, c. 151, § 1, amending Alaska Laws 1959, c. 50, § 32, which amendment provides that in the event that 'a court of competent jurisdiction, by final judgment, declares that the United States Court of Appeals for the Ninth Circuit lacks jurisdiction to hear appeals from the District Court of the District of Alaska, the Judicial Council shall forthwith meet and submit to the Governor the names of the persons nominated as justices of the supreme court and appeals from the District Court of the District of Alaska may be made to the State Supreme Court.'
7
Because the Ninth Circuit had ruled against its appellate jurisdiction over the interim court on June 16, 1959, six days before this action was commenced, Parker v. McCarrey, 268 F.2d 907, it is urged that this provision, preserving appeals from the District Court to the Supreme Court of the State until the creation of that court, requires the conclusion that at least after July 29, when the Justices were appointed, appellate review was sufficiently guaranteed to make the Supreme Court, and not the District Court, the highest court of Alaska in which a decision in the instant case could be rendered.
8
The question thus raised is not free from doubt. Viewing the cases as of August 6, when the notices of appeal were filed, it is fairly arguable that the preservation effected by Alaska Laws 1959, c. 151, § 1, of the right to appeal to the Supreme Court of Alaska constituted the interim court as a lower court of Alaska within the intent of 28 U.S.C. § 1257, 28 U.S.C.A. § 1257, to await the completion of the State's adjudicatory process as a prerequisite to adjudication here. Yet, were the promise of an appeal, however indefinitely postponed, to be taken as sufficient to bar our jurisdiction under § 1257, its equally obvious purpose to allow substantial constitutional questions to be timely brought here as of right would be frustrated. Although these cases were decided below on July 2, 1959, the date set by Alaska statute for full organization of the state courts was not until January 3, 1962, Alaska Laws 1959, c. 50, ss31 and 32(4). If no other fact were present, a potential delay of two and one-half years before the organization of a court to hear the preserved appeal would in itself counsel a construction against denial of our jurisdiction. Here, however, two additional facts must be weighed: (1) the Justices of the Supreme Court were actually appointed on July 29, in pursuance of a direction to accelerate the organization of the court; and (2) the effective promulgation of the rules of the court (accomplished on October 5, 1959) and appointment of a clerk were in their hands. Alaska Laws 1959, c. 50, § 32(3). While in light of these facts the question is exceedingly nice, we do not think that the assurance of a timely appeal to a court not yet functioning was sufficiently definite when the appeals were here filed to constitute a bar to our jurisdiction under § 1257(2).
9
The interim court sustained the validity of the Alaska statute banning fishing with traps, Alaska Laws 1959, c. 17, as amended by Alaska Laws 1959, c. 95, against the claim of overriding federal law under the Supremacy Clause, Const. art. 6, cl. 2. The claim was based on an asserted conflict between the statute and regulations of the Secretary of the Interior, 24 Fed.Reg. 2053—71, prohibiting trap fishing in Alaskan waters generally, but excepting the appellants, thereby granting them in effect a license to fish with traps. The authority under which the Secretary purported to act is the Act of 1924, 43 Stat. 464, as amended 48 U.S.C. §§ 221, 222, 48 U.S.C.A. §§ 221, 222.
10
A question not free from doubt, to put it at its lowest, thus raised under the Supremacy Clause, is however entangled with questions of construction of Alaskan state statutes as well as of the Alaska Statehood Act, supra. Also in issue is the effect of provisions of a compact between Alaska and the United States which, it is urged, reserved exclusive regulatory powers over Indian fishing rights to the United States, 72 Stat. 339, and which, so construed, is assertedly unconstitutional because of its failure to accord to Alaska participation in the Union on an 'equal footing' with the other States. The latter contention raises related questions of federal power under the Commerce Clause, Art. I, § 8. While we have before us questions of federal law that are the concern of this Court, their consideration implicates antecedent questions of local law turning in part on appreciation of local economic and social considerations pertinent to the scope of the so-called police power reserved to the State, upon which it would be patently desirable to have the enlightenment which the now fully formed Alaska Supreme Court presumably could furnish.
11
The original Act prohibiting traps was amended by Alaska Laws 1959, c. 95, § 1, so as to provide that it should not be construed inconsistently with the compact, and if the Alaska court determines as a matter of statutory construction that the compact was designed to leave with the United States, as to Indian fishing, the power it exercises under the White Act, a constitutional question now appearing on the horizon might disappear. Moreover, since questions are raised regarding the status of these two Indian communities in relation to the authority of the Secretary of the Interior, enlightenment drawn on the spot by the Alaska Supreme Court may be material to any ultimate determination of federal questions by this Court. Finally, since the ultimate challenge to this legislation is that it must yield to superior federal authority, an authoritative pronouncement by the Supreme Court of Alaska with regard to the justifications of this legislation under the so-called police power would have important bearing on the question of the scope of the powers reserved to the State.
12
Accordingly, consistently with the policies embodied in § 1257, and in view of the peculiar facts of these cases, we refrain at this stage from deciding the issues presented on the merits of these appeals so as to afford the Alaska Supreme Court the opportunity to rule on questions open to it for decision. We assume that that court has jurisdiction in these cases. However, since it alone can authoritatively decide such a question, we shall hold the cases on our docket. After the Alaska Supreme Court's decision, there may be further proceedings on these appeals; and if it assumes jurisdiction, further appeals may be taken from its judgments. Cf. Lassiter v. Northampton County Board of Elections, 360 U.S. 45, 79 S.Ct. 985, 3 L.Ed.2d 1072.
13
Because of the nature of the asserted claim of federal right and the irreparable nature of the injury which may flow from the enforcement of these Alaska criminal statutes prior to a final determination of the merits, we continue the stays granted by Mr. Justice Brennan on July 11, 1959, until the final disposition of the cases.
14
Having been advised that appeals in these cases are pending in the Alaska Supreme Court, we direct appellants to pursue those appeals for disposition not inconsistent with this opinion.
15
It is so ordered.
16
Cases held on docket with directions.
17
THE CHIEF JUSTICE, Mr. Justice BLACK and Mr. Justice DOUGLAS dissent from remitting the parties to the Alaska Supreme Court, as they are of the view that the controlling questions are federal ones whose resolution is for this Court.
| 89
|
363 U.S. 522
80 S.Ct. 1282
4 L.Ed.2d 1371
UNITED STATES of America, Petitioner,v.DURHAM LUMBER COMPANY, and George H. Carter, Jr.
No. 23.
Argued Oct. 19, 1959.
Decided June 20, 1960.
Mr. Howard A. Heffron, Washington, D.C., for petitioner.
Mr. Arthur Vann, Durham, N.C., for respondents.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
This case involves the competing claims of the Federal Government and certain subcontractors to a sum of money owed to the taxpayers under a general construction contract.
2
The taxpayers, Michael & Embree, were general contractors doing business at Durham, North Carolina. Early in 1954, they agreed to construct certain buildings for persons herein referred to as the 'owners.' This work was completed on July 15, 1954, but because the owners disputed the amount due under the contract, payment to the taxpayers was delayed.
3
In completing the construction work, the taxpayers had utilized the services and materials of numerous subcontractors, most of whom had not been compensated. The respondents are two such subcontractors, who in January and February 1955, gave the owners notice of their respective claims against the taxpayers.
4
On January 18, 1955, the taxpayers were adjudicated bankrupts. At that time, there was an unpaid balance of $5,250 due from the owners under the construction contract. After extensive negotiations between the owners, the trustee in bankruptcy, and the subcontractors, it was agreed that the owners would absolve themselves from further liability by paying the $5,250 to the trustee, and that the subcontractors could thereafter assert the same rights against the trustee as they could have asserted against the owners. This arrangement was approved by both the Superior Court for Durham County, North Carolina, and the federal bankruptcy court.
5
Another claimant of the money deposited with the trustee was the Federal Government, which on August 13, 1954, and November 22, 1954, had assessed the taxpayers for uncollected withholding and unemployment insurance taxes. By virtue of Sections 63211 and 63222 of the Internal Revenue Code of 1954, 26 U.S.C.A §§ 6321, 6322, a federal tax lien attached to all 'property and rights to property' belonging to the taxpayers at the time the assessments were made. The Government contended that the money owing under the construction contract was property of the taxpayers to which the tax lien attached.
6
The referee in bankruptcy, attempting to resolve the competing claims against the fund as if the parties were before a state court, decided that the rights of the Federal Government under its tax lien were superior to those of the respondents. The District Court for the Middle District of North Carolina disagreed, and held that the respondents were entitled to payment of their claims before the Government could satisfy its tax lien. On appeal, the Court of Appeals for the Fourth Circuit affirmed, 257 F.2d 570. We granted certiorari. 359 U.S. 905, 79 S.Ct. 582, 3 L.Ed.2d 571.
7
In affirming the judgment of the District Court, the Court of Appeals stated that the nature and extent of the general contractors' property rights, to which the tax lien attached, must be ascertained under state law. The court then undertook an extensive analysis of the relevant North Carolina statutes3 and cases. It found that the North Carolina law provides as follows: Subcontractors who have not been paid by the general contractor have a direct, independent cause of action against the owner to the extent of any amount due under the general construction contract, and any money owed by the owner under the construction contract must first be used to satisfy subcontractors' claims of which the owner has notice. Moreover, to insure that the owner will receive notice of outstanding subcontractors' claims, the North Carolina statute, N.C.Gen.Stat.1950, § 44—8, requires the general contractor, before receiving any payment, to furnish the owner with a statement of all sums due subcontractors, and if the general contractor fails to supply the required statement, he is guilty of a misdemeanor. N.C.Gen.Stat.1950, § 44—12. Finally, the court found further evidence of the direct and independent nature of the subcontractors' claims against the owner in N.C.Gen.Stat.1950, § 44—9, which provides that should the owner pay the general contractor after receiving notice of a subcontractor's claim, he will nevertheless be liable to the subcontractor to the extent of the amount which was due under the construction contract at the time notice was received.
8
Based upon these considerations, the Court of Appeals held that, under North Carolina law, the general contractor did not have a property interest in the face amount, as such, of the general construction contract. Specifically, the court said that 'except to the extent the claim of the general contractor exceeds the aggregate of the claims of the subcontractors, the general contractor has no right which is subject to seizure under the tax lien.' Id., 257 F.2d at page 574. Therefore, concluded the court, since under North Carolina law the taxpayers possessed merely a right to the residue of the fund, and since the Government's tax lien attached to the property interests of the taxpayers as defined by state law, the Government can recover only 'so much of the construction price as will remain unpaid after the owners have deducted a sum sufficient to pay the subcontractors.' Id., at page 575.
9
The Court of Appeals was correct in asserting that the Government's tax lien attached to the taxpayers' property interests in the fund as defined by North Carolina law. Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 1285;4 United States v. Bess, 357 U.S. 51, 55, 78 S.Ct. 1054, 1057; cf. Morgan v. Commissioner, 309 U.S. 78, 82, 60 S.Ct. 424, 426, 84 L.Ed. 585. It is suggested that the courts of North Carolina have never specifically described the nature of the property rights created by the North Carolina statutes involved in this case, and that the Court of Appeals' interpretation of those statutes is probably incorrect. However, where '(t)he precise issue of state law involved * * * is one which has not been decided by the * * * (state) courts,' this Court has said that, '(i)n dealing with issues of state law that enter into judgments of federal courts, we are hesitant to overrule decisions by federal courts skilled in the law of particular states unless their conclusions are shown to be unreasonable.' Propper v. Clark, 337 U.S. 472, 486—487, 69 S.Ct. 1333, 1341—1342, 93 L.Ed. 1480. Since the Court of Appeals is much closer to North Carolina law than we are, and since we cannot say that the court's characterization of the taxpayers' property interests under that law is clearly erroneous or unreasonable,5 the judgment is affirmed.
10
Affirmed.
1
Section 6321. Lien for taxes:
'If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.'
2
Section 6322. Period of lien:
'Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed is satisfied or becomes unenforceable by reason of lapse of time.'
3
N.C.Gen.Stat.1950, §§ 44—6 to 44—12.
4
This case points up the distinction we drew in Aquilino. The facts here show how it simply begs the question to suggest that the principle of the lien-priority cases is somehow subverted or evaded by recognizing that what constitutes the taxpayer's property in the first place is a question of state law. The facts show, too, that it does not promote clarity to substitute, for the property interests created by state law, a rule of federal property law, the main feature of which seems to be an inquiry into what the consequences would be if state law were different from what it in fact is. It is said that we should regard the subcontractor's interest as equivalent to a lien on the general contractor's claim against the owner, overlooking the fact that the law of North Carolina, as interpreted by the Court of Appeals, indicates that there is no such claim. If we are to equate the subcontractor's interest with something it is not, it would be much more appropriate, in terms of similarity, to equate it with the usual mechanic's lien of a subcontractor on the owner's property being improved—which of course is not the general contractor's property, and which could not be taken by the United States under a lien against the general contractor. This only points up the lack of precision and content in the proposed federal definition of property. See also Fidelity & Deposit Co. of Md. v. New York City Housing Auth., 2 Cir., 241 F.2d 142, cited with approval in United States v. Bess, 357 U.S. 51, 55, 78 S.Ct. 1054, 1057, 2 L.Ed.2d 1135.
5
See Sims v. United States, 359 U.S. 108, 114, 79 S.Ct. 641, 645, 3 L.Ed.2d 667; Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 534, 69 S.Ct. 1233, 1235, 93 L.Ed. 1520; Estate of Spiegel v. Commissioner, 335 U.S. 701, 707—708, 69 S.Ct. 301, 303—304, 93 L.Ed. 330.
| 1112
|
363 U.S. 685
80 S.Ct. 1336
4 L.Ed.2d 1491
UNITED STATES of America, Petitioner,v.AMERICAN-FOREIGN STEAMSHIP CORP. et al.
No. 138.
Argued April 25, 1960.
Decided June 20, 1960.
Mr. Philip Elman, Washington, D.C., for petitioner.
Mr. J. Franklin Fort and Mr. Arthur M. Becker, Washington, D.C., for respondents.
Mr. Justice STEWART delivered the opinion of the Court.
1
The question to be decided here is a narrow one. The Judicial Code provides that in the United States Courts of Appeals '(c)ases and controversies shall be heard and determined by a court or division of not more than three judges, unless a hearing or rehearing before the court in banc is ordered by a majority of the circuit judges of the circuit who are in active service.' It further provides that '(a) court in banc shall consist of all active circuit judges of the circuit.' 28 U.S.C. § 46(c), 28 U.S.C.A. § 46(c). The sole issue presented is whether a circuit judge who has retired is eligible under this statute to participate in the decision of a case on rehearing en banc. We have concluded that he is not.
2
This litigation arose when the respondents, who had chartered ships from the Government under the Merchant Ship Sales Act, 50 U.S.C.Appendix, § 1735 et seq., 50 U.S.C.A.Appendix, § 1735 et seq., sued the Government in the District Court for the Southern District of New York to recover amounts of allegedly excessive charter hire which had been assessed by the Maritime Commission. The Government moved to dismiss the libels on the ground that the claims were barred by the two-year limitation period prescribed by the Suits in Admiralty Act, 46 U.S.C. § 745, 46 U.S.C.A. § 745. The libels were dismissed in the District Court on the authority of the Second Circuit decisions in Sword Line, Inc., v. United States, 2 Cir., 228 F.2d 344; 2 Cir., 230 F.2d 75, affirmed as to admiralty jurisdiction 351 U.S. 976, 76 S.Ct. 1047, 100 L.Ed. 1493, and American Eastern Corp. v. United States, 2 Cir., 231 F.2d 664.1
3
The District Court's decisions were thereafter affirmed by the United States Court of Appeals for the Second Circuit. That court, consisting of Circuit Judges Medina and Hincks and retired District Judge Leibell, held that the issues were controlled by the earlier Sword Line and American Eastern decisions. The court's opinion stated, however, that '(i)f the subject-matter of these appeals were res nova, we are by no means sure that our dispositions would coincide with those made by the majority opinion in Sword Line and by American Eastern. However, we will not overrule these recent decisions of other panels of the court.' 265 F.2d 136, 142.
4
Thereafter, on December 19, 1957, the Court of Appeals granted the libellants' petition for rehearing en banc and ordered that argument thereon be confined to written briefs to be submitted within twenty days. On March 1, 1958, Judge Medina retired pursuant to the provisions of 28 U.S.C. § 371(b), 28 U.S.C.A. § 371(b).2 Almost five months later, on July 28, 1958, the court issued its en banc decision. Circuit Judges Hincks and Moore and retired Circuit Judge Medina joined an opinion ordering the earlier three-judge decision withdrawn and remanding the causes to the District Court, 265 F.2d 136, 144. Judges Clark and Waterman dissented.3 In his dissenting opinion Judge Clark expressed doubt as to a retired judge's eligibility to participate in an en banc decision. 265 F.2d 136, 153.
5
The Government then filed a petition for further rehearing en banc, directed primarily to the question which had been raised by Judge Clark. The petition was denied in an opinion by Judge Hincks joined by Judges Moore and Medina, stating the view that '(s)ince Judge Medina was a member of the court in banc which was duly constituted to hear and determine the issues raised by the petition for rehearing, we think his subsequent retirement did not affect his competence to participate in the decision thereafter reached.' 265 F.2d 136, 154. Judges Clark and Waterman filed a separate statement in which they expressed the opinion that Judge Medina's participation in the en banc determination was precluded by the plain language of the controlling statute. 265 F.2d 136, 155. Certiorari was granted to consider a question of importance to the Court of Appeals in the administration of their judicial business. 361 U.S. 861, 80 S.Ct. 117, 4 L.Ed.2d 101.
6
As a preliminary to decision of the precise question before us it is important to make clear that this case in no way involves the eligibility of a retired judge to participate in the hearing, rehearing or determination of a case as a member of a conventional three-judge Court of Appeals. Such participation is governed by different statutory provisions. The Judicial Code explicitly provides that 'judges designated or assigned' shall be 'competent to sit as judges' of such a court. 28 U.S.C. § 43(b), 28 U.S.C.A. § 43(b). Other provisions of the Code spell out in detail the system under which designations and assignments of retired judges are to be made. 28 U.S.C. §§ 294, 295, 296, 28 U.S.C.A. §§ 294—296.4
7
Moreover, there is not involved here any issue as to the procedure to be followed by a Court of Appeals in determining whether a hearing or rehearing en banc is to be ordered. In the Western Pacific Railroad Case, Western Pac. R. Corp. v. Western Pac. R. Co., 345 U.S. 247, 73 S.Ct. 656, 97 L.Ed. 986, it was held that this question is largely to be left to intramural determination by each of the Courts of Appeals. 'The court is left free to devise its own administrative machinery to provide the means whereby a majority may order such a hearing.' 345 U.S., at page 250, 73 S.Ct. at page 658.5
8
Here we are concerned only with the specific provision of the Judicial Code which ordains that en banc proceedings shall be 'heard and determined' by a court consisting of all the 'active circuit judges' of the circuit involved. The literal meaning of the words seems plain enough. An 'active' judge is a judge who has not retired 'from regular active service.' 28 U.S.C. § 371(b), 28 U.S.C.A. § 371(b). A case or controversy is 'determined' when it is decided.
9
There is nothing in the history of the legislation to indicate that these words should be understood to mean anything else than what they say. As the Reviser's Note indicates, and as this Court pointed out in the Western Pacific Railroad Case, 345 U.S., at pages 250, 251, 73 S.Ct. at page 658, where the legislative history was fully reviewed, the statutory provision was added to the Judicial Code in 1948 simply as a 'legislative ratification of Textile Mills Securities Corp. v. Commissioner, 1941, 314 U.S. 326, 62 S.Ct. 272, 86 L.Ed. 249—a decision which went no further than to sustain the power of a Court of Appeals to order a hearing en banc.'6
10
The view that a retired circuit judge is eligible to participate in an en banc decision thus finds support neither in the language of the controlling statute nor in the circumstances of its enactment. Indeed, Congress may well have thought that it would frustrate a basic purpose of the legislation not to confine the power of en banc decision to the permanent active membership of a Court of Appeals. En banc courts are the exception, not the rule. They are convened only when extraordinary circumstances exist that call for authoritative consideration and decision by those charged with the administration and development of the law of the circuit.
11
When such circumstances appear, en banc determinations make 'for more effective judicial administration. Conflicts within a circuit will be avoided. Finality of decision in the circuit courts of appeal will be promoted. Those considerations are especially important in view of the fact that in our federal judicial system these courts are the courts of last resort in the run of ordinary cases.' Textile Mills Securities Corp. v. Commissioner, 314 U.S., at pages 334—335, 62 S.Ct. at pages 277, 278. 'The principal utility of determinations by the courts of appeals in banc is to enable the court to maintain its integrity as an institution by making it possible for a majority of its judges always to control and thereby to secure uniformity and continuity in its decisions, while enabling the court at the same time to follow the efficient and time-saving procedure of having panels of three judges hear and decide the vast majority of cases as to which no division exists within the court.' Maris, Hearing and Rehearing Cases in Banc, 1954, 14 F.R.D. 91, at page 96. As Judge Clark put it in the present case, the evident policy of the statute was to provide 'that the active circuit judges shall determine the major doctrinal trends of the future for their court * * *.' 265 F.2d, at page 155.
12
Persuasive arguments could be advanced that an exception should be made to permit a retired circuit judge to participate in en banc determination of cases where, as here, he took part in the original three-judge hearing, or where, as here, he had not yet retired when the en banc hearing was originally ordered. Indeed, the Judicial Conference of the United States has approved suggested legislative changes that would provide such an exception, and a bill to amend the statute has been introduced in the Congress.7 But this only serves to emphasize that if the statute is to be changed, it is for Congress, not for us, to change it.
13
We conclude for these reasons that under existing legislation a retired circuit judge is without power to participate in an en banc Court of Appeals determination, and accordingly that the judgment must be set aside. American Construction Co. v. Jacksonville, T. & K. W.R. Co., 148 U.S. 372, 387, 13 S.Ct. 758, 764, 37 L.Ed. 486; Frad v. Kelly, 302 U.S. 312, 316—319, 58 S.Ct. 188, 191—192, 82 L.Ed. 282. In reaching this conclusion we intimate no view as to the merits of the underlying litigation. The judgment is vacated, and the case remanded for further proceedings consistent with this opinion.
14
Vacated and remanded.
15
Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER and Mr. Justice BRENNAN join, dissenting.
16
I can find nothing in 28 U.S.C. § 46(c), 28 U.S.C.A. § 46(c) which requires the decision the Court has made, and nothing in the decision which commends itself to considerations of sound judicial administration. For convenience I again quote § 46(c):
17
'Cases and controversies shall be heard and determined by a court or division of not more than three judges, unless a hearing or rehearing before the court in banc is ordered by a majority of the circuit judges of the circuit who are in active service. A court in banc shall consist of all active circuit judges of the circuit.'
18
The statute need hardly be read, as the Court now holds it should be, as saying that a case in an en banc court shall be 'heard and determined' by the active circuit judges; still less does it say that a case is not 'determined' until the decision of it is announced. The statute says no more than that ordinarily law-suits before the Courts of Appeals are to be 'heard and determined' before a panel of not more than three judges, but that a majority of the judges in active service may order that a case be set for 'hearing or rehearing' before a court consisting of all the active circuit judges of the circuit sitting en banc.
19
The 'heard and determined' clause on which the Court relies appears in a sentence whose purposes were simply to codify the doctrine that a Court of Appeals had power to sit en banc, Textile Mills Securities Corp. v. Commissioner, 314 U.S. 326, 62 S.Ct. 272, 86 L.Ed. 249, while making clear that the usual procedure was to be decision by a three-judge panel.1 It is not an unknown phenomenon in federal adjudication that a case, though heard by less than the entire tribunal, may be decided according to the majority vote of all. Cf. I.R.C., § 7460, 26 U.S.C.A. § 7460; see 2 Casey, Federal Tax Practice, 274—280. The traditional term, 'heard and determined,' in my view was designed to do no more than reflect the obvious inappropriateness of such a procedure to the deliberations of the Court of Appeals. There is no necessity for finding in that term, in light of the context in which it appears, any Congressional direction regarding the constitution of an en banc court.
20
The requirements governing the composition of an en banc court are found in the last sentence of § 46(c). All it provides is that such a court shall not include retired circuit judges. The reason for such a provision is not hard to discern. Congress would hardly have required a retired circuit judge to return to the bench to attend at an en banc hearing and, as between leaving the matter to the discretion of the individual judge and limiting the court to active judges, it is not surprising—in view of the varying degrees of judicial activity of the retired judges, and the administrative undesirability of having, for these purposes, a court of unpredictable size and complement—that Congress should have chosen the latter course.
21
The language and context, then, of § 46(c) are given full effect by holding, as I would, that the statute requires no more than that the members of an en banc court be in active status at the time the case is argued or submitted. Such a construction, for a court which decided the Textile Mills case, supra, should not be difficult to reach. The issue there was whether the predecessor of § 46(c), conferring appellate jurisdiction on circuit courts consisting of three judges, prevented adjudication by a circuit court composed of five judges, constituting all the active circuit judges of the particular circuit there involved. In holding that it did not, the Court, making a wise 'sacrifice of literalness for common sense,' 314 U.S. at page 334, 62 S.Ct. at page 277, found no difficulty in rising above the arithmetic of the predecessor of § 46(c) so as to achieve a sensible result. Still less should there be difficulty here in accommodating § 46(c) to the needs of sound judicial administration. So construed, the statute was complied with here.2
22
But even were I to accept the Court's premises—a reading into the en banc procedure of a requirement that only active judges may participate in the 'determination' of such cases, and a view of § 46(c) as expressing a Congressional policy against participation by retired judges in decisions setting the 'major doctrinal trends' of a court—I could not agree that they justify this decision. Choice of the date of announcement of a decision as the date of 'determination' of the cause may provide a touchstone which a disappointed litigant searching for grounds for reversal can easily apply. However, it seems a singularly infelicitous construction of this particular legislative language.3 '(L)aws are not abstract propositions. They are expressions of policy arising out of specific situations and addressed to the attainment of particular ends.' Frankfurter, Some Reflections on the Reading of Statutes, 47 Col.L.Rev. 527, 533. The exact point of time when a case is 'determined' is, as all informed lawyers know, a question whose answer varies from case to case, and which is known in a particular instance only to the judges themselves. Certainly, if an opinion—all argument, reflection, deliberation, and explication having been completed by a court composed of active judges only—is filed with the clerk of the court on the morning following the retirement of one of its members, no policy remotely discernible in § 46(c) can justify a requirement that his vote in the case should not be counted. If any such policy can be thought to be reflected in the en banc statute, it should not be taken as requiring more than that a judge, whose retirement comes at a time when meaningful things in the process of adjudication still remain to be done, must withdraw from further participation. But where such is not the case, the statute should not be thought to require a precipitous termination of judicial affairs and the undoing of adjudications properly made. In the nature of things the effectuation of such a policy should be left with the various Courts of Appeals, if indeed not to the conscience and good taste of the particular circuit judge concerned, as in most instances of individual disqualification for other reasons. Cf. 28 U.S.C. § 455, 28 U.S.C.A. § 455.
23
It is not a ground for objection that such a construction would provide no test which an outsider, whether litigant or reviewing court, could apply.4 As this Court has observed: 'In our view, § 46(c) is not addressed to litigants. It is addressed to the Court of Appeals.' Western Pacific Railroad Case, 345 U.S. 247, 250, 73 S.Ct. 656, 657, 658, 97 L.Ed. 986. On its view of the statute the Court should not have hesitated to adopt that construction of the 'heard and determined' clause which most faithfully reflects its purpose merely because those with whom the statute is not concerned are thereby hampered in voicing their own objections.
24
Indeed, while I need express no definite view on the question, since I regard the claim of noncompliance with § 46(c) as untenable, I must say that the Court's opinion presents no substantial reason for permitting a litigant to overturn a judgment of the Court of Appeals through this sort of collateral attack on the competence of one of its members to sit. Had Judge Medina found in § 46(c), as the Court holds he should have found, a statutory direction to withdraw from further participation in this lawsuit, petitioner and not respondents would have prevailed on the appeal, since that would have resulted in the affirmance, by an equally divided Court of Appeals, of the District Court's judgment in favor of the Government. Of course, to a litigant, there is no greater injury than to lose a case, but I have difficulty understanding just what legal error has been committed against petitioner, such as to warrant vacation by this Court of the judgment below, thus giving the Government an opportunity to retrieve its original loss in the en banc Court of Appeals. Clearly, Judge Medina was not a mere interloper, or a usurper. He was, and is, a circuit judge of the United States, bearing a commission signed by the President. Abstractions about 'competence' only becloud the matter. All that has happened is that Judge Medina has exercised the right conferred by Congress (28 U.S.C. § 371(b), 28 U.S.C.A. § 371(b)) to retire from active service. Nothing in that action, or in what the Court has said concerning the scope of § 46(c), renders the judgment of the court below vulnerable to attack. The cases cited by the Court dealt with disqualifications based on policy grounds the effectuation of which called for a vacation of the judgments rendered there.5 No reason has been given why that is so here.
25
I would affirm.
1
141 F.Supp. 58. Two of the libels were dismissed upon the same ground by another district judge in an opinion which is unreported.
2
'Any justice or judge of the United States appointed to hold office during good behavior may retain his office but retire from regular active service after attaining the age of seventy years and after serving at least ten years continuously or otherwise, or after attaining the age of sixty-five years and after serving at last fifteen years continuously or otherwise.'
3
Judge Lumbard did not participate because of a prior connection with the litigation as United States Attorney.
4
In accord with this flexible statutory scheme, retired federal judges the country over have rendered devoted service in the trial and appellate courts of the United States, voluntarily and without economic incentive of any kind.
5
An enlightening discussion by Judge Maris of the thorough administrative machinery worked out by the Court of Appeals for the Third Circuit appears in 14 F.R.D. 91.
6
It is worth noting that the Textile Mills opinion itself carefully distinguished between circuit judges in active service and those who have retired. 314 U.S., at page 327, 62 S.Ct. at page 274.
7
At its Annual Meeting in September, 1959, the Judicial Conference of the United States received a joint report of its Committees on Court Administration and Revision of the Laws, stating their view that under the present law retired judges are not eligible to participate in en banc proceedings. 'However, the Committees thought it proper to permit a retired circuit judge to be a member of the court of appeals sitting in banc in the rehearing of a case in which he has sat, by assignment, in the panel of the court which heard the case originally.' The Conference agreed and approved a draft of a bill, presented by the Committees, which would add the following sentence to 28 U.S.C. § 46(c), 28 U.S.C.A. § 46(c): 'A circuit judge of the circuit who has retired from regular active service shall also be competent to sit as a judge of the court in banc in the rehearing of a case or controversy if he sat in the court or division at the original hearing thereof.' Annual Report of the Proceedings of the Judicial Conference of the United States (1959), pp. 9—10. A bill to effect this change was introduced in the House of Representatives by Representative Celler on April 5, 1960, as H.R. 11567, 86th Cong., 2d Sess. 106 Cong.Rec. 6865.
1
The Reviser's Note to § 46 shows this to be true. 'This section preserves the interpretation established by the Textile Mills case but provides in subsection (c) that cases shall be heard by a court of not more than three judges unless the court has provided for hearing in banc. This provision continues the tradition of a three-judge appellate court and makes the decision of a division, the decision of the court, unless rehearing in banc is ordered. It makes judges available for other assignments, and permits a rotation of judges in such manner as to give to each a maximum of time for the preparation of opinions.'
2
The order granting the respondents' petition for rehearing en banc required that the case be submitted on written briefs, to be filed by Jan. 8, 1958. Judge Medina retired on March 1, 1958. The action of the Judicial Conference in 1959, to which the Court refers (363 U.S. at page 690, 80 S.Ct. at page 1340, note 7), does not of course bear upon the narrow issue before us. That action was broadly directed to permitting retired circuit judges to sit on en banc courts in instances where they had sat on the panel originally deciding the case. Indeed, the recommendation of the Judicial Conference goes far to dilute the force of the Court's attribution to Congress of a design to leave in the hands of active circuit judges alone the setting of the 'major doctrinal trends' of their courts.
3
In construing a statute far more amenable to a technical approach, we recently rejected an analogous construction of the word 'determined.' United States v. Price, 361 U.S. 304, 307, 80 S.Ct. 326, 328, 4 L.Ed.2d 334.
4
In this case, one cannot say that such a standard was not followed. Although the decision was not announced until nearly five months after his retirement (265 F.2d 136, 144), Judge Medina had sat on the panel which originally heard the case, and the briefs on reargument were submitted almost three months prior to his retirement. He did not write an opinion in the case.
5
In Frad v. Kelly, 302 U.S. 312, 58 S.Ct. 188, 82 L.Ed. 282, a motion for discharge from probation was entertained and granted by a judge not of the district where sentence had been imposed. The evident purpose of the statute limiting consideration of such matters to judges of the sentencing court was to permit those judges to develop an integrated policy governing probation. Id., 302 U.S. at page 318, 58 S.Ct. at page 192. To give effect to that policy, the order of discharge was vacated. The dictum in American Construction Co. v. Jacksonville, T. & K.W.R. Co., 148 U.S. 372, 387, 13 S.Ct. 758, 764, 37 L.Ed. 486, concerned a violation by a judge of the requirement that he not sit on an appeal from a judgment or order which he had entered. It hardly needs elucidation to recognize that disregard of such a policy infects the judgment rendered.
| 89
|
363 U.S. 574
80 S.Ct. 1347
4 L.Ed.2d 1409
UNITED STEELWORKERS OF AMERICA, Petitioner,v.WARRIOR AND GULF NAVIGATION COMPANY.
No. 443.
Argued April 27, 1960.
Decided June 20, 1960.
Mr. David E. Feller, Washington, D.C., for petitioner.
Mr. Samuel Lang, New Orleans, La., for respondent.
Opinion of the Court by Mr. Justice DOUGLAS, announced by Mr. Justice BRENNAN.
1
Respondent transports steel and steel products by barge and maintains a terminal at Chickasaw, Alabama, where it performs maintenance and repair work on its barges. The employees at that terminal constitute a bargaining unit covered by a collective bargaining agreement negotiated by petitioner union. Respondent between 1956 and 1958 laid off some employees, reducing the bargaining unit from 42 to 23 men. This reduction was due in part to respondent contracting maintenance work, previously done by its employees, to other companies. The latter used respondent's supervisors to lay out the work and hired some of the laid-off employees of respondent (at reduced wages). Some were in fact assigned to work on respondent's barges. A number of employees signed a grievance which petitioner presented to respondent, the grievance reading:
2
'We are hereby protesting the Company's actions, of arbitrarily and unreasonably contracting out work to other concerns, that could and previously has been performed by Company employees.
3
'This practice becomes unreasonable, unjust and discriminatory in lieu (sic) of the fact that at present there are a number of employees that have been laid off for about 1 and 1/2 years or more for allegedly lack of work.
4
'Confronted with these facts we charge that the Company is in violation of the contract by inducing a partial lock-out, of a number of the employees who would otherwise be working were it not for this unfair practice.'
5
The collective agreement had both a 'no strike' and a 'no lockout' provision. It also had a grievance procedure which provided in relevant part as follows:
6
'Issues which conflict with any Federal statute in its application as established by Court procedure or matters which are strictly a function of management shall not be subject to arbitration under this section.
7
'Should differences arise between the Company and the Union or its members employed by the Company as to the meaning and application of the provisions of this Agreement, or should any local trouble of any kind arise, there shall be no suspension of work on account of such differences but an earnest effort shall be made to settle such differences immediately in the following manner:
8
'A. For Maintenance Employees:
9
'First, between the aggrieved employees, and the Foreman involved;
10
'Second, between a member or members of the Grievance Committee designated by the Union, and the Foreman and Master Mechanic.
11
'Fifth, if agreement has not been reached the matter shall be referred to an impartial umpire for decision. The parties shall meet to decide on an umpire acceptable to both. If no agreement on selection of an umpire is reached, the parties shall jointly petition the United States Conciliation Service for suggestion of a list of umpires from which selection shall be made. The decision of the umpire will be final.'
12
Settlement of this grievance was not had and respondent refused arbitration. This suit was then commenced by the union to compel it.1
13
The District Court granted respondent's motion to dismiss the complaint. 168 F.Supp. 702. It held after hearing evidence, much of which went to the merits of the grievance, that the agreement did not 'confide in an arbitrator the right to review the defendant's business judgment in contracting out work.' Id., at page 705. It further held that 'the contracting out of repair and maintenance work, as well as construction work, is strictly a function of management not limited in any respect by the labor agreement involved here.' Ibid. The Court of Appeals affirmed by a divided vote, 269 F.2d 633, 635, the majority holding that the collective agreement had withdrawn from the grievance procedure 'matters which are strictly a function of management' and that contracting out fell in that exception. The case is here on a writ of certiorari. 361 U.S. 912, 80 S.Ct. 255, 4 L.Ed.2d 183.
14
We held in Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 923, 1 L.Ed.2d 972, that a grievance arbitration provision in a collective agreement could be enforced by reason of § 301(a) of the Labor Management Relations Act2 and that the policy to be applied in enforcing this type of arbitration was that reflected in our national labor laws. Id., 353 U.S. at pages 456—457, 77 S.Ct. at page 917—918. The present federal policy is to promote industrial stabilization through the collective bargaining agreement.3 Id., 353 U.S. at pages 453—454, 77 S.Ct. at page 916. A major factor in achieving industrial peace is the inclusion of a provision for arbitration of grievances in the collective bargaining agreement.4
15
Thus the run of arbitration cases, illustrated by Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 becomes irrelevant to our problem. There the choice is between the adjudication of cases or controversies in courts with established procedures or even special statutory safeguards on the one hand and the settlement of them in the more informal arbitration tribunal on the other. In the commercial case, arbitration is the substitute for litigation. Here arbitration is the substitute for industrial strife. Since arbitration of labor disputes has quite different functions from arbitration under an ordinary commercial agreement, the hostility evinced by courts toward arbitration of commercial agreements has no place here. For arbitration of labor disputes under collective bargaining agreements is part and parcel of the collective bargaining process itself.
16
The collective bargaining agreement states the rights and duties of the parties. It is more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate. See Shulman, Reason, Contract, and Law in Labor Relations, 68 Harv.L. Rev. 999, 1004—1005. The collective agreement covers the whole employment relationship.5 It calls into being a new common law—the common law of a particular industry or of a particular plant. As one observer has put it:6
17
'* * * (I)t is not unqualifiedly true that a collective-bargaining agreement is simply a document by which the union and employees have imposed upon management limited, express restrictions of its otherwise absolute right to manage the enterprise, so that an employee's claim must fail unless he can point to a specific contract provision upon which the claim is founded,. There are too many people, too many problems, too many unforeseeable contingencies to make the words of the contract the exclusive source of rights and duties. One cannot reduce all the rules governing a community like an industrial plant to fifteen or even fifty pages. Within the sphere of collective bargaining, the institutional characteristics and the governmental nature of the collective-bargaining process demand a common law of the shop which implements and furnishes the context of the agreement. We must assume that intelligent negotiators acknowledged so plain a need unless they stated a contrary rule in plain words.'
18
A collective bargaining agreement is an effort to erect a system of industrial self-government. When most parties enter into contractual relationship they do so voluntarily, in the sense that there is no real compulsion to deal with one another, as opposed to dealing with other parties. This is not true of the labor agreement. The choice is generally not between entering or refusing to enter into a relationship, for that in all probability pre-exists the negotiations. Rather it is between having that relationship governed by an agreed-upon rule of law or leaving each and every matter subject to a temporary resolution dependent solely upon the relative strength, at any given moment, of the contending forces. The mature labor agreement may attempt to regulate all aspects of the complicated relationship, from the most crucial to the most minute over an extended period of time. Because of the compulsion to reach agreement and the breadth of the matters covered, as well as the need for a fairly concise and readable instrument, the product of negotiations (the written document) is, in the words of the late Dean Shulman, 'a compilation of diverse provisions: some provide objective criteria almost automatically applicable; some provide more or less specific standards which require reason and judgment in their application; and some do little more than leave problems to future consideration with an expression of hope and good faith.' Shulman, supra, at 1005. Gaps may be left to be filled in by reference to the practices of the particular industry and of the various shops covered by the agreement. Many of the specific practices which underlie the agreement may be unknown, except in hazy form, even to the negotiators. Courts and arbitration in the context of most commercial contracts are resorted to because there has been a breakdown in the working relationship of the parties; such resort is the unwanted exception. But the grievance machinery under a collective bargaining agreement is at the very heart of the system of industrial self-government. Arbitration is the means of solving the unforeseeable by molding a system of private law for all the problems which may arise and to provide for their solution in a way which will generally accord with the variant needs and desires of the parties. The processing of disputes through the grievance machinery is actually a vehicle by which meaning and content are given to the collective bargaining agreement.
19
Apart from matters that the parties specifically exclude, all of the questions on which the parties disagree must therefore come within the scope of the grievance and arbitration provisions of the collective agreement. The grievance procedure is, in other words, a part of the continuous collective bargaining process. It, rather than a strike, is the terminal point of a disagreement.
20
The labor arbitrator performs functions which are not normal to the courts; the considerations which help him fashion judgments may indeed by foreign to the competence of courts.
21
'A proper conception of the arbitrator's function is basic. He is not a public tribunal imposed upon the parties by superior authority which the parties are obliged to accept. He has no general charter to administer justice for a community which transcends the parties. He is rather part of a system of self-government created by and confined to the parties. * * *' Shulman, supra, at 1016.
22
The labor arbitrator's source of law is not confined to the express provisions of the contract, as the industrial common law—the practices of the industry and the shop—is equally a part of the collective bargaining agreement although not expressed in it. The labor arbitrator is usually chosen because of the parties' confidence in his knowledge of the common law of the shop and their trust in his personal judgment to bring to bear considerations which are not expressed in the contract as criteria for judgment. The parties expect that his judgment of a particular grievance will reflect not only what the contract says but, insofar as the collective bargaining agreement permits, such factors as the effect upon productivity of a particular result, its consequence to the morale of the shop, his judgment whether tensions will be heightened or diminished. For the parties' objective in using the arbitration process is primarily to further their common goal of uninterrupted production under the agreement, to make the agreement serve their specialized needs. The ablest judge cannot be expected to bring the same experience and competence to bear upon the determination of a grievance, because he cannot be similarly informed.
23
The Congress, however, has by § 301 of the Labor Management Relations Act, assigned the courts the duty of determining whether the reluctant party has breached his promise to arbitrate. For arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. Yet, to be consistent with congressional policy in favor of settlement of disputes by the parties through the machinery of arbitration, the judicial inquiry under § 301 must be strictly confined to the question whether the reluctant party did agree to arbitrate the grievance or did agree to give the arbitrator power to make the award he made. An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.7
24
We do not agree with the lower courts that contracting-out grievances were necessarily excepted from the grievance procedure of this agreement. To be sure, the agreement provides that 'matters which are strictly a function of management shall not be subject to arbitration.' But it goes on to say that if 'differences' arise or if 'any local trouble of any kind' arises, the grievance procedure shall be applicable.
25
Collective bargaining agreements regulate or restrict the exercise of management functions; they do not oust management from the performance of them. Management hires and fires, pays and promotes, supervises and plans. All these are part of its function, and absent a collective bargaining agreement, it may be exercised freely except as limited by public law and by the willingness of employees to work under the particular, unilaterally imposed conditions. A collective bargaining agreement may treat only with certain specific practices, leaving the rest to management but subject to the possibility of work stoppages. When, however, an absolute no-strike clause is included in the agreement, then in a very real sense everything that management does is subject to the agreement, for either management is prohibited or limited in the action it takes, or if not, it is protected from interference by strikes. This comprehensive reach of the collective bargaining agreement does not mean, however, that the language, 'strictly a function of management,' has no meaning.
26
'Strictly a function of management' might be thought to refer to any practice of management in which, under particular circumstances prescribed by the agreement, it is permitted to indulge. But if courts, in order to determine arbitrability, were allowed to determine what is permitted and what is not, the arbitration clause would be swallowed up by the exception. Every grievance in a sense involves a claim that management has violated some provision of the agreement.
27
Accordingly, 'strictly a function of management' must be interpreted as referring only to that over which the contract gives management complete control and unfettered discretion. Respondent claims that the contracting out of work falls within this category. Contracting out work is the basis of many grievances; and that type of claim is grist in the mills of the arbitrators.8 A specific collective bargaining agreement may exclude contracting out from the grievance procedure. Or a written collateral agreement may make clear that contracting out was not a matter for arbitration. In such a case a grievance based solely on contracting out would not be arbitrable. Here, however, there is no such provision. Nor is there any showing that the parties designed the phrase 'strictly a function of management' to encompass any and all forms of contracting out. In the absence of any express provision excluding a particular grievance from arbitration, we think only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail, particularly where, as here, the exclusion clause is vague and the arbitration clause quite broad. Since any attempt by a court to infer such a purpose necessarily comprehends the merits, the court should view with suspicion an attempt to persuade it to become entangled in the construction of the substantive provisions of a labor agreement, even through the back door of interpreting the arbitration clause, when the alternative is to utilize the services of an arbitrator.
28
The grievance alleged that the contracting out was a violation of the collective bargaining agreement. There was, therefore, a dispute 'as to the meaning and application of the provisions of this Agreement' which the parties had agreed would be determined by arbitration.
29
The judiciary sits in these cases to bring into operation an arbitral process which substitutes a regime of peaceful settlement for the older regime of industrial conflict. Whether contracting out in the present case violated the agreement is the question. It is a question for the arbiter, not for the courts.
30
Reversed.
31
Mr. Justice FRANKFURTER concurs in the result.
32
Mr. Justice BLACK took no part in the consideration or decision of this case.
33
(For opinion of Mr. Justice BRENNAN, joined by Mr. Justice FRANKFURTER and Mr. Justice HARLAN, see 363 U.S. 569, 80 S.Ct. 1363.)
34
Mr. Justice WHITTAKER, dissenting.
35
Until today, I have understood it to be the unquestioned law, as this Court has consistently held, that arbitrators are private judges chosen by the parties to decide particular matters specifically submitted;1 that the contract under which matters are submitted to arbitrators is at once the source and limit of their authority and power;2 and that their power to decide issues with finality, thus ousting the normal functions of the courts, must rest upon a clear, definitive agreement of the parties, as such powers can never be implied. United States v. Moorman, 338 U.S. 457, 462, 70 S.Ct. 288, 291, 94 L.Ed. 256;3 Mercantile Trust Co. v. Hensey, 205 U.S. 298, 309, 27 S.Ct. 535, 539, 51 L.Ed. 811.4 See also Fernandez & Hnos. v. Rickert Rice Mills, 1 Cir., 119 F.2d 809, 815, 136 A.L.R. 351;5 Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386, 391;6 Continental Milling & Feed Co. v. Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450;7 Jacob v. Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067.8 I believe that the Court today departs from the established principles announced in these decisions.
36
Here, the employer operates a shop for the normal maintenance of its barges, but it is not equipped to make major repairs, and accordingly the employer has, from the beginning of its operations more than 19 years ago, contracted out its major repair work. During most, if not all, of this time the union has represented the employees in that unit. The District Court found that '(t) hroughout the successive labor agreements between these parties, including the present one, * * * (the union) has unsuccessfully sought to negotiate changes in the labor contracts, and particularly during the negotiation of the present labor agreement, * * * which would have limited the right of the (employer) to continue the practice of contracting out such work.' 168 F.Supp. 702, 704—705.
37
The labor agreement involved here provides for arbitration of disputes respecting the interpretation and application of the agreement and, arguably, also some other things. But the first paragraph of the arbitration section says: '(M)atters which are strictly a function of management shall not be subject to arbitration under this section.' Although acquiescing for 19 years in the employer's interpretation that contracting out work was 'strictly a function of management,' and having repeatedly tried particularly in the negotiation of the agreement involved here—but unsuccessfully, to induce the employer to agree to a covenant that would prohibit it from contracting out work, the union, after having agreed to and signed the contract involved, presented a 'grievance' on the ground that the employer's contracting out work, at a time when some employees in the unit were laid off for lack of work, constituted a partial 'lockout' of employees in violation of the antilockout provision of the agreement.
38
Being unable to persuade the employer to agree to cease contracting out work or to agree to arbitrate the 'grievance,' the union brought this action in the District Court, under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, 29 U.S.C.A. § 185, for a decree compelling the employer to submit the 'grievance' to arbitration. The District Court, holding that the contracting out of work was, and over a long course of dealings had been interpreted and understood by the parties to be, 'strictly a function of management,' and was therefore specifically excluded from arbitration by the terms of the contract, denied the relief prayed, 168 F.Supp. 702, 705. The Court of Appeals affirmed, 269 F.2d 633, and we granted certiorari. 361 U.S. 912, 80 S.Ct. 255, 4 L.Ed.2d 183.
39
The Court now reverses the judgment of the Court of Appeals. It holds that the arbitrator's source of law is 'not confined to the express provisions of the contract,' that arbitration should be ordered 'unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute,' that '(d)oubts (of arbitrability) should be resolved in favor of coverage,' and that when, as here, 'an absolute no-strike clause is included in the agreement, then * * * everything that management does is subject to (arbitration).' I understand the Court thus to hold that the arbitrators are not confined to the express provisions of the contract, that arbitration is to be ordered unless it may be said with positive assurance that arbitration of a particular dispute is excluded by the contract, that doubts of arbitrability are to be resolved in favor of arbitration, and that when, as here, the contract contains a no-strike clause, everything that management does is subject to arbitration.
40
This is an entirely new and strange doctrine to me. I suggest, with deference, that it departs from both the contract of the parties and the controlling decisions of this Court. I find nothing in the contract that purports to confer upon arbitrators any such general breadth of private judicial power. The Court cites no legislative or judicial authority that creates for or gives to arbitrators such broad general powers. And I respectfully submit that today's decision cannot be squared with the statement of Judge, later Mr. Justice, Cardozo in Marchant that 'No one is under a duty to resort to these conventional tribunals, however helpful their processes, except to the extent that he has signified his willingness. Our own favor or disfavor of the cause of arbitration is not to count as a factor in the appraisal of the thought of others.' (emphasis added), 252 N.Y., at page 299, 169 N.E., at page 391; nor with his statement in that case that '(t)he question is one of intention, to be ascertained by the same tests that are applied to contracts generally,' id.; nor with this Court's statement in Moorman, 'that the intention of the parties to submit their contractual disputes to final determination outside the courts should be made manifest by plain language' (emphasis added), 338 U.S., at page 462, 70 S.Ct. at page 291; nor with this Court's statement in Hensey that: 'To make such (an arbitrator's) certificate conclusive requires plain language in the contract. It is not to be implied.' (Emphasis added.) 205 U.S., at page 309, 27 S.Ct. at page 539. 'A party is never required to submit to arbitration any question which he has not agreed so to submit, and contracts providing for arbitration will be carefully construed in order not to force a party to submit to arbitration a question which he did not intend to be submitted.' (Emphasis added.) Fernandez & Hnos. v. Rickert Rice Mills, supra, 1 Cir., 119 F.2d at page 815.
41
With respect, I submit that there is nothing in the contract here to indicate that the employer 'signified (its) willingness' (Marchant, supra, 252 N.Y. at page 299, 169 N.E. at page 391) to submit to arbitrators whether it must cease contracting out work. Certainly no such intention is 'made manifest by plain language' (Moorman, supra, 338 U.S. at page 462, 70 S.Ct. at page 291), as the law 'requires,' because such consent 'is not to be implied.' Hensey, supra, 205 U.S. at page 309, 27 S.Ct. at page 539. To the contrary, the parties by their conduct over many years interpreted the contracting out of major repair work to be 'strictly a function of management,' and if, as the concurring opinion suggests, the words of the contract can 'be understood only by reference to the background which gave rise to their inclusion,' then the interpretation given by the parties over 19 years to the phrase 'matters which are strictly a function of management' should logically have some significance here. By their contract, the parties agreed that 'matters which are strictly a function of management shall not be subject to arbitration.' The union over the course of many years repeatedly tried to induce the employer to agree to a covenant prohibiting the contracting out of work, but was never successful. The union again made such an effort in negotiating the very contract involved here, and, failing of success, signed the contract, knowing, of course, that it did not contain any such covenant, but that, to the contrary, it contained, just as had the former contracts, a covenant that 'matters which are strictly a function of management shall not be subject to arbitration.' Does not this show that, instead of signifying a willingness to submit to arbitration the matter of whether the employer might continue to contract out work, the parties fairly agreed to exclude at least that matter from arbitration? Surely it cannot be said that the parties agreed to such a submission by any 'plain language.' Moorman, supra, 338 U.S. at page 462, 70 S.Ct. at page 291, and Hensey, supra, 205 U.S. at page 309, 27 S.Ct. at page 539. Does not then the Court's opinion compel the employer 'to submit to arbitration (a) question which (it) has not agreed so to submit'? Fernandez & Hnos., supra, 119 F.2d at page 815.
42
Surely the question whether a particular subject or class of subjects is or is not made arbitrable by a contract is a judicial question, and if, as the concurring opinion suggests, 'the court may conclude that (the contract) commits to arbitration any (subject or class of subjects).' it may likewise conclude that the contract does not commit such subject or class of subjects to arbitration, and '(w)ith that finding the court will have exhausted its function' no more nor less by denying arbitration than by ordering it. Here the District Court found, and the Court of Appeals approved its finding, that by the terms of the contract, as interpreted by the parties over 19 years, the contracting out of work was 'strictly a function of management' and 'not subject to arbitration.' That finding, I think, should be accepted here. Acceptance of it requires affirmance of the judgment.
43
I agree with the Court that courts have no proper concern with the 'merits' of claims which by contract the parties have agreed to submit to the exclusive jurisdiction of arbitrators. But the question is one of jurisdiction. Neither may entrench upon the jurisdiction of the other. The test is: Did the parties in their contract 'manifest by plain language' (Moorman, supra, 338 U.S. at page 462, 70 S.Ct. at page 291) their willingness to submit the issue in controversy to arbitrators? If they did, then the arbitrators have exclusive jurisdiction of it, and the courts, absent fraud or the like must respect that exclusive jurisdiction and cannot interfere. But if they did not, then the courts must exercise their jurisdiction, when properly invoked, to protect the citizen against the attempted use by arbitrators of pretended powers actually never conferred. That question always is, and from its very nature must be, a judicial one. Such was the question presented to the District Court and the Court of Appeals here. They found the jurisdictional facts, properly applied the settled law to those facts, and correctly decided the case. I would therefore affirm the judgment.
1
Section 301(a) of the Labor Management Relations Act, 1947, 61 Stat. 156, 29 U.S.C. § 185(a), 29 U.S.C.A. § 185(a), provides:
'Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this Act, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties.' See Textile Workers v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912.
2
Note 1, supra.
3
In § 8(d) of the National Labor Relations Act, as amended by the 1947 Act, 29 U.S.C. § 158(d), 29 U.S.C.A. § 158(d), Congress indeed provided that where there was a collective agreement for a fixed term the duty to bargain did not require either party 'to discuss or agree to any modification of the terms and conditions contained in' the contract. And see National Labor Relations Board v. Sands Mfg. Co., 306 U.S. 332, 59 S.Ct. 508, 83 L.Ed. 682.
4
Complete effectuation of the federal policy is achieved when the agreement contains both an arbitration provision for all unresolved grievances and an absolute prohibition of strikes, the arbitration agreement being the 'quid pro quo' for the agreement not to strike. Textile Workers v. Lincoln Mills, 353 U.S. 448, 455, 77 S.Ct. 912, 917.
5
'Contracts which ban strikes often provide for lifting the ban under certain conditons. Unconditional pledges against strikes are, however, somewhat more frequent than conditional ones. Where conditions are attached to no-strike pledges, one or both of two approaches may be used: certain subjects may be exempted from the scope of the pledge, or the pledge may be lifted after certain procedures are followed by the union. (Similar qualifications may be made in pledges against lockouts.)
'Most frequent conditions for lifting no-strike pledges are: (1) The occurrence of a deadlock in wage reopening negotiations; and (2) violation of the contract, especially non-compliance with the grievance procedure and failure to abide by an arbitration award.
'No-strike pledges may also be lifted after compliance with specified procedures. Some contracts permit the union to strike after the grievance procedure has been exhausted without a settlement, and where arbitration is not prescribed as the final recourse. Other contracts permit a strike if mediation efforts fail, or after a specified cooling-off period.' Collective Bargaining, Negotiations and Contracts, Bureau of National Affairs, Inc., 77:101.
6
Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1482, 1498—1499 (1959).
7
It is clear that under both the agreement in this case and that involved in American Manufacturing Co., 363 U.S. 564, 80 S.Ct. 1343, the question of arbitrability is for the courts to decide. Cf. Cox, Reflections Upon Labor Arbitration, 72 Harv.L.Rev. 1482, 1508—1509. Where the assertion by the claimant is that the parties excluded from court determination not merely the decision of the merits of the grievance but also the question of its arbitrability, vesting power to make both decisions in the arbitrator, the claimant must bear the burden of a clear demonstration of that purpose.
8
See Celanese Corp. of America, 33 Lab.Arb.Rep. 925, 941 (1959), where the arbiter in a grievance growing out of contracting out work said:
'In my research I have located 64 published decisions which have been concerned with this issue covering a wide range of factual situations but all of them with the common characteristic i.e., the contracting-out of work involved occurred under an Agreement that contained no provision that specifically mentioned contracting-out of work.'
1
'Arbitrators are judges chosen by the parties to decide the matters submitted to them.' Burchell v. Marsh, 17 How. 344, 349, 15 L.Ed. 96.
2
'The agreement under which (the arbitrators) were selected was at once the source and limit of their authority, and the award, to be binding, must, in substance and form, conform to the submission.' (Emphasis added.) Continental Ins. Co. v. Garrett, 6 Cir., 125 F. 589, 590—Opinion by Judge, later Mr. Justice, Lurton.
3
'It is true that the intention of parties to submit their contractual disputes to final determination outside the courts should be made manifest by plain language.' (Emphasis added.) United States Moorman, 338 U.S. 457, 462, 70 S.Ct. 288, 291, 94 L.Ed. 256.
4
'To make such (an arbitrator's) certificate conclusive requires plain language in the contract. It is not to be implied.' (Emphasis added.) Mercantile Trust Co. v. Hensey, 205 U.S. 298, 309, 27 S.Ct. 535, 539.
5
'A party is never required to submit to arbitration any question which he has not agreed so to submit, and contracts providing for arbitration will be carefully construed in order not to force a party to submit to arbitration a question which he did not intend to be submitted.' (Emphasis added.) Fernandez & Hnos. v. Rickert Rice Mills, 1 Cir., 119 F.2d 809, 815, 136 A.L.R. 351.
6
In this leading case, Judge, later Mr. Justice, Cardozo said:
'The question is one of intention, to be ascertained by the same tests that are applied to contracts generally. * * *. No one is under a duty to resort to these conventional tribunals, however helpful their processes, except to the extent that he has signified his willingness. Our own favor or disfavor of the cause of arbitration is not to count as a factor in the appraisal of the thought of others.' (Emphasis added.) Marchant v. Mead-Morrison Mfg. Co., 252 N.Y. 284, 299, 169 N.E. 386, 391.
7
In this case, the Court, after quoting Judge Cardozo's language in Marchant, supra, saying that 'the question is one of intention,' said:
'Sound policy demands that the terms of an arbitration agreement must not be strained to discover power to pass upon matters in dispute, but the terms must be clear and unmistakable to oust the jurisdiction of the court, for trial by jury cannot be taken away in any case merely by implication.' (Emphasis added.) Continental Milling & Feed Co. v. Doughnut Corp., 186 Md. 669, 676, 48 A.2d 447, 450.
8
'But, under any circumstances, before the decision of an arbitrator can be held final and conclusive, it must appear, as was said in Chandley Bros. v. Cambridge Springs, 200 Pa. 230, 49 Atl. 772, that power to pass upon the subject-matter is clearly given to him. 'The terms of the agreement are not to be strained to discover it. They must be clear and unmistakable to oust the jurisdiction of the courts; for trial by jury cannot by taken away by implication, merely, in any case." (Emphasis added.) Jacob v. Weisser, 207 Pa. 484, 489, 56 A. 1065, 1067.
| 67
|
363 U.S. 509
80 S.Ct. 1277
4 L.Ed.2d 1365
Robert AQUILINO and Joseph Spero, d/b/a Home Maintenance Company, and Colonial Sand and Stone Co., Inc., Petitioners,v.UNITED STATES of America, Ada Bottone, et al.
No. 1.
Argued Oct. 15, 1959.
Decided June 20, 1960.
Mr. Charles S. Friedman, Mount Vernon, for petitioners.
Mr. Howard A. Heffron, Washingon, D.C., for respondents.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
In this case we are asked to determine which of two competing claimants—the Federal Government by virtue of its tax lien, or certain petitioning subcontractors by virtue of their rights under Section 36—a of the New York Lien Law—is entitled to a sum of money owed under a general construction contract which was performed by the taxpayer.
2
The taxpayer, Fleetwood Paving Corporation, is a general contractor, which in July or August 1952, agreed to remodel a restaurant belonging to one Ada Bottone, herein referred to as the owner. The petitioners in August and September of that year entered into a subcontract with the taxpayer to supply labor and materials for the remodeling job. Shortly thereafter, the petitioners performed their obligations under the subcontract, but were not fully compensated by the contractor-taxpayer. Therefore on November 3, 1952, and on November 10, 1952, they filed notices of their mechanic's liens on the owner's realty in the office of the Clerk of Westchester County. In June 1953, they instituted actions in the New York Supreme Court to foreclose those liens.
3
By order of court, the owner was permitted to deposit with the Clerk of the court the $2,000 which she still owed under the original construction contract, and she was thereafter dismissed as a defendant in the action. The Government, having previously levied upon the owner's alleged indebtedness to the taxpayer, was permitted by the court to enter the case as a party defendant.
4
The Government asserted precedence over the claims of petitioners because of the following facts: The Director of Internal Revenue in December 1951 and March 1952 received assessment lists containing assessments against the taxpayer for unpaid federal withholding and social security taxes. On October 31, 1952, the Director filed a notice of federal tax liens in the office of the Clerk of the City of Mount Vernon, New York, which is the city wherein the taxpayer maintained its principal place of business. The Government claimed priority for its tax lien under Sections 3670 and 3671 of the Internal Revenue Code of 1939, 26 U.S.C.A. §§ 3670, 3671.1 The petitioners contended that since the contractor-taxpayer owed them more than $2,200 for labor and materials supplied to the job, under the New York Lien Law, Section 36—a,2 he had no property interest in the $2,200 which the owner still owed under the original remodeling contract.
5
The New York Supreme Court, Special Term, 140 N.Y.S.2d 355, granted petitioners' motion for summary judgment. The ground for the decision was that the Government's tax lien was ineffective since it had not been filed in the office designated by New York law for the filing of liens against realty. On appeal, the Appellate Division affirmed, but on the ground that there was no debt due from the owner to the taxpayer to which the Government's lien could attach, 2 A.D.2d 747, 153 N.Y.S.2d 268. The court reasoned that the fund deposited by the owner was a substitute for her realty to which the mechanic's liens had attached; and that since the Government had no lien on the owner's property, it could have no lien on the fund substituted for that property. On appeal, the New York Court of Appeals held that the tax lien had taken effect prior to the petitioners' claims. It therefore reversed the lower New York courts, and ruled that the motion of the United States for summary judgment, rather than that of petitioners, should have been granted by the Supreme Court, Special Term. 3 N.Y.2d 511, 169 N.Y.S.2d 9, 146 N.E.2d 774. We granted certiorari, 359 U.S. 904, 79 S.Ct. 577, 3 L.Ed.2d 570.
6
The threshold question in this case, as in all cases where the Federal Government asserts its tax lien, is whether and to what extent the taxpayer had 'property' or 'rights to property' to which the tax lien could attach. In answering that question, both federal and state courts must look to state law, for it has long been the rule that 'in the application of a federal revenue act, state law controls in determining the nature of the legal interest which the taxpayer had in the property * * * sought to be reached by the statute.'3 Morgan v. Commissioner, 309 U.S. 78, 82, 60 S.Ct. 424, 426, 84 L.Ed. 585. Thus, as we held only two Terms ago, Section 3670 'creates no property rights but merely attaches consequences, federally defined, to rights created under state law * * *.' United States v. Bess, 357 U.S. 51, 55, 78 S.Ct. 1054, 1057, 2 L.Ed.2d 1135.4 However, once the tax lien has attached to the taxpayer's state-created interests, we enter the province of federal law, which we have consistently held determines the priority of competing liens asserted against the taxpayer's 'property' or 'rights to property.'5 United States v. Vorreiter, 355 U.S. 15, 78 S.Ct. 19, 2 L.Ed.2d 23, reversing 134 Colo. 543, 307 P.2d 475; United States v. White Bear Brewing Co., 350 U.S. 1010, 76 S.Ct. 646, 100 L.Ed. 871, reversing 7 Cir., 227 F.2d 359; United States v. Colotta, 350 U.S. 808, 76 S.Ct. 82, 100 L.Ed. 725, reversing 224 Miss. 33, 79 So.2d 474, 86 So.2d 19; United States v. Scovil, 348 U.S. 218, 75 S.Ct. 244, 99 L.Ed. 271; United States v. Liverpool & London & Globe Ins. Co., 348 U.S. 215, 75 S.Ct. 247, 99 L.Ed. 268; United States v. Acri, 348 U.S. 211, 75 S.Ct. 239, 99 L.Ed. 264; United States v. City of New Britain, 347 U.S. 81, 74 S.Ct. 367, 98 L.Ed. 520; United States v. Gilbert Associates, 345 U.S. 361, 73 S.Ct. 701, 97 L.Ed. 1071; United States v. Security Trust & Sav. Bank, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53; People of State of Illinois ex rel. Gordon v. Campbell, 329 U.S. 362, 67 S.Ct. 340, 91 L.Ed. 348; United States v. Waddill, Holland & Flinn, Inc., 323 U.S. 353, 65 S.Ct. 304, 89 L.Ed. 294. The application of state law in ascertaining the taxpayer's property rights and of federal law in reconciling the claims of competing lienors is based both upon logic and sound legal principles. This approach strikes a proper balance between the legitimate and traditional interest which the State has in creating and defining the property interest of its citizens, and the necessity for a uniform administration of the federal revenue statutes.
7
Petitioners contend that the New York Court of Appeals did not make its determination in the light of these settled principles. Relying upon the express language of Section 36—a of the Lien Law and upon a number of lower New York court decisions interpreting that statute, petitioners conclude that the money actually received by the contractor-taxpayer and his right to collect amounts still due under the construction contract constitute a direct trust for the benefit of subcontractors, and that the only property rights which the contractor-taxpayer has in the trust are bare legal title to any money actually received and a beneficial interest in so must of the trust proceeds as remain after the claims of subcontractors have been settled. The Government, on the other hand, claims that Section 36—a merely gives the subcontractors an ordinary lien, and that the contractor-taxpayer's property rights encompass the entire indebtedness of the owner under the construction contract.
8
This conflict should not be resolved by this Court, buy by the highest court of the State of New York. We cannot say from the opinion of the Court of Appeals that it has been satisfactorily resolved.6 We find no discussion in the court's opinion to indicate the nature of the property rights possessed by the taxpayer under state law. Nor is the application to be made of federal law clearly defined. We believe that it is in the interests of all concerned to have these questions decided by the state courts of New York. We therefore vacate the judgment of the Court of Appeals, and remand the case to that court so that it may ascertain the property interests of the taxpayer under state law and then dispose of the case according to established principles of law.
9
Vacated and remanded.
10
Mr. Justice HARLAN, dissenting in Nos. 1 and 23.*
11
I am unable to subscribe to the reasoning which underlies the Court's disposition of these cases. By holding that they both turn on whether the taxpayer had 'property' under state law to which the Government's lien could attach, the Court has sanctioned a result consistently prohibited by us in a line of cases dealing with the priority of federal tax liens.1
12
In both cases, the delinquent taxpayer is a defaulting general contractor whose subcontractors remain unpaid. The Government's lien is asserted against the chose in action which the general contractor allegedly holds against the owner of the real estate on which the improvements were made, in respect of amounts due from the owner under the construction contract. If the subcontractors had sought to enforce their claims by imposing a lien on that chose in action, there is no question that the Government's lien would prevail. Under the decisions of this Court cited in note 1, supra, a federal tax lien asserted against a taxpayer's property under §§ 3670 and 3671 of the Internal Revenue Code of 1939, 26 U.S.C.A. §§ 3670, 36712 prevails over all other claims against such property except (1) those which attach and become 'choate' before the federal lien attaches, and (2) those specifically protected by § 3672(a), 26 U.S.C.A. § 3672(a).3 It is conceded that the interests of the subcontractors in the present cases are not protected by § 3672(a) and would not be considered choate under the applicable decisions. See United States v. Kings County Iron Works, 2 Cir., 1955, 224 F.2d 232.
13
The Court believes, however, that the present cases are different, because under state law, the general contractor in Aquilino held his claim against the owner in trust for the subcontractors to the extent of their claims, and because the subcontractors in Durham Lumber were given, to the extent of their claims, a direct right of action against the owner in respect of his debt to the general contractor, and that in these circumstances the rights of the subcontractors in the owner's debt are superior to those of the general contractor. It is said that, to the extent of the subcontractors' claims, the general contractor, under state law, thus had no 'property' interest in the amounts due him from the owner, and that under the principles enunciated in United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135, a federal tax lien can attach only to a property interest which exists under state law.
14
I cannot see how it makes any difference, for purposes of the federal tax-lien statute, whether state law purports to prefer subcontractors over the general contractor and parties claiming through him by giving the subcontractors a lien on the general contractor's right of action against the owner or by giving them a prior right to collect the debt itself. In both instances, the owner is under a contractual duty to pay the general contractor and the latter is under a contractual duty to pay the subcontractors. In both instances, the subcontractors are attempting to satisfy their claims against the general contractor. And in both instances, they are seeking to satisfy themselves by claiming precisely the same thing—a prior right in the proceeds of the debt which arises by virtue of the contractual relationship between the owner and the general contractor.4 In neither instance can the subcontractors collect more than that to which the subcontract entitles them, and in neither can the owner be required to pay more than that to which the main contract obligates him. If federal law requires that subordination of the general contractor's interest be ignored in the one instance, it does so equally in the other.
15
The Bess case does not require a contrary conclusion. That case held only that while a federal tax lien attached to the cash surrender value of a life insurance policy owned by the taxpayer, it did not attach to the proceeds paid on his death, because under state law he had no right to such proceeds during his life. There was no reason under those circumstances why state property concepts should not control. To read that case as standing for the proposition that such concepts must also be controlling in cases such as these defeats the rule that '(t)he relative priority of the lien of the United States for unpaid taxes is * * * always a federal question to be determined finally by the federal courts.' United States v. Acri, 348 U.S. 211, 213, 75 S.Ct. 239, 241, 99 L.Ed. 264. It is one thing to say, as the Court did in Bess, that the federal interest in uniform application of federal tax liens does not require, as a general rule, that state property concepts be disregarded. It is quite another to permit such concepts to control the extent of a federal lien's application in situations indistinguishable from those where the Court has in fact, rightly or wrongly, enforced a uniform federal rule. Given federal supremacy in this field, it surely cannot be that the federal courts may not appraise for themselves the true impact of state-created rights upon the priority of federal tax liens within the criteria established by this Court. Cf. Carpenter v. Shaw, 280 U.S. 363, 367, 50 S.Ct. 121, 122, 74 L.Ed. 478; City of Detroit v. Murray Corporation, 355 U.S. 489, 492, 78 S.Ct. 458, 460, 2 L.Ed.2d 441. To recognize the substantial equivalence of the situations is not to create a new rule of federal property law but to require an evenhanded application of an already established one. It seems to me that Judge Fuld of the New York Court of Appeals was quite right in holding in the Aquilino case that New York could not, consistently with the past decisions of our Court, defeat the otherwise superior federal lien upon the owner's debt to the general contractor by converting the debt into a trust for the benefit of the subcontractor.5
16
To read Bess as the Court does can only lead to confusion in the administration of the federal tax-lien statute. A taxpayer's property in a debt is surely diminished by the imposition of a lien on his interest, for he has no right to collect the liened portion nor to alienate it. Yet in precisely this situation, we have held that the federal tax lien is not affected by such diminution. United States v. Liverpool & London Globe Ins. Co., 348 U.S. 215. 75 S.Ct. 247, 99 L.Ed. 268. If this holding is to be preserved after today's decision, subsequent cases must turn on the elusive distinction between diminishing a greater property interest and initially conferring a lesser one.6 The very difficulty which this Court experiences in trying to determine whether under New York law the general contractor really holds only a bare legal title in trust for the subcontractors or has full ownership of the debt subject to a lien in favor of the subcontractors demonstrates the futility of attempting to draw such distinctions for federal purposes. I venture to suggest that on remand, the Court of Appeals can with equal facility label the subcontractors' interests 'property' or a 'lien,' the relevant incidents of the relationship being the same in either case. Why should not that court and the legislatures of other States readily respond in choosing the former alternative?
17
I would affirm the judgment in No. 1, and would reverse in No. 23 on the ground that North Carolina can under no circumstances accord subcontractors a right in the proceeds of the debt arising from the construction contract superior to the Government's lien without satisfying one of the two requirements laid down by federal law. If the federal standard of choateness is thought to be an undesirable restriction on the States' freedom to regulate property relationships, the cases establishing that standard should be expressly overruled and not emasculated by dubious distinctions.
18
Mr. Justice BLACK, while adhering to the dissenting views expressed by him in Commissioner of Internal Revenue v. Stern, 357 U.S. 39, 47, 78 S.Ct. 1047, 1052, 2 L.Ed.2d 1126, and United States v. Bess, 357 U.S. 51, 59, 78 S.Ct. 1054, 1059, 2 L.Ed.2d 1135, concurs in this opinion.
1
Section 3670:
'If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, penalty, additional amount, or addition to such tax, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.'
Section 3671:
'Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list was received by the collector and shall continue until the liability for such amount is satisfied or becomes unenforceable by reason of lapse of time.'
These provisions also appear in the 1954 Code. Int.Rev.Code of 1954, §§ 6321, 6322, 26 U.S.C.A. §§ 6321, 6322.
2
McKinney's N.Y. Laws, Lien Law (1958 Supp.), § 36—a, provides as follows:
'The funds received by a contractor from an owner for the improvement of real property are hereby declared to constitute trust funds in the hands of such contractor to be applied first to the payment of claims of subcontractors, architects, engineers, surveyors, laborers and materialmen arising out of the improvement, and to the payment of premiums on surety bond or bonds filed and premiums on insurance accuring during the making of the improvement and any contractor and any officer, director or agent of any contractor who applies or consents to the application of such funds for any other purpose and fails to pay the claims hereinbefore mentioned is guilty of larceny and punishable as provided in section thirteen hundred and two of the penal law. Such trust may be enforced by civil action maintained as provided in article three-a of this chapter by any person entitled to share in the fund, whether or not he shall have filed, or had the right to file, a notice of lien or shall have recovered a judgment for a claim arising out of the improvement. For the purpose of a civil action only, the trust funds shall include the right of action upon an obligation for moneys due or to become due to a contractor, as well as moneys actually received by him.'
Section 36—a was repealed on September 1, 1959. N.Y.Laws 1959, c. 696, § 14. The subject matter covered by § 36—a is now included in McKinney's N.Y.Consol. Laws, Lien Law (1959 Supp.), c. 33, §§ 70, 71.
3
It is suggested that the definition of the taxpayer's property interests should be governed by federal law, although supplying the content of this nebulous body of federal law would apparently be left for future decisions. We think that this approach is unsound because it ignores the long-established role that the States have played in creating property interests and places upon the courts the task of attempting to ascertain a taxpayer's property rights under an undefined rule of federal law. It would indeed be anomalous to say that the taxpayer's 'property and rights to property' included property in which, under the relevant state law, he had no property interest at all.
4
It is said that because of the unique circumstances which existed in Bess, that case does not control here. However, aside from the fact that Bess involved proceeds payable under an insurance policy, whereas this case involves proceeds payable under a construction contract, it is apparent that the relevant circumstances of the two cases are essentially identical. In both cases the Government was attempting to assert its tax lien against what it thought to be the 'property and rights to property' of the taxpayer. In both cases an adverse party claimed the right to the property in question on the theory that the taxpayer had never acquired a state-created property interest to which the Government's tax lien could attach. Finally, in both cases, the Government attempted to characterize the problem as one involving a conflict between competing claimants to be settled solely by the application of federal law.
Bess held that state law determines the property interests of a taxpayer in the cash surrender value of an insurance policy, as well as in the proceeds payable upon death. The same considerations which led to our conclusion in Bess require that we look to state law in determining the general contractor's property interests in this case.
5
It is suggested that the rule announced by Bess and applied in this case is inconsistent with the mandate that federal law governs the relative priority of federal tax liens and state-created liens. However, we fail to perceive wherein lies the inconsistency. It is one thing to say that a taxpayer's property rights have been and should be created by state law. It is quite another thing to declare that in the interest of efficient tax administration one must look to federal law to resolve the conflict between competing claimants of the taxpayer's state-created property interests.
6
Subsequent to the Court of Appeals' decision in the instant case, and after this Court's decision in United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135, the New York Court of Appeals decided the case of In re City of New York, 5 N.Y.2d 300, 184 N.Y.S.2d 585, 157 N.E.2d 587, on petition for a writ of certiorari sub nom. United States v. Coblentz, 363 U.S. 841, 80 S.Ct. 1606. The Coblentz case is not authority for the disposition of the instant case. The latter involves a determination of property rights under § 36—a of the New York Lien Law, whereas the Coblentz case was concerned with the taxpayer's property interests under an assignment contract, § 475 of the New York Judiciary Law, McKinney's Consol.Laws, c. 30 and § B15—37.0 of the New York City Administrative Code.
*
(No. 23 is United States v. Durham Lumber Co. et al., 363 U.S. 522, 80 S.Ct. 1282.)
1
United States v. Security Trust & Savings Bank, 1950, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53; United States v. City of New Britain, 1954, 347 U.S. 81, 74 S.Ct. 367, 98 L.Ed. 520; United States v. Acri, 1955, 348 U.S. 211, 75 S.Ct. 239, 99 L.Ed. 264; United States v. Liverpool & London Globe Ins. Co., Ltd., 1955, 348 U.S. 215, 75 S.Ct. 247, 99 L.Ed. 268; United States v. Scovil, 1955, 348 U.S. 218, 75 S.Ct. 244, 99 L.Ed. 271; United States v. Colotta, 1955, 350 U.S. 808, 76 S.Ct. 82, 100 L.Ed. 725; United States v. White Bear Brewing Co., 1956, 350 U.S. 1010, 76 S.Ct. 646, 100 L.Ed. 871; United States v. Vorreiter, 1957, 355 U.S. 15, 78 S.Ct. 19, 2 L.Ed.2d 23; United States v. R. F. Ball Construction Co., Inc., 1958, 355 U.S. 587, 78 S.Ct. 442, 2 L.Ed.2d 510; United States v. Hulley, 1958, 358 U.S. 66, 79 S.Ct. 117, 3 L.Ed.2d 106.
2
The text of these sections, applicable in the Aquilino case, are set forth in note 1 of the Court's opinion in No. 1, 363 U.S. at page 511, 80 S.Ct. at page 1279. The comparable provisions of the Internal Revenue Code of 1954, §§ 6321 and 6322, applicable in the Durham Lumber case, are printed in notes 1 and 2 of the Court's opinion in No. 23, 363 U.S. at page 524, 80 S.Ct. at page 1283.
3
That section, as amended, provides: 'Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector * * *.' 53 Stat. 882. The comparable provision of the Internal Revenue Code of 1954 is § 6323(a).
4
It is noteworthy that the North Carolina law involved in the Durham Lumber case requires the general contractor to furnish the owner with a statement of subcontractors' claims 'before receiving any part of the contract price, as it may become due,' and that it is thereafter the duty of the owner to retain an appropriate amount 'from the money then due the contractor.' N.C.Gen.Stat.1950, § 44—8. (Emphasis added.) Although this section indicates that the general contractor has no right to collect the proceeds of the main contract until the statutory conditions are satisfied, it obviously recognizes the owner's contractual obligation as the real basis of the transaction and the source of the subcontractors' rights. The subcontractors' claims are thus not akin to liens on the owner's real estate, as this Court suggests, but are asserted solely in respect of the monetary claim held by the general contractor against the owner.
5
'It is, by now, exceedingly well settled that no state-created rule may defeat the paramount right of the United States to levy and collect taxes uniformly throughout the land. See United States v. Vorreiter, 355 U.S. 15, 78 S.Ct. 19, reversing 134 Colo. 543, 307 P.2d 475; United States v. White Bear Brewing Co., 350 U.S. 1010, 76 S.Ct. 646, 100 L.Ed. 871, reversing 7 Cir., 227 F.2d 359; United States v. Colotta, supra, 350 U.S. 808, 76 S.Ct. 82, reversing 7 Cir., 224 Miss. 33, 79 So.2d 474; United States v. Scovil, supra, 348 U.S. 218, 220—221, 75 S.Ct. 244; United States v. City of New Britain, supra, 347 U.S. 81, 84 87, 74 S.Ct. 367; United States v. Kings County Iron Works, supra, 224 F.2d 232, 237. That being so, it follows that the provision in this state's Lien Law, to which respondents point—that funds received by a contractor from the owner for the improvement of real property shall be deemed 'trust funds' for the payment of subcontractors (§ 36—a; § 13, subd. (7))—may not be construed to affect the rights of the government or the priority of its tax lien.' 3 N.Y.2d, at page 516, 169 N.Y.S.2d at page 14, 146 N.E.2d, at pages 777—778.
6
It will not do to distinguish the present type of case from the lien-priority cases on the ground that in the latter cases the taxpayer remains the owner in a very real sense and can continue to enjoy the property if he discharges the debt it secures. In both instances, the taxpayer is temporarily deprived of certain incidents of ownership as a device for securing the payment of a debt, and is restored to the full enjoyment of the property only when the debt is discharged. And it is illusory to say that ownership of a debt which can be neither collected nor alienated is any more 'real' than the ownership of no debt at all. Whether the diminution of the taxpayer's interest is sufficiently definite and complete to conclude the federal lien is precisely the question on which this Court has held federal law must control. It is admitted that, if the federal standard of 'choateness' developed by this Court in the lien-priority cases is applied, the incidents of ownership retained by the taxpayers here must in fact be deemed greater than those retained by taxpayers in cases where state-created liens imposed on their interests have prevailed over the Government's lien.
| 1112
|
363 U.S. 528
80 S.Ct. 1326
4 L.Ed.2d 1379
BROTHERHOOD OF LOCOMOTIVE ENGINEERS et al., Petitioners,v.MISSOURI-KANSAS-TEXAS R. CO. et al.
No. 165.
Argued April 20, 1960.
Decided June 20, 1960.
Mr. Harold C. Heiss, Cleveland, Ohio, for petitioners.
Mr. Monroe E. Clinton, Dallas, Tex., for respondents.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
This case presents a question concerning the jurisdiction of a Federal District Court to impose certain conditions upon a strike injunction issued in a railway labor dispute.
2
The essential facts are not complicated. The respondent Railroads operate a 302-mile branch between Wichita Falls, Texas, and Forgan, Oklahoma. The line was originally operated with steam locomotives capable of only short runs, and this necessitated the stationing of five way-freight crews along the route. After longer-range diesel locomotives were purchased to replace the steam equipment, the Railroads issued general orders which doubled the length of the way-freight runs, thereby eliminating the jobs of two of the five way-freight crews and changing the home or away-from-home terminals of the remaining crews.
3
The petitioner Brotherhoods, representing the engineers, firemen, conductors and brakemen affected, protested the issuance of the orders and invoked the services of the National Mediation Board. Nonetheless, the Railroads put the change into effect. After the Board advised the parties that it did not consider the dispute one subject to mediation, the unions called a strike. On the same day the Railroads filed a complaint for injunctive relief in the Federal District Court and obtained a temporary restraining order. The Railroads then submitted the dispute to the National Railroad Adjustment Board, to National Committees and Disputes Committees established by the collective bargaining agreements, and to the National Mediation Board. They amended their complaint in the District Court to allege the various submissions.
4
After a hearing, the District Court granted the injunction pending decision by the Adjustment Board, but it did so upon certain conditions which are the subject of the controversy before us. These conditions required that the Railroads either (1) restore the situation which existed prior to the General Orders, or (2) pay the employees adversely affected by the orders, the wages they would have received had the orders not been issued.
5
Both sides appealed, the unions from the injunction against the strike, and the Railroads from the conditions requiring preservation of the status quo. The Court of Appelas sustained the injunction but vacated the conditions, holding that the District Court had no power to attach them. 266 F.2d 335. In so holding, the Court of Appeals reasoned that imposition of conditions of this character involved a preliminary judgment on the merits of a 'minor dispute,' the resolution of which is committed by the Railway Labor Act, § 3(i), 48 Stat. 1189, 45 U.S.C. § 153, 45 U.S.C.A. § 153, subd. 1(i), to the exclusive jurisdiction of the Adjustment Board. The question of a district judge's jurisdiction to impose this type of condition upon an injunction issued to preserve the Adjustment Board's jurisdiction is both recurring and important in the field of labor-management relations. Consequently, we granted certiorari, but limited the grant to this issue.1
6
This Court held in Brotherhood of Railroad Trainmen v. Chicago River & Ind. R. Co., 353 U.S. 30, 77 S.Ct. 635, 1 L.Ed.2d 622, that a Federal District Court may enjoin strikes arising out of 'minor disputes'—generally speaking, disputes relating to construction of a contract2—when they have been properly submitted to the National Railroad Adjustment Board. We concluded that such an injunction does not fall within the prohibitions of the Norris-LaGuardia Act, 29 U.S.C. § 101 et seq., 29 U.S.C.A. § 101 et seq., because of the superseding purpose of the Railway Labor Act to establish a system of compulsory arbitration for this type of dispute, a purpose which might be frustrated if strikes could not be enjoined during the consideration of such a dispute by the Board. This case presents a further question as to nature of the relief which may be granted under the Chicago River rule specifically, whether the injunction granted the Railroad may be qualified by conditions imposed by the District Court under traditional equitable considerations.3
7
If the District Court is free to exercise the typical powers of a court of equity, it has the power to impose conditions requiring maintenance of the status quo. Conditions of this nature traditionally may be made the price of relief when the injunctive powers of the court are invoked and the conditions are necessary to do justice between the parties.4 'The award of an interlocutory injunction by courts of equity has never been regarded as strictly a matter of right, even though irreparable injury may otherwise result to the plaintiff. * * * (The court) will avoid * * * injury so far as may be, by attaching conditions to the award * * *.' Yakus v. United States, 321 U.S. 414, 440, 64 S.Ct. 660, 674, 88 L.Ed. 834. '(I)t is the duty of a court of equity granting injunctive relief to do so upon conditions that will protect all * * * whose interests the injunction may affect.' Inland Steel Co. v. United States, 306 U.S. 153, 157, 59 S.Ct. 415, 417, 83 L.Ed. 557. Since the power to condition relief is essential to ensure that extraordinary equitable remedies will not become the engines of injustice, it would require the clearest legislative direction to justify the truncation of that power.
8
Such direction, if it exists, presumably must be derived from the Railway Labor Act itself, and since that Act contains no express provisions circumscribing the equitable powers of the court, such limitations, if any, must be created by clear implication.
9
The Court of Appeals found the limiting legislative direction in the provision of the Railway Labor Act granting exclusive primary jurisdiction over 'minor disputes' to the National Railroad Adjustment Board. Its theory was that the conditions imposed by the District Court constituted a preliminary decision on the merits of the parties' dispute and therefore encroached upon the jurisdiction of the Board.
10
It is true that the federal courts ought not act in such a way as to infringe upon the jurisdiction of the Board, Order of Ry. Conductors of America v. Pitney, 326 U.S. 561, 66 S.Ct. 322, 90 L.Ed. 318. But neither this principle nor the Pitney case itself leads us to the Court of Appeals' conclusion.
11
In Pitney, we held that the District Court in exercise of its equity powers ancillary to its jurisdiction as a railroad reorganization court under 11 U.S.C. § 205, 11 U.S.C.A. § 205, should not have granted a permanent injunction finally determining the merits of a dispute which was within the jurisdiction of the Board, but that, instead, it should have withheld such relief pending a determination by the Board.
12
In the case at bar, however, there was no determination of the merits of the dispute by the District Court. Nothing in the record of the proceedings in the District Court suggests that any view on the merits was considered. Instead, the record affirmatively discloses that the district judge was quite aware that it was not his function to construe the contractual provisions upon which the parties relied for their respective positions on the merits. In sum, the judge was scrupulous to avoid encroaching upon the jurisdiction of the Board.5
13
The Court of Appeals apparently concluded that a decision on the merits was inherent in the very conditioning of the injunction. It is true that a District Court must make some examination of the nature of the dispute before conditioning relief since not all disputes coming before the Adjustment Board threaten irreparable injury and justify the attachment of a condition. To fulfill its function the District Court must also consider the hardships, if any, that would arise if the employees were required to await the Board's sometimes long-delayed decisions without recourse to a strike. But this examination of the nature of the dispute is so unlike that which the Adjustment Board will make of the merits of the same dispute, and is for such a dissimilar purpose, that it could not interfere with the labor consideration of the grievance by the Adjustment Board.
14
Moreover, such an examination is inherent in the grant of the injunction itself. Yet it is settled, since Chicago River, that an injunction may issue to preserve the Board's jurisdiction. We think that, in logic, we must hold that the conditions are proper also, at least where they are designed not only to promote the interests of justice, but also to preserve the jurisdiction of the Board.
15
It is not difficult to perceive how the conditions imposed in this case could be deemed to serve to protect the jurisdiction of the Board. The dispute out of which the judicial controversy arose does not merely concern rates of pay or job assignments, but rather involves the discharge of employees from positions long held and the dislocation of others from their homes. From the point of view of these employees, the critical point in the dispute may be when the change is made, for, by the time of the frequently long-delayed Board decision, it might well be impossible to make them whole in any realistic sense. If this be so, the action of the district judge, rather than defeating the Board's jurisdiction, would operate to preserve that jurisdiction by preventing injury so irreparable that a decision of the Board in the union's favor would be but an empty victory.
16
It is true that preventing the Railroad from instituting the change imposed upon it the burden of maintaining what may be a less efficient and more costly operation. The balancing of these competing claims of irreparable hardship is, however, the traditional function of the equity court, the exercise of which is reviewable only for abuse of discretion. And although respondents maintain that there has been such an abuse in ths case, scrutiny of the record does not persuade us that the evidence was insufficient to support the judge's action.
17
The judgment of the Court of Appeals is reversed.
18
Reversed.
19
Mr. Justice HARLAN and Mr. Justice STEWART, while agreeing with the Court that the District Court had power to condition the issuance of the injunction, would vacate the judgment of the Court of Appeals and remand the case to that court for consideration of respondents' contention that the District Court's action involved an abuse of discretion.
1
The order granting certiorari limits our review to the following question:
'Whether a district court under circumstances where a dispute arising under the Railway Labor Act has been submitted by a railroad to the National Railroad Adjustment Board and an injunction against a strike by employees is sought on authority of Brotherhood of Railroad Trainmen v. Chicago River and Ind. R.R. Co., 353 U.S. 30, 77 S.Ct. 635, 1 L.Ed.2d 622, may on the granting of an injunction impose reasonable conditions designed to protect the employees against a harmful change in working conditions during pendency of the dispute before the Adjustment Board by ordering that the railroad restore the status quo, or, in the alternative, pay the employees the amount they would have been paid had changes in working conditions giving rise to the dispute not been made.' 361 U.S. 810, 80 S.Ct. 67, 4 L.Ed.2d 59.
2
See Elgin, J. & E.R. Co. v. Burley, 325 U.S. 711, 723, 65 S.Ct. 1282, 1289, 89 L.Ed. 1886; Brotherhood of Railroad Trainmen v. Chicago River & Ind. R. Co., 353 U.S. 30, 33—34, 77 S.Ct. 635, 636—637, 1 L.Ed.2d 622.
3
We did not decide in Chicago River, and we do not decide here, whether a federal court can, during the pendency of a dispute before the Board, enjoin a carrier from effectuating the changes which gave rise to and constitute the subject matter of the dispute, independently of any suit by the railroad for equitable relief. As we read the order of the District Court, this case does not involve independent relief for the union.
4
See 2 Pomeroy, Equity Jurisprudence, 51, 57—59 (5th ed. 1941); 1 Story, Equity Jurisprudence, §§ 69—76 (14th ed. 1918); Central Kentucky Natural Gas Co. v. Railroad Comm., 290 U.S. 264, 271, 54 S.Ct. 154, 157, 78 L.Ed. 307.
5
The judge said at one stage of the proceeding,
'Now, let us see where we are. There is a contract. We have not analyzed the contract because it is useless for us to analyze is because regardless of what conclusion we reach about the provisions of that contract we have no right to enforce its provisions or deny its provisions. Those conditions can be determined first only by the Railroad Adjustment Act, * * *.
'This Court is without power to construe that contract, which the defendants claim has been broken by the company.' R. 316—317.
| 67
|
364 U.S. 177
80 S.Ct. 1482
4 L.Ed.2d 1650
Leon WOLFE, George Simkins, Jr., et al., Appellants,v.STATE OF NORTH CAROLINA.
No. 7.
Argued Oct. 19 and 20, 1959.
Decided June 27, 1960.
Mr. J. Alston Atkins, for petitioners.
Mr. Ralph Moody, Raleigh, N.C., for appellee.
Mr. Justice STEWART delivered the opinion of the Court.
1
The appellants were convicted of violating a North Carolina criminal trespass statute,1 and their convictions were upheld by the Supreme Court of North Carolina, 248 N.C. 485, 103 S.E.2d 846. This appeal, grounded on 28 U.S.C. § 1257(2), 28 U.S.C.A. § 1257(2),2 attacks the constitutional validity of the statute as applied in this case. Because of doubt as to whether any substantial federal question was presented to or decided by the state courts, we postponed further consideration of the question of jurisdiction until the hearing of the case on the merits. 358 U.S. 925, 79 S.Ct. 312, 3 L.Ed.2d 299; 359 U.S. 951, 79 S.Ct. 737, 3 L.Ed.2d 759. For reasons to be stated, we have concluded that the appeal must be dismissed.3
2
There is no dispute as to the basic circumstances which led to the prosecution and ultimate conviction of the appellants. In December, 1955, Gillespie Park Golf Club, Inc., operated an 18-hole golf course on land which it leased from the City of Greensboro, North Carolina, and the Board of Trustees of the Greensboro City Administrative Unit. The bylaws of the lessee limited the use of the golf course to its 'members' and persons in certain other specifically restricted categories.4 On December 7, 1955, the appellants, who are Negroes, entered the club's golf shop and requested permission to play on the course. Their request was refused. Nevertheless, after placing some money on a table in the golf shop, the appellants proceeded to the course and teed off. After they had played several holes the manager of the golf course ordered them to leave. They refused. The manager then summoned a deputy sheriff, and, after the appellants were again ordered to leave the course and they had again refused, they were arrested upon warrants sworn to by the manager.
3
The appellants were tried and convicted of violating the state criminal trespass statute. Pending their appeal to the Supreme Court of North Carolina they and others commenced an action against the City of Greensboro, the Greensboro Board of Education, and the Gillespie Park Golf Club, Inc., in the Federal District Court for the Middle District of North Carolina, asking for a declaratory judgment and an injunction forbidding the defendants from operating the golf course on a racially discriminatory basis. The federal court granted the injunction. Simkins v. City of Greensboro, D.C., 149 F.Supp. 562. Its judgment was affirmed by the Court of Appeals for the Fourth Circuit on June 28, 1957. City of Greensboro v. Simkins, 246 F.2d 425. On the same date the Supreme Court of North Carolina, acting on the appeal from the criminal convictions in the state court, held that there had been a fatal variance in amendments to the warrants under which the appellants had been tried, and arrested the judgments against them. State v. Cooke, 246 N.C. 518, 98 S.E.2d 885.
4
The appellants were again tried de novo in the Superior Court of Guilford County, North Carolina, for violating the state criminal trespass statute. At the outset they made a motion to quash, which was denied. The State presented evidence as to what had happened on the golf course on December 7, 1955. At the conclusion of the evidence the trial judge instructed the jury explicitly and at length that the defendants could not be convicted if they had been excluded from the golf course because of their race. Specifically, the trial judge charged the jury that '* * * the law would not permit the City and, therefore, would not permit its lessee, the Gillespie Park Golf Club, Inc., to discriminate against any citizen of Greensboro in the maintenance and operation and use of a golf course. It could not exclude either defendant because of his race or for any other reason applicable to them alone; that is to say, they were entitled to the same rights to use the golf course as any other citizen of Greensboro would be provided they complied with the reasonable rules and regulations for the operation and maintenance and use of the golf course. They would not be required to comply with any unreasonable rules and regulations for the operation and maintenance and use of the golf course.'5 The jury returned a verdict of guilty. A motion to set aside the verdict was denied.
5
The Supreme Court of North Carolina affirmed the convictions. In doing so the court recognized that '(s)ince the operator of the golf club was charged with making a public or semipublic use of the property, it could not deny the use of the property to citizens simply because they were Negroes. * * * Since the decision in Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873, separation of the races in the use of public property cannot be required.' 248 N.C., at page 491, 103 S.E.2d 850—851. The court quoted with approval the trial judge's instructions to the jury on this aspect of the case. It is from this judgment of the Supreme Court of North Carolina that the present appeal was taken.
6
The appellants contend that the Supremacy Clause, U.S.Const. art. 6 and the Fourteenth Amendment required the North Carolina Court to hold that the findings of fact and judgment of the federal court in the civil case of Simkins v. City of Greensboro, D.C., 149 F.Supp. 562, conclusively established, contrary to the verdict of the jury in this case, that the state statute was used here to enforce a practice of racial discrimination by a state agency. The Supreme Court of North Carolina took cognizance of the federal court's published opinion in the Simkins case and commented with respect to it:
7
'Examining the opinion, it appears that ten people, six of whom are defendants in this action, sought injunctive relief on the assertion that Negroes were discriminated against and were not permitted to play on what is probably the property involved in this case. We do not know what evidence plaintiffs produced in that action. It is, however, apparent from the opinion that much evidence was presented to Judge Hayes (in the Federal District Court) which was not before the Superior Court when defendants were tried. It would appear from the opinion that the entry involved in this case was one incident on which plaintiffs there relied to support their assertion of unlawful discrimination, but it is manifest from the opinion that that was not all of the evidence which Judge Hayes had. We are left in the dark as to other incidents happening prior or subsequent to the conduct here complained of, which might tend to support the assertion of unlawful discrimination. On the facts presented to him, Judge Hayes issued an order enjoining racial discrimination in the use of the golf course. Presumably that order has and is being complied with. No assertion is here made to the contrary.' 248 N.C., at page 493, 103 S.E.2d at page 852.
8
The North Carolina court did not decide, however, whether it was bound under the Constitution to give to the federal court's unpublished findings and judgment in the prior civil action the conclusive effect urged by the appellants in the present criminal case, because it held that as a matter of state law the findings and judgment were not before it.6
9
It is settled that a state court may not avoid deciding federal questions and thus defeat the jurisdiction of this Court by putting forward nonfederal grounds of decision which are without any fair or substantial support. N.A.A.C.P. v. State of Alabama, 357 U.S. 449, 455, 78 S.Ct. 1163, 1168, 2 L.Ed.2d 1488; Staub v. City of Baxley, 355 U.S. 313, 318 320, 78 S.Ct. 277, 280, 281, 2 L.Ed.2d 302; Ward v. Board of County Com'rs of Love County, 253 U.S. 17, 22, 40 S.Ct. 419, 421, 64 L.Ed. 751. Invoking this principle, the appellants urge that the independent state grounds relied upon for decision by the Supreme Court of North Carolina were untenable and inadequate, and that the question whether the Federal Constitution compelled that the findings and judgment in the federal case operated as a collateral estoppel in this case was properly before the state court for decision. It thus becomes this Court's duty to ascertain whether the procedural grounds relied upon by the state court independently and adequately support its judgment.
10
The Supreme Court of North Carolina stated in its opinion of affirmance that the 'defendants for reasons best known to themselves elected not to offer in evidence the record in the Federal court case.' 248 N.C., at page 493, 103 S.E.2d, at page 852. This statement is borne out by the record before that court,7 the so-called 'case on appeal' prepared by the appellants themselves.8 The appellants now advise us that in fact the federal court's findings and judgment were offered in evidence at the trial and excluded by the trial judge. They ascribe to 'some quirk of inadvertence' their failure to include in their 'case on appeal' the part of the transcript which would so indicate.9 And they assert that, since the Supreme Court of North Carolina has 'wide discretion' to go outside the record in order to get at the true facts, the Court's refusal to do so here amounted to a refusal to exercise its discretion 'to entertain a constitutional claim while passing upon kindred issues raised in the same manner.' Williams v. State of Georgia, 349 U.S. 375, 383, 75 S.Ct. 814, 818, 99 L.Ed. 1161.
11
The difficulty with this argument, beyond the fact that the appellants apparently did not ask the North Carolina court to go outside the record for this purpose, is that that court has consistently and repeatedly held in criminal cases that it will not make independent inquiry to determine the accuracy of the record before it.10 Illustrative decisions are: State v. Robinson, 229 N.C. 647, 50 S.E.2d 740; State v. Wolfe, 227 N.C. 461, 42 S.E.2d 515; State v. Gause, 227 N.C. 26, 40 S.E.2d 463; State v. Stiwinter, 211 N.C. 278, 189 S.E. 868; State v. Dee, 214 N.C. 509, 199 S.E. 730; State v. Weaver, 228 N.C. 39, 44 S.E.2d 360; State v. Davis, 231 N.C. 664, 58 S.E.2d 355; State v. Franklin, 248 N.C. 695, 104 S.E.2d 837.
12
Thus in the Robinson case the court reversed a criminal conviction for insufficiency of the evidence, although noting that:
13
'The court below, in its charge * * * (referred) to * * * incriminating facts and circumstances which do not appear in the testimony included in the record before us. This would seem to indicate that the record fails to include all the evidence offered by the State.
14
'Be that as it may, the record on appeal imports verity, and this Court is bound thereby. (Citing cases.) This is true even though the case is settled by counsel (citing cases); and not by the judge (citing cases) * * *.
15
'The Supreme Court is bound by the case on appeal, certified by the clerk of the Superior Court, even though the trial judge has had no opportunity to review it, and must decide questions presented upon the record as it comes here, without indulging in assumptions as to what might have occurred.' 229 N.C., at pages 649—650, 50 S.E.2d, at pages 741—742.
16
In State v. Wolfe the court reversed a criminal conviction on the ground of error in the trial court's instructions to the jury, although pointing out that:
17
'The quoted excerpts from the charge do not reflect the clarity of thought and conciseness of statement usually found in the utterances of the eminent and experienced jurist who presided at the trial below. * * * Even so, it (the record) is certified as the case on appeal. We are bound thereby and must decide the question presented upon the record as it comes here, without indulging in assumptions as to what might have occurred.' 227 N.C., at page 463, 42 S.E.2d at pages 516—517.
18
In the Gause case the court also reversed a conviction upon the ground of error in the charge, although noting that:
19
'Doubtless the use of the words 'greater weight of evidence' instead of 'beyond reasonable doubt' was a slip of the tongue or an error in transcribing. Nevertheless, it appears in the record, and we must accept it as it comes to us.' 227 N.C., at page 30, 40 S.E.2d, at page 466.
20
In the Stiwinter case, involving a similar issue, the court said:
21
'We are constrained to believe that this instruction has been erroneously reported, but it is here in a record duly certified * * * which imports verity, and we are bound by it.' 211 N.C., at page 279, 189 S.E., at page 869.
22
The Dee case involved similar issues. There the court noted:
23
'It is suggested by the Attorney-General that, in all probability, a typographical error has crept into the transcript and that the word 'disinterested' was used where the word 'interested' appears. In this he is supported by a letter from the judge who presided at the trial, and upon this letter a motion for certiorari to correct the record has been lodged on behalf of the State * * *. (T)he transcript is not now subject to change or correction. State v. Moore, 210 N.C. 686, 188 S.E. 421. It imports verity, and we are bound by it. * * * 'Under C.S. § 643, if the case on appeal as served by the appellant be approved by the respondent or appellee, it becomes the case and a part of the record on appeal, and, in connection with the record (proper), may alone be considered in determining the rights of the parties interested in the appeal. * * * The appeal must be heard and determined on the agreed case appearing in the record." 214 N.C., at page 512, 199 S.E., at page 732.
24
It is thus apparent that the present case is not of a pattern with Williams v. State of Georgia, supra. Even if the North Carolina Supreme Court has power to make independent inquiry as to evidence proffered in the trial court but not included in the case on appeal, its decisions make clear that it has without exception refused to do so.11 This is not a case, therefore, where the state court failed to exercise discretionary power on behalf of appeallants' 'federal rights' which it had on other occasions exercised in favor of 'kindred issues.'
25
The appellants contend additionally that they brought the federal court's findings and judgment in the Simkins case before the state courts in two other ways: (a) by their motion to quash at the outset of the trial, and (b) by their motion to set aside the verdict at the trial's conclusion. The motion to quash set out the existence and alleged effect of the federal court proceedings, and requested leave to offer in evidence in support of the motion 'the full record and judgment roll in said case.' The motion to set aside the verdict incorporated by reference the motion to quash and also contained an independent summary of the federal court proceedings, requesting the court to take judicial notice of the same. Both motions were denied by the trial court without opinion.
26
As to the motion to quash, the Supreme Court of North Carolina sustained the trial court's ruling on the ground that the "court, in ruling on the motion, is not permitted to consider extraneous evidence. Therefore, when the defect must be established by evidence aliunde the record, the motion must be denied." 248 N.C. at page 489, 103 S.E.2d at page 849. In upholding the denial of the second motion, the Supreme Court of North Carolina declined to take judicial notice of the federal court's findings and judgment, for reasons discussed at some length in its opinion, and concluded that the appellants 'were not, as a matter of right, entitled to have the verdict set aside.' 248 N.C. at page 495, 103 S.E.2d at page 854. An independent examination of North Carolina law convinces us that the state court in both instances was following well-established local procedural rules; it did not make an ad hoc determination operating discriminatorily against these particular litigants.
27
At least since the decision in State v. Turner, 170 N.C. 701, 86 S.E. 1019, in 1915, it has been the settled rule in North Carolina that '(a) motion to quash * * * lies only for a defect on the face of the warrant or indictment.' 170 N.C., at page 702, 86 S.E., at page 1020. The rule that a motion to quash cannot rest on matters dehors the record proper has, so far as investigation reveals, been rigidly adhered to in all subsequent North Carolina decisions.12 See State v. Brewer, 180 N.C. 716, 717, 104 S.E. 655, 656; State v. Cochran, 230 N.C. 523, 524, 53 S.E.2d 663, 665; State v. Andrews, 246 N.C. 561, 565, 99 S.E.2d 745, 748. In the present case the state court simply followed this settled rule of local practice.
28
A similar conclusion must be reached as to the denial of the motion made at the end of the trial. That motion requested '(t)hat the verdict rendered by the jury * * * be set aside, that the Court withhold and arrest judgment and discharge the defenadants notwithstanding the verdict, or grant the defendants a new trial * * *.' Whether the motion be technically considered as one to set aside the verdict and grant a new trial or as one to arrest the judgment and dismiss the defendants, the action of the North Carolina Supreme Court in upholding its denial was clearly in conformity with established state law. 'A motion to set aside the verdict and grant a new trial is addressed to the discretion of the court and its refusal to grant such motion is not reviewable on appeal.' State v. McKinnon, 223 N.C. 160, 166, 25 S.E.2d 606, 610; State v. Chapman, 221 N.C. 157, 19 S.E.2d 250; State v. Johnson, 220 N.C. 252, 17 S.E.2d 7. See also State v. Wagstaff, 219 N.C. 15, 19, 12 S.E.2d 657, 660; State v. Brown, 218 N.C. 415, 422, 11 S.E.2d 321, 325; State v. Caper, 215 N.C. 670, 2 S.E.2d 864. 'A motion in arrest of judgment can be based only on matters which appear on the face of the record proper, or on matters which schould, but do not, appear on the face of the record proper. * * * The record proper in any action includes only those essential proceedings which are made of record by the law itself, and as such are self-preserving. * * * The evidence in a case is no part of the record proper. * * * In consequence, defects which appear only by the aid of evidence cannot be the subject of a motion in arrest of judgment.' State v. Gaston, 236 N.C. 499, 501, 73 S.E.2d 311, 313; State v. Foster, 228 N.C. 72, 44 S.E.2d 447; State v. Brown, 218 N.C. 415, 422, 11 S.E.2d 321, 325; State v. McKnight, 196 N.C. 259, 145 S.E. 281; State v. Shemwell, 180 N.C. 718, 721, 104 S.E. 885.
29
Examination of the whole course of North Carolina decisions thus precludes the inference that the Supreme Court of North Carolina in this case arbitrarily denied the appellants an opportunity to present their federal claim. The judgment before us for review is the judgment which the Supreme Court of North Carolina made on the record before it, not the action of the state trial court. 'Without any doubt it rests with each State to prescribe the jurisdiction of its appellate courts, the mode and time of invoking that jurisdiction, and the rules of practice to be applied in its exercise; and the state law and practice in this regard are no less applicable when Federal rights are in controversy than when the case turns entirely upon questions of local or general law. Callan v. Bransford, 139 U.S. 197, 11 S.Ct. 519, 35 L.Ed. 144; Brown v. Commonwealth of Massachusetts, 144 U.S. 573, 12 S.Ct. 757, 36 L.Ed. 546; Jacobi v. State of Alabama, 187 U.S. 133, 23 S.Ct. 48, 47 L.Ed. 106; Hulbert v. City of Chicago, 202 U.S. 275, 281, 26 S.Ct. 617, 618, 50 L.Ed. 1026; Newman v. Gates, 204 U.S. 89, 27 S.Ct. 220, 51 L.Ed. 385; Chesapeake & Ohio Railway Co. v. McDonald, 214 U.S. 191, 195, 29 S.Ct. 546, 548, 53 L.Ed. 963.' John v. Paullin, 231 U.S. 583, 585, 34 S.Ct. 178, 58 L.Ed. 381. '(W)hen as here there can be no pretence that the (state) Court adopted its view in order to evade a constitutional issue, and the case has been decided upon grounds that have no relation to any federal question, this Court accepts the decision whether right or wrong.' Nickel v. Cole, 256 U.S. 222, 225, 41 S.Ct. 467, 468, 65 L.Ed. 900.13
30
A word of emphasis is appropriate, before concluding, to make entirely explicit what it is that is involved in this case, and what is not. There is no issue here as to the constitutional right of Negroes to use a public golf course free of racial discrimination. From first to last the courts of North Carolina fully recognized that under the Constitution these appellants could not be convicted if they were excluded from the golf course because of their race. The trial judge so instructed the jury, and the Supreme Court of North Carolina so held. Cf. Constantian v. Anson County, 244 N.C. 221, 93 S.E.2d 163. Upon the evidence in this case the jury's verdict established that no such racial discrimination had in fact occurred. 'On review here of State convictions, all those matters which are usually termed issues of fact are for conclusive determination by the State courts and are not open for reconsideration by this Court. Observance of this restriction in our review of State courts calls for the utmost scruple.' Watts v. State of Indiana, 338 U.S. 49, 50, 69 S.Ct. 1347, 1348, 93 L.Ed. 1801.
31
What is involved here is the assertion of a quite different constitutional claim—that the Supremacy Clause and the Fourteenth Amendment require a state criminal court to give conclusive effect to fact findings made in a civil action upon different evidence by a Federal District Court. While intimating no view as to the merits of this constitutional claim, we note only that it is a completely novel one. Cf. Hoag v. State of New Jersey, 356 U.S. 464, 470—471, 78 S.Ct. 829, 833—834, 2 L.Ed.2d 913. The North Carolina Supreme Court did not decide this asserted federal question. We have found that it did not do so because of the requirements of rules of state procedural law within the Constitutional power of the States to define, and here clearly delineated and even-handedly applied. We have no choice but to determine that this appeal must be dismissed because no federal question is before us. That determination is required by principles of judicial administration long settled in this Court, principles applicable alike to all litigants, irrespective of their race, color, politics, or religion.
32
Dismissed.
33
Mr. Chief Justice WARREN, with whom Mr. Justice BLACK, Mr. Justice DOUGLAS, and Mr. Justice BRENNAN join, dissenting.
34
I do not agree that the decision below rests on adequate nonfederal grounds. And—whether it does or not—it seems to me that the case should not be dismissed in view of developments since the argument.
35
The crucial holding below is that the North Carolina courts could not consider the Simkins1 record because appellants 'for reasons best known to themselves elected not to offer (it) in evidence.' 248 N.C. 485, 493, 103 S.E.2d 846, 852. It goes without saying that the procedural rule thus invoked—that appellants must rely on evidence which was offered at the trial—is, in itself, reasonable. In fact, that rule is elementary in most types of practice. The difficulty here lies not in the rule, but in its application to this case, on this record, and in the light of the fact, acknowledged by the State,2 that appellants offered the Simkins record in evidence.
36
The relevant facts are few. When the federal court granted its injunction in Simkins, it found that appellants had been excluded from Gillespie Park on the occasion in question because they are Negroes. Simkins v. City of Greensboro, D.C., 149 F.Supp. 562, 565. As was held below, such exclusion, if established as a fact in this case, would be a complete defense to the State's trespass charge. 248 N.C., at pages 491—493, 103 S.E.2d, at pages 851—852. Therefore, appellants offered the Simkins record in evidence during their trial.3 They claimed, under the Supremacy Clause and the Fourteenth Amendment, that the federal court determination barred the state prosecution. However, the State objected to appellants' offer of proof, and the trial court sustained the objection.4 Thereafter, the jury convicted.
37
On appeal to the Supreme Court of North Carolina, appellants sought review of their contention that the federal court findings were binding on the State in the subsequent criminal proceedings. At this point they made the mistake which deprived them of the opportunity to have that federal question reviewed. They failed to include their offer of proof and the rejected exhibits in their case on appeal, although they did include the ruling on the State's objection. With the resulting defective record before it, the State Supreme Court held that it could not review appellants' federal question because, as has been indicated, appellants 'for reasons best known to themselves elected not to offer (the Simkins record) in evidence.'
38
The Court holds that the state ground is adequate to support the decision below because, although we know the fact to be to the contrary, the assertion that appellants failed to offer the Simkins record in evidence 'is borne out by the record' which the state court had before it. I cannot read that record—appellants' case on appeal—as does the Court. Therefore, I do not agree that the state ground is adequate. But even if it were, it does not follow that the case must—or should—be dismissed. Rather, the State's stipulation—a supervening event which may be of critical significance under North Carolina law—requires a different disposition, in the interests of justice, under controlling precedent.
39
First. It cannot be said, even on the defective record which the State Supreme Court had before it, that appellants 'for reasons best known to themselves elected not to offer (the Simkins record) in evidence.' On the contrary, appellants' case on appeal indicates clearly that appellants offered the Simkins record in evidence. When the portions of that record set out in the Court's opinion5 are read as a whole with the entire case on appeal, it seems reasonably clear that the Simkins record was offered in evidence, that the State objected to the offer, and that the objection was sustained. Therefore, whether the result below could have been based on other grounds or not, the factual premise for the ground on which it was based lacks fair and substantial support in the record. That ground, therefore, is not adequate. Cf. Creswill v. Grand Lodge, 225 U.S. 246, 32 S.Ct. 822, 56 L.Ed. 1074; Union Pacific R. Co. v. Public Service Comm., 248 U.S. 67, 39 S.Ct. 24, 63 L.Ed. 131; Cedar Rapids Gas Light Co. v. City of Cedar Rapids, 223 U.S. 655, 32 S.Ct. 389, 56 L.Ed. 594; see United Gas Public Service Co. v. State of Texas, 303 U.S. 123, 143, 625, 58 S.Ct. 483, 493, 82 L.Ed. 702. 'Whatever springes the State may set for those who are endeavoring to assert rights that the State confers, the assertion of federal rights, when plainly and reasonably made, is not to be defeated under the name of local practice.' Davis v. Wechsler, 263 U.S. 22, 24, 44 S.Ct. 13, 14, 68 L.Ed. 143. Since the only state ground mentioned in the opinion below is inadequate, this Court should either proceed directly to a consideration of the federal question or—if deemed desirable should remand the case to the state court for further consideration.
40
Second. Even if the state ground were adequate, the case should not be dismissed. After the argument in this Court, the State furnished the Court with a copy of the actual stenographic transcript of the trial. The State stipulated to the accuracy of that transcript. The transcript shows, beyond peradventure, that the decision below was based 'upon a supposed state of facts which does not exist.' Gorham v. Pacific Mut. Life Ins. Co., 215 N.C. 195, 200, 1 S.E.2d 569, 572. The North Carolina court apparently recognizes infirmity in its decisions in such cases. State v. Marsh, 134 N.C. 184, 47 S.E. 6, 67 L.R.A. 179. Therefore, the State's stipulation, an event 'which has supervened since the judgment (below) was entered,' may very well 'affect the result.' Patterson v. State of Alabama, 294 U.S. 600, 607, 55 S.Ct. 575, 578, 79 L.Ed. 1082. Accordingly, under firmly established principles, either the case should be remanded for a decision by the state court on the legal effect of the State's stipulation,6 or we should decide this question of state law ourselves.7 To take such action 'is not to review, in any proper sense of the term, the decision of the state court upon a non-federal question, but only to deal appropriately with a matter arising since its judgment and having a bearing upon the right disposition of the case.' Patterson v. State of Alabama, supra, 294 U.S. at page 607, 55 S.Ct. at page 578. State Tax Commission of Utah v. Van Cott, 306 U.S. 511, 515—516, 59 S.Ct. 605, 607, 83 L.Ed. 950.
41
Third. It should not be assumed that other state grounds, not relied on below, would preclude reconsideration by the state court if the case were remanded. As has been indicated, the State's stipulation may create infirmity in the state court's decision, under North Carolina law. See State v. Marsh, supra. A remaining obstacle to appellate review of appellants' federal question, under North Carolina practice, may be the omission of the rejected exhibits from appellants' case on appeal. See In re Smith's Will, 163 N.C. 464, 465, 79 S.E. 977. But records can be corrected. The Court refers us to cases which show that the North Carolina court may permit corrections in the record proper8 and in the case on appeal.9 It may authorize corrections not only when fault is attributable to the lower court,10 but also when it is chargeable to the parties.11 It may do so pursuant to agreement between the parties12 and pursuant to motion of one of the parties.13 Indeed, it appears that it may be able to do so in its own motion.14 Its power to inquire into the accuracy of the record before it is established— to some extent at least—by recent decisions,15 and its power to order the lower courts to send up 'additional papers and parts of the record' is explicitly recognized by its rules.16 Therefore, the state court could permit a correction of the record—and consequently could decide the federal question—if the case were remanded.
42
It is true that there is language in North Carolina cases, to which the State has called our attention, that indicates that a record settled by agreement—rather than by the trial court—may only be corrected by agreement. See Smith v. Capital Coca-Cola Bottling Co., 221 N.C. 202, 19 S.E.2d 626; Gorham v. Pacific Mut. Life Ins. Co., supra. And language from State v. Dee, 214 N.C. 509, 512, 199 S.E. 730, 732, quoted by the Court in another connection, suggests that the state court is disinclined to permit the correction of a defective record when the case on appeal is settled by the parties. But these cases are not in point in the circumstances of the case before us.
43
The rule stated in Smith and Gorham—that a record settled by agreement can only be corrected by agreement—is subject to a very relevant qualification. For in Gorham, the North Carolina court observed, in denying a losing party's request for a certiorari to correct the record, that:
44
'(T)here is no concession on the part of the (prevailing party) that the case has been decided 'upon a sham issue,' or 'upon a supposed state of facts which does not exist,' nor yet upon a misconception of the record. Cook v. Mfg. Co., (183 N.C. 48, 110 S.E. 608); State v. Marsh, (supra). These are allegations of the (losing party), and (the prevailing party) says they rest only in allegation. She further says that the interpretation placed upon the record 'was and is absolutely correct'; * * * and that the transcript admits of no other interpretation.' 215 N.C., at page 200, 1 S.E.2d, at page 572.
45
Here, on the other hand, the State has stipulated to facts which do establish that the case was decided below 'upon a supposed state of facts which does not exist.' That is precisely what the prevailing party in Gorham did not concede. This case, therefore, is governed by Cook and Marsh, not by Gorham.
46
Likewise, in Dee, the North Carolina court denied the State's request for a certiorari to correct an alleged error in the case on appeal. But in Dee, as in Gorham, the prevailing party did not concede that there was any error in the record. In fact, the court itself expressed skepticism about the State's claim:
47
'It is suggested by the Attorney-General that, in all probability, a typographical error has crept into the transcript and that the word 'disinterested' was used where the word 'interested' appears. In this he is supported by a letter from the judge who presided at the trial, and upon this letter a motion for certiorari to correct the record has been lodged on behalf of the State. The solicitor apparently took a different view of the matter when he agreed to the statement of case on appeal with an exception pointed directly to the expression.' 214 N.C., at page 512, 199 S.E. at page 732.
48
On these facts, quite different from those before us, it is perhaps understandable that the state court refused to entertain the State's appeal to its discretion.
49
Therefore, it appears that if the case were remanded, appellants would very likely be permitted to correct their case on appeal, in view of the State's stipulation. And, as has been indicated, a correction could now be allowed even if the State objected to it. But I am sure that the State would not object, for North Carolina has no interest in depriving its citizens of their liberty on assumptions that do not accord with fact. It seems clear, therefore, that under North Carolina law, appellants may yet have their federal question reviewed—unless we dismiss.17
50
In view of the federal court finding that the appellants were excluded from Gillespie Park because of their race, these convictions give rise to serious constitutional doubts. Unless dismissal cannot be avoided, the appellants should not be deprived of their liberty without being heard on their federal question. Our own precedents require that we either remand the case or decide the questions which it presents.
1
'If any person after being forbidden to do so, shall go or enter upon the lands of another, without a license therefor, he shall be guilty of a misdemeanor, and on conviction, shall be fined not exceeding fifty dollars, or imprisoned not more than thirty days: * * *.' N.C.Gen.Stat. § 14—134. This statute was first enacted in 1866. North Carolina Laws, Special Session, Jan., 1866, c. 60.
2
'Final judgments or decrees rendered by the highest court of a State in which a decision could be had, may be reviewed by the Supreme Court as follows: * * *
'(2) By appeal, where is drawn in question the validity of a statute of any state on the ground of its being repugnant to the Constitution, treaties or laws of the United States, and the decision is in favor of its validity.'
3
The appellants ask that the appeal be treated as a petition for certiorari in the event it is found that the appeal was improperly taken. See 28 U.S.C. § 2103, 28 U.S.C.A. § 2103. The considerations which require dismissal of the appeal in this case also require denial of a petition for certiorari. See 28 U.S.C. § 1257(3), 28 U.S.C.A. § 1257(3).
4
The relevant provisions of the bylaws were as follows: 'Section 1—Membership. Membership in this corporation shall be restricted to members who are approved by the Board of Directors for membership in this Club. There shall be two types of membership; one, the payment of a stipulated fee of $30.00 or more, plus tax, shall cover membership and greens fees. The other type of membership shall be $1.00, plus tax, but this type of member shall pay greens fees each time he uses the course. The greens fees and the amount of membership fees may be changed by the Board of Directors at any time upon two-thirds vote of the members of the Board.
'Section 2—Use of Golf Facilities. The golf course and its facilities shall be used only by members, their invited guests, members in good standing of other golf clubs, members of the Carolina Golf Association, pupils of the Professional and his invited guests.'
5
The trial judge's instructions in their entirety on this aspect of the case were as follows:
'Now, if the State has satisfied you from the evidence and beyond a reasonable doubt that the land in question, that is the golf course property, was the land of the corporation, that it had the actual possession of the property and that the defendants entered upon the land intentionally and that they did so after being forbidden to do so by an agent or employee of the corporation who was authorized to tell them that they could not play golf, then, nothing else appearing,
that would constitute a violation of the statute. However, although the State may prove beyond a reasonable doubt in a prosecution under this statute that the accused intentionally entered upon the land in the actual possession of the corporation after being forbidden to do so by an agent of the corporation and thereby establish as an ultimate fact that the accused entered the property without legal right, the accused may still escape conviction by showing as an affirmative defense that he entered under a bona fide claim of right.
'Bona fide claim of right means a claim of right in good faith or bona fide itself means in good faith. That is to say, when the defendants seek to excuse an entry without legal right as one taking place under a bona fide claim of right, then the burden is upon such defendant to show two things: not beyond a reasonable doubt or even by he greater weight of the evidence, but merely to the satisfaction of the jury, first, that he believed he had a right to enter; and, second, that he had reasonable grounds for such belief.
'Now, the defendants by their plea of not guilty deny their guilt of each and every element of the offense charged, but they further say and contend that even if it be found that the land in question was in the actual possession of the corporation and that they entered the land intentionally and that they did so and remained there after being forbidden to do so, they say that even if that be found that they did so under a bona fide claim of right and that they believed they had a right to enter and that they had reasonable grounds for such belief.
'Now, as to that question which arises upon the evidence, I instruct you then, ladies and gentlemen of the jury, that under the
law as determined by the United States Court and as pronounced by them, the Gillespie Golf Club, Inc., by leasing the land from the City of Greensboro to use as a golf course was subjected to the same obligations as the City of Greensboro would have been had it operated a golf course itself. It was subjected to the same rights as the City would have had, the same obligations and same responsibilities; that is to say, the law would not permit the City and, therefore, would not permit its lessee, the Gillespie Park Golf Club, Inc., to discriminate against any citizen of Greensboro in the maintenance and operation and use of a golf course. It could not exclude either defendant because of his race or for any other reason applicable to them alone; that is to say, they were entitled to the same rights to use the golf course as any other citizen of Greensboro would be provided they complied with the reasonable rules and regulations for the operation and maintenance and use of the golf course. They would not be required to comply with any unreasonable rules and regulations for the operation and maintenance and use of the golf course.
'Furthermore, I instruct you that your verdict will not be prompted in any manner whatsoever by the race of the defendants. That has absolutely nothing to do with the case in law and should not be considered by you. Under the law, all citizens have equal rights and equal responsibilities in the maintenance and use of public facilities, that is facilities maintained by the governmental unit in which they live, and therefore the fact that the defendants are Negroes certainly may not be considered to their prejudice nor to the prejudice of the State.'
6
Although not reaching the merits of the claim that the Constitution would compel it to hold that the federal judgment operated as a collateral estoppel in the present case, the North Carolina court discussed the question of collateral estoppel at some length in its opinion by way of obiter dicta:
'The mere assertion that a court of this State has not given due
recognition to a judgment rendered by one of our Federal courts merits serious consideration.
'When the doctrine of collateral estoppel should be applied is not always easily solved. In Van Schuyver v. State, 53 Okl.Cr. 150, 8 P.2d 688, it was held that a judgment in a civil action between prosecuting witness and defendant which determined the ownership of domestic fowl could not be used by the defendant in a criminal action to estop the State from prosecuting him on a charge of larceny. Similar conclusions have been reached in other jurisdictions with respect to the ownership of property. State v. Hogard, 12 Minn. 293, 12 Gil. 191; People v. Leland, 73 Hun 162, 25 N.Y.S. 943; Hill v. State, 22 Tex.App. 579, 3 S.W. 764.
'It is said in the annotation to Mitchell v. State, 140 Ala. 118, 37 So. 76, 103 Am.St.Rep. 17: 'When the previous judgment arose in a case in which the state or commonwealth was the prosecutor or plaintiff and the defendant in the case at bar was also the defendant, and the judgment was with reference to a subject which is material to the case at bar, the doctrine of res judicata applies. (citations) But where the judgment to which it is sought to apply the doctrine of res judicata was rendered in a civil proceeding to which the state was not a party, or in a criminal proceeding to which the defendant in the case at bar was not a party, the doctrine of res judicata does not apply. (citations)'
'The Supreme Court of the United States has recognized and applied the law as there announced to differing factual situations. Compare United States v. Baltimore & O.R. Co., 229 U.S. 244, 33 S.Ct. 850, 57 L.Ed. 1169, and Williams v. State of North Carolina, 325 U.S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577. Other illustrations may be found in: State v. Dula, 204 N.C. 535, 168 S.E. 836; Warren v. Pilot Life Ins. Co., 215 N.C. 402, 2 S.E.2d 17; Powers v. Davenport, 101 N.C. 286, 7 S.E. 747; State v. Boland, 241 Iowa 770, 41 N.W.2d 727; People v. McKenna, 116 Cal.App.2d 207, 255 P.2d 452; State v. Morrow, 158 Or. 412, 75 P.2d 737; State v. Cornwell, 97 N.H. 446, 91 A.2d 456; State v. Greenberg, 16 N.J. 568, 109 A.2d 669. Extensive annotations appear as a note to Green v. State, 204 Ind. 349, 184 N.E. 183, 87 A.L.R. 1251; 30A Am.Jur. 518.' 248 N.C., at pages 493, 495, 103 S.E.2d, at pages 852, 853—854.
Compare what was said by this Court in Hoag v. State of New Jersey, 356 U.S. 464, 471, 78 S.Ct. 829, 834, 2 L.Ed.2d 913: 'Despite its wide employment, we entertain grave doubts whether collateral estoppel can be regarded as a constitutional requirement. Certainly this Court has never so held.'
7
In North Carolina, '(t)he 'transcript or record on appeal' (to the Supreme Court) consists of (1) the 'record proper' (i.e., summons, pleadings, and judgment) and (2) the 'case on appeal,' which last is the exceptions taken, and such of the evidence, charge, prayers, and other matters occurring at the trial as are necessary to present the matters excepted to for review.' Cressler v. Asheville, 138 N.C. 482, 485, 51 S.E. 53, 54. The 'record proper' includes 'only those essential proceedings which are made of the record by the law itself, and as such are self-preserving,' State v. Gaston, 236 N.C. 499, 501, 73 S.E.2d 311, 313. The term 'record' in this opinion refers, unless otherwise indicated, to that part of the record on appeal which is contained in the 'case on appeal', i.e., the transcript of the proceedings at the trial itself, containing the testimony of witnesses, proffers of evidence, exceptions and rulings thereon, etc., as selected and agreed upon by the parties.
8
All that the record before the North Carolina court contained on this aspect of the case, here reproduced in its entirety, was 'My name is Myrtle D. Cobb and I am Deputy Clerk in the Federal Court in Greensboro, and I have in my possession or it is my duty to keep in my possession public records concerning Federal cases and I do have in my possession the record in the case of Simkins, et al. v. The Gillespie Park Golf Course. I have all of the original papers in that case.'
Eight pages later, following the transcript of the testimony of another witness, there appears in the record before the North Carolina court the following, also reproduced here in its entirety: 'Mrs. Kennedy: If your Honor please, we'd like, if possible, to have a ruling on whether or not these would be admissible. Court: I am going to sustain the objection as to those two Exhibits, that is #6 and #7.' There is nothing in the record before the North Carolina Supreme Court to indicate what 'these' meant, and 'Exhibits 6 and 7' were not further identified nor made part of the record as an offer of evidence as required by North Carolina law, In re Smith's Will, 163 N.C. 464, 79 S.E. 977, nor otherwise submitted to the Supreme Court of North Carolina.
9
The appellants have included in an appendix to their brief an excerpt from the stenographic trial transcript. The trial transcript was made available to this Court after the argument, and the excerpt in question reads as follows:
'Direct Examination by Mrs. Kennedy:
'Q. Will you state your name and address, please? A. I am Myrtle D. Cobb. I am deputy clerk in the Federal Court in Greensboro.
'Q. As Deputy Clerk in the Federal Court here in Greensboro, is it part of your duty to keep public records? A. Yes, it is.
'Q. Do you have a record in the case of Simkins, et al, vs. Gillespie Park Golf Course, et al? A. This is the case. It is all the original papers that went up to the Court of Appeals that was filed in our office.
'Q. Were the findings of fact part of that record? A. Yes.
'Mrs. Kennedy: Your Honor, at this time we'd like to offer into evidence a decree, the findings of fact, conclusions of law and opinion, as rendered by the Judge of the Federal Court, Middle District of Greensboro.
'Mr. Kornegay: Objection.
'The Court: Do you have anything further that you want to introduce in regard to that?
'Mrs. Kennedy: In addition to that, we have the opinion of the Circuit Court of Appeals on this case.
'Mr. Kornegay: Objection.
'The Court: Let the record show that is being offered in evidence. I will rule on it later.
'(The documents referred to were marked for identification Defendants' Exhibits 6 and 7.)
'The Court: Anything else?
'Mrs. Kennedy: Not with this witness, your Honor.'
10
In civil cases, the North Carolina Supreme Court, on motion of a party, has issued 'a certiorari to give the (trial) judge an opportunity to correct the 'case' already settled by him, (but) such certiorari never issues (except to incorporate exceptions to the charge filed within 10 days after adjournment (Cameron v. Power Co., 137 N.C. 99, 49 S.E. 76)), unless it is first made clear to the court, usually by letter from the judge, that he will make the correction if given the opportunity.' Slocumb v. Philadelphia Construction Co., 142 N.C. 349, 351, 55 S.E. 196, 197; Sherrill v. Western Union Telegraph Co., 116 N.C. 655, 21 S.E. 429; Broadwell v. Ray, 111 N.C. 457, 16 S.E. 408; Lowe v. Elliott, 107 N.C. 718, 12 S.E. 383. Here, the case on appeal was not settled by the trial judge, and no motion for certiorari was made.
11
In Aycock v. Richardson, 247 N.C. 233, 100 S.E.2d 379, and Mason v. Moore County Board, 229 N.C. 626, 51 S.E.2d 6, the court went beyond the record for the restricted and quite different purpose of determining whether it had jurisdiction of the appeal, i.e., to determine whether an appeal had been properly taken in accordance with North Carolina General Statutes §§ 1—279 and 1—280. In other cases the North Carolina Supreme Court has remanded a cause for completion of the record on appeal because the record proper (as opposed to the case on appeal) lacked certain primary essentials. State v. Butts, 91 N.C. 524 (record failed to show that a court had been held by a judge or that a grand jury had been drawn, sworn, and charged); State v. Farrar, 103 N.C. 411, 9 S.E. 449 (same); State v. Daniel, 121 N.C. 574, 28 S.E. 255 (record did not show the organization of the court below or when and where the trial had been held). See also Kearnes v. Gray, 173 N.C. 717, 92 S.E. 149. In the same category must be placed those cases in which the North Carolina Supreme Court, on motion of a party, remanded the cause for correction of the record proper. See State v. Brown, 203 N.C. 513, 166 S.E. 396 (error in the transcription of the verdict); State v. Mosley, 212 N.C. 766, 194 S.E. 486 (omission in the transcription of the verdict). See also State v. Marsh, 134 N.C. 184, 47 S.E. 6, 67 L.R.A. 179 (case reversed because of omission of part of the indictment in the record on appeal). As to the important distinction in North Carolina between the record proper and case on appeal, see n. 7, supra.
12
There is a statutory departure from the settled rule. A North Carolina statute, enacted more than 70 years ago, providing that '(a)ll exceptions to grand jurors for and on account of their disqualifications shall be taken * * * by motion to quash the indictment, and if not so taken, the same shall be deemed to be waived.' N.C.Gen.Stat. § 9—26. The North Carolina courts have held that when a motion to quash is employed to attack the qualification of grand jurors, the defendant may rely on evidence outside the record proper. See State v. Gardner, 104 N.C. 739, 10 S.E. 146; State v. Peoples, 131 N.C. 784, 42 S.E. 814; State v. Speller, 229 N.C. 67, 47 S.E.2d 537; Miller v. State, 237 N.C. 29, 74 S.E.2d 513; State v. Perry, 248 N.C. 334, 103 S.E.2d 404.
13
It has been suggested that even though the ground relied upon by the Supreme Court of North Carolina is an adequate state ground, this case should not be dismissed, but remanded because of a supervening 'event.' But there has been no significant 'change, either in fact or law, which has supervened since the judgment was entered' by the Supreme Court of North Carolina. Patterson v. State of Alabama, 294 U.S. 600, 607, 55 S.Ct. 575, 578, 79 L.Ed. 1082. All that has happened is that the State Attorney General's Office, at this Court's request after argument, made available a transcript of the trial court proceedings which was stated to be accurate. But it has not been suggested that the State at any time has questioned that the transcript of the trial court's proceedings would reflect that the documents had in fact been offered in evidence in the trial court. See note 9. This case thus does not involve a situation where there has been an intervening change in fact or law. Compare Gulf, C. & S.F.R. Co. v. Dennis, 224 U.S. 503, 32 S.Ct. 542, 56 L.Ed. 860; Pagel v. MacLean, 283 U.S. 266, 51 S.Ct. 416, 75 L.Ed. 1023; State Tax Commission of Utah v. Van Cott, 306 U.S. 511, 515—516, 59 S.Ct. 605, 607, 83 L.Ed. 950.
1
Simkins v. City of Greensboro, D.C., 149 F.Supp. 562, affirmed, City of Greensboro v. Simkins, 4 Cir., 246 F.2d 425.
2
The State has stipulated to the accuracy of a stenographic trial transcript made available to the Court, after argument, at the Court's request. See the Court's opinion, note 9. Of course, the State denies that the transcript has any relevance to the issues before the Court.
3
See the Court's opinion, notes 8, 9.
4
See the Court's opinion, note 8.
5
See the Court's opinion, note 8.
6
Gulf, C. & S.F.R. Co. v. Dennis, 224 U.S. 503, 32 S.Ct. 542, 56 L.Ed. 860; Pagel v. MacLean, 283 U.S. 266, 51 S.Ct. 416, 75 L.Ed. 1023; Patterson v. State of Alabama, supra; State Tax Commission of Utah v. Van Cott, 306 U.S. 511, 59 S.Ct. 605, 83 L.Ed. 950; New Yor ex rel. Whitman v. Wilson, 318 U.S. 688, 63 S.Ct. 840, 87 L.Ed. 1083; Ashcraft v. State of Tennessee, 322 U.S. 143, 155—156, 64 S.Ct. 921, 927—928, 88 L.Ed. 1192; Williams v. State of Georgia, 349 U.S. 375, 75 S.Ct. 814, 99 L.Ed. 1161.
7
State of Missouri ex rel. Wabash R. Co. v. Public Service Comm'n, 273 U.S. 126, 47 S.Ct. 311, 71 L.Ed. 575; Steamship Co. v. Joliffe, 2 Wall. 450, 17 L.Ed. 805.
8
State v. Mosley, 212 N.C. 766, 194 S.E. 486; State v. Brown, 203 N.C. 513, 166 S.E. 396; State v. Marsh, supra; State v. Daniel, 121 N.C. 574, 28 S.E. 255; State v. Farrar, 103 N.C. 411, 9 S.E. 449; 104 N.C. 702, 10 S.E. 159; State v. Butts, 91 N.C. 524; cf. Aycock v. Richardson, 247 N.C. 233, 100 S.E.2d 379; Mason v. Moore County Board, 229 N.C. 626, 51 S.E.2d 6.
9
Cameron-Barkley Co. v. Thornton Light & Power Co., 137 N.C. 99, 49 S.E. 76; Arnold v. Dennis, 131 N.C. 114, 42 S.E. 552; Sherrill v. Western Union Tel. Co., 116 N.C. 654, 21 S.E. 400; Broadwell v. Ray, 111 N.C. 457, 16 S.E. 408; Lowe v. Elliott, 107 N.C. 718, 12 S.E. 383; cf. Aycock v. Richardson, 247 N.C. 233, 100 S.E.2d 379; Mason v. Moore County Board, 229 N.C. 626, 51 S.E.2d 6.
10
Cameron-Barkley Co. v. Thornton Light & Power Co., 137 N.C. 99, 49 S.E. 76; Sherrill v. Western Union Tel. Co., 116 N.C. 654, 21 S.E. 400; Broadwell v. Ray, 111 N.C. 457, 16 S.E. 408; State v. Daniel, 121 N.C. 574, 28 S.E. 255.
11
Arnold v. Dennis, 131 N.C. 114, 42 S.E. 552; State v. Daniel, 121 N.C. 574, 28 S.E. 255.
12
Smith v. Capital Coca-Cola Bottling Co., 221 N.C. 202, 19 S.E.2d 626; Gorham v. Pacific Mut. Life Ins. Co., supra; Miller v. Scott, 185 N.C. 93, 116 S.E. 86.
13
State v. Mosley, 212 N.C. 766, 194 S.E. 486; State v. Brown, 203 N.C. 513, 166 S.E. 396; Cameron-Barkley Co. v. Thornton Light & Power Co., 137 N.C. 99, 49 S.E. 76; State v. Marsh, supra; Sherrill v. Western Union Tel. Co., 116 N.C. 654, 21 S.E. 400; Broadwell v. Ray, 111 N.C. 457, 16 S.E. 408.
14
See Aycock v. Richardson, 247 N.C. 233, 100 S.E.2d 379; Mason v. Moore County Board, 229 N.C. 626, 51 S.E.2d 6; State v. Butts, 91 N.C. 524; State v. Daniel, 121 N.C. 574, 28 S.E. 255; State v. Farrar, 103 N.C. 411, 9 S.E. 449; 104 N.C. 702, 10 S.E. 159.
15
Aycock v. Richardson, 247 N.C. 233, 100 S.E.2d 379; Mason v. Moore County Board, 229 N.C. 626, 51 S.E.2d 6.
16
N.C.S.C. Rule 19(1). Rule 19(1) sets out the requirements as to form and content of transcripts on appeal. After setting out these requirements, it recites: 'Provided, further, that this rule is subject to the power of this Court to order additional papers and parts of the record to be sent up.'
17
Under my view of the case, it is unnecessary to decide whether the North Carolina court's broad powers with respect to the record, and the evidence of their frequent exercise in the interests of justice, see notes 8—16, supra, are consistent with the Court's rejection of appellants' argument, based on Williams v. State of Georgia, 349 U.S. 375, 75 S.Ct. 814, 99 L.Ed. 1161, that the North Carolina court should have gone outside the record to get at the truth as it has in some other cases. E.g., Aycock v. Richardson, 247 N.C. 233, 100 S.E.2d 379.
However, it may be worth noting in this connection that there is no relevant distinction between criminal cases like this one and civil cases like Aycock. Cf. the Court's opinion, note 10. The same statute, said to limit the power of the state court to go outside the record, see State v. Dee, supra, 214 N.C. at page 512, 199 S.E., at page 732 (quoted by the Court), is equally applicable to either type of case. Likewise, the apparently inflexible rule stated in the criminal cases cited by the Court is also stated in numerous civil cases. See, as representative, Hagan v. Jenkins, 234 N.C. 425, 67 S.E.2d 380; Bame v. Palmer Stone Works, 232 N.C. 267, 59 S.E.2d 812. The same precedents are applicable in both types of case. See, for example, Bame v. Palmer Stone Works, supra, and conversely, the Dee and Weaver cases cited by the Court. Therefore, if the rule stated in the criminal decisions relied on by the Court is as inflexible as it purports to be, it should be equally so in civil cases. Yet Aycock shows that the rule is less rigid in fact than in articulation.
The Court also distinguishes Aycock because there the state court went outside the record to verify an apparent lack of jurisdiction. See the Court's opinion, note 11. However, so far as has been called to our attention, the North Carolina court has never suggested such a distinction. It would seem more logical, therefore, to assume that if the state court can go outside the record where it apparently lacks jurisdiction, it can do so where its jurisdiction is clear.
| 12
|
364 U.S. 51
80 S.Ct. 1589
4 L.Ed.2d 1563
UNITED STATES, Appellant,v.Lucille Aldine DEGE et al.
No. 14.
Argued Oct. 20, 1959.
Decided June 27, 1960.
Mr. Jerome M. Feit, for appellant.
Mr. Thomas Whelan, New York City, for appellees.
Mr. Justice FRANKFURTER delivered the opinion of the Court.
1
This is an indictment charging husband and wife with conspiring to commit an offense against the United States in violation of § 371 of Title 18 of the United States Code, 18 U.S.C.A. § 371, which was enacted by Congress on June 25, 1948, 62 S.Ct. 683, 701, in connection with § 545 of that Code, 18 U.S.C.A. § 545, id., 716, in that they sought illicitly to bring goods into the United States with intent to defraud it. On authority of controlling decisions of its Circuit, Dawson v. United States, 9 Cir., 10 F.2d 106, and Gros v. United States, 9 Cir., 138 F.2d 261, the District Court dismissed the indictment on the ground that it did not state an offense, to wit, a husband and wife are legally incapable of conspiring within the condemnation of § 371. The case came here on direct review of the order dismissing the indictment, 358 U.S. 944, 79 S.Ct. 352, 3 L.Ed.2d 351, under the Criminal Appeals Act of March 2, 1907, now 18 U.S.C. s 3731, 18 U.S.C.A. § 3731. The construction of § 371 by the Court of Appeals for the Ninth Circuit has been explicitly rejected by the Court of Appeals for the District of Columbia Circuit, Johnson v. United States, 81 U.S.App.D.C. 254, 157 F.2d 209, and by the Court of Appeals for the Fifth Circuit, Thompson v. United States, 227 F.2d 671, and Wright v. United States, 243 F.2d 569.
2
The question raised by these conflicting views is clear-cut and uncomplicated. The claim that husband and wife are outside the scope of an enactment of Congress in 1948, making it an offense for two persons to conspire, must be given short shrift once we heed the admonition of this Court that 'we free our minds from the notion that criminal statutes must be construed by some artificial and conventional rule,' United States v. Union Supply Co., 215 U.S. 50, 55, 30 S.Ct. 15, 16, 54 L.Ed. 87, and therefore do not allow ourselves to be obfuscated by medieval views regarding the legal status of woman and the common law's reflection of them. Considering that legitimate business enterprises between husband and wife have long been commonplaces in our time, it would enthrone an unreality into a rule of law to suggest that man and wife are legally incapable of engaging in illicit enterprises and therefore, forsooth, do not engage in them.
3
None of the considerations of policy touching the law's encouragement or di couragement of domestic felicities on the basis of which this Court determined appropriate rules for testimonial compulsion as between spouses, Hawkins v. United States, 358 U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125, and Wyatt v. United States, 362 U.S. 525, 80 S.Ct. 901, are relevant to yielding to the claim that an unqualified interdiction by Congress against a conspiracy between two persons precludes a husband and wife from being two persons. Such an immunity to husband and wife as a pair of conspirators would have to attribute to Congress one of two assumptions: either that responsibility of husband and wife for joint participation in a criminal enterprise would make for marital disharmony, or that a wife must be presumed to act under the coercive influence of her husband and, therefore, cannot be a willing participant. The former assumption is unnourished by sense; the latter implies a view of American womanhood offensive to the ethos of our society.
4
The fact of the matter is that we are asked to write into law a doctrine that parrot-like has been repeated in decisions and texts from what was given its authoritative expression by Hawkins early in the eighteenth century. He wrote:
5
'It plainly appears from the Words of the Statute, That one Person alone cannot be guilty of Conspiracy within the Purport of it; from whence it follows, * * * That no such Prosecution is maintainable against a Husband and Wife only, because they are esteemed but as one Person in Law, and are presumed to have but one 'Will.' (Hawkins, Pleas of the Crown, 4th ed. 1762, Bk. I, chap. lxxii, Sect. 8, p. 192.)
6
The pronouncement of Hawkins apparently rests on a case in a Year Book of 38 Edward III, decided in 1365. The learning invoked for this ancient doctrine has been questioned by modern scholarship. See Williams, The Legal Unity of Husband and Wife, 10 Mod.L.Rev., 16 (1947); and cf. Winfield, The History of Conspiracy (1921), § 27, p. 64, and § 37, p. 88. But in any event the answer to Hawkins with his Year Book authority, as a basis for a decision by the Supreme Court of the United States in 1960 construing a statute enacted in 1948, was definitively made long ago by Mr. Justice Holmes:
7
'It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.' Holmes, Collected Legal Papers, 187 (1920), reprinting The Path of the Law, 10 Harv.L.Rev. 457, 469 (1897).
8
For this Court now to act on Hawkins's formulation of the medieval view that husband and wife 'are esteemed but as one Person in Law, and are presumed to have but one Will' would indeed be 'blind imitation of the past.' It would require us to disregard the vast changes in the status of woman—the extension of her rights and correlative duties—whereby a wife's legal submission to her husband has been wholly wiped out, not only in the English-speaking world generally but emphatically so in this country.
9
How far removed we were even nearly a century ago when Congress passed the original statute against criminal conspiracy, the Act of March 2, 1867, 14 Stat. 484, from the legal and social climate of eighteenth century common law regarding the status of woman is pithily illustrated by recalling the self-deluding romanticism of Blackstone, whereby he could conscientiously maintain that 'even the disabilities, which the wife lies under, are for the most part intended for her protection and benefit. So great a favourite is the female sex of the laws of England.' Blackstone, Commentaries on the Laws of England (1765), Bk. I, ch. 15, p. 433. It would be an idle parade of learning to document the statement that these common-law disabilities were extensively swept away in our different state of society, both by legislation and adjudication, long before the originating conspiracy Act of 1867 as passed. Suffice it to say that we cannot infuse into the conspiracy statute a fictitious attribution to Congress of regard for the medieval notion of woman's submissiveness to the benevolent coercive powers of a husband in order to relieve her of her obligation of obedience to an unqualifiedly expressed Act of Congress by regarding her as a person whose legal personality is merged in that of her husband making the two one.
10
Reversed.
11
Mr. Chief Justice WARREN, with whom Mr. Justice BLACK and Mr. Justice WHITTAKER join, dissenting.
12
If the Court's opinion reflects all that there is to this case, it is astonishing that it has taken so many years for the federal judiciary to loose itself from the medieval chains of the husband-wife conspiracy doctrine. The problem, as the Court sees it, is almost absurdly uncomplicated: The basis for the notion that husband and wife are not subject to a conspiracy charge is that man and wife are one; but we know that man and wife are two, not one; therefore, there is no basis for the notion that husband and wife and not subject to a conspiracy charge. I submit that this simplistic an approach will not do.
13
The Court apparently does not assert that if the husband-wife conspiracy doctrine was widely accepted when the conspiracy statute was passed in 1867, 14 Stat. 484, and therefore was presumably within Congress' understanding of the reach of that statute, nonetheless this Court should now reject the rule because it finds it nonsensical. Instead, the Court's position is that
14
'It would be an idle parade of learning to document the statement that these common-law disabilities (of women) were extensively swept away in our different state of society, both by legislation and adjudication, long before the originating conspiracy Act of 1867 was passed.'
15
But, however rapidly nineteenth century jurisprudence moved toward a recognition of the individuality of women in other areas, it is wholly inaccurate to imply that the law of conspiracy changed apace. In fact, the earliest case repudiating the husband-wife doctrine which the Government has been able to cite is Dalton v. People, 68 Colo. 44, 189 P. 37, which was decided, as the Government puts it, '(a)s early as 1920.' And if the doctrine is an anachronism today, as the Court says, its unusual hardiness is demonstrated by the fact that the decision of the Court represents a departure from the general rule which prevails today in the English-speaking world. As recently as 1957, the Privy Council approved the husband-wife doctrine,1 and other Commonwealth courts are in accord.2 For American decisions, see Annotations 4 A.L.R. 266; 71 A.L.R. 1116; 46 A.L.R.2d 1275.
16
Thus it seems clear that if the 1867 statute is to be construed to reflect Congress' intent as it was in 1867, the Court's decision is erroneous. And I believe that we must focus upon that intent, inasmuch as there is no indication that Congress meant to change the law by the 1948 legislation which re-enacted without material variation the old conspiracy statute.3 Surely when a rule of law is well established in the common law and is part of the legislative purpose when a relevant statute is passed, that rule should not be rejected by this Court in the absence of an explicit subsequent repudiation of it by Congress.4 Consequently, I would be compelled to dissent whether or not I believed the rule to be supported by reason.
17
But more, I cannot agree that the rule is without justification. Inasmuch as Mr. Justice Holmes' observation that it is 'revolting' to follow a doctrine only 'from blind imitation of the past' is hardly novel, the tenacious adherence of the judiciary to the husband-wife conspiracy doctrine indicates to me that the rule may be predicated upon underlying policies unconnected with problems of women's suffrage or capacity to sue. The 'definitive answer' to the question posed by this case is not to be found in a breezy aphorism from the collected papers of Mr. Justice Holmes, for '(g)eneral propositions do not decide concrete cases.'5
18
It is not necessary to be wedded to fictions to approve the husband-wife conspiracy doctrine, for one of the dangers which that doctrine averts is the prosecution and conviction of persons for 'conspiracies' which Congress never meant to be included within the statute. A wife, simply by virtue of the intimate life she shares with her husband, might easily perform acts that would technically be sufficient to involve her in a criminal conspiracy with him, but which might be far removed from the arm'slength agreement typical of that crime. It is not a medieval mental quirk or an attitude 'unnourished by sense' to believe that husbands and wives should not be subjected to such a risk, or that such a possibility should not be permitted to endanger the confidentiality of the marriage relationship. While it is easy enough to ridicule Hawkins' pronouncement in Pleas of the Crown6 from a metaphysical point of view, the concept of the 'oneness' of a married couple may reflect an abiding belief that the communion between husband and wife is such that their actions are not always to be regarded by the criminal law as if there were no marriage.
19
By making inroads in the name of law enforcement into the protection which Congress has afforded to the marriage relationship, the Court today continues in the path charted by the recent decision in Wyatt v. United States, 362 U.S. 525, 80 S.Ct. 901, where the Court held that, under the circumstances of that case, a wife could be compelled to testify against her husband over her objection. One need not waver in his belief in virile law enforcement to insist that there are other things in American life which are also of great importance, and to which even law enforcement must accommodate itself. One of these is the solidarity and the confidential relationship of marriage. The Court's opinion dogmatically asserts that the husband-wife conspiracy doctrine does not in fact protect this relationship, and that hence the doctrine 'enthrone(s) an unreality into a rule of law.' I am not easily persuaded that a rule accepted by so many people for so many centuries can be so lightly dismissed. But in any event, I submit that the power to depose belongs to Congress, not to this Court. I dissent.
1
Mawji v. Reginam, 41 Crim.App.R. 69, 1 All Eng.Rep. (1957) 385.
2
See Kowbel v. The Queen, 110 Can.Crim.Cas. 47 (1954); The King v. McKechie (1926) N.Z.L.R. 1.
3
18 U.S.C. § 371, 18 U.S.C.A. § 371.
4
'There are no judgments in Canada, dealing with this particular matter, but I think it is well settled that since many centuries, it has been the law of England that a husband and wife cannot alone conspire to commit an indictable offence. These views have been expressed during over six centuries, and I would be slow to believe that he hesitations of a few modern writers could justify us to brush aside what has always been considered as the existing law * * *. It may very well be amended by legislative intervention, but as long as it is not, it must be applied.' Kowbel v. The Queen, 110 Can.Crim.Cas. 47, 52 (1954). (Taschereau, J.)
'Had it been the intention of Parliament to abolish the common law defence with which we are concerned it would be expected that plain words dealing expressly with such defence would have been used * * *. I can find nothing in the general words (of the statute) to warrant imputing to Parliament the intention of taking away this ancient common law defence of a husband and wife * * *.' Id., at 54—55. (Cartwright, J.)
5
Lochner v. People of State of New York, 198 U.S. 45, 76, 25 S.Ct. 539, 547, 49 L.Ed. 937 (dissenting opinion).
6
Hawkins, 1 Pleas of the Crown (4th ed. 1762), 192.
| 01
|
364 U.S. 130
80 S.Ct. 1497
4 L.Ed.2d 1617
COMMISSIONER OF INTERNAL REVENUE, Petitioner,v.GILLETTE MOTOR TRANSPORT, INC.
No. 359.
Argued April 21, 1960.
Decided June 27, 1960.
Mr. Wayne G. Barnett, Washington, D.C., for petitioner.
Mr. Joseph A. Maun, St. Paul, Minn., for respondent.
Mr. Justice HARLAN delivered the opinion of the Court.
1
The question in this case is whether a sum received by respondent from the United States as compensation for the temporary taking by the Government of its business facilities during World War II represented ordinary income or a capital gain. The issue involves the construction and application of s 117(j) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 117(j).
2
In 1944, respondent was a common carrier of commodities by motor vehicle. On August 4, 1944, respondent's drivers struck, and it completely ceased to operate. Shortly thereafter, because of the need for respondent's facilities in the transportation of war materiel, the President ordered the Director of the Office of Defense Transportation to 'take possession and assume control of' them. The Director assumed possession and control as of August 12, and appointed a Federal Manager, who ordered respondent to resume normal operations. The Federal Manager also announced his intention to leave title to the properties in respondent and to interfere as little as possible in the management of them. Subject to certain orders given by the Federal Manager from time to time, respondent resumed normal operations and continued so to function until the termination of all possession and control by the Government on June 16, 1945.
3
Pursuant to an Act of Congress creating a Motor Carrier Claims Commission, 62 Stat. 1222, 49 U.S.C.A. § 305 note, respondent presented its claim for just compensation. The Government contended that there had been no 'taking' of respondent's property but only a regulation of it. The Commission, however, determined that by assuming actual possession and control or respondent's facilities, the United States had deprived respondent of the valuable right to determine freely what use was to be made of them. In ascertaining the fair market value of that right, the Commission found that one use to which respondent's facilities could have been put was to rent them out, and that therefore their rental value represented a fair measure of respondent's pecuniary loss. The Commission noted that in other cases of temporary takings, it has typically been held that the market value of what is taken is the sum which would be arrived at by a willing lessor and a willing lessee. Accordingly, it awarded, and the respondent received in 1952, the sum of $122,926.21, representing the fair rental value of its facilities from August 12, 1944, until June 16, 1945, plus $34,917.78, representing interest on the former sum, or a total of $157,843.99.
4
The Commission of Internal Revenue asserted that the total compensation award represented ordinary income to respondent in 1952. Respondent contended that it constituted an amount received upon an 'involuntary conversion' of property used in its trade or business and was therefore taxable as long-term capital gain pursuant to § 117(j) of the Internal Revenue Code of 1939.* The Tax Court, adopting its opinion in Midwest Motor Express, Inc., 27 T.C. 167, affirmed 8 Cir., 251 F.2d 405, which involved substantially identical facts, held that the award represented ordinary income. The Court of Appeals, one judge dissenting, in this instance reversed. 265 F.2d 648. We granted certiorari because of the conflict between the decisions of the two Circuits. 361 U.S. 881, 80 S.Ct. 151, 4 L.Ed.2d 118.
5
Respondent stresses that the Motor Carrier Claims Commission, rejecting the Government's contention that only a regulation, rather than a taking, of its facilities had occurred, found that respondent had been deprived of property, and awarded compensation therefor. That is indeed true. But the fact that something taken by the Government is property compensable under the Fifth Amendment does not answer the entirely different question whether that thing comes within the capital-gains provisions of the Internal Revenue Code. Rather, it is necessary to determine the precise nature of the property taken. Here the Commission determined that what respondent had been deprived of, and what the Government was obligated to pay for, was the right to determine freely what use to make of its transportation facilities. The measure of compensation adopted reflected the nature of that property right. Given these facts, we turn to the statute.
6
Section 117(j), under which respondent claims, is an integral part of the statute's comprehensive treatment of capital gains and losses. Long-established principles govern the application of the more favorable tax rates to long-term capital gains: (1) There must be first, a 'capital asset,' and second, a 'sale or exchange' of that asset (§ 117(a)); (2) 'capital asset' is defined as 'property held by the taxpayer,' with certain exceptions not here relevant (§ 117(a)(1)); and (3) for purposes of calculating gain, the cost or other basis of the property (§ 113(b), 26 U.S.C.A. § 113(b)) must be subtracted from the amount realized on the sale or exchange (§ 111(a), 26 U.S.C.A. § 111(a)).
7
Section 117(j), added by the Revenue Act of 1942, effects no change in the nature of a capital asset. It accomplishes only two main objectives. First, it extends capital-gains treatment to real and depreciable personal property used in the trade or business, the type of property involved in this case. Second, it accords such treatment to involuntary conversions of both capital assets, strictly defined, and property used in the trade or business. Since the net effect of the first change is merely to remove one of the exclusions made to the definition of capital assets in § 117(a)(1), it seems evident that 'property used in the trade or business,' to be eligible for capital-gains treatment, must satisfy the same general criteria as govern the definition of capital assets. The second change was apparently required by the fact that this Court had given a narrow construction to the term 'sale or exchange.' See Helvering v. William Flaccus Oak Leather Co., 313 U.S. 247, 61 S.Ct. 878, 85 L.Ed. 1310. But that change similarly had no effect on the basic notion of what constitutes a capital asset.
8
While a capital asset is defined in § 117(a)(1) as 'property held by the taxpayer,' it is evident that not everything which can be called property in the ordinary sense and which is outside the statutory exclusions qualifies as a capital asset. This Court has long held that the term 'capital asset' is to be construed narrowly in accordance with the purpose of Congress to afford capital-gains treatment only in situations typically involving the realization of appreciation in value accrued over a substantial period of time, and thus to ameliorate the hardship of taxation of the entire gain in one year. Burnet v. Harmel, 287 U.S. 103, 106, 53 S.Ct. 74, 75, 77 L.Ed. 199. Thus the Court has held that an unexpired lease, Hort v. Commissioner, 313 U.S. 28, 61 S.Ct. 757, 85 L.Ed. 1168, corn futures, Corn Products Refining Co. v. Commissioner, 350 U.S. 46, 76 S.Ct. 20, 100 L.Ed. 29 and oil payment rights, Commissioner of Internal Revenue v. P. G. Lake, Inc., 356 U.S. 260, 78 S.Ct. 691, 2 L.Ed.2d 743, are not capital assets even though they are concededly 'property' interests in the ordinary sense. And see Surrey, Definitional Problems in Capital Gains Taxation, 69 Harv.L.Rev. 985, 987—989 and Note 7.
9
In the present case, respondent's right to use its transportation facilities was held to be a valuable property right compensable under the requirements of the Fifth Amendment. However, that right was not a capital asset within the meaning of §§ 117(a)(1) and 117(j). To be sure, respondent's facilities were themselves property embraceable as capital assets under § 117(j). Had the Government taken a fee in those facilities, or damaged them physically beyond the ordinary wear and tear incident to normal use, the resulting compensation would no doubt have been treated as gain from the involuntary conversion of capital assets. See, e.g., Waggoner, 15 T.C. 496; Henshaw, 23 T.C. 176. But here the Government took only the right to determine the use to which those facilities were to be put.
10
That right is not something in which respondent had any investment, separate and apart from its investment in the physical assets themselves. Respondent suggests no method by which a cost basis could be assigned to the right; yet it is necessary, in determining the amount of gain realized for purposes of § 117, to deduct the basis of the property sold, exchanged, or involuntarily converted from the amount received. § 111(a). Further, the right is manifestly not of the type which gives rise to the hardship of the realization in one year of an advance in value over cost built up in several years, which is what Congress sought to ameliorate by the capital-gains provisions. See cases cited, 364 U.S. at page 134, 80 S.Ct. at page 1500. In short, the right to use is not a capital asset, but is simply an incident of the underlying physical property, the recompense for which is commonly regarded as rent. That is precisely the situation here, and the fact that the transaction was involuntary on respondent's part does not change the nature of the case.
11
Respondent lays stress on the use of the terms 'seizure' and 'requisition' in § 117(j). More specifically, the section refers to the 'involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property used in the trade or business and capital assets * * *.' (Emphasis added.) It is contended that the Government's action in the present case is perhaps the most typical example of a seizure or requisition, and that, therefore, Congress must have intended to treat it as a capital transaction. This argument, however, overlooks the fact that the seizure or requisition must be 'of property used in the trade or business (or) capital assets.' We have already shown that § 117(j) does not change the long-standing meaning of these terms and that the property taken by the Government in the present case does not come within them. The words 'seizure' and 'requisition' are not thereby deprived of effect, since they equally cover instances in which the Government takes a fee or damages or otherwise impairs the value of physical property.
12
We conclude that the amount paid to respondent as the fair rental value of its facilities from August 12, 1944, to June 16, 1945, represented ordinary income to it. A fortiori, the interest on that sum is ordinary income. Kieselbach v. Commissioner, 317 U.S. 399, 63 S.Ct. 303, 87 L.Ed. 358.
13
Reversed.
14
Mr. Justice DOUGLAS dissents.
*
Section 117(j) provides as follows:
'Gains and losses from involuntary conversion and from the sale or exchange of certain property used in the trade or business.
'(1) Definition of property used in the trade or business. For the purposes of this subsection, the term 'property used in the trade or business' means property used in the trade or business, of a character which is subject to the allowance for depreciation provided in section 23(l), held for more than 6 months, and real property used in the trade or business, held for more than 6 months, which is not (A) property of a kind which would properly be includible in the inventory of the taxpayer if on hand at the close of the taxable year, or (B) property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business * * *.
'(2) General rule. If, during the taxable year, the recognized gains upon sales or exchanges of property used in the trade or business, plus the recognized gains from the compulsory or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property used in the trade or business and capital assets held for more than 6 months into other property or money, exceed the recognized losses from such sales, exchanges, and conversions, such gains and losses shall be considered as gains and losses from sales or exchanges of capital assets held for more than 6 months. * * *'
| 1112
|
364 U.S. 170
80 S.Ct. 1405
4 L.Ed.2d 1639
SUN OIL COMPANY, Petitioner,v.FEDERAL POWER COMMISSION. SUNRAY MID-CONTINENT OIL CO., Petitioner, v. FEDERAL POWER COMMISSION.
Nos. 321, 335.
Supreme Court of the United States
June 27, 1960
Mr. Howard E. Wahrenbrock, Washington, D.C., for respondent.
Mr. Justice BRENNAN delivered the opinion of the Court.
1
This case presents many of the same issues as Sunray Mid-Continent Oil Co. v. Federal Power Comm., 364 U.S. 137, 80 S.Ct. 1392.
2
Petitioner, Sun Oil Company, is an independent producer making sales of natural gas to transmission companies in interstate commerce for ultimate resale to the public. In 1947 it entered into a contract with the Southern Natural Gas Company, a transmission company, for the sale of natural gas which petitioner controlled in the Gwinville Gas Field in Jefferson Davis and Simpson Counties, Mississippi. The term of the contract was 10 years and the sales price was roughly eight cents per Mcf.
3
After this Court's decisions in Phillips Petroleum Co. v. State of Wisconsin, 347 U.S. 672, 74 S.Ct. 794, 98 L.Ed. 1035, on June 7, 1954, the Commission, in a series of orders, required independent producers engaging in jurisdictional sales on or after the date of the decision to apply for certificates of public convenience and necessity pursuant to § 7(c) of the Natural Gas Act, 15 U.S.C.A. § 717f(c).1 Under protest, petitioner applied for a certificate 'authorizing the sale of natural gas in the circumstances * * * described' in its application. The described circumstances consisted simply of a reference to its contract with Southern Natural, which was at the same time submitted by petitioner as its rate schedule. In an abbreviated and consolidated proceeding disposing of over 100 separate docket certificate applications from 40-odd independent producers, scattered from Colorado and New Mexico to West Virginia, the Commission on May 28, 1956, ordered issued to petitioner and each of the other applicants a certificate of public convenience and necessity, in the terms set out in the margin.2 Petitioner's contract-rate-schedule was accepted as its FPC Gas Rate Schedule No. 55.
4
The 1947 contract between petitioner and Southern Natural expired on August 26, 1957. The parties however entered into a new 20-year contract for continued sale of gas from the same field, commencing on September 3, 1957. The contract called for an initial price increase of roughly 150 per cent, to 20 cents per Mcf.3 Petitioner took the view that the certificate it had received in 1956 was limited in term to the duration of the old contract. It accordingly filed on application for a new certificate covering the new contract, and filed the new contract as an initial rate schedule under the new certificate, pursuant to § 5 of the Act, 15 U.S.C.A. § 717d.4 The Commission, in a letter order of September 12, 1957, rejected the certificate application as duplicative of petitioner's existing certificate to make sales from the field in question, and rejected the rate-schedule filing on the ground that the purported initial rate schedule was actually a change in its existing Schedule No. 55. A motion for reconsideration was later denied; and at the same time the Commission ordered suspended, under § 4(e) of the Act,5 the effectiveness of the rates in the new contract, which petitioner had, after their rejection as an initial rate schedule, filed under protest, as rate changes pursuant to § 4(d). 18 F.P.C. 609, 611. After an application for rehearing of the suspension order was rejected, petitioner petitioned for review of all these orders of the Commission in the Court of Appeals for the Fifth Circuit.6 That court affirmed, by a divided vote. 5 Cir., 266 F.2d 222. We granted certiorari. 361 U.S. 880, 80 S.Ct. 151, 4 L.Ed.2d 117.
5
Petitioner's contention here, as it was below, is that the initial certificate it obtained in 1956 was to remain in effect only during the life of the 1947 contract. This in its view would leave it free to discontinue interstate sales after the 1957 expiration of the contract, or to apply for a new certificate for new sales, and, not unimportantly, file the new sales contract as an initial rate schedule thereunder rather than as a rate change, We reject this contention and affirm the judgment of the Court of Appeals.
6
First. The major part of petitioner's argument is based on a want of authority in the Commission, over objection, to grant an independent producer a certificate for a longer duration than the term of a sales contract which its application seeks permission to fulfill. To be sure, if the Commission had no such authority, we might take pains to read the petitioner's application as seeking a certificate so limited in time, though, as compared with Sunray's in the companion case, it is highly inexplicit as to its desire that only a term certificate be issued. But we have held today in the Sunray case, 364 U.S. at page 137, 80 S.Ct. at page 1392, that in these circumstances the Commission has authority to tender a permanent certificate under an application for a term certificate; and accordingly this keystone of petitioner's argument falls.
7
Second. Of course, if, despite its authority to grant a permanent certificate, the Commission had in 1956 actually granted a term certificate to petitioner, petitioner would after the term have been free to apply for a new certificate to authorize the sale under the new contract. But we agree with the Commission that the 1956 certificate was a permanent one. The application itself, under the construction we have given the statute in Sunray, did not with any explicitness ask for a limited certificate. It asked for one 'authorizing the sale of natural gas' under the 1947 contract; but as we said in Sunray, a permanent certificate would do that. See 364 U.S. at page 149, 80 S.Ct. at page 1399. And the certificate issued makes no reference to any limitation of time. This is in contrast with explicit references to the limitation in those instances where the Commission had previously issued term certificates.7 The Commission's order, which blanketed the many applications before it in the mass proceeding, is no more explicit about limitation than the application, and refers, in fact, to the certificate as both 'authorizing the sale' of natural gas, and authorizing a 'service,' which accords with our construction of § 7(e) in Sunray. Under these circumstances we would hardly see any basis for overturning the Commission's view that no limitation as to time was implied. Cf. Andrew G. Nelson, Inc. v. United States, 355 U.S. 554, 560, 78 S.Ct. 496, 499, 2 L.Ed.2d 484.
8
Moreover, if there were any doubt as to the matter, it would be removed by the fact that the batch of certificates containing petitioner's was issued at a time when the Commission was asserting that it lacked even the power to issue a term certificate. The certificate in question was issued May 28, 1956. The Commission had taken the position that it lacked such authority on July 25, 1955, in Sunray Oil Corp., 14 F.P.C. 877. It was not until October 29, 1956, that judicial rejection of the Commission's position occurred.8 Sunray Mid-Continent Oil Co. v. Federal Power Comm., 10 Cir., 239 F.2d 97, reversed on other grounds, 353 U.S. 944, 77 S.Ct. 792, 1 L.Ed.2d 794. Nothing in petitioner's application shows an attempt to take issue with that conception of the Commission, which of course would mean that every certificate granted under its influence would be intended to be permanent. It would surpass belief to say that under these circumstances the Commission tendered and the applicants received these certificates under the assumption that they were limited in time to the terms of the contracts on which the applications were based.
9
Affirmed.
10
[For dissenting opinion of Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER, Mr. Justice WHITTAKER, and Mr. Justice STEWART join, see ante, p. 159.]
1
The pertinent provisions of § 7(c) are set forth in our opinion in the Sunray case, 364 U.S. at page 149, 80 S.Ct. at page 1399, note 15.
2
'The Commission Orders:
'(A) A certificate of public convenience and necessity be and is hereby issued, upon the terms and conditions of this order, authorizing the sale by Applicant of natural gas in interstate commerce for resale, together with the operation of any facilities, subject to the jurisdiction of the Commission, used for the sale of natural gas in interstate commerce, as hereinbefore described and as more fully described in the application and exhibits in this proceeding.
'(B) The certificate issued herein shall be deemed accepted and of full force and effect, unless refused in writing and under oath by Applicant within 30 days from issuance of this order.
'(C) The certificate is not transferable and shall be effective only so long as Applicant continues the acts or operations hereby authorized in accordance with the provisions of the Natural Gas Act, and the applicable rules, regulations and orders of the Commission.
'(D) The grant of the certificate herein shall not be construed as a waiver of the requirements of Section 4 of the Natural Gas Act (15 U.S.C.A. § 717c), or of Section 154 of the Commission's Rules and Regulations thereunder requiring the filing of rate schedules for the service herein authorized, and is without prejudice to any findings or orders which have been or may hereafter be made by the Commission in any proceeding now pending or hereafter instituted by or against the Applicant. Further, our action in this proceeding shall not foreclose nor prejudice any future proceedings or objection relating to the operation of any price or related provision in the gas purchase contracts herein involved.'
3
There are slight discrepancies in comparison between the old and new rates, due to the fact that they are computed on somewhat different pressure bases. The Commission states that giving effect to the difference would somewhat increase the spread between the old and the new rates.
4
For the pertinent provisions, see the Sunray opinion, 364 U.S. at page 144, 80 S.Ct. at page 1397, note 11.
5
For the provisions, see the Sunray opinion, 364 U.S. at page 145, 80 S.Ct. at page 1397, note 13.
6
The Commission takes the position that an order suspending a rate change under § 4(e) is not directly reviewable in the Court of Appeals. But since the very same issues are presented in this case by the Commission's rejection of the application for a new certificate, and its rejection of the filing of the 1957 contract rate as an initial rate under § 4(c), which orders are concededly reviewable in the Court of Appeals, all the contested issues raised before the Commission were properly subject to review in the proceedings below and here, as the Commission concedes. If the Commission was in error in rejecting the application for a new certificate and the purported initial rate filing, the § 4(e) rate change filing, which the petitioner made under protest, doubtless would be withdrawn.
7
See, e.g., Louisiana-Nevada Transit Co., 2 F.P.C. 546, 549 (10 years); Ray Phebus, 2 F.P.C. 1044, 1045 (8 years); Southern Natural Gas Co., 8 F.P.C. 688, 689 (1 year).
8
While the Court of Appeals there affirmed the Commission's order on other grounds from those on which it had proceeded—for which action the Court of Appeals' judgment was reversed here—the Commission had, before the Court of Appeals, maintained its position that it was without authority to grant a limited term certificate. 239 F.2d, at page 100, note 7. It abandoned that position when application for certiorari was made here. 353 U.S. 944, 77 S.Ct. 792, 1 L.Ed.2d 794.
| 78
|
364 U.S. 59
80 S.Ct. 1554
4 L.Ed.2d 1569
Raymond GONZALES, Jr., Petitioner,v.UNITED STATES of America.
No. 416.
Argued May 2, 1960.
Decided June 27, 1960.
Mr. Hayden C. Covington, Brooklyn, N.Y., for petitioner.
Mr. Daniel M. Friedman, Washington, D.C., for respondent.
Mr. Justice CLARK delivered the opinion of the Court.
1
This is a prosecution for refusal to be inducted into the armed services, in violation of the provisions of the Universal Military Training and Service Act, 62 Stat. 604, 622, 50 U.S.C.App. § 462(a), 50 U.S.C.A.Appendix, § 462(a). Petitioner, who claims to be a conscientious objector, contends that he was denied due process, both in the proceedings before a hearing officer of the Department of Justice and at trial. He says that he was not permitted to rebut before the hearing officer statements attributed to him by the local board, and, further, that he was denied at trial the right to have the Department of Justice hearing officer's report and the original report of the Federal Bureau of Investigation as to his claim—all in violation of the Fifth Amendment. The trial judge decided that the administrative procedures of the Act were fully complied with and refused to require the production of such documents. Petitioner was found guilty and sentenced to 15 months' imprisonment. The Court of Appeals affirmed. 269 F.2d 613. We granted certiorari in view of the importance of the questions in the administration of the Act. 361 U.S. 899, 80 S.Ct. 206, 4 L.Ed.2d 155. We have concluded that petitioner's claims are controlled by the rationale of Gonzales v. United States, 1955, 348 U.S. 407, 75 S.Ct. 409, 99 L.Ed. 467, and United States v. Nugent, 1953, 346 U.S. 1, 73 S.Ct. 991, 97 L.Ed. 1417, and therefore affirm the judgment.
2
Petitioner registered with Local Board No. 9, Boulder, Colorado, on March 17, 1952. His answers to the classification questionaire reflected that he was a minister of Jehovah's Witnesses, employed at night by a sugar producer. He claimed IV—D classification as a minister of religion, devoting a minimum of 100 hours a month to preaching. On November 13, 1952, he was classified in Class I—A. On November 22, 1952, he wrote the Board, protesting this classification. He again stated that he was 'a regular minister'; that he was 'devoting an average of 100 hours a month to actual preaching publicly,' in addition to 50 to 75 hours in other ministerial duties, and that he opposed war in any form. Thereafter he was classified I—O. On April 1, 1953, after some six months of full-time 'pioneering,' petitioner discontinued devoting 100 hours a month to preaching, but failed to so notify his local board. In a periodic review, the local board on July 30, 1953, r classified him I—A and upheld this classification after a personal appearance by petitioner, because of his willingness to kill in defense of his church and home. Upon administrative approval of the reclassification, he was ordered to report for induction on June 11, 1956, but failed to do so. He was not prosecuted, however, and his case was subsequently reopened, in the light of Sicurella v. United States, 1955, 348 U.S. 385, 75 S.Ct. 403, 99 L.Ed. 436. He was again reclassified I—A by the local board. There followed a customary Department of Justice hearing, at which petitioner appeared. In his report to the Attorney General, the hearing officer suggested that the petitioner be exempt only from combatant training and service. On March 21, 1957, however, the Department recommended approval of the I—A classification. Its ground for this recommendation was that, while petitioner claimed before the local board on August 17, 1956 (as evidenced by its memorandum in his file of that date), that he was devoting 100 hours per month to actual preaching, the headquarters of the Jehovah's Witnesses reported that he was no longer doing so and, on the contrary, had relinquished both his Pioneer and Bible Student Servant positions. It reported that he now devoted only some 6 1/2 hours per month to public preaching and from 20 to 25 hours per month to church activities. His claim was therefore 'so highly exaggerated,' the Department concluded, that it 'cast doubt upon his veracity and, consequently, upon his sincerity and good faith.' The appeal board furnished petitioner a copy of the recommendation. In his answer thereto, he advised the Board that he had made no such statement in 1956, and asserted that his only claim to 'pioneering' was in 1952. The appeal board, however, unanimously concurred in the Department's recommendation. Upon return of the file to the local board, petitioner was again ordered to report for induction and this prosecution followed his failure to do so.
3
Petitioner first contends that the Department denied him procedural due process by not giving him timely opportunity, before its final recommendation to the appeal board, to answer the statement of the local board as to his claim of devoting 100 hours to actual preaching. But the statement of the local board attributing this claim to petitioner was in his file. He admitted that he knew it was open to him at all times, and he could have rebutted it before the hearing officer. This he failed to do, asserting that he did not know it to be in his file. Apparently he never took the trouble to find out. Nevertheless he had ample opportunity to contest the statement before the appeal board. After the recommendation of the Department is forwarded to the appeal board, that is the appropriate place for a registrant to lodge his denial. This he did. We found in Gonzales v. United States, supra, that this was the controlling reason why copies of the recommendation should be furnished a registrant. We said there that it was necessary 'that a registrant be given an opportunity to rebut (the Department's) recommendation when it comes to the Appeal Board, the agency with the ultimate responsibility for classification.' 348 U.S. at page 412, 75 S.Ct. at page 412. We fail to see how such procedure resulted in any prejudice to petitioner's contention, which was considered by the appeal board and denied by it. As was said in Gonzales, 'it is the Appeal Board which renders the selective service determination considered 'final' in the courts, not to be overturned unless there is no basis in fact. Estep v. United States, 327 U.S. 114, 66 S.Ct. 423, 90 L.Ed. 567.' 348 U.S., at pages 412—413, 75 S.Ct. at page 412.
4
But there are other contentions which might be considered more difficult. At his trial, petitioner sought to secure through subpoena duces tecum the longhand notes of the Department's hearing officer, Evensen, as well as his report thereon. Petitioner also claimed at trial the right to inspect the o iginal Federal Bureau of Investigation reports to the Department of Justice. He alleged no specific procedural errors or evidence withheld; nor did he elaborate just what favorable evidence the Federal Bureau of Investigation reports might disclose.
5
Section 6(j) of the Act, as we have held, does require the Department's recommendation to be placed in a registrant's file. Gonzales v. United States, supra. But there is nothing in the Act requiring the hearing officer's report to be likewise turned over to the registrant. While the regulations formerly required that the hearing officer's report be placed in the registrant's file, this requirement was eliminated in 1952. Moreover, the hearing officer's report is but intradepartmental, is directed to the Attorney General and, of course, is not the recommendation of the Department. It is not essentially different from a memorandum of an attorney in the Department of Justice, of which the Attorney General receives many, and to which he may give his approval or rejection. It is but part of the whole process within the Department that goes into the making of the final recommendation to the appeal board.
6
It is also significant that neither this report nor the hearing officer's notes were furnished to the appeal board. Hence the petitioner had full opportunity to traverse the only conclusions of the Department on file with the Board. Petitioner knew that the Department's recommendation was based not on the hearing officer's report but on the statement of the local board in his file. Having had every opportunity to rebut the finding of the local board before both the hearing officer and the appeal board, petitioner cannot now claim that he was denied due process because he did not succeed.1
7
It appears to us that the same reasoning applies to the production of the hearing officer's report and notes at the trial. In addition, petitioner has failed to show any particular need for the report and notes. While there are now allegations of the withholding of 'favorable evidence developed at the hearing' and a denial of a 'full and fair hearing,' no such claim was made by petitioner at any stage of the administrative process. Moreover, his testimony at trial never developed any such facts. In the light of these circumstances, as well as the fact that the issue at trial in this respect centered entirely on the Department's recommendation, which petitioner repudiated but which both the appeal board and the courts below found supported by the record, we find no relevancy in the hearing officer's report and notes.
8
Finally petitioner says that he was entitled to inspect the FBI report during the proceedings before the hearing officer as well as at the trial. He did receive a re sume of it—the same that was furnished the appeal board—and he made no claim of its inaccuracy. Even now no such claim is asserted. He bases his present contention on the general right to explore, indicating that he hopes to find some discrepancy in the re sume . But this is fully answered by United States v. Nugent, supra. There we held 'that the statutory scheme for review, within the selective service system, * * * entitles (conscientious objectors) to no guarantee that the FBI reports must be produced for their inspection.' 346 U.S., at pages 5—6, 73 S.Ct. at page 994. Even if we were not bound by Nugent, petitioner here would not be entitled to the eport. The recommendation of the Department—as well as the decision of the appeal board—was based entirely on the local board file, not on an FBI report.
9
As to the production of the report at the trial, it is true that, while that issue was raised in Nugent,2 the Court gave it no separate treatment. However, it would be an act of folly not to require the production of such reports before the appeal boards, whose actions 'are final' and to be overturned 'only if there is no basis in fact for the classification,' Estep v. United States, 1946, 327 U.S. 114, 122, 66 S.Ct. 423, 427, 90 L.Ed. 567, and subsequently to require their production at the trials in the District Courts. We note that the Courts of Appeals have uniformly rejected such claims. This is not to say that there might not be circumstances in a particular case where fairness in the proceeding would require production. No such circumstances, as foundation for a claim of actual unfairness, are before us. Contrariwise, the re sume fully set out petitioner's statement before the local board as to his ministerial activity. Since this is not disputed, and since the Department's recommendation was based on a disparity between petitioner's representations before the local board—not on the FBI report—it follows that the reasoning of Nugent controls.
10
Petitioner raises other points, such as the fact that the prosecutor did not call the members and clerk of the local board to testify at his trial. We find no substance in any of them. Petitioner could have subpoenaed any witnesses he wished at the trial. It was he who was challenging the classification. The Government relied only on the record in the file, all of which was available to petitioner. He makes much of the identity of the language of the statement he is found to have made before the local board on August 17, 1956, as to his ministerial activity, and his earlier letter to the Board in 1952. But all of this was before the appeal board. Moreover, he could have called witnesses to bring out the circumstances surrounding the statement and the letter; the FBI files would have been to no avail. He contented himself, however, with offering only his own denial. The appeal board resolved this issue against him. It found that his claim as to ministerial activity was exaggerated and cast doubt on his sincerity. Both courts below have found 'that the record is not without evidence to support these conclusions.' We will not set aside their findings here.
11
Affirmed.
12
Mr. Chief Justice WARREN, with whom Mr. Justice BLACK, Mr. Justice DOUGLAS, and Mr. Justice BRENNAN join, dissenting.
13
I cannot agree with the decision of the Court, for I believe that petitioner has been deprived of a right which is his by statute and regulation—the right to a full hearing. The facts of this case not only indicate a miscarriage of justice, but also underline the significance of the hearing rights which petitioner was never accorded.
14
Petitioner, a youth of 18 at the time, first claimed exemption as a minister of Jehovah's Witnesses in 1952, describing the extent and nature of his religious activities in a detailed letter to the local selective service board. The board, however, classified him 1—A, and, after an unsuccessful appeal, he was ordered to report for induction. Although he refused to comply with the order, his case was reopened after our decision in Sicurella v. United States, 348 U.S. 385, 75 S.Ct. 403, 406, 99 L.Ed. 436.1 He renewed his claim for exemption, asserting that he was a minister and a conscientious objector, but again the local board ruled adversely. On appeal, the case was referred to the Department of Justice, and petitioner appeared before a hearing officer.
15
The hearing officer's report, as summarized by the Department of Justice, was as follows:
16
'The Hearing Officer reported that registrant gave the appearance of being sincere and firm in his beliefs and that he appeared to be well versed in the scriptures. He found that registrant's objections are based upon his religious training and beliefs but concluded that he is not opposed to participation in war in any form. He further concluded that registrant was opposed to combatant training and service but not opposed to noncombatant training and service. He, therefore, recommended that registrant be exempt from combatant training and service only.'
17
This was hardly an astonishing recommendation, inasmuch as the summaries of two F.B.I. investigative reports were entirely and in my judgment conclusively—favorable. At the time of the first report in 1954, petitioner's grade-school teachers related that he had been 'very cooperative (and) mannerly,' and that he had 'refused to salute the flag on religious grounds.' His former employers 'found him an excellent worker, very serious about his religion and sincere and fair in his dealings.' His neighbors stated that he was 'a quiet and orderly young man whose character and reputation are good,' that he was a 'very active' member of Jehovah's Witnesses, and that they considered him to be 'sincere in his beliefs.' Petitioner's references and his fellow members in the sect said that he was 'a very active, sincere member,' and that they believed he was 'in good faith in his conscientious-objector claim.' The second report, dated 1956, incorporated the first and added the following: Petitioner's employer regarded him as 'an excellent worker, completely reliable, dependable and of excellent morals, character and associates.' His acquaintances, neighbors and religious associates 'all spoke favorably concerning (his) character and reputation, conduct and morals,' and reported that he was 'very active in * * * church affairs * * * and * * * very devoted to his religious beliefs.' They stated that he 'lives up to the teachings of the church and is considered to be sincere in his religious beliefs and in his conscientious-objector claim.' The hearing officer was understandably impressed.
18
However, the Chief of the Conscientious-Objector Section of the Justice Department, who reviewed the file, took a contrary view. He fastened upon a single item in the file—a matter which had neither been mentioned by the hearing officer, nor for all that appears, relied upon by the local board—and recommended to petitioner's appeal board that the claim not be sustained. The item in question was the local board's summary of petitioner's appearance before it in 1956, which the section chief interpreted to state that petitioner at that time had claimed he was still devoting 100 hours a month to preaching, as his 1952 letter to the board had stated.2 Since the investigative reports indicated that petitioner's status as a Jehovah's Witness 'Pioneer' had terminated in 1953, and that from 1954 to 1956 he had devoted only six and one-half hours a month to preaching, the section chief concluded that petitioner's 'claim as to the amount of his religious activities is so highly exaggerated * * * as to cast doubt upon his veracity and, consequently, upon his sincerity and good faith.'
19
Petitioner was informed of this recommendation, and wrote to the appeal board as follows:
20
'* * * I would like to state that I did not at such a time (in 1956) make such a statement or any statement implicating the same. The only time I submitted such information was when I was pioneering that was in the period of October 1, 1952 to April 16, 1953. * * * I would like to make it plain that I in no manner ever exaggerated my report concerning my activities. The reason being more than just my respect for mere man, but as a Christian and Bible Student I realize I stand before the Higher Authorities Jehovah God and Jesus Christ, I am also fully aware of the consequences to liars as stated at Proverbs 6:16, 17, 19 showing God hates a lying tongue. I also realize that for one to lie would make void his Christian conduct and worship. So please consider the information here submitted, I am sure the record stands behind it all.'
21
This statement, set against the background of the information of record regarding petitioner's character, has the ring of truth. Moreover, it is corroborated by the inherent improbability that petitioner's oral statement in 1956 would have been a word-for-word and sentence-for-sentence carbon copy of the written statement he had submitted four years before, down to the request for a personal appearance which he was at that very minute receiving.3 And it should be emphasized that the only evidence that petitioner made such a statement was the board memorandum, set forth in note 2, supra. The most likely explanation is that the local board merely intended to say that petitioner had repeated his basic claim to exemption, and that the board utilized petitioner's prior letter on the assumption that it described that claim. ,But, so far as appears, no one in the Department took the trouble to ask the local board precisely what its memorandum meant.
22
Although the Department's recommendation was based upon this dubious foundation, the appeal board followed that recomme dation. Before the date scheduled for petitioner's induction, he informed the local board that his wife was pregnant, but the board told him that the notification came too late. Petitioner refused to be inducted, was prosecuted, and was convicted.
23
The striking thing about this case—aside from the dishonoring of petitioner's claim—is that he never once received a real opportunity to persuade any Department or selective service officer face to face that he had not lied to the local board, for the accusation was never made until petitioner's opportunity for oral response had passed. The hearing officer never adverted to the matter, and the Department's recommendation was made on grounds entirely different from the matters which had been explored at the hearing. It is true, as I have indicated, that petitioner was allowed to file a rebuttal before the appeal board; but that rebuttal was written, not oral. See 32 CFR § 1626.25(e). Since the issue was one of credibility, it can hardly be maintained that this afforded petitioner a fair opportunity to meet an accusation determinative of his case.
24
Nor can it be said that the Department's recommendation, and the basis therefor, has no significance. On the contrary, the statute makes the Department proceeding an integral and important part of the classification process; for every appeal must be referred to the Department, and, although the appeal board is not bound to follow the Department's recommendation, it is admonished by the statute to 'give consideration to' it.4 The fact appears to be that these recommendations are followed in over 90% of the cases.5 Moreover, the selective service classification which is given administratively cannot effectively be contested in a criminal proceeding in court, in view of the extremely restricted judicial review of that classification. See Witmer v. United States, 348 U.S. 375, 75 S.Ct. 392, 99 L.Ed. 428. These factors reveal the critical importance of the Department's recommendation, and, in turn, of the inadequate procedures under which petitioner was permitted to present his claim to the Department.
25
Congress fully recognized the significance of the Department of Justice stage of the proceeding, for it directed that every appeal be referred to the Department 'for inquiry and hearing,' and commanded the Department, 'after appropriate inquiry,' to 'hold a hearing with respect to the character and good faith of the objections of the person concerned.' An adverse recommendation is to be made only when 'after such hearing the Department of Justice finds that his objections are not sustained.'6 The regulations are in accord. 32 CFR § 1626.25.
26
In requiring a hearing, Congress did not mean, in my opinion, that a guessing contest would suffice. It is true enough that, prior to the hearing, petitioner could have searched the files and discovered the local board memorandum; but this opportunity hardly measures up to the traditional concept of a hearing as involving notice of charges. And I think it is not amiss, in considering this matter, to note that at the time of his appearance before the local board and the hearing officer, petitioner, a laborer with but an eighth-grade education, was a youth of 22 years of age and was unrepresented by counsel. I doubt that anyone would maintain that there would be a hearing in any true sense of the word if such a person were told by the Department that he could appear and say whatever he wished, but that the Department would not indicate to him what it considered pertinent—indeed, what it considered conclusive unless rebutted. Yet in substance this is exactly what happened here. I cannot believe that this procedure comports with Congress' intent.
27
Nor can I reconcile the Court's decision with preced nt. In Morgan v. United States, 304 U.S. 1, 58 S.Ct. 773, 999, 82 L.Ed. 1129, the Court held a government rate order void because the stockyards commission men who were affected by it were not given the 'full hearing' required by the pertinent statute. There was no question of these individuals not being allowed to argue their case. In fact, there had been a full and lengthy proceeding for the introduction of evidence, and in addition the parties had been granted an oral argument before the Acting Secretary of Agriculture. But this Court nonetheless found that there had not been a hearing within the meaning of the statute, and phrased its holding in language which is uniquely apropos here:
28
'The right to a hearing embraces not only the right to present evidence but also a reasonable opportunity to know the claims of the opposing party and to meet them. The right to submit argument implies that opportunity; otherwise the right might be but a barren one. Those who are brought into contest with the Government in a quasi-judicial proceeding aimed at the control of their activities are entitled to be fairly advised of what the Government proposes and to be heard upon its proposals before it issues its final command.' Id., 304 U.S. at pages 18—19, 58 S.Ct. at page 776.
29
I do not believe that the claim of Raymond Gonzales to a full hearing is less worthy of consideration than the rights of the stockyards commission men in Morgan.
30
In sum, I am unwilling to attribute to Congress any intent other than one which would guarantee to persons like petitioner every procedural safeguard which appears reasonably designed to insure a fair determination of their claims. We must remember that we are dealing here with a system of universal military service which touches, directly or indirectly, practically every person and every family in this country. When the people are thus brought into contact with the Government, the importance to the commonweal of insuring their confidence in the justness of the program cannot be overemphasized, for to them it is not merely the fairness of a program which is involved, but the fairness of their Government. The sensitivity of Congress to this need is nowhere better demonstrated than in the statutory provisions concerning the treatment of persons claiming exemption as conscientious objectors. As Congress has recognized, one of the most fundamental aspects of our national ethic is a recognition of the worth of the person, acting according to the dictates of his own conscience. And thus it is that, even in formulating legislation deemed to be of prime importance to the very existence of the Nation, Congress refrained from impressing into military service those who by religious conviction find war an affront to God and morality. The desire of Congress that such beliefs be respected is further reflected by its unwillingness to entrust to a local board the final authority to pass upon the claims of conscientious objectors. Instead, Congress provided for an appeal within the selective service system, together with a hearing in the Department of Justice. In determining what Congress intended by these statutory provisions, we must not forget the nature of the program with which we are dealing, nor must we forget that most of the subjects of governmental action in these cases are inexperienced youths, many only 18 years of age, often unrepresented by attorneys. I am unwilling to give to a statute conceived in such a context a construction which results in a young man of unblemished reputation, who claims religious scruples, being sent to prison for 15 months without having received a full and fair consideration of his case. I say this with assurance that Congress did not intend that these humanitarian benefits of the Act be accorded grudgingly.
31
I dissent.
1
Petitioner points out that the regulations, as we have said, at one time required copies of the hearing officer's report to be placed in the registrant's file. He attributes congressional approval thereto because the selective service laws were re-enacted and amended in 1951 and 1952. The same reasoning would apply, however, to the repeal of the regulation. As we noted, it was stricken by the Attorney General in 1952 and Congress has amended the Act three times subsequently—in 1955, 1957, and 1958. Still it has failed to indicate any objection to the repeal of the regulation.
2
Joint Brief for Respondents, p. 181; United States v. Nugent, 1953, 346 U.S. 1, 73 S.Ct. 991, 97 L.Ed. 1417.
1
In Sicurella, which involved a member of Jehovah's Witnesses, we held that the petitioner's willingness to fight in defense of his 'ministry, Kingdom Inte ests, and * * * his fellow brethren' was not, under the circumstances, a sufficient basis upon which to deny him exemption as a conscientious objector.
2
The local board memorandum reads in full as follows:
'When asked by the members of Local Board No. 9, Boulder, Colorado, if he thought he was entitled to any other classification than that of I—A, Mr. Gonzales replied, 'I am a minister and as such should be classified 4—D. Also, a minister is automatically classified as a conscientious objector.' The board replied that this statement was in error.
'Mr. Gonzales then went on to say that he had always made the claim that he was a inister even at the very beginning of his registration. He still made the statement that if I am a minister I am a conscientious objector.
'When asked if he would participate in the conscientious objector work program, he stated definitely not.
'Mr. Gonzales stated 'I am a regular minister as defined under section 16 G part II of the laws and regulations set out by Selective Service Act of 1948. At present I am devoting an average of 100 hours a month to actual preaching publicly and from house to house, and an additional 50—75 hours in preparation for ministerial duties such as; preparation for home bible studies; calling back on good-will persons; attending congregational meetings, as well as training students to become ministers. I also serve as Stock Servant for the local congregation. As you perhaps already know that the Selective Service National Headquarters has determined that Jehovah's Witnesses and the Watchtower Bible and Tract Society constitutes a recognized religious organization and that all Jehovah's Witnesses who are regularly and customarily teaching and preaching the doctrines and principles of the Bible as advocated by Jehovah's Witnesses as a vocation and not incidentially are entitled to exemption as ministers of religion. These are some of the reasons I request a 4—D classification, so I would like for you to further consider my case as a minister of the gospel or would like to appear in person before the local board members for further consideration or discussion in regard to my case.'
'When asked by the board if he had any further information to submit, he stated he submitted no new evidence except what was stated above, but would like to submit a certificate of marriage as the only new matter to be brought before the board.'
The italicized portion repeats the statement petitioner made in his 1952 letter to the local board. The significance of this repetition is discussed infra.
3
See the italicized portion of the board's memorandum, note 2, supra.
4
62 Stat. 613, as amended, 50 U.S.C.App. § 456(j), 50 U.S.C.A.Appendix, § 456(j).
5
See Smith and Bell, 'The Conscientious-Objector Program—A Search for Sincerity,' 19 U.Pitt.L.Rev. 695, 702.
6
Note 4, supra.
| 23
|
364 U.S. 253
80 S.Ct. 1431
4 L.Ed.2d 1688
Jose Terrones RIOS, Petitioner,v.UNITED STATES of America.
No. 52.
Argued March 29, 1960.
Decided June 27, 1960.
Mr. Harvey M. Grossman, Los Angeles, Cal., for petitioner.
Mr. Malcolm Richard Wilkey, Washington, D.C., for respondent.
Mr. Justice STEWART delivered the opinion of the Court.
1
An indictment filed in the United States District Court for the Southern District of California charged the petitioner with unlawful receipt and concealment of narcotics in violation of 21 U.S.C. § 174, 21 U.S.C.A. § 174. Before trial the petitioner made a motion to suppress for use as evidence a package of heroin which, so a California court had found, Los Angeles police officers had obtained from the petitioner in an unconstitutional search and seizure. After a hearing the District Court denied the motion to suppress, finding that federal agents had not participated in the search, and finding also that the California officers had obtained the evidence in a lawful manner. The package of narcotics was admitted in evidence over the petitioner's renewed objection at his subsequent trial. He was convicted and sentenced to twenty years in prison.
2
The Court of Appeals affirmed the conviction, accepting the District Court's finding that the seizure had been lawful, and holding that in any event illegally seized evidence 'may nevertheless be received in a federal prosecution, if the seizure was made without the participation of federal officials.' 256 F.2d 173, at page 176. Certiorari was granted in an order which limited the questions for consideration to two, 359 U.S. 965, 79 S.Ct. 881, 3 L.Ed.2d 833:
3
'1. Independently of the state court's determination, was the evidence used against petitioner in the federal prosecution obtained in violation of his rights under the Constitution of the United States?
4
'2. If the evidence was unlawfully obtained, was such evidence admissible in the federal prosecution of petitioner because it was obtained by state officers without federal participation?'
5
In Elkins v. United States, 364 U.S. 206, 80 S.Ct. 1437, the Court has answered the second question by holding that evidence seized in an unreasonable search by state officers is to be excluded from a federal criminal trial upon the timely objection of a defendant who has standing to complain. The only question that remains in this case, therefore, is whether the Los Angeles officers obtained the package of heroin 'during a search which, if conducted by federal officers, would have violated the defendant's immunity from unreasonable searches and seizures under the Fourth Amendment.' 364 U.S. at page 223, 80 S.Ct. at page 1447. As in most cases involving a claimed unconstitutional search and seizure, resolution of the question requires a particularized evaluation of the conduct of the officers involved. See Go-Bart Importing Co. v. United States, 282 U.S. 344, 357, 51 S.Ct. 153, 158, 75 L.Ed. 374.
6
At about ten o'clock on the night of February 18, 1957, two Los Angeles police officers, dressed in plain clothes and riding in an unmarked car, observed a taxicab standing in a parking lot next to an apartment house at the corner of First and Flower Streets in Los Angeles. The neighborhood had a reputation for 'narcotics activity.' The officers saw the petitioner look up and down the street, walk across the lot, and get into the cab. Neither officer had ever before seen the petitioner, and neither of them had any idea of his identity. Except for the reputation of the neighborhood, neither officer had received information of any kind to suggest that someone might be engaged in criminal activity at that time and place. They were not searching for a participant in any previous crime. They were in possession of no arrest or search warrants.
7
The taxicab drove away, and the officers followed it in their car for a distance of about two miles through the city. At the intersection of First and State Streets the cab stopped for a traffic light. The two officers alighted from their car and approached on foot to opposite sides of the cab. One of the officers identified himself as a policeman. In the next minute there occurred a rapid succession of events. The cab door was opened; the petitioner dropped a recognizable package of narcotics to the floor of the vehicle; one of the officers grabbed the petitioner as he alighted from the cab; the other officer retrieved the package; and the first officer drew his revolver.1
8
The precise chronology of all that happened is not clear in the record. In their original arrest report the police stated that the petitioner dropped the package only after one of the officers had opened the cab door. In testifying later, this officer said that he saw the defendant drop the package before the door of the cab was opened. The taxi driver gave a substantially different version of what occurred. He stated that one of the officers drew his revolver and 'took hold of the defendant's arm while he was still in the cab.'2
9
A state criminal prosecution was instituted against the petitioner, charging him with possession of narcotics, a felony under California law. Cal. Health and Safety Code, § 11500. At a preliminary hearing the two Los Angeles officers testified as to the circumstances surrounding the arrest and seizure. When the case came on for trial in the Superior Court of Los Angeles County, the petitioner moved to suppress as evidence the package of heroin which the police had seized. On the basis of the transcript of the preliminary hearing, and after brief argument by counsel, the court granted the motion and entered a judgment of acquittal.3
10
Thereafter, one of the Los Angeles officers who had arrested the petitioner discussed the case with his superiors and suggested giving the evidence to United States authorities. He then got in touch with federal narcotics agents and told them about the petitioner's case. This led to the federal prosecution we now review.4
11
In holding that the package of heroin which had been seized by the state officers was admissible as evidence in the federal trial, the District Court placed prime reliance upon the silver platter doctrine, there having been no participation by federal agents in the search and seizure. But the court also expressed the opinion, based upon the transcript of the state court proceedings and additional testimony of the two Los Angeles police officers at the hearing on the motion to suppress, that the officers had obtained the evidence lawfully. The court was of the view that the seizure was permissible as an incident to a legal arrest, or, alternatively, that the petitioner had abandoned the narcotics when he dropped them to the floor of the taxicab. At the time this opinion was expressed, however, the district judge had not yet heard the taxicab driver's version of the circumstances surrounding the arrest and seizure. The driver did not testify until the trial itself. After he had testified, the package of heroin was offered in evidence. The petitioner's counsel objected, and the court overruled the objection without comment. See Gouled v. United States, 255 U.S. 298, 312—313, 41 S.Ct. 261, 266, 65 L.Ed. 647; Amos v. United States, 255 U.S. 313, 316—317, 41 S.Ct. 266, 267—268, 65 L.Ed. 654; Jones v. United States, 362 U.S. 257, 264, 80 S.Ct. 725, 732, 4 L.Ed.2d 697. For all that appears, this ruling may then have been based solely upon the silver platter doctrine. Moreover, the Court of Appeals gave no consideration to the question of the legality of the state search and seizure, relying as it did upon the silver platter doctrine and rejecting the petitioner's contention that the state court's determination of illegality precluded the federal trial court from making an independent inquiry into the matter.
12
With the case in such a posture, we have concluded that the interests of justice will best be served by remanding the case to the District Court. There, free from the entanglement of other issues that have now become irrelevant, the lawfulness of the policemen's conduct can be determined in accord with the basic principles governing the validity of searches and seizures by federal officers under the Fourth Amendment.
13
Under these principles the inquiry in the present case will be narrowly oriented. The seizure can survive constitutional inhibition only upon a showing that the surrounding facts brought it within one of the exceptions to the rule that a search must rest upon a search warrant. Jones v. United States, 357 U.S. 493, 499, 78 S.Ct. 1253, 1257, 2 L.Ed.2d 1514; United States v. Jeffers, 342 U.S. 48, 51, 72 S.Ct. 93, 95, 96 L.Ed. 59. Here justification is primarily sought upon the claim that the search was an incident to a lawful arrest. Yet upon no possible view of the circumstances revealed in the testimony of the Los Angeles officers could it be said that there existed probable cause for an arrest at the time the officers decided to alight from their car and approach the taxi in which the petitioner was riding. Compare Brinegar v. United States, 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879; Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543; Henry v. United States, 361 U.S. 98, 80 S.Ct. 168, 4 L.Ed.2d 134. This the Government concedes.5
14
If, therefore, the arrest occurred when the officers took their positions at the doors of the taxicab, then nothing that happened thereafter could make that arrest lawful, or justify a search as its incident. United States v. Di Re, 332 U.S. 581, 68 S.Ct. 222, 92 L.Ed. 210; Johnson v. United States, 333 U.S. 10, 68 S.Ct. 367, 92 L.Ed. 436; Miller v. United States, 357 U.S. 301, 78 S.Ct. 1190, 2 L.Ed.2d 1332; Henry v. United States, 361 U.S. 98, 80 S.Ct. 168, 4 L.Ed.2d 134. But the Government argues that the policemen approached the standing taxi only for the purpose of routine interrogation, and that they had no intent to detain the petitioner beyond the momentary requirements of such a mission. If the petitioner thereafter voluntarily revealed the package of narcotics to the officers' view, a lawful arrest could then have been supported by their reasonable cause to believe that a felony was being committed in their presence.6 The validity of the search thus turns upon the narrow question of when the arrest occurred, and the answer to that question depends upon an evaluation of the conflicting testimony of those who were there that night.
15
The judgment is vacated, and the case is remanded to the District Court for further proceedings consistent with this opinion.
16
Vacated and remanded.
1
The petitioner later broke free from the policeman's grasp and ran into an alley. There the officer apprehended him after shooting him in the back.
2
'Q. Will you just tell us in your own words, Mr. Smith, what happened immediately after the time you saw Officer Beckmann?
'A. Well, he appeared alongside my taxicab on the right-hand side opposite the front window on the right holding a flashlight in his right hand, I believe, and his billfold in his left. * * *
'The Court: Then what happened?
'The Witness: Then I believe he turned toward the defendant who was riding in the back of the cab and I think he motioned with his billford toward the defendant and he opened the door. Now somewhere along in here I think Beckmann disposed of his flashlight. I didn't notice exactly what happened there.
'By Mrs. Bulgrin:
'Q. What did the defendant do? What was happening as far as the defendant was concerned? A. Well, he appeared to be becoming quite agitated.
'Q. While he was inside the cab? A. While he was inside the cab, yes.
'Q. When the door opened did he get out? A. Well, there are other events before he got out.
'The Court: What were they?
'The Witness: Well, I am trying to get these in the right order. It is difficult because things happened quickly. * * *
'The Witness: Officer Beckmann opened the door and I asked him who he was, that is, he opened the rear door of the taxicab and he said, 'We are police officers.' I just wanted to satisfy my own mind about that. I didn't know whether he was a policeman or a hijacker positively, but I thought that he was a policeman but I wanted to be sure. So he said, 'We are police officers.'
'I thought probably it was just a routine examination. I work the night shift, have for some time, and I have been stopped by the police and they have checked the occupants of my cab. There have been quite a few holdups of taxi drivers and I just thought it was a routine thing.
'But the defendant was getting quite agitated and I noticed at this time that Officer Beckmann had his revolver drawn, which seemed to me somewhat extraordinary just to stop and question an occupany of a cab, and said something to the effect that you are scaring him, what is the big idea, something like that. I don't remember my exact words.
'As I recall then Officer Beckmann took the defendant by the arm—
'By Mrs. Bulgrin:
'Q. That was after the defendant got out of the cab, is that correct? A. It was my impression that Officer Beckmann took hold of the defendant's arm while he was still in the cab. * * *
'The Court: How could you tell the defendant was agitated?
'The Witness: Well, it is a rough impression but I was sufficiently impressed with the fact at the time to protest to Officer Beckmann that he was frightening him, and as far as I knew there was no good cause to be frightening him with a drawn revolver. Maybe it was me who was agitated.'
On cross-examination the taxi driver testified as follows:
'Well, I would say that the most prominent thing in my eyesight at the time was this revolver, which looked the size of a cannon. * * *
'At the time he opened the door, I can't say just at what point in the order of these events he drew his revolver, but at some time before or after the door was opened, while Rios was still sitting in the cab, he drew his revolver.'
3
California follows the so-called exclusionary rule. People v. Cahan, 44 Cal.2d 434, 282 P.2d 905, 50 A.L.R.2d 513. The basis for the trial court's suppression of the evidence is revealed in the following excerpt from the judge's brief oral opinion:
'As I see it, I can't possibly see how this arrest could have originally been attempted under the information the officer very frankly tells us that he had. I don't think any reasonable man would think a felony had been committed because a man comes out of a building, books up the street, and the other way on the street, then looks up First Street, then walks to an automobile in a parking lot, gets in a taxicab and drives away. What in the world there is in that, together with the fact it happens to be First and Hope or First and Flower—I forget which it is—and also that somebody else was arrested in a taxicab, when there are so many hundreds of taxicabs in this community, about three months before, just to state it shows the absurdity of it, insofar as I see, and your motion to suppress the evidence will be granted—* * *
'I find him not guilty as charged. They will get you sometime, Rios; they didn't get you this time but they will sometime.'
4
'Q. What occasioned the presentation of this case to the Federal grand jury after the ruling in the Superior Court across the street, Mr. Beckmann, in this particular case? A. After the ruling in the Superior Court, approximately a week or two weeks later, I conferred with my divisional commander, Captain Clavis, about the case, and at that time I showed him the arrest reports and discussed the case with him.
'He then called Captain Madden of the Narcotics Division of the Los Angeles Police Department. I then went over and talked to Captain Madden of the Los Angeles Police Department. Captain Madden then looked at the arrest report, and I discussed the case with him going to the Federal Narcotics to present the case.
'Q. Whose idea was that? Was that yours or Captain Madden's? A. Mine.
'Q. In other words, did you institute the discussion with Captain Madden? A. Yes. Captain Madden then called Federal Narcotics and I went over to Federal Narcotics and talked to Mr. Goven. At that time I showed him a copy of my arrest report and discussed the case with him.'
5
At the time of the arrest the California statute governing arrest without warrant provided as follows:
'A peace officer may make an arrest in obedience to a warrant delivered to him, or may, without a warrant, arrest a person:
'1. For a public offense committed or attempted in his presence.
'2. When a person arrested has committed a felony, although not in his presence.
'3. When a felony has in fact been committed, and he has reasonable cause for believing the person arrested to have committed it.
'4. On a charge made, upon a reasonable cause, of the commission of a felony by the party arrested.
'5. At night, when there is reasonable cause to believe that he has committed a felony.' Cal.Penal Code, (1956 ed.), § 836 (later amended, Stat.1957, c. 2147, § 2).
6
A passenger who lets a package drop to the floor of the taxicab in which he is riding can hardly be said to have 'abandoned' it. An occupied taxicab is not to be compared to an open field, Hester v. United States, 265 U.S. 57, 44 S.Ct. 445, 68 L.Ed. 898, or a vacated hotel room, Abel v. United States, 362 U.S. 217, 80 S.Ct. 683, 4 L.Ed.2d 668.
| 01
|
364 U.S. 282
80 S.Ct. 1615
4 L.Ed.2d 1720
Robert Leon EUZIEREv.UNITED STATES.
No. 119, Misc.
Supreme Court of the United States
June 27, 1960
Robert Leon Euziere, pro se.
Solicitor General Rankin, Assistant Attorney General Wilkey, Beatrice Rosenberg and Mr. Robert C. Maysack, for the United States.
Petition for writ of certiorari to the United States Court of Appeals for the Tenth Circuit.
PER CURIAM.
1
The motion for leave to proceed in forma pauperis and the petition for writ of certiorari are granted. The judgment is vacated and the case is remanded for consideration in light of Elkins v. United States, 364 U.S. 206, 80 S.Ct. 1437.
2
Mr. Justice FRANKFURTER dissents on the basis of his dissenting opinion in Rios v. United States (Elkins v. United States), 364 U.S. 206, 80 S.Ct. 1453.
| 01
|
364 U.S. 122
80 S.Ct. 1420
4 L.Ed.2d 1603
HERTZ CORPORATION, a corporation (Successor by Merger to J. Frank Connor, Inc., a corporation), Petitioner,v.UNITED STATES of America.
No. 283.
Argued March 30, 1960.
Decided June 27, 1960.
Mr. Edgar Bernhard, Chicago, Ill., for petitioner.
Mr. Howard A. Heffron, Washington, D.C., for respondent.
Mr. Justice CLARK delivered the opinion of the Court.
1
This case, like No. 141, Massey Motors, Inc., v. United States, and No. 143, Commissioner of Internal Revenue v. Evans, 364 U.S. 92, 80 S.Ct. 1411, involves the depreciation allowable on cars and trucks used by petitioner's predecessor in its automobile rental business during the years 1954—1956, inclusive. The taxpayer elected to avail itself of the accelerated method of depreciation provided in § 167(b)(2)1 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 167(b)(2)—known as 'the declining balance method.' Section 167(c) of the Code limits the use of this method to property 'with a useful life of 3 years or more.' The applicable Treasury Regulations on Depreciation, § 1.167(a)—1(b), T.D. 6182, 1956—1 Cum.Bull. 98, issued in 1956, define useful life as the 'period over which the asset may reasonably be expected to be useful to the taxpayer in his trade or business * * *.' Admittedly, if this regulation is valid, taxpayer's passenger cars covered by it would not meet the three-year requirement of § 167(c). The Commissioner denied the petitioner the right to use the declining balance method as to those cars. What we have said in Massey and Evans, supra, disposes of the contention as to the meaning of 'useful life' here. We therefore hold, as did the Court of Appeals, 268 F.2d 604, that the regulation as to 'useful life' involved here is valid and applicable to petitioner.
2
The remaining issues pose questions that relate to the depreciation on the trucks of the taxpayer which concededly had a useful life in excess of three years and were therefore subject to depreciation under the declining balance method authorized under § 167(b)(2). Section 1.167(a)—1(b), issued in 1956 and subsequent to some of the tax years involved in petitioner's claim, was applied by the Commissioner. He ruled that the salvage value of the trucks at the time of disposition must be accounted for in the depreciation equation. Petitioner contended that this resulted in a retroactive application of the regulation and, in any event, it was invalid because it was not authorized under the 1954 Code. After petitioner paid the assessed tax and was denied a refund, this case was filed. The trial court held in favor of petitioner, but the Court of Appeals reversed. It held that the regulation applied and was not retroactive because it was only declaratory of existing law and that salvage value must be computed in the depreciation equation. We granted certiorari, 361 U.S. 811, 80 S.Ct. 88, 4 L.Ed.2d 60, and heard the case as a companion to Massey and Evans, supra. We agree with the result reached by the Court of Appeals.
3
Petitioner succeeded J. Frank Connor, Inc., by merger in July 1956; the taxes accrued against Connor during the fiscal years 1954, 1955, and 1956. Connor was engaged in the business of renting and leasing automobiles and trucks, without drivers, during the pertinent years. In the preparation of its returns for the years ending March 31, 1954, 1955, and 1956, Connor claimed depreciation on its automobiles on the basis of a four-year useful life. The taxes so computed were paid. Subsequently, and after merger, petitioner filed claims for refund on all three years. This claim was based on an election in accordance with § 1.167(c) 1(c) of the Treasury Regulations issued under the 1954 Code, relating to the declining balance method of depreciation.2 We see nothing to the contention of retroactive application. The petitioner chose its own weapon, began the struggle under it and, at this late date, dannot be allowed to abandon it.
4
As to the salvage issue, the petitioner claims that, under the method it chose, the Congress built in an artificial salvage value, i.e., the amount remaining after the application of the depreciation equation. The regulation, however, says that 'in no event shall an asset * * * be depreciated below a reasonable salvage value.' The issue is the narrow one of whether this regulation is valid under the congressional authorization providing that, as to depreciation, the term 'reasonable allowance' shall include an allowance 'computed in accordance with regulations prescribed by the Secretary or his delegate.' Internal Revenue Code of 1954, § 167(b). We think that it is.
5
As we pointed out in the companion cases, the purpose of depreciation accounting is to allocate the expense of using an asset to the various periods which are benefited by that asset. The declining balance method permits a rapid rate of depreciation in the early years of an asset's life. The Congress has permitted under this method an allowance not to exceed twice the 'straight line' rate, which rate was approved in Massey and Evans, supra. In application, the taxpayer computes his straight-line percentage rate and then doubles it for the first year. This doubled rate is then applied each subsequent year to the declining balance. Because of a belief that most assets do lose more value in the earlier years, this method is justified as an attempt to level off the total costs, including maintenance expense, which will generally be greater in the later years. This means, even under the Commissioner's theory, that if an asset is disposed of early in what was expected to be its useful life in the business, the depreciation taken may greatly exceed the difference between the purchase price of the asset and its retirement price; this is a result of the conscious choice to permit rapid depreciation. But this, by hypothesis, is an unusual situation. There is nothing inherent in the declining balance system which requires us to assume that depreciation should be allowed beyond what reasonably appears to be the price that will be received when the asset is retired. This would permit a knowing distortion of the expense of employing the asset in the years after that point is reached. It therefore appears that the interpretation contended for by the taxpayer does not comport with the overriding statutory requirement that the depreciation deduction be a reasonable allowance. § 167(a).
6
In challenging the regulation, the taxpayer relies upon the following excerpt from S.Rep. No. 1622, 83d Cong., 2d Sess. 201:
7
'The salvage value is not deducted from the basis prior to applying the rate, since under this method at the expiration of useful life there remains an undepreciated balance which represents salvage value.'
8
The regulation is consistent with the first part of the sentence, for salvage value is not deducted from the basis prior to the application of the rate. But petitioner contends that the regulation is contrary to the second part of the sentence which appears to equate salvage value under the declining balance method with the mathematical residue which must always exist under the system. This, it appears to us, is but recognition that under this method there is some theoretical salvage value always left. But it only 'represents salvage value' and when true salvage value exceeds this amount, the latter controls. Moreover, the regulation can only carry out the fundamental concept of depreciation—that it is allowable only in such amount, together with salvage value, as will effectuate the recovery of cost over the period of useful life. Furthermore, the House Report said that, 'The changes made by your committee's bill merely affect the timing and not the ultimate amount of depreciation deductions with respect to a property.'3 Senator Humphrey stated that under the declining balance method '(t)he total deduction over the life of the property will not be increased and only the same total sum will be given as a tax deduction * * *.' Hearings before the Senate Committee on Finance, 83d Cong., 2d Sess., Pt. 1, 95. Both of these statements clearly support the regulation, since, if the taxpayer prevailed, it would be able to take a greater total amount of depreciation under the declining balance method than under the straight-line method, even if salvage value under the latter method were limited to scrap value.
9
Petitioner also seems to rely on administrative interpretation. It cites a footnote to what is known as Form 2106, issued by the Commissioner. This footnote to Item No. 41 reads, 'Salvage value is the estimated resale or trade-in value of the vehicle, determined at the time of purchase. If declining balance method of depreciation is used, disregard salvage value in computing depreciation.' Petitioner says this is a direct instruction to 'disregard salvage value' entirely since it is built into the equation. However, we are not inclined to give the footnote such weighty consideration. The form is but a worksheet and the footnote appears to refer to the fact that salvage value is disregarded at the outset of the application of the depreciation equation, as provided by the Code. We likewise place no weight in the remaining peripheral arguments of the petitioner that salvage must be ignored altogether in the application of the declining balance method.
10
The judgment is affirmed.
11
Affirmed.
12
(For opinion of Mr. Justice HARLAN, joined by Mr. Justice WHITTAKER and Mr. Justice STEWART, see 364 U.S. page 107, 80 S.Ct. 1424.)
13
(For views of Mr. Justice DOUGLAS, see 364 U.S. 121, 80 S.Ct. 1431.)
1
The statute provides:
'(b) * * * the term 'reasonable allowance' * * * shall include * * * an allowance computed in accordance with regulations prescribed by the Secretary or his delegate, under any of the following methods:
'(1) the straight line method,
'(2) the declining balance method, using a rate not exceeding twice the rate which would have been used had the annual allowance been computed under the method described in paragraph (1), * * *.'
The applicable regulation provides:
§ 1.167(b)—2. DECLINING BALANCE METHOD.—(a) Application of method.—Under the declining balance method a uniform rate is applied each year to the unrecovered cost or other basis of the property. The unrecovered cost or other basis is the basis provided by section 167(f), adjusted for depreciation previously allowed or allowable, and for all other adjustments provided by section 1016 and other applicable provisions of law. The declining balance rate may be determined without resort to formula. Such rate determined under section 167(b)(2) shall not exceed twice the appropriate straight line rate computed without adjustment for salvage. While salvage is not taken into account in determining the annual allowances under this method, in no event shall an asset (or an account) be depreciated below a reasonable salvage value. See section 167(c) and § 1.167(c)—1 for restrictions on the use of the declining balance method.'
2
'§ 1.167(c)—1. LIMITATIONS ON METHODS OF COMPUTING DEPRECIATION UNDER SECTION 167(b)(2), (3), AND (4).
'(c) Election to use methods.—Subject to the limitations set forth in paragraph (a) above, the methods of computing the allowance for depreciation specified in section 167(b)(2), (3), and (4) may be adopted without permission and no formal election is required. In order for a taxpayer to elect to use these methods for any property described in paragraph (a) above, he need only compute depreciation thereon under any of these methods for any taxable year ending after December 31, 1953, in which the property may first be depreciated by him. The election with respect to any property shall not be binding with respect to acquisitions of similar property in the same year or subsequent year which are set up in separate accounts. If a taxpayer has filed his return for a taxable year ending after December 31, 1953, for which the return is required to be filed on or before September 15, 1956, an election to compute the depreciation allowance under any of the methods specified in section 167(b) or a change in such an election may be made in an amended return or claim for refund filed on or before September 15, 1956.'
3
H.R.Rep. No. 1337, 83d Cong., 2d Sess. 25.
Senator Millikin made a similar statement on the floor of the Senate, but preceded it with the observation that depreciation cannot exceed the cost of the asset. The way in which the Senator presented the matter suggests that he did not mean that total depreciation taken could not be greater under the declining balance method of depreciation than under the other accepted methods. However, no such qualification limits the impact of the statement in the House Report.
| 1112
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364 U.S. 40
80 S.Ct. 1563
4 L.Ed.2d 1554
Cecil W. ARMSTRONG et al., Petitioners,v.UNITED STATES of America.
No. 270.
Argued March 28, 1960.
Decided June 27 1960.
Mr. Burton R. Thorman, Washington, D.C., for petitioners.
Mr. Samuel D. Slade, Washington, D.C., for respondent.
Mr. Justice BLACK delivered the opinion of the Court.
1
In this action petitioners assert materialmen's liens under state law for materials furnished to a prime contractor building boats for the United States, and seek just compensation under the Fifth Amendment for the value of their liens on accumulated materials and uncompleted work which have been conveyed to the United States.
2
The United States entered into a contract with the Rice Shipbuilding Corporation for the construction of 11 navy personnel boats. The contract provided that in the event of default by Rice, the Government could terminate the contract and require Rice to transfer title and deliver to the Government all completed and uncompleted work together with all manufacturing materials acquired by Rice for building the boats. Petitioners furnished various materials to Rice for use in construction of the boats. Upon Rice's default, the Government exercised its option as to 10 of the boat hulls still under construction; Rice executed an itemized 'Instrument of Transfer of Title' conveying to the United States the hulls and all manufacturing materials then on hand; and the Government removed all of these properties to out-of-state naval ship-yards for use in the completion of the boats. When the transfer occurred, petitioners had not been paid for their materials and they have not been paid since. Petitioners therefore contended that they had liens under Maine law which provides that '(w)hoever furnishes labor or materials for building a vessel has a lien on it therefor, which may be enforced by attachment thereof within 4 days after it is launched * * *. He also has a lien on the materials furnished before they become part of the vessel, which may be enforced by attachment * * *.' Maine Rev.Stat.1954, c. 178, § 13.
3
Claiming valid liens on the hulls and manufacturing materials at the time they were transferred by Rice to the United States, petitioners asserted that the Government's action destroyed their liens by making them unenforceable and that this constituted a taking of their property without just compensation in violation of the Fifth Amendment.1 The Court of Claims, relying on United States v. Ansonia Brass & Copper Co., 218 U.S. 452, 31 S.Ct. 49, 54 L.Ed. 1107, held that petitioners never acquired valid liens on the hulls or the materials transferred to the Government and that therefore there had been no taking of any property owned by them. Ct.Cl., 169 F.Supp. 259. We granted certiorari. 361 U.S. 812, 80 S.Ct. 86, 4 L.Ed.2d 60.
I.
4
The Court of Claims reached its conclusion from the correct premise that laborers and materialmen can acquire no liens on a 'public work.' United States for Use of Hill v. American Surety Co., 200 U.S. 197, 203, 26 S.Ct. 168, 170, 50 L.Ed. 437; Equitable Surety Co. v. United States, to Use of W. McMillan & Son, 234 U.S. 448, 455, 34 S.Ct. 803, 805, 58 L.Ed. 1394; United States v. Munsey Trust Co., 332 U.S. 234, 241, 67 S.Ct. 1599, 1602, 91 L.Ed. 2022. It reasoned that because the contract between Rice and the United States contemplated that title to the vessels would eventually vest in the Government, the Government had 'inchoate title' to the materials supplied by petitioners, rendering such materials 'public works' immune from the outset to petitioners' liens. We cannot agree that a mere prospect that property will later be owned by the United States renders that property immune from otherwise valid liens.
5
The sovereign's immunity against materialmen's liens has never been extended beyond property actually owned by it. The Ansonia case itself, upon which the Court of Claims relied, makes this clear, here in dealing with one aspect of the issues there involved, the Court said:
6
'We are not now dealing with the right of a state to provide for such liens while property to the chattel in process of construction remains in the builder, who may be constructing the same with a view to transferring title therein to the United States upon its acceptance under a contract with the government. We are now treating of property which the United States owns. Such property, for the most obvious reasons of public policy, cannot be seized by authority of another sovereignty against the consent of the government.' 218 U.S. at page 471, 31 S.Ct. at page 54.
7
The terms of the contract between Rice and the United States show conclusively that Rice, not the United States, had title to the property when petitioners furnished their materials. The agreement provided for delivery, preliminary acceptance, and final acceptance of the boats, the contractor to remain responsible for all supplies until delivery. The contractor was required to insure the property for the Government's benefit only to the extent of progress payments made and materials furnished by the Government. The very clause here invoked by the Government provided that upon default and termination of the contract the Government might 'require the Contractor to transfer title and deliver' the work, supplies and materials on hand. (Emphasis added.) While the Government was obliged to make progress payments based on the percentage of the work completed, nothing in the contract provided that ownership of the portion of the work paid for should vest in the United States. On the contrary, it was stipulated that all progress payments should be secured by a paramount government lien on the property. And finally, the contractor was required to discharge immediately any lien or right in rem asserted against the property. In their totality, these provisions clearly recognize that title was to remain in Rice during performance of the work, and show that private liens could attach to the property while Rice owned it.
8
We think, therefore, that the Court of Claims was in error in holding as it did. This, however, does not end the case in petitioners' favor since the United States urges other grounds to support its judgment.
II.
9
It is contended that petitioners' asserted liens gave them no compensable property interests within the meaning of the Fifth Amendment. Under Maine law, materialmen become entitled to a lien when they furnish supplies; however, the lien must subsequently be enforced by attachment of the vessel or supplies. There is no allegation that any of the petitioners had taken steps to attach the uncompleted work. Nevertheless, they were entitled to resort to the specific property for the satisfaction of their claims. That such a right is compensable by virtue of the Fifth Amendment was decided in Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 55 S.Ct. 854, 79 L.Ed. 1593. In that case, a bank acquired a mortgage which under state law constituted a lien enforceable only by suit to foreclose. Subsequently, Congress amended the Bankruptcy Act so as to deprive mortgagees of substantial incidents of their rights to resort to mortgaged property. This Court held that the bank's property had been taken without just compensation in violation of the Fifth Amendment. No reason has been suggested why the nature of the liens held by petitioners should be regarded as any different, for this purpose, from the interest of the bank held compensable in the Radford case.
10
The Government, however, suggests that because it held a paramount lien on the property to secure its progress payments, petitioners' claimed liens were in fact worthless. Petitioners, on the other hand, argue that when the Government chose to acquire title to the property rather than to enforce its lien, the lien merged with the title, thus making petitioners' liens paramount, and that even if it did not, and th ir liens remained subordinate to that of the Government, the value of the hulls and materials would have been sufficient to satisfy the Government's claims and some or all of petitioners' claims as well.
11
We need not decide whether, as a matter of law, the Government's lien 'merged' in its title. At the very least, petitioners, prior to the transfer of title, had the right to whatever proceeds the property might bring over and above the Government's claim to the amount of its progress payments.2 By the date of default, Rice had expended some $198,000, while the Government had advanced only about $141,000 in progress payments. We have no way of knowing what the property would have brought had it been sold, but it cannot be said with certainty that it would have brought no more than the amount of the Government's claim. Moreover, petitioners themselves might have been able to purchase the property and realize some amount on their claims after the Government's claims had been satisfied. While these factors may present a difficult problem of valuation, we cannot say on this record that petitioners' interests were valueless.3
12
The Government also seems to suggest that because the contract between Rice and the United States expressly gave the Government the option of requiring a conveyance of title upon default, petitioners' liens attached subject to that limitation. Petitioners, however, were not parties to the contract. Furthermore, their liens attached by operation of law and nothing in the record indicates that the scope of such liens is affected by contractual arrangements into which the owner of the property may have entered.
13
We conclude, therefore, that on this record petitioners must be considered to have had compensable property interests within the meaning of the Fifth Amendment prior to transfer of title to the Government.
III.
14
The final question is whether the Government's action constituted a 'taking' of petitioners' property interests within the meaning of the Fifth Amendment. Before the United States compelled Rice to transfer the hulls and all materials held for future use in building the boats, petitioners had valid liens under Maine law against both the hulls and whatever unused materials which petitioners had furnished. Before transfer these lines were enforceable by attachment against both the hulls and all materials. After transfer to the United States the liens were still valid, United States v. State of Alabama, 313 U.S. 274, 281 282, 61 S.Ct. 1011, 1013—1014, 85 L.Ed. 1327, but they could not be enforced because of the sovereign immunity of the Government and its property from suit.4 The result of this was a destruction of all petitioners' property rights under their liens, although, as we have pointed out, the liens were valid and had compensable value. Petitioners contend that destruction of their liens under the circumstances here is a 'taking.' The United States denies this, largely on the premise that inability of petitioners to enforce their liens because of immunity of the Government and its property from suit cannot amount to a 'taking.'
15
The Government argues that the Ansonia case is dispositive of this Fifth Amendment issue. In that case, the contract between the shipbuilder and the United States provided, as to one of the ships contracted for, the dredge Benyuard, that as progress payments were made, the portion of the work paid for should become the property of the United States. Subcontractors claimed liens on the uncompleted vessel under the Virginia supply-lien law. This Court merely held that, as the property had passed to the United States by virtue of the terms of the contract, no lien could be enforced against it. No question was raised as to the rights possessed by the subcontractors prior to the acquisition of title by the United States nor as to whether that event entitled them to just compensation under the Fifth Amendment. There is, to be sure, reason to believe that the subcontractors' liens in that case, like those of petitioners here, did attach as soon as materials were furnished, which would necessarily be prior to the making of a progress payment for the portion of the work incorporating those materials and the consequent passage of title to the United States. See Hawes & Co. v. Wm. R. Trigg Co., 110 Va. 165, 185—186, 199, 65 S.E. 538, 546—547, 551—552. But the Fifth Amendment question was not raised or passed upon. In these circumstances we cannot regard the court's decision as dispositive on the precise point now under consideration, and must proceed to decide that question.5
16
We hold that there was a taking of these liens for which just compensation is due under the Fifth Amendment. It is true that not every destruction or injury to property by governmental action has been held to be a 'taking' in the constitutional sense. Omnia Commercial Co. v. United States, 261 U.S. 502, 508—510, 43 S.Ct. 437, 438, 67 L.Ed. 773. This case and many others reveal the difficulty of trying to draw the line between what destructions of property by lawful governmental actions are compensable 'takings' and what destructions are 'consequential' and therefore not compensable. See, e.g., United States v. Central Eureka Mining Co., 357 U.S. 155, 78 S.Ct. 1097, 2 L.Ed.2d 1228; United States v. Causby, 328 U.S. 256, 66 S.Ct. 1062, 90 L.Ed. 1206; United States v. General Motors Corp., 323 U.S. 373, 65 S.Ct. 357, 89 L.Ed. 311; United States v. Sponenbarger, 308 U.S. 256, 60 S.Ct. 225, 84 L.Ed. 230; Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 67 L.Ed. 322; Louisville & Nashville R. Co. v. Mottley, 219 U.S. 467, 31 S.Ct. 265, 55 L.Ed. 297; Legal Tender Cases, 12 Wall. 457, 551, 20 L.Ed. 287.
17
The total destruction by the Government of all value of these liens, which constitute compensable property, has every possible element of a Fifth Amendment 'taking' and is not a mere 'consequential incidence' of a valid regulatory measure. Before the liens were destroyed, the lienholders admittedly had compensable property. Immediately afterwards, they had none. This was not because their property vanished into thin air. It was because the Government for its own advantage destroyed the value of the liens, something that the Government could do because its property was not subject to suit, but which no private purchaser could have done. Since this acquisition was for a public use, however accomplished, whether with an intent and purpose of extinguishing the liens or not, the Government's action did destroy hem and in the circumstances of this case did thereby take the property value of those liens within the meaning of the Fifth Amendment. Neither the boats' immunity, after being acquired by the Government, from enforcement of the liens nor the use of a contract to take title relieves the Government from its constitutional obligation to pay just compensation for the value of the liens the petitioners lost and of which loss the Government was the direct, positive beneficiary.
18
The Fifth Amendment's guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. A fair interpretation of this constitutional protection entitles these lienholders to just compensation here. Cf. Thibodo v. United States, 9 Cir., 187 F.2d 249.
19
The judgment is reversed and the cause is remanded to the Court of Claims for further proceedings to determine the value of the property taken.
20
Reversed and remanded.
21
Mr. Justice STEWART concurs in the result.
22
Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER and Mr. Justice CLARK join, dissenting.
23
I agree that petitioners had valid liens on the uncompleted work and supplies at the time the property was transferred to the Government, and that such liens represented compensable property interests within the meaning of the Fifth Amendment. But the Fifth Amendment renders the Government liable only if there was a 'taking' by it of such interests. I cannot conclude, as the Court so readily does, that simply because the value of those liens was 'destroyed' there was a 'taking' of petitioners' property.
24
As the Court concedes, not every governmental act which ultimately destroys property rights constitutes a compensable taking of those rights. We are not here dealing with a situation in which the United States has condemned the full fee interest in property, thus purporting to extinguish all claims therein. In such a case, it may well be that lienholders are entitled to compensation for the value of their interests. See Thibodo v. United States, 10 Cir., 187 F.2d 249; cf. United States v. General Motors Corp., 323 U.S. 373, 377—378, 65 S.Ct. 357, 359, 89 L.Ed. 311. In this instance, however, the Government has not exercised its power of eminent domain with the intent and purpose of extinguishing petitioners' liens; indeed it has not exercised its power of eminent domain at all. All it has done is to exercise its undoubted power to contract and to acquire title to the property, the consequent effect of which is to render the liens unenforceable because of the independent principle of sovereign immunity. The very nature of the doctrine of sovereign immunity precludes regarding its interposition as a Fifth Amendment 'taking.' It seems to me that a Court which, having established this immunity, then declares that the Government must pay for exercising it, is effectively negativing it.
25
I would affirm.
1
The relevant portion of the Fifth Amendment provides, '* * * nor shall private property be taken for public use, without just compensation.'
2
While Rice was also liable to the Government for an additional amount approximating.$146,000 representing the excess cost to the Government of having the boats completed, the contract does not provide, and there is no allegation, that this amount was secured by a lien on the property.
3
Questions of value of the liens were not determined by the Court of Claims since it entered a summary judgment for the United States for reasons stated on page 42 of 364 U.S., page 1565 of 80 S.Ct., supra.
4
United States v. Ansonia Brass & Copper Co., 218 U.S. 452, 31 S.Ct. 49, 54 L.Ed. 1107; United States for Use of Hill v. American Surety Co., 200 U.S. 197, 26 S.Ct. 168, 50 L.Ed. 437; Equitable Surety Co. v. United States, to Use of W. McMillan & Son, 234 U.S. 448, 34 S.Ct. 803, 58 L.Ed. 1394; United States v. Munsey Trust Co., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed. 2022 The Siren, 7 Wall. 152, 19 L.Ed. 129; State of Minnesota v. United States, 305 U.S. 382, 59 S.Ct. 292, 83 L.Ed. 235; United States v. State of Alabama, 313 U.S. 274, 61 S.Ct. 1011, 85 L.Ed. 1327.
5
The Government also cites Mullen Benevolent Corp. v. United States, 290 U.S. 89, 54 S.Ct. 38, 78 L.Ed. 192. The facts there, however, revealed that the Government's action could not have destroyed any liens existing at the time the Government acquired the land because as the Court said, 'None remained upon the land, when the purchases were consummated,' 290 U.S., at page 95, 54 S.Ct. at page 41.
| 34
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364 U.S. 263
80 S.Ct. 1463
4 L.Ed.2d 1708
OHIO ex rel. EATON, Appellant,v.PRICE, Chief of Police.
No. 30.
Argued April 19, 1960.
Decided June 27, 1960.
Messrs. Greene Chandler Furman and Elbert E. Blakely, Washington, D.C., and Mr. Frank W. Vanderhoof, Washington, D.C., Mr. Asher Bogin, Dayton, Ohio, and Mr. Stanley Robinson, Jr., Columbus, Ohio, of counsel, for appellant.
Mr. Charles S. Rhyne, Washington, D.C., and Mr. Joseph P. Duffy, Dayton, Ohio, for appellee.
PER CURIAM.
1
The judgment is affirmed by an equally divided Court.
2
Mr. Justice STEWART took no part in the consideration or decision of this case.
3
Mr. Justice BRENNAN, with whom THE CHIEF JUSTICE, Mr. Justice BLACK, and Mr. Justice DOUGLAS join.
4
The judgment of the Ohio Supreme Court in this case is being affirmed ex necessitate, by an equally divided Court. Four of the Justices participating are of opinion that the judgment should be affirmed, while we four think it should be reversed. Accordingly, the judgment is without force as precedent. The Antelope, 10 Wheat. 66, 126, 6 L.Ed. 268; Etting v. Bank of the United States, 11 Wheat. 59, 78, 6 L.Ed. 419. In such circumstances, as those leading cases indicate, the usual practice is not to express any opinion, for such an expression is unnecessary where nothing is settled. But in this case, even before the cause was argued, four Justices made public record of their votes to affirm the judgment, and their basis therefor. 360 U.S. 246, 248—249, 79 S.Ct. 978, 979, 3 L.Ed.2d 1200. These four Justices stated that they were 'of the view that this case is controlled by, and should be affirmed on the authority of, Frank v. State of Maryland, 359 U.S. 360, 79 S.Ct. 804, (3 L.Ed.2d 877).' Their opinion further states that they deemed 'the decision in the Maryland case to be completely controlling upon the Ohio decision.' In a longer opinion, one of the four Justices developed his views on the merits further. 360 U.S., at pages 249—250, 79 S.Ct. at pages 979—980. The usual practice of not expressing opinions upon an equal division has the salutary force of preventing the identification of the Justices holding the differing views as to the issue, and this may well enable the next case presenting it to be approached with less commitment. But the action we have described prevents this from being the case here; and so the reason for the usual practice is not applicable. Accordingly, since argument has been had, and votes on the merits are now in order, we express our opinion.1
5
This case involves Earl Taylor, who is in his sixties and has been working at his trade of plumber for 40 years, and the home at 130 Henry Street, in Dayton, Ohio, which he and his wife bought and in which they have lived for over a decade. He describes it as a little cottage, all in one floor, with a front room, a middle room, two bedrooms, a dining room and a little utility room, and a bathroom and a little kitchen at the back. What was evidently Taylor's first involvement with the criminal law occurred in this fashion. One day three men who were housing inspectors came to his door, and said they wanted to come into the house and go through the house and inspect the inside of the house. They had no credentials, only a sheet of yellow note paper, and Taylor said to them, 'You have nothing to show me you have got a right to go through my house.' The response was, 'We don't have to have, according to the law passed four years ago.'2
6
RepliedTaylor, 'That don't show me that you got anything in there that you want for inspection, and, further, I don't have nothing in my house that has to be inspected.' The man said, 'Well, you know, according to this ordinance, that we got a right to go through your house and inspect your house.' 'No, I don't think you have, unless you got a search warrant,' answered Taylor. This has been his position ever since, and it is the issue that divides us.
7
The men went away, but later there was a second attempt to gain access to Taylor's house, and a telephone call to the same end. Taylor said, 'I don't see what right that you got coming into my house. Until you show me in writing, or some kind of facts, that you got a right to come into my house and inspect the house, I will not let you in.' The third time the men came, there were two of them. One had some sort of credential with a photograph on it. Neither had a warrant of any kind. One said the housing inspector wanted to inspect Taylor's house. Taylor said, 'What do you have in there that you want to inspect? I have nothing in my house for inspection.' He was told: 'We have a right to come in your house, go through your house, inspect the whole inside of your house.' Taylor's reaction to this was: 'You have nothing wrote down on paper. You don't have a thing to show me you are going to come in there to inspect anything, and as far as that goes you aren't coming in unless you have a search warrant to get in.' The men never came back with a search warrant, but as they left, one said, 'If you ain't going to let us in, we are entitled to get in, and if you don't let us in, I am going to leave it up to the Prosecutor.' Whereupon Taylor said: 'I don't care what you do. You aren't coming in.' Taylor later testified that then the man 'walked over and got in his car and that was the end of it.' But it was not. Taylor and his wife each received through the mail a registered letter from the city prosecutor, notifying them to appear at his office to answer a complaint against them. They did not appear; whereupon the police came to Taylor's home, and finally served him with a warrant—a warrant to appear in court to answer criminal charges brought against him for failing to admit the inspectors to his home. He appeared in court and was held for trial; and not being then able to make bond of $1,000, he was committed to jail, to await trial on the charges, which could have resulted in a fine of $200 and an incarceration of 30 days for each day's recalcitrance. One Eaton, an attorney, filed a petition for habeas corpus on Taylor's behalf in the State Common Pleas Court.3 The Common Pleas Court found the ordinance unconstitutional, and discharged Taylor from custody; but the Court of Appeals reversed, 105 Ohio App. 376, 152 N.E.2d 776, and its judgment was upheld by the Ohio Supreme Court. 168 Ohio St. 123, 151 N.E.2d 523. We noted probable jurisdiction. 360 U.S. 246, 79 S.Ct. 978, 3 L.Ed.2d 1200.
8
The municipal ordinance in question provides numerous requirements for dwellings, deemed by the city to be appropriate in the interests of the public health, safety and comfort. Several of the requirements apply to private dwelling houses, such as the Taylors'. None of these requirements is at all questioned here. What is questioned is the ordinance provision, Code of General Ordinances § 806—30, authorizing the Housing Inspector to enter at any reasonable hour any dwelling whatsoever, and commanding the owner or occupant to give him free access at any reasonable hour for the purpose of his inspection. It was armed with the naked authority of this provision, and not with any warrant (the ordinance provides for none) that the inspectors approached Taylor's door, even after he had made clear to them his intent not to admit them on this basis. Neither before a magistrate empowered to issue warrants, nor in this proceeding, have the inspectors offered any justification for their entry. They have not shown any probable cause or grounds to believe that a proscribed condition existed within the cottage, or even that they had suspicion or complaint thereof. They have not shown that they desired to make the inspection in pursuance of a regular, routinized spot check of individual homes, or in pursuance of a planned blanket check of all the homes in a particular neighborhood, or the like.4 These might be said to be the usual reasons which would impel inspectors to seek to gain admittance to a private dwelling; but none of them is shown by the record to have been present. Most significantly, on the initial recalcitrance of Taylor, the inspectors were not required to, and did not, repair before any independent magistrate to demonstrate to him their reasons for wanting to gain access to Taylor's cottage, and to obtain his warrant for their entry—the authorization on which Taylor was insisting. The judgment below is, on this record, bottomed on the proposition that the inspectors have the right to enter a private dwelling, and the householder can be bound under criminal penalties to admit them, though there is demonstration neither of reason to believe there exists an improper condition within the dwelling, nor of the existence of any plan of inspection, apart from such a belief, which would include the inspection of the dwelling in question. We think that affirmance of this judgment would reduce the protection of the householder 'against unreasonable searches' to the vanishing point.
9
In support of the judgment below, much reliance at the bar has been put on Frank v. Maryland, 359 U.S. 360, 79 S.Ct. 804, 3 L.Ed.2d 877. We would not be candid to say that on its own facts we have become reconciled to that judgment. To us, it remains 'the dubious pronouncement of a gravely divided Court.' Cooper v. Aaron, 358 U.S. 1, 24, 78 S.Ct. 1401, 1413, 3 L.Ed.2d 5, 19 (concurring opinion). 'A single decision by a closely divided court, unsupported by the confirmation of time, cannot check' the course of constitutional adjudication here. See Kovacs v. Cooper, 336 U.S. 77, 89, 69 S.Ct. 448, 454, 455, 93 L.Ed. 513 (concurring opinion). We continue to agree with Judge Prettyman in District of Columbia v. Little, 85 U.S.App.D.C. 242, 246, 178 F.2d 13, 17, 13 A.L.R.2d 954, affirmed on other grounds, 339 U.S. 1, 70 S.Ct. 468, 94 L.Ed. 599, that: 'To say that a man suspected of crime has a right to protection against search of his home without a warrant, but that a man not suspected of crime has no such protection, is a fantastic absurdity.' Nothing demonstrated in the Frank case indicates otherwise to us. But the present case goes much further than Frank; and as to the reasonableness of searches, it has been stressed that factual differences may weigh heavily. Go-Bart Importing Co. v. United States, 282 U.S. 344, 357, 51 S.Ct. 153, 158, 75 L.Ed. 374. The search in Frank was for the nesting place of rats. There were ample grounds on the part of the inspecting officer to believe its existence in the house. There had been complaint of rats in the neighborhood; and an external inspection of the house in question revealed that it was 'in an 'extreme state of decay" and that behind it there was a pile of 'rodent feces mixed with straw and trash and debris to approximately half a ton.' See 359 U.S., at page 361, 79 S.Ct. at page 806. The case was decided by the narrowest of divisions; and one member of the majority found it necessary to express in a concurring opinion that the sole purpose of the search was an attempt 'to locate the habitat of disease-carrying rodents known to be somewhere in the immediate area.' 359 U.S., at page 373, 79 S.Ct. at page 812 (concurring opinion). There was no case of a 'systematic area-by-area search' before the Court, and although certain remarks were made as applicable to such a search, 359 U.S. at page 372, 79 S.Ct. at page 811, their character as dicta is patent. Thus, even accepting the judgment in Frank, of such expressions the classic language of Justice Brandeis, dissenting in Jaybird Mining Co. v. Weir, 271 U.S. 609, 619, 46 S.Ct. 592, 595, 70 L.Ed. 1112, can be said again: 'It is a peculiar virtue of our system of law that the process of inclusion and exclusion, so often employed in developing a rule, is not allowed to end with its enunciation and that an expression in an opinion yields later to the impact of facts unforeseen.'
10
In this case we pass beyond the situation in Frank, where the inspector was looking for a specific violation, and where he had, and was able to demonstrate, considerable grounds to believe it existed in Frank's house. Here it would appear from Taylor's testimony that, even without a warrant, if a specific matter was cited to him by the inspector, he would have permitted the inspection in that regard. On the contrary, Frank's denial of access was described as based on 'a rarely voiced denial of any official justification for seeking to enter his home.' 359 U.S., at page 366, 79 S.Ct. at page 808. There then was a specific demand for inspection, met by a refusal on the broadest of grounds. Here we have the most general of demands, supported by no particularized justification, either directed at the conditions in Taylor's cottage, or in terms of some over-all systematic plan which would include it. This is met not by an attitude of defiance, but by a request by the householder that a specific authorization be furnished him. Not a search warrant, but a criminal complaint is the upshot. We would grossly tone down the protections afforded the householder by the Constitution were we to put an authoritative sanction on the judgment that condemns his refusal.
11
Much argument is made of the need of the authorities to perform inspections on a 'spot check' or on an area-by-area basis. The judgment below cannot be said to present this problem, because there was no evidence that this in fact was what was being done; that the inspectors in fact were proceeding according to a reasonable plan of one sort or another. For all that appears here, the inspectors could have been acting in accordance with no particular plan of spot checks or area-by-area searches which could be justified as 'reasonable,' and which would give probable cause for entry;5 their action could have been based on caprice or on personal or political spite. It hardly contradicts experience to suggest that the practical administration of local government in this country can be infected with such motives. Building inspection ordinances can lend themselves readily to such abuse. We do not at all say this to be the case here, and Taylor has made no proof of it, to be sure; but that simply points up the issue. The inspectors have not been required to make any justification for their entry. The judgment below upholds the charges as sufficient, based on a demand for entry without any such justification.
12
But if we were to assume that the inspectors were proceeding according to a plan, and even if evidence of the plan were put in at the trial, we think that the result should be the same. The time to make such justification is not in the criminal proceeding, after the householder has acted at his peril in denying access. The time to make it is in advance of prosecution, and the place is before a magistrate empowered to issue warrants, which will put the seal of legitimacy—the seal the Constitution specifically provides for—on the demand of the inspector, if indeed it is a reasonable one. Such a warrant need not be sought except where the householder does not consent. This is precisely the procedure followed by England in this particular area, see Public Health Act, 1936, 26 Geo. 5, & 1 Edw. 8, c. 49, § 287(2);6 and no complaint is heard that this stultifies enforcement there of the regulation or the public health and safety. Certainly with this procedure available—the procedure of antecedent justification before a magistrate that is central to the Fourth Amendment, see McDonald v. United States, 335 U.S. 451, 455—456, 69 S.Ct. 191, 193, 93 L.Ed. 153—there is no need to be satisfied with lesser standards in this area. Cf. Dean Milk Co. v. Madison, 340 U.S. 349, 71 S.Ct. 295, 95 L.Ed. 329. The public interest in the cleanliness and adequacy of the dwellings of the people is great. So too is the public interest that the tools of counterfeiting and the paraphernalia of the illicit narcotics traffic not remain active. On an adequate and appropriate showing in particular cases, the privacy of the home must bow before these interests of the public. But none of these interests provides an open sesame to those who enforce them. The Fourth Amendment's procedure establishes the way in which these general public interests are to be brought into specific focus to require the individual householder to open his door.
13
It has been suggested that if the Fourth Amendment's requirement of a search warrant is acknowledged to be applicable here, the result will be a general watering-down of the standards for the issuance of search warrants. For it is said that since it is agreed that a warrant for a health and safety inspection can be made on a showing quite different in kind from that which would, for example, justify a search for narcotics, magistrates will become lax generally in issuing warrants. The suggested preventive for this laxity is a drastic one: dispense with warrants for these inspections. We cannot believe that here it is necessary thus to burn down the house to roast the pig. To be sure, the showing that will justify a housing inspection to check compliance with health and safety regulations is different from that which would justify a search for narcotics. But we should not assume that magistrates will become so obtuse as not to bear this in mind. Search warrants to look for counterfeiting equipment, for example, are not issued on a showing of probable cause to believe the existence of an untaxed still. To each specific warrant, an appropriate specific showing is necessary. This can scarcely be thought to tax the capacities of the magistrate. And of course where the rule prevails that evidence obtained in violation of the constitutional guarantee is not admissible, there will be judicial review of the magistrate's action if the fruits of a search are tendered in evidence.7
14
Apart from the very significant factual distinctions presented by this case from the Frank case, there is another reason why we would reverse the judgment here. It has now become clear that the Frank decision may have turned in substantial part on the positing of a distinction between the affirmative guaranty of privacy against official incursion raised by the Fourth Amendment against federal action, and that raised by the Due Process Clause of the Fourteenth against state action. The concurring opinion of one of the majority in that sharply divided decision indicates some concern in that respect. 359 U.S., at page 373, 79 S.Ct. at page 812. After the greatest consideration, this Court in Wolf v. Colorado, 338 U.S. 25, 27—28, 69 S.Ct. 1359, 1361, 93 L.Ed. 1782, declared: 'The security of one's privacy against arbitrary intrusion by the police—which is at the core of the Fourth Amendment—is basic to a free society. It is therefore implicit in 'the concept of ordered liberty' and as such enforceable against the States through the Due Process Clause.' It is now clear that part of the majority of the Court in the Frank case does not subscribe to the clear import of that statement. Elkins v. United States, 364 U.S. 206, 237—240, 80 S.Ct. 1453, 1455—1457 (dissenting opinion). But the Wolf statement continues to be the ruling doctrine in this Court. Elkins v. United States, 364 U.S. 206, 80 S.Ct. 1437. The guarantees are of the same dimension, matters of enforcement, such as the exclusionary rule, aside.
15
The classic debate on the import of the Fourteenth Amendment's Due Process Clause as to the applicability of the Bill of Rights to the States, we submit, does not even involve the theory that the matter is one for the judges to solve on an ad hoc basis, according to their over-all reaction to particular cases. Some of us have expressed the conviction that the preferable view of the Fourteenth Amendment is that it makes the guarantees of the Bill of Rights generally enforceable against the States. See Adamson v. California, 332 U.S. 46, 68, 67 S.Ct. 1672, 1684, 91 L.Ed. 1903 (dissenting opinion). But to them, as well as to us, who have neither accepted nor rejected that view, it is clear that the celebrated passage of Justice Cardozo's opinion in Palko v. Connecticut, 302 U.S. 319, 323—325, 58 S.Ct. 149, 150—152, 82 L.Ed. 288, can have no common ground with the view of the Wolf case that a minority of the Court now expounds. And see Adamson v. California, supra, 332 U.S. at pages 85—86, 89, 67 S.Ct. at pages 1693—1694, 1695 (dissenting opinion). For the Palko opinion refers to 'a process of absorption,' 302 U.S., at page 326, 58 S.Ct. at page 152, of specific Bill of Rights guarantees in the Fourteenth Amendment's standard.8 It is not a license to the judiciary to administer a watered-down, subjective version of the individual guarantees of the Bill of Rights when state cases come before us. To be sure, the contrary view has been urged, occasionally with success; the right to counsel was put on an ad hoc basis, Betts v. Brady, 316 U.S. 455, 62 S.Ct. 1252, 86 L.Ed. 1595, despite what seems the clear implication to the contrary in Palko, 302 U.S., at page 324, 58 S.Ct. at page 151; and recently the surprising suggestion has even been made (never by the Court) that the freedom of speech and of the press may be secured by the Fourteenth Amendment with less vigor than it is secured by the First. See Beauharnais v. Illinois, 343 U.S. 250, 288, 72 S.Ct. 725, 746, 96 L.Ed. 919 (dissenting opinion); Roth v. United States, 354 U.S. 476, 505—506, 77 S.Ct. 1304, 1319—1320, 1 L.Ed.2d 1498 (separate opinion); Smith v. California, 361 U.S. 147, 169, 80 S.Ct. 215, 227, 4 L.Ed.2d 205 (separate opinion).9
16
In Elkins today we have rejected such a view of the affirmative guarantees of the Fourth Amendment. The opinion of the Court in Frank is very likely a product of such a rejected approach. For that reason, even if it were on all fours with the present case, it should not be followed, and the judgment below should be reversed.
1
Expressions of views, despite equal divisions, have been made before where there was a question whether one fact situation was to be distinguished from a related one on which a majority of the Court had rendered an opinion. Raley v. Ohio, 360 U.S. 423, 440—442, 442—445, 79 S.Ct. 1257, 1267—1268, 1268—1270. The question whether this case is to be distinguished from Frank presents an analogy to this.
2
The reference is apparently to the ordinance around which this case turns. Section 806—30(a) of the Dayton, Ohio, Code of General Ordinances provides:
'The Housing Inspector is hereby authorized and directed to make inspections to determine the condition of dwellings, dwelling units, rooming houses, rooming units and premises located within the City of Dayton in order that he may perform his duty of safeguarding the health and safety of the occupants of dwellings and of the general public. For the purpose of making such inspections and upon showing appropriate identification the Housing Inspector is hereby authorized to enter, examine and survey at any reasonable hour all dwellings, dwelling units, rooming houses, rooming units, and premises. The owner or occupant of every dwelling, dwelling unit, rooming house, and rooming unit or the person in charge thereof, shall give the Housing Inspector free access to such dwelling, dwelling unit, rooming house or rooming unit and its premises at any reasonable hour for the purpose of such inspection, examination and survey.'
This command is backed by the penalty that 'Any person who shall violate any provision of this ordinance shall, upon conviction, be punished by a fine of not less than twenty dollars (20.00) nor more than two hundred dollars ($200) or by imprisonment of not less than two (2) days nor more than thirty (30) days, or both, and each day of failure to comply with any such provision shall constitute a separate violation.' § 806—83.
3
Evidently habeas corpus lies in Ohio to test the constitutionality of the ordinance under which one is being held through charges pending in a court of inferior jurisdiction, as all the state courts proceeded to pass on the merits of the claims of the relator Eaton, appellant here, that the ordinance under which the charges were brought infringed Taylor's constitutional rights. Accordingly we may now review that determination on the merits, the habeas corpus proceeding, independent of the criminal prosecution itself, having proceeded to a final judgment. New York ex rel. Bryant v. Zimmerman, 278 U.S. 63, 70, 49 S.Ct. 61, 64, 73 L.Ed. 184.
4
Those desiring to make the inspection did not so testify; and such a planned blanket check, or its nature, is hardly inferable from Taylor's statement that 'they had been going up and down there, door-to-door, looking through everybody's houses'; his statement being the only thing resembling evidence on the point.
5
See Frank v. Maryland, supra, 359 U.S. at page 383, 79 S.Ct. at page 817 (dissenting opinion).
6
The procedure cited is that prescribed by statute in the case of health inspections under the Public Health Act. There are other statutes providing for other inspections, an English commentator points out, which do not contain this safeguard. See Waters, Rights of Entry in Administrative Officers, 27 U. of Chi.L.Rev. 79, 85. Accordingly, 'the private occupier is faced with a bewildering number of persons claiming a variety of rights.' Id., at 83. The author is in favor of the Public Health Act procedure, and regrets that 'the consistent application to good works is yet lacking.' 'The object should be the creation of warrant provisions in a statutory code of powers of entry, guaranteeing to the individual thereby the impartial, if rarely invoked, judgment by magistrates of the fairness and legality of any attempted entry.' Id., at 93.
7
See Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652.
8
'We reach a different plane of social and moral values when we pass to the privileges and immunities that have been taken over from the earlier articles of the Federal Bill of Rights and brought within the Fourteenth Amendment by a process of absorption. These in their origin were effective against the federal government alone. If the Fourteenth Amendment has absorbed them, the process of absorption has had its source in the belief that neither liberty nor justice would exist if they were sacrificed. * * * This is true, for illustration, of freedom of thought, and speech. Of that freedom one may say that it is the matrix, the indispensable condition, of nearly every other form of freedom * * *.' 302 U.S., at pages 326—327, 58 S.Ct. at page 152.
9
Contrast the statement in Palko, 302 U.S., at page 324, 58 S.Ct. at page 151. For the latest of many reiterations of the settled doctrine that the First Amendment's guarantees obtain against the States, see Smith v. California, 361 U.S. 147, 149 150, 80 S.Ct. 215, 216—217, 4 L.Ed.2d 205; Bates v. Little Rock, 361 U.S. 516, 522—523, 80 S.Ct. 412, 416, 4 L.Ed.2d 480. See Staub v. Baxley, 355 U.S. 313, 321, 78 S.Ct. 277, 281, 2 L.Ed.2d 302. For a collection of many of the cases to this effect, see Speiser v. Randall, 357 U.S. 513, 530, 78 S.Ct. 1332, 1352, 2 L.Ed.2d 1460 (concurring opinion).
| 01
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364 U.S. 277
80 S.Ct. 1410
4 L.Ed.2d 1706
John Clifford McCRARY, Petitioner,v.STATE OF INDIANA.
No. 417, Misc.
Decided June 27, 1960.
John Clifford McCrary, pro se.
Messrs. Edwin K. Steers, Atty. Gen. of Indiana, and Richard M. Givan, Deputy Atty. Gen., for respondent.
PER CURIAM.
1
The motion for leave to proceed in forma pauperis and the writ of certiorari are granted. Petitioner's attempted appeal to the Supreme Court of Indiana from a denial of relief in a post-conviction coram nobis proceeding was dismissed because of his failure to comply with rules of that court, requiring, inter alia, the filing of a transcript of the trial proceedings. He alleges that the dismissal denied him the equal protection of the laws because he was and is unable to pay for the preparation of such a transcript, see Griffin v. People of State of Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891, and that although he attempted to avail himself of the services of the Indiana Public Defender, who is empowered to secure the preparation of such a transcript in paupers' cases, see Burns' Indiana Stats. (1956 Repl.), § 13—1401 et seq., that officer declined to assist him. The record before us does not disclose whether these allegations were made to, and passed on by, the Indiana Supreme Court in light of Griffin v. People of State of Illinois, supra. Accordingly we vacate the order of dismissal and remand the case to it for further consideration of the appeal.
2
Order vacated and case remanded.
| 12
|
364 U.S. 1
80 S.Ct. 1570
4 L.Ed.2d 1527
AMERICAN TRUCKING ASSOCIATIONS, INC., et al., Appellants,v.UNITED STATES of America, Interstate Commerce Commission, et al.
No. 74.
Argued May 19, 1960.
Decided June 27, 1960.
[Syllabus from pages 1-2 intentionally omitted]
Mr. Peter T. Beardsley, Washington, D.C., for appellants.
Mr. Richard A. Solomon, Washington, D.C., for appellee, United States of America.
Mr. Robert W. Ginnane, Washington, D.C., for appellee, Interstate Commerce Commission.
Mr. Robert L. Pierce, San Francisco, Cal., for appellees, Pacific Motor Trucking Co. and General Motors Corp.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
The principal question presented on this appeal is whether the appellee Interstate Commerce Commission properly declined to impose certain restrictions upon motor carrier permits it issued to a trucking company which is a subsidiary of a railroad.
2
T e permits in question are designed to allow appellee Pacific Motor Trucking Company, a wholly owned subsidiary of Southern Pacific Company, to perform a particular type of transportation service for appellee General Motors Corporation. Prior to issuance of these permits, Pacific Motor already had been authorized to conduct certain trucking activities in a number of States into which Southern Pacific's extensive railway system penetrates. Without adverting to immaterial details, that authority may be described as follows: Pacific Motor held common carrier certificates from the Commission for the transportation of commodities, by way of service auxiliary to and supplemental of Southern Pacific rail service, over routes paralleling Southern Pacific lines in Oregon, California, Nevada, Arizona, New Mexico, and Texas. It also held contract carrier authority from the State of California for intrastate transportation of trucks and automobiles. Finally, it had been granted contract carrier permits by the Commission for the transportation of automobiles, trucks, and buses from certain points in California to three nonrail points in Nevada, to two points on the Mexican border, to certain points in Los Angeles Harbor, and to points in Nevada located on the Southern Pacific line. These latter contract carrier permits did not contain restrictions designed to make the service auxiliary to and supplemental of Southern Pacific rail service, Pacific Motor's only contract carrier shipper has been General Motors.
3
By the four applications which gave rise to the present controversy, Pacific Motor sought to extend the scope of its contract carrier service for General Motors. It requested authorization from the Commission for the transportation of new automotive equipment from plants of General Motors at Oakland, Raymer, and South Gate, California, to various interstate destinations not included within its prior permits. Generally speaking, the first application, designated Sub 34, covered contract carrier service from the Oakland plants to points on the Southern Pacific line in Oregon; the second, Sub 35, covered similar service to three Nevada nonrail points; the third, Sub 36, covered transportation from the Raymer plant to points in Arizona which are stations on the Southern Pacific line; and the last—and broadest—application, Sub 37, covered transportation from the Oakland, Raymer, and South Gate plants to points in seven States, whether or not on the Southern Pacific line.1
4
The Commission proceedings resulted in the grant of some, but not all, of the requested authority. On May 8, 1957, the Commission acted favorably on the Sub 34 application. 71 M.C.C. 561. However, the Commission thereafter consolidated the four applications and heard oral argument. On September 9, 1958, the Commission issued its final report, 77 M.C.C. 605, which may be described specifically enough for our purposes as authorizing transportation by Pacific Motor to the three additional Nevada nonrail points and to points on the Southern Pacific line in Nevada, Utah, Arizona, Oregon, and New Mexico.2 Otherwise, the applications were denied. There were certain other conditions imposed by the Commission, which we will detail later, but the major restriction was the limitation of points of destination to points on the Southern Pacific line.
5
Appellants—American Trucking Associations, Inc., its Contract Carrier Conference, the National Automobile Transporters Association, and six motor carriers—brought § it in Federal District Court to set aside the Commission's order. See 28 U.S.C. § 1336, 28 U.S.C.A. § 1336. Appellees Pacific Motor and General Motors intervened in support of the order. The United States was named a party defendant, together with the Interstate Commerce Commission, but did not either participate in or oppose the defense. See 28 U.S.C. § 2323, 28 U.S.C.A. § 2323. A three-judge court, which was convened pursuant to 28 U.S.C. §§ 2325 and 2284, 28 U.S.C.A. §§ 2325, 2284, denied relief. D.C., 170 F.Supp. 38. Our appellate jurisdiction was invoked under 28 U.S.C. § 1253, 28 U.S.C.A. § 1253, and we noted probable jurisdiction. 361 U.S. 806, 80 S.Ct. 51, 4 L.Ed.2d 53. In this Court, the Commission opposes and the United States supports the appellants.
6
There is a preliminary challenge by Pacific Motor and General Motors to appellants' standing, a challenge which was sustained by two members of the lower court. We disagree with this holding. Since the basis for our view on the problem of standing will be more readily appreciated after the merits of the case have been fully treated, we postpone our discussion of this matter.
7
The critical issue raised by appellants is whether the Commission exceeded its statutory authority by granting the permits in question to a railroad subsidiary without imposing more stringent limitations than it did. On this question, the lower court unanimously ruled against appellants. This judgment must be evaluated in the light of this Court's previous decisions, set against the background of Commission practice.
8
Both the Commission and this Court have recognized that Congress has expressed a strong general policy against railroad invasion of the motor carrier field. This policy is evinced in a general way in the preamble to the 1940 amendments to the Interstate Commerce Act—the National Transportation Policy, 54 Stat. 899—which articulates the congressional purpose that the Act be 'so administered as to recognize and preserve the inherent advantages' of 'all modes of transportation.' More particularly, Congress' attitude is reflected by a proviso to § 5(2)(b) of the Act,3 which enjoins the Commission to withhold approval of an acquisition by a railroad of a motor carrier 'unless it finds that the transaction proposed will be consistent with the public interest and will enable such carrier to use service by motor vehicle to public advantage in its operations and will not unduly restrain competition.'
9
The Commission long ago concluded that the policy of the transportation legislation requires that the standards of § 5(2)(b)—then § 213(a) of the Motor Carrier Act of 1935, 49 Stat. 555—be followed as a general rule in other situations, notably in applications for common carrier certificates of convenience and necessity under § 207.4 Kansas City Southern Transport Co., Common Carrier Application, 10 M.C.C. 221 (1938). And this Court has confirmed the correctness of the Commission's conception of its responsibilities under both § 5(2)(b) and § 207. See United States v. Rock Island Motor Transit Co., 340 U.S. 419, 71 S.Ct. 382, 95 L.Ed. 391; United States v. Texas & Pacific Motor Transport Co., 340 U.S. 450, 71 S.Ct. 422, 95 L.Ed. 409; Interstate Commerce Commission v. Parker, 326 U.S. 60, 65 S.Ct. 1490, 89 L.Ed. 2051. The Court has also taken cognizance of the congressional confirmation of the Commission's policy by the 1940 reenactment in § 5(2)(b) of the provisions of § 213(a), after some of the pertinent Commission decisions had been specifically called to Congress' attention. See United States v. Rock Island Motor Transit Co., supra, 340 U.S. at page 432, 71 S.Ct. 382, at page 389. And although the instant proceeding involves contract carrier applications and hence falls under § 209,5 the Commission in its opinion recognized that, for purposes of the relevance of the § 5(2)(b) standards, there is no distinction between th § type of case and proceedings arising under § 207. 77 M.C.C. 621—622. Nor can we discern any grounds for differentiation.
10
Thus it is evident that the policy of opposition to railroad incursions into the field of motor carrier service has become firmly entrenched as a part of our transportation law. Moreover, this general policy fortunately has not been implemented merely by way of a more or less unguided suspicion of railroad subsidiaries, but rather has evolved through a series of Commission decisions from embryonic form into a set of reasonably firm, concrete standards.6 The Commission's opinion in the case at bar describes these standards as follows:
11
'The restrictions usually imposed in common-carrier certificates issued to rail carriers or their affiliates in order to insure that the service rendered thereunder shall be no more than that which is auxiliary to or supplemental of train service are: (1) the service by motor vehicle to be performed by rail carrier or by a rail-controlled motor subsidiary should be limited to service which is auxiliary to or supplemental of rail service, (2) applicant shall not serve any point not a station on the railroad, (3) a key-point requirement or a requirement that shipments transported by motor shall be limited to those which it receives from or delivers to the railroad under a through bill of lading at rail rates covering, in addition to the movement by applicant, a prior or subsequent movement by rail, (4) all contracts between the rail carrier and the motor carrier shall be reported to the Commission and shall be subject to revision if and as the Commission finds it to be necessary in order that such arrangements shall be fair and equitable to the parties, and (5) such further specific conditions as the Commission, in the future, may find it necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, train service. * * *'
12
The key phrase in this summary is obviously 'auxiliary to or supplemental of train service.' If a trucking service can fairly be so characterized, it is clear enough that there is compliance with the mandate of § 5(2)(b) that the carrier should be able 'to use service by motor vehicle to public advantage in its operations.' But if, on the other hand, the motor transportation is e sentially unrelated to rail service, the railroad parent is invading the field of trucking, and, under normal circumstances, the National Transportation Policy is thereby offended.
13
It is this 'auxiliary to or supplemental of' verbalization of the policy of § 5(2)(b), as applied to § 207, that has found favor in this Court. See American Trucking Assns. v. United States, 355 U.S. 141, 78 S.Ct. 165, 2 L.Ed.2d 158; United States v. Rock Island Motor Transit Co., supra; United States v. Texas & Pacific Motor Transport Co., supra; Interstate Commerce Commission v. Parker, supra. Moreover, while the Court has not specified the more particularized restrictions which it might regard as essential constituents of the 'auxiliary to or supplemental of' concept, it is significant that the Court in Rock Island apparently accepted the Commission's view that the phrase implies a limitation of function, i.e., type of trucking service, and not merely a geographical limitation, i.e., place where the service is performed.7 340 U.S., at pages 436—444, 71 S.Ct. at pages 392—396.
14
But while the judicial and administrative current has run strongly in favor of auxiliary and supplemental restrictions on motor carrier subsidiaries of railroads, the Commission has determined, and this Court has agreed, that the public interest may sometimes be promoted by not imposing such limitations. A prime example is American Trucking Ass'ns v. United States, supra, where the trucking service was not being performed adequately by independent motor concerns. We there observed that the mandatory provisions of § 5(2)(b) do not appear in § 207, and approved the Commission's policy of not attaching auxiliary and supplemental restrictions where 'special circumstances' prevail. We concluded:
15
'We repeat * * * that the underlying policy of § 5(2)(b) must not be divorced from proceedings for new certificates under § 207. Indeed, the Commission must take 'cognizance' of the National Transportation Policy and apply the Act 'as a whole.' But * * * we do not believe that the Commission acts beyond its statutory authority when in the public interest it occasionally departs from the auxiliary and supplementary limitations in a s 207 proceeding.' 355 U.S., at pages 151 152, 78 S.Ct. at page 171.
16
These, then, are the guiding principles which have been established by what has gone before and which mark the range of our inquiry in this case. Since, as we have indicated, the Commission believes, and we agree, that there is no relevant difference between a § 207 proceeding and a § 209 proceeding so far as the problem here involved is concerned, the decisive questions are : (1) Did the Commission impose conditions upon the permits issued to Pacific Motor under which the service to be rendered would be truly auxiliary to and supplemental of Southern Pacific's rail service? (2) If not, was the Commission's waiver of such restrictions justified by 'special circumstances'?
17
The first question need not detain us long. The principal permits were qualified only by the following conditions: (1) the service was to be restricted to points which are stations on the Southern Pacific line; (2), 'there may from time to time in the future be attached to the permits * * * such reasonable terms, conditions, and limitations as the public interest and national transportation policy may require'; and (3), Pacific Motor was to request the imposition of restrictions upon its outstanding certificates with respect to the transportation of automobiles and trucks.
18
The last restriction was designed to obviate any dual operation problem under § 210,8 and is not pertinent to the auxiliary and supplemental standard. See 77 M.C.C., at 624. The second condition obviously is no restriction at all on present operations, and hence can hardly be said to limit the trucking to an auxiliary or supplemental service. We so recognized in American Trucking Associations, where the certificates contained a similar restriction. 355 U.S., at page 154, 78 S.Ct. at page 172. And the first limitation, upon which appellees principally rely, is but a geographical, not a functional, restriction. As we have noted, Rock Island gives strong support to the view there expressed by the Commission that the essence of auxiliary and supplemental limitation is functional control. While it may be true, as appellees argue, that such a geographical limitation is a necessary ingredient of an auxiliary and supplemental restriction, it does not by any means follow that this ingredient makes the whole. Moreover, we have the strongest evidence that the Commission did not believe that it did, since the Commission specifically refrained from imposing the most general, but obviously the most significant, restriction—that 'the service by motor vehicle * * * should be limited to service which is auxiliary to or supplemental of rail service.' 77 M.C.C., 622, 623. The conclusion seems inescapable that the conditions imposed upon the permits to Pacific Motor, though undoubtedly 'restrictions' in a general sense, were not limitations sufficient to hold Pacific Motor to a truly auxiliary and supplemental service.
19
Appellees urge that nonetheless there were 'special circumstances' within the meanin of American Trucking Associations. Appellees point to various findings of fact by the Commission, such as the need of General Motors for a service of the type here involved, Pacific Motor's experience and qualifications, and the unlikelihood that a significant amount of traffic would be diverted from rail to motor transportation even if the permits were granted. The difficulty with appellees' argument is that the Commission did not find that considerations of this nature constituted 'special circumstances' under the American Trucking Associations rule, but rather viewed them simply as supporting the basic determinations which it was required to make under § 209(b) in order to issue a contract carrier permit to any applicant.9 And naturally we should not substitute our judgment for the Commission's on a matter like this, for '(t)he grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.' Securities & Exchange Commission v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 459, 87 L.Ed. 626.
20
The Commission assigned but a single reason for not imposing the normal restrictions upon the Pacific Motor permits: to do so would compel Pacific Motor to conduct a common carrier service. Appellees support this decision upon the ground that the Commission is without authority under § 209(b) to impose such character-destroying conditions upon a contract carrier permit.10 We need not determine whether the Commission possesses the power to attach such limitations, or, in the alternative, to award a common carrier certificate, since we believe that, in any event, the Commission's reason is insufficient justification for its action. Assuming that the restrictions which would limit Pacific Motor's operations to an auxiliary and supplemental service would also be incompatible with a contract carrier operation, and that the Commission was consequently powerless to impose those restrictions, this alone does not, in our view, meet the 'special circumstances' test. There is, for example, no finding that independent contract carriers were unable or unwilling to perform the same type of service as Pacific Motor. In such a situation we do not believe that the policy of the Act allows the Commission to authorize service by Pacific Motor, limited only to points on the Southern Pacific line, sim ly because General Motors wants a contract carrier operation. If that desire of General Motors, in combination with the policy of the Act, disables a railroad subsidiary from obtaining the business, that is simply the result of the National Transportation Policy.11 The consequence, we believe, does not meet the compelling public interest standard established by American Trucking Associations. A contrary conclusion would open the door to approval of over-the-road contract trucking by railroad subsidiaries to most, if not virtually all, major destinations, and hence would greatly attenuate the safeguards which have been painstakingly erected to prevent railroad domination of trucking. Appellees say that these safeguards are no longer needed, because independent trucking is no longer an 'infant industry.' This is an immaterial argument in this forum. We do not condemn the wisdom of the Commission's action. We simply say that the transportation legislation does, and that the pardoning power in this case belongs to Congress.
21
Thus the decision of the District Court must be reversed, because we conclude that the Commission fell into error of law. The question then arises whether there should be a remand which permits further proceedings. Appellants argue that there should not be, because the Commission, according to apellants, found that there were no special circumstances aside from the alleged impossibility of imposing the usual restrictions upon a contract carrier. It is true that the Commission based the rail-point restriction upon 'the absence of any showing of unusual conditions.' 77 M.C.C., at 623. But we cannot be certain that the Commission thereby intended to say that there were no special circumstances within the meaning of the American Trucking Associations principle. As we have pointed out, the rail-point restriction, standing alone, is different in kind from limitations which impose an auxiliary and supplemental service. Consequently, we cannot be sure that the Commission believes the same sort of circumstances determine the applicability of both types of restrictions. Moreover, the Commission's discussion of this point is open to the interpretation that it was repeating some of its conclusions with respect to the § 209(b) standards, e.g., 'the effect which granting the permit would have upon the services of the protesting carriers.' See note 9, supra.12 Under these circumstances, we would be warranted in precluding further proceedings only if, by an independent search of the record, we were able to conclude that, as a matter of law, there are no factors present which the Commission could have regarded as special circumstances. Although the findings of the Commission which are reflected in its opinion do not seem to us to comply with the American Trucking Associations standard, as the silence of the Commission seems to imply, we are unwilling in a complicated proceeding of this nature to deal with this problem ab initio or to say that the Commission could not have made additional findings on the basis of the evidence had it een aware that the ground its decision rested upon was insufficient. Consequently, under the particular circumstances of this case, we believe that it should be remanded to the Commission so that it can apply what we hold to be the applicable principles in such further proceedings as it may find to be consistent with this opinion.
22
The reversal and remand, however, will not include one aspect of the Commission's action—the grant of authority to provide a service to three nonrail points in Nevada—which is not governed by the rationale of our opinion. This small segment of the controversy has been submerged in the dispute over the much broader permit covering transportation to rail points in various States. It is obvious, of course, that 'special circumstances' would have to be present to justify this Nevada award. Appellees maintain that there was such justification, and appellants have not established that it was lacking. Nor do we perceive any other reason to upset this award. Consequently, we affirm with respect to this particular permit.
23
There remains only the question of standing. Although the threejudge court concluded that the Commission had not exceeded its authority in this case, two members of the court also believed that 'there was no showing of actual or anticipated direct injury such as would entitle (the appellants) to institute this action.' D.C., 170 F.Supp., at page 48. In support of this conclusion, appellees rely principally upon Atchison, T. & S.F.R. Co. v. United States, D.C., 130 F.Supp. 76, affirmed per curiam, 350 U.S. 892, 76 S.Ct. 152, 100 L.Ed. 785. That decision held that certain railroads had no standing to challenge a Commission order authorizing acquisition by one motor carrier of others. Since the lower court in Atchison stressed the fact that the Commission there had not created any additional motor carrier service, the decision clearly is not in point. In the instant case, not only has the Commission created new operating rights, but they are rights in which appellants have a stake. And surely the statement by General Motors that it would not in any event give the the business to any appellant cannot deprive appellants of standing. The interests of these independents cannot be placed in the hands of a shipper to do with as it sees fit through predictions as to whom its business will or will not go. The decision we believe to be controlling is not Atchison, but rather Alton R. Co. v. United States, 315 U.S. 15, 62 S.Ct. 432, 86 L.Ed. 586, where the Court confirmed the standing of a railroad to contest the award of a certificate to a competing trucker. We conclude, then, that appellants had standing to maintain their action to set aside the Commission's order under the 'party in interest' criterion of § 205(g) of the Interstate Commerce Act, 49 Stat. 550, 49 U.S.C. § 305(g), 49 U.S.C.A. § 305(g), and under the 'person suffering legal wrong * * * or adversely affected or aggrieved' criterion of § 10(a) of the Administrative Procedure Act, 60 Stat. 243, 5 U.S.C. § 1009(a), 5 U.S.C.A. § 1009(a).
24
Our disposition of the case makes it unnecessary to consider the other issues raised by appellants.
25
We have no desire to hamper the Commission in the discharge of its heavy responsibilities, and we have always recognized that the Commission has been given a wide discretion by Congress. But that discretion has limits; our decision in favor of the Commission in American Trucking Associations established the limits relevant to this case; and we conclude that those limits have been transgressed. Of course, in remanding the case we do not intend to circumscribe the Commission in determining whether appropriate 'special circumstances' do exist in this instance which would take the case out of the otherwise conventional standards.
26
The judgment of the District Court is reversed and the case is remanded to that court with directions to remand to the Commission for such further proceedings, not inconsistent with this opinion, as may be appropriate.
27
It is so ordered.
28
Affirmed in part; reversed and remanded in part with directions.
1
With respect to the transportation from Oakland and Raymer, the States were Washington, Oregon, Idaho, Nevada, Utah, Arizona, and New Mexico. The proposed transportation from South Gate was to be to the same States, excluding New Mexico but adding Montana.
2
One Commissioner who concurred said that he would give broader authority; three Commissioners dissented from the grant; and of the three Commissioners who did not participate, one said that he would have joined the dissenters.
3
54 Stat. 906, as amended, 49 U.S.C. § 5(2)(b), 49 U.S.C.A. § 5(2)(b).
4
49 Stat. 551, 49 U.S.C. § 307, 49 U.S.C.A. § 307.
5
49 Stat. 552, as amended, 49 U.S.C. § 309, 49 U.S.C.A. § 309.
6
The first major Commission decision was rendered the year after the enactment of Motor Carrier Act of 1935. Pennsylvania Truck Lines, Inc., acquisition of control of Barker Motor Freight, Inc.,
1 M.C.C. 101. In refusing approval of an acquisition unless certain conditions were met, a division of the Commission stated:
'* * * (W)e are not convinced that the way to maintain for the future healthful competition between rail and truck service is to give the railroads free opportunity to go into the kind of truck service which is strictly competitive with, rather than auxiliary to, their rail operations. The language of section 213 * * * is evidence that Congress was not convinced that this should be done. Truck service would not, in our judgment, have developed to the extraordinary extent to which it has developed if it had been under railroad control. Improvement in the particular service now furnished by the partnership might flow from control by the railroad, but the question involved is broader than that and concerns the future of truck service generally. The financial and soliciting resources of the railroads could easily be so used in this field that the development of independent service would be greatly hampered and restricted, and with ultimate disadvantage to the public.' Id., at 111—112.
The development of Commission policy is traced in detail in Rock Island Motor Transit Co.—Purchase—White Line Motor Freight Co., 40 M.C.C. 457. See also the similar and lengthy discussion in United States v. Rock Island Co., supra, passim.
7
'The Commission asserts that the meaning of 'auxiliary and supplemental' * * * was not geographical. * * *
'What was in the Commission's mind as to the meaning of auxiliary and supplemental at the time it issued its certificate, we cannot be
sure. At present a motor service is auxiliary and supplemental to rail service, in the Commission's view, when the railroad-affiliated motor carrier in a subordinate capacity aids the railroad in its rail operations by enabling the railroad to give better service or operate more cheaply rather than independently competing with other motor carriers. * * * The Commission has continually evidenced * * * its intention to have rail-owned motor carriers serve in auxiliary and supplemental capacity to the railroads.
'The Commission has expressed its policy * * * by the phrase, perhaps too summary, auxiliary and supplemental. Though the phrase is difficult to define precisely, its general content is set out in Texas & Pacific Motor Transport Co. Application, 41 M.C.C. 721, 726 (establishing generally the same conditions set forth in the text, at pages 7—9 of 364 U.S., pages 1574—1576 of 80 S.Ct. * * *. While the practice of the Commission has varied in the conditions imposed, the purpose to have rail-contion with train service has not. * * *' 340 U.S., at pages 439, 442—443, 71 S.Ct. at page 393.
See the detailed discussion in Rock nected motor carriers act in coordina-Island Motor Transit Co.—Purchase—White Line Motor Freight Co., 40 M.C.C. 457. ('(T)here * * * appears to have developed a tendency in rail-motor acquisition proceedings to treat the Barker case restrictions as geographical or territorial only in their intent rather than as substantive limitations upon the character of the service which might be rendered by a railroad or its affiliate under any acquired right.' Id., at 470.) See also Texas & Pacific Motor Transport Co. Common Carrier, Application, supra, at 726. ('Since petitioner's certificates limit the service to be performed to that which is auxiliary to or supplemental of the rail service of the railway, it is without authority to engage in operations unconnected with the rail service * * *. To the extent petitioner is performing or participating in all-motor movements on the bills of lading of a motor carrier and at all-motor rates, it is performing a motor service in competition with the rail service and the service of existing motor carriers; and, to the extent it is substituting rail service for motor-vehicle service, the rail service is auxiliary to or supplemental of the motor-vehicle service rather than the motor-vehicle service being auxiliary to or supplemental of rail service.')
8
49 Stat. 554, as amended, 49 U.S.C. § 310, 49 U.S.C.A. § 310.
9
Section 209(b) provides in pertinent part:
'Subject to section 310 of this title, a permit shall be issued to any qualified applicant therefor authorizing in whole or in part the operations covered by the application, if it appears from the applications or from any hearing held thereon, that the applicant is fit, willing, and able properly to perform the service of a contract carrier by motor vehicle, and to conform to the provisions of this chapter and the lawful requirements, rules, and regulations of the Commission thereunder, and that the proposed operation, to the extent authorized by the permit, will be consistent with the public interest and the national transportation policy declared in the Interstate Commerce Act; otherwise such application shall be denied. In determining whether issuance of a permit will be consistent with the public interest and the national transportation policy declared in the Interstate Commerce Act, the Commission shall consider the number of shippers to be served by the applicant, the nature of the service proposed, the effect which granting the permit would have upon the services of the protesting carriers and the effect which denying the permit would have upon the applicant and/or its shipper and the changing character of that shipper's requirements. * * *' (Emphasis added.)
The italicized portion was added by an amendment of August 22, 1957, 71 Stat. 411, well before the Commission's decision of September 9, 1958. Consequently, the Commission was required to apply the new standards. Ziffrin, Inc. v. United States, 318 U.S. 73, 78, 63 S.Ct. 465, 468, 87 L.Ed. 621.
10
Section 209(b) provides in part that the Commission 'shall attach to (the permit) * * * such reasonable terms, conditions, and limitations, consistent with the character of the holder as a contract carrier * * * as may be necessary to assure that the business is that of a contract carrier and within the scope of the permit, and to carry out * * * the requirements established by the Commission under section 304(a)(2) and (6) of this title * * *.'
11
'Such restrictions hamper railroad companies in the use of their physical facilities—stations, terminals, warehouses—their personnel and their capital in the development of their transportation enterprises to encompass all or as much of motor transportation as the roads may desire. The announced transportation policy of Congress did not permit such development.' United States v. Rock Island Motor Transit Co., supra, 340 U.S. at pages 443—444, 71 S.Ct. at page 396, 95 L.Ed. 391.
12
The rail-point limitation appears to have been designed primarily to prevent encroachment upon the business of competing rail carriers. Various railroads opposed the grant of authority before the Commission, but did not join in the federal court action.
| 78
|
364 U.S. 76
80 S.Ct. 1581
4 L.Ed.2d 1581
UNITED STATES of America, Petitioner,v.CANNELTON SEWER PIPE COMPANY.
No. 513.
Argued May 19, 1960.
Decided June 27, 1960.
Mr. Ralph S. Spritzer, Washington, D.C., for petitioner.
Mr. Erwin N. Griswold, for respondent.
Mr. Justice CLARK delivered the opinion of the Court.
1
This income tax refund suit involves the statutory percentage depletion allowance to which respondent, an integrated miner-manufacturer of burnt clay products from fire clay and shale, is entitled under the Internal Revenue Code of 1939.1
2
The percentage granted by the statute is on respondent's 'gross income from mining.' It defines 'mining' to include the 'ordinary treatment processes normally applied by mine owners * * * to obtain the commercially marketable mineral product or products.' Respondent claimed that its first 'commercially marketable mineral product' is sewer pipe and other vitrified articles. Alternatively, it contended that depletion should be based on the price of 80 tons of ground fire clay and shale actually sold during the tax year in question. The District Court agreed with respondent's first claim. The Court of Appeals affirmed, holding that respondent could not profitably sell its raw fire clay and shale without processing it into finished products, and that its statutory percentage depletion was therefore properly based on its gross sales of the latter. 268 F.2d 334. The Government contends that the product from which 'gross income from mining' is computed is an industry-wide test and cannot be reduced to a particular operation that a taxpayer might find profitable. The Government further argues that, while the statute permits ordinary treatment processes normally applied by miners to the raw product of their mines to produce a commercially marketable mineral product, it does not embrace the fabrication of the mineral product into finished articles. In view of the importance of the question to taxpayers as well as to the Government, we granted certiorari. 361 U.S. 923, 80 S.Ct. 294, 4 L.Ed.2d 239. We disagree with respondent's contention that the issue is not presented by this record, and we therefore reach the merits. We have concluded that, under the mandate of the statute, respondent's 'gross income from mining' under the findings here is the value of its raw fire clay and shale, after the application of the ordinary treatment processes normally applied by nonintegrated miners engaged in the recovery of those minerals.2
I.
3
During the tax year ending November 30, 1951, the respondent owned and operated an underground mine from which it produced fire clay and shale in proportions of 60% fire clay and 40% shale. It transported the raw mineral product by truck to its plant at Cannelton, Indiana, about one and one-half miles distant. There it processed and fabricated the fire clay and shale into vitrified sewer pipe, flue lining and related products. In this process, the clay and shale is first ground into a pulverized form about as fine at talcum powder. The powder is then mixed with water in a pug mill and becomes a plastic mass, which is formed by machines into the shape of the finished ware desired. The ware is then placed in dryers where heat of less than 212 is applied to remove all of the water. This process takes from 12 hours to 3 weeks, depending on the size of the ware. Thereafter the ware is vitrified in kilns at 2,200 Fahrenheit, requiring from 60 to 210 hours. It is then cooled, graded and either shipped or stored.
4
Not all clays and shales are suitable for respondent's operations. They must have plasticity, special drying qualities and be able to withstand high temperatures. Respondent's clay, known as Cannelton clay, is the deepest clay mined in Indiana and, respondent says, yields, the best sewer pipe. Its cost of removing and delivering the same to its plant was $2.418 per ton in 1951. Respondent used some 38,473 tons of clay and shale in its operations that year and sold approximately 80 tons of ground fire clay and shale in bags at a price of $22.88 per ton. Net sales of its finished wares amounted to approximately one and a half million dollars.
5
In connection with its tax assessment for the year in question, respondent filed a document in which it stated that 'we used as a basis for calculating the gross income from our mining operations of shale and fire clay the point in our manufacturing operations at which we first arrive with a commercially marketable product, which is ground fire clay. This product arrives after the raw mineral is crushed and granulated to such extent that by the addition of water it can be made into a mortar for use in laying or setting fire or refractory brick. This ground fire clay has a definite market and an ascertainable market value at any particular time and is the same product from which our end product, sewer tile, is made simply by the addition of water adn the necessary baking process'. In this return it based the value of the ground fire clay at $22.81 per ton, the price for which it sold some 80 tons of that material in bags during 1951. At this figure the depletion allowance would have been slightly above $2 per ton. Thereafter respondent claimed error and asserted that its mineral product, rather than being commercially marketable when it reached the stage of ground fire clay, only became commercially marketable when it became a finished product, e.g., sewer pipe. On this basis, the depletion allowance on petitioner's gross income would be approximately $4 per ton, since the mineral would have a value of about $40 per ton. On the other hand, if the mineral it used in 1951 was valued at $1.60 to $1.90 per ton, the going price elsewhere in Indiana, the depletion allowance would be approximately 20¢ per ton.
6
The record shows and the District Court found that in 1951 there were substantial sales of raw fire clay and shale in Indiana, mostly in the vicinity of Brazil, about 140 miles from Cannelton. The average price there was $1.60 to $1.90 per ton for fire clay and $1 per ton for shale. Transportation costs from Brazil to Cannelton ran from $4.58 to $5.50 per ton. In Kentucky, across the river from respondent's plant, it appears that fire clay and shale of the same grade were mined and sold3 before, during and subsequent to 1951. In fact, since 1957 respondent has secured all of its mineral requirements from this source on a lease basis under which the lessor mines and delivers the raw material to its plant. The exact cost is not shown, but the haul in 1957 from pit to plant, including the ferry crossing, was some seven miles.
II.
7
We have carefully studied the legislative history of the depletion allowance, including the voluminous materials furnished by the parties, not only in their briefs but in the exhaustive appendices and the record.4 We shall not burden this opinion with its repetition.
8
In summary, mineral depletion for tax purposes is an allowance from income for the exhaustion of capital assets. Anderson v. Helvering, 1940, 310 U.S. 404, 60 S.Ct. 952, 84 L.Ed. 1277. In addition, it is based on the belief that its allowance encourages extensive exploration and increasing discoveries of additional minerals to the benefit of the economy and strength of the Nation. We are not concerned with the validity of this theory or with the statutory policy. Our sole function is application of the congressional mandate. A study of the materials indicates that percentage depletion first came into the tax structure in 1926, when the Congress granted it to oil and gas producers. The percentage allowed was based on 'gross income from the property,' which was described as 'the gross receipts from the sale of oil and gas as it is delivered from the property.' Preliminary Report, Joint Committee on Internal Revenue Taxation, Vol. I, Part 2 (1927). The report continued that, as to the integrated operator, 'the gross income from the property must be computed from the production and posted price of oil, as the gross receipts from a refind and transported product can not be used in determining the income as relating to an individual tract or lease.' The Treasury Regulations confirmed this understanding. Treas.Reg. 74 (1929 ed.), Arts. 221(i), 241.
9
Thereafter, in 1932, percentage depletion was extended to metal mines, coal, and sulphur. The mining engineer of the Joint Committee, Alex. R. Shepherd, urged in a report to the Congress5 that depletion for metal mines be computed, as in the oil and gas industry, on a percentage-of-income basis, and the Revenue Act of 1932 was so drawn. The Shepherd Report pointed out that the percentage basis for oil and gas depletion had been in force for over a year and had 'functioned satisfactorily both from economical and administrative viewpoints and without loss of revenue.' It added that 'careful study of this method as applied to metal mines indicates that the same results will be attained in practice as in the case of oil and gas,' but that, because of varied practices in the mining industry, it would be necessary to determine 'the point in accounting at which' gross income from the property mined could be calculated. It recommended that 'it is logical to peg 'gross income from the property' f.o.b. cars at mine,' i.e., net smelter returns, recognizing that processing beyond this point should not be included in calculating 'gross income from the property.' While as to certain metals, viz., gold, silver, or copper, the report suggested that gross income should be based on receipts from 'the sale of the crude, partially beneficiated or refined' product, this was but to make provision for the specific operations of miners in those metals. In this regard the report also proposed that the depreciation base 'in the case of all other metals, coal and oil and gas, (should be) the competitive market receipts, or its e uivalent, received from the sale of the crude products, or concentrates on an f.o.b. mine, mill or well basis.'
10
The Congress in fashioning the 1932 Act took into account these recommendations. It incorporated a provision in the Act allowing percentage depletion for coal and metal mines and sulphur, based on the 'gross income from the property.' § 114(b)(4), Revenue Act of 1932, 47 Stat. 169. On the following February 10, 1933, the Treasury issued its Regulations 77, which defined 'gross income from the property' as 'the amount for which the taxpayer sells (a) the crude mineral product of the property or (b) the product derived therefrom, not to exceed in the case of (a) the representative market or field price * * * or in the case of (b) the representative market or field price * * * of a product of the kind and grade from which the product sold was derived, before the application of any processes * * * with the exception of those listed * * *.' Treas.Reg. 77, Art. 221(g). These exceptions listed processes normally in use in the mining industry for preparing the mineral as a marketable shipping product. The regulation was of unquestioned validity and, in 1943, at the instance of the industry, the Congress substantially embodied it into the statute itself, 58 Stat. 21, 44, including the basic definition of the term 'gross income from the property.'6 Since that time the section on percentage depletion—s 114(b)(4)(B) of the 1939 Code has remained basically the same.7 Additional minerals have been added from time to time—shale and fire clay in 1951—until practically all minerals are included.
11
As now enacted, the section provides that 'mining' includes 'not merely the extraction of the ores or minerals from the ground but also the ordinary treatment processes normally applied by mine owners or operators in order to obtain the commercially marketable mineral product or products,' plus transportation from the place of extraction to the 'plants or mills in which the ordinary treatment processes are applied thereto,' not exceeding 50 miles.8 It then defines 'ordinary treatment processes' by setting out specifically in four categories those covering some 17 named minerals. Fire clay and shale are not within these specific enumerations. The Government, however, contends that they should come within clause (iii) of the section, which provides that, 'in the case of iron ore, bauxite, ball and sagger clay, rock asphalt, and minerals which are customarily sold in the form of a crude mineral product—sorting, concentrating, and sintering to bring to shipping grade and form, and loading for shipment * * *' are included in 'ordinary treatment processes.' (Italics added.) Clause (iv) lists specific metals such as lead, zinc, copper, etc., 'and ores which are not customarily sold in the form of the crude mineral product,' and specifically excludes from the permissible processes certain ones used in connection with these metals. To recapitulate, the section contains four categories of 'ordinary treatment processes': the first enumerating those permissible as to the mining of coal; the second, as to sulphur; the third, as to minerals customarily sold in the form of the crude mineral product; and the fourth, as to those ores not customarily so sold. We note that the Congress even states the steps in each permissible pro ess, and in addition specifically declares some processes not to be 'ordinary treatment' ones, viz., 'electrolytic deposition, roasting, thermal or electric smelting, or refining.' Furthermore, none of the permissible processes destroy the physical or chemical identity of the minerals or permit them to be transformed into new products.
12
From this legislative history, we conclude that Congress intended to grant miners a depletion allowance based on the constructive income from the raw mineral product, if marketable in that form, and not on the value of the finished articles.
III.
13
The findings are that three-fifths of the fire clay produced in Indiana in 1951 was sold in its raw state. This indicates a substantial market for the raw mineral. In addition, large sales of raw fire clay and shale were made across the river in Kentucky. This indicates that fire clay and shale were 'commercially marketable' in their raw state unless that phrase also implies marketability at a profit. We believe it does not. Proof of these sales is significant not because it reveals an ability to sell profitably—which the respondent could not do—but because the substantial tonnage being sold in a raw state provides conclusive proof that, when extracted from the mine, the fire clay and shale are in such a state that they are ready for industrial use or consumption—in short, they have passed the 'mining' state on which the depletion principle operates. It would be strange, indeed, to ascribe to the Congress an intent to permit each miner to adopt processes peculiar to his individual operation. Depletion, as we have said, is an allowance for the exhaustion of capital assets. It is not a subsidy to manufacturers or the high-cost mine operator. The value of respondent's vitrified clay products, obtained by expensive manufacturing processes, bears little relation to the value of its minerals. The question in depletion is what allowance is necessary to permit tax-free recovery of the capital value of the minerals.
14
Respondent insists that its miner-manufacturer status makes some difference. We think not. It is true that the integrated miners in Indiana outnumbered the nonintegrated ones. But in each of the three basic percentage depletion Acts the Congress indicated that integrated operators should not receive preferred treatment. Furthermore, in Regulations 77, discussed above, the Treasury specifically provided that depletion was allowable only on the crude mineral product. And, as we have said, this regulation was substantially enacted into the 1943 Act. We need not tarry to deal with any differences which are said to have existed in administrative interpretation, for here we have authoritative congressional action itself. Ever since the first percentage depletion statute, the cut-off point where 'gross income from mining' stopped has been the same, i.e., where the ordinary miner shipped the product of his mine. Respondent's formula would not only give it a preference over the ordinary nonintegrated miner, but also would grant it a decided competitive advantage over its nonintegrated manufacturer competitor. Congress never intended that depletion create such a discriminatory situation. As we see it, the miner-manufacturer is but selling to himself the crude mineral that he mines, insofar as the depletion allowance is concerned.
IV.
15
We now reach what 'ordinary treatment processes' are available to respondent under the statute. As the principal industry witness put it at hearings before the Congress: 'Obviously it was not the intent of Congress that those processes which would take your products and make them into different products having very different uses should be considered, as the basis of depletion.'9 But respondent says that the processes it uses are the ordinary ones applied in the industry. As to the miner-manufacturer, that is true. But they are not the 'ordinary' normal ones applied by the nonintegrated miner. It was he whom the Congress made the object of the allowance. The fabrication processes used by respondent in manufacturing sewer pipe would not be employed by the run-of-the-mill miner—only an integrated miner-manufacturer would have occasion to use them.
16
Respondent further contends, however, that it must utilize these processes in order to obtain a 'commercially marketable mineral product or products.' It points out that its underground method of mining prevents it from selling its raw fire clay and shale. This position leads to the conclusion that respondent's mineral product has no value to it in the ground. If this be true, then there could be no depletion. One cannot deplete nothing. On the other hand, respondent alleges that its minerals yield 'the best sewer pipe which is made in Indiana.' If this be true, then respondent's problem is one purely of cost of recovery, an item which, as we have said, has nothing to do with value in the depletion formulae. Depletion, as we read the legislative history, was designed not to recompense for costs of recovery but for exhaustion of mineral assets alone. If it were extended as respondent asks, the miner-manufacturer would enjoy, in addition to a depletion allowance on his minerals, a similar allowance on his manufacturing costs, including depreciation on his manufacturing plant, machinery and facilities. Nor do we read the use by the Congress of the plural word 'products' in the 'commercially marketable' phrase as indicating that normal processing techniques might include the fabrication of different products from the same mineral. We believe that the Congress was only r cognizing that in mining operations often more than one mineral product was recovered in its raw state.
17
In view of the finding that substantial quantities—in fact, the majority—of the tonnage production of fire clay and shale were sold in their raw state, we believe that respondent's mining activity during the year in question would come under clause (iii) of the section here involved. That clause includes 'minerals which are customarily sold in the form of a crude mineral product.' We believe that the Congress intended integrated mining-manufacturing operations to be treated as if the operator were selling the mineral mined to himself for fabrication. It would, of course, be permissible for such an operator to calculate his 'gross income from mining' at the point where 'ordinary' miners—not integrated disposed of their product. All processes used by the nonintegrated miner before shipping the raw fire clay and shale would under such a formula be available to the integrated miner-manufacturer to the same extent but no more.
18
Nor do we believe that the District Court and Court of Appeals cases involving percentage depletion and cited by respondent are apposite here.10 We do not, however, indicate any approval of their holdings. It is sufficient to say that on their facts they are all distinguishable.
19
In view of these considerations, neither of respondent's alternate claims for depletion allowance is appropriate. The judgment of the Court of Appeals is therefore reversed, and the cause remanded for further proceedings in conformity with this opinion. It is so ordered.
20
Reversed and remanded.
21
Mr. Justice HARLAN, concurring in the result.
22
In joining the judgment in this case I shall refer only to one matter which, among the voluminous data presented by the parties, is for me by far the most telling in favor of the Government's position.
23
Treasury Regulation 77, promulgated in 1933 under the Revenue Act of 1932 (47 Stat. 169), defined the basic term 'gross income from the property' contained in § 114(b)(4) of the 1932 Act and carried forward in its successors. Art. 221(g). It concededly supports, by its express terms (see 364 U.S. at page 83, 80 S.Ct. at page 1585), the position of the Government in the present case. In my opinion the regulation was undoubtedly a valid exercise of the Commissioner's power to construe a generally worded statute. See Preliminary Report on Depletion, Staff Reports to the Joint Committee on Internal Revenue Taxation (1930), p. 68 (Shepherd Report); Helvering v. Wilshire Oil Co., 308 U.S. 90, 102—103, 60 S.Ct. 18, 25, 84 L.Ed. 101. The Revenue Act of 1943 (58 Stat. 21, 45), which added to the 1939 Code the provisions governing this case, represented only a limited departure from the 1933 Regulation, or from the administrative action taken under it, principally in the area of extractive processes applied to minerals not customarily sold in the form of a crude product, and did not basically affect the meaning of the term 'gross income from the property.' See, e.g., Revenue Act of 1943, Hearings before the Senate Committee on Finance, 78th Cong., 1st Sess., on H.R. 3687, pp. 527—529; S.Rep. No. 627, 78th Cong., 1st Sess., pp. 23—24; Revenue Revision of 1942, Hearings before the House Committee on Ways and Means, 77th Cong., 2d Sess., p. 1202; compare id., at 1199; Silver, Hearings before the Senate Special Committee on the Investigation of Silver, 77th Cong., 2d Sess., pursuant to S.Res. 187 (74th Cong.), pp. 761—764. Respondent's efforts to impugn the force of that Regulation, see Shepherd Report, supra, at 70, 71; Revenue Revisions, 1947—1948, Hearings before the House Committee on Ways and Means, 80th Cong., 1st Sess., p. 3283; Mineral Treatment Processes for Percentage Depletion Purposes, Hearings before the House Committee on Ways and Means, 86th Cong., 1st Sess., pp. 258, 264, seem to me quite unpersuasive.
24
This history, in my view, provides an authoritative and controlling gloss upon the term 'commercially marketable mineral product or products' in the statutory definition of 'mining,' which in turn constitutes the 'property' with which the statute deals. See Helvering v. Wilshire Oil Co., supra. It results, on this record, in limiting respondent's basis for depletion to its constructive income from raw fire clay and shale.
1
The applicable provisions of the Code are § 23(m) and § 114(d)(4), 26 U.S.C.A. §§ 23(m), 114(b)(4). In general, they provide for a depletion allowance based on a percentage of 'gross income from mining,' which is specifically defined. See note 8, infra. The percentage permitted on shale is 5%, and on fire clay, 15%.
2
The quantity of ground and bagged fire clay and shale actually sold is too negligible to furnish an appropriate basis for computing depletion.
3
The evidence indicates that, for $50, Owensboro Sewer Pipe Company bought from L.R. Chapman five acres of ground under which the shale and clay deposits lay. Contemporaneously it made a contract with L.R. Chapman, Inc., to mine and deliver shale and fire clay from this tract to the Owensboro plant for $1.40 per ton. Chapman also testified that in addition he furnished shale and fire clay to other manufacturers in the same area in Kentucky. Th arrangements varied. Some were similar to the Owensboro agreement, while others were leases on a royalty basis with a contemporaneous agreement to mine and deliver the clay at a set price. The exact year or years are not clear, but appear to have been between 1949 and 1956. Respondent began using shale and fire clay from the same source by lease arrangement in 1957. The reason for lease arrangements and paper transfer of title is not shown. However, Chapman testified that the manufacturers 'didn't seem to want to do the prospecting or the sampling until they were sure they could get either a lease or a deed.'
4
The briefs cover 294 pages and the appendices an additional 685, not including 10 charts. The record is 276 pages.
5
Preliminary Report on Depletion, Staff Reports to the Joint Committee on Internal Revenue Taxation (1930), Appendix XXXI (Shepherd Report).
6
See, e.g., Hearings before Senate Committee on Finance on H.R. 3687, 78th Cong., 1st Sess. 528; S.Rep. No. 627, 78th Cong., 1st Sess. 23—24; Hearings before House Committee on Ways and Means on Revenue Revisions, 80th Cong., 1st Sess., part 3, at 1857; Hearings before Senate Committee on Finance on H.R. 8920, 81st Cong., 2d Sess. 771; S.Rep. No. 2375, 81st Cong., 2d Sess. 53—54.
7
The present statute, § 613 of the Internal Revenue Code of 1954, 26 U.S.C.A. § 613, is essentially unchanged.
8
Internal Revenue Code of 1939, § 114(b)(4)(B):
'Definition of gross income from property. As used in this paragraph the term 'gross income from the property' means the gross income from mining. The term 'mining' as used herein shall be considered to include not merely the extraction of the ores or minerals from the ground but also the ordinary treatment processes normally applied by mine owners or operators in order to obtain the commercially marketable mineral product or products, and so much of the transportation of ores or minerals (whether or not by common carrier) from the point of extraction from the ground to the plants or mills in which the ordinary treatment processes are applied thereto as is not in excess of 50 miles unless the Secretary finds that the physical and other requirements are such that the ore or mineral must be transported a greater distance to such plants or mills. The term 'ordinary treatment processes,' as used herein, shall include the following: (i) In the case of coal cleaning, breaking, sizing, and loading for shipment; (ii) in the case of sulphur—pumping to vats, cooling, breaking, and loading for shipment; (iii) in the case of iron ore, bauxite, ball and sagger clay, rock asphalt, and minerals which are customarily sold in the form of a crude mineral product—sorting, concentrating, and sintering to bring to shipping grade and form, and loading for shipment; and (iv) in the case of lead, zinc, copper, gold, silver, or fluorspar ores, potash, and ores which are not customarily sold in the form of crude mineral product—crushing, grinding, and beneficiation by concentration (gravity, Flotation, amalgamation, electrostatic, or magnetic), cyanidation, leaching, crystallization, precipitation (but not including as an ordinary treatment process electrolytic deposition, roasting, thermal or electric smelting, or refining), or by substantially equivalent processes or combination of processes used in the separation or extraction of the product or products from the ore, including the furnacing of quicksilver ores. The principles of this subparagraph shall also be applicable in determining gross income attributable to mining for the purposes of sections 450 and 453.' 26 U.S.C. (1952 ed.) § 114, 26 U.S.C.A. § 114.
9
Robert M. Searls, Attorney, San Francisco, Hearings before the Senate Special Committee on the Investigation of Silver, 77th Cong., 2d Sess., p. 764.
10
Respondent's cases are based on United States v. Cherokee Brick & Tile Co., 5 Cir., 218 F.2d 424 (adhered to in United States v. Merry Bros. Brick & Tile Co., 5 Cir., 242 F.2d 708), which went off on factual concessions not present here. They have been pyramided into a statistically imposing number of cases, predicated upon one another. Close analysis indicates that they either go off on concessions or findings not present here, or deal with controversies over particular treatment processes claimed as 'ordinary' in the industry involved. For our purposes, we need not reach the question of whether in those cases the minerals in place had any 'value' to be depleted. Other than the decision here under review, only two of the Court of Appeals cases cited by respondent, both from the same Circuit (Commissioner v. Iowa Limestone Co., 8 Cir., 269 F.2d 398; Bookwalter v. Centropolis Crusher Co., 8 Cir., 272 F.2d 391), adopt the profitability test, which we find unacceptable.
| 1112
|
364 U.S. 19
80 S.Ct. 1470
4 L.Ed.2d 1540
CONTINENTAL GRAIN COMPANY, Petitioner,v.THE Barge FBL-585 and Federal Barge Lines, Inc.
No. 229.
Argued April 20, 1960.
Decided June 27, 1960.
Mr. Eberhard P. Deutsch, New Orleans, La., for petitioner.
Mr. George B. Matthews, New Orleans, La., for respondents.
Mr. Justice BLACK delivered the opinion of the Court.
1
The single issue presented for decision in this case is whether the United States District Court in New Orleans, acting under 28 U.S.C. § 1404(a), 28 U.S.C.A. § 1404(a), erred in ordering that this action for damages to cargo from alleged unseaworthiness be transferred for trial, 'in the interest of justice,' to the United States District Court at Memphis, Tennessee, where the sinking of the barge occurred. The Court of Appeals affirmed the District Court's transfer order. 268 F.2d 240. We granted certiorari to consider this important question. 361 U.S. 811, 80 S.Ct. 79, 4 L.Ed.2d 59.
2
The facts and circumstances on which the District Court transferred this case are these. Barge FBL—585, a respondent here under an ancient admiralty fiction, is owned by Federal Barge Lines, Inc., the other respondent. After the barge was partially loaded by petitioner, Continental Grain Co., with its soybeans at its wharf in Memphis, the barge sank, causing damage both to the barge and to the soybeans. A dispute arose over what caused it to sink. The barge owner, Federal Barge Lines, Inc., brought an action for damages in a Tennessee state court charging that the barge sank because the cargo owner, Continental Grain Co., had been negligent in loading it. The cargo owner later brought this action in the United States District Court in New Orleans against the barge and its owner, in a single complaint, charging that the vessel had sunk because of its defects and unseaworthiness, and claiming damages for injury to the cargo. In the meantime the damage case against the grain company had been removed from the Tennessee state court to the United States District Court at Memphis. While the litigation arising out of this single occurrence was in this posture in the New Orleans and Memphis courts, the barge-owner defendant, at New Orleans, filed a motion and accompanying affidavits under s 1404(a) to transfer 'this action' to the United States District Court at Memphis alleging that such transfer was 'necessary for the convenience of the parties and witnesses and in the interest of justice. * * *' This followed the language of § 1404(a), which provides:
3
'For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.'
4
The New Orleans District Court found that the issue in the Memphis case
5
'that is, the cause of the casualty, is precisely the issue in the case at bar. The convenience of the great majority of witnesses in this case dictates that this case be tried in Memphis. The efficient administration of justice requires that this claim for cargo damage be tried by the same court which is trying the claim for hull damage, both claims being between the same parties, and relate to the same incident.'
6
These findings were well supported by evidence, were approved by the Court of Appeals, are not challenged here, and we accept them. The case, therefore, if tried in New Orleans, will bring about exactly the kind of mischievous consequences against 'the interest of justice' that § 1404(a) was designed to prevent, that is, unnecessary inconvenience and expense to parties, witnesses, and the public.
7
The grain company argues that this frustration of the basic purpose of Congress in passing § 1404(a) is compelled by the language of the section that prevents the transfer of a 'civil action' by a District Court to any District Court other than one 'where it might have been brought.' Two weeks ago this Court decided in Hoffman v. Blaski and Sullivan v. Behimer, 363 U.S. 335, 80 S.Ct. 1084, that this language bars transfer of a 'civil action' properly pending in one District Court to another in which that 'civil action' could not have been brought because the defendant legally could not have been subjected to suit there at the time when the case was originally filed. Those cases involved transfers in which the plaintiffs filing the suits would have had no right whatever to proceed originally against the defendants on the 'civil actions' in the District Courts to which transfer was sought without the defendants, consent. But in this case there was admittedly a right on the part of the grain company to subject the owner of the barge, with or without its consent, to a 'civil action' in Memphis at the time the New Orleans action was brought. Under these circumstances it would plainly violate the express command of § 1404(a), as construed in our two prior cases, to reverse the District Court's judgment ordering this single civil action to be transferred to Memphis, unless transfer is barred by the joinder of the in rem claim against the barge with the claim against the owner itself. The grain company takes this view of the effect of joinder, arguing that since the barge was in New Orleans when this 'civil action' was brought and the admiralty in rem claim therefore could not have been brought in Memphis at that time, the entire civil action must remain in the inconvenient New Orleans forum. This view is reached by labeling this single civil action as two, one against the barge and one against the owner. It asserts this view despite the fact that the grain company's suit against the barge and its suit against the owner are in the same complaint for the loss of the same cargo in the same sinking of the same barge producing the same damages. The basis of this view that there are two distinct civil actions for § 1404(a) purposes is a long-standing admiralty fiction that a vessel may be assumed to be a person for the purpose of filing a lawsuit and enforcing a judgment.1
8
The fiction relied upon has not been without its critics even in the field it was designed to serve. It has been referred to as 'archaic,' 'an animistic survival from remote times,' 'irrational' and 'atavistic.'2 Perhaps this is going too far since the fiction is one that certainly had real cause for its existence in its context and in the day and generation in which it was created. A purpose of the fiction, among others, has been to allow actions against ships where a person owning the ship could not be reached, and it can be very useful for this purpose still. We are asked here, however, to transplant this ancient salt-water admiralty fiction into the dry-land context of forum non conveniens, where its usefulness and possibilities for good are questionable at best. In fact, the fiction appears to have no relevance whatever in a District Court's determination of where a case can most conveniently be tried. A fiction born to provide convenient forums should not be transferred into a weapon to defeat that very purpose.
9
This Court has not hesitated in the past to refuse to apply this same admiralty fiction in a way that would cut down, as it would here, the scope of congressional enactments. In fact, Mr. Justice Bradley, speaking for the Court, said at one time, in construing a statute which had limited a shipowner's liability but had failed to refer to the 'personal' liability of the vessel:
10
'To say that an owner is not liable, but that his vessel is liable, seems to us like talking in riddles. A man's liability for a demand against him is measured by the amount of the property that may be taken from him to satisfy that demand. In the matter of liability, a man and his property cannot be separated * * *.' The City of Norwich, 118 U.S. 468, 503, 6 S.Ct. 1150, 1162, 30 L.Ed. 134.
11
Fifty-seven years later this Court was confronted with a similar argument about another section of the same statute, and after referring to the analysis in The City of Norwich concluded,
12
'The riddle after more than half a century repeated to us in different context does not appear to us to have improved with age. * * * Congress has said that the owner shall not 'answer for' this loss in question. Claimant says this means in effect that he shall answer only with his ship. But the owner would never answer for a loss except with his property, since execution against the body was not at any time in legislative contemplation. There could be no practical exoneration of the owner that did not at the same time exempt his property.' Consumers Import Co. v. Kabushiki Kaisha Kawasaki Zosenjo, 320 U.S. 249, 253—254, 64 S.Ct. 15, 17, 88 L.Ed. 30.
13
We follow the common- sense approach of these two cases in interpreting § 1404(a). Failure to do so would practically scuttle the forum non conveniens statute so far as admiralty actions are concerned. All a plaintiff would need to do to escape from it entirely would be to bring his action against both the owner and the ship, as was done here. This would be all the more unfortunate since courts have long recognized 'admiralty's approach to do justice with slight regard to formal matters,'3 and, as this Court has recently observed,
14
'Admiralty practice, which has served as the origin of much of our modern federal procedure, should not be tied to the mast of legal technicalities it has been the forerunner in eliminating from other federal practices.' British Transport Comm. v. United States, 354 U.S. 129, 139, 77 S.Ct. 1103, 1108, 1 L.Ed.2d 1234.
15
It is relevant that the law of admiralty itself is unconcerned about the technical distinctions between in rem and in personam actions for purposes of transferring admiralty actions from one court to a more convenient forum. This Court's Admiralty Rule 54, 28 U.S.C.A., which prescribes the procedures for owners' limiting their liability after vessels have been libeled, provides in language broader than § 1404(a): 'The District Court may, in its discretion, transfer the proceedings to any district for the convenience of the parties.' And it may be further observed that courts have not felt themselves bound by this fiction when confronted with the argument that because in rem and in personam actions involve different parties, therefore res judicata does not apply from an in personam action against an owner to an in rem action against his ship.4 It is interesting in this connection to take note of the fact that, according to the Court of Appeals opinion, the case at Memphis has already been tried.5 To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent. Moreover, such a situation is conductive to a race of diligence among litigants for a trial in the District Court each prefers. These are additional reasons why § 1404(a) should not be made ambiguous by the importation of irrelevant fictions.
16
The idea behind § 1404(a) is that where a 'civil action' to vindicate a wrong—however brought in a court—presents issues and requires witnesses that make one District Court more convenient than another, the trial judge can, after findings, transfer the whole action to the more convenient court. That situation exists here. Although the action in New Orleans was technically brought against the barge itself as well as its owner, the obvious fact is that, whatever other advantages may result, this is an alternative way of bringing the owner into court. And although any judgment for the cargo owner will be technically enforceable against the barge as an entity as well as its owner, the practical economic fact of the matter is that the money paid in satisfaction of it will have to come out of the barge owner's pocket—including the possibility of a levy upon the barge even had the cargo owner not prayed for 'personified' in rem relief. The crucial issues about fault and damages suffered were identical, whether considered as a claim against the ship or its owner. The witnesses were identical. Thus, while two methods were invoked to bring the owner into court and enforce any judgment against it, the substance of what had to be done to adjudicate the rights of the parties was not different at all. Treating both methods for § 1404(a) purposes for what they are in a case like this—inseparable parts of one single 'civil action' merely permits or requires parties to try their issues in a single 'civil action' in a court where it 'might have been brought.' To construe § 1404(a) this way merely carries out its design to protect litigants, witnesses and the public against unnecessary inconvenience and expense, not to provide a shelter for in rem admiralty proceedings in costly and inconvenient forums.
17
For the reasons stated here the judgment is affirmed.
18
Affirmed.
19
Mr. Justice FRANKFURTER, whom Mr. Justice HARLAN joins.
20
Although this case also involves some nice questions of admiralty procedure, since the claimant barge owner has moved for transfer and has agreed to 'pay any final decree which may be rendered against', the barge, the controlling considerations for me are those set forth in my opinion in Sullivan v. Behimer, 1960, 363 U.S. 351, 80 S.Ct. 1084. Accordingly, I would affirm the judgment.
21
Mr. Justice WHITTAKER, with whom Mr. Justice DOUGLAS joins, dissenting.
22
I think that this case, if its true facts be recognized and faced, is controlled by the Court's opinion in Hoffman v. Blaski and Sullivan v. Behimer, 363 U.S. 335, 80 S.Ct. 1084. I also think that the Court's opinion fails to recognize and face the crucial fact—that one of the two claims in this 'civil action' was brought in rem against the Barge, not as an attachment or 'device' to force appearance of the owner or to provide security for the payment of any in personam judgment which might be recovered against the owner, but as a personified 'debtor or offending thing' as the settled law authorizes1—which gives rise to the principal question that produces my disagreement. Indeed, I think the Court's opinion endeavors to sweep that crucial fact 'under the rug.' I will now undertake to make a plain and chronological statement of the simple facts.
23
On July 2, 1958, petitioner, Continental Grain Company,2 brought this libel in personam against Federal Barge Lines, Ind.,3 and in rem against Barge FBL—585 ('Barge'), in and on the admiralty side of the United States District Court for the Eastern District of Louisiana, New Orleans Division—where the Barge then was, and ever since has been, located—to recover damages in the sum of $90,000 to petitioner's cargo, caused by the alleged unseaworthiness and consequent partial sinking of the Barge while being loaded at Memphis, Tennessee, on November 6, 1957. The libel prayed a decree against both Federal Barge Lines, Inc., and Barge FBL—585, for the cargo damage; that Federal Barge Lines, Inc., be cited to appear and answer; that process issue against 'Barge FBL 585 and that all persons claiming any interest in said vessel be cited to appear and answer this libel,' and that 'Barge FBL—585 be condemned and sold to pay the amount due libelant herein.'
24
After Federal Barge Lines, Inc., was served with process, and after process had issued against the Barge but before actual arrest of the Barge thereunder, Federal Barge Lines, Inc., on July 23, 1958, delivered its letter addressed to petitioner, which the latter accepted and has acted on, saying, in pertinent part, that: 'In consideration of your not having seized (the barge), under the in rem process which has been issued * * * and in further consideration of our not being required to post the usual bond for the release of that vessel, (w)e agree that we shall * * * file claim to Barge FBL 585 and (shall file) pleadings in the * * * action, and that, (whether the) vessel (be) lost or not, we shall pay any final decree which may be rendered against said vessel in said proceeding.' The last paragraph of the letter said:
25
'It is the intent of this undertaking that the rights of the libelant and claimant-respondent in this proceeding shall be, and for all purposes shall be taken to be, precisely the same as they would have been had the vessel, in fact, been taken into custody by the United States Marshal under said in rem process, and released by the filing of claim and release bond, we, as claimant, reserving in behalf of the vessel all other objections and defenses otherwise available except those which might be predicated upon the fact that the vessel was not actually so seized.'
26
Accordingly, on July 29, 1958, Federal Barge Lines, Inc., filed its claim to 'Barge FBL—585, proceeded against herein, and claim(ed) the said barge as owner and pray(ed) that it be permitted to defend according to law'; and on September 18, 1958, it filed its answer to the libel.
27
On October 13, 1958, Federal Barge Lines, Inc., filed its motion to transfer 'this action to the United States District Court for the Western District of Tennessee, Western Division, on the ground that such transfer is necessary for the convenience of the parties and witnesses and in the interest of justice as will appear from the affidavit attached hereto and made a part hereof.'4 After hearing, the District Court granted the motion and ordered the action transferred as requested by the movant, but the district judge, acting under the Interlocutory Appeals Act, 28 U.S.C. § 1292(b), 28 U.S.C.A. § 1292(b), 'certified that this order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from this order may materially advance the ultimate termination of this litigation.'5
28
Petitioner then sought and was allowed an appeal by the Court of Appeals under 28 U.S.C. § 1292(b), 28 U.S.C.A. § 1292(b).6 That court, relying heavily on its opinion in Ex parte Blaski, 5 Cir., 245 F.2d 737, affirmed 5 Cir., 268 F.2d 240, and we granted certiorari 361 U.S. 811, 80 S.Ct. 79, 4 L.Ed.2d 59.
29
Although the Court of Appeals found 'that fair application of the letter undertaking * * * requires that we reat it as though, upon the libel being filed, the vessel had actually been seized, a Claim filed, a stipulation to abide decree with sureties executed and filed by Claimant, and the vessel formally released,' it held that, inasmuch as the claimant-respondent had by its motion to transfer consented 'to an unlimited submission of the cause (to the Tennessee District Court) even though it could not have been filed there initially,' transfer of the in rem action to that court 'presents no real or conceptual difficulties,' because '(t)he Court does not undertake to transfer the res, nor does it even attempt to transfer the cause while the res is still in custody of the Court'; that when, as here, a 'bond (stipulation)' is given and substituted for the vessel '(t)raditional notions are not affected if that security floats with the cause wherever the law navigates it.' Id., 268 F.2d at pages 243, 244.
30
It is not disputed that the libel, insofar as it is in personam, might have been brought by petitioner against respondent, Federal Barge Lines, Inc., in the United States District Court for the Western District of Tennessee, as that court had jurisdiction to entertain such an action and Federal Barge Lines, Inc., was amenable to the service of monition there. Hence, if this libel had been brought only in personam against Federal Barge Lines, Inc.—i.e., had omitted the claim in rem against the Barge—it could have been transferred to the Tennessee District, for such an action could have been brought in that forum. But, as the parties agree, petitioner had a legal right to join in one action, as it did here, a claim in personam against Federal Barge Lines, Inc., and one in rem against the Barge.7 The Court's opinion says that, because the claim in personam might have been brought in the Memphis forum, it is a mistake to say that 'the entire civil action must remain in the inconvenient New Orleans forum.' But respondent's motion did not ask transfer of only the claim in personam, if indeed the court could have severed the two claims and have transferred one and kept the other—a matter not at all dealt with in the Court's opinion. Instead it asked transfer of the whole action, and so we are presented with the question whether an admiralty action in rem, or partly in rem, may be transferred, upon application of the claimant of the res, to a district in which the res is not located, and in which the libellant did not have a legal right to bring it.
31
The Court treats this case as a 'single' damage action against only the barge owner. That treatment simply ignores the crucial fact which gives rise to the question we have here. Of course, if this were simply a 'single' action for damages against only the barge owner we would not have the question that confronts us, for we all agree that such an action 'might have been brought' in the Memphis forum, and, hence, if brought elsewhere it could have been transferred to that forum under § 1404(a). But those are not the facts. The facts are that there were two claims in this 'civil action,' one in personam against the owner, and one in rem against the Barge. And we cannot decide the question presented by denying its existence or by ignoring the facts that created it. One of the two claims of this 'civil action' was in rem against the Barge. The Barge was in New Orleans when this suit was brought. Therefore, this 'civil action' could not have been brought in Memphis, and, hence, cannot be transferred to that forum if the limiting words of § 1404(a), 'where it might have been brought,' are to have any meaning.
32
Petitioner, relying on the established principle that an action in rem may be brought only in the district where the res is located,8 or possibly, under the accustomed practice in admiralty, in the district where, as alleged in the libel, the res (vessel) will be 'during the pendency of the process (issued on the libel),'9 contends that inasmuch as the Barge was located in the Eastern District of Louisiana when the libel was filed, this action could not have been brought or prosecuted in any other district and, hence, the court was without power, under 28 U.S.C. § 1404(a), 28 U.S.C.A. § 1404(a),10 to transfer it, upon respondents' motion and even with their waiver of venue and jurisdiction, to the Western District of Tennessee, where it could not have been brought by the libellant. This contention accords with our opinion in the Blaski and Behimer cases, 363 U.S. 335, 80 S.Ct. 1084.
33
But respondents contend that an admiralty court is not subject to the provision of § 1404(a) limiting the transfer of an action to a district 'where it might have been brought,' but is empowered by Admiralty Rule 44 to transfer an action, on the motion of the claimant-respondent and a mere showing of convenience, to any other district. This contention is wholly without merit. Admiralty Rule 44,11 which in effect authorizes District Courts to formulate local rules of practice, is expressly limited to 'cases not provided for by these rules or by statute * * *.' The matter of transferring 'any civil action'—which phrase includes actions in admiralty12—is expressly prescribed by a statute. Section 1404(a) expressly limits a District Court's power to transfer a civil action to a district or division 'where it might have been brought.' Hoffman v. Blaski, supra. The power to transfer actions cannot derive from local practice but only from substantive law. Nor is there any showing here that the District Court has ever even purported to promulgate any applicable local rule of practice.
34
Respondents next contend that even if § 1404(a) applies to the transfer of admiralty actions, that section does not preclude transfer of an admiralty action in rem to a district where the res is not located if the claimant-respondent, after having prevented the arrest or procured the release of the res by giving bond or other acceptable security, so moves and agrees to submit to the jurisdiction of the transferee court. They argue that authority to proceed in admiralty against the res (vessel) is a mere security device and, after the claimant-respondent has prevented the arrest or procured the release of the res by giving bond or other acceptable security, the in rem action is converted into one in personam, and may accordingly be transferred under § 1404(a), on motion of the claimant-respondent (but not of the libellant)13 and a finding of convenience, to any other district in which the action if originally in personam 'might have been brought.' The Court appears to agree with that argument. It criticizes the settled doctrine of personification of the ship. It says that 'perhaps (it) is going too far (to refer to the fiction of personification of the ship) as 'archaic,' 'an animistic survival from remote times,' 'irrational' and 'atavistic" (citing The Carlotta, 48 F.2d 110, 112), but it does not suggest that the numerous cases of this Court which have established and adhered to that 'fiction' for more than 150 years should be overruled—something I could understand, even at this late day. Instead, it seems merely to brush them aside or to fail to recognize their application here.
35
But admiralty proceedings in rem are not a mere security device. From its earliest history to the present time, this Court has consistently held that an admiralty proceeding in remis one essentially against the vessel itself as the debtor or offending thing; and, in such an action, the vessel itself is impleaded as the defendant, seized, judged and sentenced.14 In Rounds v. Cloverport Foundry & Machine Co., 237 U.S. 303, 35 S.Ct. 596, 59 L.Ed. 966, Mr. Justice Hughes, in distinguishing between in rem actions against a vessel, on the one hand, and attachments against a vessel to force appearance of the respondent or to provide security in an action in personam, on the other hand, said:
36
'Actions in personam with a concurrent attachment to afford security for the payment of a personal judgment are in a different category. The Belfast, 7 Wall. 624, 19 L.Ed. 266; Taylor v. Carryl, 20 How. 583, 598, 599, 15 L.Ed. 1028, 1033, 1034; The Robert W. Parsons, supra. And this is so not only in the case of an attachment against the property of the defendant generally, but also where it runs specifically against the vessel under a state statute providing for a lien, if it be found that the attachment was auxiliary to the remedy in personam. Leon v. Galceran, 11 Wall. 185, 20 L.Ed. 74; see also Johnson v. Chicago, etc., Elevator Co., 119 U.S. 388, 398, 399, 7 S.Ct. 254, 30 L.Ed. 447, 450, 451; Knapp, S. & Co. v. McCaffrey, 177 U.S. 638, 646, 648, 20 S.Ct. 824, 44 L.Ed. 921, 925, 926.' Id., 237 U.S. at page 307, 35 S.Ct. at page 597.
37
Indeed, the absence of liability of the owner of a vessel does not necessarily exonerate the vessel itself.15 If, for example, a vessel under bareboat charter damages another as the result of the negligence of her crew, the vessel is liable in rem even though an action in personam would not lie against her owner.16 Likewise, the right of one damaged by the wrong of a vessel to proceed against her follows her into the hands of an innocent purchaser, although the latter is not liable in personam.17 Similarly, a vessel is liable in rem for damages resulting from her negligent operation by an independent pilot to whose control the law required her to be confined, although her owner is not liable in personam.18
38
The cases cited by the Court,19 holding that in expressly exonerating by statute shipowners from certain liabilities for casualty losses of cargo at sea, Congress similarly intended to exonerate their property, i.e., their ships, from such liabilities, are wholly inapposite. They involved only interpretation of particular statutes, and did not at all deal with, and certainly were not intended to destroy, for they expressly recognized, the historic difference and distinction between admiralty actions in personam and those in rem. Nor does this Court's Admiralty Rule 54, discussed by the Court, touch the question of transferability of this case. This is not a limitation of liability proceeding, specially covered by that Rule, and the parties make no such claim. Rather we have here only a simple motion to transfer a 'civil action' from one District to another, and such a motion is exclusively governed by § 1404(a).
39
The Barge itself being the 'offending thing,' and here being itself subject to suit, and having been sued, in rem, we think it may not be said that the giving by respondent, Federal Barge Lines, Inc., and the acceptance by petitioner, of the 'letter undertaking,' to prevent the physical arrest of the Barge, converted the in rem action into one in personam. That letter expressly said that the rights of the parties would for all purposes be 'precisely the same as they would have been had the vessel, in fact, been taken into custody by the United States Marshal under said in rem process, and released by the filing of claim and release bond * * *.' That this letter was legally effective in accordance with its terms is not disputed. This Court has from an early day consistently held that a bond, given to prevent the arrest or to procure the release of a vessel, is substituted for and stands as the vessel in the custody of the court.20 Inasmuch as the parties agreed that the letter involved here was to have precisely the same effect as a bond, it follows that the letter is, just as a bond would have been, a substitute for the vessel in the custody of the court, and that the giving and accepting of the letter did not convert the in rem action into one in personam.
40
Respondents finally argue that even though the Barge itself could be and was sued as the 'offending thing' and, being located in the district of suit, this action in rem against it could not have been brought elsewhere without respondent's consent, it was as possible for the Barge voluntarily to enter appearance in and submit to the venue and jurisdiction of the transferee court as it would have been for one sued in personam to do so,21 and that their motion to transfer had that effect. Whether jurisdiction over a res in an action in rem may be conferred by consent of its owner, given either before or after the action has been brought, upon a court that does not have territorial jurisdiction or custody of the res we need not decide, for the question here is not such, but, rather, it is simply whether a District Court is empowered by § 1404(a) to transfer such an action to a district in which the libellant did not have the right to bring it, independently of the will or wishes of the claimant-respondent. That question was ruled in the negative by Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, and I think it follows that the judgment in this case should be reversed.
1
'A ship is the most living of inanimate things. Servants sometimes say 'she' of a clock, but every one gives a gender to vessels. And we need not be surprised, therefore, to find a mode of dealing which has shown such extraordinary vitality in the criminal law applied with even more striking thoroughness in the Admiralty. It is only by supposing the ship to have been treated as if endowed with personality, that the arbitrary seeming peculiarities of the maritime law can be made intelligible, and on that supposition they at once become consistent and logical.' Holmes, The Common Law (1881), 26—27.
2
The Carlotta, 2 Cir., 1931, 48 F.2d 110, 112, 1931 Am.Mar.Cas. 742, 745, quoted in Gilmore and Black, The Law of Admiralty (1957), 508.
3
Point Landing, Inc., v. Alabama Dry Dock & Shipbuilding Co., 5 Cir., 1958, 261 F.2d 861, 866, 1959 Am.Mar.Cas. 148, 155.
4
See Burns Bros. v. Central R. Co., 2 Cir., 1953, 202 F.2d 910, 1953 Am.Mar.Cas. 718; Sullivan v. Nitrate Producers' S.S. Co., 2 Cir., 1919, 262 F. 371; Bailey v. Sundberg, 2 Cir., 1892, 49 F. 583; Gilmore and Black, The Law of Admiralty (1957), 507 509.
5
268 F.2d 240, 242, note 2, 1959 A.M.C. 2158, 2160, note 2.
1
See note 15, infra.
2
Petitioner, Continental Grain Company, is a Delaware corporation maintaining its principal office in New York, New York, but is also authorized to do and is doing business in the City of Memphis in the Western District of Tennessee.
3
Federal Barge Lines, Inc., a Delaware corporation, is a common carrier by water, operating on the Mississippi River and its principal tributaries, and has offices and does business in, among other places, Memphis, Tenessee, and New Orleans, Louisiana.
4
The principal averments of the affidavit referred to were (1) that on June 27, 1958, Federal Berge Lines, Inc., filed an action at law against petitioner, Continental Grain Company, in the Circuit Court of Shelby County, Tennessee, for damages to its Barge FBL—585, caused by the alleged negligence of the grain company in loading it at Memphis on November 6, 1957, which action was removed by the grain company to the United States District Court for the Western District of Tennessee on July 15, 1958, and (2) that the necessary witnesses reside in or nearer to Memphis than to New Orleans.
5
In his unpublished per curiam the district judge said, inter alia, 'The libel is in rem as to the Barge FBL—585. While this libel could have been orginally brought in the Western District of Tennessee against the respondent, Federal Barge Lines, the owner of the barge, the libel as to the barge itself would ordinarily be restricted to the place where the barge is located at the time the libel is filed. At that time, and now, the barge is located in this district. However, since the barge was neither seized by the Marshal nor bonded by respondent, libellant having accepted respondent's letter undertaking to respond to any decree entered herein, and since the owner thereof, Federal Barge Lines, apparently is financially able to respond to any decree rendered against it, the interest of justice would best be served by * * * transferring this case to the Western District of Tennessee.'
6
The District Court stayed its order of transfer, pending determination of the appeal.
7
Newell v. Norton, 3 Wall. 257, 18 L.Ed. 271; In re Fassett, 142 U.S. 479, 484, 12 S.Ct. 295, 297, 35 L.Ed. 1087 ('The District Court has jurisdiction to determine the question, because it has jurisdiction of the vessel by attachment, and of Fassett by monition * * *.'); The Resolute, 168 U.S. 437, 442, 18 S.Ct. 112, 114, 42 L.Ed. 533; Turner v. United States, 2 Cir., 27 F.2d 134, 136.
8
The Ann, 9 Cranch 289, 291, 3 L.Ed. 734; Miller v. United States, 11 Wall. 268, 294, 20 L.Ed. 135; United States v. Mack, 295 U.S. 480, 484, 55 S.Ct. 813, 815, 79 L.Ed. 1559; Clinton Foods v. United States, 4 Cir., 188 F.2d 289, 292; Fettig Canning Co. v. Steckler, 7 Cir., 188 F.2d 715, 717—718. Cf. Torres v. Walsh, 2 Cir., 221 F.2d 319, 321; Broussard v. The Jersbek, D.C., 140 F.Supp. 851, 852—853.
9
Notwithstanding the provision of Admiralty Rule 22 (28 U.S.C. p. 5226, 28 U.S.C.A.) that if the libel be in rem it shall state 'that the property is within the district,' we are told that in practice the common, if not universal, jurisdictional statement in libels in rem recites 'That the vessel now is, or, during the pendency of process herein, will be, within the District and the jurisdiction of the Court.' See Internatio-Rotterdam, Inc., v. Thomsen, 4 Cir., 218 F.2d 514, 515—516—in some other aspects an anomalous opinion.
10
'§ 1404. Change of venue.
'(a) For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.'
11
Rule 44. 'Right of Trial Courts To Make Rules of Practice
'In suits in admiralty in all cases not provided for by these rules or by statute, the District Courts are to regulate their practice in such a manner as they deem most expedient for the due administration of justice, provided the same are not inconsistent with these rules.'
12
Torres v. Walsh, 2 Cir., 221 F.2d 319, 321; Internatio-Rotterdam, Inc., v. Thomsen, 4 Cir., 218 F.2d 514, 515, and see Ex parte Collett, 337 U.S. 55, 58, 69 S.Ct. 944, 946, 959, 93 L.Ed. 1207; United States v. National City Lines, Inc., 337 U.S. 78, 69 S.Ct. 955, 93 L.Ed. 1226.
13
Respondents say in their brief:
'A transfer on motion of a claimant and a transfer on motion of a libellant are two different things. We do not here contend, and it is our submission that it would be error for a Court to hold, that a coercive transfer of a claimant to a different jurisdiction than that in which the suit was filed is proper. The concept of transferee jurisdiction is that there must be two available forums, and unless the moving party is the claimant, there is no secondary or transferee forum to which the case could be transferred.'
Nothing in § 1404(a), or in its legislative history, suggests such a unilateral objective and we should not, under the guise of interpretation, ascribe to Congress any such discriminatory purpose. See Hoffman v. Blaski, 363 U.S. 335, 344, 80 S.Ct. 1084, 1090.
14
The Mary, 9 Cranch 126, 144, 3 L.Ed. 678; The Moses Taylor, 4 Wall. 411, 18 L.Ed. 397; The Belfast, 7 Wall. 624, 19 L.Ed. 266; The Glide, 167 U.S. 606, 17 S.Ct. 930, 42 L.Ed. 296; The Robert W. Parsons, 191 U.S. 17, 24 S.Ct. 8, 48 L.Ed. 73; Rounds v. Cloverport Foundry & Machine Co., 237 U.S. 303, 306—307, 35 S.Ct. 596, 597, 59 L.Ed. 966.
'A ship is the most living of inanimate things. Servants sometimes say 'she' of a clock, but every one gives a gender to vessels. And we need not be surprised, therefore, to find a mode of dealing which has shown such extraordinary vitality in the criminal law applied with even more striking thoroughness in the Admiralty. It is only by supposing the ship to have been treated as if endowed with personality, that the arbitrary seeming peculiarities of the maritime law can be made intelligible, and on that supposition they at once become consistent and logical.' Holmes, The Common Law (1881), 26—27.
15
'Such personification of the vessel, treating it as a juristic person whose acts and omissions, although brought about by her personnel, are personal acts of the ship for which, as a juristic person, she is legally responsible, has long been recognized by this Court.' Canadian Aviator, Ltd., v. United States, 324 U.S. 215, 224, 65 S.Ct. 639, 644, 89 l.ed. 901.
16
The Barnstable, 181 U.S. 464, 21 S.Ct. 684, 45 L.Ed. 954. The 'settled rule is that where the ship-owner provides the vessel only, and the master and crew are selected by the charterer, the latter and not the ship-owner is responsible for their acts.' The China, 7 Wall. 53, 70, 19 L.Ed. 67.
17
'The maritime 'privilege' or lien * * * accompanies the property into the hands of a bona fide purchaser.' Vandewater v. Mills, 19 How. 82, 89, 15 L.Ed. 554. See also The China, 7 Wall. 53, 68, 19 L.Ed. 67; The John G. Stevens, 170 U.S. 113, 18 S.Ct. 544, 42 L.Ed. 969.
18
The China, 7 Wall. 53, 19 L.Ed. 67; Homer Ramsdell Transp. Co. v. La Compagnie Generale Transatlantique, 182 U.S. 406, 21 S.Ct. 831, 45 L.Ed. 1155.
19
The City of Norwich, 118 U.S. 468, 503, 6 S.Ct. 1150, 1162, 30 L.Ed. 134; Consumers Import Co. v. Kabushiki Kaisha Kawasaki Zosenjo, 320 U.S. 249, 253—254, 64 S.Ct. 15, 17—18, 88 L.Ed. 30.
20
The Palmyra, 12 Wheat. 1, 10, 6 L.Ed. 531; The Webb, 14 Wall. 406, 418, 20 L.Ed. 774; The Wanata, 95 U.S. 600, 611, 34 L.Ed. 461; United States v. Ames, 99 U.S. 35, 25 L.Ed. 295. In Judge Woolsey's very perceptive opinion in J. K. Welding Co. v. Gotham Marine Corp., D.C.S.D.N.Y., 47 F.2d 332, 335, the rule was summarized as follows:
'The stipulation for value is a complete substitute for the res, and the stipulation for value alone is sufficient to give jurisdiction to a court because its legal effect is the same as the presence of the res in the court's custody.' See also Gilmore and Black, The Law of Admiralty, at 650—651.
21
See J. K. Welding Co. v. Gotham Marine Corp., D.C.S.D.N.Y., 47 F.2d 332, 335.
| 89
|
364 U.S. 92
80 S.Ct. 1424
4 L.Ed.2d 1592
MASSEY MOTORS, INC., Petitioner,v.UNITED STATES of America, COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. Robley H. EVANS and Julia M. Evans. HERTZ CORPORATION, a corporation (Successor by Merger to J. Frank Connor, Inc., a corporation), Petitioner, v. UNITED STATES of America.
Nos. 141, 143, 283.
Supreme Court of the United States
June 27, 1960
Mr. Edgar Bernhard, Chicago, Ill., for respondents.
Mr. Justice CLARK delivered the opinion of the Court.
1
These consolidated cases involve the depreciation allowance for automobiles used in rental and allied service, as claimed under § 23(l) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 23(l) which permits the deduction for income tax purposes of a 'reasonable allowance for the exhaustion, wear and tear * * * of property used in the trade or business.' The applicable Treasury Regulations 111, § 29.23(l)—1, defines such allowance to be 'that amount which should be set aside for the taxable year in accordance with a reasonably consistent plan * * * whereby the aggregate of the amounts so set aside, plus the salvage value, will, at the end of the useful life of the depreciable property, equal the cost or other basis of the property.' The Courts of Appeals have divided on the method of depreciation which is permissible in relation to such assets, and we therefore granted certiorari to resolve this conflict. 361 U.S. 810, 812, 80 S.Ct. 64, 4 L.Ed.2d 59. We have concluded that the reasonable allowance for depreciation of the property in question used in the taxpayer's business is to be calculated over the estimated useful life of the asset while actually employed by the taxpayer, applying a depreciation base of the cost of the property to the taxpayer less its resale value at the estimated time of disposal.
2
In No. 143, Commissioner v. R.H. and J. M. Evans, the taxpayers are husband and wife. In 1950 and 1951, the husband, Robley Evans, was engaged in the business of leasing new automobiles to Evans U-Drive, Inc., at the rate of $45 per car per month. U-Drive in turn leased from 30% to 40% of the cars to its customers for long terms ranging from 18 to 36 months, while the remainder were rented to the public on a call basis for shorter periods. Robley Evans normally kept in stock a supply of new cars with which to service U-Drive and which he purchased at factory price from local automobile dealers. The latest model cars were required because of the demands of the rental business for a fleet of modern automobiles.
3
When the U-Drive service had an oversupply of cars that were used on short-term rental, it would return them to the taxpayer and he would sell them, disposing of the oldest and least desirable ones first. Normally the ones so disposed of had been used about 15 months and had been driven an average of 15,000 to 20,000 miles. They were ordinarily in first-class condition. It was likewise customary for the taxpayer to sell the long-term rental cars at the termination of their leases, ordinarily after about 50,000 miles of use. They also were usually in good condition. The taxpayer could have used the cars for a longer period, but customer demand for the latest model cars rendered the older styles of little value to the rental business. Because of this, taxpayer found it more profitable to sell the older cars to used car dealers, jobbers or brokers at current wholesale prices. Taxpayer sold 140 such cars in 1950 and 147 in 1951. On all cars leased to U-Drive, taxpayer claimed on his tax returns depreciation calculated on the basis of an estimated useful life of four years with no residual salvage value. The return for 1950, for example, indicated that each car's cost to taxpayer was around $1,650; after some 15 months' use he sold it for $1,380; he charged depreciation of $515 based on a useful life of four years, without salvage value, which left him a net gain of $245, on which he calculated a capital gains tax. In 1951 the net gain based on the same method of calculation was approximately $350 per car, on which capital gains were computed. The Commissioner denied the depreciation claims, however, on the theory that useful life was not the total economic life of the automobile (i.e., the four years claimed), but only the period it was actually used by the taxpayer in his business; and that salvage value was not junk value but the resale value at the time of disposal. On this basis the estimated the useful life of each car at 17 months and salvage value at $1,325; depreciation was permitted only on the difference between this value and the original cost. The Tax Court accepted the Commissioner's theory but made separate findings. The Court of Appeals reversed, holding that useful life was the total physical or economic life of the automobiles—not the period while useful in the taxpayer's business. 264 F.2d 502.
4
In No. 141, Massey Motors, Inc., v. United States, the taxpayer, a franchised Chrysler dealer, withdrew from shipments to it a certain number of new cars which were assigned to company officials and employees for use in company business. Other new cars from these shipments were rented to an unaffiliated finance company at a substantial profit.
5
The cars assigned to company personnel were uniformly sold at the end of 8,000 to 10,000 miles' use or upon receipt of new models, whichever was earlier. The rental cars were sold after 40,000 miles or upon receipt of new models. For the most part, cars assigned to company personnel and the rental cars sold for more than they cost the taxpayer. During 1950 and 1951, the tax years involved here, the profit resulting from sale of company personnel cars was $11,272.80 and from rental cars, $525.84. The taxpayer calculated depreciation on the same theory as did taxpayer Evans, computing the gains on the sales at capital gain rates with a basis of cost less depreciation. The Commissioner disallowed the depreciation claimed. After paying the tax and being denied a refund, the taxpayer filed this suit. The trial court decided against the Commissioner. The Court of Appeals for the Fifth Circuit, however, reversed, sustaining the Commissioner's views as to the meaning of useful life and salvage value. 264 F.2d 552.
6
First, it may be well to orient ourselves. The Commissioner admits that the automobiles involved here are, for tax purposes, depreciable assets rather than ordinary stock in trade. Such assets, employed from day to day in business, generally decrease in utility and value as they are used. It was the design of the Congress to permit the taxpayer to recover, tax free, the total cost to him of such capital assets; hence it recognized that this decrease in value—depreciation—was a legitimate tax deduction as business expense. It was the purpose of § 23(l) and the regulations to make a meaningful allocation of this cost to the tax periods benefited by the use of the asset. In practical life, however, business concerns do not usually know how long as asset will be of profitable use to them or how long it may be utilized until no longer capable of functioning. But, for the most part, such assets are used for their entire economic life, and the depreciation base in such cases has long been recognized as the number of years the asset is expected to function profitably in use. The asset being of no further use at the end of such period, its salvage value, if anything, is only as scrap.
7
Some assets, however, are not acquired with intent to be employed in the business for their full economic life. It is this type of asset, where the experience of the taxpayers clearly indicates a utilization of the asset for a substantially shorter period than its full economic life, that we are concerned with in these cases. Admittedly, the automobiles are not retained by the taxpayers for their full economic life and, concededly, they do have substantial salvage, resale or second-hand value. Moreover, the application of the full-economic-life formula to taxpayers' businesses here results in the receipt of substantial 'profits' from the resale or 'salvage' of the automobiles, which contradicts the usual application of the full-economic-life concept. There, the salvage value, if anything, is ordinarily nominal. Furthermore, the 'profits' of the taxpayers here are capital gains and incur no more than a 25% tax rate. The depreciation, however, is deducted from ordinary income. By so translating the statute and the regulations, the taxpayers are able, through the deduction of this depreciation from ordinary income, to convert the inflated amounts from income taxable at ordinary rates to that taxable at the substantially lower capital gains rates. This, we believe, was not in the design of Congress.
8
It appears that the governing statute has at no time defined the terms 'useful life' and 'salvage value.' In the original Act, Congress did provide that a reasonable allowance would be permitted for 'wear and tear of property arising out of its use or employment in the business.' (Emphasis added.) Act of Oct. 3, 1913, 38 Stat. 167. This language, particularly that emphasized above, may be fairly construed to mean that the wear and tear to the property must arise from its use in the business of the taxpayer—i.e., useful life is measured by the use in a taxpayer's business, not by the full abstract economic life of the assert in any business. In 1918, the language of § 23(l) was amended so that the words emphasized above would read 'used in the trade or business,' § 214(a) (8), Revenue Act of 1918, 40 Stat. 1067, and the section carried those words until 1942. Meanwhile, Treas.Reg. 45, Art. 161, was promulgated in 1919 and continued in substantially the same form until 1941. It provided:
9
'The proper allowance for such depreciation of any property used in the trade or business is that amount which should be set aside for the taxable year in accordance with a consistent plan by which the aggregate of such amounts for the useful life of the property in the business will suffice, with the salvage value, at the end of such useful life to provide in place of the property its cost * * *.' (Emphasis added.)
10
It, too, may be construed to provide that the use and employment of the property in the business relates to the trade or business of the taxpayer—not, as is contended, to the type or class of assets subject to depreciation. The latter contention appears to give a strained meaning to the phrase. This might be particularly true of the language in Treasury Regulations 103, promulgated January 29, 1940, under the Internal Revenue Code of 1939. Its § 19.23(l)—1 and § 19.23(l)—21 complement each other and seem to advise the taxpayer how to compute depreciation and what property is subject to it. The first section not only describes the proper allowance, but sets out how it is to be computed so that depreciation 'plus the salvage value, will, at the end of the useful life of the property in the business, equal the cost * * *.' (Emphasis added.) The second section specifically defines the type of assets to which the depreciation allowance is applicable. It may be said that the taxpayers' arguments as to this regulation fail completely, since it not only specifically provides that 'useful life' relates to property while used 'in the business,' but also details the type or class of property included within the allowance. It appears to cut from under the taxpayers the argument that the term 'property used in the trade or business' relates to the type or class of assets that are included within the allowance. It would be strange to say that both of these sections of Regulations 103 defined the same thing, viz., the type or class of assets subject to depreciation. On the other hand, the taxpayers point out that Regulations 111, issued in 1942, deleted the words 'property in the business' from § 19.23(l)—1 and substituted the term 'depreciable property.' This might, as taxpayers claim, establish that the phrase 'property used in the trade or business' merely referred to the type of property involved. Certainly when considered in isolation, this appears to be true. But the 'depreciable property' phrase does refer back to the earlier identical language, still remaining in the section, of 'property used in the trade or business.' It does appear, however, as the Court of Appeals in No. 141, Massey, held, that this substitution was made because Congress expanded the depreciation allowance provision of § 23(l) to include property held for the production of income. The change in the Regulations only conformed it to this amendment of the basic statute.
11
It is true, as taxpayers contend and as we have indicated, that the language of the statute and the regulations as we have heretofore traced them may not be precise and unambiguous as to the term 'useful life.' It may be that the administrative practice with regard thereto may not be pointed to as an example of clarity, and that in some cases the Commissioner has acquiesced in inconsistent holdings. But from the promulgation of the first regulation in 1919, he has made it clear that salvage had some value and that it was to be considered as something other than zero in the depreciation equation. In fact many of the cases cited by the parties involved controversies over the actual value of salvage, not as scrap but on resale.2 The consistency of the Commissioner's position in this regard is evidenced by the fact that the definition of salvage as now incorporated in the regulations is identical with that claimed at least since 1941. In the light of this, it appears that the struggle over the term 'useful life' takes on less practical significance, for, if salvage is the resale value and a deduction of this amount from cost is required, the dollar-wise importance to the taxpayer of the breadth in years of 'useful life' is diminished. It is only when he can successfully claim that salvage means junk and has no value that an interpretation of 'useful life' as the functional, economic, physical life of the automobile brings money to his pocket. Moreover, in the consideration of the appropriate interpretation on the term, it must be admitted that there is administrative practice and judicial decision in its favor, as we shall point out. Furthermore, as we have said, Congress intended by the depreciation allowance not to make taxpayers a profit thereby, but merely to protect them from a loss. The concept is, as taxpayers say, but an accounting one and, we add, should not be exchangeable in the market place. Accuracy in accounting requires that correct tabulations, not artificial ones, be used. Certainly it is neither accurate nor correct to carry in the depreciation equation a value of nothing as salvage on the resale of the automobiles, when the taxpayers actually received substantial sums therefor. On balance, therefore, it appears clear that the weight of both fairness and argument is with the Commissioner.
12
Our conclusion as to this interpretation of the regulations is buttressed, we think, by a publication issued by the Commissioner in 1942, the same year as Regulations 111, and long before this controversy arose. It is known as Bulletin 'F' and has been reissued as late as 1955. While it does not have the authority of a regulation, its significance is indicated clearly by the fact that both the taxpayers and the Commissioner point to it as conclusive of their respective views of the administrative practice. Likewise it is widely cited by tax authorities, as well as by the Courts of Appeals. A careful examination of the entire bulletin, however, indicates that it clearly supports the administrative practice claimed here by the Commissioner. For example, the title page warns that '(t)he estimated useful lives and rates of depreciation * * * are based on averages and are not prescribed for use in any particular case.'3 Again on page 2, Bulletin 'F', in discussing depreciation, emphasizes that it is based on 'the useful life of the property in the business.' What is more significant is the simple clarity with which, on page 7, it defines salvage value to be 'the amount realizable from the sale * * * when property has become no longer useful in the taxpayer's business and is demolished, dismantled, or retired from service.' It even goes further to say that salvage 'should serve to reduce depreciation, either through a reduction in the basis on which depreciation is computed or a reduction in the rate.'
13
Moreover, Congress was aware of this prior prevailing administrative practice as well as the concept of depreciation upon which it was based. Although the tax years involved here are 1950 and 1951, we believe that the action of Congress in adopting the 1954 Code should be noted, since it specifically recognized the existing depreciation equation. For the first time, the term 'useful life' was inserted in the statutory provision. The accompanying House Report to the bill stated:
14
'Depreciation allowances are the method by which the capital invested in an asset is recovered tax-free over the years it is used in a business. The annual deduction is computed by spreading the cost of the property over its estimated useful life.' H.R.Rep.No. 1337, 83d Cong., 2d Sess. 22.
15
It is also noteworthy that the report states that 'The changes made by your committee's bill merely affect the timing and not the ultimate amount of depreciation deductions with respect to a property.' Id., at 25.
16
Moreover, as we have said, there are numerous cases in the Tax Court in which depreciation was permitted only on the useful life of the property in the taxpayer's business.4 The taxpayers point to others5 which appear to be to the contrary. In most of these, however, the issue was factual, i.e., the time lapse before the property would wear out from use or, as we have said, its salvage or resale value. They cannot be said to prove conclusively that the Commissioner was following a physically useful-life theory; for there is no affirmative showing or finding as to the length of the physically useful life. The most that can be said is that the element of compromise probable played a predominant role in the result in each case. Moreover, there is no indication in any of these cases that the amount of depreciation would have been changed by computing it on the basis of its useful life in the business. The cases do not seem to reflect considered judgments as to the proper meaning of an terms used in the depreciation equation and we find them of little value as precedents.
17
Finally, it is the primary purpose of depreciation accounting to further the integrity of periodic income statements by making a meaningful allocation of the cost entailed in the use (excluding maintenance expense) of the asset to the periods to which it contributes. This accounting system has had the approval of this Court since United States v. Ludey, 1927, 274 U.S. 295, 301, 47 S.Ct. 608, 610, 71 L.Ed. 1054, when Mr. Justice Brandeis said, 'The theory underlying this allowance for depreciation is that by using up the plant a gradual sale is made of it.' The analogy applies equally to automobiles. Likewise in Detroit Edison Co. v. Commissioner, 1943, 319 U.S. 98, 101, 63 S.Ct. 902, 904, 87 L.Ed. 1286, this Court said:
18
'The end and purpose of it all (depreciation accounting) is to approximate and reflect the financial consequences to the taxpayer of the subtle effects of time and use on the value of his capital assets. For this purpose it is sound accounting practice annually to accrue * * * an amount which at the time it is retired will with its salvage value replace the original investment therein.'
19
Obviously a meaningful annual accrual requires an accurate estimation of how much the depreciation will total. The failure to take into account a known estimate of salvage value prevents this, since it will result in an understatement of income during the years the asset is employed and an overstatement in the year of its disposition. The practice has therefore grown up of subtracting salvage value from the purchase price to determine the depreciation base.6 On the other hand, to calculate arbitrarily the expected total expense entailed by the asset on the false assumption that the asset will be held until it has no value is to invite an erroneous depreciation base and depreciation rate, which may result in either an over- or an under-depreciation during the period of use. If the depreciation rate and base turn out to reflect the actual cost of employing the asset, it will be by accident only. The likelihood of presenting an inaccurate picture of yearly income from operations is particularly offensive where, as here, the taxpayers stoutly maintain that they are only in the business of renting and leasing automobiles, not of selling them. The alternative is to estimate the period the asset will be held in the business and the price that will be received for it on retirement. Of course, there is a risk of error in such projections, but prediction is the very essence of depreciation accounting. Besides, the possibility of error is significantly less where probabilities rather than accidents are relied upon to produce what is hoped to be an accurate estimation of the expense involved in utilizing the asset. Moreover, under a system where the real salvage price and actual duration of use are relevant, to further insure a correct depreciation base in the years after a mistake has been discovered, adjustments may be made when it appears that a miscalculation has been made.
20
Accounting for financial management and accounting for federal income tax purposes both focus on the need for an accurate determination of the net income from operations of a given business for a fiscal period. The approach taken by the Commissioner computes depreciation expense in a manner which is far more likely to reflect correctly the actual cost over the years in which the asset is employed in the business.7
21
We therefore conclude that the Congress intended that the taxpayer should, under the allowance for depreciation, recover only the cost of the asset less the estimated salvage, resale or second-hand value. This requires that the useful life of the asset be related to the period for which it may reasonably be expected to be employed in the taxpayer's business. Likewise salvage value must include estimated resale or second-hand value. It follows that No. 141, Massey Motors, Inc., v. United States, must be affirmed, and No. 143, Commissioner v. R.H. and J. M. Evans, reversed. It is so ordered.
22
Case No. 141 affirmed; case No. 143 reversed.
23
Mr. Justice HARLAN, whom Mr. Justice WHITTAKER, and Mr. Justice STEWART join, dissenting in Nos. 141 and 143, and concurring in the judgment in No. 283.
24
This is one of those situations where what may be thought to be an appealing practical position on the part of the Government has obscured the weaknesses of its legal position, at least in Nos. 141 and 143.
25
The position which the Commissioner takes in these cases with respect to the basic issue of 'useful life' is that contained in the regulations promulgated by him in 1956 under the Internal Revenue Code of 1954, which define the useful life of a depreciable asset as the
26
'period over which the asset may reasonably be expected to be useful to the taxpayer in his trade or business * * *.'1
27
In No. 283 the Commission seeks to apply this regulatory definition to the returns of the taxpayer with respect to the taxable years ended March 31, 1954, 1955, and 1956. In Nos. 141 and 143 he seeks in effect to apply the same definition to the taxable years 1950 and 1951, both of which were of course long before the enactment of the 1954 Code. See 264 F.2d at page 506.
28
I agree that these regulations represent a reasonable method for calculating depreciation within the meaning of the 1954 Code, and that they are valid as applied prospectively. But since I believe that as to 'useful life' they are wholly inconsistent with the position uniformly taken by the Commissioner in the past, I do not think they can be applied retrospectively in all instances. While I consider that the regulations may be so applied in No. 283, in my opinion that is not so in Nos. 141 and 143.
I.
29
It is first important to understand the precise nature of the issues before the Court. Both the method of depreciation contended for by the taxpayers and that urged by the Government purport to allocate an appropriate portion of an asset's total cost to each of the years during which the taxpayer holds it. Both methods define the total cost to be so allocated as the original cost of the asset less its salvage value at the end of its useful life. And under both methods, the total cost to be allocated is divided by the number of years in the useful life and the resulting figure is deducted from the taxpayer's income each year he holds the asset. As the Court correctly notes, the practical difference in the end results of the two methods involves the extent to which a taxpayer may be able to obtain capital-gains treatment for assets sold at or before the end of their useful life for amounts realized in excess of their remaining undepreciated cost.
30
The difference between the two methods from a theoretical standpoint is simply this: The taxpayers define useful life as the estimated physical life of the asset, while the Government defines the term as the period during which the taxpayer anticipates actually retaining the asset in his business. Thus, under the taxpayers' system, the total cost to be allocated is original cost less the salvage or junk value of the asset at the end of its physical life. This figure is divided by the number of years of estimated physical life, and the quotient is subtracted from income each year the taxpayer holds the asset. Under the Government's method, the total cost to be allocated is original cost less the 'salvage' value at the end of the asset's actual use in the business, that is, less the price anticipated on its resale at that time, even though the asset may not be in fact physically exhausted. This figure is divided by the number of years in the holding period, and the quotient is subtracted from income each year the taxpayer holds the asset.
31
If an asset is held until it is physically exhausted, both methods produce exactly the same result. Similarly, both methods can result in inaccuracies if predictions of useful life and salvage value turn out to be wrong. The Government, however, contends that where it can be predicted with reasonable certainty that an asset will be disposed of before the end of its physical life, its method of depreciation is more likely to reflect the true cost of the asset to the particular business. This is said to be so because the true cost to the business, in the end, is the asset's original cost less the amount recovered on its resale, and the Government's method starts from an estimate of that amount, which is then allocated among the years involved. The taxpayers' method on the other hand, starts from an estimate of the end cost of the asset in the general business world, and will accurately reflect such cost to the taxpayer's business only if the decline in market value at the time of resale can be expected to correspond roughly to the portion of the asset's general business end cost which has been theretofore depreciated. In many cases that may be true, but in the present cases, there is in fact a great disparity between actual decline in market value at the time of resale and the portion of cost theretofore depreciated under taxpayers' method.
32
It need not be decided whether, as an abstract matter, one method or the other is deemed preferable in accounting practice. Apparently there is a split of authority on that very question.2 It is sufficient to note that in most instances either method seems to give satisfactory results. Assuming that because of the unusual case, such as we have here, the Government's method on the whole may more accurately reflect the cost to a particular taxpayer's business, the question for me is whether the Commissioner has nevertheless established a practice to the contrary upon which taxpayers were entitled to rely until changed by him. I turn now to the examination of that question.
II.
33
The Court relies on the wording of certain revenue statutes and regulations to show that the period during which depreciable assets are employed in the taxpayer's business, as opposed to the period of their physical life, has always been regarded as useful life for purposes of depreciation. Concedly, the term useful life did not appear in the statute until the Internal Revenue Code of 1954, and though it has appeared in the regulations as early as 1919, Treas.Reg. 45, Art. 161, was never defined therein until 1956, 364 U.S. 107, 80 S.Ct. 1424, when the Commissioner took the position he now asserts. The Court seizes on language which was not directed to the present problem and which could equally be read to support the Government's or the taxpayers' contention. The situation before 1956 was as follows:
34
The Act of Oct. 3, 1913, permitted a reasonable allowance for 'wear and tear of property arising out of its use or employment in the business.'3 It is certainly true, as the Court says, that this means that 'the wear and tear to the property must arise from its use in the business of the taxpayer.' But it does not follow at all that the formula for calculating that wear and tear must be based on a useful life equal to the period the asset is held in the business. For, as noted above, a formula based on the physical life of the asset also results in an estimate of the portion of the asset's total cost attributable to its use in the business, and may in some circumstances yield the same tax consequences as a 'holding-period' formula.
35
Tresury Regulations 45, Art. 161, promulgated in 1919 and continued in substantially the same form until 1942, provided that the taxpayer should set aside each year an amount such that 'the aggregate of such amounts for the useful life of the property in the business will suffice, with the salvage value, at the end of such useful life to provide in place of the property its cost * * *.' In 1942, the statute was amended to permit depreciation, not only, as before, on property used in the trade or business, but also on property held for the production of income. Accordingly, the regulation was revised to delete the words 'property in the business' and substitute therefor 'the depreciable property.' Reg. 111, § 29.23(l)—1. The Court says that the deleted term could not have been meant to define the type of property subject to the depreciation allowance, since that function was already performed by another section of the regulation. That may be true, but it does not show that the language was meant to define the period of useful life. If it had been so meant, the Commissioner would hardly have simply substituted 'useful life of the depreciable property' for 'useful life of the property in the business,' but would have inserted appropriate language, such as 'useful life of the property while used in the business or held for the production of income.' It is quite evident that the question of a holding period different from the physical life of the property was never adverted to, and that the term 'property in the business,' while not an affirmative definition of the type of property subject to depreciation, simply referred to that definition in connection with useful life because it was apparently assumed that assets were generally held in a taxpayer's business until worn out.
36
In light of the above, the Government's reliance on cases such as United States v. Ludey, 274 U.S. 295, 300—301, 47 S.Ct. 608, 610, and Detroit Edison Co. v. Commissioner, 319 U.S. 98, 101, 63 S.Ct. 902, 903, is wide of the mark. The language relied upon in Ludey is virtually identical to that contained in the pre-1942 regulations, and that in Detroit Edison merely says that the purpose of depreciation is to recover, by the time of an asset's retirement, the original investment therein. As noted above, depreciation based on either definition of useful life is dedicated to that end. The Government's reliance on Bulletin 'F' is also misplaced. The Court refers to a statement on page 2 of the Bulletin which merely lifts from the regulation the phrase 'useful life of the property in the business.' The Court also relies on a statement appearing on page 7, defining salvage as 'the amount realizable from the sale * * * when property has become no longer useful in the taxpayer's business and is demolished, dismantled, or retired from service.' (Emphasis added.) The italicized language again reveals the assumption that assets were generally intended for use in the business until their physical exhaustion. The present question was never adverted to.
37
I believe, therefore, that the statute and regulations are wholly inconclusive, and that the Commissioner's position can be gleaned only from the stand he has taken in litigated cases. I turn now to those cases. Contrary to the picture of uncertainty which the Court draws from them, I believe they leave little room for doubt but that the Commissioner's pre-1956 position on 'useful life' was flatly opposed to that which he now takes.
III.
38
In examining the cases, it must be borne in mind that even the Commissioner does not contend that a taxpayer who happens to dispose of some asset before its physical exhaustion must depreciate it on a useful life equal to the time it was actually held. It is only when the asset 'may reasonably be expected' to be disposed of prior to the end of its physical life that the taxpayer must base depreciation on the shorter period. Reg. § 1.167(a)—1(b). Therefore, the only cases relevant in this regard are those in which the taxpayer's past experience indicated that assets would be disposed of prior to becoming junk, thus presenting the issue whether the shorter or longer period should control for purposes of depreciation.4
39
In four such cases, involving tax years prior to 1942, the taxpayer had a practice of disposing of assets substantially prior to their physical exhaustion. In Merkle Broom Co., 3 B.T.A. 1084, the taxpayer customarily disposed of its automobiles after two years. It attempted to depreciate them over a three-year useful life; the Commissioner asserted a five-year useful life; and the court allowed four years.
40
In Kurtz, 8 B.T.A. 679, the taxpayers customarily sold their automobiles after two or three years at substantial values. They depreciated on a four-year useful life; the Commissioner asserted a five-year life; and the court agreed.
41
In Sanford Cotton Mills, 14 B.T.A. 1210, the taxpayer customarily disposed of its motor trucks after two and one-half years. It claimed a three-year useful life; the Commissioner asserted a five-year useful life; and the court found that four years was reasonable.
42
In General Securities Co., 1942 P-H BTA—TC Mem. Dec. 42,219, the taxpayer sold its automobiles after one or two years. The court held that a reasonable useful life was three years.
43
It is apparent from these cases that both the Commissioner and the courts were thinking solely in terms of the physical life of the asset, despite the fact that the taxpayer customarily held the assets for a substantially shorter period. In at least some of the cases, it would have made a very real difference had depreciation been calculated on the basis that the useful life of the asset meant its holding period. For example, in the Sanford case, taxpayer's trucks were sold after two and one-half years at less than one-seventh of their original cost. Given the five-year useful life proposed by the Commissioner, taxpayer would have had, at the time of resale, an undepreciated basis equal to half the original cost, while the proceeds of resale would have brought it only one-seventh of original cost, thus giving rise to a loss of the difference. If the Government's present position had been applied, the difference between original cost and resale value would have been depreciated over two and one-half years, giving rise to no gain or loss at the end of that time. Similarly, in the General Securities case, given a three-year useful life, the taxpayer's automobiles, when traded in after one year, had an undepreciated basis of two-thirds of original cost, yet their resale brought only one-half to one-third of their original cost, again resulting in a substantial loss which would have been avoided under the Government's present method.
44
It is true that the only tax distortion present in these cases was a shift of ordinary deductions from the years in which the property was used in the business to the final year of its disposition. It is also true that had the situation been reversed, so that depreciation on a physical-life basis outran decline in market value, the resulting gain in the year of disposition would have been ordinary income, since capital-gains treatment for disposition of property used in the trade or business was not accorded by Congress until 1942.5 However, it is significant that the Commissioner's adherence to a physical-life method did result in a distortion of income by shifting deductions among various tax years, which often entails serious revenue consequences, and that by 1942 physical life seems to have been uniformly accepted as the proper definition of useful life.
45
In light of these circumstances, four cases involving tax years subsequent to 1942 acquire special significance. In Pilot Freight Carriers, Inc., 15 CCH T.C.Mem. 1027, the taxpayer disposed of its tractors after an average of 38 months and its trailers after an average of 32.6 months. It claimed depreciation on a four-year useful life with 10% or less salvage value. The Commissioner asserted useful lives of five and six years for the tractors and trailers, respectively, and the court found that four and five years, respectively, was reasonable. It is to be noted that upon resale, taxpayer received, because of wartime inflation, amounts substantially in excess of undepreciated cost, resulting in large capital gains. Yet the Commissioner, in attempting to correct this disparity, asserted only that useful life should be increased to reflect more accurately the physical exhaustion of the assets, not that it should be equated with the holding period.
46
In Lynch-Davidson Motors, Inc., v. Tomlinson, D.C., 172 F.Supp. 101, an automobile dealer disposed of company cars each year when new models were brought out, yet depreciated on a three-year useful life with salvage value of $50. The Commissioner did not dispute this method of depreciation and the court held it to be proper. In the companion case of Davidson v. Tomlinson, D.C., 165 F.Supp. 455, taxpayers were in the automobile rental business, and kept their automobiles only one year. They also were permitted to depreciate on a useful life of three years with $50 salvage value. The striking similarity between the facts of these two cases and those of the present ones need not be elaborated.
47
Finally, as late as 1959, in Hillard, 31 T.C. 961, the Commissioner took the position that the taxpayer, who operated a car rental business, and who disposed of his cars after one year, should depreciate them on the basis of a four-year useful life rather than the three years contended for by taxpayer.
48
Thus in all these cases, as in the cases before us, the problem of offsetting depreciation deductions by capital gains existed; nevertheless the Commissioner consistently adhered to the position, adopted long prior to 1942, that physical life controlled.
49
The Court, however, seems to believe that the effect of these cases is vitiated by several cases dealing with 'salvage' value. In three of such cases,6 the assets were apparently held by the taxpayer until at or near the end of their physical lives, and the only issue was whether taxpayer had erroneously calculated the salvage value at the end of that time. Thus they are of no significance for present purposes.
50
The Court's view fares no better under any other of these cases. In Bolta Co., 4 CCH T.C.Mem. 1067, involving a 1941 tax year, the taxpayer disposed of several machines after they had ceased to be useful in its business but while they were still useful in other businesses. It projected an average holding period of five years and assumed no salvage value. The Commissioner acquiesced in the five-year useful life but contended that this taxpayer could reasonably have anticipated a salvage value equal to 25% of original cost. The court agreed.
51
In Koelling v. United States, D.C., 171 F.Supp. 214, taxpayers disposed of cattle after they were no longer useful for breeding, and depreciated them on a useful life equal to that period, making no allowance for salvage value. The Commissioner found that it was unreasonable thus to deduct the entire cost of the animals over their breeding life, and required the taxpayers to deduct as salvage value their predicted resale price.
52
In Cohn v. United States, 6 Cir., 259 F.2d 371, taxpayers and established flying schools during 1941 and 1942 under contract with the Army Air Corps. The arrangement was expected to last only until the end of 1944, and the useful life of property used in the business was calculated on that basis, with no allowance for salvage value. The Commissioner asserted various longer useful lives for the property, varying from five to ten years. The court permitted the taxpayers to use the shorter useful life, but required them to deduct the reasonable salvage value of the equipment which would be realized at the end of that period. The Government did not appeal from the usefullife ruling and the only dispute was over the correct amount of salvage value.
53
Thus in two of the relevant salvagevalue cases, Bolta and Koelling, the taxpayer himself proposed a useful life equivalent to holding period but employee a hybrid version by failing to adopt the corresponding concept of salvage value. The Commissioner merely took the position that if the holding-period method was to be used, it must be used consistently by deducting the appropriate salvage value. In the third, Cohn, the Commissioner actually rejected the taxpayers' attempt to employ the holding period and merely acquiesced when the court permitted the taxpayers to do so, provided the corresponding salvage value was deducted. However, in no case, until the present ones, does it appear that the Commissioner has ever sought to require the taxpayer to use the holding-period method where the taxpayer has attempted to use physical life. And I do not understand the Government to controvert this. To the contrary, the Commissioner has not infrequently required the taxpayer to depreciate on the basis of physical life where the taxpayer had attempted to employ a shorter period, even in instances where significant capitalgains consequences turned on the difference. Indeed, as the Lynch-Davidson, Davidson, and Hillard cases, supra, indicate, the Commissioner, until quite recently, has adhered to the physical-life concept in automobile cases virtually indistinguishable from the present ones. In the past the Commissioner, unsuccessfully, has merely sought to curb the capital-gains possibilities in such instances by contending that the automobiles involved were not depreciable assets subject to capital-gains treatment under § 117(j) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 117(j). Having conceded that the property involved in the present cases is subject to the depreciation deduction, I do not think the Commissioner should now be permitted to defeat his own position as regards the meaning of 'useful life'—a position consistently maintained by him over a period of 33 years from 1926 to 1959 in every litigated case to which our attention has been called—by requiring these taxpayers, in respect of taxable years not subject to the provisions of the 1954 Code, to adopt a holding-period formula for useful life in depreciating the assets in question. Cf. Helvering v. R. J. Reynolds Tobacco Co., 306 U.S. 110, 59 S.Ct. 423, 83 L.Ed. 536, and Helvering v. Griffiths, 318 U.S. 371, 63 S.Ct. 636, 87 L.Ed. 843. In the application of this salutary principle it should make no difference that the Commissioner's earlier different practice was not embodied in a formal regulation. Cf. Helvering v. Reynolds, 313 U.S. 428, 432, 61 S.Ct. 971, 973, 85 L.Ed. 1438; Higgins v. Commissioner, 312 U.S. 212, 216, 61 S.Ct. 475, 477, 85 L.Ed. 783.
54
Accordingly, I would reverse in No. 141 and affirm in No. 143.
IV.
55
The situation presented in No. 283 is, however, different. The taxable years in question there are those terminating on March 31, 1954, 1955, and 1956, respectively. All the taxable years thus ended before the promulgation of the new depreciation regulations on June 11, 1956.7 The Government concedes that Congress did not change the concept of useful life when it enacted the 1954 Code. Therefore, the question here is whether the Commissioner can, by a formal regulation, change his position retroactive only to the effective date of the statute under which it is promulgated.
56
Petitioner, relying on Helvering v. R. J. Reynolds Tobacco Co. and Helvering v. Griffiths, supra, asserts that where a regulation interpreting a statute has been in force for some time and has survived the re-enactment of the statute, the Commissioner cannot retroactively change that interpretation by a new regulation. However, here the Commissioner's earlier adherence to the physical-life concept of useful life was expressed not in the regulations—which did not refer to the problem—but in his own administrative practice. Therefore, the present case is more like Helvering v. Reynolds, 313 U.S. 428, 61 S.Ct. 971, wherein this Court permitted the Commissioner to apply a regulation retroactive to the effective date of the statute under which it was promulgated, where his previous contrary position had been expressed only by informal administrative practice, even though the statute had been re-enacted in the interim. Application of this principle in the present case is the more called for, since Congress, in the 1954 Code, has for the first time used the term 'useful life' and has made the availability of certain new accelerated methods of depreciation—among them the so-called 'declining balance method,' used by the taxpayer here—dependent upon its definition. It is appropriate therefore to permit the Treasury maximum discretion in integrating the concept of useful life into the new provisions and in doing so from the effective date of the statute forward.
57
Since the statute permits use of the declining-balance method only as to property with a useful life of three years or more, it follows that the Commissioner properly disallowed use of the declining-balance method as to Hertz' automobiles, whose useful life under the new regulation was less than three years. As to its trucks, admittedly held for more than three years, the only remaining question is whether Hertz should be allowed to depreciate them below what the Commissioner considers to be a reasonable salvage value. Given the fact that the Commissioner's definition of salvage value as resale price on disposition of the asset at the end of its holding period is validly applicable to Hertz, it becomes important that the declining-balance method not be construed to defeat that concept. Were there no 'salvage stop' in connection with declining-balance depreciation, it is clear that taxpayers who held assets for relatively short periods of time might be able to depreciate far below anticipated resale price, since the declining-balance rate is applied against the entire cost of the asset undiminished by salvage. Since the legislative history of the statute in this regard is ambiguous at best, and since there is no prior statute or administrative interpretation to becloud the issue, the Commissioner's construction should be allowed to stand. Accordingly, I concur in the Court's judgment affirming No. 283.
58
Mr. Justice DOUGLAS joins Parts I, II, and III of this opinion. He would, however, reserve in No. 283—Hertz Corp. v. United States, on the ground that the change in administrative practice involved here should not be retroactively applied under the circumstances of this case. Cf. United States v. Leslie Salt Co., 350 U.S. 383, 396, 76 S.Ct. 416, 423, 100 L.Ed. 441.
1
'Sec. 19.23(l)—1. Depreciation.—A reasonable allowance for the exhaustion, wear and tear, and obsolescence of property used in the trade or business may be deducted from gross income. For convenience such an allowance will usually be referred to as depreciation, excluding from the term any idea of a mere reduction in market value not resulting from exhaustion, wear and tear, or obsolescence. The proper allowance for such depreciation of any property used in the trade or business is that amount which should be set aside for the taxable year in accordance with a reasonably consistent plan (not necessarily at a uniform rate), whereby the aggregate of the amounts so set aside, plus the salvage value, will, at the end of the useful life of the property in the business, equal the cost or other basis of the property determined in accordance with section 113. * * *'
'Sec. 19.23(l)—2. Depreciable property.—The necessity for a depreciation allowance arises from the fact that certain property used in the business gradually approaches a point where its usefulness is exhausted. The allowance should be confined to property of this nature. In the case of tangible property, it applies to that which is subject to wear and tear, to decay or decline from natural causes, to exhaustion, and to obsolescence due to the normal progress of the art, as where machinery or other property must be replaced by a new invention, or due to the inadequacy of the property to the growing needs of the business. It does not apply to inventories or to stock in trade, or to land apart from the improvements or physical development added to it. It does not apply to bodies of minerals which through the process of removal suffer depletion, other provisions for this being made in the Internal Revenue Code. (See sections 23(m) and 114.) Property kept in repair may, nevertheless, be the subject of a depreciation allowance. (See section 19.23(a)—4.) The deduction of an allowance for depreciation is limited to property used in the taxpayer's trade or business. No such allowance may be made in respect of automobiles or other vehicles used solely for pleasure, a building used by the taxpayer solely as his residence, or in respect of furniture or furnishings therein, personal effects, or clothing; but properties and costumes used exclusively in a business, such as a theatrical business, may be the subject of a depreciation allowance.'
2
E.g., Davidson v. Commissioner, 12 CCH Mem. 1080 (1953); W. H. Norris Lumber Co. v. Commissioner, 7 CCH Mem. 728 (1948); Bolta Co. v. Commissioner, 4 CCH Mem. 1067 (1945); Wier Long Leaf Lumber Co. v. Commissioner, 9 T.C. 990 (1947), affirmed in part and reversed in part, 5 Cir., 1949, 173 F.2d 549.
3
The bulletin sets out a schedule of the useful life of automobiles, listing passenger cars at five years and those used by salesmen at three years.
4
See note 2, supra.
5
E.g., West Virginia & Pennsylvania Coal & Coke Co. v. Commissioner, 1 B.T.A. 790 (1925); James v. Commissioner, 2 B.T.A. 1071 (1925); Merkle Broom Co. v. Commissioner, 3 B.T.A. 1084 (1926); Kurtz v. Commissioner, 8 B.T.A. 679 (1927); Whitman-Douglas Co. v. Commissioner, 8 B.T.A. 694 (1927); Sanford Cotton Mills v. Commissioner, 14 B.T.A. 1210 (1929). General Securities Co. v. Commissioner, 1942, P—H BTA—TC Mem.Dec. 42,219 seems to be the only case of the group that is directly contrary to the present position of the Commissioner, and there the end result money-wise would seem to be the same under either theory. Hence it only emphasizes that isolated instances of inconsistency can be found in most areas where the volume of cases is as large as it is here.
6
This industry practice is emphasized by the amicus curiae brief of the American Automobile Leasing Association in Hillard v. Commissioner, 31 T.C. 961, now pending in the Court of Appeals for the Fifth Circuit. Comprising 'about 65 per cent of the long-term leasing industry in motor vehicles in the country' the Association takes the position that the depreciation allowance 'is designed to return to the taxpayer, tax-free, the cost of his capital asset over the period during which it is useful to the taxpayer in his business.' A copy of the brief is on file in this case.
7
Several writers in the accounting field have addressed themselves, without reference to the income tax laws, to the problem of giving content to the terms 'useful life' and 'salvage value' and their conclusions support what has been said.
Grant and Norton, Depreciation (1949), 145—146:
'(Assets such as passenger automobiles) may be expected to have substantial positive salvage values. Average salvage values must therefore be estimated before straight-line depreciation rates can be established. Salvage values will depend on average lives which may in turn depend on the owner's policy with regard to disposal of such assets. For example, if it is company policy to trade in passenger automobiles after three years, the estimation of average salvage value is simply the estimation of the average trade-in value of a 3-year-old passenger automobile.'
Kohler, A Dictionary for Accountants (1952), 371, defines salvage value as:
'Actual or prospective selling price, as second-hand material, or as junk or scrap, of fixed assets retired, or of product or merchandise unsalable through usual channels, less any cost, actual or estimated, of disposition; * * *.'
Useful life is defined, id., at 440, 441, as follows:
'Normal operating life in terms of utility to the owner; said of a fixed asset or a fixed-asset group; the period may be more or less than physical life or any commonly recognized economic life; service life.'
Saliers, Depreciation Principles (1939) 72:
'Salvage is the value an article possesses for some use other than that to which it has been devoted. When it can be so used it is said to possess another cycle of life. Junk or scrap value is that which an article is worth is broken up. In making allowance for depreciation the basis to be used it cost less whatever it is estimated that the salvage or scrap will amount to.'
1
Treasury Regulations on Depreciation, § 1.167(a)—1(b), T.D. 6182, 1956—1 Cum.Bull. 98, June 11, 1956.
2
At the trials below, taxpayers' expert witnesses testified that depreciation based on physical life was the commonly accepted accounting standard. Several textbooks, cited by the Court, 364 U.S. at page 106, 80 S.Ct. at page 1419, take the contrary view.
3
38 Stat. 114, 167.
4
Three cases cited by the Court, West Virginia & Pennsylvania Coal & Coke Co., 1 B.T.A. 790; J. R. James, 2 B.T.A. 1071; and Whitman-Douglas Co., 8 B.T.A. 694, involved isolated dispositions of assets prior to their physical exhaustion, and there was no evidence indicating a consistent practice by the taxpayer in this regard.
5
Revenue Act of 1942, § 151, 56 Stat. 846, 26 U.S.C.A. Int.Rev.Acts.
6
Wier Long Leaf Lumber Co., 9 T.C. 990; W. H. Norris Lumber Co., 7 CCH T.C.Mem. 728; Davidson, 12 CCH T.C.Mem. 1080. In the Wier case, it is not clear whether some of the assets might have been useful for some additional period in other businesses.
7
T.D. 6182, 1956—1 Cum.Bull. 98. Prior to that time the regulations under the 1939 Code were continued in force. T.D. 6091, 1954—2 Cum.Bull. 47.
| 1112
|
364 U.S. 206
80 S.Ct. 1437
4 L.Ed.2d 1669
James Butler ELKINS and Raymond Frederick Clark, Petitioners,v.UNITED STATES of America.
No. 126.
Argued March 28 and 29, 1960.
Decided June 27, 1960.
Mr. Frederick Bernays Wiener, Washington, D.C., for petitioners.
Mr. Malcolm Richard Wilkey, Washington, D.C., for respondent.
Mr. Justice STEWART delivered the opinion of the Court.
1
The petitioners were indicted in the United States District Court in Oregon for the offense of intercepting and divulging telephone communications and of conspiracy to do so. 47 U.S.C. §§ 501, 605, 47 U.S.C.A. §§ 501, 605; 18 U.S.C. § 371, 18 U.S.C.A. § 371. Before trial the petitioners made a motion to suppress as evidence several tape and wire recordings and a recording machine, which had originally been seized by state law enforcement officers in the home of petitioner Clark under circumstances which, two Oregon courts had found, had rendered the search and seizure unlawful.1 At the hearing on the motion the district judge assumed without deciding that the articles had been obtained as the result of an unreasonable search and seizure, but denied the motion to suppress because there was no evidence that any 'agent of the United States had any knowledge or information or suspicion of any kind that this search was being contemplated or was eventually made by the State officers until they read about it in the newspaper.' At the trial the articles in question were admitted in evidence against the petitioners, and they were convicted.
2
The convictions were affirmed by the Court of Appeals for the Ninth Circuit, 266 F.2d 588. That court agreed with the district judge that it was unnecessary to determine whether or not the original state search and seizure had been lawful, because there had been no participation by federal officers. 'Hence the unlawfulness of the State search and seizure, if indeed they were unlawful, did not entitle defendants to an order of the District Court suppressing the property seized.' 266 F.2d at page 594.
3
We granted certiorari, 361 U.S. 810, 80 S.Ct. 61, 4 L.Ed.2d 58, to consider a question of importance in the administration of federal justice. The question is this: May articles obtained as the result of an unreasonable search and seizure by state officers, without involvement of federal officers, be introduced in evidence against a defendant over his timely objection in a federal criminal trial? In a word, we re-examine here the validity of what has come to be called the silver platter doctrine.2 For the reasons that follow we conclude that this doctrine can no longer be accepted.
4
To put the issue in historic perspective, the appropriate starting point must be Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed 652, decided in 1914. It was there that the Court established the rule which excludes in a federal criminal prosecution evidence obtained by federal agents in violation of the defendant's Fourth Amendment rights. The foundation for that decision was set out in forthright words:
5
'The effect of the 4th Amendment is to put the courts of the United States and Federal officials, in the exercise of their power and authority, under limitations and restraints as to the exercise of such power and authority, and to forever secure the people, their persons, houses, papers and effects, against all unreasonable searches and seizures under the guise of law. This protection reaches all alike, whether accused of crime or not, and the duty of giving to it force and effect is obligatory upon all entrusted under our Federal system with the enforcement of the laws. The tendency of those who execute the criminal laws of the country to obtain conviction by means of unlawful seizures and enforced confessions, the latter often obtained after subjecting accused persons to unwarranted practices destructive of rights secured by the Federal Constitution, should find no sanction in the judgments of the courts, which are charged at all times with the support of the Constitution and to which people of all conditions have a right to appeal for the maintenance of such fundamental rights.
6
'* * * If letters and private documents can thus be seized and held and used in evidence against a citizen accused of an offense, the protection of the 4th Amenment declaring his right to be secure against such searches and seizures is of no value, and, so far as those thus placed are concerned, might as well be stricken from the Constitution. The efforts of the courts and their officials to bring the guilty to punishment, praiseworthy as they are, are not to be aided by the sacrifice of those great principles established by years of endeavor and suffering which have resulted in their embodiment in the fundamental law of the land.' 232 U.S. 383, 391—393, 34 S.Ct. 341, 344.
7
To the exclusionary rule of Weeks v. United States there has been unquestioning adherence for now almost half a century. See Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319; Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647; Amos v. United States, 255 U.S. 313, 41 S.Ct. 266, 65 L.Ed. 654; Agnello v. United States, 269 U.S. 20, 46 S.Ct. 4, 70 L.Ed. 145; Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374; Grau v. United States, 287 U.S. 124, 53 S.Ct. 38, 77 L.Ed. 212; McDonald v. United States, 335 U.S. 451, 69 S.Ct. 191, 93 L.Ed. 153; United States v. Jeffers, 342 U.S. 48, 72 S.Ct. 93, 96 L.Ed. 59.
8
But the Weeks case also announced, unobtrusively but nonetheless definitely, another evidentiary rule. Some of the articles used as evidence against Weeks had been unlawfully seized by local police officers acting on their own account. The Court held that the admission of this evidence was not error for the reason that 'the 4th Amendment is not directed to individual misconduct of such officials. Its limitations reach the Federal government and its agencies.' 232 U.S. at page 398, 34 S.Ct. at page 346. Despite the limited discussion of this second ruling in the Weeks opinion, the right of the prosecutor in a federal criminal trial to avail himself of evidence unlawfully seized by state officers apparently went unquestioned for the next thirty-five years. See, e.g., Byars v. United States, 273 U.S. 28, 33, 47 S.Ct. 248, 250, 71 L.Ed. 520; Feldman v. United States, 322 U.S. 487, 492, 64 S.Ct. 1082, 1084, 88 L.Ed. 1408.3
9
That such a rule would engender practical difficulties in an era of expanding federal criminal jurisdiction could not, perhaps, have been foreseen. In any event the difficulties soon appeared. They arose from the entirely commendable practice of state and federal agents to cooperate with each other in the investigation and detection of criminal activity. When in a federal criminal prosecution evidence which had been illegally seized by state officers was sought to be introduced, the question inevitably arose whether there had been such participation by federal agents in the search and seizure as to make applicable the exclusionary rule of Weeks. See Flagg v. United States, 2 Cir., 233 F. 481, 483; United States v. Slusser, D.C., 270 F. 818, 820; United States v. Falloco, D.C., 277 F. 75, 82; Legman v. United States, 3 Cir., 295 F. 474, 476—478; Marron v. United States, 9 Cir., 8 F.2d 251, 259; United States v. Brown, D.C., 8 F.2d 630, 631.
10
This Court first came to grips with the problem in Byars v. United States, 273 U.S. 28, 47 S.Ct. 248. There it was held that when the participation of the federal agent in the search was 'under color of his federal office' and the search 'in substance and effect was a joint operation of the local and federal officers,' then the evidence must be excluded, because 'the effect is the same as though (the federal agent) had engaged in the undertaking as one exclusively his own.' 273 U.S. at page 33, 47 S.Ct. at page 250. In Gambino v. United States, 275 U.S. 310, 48 S.Ct. 137, 72 L.Ed. 293, the Court went further. There state officers had seized liquor from the defendants' automobile after an unlawful search in which no federal officers had participated. The liquor was admitted in evidence against the defendants in their subsequent federal trial for violation of the National Prohibition Act, 27 U.S.C.A. § 1 et seq. This Court reversed the judgments of conviction, holding that the illegally seized evidence should have been excluded. Pointing out that there was 'no suggestion that the defendants were committing, at the time of the arrest, search, and seizure, any state offense, or that they had done so in the past, or that the (state) troopers believed that they had,' the Court found that '(t)he wrongful arrest, search, and seizure were made solely on behalf of the United States.' 275 U.S., at pages 314, 316, 48 S.Ct. at page 138.
11
Despite these decisions, or perhaps because of them, cases kept arising in which the federal courts were faced with determining whether there had been such participation by federal officers in a lawless state search as to make inadmissible in evidence that which had been seized. And it is fair to say that in their approach to this recurring question, no less than in their disposition of concrete cases, the federal courts did not find themselves in complete harmony, nor even internally self-consistent.4 No less difficulty was experienced by the courts in determining whether, even in the absence of actual participation by federal agents, the state officers' illegal search and seizure had nevertheless been made 'solely on behalf of the United States.'5
12
But difficult and unpredictable as may have been their application to concrete cases, the controlling principles seemed clear up to 1949. Evidence which had been seized by federal officers in violation of the Fourth Amendment could not be used in a federal criminal prosecution. Evidence which had been obtained by state agents in an unreasonable search and seizure was admissible, because, as Weeks had pointed out, the Fourth Amendment was not 'directed to' the 'misconduct of such officials.' But if federal agents had participated in an unreasonable search and seizure by state officers, or if the state officers had acted solely on behalf of the United States, the evidence was not admissible in a federal prosecution.
13
Then came Wolf v. Colorado, 338 U.S. 25, 69 S.Ct. 1359, 93 L.Ed. 1782. With the ultimate determination in Wolf—that the Due Process Clause of the Fourteenth Amendment does not itself require state courts to adopt the exclusionary rule with respect to evidence illegally seized by state agents—we are not here directly concerned. But nothing could be of greater relevance to the present inquiry than the underlying constitutional doctrine which Wolf established. For there it was unequivocally determined by a unanimous Court that the Federal Constitution, by virtue of the Fourteenth Amendment, prohibits unreasonable searches and seizures by state officers. 'The security of one's privacy against arbitrary intrusion by the police * * * is * * * implicit in 'the concept of ordered liberty' and as such enforceable against the States through the Due Process Clause.' 338 U.S. 25, 27—28, 69 S.Ct. 1359, 1361. The Court has subsequently found frequent occasion to reiterate this statement from Wolf. See Stefanelli v. Minard, 342 U.S. 117, 119, 72 S.Ct. 118, 119, 96 L.Ed. 138; Irvine v. People of State of California, 347 U.S. 128, 132, 74 S.Ct. 381, 382, 98 L.Ed. 561; Frank v. State of Maryland, 359 U.S. 360, 362 -363, 79 S.Ct. 804, 807, 3 L.Ed.2d 877.
14
The foundation upon which the admissibility of state-seized evidence in a federal trial originally rested—that unreasonable state searches did not violate the Federal Constitution—thus disappeared in 1949. This removal of the doctrinal underpinning for the admissibility rule has apparently escaped the attention of most of the federal courts, which have continued to approve the admission of evidence illegally seized by state officers without so much as even discussing the impact of Wolf.6 Only two of the courts of appeals which have adhered to the admissibility rule appear to have recognized that Wolf casts doubt upon its continuing validity. Jones v. United States, 8 Cir., 217 F.2d 381; United States v. Benanti, 2 Cir., 244 F.2d 389, reversed on other grounds, 355 U.S. 96, 78 S.Ct. 155, 2 L.Ed.2d 126. Cf. Kendall v. United States, 5 Cir., 272 F.2d 163, 165. The Court of Appeals for the District of Columbia has been alone in squarely holding 'that the Weeks and the Wolf decisions, considered together, make all evidence obtained by unconstitutional search and seizure unacceptable in federal courts.' Hanna v. United States, 104 U.S.App.D.C. 205, 209, 260 F.2d 723, 727.
15
Yet this Court's awareness that the constitutional doctrine of Wolf operated to undermine the logical foundation of the Weeks admissibility rule has been manifest from the very day that Wolf was decided. In Lustig v. United States, 338 U.S. 74, 69 S.Ct. 1372, 93 L.Ed. 1819, decided that day, the prevailing opinion carefully left open the question of the continuing validity of the admissibility rule. 'Where there is participation on the part of federal officers,' the opinion said, 'it is not necessary to consider what would be the result if the search had been conducted entirely by State officers.' 338 U.S. at page 79, 69 S.Ct. at page 1374. And in Benanti v. United States, 355 U.S. 96, 78 S.Ct. 155, 2 L.Ed.2d 126, the Court was at pains to point out that '(i)t has remained an open question in this Court whether evidence obtained solely by state agents in an illegal search may be admissible in federal court * * *.' 355 U.S. at page 102, note 10, 78 S.Ct. at page 158. There the question has stood for 11 years.
16
If resolution of the issue were to be dictated solely by principles of logic, it is clear what our decision would have to be. For surely no distinction can logically be drawn between evidence obtained in violation of the Fourth Amendment and that obtained in violation of the Fourteenth. The Constitution is flouted equally in either case. To the victim it matters not whether his constitutional right has been invaded by a federal agent or by a state officer.7 It would be a curiously ambivalent rule that would require the courts of the United States to differentiate between unconstitutionally seized evidence upon so arbitrary a basis. Such a distinction indeed would appear to reflect an indefensibly selective evaluation of the provisions of the Constitution. Moreover, it would seem logically impossible to justify a policy that would bar from a federal trial what state officers had obtained in violation of a federal statute, yet would admit that which they had seized in violation of the Constitution itself. Cf. Benanti v. United States, 355 U.S. 96, 78 S.Ct. 155, 2 L.Ed.2d 126.
17
Mere logical symmetry and abstract reasoning are perhaps not enough, however, to support a doctrine that would exclude relevant evidence from the trial of a federal criminal case. It is true that there is not involved here an absolute or qualified testimonial privilege such as that accorded a spouse, a patient, or a penitent, which irrevocably bars otherwise admissible evidence because of the status of the witness or his relationship to the defendant. Cf. Hawkins v. United States, 358 U.S. 74, 79 S.Ct. 136, 3 L.Ed.2d 125. A rule which would exclude evidence if, and only if, government officials in a particular case had chosen to engage in unlawful conduct is of a different order. Yet, any apparent limitation upon the process of discovering truth in a federal trial ought to be imposed only upon the basis of considerations which outweigh the general need for untrammeled disclosure of competent and relevant evidence in a court of justice.
18
What is here invoked is the Court's supervisory power over the administration of criminal justice in the federal courts, under which the Court has 'from the very beginning of its history, formulated rules of evidence to be applied in federal criminal prosecutions.' McNabb v. United States, 318 U.S. 332, 341, 63 S.Ct. 608, 613, 87 L.Ed. 819. In devising such evidentiary rules, we are to be governed by 'principles of the common law as they may be interpreted * * * in the light of reason and experience.' Rule 26, Fed.Rules Crim.Proc., 18 U.S.C.A. Determination of the issue before us must ultimately depend, therefore, upon evaluation of the exclusionary rule itself in the context here presented.
19
The exclusionary rule has for decades been the subject of ardent controversy. The arguments of its antagonists and of its proponents have been so many times marshalled as to require no lengthy elaboration here. Most of what has been said in opposition to the rule was distilled in a single Cardozo sentence—'The criminal is to go free because the constable has blundered.' People v. Defore, 242 N.Y. 13, 21, 150 N.E. 585, 587. The same point was made at somewhat greater length in the often quoted words of Professor Wigmore: 'Titus, you have been found guilty of conducting a lottery; Flavius, you have confessedly violated the constitution. Titus ought to suffer imprisonment for crime, and Flavius for contempt. But no! We shall let you both go free. We shall not punish Flavius directly, but shall do so by reversing Titus' conviction. This is our way of teaching people like Flavius to behave, and of teaching people like Titus to behave, and incidentally of securing respect for the Constitution. Our way of upholding the Constitution is not to strike at the man who breaks it, but to let off somebody else who broke something else.' 8 Wigmore, Evidence (3d ed. 1940), § 2184.
20
Yet, however felicitous their phrasing, these objections hardly answer the basic postulate of the exclusionary rule itself. The rule is calculated to prevent, not to repair. Its purpose is to deter—to compel respect for the constitutional guaranty in the only effectively available way—by removing the incentive to disregard it. See Eleuteri v. Richman, 26 N.J. 506, 513, 141 A.2d 46, 50. Mr. Justice Jackson summed it up well:
21
'Only occasional and more flagrant abuses come to the attention of the courts, and then only those where the search and seizure yields incriminating evidence and the defendant is at least sufficiently compromised to be indicted. If the officers raid a home, an office, or stop and search an automobile but find nothing incriminating, this invasion of the personal liberty of the innocent too often finds no practical redress. There may be, and I am convinced that there are, many unlawful searches of homes and automobiles of innocent people which turn up nothing incriminating, in which no arrest is made, about which courts do nothing, and about which we never hear.
22
'Courts can protect the innocent against such invasions only indirectly and through the medium of excluding evidence obtained against those who frequently are guilty.' Brinegar v. United States, 338 U.S. 160, 181, 69 S.Ct. 1302, 1313, 93 L.Ed. 1879 (dissenting opinion).
23
Empirical statistics are not available to show that the inhabitants of states which follow the exclusionary rule suffer less from lawless searches and seizures than do those of states which admit evidence unlawfully obtained. Since as a practical matter it is never easy to prove a negative, it is hardly likely that conclusive factual data could ever be assembled. For much the same reason, it cannot positively be demonstrated that enforcement of the criminal law is either more or less effective under either rule.
24
But pragmatic evidence of a sort is not wanting. The federal courts themselves have operated under the exclusionary rule of Weeks for almost half a century; yet it has not been suggested either that the Federal Bureau of Investigation has thereby been rendered ineffective, or that the administration of criminal justice in the federal courts has thereby been disrupted.8 Moreover, the experience of the states is impressive. Not more than half the states continue totally to adhere to the rule that evidence is freely admissible no matter how it was obtained.9 Most of the others have adopted the exclusionary rule in its entirety; the rest have adopted it in part.10 The movement towards the rule of exclusion has been halting but seemingly inexorable.11 Since the Wolf decision one state has switched its position in that direction by legislation,12 and two others by judicial decision.13 Another state, uncommitted, until 1955, in that year adopted the rule of exclusion.14 Significantly, most of the exclusionary states which have had to consider the issue have held that evidence obtained by federal officers in a search and seizure unlawful under the Fourth Amendment must be suppressed in a prosecution in the state courts. State v. Arregui, 44 Idaho 43, 254 P. 788, 52 A.L.R. 463; Walters v. Commonwealth, 199 Ky. 182, 250 S.W. 839; Little v. State, 171 Miss. 818, 159 So. 103; State v. Rebasti, 306 Mo. 336, 267 S.W. 858; State v. Hiteshew, 42 Wyo. 147, 292 P. 2; see Ramirez v. State, 123 Tex.Cr.R. 254, 58 S.W.2d 829. Compare Rea v. United States, 350 U.S. 214, 76 S.Ct. 292, 100 L.Ed. 233.
25
The experience in California has been most illuminating. In 1955 the Supreme Court of that State resolutely turned its back on many years of precedent and adopted the exclusionary rule. People v. Cahan, 44 Cal.2d 434, 282 P.2d 905, 50 A.L.R.2d 513. 'We have been compelled to reach that conclusion because other remedies have completely failed to secure compliance with the constitutional provisions on the part of police officers with the attendant result that the courts under the old rule have been constantly required to participate in, and in effect condone, the lawless activities of law enforcement officers. * * * Experience has demonstrated, however, that neither administrative, criminal nor civil remedies are effective in suppressing lawless searches and seizures. The innocent suffer with the guilty, and we cannot close our eyes to the effect the rule we adopt will have on the rights of those not before the court.' 44 Cal.2d 434, at page 445, 447, 282 P.2d 905, at pages 911—912, 913.
26
The chief law enforcement officer of California was quoted as having made this practical evaluation of the Cahan decision less than two years later:
27
'The over-all effects of the Cahan decision, particularly in view of the rules now worked out by the Supreme Court, have been excellent. A much greater education is called for on the part of all peace officers of California. As a result, I am confident they will be much better police officers. I think there is more cooperation with the District Attorneys and this will make for better administration of criminal justice.'15
28
Impressive as is this experience of individual states, even more is to be said for adoption of the exclusionary rule in the particular context here presented—a context which brings into focus considerations of federalism. The very essence of a healthy federalism depends upon the avoidance of needless conflict between state and federal courts. Yet when a federal court sitting in an exclusionary state admits evidence lawlessly seized by state agents, it not only frustrates state policy, but frustrates that policy in a particularly inappropriate and ironic way. For by admitting the unlawfully seized evidence the federal court serves to defeat the state's effort to assure obedience to the Federal Constitution. In states which have not adopted the exclusionary rule, on the other hand, it would work no conflict with local policy for a federal court to decline to receive evidence unlawfully seized by state officers. The question with which we deal today affects not at all the freedom of the states to develop and apply their own sanctions in their own way. Cf. Wolf v. Colorado, 338 U.S. 25, 69 S.Ct. 1359, 93 L.Ed. 1782.
29
Free and open cooperation between state and federal law enforcement officers is to be commended and encouraged. Yet that kind of cooperation is hardly promoted by a rule that implicitly invites federal officers to withdraw from such association and at least tacitly to encourage state officers in the disregard of constitutionally protected freedom. If, on the other hand, it is understood that the fruit of an unlawful search by state agents will be inadmissible in a federal trial, there can be no inducement to subterfuge and evasion with respect to federal-state cooperation in criminal investigation. Instead, forthright cooperation under constitutional standards will be promoted and fostered.
30
It must always be remembered that what the Constitution forbids is not all searches and seizures, but unreasonable searches and seizures. Without pausing to analyze individual decisions, it can fairly be said that in applying the Fourth Amendment this Court has seldom shown itself unaware of the practical demands of effective criminal investigation and law enforcement. Indeed, there are those who think that some of the Court's decisions have tipped the balance too heavily against the protection of that individual privacy which it was the purpose of the Fourth Amendment to guarantee. See Harris v. United States, 331 U.S. 145, 155, 183, 195, 67 S.Ct. 1098, 1103, 1113, 1119, 91 L.Ed. 1399 (dissenting opinions); United States v. Rabinowitz, 339 U.S. 56, 66, 68, 70 S.Ct. 430, 435, 436, 94 L.Ed. 653 (dissenting opinions). In any event, while individual cases have sometimes evoked 'fluctuating differences of view,' Abel v. United States, 362 U.S. 217, 235, 80 S.Ct. 683, 695, 4 L.Ed.2d 668, it can hardly be said that in the over-all pattern of Fourth Amendment decisions this Court has been either unrealistic or visionary.
31
These, then, are the considerations of reason and experience which point to the rejection of a doctrine that would freely admit in a federal criminal trial evidence seized by state agents in violation of the defendant's constitutional rights. But there is another consideration—the imperative of judicial integrity. It was of this that Mr. Justice Holmes and Mr. Justice Brandeis so eloquently spoke in Olmstead v. United States, 277 U.S. 438, at pages 469, 471, 48 S.Ct. 564, at pages 569, 570, 72 L.Ed. 729, more than 30 years ago. 'For those who agree with me,' said Mr. Justice Holmes, 'no distinction can be taken between the government as prosecutor and the government as judge.' 277 U.S. at page 470, 48 S.Ct. at page 575. (Dissenting opinion.) 'In a government of laws,' said Mr. Justice Brandeis, 'existence of the government will be imperilled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. To declare that in the administration of the criminal law the end justifies the means—to declare that the government may commit crimes in order to secure the conviction of a private criminal—would bring terrible retribution. Against that pernicious doctrine this court should resolutely set its face.' 277 U.S., at page 485, 48 S.Ct. at page 575. (Dissenting opinion.)
32
This basic principle was accepted by the Court in McNabb v. United States, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819. There it was held that 'a conviction resting on evidence secured through such a flagrant disregard of the procedure which Congress has commanded cannot be allowed to stand without making the courts themselves accomplices in willful disobedience of law.' 318 U.S. at page 345, 63 S.Ct. at page 615. Even less should the federal courts be accomplices in the willful disobedience of a Constitution they are sworn to uphold.
33
For these reasons we hold that evidence obtained by state officers during a search which, if conducted by federal officers, would have violated the defendant's immunity from unreasonable searches and seizures under the Fourth Amendment is inadmissible over the defendant's timely objection in a federal criminal trial.16 In determining whether there has been an unreasonable search and seizure by state officers, a federal court must make an independent inquiry, whether or not there has been such an inquiry by a state court, and irrespective of how any such inquiry may have turned out. The test is one of federal law, neither enlarged by what one state court may have countenanced, nor diminished by what another may have colorably suppressed.
34
The judgment of the Court of Appeals is set aside, and the case is remanded to the District Court for further proceedings consistent with this opinion.
35
Vacated and remanded.
APPENDIX TO OPINION OF THE COURT.
36
TABLE I.—Admissibility, in state courts, of evidence illegally seized by state officers.
State Pre-Weeks Pre-Wolf Post-Wolf
Alabama Admissible Admissible Partially
37
excludable
38
Arizona Admissible Admissible
39
Arkansas Admissible Admissible Admissible
40
California Admissible Admissible Excludable
41
Colorado Admissible Admissible
42
Connecticut Admissible Admissible Admissible
43
Delaware Admissible Excludable
44
Florida Excludable Excludable
45
Georgia Admissible Admissible Admissible
Idaho Admissible Excludable Excludable
46
Illinois Admissible Excludable Excludable
47
Indiana Excludable Excludable
Iowa Excludable Admissible Admissible
Kansas Admissible Admissible Admissible
48
Kentucky Excludable Excludable
49
Louisiana Admissible Admissible
Maine Admissible Admissible Admissible
Maryland Admissible Partially Partially
50
excludable excludable TABLE I.—Admissibility, in state courts, of evidence illegally seized by state officers.
51
Massachusetts Admissible Admissible Admissible
52
Michigan Admissible Excludable Partially
53
excludable
54
Minnesota Admissible Admissible Admissible
55
Mississippi Excludable Excludable
56
Missouri Admissible Excludable Excludable
57
Montana Admissible Excludable Excludable
58
Nebraska Admissible Admissible Admissible
59
Nevada Admissible Admissible
60
New Hampshire Admissible Admissible Admissible
61
New Jersey Admissible Admissible
62
New Mexico Admissible Admissible
63
New York Admissible Admissible Admissible
64
North Carolina Admissible Admissible Excludable
65
North Dakota Admissible Admissible
66
Ohio Admissible Admissible
67
Oklahoma Admissible Excludable Excludable
Oregon Admissible Excludable Excludable
68
Pennsylvania Admissible Admissible
Rhode Island Excludable
69
South Carolina Admissible Admissible Admissible
70
South Dakota Admissible Excludable Partially
71
excludable
72
Tennessee Admissible Excludable Excludable
73
Texas Excludable Excludable
74
Utah Admissible Admissible
75
Vermont Admissible Admissible Admissible
76
Virginia Admissible Admissible
77
Washington Admissible Excludable Excludable
78
West Virginia Admissible Excludable Excludable
79
Wisconsin Excludable Excludable
80
Wyoming Excludable Excludable
To admit--27 To admit--29 To admit--24
81
To exclude--1 To exclude--18. To exclude--
82
26*
83
Undecided--20. Undecided--1. Undecided--0. TABLE II.—Representative cases by state, considering the admissibility of evidence illegally seized by state officers.
ALABAMA
84
Pre-Weeks: Shields v. State, 104 Ala. 35, 16 So. 85 (admissible).
85
Pre-Wolf: Banks v. State, 207 Ala. 179, 93 So. 293, 24 A.L.R. 1359 (admissible).
86
Post-Wolf: Cf. Oldham v. State, 259 Ala. 507, 67 So.2d 55 (admissible). (Ala.Code, 1940 (Supp.1955), Tit. 29, § 210, requires the exclusion of illegally obtained evidence in the trial of certain alcohol control cases.)
ARIZONA
87
Pre-Weeks: no holding.
88
Pre-Wolf: Argetakis v. State, 24 Ariz. 599, 212 P. 372 (admissible).
89
Post-Wolf: State v. Thomas, 78 Ariz. 52, 275 P.2d 408 (admissible).
ARKANSAS
90
Pre-Weeks: Starchman v. State, 62 Ark. 538, 36 S.W. 940 (admissible).
91
Pre-Wolf: Benson v. State, 149 Ark. 633, 233 S.W. 758 (admissible).
92
Post-Wolf: Lane, Smith & Barg v. State, 217 Ark. 114, 229 S.W.2d 43 (admissible).
CALIFORNIA
93
Pre-Weeks: People v. LeDoux, 155 Cal. 535, 102 P. 517 (admissible).
94
Pre-Wolf: People v. Mayen, 188 Cal. 237, 205 P. 435, 24 A.L.R. 1383 (admissible).
95
Post-Wolf: People v. Cahan, 44 Cal.2d 434, 282 P.2d 905, 50A.L.R.2 d 513 (excludable).
COLORADO
96
Pre-Weeks: no holding.
97
Pre-Wolf: Massantonio v. People, 77 Colo. 392, 236 P. 1019 (admissible).
98
Post-Wolf: Williams v. People, 136 Colo. 164,315 P.2d 189 (admissible).
CONNECTICUT
99
Pre-Weeks: State v. Griswold, 67 Conn. 290, 34 A. 1046, 33 L.R.A. 227 (admissible).
100
Pre-Wolf: State v. Reynolds, 101 Conn. 224, 125 A. 636 (admissible).
101
Post-Wolf: no holding.
DELAWARE
102
Pre-Weeks: no holding.
103
Pre-Wolf: State v. Chuchola, 32 Del. 133, 120 A. 212 (admissible).
104
Post-Wolf: Rickards v. State, 45 Del. 573, 77 A.2d 199 (excludable).
FLORIDA
105
Pre-Weeks: no holding.
106
Pre-Wolf: Atz v. Andrews, 84 Fla. 43, 94 So. 329 (excludable).
107
Post-Wolf: Byrd v. State, Fla., 80 So.2d 694 (excludable).
GEORGIA
108
Pre-Weeks: Williams v. State, 100 Ga. 511, 28 S.E. 624, 39 L.R.A. 2 69 (admissible).
109
Pre-Wolf: Jackson v. State, 156 Ga. 647, 119 S.E. 525 (admissible).
110
Post:-Wolf: Atterberry v. State, 212 Ga. 778, 95 S.E.2d 787 (admissible).
IDAHO
111
Pre-Weeks: State v. Bond, 12 Idaho 424, 86 P. 43 (admissible).
112
Pre-Wolf: State v. Arregui, 44 Idaho 43, 254 P. 788, 52 A.L.R. 463 (excludable).
113
Post-Wolf: no holding.
ILLINOIS
114
Pre-Weeks: Siebert v. People, 143 Ill. 571, 32 N.E. 431 (admissible ).
115
Pre-Wolf: People v. Castree, 311 Ill. 392, 143 N.E. 112, 32 A.L.R. 357 (excludable).
116
Post-Wolf: City of Chicago v. Lord, 7 Ill.2d 379, 130 N.E.2d 504 (excludable).
INDIANA
117
Pre-Weeks: no holding.
118
Pre-Wolf: Flum v. State, 193 Ind. 585, 141 N.E. 353 (excludable).
119
Post-Wolf: Rohlfing v. State, 230 Ind. 236, 102 N.E.2d 199 (excludable.)
IOWA
120
Pre-Weeks: State v. Sheridan, 121 Iowa 164, 96 N.W. 730 (excludable).
121
Pre-Wolf: State v. Rowley, 197 Iowa 977, 195 N.W. 881 (admissible).
122
Post-Wolf: State v. Smith, 247 Iowa 500, 73 N.W.2d 189 (admissible).
KANSAS
123
Pre-Weeks: State v. Miller, 63 Kan. 62, 64 P. 1033 (admissible).
124
Pre-Wolf: State v. Johnson, 116 Kan. 58, 226 P. 245 (admissible).
125
Post-Wolf: State v. Peasley, 179 Kan. 314, 295 P.2d 627 (admissible).
KENTUCKY
126
Pre-Weeks: no holding.
127
Pre-Wolf: Youman v. Commonwealth, 189 Ky. 152, 224 S.W. 860, 13 A.L.R. 1303 (excludable).
128
Post-Wolf: Johnson v. Commonwealth, Ky., 296 S.W.2d 210 (excludable).
LOUISIANA
129
Pre-Weeks: no holding.
130
Pre-Wolf: State v. Fleckinger, 152 La. 337, 93 So. 115 (admissible).
131
Post-Wolf: State v. Mastricovo, 221 La. 312, 59 So.2d 403 (admissible).
MAINE
132
Pre-Weeks: State v. Gorham, 65 Me. 270 (admissible) (semble).
133
Pre-Wolf: State v. Schoppe, 113 Me. 10, 92 A. 867 (admissible) (semble).
134
Post-Wolf: no holding.
MARYLAND
135
Pre-Weeks: Lawrence v. State, 103 Md. 17, 63 A. 96 (admissible).
136
Pre-Wolf: Meisinger v. State, 155 Md. 195, 141 A. 536, 142 A. 190 (admissible).
137
Post-Wolf: Stevens v. State, 202 Md. 117, 95 A.2d 877 (admissible). (Flack's Md.Ann.Code, 1951, Art. 35, § 5 requires theexclusion of illegally obtained evidence in the trial of mostmisdemeanors.)
MASSACHUSETTS
138
Pre-Weeks: Commonwealth v. Dana, 43 Mass. 329 (admissible).
139
Pre-Wolf: Commonwealth v. Wilkins, 243 Mass. 356, 138 N.E. 11 (admissible).
140
Post-Wolf: no holding.
MICHIGAN
141
Pre-Weeks: People v. Aldorfer, 164 Mich. 676, 130 N.W. 351 (admissible).
142
Pre-Wolf: People v. Marxhausen, 204 Mich. 559, 171 N.W. 557, 3 A.L.R. 1505 (excludable).
143
Post-Wolf: People v. Hildabridle, 353 Mich. 562, 92 N.W.2d 6 (excludable).
144
(Art. II, § 10 of the Michigan Constitution of 1908, as amended, sets forth a limited class of items which are not vexcludable. See People v. Gonzales, 356 Mich. 247, 97 N.W.2d 16.)
MINNESOTA
145
Pre-Weeks: State v. Strait, 94 Minn. 384, 102 N.W. 913 (admissible).
146
Pre-Wolf: State v. Pluth, 157 Minn. 145, 195 N.W. 789 (admissible).
147
Post-Wolf: no holding.
MISSISSIPPI
148
Pre-Weeks: no holding.
149
Pre-Wolf: Tucker v. State, 128 Miss. 211, 90 So. 845, 24 A.L.R. 1377 (excludable).
150
Post-Wolf: Nobles v. State, 222 Miss. 827, 77 So.2d 288 (excludable).
MISSOURI
151
Pre-Weeks: State v. Pomeroy, 130 Mo. 489, 32 S.W. 1002 (admissible).
152
Pre-Wolf: State v. Owens, 302 Mo. 348, 259 S.W. 100, 32 A.L.R. 383 (excludable).
153
Post-Wolf: State v. Hunt, Mo., 280 S.W.2d 37 (excludable).
MONTANA
154
Pre-Weeks: State v. Fuller, 34 Mont. 12, 85 P. 369, 8 L.R.A.,N.S., 762 (admissible).
155
Pre-Wolf: State ex rel. King v. District Court, 70 Mont. 191, 224 P. 862 (excludable.)
156
Post-Wolf: no holding.
NEBRASKA
157
Pre-Weeks: Geiger v. State, 6 Neb. 545 (admissible).
158
Pre-Wolf: Billings v. State, 109 Neb. 596, 191 N.W. 721 (admissible).
159
Post-Wolf: Haswell v. State, 167 Neb. 169, 92 N.W.2d 161 (admissible).
NEVADA
160
Pre-Weeks: no holding.
161
Pre-Wolf: State v. Chin Gim, 47 Nev. 431, 224 P. 798 (admissible).
162
Post-Wolf: no holding.
NEW HAMPSHIRE
163
Pre-Weeks: State v. Flynn, 36 N.H. 64 (admissible).
164
Pre-Wolf: State v. Agalos, 79 N.H. 241, 107 A. 314 (admissible).
165
Post-Wolf: State v. Mara, 96 N.H. 463, 78 A.2d 922 (admissible).
NEW JERSEY
166
Pre-Weeks: no holding.
167
Pre-Wolf: State v. Black, 135 A. 685, 5 N.J.Misc. 48 (admissible).
168
Post-Wolf: Eleuteri v. Richman, 26 N.J. 506, 141 A.2d 46 (admissible).
169
(N.J.Rev.Stat. 33:1-62 provides for the return of items illegally seized in the investigation of certain alcohol control offenses.)
NEW MEXICO
170
Pre-Weeks: no holding.
171
Pre-Wolf: State v. Dillon, 34 N.M. 366, 281 P. 474, 88 A.L.R. 340 ( admissible).
172
Post-Wolf: Breithaupt v. Abram, 58 N.M. 385, 271 P.2d 827 (admissible).
NEW YORK
173
Pre-Weeks: People v. Adams, 176 N.Y. 351, 68 N.E. 636, 63 L.R.A. 40 6 (admissible).
174
Pre-Wolf: People v. Defore, 242 N.Y. 13, 150 N.E. 585 (admissible).
175
Post-Wolf: People v. Variano, 5 N.Y.2d 391, 185 N.Y.S.2d 1, 157 N.E 2d 857 (admissible).
NORTH CAROLINA
176
Pre-Weeks: State v. Wallace, 162 N.C. 622, 78 S.E. 1 (admissible).
177
Pre-Wolf: State v. Simmons, 183 N.C. 684, 110 S.E. 591 (admissible).
178
Post-Wolf: State v. Mills, 246 N.C. 237, 98 S.E.2d 329 (excludable).
179
(N.C.Gen.Stat. § 15-27 requires the exclusion of illegally obtained evidence.)
NORTH DAKOTA
180
Pre-Weeks: no holding.
181
Pre-Wolf: State v. Fahn, 53 N.D. 203, 205 N.W. 67 (admissible).
182
Post-Wolf: no holding.
OHIO
183
Pre-Weeks: no holding.
184
Pre-Wolf: State v. Lindway, 131 Ohio St. 166, 2 N.E.2d 490(admissible).
185
Post-Wolf: State v. Mapp, 170 Ohio St. 427, 166 N.E.2d 387(admissible).
OKLAHOMA
186
Pre-Weeks: Silva v. State, 6 Okl.Cr. 97, 116 P. 199(admissible).
187
Pre-Wolf: Gore v. State, 24 Okl.Cr. 394, 218 P. 545 (excludable).
188
Post-Wolf: Hamel v. State, Okl.Cr., 317 P.2d 285 (excludable).
OREGON
189
Pre-Weeks: State v. McDaniel, 39 Or. 161, 65 P. 520 (admissible).
190
Pre-Wolf: See State v. Laundy, 103 Or. 443, 204 P. 958, 206 P. 290 (excludable), although see State v. Folkes, 174 Or. 568, 150 P.2d 17 (not noticing State v. Laundry).
191
Post-Wolf: State v. Hoover, 219 Or. 288, 347 P. 69 (questioning Laundy).
PENNSYLVANIA
192
Pre-Weeks: no holding.
193
Pre-Wolf: Commonwealth v. Dabbierio, 290 Pa. 174, 138 A. 679 (admissible).
194
Post-Wolf: Commonwealth v. Chaitt, 380 Pa. 532, 112 A.2d 379 (a (admissible).
RHODE ISLAND
195
Pre-Weeks: no holding.
196
Pre-Wolf: no holding.
197
Post-Wolf: State v. Hillman, 84 R.I. 396, 125 A.2d 94 (applying common law rule, but noticing the enactment of the statutory rule).
198
(R.I.Gen.Laws, 1956, § 9-19-25 requires the exclusion of illegally obtained evidence.)
SOUTH CAROLINA
199
Pre-Weeks: State v. Atkinson, 40 S.C. 363, 18 S.E. 1021 (admissible).
200
Pre-Wolf: State v. Green, 121 S.C. 230, 114 S.E. 317 (admissible).
201
Post-Wolf: State v. Anderson, 230 S.C. 191, 95 S.E.2d 164 (admissible).
SOUTH DAKOTA
202
Pre-Weeks: State v. Madison, 23 S.D. 584, 122 N.W. 647 (admissible).
203
Pre-Wolf: State v. Gooder, 57 S.D. 619, 234 N.W. 610 (excludable).
204
Post-Wolf: State v. Poppenga, 76 S.D. 592, 83 N.W.2d 518 (excludable).
205
S.D.Code, 1939, § 34.1102 provides for a limited return to the common-law rule of admissibility. See State v. Lane, 76 S.D. 544, 82 N.W.2d 286.
TENNESSEE
206
Pre-Weeks: Cohn v. State, 120 Tenn. 61, 109 S.W. 1149, 17 L.R.A., N.S., 451 (admissible).
207
Pre-Wolf: Hughes v. State, 145 Tenn. 544, 238 S.W. 588, 20 A.L.R. 639 (excludable).
208
Post-Wolf: Lindsey v. State, 191 Tenn. 51, 231 S.W.2d 380(excludable).
TEXAS
209
Pre-Weeks: no holding.
210
Pre-Wolf: Chapin v. State, 107 Tex.Cr.R. 477, 296 S.W. 1095(excludable).
211
Post-Wolf: Williamson v. State, 156 Tex.Cr.R. 520, 244 S.W.2d 202 (excludable).
212
(Vernon's Tex.Stat., 1948 (Code Crim.Proc. art. 727a) requires the exclusion of illegally obtained evidence.)
UTAH
213
Pre-Weeks: no holding.
214
Pre-Wolf: State v. Aime, 62 Utah 476, 220 P. 704, 32 A.L.R. 375 (admissible).
215
Post-Wolf: no holding.
VERMONT
216
Pre-Weeks: State v. Mathers, 64 Vt. 101, 23 A. 590, 15 L.R.A. 268 (admissible).
217
Pre-Wolf: State v. Stacy, 104 Vt. 379, 160 A. 257, 747(admissible).
218
Post-Wolf: In re Raymo, 121 Vt. 246, 154 A.2d 487 (admissible).
VIRGINIA
219
Pre-Weeks: no holding.
220
Pre-Wolf: Hall v. Commonwealth, 138 Va. 727, 121 S.E. 154(admissible).
221
Post-Wolf: no holding.
WASHINGTON
222
Pre-Weeks: State v. Royce, 38 Wash. 111, 80 P. 268 (admissible).
223
Pre-Wolf: State v. Gibbons, 118 Wash. 171, 203 P. 390 excludable).
224
Post-Wolf: State v. Cyr, 40 Wash.2d 840, 246 P.2d 480 (excludable).
WEST VIRGINIA
225
Pre-Weeks: State v. Edwards, 51 W.Va. 220, 41 S.E. 429, 59 L.R.A. 465 admissible).
226
Pre-Wolf: State v. Wills, 91 W.Va. 659, 114 S.E. 261, 24 A.L.R. 1398 (excludable).
227
Post-Wolf: State v. Calandros, 140 W.Va. 720, 86 S.E.2d 242 (excludable).
WISCONSIN
228
Pre-Weeks: no holding.
229
Pre-Wolf: Hoyer v. State, 180 Wis. 407, 193 N.W. 89, 27 A.L.R. 673 (excludable).
230
Post-Wolf: State v. Kroening, 274 Wis. 266, 79 N.W.2d 816 (excludable).
WYOMING
231
Pre-Weeks: no holding.
232
Pre-Wolf: State v. George, 32 Wyo. 223, 231 P. 683 (excludable).
233
Post-Wolf: no holding.
234
Mr. Justice FRANKFURTER, whom Mr. Justice CLARK, Mr. Justice HARLAN and Mr. Justice WHITTAKER join, dissenting.
235
The Court today overturns a rule of evidence always the law and formally announced in 1914 by a unanimous Court including Mr. Justice Holmes and Mr. Justice Hughes. Weeks v. United States, 232 U.S. 383, 398, 34 S.Ct. 341, 346, 58 L.Ed. 652. The rule has since that time been applied in this Court's unanimous per curiam decision in 1925 in Center v. United States, 267 U.S. 575, 45 S.Ct. 230, 69 L.Ed. 795, and for nearly half a century, as a matter of course, in federal prosecutions without number throughout the United States. In 1927, a unanimous Court, on which sat Mr. Justice Holmes, Mr. Justice Brandeis and Mr. Justice Stone, thus acknowledged the rule: '(w)e do not question the right of the federal government to avail itself of evidence improperly seized by state officers operating entirely upon their own account.' Byars v. United States, 273 U.S. 28, 33, 47 S.Ct. 248, 250, 71 L.Ed. 520. It can hardly be denied that Mr. Justice Holmes and Mr. Justice Brandeis were the originators and formulators of the body of our present constitutional law pertaining to civil liberties; pronouncements since have merely been echoes and applications, when not distortions, of principles laid down by them.
236
Of course our law, and particularly our procedural law, does not stick fast in the past. (Speaking wholly for myself, there is indeed an appropriate basis derived from the nature of our federalism—which I shall later set forth—for modification in the circumstances of the present cases of the rule admitting state-seized evidence, regardless of the way in which it was seized.) But when a rule of law has the history and the intrinsic authority of the rule overturned today, when it has been for so long a part of the administration of justice in the federal courts, a change, when not constitutionally compelled as the present change concededly is not, must justify itself either by the demands of new experience undermining the justification of the established rule or by new insight into the undesirable consequences of the old rule. The rule the Court newly promulgates today draws upon neither of these justifications and is not supported by any of this Court's previous decisions, while raising serious difficulties in its application, including undue conflict with state law and with state courts.
237
We are concerned with a rule governing the admissibility of relevant evidence in federal courts. The pertinent general principle, responding to the deepest needs of society, is that society is entitled to every man's evidence. As the underlying aim of judicial inquiry is ascertainable truth, everything rationally related to ascertaining the truth is presumptively admissible. Limitations are properly placed upon the operation of this general principle only to the very limited extent that permitting a refusal to testify or excluding relevant evidence has a public good transcending the normally predominant principle of utilizing all rational means for ascertaining truth. The basic consideration in these cases is whether there are present any overriding reasons for not accepting evidence concededly relevant to a federal judicial inquiry regarding a violation of federal law.
238
Overriding public considerations are reflected in the exclusion from evidence of the narrow classes of privileged communications, in the exclusion designed to prevent people from being compelled to convict themselves out of their own mouths developed under the shelter of the Fifth Amendment's privilege against self-incrimination, and insofar as the Due Process Clause of the Fourteenth Amendment puts curbs on the evidentiary law of the States. Respect is also due a further consideration that courts of law are, after all, in the service of justice and that the enforcement of basic moralities by courts should at times be deemed more important than the full utilization of all relevant evidence in a particular case. Silverthorne Lumber Co. v. United States, 251 U.S. 385, 40 S.Ct. 182, 64 L.Ed. 319. Regard for this consideration led Mr. Justice Holmes and Mr. Justice Brandeis to urge that the federal courts should not permit the Department of Justice to become the willing beneficiary of stolen goods through their use in evidence in a federal prosecution: 'Respect for law will not be advanced by resort, in its enforcement, to means which shock the common man's sense of decency and fair play.' It is noteworthy that while this view was expressed by Holmes and Brandeis, JJ. in 1921 in dissent in Burdeau v. McDowell, 256 U.S. 465, 477, 41 S.Ct. 574, 576, 65 L.Ed. 1048, it did not lead them in 1927, in Byars v. United States, supra, to question the right of the Federal Government to utilize the very kind of evidence involved in these two cases.
239
Closer to our immediate problem are the evidentiary problems arising out of the interdiction of the Fourth Amendment against 'unreasonable searches and seizures.' This constitutional provision addresses itself to matters that vitually relate to individual freedom. On this account another exclusion of relevant evidence has been developed in the federal courts in response to what was deemed to be a compelling public need implicit in that Amendment. Because of what was deemed to be a vital relation to the vindication of the Amendment so that its important protection would otherwise be of 'no value,' this Court in Weeks v. United States, 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652, held it appropriate to exclude from federal courts evidence seized by federal officials in disregard of the Fourth Amendment. It was thought more important to exert general legal pressures to secure obedience to the Fourth Amendment on the part of federal law-enforcing officers than to enforce the general principle of relevance in particular cases. This exclusionary rule of Weeks has also been applied to violations of federal law by federal officers, closely relating to the interests protected by the Fourth Amendment, although not of the full seriousness of constitutional violations. See, e.g., Miller v. United States, 357 U.S. 301, 78 S.Ct. 1190, 2 L.Ed.2d 1332.
240
The Fourth Amendment, as applied in Weeks and cases since, operates, as do all the provisions of the Federal Bill of Rights, within the limitations imposed by our federal system. It has been held without deviation that the specific provisions of the first eight Amendments are not limitations upon the power of the States or available safeguards of the individual against state authority. Of course the same is true of procedural protections afforded by federal statutes not resting on the Cosntitution. It has followed from this that, until today, in applying he Weeks rule of exclusion a vital question has always been whether the offending search or seizure was conducted in any part by federal officials or in the interest of the Federal Government, or whether it was conducted solely by state officers acting exclusively for state purposes. Only if the Federal Government 'had a hand' in the search could the Fourth Amendment or federal statutory restrictions, and thus the Weeks exclusionary rule, apply. See Byars v. United States, 273 U.S. 28, 47 S.Ct. 248, 71 L.Ed. 520; Lustig v. United States, 338 U.S. 74, 78, 69 S.Ct. 1372, 1374, 93 L.Ed. 1819. The Weeks case itself, as has been said, held that state misconduct was not to be the basis for application of the federal exclusionary rule. 232 U.S., at page 398, 34 S.Ct. at page 346. Until today that has been the law of the land.
241
Have there been developments since Weeks, either intellecual or practical, which should lead the Court to overturn the authoritative rule of that case and for the first time bar relevant evidence innocently secured by federal authorities, in cases involving no federal misconduct whatever, where there has been neither violation of the Fourth Amendment nor violation of a federal statute by federal officers or any agent for them?
242
The Court finds such a significant development, destroying in its view the 'foundations,' the 'doctrine underpinning' of the express and authoritative limitation of the Weeks exclusionary rule to cases of federal violations, in what was said in 1949 in Wolf v. Colorado, 338 U.S. 25, 27—28, 69 S.Ct. 1359, 1361, 93 L.Ed. 1782, recognizing that '(t)he security of one's privacy against arbitrary intrusion by the police—which is at the core of the Fourth Amendment—is basic to a free society. It is therefore implicit in 'the concept of ordered liberty' and as such enforceable against the States through the Due Process Clause.' The Court asserts that there is no longer any logic in restricting the application of the Weeks exclusionary rule to the fruits of federal seizures, for Wolf recognizes that state seizures may also encroach on interests protected by the Federal Constitution. The rule which the Court announces on the basis of this analysis is that there is to be excluded from federal prosecutions all evidence seized by state officers 'during a search which, if conducted by federal officers, would have violated the defendant's immunity from unreasonable searches and seizures under the Fourth Amendment.' As the Court's rule only purports to exclude evidence seized by state officers in violation of the Constitution, it is plain that the Court assumes for the purposes of these cases that, as a consequence of Wolf, precisely the same rules are applicable in determining whether the conduct of state officials violates the Constitution as are applicable in determining whether the conduct of federal officials does so, and precisely the same exclusionary remedy is deemed appropriate for one behavior as for the other.
243
In this use of Wolf the Court disregards not only what precisely was said there, namely, that only what was characterized as the 'core of the Fourth Amendment,' not the Amendment itself, is enforceable against the States, but also the fact that what was said in Wolf was said with reference to the Due Process Clause of the Fourteenth Amendment, and not with reference to the specific guarantees of the Fourth Amendment. The scope and effect of these two constitutional provisions cannot be equated, as the Court would have it. These are constitutional provisions wholly different in history, scope and incidence, and that is crucial to our problem. It is of course true, as expressed in Wolf, that some of the principles underlying the specific safeguards of the first eight Amendments are implied limitations upon the States drawn out of the Due Process Clause of the Fourteenth Amendment, and to that extent, but no more, afford federal protection to individuals against state power. But it is basic to the structure and functioning of our federal system to distinguish between the specifics of the Bill of Rights of the first eight Amendments and the generalities of the Due Process Clause translated into concreteness case by case ever since Davidson v. New Orleans, 96 U.S. 97, 24 L.Ed. 616, by a process of inclusion and exclusion, as anlayzed with great particularity by Mr. Justice Cardozo in Palko v. Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288.
244
This vital distinction, running through hundreds of cases, underlies the decision in Wolf v. Colorado. It is therefore a complete misconception of the Wolf case to assume, as the Court does as the basis for its innovating rule, that every finding by this Court of a technical lack of a search warrant, thereby making a search unreasonable under the Fourth Amendment, constitutes an 'arbitrary intrusion' of privacy so as to make the same conduct on the part of state officials a violation of the Fourteenth Amendment. The divisions in this Court over the years regarding what is and what is not to be deemed an unreasonable search within the meaning of the Fourth Amendment and the shifting views of members of the Court in this regard, prove that in evolving the meaning of the Fourth Amendment the decisions of this Court have frequently turned on dialectical niceties and have not reflected those fundamental considerations of civilized conduct on which applications of the Due Process Clause turn. See, for example, the varying views of the Court as a whole, and of individual members, regarding the 'reasonableness' under the Fourth Amendment of searches without warrants incident to arrests, as illustrated by comparing Marron v. United States, 275 U.S. 192, 48 S.Ct. 74, 72 L.Ed. 231, with Go-Bart Importing Co. v. United States, 282 U.S. 344, 51 S.Ct. 153, 75 L.Ed. 374, and United States v. Lefkowitz, 285 U.S. 452, 52 S.Ct. 420, 76 L.Ed. 877; Go-Bart, supra, and Lefkowitz, supra, with Harris v. United States, 331 U.S. 145, 67 S.Ct. 1098, 91 L.Ed. 1399, and United States v. Rabinowitz, 339 U.S. 56, 70 S.Ct. 430, 94 L.Ed. 653; also Harris, supra, with Trupiano v. United States, 334 U.S. 699, 68 S.Ct. 1229, 92 L.Ed. 1663, and Trupiano with Rabinowitz, supra (overruling Trupiano). See also the Court's differing conceptions regarding the evidence necessary to constitute 'probable cause' upon which to base a warrant or a search without a warrant, as revealed by comparing Grau v. United States, 287 U.S. 124, 128, 53 S.Ct. 38, 40, 77 L.Ed. 212, with Draper v. United States, 358 U.S. 307, 312, note 4, 79 S.Ct. 329, 332, 3 L.Ed.2d 327 (rejecting Grau), and Jones v. United States, 362 U.S. 257, 270, 80 S.Ct. 725, 735, 4 L.Ed.2d 697.
245
What the Court now decides is that these variegated judgments, these fluctuating and uncertain views of what constitutes an 'unreasonable search' under the Fourth Amendment in conduct by federal officials, are to determine whether what is done by state police, wholly beyond federal supervision, violates the Due Process Clause. The observation in Wolf v. Colorado, reflecting as it did the fundamental protection of the Due Process Clause against 'arbitrary' police conduct, and not the specific, restrictive protection of the Fourth Amendment, hardly supports that proposition or the new rule which the Court rests upon it. The identity of the protection of the Due Process Clause against arbitrary searches with the scope of the protection of the Fourth Amendment is something the Court assumes for the first time today. It assumes this without explication in reason or in reliance upon authority, and entirely without regard for the essential difference, which has always been recognized by this Court, between the particularities of the first eight Amendments and the fundamental nature of what constitutes due process.
246
Nor can I understand how Wolf v. Colorado furnishes the slightest support for the application of the Weeks exclusionary rule, designed as that was to enforce the Fourth Amendment and indirectly to discipline federal officers under this Court's peculiarly comprehensive supervisory power over them, to the present cases, where the infractions, if any, were by state officers and were of rights arising under the Due Process Clause of the Fourteenth Amendment. The Court finds what it calls the 'ultimate holding' in Wolf, namely, that the exclusionary rule is not to be fastened upon state courts in enforcement of rights arising under the protection of the Fourteenth Amendment against arbitrary searches and seizures, something with which 'we are not here directly concerned.' I fail to understand why this holding is not of essential relevance to the holding of these cases. In the first place Wolf wholly rebuts the Court's assertion that there is no logic in distinguishing how the Fourteenth Amendment is to be enforced against state officials from how the Fourth is to be enforced against federal officers. The point of Wolf was that the logic of this was imperative and that the remedies under the two Amendments are not the same. In the second place, in light of the holding of Wolf that state courts may admit evidence like that involved in these cases, it cannot be said that there is any sufficient justification based upon controlling the conduct of state officers for excluding such evidence from federal courts, as the Court would do, when gathered by state officials whose States would admit it. The underlying assumption on which the exclusionary rule of Weeks rests is that barring evidence illegally secured will have an inhibiting, one hopes a civilizing, influence upon law officers. With due respect, it is fanciful to assume that law-enforcing authorities of States which do not have an exclusionary rule will to any significant degree be influenced by the potential exclusion in federal prosecutions of evidence secured by them when state prosecutions, which surely are their preoccupation, remain free to use the evidence. At any rate, what warrant is there for the federal courts to assume the same supervisory control over state officials as they have assumed over federal officers, even if that control could be effective? And the exertion of controlling pressures upon the police is admittedly the only justification for any exclusionary rule.
247
Thus, I do not understand how Wolf v. Colorado, which is the only case relied upon by the Court as authority for its innovation, furnishes support for the Court's new rule of evidence. It seems to me to do the opposite. Nor can the Court's new rule be justified as an effective means for controlling state officers. Neither do I think the Court's adoption of an exclusionary rule in the present cases finds justification, as the Court suggests, in light of any universal recognition of the need of excluding evidence such as is involved in these cases in order to assure the wise and effective administration of criminal justice. It cannot be denied that the appropriateness of barring relevant evidence as a means for regulating police conduct has not been unquestioned even by those most zealous for honest law enforcement, and it certainly has not gone unquestioned as outweighing the interest of society in bringing criminals to justice. See, e.g., People v. Defore, 242 N.Y. 13, 21, 150 N.E. 585, 587—588; 8 Wigmore, Evidence (3d ed. 1940), § 2184. And I regret to say that I do not find evidence that the movement towards adoption of the rule of exclusion has been, as we are told, 'seemingly inexorable.' On the contrary, what impresses me is the obduracy of high-minded state courts, like that of New York under the leadership of Judge Cardozo, in refusing to adopt the federal rule of exclusion. Indeed, this impressive insistence of States not to follow the Weeks exclusionary rule was the controlling consideration of the decision in Wolf not to read it into the requirement of 'due process' under the Fourteenth Amendment. As the material the Court has collected shows, fully half the States have refused to adhere to our Weeks rule, nearly fifty years after this Court has deemed it appropriate for the federal administration of criminal justice.
248
Apart from any affirmative justifications for the new rule, it is suggested in support of the need for making the Court's innovation that the distinction made since Weeks v. United States for purposes of excluding evidence, turning on whether or not federal officials had any share in the search, has engendered practical difficulties and for that reason ought now to be discarded. It is also suggested that the rule which has prevailed under Weeks and Byars to this day 'implicitly invites federal officers to withdraw from such association (with state law-enforcement officers) and at least tacitly to encourage state officers in the disregard of constitutionally protected freedom.' I am not aware of evidence to sustain the view that the distinction between federal and state searches has been particularly difficult of application. Individual cases have merely presented the everyday issue of evaluating testimony and testimony touching an issue relatively easy of ascertainment. I know of no opinion in any federal court, and the Court points to none, which has revealed any consciousness of having been confronted with too exacting a task for adjudication when called upon to decide whether a search was or was not to be deemed a federal search. This Court's decisions certainly do not reflect an awareness of such difficulties. And if the rule, as appears from the decisions of the judges who have had to apply it, has evidently been in general a workable one, it surely should not be discarded because of unsupported assumptions that federal officials are prone to evade it and to cooperate secretly with state police in improper activities. Disregard of the history, authority and experience that support the rule now cast into limbo ought to have a more substantiated justification than the fragile assumption that federal officers look for opportunities to engage in, to use the Court's language, 'subterfuge' and 'evasion' of a command sanctioned by this Court. I would not so belittle this Court's authority. I had supposed we should attribute to the law-enforcing authorities of the Government respect for this Court's weighty course of decisions and not a flouting of them.
249
Whatever difficulties of application there may be in the present rule—and the opinions of those who have had to apply it do not indicate that they are significant—they surely cannot lead us to exchange a tried and settled principle for the Court's new doctrine. For that doctrine, although the Court purports to be guided by the practical consequences of rules of evidence in this area and by considerations of comity between federal and state courts and policies, not only raises new and far greater difficulties than did the old rule, but is also pregnant with new disharmonies between federal and state authorities and between federal and state courts.
250
First. The Court's new rule introduces into the law governing the admissibility of search-and-seizure evidence in federal prosecutions a troublesome and uncertain new criterion, namely, the 'unconstitutionality' of police conduct, as distinguished from its mere illegality under state or federal law. Under the rule the Court today announces, the federal trial court, whenever state-seized evidence is challenged, must decide the wholly hypothetical question whether that evidence was 'obtained by state officers during a search which, if conducted by federal officers, would have violated the defendant's immunity from unreasonable searches and seizures under the Fourth Amendment.' Irrelevant are violations of state law, or hypothetical violations of federal statutes, had the search been 'conducted by federal officers.'
251
The Weeks rule of exclusion, as enforced by this Court, applies to all illegal seizures on the part of federal officers. If the officer's conduct is by statute or court-developed rule illegal, the evidence is excluded, and it is not necessary to say whether or not the rule of conduct flows directly from the Constitution. This has been an efficient, workable evidentiary criterion unencumbered with weighty constitutional distinctions. See, for example, Miller v. United States, 357 U.S. 301, 78 S.Ct. 1190, 2 L.Ed.2d 1332, where evidence was excluded without a mention of the Constitution. This Court or the lower federal courts have thus never, until today, needed to develop criteria distinguishing those federal regulations of the conduct of federal officers which are compelled by the Constitution from those which are entrusted to the discretion of Congress or the courts to develop. We must do so now, and so must federal trial courts concern themselves with such constitutional determinations in the midst of adjudicating motions to suppress state evidence. This is bound to be a troublesome process in light of the complete absence of such criteria. For example, are the special federal provisions regarding night search warrants of a constitutional nature? And what of the rules governing the execution of lawful warrants, applied in Miller v. United States, supra? We have never needed to pronounce upon these totally abstract and doctrinaire questions, and there surely is no need to announce a rule which forces us to do so now, when such a rule is not constitutionally required, but is concededly imposed as a matter of this Court's discretionary power to formulate rules of evidence for federal litigation. After all, it makes not the slightest difference from the point of view of the admissibility of evidence whether what a federal officer does is simply illegal or illegal because unconstitutional. Why introduce such subtleties, in a hypothetical federal context, when passing on state evidence?
252
Second. The Court's new rule potentially frustrates and creates undesirable conflict with valid and praiseworthy state policies which attempt to protect individuals from unlawful police conduct. Although the Court purports to be responsive to the needs of proper law enforcement and to considerations of comity between state and federal law, when it comes to elaborate its new rule it does so as follows: '(t)he test is one of federal (constitutional) law, neither enlarged by what one state court may have countenanced, nor diminished by what another may have colorably suppressed.' So comity plays no part at all, and the fruits of illegal law enforcement may well be admitted in federal courts directly contrary to state law. State law seeking to control improper methods of law enforcement is frustrated by the Court's new rule whenever a State which enforces an exclusionary rule places restrictions upon the conduct of its officers not directly required by the Fourth Amendment with regard to federal officers. The Court's new rule will, for example, admit evidence illegally seized under a state law which is identical to a federal statute restricting federal officers, so long as the federal statute goes beyond the minimum requirements of the Constitution. One would suppose that such a situation would be one in which this Court would plainly respect the state policy as constituting nothing but a local duplication of a federal policy. Yet the rule promulgated today flouts such a state regulation. A state officer who disobeys it needs only to turn his evidence over to the federal prosecutor, who may freely utilize it under today's innovation in disregard of the disciplinary policy of the State's exclusionary rule. I cannot think why the federal courts should thus encourage state illegalities.
253
I do not merely indulge in assumptions regarding the serious frustrations of valid state regulations of state law-enforcement officers which may arise from the rule formulated today. Take a concrete example of this mischief. In Breithaupt v. Abram, 352 U.S. 432, 77 S.Ct. 408, 1 L.Ed.2d 448, this Court decided that it did not violate the Fourteenth Amendment for a State to take blood from a defendant without his consent and use it in evidence against him, for such police methods were found not to be 'offensive' or 'unreasonable.' Nevertheless, States may decide, and have decided, that taking blood without consent is by state standards reprehensible, and that to discourage such conduct by its police blood-test evidence must be suppressed in use in state prosecutions. See Lebel v. Swincicki, 354 Mich. 427, 93 N.W.2d 281; State v. Kroening, 274 Wis. 266, 271—276, 79 N.W.2d 810, 814 817, 80 N.W.2d 816. Such a state policy is surely entitled to our respect if we are to exclude evidence on the basis of the illegal activity of state officers. Yet because of the decision in Breithaupt, the Court's new rule permits the admission of blood-test evidence in a federal prosecution, ignoring the State's decision that the police conduct producing it is illegal and that it therefore ought to be suppressed. And the same is to be true of evidence seized by state police in violation of a state rule regarding searches incident to lawful arrests which is more restrictive upon the police than the present version of the fluctuating federal rule, or of evidence seized pursuant to a warrant or to an arrest without a warrant which did not meet state standards of 'probable cause' more restrictive than the federal standards as lately developed. State rules in these areas may be and in some States are more restrictive than federal rules. See, for example, restricting the right of incidental search more than has this Court, State v. Adams, 103 W.Va. 77, 136 S.E. 703, 51 A.L.R. 407; State v. Buckley, 145 Wash. 87, 258, P. 1030; Flannery v. Commonwealth, Ky., 324 S.W.2d 128; Doyle v. State Okl.Cr., 320 P.2d 412; and imposing more exacting standards of 'probable cause' than federal law imposes, Doyle v. State, Okl.Cr., 320 P.2d 412 (expressly refusing to follow Brinegar v. United States, 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879); Averill v. State, Fla., 52 So.2d 791; People v. Thymiakas, 140 Cal.App.2d 940, 296 P.2d 4. Especially pertinent in this regard is the following statement in People v. Cahan, 44 Cal.2d 434, 450, 282 P.2d 905, 915, 50 A.L.R.2d 513, adopting an exclusionary rule for California: 'In developing a rule of evidence applicable in the state courts, this court is not bound by the decisions that have applied the federal rule, and if it appears that those decisions have developed needless refinements and distinctions, this court need not follow them. Similarly, if the federal cases indicate needless limitations on the right to conduct reasonable searches and seizures or to secure warrants, this court is free to reject them.'
254
In fact, in the very two cases now before the Court state courts have found their officers' conduct illegal and have ordered suppression of the evidence thereby gained. Yet the Court refuses to respect these findings and sends the cases back to the District Courts for independent rulings regarding the federal constitutional validity of the state officers' conduct. If these state infractions are not found to be of constitutional dimensions, and it is surely doubtful whether they were of that degree of seriousness under some of our decisions, the evidence will be admitted though wrongfully seized under the governing state law. The rule promulgated today would thus undo a State's disciplinary policy against police misconduct, while in the contrary situation, where the State would admit evidence now rejected by the Court, police conduct sustained by state law would not be affected.
255
Third. The Court's new rule creates potential conflict between federal and state courts even when the legal standards of police conduct upon which exclusion is to turn are the same in both courts. The Court says that '(i)n determining whether there has been an unreasonable search and seizure by state officers, a federal court must make an independent inquiry, whether or not there has been such an inquiry by a state court, and irrespective of how any such inquiry may have turned out.' Again considerations of comity are ignored. Applying the same legal standards, a federal tribunal may hold state officers blameless after a state court has condemned their conduct, or it may hold them to have been at fault after the State has absolved them. I cannot imagine the justification for permitting a federal court to make such conflicting pronouncements, debilitating local authority in matters over which the local courts should and do have primary responsibility.
256
In summary, then, although the Court professes to be responsive to '(t)he very essence of a healthy federalism' and 'the avoidance of needless conflict between state and federal courts,' the rule it actually formulates is wholly unresponsive to valid state policies while carrying a great risk of needless conflict between state and federal policies and between state and federal courts. With regard to evidence from States which have not adopted exclusionary rules, the Court's innovation of today deprives the federal courts of relevant evidence through hazardous constitutional determinations without any significant or legitimate compensating effect upon state or federal law enforcement. In States which do apply an exclusionary rule, the Court's new formulation accords no respect to valid state policies and is a source of conflict with state courts. The Court promulgates a rule whose only practical justification is the regulation of state officials without the slightest regard for achieving harmony with valid state laws which necessarily must be the primary concern of those officials. And although the Court recognizes considerations of 'judicial integrity' in accepting illegally seized evidence, it refuses to respect state determinations that certain evidence has in fact been illegally gathered under the applicable law.
257
I would agree wholly with my Brothers CLARK, HARLAN and WHITTAKER, who join me in the reasons for dissenting from the Court's decision, that the judgments should be affirmed if, like them, I found the only choice to be one between the Weeks-Byars doctrine and today's decision. For me, however, the course of events since the promulgation of the Weeks doctrine suggests a modification of it consonant with the thinking of Weeks and therefore not essentially departing from it. I would modify the Weeks-Byars rule to give due heed to appropriate comity between federal and state court determinations and due respect for the discretion left to the States by Wolf v. Colorado to develop and apply exclusionary rules upon their own initiative and I therefore would exclude the evidence in these cases on the basis of state decisions to suppress it. Specifically, I would recognize that about half the States have now adopted exclusionary rules although only one State had such a rule when the Weeks case was decided. It respects what was decided in Weeks regarding state-seized evidence for the federal courts now to adjust their rules of evidence to support the States which have adopted the Weeks exclusionary rule for themselves, thereby exercising the same control over state officials as Weeks found it appropriate for the federal courts to exercise over federal officials. Thus, although I find no good reason not to admit in federal courts evidence gathered by state officials in States which would admit the evidence, I would not admit such evidence in cases like the present, where state courts, enforcing their exclusionary rules, have found their officers guilty of infractions of the rules properly regulating their conduct and have suppressed the evidence. Just as Mr. Justice Holmes and Mr. Justice Brandeis in Burdeau v. McDowell, 256 U.S. 465, 476—477 (dissenting), 41 S.Ct. 574, 576, 65 L.Ed. 1048, deemed it not seemly for a federal court to allow the Department of Justice to be the knowing beneficiary of stolen goods, so it seems to me unseemly for a federal court not to respect the determination of a state court that its own officials were guilty of wrongdoing and not to support the State's policy to prevent those officials from making use through federal prosecution of the fruits of their wrongdoing. Dealing with the generality of cases, as rules of evidence should, to let a state determination regarding the legality of the conduct of state officials determine the admissibility in a federal court of evidence gathered by them would not only avoid a retrial of identical issues in the federal court, but would also avoid the unseemliness and disruption of state authority involved in having a federal court decide that a search was legal, as it might well do when the federal constitutional standards are narrower than state standards, after a state court has adjudged the search illegal.
258
I am not unmindful that this has its own difficulties, as for instance, the fact that state motions to suppress are normally determined only by a trial judge and are generally not reviewable at all if granted and followed by acquittal. And so a state court decision may not inevitably reflect the State's judicial policy as formulated by its highest court. Difficulties would also be present when there has been no state decision regarding the legality of the seizure, and when it is not clear to the federal court which must decide upon admissibility what the state decision would be. Occasionally, a state decision might unjustifiably frustrate an important federal prosecution dependent upon state-seized evidence. These are difficulties inherent in evolving harmonious relations in the interconnected interests between the States and the Nation in our federal system. The consequences of these difficulties seem to me far less weighty and much less dubious than those of the upsetting decision of today. They seem to me outweighed by the support which should be afforded to valid state law enforcement.
259
If the modified rule I have outlined is not to be adopted, however, the difficulties in the Court's decision make it far more preferable in my view to continue adherence to the sharp line drawn by Weeks and Byars between state- and federally-seized evidence. I would not embark upon a hazardous juttisoning of a rule which has prevailed in the federal courts for half a century without bringing to the surface demonstrated evils, indeed without its having evoked serious criticism of weight, barring recent discussion largely of an abstract and doctrinaire nature.*
260
Memorandum of Mr. Justice HARLAN, whom Mr. Justice CLARK and Mr. Justice WHITTAKER join.
261
I subscribe to all that my Brother FRANKFURTER has written in criticism of the Court's newly fashioned exclusionary rule. But, with deference, I must also say that, in my view, the arguments which he has so convincingly set forth likewise serve to block the more limited inroads which he would make on the so-called 'silver platter' doctrine. Lustig v. United States, 338 U.S. 74, 79, 69 S.Ct. 1372, 1374, 93 L.Ed. 1819. I would retain intact the nonexclusionary rule of the Weeks and Byars cases, which has behind it the strongest judicial credentials, the sanction of long usage, and the support of what, in my opinion, is sound constitutional doctrine under our federal scheme of things, doctrine which only as recently as last Term was reiterated by this Court. See Abbate v. United States, 359 U.S. 187, 79 S.Ct. 666, 3 L.Ed.2d 729; Bartkus v. Illinois, 359 U.S. 121, 79 S.Ct. 676, 3 L.Ed.2d 684. Except for this reservation, I join the dissenting opinion of my Brother FRANKFURTER.
262
I would affirm the judgments in both of the cases before us.
1
The state officers, having received information that petitioners had in their possession obscene motion pictures, procured a search warrant to search petitioner Clark's home. The affidavit upon which the warrant was based recited that 'upon information and belief' it was thought that Clark possessed obscene pictures and accompanying sound recordings. The search revealed no obscene pictures, but various paraphernalia believed to have been used in making wiretaps were found and seized.
Following an appropriate motion, the Multnomah County District Court held the search warrant invalid and ordered suppression of the evidence. This action came, however, after the return of an indictment by a state grand jury, and the local district attorney challenged the power of the district court to suppress evidence once an indictment was in. Accordingly, the question was later argued anew on a motion to suppress in the Circuit Court for Multnomah County, a court of general criminal jurisdiction. That court held the search unlawful and granted the motion to suppress. The state indictment was subsequently dismissed.
During the course of these state proceedings federal officers, acting under a federal search warrant, obtained the articles from the safe-deposit box of a local bank where the state officials had placed them. Shortly after the state case was abandoned, a federal indictment was returned, and the instant prosecution followed.
2
The 'silver platter' label stems from a phrase first turned in the prevailing opinion in Lustig v. United States, 338 U.S. 74, 79, 69 S.Ct. 1372, 1374, 93 L.Ed. 1819. The doctrine has been the subject of much comment in legal periodicals. See, e.g., Allen, The Wolf Case: Search and Seizure, Federalism, and the Civil Liberties, 45 Ill.L.Rev. 1, 14—25; Galler, The Exclusion of Illegal State Evidence in Federal Courts, 49 J.Crim.L., Criminology & Police Science, 455; Kohn, Admissibility in Federal Court of Evidence Illegally Seized by State Officers, 1959, Wash.U.L.Q. 229; Kamisar, Wolf and Lustig Ten Years Later: Illegal State Evidence in State and Federal Courts, 43 Minn.L.Rev. 1083; Parsons, State-Federal Crossfire in Search and Seizure and Self Incrimination, 42 Cornell L.Q. 346, 347—368; Comment, The Benanti Case: State Wiretap Evidence and the Federal Exclusionary Rule, 57 Col.L.Rev. 1159; Comment, Judicial Control of Illegal Search and Seizure, 58 Yale L.J. 144; Notes, 51 Col.L.Rev. 128, 27 Geo.Wash.L.Rev. 392, 5 N.Y.L.F. 301, 6 U.C.L.A.Rev. 703.
3
See, e.g., Rettich v. United States, 1 Cir., 84 F.2d 118; Milburne v. United States, 2 Cir., 77 F.2d 310; Miller v. United States, 3 Cir., 50 F.2d 505; Riggs v. United States, 4 Cir., 299 F. 273; Timonen v. United States, 6 Cir., 286 F. 935; Fowler v. United States, 7 Cir., 62 F.2d 656 (dictum); Elam v. United States, 8 Cir., 7 F.2d 887; Brown v. United States, 9 Cir., 12 F.2d 926; Gilbert v. United States, 10 Cir., 163 F.2d 325; Shelton v. United States, 83 U.S.App.D.C. 257, 169 F.2d 665, overruled by Hanna v. United States, 104 U.S.App.D.C. 205, 260 F.2d 723.
4
Compare Sutherland v. United States, 4 Cir., 92 F.2d 305; Ward v. United States, 5 Cir., 96 F.2d 189; Fowler v. United States, 7 Cir., 62 F.2d 656; United States v. Butler, 10 Cir., 156 F.2d 897; with Kitt v. United States, 4 Cir., 132 F.2d 920; Sloane v. United States, 10 Cir., 47 F.2d 889.
5
Compare United States v. Jankowski, 2 Cir., 28 F.2d 800; Marsh v. United States, 2 Cir., 29 F.2d 172; with United States v. Butler, 10 Cir., 156 F.2d 897.
6
See, e.g., Burford v. United States, 5 Cir., 214 F.2d 124, 125; Ford v. United States, 6 Cir., 234 F.2d 835, 837; United States v. Moses, 7 Cir., 234 F.2d 124; Williams v. United States, 9 Cir., 215 F.2d 695, 696; Gallegos v. United States, 10 Cir., 237 F.2d 694, 696—697.
7
Long before the Court established that the Fourteenth Amendment protects the security of one's privacy against arbitrary intrusion by state officers, Mr. Justice (then Judge) Cardozo perceived a basic incongruity in a rule which excludes evidence unlawfully obtained by federal officers, but admits in the same court evidence unlawfully obtained by state agents. 'The federal rule as it stands is either too strict or too lax. A federal prosecutor may take no benefit from evidence collected through the trespass of a federal officer. * * * He does not have to be so scrupulous about evidence brought to him by others. How finely the line is drawn is seen when we recall that marshals in the service of the nation are on one side of it, and police in the service of the states on the other. The nation may keep what the servants of the states supply. * * * We must go farther or not so far. The professed object of the trespass rather than the official character of the trespasser should test the rights of government. * * * A government would be disingenuous, if, in determining the use that should be made of evidence drawn from such a source, it drew a line between them. This would be true whether they had acted in concert or apart.' People v. Defore, 242 N.Y. 13, 22—23, 150 N.E. 585, 588.
8
The Director of the Federal Bureau of Investigation has written as follows:
'One of the quickest ways for any law enforcement officer to bring public disrepute upon himself, his organization and the entire profession is to be found guilty of a violation of civil rights. Our people may tolerate many mistakes of both intent and performance, but, with unerring instinct, they know that when any person is intentionally deprived of his constitutional rights those responsible have committed no ordinary offense. A crime of this nature, if subtly encouraged by failure to condemn and punish, certainly leads down the road to totalitarianism.
'Civil rights violations are all the more regrettable because they are so unnecessary. Professional standards in law enforcement provide for fighting crime with intelligence rather than force. * * * In matters of scientific crime detection, the services of our FBI Laboratory are available to every duly constituted law enforcement officer in the nation. Full use of these and other facilities should make it entirely unnecessary for any officer to feel the need to use dishonorable methods.
'Complete protection of civil rights should be a primary concern of every officer. These rights are basic in the law and our obligation to uphold it leaves no room for any other course of action. Although the great majority in our profession have long since adopted that policy, we cannot yet be entirely proud of our record. Incidents which give justification to charges of civil rights violations by law enforcement officers still occur. * * * This state of affairs ought to be taken as a challenge to all of us. Every progressive police administrator and officer must do everything in his power to bring about such an improvement that our conduct and our record will conclusively prove each of these charges to be false.' FBI Law Enforcement Bulletin, September, 1952, pp. 1—2.
9
See Appendix, 364 U.S. at pages 224—225, 80 S.Ct. at page 1448.
10
See Appendix, 364 U.S. at pages 224—225, 80 S.Ct. at page 1448.
11
For a discussion of recent developments in British Commonwealth jurisdictions, see Cowen, The Admissibility of Evidence Procured Through Illegal Searches and Seizures in British Commonwealth Jurisdictions, 5 Vanderbilt L.Rev. 523 (1952). The author concludes upon a survey of Commonwealth decisions 'that there is no uniform rule on the admissibility of evidence procured through illegal searches and seizures.' Id., at 546.
12
North Carolina. See Appendix, 364 U.S. at page 230, 80 S.Ct. at page 1451.
13
Delaware and California. See Appendix, 364 U.S. at page 226, 80 S.Ct. at page 1449.
14
Rhode Island. See Appendix, 364 U.S. at page 231, 80 S.Ct. at page 1452.
15
Excerpt from letter of Governor Edmund G. Brown, then Attorney General of the State of California, to the Stanford Law Review, quoted in Note, 9 Stan.L.Rev. 515, 538 (1957). See also Barrett, Exclusion of Evidence Obtained by Illegal Searches—A Comment on People vs. Cahan, 43 Cal.L.Rev. 565, 586—588 (1955).
16
See Rule 41(e), Fed.Rules Crim.Proc. The defendant, of course, must have 'standing' to object. See Jones v. United States, 362 U.S. 257, 80 S.Ct. 725, 4 L.Ed.2d 697.
*
Alaska and Hawaii both hold illegally obtained evidence to be excluded although, it does not appear that either has passed anew on this question since attaining statehood.
*
See the authorities cited in the Court's note 2, 364 U.S. 208, 80 S.Ct. 1439, and see Hanna v. United States, 104 U.S.App.D.C. 205, 260 F.2d 723, the only Court of Appeals decision to concur with the views the Court today expresses. What criticisms there have been of the Weeks rule have largely been stimulated by Wolf and have in essence been reflections of dissatisfaction with the substantive decision in that case, and thus do not constitute supports for the doctrine now evolved by the Court.
| 01
|
364 U.S. 137
80 S.Ct. 1392.
4 L.Ed.2d 1623
SUNRAY MID-CONTINENT OIL CO., Petitioner,v.FEDERAL POWER COMMISSION.
No. 335.
Argued April 26 and 27, 1960.
Decided June 27, 1960.
Mr. Melvin Richter, Washington, D.C., for petitioner.
Mr. Howard E. Wahrenbrock, Washington, D.C., for respondent.
Mr. Justice BRENNAN delivered the opinion of the Court.
1
This case presents an important question under the Natural Gas Act.1 This question , central to the case, is: When a company, proposing to make, under contract, jurisdictional sales2 of natural gas in interstate commerce, applies for a certificate of public convenience and necessity as required by the Act, and requests that the certificate be limited in time to the duration of a contract for the sale of gas which it has entered, does the Federal Power Commission have the authority to tender it, instead, a certificate without time limitation?
2
Petitioner Sunray Mid-Continent Oil Company, an independent producer of natural gas, entered into a contract with United Gas Pipeline Company, an interstate transmission company. The contract covered considerable acreage owned by, or under mineral least to, petition in Vermilion and Lafayette Parishes, Louisiana, in and about what is called the Ridge field. Under it, United agreed to take an annual amount of gas from petition equivalent to 4.5625 per cent of petitioner's gas reserves in the area covered by the agreement;3 and United had the right, in addition, to call for any amount up to 150 per cent of the amount it had annually agreed to take. The term of the agreement was 20 years. The initial price provided was 20.5 cents per thousand cubic feet (Mcf.); and the price was to increase one cent per Mcf. every five years.4
3
Section 7(c) of the Natural Gas Act provides that "no natural-gas company * * * shall engage in the transportation or sale of natural gas, subject to the jurisdiction of the Commission * * * unless there is in force with respect to such natural-gas company a certificate of public convenience and necessity issued by the Commissioner authorizing such acts or operations." This Court held in Phillips Petroleum Co. v. State of Wisconsin, 347 U.S. 672, 74 S.Ct. 794, 796, 98 L.Ed. 1035, that by virtue of § 1(b) of the Act, sales of gas by an independent producer to a pipeline "in interstate commerce * * * for resale for ultimate public consumption" came within the scope of the Act.5 Petitioner had no certificate of public convenience and necessity authorizing sales in interstate commerce from the field in question. Accordingly, in order to carry out its contract with United, it was necessary for petitioner to apply for a certificate from the Commission, which it did.
4
Petitioner's application for the certificate contained the request that the certificate sought "provide for its own expiration on the expiration of the * * * contract term so as to authorize Applicant to cease the delivery and sale of gas thereunder at that time." The Commission, upholding its examiner's recommendations, rejected the contentions of petitioner that there should be issued to cover the contract only a certificate limited to the term of the contract itself, and tendered it a certificate without time limitations.6 19 F.P.C. 618. Petitioner applied for a rehearing of the Commission's order. Basic to this application was the contention that "The Commission is without authority to issue a certificate to an applicant authorizing more than the whole or some part of the sale covered by the application for certificate of public convenience and necessity * * *." The Commission denied the rehearing application. 19 F.P.C. 1107.
5
Petitioner did not avail itself of its undoubted right to stand firm on its own application, and reject the proffered certificate. Cf. Atlantic Refining Co. v. Public Services Comm., 360 U.S. 378, 387-88, 79 S.Ct. 1246, 1252, 1253, 3 L.Ed.2d 1312.7 Instead it accepted the Commission's certificate and commenced deliveries of gas under it, reserving its right to object, on review, to the certificate's unlimited nature. The Court of Appeals for the Tenth Circuit rejected petitioner's objections, and affirmed the order of the Commission, 267 F.2d 471. In view of the importance of the central question presented, to which we have already alluded, we granted certiorari. 361 U.S. 880, 80 S.Ct. 151, 4 L.Ed.2d 118. We are in agreement with the Court of Appeals, and affirm its judgment.
6
The practical reasons behind petitioner's superficially self-abnegating desire to have a limited rather than an unlimited authorization from the Commission are obvious from a study of the Natural Gas Act's provisions. Obvious also is the damaging effect that acceptance of petitioner's central contention would have upon the policies of the Act.
I.
7
Section 7(b) of the Natural Gas Act regulates the abandonment by natural-gas companies of their facilities and services subject to the jurisdiction of the Commission.8 The section follows a common pattern in federal utility regulation9 in forbidding such abandonment "without the permission and approval of the Commission first had and obtained." The Commission is to extend permission for an abandonment of service only on a finding "that the available supply of natural gas is depleted to the extent that the continuance of service is unwarranted, or that the present or future public convenience or necessity permit such abandonment." The proposal of petitioner was for a certificate that would by its own terms expire when the contract with United expired. Thus at the end of the period, petitioner would become free to cease supplying gas to the interstate market from the Ridge area without further leave of the Commission, and without there having been made the findings that Congress deemed necessary.
8
If petitioner's contentions, as to the want of authority in the Commission to grant a permanent certificate where one of limited duration has been sought for, were to be sustained, the way would be clear for every independent producer of natural gas to seek certification only for the limited period of its initial contract with the transmission company, and thus automatically be free at a future date, untrammeled by Commission regulation, to reassess whether it desired to continue serving the interstate market. And contracts—as did the 1947 contract in the companion case to the one at bar, Sun Oil Co. v. Federal Power Comm., 364 U.S. 170, 80 S.ct. 1388, might provide for termination in the event of a rate reduction by the Commission. Petitioner's theory, by tying the term of the certificate to the contract, would mean that such a reduction of rates would under those circumstances enable the producer to cease supplying gas, without obligation to justify its cessation of this service as being consistent with the public convenience and necessity.
9
The consequences of petitioner's argument do not stop there. The identical provisions of the Natural Gas Act regulate pipeline companies as well as independent producers. If producers can insist in their certificates on the inclusion of a provision relieving them in advance from their obligation to continue the supply of gas, as of a date certain, pipeline companies—whose dealings with local distributing companies generally also take the form of a "sale" of gas to them—could insist on a similar provision. If an individual producer were thus left free to discontinue his supply, the transmission company would be forced to find a supplier of gas elsewhere, and make connection with him, to continue its service; and the consumer ultimately would pay the bill for the rearrangement. If the pipeline company were left free to cease its service to the local distribution company, a local economy which had grown dependent on natural gas as a fuel would be at its mercy. And this, though the primary practical problem that led to the passage of the Act was the great economic power of the pipeline companies as compared with that of communities seeking natural gas service. See Federal Power Comm. v. Hope Natural Gas Co., 320 U.S. 591, 610, 64 S.ct. 281, 291, 88 L.Ed. 333.
10
And there are practical consequences, related to rate control, which are even more concrete. The companion case, sun Oil Co. v. Federal Power Comm., 364 U.S. at page 170, 80 S.Ct. at page 1388, illustrates them. If petitioner's certificate of public convenience must expire with its first contract with United, service after then—under a new contract or otherwise—will require a new certificate. And under that certificate, petitioner may file, pursuant to § 4(c) of the Act,10 its rates for the "new" service. The only power the Commission would have, under the Act, with respect to those rates, would be to bear the burden of proof in an investigation under § 5 of the Act,11 that the rates are unjust or unreasonable, and thereupon order a new rate, solely for prospective application. Last Term in the so-called Catco case, Atlantic Refining Co. v. Public Service Comm., supra, 360 U.S. at page 389, 79 S.ct. at page 1254, 3 L.Ed.2d 1312, we had occasion to remark that "the delay incident to determination in § 5 proceedings through which initial certificated rates are reviewable appears nigh interminable." At oral argument, counsel for the Commission confirmed that no contested major producer's § 5 case had been finally adjudicated by the Commission in the six years since this Court's decision in the Phillips case. In contrast to § 5 are the protections that would be available if at the conclusion of the original contract the producer's certificate remained in full force and effect. Then the rates to be charged under a new contract or otherwise would have to be filed as rate changes under § 4(d) of the Act, with 30 days' notice to the Commission and the public.12 Under § 4(e), the Commission, on complaint of any State, state commission, or municipality, or sua sponte, may order a hearing on the new rate, and suspend the effectiveness of the rate for five months.13 At the hearing, the gas company would have to shoulder the burden of proving that its new rates were just and reasonable. If the hearing were not concluded by the end of the suspension period, the increased rate could be collected ad interim; but the Commission is empowered to require the company to collect the increment under bond and accounting, and refund it if it could not make out its case for the increase.
11
Clearly, the rate of change provisions of §§ 4(d) and 4(e), rather than the "initial rate" provisions of § 4(c), are better tailored to the situation that exists when an initial contract of sale of natural gas terminates, and the supply of gas continues, whether under a new contract or without one. When a producer commences interstate sales from a particular field, or when an interstate transmission company commences sales to a local distributing company, there are by definition no existing rates, and accordingly the protective provisions of §§ 4(d) and (e), which are bottomed on delaying the effectiveness of, and suspending, changes, are not relevant. But of course this is not the case where one sales contract expires and service continues; in this situation, where a rate change is proposed, the protective provisions fit as well as they do in the case of a rate change made pursuant to a contract, during its term.
12
Thus it is apparent that petitioner's position would enable it to make what in practical effect would be rate changes, but without compliance with the procedures of §§ 4(d) and 4(e), and subject to revision only in procedures which are likely to "provide a windfall for the natural gas company with a consequent squall for the consumers," as we said in Catco. 360 U.S., at page 390, 79 S.ct. at page 1254. When attached to the leverage of a power to abandon service, at a contract's termination, without contemporaneous Commission approval, this power to exercise contractual control not only over rates but over the mode of their regulation, would be a substantial one indeed. And, like the power to force an advance license for the abandonment of the continued supply of gas, the power would be one enjoyed by pipeline companies and producers alike. Further, declaration today of a want of authority in the Commission to issue a certificate of longer duration than that of a sales contract attached to the application would have a retroactive effect; it would at least furnish a guide to the construction of certificates issued previously on such applications. See Sun Oil Co. v. Federal Power Comm., 364 U.S. at page 170, 80 S.Ct. at page 1388.
13
This Court declared as early as the Hope Natural Gas case that the primary aim of the Natural Gas Act was "to protect consumers against exploitation at the hands of natural gas companies." 320 U.S. 591, 610, 64 S.Ct. 281, 291, 88 L.Ed. 333. We reiterated that declaration last Term in Catco, and observed that "The Act was so framed as to afford consumers a complete, permanent and effective bond of protection from excessive rates and charges." 360 U.S., at page 388, 79 S.Ct. at page 1253. Against the backdrop of the practical consequences of the petitioner's claim and the purposes of the Act, we look to the details of its argument that the Commission is limited, in granting its certificate of public convenience and necessity, to a term certificate of the duration petitioner has proposed.
14
First. Petitioner's argument is based primarily on its construction of § 7(e) of the Act. That section provides that a certificate of public convenience and necessity shall be issued "to any qualified applicant therefor, authorizing the whole or any part of the operation, sale, service, construction, extension or acquisition covered by the application."14 This petitioner urges, makes it clear that the outside limit of what the Commission may authorize is what the applicant proposes. Further, petitioner urges that the language requiring a finding "that the applicant is able and willing properly to do the acts and to perform the service proposed" negates the Commission's authority to go beyond the time limitations the applicant inserts in its proposal; for it is claimed that it cannot be found that petitioner is willing to do more than what it has proposed. Under petitioner's theory, the abandonment provisions of § 7(b) would have application only if it was desired to abandon service while the contract was still in effect.
15
The argument seems to us unpersuasive even on the face of the statutory language. It depends in the first instance upon freightening the phrase "the whole or any part," obviously intended to give the Commission power to grant less than the whole of an application with a load of negative meaning which nothing in the legislative history indicates that it was to bear. Even without the illumination of the purpose of the Act, it could be argued with equal force that all that was meant was that the certificate to be granted be one sufficient to authorize the specific "sale" proposed; which an unlimited certificate clearly is, in any case. But apart from this, petitioner's contention depends on the assumption that the provisions relied upon speak only in terms of the specific "sale" contemplated by the parties and not in terms of a "service" in the movement of gas in interstate commerce, of which "service" the initial "sale" is the commencement. For under § 7(e) the Commission is authorized to issue a certificate authorizing the "service" covered by the application, as well as a "sale"; and since § 7(c),15 which details the acts for which a certificate is a prerequisite, sets forth no specific antecedent for the "service" to which § 7(e) refers, it might well be thought that one who "engage[s] in the transportation or sale of natural gas," which § 7(c) does refer to, is performing a "service" within the meaning of § 7(e). Certainly there is no more likely antecedent in § 7(c). The structure of § 4(c) presents the same feature,16 and that of the abandonment provisions of § 7(b) themselves17 looks the same way.
16
Furthermore, within § 7(e) itself, there is found the further requirement to which petitioner itself points—that with respect to an application for a certificate of any nature, a two-part finding must be made: that the applicant is willing and able "to do the acts and to perform the service proposed." Thus, it is evident that all matters for which a certificate is required—the construction of facilities or their extension, as well as the making of jurisdictional sales—must be justified in terms of a "service" to which they relate. Accordingly, § 7(e) itself gives positive indication that the "service" which the Commission's certificate may authorize is something quite apart from simply the specific sales which § 7(c) forbids without a certificate sufficient to authorize them. To be sure, § 7(e) requires that the applicant be found willing to perform the "service" in question; but surely such willingness can be inferred from its willingness to enter into a long-term sales contract. To say that the finding cannot be made in view of the applicant's declared desire to stop and have a look in 20 years as to its continued desire to be subject to regulation, and that this is a limit on its willingness to perform the service that the certificates must respect, is to make effective regulation turn on the desire of the regulated enterprise to be subject to it.18 The willingness to make the proposed "sale" thus must imply willingness to perform the "service" which it represents. Thus even as a verbal argument, petitioner's contentions lack persuasiveness.
17
Second. Once we pass beyond parsing the Act to a consideration of its purpose, and of the practice under it, the construction we have given it becomes inescapable. We have outlined the serious consequences for the regulatory scheme that acceptance of the petitioner's argument would entail. These consequences cannot readily be averted by other means suggested by the Act.
18
It is urged that if it is in the public interest to award only an unlimited certificate, the Commission might attain this end by refusing all applications for a limited one, intimating that an unlimited application would be favorably regarded. But the action of the Commission is refusing the certificate as originally applied for would be subject to judicial review; and once it were held that the Commission had no authority to award a certificate of longer duration than that prayed for, such an indirect method of attaining the same end might well meet judicial condemnation as arbitrary. There is also some suggestion that the Commission might use its power, under § 7(e), of attaching to the certificate "such reasonable terms and conditions as the public convenience and necessity may require," to attach the "condition" that the certificate be permanent. But again, once want of power to do this directly were established, the existence of power to achieve the same end indirectly through the conditioning power might well be doubted; and the acceptance of a certificate for a longer duration than requested might not be said properly to be a "term or condition" of a limited one at all.19 We think the Commission's power to protect the public interest under § 7(e) need not be restricted to these indirect and dubious methods.
19
The Commission's practice supports its authority here in the terms of § 7(e). It has long drawn a distinction between the underlying service to the public a natural gas company performs and the specific manifestation—the contractual relationship—which that service takes at a given moment. For example, an independent producer may file as its rate schedule its contract of sale with a pipeline company. That contract may provide in explicit terms for an adjustment of rates at a future time—even one foreordained in a precise amount. Yet when the adjustment is made pursuant to the contract, the adjustment is subject, as a "change" in rates, to the procedures of §§ 4(d) and 4(e)—however explicit the upward adjustment was in the contract from the start. Cr. Texas Gas Transmission Corp. v. Shell Oil Co., 363 U.S. 263, 80 S.Ct. 1122. This position of the Power Commission is evidence that the service in which the producer engages is distinct from the contract which regulates his relationship with the transmission company in performing the service. And it has been upheld in every Court of Appeals case on the question. Episcopal Theological Seminary of the Southwest v. Federal Power Comm., 106 U.S.App.D.C. 37, 269 F.2d 228; Bel Oil Corp. v. Federal Power Comm., 5 Cir., 255 F.2d 548, and companion cases; Continental Oil Co. v. Federal Power Comm., 5 Cir., 236 F.2d 839; Cities Service Gas Producing Co. v. Federal Power Comm., 10 Cir., 233 F.2d 726; Mississippi River Fuel Corp. v. Federal Power Comm., 8 Cir., 121 F.2d 159. See United Gas Pipe Line Co. v. Memphis Light, Gas & Water Div., 358 U.S. 103, 110, 79 S.Ct. 194, 198, 3 L.Ed.2d 153. If the Act does not contemplate that in a seller's contract there may inhere the power, of the contract's own accord, to effect a rate change at a future date unchecked by the regulatory scheme, it is hard to believe that it contemplated that contracts would of necessity have the effect of providing for a discontinuance of service, without further leave of the Commission.
20
Further, the Power Commission has from an early date taken the view that there is a continuing obligation to perform "service" imposed by the Act which outlasts the term of a seller's original contract of sale. As early as 1942 it held that an abandonment of service after the expiry of such a contract had to have Commission approval under § 7(b). United Gas Pipe Line Co., 3 F.P.C. 3, 9. This ruling was made by Commissioners who had been in office during the passage of the Act.20 It was not a fundamental ruling on a broad question of jurisdiction as to which a court might enjoy a wider latitude of review. See Phillips Petroleum Co. v. State of Wisconsin, 347 U.S. 672, 678, 74 S.Ct. 794, 796, 98 L.Ed. 1035. It was rather an early implementation and application of a detail of the statutory scheme by the Commission in a regulatory setting before it. The ruling has been followed, see Panhandle Eastern Pipe Line Co., 11 F.P.C. 167, 172, and we think this contemporaneous and consistent construction, pointing again to a distinction between the underlying "service" to the public and the contractual means by which it is implemented, is to be afforded weight in the construction we make.
21
Third. But against these considerations, it is urged that United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373, establishes dominant factors which impel one to the construction petitioner would put on the Act. Petitioner claims that Mobile establishes a principle that the Act (unlike many other regulatory schemes)21 in general preserves the integrity of private contracts, and that the judgment below is in conflict with that principle.
22
The petitioner states accurately enough the principle that Mobile establishes. See 350 U.S., at pages 338, 344, 76 S.Ct. at pages 377, 380. But the conclusion petitioner asserts does not follow. In Mobile, this Court held that where a seller of gas had entered into a contract for the sale, it could not, by virtue of the provision in § 4 for rate changes, file an increase in rates that violated the terms of the contract. This was because the scheme of the Act was one which built the regulatory system on a foundation of private contracts. It was held in the Memphis case, United Gas Pipe Line Co. v. Memphis Light, Gas & Water Div., supra, that the corollary of Mobile was that where the contract left the seller free to act, he could act unilaterally under § 4.
23
It is apparent that the Commission's order in no way violates the integrity of petitioner's contract with United. During its term, both parties are bound by it to the same extent as any members of this regulated industry. When it expires, petitioner, to be sure, will be under an obligation to continue to deliver gas to United on the latter's request unless it can justify an abandonment before the Commission; but we do not see how this in any way disturbs the integrity of the contract during its term. The obligation that petitioner will be under after the contract term will not be one imposed by contract but by the Act. It will be free then, as it was not free during the contract term under the contract here in question, to make rate changes under § 4 without United's consent. It is said that petitioner will be in a position of inequality, because it must supply gas then to United without a corresponding obligation on United to take it. But United, subject to the Act in its sales to local distributors, has its obligations too; and if in fulfilling them it desires to have a continuing supply of gas with the stability of price protection which a contract furnishes under Mobile, it may be discovered that each side has its bargaining strength. In any event, we do not see how the prospect of this situation after the term of petitioner's contract in any way impairs the integrity of any contract. Mobile is thus simply beside the point.
24
The short of the matter is that Mobile recognized that there were two sources of price and supply stability inherent in the regulatory system established by the Natural Gas Act—the provisions of private contracts and the public regulatory power. See 350 U.S., at page 344, 76 S.Ct. at page 380. Petitioner now urges an application of that decision that could make private contracts the only stabilizing factor under the Act. Not only does this reading have nothing to do with the integrity of private contracts which Mobile underwrote, but it makes a severe incursion into the sources of that stability of natural-gas prices and supply to which that decision gave confirmation. Our consideration of this, as well as the rest of petitioner's arguments, leads us to reiterate as our holding the clear implication of what we recently said in Catco: An initial application of an independent producer, to make movements of natural gas in interstate commerce, leads to a certificate of public convenience and necessity under which the Commission controls the basis on which "gas may be initially dedicated to interstate use. Moreover, once so dedicated there can be no withdrawal of that supply from continued interstate movement without Commission approval. The gas operator, although to this extent a captive subject to the jurisdiction of the Commission, is not without remedy to protect himself." 360 U.S. at page 389, 79 S.Ct. at page 1254, 3 L.Ed.2d 1312. That remedy he has, as the Court there said, in the "change" power under § 4(d) when his contract has expired or where his contract permits its use during its term. Under a similar Act, this Court has held to the same effect as we hold today. Pennsylvania Water & Power Co. v. Federal Power Comm., 343 U.S. 414, 423-424, 72 S.Ct. 843, 847-848, 96 L.Ed. 1042.
II.
25
Once the power of the Commission to issue the certificate without time limitation is established, the other objections of the petitioner fall readily. It is contended that the Commission's order, by requiring the petitioner to supply gas beyond the term of its contract, may, by requiring petitioner to produce more gas than it has contemplated, offend the provision of § 1(b) of the Act that the Act does not apply "to the production or gathering of natural gas." The point was not raised before the Commission, and accordingly is not for our consideration here,22 and we might say in any event that the point is not for evaluation in this certification proceeding, but rather on the specific facts presented in the context of an abandonment application by petitioner under § 7(b), after the expiration of its contract, when and if it desires to make one. We intimate no view as to its merit.23
26
Other objections seem primarily directed to the point that the Commission imposed the burden of proof on the petitioner to show that the certificate should be limited, in the public interest, rather than itself taking on the burden of supporting its issuance of an unlimited certificate. There is no contention that the Commission was again indulging in the erroneous notion that it had no power to issue a limited certificate. Cf. Sunray Mid-Continent Oil Co. v. Federal Power Comm., 10 Cir., 239 F.2d 97, reversed on other grounds 353 U.S. 944, 77 S.Ct. 792, 1 L.Ed.2d 794. This procedural formulation seems to us well within the Commission's discretion as an implementation of the Act's protective provisions which we have discussed. And, though much urged by petitioner, the fact that the Commission has certificated pipeline operations despite their showing of gas resources of a shorter duration than petitioner's contract term is not inconsistent with the Commission's approach here.24 From the fact that the Commission has issued certificates in the presence of what may prove to be physical limitations on the service to be rendered under them,25 it does not follow that the Commission cannot take care lest these physical problems in the continuation of supply become further complicated by the legal certificate term limitations for which the petitioner contends.
27
Finally it is suggested that for various reasons which petitioner claims to be related to the public interest, it would be more advantageous if gas producers were given a free hand, after the completion of each contract, to determine for themselves whether they should continue to serve the interstate market. These considerations were not urged before the Commission, and hence we are not called upon to decide whether they would compel a different approach by the Commission to the question of time limitations in certificates, or even whether, in the light of the Act's provisions—particularly the policy expressed in § 7(b)—it would be proper for it so to rely on them. There is no contention made that petitioner demonstrated any specific circumstances in its own case indicating that, despite the Commission's general policy, the public convenience and necessity warranted a limited certificate for it.
28
Affirmed.
1
52 Stat. 821, as amended, 15 U.S.C. §§ 717-717w, 15 U.S.C.A. §§ 717-717w.
2
Section 1(b) of the Act provides that to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas." 52 Stat. 821, 15 U.S.C. § 717(b), 15 U.S.C.A. § 717(b).
3
The amount of the reserves was subject to redetermination during the term of the contract pursuant to its Article IV, but only prospective effect would be given the redeterminations.
4
Article IX of the contract also provided for adjustment of these prices, by way of upward or downward escalation, in accordance with a price index of the Department of Labor.
5
See note 2, supra.
6
The Commission reached this conclusion without dissent. There was one dissent, by Commissioner Connole, from the issuance of the certificate, but only insofar as the Commission failed to attach a rate condition for which the Commission staff had contended. This aspect of the case was not brought before the court below for review in these proceedings.
7
Of course the economics of the industry might preclude an unyielding assumption of such a position. See 360 U.S., at page 394, 79 S.Ct. at page 1256.
8
The text of the section provides: "No natural-gas company shall abandon all or any portion of its facilities subject to the jurisdiction of the Commission, or any service rendered by means of such facilities, without the permission and approval of the Commission first had and obtained, after due hearing, and a finding by the Commission that the available supply of natural gas is depleted to the extent that the continuance of service is unwarranted, or that the present or future public convenience or necessity permit such abandonment." 52 Stat. 824, 15 U.S.C. § 717f(b), 15 U.S.C.A. § 717f(b).
9
See § 1(18) of the Interstate Commerce Act, as added by the Transportation Act of 1920, 41 Stat. 477, 49 U.S.C. § 1(18),49 U.S.C.A. § 1(18); § 214(a) of the Communications Act of 1934, as amended by the act of March 6, 1943, 57 Stat. 11, 47 U.S.C. § 214(a), 47 U.S.C.A. § 214(a).
10
"Under such rules and regulations as the Commission may prescribe, every natural-gas company shall file with the Commission * * * schedules showing all rates and charges for any transportation or sale subject to the jurisdiction of the Commission, and the classifications, practices, and regulations affecting such rates and charges, together with all contracts which in any manner affect or relate to such rates, charges, classifications, and services." 52 Stat. 822, 15 U.S.C. § 717c(c), 15 U.S.C.A. § 717c(c).
11
In pertinent part, § 5(a) of the Act provides: "Whenever the Commission, after a hearing had upon its own motion or upon complaint of any State, municipality, State commission, or gas distributing company, shall find that any rate, charge, or classification demanded, observed, charged, or collected by any natural-gas company in connection with any transportation or sale of natural gas, subject to the jurisdiction of the Commission, or that any rule, regulation, practice, or contract affecting such rate, charge, or classification is unjust, unreasonable, unduly discriminatory, or preferential, the Commission shall determine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force, and shall fix the same by order * * *." 52 Stat. 823, 15 U.S.C. § 717d(a), 15 U.S.C.A. § 717d(a).
12
"Unless the Commission otherwise orders, no change shall be made by any natural-gas company in any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto, except after thirty days' notice to the Commission and to the public. Such notice shall be given by filing with the Commission and keeping open for public inspection new schedules stating plainly the change or changes to be made in the schedule or schedules then in force and the time when the change or changes will go into effect * * *." 52 Stat. 823, 15 U.S.C. § 717c(d), 15 U.S.C.A. § 717c(d).
13
"Whenever any such new schedule is filed the Commission shall have authority, either upon complaint of any State, municipality, or State commission, or upon its own initiative without complaint, at once, and if it so orders, without answer or formal pleading by the natural-gas company, but upon reasonable notice, to enter upon a hearing concerning the lawfulness of such rate, charge, classification, or service; and, pending such hearing and the decision thereon, the Commission, upon filing with such schedules and delivering to the natural-gas company affected thereby a statement in writing of its reasons for such suspension, may suspend the operation of such schedule and defer the use of such rate, charge, classification, or service, but not for a longer period than five months beyond the time when it would otherwise go into effect: Provided, That the Commission shall not have authority to suspend the rate, charge, classification, or service for the sale of natural gas for resale for industrial use only; and after full hearings, either completed before or after the rate, charge, classification, or service goes into effect, the Commission may make such orders with reference thereto as would be proper in a proceeding initiated after it had become effective. If the proceeding has not been concluded and an order made at the expiration of the suspension period, on motion of the natural-gas company making the filing, the proposed change of rate, charge, classification, or service shall go into effect. Where increased rates or charges are thus made effective, the Commission may, by order, require the natural-gas company to furnish a bond, to be approved by the Commission, to refund any amounts ordered by the Commission, to keep accurate accounts in detail of all amounts received by reason of such increase, specifying by whom and in whose behalf such amounts were paid, and, upon completion of the hearing and decision, to order such natural-gas company to refund, with interest, the portion of such increased rates or charges by its decision found not justified. At any hearing involving a rate or charge sought to be increased, the burden of proof to show that the increased rate or charge is just and reasonable shall be upon the natural-gas company, and the Commission shall give to the hearing and decision of such questions preference over other questions pending before it and decide the same as speedily as possible." 52 Stat. 823, 15 U.S.C. § 717c(e). 15 U.S.C.A. § 717c(e).
14
"Except in the cases governed by the provisos contained in subsection (c) of this section, a certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operation, sale, service, construction, extension, or acquisition covered by the application, if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Act and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied. The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require." Added by the Act of February 7, 1942, 567 Stat. 84, 15 U.S.C. § 717f(e), 15 U.S.C.A. § 717f(e).
15
"No natural-gas company or person which will be a natural-gas company upon completion of any proposed construction or extension shall engage in the transportation or sale of natural gas, subject to the jurisdiction of the Commission, or undertake the construction or extension of any facilities therefor, or acquire or operate any such facilities or extensions thereof, unless there is in force with respect to such natural-gas company a certificate of public convenience and necessity issued by the Commission authorizing such acts or operations: Provided, however, That if any such natural-gas company or predecessor in interest was bona fide engaged in transportation or sale of natural gas, subject to the jurisdiction of the Commission, on the effective date of this amendatory Act, over the route or routes or within the area for which application is made and has so operated since that time, the Commission shall issue such certificate without requiring further proof that public convenience and necessity will be served by such operation, and without further proceedings, if application for such certificate is made to the Commission within ninety days after February 7, 1942. Pending the determination of any such application, the continuance of such operation shall be lawful.
"In all other cases the Commission shall set the matter for hearing and shall give such reasonable notice of the hearing thereon to all interested persons as in its judgment may be necessary under rules and regulations to be prescribed by the Commission; and the application shall be decided in accordance with the procedure provided in subsection (e) of this section and such certificate shall be issued or denied accordingly: Provided, however, That the Commission may issue a temporary certificate in cases of emergency, to assure maintenance of adequate service or to serve particular customers, without notice or hearing, pending the determination of an application for a certificate, and may by regulation exempt from the requirements of this section temporary acts or operations for which the issuance of a certificate will not be required in the public interest." Added by the Act of February 7, 1942, 56 Stat. 83, 15 U.S.C. § 717f(c), 15 U.S.C.A. § 717f(c).
16
Not only does § 4(c), note 10, supra, contain a reference to "services" in a context where the antecedent must be "transportation or sale," but it recognizes that a "contract" may 'affect or relate to" such services.
17
It will be noted that § 7(b) does not refer to the abandonment of the continuation of sales, but rather to the abandonment of "services." See note 8, supra. Accordingly, if petitioner was correct in saying that its contract did not involve a "service," it would be difficult to see the applicability of the abandonment provision even during the term of the contract, when petitioner concedes it is applicable.
18
In fact, as to this contention, the examiner summarized the effect of petitioner's position by saying that it amounted to a declaration that petitioner "would prefer not to e subject to regulation." 19 F.P.C. 618, 635.
19
One Court of Appeals has described the granting of a permanent certificate upon an application for a limited one as a conditional certificate, but its discussion would appear to negate the inference that it meant a condition in the ordinary sense of one attached by authority of the last sentence of § 7(e). See Sunray Mid-Continent Oil Co. v. Federal Power Comm., 10 Cir., 239 F.2d 97, 99, note 3, reversed on other grounds 353 U.S. 944, 77 S.Ct. 792, 1 L.Ed.2d 794. The Commission's order here rested alternatively on the conditioning power, and on the ground we have supported above. 19 F.P.C., at 620. Once the power to grant a permanent certificate under the general provisions of § 7(e) is established, resort to the conditioning power is superfluous.
20
Commissioners Manly, Draper, Scott, and Seavey, who signed the decision, were all on the Commission at the time of the passage of the 1938 Act.
21
See, e.g., Armour Packing Co. v. United States, 209 U.S. 56, 80-82, 28 S.Ct. 428, 435-436, 52 L.Ed. 681.
22
"No objection to the order of the Commission shall be considered by the court unless such objection shall have been urged before the Commission in the application for rehearing unless there is reasonable ground for failure so to do." Section 19(b), 52 Stat. 831, as amended, 15 U.S.C. § 717r(b), 15 U.S.C.A. § 717r(b). Petitioner did not comply with this provision.
23
Petitioner makes an argument based on the limitations found in a proviso to § 7(a) of the Act, the Commission's authority to require the extension of transportation facilities and the sale of gas to local distributors. 52 Stat. 824, 15 U.S.C. § 717f(a), 15 U.S.C.A. § 717f(a). But the Commission's order in no way relied on § 7(a), and accordingly this argument of petitioner must be rejected.
24
Primary reliance is put on Transwestern Pipeline Co., 22 F.P.C. 391, 395-396, and Trunkline Gas Co., 21 F.P.C. 704, 709, where the Commission certificated pipeline companies despite the fact that their presently established gas reserves were shown to have a deliverability life of about 13 years.
25
It might be observed that in these cases the Commission issued certificates without time limitations. Thus if the companies, failing to find new sources of gas supply, desired to abandon service because of a depletion of supply, they would have to make proof thereof before the Commission, under § 7(b). The Commission thus, even though there may be physical problems beyond its control, kept legal control over the continuation of service by the applicants.
| 78
|
364 U.S. 299
81 S.Ct. 268
5 L.Ed.2d 90
DAYTON RUBBER COMPANY, petitioner,v.CORDOVAN ASSOCIATES, INCORPORATED.
No. 324.
Supreme Court of the United States
October 24, 1960
Philip C. Ebeling and James E. Corkey, for petitioner.
Richard W. Galiher, for respondent.
PER CURIAM.
1
On petition for writ of certiorari to the United States Court of Appeals for the Sixth Circuit. Petition for writ of certiorari granted. On writ of certiorari, judgment vacated and case remanded for consideration in light of Commissioner of Internal Revenue v. Duberstein, 363 U.S. 278, 291, 80 S.Ct. 1190, 4 L.Ed.2d 1218.
2
Mr. Justice BLACK dissents.
| 1112
|
364 U.S. 301
81 S.Ct. 1
5 L.Ed.2d 1
UNITED STATES, Appellant,v.JOHN HANCOCK MUTUAL LIFE INSURANCE CO., George Hetzel and Grace Marie Hetzel.
No. 18.
Argued Oct. 13, 1960.
Decided Nov. 7, 1960.
Mr. George C. Doub, Washington, D.C., for appellant.
Mr. Harry L. Hobson, Wichita, Kan., for appellees.
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
The issue in this case is whether the United States, as the second mortgagee of real estate judicially foreclosed in a proceeding to which the United States was made a party under 28 U.S.C. § 2410, 28 U.S.C.A. § 2410,1 can redeem within one year from the date of sale pursuant to 28 U.S.C. § 2410(c), 28 U.S.C.A. § 2410(c), despite a conflicting state statute giving the mortgagor the exclusive right to redeem within that period.
2
The facts are not in dispute and, insofar as here pertinent, may be summarized as follows. Appellee John Hancock Mutual Life Insurance Co. held a note for $25,000, secured by a mortgage on certain Kansas real estate. The note was in default and the insurance company instituted proceedings in the District Court of Edwards County, Kansas, seeking a declaration that its mortgage constituted a first lien on the property and asking foreclosure to satisfy this lien. An agency of the United States, the Farmers' Home Administration, held four notes executed by the mortgagors against whom the insurance company was proceeding and one of these notes, in the face amount of $10,565, was secured by a mortgage on the property securing appellee's note. It is undisputed that the United States' secured note was junior in priority to that held by appellee. However, under Kansas law, a senior lienor must join junior lienors in the foreclosure proceeding in order to cut off the junior liens. Motor Equipment Co. v. Winters, 146 Kan. 127, 69 P.2d 23. And the only way in which the United States can be joined in its capacity as junior lienor is pursuant to the terms of 28 U.S.C. § 2410, 28 U.S.C.A. § 2410, since the United States has not otherwise waived sovereign immunity in this type of situation. Consequently, appellee insurance company joined the United States and the United States cross petitioned for an adjudication that it held a second lien on the property, inferior only to appellee's lien, in the amount owed on all four notes. The Kansas District Court held that appellee enjoyed a first lien entitling it to a judgment of $26,944.78 and that the United States held a second lien by virtue of its secured note, entitling it to $10,402.61.2 The court ordered both liens foreclosed. At the foreclosure sale, the insurance company bought in the property in the amount of its own judgment. The United States did not bid and the sale was confirmed by the District Court on February 5, 1958. Four months later—on June 5, 1958—the United States instituted proceedings to redeem the property pursuant to the terms of 28 U.S.C. § 2410(c), 28 U.S.C.A. § 2410(c). This section specifies that, when the United States is joined in a foreclosure proceeding under § 2410 in particular § 2410(a)—and a sale is held to satisfy a lien prior to that of the United States, 'the United States shall have one year from the date of sale within which to redeem.' Although the United States satisfied the procedural requirements of Kansas law, Kan.Gen.Stat., 1949, § 60—3451, its tender was refused and, consequently, it moved the court to compel the clerk to issue it a redemption certificate. The District Court denied relief and the Kansas Supreme Court affirmed,3 holding that the United States' action was barred by the provisions of state law granting the mortgagor the exclusive right to redeem his property during a period of twelve months following the date of a foreclosure sale.
3
The pertinent Kansas law provides that the mortgagor shall have the exclusive right of redemption for twelve months following the date of sale; thereafter, if the mortgagor has not redeemed, the lien creditors enjoy a three-month period during which they, or the mortgagor, may redeem.4 Kan.Gen.Stat., 1949, § 60—3440. If the mortgagor redeems at any time, all redemption rights are cut off. Sigler v. Phares, 105 Kan. 116, 181 P. 628, 5 A.L.R. 141. In this case, the mortgagors redeemed within twelve months of the date of sale but subsequent to the attempt of the United States to redeem.
4
The narrow question for our decision is whether that part of § 2410(c) which grants the United States a right to redeem applies to the present situation. If it does, then the inconsistent provisions of state law must fall under the Supremacy Clause of the United States Constitution.5 U.S.Const. Art. VI.
5
On analysis the question is not only narrow but also susceptible to rapid solution, since the plain language of § 2410(c) reveals no impediment to its applicability once resort is had to § 2410(a). Moreover, an examination of the legislative history of § 2410 shows that Congress considered the redemption provision of § 2410(c) an important and integral feature of § 2410. The pertinent excerpts reveal that Congress feared a situation where the United States, as junior lienor, would find its lien dissolved pursuant to § 2410 without having had a chance to protect its right to any amount the foreclosed property might be worth in excess of the senior lien.6 As Congress recognized, one method of protection for junior lienors is to bid competitively at the foreclosure sale, thereby preventing property worth more than the amount due on the senior lien from being sold at a discount. However, it was noted that, barring special circumstances, the United States could not pursue this procedure unless it first secured an appropriation from Congress and, thus, the one-year period of redemption was inserted to afford the United States sufficient time to secure an appropriation and protect its interests. The protective nature of the redemption proviso in § 2410(c) was recognized in United States v. Brosnan, 363 U.S. 237, 246, 80 S.Ct. 1108, 1114, where this Court stated that 'the Government is guaranteed a one-year right to redeem if the plaintiff proceeds under § 2410 * * *.' This proposition is in line with the well-settled rule that Congress may impose conditions upon a waiver of the Government's immunity from suit. See e.g., Soriano v. United States, 352 U.S. 270, 276, 77 S.Ct. 269, 273, 1 L.Ed.2d 306, where we added that these protective conditions 'must be strictly observed and exceptions thereto are not to be implied.'
6
Appellees concede, as they must, that § 2410 was mandatorily applicable to the present situation since Kansas law required joinder of the United States and the United States can only be joined pursuant to § 2410. However, they would have us find a superseding congressional intent to afford the United States a right of redemption only when no such right is granted under state law; when some privileges of redemption are given by the State to junior lienors, although of lessor magnitude than that provided in § 2410(c), then the federal right is no longer pertinent. The short answer to this contention is that no indication of such a limitation appears in the body of the statute—which specifies that the United States 'shall' have one year to redeem—or in its legislative history. See Soriano v. United States, supra.
7
Appellees also press upon us the fact that the federal agency here concerned, the Farmers' Home Administration, could have protected its junior lien without insisting on a right to redeem under § 2410, since 7 U.S.C. (1952 ed.) § 1025, 7 U.S.C.A. § 1025 authorizes the Secretary of Agriculture, who supervises the Farmers' Home Administration, to bid at foreclosure sales.7 But the significance of this section and its effect on § 2410 is not clear. Concededly, if there were some indication in § 1025 that the power of the Secretary of Agriculture is limited to bidding at the foreclosure sale, then we would be faced with a problem of resolving the two statutes. Cf. United States v. Stewart, 311 U.S. 60, 61 S.Ct. 102, 85 L.Ed. 40. However, there is no conflict, either express or implied, between § 1025 and § 2410. In effect, appellees would have us read § 2410 as authorizing redemption 'except where another federal statute authorizes the particular agency concerned to bid at foreclosure sales.' The only support for such an interpretation is the fact that some federal agencies are authorized to bid at foreclosure sales. We think that the logical connection is insufficient to support such a violent graft on the language of the statute.
8
Appellees advance several other contentions which require only brief discussion. They argue citing Guaranty Trust Co. of New York v. United States, 304 U.S. 126, 58 S.Ct. 785, 82 L.Ed. 1224, that the United States, by seeking affirmative relief in a state court, subjects itself to all the incidents of state law which govern other suitors. See Hart & Wechsler, The Federal Courts and the Federal System 1112. However, we need go no farther than the Guaranty Trust case to uncover one of the several special rules which favor the United States in preference to other plaintiffs the rule that the United States is not subject to local statutes of limitations. See United States v. Summerlin, 310 U.S. 414, 60 S.Ct. 1019, 84 L.Ed. 1283. Other such rules, applicable in both federal and state courts, can be found in 28 U.S.C. §§ 2404, 2405, 2407, 2408, 2413, 28 U.S.C.A. §§ 2404, 2405, 2407, 2408, 2413. Furthermore, the present proceedings were not initiated by the United States but by appellee insurance company when it joined the United States pursuant to § 2410.
9
Appellees also point to the first sentence of § 2410(c)—'(a) judicial sale in such action or suit shall have the same effect respecting the discharge of the property from liens * * * held by the United States as may be provided * * * by the local law of the place where the property is situated.' The contention is that this sentence governs all the succeeding language in § 2410(c). However, this construction would render the succeeding language nugatory. The more rational interpretation is that the propositions following the first sentence in § 2410(c) were designed as qualifications on the first sentence. This thesis gains force from the fact that the sentence setting out the United States' redemption privilege in § 2410(c) previously was preceded by the words 'And provided further.' 46 Stat. 1529. This phrase was eliminated in the 1948 revision of the Federal Judicial Code but the Reviser's Note indicates that no substantive changes were intended. 28 U.S.C.A. § 2410.
10
Therefore, the judgment of the Supreme Court of Kansas must be reversed and the case remanded with instructions to order the issuance of a certificate of redemption to the United States in accordance with its tender made in the District Court. However, in case the nortgagors wish to redeem in turn from the United States a procedure in which the United States has acquiesced—we intimate no opinion as to the amount due the United States. The question whether the United States is entitled to payment of its claims in full upon redemption by the mortgagors or only to such debts as have been declared liens by the state courts is one to be decided according to Kansas law. Cf. First National Bank & Trust Co. v. MacGarvie, 22 N.J. 539, 547, 126 A.2d 880, 885.
11
Reversed and remanded.
1
'Actions affecting property on which United States has lien.
'(a) Under the conditions prescribed in this section and section 1444 of this title for the protection of the United States, the United States may be named a party in any civil action or suit in any district court, * * * or in any State court having jurisdiction of the subject matter, to quiet title to or for the foreclosure of a mortgage or other lien upon real or personal property on which the United States has or claims a mortgage or other lien.
'(b) The complaint shall set forth with particularity the nature of the interest or lien of the United States. In actions in the
State courts service upon the United States shall be made by serving the process of the court with a copy of the complaint upon the United States attorney for the district in which the action is brought or upon an assistant United States attorney or clerical employee designated by the United States attorney in writing filed with the clerk of the court in which the action is brought and by sending copies of the process and complaint, by registered mail, to the Attorney General of the United States at Washington, District of Columbia. In such actions the United States may appear and answer, plead or demur within sixty days after such service or such further time as the court may allow.
'(c) A judicial sale in such action or suit shall have the same effect respecting the discharge of the property from liens and encumbrances held by the United States as may be provided with respect to such matters by the local law of the place where the property is situated. A sale to satisfy a lien inferior to one of the United States, shall be made subject to and without disturbing the lien of the United States, unless the United States consents that the property may be sold free of its lien and the proceeds divided as the parties may be entitled. Where a sale of real estate is made to satisfy a lien prior to that of the United States, the United States shall have one year from the date of sale within which to redeem. In any case where the debt owing the United States is due, the United States may ask, by way of affirmative relief, for the foreclosure of its own lien and where property is sold to satisfy a first lien held by the United States, the United States may bid at the sale such sum, not exceeding the amount of its claim with expenses of sale, as may be directed by the head of the department or agency of the United States which has charge of the administration of the laws in respect of which the claim of the United States arises.'
2
Judgment for $2,642.39 was entered in favor of the United States on the three unsecured notes. While the United States sought to include these notes in its second lien on the property, the court decreed that this lien extended only to the amount of the secured note.
3
John Hancock Mutual Life Ins. Co. v. Hetzel, 185 Kan. 274, 341 P.2d 1002.
4
From the fifteenth to and including the eighteenth month, the mortgagor resumes enjoyment of the exclusive right to redeem. Kan.Gen.Stat., 1949, § 60—3439. Upon the expiration of eighteen months without redemption, the purchaser's certificate of title becomes absolute. Kan.Gen.Stat., 1949, § 60—3438.
5
Appellees argue briefly that Congress does not have the power to establish rules governing state-created property rights, citing United States v. Bess, 357 U.S. 51, 78 S.Ct. 1054, 2 L.Ed.2d 1135. This contention was raised and rejected in United States v. Brosnan, 363 U.S. 237, 240—241, 80 S.Ct. 1108, 1110 1111, 4 L.Ed.2d 1192.
6
Initial concern was expressed by Representative Bloom in a colloquy reported at 72 Cong.Rec. 3120—3121. Despite the apprehension expressed in this exchange, the bill that eventually became § 2410 passed the House with no provision to protect the United States' rights as junior lienor. The Senate, however, added a new section authorizing the United States to bid at the foreclosure sale and a delay of the sale until the completion of the next succeeding session of Congress so as to allow the Government time to obtain a congressional appropriation with which to make its bid. S.Rep. No. 351, 71st Cong., 2d Sess. 1—2.
This addition was stricken by the Conference Committee and the redemption provision now in § 2410(c) was substituted. In rejecting the Senate proposal for protecting the rights of the United States as a junior lien holder, the Conference Committee concluded that a federal redemption provision was a more effective method for protecting those rights. It stated:
'The Senate amendment contains a clause allowing the court to stay proceedings on sale until the expiration of the next session of Congress. This was no doubt intended to allow Congress to appropriate money to enable the United States, if a junior lien holder, to bid enough at the sale to take care of prior liens and thus protect its own. In place of that the substitute bill provides that if a junior lien holder, the United States shall have a year in which to redeem. That does away with any necessity for a delay of sale.' H.R.Conf.Rep. No. 2722, 71st Cong., 3d Sess. 4.
7
'The Secretary is authorized and empowered to bid for and purchase at any foreclosure or other sale, or otherwise to acquire property pledged or mortgaged or conveyed to secure any loan or other indebtedness owing to or acquired by the Secretary under sections 1001—1005d, 1007, and 1008—1029 of this title; to accept title to any property so purchased or acquired; to operate for a period not in excess of one year from the date of acquisition, or lease such property for such period as may be deemed necessary to protect the investment therein; and to sell or otherwise dispose of such property in a manner consistent with the provisions of section 1017 of this title.'
| 1112
|
364 U.S. 310
81 S.Ct. 13
5 L.Ed.2d 8
UNITED STATES of America, Petitioner,v.E. B. HOUGHAM et al.
No. 24.
Argued Oct. 18, 1960.
Decided Nov. 7, 1960.
Leave to File Petition for Rehearing
Denied Jan. 9, 1961.
See 364 U.S. 938, 81 S.Ct. 376.
Mr. Wayne G. Barnett, Washington, D.C., for petitioner.
Mr. Calvin H. Conron, Jr., Bakersfield, Cal., for respondents.
Mr. Justice BLACK delivered the opinion of the Court.
1
Section 16 of the Surplus Property Act of 19441 gave priority preferences to veterans in the purchase of surplus war materials. 58 Stat. 765. Section 262 authorized the United States to recover damages against any person who obtains such property from the Government by 'fraudulent trick, scheme, or device * * *.' The complaint in this case charged that respondent Hougham, a nonveteran, combined with the other respondents, who are veterans, and obtained for his own business purposes hundreds of items of surplus property, including trucks, trailers and other equipment, by fraudulent use of the veteran respondents' priority certificates. After hearings, the District Court found respondents guilty of fraud as charged and awarded damages in the amount of $8,000. Both sides appealed. The Court of Appeals affirmed, rejecting both the Government's contention that the damages awarded were inadequate and the respondents' contentions that the finding of fraud was clearly erroneous and that the claims were barred by the statute of limitations. 9 Cir., 270 F.2d 290. Because the case raises important questions concerning the interpretation and application of the Surplus Property Act, we granted the Government's petition for certiorari. 361 U.S. 958, 80 S.Ct. 590, 4 L.Ed.2d 541.
2
The respondents first contend that the entire controversy here has been settled, is therefore moot, and that the Government is estopped from further pressing claims against them. This contention rests upon the fact—set out in respondents' brief and not disputed by the Government—that after the trial court judgment was entered and before it was affirmed by the Court of Appeals, the Government accepted from respondents promissory notes totalling $8,000, the amount of the trial court judgment. The contention is that this fact alone renders the case moot or at least creates some sort of estoppel against the Government. We disagree. It is a generally accepted rule of law that where a judgment is appealed on the ground that the damages awarded are inadequate, acceptance of payment of the amount of the unsatisfactory judgment does not, standing alone, amount to an accord and satisfaction of the entire claim. See, for example, Embry v. Palmer, 107 U.S. 3, 2 S.Ct. 25, 27 L.Ed. 346; Erwin v. Lowry, 7 How. 172, 183—184, 12 L.Ed. 655. This case provides a perfect example of the good sense underlying that rule. For here it was the respondents themselves who proposed payment of the $8,000, asserting expressly as their purpose in so doing the obtaining of a 'Full Release of Judgment Liens' filed in the Counties of Los Angeles and Kern. The Government did nothing more in the entire transaction than accept the notes and execute the requested release. Since that release was expressly denominated only as a 'Full Release of Judgment Liens' for the Counties of Los Angeles and Kern, it simply is not and cannot properly be interpreted to constitute a full release of all the Government's claims against respondents. Moreover, since the transfer of the notes occurred prior to the decision of the Court of Appeals, it is clear that neither of the parties regarded that transfer as an accord and satisfaction of the entire controversy for both pursued their appeals in that court. Thus respondents' contention here is totally inconsistent with their position in the Court of Appeals where they sought to avoid all liability to the Government, including liability for the $8,000 they had already paid. For that position must necessarily have been predicated upon the view that the payment was without prejudice to the rights of either party as those rights might come to be established by subsequent judicial decree. Under such circumstances, the contention that the Government has lost its right to press its claim for the full amount of damages it believes due is wholly untenable.
3
We find it unnecessary to discuss at length respondents' second contention—that the claims asserted by the Government are barred by the statute of limitations. It is sufficient to say that the courts below were entirely correct in rejecting that contention for, resting as it does upon the assumption that recoveries under § 26(b) are penalties, it is inconsistent with our holding in Rex Trailer Co. v. United States, 350 U.S. 148, 76 S.Ct. 219, 100 L.Ed. 149.
4
We therefore proceed to the principal controversy—the question of the adequacy of the damages awarded to the Government. Section 26(b) provides in relevant part that those who obtain property by the kind of fraud established here:
5
'(1) shall pay to the United States the sum of $2,000 for each such act, and double the amount of any damage which the United States may have sustained by reason thereof, together with the costs of suit; or
6
'(2) shall, if the United States shall so elect, pay to the United States, as liquidated damages, a sum equal to twice the consideration agreed to be given by such person to the United States or any Government agency; or '(3) shall, if the United States shall so elect, restore to the United States the property thus secured and obtained and the United States shall retain as liquidated damages any consideration given to the United States or any Government agency for such property.'
7
In its complaint as originally filed, the Government claimed recovery as authorized by § 26(b)(1)—$2,000 for each fraudulent act plus double the amount of any actual damages. Subsequently, the Government attempted to file a First Amended Complaint claiming liquidated damages under § 26(b)(2). Upon indication of the trial judge that the claim in the original complaint under § 26(b)(1) amounted to an irrevocable election of remedies, but without any formal ruling to that effect, the Government withdrew the First Amended Complaint and filed a Second Amended Complaint in which it reverted to its original claim under 26(b)(1). Still later, however, following pretrial proceedings under Rule 16 of the Federal Rules of Civil Procedure, 28 U.S.C.A., the district judge, with the approval of counsel for both parties, entered a pretrial conference order which provided, '(T)his order shall supplement the pleadings and govern the course of the trial of this cause, unless modified to prevent manifest injustice.' And the order expressly enumerated the 'issues of law' that remained 'to be litigated upon the trial.' One of the issues so reserved was the legal correctness of the Government's argument that it was entitled to recover 'double the amount of the sales price of the vehicles described in the Second Amended Complaint,' that it was 'entitled to make its election (as between § 26(b)(1) and § 26(b)(2)) at any time prior to judgment' and that it did then elect 'in the event of judgment in its favor, to receive as liquidated damages a sum equal to twice the consideration agreed to be given to the United States.' The District Court ultimately decided this legal issue against the Government, holding that the original complaint constituted an irrevocable election, and proceeded to award damages of $8,000 under § 26(b) (1). The Court of Appeals affirmed this judgment on a different ground. It held that the refusal of the District Court to permit recovery under § 26(b)(2) was within its power to determine the appropriate remedy under § 26(b), asserting that no issue as to election of remedies was even involved in the case. 270 F.2d at page 293.
8
The Government contends that denial of recovery under § 26(b)(2) cannot be justified on either of the theories adopted below. Respondents contend that the Government waived its right to urge this contention by voluntarily proceeding to judgment on the Second Amended Complaint. This contention is predicated upon the failure of the Government to get a formal ruling on its First Amended Complaint before withdrawing it and filing the Second Amended Complaint. But, as shown above, the pretrial order and the conclusions of law of the District Court both show that the Government urged its right to change its election up to the time judgment was rendered. That pretrial order, as authorized by Rule 16, conclusively established the issues of fact and law in the case and declared that the issues so established should 'supplement the pleadings and govern the course of the trial * * *.' One of these supplementary issues was the Government's contention that it was entitled to recover under § 26(b)(2), rather than under § 26(b)(1) as claimed in the Second Amended Complaint. Thus the pretrial order changed the claim in that complaint from § 26(b)(1) to § 26(b)(2) insofar as the Government had the power to change its election, and posed an issue which required adjudication by the District Court. That such was the effect of the order is clear from the language of Rule 16 which provides that the court, after pretrial conference, 'shall make an order which recites * * * the amendments allowed to the pleadings * * * and such order when entered controls the subsequent course of the action, unless modified at the trial to prevent manifest injustice.' Since the pretrial order here reserved the legal question as to the Government's right to change its election and since the court expressly decided that question against the Government,* the question most certainly was not waived and must here be determined.
9
Thus, we come to the question whether the courts below were correct in holding that the Government was not entitled to damages under § 26(b)(2). With respect to the theory adopted by the District Court that the Government's original complaint constituted an irrevocable election of remedies, we can find nothing either in the language of § 26(b) or in its legislative history which lends the slightest support to such a construction. This fact leads naturally to the conclusion that the ordinary liberal rules governing the amendment of pleadings are applicable. The applicable rule is Rule 15 of the Federal Rules of Civil Procedure, which was designed to facilitate the amendment of pleadings except where prejudice to the opposing party would result. Despite respondents' argument to the contrary, we see this case as one where there plainly was no such prejudice. In such a situation, acceptance of respondents' contention on this point would subvert the basic purpose of the Rule. 'The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits.' Conley v. Gibson, 355 U.S. 41, 48, 78 S.Ct. 99, 103, 2 L.Ed.2d 80. We therefore conclude that under the circumstances of this case the Government had a right to amend its pleadings and that the District Court erred in refusing to permit such amendment.
10
The alternative theory of the Court of Appeals appears, upon examination, to be equally untenable. The Court of Appeals interpreted § 26(b) as placing power in the District Court to determine, according to the evidence presented in any particular case, which of the three subsections would be most appropriate and to require the Government to accept judgment under that subsection. That interpretation collides with the express language of § 26(b) which provides for recovery under any one of the three subsections 'if the United States shall so elect.' (Emphasis supplied.) Since the language of the section is conclusive on this point, the theory adopted by the Court of Appeals must also be rejected.
11
The respondents' final contention is that in any event they are entitled to a new trial. Obviously, there need be no new trial on the fraud issue. But respondents also urge that there is no support in the record for a judgment fixing the Government's recovery under § 26(b)(2) and 'twice the consideration agreed to be given' for the vehicles. There was no consideration 'agreed to be given,' the argument proceeds, because all the transactions involved cash sales at a price fixed by the Government. This argument, while ingenious, is not sound. Cash sales, like others, must follow an agreement of the parties with regard to consideration 'to be given.' Respondents' contention to the contrary would, if accepted, allow any purchaser from the Government to effectively avoid liability under § 26(b)(2) simply by being careful to make all of its fraudulent dealings in cash. Plainly, however, the Government suffers just as much from a fraudulent cash sale as from a fraudulent credit sale. An interpretation of § 26(b)(2) which allows recovery for the one but not for the other cannot be accepted. The respondents' contention for a new trial must be rejected.
12
The judgment is therefore reversed and the cause remanded to the District Court with directions to enter judgment for the United States under § 26(b)(2).
13
It is so ordered.
14
Judgment reversed and cause remanded to the District Court with directions.
15
Mr. Justice WHITTAKER, with whom Mr. Justice DOUGLAS joins, dissenting.
16
With all deference, I cannot agree and must dissent for two reasons.
17
First. One may not appeal from a money judgment that he has collected and satisfied. Here, as the Court recognizes, after the judgment was entered the Government accepted promissory notes from respondents in payment of the judgment. I think, with, I respectfully submit, the support of all the relevant cases—which are legion—that the Government, having recovered a judgment for $8,000, over the serious protests of respondents that they owed it nothing, and having, with knowledge of all the facts, accepted the benefits of the judgment by collecting and satisfying it, cannot thereafter prosecute an appeal to reverse it.
18
The Court relies on Embry v. Palmer, 107 U.S. 3, 2 S.Ct. 25, 27 L.Ed. 346, and Erwin v. Lowry, 7 How. 172, 184, 12 L.Ed. 655, for its conclusion that the Government may prosecute this appeal from the judgment notwithstanding it has satisfied it. But, with deference, I must say those cases do not support the Court's conclusion. The issue in the Embry case was whether Embry was entitled to $9,185.18, as he claimed, or to only $2,296.29, as the respondents contended and admitted to be due. The court awarded recovery of only the latter sum which Embry accepted. He afterwards appealed from the judgment, and it was held that he might do so for, as the court pointed out: 'The amount awarded, paid, and accepted constitutes no part of what is in controversy.' Id., 107 U.S. at page 8, 2 S.Ct. at page 29. How different from the situation here! That case was like the later one of Reynes v. Dumont, 130 U.S. 354, 9 S.Ct. 486, 32 L.Ed. 934, where the appellants received so many of certain bonds as were not taken to satisfy the judgment from which they appealed. It was contended that their action in doing this so completely accepted the judgment that they could not appeal. In rejecting that contention, this Court said:
19
'The acceptance by appellants of what was confessedly theirs cannot be construed into an admission that the decree they seek to reverse was not erroneous, nor does it take from appellees anything, on the reversal of the decree, to which they would otherwise be entitled. Embry v. Palmer, 107 U.S. 3, 8, 2 S.Ct. 25 (27 L.Ed. 346).' 130 U.S. at page 394, 9 S.Ct. at page 497.
20
Those cases fall within a well-recognized but very narrow exception to the general rule that is applicable here. Similarly, the Erwin case did not involve the collection and satisfaction of a judgment. Rather, it involved only the performance by Erwin of a minor collateral 'condition imposed upon him before he (could) have the fruits of the decree' in equity. Id., 7 How. at page 184. Like Embry, that case does not at all rule the question here presented.
21
The case in this Court that most nearly rules our question is Gilfillan v. McKee, 159 U.S. 303, 16 S.Ct. 6, 40 L.Ed. 161. There appellant claimed an interest in a special fund of $7,070 and also claimed to be entitled jointly to participate in a general fund of $147,057.63. A portion of the special fund was awarded to him in one division of the judgment, but another division of the judgment denied to him any right to participate in the general fund. He appealed, and was met with the claim that by accepting the award of a part of the special fund, he had taken under the judgment and therefore could not appeal from it. Recognizing that one cannot appeal from a judgment that he has collected and satisfied, the Court said: '* * * the acceptance of the whole or a part of a particular amount awarded to a defendant might, perhaps, operate to estop him from insisting upon an appeal.' But the court found that 'there were practically two decrees in this case, one applicable to the special fund, which, in the bill, the subsequent pleadings, and in the decree, had been kept as a distinct and separate matter, a portion of which fund was awarded to McPherson; and the other applicable to the general fund in which McPherson had been denied any participation whatever.' And the court held that 'his acceptance of a share in the special fund did not operate as a waiver of his appeal from the other part of the decree disposing of the general fund.' Id., 159 U.S. at page 311, 16 S.Ct. at page 9.
22
The Fourth Circuit has flatly ruled this question in Finefrock v. Kenova Mine Car Co., 37 F.2d 310, among other cases. There the appellant accepted payment of a judgment for an amount substantially less than he claimed and afterwards appealed. In holding that he could not appeal from a judgment that he had collected and satisfied, the court said at page 314:
23
'We do not find it necessary to enter into a discussion of these questions in view of the acceptance by the appellant of the amount allowed him in full satisfaction and discharge of the judgment. He contends that there is no inconsistency in his acceptance of the money and the prosecution of the appeal, relying on such decisions as Embry v. Palmer, 107 U.S.
24
3, 8, 2 S.Ct. 25, 27 L.Ed. 346; McFarland v. Hurley (C.C.A.) 286 F. 365; Carson Lumber Co. v. St. Louis, etc., Railroad Co. (C.C.A.) 209 F. 191, 193; Snow v. Hazlewood (C.C.A.) 179 F. 182. But it is obvious that he falls within the general rule and not within the exceptions thereto as set out in Carson Lumber Co. v. St. Louis, etc., Railroad Co., supra.'1
25
The Third Circuit has likewise flatly ruled the question in the same way, Smith v. Morris, 69 F.2d 3; so has the Fifth Circuit, Kaiser v. Standard Oil Co., 89 F.2d 58; White & Yarborough v. Dailey, 228 F.2d 836, and the Eighth Circuit, Carson Lumber Co. v. St. Louis & S.F.R. Co., 209 F. 191. Literally dozens of cases by the courts of last resort in almost all the States in the Union have so held.2
26
I, therefore, respectfully submit that the settled law requires the conclusion that the Government, having collected and satisfied this judgment with knowledge of all the facts, cannot prosecute this appeal to reverse it. This appeal should, therefore, be dismissed.
27
Second. At all events, the Government is not entitled to a reversal of the judgment, because it went to trial, and proceeded all the way to judgment, upon a complaint that asked damages only under subdivision (1) of § 26(b), not under subdivision (2) of that section. The procedural chronology was as follows. In its original complaint the Government sought damages 'of $2,000 for each such act,' under subdivision (1). It thereafter filed a motion for leave to file a First Amended Complaint asking damages in 'a sum equal to twice the consideration agreed to be given,' under subdivision (2). But it did not press that motion to decision. On the contrary, the record shows that the Government formally withdrew that motion and instead filed a Second Amended Complaint, again, as in its original complaint, asking damages in 'the sum of $2,000 for each such act,' under subdivision (1). It was upon that complaint that it went to trial and all the way to judgment.
28
Of course, under the express terms of § 26(b), the Government had the right to elect which of the three allowable measures of recovery it would seek, but surely it is possible for the Government at some stage irrevocably to make that election. I agree it did not irrevocably do so by the filing of the original complaint, but I insist that it did do so by filing the Second Amended Complaint and going to trial and all the way to judgment on it. If that conduct did not effect the election, I would ask what could?
29
It is true that a pretrial conference was held and a pretrial order was entered, under Rule 16 of Fed.Rules Civ.Proc. One of the objects authorized by that Rule is '(t)he simplification of the issues,' and another is to consider 'The necessity or desirability of amendments to the pleadings.' The order recited that one of the issues of fact to be tried was whether the 'defendants became and are liable to pay to the United States the sum of $2,000 for each act committed by them that (may be) determined by the court to be in violation of said statute'; and, under 'issues of law * * * to be litigated upon the trial,' the following appears:
30
'It is the contention of plaintiff that it is entitled to double the amount of the sales price of the vehicles described in the Second Amended Complaint * * *. Previously the Court has indicated that an irrevocable election has been made by the United States by virtue of the successive complaints on file. It is the contention of plaintiff that it is entitled to make its election at any time prior to judgment. Plaintiff elects, in the event of judgment in its favor, to receive as liquidated damages a sum equal to twice the consideration agreed to be given to the United States or federal agency involved. Plaintiff respectfully calls this to the attention of the Court so that the point may be preserved for purposes of appeal.' (Emphasis added.)
31
Of course, in simplifying the issues, the Court may, by the pretrial order, define the issues to be tried, but those issues must be within the pleadings. And amendments to the pleadings should be freely allowed as Rule 15 provides. But here the Government did not seek leave at the pretrial conference, or at any time after having voluntarily filed its Second Amended Complaint, to amend its pleading. It did not even unconditionally elect at the pretrial conference to proceed under subdivision (2) but only 'in the event of judgment in its favor.' Instead, it went all the way to trial, and to judgment, on the complaint that sought damages in 'the sum of $2,000 for each such act,' and it obtained a judgment on that basis. Surely, that conduct constituted an irrevocable election by the Government to recover damages in the measure claimed in its final complaint, and I think the Government is bound by it.
32
For the first of these reasons, I would dismiss the appeal, but inasmuch as the Court does not agree, I would, at the minimum, affirm the judgment on the ground that the Government irrevocably elected to recover the measure of damages that it recovered and hence is bound by that election.
1
Now 40 U.S.C.A. § 484.
2
Now 40 U.S.C.A. § 489.
*
The language of the trial judge on this point was unequivocal:
'This Court rules that the plaintiff United States can only receive liquidated damages under the provisions of Section 26(b)(2) if it elects to receive only such damages originally in the action; that since the United States sought damages under the provisions of Section 26(b)(1) in the original complaint, that such is an irrevocable election; that the plaintiff United States cannot thereafter amend its complaint to seek liquidated damages under the provisions of Section 26(b)(2), or otherwise elect to receive liquidated damages under the provisions of Section 26(b)(2), but that the United States is thereafter limited as the measure of its recovery for liquidated damages to those liquidated damages set forth in Section 26(b)(1).'
1
In Carson Lumber Co. v. St. Louis & S.F.R. Co., 8 Cir., 209 F. 191, at pages 193—194 the Court said:
'It is undoubtedly the general rule that a party who obtains the benefit of an order or judgment, and accepts the benefit or receives the advantage, shall be afterwards precluded from asking that the order or judgment be reviewed. Nevertheless, this rule is not absolute where the judgment or decree is not so indivisible that it must be sustained or reversed as a whole. It has no application to cases where the appellant is shown to be so absolutely entitled to the sum collected upon the judgment that the reversal of it will not affect his right to the amount accepted (Reynes v. Dumont, 130 U.S. 354—394, 9 Sup.Ct. 486, 32 L.Ed. 934), especially where there is not present conduct which is inconsistent with the claim of a right to reverse the judgment or decree, which it is sought to bring into review (Embry v. Palmer, 107 U.S. 3—8, 2 Sup.Ct. 25, 27 L.Ed. 346; Merriam v. Haas, 3 Wall. 687, 18 L.Ed. 29; United States v. Dashiel, a Wall. 688, 18 L.Ed. 268).'
2
Those interested will find many of those cases collected in the notes to 2 Am.Jur., Appeal and Error, § 214, where the authors have regarded the rule as so certain and universal as to permit them flatly to say: 'The general rule * * * is that a litigant who has, voluntarily and with knowledge of all the material facts, accepted the benefits of an order, decree, or judgment of a court, cannot afterwards take or prosecute an appeal or error proceeding to reverse it.'
| 1112
|
364 U.S. 325
81 S.Ct. 6
5 L.Ed.2d 20
Thomas MICHALIC, Petitioner,v.CLEVELAND TANKERS, INC.
No. 31.
Argued Oct. 20, 1960.
Decided Nov. 7, 1960.
Mr. Harvey Goldstein, Las Vegas, Nev., Mr. S. Eldridge Sampliner, Cleveland, Ohio, for petitioner.
Mr. Lucian Y. Ray, Cleveland, Ohio, for respondent.
Mr. Justice BRENNAN delivered the opinion of the Court.
1
The petitioner asks damages for personal injuries he allegedly sustained in a shipboard accident while a crew member aboard the respondent's Great Lakes vessel, the tanker Orion. His complaint alleges respondent's liability both for negligence under the Jones Act, 46 U.S.C. § 688, 46 U.S.C.A. § 688, and for unseaworthiness under the general maritime law;1 a claim for maintenance and cure is also alleged. The parties settled the claim for maintenance and cure at the trial, which was before a jury in the District Court for the Northern District of Ohio. Judgment was entered for the respondent on the unseaworthiness and Jones Act claims upon a verdict directed by the trial judge on the ground of insufficiency of the evidence. The Court of Appeals for the Sixth Circuit affirmed. 271 F.2d 194. We granted certiorari, 362 U.S. 909, 80 S.Ct. 661, 4 L.Ed.2d 618.
2
Michalic claims that in a shipboard accident on December 28, 1955, a two-and-one-half-pound wrench dropped on his left great toe. Michalic was afflicted with Buerger's disease when he joined the Orion three months earlier as a fireman in the engine room. We are informed by the testimony of one of the medical witnesses that Buerger's disease 'is a disease of unknown origin * * * it produces a narrowing of the blood supply going to the foot through the arteries, and it runs a very foreseeable course; it is slowly progressive in most cases and leads to progressive loss of blood supply to the extremities involving usually the legs'; for one afflicted with the disease to drop 'a hammer on his toe * * * is a very serious thing and frequently leads to amputation. * * * Because the circulation is already impaired and the wound will not heal properly, and any appreciable trauma will frequently lead to gangrene.'
3
Michalic did not report the accident at the time but continued working until January 6, 1956, a week later, when the vessel was laid up for the winter. Meanwhile he treated the toe every night after work in hot water and Epsom salts. He was at his home from January 6 to March 15 and used hot boric acid soaks 'practically every day.' He was called back to the Orion on March 15. On April 1, 1956, he reported to the Orion's captain that '(m)y leg was so bad, so painful, I couldn't take it no more * * *. I want a hospital ticket.' The captain gave him the ticket after filling out a report in which he stated that Michalic told him that on December 28, 1955, 'While working with pumpman in pumproom man said he dropped a wrench on his foot and his toe has been sore ever since.' This was the first notice respondent had of any accident.
4
At the hospital in April, a diagnosis was made of 'an infected left great toe nail and gangrene of the left great toe secondary to the Buerger's Disease.' During the spring three amputations were performed on the left leg. first the great left toe, next the left leg below the knee and then part of the leg above the knee. Medical experts, three on behalf of the petitioner and one for the respondent, differed whether, assuming that the wrench dropped on Michalic's left great toe on December 28, there was a causal connection between that trauma and the amputations. This plainly presented a question for the jury's determination. Sentilles v. Inter-Caribbean Corp., 361 U.S. 107, 80 S.Ct. 173, 4 A.L.R.2d 142, and we do not understand that the respondent contends otherwise.
5
The basic dispute between the parties is as to the sufficiency of the proofs to justify the jury's finding with reason that respondent furnished Michalic with a wrench which was not reasonably fit for its intended use. Here a distinction should be noticed between the unseaworthiness and Jones Act claims in this regard. The vessel's duty to furnish seamen with tools reasonably fit for their intended use is absolute, Mahnich v. Southern S.S. Co., 321 U.S. 96, 64 S.Ct. 455, 88 L.Ed. 561; Seas Shipping Co. v. Sieracki, 328 U.S. 85, 66 S.Ct. 872, 90 L.Ed. 1099; The Osceola, 189 U.S. 158, 23 S.Ct. 483, 47 L.Ed. 760; Cox v. Esso Shipping Co., 5 Cir., 247 F.2d 629; and this duty is completely independent of the owner's duty under the Jones Act to exercise reasonable care. Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 80 S.Ct. 926, 4 L.Ed.2d 941. The differences are stated in Cox v. Esso Shipping Co., supra:
6
'One is an absolute duty, the other is due care. Where * * * the ultimate issue (is) seaworthiness of the gear * * *. The owner has an absolute duty to furnish reasonably suitable appliances. If he does not, then no amount of due care or prudence excuses him, whether he knew, or could have known, of its deficiency at the outset or after use. In contrast, under the negligence concept, there is only a duty to use due care, i.e., reasonable prudence, to select and keep in order reasonably suitable appliances. Defects which would not have been known to a reasonably prudent person at the outset, or arose after use and which a reasonably prudent person ought not to have discovered would impose no liability.' 247 F.2d, at page 637.
7
Thus the question under Michalic's unseaworthiness claim is the single one as to the sufficiency of the proofs to raise a jury question whether the wrench furnished Michalic was a reasonably suitable appliance for the task he was assigned. To support the Jones Act claim, however, the evidence must also be sufficient to raise a jury question whether the respondent failed to exercise due care in furnishing a wrench which was not a reasonably suitable appliance.
8
The wrench dropped on Michalic's foot while he was using it to unscrew nuts from bolts on the casing of a centrifugal pump in the pumproom. He had been assigned this task by the pumpman after the first assistant engineer sent him from the engine room to the pumproom to help ready the pumps for the vessel's winter lay-up. There were about twenty-five 1 5/8 nuts tightly secured to the bolts on the casing. The pumpman gave him a 1 5/8 straight-end wrench weighing two and one-half pounds and ten to eleven inches long, and also a mallet. The pump was located alongside and some inches below a catwalk, and Michalic had to step down from the catwalk to reach the casing. His task required the gripping of each nut in the claw of the wrench and the hammering of the side of the wrench with the mallet to apply pressure to loosen it. Michalic had removed all but a few of the nuts when he 'had hold of a nut' with the wrench and 'I hit it (the wrench) with the mallet and it slipped off the nut and came down the side of the pump and hit my big toe. * * * Yes, she slipped off the nut on the pump and came down the side of the pump and smashed my big toe.'
9
Michalic contends that the proofs were sufficient to justify the jury in finding with reason that there was play in the claw of the wrench which prevented a tight grip on the nut, thus entitling him to the jury's determination of his unseaworthiness claim, and were also sufficient to justify the jury in finding with reason that the respondent negligently furnished him with a defective wrench, thus entitling him also to the jury's determination of his Jones Act claim. The evidence viewed in a light favorable to him was as follows: The wrench and other pumproom tools were kept in the pumproom toolbox and were used only when the vessel was being prepared for lay-up. The tools were four or five years old. Because of the danger of fire, the tools, including the wrench and mallet which Michalic used, were made of a special spark-proof alloy. The second mate, who had left the Orion on December 19,2 testified that the tools were bronze because 'Bronze tools are for non-striking.' It was the practice to inspect the pumproom tools and replace worn ones before their use at lay-up time, but the first assistant engineer who testified to the practice did not say this inspection was made in 1955; and the pumpman testified that 'It could be' that no one looked at the toolbox for nine months before December 28. The second mate testified that the tools 'had been very beaten and battered, perhaps there for some time.' Michalic testified that he noticed when the pumpman gave him the wrench that it was an 'old beat-up wrench * * * all chewed up on the end.' Michalic said that when he started work 'the wrench was slipping off the nuts; it slipped off every one of them.' He 'had a hard time loosening them off.' He protested to the pumpman that 'This wrench keeps slipping off,' and the pumpman answered 'Never mind about that, do the job as best you can.'
10
The trial judge found the evidence to be insufficient to present a jury question whether the wrench was a reasonably suitable appliance, because 'on the theory the grip is worn * * * there is never any mention of the grip in the case * * *.' The Court of Appeals took the same view, saying 'There was no evidence that the open or jaw end of the wrench was in any way deficient * * * (t)he fact that the wrench slipped is not evidence that its slipping was the consequence of some condition in the jaw or handle of the wrench.' 271 F.2d at page 199. We think that both lower courts erred. True, there was no direct evidence of play in the jaw of the wrench, as in Jacob v. New York City, 315 U.S. 752, 754, 62 S.Ct. 854, 855, 86 L.Ed. 1166. But direct evidence of a fact is not required. Circumstantial evidence is not only sufficient, but may also be more certain, satisfying and persuasive than direct evidence. Rogers v. Missouri Pacific R. Co., 352 U.S. 500, 508, 77 S.Ct. 443, 449, 1 L.Ed.2d 493, note 17.3 The jury, on this record, with the inferences permissible from the respondent's own testimony that inspections were necessary to replace tools of this special alloy because of wear which impaired their effectiveness, could reasonably have found that the wrench repeatedly slipped from the nuts because the jaw of the wrench did not properly grip them. Plainly the jury, with reason, could infer that the colloquy between Michalic and the pumpman, and Michalic's testimony as to slipping, related to the function of the jaw of the wrench in gripping the nuts and that there was play in it which caused the wrench to slip off. Thus the proofs sufficed to raise questions for the jury's determination of both the unseaworthiness and Jones Act claims. 'It does not matter that, from the evidence, the jury may also with reason, on grounds of probability, attribute the result to other causes * * *.' Rogers v. Missouri Pacific R. Co., supra, 352 U.S. at page 506, 77 S.Ct. at page 448.4
11
The Jones Act claim is double-barreled. Michalic adds a charge of negligent failure to provide him with a safe place to work to the charge of negligence in furnishing him with a defective wrench. However, the case was not tried, nor is it argued here, on the basis that the charge of negligence in failing to provide a safe place to work rests solely on evidence tending to show a cramped and poorly lighted working space, regardless of the suitability of the wrench. On the contrary, Michalic also makes the allegedly defective wrench the basis of this charge, arguing in effect that the described conditions under which he was required to do the work increased the hazard from the use of the defective wrench. Under that theory, the relevance of the testimony is only to the charge of furnishing a defective wrench and the causal connection between that act and his injury. Phrasing the claim as a failure to provide a safe place to work therefore adds nothing to Michalic's case, and he was not entitled to have that claim submitted to the jury as an additional ground of the respondent's alleged liability.
12
The judgment of the Court of Appeals is reversed and the cause remanded to the District Court for a new trial. It is so ordered.
13
Judgment of Court of Appeals reversed and cause remanded to the District Court for new trial.
14
For the reasons set forth in his opinion in Rogers v. Missouri Pacific R. Co., 352 U.S. 500, 524, 77 S.Ct. 443, 459, 1 L.Ed.2d 493, MR. JUSTICE FRANKFURTER is of the view that the writ of certiorari was improvidently granted.
15
Mr. Justice HARLAN with whom Mr. Justice WHITTAKER and Mr. Justice STEWART join, dissenting.
16
At the opening of a Term which finds the Court's docket crowded with more important and difficult litigation than in many years, it is not without irony that we should be witnessing among the first matters to be heard a routine negligence (and unseaworthiness)1 case involving only issues of fact. I continue to believe that such cases, distressing and important as they are for unsuccessful plaintiffs, do not belong in this Court. See dissenting opinions in Rogers v. Missouri Pacific R. Co., 352 U.S. 500, at pages 524, 559, 77 S.Ct. 443, at pages 459, 478.
17
The District Court, finding that the evidence presented no questions for the jury, directed a verdict for the respondent. The Court of Appeals, in an opinion which manifests a conscientious effort to follow the precepts of the Rogers case, unanimously affirmed, after a painstaking assessment of the record. 6 Cir., 271 F.2d 194. My own examination of the record and of the opinion of the Court of Appeals convinces me that there is no warrant for this Court overriding the views of the two lower courts.
18
The core of petitioner's case was the condition of the wrench, his unsafe-place-to-work theory having evaporated in thin air, as the Court recognizes. Having had to abandon his original theory that the claw of the wrench had defective teeth (since the wrench was toothless), petitioner testified (1) that the instrument was an 'old beat-up wrench * * * all chewed up on the end' (whether at the claw or handle does not appear); and (2) that the wrench had slipped off nuts at various times during the operation (albeit petitioner had before the accident successfully removed some 15 out of 20 nuts without mishap).
19
While the Court, in stating that 'there was no direct evidence of play in the jaw of the wrench,' seems to recognize that this testimony did not suffice to show any actionable flaw in the wrench, it nonetheless concludes that the jury should have been permitted to infer one, in light of two other factors. These are (1) the second mate's testimony that as of some 10 days before the accident,2 the tools in the pumproom toolbox 'had been very beaten and battered' (whether at the claw or handle, or anywhere else, does not appear); and (2) other evidence which, as I read its opinion, the Court takes as establishing that the tools were old and infrequently inspected. (Actually the record shows that the tools had been used only four or five times and that the wrench had been inspected just before it was handed to petitioner.3)
20
Judged by any reasonable standard this evidence, fragmentized or synthesized as one may please, did not in my opinion make a case for the jury. The additional factors on which the Court relies add nothing to the inherent deficiencies of petitioner's testimony which the Court seems to recognize did not of itself make out a case of either negligence or unseaworthiness. If it is permissible for a jury to rationalize 'into being' a defective wrench from this sort of evidence, then wrenches have indeed become dangerous weapons for those operating vessels on the Great Lakes. If the rule of Rogers means that in FELA cases4 trial courts are deprived of all significant control over jury verdicts, and juries are in effect to be allowed to roam at large, I think the lower federal courts should be so told. See Harris v. Pennsylvania R. Co., 361 U.S. 15, 25, 80 S.Ct. 22, 29, 1 L.Ed.2d 1 (dissenting opinion). At least this would be better than continuing to require the lower courts to operate in what must be an atmosphere of increasing bewilderment over what is expected of them in these federal negligence cases.
21
I would affirm.
1
The parties tried the case in the District Court, and argued it here and in the Court of Appeals, as raising issues both of negligence under the Jones Act and unseaworthiness under the general maritime law. We therefore need not be concerned with the confusing language of the complaint and whether it may be read as pleading a claim solely on the theory of negligence.
2
The trial judge ordered the second mate's testimony to be stricken from the record when it appeared that the mate left the Orion on December 19. The Court of Appeals nevertheless considered the testimony so far as it concerned the condition of the tools. 271 F.2d at page 196. We think the action of the Court of Appeals was correct in light of the testimony of respondent's own witnesses, from which it is reasonable to infer that the tools used on December 28 had been in the toolbox for some time prior to December 19.
3
The trial judge rested his action partly on a supposed variance between the complaint and the proof at the trial. The complaint alleged that the wrench was 'an old defective wrench in an unseaworthy condition in that the teeth and grip of the wrench were worn and defective.' (Emphasis supplied.) Michalic and all the witnesses at the trial who testified about the wrench described its claw as smooth-faced and without teeth. We see no fatal variance and in any event respondent waived reliance on any by expressly disclaiming surprise at the trial.
4
The petitioner does not invoke the District Court's jurisdiction on grounds of diversity of citizenship. Thus there is jurisdiction on the law side of the court of the unseaworthiness claim only as 'pendent' to jurisdiction under the Jones Act. Romero v. International Terminal Operating Co., 358 U.S. 354, 380 381, 79 S.Ct. 468, 484—485, 3 L.Ed.2d 368. However, the question expressly reserved in Romero, 358 U.S. at page 381, 79 S.Ct. at page 485—whether the District Court may submit the 'pendent' claim to the jury—is not presented by the case. The Orion was a Great Lakes vessel and the petitioner is entitled to a jury trial of his unseaworthiness claim under 28 U.S.C. § 1873, 28 U.S.C.A. § 1873. See Troupe v. Chicago, D. & G. Bay Transit Co., 2 Cir., 234 F.2d 253; The Western States, 2 Cir., 159 F. 354; Jenkins v. Roderick, D.C., 156 F.Supp. 299.
1
See note 1 of the Court's opinion, 364 U.S. at page 325, 81 S.Ct. at page 8.
2
The exact date of the accident is obscure. Petitioner did not report the alleged accident for some six months after he claimed it occurred. The then master testified with respect to the filling out of the company accident form:
'Q. How did you arrive at the date of December 28, 1955? A. Well, it was merely an arbitrary date. It was kind of hard to reckon back at the time this (the form) was made up. This was made up on the 1st of April following. This may have been any time in December. It may have been the 21st, it may have been any time during that period. * * *
'The Court: That is the date plaintiff gave. Were you on the vessel on that day, December 28?
'The Witness: Not to my recollection, sir, but when we typed this up Mr. Michalic, the plaintiff, gave me that as the approximate date. He didn't really know exactly when it would have been.'
3
The pumpman, whom petitioner was helping, testified that the wrench used by petitioner was one of three that had been procured four or five years before; that they were used only once a year; and that he had inspected the wrenches just before taking them out of the tool chest on the day in question.
4
The Jones Act, here involved, incorporates the standards of the Federal Employers' Liability Act, 45 U.S.C.A. § 51 et seq.
| 78
|
364 U.S. 361
81 S.Ct. 132
5 L.Ed.2d 128
Karl F. KNETSCH and Eva Fay Knetsch, Petitioners,v.UNITED STATES.
No. 23.
Argued Oct. 17, 18, 1960.
Decided Nov. 14, 1960.
Mr. W. Lee McLane, Jr., Phoenix, Ariz., for petitioners.
Mr. Grant W. Wiprud, Washington, D.C., for respondent.
Mr. Justice BRENNAN delivered the the opinion of the Court.
1
This case presents the question of whether deductions from gross income claimed on petitioners' 1953 and 1954 joint federal income tax returns, of § 143,465 in 1953 and of $147,105 in 1954, for payments made by petitioner, Karl F. Knetsch, to Sam Houston Life Insurance Company, constituted 'interest paid . . . on indebtedness' within the meaning of § 23(b) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 23(b), and § 163(a) of the Internal Revenue Code of 1954, 26 U.S.C.A. § 163(a).1 The Commissioner of Internal Revenue disallowed the deductions and determined a deficiency for each year. The petitioners paid the deficiencies and brought this action for refund in the District Court for the Southern District of California. The District Court rendered judgment for the United States, and the Court of Appeals for the Ninth Circuit affirmed, 272 F.2d 200. Because of a suggested conflict with the decision of the Court of Appeals for the Fifth Circuit in United States v. Bond, 258 F.2d 577, we granted certiorari 361 U.S. 958, 80 S.Ct. 589, 4 L.Ed.2d 541.
2
On December 11, 1953, the insurance company sold Knetsch ten 30-year maturity deferred annuity savings bonds, each in the face amount of $400,000 and bearing interest at 2 1/2% compounded annually. The purchase price was $4,004,000. Knetsch gave the Company his check for $4,000, and signed $4,000,000 of nonrecourse annuity loan notes for the balance. The notes bore 3 1/2% interest and were secured by the annuity bonds. The interest was payable in advance, and Knetsch on the same day prepaid the first year's interest, which was $140,000. Under the Table of Cash and Loan Values made part of the bonds, their cash or loan value at December 11, 1954, the end of the first contract year, was to be $4,100,000. The contract terms, however, permitted Knetsch to borrow any excess of this value above his indebtedness without waiting until December 11, 1954. Knetsch took advantage of this provision only five dats after the purchase. On December 16, 1953, he received from the company $99,000 of the $100,000 excess over his $4,000,000 indebtedness, for which he gave his notes bearing 3 1/2% interest. This interest was also payable in advance and on the same day he prepaid the first year's interest of $3,465. In their joint return for 1953, the petitioners deducted the sum of the two interest payments, that is $143,465, as 'interest paid * * * within the taxable year on indebtedness,' under § 23(b) of the 1939 Code.
3
The second contract year began on December 11, 1954, when interest in advance of $143,465 was payable by Knetsch on his aggregate indebtedness of $4,099,000. Knetsch paid this amount on December 27, 1954. Three days later, on December 30, he received from the company cash in the amount of $104,000, the difference less $1,000 between his then $4,099,000 indebtedness and the cash or loan value of the bonds of $4,204,000 on December 11, 1955. He gave the company appropriate notes and prepaid the interest thereon of $3,640. In their joint return for the taxable year 1954 the petitioners deducted the sum of the two interest payments, that is $147,105, as 'interest paid * * * within the taxable year on indebtedness,' under § 163(a) of the 1954 Code.
4
The tax years 1955 and 1956 are not involved in this proceeding, but a recital of the events of those years is necessary to complete the story of the transaction. On December 11, 1955, the start of the third contract year, Knetsch became obligated to pay $147,105 as prepaid interest on an indebtedness which now totalled $4,203,000. He paid this interest on December 28, 1955. On the same date he received $104,000 from the company. This was $1,000 less than the difference between his indebtedness and the cash or loan value of the bonds of $4,308,000 at December 11, 1956. Again he gave the company notes upon which he prepaid interest of $3,640. Petitioners claimed a deduction on their 1955 joint return for the aggregate of the payments, or $150,745.
5
Knetsch did not go on with the transaction for the fourth contract year beginning December 11, 1956, but terminated it on December 27, 1956. His indebtedness at that time totalled $4,307,000. The cash or loan value of the bonds was the $4,308,000 value at December 11, 1956, which had been the basis of the 'loan' of December 28, 1955. He surrendered the bonds and his indebtedness was canceled. He received the difference of $1,000 in cash.
6
The contract called for a monthly annuity of $90,171 at maturity (when Knetsch would be 90 years of age) or for such smaller amount as would be produced by the cash or loan value after deduction of the then existing indebtedness. It was stipulated that if Knetsch had held the bonds to maturity and continued annually to borrow the net cash value less $1,000, the sum available for the annuity at maturity would be $1,000 ($8,388,000 cash or loan value less $8,387,000 of indebtedness), enough to provide an annuity of only $43 per month.
7
The trial judge made findings that '(t)here was no commercial economic substance to the * * * transaction,' that the parties did not intend that Knetsch 'become indebted to Sam Houston,' that '(n)o indebtedness of (Knetsch) was created by any of the * * * transactions,' and that '(n)o economic gain could be achieved from the purchase of these bonds without regard to the tax consequences * * *.' His conclusion of law, based on this Court's decision in Deputy v. du Pont, 308 U.S. 488, 60 S.Ct. 363, 84 L.Ed. 416, was that '(w)hile in form the payments to Sam Houston were compensation for the use or forbearance of money, they were not in substance. As a payment of interest, the transaction was a sham.'
8
We first examine the transaction between Knetsch and the insurance company to determine whether it created an 'indebtedness' within the meaning of § 23(b) of the 1939 Code and § 163(a) of the 1954 Code, or whether, as the trial court found, it was a sham. We put aside a finding by the District Court that Knetsch's 'only motive in purchasing these 10 bonds was to attempt to secure an interest deduction.'2 As was said in Gregory v. Helvering, 293 U.S. 465, 469, 55 S.Ct. 266, 267, 79 L.Ed. 596: 'The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted. * * * But the question for determination is whether what was done, apart from the tax motive, was the thing which the statute intended.'
9
When we examine 'what was done' here, we see that Knetsch paid the insurance company $294,570 during the two taxable years involved and received $203,000 back in the form of 'loans.' What did Knetsch get for the out-of-pocket difference of $91,570? In form he had an annuity contract with a so-called guaranteed cash value at maturity of $8,388,000, which would produce monthly annuity payments of $90,171, or substantial life insurance proceeds in the event of his death before maturity. This, as we have seen, was a fiction, because each year Knetsch's annual borrowings kept the net cash value, on which any annuity or insurance payments would depend, at the relative pittance of $1,000.3 Plainly, therefore, Kentsch's transaction with the insurance company did 'not appreciably affect his beneficial interest except to reduce his tax * * *.' Gilbert v. Commissioner, 2 Cir., 248 F.2d 399, 411 (dissenting opinion). For it is patent that there was nothing of substance to be realized by Knetsch from this transaction beyond a tax deduction. What he was ostensibly 'lent' back was in reality only the rebate of a substantial part of the so-called 'interest' payments. The $91,570 difference retained by the company was its fee for providing the facade of 'loans' whereby the petitioners sought to reduce their 1953 and 1954 taxes in the total sum of $233,297.68. There may well be single premium annuity arrangements with nontax substance which create an 'indebtedness' for the purposes of § 23(b) of the 1939 Code and § 163(a) of the 1954 Code. But this one is a sham.4
10
The petitioners contend, however, that the Congress in enacting § 264 of the 1954 Code, 26 U.S.C.A. § 264, authorized the deductions. They point out that § 264(a)(2) denies a deduction for amounts paid on indebtedness incurred to purchase to carry a single-premium annuity contract, but only as to contracts purchased after March 1, 1954.5 The petitioners thus would attribute to Congress a purpose to allow the deduction of pre-1954 payments under transactions of the kind carried on by Knetsch with the insurance company without regard to whether the transactions created a true obligation to pay interest. Unless that meaning plainly appears we will not attribute it to Congress. 'To hold otherwise would be to exalt artifice above reality and to deprive the statutory provision in question of all serious purpose.' Gregory v. Helvering, supra, 293 U.S. at page 470, 55 S.Ct. at page 268. We, therefore, look to the statute and materials relevant to its construction for evidence that Congress meant in § 264(a)(2) to authorize the deduction of payments made under sham transactions entered into before 1954. We look in vain.
11
Provisions denying deductions for amounts paid on indebtedness incurred to purchase or carry insurance contracts are not new in the revenue acts. A provision applicable to all annuities, but not to life insurance or endowment contracts, was in the statute from 1932 to 1934, 47 Stat. 179. It was added at a time when Congress was developing a policy to deny a deduction for interest allocable to tax-exempt income;6 the proceeds of annuities were excluded from gross income up to the amount of the consideration paid in by the annuitant. See H.R.Rep. No. 708, 72d Cong., 1st Sess., p. 11. The provision was repealed by the Revenue Act of 1934, 48 Stat. 688, when the method by which annuity payments were taken into gross income was changed in such way that more would be included. 48 Stat. 687. See S.Rep. No. 558, 73d Cong., 2d Sess., p. 24.
12
Congress then in 1942 denied a deduction for amounts paid on indebtedness incurred to purchase single-premium life insurance and endowment contracts. This provision was enacted by an amendment to the 1939 Code, 56 Stat. 827, 'to close a loophole' in respect of interest allocable to partially exempt income. See Hearings before Senate Finance Committee on H.R. 7378, 77th Cong., 2d Sess., p. 54; § 22(b)(1) of the 1939 Code, 26 U.S.C.A. § 22(b)(1) (now § 101(a) (1) of the 1954 Code, 26 U.S.C.A. § 101(a)(1)).
13
The 1954 provision extending the denial to amounts paid on indebtedness incurred to purchase or carry single-premium annuities appears to us simply to expand the application of the policy in respect of interest allocable to partially exempt income. The proofs are perhaps not as strong as in the case of life insurance and endowment contracts, but in the absence of any contrary expression of the Congress, their import is clear enough. There is first the fact that the provision was incorporated in the section covering life insurance and endowment contracts, which unquestionably was adopted to further that policy. There is second the fact that Congress' attention was directed to annuities in 1954; the same 1954 statute again changed the basis for taking part of the proceeds of annuities into gross income. See § 72(b) of the 1954 Code, 26 U.S.C.A. § 72(b). These are signs that Congress' long-standing concern with the problem of interest allocable to partially exempt income, and not any concern with sham transactions, explains the provision.
14
Moreover, the provision itself negates any suggestion that sham transactions were the congressional concern, for the deduction denied is of certain interest payments on actual 'indebtedness.' And we see nothing in the Senate Finance and House Ways and Means Committee Reports on § 264, H.R.Rep. No. 1337, 83d Cong., 2d Sess., p. 31; S.Rep. No. 1622, 83d Cong., 2d Sess., p. 38, to suggest that Congress in exempting pre-1954 annuities intended to protect sham transactions.7
15
Some point is made in an amicus curiae brief of the fact that Knetsch in entering into these annuity agreements relied on individual ruling letters issued by the Commissioner to other taxpayers. This argument has never been advanced by petitioners in this case. Accordingly, we have no reason to pass upon it.
16
The judgment of the Court of Appeals is affirmed.
17
Affirmed.
18
Mr. Justice DOUGLAS, with whom Mr. Justice WHITTAKER and Mr. Justice STEWART concur, dissenting.
19
I agree with the views expressed by Judge Moore in Diggs v. Commissioner, 2 Cir., 281 F.2d 326, 330—332, and by Judge Brown, writing for himself and Judge Hutcheson, in United States v. Bond, 5 Cir., 258 F.2d 577.
20
It is true that in this transaction the taxpayer was bound to lose if the annuity contract is taken by itself. At least the taxpayer showed by his conduct that he never intended to come out ahead on that investment apart from this income tax deduction. Yet the same may be true where a taxpayer borrows money at 5% or 6% interest to purchase securities that pay only nominal interest; or where, with money in the bank earning 3%, he borrows from the self same bank at a higher rate. His aim there, as here, may only to be get a tax deduction for interest paid. Yet as long as the transaction itself is not hocus-pocus, the interest charges incident to completing it would seem to be deductible under the Internal Revenue Code as respects annuity contracts made prior to March 1, 1954, the date Congress selected for terminating this class of deductions. 26 U.S.C. § 264, 26 U.S.C.A § 264. The insurance company existed; it operated under Texas law; it was authorized to issue these policies and to make these annuity loans. While the taxpayer was obligated to pay interest at the rate of 3 1/2% per annum, the annuity bonds increased in cash value at the rate of only 2 1/2% per annum. The insurance company's profit was in that 1-point spread.
21
Tax avoidance is a dominating motive behind scores of transactions. It is plainly present here. Will the Service that calls this transaction a 'sham' today not press for collection of taxes* arising out of the surrender of the annuity contract? I think it should, for I do not believe any part of the transaction was a 'sham.' To disallow the 'interest' deduction because the annuity device was devoid of commercial substance is to draw a line which will affect a host of situations now now before us and which, with all deference, I do not think we can maintain when other cases reach here. The remedy is legislative. Evils or abuses can be particularized by Congress. We deal only with 'interest' as commonly understood and as used across the board in myriad transactions. Since these transactions were real and legitimate in the insurance world and were consummated within the limits allowed by insurance policies, I would recognize them tax-wise.
1
The relevant words of the two sections are the same, namely that there shall be allowed as a deduction 'All interest paid or accrued within the taxable year on indebtedness * * *.'
2
We likewise put aside Knetsch's argument that, because he received ordinary income when he surrendered the annuities in 1956, he has suffered a net loss even if the contested deductions are allowed, and that therefore his motive in taking out the annuities could not have been tax avoidance.
3
Petitioners argue further that in 10 years the net cash value of the bonds would have exceeded the amounts Knetsch paid as 'interest.' This contention, however, is predicated on the wholly unlikely assumption that Knetsch would have paid off in cash the original $4,000,000 'loan.'
4
Every court which has considered this or similar contracts has agreed with our conclusion, except the Court of Appeals for the Fifth Circuit in the Bond case and one District Court bound by that decision, Roderick v. United States, 59—2 U.S.T.C. 9650. See Diggs v. Commissioner, 2 Cir., 281 F.2d 326, certiorari denied 364 U.S. 908, 81 S.Ct. 271, 5 L.Ed.2d 224; Weller and Emmons v. Commissioner, 3 Cir., 270 F.2d 294, certiorari denied 347 U.S. 908, 81 S.Ct. 269, 5 L.Ed.2d 223; Haggard v. United States, 59—1 U.S.T.C. 9299; Oliver L Williams, 18 T.C.M. 205. See also Rev.Rul. 54—94, 1954—1 Cum.Bull. 53, and the dissenting opinion of Judge Wisdom in Bond.
5
Section 264(a)(2) provides:
'(a) General rule—No deduction shall be allowed for—
'(2) Any amount paid or accrued on indebtedness incurred or continued to purchase or carry a single premium life insurance, endowment, or annuity contract.
'Paragraph (2) shall apply in respect of annuity contracts only as to contracts purchased after March 1, 1954.' (Emphasis supplied.)
The substance of the section without the italicized language was added to the 1939 Code in 1942. 56 Stat. 827.
6
See § 23(b) of the Revenue Act of 1932, 47 Stat. 179, which provided:
'(b) Interest—All interest paid or accrued within the taxable year on indebtedness, except (1) on indebtedness incurred or continued to purchase or carry obligations or securities (other than obligations of the United States issued after September 24, 1917, and originally subscribed for by the taxpayer) the interest upon which is wholly exempt from the taxes imposed by this title, or (2) on indebtedness incurred or continued in connection with the purchasing or carrying of an annuity.'
7
The Reports are as follows:
'Under existing law, no interest deduction is allowed in the case of indebtedness incurred, or continued, to purchase a single-premium life-insurance or endowment contract. * * *
'Existing law does not extend the denial of the interest deduction to indebtedness incurred to purchase single-premium annuity contracts. It has come to your committee's attention that a few insurance companies have promoted a plan for selling annuity contracts based on the tax advantage derived from omission of annuities from the treatment accorded single-premium life-insurance or endowment contracts. The annuity is sold for a nominal cash payment with a loan to cover the balance of the single-premium cost of the annuity. Interest on the loan (which may be a nonrecourse loan) is then taken as a deduction annually by the purchaser with a resulting tax saving that reduces the real interest cost below the increment in value produced by the annuity.
'Your committee's bill will deny an interest deduction in such cases but only as to annuities purchased after March 1, 1954.'
*
Petitioners terminated this transaction in 1956 by allowing the bonds to be cancelled and receiving a check for $1,000. The termination was reflected in their tax return for 1956. It might also be noted that the insurance company reported as gross income the interest payments which it received from petitioners in 1953 and 1954.
| 1112
|
364 U.S. 339
81 S.Ct. 125
5 L.Ed.2d 110
C. G. GOMILLION et al., Petitioners,v.Phil M. LIGHTFOOT, as Mayor of the City of Tuskegee, et al.
No. 32.
Argued Oct. 18, 19, 1960.
Decided Nov. 14, 1960.
Mr. Fred D. Gray, Montgomery, Ala., and Robert L. Carter, New York City, for petitioners.
Mr. James J. Carter, Montgomery, Ala., for respondents.
Mr. Philip Elman, Washington, D.C., for the United States, as amicus curiae.
Mr. Justice FRANKFURTER delivered the opinion of the Court.
1
This litigation challenges the validity, under the United States Constitution, of Local Act No. 140, passed by the Legislature of Alabama in 1957, redefining the boundaries of the City of Tuskegee. Petitioners, Negro citizens of Alabama who were, at the time of this redistricting measure, residents of the City of Tuskegee, brought an action in the United States District Court for the Middle District of Alabama for a declaratory judgment that Act 140 is unconstitutional, and for an injunction to restrain the Mayor and officers of Tuskegee and the officials of Macon County, Alabama, from enforcing the Act against them and other Negroes similarly situated. Petitioners' claim is that enforcement of the statute, which alters the shape of Tuskegee from a square to an uncouth twenty-eight-sided figure, will constitute a discrimination against them in violation of the Due Process and Equal Protection Clauses of the Fourteenth Amendment to the Constitution and will deny them the right to vote in definance of the Fifteenth Amendment.
2
The respondents moved for dismissal of the action for failure to state a claim upon which relief could be granted and for lack of jurisdiction of the District Court. The court granted the motion, stating, 'This Court has no control over, no supervision over, and no power to change any boundaries of municipal corporations fixed by a duly convened and elected legislative body, acting for the people in the State of Alabama.' 167 F.Supp. 405, 410. On appeal, the Court of Appeals for the Fifth Circuit, affirmed the judgment, one judge dissenting. 270 F.2d 594. We brought the case here since serious questions were raised concerning the power of a State over its municipalities in relation to the Fourteenth and Fifteenth Amendments. 362 U.S. 916, 80 S.Ct. 669, 4 L.Ed.2d 737.
3
At this stage of the litigation we are not concerned with the truth of the allegations, that is, the ability of petitioners to sustain their allegations by proof. The sole question is whether the allegations entitle them to make good on their claim that they are being denied rights under the United States Constitution. The complaint, charging that Act 140 is a device to disenfranchise Negro citizens, alleges the following facts: Prior to Act 140 the City of Tuskegee was square in shape; the Act transformed it into a strangely irregular twenty-eight-sided figure as indicated in the diagram appended to this opinion. The essential inevitable effect of this redefinition of Tuskegee's boundaries is to remove from the city all save four or five of its 400 Negro voters while not removing a single white voter or resident. The result of the Act is to deprive the Negro petitioners discriminatorily of the benefits of residence in Tuskegee, including, inter alia, the right to vote in municipal elections.
4
These allegations, if proven, would abundantly establish that Act 140 was not an ordinary geographic redistricting measure even within familiar abuses of gerrymandering. If these allegations upon a trial remained uncontradicted or unqualified, the conclusion would be irresistible, tantamount for all practical purposes to a mathematical demonstration, that the legislation is solely concerned with segregating white and colored voters by fencing Negro citizens out of town so as to deprive them of their pre-existing municipal vote.
5
It is difficult to appreciate what stands in the way of adjudging a statute having this inevitable effect invalid in light of the principles by which this Court must judge, and uniformly has judged, statutes that, howsoever speciously defined, obviously discriminate against colored citizens. 'The (Fifteenth) Amendment nullifies sophisticated as well as simple-minded modes of discrimination.' Lane v. Wilson, 307 U.S. 268, 275, 59 S.Ct. 872, 876, 83 L.Ed. 1281.
6
The complaint amply alleges a claim of racial discrimination. Against this claim the respondents have never suggested, either in their brief or in oral argument, any countervailing municipal function which Act 140 is designed to serve. The respondents invoke generalities expressing the State's unrestricted power unlimited, that is, by the United States Constitution—to establish, destroy, or reorganize by contraction or expansion its political subdivisions, to wit, cities, counties, and other local units. We freely recognize the breadth and importance of this aspect of the State's political power. To exalt this power into an absolute is to misconceive the reach and rule of this Court's decisions in the leading case of Hunter v. City of Pittsburgh, 207 U.S. 161, 28 S.Ct. 40, 52 L.Ed. 151, and related cases relied upon by respondents.
7
The Hunter case involved a claim by citizens of Allegheny, Pennsylvania, that the General Assembly of that State could not direct a consolidation of their city and Pittsburgh over the objection of a majority of the Allegheny voters. It was alleged that while Allegheny already had made numerous civic improvements, Pittsburgh was only then planning to undertake such improvements, and that the annexation would therefore greatly increase the tax burden on Allegheny residents. All that the case held was (1) that there is no implied contract between a city and its residents that their taxes will be spent solely for the benefit of that city, and (2) that a citizen of one municipality is not deprived of property without due process of law by being subjected to increased tax burdens as a result of the consolidation of his city with another. Related cases, upon which the respondents also rely, such as City of Trenton v. State of New Jersey, 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937; City of Pawhuska v. Pawhuska Oil & Gas Co., 250 U.S. 394, 39 S.Ct. 526, 63 L.Ed. 1054, and Laramie County Com'rs v. Albany County Com'rs, 92 U.S. 307, 23 L.Ed. 552, are far off the mark. They are authority only for the principle that no constitutionally protected contractual obligation arises between a State and its subordinate governmental entities solely as a result of their relationship.
8
In short, the cases that have come before this Court regarding legislation by States dealing with their political subdivisions fall into two classes: (1) those in which it is claimed that the State, by virtue of the prohibition against impairment of the obligation of contract (Art. I, § 10) and of the Due Process Clause of the Fourteenth Amendment, is without power to extinguish, or alter the boundaries of, an existing municipality; and (2) in which it is claimed that the State has no power to change the identity of a municipality whereby citizens of a pre-existing municipality suffer serious economic disadvantage.
9
Neither of these claims is supported by such a specific limitation upon State power as confines the States under the Fifteenth Amendment. As to the first category, it is obvious that the creation of municipalities—clearly a political act—does not come within the conception of a contract under the Dartmouth College case. 4 Wheat. 518, 4 L.Ed. 629. As to the second, if one principle clearly emerges from the numerous decisions of this Court dealing with taxation it is that the Due Process Clause affords no immunity against mere inequalities in tax burdens, nor does it afford protection against their increase as an indirect consequence of a State's exercise of its political powers.
10
Particularly in dealing with claims under broad provisions of the Constitution, which derive content by an interpretive process of inclusion and exclusion, it is imperative that generalizations, based on and qualified by the concrete situations that gave rise to them, must not be applied out of context in disregard of variant controlling facts. Thus, a correct reading of the seemingly unconfined dicta of Hunter and kindred cases is not that the State has plenary power to manipulate in every conceivable way, for every conceivable purpose, the affairs of its municipal corporations, but rather that the State's authority is unrestrained by the particular prohibitions of the Constitution considered in those cases.
11
The Hunter opinion itself intimates that a state legislature may not be omnipotent even as to the disposition of some types of property owned by municipal corporations, 207 U.S. at pages 178 181, 28 S.Ct. at pages 46—47. Further, other cases in this Court have refused to allow a State to abolish a municipality, or alter its boundaries, or merge it with another city, without preserving to the creditors of the old city some effective recourse for the collection of debts owed them. Shapleigh v. City of San Angelo, 167 U.S. 646, 17 S.Ct. 957, 42 L.Ed. 310; Port of Mobile v. United States ex rel. Watson, 116 U.S. 289, 6 S.Ct. 398, 29 L.Ed. 620; Town of Mount Pleasant v. Beckwith, 100 U.S. 514, 25 L.Ed. 699; Broughton v. City of Pensacola, 93 U.S. 266, 23 L.Ed. 896. For example, in Port of Mobile v. United States ex rel. Watson the Court said:
12
'Where the resource for the payment of the bonds of a municipal corporation is the power of taxation existing when the bonds were issued, any law which withdraws or limits the taxing power, and leaves no adequate means for the payment of the bonds, is forbidden by the constitution of the United States, and is null and void.' Port of Mobile v. United States ex rel. Watson, supra, 116 U.S. at page 305, 6 S.Ct. at page 405.
13
This line of authority conclusively shows that the Court has never acknowledged that the States have power to do as they will with municipal corporations regardless of consequences. Legislative control of municipalities, no less than other state power, lies within the scope of relevant limitations imposed by the United States Constitution. The observation in Graham v. Folsom, 200 U.S. 248, 253, 26 S.Ct. 245, 247, 50 L.Ed. 464, becomes relevant: 'The power of the state to alter or destroy its corporations is not greater than the power of the state to repeal its legislation.' In that case, which involved the attempt by state officials to evade the collection of taxes to discharge the obligations of an extinguished township, Mr. Justice McKenna, writing for the Court, went on to point out, with reference to the Mount Pleasant and Mobile cases:
14
'It was argued in those cases, as it is argued in this, that such alteration or destruction of the subordinate governmental divisions was a proper exercise of legislative power, to which creditors had to submit. The argument did not prevail. It was answered, as we now answer it, that such power, extensive though it is, is met and overcome by the provision of the Constitution of the United States which forbids a state from passing any law impairing the obligation of contracts. * * *' 200 U.S. at pages 253—254, 26 S.Ct. at page 247.
15
If all this is so in regard to the constitutional protection of contracts, it should be equally true that, to paraphrase, such power, extensive though it is, is met and overcome by the Fifteenth Amendment to the Constitution of the United States, which forbids a State from passing any law which deprives a citizen of his vote because of his race. The opposite conclusion, urged upon us by respondents, would sanction the achievement by a State of any impairment of voting rights whatever so long as it was cloaked in the garb of the realignment of political subdivisions. 'It is inconceivable that guaranties embedded in the Constitution of the United States may thus be manipulated out of existence.' Frost & Frost Trucking Co. v. Railroad Commission of California, 271 U.S. 583, 594, 46 S.Ct. 605, 607, 70 L.Ed. 1101.
16
The respondents find another barrier to the trial of this case in Colegrove v. Green, 328 U.S. 549, 66 S.Ct. 1198, 90 L.Ed. 1432. In that case the Court passed on an Illinois law governing the arrangement of congressional districts within that State. The complaint rested upon the disparity of population between the different districts which rendered the effectiveness of each individual's vote in some districts far less than in others. This disparity came to pass solely through shifts in population between 1901, when Illinois organized its congressional districts, and 1946, when the complaint was lodged. During this entire period elections were held under the districting scheme devised in 1901. The Court affirmed the dismissal of the complaint on the ground that it presented a subject not meet for adjudication.* The decisive facts in this case, which at this stage must be taken as proved, are wholly different from the considerations found controlling in Colegrove.
17
That case involved a complaint of discriminatory apportionment of congressional districts. The appellants in Colegrove complained only of a dilution of the strength of their votes as a result of legislative inaction over a course of many years. The petitioners here complain that affirmative legislative action deprives them of their votes and the consequent advantages that the ballot affords. When a legislature thus singles out a readily isolated segment of a racial minority for special discriminatory treatment, it violates the Fifteenth Amendment. In no case involving unequal weight in voting distribution that has come before the Court did the decision sanction a differentiation on racial lines whereby approval was given to unequivocal withdrawal of the vote solely from colored citizens. Apart from all else, these considerations lift this controversy out of the so-called 'political' arena and into the conventional sphere of constitutional litigation.
18
In sum, as Mr. Justice Holmes remarked, when dealing with a related situation, in Nixon v. Herndon, 273 U.S. 536, 540, 47 S.Ct. 446, 71 L.Ed. 759, 'Of course the petition concerns political action,' but 'The objection that the subject-matter of the suit is political is little more than a play upon words.' A statute which is alleged to have worked unconstitutional deprivations of petitioners' rights is not immune to attack simply because the mechanism employed by the legislature is a redefinition of municipal boundaries. According to the allegations here made, the Alabama Legislature has not merely redrawn the Tuskegee city limits with incidental inconvenience to the petitioners; it is more accurate to say that it has deprived the petitioners of the municipal franchise and consequent rights and to that end it has incidentally changed the city's boundaries. While in form this is merely an act redefining metes and bounds, if the allegations are established, the inescapable human effect of this essay in geometry and geography is to despoil colored citizens, and only colored citizens, of their theretofore enjoyed voting rights. That was no Colegrove v. Green.
19
When a State exercises power wholly within the domain of state interest, it is insulated from federal judicial review. But such insulation is not carried over when state power is used as an instrument for circumventing a federally protected right. This principle has had many applications. It has long been recognized in cases which have prohibited a State from exploiting a power acknowledged to be absolute in an isolated context to justify the imposition of an 'unconstitutional condition.' What the Court has said in those cases is equally applicable here, viz., that 'Acts generally lawful may become unlawful when done to accomplish an unlawful end, United States v. Reading Co., 226 U.S. 324, 357, 33 S.Ct. 90, 57 L.Ed. 243, and a constitutional power cannot be used by way of condition to attain an unconstitutional result.' Western Union Telegraph Co. v. Foster, 247 U.S. 105, 114, 38 S.Ct. 438, 439, 62 L.Ed. 1006. The petitioners are entitled to prove their allegations at trial.
20
For these reasons, the principal conclusions of the District Court and the Court of Appeals are clearly erroneous and the decision below must be reversed.
21
Reversed.
22
Mr. Justice DOUGLAS, while joining the opinion of the Court, adheres to the dissents in Colegrove v. Green, 328 U.S. 549, 66 S.Ct. 1198, 90 L.Ed. 1432, and South v. Peters, 339 U.S. 276, 70 S.Ct. 641, 94 L.Ed. 834.
APPENDIX TO OPINION OF THE COURT.
23
CHART SHOWING TUSKEGGE, ALABAMA, BEFORE AND AFTER ACT 140 Mr. Justice WHITTAKER, concurring.
24
I concur in the Court's judgment, but not in the whole of its opinion. It seems to me that the decision should be rested not on the Fifteenth Amendment, but rather on the Equal Protection Clause of the Fourteenth Amendment to the Constitution. I am doubtful that the averments of the complaint, taken for present purposes to be true, show a purpose by Act No. 140 to abridge petitioners' 'right * * * to vote', in the Fifteenth Amendment sense. It seems to me that the 'right * * * to vote' that is guaranteed by the Fifteenth Amendment is but the same right to vote as is enjoyed by all others within the same election precinct, ward or other political division. And, inasmuch as no one has the right to vote in a political division, or in a local election concerning only an area in which he does not reside, it would seem to follow that one's right to vote in Division A is not abridged by a redistricting that places his residence in Division B if he there enjoys the same voting privileges as all others in that Division, even though the redistricting was done by the State for the purpose of placing a racial group of citizens in Division B rather than A.
25
But it does seem clear to me that accomplishment of a State's purpose—to use the Court's phrase—of 'fencing Negro citizens out of' Division A and into Division B is an unlawful segregation of races of citizens, in violation of the Equal Protection Clause of the Fourteenth Amendment, Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873; Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401, 3 L.Ed.2d 5, and, as stated, I would think the decision should be rested on that ground—which, incidentally, clearly would not involve, just as the cited cases did not involve, the Colegrove problem.
*
Soon after the decision in the Colegrove case, Governor Dwight H. Green of Illinois in his 1947 biennial message to the legislature recommended a reapportionment. The legislature immediately responded, Ill.Sess.Laws 1947, p. 879, and in 1951 redistricted again. Ill.Sess.Laws 1951, p. 1924.
| 12
|
364 U.S. 388
81 S.Ct. 153
5 L.Ed.2d 148
Willard UPHAUSv.Louis C. WYMAN, Attorney General.
No. 336.
Nov. 14, 1960.
Louis Lusky, Grenville Clark, Marvin H. Morse, Dudley W. Orr, Royal W. France, Hugh H. Bownes and Leonard B. Boudin, for appellant.
Louis C. Wyman, Atty. Gen. of New Hampshire, appellee pro se.
PER CURIAM.
1
In view of the Court's decision in Uphaus v. Wyman. 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090, rehearing denied, 361 U.S. 856, 80 S.Ct. 40, 4 L.Ed.2d 95, the motion to dismiss is granted and the appeal herein is dismissed for want of jurisdiction, in that the judgment sought to be reviewed is based on a non-federal ground.
2
Appeal dismissed.
3
Mr. Justice BRENNAN.
4
The New Hampshire Supreme Court has held in this proceeding that the New Hampshire Legislature still wanted Dr. Uphaus' answers on December 14, 1959, notwithstanding the omission from Laws 1957, c. 178, of the provision of Laws 1955, cc. 340 and 197, authorizing the Attorney General 'to determine whether subversive persons * * * are presently located within this state,' Wyman v. Uphaus, 102 N.H. 461, 159 A.2d 160, on denial of motion for bail, 102 N.H. 517, 162 A.2d 611. We are bound by the highest state court's construction of the pertinent New Hampshire statutes. We must therefore consider the substantiality of the federal constitutional questions presented on this appeal on the basis of that construction and not upon the premise urged by Dr. Uphaus that the 1957 statute shows that the legislature on December 14, 1959, no longer wanted him to produce the list of names. In consequence, while I remain of the view that the Court in Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090, incorrectly sustained the previous order of civil contempt made against Dr. Uphaus, see dissent at page 82, of 360 U.S., at page 1047 of 79 S.Ct., that holding, while it stands, also sustains the order challenged on this appeal. Solely under compulsion of that decision, I think that the appeal must be dismissed as not presenting a substantial federal question.
5
Mr. Justice BLACK, with whom THE CHIEF JUSTICE and Mr. Justice DOUGLAS concur, dissenting.
6
I concur in the dissent of Mr. Justice DOUGLAS and agree with him that since the New Hampshire law upheld by this Court in Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090, has now been changed, new federal questions are presented which cannot be dismissed as involving only the correctness of a ruling on local law, and that we consequently should not dismiss this appeal but should note jurisdiction, grant bail and hear arguments. The recent amendment withdrew the power, involved in the previous appeal, which authorized the Attorney General of New Hampshire 'to determine whether subversive persons * * * are presently located within' the State, and thus took away the very power under which the Attorney General was acting when he demanded the names of guests at the summer camp in New Hampshire managed by the appellant, Dr. Willard Uphaus. Notwithstanding that fact, the New Hampshire courts have held that the State still has an interest in those names sufficient to justify the continued imprisonment of Dr. Uphaus for his refusal to comply with the demand to produce them.1 This appeal therefore raises federal questions as to whether this latter holding violates the Federal Constitution. I think that the Court's action today in treating those federal questions as insubstantial2 is wrong in at least two different respects.
7
First, I think this action is inconsistent with the Court's own test as set forth in its opinion on the prior appeal and there used to square the imprisonment of Dr. Uphaus with the First Amendment. That test was stated in these terms: 'The interest of the guests at World Fellowship in their associational privacy having been asserted, we have for decision the federal question of whether the public interests overbalance these conflicting private ones.'3 This required the Court to weign the interest of those guests against the interest of the State, as broadly expressed by its legislature, in knowing 'whether subversive persons * * * are presently located within' the State, a balalcing process4 which there resulted in the conclusion that the state interest must prevail. Now, however, it is clear that the interest of the State so weighed no longer exists and a new balance must be made if the invasion of 'associational privacy' previously sanctioned is to be permitted to continue. But this the Court refuses to do, apparently on the theory that the present appeal is controlled by the previous disposition. It seems to me that 'balancing' which refuses to take note of such an important change in the interest of the State is little balancing at all—a mere illusion, in fact.
8
Secondly, it seems to me that the record as it now stands before this Court requires a reappraisal of the question whether the actions of the State of New Hampshire constitute a bill of attainder in violation of Art. I, § 10, of the Constitution. On the prior appeal, the majority of this Court held that the record as it then stood would not justify such a conclusion. The present record, however, presents new facts relevant to that issue. For here we are confronted with a situation in which the courts of New Hampshire have stated that it was the intention of the legislature of that State to permit the Attorney General to single out Dr. Uphaus and any others (if, indeed, there are any others) against whom investigative proceedings had already been commenced and to pursue those proceedings, not in furtherance of any general aim of the State—that general aim, if it ever existed, has been abandoned by the amendment—but apparently for the sole purpose of setting these people off for special treatment. What this special treatment is to be is clearly shown by the brief filed before this Court in this appeal by the State Attorney General himself, who administers the Act. That brief states unequivocally that '(t)hose who voluntarily and knowingly appear with, consult with, confer with, attend functions with and otherwise act in concert with Communists or former Communists in America cannot possibly have any reasonable right of privacy in regard to such activities * * *.'5 In the light of all these new facts, the decision upon the former appeal is not and cannot properly be held to be dispositive of the question whether this record shows that New Hampshire is unconstitutionally imposing a bill of attainder upon Dr. Uphaus.
9
I think the summary dismissal of this appeal without even so much as the benefit of oral argument, when the abridgment of the rights of free speech and assembly is so obvious, is a sad indication of just how far this Court has already departed from the protections of the Bill of Rights and an omen of things yet to come. Such retrogression, of course, follows naturally from the Court's recent trend toward substituting for the plain language of the commands of the Bill of Rights elastic concepts which permit the Court to uphold direct abridgements of liberty unless the Court views those abridgments as 'arbitrary,' 'unreasonable,' 'offensive to decency' or 'unjustified on balance,'6 for these concepts reduce the absolute commands of the Constitution to mere admonitions. I think it is time for all who cherish the liberties guaranteed by the Bill of Rights to look closely at the disastrous consequences upon those liberties which have resulted from the Court's use of such concepts. The present case graphically illustrates those consequences when it is stripped of the ambiguous legal formulations which have been imposed upon it and considered in the context in which it actually arose—the conduct of Dr. Uphaus as an individual.
10
He is a citizen of this country by birth. Throughout the nearly seventy years of his life, evidently from early boyhood, he has been a deeply religious person. The record shows his active membership in and official service for various Methodist churches in the communities where he has lived. The value of that membership and those services is attested by affidavits filed by the pastors of those churches. The record further indicates, without dispute, that he is a man whose life has been dedicated to the principles of his religion. He holds a degree as a Doctor of Theology. He taught religious education at Yale University and was associated with the Religion and Labor Foundation for a number of years. Over the years, his religious faith manifested itself in an increasing opposition to war. It was this belief which led him, in 1952, to become the Director of World Fellowship, Inc., a summer camp operated, he says, in the interest of promoting the ideas of pacifism.
11
Almost immediately upon his arrival at World Fellowship, Dr. Uphaus came under the fire of an investigation being conducted by the Attorney General of New Hampshire, apparently on the theory that World Fellowship was frequented by 'subversive' persons. Eventually, as the Director of World Fellowship, he was called before the Attorney General to testify. At the very outset of the hearing before the Attorney General, he expressed a complete willingness to answer any question concerning himself, including any views he might hold or any actions he might have taken with regard to any subject. In addition, he expressed a willingness to give the Attorney General any information which might be wanted in regard to the subject matter of any speeches made at World Fellowship. But he absolutely refused to give the Attorney General: (1) a list of the nonprofessional employees of the camp; (2) a list of all the guests who had stayed at the camp; and (3) his personal correspondence with the speakers who had appeared at the camp. Upon being met with this refusal, the Attorney General sought a court order requiring Dr. Uphaus to produce these items. At the resulting hearing, the court, apparently viewing the request of the Attorney General for the names of the camp's dishwashers and floor sweepers as totally unreasonable and being uncertain as to the legal amenability to subpoena of the correspoundence, ordered Dr. Uphaus to produce only the names of the guests. This, Dr. Uphaus persisted, he could not do, resting his refusal upon the following reasons, to which he has adhered throughout this long ordeal: (1) because 'by the direct teachings of the Bible * * * it is wrong to bear false witness against my brother; and in as much as I have no reason to believe that any of these persons whose names have been called for have in any sense hurt this state or our country, I have reason to believe that they should not be in the possession of the Attorney General'; (2) because 'the social teachings of the Methodist Church teach us clearly and specifically that we in the United States should stand up and uphold civil and religious rights; and in particular, it condemns guilt by association';7 and (3) because 'I love this document (the Bill of Rights) and I propose to uphold it with the full strength and power of my spirit and intelligence.'
12
Nonetheless, the order to produce was upheld and Dr. Uphaus was imprisoned for his failure to comply with it. As a result, he has been in jail since last December 14 under a judgment which sentenced him to imprisonment for one year or until such time as he would comply with the order to produce. His plight, however, is even worse than would normally be indicated by that sentence in that there can be no assurance at all that he will be released at the end of the year specified. The Attorney General of New Hampshire insists, notwithstanding the recent legislation reducing his powers, that he has a right to continue all investigations presently pending, and the Supreme Court of New Hampshire apparently agrees with him. This Court, by its action today, necessarily takes the position that this serious abridgment of the rights of free speech and peaceable assembly does not even raise a substantial federal question. As a result, it is entirely possible that Dr. Uphaus will be subjected to new questioning and forced into a new 'contempt' as soon as he serves out this year's imprisonment. The brief filed by the Attorney General of New Hampshire makes it appear that he has every intention of doing just that. Thus, a distinct possibility exists that this man who, at least so far as these records show, has never committed a single crime, nor even so much as an immoral act, faces imprisonment for the rest of his life. This simply because he has refused to violate his religious principles and sacrifice his constitutional rights by disclosing the names of those with whom he has peaceably assembled to discuss public affairs in this country.
13
In this respect, the predicament of Dr. Uphaus may be likened to that of the defendant in the famous Sheriff's Case before the House of Lords in 1767.8 There the City of London sought to prosecute a religious dissenter for refusing to serve in the office of sheriff as required by its by-laws. The defense was that the Corporation Act9 would have made it a crime for a dissenter to serve in that office for it required an oath from all office holders that they had taken the sacraments of the Church of England within the year. The dilemma of the dissenter was vividly described by Lord Mansfield in stating his views on the case:
14
'Make a law to render them incapable of office; make another, to punish them for not serving. * * * If they accept, punish them; if they refuse, punish them; if they say, yes, punish them; if they say, no, punish them. My Lords, this is a most exquisite dilemma, from which there is no escaping; it is a trap a man cannot get out of; it is as bad persecution as the bed of Procrustes: If they are too short, stretch them; if they are too long, lop them.'10
15
This technique of putting unorthodox groups into a position where their only real choice is between various alternative punishments (a technique the prevalence of which today extends far beyond the borders of New Hampshire) is strikingly similar to that being utilized here against Dr. Uphaus. If he testifies, his friends will suffer; if he refuses to testify, he goes to jail. The dilemma is truly one 'from which there is no escaping' for a man who, like Dr. Uphaus or like the religious dissenter in the Sheriff's Case, cannot bring himself to sacrifice either his religious principles or his legal rights.
16
That case also serves to highlight a most unfortunate aspect of the decision in this case. For there, nearly two hundred years ago and in England where there was no Bill of Rights, the House of Lords refused to countenance the use of that technique. They held it to be inconsistent with the Toleration Act11 by which Parliament had guaranteed religious freedom even though the terms of that guarantee were far less sweeping and more limited in application than the absolute commands of our First Amendment. In my view, the majority's disposition of this case, reducing as it does those absolute commands to mere admonitions, means that our First Amendment amounts to something less as a charter of freedom than England's Toleration Act was held to be. This in the very face of the indisputable historical fact that one of the primary reasons for the establishment of this country was the desire of early settlors to escape religious persecution.
17
I do not suggest, of course, that this imprisonment of Dr. Uphaus is without precedent in history. Indeed, I am painfully aware that there are a multitude of such precedents extending from many centuries back in the past and continuing forward in an almost unbroken line to the present day. There is, for example, the case of the Puritan minister John Udall in 1590, a case which bears a strong similarity to that of Dr. Uphaus. Udall was called before a court in connection with the investigation of the authorship of certain religious tracts which, in the words of one of the judges, 'tend(ed) to the overthrowing of the State, and the moving of Rebellion.'12 That court sought to force Udall to disclose the identity of other Puritans so that it might question them as to the authorship of the tracts. In refusing to divulge the demanded names, Udall gave his reasons in a statement not unlike that of Dr. Uphaus before the New Hampshire court. 'I will take an oath of allegiance to her majesty, wherein I will acknowledge her supremacy according to statute, and promise my obedience as becometh a subject; but to swear to accuse myself or others, I think you have no law for it.'13 Udall, like Dr. Uphaus, was sentenced to jail for civil contempt under a judgment which ordered his imprisonment until such time as he would consent to testify.14 But such coercion was as ineffective in that case as it has been to date in this. Udall's dauntless spirit was never broken even though his body was. He died in prison within a few years.
18
It would not be difficult to point out many other cases such as that of Udall, but I will content myself with one other. Some seventy years after John Udall's experiences, there was a dissenting preacher in England named John Bunyan. He was arrested for preaching and efforts were made to get him to agree not to preach any more. He refused to be coerced into silence. The result was that he was put through a kind of trial15 and sentenced to prison for holding 'several unlawful (religious) meetings * * * to the great disturbance and distraction of the good subjects of this kingdom * * *.'16 In Bunyan's case the imprisonment lasted 12 years, and it was during those 12 years that he gave to the world The Pilgrim's Progress.17 One of the judges who acquiesced18 in the imprisonment of Bunyan was Sir Matthew Hale, later Lord Chief Justice Hale, a man described by Lord Campbell as 'one of the most pure, the most pious, the most independent, and the most learned' Chief Justices England ever had.19 That this description is not entirely unjustified, despite the fact that his record was also marred by the part he took in the conviction and sentencing to death of two unfortunate women as witches,20 is, I think, a tragic commentary upon the record of the judiciary, during that period, in discharging its duty to protect civil liberties. It is perhaps one of the ironies of history that the name of John Bunyan, a poor tinker and preacher, is at least as well known and respected today as that of the great Chief Justice of England who permitted him to languish in jail.
19
My guess is that history will look with no more favor upon the imprisonment of Willard Uphaus than it has upon that of Udall, Bunyan or the many others like them. For this is another of that everlengthening line of cases where people have been sent to prison and kept there for long periods of their lives because their beliefs were inconsistent with the prevailing views of the moment. I believe the First and Fourteenth Amendments were intended to prevent any such imprisonments in this country. The grounds urged by the Attorney General of New Hampshire here are, as shown by the cases of Udall and Bunyan, precisely those that have always been urged for throwing dissenters in jail, namely, that they are a menace to the community and it is dangerous to leave them free. It may be true, as the Attorney General of New Hampshire suspects, that Dr. Uphaus has at some time been in the company of Communists, or that the people who have been in his camp have been in the company of Communists. But even if it is true and those associates are as bad as they are suspected to be, it is my belief that our Constitution with its Bill of Rights absolutely forbids the imposition of pains and penalties upon him for peaceably assembling with them. That great charter was drafted by men who were well aware of the constant danger to individual liberty in a country where public officials are permitted to harass and punish people on nothing more than charges that they associate with others labeled by the Government as publicans and sinners.
20
Mr. Justice DOUGLAS, with whom THE CHIEF JUSTICE and Mr. Justice BLACK concur, dissenting.
21
I would note jurisdiction in this case for several reasons.
22
First. Dr. Uphaus is in prison for civil contempt for failure to deliver to a state investigating agency lists which he claims are constitutionally protected from disclosure. On June 8, 1959, we affirmed his conviction in the state courts of New Hampshire by a divided vote. Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090. Following the remand in that case, Uphaus was given a further hearing at which questions never before presented to us were raised. The law under which Uphaus is committed was N.H.Laws 1953, c. 307; N.H.Laws 1955, c. 197, c. 340, directing the Attorney General 'to determine whether subversive persons * * * are presently located within this state.' That law, however, no longer exists. For in 1957 the authority of the Attorney General of New Hampshire was limited to making investigations of violations of law. N.H.Laws 1957, c. 178. As respects this change in legislation, the New Hampshire Supreme Court on June 27, 1960, said:1
23
'Our opinion of March 31, 1960,2 did not turn upon any holding that RSA 588:8—a provided an extension of the legislative investigation first authorized in 1953. The plaintiff stands committed for refusal, while Laws 1955, c. 197, was still in effect, to comply with an order entered prior to enactment of RSA 588:8—a.'
24
The majority conclude that this is a ruling on local law only and therefore presents no federal question. That plainly would be right if this were a commitment for criminal contempt and if it may be constitutionally imposed. The expiration of a law normally would be no defense to violations committed while it was in force. But this is a case of civil contempt used for its coercive authority to make the defendant produce the documents which were demanded. In such a case the defendant carries the keys to freedom in his own pocket, as pointed out in Uphaus v. Wyman, supra, 360 U.S. at page 81, 79 S.Ct. at page 1046. But the requirement to produce assumes that their production is relevant to some interest of the State. As stated in Uphaus v. Wyman, supra, 360 U.S. at page 78, 79 S.Ct. at page 1045:
25
'What was the interest of the State? The Attorney General was commissioned to determine if there were any subversive persons within New Hampshire. The obvious starting point of such an inquiry was to learn what persons were within the State. It is therefore clear that the requests relate directly to the Legislature's area of interest, i.e., the presence of subversives in the State, as announced in its resolution.' That interest no longer exists, by reason of the statutory change that I have noted. The Supreme Court of New Hampshire in its opinion of June 27, 1960, quoted above, concedes that it does not rely on 'an extension of the legislative investigation first authorized in 1953.' 102 N.H. at page 518, 162 A.2d at page 612. In other words, the Attorney General is no longer authorized to investigate whether 'subversive persons' are present in the State. That is to say, the answers are no longer relevant to any existing legislative project.
26
Thus a new and important question is presented in this second appeal which is now filed with us. May a person be incarcerated for civil contempt for failure to produce documents to a legislative committee when the committee is no longer authorized to investigate the matter? If, of course, the 1957 Act extended this authority respecting pending cases, the conclusion of the majority that the question is a local, nonfederal one, so far as the contempt issue is concerned, would obviously be correct. But the opinion of the Supreme Court of New Hampshire rendered June 27, 1960, rejects that construction of the New Hampshire statutes. It treats the offense as completed while the earlier Act was in force. I can read its opinion of June 27, 1960, to mean only that it considered the case as if it involved criminal rather than civil contempt. For the criteria it considered relevant have no apparent pertinency when an issue of civil contempt is tendered.
27
Are the principles announced in Uphaus v. Wyman, supra, applicable to criminal as well as to civil contempt? Perhaps so. But the careful delineation of the issues in that case made by my Brother CLARK, who wrote for the majority, restricts the case to civil contempt. As appellant states in his brief, the conditional nature of a civil contempt order 'makes tolerable the omission, from civil contempt proceedings, of many of the procedural safeguards with which criminal proceedings are hedged about * * *.' Are the due process problems no different when the prisoner, who invokes the First Amendment, can go to prison for 10 years or for life and when he has the keys to the prison in his own pocket? If the two cases are not different, then local law questions decide the case. But we should not decide without argument that there is no difference in due process terms between the two cases.
28
The Supreme Court of New Hampshire in its June 27, 1960, opinion stresses that the point now pressed was 'not presented in the pending proceedings at any time, until first advanced before the Superior Court on December 14, 1959, the day on which the order of committal was entered.' 102 N.H. at page 518, 162 A.2d at page 612. That seems to be true. But no waiver of the point appears to have been made. It is true that at the hearing counsel for Uphaus stated that his client had a legal duty to comply.
29
'Your Honor please, it is not our purpose to deny that Willard Uphaus is under legal obligation to answer the question which has been propounded to him. We have explained to him his legal obligation, and he understands it. It is our contention that this is a real matter of conscience; that he feels bound to a higher obligation even than the direction of the court * * *. We are not contending at all that he is not obligated to answer the question.'
30
But the transcript makes clear that the attorneys for Uphaus made two separate points. First, they argued that the 1957 amendment to the statute deprived the Attorney General of his power to investigate the presence of 'subversive persons' in New Hampshire and therefore that commitment for civil contempt was no longer permissible. A motion to dismiss on that ground was argued and denied, an exception being noted. As a second and separate point, evidence was offered and argument made concerning the duration of the sentence. It was during the presentation of this point that the statement, now claimed to be a waiver, was made. Whether imprisonment for civil contempt can constitutionally be imposed in light of the statutory changes affecting the 'area of interest' of the legislature, Uphaus v. Wyman, supra, 360 U.S. at page 78, 79 S.Ct. at page 1045, and the Attorney General's powers is a question which never had been waived. It is earnestly pressed. Moreover, if there is now no basis for civil contempt, is criminal contempt constitutionally available? These are substantial questions never resolved, as far as I know, in any of our prior decisions.
31
Second. Recently, when Alabama asked the National Association for the Advancement of Colored People to disclose its membership list, we held that disclosure was not required because, if compelled, it might well abridge the rights of members to engage in lawful association in support of their common beliefs. We said in National A.A.C.P. v. State of Alabama, 357 U.S. 449, 462, 78 S.Ct. 1163, 1171, 2 L.Ed.2d 1488:
32
'It is hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy way constitute as effective a restraint on freedom of association as the forms of governmental action in the cases above were thought likely to produce upon the particular constitutional rights there involved. This Court has recognized the vital relationship between freedom to associate and privacy in one's associations. When referring to the varied forms of governmental action which might interfere with freedom as assembly, it said in American Communications Assn. v. Douds, 339 U.S. 382, at 402, (70 S.Ct. 674, at page 686, 94 L.Ed.2d 925): 'A requirement that adherents of particular religious faiths or political parties wear identifying arm-bands for example, is obviously of this nature.' Compelled disclosure of membership in an organization engaged in advocacy of particular beliefs is of the same order.
33
Inviolability of privacy in group association may in many circumstances be indispensable to preservation of freedom of association, particularly where a group espouses dissident beliefs. Cf. United States v. Rumely, (345 U.S. 41), at 56—58 (73 S.Ct. 543, at pages 550—551, 97 L.Ed. 770) (concurring opinion).'
34
What we there said was not designed, as I understood it, as a rule for Negroes only. The Constitution favors no racial group no political or social group. The group, with which Dr. Uphaus was associated and whose membership list he refused to disclose is entitled under the First Amendment to the same protection as the N.A.A.C.P. No groundwork whatever was laid in any of the records before us that World Fellowship, Inc., was at any time engaged in any conduct that could be called unlawful.
35
We had National A.A.C.P. v. State of Alabama, supra, before us when the Uphaus case was decided. It involved rights of the organization itself to defy those who wanted its membership lists. Not until later, however, did we have the case where as individual who possessed membership lists challenged the right of government to demand their production. In Bates v. City of Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480, decided after we handed down our decision in the Uphaus case, we reversed a state conviction of custodians of the records of local branches of N.A.A.C.P. for refusing to disclose its membership lists to city officials. We said:
36
'On this record it sufficiently appears that compulsory disclosure of the membership lists of the local branches of the National Association for the Advancement of Colored People would work a significant interference with the freedom of association of their members. There was substantial uncontroverted evidence that public identification of persons in the community as members of the organizations had been followed by harassment and threats of bodily harm.
37
There was also evidence that fear of community hostility and economic reprisals that would follow public disclosure of the membership lists had discouraged new members from joining the organizations and induced former members to withdraw. This repressive effect, while in part the result of private attitudes and pressures, was brought to bear only after the exercise of governmental power had threatened to force disclosure of the members' names. N.A.A.C.P. v. Alabama, 357 U.S., at 463, (78 S.Ct. at page 1172). Thus, the threat of substantial government encroachment upon important and traditional aspects of individual freedom is neither speculative nor remote.' Id., 361 U.S. at pages 523—524, 80 S.Ct. at page 417.
38
Can there by any doubt that harassment of members of World Fellowship, Inc., in the climate prevailing among New Hampshire's law-enforcement officials will likewise be severe?3 Can there be any doubt that its members will be as closely pursued as might be members of N.A.A.C.P. in some communities? If either N.A.A.C.P. or World Fellowship were engaged in criminal activity, we would have a different problem. But neither is shown to be. World Fellowship, so far as this record shows, is as law-abiding as N.A.A.C.P. The members of one are entitled to the same freedom of speech, of press, of assembly, and of association as the members of the other. These rights extend even to Communists, as a unanimous Court held in De Jonge v. State of Oregon, 299 U.S. 353, 57 S.Ct. 255, 81 L.Ed. 278.4
39
What is an unconstitutional invasion of freedom of association in Alabama or in Arkansas should be unconstitutional in New Hampshire. All groups—white or colored—engaged in lawful conduct are entitled to the same protection against harassment as the N.A.A.C.P. enjoys. Since we allowed in the Bates case the protection we deny here and since Bates was decided after we decided Uphaus' case, we should reconsider our earlier decision in this case. The Bates case and the Uphaus case put into focus for the first time the responsibility of an individual to make disclosure of membership lists. We cannot administer justice with an even hand if we allow Bates to go free and Uphaus to languish in prison.
40
For these reasons, as well as those advanced by Mr. Justice BLACK, which I wholly share, I would note probable jurisdiction of this appeal. And Dr. Uphaus should, of course, be released on bail pending resolution of the questions by the Court.
1
As indicated by my concurrence in the opinion of Mr. Justice DOUGLAS, I think the better interpretation of that holding is that it rests upon the theory that the imprisonment is for criminal contempt, and I think that Mr. Justice DOUGLAS conclusively demonstrates that if that is so, this Court cannot properly refuse review of that imprisonment. But the Court's dismissal of the appeal is an implicit holding that the New Hampshire Supreme Court's action rests upon the civil contempt theory. Even upon that view, however, I think the present appeal raises federal questions both new and substantial.
2
Implicit, of course, in the Court's order dismissing this appeal because the judgment is based on a nonfederal ground is the holding that the federal questions actually presented are insubstantial.
3
360 U.S. at page 78, 79 S.Ct. at page 1045.
4
My opinion of this balancing process, when applied as here to justify direct abridgments of First Amendment freedoms, has been fully expressed in previous cases. See, e.g., Barenblatt v. United States, 360 U.S. 109, 141—146, 79 S.Ct. 1081, 1100—1103, 3 L.Ed.2d 1115 (dissenting opinion), Beauharnais v. People of State of Illinois, 343 U.S. 250, 268—270, 274—275, 72 S.Ct. 725, 736 737, 739—740, 96 L.Ed. 919 (dissenting opinion).
5
Thus, the case falls squarely within the holding of this Court in United States v. Lovett, 328 U.S. 303, 315—316, 66 S.Ct. 1073, 1078—1079, 90 L.Ed. 1252, in that it imposes special pains and penalties upon an easily ascertainable group.
6
See, e.g., Beauharnais v. Illinois, 343 U.S. 250, 72 S.Ct. 725; Rochin v. People of State of California, 342 U.S. 165, 72 S.Ct. 205, 96 L.Ed. 183; American Communications Ass'n v. Douds, 339 U.S. 382, 70 S.Ct. 674, 94 L.Ed. 925.
7
At the hearing upon remand of these proceedings to the New Hampshire courts following this Court's affirmance of the first contempt order, Dr. Uphaus expanded this second reason to encompass the teachings of all religions. Relying upon a recent article by a Professor of Church History at Harvard University, Williams, Reluctance To Inform, 14 Theology Today 229, Dr. Uphaus argued that his position with respect to informing against his friends is required by the historic traditions of all religions. That article pointed to the indisputable truth that religious groups have time and again resorted to a refusal to inform as a shield against persecution.
8
Harrison v. Evans, 1 Eng.Rep. 1437.
9
13 Charles II, c. I.
10
Lord Mansfield's statement does not appear in the report of the case cited above. It is, however, fully reproduced in The Palladium of Conscience, a collection of writings on religious liberty, at 142, 153.
11
1 William & Mary, c. XVIII.
12
1 Howell's State Trials 1271, 1294.
13
Id., at 1275.
14
Id., at 1276. Although the term 'civil contempt' was not used, the following colloquy reported between Udall and the Bishop of Rochester, one of the judges at his trial, makes it clear that such was the nature of his sentence:
'Roch. The day is past, and we must make an end: will you take the oath?
'U. I dare not take it.
'Roch. Then you must go to prison, and it will go hard with you, for you must remain there until you be glad to take it.'
15
See Bunyan's own report of the events surrounding his imprisonment, A Relation of the Imprisonment of Mr. John Bunyan, in Grace Abounding and The Pilgrim's Progress, at 103—132 (Brown ed., 1907).
16
Id., at 114.
17
Brown, John Bunyan, at 253—262, casts some doubt upon this traditional version of the genesis of The Pilgrim's Progress by suggesting that it was written, not during this 12 years' imprisonment, but a few years later during another shorter incarceration. See, also, Encyclopedia Britannica, Vol. IV, at 392 (1957 ed.); Dictionary of National Biography, Vol. III, at 280.
18
It is difficult to ascertain with precision the extent of Hale's part in this matter. He was not one of the judges who conducted such trial as Bunyan was accorded, which resulted in his prison sentence. But, several months later, he, with Justice Twisden, was presented with a petition challenging the legality of Bunyan's conviction and seeking his release. The colloquy between Mrs. Bunyan, who presented that petition, and the two judges is reported in Bunyan, A Relation of the Imprisonment, supra, from which it appears that Hale was quite sympathetic to Bunyan's plight. Nonetheless, he refused to order his release, apparently on the belief that he was powerless to do so. Thus he is quoted as having said: 'I am sorry, woman, that I can do thee no good; thou must do one of those three things aforesaid, namely; either to apply thyself to the King, or sue out his pardon, or get a writ of error * * *.' Id., at 130. An accurate evaluation of the legal correctness of Hale's position is difficult but it may be pointed out that it is inconsistent with the claim made in Bunyan's report that his wife had previously petitioned the House of Lords and had been told that the question of her husband's release had been placed in the hands of the judges at the next assize (the assize at which Hale and Twisden were sitting), and also with a statement attributed to Justice Twisden by that report: 'What, will your husband leave preaching? If he will do so, then send for him.' Id., at 128. On the other hand, Judge Hale's refusal to act without a 'writ of error' was consistent with the general judicial attitude of caution attributed to him in 3 Hallam, The Constitutional History of England, at 214 (2d ed., 1829). Hallam there criticized English lawyers for 'dwell(ing) on the authorities of sir Edward Coke and sir Matthew Hale' in treason cases because 'these eminent men, and especially the latter, aware that our law is mainly built on adjudged precedent, and not daring to reject that which they would not have themselves asserted, will be found to have rather timidly exercised their judgment in the construction of this statute, yielding a deference to former authority which we have transferred to their own.' For a sympathetic treatment of Hale's part in the Bunyan case, see 2 Campbell, Lives of the Chief Justices of England, 219—222.
19
2 Campbell, Lives of the Chief Justices of England, at 171. See also Burnett, The Life and Death of Sir Matthew Hale; Foss, The Judges of England, at 105—116; Dictionary of National Biography, Vol. VIII, at 902—908.
20
See 6 Howell's State Trials 687.
1
Uphaus v. Wyman, 102 N.H. 517, 518, 162 A.2d 611, 612.
2
Wyman v. Uphaus, 102 N.H. 461, 159 A.2d 160.
3
The Attorney General of New Hampshire in the motion to dismiss in this case states, 'Those who voluntarily and knowingly appear with, consult with, confer with, attend functions with and otherwise act in concert with Communists or former Communists in America cannot possibly have any reasonable right of privacy in regard to such activities * * *.'
4
Chief Justice Hughes wrote for the Court in that case:
'The greater the importance of safeguarding the community from incitements to the overthrow of our institutions by force and violence, the more imperative is the need to preserve inviolate the constitutional rights of free speech, free press and free assembly in order to maintain the opportunity for free political discussion, to the end that government may be responsive to the will of the people and that changes, if desired, may be obtained by peaceful means. Therein lies the security of the Republic, the very foundation of constitutional government.
'It follows from these considerations that, consistently with the Federal Constitution, peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for peaceable political action cannot be proscribed. Those who assist in the conduct of such meetings cannot be branded as criminals on that score. The question, if the rights of free speech and peaceable assembly are to be preserved, is not as to the auspices under which the meeting is held but as to its purpose; not as to the relations of the speakers, but whether their utterances transcend the bounds of the freedom of speech which the Constitution protects.' 299 U.S. at page 365, 57 S.Ct. at page 260.
| 23
|
364 U.S. 350
81 S.Ct. 147
5 L.Ed.2d 120
Peter CHAUNT, Petitioner,v.UNITED STATES.
No. 22.
Argued Oct. 17, 1960.
Decided Nov. 14, 1960.
Mr. Joseph Forer, Washington, D.C., for petitioner.
Mr. Maurice A. Roberts, Washington, D.C., for respondent.
Opinion of the Court by Mr. Justice DOUGLAS, announced by Mr. Justice HARLAN.
1
Petitioner, a native of Hungary, was admitted to citizenship by a decree of the District Court in 1940. Respondent filed a complaint to revoke and set aside that order as authorized by § 340(a) of the Immigration and Nationality Act of 1952, 66 Stat. 260, as amended, 68 Stat. 1232, 8 U.S.C. § 1451(a), 8 U.S.C.A. § 1451(a), on the ground that it had been procured 'by concealment of a material fact or by willful misrepresentation.'1 The complaint stated that petitioner had falsely denied membership in the Communist Party and that by virtue of that membership he lacked the requisite attachment to the Constitution, etc., and the intent to renounce foreign allegiance. It also alleged that petitioner had procured his naturalization by concealing and misrepresenting a record of arrests. The District Court cancelled petitioner's naturalization, finding that he had concealed and misrepresented three matters—his arrests, his membership in the Communist Party, and his allegiance. The Court of Appeals affirmed, reaching only the question of the concealment of the arrests. 9 Cir., 270 F.2d 179. The case is here on a writ of certiorari. 362 U.S. 901, 80 S.Ct. 610, 4 L.Ed.2d 554.
2
One question, on a form petitioner filled out in connection with his petition for naturalization, asked if he had ever been 'arrested or charged with violation of any law of the United States or State or any city ordinance or traffic regulation' and if so to give full particulars. To this question petitioner answered 'no.' There was evidence that when he was questioned under oath by an examiner he gave the same answer. There was also evidence that if his answer has been 'yes,' the investigative unit of the Immgration Service would check with the authorities at the places where the arrests occurred 'to ascertain * * * whether the full facts were stated.'
3
The District Court found that from 10 to 11 years before petitioner was naturalized he had been arrested three times as follows:
4
(1) On July 30, 1929, he was arrested for distributing handbills in New Haven, Connecticut, in violation of an ordinance. He pleaded not guilty and was discharged.
5
(2) On December 21, 1929, he was arrested for violating the park regulations in New Haven, Connecticut, by making 'an oration, harangue, or other public demonstration in New Haven Green, outside of the churches.' Petitioner pleaded not guilty. Disposition of the charge is not clear, the notation on the court record reading 'Found J.S.' which respondent suggests may mean 'Judgment Suspended' after a finding of guilt.
6
(3) On March 11, 1930, he was again arrested in New Haven and this time charged with 'General Breach of the Peace.' He was found guilty by the City Court and fined $25. He took an appeal and the records show 'nolled April 7, 1930.'
7
Acquisition of American citizenship is a solemn affair. Full and truthful response to all relevant questions required by the naturalization procedure is, of course, to be exacted, and temporizing with the truth must be vigorously discouraged. Failure to give frank, honest, and unequivocal answers to the court when one seeks naturalization is a serious matter. Complete replies are essential so that the qualifications of the applicant or his lack of them may be ascertained. Suppressed or concealed facts, if known, might in and of themselves justify denial of citizenship. Or disclosure of the true facts might have led to the discovery of other facts which would justify denial of citizenship.
8
On the other hand, in view of the grave consequences to the citizen, naturalization decrees are not lightly to be set aside the evidence must indeed be 'clear, unequivocal, and convincing' and not leave 'the issue in doubt.' Schneiderman v. United States, 320 U.S. 118, 125, 158, 63 S.Ct. 1333, 1336, 1352, 87 L.Ed. 1796; Baumgartner v. United States, 322 U.S. 665, 670, 64 S.Ct. 1240, 1243, 88 L.Ed. 1525. The issue in these cases is so important to the liberty of the citizen that the weight normally given concurrent findings of two lower courts does not preclude reconsideration here, for we deal with 'judgments lying close to opinion regarding the whole nature of our government and the duties and immunities of citizenship.' Baumgartner v. United States, supra, 322 U.S. 671, 64 S.Ct. 1243, 1244. And see Klapprott v. United States, 335 U.S. 601, 612 and (concurring opinion) 617, 69 S.Ct. 384, 389, 391, 93 L.Ed. 266.
9
While disclosure of them was properly exacted, the arrests in these cases were not reflections on the character of the man seeking citizenship. The statute in force at the time of his naturalization required that 'he has behaved as a person of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States' during the previous five years.2 These arrests were made some years prior to the critical five-year period. They did not, moreover, involve moral turpitude within the meaning of the law. Cf. Jordan v. De George, 341 U.S. 223, 71 S.Ct. 703, 95 L.Ed. 886. No fraudulent conduct was charged. They involved distributing handbills, making a speech, and a breach of the peace. In one instance he was discharged, in one instance the prosecution was 'nolled,' and in the other (for making a speech in a park in violation of city regulations) he apparently received a suspended sentence. The totality of the circumstances surrounding the offenses charged makes them of extremely slight consequence. Had they involved moral turpitude or acts directed at the Government, had they involved conduct which even peripherally touched types of activity which might disqualify one from citizenship, a different case would be presented. On this record the nature of these arrests, the crimes charged, and the disposition of the cases do not bring them, inherently, even close to the requirement of 'clear, unequivocal, and convincing' evidence that naturalization was illegally procured within the meaning of § 340(a) of the Immigration and Nationality Act.
10
It is argued, however, that disclosure of the arrests made in New Haven, Connecticut, in the years 1929 and 1930 would have led to a New Haven investigation at which leads to other evidence—more relevant and material than the arrests—might have been obtained. His residence in New Haven was from February 1929 to November 1930. Since that period was more than five years before his petition for naturalization, the name of his employer at that time was not required by the form prepared by the Service. It is now said, however, that if the arrests had been disclosed and investigated, the Service might well have discovered that petitioner in 1929 was 'a district organizer' of the Communist Party in Connecticut. One witness in this denaturalization proceeding testified that such was the fact. An arrest, though by no means probative of any guilt or wrongdoing, is sufficiently significant as an episode in a man's life that it may often be material at least to further enquiry. We do not minimize the importance of that disclosure. In this case, however, we are asked to base materiality on the tenuous line of investigation that might have led from the arrests to the alleged communistic affiliations, when as a matter of fact petitioner in this same application disclosed that he was an employee and member of the International Workers' Order, which is said to be controlled by the Communist Party. In connection with petitioner's denial of such affiliations, respondent argues that since it was testified that the IWO was an organization controlled and dominated by the Communist Party, it is reasonable to infer that petitioner had those affiliations at the time of the application. But by the same token it would seem that a much less tenuous and speculative nexus with the Communist Party, if it be such, was thereby disclosed and was available for further investigation if it had been deemed appropriate at the time. Cf. United States v. Anastasio, 3 Cir., 226 F.2d 912. It is said that IWO did not become tainted with Communist control until 1941. We read the record differently. If the Government's case is made out, that taint extended back at least as far as 1939. Had that disclosure not been made in the application, failure to report the arrests would have had greater significance. It could then be forcefully argued that failure to disclose the arrests was part and parcel of a project to conceal a Communist Party affiliation. But on this record, the failure to report the three arrests occurring from 10 to 11 years previously is neutral. We do not speculate as to why they were not disclosed. We only conclude that, in the circumstances of this case, the Government has failed to show by 'clear, unequivocal, and convincing' evidence either (1) that facts were suppressed which, if known, would have warranted denial of citizenship or (2) that their disclosure might have been useful in an investigation possibly leading to the discovery of other facts warranting denial of citizenship.
11
There are issues in the case which we do not reach and which were not passed upon by the Court of Appeals. Accordingly the judgment will be reversed and the cause remanded to it so that the other questions raised in the appeal may be considered. It is so ordered.
12
Judgment reversed and cause remanded.
13
Mr. Justice CLARK, with whom Mr. Justice WHITTAKER and Mr. Justice STEWART join, dissenting.
14
Petitioner swore in his application for naturalization that he had never been under arrest when in fact he had been arrested in New Haven, Connecticut, on three separate occasions within an eight-month period. The arrests were for distributing handbills in a public street, making 'an oration, harangue, or other public demonstration' in a public park and a 'general breach of the peace.' Both the District Court and the Court of Appeals have found that petitioner's falsification 'was an intentional concealment of a material fact and a willful misrepresentation which foreclosed the Immigration and Naturalization Service and the district court from making a further investigation as to whether he had all the qualifications for citizenship * * *.' (270 F.2d 182.) These findings, as such, are not disputed. It is nowhere suggested, for example, that the petitioner's falsehoods were the result of inadvertence or forgetfulness—that they were anything but deliberate lies. This Court, however, brushes these findings aside on the ground1 that the arrests 'were not reflections on the character of the man seeking citizenship.' The Swiss philosopher Amiel tells us that 'character is an historical fruit and it is result of a man's biography.' Petitioner's past, if truthfully told in his application, would have been an odorous one. So bad that he dared not reveal it. For the Court to reward his dishonesty is nothing short of an open invitation to false swearing to all who seek the high privilege of American citizenship.
15
The Court first says that arrests of this nature, 'the crimes charged, and the disposition of the cases do not bring them, inherently, even close to the requirement of 'clear, unequivocal, and convincing' evidence that naturalization was illegally procured.' The Court, of course, knows that this is not the applicable test where one has deliberately falsified his papers and thus foreclosed further investigation. This basis for the reversal, therefore, misses the point involved and should have been of no consequence here.
16
The test is not whether the truthful answer in itself, or the facts discovered through an investigation prompted by that answer, would have justified a denial of citizenship. It is whether the falsification, by misleading the examining officer, forestalled an investigation which might have resulted in the defeat of petitioner's application for naturalization. The Courts of Appeal are without disagreement on this point2 and it is, of course, a necessary rule in order to prevent the making of misrepresentations for the very purpose of forestalling inquiry as to eligibility. The question as to arrests is highly pertinent to the issue of satisfactory moral character, the sine qua non of good citizenship. Petitioner's false answer to the question shut off that line of inquiry and was a fraud on the Government and the naturalization court. The majority makes much of the fact that the arrests occurred prior to the five-year statutory period of good behavior, but that is of no consequence. Concealment at the very time of naturalization is the issue here and that act of deliberate falsification before an officer of the Government clearly relates to the petitioner's general moral character. Indeed, the Congress has long made it a felony punishable by imprisonment for a maximum of five years. Certainly this does not fall within a class of peccadilloes which may be overlooked as being without 'reflections on the character of the man seeking citizenship.' In fact it strips and offender of all civil rights and leaves a shattered character that only a presidential pardon can mend.
17
The Court concludes that the false denial of prior arrests was 'neutral' because the petitioner revealed in his preliminary application that he was an employee of the International Workers Order, which the Court adds, 'is said to be controlled by the Communist Party.' What the Court fails to point out is that the sole evidence, in this record, as to the International Workers Order was presented in 1955, 15 years after petitioner's deception of the examiner. There is no evidence that the examiner knew anything about that organization other than what petitioner had told him. And there is nothing whatever in the record that would have even indicated that I.W.O. was communistic in 1940. What was there to prompt the examiner to investigate it at that time? The truth of the matter is that in his final naturalization application petitioner said he was employed by the 'Fraternal Benefit Society of Internation (sic) Workers Order,' a name which would lead one to believe that it was an insurance society. Surely the Court is not charging the examiner and the naturalization court with the dereliction of admitting petitioner to our citizenship knowing that he was connected with a Communist organization. In fact the testimony at the trial indicates that the Communist Party did not take over the leadership of the International Workers Order until 1941,3 a year after petitioner was naturalized. It is also well to remember that the Attorney General did not list it as subversive until 1947, although lists of subversive organizations had been issued prior to that date.
18
As I read the record, it clearly supports the findings of the two courts below. Even if petitioner had told the truth, and the conduct causing the arrests was found not to relate to his present fitness for naturalization, it does not follow that citizenship would have been awarded. It might well have been that in checking on the handbills, the harangue in the public park, and the general breach of the peace the investigator would have been led to discover that petitioner was, in 1940, a leader in the Communist Party. I think it more logical than not that the Government would have discovered petitioner's Communist affiliations through such an investigation, and that the deliberate falsification in 1940 forestalled this revelation for 15 years. But whether or not that be the case, the Government was entitled to an honest answer from one who sought admission to its citizenship. We should exact the highest standards of probity and fitness from all applicants. American citizenship is a valuable right. It is prized highly by us who have it and it is sought eagerly by millions who do not. It is asking little enough of those who would be vested with its privileges to demand that they tell the truth.
19
I would affirm.
1
The section provides in relevant part:
'It shall be the duty of the United States attorneys for the respective districts, upon affidavit showing good cause therefor, to institute proceedings in any court specified in subsection (a) of section 310 of this title (§ 1421 of 8 U.S.C.) in the judicial district in which the naturalized citizen may reside at the time of bringing suit, for the purpose of revoking and setting aside the order admitting such person to citizenship and cancelling the certificate of naturalization on the ground that such order and certificate of naturalization were procured by concealment of a material fact or by willful misrepresentation, and such revocation and setting aside of the order admitting such person to citizenship and such canceling of certificate of naturalization shall be effective as of the original date of the order and certificate, respectively * * *.'
2
Section 4 of the Naturalization Act of June 29, 1906, 34 Stat. 598, as amended, 45 Stat. 1513—1514, now 8 U.S.C.A. § 1427(a).
1
The Court says that '(t)he totality of the circumstances surrounding the offenses charged makes them of extremely slight consequence.' However, it overlooks the fact that neither the content of the handbills or of the harangue in the park nor the nature of the conduct leading to the conviction in the city court for a general breach of the peace appears in the record. Time has served petitioner well, for even the disposition of the cases is not too clear. But to extrapolate the character of petitioner's conduct solely from these meager circumstances smacks of the psychic. Moreover, to say that the offenses 'did not * * * involve moral turpitude' is gratuitous. This Court has never so held.
2
Corrado v. United States, 6 Cir., 227 F.2d 780, certiorari denied, 351 U.S. 925, 76 S.Ct. 781, 100 L.Ed. 1455; United States v. Montalbano, 3 Cir., 236 F.2d 757, certiorari denied sub nom. Genovese v. United States, 352 U.S. 952, 77 S.Ct. 327, 1 L.Ed.2d 244; United States v. Lumantes, D.C.N.D.Cal., 139 F.Supp. 574, affirmed per curiam, 9 Cir., 232 F.2d 216; Stacher v. United States, 9 Cir., 258 F.2d 112, certiorari denied, 358 U.S. 907, 79 S.Ct. 232, 3 L.Ed.2d 228; United States v. Accardo, D.C.D.N.J., 113 F.Supp. 783, affirmed per curiam, 3 Cir., 208 F.2d 632, certiorari denied, 347 U.S. 952, 74 S.Ct. 677, 98 L.Ed. 1098. Cf. United States v. Sweet, D.C.E.D.Mich. 106 F.Supp. 634, 635, affirmed per curiam, 6 Cir., 211 F.2d 118, certiorari denied, 348 U.S. 817, 75 S.Ct. 28, 99 L.Ed. 644.
3
The sole witness on this point testified that 'in 1941 * * * a number of us from the Communist Party were sent into that organization by the Communist Party into leadership to give more political content and strength and guidance for that organization.'
| 12
|
364 U.S. 372
81 S.Ct. 138
5 L.Ed.2d 136
Arthur M. McPHAUL, Petitioner,v.UNITED STATES of America.
No. 33.
Argued Oct. 13, 1960.
Decided Nov. 14, 1960.
Rehearing Denied Dec. 12, 1960.
See 364 U.S. 925, 81 S.Ct. 282.
Mr. Ernest Goodman, Detroit, Mich., for petitioner.
Mr. Daniel M. Friedman, Washington, D.C., for respondent.
Mr. Justice WHITTAKER delivered the opinion of the Court.
1
We here review petitioner's conviction under 2 U.S.C. § 192, 2 U.S.C.A. § 1921 for willful failure to comply with a subpoena of the House of Representatives commanding him to produce certain records of the Civil Rights Congress before a Subcommittee of the House Committee on Un-American Activities. The principal question presented is whether th evidence justified the trial court's rulings that the records called for by the subpoena were in existence, subject to petitioner's control, and pertinent to the Committee's inquiry.
2
The relevant evidence was as follows. Having knowledge that the Civil Rights Congress had been declared a subversive organization by the Attorney General—indeed, having itself earlier found that organization to be a subversive one—and having reason to believe that petitioner was its Executive Secretary,2 the House Committee on Un-American Activities caused a subpoena of the House of Representatives to be issued and served upon petitioner commanding him to appear before its Committee on Un-American Activities, or a subcommittee thereof, at a stated time and place in Detroit, Michigan, on February 26, 1952, and there to produce 'all records, correspondence and memoranda pertaining to the organization of, the affiliation with other organizations and all monies received or expended by the Civil Rights Congress * * * (and) then and there to testify touching matters of inquiry committed to said Committee * * *.'
3
Upon the opening of the hearings before the Subcommittee at Detroit on February 26, 1952, the chairman made a public statement, saying, among other things, that earlier Committee hearings has 'disclosed a concentration of Communist effort in certain defense areas of the country,' consisting in part of keeping 'the national organization of the Communist Party and the international Communist movement fully advised of industrial potentialities' in such areas, and that '(t)here is no area of greater importance to the Nation as a whole, both in time of peace and in time of war, than the general area of Detroit,' and he concluded with the statement that: 'The purpose of this investigation is to determine first, whether there has been Communist activity in this vital defense area, and if so, the nature, extent, character and objects thereof.'
4
Accompanied by counsel, petitioner appeared before the Subcommittee at the time and place commanded by the subpoena, and the following colloquy occurred:
5
'Mr. Wood (the chairman): Mr. McPhaul, the committee has heretofore served upon you a subpoena duces tecum, to produce certain records and documents. Are you prepared to respond to that subpoena?
6
'Mr. Wood: * * * Will you answer my question, Mr. McPhaul. Are you prepared to produce the documents and papers that have been called upon for you to produce under the subpoena?
7
'Mr. McPhaul: Mr. Wood, I refuse to answer this or any question which deals with the possession or custody of the books and records called for in the subpoena. I claim my privilege under the fifth amendment of the Constitution.
8
'Mr. Tavenner (Committee counsel): I would like to ask the witness if he has any other reason for refusing to produce the documents called for in the subpoena?
9
'Mr. Wood: In order to complete the record, Mr. McPhaul is it in response to this subpoena that has just been read that you now decline, for the reason you have stated, to produce the documents and books and records therein called for?
10
'Mr. McPhaul: I have stated the reasons, for the record.
11
'Mr. Wood: Is it in responses to this subpoena that you refuse to answer?
12
'Mr. McPhaul: That is my answer that I have just given.
13
'Mr. Wood: To this subpoena?
14
'Mr. McPhaul: To that subpoena; yes.' Petitioner was then sworn, and, after submitting a prepared statement and answering a few preliminary questions, the following occurred:
15
'Mr. Tavenner: The question is as to whether or not you are refusing to produce the records directed to be produced under the subpoena?
16
'Mr. McPhaul: My answer to that is, I refuse to answer this or any questions which deal with possession or custody of the books and records called for in this subpoena. I claim my privilege under the fifth amendment of the United States Constitution.
17
'Mr. Tavenner: My question to you was not answered by that statement, in my judgment. My question was whether or not you are refusing to produce the records which you were directed to produce under this subpoena?
18
'Mr. McPhaul: I have answered it in this statement.
19
'Mr. Tavenner: No sir. You have stated that you refuse to answer any questions pertaining to them. I have not asked you a question that pertains to them. I have asked you to produce the records. Now, will you produce them?
20
'Mr. McPhaul: I will not.'
21
Following receipt of the Subcommittee's report of these occurrences, the House certified the matter to the United States Attorney for the Eastern District of Michigan for initiation of contempt proceedings against petitioner, and he was indicted on July 29, 1954. After denial of his motion to dismiss the indictment,3 petitioner entered a plea of not guilty and the case was put to trial before a jury. The Government offered and there was received in evidence those portions of the transcript of the Detroit hearings which we have mentioned, various House documents authorizing the initiation of this proceeding, and a letter on the letterhead of the Civil Rights Congress, dated February 16, 1952, over petitioner's name, and what purported to be his signature, as Executive Secretary.4
22
Petitioner offered no evidence, but moved for a directed verdict of acquittal substantially on the grounds asserted in his motion to dismiss the indictment (see note 3) and on the further grounds that the Government had failed to adduce any evidence sufficient to show that the records called for by the subpoena were in existence and in petitioner's possession or control at the time he was served with the subpoena or that they were pertinent to the Subcommittee's inquiry. The motion was denied, and thereupon petitioner requested the court to charge the jury, in substance, that unless they found from the evidence and beyond a reasonable doubt that the records called for by the subpoena were in existence and in petitioner's custody or control at the time the subpoena was served upon him, they should find him not guilty. The court refused that request and, instead, charged the jury not to consider 'whether the records and documents designated in the subpoena were actually in existence or under the possession or control of the defendant, because if the defendant had legitimate reasons for failing to produce the said records, he should have stated his reasons for noncompliance with the subpoena when he appeared before the said subcommittee.'
23
The jury found petitioner guilty, and he was fined the sum of $500 and sentenced to imprisonment for a period of nine months. The Court of Appeals affirmed, 6 Cir., 272 F.2d 627, and we granted certiorari, 362 U.S. 917, 80 S.Ct. 670, 4 L.Ed.2d 737.
24
Petitioner's principal contentions here are that there was no evidence showing that the records called for by the subpoena were in existence or, if it may be said that there was, that those records were in petitioner's possession or subject to his control, and the trial court therefore should have sustained his motion for a directed verdict of acquittal or, at the minimum, should have submitted those matters to the jury for resolution.
25
It is of course true that '(a) court will not imprison a witness for failure to produce documents which he does not have unless he is responsible for their unavailability, cf. Jurney v. MacCracken (294 U.S. 125, 55 S.Ct. 375, 79 L.Ed. 802), or is impeding justice by not explaining what happened to them, United States v. Goldstein, 2 Cir., 1939, 105 F.2d 150.' United States v. Bryan, 339 U.S. 323, 330—331, 70 S.Ct. 724, 730, 94 L.Ed. 884. But, so far as the record shows, petitioner has never claimed either before the Subcommittee, the District Court, or the Court of Appeals, and he does not claim here—that the records called for by the subpoena did not exist or that they were not in his possession or subject to his control. Rather, his claim, first raised at his contempt trial more than two years after his appearance before the Subcommittee, is that the Government failed to show that he could have produced the records before the Subcommittee, notwithstanding he has never claimed he could not produce them.
26
We think the Court's decision in United States v. Bryan, 339 U.S. 323, 70 S.Ct. 724, is highly relevant to these questions.5 For it is as true here as it was there, that 'if (petitioner) had legitimate reasons for failing to produce the records of the association, a decent respect for the House of Representatives, by whose authority the subpoenas issued, would have required that (he) state (his) reasons for noncompliance upon the return of the writ.' Id., 339 U.S. at page 332, 70 S.Ct. at page 731. Such a statement would have given the Subcommittee an opportunity to avoid the blocking of its inquiry by taking other appropriate steps to obtain the records. 'To deny the Committee the opportunity to consider the objection or remedy it is in itself a contempt of its authority and an obstruction of its processes. See Bevan v. Krieger, 1933, 289 U.S. 459, 464—465, 53 S.Ct. 661, 662 663, 77 L.Ed. 1316.' His failure to make any such statement was 'a patent evasion of the duty of one summoned to produce papers before a congressional committee (, and) cannot be condoned.' Id., 339 U.S. at page 333, 70 S.Ct. at page 731.
27
The Government's proof at the trial thus established a prima facie case of willful failure to comply with the subpoena. The evidence of the Subcommittee's reasonable basis for believing that the petitioner could produce the records in question, coupled with the evidence of his failure even to suggest to the Subcommittee his ability to produce those records, clearly supported an inference that he could have produced them. The burden then shifted to the petitioner to present some evidence to explain or justify his refusal. Morrison v. California, 291 U.S. 82, 88—89, 54 S.Ct. 281, 284, 78 L.Ed. 664. But he elected not to present any evidence. In these circumstances, there was no factual issue, respecting the existence of the records or his ability to produce them, for resolution by the jury.
28
The Fifth Amendment did not excuse petitioner from producing the records of the Civil Rights Congress, for it is well settled that '(b)ooks and records kept 'in a representative rather than in a personal capacity cannot be the subject of the personal privilege against self-incrimination, even though production of the papers might tend to incriminate (their keeper) personally.' United States v. White, 1944, 322 U.S. 694, 699, 64 S.Ct. 1248, 1251, 88 L.Ed. 1542.' Rogers v. United States, 340 U.S. 367, 372, 71 S.Ct. 438, 441, 95 L.Ed. 344. And see Curcio v. United States, 354 U.S. 118, 122—123, 77 S.Ct. 1145, 1148—1149, 1 L.Ed.2d 1225. Similarly, there is no merit in petitioner's argument that he could not have advised the Subcommittee that he was unable to produce the records without thereby inviting other questions respecting the records and thus risking waiver of his privilege against self-incrimination. See Curcio v. United States, 354 U.S. 118, 77 S.Ct. 1145. Nor does the rule of Blau v. United States, 340 U.S. 159, 71 S.Ct. 223, 95 L.Ed. 170, excuse one subpoenaed to produce records in a representative capacity, United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542, from asserting inability to produce the records if, at a later contempt trial for failure to produce the records he expects to put the Government to proof on that matter.
29
Inasmuch as petitioner neither advised the Subcommittee that he was unable to produce the records nor attempted to introduce any evidence at his contempt trial of his inability to produce them, we hold that the trial court was justified in concluding and in charging the jury that the records called for by the subpoena were in existence and under petitioner's control at the time of the subpoena was served upon him.
30
Petitioner next contends that the evidence was not sufficient to show that the records called for by the subpoena were pertinent to the inquiry. In the first place, petitioner made no objection to the subpoena before the Subcommittee on the ground of pertinency, see Barenblatt v. United States, 360 U.S. 109 123, 79 S.Ct. 1081, 1091, 3 L.Ed.2d 1115 buy we need not rest decision on that score, for here 'pertinency' was clearly shown. The stated purposes of the hearing were to determine 'whether there has been Communist activity in this vital defense area (Detroit), and if so, the nature, extent character and objects thereof.' Earlier Subcommittee hearings had 'disclosed a concentration of Communist effort in certain defense areas of the country,' consisting in part of keeping 'the national organization of the Communist Party and the international Communist movement fully advised of industrial potentialities' in such areas, and the Subcommittee also had reason to believe that the Civil Rights Congress was being used for subversive purposes. The subpoena called for 'all records, correspondence and memoranda' of the Civil Rights Congress relating to three specified subjects: (1) The 'organization of' the group, (2) its 'affiliation with other organizations,' and (3) 'all monies received or expended by (it).' It would seem clear enough that the auspices under which the Civil Rights Congress was organized, the identity and extent of its affiliations, the source of its funds and to whom distributed would be prime considerations in determining whether the organization was being used by the Communists in the Detroit area. If the Civil Rights Congress was affiliated with known Communist organizations, or if its funds were received from such organizations or were used to support Communist activities in the Detroit area, those facts, it is reasonable to suppose, would be shown by the records called for by the subpoena, and those facts would be highly pertinent to the Subcommittee's inquiry. It thus appears that the records called for by the subpoena were not 'plainly incompetent or irrelevant to any lawful purpose (of the Subcommittee) in the discharge of (its) duties,' Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 509, 63 S.Ct. 339, 343, 87 L.Ed. 424, but, on the contrary, were reasonably 'relevant to the inquiry,' Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 209, 66 S.Ct. 494, 506, 90 L.Ed. 614.
31
Finally, petitioner contends that the subpoena was so broad as to constitute an unreasonable search and seizure in violation of the Fourth Amendment of the Constitution. '(A)dequacy or excess in the breadth of the subpoena are matters variable in relation to the nature, purposes and scope of the inquiry,' Oklahoma Press Publishing Co. v. Walling, supra, 327 U.S. at page 209, 66 S.Ct. at page 506. The Subcommittee's inquiry here was a relatively broad one—whether 'there has been Communist activity in this vital defense area (Detroit), and if so, the nature, extent, character and objects thereof'—and the permissible scope of materials that could reasonably be sought was necessarily equally broad.
32
It is not reasonable to suppose that the Subcommittee knew precisely what books and records were kept by the Civil Rights Congress, and therefore the subpoena could only 'specif(y) * * * with reasonable particularity the subjects to which the documents * * * relate.' Brown v. United States, 276 U.S. 134, 143, 48 S.Ct. 288, 290, 72 L.Ed. 500. The call of the subpoena for 'all records, correspondence and memoranda' of the Civil Rights Congress relating to the three specified subjects describes them 'with all of the particularity the nature of the inquiry and the (Subcommittee's) situation would permit,' Oklahoma Press Publishing Co. v. Walling, supra, 327 U.S. at page 210, n. 48, 66 S.Ct. at page 506. '(T)he description contained in the subpoena was sufficient to enable (petitioner) to know what particular documents were required and to select them accordingly,' Brown v. United States, supra, 276 U.S. at page 143, 48 S.Ct. at page 290. If petitioner was in doubt as to what records were required by the subpoena, or found it unduly burdensome, or found it to call for records unrelated to the inquiry, he could and should have so advised the Subcommittee, where the defect, if any, 'could easily have been remedied,' United States v. Bryan, supra, 339 U.S. at page 333, 70 S.Ct. at page 731. This subpoena was not more sweeping than those sustained against challenges of undue breadth in Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 63 S.Ct. 339, and Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 66 S.Ct. 494.
33
Under these circumstances, we cannot say that the breadth of the subpoena was such as to violate the Fourtn Amendment.
34
Affirmed.
35
Dissenting opinion of Mr. Justice DOUGLAS, with whom THE CHIEF JUSTICE, Mr. Justice BLACK and Mr. Justice BRENNAN concur, announced by Mr. Justice BLACK.
36
Today's decision marks such a departure from the accepted procedure designed to protect accused people from public passion and overbearing officials that I dissent.
37
The Act under which petitioner goes to prison permits conviction only if he 'willfully makes default' as a witness before a congressional Committee. 2 U.S.C. § 192, 2 U.S.C.A. § 192. The subpoena commanded him to produce the records of 'the Civil Rights Congress' at a given time and place. But it did not name petitioner as officer, agent, or member of 'the Civil Rights Congress.' The record contains no word of evidence to show (1) that petitioner was an officer, agent, or member of the Civil Rights Congress, or (2) that petitioner was in possession of, or was a custodian of, any of the records of 'the Civil Rights Congress.' The congressional Committee made no effort to establish these facts. Neither did the prosecutor when this criminal proceeding came to trial. The only evidence, if it can be called such, is the refusal or failure of the petitioner to deny those facts.1 The District Court charged the jury that the failure of the prosecution to establish those facts was immaterial for the following reason:
38
'If you find from the evidence in this case, and beyond a reasonable doubt, that the defendant appeared before the said subcommittee, and then refused or failed to make any explanation with respect to the existence of the records designated in the subpoena, or with respect to whether or not such records were under his possession or control, I charge you that you may not consider the questions of whether the records and documents designated in the subpoena were actually in existence or under the possession or control of the defendant, because if the defendant had legitimate reasons for failing to produce the said records, he should have stated his reasons for non-compliance with the subpoena when he appeared before the said subcommittee.
39
'I also charge you that the defendant is not excused from compliance with or producing the records designated in the subpoena merely because he is not designated as an officer or agent of the Civil Rights Congress therein; and neither is the defendant excused from such compliance with the said subpoena merely because of any lack of proof of any connection between the defendant and the Civil Rights Congress.'
40
This theory, now sustained by the Court, permits conviction without any evidence of any 'willful' default.
41
The presumption of innocence, deep in our criminal law, has been one of our most important safeguards against oppression. So far as I can find, this is the first instance where we have dispensed with it. We do so today by shifting the burden to a witness to show that he is not an officer or agent of the organization in question and that he is not able to produce the documents, without requiring any proof whatsoever by the prosecution that connects the defendant either with the organization or with the documents. Reliance is placed on United States v. Bryan, 339 U.S. 323, 70 S.Ct. 724, 94 L.Ed. 884. With all deference, that case is irrelevant because there the witness concededly was 'the executive secretary' of the organization being investigated and had 'custody of its records.' Id., 339 U.S. 324, 70 S.Ct. 727. The issue in the case concerned the authority of the Committee to make the demand, authority challenged, at the trial but not before the Committee, because no quorum of the Committee was present when the witness made default. In United States v. Fleischman, 339 U.S. 349, 70 S.Ct. 739, 94 L.Ed. 906, there was also evidence that the defendant had power to cause the documents to be produced. Id., 339 U.S. 353—354, 70 S.Ct. 741. In those situations the prosecution proves enough when it establishes custody or power to control. Id., 339 U.S. 361—363, 70 S.Ct. 745—746. As respects the shift of the burden of going forward in a criminal prosecution to the defendant (Morrison v. California, 291 U.S. 82, 88, 90—91, 54 S.Ct. 281, 284, 285), Mr. Justice Cardozo said, by way of dictum, 'For a transfer of the burden, experience must teach that the evidence held to be inculpatory has at least a sinister significance * * * or if this at times be lacking, there must be in any event a manifest disparity in convenience of proof and opportunity for knowledge * * *.' Id., 291 U.S. 90—91, 54 S.Ct. 285. Whatever may be the reach of that dictum, it was not adequate to sustain a conviction in that case and is inadequate here. That case involved a charge of conspiracy to violate the alien land law of California. A citizen, charged as co-conspirator, was convicted on a presumption that he knew of the disqualification of his co-conspirator alleged to be an alien. The holding of the Court was that invocation of the presumption against the citizen denied him due process. Id., 291 U.S. 93, 54 S.Ct. 286. The alien was not a conspirator, 'however guilty his own state of mind,' unless the citizen 'shared in the guilty knowledge and design.' Therefore, said Mr. Justice Cardozo, 'The joinder was something to be proved, for it was of the essence of the crime.' Id., 291 U.S. 93, 54 S.Ct. 286. That ruling rests on the presumption of innocence that is never overcome unless the prosecution introduces some competent evidence implicating the accused in the criminal act that is charged.2 Here the crime is 'willful' default in the production of records of 'the Civil Rights Congress.' There can be no 'willful' default unless this petitioner is shown to have (1) some connection with that organization ganization and (2) some custody or control of its records. Simple questions by the Committee might have produced the necessary answers. It is hornbook law that they should have been asked.3 Yet they were not; and without the foundation which they might have laid, the present prosecution has no starting point unless we are to throw procedural requirements to the winds.
42
Failure of a defendant to explain why he does not produce documents may be sufficient under the cases, where it has first been shown that he has a connection with them. See United States v. Fleischman, supra, 339 U.S. 360—363, 70 S.Ct. 745—746; Nilva v. United States, 352 U.S. 385, 392, 77 S.Ct. 431, 435, 1 L.Ed.2d 415. But failure to explain, where no proof of the defendant's connection with the documents is shown, is like taking his action in standing must be a confession of guilt. Once that was the rule. See In re Smith, C.C., 13 F. 25, 26—27; Beale, Criminal Pleading and Practice (1899), p. 52. Once it was the rule that a man who refused to take an oath and answer in criminal proceedings was held in contempt. Trial of Lilburn, 3 How.St.Tr. 1315. See Maguire, Attack of the Common Lawyers on the Oath Ex officio as Administered in the Ecclesiastical Courts in England, Essays in History and Political Theory (1936), c. VII, p. 215.
43
Today we take a step backward. We allow a man to go to prison for doing no more, so far as this record reveals, than challenging the right of a Committee to ask him to produce documents. The Congress had the right to get these documents from someone. But, when it comes to criminal prosecutions, the Government must turn square corners. If Congress desires to have the judiciary adjudge a man guilty for failure to produce documents, the prosecution should be required to prove that the man whom we send to prison had the power to produce them.
1
'Every person who having been summoned as a witness by the authority of either House of Congress to give testimony or to produce papers upon any matter under inquiry before either House, or any joint committee established by a joint or concurrent resolution of the two Houses of Congress, or any committee of either House of Congress, willfully makes default, or who, having appeared, refuses to answer any question pertinent to the question under inquiry, shall be deemed guilty of a misdemeanor, punishable by a fine of not more than $1,000 nor less than $100 and imprisonment in a common jail for not less than one month nor more than twelve months.'
2
See note 4.
3
Petitioner's motion to dismiss challenged the indictment on the grounds, among others, (1) that it failed to state 'the relationship, if any, between the defendant and the Civil Rights Congress whose records defendant was required to produce,' or that they 'were subject to the control or in the custody of the defendant'; (2) that it failed to state facts showing 'the inquiry (to be) within the purview of the' Subcommittee, 'and the relevancy and materiality to (the) inquiry of the records called for in the subpoena'; and (3) that the scope of the subpoena violated 'defendant's rights under the Fourth Amendment to the United States Constitution.'
4
The letter—taken from the Subcommittee's files—was on the letterhead of the Civil Rights Congress, dated February 16, 1952 just 10 days prior to the Detroit hearing—over petitioner's name, and what purported to be his signature, as Executive Secretary. Despite the identity of names and the rule that 'identity of names is prima facie evidence of identity of persons,' Stebbins v. Duncan, 108 U.S. 32, 47, 2 S.Ct. 313, 323, 27 L.Ed. 641, the trial court, upon petitioner's objection, excluded the exhibit from consideration by the jury but received it for his own consideration in respect to the questions of law presented.
5
See also the companion case of United States v. Fleischman, 339 U.S. 349, 70 S.Ct. 739, 94 L.Ed. 906, which is equally relevant to these questions.
1
The respondent claims that the Committee, if not the court, had a 'reasonable basis for believing that petitioner could produce the records.' That basis turns out to be a letter in the Committee files which the respondent made no attempt to link up with petitioner and which, for that reason, was never admitted into evidence.
2
The assaults on this presumption have been vigorous and a few lower courts have succumbed as Goldstein, The State and the Accused: Balance of Advantage in Criminal Procedure, 69 Yale L.J. 1149, shows.
3
Counsel for the Committee repeatedly asked petitioner to comply with the subpoena, but only once did he venture near the question of petitioner's power to comply. In the context of petitioner's invocation of his privilege against self-incrimination, Mr. Tavenner asked 'if (petitioner) has any other reason for refusing to produce the documents called for.' Again, the assumption is that the mere issue of the subpoena without more casts on the witness the burden of explaining non-compliance.
| 23
|
364 U.S. 410
81 S.Ct. 210
5 L.Ed.2d 161
Edward J. MEYER et al., Petitioners,v.UNITED STATES.
No. 13.
Argued Oct. 12, 1960.
Decided Nov. 21, 1960.
Mr. Donald S. Day, Buffalo, N.Y., for petitioners.
Mr. I. Henry Kutz, Washington, D.C., for respondent.
Mr. Justice WHITTAKER delivered the opinion of the Court.
1
Petitioners, who are executors of the estate of Albert F. Meyer, brought this suit to recover an alleged overpayment of federal estate taxes and the District Court granted the relief asked. 166 F.Supp. 629. The Court of Appeals reversed, 275 F.2d 83, and we granted the executors' petition for certiorari, 361 U.S. 929, 80 S.Ct. 373, 4 L.Ed.2d 352, because of a conflict of decisions in the circuits. Cf. In re Reilly's Estate, 239 F.2d 797, decided by the Court of Appeals for the Third Circuit.
2
Two policies of life insurance are involved,1 but since they are in all material respects identical, we need deal with only one of them. The policy obligated the insurer to pay a death benefit of $25,187.50, and that sum was included by the executors in the federal estate tax return and the tax thereon was paid. The decedent had selected an optional mode of settlement which provided for the payment of equal monthly installments to his wife for her life, with 240 installments guaranteed, and further provided that if the wife should die before receiving the 240 installments his daughter would receive the remainder of them, but if both the wife and the daughter died before receiving the 240 installments the commuted value of those unpaid was to be paid in one sum to the estate of the last one of them to die.
3
Of the total proceeds of the policy of $25,187.50, the insurer determined that $17,956.41 was necessary to fund the 240 monthly payments to the wife, the daughter, or to the estate of the last survivor of them, and that the remaining $7,231.09 was necessary to fund the monthly payments to the wife so long as she might live beyond the 240 months. Accordingly, the insurer made such entries on its books.
4
Thereafter petitioners, as executors, timely filed a claim for refund of the amount of the tax paid upon the $7,231.09 which the insurer had shown upon its books as necessary to fund the monthly payments to the wife for her actuarial expectancy beyond the 240 months certain, on the theory that the insurer's treatment of that sum on its books created a separate 'property' or fund payable to the wife alone, and hence it qualified for the marital deduction under § 812(e)(1) of the Internal Revenue Code of 1939, 26 U.S.C.A. § 812(e) (1).2 The claim was denied, and this suit was brought to recover the tax that had been paid on that sum.
5
Petitioners correctly concede that if the policy constitutes but one 'property,' within the meaning of the statute,3 it would not qualify for the marital deduction because the wife's interest in it would be a 'terminable' one, within the meaning of the statute, inasmuch as the wife may die before receipt of the 240 guaranteed installments, in which event the unpaid ones must go to the daughter if then living. They concede, too, that the $17,956.41, shown on the insurer's books as necessary to fund the monthly payments for the 240 months certain, does not qualify for the marital deduction for the same reasons. But they contend that, although the policy made no provision therefor, the insurer's bookkeeping entries constituted a real division of the insurance proceeds into, and created, two 'properties'—one of $17,956.41 and the other of $7,231.09—and that the latter qualifies for the marital deduction under the statute because it is payable, if at all, only to the wife—during her lifetime beyond the 240 months—and no other person has any interest in it.
6
Whether a policy of life insurance may create several 'properties' or funds, either terminable or nonterminable or both, we need not decide, for we think the policy here involved constituted only one property, and made only so much of its proceeds payable to the wife as she might live to receive in equal monthly installments, and made any guaranteed balance payable to the daughter. Hence, under the terms of the policy, the 'interest passing to the surviving spouse (may) terminate or fail' and a 'person other than (the) surviving spouse * * * may possess or enjoy (a) part of such property after such termination or failure of the interest so passing to the surviving spouse; * * *.' Therefore the policy and its proceeds—considered apart from petitioners' claim that the insurer's bookkeeping division of the proceeds of the policy into two parts created two 'properties'—are disqualified for the marital deduction by the express provisions of § 812(e)(1)(B) of the Internal Revenue Code of 1939. The legislative history of the section further supports and compels this conclusion. Illustrating applications of the terminable interest rule, the Senate Committee Report gave an example that is in no relevant way distinguishable from this case,4 and makes it very clear that the marital deduction is not allowable in the case of an annuity for the surviving spouse for life if 'upon the death of the surviving spouse, the payments are to continue to another person (not through her estate) or the undistributed fund is to be paid to such other person * * *.'
7
We think petitioners' argument—that the insurer's bookkeeping division of the proceeds of the policy into two parts created two properties—cannot withstand the provisions of the policy and the actual facts respecting the insurer's bookkeeping division of its proceeds, under the clear terms of the statute and its legislative history. The policy made no provision for the creation of two separate properties—one a property sufficient to provide payments for 240 months, to the wife while she lived and any remainder to the daughter, and another property sufficient to provide an annuity to the wife for the period of her actuarial expectancy beyond the 240 months—and no such separate properties were in fact created. The allocations made were merely actuarial ones—mere bookkeeping entries—made by the insurer on its own books for its own convenience after the insured, the other party to the contract, had died. The wife and the daughter were, respectively, primary and contingent beneficiaries of the policy alone. Neither of them had any title to, nor right to receive, any special fund, and indeed none was actually created. The bookkeeping entries made by the insurer no more created or measured their rights than the insurer's erasure of those entries—which it was free to make at any time—would destroy their rights. Their rights derive solely from the policy. It, not the insurer's bookkeeping entries, created and constitutes the property involved. Any action by the beneficiaries to enforce their rights against the insurer would have to be upon the policy, not upon the entries the insurer had made on its books for its own actuarial information and convenience. Nor would exhaustion of the sum of those entries constitute any defense to the insurer against the claim of either beneficiary for amounts due her under the policy.
8
The proceeds of the policy were not payable to the wife (or to her estate or appointee) alone and at all events, but were payable in monthly installments to her for life, and if any obligation under the policy remained undischarged at her death it was payable to the daughter if living or, if not, to the estate of the last of them to die. It follows that the 'interest passing to the surviving spouse (may) terminate or fail' and that a 'person other than (the) surviving spouse * * * may possess or enjoy (a) part of such property after such termination or failure of the interest so passing to the surviving spouse; * * *.' and hence the property is disqualified for the marital deduction by the express provisions of § 812(e)(1)(B) of the Internal Revenue Code of 1939.
9
Affirmed.
10
Mr. Justice DOUGLAS, with whom Mr. Justice CLARK and Mr. Justice BRENNAN concur, dissenting.
11
The decedent had two life insurance policies in two separate companies; and each provided for the payment of the proceeds in 20 annual instalments by monthly payments to decedent's wife, Marion E. Meyer, if living, and thereafter during her lifetime. If the wife was not living at decedent's death, the instalments were to be paid to a daughter. If the wife died after decedent and before payment in full of the instalments, any remaining instalments were to be payable to the daughter. If the wife lived beyond the 20 years, she would be entitled to like monthly payments for her life. Decedent was survived by his wife and daughter, the wife being then 42 years old.
12
The insurance companies calculated the sums necessary to provide the designated monthly payments for 20 years: $17,956.41 in the case of one policy and $4,012.24 in the case of the other. They then computed the amount necessary to provide a monthly income to the wife in the event she lived beyond the 20-year period: $7,231.09 for one policy; $1,007.36 for the other.
13
Neither of the policies provided (and decedent did not request) that there be any segregation of the proceeds between the amounts computable for the term certain and for funding of the contingent life annuity.1 The amounts required to provide monthly payments for 20 years—$17,956.41 and $4,012.24—were not claimed as marital deductions. This controversy concerns only the amount needed to fund the contingent life annuities of the wife—$7,231.09 plus $1,007.36, or $8,238.45, which the executors claim as a marital deduction.
14
Concededly the amount necessary to make the 20-year payments does not qualify as a marital deduction because it may 'terminate or fail' within the meaning of the Code,2 the daughter being entitled to any remaining payments during that term should the wife die before it terminates. The daughter, however, has no interest in the annuities payable beyond the 20-year period. And it seems to me that the wife's 'interest' in that part of the insurance contracts does not 'terminate or fail' within the meaning of § 812(e)(1)(B).3
15
If the decedent had taken out one group of policies to pay instalments for 20 years to his wife or, if she died within that period, to his daughter, and another group of policies to pay instalments to his wife for life if she lived more than 20 years, the former would be nondeductible, but the latter would qualify for the marital deduction.4 Does then the continuation of the two types of insurance in one policy change the result? The Government maintains that it does because in its view the entire insurance proceeds of each policy are a single 'property' as that term is used in the statute; and the Court so holds. Yet, with all deference, that conclusion is wide of the mark.
16
The Senate Report states that terminable interests include all interests that are subject to contingencies and conditions.5 Yet these contingencies and conditions are not all-inclusive. They do not include the death of the transferee. And, as I shall show, contingencies of the kind we have here are not included.
17
The Court, with all deference, errs in making its decision turn on whether the wife's interest after the 20-year term is a separate 'property' within the meaning of the statute. The ruling of the Court is on a statutory provision that does not exist. Under the statute the question is not whether 'property' is terminable; it is whether an 'interest' is terminable. The statute indeed draws a marked distinction between 'property' and 'interest.'6 Section 812(e)(1)(A) speaks not of 'property,' but of any 'interest' in property. Section 812(e)(1)(B) speaks only of an 'interest passing to the surviving spouse' that will 'terminate or fail.' The statute at these points is concerned with 'interest' in property—not with 'property' Yet the Court, disregarding the statutory scheme, looks only to 'property' and finding but one insurance policy denies the deduction.
18
Plainly there may be more than one 'interest' in a single 'property.' A deduction is not denied merely because the surviving spouse and someone else each have an 'interest' in the same 'property.' S.Rep. No. 1013, 80th Cong., 2d Sess., Pt. 2, p. 8. The Senate Committee gave several examples: '* * * if the decedent by his will devises Blackacre to his wife and son as tenants in common, the marital deduction is allowed, since the surviving spouse's interest is not a terminable interest.'7
19
There seems to me to be a like separation of interests in the present case. These insurance policies created, of course, no fund or res. The sum of $21,968.65 representing the wife's terminable interest and the $8,238.45 representing her other interest were, of course, no more segregated in the insurance companies' assets than a customer's checking account is segregated in a commercial bank. Yet that seems immaterial. Each represented a chose in action. The wife or daughter, as the case might be, could sue for the one during the 20-year period. Only the wife could enforce the claim here in question.
20
That the proceeds of one life insurance policy may create two or more 'interests' for purposes of the estate tax is implicit in the Senate Report. Thus one example of a marital deduction that is given is an annuity payable to the decedent during his life and to his spouse during her life if she survived him.
21
'The decedent during his lifetime purchased an annuity contract under which the annuity was payable during his life and then to his spouse during her life if she survived him. The value of the interest of the decedent's surviving spouse in such contract at the death of the decedent is included in determining the value of his gross estate. A marital deduction is allowed with respect to the value of such interest so passing to the decedent's surviving spouse inasmuch as no other person has an interest in the contract. If upon the death of the surviving spouse the annuity payments were to continue for a term to her estate, or the undistributed portion thereof was to be paid to her estate, the deduction is nevertheless allowable with respect to such entire interest. If, however, upon the death of the surviving spouse, the payments are to continue to another person (not through her estate) or the undistributed fund is to be paid to such other person, no marital deduction is allowable inasmuch as an interest passed from the decedent to such other person.' Id., pp. 12—13.
22
The last sentence of the foregoing quotation, on which the Court relies, describes with accuracy the terminable 'interest' of the wife in that part of the annuity payable during the 20-year period after the death of the decedent. It has no relevancy to the 'interest' with which we are here concerned, viz., the instalments payable after that 20-year period.
23
My conclusion is that where the 'interest' that accrues to the surviving spouse is, as here, shared with no one else and is subject to no termination except her own death, it qualifies for a marital deduction under this statute, even though another 'interest' of hers in the same annuity contract would not qualify.
1
One of the policies was issued by Northwestern Mutual Life Insurance Company in the amount of $25,187.50, and the other was issued by John Hancock Mutual Life Insurance Company in the amount of $5,019.60.
2
Section 812(e) provides in relevant part:
'(1) Allowance of marital deduction.
'(A) In General.—An amount equal to the value of any interest in property which passes or has passed from the decedent to his surviving spouse, but only to the extent that such interest is included in determining the value of the gross estate.
'(B) Life Estate or Other Terminable Interest.—Where, upon the lapse of time, upon the occurrence of an event or contingency, or upon the failure of an event or contingency to occur, such interest passing to the surviving spouse will terminate or fail, no deduction shall be allowed with respect to such interest—
'(i) if an interest in such property passes or has passed (for less than an adequate and full consideration in money or money's worth) from the decedent to any person other than such surviving spouse (or the estate of such spouse); and
'(ii) if by reason of such passing such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest so passing to the surviving spouse; * * *'.
3
'The terms 'interest' and 'property,' as used in section 812(e) have separate and distinct meanings. The term 'property' is used in a comprehensive sense and includes all objects or rights which are susceptible of ownership. The term 'interest' refers to the extent of ownership, that is, to the estate or the quality and quantum of ownership by the surviving spouse or other person, of particular property.' S.Rep. No. 1013, Part 2, 80th Cong., 2d Sess., p. 4.
4
'Example (2). The decedent during his lifetime purchased an annuity contract under which the annuity was payable during his life and then to his spouse during her life if she survived him. The value of the interest of the decedent's surviving spouse in such contract at the death of the decedent is included in determining the value of his gross estate. A marital deduction is allowed with respect to the value of such interest so passing to the decedent's surviving spouse inasmuch as no other person has an interest in the contract. If upon the death of the surviving spouse the annuity payments were to continue for a term to her estate, or the undistributed portion thereof was to be paid to her estate, the deduction is nevertheless allowable with respect to such entire interest. If, however, upon the death of the surviving spouse, the payments are to continue to another person (not through her estate) or the undistributed fund is to be paid to such other person, no marital deduction is allowable inasmuch as an interest passed from the decedent to such other person.' (Emphasis added.) S.Rep. No. 1013, Part 2, 80th Cong., 2d Sess., pp. 12—13.
1
It was said, however, on oral argument the insurance companies maintained for their own records separate accounts as to the 20-year monthly income provisions and the contingent life annuity of the wife, without any segregation of funds.
2
Section 812(e), I.R.C.1939, as added by Revenue Act of 1948, § 361, 62 Stat. 110, 117, provides in relevant part:
'(1) Allowance of marital deduction.
'(A) In General.—An amount equal to the value of any interest in property which passes or has passed from the decedent to his surviving spouse, but only to the extent that such interest is included in determining the value of the gross estate.
'(B) Life Estate or Other Terminable Interest.—Where, upon the lapse of time, upon the occurrence of an event or contingency, or upon the failure of an event or contingency to occur, such interest passing to the surviving spouse will terminate or fail, no deduction shall be allowed with respect to such interest—
'(i) if an interest in such property passes or has passed (for less than an adequate and full consideration in money or money's worth) from the decedent to any person other than such surviving spouse (or the estate of such spouse); and
'(ii) if by reason of such passing such person (or his heirs or assigns) may possess or enjoy any part of such property after such termination or failure of the interest so passing to the surviving spouse; * * *'.
3
See note 2, supra.
4
The Court of Appeals in In re Reilly's Estate, supra, correctly noted that the purpose of the marital deduction under this Act was 'to make more nearly uniform the tax treatment of married persons in community property and non-community property states.' Id., 239 F.2d at page 799. The assets not taxable in the estate of the first spouse to die may be taxed at the death of the survivor. In other words, the property in the marital community is subject to the tax only once in the estate of either.
5
S.Rep. No. 1013, 80th Cong., 2d Sess., Pt. 2, p. 7.
6
'The terms 'interest' and 'property,' as used in section 812(e) have separate and distinct meanings. The term 'property' is used in a comprehensive sense and includes all objects or rights which are susceptible of ownership. The term 'interest' refers to the extent of ownership, that is, to the estate or the quality and quantum of ownership by the surviving spouse or other person, of particular property.' S.Rep., supra, Pt. 2, p. 4.
7
Id., at page 8.
| 1112
|
364 U.S. 443
81 S.Ct. 229
5 L.Ed.2d 192
Harry R. THOMAS, petitioner,v.STATE OF VIRGINIA, respondent.
No. 43.
Supreme Court of the United States
Argued Nov. 10, 1960.
November 21, 1960
Cornelius H. Doherty, Washington, D.C., for petitioner.
Robert D. McIlwaine, III, Richmond, Va., for respondent.
On Writ of certiorari to the Circuit Court of Arlington County of the Commonwealth of Virginia.
PER CURIAM.
1
The judgment of the Circuit Court of Arlington County of the Commonwealth of Virginia is reversed and the case is remanded to that court. Blodgett v. Silberman, 277 U.S. 1, 18, 48 S.Ct. 410, 72 L.Ed. 749.
2
Mr. Justice BLACK dissents for the same reason expressed by Mr. Justice HOLMES in Union Refrigerator Transit Co. v. Kentucky, 199 U.S. 194, 211, 26 S.Ct. 36, 41, 50 L.Ed. 150:
3
'It seems to me that the result reached by the Court probably is a desirable one, but I hardly understand how it can be deducted from the Fourteenth Amendment * * *.'
| 78
|
364 U.S. 426
81 S.Ct. 202
5 L.Ed.2d 173
Gus POLITES, Petitioner,v.UNITED STATES.
No. 25.
Argued Aug. 18, 1960.
Decided Nov. 21, 1960.
Mr. George W. Crockett, Jr., Detroit, Mich., for petitioner.
Mr. Charles Gordon for respondent.
Mr. Justice STEWART delivered the opinion of the Court.
1
Petitioner is a native of Greece who came to this country in 1916. In 1942 he became a naturalized citizen by decree of the United States District Court of Detroit, under the provisions of the Nationality Act of 1940.1 In 1952 the United States brought proceedings under § 338(a) of the 1940 Act to revoke his citizenship.2 These proceedings culminated in a judgment of denaturalization, D.C., 127 F.Supp. 768. An appeal from that judgment was docketed in the Court of Appeals for the Sixth Circuit. Subsequently, under circumstances to be related, counsel for the petitioner stipulated to dismissal of the appeal with prejudice, and the appeal was dismissed in accordance with the stipulatiom. Four years later the petitioner moved to vacate the judgment of denaturalization, relying upon Rule 60(b), Fed.Rules Civ.Proc., 28 U.S.C.A.3 The District Court denied the motion, 24 F.R.D. 401, and the Court of Appeals affirmed, 272 F.2d 709. Certiorari was granted to consider the availability of Rule 60(b) relief in the circumstances here presented, 361 U.S. 958, 80 S.Ct. 594, 4 L.Ed.2d 541.
2
Section 305 of the Nationality Act of 1940 provided that no person should be eligible for naturalization who at any time within ten years preceding his application had been a member of any organization that advocated the overthrow by force or violence of the Government of the United States.4 The Government's complaint in the 1952 denaturalization proceedings charged that the petitioner's citizenship had been illegally procured because within ten years immediately preceding his application for naturalization he had been a member of the Communist Party of the United States, an organization which, it was alleged, advised, advocated, or taught the overthrow by force and violence of the Government of the United States.5
3
At the denaturalization hearing the petitioner, who was represented by counsel, testified that he had been a member of the Communist Party of the United States from 'around' 1931 until 1938. He stated that he had attended closed Party meetings about once a month, that he had been secretary of the 'Greek Fraction' of the Party in Detroit, and that he had left the Party in 1938 only because of a directive that all aliens resign from the Party at that time. Other witnesses described the petitioner as a 'high functionary' of the Party, who at closed meetings had advocated the overthrow of existing government by force and violence.6
4
Based upon this and other testimony, the District Court found that the Government had proved by clear, unequivocal, and convincing evidence that the petitioner had been a member of the Communist Party of the United States within the statutory period, and that the Party was an organization which 'was then advising, advocating or teaching forcible or violent overthrow of this government.' 127 F.Supp. at page 770. Accordingly, the court held that the petitioner had illegally procured his citizenship, because he had not been eligible to become a citizen at the time his certificate of naturalization was issued.7 A judgment cancelling the petitioner's citizenship was entered, 127 F.Supp. 768, 770—772.8
5
From this judgment the petitioner promptly appealed to the United States Court of Appeals for the Sixth Circuit. At the time there were pending in that court appeals from three other denaturalization judgments by the same District Court. United States v. Sweet, 106 F.Supp. 634; United States v. Chomiak, 108 F.Supp. 527; and United States v. Charnowola, 109 F.Supp. 810. Petitioner's counsel appeared and argued for the appellants in each of those three cases. Before the petitioner's brief was due, the Court of Appeals affirmed the judgments in all three of them, 6 Cir., 211 F.2d 118. The petitioner thereafter obtained an extension of time for filing briefs on the appeal of his case until thirty days after disposition by this Court of petitioner for certiorari filed in the other three cases. When those petitions for certiorari were denied, 348 U.S. 817, 75 S.Ct. 28, 99 L.Ed. 644, the petitioner by his counsel stipulated in the Court of Appeals that his appeal should be dismissed with prejudice, and the appeal was dismissed on November 10, 1954.
6
On August 6, 1958, the petitioner filed his motion under Rule 60(b)(5) and (6) to set aside the 1953 denaturalization decree. The ground for the motion, supported by an affidavit of counsel, was that in the light of this Court's opinions in two cases which had recently been decided, Nowak v. United States, 356 U.S. 660, 78 S.Ct. 955, 2 L.Ed.2d 1048, and Maisenberg v. United States, 356 U.S. 670, 78 S.Ct. 960, 2 L.Ed.2d 1056, 'it now appears that the * * * judgment of cancellation is voidable' and 'that it is no longer equitable that said judgment should have prospective application.' In denying the motion the District Court held that the Nowak and Maisenberg decisions 'do not as contended by Polites clearly control the instant case warranting relief from judgment,' (24 F.R.D. 403) and that, in any event, the doctrine of Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207, precludes reopening a judgment under Rule 60(b) where the movant has voluntarily abandoned his appeal, and the only ground for the motion to reopen is an asserted later change in the judicial view of applicable law. 24 F.R.D. 401. The Court of Appeals affirmed 'for the reasons set forth' by the District Court, 272 F.2d 709.
7
It is the contention of the Government that the 'instant case is squarely controlled by the decision of this Court in Ackermann v. United States, 340 U.S. 193 (71 S.Ct. 209, 95 L.Ed. 207), that a freely made decision not to appeal a denaturalization judgment may not be excused by permitting recourse to Rule 60(b)(6) as a substitute for appeal.' In that case Mr. and Mrs. Ackermann and a relative, Keilbar, had been denaturalized after a joint hearing. Keilbar appealed. The Ackermanns did not. On appeal the judgment of denaturalization against Keilbar was reversed upon a stipulation by the Government that the evidence was insufficient to support it. Keilbar v. United States, 5 Cir., 144 F.2d 866. The Ackermanns thereafter filed a motion under Rule 60(b) to vacate the denaturalization judgments against them. They alleged that they had failed to appeal from the judgments because of financial inability and in reliance upon the advice of a government official whom they trusted, the official who was in charge of the detention camp in which they had been placed following their denaturalization. After reviewing these allegations the Court held that the District Court has been correct in denying the motion to reopen the judgments, holding that '(s)ubsection 6 of Rule 60(b) has no application to the situation of petitioner.' 340 U.S. at page 202, 71 S.Ct. at page 213.
8
What the Court said in Ackermann is of obvious relevance here:
9
'Petitioner made a considered choice not to appeal, apparently because he did not feel that an appeal would prove to be worth what he thought was a required sacrifice of his home. His choice was a risk, but calculated and deliberate and such as follows a free choice. Petitioner cannot be relieved of such a choice because hindsight seems to indicate to him that his decision not to appeal was probably wrong, considering the outcome of the Keilbar case. There must be an end to litigation someday, and free, calculated, deliberate choices are not to be relieved from.' 340 U.S. at page 198, 71 S.Ct. at page 211.
10
In the present case it is not claimed that the decision not to appeal was anything but 'free, calculated, and deliberate.' Indeed, there is not even an indication in this case, as there was in ackermann, that the choice was influenced by reliance upon the advice of a government officer. The only claim is that upon the advice of the petitioner's own counsel the appeal was abandoned because there seemed at the time small likelihood of its success, and that some four years later the applicable law was 'clarified' in the petitioner's favor.
11
Despite the relevant and persuasive force of Ackermann, however, we need not go so far here as to decide that when an appeal has been abandoned or not taken because of a clearly applicable adverse rule of law, relief under Rule 60(b) is inflexibly to be withheld when there has later been a clear and authoritative change in governing law. The fact of the matter is that that situation is not presented by this case. Without assaying by hindsight how hopeless the prospects of the petitioner's appeal may have appeared at the time it was abandoned,9 it is clear that the later decisions of this Court upon which his motion to vacate relied did not in fact work the controlling change in the governing law which he asserted. The decisions in question are Nowak v. United States, 356 U.S. 660, 78 S.Ct. 955, 2 L.Ed.2d 1048, and Maisenberg v. United States, 356 U.S. 670, 78 S.Ct. 960, 2 L.Ed.2d 1056.
12
Petitioner contends that the Nowak and Maisenberg decisions reject the grounds relied upon by the District Court in revoking petitioner's citzenship in 1953. In the petitioner's denaturalization proceeding, the court held that a charge of illegal procurement of citzenship under the Nationality Act of 1940 could be sustained by clear, unequivocal and convincing evidence that (a) petitioner had been a member of the Communist Party within ten years immediately preceding the day he filed his citizenship application, and (b) the Communist Party had advised, advocated, or munist Party had advised, advocated, or taught overthrow of the Government by force or violence during that period. Petitioner claims that this interpretation of the statute is erroneous because it fails to take into account the question of the petitioner's knowledge of the Party's activities. It was the claim of the petitioner's motion that Nowak and Maisenberg establish that '(a) charge of illegal procurement of citizenship based upon alleged membership in the Communist Party, cannot be sustained where the evidence fails to show * * * that the defendant was aware that the organization was engaged in the kind of illegal advocacy proscribed by law during the period of his membership therein.' But the Nowak and Maisenberg decisions neither support nor oppose this interpretation of the 1940 Act. Those cases simply do not deal with the question.
13
In Nowak the petitioner had acquired his citizenship under the Nationality Act of 1906. That statute did not specifically prohibit citizenship to a member of an organization which advocated overthrow of the Government by force and violence. It did require an alien to have been 'attached to the principles of the Constitution of the United States' for at least five years preceding his application for citizenship.10 In order to show that Nowak had illegally procured his citizenship because during the five years preceding his naturalization he had not been 'attached' to constitutional principles, the Government undertook to prove that he had been a member of the Communist Party with knowledge that the Party advocated the overthrow of the Government by force and violence. This Court found that the record contained adequate proof that Nowak had been a member of the Party during the pertinent five-year period, and it proceeded on the assumption that the evidence of the Party's illegal advocacy was sufficient. The Court held, however, that the Government had not established, under the standard required in denaturalization cases, that Nowak had known of the Party's advocacy of forcible governmental overthrow. Accordingly, the Court concluded that the Government had failed to prove Nowak's 'state of mind,' 356 U.S. at page 666, 78 S.Ct. at page 959, his lack of 'attachment' to constitutional principles, by the clear, unequivocal, and convincing evidence which is required. Cf. Schneiderman v. United States, 320 U.S. 118, 63 S.Ct. 1333, 87 L.Ed. 1796. Maisenberg was different in that the ultimate issue involved was whether the petitioner's citizenship had been obtained 'by concealment of a material fact (and) willful misrepresentation.'11 356 U.S. at page 671, 78 S.Ct. at page 961. But there, too, the Court held that the Government had failed to prove the petitioner's state of mind, her lack of 'attachment' to the constitutional principles required by the 1906 Act, by its proof of her Communist Party membership and of the Party's vocacy.12
14
In the present case, by contrast, the District Court held that determination of the issue of illegal procurement did not involve an inquiry into the petitioner's state of mind. Unlike Nowak and Maisenberg, the petitioner was naturalized under the Nationality Act of 1940, which withheld the right of citizenship to any alien who had been a member of a particular kind of organization during the statutory period.13 The evidence that the petitioner was a 'member of the Party' in every meaningful sense was abundantly shown. Cf. Galvan v. Press, 347 U.S. 522, 74 S.Ct. 737, 98 L.Ed. 911; Rowoldt v. Perfetto, 355 U.S. 115, 78 S.Ct. 180, 2 L.Ed.2d 140; Niukkanen v. McAlexander, 362 U.S. 390, 80 S.Ct. 799, 4 L.Ed.2d 816. The District Court found that the proof was also clear, unequivocal, and convincing that the organization to which the petitioner had belonged was in the category proscribed by the 1940 Act.14 Those findings remain completely unaffected by anything that was decided or said in either Nowak or Maisenberg.
15
As the District Court viewed the issue of illegal procurement in this case, there was no occasion, as in Nowak and Maisenberg, to establish by inference or imputation the petitioner's personal beliefs, his 'attachment' or lack of it. The court was concerned only with objective facts—the petitioner's membership and the Party's purpose. Upon the basis of its findings as to these factual issues, the Court held that the 'government must prevail on the jurisdictional question that defendant was not eligible to become a citizen either when he filed his naturalization petition or when he took the oath * * *.' 127 F.Supp. at page 772. As the issue was determined, therefore, the case was consistent with many decisions in which this Court has ruled that a certificate of citizenship is cancellable on the basis of illegal procurement if there has not been strict compliance with the conditions imposed by Congress as prerequisites to acquisition of citizenship. See Maney v. United States, 278 U.S. 17, 49 S.Ct. 15, 73 L.Ed. 156; United States v. Ness, 245 U.S. 319, 38 S.Ct. 118, 62 L.Ed. 321; United States v. Ginsberg, 243 U.S. 472, 37 S.Ct. 422, 61 L.Ed. 853; cf. Schneiderman v. United States, 320 U.S. 118, 163, 63 S.Ct. 1333, 1355, 87 L.Ed. 1796 (concurring opinion).
16
The validity of the District Court's interpretation of § 305 is not before us; we are not here directly reviewing the 1953 decision. We hold only that the decisions in Maisenberg and Nowak were not effective to alter the law controlling the petitioner's case.
17
Affirmed.
18
Mr. Justice BRENNAN, with whom The CHIEF JUSTICE, Mr. Justice BLACK, and Mr. Justice DOUGLAS join, dissenting.
19
In my view, the District Court should have exercised its discretion under Fed.Rules Civ.Proc. 60(b) to determine whether it is any longer equitable that this judgment of denaturalization should have prospective application. The Court's opinion, although it refers to Ackermann v. United States, 340 U.S. 193, 71 S.Ct. 209, 95 L.Ed. 207, as 'relevant and persuasive,' expresses no definite view on the availability of Rule 60(b) in this situation, but instead decides on the merits that the state of the law is substantially unchanged since the entry of the denaturalization decree. I would confirm the power of the District Court to act under Rule 60(b), but remand the cause to that court so that it may, in the first instance, decide what effect the Nowak and Maisenberg decisions have on petitioner's case.
20
First, it is necessary to point out that Ackermann is not in point. For one thing, relief there was sought only under subdivisions (1) and (6) of Rule 60(b), not, as here, under subdivision (5) as well. But more fundamentally, Ackermann was a case in which petitioners could have secured a reversal of their denaturalization simply by appealing. Since they deliberately chose not to appeal, this Court held Rule 60(b) unavailable. Here also petitioner chose not to appeal, but only because of the hopelessness of any chance of success. The Court of Appeals had affirmed judgments in three companion cases, and this Court had denied certiorari. True, denial of certiorari has no legal significance, and petitioner might have doggedly pursued his appellate remedies to the end. But as a practical matter such a course of action would have been futile. So petitioner's case must be considered not as one in which he could have appealed successfully, but as one in which he in fact did appeal unsuccessfully.
21
In that situation, it was the law long before the promulgation of Rule 60(b) that a change in the law after the rendition of a decree was grounds for modification or dissolution of that decree insofar as it might affect future conduct. Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. 421, 431 432, 15 L.Ed. 435. This principle is rooted in the practice of courts of equity and is well settled in the vast majority of the States. See 7 Moore, Federal Practice (2d ed. 1955), 60.26(4); Ladner v. Siegel, 298 Pa. 487, 148 A. 699, 68 A.L.R. 1172. Perhaps before the merger of law and equity in 1938 a denaturalization proceeding was an 'action at law.' But a decree of denaturalization is a determination of status which has prospective effect, and there is no reason why in modern times it should not be governed by equitable principles.
22
The decisions under Rule 60(b)(5) (adopted by the 1948 amendments as to the Federal Rules of Civil Procedure) continue this history of equitable adjustment to changing conditions of fact and law. McGrath v. Potash, 91 U.S.App.D.C. 94, 199 F.2d 166, a case decided under subdivision (6), but to which subdivision (5), by the respondent's admission, was equally applicable, is directly in point. There several aliens obtained a decree from a District Court enjoining the Attorney General from proceeding to deport them without complying with the hearing requirements of the Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq. Pending appeal by the Government, this Court held in Wong Yang Sung v. McGrath, 339 U.S. 33, 70 S.Ct. 445, 94 L.Ed. 616, that the Administrative Procedure Act did indeed apply to deportation proceedings. Seeing that further resistance would be futile, the Attorney General dismissed his own appeal by agreement. Shortly thereafter Congress overruled the Wong Yang Sung decision and expressly declared that proceedings relative to the exclusion or expulsion of aliens should not be subject to the Administrative Procedure Act. 64 Stat. 1048. The Government then moved under Rule 60(b) for a dissolution of the injunction against it, relying on this change in law, and the motion was granted. The United States in this case seeks to distinguish that decision by asserting that here 'the continuing force of the decree derives from facts fully accrued and litigated in the original judgment.' True enough; but here, as in McGrath, although the facts were fully accrued at the time of the decree and have not changed, the law has (so petitioner asserts) radically changed, and in that situation it is unjust to give the judgment prospective effect.
23
The cases under Rule 60(b)(5) relied on by the United States are readily distinguishable. In Title v. United States, 9 Cir., 263 F.2d 28, certiorari denied 359 U.S. 989, 79 S.Ct. 1118, 3 L.Ed.2d 978; Elgin Nat'l Watch Co. v. Barrett, 5 Cir., 213 F.2d 776, and Berryhill v. United States, 6 Cir., 199 F.2d 217, it was entirely possible that the remedy by appeal would have been successfully invoked. And in Collins v. City of Wichita, 10 Cir., 254 F.2d 837, a modification of the judgment would have retroactively disturbed existing rights and financial reliance on the judgment. In Scotten v. Littlefield, 235 U.S. 407, 35 S.Ct. 125, 59 L.Ed. 289, relief was denied in a situation virtually identical to this case. But the point actually decided there was that a bill of review would not lie, and it is universally conceded that Rule 60(b) is not limited to those situations where the old confusing collateral remedies would have been available.
24
In sum, the District Court need 'not abdicate its power to revoke or modify its mandate, if satisfied that what it has been doing has been turned through changing circumstances into an instrument of wrong.' United States v. Swift & Co., 286 U.S. 106, 114—115, 52 S.Ct. 460, 462, 76 L.Ed. 999. It is revolting that petitioner should be subject to deportation because of a decree which he could not successfully have attacked on appeal and which subsequent events may have rendered erroneous. The principle of finality is not offended by modification which disturbs no accrued rights and concerns only future conduct.
25
Accordingly, I would reverse the judgment of the Court of Appeals and remand this case to the District Court with directions to exercise its discretion under Rule 60(b)(5).
1
54 Stat. 1137.
2
Section 338(a) of the Nationality Act of 1940, 54 Stat. 1158—1159, provided: 'It shall be the duty of the United States district attorneys for the respective districts, upon affidavit showing good cause therefor, to institute proceedings * * * for the purpose of revoking and setting aside the order admitting such person to citizenship and canceling the certificate of naturalization on the ground of fraud or on the ground that such order and certificate of naturalization were illegally procured.' Now 8 U.S.C.A. § 1451(a).
3
The provisions of Rule 60(b) upon which the petitioner relied are as follows: 'On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: * * * (5) * * * it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.'
4
'No person shall hereafter be naturalized as a citizen of the United States—
'(b) Who believes in, advises, advocates, or teaches, or who is a member of or affiliated with any organization, association, society, or group that believes in, advises, advocates, or teaches
'(1) the overthrow by force or violence of the Government of the United States or of all forms of law; * * *
'The provisions of this section shall be applicable to any applicant for naturalization who at any time within a period of ten years immediately preceding the filing of the petition for naturalization is, or has been, found to be within any of the clauses enumerated in this section, notwithstanding that at the time petition is filed he may not be included in such classes.' 54 Stat. 1141, now 8 U.S.C.A. § 1424(b).
5
The complaint also alleged that the petitioner had obtained his naturalized citizenship fraudulently.
6
The following are illustrative examples of such testimony:
'Q. What was his statement? What did he say? A. He say the way to organize, agitate—agitate the workers, organize them, in order to follow up when the time comes to overthrow the government by force and violence.
'Q. Did he ever say in your presence the methods that he was going to use? A. Well, the only method he said was by force. He said that we, the workers, would never be able to get in the Government by vote.
'Q. This was April and May, 1935. What did he say? A. We had this campaign for the bi-weekly paper, and he spoke very ardently to the members that we had to go ahead and subscribe and get the money that we supposed to collect in order to reach them workers and wait in our movement until the time comes when we would be able to overthrow the present government by force and violence.
'Q. And you heard him say that at a Greek Fraction meeting? A. Yes.
'Q. Do you know of your own knowledge what positions the defendant, Gus Polites, held in the Communist Party during that period of time? A. Not all of the positions. I do know that he was a member of the Fraction Bureau of the Greek Fraction, and my recollection is that he was Secretary of that Fraction for a time. At least, he was a high functionary and attended functionary meetings.
'A. He has, in speeches, advocated the overthrow of the government by force and violence, during my presence.'
7
In connection with the issue of fraudulent procurement, the court also found that the Government had proved by clear, unequivocal, and convincing evidence that the petitioner had personally known that the Communist Party of the United States was an organization advocating overthrow of this Government by force and violence. 127 F.Supp. 768, 772—773.
8
The court also found that the petitioner had procured his citizenship fraudulently. The respondent now states that it does 'not now rely upon the fraud findings as an alternative basis for the judgment of denaturalization.' In the light of its concession that, 'in view of the state of this particular record,' the finding of fraud was not supported by sufficient evidence, we proceed upon that premise.
9
It is worth pointing out, with respect to the three other denaturalization judgments whose affirmance by the Sixth Circuit assertedly led to the petitioner's decision not to pursue his appeal, that each was decided upon the facts of its own individual record. 211 F.2d 118. And it need hardly be repeated at this late date that the refusal by this Court to review those cases imported 'no expression of opinion on the merits.' Sunal v. Large, 332 U.S. 174, 181, 67 S.Ct. 1588, 1592, 91 L.Ed. 1982; see Maryland v. Baltimore Radio Show, 338 U.S. 912, 70 S.Ct. 252, 94 L.Ed. 562.
10
Paragraph 4 of § 4 of the Act, 34 Stat. 596, 598, as amended, 8 U.S.C. (1934 ed.) § 382, provided that no alien should be admitted to citizenship unless immediately preceding his application he had resided continuously within the United States for at least five years and that during this period 'he has behaved as a person of good moral character, attached to the principles of the Constitution of the United States, and well disposed to the good order and happiness of the United States.' Now 8 U.S.C.A. § 1427(a).
11
The Government was seeking to denaturalize Maisenberg under the provisions of § 340(a) of the Immigration and Nationality Act of 1952, 66 Stat. 260, 8 U.S.C. § 1451(a), 8 U.S.C.A. § 1451(a). Under that statute illegal procurement as such is not a specific basis for cancellation of a certificate of naturalization.
12
In view of this conclusion the Court did not reach the further question under the 1952 Act whether the Government had adequately proved that petitioner had misrepresented her attachment or concealed a lack of attachment. See 356 U.S. at page 672, note 3, 78 S.Ct. at page 962.
13
See note 4, supra.
14
It is to be emphasized that neither in his motion to set aside the denaturalization judgment nor in the supporting affidavit did the petitioner allege the existence of any new or mitigating evidence upon these factual issues. Cf. Klapprott v. United States, 335 U.S. 601, 69 S.Ct. 384, 93 L.Ed. 266.
| 12
|
364 U.S. 441
81 S.Ct. 198
5 L.Ed.2d 183
NEW YORK, NEW HAVEN AND HARTFORD RAILROAD COMPANY, Petitioner,v.Mary L. Donnelly HENAGAN.
No. 38.
Argued Nov. 8, 1960.
Decided Nov. 21, 1960.
Mr. Noel W. Deering, Boston, Mass., for petitioner.
Mr. James W. Kelleher, Boston, Mass., for respondent.
PER CURIAM.
1
The respondent was a waitress in the grill car of one of petitioner's trains. She brought this action under the Federal Employers' Liability Act, 45 U.S.C. § 51 et seq., 45 U.S.C.A. § 51 et seq., for damages for injuries allegedly sustained when an emergency application of the brakes brought the train to a sudden stop. A jury which heard the case in the District Court for the District of Massachusetts returned a verdict for respondent. The trial judge denied the petitioner's motions for judgment notwithstanding the verdict and for a new trial. The Court of Appeals for the First Circuit affirmed, 272 F.2d 153. We granted certiorari, 362 U.S. 967, 80 S.Ct. 954, 4 L.Ed.2d 899.
2
The train was pulling into petitioner's station at Providence, Rhode Island, for a scheduled stop. One Montell apparently to commit suicide, stepped on the track from the station platform as the train approached alongside the platform. The engineer made the emergency application of the brakes in an unsuccessful effort to stop the train before it reached Montell. We have examined the trial record and hold that the proofs were insufficient to submit to the jury the question whether employer negligence played a part in the emergency application of the brakes which allegedly produced the respondent's injury. See Herdman v. Pennsylvania R. Co., 352 U.S. 518, 77 S.Ct. 455, 1 L.Ed.2d 508.
3
The judgment of the Court of Appeals is reversed and the cause remanded to the District Court with direction to enter judgment for the petitioner notwithstanding the verdict. It is so ordered.
4
Judgment of Court of Appeals reversed and cause remanded to District Court with direction.
5
Mr. Justice BLACK and Mr. Justice DOUGLAS dissent. They believe there was evidence of negligence sufficient for the jury, as summarized by Judge Woodbury, speaking for a unanimous Court of Appeals. 272 F.2d 153. They also dissent from the direction to enter judgment for the petitioner, since they are of the view that if there is a reversal, there should be a new trial. See Galloway v. United States, 319 U.S. 372, 396, 63 S.Ct. 1077, 1090, 87 L.Ed. 1458 (dissenting opinion).
6
For the reasons set forth in his opinion in Rogers v. Missouri Pacific R. Co., 352 U.S. 500, 524, 77 S.Ct. 443, 459, 1 L.Ed.2d 493, Mr. Justice FRANKFURTER is of the view that the writ of certiorari was improvidently granted.
| 78
|
364 U.S. 421
81 S.Ct. 200
5 L.Ed.2d 169
WATERMAN STEAMSHIP CORPORATION, Petitioner,v.DUGAN & McNAMARA, INC.
No. 35.
Argued Oct. 20, 1960.
Decided Nov. 21, 1960.
Mr. Thomas F. Mount, Philadelphia, Pa., for petitioner.
Mr. George E. Beechwood, Philadelphia, Pa., for respondent.
Mr. Justice STEWART delivered the opinion of the Court.
1
The petitioner is the owner of the vessel S. S. Afoundria. The respondent is a stevedoring company. A longshoreman employed by the respondent was injured aboard the Afoundria while engaged with other employees of the respondent in unloading the ship at the port of Philadelphia. The cargo consisted of bagged sugar. The longshoreman was working in the hold, and his injuries resulted from the collapse of a vertical column of hundred-pound bags which the unloading operations had left without lateral support.
2
He sued the petitioner in the District Court for the Eastern District of Pennsylvania to recover for his injuries. The petitioner settled the claim and, by way of a third-party complaint, sought to recover from the respondent the amount paid in satisfaction of the longshoreman's claim. The third-party complaint alleged that improper stowage of the cargo1 had created an unseaworthy condition in the ship's hold which had imposed absolute liability upon the petitioner as shipowner for the longshoreman's injuries, but that 'the direct, proximate, active and substantial cause of the accident' had been the negligence of the respondent, who, by 'failing to perform the contracted stevedoring services in a safe, proper, customary, careful and workmanlike manner,' had brought the existing unseaworthy condition into play.
3
As an affirmative defense the respondent stevedore alleged that there had been no direct contractual relationship between it and the petitioner coverting the stevedoring services rendered the Afoundria in Philadelphia. At the trial the parties stipulated that this allegation was correct, it appearing that the consignee of the cargo, not the petitioner, had actually engaged the respondent to unload the ship. The District Court directed a verdict for the respondent, holding that a shipowner had no right of indemnity against a stevedore under the circumstances alleged in the absence of a direct contractual relationship between them. The Court of Appeals for the Third Circuit affirmed in an en banc decision, three judges dissenting.2 Certiorari was granted to consider whether in a situation such as this the absence of a contractual relationship between the parties is fatal to the indemnity claim. 362 U.S. 926, 80 S.Ct. 754, 4 L.Ed.2d 745.
4
In Ryan Stevedoring Co. v. Pan-Atlantic Corp., 350 U.S. 124, 76 S.Ct. 232, 100 L.Ed. 133, it was established that a stevedoring contractor who enters into a service agreement with a shipowner is liable to indemnify the owner for damages sustained as a result of the stevedore's breach of his warranty to perform the obligations of the contract with reasonable safety. This warranty of workmanlike service extends to the handling of cargo, as in Ryan, as well as to the use of equipment incidental to cargo handling, as in Weyerhaeuser S.S. Co. v. Nacirema Co., 355 U.S. 563, 78 S.Ct. 438, 2 L.Ed.2d 491. The warranty may be breached when the stevedore's negligence does no more than call into play the vessel's unseaworthiness. Crumady v. The J. H. Fisser, 358 U.S. 423, 429, 79 S.Ct. 445, 448, 3 L.Ed.2d 413. The factual allegations of the third-party complaint in the present case comprehend the latter situation.
5
In the Ryan and Weyerhaeuser cases considerable emphasis was placed upon the direct contractual relationship between the shipowner and the stevedore. If those decisions stood alone, it might well be thought an open question whether such contractual privity is essential to support the stevedore's duty to indemnify. But the fact is that this bridge was crossed in the Crumady case. There we explicitly held that the stevedore's assumption of responsibility for the shipowner's damages resulting from unsafe and improper performance of the stevedoring services was unaffected by the fact that the shipowner was not the party who had hired the stevedore. That case was decided upon the factual premises that the stevedore had been engaged not by the shipowner, but by the party operating the ship under a charter. The Court's language was unambiguous:
6
'We think this case is governed by the principle announced in the Ryan case. The warranty which a stevedore owes when he goes aboard a vessel to perform services is plainly for the benefit of the vessel whether the vessel's owners are parties to the contract or not. That is enough to bring the vessel into the zone of modern law that recognizes rights in third-party beneficiaries. Restatement, Law of Contracts, § 133. Moreover, as we said in the Ryan case, 'competency and safety of stowage are inescapable elements of the service undertaken.' 350 U.S., at page 133, 76 S.Ct. at page 237. They are part of the stevedore's 'warranty of workmanlike service that is comparable to a manufacturer's warranty of the soundness of its manufactured product.' Id., 350 U.S. at pages 133—134, 76 S.Ct. at page 237. See MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050, L.R.A. 1916F, 696.
7
'We conclude that since the negligence of the stevedores, which brought the unseaworthiness of the vessel into play, amounted to a breach of the warranty of workmanlike service, the vessel may recover over.' 358 U.S. 428—429, 79 S.Ct. 448.
8
This reasoning is applicable here. We can perceive no difference in principle, so far as the stevedore's duty to indemnify the shipowner is concerned, whether the stevedore is engaged by an operator to whom the owner has chartered the vessel or by the consignee of the cargo. Nor can there be any significant distinction in this respect whether the longshoreman's original claim was asserted in an in rem or an in personam proceeding. In the Ryan and Weyerhaeuser cases in personam liability was asserted. In the Crumady case the injured stevedore had brought an in rem proceeding. The ship and its owner are equally liable for a breach by the contractor of the owner's nondelegable duty to provide a seaworthy vessel. The Osceola, 189 U.S. 158, 175, 23 S.Ct. 483, 487, 47 L.Ed. 760; cf. Continental Grain Co. v. Barge FBL—585, 364 U.S. 19, 80 S.Ct. 1470, 4 L.Ed.2d 1540. The owner, no less than the ship, is the beneficiary of the stevedore's warranty of workmanlike service.
9
Accordingly the judgment of the Court of Appeals is reversed, and the case is remanded to the District Court for further proceedings consistent with this opinion.
10
Reversed and remanded.
1
The cargo had been loaded in the Philippines several weeks earlier by § stevedore unrelated to the parties to the present proceeding.
2
272 F.2d 823 (on rehearing).
| 78
|
364 U.S. 471
81 S.Ct. 245
5 L.Ed.2d 222
Leonard Ewing SCOTTv.CALIFORNIA.
No. 241, Misc.
Supreme Court of the United States
December 5, 1960
Rehearing Denied Jan. 16, 1961.
See 364 U.S. 944, 81 S.Ct. 462.
Morris Lavine, for appellant.
Stanley Mosk, Atty. Gen. of California, William E. James, Asst. Atty. Gen., William B. McKesson and Lewis Watnick, for appellee.
PER CURIAM.
1
The motion to dismiss is granted and the appeal is dismissed. Treating the papers whereon the appeal was taken as a petition for certiorari, certiorari is denied.
2
Mr. Justice DOUGLAS, dissenting.
3
The salient facts in this case are related in 176 Cal.App.2d 458, 1 Cal.Rptr. 600. A reading of the report shows that the entire evidence against the defendant was circumstantial. It was not even shown directly that his wife, whom he is now convicted of murdering, is dead. Proof of the corpus delicti, as well as proof of petitioner's criminal agency, was to inferred from his wife's inexplicable disappearance coupled with his unnatural behavior thereafter. A prominent aspect of this unnatural behavior was his silence. At the trial, the petitioner did not take the stand. The trial judge in accord with California law charged the jury as follows:
4
'It is a constitutional right of a defendant in a criminal trial that he may not be compelled to testify. Thus, whether or not he does testify rests entirely in his own decision. As to any evidence or facts against him which the defendant can reasonably be expected to deny or explain because of facts within his knowledge, if he does not testify, the jury may take that fact into consideration as tending to indicate the truth of such evidence and as indicating that among the inferences that may be reasonably drawn therefrom those unfavorable to the defendant are the more probable. The failure of a defendant to deny or explain evidence against him does not, however, create a presumption of guilt or by itself warrant an inference of guilt, nor does it relieve the prosecution of its burden of proving every essential element of the crime and the guilt of the defendant beyond a reasonable doubt.' (Italics added.)
5
Using a defendant's silence as evidence against him is one way of having him testify against himself. This would not be permitted, we have assumed, in a federal trial by reason of the Fifth Amendment. Adamson v. California, 332 U.S. 46, 50, 67 S.Ct. 1672, 91 L.Ed. 1903. That rule, embodied in a federal statute, has much history behind it. See Wilson v. United States, 149 U.S. 60, 13 S.Ct. 765, 37 L.Ed. 650. Its value in protecting the interests of an accused was well stated in Bruno v. United States, 308 U.S. 287, 294, 60 S.Ct. 198, 200, 84 L.Ed. 257, where we said:
6
'To the suggestion that it benefits a defendant who fails to take the stand not to have the attention of the jury directed to that fact, it suffices to say that, however difficult it may be to exercise enlightened self-interest, the accused should be allowed to make his own choice when an Act of Congress authorizes him to choose. And when it is urged that it is a psychological impossibility not to have a presumption arise in the minds of jurors against an accused who fails to testify, the short answer is that Congress legislated on a contrary assumption and not without support in experience. It was for Congress to decide whether what it deemed legally significant was psychologically futile. Certainly, despite the vast accumulation of psychological data, we have not yet attained that certitude about the human mind which would justify us in disregarding the will of Congress by a dogmatic assumption that jurors, if properly admonished, neither could nor would heed the instructions of the trial court that the failure of an accused to be a witness in his own cause 'shall not create any presumption against him." And see Johnson v. United States, 318 U.S. 189, 199, 63 S.Ct. 549, 87 L.Ed. 704.
7
The Court in 1947 held that the Fourteenth Amendment by its Due Process Clause did not incorporate the Fifth Amendment (Adamson v. California, supra), with the result that the failure of a defendant to testify could be taken as evidence against him. I dissented in that case and continue to believe it was wrong. The present case shows how utterly devastating the state rule which it sanctions can be. I would accordingly note probable jurisdiction.
| 01
|
364 U.S. 454
81 S.Ct. 182
5 L.Ed.2d 206
Bruce BOYNTON, Petitioner,v.COMMONWEALTH OF VIRGINIA.
No. 7.
Argued Oct. 12, 1960.
Decided Dec. 5, 1960.
Mr. Thurgood Marshall, New York City, for petitioner.
Mr. Walter E. Rogers, Richmond, Va., for respondent.
Mr. Justice BLACK delivered the opinion of the Court.
1
The basic question presented in this case is whether an interstate bus passenger is denied a federal statutory or constitutional right when a restaurant in a bus terminal used by the carrier along its route discriminates in serving food to the passenger solely because of his color.
2
Petitioner, a Negro law student, bought a Trailways bus ticket from Washington, D.C., to Montgomery, Alabama. He boarded a bus at 8 p.m. which arrived at Richmond, Virginia, about 10:40 p.m. When the bus pulled up at the Richmond 'Trailways Bus Terminal' the bus driver announced a forty-minute stopover there. Petitioner got off the bus and went into the bus terminal to get something to eat. In the station he found a restaurant in which one part was used to serve white people and one to serve Negroes. Disregarding this division, petitioner sat down on a stool in the white section. A waitress asked him to move over to the other section where there were 'facilities' to serve colored people. Petitioner told her he was an interstate bus passenger, refused to move and ordered a sandwich and tea. The waitress then brought the Assistant Manager, who 'instructed' petitioner to 'leave the white portion of the restaurant and advised him he could be served in the colored portion.' Upon petitioner's refusal to leave an officer was called and petitioner was arrested and later tried, convicted and fined ten dollars in the Police Justice's Court of Richmond on a charge that he 'Unlawfully did remain on the premises of the Bus Terminal Restaurant of Richmond, Inc. after having been forbidden to do so' by the Assistant Manager. (Emphasis supplied.) The charge was based on § 18—225 of the Code of Virginia of 1950, as amended (1958), which provides in part:
3
'If any person shall without authority of law go upon or remain upon the lands or premises of another, after having been forbidden to do so by the owner, lessee, custodian or other person lawfully in charge of such land, * * * he shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not more than one hundred dollars or by confinement in jail not exceeding thirty days, or by both such fine and imprisonment.' (Emphasis supplied.)
4
Petitioner appealed his conviction to the Hustings Court of Richmond, where, as in the Police Court, he admitted that he had remained in the white portion of the Terminal Restaurant although ordered not to do so. His defense in both courts was that he had a federal right as an interstate passenger of Trailways to be served without discrimination by this restaurant used by the bus carrier for the accommodation of its interstate passengers. On this basis petitioner claimed he was on the restaurant premises lawfully, not 'unlawfully' as charged, and that he remained there with, not 'without authority of law.' His federal claim to this effect was spelled out in a motion to dismiss the warrant in Hustings Court, which was overruled both before and after the evidence was heard. Pointing out that the restaurant was an integral part of the bus service for interstate passengers such as petitioner, and asserting that refusal to serve him was a discrimination based on color, the motion to dismiss charged that application of the Virginia law to petitioner violated the Interstate Commerce Act and the Equal Protection, Due Process and Commerce Clauses of the Federal Constitution. On appeal the Virginia Supreme Court held that the conviction was 'plainly right' and affirmed without opinion, thereby rejecting petitioner's assignments of error based on the same grounds of discrimination set out in his motion to dismiss in Hustings Court but not specifically charging that the discrimination violated the Interstate Commerce Act. We think, however, that the claims of discrimination previously made under the Act are sufficiently closely related to the assignments that were made to be considered within the scope of the issues presented to the State Supreme Court. We granted certiorari because of the serious federal questions raised concerning discrimination based on color. 361 U.S. 958, 80 S.Ct. 584, 4 L.Ed.2d 541.
5
The petition for certiorari we granted presented only two questions: first, whether the conviction of petitioner is invalid as a burden on commerce in violation of Art. I, § 8, cl. 3 of the Constitution; and second, whether the conviction violates the Due Process and Equal Protection Clauses of the Fourteenth Amendment. Ordinarily we limit our review to the questions presented in an application for certiorari. We think there are persuasive reasons, however, why this case should be decided, if it can, on the Interstate Commerce Act contention raised in the Virginia courts. Discrimination because of color is the core of the two broad constitutional questions presented to us by petitioner, just as it is the core of the Interstate Commerce Act question presented to the Virginia courts. Under these circumstances we think it appropriate not to reach the constitutional questions but to proceed at once to the statutory issue.
6
The Interstate Commerce Act, as we have said, uses language of the broadest type to bar discriminations of all kinds. United States v. Baltimore & Ohio R. Co., 333 U.S. 169, 175, 68 S.Ct. 494, 497, 92 L.Ed. 618, and cases cited. We have held that the Act forbids railroad dining cars to discriminate in service to passengers on account of their color. Henderson v. United States, 339 U.S. 816, 70 S.Ct. 843, 94 L.Ed. 1302; see also Mitchell v. United States, 313 U.S. 80, 97, 61 S.Ct. 873, 878, 85 L.Ed. 1201.
7
Section 216(d) of Part II of the Interstate Commerce Act, 49 U.S.C. § 316(d), 49 U.S.C.A. § 316(d), which applies to motor carriers, provides in part:
8
'It shall be unlawful for any common carrier by motor vehicle engaged in interstate or foreign commerce to make, give, or cause any undue or unreasonable preference or advantage to any particular person * * * in any respect whatsoever; or to subject any particular person * * * to any unjust discrimination or any unjust or unreasonable prejudice or disadvantage in any respect whatsoever * * *.'
9
So far as relevant to our problem, the provisions of § 216(d) quoted are the same as those in § 3(1) of the Act, 49 U.S.C. § 3(1), 49 U.S.C.A. § 3(1), except that the latter refers to railroads as defined in Part I of the Act instead of motor carriers as defined in Part II. Section 3(1) was the basis for this Court's holding in Henderson v. United States, supra, that it was an 'undue or unreasonable prejudice' under that section for a railroad to divide its dining car by curtains, partitions and signs in order to separate passengers according to race. The Court said that under § 3(1) '(w)here a dining car is available to passengers holding tickets entitling them to use it, each such passenger is equally entitled to its facilities in accordance with reasonable regulations.' Id., 339 U.S. at page 824, 70 S.Ct. at page 847. The Henderson case largely rested on Mitchell v. United States, supra, which pointed out that while the railroads might not be reguired by law to furnish dining car facilities, yet if they did, substantial equality of treatment of persons traveling under like conditions could not be refused consistently with § 3(1). It is also of relevance that both cases upset Interstate Commerce Commission holdings, the Court stating in Mitchell that since the 'discrimination shown was palpably unjust and forbidden by the Act' no room was left for administrative or expert judgment with reference to practical difficulties. Id., 313 U.S. at page 97, 61 S.Ct. at page 878.
10
It follows from the Mitchell and Henderson cases as a matter of course that should buses in transit decide to supply dining service, discrimination of the kind shown here would violate § 216(d). Cf. Williams v. Carolina Coach Co., D.C., 111 F.Supp. 329, affirmed 4 Cir., 207 F.2d 408, and Keys v. Carolina Coach Co., 64 M.C.C. 769. Although this Court has not decided whether the same result would follow from a similar discrimination in service by a restaurant in a railroad or bus terminal, we have no doubt that the reasoning underlying the Mitchell and Henderson cases would compel the same decision as to the unlawfulness of discrimination in transportation services against interstate passengers in terminals and terminal restaurants owned or operated or controlled by interstate carriers. This is true as to railroad terminals because they are expressly made carriers by § 1(3)(a) of the Act,1 49 U.S.C. § 1(3)(a), 49 U.S.C.A. § 1(3)(a), and as to bus terminals because § 203(a)(19) of the Act, 49 U.S.C. § 303(a)(19), 49 U.S.C.A. § 303(a)(19), specifically includes interstate transportation facilities and property operated or controlled by a motor carrier within the definition of the 'services' and 'transportation' to which the motor carrier provisions of the Act apply.2
11
Respondent correctly points out, however, that whatever may be the facts, the evidence in this record does not show that the bus company owns or actively operates or directly controls the bus terminal or the restaurant in it. But the fact that § 203(a)(19) says that the protections of the motor carrier provisions of the Act extend to 'include' facilities so operated or controlled by no means should be interpreted to exempt motor carriers from their statutory duty under § 216(d) not to discriminate should they choose to provide their interstate passengers with services that are an integral part of transportation through the use of facilities they neither own, control nor operate. The protections afforded by the Act against discriminatory transportation services are not so narrowly limited. We have held that a railroad cannot escape its statutory duty to treat its shippers alike either by use of facilities it does not own or by contractual arrangement with the owner of those facilities. United States v. Baltimore & Ohio R. Co., supra. And so here, without regard to contracts, if the bus carrier has volunteered to make terminal and restaurant facilities and services available to its interstate passengers as a regular part of their transportation, and the terminal and restaurant have acquiesced and cooperated in this undertaking, the terminal and restaurant must perform these services without discriminations prohibited by the Act. In the performance of these services under such conditions the terminal and restaurant stand in the place of the bus company in the performance of its transportation obligations. Cf. Derrington v. Plummer, 240 F.2d 922, 925—926, certiorari denied, 353 U.S. 924, 77 S.Ct. 680, 1 L.Ed.2d 719. Although the courts below made no findings of fact, we think the evidence in this case shows such a relationship and situation here.
12
The manager of the restaurant testified that it was not affiliated in any way with the Trailways Bus Company and that the bus company had no control over the operation of the restaurant, but that while the restaurant had 'quite a bit of business' from local people, it was primarily or partly for the service of the passengers on the Trailways bus. This last statement was perhaps much of an understatement, as shown by the lease agreement executed in writing and signed both by the 'Trailways Bus Terminal, Inc.,' as lessor, and the 'Bus Terminal Restaurant of Richmond, Inc.,' as lessee. The first part of the document showed that Trailways Terminal was then constructing a 'bus station' with built-in facilities 'for the operation of a restaurant, soda fountain, and news stand.' Terminal covenanted to lease this space to Restaurant for its use; to grant Restaurant the exclusive right to sell foods and other things usually sold in restaurants, newsstands, soda fountains and lunch counters; to keep the terminal building in good repair and to furnish certain utilities. Restaurant on its part agreed to use its space for the sale of commodities agreed on at prices that are 'just and reasonable'; to sell no commodities not usually sold or installed in a bus terminal concession without Terminal's permission; to discontinue the sale of any commodity objectionable to Terminal; to buy, maintain, and replace equipment subject to Terminal's approval in writing as to its quality; to make alterations and additions only after Terminal's written consent and approval; to make no 'sales on buses operating in and out said bus station' but only 'through the windows of said buses'; to keep its employees neat and clean; to perform no terminal service other than that pertaining to the operation of its restaurant as agreed on; and that neither Restaurant nor its employees were to 'sell transportation of any kind or give information pertaining to schedules, rates or transportation matters, but shall refer all such inquiries to the proper agents of' Terminal. In short, as Terminal and Restaurant agreed, 'the operation of the restaurant and the said stands shall be in keeping with the character of service maintained in an up-to-date, modern bus terminal.'
13
All of these things show that this terminal building, with its grounds, constituted one project for a single purpose, and that was to serve passengers of one or more bus companies certainly Trailways' passengers. The restaurant area was specifically designed and built into the structure from the beginning to fill the needs of bus passengers in this 'up-to-date, modern bus terminal.' Whoever may have had technical title or immediate control of the details of the various activities in the terminal, such as waiting-room seating, furnishing of schedule information, ticket sales, and restaurant service, they were all geared to the service of bus companies and their passengers, even though local people who might happen to come into the terminal or its restaurant might also be accommodated. Thus we have a well-coordinated and smoothly functioning plan for continuous cooperative transportation services between the terminal, the restaurant and buses like Trailways that made stopovers there. All of this evidence plus Trailways' use on this occasion shows that Trailways was not utilizing the terminal and restaurant services merely on a sporadic or occasional basis. This bus terminal plainly was just as essential and necessary, and as available for that matter, to passengers and carriers like Trailways that used it, as though such carriers had legal title and complete control over all of its activities.3 Interstate passengers have to eat, and the very terms of the lease of the built-in restaurant space in this terminal constitute a recognition of the essential need of interstate passengers to be able to get food conveniently on their journey and an undertaking by the restaurant to fulfill that need. Such passengers in transit on a paid interstate Trailways journey had a right to expect that this essential4 transportation food service voluntarily provided for them under such circumstances would be rendered without discrimination prohibited by the Interstate Commerce Act. Under the circumstances of this case, therefore, petitioner had a federal right to remain in the white portion of the restaurant. He was there under 'authority of law'—the Interstate Commerce Act—and it was error for the Supreme Court of Virginia to affirm his conviction.
14
Because of some of the arguments made here it is necessary to say a word about what we are not deciding. We are not holding that every time a bus stops at a wholly independent roadside restaurant the Interstate Commerce Act requires that restaurant service be supplied in harmony with the provisions of that Act. We decide only this case, on its facts, where circumstances show that the terminal and restaurant operate as an integral part of the bus carrier's transportation service for interstate passengers. Under such circumstances, an interstate passenger need not inquire into documents of title or contractual arrangements in order to determine whether he has a right to be served without discrimination.
15
The judgment of the Supreme Court of Virginia is reversed and the cause is remanded to that Court for proceedings not inconsistent with this opinion.
16
Reversed and remanded.
17
Mr. Justice WHITTAKER, with whom Mr. Justice CLARK joins, dissenting.
18
Neither in the Supreme Court of Appeals of Virginia nor in his petition for certiorari or in his brief on the merits in this Court did petitioner challenge the judgment on the ground that it was obtained in violation of the Interstate Commerce Act. I therefore respectfully submit that, under our rules and decisions, no such question is presented or open for consideration here.1 But even if the Court properly may proceed, as it has proceeded, to decide the case under that Act, and not at all on the constitutional grounds solely relied on by petitioner,2 I must say, with all deference, that the facts in this record do not show that petitioner was convicted of trespass in violation of that Act.
19
For me, the decisive question in this case is whether petitioner had a legal right to remain in the restaurant involved after being ordered to leave it by the proprietor. If he did not have that legal right, however arising, he was guilty of trespass and, unless proscribed by some federal law, his conviction therefor was legally adjudged under § 18—225 of the Code of Virginia.3
20
If the facts in this record could fairly be said to show that the restaurant was a facility 'operated or controlled by any (motor) carrier or carriers, and used in the transportation of passengers or property in interstate or foreign commerce,' § 203(a)(19) of Part II of the Interstate Commerce Act, 49 U.S.C. § 303(a)(19), 49 U.S.C.A. § 303(a)(19); I would agree that petitioner had a legal right to remain in and to insist on service by that restaurant and, hence, was not guilty of trespass in so remaining and insisting though in defiance of the manager's order to leave, for § 216(d) of the Act, 49 U.S.C. § 316(d), 49 U.S.C.A. § 316(d), makes it unlawful for a motor carrier while engaged in interstate commerce 'to subject any particular person * * * to any unjust discrimination,' and this Court has held that any discrimination by a carrier against its interstate passenger on account of his color in the use of its dining facilities is an unjust discrimination. Henderson v. United States, 339 U.S. 816, 70 S.Ct. 843, 94 L.Ed. 1302. Cf. Mitchell v. United States, 313 U.S. 80, 61 S.Ct. 873, 85 L.Ed. 1201.
21
But I respectfully submit that those are not the facts shown by this record. As I read it, there is no evidence in this record even tending to show that the restaurant was 'operated or controlled by any such carrier,' directly or indirectly. Instead, all of the relevant evidence, none of which was contradicted, shows that the restaurant was owned and controlled by a noncarrier who alone operated it as a local and private enterprise. The evidence was very brief, consisting only of an exhibit (a lease) and the testimony of the assistant manager of the restaurant, of a police officer and of petitioner—all, except the exhibit, being contained on 10 pages of the printed record. The lease is in the usual and common form and terms. By it, the owner of the building, Trailways Bus Terminal, Inc., a Virginia corporation, as lessor, demised to the restaurant company, Bus Terminal Restaurant of Richmond, Inc., a Virginia corporation, as lessee, certain described 'space' in the lessor's bus station building in Richmond, Virginia, 'for use by Lessee as a restaurant, lunchroom, soda fountain and news stand,' for a term of five years from December 2, 1953 (with an option in the lessee to renew, on the same terms, for an additional five-year (term), at an annual rental of $30,000 (payable in equal monthly installments) plus 12% of lessee's gross receipts from the demised premises in excess of $275,000 (payable at the end of each year).4
22
There is not a word of evidence that any carrier had any interest in or control over the lessee or its restaurant. Nor is there any suggestion in the record that the lease or the lessee's restaurant operations under it were anything other than bona fide and for a legitimate and private business purpose. Indeed, there is not a word of evidence in the record tending to show that any carrier even had any interest in or control over the lessor corporation that owned the building. In truth, the record does not even show the name of the carrier on which petitioner was traveling or identify it other than as 'Trailways.'5 On the other hand, the assistant manager of the restaurant testified, without suggestion of contradiction, that '(t)he company that operates the restaurant is not affiliated in any way with the bus company,' and that '(t)he bus company has no control over the operation of the restaurant.' There was simply no evidence to the contrary.
23
The Court seems to agree that '(r)espondent correctly points out (that) * * * the evidence in this record does not show that the bus company owns or actively operates or directly controls the bus terminal or the restaurant in it.' But it seems to hold, as I read its opinion, that a motor carrier's regular 'use' of a restaurant, though it be 'neither own(ed), control(led) nor operate(d)' by the motor carrier, makes the restaurant a facility 'operated or controlled by (the motor) carrier or carriers' within the meaning of § 203(a) (19) of the Interstate Commerce Act. I must respectfully disagree. To me, it seems rather plain that when Congress, in § 203(a)(19), said that the "services' and 'transportation" to which Part II of the Act applies shall include 'all vehicles * * * together with all facilities and property operated or controlled by any such carrier or carriers, and used in the transportation of passengers or property in interstate or foreign commerce or in the performance of any service in connection therewith,' it hardly meant to include a private restaurant, 'neither owned, operated nor controlled' by a carrier. Surely such 'use' of a private restaurant by a motor carrier as results from stopping and opening its buses in front of or near a restaurant does not make the restaurant a facility 'operated or controlled by' the carrier, within the meaning of § 203(a)(19) or in any true sense. This simple, and I think obvious, principle was recognized and correctly applied by the Commission as pecently as November 1955 in N.A.A.C.P. v. St. Louis, S.F.R. Co., 297 I.C.C. 335. There, the railroad terminal or station building in Richmond, Virginia, was owned by Richmond Terminal Railway Company6—itself a carrier under § 3(1) of Part I of the Act—which had leased space in that building to Union News Company for a term of 10 years, but subject to termination at the option of either party on 90 days' notice, for use as a restaurant.7 In rejecting the contention that the Union News Company's operation of the restaurant on a racially segregated basis violated § 3(1) of Part I of the Act, the Commission said:
24
'Unless the operation of the lunchrooms can be found to be that of a common carrier subject to part I of the act, it cannot be regulated under section 3(1), and we are unable so to find on the facts before us.' Id., at 344,
25
and the Commission concluded:
26
'We further find that the operation by a lessee (noncarrier) of separate lunchroom facilities for white and colored persons in the railway station at Richmond, constitutes a function or service which is not within the jurisdiction of this Commission.' (Emphasis added.) Id., at 348.
27
I would agree with the Court that 'if the bus carrier (had) volunteered to make * * * restaurant facilities and services available to its interstate passengers as a regular part of their transportation, and the * * * restaurant (had) acquiesced * * * in this undertaking,' the restaurant would then have been bound to serve the carrier's interstate passengers without discrimination. For, in that case, the restaurant would have been made a facility of the carrier, within the meaning of § 203(a)(19), and § 216(d) would inhibit both the carrier and the restaurant from discriminating against the carrier's interstate passengers on account of their color, or on any other account, in the use of the restaurant facilities thus provided. Henderson v. United States, supra. But that is not this case. As we have shown, there is no evidence in this record that the carrier on which petitioner was traveling, whatever may have been its name, had 'volunteered to make * * * restaurant facilities and services available to its interstate passengers' at this restaurant 'as a regular part of their transportation,' or that the proprietor of this restaurant ever 'acquiesced' in any such 'undertaking.' There is no evidence of any agreement, express or implied, between the proprietor of this restaurant and any bus carrier. Instead, the undisputed evidence is that the restaurant was not in any way affiliated with or controlled by any bus carrier. On this evidence, I am unable to find any basis to support a conclusion that this restaurant was in some way made a facility of the bus carrier, or subject to Part II of the Interstate Commerce Act.
28
For these reasons, I cannot agree on this record that petitioner's conviction of trespass under § 18—225 of the Code of Virginia was had in violation of the Interstate Commerce Act. Since the Court's opinion does not explore the constitutional grounds relied on by petitioner, I refrain from intimating any views on those subjects.
1
See National Association for the Advancement of Colored People v. St. Louis-S.F.R. Co., 297 I.C.C. 335, 347—348, in which the Interstate Commerce Commission held that a railroad terminal discriminates in violation of § 3(1) if it maintains waiting rooms for the exclusive use of Negroes. The Commission regarded assignment to accommodations or facilities in a railroad terminal solely on the basis of race as an implication of inherent inferiority and found it to be unreasonable.
2
'The 'services' and 'transportation' to which this chapter applies include all vehicles operated by, for, or in the interest of any motor carrier irrespective of ownership or of contract, express or implied, together with all facilities and property operated or controlled by any such carrier or carriers, and used in the transportation of passengers or property in interstate or foreign commerce or in the performance of any service in connection therewith.'
3
Cf. Atchison, Topeka & S.F.R. Co., 135 I.C.C. 633, 634 635, in which the Commission held that railroad-owned hotels and restaurants used for railroad passengers and employees, and as an incident to the operation and management of the railroad, should be accorded a commoncarrier classification.
4
Because the evidence shows that this terminal restaurant was utilized as an integral part of the transportation of interstate passengers, we need not decide whether discrimination on the basis of color by a bus terminal lessee restaurant would violate § 216(d) in the absence of such circumstances. Cf. National Association for the Advancement of Colored People v. St. Louis-S.F.R. Co., supra, at 343—344.
1
See our Rules 23(1)(c) and 40(1)(d)(1), 28 U.S.C.A.; Lawn v. United States, 355 U.S. 339, 362, n. 16, 78 S.Ct. 311, 324, 2 L.Ed.2d 321, and cases cited.
2
The only grounds relied on by petitioner in the Supreme Court of Appeals of Virginia and in his petition for certiorari and brief on the merits in this Court were that his conviction is invalid as an undue burden on interstate commerce in violation of Art. I, § 8, cl. 3, and also violated the Due Process and Equal Protection Clauses of the Fourteenth Amendment of the United States Constitution.
3
Section 18—225 of the Code of Virginia, in relevant part, provides:
'If any person shall without authority of law go upon or remain upon the lands or premises of another, after having been forbidden to do so by the owner, lessee, custodian or other person lawfully in charge of such land, * * * he shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not more than one hundred dollars or by confinement in jail not exceeding thirty days, or by both such fine and imprisonment.'
4
Under other provisions of the lease, the lessee covenanted, in substance, that it would acquire and install in the leased space, at its own expense, all things, including plumbing and wiring, which may be reasonably necessary to the equipment and operation of the restaurant; to provide and pay for all gas and electric current, except for overhead lights; to keep the premises and employees neat and clean and to operate the restaurant 'in keeping with the character of service maintained in an up-to-date, modern bus terminal'; that it would not keep any coin-controlled machines or sell intoxicants on the demised premises nor make 'any sales on buses operating in and out (of) said bus station'; that it would 'comply with all the ordinances of the City of Richmond, and the laws of the United States and the State of Virginia in respect to the conduct of business of Lessee on the demised premises'; to take good care of the premises, and to surrender them at the end of the term in the same condition as when received 'ordinary wear and tear excepted.'
5
Obviously recognizing these glaring deficiencies in the evidence, counsel for petitioner and for the Government, as amicus curiae, have submitted with their briefs in this Court copies of certain Annual Reports of Virginia Stage Lines, Inc. (which probably was the carrier on which petitioner was traveling), Carolina Coach Company, and of Trailways Bus Terminal, Inc. (the owner of the building and lessor of the space occupied by the lessee's restaurant), to the State Corporation Commission of Virginia, purporting to show that those companies were doing business in Virginia in 1958 and 1959, and a copy of certain pages of the Annual Report filed by Virginia Stage Lines, Inc., with the Interstate Commerce Commission for the year 1959, purporting to show that the capital stock of Trailways Bus Terminal, Inc., was owned in equal parts by Virginia Stage Lines, Inc., and Carolina Coach Company. But none of those documents was put in evidence nor brought to the attention of the Supreme Court of Appeals of Virginia, and it appears, as contended by Virginia, that the Virginia court could not take judicial notice of those documents. See §§ 8—264 and 8—266 of the Code of Virginia; Commonwealth v. Castner, 138 Va. 81, 121 S.E. 894; Sisk v. Town of Shenandoah, 200 Va. 277, 105 S.E.2d 169; Bell v. Hagmann, 200 Va. 626, 107 S.E.2d 426. In the light of these facts the proffered documents cannot be considered here. Lawn v. United States, 355 U.S. 339, 354, 78 S.Ct. 311, 320, 2 L.Ed.2d 321; Wolfe v. North Carolina, 364 U.S. 177, 80 S.Ct. 1482, 4 L.Ed.2d 1650. But even if those documents could be considered here, they would not aid petitioner, for they do not purport to show that any carrier had any interest in or control over the restaurant involved or in or over Bus Terminal Restaurant of Richmond, the company that owned and operated the restaurant.
6
The Richmond Terminal Railway Company was controlled jointly by two railroads—the Richmond, Fredericksburg & Potomac Railway Co. and the Atlantic Coast Line.
7
The lease involved in that case was evidently similar to the one here. Speaking of that lease, the Commission said:
'The lease is silent as to racial segregation. The terminal has certain powers of supervision for a purpose which may be described as policing. The lessee is obligated to 'comply with the requirements of the Department of Public Health, City of Richmond, and with all other lawful governmental rules and regulations.' The context, however, indicates that this requirement is for the purpose of keeping the premises in a neat, clean, and orderly condition, and does not render the lessee liable for violations of the Interstate Commerce Act.' 297 I.C.C., at 343.
| 12
|
364 U.S. 478
81 S.Ct. 243
5 L.Ed.2d 222
PEKAO TRADING CORP.v.George M. BRAGALINI et al.
No. 483.
Supreme Court of the United States
December 5, 1960
Arthur C. Fink, for appellant.
PER CURIAM.
1
The appeal is dismissed for want of a substantial federal question.
2
Mr. Justice FRANKFURTER would note probable jurisdiction and hear the case, the more so inasmuch as the transactions which New York has taxed concerned foreign commerce, unlike those which were involved in Northwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 79 S.Ct. 357, 3 L.Ed.2d 421.
3
Mr. Justice DOUGLAS is also of the opinion that probable jurisdiction should be noted.
| 910
|
364 U.S. 446
81 S.Ct. 191
5 L.Ed.2d 200
SMALL BUSINESS ADMINISTRATION, Petitioner,v.G. M. McCLELLAN, Trustee.
No. 42.
Argued Nov. 9, 10, 1960.
Decided Dec. 5, 1960.
Mr. Morton Hollander, Washington, D.C., for petitioner.
Mr. John Q. Royce, Salina, Kan., for respondent.
Mr. Justice BLACK delivered the opinion of the Court.
1
The Small Business Act of 19531 created the Small Business Administration to 'aid, counsel, assist, and protect insofar as is possible the interests of small-business concerns in order to preserve free competitive enterprise * * * and to maintain and strengthen the overall economy of the Nation.'2 The Administration was given extraordinarily broad powers to accomplish these important objectives, including that of lending money to small businesses whenever they could not get necessary loans on reasonable terms from private lenders.3 When a part, but not all, of a necessary loan can be obtained from a bank or other private lender, the Administration is empowered to join that private lender in making the loan.4 The basic question this case presents is whether, when the Administration has joined a private bank in a loan and the borrower becomes a bankrupt, the Administration's interest in the unpaid balance of the loan is entitled to the priority provided for 'debts due to the United States' in R.S. § 3466 and § 64 of the Bankruptcy Act,5 even though the Administration has agreed to share any money collected on the loan with the private bank.
2
That question arises out of a joint bank-Administration loan of $20,000 to a small business, $5,000 of the loan having come from the funds of the bank and $15,000 from the Government Treasury. Nine months later, an involuntary petition in bankruptcy was filed against the borrower by other creditors. The Administration appeared in the proceedings upon that petition, filed a claim for $16,355.69, the amount then due on the loan, including interest, and asserted priority for its claim to the extent of $12,266.75, its 75 per cent interest in the debt. After a hearing, the referee in bankruptcy denied priority on the ground that the Administration is a 'legal entity' and therefore not entitled to the 'privileges and immunities of the United States.' The District Court, on review, rejected the ground upon which the referee had relied but concluded that since the bankrupt's note evidencing the loan was not assigned by the bank to the Administration until after the commencement of bankruptcy proceedings, the debt is not entitled to priority.6 The Court of Appeals affirmed on a third ground—that the Administration, having contracted to pay the participating private bank one-fourth of any distribution received, could not assert its priority and thus permit a private party to benefit from a priority which, under R.S. § 3466 and the Bankruptcy Act, belongs to the Government alone.7 We granted certiorari to consider the Government's contention that the denial of priority to the Small Business Administration handicaps that agency in the effective performance of the duties imposed upon it by Congress.8
3
First. It is contended that the referee was correct in holding that the Small Business Administration is a separate legal entity and therefore not entitled to governmental priority in a bankruptcy proceeding. The contention rests upon a supposed analogy between this case and Sloan Shipyards Corp. v. United States Shipping Board Emergency Fleet Corporation9 and Reconstruction Finance Corp. v. J. G. Menihan Corp.,10 in which cases this Court refused to treat the corporate governmental agencies involved as the United States. Neither of those cases, however, is controlling here. The agency involved in Sloan Shipyards, the Fleet Corporation, was organized under the laws of the District of Columbia pursuant to authority of an Act of Congress which 'contemplated a corporation in which private persons might be stockholders.'11 This fact alone is enough to distinguish the Fleet Corporation from the Small Business Administration, which, as was contemplated from the beginning, gets all of its money from the Government Treasury. Our decision in the Reconstruction Finance Corp. case is equally inapplicable for that case involved only the question of whether the Reconstruction Finance Corporation, having been endowed by Congress with the capacity to sue and be sued, could be assessed costs in connection with a suit it brought. The holding that such costs could be assessed would not support a holding that the Small Business Administration is not the United States for the purpose of bankruptcy priority.12 Thus neither of these cases requires us to hold that the Small Business Administration, an agency created to lend the money of the United States, is not entitled to all the priority that must be accorded to the United States when the time comes to collect that money. Under like circumstances we refused to deny priority for debts due to the Farm Credit Administration in United States Dept. of Agriculture, etc., v. Remund.13 As was said there of the Farm Credit Administration, the Small Business Administration is 'an integral part of the governmental mechanism'14 created to accomplish what Congress deemed to be of national importance. And it, like the Farm Credit Administration, is entitled to the priority of the United States in collecting loans made by it out of government funds.
4
Second. Respondent contends, as the District Court held, that the Small Business Administration's assertion of priority is precluded by our holding in United States v. Marxen15 that priority attaches only to those debts owing to the United States on the date of the commencement of bankruptcy proceedings and not to debts that come into existence after that date. But this requirement of the Marxen case is fully met here by virtue of the fact that the debt due the Administration arises out of the loan made jointly by the bank and the United States nine months prior to the petition in bankruptcy. Since beneficial ownership of the three-fourths of the debt for which priority is asserted belonged to the Administration from the date of the loan, it is immaterial that formal assignment of the note evidencing the debt was not made by the bank until after the filing of the petition.
5
Third. The Court of Appeals held, and the contention is reiterated here, that the Administration forfeited any right it might otherwise have had to priority by agreeing to turn over to the bank one-fourth of any distribution obtained because of its priority. By this arrangement, it is urged, the Administration is attempting 'to give priority to a claim which the United States is collecting for the benefit of a private party,' contrary to the principles announced by this Court in Nathanson v. National Labor Relations Board.16 But the Nathanson case involved a significantly different situation. There the National Labor Relations Board sought to obtain governmental priority for back-pay claims belonging to employees based upon their loss of pay as a result of allegedly discriminatory discharges by the bankrupt. This Court's denial of priority in that case, involving claims in which the United States had no financial interest, would not justify a denial here where the money was loaned by, and the debt sought to be collected is due to, the United States. The fact that the Administration has contracted to pay the participating private bank one-fourth of any money it later collects on its loan does not mean the Government must lose its priority. Respondent's argument to the contrary seems to rest upon the assumption that the Government is deprived of its priority by making a contract to pay a part of its funds to another creditor of the bankrupt who has no priority. This argument finds no support whatever in § 3466, in § 64 of the Bankruptcy Act, or in the Small Business Act. Section 3466 declares in unequivocal language that the United States is entitled to priority '(w)henever any person indebted to the United States is insolvent,' and § 64 recognizes that priority in bankruptcy proceedings. The purpose of these sections is simply to protect the interest of the Government in collecting money due to it.17 Once that money is collected and placed in the Government Treasury, the end sought to be achieved by § 3466 and § 64 of the Bankruptcy Act is completely satisfied. At that point, there is no difference between the money so received and money received from any other source and, like other money, it may be disbursed in any way the Government sees fit, including the satisfaction of obligations already incurred, so long as the purpose is lawful. The Small Business Administration is authorized to enter into contracts calculated to induce private banks to make loans to small businesses.18 The contract involved in this case, by providing additional security to the private bank at the Government's expense, is well adapted to that end. Indeed, in many cases such a contract may be the only way the Administration could induce private bank participation in a necessary loan. In those cases, acceptance of respondent's argument would make it more difficult for the Administration to perform its statutory duties. Clearly Congress did not intend, by the very act of imposing duties upon the Administration, to take away a privilege necessary to the effective performance of those duties.
6
Respondent's argument from the policy of equality of distribution for similar creditors expressed in the Bankruptcy Act19 is no more convincing. It is true that the allowance of the priority asserted here will place the bank, a private unsecured creditor, in a better position than other private unsecured creditors. But this position is a result, not of any inequality of distribution on the part of the bankruptcy court, but of the bank's valid contract with the Small Business Administration.
7
Fourth. Respondent's last contention, urged throughout these proceedings, is that governmental priority is inconsistent with the basic purposes and provisions of the Small Business Act. The contention rests upon the fact that having a creditor with governmental priority tends to make it more difficult for a small businessman to borrow money from other persons, and, in this respect, handicaps rather than aids borrowers, thus conflicting with the Act's basic policy. In United States v. Emory, we rejected this same argument, with reference to priority for Federal Housing Administration debts, stating that '(o)only the plainest inconsistency would warrant our finding an implied exception to * * * so clear a command as that of § 3466.'20 The same conclusion must be reached here.
8
It was error for the courts below to refuse the Government's claim for priority.
9
Reversed and remanded.
10
Mr. Justice DOUGLAS dissents.
1
67 Stat. 232, as amended, 15 U.S.C. §§ 631—651, 15 U.S.C.A. §§ 631—651.
2
67 Stat. 232.
3
67 Stat. 235—236.
4
Ibid.
5
R.S. § 3466, 31 U.S.C. § 191, 31 U.S.C.A. § 191, establishes a general priority for debts due to the United States. Section 64 of the Bankruptcy Act, as amended, 11 U.S.C. § 104, 11 U.S.C.A. § 104, provides that in bankruptcy cases the priority so established should come fifth in the order of preferred creditors.
6
168 F.Supp. 483.
7
272 F.2d 143.
8
362 U.S. 947, 80 S.Ct. 859, 4 L.Ed.2d 866.
9
258 U.S. 549, 42 S.Ct. 386, 66 L.Ed. 762.
10
312 U.S. 81, 61 S.Ct. 485, 85 L.Ed. 595.
11
258 U.S. at page 565, 42 S.Ct. at page 388.
12
The proper scope of that holding was recognized by Congress itself when, several years later, the Reconstruction Finance Corporation Act was amended expressly to deny the Corporation a right of priority except with respect to debts arising out of its wartime activities. Act of May 25, 1948, 62 Stat. 261, 15 U.S.C.A. § 601 et seq. That the assumption underlying this amendment was that the Corporation would otherwise have had priority for all debts due to it is clear from the discussion of the purpose of the amendment in the Senate. Senator Buck stated that purpose as follows: 'The committee believes that RFC should not have such priority with respect to debts arising from its normal lending activities. A provision has been included in this section which will eliminate that priority except with respect to debts arising under the specific war powers which are designated therein.' (Emphasis supplied.) Cong.Rec., 80th Cong., 2d Sess., Vol. 94, Part 3, p. 4108. See also In re Temple, 7 Cir., 174 F.2d 145.
13
330 U.S. 539, 67 S.Ct. 891, 893, 91 L.Ed. 1082.
14
Id., 330 U.S. at page 542, 67 S.Ct. at page 893.
15
307 U.S. 200, 59 S.Ct. 811, 83 L.Ed. 1222.
16
344 U.S. 25, at page 28, 73 S.Ct. 80, at page 82, 97 L.Ed. 23.
17
For a discussion of the history and purposes of R.S. § 3466, see United States v. State Bank, 6 Pet. 29, 35—37, 8 L.Ed. 308. Compare Nathanson v. National Labor Relations Board, supra, 344 U.S. at pages 27—28, 73 S.Ct. at pages 82—83.
18
67 Stat. 236.
19
11 U.S.C. § 1 et seq., 11 U.S.C.A. § 1 et seq.
20
314 U.S. 423, 433, 62 S.Ct. 317, 322, 86 L.Ed. 315. See also United States Dept. of Agriculture, etc., v. Remund, supra, 330 U.S. at pages 544—545, 67 S.Ct. at pages 893—894; People of State of Illinois ex rel. Gordon v. United States, 328 U.S. 8, 11 12, 66 S.Ct. 841, 843, 90 L.Ed. 1049.
| 1112
|
364 U.S. 507
81 S.Ct. 260
5 L.Ed.2d 249
Giacomo REINA, Petitioner,v.UNITED STATES.
No. 29.
Argued Nov. 7, 8, 1960.
Dec. 19, 1960.
Mr. Allen S. Stim, New York City, for petitioner.
Mr. Oscar H. Davis, Washington, D.C., for respondent.
Mr. Justice BRENNAN delivered the opinion of the Court.
1
The Narcotic Control Act of 1956,1 18 U.S.C. § 1406, 18 U.S.C.A. § 1406, legislates immunity from prosecution for a witness compelled under the section by court order to testify before a federal grand jury investigating alleged violations of the federal narcotics laws. The questions presented are, primarily, whether the section grants immunity from state, as well as federal, prosecution, and, if state immunity, whether the section is constitutional.
2
The petitioner was serving a five-year sentence for a federal narcotics offense2 when, on December 5, 1958, he was subpoenaed before a federal grand jury sitting in the Southern District of New York. A number of questions were asked him concerning his crime, particularly as to the persons involved with him and their activities in the smuggling of narcotics into this country from Europe. The petitioner invoked the provision of the Fifth Amendment against being compelled to be a witness against himself3 and refused to answer any of the questions. The United States Attorney with the approval of the Attorney General obtained a court order pursuant to § 1406 directing him to answer. When he returned before the grand jury he again refused to testify. Proceedings against him in criminal contempt resulted in the judgment under review adjudging him guilty as charged. D.C., 170 F.Supp. 592. The Court of Appeals for the Second Circuit affirmed. 273 F.2d 234. Because of the importance of the questions of the construction and constitutionality of § 1406 raised by the case, we granted certiorari, 362 U.S. 939, 80 S.Ct. 805, 4 L.Ed.2d 769.
3
Petitioner's main argument in both courts below and here challenges § 1406 as granting him only federal immunity, and not state immunity, either because Congress meant the statute to be thus limited, or because the statute, if construed also to grant state immunity, would be unconstitutional. Both courts below passed the question whether the statute grants state immunity because, assuming only federal immunity is granted, they held that United States v. Murdock, 284 U.S. 141, 52 S.Ct. 63, 76 L.Ed. 210, settled that the Fifth Amendment does not protect a federal witness from answering questions which might incriminate him under state law. D.C., 170 F.Supp. at page 595; 2 Cir., 273 F.2d at page 235. Petitioner contends that Murdock should be re-examined and overruled. We have no occasion to consider this contention, since in our view § 1406 constitutionally grants immunity from both federal and state prosecutions.
4
We consider first whether the immunity provided by § 1406 cover state, as well as federal, prosecutions. We have no doubt the section legislates immunity from both. The relevant words of the section have appeared in other immunity statutes have been construed by this Court to cover both state and federal immunity. In Adams v. State of Maryland, 347 U.S. 179, 74 S.Ct. 442, 98 L.Ed. 608, a like provision in 18 U.S.C. § 3486, 18 U.S.C.A. § 3486, that the compelled testimony shall not 'be used as evidence in any criminal proceeding against him in any court' was held to cover both federal and state courts. (Emphasis supplied.) The 'Language could be no plainer,' 347 U.S. at page 181, 74 S.Ct. at page 445. In Ullmann v. United States, 350 U.S. 422, 434—435, 76 S.Ct. 497, 504—505, 100 L.Ed. 511, 18 U.S.C. § 3486(c), 18 U.S.C.A. § 3486(c), added by the Immunity Act of 1954, of which § 1406 is virtually a carbon copy, was given the same construction. Moreover, the adoption of § 1406 followed close upon the Ullmann decision. That decision came down on March 26, 1956. Section 1406 was reported out of the House Ways and Means Committee only three months later on June 19, 1956, H.R.Rep.No.2388, 84th Cong., 2d Sess. It became law on July 18, 1956. 70 Stat. 574. We cannot believe that Congress would have used in § 1406 the very words construed in Ullmann to cover both state and federal prosecutions without giving the words the same meaning.
5
We turn then to the petitioner's argument that, so construed, § 1406 encroaches on the police powers reserved to the States under the Tenth Amendment. The petitioner recognizes that in Ullmann the Court upheld the authority of Congress to grant state immunity as 'necessary and proper' to carry out the power to provide for the national defense; and in Adams v. Maryland upheld the power of Congress to preclude the States from using testimony that was compelled under former § 3486 before a congressional investigating committee. He insists, however, that the congressional authority to enact narcotics laws—rested on the Commerce Clause, Brolan v. United States, 236 U.S. 216, 218, 35 S.Ct. 285, 59 L.Ed. 544; Yee Hem v. United States, 268 U.S. 178, 45 S.Ct. 470, 69 L.Ed. 904; or the taxing power, United States v. Doremus, 249 U.S. 86, 39 S.Ct. 214, 63 L.Ed. 493; Alston v. United States, 274 U.S. 289, 47 S.Ct. 634, 71 L.Ed. 1052; Nigro v. United States, 276 U.S. 332, 351—354, 48 S.Ct. 388, 394—395, 72 L.Ed. 600; United States v. Sanchez, 340 U.S. 42, 71 S.Ct. 108, 95 L.Ed. 47—is not broad enough to encompass the legislation of immunity against state prosecution under state narcotics laws, 'a subject that has traditionally been within the police power of the state.' But the petitioner misconceives the reach of the principle applied in Ullmann and Adams v. Maryland. Congress may legislate immunity restricting the exercise of state power to the extent necessary and proper for the more effective exercise of a granted power, and distinctions based upon the particular granted power concerned have no support in the Constitution. See Brown v. Walker, 161 U.S. 591, 16 S.Ct. 644, 40 L.Ed. 819, in which the Court upheld a federal immunity statute passed in the name of the Commerce Clause and construed that statute to apply to state prosecutions. The relevant inquiry here is thus simply whether the legislated state immunity is necessary and proper to the more effective enforcement of the undoubted power to enact the narcotics laws.
6
It can hardly be questioned that Congress had a rational basis for supposing that the grant of state as well as federal immunity would aid in the detection of violations and hence the more effective enforcement of the narcotics laws. The Congress has evinced serious and continuing concern over the alarming proportions to which the illicit narcotics traffic has grown. The traffic has far-reaching national and international roots. See S.Rep.No.1997, 84th Cong., 2d Sess., pp. 3—6. The discovery and apprehension of those engaged in it present particularly difficult problems of law enforcement. The whole array of aids adopted in 1956, of which immunity is but one, was especially designed to 'permit enforcement officers to operate more effectively.' H.R.Rep.No.2388, 84th Cong., 2d Sess., p. 10. The grant of both federal and state immunity is appropriate and conducive to that end, and that is enough. Even if the grant of immunity were viewed as not absolutely necessary to the execution of the congressional design, '(T)o undertake here to inquire into the degree of * * * necessity, would be to pass the line which circumscribes the judicial department, and to tread on legislative ground.' McCulloch v. State of Maryland, 4 Wheat. 316, 423, 4 L.Ed. 579. And the supersession of state prosecution is not the less valid because the States have traditionally regulated the traffic in narcotics, although that fact has troubled one court. See Tedesco v. United States, 6 Cir., 255 F.2d 35. Madison said, 'Interference with the power of the States was no constitutional criterion of the power of Congress. If the power was not given, Congress could not exercise it; if given, they might exercise it, although it should interfere with the laws, or even the Constitutions of the States.' II Annals of Cong. 1897 (1791). Or as the Court has said concerning federal immunity statutes, '* * * since Congress in the legitimate exercise of its powers enacts 'the supreme Law of the Land,' state courts are bound by (§ 1406), even though it affects their rules of practice.' Adams v. State of Maryland, supra, 347 U.S. at page 183, 74 S.Ct. at page 446.
7
The petitioner urges that in any event he should not have been ordered to answer the grand jury's questions unless he first received a 'general pardon or amnesty' covering the unserved portion of his sentence and his fine. This is a surprising contention, in light of the traditional purpose of immunity statutes to protect witnesses only as to the future. It suggests that the witness who has been convicted is entitled to ask more of the Government than the witness who has not but who may be compelled under § 1406 to reveal criminal conduct which, but for the immunity, would subject him to future federal or state prosecution. Yet the petitioner in his brief says that 'the ordinary rule is that once a person is convicted of a crime, he no longer has the privilege against self-incrimination as he can no longer be incriminated by his testimony about said crime * * *.' There is indeed weighty authority for that proposition. United States v. Romero, 2 Cir., 249 F.2d 371; 8 Wigmore, Evidence (3d ed. 1940), § 2279; cf. Brown v. Walker, supra, 161 U.S. 597—600, 16 S.Ct. 647—648. Under it, immunity, at least from federal prosecution, need not have been offered the petitioner at all.
8
The petitioner does not argue that remission of his penalty was his due as a quid pro quo for further exposing himself to personal disgrace or opprobrium. That reason would not be tenable under Brown v. Walker, supra, in which the Court rejected the argument that the validity of an immunity statute should depend upon whether it shields 'the witness from the personal disgrace or opprobrium attaching to the exposure of his crime.' 161 U.S. at page 605, 16 S.Ct. at page 650. Nor does he support his contention with the argument that the prison sentence imposed for disobedience of the order directing him to testify is actually an additional punishment for his crime. His argument is the single one that the 'said order was not a proper basis upon which to bottom a contempt proceeding in the face of a claim of privilege against self incrimination as it did not grant this petitioner immunity coextensive with the constitutional privilege it sought to replace * * *.' (Emphasis supplied.) The complete answer to this is that in safeguarding him against future federal and state prosecution 'for or on account of any transaction, matter, or thing concerning which he is compelled' to testify, the statute grants him immunity fully coextensive with the constitutional privilege. Some language in Brown v. Walker, 161 U.S. at page 601, 16 S.Ct. at page 648, to which petitioner refers, compares immunity statutes to the traditional declarations of amnesty or pardon. But neither in that opinion nor elsewhere is it suggested that immunity statutes, to escape invalidity under the Fifth Amendment, need do more than protect a witness from future prosecutions. This § 1406 does.
9
The petitioner complains finally that his sentence is excessive. The District Court sentenced him to two years' imprisonment to commence at the expiration of the sentence he was then serving. However, the court also allowed the petitioner 60 days from the date of the judgment to purge himself of his contempt by appearing within that period before the grand jury and answering the questions. It was further provided that if he did so, 'the sentence imposed herein shall be vacated.' The District Court took this action because it found in effect that the petitioner asserted his legal position in good faith and was not contumaciously disrespectful of the court's order or obstinately flouting it. D.C., 170 F.Supp. at page 596. There is no occasion for us to consider the claim of excessiveness of the sentence, or the petitioner's companion claim that the conviction was invalid because the District Court did not advise him of the extent of the immunity conferred by § 1406. We construe the 60-day purge period as running from the effective date of this Court's mandate and the petitioner may avoid imprisonment by answering. Now that this Court has held that his fears of future state or federal prosecution are groundless, he knows that the only reason he gave for claiming his privilege has no substance. No question of an admixture of civil criminal contempt having been raised below or here, we do not reach the issues it might present.
10
Affirmed.
11
Mr. Justice BLACK, with whom THE CHIEF JUSTICE concurs, dissenting.
12
The Court affirms a conviction for contempt of court upon which petitioner has been sentenced to imprisonment for two years with the provision that he can purge himself of the contempt if he answers the questions propounded to him within 60 days. This is a strange kind of sentence, apparently combining in one judgment the elements of both civil and criminal contempt. This fact alone is sufficient to arouse grave doubts in my mind as to the validity of the judgment, since civil and criminal contempt procedures are quite different and call for the exercise of quite different judicial powers. Moreover, analysis of this judgment makes it clear that it rests upon the notion that petitioner has as yet committed no crime and is being sentenced for civil contempt for the sole purpose of coercing his compliance with the demand for his testimony, but that if he fails to comply with this demand within the specified period, he will have committed a criminal contempt. Thus the judgment seems to represent a present adjudication of guilt for a crime to be committed in the future. The fact that the judgment has not been challenged on this specific ground by petitioner does not, in my view, bar our consideration of it. Ordinarily, a judgment invalid on its face can be challenged at any time. I find it unnecessary, however, to reach a definite conclusion on this question because, even assuming that the judgment is not invalid as a result of its hybrid nature, I still think it should be reversed.
13
Petitioner contends that the decision of the Court of Appeals should be reversed because the two-year sentence is excessive. That contention is sufficient to bring into issue any ground upon which the length of the sentence may open the decision to attack. Cf. Boynton v. Com. of Virginia, 364 U.S. 454, 457, 81 S.Ct. 182, 184, 5 L.Ed.2d 206. I think the imposition of a two-year sentence was beyond the District Court's power in the summary proceedings it conducted in this case. In my dissenting opinion in Green v. United States, 356 U.S. 165, 193, 78 S.Ct. 632, 648, 2 L.Ed.2d 672, I stated in full the reasons which led me to conclude that where the object of a proceeding is to impose punishment rather than merely to coerce compliance, 'there is no justification in history, in necessity, or most important in the Constitution for trying those charged with violating a court's decree in a manner wholly different from those accused of disobeying any other mandate of the state.' Id., 356 U.S. at page 218, 78 S.Ct. at page 661. I adhere to that view and reiterate my belief that the Court's position rests solely upon the fact that 'judges and lawyers have told each other the contrary so often that they have come to accept it as the gospel truth.' Id., 356 U.S. at page 219, 78 S.Ct. at page 661. Thus, I cannot join a decision upholding a two-year sentence for contempt upon a trial in which the accused has been denied the constitutional protections of indictment by a grand jury and determination of guilt by a petit jury. I regard this case as another ominous step in the incredible transformation and growth of the contempt power and in the consequent erosion of constitutional safeguards to the protection of liberty. I see no reason why petitioner should not have been tried in accordance with the law of the land—including the Bill of Rights—and conclude, therefore, that the case should be reversed for such a trial.
1
Act of July 18, 1956, 70 Stat. 572 et seq.; 18 U.S.C. § 1401 et seq., 18 U.S.C.A. § 1401 et seq. The relevant portions of § 1406 are as follows:
§ 1406. Immunity of witnesses.
'Whenever in the judgment of a United States attorney the testimony of any witness * * * in any case or proceeding before any grand jury or court of the United States involving any violation of (certain federal narcotics statutes) * * * as necessary to the public interest, he, upon the approval of the Attorney General, shall make application to the court that the witness shall be instructed to testify * * *. But no such witness shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after having claimed his privilege against self-incrimination, to testify * * * nor shall testimony so compelled be used as evidence in any criminal proceeding * * * against him in any court. * * *'
2
United States v. Reina, 2 Cir., 242 F.2d 302. When petitioner appeared before the grand jury on December 5, 1958, he had served about two years and eight months of his five-year term. He completed the sentence on November 21, 1959.
3
'No person * * * shall be compelled in any criminal case to be a witness against himself * * *.'
| 01
|
364 U.S. 500
81 S.Ct. 260
5 L.Ed.2d 245
UNITED STATES of America,v.STATE OF LOUISIANA et al.Earl Benjamin BUSH et al.,v.ORLEANS PARISH SCHOOL BOARD et al.Harry K. WILLIAMS et al.,v.Jimmie H. DAVIS et al.
Decided December 12, 1960
1
Jack P. F. Gremillion, Atty. Gen. of La., for State of Louisiana and others. W. Scott Wilkinson and Thompson Clarke, for Legislature of Louisiana and others. Solicitor General Rankin, for the United States. Robert G. Polack, Peter H. Beer, William M. Campbell, Jr. and Ralph N. Jackson, for Orleans Parish School Board and others, in opposition. Thurgood Marshall, Constance Baker Motley and A. P. Tureaud, for Bush and others, in opposition.
2
PER CURIAM. These are motions for stay of an injunction by a three-judge District Court which nullified a series of enactments of the State of Louisiana. The scope of these enactments and the basis on which they were found in conflict withthe Constitution of the United States are not matters of doubt. The nub of the decision of the three-judge court is this: 'The conclusion is clear that interposition is not a constitutional doctrine. If taken seriously, it is illegal defiance of constitutional authority.' Bush v. Orleans Parish School Board (United States v. State of Louisiana), D.C., 188 F.Supp. 916, 926. The main basis for challenging this ruling is that the State of Louisiana 'has interposed itself in the field of public education over which it has exclusive control.' This objection is without substance, as we held, upon full consideration, in Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401, 3 L.Ed.2d 5. The others are likewise without merit. Accordingly, the motions for stay are denied. U.S. v. States of La., Tex., Miss., Ala., and Fla. [81SCt258,364US502,5LEd2d247] 81 S.Ct. 258 364 U.S. 502 5 L.Ed.2d 247 UNITED STATES of America, Plaintiff, v. STATES OF LOUISIANA, TEXAS, MISSISSIPPI, ALABAMA and FLORIDA.
3
No. 10, Original.
4
Decided Dec. 12, 1960.
5
Final Decree.
6
This cause having come on to be heard on the motion of the plaintiff for judgment and to dismiss the cross-bill of the State of Alabama, and having been argued by counsel, and this Court having stated its conclusions in its opinions announced on May 31, 1960, 363 U.S. 1, 121, 80 S.Ct. 961, 4 L.Ed.2d 1025, 1096, and having considered the positions of the respective parties as to the terms of this decree, it is ordered, adjudged and decreed as follows:
7
1. As against the respective defendant States, the United States is entitled to all the lands, minerals and other natural resources underlying the Gulf of Mexico more than three geographic miles seaward from the coast lines of Louisiana, Mississippi and Alabama, and more than three leagues seaward from the coast lines of Texas and Florida, and extending seaward to the edge of the Continental Shelf. None of the States of Louisiana, Texas, Mississippi, Alabama or Florida is entitled to any interest in such lands, minerals or resources, and each of said States, their privies, assigns, lessees and other persons claiming under any of them are hereby enjoined from interfering with the rights of the United States in such lands, minerals and resources. As used in this decree, the term 'coast line' means the line of ordinary low water along that portion of the coast which is in direct contact with the open sea and the line marking the seaward limit of inland waters.
8
2. As against the United States, the defendant States are respectively entitled to all the lands, minerals and other natural resources underlying the Gulf of Mexico, extending seaward from their coast lines for a distance of three leagues in the case of Texas and Florida and three geographic miles in the case of Louisiana, Mississippi and Alabama, and the United States is not entitled, as against any of such States, to any interest in such lands, minerals or resources, with the exceptions provided by § 5 of the Submerged Lands Act, 43 U.S.C. § 1313, 43 U.S.C.A. § 1313.
9
3. Whenever the location of the coast line of any of the defendant States shall be agreed upon or determined, such State shall thereupon promptly render to the United States a true, full, accurate and appropriate account of any and all sums of money derived by such State since June 5, 1950, either by sale, leasing, licensing, exploitation or otherwise from or on account of any of the lands or resources described in paragraph 1 hereof which lie opposite to such coast line so agreed upon or determined, and, after said account has been rendered and filed with and approved by the Court, shall promptly pay to the United States a sum equal to such amounts shown by said account as so derived by said State; provided, however, that as to the State of Louisiana the allocation, withdrawal and payment of any funds now impounded under the Interim Agreement between the United States and the State of Louisiana, dated October 12, 1956, shall, subject to the terms hereof, be made in accordance with the appropriate provisions of said Agreement.
10
4. The cross-bill of the State of Alabama is dismissed.
11
5. All motions to take depositions and present evidence are denied without prejudice to their renewal in such further proceedings as may be had in connection with matters left open by this decree.
12
6. The motion of the State of Texas for severance is dismissed.
13
7. The motion of the State of Louisiana to transfer the case to a district court is denied.
14
8. Jurisdiction is reserved by this Court to entertain such further proceedings, enter such orders and issue such writs as may from time to time be deemed necessary or advisable to give proper force and effect to this decree.
15
The Chief Justice and Mr. Justice CLARK took no part in the formulation of this decree.
| 12
|
364 U.S. 479
81 S.Ct. 247
5 L.Ed.2d 231
B. T. SHELTON et al., Appellants,v.Everett TUCKER, Jr., etc., et al. Max CARR et al., Petitioners, v. R. A. YOUNG et al.
Nos. 14, 83.
Argued Nov. 7, 1960.
Decided Dec. 12, 1960.
Mr. Robert L. Carter, for appellants.
Messrs. Herschel H. Friday, Jr., Little Rock, Ark., and Louis L. Ramsay, Jr., Pine Bluff, Ark., for appellees.
Mr. Edwin E. Dunaway, Little Rock, Ark., for petitioners.
Messrs. Robert V. Light and Herschel H. Friday, Jr., Little Rock, Ark., for respondents.
Mr. Justice STEWART delivered the opinion of the Court.
1
An Arkansas statute compels every teacher, as a condition of employment in a state-supported school or college, to file annually an affidavit listing without limitation every organization to which he has belonged or regularly contributed within the preceding five years. At issue in these two cases is the validity of that statute under the Fourteenth Amendment to the Constitution. No. 14 is an appeal from the judgment of a three-judge Federal District Court upholding the statute's validity, 174 F.Supp. 351. No. 83 is here on writ of certiorari to the Supreme Court of Arkansas, which also held the statute constitutionally valid. 231 Ark. 641, 331 S.W.2d 701.
2
The statute in question is Act 10 of the Second Extraordinary Session of the Arkansas General Assembly of 1958. The provisions of the Act are summarized in the opinion of the District Court as follows (174 F.Supp. 353):
3
'Act 10 provides in substance that no person shall be employed or elected to employment as a superintendent, principal or teacher in any public school in Arkansas, or as an instructor, professor or teacher in any public institution of higher learning in that State until such person shall have submitted to the appropriate hiring authority an affidavit listing all organizations to which he at the time belongs and to which he has belonged during the past five years, and also listing all organizations to which he at the time is paying regular dues or is making regular contributions, or to which within the past five years he has paid such dues or made such contributions. The Act further provides, among other things, that any contract entered into with any person who has not filed the prescribed affidavit shall be void; that no public moneys shall be paid to such person as compensation for his services; and that any such funds so paid may be recovered back either from the person receiving such funds or from the board of trustees or other governing body making the payment. The filing of a false affidavit is denounced as perjury, punishable by a fine of not less than five hundred nor more than one thousand dollars, and, in addition, the person filing the false affidavit is to lose his teaching license.' 174 F.Supp. 353—354.1
4
These provisions must be considered against the existing system of teacher employment required by Arkansas law. Teachers there are hired on a year-to-year basis. They are not covered by a civil service system, and they have no job security beyond the end of each school year. The closest approach to tenure is a statutory provision for the automatic renewal of a teacher's contract if he is not notified within ten days after the end of a school year that the contract has not been renewed. Ark.1947 Stat.Ann. § 80 1304(b) (1960); Wabbaseka School District No. 7 of Jefferson County v. Johnson, 225 Ark. 982, 286 S.W.2d 841.
5
The plaintiffs in the Federal District Court (appellants here) were B. T. Shelton, a teacher employed in the Little Rock Public School System, suing for himself and others similarly situated, together with the Arkansas Teachers Association and its Executive Secretary, suing for the benefit of members of the Association. Shelton had been employed in the Little Rock Special School District for twenty-five years. In the spring of 1959 he was notified that, before he could be employed for the 1959—1960 school year, he must file the affidavit required by Act 10, listing all his organizational connections over the previous five years. He declined to file the affidavit, and his contract for the ensuing school year was not renewed. At the trial the evidence showed that he was not a member of the Communist Party or of any organization advocating the overthrow of the Government by force, and that he was a member of the National Association for the Advancement of Colored People. The court upheld Act 10, finding the information it required was 'relevant,' and relying on several decisions of this Court, particularly Garner v. Board of Public Works of Los Angeles, 341 U.S. 716, 71 S.Ct. 909, 95 L.Ed. 1317; Adler v. Board of Education, 342 U.S. 485, 72 S.Ct. 380, 96 L.Ed. 517; Beilan v. Board of Higher Education, 357 U.S. 399, 78 S.Ct. 1317, 2 L.Ed.2d 1414; and Lerner v. Casey, 357 U.S. 468, 78 S.Ct. 1311, 2 L.Ed.2d 1423.2
6
The plaintiffs in the state court proceedings (petitioners here) were Max Carr, an associate professor at the University of Arkansas, and Ernest T. Gephardt, a teacher at Central High School in Little Rock, each suing for himself and others similarly situated. Each refused to execute and file the affidavit required by Act 10. Carr executed an affirmation3 in which he listed his membership in professional organizations, denied ever having been a member of any subversive organization, and offered to answer any questions which the University authorities might constitutionally ask touching upon his qualifications as a teacher. Gephardt filed an affidavit stating that he had never belonged to a subversive organization, disclosing his membership in the Arkansas Education Association and the American Legion, and also offering to answer any questions which the school authorities might constitutionally ask touching upon his qualifications as a teacher. Both were advised that their failure to comply with the requirements of Act 10 would make impossible their re-employment as teachers for the following school year. The Supreme Court of Arkansas upheld the constitutionality of Act 10, on its face and as applied to the petitioners. 231 Ark. 641, 331 S.W.2d 701.
I.
7
It is urged here, as it was unsuccessfully urged throughout the proceedings in both the federal and state courts, that Act 10 deprives teachers in Arkansas of their rights to personal, associational, and academic liberty, protected by the Due Process Clause of the Fourteenth Amendment from invasion by state action. In considering this contention, we deal with two basic postulates.
8
First. There can be no doubt of the right of a State to investigate the competence and fitness of those whom it hires to teach in its schools, as this Court before now has had occasion to recognize. 'A teacher works in a sensitive area in a schoolroom. There he shapes the attitude of young minds towards the society in which they live. In this, the state has a vital concern.' Adler v. Board of Education, 342 U.S. 485, 493, 72 S.Ct. 380, 385, 96 L.Ed. 517. There is 'no requirement in the Federal Constitution that a teacher's classroom conduct be the sole basis for determining his fitness. Fitness for teaching depends on a broad range of factors.' Beilan v. Board of Education, 357 U.S. 399, 406, 78 S.Ct. 1317, 1322, 2 L.Ed.2d 1414.4
9
This controversy is thus not of a pattern with such cases as N.A.A.C.P. v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488, and Bates v. Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480. In those cases the Court held that there was no substantially relevant correlation between the governmental interest asserted and the State's effort to compel disclosure of the membership lists involved. Here, by contrast, there can be no question of the relevance of a State's inquiry into the fitness and competence of its teachers.5
10
Second. It is not disputed that to compel a teacher to disclose his every associational tie is to impair that teacher's right of free association, a right closely allied to freedom of speech and a right which, like free speech, lies at the foundation of a free society. De Jonge v. Oregon, 299 U.S. 353, 364, 57 S.Ct. 255, 260, 81 L.Ed. 278; Bates v. Little Rock, supra, 361 U.S. at pages 522—523, 80 S.Ct. at pages 416—417. Such interference with personal freedom is conspicuously accented when the teacher serves at the absolute will of those to whom the disclosure must be made—those who any year can terminate the teacher's employment without bringing charges, without notice, without a hearing, without affording an opportunity to explain.
11
The statute does not provide that the information it requires be kept confidential. Each school board is left free to deal with the information as it wishes.6 The record contains evidence to indicate that fear of public disclosure is neither theoretical nor groundless.7 Even if there were no disclosure to the general public, the pressure upon a teacher to avoid any ties which might displease those who control his professional destiny would be constant and heavy. Public exposure, bringing with it the possibility of public pressures upon school boards to discharge teachers who belong to unpopular or minority organizations, would simply operate to widen and aggravate the impairment of constitutional liberty.
12
The vigilant protection of constitutional freedoms is nowhere more vital than in the community of American schools. 'By limiting the power of the States to interfere with freedom of speech and freedom of inquiry and freedom of association, the Fourteenth Amendment protects all persons, no matter what their calling. But, in view of the nature of the teacher's relation to the effective exercise of the rights which are safeguarded by the Bill of Rights and by the Fourteenth Amendment, inhibition of freedom of thought, and of action upon thought, in the case of teachers brings the safeguards of those amendments vividly into operation. Such unwarranted inhibition upon the free spirit of teachers * * * has an unmistakable tendency to chill that free play of the spirit which all teachers ought especially to cultivate and practice; it makes for caution and timidity in their associations by potential teachers.' Wieman v. Updegraff, 344 U.S. 183, 195, 73 S.Ct. 215, 221, 97 L.Ed. 216 (concurring opinion). 'Scholarship cannot flourish in an atmosphere of suspicion and distrust. Teachers and students must always remain free to inquire, to study and to evaluate * * *.' Sweezy v. New Hampshire, 354 U.S. 234, 250, 77 S.Ct. 1203, 1212, 1 L.Ed.2d 1311.
II.
13
The question to be decided here is not whether the State of Arkansas can ask certain of its teachers about all their organizational relationships. It is not whether the State can ask all of its teachers about certain of their associational ties. It is not whether teachers can be asked how many organizations they belong to, or how much time they spend in organizational activity. The question is whether the State can ask every one of its teachers to disclose every single organization with which he has been associated over a five-year period. The scope of the inquiry required by Act 10 is completely unlimited. The statute requires a teacher to reveal the church to which he belongs, or to which he has given financial support. It requires him to disclose his political party, and every political organization to which he may have contributed over a five-year period. It requires him to list, without number, every conceivable kind of associational tie social, professional, political, avocational, or religious. Many such relationships could have no possible bearing upon the teacher's occupational competence or fitness.
14
In a series of decisions this Court has held that, even though the governmental purpose be legitimate and substantial, that purpose cannot be pursued by means that broadly stifle fundamental personal liberties when the end can be more narrowly achieved.8 The breadth of legislative abridgment must be viewed in the light of less drastic means for achieving the same basic purpose.9
15
In Lovell v. Griffin, 303 U.S. 444, 58 S.Ct. 666, 82 L.Ed. 949, the Court invalidated an ordinance prohibiting all distribution of literature at any time or place in Griffin, Georgia, without a license, pointing out that so broad an interference was unnecessary to accomplish legitimate municipal aims. In Schneider v. State, 308 U.S. 147, 60 S.Ct. 146, 150, 84 L.Ed. 155, the Court dealt with ordinances of four different municipalities which either banned or imposed prior restraints upon the distribution of handbills. In holding the ordinances invalid, the Court noted that where legislative abridgment of 'fundamental personal rights and liberties' is asserted, 'the courts should be astute to examine the effect of the challenged legislation. Mere legislative preferences or beliefs respecting matters of public convenience may well support regulation directed at other personal activities, but be insufficient to justify such as diminishes the exercise of rights so vital to the maintenance of democratic institutions.' 308 U.S. at page 161, 60 S.Ct. at page 151. In Cantwell v. Connecticut, 310 U.S. 296, 60 S.Ct. 900, 84 L.Ed. 1213, the Court said that '(c)onduct remains subject to regulation for the protection of society,' but pointed out that in each case 'the power to regulate must be so exercised as not, in attaining a permissible end, unduly to infringe the protected freedom.' 310 U.S. at page 304, 60 S.Ct. at page 903. Illustrations of the same constitutional principle are to be found in many other decisions of the Court, among them, Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313; Saia v. New York, 334 U.S. 558, 68 S.Ct. 1148, 92 L.Ed. 1574; and Kunz v. New York, 340 U.S. 290, 71 S.Ct. 312, 95 L.Ed. 280.
16
As recently as last Term we held invalid an ordinance prohibiting the distribution of handbills because the breadth of its application went far beyond what was necessary to achieve a legitimate governmental purpose. Talley v. California, 362 U.S. 60, 80 S.Ct. 536, 4 L.Ed.2d 559. In that case the Court noted that it had been 'urged that this ordinance is aimed at providing a way to identify those responsible for fraud, false advertising and libel. Yet the ordinance is in no manner so limited * * *. Therefore we do not pass on the validity of an ordinance limited to prevent these or any other supposed evils. This ordinance simply bars all handbills under all circumstances anywhere that do not have the names and addresses printed on them in the place the ordinance requires.' 362 U.S. at page 64, 80 S.Ct. at page 538.
17
The unlimited and indiscriminate sweep of the statute now before us brings it within the ban of our prior cases. The statute's comprehensive interference with associational freedom goes far beyond what might be justified in the exercise of the State's legitimate inquiry into the fitness and competency of its teachers. The judgments in both cases must be reversed.
18
It is so ordered.
19
Judgments reversed.
20
Mr. Justice FRANKFURTER, dissenting.
21
As one who has strong views against crude intrusions by the state into the atmosphere of creative freedom in which alone the spirit and mind of a teacher can fruitfully function, I may find displeasure with the Arkansas legislation now under review. But in maintaining the distinction between private views and constitutional restrictions, I am constrained to find that it does not exceed the permissible range of state action limited by the Fourteenth Amendment. By way of emphasis I therefore add a few words of the dissent of Mr. Justice HARLAN, in which I concur.
22
It is essential, at the outset, to establish what is not involved in this litigation:
23
(1) As the Court recognizes, this is not a case where, as in N.A.A.C.P. v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488, and Bates v. Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480, a State, asserting the power to compel disclosure of organizational affiliations, can show no rational relation between disclosure and a governmental interest justifying it. Those cases are relevant here only because of their recognition that an interest in privacy, in nondisclosure, may under appropriate circumstances claim constitutional protection. The question here is whether that interest is overborne by a countervailing public interest. To this concrete, limited question—whether the State's interest in knowing the nature of the organizational activities of teachers employed by it or by institutions which it supports, as a basis for appraising the fitness of those teachers for the positions which they hold, outweighs the interest recognized in N.A.A.C.P. and Bates—those earlier decisions themselves give no answer.
24
(2) The Court's holding that the Arkansas statute is unconstitutional does not, apparently, rest upon the threat that the information which it requires of teachers will be revealed to the public. In view of the opinion of the Supreme Court of Arkansas, decision here could not, I believe, turn on a claim that the teachers' affidavits will not remain confidential. That court has expressly said that 'Inasmuch as the validity of the act depends upon its being construed as a bona fide legislative effort to provide school boards with needed information, it necessarily follows that the affidavits need not be opened to public inspection, for the permissible purpose of the statute is to enlighten the school board alone.' 231 Ark. 641, 646, 331 S.W.2d 701, 704. If the validity of the statute depended on this matter, the pronouncement of the State's highest judicial organ would have to be read as establishing—the earlier view of the State Attorney General notwithstanding—that the statute does not authorize the making public of the affidavits. Even were the Arkansas court's language far more ambiguous than it is, it would be our duty so to understand its opinion, in accordance with the principle that 'So far as statutes fairly may be construed in such a way as to avoid doubtful constitutional questions they should be so construed.' Fox v. Washington, 236 U.S. 273, 277, 35 S.Ct. 383, 384, 59 L.Ed. 573.
25
(3) This is not a case in which Lovell v. Griffin, 303 U.S. 444, 58 S.Ct. 666, 82 L.Ed. 949; Cantwell v. Connecticut, 310 U.S. 296, 60 S.Ct. 900, 84 L.Ed. 1213; Saia v. New York, 334 U.S. 558, 68 S.Ct. 1148, 92 L.Ed. 1574; and Kunz v. New York, 340 U.S. 290, 71 S.Ct. 312, 95 L.Ed. 280, call for condemnation of the 'breadth' of the statute. Those decisions struck down licensing laws which vested in administrative officials a power of censorship over communications not confined within standards designed to curb the dangers of arbitrary or discriminatory official action. The 'breadth' with which the cases were concerned was the breadth of unrestricted discretion left to a censor, which permitted him to make his own subjective opinions the practically unreviewable measure of permissible speech.1 Nor is this a case of the nature of Thornhill v. Alabama, 310 U.S. 88, 60 S.Ct. 736, 84 L.Ed. 1093, and Herndon v. Lowry, 301 U.S. 242, 57 S.Ct. 732, 81 L.Ed. 1066,2 involving penal statutes which the Court found impermissibly 'broad' in quite another sense. Prohibiting, indiscriminately, activity within and without the sphere of the Fourteenth Amendment's protection of free expression, those statutes had the double vice of deterring the exercise of constitutional freedoms by making the uncertain line of the Amendment's application determinative of criminality and of prescribing indefinite standards of guilt, thereby allowing the potential vagaries and prejudices of juries, effectively insulated against control by reviewing courts, the power to intrude upon the protected sphere. The statute challenged in the present cases involves neither administrative discretion to censor nor vague, overreaching tests of criminal responsibility.
26
Where state assertions of authority are attacked as impermissibly restrictive upon thought, expression, or association, the existence vel non of other possible less restrictive means of achieving the object which the State seeks is, of course, a constitutionally relevant consideration. This is not because some novel, particular rule of law obtains in cases of this kind. Whenever the reasonableness and fairness of a measure are at issue—as they are in every case in which this Court must apply the standards of reason and fairness, with the appropriate scope to be given those concepts, in enforcing the Due Process Clause of the Fourteenth Amendment as a limitation upon state action—the availability or unavailability of alternative methods of proceeding is germane. Thus, a State may not prohibit the distribution of literature on its cities' streets as a means of preventing littering, when the same end might be achieved with only slightly greater inconvenience by applying the sanctions of the penal law not to the pamphleteer who distributes the paper but to the recipient who crumples it and throws it away. Hague v. C.I.O., 307 U.S. 496, 59 S.Ct. 954, 83 L.Ed. 1423; Schneider v. State, 308 U.S. 147, 60 S.Ct. 146, 84 L.Ed. 155; Jamison v. Texas, 318 U.S. 413, 63 S.Ct. 669, 87 L.Ed. 869. Nor may a State protect its population from the dangers and incitements of salacious books by restricting the reading matter of adults to that which would be harmless to the susceptible mind of a child. Butler v. Michigan, 352 U.S. 380, 77 S.Ct. 524, 1 L.Ed.2d 412. And see De Jonge v. Oregon, 299 U.S. 353, 57 S.Ct. 255, 81 L.Ed. 278; Talley v. California, 362 U.S. 60, 80 S.Ct. 536, 4 L.Ed.2d 559.3 But the consideration of feasible alternative modes of regulation in these cases did not imply that the Court might substitute its own choice among alternatives for that of a state legislature, or that the States were to be restricted to the 'narrowest' workable means of accomplishing an end. See Prince v. Massachusetts, 321 U.S. 158, 169—170, 64 S.Ct. 438, 443—444, 88 L.Ed. 645. Consideration of alternatives may focus the precise exercise of state legislative authority which is tested in this Court by the standard of reasonableness, but it does not alter or displace that standard. The issue remains whether, in light of the particular kind of restriction upon individual liberty which a regulation entails, it is reasonable for a legislature to choose that form of regulation rather than others less restrictive. To that determination, the range of judgment easily open to a legislature in considering the relative degrees of efficiency of alternative means in achieving the end it seeks is pertinent.
27
In the present case the Court strikes down an Arkansas statute requiring that teachers disclose to school officials all of their organizational relationships, on the ground that 'Many such relationships could have no possible bearing upon the teacher's occupational competence or fitness.' Granted that a given teacher's membership in the First Street Congregation is, standing alone, of little relevance to what may rightly be expected of a teacher, is that membership equally irrelevant when it is discovered that the teacher is in fact a member of the First Street Congregation and the Second Street Congregation and the Third Street Congregation and the 4—H Club and the 3—H Club and half a dozen other groups? Presumably, a teacher may have so many divers associations, so many divers commitments, that they consume his time and energy and interest at the expense of his work or even of his professional dedication. Unlike wholly individual interests, organizational connections—because they involve obligations undertaken with relation to other persons—may become inescapably demanding and distracting. Surely, a school board is entitled to inquire whether any of its teachers has placed himself, or is placing himself, in a condition where his work may suffer. Of course, the State might ask: 'To how many organizations do you belong?' or 'How much time do you expend at organizational activity?' But the answer to such questions could reasonably be regarded by a state legislature as insufficient, both because the veracity of the answer is more difficult to test, in cases where doubts as to veracity may arise, than in the case of the answers required by the Arkansas statute, and because an estimate of time presently spent in organizational activity reveals nothing as to the quality and nature of that activity, upon the basis of which, necessarily, judgment or prophesy of the extent of future involvement must be based. A teacher's answers to the questions which Arkansas asks, moreover, may serve the purpose of making known to school authorities persons who come into contact with the teacher in all of the phases of his activity in the community, and who can be questioned, if need be, concerning the teacher's conduct in matters which this Court can certainly not now say are lacking in any pertinence to professional fitness. It is difficult to understand how these particular ends could be achieved by asking 'certain of (the State's) teachers about all their organizational relationships,' or 'all of its teachers about certain of their associational ties,' or all of its teachers how many associations currently involve them, or during how many hours; and difficult, therefore, to appreciate why the Court deems unreasonable and forbids what Arkansas does ask.
28
If I dissent from the Court's disposition in these cases, it is not that I put a low value on academic freedom. See Wieman v. Updegraff, 344 U.S. 183, 194, 73 S.Ct. 215, 220, 97 L.Ed. 216 (concurring opinion); Sweezy v. New Hampshire, 354 U.S. 234, 255, 77 S.Ct. 1203, 1214, 1 L.Ed.2d 1311 (concurring opinion). It is because that very freedom in its most creative reaches, is dependent in no small part upon the careful and discriminating selection of teachers. This process of selection is an intricate affair, a matter of fine judgment, and if it is to be informed, it must be based upon a comprehensive range of information. I am unable to say, on the face of this statute, that Arkansas could not reasonably find that the information which the statute requires—and which may not be otherwise acquired than by asking the question which it asks—is germane to that selection. Nor, on this record, can I attribute to the State a purpose to employ the enactment as a device for the accomplishment of what is constitutionally forbidden. Of course, if the information gathered by the required affidavits is used to further a scheme of terminating the employment of teachers solely because of their membership in unpopular organizations, that use will run afoul of the Fourteenth Amendment. It will be time enough, if such use is made, to hold the application of the statute unconstitutional. See Yick Wo v. Hopkins, 118 U.S. 356, 6 S.Ct. 1064, 30 L.Ed. 220. Because I do not find that the disclosure of teachers' associations to their school boards is, without more, such a restriction upon their liberty, or upon that of the community, as to overbalance the State's interest in asking the question, I would affirm the judgments below.
29
I am authorized to say that Mr. Justice CLARK, Mr. Justice HARLAN and Mr. Justice WHITTAKER agree with this opinion.
30
Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER, Mr. Justice CLARK and Mr. Justice WHITTAKER join, dissenting.
31
Of course this decision has a natural tendency to enlist support, involving as it does an unusual statute that touches constitutional rights whose protection in the context of the racial situation in various parts of the country demands the unremitting vigilance of the courts. Yet that very circumstance also serves to remind of the restraints that attend constitutional adjudication. It must be emphasized that neither of these cases actually presents an issue of racial discrimination. The statute on its face applies to all Arkansas teachers irrespective of race, and there is no showing that it has been discriminatorily administered.
32
The issue is whether, consistently with the Fourteenth Amendment, a State may require teachers in its public schools or colleges to disclose, as a condition precedent to their initial or continued employment, all organizations to which they have belonged, paid dues, or contributed within the past five years. Since I believe that such a requirement cannot be said to transgress the constitutional limits of a State's conceded authority to determine the qualifications of those serving it as teachers, I am bound to consider that Arkansas had the right to pass the statute in question, and therefore conceive it my duty to dissent.
33
The legal framework in which the issue must be judged is clear. The rights of free speech and association embodied in the 'liberty' assured against state action by the Fourteenth Amendment (see De Jonge v. Oregon, 299 U.S. 353, 364, 57 S.Ct. 255, 260, 81 L.Ed. 278; Gitlow v. New York, 268 U.S. 652, 672, 45 S.Ct. 625, 632, 69 L.Ed. 1138, dissenting opinion of Holmes, J.) are not absolute. Near v. Minnesota, 283 U.S. 697, 708, 51 S.Ct. 625, 628, 75 L.Ed. 1357; Whitney v. California, 274 U.S. 357, 373, 47 S.Ct. 641, 647, 71 L.Ed. 1095 (concurring opinion of Brandeis, J.). Where official action is claimed to invade these rights, the controlling inquiry is whether such action is justifiable on the basis of a superior governmental interest to which such individual rights must yield. When the action complained of pertains to the realm of investigation, our inquiry has a double aspect: first, whether the investigation relates to a legitimate governmental purpose; second, whether, judged in the light of that purpose, the questioned action has substantial relevance thereto. See Barenblatt v. United States, 360 U.S. 109, 79 S.Ct. 1081, 3 L.Ed.2d 1115; Uphaus v. Wyman, 360 U.S. 72, 79 S.Ct. 1040, 3 L.Ed.2d 1090.
34
In the two cases at hand, I think both factors are satisfied. It is surely indisputable that a State has the right to choose its teachers on the basis of fitness. And I think it equally clear, as the Court appears to recognize, that information about a teacher's associations may be useful to school authorities in determining the moral, professional, and social qualifications of the teacher, as well as in determining the type of service for which he will be best suited in the educational system. See Adler v. Board of Education, 342 U.S. 485, 72 S.Ct. 380, 96 L.Ed. 517; Beilan v. Board of Public Education, 357 U.S. 399, 78 S.Ct. 1317, 2 L.Ed.2d 1414; see also Slochower v. Board of Higher Education, 350 U.S. 551, 76 S.Ct. 637, 100 L.Ed. 692. Furthermore, I take the Court to acknowledge that, agreeably to our previous decisions, the State may enquire into associations to the extent that the resulting information may be in aid of that legitimate purpose. These cases therefore do not present a situation such as we had in N.A.A.C.P. v. Alabama, 357 U.S. 449, 78 S.Ct. 1163, 2 L.Ed.2d 1488, and Bates v. Little Rock, 361 U.S. 516, 80 S.Ct. 412, 4 L.Ed.2d 480, where the required disclosure bears no substantial relevance to a legitimate state interest.
35
Despite these considerations this statute is stricken down because, in the Court's view, it is too broad, because it asks more than may be necessary to effectuate the State's legitimate interest. Such a statute, it is said, cannot justify the inhibition on freedom of association which so blanket an inquiry may entail. Cf. N.A.A.C.P. v. Alabama, supra; Bates v. Little Rock, supra.
36
I am unable to subscribe to this view because I believe it impossible to determine a priori the place where the line should be drawn between what would be permissible inquiry and over broad inquiry in a situation like this. Certainly the Court does not point that place out. There can be little doubt that much of the associational information called for by the statute will be of little or no use whatever to the school authorities, but I do not understand how those authorities can be expected to fix in advance the terms of their enquiry so that it will yield only relevant information.
37
I do not mean to say that alternatives such as an inquiry limited to the names of organizations of whose character the State is presently aware, or to a class of organizations defined by their purposes, would not be more consonant with a decent respect for the privacy of the teacher, nor that such alternatives would be utterly unworkable. I do see, however, that these alternatives suffer from deficiencies so obvious where a State is bent upon discovering everything which would be relevant to its proper purposes, that I cannot say that it must, as a matter of constitutional compulsion, adopt some such means instead of those which have been chosen here.
38
Finally, I need hardly say that if it turns out that this statute is abused, either by an unwarranted publicizing of the required associational disclosures or otherwise, we would have a different kind of case than those presently before us. See Lassiter v. Northampton Elections Board, 360 U.S. 45, 53—54, 79 S.Ct. 985, 991, 3 L.Ed.2d 1072. All that is now here is the validity of the statute on its face, and I am unable to agree that in this posture of things the enactment can be said to be unconstitutional.
39
I would affirm in both cases.
1
The statute is in seven sections. Section 1 provides: 'It is hereby declared that the purpose of this act is to provide assistance in the administration and financing of the public schools of Arkansas, and institutions of higher learning supported wholly or in part by public funds, and it is hereby determined that it will be beneficial to the public schools and institutions of higher learning and the State of Arkansas, if certain affidavits of membership are required as hereinafter provided.'
Section 2 provides: 'No superintendent, principal, or teacher shall be employed or elected in any elementary or secondary school by the district operating such school, and no instructor, professor, or other teacher shall be employed or elected in any institution of higher learning, or other educational institution supported wholly or in part by public funds, by the trustees or governing authority thereof, until, as a condition precedent to such employment, such superintendent, principal, teacher, instructor or professor shall have filed with such board
of trustees or governing authority an affidavit as to the names and addresses of all incorporated and/or unincorporated associations and organizations that such superintendent, principal, teacher, instructor or professor is or within the past five years has been a member of, or to which organization or association such superintendent, principal, teacher, instructor, professor, or other teacher is presently paying, or within the past five years has paid regular dues, or to which the same is making or within the past five years has made regular contributions.'
Section 3 sets out the form of affidavit to be used.
Section 4 provides: 'Any contract entered into by any board of any school district, board of trustees of any institution of higher learning, or other educational institution supported wholly or in part by public funds, or by any governing authority thereof, with any superintendent, principal, teacher, instructor, professor, or other instructional per-
sonnel, who shall not have filed the affidavit required in Section 2 hereof prior to the employment or election of such person and prior to the making of such contracts, shall be null and void and no funds shall be paid under said contract to such superintendent, principal, teacher, instructor, professor, or other instructional personnel; any funds so paid under said contract to such superintendent, principal, teacher, instructor, professor, or other instructional personnel, may be recovered from the person receiving the same and/or from the board of trustees or other governing authority by suit filed in the circuit court of the county in which such contract was made, and any judgment entered by such court in such cause of action shall be a personal judgment against the defendant therein and upon the official bonds made by such defendants, if any such bonds be in existence.'
Section 5 provides that a teacher filing a false affidavit shall be guilty of perjury, punishable by a fine, and shall forfeit his license to teach in any school or other institution of learning supported wholly or in part by public funds.
Section 6 is a separability provision.
Section 7 is an emergency clause, reading in part as follows:
'It is hereby determined that the decisions of the United States Supreme Court in the school segregation cases require solution of a great variety of local public school problems of considerable complexity immediately and which involve the health, safety and general welfare of the people of the State of Arkansas, and that the purpose of this act is to assist in the solution of these problems and to provide for the more efficient administration of public education.'
2
In th same proceeding the court held constitutionally invalid an Arkansas statute (Acts 1959, Act 115) making it unlawful for any member of the National Association for the Advancement of Colored People to be employed by the State of Arkansas or any of its subdivisions. 174 F.Supp. 351.
3
The affirmation recited that Carr was 'conscientiously opposed to taking an oath or swearing in any form * * *.'
4
The actual holdings in Adler and Beilan, involving the validity of teachers' discharges, are not relevant to the present case.
5
The declared purpose of Act 10 is 'to provide assistance in the administration and financing of the public schools * * *.' The declared justification for the emergency clause is 'to assist in the solution' of problems raised by 'the decisions of the United States Supreme Court in the school segregation cases.' See note 1. But neither the breadth and generality of the declared purpose nor the possible irrelevance of the emergency provision detracts from the existence of an actual relevant state interest in the inquiry.
6
The record contains an opinion of the State Attorney General that 'it is an administrative determination, to be made by the respective Boards, as to the disclosure of information contained in the affidavits.' The Supreme Court of Arkansas has held only that 'the affidavits need not be opened to public inspection * * *.' 231 Ark. 641, 646, 331 S.W.2d 701, 704. (Emphasis added.)
7
In the state court proceedings a witness who was a member of the Capital Citizens Council testified that his group intended to gain access to some of the Act 10 affidavits with a view to eliminating from the school system persons who supported organizations unpopular with the group. Among such organizations he named the American Civil Liberties Union, the Urban League, the American Association of University Professors, and the Women's Emergency Committee to Open Our Schools.
8
In other areas, involving different constitutional issues, more administrative leeway has been thought allowable in the interest of increased efficiency in accomplishing a clearly constitutional central purpose. See Purity Extract & Tonic Co. v. Lynch, 226 U.S. 192, 33 S.Ct. 44, 57 L.Ed. 184; Jacob Ruppert, Inc. v. Caffey, 251 U.S. 264, 40 S.Ct. 141, 64 L.Ed. 260; Schlesinger v. Wisconsin, 270 U.S. 230, 241, 46 S.Ct. 260, 262, 70 L.Ed. 557 (dissenting opinion); Queenside Hills Realty Co. v. Saxl, 328 U.S. 80, 83, 66 S.Ct. 850, 851, 90 L.Ed. 1096. But cf. Dean Milk Co. v. Madison, 340 U.S. 349, 71 S.Ct. 295, 95 L.Ed. 329.
9
See Freund, Competing Freedoms in American Constitutional Law, 13 U. of Chicago Conference Series 26, 32—33; Richardson, Freedom of Expression and the Function of Courts, 65 Harv.L.Rev. 1, 6, 23—24; Comment, Legislative Inquiry into Political Activity: First Amendment Immunity From Committee Interrogation, 65 Yale L.J. 1159, 1173—1175.
1
See also Hague v. C.I.O., 307 U.S. 496, 59 S.Ct. 954, 83 L.Ed. 1423; Schneider v. State, 308 U.S. 147, 60 S.Ct. 146, 84 L.Ed. 155 (the Irvington ordinance); Largent v. Texas, 318 U.S. 418, 63 S.Ct. 667, 87 L.Ed. 873; Jones v. Opelika, 319 U.S. 103, 63 S.Ct. 890, 87 L.Ed. 1290, vacating 316 U.S. 584, 62 S.Ct. 1231, 86 L.Ed. 1691 (the Opelika ordinance); Niemotko v. Maryland, 340 U.S. 268, 71 S.Ct. 325, 328, 95 L.Ed. 267, 280; Joseph Burstyn, Inc., v. Wilson, 343 U.S. 495, 72 S.Ct. 777, 96 L.Ed. 1098; Gelling v. Texas, 343 U.S. 960, 72 S.Ct. 1002, 96 L.Ed. 1359; Superior Films, Inc., v. Department of Education, 346 U.S. 587, 74 S.Ct. 286, 98 L.Ed. 329; Staub v. Baxley, 355 U.S. 313, 78 S.Ct. 277, 2 L.Ed.2d 302; cf. Marsh v. Alabama, 326 U.S. 501, 66 S.Ct. 276, 90 L.Ed. 265; Tucker v. Texas, 326 U.S. 517, 66 S.Ct. 274, 90 L.Ed. 274. The common-law count in the Cantwell case involved considerations similar to those which were determinative of the decisions cited in text and note, at note 2, infra.
2
See also Stromberg v. California, 283 U.S. 359, 51 S.Ct. 532, 75 L.Ed. 1117; Winters v. New York, 333 U.S. 507, 68 S.Ct. 665, 92 L.Ed. 840.
3
Language characterizing state statutes as overly broad has sometimes been found in opinions where it was unnecessary to the result, and merely meant to express the idea that whatever state interest was there asserted as underlying a regulation was insufficient to justify the regulation's application to particular circumstances fairly within the Fourteenth Amendment's protection. Compare Thomas v. Collins, 323 U.S. 516, 65 S.Ct. 315, 89 L.Ed. 430, with Fiske v. Kansas, 274 U.S. 380, 47 S.Ct. 655, 71 L.Ed. 1108. Compare Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313, with Breard v. Alexandria, 341 U.S. 622, 71 S.Ct. 920, 95 L.Ed. 1233.
| 23
|
364 U.S. 587
81 S.Ct. 321
5 L.Ed.2d 312
Lawrence CALLANAN, Petitioner,v.UNITED STATES.
No. 47.
Argued Nov. 15, 16, 1960.
Decided Jan. 9, 1961.
Rehearing Denied Feb. 20, 1961.
See 365 U.S. 825, 81 S.Ct. 687.
Mr. Morris A. Shenker, St. Louis, Mo., and Mr. Sidney M. Glazer, Berkeley, Mo., for petitioner.
Mr. Theodore G. Gilinsky, Washington, D.C., for respondent.
Mr. Justice FRANKFURTER delivered the opinion of the Court.
1
Petitioner was convicted by a jury in the United States District Court for the Eastern District of Missouri on two counts. Count I charged a conspiracy to obstruct commerce by extorting money, and Count II charged the substantive offense of obstructing commerce by extortion, both crimes made punishable by the Hobbs Anti-Racketeering Act, 18 U.S.C. § 1951, 18 U.S.C.A. § 1951.1 Petitioner was sentenced to consecutive terms of twelve years on each count, but the sentence on Count II was suspended and replaced with a five-year probation to commence at the expiration of his sentence under Count I.2 On appeal, the conviction was affirmed, 223 F.2d 171.
2
Petitioner thereafter sought a correction of his sentence, invoking Rule 35 of the Federal Rules of Criminal Procedure, 18 U.S.C.A., as well as 28 U.S.C. § 2255, 28 U.S.C.A. § 2255.3 He claimed that the maximum penalty for obstructing interstate commerce under the Act by any means is twenty years and that Congress did not intend to subject individuals to two penalties. The District Court denied relief, holding that the Hobbs Act gave no indication of a departure from the usual rule that a conspiracy and the substantive crime which was its object may be cumulatively punished. 173 F.Supp. 98. The Court of Appeals for the Eighth Circuit affirmed this judgment, 274 F.2d 601. Deeming the question raised by petitioner of sufficient importance, we brought the case here. 362 U.S. 939, 80 S.Ct. 807, 4 L.Ed.2d 769.
3
Under the early common law, a conspiracy—which constituted a misdemeanor—was said to merge with the completed felony which was its object See Commonwealth v. Kingsbury, 5 Mass. 106. This rule, however, was based upon significant procedural distinctions between misdemeanors and felonies. The defendant in a misdemeanor trial was entitled to counsel and a copy of the indictment; these advantages were unavailable on trial for a felony. King v. Westbeer, 1 Leach 12, 15, 168 Eng.Rep. 108, 110 (1739); see Clark and Marshall, Crimes, § 2.03, n. 96 (6th ed). Therefore no conviction was permitted of a constituent misdemeanor upon an indictment for the felony. When the substantive crime was also a misdemeanor, People v. Mather, 4 Wend., N.Y., 229, 265, or when the conspiracy was defined by statute as a felony, State v. Mayberry, 48 Me. 218, 238, merger did not obtain. As these common-law procedural niceties disappeared, the merger concept lost significance, and today it has been abandoned. Queen v. Button, 11 Q.B. 929, 116 Eng.Rep. 720; Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489.
4
Petitioner does not draw on this archaic law of merger. He argues that Congress by combining the conspiracy and the substantive offense in one provision, § 1951, manifested an intent not to punish commission of two offenses cumulatively. Unlike the merger doctrine, petitioner's position does not question that the Government could charge a conspiracy even when the substantive crime that was its object had been completed. His concern is with the punitive consequences of the choice thus open to the Government; it can indict for both or either offense, but, petitioner contends, it can punish only for one.
5
The present Hobbs Act had as its antecedent the Anti-Racketeering Act of 1934.4 In view of this Court's restrictive decision in United States v. Local 807, 1942, 315 U.S. 521, 62 S.Ct. 642, 86 L.Ed. 1004, Congress, under the leadership of Representative Hobbs, sought to stiffen the 1934 legislation. After several unsuccessful attempts over a period of four years, a bill was passed in 1946 which deleted any reference to wages paid by an employer to an employee, on which the decision in Local 807 had relied.5 The 1934 Act was further invigorated by increasing the maximum penalty from ten to twenty years.
6
Petitioner relies on numerous statements by members of Congress concerning the severity of the twenty-year penalty to illustrate that cumulative sentences were not contemplated.6 But the legislative history sheds no light whatever on whether the Congressmen were discussing the question of potential sentences under the whole bill or merely defending the maximum punishment under its specific sections. All the legislative talk only reiterates what the statute itself says—that the maximum penalty is twenty years.
7
The distinctiveness between a substantive offense and a conspiracy to commit is a postulate of our law. 'If has been long and consistently recognized by the Court that the commission of the substantive offense and a conspiracy to commit it are separate and distinct offenses.' Pinkerton v. United States, 328 U.S. 640, 643, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489. See also Pereira v. United States, 347 U.S. 1, 11, 74 S.Ct. 358, 364, 98 L.Ed. 435. Over the years, this distinction has been applied in various situations. For example, in Clune v. United States, 159 U.S. 590, 16 S.Ct. 125, 40 L.Ed. 269, the Court upheld a two-year sentence for conspiracy over the objection that the crime which was the object of the unlawful agreement could only be punished by a $100 fine. The same result was reached when, as in the present case, both offenses were described within the same statute. In Carter v. McClaughry, 183 U.S. 365, 22 S.Ct. 181, 46 L.Ed. 236, cumulative sentences for conspiracy to defraud and fraud were upheld. 'Cumulative sentences,' the Court pronounced, 'are not cumulative punishments, and a single sentence for several offenses, in excess of that prescribed for one offense, may be authorized to statute.' 183 U.S. at page 394, 22 S.Ct. at page 193.
8
This settled principle derives from the reason of things in dealing with socially reprehensible conduct: collective criminal agreement—partnership in crime—presents a greater potential threat to the public than individual delicts. Concerted action both increases the likelihood that the criminal object will be successfully attained and decreases the probability that the individuals involved will depart from their path of criminality. Group association for criminal purposes often, if not normally, makes possible the attainment of ends more complex than those which one criminal could accomplish. Nor is the danger of a conspiratorial group limited to the particular end toward which it has embarked. Combination in crime makes more likely the commission of crimes unrelated to the original purpose for which the group was formed. In sum, the danger which a conspiracy generates is not confined to the substantive offense which is the immediate aim of the enterprise.7
9
These considerations are the presuppositions of the separately defined crimes in § 1951. The punitive consequences that presumably flow from them must be placed in such context. Congress is, after all, not a body of laymen unfamiliar with the commonplaces of our law. This legislation was the formulation of the two Judiciary Committees, all of whom are lawyers, and the Congress is predominately a lawyers' body. We attribute 'to Congress a tacit purpose—in the absence of any inconsistent expression—to maintain a long-established distinction between offenses essentially different; a distinction whose practical importance in the criminal law is not easily overestimated.' United States v. Rabinowich, 238 U.S. 78, 88, 35 S.Ct. 682, 685, 59 L.Ed. 1211.
10
These considerations are reinforced by a prior interpretation of the Sherman Act whose minor penalties influenced the enactment of the 1934 antiracketeering legislation.8 In American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575, individual and corporate defendants were convicted, inter alia, of conspiracy to monopolize and monopolization, both made criminal by § 2. They were sentenced to a fine of $5,000, the maximum statutory penalty, on each of the counts. We affirmed these convictions on the basis of our past decisions in this field of law. 328 U.S. at pages 788—789, 66 S.Ct. at pages 1128—1129. To dislodge such conventional consequences in the outlawing of two disparate offenses, conspiracy and substantive conduct, and effectuate a reversal of the settled interpretation we pronounced in American Tobacco would require specific language to the contrary. See also Albrecht v. United States, 273 U.S. 1, 11, 47 S.Ct. 250, 253, 71 L.Ed. 505; Burton v. United States, 202 U.S. 344, 377, 26 S.Ct. 688, 697, 50 L.Ed. 1057.
11
Petitioner argues that some of the other provisions of § 1951 seem to overlap and would not justify cumulative punishment for separate crimes. From this he deduces a congressional intent that the statute allows punishment for only one crime no matter how many separately outlawed offenses have been committed. These contentions raise problems of statutory interpretation not now here. That some of the substantive sections may be repetitive as being variants in phrasing of the same delict, or that petitioner could not be cumulatively punished for both an attempt to extort and a completed act of extortion, has no relevance to the legal consequences of two incontestably distinctive offenses, conspiracy and the completed crime that is its object. In the American Tobacco litigation it was decided that the attempt to monopolize, described in § 2 of the Sherman Act, merged with the completed monopolization, but this result did not qualify the holding that cumulative sentences for the conspiracy and the substantive crime, also contained within § 2, were demanded by the governing precepts of our law.
12
Petitioner invokes the rule of lenity for decision in this case. But that 'rule,' as is true of any guide to statutory construction, only serves as an aid for resolving an ambiguity; it is not to be used to beget one.9 'To rest upon a formula is a slumber that, prolonged, means death.' Mr. Justice Holmes in Collected Legal Papers, p. 306. The rule comes into operation at the end of the process of construing what Congress has expressed, not at the beginning as an overriding consideration of being lenient to wrongdoers. That is not the function of the judiciary. In United States v. Universal C.I.T. Credit Corp., 344 U.S. 218, 73 S.Ct. 227, 97 L.Ed. 260; Bell v. United States, 349 U.S. 81, 75 S.Ct. 620, 99 L.Ed. 905, and Ladner v. United States, 358 U.S. 169, 79 S.Ct. 209, 3 L.Ed.2d 199, the applicable statutory provisions were found to be unclear as to the appropriate unit of prosecution; accordingly, the rule of lenity was utilized, in favorem libertatis, to resolve the ambiguity. In Price v. United States, 352 U.S. 322, 77 S.Ct. 403, 1 L.Ed.2d 370, and Heflin v. United States, 358 U.S. 415, 79 S.Ct. 451, 3 L.Ed.2d 407, the Court had to meet the problem whether various subsidiary provisions of the Federal Bank Robbery Act, 18 U.S.C. § 2113, 18 U.S.C.A. § 2113, which punished entering with intent to commit robbery and possessing stolen property, merged when applied to a defendant who was also being prosecuted for the robbery itself. Again the rule of lenity served to resolve the doubt with which Congress faced the Court.
13
Here we have no such dubieties within the statute itself. Unlike all of these cases, the problem before us does not involve the appropriate unit of prosecution—whether conduct constitutes one or several violations of a single statutory provision—nor is it an open question whether conspiracy and its substantive aim merge into a single offense. This is an ordinary case of a defendant convicted of violating two separate provisions of a statute, whereby Congress defined two historically distinctive crimes composed of differing components. If petitioner had committed two separate acts of extortion, no one would question that the crimes could be punished by consecutive sentences; the result seems no less clear in the present case. It was therefore within the discretion of the trial judge to fix separate sentences, even though Congress has seen fit to authorize for each of these two offenses what may seem to some to be harsh punishment.
14
Affirmed.
15
Mr. Justice STEWART, whom The CHIEF JUSTICE, Mr. Justice BLACK, and Mr. Justice DOUGLAS join, dissenting.
16
To be sure, it is now a common place of our law that the commission of a substantive crime and a conspiracy to commit it may be treated by Congress as separate offenses, cumulatively punishable. Pinkerton v. United States, 328 U.S. 640, 643, 66 S.Ct. 1180, 1182, 90 L.Ed. 1489. It is also true that Congress has often chosen to exercise its power to make separate offenses of the two.1 But neither of these generalities provides an answer to the question now before us. The question here is the meaning of this law, the Hobbs Anti-Racketeering Act. I do not agree that under this statute a man can be separately convicted and cumulatively punished for obstructing commerce by extorting money, and for conspiring to obstruct commerce by the same extortion. My view is based both upon the language of the statute and upon its history, considered in the light of principles that have consistently guided this Court's decisions in related areas of federal criminal law.
17
The relevant section of the Act, repeated for convenience in the margin,2 is not a model of precise verbal structure. Purely as a matter of syntax, the section could be read as creating separate offenses for obstructing commerce, for delaying commerce, and for affecting commerce by any one of the proscribed means. It could be read, again merely as a matter of grammar, as creating distinct offenses for obstructing commerce by robbery, for threatening physical violence to property in connection with the same robbery, for committing the physical violence which had been threatened, for attempting to do so, and for conspiring to do so. Read in such a way the Act could be made to justify the imposition upon one man of separate sentences totalling more than a hundred years for one basic criminal transaction. To construe this statute that way would obviously be absurd, and I do not understand that the Court today even remotely suggests any such construction.
18
The Act, then, must mean something else. I think its language can fairly be read as imposing a maximum twenty-year sentence for each actual or threatened interference with interstate commerce accomplished by any one or more of the proscribed means. Such a reading of the Act does violence neither to semantics nor to common sense. It is fully justified by the legislative history, and it is consistent with settled principles governing the construction of ambiguous criminal statutes. If this is what the Act means, then the indictment in the present case charged but a single offense, and it was wrong to impose two separate sentences upon the petitioner.
19
The antecedent of the present Act was the Anti-Racketeering Act of 1934. That legislation was originally introduced after extensive hearings before a subcommittee of the Senate Committee on Commerce, popularly known as the Committee on Racketeering. The original bill did not contain any reference to conspiracy. S. 2248, 73d Cong., 2d Sess. The Committee Report consisted of a memorandum from the Department of Justice, stating that the purpose of the bill was to permit prosecution of so-called 'racketeers' for acts constituting racketeering. Significantly, the memorandum stated 'The accompanying proposed statute is designed to avoid many of the embarrassing limitations in the wording and interpretation of the Sherman Act, and to extend Federal jurisdiction over all restraints of any commerce within the scope of the Federal Government's constitutional powers. Such restraints if accompanied by extortion, violence, coercion, or intimidation, are made felonies, whether the restraints are in form of conspiracies or not.' (Emphasis added.) S.Rep. No. 532, 73d Cong., 2d Sess., p. 1.
20
After the bill had passed the Senate fear was expressed that some of the provisions of the proposed legislation might endanger legitimate activities of organized labor. In response to these fears the bill was revised by the House Judicary Committee along lines suggested by the Attorney General, and it was then that the statutory reference to conspiracy was added, without explanation. H.R.Rep. No. 1833, 73d Cong., 2d Sess. The bill was passed by the House after adoption of an amendment reducing the maximum punishment provision to '10 years or by a fine of $10,000 or both.' 78 Cong.Rec. 11403. Thereafter, the Senate approved the House bill without debate. 78 Cong.Rec. 11482.
21
In 1942 this Court considered the 1934 Act in United States v. Local 807, 315 U.S. 521, 62 S.Ct. 642, 86 L.Ed. 1004, holding that under the statute's labor exemption the petitioners there had been wrongly convicted. Within a few weeks after that decision, Representative Hobbs introduced a bill in the House designed to eliminate the labor exemption from the statute. Similar amendatory bills were introduced in succeeding sessions of Congress, and in 1946 the Act was finally amended by deletion of the provision exempting wages paid by an employer to an employee, the exemption upon which the decision in the Local 837 case had been based.
22
With that aspect of the 1946 amendment we are not here concerned. But the amendment made one other significant change in the Act: it increased the miximum penalty from ten to twenty years' imprisonment. The congressional debates over that provision throw considerable light upon the problem now before us. For two conclusions can be drawn from a review of the discussions in Congress of the proposed increase in the penalty provision. First, it is clear that many Members of Congress were seriously concerned by the severity of a penalty of twenty years in prison for violation of this statute. Expressions such as 'too drastic,' 'too severe,' and 'excessive' were used in describing what was referred to by one Member as 'even a possible penalty of 20 years.' 89 Cong.Rec. 3162, 3194, 3201, 3229. Secondly, it is clear that there was general agreement among both the proponents and the opponents of the legislation that twenty years was to be the maximum penalty that could be imposed upon a defendant convicted of violating the statute. 89 Cong.Rec. 3226. No one ever suggested that cumulative penalties could be inflicted.
23
In sum, then, we have here a statute which, as a matter of English language, can fairly be read as imposing a single penalty for each interference or threatened interference with interstate commerce by any or all of the prohibited means. We have evidence stemming from the very origin of the legislation that the unit of prosecution under the statute was to be each restraint of commerce, not each means by which the restraint was accomplished. As the original Senate Committee Report stated, 'restraints if accompanied by extortion, violence, coercion, or intimidation, are made felonies, whether the restraints are in form of conspiracies or not.' Finally, we have every indication that when the Act was amended in 1946 Congress was agreed that but a single maximum sentence of twenty years could be imposed upon conviction, and that many Members of Congress considered even that penalty far too severe.
24
It is said, however, that despite all this we must attribute to Congress a 'tacit purpose' to provide cumulative punishments for conspiracy and substantive conduct under this statute. We are told that this presumption of a tacit purpose must prevail because there is no 'specific language to the contrary' in the Act.3 But to indulge in such a presumption seems to me wholly at odds with principles firmly established by our previous decisions.
25
In Bell v. United States, 349 U.S. 81, 75 S.Ct. 620, 99 L.Ed. 905, we described the approach to be taken in a case such as this. 'When Congress has the will it has no difficulty in expressing it * * *. When Congress leaves to the Judiciary the task of imputing to Congress an undeclared will, the ambiguity should be resolved in favor of lenity.' 349 U.S. at page 83, 75 S.Ct. at page 622. In Ladner v. United States, 358 U.S. 169, 79 S.Ct. 209, 3 L.Ed.2d 199, we said: 'This policy of lenity means that the Court will not interpret a federal criminal statute so as to increase the penalty that it places on an individual when such an interpretation can be based on no more than a guess as to what Congress intended.' 358 U.S. at page 178, 79 S.Ct. at page 214. In Prince v. United States, 352 U.S. 322, 77 S.Ct. 403, 1 L.Ed.2d 370, we spoke of the doctrine as one 'of not attributing to Congress, in the enactment of criminal statutes, an intention to punish more severely than the language of its laws clearly imports in the light of pertinent legislative history.' 352 U.S. at page 329, 77 S.Ct. at page 407. These recent expressions are but restatements in a specific context of the ancient rule that a criminal statute is to be strictly construed. I would not depart from that rule in the present case.
1
Section 1951(a) is as follows:
'Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined not more than $10,000 or imprisoned not more than twenty years, or both.'
The pertinent parts of the Hobbs Act Amendments of 1946, 60 Stat. 420, from which the 1948 codification was compiled, were as follows:
'Sec. 2. Whoever in any way or degree obstructs, delays, or affects commerce, or the movement of any article or commodity in commerce, by robbery or extortion, shall be guilty of a felony.
'Sec. 3. Whoever conspires with another or with others, or acts in concert with another or with others to do anything in violation of section 2 shall be guilty of a felony.
'Sec. 4. Whoever attempts or participates in an attempt to do anything in violation of section 2 shall be guilty of a felony.
'Sec. 5. Whoever commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of section 2 shall be guilty of a felony.
'Sec. 6. Whoever violates any section of this title shall, upon conviction thereof, be punished by imprisonment for not more than twenty years or by a fine of not more than $10,000, or both.'
The Reviser's Note to the 1948 Code states that 'The words 'attempts or conspires so to do' were substituted for sections 3 and 4 of the 1946 act, * * *'
2
Petitioner was released from imprisonment in April 1960 and currently is on parole. Both parties and the courts below apparently have interpreted the probationary period for Count II to commence at the expiration of petitioner's parole for Count I.
3
Both courts below ruled that 28 U.S.C. § 2255, 28 U.S.C.A. § 2255, was not available since it would be premature to claim the 'right to be released' from a sentence not yet served. Since, as the Government concedes, Rule 35 is available to correct an illegal sentence when the claim is based on the face of the indictment even if such claim had not been raised on direct appeal, Heflin v. United States, 358 U.S. 415, 418, 422, 79 S.Ct. 451, 453, 455, 3 L.Ed.2d 407, the applicability of § 2255 need not be considered.
4
The original bill, S. 2248, 73d Cong., 2d Sess., did not contain any provision concerning conspiracy. (Of course, the general conspiracy statute, R.S. § 5440, now 18 U.S.C. § 371, 18 U.S.C.A. § 371, which then provided for a maximum two-year sentence, was available.) The bill made punishable by imprisonment from one to ninety-nine years acts of violence, extortion, and coercion which interfered with interstate commerce. 78 Cong.Rec. 11403. The purpose of the legislation was to provide for direct prosecution of large-scale racketeering, which formerly had been ineffectively attempted through the Sherman Act, 15 U.S.C.A. §§ 1 7, 15 note, which had a maximum penalty of one-year imprisonment or $5,000 fine. S.Rep. No. 532, 73d Cong., 2d Sess. p. 1. After the bill had passed the Senate, 78 Cong.Rec. 5735, some question was raised as to whether legitimate labor activity was not threatened by the statutory phraseology, 78 Cong.Rec. 5859, 10867, and provisos were suggested by the House Judiciary Committee in reporting the measure to the full body. H.R.Rep. No. 1833, 73d Cong., 2d Sess. The Committee, upon the suggestion of the Attorney General, further added a section making conspiracy to commit any of the designated substantive violations punishable. Ibid. The amended bill was passed by the House substantially as reported except that the penalty was decreased to ten years or $10,000. 78 Cong.Rec. 11403. The House bill was summarily approved by the Senate. 78 Cong.Rec. 11482.
5
A little over two months after the decision, H.R. 7067 was introduced by Representative Hobbs in the House of Representatives, 88 Cong.Rec. 4080, following Hearings before a Subcommittee of the Committee on the Judiciary, 77th Cong., 2d Sess. The bill was reported favorably out of committee, the only major change being the reduction of the proposed twenty-year maximum sentence to ten years. In discussing the various provisions, the report stated: 'The objective of Title I is to prevent anyone from obstructing, delaying, or affecting commerce, or the movement of any article or commodity in commerce by robbery or extortion as defined in the bill. A conspiracy or attempt to do anything in violation of section 2 is likewise made punishable * * *.' H.R.Rep. No. 2176, 77th Cong., 2d Sess., p. 9. No further congressional action was taken on the bill.
The following year, Representative Hobbs introduced H.R. 653 which was identical with his prior bill. This time the Committee did not amend the twenty-year penalty. H.R.Rep. No. 66, 78th Cong., 1st Sess. The measure passed the House, 89 Cong.Rec. 3230, but no action was taken in the Senate.
In 1945 Representative Hobbs again introduced his amendment. H.R. 32, 79th Cong., 1st Sess. The measure was passed by both bodies, 91 Cong.Rec. 11922, 92 Cong.Rec. 7308. Both Committee reports again stated that 'A conspiracy or attempt to do anything in violation of section 2 is likewise made punishable.' S.Rep. No. 1516, 79th Cong., 2d Sess.; H.R.Rep. No. 238, 79th Cong., 1st Sess., p. 9.
The pertinent parts of the amendment, 60 Stat. 420, are set out in note 1, supra.
6
Typical excerpts on which petitioner relies are:
'Mr. Delaney. The fact of the matter is that this committee report was not unanimous. Also, in the committee it was imdicated by those who favor this legislation that the legislation is too drastic, that the $10,000 fine and 20 years in jail is too drastic. They think a modified bill might be more in consonance with present-day thinking.' (89 Cong.Rec. 3162.)
'Mr. Fish. * * * I want to refer likewise to some of the excessive penalties. The penalties in this bill in my opinion are too severe—20 years and $10,000 fine. When we reach this section of the bill there should be very careful consideration given to reducing both the extent of the imprisonment and fines.' (89 Cong. Rec. 3194.)
'Mr. Springer. May I ask my distinguished colleague on the Committee on the Judiciary if it is not a fact that under the provisions of this bill the question of penalty is left entirely discretionary with the court trying the case? Under the provisions of this bill a person could be penalized to the extent of 1 year or less than 1 year or up to 20 years, all in the discretion of the court.
'Mr. Celler. Or his sentence might be suspended. I agree with the gentleman. But wny do we single out labor and impose even a possible penalty of 20 years?' (89 Cong.Rec. 3201.)
'Mr. Robsion. * * * There is some objection to the penalties prescribed in this bill for robbery and extortion. It has gone forth to the country that the penalty is 20 years. That is not a correct statement. The penalties range from 1 hour up to 20 years, according to the offense, and fines of $1 to $10,000. In other words, the 20 years and the $10,000 fine are the maximum.' (89 Cong.Rec. 3226.)
'Mr. Fish. * * * When the bill was before the Rules Committee it seemed to me at that time that these penalties were excessive. Twenty years is just about as bad as a life sentence, and I want to give the House the opportunity to reduce it by cutting it in half. This applies to threats. A man may be sent to jail for 20 years merely for threatening extortion.' (89 Cong.Rec. 3229.)
7
For a discussion of these problems of the law of conspiracy see Developments in the Law—Criminal Conspiracy, 72 Harv.L.Rev. 920, 922—925, 968—971.
8
The Senate Report which accompanied the original 1934 legislation described the purpose of the Act by setting forth a memorandum received from the Justice Department:
'* * * The nearest approach to prosecution of racketeers as such has been under the Sherman Antitrust Act. This act, however, was designed primarily to prevent and punish capitalistic combinations and monopolies, and because of the many limitations engrafted upon the act by interpretations of the courts, the act is not well suited for prosecution of persons who commit acts of violence, intimidation, and extortion. * * * Moreover, a violation of the Sherman Act is merely a misdemeanor, punishable by 1 year in jail plus $5,000 fine, which is not a sufficient penalty for the usual acts of violence and intimidation affecting interstate commerce.' S.Rep. No. 532, 73d Cong., 2d Sess., p. 1.
Representative Celler, in arguing for a less severe penalty during the 1945 debates, said:
'If you look at the antitrust penalties against employers you find that they are only $5,000 or 1 year in jail. This bill has direct relation to the antitrust laws, the Clayton Act (15 U.S.C.A. § 12 et seq.)' 91 Cong.Rec. 11902.
See also Representative Celler's remarks during the 1943 debates, 89 Cong.Rec. 3201.
9
'When Congress leaves to the Judiciary the task of imputing to Congress an undeclared will, the ambiquity should be resolved in favor of lenity.' Bell v. United States, 349 U.S. 81, 83, 75 S.Ct. 620, 622, 99 L.Ed. 905.
1
The most notable illustration of this is the General Conspiracy Statute, 18 U.S.C. § 371, 18 U.S.C.A. § 371.
2
'Whoever in any way or degree obstructs, delays, or affects commerce or the movement of any article or commodity in commerce, by robbery or extortion or attempts or conspires so to do, or commits or threatens physical violence to any person or property in furtherance of a plan or purpose to do anything in violation of this section shall be fined not more than $10,000 or imprisoned not more than twenty years, or both.' 18 U.S.C. § 1951(a), 18 U.S.C.A. § 1951(a).
3
The Court's reliance upon American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575, seems to me misplaced. The discussion of multiple punishment in that opinion was in response to the contention that Congress could not, because of the double jeopardy provision of the Fifth Amendment, impose multiple punishment for substantive conduct and conspiracy. Moreover, to decide the meaning of this Act upon the basis of what Congress may have provided in another statute, would seem to me a dubious way to resolve the issue. Cf. Bell v. United States, 349 U.S. 81, 83, 75 S.Ct. 620, 622, 99 L.Ed. 905.
| 01
|
364 U.S. 611
81 S.Ct. 338
5 L.Ed.2d 329
Paul John CARBO, Petitioner,v.UNITED STATES.
No. 72.
Argued Nov. 16, 1960.
Decided Jan. 9, 1961.
Messrs. A. L. Wirin and William B. Beirne, Los Angeles, Cal., for petitioner.
Miss Beatrice Rosenberg, Washington, D.C., for respondent.
Mr. Justice CLARK delivered the opinion of the Court.
1
The sole question in this case is whether the United States District Court for the Southern District of California has jurisdiction to issue a writ of habeas corpus ad prosequendum directing a New York City prison official to deliver petitioner, a prisoner of that City, to California for trial on an indictment pending in the California court.1 Both the District Court and the Court of Appeals have held that such jurisdiction does exist. 9 Cir., 277 F.2d 433. Recognizing that the effective administration of criminal justice required our decision on the point, we granted certiorari 363 U.S. 802, 80 S.Ct. 1239, 4 L.Ed.2d 1146. We affirm the judgment.
2
Petitioner, one of five defendants indicted on September 22, 1959, in the District Court for the Southern District of California on charges of extortion and conspiracy,2 was arrested in Baltimore, Maryland, where he posted bond returnable to the California court. Before appearing in California pursuant to his obligation under the bond, petitioner pleaded guilty to three misdemeanor charges in New York City and was sentenced to serve a two-year term in the New York City Prison, in addition to payment of a fine. Pursuant to a writ of habeas corpus ad prosequendum issuing from the California court to the New York City prison authorities, the petitioner appeared in custody before that court, was arraigned and pleaded not guilty to the indictment. Upon petitioner's request the court ordered that he be returned to the New York City Prison in custody in order to obtain counsel and that he thereafter be returned3 to California in time for trial on the indictment set for March 29, 1960. In order that petitioner might meet the obligation of his bond, as well as that of the latter order, the court, on March 16, 1960, again issued a writ of habeas corpus ad prosequendum to the New York City prison official directing the return of the petitioner for trial on March 29, 1960. On the same date and before it could be served, the petitioner moved to quash the writ. His sole ground of objection was that the United States District Court for the Southern District of California had no power to issue the writ to an officer located outside of its territorial limits. The contention is bottomed on the language of 28 U.S.C. § 2241 as codified in 1948, 28 U.S.C.A. § 2241.4 We have concluded that the issuance of the writ of habeas corpus ad prosequendum was within the jurisdiction of the court as authorized by the Congress in § 2241.
3
This is the first time this Court has undertaken a construction of the statutory authority for the issuance of writs of habeas corpus ad prosequendum since Chief Justice Marshall, in Ex parte Bollman, 1807, 4 Cranch 75, 2 L.Ed. 554, interpreted the language of the First Judiciary Act, 1 Stat. 81—82 (1789). It seems, therefore, both appropriate and in our view necessary to first trace the course followed by congressional action granting judicial power to issue writs of habeas corpus generally.
4
Section 14 of the First Judiciary Act gave authority to
5
'all the * * * courts of the United States * * * to issue writs of scire facias, habeas corpus, and all other writs not specially provided for by statute, which may be necessary for the exercise of their respective jurisdictions, and agreeable to the principles and usages of law. And * * * either of the justices of the supreme court, as well as judges of the district courts, shall have power to grant writs of habeas corpus for the purpose of an inquiry into the cause of commitment.—Provided, That writs of habeas corpus shall in no case extend to prisoners in gaol, unless where they are in custody, under or by colour of the authority of the United States, or are committed for trial before some court of the same, or are necessary to be brought into court to testify.' 1 Stat. 81—82 (1789).
6
We are indeed fortunate to have the benefit of the close scrutiny to which Chief Justice John Marshall subjected § 14 in Ex parte Bollman, supra. Initially, the Chief Justice observed that 'for the meaning of the term habeas corpus, resort may unquestionably be had to the common law; but the power to award the writ by any of the courts of the United States, must be given by written law.' 4 Cranch, at pages 93—94. Mindful perhaps of his own observation the preceding year that 'There is some obscurity in the act of congress.' Ex parte Burford, 3 Cranch 448, at page 449, 2 L.Ed. 495, he then proceeded to analyze the meaning of the writ as described in § 14. He recognized that the term habeas corpus 'is a generic term' including many species of that writ. It encompassed, he concluded, in addition to the Great Writ (habeas corpus ad subjiciendum, for an inquiry into the cause of restraint) the writ habeas corpus ad prosequendum. The 'Great Chief Justice' noted, however, that when used in the Constitution,5 that is, 'when used singly—when we say the writ of habeas corpus, without addition, we most generally mean that great writ' traditionally used to test restraint of liberty. Ex parte Bollman, supra, 4 Cranch at page 95.
7
The Chief Justice, following the English practice, particularly 3 Blackstone, Commentaries *129, noted that the writ ad prosequendum was necessary to remove a prisoner in order to prosecute him in the proper jurisdiction wherein the offense was committed. In his discussion of the common usage of the various writs, he recognized in Ex parte Bollman, supra, that the Congress had without qualification authorized the customary issuance of the writ ad prosequendum by a jurisdiction not the same as that wherein the prisoner was confined.
8
Following the Judiciary Act of 1789, there came a series of legislative amendments dealing with habeas corpus, but, significantly, all related solely to the usages of the Great Writ.6 Simultaneously with the expansion of the Great Writ, there developed from the common source, § 14 of the first Judiciary Act, a second line of statutes—the 'All writs' portion of § 14, in large measure the first sentence of that section, devolved by a process of addition along a course parallel to but separate from the habeas corpus provisions. Upon revision of the federal statutes in 1874, the general power of courts to issue writs of habeas corpus, which was a part of the express grant in the first sentence of § 14, disappeared from the language of the statutes derivative from the all writs portion of the first sentence, R.S. § 716 (1875), which after further amendment, is known today as 28 U.S.C. § 1651, 28 U.S.C.A. § 1651.7 This general power was, however, retained in the first of the three reorganized sections of the Revised Statutes dealing with habeas corpus, R.S. § 751 (1875),8 and served as the modern version of the authority for writs ad prosequendum upon which Marshall had relied in Ex parte Bollman.
9
The second section in the 1875 Revision of the laws on habeas corpus, R.S. § 752, authorizing issuance of the Great Writ by justices and judges, included the jurisdictional limitation9 which had been imposed for the first time10 in 1867, 14 Stat. 385. The motive for that limitation can be traced to the position reportedly taken by Chief Justice Chase in rejecting an application for the Great Writ from a prisoner on the ground that he was incarcerated outside his circuit.11 Mindful of the position taken by the Chief Justice, the Senate amended the first draft of the bill expanding once again the usage of the Great Writ and inserted the phrase 'within their respective jurisdictions'—an obvious limitation upon the action of individual judges and justices in exercising their power to issue the Great Writ. The debates in Congress indicate that it was thought inconvenient, potentially embarrassing, certainly expensive and on the whole quite unnecessary to provide every judge anywhere with authority to issue the Great Writ on behalf of applicants far distantly removed from the courts whereon they sat.12
10
The third section in the revised arrangement, R.S. § 753, collected all the instances in which the Great Writ might issue on behalf of imprisoned applicants.
11
From this history it becomes obvious that the Congress had continual concern for the Great Writ—habeas corpus ad subjiciendum. Exclusively to it did it give attention, and only upon its issuance did it impose a limitation. The other species of the writ, including that involved here—habeas corpus ad prosequendum—continued to derive authority for their issuance from what had been the first sentence of § 14 of the First Judiciary Act, which was not repealed until the 1875 Revision of the Statutes at Large, when it was re-enacted as two separate and distinct sections, R.S. § 716 (all-writs) and R.S. § 751 (general habeas corpus).
12
The Congress had obviously made an attempt to completely separate the habeas corpus provisions from those concerning other writs. However, just as in 1789 Marshall had found authority for the writ ad prosequendum in the reference to habeas corpus in the first sentence of § 14, so too in 1875 its authority was constituted in the lineal derivative of that sentence, R.S. § 751, which gave courts without jurisdictional limitation, as distinguished from individual judges, R.S. § 752, the power to issue writs of habeas corpus generally. State v. Sullivan, C.C., 50 F. 593, 598. Clearly, the use of the phrase in § 751 was generic, whereas the grant of authority to judges 'within their respective jurisdictions' in R.S. § 752 was specific, meaning only the Great Writ.13
13
Thus, the ad prosequendum writ, necessary as a tool for jurisdictional potency as well as administrative efficiency, extended to the entire country. The Great Writ, however, designed to relieve an individual from oppressive confinement, could well have been and properly was, at least as early as 1842,14 issuable only in the district of confinement. This was in consonance with convenience, necessity and avoidance of inordinate expense considerations remarkably unpersuasive when viewed in light of the role of the writ ad prosequendum.
14
This same trichotomy of sections in the revised statutes, setting out the statutory authority for habeas corpus, was continued through the 1911 revision of the Judicial Code which did not affect by repeal or significant amendment the existing law on the writs.15 In 1925, when the Judicial Code was amended, 43 Stat. 940, some attention was again paid to habeas corpus, but only to assign to individual judges of the Courts of Appeals the same power within their circuits as District Court judges had within their districts—an obvious adherence to the tradition embodied in R.S. § 752 which dealt only with the Great Writ and imposed the jurisdictional limitations on its issuance. In 1948, when further clarification of the United States Code16 was thought desirable, the statute took its present form, and for the first time in the legislative history of the writ of habeas corpus there was made explicit reference to the writ ad prosequendum in a statute.17 Although the three sections were merged into one, it was done only 'with changes in phraseology necessary to effect the consolidation.' Specifically disclaimed was any intent to change the existing law on habeas corpus. That the Revisor considered the new section to deal almost exclusively with the Great Writ, in spite of its authorization of writs ad testificandum and ad prosequendum, is obvious from his own note: 'Words 'for the purpose of an inquiry into the cause of restraint of liberty' * * * were omitted as merely descriptive of the writ.'18 However, as reconstructed in § 2241, the authority of courts, as well as of individual justices and judges, was now provided in a single sentence which ostensibly imposed upon all the same jurisdictional limitation previously imposed only as to the Great Writ's issuance by individual judges.
15
Since from its first usage the limiting phrase had always been a qualification of the authority of individual judges to issue the Great Writ, we see no reason to read into the new codification a change of meaning specifically disclaimed by the Revisor. It is our conclusion, therefore, that the territorial limitation refers solely to issuance of the Great Writ with which the bulk of the section is concerned.
16
We feel that there is no indication that there is required today a more restricted view of the writ habeas corpus ad prosequendum than was necessary in 1807 when Chief Justice Marshall considered it. Cases reported from at least three Circuit Courts of Appeals, involving extraterritorial writs ad prosequendum issued both before and after the 1948 revision, Taylor v. United States, 98 U.S.App.D.C. 183, 238 F.2d 259; United States ex rel. Moses v. Kipp, 7 Cir., 232 F.2d 147; Hill v. United States, 10 Cir., 186 F.2d 669; and perhaps four, cf. Vanover v. Cox, 8 Cir., 136 F.2d 442, indicate as an accepted, or at least there unchallenged,19 interpretation of the statutes, that the writ suffers no geographical limitations in its use.
17
Moreover, this construction appears neither strained nor anomalous. Much was borrowed from our English brethren. Although our own practice has limited the jurisdiction of courts and justices to issue the Great Writ, we have never abandoned the English system as to the ad prosequendum writ, Cf. 1 Chitty's Criminal Law 132 (1847), and 4 Bacon's Abridgment 566 (1856) for discussion of similar process. After almost two hundred years, we cannot now say it has been abandoned by a Congress which expressly said it intended to make no substantive changes. The more strongly are we led to this construction by recognition of the continually increasing importance assigned to authorizing extraterritorial process where patently desirable. Cf. Fed.Rules Crim.Proc., 4(c)(2) and 17(e) (1), 18 U.S.C.A. And it is the more so here where an accommodation is so important between the federal and state authorities. Hebert v. State of Louisiana, 1926, 272 U.S. 312, 315—316, 47 S.Ct. 103, 104, 71 L.Ed. 270. That comity is necessary between sovereignties in the administration of criminal justice in our federal-state system is given full recognition by affording through the use of the writ both respect and courtesy to the laws of the respective jurisdictions.20
18
Viewed in light of this history, petitioner's reliance upon cases dealing solely with territorial limitations upon issuance of the Great Writ and the criminal process authorized by 28 U.S.C. § 1651(a), 28 U.S.C.A. § 1651(a), unrelated to habeas corpus, is misplaced. Ahrens v. Clark, 1948, 335 U.S. 188 68 S.Ct. 1443, 92 L.Ed. 1898, is clearly inapposite as is also United States v. Hayman, 1952, 342 U.S. 205, 72 S.Ct. 263, 96 L.Ed. 232, in which habeas corpus was not even involved.21 To the extent that lower court decisions have relied upon a contrary construction of § 2241, we disapprove of their conclusions.22
19
Even were we to have agreed with petitioner's argument, we would nonetheless be constrained to recognize that, within the modern attitude adopted in Ex parte Endo, 1944, 323 U.S. 283, 65 S.Ct. 208, 89 L.Ed. 243, rigid formulae, even as to the issuance of the Great Writ, may be tempered by factual considerations requiring the decision that its 'objective may be in no way impaired or defeated by the removal of the prisoner from the territorial jurisdiction of the District Court' after the suit is begun. At page 307 of 323 U.S., at page 221 of 65 S.Ct. Such facts are present here. Petitioner Carbo filed an appearance bond, and submitted himself to the jurisdiction of the District Court by his personal appearance and plea of not guilty upon arraignment. Permission for his return to New York before trial was granted only upon his promise to return and the condition that he do so. Implicit in his request for the order of return to New York was his consent to the obligation imposed upon his custodians to return him to California promptly. The second writ of Habeas corpus ad prosequendum, the only writ here involved, served only as assurance to petitioner and to the court that he would not suffer default in the obligation of his bail. Just as the mere subsequent removal of the prisoner in Endo failed to render that application beyond the court's power to consider, so too here, in a similar vein, we cannot say that these factors have fastened onto petitioner so unsecure a leash as to suffer his escape from the jurisdiction of the California court. We must, therefore, in any event, affirm on these facts.
20
Affirmed.
21
Mr. Justice WHITTAKER, believing that, on the peculiar facts here involved, the writ, though denominated 'Habeas Corpus Ad Prosequendum,' had the effect of and properly should be regarded as a subpoena issued under Paragraph (a) and properly served under Paragraph (e)(1) of Rule 17 of Federal Rules of Criminal Procedure, concurs in the result of the Court's opinion.
22
Mr. Chief Justice WARREN, with whom Mr. Justice BLACK joins, dissenting.
23
I cannot agree with the decision of the Court. We have said that 'apart from specific exceptions created by Congress the jurisdiction of the district courts is territorial,' Ahrens v. Clark, 335 U.S. 188, 190, 68 S.Ct. 1443, 1444, 92 L.Ed. 1898, and that as a general rule 'a United States District Court cannot issue process beyond the limits of the district.' Georgia v. Pennsylvania R. Co., 324 U.S. 439, 467—468, 65 S.Ct. 716, 731, 89 L.Ed. 1051. These principles were applied to writs of habeas corpus ad subjiciendum in Ahrens v. Clark, supra, where we held that the words 'within their respective jurisdictions' as used in 28 U.S.C. § 2241, 28 U.S.C.A. § 2241, created a territorial limitation upon the habeas corpus jurisdiction of federal judges and courts. Today we are departing from Ahrens and the principles on which our decision in that case rested, for the Court holds that the restrictive language of § 2241 is inapplicable to writs of habeas corpus ad prosequendum. I can see no justification for these variant interpretations of the same language in the same statute.
24
We are not helped by the tortured history of § 2241 and its antecedents, since the legislative material relied on by the Court is, to say the least, ambiguous,1 and could be used to support inferences diametrically opposed to those drawn by the Court. For example, the fact that the first statutory reference to the writ of habeas corpus ad prosequendum does not appear until the enactment of § 2241 reasonably implies that none of the prior statutory history is relevant insofar as that writ is concerned, and that in codifying a unified habeas corpus statute in 1948, Congress intended the restrictive language of the first paragraph of § 2241 to apply to all of the writs thereafter enumerated, among which are both the writ ad subjiciendum and the writ ad prosequendum.
25
Although the specific question presented by this case is a matter of first impression for us, the Court concludes that, since three, and perhaps four, Circuit Courts of Appeals have upheld the issuance of extraterritorial writs ad prosequendum, its interpretation of the statute has become an 'accepted' one. But at the same time, the Court recognizes that there are other cases in which lower courts have 'relied upon a contrary construction of § 2241.' In each of these cases, the District Court overruled a defendant's request for a speedy trial by holding that since its orders could not 'run beyond its territorial jurisdiction,' it had no power to issue a writ ad prosequendum to bring to trial a defendant who was incarcerated outside of its district. In Matter of Van Collins, D.C.Me., 160 F.Supp. 165, 167; Phillips v. Hiatt, D.C.Del., 83 F.Supp. 935, 938. Cf. Edgerly v. Kennelly, 7 Cir., 215 F.2d 420; Yodock v. United States, 3 Cir., 196 F.2d 1018. In view of these cases, it can hardly be said that the Court's interpretation has become a generally 'accepted' one.
26
The court below justified the District Court's action not upon § 2241, but rather upon the all writs statute, 28 U.S.C. § 1651, 28 U.S.C.A. § 1651. This Court refrains from relying on that section, as, indeed, it should, since the general provisions of § 1651 should not be read as expanding the jurisdictional limitations created by Congress with regard to a specific writ.2 See Price v. Johnston, 334 U.S. 266, 279, 68 S.Ct. 1049, 1057, 92 L.Ed. 1356; Adams v. United States ex rel. McCann, 317 U.S. 269, 272—273, 63 S.Ct. 236, 238—239, 87 L.Ed. 268.
27
I do not say that the federal courts should not have the power to issue extraterritorial writs ad prosequendum. There are persuasive reasons for conferring such authority upon the courts, and Congress is perfectly free to do so. However, if the jurisdiction of the federal courts is to be expanded, and if the traditional territorial limitation is to be abandoned, then Congress should specifically so indicate.3 But Congress has not done so, and until it does, we should not tamper with the present statutory scheme, except by following the customary procedure of adopting a special rule and submitting it to Congress for approval. Cf. Rules 4(c)(2), 17(e)(1), Fed.Rules Crim.Proc.
28
Finally, I must add a few words concerning the Court's dictum that, regardless of the interpretation placed upon § 2241, the California District Court had jurisdiction to issue the writ because the petitioner had previously appeared in that court, had entered a plea of not guilty, and had been permitted to return to New York to obtain counsel on condition that he would come back to California for trial. It is said that by virtue of this appearance, the District Court had 'fastened * * * a leash' on the petitioner, and that this 'leash' supported the issuance of the writ ad prosequendum. However, the Court ignores the fact that petitioner's initial appearance in California was also obtained by means of a writ of habeas corpus ad prosequendum addressed to the authorities of the New York City Prison. It ill behooves the Court to attempt to justify the issuance of an unauthorized writ of habeas corpus by relying upon jurisdiction that was acquired by an equally unauthorized writ.4 This theory introduces an unwise and judicially engrafted bootstrap exception to § 2241. In my opinion, the 'leash' relied upon by the Court is in reality no more than a rope of sand.
1
The Government has raised the question of petitioner's standing to challenge the writ (cf. Ponzi v. Fessenden, 258 U.S. 254, 42 S.Ct. 309, 66 L.Ed. 607), which point it waived by stipulation in the Court of Appeals. In light of the circumstances under which the case reaches us we do not believe that the point is well taken.
2
18 U.S.C. §§ 875, 1951, 18 U.S.C.A. §§ 875, 1951.
3
The order was as follows:
'Defendant appears without counsel and requests permission to enter his plea and be permitted to return to New York and obtain counsel there and return here for trial.
'Defendant Carbo pleads not guilty * * *.
'Court Orders cause as to Defendant Carbo set for trial with codefendants on March 29, 1960, 9:30 AM, and directs that Defendant Carbo be returned to New York for the purpose of obtaining counsel and be returned here in time for trial.'
4
28 U.S.C. § 2241, 28 U.S.C.A. § 2241, provides:
'(a) Writs of habeas corpus may be granted by the Supreme Court, any justice thereof, the district courts and any circuit judge within their respective jurisdictions. The order of a circuit judge shall be entered in the records of the district court of the district wherein the restraint complained of is had.
'(c) The writ of habeas corpus shall not extend to a prisoner unless—
'(1) He is in custody under or by color of the authority of the United States or is committed for trial before some court thereof; or
'(2) He is in custody for an act done or omitted in pursuance of an Act of Congress, or an order, process, judgment or decree of a court or judge of the United States; or
'(3) He is in custody in violation of the Constitution or laws or treaties of the United States; or
'(4) He, being a citizen of a foreign state and domiciled therein is in custody for an act done or omitted under any alleged right * * *; or
'(5) It is necessary to bring him into court to testify or for trial.'
5
Art. I, § 9, cl. 2.
6
The habeas corpus provisions of § 14 of the original Judiciary Act, 1 Stat. 81 (1789), were amended by 4 Stat. 634 (1833), 5 Stat. 539 (1842), 14 Stat. 385 (1867), R.S. §§ 752—753 (1875), and 43 Stat. 940 (1925).
7
R.S. § 716 (1875): 'The Supreme Court and the circuit and district courts shall have power to issue writs of scire facias. They shall also have power to issue all writs not specifically provided for by statute, which may be necessary for the exercise of their respective jurisdictions, and agreeable to the usages and principles of law.'
8
R.S. § 751 (1875): 'The Supreme Court and the circuit and district courts shall have power to issue writs of habeas corpus.'
9
R.S. § 752 (1875): 'The several justices and judges of the said courts, within their respective jurisdictions, shall have power to grant writs of habeas corpus for the purpose of an inquiry into the cause of restraint of liberty.'
10
Actually, the 1842 extension of the Great Writ's availability to imprisoned applicants, 5 Stat. 539, had imposed a jurisdictional limitation upon its issuance—power to grant applications by foreign citizens was given only to Justices of the Supreme Court, and to judges of the District Court in the district of confinement.
11
This decision, unreported, would appear consonant with a legitimate inference drawn from the jurisdictional limitation expressed in 1842, cf. note 10, supra, that Justices of the Supreme Court should limit their considerations to applications from within their assigned circuits, just as district judges were limited to their district.
12
Cong. Globe, Part 1, p. 730; Part 2, pp. 790, 899, 39th Cong., 2d Sess.
13
We do not decide whether the writ habeas corpus ad testificandum was intended by Congress to be subject to the 1867 jurisdictional limitation. Cf. Edgerly v. Kennelly, 7 Cir., 215 F.2d 420.
14
See note 10, supra.
15
36 Stat. 1167.
16
R.S. §§ 751—753 (1875) were at that time included as §§ 451—453 of 28 U.S.C. (1946 ed.).
17
See note 4, supra.
18
H.R.Rep. No. 2646, 79th Cong., 2d Sess., p. A169; H.R.Rep. No. 308, 80th Cong., 1st Sess., pp. A177—A178.
19
We are not unmindful of the terse Third Circuit dictum to the contrary in Yodock v. United States, 196 F.2d 1018, and the divergent view of at least two District Courts. However, Phillips v. Hiatt, D.C., 83 F.Supp. 935, considered § 2241 as derived solely from R.S. § 752 (1875); and In Matter of Van Collins D.C., 160 F.Supp. 165, relied, without distinction, upon Ahrens v. Clark, 335 U.S. 188, 68 S.Ct. 1443, 92 L.Ed. 1898 which dealt only with the Great Writ.
20
In view of the cooperation extended by the New York authorities in honoring the writ, it is unnecessary to decide what would be the effect of a similar writ absent such cooperation.
21
That case, as well as Price v. Johnston, 334 U.S. 266, 68 S.Ct. 1049, 92 L.Ed. 1356, dealt with process in the nature of habeas corpus, the authority for which was not derived from the habeas corpus statutes.
22
See note 19, supra.
1
Chief Justice Taft, speaking for the Court in Ponzi v. Fessenden, 258 U.S. 254, 42 S.Ct. 309, 66 L.Ed. 607, construed § 753 of the Revised Statutes, one of the enactments relied upon by the Court, as imposing a territorial limitation upon the District Court's power to issue a writ of habeas corpus ad prosequendum. He said:
'Under statutes permitting it, he (the prisoner) might have been taken under the writ of habeas corpus to give evidence in a federal court, or to be tried there if in the same district, § 753 Rev.Stats. * * *.' Id., 258 U.S. at page 261, 42 S.Ct. at page 311. (Emphasis added.)
2
The lower court's reliance upon United States v. Hayman, 342 U.S. 205, 72 S.Ct. 263, 96 L.Ed. 232, is misplaced. There the Court upheld the issuance of an extraterritorial writ in the nature of habeas corpus, saying that the authority to issue the writ under § 1651 was necessarily inferred from the provisions of 28 U.S.C. § 2255, 28 U.S.C.A. § 2255. This case does not involve § 2255; nor does it involve any other statute which could be read as conferring extraterritorial authority upon the federal courts.
3
In those few instances when Congress intended to extend the territorial jurisdiction of the federal courts, it has specifically and unambiguously indicated that intent. See Rules 4(c)(2) and 17(e)(1), Fed.Rules Crim.Proc., which read:
'Rule 4. Warrant or Summons Upon Complaint.
'(c) Execution or Service; and Return.
'(2) Territorial Limits. The warrant may be executed or the summons may be served at any place within the jurisdiction of the United States.'
'Rule 17. Subpoena.
'(e) Place of Service.
'(1) In United States. A subpoena requiring the attendance of a witness at a hearing or trial may be served at any place within the United States.'
4
The Court's reliance upon Ex parte Endo, 323 U.S. 283, 65 S.Ct. 208, 89 L.Ed. 243, is misplaced, because the District Court's initial jurisdiction in that case was unquestionably proper in all respects.
| 01
|
364 U.S. 603
81 S.Ct. 347
5 L.Ed.2d 323
Wm. G. LEWIS, Trustee, Petitioner,v.MANUFACTURERS NATIONAL BANK OF DETROIT.
No. 94.
Argued Dec. 15, 1960.
Decided Jan. 9, 1961.
Mr. Stuart E. Hertzberg, Detroit, Mich., for petitioner.
Mr. Richard D. Rohr, Detroit, Mich., for respondent.
Mr. Justice DOUGLAS delivered the opinion of the Court.
1
The bankrupt borrowed money from respondent on November 4, 1957, giving as security a chattel mortgage on an automobile. In Michigan, where the transaction took place, mortgages were void as against creditors of the mortgagor unless filed with the Register of Deeds1 with a special dispensation to purchasemoney mortgages if filed within 14 days of the execution of the mortgage. This mortgage, however, was not a purchasemoney mortgage; and though executed on November 4, 1957, it was not recorded until November 8, 1957.
2
Over five months later—on April 18, 1958—the borrower filed a voluntary petition in bankruptcy and an adjudication of bankruptcy followed, petitioner being named trustee.
3
There was no evidence that any creditor had extended credit between November 4, the date of the execution of the mortgage, and November 8, the date of its recordation. But since the mortgage had not been recorded immediately, the referee held that it was void as against the trustee. The referee relied upon § 70, sub. c of the Bankruptcy Act, 11 U.S.C. § 110, sub. c, 11 U.S.C.A. § 110, sub. c, which, so far as material here, reads:
4
'The trustee, as to all property, whether or not coming into possession or control of the court, upon which a creditor of the bankrupt could have obtained a lien by legal or equitable proceedings at the date of bankruptcy, shall be deemed vested as of such date with all the rights, remedies, and powers of a creditor then holding a lien thereon by such proceedings, whether or not such a creditor actually exists.'
5
He ruled that § 70, sub. c 'clothes the Trustee with the rights of a creditor who could have obtained a lien at the date of bankruptcy whether or not such a creditor exists.' He concluded that under Michigan law a creditor could have taken prior to the mortgage had he extended credit during the four-day period when the mortgage was 'off record' and that therefore the trustee can claim the same rights, even though there was no such creditor. The District Court overruled the referee and the Court of Appeals affirmed the District Court. 275 F.2d 454. The case is here on a petition for a writ of certiorari which we granted because of a conflict between that decision and Constance v. Harvey, 215 F.2d 571, decided by the Court of Appeals for the Second Circuit and subsequently followed by the same court in Conti v. Volper, 229 F.2d 317. 363 U.S. 837, 80 S.Ct. 1613, 4 L.Ed.2d 1724.
6
Petitioner's case turns on the words, 'upon which a creditor of the bankrupt could have obtained a lien * * * whether or not such a creditor actually exists,' contained in § 70, sub. c.
7
Prior to 1910 the trustee had no better title to the property than the bankrupt had. See York Mfg. Co. v. Cassell, 201 U.S. 344, 352, 26 S.Ct. 481, 484, 50 L.Ed. 782; Zartman v. First National Bank, 216 U.S. 134, 138, 30 S.Ct. 368, 369, 54 L.Ed. 418. The provision with which we are here concerned was written into the law in 1910 to give the trustee all the rights of an ideal judicial lien creditor.2
8
The predecessor of the present § 70, sub. c was § 47(a)(2) of the Bankruptcy Act, as amended by the 1910 Act which provided in relevant part:
9
'* * * such trustees, as to all property in the custody or coming into the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings thereon; and also, as to all property not in the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a judgment creditor holding an execution duly returned unsatisfied.' 36 Stat. 840.
10
That language was held to give the trustee the status of a creditor 'as of the time when the petition in bankruptcy is filed.' Bailey v. Baker Ice Machine Co., 239 U.S. 268, 276, 36 S.Ct. 50, 54, 60 L.Ed. 275.
11
In 1938 the relevant provisions of § 47(a)(2) were transferred to § 70, sub. c with no material change.3
12
In 1950 § 70, sub. c was recast to read as follows:
13
'* * * The trustee, as to all property of the bankrupt at the date of bankruptcy whether or not coming into possession or control of the court, shall be deemed vested as of the date of bankruptcy with all the rights, remedies, and powers of a creditor then holding a lien thereon by legal or equitable proceedings, whether or not such a creditor actually exists.' 64 Stat. 26.
14
Thus the distinction between property in the possession of the bankrupt as of the date of bankruptcy and other property was abolished; and the trustee was given the status of a creditor holding a lien through legal or equitable proceedings as to both types of property. This 1950 Amendment, however, created an anomaly. The House Report4 accompanying a 1952 amendment that cast § 70, sub. c in its present form states:
15
'* * * it is now recognized that the amendment did not accurately express what was intended. Since the trsutee already has title to all of the bankrupt's property, it is not proper to say that he has the rights of a lien creditor upon his own property. What should be said is that he has the rights of a lien creditor upon property in which the bankrupt has an interest or as to which the bankrupt may be the ostensible owner. Accordingly, the language of section 70c has been revised so as to clarify its meaning and state more accurately what is intended.'
16
We think that one consistent theory underlies the several versions of § 70, sub. c which we have set forth, viz., that the rights of creditors—whether they are existing or hypothetical—to which the trustee succeeds are to be ascertained as of 'the date of bankruptcy,'5 not at an anterior point of time. That is to say, the trustee acquires the status of a creditor as of the time when the petition in bankruptcy is filed. We read the statutory words 'the rights * * * of a creditor (existing or hypothetical) then holding a lien' to refer to that date.6
17
This construction seems to us to fit the scheme of the Act.7 Section 70, sub. e enables the trustee to set aside fraudulent transfers which creditors having provable claims could void. The construction of § 70, sub. c which petitioner urges would give the trustee power to set aside transactions which no creditor could void and which injured no creditor. That construction would enrich unsecured creditors at the expense of secured creditors, creating a windfall merely by reason of the happenstance of bankruptcy.
18
It is true that in some instances the trustee has rights which existing creditors may not have. Section 11, 11 U.S.C. § 29, 11 U.S.C.A. § 29, gives him two years to institute legal proceedings regardless of what limitations creditors might have been under. Section 60, 11 U.S.C. § 96, 11 U.S.C.A. § 96, gives him the right to recover preferential transfers made by the bankrupt within four months whether or not creditors had that right by local law. A like power exists under § 67, sub. a, 11 U.S.C. § 107, sub. a, 11 U.S.C.A. § 107, sub. a, as respects the invalidation of judicial liens obtained within four months of bankruptcy when the bankrupt was insolvent. Section 67, sub. d, 11 U.S.C. § 107, sub. d, 11 U.S.C.A. § 107, sub. d, carefully defines transactions which may be voided if made 'within one year prior to the filing' of the petition.
19
Congress in striking a balance between secured and unsecured creditors has provided for specific periods of repose beyond which transactions of the bankrupt prior to bankruptcy may no longer be upset—except and unless existing creditors can set them aside.8 Yet if we construe § 70, sub. c as petitioner does, there would be no period of repose. Security transactions entered into in good faith years before the bankruptcy could be upset if the trustee were ingenious enough to conjure up a hypothetical situation in which a hypothetical creditor might have had such a right. The rule pressed upon us would deprive a mortgagee of his rights in States like Michigan, if the mortgage had been executed months or even years previously and there had been a delay of a day or two in recording without any creditor having been injured during the period when the mortgage was unrecorded.
20
That is too great a wrench for us to give the bankruptcy system, absent a plain indication from Congress which is lacking here.
21
Affirmed.
22
Mr. Justice HARLAN.
23
As the judge who wrote for the Court of Appeals in Constance v. Harvey, 215 F.2d 571, I think it appropriate to say that I have long since come to the view that the second opinion in Constance, 215 F.2d 575, was ill-considered. I welcome this opportunity to join in setting the matter right.
1
Mich.Comp.Laws, 1948, § 566.140, as amended by Pub.Acts 1957, No. 233. In 1959, by Pub.Acts 1959, No. 110, a 10-day grace period was given to all mortgagees vis-a -vis creditors.
2
See MacLachlan, Bankruptcy (1956), p. 187. The Committee Report concerning the 1910 Amendment said:
'It is evident that in the proposed amendment attempt is made to give effect to two ideas quite distinct: First, that as to the property in the custody of the bankruptcy court the bankruptcy trustee shall be considered to have the same title that a creditor holding an execution or other lien by legal or equitable proceedings levied upon that property would have under state law: and, second, that as to property not in the custody of the bankruptcy court the trustee should stand in the position of a judgment creditor holding an execution returned unsatisfied, thus entitling him to proceed precisely as an individual creditor might have done to subject assets. In this way, in effect, proceedings in bankruptcy will give to creditors all the rights that creditors under the state law might have had had there been no bankruptcy and from which they are debarred by the bankruptcy—certainly a very desirable and eminently fair position to be granted to the trustee.' H.R.Rep. No. 511, 61st Cong., 2d Sess., p. 7.
3
See MacLachlan, Bankruptcy (1956), p. 187; H.R.Rep. No. 1409, 75th Cong., 1st Sess., pp. 4, 34—35.
4
H.R.Rep. No. 2320, 82d Cong., 2d Sess., p. 16, 2 U.S.Code Congressional and Administrative News 1952, p. 1976.
5
While § 70, sub. c speaks of 'the date of bankruptcy,' that term is defined as 'the date when the petition was filed.' Section 1(13), 11 U.S.C. § 1(13), 11 U.S.C.A. § 1(13).
6
After the decision in Constance v. Harvey, 215 F.2d 571, 575, Congress passed a bill to change its holding. The President vetoed the bill, stating:
'I have withheld my approval of H.R. 7242, to amend sections 1, 57j, 64a(5), 67b, 67c, and 70c of the Bankruptcy Act, and for other further purposes.
'I recognize the need for legislation to solve certain problems regarding the priority of liens in bankruptcy, but this bill is not a satisfactory solution. It would unduly and unnecessarily prejudice
the sound administration of Federal tax laws. In some cases, for example, mortgages would be given an unwarranted priority over Federal tax liens even though the mortgage is recorded after the filing of the tax lien.
'This and other defects of the bill can, I believe, be corrected without compromising its primary and commendable purpose.' Cong.Rec., September 16, 1960, p. A7013.
The Committee Report, urging that amendment, made clear the inequity that might often result if § 70, sub. c is construed as Constance v. Harvey, supra, construed it:
'The holding in Constance v. Harvey, by injecting into section 70c the substance of 70e, created the statutorily unwarranted status of a hypothetical creditor with rights relating back to a date prior to bankruptcy. While bankruptcy is in effect a general levy on the property of the bankrupt for the benefit of his creditors, it is not a license for the trustee, irrespective of prejudice to creditors, to avoid at will any security given by the bankrupt which remained imperfected for any period of time prior to bankruptcy. Yet this is the effect of Constance v. Harvey. Under this decision the only limit to the power of the trustee is his ability to conceive of some right of a creditor that can be used as a basis for striking down imperfect transfers. The doctrine of Constance v. Harvey presents a very real threat to security transactions, the validity of which have hitherto not been subject to challenge under the act. Moreover, this is a threat which is not required by the policy of the act, since the creditors who have been prejudiced by the imperfections of a transfer are normally protected under section 70e.' H.R.Rep. No. 745, 86th Cong., 1st Sess., pp. 8—9.
7
See Seligson, Creditors' Rights, Jour. Nat. Assoc. Referees in Bankruptcy, Oct. 1957, 113, 118; Marsh, Constance v. Harvey—The 'Strong-Arm Clause' Re-Evaluated, 43 Cal.L.Rev. 65; Note, 57 Mich.L.Rev. 1227.
8
See, e.g., § 70, sub. e, concerning which H.R.Rep. No. 1409, 75th Cong., 1st Sess., p. 32, stated, '* * * under section 70e the trustee may avoid any transfer which any creditor might have avoided under applicable State law, and there is no time limitation in such case.'
| 78
|
364 U.S. 573
81 S.Ct. 330
5 L.Ed.2d 302
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.
RADIO AND TELEVISION BROADCAST ENGINEERS UNION, LOCAL 1212, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, AFL—CIO.
No. 69.
Argued Nov. 10 and 14, 1960.
Decided Jan. 9, 1961.
Mr. Dominick L. Manoli, Washington, D.C., for petitioner.
Mr. Robert Silagi, New York City, and Mr. Louis Sherman, Washington, D.C., for respondent.
Mr. Justice BLACK delivered the opinion of the Court.
1
This case, in which the Court of Appeals refused to enforce a cease-and-desist order of the National Labor Relations Board, grew out of a 'jurisdictional dispute' over work assignments between the respondent union, composed of television 'technicians,'1 and another union, composed to 'stage employees.'2 Both of these unions had collective bargaining agreements in force with the Columbia Broadcasting System and the respondent union was the certified bargaining agent for its members, but neither the certification nor the agreements clearly apportioned between the employees represented by the two unions the work of providing electric lighting for television shows. This led to constant disputes, extending over a number of years, as to the proper assignment of this work, disputes that were particularly acrimonious with reference to 'remote lighting,' that is, lighting for telecasts away from the home studio. Each union repeatedly urged Columbia to amend its bargaining agreement so as specifically to allocate remote lighting to its members rather than to members of the other union. But, as the Board found, Columbia refused to make such an agreement with either union because 'the rival locals had failed to agree on the resolution of this jurisdictional dispute over remote lighting.'3 Thus feeling itself caught 'between the devil and the deep blue,'4 Columbia chose to divide the disputed work between the two unions according to criteria improvised apparently for the sole purpose of maintaining peace between the two. But, in trying to satisfy both of the unions, Columbia has apparently not succeeded in satisfying either. During recent years, it has been forced to contend with work stoppages by each of the two unions when a particular assignment was made in favor of the other.5
2
The precise occasion for the present controversy was the decision of Columbia to assign the lighting work for a major telecast from the Waldorf-Astoria Hotel in New York City to the stage employees. When the technicians' protest of this assignment proved unavailing, they refused to operate the cameras for the program and thus forced its cancellation.6 This caused Columbia to file the unfair labor practice charge which started these proceedings, claiming a violation of § 8(b)(4)(D) of the National Labor Relations Act.7 That section clearly makes it an unfair labor practice for a labor union to induce a strike or a concerted refusal to work in order to compel an employer to assign particular work to employees represented by it rather than to employees represented by another union, unless the employer's assignment is in violation of 'an order or certification of the Board determining the bargaining representative for employees performing such work * * *.'8 Obviously, if § 8(b)(4)(D) stood alone, what this union did in the absence of a Board order or certification entitling its members to be assigned to these particular jobs would be enough to support a finding of an unfair labor practice in a normal proceeding under § 10(c) of the Act.9 But when Congress created this new type of unfair labor practice by enacting § 8(b)(4)(D) as part of the Taft-hartley Act in 1947, it also added § 10(k) to the Act.10 Section 10(k), set out below,11 quite plainly emphasizes the belief of Congress that it is more important to industrial peace that jurisdictional disputes be settled permanently than it is that unfair labor practice sanctions for jurisdictional strikes be imposed upon unions. Accordingly, § 10(k) offers strong inducements to quarrelling unions to settle their differences by directing dismissal of unfair labor practice charges upon voluntary adjustment of jurisdictional disputes. And even where no voluntary adjustment is made, 'the Board is empowered and directed,' by § 10(k), 'to hear and determine the dispute out of which such unfair labor practice shall have arisen,' and upon compliance by the disputants with the Board's decision the unfair labor practice charges must be dismissed.
3
In this case respondent failed to reach a voluntary agreement with the stage employees union so the Board held the § 10(k) hearing as required to 'determine the dispute.' The result of this hearing was a decision that the respondent union was not entitled to have the work assigned to its members because it had no right to it under either an outstanding Board order or certification, as provided in § 8(b)(4)(D), or a collective bargaining agreement.12 The Board refused to consider other criteria, such as the employer's prior practices and the custom of the industry, and also refused to make an affirmative award of the work between the employees represented by the two competing unions. The respondent union refused to comply with this decision, contending that the Board's conception of its duty to 'determine the dispute' was too narrow in that this duty is not at all limited, as the Board would have it, to strictly legal considerations growing out of prior Board orders, certifications or collective bargaining agreements. It urged, instead, that the Board's duty was to make a final determination, binding on both unions, as to which of the two unions' members were entitled to do the remote lighting work, basing its determination on factors deemed important in arbitration proceedings, such as the nature of the work, the practices and customs of this and other companies and of these and other unions, and upon other factors deemed relevant by the Board in the light of its experience in the field of labor relations. On the basis of its decision in the § 10(k) proceeding and the union's challenge to the validity of that decision, the Board issued an order under § 10(c) directing the union to cease and desist from striking to compel Columbia to assign remote lighting work to its members. The Court of Appeals for the Second Circuit refused to enforce the cease-and-desist order, accepting the respondent's contention that the Board had failed to make the kind of determination that § 10(k) requires.13 The Third14 and Seventh15 Circuits have construed § 10(k) the same way, while the Fifth Circuit16 has agreed with the Board's narrower conception of its duties. Because of this conflict and the importance of this problem, we granted certiorari.17
4
We agree with the Second, Third and Seventh Circuit that § 10(k) requires the Board to decide jurisdictional disputes on their merits and conclude that in this case that requirement means that the Board should affirmatively have decided whether the technicians or the stage employees were entitled to the disputed work. The language of § 10(k), supplementing § 8(b)(4)(D) as it does, sets up a method adopted by Congress to try to get jurisdictional disputes settled. The words 'hear and determine the dispute' convey not only the idea of hearing but also the idea of deciding a controversy. And the clause 'the dispute out of which such unfair labor practice shall have arisen' can have no other meaning except a jurisdictional dispute under § 8(b)(4)(D) which is a dispute between two or more groups of employees over which is entitled to do certain work for an employer. To determine or settle the dispute as between them would normally require a decision that one or the other is entitled to do the work in dispute. Any decision short of that would obviously not be conducive to quieting a quarrel between two groups which, here as in most instances, is of so little interest to the employer that he seems perfectly willing to assign work to either if the other will just let him alone. This language also indicates a congressional purpose to have the Board do something more than merely look at prior Board orders and certifications or a collective bargaining contract to determine whether one or the other union has a clearly defined statutory or contractual right to have the employees it represents perform certain work tasks. For, in the vast majority of cases, such a narrow determination would leave the broader problem of work assignments in the hands of the employer, exactly where it was before the enactment of § 10(k)—with the same old basic jurisdictional dispute likely continuing to vex him, and the rival unions, short of striking, would still be free to adopt other forms of pressure upon the employer. The s 10(k) hearing would therefore accomplish little but a restoration of the pre-existing situation, a situation already found intolerable by Congress and by all parties concerned. If this newly granted Board power to hear and determine jurisdictional disputes and meant no more than that, Congress certainly would have achieved very little to solve the knotty problem of wasteful work stoppages due to such disputes.
5
This conclusion reached on the basis of the language of § 10(k) and § 8(b)(4) (D) is reinforced by reference to the history of those provisions. Prior to the enactment of the Taft-Hartley Act, labor, business and the public in general had for a long time joined in hopeful efforts to escape the disruptive consequences of jurisdictional disputes and resulting work stoppages. To this end unions had established union tribunals, employers had established employer tribunals, and both had set up joint tribunals to arbitrate such disputes.18 Each of these efforts had helped some but none had achieved complete success. The result was a continuing and widely expressed dissatisfaction with jurisdictional strikes. As one of the forerunners to these very provisions of the Act, President Truman told the Congress in 1947 that disputes 'involving the question of which labor union is entitled to perform a particular task' should be settled, and that if the 'rival unions are unable to settle such disputes themselves, provision must be made for peaceful and binding determination of the issues.'19 And the House Committee report on one of the proposals out of which these sections came recognized the necessity of enacting legislation to protect employers from being 'the helpless victims of quarrels that do not concern them at all.'20
6
The Taft-Hartley Act as originally offered contained only a section making jurisdictional strikes an unfair labor practice. Section 10(k) came into the measure as the result of an amendment offered by Senator Morse which, in its original form, proposed to supplement this blanket proscription by empowering and directing the Board either 'to hear and determine the dispute out of which such unfair labor practice shall have arisen or to appoint an arbitrator to hear and determine such dispute * * *.'21 That the purpose of this amendment was to set up machinery by which the underlying jurisdictional dispute would be wettled is clear and, indeed, even the Board concedes this much. The authority to appoint an arbitrator passed the Senate22 but was eliminated in conference,23 leaving it to the Board alone 'to hear and determine' the underlying jurisdictional dispute. The Board's position is that this change can be interpreted as an indication that Congress decided against providing for the compulsory determination of jurisdictional disputes. We find this argument unpersuasive, to say the very least. The obvious effect of this change was simply to place the responsibility for compulsory determination of the dispute entirely on the Board, not to eliminate the requirement that there be such a compulsory determination. The Board's view of its powers thus has no more support in the history of § 10(k) than it has in the language of that section. Both show that the section was designed to provide precisely what the Board has disclaimed the power to provide—an effective compulsory method of getting rid of what were deemed to be the bad consequences of jurisdictional disputes.
7
The Board contends, however, that this interpretation of § 10(k) should be rejected, despite the language and history of that section. In support of this contention, it first points out that § 10(k) sets forth no standards to guide it in determining jurisdictional disputes on their merits. From this fact, the Board argues that § 8(b)(4)(D) makes the employer's assignment decisive unless he is at the time acting in violation of a Board order or certification and that the proper interpretation of § 10(k) must take account of this right of the employer. It is true, of course, that employers normally select and assign their own individual employees according to their best judgment. But here, as in most situations where jurisdictional strikes occur, the employer has contracted with two unions, both of which represent employees capable of doing the particular tasks involved. The result is that the employer has been placed in a situation where he finds it impossible to secure the benefits of stability from either of these contracts, not because he refuses to satisfy the unions, but because the situation is such that he cannot satisfy them. Thus, it is the employer here, probably more than anyone else, who has been and will be damaged by a failure of the Board to make the binding decision that the employer has not been able to make. We therefore are not impressed by the Board's solicitude for the employer's right to do that which he has not been, and most likely will not be, able to do. It is true that this forces the Board to exercise under § 10(k) powers which are broad and lacking in rigid standards to govern their application. But administrative agencies are frequently given rather loosely defined powers to cope with problems as difficult as those posed by jurisdictional disputes and strikes. It might have been better, as some persuasively argued in Congress, to intrust this matter to arbitrators. But Congress, after discussion and consideration, decided to intrust this decision to the Board. It has had long experience in hearing and disposing of similar labor problems. With this experience and a knowledge of the standards generally used by arbitrators, unions, employers, joint boards and others in wrestling with this problem, we are confident that the Board need not disclaim the power given it for lack of standards. Experience and common sense will supply the grounds for the performance of this job which Congress has assigned the Board.
8
The Board also contends that respondent's interpretation of § 10(k) should be avoided because that interpretation completely vitiates the purpose of Congress to encourage the private settlement of jurisdictional disputes. This contention proceeds on the assumption that the parties to a dispute will have no incentive to reach a private settlement if they are permitted to adhere to their respective views until the matter is brought before the Board and then given the same opportunity to prevail which they would have had in a private settlement. Respondent disagrees with this contention and attacks the Board's assumption. We find it unnecessary to resolve this controversy for it turns upon the sort of policy determination that must be regarded as implicitly settled by Congress when it chose to enact § 10(k). Even if Congress has chosen the wrong way to accomplish its aim, that choice is binding both upon the Board and upon this Court.
9
The Board's next contention is that respondent's interpretation of § 10(k) should be rejected because it is inconsistent with other provisions of the Taft-Hartley Act. The first such inconsistency urged is with §§ 8(a)(3) and 8(b)(2)24 of the Act on the ground that the determination of jurisdictional disputes on their merits by the Board might somehow enable unions to compel employers to discriminate in regard to employment in order to encourage union membership. The argument here, which is based upon the fact that § 10(k), like § 8(b)(4)(D), extends to jurisdictional disputes between unions and unorganized groups as well as to disputes between two or more unions, appears to be that groups represented by unions would almost always prevail over nonunion groups in such a determination because their claim to the work would probably have more basis in custom and tradition than that of unorganized groups. No such danger is present here, however, for both groups of employees are represented by unions. Moreover, we feel entirely confident that the Board, with its many years of experience in guarding against and redressing violations of §§ 8(a)(3) and 8(b)(2), will devise means of discharging its duties under § 10(k) in a manner entirely harmonious with those sections. A second inconsistency is urged with § 303(a)(4) of the Taft-Hartley Act,25 which authorizes suits for damages suffered because of jurisdictional strikes. The argument here is that since § 303(a)(4) does not permit a union to establish, as a defense to an action for damages under that section, that it is entitled to the work struck for on the basis of such factors as practice or custom, a similar result is required here in order to preserve 'the substantive symmetry' between § 303(a) (4) on the one hand and §§ 8(b)(4)(D) and 10(k) on the other. This argument ignores the fact that this Court has recognized the separate and distinct nature of these two approaches to the problem of handling jurisdictional strikes.26 Since we do not require a 'substantive symmetry' between the two, we need not and do not decide what effect a decision of the Board under § 10(k) might have on actions under § 303(a)(4).
10
The Board's final contention is that since its construction of § 10(k) was adopted shortly after the section was added to the Act and has been consistently adhered to since, that construction has itself become a part of the statute by reason of congressional acquiescence. In support of this contention, the Board points out that Congress has long been aware of its construction and yet has not seen fit to adopt proposed amendments which would have changed it. In the ordinary case, this argument might have some weight. But an administrative construction adhered to in the face of consistent rejection by Courts of Appeals is not such an ordinary case. Moreover, the Board had a regulation on this subject from 1947 to 1958 which the Court of Appeals for the Seventh Circuit thought, with some reason, was wholly inconsistent with the Board's present interpretation.27 With all this uncertainty surrounding the eventual authoritative interpretation of the existing law, the failure of Congress to enact a new law simply will not support the inference which the Board asks us to make.
11
We conclude therefore that the Board's interpretation of its duty under § 10(k) is wrong and that under that section it is the Board's responsibility and duty to decide which of two or more employee groups claiming the right to perform certain work tasks is right and then specifically to award such tasks in accordance with its decision. Having failed to meet that responsibility in this case, the Board could not properly proceed under § 10(c) to adjudicate the unfair labor practice charge. The Court of Appeals was therefore correct in refusing to enforce the order which resulted from that proceeding.
12
Affirmed.
1
Radio & Television Broadcast Engineers Union, Local 1212, International Brotherhood of Electrical Workers, AFL-CIO.
2
Theatrical Protective Union No. 1, International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, AFL—CIO.
3
The other major television broadcasting companies have also been forced to contend with this same problem. The record shows that there has been joint bargaining on this point between Columbia, National and American Broadcasting Systems on the one hand and the unions on the other. All the companies refused to allocate the work to either union because the unions did not agree among themselves. Columbia's vice president in charge of labor relations explained the situation in these terms: 'All three companies negotiating jointly here took the position that they could not do this. They could not give exclusive jurisdiction because each of them had a conflicting claim from another union.' See also National Association of Broadcast Engineers, 105 N.L.R.B. 355.
4
This phrase was used by the Hearing Examiner to describe the position of Columbia as explained by its vice president in charge of labor relations.
5
See Theatrical Protective Union No. 1, International Alliance of Theatrical Stage Employees, 124 N.L.R.B. 249, for a report of a recent jurisdictional strike against Columbia by the same stage employees' union involved here which resulted from an assignment of remote lighting work favorable to the technicians.
6
Respondent, for the purposes of this proceeding only, concedes the correctness of a Board finding to this effect.
7
29 U.S.C. § 158(b)(4)(D), 29 U.S.C.A. § 158(b)(4)(D).
8
Section 8(b). 'It shall be an unfair labor practice for a labor organization or its agents—
'(4) * * * to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal * * * to perform any services, where an object thereof is: * * * (D) forcing or requiring any employer to assign particular work to employees in a particular labor organization or in a particular trade, craft, or class rather than to employees in another labor organization or in another trade, craft, or class, unless such employer is failing to conform to an order or certification of the Board determining the bargaining representative for employees performing such work: * * *'.
9
29 U.S.C. § 160(c), 29 U.S.C.A. § 160(c).
10
29 U.S.C. § 160(k), 29 U.S.C.A. § 160(k).
11
'Whenever it is charged that any person has engaged in an unfair labor practice within the meaning of paragraph (4)(D) of section 8(b), the Board is empowered and directed to hear and determine the dispute out of which such unfair labor practice shall have arisen, unless * * * the parties to such dispute submit to the Board satisfactory evidence that they have adjusted, or agreed upon methods for the voluntary adjustment of, the dispute. Upon compliance by the parties to the dispute with the decision of the Board or upon such voluntary adjustment of the dispute, such charge shall be dismissed.'
12
This latter consideration was made necessary because the Board has adopted the position that jurisdictional strikes in support of contract rights do not constitute violations of § 8(b)(4)(D) despite the fact that the language of that section contains no provision for special treatment of such strikes. See Local 26, International Fur Workers, 90 N.L.R.B. 1379. The Board has explained this position as resting upon the principle that 'to fail to hold as controlling * * * the contractual preemption of the work in dispute would be to encourage disregard for observance of binding obligations under collective-bargaining agreements and invite the very jurisdictional disputes Section 8(b) (4)(D) is intended to prevent.' National Association of Broadcast Engineers, supra, n. 3, at page 364.
13
272 F.2d 713.
14
N.L.R.B. v. United Asssociation of Journeymen, 242 F.2d 722.
15
N.L.R.B. v. United Brotherhood of Carpenters, 261 F.2d 166.
16
363 U.S. 802, 80 S.Ct. 1238, 4 L.Ed.2d Union of Operating Engineers, 275 F.2d 413.
17
,363 U.S. 802, 80 S.Ct. 1238, 4 L.Ed.2d 1145.
18
For a review and criticism of some of these efforts, see Dunlop, Jurisdictional Disputes, N.Y.U.2d Ann.Conference on Labor 477, at pages 494—504.
19
93 Cong.Rec. 136.
20
H.R.Rep. No. 245, 80th Cong., 1st Sess., p. 23, I Legislative History of the Labor Management Relations Act, 1967, at 314 (hereinafter cited as Leg.Hist.).
21
The amendment was contained in a bill (S. 858) offered by Senator Morse, which also contained a number of other proposals. 93 Cong.Rec.1913, II Leg.Hist. 987.
22
I Leg.Hist. 241, 258—259. See also the Senate Committee Report on the bill, S.Rep. No. 105, 80th Cong., 1st Sess., p. 8, I Leg.Hist. 414.
23
H.R.Conf.Rep. No. 510, 80th Cong., 1st Sess., p. 57, I Leg.Hist. 561.
24
29 U.S.C. § 158(a)(3), (b)(2), 29 U.S.C.A. § 158(a)(3), (b)(2).
25
29 U.S.C. § 187(a)(4), 29 U.S.C.A. § 187(a)(4).
26
International Longshoremen's & Warehousemen's Union v. Juneau Spruce Corp., 342 U.S. 237, 72 S.Ct. 235, 96 L.Ed. 275.
27
See N.L.R.B. v. United Brotherhood of Carpenters, supra, 261 F.2d at pages 170—172. The Rules and Regulations adopted in 1947 by the Board provided that in § 10(k) proceedings the Board was 'to certify the labor organization or the particular trade, craft, or class of employees, as the case may be, which shall perform the particular work tasks in issue, or to make other disposition of the matter.' (Emphasis supplied.) 29 CFR, 1957 Supp., § 102.73. This rule remained in effect until 1958.
| 67
|
364 U.S. 520
81 S.Ct. 294
5 L.Ed.2d 268
UNITED STATES, Petitioner,v.MISSISSIPPI VALLEY GENERATING CO., etc.
No. 26.
Argued Oct. 19, 1960.
Decided Jan. 9, 1961.
Rehearing Denied March 20, 1961.
See 365 U.S. 855, 81 S.Ct. 798.
[Syllabus from pages 520-522 intentionally omitted]
Sol. Gen. Mr. J. Lee Rankin, Washington, D.C., for petitioner.521 Messrs. John T. Cahill and William C. Chanler, New York City, for respondent.
Mr. Justice WARREN delivered the opinion of the Court.
1
We granted certiorari to review the decision of the Court of Claims because the conflict-of-interest problem presented by this case has a far-reaching significance in the area of public employment and involves fundamental questions relating to the standards of conduct which should govern those who represent the Government in its business dealings.
2
The person with whose activities we are primarily concerned is one Adolphe H. Wenzell, Vice President and Director of First Boston Corporation,1 which is one of the major financial institutions in the country. At the suggestion of First Boston's Chairman, and subsequently at the request of the Bureau of the Budget, Wenzell undertook to advise the Government and act on its behalf in negotiations which culminated in a contract between the Government and the Mississippi Valley Generating Company (MVG), the respondent herein. The contract called for the construction and operation by the respondent of a $100,000,000 steam power plant in the Memphis, Tennessee, area. Ultimately, the plant was to supply 600,000 kw. of electrical energy for the use of the Atomic Energy Commission (AEC). Before the plant was constructed, but after the respondent had taken some steps toward performing the contract, the AEC, which was the governmental contracting agency, canceled the contract because the power to be generated by the proposed plant was no longer needed. The respondent then sued the Government in the Court of Claims for the sums it had expended in connection with the contract.
3
The Government defended on several grounds, but primarily on the ground that the contract was unenforceable due to an illegal conflict of interest on the part of Wenzell. Specifically, the Government contended that at the time of Wenzell's employment by the Government, it was apparent that First Boston was likely to benefit, and as subsequently developed, in fact, did benefit, from the contract here in question; that Wenzell, as an officer of First Boston, was therefore 'directly or indirectly' interested in the contract which he, as an agent of the Government, had helped to negotiate; that he consequently had violated the federal conflict-of-interest statute, 18 U.S.C. § 434, 18 U.S.C.A. § 434;2 and that his illegal conduct tainted the whole transaction and rendered the contract unenforceable.
4
A sharply divided Court of Claims rejected all of the Government's defenses and awarded damages to the respondent in the sum of $1,867,545.56.3 175 F.Supp. 505.
5
Because of the view which we take of the conflict-of-interest question, it will not be necessary for us to determine the validity of the other defenses raised by the Government in the court below, important though they may be.4 With regard to the conflict-of-interest defense, there appear to be but two legal principles involved: (1) Did the activities of Wenzell constitute a violation of 18 U.S.C. § 434, 18 U.S.C.A. § 434; and (2) if so, does that fact alone preclude the respondent from enforcing the contract? For reasons which we shall set forth in detail below, we think that the Court of Claims was in error and that both of these questions must be answered in the affirmative.
I.
6
Because the outcome of this case depends largely upon an evaluation of Wenzell's activities on behalf of the Government, a rather detailed statement of the facts is necessary in order to understand fully the nature of those activities and to place them in their proper context. The voluminous evidence in the case was heard by a trial commissioner. Based upon the commissioner's report and the briefs and arguments of counsel, the Court of Claims made very extensive findings of fact which cover approximately 200 pages in the transcript of record. Fortunately it will not be necessary for us to consider the original evidence, since both parties have agreed to rely upon the Court of Claims's findings, and since we also conclude that those findings are sufficient to dispose of the issues presented. However, it should be noted that our reliance upon the findings of fact does not preclude us from making an independent determination as to the legal conclusions and inferences which should be drawn from them. See United States v. E. I. Du Pont De Nemours & Co., 353 U.S. 586, 598, 77 S.Ct. 872, 879, 1 L.Ed.2d 1057; Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 153—154, 71 S.Ct. 127, 130—131, 95 L.Ed. 162.
7
First. At the outset, we think it is appropriate to discuss, in a general way, the origin of the contract here in question and the negotiations which led to the ultimate agreement. The story of this contract begins in the early days of 1953. Almost immediately after assuming office, President Eisenhower announced his intention to revise the Government's approach to the public power question. In his first State of the Union Message, delivered on February 2, 1953, the President indicated that it was his intention to encourage either private enterprise or local communities to provide power-generating sources in partnership with the Federal Government. Consonant with this policy, Joseph M. Dodge, Director of the Bureau of the Budget, decided in the fall of 1953 to eliminate from the Tennessee Valley Authority's (TVA) budget for the fiscal year 1955 a request for funds to be used for the construction of a steam-generating plant at Fulton, Tennessee. The proposed TVA plant was to have served the commercial, industrial, and domestic power needs of the City of Memphis and its environs. When Gordon Clapp, the General Manager of TVA, learned of Dodge's decision, he immediately informed persons working in the Bureau of the Budget that if provision for the Fulton plant were eliminated from TVA's budget, TVA would take the position that the amount of power then being supplied by TVA to the AEC should be reduced so that sufficient power would be available to meet the growing demands of TVA's other customers. As a result of this statement by Clapp, the Bureau of the Budget began drafting a statement for the President's budget message to the effect that steps would be taken to relieve TVA of some of its commitments to the AEC, and that if efforts in that direction proved unsuccessful, the possibility of the construction of a plant by TVA at Fulton would be reconsidered.
8
On December 2, 1953, Dodge met in his office with Lewis I. Strauss, Chairman of the AEC, and Walter J. Williams, General Manager of the AEC. Dodge said that he hoped to avoid further expenditures by TVA for the construction of power-generating plants, and that he thought the AEC should investigate the possibility of reducing its consumption of TVA-generated power by contracting with private industry for the construction of a plant that would supply 450,000 kw. of additional power for the AEC at its Paducah, Kentucky, installation by 1957. Dodge inquired whether the plan outlined by him would be feasible, and Williams replied that he could not answer the question until he had consulted with J. W. McAfee, the President of Electric Energy, Inc., a private utility company which had previously entered into long-term power contracts with the AEC similar to the one described by Dodge.
9
After the meeting, Williams arranged to meet with McAfee, and this meeting occurred on December 8, 1953. Williams asked McAfee whether he knew of a private power company that might be interested in building a plant to supply the AEC with as much as 450,000 kw. of generating capacity by the middle of 1957. McAfee stated that it might be difficult for his company to do the job, but he agreed to make some inquiries about the matter. Later, on December 14, 1953, McAfee wrote a letter to the AEC indicating that he thought a group of private investors could be formed to supply the AEC the amount of power requested. Because of the Budget Bureau's continuing interest in the progress of the plan, a copy of McAfee's letter was requested by and sent to William F. McCandless, Assistant Director for Budget Review in the Bureau.
10
Sometime prior to December 14, 1953, Edgar H. Dixon, President of Middle South Utilities, learned from McAfee that the AEC might be seeking an additional source of power in the Paducah area. On December 23, 1953, Dixon came to Strauss' office for a meeting with Williams, Strauss, and Kenneth D. Nichols, who had been selected to succeed Williams as General Manager of the AEC. The purpose of the meeting was to discuss the possibility of having private utility companies build additional generating capacity near Paducah for the purpose of relieving TVA of its commitments to the AEC there. Shortly after the meeting had concluded, Williams called McCardless at the Bureau of the Budget to inform him of what had transpired at the meeting. On the next day, December 24, 1953, Rowland Hughes, Assistant Director of the Bureau of the Budget, wrote to Strauss, stating that it would be helpful if the AEC would continue negotiations with private power interests with a view toward reaching a firm agreement for the supply of power to the AEC at Paducah.
11
On January 4, 1954, McAfee wrote a letter to Williams in which he expressed some doubts about the plan suggested by the Government. He thought that it might be wiser for TVA to reduce its commitments to the numerous municipalities which it supplied with power, or for TVA to arrange with neighboring power companies to buy power from them. Shortly after Williams received this letter, a meeting was held in Strauss' office, and those present were Strauss, Williams, Nichols, Hughes, and McCandless. Nichols, speaking for the AEC, expressed a certain reluctance to continue the negotiations. He pointed out that if the AEC purchased more power from private utilities in lieu of the power already being supplied by TVA, the cost to the AEC would be greater and the supply less certain because of possible delays in the construction of the plant and the location of reserve power. He also noted that McAfee was apparently no longer eager to enter into the contract; that from an engineering point of view, Paducah was a poor location for the site of the new plant; and that if more power was needed in the Memphis area, it would be better for the City of Memphis or for TVA to enter into a contract with private companies for the construction of a plant at that location. McCandless requested that the AEC pursue the matter at greater length with McAfee.
12
Pursuant to this request, a meeting was arranged for January 20, 1954, between McAfee and Dixon and representatives of the Budget Bureau and the AEC. At the meeting it was made clear to Dixon and McAfee that the purpose of the power plant was to relieve the presure on TVA in the Memphis area by reducing its commitments to the AEC. The discussion therefore turned to the possibility of constructing the plant at Memphis rather than at Paducah. Dixon suggested that since the power would be supplied directly to TVA, it might be better for TVA, rather than for the AEC, to act as the contracting agency. However, the government representatives preferred that the AEC contract and pay for the power, even though the actual delivery of power would be made to TVA. It was finally agreed that Dixon would prepare a study of the cost factors pertaining to the construction by his company of a power plant that could supply 450,000 to 600,000 kw. of power in the Memphis area.
13
When it became apparent that the new plant was to be located at Memphis, McAfee lost interest in the project because the location was far removed from the pool area of the companies in which he was interested. Dixon therefore proceeded on his own to draft an initial proposal. During the period in which Dixon was preparing his proposal, he kept in close contact with several government officials, especially Wenzell. The nature and scope of these associations will be discussed below.
14
On February 19, 1954, Dixon met with Eugene A. Yates, Chairman of the Board of the Southern Company, a public utility holding company. Dixon's purpose in calling this meeting was to persuade Yates that Southern should join Middle South in building the proposed power plant. The next day Yates notified Hughes at the Bureau of the Budget and Nichols at the AEC that Southern had decided to join in the venture.
15
On February 25, 1954, Dixon and Yates (hereinafter referred to as the sponsors) submitted their proposal to the AEC. They offered to form a new corporation (MVG) which would finance and construct generating facilities from which 600,000 kw. of electrical power would be delivered to TVA in the Memphis area for the account of the AEC. We do not think it is necessary to relate the details of the proposal. Suffice it to say that after a comprehensive joint analysis by TVA and the AEC, the Government decided that the cost estimates contained in the proposal were too high. In fact, the analysis showed that the proposal would cost over seven million dollars more per year than the proposed TVA plant at Fulton would have cost. At the sponsors' request, another analysis was made by Francis L. Adams, Chief of the Bureau of Power, Federal Power Commission. Adams confirmed the conclusions of the AEC and TVA, and said that the figures in the proposal were much higher than a reasonable estimate of costs to the sponsors should require.
16
By March 24, 1954, it became apparent to the sponsors that their initial proposal was unacceptable to the Government. Therefore, they worked from March 26 to April 1, 1954, to draft a proposal which would be more agreeable to the Government. This second proposal was ultimately submitted to the AEC on April 12, 1954. An intensive joint analysis was again made by the AEC and TVA. Although the findings of fact do not specifically indicate wherein the second proposal differed from the first, the second proposal was more to the Government's liking, and the analysts suggested that it could be a basis for the negotiation of a final contract. On April 24, 1954, Hughes sent President Eisenhower a memorandum reporting the results of the analysis and recommending that the Budget Bureau be authorized to instruct the AEC to conclude a final agreement. On June 16, 1954, the President authorized AEC to continue negotiations with the sponsors and to attempt to consummate an agreement based generally upon the terms of the second proposal.
17
The negotiation of the final contract began on July 7, 1954, and concluded with the signing of the contract on November 11, 1954. The Government was represented by a 'competent and aggressive staff of negotiators.'5 Although the final contract was slightly different from the second proposal, in a general way, it was within the terms of that proposal. The contract became effective on December 17, 1954.
18
In June 1955, after the respondent had taken some preliminary steps toward performance of the contract,6 the sponsors learned that President Eisenhower had requested the Bureau of the Budget, the AEC and TVA to consider whether the contract should be terminated because in the interim the City of Memphis had decided to construct a municipal power plant, thereby obviating the need in that area for TVA-generated power. On July 11, 1955, the sponsors were informed by the Chairman of the AEC that the President of the United States had decided to terminate the contract. During the months that followed, representatives of the sponsors and of the AEC attempted to agree upon a mutually acceptable basis for terminating the contract. On November 23, 1955, after protracted congressional debate concerning the propriety of Wenzell's activities on behalf of the Budget Bureau, the AEC advised the sponsors that, upon the advice of its counsel, it had reached the conclusion that the contract was not an obligation which could be recognized by the Government. This suit for damages was then initiated.
19
Second. Having sketched the general background of this litigation, we think it is now appropriate to set forth in some detail a description of Wenzell's connection with the Government and of the role he played in the negotiations, for it is these activities on behalf of the Government, as well as his affiliation with First Boston, which constitute the basis for the Government's assertion of a conflict of interest.
20
Wenzell's first contact with the Government actually antedates any of the negotiations relating to the contract here in question. However, his earlier association with the Government does have a bearing on the issues with which we are primarily concerned, and we shall therefore advert briefly to that phase of Wenzell's activities. In May 1953, George D. Woods, Chairman of First Boston, met with Dodge at the latter's office in the Bureau of the Budget. Woods expressed his agreement with the Administration's newly announced policy of reducing the Government's participation in business activities, and he offered the services of himself and his firm in any way that might help to achieve the Administration's objective. Dodge replied that he was interested in having some studies made on the amount of subsidy that TVA was receiving from the Federal Government. Dodge indicated that he had not been able to find the right person to conduct these studies, and he asked Woods if he could suggest someone. Woods replied that First Boston did have a man who had worked on many utility financing transactions and who would be qualified to do the work described by Dodge. The man referred to was Wenzell. Woods promised that he would endeavor to make Wenzell's services available for the special project described by Dodge. At the time, Wenzell was a vice president of First Boston and one of its directors. He had been with the firm since its inception in 1934 and before that with its predecessor since 1923. He owned stock in First Boston, although the stock was in his wife's name.
21
Upon returning to New York, Woods conferred with Wenzell and with other executives of First Boston. Wenzell indicated his willingness to take the job, and none of the other men consulted had any objection. A meeting between Dodge and Wenzell was therefore arranged for May 15, 1953. At the meeting, it was agreed that Wenzell would serve as a part-time consultant to the Bureau, spending one or two days a week in Washington until the project was completed. Wenzell was to receive no compensation from the Government, but he was to be given $10 per day in lieu of subsistence plus transportation expenses. It was understood that he would neither resign his position with First Boston nor relinquish any part of his regular salary or yearly bonus based on the business which he brought to the firm.
22
Wenzell's task was to make a financial analysis of TVA for the purpose of estimating the amount and source of the subsidy given to TVA by the Government. Wenzell began his work for the Bureau on May 20, 1953, and his final report was submitted on September 20, 1953. During his four months with the Government, Wenzell was made privy to a vast quantity of data, much of it confidential, contained in the TVA files. Wenzell's final report was generally favorable toward TVA's technical operations, although it suggested that some of TVA's internal accounting systems should be revised and that its service area should not be expanded. The report also contained many unsolicited recommendations to the effect that future demands for power in areas supplied by TVA should be met by private or municipal power plants rather than by an expansion of TVA's facilities. When the report was delivered to Dodge, he read it briefly and was surprised to see that Wenzell had included in the report these recommendations, which had not been requested. Subsequently, after Wenzell had severed his connection with the Bureau, he showed a copy of his report to Woods, although Dodge had expressly admonished Wenzell that the report was a confidential document and should be shown to no one.
23
Wenzell's next contact with the Government came in January 1954, shortly after the Bureau had commenced the agove-described preliminary negotiations with McAfee and Dixon. At the request of Hughes, Wenzell came to Washington on January 18, 1954, to confer on the possibility of his returning to the Bureau on a part-time basis to assist in the negotiations with Dixon. The decision to call upon Wenzell's talents was made by Dodge and Hughes, for it was thought that Wenzell's knowledge of TVA, based upon the analysis theretofore made by him, and of commercial transactions generally would be of great value during the negotiations. At the meeting, Hughes informed Wenzell of the Government's intention to arrange for the construction of a privately owned power plant near Memphis. Wenzell was also told about the exploratory negotiations which had taken place in December 1953 between the AEC and McAfee and Dixon. Wenzell's chief responsibility was to act as a consultant in the technical area of interest costs for any financing that would have to be undertaken in connection with the contract. Again, as in 1953, Wenzell was not asked to sever his connection with First Boston, and he did not do so. At the close of the meeting, Wenzell informed Hughes that he knew both Dixon and McAfee and that in 1948, or 1949, he had talked to Dixon in connection with services that First Boston proposed to render to one of Dixon's companies. Hughes asked Wenzell to attend a forthcoming meeting between the AEC and Dixon and McAfee. 'Hughes emphasized the need for great speed on the project,' and he asked Wenzell 'to use such influence as he had with the private utility people to impress upon them the need for prompt action on the matter.'
24
At the request of Hughes, Wenzell went to the AEC on the afternoon of January 18, 1954, to confer with Strauss. Strauss acquainted Wenzell with the purpose of the meeting scheduled for January 20, and impressed upon Wenzell the necessity for prompt action. On the following day, Wenzell called Dixon and told him that he would be present at the January 20 meeting as a representative of the Budget Bureau and that Dixon should not be surprised when he saw Wenzell at the meeting.
25
As prearranged, Wenzell attended the January 20 meeting, and he was the only representative of the Budget Bureau there. However, he did not come to the meeting unescorted. 'On his own volition and without consulting any representative of the * * * (Government) or of First Boston, Wenzell took with him Paul Miller, an assistant an First Boston's buying department.' The meeting lasted for several hours and the drift of the discussion has been described above. At the close of the meeting, Dixon said that he would begin investigating the feasibility of the type of contract desired by the Government, and it was agreed that Wenzell would talk to Tony Seal of Ebasco, an engineering firm which serviced Dixon's projects.
26
Wenzell returned to New York after the meeting, but, before he left, Hughes 'requested Wenzell to stay in touch with Dixon and his associates on the development of a proposal and particularly to help point up the real cost of money to be used in financing the project.' On January 21, 1954, Wenzell conferred with Seal. He informed Seal of what had happened in Washington and instructed him to begin a study of the proposed project. Seal met with Wenzell again on January 27, 1954, and the former described his progress on the study he was making. 'Wenzell stated that he was at * * * (Seal's) service as a representative of the Bureau of the Budget on the all-important matter of the cost of interest on money that would be borrowed to finance the construction of the plant.'
27
Wenzell went to Washington on February 4, 1954, to inform Hughes of what had transpored at his meetings with Seal. He met Dixon in Washington, and the two men flew to New York together that evening. During the flight, Dixon 'asked Wenzell to do him a personal favor and ascertain the opinion of First Boston on what the interest rates in the then current money market would be for financing a project similar to the OVEC project.'7 On February 5, 1954, Wenzell met with other executives of First Boston in an attempt to obtain the information requested by Dixon. After Wenzell thought he had found the answer to Dixon's question, he called Dixon and advised him of the information he had acquired from his colleagues at First Boston. During the week that followed, Wenzell made further studies and engrafted certain refinements onto his calculations. Then, on February 14, 1954, he attended a meeting in Dixon's office and gave Dixon the new figures which he had computed.
28
After McAfee dropped out of the negotiations because of the proposed site of the new plant, Dixon began to search out support from other quarters. One of those from whom he sought assistance was Yates. Dixon arranged a meeting with Yates on February 19, and he requested Wenzell, who had known Yates for several years, to be present. The meeting occurred as scheduled, and Wenzell was the only representative of the Government present. As indicated, Yates agreed to join the project on February 20, 1954.
29
During his next trip to Washington on February 23, 1954, Wenzell drafted a letter to Dixon giving his opinion as to the cost of money. The information in this letter conformed to the oral opinion which Wenzell had rendered on February 14, 1954. The letter was on First Boston stationery and was signed by Wenzell as an officer of First Boston. Two days later, on February 25, 1954, the sponsors submitted their first proposal. The proposal contained only one reference to the cost of money, and that paragraph read as follows:
30
'We have received assurances from responsible financial specialists expressing the belief that financial arrangements can be consummated on the basis which we have used in making this proposal and under existing market conditions, and our offer is conditioned upon such consummation.' The 'responsible financial specialists' upon which the sponsors relied were Wenzell and his colleagues at First Boston, and the cost data upon which they conditioned their proposal was that which was contained in the opinion letter drafted by Wenzell.
31
Wenzell did not participate in the initial study of the sponsors' proposal, but on March 1, 1954, he attended a Budget Bureau staff meeting which had been called for the purpose of completing the review of the proposal. Wenzell brought with him to his meeting Powell Robinson, an assistant vice president of First Boston's sales department. Wenzell, who by March 1 had completed his function as a consultant on the cost of money, now assumed the role of a consultant on the total cost of the project. His initial reaction was that the cost estimates contained in the first proposal were too high. When it became apparent that Wenzell could not answer all of the technical questions relating to engineering costs, Wenzell decided to call Seal down from New York. Seal arrived on the following day and the meeting was continued. As it turned out, Seal was also unable to answer all the questions asked by staff members, and Hughes was advised that, despite Wenzell's insight into the problem, there still remained areas of uncertainty. It was then suggested by a staff member that a joint AEC—TVA analysis be made. Immediately after Hughes made his decision, Wenzell informed Seal that such an analysis was to be made.
32
On March 9, 1954, a meeting took place at the Bureau of the Budget. The joint AEC—TVA analysis was discussed, and it was the view of all present that the cost estimates were too high. Wenzell was therefore instructed to inform Seal that the sponsors should try to submit a more acceptable proposal. Wenzell conveyed the information to Seal as requested. On the next day, Wenzell arranged a meeting between Duncan Linsley, the Chairman of First Boston's Executive Committee, and the sponsors. Dixon had requested the meeting so that he could confirm with a reliable source the cost-of-money information previously given him by Wenzell.
33
On March 15, Wenzell participated in another Budget Bureau meeting which had been called to discuss the final AEC—TVA analysis. In addition to Wenzell, those present at the meeting were the sponsors and Dodge. The sponsors requested that an independent analysis of the proposal be made, and Wenzell suggested that Francis L. Adams, Chief of the Bureau of Power, Federal Power Commission, be requested to make the analysis. As indicated above, this suggestion was subsequently adopted.
34
On March 16, 1954, several representatives of the sponsors met in Dixon's hotel room to draft a letter replying to the unfavorable conclusions contained in the AEC—TVA analysis. The evidence does not clearly demonstrate whether or not Wenzell was present at this meeting, but the Court of Claims found that Wenzell saw the letter and made several changes on it for the sponsors in his own handwriting. The letter was never sent to the AEC.
35
On March 23, 1954, Wenzell met with Adams and conferred with him on the proposal and the analysis which Adams was making. While Adams was preparing his analysis, the sponsors were working on some revised estimates. A meeting was called at the Budget Bureau for April 3, 1954, to discuss both Adams' analysis and the sponsors' new estimates. At the meeting, Wenzell once again confirmed the information he had previously given the sponsors on the cost of money. At the conclusion of the meeting, it was decided tht the sponsors should undertake to prepare a new proposal in line with their revised estimates. On the afternoon of April 3, Wenzell saw Nichols of the AEC, who said that the sponsors' most recent estimates might prove acceptable. 'He suggested that Wenzell encourage the sponsors to refine their figures.' April 3 was the last time that Wenzell came to Washington in his capacity as a consultant to the Bureau. However, the sponsors consulted him from time to time in the preparation of their second proposal, which was dated April 10, 1954, and was submitted to the AEC on April 12, 1954. Wenzell reconfirmed the information which he had previously given the sponsors on the cost of money, and '(t)his information was relied upon by the sponsors in the drafting of the second proposal.' The second proposal, like the first, contained a paragraph indicating that the sponsors relied upon Wenzell's advice and conditioned their offer on that advice.
36
Wenzell took no part in the final negotiations which led to a formal contract based upon the second proposal. The Court of Claims found that Wenzell terminated his association with the Bureau on April 3, 1954; however, Wenzell felt that his relationship with the Bureau ended on the date of the sponsors' second proposal, April 10, 1954. The findings show that Wenzell received a telephone call from Dixon regarding the second proposal as late as April 10, 1954, and that McCandless and Wenzell also had a telephone conversation on that date. Wenzell never tendered either an oral or written resignation; he merely stopped working on behalf of the Bureau.8
37
Third. The findings of the Court of Claims make it perfectly clear that the conflict-of-interest question in the case arose many months prior to the time at which the Government concluded that the contract was unenforceable. Those who first showed concern about the duality of Wenzell's interest were the sponsors themselves. Around February 20, 1954, Dixon's counsel, Daniel James, expressed apprehension about the fact that Wenzell was an officer of First Boston and was also an employee of the Budget Bureau. 'James felt that if it became necessary to finance the project, First Boston would receive first consideration as financial agent because of its experience on the OVEC project. Therefore, James told Dixon that since Wenzell was an officer of First Boston and was also employed by the Budget Bureau, a difficult situation might be created if Dixon should subsequently ask First Boston to handle the financing of the project.' James thought that the public power advocates would 'make it appear that there was a taint of illegality' attached to the project. As a result of his discussion with James, Dixon later spoke to Wenzell about the 'embarrassment' that might result if First Boston were to be retained as financial agent. Dixon suggested that Wenzell talk to his superiors at the Budget Bureau about the situation.
38
On February 23, 1954, Wenzell followed Dixon's advice and spoke to Hughes about the matter of duality. He alluded to the fact that he had given the sponsors an opinion letter on the probable cost of money for financing the project, and that First Boston was the source of the information given to the sponsors. 'He then pointed out to Hughes that if it later developed that First Boston should be asked to handle the financing for the sponsors and should give them a letter similar to Wenzell's draft, the facts that he had been the instrumentality for obtaining the interest figure from First Boston, had given the figure to the sponsors, and had used the same figure in his draft could cause criticism against and embarrassment to the Administration, in that it could be charged that he, as a First Boston officer and while employed as a special consultant to the Bureau of the Budget, had improperly used his position in the Bureau to obtain business for First Boston.' Hughes replied that he thought Wenzell was exaggerating the problem, but he nevertheless advised Wenzell to discuss the matter with his associates at First Boston, with his counsel, and ultimately with Dodge.
39
Wenzell returned to New York on February 23, 1954, and spoke to James Coggeshall, President of First Boston. Coggeshall thought that the matter was important and suggested that First Boston's counsel, Sullivan and Cromwell, be consulted. Arthur Dean, the partner in the firm who generally handled First Boston's business, was leaving town, and he suggested that Wenzell see John Raben, another member of the law firm. On February 26, 1954, Wenzell met with Raben and described the activities in which he had engaged on behalf of the Budget Bureau. 'Raben advised Wenzell that he should terminate his relationship as consultant with the Budget Bureau forthwith and in writing. He also advised that if the proposal was later accepted and First Boston was requested to handle the financing, the board of directors of First Boston should consider whether they wanted to accept the business and, if so, whether they should charge a fee. Finally, he told Wenzell that he should keep Dodge and Hughes informed about any developments in the matter, including any decision which First Boston might later make as to handling the financing of the project.' On the same day Raben telephoned Dean, who confirmed the advice which Raben had given Wenzell.
40
During the days that followed, Wenzell, in conversation, recognized the danger of his dual position, but he did not resign, as he had been advised to do. On one occasion, he was describing his uneasiness to one of his coworkers at the Budget Bureau, and his colleague said that he thought Wenzell 'was 'working both sides of the street' and was likely to get in serious trouble. He suggested that Wenzell's actions were attributable to his lack of familiarity with the restrictions applicable to Government employees as compared with practices in private business.' On another occasion in early March 1954, Wenzell told other associates at the Bureau that 'he felt that he was in an awkward position in connection with his work on the sponsors' proposal.' Then, on March 9, 1954, Wenzell spoke to Dodge about his problem. 'Dodge told Wenzell that if there was any likelihood that First Boston might participate in any financing which developed in the future, Wenzell should finish his work with the Bureau as quickly as possible.'
41
In the meantime, both James and Dixon learned that Wenzell had been advised by his counsel to resign immediately. When in early March 1954, James learned that Wenzell had not yet resigned, he asked Hughes why Wenzell had been permitted to continue as a consultant to the Bureau. James expressed the same fears to Hughes that he had earlier expressed to Dixon.
42
On March 3, 1954, Raben called Wenzell to find out whether the latter had resigned. Wenzell said that he had not resigned, but he assured Raben that he was in the process of doing so. Dean then telephoned Wenzell and told him 'to resign promptly and in writing.' Dean's concern continued, and on March 10, 1954, he told Raben to call Wenzell again to find out whether he had resigned. Wenzell indicated that he had not as yet resigned, but that he would do so immediately. Consequently, Raben took no further action on the matter. However, as indicated, Wenzell never resigned and did not cease to act for the Bureau until approximately the date on which the second proposal was submitted.
43
Fourth. The final set of facts with which we are concerned relates to the retention of First Boston as the financing agent for the project. On April 12, 1954, the day on which the second proposal was submitted to the Government, the sponsors met with numerous executives of First Boston, among whom was Wenzell. The sponsors requested a letter confirming Wenzell's information on interest costs. First Boston was also asked to prepare a memorandum on what it thought would be a proper financial plan for the project. At this meeting, Wenzell had discarded his Budget Bureau hat, and had resumed his role as a First Boston vice president. By the time of the meeting, Wenzell 'expected that First Boston would handle the financial arrangements for the sponsors if a contract resulted from' the second proposal.
44
About the middle of April 1954, an executive at Lehman Brothers, another major investment banking firm, learned of the possibility of a contract between the sponsors and the Government. Lehman Brothers thereupon notified the sponsors that it wished to be considered in connection with the financing of the project. Subsequently, in May 1954, Dixon told Woods that if First Boston was to arrange for the financing, it would probably be a good idea for Lehman Brothers also to be associated with the project. Woods was very cool to the idea of Lehman Brothers' participation, and he indicated that he would have to consult his colleagues about it.
45
On May 11, 1954, Woods told Dixon that First Boston did not wish to share the financing arrangements with Lehman Brothers, and that it might be better for First Boston to withdraw from the project. However, said Woods, if Dixon did not want Lehman Brothers to handle the financing alone, First Boston would be willing to associate with Lehman Brothers 'on the conditions that First Boston would have the dominant position so far as authority was concerned and would also have the senior position with respect to advertising and the division of fees.' Woods pointed out that in the financial business senior position as to advertising was a matter of great importance. He felt that First Boston would achieve great prestige were it to arrange for the financing of the project, and that as a result of its activities, First Boston would probably receive other business of the same kind.
46
Thereafter, First Boston, having already given Dixon a letter confirming Wenzell's information on interest costs, began to prepare a plan for the debt financing. Although Wenzell was not directly responsible for the preparation of the plan, he did assist those who were drafting it. At a meeting on May 18, 1954, the final draft plan for the financing of the project was discussed by the sponsors, First Boston, and Lehman Brothers. The plan called for the direct placement of up to $93,000,000 worth of bonds and up to $27,000,000 worth of unsecured notes. The plan was approved, and it was also decided 'that the fee for the financial agents would be divided on the basis of 60 percent to First Boston and 40 percent to Lehman Brothers and that First Boston would have the preferred position on any advertising.'
47
Since no formal agreement of retainer was ever signed, it is difficult to pinpoint the date on which First Boston was actually retained. However, Dixon believed that First Boston had been retained on April 12, when it had been asked to prepare an opinion letter and a memorandum on procedures to be used in financing the project.
48
Some time in late May 1954, Woods decided that it would be better for First Boston not to charge a fee for its services. The executive committee of First Boston tentatively decided not to accept a fee on July 1, 1954, and that position was formally adopted on October 21, 1954. 'The decision not to charge a fee was based on Woods' conclusions that the financing, which First Boston had been retained to handle, had flowed directly from the conversation which Woods had had with Dodge in May 1953, when Woods had offered Wenzell's services to the Budget Bureau to assist the Administration in connection with its power policy, and that First Boston should not charge a fee for assistance in obtaining funds that were designed to obviate the necessity of Federal expenditures for the expansion of TVA.'
49
As of February 18, 1955, First Boston had made no formal announcement of its decision not to charge a fee; nor had it notified the Government concerning the decision. On that date, Senator Lister Hill of Alabama made a speech criticizing the activities of Wenzell and First Boston and emphasizing Wenzell's conflict of interest.9 On the next day, Woods released a statement to the press indicating that neither Wenzell nor First Boston had received or would receive any fee for the services rendered in connection with the project. Lehman Brothers had previously indicated that it thought some fee should be charged, and when Woods released the press statement, representatives of Lehman Brothers were upset because they had not been consulted first. Although Dixon had heard that First Boston was contemplating not charging a fee, he did not understand that a final decision on that subject had been made. Even as late as May 5, 1955, Dixon told First Boston that he anticipated questions from the SEC regarding First Boston's fee, and he requested that First Boston give him a clear statement on the matter. In response to this request, First Boston gave Dixon a letter indicating that it would take no fee for the financing services to be rendered in connection with the project. 'Dixon was surprised by First Boston's decision not to accept a fee for its services as financial agent. The decision was unusual and without precedent in the history of First Boston.' Finally, on May 11, 1955, Lehman Brothers decided that, in view of First Boston's decision, it would also agree not to charge a fee.
50
Despite the fact that Wenzell had earlier promised to inform Dodge of any agreements between First Boston and the sponsors and to submit those agreements to the Budget Bureau for approval, and despite the fact that First Boston's counsel had advised Wenzell to inform the Budget Bureau of any such agreements, neither Wenzell nor anyone connected with First Boston informed the Budget Bureau of First Boston's retention by the sponsors. The Bureau of the Budget did not learn of First Boston's retention until February 18, 1955. The AEC was informed on July 7, 1954, that First Boston and Lehman Brothers were acting as financial agents for the sponsors. However, 'there is no evidence that any representative of AEC had knowledge up to * * * (December 1954) that Wenzell, while serving as a consultant to the Budget Bureau, had been meeting with and supplying information to the sponsors regarding the project.'
II.
51
As is apparent from a recitation of the facts, this case touches upon numerous matters with which we are not concerned. Therefore, at the outset, we think it is important not only to delineate the issues upon which our decision turns, but also to specify those collateral issues which are not pertinent to our decision. As already indicated, we are interested only in whether Wenzell's executive position with First Boston and his simultaneous activities on behalf of the Government constituted an illegal conflict of interest; and if so, whether the conflict of interest rendered the contract unenforceable. In reaching our decision on these questions, we do not consider and have no interest in the following matters:
52
(1) The policy of the Administration concerning the relative merits of public versus private power development; (2) The desire of the respondent and Wenzell and his corporate associates to advance the policies of the Administration;
53
(3) The employment of so-called 'dollar-a-year' men, such as Wenzell, to advise the Government in matters of business, industry, labor, and the sciences; and
54
The reasonableness or unreasonableness of the contract ultimately negotiated, that not being an issue in the case, and there being no burden on the Government to establish financial loss.
55
First. In determining whether Wenzell's activities fall within the proscription of Section 434, we think it is appropriate to focus our attention initially on the origin, purpose, and scope of the statute. Section 434 is one of several penal conflict-of-interest statutes which were designed to prohibit government officials from engaging in conduct that might be inimical to the best interests of the general public.10 It is a restatement of a statute adopted in 1863 following the disclosure by a House Committee of scandalous corruption on the part of government agents whose job it was to procure was materials for the Union armies during the Civil War.11 The statute has since been re-enacted on several occasions,12 and the broad prohibition contained in the original statute has been retained throughout the years.
56
The obvious purpose of the statute is to insure honesty in the Government's business dealings by preventing federal agents who have interests adverse to those of the Government from advancing their own interests at the expense of the public welfare. United States v. Chemical Foundation, 272 U.S. 1, 18, 47 S.Ct. 1, 7, 71 L.Ed. 131. The moral principle upon which the statute is based has its foundation in the Biblical admonition that no man may serve two masters, Matt. 6:24, a maxim which is especially pertinent if one of the masters happens to be economic self-interest. Consonant with this salutary moral purpose, Congress has drafted a statute which speaks in very comprehensive terms. Section 434 is not limited in its application to those in the highest echelons of government service, or to those government agents who have only a direct financial interest in the business entities with which they negotiate on class of business transactions. Nor is the statute's scope restricted by numerous provisos and exceptions, as is true of many penal statutes.13 Rather, it applies, without exception, to 'whoever' is 'directly or indirectly interested in the pecuniary profits or contracts' of a business entity with which he transacts any business 'as an officer or agent of the United States.'
57
It is also significant, we think, that the statute does not specify as elements of the crime that there be actual corruption or that there be any actual loss suffered by the Government as a result of the defendant's conflict of interest. This omission indicates that the statute establishes an objective standard of conduct, and that whenever a government agent fails to act in accordance with that standard, he is guilty of violating the statute, regardless of whether there is positive corruption. The statute is thus directed not only at dishonor, but also at conduct that tempts dishonor. This broad proscription embodies a recognition of the fact that an impairment of impartial judgment can occur in even the most well-meaning men when their personal economic interests are affected by the business they transact on behalf of the Government. To this extent, therefore, the statute is more concerned with what might have happened in a given situation than with what actually happened. It attempts to prevent honest happened. It attempts to prevent honest government agents from succumbing to temptation by making it illegal for them to enter into relationships which are fraught with temptation.14 Rankin v. United States, 98 Ct.Cl. 357.
58
While recognizing that the statute speaks in broad, absolute terms, the respondent argues that to interpret the statute as laying down a prophylactic rule which ignores the actual consequences of proscribed action would be a violation of the time-honored canon that penal statutes are to be narrowly construed. But even penal statutes must be 'given their fair meaning in accord with the evident intent of Congress.' United States v. Raynor, 302 U.S. 540, 552, 58 S.Ct. 353, 359, 82 L.Ed. 413; Rainwater v. United States, 356 U.S. 590, 593, 78 S.Ct. 946, 949, 2 L.Ed.2d 966; United States v. Corbett, 215 U.S. 233, 242, 30 S.Ct. 81, 84, 54 L.Ed. 173. In view of the statute's evident purpose and its comprehensive language, we are convinced that Congress intended to establish a rigid rule of conduct which, as we shall now demonstrate by analyzing each of the elements of the statutory prohibition, was violated by Wenzell.
59
The first question is whether Wenzell acted as an 'officer or agent of the United States for the transaction of business.' Judged by any reasonable test, the facts which we have recited above demonstrate that he was the Government's key representative in the crucial preliminary negotiations between the Government and the sponsors. Because Wenzell was a business acquaintance of both Dixon and Yates, Hughes very early in the negotiations assigned Wenzell the task of using 'such influence as he had with the private utility people to impress upon them the need for prompt action.' In the weeks that followed, Wenzell kept in constant touch with the sponsors, and frequently was the only representative of the Government at important meetings concerning the project. He participated in intragovernmental analyses; he supplied the sponsors with vital information on the cost of money, and that information was subsequently made the basis for the sponsors' proposals; he urged the sponsors to refine their figures after the initial proposal was rejected; and he was used by the Budget Bureau not only as a consultant on the cost of money, but also as an advisor on the total cost of the project. In fact, Wenzell's activities were so extensive that the Court of Claims was led to the conclusion that 'Hughes really used Wenzell as an expediter. * * * He (Wenzell), no doubt, was able to give to Hughes a better overall view of events than any other person, and did, we should suppose, expedite the formulation of the proposal which formed the basis for the later negotiation of details and exact figures.' 175 F.Supp. at page 514. Considering that Wenzell was the Government's major representative in the formative negotiations of this multimillion dollar contract, we think it would be unrealistic to say that he was not the type of 'agent' to whom Section 434 was intended to apply.
60
The respondent suggests that Wenzell was not an 'agent of the United States' because '(he) took no oath of office; he had no tenure; he served without salary, except for $10 per day in lieu of subsistence; his duties were merely consultative, were occasional and temporary and were not prescribed by statute; and he was permitted to continue in his position as one of the vice presidents and directors of First Boston and to draw his salary from that company.' But surely, these factors cannot be determinative of the question. A key representative of the Government who has taken no oath of office, who has no tenure, and who receives no salary is just as likely to subordinate the Government's interest to his own as is a regular, fulltime compensated civil servant. This is undoubtedly why the statute applies not only to those who are 'employed' by the Government, but also to '(w)hoever * * * acts' as an agent for the Government.15 In addition, we think that the respondent ignores the relevant facts when it characterizes Wenzell's activities as merely 'occasional and temporary.' During his association with the Budget Bureau, Wenzell, as we have indicated, was as active a participant in the negotiations as anyone connected with the project. We do not think it would be erroneous to characterize him as the real architect of the final contract. Finally, respondent's reliance upon the fact that Wenzell retained his position with First Boston is misplaced. The key role which Wenzell played in representing the Government was in no way diminished by the fact that he retained his association with First Boston during his period of consultancy. It was Wenzell's position with First Boston which constituted the basis for his conflict of interest, and it would truly be anomalous if we were to adopt the respondent's suggestion that the very fact which creates the conflict of interest also operates to remove Wenzell from the coverage of the statute. This would ignore the purpose of the statute.
61
The respondent also contends that even if Wenzell qualified as an 'agent' of the Government, his activities did not constitute 'the transaction of business.' We disagree. Although it is true that Wenzell had no authority to sign a binding contract, and that he did not participate in the terminal negotiations which led to the final agreement, nevertheless, those facts do not support the respondent's conclusion that the negotiations in which Wenzell participated were too remote and tenuous to be considered 'the transaction of business.' Far from being tenuous, the negotiations in which he participated were the very foundation upon which the final contract was based. As the findings of the Court of Claims demonstrate, the preliminary negotiations with which Wenzell was concerned dealt primarily with the cost of the project, and particularly with the 'allimportant matter of the cost of interest on money that would be borrowed to finance the construction of the plant.' If the sponsors and the Government had not agreed on the cost of construction and on the cost of money, no contract would have been made, because the cost of power supplied to the AEC was to have been based upon both of those factors. As the Court of Claims found: 'It was well known that the cost of money played an important part in the cost of the entire project and in the price at which the energy could be produced and sold * * *. It was always contemplated that the cost of money would be reflected in the capacity charge to the Government, and * * * the cost of money is the largest component of cost included in the capacity charge.' The importance of the negotiations between Wenzell and the sponsors is emphasized by the fact that both the first and second proposals were conditioned upon the sponsors' being able to borrow money at the interest rate specified by Wenzell and First Boston. Although Wenzell did not participate in the ultimate negotiations, those negotiations cannot be divorced from the events which led up to the submission of the second proposal. The final contract was not negotiated in a vacuum. The second proposal, upon which Wenzell had expended so much time and energy, constituted both the framework and the guidelines of the final contract. And although 'there were numerous changes in and additions to the terms set forth in the proposal,' the Court of Claims specifically found that '(i)n a general way, the contract was within the terms of the proposal.'
62
We therefore think that the respondent unrealistically assesses the facts when it characterizes the negotiations which led to the contract as a series of disconnected transactions. On the contrary, they were a continuous course of dealings which were closely interrelated and interconnected. Wenzell played a key role in the early stages of the negotiations, and it was quite likely that the contract would never have come into fruition had he not participated on behalf of the Government. The Court of Claims recognized the importance of the preliminary negotiations and of Wenzell's activities during those negotiations. It said that '(w)hile the contract itself contained nothing of Wenzell's work, the fact that it was made at 175 F.Supp. at page 514. If the activities of a government agent have as decisive an effect upon the outcome of a transactions as Wenzell's activities were said by the Court of Claims to have had in this case, then a refusal to characterize those activities as part of a business transaction merely because they occurred at an early stage of the negotiations is at war with the obvious purpose of the statute. To limit the application of the statute to government agents who participate only in the final formation of a contract would permit those who have a conflict of interest to engage in the preliminary, but often crucial stages of the transaction, and then to insulate themselves from prosecution under Section 434 by withdrawing from the negotiations at the final, and often perfunctory stage of the proceedings. Congress could not possibly have intended such an obvious evasion of the statute.
63
The second question which we must consider in determining whether Wenzell's activities fell within the scope of the statute is whether he was 'directly or indirectly interested in the pecuniary profits or contracts' of the sponsors. We think that the findings of the lower court demonstrate that, at the very least, Wenzell had an indirect interest in the contract which the sponsors were attempting to obtain. That interest may be described as follows: Wenzell was an officer and executive of First Boston; he not only shared in the profits which First Boston made during the year, but he also received a bonus for any business which he brought to the firm; if a contract between the Government and the sponsors was ultimately agreed upon, there was a substantial probability that, because of its prior experience in the area of private power funancing, First Boston would be hired to secure the financing for the proposed Memphis project; if First Boston did receive the contract, it might not only profit directly from that contract, but it would also achieve great prestige and would thereby be likely to receive other business of the same kind in the future; therefore, Wenzell, as an officer and profit-sharer of First Boston, could expect to benefit from any agreement that might be made between the Government and the sponsors.
64
The respondent urges that Wenzell had no interest because First Boston had no more than a mere hope that it might receive the financing work were the negotiations in which Wenzell participated to culminate in a contract. However, the findings of fact and the conclusions of the Court of Claims belie the respondent's assertion. First Boston had arranged the financing on the OVEC project and had acquired a reputation in the area of private power financing. Wenzell had also acquired a certain expertise in this area by virtue of his previous work for the Budget Bureau in preparing the TVA analysis. It was therefore probable that First Boston's services would again be utilized should the sponsors obtain a contract to construct a project similar to OVEC. That this expectation was not baseless is demonstrated by the fact that as early as February 20, 1954, Dixon's counsel expressed apprehension about Wenzell's duality since it seemed likely that First Boston would receive the financing contract. Even Wenzell must have thought very early in the negotiations that First Boston would probably be retained to do the financing, for on February 23, 1954, he told Hughes that should First Boston be retained, he might be criticized for having 'improperly used his position in the Bureau to obtain business for First Boston.' Wenzell's apprehension was confirmed by First Boston's counsel, who advised Wenzell to resign from the Bureau of the Budget 'forthwith and in writing.' This advice was undoubtedly premised on the realization that First Boston stood a good chance of receiving the financing contract. The Court of Claims recognized that from the outset there was a 'substantial possibility' that First Boston would be retained. It said:
65
'There was, of course, a substantial possibility that if the Administration's hope that private capital would build the necessary plant should be realized, First Boston, as one of the largest and most experienced firms engaged in arranging the financing of such enterprises, might be employed by the company which got the contract.' 175 F.Supp. at page 514.
66
'He (Wenzell) had an interest in First Boston which company, by the logic of circumstances, might be offered the work of arranging the financing of the project when and if a contract for the project should be made.' 175 F.Supp. at page 515. (Emphasis added.)
67
It was the 'logic of circumstances' referred to by the Court of Claims that placed Wenzell in the ambivalent position at which the statute is aimed. Wenzell, as an agent of the Government, was entrusted with the responsibility of representing the Government's interest in the preliminary stages of a very important contract negotiation. However, because the sponsors were in a position to affect the fortunes of himself and his firm, he was, to say the least, subconsciously tempted to ingratiate himself with the sponsors and to accede to their demands, even though such concessions might have been adverse to the best interests of the Government. By thus placing himself in this ambiguous situation, Wenzell failed to honor the objective standard of conduct which the statute prescribes.
68
The respondent suggests that Wenzell was never really subject to any temptations because he was not in a position whereby he could have sacrificed any of the Government's interests. Once again, however, the respondent takes an unrealistic view of the facts. We have already described how important a role Wenzell played in this transaction. In fulfilling that role, Wenzell, on numerous occasions, could have taken action that would have favored the sponsors to the detriment of the Government. For example, he could have concurred too easily with the sponsors as to specific items of the proposals or of the cost estimates; or he could have failed to press the Government's position on items of cost vigorously enough; or he could have suggested acceptance by the Government of a proposal which, for one reason or another, should not have been approved. However, we need not deal exclusively in the realm of conjecture. The findings of the Court of Claims disclose numerous instances in which Wenzell seemed to be more preoccupied with advancing the position of First Boston or the sponsors than with representing the best interests of the Government. For example, after the joint TVA-AEC analysis was made available, Wenzell helped draft a letter which the sponsors planned to submit to the Government as a rebuttal to the unfavorable conclusions contained in the analysis. We should think that one who represented the Government would be more interested in defending the Government's position than in helping the sponsors to attack it. On another occasion, Wenzell performed a 'personal favor' for Dixon by obtaining some information on the cost of money from his associates at First Boston. As it later turned out, this information was to constitute the framework around which the sponsors constructed their proposal. By submitting the information to Dixon on the stationery of First Boston, and by subsequently arranging a meeting between the sponsors and some officers of First Boston so that the information could be confirmed, Wenzell was able constantly to keep First Boston in the forefront of the picture.16 It is therefore not surprising either that the sponsors did choose First Boston to conduct the major part of the financing, or that Woods, the Chairman of First Boston, subsequently thought that 'the financing, which First Boston had been retained to handle, had flowed directly from the conversation which Woods had had with Dodge in May 1953, when Woods had offered Wenzell's services to the Budget Bureau to assist the Administration in connection with its power policy.' That Wenzell's primary allegiance was to First Boston and that his loyalty to the Government was a fleeting one is shown by the fact that after he had finished his report on TVA in 1953, he showed a copy of that confidential document to Woods, even though he had been expressly told by Dodge to show the report to no one; and by the further fact that when First Boston agreed to do the financing, Wenzell did not keep his promise to Dodge to inform the Budget Bureau of any arrangement between First Boston and the sponsors and to submit that arrangement to the Bureau for approval. It may be true, as the respondent asserts, that none of Wenzell's activities to which we have alluded adversely affected the Government in any way. However, that question is irrelevant to a consideration of whether or not Wenzell violated the statute. As we have indicated, the statute is preventive in nature; it lays down an absolute standard of conduct which Wenzell violated by entering into a relationship which made it difficult for him to represent the Government with the singleness of purpose required by the statute.17
69
Finally, some mention must be made of certain factors which the Court of Claims cited in reaching the conclusion that Wenzell had not violated the statute. First, both the court below and the respondent intimate that Wenzell could not have expected to benefit from the contract because there was no formal contract or understanding between First Boston and the sponsors to the effect that First Boston would be retained should the sponsors enter into an agreement with the Government. However, we do not think that the absence of such a formal agreement or understanding is determinative. The question is not whether Wenzell was certain to benefit from the contract, but whether the likelihood that he might benefit was no great that he would be subject to those temptations which the statute seeks to avoid. That there was more than a mere likelihood in this case has already been shown. Second, the Court of Claims stressed the fact that Wenzell's goal of advancing the cause of private power coincided with the Administration's general objective. However, that fact cannot serve to exempt Wenzell from the coverage of the statute. In fact, the more evidence an agent gives of agreement with the policies of the Administration, the more responsibility he is likely to be given, and in case of a conflict of interest, the greater is the possible injury to the Government. Third, the Court of Claims relied strongly on the fact that Wenzell did not think that he was involved in a conflict-of-interest situation. How Wenzell could have thought otherwise following the admonitions of both Dixon's counsel and First Boston's counsel and his own statements in that regard is difficult to understand. However, even assuming that Wenzell did not think there was a conflict, that fact is irrelevant. As we have shown, the statute establishes an objective, not a subjective, standard, and it is therefore of little moment whether the agent thought he was violating the statute, if the objective facts show that there was a conflict of interest. Finally, both the Court of Claims and the respondent make much of the fact that Wenzell's immediate superiors in the Bureau of the Budget knew of his activities and of his interest in First Boston. True as this fact is, it is significant, we think, that no one in the AEC, which was the governmental cantracting agency, and which had expressed reluctance about the contract throughout the negotiations, had knowledge until December 1954 that 'Wenzell, while serving as a consultant to the Budget Bureau, had been meeting with and supplying information to the sponsors regarding the project.' In any event, the knowledge of Wenzell's superiors and their approval of his activities do not suffice to exempt Wenzell from the coverage of the statute. Neither Section 434 Nor any other statute empowered his superiors to exempt him from the statute, and we are convinced that it would be contrary to the purpose of the statute for this Court to bestow such a power upon those whom Congress has not seen fit to so authorize. Congress undoubtedly had a very specific reason for not conferring such a power upon high-level administrators. It recognized that an agent's superiors may not appreciate the nature of the agent's conflict, or that the superiors might, in fact, share the agent's conflict of interest. The prohibition was therefore designed to protect the United States, as a Government, from the mistakes, as well as the connivance, of its own officers and agents. It is not surprising therefore that we have consistently held that no government agent can properly claim exemption from a conflict-of-inteest statute simply because his superiors did not discern the conflict. Ewert v. Bluejacket, 259 U.S. 129, 42 S.Ct. 442, 66 L.Ed. 858; Prosser v. Finn, 208 U.S. 67, 28 S.Ct. 225, 52 L.Ed. 392.
70
The thrust of the arguments made by the respondent and adopted by the Court of Claims is that it would be unjust to apply the statute to one who acted as Wenzell did in this case. We cannot agree. The statute is directed at an evil which endangers the very fabric of a democratic society, for a democracy is effective only if the people have faith in those who govern, and that faith is bound to be shattered when high officials and their appointees engage in activities which arouse suspicions of malfeasance and corruption. The seriousness of this evil quite naturally led Congress to adopt a statute whose breadth would be sufficient to cope with the evil. Against this background, it seems clear to us that Wenzell's duality, which aroused the fears of his own counsel and the suspicions of many observers, was the very type of conflict at which the statute is aimed. That Wenzell was aware of his dual position early in the negotiations; that he was advised by his own counsel to resign 'forthwith and in writing'; that he did not terminate his association with the Budget Bureau until the final proposal had been submitted; that he never formally resigned his position with the Bureau, as he had been advised to do; and that his activities fall within the literal meaning of the statute have all been demonstrated. In the light of these circumstances, we think that the respondent's reliance upon the so-called equitable considerations in Wenzell's favor is misplaced.
71
Because of the respondent's assertion that an application of the statute to Wenzell will make it impossible in the future for the Government to obtain the services of private consultants on a part-time basis, we emphasize that our specific holding, on the facts before us, is that § 434 forbids a government agent from engaging in business transactions on behalf of the Government if, by virtue of his private interests, he may benefit financially from the outcome of those transactions.
72
Second. Having determined that Wenzell's activities constituted a violation of Section 434, we must next consider whether Wenzell's illegal conduct renders the contract unenforceable. It is true that Section 434 does not specifically provide for the invalidation of contracts which are made in violation of the statutory prohibition. However, that fact is not determinative of the question, for a statute frequently implies that a contract is not to be enforced when it arises out of circumstances that would lead enforcement to offend the essential purpose of the enactment. E.g., Miller v. Ammon, 145 U.S. 421, 12 S.Ct. 884, 36 L.Ed. 759; Bank of United States v. Owens, 2 Pet. 527, 27 U.S. 527, 7 L.Ed. 508; 6 Williston, Contracts (rev. ed. 1938), § 1763. Therefore, the inquiry must be whether the sanction of nonenforcement is consistent with and essential to effectuating the public policy embodied in Section 434.
73
As we have indicated, the primary purpose of the statute is to protect the public from the corrupting influences that might be brought to bear upon government agents who are financially interested in the business transactions which they are conducting on behalf of the Government. This protection can be fully accorded only if contracts which are tainted by a conflict of interest on the part of a government agent may be disaffirmed by the Government. If the Government's sole remedy in a case such as that now before us is merely a criminal prosecution against its agent, as the respondent suggests, then the public will be forced to bear the burden of complying with the very sort of contract which the statute sought to prevent. Were we to decree the enforcement of such a contract, we would be affirmatively sanctioning the type of infected bargain which the statute outlaws and we would be depriving the public of the protection which Congress has conferred.
74
Nonenforcement of contracts made in violation of Section 434 and its predecessor statutes is not a novel remedy. On at least two occasions the Court of Claims has held that the Government could disaffirm contractual obligations arising from transactions which were prohibited by the statutory antecedent to Section 434. Rankin v. United States, supra; Curved Electrotype Plate Co. of New York v. United States, 50 Ct.Cl. 258. See also Michigan Steel Box Co. v. United States, 49 Ct.Cl. 421. In reaching its decision in this case, the Court of Claims appears to have abandoned these precedents, and instead placed great reliance upon our decision in Muschany v. United States, 324 U.S. 49, 65 S.Ct. 442, 89 L.Ed. 744. However, we find no difficulty in distinguishing that case from the instant situation. The Muschany case involved a government land agent whose activities not only were authorized by the National Defense Act of 1940, 54 Stat. 712, but also were found by the Court to be out-side the purview of the conflict-of-interest statutes. Therefore, unlike this case, Muschany did not involve a contract which resulted from an illegal transaction, and it is consequently understandable that the contract there in question was enforced.18
75
The Court of Claims was of the opinion that it would be overly harsh not to enforce this contract, since the sponsors could not have controlled Wenzell's activities and were guilty of no wrongdoing. However, we think that the court emphasized the wrong considerations. Although nonenforcement frequently has the effect of punishing one who has broken the law, its primary purpose is to guarantee the integrity of the federal contracting process and to protect the public from the corruption which might lie undetectable beneath the surface of a contract conceived in a tainted transaction. Cf. Crocker v. United States, 240 U.S. 74, 80 81, 36 S.Ct. 245, 247, 248, 60 L.Ed. 533. It is this inherent difficulty in detecting corruption which requires that contracts made in violation of Section 434 be held unenforceable, even though the party seeking enforcement ostensibly appears entirely innocent. Cf. Hazelton v. Sheckells, 202 U.S. 71, 79, 26 S.Ct. 567, 568, 50 L.Ed. 939. Therefore, even if the result in a given case may seem harsh, and we do not think that such is the case here,19 that result is dictated by the public policy manifested by the statute. We agree with Judge Jones' statement that 'the policy so clearly expressed in 18 U.S.C. 434 leaves no room for equitable considerations. * * * If that policy is to be narrowed or limited by exceptions, it is the function of Congress and not of this court to spell out such limitations and exceptions.' 175 F.Supp. at page 533 (dissenting opinion).
76
In concluding that the sponsors were entitled to enforce their contract, the court below expressed the opinion that the Government may not avoid a bad bargain by relying upon a conflict of interest which was directly caused by high officials in the Bureau of the Budget. Of course, the Government could not avoid the contract merely because it turned out to be a bad bargain.20 See Muschany v. United States, supra, 324 U.S. at pages 66—67, 65 S.Ct. at page 451. However, that is not the issue before us. The question is whether the Government may disaffirm a contract which is infected by an illegal conflict of interest. As we have indicated, the public policy embodied in Section 434 requires nonenforcement, and this is true even though the conflict of interest was caused or condoned by high government officials. The same strong policy which prevents an administrative official from exempting his subordinates from the coverage of the statute also dictates that the actions of such an official not be construed as requiring enforcement of an illegal contract.21
77
Although nonenforcement may seem harsh in a given case, we think that it is required in order to extend to the public the full protection which Congress decreed by enacting Section 434.22
78
The judgment of the Court of Claims is reversed and the case is remanded for further proceedings consistent with this opinion.
79
Reversed and remanded.
80
Mr. Justice HARLAN, whom Mr. Justice WHITTAKER and Mr. Justice STEWART join, dissenting.
81
In a case like this controlling legal issues are apt to become blurred under the urge of vindicating a public policy whose importance no one will dispute. However, we sit here not as a committee on general business ethics, but as a court enforcing a specific piece of legislation.
82
While I am bound to say that the Government's defense to this claim for our-of-pocket expenses incurred in a matter that the Government was once anxious to explore, is far from ingratiating,1 I must agree with the Court that Wenzell's government role in connection with the Mississippi Valley contract, though in the view of the Court of Claims it was quite peripheral, was sufficient to constitute him one who 'acts as an officer or agent of the United States' within the meaning of 18 U.S.C. § 434, 18 U.S.C.A. § 434,2 and that if he was personally 'indirectly interested' in that contract via First Boston the case must go for the Government. But in light of the findings of the Court of Claims I cannot agree that Wenzell was so interested, within the contemplation of § 434. In my opinion this Court's contrary conclusion rests upon too loose a view of the controlling statutory phrase.
83
Referring to the period of Wenzell's governmental service, the Court of Claims concluded:
84
'There is not a shadow of evidence that it (First Boston) had any agreement or commitment, written or oral, formal or informal, contingent or otherwise that, in the event that the proposal (of the Dixon-Yates group) which was in preparation when Wenzell's Government employment ended should result in negotiations which should, in the course of events, result in a contract, First Boston would be given the opportunity to earn a commission by selling the bonds of the corporation (Mississippi Valley) which would be formed to sign and perform the contract. The evidence is perfectly plain that there was no such agreement or understanding.' 175 F.Supp. at page 518.
85
I do not understand the Court to take issue with this conclusion or with any of the findings of the Hearing Examiner on which it was based. It could not well do so, cf. Commissioner of Internal Revenue v. Duberstein, 363 U.S. 278, 80 S.Ct. 1190, 4 L.Ed.2d 1218; nor does the Government ask this. Rather, the Court finds the prohibited 'indirect interest' to consist of Wenzell's expectation in the probability that First Boston, by virtue of its reputation in the field of private power financing and its having previously arranged the financing for a similar project, would eventually share in the financing of this venture.
86
I do not believe that such a probability alone gives rise to a contaminating interest under § 434. The fact that the probability eventuated into actuality after Wenzell's government service terminated can hardly be relevant, for what the Court, under its view of the statute, correctly says as to the immateriality of First Boston's later waiver of commissions must surely also work in reverse. Whether or not a prohibited interest exists must be determined as of the period during which an individual is acting for the Government. And when the asserted interest arises 'indirectly' by way of a subcontract, its existence can, in my opinion, only be found in some commitment, arrangement, or understanding obtaining at that time between the prime contractor and subcontractor.3 I believe this latter proposition is supported by persuasive considerations.
87
First. It fits the language of § 434, whereas the Court's view does not. The statute does not speak of the disqualifying factors in terms of expectations or probabilities, but imports a precise standard, that is, a present status or pecuniary interest arising from some existing relationship with the business entity contracting with the Government. Certainly this is true as to an 'officer,' 'agent,' or 'member' of the contracting enterprise. It is equally true of one disqualified by reason of 'being * * * directly * * * interested in the pecuniary profits or contracts' of such an entity. I can see no reason why it should not also be true as to one 'indirectly' so interested, requiring in this instance proof of some then-existing arrangement between Mississippi Valley and First Boston. I do not mean to suggest that such an arrangement must be evidenced by a formal agreement, for of course any sort of tacit understanding or 'gentlemen's agreement' will suffice. But here the Court of Claims has expressly found against the existence of any such thing.
88
Second. The view which I take of the matter also fits the purposes of § 434. The policy and rationale of the statute are clear: an individual who negotiates business for the Government should not be exposed to the temptation which might be created by a loyalty divided between the interest of the Government and his own self-interest; the risk that the Government will not be left with the best possible transaction is too great. In terms of these factors, a finding of some commitment, arrangement or understanding between the prime contractor and the subcontractor should be required when the contracting officer's adverse interest arises by way of a subcontract, since only where some such arrangement exists can the officer be taken to have known that any undue benefit he confers on the prime contractor will not eventually redound to the profit of some other competing subcontractor.
89
Here, for instance, it was found below that Mississippi Valley 'a month after Wenzell's Government employment had terminated * * * felt perfectly free to give the bond-selling business to whomever it pleased.' 175 F.Supp. at page 518. Hence if Wenzell did in fact confer some undue benefit on Mississippi during the term of his government service (although none is suggested), he must have known that he was conferring that benefit at large, and that if First Boston later were to share in it this would only be the consequence of its having successfully competed against other investment bankers with similar qualifications. Furthermore, where the government officer's eventual indirect participation in the contract which he has negotiated (by hypothesis improperly) depends on the chance of competition after he has lost the leverage which his position gave, then it would be subject to the additional hazard that although the contractor has received a boon at his hands, all the subcontractor receives is such a normal subcontract as he might have had in any case.
90
Third. The Court's interpretation of § 434 introduces unnecessary and undesirable uncertainties into the statute. Instead of presenting the individual concerned or the trier of fact with a definite standard for determining whether a disqualifying interest of this kind is present—the existence vel non of a commitment or undertaking between the primary and secondary contractors—the question is left at large. The opinion in this case indeed highlights the matter. For after apparently agreeing that a 'mere hope' that First Boston might share in the financing of the power contract would not be enough, the Court goes on to describe that eventuality in a variety of ways—that there was 'a substantial probability' of it; that it was 'probable'; that 'it seemed likely'; that it 'stood a good chance' of coming to pass; and that it might simply follow from the "logic of circumstances" as a "substantial possibility."
91
Such uncertainty, inherent in the Court's view of the statute, is bound to cause future confusion in an area where the line of demarcation should be clear cut. As time goes on it will face many conscientious persons with the kind of close and subtle niceties which, as every judge and lawyer knows, often attend a matter of possible disqualification. Such illusive factors should not be imported into a statute governing the conduct primarily of laymen serving the Government.
92
Fourth. I think there is affirmative ground in the pattern of conflict-of-interest legislation for not attributing to Congress the purpose which the Court here does. The statute in question is the most general conflict-of-interest enactment, but there are other provisions of law, as well as federal regulations, which also deal with the subject. Particularly 5 U.S.C. § 99, 5 U.S.C.A. § 99, and 18 U.S.C. § 284, 18 U.S.C.A. § 284, indicate a different approach to the problem. The two statutes disqualify former officers and employees of governmental agencies or departments for a period of two years from prosecuting or aiding in any way in the prosecution of a claim which had been pending at the time of their employment. A similar approach is suggested by this Court's Rule 7, 28 U.S.C.A., which prohibits clerks and secretaries from practicing before this Court for a period of two years after leaving the Court, and from participating in any way in a case which was before the Court during the term of their employment. Cf. Canon 36 of the Canons of Professional Ethics of the American Bar Association.
93
The interpretation which the Court today gives 18 U.S.C. § 434, 18 U.S.C.A. § 434, if it is to be taken as more than a disposition of this particular controversy, will go a long way to assimilating that statute in practical effect to the absolute disqualification type of provisions, for certainly where criminal sanctions are involved no prudent man will risk later acquiring an interest in a contract which he helped to negotiate during a previous term of government employment. Whether such a rigid rule, of a kind traditional in the legal profession, should also be regarded as one of general morality in the public service may, of course, well be debated. However, Congress did not, in my view, enact this precept into law in the present statute, and where it has enacted this policy it has done so with a clarity and precision which I feel the present reading of § 434 lacks.
94
I would affirm.
1
The positions held by the various individuals named in this opinion are those which were held at the time the transaction in question occurred.
2
The statute reads as follows:
'Whoever, being an officer, agent or member of, or directly or indirectly interested in the pecuniary profits or contracts of any corporation, joint-stock company, or association, or of any firm or partnership, or other business entity, is employed or acts as an officer or agent of the United States for the transaction of business with such business entity, shall be fined not more than $2,000 or imprisoned not more than two years, or both.'
3
There were four opinions in the lower court. The principal one was written by Judge Madden of the Court of Claims, and it was joined by Judges Laramore of the Court of Claims and Bryan, United States District Judge sitting by assignment. Judge Bryan also wrote a concurring opinion. Mr. Justice Reed (retired), sitting by assignment, wrote a dissenting opinion which was joined by Judge Jones, Chief Judge of the Court of Claims. Judge Jones also wrote a separate dissent.
4
The other defenses raised by the Government were:
(1) That the AEC had not been authorized by the Atomic Energy Act of 1954, 42 U.S.C.A. § 2011 et seq., to make the contract;
(2) That the contract had not been placed before the Joint Committee on Atomic Energy in the manner required by the Atomic Energy Act;
(3) That the financing agreements required by the contract violated the Public Utility Holding Act of 1935, 15 U.S.C.A. § 79 et seq.
(4) That the respondent had not obtained all of the regulatory approvals required for it to arrange the financing necessary for performance of the contract; and
(5) That the power contract was void for lack of mutuality.
5
Any quoted material in the statement of facts is taken from the Court of Claims' findings of fact.
6
Those steps consisted of undertaking initial action toward financing the project, attempting to obtain the regulatory approvals required under the terms of the contract, taking options on land which was to be the site of the plant, and letting some of the basic construction contracts.
7
OVEC stands for the Ohio Valley Electric Corporation, which is a generating company composed of several private utility companies. In 1952, OVEC had contracted with the AEC to supply it with power at its Portsmouth, Ohio, installation. The Portsmouth project required a large amount of financing, and First Boston had been retained to handle the arrangements. First Boston was still engaged in its Portsmouth undertaking when Wenzell first came to the Bureau of the Budget in 1953.
8
In our rehearsal of the facts, we have necessarily omitted mention of numerous inconsequential meetings and telephone conversations between Wenzell and representatives of the Government and of the sponsors. We make this fact known only to complete the picture and to indicate that Wenzell was continuously involved in the negotiations during his tenure with the Bureau of the Budget. It should also be noted that Hughes was aware of most of Wenzell's activities, both those which we have described and those which we have not mentioned in detail.
9
101 Cong.Rec. 1714.
10
The other statutes are 18 U.S.C. §§ 216, 281, 283, 284, 1914, 18 U.S.C.A. §§ 216, 281, 283, 284, 1914.
11
Act of March 2, 1863, c. 67, § 8, 12 Stat. 696, 698. See H.R.Rep. No. 2, 37th Cong., 2d Sess., Government Contracts and Appendix.
12
R.S. § 1783; Act of March 4, 1909, c. 321, § 41, 35 Stat. 1097; Act of June 25, 1948, 62 Stat. 703.
13
See, e.g., 18 U.S.C. §§ 431—433, 18 U.S. §§ 431—433; 15 U.S.C. §§ 1, 13, 13c, 15 U.S.C.A. §§ 1, 13, 13c.
14
The preventive nature of conflict-of-interest statutes was ably described by the Court of Claims in Michigan Steel Box Co. v. United States, 49 Ct.Cl. 421, 439:
'The reason of the rule inhibiting a party who occupies confidential and fiduciary relations toward another from assuming antagonistic positions to his principal in matters involving the subject matter of the trust is sometimes said to rest in a sound public policy, but it also is justified in a recognition of the authoritative declaration that no man can serve two masters; and considering that human nature must be dealt with, the rule does not stop with actual violations of such trust relations, but includes within its purpose the removal of any temptation to violate them. . . .'
We have taken a similar view of the evils which flow from contingent fee arrangements for obtaining government contracts. In Hazelton v. Sheckells, 202 U.S. 71, 79, 26 S.Ct. 567, 568, 50 L.Ed. 939, we said: 'The objection to them rests in their tendency, not in what was done in the particular case. * * * The court will not inquire what was done. If that should be improper it probably would be hidden, and would not appear.' See also Oscanyan v. Arms Co., 103 U.S. 261, 275, 26 L.Ed. 539; Tool Co. v. Norris, 2 Wall. 45, 55, 69 U.S. 45, 55, 17 L.Ed. 868.
15
Irregular employees of the Government, whether compensated or not, have always been considered by the Executive Branch to be subject to the conflict-of-interest statutes. See, e.g., 40 Op.Atty.Gen. 168, 289, 294; 41 Op.Atty.Gen.No.64.
16
That Wenzell, on at least two occasions, brought senior officers from First Boston with him to negotiating sessions is further evidence of the fact that Wenzell frequently attempted to place First Boston in a position of predominance.
17
The fact that First Boston subsequently decided not to accept a fee is irrelevant to a determination of whether Wenzell violated the statute. First Boston's decision was not reached until many months after Wenzell had terminated his connection with the Bureau of the Budget. At the time Wenzell represented the Government, which is the period crucial to our determination, First Boston fully expected to accept a fee for services which it might render, and Wenzell had every reason to expect that he would benefit from any profits that First Boston might make. It was this expectation that infected the transaction, and the taint cannot be removed by a subsequent, unilateral decision on the part of First Boston to forego its fee.
18
The other cases relied upon by the respondent, United States v. Chemical Foundation, 272 U.S. 1, 47 S.Ct., 1, 71 L.Ed. 131; Architects Building Corp. v. United States, 98 Ct.Cl. 368, are also distinguishable on the ground that the activities of the government agents there involved were found by the courts not to constitute a violation of any conflict-of-interest statute. Therefore, since the contracts in those cases had not emanated from an illegal transaction, they were enforced.
19
We do not think that the result in this case is harsh because the sponsors were not as naive regarding the conflict-of-interest question as the Court of Claims implied. They recognized Wenzell's conflict of interest almost from the outset of the negotiations. However, instead of refusing to negotiate with Wenzell or of making it clear both to Wenzell and to all the other interested parties that if Wenzell participated in the negotiations, First Boston would under no circumstances be considered as the financing agent for the project, the sponsors dealt almost exclusively with Wenzell and continually fortified his belief that First Boston would be selected as the financing agent should a contract result from the negotiations.
20
There is nothing in the findings to show whether the contract here involved was favorable or unfavorable to the Government.
21
It should be remembered that the contracting agency, the AEC, had virtually no knowledge of the activities which Wenzell was conducting on behalf of the sponsors during his tenure with the Bureau of the Budget. It may well be that had the AEC known of these facts, it would have insisted that Wenzell be precluded from representing the Government, or, at least, would have scrutinized his recommendations more closely.
22
The respondent also contends that even if the contract is not enforceable, a recovery quantum valebat should be decreed. However, such a remedy is appropriate only where one party to a transaction has received and retained tangible benefits from the other party. See Crocker v. United States, 240 U.S. 74, 81—82, 36 S.Ct. 245, 248, 60 L.Ed. 533. Since the Government has received nothing from the respondent, no recovery quantum valebat is in order.
1
Wenzell's superiors in the Government were fully aware of his connection with First Boston and of the possibility that First Boston might later figure in the financing of the contemplated private power project; and with such knowledge they affirmatively acquiesced, and indeed encouraged, his continuing in his consultative role. The power contract, which the Government recognizes was the product of hard bargaining and implicitly concedes was fair, was eventually terminated only because the Government had lost interest in it. The defense of illegality was raised for the first time in this suit, and only after a political storm had arisen over the public versus private power issue. Nevertheless I think the Court is right in considering that all these factors are rendered immaterial by the statute in question.
2
'§ 434. Interested persons acting as Government agents.
'Whoever, being an officer, agent or member of, or directly or indirectly interested in the pecuniary profits or contracts of any corporation, joint-stock company, or association, or of any firm or partnership, or other business entity, is employed or acts as an officer or agent of the United States for the transaction of business with such business entity, shall be fined not more than $2,000 or imprisoned not more than two years, or both.'
3
Whether absence of knowledge of such an arrangement on the part of the individual concerned would be a defense is a matter not presented by this case.
| 78
|
364 U.S. 631
81 S.Ct. 358
5 L.Ed.2d 340
Maurice E. TRAVIS, Petitioner,v.UNITED STATES.
Nos. 10, 3, 71.
Argued Dec. 13, 1960.
Decided Jan. 16, 1961.
Mr. Telford Taylor, New York City, for petitioner in each case.
Mr. George B. Searls, Washington, D.C., for respondent in each case.
Mr. Justice DOUGLAS delivered the opinion of the Court.
1
In this case1 petitioner was charged on four counts of an indictment with the making and filing of false non-Communist affidavits required by § 9(h)2 of the National Labor Relations Act, as amended by the TaftHartley Act, 61 Stat. 136, 146, and further amended by the Act of Oct. 22, 1951, § 1(d), 65 Stat. 601, 602, 29 U.S.C.A. § 159(h). The indictment charged that the affidavits were false writings or documents made and executed in Colorado and filed in Washington, D.C., with the National Labor Relations Board.
2
Petitioner was convicted and on appeal the judgment of conviction was reversed for a new trial. 10 Cir., 247 F.2d 130. Petitioner was tried a second time and again convicted. This time the judgment was affirmed on appeal, one judge dissenting. 10 Cir., 269 F.2d 928. The case is here on a writ of certiorari. 363 U.S. 801, 80 S.Ct. 1235, 4 L.Ed.2d 1146.
3
Before the first trial, petitioner moved to dismiss the indictment on the ground that venue was improperly laid in Colorado. The District Court denied the motion. Although the Court of Appeals reversed on another ground on petitioner's first appeal, it specifically approved the laying of venue in Colorado (247 F.2d 130, 133—134) recognizing that its ruling was in conflict with that in United States v. Valenti, 3 Cir., 207 F.2d 242. It is solely to this issue that we address ourselves.
4
It is agreed that the affidavits were executed by petitioner as a union officer in Colorado and mailed there to the Board in Washington, D.C., where they were received and filed.3 The prosecution contends—and it was held below—that the offense was begun in Colorado and completed in the District of Columbia. In that view venue was properly laid in Colorado by virtue of 18 U.S.C. § 3237(a), 18 U.S.C.A. § 3237(a) which provides:
5
'Except as otherwise expressly provided by enactment of Congress, any offense against the United States begun in one district and completed in another * * * may be inquired of and prosecuted in any district in which such offense was begun * * * or completed.'
6
We start with the provision of Art. III, § 2 of the Constitution that criminal trials 'shall be held in the State where the said crimes shall have been committed,' a safeguard reinforced by the command of the Sixth Amendment that the criminal trial shall be before an impartial jury of 'the State and district wherein the crime shall have been committed.' We start also with the assumption that Colorado, the residence of petitioner, might offer conveniences and advantages to him which a trial in the District of Columbia might lack. We are also aware that venue provisions in Acts of Congress should not be so freely construed as to give the Government the choice of 'a tribunal favorable' to it. United States v. Johnson, 323 U.S. 273, 275, 65 S.Ct. 249, 250, 89 L.Ed. 236. We therefore begin our inquiry from the premise that questions of venue are more than matters of mere procedure. 'They raise deep issues of public policy in the light of which legislation must be construed.' United States v. Johnson, supra, 323 U.S. at page 276, 65 S.Ct. at page 251.
7
Where various duties are imposed, some to be performed at a distant place, others at home, the Court has allowed the prosecution to fix the former as the venue of trial. Johnston v. United States, 351 U.S. 215, 222, 76 S.Ct. 739, 743, 100 L.Ed.2d 1097. The use of agencies of interstate commerce enables Congress to place venue in any district where the particular agency was used. Armour Packing Co. v. United States, 209 U.S. 56, 28 S.Ct. 428, 52 L.Ed. 681. 'The constitutional requirement is as to the locality of the offense, and not the personal presence of the offender.' Id., 209 U.S. at page 76, 28 S.Ct. at page 433. Where the language of the Act defining venue has been construed to mean that Congress created a continuing offense, it is held, for venue purposes, to have been committed wherever the wrongdoer roamed. United States v. Cores, 356 U.S. 405, 78 S.Ct. 875, 2 L.Ed.2d 873. And see Brown v. Elliott, 225 U.S. 392, 32 S.Ct. 812, 56 L.Ed. 1136. The decisions are discrete, each looking to the nature of the crime charged. Thus, while the use of the mails might be thought to allow venue to be laid either at the sending or receiving end, the trial was recently restricted to the district of the sender, in light of the constitutional provisions already mentioned and the phrasing of a particular criminal statute. United States v. Johnson, supra, 323 U.S. 277—278, 65 S.Ct. 251. Where Congress is not explicit, 'the locus delicti must be determined from the nature of the crime alleged and the location of the act or acts constituting it.' United States v. Anderson, 328 U.S. 699, 703, 66 S.Ct. 1313, 1216, 90 L.Ed. 1529.
8
Section 9(h) of the National Labor Relations Act,4 with which we are concerned, did not require union officers to file non-Communist affidavits. If it had, the whole process of filing, including the use of the mails, might logically be construed to constitute the offense. But this statutory design is different. It requires that the Board shall make no investigation nor issue any complaint in the matters described in § 9(h) 'unless there is on file with the Board' a non-Communist affidavit of each union officer. The filings are conditions precedent to a union's use of the Board's procedures. Leedom v. International Union, 352 U.S. 145, 148, 77 S.Ct. 154, 156, 1 L.Ed.2d 201. The false statement statute,5 under which the prosecution is brought, penalizes him who knowingly makes any 'false' statement 'in any matter within the jurisdiction of any department or agency of the United States.' There would seem to be no offense, unless petitioner completed the filing in the District of Columbia. The statute demanded that the affidavits be on file with the Board before it could extend help to the union; the forms prescribed by the Board required the filing in the District of Columbia; the indictment charged that petitioner filed the affidavits there. The words of the Act—'unless there is on file with the Board'—suggest to us that the filing must be completed before there is a 'matter within the jurisdiction' of the Board within the meaning of the false statement statute.6 When § 9(h) provides the criminal penalty,7 it makes the penal provisions applicable 'to such affidavits,' viz., to those 'on file with the Board.'
9
The Government admits that the filing is necessary to the 'occurrence' of the offense but it argues, that the offense has its 'beginning' in Colorado, because it was there that 'the defendant had irrevocably set in motion and placed beyond his control the train of events which would normally result (and here did result) in the consummation of the offense.' We do not agree with this analysis. Venue should not be made to depend on the chance use of the mails, when Congress has so carefully indicated the locus of the crime. After mailing, the affidavit might have been lost; petitioner himself might have recalled it.8 Multiple venue in general requires crimes consisting of 'distinct parts' or involving 'a continuously moving act.' United States v. Lombardo, 241 U.S. 73, 77, 36 S.Ct. 508, 509, 510, 60 L.Ed. 897. When a place is explicitly designated where a paper must be filed, a prosecution for failure to file lies only at that place. Id., 241 U.S. at pages 76—78, 36 S.Ct. at page 509. The theory of that case was followed in United States v. Valenti, supra, where Judge Maris stated that no false statement has been made within the jurisdiction of the Board 'until the affidavit through its filing has become the basis for action by the Board.' Id., 207 F.2d at page 244.
10
We think that is the correct view when 18 U.S.C. § 3237, 18 U.S.C.A. § 3237, is read in light of the constitutional requirements and the explicit provision of § 9(h). The locus of the offense has been carefully specified; and only the single act of having a false statement at a specified place is penalized. The rationale of United States v. Lombardo, supra, a case involving a failure to file, is therefore equally applicable here. We conclude that venue lay only in the District of Columbia.
11
Petitioner also brought here two companion cases arising out of the same trial. In No. 3 he asked for a new trial on the ground of newly discovered evidence. In No. 71 he moved a second time for a new trial on the ground of newly discovered evidence. We granted the petitioners in these cases as they were protective of petitioner's rights in the main litigation. 363 U.S. 801, 80 S.Ct. 1235, 4 L.Ed.2d 1146. But since our holding in the main case is that venue was improperly laid in Colorado, the judgment of conviction must be set aside. Accordingly the orders in Nos. 3 and 71 denying new trials have become moot and are vacated in the customary manner. In No. 10 the judgment is reversed.
12
Reversed.
13
Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER and Mr. Justice CLARK join, dissenting.
14
Title 18 U.S.C. § 3237(a), 18 U.S.C.A. § 3237(a) provides in pertinent part:
15
'Except as otherwise expressly provided by enactment of Congress, any offense against the United States begun in one district and completed in another * * * may be inquired of and prosecuted in any district in which such offense was begun * * * or completed.' (Emphasis added.)
16
On my view of the offense with which Travis is charged, I think that under this section the Government was entitled to proceed either in Colorado, where this affidavit was made, or in the District of Columbia, where the affidavit was filed, and therefore dissent from the Court's holding that venue was improperly laid in Colorado.
17
Section 9(h) of the National Labor Relations Act, as amended by the Taft-Hartley Act,1 61 Stat. 136, 146, provided that the National Labor Relations Board shall neither make an investigation nor issue any complaint on behalf of a labor union unless there is on file with it a non-Communist affidavit of the kind here in question. 18 U.S.C. § 1001, 18 U.S.C.A. § 10012 is specifically made applicable to such affidavits. That section of the criminal code makes it an offense, in any matter within the jurisdiction of any department or agency of the United States, to falsify a material fact, make a false statement, or make or use any false writing or document. The elements of the crime here involved, therefore, are set out in 18 U.S.C. § 1001, 18 U.S.C.A. § 1001, and what § 9(h) does is simply to supply the 'jurisdiction of * * * (an) agency of the United States' required by § 1001.
18
If this crime may properly be viewed as having been begun in the district of Colorado and completed in the district of the District of Columbia, then venue may be laid in either district under 18 U.S.C. § 3237(a), 18 U.S.C.A. § 3237(a). Whether that is the proper view of this offense is an issue on which the authorities in this Court are at best inconclusive. In In re Palliser, 136 U.S. 257, 10 S.Ct. 1034, 34 L.Ed. 514, the Court held that where the defendant had mailed in New York to a postmaster in Connecticut a letter which constituted a prohibited tender of a contract with intent to induce the postmaster to violate his lawful duty, venue could properly be laid in the district of Connecticut. The Court expressly left open the question of whether venue might also have been laid in New York, 136 U.S., at pages 267—268, 10 S.Ct. at page 1037. To the same effect is Burton v. United States, 202 U.S. 344, 26 S.Ct. 688, 50 L.Ed. 1057. United States v. Lombardo, 241 U.S. 73, 36 S.Ct. 508, 60 L.Ed. 897, which the Court considers particularly significant, is not controlling, since in that case the offense charged was the failure to file with the Commissioner General of Immigration certain information concerning an alien woman whom the defendant was harboring for purposes of prostitution. In such a charge it is difficult to see how the defendant does anything at all except at the place where he fails to file. But cf. United States v. Cores, 356 U.S. 405, 78 S.Ct. 875, 2 L.Ed.2d 873. In contrast, the false affidavit in the present case first came into existence in Colorado, having been made and sworn to there.
19
Nor do the opinions in the lower courts establish anything like a clear line of authority from which it would be unwise now to depart. If anything, I think, they indicate a contrary conclusion to that now reached by the Court. Compare Henslee v. United States, 5 Cir., 262 F.2d 750; United States v. Miller, 2 Cir., 246 F.2d 486; De Rosier v. United States, 5 Cir., 218 F.2d 420; United States v. Downey, D.C., 257 F. 366, and Bridgeman v. United States, 9 Cir., 140 F. 577, with United States v. Valenti, 3 Cir., 207 F.2d 242.
20
In these circumstances, the proper course to follow appears to me to be to determine the appropriate venue 'from the nature of the crime alleged and the location of the act or acts constituting it,' United States v. Anderson, 328 U.S. 699, 703, 66 S.Ct. 1213, 1216, 90 L.Ed. 1529, and that determination should take into account that
21
'* * * The provision for trial in the vicinity of the crime is a safeguard against the unfairness and hardship involved when an accused is prosecuted in a remote place. Provided its language permits, the Act in question should be given that construction which will respect such considerations.' United States v. Cores, 356 U.S. 405, 407, 78 S.Ct. 875, 877, 2 L.Ed.2d 873.
22
In this kind of case, prosecution in the district in which the affidavit was executed, most often I would suppose the place where the union offices are located, is more likely to respect the basic policy of the Sixth Amendment than would a prosecution in the district where the affidavit was filed. The witnesses and relevant circumstances surrounding the contested issues in such cases more probably will be found in the district of the execution of the affidavit than at the place of filing which, as in this instance will often be for the defendant 'a remote place,' United States v. Cores, supra—that is the District of Columbia where the headquarters of the National Labor Relations Board are located in the case of officers of international unions, or elsewhere throughout the country where the Board has branch offices in the case of local union officers, 29 CFR § 101.3.
23
This is not to say that venue must be limited to the place of execution of the affidavit, but only that there is no lack of consonance with the underlying policy of the Sixth Amendment in permitting venue to be laid there if the elements of the crime allow. United States v. Anderson, supra. In holding that the crime for which this petitioner was prosecuted does not allow venue to be laid in the district of the making of the affidavit, the Court considers the essence of the crime to be the filing of the affidavit, and until that is accomplished it holds that the crime is not even begun. But since it is 18 U.S.C. § 1001, 18 U.S.C.A. § 1001 which defines the offense, § 9(h) only supplying the requisite jurisdiction of the agency of the United States, and since by § 1001 the offense consists of falsifying a material fact, making a false statement, or making or using any false writing or document, it seems eminently reasonable to consider that the offense is at least definitively begun at the place where the false affidavit is actually made, sworn and subscribed. Cf. the Henslee, Miller, De Rosier, Downey and Bridgeman cases, supra.
24
It is of course true that the offense is not completed until the affidavit is filed with the Board, but I do not think it adds anything to say, as the Court does, that until such time as the affidavit is filed with the Board there is no matter 'within the jurisdiction of any department or agency of the United States.' The fact that the filing completes the offense by giving the Board jurisdiction over the matter does not, in my view, detract from the conclusion that the offense was begun when and where the affidavit was executed. Indeed this would seem to be the very type of situation contemplated by 18 U.S.C. § 3237(a), 18 U.S.C.A. § 3237(a).
25
Since I consider it would be inappropriate for me, in dissent, to discuss issues which the Court does not reach, I refrain from considering the other grounds for reversal urged by the petitioner.
1
There are two companion cases, No. 3, Travis v. United States, and No. 71, Travis v. United States, in which we also granted certiorari and which present phases of the main case. We discuss them near the close of the opinion.
2
This section, which was repealed by § 201(d) of the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519, 525, provided:
'No investigation shall be made by the Board of any question affecting commerce concerning the representation of employees, raised by a labor organization under subsection (c) of this section, and no complaint shall be issued pursuant to a charge made by a labor organization under subsection (b) of section 10, unless there is on file with the Board an affidavit executed contemporaneously or within the preceding twelve-month period by each officer of such labor organization and the officers of any national or international labor organization of which it is an affiliate or constituent unit that he is not a member of the Communist Party or affiliated with such party, and that he does not believe in, and is not a member of or supports any organization that believes in or teaches, the overthrow of the United States Government by force or by any illegal or unconstitutional methods. The provisions of section 35 A of the Criminal Code shall be applicable in respect to such affidavits.' (Italics added.)
Section 35(A) of the Criminal Code was repealed by § 21 of the Act of June 25, 1948, 62 Stat. 683, 862, and is now covered, so far as we are now concerned, by 18 U.S.C. § 1001, 18 U.S.C.A. § 1001, which provides:
'Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.' (Italics added.)
3
Under the regulations in force at the time of filing, petitioner's affidavit was required to be on file with the General Counsel of the National Labor Relations Board in Washington, D.C., 29 CFR § 101.3(b) (since deleted, see 24 Fed.Reg. 7501 (Sept. 17, 1959)).
4
See note 2, supra.
5
See 18 U.S.C. § 1001, 18 U.S.C.A. § 1001, note 2, supra.
6
See 18 U.S.C. § 1001, 18 U.S.C.A. § 1001, note 2, supra.
7
See note 2, supra.
8
39 CFR § 43.6(a) provides: 'Mail deposited in a post office may be recalled by the sender, by the parent or guardian of a minor child, or by the guardian of a person of unsound mind.'
1
'No investigation shall be made by the Board of any question effecting commerce concerning the representation of employees, raised by a labor organization under subsection (c) of this section, and no complaint shall be issued pursuant to a charge made by a labor organization under subsection (b) of section 160 of this title, unless there is on file with the Board an affidavit executed contemporaneously or within the preceding twelve-month period by each officer of such labor organization and the officers of any national or international labor organization of which it is an affiliate or constituent unit that he is not a member of the Communist Party or affiliated with such party, and that he does not believe in, and is not a member of or supports any organization that believes in or teaches, the overthrow of the United States Government by force or by any illegal or unconstitutional methods. The provisions of (18 U.S.C. § 1001, 18 U.S.C.A. § 1001) shall be applicable in respect to such affidavits.' 29 U.S.C. § 159(h), 29 U.S.C.A. § 159(h), repealed by the Labor-Management Reporting and Disclosure Act of 1959, 73 Stat. 519, § 201(d).
2
'Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years, or both.'
| 23
|
364 U.S. 661
81 S.Ct. 390
5 L.Ed.2d 362
Vernon KIMBROUGH, petitioner,v.UNITED STATES.
No. 128.
Supreme Court of the United States
January 16, 1961
Rehearing Denied Feb. 20, 1961.
See 365 U.S. 825, 81 S.Ct. 688.
Mr. Edward L. Barrett, Jr., Oakland, Cal., for petitioner.
Mr. Bruce J. Terris, Washington, D.C., for respondent.
On Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit.
PER CURIAM.
1
We brought this case here to consider whether cumulative sentences can validly be imposed upon conviction under the National Motor Vehicle Theft Act, 18 U.S.C.A. §§ 10, 2311-2313, for transporting a stolen automobile in interstate commerce and for receiving, concealing, and storing the same automobile, in a continuing criminal transaction. After oral argument and a more thorough consideration of the record than was afforded when the petition for certiorari was granted, we have concluded that this question is not presented with sufficient clarity in this case. Accordingly, the writ is dismissed.
| 89
|
364 U.S. 656
81 S.Ct. 365
5 L.Ed.2d 358
RADIANT BURNERS, INC., Petitioner,v.PEOPLES GAS LIGHT AND COKE COMPANY et al.
No. 73.
Argued Dec. 7, 1960.
Decided Jan. 16, 1961.
Mr. Richard F. Levy, for petitioner.
Mr. Horace R. Lamb, Washington, D.C., and Clarence H. Ross, Chicago, Ill., for respondents.
Mr. Charles H. Weston, Washington, D.C., for the United States, as amicus curiae, by special leave of Court.
PER CURIAM.
1
The question here is whether petitioner's complaint stated a claim upon which relief could be granted. Petitioner is engaged at Lombard, Illinois, in the manufacture and sale in interstate commerce of a ceramic gas burner, known as the 'Radiant Burner,' for the heating of houses and other buildings. Claiming that American Gas Association, Inc. (AGA), a membership corporation doing business in the Northern District of Illinois and in other States, and 10 of its numerous members1 who also are doing business in the Northern District of Illinois, combined and conspired to restrain interstate commerce in the manufacture, sale and use of gas burners in violation of § 1 of the Sherman Act, petitioner brought this action against those parties for treble damages and an injunction in the United States District Court for the Northern District of Illinois.2
2
The complaint included the following allegations: American Gas Association operates testing laboratories wherein it purports to determine the safety, utility and durability of gas burners. It has adopted a 'seal of approval' which it affixes on such gas burners as it determines have passed its tests. Its tests are not based on 'objective standards,' but are influenced by respondents, some of whom are in competition with petitioner, and thus its determinations can be made 'arbitrarily and capriciously.' Petitioner has twice submitted its Radiant Burner to AGA for approval but it has not been approved, although it is safer and more efficient than, and just as durable as, gas burners which AGA has approved. '(B)ecause AGA and its Utility members, including Peoples and Northern, effectuate the plan and purpose of the unlawful combination and conspiracy alleged herein by * * * refusing to provide gas for use in the plaintiff's Radiant Burner(s) * * * which are not approved by AGA,' petitioner's gas burners have been effectively excluded from the market, as its potential customers will not buy gas burners for which they cannot obtain gas, and in consequence petitioner has suffered and is suffering the loss of substantial profits.
3
Respondents moved to dismiss for failure of the complaint to state a claim upon which relief could be granted. The District Court granted the motions, dismissed the complaint and entered judgment for respondents. The Court of Appeals for the Seventh Circuit affirmed. 273 F.2d 196. It stated that 'No boycott, conspiracy to boycott or other form of per se violation is established by the facts alleged' (id., at page 199), and that '(i)n the absence of a per se violation the Sherman Act protects the individual injured competitor and affords him relief, but only under circumstances where there is such general injury to the competitive process that the public at large suffers economic harm.' Id., at page 200. It held that public injury was not alleged since '(t)he allegations of (the) plaintiff's complaint fail to establish that there has been any appreciable lessening in the sale of conversion gas burners or gas furnaces or that the public has been deprived of a product of overall superiority.' Id., at page 200. Because of petitioner's claim that this holding is contrary to controlling decisions of this Court, we granted certiorari. 363 U.S. 809, 80 S.Ct. 1249, 41 L.Ed.2d 1152.
4
We think the decision of the Court of Appeals does not accord with our recent decision in Klors, Inc. v. Broadway-Hale Stores, 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741. The allegation in the complaint that 'AGA and its Utility members, including Peoples and Northern, effectuate the plan and purpose of the unlawful combination and conspiracy * * * by * * * refusing to provide gas for use in the plaintiff's Radiant Burner(s)' because they 'are not approved by AGA' clearly shows 'one type of trade restraint and public harm the Sherman Act forbids * * *.' Id., 359 U.S. at page 210, 79 S.Ct. at page 708. It is obvious that petitioner cannot sell its gas burners, whatever may be their virtues, if, because of the alleged conspiracy, the purchasers cannot buy gas for use in those burners. The conspiratorial refusal 'to provide gas for use in the plaintiff's Radiant Burner(s) (because they) are not approved by AGA' therefore falls within one of the 'classes of restraints which from their 'nature or character' (are) unduly restrictive, and hence forbidden by both the common law and the statute. * * * As to these classes of restraints * * * Congress (has) determined its own criteria of public harm and it (is) not for the courts to decide whether in an individual case injury (has) actually occurred.' Id., 359 U.S. at page 211, 79 S.Ct. at page 709. The alleged conspiratorial refusal to provide gas for use in plaintiff's Radiant Burners 'interferes with the natural flow of interstate commerce (and) clearly has, by its 'nature' and 'character', a 'monopolistic tendency.' As such it is not to be tolerated merely because the victim is just one (manufacturer) whose business is so small that his destruction makes little difference to the economy.' Id., 359 U.S. at page 213, 79 S.Ct. at page 710.
5
By § 1, Congress has made illegal: 'Every contract, combination * * * or conspiracy, in restraint of trade or commerce among the several States * * *.' Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 31 S.Ct. 502, 515, 55 L.Ed. 619. Congress having thus prescribed the criteria of the prohibitions, the courts may not expand them. Therefore, to state a claim upon which relief can be granted under that section, allegations adequate to show a violation and, in a private treble damage action, that plaintiff was damaged thereby are all the law requires.
6
The judgment of the Court of Appeals is reversed and the cause is remanded to the District Court for further proceedings not inconsistent with this opinion.
7
Reversed.
1
Of the 10 members of AGA who were joined with it as defendants, two are public utilities engaged in the distribution of gas in the Northern District of Illinois, namely, The Peoples Gas Light & Coke Company and Northern Illinois Gas Company; two are pipeline companies engaged in transporting natural gas in interstate commerce into the Northern District of Illinois, namely, Natural Gas Pipeline of America and Texas-Illinois Natural Gas Co.; the other six are manufacturers of gas burners, namely, Autogas Company, Crown Stove Works, Florence Stove Company, Gas Appliance Service, Inc., Norge Sales Corporation, and Sellers Engineering Company.
2
Section 1 of the Sherman Act provides: 'Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal * * *.' 15 U.S.C.A. § 1.
Section 4 of the Clayton Act, 38 Stat. 731, 15 U.S.C. § 15, 15 U.S.C.A. § 15, states, 'Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor * * * and shall recover threefold the damages by him sustained * * *.'
Section 16 of the Clayton Act, 38 Stat. 737, 15 U.S.C. § 26, 15 U.S.C.A. § 26, states, 'Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a violation of the antitrust laws * * *.'
| 78
|
364 U.S. 642
81 S.Ct. 368
5 L.Ed.2d 349
SYSTEM FEDERATION NO. 91, RAILWAY EMPLOYES' DEPARTMENT, AFL-CIO, et al., Petitioners,v.O. V. WRIGHT et al.
No. 48.
Argued Dec. 5, 1960.
Decided Jan. 16, 1961.
Mr. Richard R. Lyman, Toledo, Ohio, for petitioners.
Mr. Marshall P. Eldred, Louisville, Ky., for respondents.
Messrs. John P. Sandidge, Woodward, Hobson & Fulton, H. G. Breetz, W. L. Grubbs, M. D. Jones and Joseph L. Lenihan, Louisville, Ky., for Louisville & Nashville R. Co.
Mr. Justice HARLAN delivered the opinion of the Court.
1
By a complaint filed on July 16, 1945, in the United States District Court for the Western District of Kentucky, 28 nonunion employees of the Louisville and Nashville Railroad began an action for declaratory relief, an injunction, and damages against the railroad and a number of unions representing its employees. Particularly relevant to the complaint were those provisions of the fourth and fifth paragraphs of § 2 of the Railway Labor Act1 which make it
2
'unlawful for any carrier to interfere in any way with the organization of its employees, or to use the funds of the carrier in maintaining or assisting or contributing to any labor organization, labor representative, or other agency of collective bargaining, or in performing any work therefor, or to influence or coerce employees in an effort to induce them to join or remain or not to join or remain members of any labor organization * * *'
3
and which forbid any carrier from requiring 'any person seeking employment to sign any contract or agreement promising to join * * * a labor organization * * *.' Also relied upon was the duty of the exclusive bargaining agent to represent fairly and without discrimination all members of the class represented. See Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173. The factual allegations set forth a pattern of discriminations effected by the railroad and the defendant unions against nonunion employees.
4
By a settlement agreement dated December 1, 1945, the 28 plaintiffs released the railroad and union defendants from all claims2 or actions then accrued 'in consideration of the sum of $5,000.00 this day paid to the undersigned * * * and the consent of said defendants to the entry of a decree in said action, a copy of which is attached hereto * * *.' The attached decree was adopted by the District Court on December 7, 1945. After detailing and then enjoining a number of specific discriminations on the basis of union status, the decree provided that the defendants
5
'are further enjoined, in the application of the provisions of the regularly adopted bargaining agreements in effect between the defendant Railroad and the defendant Unions, or that may be hereafter in effect between the defendant Railroad and the defendant Unions in accordance with the provisions of the Railway Labor Act, from discriminating against the plaintiffs and the classes represented by them in this action by reason of or on account of the refusal of said employes to join or retain their membership in any of defendant labor organizations, or any labor organization * * *.'
6
The District Court, 165 F.Supp. 443, 445, retained jurisdiction over the matter 'for the purpose of entering such further orders as may be deemed necessary or proper.'
7
In 1951 the Railway Labor Act was amended to permit, under certain circumstances, a contract requiring a union shop.3 In order to avail themselves of the newly granted statutory privilege, in 1957 the petitioners filed in the District Court a motion under Rule 60(b) of the Federal Rules of Civil Procedure, 28 U.S.C.A.,4 asking for a sufficient modification of the consent decree to make clear that it
8
'shall have no prospective application to prohibit defendants, or any of them, from negotiating, entering into, or applying and enforcing, any agreement or agreements authorized by Section 2, Eleventh, of the Railway Labor Act, as amended January 10, 1951.'
9
The motion, which was opposed by the railroad and its suing employees (respondents here), was denied after a hearing at which was presented unrebutted evidence of assaults, destruction of property, and various other malicious acts directed by members of the union at any employee (union or nonunion) who had worked during a 58-day strike in 1955. The District Court acknowledged its authority to modify the consent decree but declined to do so, primarily out of regard for the fact that the unions (petitioners here) had consented by the decree not to have a union shop then or in the future, an undertaking which the District Court considered was not unlawful either before or after the 1951 amendments.5 The court stated:
10
'It is to be remembered that the provisions of the Railway Labor Act made illegal a union shop in 1945, when the injunction was agreed upon. Hence, it was then unnecessary for the railroad and the unions to agree, as they did, that the non-union members should not then be required to join or maintain membership in any of their craft unions as a condition precedent to employment. The law so prohibited, Section 152, Fourth and Fifth, Title 45, United States Code Annotated, Railway Labor Act. The railroad and unions went further to provide by their agreement that no such requirement of union membership should thereafter be in effect in any bargaining agreement in accordance with the provisions of the Railway Labor Act. The 1951 amendment to the Act did no more than make negotiations for a union shop permissive, Railway Employees' Dept. v. Hanson, supra. The amendment did not nullify the agreement or the injunction. It did not prohibit an agreement between the railroad and the unions that a union shop should not exist. Hence, the Court leaves the parties as they agreed to be and to remain.' 165 F.Supp. 443, 449.
11
Though making it clear that evidence of continued union hostility against nonunion employees was not decisive, the District Court gave some weight to the administrative difficulty of preventing unlawful discriminations against nonunion employees that might be facilitated if there were a union shop. The Sixth Circuit affirmed 'for the reasons set forth in the opinion of Chief Judge Shelbourne' in the District Court. 272 F.2d 56, 58. We granted certiorari because of the importance of the issues involved. 362 U.S. 948, 80 S.Ct. 262, 4 L.Ed.2d 867.
12
At the outset it should be noted that the power of the District Court to modify this decree is not drawn in question. That proposition indeed could not well be disputed. See State of Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. 421, 15 L.Ed. 435; United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999; Chrysler Corp. v. United States, 316 U.S. 556, 62 S.Ct. 1146, 86 L.Ed. 1668. In the Swift case, Mr. Justice Cardozo put the matter thus, 286 U.S. at page 114, 52 S.Ct. at page 462:
13
'We are not doubtful of the power of a court of equity to modify an injunction in adaptation to changed conditions though it was entered by consent. * * * Power to modify the decree was reserved by its very terms, and so from the beginning went hand in hand with its restraints. If the reservation had been omitted, power there still would be by force of principles inherent in the jurisdiction of the chancery. A continuing decree of injunction directed to events to come is subject always to adaptation as events may shape the need. Ladner v. Siegel, 298 Pa. 487, 494, 495, 148 A. 699, 68 A.L.R. 1172.'
14
There is also no dispute but that a sound judicial discretion may call for the modification of the terms of an injunctive decree if the circumstances, whether of law or fact, obtaining at the time of its issuance have changed, or new ones have since arisen. The source of the power to modify is of course the fact that an injunction often requires continuing supervision by the issuing court and always a continuing willingness to apply its powers and processes on behalf of the party who obtained that equitable relief. Firmness and stability must no doubt be attributed to continuing injunctive relief based on adjudicated facts and law, and neither the plaintiff nor the court should be subjected to the unnecessary burden of re-establishing what has once been decided. Nevertheless the court cannot be required to disregard significant changes in law or facts if it is 'satisfied that what it was been doing has been turned through changing circumstances into an instrument of wrong.' United States v. Swift & Co., supra, 286 U.S. at pages 114—115, 52 S.Ct. at page 462. A balance must thus be struck between the policies of res judicata and the right of the court to apply modified measures to changed circumstances.
15
Where there is such a balance of imponderable there must be wide discretion in the District Court. But discretion is never without limits and these limits are often far clearer to the reviewing court when the new circumstances involve a change in law rather than facts. When the decree in this case was originally made, union shop agreements were prohibited by the Railway Labor Act and thus constituted in themselves a form of statutorily forbidden discrimination. Congress has since, in the clearest terms, legislated that bargaining for and the existence of a union shop contract, satisfying the conditions provided in § 2 Eleventh of the Railway Labor Act, are not forbidden discriminations by union or employer. Congress has therefore determined that whatever ways such a union shop arrangement facilitates other, unauthorized discriminations must be borne as inescapable incidents of a legislatively approved contract term.
16
Had the 1945 decree simply represented relief awarded by the District Court after a trial of the action instituted by petitioners, there could be little doubt but that, faced with the 1951 amendment to the Railway Labor Act, it would have been improvident for the court to continue in effect this provision of the injunction prohibiting a union shop agreement as being unlawful per se, or its use as an instrument to effectuate other statutorily forbidden discriminations. That provision was well enough under the earlier Railway Labor Act, but to continue it after the 1951 amendment would be to render protection in no way authorized by the needs of safeguarding statutory rights at the expense of a privilege denied and deniable to no other union. This conclusion would not be affected by the circumstance, which the District Court here found, that the unions' hostility to nonunion employees still continued, for any discriminations that might be facilitated by the union shop clause have been legislatively determined to be an expense more than offset by the benefits of such a provision.
17
What seems plain to us in reason, as to a litigated decree, is amply supported by precedent. In Pennsylvania v. Wheeling & Belmont Bridge Co., supra, this Court was also required to deal with the effect upon an outstanding injunction of subsequent congressional action. The Court had earlier held that a bridge across the Ohio River obstructed navigation in such a way as to be in conflict with certain Acts of Congress regulating navigation on the river. The decree 'directed that the obstruction be removed, either by elevating the bridge to a height designated, or by abatement.' 18 How. at page 429. A later Act of Congress declared the bridge to be a lawful structure in its existing position and elevation. The injunction was dissolved, the Court saying, 18 How. at pages 430—432:
18
'So far, therefore, as this bridge created an obstruction to the free navigation of the river, in view of the previous acts of congress, they are to be regarded as modified by this subsequent legislation; and, although it still may be an obstruction in fact, is not so in the contemplation of law. * * * But that part of the decree, directing the abatement of the obstruction, is executory, a continuing decree, which requires not only the removal of the bridge, but enjoins the defendants against any reconstruction or continuance. Now, whether it is a future existing or continuing obstruction depends upon the question whether or not it interferes with the right of navigation. If, in the mean time, since the decree, this right has been modified by the competent authority, so that the bridge is no longer an unlawful obstruction, it is quite plain the decree of the court cannot be enforced. There is no longer any interference with the enjoyment of the public right inconsistent with law, no more than there would be where the plaintiff himself had consented to it, after the rendition of the decree. Suppose the decree had been executed, and after that the passage of the law in question, can it be doubted but that the defendants would have had a right to reconstruct it? And is it not equally clear that the right to maintain it, if not abated, existed from the moment of the enactment?'
19
The principles of the Wheeling Bridge case have repeatedly been followed by lower federal and state courts.6 We find no reason to recede from them.
20
That it would be an abuse of discretion to deny a modification of the present injunction if it had not resulted from a consent decree we regard as established. Is this result affected by the fact that we are dealing with a consent decree? Again we start with the Swift case, supra, where the Court held, 286 U.S. at pages 114—115, 52 S.Ct. at page 462:
21
'The result is all one whether the decree has been entered after litigation or by consent * * *. In either event, a court does not abdicate its power to revoke or modify its mandate, if satisfied that what it has been doing has been turned through changing circumstances into an instrument of wrong. We reject the argument for the interveners that a decree entered upon consent is to be treated as a contract and not as a judicial act * * *. But in truth what was then adjudged was not a contract as to any one. The consent is to be read as directed toward events as they then were. It was not an abandonment of the right to exact revision in the future, if revision should become necessary in adaptation to events to be.'
22
This Court has never departed from that general rule.7 We continue to adhere to it because of the policy it expresses. The parties cannot, by giving each other consideration, purchase from a court of equity a continuing injunction. In a case like this the District Court's authority to adopt a consent decree comes only from the statute which the decree is intended to enforce. Frequently of course the terms arrived at by the parties are accepted without change by the adopting court. But just as the adopting court is free to reject agreed-upon terms as not in furtherance of statutory objectives, so must it be free to modify the terms of a consent decree when a change in law brings those terms in conflict with statutory objectives. In short, it was the Railway Labor Act, and only incidentally the parties, that the District Court served in entering the consent decree now before us. The court must be free to continue to further the objectives of that Act when its provisions are amended. The parties have no power to require of the court continuing enforcement of rights the statute no longer gives.
23
The record leaves no room for doubt that the parties in fact attempted to conform the consent decree to the dictates of the Railway Labor Act as it then read. We can attach no weight to either of the two factors that led the lower courts to find that the parties had bargained, free of the requirements of the Act, for an injunction serving only their own interests. The first factor—that an independently arrived at contract rather than a decree effectuating rights accorded by the Act must have been contemplated because the unions agreed to equitable relief when their acts were already declared unlawful by statute—ignores completely the fact that this was precisely the relief sought in the complaint filed by the 28 plaintiffs and the relief that had been granted after litigation in Steele v. Louisville & Nashville R. Co., 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173, and in Graham v. Brotherhood of Firemen, 338 U.S. 232, 70 S.Ct. 14, 94 L.Ed. 22. The second factor—that the unions agreed to be bound as to bargaining agreements that might later be in effect as well as the contract then in effect—ignores the fact that the parties, in all likelihood, meant only to cover any later bargaining agreements under the Act as it read at the time of the consent decree.8
24
The type of decree the parties bargained for is the same as the only type of decree a court can properly grant—one with all those strengths and infirmities of any litigated decree which arise out of the fact that the court will not continue to exercise its powers thereunder when a change in law or facts has made inequitable what was once equitable. The parties could not become the conscience of the equity court and decide for it once and for all what was equitable and what was not, because the court was not acting to enforce a promise but to enforce a statute.
25
The judgment of the Court of Appeals must be reversed, and the case remanded to it for further proceedings consistent with this opinion.
26
It is so ordered.
27
Judgment reversed and case remanded.
28
Mr. Justice STEWART took no part in the consideration or decision of this case.
29
Mr. Justice DOUGLAS, with whom Mr. Justice FRANKFURTER and Mr. Justice WHITTAKER concur, dissenting in part.
30
This controversy commenced in 1945 prior to the time when so-called union shop agreements were authorized by Congress. Act of Jan. 10, 1951, 64 Stat. 1238, 45 U.S.C. § 152, Eleventh, 45 U.S.C.A. § 152, Eleventh. Since the date of that law, which we upheld in Railway Employes' Dept. v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112, employees and carriers may negotiate that type of agreement, though they are not required to do so. Id., 351 U.S. at page 231, 76 S.Ct. at page 717. Prior to that date, however, a union shop was barred by law in this industry; and a union that discriminated against nonunion members was accountable to them. See Steele v. Louisville & N.R. Co., 323 U.S. 192, 207, 65 S.Ct. 226, 234.
31
Twenty-eight nonunion members sued petitioners, in 1945, claiming damages in the amount of $140,000. The complaint purported to state a class action. But the case never came to trial. A settlement was reached which provided for (a) the payment of $5,000 in cash; (b) the waiver and release by the 28 plaintiffs of all their claims; and (c) a consent decree which would protect 'the undersigned' against future acts of discrimination by petitioners.
32
The consent decree did not purport to protect future employees. By its terms it protected only 'the plaintiffs in this action and all other employes of the defendant Railroad employed in' designated crafts or classes and not members of the union. The petitioners agreed to refrain from discriminating 'against the plaintiffs and the classes represented by them.'
33
I do not think the consent decree, read in light of the settlement, did more than settle claims of then-existing employees. Employees hired in the future were, by its terms, not included. Yet apparently a host of them have intervened, seeking the protection of the statute quo created by that decree. I use the word 'apparently' because the record does not show which intervenors were on the payroll of the carrier in 1945. Those who became employed after that date plainly are not entitled to the protection of the decree. Of those who were employed at that time, we know that some are still employed. Of the latter group, at least seven of the original 28 employees are still on the payroll. These seven released valuable claims for settling their disputes. It is harsh and unjust to deprive them of those fruits of the settlement. Whether there are others employed in 1945 who have a like claim to fair dealing is impossible to tell from the record.
34
We are all agreed that there is power in the District Coujrt to modify the consent decree, whether or not the power to modify was reserved. United States v. Swift & Co., 286 U.S. 106, 114, 52 S.Ct. 460, 462. I agree with the Court that the union should not be disabled by that decree from carrying out the new union shop policy which Congress has made permissive. Cf. Pennsylvania v. Wheeling & Belmont Bridge Co., 18 How. 421, 435—436, 15 L.Ed. 435. Certainly all employees who have joined the ranks since 1945 have no claim to its protection, as they are not included in its terms and gave nothing up in exchange for it. To construe it to include them would as a result of changing circumstances turn the consent decree 'into an instrument of wrong.' United States v. Swift & Co., supra, 286 U.S. 115, 52 S.Ct. 462. But when we set aside the decree as respects those who gave up something of value to get it, we do an injustice. I think the applicable principle is stated in United States v. Swift & Co., supra, 286 U.S. 119, 52 S.Ct. 464: 'The injunction, whether right or wrong, is not subject to impeachment in its application to the conditions that existed at its making.'
1
45 U.S.C. § 152, 45 U.S.C.A. § 152.
2
Each of the 28 plaintiffs had claimed $5,000 in damages.
3
45 U.S.C. § 152, Eleventh, 45 U.S.C.A. § 152, Eleventh. See Railway Employees' Department v. Hanson, 351 U.S. 225, 76 S.Ct. 714, 100 L.Ed. 1112.
4
The relevant provisions of Rule 60(b) are as follows: 'On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: * * * (5) * * * it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.'
5
In the view we take of the case we need not consider whether such a commitment of indefinite duration is valid.
6
In McGrath v. Potash, 91 U.S.App.D.C. 94, 199 F.2d 166, after Congress passed a statute excluding from the requirements of the Administrative Procedure Act, 5 U.S.C.A. § 1001 et seq., deportation proceedings, the District of Columbia Circuit vacated an injunction against the Government requiring compliance with that Act. There are many cases where a mere change in decisional law has been held to justify modification of an outstanding injunction. E.g., Ladner v. Siegel, 298 Pa. 487, 148 A. 699, 68 A.L.R. 1172 (whether a garage in a residential district is a nuisance); Santa Rita Oil & Gas Co. v. State Board of Equalization, 112 Mont. 359, 116 P.2d 1012, 136 A.L.R. 757 (what federal instrumentalities are exempt from state taxation); Coca-Cola Co. v. Standard Bottling Co., 10 Cir., 138 F.2d 788 (whether the use of the word 'cola' infringed Coca-Cola's trademark); and see Western Union Tel. Co. v. International Brotherhood, 7 Cir., 133 F.2d 955 (whether ordinary strikes are forbidden by the Sherman Act, 15 U.S.C.A. §§ 1—7, 15 note, and what picketing can constitutionally be enjoined).
7
In Coca-Cola Co. v. Standard Bottling Co., 138 F.2d 788, 790, a Circuit Court could say with some certainty: 'We know of no case which holds that a consent decree imposing a continuing injunction deprives the court of its supervisory jurisdiction in the matter.'
8
We consider unpersuasive the argument of the railroad that in 1945 there was already on foot a movement to amend the Railway Labor Act so as to permit union shop agreements.
| 67
|
365 U.S. 1
81 S.Ct. 435
5 L.Ed.2d 377
FEDERAL POWER COMMISSION,v.TRANSCONTINENTAL GAS PIPE LINE CORP. NATIONAL COAL ASSOCIATION et al. v. TRANSCONTINENTAL GAS PIPE LINE CORP.
Nos. 45, 46.
Argued Nov. 15, 1960.
Decided Jan. 23, 1961.
[Syllabus from pages 1-2 intentionally omitted]
Mr. Solicitor General J. Lee Rankin, Washington, D.C., for petitioner in No. 45.
Mr. Jerome J. McGrath, Washington, D.C., for petitioners in No. 46.
Messrs. Randall J. LeBoeuf, Jr., New York City, and Richard J. Connor, Washington, D.C., for respondents in both cases.
[Amicus Curaie intentionally omitted]
Mr. Chief Justice WARREN delivered the opinion of the Court.
1
The question in these cases is whether the Federal Power Commission has gone beyond the scope of its delegated authority in denying a certificate of public convenience and necessity under § 7(e) of the Natural Gas Act of 1938, 52 Stat. 821, as amended, 15 U.S.C. § 717 et seq., 15 U.S.C.A. § 717 et seq.1 The principal respondents2 are Transcontinental Gas Pipe Line Corp. (Transco), a pipeline company engaged in transporting natural gas in interstate commerce, and Consolidated Edison Co. (Con. Ed.), a public utility in New York City which uses gas under its boilers and also sells gas to domestic consumers. In 1957 Con. Ed. contracted to purchase gas from producers in the Normanna and Sejita fields in Texas at 19 1/4 cents per Mcf., the contracts of sale containing a prohibition on resale of the gas by Con. Ed. This transaction is commonly labeled a 'direct' sale and, because it does not entail a sale for resale in interstate commerce, is not subject to the Commission's jurisdiction except insofar as § 7 requires the Commission to certificate the transportation of gas pursuant to the sale.
2
Con. Ed. then arranged with Transco for what is called in the record 'X—20' service. Under the contract, Transco agreed to transport 50,000 Mcf. daily to Con. Ed. in New York for use under Con. Ed.'s boilers, principally two boilers at Con. Ed.'s Waterside station which were then being fired by coal. Additionally, during a 60-day peak period, Transco agreed to sell 50,000 Mcf. to Con. Ed. from Transco's own reserves without restrictions as to resale. This 60-day supply was designed for use by Con. Ed.'s customers during the winter period when heating demands were at their highest. Transco sought a certificate of public convenience and necessity for the proposed X—20 service in connection with its plan to conduct a major expansion of its pipeline capacity and storage facilities.
3
Before the hearing examiner, Transco's application was opposed by the FPC staff and groups representing the coal industry. Con. Ed. intervened in favor of Transco's proposal. Transco offered proof that its application met all the conventional tests—adequate gas reserves, pipeline facilities and market for the gas—and this showing, with one immaterial exception, has never been challenged. However, the FPC's staff argued vigorously that the public interest would suffer were Transco's petition granted. Among the grounds advanced were that the gas was to be transported for use under industrial boilers, this disposition being an 'inferior' use from the standpoint of conserving a valuable natural resource; that authorization of this and similar direct sales to major industrial users would result in pre-emption of pipeline capacity and gas reserves to the detriment of domestic consumers competing for gas supply; and that the effect of this sale, as well as the resulting increase in direct sales, would effect a general rise in field prices. These contentions were presented as 'policy' arguments and no testimony was taken in support. Con. Ed. contended in return that certification was in the public interest, principally because a firm supply of natural gas under the Waterside boilers would reduce the air pollution problem then being aggravated by fly-ash and sulphur dioxide emissions from these boilers. The Waterside station is located near the headquarters building of the United Nations, and Con. Ed. introduced expert testimony indicating that the Waterside boilers were major contributors to the air pollution problem in the area. Respondents also contended that the factors propounded by the FPC's staff were not open for consideration in a § 7 proceeding. The hearing examiner agreed with respondents that his determination was limited to conventional factors and consequently recommended certification. He qualified his recommendation, however, with a statement that, if he were authorized to consider the policy argument related to the end use of the gas advanced by the FPC staff, he would come to the opposite conclusion. He indicated that respondents' proof concerning the air pollution problem was not sufficiently compelling to overcome this contrary argument.
4
On review before the full FPC, the Commission held that the broad considerations advanced by its staff were cognizable in a § 7 proceeding. The Commission agreed with respondents that the 'idea of ameliorating a smoke condition found unpleasant and annoying * * * is an attractive one' but concluded that 'more weighty considerations compel the denial of the grant.' 21 F.P.C. 138, 142. Respondents sought a rehearing before the Commission and, upon denial of that petition, 21 F.P.C. 399, appealed to the Court of Appeals. The Court of Appeals reinstated the conclusion of the hearing examiner that the policy considerations advanced by the FPC were outside the scope of a § 7 proceeding. The court relied principally on § 1(b) of the Natural Gas Act, 15 U.S.C. § 717(b), 15 U.S.C.A. § 717(b), which provides:
5
'The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.'
6
The court also expressed sympathy with respondents' contention that the Commission had given inadequate weight to the air pollution factor; but the holding below does not appear to be based on that ground. 271 F.2d 942.
7
The principal question before this Court, then, is whether Congress intended to preclude the Commission from denying certification on the basis of the policy considerations advanced by its staff. For purposes of analysis, the litigants have grouped these factors into two broad categories. The first has been labeled the 'end use' factor and reflects and Commission's concern that Con. Ed.'s proposed 'inferior' use of gas under its industrial boilers would be wasteful of gas committed to the Commission's jurisdiction and, by the same token, would pre-empt space in pipelines that might otherwise be used for transportation of gas for superior uses. The second may be called the 'price' consideration and involves the Commission's fear that this sale—which was executed at a price higher than the maximum fixed by the Commission in the producing districts here involved—would increase the price of natural gas in the field, thus triggering a rise in the price provisions in other contracts.
8
In light of what this Court has said on prior occasions concerning the term 'public convenience and necessity' in analogous statutes, the ready inference is that the Commission has the power to consider the 'end use' and 'price' factors. For example, in United States v. Detroit & Cleveland Navigation Co., 326 U.S. 236, 241, 66 S.Ct. 75, 77, 90 L.Ed. 38, the Court concluded that:
9
'The Commission is the guardian of the public interest in determining whether certificates of convenience and necessity shall be granted. For the performance of that function the Commission has been entrusted with a wide range of discretionary authority. Interstate Commerce Commission v. Parker, 326 U.S. 60, 65 S.Ct. 1490 (89 L.Ed. 2051). Its function is not only to appraise the facts and to draw inferences from them but also to bring to bear upon the problem an expert judgment and to determine from its analysis of the total situation on which side of the controversy the public interest lies. Its doubt that the public interest will be adequately served if resumption of service is left to existing carriers is entitled to the same respect as its expert judgment on other complicated transportation problems. * * *' See Interstate Commerce Commission v. Railway Labor Executives Ass'n, 315 U.S. 373, 376—377, 62 S.Ct. 717, 719 720, 86 L.Ed. 904.
10
In fact, in interpreting this very section, we said that '§ 7(e) requires the Commission to evaluate all factors bearing on the public interest.' Atlantic Refining Co. v. Public Service Commission, 360 U.S. 378, 391, 79 S.Ct. 1246, 1255, 3 L.Ed.2d 1312. (Emphasis added.) However, respondents correctly point out that Congress, in enacting the Natural Gas Act, did not give the Commission comprehensive powers over every incident of gas production, transportation and sale. Rather, Congress was 'meticulous' only to invest the Commission with authority over certain aspects of this field, leaving the residue for state regulation. Panhandle Eastern Pipe Line Co. v. Public Service Commission, 332 U.S. 507, 68 S.Ct. 190, 92 L.Ed. 128. Therefore, it is necessary to consider with care whether, despite the accepted meaning of the term 'public convenience and necessity,' the Commission has trod on forbidden ground in making its decision.
11
End use. No one disputes that natural gas is a wasting resource and that the necessity for conserving it is paramount.3 As we see it, the question in this case is whether the Commission, through its certification power, may prevent the waste of gas committed to its jurisdiction. One apparent method of preventing waste of gas is to limit the uses to which it may be put, uses for which another, more abundant fuel may serve equally well. Thus the Commission in this case, as it often has in the past,4 has declared that the use of gas under industrial boilers is an 'inferior' use, the assumption being that other fuels, particularly coal, are an adequate substitute5 in areas where such other fuels abound. However, respondents, while conceding the premise that gas may be wasted where coal is readily available, argue that Congress has not awarded the Commission any powers over conservation; rather, this authority has veen reserved to the States. This contention is based on the legislative history of the Natural Gas Act.
12
When Congress initially enacted the Natural Gas Act in 1938, all the indications were that Congress intended the States to be the primary arbiters of conservation problems. The 1938 Act was based on a 1936 report rendered by the Federal Trade Commission6 and the section in that report devoted to conservation stresses the powers of state bodies to adopt corrective measures. The final recommendation of the Federal Trade Commission in regard to conservation contemplated primary state authority, with federal agencies being relegated to a reporting function. This recommendation formed the basis for § 11 of the Act as ultimately passed and that section reveals a secondary role for the Commission in this regard.7
13
However, in 1940, the Commission reported its dissatisfaction with the limited scope of § 7. The 1938 version of § 7 restricted the Commission's jurisdiction to certification of transportation into areas where the market was already being served by another natural gas company; if a pipeline wished to extend service into virgin territory, the Commission had no power to act. The Commission felt that this limitation barred it from considering 'the broad social and economic effect of the use of various fuels' in a § 7 proceeding, Kansas Pipe Line & Gas Co., 2 F.P.C. 29, 27, and, in its 1940 Annual Report, the Commission urged that the restriction be deleted in order that conservation considerations might be weighed. The language used by the Commission is particularly relevant to this case:
14
'The Natural Gas Act as presently drafted does not enable the Commission to treat fully the serious implications of such a problem. The question should be raised as to whether the proposed use of natural gas would not result in displacing a less valuable fuel and create hardships in the industry already supplying the market, while at the same time rapidly depleting the country's natural-gas reserves. Although, for a period of perhaps 20 years, the natural gas could be so priced as to appear to offer an apparent saving in fuel costs, this would mean simply that social costs which must eventually be paid had been ignored.
15
'Careful study of the entire problem may lead to the conclusion that use of natural gas should be restricted by functions rather than by areas. Thus, it is especially adapted to space and water heating in urban homes and other buildings and to the various industrial hest processes which require concentration of heat, flexibility of control, and uniformity of results, Industrial uses to which it appears particularly adapted include the treating and annealing of metals, the operation of kilns in the ceramic, cement, and lime industries, the manufacture of glass in its various forms, and use as a raw material in the chemical industry. General use of natural gas under boilers for the production of steam is, however, under most circumstances of very questionable social economy.' 20 F.P.C.Ann.Rep. 79 (1940).
16
The Commission implemented its recommendation by submitting to Congress a proposed amendment to § 7 with the restrictive language eliminated, and an amendment substantially similar to the one drafted by the Commission was enacted in 1942.8 During the course of the hearings on the amendment, the Commission reiterated the position it had taken in its 1940 report, Hearings before the House Committee on Interstate and Foreign Commerce on H.R. 5249, 77th Cong., 1st Sess. 82, and the language used by the Committees reporting the bill indicates that the amendment was framed in response to the Commission's complaint. H.R.Rep. No. 1290, 77th Cong., 1st Sess. 3; S.Rep. No. 918, 77th Cong., 2d Sess. 1—2.
17
It is true, of course, that the Committee reports do not set out the Commission's position in haec verba. For example, the pertinent language of the House Committee Report states that:
18
'The bill, as amended, eliminates the objections to the present section 7(c) above mentioned. By this legislation, the present jurisdictional disputes are eliminated, and the door is opened to the consideration by the Commission of the effect of construction and extensions upon the interests of producers of competing fuels and competitive transportation interests. This result is accomplished, moreover, without undue disturbance of existing operating arrangements of natural-gas companies.'9 H.R.Rep. No. 1290, supra.
19
Consequently, respondents argue that Congress only authorized the Commission to look at one side of the coin—the health of the coal industry—because that is the only point mentioned explicitly. However, this contention does not take adequate account of the position the Commission had consistently pressed upon Congress both prior to and during the hearings on the amendment—that the use of gas for purposes adequately served by other fuels was undesirable not only because it injured the competing industry but, what is more important, because it was wasteful to use a fuel in short supply in place of an abundant fuel. See 20 F.P.C.Ann.Rep. 79 (1940). The history of the amendment reveals no voice raised in opposition to the Commission's position and there is no other indication that Congress was unwilling to give the chief proponent of the amendment anything less than it sought. Thus, it would be curious were we to infer such an intent from the language of the House Committee Report quoted above. Rather, we think it plain the Congress acquiesced in the Commission's position and the excerpted language signifies acquiescence. It should be noted that this is not the first time this Court has addressed itself to the effect of the 1942 amendment to § 7. See Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591, 617, note 30, 64 S.Ct. 281, 294, 88 L.Ed. 333, and Federal Power Commission v. East Ohio Gas Co., 338 U.S. 464, 468—469, 70 S.Ct. 266, 268—269, 94 L.Ed. 268. And, while it must be conceded that the language pertinent here was not necessary to the decision in either Hope or East Ohio, the clear conclusion of the Court in those cases is directly opposed to respondents' present argument.
20
Respondents, however, vigorously contend that, subsequent to the 1942 amendment, the Commission itself has made statements on occasion which are inconsistent with the Commission's position in this case. In particular, respondents point to an excerpt from the Commission's 1944 Report to Congress, entitled The First Five Years Under the Natural Gas Act, where the Commission stated:
21
'In its hearings on certificate cases, under section 7(c) of the act, as amended, the Commission has freely permitted the intervention of representatives of coal, railroad, labor, and other interests concerned with the production or transportation of competing fuels. These interests have presented extensive evidence on the economic, sociological, and technological aspects of fuel competition, and their representatives have strongly urged the Commission either to deny certificates on the general grounds of conservation or to attach restrictions which would severely limit the uses for which natural gas might be sold.
22
'It has been the unanimous view of the Commission that, inasmuch as the Congress had not given it conprehensive powers to deal with the end uses for which natural gas is consumed, and had granted the Commission no authority to regulate rates for the direct sales of natural gas to industry, it was the duty of the Commission not to seek to exercise such authority until the Congress amended the Natural Gas Act to confer on the Commission such specific powers as Congress desired it to exercise.' F.P.C., The First Five Years Under the Natural Gas Act 15.
23
This statement was relied on heavily by the Court of Appeals and it would be idle to contend that the report is irrelevant to the present inquiry. However, it is necessary to note the precise limit of the Commission's admissions. The Commission said that it had not been given 'comprehensive' authority to deal with 'the end uses for which natural gas is consumed' and that it would not deny certification on that ground alone.10 The Commission did not say that it had no authority over the use to which certificated gas might be put nor did it say that end use was a factor beyond its power of notice. In view of contemporaneous statements by the Commission which would be inconsistent with the reading respondents press upon us,11 we think that the 1944 report should be construed as admitting only a lack of comprehensive power to formulate a flat rule against direct sales for use under industrial boilers.
24
In this connection, it must be realized that the Commission's powers under § 7 are, by definition, limited. See Koplin, Conservation and Regulation: The Natural Gas Allocation Policy of the Federal Power Commission, 64 Yale L.J. 840, 862. The Commission cannot order a natural gas company to sell gas to users that it favors;12 it can only exercise a veto power over proposed transportation and it can only do this when a balance of all the circumstances weighs against certification. Moreover, the Commission has no authority over intrastate sales under any section of the Act and, since a large percentage of the gas sold for so-called 'inferior' uses is sold within the producing States,13 this restriction further curtails the Commission's power over conservation. In light of this, the Commission's position since the 1942 amendment is both consistent and rational. On the one hand, the Commission has stated that it does have power to consider end use in a § 7 proceeding. On the other hand, the Commission has sought, but has not been awarded, comprehensive authority over all aspects of gas conservation. A most striking example of the Commission's thinking is revealed by its reasons for opposition to H.R. 982, a bill proposed in 1949 which would have declared that:
25
'* * * the public interest requires the establishment of, and adherence to, a policy with respect to the transportation of natural gas and the sale thereof in interstate commerce, which will—
26
'(1) promote and safeguard, so far as possible, the national defense;
27
'(2) conserve the reserves of natural gas for utilization which affords the highest social benefits to the public, consistent with reasonable rates and adequate service.'14
28
The Commission argued against passage on, among others, the following ground:
29
'The 10-point policy would—
30
'(2) Conserve the reserves of natural gas for utilization which affords the highest social benefits to the public, consistent with reasonable rates and adequate service;
31
'This, of course, proposes a limitation on the purposes for which gas may be utilized. In order to be fully effective it would be necessary to extend the Commission's jurisdiction to intrastate sales because the great bulk of gas sold for so-called inferior industrial uses is either sold in the field or by distributing companies over which the Commission does not have jurisdiction. The Commission, however, is aware of the problem and in certificate cases it does give consideration to the proposed uses of the gas in question. The Commission believes that, under the present act, it may give proper consideration to this matter in certificate proceedings.'15
32
In light of this language, it is clear that the Commission fully realizes the distinction between the power it enjoys under § 7 and complete allocation power.16 And we feel that this distinction entirely disposes of those contentions of respondents based on the Commission's purported ambivalent behavior.
33
There is a broader principle here which also stands in opposition to respondents' contentions. When Congress enacted the Natural Gas Act, it was motivated by a desire 'to protect consumers against exploitation at the hands of natural gas companies.' Sunray Mid-Continent Oil Co. v. Federal Power Commission, 364 U.S. 137, 147, 80 S.Ct. 1392, 1398, 4 L.Ed.2d 1623. To that end, Congress 'meant to create a comprehensive and effective regulatory scheme.' Panhandle Eastern Pipe Line Co. v. Public Service Commission, 332 U.S. 507, 520, 68 S.Ct. 190, 197, 92 L.Ed. 128. See Public Utilities Commission of Ohio v. United Fuel Gas Co., 317 U.S. 456, 467, 63 S.Ct. 369, 375, 87 L.Ed. 396. It is true, of course, that Congress did not desire comprehensive federal regulation; much authority was reserved for the States. But, it is equally clear that Congress did not desire that an important aspect of this field be left unregulated. See Panhandle Eastern Pipe Line Co. v. Public Service Commission, supra. Therefore, when a dispute arises over whether a given transaction is within the scope of federal or state regulatory authority, we are not inclined to approach the problem negatively, thus raising the possibility that a 'noman's land' will be created. Compare Guss v. Utah Labor Relations Board, 353 U.S. 1, 77 S.Ct. 598, 603, 1 L.Ed.2d 601. That is to say, in a borderline case where congressional authority is not explicit we must ask whether state authority can practicably regulate a given areas and, if we find that it cannot, then we are impelled to decide that federal authority governs.
34
In this case, the dispute is over the 'economic' waste of gas which has been committed to transportation in interstate commerce outside the producing State. The Commission has not attempted to exert its influence over such 'physically' wasteful practices as improper well spacing and the flaring of unused gas which result in the entire loss of gas and are properly of concern to the producing State; nor has the Commission attempted to regulate the 'economic' aspects of gas used within the producing State. Respondents contend that, even in this posture, the Commission has usurped the functions of state regulating bodies but we cannot agree.
35
In the 1936 Federal Trade Commission Report, upon which respondents so heavily rely, there was some mention of control of the end use of gas and, as we have said, this report was strongly oriented towards state regulation. However, as the Court of Appeals pointed out, the primary emphasis was on physical waste of gas within the producing State and the reference to end use probably contemplated the use of gas in gasoline extraction and the manufacture of carbon black. 271 F.2d at page 947. There is no indication that the Federal Trade Commission or Congress was thinking in terms of state-controlled 'economic' conservation of gas committed to interstate commerce. Moreover, it is questionable whether any State could be expected to take the initiative in enforcing this type of 'economic' conservation. A producing State might wish to prolong its gas reserves for as long as possible but producing States have no control over the use to which gas is put in another State. See Michigan-Wisconsin Pipe Line Co. v. Calvert, 347 U.S. 157, 74 S.Ct. 396, 98 L.Ed. 583; Com. of Pennsylvania v. State of West Virginia, 262 U.S. 553, 43 S.Ct. 658, 67 L.Ed. 1117; State of Oklahoma v. Kansas Natural Gas Co., 221 U.S. 229, 31 S.Ct. 564, 55 L.Ed. 716. Consuming States may control the end use of gas, Panhandle Eastern Pipe Line Co. v. Michigan Public Service Commission, 341 U.S. 329, 71 S.Ct. 777, 95 L.Ed. 993, but the deficiencies of this system in the present context are apparent—unless all States cooperate in enforcing a common regulation, the producer may pick a State which is sufficiently anxious for this scarce resource that it will take gas irrespective of the use.17 Therefore, it appears that, consistent with the congressional purpose of leaving no 'attractive gap' in regulation, we must conclude that the 'end-use' factor was properly of concern to the Commission.
36
Price. As we read the opinion, the Commission's second objection to certification was based on its forecast that this and similar direct sales of gas at unregulated prices higher than those allowed in sales for resale18 would attract gas to the high-bidding direct purchasers and thus lever upwards field prices both in direct sales and sales for resale.
37
Respondents claim that this 'policy' consideration masks the Commission's true purpose in this proceeding, which, according to respondents, is to bar direct sales absolutely, thus forcing all gas transactions into regulated channels. And respondents argue that such an absolute bar runs contrary to the intent of Congress as expressed in § 1(b) of the Natural Gas Act quoted supra, the section which limits the FPC's jurisdiction to sales for resale in interstate commerce.
38
Were respondents correct in their interpretation of the Commission's action in this case, we would be forced to agree that the Commission had overstepped its bounds. Certainly such action would be contrary to our previous statements that the term 'public convenience and necessity' connotes a flexible balancing process, in the course of which all the factors are weighed prior to final determination. United States v. Detroit & Cleveland Nevigation Co., supra.19 Indeed, as respondents argue, such a flat rule would be doubly objectionable here because Congress has not given the Commission jurisdiction over direct sales. However, we cannot agree that the Commission propounded an absolute rule in this case. Examination of the opinion reveals recurrent reference to the absence of any one controlling factor; as the Commission stated, 'countervailing factors suffice to tip the balance against the grant of the authority requested by Transco.' 21 F.P.C., at 141. (Emphasis added.) It is difficult to find any indication of the flat rule mentioned by respondents in language such as this. Furthermore, if there were any lingering doubt on this point, it is dispelled by the fact that the Commission has, on many occasions, held that transportation of gas sold directly to the consumer is in the public interest when the reasons advanced by the applicant have been sufficiently strong. See, e.g., Houston Texas Gas & Oil Corp., 16 F.P.C. 118. On this point, the Commission's actions speak louder than respondents' unsupported allegations. See Northern Natural Gas Co., 15 F.P.C. 1634.20
39
Respondents also argue that the Commission is opposed to this transaction merely because the underlying sale is a direct sale not subject to the Commission's primary jurisdiction. However, a fair reading of the Commission's opinion as a whole reveals that the Commission did not exalt form over substance in an attempt to aggrandize the scope of its jurisdiction; rather, whenever the Commission discussed the nonjurisdictional nature of this sale, it tied this discussion into an analysis of one or the other of the substantive evils it was seeking to prevent 'inferior' use or increased prices to consumers generally.21
40
The question for consideration in this section, therefore, is whether in a § 7 proceeding the Commission may consider sales price or, more accurately, the effect the inflated price charged in one sale will have on future field prices. We have recently answered this question in favor of the Commission's jurisdiction. See Atlantic Refining Co. v. Public Service Commission, supra, 360 U.S. at page 391, 79 S.Ct. at page 1255, where we stated that the Commission could decide whether:
41
'(T)he proposed price is not in keeping with the public interest because it is out of line or because its approval might result in a triggering of general price rises * * *.' However, respondents point out that the underlying sale in that case was a sale for resale and thus independently subject to the Commission's jurisdiction. Where such independent jurisciction does not exist because of the bar in § 1(b), respondents claim that the Commission's power of notice is curtailed.
42
This Court has never been faced with precisely this problem, but on several occasions we have been called upon to consider arguments very similar to the one advanced here. For example, in Colorado Interstate Gas Co. v. Federal Power Commission, 324 U.S. 581, 65 S.Ct. 829, 89 L.Ed. 1206, it was held that, in fixing a rate base for the measurement of interstate wholesale rates, the Commission might take into account the value of the pipeline company's production and gathering facilities, even though the Commission had no direct jurisdiction over these facilities because of the bar in § 1(b). The contention which was rejected in Colorado Interstate has a familiar ring in the present context: According to the unsuccessful litigant, when the FPC includes production and gathering facilities in a rate base, 'it regulates the production and gathering of natural gas contrary to the provisions of § 1(b) of the Act.' Id., 324 U.S. at page 600, 65 S.Ct. at page 838. Similarly, in Panhandle Eastern Pipe Line Co. v. Federal Power Commission, 324 U.S. 635, 646, 65 S.Ct. 821, 827, 89 L.Ed. 1241, it was said in dictum that:
43
'The Commission, while it lacks authority to fix rates for direct industrial sales, may take those rates into consideration when it fixes the rates for interstate wholesale sales which are subject to its jurisdiction.'
44
These cases, while not in themselves controlling, indicate at least that respondents' argument is overly broad. However, to decide a particular case we must return to the consideration discussed in the previous section—the Act contemplates comprehensive regulation in the public interest and the critical inquiry is whether Congress intended state or federal authority to govern.
45
In the present case the Commission was concerned with the effects this certification might have in the future on field prices generally. The Commission was attempting to consider not only the interests of consumers in New York but those in all States. To be compared with the problem before the Commission are the determinations that a consuming state commission may properly make in exercising authority over a direct sale. Certainly, the consuming State can regulate retail rates at which gas can be sold within the State. E.g., Panhandle Eastern Pipe Line Co. v. Public Service Commission, 332 U.S. 507, 68 S.Ct. 190, 92 L.Ed. 128. This power was recognized at the time the Act was passed, see Powell, Note, Physics and Law—Commerce in Gas and Electricity, 58 Harv.L.Rev. 1072, and it is clear that Congress excepted federal regulation of direct sales precisely for this reason. See H.R.Rep. No. 709, 75th Cong., 1st Sess. 1—2. But, in this case the Commission has not objected to the retail rate and we need not decide whether there are limits on the Commission's power in this hypothetical situation. The very nature of the present problem, entailing as it does considerations that overstep the bounds of any one State, illustrates the improbability that state commissions could or would attempt to deal with it; it seems clear that considerations of this sort are uniquely fitted for federal scrutiny. Particularly relevant in this connection in this Court's decision in Panhandle Eastern Pipe Line Co. v. Public Service Commission, 332 U.S. 507, 68 S.Ct. 190, 92 L.Ed. 128. In that case, it was held that a state commission may regulate retail sales, even though the gas was brought from out-of-state sources. The pipeline company argued that conflicting regulations enforced by different state bodies, particularly regulations concerned with interruption of service, might place it in an untenable position. The Court answered this argument by stating that:
46
'There is no evidence thus far of substantial conflict in either respect and we do not see that the probability of serious conflict is so strong as to outweigh the vital local interests to which we have referred requiring regulation by the states. Moreover, if such conflict should develop, the matter of interrupting service is one largely related, as appellees say, to transportation and thus within the jurisdiction of the Federal Power Commission to control, in accommodation of any conflicting interests among various states.' Id., 332 U.S. at page 523, 68 S.Ct. at page 198. (Emphasis added.)
47
The point is, as we have stated, that Congress did not desire an 'attractive gap' in its regulatory scheme; rather, Congress intended to impose a comprehensive regulatory system on the transportation, production, and sale of this valuable natural resource. Therefore, when we are presented with an attempt by the federal authority to control a problem that is not, by its very nature, one with which state regulatory commissions can be expected to deal, the conclusion is irresistible that Congress desired regulation by federal authority rather than nonregulation. See Panhandle Eastern Pipe Line Co. v. Federal Power Commission, 3 Cir., 232 F.2d 467.
48
Respondents' final argument on this point is that the Commission abused its discretion in denying certification because it took cognizance of facts dehors the record and because it did not pay sufficient attention to the recorded testimony of respondents' expert concerning air pollution. The first objection that the Commission erred in going outside the record—was rejected by the Court of Appeals and we concur in that conclusion. According to the statute, the Commission is required to determine whether certification is in the 'present or future public convenience and necessity.' (Emphasis added.) Obedient to this command, the Commission did forecast the future and concluded that widespread direct sales at high prices would probably result in price increases. Respondents appear to be claiming that the Commission should have adduced testimonial and documentary evidence to the effect that this forecast would come true. However, we do not think that the Commission is so limited in its formulation of policy considerations. Rather, we think that a forecast of the direction in which future public interest lies necessarily involves deductions based on the expert knowledge of the agency. See Atlantic Refining Co. v. Public Service Commission, supra, 360 U.S. at page 391, 79 S.Ct. at page 1255.22 It should also be noted that there has been a considerable showing made by the petitioners and state regulatory commissions appearing as amici curiae to the effect that the Commission's forecast is well founded.23 Moreover, as a matter of common sense, it would seem difficult to deny that the channeling of vast quantities of a wasting resource into unregulated transactions at a high price will result in scarcity to other consumers and a general price increase. Cf. Panhandle Eastern Pipe Line Co. v. Public Service Commission, 332 U.S. 507, 521, note 19, 68 S.Ct. 190, 197, 92 L.Ed. 128.
49
Respondents' last point is that insufficient weight was afforded the evidence concerning air pollution. Concededly, the testimony of Con. Ed.'s expert witness, the Commissioner of the Department of Air Pollution Control in New York City, was entitled to great weight. However, as the New York Commissioner himself admitted, it was not possible for him to establish a definite relation between injury to health and the stack emissions at the Waterside station.24 More importantly, it was not shown that other methods—particularly the use of gas presently available to Con. Ed. under other forms of service25—could not be used to solve the problem. Consequently, we cannot say that the Commission acted irrationally in concluding that Con. Ed.'s proof was insufficient. See Charleston & Western Carolina R. Co. v. Federal Power Commission, 98 U.S.App.D.C. 241, 234 F.2d 62.
50
Neither this Court nor the Commission holds in this case that sales to pipelines are generally more in accord with the public interest than other sales; nor do we authorize the elimination of direct sales of gas under appropriate circumstances nor the denial of a certificate to any arbitrarily chosen group of purchasers. All we hold is that the Commission did not abuse its discretion in considering, among other factors, those of end use, preemption of pipeline facilities and price in deciding that the public convenience and necessity did not require the issuance of the certificate requested. The judgment of the Court of Appeals must be reversed.
51
Reversed.
52
Mr. Justice HARLAN, whom Mr. Justice FRANKFURTER and Mr. Justice STEWART join, concurring in part and dissenting in part.
53
The Commission's denial of a certificate for the transportation of this natural gas rested on a combination of three determinations: (1) the inferior 'end use' of the gas, that is its use for the alleviation of air pollution resulting from the burning of coal in the Waterside Plant of Consolidated Edison in New York City; (2) the effect of purchases such as this in enhancing future field prices of natural gas; and (3) the likely pre-emption of future pipeline transportation capacity resulting from such purchases.
54
Though I regard the matter as less clear than the Court does, I agree that the legislative history of the 1942 amendments to the Natural Gas Act supports the Commission's power to consider inferior end use as a factor in denying Transco a transportation certificate for the gas in question. However, I cannot agree that the premises on which the Commission rested its conclusions as to field prices and the pre-emption of transportation capacity are adequate to justify affirmance of its denial of a certificate.
55
As will be shown, those conclusions were bottomed almost entirely on the proposition that most, if not all, direct purchases, at least those of substantial magnitude, would be against the public interest. Since I believe that the denial of a certificate in this case had to be premised on factors present in this particular transaction, I think the proper course is to remand the case to the Commission for further consideration on proper postulates.
56
At the outset, it is important to note the procedural context of our review. In denying a petition for rehearing, the Commission made clear that the 'end use' factor was neither of 'decisive' nor of 'determinative' importance; inferiority of end use was but one of several factors which together, and not individually, justified denial of this certificate in the Commission's view. These other factors failing, as they do in my opinion, the denial of the certificate cannot stand.
I.
Premises of the Commission's Denial.
57
I think it manifest that the Commission weighed against certification the fact that the sale to Consolidated Edison was direct to a consumer and hence not subject to normal Commission regulation of sales to pipeline companies for resale.1 The Trial Examiner referred to 'The Staff's opposition' as based, among other reasons, on the fact that:
58
'The proposal is obviously an attempt to evade the jurisdiction of the Commission over the sale of natural gas for use in the large consuming centers of the country and thus may be contrary to the public interest; * * *'
59
And the Examiner referred to the Staff's argument 'that this sort of non-jurisdictional activity by Consolidated Edison should be halted as an example to others who may similarly attempt to avoid regulation in this way.' The same argument was repeated to the Commission itself.
60
That the Commission adopted this approach of viewing this particular sale as but a facet of the broader direct-sale problem is clear from the reasons it states, 21 F.P.C. 138, as weighing towards denial of the certificate. Each of the considerations of effect on field prices and distribution of field supply is worded in the plural. The Commission throughout its report speaks as if it is presently forbidding access to the producer in the field by any one except pipelines purchasing for resale. That it is not restricting itself to the denial of the particular transportation involved in the X—20 service but is instead only denying that service because of the adverse effects that would result from committing itself to regularly allowing direct purchases in the field by nonpipelines, is apparent from the following:
61
'(I)f we were to grant this request we would soon be confronted with many requests of the same general character * * *.
62
'How much more serious is that impact (of large demand on limited supply) when it is in the form of multiple bidders * * *.
63
'And how long the pipeline can continue to buy in competition with nonjurisdictional, large volume purchasers * * * is at least a question.' Id., p. 141.
64
In its denial of a rehearing2 the Commission acknowledged that it considered the 'adverse effects on the public' of granting this 'and similar such authorizations' including 'the effect of stimulating increased purchases of gas in the field by distributing companies in substitution for the present, prevalent types of interstate natural-gas services involving purchases and resales by natural-gas pipeline companies * * *.' Id., p. 399.3
65
It is clear, then, that the Commission was concerned with the adverse effects it felt characterized most sales to distributing companies or consumers, rather than with anything offensive about this particular sale (excepting of course the proposed end use). What were these adverse effects of all direct sales? Two are central to the Commission's opinion. First, 'the authorization of this and like proposals would pre-empt for this usage capacity which would otherwise be available to meet more urgent and widely beneficial public needs * * *.' 21 F.P.C., at 141.4 Second, there is the effect on field prices:
66
'The impact of large demand on relatively limited supply is certain enough to raise rates and field prices if only one bidder is bringing that demand to bear on the supply. How much more serious is that impact when it is in the form of multiple bidders, each attempting to reserve to itself a firm supply. Inevitably, there would be upward pressure on rate levels in the fields. We do not believe we ought to encourage such when it is unnecessary. * * *' Ibid.
67
Thus, the Commission has quite evidently asserted a power to frown upon any transaction which does not take the form of a sale to a pipeline for resale. On that basis, it was in this case, and would hereafter be, unnecessary for the Commission to decide whether a particular sale to a consumer or distributing company results in a waste of jurisdictional resources or an unwarranted boosting of field prices. Since, in the Commission's view, sales not to pipelines, as a class, generally have these unfortunate characteristics, it is sufficient that the particular transaction is one of that class. The Commission has made clear that it was the harms inherent in the form this sale took that weighed against the issuance of a transportation certificate, not the unfortunate effects of the transaction itself. I cannot agree that the Commission had discretion to adopt this position when it had available to it far less drastic alternatives.
II.
68
Postulates on Which the Commission Should Have Proceeded.
69
Without purporting to exhaust the full reach of its discretion, the premises on which the Commission, in my view, should have proceeded will be now indicated. Basically, I think it was open to the Commission to decide whether the particular transportation service before it would tend to waste gas, unduly pre-empt pipeline capacity, or raise field prices. I think the Commission can properly assert this more limited power as an incident of its transportation certificating powers.5 It is quite true of course that Consolidated Edison need not have resorted to the Federal Power Commission if the purchase transaction had been possible without the interstate transportation of the gas in jurisdictional pipelines, since this was not a purchase of natural gas for resale. Note 1, supra. However, it does not follow that the Commission had to blind itself to the effects of the purchase and use of the gas when its authority to certificate the transportation of the gas was invoked. To recognize that the transaction was, as a practical matter, impossible without the use of jurisdictional facilities for the interstate transportation of the purchased gas is to acknowledge that this transportation is as integral a part of the transaction as was the sale itself. Whether the adverse effect of the transaction be a waste of a scarce resource, or pre-emption of pipeline capacity, or a substantial boosting of field prices, the transportation is as responsible for the effects as is the original sale. I see no reason why the Commission must certify, as in accord with the 'public convenience and necessity,' transportation which tends materially to further such undesirable results which are within the area of the Commission's legitimate concern when it is considering the public convenience and necessity of certificating a jurisdictional sale.
70
Assuming that it is results only made possible by jurisdictional transportation that the Commission wishes to consider, an attempted distinction between transportation and sale certification proceedings simply obscures the important question: what undesirable results are envisioned by § 1(b) to be the concern of the States and not the concern of the Federal Power Commission? We hold in this case that the economic waste of natural gas that might otherwise be available for jurisdictional transactions ending in superior uses is such a legitimate concern. Similar considerations pertain to the pre-emption of pipeline capacity. Note 4, supra. Finally, we have held in Atlantic Refining Co. v. Public Service Commission, 360 U.S. 378, 379, 79 S.Ct. 1246, 1249, 3 L.Ed.2d 1312, that the Commission must consider the effect on field prices for future jurisdictional sales of an excessive purchase price. Asserting power to consider these effects does not involve assuming jurisdiction over matters that Congress has reserved to the States in § 1(b), for it does not involve protecting citizens of either the producing or consuming State against harms that local regulatory bodies have the power to prevent. These effects being the legitimate concern of the Federal Power Commission, they are no less so in a certification proceeding for transportation than in such a proceeding for the sale of natural gas. Each of these effects, if materially furthered by the transportation being considered, can properly be relied upon, on a case-by-case basis, in the denial of a transportation certificate.
III.
71
Deficiencies of the Commission's Report.
72
If, as I have argued, the Commission has power to decide on an adequate record to deny a transportation certificate in part because the gas to be transported is to be used for inferior purposes or because that gas was purchased at a price adversely affecting the prices of later jurisdictional sales, I do not think there is any basis for the Commission's further claim of authority to consider as an adverse factor the mere fact that the sale was direct to a consumer or distributor. As to inferior end use or pre-emption of pipeline capacity, the latter being another aspect of the former, the invalidity of the Commission's claim is easily established. Once the Commission has weighed against the grant of the certificate the fact that it results in economic waste there is nothing added by the circumstance that it is also a direct sale to a consumer and the Commission's belief that most of such sales result in economic waste.
73
The Commission's consideration of the impact on field prices is more refined, although no more solidly grounded. The Commission did not merely consider that the price of these sales would be unregulatable and argue that therefore all sales to consumers or distributors must be forbidden. So it is not a complete answer to repeat what has just been said about the Commission's consideration of inferior 'end use' and pipeline pre-emption—that those factors can be fully considered on a case-by-case basis. The Commission passed beyond the possible problem of unregulatable prices to an economic argument, namely, that increasing even the number of theoretically regulatable bidders for gas in the field must, as a practical matter, create a difficult-to-control-and-regulate upward pressure on field prices. I consider reasonable the economics of the Commission's position,6 but unreasonable its finding of statutory authority for the Draconian solution it proposes.
74
In my opinion the Commission cannot attempt to protect its legitimate interest in lower field prices by denying sale or transportation certificates to any arbitrarily chosen group of purchasers. Such whimsy is not contemplated by the statute. Is there, then, a justifying basis for discriminating against purchasers other than pipelines purchasing for resale? It cannot be the fact that the use these purchasers propose is often inferior, for the Commission can consider this factor when the occasion arises. It cannot be the fact that the effect on field prices is worse, for prices paid by both pipelines and other purchasers can be considered by the Commission when passing upon the public interest either in a sale-for-resale or in a transportation certificate proceeding. I can find no justifying basis for the distinction sought to be drawn by the Commission between pipelines and others.
75
To the contrary, the discrimination against nonpipeline purchasers flouts the statutory structure by permitting the Commission to exercise greater regulatory power over transactions with one nonjurisdictional aspect (the direct sale) than the Commission has over transactions of which both aspects (sale-for-resale and transportation) are jurisdictional. Moreover, to recognize the discrimination against direct sales that the Commission proposes in order to reduce the upward price pressure resulting from increased numbers of bidders, is to ignore the fact that the statute contemplates and provides regulation for the use of pipelines both as wholly transportation or carrier facilities. There is no indication that this 'carrier' function of pipelines was to be limited to carrying for producers who would then sell in the State of destination. It also properly extends to carrying for and to wholesalers or consumers in the State of destination.7
76
These, then, in my opinion are the considerations which require a holding that it was an abuse of discretion for the Commission to hold sales to pipelines generally more in accord with the public interest than other sales. There is absolutely no rational basis, as I see it, for selecting distributing companies and consumers as the group of bidders to be sacrificed and eliminated in order to reduce the pressure toward higher field prices. There is no harmful characteristic of these bidders that is not fully shared by pipeline purchasers. Even worse, the purposeful elimination of this entire class of prospective purchasers clashes with the structure of a statute that was largely motivated by a desire to reduce the power of the pipeline companies.
77
This conflict is most clearly manifested in the violence that the Commission's proposal does to the statute's provisions for regulation of a wholly carrier function of the pipelines, for a wholly carrier function can only be served on behalf of either producers which have already sold directly to nonpipelines or on behalf of nonpipelines which have already purchased directly from the producers. It is inescapable that forbidding all transactions involving direct sales between producers and nonpipelines eliminates any wholly carrier function for the pipelines, i.e., eliminates one entire facet of the Commission's statutory jurisdiction. This statutory amputation—resulting in greater regulatory power over transactions with some nonjurisdictional aspects than there is over transactions all aspects of which are jurisdictional—is clearly outside the discretion of the Federal Power Commission.
78
Since the Commission regarded as necessary to its decision factors beyond its discretion to consider, the proceeding should be remanded to that agency for reconsideration. We cannot order the certificate granted, for there are results of this particular transportation which the Commission can and should properly consider but which were left unconsidered because of the erroneous broader grounds of the denial. On remand the Commission should not only consider and support with adequate fact findings the particular effects of this transaction on field prices and on Transco's future capacity to expand its pipeline services, but the way should be left open for it to give more careful consideration to the 'end use' factor in its decision. I must say that its previous consideration of this aspect of the matter seems to me to leave much to be desired, doubtless because of the over-all mistaken premises on which the Commission proceeded. In a reconsideration of the case upon correct premises, the air-pollution problem may take on a different significance, and whatever conclusions the Commission may reach on this score should in any event be accompanied with more convincing particularized findings.
79
For the foregoing reasons I would vacate the judgment of the Court of Appeals and remand the case to the Commission for further proceedings.
1
Section 7(e), 15 U.S.C. § 717f(e), 15 U.S.C.A. § 717f(e), provides:
'(e) Except in the cases governed by the provisos contained in subsection (c) of this section, a certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operation, sale, service, construction, extension, or acquisition covered by the application, if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Act and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied. The Commission shall have the power to attach to the issuance of the certificate and to the exercise of the rights granted thereunder such reasonable terms and conditions as the public convenience and necessity may require.'
2
In addition to the petitioning Federal Power Commission and respondents Transco and Con. Ed., several other parties have been involved in this litigation. The City of New York is a named respondent and the petitioners in No. 46 include the National Coal Association, the United Mine Workers of America, and the Fuels Research Council, Inc. Several parties have filed briefs as amici curiae in this Court, including the regulatory commissions of California, Michigan, and Wisconsin. These state commissions have argued in support of the Federal Power Commission's position.
3
See F.P.C., Natural Gas Investigation (1948), Docket G 580, Olds-Draper Report, pp. 6—14.
4
The cases in which the Commission has considered the end-use factor are collected in the Court of Appeals' opinion. 271 F.2d at page 949, note 27.
5
The Commission's long-standing conclusion that the use of gas under industrial boilers is an inferior use is amply supported by authority. See, e.g., Blachly and Oatman, Natural Gas and the Public Interest, 142.
6
Federal Trade Commission, Final Report to the Senate of the United States, S. Doc. No. 92, 70th Cong., 1st Sess., Part 84 A, Section 1(a) of the Act, 15 U.S.C. § 717(a), 15 U.S.C.A. § 717(a), refers explicitly to this report.
7
Section 11 of the Act, 15 U.S.C. § 717j, 15 U.S.C.A. § 717j, provides:
'(a) In case two or more States propose to the Congress compacts dealing with the conservation, production, transportation, or distribution of natural gas it shall be the duty of the Commission to assemble pertinent information relative to the matters covered in any such proposed compact, to make public and to report to the Congress information so obtained, together with such recommendations for further legislation as may appear to be appropriate or necessary to carry out the purposes of such proposed compact and to aid in the conservation of natural-gas resources within the United States and in the orderly, equitable, and economic production, transportation, and distribution of natural gas.
'(b) It shall be the duty of the Commission to assemble and keep current pertinent information relative to the effect and operation of any compact between two or more States heretofore or hereafter approved by the Congress, to make such information public, and to report to the Congress, from time to time, the information so obtained, together with such recommendations as may appear to be appropriate or necessary to promote the purposes of such compact.
'(c) In carrying out the purposes of this chapter, the Commission shall, so far as practicable, avail itself of the services, records, reports, and information of the executive departments and other agencies of the Government, and the President may, from time to time, direct that such services and facilities be made available to the Commission.'
Other indications that Congress initially contemplated state control over conservation are found in the remarks of Congressman Mapes, a member of the committee reporting the bill that became the Natural Gas Act, 81 Cong.Rec. 6726, and Col. Chantland, counsel representing the Federal Trade Commission before Congress, Hearings before a Subcommittee of the House Committee on Interstate and Foreign Commerce on H.R. 11662, 74th Cong., 2d Sess. 66—67.
8
Section 7(c) of the Act, as originally enacted in 1938, provided, in part, that:
'(c) No natural-gas company shall undertake the construction or extension of any facilities for the transportation of natural gas to a market in which netural gas is already being served by another natural-gas company, or acquire or operate any such facilities or extensions thereof, or engage in transportation by means of any new
or additional facilities, or sell natural gas in any such market, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require such new construction or operation of any such facilities or extensions thereof * * *.' 52 Stat. 825.
The Commission's proposed amendment was first introduced as H.R. 4819, 87 Cong.Rec. 4301, and later resubmitted as H.R. 5249. The bill, as proposed by the Commission, insofar as here pertinent read:
'No natural-gas company or person which will be a natural-gas company upon completion of any proposed construction or extension shall engage in the transportation or sale of natural gas, or undertake the construction or extension of any facilities therefor, or acquire or operate any such facilities or extensions thereof, unless there is in force with respect to such natural-gas company a certificate of public convenience and necessity issued by the Commission authorizing such acts or operation * * *.' Hearings before the House Committee on Interstate and Foreign Commerce on H.R. 5249, 77th Cong., 1st Sess. 1.
This section, as finally enacted, reads:
'(c) No natural-gas company or person which will be a natural-gas company upon completion of any proposed construction or extension shall engage in the transportation or sale of natural gas, subject to the jurisdiction of the Commission, or undertake the construction or extension of any facilities therefor, or acquire or operate any such facilities or extensions thereof, unless there is in force with respect to such natural-gas company a certificate of public convenience and necessity issued by the Commission authorizing such acts or operations * * *.'
9
S.Rep. No. 948 states that:
'The bill (H.R. 5249) would require a certificate from the Federal Power Commission to engage in the transportation or sale of natural gas or the construction, extension, or operation of natural-gas facilities subject to the jurisdiction of the Federal Power Commission. At the present time the Natural Gas Act requires a certificate of public convenience, only for the extension of construction or extension of service 'to a market in which natural gas is already being served by another natural-gas company.' The terms of this limitation are not defined by the act. Long preliminary investigations are required to determine whether or not the Federal Power Commission has jurisdiction to grant or to deny a certificate. Too, the Commission has held in the case of an extension by a gas company to a market already served by a competing company that the views or interests of competing fuel companies cannot be considered.
'Provisions of the Natural Gas Act empower the Commission to prevent uneconomic extensions and waste, but it can so regulate such powers only when the extension is to 'a market in which natural gas is already being served by another natural-gas company.' Thus the possibilities of waste, uneconomic and uncontrolled extensions are multiple and tremendous. The present bill would correct this glaring inadequacy of the act. It would also authorize the Commission to examine costs, finances, necessity, feasibility, and adequacy of proposed services. The characteristics of their rate structure could be studied. Obviously these are powers that Federal Power Commission should have and should exercise in the public interest.'
10
The passage excerpted and relied upon by the Court of Appeals should be read with reference to the footnote appended thereto. In this footnote, the Commission stated:
'In its Opinion No. 93—A, which accompanied its order of September 24, 1943, issuing a certificate of public convenience and necessity to Tennessee Gas & Transmission Co. for the construction and operation of a natural-gas pipe line from Texas to West Virginia, the commission stated:
"Interveners representing coal operators, labor unions, and railroads, having a vital stake in the coal industry in the Appalachian area, oppose the granting of a certificate for the construction of applicant's proposed natural-gas pipe line principally on the ground that the present and future fuel needs of that area can be adequately met by coal. It is contended that the use of natural gas for industrial and space-heating purposes constitutes a dissipation of the natural-gas resources, and threatens the coal industry with ruinous competition. Considerable evidence was adduced by these interveners for the purpose of supporting such contentions.
"We recognize the force of these arguments and are not unmindful of the economic and social aspects of the problem posed by these interveners. We are not authorized, however, to regulate rates for natural gas sold directly to industrial consumers, which class of gas sales furnishes the keenest competition to the coal industry. Nor does our power to suspend rates extend to indirect sales of natural gas for industrial purposes. It appears, therefore, that the Natural Gas Act does not vest this Commission with complete and comprehensive authority which would permit us to act as arbiter over the end uses of natural gas." F.P.C., The First Five Years Under the Natural Gas Act 15, n. 14. (Emphasis added.)
11
See the Commission's statement reproduced in S.Rep. No. 1234, 78th Cong., 2d Sess. 3—6. The Senate Committee itself recognized that, following the 1942 amendment to the Act, the Commission was directly concerned with conservation problems. Id., at 1—2.
12
Under § 7(a) of the Act, 15 U.S.C. § 717f(a), 15 U.S.C.A. § 717f(a), the Commission has authority to compel extensions, though not enlargements, of a natural gas company's transportation facilities unless 'to do so would impair its ability to render adequate service to its customers.'
13
See Hearings before a Subcommittee of the House Committee on Interstate and Foreign Commerce on H.R. 79, H.R. 1758, and H.R. 982, 81st Cong., 1st Sess. 165.
14
Id., at 3.
15
Id., at 165.
16
During the course of hearings held in 1947 on proposed amendments to the Natural Gas Act, Commissioner Smith summed up the position of the Commission and explained the language used in the 1944 report along substantially the same lines as we have pursued. Hearings before the House Committee on Interstate and Foreign Commerce on H.R. 2185, H.R. 2235, H.R. 2292, H.R. 2569, and H.R. 2956, 80th Cong., 1st Sess. 685—686.
17
The helplessness of a consuming State in this regard is dramatically illustrated by the opinion of the New York Public Service Commission in In re Cabot Gas Corp., 16 P.U.R.(N.S.) 443 (1936). The language used by the Chairman of the Commission is particularly relevant in this context:
'There can be but one opinion among those who believe in the conservation of natural resources. They should be developed not to benefit a few individuals but in the interests of public welfare present and future. Our natural gas resources ought to be conserved and there is probably no field where the Federal government acting in the interests of the entire country and to protect the welfare of the future could accomplish more than in the natural gas industry. From a conservation viewpoint, I thoroughly agree with Commissioner Burritt, and if I could see how a denial of the present petition would work to this end, I would vote to refuse the application; but will such denial produce the desired results?
'The field from which gas is to be taken by the petitioner is in northern Pennsylvania and southern New York. Apparently, far more of the gas will come from Pennsylvania than from New York and over the extraction of gas in the state of Pennsylvania, this Commission has practically no control. It is possible for Pennsylvania companies to take all of the gas from this field unless the New York companies remove the gas before the field is exhausted.
'Further, the Public Service Commission has been given no adequate authority to determine how the matural gas resources of this state, to say nothing of the resources of Pennsylvania, shall be developed. We have no powers directly to control the amount of gas that is taken from any field and our indirect powers are so limited that it is doubtful if much could be accomplished. The state of New York receives far more gas from sources located beyond its boundaries than it exports to any adjoining state and the conservation of natural gas resources in the various states cannot be properly brought about except through voluntary action of the states or by the Federal government. Neither one is yet operative and while
attention has been given to electric interstate commerce, no effective steps have been taken to conserve or regulate the distribution of natural gas, where it is so urgently needed.
'In view of the lack of authority conferred upon this Commission to conserve natural resources, the question becomes primarily what will be gained to consumers in the state of New York if the petition is denied. It is stated that about 80 or 90 per cent of the gas furnished by the petitioner will be used for industrial purposes and that only from 10 to 20 per cent will go to the general public, the inference being that the saving to the companies purchasing the gas will go to enrich a few stockholders. Let us assume such are the facts. Who will gain if those benefited by the petition are deprived of their profits or advantages by a denial of the petition? This Commission does not control the use that will be made of the gas from the field tapped by the petitioner. There are many other companies tapping the supply and we have no means of determining where, when, or to whom the gas will be sold. If restriction is imposed on the use of it in New York, it may go to Pennsylvania; and if the petitioner is not allowed to supply the areas which it is proposed to serve, the gas will go to other areas and there is no assurance that it will be used any more beneficially from a public viewpoint than it will be if the petition is granted.
'As stated, I am heartily in favor of the conservation of natural gas as well as other natural resources; but in this specific case, will the granting or the denial of the petition work to the benefit of the people of New York? The benefit to the area to be supplied by the petitioner is definite, it is known, it is sure. But if the petition is denied, who will be benefited? There is no assurance upon this point. The answer is speculative and uncertain. There is nothing to assure us that the denial of the petition would conserve the gas supply. It is not likely that the benefits would merely be diverted from one group or one locality to another?'
It might be argued that this attitude is out of date since the Commissioner was speaking prior to the enactment of § 11 of the Natural Gas Act. See note 7, supra. However, the success of § 11 can be measured by examination of the Olds-Draper Report, note 3, supra, at pp. 75—78.
18
The Commission has recently set field prices for sales for resale in the area where this gas was bought at 18 cents per Mcf. See 25 Fed.Reg. 9578. The sales price to Con. Ed. in this direct sale was 1 1/4 cents per Mcf. over the line at which the Commission is trying to hold field prices. Any reading of the Commission's opinion which does not keep this fact in mind is, we believe, bound to be incomplete.
19
Compare the cases which have held that it was error for the Commission to refuse to consider certain factors within its power of notice. E.g., City of Pittsburgh v. Federal Power Commission, 99 U.S.App.D.C. 113, 237 F.2d 741.
20
Many of the cases in which the Commission has certificated the transportation of gas pursuant to direct sales are listed in Brief for Respondent Michigan Consolidated Gas Co. in Opposition to the Petition for Certiorari, pp. 24—30, Panhandle Eastern Pipe Line Co. v. Federal Power Commission, 352 U.S. 891, 77 S.Ct. 129, 1 L.Ed.2d 86.
21
The Court of Appeals agreed with respondents that certain language used by the Commission indicated that the Commission was per se opposed to direct sales. The Court concentrated on the passage in which the Commission stated that certification would have the adverse effect of:
'(M)aking it more difficult to meet the requirements of smaller purchasers in the event arrangements of this type become widespread.' 21 F.P.C., at 399—400.
and it felt that this was tantamount to saying that:
'(O)nly pipe lines should purchase gas for only they engage in interstate transportation and thereby come under authority of the Commission.' 271 F.2d at page 953.
However, the thrust of the Commission's reasoning on this point can be better grasped by reviewing the proposition as it was argued to the Commission by its staff. The Commission's staff contended that:
'The purchase of natural gas by and transportation for the ultimate consumer, as proposed herein, may make it difficult for pipe line companies to purchase gas at reasonable prices for resale to other customers who require the gas for superior domestic and commercial uses and thus may be contrary to the public interest.' (Emphasis added.)
22
Cf. United States v. Detroit & Cleveland Navigation Co., 326 U.S. 236, 241, 66 S.Ct. 75, 77, 90 L.Ed. 38, where the Court upheld the Interstate Commerce Commission's forecast of the future public convenience and necessity over an objection that there was no absolute showing that the forecast would come true.
23
The amicus briefs of two California public utilities, Southern California Gas and Southern Counties Gas, reveal that the competitive bidding of California Edison Co., a large industrial user, for direct purchases in the field has already forced up the prices to domestic consumers in California. Brief Amici Curiae of the Southern California Gas Co. and the Southern Counties Gas Co. of California, pp. 13—14. Several other industrial users are also contemplating taking advantage of an X—20 type service. See Reply Brief for the Federal Power Commission, pp. 4—5. In fact, the record reveals that Transco has suggested the possibility of providing X—20 service to its other customer, R. 71a, and several of these customers are negotiating for such service. R. 63a—71a. It is interesting to note that an Assistant to the Vice President of Con. Ed. testified that the producers sold the gas directly to Con. Ed. with a limitation on resale because 'they (the producers) were allergic to proceedings before the Federal Power Commission.' R. 108a.
24
R. 48a, 111a.
25
At the time certification for the X—20 service was sought, Con. Ed. was using gas on an interruptible basis at a rate that averaged 78,578 Mcf. per day. A substantial amount of this gas was fired under Con. Ed.'s boilers, although not under the boilers at the Waterside station. No reason appears in the record why Con. Ed. could not have used the gas it was then receiving under its Waterside boilers to alleviate, if not solve, the air pollution problem. See R. 89a—92a.
1
The basic reach of the Natural Gas Act, 15 U.S.C. § 717 et seq., 15 U.S.C.A. § 717 et seq., is set forth in § 1(b), 15 U.S.C. § 717(b), 15 U.S.C.A. § 717(b):
'The provisions of this chapter shall apply to the transportation of natural gas in interstate commerce, to the sale in interstate commerce of natural gas for resale for ultimate public consumption for domestic, commercial, industrial, or any other use, and to natural-gas companies engaged in such transportation or sale, but shall not apply to any other transportation or sale of natural gas or to the local distribution of natural gas or to the facilities used for such distribution or to the production or gathering of natural gas.'
2
21 F.P.C. 399.
3
If there can be any doubt on this score, it is dissipated by the position taken by the Commission in the 'Summary of Argument' in its brief in this Court:
'The threat posed by the X—20 type of arrangement to the small consumer, the person for whom the protections of the Natural Gas Act were designed, lies in its potential to establish a new, unregulated, interstate market for natural gas—by the large industrial consumer purchasing directly from the producer—which will compete for new gas supplies with the regulated market over which the Commission currently exercises jurisdiction. * * *
'In the Commission's view, the new market which this and further X—20 transactions would establish (1) portends definite and lasting inflationary impact on gas prices generally, (2) would probably be devoted to end-uses inappropriate to the Act's purposes, (3) would disrupt patterns of industry growth carefully evolved during 20 years of congressionally-directed regulation, and (4) would be beyond effective state regulation.
'On the basis of its judgment that these damaging probable effects outweighed both (1) Con Edison's need for the gas, and (2) the inadequately shown contribution which burning the gas as boiler fuel might make to local air pollution control, the Commission denied Transco's application for a certificate as not being required by the present or future public convenience and necessity.'
4
I agree with the Court of Appeals that this consideration ultimately depends upon the inferiority of the proposed 'end use,' only now the end use is to be considered in the context of limited pipeline capacity rather than limited supply of gas.
5
Section 7(e), 15 U.S.C. § 717f(e), 15 U.S.C.A. § 717f(e), provides:
'(e) Except in the cases governed by the provisos contained in subsection (c) of this section, a certificate shall be issued to any qualified applicant therefor, authorizing the whole or any part of the operation, sale, service, construction, extension, or acquisition covered by the application, if it is found that the applicant is able and willing properly to do the acts and to perform the service proposed and to conform to the provisions of the Act and the requirements, rules, and regulations of the Commission thereunder, and that the proposed service, sale, operation, construction, extension, or acquisition, to the extent authorized by the certificate, is or will be required by the present or future public convenience and necessity; otherwise such application shall be denied. * * *'
6
That a greater number of bidders representing the same total demand as a smaller number of bidders would exert greater upward pressure on prices is a basis hypothesis of the antitrust laws which therefore forbid buyers to group together in dealing with a seller. Just as competition is stifled and price affected by competing sellers agreeing to sell through a single agent (and therefore at a single price), price is also affected by similar action by competing buyers. The Commission conclusion on this subfactor needed no supporting evidence.
7
Furthermore, viewing the matter realistically, the Commission must object as strenuously to a producer selling in the State of ultimate consumption as to a distributor or consumer buying in the State of production, for whether the direct sale between a producer and consumer takes place before or after the transportation of the gas is a matter easily manipulated by the parties and a matter which has no effect on the Commission's policy considerations. The upward pressure on field prices created by increasing the total number of bidders is the same whether the producer finds additional bidders in the consuming State or allows them to come to him in the field.
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